TNAG-0540-FCO40-635-Strength-of-garrison-in-Hong-Kong-1975 — Page 54

CODE 18-77

SECRET UK EYES A

Reference

5.

THE GOVERNOR'S VIEWS

The Governor has consistently adivsed that the maximum that it would be possible to obtain from Hong Kong, in budgetary and

political terms, is £17m which is double the present contribution; and that a 50/50 split would be presentionally most advantageous from a Hong Kong viewpoint and would have the particular advantage of preventing the "unofficial" members of the Hong Kong Government from having the last word on military matters (as they might do if Hong Kong were the major contributors). It was from this standpoint that he initiated the proposal for a study of the reduct- ion in the cost of the garrison to about £35m. He has welcomed the clarification provided by the report of the degrees of risk involved in further reductions; and intends, with CBFHK, to sound out the "unofficials", before his visit in April, on the size of the garrison they believe would be adequate against the background of the related financial implications. He will report the results of these discussions to the FCO in the course of his visit.

SUMMARY

6. The Chiefs of Staff will shortly be considering, on the basis of the working party's report and taking account of the state of decision on the withdrawal from Prunei, whether they can recommend, as an element in a compromise agreement, any reduction from the planned level of the Hong Kong garrison. But, depending on their conclusions, there could still remain a financial gap between the level of Hong Kong contribution desired by Ministers and that offered by the Governor. This gap could be bridged only if Ministers were to accept a lower level (50/50) of Hong Kong contribution, as a result of the Governor's views mentioned in para 5: or, if the Governor were able to offer a progressively increasing contribution over the period of a new agreement which would meet the levels indicated by the Prime Minister. The Governor's visit is therefore opportune, since his views in the light of his discussions with unofficials will be relevent to

both issues.