TNAG-1154-FCO40-1434-Visits-by-Members-of-Parliament-(MPs)-to-Hong-Kong-1982 — Page 171

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MINUTES OF EVIDENCE TAKEN BEFORE THE EXPENDITURE COMMITTEE

9 December 1975] Rt Hon WILLIAM RODGERS, MP, and

Mr RJ ANDREW

any scope in further reducing the administrative tail. There is no disagreement between ourselves and the Hong Kong Government on the desirability of reducing support costs in the garrison both now and at any later date. That much was fore- closed virtually before I reached Hong Kong. The matters we then discussed were the share of the cost of the £421 million, and, secondly, the time scale for the agreement. That is how long it should run. Thirdly, there was the ques- tion of defence lands, which is some- thing you are bound to have looked at during the course of your visit, and fourthly, the rather detailed and complex questions of what provision should be made for any inflation in the costs which may occur, and whether this should be more attributable to inflation in Hong Kong or to inflation in the United King- dom, or how any increase should be shared. On the first of these points, the share of the cost, I think I can say that we are likely to reach agreement on the Hong Kong Government paying 50 per cent of the costs of the garrison in the year 1976/77, 624 per cent of the cost of the garrison in 1977/78, and 75 per cent of the cost of the garrison thereafter. In other words, we should move up from 50 per cent in two steps to 75 per cent. I think it is likely we shall reach agreement on that basis. Secondly, my own negotiating brief allowed for a further five year agreement. I think it would be no surprise to you to learn that the Governor was seeking a ten year agreement. I think we can find a settle- ment on the middle ground giving rea- sonable stability for as long as both parties are content that the agreement meets each of their needs. I think the Governor and I, congenial though our negotiations have been, do not want ourselves or our successors to go through another round sooner than necessary. We have that in common. As I say, I was bound to start off on five years and the Governor started off on ten years. The third matter was the question of defence lands. As I think you will know, agreement had already been reached that certain lands would be re- leased irrespective of the Defence Costs Agreement, and, frankly, I found that here some of the ground inevitably had been cut away by the negotiations which

[Continued

had taken place already, and so the dis- cussions I had centred round the future of Victoria Barracks and the future of Kai Tak. As you know, Victoria Bar- racks is a prime site with some symbolic significance. It is right in the centre of Hong Kong in a commanding and rather delightful position. It consists of 43 acres of land or thereabouts. Kai Tak is similarly a prime site, because it is next to the airport and because there is pressure to make that land avail- able for the growth in traffic at the air- port. From the Hong Kong point of view these are both important, and whereas Victoria Barracks is a very attractive site from our point of view, we also have to be concerned in the case of Kai Tak with security considera- tions, and whether to surrender it would make it more difficult for our opera- tions simply because we did not have proximity to the airport. In the case of Victoria Barracks I would expect that any agreement would involve the reten- tion of some small area of land by us because of the need to re-provide. Although the larger part of the re- provision of facilities at Victoria Bar- racks, a re-provision which the Hong Kong Government would pay for, would be at HMS TAMAR, we would expect to retain a small part of the site for some of the facilities there at the present time. In the case of Kai Tak, the ques- tion arose as to whether, in effect, we might reduce a relatively small part of Kai Tak, or up to half, and contract into the remaining area, or whether we should abandon Kai Tak altogether and go to Sek Kong in the new territories, which you may have seen. Our present view is that we think, given the nature of the site, it would be the right course, subject to the cost of re-provision being borne by the Hong Kong Government, to give up the whole of Kai Tak, and so the agreement is likely to include giving up effectively Victoria Barracks, subject to the qualification I made, and giving up Kai Tak. I should say that not only have the Hong Kong Govern- ment attached great importance to this being done, but they have been very anxious indeed to tie the release of these lands very closely to the increase from the 50 per cent to 621 per cent and 75 per cent. One of the exercises we have been going through since my return