about the future size of the Garrison.
The Defence Secretary has 10w, as foreshadowed, sent the Governor a further message indicating the way MOD minds are moving. They have, in effect, Leap-frogged the Governor. I have alerted the Secretary of State, who has agreed that we should produce a joint MOD/FCO Memorandum for OPD (K), setting out the issues and weighing the risks of running down the Garrison soon to a single battalion. We will
consult the Governor on this paper in draft.
5.
HMOCS. No need for you to engage in the detail of this. But you may recall that after the Governor had raised the issue with the PM, No 10 directed the Cabinet Office to come up with a solution. They have produced a paper which amounts to a cop-out- since it rehearses the facts and the points at issue, and invites Ministers to say whether they want to compromise and if so how. A further FCO/Treasury haggle at Ministerial level would be unproductive. I have recommended that Private Office encourage No 10 to call a meeting under the PM's chairmanship as the only way we are likely to get a resolution. We are consulting the Governor on the tactics, including a negotiating hand for the Secretary of State to deploy.
6.
Sir Percy Cradock's visit to Peking. Sir Percy confirmed to Christopher Hum at Wilton Park last week that he will go ahead with his visit. Christopher has written further to the Governor confirming this. News of Sir Percy's visit surfaced on 12 May in the Hong Kong press with a story by John Ellison, drawing a link between his visit and the third round of talks and saying that FCO officials are uneasy about it, and the Governor angry. We have therefore given News Department a line to take covering the points agreed between you and the Governor.
7. Possible stop-over by the Prime Minister in Hong Kong in September. You might mention to the Governor that we have been asked to recommend additional stops for the Prime Minister after his visit to Tokyo in September. We have included in the advice for No 10 a marker to the effect that it might be helpful to think of a short stop-over in Hong Kong between Tokyo and Kuala Lumpur (which is the favoured other destination in Asia). For forward planning purposes, the date would probably be 21 September and any visit would probably need to be an in and out within a day.
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