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to which the public And I think the more
this Government are committed and attach the greatest importance. relevant statistic is that the proportion of the GNP taken by the public sector has to about 20% in 3 short years. to you the pressures that such increased social spending are placing on the economy.
increased from about 15%
It will be apparent
Budgetwise the figure of $350 M simply
cannot be accommodated.
Nor could an increase of these
dimensions be explained to the public. Under the current agreement to which after all HMG is a party, Hong Kong's contribution in 1975/76 is estimated at $110 M for a garrison of 6 2/3 units. With respect it is not reasonable for HMG to expect the Hong Kong Government to more than treble this in a year for a garrison of 4 1/3 units. And the public at large would have no confidence in a government that agreed to do so.
Although the Hong Kong Government is not elected, I think it is far too little understood in Westminster that it is subject to just the same pressures as elected governments are. It must retain consent. In UK political terms this is a very small matter. But in Hong Kong political terms it is a very big one, and can be exploited in particularly unpleasant and emotive ways. It lends itself to joining with other quite unconnected but equally emotive issues such as HMG's frustration of the application of the death penalty in Hong Kong and restrictions on Hong Kong's exports and thus boil up into a major crisis of confidence in the UK.
I must repeat most strongly we cannot
both preserve our credibility and agree to such a proposition, and you will accept that I have steadily so advised HMG in this sense, and am most disappointed that my advice is now disregarded.
A garrison and a British contribution to the garrison are essential for Hong Kong. I have never denied that an increase in Hong Kong's contribution was due.
It was my view that the correct cost sharing arrangement would be 50:50. While this would have nearly doubled the contribution of Hong Kong, it would
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