CAB148-30-Defence and Oversea Policy Committee Meetings Relating to 1967 Disturbances-1967 — Page 196

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CABINET

DEFENCE AND OVERSEA POLICY COMMITTEE

CONFIDENTIAL ANNEX

OPD(67) 24th MEETING

(MONDAY, 26th JUNE 1967 at 4.30 p.m.)

DEFENCE EXPENDITURE STUDIES

The Committee had before then memoranda by the Official Committee (OPD(67) 46), setting out the results of the defence expenditure studies, and by the Secretary of State for Defence (OPD(67) 47) on the military aircraft programme.

THE DEFENCE SECRETARY said that the defence expenditure studies,

the results of which were now before the Committee, had presented problens

very different from those which had arisen in the earlier Defence Review.

Then it had been possible to make large reductions in the expenditure that

would have been required by the planned defence programme of the previous

Administration by obtaining better value for money, particularly in the

military aircraft programme. It had however been necessary to leave

open, until after the end of confrontation with Indonesia, decisions on

what reductions in the capability of the forces should be made to achieve

further savings of rather less than £100 million required to keep defence

expenditure in 1969-70 down to £2,000 million at 1964 prices. The scope for

further savings by obtaining better value for money was now very limited

and, in the main, further savings in planned defence expenditure of

£200 million by 1970-71 and £300 million by 1975-76 would have to be found

from reductions in the capability of the forces and therefore in the

commitments that they could meet.

As regards commitments, the main features of the proposals before the

Committee were that, by 1975, our forces would have left Singapore and

Malaysia, the Persian Gulf and Libya; outside Europe our capability would be limited to what was needed to discharge our responsibilities to our

remaining dependent territories, to British communities abroad and for a strategic reserve; the only forces based outside Europe (apart from Hong Kong) would then be naval and even these would be earmarked for

assignment to the North Atlantic Treaty Organisation (NATO).

It would

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