§ In the Queen's Speech we said that we would be pursuing a defence policy directed to maintaining a modern and effective defence system while reducing its cost as a proportion of our national resources. As the House knows, we have therefore set in hand a thorough-going review of our defence commitments and capabilities so that we can assess how best to achieve the required balance between continuing to meet essential defence needs while securing a necessary reduction in the proportion of our resources we devote to defence.
§ We remain firmly committed to the North Atlantic Alliance, but Britain, with her unique economic difficulties, should not bear a proportionately larger burden in supporting the alliance than her major European partners. A strong economy is the only effective base for the discharge of our political and military responsibilities in the world. Outside Europe we shall examine the contribution made in each case by our military presence to the maintenance of peace and stability, recalling the decision taken by Her Majesty's Government in 1968 that our forces should be withdrawn from South-East Asia. There will be full consultation with our allies wherever their interests are involved.
§ We have already decided to make a further cut of £50 million at 1973 prices in defence expenditure for 1974–75, in addition to the £178 million announced 303 by my predecessor on 17th December. This brings the total defence savings, compared with the provision in the last Public Expenditure White Paper, to £228 million. It means a reduction of £55 million at 1974 prices in the defence budget Estimates for 1974–75 published today bringing the total down to £3,612 million.