SEOR EYES A

AYES

with oned fu kis ! Mr your

necessary; and that our commitments outside the NATO alliance must

be reduced. It is not necessary to rehearse in detail the various

redu

measures upon which the Government decided. But we announced our

intention to reduce defence expenditure as a proportion of GNP

by about 1%, to 41%, over the next 10 years. In money terms

wakeup

this meant that substantial savings measured against planned

programmes, would-be made, rising from £300 million in 1975/76 to

about £500million a year by 1978/79, and to some £750 million a year

by 1983/84; and a total saving of £4700 million over the period.

6.

I must emphasise that in military terms these were painful steps

to take; and that our NATO allies, while sympathetic to our economic

is pack

difficulties, [felt and expressed considerable concern at the scale of

reduction we proposed and their effect on NATO's political and military

capabilities. I want to make this very clear; that even our first

line of defence of the UK, our military contribution to NATO could

not be exempted from cuts and that our economic situation was such as

to necessitate overall measures so far-ranging as to seriously disturb

our major Allies. You will therefore understand with how rigorous

an eye we had to view our military commitments outside the NATO

Alliance

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7. (We are therefore) proposing two steps. The first, is to limit

25%

*

our contribution to 25%. The second is to limit the size of the garrison

what yn and we are and foololo to ally pocommning to [no more than is absolutely necessary. We have therefore undertaken

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careful and prolonged study of the minimum garrison that would be

opoma / adequate

ato.]

adequate. In 1974 the garrison comprised 5 infantry battalions, an

artillery regiment, an armoured reconnaissance squadron, engineers,

a frigate and patrol craft, and a helicopter aquadron. At September

74 prices it cost about £50m, 600,000,000 HK dollare. Careful study

*

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4

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