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CONFIDENTIAL

(c)

include an option for deployment to the Southern

Region amongst the tasks envisaged for the IK

land and air force contributions to SACFIR'S

strategic reserve;

(a)

increase their capabilities for effective and

timely reinforcement of the Northern Region

beyond the current proposals.

To these ends they suggest a number of compensatory measures which

we might take to mitigate the effect of our reductions (see

paragraph 10(a) of Annex B); and they wish us to continue consulta-

tions with them.

9. If we were to do anything of military significance to meet

these points within the resources we have allocated to defence,

we would need to shift resources from one area of NATO to another

and hence change the strategic priorities underlying our 3rd

December proposals. I cannot recommend such a course; nor has

NATO made constructive proposals of this kind. But I do recommend,

subject to stringent conditions, certain gestures to meet the

points of concern to NATO. They would cost us little or nothing;

but they would be of considerable political significance.

10.

Accordingly I propose to offer certain measures to NATO

without further ado, and announce them in the Defence White Paper.

They are:-

a.

Conversion of HERMES to CVS role 2 years earlier,

in 1976 instead of 1978.

CONFIDENT JAL

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CONFIDENTIAL

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