Mr. Carter
Reference....... HKK 21/4
707
İsaquince
I have
I have sent Mr. Cotterill in ECGD and Mr. Gowers of the Board of Trade copies of Mr. Hannam's "Christian" telegram at (73). suggested that if such an inspired Question as Mr. Hannam wants were to be asked, it would presumably be answered by their Minister. I have given no indication of our views.
2.
In fact, now that I have considered Mr. Hannam's proposal further, it is my view that this is not a good suggestion.
3. For one thing, if the answer is to bring out the points Mr. Hannam proposes, the exercise savours of an attempt to put the blame, if it is French finance which wins the day, on the Hong Kong Government for not financing the tunnel themselves because they did not think that it was essential. We could not keep the Governor in ignorance that a Pa of this sort was proposed: we should have to consult him. I am sure that he would not agree with the sections of argument reflected in paragraph 3 of Mr. Hannam's telegram.
4. For another thing, knowing what we do of Hong Kong's philosophy in such matters, it is not correct to draw the conclusion that because the Government does not finance the scheme itself, it is not essential. Public transport, which is certainly essential, is in private hands in Hong Kong. I cannot even see how the answer, even to a series of Parliamentary Questions, would convincingly make the points which Mr. Hannam wants.
5. Again, however much we pretended that ECGD had judged the question on commercial grounds with no political overtones, we should not be believed, at least in Hong Kong. It is not even true. We have suggested to ECGD since the Governor told us of the political consequences which would follow if the French financed the tunnel, that we thought they ought to consider their "terms" again. They have done so and their original requirements of joint guarantees has given way to several guarantees. We have reason to think that even over several guarantees they would give way. To what, if not to political overtones, do we owe this relaxation of ECGD's terms?
-
6. Finally, I doubt whether the conclusion at which Mr. Hannam is aiming that if the French get the contract it would be because they judged the matter on political rather than commercial grounds is one from which we would gain credit in Hong Kong. It is a two-edged weapon. in fact, it is hard to determine whether Mr. Hannam is trying to protect our commercial image in Hong Kong or our political image: or both.
7.
I think it is very likely that the Board of Trade/ECGD will see merit in Mr. Hannam's proposal in the light particularly of Mr. Cotterill's letter at (72). But I am convinced that it would not be to the advantage of this Office.
27 February, 1969
(H. H. Stewart) Hong Kong Department