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propositions had been misunderstood and others very badly expressed and suggested they should not be taken literally.
3.
H.E. said that, at an appropriate stage,
discussions should take place on:
a) the period to be covered by the
agreement which HK would like to
be as long as possible; and
b)
the possibility of a graduated
contribution by HK.
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But whatever agreement might be reached on these aspects,
a number of questions would have to be critically examined:
4.
Basic costing: H.E. said that the Minister had referred to E 44m as being the basic cost from which it
appeared that the cost of a 4 1/3 garrison had increased by
33% in 12 months. As the sterling content was only about 48%
and UK inflation was of the order of 26% while HK inflation
was under 5%, this was difficult to understand. It would
help if a working party would examine various aspects of costing including the exchange rates used.
5.
Possibility of further cost reduction: Whilst
the composition of the cost of the new garrison had clearly
been carefully determined, there were a number of aspects that on examination might yield reductions. For example; air trooping, the capitation charge, calculation of LOA and
equipment costs. There was also the question of abating the
gross cost of the garrison by offsetting income tax payable
to HMG.
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