SECRET
But both the Treasury and the MOD would regard it as a major
breach of faith on our part to discuss the cost savings issue with the Governor, since the object would be to make savings at
HKG's expense for the British tax-payer. On the other hand, I
judge it essential for our relationship with the Governor to
alert him to these developments. In the circumstances, I propose that, rather than copying the Ministerial correspondence to him, I should summarise it in a telegram and give him the gist of what the Foreign Secretary would say. One key point in
a minute by the Foreign Secretary would then be that the Governor must be properly consulted before any decision was
taken which might increase the costs to HKG.
5. Given the sensitivities, you might think it worth checking
that Sir J Coles is content with this approach.
Schett
PF Ricketts
SECRET
garr.PET.JRB