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A. Stewart
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S suppose.
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As expected, Treasury Chambers, early. In
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23/7
50
Our Ref: 2FD 24/643/01
Your Ref: MUA 10/393/1
Dear Carter,
24th July, 1969
KAI TAK AIRPORT
I am sorry not to have replied more promptly to your letter of 2nd July about a package deal which might assist Hong Kong to extend their airport. I have also seen corres- pondence between Lucas here, Gill of E.C.G.D. and yourself.
I am the more sorry about the delay because you will find that this letter is relatively unhelpful from your point of view. I deal below with the separate elements of your proposed package in the order in which you set them out in your letter of 2nd July.
Remission of the outstanding 1959 Loan
X
In effect you are asking us to agree to giving a grant to a country which, as your own Minister has pointed out, already enjoys buoyant revenue, while at the same time we are severely restricted in the amount of assistance we can offer less wealthy countries. Moreover, we have to take into account the fact that you are asking us to forego these repayments at a time when we are publicly doing everything possible to reduce overses expenditure, and by implication increase receipts. You may argue that the effect on the balance of payments will be marginal and the amount of taxes or loans which will need to be raised to offset the loss in revenue otherwise accruing to the Exchequer minimal, but nonetheless, I am not convinced that these are sufficiently strong grounds to justify us in agreeing to this concession.
Air Traffic Control System
y
Here I hope I can be more helpful. I have not seen whether the O.D. M. are prepared to make a 50 per cent grant available from C.D. & W. funds, but taking what I think is a reasonably unbiased view, it seems to us that if there is advantage to United Kingdom civil aviation in extending the airport, it might well be appropriate if the Board of Trade
W. S. Carter, Esq.,
/made a
RECEIVED IN I
T US:
(40)
Foreign and Commonwealth Office, REGISTRY No.51
Downing Street,
P:
S.W.1.
28 JUL 1969
+KK 21/11
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