TNAG-0308-FCO40-344-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 34

SECRET

6 I must observe that if an agreement involving escalation and consequently lower figures than £8.5m in the current financial year (1971/2) and some subsequent years were to be achieved, we would

expect the Ministry of Defence to make the necessary savings in order to enable the short-fall on £8.5m to be accommodated within Defence Budget Estimates for 1971/2 and the agreed levels of defence expenditure thereafter.

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I am copying this letter to Thorp and to Smith and also to Gwynn here who is concerned with the developmental assistance aspect.

Jous server,

Terence Truck

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T J BRACK