SECRET
UK EYES A
avoiding too sudden an ine erse in the cost to thot of a Puste
force.
Questions for corsiueration
8.
Ministers are, therefore, asked whether they agree that a
study should now be made with Hong Kong of the implications
of a garrison costing about £35M, on the basis that such a
garrizon might form an element of a compromise agreement with
Hong Kong
9. But, whether such a garrison were acceptable or not, there
will still be a gap between Ministers' desire that Hong Kong
should pay three quarters of the cost and the Governor's figure
of 217M, which would be about half of the cost of a £35M garrison
and rather less than half of the cost of the £40M garrison. Do
Ministers agree that an attempt should be made to bridge the gap
from both ends? Two possible ways of achieving this would be:
(a) to increase both the UK and Hong Kong offers, e.g.
to one-third and two-thirds of the cost (12M and £23M
respectively for a £35M force, or 13 and £273 for a
£40M force) or;
(b) to increase the proportion paid by the Hong Kong
Government over a period of an Agreement lasting say
5 7 years from £17M in the first year (about half of
the cost of a £35M garrison and rather less than half
of the cost of the £40M garrison) to three-quarters of
the cost at the end of the period.
Would Ministers agree that we should start negotiations on the
basis of (a) above and work out illustrative graduated schemes as
at (b) above as a fall back position?
10. If Ministers agree, a report on the implications of a £35N
will be made, and a decision on guidelines for negotiation sought,
with the objective of reaching agreement with Hong Kong in May SECKET
-11-
UK EYES A