TNAG-0540-FCO40-635-Strength-of-garrison-in-Hong-Kong-1975 — Page 126

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MINUTES OF EVIDENCE TAKEN BEFORE THE EXPENDITURE COMMITTEE

21 January, 1975.]

Mr. DAVID GREENWOOD.

dealing with the question of employment and its prospects. You see the state- ment made on 3rd December last year indicated that directly there would be 65,000 personnel displaced, 35,000 uni- formed personnel and 30,000 personnel directly associated with the armed forces. On top of that has got to be added the employees of companies who are supply- ing equipment to the forces both at home and overseas who are bound to be affected in one way or another by cuts, We have an assurance that the ROFS and the dockyards are secure for the present time, but as I said in one of the debates last year, one man's defence cut is another man's dole queue. I think that is as true this year as it was last year. Have you done any studies about the likely effects on the economy of the reduction of 65,000

65,000 personnel directly, and I would guess another 35,000 at least in the supply industries because they will have to receive redun- dancy payments, and if they do not find another job they will have to receive unemployment pay, social security bene- fits, rehousing payments and so on? If any exercise has been done on this aspect of the economics of the Review itself those expenditures must be set against the cuts that the Secretary of State him- self announced. Have you done any- thing about this and, if so, what?- First, the reductions in uniformed per- sonnel of 35,000; before one could begin considering secondary civil em- ployment consequences of those reduc- tions one would need to know precisely where they were, what regions they were in and what units they were in. However, there is a civilian employees reduction of 30,000 but some of that is support- ing civilian employees at the bases over- seas which has changed. I would anti- cipate, and the studies we have done of particular installations would suggest, that the indirect employment resulting from the employment of 65,000 direct defence employees in the United King- dom would be of the order of another 15,000.

28. But if these 15,000 are say, for example, concentrated on Tyneside where there is already a heavy degree of un- employment, that would create major difficulties for that particular region? I have been misunderstood here. That is looking at the direct Ministry of De- fence employees, the uniformed in the

[Continued.

armed forces and the civilians in the MOD. Then there is the question of employees on defence contracts in indus- try which the Secretary of State esti- mated at minus 10,000 in the period to 1978-79-he has offered no indica- tion what the numbers might be after 1980, presumably because the precise reduction of the procurement programme has not been considered.1

Chairman.] I think we should move on.

Mr. Conlan.] This is terribly import- ant. If you want to deal with the final section of Mr. Greenwood's paper there are two alternatives, either we go on after six o'clock or we ask Mr. Greenwood to come back again. I disagree with the curtailment of the discussion which for some regions is an important matter.

Chairman.] We have got this latter part yet, and we have not done this section of the assessment of the Review. I think we had better take this now.

Mr. Conlan.] What you will do then is to curtail this discussion at six o'clock and unless Mr. Greenwood will come back again-

Chairman.] We will see what the Committee wants to do.

Mr. Conlan.] What is particularly sacrosanct about six o'clock?

Chairman.

29. Nothing. All I say is let us get back and deal with this section which deals with the main questions of the Defence Review itself and the Secretary of State's proposals. I would like to ask Mr. Greenwood if he would say that this appears to have been a well con- ducted Review, and ask him how well it matches up to his ideas of defence budgeting?-On the question of it being well conducted, my observations about procedure are in the memoran- dum. I think in so far as one can gauge it, the choice of a 10 year time span was an appropriate one in the sense that it enables any short term decisions to be taken against a medium term view. On the other hand, I do think that

1 Note by witness: My answers to Mr. Conlan's questions are confused. See supple- mentary memorandum on page 20 for clarifi- cation.