Secret
X
In due course
6. In the end we agreed to send a telegram to the Governor telling him about the large increase in the capital works programme and asking him whether this new element in the situa- tion would help him to put across a higher contribution, the argument being of course that the buildings would ultimately become the property of Hong Kong (the Treasury representative was prepared to go along with this argument, provided it was submitted for Ministerial confirmation). We shall also have to ask the Governor what is the latest date by which he must receive the go-ahead for his negotiations in Hong Kong. We shall have to clear this telegram with other Departments and I think it likely that we shall find it necessary to send a separate telegram to the Governor explaining the line now being taken by both the MOD and the Treasury. The MOD and the Department of the Environment will give us a form of words explaining the increase in capital costs for inclusion in the telegram.
7. I plugged the point about narrowing the difference of views between Departments so as to avoid the whole problem being flung back at us by Ministers. Unfortunately while the gap between ourselves and the MOD is not unmanageable, the Treasury, bearing in mind the present bouyancy of the Hong Kong economy and the size of their reserves, are clearly determined to extract every pound possible from Hong Kong. In spite of all this we left it that we would aim at an FCO paper which would contain FCO views as well as the views of the MOD and the Treasury, with the Treasury representative reserving his position in case the Treasury found it unsatisfactory to include their views in our paper.
8.
Timing at the Hong Kong end will not I fear be easy. There is now no hope of getting a paper to the DOPC before 6 January. We must therefore go for a meeting sometime during the last week in January when the Foreign and Commonwealth Secretary will be back in London.
Eɣaria
E. O. Laird
Hong Kong Department 21 December, 1970.
This could have been worse.
Lagree
Hat apat
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Secret