TNAG-0182-FCO40-218-Defence-contributions-1969 — Page 40

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Draft letter from Sir Leslie Monson to Sir David Trench

In his letter (HKK 10/9) of 31st July, Carter mentioned

that I would be writing to you about the negotiation of the

pöst-1971 defence contribution. As he indicated, we think

your suggestion of preliminary exchanges at "official" level

to be a very good one, but you will want to consider the

matter with knowledge of how we see the problem at this end.

2.

When you had your discussion with the Defence Secretary

on 25th June you knew, I think, that the garrison which had

been proposed here consisted of 73 major Army units, 5 mine

countermeasure vessels, 2 frigates, a Whirlwind unit and

RAF general support (together pork with a Hunter unit),

but you have not been told the costs of such a force.

3. I attach at Annex A a schedule of the forces proposed

and the best estimate we can make of their costs, from which

it appears that the running costs in 1971-72 would be about

£20M a year. (This compares with running costs of about

£15M in 1966.) The cost would increase if the proportion of

British troops in the garrison were increased. The schedule

does not allow for any price increases between now and 1971

(let alone during the currency of a new agreement) nor for the

increased cost of the new Service pay structure which is

expected to be introduced next year but which we cannot yet

cost.

In addition to the running costs in Hong Kong there.

would of course be the very considerable running costs of

the support provided by the United Kingdom base and the

Gurkha L. of C. I also attach at Annex B a forecast of

expenditure on capital works which again would be subject

to increase if the proportion of British troops in the

garrison increased. (In connection with capital works

/ I

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