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September 1996, leaving a single UK battalion until the end.) Mr Rifkind added that the MOD did not want to discard the option of a more rapid run-down if the tension with China dissipated.
5.
The Defence Secretary gave the Governor a paper setting out a withdrawal plan on these lines. The Governor has now replied making clear that he doubts that this approach would yield the savings he needs to bring garrison costs within the funds voted by LegCo for the current year (the shortfall is some £30 million, including money not yet paid to MOD from last year). The Governor is clear that he cannot go back to LegCo for more funds and suggests that the MOD's review should therefore explore more fully the possibility of early withdrawal of one, or even two, of the existing three battalions.
6. The MOD are now coming round to the idea of a much faster run-down of the garrison, for two reasons. First, the Defence Secretary and Mr Hamilton sympathise with the Governor's feeling that the garrison is most unlikely to have an operational role in Hong Kong and that it is not necessary to keep two battalions there until late 1996. Second, CDS and his people are beginning to cast beady eyes on the battalions in Hong Kong given their need for troops for peacekeeping duties. They see an opportunity to use one of the Gurkha battalions in Belize for six months from October 1993 to March 1994. They are also looking at options for pulling out the UK battalion, perhaps when the Gurkha battalion returns to Hong Kong in March 1994, for peacekeeping duties elsewhere. That would achieve a reduction to two battalions in October this year and to one battalion a year later.
7.
The MOD are assuming that this is what the Governor wants. But I am not clear that he has firmly reached this conclusion. He has asked that the options be examined. I am warning him privately of the sea-change in MOD thinking: the Defence Secretary will be sending him an interim reply shortly indicating the way thinking is moving.
8.
The Secretary of State has not yet chipped in to this correspondence. We need to ensure that the debate about the size of the garrison is not driven purely by costs, but also takes into account the important politico-military considerations: particularly whether a small residual garrison will leave us adequate capability to deal with any foreseeable internal security problems, as well as the perception of a loss of British commitment to Hong Kong. We could send a comment on these lines from the Secretary of State at this stage. But I believe it would be better to try to achieve an agreed assessment with the Governor of the risk of reducing to a single battalion and whether this is acceptable. If we can
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