UKNA: DEFE 25/105

London, 8 February 1965

Top Secret Specially Restricted Circulation

Base Facilities in Australia

Introduction

1. BDLS Canberra has reported some speculation in Australia that you are intending to discuss with the Australian Government the establishment of a British base in Australia. It is likely that you will be questioned by the Press on this subject, and it may also be raised with you officially by Australian ministers or Service Chiefs.

Background

2. As background to this question the recent history of inter-governmental exchanges and of Australian views is summarised at Appendix l. In addition, points from a related study on the effect of withdrawing from the Singapore base in the next decade are summarised in Appendix 2. This study has no formal authority and cannot therefore be communicated to the Australians.

Our Views

United Kingdom's Current Policy

3. Our policy on this subject is summarised in a Chiefs of Staff study on Australian and New Zealand contribution to the defence of South-East Asia. This is as follows:

The long-term threats in South East Asia are from the expanding military power of China and the expansionist policies of Indonesia. These threats, coupled with the political instability of the countries which at present lie outside Communist domination, render the tenure of our main and forward bases in the area uncertain. We have already remarked that, if SEATO were to break down and the Commonwealth Forces had to leave the mainland of South-East Asia, the role of the United Kingdom forces in this area would be to assist in the close defence of Australasia, and that the composition of these forces would have to be decided in conjunction with the ANZUS powers. The improvement of defence facilities in Western Australia and the Northern Territories would, in our opinion, be a prudent insurance against developments in the future, and provide an alternative base for United Kingdom and allied forces in case of need.

4. We are advised that, in amplification of the above, it is not the present Indonesian policy of confrontation that would render the tenure of our main and forward bases uncertain but the situation that could arise in the period following an acceptable solution to confrontation.

5. So long as confrontation exists, Malaysia will need our presence there, and we are committed to maintaining our bases there in order to carry out our obligations to defend her. If, however, Indonesia were eventually to modify her expansionist policies and it was possible to conclude a peaceful settlement, we might, with Malaysia's agreement, be able to run down our forces in Malaysia and thus help her to counter the accusation that she is under neo-colonialist influence. On the other hand, if the Defence Agreement under which we retain our bases in Malaysia were terminated before a lasting settlement had been reached in South-East Asia, Malaysia would risk a resurgence of Indonesian or Communist threats to her security. In any event, and even if our forces were withdrawn from Malaysia, as partners in the Commonwealth and particularly in ANZAM we would remain obliged to help in the defence of Australasia.

Recommendations

6. You should not yourself raise the question of British base facilities in Australia if you consider that to do so would be misinterpreted.

7. If the subject arises confidentially in discussion with Australian ministers you should speak on the lines of paragraphs 3, 4 and 5 above. Whilst avoiding any suggestion that we have doubts as to our need for bases in Malaysia in the foreseeable future, you should make clear that the United Kingdom would naturally be very interested in any improvement intended in Australian defence facilities in Western and Northern Australia because, in any event, we would remain obliged to help in the defence of Australasia. It would also be valuable to hear the Australians' views on the likely tenure of our bases in Malaysia.

8. If you are drawn in discussion you should make use of the additional points in Appendix 3.

9. If the subject is raised in public or by the Press, you should deny that there is any basis for the suggestion that we are considering ourselves, or with the Australians, any question of an alternative to our bases in Malaysia, including Singapore.

APPENDIX 1
RECENT BACKGROUND

1. In an exchange of telegrams between Mr. Macmillan and Mr. Menzies in 1962, it was agreed that there should be further study in both Australia and the United Kingdom of defence problems in a possible situation in which the facilities in Malaysia might no longer be available.² It was also agreed that we should all guard against a state of mind which might come to accept the loss of Malaysian bases as inevitable. In the event, this further study was not pursued and the United Kingdom study on the subject was cancelled. At the same time we were informed that the Australian views remained unchanged from Mr. Menzies's earlier telegram, but that the Australian planners thought that without Malaysian bases, Commonwealth forces both for SEATO and for the defence of Australia and New Zealand, would best be based on the East coast of Australia, where the necessary facilities already existed.

