MPs as well as Ministers and officials, to the Colony. As you know, Jim Callaghan will be going to Hong Kong in May. I do not think, therefore, that there is any real lack of knowledge about conditions there. What is difficult is to work out the right priorities to adopt in attempting to improve conditions over the next few years; but much is being done and more will be done, in this direction.
You also asked for my comments on the garrison in Hong Kong. Both we and the Hong Kong Government consider that a continuing British military presence in the Colony is a necessary part of the British commitment to the integrity and security of Hong Kong, upon which the whole existence of the Colony depends. The size of the garrison, which has been significantly reduced as a result of the last Defence Review, is determined by the role it is designed to play in support of the Hong Kong Government in maintaining internal security. Under the new Defence Costs Agreement, "which comes into force in April, the Hong Kong Government are to pay a much greater proportion of the cost of the garrison: 50% in the first year, 62.5% in the second and 75% in the third and successive years. However, it is important to keep this spending on defence in perspective. Hong Kong's contribution in 1976/77 is unlikely to represent more than 3% of estimated total government expenditure. Even when Hong Kong is paying its maximum contribution it will still amount to less than 4%. In comparison, the Hong Kong Government has allocated 18% of its budget to education during 1975/76 and 11% to housing.
I am returning your copy of the Fabian pamphlet.
ever,
Trienery.
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