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J.H. We ought to have full discn on constitution before conference opens.
P.M. Yes: early in Feby, when we know what the bids will be.
R.A.B. Must preserve some posn of strength – C’wealth base.
R.M. Not as main base – leave camps, training etc.
D.S. Not much chance: cf. Nigerian dislike of Defence agreement.
H.W. K.A.R. will have to take it over: we mght. be able to use it as

training area.


P.M. Discuss this – with C.O.
7. C’wealth Organisations: Immunity. [Enter Solr. Genl.
D.S. Dislike inequality in principle. Nos. involved are v. small cpd. with

those of internatl bodies. Second-class status.

J.S. Involves denial of justice to our citizens, let alone taxation.

Must accept this for international organns – e.g. R. wdn’t come

here w’out immunity. For C’wealth it isn’t necessary: why

concede it?


D.S. V. unreal.
S.Ll. Tax immunity is a racket. We don’t concede it automatically.

Ikramullah: salary & allowances.

JA: salary & allowances.

Why shdn’t they pay tax? Why make this a status symbol?


P.M. Why strain at this gnat when the camel of the diplomatic body is

so large.


J.S. Because each concession makes it more diff. to resist the next.
K. This proposal is contrary to all principle. Immunity rests on treaty

& international law – to make it poss. for diplomat to do his

work. These don’t apply: nor insist/ask on waiver.

Case for it is purely sentimental.


R.A.B. Cdn’t we follow officials’ advice – waive process and get organn to

impose its own taxation – as in para. 9.


K. No treaty: no oblign on them.
P.T. Para. 4. Why extend this to the individuals?

Why not consider what privileges shd. extend, on merits, to

each organisation?
M. Look at each on merits.
D.E. Not sentimental. C’wealth English Language Centre won’t be

established in Ldn. unless there is tax exemption.


H.B. Cd we have estimate of how many organisations will come along.
P.M. Is legn needed?

What can we do about it by adminve means?

[Is any selective method practicable?] incldg. x/.
E.H. We shall be confronted with this on a larger scale over C. Market:

About 5.000.


D.S. x| Cd we solve it by attachg. individuals concerned to their C’wealth

| H. Commr.


P.M. Also list of C’wealth organisations involved or likely to

be involved.

Also a form of words for D.E. to use in Delhi.

Extent of discriminn in reln to foreigners.


C.C. 1 (62) 3rdJanuary, 1962
1. Prospects for 1962. [Enter M.R.
P.M. 5 years’ since I became P.M.

Prospects for 1962: abroad v. disquieting – world order brkg. down.

C. Market.

C’wealth. Republics 1947 – consequences –

diffies & possibilities.

At home: economic sitn v. perilous.

Max. no. of larger views: minimum of small points – motto for ’62.

Ministers mustn’t be pre-occupied with Dpl. points.


K. Grateful for H.M.’s leadership in good times and bad.
You can be assured of our loyalty and co-operation.
2. Bermuda Meeting.
P.M. This was 4th mtg. with Mr K. Each time strengthening impn. of his quality & sensitiveness. Contrast with previous Adminn. Never at ease with them, except for my personal relns with Eis. Mr K. & R. are quite frank: easy to discuss w’out disguising diffes of view.
Wide area of agreement & understanding.

Berlin. Mr K.’s determination to get into negotn – wtr. probe goes well

x| or not. Won’t be deflected by French. Agrees they wd. accept benefits of my agreement, while avoiding its odium. They have moved v. far from earlier posns. Joint approval of instns. to Amb. in Moscow.

Tests. Mr K. is under pressure. But we found he has same feelings of distaste etc. as I. But as major n. power he feels v. responsible for m’taining balance.

Congo. Brief. They over-rate Adoula. Also over-rate competence of U.N. to hold country – their lack of Colonial experience. We made some impression on this.

U.N. Future. Reproached them on Colonialism etc. They take a more optimistic view. They can at least say they did well over Chinese repn.

Useful mtg. Prs. best so far. Mr K. not in v. good form – his father’s illness: his own back. Good that it was at his suggn and on Br. soil – friendly gesture. Better, too, at Govt. House vice Mid-Ocean.
H. Agree to x/. Believe they also want to get into closer touch with R. over wider field if they can.

