TNAG-0480-FCO40-545-Strength-of-garrison-in-Hong-Kong-1974 — Page 23

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CONFIDENTIAL

PQ 1873 B

BACKGROUND NOTE

1. On 18th December DUS(P) chaired an informal meeting

between the Governor of Hong Kong and Whitehall officials

to discuss the financing of the proposed Hong Kong garrison,

The Governor stressed that his offer of doubling the present

Hong Kong Defence Contribution (c.10p.a) was the maximum

that he considered the Hong Kong Government could bear.

cost of the reduced garrison is estimated at about £40M at

September '74 prices and it is clear that there is still a

considerable gap between the ceiling figure of £20M which the

Governor considers the Hong Kong Government could find and

the 75% contribution that Ministers would like.

2.

The

The Governor emphasized that the contribution could

not be trebled at once and considered that if IMG insisted

on Hong Kong paying 75% there would be no alternative to cutting

the size of the garrison still further. It was agreed that

as the next step a team of MOD officials should visit Hong

Kong in early January to explain, in detail, the cost and

composition of the proposed garrison and to explore all means

of bridging the gap between what Hong Kong could afford and

what the proposed garrison would cost.

3.

Talks have now been arranged for 8-10 January but they

will be exploratory in nature and the team will not be empowered

to settle matters; further consultations will be necessary

in due course. The Governor has already stated that premature

public discussion of IMG's proposals would only serve to complicate

the consultations and it would also seem unwise to mention these

talks specifically as the team will not have time to report before

Mr Jones' PQ is due for answer,

CONFIDENTIAL