GRS 400
IMMEDIATE
DEDIP
CYPHER CAT/A
pcl1974
WKK 10/9
FM HONG KONG 270700Z
DEDIP
SECRET
97
(120 9/10
TOP COPY
18
See subsequent papers
P/A
TO IMMEDIATE F C O TELEGRAM NUMBER 973 OF 27 SEPTEMBER. 1974
SECRET
FOR SIR DUNCAN WATSON.
(115).
YOUR TELS 805 AND 835 AND CDS SIGNAL TO C B F OF 23 SEPTEMBER
DEFENCE REVIEW.
I WOULD PREFER NOT TO PUT A PROPOSITION TO EXCO FOR DECISION:
(A) UNTIL C B F AND I HAVE AGREED SOMETHING WITH WHITEHALL THAT.
WE CAN CONSCIENTIOUSLY RECOMMEND, AND
(B) UNTIL ABOUT MAY 1975, 1.E. UNTIL AFTER THE 75/76 BUDGET
HAS BEEN DISPOSED OF, SINCE THE NEW DEFENCE COSTS AGREEMENT WOULD ONLY APPLY TO '76/'77.
2. THE PROPOSITION YOU HAVE PUT TO ME IS FOR A GARRISON COSTING £38M WITH HONG KONG CONTRIBUTING 75%, OR £28.5M, AN INCREASE OF 350% ABOVE THE PRESENT LEVEL. THIS IS NOT ON.
3. C B F THINKS THAT SOMEHOW AND WITHOUT GIVING UP THE FRIGATE, TO WHICH I ATTACH CONSIDERABLE IMPORTANCE, AND WHILE MAINTAINING THE OVERALL STRENGTH ENVISAGED IN PARA 2, HE COULD SAVE AN EXTRA £4M, BRINGING THE TOTAL DOWN TO NEAR £34M, AND HE IS TELEGRAPHING PROPOSALS TO C D S. BUT I CONSIDER THAT A TOTAL COST OF £34M WITH A HONG KONG CONTRIBUTION OF £25.5M, 1.E. MORE THAN 300% OF THE PRESENT LEVEL IS STILL NOT VIABLE HERE IN EITHER BUDGETARY OR
POLITICAL TERMS.
SECRET
14.