practical alternative to accepting the proposal. We hope that it
may prove possible to step up the level of such visits. It is
intended in any case to enter a reservation with the Ministry of
Defence that, if the threat of intrusions into Hong Kong's air space
became real, the decision not to station aircraft in the Colony
should be reviewed.
10. Defence contribution
Hong Kong pays a defence contribution of £5 million a year.
The existing agreement is due to expire in 1971 and discussions with
the Governor have now begun as a preliminary to the negotiation of
a new agreement with the Hong Kong Government. The Ministry of
Defence have made it clear that under the new agreement they will
expect a substantial increase in the contribution to the cost of the
post-1971 garrison (estimated at £20 million per annum)
This subject has always been a sensitive issue in our relations
with Hong Kong and the present agreement was carried through in 1966
by Mr. Fred Lee (then Secretary of State for the Colonies) with
great difficulty. The Governor has said that he will be faced with
very strong opposition from his unofficial advisers in negotiating
any new agreement which involves a substantial increase in Hong
Kong's contribution. His present view is that £71⁄2million per annum
is probably the highest figure to which he will be able to get their
agreement. He considers that the best hope of minimising such
opposition lies in first agreeing with us, at the official level, a
figure for the new Hong Kong contribution which will be both
negotiable in Hong Kong and acceptable in Whitehall.
want to be faced with the serious consequences of a high "demand" from
The agreed figure would be put forward as an offer by the
HMG.
He does not
/Hong Kong Government
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