283. Telegram From the Embassy in the United Kingdom to the Department of State1

4964. Subj: New UK defense cuts.

Healey invited PolMil Counselor to call at his office this afternoon to discuss subject of new defense cuts, particularly in light of massive press speculation on fate of F-111 contract. When PolMil Counselor arrived Healey apologized that he had to rush off to special Cabinet session. He asked Broadbent (his office Chief of Staff) who he said was privy to his thinking to review situation on his behalf.
Broadbent said that Healey was fighting hard in Cabinet sessions on budget reductions, generally taking line that he had already [Page 591] “done his stuff” in past budget cuts, while civil depts had not. Now it was time for them to show “color of their money.” There was no reason why it was always Defense’s “sacred cows” that had to be gored. This line, on which Healey had allies, was having some effect, as was Healey’s other basic pro position, i.e. that Cabinet, and especially Political Dept, had to make decisions on what commitments UK would relinquish before MOD can get down to decisions on specific changes in structure, equipment and deployments. Broadbent said that how long Healey could sustain this line was “matter of speculation.” Timing was such in this crash exercise that decisions were perforce focussed on broad political intentions.
It seemed generally accepted that there was little that could be done to save money on defense budget in 1968-69. There was not much to be saved even in 1969-70. Nevertheless F-111 project is one that seems to attract attention as most beguiling area for cut, whether it makes sense in terms of UK capabilities for fulfilling its commitments or not.
Healey has taken same line in Cabinet as he has with press, i.e. that F-111 is a form of military capability that it is right and valid for UK to offer within framework its alliances. He has stressed its utility in Europe and its importance for rapid reinforcement capability abroad. He has also stressed value of offset and industrial advantage it brings UK.
Healey felt, according to Broadbent, that US could be helpful to him in this fight, if we desired, by “very discreetly” taking hard line on consequences cancellation in our discussions this subject with UK officials and reporters. We could stress the highly favorable price to UK of aircraft and concessions we have made on offset arrangement, playing up our “unfathomable generosity.” This would help undo some of the Douglas-Home line (London 4960).2 We could also stress our conviction that F-111 represents a capability that it makes sense for UK to retain both in NATO context and worldwide.
PolMil Counselor pointed out that this would be fine if Healey won the day, but could make a turn around difficult if British were to come to us within a week or so and ask for soft terms on cancellation. Broadbent admitted this would be the case but stressed Healey’s determination to stand pat on entire package of 50 aircraft. He said he did not rule out, “at the breaking point,” Healey’s being willing to be forced down to 40-45 aircraft but thought it would make no sense to go below this.
In summary, Broadbent hoped we would be willing to stress how far we have gone to help UK in view value of F-111 to NATO and in other theatres. (Broadbent said we might make point, as Healey is doing, that if UK does not have F-111, France will be only other country on continent with long-range strike-recce capability.) To extent this could be done without cancelling out possibility reduction in size of aircraft buy so much the better.
Broadbent said that so far Healey had had surprisingly sympathetic response from Labor backbench. Finally Broadbent said Healey wished him to make once more the point that early response to his request to Nitze to increase offset by $150 million would materially help him in holding the line.3
Comment: Embassy has had numerous inquiries from press re how US would view cancellation of F-111 and whether we would make it “easy” for HMG. So far we have refrained from comment on ground question is academic. Healey is now asking us to give him some discreet help in his internal battle. If in fact US attaches importance to preservation of F-111 program and considers retention of this capability by UK is important to us, as Embassy believes it should be, it would be fully feasible for Embassy and Washington in their press contacts to make some of these points. Request guidance on this as well as indication when we may expect response on proposal to up offset by $150 million.4
  1. Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 1 UK. Secret; Priority; Exdis. Also sent to the Department of Defense.
  2. Telegram 4960 from London, December 21, reported on press coverage of the F-111 cancellation. (Ibid., DEF 12 UK)
  3. The response was transmitted in telegram 4860 from London, December 15. It provided a list of British weapons systems that might constitute an offset to costs of F-111 procurement. (Johnson Library, National Security File, Country File, UK, Vol. 12)
  4. In telegram 89054 to London, the Department of State instructed the Embassy that in view of further British defense cuts, the United States should avoid the appearance of intervening in support of Healey. (National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 1 UK)