CAB129-53 — Page 13

ANNEX

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1. The cost of our overseas commitments cannot be readily calculated. But certain figures have been supplied to me, which give an indication of the scale of certain elements in this cost. These fall under three heads:-

(a) The total expenditure in local currencies which is estimated to be incurred on our forces overseas in 1952 is approximately £125 9 million. The main items in this are Malaya and Singapore, £31.7 million, O.E.E.C. countries (excluding Germany and Austria, where we continue, for the time being, to received occupation costs) £24 7 millión, Malta and Gozo £11.8 million and Hong Kong £10.7 million.

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To the figure of £125.9 million should be added £14.7 million for oil for forces overseas giving a grand total of £140.6 million. This includes the cost of the United Kingdom share of the common infra- structure programme and of colonial forces to the extent that they are financed from the United Kingdom exchequer. It does not include Korea, where payment for local currency issues and United States logistical support has yet to be made and, for different reasons, contains exceptionally low figures for Egypt and Japan.

(b) A further figure of £100.9 million for the year 1952 is estimated to cover our expenditures in foreign currencies on behalf of forces in the United Kingdom or the forces generally in the following items:-

(i) Machinery and Production for defence purposes (£45.3 million). (ii) Manufacture for defence (£33.6 million).

(iii) Oil for forces in the United Kingdom (£22 million).

It is not possible to estimate what part of this sum is attributable to forces

overseas.

(c) There are also certain figures of overseas expenditure on commitments of the type covered by the Vote for Foreign Office Grants and Services. This Vote amounts to £21.9 million out of a total of £92.7 million in various votes included in. Civil Estimates Class II-1952-53-- Commonwealth and Foreign. It includes Jordan (£8·7 million), Yugo- slavia (£5.6 million), Palestine Refugees. (£2.5 million), Libya (2.2 million), Reconstruction in Korea (£2 million).

2. As regards military expenditure, the total of (a) and (b) above does not represent the full cost of United Kingdom military commitments. Full cost would include not merely the foreign currency expenditure but also all those costs which are met in sterling, such as expenditure on stores and food, that part of the pay and allowances of troops and civilians which is not converted into local currencies, transportation costs of men and stores, &c.

3. The extent to which the liquidation of a particular commitment would produce savings either in overseas expenditure or in the total defence budget, cannot be worked out unless information is available on the manner and extent to which a reduction in a particular area is envisaged. In particular it would be. necessary to know whether forces were to be disbanded or merely moved elsewhere and also to determine the extent of the terminal charges which would arise if a commitment were to be liquidated.

2015

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