TNAG-2238-FCO40-3217-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 169

SECRET

63645

PERMANENT UNDER-SECRETARY OF STATE

SIR MICHAEL QUINLAN K68 GCB

PUS/E91/140

9/20

Dear David

HONG KONG PATROL CRAFT

MINISTRY OF DEFENCE_HA 063/1

MAIN BUILDING WHITEHALL LONDON SW1A 2HB

Telephone 071-21 82193 (Direct Dialling1

071-21 89000 (Switchboard)

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4 February 1991

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Mr. Burns

Inclypper Rady

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W12/2

12/2

Arslons w/2-191

My 21 December acknowledgement of your letter of 13 December, which followed our helpful discussion the previous week, promised that I would write again as soon as I could about the patrol craft.

This is a difficult issue, and I have therefore thought it right to go over it again with the Chiefs of Staffs and Ministers before replying to you. The firm conclusion which emerges is that we cannot see our way to change our basic position. The military case for retaining the patrol craft in Hong Kong after 1992 could not by itself justify the allocation of defence funding. The worsening of the position on the Defence Budget since we first reached this judgment in April 1990 and I have to say that, the Gulf quite aside, I cannot recall a time when our forward budget faced problems of such severity as now - serves only to reinforce the point. Pressure on naval manpower again sharply increased since last April 1990 would also make it difficult, in purely practical terms, for us to retain the patrol craft after 1992.

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Nevertheless, we appreciate the political considerations in favour of keeping an afloat naval presence in Hong Kong, and we remain ready to discuss how this might be done in a way which keeps pressures on Defence resources to a minimum. At the least, therefore, we would expect to see a very substantial contribution from the Hong Kong Government towards the additional costs that would fall to MOD from retaining the patrol craft after 1992. The size of such a contribution would be a matter for negotiation; but I have to say now that we can no longer regard as adequate the distant financial saving that would accrue from adopting the proposal floated by Terence Brack in December, which envisaged the Hong Kong Government's waiving its share of the disposal value of the craft in 1997. That offer must therefore be withdrawn. A fortiori, changes which simply modified the profile of costs, though useful in themselves, would not come near meeting our need.

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SECRET

Hidden copy to:

Sir Patrick Wright