TNAG-0544-FCO40-639-Strength-of-garrison-in-Hong-Kong-1975 — Page 70

CONFIDENTIAL

There is a further point which I should make,

and

I hope you will not misunderstand me.

There is a large

measure of goodwill for Hong Kong in the United Kingdom.

But, in the context of your defence contribution, the comparison

is inevitably made between your flat rate of tax of 15% and our

much higher rates; and between your contribution to defence

of less than 1% of your GNP and ours of 51%.

Against this background I believe that you would be

endangering this goodwill if Hong Kong were unwilling to

shoulder much the largest part of the cost of the garrison.

The object of the proposal I have made is to adjust the respective financial burdens arising from the defence of Hong Kong so as to enable Her Majesty's Government to

reaffirm her commitment to Hong Kong in a way which takes

account of current economic realities.

So substantial and rapid an increase in your defence

I realise it expenditure cannot be welcome to you.

presents both budgetary and political difficulties.

On

the other hand, the British Government is convinced that if the goodwill and the consent of the British Parliament

and public is to be retained for the British commitment in

Hong Kong, such an adjustment must be made.

I hope

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