CONFIDENTIAL
CONFIDENTIAL
NEW PATTERNS OF DEFENCE EXPENDITURE
74. As a result of the Defence Review the cost of the planned
defence programme over the period to 1983-84 has been reduced from
an average of £4,300 million a year to an average of less than £3,800 million a year. As compared with the forecast of expenditure
completed early last year it is as follows:-
(£m 1974 Survey Prices)
annual average
1975-6
Previous
Programme
1976-7 1977-8 1978-9
4,000 4,070 4,150 4,300
1979-80
1983-4
4,450
Defence
Review
3,700
3,800 3,800
3,800
3,790
Difference
300
270
350
500
660
75. The figures for the last five years are necessarily approximate at this stage. The total savings over the review period, estimated
at over £4,700 million
including a reduction of £750 million
in the final year, represent a 12 per cent reduction from
the previous programme.
76. On the assumption that GNP grows at an average rate of about 3 per
cent a year over the period as a whole the effect of the defence
review decisions would be to reduce the share of resources absorbed
by defence from the estimated 1974-75 level of about 5 per cent
of GNP to 43 per cent of GNP over the next ten years. 77. In terms of major resources manpower, equipment and "other"
(buildings and miscellaneous stores and services)
the
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CONFIDENTIAL
CONFIDENTIAL
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