SECRET
ANNEX G TO XCS(71)12
Office of Unofficial Members of Executive and Legislative Councils
Windsor House, 3rd floor,
Des Voeux Road C.,
Hong Kong.
27th May 1971
Tel. 243067
Dear Sir David,
The Unofficial Members of the Executive Council have asked me to thank you for your letter of 25 May 1971 on the subject of the Defence Contribution, and to reply as follows.
The Unofficials regard many of the arguments put forward by
the Secretary of State as unacceptable.
3.
They note that the Secretary of State has not commented at all on two specific matters. The first of these concerns the Hong Kong airport, see paragraphs 8 and 9 of their Memorandum of 27 February 1971. The second concerns the tariff system which is to replace the UK quota system from 1 January 1972, and as the result of which HMG will obtain £4 to £5 million per annum from Hong Kong's cotton shipments to the UK.
4.
Nevertheless, the majority of the Unofficial Members (one dissenting, and one being at present out of the Colony), are prepared to recommend the making of a voluntary token contribution. The recommend- ation, which is made after careful consideration of all the circumstances, and represents in the view of the Unofficials the maximum which Hong Kong can afford in accordance with paragraph 14 of their Memorandum, is £7 million a year for each of the next 7 years, making a total of £49 million over the period.
5.
6.
Hong Kong:
The making of this recommendation is subject to two provisos.
The first is that, out of the total sum to be contributed by
(a) A sum of not less than £17 million is to be spent on
capital works in Hong Kong; and in addition
(b) A sum of not less than £15.4 million (£2, 2 million
a year) is to be spent on maintenance in Hong Kong, this sum to represent Hong Kong's maximum contribution for the period towards maintenance costs, any deficit to be met by UK funds.
HE Sir David Trench, GCMG, MC
Governor of Hong Kong
Government House
HONG KONG
SECRET
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