Reed. 12/6/91

香港總督府

CONFIDENTIAL

Andmys

GOVERNMENT HOUSE

HONG KONG

3 June 1991

IL PSIPUS

the Sin 5 cere

насных

AMY

Eu my reply

all'd

паз

14/11

Defence Costs:

Patrol Craft and the Gulf

Earlier this year, and late last year, when you were out here with Lord Caithness, you argued strongly in favour of a Hong Kong contribution to HMG's expenditure in the Gulf.

Later there was an informal suggestion from the PCO that we should make a contribution of £15 million. At that time fighting had broken out in the Gulf. I thought it right that Hong Kong should indeed make a contribution. I had an exchange with Robin McLaren about the problems which would arise if we made a contribution and then found ourselves still arguing about paying extra for patrol craft. The strong advice was that there should be no suggestion of linkage. Hong Kong would gain credit from a straightforward contribution. (FCO Telnos 178 and 187).

Sad to relate, that advice has not been borne out by the results. So far as I can see, we have gained no credit from our contribution to the cost of the Gulf

war.

As for the patrol craft, the latest reports from our team in London show that we are making no progress with the MOD continuing to argue, against all the known facts, that there is no military case for retaining the patrol craft and that Hong Kong should therefore pay 100% of the costs.

At this end the contribution to HMG's Gulf effort was achieved only after considerable political effort and at a political cost. As you will remember, there a substantial number of votes against the proposal in the Finance Committee. We had to exert all our efforts to get it through.

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