7.
(4)
Secret
if the Governor now uses the same argue-
ment in reverse.
This argument is an extraordinary one.
The Governor's suggestion of a stable
arrangement was clearly dependent on
agreement being reached on a mutually
acceptable basis in the first place.
Otherwise it has no meaning.
The Governor further maintains that his
revised offer of £7m. per annum would, when
taken over a period of five years, offer a
reasonable compromise to meet the request of the
Ministry of Defence and Treasury for:
(a) An annual increase in the contribution
to cover pay and price rises during the
period of the agreement; and
(b) A higher starting figure than the
Governor's original offer of £8 m. per
annum, and would He states that his offere.
8.
cover price inflation peranmen"
of roughly 10 per cent over the period.
a
Taking contribution of £6.55 m. in
1971/72 and assuming equal annual increases
over a period of five years, the offer of
£7 m per annum would equate with the following
scale:
1970/72
1972/73
1973/74
1974/75
1975/76
£6.55 m. £7.025 m. £7.5 m.
£7.975 m. £8.45 m.
This allows for a total increase of 29 per cent
in the contributions over the five year period
(i.e.à little under 6 per cent perannum).
9.
If the Governor's original offer of
£8 m. per annum were adhered to, the correspon-
ding position would be:-
£6.55 m. £7.275 m. £8 m.
£8.725 m. £9.45 m.
This would allow for a total increase of 44 per
cent in the EX contribúton over the five
Secret
/year
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