NAA:A1209, 1965/6595 PART 3

Canberra, January 1966

Top Secret

British Defence Review: Report by the Defence Committee on Matters for
Discussion between British, Australian and New Zealand Ministers

Introduction

At its meeting on 5th January, 1966, the Cabinet noted that the British Secretaries of State for Foreign Affairs and Defence would be visiting Washington on 27th January for further talks in relation to the British Defence Review and the problems which it was raising, and that the Secretary of State for Defence, Mr. Healey, would afterwards visit Canberra for discussions with Australian and New Zealand Ministers.

2. In a message to the Prime Minister received 31st December, 1965,¹ relating to the Defence Review, and giving an account of the recent talks between the United States President and the British Prime Minister, Mr. Harold Wilson, stated:–

'It is essential that the total cost of our defence effort, both in financial terms and in terms of the burden on economic and manpower resources generally, should by 1970 be brought down to a figure within the economic capacity of the nation. Our Defence Review has confirmed our impression that we must reduce the burden and contract our commitments to some extent in order to meet the limits of a £2,000 million defence budget. But I made it clear that it is our intention to have a realistic and effective defence effort; that we intend to maintain our world role; and that throughout our Defence Review we had been concerned to maintain and to re-emphasize the concept of inter-dependence with the United States and our other principal Allies.'

Mr. Wilson then outlined the following preliminary views reached in the Review, as it applied to the Far East:–

' In the Far East considerable difficulties arise. We must assume that confrontation would be ended well before 1970, and our planning was based on this assumption. Thereafter it should be our aim to re-establish normal relations with Indonesia and to bring them into a position in which they could form a link in a system designed to contain Chinese expansion. At the same time relations between Malaysia and Singapore, which at present were extremely difficult and possible internal developments in Singapore were likely to make our dependence on defence facilities in their countries increasingly hazardous, and it was still our judgement that we could not expect to hold them indefinitely. We had no intention of withdrawing precipitately, but we were convinced that we should now begin planning an alternative posture in the Far East area as a whole, and that it was urgent to start making preparations for substitute facilities, preferably in Australia. This might be based on the concept of some form of quadripartite arrangement to which we, the United States, Australia and New Zealand would contribute. We should need to put a limit on our own total liabilities in the area, and a careful burden-sharing exercise would therefore be needed in this context. We hoped that our partners would be prepared to carry the new capital expenditure which would be involved. I said that a possibility which we had ourselves not considered in detail but which might be worth looking at was to transfer our Polaris submarines to the area East of Suez as part of our contribution to the defence of that area, provided that they were "internationalised" by one means or another as we have proposed that they should be in the European context.'

3. Australia's reply emphasised two main points–that the Government sees the forthcoming discussions in Canberra as a prelude to quadripartite talks on the problems of the region, and that we do not expect to be in a position in the discussions to arrive at finality on the matters in question.

4. There are thus two main and interrelated strands of thinking on which the British Defence Review, insofar as it relates to the Far East, is proceeding. Firstly, there is the objective of containing defence expenditure within a total of £2,000 million (in 1965 values) by 1970 requiring substantial cuts in defence commitments. Secondly, there is the assessment that dependence on facilities in Malaysia and Singapore is increasingly hazardous, with a consequential need for planning an alternative posture and to start preparations for substitute facilities. These matters and their implications are examined further in this report, with particular reference to aspects which might be discussed at the forthcoming talks between British, Australian and New Zealand ministers.

The Importance of the British Position in South East Asia

5. Australia's defence policy for a number of years has been based on a forward defence strategy to hold South East Asia thus providing depth of defence of the Australian mainland and its island territories. The viability of this policy depends primarily on the maintenance of the U.S. commitment to South East Asia and the powerful contribution of forces by that country, but the continued presence of British forces and particularly the availability of bases in Singapore/Malaysia for use by forces of the ANZAM countries are most important elements of the policy.

