SECRET
SECRET
FM FCO
TO IMMEDIATE HONG KONG
TELNO 994
OF 241007Z NOVEMBER 93
p.a.
063/1
RECE
STRICTLY PERSONAL FOR GOVERNOR-
17 DEL 1993
TRY
Z
vit Tok
103172
MDHOAN 1387
063/1.
168
25/11
Mr Mann's
M Garett fro
гра
RUN-DOWN OF THE HONG KONG GARRISON
1. Following the decision taken by OPD (K) in June by correspondence to reduce the Garrison to a single Battalion by September 1994, there have been continuing discussions between the MOD and the Treasury about how this should be implemented.
2.
The Treasury have calculated that withdrawing the UK Battalion from Hong Kong between June 1994 and late 1996, as proposed in the paper for OPD (K), would cost the MOD budget an extra pounds 30 million. They favoured either disbanding the UK Battalion on its arrival back in the UK (rejected by MOD) or sending the UK Battalion back out to Hong Kong as from 1 April 1995, disbanding the Gurkha Battalion at that time. The MOD resisted this both for their own reasons in terms of availability of UK infantry, and because it would swing extra costs on to the Hong Kong Government complicating further their continuing discussions with you about the Defence Costs Agreement.
3.
The Defence Secretary however agreed that officials should cost the Treasury proposals. The outcome is that the MOD now acknowledge that the Treasury proposal to return the UK Battalion from 1 April 1995 would indeed save some 30 million for the MOD budget. But the MOD have continued to argue that no decision should yet be taken, pending the outcome of the current PES Round and the Defence Costs talks. The Chancellor is pressing for a decision now: partly on the grounds that it would not make sense to conclude the Defence Costs talks with the Hong Kong Government, and then to introduce this large new factor shortly afterwards.
4.
I judged that it was time for me to intervene and I have minuted to the Chancellor (and OPD (K) members) to say that I am consulting you. Since the Treasury proposal would appear to impose significant extra costs on HKG beyond those foreseen in
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