TNAG-2677-FCO40-3874-Hong-Kong-garrison-withdrawal-plan-1993 — Page 84

SECRET

IMMEDIATE

3. The Defence Secretary however agreed that officials should

cost the Treasury proposals. The outcome is that the MOD now

acknowledge that the Treasury proposal to return the UK Battalion

from 1 April 1995 would indeed save

30 million for the MOD

budget. But the MOD have continued to argue that no decision

should yet be taken, pending the outcome of the current PES Round

and the Defence Costs talks. The Chancellor is pressing for a

decision now: partly on the grounds that it would not make sense

to conclude the Defence Costs talks with the Hong Kong

Government, and then to introduce this large new factor shortly

afterwards.

'ว

32

Foreign

4. We believe that the time has now come for the

Secretary to intervene. As you will appreciate, the FCO are

caught in an awkward position. Both the Treasury and the MOD

would regard it as a breach of faith for us to bring you into the

internal Whitehall debate, the outcome of which would

theoretically be a further negotiation between MOD and the Hong

Kong Government about costs. On the other hand, it is clearly

essential that you are fully and properly consulted before any

decisions are made, on the basis of a detailed account of costs

In the circumstances, I propose that

we should invite the Foreign Secretary to make the following

points:

which might accrue to HKG.

The whole basis for the decision by OPD (K) to go for faster

run down of the Garrison was your judgement that it would not

be possible to secure Leg Co agreement for continued funding

under the DCA unless the costs of the Garrison to HKG

diminished year on year;

Since then, the MOD have announced with considerable fanfare

the faster reduction of the Garrison. Acceptance by LegCo of

cost savings have grown accordingly;

There is no question of your being able to secure LegCo

for distribution order see Page

Catchword.

agreement

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