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In Myla
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345)
Submission.
Dim
Mr Male
Sir D
Datson
HONG KONG DEFENCE COSTS NEGOTIATIONS
1.
3/1
The following is a summary, for information, of developments
in these negotiations over the last two days.
2.
The Defence Secretary sent a minute to the Prime Minister on Wednesday evening, 29 October reporting the state of play in Mr Rodgers's negotiations in Hong Kong (Mr Rodgers had reported in a message from HQBF to MOD, which we have not seen). Mr Rodgers had reported that the Governor had not managed to obtain
authorisation to agree to Hong Kong's accepting more than 50% of the total costs of the garrison in each year of a five year agreement but that the Governor was prepared to recommend to his Unofficials that they should accept a five year agreement under
62.51 which Hong Kong would pay 50% in the first year, in the second year and 75% in the third and subsequent years. (The total cost of the garrison, as a result of further calculations made in Hong Kong, is now estimated at £42.5 million a year.) The Governor had also said that it might be possible to get agreement to this arrangement subject to detailed negotiations on a timetable for the release of further MOD lands. Mr Rodgers had sought authority to accept the Governor's recommendation, assuming he could sell it to
Unofficials.
3. Mr Dales telephoned me on Wednesday evening to say that he wanted to put a copy of the Defence Secretary's minute in the Secretary of State's overnight box together with a departmental comment on it. (The Secretary of State was to leave for Rome immediately after Cabinet the following morning.) I considered that the Defence Secretary's recommendation that authority be given to Mr Rodgers on the basis described above was sufficiently close to the fall back position agreed earlier (Mr Dales's letter of 27 October to the MOD) for the .Secretary of State to be advised to give his agreement. This would be on the understanding that
/there was
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