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more than the £2.5 million for the Whitehead Camp, on the grounds that this alone would be sufficient to provide accommodation for 9,000 people more than the number under our original plans. I understand that view but I
hope you can agree to go further. I am concerned that, in view of the circumstances I have outlined above, any sum less than £4.25m would be seen as niggardly.
As you know, with the Prime Minister's agreement, the Governor announced on 8 June our readiness to contribute £4.5m Since then the situation in Hong Kong has worsened and I believe that many in the Colony, and, I suspect, in Parliament, would regard it as perverse if we were now to scale down our contribution. We would be accused of reneging on commitments and of penalising the Hong Kong Government for having found a means of disbursing the funds in a more cost effective way. The Hong Kong Government will need all the accommodation in their latest proposal if they are to house the new arrivals adequately. Moreover there is a further problem: if we do not cover the necessary costs, I see absolutely no prospect that the Finance Committee of the Legislative Council will do so: that would leave the Governor in an impossible position and greatly inflame local feeling over the boat people.
6. A further complication is that the sum to which we are now publicly committed is f4.5 million, not the £4.25 million mentioned in your letter of 6 June. The Governor used the higher figure in speaking to the press following his meeting with the Prime Minister on 8 June. I have looked into how this discrepancy arose. It seems clear that the Governor was basing himself on a press statement
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CONFIDENTIAL