SECRET

UK EYES A

to indicate options which could lead to a compromise between the three factors set out in paragraph 6: no signficant savings were found in the estimated cost of the "reduced" garrison

arm

(53 Army teeth/units), though the implications of further cutting the size and cost of the garrison were discussed in general and illustrative terms; the Hong Kong representatives put forward no strong arguments, related to the costings, which in themselves might prompt Ministers to consider any significant

increase in the proposed UK contribution; and the Hong Kong

had no discretion to discuss representatives zkole showed no flexibility on the question of

Hong Kong's contribution. In other discussions, however, with

the Governor, the Financial Secretary and CBF, a number of

points were made which are relevant to these issues/

(a) It was emphasised that the proposal of HMG to reduce

both the UK forces in Hong Kong and the UK's

proportionate contribution to their cost was clearly

being seen by 'unofficial' and public opinion as a

withdrawal by the UK, at least in part, from the

responsibilities for maintaining the security of the

colony which she has accepted in the past.

were made

(b) This apparent withdrawal could reduce deterrence of

internal disturbance and, also, weaken business

confidence and so the economy.

(c) The attitude adopted by HMG was resented the more by

the 'unofficial and the public because HMG was

simultaneously being seen in other areas to impose

policies which were contrary to the wishes of Hong Kong. eg. the death penalty.

SECRET

UK EYES A

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