CONFIDENTIAL
INMEDIATE
GR 400
CYPHER/CAT A
FM F C O 161915Z
CONFIDENTIAL
(478)
487
TO IMMEDIATE HONG KONG TEL NO 963 OF 16 DECEMBER.
YOUR TEL NO 1265: DEFENCE COSTS AGREEMENT.
484
1. FOLLOWING IS THE REVISED TEXT OF THE DRAFT WRITTEN PQ ANSWER
WHICH WILL BE SUBMITTED TO MR RODGERS PROBABLY TOMORROW FOR USE ON
19 DECEMBER.
BEGINS.
THE HOUSE WAS INFORMED IN THE STATEMENT ON THE DEFENCE ESTIMATES
(CAND 5976) IN MARCH OF THIS YEAR THAT AS A RESULT OF THE DEFENCE
REVIEW WE WOULD BE MAKING SOME REDUCTIONS IN THE HONG KONG GARRISON
AND WOULD BE SEEKING FROM THE HONG KONG GOVERNMENT A LARGER SHARE
OF ITS COST WHEN THE PRESENT COST-SHARING AGREEMENT, WHICH EXPIRES IN 1976, WAS RENEGOTIATED. FOLLOWING MY RECENT VISIT TO HONG KONG,
DURING WHICH I HELD NEGOTIATIONS ON THIS SUBJECT WITH THE HONG KONG
GOVERNMENT, I INFORMED THE HOUSE (OFFICIAL REPORT VOL 899 COLS 279-271) THAT AGREEMENT HAD BEEN REACHED BETWEEN THE TWO GOVERNMENTS
ON THE SIZE OF THE FUTURE GARRISON.
I AM GLAD TO RE ARLE NOW TO INFORM THE HOUSE THAT AS A RESULT
OF CONTINUED NEGOTIATIONS, INCLUDING FURTHER MEETINGS WITH THE
GOVERNOR OF HONG KONG IN LONDON, AGREEMENT HAS BEEN REACHED ON THE
FUTURE COST-SHARING ARRANGEMENTS. UNDER THE NEW AGREEMENT, WHICH
COMES INTO EFFECT ON 1ST APRIL 1976, THE HONG KONG GOVERNMENT WILL
MEET 50 PERCENT OF THE COST OF THE GARRISON IN THE FIRST YEAR,
62.5 PERCENT IN THE SECOND YEAR AND 75 PERCENT IN THE THIRD AND
SUCCEEDING YEARS, THE PALANCE BEING FOUND BY THE UNITED KINGDOM
GOVERNMENT. THE AGREEMENT, WHICH CONTAINS ARRANGEMENTS FOR
REFLECTING CHANGES IN PRICE LEVELS, WILL RUN FOR 7 YEARS IN THE FIRST
INSTANCE AND WILL BE RENEWED FOR FURTHER PERIODS OF 5 YEARS ON THE
SAME TERMS UNLESS EITHER GOVERNMENT WISHES TO VARY THEM.
THE AGREEMENT PROVIDES FOR THE RELEASE FOR CIVIL USE WITHOUT
COMPENSATION OF LAND AND BUILDINGS NO LONGER REQUIRED BY THE BRITISH
SERVICES.
CONFIDENTIAL
/IN PARCTICULAR,