SECRET
Something to make the financial arrangements more palatable
to Hong Kong opinion and I agree with para. 2 of the Chief
Secretary's minute of 6 November emphasising the importance of
this aspect of the proposed arrangements.
duration.
I would like to see an agreement of the longest possible
There seems little point in committing ourselves at
this stage to a further, and probably difficult, negotiation in
five or seven years time.
These negotiations not only consume
I believe our
much time and effort but impose considerable strain on our
relations with Hong Kong; and the proposed inflator mechanism
adequately safeguards our financial position.
best interests would be served by an agreement with no stated
duration but including a provision to the effect that after
seven years either side has the option of seeking amendment to
I would be it on giving one year's notice of a wish to do so.
grateful for your views and those of our OPD colleagues on this
suggestion.
I am sending copies of this minute to OPD colleagues and
to Sir John Hunt.
18
November 1975
(JAMES CALLAGHAN)
SECRET