"SECRET UK DIES
BACKGROUND NOTE
1. The present garrison costs about £40M at Defence Review
(LTC 1974) price levels (and about £50M at Estimate 75/76 price levels The Defence Review price level has been adopted for the Answerie with previous practice.
2. Under the present Defence Costs agreement the Hong Kong
Govt. undertook to pay a total of £40M, spread equally over
5 years, towards the cost of the garrison; this has been
supplemented by a separately agreed payment in respect of inflation of works costs so that the payment in 1975/76 will be about £10M.
3.
4.
The Defence, White Paper said:
!
"In Hong Kong there will be some reductions in British Servicemen and locally-enlisted personnel; and we are seeking from the Hong Kong Government a larger share of the cost of our forces when the present cost-sharing agreement, which expires in 1976, is re-negotiated.
Ministers decided last year that the size of the Hong Kong Garrison should be reduced, and that Hong Kong should be required to pay three-quarters of their costs. The Chiefs of Staff assessment of the required future garrison was costed at £40M p.a. and this estimate was the basis of subsequent discussions in London and Hong Kong with the Governor and his officials; as a result of which a financial gap was identified between the Governor's assessment of the maximum that Hong Kong could be brought to pay and three-quarters of the cost of the reduced garrison. Ministers approved that a study should be made of the full implications of a further reduction in the cost of the garrison, as an element in a possible compromise agreement, which might also include a compromise financial arrangement, and the report of the joint British Forces/Hong Kong Government Working Party which conducted the study has now been considered by the Chiefs
They of Staff who have agreed that, with assured local reinforcement from Brunei, the garrison can be reduced to comprise 44 Army teeth arm units, a frigate, and an RAF helicopter squadron. a garrison would cost £33†M. The MOD is now consulting FCO and Treasury about the terms of a further submission to OPD seeking
Such
SECRET UK EYES