TNAG-0536-FCO40-631-Strength-of-garrison-in-Hong-Kong-1975 — Page 128

CONFIDENTIAL

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 Governoz

stressed that his offer of doubling the present Hong Kong Defence

Contribution was the maximum that he considered the Hong Kong

Government could bear. This contribution is currently £8.5M pa

but an additional £3M was subsequently agreed to be made available

for capital works services up to 31 March 1976. Thus it is

conveniently assumed that the current contribution represents

£1CM pa at present. The cost of the reduced garrison is estiuatod

at about £40M at 1975/76 Estimates prices (434M on the price base

used for the Defence Review) and it is clear that there is still

a considerable gap between the ceiling figure of 207M to £200,

which the Governor considers the Hong Kong Government could find

and the 75% contribution that Ministers would like.

2.

The Governor stated that if HMG insisted on Hong Kong paying

75% there would be no alternative to cutting the size of the garriso

still further. It was agreed that as the next step a team of NOD

officiels 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 cont.

3. Talks have now been arranged for 9-10 January but they will

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

settle matters; further cousultations will be necessary in due

course. The Governor has already stated that premature public

discussion of G's proposals would only serve to complicate the

consultations and 15 would also seem unwise to mention these talks

specificsly as the team will not have time to report before

Mr Jones' FQ is due for answer.

CONFIDERITAL