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to consult over measures to be taken in relation to an attack,

or threat of attack, on Malaysia or Singapore. Our Partners in

·

the Arrangements, all of whom are Commonwealth members, and other

friendly governments, e.g. the United States, attach importance

to the contribution the Arrangements make to stability and

· political confidence in South East Asia.

4.

This confidence was shaken by the Australian decision taken.

last year to withdraw their ground forces (although not their air

or naval contributions), and it would inevitably be damaged by

another withdrawal. Moreover the circumstances of the Australian

decision demonstrated that our other Partners expect prior

consultation before decisions affecting the Arrangements or the

stationing of forces are made or announced. There would be no

time to do this adequately if anything about Singapore were to be

said in the Budget Speech.

5. The New Zealand Prime Minister has said since the election

that any further changes would be undesirable, and the New

Zealand Government have asked to be fully consulted in advance if

any are contemplated.

6. You will see that the draft puts down a marker about the

Defence Secretary's implication in paragraph 4 of his minute that

our forces and commitments East of Suez (other than in Hong Kong)

can be regarded as a group and should be the first candidates for

cuts. This is really anticipating the outcome of the defence

review in the same way as Mr Healey proposes. We would not

necessarily dispute Mr Mason's approach, but his minute is in

danger of oversimplifying the problems. The 1968 White Papers

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