Mr Laird
Reference
8
न
L
1. Please see Mr Wilford's note on Folio 4 with subsequent correspondence and particularly Mr Stephenson's Minute of 8 March 1972.
2.
As regards X of Folio 6, I can only suppose that this is a reference to the statement made by Lord Shepherd when he visited Hong Kong in October 1967, and which was subsequently qualified in a letter of July 1968 which Mr Carter wrote to Sir John Cowperthwaite. That letter was, however, written some 5 months before the letter referred to in paragraph 2 of Folio 6.
3.
You will note that Mr Stephenson now advises that we should accept Treasury arbitration on the basis that such arbitration would be as between the Ministry of Defence and the Hong Kong Government (ie, not as between HMG and the Hong Kong Government).
4. My own feeling, which is shared by Mr Stephenson, is that the chances of Treasury arbitration going in favour of Hong Kong against the MOD are small, at any rate insofar as "snake" fence is concerned; but we could probably make out a better case for Hong Kong on the Border Works issue (ie, Highland Bonnet). The Ministry of Defence now appear to have dropped the minuscule item of £118 in respect of additional allowances for Hong Kong other ranks.
5.
6.
We now have to decide:
i
whether to accept Treasury arbitration on the lines recommended by Mr Stephenson, and if we do,
ii whether we should try and agree with the Ministry of Defence on the terms of a joint letter to the Treasury, or leave them to send in their own letter and send a separate one of
our own).
The draft behind Folio 4 is naturally written from the Ministry of Defence standpoint. We could, I suppose, suggest conditions to that letter in order to put Hong Kong's case. But on balance, it would seem preferable to let the Ministry of Defence put in their
/letter
DD 896639 140609 500M 7/71 GM 3643/2