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HOFO-088/18-

00 F C O

GR--500----

DED IP

منكم

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copies

CYPHER/CAT A

FM HONG KONG 180600Z

DE DIP

19 MOV 1974

SECRET

LARI

188)

REF

In stare.

Sea

submission

Veer

NO DISTRE

TO IMMEDIATE FCO TELNO 1148 OF 18 NOVEMBER.

FOR MALE.

18/1,

YOUR TEL 1001: DEFENCE REVIEW: STATEMENT REFERENCE TO HONG KONG

FORMULATION IN YOUR PARA 3 IS AN ACCURATE STATEMENT OF HMG'S

OBJECTIVE WHICH IS OF COURSE ACCEPTED BY THE OFFICIAL SIDE OF THE

HONG KONG GOVERNMENT. AS YOU KNOW WE ARE QUIETLY WORKING TOWARDS

AGREEMENT BETWEEN OFFICIALS ABOUT A LEVEL OF GARRISON AND CONTRIBUTION WHICH WOULD BE ACCEPTABLE TO HMG AND WHICH I JUDGE EX. CO. COULD BE BROUGHT TO ACCEPT AS A PRELIMINARY TO MAKING IT

PUBLIC AND PUTTING IT TO LEG. CO. (WHOSE FINANCE COMMITTEE VOTE THE FUNDS AND WHICH HAS AN UNOFFICIAL MAJORITY). WE HAD ENVISAGED THE LATTER DEFINITIVE PROCESS TAKING PLACE IN ABOUT MAY, 1.E. AFTER THE BUDGET AND INCIDENTALLY AFTER THE QUEENS VISIT. IT IS

AN EMOTIVE ISSUE AND I SHOULD DEPLORE IT BECOMING A MATTER OF

PUBLIC DEBATE BEFORE I WAS SURE I HAD EX. CO. SUPPORT FOR A

SPECIFIC PROPOSITION.

2. THE FORMULATION IN YOUR PARA. 3 THOUGH INNOCUOUS ENOUGH IN

WHITEHALL TERMS COULD EASILY PROVOKE PUBLIC DEBATE HERE SINCE IT REFERS AT THE SAME TIME TO A HIGHER CONTRIBUTION AND ECONOMIES IN

THE GARRISON, IT INVITES A HARDENING OF OPPOSITION ON THE PROPOSITION **WE WON'T PAY MORE MONEY FOR LESS GARRISON**.

3. AS THE FORMULA IN YOUR PARA. 2 15 AN ACCURATE AND I SHOULD

HAVE THOUGHT ACCEPTABLE STATEMENT OF THE CASE, AND WAS USED FOR MISS LESTOR'S RECENT REPLY TO SIR A. ROYLE, I WONDER WHAT THE OBJECTIVE OF MOD/TREASURY OFFICIALS WAS IN PRESSING THIS AMENDMENT?

POSSIBLE MOTIVES WHICH OCCUR TO ME ARE:

(A)

PRE-EMPT PARLIAMENTARY OR OTHER UK CRITICISM.

(B) PUT PRESSURE ON HONG KONG.

4. WITH REGARD TO (A), IT WOULD BE MUCH BETTER FROM POINT OF VIEW

OF MY ABILITY TO INFLUENCE THINGS HERE IF THE STATEMENT OF INTENTION

TO CUT THE GARRISON AND INSIST ON A HIGHER CONTRIBUTION COULD BE

OMITTED FROM THE STATEMENT. IN THE UNLIKELY EVENT OF THE FORMULA

IN PARA. 2 NOT SATISFYING U.K. CRITICS AT THIS STAGE, AND A MINISTER COMING UNDER STRONG PRESSURE IN THE HOUSE, THERE WOULD BE LESS

OBJECTION IN THESE CIRCUMSTANCES TO USING THE FORMULA IN PARA, 3

FOR SUPPLEMENTARIES. NOR WOULD I SEE OBJECTION TO IT BEING USED

FOR BACKGROUND BRIEFING OF THE BRITISH PRESS AS OPPOSED TO AN

OFFICIAL STATEMENT ON THE RECORD.

5. WITH REGARD TO (B), THIS IS THE WRONG SORT OF PRESSURE (E.G. PUBLIC), BRINGING IN THE WRONG PEOPLE (E.G. THE PRESS AND PUBLIC

COMMENTATORS IN HONG KONG WITH AN INTEREST IN BLOWING UP RATHER THAN SOLVING THE ISSUE), AT THE WRONG TIME (E.G. BEFORE PROPER CONSULTATIONS HAVE STARTED AND BEFORE THE HONG KONG GOVERNMENT

ITSELF CAN SAY ANYTHING POSITIVE OR USEFUL TO KEEP COMMENT WITHIN BOUNDS).

6. TO SUM UP, I AM FAIRLY CONFIDENT OF MY ABILITY TO FIGHT THROUGH A SUBSTANTIALLY INCREASED CONTRIBUTION FOR A SLIGHTLY DECREASED GARRISON, PROVIDED THE ISSUE IS KEPT OUT OF PUBLIC DEBATE UNTIL

THE DETAILS HAVE BEEN SETTLED BETWEEN US IN CONFIDENCE: HOWEVER

IF OFFICIALS IN THE UK INSIST ON RISKING IT BEING THUS BROUGHT OUT PREMATURELY, A SATISFACTORY CONTRIBUTION COULD BE MADE THAT

MUCH MORE DIFFICULT TO OBTAIN WITHOUT DANGER TO OUR RELATIONS OR

WITH A LEVEL OF GARRISON WHICH WE JUDGE DESIRABLE.

7. YOUR PARA 5. I FEAR THIS DOES NOT REALLY HELP.

MACLEHOSE

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