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Mr Stuart
24/9
CONFIDENTIAL
LUNCH WITH MR HADDON-CAVE: 23 SEPTEMBER 1974
3. Mr Haddon-Cave got excited only when he chose to talk about the Defence Review. It was made clear to him that he was
addressing the wrong audience, but he nonetheless took the opportunity to let off some steam. He was particularly incensed by a remark which he attributed to the Chancellor, to the effect that Hong Kong had money running out of its ears. This remark betrayed a fundamental ignorance of Hong Kong's position, and particularly of its budgetary position. (No doubt the interview which he gave to the Financial Times was one way of secking to put the record straight). He said that the sort of attitude under- lying that remark was linked with what he ‘claimed' to be the UK proposition that Hong Kong should pay the whole of its defence costs. This proposition was unprecedented and immoral, was an abrogation of UK's responsibilities to a dependent territory, added to his financial difficulties, and could not fail to have an adverse impact on confidence. Mr Barratt said that these arguments did not come as a surprise to him, in that he seemed to recall rather similar arguments being deployed in the context of earlier discussions in which he had been more directly involved, on Hong Kong's defence contribution. He gently pointed out that poverty and riches were relative, and that it would be
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CONFIDENTIAL
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