SECRET
SECRET AND PERSONAL
FR Barratt CB
Deputy Secretary
H M Treasury
Parliament Street London SWIP 3AG
Switchboard 01-233 3000 Direct Dialling 01-233 ....3889
14 March 1977
61
not recet
HAH Cortazzi Esq CMG Foreign and Commonwealth King Charles Street London SW1A 2AH
Dear Hack.
Mr Stewart
Office.
MOVED W
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1 8 MAR 1977
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Please let me Comments on
draft reply
have and
.15 liii.
Derek Mitchell is away at present, so I am writing, to thank you for your letter of 15 February about Hong Kong and for the Interesting accompanying papers, which provide very useful background
for us.
2. You say that the FCO's main concerns in relation to the Hong Kong budget are that there should be adequate funds for essential social programmes in Hong Kong and that criticisms of aspects of Hong Kong's tax structure should be capable of being diffused. I of course understand your position on these points. Equally, I am sure that you will understand that our main concern is that nothing should be done which risks undermining the foundations of Hong Kong's prosperity, given (among other things) the possible financial implications for us of such an outcome. In view of this we need, I think, to keep ourselves generally informed of developments in relation to Hong Kong; accordingly I hope you will agree that we must avoid in future the hiatus in the flow of information between our two Departments which was the subject of recent correspondence beyween Michael Scholar here and John Stewart.
SECRET AND PERSONAL
Cur.
Netrall
FR BARRATT