London, 13 June 1967
Secret
Conference at No. 10 Downing Street, in the Cabinet Room, between British and Australian delegations
The proceedings opened at 11.30, with Mr. Wilson saying that he and Mr. Holt had had a private talk for three-quarters of an hour on general.’terms:2 The British Prime Minister then asked Mr. Holt to open. Mr. Wilson said that the main issue between the two countries seemed to be defence policy, and by agreement with Mr. Holt he thought it best that the discussion should range around that.
Mr. Holt’s statement
Mr. Holt began by saying that the new British defence policy was a shock to the system.
He emphasised future trade possibilities in Asia for all of us. For example, Japan had this year supplanted Britain as Australia’s best customer. Nevertheless, the British should remember that the volume of British trade as distinct from the percentages, had also grown. in recent years. He went on to remind the British of their material stake East of Suez. Vast sums were invested in Australia, New Zealand, Malaysia, Hong Kong, and for that matter, India. Events during the last week in the Middle East (the Arab-Israeli war) had shown that the United Kingdom cannot divorce itself from these problems. He stressed the potentialities of the growing Asian trade area for the United Kingdom, emphasising that three-fifths of the world’s population live East of Suez. A significant British presence was necessary not only for the security of the Area, but for trade and future development.
There was also the question of Britain’s position in the Commonwealth. A British withdrawal would be QUITE SHATTERING3 to all Commonwealth countries in the area. After all, the United States had committed itself to the security of the area in a way that most people did not realise. America seems to be committed to the defence of every country with the exception of Malaysia and Singapore. The American view is that these are essentially Commonwealth countries, and therefore a British responsibility.
Mr. Holt went on to say that the United States was not likely to withdraw soon from Asia. It was a mistake to think that within a few years this would happen. The British flag, a British presence, was tremendously important to the United States in these parts, in exactly the same way as Australia’s contribution, such as it was, was important to the Americans.
None of us, he continued, under-estimated the United Kingdom economic problem. We understood very well the run down after Confrontation had ceased—but we never understood that this would precede a complete withdrawal. Mr. Holt went on: ‘I put it to you, it is the unanimous wish of the Commonwealth countries, as well as the United States, that, in the short term, you will retain some flexibility in your thinking regarding the Commonwealth Brigade. It is an example of Commonwealth team-work—there are not many others. We hope for a sufficient British military component to make it viable.’
‘As to your proposed withdrawal from the area by the mid-1970s, we earnestly press you to take no final decisions at this point of time, or announce such decisions. Perhaps by the mid-1970s the outcome may4 be a complete withdrawal. But if you take a decision now, it will inevitably become known soon, and a chain reaction will be set in train. On our part’, Mr. Holt continued, ‘we do not see a compelling need for a decision this year. 8 years ahead is a long time. No-one can foresee circumstances by then.’
Wilson then called on Healey to respond.
Mr. Healey’s Reply
‘A year ago’, Mr. Healey said, ‘I did not anticipate meeting again in these circumstances. We realise’, he continued, ‘that Britain has important economic interests in the Far East. But we are spending more now than we are earning: we may continue to earn just as much, by withdrawing, and without any military expenditure. Our problem is what contribution for the security of the area we can make and which we can afford. When we came into office in 1964 we proceeded from assumptions made of our economic growth which subsequently have not been fulfilled. In the last few months, the Chancellor of the Exchequer has said we must cut public expenditure right across the board. The civilian departments, in the world of practical politics, cannot bear the whole brunt of this—that is to say, another £200 million to £300 million between now and 1970–71.’
Mr. Healey continued that he could not achieve this saving from the defence vote by 1970–71, but he could by 1975. Even so, he could do this only by taking the permanent defence facilities off the mainland of Asia altogether. One of the difficulties is that if you keep a battalion in the Far East you need one at home to relieve it (the roulement factor). New aircraft, new assault ships, etc. can keep a military capability in the area without the present base. Thus, it is still possible to maintain a capability.
The latest Cabinet decision, arrived at only recently, was hard fought. It was only through the persistence of the Prime Minister, Healey himself, Bowden and George Brown, that they were able to prevent a total withdrawal. The rest were opposed to even this modified policy.
As a result of the new policy, the Government hoped to save ’300 million by 1975. ’200 million of this will come from the closing of the Singapore base. Malaysia and Singapore were deriving about ’50 million annually from the presence of our forces. Therefore, even if we had to give them the ’50 million a year by way of compensation, closing the base would be a good bargain from the economic point of view.
The Government proposed to phase the rundown. In order to make maximum savings by 1970–71, they proposed to diminish sea and air forces; whilst the Gurkhas would be demobilised by 1972.5 The Malaysian and Singapore Governments believe that sophisticated maritime forces would be more use than ground troops. Healey continued that he believed availability of some British sophisticated forces was essential: with this Malaysia and Singapore agreed. ‘We are good at this sort of thing, they are not.’
