Secret
(iii) The figure of £71⁄2 m. per annum represents
(iv)
(v)
an increase of 50 per cent over the
existing contribution, a substantial one
by any yardstick.
On the basis of the Colony's current
annual estimates of revenue and expendi-
ture Hong Kong is devoting 12.25 per cent
of its total annual expenditure (capital
and recurrent) to defence and internal
In terms of recurrent
expenditure only, the figure is 15,35 per
security measures.
cent.
Unless we are prepared to accept the con-
sequences of a first class political
crisis in Hong Kong, we cannot use the
official majority in the legislature to
force through acceptance of a contribution
greater than that which Unofficial Members
of the Council are prepared to accept.
The Governor puts this figure at a
maximum of £71⁄2 m.
(vi) Relations between HMG and the Hong Kong
Government today are at a low ebb, partly
because of a continuing conflict/of
interests in the sphere of international
trade; and partly because of a series
of events which Hong Kong has regarded
as blows directed against its trade and
finance (the devaluation of sterling in
November 1967; the UK import deposit
scheme of 1968; and the decision by HMG|
to impose a/tariff on cotton textile
imports from the Commonwealth in 1969).
In addition, there is a strong feeling
in the Colony EXEİXݤ that HMG tend to
make use of the Colony even to the extent
of sacrificing Hong Kong interests to
Secret
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