3.
coincide with those for other tax
increases, nor would Ministers want to jeopardise the social programme; (ii) Ministers will undoubtedly wish to say
something about Hong Kong when they announce the results of the Defence Review (probably in February or March). Were it not for the suggested reduction in the garrison they might have been able to confine themselves to saying that our commitment to Hong Kong would remain; that there would be consultations with the Hong Kong Government about a successor to the present Defence Agreement before it expired in 1976; and that the purpose of the consultations would be to agree on how the cost of the necessary forces should be divided. But if the forces are to be reduced in order to accommodate financial problems on both sides, some mention of this reduction might be necessary for Parliamentary reasons here. Against this we have suggested that, even if a
statement referred to a reduction of forces tier could be in precise terms and related to present defence needs, it should still be possible to say that the division of costs would be for - 6 @lefonen Oyremont- discussion in the 1975 review. We also thought that, even if Ministers needed to go beyond this and to make it clear that HMG would then seek an unspecified increase in Hong Kong's contribution, you might prefer this to concrete
negotiations on a 75% contribution now. It looks as though messages will be sent early in December to other governments whom we shall be consulting about Defence Review matters and that there will be a simultaneous government announcement that consultations are about to begin. There could also well be Parliamentary questions either before or after this about our intentions as regards Hong Kong.
/Would you
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