After the rapid r u n d o w n in defence expenditure in the first t w o years after the war , the size of the armed forces continued to contract unti l the middle of 1950 w h e n the numbers serving in the A r m y , Navy and Air Force all reached a m i n i m u m . In spite of the cold war , the coup d 'e ta t in Czecho-Slovakia, the Berlin blockade, the change of regime in China , the a tom b o m b in the U S S R and other disturbing developments, the reduction in the armed forces over the three years 1947-50 came to nearly half. Defence expenditure, which had reached a peak of over £5000 million in 1944, dropped to about £750 million in 1948-50 . W h e n the Economic Survey for 1950 appeared in March 1950, defence was given a single paragraph indicating that in the coming year a further reduction was planned in the size of the armed forces a l though some increase was expected in the numbers in industry engaged on defence w o r k because of the exhaustion of war t ime stocks of equipment .