TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 123

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PRIORITY

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FM F C 0 121644Z

SECRET

SECRET

(47.8) มา

470

(HKK 1011)

TO PRIORITY HONG KONG TELEGRAM NUMBER 956 OF 12 DECEMBER.

FOR DAVIES FROM ANDREW.

DEFENCE COSTS AGREEMENT.

1. I HAVE PUT TO THE MINISTER OF STATE THE PROPOSED AMENDMENTS

TO THE MEMORANDUM OF UNDERSTANDING AND PRESS STATEMENT WHICH WE

DI SCUSSED ON 10 DECEMBER. THE MINISTER WAS DISTURBED THAT THE EXECUTIVE COUNCIL WANTED TO MAKE CHANGES IN THE MOU IN

SPITE OF THE GOVERNOR'S ASSURANCES ON THIS POINT: BUT I UNDERSTAND

THAT THE COUNCIL'S ACCEPTANCE OF THE DOCUMENT IS NOT CONDITIONAL

ON THE CHANGES BEING MADE.

2. IN FACT, I BELIEVE THAT IF THE AGREEMENT CAN BE ANNOUNCED IN

THE NEAR FUTURE THE MINISTER WILL BE PREPARED TO ACCEPT THE

AMENDMENTS TO THE MOU AND THE PROPOSED CHANGES IN THE

REFERENCE TO THE HONG KONG CONTRIBUTION IN PARAGRAPHS 2 AND 4

OF THE PRESS STATEMENT: BUT I SHALL HAVE TO TELEGRAPH AGAIN NEXT WEEK, WHEN I HAVE CONFIRMATION OF THIS. MEANWHILE, ON THE RELEASE OF LAND POINT I CONFIRM THAT IF, WHEN HONG KONG’S FINANCIAL CONTRIBUTION FOR THE QUARTER ENDING 31 MARCH 1978

IS CALCULATED, IT IS CLEAR THAT KAI TAK WILL NOT BE RELEASED BY

31 MARCH 1978 IN CIRCUMSTANCES WHICH ARE THE RESPONSIBILITY OF THE

U.K. GOVERNMENT, THEN THE CONTRIBUTION FOR THE FIRST QUARTER OF 1978 WILL BE AT 50 PER CENT AND WILL REMAIN AS SUCH UNTIL THE LAND

IS RELEASED. THERE WILL BE NO REFUND.

3. ON TIMING, THE MINISTER IS PRESSING THE GOVERNOR TO AGREE THAT,

PROVIDED THERE HAS BY THEN BEEN NO STATEMENT BY H M G WHICH WOULD PLACE SIGNIFICANT NEW RESTRICTIONS ON IMPORTS FROM HONG KONG, THE

DEFENCE COSTS AGREEMENT SHOULD BE ANNOUNCED ON 19 DECEMBER, WHICH IS THE LAST DAY ON WHICH WE CAN ANSWER A PARLIAMENTARY QUESTION BEFORE THE CHRISTMAS RECESS. I WILL LET YOU KNOW THE OUTCOME.

I UNDERSTAND THAT, AS FAR AS MECHANICS ARE CONCERNED, AN ANNOUNCEMENT AT 110 HOURS LONDON TIME WOULD SUIT YOU.

CALLAGHAN

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нкод

DEFENCED EID TRED

PS/PUS

PS/LORD GORONWY-ROBERTS

SECRET

COPIES TO

MR ANDREW AUS/GS) 1C