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and sometimes perhaps the final word. This will not be confined to questions of living standards but could affect IS philosophy and planning. Accompanying changes in the ratio of police to infantry could have the same effect. It is relevant that one reason why the currently proposed force reductions will be possible is that the Hong Kong Government will be increasing the number of police riot companies. Ministers in London may want in course of time to encourage Hong Kong to increase their share of the defence effort even more in money and men (and I per- sonally think it would be worth while investigating for the long term whether a greater effort could not be made, despite the known difficulties, to develop the size and efficiency of the local Volunteer Regiment and locally- engaged neval element.) (Not surprisingly CBF and MOD question whether this is practicable, and the Governor to some extent shares their doubts).
5. I am not sure how you would want to present all this to the Sub-Committee. We do not want to imply that the Services are everywhere extravagant or that the Hong Kong Government could be squeezed still harder at this stage the situation is going to be difficult enough as it is for the next year or so. But the Committee will probably detect the under-currents for themselves and you may think it wise, when explaining the background to the forthcoming negotiations, to throw in some of this as subsidiary background. It might be sufficient to say that for hist- orical reasons the Hong Kong Government has not hitherto ways played a very large part in determining Services arrangements in Hong Kong, nor has it been staffed to do so. increasing financial pressures on both HMG and the Hong Kong Government, and a sharp increase in the latter's contribution to the cost of local defence, the Hong Kong Government are likely to want an increasing say in both Internal Security planning, insofar as it affects the Services, and in the details of defence expenditure. We assume they may need to increase their staff to do this. This is a natural development, but it will of course call for increased cooperation and mutual understanding, which we shall do our best to stimulate.
With
3 September 1975
-cet Mr Sykes
Mr Tonkin,
Aseful.
Teddy Jacka
J E Jackson
Defence Department
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