You say that according to the CIA, the Soviets posed no threat to Europe ... would you care to give us a reference for this interesting document?
And the UK did not spend one eight of its budget on defence. It peaked during the Korean War - hot war, not cold war - but one of the points of the Sandys White Paper of 1957 was to bring defence expenditure down to 7% of GDP. How? By deploying nuclear weapons and thus reducing conventional manpower.