"
HWB 10/16
97
Reference...
A
Para. 4 of (19)
21
(21)
Mr. Carter
The letters at (15) and (26) from the Ministry of Defence give us all the details so far available of the charges with which that Ministry proposes to bill the Hong Kong Government for the extra costs incurred by them in providing various personnel, service etc. for the Hong Kong Government in connection with the recent disturbances in the Colony.
2.
The total bill to date is a little over £4m., but even so it does not include any charges to be raised by the Navy and Airforce Departments. If paragraphs 4 and 5 of (15) are a reliable guide, these outstanding charges are likely to be heavy ones and so we do not really yet have an accurate idea of what the total bill will amount to.
3.
Mr. Cowperthwaite wrote to Sir Arthur Galsworthy on this subject at the beginning of September and he had a discussion with the Department when he visited London during the same month. No record is available of those discussions but there is a reference to them in paragraph 2 of (9).
4
•
It will be noted that by far the largest single item in the summary of costs enclosed with (26) is the frontier fence which is costed at £158,237. We had originally intended writing to the Treasury on this particular item advancing the argument that the need for this particular item arose from the abnormal external threat posed by conditions in China and treating this as a ground for sharing the cost with Hong Kong. In the event however this action was overtaken by receipt of the letter at (15) We then came to the conclusion that it would be politic to wait until we knew the size of the total bill to be raised by the Ministry of Defence before determining our course of action. This matter was raised with the Minister when he visited Hong Kong last October and during the discussions on the subject he is on record as having said that we had already taken this particular matter up with the Treasury on the basis that H.M.G. should pay for the wire and its transport and that Hong Kong should pay for the labour. As you will see from the above this is not the precise position. On his return from Hong Kong the Minister had some comment to make on the raising of charges by the Ministry of Defence for the hospitalisation of Hong Kong policemen wounded in the disturbances who were treated at the British Military Hospital in Hong Kong. You will see that an item of £3,008. is included on this account in the enclosure to (26).
5.
We are not at all sanguine about the strength of the Hong Kong case in this matter. Although Mr. Cowperthwaite mentioned in his letter to Sir Arthur Galsworthy the very substantially increased defence contribution now paid by Hong Kong, the likely reaction of H.M.G. to this argument is, I suggest, reflected in paragraph 2 of the Ministry of Defence letter at (15) cat
It seems that such chance as may exist of Hong Kong's attainment ing financial assistance from H.M.G. in this matter lies mainly in the political sphere and would require ministerial backing on purely political grounds. Mr. Cowperthwaite's recent attitude over the questions of devaluation and diversification are not best calculated to enlist Treasury sympathies on Hong Kong's behalf. I have enquired from Pacific and Indian Ocean Department about the position in Mauritius over the payment for the cost of assistance provided by H.M.G. to deal with the internal security situation there. The departmental view is that Mauritius is broke anyway and
that they do not expect much difficulty in persuading H.M.G. to foot the bill. The same can hardly be said of Hong Kong.
16.