TNAG-0479-FCO40-544-Strength-of-garrison-in-Hong-Kong-1974 — Page 111

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DECRET

CABINET 31 OCTOBER: DEFENCE REVIEW

1.

The memorandum by the Prime Minister (C (74) 116) which Ministers will have before them is almost identical

with the draft considered by the Defence and Oversea Policy Committee at their meeting on 23 October. Apart from some corrections to the figures the changes are essentially

editorial.

2.

We regard the proposals outlined in the paper as a satisfactory outcome to the Defence Review. Provided they are properly handled, they should not cause serious damage

to our security or to British interests overseas. The Secretary of State's main objective will be to secure Cabinet

endorsement for the paper as it stands. In doing so he will wish to give maximum support to the Prime Minister and the

Secretary of State for Defence.

3.

The following paragraphs identify areas which may give rise to criticism, and suggest arguments which the Secretary of State might use.

THE PROPOSED LEVEL OF DEFENCE EXPENDITURE

4. At the meeting of OPD on 23 October the Chancellor of the Exchequer argued that it would not be possible, politically or economically, to sustain the level of defence expenditure

and that it would be better to plan on a lower level now than be forced to make further reductions later.

proposed;

SECRET

/We do