NOTE BY DEFENCE DEPARTMENT

Canberra, 17 June 1965

Top Secret

United Kingdom Defence Review1

Defence Statement February 1965

In the Defence Statement of February 1965, the British Government announced that it had set in train a series of studies on Defence policy to cover the effects on force levels and capabilities of a number of different possible courses of action. The aim of this review would be to match political commitments to military resources and to relate resources made available for defence to the economic circumstances of the nation. The purpose would be to ascertain the means by which defence expenditure during the next few years might be reduced to roughly £2000m. in real terms (the 1965/66 estimate is £2120m.). It was pointed out that to continue along the lines of recent years would mean that Britain was steadily raising the percentage of the national income relating to defence at a time when most other countries, including Russia and the United States, were reducing theirs.

2. There have been many attempts in recent years by British Governments to contain their defence expenditure. What is significant on this occasion is the apparent determination of the new Government, as shown by the cancellation of TSR 2 and other projects, and the probability that if it came to a direct choice the Government would abandon certain Defence commitments rather than permit a continued undue drain on British resources.

3. The Defence Statement dealt with the major tasks of the British forces. A firm position was taken on peace keeping outside Europe, on which it was stated:

‘In maintaining these interests in peace and stability, which our allies share with us, the British contribution is paramount in many areas East of Suez. Here, as elsewhere, we have obligations to our Commonwealth and other allies; and here we have facilities in our bases at Aden and Singapore. Our presence in these areas makes a substantial contribution to international peace-keeping. It would be politically irresponsible and economically wasteful if our bases were abandoned while they were still needed to promote peace in the areas concerned, though we recognise that they can be maintained only in agreement with the local governments and peoples.’

However the White Paper added:

‘In meeting this worldwide role we have a claim upon our allies since we serve interests which are theirs as well as ours. If some of our burdens can be assumed or shared by our allies, we may not need the full range of military power we should require to carry them all alone.’

There has also been evidence that the clear acceptance by Mr. Healey of the importance of British commitments East of Suez is not necessarily shared by all his colleagues.

Disposition of British Forces

4. A summary of the present disposition of British fighting units is attached at Annex A. It will be seen that the largest forces outside Europe are in the Far East which has been considerably reinforced since Indonesia began her policy of confrontation. The total British contribution in the Malaysian theatre alone (including 14,000 Gurkhas) is now over 50,000. The deployment of aircraft carriers and commando ships is flexible as between the Middle East and the Far East and Britain expects to maintain a total of three in the area East of Suez. Plans exist for the rapid reinforcement of Malaysia particularly by ‘V’ bomber strike aircraft should Indonesia resort to overt attack. If account is taken of the firmly planned reinforcements to counter overt Indonesian attack, British fighting strength in the Far East considerably exceeds the total capability of the Australian regular forces.

Progress of the Defence Review

5. The British Government has said that the Defence review will be completed before Parliament rises for the summer recess. It is understood that the Government will be presented with a number of options—the majority of them politically unpalatable—which it may exercise to keep defence spending within the £2000m. limit.

6. The problems are complex, and many studies are proceeding concurrently, such as:

(a) What commitments can be given up in various theatres, the political and military consequences, and the likely savings.

(b) The relative merits of sea-based and land-based air power. Bound up with this is the question of whether the option on F111 aircraft should be taken up, or more aircraft–carriers obtained.

(c) The possible loss of main-base facilities in Aden and Singapore by the seventies, and their replacement by facilities on various islands in the Indian Ocean (Aldabra, Chagos, Gan and Cocos, which is of course Australian).

On our latest information, (which in the main is obtained by discreet enquiries from Service Officers in the Ministry of Defence and therefore must be handled and treated cautiously), the position is still very confused, but the simple fact is emerging that the £2000m. objective can only be achieved by eliminating something which has previously been regarded as essential. In other words, the cut will hurt.

Implications for Australia

7. On a number of occasions in recent years there have been indications that pressures were growing for the reduction of British commitments in Asia. This has not materialised and the trend was reversed by the need to provide assistance to Malaysia against confrontation. It is generally accepted that the U.K. will retain adequate forces while military confrontation continues. Concern exists over the situation which could arise later in the decade should confrontation in its more military form cease, or should other circumstances force the U.K. to withdraw from her Malaysian bases (and from Aden). There have been a number of indications that Britain may be looking to a substantial withdrawal from the Far East by the 1970s. Apart from such reports as we have of the Defence Review, it may be significant that when the Military Advisers of the United Kingdom, United States, Australia and New Zealand discussed four-power military planning while in London for the recent SEATO Council meeting, Admiral Begg 2 doubted whether four-power planning was necessary, although the United Kingdom had at all times previously pressed for such planning. (A note is attached at Annex B of the arrangements finally agreed between the Military advisers for four-power planning.)

