CONFIDENTIAL Treasury Chambers Great George Street, London S.W.1 Telephone: Whitehall 1234, ext.RECEIVED IN 19 July, 1963 ARCHIVES No. 5 22 JUL 1963 Our reference: 2-FD 43/249/03 Your reference: BC 1051/13/G Dear Black, You wrote to Taylor, whose place I have recently taken here, on 12th June about the review of our subsidy to Muscat and Oman. You suggested that we should be prepared to under-write the costs of selected projects in the Civil Development Programme, even after the cutting off of our subsidy to Muscat if that should be decided upon at the time of the review. I am very much averse to a formal undertaking of the kind you propose. We have not, as far as I am aware, given any undertakings of this kind to the Sultan in advance of previous reviews, and we would very strongly prefer to avoid any such commitment on this occasion. proper it is fairly erom us wou I appreciate that, from the Sultan's point of view, he may fear being left in the position of having to carry on with expenditure which he only agreed to initiate on the understanding that we would be meeting the cost. Of course this is not, as you have yourself pointed out, a proper interpretation of the agreement between us and the Sultan. I think it is fairly clear that projects which had been initiated as a result of pressure from us would have to be looked at on a special basis, and we might well find ourselves having to under take their completion. This present time, however, a full year in advance of the postponed review, is not the time to enter into firm undertakings. I wonder if this last sentence may not provide you with a sufficient basis for discussion with the Sultan, in the event of his specifically raising this question. Would it not be possible for you to satisfy him by saying, after making it clear that a review must be undertaken without prejudice, that no doubt special consideration would be given to particular projects remaining uncompleted, which had been embarked upon on our initiative or at least encouragement. I think that this is as far as I can go. to particu prejudice, in making it elit not be po event of I am sending a copy of this to Lovell in your Finance Department. Yours sincerely, (J. G. LITTLER) S. M. Black, Esq., Foreign Office, Downing Street, S.W.1.
