TNAG-0255-FCO40-291-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 94

Secret

3.

Comment

(6)

We can accept that the size of the contribution should

not be determined solely by the direct economic gain to

Hong Kong from the presence of the Garrison. This was in

fact one of the considerations included, with the agreement

of MOD, in our original letter to the Governor of October

1969. The offer of £7.5 million is £870,000 more than

the local costs at 1970 prices of HM Armed Forces for

internal security and related pruposes. The offer of

£8 million per annum was £890,000 more than the corres-

recurrent ponding costs at 1969 prices. These local/costs have

gone down by £.48 million;

the offer has gone down by

£.5 million, but this of course takes into account the reduction in capital costs as well as recurrent costs. that local costs have gone up and not down. In any case

11

the Governor had suggested a figure which he may be able

to put over locally without regard to any other considera-

tions."

Comment

MOD are apparently thinking in terms of the local costs

of the entire Garrison (which show an increase of

£300,000) whereas the Governor is referring only to that

element in the Garrison required for internal security

purposes (the estimated costs of which show a decrease

of £480,000). The fact remains that when the Governor

made his original offer he was thinking in terms of 73

major Army units. An increase in the size of the

Garrison would have given him a most important card to

/play

Secret