6. Britain is the only country in the western world which shares with the United States world wide responsibilities, and she has continued to play an important role in partnership with the United States in maintaining world order and security. In the American view it is fundamental that the United States should not be the only free country exercising global military responsibility. The British contribution is particularly valuable in the area east of Suez because of the traditional and historical British position there; her success against communist insurgency waged over many years; the arrangements entered into with a Sovereign Malaya and Singapore; the established base facilities especially. in Singapore/Malaysia; and the considerable British forces deployed there.

7. Cabinet has endorsed the view we expressed in October 1965 that the centre of possible general war has now moved from Europe to Asia and the emergence of China will probably present the main political and military problems for the world in the next few decades. In South East Asia, China seeks to extend her influence and ultimately dominate the area. She realises that this objective can be more surely and economically achieved through the manipulation of governments than by military conquest. She has apparently appreciated that any attempt at military conquest by overt aggression would involve her in war with the United States, and as a counter has developed a sophisticated method of applying military power short of overt aggression for political purposes. This includes the use of subversion, insurgency and the support of military operations by communist countries within her sphere of influence. The detonation of China's first two nuclear devices has contributed to China's prestige and authority and has had some political and psychological impact on government and public opinion in Asia. In partnership with the United States, Britain should bring her political and military influence to bear to help in solving the problems arising from the emergence of China. We believe that the maintenance by Britain of an adequate presence in Asia, if necessary at the cost of reducing her commitments in Europe, would constitute the most effective use of her forces in allied global strategy.

8. The British presence in South East Asia also helps to balance the developing military strength of Indonesia. The British assumption is that 'confrontation' will be ended well before 1970 but there still appears to be an underlying British thought that the end of confrontation can be expedited by phasing out or withdrawal of British forces. We do not support this thought and opposed it during the course of the Quadripartite talks in September. We believe that in present circumstances a weakening of the British military presence or commitment would not be conducive to a healthier political atmosphere in Indonesia or move that country in the direction of co-operation. It could however involve Australia and the United States much more heavily and directly in dealing with possible Indonesian adventurism.

9. We believe that the British military presence provides stability by underwriting the national independence and security of Malaysia and Singapore. These countries do not enjoy the American guarantee afforded by membership of SEATO. It is unlikely that we could draw them into SEATO, one principal factor being the unease of the Chinese at coming into an alliance which seems directed against mainland China. It may be that Britain would give some guarantees in conjunction with withdrawal from Singapore, but there can be no doubt that these guarantees would be weaker both on paper and in practical operation.

10. In a wider context also, the British and Commonwealth presence in its current form is a great stabilizing influence in Malaysia and Singapore. It embraces bases, forces, commerce and diplomacy and is a cementing force in a delicate communal structure. We believe the main racial groupings accept it and want it and its weakening could bring unrest, uncertainty and even new orientations.

The Effect of a Premature Abdication of Singapore and Malaysian Bases

11. The United Kingdom has expressed the view that by 1970, quite apart from financial considerations, she might no longer be able to count on the use of the Singapore bases once confrontation has ended. We believe that while the position may become uncertain this is too pessimistic a view. Lee Kuan Yew has had it in his effective power to make mischief over the bases for a number of years, even before achieving independence, but he has taken the greatest pains to avoid adverse developments. We believe he wants the bases retained indefinitely and he shows every disposition to work with Britain, Australia and New Zealand.

12. Nor does it appear that the British view is based on any assessment of the likely local political situation over the next few years. The British timing seems to relate at least as much to the United Kingdom aim of containing defence expenditure within £2,000 m. by 1969/70 as to any such assessment. Any tendency by the United Kingdom to accept the view that 1970 is a date beyond which the United Kingdom forces are not likely to be in Singapore/ Malaysia would be contrary to Australian interests and should be countered. The existing Commonwealth structure in these countries is a great asset which should be retained. An estimate of the period the United Kingdom could hope to retain forces in the area would only be arrived at by a continuing assessment of political and military factors affecting Singapore/Malaysia.