T’s instns. enough for 3 or 4 mtgs. to see if there is basis. He, F.R. & Kroll all think there is. If this goes well, F.M. Mtg. If not, may be that or Summit. But K. may p’pone action – even if Treaty may keep all under control.. Can’t guess how it may go.

U.S. Commandant’s pol. adviser was stopped entering E. Berlin: U.S. have responded by stopping R. Commandant from coming into U.S. sector.

U.S. authies on spot are not acting wisely. Another reason for hastening negotns etc.

Probe likely to last 2-3 wks., unless it breaks down at outset.
3. Nuclear Tests.
P.M. Since circulating C(62) 1, I have reflected further.

R. test series has given them valuable results – drawn level. They have obtd larger yield p. unit of weight. Useful in itself. But addl. significance. They are going for anti-missile defence. And weight is of gt. significance there: both in defence and also offence (room for decoys etc.). Large explosion: if exploded at great height it wd. produce gt. heat effects: it wd. be v. hard target for defence: it wd. disrupt radio & radar defences.

Diff. therefore for us to say resumptn of W. tests wd. not be w’in formula used by Mr K. and I on 31/10 and 1/11. Recommns in C(62)1 are therefore fully justified.

But I was not altogether happy. I therefore wrote draft lr. to Mr K.


Copies handed round.

Purpose of this. Felt I cd. not reconcile myself to embarking on this new phase of re-arms race w’out making further attempt to break thro’ on disarmament. Cost: to U.S. = annual g.n.p. of U.K. Similar effort by R. M’while dirty bombs wd. spread & get cheaper. Risks to world. Hence my feeling: we must try to get back to point reached before Paris mtg. – a détente. Only locus standi we & U.S. alone have is as major n. powers of the West. This therefore must be our point/entry to move twds wider détente. A reasonable dramatic intervention seems necessary. Has it a chance?

K.’s posn is not too secure. De-sanctification of Stalin was a v. serious step. Why had he to take it? To break Molotov? (That is as tho’ I had, to neutralise Ld S., to pull down C/England!) Rather he is trying to appeal to people (consumer goods, peace etc.,) over heads of orthodox part of C. Party. If so, there may be a chance to do a deal with him.

Thus, in addn to moral duty, there may be practical chance of making somethg. of this.


D.S. We have reached point at which nations may ruin themselves by piling up arms. Even R. may realise this by now.

Support this approach. Nuclear is best point of entry.

K. is not a man of war: wd. prefer to be the man who brought plenty to R. Don’t think he planned b’down of détente: believe it was forced on him.

P.T. i) Approach. Agree there may be a moment to stake high. But this is playing high. How much chance of carrying France with us?

ii) Assumg. Xmas Island is used, concerned at P.M.’s position. Hard to defend allowg. U.S. to take final decision. You will be attacked for leaving final decn to Mr K. Island can be activated in 8 wks. Wd it not be better to share decn with U.S. and defend it as ours as well as that of U.S. I wd. sooner defend it on its merits, rather than appear to hand it to Mr K.
I.M. Agree with P.T. on both points.

Is it wise to say final decn will be taken in light of progress with this initiative.

As soon as we announce Xmas prepns, U.N. may call on us to desist.
K. may also make his consent to initiative conditional on our not testing.
R.M. If decn were to p’pone tests on pol. grds., we shd. be associated with it.

What about China. Realistic to think R. can have discns with us on n. tests & disarmament w’out Ch. participn.


K. Analysed C(62)1. This satisfied me tht. tests were necessary.
But how are we to exercise influence to make this unnecessary?
Do we let this slide. Or do we make an effort to break out of this situation. Surely we must.
Hail. Evident tht. R. have made an advance – prob. because they planned it well ahead. There is therefore mil. case for W. testing, if equally well prepared which U.S. have prob. not done. Thus, no case for urgent testg. And pol. objn for doing it before Confce in Apl.

If they are to be made, agree we shd. give facilities at Xmas.


Final decn will rest with U.S. - & we can’t separate ourselves fr. them.

But favour combining this with some new initiative on disarmament.


