TNAG-0476-FCO40-541-Strength-of-garrison-in-Hong-Kong-1974 — Page 11

SECRET

DSWP REPORT

PINAL DRAFT

I.

INTRODUCTION

At their OPD (74)3rd meeting on 4 April 1974 Ministers endorsed

a paper by officials, (OPD (74)7), on the arrangements for a review

of defence commitments and capabilities.

2.

These arrangements called for a report from the Defence Studies

Working Party to the Steering Committee by mid June. The Report

should cover:-

.

b.

An examination of the consequences of reducing Defence

expenditure to each of:-

42% of GNP (about £3600m) by 1983/4

41% of GNP (about £3200m) by 1978/9

4% of GNP (about £3200m) by 1983/4

4% of GNP (about £2850m) by 1978/9

These figures

(1)

compare with the 1974/5 level of £3612m

(51% of GNP); and the Defence Budgets as forecast in the 1974 Long Term Costings (LTC) of £4300m in 1978/9 and £4500m in 1983/4. (All figures at 1974 prices).

An assessment of the changes in commitments, forces, capabilities and support to be considered in each of the

above cases, together with a review of the military, political and industrial implications and an assessment of the scope for reduction in support activities, the UK's

industrial base for defence, the attendant reduction in

R&D and in maintenance facilities.

Note 1. The defence budget totals in this paragraph are higher than

those quoted in OPD (74)7 because of subsequer t firming-up or the provisional estimate of GNP growth made in the aftermath of the three-day week.

SESECRET