TNAG-0255-FCO40-291-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 72

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Hong Kong Delence Contribution

At the end of the day the size of the contribution will be determined by what the Governor can persuade the Unofficial Members of Executive and Legislative Councils to accept.

2. The alternative approach involving instructions to the Governor to force through a contribution at a level unacceptable to the Unofficial Members could only lead to a major political crisis,

the conseque ices of which could be most seriou: for HMG

3. It was for this reason that all agreed with the (lovernor';; suggestion that he should attempt to work out a figure (cn the basis of material supplied by the MOD) which would be both

acceptable to HMG as a reasonable contribution and also negotiable in Hong Kong as an offer from the Hong Kong Government rather than a response to a demand from HMG. On this basis the bargaining would be between the Governor and his official British

advisers on the one hand and the Unofficial Members of the

Councils on the other, rather than between HMG and the Hong Kong Government.

4. The problem therefore is to settle the size of the con- tribution for which the Governor should argue. This must be a matter of judgement.

5. We have discussed with the Governor and he has explained · (a) Having regard to the difficulties experienced during the negotiations in 1966 and to the present climate of opinion in the Colony, and in the absence of full figures of the costs incurred by HMG (Sir L. Monson's letter to the Governor of October 1969) he judged that the figure we should go for was £8 million a year based on a Garrison of 73 major Army units. (b) The Financial Secretary had independently arrived at a slightly lower figure, basing himself on local expenditure by Hi Armed Forces and assuming that half of that expenditure woul‹l be of direct economic benefit to Hong Kong and should therefore be paid by the Colony.

(c) Because it was impossible to distinguish between internal

security and external defence the best way of convincing the

Secret

/Unofficial