TNAG-0539-FCO40-634-Strength-of-garrison-in-Hong-Kong-1975 — Page 135

CONFIDENTIAL

CONFIDENTIAL

NEW PATTERNS OF DEFENCE EXPENDITURE

74. As a result of the Defence Review the cost of the planned

defence programme over the period to 1983-84 has been reduced from

an average of £4,300 million a year to an average of less than £3,800 million a year. As compared with the forecast of expenditure

completed early last year it is as follows:-

(£m 1974 Survey Prices)

annual average

1975-6

Previous

Programme

1976-7 1977-8 1978-9

4,000 4,070 4,150 4,300

1979-80

1983-4

4,450

Defence

Review

3,700

3,800 3,800

3,800

3,790

Difference

300

270

350

500

660

75. The figures for the last five years are necessarily approximate at this stage. The total savings over the review period, estimated

at over £4,700 million

including a reduction of £750 million

in the final year, represent a 12 per cent reduction from

the previous programme.

76. On the assumption that GNP grows at an average rate of about 3 per

cent a year over the period as a whole the effect of the defence

review decisions would be to reduce the share of resources absorbed

by defence from the estimated 1974-75 level of about 5 per cent

of GNP to 43 per cent of GNP over the next ten years. 77. In terms of major resources manpower, equipment and "other"

(buildings and miscellaneous stores and services)

the

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CONFIDENTIAL

CONFIDENTIAL

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