TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 68

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HONG KONG DEFENCE COSTS AGREEMENT PRESS STATEMENT

495 U.K

The Minister of State for Defence, the Rt. Hon. Williamn

Rodgers, MP, today announced in Parliament a new defence costs

agreement with the Government of Hong Kong. This will succeed

the present 5-year agreement which expires on 31st March 1976.

Mr. Rodgers has recently conducted negotiations in both Hong

Kong and London, with representatives of the Hong Kong Government

led by the Governor, Sir Murray Maclehose.

2. The new Agreement reaffirms HMG's commitment to the

security and integrity of Hong Kong and stipulates the size of the agreed garrison, which will be smaller than in the past

but which will be reinforced should circumstances so require.

The garrison will in future include four Infantry Battalions

(three of them Gurkha), a Gurkha Engineering Squadron, five

naval patrol craft and an RAF helicopter squadron. At current

prices the cost will be £421M a year, which is some £20M less

than the present garrison. The Hong Kong Government will meet

50% of the cost of the garrison in the first year of the new

Agreement (1976/77), 62% in the second year and 75% in the

third and succeeding years, compared with a contribution in

the current financial year of about £11M under the present

Agreement. The new Agreement will run for seven years initially

and will be renewed for further periods of five years on the same

terms unless either Government wishes to vary them..

3. An important feature of the new Agreement, which was not

included in earlier agreements, is that Hong Kong's payments

to the United Kingdom will be adjusted for changes in price

levels. The greater part of the cost is incurred in Hong Long

and is thereby subject to price movements in Hong Kong rather

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