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4.
(a) Would it be helpful to try to reach agreement on a contribution for the next year or perhaps two years
leaving a longer term agreement for negotiation later? It was agreed that this point should be taken into account in any submission to Ministers.
(e) Was the idea of a contribution escalating over the
It seemed that in years out of the question or not? some ways an escalating agreement would have more appeal to the Unofficial Members than a fixed contribution.
(f) The question of reducing the size of the garrison. If this is to be pursued the matter will have to go to the Chiefs of Staff.
(g)
The implications for Hong Kong of Mr Rippon's statement to the EEC about sterling. We explained that a telegram would be going to Hong Kong on this subject; it seemed unlikely that there would be any connection between what Mr Rippon had said and the defence contribution.
I told the meeting that I would be reporting to Mr Royle with the Governor next Thursday. My impression of the discussion as a whole was that neither the MOD nor the Treasury would wish to give way on the figure of £8.5 million but that they would want to avoid a situation developing in the Colony which would possibly cost HMG a good deal more than the amount of money now at issue. The meeting came to no firm conclusions but there was agreement that the matter would now have to be considered by Ministers collectively (preferably in the DOP This would under the Chairmanship of the Prime Minister). involve the preparation of a 2 page paper. The paper could either be put to the Committee by the Foreign and Commonwealth Secretary or by the Foreign and Commonwealth Secretary and the Defence Secretary jointly. The paper could either be "neutral" setting out all the considerations and possible courses of action without recommending any particular course - or it could take a firm line,
nyinme
The Treasury representative was inclined to favour the
5.
course.
I agreed that I would pass on to other departments an account of the meeting with Mr Royle on Thursday 17 June.
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14 June 1971
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