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The
12(a) of the Steering Brief.) Secretary of State should warn his colleagues that the Governor recommended that formal consultations with Hong
Kong should not start until May, i.e. after the Defence Review has been
announced, so that current discussions
about taxation increases to finance the enlarged social welfare programme can
be got out of the way first.
This
would not preclude a suitable reference',' when the results of the Defence Review
are announced, to the fact that there would be consultations with the Hong Kong Government about the future level of the garrison and about how the cost should be divided in future.
Treasury officials thought this might make it more difficult to get a satisfactory defence contribution from Hong Kong, and the Chancellor of the Exchequer may press for consultations to be completed for the Defence Review. The Secretary of State should say that after further consultation with the
Governor, he is satisfied that this
1
is the correct way to handle the Hong Kong consultations and seek their agreement to it.
He may like to add that it looks at present as though it should be possible not only to do away with the present reinforcement capability, but
also to reduce the garrison from its
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