The Government were still conscious of a possible Indonesian threat, despite the ending of Confrontation. As they saw it, the main problem of South-East Asia was politico-economic stability. Therefore reductions should begin in Malaysia rather than Singapore, ‘and thus the Army in Malaysia will take the first brunt of the cuts’.
The Commonwealth argument, and the British commitments to it, was of course important.
The Government did not overlook consideration of history and sentiment. But we do not agree, added Healey, that the Commonwealth Brigade should be maintained just for the sake of it.
Healey then turned to 1975 and after. The decision they had in mind was:–
- To liquidate the Singapore base facilities permanently, and hand the base over to the Singapore Government.
- To maintain a capability for action in the area. As yet, the Government had not decided in detail how they would do this. At this point of time they could not very easily do so.
They proposed to keep an amphibious force in the Far East. The question was how should it be based? Possibly it could be based on the U.K.; perhaps on Cockburn Sound if Australia agreed; perhaps they could use what would become the civil dockyard of Singapore provided local security was good.
Healey then turned to the problem of whether the Government needed to take a final decision now—and having taken it, to announce it publicly. He felt that at the very least they had to make a decision, for planning purposes. Otherwise they could not save £300 million by 1975. We all had to realise that the moment you agreed on a planning assumption, then quite quickly it became known. But he agreed there was a difference between publicly announcing it, and making a decision. The Government’s policy was that the peoples of the Middle East, and the Far East, should live at peace with each other without the presence of external forces. He conceded that there was a good case for arguing that you did not have to be too precise about the date. Nevertheless, in Britain, internal political pressures were very strong for fixing a date for leaving the Far East. ‘And remember’, he added, ‘that if you leave 1975 open, then there is always pressure to leave before.’
The Government do not propose to leave strike aircraft in Singapore after 1971 but they could get them out there in a day or so in the event of an emergency.
HOLT, in reply, said that the United States was more vehement in discussions with us than perhaps with you. On their part, the Americans had undertaken a commitment which, it if were generally known in the United States, would disquiet their own public opinion.
WILSON said that the sea-air contribution was the right contribution for Britain to make. Such a phase would enable the British to get around more, in and out of Singapore to other parts of Asia, and would demonstrate the presence that Australia was continually urging. The Malaysians should provide the ground forces for internal security in Malaysia. In this way, the whole area would know we were there.
The meeting concluded at 12.45 p.m.6
1 Present, for UK: Wilson, Healey, Bowden, Fred Mulley (Minister of State, Foreign Office). Also, Sir C. Johnston, Field Marshal Sir R. Hull and other officials. For Australia: Holt, Fairhall, Downer, Bunting, Mcintyre, Hicks, Critchley and other officials.
2 See Document 72.
3 Emphasis in original.
4 Emphasis in original.
5 The Gurkhas were not, as the government intended, disbanded completely. Between 1967 and 1972, as a result of changing defence commitments and the reorganisation of the armed forces, the strength of the Brigade of Gurkhas was reduced from 14,000 to about 8,000. This was achieved by a reduction of the number of Gurkha infantry battalions from eight to five, reductions in the strength of the three corps units (Engineers, Signals and Transport) and the disbandment of the Gurkha Independent Parachute Company and the Gurkha Military Police.
6 The UK record of these talks is at UKNA: FCO 46/56. In the UK record, Fairhall argued that although it was difficult to dispute the financial arguments surrounding Britain’s economic situation, the UK now seemed to be ‘planning to go home’ before the desired regional situation had been established in Southeast Asia. The US had made plain it could not fill the vacuum the UK would leave, and Australia could not do so since its own defence budget had grown by a third since 1966 and was likely to go up by another twelve to fifteen per cent in 1967. Australia had almost doubled defence spending as a proportion of GNP over the last five years. The question mark remaining over the future of Indonesia meant a credible deterrent had to be maintained. Fairhall wanted discussion of the future of the Commonwealth Brigade and the timetable for a military response after the bases had been closed.
In the UK record Healey referred to his recent talks with Tunku Abdul Rahman and Lee Kuan Yew in Malaysia and Singapore. Both he said accepted the UK argument that sophisticated sea and air forces would be more useful to them than land forces. Holt responded that the ‘relaxed’ response of the Tunku and Lee ‘was largely an expression of their desire not to produce a feeling of lack of confidence in the future of the area which might affect outside powers. Their very strong concern, which they had expressed to the Australians, should not be underestimated’.
[NAA: M1003, EAST OF SUEZ TAlKS—LONDON]