Doubt if your proposal goes far enough. We shall need to get understandg. with R. in reln to unaligned countries – e.g. to get them & ourselves to commit to that what we all now commit to arms.
M. Support P.M.’s line. But doubtful of para. 18. Wd it not seem to be seekg. negotns under duress of a threat.
J.M. Support P.T. on appearing to leave final decn to U.S. We must be able to say at least that there will be full consultn.
E.M. Agree – we can’t have veto. Decn is really when we decide to make Xmas available.
C.S. This wd. be new phase in testing – leading Heaven knows where.
Can we not separate this from Xmas Island?
Are U.S. really ready to do tests related to that new phase? Cd we not wait to see result of new initiatives?
D.S. Mustn’t appear to be suggesting this initiative merely in order to wriggle out of Xmas Island.
H. Doubt if Mr K. can defer testing for as long as this requires. Soft words from K. wdn’t be enough.
D.S. Wd there be great mil. advantage in testing so soon?
P.M. If we decline Xmas, U.S. will go on testing alone: we shall be separated from them: & have little chance of launchg. unilateral initiative on disarmt.

Suppose we get them to launch joint initiative first. Then, what if we differ on the pol. ques. wtr. this is going well enough to p’pone testing?


Surely, we cdn’t reserve right on those grds. to w’draw Xmas Isl. then.

May be better to say now we are agreed that further tests are necessary: we are preparing Xmas Isl.: but we are making this initiative to brk. through.



C.C. 2 (62) 3rd January, 1962 (3.pm)
1. Nuclear Tests. [Enter M.R., Penney
W.Penny. If no more tests, U.S. have slight advantage over R.

R. have virtually drawn level overall – ahead in 100 megaton, behind in ½-1 meg of light weight & latter are of gt. potential for anti-missile def.


Will take 2-3 yrs. for R. to put their new knowledge into new weapons.
They R. are surely preparing for more tests.

Our special aspect wh. causes anxiety – 3 missiles at once at various heights – one with n. warhead – various dirns. Clearly 1st attempt at anti-missile experiment: one fired fr. their anti-missile research station (town of 20,000 people).

Anti-missile. Missile is as nearly imposs. as anythg. I have seen. There can be decoys & dummies wh. wd. make it even worse. Also saturation v. one targets. U.K. cdn’t afford it. But U.S. & R. are both putting gt. effort into it: each must because the other does. With these resources can’t say it’s impossible.

U.S. were not ready to test: caught unawares. They feel they must do so now lest R. get ahead. Significant part of their p’mme wd. be related to anti-missile defence. If their scientists aren’t encouraged to think there will be more tests, impetus of their work will be lost.

The 100mt. explosion. U.S. said no mil. importance. Up to a point, true: smaller weapons aimed accurately cd. be as effective. But if exploded 25m. above target, it wd. destroy it by heat: & much harder for defence to destroy it at that distance. Makes that problem even harder.

U.S. p’mme. i) high-altitude explosions – 10, 50 or 100 m. up – to

{ measure effects esp. on radio/radar communicns. Part of anti-missile problem effect of n. explosion on a missile – how near it must be etc., must be done in atmosph., high.

ii) check existg. w.heads for Polaris, minuteman & Skybolt.

All designed on basis of no further tests & therefore conservatively designed.

Tests needed to check them & if poss. to reduce weight – for decoys etc.

iii) to reduce weight per unit of explosion: new war-heads. Needed both for offensive & defensive purposes.

iv) new prospect devices – v. powerful explosives at v. small weights for anti-missile missiles. They haven’t worked this out. Leap ahead: for same purpose as (iii).


Hail. Do these meet threat of 100m. bomb?
W.P. (i) does.

W.P. No. I said it wd. be more difficult to deal with 100mton: but not impossible.

All tests designed to reduce weight wd. be preparatory to elaboration of a defence.

No anti-missile system likely in less than 10 years.

No barge or surface tests at Xmas (U.S. agree).
C.S. Wd delay of 3 more months be serious.
W.P. No prob.; but they think so. What they fear is that, if R. went on without further U.S. tests, R. wd. get a lead. If I were an American, I fear I wd. have to advise President to go on. The U.S. will test, wtr. they get Xmas or not.
D.E. Pollution?
W.P. V. little: much less than previously.
Hail. What money will U.S. have left for aid etc.
W.P. Their potential is so large that they will manage both.

