Copy No. 3 of 8 copies Page 1 of 2 pages
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Our Ref: 2-D.M. 415/01
10th April, 1968.
At the Defence Review Working Party's meeting yesterday we discussed what needed to be said about defence in OPDO(DR) (68)5, and the Treasury's point will no doubt be made clear in the minutes.
2.
When we came to the section headed "Military" I said that I would let you have a few suggested additions, but these will be for the record more than anything else since there will no doubt have to be another look at the whole passage when the major defence issue has been discussed in the Committee.
3.
For what it is worth therefore I suggest that the last two sentences of paragraph 17 should now run as follows:-
L
"In the current year of account gross foreign exchange
expenditure on forces in Hong Kong is £11.69m. and
net expenditure after deducting the Hong Kong Government contribution and local arisings is £6.2m.; the total cost to the Defence Budget is much larger. We have in addition to maintain a reinforcement capability and general backing which will become very much more expensive relative to the teeth forces after our withdrawal from Singapore and Malaysia.
In Section H (Conclusions) the first sentence of (a) will also need to be reviewed. I fancy that the total cost of being able to maintain the Hong Kong Garrison will deserve something more than a side-long reference in brackets. The point is of course that, if we were no longer in Hong Kong at all, we should have to consider carefully whether we needed not only the Garrison itself but also at least some of those units which are held at home both for reinforcement and for roulement purposes, not to mention the
The extensive logistic backing which all this requires. attributable costs of our last major military establishment outside Europe could be considerable, and when multiplied by the number of years for which the paper implies that we shall have to soldier on could produce a formidable bill.
5. Whether the making of this point more fully in the paper and in the conclusions will alter the recommendations of the papers is another matter altogether. What I am concerned to ensure at present is that the point should be made so that a decision is reached in the full knowledge of the facts of what it costs us (from the point of view of the Defence Budget) to remain in Hong Kong.
N. C. C. Trench, Esq., C.M.G.,
Cabinet Office,
Whitehall,
LONDON, S.W.1.
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