SECRET
Fui Note
(ty Me Thision)
HONG KONG DEFENCE COSTS NEGOTIATIONS:
OPTIONS
ISK
Opening Position
£30 m. (or 75%) in 1976-77 at current prices.
Option A
£25 m. in 1976-77 moving to 75% at relevant price levels in second and subsequent years.
Note: (i) £25 m. 75% at September 1974 prices.
(ii)
Option B
The Chancellor of the Exchequer has given discretion for the movement to 75% to take place over three years.
£20 m. in 1976-77 moving to 75% at relevant prices over five years.
Option C
£17 m. in 1976-77 moving to 75% at relevant prices over five years.
Note: In the case of either Option B er Option C, the movement
to 75% could take place:
(i) over 7 years and/or
(ii) be advanced if Hong Kong's GNP were to increase
more rapidly than the present forecast.
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