SECRET
the end of the matter since the Governor must seek the
advice of his Executive Council and, to secure the funds,
must obtain the sanction of the Standing Finance
Committee of Legislative Council.
Although in the normal course of events we would not
be making the preliminary moves in negotiations for a
fresh agreement until mid-1970, I favour an early start
with the Governor. We may have to wait some time for his
first proposals and there could be lengthy exchanges with
him. The timing of the approach to unofficials is another
this will have to be decided nearer the time we
are ready for this step (the longer we put between it and
the recent decision to impose a tariff on Commonwealth
cotton textiles the better).
matter;
(b) In further discussion with the MOD and Treasury, we
explore the basis on which the contribution might be
calculated and consider to what extent we give the Governor
any hint or guidance on this point.
Because his
unofficial advisers are antipathetic to the doctrine that
a Colony contributes to its own defence according to its capacity to pay (see paragraph 5 of Background), the
Governor has for some time now been searching for a
rationale on which to base the Hong Kong contribution.
In 1964 he presented the agreed additional contribution
as a measure of assistance towards the military capital
works programme. In 1966 we asked Hong Kong to pay the
entire "local costs" of the garrison (about £11 million
p.a.) and the eventual agreed contribution was
represented in that light, having regard to the difficult
/UK balance
...