TNAG-0544-FCO40-639-Strength-of-garrison-in-Hong-Kong-1975 — Page 55

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CONFIDENTAL

Record of the final working session in S. for S's.

Office a.m. Saturday, 1st November

Present:

H.K.

U.K.

S for S, Mr. Wiggham, Mr. Jenney Mr. Jones, Mr. Thorp

Costs

Working Party on Costs and Inflation etc.

SCR 5762

Mr. Jones tabled the results of the various pruning exercises (HK 10039/1 to SD of 30th October 1975) which had been requested by Hong Kong, together with up-to-date manpower schedules. He said that the total economies amounted to $5 m. but that the inflator groupings, which he also tabled, totalled $457 m.: it was agreed that the reduction of $ 7 m. would have to be made before the agreement was concluded and that MOD and HQBF would advise the final breakdown of $450 m. It was agreed that these savings would come from the Headquarters and support elements. Signals equipment had been reduced from £3.5 to £3.3 m. spread over a five-year period and a deduction had been made in Education costs as a result of crediting school fees to this item; it was also intended to close 2 primary schools. Some reduction had also been made in Gurkha Training costs. No reduction had been made in the cost of medical units. Mr. Jones said that he would be sending a further explanatory note immediately after his return to London.

Description of garrison

2. S. for S. handed over a copy of the proposed Annex A to the MOU, which Mr. Thorp considered would be acceptable from MOD's point of view.

Essential Minor Units

3. It was agreed that the essential minor units whose withdrawal would be of concern to Hong Kong but which it would not be appropriate to include in Annex A should be the subject of a formal exchange of letters with CBF. These included the Nusafe organisation, the RN Explosives Ordinance Disposal and the decompression chamber.

Memorandum of Understanding

4. It was agreed that paragraph 2 of the draft MOU should be completed by the insertion in due course of the agreed percentages and dates.

5. Annex B (the inflator) would be acceptable with some slight amendments as shown on the attached draft, including in particular a separate item (x) covering air trooping and the inclusion of a corresponding item (k) for (x) "Movements in costs as notified by MOD".

CONFIDENTAL

/6.