13. United Kingdom withdrawal in the foreseeable future from the Singapore and Malaysian bases would involve the whole conception of effective Western military effort on the mainland of South East Asia in support of the continued independence of the countries of the region. It would weaken international acceptance of Western bases and facilities in Asia. Countries in Asia, like India and Burma, which are willing to accept the fact of the British defence structure in Malaysia and Singapore–and indeed may value it–could be more disposed to feel that non-alignment and avoidance of military association with the West was their proper course. It could also unsettle the United States at a time when that country is showing firm resolution in the defence of South East Asia and when it is important that the American efforts be buttressed by those of other nations.

14. In more specific terms, the effect of withdrawal from the Singapore base would be to impair Britain's capacity to meet existing SEATO planning commitments. Britain has specific planning commitments within SEATO Plans for the rapid deployment and logistical support of British forces and certain Australian and New Zealand forces in the Indo-China area. Those existing plans would presumably have to come under review with the Asian SEATO allies.

15. We do not know Britain's precise intentions in respect of the Singapore bases. They may hope to retain them on a care and maintenance arrangement and plan for their rapid reactivation in emergency. It seems very doubtful whether this would be practicable. It would be more prudent to assume that once Britain had substantially withdrawn, the will of Malaysia and Singapore to work closely together in defence association with Britain and Australia would be eroded and effective reactivation very difficult to achieve.

16. In our view the development of a new system of bases in Australia would be no adequate substitute for the present British Defence structure in the region. The existence of this structure and associated ground, air and naval forces north of Indonesia and in the mainland of Asia enables the rapid deployment and intervention and sustained effort in accordance with our forward defence policy. In addition the bases afford protection to the Malacca Straits, and key internationally recognised waterway between the Pacific and Indian Oceans.

Australian Involvement

17. In the foregoing considerations Australia is deeply involved both in terms of national interest and existing partnership and treaty arrangements. We are party to a set of arrangements–based on Singapore and Malaysia–for defence of those countries, for servicing SEATO commitments, and for our forward defence. Our ground forces, ships and aircraft form part and parcel of the Commonwealth Strategic Reserve in Malaysia and Singapore and we have invested heavily in the establishment in Malaya of a major Australian Air Base in Butterworth and a military establishment at Terendak.

18. In Vietnam the Americans have taken the momentous step of committing large scale forces to the mainland of South East Asia in order to contain China. In this arena the stakes are large, and of global importance. China may come to the point of damping down the conflict in Vietnam, with significant implications for its future overall conduct and for evolution within the Communist world. Alternatively, China may become more heavily engaged and even start diversions at points along its periphery, such as activity along the Indian frontier. Australian forces have also been committed in support in South Vietnam, and for some time it has been clear that the United States' authorities desire increased military assistance from other countries, including Australia.

19. In sum we are associated with both the British and the Americans under SEATO arrangements, with the British under ANZAM arrangements, with the United States under ANZUS arrangements and with New Zealand in each case. Decisions which would have implications for these treaty commitments and arrangements cannot be taken without our participation–or that of our treaty partners.

20. At the present time Australia has over 5,000 personnel serving in South East Asia, including approximately 1,600 in South Vietnam, 3,450 in Malaysia and 150 in Thailand. In four years, between 1962 and 1966, the Defence vote has doubled from about £200m. to about £400m. By June this year the strength of the Navy will have risen in three years by 28%, the Army by 46% and the Air Force by 17%. Now the Selective National Service has been introduced with liability for overseas service. Attached at Appendix 1 ² to this report are statements prepared by the Services summarising their planned build up and ultimate fighting capacity based on current approvals, together with the planned development of facilities and installations and the overall cost.

