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to get ExCo or LegCo to agree to pay more for a smaller garrison. In response to an enquiry he said that he thought ExCo might just agree to pay substantially more for a garrison of the same size, but only if they judged it absolutely essential. Distinctions presently being made between the requirements of internal security
and those of an external threat were somewhat unreal. Since the
garrison was last deployed the present risks had decreased. But future developments in China were quite unpredictable. It was
therefore hard to assess the real threat. If financial demands
on Hong Kong for the garrison were too high, the budgetary position would become impossible. They no longer enjoyed their former budgetary surpluses. Under pressure from the UK, expenditure on social services was being increased; there had already been some tax increases, and more were foreshadowed. Mr Bayatt pointed out that HMG also had substantial plans for social expenditure; they too had had to make tax increases and had severe balance of payments difficulties. Ministers had decided that defence priorities lay in NATO; Hong Kong was on the fringe. Sir D Watson said that Hong Kong would of course point to UK constitutional responsibilities for the Colony.
3.
Sir M MacLehose emphasised that social expenditure in Hong Kong was very low compared with that in Britain. There would be a row if it had to be reduced. But the costs of the garrison to HMG could be reduced, perhaps to half, e.g. by reducing the proportion of United Kingdom troops in relation to Gurkhas and by cutting down in the various Headquarters. The important thing was to ensure that there was sufficient force to prevent trouble from ever starting. Hong Kong had been taking some measures of their own. They had doubled the auxiliary police. They might be able to improve the Hong Kong regiment. The presence of the frigate was important. Under the New Territories lease, Chinese warships could use Mirs Bay and Deep Water Bay. Their ships could outgun the small British patrol boats. He had twice had to send the frigate to prevent incidents. Without the frigate, Chinese gunboats could, for instance, recapture Chinese who had sought sanctuary in colonial territory.
4.
Sir M MacLehose then said that, once the matter had been put to him in writing, he could probably reply within a week. There
/might well
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