TNAG-0545-FCO40-640-Strength-of-garrison-in-Hong-Kong-1975 — Page 109

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KONG DEFENCE COSTS NEGOTIATIONS (IF RAISED)

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1. The House will recall that in announcing the Government's conclusions on

the Defence Review we made it plain that although our main defence emphasis must

be on our contribution to NATO, we recognised that we had inescapable commitments

to retain forces in the dependent territories including Hong Kong. But we also

said that in Hong Kong we would be making economies in the forces and seeking from

the Hong Kong Government a larger share of their cost in the next cost-sharing

agreement in 1976. Since then both Governments have had preliminary discussions

about the future size of the garrison and the future cost-sharing arrangements,

'leading up to the recent visit by My Rt Hon Friend the Minister of State for

Defence who has had intensive negotiations with the Hong Kong Government on

both aspects.

2. My Rt Hon Friend's visit resulted in two important steps. Firstly he secured

agreement on the future level of the garrison; this will be reduced to 4 infantry

a huicopter squacions battalions, engineers, 5 naval patrol craft and/resulting in a total annual saving

'of over £20m compared to the original garrison. Secondly the Hong Kong Government

accepted that in the

it would have to bear a substantially higher proportion

of the total cost that it has in the past.

futue

3.

The Hong Kong Government were naturally anxious that we should recognise the

„difficulties this will pose for them in relation to their planned social expenditure.

We are taking this into account as well as possible release of Hong Kong owned land

used by the Services, and some technical financial points. Both Governments hope

to resolve these issues quickly and to make a fuller announcement before the end

of the year.

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1DEC 975

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