TNAG-2239-FCO40-3218-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 54

CONFIDENTIAL

4.

SECRETARY OF STATE

We believe that this could offer a genuine solution for both

sides. It would not involve any breach of the terms of the formal

Defence Cost Agreement between the HKG and MOD (a prime HKG objective), it would be entirely consistent with the policy of handing over increasing responsibility to the Hong Kong maritime police, and would reduce the overall cost of operating the vessels.

The exact extent of the savings would, of course, depend on the

degree to which RN personnel continued to be employed and the way in which the craft were operated. Nevertheless, we believe that the

HKG would be able to make significant savings which could even make

this option financially comparable with their share of the existing

costs. The HKG team will now report to the Governor and have

undertaken to let us know the outcome rapidly I must make it clear

that unless we can be relieved of the additional costs of running on

these vessels in Hong Kong I must proceed with their withdrawal at the end of the financial year. While I recognise the political concerns in Hong Kong, the pressures on the defence budget are such that it would be quite wrong of me to accept a substantial new

commitment in the absence of a clear military need which would

result directly in a further unpalatable cut elsewhere in the

defence programme.

5. I am sending copies of this minute to the Prime Minister and the Chief Secretary to the Treasury, and to Sir Robin Butler.

Ministry of Defence

10th June 1991

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CONFIDENTIAL

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