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5. QUOTE
MAY
''THE HONG KONG GOVERNMENT OR THE UNITED KINGDOM GOVERNMENT
(A) AT ANY TIME REQUEST INFORMATION ON OR AN EXAMINATION OF THE
COST OR COMPLEMENT OF ANY ELEMENT OF THE GARRISON AND ANY SUCH REQUEST SHALL NOT BE UNREASONABLY REFUSED:
(B) DURING THE PERIOD 1 APRIL 1977 TO 31 MARCH, 1978 REQUIRE AN EXAMINATION IN DETAIL OF COSTS AND COMPLEMENTS OF THE WHOLE OR ANY PART OF THE GARRISON.
SAVINGS RESULTING FROM AN EXAMINATION UNDER THIS PARAGRAPH SHALL ACCRUE TO THE GOVERNMENTS IN THE SAME PROPORTIONS AS UNDER. THIS AGREEMENT THEIR CONTRIBUTIONS BEAR TO THE COST OF THE GARRISON''.
UNQUOTE.
6. YOUR PARAGRAPH 4. THE IMPORTANT FACTOR FROM OUR POINT OF VIEW IS THAT AN ADJUSTMENT OF LOA AND FSA SHOULD ALWAYS TAKE PLACE WITHIN A VERY SHORT INTERVAL AFTER ANY GENERAL ADJUSTMENT OF U.K. PERSONNEL BASIC PAY RATES. THIS SEEMS TO BE AS MUCH IN YOUR INTERESTS
AS IN OURS.
7. THEREFORE WE PROPOSE THAT AN APPROPRIATE PROVISION SHOULD BE INCLUDED AFTER PARAGRAPH 3 IN THE M O U ON THE LINES SET OUT IN
THE NEXT PARAGRAPH.
8. QUOTE
"'4. IF THE BASIC RATES OF PAY AND ALLOWANCES (EXCLUDING LOA
AND FSA) OF UNITED KINGDOM BASED SERVICE AND CIVILIAN PERSONNEL ARE ALTERED AT ANY TIME DURING THE PERIOD OF THIS AGREEMENT, THE UNITED KINGDOM GOVERNMENT AGREES TO ADJUST WITHIN 3 MONTHS THE RATES OF LOCAL OVERSEAS ALLOWANCE AND FOREIGN SERVICE ALLOWANCE PAYABLE IN HONG KONG TO TAKE
ACCOUNT OF SUCH ALTERATION OF BASIC RATES.''
UNQUOTE.
9. THE PROPOSAL IN PARAGRAPH 8 ABOVE WILL HAVE THE EFFECT OF RESTRICTING DIFFERENTIAL INFLATION TO EQUIPMENT SUPPLIED FROM
THE U.K. AS TO THIS WE ARE CONSIDERING YOUR OFFER AND WILL
TELEGRAPH SEPARATELY.
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