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POREASES NECESSARY FOR YOUR SOCIAL PROGRAMME. (WE ARGUED CONVERSELY THAT HOPES FOR AN INCREASED HONG KONG CONTRIBUTION COULD
BF REDUCED IF NEGOTIATIONS WERE TO COINCIDE WITH THOSE FOR OTHER TAX INCREASES, NOR WOULD MINISTERS WANT TO JEOPARDISE YOUR SOCIAL PROGRAMME.)
(11) THAT IT MIGHT BE NECESSARY TO MAKE AN ANNOUNCEMENT BEFORE MAY ON POINTS WHICH YOU WOULD WISH EXCO TO HAVE BEEN CONSULTED ON. MINISTERS WILL UNDOUBTEDLY WISH TO SAY SOMETHING ABOUT HONG KONG WHEN THEY ANNOUNCE THE RESULTS OF THE DEFENCE REVIEW (PROBABLY IN FEBRUARY OR MARCH). THEY WILL PROBABLY WANT TO SAY AT LEAST THAT THERE WILL BE CONSULTATIONS WITH THE HONG KONG GOVERNMENT ABOUT HOW THE COST SHOULD IN FUTURE BE DIVIDED. IF THE FORCES ARE TO BE REDUCED IN ORDER TO ACCOMMODATE FINANCIAL PROBLEMS ON BOTH SIDES, SOME MENTION OF THIS REDUCTION MAY ALSO BE UNAVOIDABLE FOR PARLIAMENTARY REASONS HERE. TO THE EXTENT THAT THIS RAISES QUESTIONS IN HONG KONG AND MAKES IT APPEAR THAT WE HAVE GONE AHEAD WITHOUT CONSULTING EXCO, YOU MIGHT THINK IT BETTER FOR CONSULTATIONS TO BEGIN BEFORE SUCH ANNOUNCEMENTS WERE MADE.
4. GRATEFUL FOR YOUR URGENT COMMENTS ON THE PROPOSED LEVEL OF FORCES DESCRIBED IN PARAS 1 AND 2 ABOVE, AND FOR YOUR COMMENTS ON THE POINTS IN PARA. 3 ABOVE. IF YOU THINK THAT THE ANNOUNCEMENTS ENVISAGED IN PARA. 3(11) WOULD BE TOLERABLE IN ADVANCE OF CONSULTATIONS, PROVIDED THAT THEY DID NOT MAKE CLEAR THE ACTUAL INCREASE IN THE CONTRIBUTION WHICH WE ENVISAGE, WE WILL CONTINUE TO PUT THIS AS STRONGLY AS WE CAN. WE WOULD URGE AGREEMENT THAT MINISTERS SHOULD TAKE THE LINE THAT OUR OVERALL COMMITMENT TO DEFEND HONG KONG WITH THE NECESSARY FORCES WOULD PEMAIN, THAT THERE WOULD BE CONSULTATIONS WITH THE HONG KONG GOVERNMENT ABOUT A SUCCESSOR TO THE PRESENT DEFENCE AGREEMENT BEFORE 17 EXPIRES IN 1976, AND THAT THE PURPOSE OF THE CONSULTATIONS WOULD BE TO AGREE ON HOW THE COST OF THE NECESSARY FORCES SHOULD BE DIVIDED. BUT IT IS FOR YOU TO JUDGE WHETHER EXCO WILL SWALLOW THIS IN ADVANCE OF CONSULTATIONS AND WITH ANY SUPPLEMENTARIES THAT
MAY PROVE ESSENTIAL.
S. IT LOOKS AS THOUGH MESSAGES WILL BE SENT LATE IN NOVEMBER TO OTHER GOVERNMENTS WHOM WE SHALL BE CONSULTING ABOUT DEFENCE REVIEW MATTERS, AND THAT THERE WILL BE AN ANNOUNCEMENT BY HMG A WEEK EARLIER THAT CONSULTATIONS ARE ABOUT TO BEGIN. THERE COULD ALSO BE PARLIAMENTARY QUESTIONS BEFORE OR AFTER THIS ABOUT OUR INTENTIONS AS REGARDS HONG KONG. WOULD YOU WISH US, BEFORE THIS
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