Financial Considerations

21. In the context of the need for preparations for substitute facilities, preferably in Australia, based on some form of quadripartite arrangement, the British Prime Minister has stated that there would be a need to put a limit on the United Kingdom's own total liabilities in the area and that a careful burden-sharing exercise would be needed. He also expressed the hope that Australia in effect 'would be prepared to carry the new capital expenditure which would be involved', in providing substitute bases in Australia for the transfer of British forces to Australia from Malaya and Singapore. Even in the context of a burden-sharing exercise this proposal would raise considerable difficulties. This principle of financing is an entirely new suggestion. When Australia associated herself with the United Kingdom Defence Treaty to Malaya, we were pressed by the United Kingdom to contribute substantially to the cost of capital construction. In fact, at Butterworth and at Malacca, we have already sunk £6.7 m. in airfields, barracks and other facilities. Nor is there any basis for assessing the financial implications, e.g. what number of forces would be transferred to Australia, what form they would take, what bases and other facilities, e.g. housing, would be contemplated. The total cost could be immense.

22. It should again be emphasized, however, that bases in Australia are no substitute for the present structure. Moreover, from the financial aspect, it is hard to see how any early abandonment of the enormously valuable asset represented by the bases in Singapore and Malaysia could be expected to produce any overall saving in total costs of the defence structure to the allied partners. The economic and financial implications of the proposal would need the most careful and critical examination.

23. Consideration of Australia's position in any burden-sharing exercise must take full account of economic and financial considerations as well as the strategic and political factors which have been referred to in earlier paragraphs. These considerations are discussed in a paper prepared by the Department of the Treasury on Australia's Defence spending and its relation to the economy, attached at Appendix 2 to this report.

24. Briefly the Department of the Treasury paper refers to the task of the Government to decide the appropriate allocation of limited resources between immediate and limited defence, the longer term development of the economy and thus its defensive capacity, international aid and other primary objectives of policy. It points out that comparisons based only on Budget figures of direct defence expenditure as a proportion of Gross National Product are misleading and that to judge the total Australian defence effort requires further comparisons:–

(i) the rapid increase over the last four years of direct defence expenditure has been achieved by keeping personal consumption down. As a proportion of Gross National expenditure, personal consumption in Australia at 59% is now below that in the United States and the United Kingdom and is now below the levels prevailing during World War ll with the exception of the two years of maximum effort when it fell to 55%.

(ii) fixed capital investment in Australia, which also reflects the increasing demands on Australian industry of direct defence requirements, and the 1% per annum migration increase in population, is equivalent to 27% of Gross National Product by comparison with 18% in the United Kingdom and 17% in the U.S.A.

25. Short of the massive re-adjustments that are undertaken during a national emergency there is not a great scope for further reductions in the level of personal consumption. An increase in direct defence expenditure would, therefore, bite into fixed capital investment and thus affect our capacity to sustain the present migration intake, development projects and the capital investment by industry to meet defence requirements.

26. The suggestion of a burden-sharing exercise raises the question whether Britain's commitments could not be reduced in other directions. We have already (paragraph 7) expressed the view that the maintenance by Britain of an adequate presence in Asia even, if necessary, at the cost of reducing her commitments in Europe, would constitute the most effective use of her forces in allied global strategy. In this connection the British Prime Minister has stated that:–

' We felt that it would be necessary for our force commitments to N.A.T.O. to be maintained at approximately their present level, subject to the existing provision for the withdrawal of forces from Europe to meet crisis situations. At the same time, we are in terms of foreign exchange bearing a totally excessive proportion of the European burden, on top of our defence burdens outside Europe.... McNamara told me the next day that he believed that the United States could materially help us with the problems of foreign exchange costs in Europe. They were prepared to press the Germans for considerably more effective offset arrangements.'

Our understanding is that under current financial arrangements between Britain and West Germany, designed to relieve the British balance of payments problem, Germany has undertaken to place orders for defence and other goods in the United Kingdom in excess of £stg 50 million a year. This commitment represents some 60% of the current foreign exchange cost of maintaining British forces in Germany, of about £stg 85 million a year.

