TNAG-2677-FCO40-3874-Hong-Kong-garrison-withdrawal-plan-1993 — Page 81

Mr Hum

SECRET

нка 06311

1- NOV 1993

RY

File

165

FROM: P F Ricketts

PA

STRY on Taken

Hong Kong Department DATE: 16 November 1993

cc: Sir J Coles Sir T Daunt

HONG KONG: GARRISON RUN-DOWN

A

1. The Chancellor's latest minute in his correspondence with the Defence Secretary puts us in an awkward position vis a vis

the Governor.

B

2. The Treasury have been pressing (ever since the OPD (K) decision last June to accelerate the run-down of the Garrison)

for the Battalions to be withdrawn in a different order. The

net effect would be that the UK Battalion would return to Hong Kong sooner than foreseen in the Foreign and Defence Secretaries' Paper to OPD (K)). Since Hong Kong pays 65% of the cost of units stationed in Hong Kong, this would save the OPD (K) budget some £30 million, over the period of 1997. A good deal of this (I am not clear whether all) would fall on HKG.

3.

So far the MOD have resisted this stoutly, in part because of the difficulties it would create for the Governor in terms of

securing LegCo funding. We consulted Mr Goodlad on the Defence Secretary's minute of 12 October. He (and Private Office) agreed that it was not necessary for the Secretary of State to chip in at that time, since the Defence Secretary was making the

right points.

4. In view of the Chancellor's latest letter, I believe that the time has now come for the Secretary of State to intervene.

garr.PET.JRB

SECRET