TNAG-2120-FCO40-3026-Hong-Kong-Garrison-future-of-the-Royal-Navy-presence-1990 — Page 24

CONFIDENTIAL

Redacted

lunder FOI exemption 27(1)

He repeated

that the HKG would be helpful over improving the MOD's cash flow problem. He went on to say that he understood the MOD's financial problem, but he hoped that we would not have a similar argument over any changes to other parts of the withdrawal plan.

5. PUS agreed that any solution on the patrol craft which postponed expenditure for the MOD would obviously help ease our financial position in the earlier years. But the fact was that Ministers were firmly signed up to the aim of securing an overall financial benefit to the MOD, and would have to be consulted again if there were to be any change in that position. This would have to be done against the background of a worsening of the severe financial and manpower constraints which had conditioned the original decision last Spring. Shortage of naval manpower in particular could be a major, practical obstacle to running on the patrol craft, regardess of the financial position.

6. After a brief discussion on other Hong Kong issues, the meeting ended at approximately 0950.

ML HOWARD

Deputy Head of Sec (0) (C) MB5340 86272MB