TNAG-0479-FCO40-544-Strength-of-garrison-in-Hong-Kong-1974 — Page 152

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DRAFT

SECRET

HONG KONG: TERMS OF A NEW DEFENCE COSTS

AGREEMENT

Note of a meeting held in ACDS (Pol)'s room MOD

Wednesday, 23 October 1974 at 1530

Those present:

Mr. J.D. Bryars, AUS (GS) (in the Chair) Representatives of Hong Kong

Government and of CBF Hong Kong Representatives of FCO, ACDS (Pol), Army Department, Navy Department and Defence Secretariat.

The purpose of the meeting was as set out in paragraph 8

of the Governor of Hong Kong's telegram 180915A to FCO viz.

"to make sure that we are working from the same basis of costs,

and have a joint look at its implications for 1976/77 and after

at a given force level". The Hong Kong team stated their

objective as to clarify the figurework, not to negotiate; but

they emphasised their need to have as soon as possible for

purposes of budgetary planning a firm figure for the defence

contribution in 1976/77, which would also be presentable in

Hong Kong as a fair demand related to an adequate garrison.

In clarification the following points were made:-

(a) The figure of £31M was the estimated cost of the

reduced garrison in a representative year, after

the reduction had been achieved: in practice,

estimated costs would vary somewhat from year to

2.

year.

(b) The figure of £31M was at 1974 Long Term Costing

prices, that is at the price level of September

1973: an updating of the figure to September 1974

prices (the price basis for UK Defence Estimates

1975/76) was not yet available. The indications

were that updating might show an increase of 15-20%.

SECRET