CONFIDENTIAL
HKB 027/1
CONFIDENTIAL
FM FCO
TO DESKBY 29010OZ HONG KONG
TELNO 1703
OF 28153OZ JUNE 88
157
159
002470
MDHOAN 9302
COPY CIST ?
YOUR TELNO 2459 VISIT OF LORD GLENARTHUR TO HONG KONG: MEETING
WITH OMELCO
1.
MANY THANKS FOR THIS ADVANCE WARNING. WE SHOULD BE
GRATEFUL IF YOU COULD ADD THE FOLLOWING SUPPLEMENTARY MATERIAL TO
LORD GLENARTHUR'S BRIEFING FOR USE WITH OMELCO AND THE PRESS:
DEFENCE COSTS AGREEMENT
Q :
HOW MUCH IN TERMS OF SAVINGS TO HONG KONG DOES THE NEW
AGREEMENT REPRESENT?
THIS.
VERY DIFFICULT TO PUT A PRECISE HONG KONG DOLLAR FIGURE ON
BUT NOTE THAT THE FINANCIAL SECRETARY HAS ESTIMATED THAT
THERE COULD BE SAVINGS TO HONG KONG OF ONE THIRD IN HONG
KONG'S CONTRIBUTION TOWARDS THE COST OF MAINTAINING THE GARRISON BETWEEN NOW AND 1997 AND THAT THIS WOULD AMOUNT TO
SIGNIFICANTLY MORE THAN THE ESTIMATED TWO BILLION DOLLARS IT WOULD COST TO EXPAND THE POLICE FORCE OVER THE SAME PERIOD.
*
Q:
HOW MUCH HAS THE AGREEMENT COST THE UK IN TERMS OF REVENUE
FOREGONE?
THAT WOULD BE FOR THE MOD TO ANSWER. I DOUBT IF THEY COULD
GIVE YOU A PRECISE FIGURE.
ca
BUT THE FINANCIAL SECRETARY'S ESTIMATE OF SAVINGS TO HONG
KONG GIVES YOU SOME IDEA OF THE ORDER OF MAGNITUDE.
THESE ARE SIGNIFICANT SUMS: TWO BILLION DOLLARS IS FOR EXAMPLE THE EQUIVALENT OF A FULLY EQUIPPED MODERN WARSHIP.
Q :
AREN'T THE CONCESSIONS TO HONG KONG BY THE UK MINISCULE
AS A PROPORTION OF ITS OVERALL DEFENCE BUDGET?
WE HAVE MADE THESE CONCESSIONS TO HONG KONG AT A TIME WHEN
THE UK'S DEFENCE BUDGET IS COMING UNDER INCREASING PRESSURE: IT
HAS DECLINED BY 6 PERCENT IN REAL TERMS SINCE 1986 AND COULD WELL
DECLINE FURTHER IN REAL TERMS IN THE COMING YEARS.
AT THE SAME TIME, THE UK'S WORLDWIDE DEFENCE COMMITMENTS
HAVE NOT BEEN REDUCED.
SO IMPORTANCE OF THIS CONCESSION BY UK SHOULD NOT BE
UNDERESTIMATED.