TNAG-0309-FCO40-345-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 69

SECRET

3.30am

109

Secrety & state.

• ED IN R CY No.51

The Private Secretary

1.

I understand that Sir D Trench will be calling on the Secretary of State tomorrow afternoon. The only point of significance at issue between ourselves and Hong Kong at present is the size of the defence contribution over the next few years. The Secretary of State will remember that it was agreed last February that we should go for £8.5 million a year for 5 years. Unfortunately the Governor has been unable so far to persuade the Unofficial Members of the Executive Council to go beyond £7.0 million a year for 7 years. The Governor himself has suggested an average of £7.5 million a year for 7 years and he thinks it likely that a majority of the Unofficial Members of the Executive Council will accept his proposals. He is not so sure however about the attitude of the Unofficial Members of the Legislative Council.

2. In accordance with the decision taken by Ministers last February this question will have to be resubmitted to Ministers. Officials in the Departments concerned are agreed that it should be considered by Ministers collectively in the Defence and Overseas Policy Committee. A submission to the Secretary of State is now being prepared. The main point at issue is whether the Governor should be authorised to try to negotiate a settlement on his own proposals (£7.5 million a year for 7 years) or - as officials in the MOD and the Treasury would like him to do at a level of, say, £8.0 million a year. The brief for the Secretary of State will recommend that the Governor be authorised to negotiate a settlement on the revised terms he has put forward and that there should be no question of using the reserved powers, at any rate until after the Governor has reported on the outcome of his approach to the Unofficial Members of the Executive Council. In addition to the danger of provoking disorders in the Colony (and the Governor could expect little or no public support on such an issue) the imposition of a contribution against the wishes of the Governor's Unofficial Advisers would undoubtedly embitter relations between Hong Kong and HMG for a long time to come

- 5 JUL 1971

никюра

29 June 1971

сс Sir L Monson

Mr Wilford

PA on file AWG 17"

5/7/72

M Gonfi

Eɣlaria

for Laire.

E O Laird

Hong Kong Department

This was not in fact discussed with the Grovemen

7.

SECRET