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slightly the rate of increase this year, overall the programme was
still a very impressive one. It was agreed that it was necessary
for the Government to continue each year to reiterate its plans
for increased expenditure in this field.
Hong Kong Garrison
5.
The Governor described his discussions with the Secretary of
State for Defence (see attached telegram and record of conversation).
He stressed his view that it would be impractical to expect British
Ministers to authorise any increase in real terms in the expenditure
they were already making on the garrison. He would do his best to
make this point in Hong Kong but he still expected difficulties, for
instance from Sir Y K Kan. Mr Cortazzi said that in his view we must
be prepared to support the Hong Kong Government in the maintenance of
a more than nominal contribution from the UK Government although it
was open for discussion whether the right figure might be 15% or 20%
or some other level. He also referred to the need to keep developments
on reinforcement in step with our relations with Nepal on Gurkhas.
Air Services
6. It was agreed that no action was necessary on the question of
whether CPA or British Caledonian should fly on the London route since
the hearings of the CAA were adjourned to 25 January. There would be
an opportunity to discuss this with the Secretary of State for Trade
when he visited Hong Kong at the end of the month.
US/Hong Kong Textiles Agreement
7. The Governor expressed gratitude for Ministerial support but it
was agreed that, apart from our commenting on the American attempt
to compare the bilateral Agreements with the US and the EEC, HMG could
do no more for the present.
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