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INDEPENDENT, WHEREAS, WHILE A DEPENDENCY (AND FOR A PERIOD AFTER INDEPENDENCE) SHE PAID NO CONTRIBUTION WHILE BENEFITING SUBSTANTALLY FROM BRITISH DEFENCE EXPENDITURE.
AS TO THE REFERENCE TO OUR FISCAL SURPLUS, BESIDES
PROMPTING CRITICISMS THAT OUR PRUDENT FINANCIAL POLICIES HAVE PRESENTED AN OPPORTUNITY FOR THIS ARGUMENT, THIS POINT IS LIKELY TO BE ANSWERED BY REFERENCE TO BRITAIN'S PROPORTIONATELY HIGHER
IF ONE IS IRRELEVANT, FISCAL SURPLUS IN THE LAST YEAR OR TWO.
SO IS THE OTHER.
ADDITIONALLY YOU HAVE RECOGNISED IN YOUR MAIN MESSAGE THE
HEAVY FUTURE FINANCIAL CALLS WE FACE.
SENTENCE OF
IN THIS CONNEXION, THE ARGUMENT IN THE LAST PARAGRAPH 3 OF YOUR TELEGRAM NO. 236, IS LIKELY TO BE ANSWERED BY REFERENCE TO THE LOW RATE OF SOCIAL EXPENDITURE, THE LOWER RATE OF TAXATION AT THAT TIME, AND THE VERY LARGE GARRISON IN 1950/51 (WHEN THE FIRST POST-WAR CONTRIBUTION WAS MADE) SEMICOLON AND AS REGARDS THE COMPARISON WITH 1967/68
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IF RECURRENT REVENUE CNLY IS TAKEN, THE COMPARABLE FIGURES ARE 4.4 PERCENT IN 1967/69 AND 4.25 PER CENT IN 1971/72 SEMICOLON BUT IF THE FORVER FIGURE IS CALCULATED ON THE DEPRECIATED VALUE OF THE POUND IT IS ONLY 4 PER CENT,
(C) PARA. 6. THIS POINT HAS FORCE, BUT ONLY IF UNOFFICIAL MEMBERS RECOGNIZE MY ARGUMENT FROM THE INDIRECT ECONOMIC BENEFIT. THEY
HAVE NOT DONE SO YET.
(D) PARA. 9. IT IS NOT CLEAR WHAT IS MEANT BY THE SECOND SENTENCE. POSSIBLY THIS IS A REFERENCE TO COMMONWEALTH PREFERENCE BUT YOU WILL RECOGNISE THAT UNOFFICIAL MEMBERS WILL REGARD THIS AS VITIATED BY BRITAIN'S APPLICATION TO JOIN THE E.E.C. AND THE IMPOSITION OF TARIFFS ON COTTON TEXTILES.
AS TO CIVIL AVIATION, I FEAR THAT TO PRESENT THIS VIEW WOULD BE COUNTER - PRODUCTIVE. FAR FROM ACCEPTING THAT THE POLICY OF CONTROLLING TRAFFIC RIGHTS IS WORKING TO H.K.'S ADVANTAGE, THE VIEW HERE IS THAT THE POLICY IS NOT BEING SO WORKED: AND THIS INDEED IS ONE SOURCE OF GRIEVANCE. POLICY, IN ANY CASE, VIS-A-VIS CATHAY PACIFIC IS TO PROTECT IT ONLY AGAINST THE RESTRICTIVE FRACTICES OF OTHER GOVERNMENTS, INCLUDING H M G IN RELATION TO
BOAC.
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(E) PARAS.-10 AND 11.