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Mr Wilford

SECRET

Sir G Arthur

cc Mr J E Hansford, Treasury

Mr D Jones, DS 1, MOD

Mr Hockaday, MOD

Mr Bevan, Cabinet Office

Mr Crowson, HKIOD

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14/8 he

DEFENCE REVIEW: HONG KONG

1.

At a meeting in the Cabinet Office yesterday under

Mr Howard Smith's Chairmanship, amendments to the MOD draft

of a telegram to Hong Kong were agreed, subject to the provision of a final detailed breakdown by the MOD of the costs of our forces there which fall to HMG and of the contribution by the Hong Kong Government. It was agreed that this breakdown would be sent as a separate telegram.

2.

I now attach final drafts of the two telegrams (together with a short preliminary telegram to ensure restricted handling of them in Hong Kong). You will see that the detailed figures add up to slightly more than the round figures which had appeared in the MOD's original draft (a total of £33.5 million against the

233 million for costs to HMG and £8.5 million against £8 million for the Hong Kong contribution). With the agreement of the MOD and the Cabinet Office, I have amended the figures in paragraph 4

of the main draft accordingly. HKIOD concur.

Teddy Jackia

J E Jackson

Defence Department

14 August 1974

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