2. In October/November 1964 a small team of naval experts visited Australia to explore the prospects of the possible future use by the Royal Navy of dockyard facilities in Australia, in order to make up for the limitations of Singapore whose capacity for dealing with the\ increased size of the Far East Fleet is over-stretched.

APPENDIX 2

RELATED STUDY ON EFFECTS OF WITHDRAWING

FROM THE SINGAPORE BASE

1. A recent study considered the effects of withdrawing from the Singapore base within the next decade. Relevant points from the summary are:

(a) Our military presence in Malaysia gives solidity to the Western position in South East Asia, under-writes United Kingdom policies and interests, provides a second line of defence against Chinese encroachment should Indo-China fall, and gives us some influence in the area with our major ally, the United States.

(b) We could not sustain our interests by non-military means unless the area were neutralised.

(c) If the Singapore base were lost without alternative facilities being found elsewhere, our military presence would be reduced. In these circumstances we could contribute much less than at present to SEATO, and hardly at all to the forward defence of Australasia, nor should we be able to retain a significant influence on United States policy.

(d) If the Singapore base were lost but its facilities were replaced in Australia and elsewhere, we could maintain sufficient forces to meet our commitments though in slower time. Replacement of the facilities would however be prohibitively expensive if borne by the United Kingdom alone and we should aim to share existing facilities and the cost of developing them. If our contribution were adequate in such an enterprise shared with the United States, the United Kingdom would expect to keep some influence over United States policy.

(e) The pressures which would oblige us to leave Singapore are unlikely to afford us more than two years' notice at most; replacing the lost facilities would take at least six years.

APPENDIX 3

ADDITIONAL POINTS FOR DISCUSSION IF REQUIRED

1. The reference in the Chiefs of Staff study to an alternative base might lead to an impression that the United Kingdom contemplated the setting up of base facilities in Australia as a complete substitute for our present bases in Malaysia.

2. The front line for the defence of Australasia is on the mainland of South-East Asia, and our joint support for SEATO and of Malaysia contributes to the defence of the Australian Continent. In this forward defence, the primary British bases in Singapore and Malaya play a substantial part. However, the militancy of Indonesia compels us to recognise a potential threat closer to Australasia than the South-East Asian mainland, and it would be imprudent not to take precautions in the face of this development.

3. We therefore continue to be intensely interested in any plans Australia may have for the development of base facilities which might broaden the scope of her defence, and if asked to participate in such development we should be most interested to consider the possibilities. You would wish to point out, however, that you could not, in a general discussion of this nature, imply acceptance of a definite commitment.

4. So far as the location of the base is concerned, the resources of population, industrial power, and water on which any base depends are not to be found in the Northern Territory but only in the South West and South East of Australia. Thus for reasons of geography alone, (the distance by sea from Sydney to Singapore, some 4300 miles, is approximately the same as from Plymouth to Aden), no Australian bases could be satisfactory alternatives to Singapore/Malaya.

5. We realise that Australian plans for the development of bases will be dependent on resolving the conflict between strategy, the realities of geography, and economic resources. The development of any United Kingdom facilities will be wholly dependent on what base facilities Australia develops for herself.

The British Labour Government's first defence review¹

Over the weekend of21-22 November 1964, British Government ministers, service chiefs and senior officials met at Chequers, the Prime Minister's country residence, to consider Britain's defence and foreign policy. Their deliberations were not simply a response to the immediate economic situation facing the Labour Government. They were also the latest in a long line of reappraisals dating back at least to 1950 or 1951 and even, some would argue, to the 1930s. Over these years successive British governments had faced the problem of squaring means with requirements. At issue was how Britain might sustain an extensive range of commitments overseas from a shrinking resource base. The debate in Whitehall had reached a significant juncture on the eve of the 1964 election. Officials servicing the Cabinet's Defence and Oversea Policy Committee were ready with advice for a new government that 'we should not indefinitely maintain our bases in Aden and Singapore', ² although risks would be involved in giving them up.

