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DRAFT MESSAGE TO GOVERNOR, HONG KONG, FROM SECRETARY OF STATE FOR TRADE AND INDUSTRY
YOUR TELEGRAM NO 1417 MASS TRANSIT
FOR GOVERNOR PERSONAL FROM SECRETARY OF STATE FOR TRADE AND INDUSTRY
I have looked at your suggestion for bringing the Anglo-Italian Consortium's proposals within the ceiling suggested by the
Steering Group, but cannot recommend it here. A guarantee
would commit the UKG over a period of years to put up perhaps
£36-40 million as, in effect, a grant-in-aid to Hong Kong.
Hedging might get us out of it, but, as you have recognised, one
has to hold to this kind of promise. This leaves out of account
the problem of persuading the Italians to put up the £60 million
odd guarantee needed from their side. Finally, whatever we
might say, a precedent of incalculable effect would have been
created and this is unacceptable.
I must ask you to do everything possible as far as the Anglo-Italian
Consortium is concerned. Hong Kong has much to gain in Europe and
the public reaction both here and on the Continent would be one of
very considerable disappointment if this very fair bid is rejected.
SECRET