TNAG-0309-FCO40-345-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 101

SECRET

(ii) if there were an increase or decrease in the

size of the garrison by more than one major

army unit or the equivalent, or

(iii) if the economy of Hong Kong were to suffer such

a serious adverse change that the continued

payment of a contribution at this level could

be shown to be an unreasonable burden on the

Colony's finances.

(c) The £2.2 million per annum for maintenance and minor

works would be a notional figure only; the Hong

Kong Government would in fact be completely

responsible for all maintenance and minor works

over the period of the agreement, no matter what

the cost.

(a) There would be virement in capital expenditure as

between one year and another.

2. I told the other Departments that we no longer wished to

pursue the Governor's proposal to place a lump sum interest

free at HMG's disposal. The Treasury were not surprised at

this reaction. Apparently the Bank of England are not at all

keen on the idea although the Treasury themselves were ready

to consider it further.

3.

The MOD were most reluctant at first to move at all from

the figure of £8.5 million. They were particularly concerned about the suggestion that virement between capital expenditure and recurrent expenditure should be replaced by virement in

the capital works programme as between one year and another.

/Their

2.

SECRET