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THE COMMONWEALTH SECRETARY said that at the time when the agreement
for the detachment of BIOT was signed in 1965, Mauritian Ministers were
unaware of our negotiations with the United States Government for a contribution by them towards the cost of compensation for detachment.
They were further told that there was no question of a further
contribution to them by the United States Government since this was a
matter between ourselves and Mauritius, that the £3 million was the maximum we could afford, and that unless they accepted our proposals
we should not proceed with the arrangements for the grant to them of independence. Subsequently the matter had become a party political
issue in Mauritius and the Premier had been attacked by the present opposition party for having agreed to the separation of Diego Garcia for inadequate compensation. A critical election which would determine
whether or not Mauritius was to become independent was due to be held in
August and the question of the alleged inadequacy of compensation for detachment of the Chagos Archipelago would be used by the opposition to
attack the Premier's record. We should therefore strongly urge the
United States Government that complete secrecy should be maintained and
we should not at this stage volunteer any alternative proposal. The
Ambassador could be asked to report urgently on United States reactions
to the proposition that secrecy should be maintained in all circumstances.
If they were not willing to accept this we should then consider further what other courses might be adopted.
THE CHANCELLOR OF THE EXCHEQUER said that the Treasury Officer of
Accounts, had obtained the consent of the Comptroller and Auditor General
to exclude any reference to the remission of part of a Polaris payment
in the relevant Votes submitted to Parliament. In view of the latest
report of the United States position however there now
seemed little chance of total secrecy being maintained, and the following
formula had been evolved by Treasury officials which he put forward for
consideration
"The arrangements made with Mauritius and the Seychelles about BIOT
were a matter between Her Majesty's Government and the Governments
of those two countries. There was no direct payment by the United States in respect of the costs of those arrangements covering such matters as the purchase of land and resettlement of some local
inhabitants. BIOT is, however, intended to serve both British and American purposes and in consideration of the arrangements
made by the United Kingdom the United States have made some
adjustment in other fields which are more favourable to the United
Kingdom than would otherwise have been the case."
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