TNAG-0179-FCO40-215-Strength-of-Hong-Kong-Garrison-1970 — Page 18

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£2 million might be classed as annual capital expenditure (the latter figure seemed higher than could be achieved).

2.

In justifying and presenting a figure in Hong Kong he would not attempt to base it on the "local costs" of the garrison. He proposed to deploy

such arguments as :

3.

(a) rising costs during the currency of the

present agreement;

Sme I'm crease

to make out a case for increasing the Current contribution

in so doing.

and

(6) the increase by some 50% of the Colony's

G.N.P. (on the basis that this could probably be mamtamed);

in their contr butin; justified rising net expenditure by the Services in Hong Kong (from an estimated £5 million in 1966 to £7 million in 1969, although

(c)

this included amounts spent on purchases of British goods).

It would be necessary to keep the increase in that part of the contribution related to recurrent costs as low as possible; he did not expect this figure to do more than rise proportionately with rising costs. He would like to see as much as possible of the increase included under capital expenditure on buildings and like facilities which would revert to Hong Kong as Government property when no longer required for defence purposes.

4. The Governor hoped that in London some account would be taken in assessing Hong Kong's monetary contribution of the value of the land made available

for defence purposes; in view of the shortage of land in the Colony this was a very valuable element in the Colony's total contribution.

•

5. It was agreed that the next step would be for the Governor to reply to Sir Leslie Monson's letter

of 9 October.

(b) Fighter Aircraft

6.

It was noted that the Governor would be discussing this matter with Lord Shepherd on

26 November.

17.

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