London, 16 January 1967
I called on the Chancellor to say au revoir before leaving for Australia, and we talked for 1 hour. He received me with the greatest friendliness. For a good deal of the time we talked entirely alone, he preferring to discuss matters which he thought it best for a Private Secretary not to hear.
Common Market
A little to my surprise, he immediately raised the question of the EEC. He said that the Government, having set its hand to the plough, were determined to try to make a success of the negotiations. But speaking for himself, he felt that entry into Europe was not the only alternative for Britain. He was quite aware of the importance of Commonwealth trade, and trade relations with North America and other countries. Europe was merely one of several expedients.
In the course of discussion about this, he commented that last year I had made a very frank speech (this was a reference to my British–Australian trade speech in May),2 and I explained my reasons for doing so. I told him that Australia’s objections to Britain joining the Common Market were less than when Duncan Sandys first outlined the proposals in 1961; none the less I was not really a supporter of the move on account of its effect on the hard-core Commonwealth.
He did not agree with this. He said that perhaps it was inevitable, as a result of present and future circumstances, that Australia should enter the American orbit. Information coming to him from Australia rather indicated this. ‘You might’, he added ‘be surprised yourself when you return to find that Australian thinking may be in advance of your own in this respect’. I replied that this might apply to Sydney opinion, but I doubted whether people in Melbourne and Adelaide held those views.
In any case, said Callaghan, he did not envisage Britain entering Europe at the expense of its association with America. The Atlantic Alliance was fundamental to Britain. It could even be that eventually the real link between Britain and Australia was their mutual dependence on the United States.
[ matter omitted ]
2 See note to Document 217.
[NAA: M1003]