§ Mr. Whitlock
asked the Secretary of State for Defence when he expects to be able to announce a new defence costs agreement with Hong Kong.
§ Mr. William Rodgers
The House was informed in the Statement on the Defence Estimates—Cmnd. 5976—in March of 815W 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 6th November—[Official Report, Vol. 899, c. 270–1]—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 1st April 1976, the Hong Kong Government will meet 50 per cent. of the cost of the garrison in the first year, 62 per cent. in the second year, and 75 per cent. 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 seven years in the first instance and will be renewed for further periods of five years on the same terms unless either Government wish to vary them.
The Agreement provides for the release for civil use, without compensation, of land and buildings no longer required by the British Services. In particular, the United Kingdom Government have undertaken to release land currently occupied by the Services at RAF Kai Tak and at Victoria Barracks. This land, which is owned by the Hong Kong Government, will be released during the financial years 1977–78 and 1978–79, subject to the necessary Service facilities being reprovided elsewhere by the Hong Kong Government.
This Agreement is in the interest of both Governments. For the United Kingdom it will provide a valuable contribution to the defence budget and for Hong Kong the assurance of a continued British garrison.