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HONG KONG DEFENCE COSTS AGREEMENT: PARLIAMENTARY ANNOUNCEMENT
QUESTION:
To ask the Minister of State for Defence, when he expects to be able to announce a new Defence Costs Agreement with Hong Kong
ANSWER:
The House was informed in the Statement on the Defence
Estimates (Cmnd 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 House on 6 November (Official Report Vol 899 Cols 270-271) that agreement had been reached between the
two Governments on the size of the future garrison.
As a result of continued negotiations, including further meetings with the Governor of Hong Kong in London, agreement has been reached on the future cost-sharing arrangements. Under the new Agreement, which comes into effect on 1 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 years, the balance being found by the United Kingdom Government. The Agreement, which contains arrangements for reflecting changes in price levels, will run for 7 years in the first instance and will be renewed for further periods of 5 years on the same terms unless either Government wishes to vary them.
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