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all these problems, I argued (and Sir Michael did not seriously contest) that there remained a military threat which we needed to meet, and also could only be met by retaining the white ensign.
4.
I acknowledged several times that Sir Michael had very real financial problems, and that the question of patrol craft for Hong Kong was only one item in a long list of cuts which he would be forced to make. I argued, however, that the strategic, political and military considerations made the question of 3 patrol craft a much more significant one than their size and cost suggested. I hoped that Lord Caithness would be able to persuade Mr Hamilton tomorrow that the MOD needed to adopt a more flexible position. If he was not able to, I thought it quite possible that Lord Caithness would ask the Foreign Secretary to intervene.
5. On a very private basis, I also drew Sir Michael's attention to Mr Terence Brack's recent letter to the Financial Secretary (of which he was unaware). He expressed regret if this had not been handled as tactfully as it should have been.
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Patrick Wright
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