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From:
J A Dew, RMD
Date:
Cc:
12 September 1991 Private Secretary
PS/Lord Caithness PS/PUS
Mr Muir
Mr Stone, HKD
Mr Godfrey, NPDD
166
I have not pursued Mr Grant, Finance Dept
with me. Mr Howard is away 3 weeks
this with age MOD.
So
1991 PES : HONG KONG PATROL CRAFT
ритиев
13/9
Mrs Treadell
HKB 063/1
The
1. Before receiving our first edition PES briefing on 6 September Mr Gozney asked me whether it would cover the question of Hong Kong patrol craft. I told him that it would not, because the issue had not arisen in the DW PES context this year, but undertook to look into it further.
2. We have not been involved in this affair until now. background is that the MOD have for some time planned to withdraw three RN patrol craft from Hong Kong, which they claim no longer serve any military function, or to persuade the Hong Kong Government (or the FCO) to take over the cost (£3 million per year to the MOD). The MOD have argued that the presence of the patrol craft serves a purely political/ symbolic purpose, so Hong Kong (or the FCO) should pay. MOD and political side of the Office have sought to persuade the Hong Kong Government to provide the money. The Hong Kong Government have been very reluctant to ask their Finance Committee for it, because this would open up the highly contentious question of defence costs in Hong Kong as a whole (Hong Kong already pays 65% of defence costs, which many in Hong Kong consider far too high). MOD pressure is on Hong Kong, not directly on us.
The
3.
The Prime Minister decided in July that the patrol craft should stay until 1997, with funding addressed in PES (without saying which Department should do this). He subsequently agreed to an MOD suggestion that we should first press the Hong Kong Government further to meet part of the costs. The Hong Kong Government are now looking at other ways of finding the money. (The MOD meanwhile have said that they do not mind when they receive the money for the craft, provided they do so before 1997. This appears somewhat surprising, given Government accounting conventions, but the MOD have confirmed it).
4.
Until we and the MOD have reached an absolute dead end with the Hong Kong Government, which is by no means certain at present, it would in any case be premature to consider bidding for the money from the Treasury ourselves. Even if we do meet a dead end in Hong Kong, we would need to think hard before conceding that we, and not the MOD, should bid.
Jan
J A Dew
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