SECRET
16376
MDLIAN 261
ON THE ADVICE OF THE MOD.
4. THE REQUIREMENT TO DEMONSTRATE SOVEREIGNTY, AND THE NEED TO PROVIDE AN OPERATIONAL CAPABILITY TO MAINTAIN TERRITORIAL INTEGRITY, PUTS THE RETENTION OF THE EXISTING VESSELS SQUARELY WITHIN THE FRAMEWORK OF THE DCA ARRANGEMENTS. COST SHARING SHOULD THEREFORE CONTINUE TO BE ON A 65:35 BASIS RATHER THAN THE HKG MEETING 100 PER CENT OF THE COSTS AS HAS BEEN SUGGESTED. FURTHERMORE, AMENDING THE TERMS OF THE 1981 SIDE-LETTER AS HAS BEEN SUGGESTED IS, WE BELIEVE, A POLITICAL NON-STARTER. FINANCE COMMITTEE HAVE BEEN TOLD OF THE DETAILED FINANCIAL ARRANGEMENTS FOR THE DISPOSAL OF THE VESSELS, AND WOULD HAVE TO BE INFORMED IF ANY CHANGES WERE MADE. AN APPROACH TO FINANCE COMMITTEE TO SEEK 100 PER CENT FUNDING UNDER THE DCA WOULD JEOPARDISE THE OVERALL AGREEMENT REACHED AFTER SO MUCH EFFORT ON BOTH SIDES IN 1988.
5. IN THE EVENT OF A PUBLIC ROW OVER SUCH FUNDING, WE ALSO RISK CASTING A CLOUD OVER THE SMOOTH IMPLEMENTATION OF THE WITHDRAWAL PLAN, BEARING IN MIND THAT WE ARE DEPENDENT ON FINANCE COMMITTEE APPROVAL FOR FUNDING, NOT ONLY OF THE DCA, BUT ALSO FOR THE REPROVISIONING OF THE MILITARY ESTATE. ONE CASUALTY COULD BE THE PROPOSED NEW NAVAL BASE ON STONECUTTERS ISLAND, PLANNING FOR WHICH IS NOW GOING SMOOTHLY.
6. WE HAVE NOT (NOT) YET CONSULTED EXCO ON THIS ISSUE. IF WE DO, WE WOULD EXPECT A VERY NEGATIVE REACTION. MEMBERS CAN BE EXPECTED TO SUPPORT CONTINUATION OF THE 65:35 COSTS SHARING ARRANGEMENTS EARLIER AGREED, AND TO QUERY WHETHER HMG IS LIKELY TO SEEK A REVISION IN THE LEVEL OF APPORTIONMENT EACH TIME GARRISON WITHDRAWAL PLANNING IS AMENDED TO CATER FOR CHANGING CIRCUMSTANCES.
WILSON
YYYY
ΜΑΙΝ
19
MINIMAL HKD
7V222
DISTRIBUTION
19
DEFENCE D
MR MCLAREN
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