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CONFIDENTIAL
SECRETARY OF STATE
no significant change in the military factors which underlay the
1987 decision and there is no military requirement for their
retention. Since then, however, political circumstances in Hong
Kong have changed particularly after Tiananmen Square and the
HKG now regards the patrol craft as an important symbol of British
sovereignty and wishes to see them retained until 1997. Although
this would add to the manning pressures on the Royal Navy, the MOD
has been willing to meet the HKG request, provided that this was not
at the expense of the Defence Budget. Various discussions have
taken place over the last 18 months without reaching a solution.
Last week's talks were a last effort to reach a solution as the
first steps in the withdrawal process are now becoming overdue.
3.
Limited progress was made at those talks. I believe that the
HKG now has a much better understanding of the pressures on the
Defence budget which make it impossible for me
it impossible for me to contemplate
accepting an additional commitment of some £15M to meet what is
essentially a political rather than a military need. The HKG
suggested that the cost might be reduced by withdrawing one vessel
but this would only save some £2M because it would not reduce the
supporting infrastructure (and there would also be practical
problems in selling or utilising a single vessel elsewhere).
Although we are prepared to consider this as part of an overall solution, it is quite inadequate in itself. Although no new ideas
were put forward, the discussions also explored further various earlier MOD proposals and, in particular, a development of a suggestion made last December that the HKG might buy out the MOD'S
capital interest in the craft and operate them themselves (although the RN would be willing to provide Loan Service Personnel as part of
the crews if required).
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