SECRET
233
Mrfale
DEFENCE REVIEW: HONG KONG
1.
Treasury officials continue to say that Ministers have "decided" that Hong Kong must pay 75% of the cost of the garrison. It may therefore be as well to remind ourselves of the actual decisions of DOPC.
2.
At the 14th meeting on 9 September the Prime Minister, summing up the discussion, said that the Governor of Hong Kong should be informed of the Government's firm view that the Hong Kong Government should contribute not less than three-quarters of the cost of the garrison. At the 15th meeting on 18 September, he further directed that officials should prepare briefs on the basis that the Hong Kong Government would contribute not less than three-quarters of the cost of a reduced garrison in the Colony. However, he went on to say that officials should also examine the possibility that the Hong Kong Government's contribution would not exceed half the cost of the garrison.
3.
The decision to seek a 75% contribution is therefore a firm one for the negotiations with Hong Kong. But Ministers clearly envisage the possibility that this goal may not be achieved and that we may have to settle for something less. This gives us a useful fallback position.
9 December 1974
CC
Sir D Watson
Mr Wilford
Mr Thomson
PS/FUS
Mr Jackson, Defence Dept.
Mr Timms/Mr Dinwiddy
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SECRET
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