SECRET AND PERSONAL
1
4. Our broad position with the Treasury, as I understand it,
is that we are urging them to respond favourably to the latest
Hong Kong proposition. Ironically, however, Sir Murray
MacLehose is telling us at the same time that he doesn't mind
if the proposition put to the Treasury fails. I have not seer
the Executive Committee paper to which he refers, ror do I
know why he and Mr Haddon Cave recommended that Hong Kong
should not "participate" in the guarantee. I find it
difficult to reconcile this with reports from Mr Royle's
Assistant Private Secretary that Mr Haddon Cave was complaining
of the attitude of FCO officials and saying that if he could
not get an agreement he would resign. I am by no means
persuaded, moreover, that Hong Kong are really in a position
to judge without fairly wide consultations what the consequences
to them would be of being seen to leave the framework of the
Sterling Agreements.
judgement that
5. But, even if we could assume that Hong Kong knew exactly
what they were doing and were right in the
they would be all right going it alone, that is by no means
the same thing as saying that IIMG in the UK from their ow
point of view would be satisfied with such a situation. The
matter should not rest in London between "a sordid finarcial
calculation" on the one hand ard pressure from the FCO on the
Treasury to "help" Sir Murray MacLehose on the other hand.
need a sober and detailed calculation of our own interests.
My first reaction is that a non-participation by Hong Kong in
the current sterling arrangements and their successors,
whatever these might be, might not be of any great importance
provided we had thought through very carefully what the political
SECRET AND PERSONAL
/and
We