TNAG-2677-FCO40-3874-Hong-Kong-garrison-withdrawal-plan-1993 — Page 113

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

A NOTE ON POINTS MADE BY S FOR TSY

DURING LUNCH WITH

MOD OFFICIAL ON 21 OCTOBER 1993

1.

Grateful for the hospitality of lunch. It gives me an opportunity to

speak informally and very candidly about the wider and more

important issues between HKG and UKG affected by the talks.

2.

Frankly disappointed by the outcome of this round of talks. Probably

HKG's fault in not explaining the Hong Kong position clearly before

hand. The talks have come to a very critical stage posing great risks for

both HKG and even more so for UKG.

3.

Two big issues are involved. First, UK income tax and, second, possible

cost overhang together with very heavy expenditure forecast in 1994-95

despite the rapid run-down in garrison strength.

4.

All senior officials including the Governor privy to the recent rounds of

talks have been genuinely surprised by the discovery that UK income

tax has been charged, and even topped up, under the 1988 DCA across

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