CYPHER/CAT A
SECRET
PRIORITY FOREIGN AND COMMONWEALTH OFFICE
TELEGRAM NUMBER 848
SECRET. 231440Z.
TO HONG KONG
23 DECEMBER 1970
(HKD)
104
LAUT
PERSONAL FOR GOVERNOR FROM LAIRD. REF.
DEFENCE CONTRIBUTION.
106
MOD AND TREASURY WERE NOT PREPARED TO ACCEPT OUR DRAFT OF PAPER
FOR MINISTERS. WE HAVE ALSO BEEN CONFRONTED WITH LARGE INCREASE
IN ESTIMATED COST OF ENLARGED CAPITAL WORKS PROGRAMME.
2. WE HAVE HAD FURTHER MEETING AT MY LEVEL IN ATTEMPT TO CLARIFY
ISSUES. MOD REPRESENTATIVE THOUGHT CONTRIBUTION SHOULD BE ABOUT £8/9 MILLION A YEAR. HAVING REGARD TO BUOYANCY OF HONG KONG ECONOMY AND SIZE OF RESERVES TREASURY TOOK EXTREME VIEW SUGGESTING AT LEAST 50 PER CENT OF TOTAL REVISED COSTS, NAMELY, £12/13M. A
YEAR.
3. IT WAS EVENTUALLY AGREED WE SHOULD SEND FURTHER TELEGRAM TO YOU
EXPLAINING INCREASE IN CAPITAL COSTS AND ASKING WHETHER THIS NEW FACTOR WOULD HELP YOU TO OBTAIN AGREEMENT FROM UNOFFICIAL MEMBERS
TO A HIGHER CONTRIBUTION, THE ARGUMENT BEING THAT LARGER PROPORTION OF HONG KONG'S CONTRIBUTION WOULD BE SPENT ON BUILDINGS
WHICH WOULD ULTIMATELY BECOME PROPERTY OF HONG KONG.
4. THERE IS NOW NO HOPE OF GETTING PROBLEM TO MINISTERS BEFORE P.M.
AND S OF S'S RETURN FROM SINGAPORE IN LAST WEEK IN JANUARY. WE
ALSO NEED THEREFORE YOUR ASSESSMENT OF HOW THIS SLIP IN TIME TABLE
WILL AFFECT THE TIMING AT YOUR END.
5 THE TELEGRAM EMBODYING THE POINTS IN PARAS 3 AND 4 ABOVE HAS
YET TO BE AGREED WITH OTHER DEPARTMENTS, BUT WE ARE HOPING TO GET IT TO YOU NEXT WEEK. NEEDLESS TO SAY WE SHALL STRONGLY CONTEST THE TREASURY VIEW, BUT IT WOULD BE MOST HELPFUL IF YOU COULD RAISE YOUR
OFFER BY SAY £1 MILLION. THIS WOULD GIVE US A CHANCE OF REACHING
AGREEMENT WITH MOD AT LEAST. AND POSSIBLY ISOLATING THE TREASURY.
7
6. PLEASE DO NOT REFER TO THIS TELEGRAM. IN YOUR REPLY TO THE
FURTHER TELEGRAM WE SHALL SEND YOU NEXT WEEK.
DOUGLAS HOME
FILES
HD H.K.D.
MR. WILFORD
SIR L.MONSON
COPY TO:
MR. GAMINARA, HKD
SECRET
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