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Sir D Watson
pants have been arted Various meetings will the Govenor
MEETING WITH THE GOVERNOR OF HONG KONG
1.
Time Walk
Sir Murray MacLehose will be coming to see you on
17 December at 4.15 p.m. The purpose of the meeting will be to discuss the briefs for the Governor's meeting with Lord Goronwy-Roberts, which have been submitted separately, and also the following topics:
(a) Buses for Hong Kong: the "Buy-Commonwealth" Clause.
Miss Welch of the DOT will attend for this item.
brief is attached.
A
Flag A
PKK
Flag B
10
2x3
Flag & DKK 10/9
(249)
(b)
The Defence Review.
The Governor will be seeing Mr Hockaday on
I
18 December. I attach a copy of your letter to Mr Hockaday about the tactics for this meeting. also attach a summary paper on the cost of the proposed Hong Kong garrison. This has been prepared by the Ministry of Defence in preparation for the Governor's meeting and will have been shown to him through CBF Hong Kong. The substance of the paper is that, even the proposed reduced force will cost £41 m., plus naval capital costs, at September 1974 prices. This may well rise to £50 m. by 1976. The Governor's "maximum contribution" is therefore, already, less than 50% of what the forces will cost. If Ministers are prepared to accept a lower than 75% contribution, a division which required Hong Kong to meet the foreign exchange costs of the garrison would, at 1974 prices, mean a contribution of almost exactly 66% (3). This would be a defensible division, but unless the Governor is able to raise his offer to around £30 m., it would be dangerous to accept the principle.
The Treasury, having learned of the Governor's visit from the Ministry of Defence, have complained that they are being left out of the talks with him. The easiest solution may be to suggest that a Treasury representative should attend Mr Hockaday's meeting. I am suggesting this to the Ministry of Defence.
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