Rule of cool
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The other elephant in the room is "East of Suez". Faced with the economic success of its neighbours in W Europe it is hard to see the UK not shifting its focus in the 60s and 70s away from the comparatively small markets outside Europe to W Europe.
The threat from the Soviet Union will require the UK to focus on air defence of GB, ASW in the N Atlantic, defending W Germany and maintaining the nuclear deterrent.
TSR2 and 1121 still have a role in this but the RN may not be able to afford both SSN/T22 and CVA01.
I don't think EoS is the big deal it's made out to be, most of the 'problems' were either policy positions or mistakes made arising from policy positions. The Labour Government wanted to reduce defence spending and do EoS on the cheap, they did this by cancelling AW681, P1154 and TSR2 to buy American kit. When devaluation was forced upon the Government the earlier decision to buy US left them highly vulnerable, leading to the cancellation of the F111K, the reduction in Phantom numbers and the need for drastic and unplanned changes to defence policy.
If Sandys acted differently with the 57 DWP, be that your cutting short Lightning and going with the P1121 or my going hard with the Lightning, the Labour government wouldn't have had to make the decision to buy US in 1965. They still likely want to cut the defence budget, but with fleets of British aircraft in or entering service the devaluation in late 1967 won't have such a massive impact on procurement of US kit.
All of this assumes that Sandys having a better ongoing impact wouldn't give the Tories those 900 votes in 8 seats to win them the 64 election.