TNAG-2238-FCO40-3217-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 176

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On 7 December the Governor called on Sir Michael Quinlan, Permanent Under-Secretary at the Ministry of Defence. The following were the main points discussed: -

(a) The Governor said that, during Sir Michael's

visit to Hong Kong last December, he had mentioned to him the need to keep the Royal Navy patrol craft beyond 1992 in order to prevent encroachment by the PLA Navy. He had also said that he hoped it would be possible to avoid a dispute about the financing of this. If we had to go to Finance Committee, it would create major problems for the DCA as a whole. The problem that he had foreseen now seemed to be happening, in that HKG had been told that we would have to pay more than 65% of the cost if we wished to keep the patrol craft. We were willing to be as creative as possible in assisting MOD with their cash flow, but any arrangement that involved us contributing more than 65% would require approval by Finance Committee. He understood that the talks that had taken place in Hong Kong had not been productive, and that the problem seemed to be the overall level of MOD's contribution. He was very keen to avoid a row and accepted that this was not a good time to be arguing with HMG about money. But the Gulf crisis did not cut much ice in Hong Kong. Moreover, the approach of the 1991 elections meant that this subject would be a perfect issue for budding politicians to use to attack both HMG and the Hong Kong Government;

Mr.

(b) Sir Michael Quinlan said that the patrol craft

did not rate as a priority for MOD. Hamilton, the Minister of State, had endorsed the proposal that MOD should seek a more favourable arrangement than the DCA if the patrol craft were to be retained beyond 1992. The Governor said that if it came to this, we might have to accept that the patrol craft would have to go. But this would have difficult implications both for the situation on the ground, where there was a genuine military need for them, and for HMG's commitment to the Chinese to keep the Royal Navy in Hong Kong up to 1997;

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