TNAG-0255-FCO40-291-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 35

W(B)L 51-7406

NOTHING TO BE WRITTEN IN THIS MARGIN

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the

(The estimatto running cos/5 garrison are set out in Annex A:

the capital costi, including works

Are

namitenance costí,

geven his Annex B)

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followed up by deploying their regular forces

on the frontier, the distinction between

external defence and internal security roles

is essentially an unreal one. The intention

is that the new Agreement should be subject

to review only if the present garrison of

6 major units should be varied by not less

than two major units either way.

6.

I think that we must accept that the

arguments which the Governor can use to

sell his plan in Hong Kong are not necessarily

those which it would be appropriate for us to

use here. He proposes to justify his figure

of £7.5 millions on the basis that the total

estimated local expenditure in 1971/72 of

the whole garrison the estimated recurrent

and capital-eests of which are set out in

Annexes A and B respectively) is of the

order of £13.1 millions, of which he estimates

that half, or £6.55 millions, will represent

economic gain to Hong Kong He will then

argue that Hong Kong should not make a

profit out of the forces sent by H.M.G. for

the defence of the Colony and he will ask

for £6.55 millions plus an element to cover

inflation over the period of a five-year agreement. He believes that it is best to

agree on a fixed figure for each of the five

years, which will not be the subject of an

annual haggle, and is therefore prepared

subject to the advice of his Executive Council,

to seek an annual contribution from his

Legislative Council of £7.5 millions per year,

taking

to take inflation into account.

7.

In addition to this proposed contribution

to H.M.G. s costs it should not be forgotten

that Hong Kong is already spending some

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15 £20 millions.....

15£20