CAB148-30-Defence and Oversea Policy Committee Meetings Relating to 1967 Disturbances-1967 — Page 26

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2.

STATEMENT ON DEFENCE ESTIMATES 1967 - POLICY AND PLANNING SECTION

The Committee considered a memorandum by the Secretary of State for Defence (OPD (67) 3) covering the draft of the chapter on policy and planning

for the Statement on Defence Estimates 1967.

THE DEFENCE SECRETARY said that the routine chapters of the 1967 Statement

on Defence Estimates had been agreed between Departments. As regards the

policy and planning chapter before the Committee it could be argued that we

should avoid publishing material of this kind at the present time.

It was

not possible to say anything now about the size and shape of the Royal Navy

after the carriers were no longer in service or about the Army in the long-

term; nor could it yet be revealed that further defence studies were in hand

which might involve major changes in the disposition of our forces. A

chapter on the lines proposed was however essential both to bring out the

progress made in implementing the Defence Review decisions in the last year

and to explain why no further decisions had yet been taken. The draft

chapter explained the savings that were being made, set out our view of North Atlantic Treaty Organisation (NATO) strategy and the importance of decisions

on our NATO contribution to the size and shape of our forces and, after

reflecting on the lessons of confrontation with Indonesia, suggested a some-

what less ambitious statement of our role in such circumstances with no

mention of participation with allies in a limited war. It concluded with a

description of the organisational changes in the Ministry of Defence and an

implication of the need to make reductions in the United Kingdom support

facilities.

On savings in both budgetary and overseas expenditure there was a good

story to tell. The defence budget for 1967-68 was £45 million below that

for 1966-67, after absorbing £78 million for increases in pay and price, and

£72 million below £2,000 million at 1964 prices. In total a saving had been

achieved of £750 million over a period of three years on the plans of the

previous Administration.

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