The Requirement for an Agreed Strategic Concept

27. Any precise consideration of the effects of the British proposals in our area of strategic interest is inhibited by lack of a clear cut declaration of British strategic aims. At this stage, the British Prime Minister has only been able to give 'a very broad picture of the way our thoughts are turning as regards the Defence review'. It has been assumed that confrontation will have ended well before 1970, and that efforts will have to be made to re-establish normal relations with Indonesia. In the British view, a British posture alternative to that dependent on the Singapore/Malaysia bases will have been planned and preparations made for substitute facilities in Australia, based probably on the concept of some form of quadripartite arrangement. The possibility has been mentioned of transfer under certain conditions of Polaris submarines to the area East of Suez. As regards Vietnam Britain will continue to pursue vigorously the possibility of opening negotiations.

28. The major problems for the Australian point of view which arise when the British proposals are considered in relation to the requirement to maintain a strong and stable British presence and posture in the Far East have already been outlined. In addition to these considerations, there is little evidence of British thinking on a broad strategic concept, on which planning could be based, of the future western role in the Far East. What role does Britain envisage for herself in the Far East in the future? What force levels are in mind and what will be their roles, tasks and locations? What are the intentions concerning future security ties with Singapore and Malaysia? How will existing treaty arrangements and commitments be modified? Is withdrawal, scaling down or a care and maintenance basis visualised for the Singapore bases? What substitute facilities might be sought in Australia?

29. Since confrontation began, Britain's forces in the Malaysia/Singapore area have increased substantially and now comprise broadly:–

Royal Navy	2 Aircraft Carriers
	1 Commando Carrier
	1 Guided Missile Destroyer
	18 Escorts
	5 Submarines
	Support craft, RFA's3 and Minesweepers
Army	21 Infantry battalions (including 8 Gurkhas, 2 Royal Marine Commando, 1 New Zealand and 1 Australian)
	10 other major units. Total strength approx 50,000
Royal Air Force
	19 Flying Squadrons, approximately 224 aircraft.

In present circumstances, it is possible only to speculate on what Britain's accepted commitments and force requirements in the Far East might be after 1970. These could stem mainly from agreements contracted under SEATO and under the Malaysian defence agreements of October 1957, and July 1963. There would be further additional commitments of a more minor nature to guarantee the internal security of British colonies in the Pacific and of Commonwealth countries in Africa.

30. For the implementation of SEATO plans Britain has agreed to make available the following forces:–

Naval forces	1 Attack Carrier, 1 Commando Ship, 1 Cruiser, 10 Frigates/destroyers, 3 Submarines, and Afloat support as required;
Ground forces	1 Infantry battalion ground and 1 Commando brigade (less one Commando);
Air forces	12 Day fighter/Ground attack aircraft, 8 Light bombers, 8 Maritime reconnaissance aircraft, 1 Composite air transport support squadron and Heavy/medium bombers with nuclear capability.

The potency of the above forces, including their ability to react quickly will be considerably enhanced if they are positioned close to or within the possible theatre of operations and it is reasonable to expect that to the extent that alternatives are needed, Britain would seek facilities in Australia.

31. In regard to the defence of Malaysia, except in the unlikely event that withdrawal or reduction of British forces in Singapore/Malaysia should coincide with the cancellation of her obligations under the United Kingdom/Malaysia Defence Agreements of 1957 and 1963, there would remain an obligation to retain in the general region forces to maintain the security of these countries. The size and nature of such forces would vary with the threat. We would need to know with some precision the range of commitments which the United Kingdom would hope to discharge from any facilities arranged in Australia.

