Washington, 18 April 1967
Top Secret
Mr. Brown explained that our present economic situation had caused us to take another long look at all expenditure. No decisions would be taken until July, but we wanted to explain the situation to our allies and take their views into account.
2. Although we were making good progress and were repaying ahead of time some of the loans which had been made to us, we nevertheless needed further savings, both budgetary and overseas, which would enable us to maintain recovery, to avoid intolerable new taxation and to build up the necessary surplus needed for repayment of our debts. We had had to make cuts in desirable social expenditure, schools and housing: and defence had to play its part in providing some savings. It therefore seemed sensible to us to plan to be off the mainland of Asia (except for Hong Kong), by the mid-1970s. A first step in this aim would be to cut our forces to approximately half Defence Review levels by 1970/71. We were proposing to inform the Australians and New Zealanders, and the Defence Secretary would tell the Malaysians and Singaporeans next week, but we did not propose to tell the Thais and Filipinos at this stage.
3. Mr. Brown continued that although it had been basically the economic background which had forced us to look at this situation, we nevertheless regarded this policy as making good political sense. By the mid-1970s, white faces on the mainland would be increasingly a liability and it seemed good sense to plan for their departure now.
4. Mr. Rusk said that he had two immediate comments. In the first place any significant withdrawals while the Vietnam war still continued would cause the Americans considerable concern. In particular, if Thailand were threatened, he would hope that we should be able to help them. If the Vietnam war were over and the U.S. were reducing its own forces, it would be a different matter.
5. Secondly, Mr. Rusk asked about the security of Malaysia. If the existing arrangements withered, it would not be possible for the United States to replace them, and the Malaysians should be so informed. Mr. Brown replied that he thought that the Anglo-Malaysian treaty could continue for some time but there would have to be a revised understanding between the United Kingdom and Malaysia about its detailed implementation. Mr. Cooper1 added that at the moment, the United Kingdom was thinking in terms of a presence in the area consisting more of maritime and air forces; and if this came about, the Malaysians would have to understand that reinforcements would take some time to reach them. Nevertheless, the Malaysians’ own land forces were steadily increasing in size and becoming more efficient.
6. Mr. Brown explained that over the next two years or so our reductions would be aimed more at the administrative sections of our service establishment and that our savings by 1970/71 though useful would not be very large. Significant savings would only come afterwards, but only if the decisions were taken now.
7. Mr. Leddy2 asked whether there was any relation between these decisions and our approach to the E.E.C. Mr. Brown said no, but that we had to take the decision in July for reasons connected with the regulation of public expenditure.
8. Mr. Brown said that Mr. Healey would be going to Singapore and Malaysia next month to start discussions on this matter. Mr. Rusk asked if this meant we should want to make an early announcement. Mr. Brown said that he thought this could certainly be avoided during Mr. Healey’s visit, but when the time came for decision in July, it was still an open matter how far his colleagues would wish to go in making an announcement. Mr. Cooper added that there had already been some public discussion about the need to reduce our facilities in Singapore and Malaysia and that this would provide cover for some time yet. It was essential to have discussions with Singapore and Malaysia as the effect on their local economies and on local manpower would be marked. This was particularly so in Singapore where Britain’s defence expenditure provided some 20% of GNP and the British forces employed, directly or indirectly, some 8–9% of the working population.
9. In the course of further discussion, Mr. Rusk asked about the Gurkhas and was told that our present plans would involve a further reduction below the level of 10,000 which had already been announced. He also asked whether it would be possible to make further savings by administrative measures. Mr. Brown explained that this had been under way for some time and that we had already saved £12 million in Germany.
10. Mr. Rusk said that he would like to repeat the two general comments he had made earlier. The United States wanted the United Kingdom to continue to play a world role. If the United Kingdom withdrew, the U.S. would find themselves in a very lonely position.
