RE. VED IN
REGISTRY No. 51
29 JUL 1971
TAKIL10/9
Our reference: 20415/01
Your reference:
A W Gaminara Esq
Treasury Chambers
Great George Street, London S.W.I
Telephone: 01-930 1234, ext. 555
SECRET
123
Foreign and Commonwealth Office
Hong Kong Department
Whitehall
London SW 1
Dear Bile
HONG KONG DEFENCE CONTRIBUTION
27 July 1971
ie:-
We have been considering your draft telegram to the Governor of Hong Kong in discharge of the remit given by Ministers in DOP(71)16th Meeting. Our view is that this is all right as far as it goes but surely, as officials, we should be giving the Governor more background in a MIFT" to fill out the firm line which Ministers have taken -
(i) Providing him with some guidance on why HMG are putting
forward this particular scheme: these would not be arguments which he could use with his Unofficials but, if he knows our thinking, this may help him decide how to put the scheme over; and
2
(ii) suggest to him some additional lines of argument which might
actually be used, at his discretion, with the Unofficials: there is very little for him to go on in paragraph 1 of the draft telegram.
On (i) one might bring in:
(a) the Unofficials may well have been expecting to haggle and have been incredulous that HMG has stuck to its £81m all the time. Thus it is not unreasonable that our new move should be to come a little way off £81m.
b) The new proposal establishes the principle of clear annual increments in the contribution - ie a rise of £m each year, (whereas increments in the Governor's proposals are not as frequent).
(c) The proposal ought (if price increases are not too high) to result in Hong Kong paying over the years an increasing real proportion of the budgetary and foreign exchange costs of the garrison.
d) We believe it is inadvisable to bind ourselves for as long as 7 years.
(e) Finishing on £9m in 1975/76 would give us a higher starting point for renegotiation in 5 years time than even our original position did.
SECRET