32. It is clear that questions such as those above must be answered before we can consider properly our own future defence preparations and participate in planning for future defence arrangements. However, it must be emphasised that these questions can only properly be answered in the context of a strategic concept concerning the region as a whole, developed and agreed by the countries committed to the area and whose planning and preparations will follow from it. It would include consideration of a post-confrontation and post-Vietnamese conflict situation. Without such a concept it is not valid for example to proceed as the British proposals appear to do, on assumptions that 1970 has particular strategic significance, or that given an end to confrontation before then, substantial reductions in forces, or particular changes in posture will then be practicable.

The Importance of Quadripartite Discussions

33. Australia has emphasised that the forthcoming discussions with the British Minister for Defence are seen as a prelude to quadripartite consultations in the problems of the region, and that we do not expect to be in a position in the discussions to reach finality. The importance of high level quadripartite discussions is apparent from the complexity and scope of the problems which have been outlined in the foregoing paragraphs, their interrelation, and the nature of our involvement. Only in this way can our common strategic interests be identified, and agreed strategic concept for the Far East be developed, and these translated into agreed and concerted effort. In the broadest strategic sense the Prime Minister has emphasized in his message to Mr. Wilson of 22nd October, 1965, that 'we believe that it is a British and an American presence, allied with our own best performance and the best performance of others, as part of a co-operative arrangement, which alone can produce the vitally necessary stability'.

34. The need for joint consultation with Britain and the United States can be demonstrated by the interrelation for Australian Defence of the British proposal which, whilst indefinite, has far reaching defence and financial implications and the American desire for a substantially increased effort in Vietnam. We cannot attempt to deal satisfactorily with these separately and in isolation. If, for example, Australia were to decide to increase her commitment in Vietnam, this would affect her capacity to make an added contribution elsewhere in the region, e.g. to help the British. If the British defence posture based on Singapore and Malaysia is changed, our own forward defence policy and the degree to which we can commit resources on the mainland of South East Asia would inevitably come under review.

Contingency Planning

35. The United Kingdom believe that as a result of the separation of Singapore from Malaysia there is a need for the rapid development of contingency planning against the possibility of a forced withdrawal from the area. The requirement for such planning has in the past been opposed by the United States on the grounds that if it became known that the United Kingdom was seriously considering alternatives to Singapore the western position there would be greatly weakened. Although the United States' view is readily understood, Australia has on a number of previous occasions agreed to such planning with the United Kingdom because of our assessment that while the British presence in Malaysia/Singapore should be maintained as long as possible, the security of tenure is uncertain. The risks pointed to by the United States are real but in our view the preparation of contingency plans would help to convince the United Kingdom that we understand their problems and are willing to assist them and would be part of the price of persuading the United Kingdom to hold on in Malaysia/Singapore as long as possible.

36. Contingency planning should of course be based on agreed strategic concepts. It should cover the kind of military presence which should be maintained in Singapore/Malaysia given the end of confrontation. This would include an assessment of such forces, and the maintenance of facilities, perhaps as part of a co-operative arrangement with the local authorities, even if substantial overseas Commonwealth forces are not physically located in Singapore/Malaysia on a full time deployment. There is also a range of possibilities for partial withdrawal from Singapore to be considered. These would include on the one hand a reduction of forces without other modification of existing arrangements. On the other hand consideration might need to be given to maintaining the Singapore bases on a strictly caretaker basis with a view to their utilisation as forward areas at such times at it became necessary to deploy forces to South East Asia for actual combat commitment. There is also the median possibility of a reduction in forces accompanied by an arrangement to reactivate the bases to full capacity as and when necessary. Finally the practicability of maintaining bases in Malaysia even if Singapore is no longer available might be examined.

37. Planning would require to take into account the complex political implications of these various possibilities for withdrawing from the bases or modifying the arrangements under which we use them; the impact on the countries themselves, the possible worsening of our relations with Indonesia, and the likely effect on other South East Asian countries including Thailand and the Philippines in particular.

