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SECRET
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7.
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The Governor has indicated (paragraph 14 of his telegram 306) possible points for discussion. On the question of defence contributions made by other Dependent Territories, Lord Goronwy-Roberts might confirm that these are negligible (eg £6000 in the case of Gibraltar) but add that Hong Kong is self- evidently regarded as a special case. He might also indicate that we would be prepared to consider a statement for local consumption indicating that the need for a greater Hong Kong contribution is due to our own financial and budgetary problems (which is no more than the declared basis of the Defence Review as a whole); and that we are prepared, without commitment, to consider a longer-term agreement than 5 years. It would be politically unrealistic to expect that the Hong Kong Government would be totally exempt from further Defence Reviews but any formal Agreement, whether of 5 or 7 years, would of course have a good deal of standing.
8.
Finally the Governor may refer to the criticisms
in UMELCO of
land.
standards, support costs or occupation of
He can be assured that these points will be thoroughly reviewed in Whitehall before we enter formal negotiations with the Hong Kong Government.
Hong Kong and Indian Ocean Department
7 April 1975
SECRET
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