TNAG-0477-FCO40-542-Strength-of-garrison-in-Hong-Kong-1974 — Page 109

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Separate mainte

Ples/

Mr Thomson Separate

DEFENCE REVIEW STEERING COMMITTEE:

1.

HONG KONG

In his minute of 13 July the PUS records that the paragraph on Hong Kong in the Steering Committee paper was amended, over his protests, by changing the penultimate sentence to read "The Hong Kong Government should be asked to meet the whole cost of such forces as they wished to see retained.". The Treasury apparently pushed through this amendment by saying that they were talking only of an opening bid, though they declined to say so in the paper.

I doubt if it is sensible to write in something as a firm requirement in which we do not believe ourselves.

Nevertheless, even if the Treasury view has to prevail (leaving us to brief the Secretary of State to make the point about the opening bid) I still think that we should stand firm on two points.

2.

First, the paper still refers to a contribution of £2.4 million+ works costs. This is very misleading. We should make it clear that Hong Kong is already contributing over £8 million per year.

3.

Second and more important, if we have to accept the Treasury's formula, it should read "The Hong Kong Government should be asked to meet the whole cost of these forces." The point which the Governor made while he was in London was that there was a chance of a meaningful dialogue with Hong Kong if the professionals calculated the size of garrison needed in present circumstances, and we then asked Hong Kong to pay a greater propor- tion of the cost, citing financial stringency in the UK. But he advised that if we simply told Hong Kong that they could have whatever they cared to pay for, this would be taken as an abdication of HMG's responsibility for Hong Kong and would meet with stubborn resistance. The point is largely presentational but it is valid.

4.

If we use the formula now suggested, we could start by asking Hong Kong to pay the whole cost of whatever reduced force the professionals say is necessary. They will certainly refuse, but the Governor judges that they will probably agree to pay a larger proportion of the whole than they do at present.

5.

On a point of clarification, it was not, as recorded in the PUS's minute, the Governor's view that Hong Kong would pay no more than half the cost. What he said was that he thought they would at the end of the day pay about the present £8 million for a reduced force. Assuming a force of around 52 major units, which included the cheaper Gurkhas and from which some of the more expensive items such as the artillery and reinforcement facilities were removed, he thought this could result in halving the total cost to HMG.

17 July 1974

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Mr Elliott

Sir D Watson Mr Wilford

A C Stuart

Hong Kong & Indian Ocean Dept.

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