Relocation of Forces in Australia on the assumption that Singapore/Malaysia Bases are no longer available

38. Coupled with contingency planning regarding the future of bases in Singapore and Malaysia, there is a need to examine the extension of base facilities in Australia. In addition to alternative facilities suggested for British forces there is also the question of additional facilities which would be needed should a changed British posture require us to house in Australia our own forces which are currently deployed in Malaysia.

39. The implications of proposals for basing major British units in Australia in addition to our own forces now in Malaysia, and the nature of the facilities they would need, requires close examination. It would involve consideration of such factors as the nature and size and proposed location of the units concerned, whether the installations should be shared on some integrated basis or be self-contained, the terms of their tenure, command and control arrangements, maintenance problems, costs and cost sharing. In addition, the deployment of United Kingdom forces to Australia in peacetime would give rise to the normal problems associated with the stationing of forces in an overseas country including problems relating to jurisdiction and status for forces, and the use of such forces in delicate political circumstances, for example, use of British forces for internal security duties in the British Pacific Islands territories.

40. As an indication of the requirements which might arise in the event of unavailability of the Singapore/Malaysia bases, the attachment at Appendix 3 outlines for each Service possible major requirements:–

1. for our own forces;
2. for anticipated British forces on an estimated basis.

Briefly the requirements foreseen for the repositioning in Australia of Australian forces, given the unavailability of the Singapore and Malaysian bases, include:–

Navy	The RAN would need to become a two coast Navy with some forces stationed on the Australian West Coast. This would involve the provision of a minor naval base in Western Australia (to cost about £15m.), increases in its afloat support and in the whole infrastructure of the RAN.
Army	A building programme for accommodation which would cost from £8–10 m.
Air Force	Additional works mainly at Darwin, estimated to cost approximately £ 4.9m.
Communications Facilities	Singapore is a major communications centre for the Department of Defence and the three Australian Services and provision of alternative communications facilities would also be necessary.

41. It is emphasised that it is impossible at this stage to assess the full implications or the total additional cost for Australian defence in these circumstances. As stated earlier, if the British defence posture based on Singapore and Malaysia is changed our own forward defence policy would inevitably require review and could lead to changes in the size and shape of the defence forces to meet the new strategic situation.

42. For British forces, requirements in addition to those above depend largely on assumptions regarding the nature of the forces to be deployed. To provide a base capable of meeting most of the requirements for an assumed R.N. fleet comprising 3 carriers, some 15 escorts and 6 submarines together with supporting vessels might require at least seven years and could cost on a very rough estimate £30m., in addition to the £15m. referred to in paragraph 40. This excludes maintenance costs. Army has estimated that the cost of providing training and staging facilities for a British brigade group of some 5,000 personnel in the Darwin area might be between £5.25m. and £7.25m. Facilities for a similar force stationed permanently in this country would be very much greater. For the RAF it is estimated that two major bases would be required for a force comparable to the RAF contribution to the Strategic Reserve before confrontation–i.e. about 10–12 squadrons. Using existing bare strips (e.g. Tindal and Avalon) the cost of developing technical, operational and domestic facilities is estimated by the RAAF to be of the order of £12m. per base.

The Basing in Australia of Forces with a Nuclear Capability

43. The basing of British forces in Australia would raise the whole question of introducing to this country forces with a nuclear capability. For example in his message Mr. Wilson has referred to the possibility of transferring Polaris submarines to the area east of Suez. The question cannot be considered in isolation from our nuclear policy generally. The existing policy is that there is no immediate requirement for an Australian nuclear capability, but the possibility is not excluded that we may need this in the longer term.

