TNAG-2238-FCO40-3217-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 179

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Sir John Chapple, the Chief of the

General Staff, called on the Governor on 7 January. The following were the main points discussed:

(a) The Governor asked what effect the Gulf crisis

had had on forward planning in MOD. On the face of it, it seemed odd that MOD should be planning cuts in the armed forces at the same. time as preparing for a possible war. The CGS said that planning for defence cuts had been underway since the beginning of 1990. Ministers now needed to take a decision in principle on the level of cuts. MOD would then look at the details of how these cuts would be achieved, at which point there would be intense lobbying. His own view was that Ministers were likely to delay taking this decision until after the Gulf crisis. However the MOD budget contained cuts with effect from the financial year 1991-92.

(b)

The Governor said that we needed to maintain control over Hong Kong's territorial waters. If the MOD insisted that we should pay a higher proportion of the costs of retaining the RN patrol craft than the 65% provided for under the DCA, this would cause an immense political problem. Some members of LegCo would be very keen to re-open the debate over the whole DCA. He did not wish to let them have this chance. We were prepared to be as flexible as possible on the financing arrangements within the overall parameters of the DCA.

(c) CGS said that the Chiefs of Staff had endorsed the proposal that the patrol craft should stay in Hong Kong after 1992. Since then the matter had been handled by financial experts. He personally sympathised with Hong Kong's arguments, and recognised that it was important to establish a principle for the rest of the run-down period. He would be prepared to look into the matter on his return to London. He asked if there was any particular deadline for a decision. CBF said that the patrol craft were due to be withdrawn in 1992. But work would begin soon on the new

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