(DEFENCE AND EXTERNAL AFFAIRS SUB-COMMITTEE)
21 January, 1975.]
once
Mr. DAVID GREENWOOD.
one has a grand exercise with a 10 year perspective which is against the background of some rather ques- tionable assumptions about, for example growth, one runs the risk of giving the impression one has stabilised some- thing for a long period of time which may have to be worked over again very soon. On the actual management of the exercise one gathers from a variety of sources including of course various press accounts that a series of options were indeed considered. In other words, that alternative expenditures against alternative capabilities were indeed con- sidered which is obviously something which seems to me to make sense because it defines the budgeting problem correctly rather than fixing a figure first and then doing some exercises or defin- ing a defence capability, rigidly, and simply working out the bill thereafter.
Dr. Miller.
30. As an economist, would Mr. Greenwood comment on whether he believed that here might be some advant- age to British industry in having, as it were, let loose into it, or entering into it 50,000 people who will be well trained and many of them highly skilled? Does he think that this could have some bene- ficial effect over a period of years on British industry?—Yes, indeed. The 35,000 uniformed personnel and 15,000 United Kingdom civilians will-many of them at least-have acquired in associa- tion with the armed forces or the Ministry of Defence certain skills valu- able to the economy. What I would not go along with, if it was an implication of the question, is that a 50,000 release of manpower over a period of 10 years represents something which will make a major contribution to the solution of the nation's economic difficulties.
31. I was not saying that?—It is not big stuff.
Mr. Finsberg.
32. On this question of manpower and savings, does Mr. Greenwood think that the savings in fact are real or were the original projections meaningless?—I would like, if I may, to make two kinds of points here. The first is that I think the original projections had by the end of 1973 become self-evidently unobtain- able in relation to revised prospects
[Continued.
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about the development of the economy and the fact that defence simply could not be allowed to take what had been previously planned whilst total resources available were contracting. That would be the first point. In that sense the original programme could not have been maintained. Secondly, in relation to the question, are these genuine savings, I think one has to acknowledge that there are three valid ways of looking at this kind of exercise. The first is that it is a setting out of a revised programme and budget for defence, which will make fewer claims on resources than the original design-the expenditure path to £4,500 million-thereby it makes fewer claims on resources than would otherwise have been made. Secondly, it stabilises the defence budget at just above its exist- ing level. Hence, defence will make no claims on any additional resources that may be available from growth, and it releases resources-the manpower in defence forces and civilian employees and defence industry which have been mentioned.
Chairman,
33. Would you say that one of the objectives of the Review was to preserve the major equipment programmes which the services consider to be of prime The service chiefs had importance?
something to say and in a major sense got their way? -I think I would refer to what I said in the memorandum, and in particular in the annex where I identify what I believe to be a reason- ably consistent line on priorities through this programme. I then raise certain questions about it, and these are in para- graph 15 of my paper, that the altera. tions that have been made in the pro- curement area are those which are con- sistent with the line on priorities that has been carried through in the manpower and commitment area. I think in look- ing at the precise content and balance of the naval programme it may be that the Navy have been prepared to accept some stretching and modifications in order to safeguard their through deck cruiser programme. I think in relation to the MRCA there are still some remaining questionmarks because minis- ters have been very circumspect indeed in the precise wording of their statements to the House of Commons,