TOP SECRET
Page 198
hitherto been financed outside the defence budget by a Housing Loan,
and for an additional £2 nillion because it had been necessary, for
non-defence reasons, to accept a slower rundown of our forces in
Malta.
The proposals would also produce substantial reductions in defence expenditure overseas; assuming that we were able to withdraw a second brigade fron Germany to this country in 1968, gross stationing costs (with no allowance for offset payments or earnings on sales of defence equipment) would fall from £252 million in the current year to $191 million in 1970-71 and to £130 million in 1975-76. Against these
savings the cost of mitigatory aid to Singapore and Malaysia was
estimated at £10 million in 1968-69 and £20 million in 1970-71.
The main issue before the Committee was how to present publicly
our plans for the Far East in the light of the consultations that had
taken place with the Governments of Australia, New Zealand, Singapore
and Malaysia, all of whom had shown themselves strongly opposed to our
stating publicly now a date for the withdrawal of our forces from Singapore and Malaysia. If we were to announce a date for withdrawal wo should
not obtain even the acquiescence of these Governments in the planned
rundown of our forces in the Far East and we might well cause the
collapse of the present Government in Singapore which would face a
situation which it was not yet ready to deal with. In addition we
should be compelled to state now how we intended to maintain a
capability for use in the Far East after our withdrawal from Malaysia
and Singapore; this was a matter that we ought to leave open for the present. It would be better therefore, in the White Paper that would have to be published before the Summer Recess on our defence
plans to avoid announcing any date for the withdrawal of our forces from
Malaysia and Singapore but to plan on reducing our force declarations
and commitments in order to achieve the necessary savings. The time-
table for this White Paper was now very tight and it would be necessary
for the Committee to agree on its terms at a further meeting on
3rd July and for the Cabinet to approve the document in the following
week, if it were to be published and debated before the Summer Recess
and if the political departments were to be able in advance to inform the various Governments concerned, particularly in regard to changes
in our force declarations under SEATO.
-3-
Page 198
TOP SECRET
Page 198