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5. It would be entirely inconsistent with the system of
allocating public expenditure between objective programmes if
such a subsidy were to be charged to the Defence Budget - and
after next year, we may have serious problems in restricting
defence expenditure to the targets that have been agreed.,
Moreover the policy adopted by the Overseas Defence Committee
in 1960 and followed since has been that
"Colonial Governments should be expected to bear the
cost of maintaining internal security and that,
should assistance from United Kigdom funds be
necessary in individual cases, appropriate provision
should be made in the Colonial Services Vote."
I suggest therefore that the proper place for any subsidy is on
the FCO Military Aid Vote and that the Ministry of Defence
that
should be reimbursed from Vote to the extent of the subsidy.
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