CAB129-37 — Page 769

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THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT

mut Page 770 printed for the Cabinet. December 1949

The circulation of this paper has been strictly limited.

for the personal use of Sir Norman Brook.

TOP SECRET

Page 770 386

It is issued

386/

Copy No. 31

C.P. (49) 245

8th December, 1949

(03

CABINET

dyt w DEFENCE ESTIMATES, 1950-51 Witton

MEMORANDUM BY THE PRIME MINISTER

The size of the defence budget for 1950-51 has recently been investigated by the Defence Committee and I now bring before the Cabinet the upshot of their discussions.

2. My colleagues will recall that when, on 24th January, we approved a total of £760 million for the defence estimates 1949-50 (C.M. (49) 6th Conclusions, Minute 1) it was agreed that the Minister of Defence should in due course bring before the Defence Committee a fully co-ordinated plan for the future defence of the Chiefs of Staff entrusted the

the country. By arrangement with the ing Party, who were invited to

first stage study to an inter-Service

consider how an annual defence budget limited to £700 million for the three years beginning April 1950, could best be distributed and what the effects on the fighting strength of the Forces would be. The report suggested many useful economies, but showed that the effect of reducing the defence budget to anything in the neighbourhood of £700 million* could not fail to be of a most serious character, necessitating major withdrawals all over the world, and equivalent in the political field to a major disaster in the cold war."

3. A new start was required and the Minister of Defence, assisted by the Service Ministers and the Chiefs of Staff, proceeded to work out new proposals for the three years 1950-51, 1951-52 and 1952-53; designed to avoid the worst of these difficulties. These proposals, which for the first time took the form of a properly co-ordinated plan, aimed at mitigating or eliminating the most damaging reductions inevitable under the inter-Service working party's proposals; and at avoiding default on our obligations under Western Union and the Atlantic Pact without placing an intolerable burden on the Exchequer.

4. The main features of the Minister's proposals, set out at Annex A, are as follows

(i) Emphasis is placed on winning the cold war," the underlying thought being that if we succeed in this we may avoid being called upon to fight any other kind of war;

al

(ii) The three main pillars of our strategy are defined, as in earlier studies, as the defence of the United Kingdom, of our sea communications, and of our position in the Middle East;

*Subsequent detailed examination of the report showed that the Committee's proposals would cost abage507 mimbal more than their initial estimate.