Page 777 former allies exhibits all the symptoms of the potential aggressor. No one can claim that the world to-day is in a markedly more peaceful condition than in 1938; we should certainly not devote less of our resources to defence now than then.
History of Recent Discussions
5. For the year 1948-49 my colleagues will recall that the Defence Budget was fixed in the spring of 1948 at £693 million, including £60 million of terminal expenditure. We decided, when the Berlin situation became acute, to institute a modest re-equipment programme and to retain additional men with the Colours. The effect of these decisions matured in 1949–50, when a Budget of £760 million, including about £14 million terminals, was agreed. This will now be exceeded, due to the special measures in connection with Hong Kong and the additional Western Union production programme. It was in the course of the discussions last autumn that the Chancellor of the Exchequer pressed me strongly to have prepared a long-term defence plan designed to keep our annual financial provision under this head down to £700 million. To enable this to be done and with my approval the Chiefs of Staff set up an inter-Service Committee with a civilian chairman to draw up a plan showing what forces should and could be maintained on this figure over the three years 1950–53. This body was the Harwood Com- mittee, whose report was submitted to the Chiefs of Staff in March last. In June, after careful examination, the Chiefs of Staff reported that they agreed generally with the Committee's line of approach to the problem remitted to them and that it would be impossible on £700 million to maintain larger forces than the Committee proposed. Indeed, subsequent Departmental scrutiny had already revealed that the Harwood proposals would in fact cost over £750 million. The Chiefs of Staff took the view that the implications of the proposals were so grave and involved the taking of such risks and the abandonment of so many hitherto unchallenged commitments that they had no alternative but to seek Ministerial guidance as to which of the risks could be accepted politically.
6. The following is a brief statement of the consequences which would have resulted from acceptance of the Harwood proposals :-
(a) inability to give anything like a satisfactory answer on the United Kingdom contribution to Western Union Forces in the next few years; (b) reduction of our Occupation Forces in Germany by April 1951 from 58,000 to 47,900 and complete withdrawal from Austria and Trieste by that date with a further reduction of British troops in Germany by 1953 to one division (21,600);
(c) the reduction of our air strength to a point at which the R.A.F. could take virtually no part in strategic bombing in addition to carrying out its other necessary tasks, with the result that we should have little to offer by way of offset to our limited land forces contribution to Western Union;
(d) a visible reduction of striking forces of all arms at the very time when the Atlantic Pact Organisation is being developed and the United States are preparing to contribute heavily in money and equipment for the strengthening of the democratic Powers;
(e) reliance upon the United States for the defence of the Middle East in war except for initial covering forces, and reliance on the United States Navy for the control of sea communications in the Mediter- ranean a policy which subsequent developments have shown to be based on false assumptions as to American strategic conceptions; (f) reduction of our forces in the Middle East to a level barely sufficient for garrison purposes; there would have been no kind of reserve for use in emergency. The loss of our whole position in this area and in the territories farther East to which it is the key would surely follow; (g) withdrawal of all United Kingdom forces in peace from the West Indies,
South America, South Africa and the Indian Ocean;
(h) a proposal to hand over to Australia and New Zealand responsibility for Page 77 Naval forces in South-East Asia and phe Indian Oceana respon- sibility which they were in no position to accept and which would certainly have led to serious political difficulties;
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(1) the reduction of our garrisons overseas to a point at which they would
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Page 778 0₤1097 have been capable of little more than providing for internal security, and a reduction of Naval. forces overseas on which we have always relied for the rapid reinforcement of threatened points; and (k) at Home, the abandonment of defence installations, including dockyards at Portland, Sheerness and possibly Chatham, and the disbandment of no less than 43 regular regiments in the Army and also of the Royal Marines. The acceptance of such reductions would have shown to the world a serious decline in our military strength and would have had a deplorable effect both in this country and abroad.
7. A preliminary and, at that time, inconclusive discussion of the situation took place under the Prime Minister's chairmanship on 5th July last. Being convinced myself that no acceptable plan could be devised on the basis of a money allocation of £700 million, it seemed to me that the most constructive action could take would be to discover at what minimum level it would be possible to foreshadow a Defence Budget which, while taking account of all practicable economies and proposals by the Harwood Committee and of constant pruning of administrative costs, would permit the avoidance of the worst of the results detailed above. The defence budget approved for 1949-50 is £760 million to which must be added commitments which we have incurred under the Western Union arrangements and obligations which we have already assumed in regard to the defence of Hong Kong. Moreover, the findings of the Harwood Committee and the investigations which followed it made it very plain that, at the present level of expenditure, we are failing to make even the minimum provision for re-equipment necessary to avoid a progressive decline in the fighting quality of our forces. Considering the problem as a whole I felt it to be unrealistic to suppose that any acceptable solution could be sought on a level of less than £800 million. In these circumstances I considered it necessary to initiate a fresh study on different assumptions, the main features of which were-
(i) A limit on the annual estimates of £800 million, plus a margin of
£10 million for contingencies;
(ii) A higher priority to the requirements of the Cold War, even if this involved spreading our re-equipment programme over a somewhat longer period than up to 1957; and
(iii) Service man-power to be reduced to 700,000 by 31/3/51 and to 650,000
by 31/3/53.
