SECRET
020063
MDHIAN 9151
TARGET FOR 1993-94. BUT I AM SURE THAT IN EACH SUBSEQUENT YEAR THERE MUST BE A REAL DECLINE. I KNOW THAT THIS WILL BE DIFFICULT TO ACHIEVE. OUR PROJECTION OF THE SHORTFALL FOR 1993-94, AFTER TAKING INTO ACCOUNT THE OVERHANG FROM 1992-93 AND HQBF'S LATEST ESTIMATES FOR THE CURRENT YEAR, IS HKD360 MILLION OF GBP30 MILLION CHONG KONG'S SHARE). AS YOU KNOW, THE STRONG VIEW HERE IS THAT LEGCO WILL BE UNWILLING TO AGREE TO ANY/ANY SUPPLEMENTARY PROVISION.
6. IN OUR JUDGEMENT, THE PROPOSALS IN THE PAPER WILL NOT SOLVE ALL THESE PROBLEMS. WHILE THE PAPER HELPFULLY ACKNOWLEDGES THAT ONE OF THE THREE BATTALIONS NOW IN PLACE IS SURPLUS TO REQUIREMENTS, IT DOES NOT ENVISAGE WITHDRAWAL OF THIS BATTALION UNTIL THE LATTER HALF OF 1994. WE WOULD NEED TO EXPLORE THE
FINANCIAL IMPLICATIONS. BUT IF REDUCTIONS IN FRONT-LINE UNITS CANNOT BE ACHIEVED UNTIL LATE 1994, ALL SAVINGS IN 1993-94 AND MOST IN 1994-95 WOULD HAVE TO COME FROM SUPPORT COSTS. I AM
GRATEFUL TO YOU FOR ASKING MOD STAFF TO EXPLORE ECONOMIES HERE.
BUT THE CLEAR ASSESSMENT HERE IS THAT SQUEEZING SUPPORT COSTS
ALONE WILL NOT YIELD THE MAJOR SAVINGS WE NEED. THERE IS ALSO A
REFERENCE IN. THE PAPER TO THE 'COSTS ASSOCIATED WITH THE RUNDOWN'. ANY REQUIREMENTS HERE WILL ADD TO THE PRESSURE FOR
SAVINGS ELSEWHERE.
7. AGAINST THAT BACKGROUND, I PROPOSE THAT THE REVIEW SHOULD EXPLORE THE POSSIBILITY OF:
A) AN EARLIER DATE FOR WITHDRAWAL OF THE FIRST OF THE THREE
REMAINING BATTALIONS: AND/OR
B) USING A BATTALION ON DUTIES OVERSEAS, PERHAPS IN SUPPORT OF OUR UN COMMITMENTS:
C) AN EARLY RUNDOWN OF SUPPORT UNITS, INCLUDING THE OPTION OF UNACCOMPANIED SERVICE (ALTHOUGH I RECOGNISE THE DIFFICULTIES WITH
THIS): AND
D) A FASTER RUNDOWN TO A SINGLE BATTALION.
8. I WOULD ALSO BE GRATEFUL IF YOU WOULD CONSIDER SPEEDING UP THE REVIEW ITSELF. WHEN WE MET IN JANUARY, YOU SAID THAT IT MIGHT BE POSSIBLE TO FINISH IT IN MAY OR JUNE RATHER THAN SEPTEMBER.
PAGE
SECRET
3
No comments yet.
Private notes are available after approval.