TNAG-2675-FCO40-3872-Hong-Kong-garrison-withdrawal-plan-1993 — Page 152

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transparency (and trust) between HKG and the MOD. After the Governor raised the matter with the Defence Secretary and later Sir C France there does now seem to be a better dialogue at working level. At the Governor's request, Sir T Daunt has also weighed in with the MOD to press them to ensure greater openness over what Hong Kong are paying for and why, and also to look rigorously at support costs in an effort to meet Hong Kong's political requirement for a declining trend in garrison costs starting in this financial year.

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Superimposed on this process, the MOD are reviewing this year their plans for the run-down of the garrison to 1997. preparation for that, they have prepared a short policy paper, which they propose Mr Rifkind should send to the Governor and the Secretary of State, with the aim of reaching political agreement on the main points to guide the full garrison withdrawal study. This paper sets out what, up until now, has been the orthodox view on the garrison run-down accepted by

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the Governor. The garrison would be cut from the present three battalions (two Gurkha and one British) as follows: the first Gurkha battalion in late 1994, leaving the garrison at what the MOD regard as the minimum militarily viable size of two battalions until late 1996 when the second Gurkha battalion would leave. The British battalion would stay right up to the handover.

4. Mr Hamilton has now suggested that, given the Governor's wish to save money on the garrison, and the shortage of British troops for peacekeeping activities world-wide, the MOD should consider much more radical surgery on the garrison, reducing it to a single battalion as soon as possible. The MOD are still considering this proposal. Mr Rifkind is due to discuss it with his team next week, and to let the Governor have his conclusions when they meet on 15 April.

5. Action in hand is therefore as follows:

The MOD and the Hong Kong Government now have a more open dialogue about garrison costs, and are looking for ways of accommodating the shortfall in HKG's estimates for FYS 92/93 and 93/94. The MOD are more alive to HKG's real political problems with LegCo and the need to look carefully at support costs for the garrison. We will continue to urge the MOD to cut out fat from the garrison wherever possible.

Once the MOD have worked out their line on Mr Hamilton's proposals for radical surgery, Mr Rifkind will write to the Governor, copying to the Secretary of State. That will be the opportunity for us to put in a formal comment.

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