19. NUMMER
Mr Clift
SECRET
FM FCO 111530Z JAN 80
ROUTINE HONG KONG
TELEGRAM NUMBER 27 OF 11 JANUARY
FROM MACLEHOSE FOR CATER AND FINANCIAL SECRETARY: PERSONAL.
GARRISON.
1. I SAW THE SECRETARY OF STATE FOR DEFENCE ALONE ON 9 JANUARY.
2. HE CONCEDED THE NEED FOR A FIFTH BATTALION, ACCEPTED THAT MEANWHILE ARRANGEMENTS FOR RECRUITMENT SHOULD PROCEED, BUT EMPHASISED THAT HMG REMAINED UNCOMMITTED UNTIL A SATISFACTORY FINANCIAL AGREEMENT ABOUT IT HAD BEEP SIGNED.
3. HE SAID THAT IN THE PRESENT FINANCIAL SITUATION. 15 WHITEHALL, HMG WOULD ONLY AGREE TO ARRANGEMENTS WHICH INVOLVED MINIMAL REPEAT MINIMAL ADDITIONAL COST TO THE UK. I PERSONALLY BELIEVE THIS TO BE INESCAPABLE AND THAT IT WOULD EL 1: PRUCELT NOT TO FACE THIS FACT.
4. IT WAS ACCEPTED THAT THE OBJECT SHOULD BE AN AMENDMENT OF THE EXISTING DCA NOT NEGOTIATION OF A NEW AGREEMENT.
5. MCD FINANCIAL EXPERTS ARE TIED UP WITH CALCULATIORS ABOUT 79/80 OUT-TURN AND 80/81 COSTINGS. THEY WOULD THEREFORE PREFER TO POST- PONE A NEGOTIATION UNTIL LATE FEBRUARY OR EARLY MARCH. I MYSELF SEE MERIT IN DELAY UNTIL SOON AFTER OUR BUDGET FOR VARIOUS REASONS. WE LEFT IT I WOULD SUGGEST A DATE AFTER MY RETURN AND DISCUSS- ION WITH YOU.
6. THE SECRETARY OF STATE HAS BEEN ADVISED BY HIS OFFICIALS (FOR REASONS NOT CLEAR TO HIM) THAT THE DCA HAS WORKED OUT IN A WAY THAT RESULTS IN HMG PAYING 54% OF THE CUST OF THE GARRISON. SINCE THIS COLOURS MOD THINKING AND COULD BE IMPORTANT IN THE EVENTUAL NEGOTIATIONS I SUGGEST AN IMMEDIATE ATTEMPT SHOULD BE MADE IN HONG KONG TO GET TO THE BOTTOM OF THIS AND RECONCILE OUR FIGURES. I SPECIFICALLY ASKED THE SECRETARY OF STATE IF HE WAS REFERRING TO THE ALLEGED HONG KONG PROFIT ON LAND, BUT HE SAID THAT THIS WAS NOT AT ISSUE.
CARRINGTON
NWN N