CONFIDENTIAL

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Commons Select Committee on Expenditure late last year. This memorandum, which was prepared in my department in

consultation with FED, the Governor of Hong Kong and HM Embassy Peking, contains, inter alia, the following

statement:-

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"Hong Kong is a Crown Colony and the Secretary

of State for Foreign and Commonwealth Affairs is responsible to Parliament for the Government there. The Colony's constitution is contained in Letters Patent and Royal Instructions issued to the Governor of Hong Kong.

The Governor is both the representative of, and responsible to, the Crown whose views are conveyed through the Secretary of State. The Governor is the supreme authority within the Colony

However, the Letters Patent formally reserve to the Crown the power of disallowance of any Ordinance enacted in Hong Kong and the power to legislate for the Colony by prerogative Order-in-Council. Furthermore, the UK Parliament has power to

legislate for Hong Kong by Act of Parliament."

The memorandum was published on 24 March this year as Appendix 5 to the Third Report from the Expenditure Committee for the 1975/76 Session (House of Commons Paper 270). While the statement contained in this memorandum did not make use of

the term "sovereignty", HMG's powers in Hong Kong are clearly set out and the memorandum could be regarded as the most recent

definitive public statement on the status of Hong Kong.

4. It has not proved possible to discover a public statement by a representative of HMG, whether in Parliament or in an international organisation or elsewhere, containing a bald assertion of sovereignty over Hong Kong. The research so far undertaken suggests that we may well have been as much concerned in the past as we are at present to avoid making a public

assertion of sovereignty.

for this attitude.

There appear to be two explanations

15. The

CONFIDENTIAL

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