DRAFT
LASNI IMENA JAJE
HONG KONG DEFENCE COSTS AGREEMENT: PARLIAMENTARY ANNOUNCEMENT
QUESTION: To ask the Minister of State for Defence, if he will make
a statement on the cost sharing negotiations with the
Hong Kong Government7.
ANSWER
The House was informed in the Statement on the Defence Estimates (Cmnă
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 re-negotiated. Following my recent
visit to Hong Kong, during which I held negotiations on this subject with
the Hong Kong Government, I informed the ilouse on 6 November that agreement
had been reached between the two Governments on the size of the future gerrison,
which will comprise 4 infantry battalions (3 of them Gurkha), an engineer
squadron, 5 naval patrol craft and an RAF helicopter squadron. The annual
cost will be £421M at current prices, a saving of over £20M a year compared
with the garrison before the Defence Review.
2. I am glad to be able to inform the House that as a result of continued
negotiations, including a further meeting with the Governor of Hong Kong in
London last week, agreement has now 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% of the cost of the garrison in
the first year, 62.5% in the second year and 75% in the third and succeeding
CONFIDENTIAL
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