ABSTRACT
This chapter analyses the higher policy and strategic picture from the cancellation of the carrier to January 1968 when financial constraints forced an acceleration of the withdrawal from east of Suez. It encompasses the Defence Expenditure Studies, which in effect became another Defence Review, and in which the Navy was still vulnerable to further cuts in spending, capability, manpower and equipment. The Navy had played a low-profile role in the developments, but its stance shows how it was rebuilding its position in the new environment. Varyl Begg quietly aligned himself with the Permanent Secretary and the Secretary of State in the key question of the Defence Expenditure Studies: he was the earliest convert among the Chiefs that Singapore should be given up. The implications of the findings were highly significant for British foreign policy: further defence economies would not be possible without a reduction in commitments east of Suez.
