DRAFT
SECRET UK EYES A
BPLEMENTS AN UNatio
BRIEF A
HONG KONG DEFENCE COSTS NEGOTIATIONS
OCTOBER 1975
STEERING BRIEF
Background
1. Under the present 5-year agreement, which expires in
March 1976, Hong Kong agreed to pay a total of £40M towards
the cost of the British garrison. This total was increased
in 1974 by £2.5M to take account of inflation in works costs,
so that the total rate of annual payment may be regarded as
£8.5M. The garrison on which the agreement is based consists
of 6 army teeth units with administrative support and RN
and RAF elements. Hong Kong's share amounted to about 28%
of the total cost at the time the agreement was made.
As a result of the Defence Review and in accordance
with the policy of concentrating on our NATO commitments,
Ministers concluded that the garrison should be reduced and
the Hong Kong Government asked to pay a larger share of the
costs when the present agreement expires.
2.
in the Defence White Paper in March 1975.
This was announced
Ministers decided
that Hong Kong should be pressed to pay 75% of the cost of
a reduced garrison.
This was originally to be based on
5 army teeth units costing £39M a year at 1974 prices; but
in the light of the Governor's advice that Hong Kong could
not be expected to pay of this cost it was agreed to
consider a further reduction in the garrison.
3. As a result of a joint study, a garrison based
on only 43 army teeth units (3 Gurkha Battalions and one
British Battalion) was accepted by the Chiefs of Staff as
a minimum, on the understanding that an additional Gurkha
Battalion from Brunei would be available for carly reinforce-
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SECRET
UK RYES A
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