TOP SECRET
Page 200
On the other hand, it was argued that however desirable
economically it might be to achieve greater savings or to achieve the savings envisaged at a faster rate, the considerations advanced
in the report were decisive in demonstrating that the measures
necessary to achieve such larger and faster savings would not be com-
patible with our interests, though the process of disengagement
contemplated in paragraph 12 of the report should be completed by
the mid-1970s rather than the second half of that decade. The
rate and level of savings which were envisaged in the studies had already been approved by Ministers in their previous discussions as
the basis on which official studies were to be carried out.
comparison with the rate of defence expenditure in 1966-67 and 1967-68 was not wholly valid since delays in ordering necessary
equipment in consequence of the time taken by the earlier Defence
Review, made it inescapable that there would be a compensatory increase in expenditure in latter years. To carry out further
The
studies on a different basis would involve considerable further
delay and would inter alia therefore delay the achievement of the
savings through the reduction of our commitments which was envisaged.
Furthermore, the studies which had been carried out amply demonstrated
the danger to our interests of planning on a more rapid rate of with-
drawal from the Far and Middle East. The course of events might
well however permit such earlier withdrawals to be made in one or more
of the areas concerned and we should take advantage of such events if they
occurred: but it would be imprudent to plan on the basis that they
would in fact make earlier withdrawals practicable. Moreover, even
if in the event they did so, the Armed Forces would find it difficult
to achieve a faster rate of demobilisation, since the rate of run-
down of our forces which was already envisaged would raise serious
problems.
-5-
Page 200
TOP SECRET
Page 200
(97793)