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3.
Provided there is a degree of negotiating flexibility, the Governor is confident that we can induce Hong Kong to pay a larger proportion of the cost of a reduced garrison. His present view is that, by cutting out the rapid reinforcement capability, by reducing the garrison to around five major units, by disposing of some of the more expensive arms such as the artillery which are not relevant to internal security, and by keeping a large proportion of Gurkhas in the garrison (who cost about one-quarter per head as much as British soldiers), the overall cost to HMG could be halved, while the Hong Kong Government could, in absolute terms, pay around its present contribution of £8 million per year.
There is room for manoeuvre in this. An alternative scenario
would be to persuade Hong Kong to pay half the cost of the
garrison, which might involve some increase in their £8 million. But the Governor is having problems with the financing of his social programme, in which he has been strongly supported by HMG, and any substantial increase above £8 million would cause him great difficulties.
4.
I therefore recommend that the Secretary of State should, in discussion with his colleagues, seek to persuade them that:
(a) The overriding need is to maintain a garrison in Hong Kong sufficient for internal security. (b) We should try to get the Hong Kong Government to pay
a greater proportion of the cost of that force than
at present, but we shall have to bear some of it
ourselves.
22 July 1974
Сс
PS/PUS
Mr Wilford Mr Male Mr Thomson
ACD
A C Stuart
Hong Kong & Indian Ocean Dept.
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