Canberra, 12 January 1968
92. Immediate Secret
Following for Prime Minister from Commonwealth Secretary.
I outlined our proposals to Gorton1 and other Ministers and Officials on Defence and Foreign Policy Committees this morning.2 In addition to my general presentation I explained that the idea of a Five Power Conference was the Tunku’s suggestion which I had undertaken to put to the other Governments concerned. I made it clear that such a conference could not take place before our announcement and that in any case much preparation was needed first. I gave it as my personal view that there might be usefulness in it: for example, it might help to persuade the Governments of Malaysia and Singapore to cooperate together especially in the field of air defence. It would also provide the opportunity for considering whether and how Australia and New Zealand could continue and indeed increase their contribution to the security of the area as a whole. I stressed that our new proposals represented an historical re-adjustment in Britain’s world role. This was the moment of final acceptance that we must tailor this role to our economic resources in order that Britain could recover her strength which was in the interests of her Commonwealth friends as much as her own.
2. Gorton said that these proposals filled him and his colleagues with anxiety and dismay. We would be creating a partial military vacuum in the Far East in an area where the United States had hitherto assumed no responsibility. We would be giving up our ability to curb brush fire wars, which could in turn escalate to great power conflicts, without any guarantee of an alternative deterrent.
3. Gorton then re-capitulated, not in a spirit of recrimination, but in order to help us to understand their reaction to our present proposals, the various shifts in our policy from the Defence White Papers of 1966 and 1967, the supplementary statement on defence of July 1967, and your letter to Mr. Holt following devaluation in November, which re-affirmed the July decisions. We should not be surprised if they wondered if what I had now told them represented a final change. He said that until they knew the composition, capacity and availability of our general capability which was to be based in Europe there was no certainty that any British forces would be available in the area after 1971. The whole package was far too difficult for the Australian Government to accept: indeed they would have to protest publicly.
4. Hasluck (External Affairs) stressed that this was the third occasion since confrontation that they had been asked to adopt a new basis for their defence planning. He thought Britain had failed to recognize that there were two sides to the Australian approach: they were not simply concerned with the territorial defence of the Australian continent but with global security and in particular the risk of brush fire war in Asia becoming the prelude to a larger conflagration. This was a greater threat than any in Europe. He also emphasized the importance of the effect of our new decisions on Anglo-American cooperation which in tum affected Australia.
5. Hasluck (and other Ministers) was greatly perturbed by Denis Healey’s statement in The Sunday Times that by 1971 Britain’s contribution towards the security and stability of independent States outside Europe would be no greater than that of any other European power. They saw this as an expression of Britain’s determination to withdraw into Europe and as negativing what I had told them about our general capability and our continuing interest in Asia and Far Eastern security. They were not, like the Tunku, resigned nor, like Lee, storming: but they were facing the cold reality that until they could see what our general capability really meant they had nothing but words to back up our assurances that we would come to their assistance if attacked. Our new policy did not give the credible assurance which Asian countries in the region needed if they were to have the time to develop a satisfactory system of regional security. A continuing British presence would make a unique contribution to this: Viet Nam had showed that the sole support of a super power was not sufficient. Our new policy would reduce Britain to a status a little less than Italy and a little more than Sweden. We would be damaging regional security and thus the prospects for world peace.
6. Fairhall (Defence) said that, while they recognized the trends some time ago, they were dismayed by the pace of our withdrawal and the new date for its completion. They too were facing economic problems: their defence budget was expanding but there were limits to the increases they could contemplate. It seemed that in SEATO the United Kingdom contribution would be diminishing to extinction. They had not yet settled their own thinking on the future of the Anglo-Malaysian Defence Agreement but they would have to consider carefully whether they relied on continued association with it or whether they should enter into some new direct form of association. He repeated a number of Hasluck’s arguments, especially concerning the meaningfulness of our general capability. He urged that, if flexibility in our position still existed, we should extend our programme for withdrawal having regard to the problems we were creating for them and that in other matters, e.g., the future of our facilities in Malaysia and Singapore, we should be as flexible as possible.