8.
These assumptions reflected my view, from which I think my colleagues will not dissent, that the dominating feature of world policy to-day is the Cold War and that it would be wrong, for the sake of realising our full strength at a later date, to compromise our ability to wage it. My suggestion as regards man-power was aimed at achieving a practical compromise between continuing with man-power on the present scale (i.e., in the neighbourhood of 750,000), which is clearly beyond our means if reasonable provision is to be made for re-equipping them, and on the other hand of accepting a programme of the character outlined in the Harwood Committee report involving a fall to some 565,000 men and women, which subsequent analyses had shown to be unacceptable if the require- ments of the Cold War were to be met.
9. In response to these instructions the two reports (Annexes B and C) have been prepared. The first is the report of an inter-Service Working Party on the Defence Budget over the next three years prepared in the light of the second document which is a study by the Chiefs of Staff Committee of the strategic aspects of the matter.
10. I consider that these reports represent an important advance towards securing a practical and acceptable policy for defence. Their main features may be summarised as follows:
(i) The keynote of the plan is the emphasis it places on winning the Cold War with the underlying thought that if this is done we may hope not to be called upon to fight any other kind of war. The practical effect of this principle is that the Army, which cannot simultaneously bear its present burden in the Cold War and prepare for a major war, will give
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Page 77riority to the former. In the Navy and Air Force, where the same
Conflict does not arise to the same extent, the Chiefs of Staff advise that the requirements for a major war should take precedence. (ii) The Chiefs of Staff, as in earlier studies, define the three main pillars of our strategy as the defence of the United Kingdom, of our sea communications and of our position in the Middle East. The defence services must be organised to cover the requirements of the Cold War and in co-operation with our allies in war to secure the main pillars of our strategy. (iii) The Chiefs of Staff proceed to analyse the main ways in which a Russian offensive would be directed and on the basis of this study and of prin- ciples (i) and (ii) above they place such defence requirements. functionally in the following order of priority:
(a) Success in the Cold War;
(b) The defence of the United Kingdom against air attack;
(c) The security of sea communications vital to the United Kingdom, and of the approaches to our ports and harbours against mining attack;
(d) The retention of the Middle East;
The provision of forces for Western Europe; and (f) The general build up for an ultimate offensive.
11. The effect of translating this policy into actual forces is described in paragraph 19 of the Chiefs of Staff Report (D.O. (49) 65). It will be noted that in consequence of the more adequate man-power figures which flow from the larger budgetary limit it is possible to avoid the following undesirable features of the Harwood Report:-
(a) The rolling up of units of the Army on the scale described in para- graph 6 (k) above and the decline of our Cold War effort which would inevitably follow from the reduction of our overseas garrisons in Germany and elsewhere;
(b) The lamentable effect on world opinion of large reductions in the Armed Forces, in particular on the Atlantic Pact and Brussels Treaty Powers. (c) The sharp decline in our position as a world Power which would follow on the reduction of our overseas garrisons and armed forces abroad, for example the scaling down of our forces in the Far East (which is in any case quite impracticable at present); the withdrawal of all United Kingdom forces in Greece, the West Indies, South America, South Africa; and the withdrawal of naval forces from the East Indies. (d) The adverse effect on recruitment and on contentment in the Services of
these large-scale withdrawals and disbandments.
12. It is important that the Committee should understand that the scheme which I now present involves the acceptance of a number of serious risks. The gravest among them is the fact that we should be in no position to face a war emergency unless a period of warning could be counted upon during which our rearmament programme could be greatly accelerated. This feature runs through the whole programme as it inevitably must in any programme, keyed to an exacting financial limit. If we are to be more ready for a major war at short notice the cost would rise steeply. Other risks are :—
(i) The small size of the Air Force in relation to its tasks in war. Fighter Command, even when expanded as proposed in the programme, will attain between one-third and one-half of the strength recommended by the Air Defence Committee. The size of Bomber Command and indeed of the front line generally bears a similar relation to its commit- ments. Moreover, the prospective lack of reserves of equipment will be accompanied by a nearly complete absence of reserves of air crew. If war were to come without a considerable warning period during which reserves and productive capacity could be built up, our air forces would not survive more than a month of intensive fighting.