7.
SECRET
UK EYES A
preecucnt .m. could put our interests in long hong
under severe strain.
(b) To accept a Hong Kong contribution of £17M a year,
linked to the minimum defence assessment of £40M.
This would however mean a Hong Kong contribution of
little more than 40%. It would also mean that 23M
instead of the £10M assumed under a 25% UK contribution
would have to be found within the severely reduced Defence
Budget.
(c) To reduce the size of the garrison still further.
The Governor proposes, reluctantly and very much as a
second-best, that we should consider a further reduction
in the garrison to a cost of about 235M and a size of
perhaps 43 teeth-arm units. The total implications of
such a garrison for the security of Hong Kong would have
to be studied. Linked to the proposed Hong Kong
contribution of £17M the arrangement would imply the
UK paying more both in proportion (50% rather than 25,1)
and in cash (£17M rather than £10M) than Ministers'
preferred option. On the other hand it would not give
Hong Long a majority interest in defence matters affecting
the garrison.
(a) To cut the cost of the garrison to a point at which a
Hong Kong contribution of $17M would represent 75%.
In capability this would fall far short of what is secn
as the minimum military requirement.
Whatever figure is fixed, the Governor would be prepared to
consider a graduated contribution, with less paid in the early,
more difficult, years and more later to achieve the agreed average.
This would have the savantage, from Hong Kong's point of view, of
SECRET
UK EYES A