8. It is a major Australian defence interest to ensure the retention of British interest and military presence in the area East of Suez.

9. The following are the reasons which could influence the British Government to maintain a British presence in the area:

(a) Commitments to Malaysia, as long as military confrontation continues;

(b) Commitments to the defence of British territories (Brunei, Hong Kong, the Pacific Island Territories);

(c) The ability to assist in the close defence of Australia and New Zealand, should the occasion ever arise. (This would be the reverse of action by Australia and New Zealand in two world wars);

(d) Recognition of the fact that the emergence of China will probably present the main political and military problems for the world in the next few decades, and that the U.S. should not be the only power outside the Far East area which brings its political and military influence to bear in solving these problems;

(e) The traditional and historical British position in the Indian Ocean and the areas surrounding it, particularly South East Asia, the Indian sub-continent, the Persian Gulf area and East Africa. This makes a continued British presence possible and desirable, notwithstanding recent United States moves to enlarge their influence in the Indian Ocean by naval cruises and interest in island facilities such as Aldabra, Diego Garcia and Cocos. (The U.S. is still discussing with the U.K. the political problems involved in the detachment of Aldabra and Diego Garcia from Seychelles and Mauritius respectively. Insofar as Cocos is concerned the Australian Cabinet decided last year that any U.S. interest in Australian staging facilities should be allowed to develop of its own accord.)

10. From the point of view of Australia’s own security ((c) above), there is a real risk that in 5–10 years we will have lost our forward defence position in South East Asia and will require an alternative strategy. It is desirable that in such a strategy we should have the maximum participation of allies. While the U.S. has predominant power in the Pacific, U.K. strength is still very substantial, as indicated in para 4 above, and the U.K. also has a special position in the Indian Ocean.

11. The question of basing British forces on Australia in the event of the loss of Malaysian bases has been raised on a number of occasions over the last ten years but it has not been pursued. This is mainly because if the news ever leaked that consideration was being given to the establishment of an alternative base to Malaysia in this part of the world, there could be very grave political repercussions with the danger that the alternative would develop into the policy. Australia has always shown itself willing to participate in discussions on this subject. The matter was raised again at the ANZAM Defence Committee meeting in March when Admiral Mountbatten was asked how the United Kingdom would exercise its military influence in South East Asia in a period of about 5–10 years hence if our present position in Malaysia changed. In discussion it was brought out that Australia had various facilities both in Government establishments and in private industry which could be used to support British forces subject to the solution of a variety of detailed problems. In general, the major naval base facilities in Australia are scarcely enough for the future requirements of the RAN apart from some submarine refit capacity. There is a shortage of skilled tradesmen throughout Australia and the United Kingdom would probably have to provide its own technical and maintenance personnel. Accommodation would be required but could be provided relatively easily on an austerity scale once the requirements were approved. It was agreed that when Sir Frederick Scherger 3 was in London for the SEATO Meeting in April he should meet Admiral Mountbatten to decide whether the problem should be further examined by the military staffs concerned in the United Kingdom and Australia. Such an examination might take the form of the United Kingdom supplying an outline of the size and type of forces which they might wish to base on Australia with the repair, logistic, accommodation and maintenance facilities they would need. Australia could then examine the possibility of fulfilling these requirements. There was no discussion of the costs.

12. Mr Healey told Mr Hasluck in informal talks in London on 7th May that he would like to start relaxed conversations with Australia some time over the next few months about the possibility of base facilities in Australia in the 1970s. There was further discussion between Mr Healey, Earl Mountbatten and Sir Frederick Scherger in which the U.K. Chief of Defence Staff appeared to be advancing the view that there would be no problems with naval base facilities in Australia presumably to support U.K. carriers and other units in the Indian Ocean. Mr Healey, who was about to go off to a Cabinet meeting, stated that the British Government had not proceeded far enough with their current defence discussions to give any indication of interest in the use of existing bases in Australia and/or in the establishment of new bases for British forces there. It appears, therefore, that Admiral Mountbatten may have acted prematurely in raising this matter at the ANZAM meeting. As indicated above, provision of major base facilities in Australia would be costly. Lesser communication and staging facilities and accommodation for both naval and air forces could, of course, be provided at much lower cost at for example Cocos (in which both the U.S. and the U.K. may be interested) and other places such as Darwin. There is also industrial capacity in Australia.

