CONFIDENTIAL
ANNEX B
GOVERNOR'S STATEMENT AT MEETING WITH MR. W. RODGERS
AND UNOFFICIAL MEMBERS OF EXECUTIVE AND LEGISLATIVE
COUNCILS, 28.10.75
I should now like to reply to the Minister
of State's explanation of HMG's position.
I must say immediately that the Hong Kong Government is deeply concerned at the size of the figure HMG is demanding, and at the apparent rigidity
of the views held in Whitehall that it is within Hong Kong's economic and political capacity to pay..
But before going into that, I would like to speak about what I might call the positive side of your statement.
I very much welcome HMG's acceptance
that Hong Kong is a special case, and that this requires a United Kingdom contribution to the garrison in both men and money. This is certainly necessary if an adequate degree of confidence is to be maintained vis-a-vis
Peking, vis-a-vis the population of the Colony and vis- a-vis the investing public both local and foreign. latter is not unimportant because without their confidence and support employment will fail and Hong Kong will rapidly become a city of mounting anxiety and, and I stress this, ultimately become a liability to HMG.
The
Equally we welcome your assurance about the possibility of reinforcement, because we live in uncertain times, and on the edge of major changes in leadership in China, which through uncertainty or other causes could affect the present tranquility of the Colony.
On the negative side I must tell you very frankly that IMG's insistence on their contribution being limited to 25% presents my government with appalling and so far as I can see at this moment insuperable difficulty.
It is natural that you refer to the comparatively low level of standard tax rates in Hong Kong, even though it may also have occurred to you that there may be some connection between these and the rapid economic growth of the Colony to which you refer. we have rapidly expanding social programmes to which
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