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3.
(f)
Mr. T. K. Ann said that it was very unlikely that Hong Kong's future rate of progress would be the same as in the past for reasons such as the greatly increased bill for the import of oil products.
(g) Mr. Sayer thought also that it would be wrong to make assumptions about the future rate of economic growth. He pointed out that by U. K. standards there was still a great deal of poverty in Hong Kong
(h) Mr. P. G. Williams pointed out that the proposed contribution represented about £1 per family per week.
(i) Mr. T. S. Lo said that it could not be assumed that revenue would increase in direct relationship to an increase in taxation.
(j)
Mrs. Joyce Symons referred to the Minister's mention of the large measure of goodwill for Hong Kong in the U. K. She did not think it would be difficult for HMG to explain Hong Kong's difficulties to the U. K. public and pointed out that good- will could be impaired by trade jealousy.
(k) Mr. Francis Tien also said that goodwill worked both ways, and referred to the abolition of Commonwealth Preference and the exclusion of Hong Kong from the Generalised Preference Scheme. He thought the contribution should be phased, as an immediate increase to 75% of the cost of the garrison was un- acceptable and would be likely to have a harmful effect on the relations between the U. K. and Hong Kong.
(1) Dr. Harry Fang said that it would be difficult to explain a very large increase in the Hong Kong defence contribution at time when there were restrictions on expenditure in the social welfare field.
(nd) Mr. T. S. Lo preferred an agreement on a continuing basis.
4.
The text of the Governo;s reply to the Minister's statement is at Annex B.
Security Branch,
Colonial Secretariat,
Hong Kong.
1st November, 1975.
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