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WILL NEED TO BE MORE SUCH MEETINGS BEFORE VIEWS CAN CRYSTALISE ROUND A FIRM NEGOTIATING BRIEF. THERE ARE ONE OR TWO WHO LOOK

LIKE FEELING OBLIGED TO MAKE TROUBLE FOR THE SAKE OF THEIR PUBLIC

IMAGE, AND, TO DO THEM JUSTICE, BECAUSE OF THEIR GENUINE CONCERN

TO KEEP UP SOCIAL SPENDING.

12. ALL IN ALL I THINK MY ESTIMATE OF £17M AS A CEILING FOR

HONG KONG (PLUS AN INFLATOR) AND OF A 50/50 SPLIT STILL LOOKS

RIGHT AS AN OPTIMISTIC FORECAST OF WHAT CAN BE GOT.

13. THE CRUX OF THE MATTER IS GOING TO BE PARA 2 ABOVE (ALL POINTS) AND PARA 7. IN PARTICULAR SOME RATHER DRAMATIC RELEASE

OF LAND COULD MAKE ALL THE DIFFERENCE.

14. THE FOREGOING MIGHT BE THE STARTING POINT FOR OUR

DISCUSSIONS NEXT WEEK. MEANWHILE WOULD YOU CONSIDER THE

FOLLOWING POINTS:

(A) WHAT CONTRIBUTION IS BEING ASKED OF OTHER DEPENDENT

TERRITORIES MEMBERS WERE RATHER PRESSING ABOUT THIS?

(B) SOME MEMBERS THOUGHT THAT AN UNFAVOURABLE IMPRESSION

MIGHT BE LESSENED BY AN EXPLICIT STATEMENT TO THE EFFECT

THAT THE NECESSITY FOR A GREATER HONG KONG CONTRIBUTION

WAS DUE TO THE FINANCIAL AND BUDGETARY PROBLEMS OF THE U.K.

IS THIS A STARTER?

(C) THE DIVISIVENESS AND THE ROOM FOR POLITICAL MISUNDERSTANDING

CREATED BY PERIODIC REVIEWS OF THE LEVEL OF GARRISON AND

HONG KONG'S CONTRIBUTION TO IT ARE OBVIOUS. WOULD IT BE

POSSIBLE TO ACHIEVE AN AGREEMENT THAT WAS RATHER LONGER

TERM THAN THE USUAL 5 YEARS AND TOOK HONG KONG OUT OF THE

SCOPE OF FUTURE REVIEWS? THERE ARE LOCAL ARGUMENTS BOTH

FOR AND AGAINST SUCH AN APPROACH, BUT. I WOULD LIKE TO HEAR

THE WHITEHALL SIDE.

MACLEHOSE

FILES

HKIOD(4)

DEFENCE DEPT

GIPD

NEWS DEPT

SIR D WATSON

MR MALE

SIR G ARTHUR MR THOMSON

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