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event of simultaneous disturbances in the old urban areas, the new town and rural areas and the land and sea borders. This weakness could be mitigated if there were some readier reinforcement capability than could be expected from the United Kingdom following the Defence Review.
3: The Chiefs of Staff have generally endorsed these conclusions. In particular they consider, in the new situation of deferred withdrawal from Brunei, that for so long as a battalion remains in Brunei as local reinforcement (until mid 1978 on present assumptions), with slower reinforcement available from the UK, the garrison in Hong Kong need only include four stationed Infantry battalions, one of them a British battalion. They also believe that the Engineer requirement will be best met by a Gurkha field squadron and its Training Wing and the Naval presence by a frigate. The resultant garrison is shown at Annex A and would cost £33.5M a year. It does not include Naval patrol boats or an artillery battery, which would have military advantages but could not be justified as essential; should the Hong Kong Government, however, wish to retain these elements they should bear the full costs. A garrison of the recommended size involves increased risk, although at present it is considered that there is little likelihood of simultaneous disturbances without prior warning; and the threat must be kept under regular review. The position will have to be reviewed prior to the withdrawal of the battalion from Brunei.
The Hong Kong Contribution
B
4. The Governor has taken informal soundings of the unofficial members of the Hong Kong Government and has reported that his earlier view remains valid that the maximum that Hong Kong can be brought to pay in 1976/7 (the first year of the new Agreement) is £17M that is, only about half of the cost of the suggested garrison. His view is that the major social programmes now in hand, at a time of recession in the Hong Kong economy, make it impossible to meet any more greatly increased defence bill. The Governor indicated that it might be possible to negotiate a graduated arrangement providing for a steadily increasing Hong Kong contribution rising from one half to three quarters over seven years. It has been agreed with the Hong Kong Government that the agreement will separately make provision for inflation.
5.
Despite the Governor's assessment, I believe that in view of the current pressures on the Defence Budget we should stand fast by the negotiating aims which emerged from our consideration earlier this year.
We should aim first to get Hong Kong to pay a full 75% from the start of the new agreement. If this proves not to be possible, we should be ready to move to a graduated scheme no less
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favourable
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UK EYES A UK EYES A