7. McMahon (Treasurer) also emphasized that our new policy would be regarded as complete withdrawal, without any credible ability to help after 1971. He could not accept this nor did he think it could be justified for economic reasons. We were basing our long-term policy on the short-term economic problem and the ephemeral situation which was facing us. He believed our economic prospects were better than we made out. After 1971 Australia would be devoting a greater proportion of her G.N.P. to defence than Britain: they could not increase this further. They would have no balance-of-payment problems except for the overseas defence expenditure which they were shouldering. This was aggravated by their need to purchase sophisticated military equipment overseas. We could not look to them to provide the defence umbrella under which we could continue our lucrative trade in the area. The Postmaster General (Hulme) complained that the procedure and timetable we had adopted amounted to no more than informing us of our decisions. It was not consultation in accordance with the true spirit of the Commonwealth.
8. The Deputy Prime Minister (McEwen) said that our decision to withdraw by 31 March, 1971 would mean that our military capacity would cease to be effective some time before then. The time scale was thus impossibly short. The offer to re-interpret the Anglo-Malaysian Defence agreement without the assurance of forces being available or their advance commitment was meaningless. The true picture of our intentions had been given in Mr. Healey’s article. We had brought the Borneo States into Malaysia in the hope of creating a viable economic entity but were now withdrawing the essential prop represented by our defence guarantee. We were confronting Australia with the prospect of either standing alone with Malaysia in future or facing up to the consequences on her relations with Asian States or of her declining to do so. Australian troops had arrived in Belgium, Gallipoli and Greece without question but we would not even give Australia verbal support in Viet Nam. We should not forget that until recently Australia was our biggest customer. He hoped profound consideration would be given to Australia’s views and that we would modify some of our conclusions. For example we could leave some balancing forces in Malaysia so that the Australian forces were not left exposed. He hoped we would also extend the period of our withdrawal considerably to allow proper time for discussions and the ending of the Viet Nam war. He would have preferred no public announcement of our intention to withdraw but he supposed that was impossible. However we could accompany our announcement by a statement showing that the forces we retained would have the ability to be deployed in the area effectively. It was not a question of whether we were willing to fight in Australia: Australian defence lay further forward in Viet Nam and Borneo, and we should play our part in this. He thought that Denis Healey’s words in The Sunday Times were ‘intolerable and incredible’.
9. I then dealt with the main points which had been raised. I said our decisions were firm but not final until Monday’s Cabinet when I would convey to my colleagues all they had said. I explained that the short time available for consultation was inevitable in the light of the need for an early public announcement in order to deal with the economic situation and international confidence. I said that the sentence from Denis Healey’s article had been taken out of context and I quoted other passages to put it into perspective. The essential point was that we could not be expected to go on devoting more of our economic resources to defence than our European competitors. It was not true that we were retreating from a recognition of importance of global security: but we had to reduce our military capacity in line with our resources. We were still the only country other than the United States to contribute to peace-keeping outside our own continent. Our new policy was based on a deliberate long term judgement of what we could afford, not on short term considerations. I said what I could about the size and availability of our general capability. I said I had taken careful note of their judgement that our withdrawal by 31 March, 1971 allowed insufficient time to deal effectively with the problems involved.
10. In conclusion Gorton said that the Australian Cabinet were united in their reaction. South East Asia was now the Balkans of the world and he was dismayed that such large decisions should be made for the sake of comparatively mall savings in such a sensitive part of the world whereas other areas must offer the possibilities of larger economies. The most helpful thing we could do would be to extend the date for our final withdrawal considerably. Gorton said he had been authorized by his Cabinet to give me a memorandum setting out the Australian view of our plans. I have not yet received this.
11. I shall be seeing the Press later today. There was no agreed communique, since the Australian Government feel obliged to state publicly that our proposals are not acceptable to them.
12. Australian Ministers expressed their views forcefully but with courtesy and restraint. Their moderation did not conceal the depth of their feeling or their sense of the solemnity of the occasion.
1 Following Holt’s presumed death, McEwen became Prime Minister on 19 December 1967, his appointment lasting until the Liberal Party elected a new leader. Gorton replaced him as Prime Minister on 9 January 1968.
2 Thomson was accompanied at the meeting by Sir S. Gamer, his Permanent Secretary, Johnston, General Sir R.M. Carver, Vice-Admiral Sir I. Hogg (Vice-Chief of the Defence Stall), and two officials from the UK Ministry of Defence and Commonwealth Office. Australia was represented by Gorton, McEwen, Hasluck, Fairhall, Hulme, I.M. Sinclair (Minister for Social Services), Bunting, Plimsoll, Sir Henry Bland (Secretary, Department of Defence) and Lt General Sir J. Wilton (Chairman, Chiefs of Staff Committee).
[UKNA: PREM 13/2801]