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5-31
Note for Sir Stewart Crawford's meeting with Mr. Haddon-Cave, Financial Secretary Designate,
Hong Kong
Hong Kong Defence Contribution
Hong Kong has paid an annual contribution to "imperial"
defence since 1863. In 1958 the contribution was fixed at
£1 million per annum. The current Defence Contribution
Agreement between Her Majesty's Government and the Hong Kong
Government was negotiated in 1966 and expires in April, 1971.
Under the terms of the Agreement Hong Kong makes an annual
contribution of £1 million plus a special additional annual
contribution of £32 million towards the "local costs" of the
Garrison ( which were assessed at £9 to £10 million out of a
total annual cost of about £16 million
2.
The defence contribution has always been a sensitive
issue in our relations with Hong Kong, since the Colony has
been the only one to have made regular and substantial
payments. The 1966 negotiations were carried through by the
then Secretary of State with great difficulty and the Agreement,
when announced, aroused unanimous opposition in Hong Kong.
3. When the then Defence Secretary visited Hong Kong in
June, 1969, the Governor suggested to him that as a first
step in preparing for the negotiations over the post-1971
Defence Contribution Agreement, officials of the Hong Kong
Government should work out a figure for Hong Kong's contribution,
both in relation to the size of the garrison and to what would
be politically acceptable in Hong Kong. This would then be
put to the Foreign and Commonwealth Office and if the latter
/(after....
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