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accepted by the Legislative Council but is anxious to minimise
any public criticism which may be generated when the size
of the contribution becomes public knowledge. For that reason
he has asked if the condition referred to in paragraph 2 above
may be modified by the substitution of April 1971 for April 1970
as the base date for assessing capital works costs. He has
reported that this was a point which attracted particular
attention when the matter was considered by the Finance
Committee. The general opinion in that Committee was that
April 1971 should be the base date since that was the date
of the beginning of the 5 year agreement under which the
contribution would be paid.
6. The proposed change in date will have little financial
significance and we in the Department think that it should
be accepted. We want to ensure as far as we can that the
Legislative Council approves the proposed contribution of £8
million per annum with as little ado as possible.
7. To accept the proposed change would mean departing, on
a point of minor significance, from the terms decided by
Defence and Oversea Policy Committee. But we think such a
departure would be justified in the circumstances and that
it would be sufficient to mention the point in our final report
to Ministers.
8. The views in paragraphs 6 and 7 above are shared at
official level both by the Ministry of Defence and by the
Treasury. We have had a further telegram from the Governor
on this point today.
2.
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