TNAG-0536-FCO40-631-Strength-of-garrison-in-Hong-Kong-1975 — Page 11

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UK EYES A

Government in a financial matter would be without

constitutional preceuent and could put our interests

in Hong Kong under severe strain.

b) To accept a Hong Kong contribution of £17M a year

with an escalation clause, linked to the minimum

defence assessment of £40M. This would however mean

a Hong Kong contribution of little more than 40%.

The difference between this and a 75% contribution

(£13M a year) would have to be found within the

severely reduced defence budget.

(c) To reduce the size of the garrison still further.

The Governor proposes, reluctantly and very much as

a second-best, that we should consider a further

reduction in the garrison to a cost of about £35M

and a size of perhaps 43 teeth-arm units. The total·

implications of such a garrison for the security of

Hong Kong would have to be studied. Linked to the

proposed Hong Kong contribution of £17M the arrange-

ment would imply the UK paying more both in proportion

(50% rather than 25%) and in cash (£17M. rather than

£10M) than Ministers' preferred option. On the other

hand it would not give Hong Kong a majority interest

in defence matters affecting the garrison.

(a) To cut the cost of the garrison to a point at which

a Hong Kong contribution of £17M would represent 75%.

In capability this would fall far short of what is at

present seen as the minimum military requirement.

Whatever figure is fixed, the Governor would be prepared

to consider a graduated contribution, with less paid in the

early, more difficult, years and more later to achieve the

7.

agreed average. But he would be reluctant to accept more This would have the advantage, from Hong Kerry's point of view, of SECRET

din

TK

Ludder a

-3- increase

the cost to them of a reduced form