responsibility.

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We should look for ways of reducing

the share of resources and Ministerial attention which

The ideal would be a reduced range of they now claim. commitments combined with a better capability to meet them, ie a better match between contemporary British responsibilities and contemporary British power.

C

13. In a class by itself in importance is Hong Kong.

The Prime Minister's visit to China a year ago concluded with a joint statement in which both sides expressed the common aim of maintaining the stability

We have made it clear and prosperity of Hong Kong.

that our aim is to reach an agreement that is

acceptable to Parliament, the Chinese Government, and the people of Hong Kong. The signs are that this will need to be achieved in 1983/4, with consequential action continuing at a lower pitch right through the

five year period.

}

14.

Gibraltar is a problem requiring "treatment" rather than solution, given the incompatible starting

Such a treatment must positions of the parties.

respect the British commitment to Gibraltar, but not obstruct the process of Spanish entry into the Western democratic system in the shape of the European

Community and the integrated military structure of the

North Atlantic Alliance.

The crucial period will be

from now until whenever the Spanish referendum is held

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