TNAG-0308-FCO40-344-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 42

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OBSERVED THAT THE TOTAL OF CASH CONTRIBUTION AND MAINTENANCE FOR THE 5 YEARS 1971/2 TO 1975/6 (£25 MILLION) PLUS THE CAPITAL AMOUNT (£17 MILLION) EQUALS £42 MILLION AS AGAINST 5 TIMES £8.5 MILLION EQUALS £42.5 MILLION. 1 SUGGEST THE DIFFERENCE OF £.5 MILLION IS NOT REALLY SIGNIFICANT IN VIEW OF THE FACT THAT MAINTENANCE COSTS ARE A VARIABLE FIGURE ANYWAY AND MAY SWALLOW IT.

7. THE REDUCTION IN NOTIONAL GROSS ANNUAL AMOUNT WOULD MAKE THE WHOLE PACKAGE MORE EASILY PRESENTABLE HERE AS WELL AS HAVING A PROBABLY LESS ABRUPT EFFECT ON OUR RESOURCES.

8. DO YOU FEEL THIS, OR SOMETHING LIKE IT, MIGHT BE ACCEPT- ABLE TO HMG, IN WHICH CASE I WOULD TRY IT ON THE UNOFFICIAL MEMBERS? I MUST EMPHASISE THAT THE APPARENT INFLEXIBILITY WITH WHICH HMG'S PRESENT POSITION HAS BEEN EXPRESSED IS CAUSING MAJOR DIFFICULTY HERE AND, FURTHER, THAT I DO NOT YET KNOW HOW UNOFFICIAL MEMBERS WOULD REACT.

TRENCH

FILES:

DEFENCE DEPT

HKD

FED

FPAD

ATD

CCD

PS

COPY TO:

MR. D.J.J. BRACK, TREASURY.

PS TO PUS

SIR S. TOMLINSON

MR. VILFORD

MR. D.A. SCOTT MR. ROSE

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