TNAG-0255-FCO40-291-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 42

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was 31 per cent of the corresponding costs at that time. If held at a fixed amount for five years, as the Governor proposes, it would decline substantially in real value; indeed, if a works programme is carried out as forecast in Annex B to the Foreign and Commonwealth Secretary's paper, the contribution would amount to no more than 27 per cent

in 1974/75.

c.

in present circumstances we cannot lightly forego any contribution towards reducing the burden of public

expenditure.

d. the Governor has suggested that the new agreement should be subject to review only if the present garrison is altered by not less than two major units either way. I do not consider that, in return for so small a cont- ribution as £7.5M, we should bind ourselves for the next five years not to raise the question of an increased contribution should it become necessary to increase the

present garrison.

Having regard to these points, particularly the second, it does not seem unreasonable to expect a contribution sub- stantially larger than that proposed.

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4. As regards the amount that should fall on the Defence Budget, the difference between the amount of Hong Kong's contribution and the cost of internal security represents a

I note that the Governor subsidy to a self-governing colony. considers that the distinction between internal security and

If so, the contribution external defence is somewhat unreal.

can only be compared with the cost of the total garrison or with some other estimate of the forces required for internal

Whatever the comparison, there can hardly be any dispute that the value of what the Colony is getting is much

in excess of £7.5M a year.

security.

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