IMMEDIATE

CR S

457A

CYPHER CAT ‘A

FM FCO 181515Z

SECRET

SECRET

(HKK 10/1)

Soo)

TO IMMEDIATE HONG KONG TELNO 97% OF 18 DECEMBER

FOR ACTING GOVERNOR FROM GOVERNOR

YOUR TELNO 1281: DEFENCE COSTS

1. FOLLOWING ARE SUGGESTED TEXTS OF PARAS 1 AND 5 OF PRESS STATEMENT.

PLEASE USE OR INCORPORATE IN YOUR DRAFTS AT YOUR DISCRETION.

BEGINS

''1. YESTERDAY IN LONDON, THE MINISTER OF STATE FOR DEFENCE, THE RT. HON. WILLIAM ROGERS, M.F., AND THE GOVERNOR, SIR MURRAY MACLEHOSE, SIGNED A NEW DEFENCE COSTS AGREEMENT. THIS NEW AGREEMENT WILL SUCCEED THE PRESENT 5 YEAR AGREEMENT WHICH EXPIRES ON 31ST MARCH, 1976. IT HAS BEEN SIGNED FOLLOWING A PROTRACTED SERIES OF

NEGOTIATIONS IN HONG KONG AND LONDON OVER THE PAST FEW MONTHS IN

IN WHICH MR. ROGERS HAS LED FOR THE UNITED KINGDOM GOVERNMENT AND

THE GOVERNOR HAS LED THE HONG KONG TEAM.''

5. THE HONG KONG GOVERNMENT IS SATISFIED THAT THIS AGREEMENT IS

A FAIR ONE AND IN THE INTERESTS OF HONG KONG. THE AGREEMENT ACCORDS

WITH THE CURRENT VIEW OF HONG KONG'S ABILITY TO PAY A LARGER CONTRI-

BUTION TOWARDS THE GARRISON THAN IN THE PAST, THOUGH THIS WILL STILL

BE LESS THAN THAT BORNE BY COMPARABLE COMMUNITIES ELSEWHERE, THE

NEW AGREEMENT ASSURES HONG KONG OF A CONTINUING BRITISH COMMITMENT

BACKED BY A BRITISH GARRISON FOR WHICH HMG WILL CONTINUE TO PAY A

PROPORTION OF THE COST. IT ALSO ENSURES THAT THE OCCUPATION AND USE

OF LAND BY THE MINISTRY OF DEFENCE IS BROUGHT SHARPLY INTO LINE WITH

THE REALITIES AND THE REQUIREMENTS OF MODERN HONG KONG. THE SIZE TO WHICH THE GARRISON IS TO BE REDUCED HAS BEEN BASED ON A CAREFUL

ASSESSMENT OF CURRENT NEEDS, BUT THE AGREEMENT CONTAINS ADEQUATE PRO-

VISION FOR REVIEW JUST AS IT PROVIDES FOR THE GARRISON TO BE

DE-INFORCED IF SO REQUIRED,**

ENDS

SECRET

12.

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