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development of technology and the growing sophistication of modern
weapon systems. The cost of the planned programme was estimated
to increase (at 1974 Survey Prices) from £4,000 million in 1975-76,
to £4,070 million in 1976-77, £4,150 million in 1977-78, £4,300
million in 1978-79, and an average of £4,450 million in each year
from 1979-80 to 1983-84.
6.
Throughout the post-war period Britain's economic performance
has lagged behind that of her major European Allies. For many years
our annual average growth rate has been little more than half that
achieved by France and the Federal Republic of Germany. For this
reason and because the economic situation is now more serious than
at anytime over the last 25 years, the Government decided that
resources must be released for investment and improving the balance
of payments. These should be the first calls on our resources in
solving our economic problems. The defence programme, with its
considerable demands on skilled manpower and industry, should play
its part in this process; and the burden of defence expenditure
should be brought more into line with that of our major European
Allies. Planned British defence expenditure in 1974 was estimated
at 5.8 per cent of GNP on NATO definition, while that of France
was 3.8 per cent, and of the Federal Republic of Germany 4.1 per
cent (or 4.9 per cent including Berlin Aid)*.
* Defence expenditure as a percentage of GNP is not the only way of comparing the burden of defence expenditure on the economy; but it is the best single readily-available measure of the defence effort in relation to a country's resources. The table opposite_7 (fig. 1) gives a comparison of the defence efforts of NATO countries in terms of percentage of GNP together with comparisons of total and per capita expenditures.
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