234. Record of Meeting1
RECORD OF MEETING AT CHEQUERS ON SATURDAY, 21ST JANUARY, 1967
PRESENT
- Chancellor of the Exchequer
- Mr. Secretary Fowler
- Mr. Deming
- Mr. Bator
- Sir William Armstrong
- Sir Denis Rickett
- Mr. Ryrie (Secretary)
[Here follows 1 page of discussion on monetary policy.]
Britain and the Common Market
The Chancellor of the Exchequer said the signs from Paris were that the French might judge whether the U.K. was sufficiently “European” for membership of the Common Market by the extent to which the U.K. was willing to be anti-American, particularly on international monetary questions. He wished to make it clear that in order to get into the Common Market we were not willing to line up with France alone on these matters. The Prime Minister might talk in Paris about such things as the possibility of a common European currency however; and there was a danger that what he had said might be misrepresented in the French press as meaning that he had accepted the General’s point of view on various matters. He asked Mr. Secretary Fowler not to believe all he might hear from Paris about this.
The Chancellor’s own view was that the odds were against success in the British effort to gain entry into the Common Market. Some work was being done in London, on a purely hypothetical basis, on the possibility of an Atlantic free trade area as an alternative and he wondered whether at some stage it might be useful for the two Treasuries to carry out a joint factual study of this question. It would, of course, be important to keep this secret.
Mr. Secretary Fowler and Mr. Bator expressed the view that in the event of a deterioration in the prospects for eventual entry, this subject was bound to receive attention in Washington. But they thought the time [Page 530] was perhaps not yet ripe. In any case, there was always the risk of a leak in Washington if an Anglo American study were undertaken and this could be very damaging when the U.K. was still directing its main effort into gaining membership of the E.E.C. The outcome of the Kennedy Round discussions later this year would also have important bearing on the question. More generally, if the present U.K. negotiations with the Common Market was unsuccessful there might be advantages in not seeking to define the alternative courses of action too sharply at any rate for some time. The U.K. might think it better to adopt a policy of waiting it out, in order eventually to obtain the objective of entry in the E.E.C.
The Chancellor of the Exchequer acknowledged that this might be a possible policy, but pointed out that it would be psychologically difficult and perhaps damaging to confidence in the prospects for the economy. He thought there might be advantage at that stage in having some alternative under examination.
It was agreed that this subject could be discussed further, informally, during the Chancellor’s visit to Washington in February.
[Here follow 2 paragraphs of discussion on international liquidity.]
- Source: Johnson Library, Papers of Francis M. Bator, Box 25, Europe, 2 of 2. Secret. The source text bears no drafting information.↩