TNAG-0182-FCO40-218-Defence-contributions-1969 — Page 61

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the end of the matter since the Governor must seek the

advice of his Executive Council and, to secure the funds,

must obtain the sanction of the Standing Finance

Committee of Legislative Council.

Although in the normal course of events we would not

be making the preliminary moves in negotiations for a

fresh agreement until mid-1970, I favour an early start

with the Governor. We may have to wait some time for his

first proposals and there could be lengthy exchanges with

him. The timing of the approach to unofficials is another

this will have to be decided nearer the time we

are ready for this step (the longer we put between it and

the recent decision to impose a tariff on Commonwealth

cotton textiles the better).

matter;

(b) In further discussion with the MOD and Treasury, we

explore the basis on which the contribution might be

calculated and consider to what extent we give the Governor

any hint or guidance on this point.

Because his

unofficial advisers are antipathetic to the doctrine that

a Colony contributes to its own defence according to its capacity to pay (see paragraph 5 of Background), the

Governor has for some time now been searching for a

rationale on which to base the Hong Kong contribution.

In 1964 he presented the agreed additional contribution

as a measure of assistance towards the military capital

works programme. In 1966 we asked Hong Kong to pay the

entire "local costs" of the garrison (about £11 million

p.a.) and the eventual agreed contribution was

represented in that light, having regard to the difficult

/UK balance

...