The purpose of the weekend meeting at Chequers was not to make decisions but to consider various policy options for Britain's three defence roles: the nuclear deterrent, NATO, and overseas commitments, the latter in the form of military and naval bases on the one hand, and treaty obligations on the other. Of Britain's allies in Europe, West Germany performed only one of these roles, and France two. With defence costs escalating, the meeting confirmed that Britain could not maintain the three roles on their existing scale. Either one or more had to be abandoned or all three scaled down. It was suggested that nuclear weapons might be given up because they would become too expensive, and because war with the USSR seemed unlikely. In this event priority might be given to overseas commitments where Britain played a 'historic' role with forces and bases already in place, to the maintenance of which the US attached importance. Afro-Asian hostility to such forces might dissipate as their governments reached maturity on the international stage. US support should be encouraged and greater Australian participation sought in Southeast Asia, thus enabling Britain to reduce its own role.

An alternative scenario suggested Europe should take priority. Geographical proximity was one reason. Another was the possibility that if Britain reduced its European military role this would lead to a loss of influence with the US and a corresponding increase in German influence in Europe. Also, the size of Britain's forces East of Suez was small by comparison and it was open to question how influential they would be in a conflict wider than the current confrontation with Indonesia in eastern Malaysia. To redeploy these forces to less sensitive areas would be slow and costly, and to leave them where they were would make them vulnerable to local hostility. The conclusion at Chequers was that no decisions should be taken until Britain's allies had been consulted. That Britain had to choose between the three roles should be impressed upon her 'clearly and bluntly'.

³

Consultation produced reactions from the US and Australia ranging from suspicion to outright opposition. In a conversation with Wilson at Downing Street in May 1965, Dean Rusk, US Secretary of State, emphasised, in the context of a deepening American involvement in Vietnam, that the US should not be left as the only country of the 'free world' acting on behalf of freedom in other parts of world. Asked by Rusk about reports that Britain was planning to reduce commitments, Wilson replied that a review was underway, and he personally had a 'prejudice' for the maintenance of a role East of Suez; he would rather pull 'half our troops from Germany than move any from the Far East'. ⁴ In other conversations with British ministers, US policy makers linked American support for Sterling with the maintenance of Britain's world role. The point was not lost on Wilson, who acknowledged that 'finance, foreign policy and defence must hang together particularly East of Suez'. Robert McNamara, US Defence Secretary between 1961 and 1968, was particularly hawkish over Britain's not pulling out. He told Aviation Minister Roy Jenkins in June 1965 that Britain had an 'inescapable commitment in the Indian Ocean and Far East for at least the next ten years'. ⁵ Australian reactions mirrored those of the US and both worked to scupper any early British initiative to end the confrontation with Indonesia. Denis Healey, the Defence Secretary, was especially frustrated. In his view 'continued intervention in the affairs of Southern Asia by "blond Caucasians with guns" may be politically counter-productive'. ⁶

When they came to power in 1964, the Labour Government inherited a defence programme forecast to cost £2,400 million in 1969–70 at 1964 prices, an increase of £400 million above the level of defence estimates for 1964–65. A national plan produced by the Department of Economic Affairs in September 1965 set a spending limit for defence of £2,000 million by 1969–70 at 1964 prices. Economies in defence programmes–cancellation of the TSR2 aircraft and a fifth Polaris submarine, together with savings in research and development, a reduction of the Territorial Army, and inter-service rationalisation (the pooling of common administrative and support services)–brought the estimate down to £2,200 million. A gap of about £200 million remained to be closed to meet the new target.

