Copy Typed from amended original
(Whit
CONFIDENTIAL
Foreign and Commonwealth Office London SW1
14
Telephone 01-
Your reference
RE.
REA!
REF
(2)13
3
Sir Murray MacLehose KCMG MBE
HONG KONG
HONG KONG BUDGET
RECEIVED IN REGISTRY No. 51
- 8 APR 1974
1/20
HKK 5/20
Our reference
5 April 1974
Date
to
1.
We have submitted the Budget details and your telegrams nos. 257 and 258 at official level, but not, at this moment, Ministers. We have not thought it necessary to trouble them at this early stage in the Government; because although, as you say, the possibility of misunderstanding did exist, in fact, as you also foresaw, Haddon-Cave's speech was largely overlooked in the election flurry.
2.
Moreover, as far as the UK is concerned, a potential gap between expenditure and revenue is perhaps not as shocking as in Hong Kong. Indeed in so far as it demonstrates your determination to press ahead with the social programme despite possible financial difficulties, it could, I think, be a plus point in the Hong Kong Government's relations with HMG. If Ministers are attacked about anything to do with Hong Kong, it is more likely to be because of alleged Hong Kong niggardliness in social expenditure, than because of any accusations of profligacy in a difficult financial situation. The Budget is therefore a useful argument against those who claim that you are not doing enough. If need be, we will use it as such.
A C Stuart
Hong Kong & Indian Ocean Dept.
CONFIDENTIAL