TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 93

J

SECRET F

ET

DRAFT LETTER FROM PS/SECRETARY OF STATE TO PS/CHANCELLOR OF THE

EXCHEQUER

HONG KONG DEFENCE COSTS AGREEMENT

J

You will be aware that the Minister of State for Defence

has concluded a new Defence Costs Agreement with the Governor

of Hong Kong which is extremely advantageous to the United

Kingdom but that an announcement of this agreement has been

delayed, at the express wish of the Governor of Hong Kong,

until he is satisfied that Hong Kong will not be affected

by tomorrow's statement on import restrictions.

As you

also know it is vitally important that the new agreement

should be announced as soon as possible if we are to benefit

from the terms negotiated, since these tie the increased

contributions from the Hong Kong Government to the early

release of Service land in the colony by the United Kingdom

and this process must start on 1 January 1976.

At MES yesterday Ministers agreed that no action would

be taken against imports from Hong Kong for the time being

although this question might have to be reconsidered at a

later date. Mr Rodgers has conveyed this decision to the

Governor of Hong Kong and, in the light of it, the Governor

has agreed to announcing the new Defence Costs Agreement at

11 am on Friday 19 December, provided nothing is said in

tomorrow's debate on employment and measures for saving

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SEORET

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