44. The British Defence Review is one of several developments which have recently led to consideration of whether or not it would be timely to review our general policy towards nuclear armaments having regard to the political, strategic, technological and economic considerations involved. The introduction by British forces of nuclear weapons would constitute one of the possible alternatives to our manufacturing our own nuclear weapons whereby Australia could independently or otherwise become a nuclear power. These alternatives are:–

1. Reliance as at present on the United States and United Kingdom nuclear capability;
2. The more direct protection which could come from housing of British (and perhaps American) nuclear forces in Australia, which could result from the current studies of the British position in the Far East;
3. Possible multi-lateral arrangements for protection of non–nuclear powers in the Indian Ocean areas;
4. A bilateral arrangement in which Australia has some control over British or American nuclear forces based in Australia–the key to the cupboard system;
5. A bilateral arrangement in which Australia is provided by the United Kingdom or the United States with nuclear weapons under our own control;
6. The possibility that if Australia developed her own nuclear weapon Britain or the United States might be prepared to provide us with fissile material.

45. Following our recent considerations of these matters we have recommended that:–

(a) In the light of overseas developments and particularly the possibility of the emergence of additional nuclear powers it would be appropriate to make a new assessment of the political, strategic, technological and economic aspects of Australian policy in regard to nuclear weapons;

(b) The assessment should cover an examination of the possibility of Australia acquiring an independent nuclear capability by manufacture of her own weapons as well as possible arrangements with our allies.'

These recommendations are currently under consideration at the Ministerial level.

Conclusions

46. Our main conclusions are:–

(a) The centre of possible general war has now moved from Europe to Asia and the emergence of China will probably present the main political and military problems for the world in the next few decades. The maintenance by Britain of an adequate presence in Asia would constitute the most effective use of her forces in allied global strategy.

(b) The British military presence in South East Asia helps to balance the developing military strength of Indonesia, underwrites the national independence and security of Malaysia and Singapore and exercises a stabilising influence.

(c) The existing Commonwealth structure in Singapore/Malaysia is a great asset which should be retained and any tendency by the United Kingdom to accept the view that her forces are not likely to be there beyond 1970 should be countered. Any estimate of the period of tenure would only be arrived at by a continuing assessment of political and military factors affecting the area.

(d) Development of a new system of bases in Australia would be no adequate alternative to the present British defence structure in Singapore/Malaysia, which is essential for rapid development and intervention, and sustained effort in accordance with our forward defence policy.

(e) Australia is deeply involved in the foregoing considerations, both in terms of national interest and existing partnership and treaty arrangements. Our forces are serving both in the Malaysian and Vietnam theatres and in Thailand, and a rapid defence build up to meet our commitments is in progress. Decisions which would have implications for our treaty commitments and arrangements cannot be taken without our participation–or that or our treaty partners.

(f) The British proposal that Australia in effect 'would be prepared to carry the new capital expenditure' involved in substitute bases in Australia would have considerable difficulties, even in the context of a 'burden sharing' exercise. The economic and financial implications of substitute bases would require careful and critical examination and 'burden–sharing' should take into account a proper appreciation of Australia's developmental and other problems and the effects of her defence efforts.

(g) Precise consideration of the effects of the British proposal is inhibited by lack of any declarations of British strategic aims covering inter alia a post-confrontation and post-Vietnamese conflict situation. A strategic concept for the region as a whole, developed and agreed by the countries concerned, is essential for our own future defence preparedness as well as for co–ordinated planning of future arrangements.

(h) The importance of quadripartite discussions is apparent from the complexity and scope of the problems facing us, their interrelation and the nature of our involvement. Only through such discussions can our common strategic interests be identified, an agreed strategic concept be developed, and these translated into agreed and concerted efforts.

(i) The United Kingdom proposal for contingency planning against the forced withdrawal from the Singapore/Malaysian bases should be supported as a subsequent step to quadripartite discussions and the definition of strategic objectives. Coupled with such planning there is a need to examine the extension of base facilities in Australia, for our own forces including those now stationed in Malaysia, as well as for British forces which might be located here.

(k) Proposals to base British forces in Australia would raise the question of introducing to this country forces with a nuclear capability. This question cannot be considered in isolation from our nuclear policy generally. The desirability of reviewing factors bearing on this policy has recently been under consideration.

1 See Document 46.

2 Appendices not published.

3 Royal Fleet Auxiliaries.