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and this was reflected in
Ministers further agreed that the studies in general should be under- taken on the basic assumption that we could not plan on announcing a fundamental change in our external policies only one year after the completion of the Defence Review, and that our priorities in defence deployment and expenditure would be based on those agreed in the Defence Review. (This basic assumption did not of course apply to the additional study on total withdrawal from, or minimum presence in, the Far East).
In the Defence Review Ministers took the view
the 1966 Defence White Paper that the first purpose of our armed forces
was to defend the freedom of the British people, and the security of the United Kingdom depended primarily on preventing war in Europe. Europe must, therefore, have the first priority, and in Europe the continuance of the North Atlantic Alliance was recognised as vital. In the Middle East we had important economic interests but we declared that prolonged retention of military force was not the most suitable means of protecting them;
on the other hand, immediate total withdrawal would carry a grave risk of bringing chaos to the area. In the Far East, where our economic interests were
smaller, we saw the greatest dangers to peace in the next decade and recognised that a military presence was of special importance not only to ourselves but also to our major ally, the United States, and to our Commonwealth partners, notably Australia and New Zealand. The studies loading up to the White Paper did not envisage that our interests required us to maintain a military presence specifically in Singaporo and Malaysia in the longer term; but to avoid projudicing our present position the White Paper
was confined to the statement that we believed it right to continue to
maintain a military presence in the area, and contemplated withdrawal from these bases as soon as they ceased to be available to us on acceptable conditions and reliance thereafter on facilities in Australia.
4. The Defence Review set a financial target of £2,000 million at 1964 prices to be reached in 1969/70. The 1966 Long Term Costing gave a figure of approximately £2,350 million (£2,100 million at 1964 prices) for defence expenditure in 1970-71. Annex B is a statement of the foreign exchange costs included in this budget and also includes a summary of service manpower strengths by theatres.
Aims of New Studies
5. The primary purpose of the new studies was to see whether our
objectives could be achieved on the basis of smaller forces. In view of Ministerial discussions we have in the studies considered the possibility
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