XN000022-1975-12-19 — Page 13

A local force would also be much more expensive, because the

United Kingdom would not contribute anything towards its upkeep. Naval

vessels, helicopters, vehicles, arms and armaments would have to be purchased

by the Hong Kong Government and stockpiles of equipment, stores and

ammunition would have to be maintained to provide the necessary support.

All this would be very costly indeed.

Having accepted that a British garrison is essential, the

Government has investigated in great detail the composition of the

present garrison, in order to ensure that its strength and make-up are

adequate and appropriate to our present needs, and that it contains nothing

which is unnecessary. I believe that this has been achieved, with the

willing co-operation of the Services themselves.

The overall cost of the forces stationed in Hong Kong in the

next financial year will not exceed $450 million - though it would have

been $700 million if we had continued to maintain the same garrison which

was here at the beginning of this year.

Throughout the negotiations with the British Government, we have

argued strongly that Hong Kong's contribution should be kept to a level.

which would affect other essential calls on our public resources as little

as possible.

At an early stage, we were faced with the suggestion that we should

meet the whole cost of whatever forces were stationed here. But our

arguments have been successful to the extent that we shall now contribute half of the cost in the next financial year, rising to 62% in 1977/78 and 75% from April 1978 onwards.

This will