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UK EYES A
order to keep the figure down to £40M from the start.
Hong Kong's contribution
5. The Governor's firm Lavice is that he could not get
the agreement of Executive and Legislative Councils to a
proposal to contribute more than £17M a year (Estimates 1975/76
prices). Such a contribution would in cash terms be about
double the annual average contribution under the present
Agreement. The Governor believes that a higher contribution
would be unnegotiable in present economic and political
will have to close circumstances in Hong Kong, which
a budgetary Esp of
about £200M (30% of total revenue) in 1975/76.
le agrees that
the present contribution is unreasonably low, but advises that
to do more than double the contribution for a reduced force
would be unacceptable to public opinion in Hong Kong, which is
already resentful of other policies imposed by HMG. e.8. on
the death penalty. Even a contribution of £17M might be
acceptable only if it was seen that the maximum economies had
been obtained. This might mean cutting total costs below £4OM.
The Governor accepts that Hong Kong's contribution should be
adjusted annually for changes in pay and prices.
Courses open.
6.
The Governor's advice leaves four courses open:
(a) To plan for the reduced garrison costing £401 and,
despite the Governor's advice, to continue to press
Hong Kong to contribute 75% of the cost, i.e. £30M.
This would conform with the minimum defcnce require-
ment to meet the full commitment and with Ministers'
preferred option. But, if the Governor's advice is
correct, it would be likely to be rejected by Hong
Kong's Finance Committee, a wholly unofficial body.
override To ee the self-supporting Hong Kong
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UK EYES
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