TNAG-0617-FCO40-765-Strength-and-cost-of-UK-armed-forces-stationed-in-Hong-Kong-1977 — Page 181

.1.

d. Insert a new para € as follows:

"Hi Ambassaior has argued (para 3 of Washington telno 2744 of 12 August 1976) that it would be unfortunate for us to appear to make a profit out of the posting of an officer to the UNC (Rear) by asking for reimbursement greater than the actual costs to the British taxpayer. There may be an additional dimension to this argument since I understand the officer involved is (with C3F Hong Kong's agreement) detached from the Hong Kong garrison. 50% of the costs of this garrison are currently paid by the Hong Kong Government under the Defence Costs Agreement, of which the Americans are of course aware."

e. Para 6 should be renumbered para 7, and I suggest that it should

be amended from the second sentence as follows:

"Since we do not wish to appear to make a profit from our

contribution to the UNC(Rear) nor to risk damaging our overall defence relationship with the Americans by seeming inflexible on the question of costs, I should be grateful if you could consider agreeing that we should ask HM Embassy in Washington to make a further effort to reach agreement with the Americans. We propose that the Embassy should seek repayment of out of pocket expenses (which the Americans have already offered) plus the portion of pay and allowances not covered under the Hong Kong Defence Costs Agreement. If the Americans cannot accept this, we shall have to consider what advice to give Ministers in view of the suggestion in Mr Brown's letter of 16 July 1976 to Lord Goronwy Roberts that we might review the commitment made to the Americans in March." 家

Ellay

E Clay Defence Department

I

In my understanding (and the HCD's) the UNC (REAR) secondment is ir purely British and entirely foreign policy interests. assume that, in that they have hitherto met a proportion of the costs arising from it, the Hong Kong Government have either over- looked it or have acquiesced in it through charity. It would be specious if, at the end of our negotiations with the CD and the Americans, the Hong Kong Government were, in effect, left naying an increasing proportion of a bill for a project in which they have no interest whatsoever, while 13, with every interest, were paying nothing at all. If they noticed it, Hong Kong could, and probably would, complain that they should have been reimbursed first, before HMG, or that the monies received from the mericans should be divided between the UK and Hong Kong Governments in the proportions laid down by the Defence Costs Agreement. (The defence costs bill

/ for Hong Kong

CONFIDENTIAL