TNAG-0183-FCO40-219-Briefs-for-Ministry-of-Defence-Ministerial-visits-1969 — Page 85

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The Future Agreement

5. In May 1968 you proposed to DOPC that as a result of the withdrawal from Malaysia and Singapore, there should be an in ease in the Hong Kong garrison. You also proposed that Derence Votes should be reimbursed for the full budgetary costs of those parts of the garrison which are for internal

Security. These have been estimated at about £M15 annually. DOPC agreed your proposals for the future size of the garrison but deferred the consideration of where the costs should be borne. They also asked for the best assessment to be made of the full cost to us of the Hong Kong commitment. It is in fact extremely difficult to assess accurately the full cost to us of the Hong Kong commitment in terms which would show what savings would result if the commitment were dropped, since this would involve a re-assessment and costing of force structure and support which we should need without the commit- ment. There are three possible yardsticks:

a. At one end of the scale there is the cost of that element of the forces provided for internal security purposes in Hong Kong; something between £M10 to £M15 a year perhaps offset in the carly years by the additional capital costs of providing accommodation elsewhere;

b. The costs of the total future garrison as approved by DOPC is about £M25 a year;

C. Taking a maximum case which would assume cuts in our forces extending beyond those in Hong Kong the figure could be about £M40 a year.

These figures have been given to the Treasury with an indication that they need to be taken with a great deal of reservation. In fact the Ministry of Defence consider the highest figure to be unrealistic.

6. It is likely that it will be extremely hard to persuade the Hong Kong Government to increase their contribution to nearly three times the present figure, which was itself only agreed after nine months of negotiations. Agreement will first need to be reached in Whitehall on the contribution we should seek and negotiations with Hong Kong for a new agreement will probably have to start in the first half of 1970. However, the sum which we would hope to recover will depend very largely upon the composition of the Army element The of the garrison after 1971, and this is not yet known. composition of the garrison is tied up with the future of the Brigade of Gurkhas after 1971 on which no decision has yet been made. Nor has it yet been decided whether if British units are to take the place of Gurkha units, they should be accompanied or unaccompanied. In addition'decisions still have to be taken about an increase in the size of the heli- copter force and a proposal to station fighter aircraft permanently in Hong Kong. (Separate briefs on all these subjects have been provided). The timing and conduct of

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