TNAG-0544-FCO40-639-Strength-of-garrison-in-Hong-Kong-1975 — Page 201

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MINISTRY OF DEFENCE

WHITEHALL LONDON SW1A 2HB

TELEPHONE 01-930 7022

SECRET UK EYES A

MO 5/14

PRIME MINISTER

Lips /LD Conourne Roberto

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30/10.

Mithali

10. M. Sylves

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HONG KONG DEFENCE CONTRIBUTION

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Your Private Secretary's letter of 22nd October authorised the Minister of State for Defence to conduct negotiations with the Hong Kong authorities on the basis of achieving an increase in the current contribution to the costs of the garrison from £8.5M a year to

2.

75% of the cost of a reduced garrison, details of which were outlined in my minute of 8th July, or

a.

b. as a fall-back, £25M in the first year rising to 75% in the second or third year.

The Minister of State is currently in Hong Kong and has reported to me that after consultation with the Executive Council and the Finance Committee the Governor of Hong Kong has still not obtained authorisation to agree to Hong Kong accepting any more than 50% of the total annual costs of the garrison in each year of a five year agreement. He is, however, prepared to recommend to his unofficials that they should accept a five year agreement under which Hong Kong's share would be:

a. 50% in the first year;

b.

62.5% in the second year;

C.

75% in the third and subsequent years.

/ The

SECRET UK EYES A