CONFIDENTIAL
Board of Trade votes do not run to sums of the order
required.
11.
After discussions in Hong Kong last June, Lord Shepherd instructed that we should press for the following package deal in favour of Hong Kong:
12.
(i) Remission of the outstanding balance of an
interest free loan made to Hong Kong in 1959
for airport development.
(ii) 50% grant from C.D. & W. funds towards the cost
of the air traffic control system; and if possible,
(iii)
A statement by E.C.G.D. that cover would be
available for any part of the contract awarded
to British firms.
We have attempted to negotiate the elements of this
package deal with the Departments concerned. So far the
results have not been promising.
(a) The Treasury argue that in pressing for
remission of the outstanding 1959 loan we are
asking for a grant to a territory with buoyant
revenue at a time when we are severely restricted
in the amount of assistance we can offer less
wealthy countries than Hong Kong, They point
out that we are asking them to forego the present annual repayments by Hong Kong at a time when we are publicly doing everything possible to
reduce overseas expenditure.
(b) O.D.M. which has control of C.D.&. grants
are adamant that they are unable to agree to the grant of aid funds to Hong Kong, in the circumstances of the Colony's present flourishing economy when aid could only be given
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