British Prime Minister Jim Hacker has just been given a dressing down by the United States Ambassador over his new defence policy, which involves the cancellation of Trident. In addition, he has been told that there is a problem on St. George's Island, a Commonwealth country in the Indian Ocean. The US Government is concerned that it could be subject to a Communist takeover, and threatens to impose major sanctions against the United Kingdom if this takes place. Having known nothing of this, PM summons the Foreign Secretary for a briefing. Hacker comments to his Personal Private Secretary, Bernard Woolley, that the Americans seem to think that the British Foreign Office is nothing but a pack of "Communists and pinkos." "Well," says Bernard, "not all of them."

Meanwhile, Cabinet Secretary Sir Humphrey Appleby meets with Sir Richard Wharton, Permanent Secretary to the Foreign Office (FO). The latter is annoyed that the PM is starting to ignore Foreign Office advice and is beginning to give orders on his own with a view to pleasing the White House.

Sir Richard fills Sir Humphrey in on St. George’s Island: a coup d'état will soon be attempted by Marxist guerrillas with assistance from Libyan and Soviet military advisers. An invasion force from the Communist Republic of East Yemen is expected to tip the balance. The Foreign Office has already agreed to take no action in return for continued trade concessions. Hacker might interfere if he finds out and must be kept in the dark.

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Wikipedia