TNAG-0538-FCO40-633-Strength-of-garrison-in-Hong-Kong-1975 — Page 16

SECRET UK EYES A

SECRETARY

OF

STATE

Copy No of 29 copies.

Page No 1 of 2 pages

MINISTRY OF DEFENCE

SECRET UK EYES A

—

MO 9/1/5

Dear Jimi,

WHITEHALL LONDON SW1A 2HB

TELEPHONE 01-930 7022

H.K.1.0..).

for advice b.

in concentration

in th

the refence Dept. of

LATE

RIA

Первой

(C68 ولاتي

11th February 1975

(Sess (ile)

Mr. P/S Lord forme

korento The Wilford fin sfale Mihomson

DEFENCE REVIEW: HONG KONG

On 9th and 18th September last year we decided in OPD that, as part of the Defence Review, our Forces in Hong Kong should be reduced and that Hong Kong should be asked to contribute not less than three-quarters of the cost of the smaller garrison. But we also directed officials to examine the possibility that Hong Kong's share of the cost would not exceed one-half.

Officials have now held discussions in Hong Kong and London with the Governor and his official advisers. Their outcome is summarised in the attached paper, which has been prepared in consultation with Treasury and FCO officials. On Hong Kong's financial contribution, there is a substantial gap between the maximum figure which the Governor believes he can negotiate in Hong Kong (£17m) and three-quarters (£30m) of the estimated cost (£40m) of the reduced garrison which formed the basis of the discussion with him.

This assessment of the Governor is disappointing. But negotiations proper have yet to start and we must clearly wait and see how the Governor fares in them. You may wish to consider whether he can be given any additional backing by way of arguments or high level messages to convey to the Hong Kong authorities.

The

On timing, the Governor's view is that to seek to resolve the issue before May would not be to our advantage; and I think that we must accept this advice. But by May we shall have to decide on the scope of our negotiating position, including the extent to which we are willing to explore compromises. paper by officials makes some suggestions on this score. first is a study of the security and political implications of a garrison costing about £35m, on the basis that such a garrison might form an element of a compromise agreement with Hong Kong.

/ The

The

The Rt Hon James Callaghan MP

SECRET

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