SECRET
to pull a battalion out of Hong Kong to do it could give
ammunition to those claiming that the Army continues to be
overstretched. Again, if this was done at a time of Sino-UK tension, the government might face charges of abandoning Hong
Kong.
Financial implications
8.
If we withdraw a UK battalion from Hong Kong, we will
immediately lose the 65% of its full costs that the Hong Kong government meet under the DCA. This amounts to about fllm per year. Pulling out the battalion will lead to some savings in support, eg the closure of Stanley Fort, some educational facilities and possibly the British Military Hospital and
reduction in logistic support, but to the extent that the UK units and personnel affected are simply redeployed rather than disbanded a similar problem of lost receipts will apply. This would be offset by savings from those UK and Gurkha support units which were disbanded and from locally entered labour released earlier than planned, amounting to 35% of their full costs though the up front costs of redundancy would need to be taken into account. Without a good deal of detailed work it is not
possible to establish what the overall balance of these
additional financial changes would be but they may not offset the
loss of receipts from the DCA of bringing a battalion back to the UK. In addition, there may be unquantified costs associated with finding accommodation for the battalion, eg from retaining
barracks which would otherwise be alienated.
9. From a Hong Kong government point of view however, this course of action would lead to major financial savings which they would embrace with open arms. It is also worth pointing out that the
Hong Kong government may force us
into major additional expenditure by simply refusing to pay their full share under the DCA and in effect cash limiting the size of the garrison or forcing the MOD to pick up the difference. They are already in
Х
SECRET