TNAG-0479-FCO40-544-Strength-of-garrison-in-Hong-Kong-1974 — Page 127

(47893) Dd.145173 400m 5/73 G.W.B.Ltd. GA363

NOTHING TO BE WRITTEN IN THIS MARGIN

SECRET

macle

Pub

may be that certain of the European Allies will

argue that the cost of our armed forces are/un-

necessarily high relative to theirs by our insistence

on the expensive luxury of all volunteer forces.

there are two counter arguments. In the first place,

we believe that all-volunteer forces are more cost-

effective - and it would I think be fair to conclude

latest from Dr Schlesinger's finencial year tops/ Annual Defence Department leport that you agree with us

The trend to an increasingly short conscript term in several European armies is a cause of some

concern to us. Secondly, even if one mikes allowance

for extra expenditure on militery pay, it appears

that we are still spending at least as much on

I

defence as do Trence and Gerran". Our smaller

militery nonpower is compensated for by other factors

And * since we pre

such as feator use of civili∙ns.

of FRA Spending the same sums on affect

France and Germany

so much poorer than them, the strain on our economy-

hope is relatively very much greater. We connot offl

to maintain parity in defence cfforts on the basin

of a widening gap in national resources.

10. Our relative balance of payments position also

hes to be trken into account. We have had deficits

on our visible trade account in 20 of the last 23

years. Over the last 10 years our net annual

deficit on defence expenditure hes stood at soMA

$250 million pa.We have stood on the sidelines during the US Administration's campaign in the Allience For

changes in burden-sharing arrangements which would

more effectively offert the balance of payments

effects of US stationed forces in Lurope. We have

not wished by prosecuting our own claims) to

prejudice the US case But the facts repair the t

PEONAT

1