SECRET
CHANCELLOR
EEXCHEQUER
Unow
et
& W.
Levil
Treasury Chambers, Parliament Street, SWIP 3AG
RECEIVED IN REGISTRY No.52
21 MAY 1975
FWB3/548/2 Dear Jimi
67
01-930 1234
20 May 1975
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2075
Porning
My Mak.
BRUNEI : MILITARY WITHDRAWAL
Pla Pi, uls
پنا
Roberts
I have seen OPD (75)18 in which you seek agreement to certain 'planning assumptions', the most important being that the Gurkha battalion should be retained in Brunei until mid-1978, rather than withdrawn by our target date of April 1977.
Bearing in mind particularly our vulnerability to any switch in Brunei's reserve management policy, I am content that we should retain the battalion in Brunei until mid-1978, on the understanding that the Sultan will be responsible not only for the costs of maintaining the battalion in Brunei but for consequential costs elsewhere, e.g. in Hong Kong, and that there will be no implications for public expenditure.
However I hope you will agree that we can keep back this concession until substantive talks with the Sultan resume. To communicate it to him in the meantime even as a 'planning assumption' would only increase the pressure for a further deferral when the talks resume; and our aim should be to settle with him then on mid-1978 as a firm withdrawal date. Our hand is not very strong and we need to make the most of each card.
I should in any case be grateful if my officials could be fully consulted if there is any question of making this concession at an earlier stage. The close contact which your officials have maintained with mine has been most helpful and I welcome your intention to refer the whole matter to OPD again before negotiations with the Sultan resume.
I am sending copies to members of OPD and to Sir John Hunt.
مسل
д
(DENIS HEALEY)
The Rt. Hon. James Callaghan, M.P.
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