LOOSE MINUTE
D/DS1/303/10/9
AUS (GS)
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D of DP(c)
Head of F1 (Air)
DS6
M02
ASD2
VUNTEAIAD
255
REMISTRY No. 51
20 AUG 1975
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2678
DN Plans
DSL
FCO - Mr Dipiddy HK10D
HM TREASURY - Mr Hansford
HONG KONG
A
3
1 We agreed that DS1 would prepare a draft reply to paras 1 244 of Hong Kong telegram 797 of 18 August. I mentioned that Head of
F1 (Air) and I had also received a signal from the Command Secretary asking for similar information. I attach a copy of this signal. We
(244) 255/2 agreed that the reply to the Governor would be couched in fairly
general terms and that more detailed information would be supplied to the Command Secretary for him to discuss with Hong Kong officials.
2.
The present position on garrison costs is as follows:-
2.
The Command Secretary has now given the Hong Kong Govern- ment details of the £33.5m. garrison broken down into inflator categories.
b.
We have promised to update the garrison costs to 1976/7 prices as soon as possible. It will not be possible to do this before November.
C.
However, we are able to make a rough assessment, by the use of indices of approximate costs at Sept 75 prices.
d.
We will have much more difficulty in producing indices to convert from Sept 75 to 1976/7 outturn prices although we do have some pointers.
e. We cannot test the validity of the inflator until we have some actual outturn figures to compare with the formula.
On the question of the indices to be used to convert to Sept 75 prices; the following additions would seem reasonable:-
3.
a.
UK Pay + 18%
This is the average global increase in service pay announced in the House on 16 May (Hansard WA Col 184). For the purposes of this exercise it would be safe to ignore minor items in the capitation rates and also the small number of UK based
1
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