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POINTS TO MAKE BY PUS WITH SIR MICHAEL QUINLAN : ROYAL NAVAL
PRESENCE AFLOAT IN HONG KONG
Greatly concerned that MOD and HKG have been unable to
reach agreement on how to finance the cost of retaining the
Royal Naval patrol boats in Hong Kong after 1992. Your
latest letter leaves very little scope for compromise.
Do not underestimate MOD's budgetary difficulties. But
there are strategic issues at stake for HMG.
Witness
The problems facing the Governor are very real.
the major political effort he has had to make to secure the
voluntary contribution of £15 million to the Gulf War, which
Hong Kong has announced today (8 February). We have plenty of allies in Hong Kong. But memories of past battles over
defence cost sharing remain fresh.
Although this contribution is given with certain strings (for logistics, medical, humanitarian and other support), you are getting an unlooked-for windfall of twice the cost to you of the patrol craft over five years. Surely it is possible for you to take some account of this and let the
Hong Kong Government off the hook.
The current Defence Costs Agreement (DCA) runs for ten
years (rather than the five in the past) precisely because all concerned wanted to avoid further bruising negotiations
in the run-up to 1997. Governor has bent over backwards to
find ways to accommodate MOD concerns yet retain the Royal
Navy presence. But his local imperative is not to have to call in question the DCA (which is why your latest idea will not work). Most regrettable if every time there are any
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