TNAG-2120-FCO40-3026-Hong-Kong-Garrison-future-of-the-Royal-Navy-presence-1990 — Page 52

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CONFIDENTIAL

1. In the light of political developments in Hong Kong, the

planned withdrawal of the three remaining Hong Kong patrol

craft was re-examined earlier this year by the UK government.

Notwithstanding the severe financial pressures then facing the

defence budget, Ministers agreed to consider retention of the

patrol craft subject to negotiation of a satisfactory

financial arrangement which would recognise that retention

would be primarily to meet the political requirements of the

Hong Kong government rather than military needs. Any such arrangement would need to ensure that the cost to the defence

budget was kept to the absolute minimum and offset the

unplanned costs the UK government would otherwise have to

incur between 1992 and 1997.

2. Since then the financial pressures on the defence budget

and the Royal Navy's manpower problems have worsened

significantly. It will therefore be necessary to place this issue before Ministers again very shortly. In the event that a

satisfactory financial settlement cannot be reached, Ministers

would be recommended to re-affirm their earlier decision to

withdraw the craft as planned in 1992.

CONFIDENTIAL