TNAG-2239-FCO40-3218-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 53

CONFIDENTIAL

SECRETARY OF STATE

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no significant change in the military factors which underlay the

1987 decision and there is no military requirement for their

retention. Since then, however, political circumstances in Hong

Kong have changed particularly after Tiananmen Square and the

HKG now regards the patrol craft as an important symbol of British sovereignty and wishes to see them retained until 1997. Although this would add to the manning pressures on the Royal Navy, the MOD has been willing to meet the HKG request, provided that this was not

at the expense of the Defence Budget. Various discussions have

taken place over the last 18 months without reaching a solution.

Last week's talks were a last effort to reach a solution as the

first steps in the withdrawal process are now becoming overdue.

3.

Limited progress was made at those talks. I believe that the HKG now has a much better understanding of the pressures on the Defence budget which make it impossible for me to contemplate

accepting an additional commitment of some £15M to meet what is

essentially a political rather than a military need. The HKG

suggested that the cost might be reduced by withdrawing one vessel but this would only save some £2M because it would not reduce the

supporting infrastructure (and there would also be practical

problems in selling or utilising a single vessel elsewhere).

Although we are prepared to consider this as part of an overall solution, it is quite inadequate in itself. Although no new ideas were put forward, the discussions also explored further various earlier MOD proposals and, in particular, a development of a suggestion made last December that the HKG might buy out the MOD'S capital interest in the craft and operate them themselves (although the RN would be willing to provide Loan Service Personnel as part of the crews if required).

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