TNAG-0478-FCO40-543-Strength-of-garrison-in-Hong-Kong-1974 — Page 25

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reductions are possible in our forces and defence facilities

OVCI'SEAB. Provisional decisions on these reductions have been

made) but

we must now consult our allies and partners on Me

precise scope and timing of these changes, Consulta timy zi!!

begin at once.

6. The brood financial effect of the Government's plan wil

be to reduce Defence expenditure from ito present level of

about 5% of GNP to 42% of GNP over the next ten yerope.

7. The changes we plan will be made deliberately and

i

progressively and will enable the necessary manpower adjutante

to be made with a minimum of redundancies, both Service and

civilian. For those who are made redundant Fair termin 2311 5

offered. Similarly the changes in our equipment programme & i.

+

be made as smoothly as possible and with the maximum of nothe

to enable industry to adjust its plans.

8. Early next year, when our consultations, both inside sond

outside NATO, have been concluded, we shall submit to Prizmend

a White Paper describing our decisions and how they are be by

put into effect.

CONFIDENTIAL