SPEAKING NOTES
SECRET
UK EYES A
DEFENCE REVIEW: HONG KONG
(201
208)
1.
When the Defence Secretary's minute MO 5/14 to the Prime Minister is taken at the meeting of OPD on 22 July, the Secretary of State may wish to make the following points:
(i) The reduced garrison described by the Defence Secretary
should be accepted as the basis for cost agreement negotiations with the Hong Kong Government.
(ii) Our first aim should be to get Hong Kong to pay 75% from the outset. This may be very hard to achieve. With inflation, it would involve a one step rise of some 200% in the Hong Kong contribution. It is the
next two years which are difficult economically for Hong Kong as well as the United Kingdom and a graduated scheme has much to recommend it. A margin of flexibility is required and our tactics should be as described in paragraph 5 of the Defence Secretary's minute.
(iii) The Chief Secretary's suggestion that we should look
again at the size of the garrison if we do not achieve 75% immediately gives ground for concern.
We are already cutting the garrison by one-third and must have regard to possible destabilising effects in the Colony if the garrison were to be reduced below the minimum level considered necessary by the Chiefs of Staff. would be no way of concealing this from the local population.
There
SECRET UK EYES A
/(iv)