TNAG-0310-FCO40-346-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 112

SECRET

153

accepted by the Legislative Council but is anxious to minimise

any public criticism which may be generated when the size

of the contribution becomes public knowledge. For that reason

he has asked if the condition referred to in paragraph 2 above

may be modified by the substitution of April 1971 for April 1970

as the base date for assessing capital works costs. He has

reported that this was a point which attracted particular

attention when the matter was considered by the Finance

Committee. The general opinion in that Committee was that

April 1971 should be the base date since that was the date

of the beginning of the 5 year agreement under which the

contribution would be paid.

6. The proposed change in date will have little financial

significance and we in the Department think that it should

be accepted. We want to ensure as far as we can that the

Legislative Council approves the proposed contribution of £8

million per annum with as little ado as possible.

7. To accept the proposed change would mean departing, on

a point of minor significance, from the terms decided by

Defence and Oversea Policy Committee. But we think such a

departure would be justified in the circumstances and that

it would be sufficient to mention the point in our final report

to Ministers.

8. The views in paragraphs 6 and 7 above are shared at

official level both by the Ministry of Defence and by the

Treasury. We have had a further telegram from the Governor

on this point today.

2.

SECRET

19.