The U.S. have no alternative but to go on.


P.T. 1st para. of Principles (N.C.C.A.8) wd. get us over diffy tht. decision wd. be U.S. decision.

Safety: can U.K. have final say – as Austr. have at Maralinga.


W.P. We can lay down the safety rules: but U.S. want to have decn w’in those rules tho’ they will have B. subject on safety cttee.

Can’t say condns in Xmas are the same as at Maralinga.

[Exit Penney.
I.M. The U.S. intend to do it. They are right to do it. (W.P.). This means we must support them. Surely therefore allow them to have Xmas Island.
P.M. We and U.S. are the 2 W. n.powers., in a joint enterprise. Let us defend this as joint enterprise – we jointly agree a p’mme of tests

x is necessary to preserve balance/deterrent – to wh. we contribute

Xmas Island & our experts etc. But let us add, Mr K. and I, tht. which this is justifiable, it isn’t good enough: we must make a further effort to break through.
H.B. But wd. the initiative then be made – wd. Mr K. agree to make it & wd. K. agree, knowg. tht. W. testing is going to start.
R.M. At what other moment cd. we decide to test? Not when disarmament discns were going on.
H. R. & U.S. have agreed on the Confce.: U.S. & R. plans on paper are not dissimilar: n. tests come early in that plan.
P.M. New plan at x/. will avoid risk that at some later date we shd. differ fr. U.S. in their view of pol. ques. wtr. situation has so far improved as to warrant p’ponemet of testing.
D.S. Don’t make offer of Xmas Isl. condl on their joining in initiative etc., say, if you like, that if it can’t be joint we may have to try it ourselves.
2. Indonesia.
H. Sokarno has now said we will attack. He is said to be mobilised.

But Dutch y’day said they wd. negotiate w’out pre-condn re self-determn. That shd have improved posn.

Suggd tht. U.Tant shd. mediate. He wd. be acceptable to Indonesians.

No case therefore for P.M. to write to P.M./Holland. [Enter Machperson

Arms to Indonesia. Suggn in memo. we shd. delay deliveries.
M. Figures in Annex. not accurate. More torpedoes. Also (Annex B)

Vickers have definite contract for June. Risk of breaches of contract.

Cttee on Export of Arms shd. consider position and report.
P.T. Don’t act precipitately.

2 Gannets already handed over in U.K. Suggest we don’t try to stop them flying these out.


P.M. M. to consider in detail, qua character of weapons and also delivery dates. Each item can be dealt with by export licensing.
N.M. In many cases the licences have bn. granted.
P.M. Specially quick look at Gannets.
P.M. Logistic support. Why not wait till asked.
H. They will – pretty soon. Luns is always asking.
D.S. Austr. are anxious not to be asked to give such support themselves.

Singapore: effect on G.Malaysia if it cd. be said tht. we were using it for Colonial purpose.


H. We can stall for a bit.

Agreed.
P.M. Don’t let’s incur all the odium when we know Dutch won’t put up determined resistance.
Hail. Has a man of war a right to re-fuel?
P.M. If so, no (or less) harm.
H. Will look into this.
H. On 4 (iii) we shd. have to vote in U.N. against Indonesia.

[Exit N.M.

3. Congo.
H. T. has had good mtg. with U.N. civil & mil. authies. Assembly will prob. meet at E’ville to-day & give sufft support to Kitona agreement & authorise K. Repves to participate in commn to review constitution.

Less happy over U.N. plans for action if this breaks down. Also U.S./U.N. plan to squeeze economic life out of K.

M’while U. Tant has asked thro’ us for observers in N. Rhodesia. We are suggestg. to R.W. tht. he shd. offer to receive high repve of U.N. to see what frontier arrangemts. have bn. made. He may agree to invite U.T. or his repns for this purpose.
K. Are we or Fedn responsible for this sort of thing?
D.S. Observe. But R.W. cd. argue tht. we have devolved respons. for external affairs save when it affects our responsibilities.
H. This is almost wholly movement in & out of Fedn – wh. is Federal responsiby.
4. Laos.
H. Princes have disagreed & Phouma has left for Paris. Before doing so, he put a Govt. on paper, which U.S. can support. Phoumi broke up the mtg.: U.S. have decided to disown him unless he accepts. They have sent to King threatening w’draw their support unless Phoumi comes to heel. If this fails, Grom. & I will have to summon Phoumi to Geneva.

