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24.3.58
тел.
10 TS
25-3-58
Mr. Wallace
Sir John Macpherson (Away).
Secretary of State
It will be remembered that the question of the Hong Kong garrison was discussed in Defence Committee on the 5th February and it was then decided that the Chancellor of the Exchequer should consult with the Colonial Secretary and the Minister of Defence as to whether some offer could be made to the Hong Kong Government in respect of War Department land in the Colony in return for their undertaking to meet the additional costs involved in any increase in the Army garrison over six major units.
2.
The Treasury was not very well informed about the Hong Kong garrison, and the intervening time between then and now has been taken up with getting from the War Office and ourselves
This has a statement of the position regarding the lands. revealed the differences which we knew existed, and the attitude of the War Office is summarised in my minute of the 19th March 1958. The Treasury had fixed a meeting for Wednesday, 26th March, but then the two telegrams at (216) and (217) came in and as they radically altered the picture we
This has been asked the Treasury to postpone the meeting. agreed.
We propose to circulate the telegrams to the Treasury, the War Office and the Ministry of Defence. A meeting will however have to take place in the near future, since, quite apart from H.M.G's interest in this matter, the Governor of Hong Kong is clearly getting very concerned about the position in the Colony. It is for this meeting that we require instructions from the Secretary of State as to what line we should take,
Page 31
13.
3.
The old Hong Kong "offer" in regard to the two major Page 32 of 28 its was that provided the War Office gave up theiragespated 283
claims to the War Office lands in H.M. Dockyard the Hong Kong Government would agree to paying half of the cost of the two additional units and would maintain their defence contribution: at its present level of £1 m. for the next five years. The cost of the units was £250,000 each per year.
4. The new Hong Kong offer, on the face of it, looks a good deal more generous than this. They will pay £250,000 for each of the additional units, that is the whole of their cost, not half; they would maintain their defence contribution at £lm. but relate it to the size of the garrison at six major units; and they would deduct the amount actually paid in respect of the additional units from any compensation which might fall due from the Hong Kong Government in respect of the lands
surrendered.
In this respect they do not, as before, ask
H.M.G. to waive their claims but they say they would abate the
amount Hong Kong has to pay by the art of the units. It is suggested that we should be authorised to make this offer to the Treasury and the Service Departments. It is by no means certain that if this is agreed at the official level and if then Defence Committee, as I think would be proper, also endorses it, the Finance Committee in Hong Kong will accept it, though the fact that the Governor has put this proposal forward must certainly indicate that he has some confidence of its acceptance by them. The telegram at (217) makes it clear that the atmosphere in Finance Committee will be very delicate, and it is fairly clear also that if conditions are going to be put by H.M.G. on the deal which the Governor proposes in para. 4(a) to (a) of his telegram at (216), then the Governor's chances of success will be greatly lessened. We therefore will want to have agreement to 4(a) to (a) as they stand and without whittling away their effect.
5. One of the difficulties that we envisage arises over (c); to start off with the Service Departments, and I suspect the Treasury, will dislike the bracketing of the question of paying for the additional units with compensation for Service land surrendered. They have always wanted to keep these two matters separate. The second reason is that if you read para. 5 of (216) it is fairly clear that the Hong Kong Government are going to fight tooth and nail to avoid having to pay anything for any lands which are surrendered. The Governor says that the only reasonable basis for assessing compensation is the degree of re-provisioning of accommodation actually required. It stands to reason that diminishing garrison the re- provisioning of accommodation is not likely to be large, and in particular is not likely to amount to the sum of £3m. dollars which the War Office think they can get for the two areas to which they have a particular claim. We do not think that the Service Departments or the Treasury will overlook this point, and I think that the only way in which we could carry it with them would be to point out that we have instructions from our Secretary of State to press the Hong Kong case "totus porcus" and not to allow slices to be cut off it.
6. Mr. Wallace and I thought that the proposals in (216), coupled with the release of the defence contribution for this year, were a sufficient dee on the Hong Kong position to appeal to Ministers in this country, and that if presented against the background of the Governor's growing anxiety about the internal security position and the possibility of a public debate on the garrison, there would be a good chance of getting them accepted in Defence Committee.
7.
May we therefore have authority to put the case at (a), (b) and (c) of para. 4 of the telegram at (216). (d) is a logistic question and unfortunately the unit which was earmarked for sending to Hong Kong has been stood down and on present form Page 32 of 283 will take six months to get it out there.
improve on this and this is a matter which we official channels.
We may be able to will Page12 nfreig
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26th March, 1958
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26-3-58.
I agree entirely with Mr. Campbell and have nothing to add to his minute except to draw the Secretary of State's attention to the generally "bobbery" state of public opinion in Hong Kong in relation to the U.K. which the Governor mentions in paragraph 3 of (217) This is not the sort of consideration which our colleagues in the Treasury and the Service Departments will pay much attention to, but it is a matter of which the Secretary of State is very well aware and which his colleagues, with respect, will have to bear in mind.
Ilveen
26.3.58
The Cacapbell
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