CONFIDENTIAL
DRAFT LETTER TO PS/PRIME MINISTER
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FUTURE RN PRESENCE IN HONG KONG
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1. Thankyou for your letter of 24 July recording the Prime
Minister's view that we should retain three patrol craft in
Hong Kong, with the financing to be pursued in the PES round.
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2. The Defence Secretary is content that we should now plan on
retaining three patrol craft until 1997, but on the clear
understanding that the defence budget will be compensated for
the extra cost of doing so from one source or another.
Furthermore he believes strongly that much the preferable
source remains the Hong Kong government and that the FCO should press hard for the funds to be made available from them. If it comes to the point of having to seek funding
through PES we would need an assurance that the MOD would not
have to find offsetting savings to meet what is in effect an imposed additional commitment - and in this respect the Chief
Secretary's minute of 23 July is relevant. It follows from
this that if both these avenues fail to yield the necessary
finance, the Defence Secretary must reserve the right to
review the decision to retain the patrol craft.
3. On the Lord Chalfont PQ, the immediate answer is an
undertaking to write, being given today before the House
rises, to be followed up by a substantive reply saying that on
current plans we intend to retain three patrol craft in Hong
Kong until 1997. This will also time for any other reactions
to your letter to be considered.
4. I am sending copies of this to Richard Gozney, Nicholas
Holgate and Sonia Phippard.
CONFIDENTIAL
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