SECRET
C
GOVERNMENT HOUSE
L/M 30/69 in SCR 26/64
HONG KONG
51
1 Garmisc
п
We
(65)
ший бісше
c.c. to Sith. Monser
HK. Dept for agent obe.
In
Mw3x.
17th October 1970
271
CIETY NO
Akki0-9
Dear Michan
Thank you for your letter of 2nd October about the defence contribution. This did not arrive here until 12 October, and I have therefore had very little time to consider it, but I wanted to get a first reaction off to you.
2. First, as regards the two specific points in paragraph 3:-
;
(a) I confirm that (whatever overall figure is agreed) it was my intention that there could be virement by mutual consent between the capital and recurrent elements of the contribution.
(b) The PWD are not entirely happy with current arrangements, but we are ready to continue. We have had ef estimate of these costs, which are taken into account in our figure: that is, we would not undertake this work in addition to paying the agreed amount.
3. As a result of your letter however, two points emerge. First, it appears local spending is lower than we had estimated in our calculation (in which we had allowed for the new pay scale), and the direct economic gain to Hong Kong from the presence of the garrison therefore correspondingly less. Second, if we are now working on the basis of 6 2/3
K.M. Wilford Esq., C.M.G., Foreign & Commonwealth Office, London, S.W.1.
K
Y No.51
SECRET