TNAG-0055-FCO40-91-Defence-review-1977 — Page 68

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40,

PHER/CAT A AND BY BAG

C.O. tel. to H.K. No 816

PRIORITY FOREIGN OFFICE AND COMMONWEALTH OFFICE TO CERTAIN MISSIONS

GUIDANCE NO. 91 28 APRIL, 1967 (ZD)

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FORCE DEPLOYMENTS IN THE FAR EAST.

GUIDANCE NUMBER 90.

YOU SHOULD NOT VOLUNTEER ANY COMMENT. IF ASKED, YOU MAY SPEAK ON THE RECORD AS FOLLOWS. YOU SHOULD START BY DRAWING ON PARAGRAPH 3 OF GUIDANCE NUMBER 40, STRESSING THE CONTINUING NATURE OF THE DEFENCE REVIEW AND THE FACT THAT SUBSTANTIAL WITHDRAWALS FROM THE FAR EAST HAVE ALREADY TAKEN PLACE AND MORE HAVE BEEN ANNOUNCED. YOU MAY GO ON TO SAY THAT POSSIBLY, IN THE LIGHT OF OUR CONTINUED NEED FOR ECONOMIES IN OVERSEAS EXPENDITURE, FURTHER REDUCTIONS, BEYOND THOSE ALREADY ANNOUNCED, MAY WELL BE REQUIRED SEMICOLON BUT THAT NO DECISIONS HAVE YET BEEN TAKEN. IN MATTERS OF THIS NATURE H.M.G. ARE OF COURSE VERY CONSCIOUS OF THEIR OBLIGATIONS TO THEIR FRIENDS AND ALLIES AND THE NEED TO CONSULT THEM.

2. FOR UNATTRIBUTABLE BRIEFING AND CONVERSATIONS WITH RELIABLE CONTACTS, YOU SHOULD SAY, IN ADDITION TO THE ABOVE, THAT WE HAVE BEEN GIVING A GREAT DEAL OF VERY HARD THOUGHT TO OUR GENERAL ECONOMIC POSITION AND TO THE NEED TO GET OUR LONG TERM POLICIES INTO A PATTERN WHICH WOULD ENSURE A HEALTHY ECONOMIC BASIS FOR THE COUNTRY'S FUTURE. WE HAVE FACED A RECURRENT SERIES OF ECONOMIC CRISES SINCE THE LAST WAR, AND WHILE IN THE SHORT TERM WE HAVE BEEN MAKING VERY GOOD PROGRESS AND HAVE SUCCEEDED IN GETTING STERLING STRONG AGAIN, WE MUST GET THE LONG TERM PATTERN RIGHT. TO THIS END, AS THE CHANCELLOR OF THE EXCHEQUER SAID IN HIS BUDGET SPEECH, WE MUST BRING OUR LONG TERM PUBLIC EXPENDITURE PROGRAMME INTO LINE WITH GROWTH PROSPECTS AS WE NOW SEE THEM. WITHIN THIS GENERAL PICTURE THE SIZE OF OUR TOTAL GOVERNMENT EXPENDITURE OVERSEAS MUST BE A MATTER FOR GRAVE CONCERN. SINCE DEFENCE EXPENDITURE OVERSEAS REPRESENTS THE LARGEST SINGLE ITEM, WE MUST THEREFORE ARRANGE OUR LONG TERM POLICIES SO AS TO EFFECT SIGNIFICANT ECONOMIES IN THE DEFENCE FIELD.

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3. IF ASKED