Conclusion

13. The fundamental reason for the British defence review is the Government’s determination to reduce the defence vote to £2000m. It seems that this object will only be achieved if something is cut out. A situation could arise where the UK Government might wonder to what extent they are under an obligation to Australia to retain British interest and military presence in the area East of Suez, and there may be a need for some deliberate action on Australia’s part to bring this about. Australia has expressed a willingness on previous occasions and confirmed this at the ANZAM Defence Committee meeting in March to participate in further examination of the problem of basing United Kingdom forces on Australia. The appropriate next step should the British wish to pursue this would be for the United Kingdom to supply an outline of the size and type of forces which they might wish to base on Australia with the repair, logistic, accommodation and maintenance facilities they would need. Australia could then examine the possibility of fulfilling these requirements. While major base facilities for large naval forces would be costly, there is no doubt that Australia has capacity to assist in various fields subject to further detailed examination. The question of the cost of providing such facilities has not hitherto been raised.

2 Commando| 21 Minor Units| 1 Light Bomber
14 Escorts| | Squadron
7 Submarines| | 5 Transport Squadrons
21 Minor Units| | 2 Maritime Squadrons
MIDDLE EAST
(includes Aden, Persian
Gulf, East Africa)| * 1 Carrier| 10 Major Units| 3 Fighter Squadrons
3 Escorts| 4 Minor Units| 6 Transport Squadrons
1 Submarine| | 1 Maritime Squadrons
12 Minor Units| | 5 Minor Units
MEDITERRANEAN
(includes Gibraltar,
Malta, Libya, Cyprus)| 1 Carrier| 8 Major Units | 1 Fighter Squadron
2 Escorts| 4 Minor Units | 4 Light Bomber
2 Submarines| | Squadrons
12 Minor Units| | 1 Transport Squadron
| | 2 Maritime Squadrons
| | 8 Minor Units
UNITED KINGDOM| 1 Carrier| 37 Major Units| 8 Fighter Squadrons
2 Cruisers| (includes 17 on
miscellaneous duties
i.e. training, staging
Arrny Reserve,
2 commandos and
3 support Echelon units)| 13 Medium Bomber Squadrons
33 Escorts| |
33 Escorts| | 8 Transport Squadrons
23 Submarines| | 7 Maritime Squadrons
29 Minor Units| | 9 Minor Units
| 9 Minor Units|
GERMANY (including
Berlin)| | 48 Major Units| 4 Fighter Squadrons
| 23 Minor Units| 4 Light Bomber
Squadrons
| | 4 Minor Units
WESTERN ATLANTIC
(includes Caribbean
and Canada)| 2 Escorts| 2 Major Units| 1 Minor Unit
2 Submarines| 1 Minor Units|
1 Minor Unit| |
Carriers and Commandos cover the whole area east of Suez.

**An infantry battalion, an armoured regiment, or regiment of artillery .

ANNEX B
FOUR POWER TALKS: AD HOC MEETING OF THE SEATO MILITARY
ADVISERS OF AUSTRALlA, NEW ZEALAND, UK AND US IN LONDON
3RD MAY 1965

1. It was agreed by the four Military Advisers that there are now and likely to be in the future some problems which they would like to discuss from time to time.

2. It was also agreed:–

(a) That at each SEATO Military Advisers’ Conference the four Military Advisers will take the opportunity to meet together discreetly.

(b) At ANZUS meetings three of the Military Advisers will in any case be meeting. If desired, the representative of the fourth could be invited to join them after the meeting for discussions.

(c) At each ANZAM meeting one or more of the Military Advisers will in any case be meeting. If desired the representatives of the others could be invited to join them after the meeting for discussions.

(d) On any of the above occasions it is possible to arrange discussions at staff level.

(e) On any occasion when a staff meeting occurs a position paper would be circulated before-hand by the country raising the item.

(f) The next known opportunity for a staff meeting would be at the ANZAM Joint Planning Committee due to be held in Singapore in August or September 1965.

1 This note was sent by the Defence Department to P.J. Lawler, Acting Secretary in the Prime Minister’s Department, with a covering letter explaining that some information had been obtained through the contacts of Air Vice-Marshal G.C. Hartnell (Head of Australian Joint Services Staff, London, 1964–66) at the Ministry of Defence in the UK. The Defence Department requested that no copies of the note be made.

2 Admiral Sir Varyl Begg, Commander-in-Chief of British Forces in the Far East, and British Military Adviser to SEATO, from 1963; First Sea Lord and Chief of Naval Staff, 1966–68.

3 Sir Frederick Rudolph Scherger was the RAAF’s first Air Chief Marshal, 1965. He served as Chief of the Air Staff, 1957–61, then as Chairman of the Chiefs of Staff Committee, forerunner of the position of Chief of the Defence Force, until 1966.

[NAA: A 1209, 1965/6124]

NOTE BY DEFENCE DEPARTMENT

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