11. Mr. Brown then mentioned the possibility of a minimum ‘presence’ in Australia. He emphasized that in raising this point it must be fully understood that it was without any commitment of any kind. He was under firm injunction from the Cabinet not to pre-empt any decisions. Mr. Rusk replied that, from the United States point of view, the important thing was the role of such a ‘presence’. If it were there simply to defend Australia this would not allay American apprehensions. But if it would enable Britain to play a wider role, particularly in relation to the defence of Malaysia and in the SEATO context, this would go some way to help. If the U.K. joined the E.E.C., he hoped that they would set about encouraging Europe to play a part for which it had a capability and for which it was well equipped. As it was, at present in the Middle East and Africa, only the U.K. and France were playing a role. Europe itself should have a world role. Mr. Brown agreed and said that there was growing support in the U.K. for an approach to the E.E.C. for this very reason. Meanwhile, the decision whether or not the U.K. should have forces based in Australia must still be regarded as an open question. He was, however, very interested to hear the views not only of the United States, but also of the Australians and New Zealanders on this issue.
12. Mt: Brown and Mr. Rusk agreed to resume discussion of this matter later.3
1 Assistant Under-Secretary of State, UK Ministry of Defence.
2 US State Department.
3 Brown also had meetings with Rusk, Hasluck and Holyoake. The Foreign Secretary first told Hasluck about the UK’s intentions on 19 April 1967. According to Hasluck, Brown warned that if Australia responded with an ‘uncompromising and unconstructive attitude’, this would strengthen those in the British Cabinet who wanted a complete withdrawal from the East of Suez commitment. Brown was unmoved by Hasluck’s arguments about the economic potential of Southeast Asia (NAA: Al838, TS691/1 part 7, cablegram 1585, Australian Embassy, Washington, to Holt, 20 April 1967). In a subsequent cablegram (no. 1600, 20 April 1967), Hasluck advised Holt to send Wilson a holding message, pending consideration by UK ministers of Brown’s report on his Washington talks. Hasluck wanted the message to express Australia’s surprise at the apparent divergence between what Brown had said and what Australia understood to be Wilson’s views. Also, it should stress that Australia attached great importance to the UK retaining a political and military presence in Southeast Asia. ‘Ties of family sentiment and dangers undergone together in the past no less than practical considerations make us want a continuance of British strength on our side.’ Australia understood the economic and political pressures in the UK but questioned whether it was wise now to make decisions about the mid- 1970s when the future of the region seemed so uncertain and no one knew what the outcome would be in Vietnam. The timing of any UK announcement would also be significant. It might set off a ‘dangerous chain of events’, encouraging Hanoi to ‘hang on’, weakening the resolve of Malaysia and Singapore, and alienating US public opinion. Hasluck was opposed to Healey visiting Malaysia and Singapore; he wanted the matter confined for the present to the US, UK, Australia and New Zealand. The impact of UK force reductions might still be blunted, possibly by a fresh examination of the UK’s position within SEATO, and even if the UK ultimately withdrew from the Asian mainland, Australia would still want a UK presence to persist from other bases (ibid.). Another cablegram from Hasluck to Holt (no. 1604, 20 April 1967), explained that Brown had made clear the intention of the UK Cabinet to be off the Asian mainland by 1975. Only the date of withdrawal was negotiable. Rusk and Hasluck challenged Brown over the ‘white faces’ argument, Rusk arguing that friendly white faces were more acceptable than hostile Chinese ones. Brown vehemently denied Rusk’s view that the UK was ‘stripping’ itself of its non-European involvement to make way for entry to the EEC. When Rusk raised the question of UK support for Thailand, Brown was unable to give an answer because the UK Cabinet was divided. While UK ministers were agreed on the long-term plan for a reduction of forces, some wanted a complete withdrawal, others a continuing presence. Hasluck concluded: ‘I was left with the strong impression that London has not thought through either the effect which withdrawal will have on the Americans or the psychological effect it will have in Hanoi, among friendly nations or on neutrals such as Burma.’ He was not persuaded that the UK costings would withstand close scrutiny. If the savings from withdrawal were to be offset against the costs of a UK commando-type force based in Australia, large transport aircraft, and economic aid to Singapore, he doubted whether the result would be as favourable as the UK imagined (ibid.). For the message which Holt sent to Wilson, see Document 64.
[UKNA: FCO 46/54]