(DEFENCE AND EXTERNAL AFFAIRS SUB-COMMITTEE)
9 December 1975] Rt Hon WILLIAM RODGERS, MP, and
Mr RJ ANDREW
from Hong Kong is to find out whether this would be practical. We do not want to reach an agreement where we would default on the grounds of not releasing the land, and then finding we cannot get the increased instalments which we wished and to which we are committed. It is very important and we have had a very close and detailed examination of the matter with the PSA and the Trea- sury, but we believe that we ought to be able to achieve a timetable providing this agreement is settled by the end of this year. I think if we did not get agree- ment by the end of the year it would be difficult to keep to the timetable we have in mind for the release of Victoria Barracks and Kai Tak in such a way as to achieve the timetable on sharing de- fence costs. On the question of inflation it may be that your Committee will want to ask more detailed questions. My im- pression was that when I arrived in Hong Kong, the Hong Kong Govern- ment was inclined to believe that the only country to suffer from inflation was the United Kingdom. We were able to show that this was not the case, and even if it was the case the total cost of inflation in the United Kingdom would not be reflected in the cost of our gar- rison there. My guess is that after a lot of argument in which Mr Andrew has been very much involved, we shall reach agreement on that. It should not be a stumbling block. Here again the Hong Kong Government have attached im- portance to it from a presentation point of view. My own task has obviously been to work within a framework set for me by the collective decisions of govern- ment and this was true in the field of costs. I did not have a brief which enabled me to have a great deal of room for manoeuvre. On the part of the Governor of Hong Kong, he had to make a deal which he believed was broadly acceptable in Hong Kong and would not undermine the credibility of his position. Strange though it may seem to us, given the status of Hong Kong as a colony, I think all those who have been there would acknowledge the fact that the credibility of the Governor and the officials has an important bear- ing on the successful administration of the colony. Whereas I had the task to negotiate the best deal for Britain, 1 had to recognise that any agreement
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would have to win a degree of genuine consent in Hong Kong if it was to stick, and if it was not to undermine the position of the Hong Kong Governor. I think we can reach an agreement which will be fair to both sides and which will be broadly acceptable to our consti- tuents, and by that I mean the Govern- ment, of which I am a member, and on the other hand, to the articulate popula- tion of Hong Kong who set the environ- ment in which the Governor and official members of the Executive Council carry out their work.
3. Did any unofficial members come into these talks? Did you have the Chinese element in some of these talks? As far as we understand it they were present at one, but not at another. There may be some reason for this. Coupled with that I would like to say this to you: are you satisfied that if they pay this type of contribution, which will be over half, that we shall not then get local pressure from the Hong Kong Government to secure some degree of control over the service expenditure? It all reverts back to the Ministry of Defence and what you spend there. They might say they want more on the Navy and less on the Army? On your first question, I was bound to negotiate with the Government of Hong Kong and decisions on whether I should speak directly to the unofficials were decisions I left to the Governor who, I thought, ought to decide what made the best sense. In fact, at a plenary session, shortly after my arrival, I set out the United Kingdom case, and therefore made clear my starting point. The un- officials then made their own views clear, though the Governor said they spoke with more restraint in my presence than they did elsewhere. The Governor chose to allow me to take note of what the unofficials said rather than reply to them. I attended a lunch with the un- officials which was much more a free- for-all, where they expressed themselves rather more strongly than hitherto. The negotiations were very much myself, Mr Andrew and our team speaking to the Governor, the Financial Secretary and their team. On your second question, yes, this of course is a danger. Perhaps I can go back. The Chiefs of Staff re- viewed the garrison extremely carefully