TNAG-0308-FCO40-344-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 36

SECRET

Draft Telegram to Governor, Hong Kong

To follow on from existing paragraph 1 of Foreign Office draft reply to Telegrams 249, 250, 266.

I can see absolutely no hope of acceptance here of a

seven year agreement at the level you suggest in your

Telegram 266.

2.

Under your proposal HMG would receive £5M less in the

first five years. In years six and seven it would receive

£1M less than if a contribution of £8.5M were continued for

these years. We should have expected that by 1976 there would

be valid grounds for a contribution of £8.5M being revised up-

wards in the light of generally arising costs since 1971/72.

3. We agree that capital works programme as it stands at

present begins to tail off after 1974/75 but as you know from

my Telegram 43 of 15 January paragraph 7 some £2.5M remains to

be spent in 1976/77 on married quarters alone. For fairly

obvious reasons it is normal for works programmes to appear to

tail off so many years ahead and it would not be realistic to

assume negligible spend in the seventh year. Thus possibility

of stretch of £17M for capital works over seven instead of five

years is not a reasonable assumption for suggesting some ground

exists for a lower contribution than that which we have been

considering.

4. We must remind you that we obtained approval here from

Ministers concerned to an annual contribution of £8.5M for five

years against your assurance that it was a figure you felt able to support and which had some hope of a majority endorsement.

It was not as much as was thought appropriate in many quarters

/and

SEGRET