Hong Kong Department
104
JIKK 10/9
AP Thorp Esq OBE Head of F1(Air) Ministry of Defence Main Building Whitehall
24 June 1971
LONDON SW1
LAST
REF.
(103
REF..
105
1. Thank you for your letter of 22 June about the Hong Kong defence contribution,
2. We think that the figure of 7 per cent suggested in your paragraph 2 is too low since it should be related only to annually recurrent costs and not to the entire costs of the garrison. Moreover, we think it should cover the increase from £2 million (in 1971/72) to £3 million (in 1976/77) since it is in the sixth year that any increase would become operative. On this basis an increase of something like 50 per cent would be justified. This is of course the figure we have already provisionally accepted in the case of capital works, and it may be that the idea of having the two figures the same will appeal to the Unofficial Members of the Councils in Hong Kong. We should be grateful if you could let us have your views - and if Brack and Smith could let us have theirs - in time for further discussions we shall be having with the Governor on Tuesday afternoon next week.
On the
3. Turning to your paragraphs 3 and 4, I am afraid I do not understand what you mean by the "officials' compromise solution" We did not arrive at any "officials' compromise solution" at the meeting in my room last Monday. contrary, Gaminara and I thought we had made it clear that the FCO view now was that we should proceed on the lines proposed by the Governor. In this connection you will wish to know that the Foreign and Commonwealth Secretary may prefer to include a specific recommendation in the paper for the DOPC. however be circulating a draft of that paper next week.
We shall
сс DJ J Brack Esq Treasury
RJ Smith Esq DOE
SECRET
E O Laird