TNAG-0478-FCO40-543-Strength-of-garrison-in-Hong-Kong-1974 — Page 65

GRPS 250 IMMEDIATE CYPHER CAT A

FM FCO 251300Z

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DESKBY 252359Z

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1974

TO IMMEDIATE HONG KONG TELNO 836 OF 25 SEPTEMBER, FOLLOWING STRICTLY PERSONAL FOR GOVERNOR FROM WATSON, DEFENCE REVIEW MIPT

1. FOR YOUR OWN INFORMATION SPECIFIC LEVEL OF FORCES CONTAINED IN PARA 2 OF CDS SIGNAL WAS NOT APPROVED IN DETAIL BY MINISTERS, IT MAY BE THEREFORE THAT THERE ARE OPENINGS FOR FURTHER ECONOMIES THAN THOSE INDICATED IN PARA 4 OF THE SIGNAL. WITH REFERENCE TO PARA 4 OF MY PERSONAL LETTER OF 16 SEPTEMBER, YOU WILL NO DOUBT WISH TO EXPLORE ALL SUCH POSSIBILITIES IN DISCUSSION WITH CBF.

"

2. IN CONSIDERING YOUR ADVICE ON TACTICS IT MAY HELP YOU TO HAVE AS A WORKING ASSUMPTION (ALTHOUGH WE CANNOT BE SURE EXACTLY WHEN MINISTERS MAY PRESS THE VARIOUS BUTTONS AFTER THE ELECTION) THAT WE SHOULD LIKE TO SEE. YOUR. CONSULTATIONS WITH EXCO CARRIED THROUGH BY THE END OF NOVEMBER. THIS RAISES THE QUESTION, UN WHICH WE SHOULD BE GLAD OF YOUR ADVICE, WHETHER THIS ISSUE SHOULD BE RAISED WITH EXCO BEFORE OR AFTER YOUR 1975 BUDGET SESSION WITH THEM IS COMPLETED. HADDON-CAVE HAS PUT IT TO US THAT IT WOULD BE BETTER NOT TO ADD THE UNPALATABLE DEFENCE PROPOSAL TO THE PROBLEMS OF TAXATION AND THE REST WITH WHICH YOU WILL BE FACING THE COUNCIL AT THAT SESSION. ON THE OTHER HAND THERE IS THE ARGUMENT THAT THE COUNCIL SHOULD BE AWARE OF THIS IMPENDING ADDITIONAL COMMITMENT (ALTHOUGH IT SHOULD NOT, ARISE UNTIL 1976) AS AN ELEMENT IN THEIR CONSIDERATION OF FUTURE FISCAL AND FINANCIAL POLICY.

CALLAGHAN

FILES

HD HKIOD HD DEF D PS/PUS

SIR D WATSON MR WILFORD MR THOMSON

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