TNAG-0540-FCO40-635-Strength-of-garrison-in-Hong-Kong-1975 — Page 130

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MINUTES OF EVIDENCE TAKEN BEFORE THE EXPENDITURE COMMITTEE

TUESDAY, 4TH FEBRUARY, 1975

Members present:

Colonel Sir Harwood Harrison, in the Chair.

Sir Frederic Bennett.

Mr. Geoffrey Finsberg.

Dr. Maurice Miller.

Mr. John Roper.

Mr. Neville Sandelson.

DEFENCE REVIEW (D.40)1

Memorandum by the Ministry of Defence (SCOE 70)

I. BACKGROUND TO THE REVIEW

Economic

1. On 21st March 1974 the Secretary of State announced in Parliament (Hansard WA Cols. 153/4) that he had "initiated a review of current defence commitments and capabilities against the resources that, given the economic prospects of the country, we could afford to devote to defence". This review was to be conducted against the background that the Government had undertaken in the Queen's Speech to pursue in consultation with our Allies "a policy directed to maintaining a modern and effective defence system while reducing its cost as a proportion of our national resources ".

Financial

2. The 10-year forward defence programme prior to the Defence Review rose at 1974 Survey prices from £4,000 million in 1975-76 to £4,300 million in 1978-79 and £4,500 million in 1983-84. As the Secretary of State's Statement in the House of Comnions on 3rd December 1974 said, this would have entailed expenditure on defence of 5 per cent. of GNP in 1974-75, 6 per cent. in 1978-79 and 51 per cent. in 1983-84. This spending on defence represented a far higher proportion of our national income than the proportion spent by our major European Allies and com- petitors in world trade, and almost 50 per cent. more than the NATO European average. The most recent 1974 figures, on NATO definitions are:

UK Germany

...

5.8 per cent. 4.1 per cent.

France

NATO European average

(4.9 per cent. including Berlin aid)

3.8 per cent. 4.1 per cent.

This was the programme and financial baseline from which the review started.

Military and Political

3. At the start of 1974, the UK, in spite of its economic difficulties still maintained forces stationed round the world on a substantial scale and, within NATO, was the only European member of the Alliance to make a significant contribution in all of the following areas :-

(a) The Central Front-BAOR and RAF Germany with extensive provision for

reinforcement;

1 See also revised figures, pages 34-35.