TNAG-0182-FCO40-218-Defence-contributions-1969 — Page 114

NOTHING TO BE WRITTEN IN THIS MARGIN

W(B)L 51-7406

L

6.

However, notwithstanding my proposal for deferment, you may be interested in the Governor's views on the question of Hong Kong's responsibility for costs. Not unexpectedly the Governor has reacted strongly to any suggestion that Hong Kong should be required to meet any part of the capital cost of the aircraft (if we read your proposals correctly you are asking that DefenceVotes should be reimbursed an amount equivalent to the net credit that would have accrued to them had the

aircraft been sold elsewhere). This is a feature of the proposals that could make his task almost hopeless at whatever stage he takes the matter to his Councils. It would

certainly make the next round of negotiations or

the defence contribution more than usually

acrimonious. The Governor has indicated that

if the aircraft cannot be provided without a Capital

Charge being raised then he fears that he may have to abandon altogether any idea of putting the proposal for a fighter unit to his Councils.

7. There are similar arguments against Hong Kong having to meet the running costs in their entirety. Earlier in this letter I referred to the provision of air cover for Hong Kong from the UK. In the absence of an air presence in Hong Kong the political need to demonstrate our capacity to provide such cover and the need to provide a deterrent to Chinese incursions into Hong Kong air space (which seems to us to be as much a military as a political point) would undoubtedly involve regular visits of aircraft from the UK. These visits could be substantially reduced in frequency (perhaps eliminated altogether) if there were a Hunter force in the Colony. It does seem to us that some recognition of this potential saving of expenditure on your Votes should be shown in the extent to which Hong Kong is required to meet the running costs of the Hunter unit.

/ 8.