(145181) Dd. 737490 750M 1/71 Hw.
NOTHING TO BE WRITTEN IN THIS MARGIN
Registry
No.
SECURITY CLASSIFICATION
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Secret.
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PRIVACY MARKING
O
..In Confidence
SECRET
DRAFT
BACKGROUND NOTE
Type 1 +
ANNEX
From
To:-
Telephone No. & Ext.
Department
Hong Kong
HONG KONG DEFENCE CONTRIBUTION
1. For the past four years the Hong Kong Government
have paid to Her Majesty's Government an annual defence
contribution of £5 million. This amount has been made
up of an annual contribution of £1.5 million (fixed in
1958) plus a "special additional contribution" of
£3.5 million, negotiated in 1966. The agreement under
which the contribution has been provided expired at the
beginning of April 1971 and we are now endeavouring
to negotiate a new agreement.
2. In 1966 the then Secretary of State for the
Colonies took a negotiating team to Hong Kong.
There
was an atmosphere of considerable opposition in the
Colony to the idea of an increased contribution of the
order then being demanded and agreement was only reached
after long and difficult negotiations at one stage of
which there was a real danger that the Governor's
unofficial advisers would tender their resignations.
3. In 1967 the estimated annual costs of the United
Kingdom Armed Forces in Hong Kong were £16 million.
In 1971/72 the comparable costs are estimated (at 1970
prices) at £26.4 million comprising £21.8 million
running costs, £2.4 million capital works costs and
£2.2 million for maintenance and minor works. The cost
of capital works is forecast to rise over the succeeding
years to a peak of £4.6 million in 1974/75.
1 SECRET
Over half
/the total