SECRET
FM HONG KONG
TO DESKBY 26130OZ FCO
TELNO 1789
OF 261124Z NOVEMBER 93
SECKE
original
on HKC 063/1
(GS)
ADVANCE COPY
169
107300
MDADAN 7957
$168
PERSONAL FROM THE GOVERNOR
Your Telno 994:
063
RECEIV
STRY
L7 DEC 1993
DESK C
REGISTRY
Run-down of the Hong Kong Garrison and Defence Cost Agreement (DCA)
1. The Treasury proposal as reported in TUR does potltake ihto account the reality with which we have to deal. That reality is as follows.
2.
There is a defence costs agreement in place, framed in a way which is certainly not disadvantageous to the UK tax payer. The funds for the Hong Kong Government's contribution have to be voted each year by a Legislative Council in which there is no government majority, nor will there be. The Chinese have said they will not expect Hong Kong to pay anything for their garrison after 1997. It will be increasingly difficult to persuade the Legislative Council to vote funds for the garrison. We will need to show a downward trend in expenditure (to match the run-down in the garrison) otherwise the argument will slip away from us. We will then have no funds, and a constitutional crisis on our hands.
3.
am anxious to avoid this. But it will be touch and go. We will need Treasury (and MOD) understanding. The MOD know our problems. I hope we can avoid being pressed into a position where we become powerless to defend any defence costs agreement.
·
4 It is against this background that the Treasury proposal has to be judged. The Commander British Forces in his press conference in July made clear that we would be left between late 1994 and the end of 1996 with a single Gurkha Battalion. This would be replaced for the final six months before the handover by an unaccompanied British Battalion. For both practical and financial reasons this remains the only sensible option. We are also committed to it publicly.
5.
The Gurkha Battalion is perfectly adequate to meet Hong Kong's needs.
no political or security grounds in favour of a British battalion returning in April 1995 instead.
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