GR
318
CYPHER/CAT A
FM FCO 1013957 APR
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SECRET
ECEIVED IN REGISTRY No. 50 11 APRTOIS
(HK)
TO ROUTINE HONG KONG TELEGRAM NO. 279 OF 10 APR 75.
DEFENCE COSTS AGREEMENT.
1
1. I SPOKE TO LORD GORONWY-ROBERTS TODAY WITH FCO OFFICIALS AND
SUBSEQUENTLY TO MR. RODGERS AT THE MINISTRY OF DEFENCE WITH
ARTHUR THORP.
2. AS I FEARED, MR. RODGERS CONFIRMED THAT THE CHANCELLOR WAS NOW LOOKING FOR FURTHER CUTS IN 1976/77 WHICH HAD IF ANYTHING
INCREASED THE DIFFICULTY WITH REGARD TO HONG KONG, I OF COURSE
EXPLAINED OUR OWN POSITION ALONG FAMILIAR LINES,
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3. ON TIMING HE ENVISAGES THE CHIEFS OF STAFF CONSIDERING THE IMPLICATIONS OF THE WORKING PARTY'S REPORT SOME TIME THIS MONTH
WITH A VIEW TO A SUBMISSION BEING MADE TO THE OPD BEFORE THE
END OF MAY. HOWEVER IT WAS CLEAR THAT THE LATTER DATE I
13 NOT A
FIXED POINT AND THAT MINISTERS AND OFFICIALS MERELY WANT TO GET THIS (FOR THEM) RESIDUAL PART OF THE DEFENCE REVIEW OUT OF THE
WAY BEFORE TOO LONG, AGAINST THIS BACKGROUND WE SHOULD TAKE IT
THAT SOMETHING MUST BE AGREED BEFORE THE SUMMER HOLIDAYS.
4, Į PUT TO THEM THAT WE COULD NOT AT THIS STAGE TAKE EITHER THE
LEVEL OF GARRISON OR THE ALLOCATION OF COSTS ANY FURTHER, THE
CHIEFS OF STAFF HAD NOT MADE UP THEIR MINDS ON THE FORMER AND THE TWO GORVERNMENTS WERE UNABLE TO AGREE ON THE LATTER. BUT WE AGREED THAT MEANWHILE WE SHOULD MAKE PROGRESS ON THE FORMAT OF AN AGREEMENT AND A DRAFT WILL BE SENT TO US FAIRLY SOON, WITH THE DISTRIBUTION OF COSTS AND FORCE LEVELS LEFT BLANK, 5. I SUGGESTED THE FORMAT SHOULD BE FOR EITHER A PARTIAL SHORT AGREEMENT WITH A FLAT LEVEL OF CONTRIBUTION, OR SOMETHING CONSIDERABLY LONGER, SAY SEVEN YEARS, WITH PROVISION FOR GRADUATED INCREASES IN HONG KONG'S CONTRIBUTION. I SAID THAT
THE LATTER FORM OF AGREEMENT WOULD REALLY ONLY BE OF INTEREST TO
HONG KONG IF IT COULD BE UNDERSTOOD THAT THEREAFTER NO FURTHER DEMANDS WOULD BE MADE ON HONG KONG IN FUTURE AGREEMENTS.
6. RECORDS OF BOTH MEETINGS FOLLOW BY BAG.
CALLAGHAN
FILES
HKICD (4) MR WILFORD MK MALE
PA
BJ
15/16
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