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exodus of UK Passport Holders from Uganda indicates how serious this problem could be for us; and the exodus from Vietnam suggests that the scale could be much greater than might be expected in advance. There is furthermore the risk of a collapse of one of the is furthermore gat plagell Muthion walioon
chalance. Co world's leading financial centres which could have wide repercusions; and a contingent aid liability of substantial proportions if, as we could expect, loss of confidence in the Colony were to lead to industrial decline and unemployment. It is
impossible to forecast at what stage such problems could
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confidence began to erode swift. And As the history of Macao shows, there is no guarantee that China would be prepared to resume possession however desirable this might be to the colonial power and we could not look to Peking for help in overcoming our problems. These problems may be manageable when the time is ripe to discuss the whole issue with China and provided China can be persuaded of the need for a jointly agreed policy as to what is to be done for the future. Any premature move, however, might well be disastrous and one for which we would be held
responsible.
4.
Aloit
There are undeniable disadvantages in the present connection. Politically it is embarrassing for HMG to be answerable to Parliament for the
Calomal internal policies of another Government which must act in a cultural, racial and economic environment
very different from our own. There are constitutional powers for Parliament to legislate for the Colony; but equally there are practical and political limita- tions to these powers and no Government has since the war exercised them. Influence on the Colony's internal policies is exercised indirectly through the Governor; but even his powers are in practice limited by the need to consult the Executive Council
and to legislate with the advice and consent of the
ol Legislative Council, (on whose Finance Committee there
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3. SECRET
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8507 D.073939 200M. 11/74 Cr.P.C. Gp.839/3