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CONFIDENTIAL
FROM:
HKB 063/1
RECEIVED IN RECISTRY
18 MAR 1991
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RJ T McLaren
DATE:
21 February 1991
Cc:
Mr Burns o.r.
Mr Paul, HKD
HONG KONG: PATROL CRAFT
1. I had some opportunities to discuss this question at a lunch which the Chief of the Defence Staff and his colleagues gave today for the PUS and DUS's. The background was a dire warning from the CDS about the very serious financial problems which the MOD now faces, and which will require Ministers to take very difficult decisions about what can be cut where.
2.
The CGS, General Sir John Chapple (former CBF Hong Kong), said he had been arguing the Hong Kong case within the MOD. He personally thought the HKG's offer of money up front a good one and had commended it. Sir Michael Quinlan was sympathetic. The difficulties lay with some of his officials, particularly on the financial side who thought that Hong Kong could and should pay more. He doubted whether Lord Caithness would get much change out of Mr Hamilton, who had no understanding of the political dimension and took the view that Hong Kong was rich and could afford to pay.
In private conversation Sir M Quinlan laid some of the blame at the door of the previous negotiations. Some of his officials had been scarred by the experience and were determined to wring more out of Hong Kong. He understood Sir D Wilson's political difficulties and accepted that the Governor could not go back to EXCO. Nevertheless, some more money from Hong Kong was needed if a deal was to be done. said that the essential point for Hong Kong was that the 65-35 apportionment should be preserved. Sir M Quinlan thought that with goodwill it should be possible for the HKG to come up with some more money without changing the ratios. What was needed was one more shove.
RJT MCLAREN
RM2ABJ
CONFIDENTIAL
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