in Hong Kong. The Governor was accordingly told that he could have the two extra regiments provided the Hong Kong Government was prepared to meet this extra cost.

8.

There

The Governor replied to the effect that to ask the Hong Kong Legislative Council to meet the extra cost of these two units would create a bad and lasting impression. is moreover an implication in his reply that even the contribution of £1m. which Hong Kong now makes annually towards the cost of defence might be reduced in face of the reduction of the garrison to six units; in this connection it is to be noted that the extra cost of maintaining six units in Hong Kong over the cost of keeping them in Britain is some £3.5m. a year. The Governor suggested, however, that he might be able to persuade the Council to agree to continue the £1m. contribution for the next five years and to pay half the additional cost of maintaining the two extra units in the colony provided the War Office gave up any claim which it might otherwise have in respect of War Department land to be vacated by the Navy on the closure of the Hong Kong dockyard. The commercial value of this land is some £3m.

9. In my view, in our present economic position, this offer is unacceptable. If the Government of Hong Kong do not attach sufficient importance to the two additional units to be prepared to pay the bill, I think that we should stand by our previous decision to limit the garrison to six major units. I do not think that we should be prepared to compromise with the Governor on this.

The Royal Air Force

10.

To meet the Governor's strong desire that at least a modest show of air power should be left in Hong Kong, I propose that one flight of three Venoms from the squadron in Malaya should be maintained in Hong Kong.

11. The Secretary of State for Air is examining the possibility of meeting a suggestion of the Governor that Canberra bombers from Singapore should make short visits to Hong Kong from time to time.

CONCLUSIONS

I invite the Defence Committee to agree:-

(a) that one frigate and six patrol vessels (minesweepers)

should be maintained in Hong Kong;

(b)

(c)

that one or two extra artillery regiments should be retained temporarily in Hong Kong, provided the Govern- ment of Hong Kong is prepared to meet the extra annual maintenance cost and the capital cost of preparing accommodation for them; but that if they will not do so, the garrison should be reduced to six units as previously decided; and

that a flight of three Venom aircraft should be retained in Hong Kong.

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January 1st, 1958

Page 272

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