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Treasury have tentatively agreed, that the team should be accompanied by Treasury officials who could examine the second potential variable of the Hong Kong budgetary situation, and also the possibility of some movement on the third, the cost to HMG. For example, on the last point, Treasury officials have put forward the tentative idea of a graduated increase in Hong Kong's contribution, which, over, say, a ten-year period would amount to 75% of the whole, but might start below this level and end above it. This would help with Hong Kong's immediate budgetary problem.
8. I think the idea of an exploratory visit by officials to Hong Kong is the right next step. I also think we should probably send someone from the FCO to keep an eye on the exercise. When the officials have completed their examination, they will be in a position to make policy recommendations to Ministers.
Parmy.
19 December 1974
Lord Goronwy-Roberts
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