With permission, I will make a statement about the defence review.
The House will recall that, on taking office 16 months ago, Her Majesty's Government set themselves to halt the runaway growth in Britain's defence expenditure by planning to limit the size of the defence budget in 1969–70 to that of 1964–65—or £2,000 million at constant prices.
As we stated in last year's defence White Paper, we assumed responsibility for forces which were seriously over-stretched and in certain respects dangerously under-equipped. It has been an equally important objective of the defence review to bring our commitments into balance with the manpower and equipment we could afford to have. We have already done better than the financial target of £2,000 million in the estimates for 1966–67, since they represent only £1,972 million at 1964 prices.
Part I of the White Paper indicates how we plan not only to stay within the same financial ceiling in three years' time, but also to undertake a major programme of re-equipment, and to reduce the over-stretch from which our forces still suffer. In order to ensure the achievement of these objectives we have had to make a new assessment of the part which our Armed Forces should play in supporting our foreign policy in the 1970s, and of what rôle Britain should play in world affairs. It has been essentially an exercise in political and military realism.
The results may be summarised as follows. Broadly speaking, in cutting the previous Government's planned expenditure by 16 per cent., or £400 million, we have achieved three-quarters of our saving by getting better value for money and only one-quarter by reductions in our military capability. In order to reduce overstretch we plan to cut our tasks overseas and then to keep a larger proportion of our forces in a home station and fewer abroad, and to rely more on reinforcement by air in an emergency. This has meant certain changes in our current political commitments overseas.
We plan to reduce substantially the deployment of our forces in the Mediterranean; from 1968 we shall give up the Aden base and confine our presence in the Middle East to the Persian Gulf; in the Far East we shall cut the level of our forces once confrontation is over; and, within a few years, we shall maintain no forces permanently deployed in the Caribbean or Southern Africa. We shall be able to keep our forces in Germany at the present size only if the foreign exchange costs are met. We have made it clear that, in future, Britain will not accept commitments overseas which might require her to undertake major operations of war without the co-operation of allies; nor shall we attempt to maintain defence facilities in any independent country against its wishes.
Against this background we have taken certain major decisions on the equipment of our forces. The Canberra strike/reconnaissance aircraft must be replaced by 1970. The Anglo/French variable geometry aircraft, which is the core of our long-term operational and industrial aircraft programmes, will not be available until the mid-1970s. We have decided that the only way of bridging the gap is to buy the smallest possible number of F111As from the United States, and to supplement these aircraft with the V-bombers which will be released from their current strategic role when the Polaris submarine force is fully operational. The foreign exchange cost of the F111A purchase will be met by sales of British equipment to the United States and to third countries.
We shall keep our existing carrier force as long as possible into the 1970s, but we shall not order a new carrier. In the light of the military tasks we envisage, and of the operational return we can expect from its cost of £1,400 million over the next 10 years, we do not believe that we should be justified in keeping a carrier force indefinitely. A new carrier could not become operational until 1973, when the rest of our carriers would be in the last phase of their active life. But by the mid-1970s we should be able to re-provide the necessary elements of the carriers' capability more cheaply by other means.
I believe that the majority of the House recognises that it has become essential to stop the automatic rise in British defence expenditure. As a result of their defence review, Her Majesty's Government have found a way of doing so without defaulting on Britain's commitments to her allies and partners in the Commonwealth, and without abandoning her influence either inside or outside Europe. Those who believe we have failed to bring our commitments and resources into proper balance must have the courage to say whether, in their view, the Government should spend more on defence, and where they will get the money, or cut Britain's commitments further, and, if so, where.