TNAG-2120-FCO40-3026-Hong-Kong-Garrison-future-of-the-Royal-Navy-presence-1990 — Page 142

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FM HONG KONG

TO IMMEDIATE FCO

TELNO 1310

OF 201115Z APRIL 90

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Redacted

under FOI exemption 27(1)

021270

MDHIAN 7620

PERSONAL FOR MR MAUDE FROM GOVERNOR

ROYAL NAVAL PRESENCE IN HONG KONG

YOU MAY REMEMBER THAT, AT THE END OF YOUR VISIT, I MENTIONED A POTENTIAL PROBLEM OVER COST SHARING FOR A CONTINUING ROYAL NAVY PRESENCE HERE.

2. BRIEFLY, THE POSITION THEN WAS THAT MOD MINISTERS WERE CONSIDERING A RECOMMENDATION, SUPPORTED BY BOTH THE FCO AND OURSELVES, THAT THE REMAINING THREE RN PATROL CRAFT SHOULD BE KEPT IN HONG KONG UNTIL 1997, BOTH AS A VISIBLE DEMONSTRATION OF CONTINUING BRITISH COMMITMENT AND TO STIFFEN OUR ABILITY TO RESIST SALAMI STYLE INCURSIONS BY CHINESE PATROL CRAFT OVER THE NEXT SEVEN YEARS.

3. THE REASON I MENTIONED ALL THIS WHEN YOU WERE HERE WAS BECAUSE THERE WERE SIGNS THAT, AT OFFICIAL LEVEL, THE MOD WERE GOING TO ARGUE THAT ANY CHANGE TO PREVIOUS OUTLINE PLANS FOR THE MILITARY RUNDOWN MUST LEAD TO HONG KONG PAYING 100 PER CENT OF THE COSTS, RATHER THAN SHARE THEM 65:35 AS IN THE LONG ARGUED DEFENCE COSTS AGREEMENT OF 1988.

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I HAVE NOW HEARD INFORMALLY FROM THE CBF THAT MOD MINISTERS HAVE AGREED IN PRINCIPLE THAT THE PATROL CRAFT SHOULD BE RETAINED 'UNTIL 1997. BUT FINANCIAL ARRANGEMENTS REMAIN TO BE DECIDED.

5. I AM PARTICULARLY ANXIOUS, AS I EXPLAINED WHEN YOU WERE HERE, THAT THIS SHOULD NOT DEGENERATE INTO AN ACCOUNTANTS' WAR''. SHOULD THIS HAPPEN, MUCH OF THE GOOD DONE BY THE AGREEMENT TO RETAIN A BRITISH NAVAL PRESENCE WOULD BE LOST. EVEN WORSE, IF MOD STUCK RIGIDLY TO THE ARGUMENT THAT HONG KONG MUST PAY THE FULL COSTS RATHER THAN FOLLOW THE RULES OF THE DEFENCE COSTS AGREEMENT, WE WOULD HAVE TO PUT THE MATTER TO THE FINANCE COMMITTEE OF LEGCO. THE RESULT WOULD BE AN UGLY ROW WHICH WOULD NOT ONLY AFFECT THE

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