What means might be found of closing the financial gap to meet the 1969–70 target was the subject of a report by the Defence and Oversea Policy Committee considered by Britain might cut or reduce. ⁷ Substantial savings in Europe were ruled out. Britain's own security and the political and military fabric of the Western alliance were believed to be at stake. The most that could be expected was action by West Germany to ease the foreign exchange costs of maintaining British forces on the continent. Next to be considered were Southern Arabia and the Persian Gulf, where there were substantial UK for ces; Iran, where there were no forces but British involvement because of CENT0;⁸ and Libya, where there were small forces and a treaty commitment. CENTO was not a viable military alliance. Its principal value was that it provided a framework for Iranian cooperation with the West and Iran's pro-Western alignment was said to be 'of great value to us'. The perceived threat to Iran in the 1960s was communism, and it was therefore a front-line state. Iran also represented the one 'eastabout' air route to the Gulf and Southeast Asia and the Far East that was freely open, and it was the only non-Arab source of oil in the Middle East. For CENTO purposes, Britain stationed four Canberra squadrons with nuclear capability at the Akrotiri Sovereign Base Area in Cyprus. Unless two of the squadrons could be moved to Malta, they would have to remain at Akrotiri.

Gulf oil was another factor, although here opinion was divided as to whether a British military presence safeguarded or endangered the installations and the flow of oil. There was, however, a consensus that British forces contributed to general stability and ensured the quasi-independence of the smaller Gulf states still under UK protection. A sudden withdrawal would leave a 'power vacuum' and alienate Iran. Equally it was recognised Britain could not remain indefinitely in the Gulf; the aim therefore should be to prepare for withdrawal, perhaps through some form of federation of Gulf states or by association with Saudi Arabia, simultaneously ensuring the process did not damage relations with Iran. In considering the manner and timing of withdrawal, account had to be taken of the position in Aden and the commitment to Kuwait. The Aden base served a strategic purpose in supporting operations in the Gulf. But it was doubtful that a base could be maintained in Aden or elsewhere in South Arabia after independence, which was envisaged by 1968 at the latest. The conclusion therefore was to withdraw from the Aden base when South Arabia achieved independence. But elsewhere, in the short-term, British facilities were to be expanded. The Kuwait commitment had to be maintained, even though it meant capital costs in the Gulf would be more expensive. If the eventual withdrawal were to be orderly, Britain would have to stay in the Gulf until the mid-1970s, perhaps longer. Some of the forces in Aden would have to be moved to the Gulf and additional facilities put in place. This left Libya, where Britain had a treaty commitment lasting until 1973, and where the main aim was to keep Libyan oil out the hands of the United Arab Republic. If the US could be persuaded to take over the Libyan guarantee (US interests in the country were larger), Britain would be able to give up the facilities it maintained for Libyan defence purposes in Cyprus (the base at Dhekelia) and Malta.

In such territories as Hong Kong and Gibraltar, the defence commitment was unavoidable. Limited capabilities were to be maintained in the Caribbean, South Atlantic and Africa. Over Malta, the UK found itself engaged in exchanges with the Maltese authorities about the compensation to be paid for the winding down of naval facilities. These were to become increasingly acrimonious. This left the 'Indo-Pacific' region, where far larger issues were involved.

It was agreed that there could be no military withdrawal from Southeast Asia before the end of 'confrontation' with Indonesia over Malaysia, which had to be secured not by military means but through negotiation. There was also agreement that, to a far greater extent than in other theatres, Britain's defence spending in the Far East and Southeast Asia was out of all proportion to the extent of British economic interests in the area. Political interests were shared with the West generally and were not peculiar to Britain. The aim was to contain Communist China politically and militarily. The British view of how to achieve this was through regional neutralisation, and this in turn involved the end of foreign bases and the withdrawal of foreign troops. But, as in the case of the Persian Gulf, Britain could not withdraw precipitately or prematurely. Instead Britain should seek a reduced role in cooperation with allies. On the base at Singapore, it was argued, ultimately the facilities would become untenable. Both Singapore and Malaysia would come under pressure from the Afro-Asian bloc to expel foreign troops, and the pressure would mount after confrontation ended. It was accepted that Britain's allies would probably take an opposite view–all of them because of the communist threat in the region and additionally in the case of Singapore because of the economic implications of closing the base. But Britain could not afford to ignore its own economic imperatives. Without substantial reductions in Southeast Asia, it would be impossible to meet the 1969–70 target for defence spending. The aim therefore should be to restrict British defence spending in the whole of Southeast Asia and the Far East to £186 million a year. To maintain the status quo would cost £245 million a year, £270 million a year if confrontation continued. The review concluded there should still be 'a visible United Kingdom military presence' in these regions, but what the nature of the force would be, where it would be located, and what tasks it would perform were subjects for further investigation by Whitehall officials and for discussion with allies.

