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the risk of further uncertainty for Hong Kong's interests as we move from quotas to tariffs on 1 January 1972 in the field of cotton textiles are added reasons why it would be unwise to ask too much from Hong Kong in the way of a defence contribution.
12.
The evident heavy capital needs of the Colony as described in paragraph 10 above and the threats to its future prosperity as described in paragraph 11 can only make worse the popular opposition which is
known to exist in Hong Kong to any imposition of a defence contribution
from outside.
(2) Political Factors
13. Under the cconstitution of the Colony, the Governor is obliged first to submit a proposal such as the defence contribution to his Executive Council and may only act contrary to their advice subject to reference of the matter in question to the Foreign and Commonwealth Secretary; thereafter, any proposals must be approved by the Finance Committee of the Legislative Council and finally by the Legislative Council as a whole. The unofficial members of those councils, although nominated by the Governor, are men of independent minds and independent
means who are not paid for their services. They are not amenable to any kind of government "whip". The balance of official and unofficial
membership of the Legislative Council is such that the Governor is in theory able to pass legislation if he is prepared to use both his original and casting votes. There have been no precedents for such use of the Governor's vote in recent years and its use, particularly on such an unpopular issue as that of the defence contribution, would again risk the resignation of many, if not all, of the unofficial members of both Executive and Legislative Councils with the consequent disruption of the system of government and a grave risk of disorders in the Colony; the Governor could expect little or no popular support on such
an issue. The chief benefactors from such a situation would be the
Communists.
Conclusion
14. We conclude that, on balance, Her Majesty's Government should accept £8.5 million a year for 5 years as a new Hong Kong defence contribution if the Governor is able to negotiate this successfully with his advisers. We consider that it would be counter-productive
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