TNAG-0525-FCO40-620-Visit-of-UK-Members-of-Parliament-(Defence-and-External-Affa-1975 — Page 9

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I should say that not only have the Hong Kong Government attached meat

importance to this being done, but they have been very crious indeed to tie

the release of these lands very closely to the increase from the 50 per cent

!

to 62 per cent end 75 per cent. Cue of the exercises we have been going

through since my retum 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 end detailed examination of

the matter with the PSA and the Treasury, 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 agreement 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 defence costa. On the question of infletion it may

be that your Committee will want to ask more detailed questions.

impression was that when I arrived in Hong Kong, the Hong Kong Govament

was inclined to believe that the only people to suffer from inflation was

the United Kingdon. 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 garnison there. Hy guess

is that after a lot of argument in which lie 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 importance to

it from a presentation point of view. By om task has obviously been to

work within a framework pet fet ne by the collective decisions of govemment

and this was true in the field of costs. I did not have a brief which

enabled me to have a great deal of roon for nano DUVIO. On the port of the

Governor of Hong Kong, he had to make a deal which he believed was broadly

accepteble in Hong Kong and would not undermine the credibility of his

*IN