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The
In discussion it was urged that the studies before Ministers did not
provide for a degree of saving in defence expenditure adequate to our
economic requirements nor for a rate of withdrawal from our oversea
Commitments which was politically, as well as economically, desirable.
Our influence overseas already depended essentially on our economic
strength and not on the stationing of forces in overseas theatres.
It was pointed out that while the previous Defence Review had been
based on the aim of achieving a Defence Budget by 1969-70 of £2,000 million at 1964 prices, the Defence Budget for 1966-67 had been restricted to
1,864 million and that for the current year to £1,927 million. present proposals provided only for a reduction in expenditure (also at 1964 prices) by 1970-71 to £1,900 million and by 1975-76 to 1,800 million.
On economic grounds it was desirable to aim at a higher and more rapid
rate of saving. Politically, it was urged that the pace of withdrawal
of our forces from overseas and the reduction of our commitments which was
envisaged was dangerously slow. A lengthy process of withdrawal would
leave us politically and perhaps militarily vulnerable in the later
stages, would increase the effective pressure upon us to provide further aid and was indeed doubtfully practicable. Despite the risks to
stability and the dislocation to the economies of Malaysia and Singapore,
which would be involved it would be preferable to withdraw from all our
overseas commitments by, say, 1970-71 to the stage which was envisaged in
the report for the mid-1970s. In support of this view it was urged that
the recent Middle Eastern crisis had demonstrated the inability of our
forces overseas to play any worthwhile role in a critical situation:
indeed, by involving us in certain political commitments,it could be claimed that their presence in this area had been positively disadvanta-
geous to our interests. An alternative view which was put forward was
that, while the risks to our interests in Iran and the Persian Gulf
and therefore to the sterling balances and our oil supplies, and the
danger of instability in the Far East and the views of our Commonwealth
allies might well make it impracticable to withdraw more quickly from
those areas then was proposed in the report, the necessary further savings
could be achieved by the withdrawal of larger forces from Europe and by
disbanding the forces so withdrawn instead of retaining them in the
United Kingdom, earmarked for commitment to the North Atlantic Treaty Organisation (NATO).
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