COVERING CONFIDENTIAL
NKIC131 Flag B Flag A Flag
PKKI8/10
15
If the economy collapsed and we had, even for a transitional period, to subvent Hong Kong on the same scale per head as, say, Gibraltar it could cost us several hundred million pounds
a year.
5. The present situation is therefore in the interests of the inhabitants, the Chinese Government and the UK. "A Case to Answer"'s thesis that China would really like Hong Kong back now is unproven and untrue. Its theme of the miseries of the population is met by the fact that they choose to live in
Hong Kong.
(They could return to China.)
(They could
disturbing the situation would be great.
6.
Moreover the risks of
But this would not excuse complacency. "A Case to Answer" is an attack on the record of the Hong Kong and British Governments. It would be pointless to go through the whole book in detail. The Hong Kong commentary provides answers on some salient points (I have pencilled references to these answers in the booklet). Recent parliamentary answers to Mr Sillars provide others.
7.
Points worth making:-
(a) On page 13 the booklet alleges Government secrecy on
facts. Mr Sillars asked factual questions on four of the questions in the book and got answers to all
of them.
(b) The booklet suggests (page 13) that Hong Kong's
budgetary surpluses were transferred to London to
prop up the pound. This has never been true. HMG have guaranteed the value of Hong Kong's sterling balances, but the money always remained the property of Hong Kong and available to be spent by them. Hong Kong take advantage of the present wholly voluntary agreement to protect the value of their sterling investments. But next year (as was announced in the budget) even these agreements will cease.
COVERING CONFIDENTIAL
/(c).
...