CONFIDENTIAL
FM FCO
TO PRIORITY HONG KONG
TELNO 1410
OF 31120OZ JULY 91
CONFIDENTIAL
HKB 063 /
167
142344
OAN 9085
TOP COPY AN Q DIST?
159
PERSONAL FOR ACTING GOVERNOR FROM COX, HKD
HONG KONG TELNO 2388: FUTURE RN PRESENCE IN HONG KONG
1 PARA 3 OF TUR ASKED TO KNOW HOW FAR THINKING HAS GONE ON
FINDING POSSIBLE ALTERNATIVE SOURCES OF FUNDS THROUGH SAVINGS IN
OUR OTHER OUT OF AREA COMMITMENTS.
2. FOR YOUR OWN INFORMATION, A REVIEW WAS UNDERTAKEN HERE OF ALL OUR OUT OF AREA DEFENCE COMMITMENTS, AND IN PARTICULAR THOSE WHERE WE HAD NOT BEEN ABLE TO REACH AGREEMENT WITH THE MOD. THE SECRETARY OF STATE CONCLUDED THAT WE HAD A NUMBER OF KEY PRIORITY AREAS, AMONGST WHICH HONG KONG WAS TOP, BUT THAT WE WERE WILLING TO TRY AND FIND SAVINGS IN ALL AREAS, INCLUDING THE HONG KONG GARRISON ITSELF, TO MEET THE MOD'S FUNDING PROBLEMS.
3.
HOWEVER IT HAS NOT BEEN POSSIBLE TO MAKE PROGRESS ON THIS
BASIS. THE DEFENCE SECRETARY HAS MADE IT CLEAR THAT HE DOES NOT
VIEW THE FINDING OF SUCH SAVINGS AS A SATISFACTORY WAY OF
OVERCOMING THE MOD'S FUNDING DIFFICULTIES. THE PROBLEM AS WE UNDERSTAND IT, IS THAT THEY NEED TO FIND SOME POUNDS 40 BILLION SAVINGS OVER THE NEXT 10 YEARS AND THE OPTIONS FOR CHANGE
PROGRAMME HAS IDENTIFIED ONLY POUNDS 20 BILLION SAVINGS. IN THE
COMING YEARS THE MOD IS STILL GOING TO HAVE TO FIND
SUBSTANTIAL ADDITIONAL SAVINGS - JUST TO STAND STILL WITH THE TREASURY. ANY AND ALL SAVINGS WILL THUS SIMPLY BE POCKETED.
4.
-
IN OUR TELNO 1396 WE SAID THAT WE ENVISAGED SUBMITTING ON 29 JULY. IN THE EVENT, WE LEARNT THAT THE DEFENCE SECRETARY HAD ALREADY RESPONDED TO THE PRIME MINISTER'S DECISION SO WE HELD OFF. I AM FAXING TO YOU HIS PRIVATE SECRETARY'S REPLY. AS YOU CAN SEE, THE MOD WILL CONTINUE TO PRESS US AND YOU HARD TO FIND THE ADDITIONAL FUNDS NECESSARY TO RETAIN THE VESSELS. WE WOULD BE GRATEFUL IF YOU WOULD REFLECT FURTHER DURING AUGUST ON WHAT MAY BE POSSIBLE. (WE WONDER, FOR EXAMPLE WHETHER THERE IS ANY SCOPE FOR ASSISTING THE MOD IN THE CONTEXT OF THE REPROVISIONING OF HMS TAMAR TO STONECUTTERS).
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