The results of the defence review were published in a White Paper in February 1966.⁹ Albeit at a reduced level and despite the decision to give up the Aden base, the main conclusion to be drawn was that Britain still intended to perform a world role by means of an East of Suez presence. Two further conclusions stood out. First, Healey warned that Britain's ability to perform militarily East of Suez was now heavily circumscribed. The cuts in defence programmes meant Britain would no longer be able to fight even a limited war against a relatively sophisticated enemy (Indonesia, the United Arab Republic or Iraq) outside Europe, nor would it be able to conduct long-term and large-scale counter-insurgency operations along the lines of confrontation. Secondly, time and again during the review the importance of keeping in step with the US was emphasised. Patrick Gordon Walker, Wilson's former Foreign Secretary, was emphatic in the advice he was still tendering to the Prime Minister: '[O]ur role as a world power lacks reality unless we work out our position at all points in relation to the United States. ... The issue is not Europe v. East of Suez, the problem is whether we are an island off the north-west corner of Europe or a world power and that means inter-dependence both in the framing and in the carrying out of policy.'¹⁰

1 COS 31/65. This memorandum was prepared by the UK Defence Planning Staff for use by Mountbatten during his forthcoming tour to Australia. It was approved by Healey, Secretary of State for Defence.

2 See Documents 13 and 16.

1 Official UK documentation on the Labour Government's defence reviews of the 1960s is published in ESAC, Part I, Documents 1-35.

2 UKNA: CAB 148/4, 'Report of the Long-Term Study Group', minutes, meeting of Cabinet Defence and Oversea Policy (Official) Committee, 14 October 1964, published in Hyam and Louis, eds, The conservative government and the end of empire 1957-1964, Part I, Document 81.

3 UKNA: CAB 130/213, MISC 17/1, 'Defence Policy', minutes, meeting at Chequers of ministers, service chiefs and senior officials, 21 November 1964, published in ESAC, Part I, Document 3.

4 UKNA: PREM 13/1890, record by Wright of Wilson's conversation with Rusk, 14 May 1965, published in ESAC, Part I, Document 4.

5 UKNA: PREM 13/215, letter, Sir P. Dean to Sir P. Gore-Booth, 10 June 1965, cited in ESAC, Part I, Document 4, editors' note.

6 UKNA: DEFE 13/115, minute, Healey, 5 October 1965, cited in ESAC Part I, Document 4, note 4.

7 UKNA: CAB 130/213, MISC 17/4, report to ministers, Official Committee of Defence and Oversea Policy Committee, 8 November 1965, and MISC.17/8, record of meeting at 10 Downing Street of ministers, service chiefs and senior officials, 13 November 1965, published in ESAC, Part I, Documents 6–7.

8 Central Treaty Organization, created in August 1959 from the Baghdad Pact, a defence agreement concluded in February 1955 between Iraq and Turkey. Britain acceded to the pact in April 1955, followed by Pakistan in September and Iran in October. Iraq parted company in 1958 after the coup which destroyed the pro-Western monarchy.

9 Statement on the Defence Estimates, 1966: Part I The Defence Review Cmnd 2901 ( 1966); Part 2 Defence Estimates 1966-67 Cmnd 2902 ( 1966).

10UKNA: PREM 13/216, minute, Gordon Walker to Wilson, 23 November 1965, published in ESAC, Part I, Document 9.