CONFIDENTIAL
parts of the Council. The platform of the United Democrats
includes a commitment to "reduce the proportion of funds
that Hong Kong provides for the stationing of United Kingdom
troops in the territory". There is no question of their supporting an increase in the proportion which Hong Kong pays: for us to propose this would play into their hands, greatly complicate the relationship between HKG and LegCo and give them the opportunity to press for a reduction in the overall amount paid by Hong Kong towards the garrison which would be a popular position locally.
In the light of the clear advice from Hong Kong that
they cannot find extra money above the normal 65%/35% cost
sharing arrangement the Foreign Secretary sees no
alternative to considering this as a normal cost of defending one of our Dependent Territories and therefore an
appropriate charge to the MOD. He continues to believe that the patrol craft perform an important military role, as well
as demonstrating our commitment to the defence of Hong Kong
up to 1997. Chinese incursions over the last two years have
shown that they have much less respect for the Hong Kong
Marine Police. Without the Royal Navy there, it is
inevitable that this challenge to Hong Kong's boundaries and
flouting of our sovereignty would intensify. In such
circumstances Police morale would suffer and we could face
other serious security problems.
In these circumstances, we again pressed the Hong Kong Government to see if there was any creative option for re-allocating funds without Finance Committee's involvement.
They were unable to make any formal proposal but the Chief Secretary of Hong Kong agreed to discuss some ideas during
his visit here in early-October. We duly had this
discussion but study of the ideas unfortunately showed that
they would have been inconsistent with the British and Hong
Kong Government's principles and procedures of public accounting and financial accountability. This position was
confirmed during the Governor's visit here shortly
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CONFIDENTIAL