TNAG-0476-FCO40-541-Strength-of-garrison-in-Hong-Kong-1974 — Page 64

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vii.

France.

The French will be critical of any UK cuts

in defence efforts in and around Europe, and

will make this clear. Some Frenchmen could

regard any cuts as a further sign of loss of

political influence; others could see them as

an indication of a more realistic approach to

economic management. There may also be

implications for our prospects for industrial

and technological co-operation with France,

with wider consequences for our future position

in the Community.

Industrial Implications

J

107.

Total expenditure on equipment in 1978/79 at the Critical level

would be £1558M compared with £1300M in 1974/75; so provided

productivity increases at about 3% a year, there would be no great

change in the total numbers employed in industry, compared with the

present position until the second half of the Costings period. It

is however clear that within this broad picture, there are particular

firms and locations which might suffer, some of them severely,

since defence work sufficient to sustain between 15,000 and 20,000

jobs would no longer be available to them. For example, the scale

of cuts in the helicopter programme would threaten the continued

existence of Westland Helicopters at Yeovil and the Rolls Royce (1971)

Small Engine Division near Watford, while the cuts in the RN ship-

building programme would result in the loss of a substantial amount

of work which would otherwise have been placed on Tyneside and

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