Reference...
HKK 10/9
9:0
Sanderbtful
Abend This
The old defence Contribution files
are with me.
13/4/49
Mr. Carter
with (9
Copied to HKK10/1
You have already seen the Ministry of Defence letter at (9) which refers to the Report at (8) on the subject of the proposed Hunter fighter force for Hong Kong.
2.
The hub of the matter now is to decide who is going to foot the bill for the recurrent and capital costs of the unit. You will see from (9) that the Ministry of Defence merely quote the Chiefs of Staff stipulation that Defence votes should not bear the costs: they accordingly look to us to do so and ask us to state what arrangements we envisage for reimbursing them for any expenditure that they incur in the matter.
3.
I doubt if there is very much point, at this stage, in attempting to drum up arguments that Hong Kong should not be expected to pay, at any rate for the whole lot. My inclination is to concentrate on resisting the claim for payment for the capital cost of the aircraft. It seems to me that this presents a golden opportunity for HMG to make a gesture to Hong Kong with the minimum financial cost. Unfortunately, I doubt very much whether it would rank as a gesture because no publicity can be attached to it, either at this end or in Hong Kong, and because it is a relatively small sum of money.
4.
However, I suggest that our first step is to consult the Governor and I attach a draft letter for this purpose. Ministry of Defence do not want us to send the Governor a copy of the report behind (8). This is not because they do not want him to see its contents; but there is apparently a rule in the Ministry that papers of this kind may not be sent out of the country except to military recipients. They have no objection, however, to our sending extracts from the report and I therefore suggest that we should send the Governor an extract of paragraphs 7 onwards to the end of the report, omitting the portions that I have marked in square brackets. This gives him the full picture when read with the previous reports. In any event, he has no doubt seen a copy of the full report in C.-in-C. FE's hands.
5.
Defence Policy Department are not interested at this stage: they would, however, like us to bring them into the picture after we have heard from the Governor and before we reply to the Ministry of Defence.
6. On a minor matter of detail, you will note that whereas paragraph 13 of the report talks about a potential sales value of £280,000 for the eight aircraft involved, the Ministry of Defence letter at (9) raises the ante to £300,000. They tell me that this is simply a matter of rounding off!
13 February, 1969
WAKE?
(A. W. Gaminara) Hong Kong Department