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16. For two years attempts have been made without success at
official level to obtain a measure of assistance. The Treasury
have considered that in our present economic circumstances Government
expenditure should not be increased for this purpose; the necessary
funds must be found from existing sources. The only possible major
source of existing funds is the Aid Programme; the ODM do not
consider Hong Kong to be "aidworthy" and hold strongly to the view
that Board of Trade votes for civil aviation are the appropriate
source for expenditure in aid of British aviation interests.
Board of Trade votes have been effectively pruned in past exercises
to contain government expenditure and there is no money to spare
for additional projects; even a minor allocation, it is claimed,
could only be found at the expense of aviation development in the
UK. Other quasi or non-governmental sources have been explored
without result.
17. On financial grounds Hong Kong's case for seeking assistance
is weak. Government reserves at about £80 million are considerable
(although there will be many heavy calls on these in the years
ahead); Government revenue continues to be buoyant, throwing up
a steady succession of budget surpluses. The case for assistance
must rest largely on the political grounds set out in paragraph 14
above and on meeting the strong public feeling in Hong Kong that the
UK has an obligation to share in the cost of maintaining an airport
from which British aviation interests derive substantial benefit
and where the traffic rights are controlled by HMG in those interests.
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/ 18.