Danger is tht. fighting will now break out again. We shd. then be in real diffies.

Maddening, now we have reached agreement with R. & Chinese.

C.C. 3 (62) 8th January, 1962
1. Wages Policy. [Enter R.W., P.M.G., E.P., M.R.
S.Ll. Mtgs. on Friday. Employers satisfy. Recognd pause cdn’t. last indefinitely.

Fear run-away on rates.

T.U.C.: no proposals: asked for mine. Eventually promised them a paper.

Must reach them by Wed. a.m. when econ. cttee meets. Indicns they want to co-operate. Paper therefore will repeat what has bn. said (on planning esp., to avert criticism tht. this if for wage restraint only): refer to profits restraint (in terms of my H. C. statement of Dec._ tho’ no plan to limit profits of individual firms – show how profits are falling & how small (7%) propn of total. What shd. we say on end/pause? Repeat 18/12 – long-term policy will take time to work out: look for arrangemts. with 2 sides of industry wh. will enable pause to end? by end/financial year. Show how it will end for public services – particulars includg. arbitration. (Let agreed settlements operate: let M. rate be resumed: re-open arbitn but w’out retrospn). Then outline policy for private sector – no freeze but guidance for interim period. For 1962 increases to be w’in %age increase in productivity (21/2%): alternatively in terms of quantity £500m. = maximum available for wages & salaries (3%): or (Mills) when productivity can be measured decide how much cd. be available for wage increases: average that & say it’s available to non-productive.

Believe this is so complex tht. it must be reserved as long-term solution.

Real choice is betwn. 1st or 2nd alternative. My feeling is v. 2nd, because will lead to argument on what happens to £200m. diffce betwn. total increase of £700m. and the £500m. said to be available for wage increases.


P.M. T.U.C. seem to have bn. more co-operative. Aim: get them to enter into planning body & get acquiescence in an interim policy.

Date for opening of a new interim policy. End of financial year?


M. That is about right, if interim policy is accepted.
Still dislike percentage: prefer money terms.
Ch.H. How do you reconcile 2½% with arbitn ?
S.Ll. Hope arbitrators will have regard to the 2½%.
Ch.H. Suppose they don’t? Do we pay higher award?
S.Ll. Wd have to do so where arbitn is obligatory.

J.H. Arbitrators will heed the guidance, esp. if its supported by 2 sides of industry.


H.B. Support %age.
J.H. Do I.
J.H. Date. Pause shd. not outlast financial year, subject to satisfy. arrangemts. for interim.
S.Ll. If we cd. get agreement I wd. be ready to end pause earlier – x at once.
D.S. %age: what incentives to efficient industries?
S.Ll. Employers have varying approaches e.g. I.C.I., rubber industry.
J.H. Not really at once because of pending claims in rlways. & private sector (engineers).
P.M. May need to say in advance we expect Govt. policy will be needed by arbitrators.
S.Ll. In my first paper to T.U.C. enough to say arbitn will have to be discussed.
P.M. On alternatives: say £700m.: not all available for wages: must also carry non-productive workers. In practical terms it means average of 2½%.
M. Effect on engineering where employers have rejected claim entirely. If you say this, you will be inviting them to award 2½% [in the summer].
D.E. Paper shd. include concept tht. amount available for wage increases is flexible – increased if industry improves performance. Must plug growth. Can’t get it w’out more orders: that needs greater efficiency for same wages for a time in order tht. higher wages may be earned later. In engineering it’s piece rates that matter – and they turn on output, which won’t come unless we can inflate. The promise of inflation is the only thing which will make the men pause on wage rates.

In public services the dammed-up rates are about 5%.


I.M. | Are we not trying to ride 2 horses? T.U.C. wd. not join N.E.D. if they

| knew proposals later on our agenda to-day – and wd. w’draw when these [Dislike 21/2% because will be taken as minimum]

y were announced.

| If we want T.U.C. co-opn and planning for growth, we can’t have cuts

| in publ. expre they think unfair.

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