TNAG-0309-FCO40-345-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 72

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for five years from and including 1971/72 (subject

to certain conditions) such a contribution would be

acceptable to Her Majesty's Government. The

figure of £8.5 million was decided upon as being both

the maximum that the Governor might hope to

negotiate in Hong Kong and the minimum that would be

acceptable to Her Majesty's Government.

5. The response of the Governor's unofficial

advisers was totally unfavourable and it was only

after further and prolonged negotiations that they said (with reluctance) that they were prepared to

recommend that Hong Kong should make a "voluntary

token" contribution of £7 million per annum for

seven years. In my view such an offer is not

acceptable.

6. The Governor considers that if there is to be

any hope of reaching agreement, Her Majesty's

Government will have to reduce their demand for a

contribution of £8.5 million per annum over a five

year period.. He considers that it might be

possible for him to negotiate a settlement on the

basis of a contribution averaging £7.5 million per annum over a seven year period, coupled with certains

attendant conditions.

7.

us:

The following courses are amongst those open to

(a)

(b)

To stand out for a contribution of

£8.5 million per annum over a five year

period.

To authorise the Governor to attempt to

negotiate a settlement at a figure

between £7.5 million and £8.5 million per

annum (preferably for a five year period).

G

2 SECRET

/(c)