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in advance of a settlement would weaken the negotiating position of Belize.
As to our other out of area activities, our joint preoccupation is to strike a sensible balance between being able to fulfil our commitments and doing so in the most cost effective way. I am very conscious of the
heavy pressures on the defence budget in the current PES period and would be very ready for my officials to examine with yours the scope for reductions in for
example Cyprus and Gibraltar. There is also the longer term future of the Gurkhas, which as you know has a heavy
political as well as a military resonance, and the need to work out the implications for our out of area
deployments of the reductions planned for the Royal Navy.
In all of these areas we will need to ensure that there
is full and timely consultation between our two
Departments, so that we are not confronted at a late stage by budget-driven decisions which run up against political imperatives in the opposite direction.
8.
I am copying this minute to the Prime Minister and the Chief Secretary in the Treasury, and to Sir Robin
Butler.
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