IMMEDIATE CYPHER/CAT A
GRPS 1000
FM F C O 158930Z
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The the Governor, 55.D.wrlin, Si f. Arthur & MOD. Trenemy reps m 9 August. You may wish to (DP) with out the relates fafer.
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TO IMMEDIATE HONG KONG TELNO 718 OF 15 AUGUST 1974, thight H.K. shoul
STRICTLY PERSONAL FOR GOVERNOR.
DEFENCE REVIEW: HONG KONG
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1. AS YOU KNOW, THE PRINCIPLES UNDERLYING THE DEFENCE REVIEW
ARE
(A) THE GOVERNMENT'S DECLARED POLICY IN BRITAIN'S PRESENT.AND PROSPECTIVE ECONOMIC SITUATION THAT DEFENCE EXPENDITURE SHOULD BE REDUCED BY SEVERAL HUNDRED MILLION POUNDS A YEAR OVER A PERIOD:
AND
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(B) THEIR DECISION TO GIVE FIRST PRIORITY TO THE SECURITY OF THE UNITED KINGDOM, WHICH IN TURN RESTS UPON OUR MEMBERSHIP OF THE NORTH ATLANTIC ALLIANCE.
2. AGAINST THIS BACKGROUND MINISTERS ARE GIVING CLOSE CONSIDERATION TO THE CONCEPT OF A CRITICAL LEVEL OF MILITARY CAPABILITY WHICH IN THE JUDGEMENT OF THE CHIEFS OF STAFF REPRESENTS THE MINIMUM BRITISH CONTRIBUTION OF FORCES TO NA TO BELOW WHICH THE CREDIBILITY OF NA TO'S STRATEGY OF DETERRENCE, FLEXIBILITY IN RESPONSE, AND FORWARD DEFENCE COULD NO LONGER BE PRESERVED. THIS CONCEPT INVOLVES VERY CONSIDER ABLE REDUCTIONS IN THE ARMED FORCES AND THEIR CIVILIAN AND INDUSTRIAL SUPPORT, WILL NOT BE EASY TO PRESENT TO OUR # A TO ALLIES, AND COMES CLOSE TO THE MARGINS OF SECURITY OF THE UNITED KINGDOM ITSELF.
3. MINISTERS HAVE DECIDED THAT A CORRESPONDINGLY STRINGENT APPROACH MUST BE TAKEN TO OUR MILITARY COMMITMENTS OUTSIDE NA TO WHERE POSSIBLE THESE WILL BE ABANDONED ALTOGETHER: WHERE THIS CANNOT BE DONE THE STRICTEST ECONOMY IS TO BE ACHIEVED, MINISTERS ACCEPT A NEED, SO LONG AS HONG KONG REMAINS A BRITISH COLONY, TO RETAIN A GARRISON THERE TO ACT IN SUPPORT OF INTERNAL SECURITY AND TO MAINTAIN PUBLIC CONFIDENCE. BUT THEY TAKE THE VIEW THAT HONG KONG. SHOULD PAY FOR THE FORCES STATIONED THERE. IT HAS BEEN NOTED THAT THE PRESENT FINANCIAL ARRANGEMENTS EXPIRE IN 1976, AND THE VIEW HAS DEEN EXPRESSED THAT THE HONG KONG GOVERNMENT SHOULD BE TOLD THAT WE WOULD PROVIDE. FORCES ONLY TO THE LEVEL FOR WHICH THEY WERE PREPARED
TO PAY.
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