IMMEDIATE
SECRET AND PERSONAL
IN
RAGE. No.31
12
*
UCT 1973
188
HKKS),
JPLA
Sir Duncan Watson
HONG KONG AND STERLING
1. I am somewhat concerned about how matters are developing
on Hong Kong and Sterling.
!
2. I had some talk yesterday with the Minister of Statr
at the Treasury at and after a lunch at the Mexican Frbassy.
Mr Nott's line was that we would have to make a "sordid
financial calculation", ic we would have to weigh the dis-
on the other advantages of letting Hong Kong go on the one hard and/the
disadvantages of making a concession to Hong Kong which might
have repercussions with other Sterling Agreement countries
leading to concessions to them as well. Mr Nott spoke
favourable about Sir Murray MacLehose but was clearly less
than enchanted with Mr Haddon Cave, whom he blamed for the
furore which had gone on in llong Kong, a furore which increases
the danger of leaks about any deal with Hong Kong leading to
demands for concessions from other Sterling Agreement countries.
3. I told Mr Nott that we were very conscious indeed of the
totality of the sterling problem and the necessity of looking
at the position as regards Hong Kong in relation to it. I
reminded him, however, that there were complicated political
considerations. He agreed. He spoke highly of the Secretary
of State's minute (I have not seen this in final form). He
was, he said, disposed to "help" Sir Murray MacLchose. But
obviously he had to be guided to a certain extent by what Treasury officials recommended. I emphasised to him at the
end of our conversation that the presentational problems
involved in any deal with Hong Kong should be relatively easy
to handle.
14. Our
SECRET AND PERSONAL
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