TOP COPY
RECEIVED IN REGISTRY No. 51
30 AUG 1974
(HK)
IMMEDIATE
CYPHER CAT A
SECRET
GRPS 250A
FM FCO 29 18 157.
85A
SECRET
RIF
90
87
RIA
DEDIP
DESKBY 292359Z
1HKK 10/9.
TO IMMEDIATE HONG KONG TEL NO 752 OF 29 AUG 1974.
FOLLOWING STRICTLY PERSONAL FOR ACTING GOVERNOR,
MYTELNO 746: DEFENCE REVIEW,
Des 30/8
1. THE DRAFT PAPER HAS NOW BEEN CONSIDERED BY A CABINET OFFICE
COMMITTEE. THE COMMENTS IN YOUR TELNO 353 ON THE LEVEL OF CONTRIB-
UTION WHICH IT IS REASONABLE TO SEEK FROM THE HONG KONG GOVERNMENT
AND THE SUPPORTING ARGUMENTS ARE FULLY RECORDED IN THE PAPER
AS THE GOVERNOR'S VIEW. THE TREASURY HAVE HOWEVER ASKED FOR A PASSAD
EXPRESSING THE WHITEHALL VIEW ON THE HONG KONG GOVERNMENT'S ABILITY TO PAY TO BE INCLUDED. THE COMMITTEE HAS AGREED TO THIS. THE PROPOS- ED TEXT ( WHICH CONTAINS ONLY MINOR CHANGES FROM THE VERSION
TABLED BY THE TREASURY) IS IN MIFT. THE COMMITTEE HAVE HOWEVER
AGREED WITH US THAT THIS MUST BE BAL MICED BY A FOLLOWING PASSAGE
OF ABOUT THE SAME LENGTH SETTING OUT THE SOCIAL AND ECONOMIC
BACKGROUND AGAINST WHICH THE FINANCIAL FACTORS DESCRIBED
BY THE TREASURY SHOULD BE JUDGED.
2. WE FEEL THAT THIS SHOULD BE DRAFTED INITIALLY BY YOU RATHER
THAN US AND WE SHOULD BE GRATEFUL FOR A DRAFT BY 300800Z ( WE HAVE TO DISTRIBUTE THE TEXT IN WHITEHALL BY 3811382)
3. THE COMMITTEE WILL BE RELUCTANT TO CONSIDER MAJOR AMENDMENTS TO
THE PASSAGE IN MIFT, THOUGH WE WOULD NOT EXCLUDE THIS IF YOU FELT STRONGLY THAT ANY OF IT WAS FACTUALLY WRONG OR MISLEADING, IN
PARTICULAR YOU MAY WISH TO SUGGEST SOME OTHER PRESENTATION FOR THE REFERENCE TO THE TIMES REPORT ABOUT THE EXPECTED GROWTH RATE. PLEASE DO HOT, HOWEVER, HESITATE TO GIVE US ANY BACKGROUND COMMENT ON THE TREASURY'S PRESENTATION WHICH YOU THINK WE MIGHT FIND USEFUL
IN DISCUSSION,
4. APOLOGIES FOR PUTTING THIS ON YOU AND FOR THE SHORT NOTICE. BUT
WE MUST GET THIS RIGHT.
CALLAGHAN
FILES
HEAD/HKIOD -
HEAD/DEFENCE D PS/PUS
SIR G ARTHUR
SIR D WATSON MR MALE
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