DO HONG KONG
GR
360
DE DI P
CYPHER/CAT A
FM FCO 161725Z NOV
DE DIP
SECRET
(189)
TO IMMEDIATE HONG KONG TELEGRAM NO. 1001 OF 15 NOV 74.
FOR GOVERNOR FROM MALE (IN ABSENCE OF SIR D WATSON). DEFENCE REVIEW STATEMENT.
1. CURRENT PLAN IS THAT PARLIAMENTARY STATEMENT ON THE DEFENCE
REVIEW WILL BE MADE ON 3 DECEMBER. OFFICIAL STEERING COMMITTEE
MET THIS MORNING FOR FURTHER DISCUSSION OF DRAFT TEXT. THIS
TEXT AS THEN AGREED WILL BE SHOWN TO MINISTERS ON 18 NOVEMBER, AND MINISTERS MAY DECIDE TO DISCUSS IT ON 20 NOVEMBER.
2. AS REGARDS HONG KONG THE PASSAGE WHICH WAS ON THE TABLE WHEN
THE OFFICIALS' MEETING OPENED, AND WHICH WE SAID WE COULD SUPPORT, READ AS FOLLOWS:
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QUOTE WE SHALL OF COURSE MAINTAIN OUR OBLIGATIONS TOWARDS OUR REMAINING DEPENDENT TERRITORIES. THERE WILL HOWEVER BE CONSULTATION WITH THE HONG KONG GOVERNMENT ABOUT THE LEVEL OF FORCES APPROPRIATE IN THE PRESENT CIRCUMSTANCES AND ABOUT HOW THE COST OF THESE FORCES SHOULD BE DIVIDED BETWEEN US AND THEM WHEN THE PRESENT COST-SHARING AGREEMENT RUNS OUT IN 1976 UNQUOTE. 3. THE MINISTRY OF DEFENCE, WITH STRONG SUPPORT FROM THE TREASURY, RAISED FIRM OBJECTION AND PROPOSED THE FOLLOWING ALTERNATIVE: QUOTE WE SHALL, OF COURSE, MAINTAIN OUR OBLIGATIONS TOWARDS OUR REMAINING DEPENDENT TERRITORIES, ALTHOUGH WE PROPOSE TO MAKE SOME ECONOMIES IN THE FORCES IN HONG KONG AND TO SEEK FROM THE HONG
KONG GOVERNMENT A LARGER CONTRIBUTION TO THEIR COST WHEN THE PRESENT
OST-SHARING AGREEMENT RUNS OUT IN 1976 UNQUOTE.
4. THERE WAS NO MEETING OF MINDS, THOUGH IT WAS APPARENT THAT THE CHAIRMAN, SIR JOHN HUNTS, WAS INCLINED TOWARDS THE MOD FORMULATION.
AND WE WERE IN A MINORITY OF ONE IN SUPPORT OF NON-COMMITT AL
LANGUAGE ON COST-SHARING.
5. TO MAKE SOME HEADWAY (GIVEN THE TIME FACTOR INVOLVED IN THE
SUBMISSION TO MINISTERS) MOD AND TREASURY WERE ASKED IF THEY WOULD BUY THE CONCEPT OF QUOTE LARGER PERCENTAGE OF COST UNQUOTE RATHER THAN QUOTE LARGER CONTRIBUTION TO COST UNQUOTE. NO LANGUAGE WAS
PROPOSED. THEY SAID THEY WOULD. THE POINT WAS MADE THAT THIS COMPROMISE THOUGHT WAS OFFERED WITH NO PRIOR CONSULTATION WITH YOURSELF, AND THAT YOU VIEWS WOULD HAVE TO BE GOT QUICK.
6. THIS IS A VERY HOT POTATO. YOU CAN SEE WHAT THE PRESSURES ARE. COULD YOU PLEASE LET US KNOW HOW YOU REACT. IT WOULD BE MOST HELPFUL IF WE COULD HAVE LANGUAGE THAT YOU COULD ACCEPT, AGAINST THIS BACKGROUND, BY MONDAY MORNING.
7. WHATEVER TEXT EMERGES WE SHALL ENSURE YOU ARE AUTHORISED TO IMFORM EXCO IN ADVANCE, EVEN THOUGH THIS MAY HAVE TO PE ONLY ON THE SAME DAY.
CALLAGHAN
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