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E
121
F
24
4.
should be falling, since it no longer takes on day to day operational duties, particularly on land. The Hong Kong Government have no automatic majority in the Legislative Council and therefore have to convince members on the merits of the case. It is the Governor's considered judgement that he will only get funding from the Legislative Council if he can show that this on a declining trend, starting with the estimates for 1993/94.
- This makes it important to look for all possible
savings, particularly in the support area.
We know that the Hong Kong Government have put a number of questions to the MOD about specific aspects of garrison spending (the notes from HKG to the MOD covering official MOD travel to Hong Kong, entertainment/social activities, and stores and equipment including the issue of the 168 new car, are at Annex E). We hope that you will be taking a hard look at these specific issues, and at wider support questions such as education and the future of the RN hospital, with the aim of making some savings which can show up in the figures for 1993/94. The fact that the Hong Kong Government are having to put these detailed questions, itself suggests the need for a much more open and frank dialogue with them over garrison costs.
We were also concerned to see from the UK Eyes A version of the note by DCDS (C) seeking a policy steer on the withdrawal plan, that HKG's 65% share of the full costs of the garrison (about £135 million) is more than the total LTC costs of the garrison (about £124 million). If this became known to Hong Kong (we will not tell them) it would further fuel their suspicions that the MOD are somehow making a profit out of them. Grateful if MOD could shed light on the basis for these figures: are Hong Kong being treated any differently from other MOD customers in the way full costs and LTC costs are calculated?
Although not relevant to the issue of short-term cuts in support costs, you might also wish to see the attached note from Mr Hamilton's office commenting on the DCDS paper. Mr Hamilton has suggested a much more radical look by the MOD at the options for amalgamating the two Gurkha battalions quickly, and pulling out the UK battalion for re-deployment on, eg peacekeeping activities, elsewhere in the world, leaving one battalion in Hong Kong. As Mr Hamilton recognises, this raises wider issues which would
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