TNAG-0368-FCO40-414-Visits-of-UK-Government-Ministers-to-Hong-Kong-1973 — Page 147

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CONFIDENTIAL

BRIEF NO. H.K.5

HONG KONG DEFENCE CONTRIBUTION

1. In October 1971 the Governor secured the agreement of his Executive and Legislative Councils to an increased Hong Kong Defence contribution covering the period 1 April 1971 to 31 March 1976. This rises from £7.5M in 1971/72 to £8.5M at the end of the period producing an average annual contribution of £8M. The previous arrangement provided for an annual contribution of £51.

2. Under the present agreement, £2.4M is paid in cash and the remainder takes the form of the provision by the Hong Kong Public Works Department of both capital works as well as minor works and maintenance.

3. Hong Kong has paid an annual contribution to "imperial" defence since 1863. It was against a background of rising costs for HMG in Hong Kong (the estimated running cost of all Service units in the Colony for 1972/73 is about £28M) that difficult negotiations were conducted over two years to secure this latest increased contribution.

4. This is not a current issue and no questions are anticipated.

CONFIDENTIAL