TNAG-0478-FCO40-543-Strength-of-garrison-in-Hong-Kong-1974 — Page 61

GRS 400

IMMEDIATE

DEDIP

CYPHER CAT/A

pcl1974

WKK 10/9

FM HONG KONG 270700Z

DEDIP

SECRET

97

(120 9/10

TOP COPY

18

See subsequent papers

P/A

TO IMMEDIATE F C O TELEGRAM NUMBER 973 OF 27 SEPTEMBER. 1974

SECRET

FOR SIR DUNCAN WATSON.

(115).

YOUR TELS 805 AND 835 AND CDS SIGNAL TO C B F OF 23 SEPTEMBER

DEFENCE REVIEW.

I WOULD PREFER NOT TO PUT A PROPOSITION TO EXCO FOR DECISION:

(A) UNTIL C B F AND I HAVE AGREED SOMETHING WITH WHITEHALL THAT.

WE CAN CONSCIENTIOUSLY RECOMMEND, AND

(B) UNTIL ABOUT MAY 1975, 1.E. UNTIL AFTER THE 75/76 BUDGET

HAS BEEN DISPOSED OF, SINCE THE NEW DEFENCE COSTS AGREEMENT WOULD ONLY APPLY TO '76/'77.

2. THE PROPOSITION YOU HAVE PUT TO ME IS FOR A GARRISON COSTING £38M WITH HONG KONG CONTRIBUTING 75%, OR £28.5M, AN INCREASE OF 350% ABOVE THE PRESENT LEVEL. THIS IS NOT ON.

3. C B F THINKS THAT SOMEHOW AND WITHOUT GIVING UP THE FRIGATE, TO WHICH I ATTACH CONSIDERABLE IMPORTANCE, AND WHILE MAINTAINING THE OVERALL STRENGTH ENVISAGED IN PARA 2, HE COULD SAVE AN EXTRA £4M, BRINGING THE TOTAL DOWN TO NEAR £34M, AND HE IS TELEGRAPHING PROPOSALS TO C D S. BUT I CONSIDER THAT A TOTAL COST OF £34M WITH A HONG KONG CONTRIBUTION OF £25.5M, 1.E. MORE THAN 300% OF THE PRESENT LEVEL IS STILL NOT VIABLE HERE IN EITHER BUDGETARY OR

POLITICAL TERMS.

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