THE EXPENDITURE COMMITTEE
ix
than the defence budgets of France and West Germany as percentages of their GNP. We believe that such comparisons can be misleading and we agree with Mr. Greenwood that equating of burdens per se is not in principle a satisfactory basis for reshaping a defence programme1. Although the Ministry, in their main Memorandum2, and the Secretary of State, in his statement to the House on 3rd December 1974, made unqualified com- parisons of defence spending as percentages of GNP, we recall that in December 1973 the Ministry informed the then Defence Sub-Committee that such comparisons could be misleading and difficult to interpret3. For example, we note that in the Federal Republic of Germany it has been estimated that if that country had maintained a fully professional army, the proportion of GNP spent on defence in 1973 would have been 6.2 instead of 4.7 per cent. Similar revised calculations could be made for France (Q.11). We agree therefore with the contentions in the German defence White Paper for 1973-74 that it is important to take account of the structure of defence expenditure, and that comparison based on the percentage of GNP does not permit by itself a valid assessment of the military value of national defence efforts*.
CONDUCT OF THE REVIEW
9. The Ministry stated that the future programme required a concentra- tion of our future defence forces on those areas of greatest need and where the United Kingdom contribution to common defence could be deployed most effectively. A firm set of strategic priorities was drawn up to guide the analysis but, apart from this, no preconditions were written into the exercise and in particular no arbitrary financial targets were set. We welcome this statement, as we agree generally with Mr. Greenwood's view that neither an absolute assessment of defence needs nor a fixed sum of money should be regarded as rigid alternatives because the defence budgeting problem was the result of the interplay of these two considerations (Q.8).
10. Mr. Greenwood shared our impression that the review had been well- conducted (Q.29) and that if defence costs had to be reduced then the pro- posed cuts were, with some reservations, the least damaging that could be expected. He welcomed consideration of several options for defence pro- grammes to 1983-84 and the choice of the full-time span of the Ministry's Long Term Costings for the review as this enabled any short-term decisions to be taken against a longer-term view. However, he warned that against the background of some rather questionable assumptions, for example, about economic growth, there was the risk of giving a false impression of stability; he recalled the defence review of 1964-65 becoming a continuing review.
OVERALL STRATEGY
11. The Ministry's analysis quickly established that our commitments outside the NATO area were of lowest priority in strictly military terms'. Thus, as the Secretary of State informed the House on 3rd December 1974,
1 Evidence page 3, para. 8.
2 Evidence pages 22-34
3 Eighth Report from the Expenditure Committee H.C. (1973–74) 169, Q. 247-51.
4 Federal Republic of Germany White Paper 1973-74, pages 222-3.
5 Evidence page 23, para. 5.
• Evidence page 3, para. 9.
7 Evidence page 23, para. 7.
No comments yet.
Private notes are available after approval.