TNAG-0309-FCO40-345-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 169

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4.

Any contribution voluntarily offered by Hong Kong

would be subject to reduction if there should be a seriously

adverse change in the Colony's economic situation.

The Governor has recommended that the reply to the

Unofficial Members should:-

(a)

cover the points which are felt not to have been

covered,

(b) go a very considerable way towards accepting the

principles to which they attach so much importance.

(c) encourage them to come into the open with some

proposal of their own.

He has suggested that the reply should follow the outline

contained in his telegram No. 250.

5. In response to our request for any further information he

could give us about the thinking of the Unofficial Members, the

Governor suggested that it might help if we extended the term

of the proposed agreement from 5 years to 7 years.

This idea

does not appeal either to the Treasury or to the Ministry of

Defence. Both Departments feel strongly that HMG should obtain

not less than £42.5 million over the next 5 years and that for

any term in excess of 5 years the average annual rate would need

to be significantly more than £8.5 million.

6. I agree with the Governor that we must now encourage the

Unofficial Members to come into the open with some proposal of

their own. The attached three telegrams (which are based on the

Governor's outline) have been drafted with this aim in view;

at

the same time it has been made clear once again that £8.5 million

a year over 5 years is the very minimum contribution to which HMG

2.

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