SECRET
#169
cuttached
155
Mr Cortazzi
PS / Mr Blather
HONG KONG: NEW TERRITORIES LEASES
Problem
Hkk.and.t
RECEIVED IN AUS
IND
-
6 AUG 1979
DESK OFFI
Sae (176
NO.
1. The Attorney-General has been shown the latest draft of the proposed Order in Council on this subject. He is unhappy about Clause 3 (the contingent provision for continued administration of the New Territories after 1997) and would prefer to see it omitted.
Recommendation
2. On the Secretary of State's instructions an explanation of the action we propose to take to deal with the leases problem has already been given to the Chinese by HM Ambassador in Peking. I recommend that we await their reactions before making any further attempt to persuade the Attorney-General to change his view. Mr Rushford and Sir I Sinclair concur.
Background
3. A copy of the latest version of the draft Order in Council is attached (the precise form of Clause 4 (the saving clause) is still under discussion with the Hong Kong Government). The Attorney-General's initial reaction to this is in Mr de Winton's letter to Mr Rushford of 16 July. As you will see, his main objection to Clause 3 is that it would have "no effect at the
present time and is no more than contingent provision for a situ- ation which HMG hopes will exist 18 years hence when the 1898 Convention expires". This is an accurate description in so far as it goes. However, our view is that some provision for continu- ing administration after 1997 is necessary to bolster the proposed action on leases. If the Chinese are prepared to allow us to make contingent provision of this kind, there will be a marked effect
on confidence.
4. Sir Murray MacLehose was in London when Mr de Winton's letter arrived. We therefore arranged for him to call on the Attorney- General to explain the background to the problem and the need for Clause 3. An account of the meeting is in my minute of 19 July.
/AS
SECRET