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PM/83/103

PRIME MINISTER

SCCRET

HKD

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ps / Mr Luce pol pus

Mr Giffard

Page

Copy a

Arte alls

HEGEIN AL

155

Mr Donald

F.E.D.

37

No

R

Future of Hong Kong: Constitutional and Governmental Development

1. At the OD(K) meeting on 13 December, you asked that among the papers commissioned in preparation for the visit of Unofficial members of the Executive Council in January, there should be one examining the scope for increasing internal self-government in Hong Kong. We had another talk about all this yesterday afternoon.

2. As I said at the OD(K) meeting, the Governor has been giving careful thought to this for some time. I enclose a copy of Hong Kong telno 1973 which sets out a draft paper which he has prepared. As you will see the Governor examines the question from the point of view both of demand for increased representational government in the territory and of improving our position as we approach 1997 in order to put autonomy on as sound a basis as possible by that date. As I explained on Thursday, we face at least the minimum need to design a mechanism to replace the present system for appointment of the Governor. It would obviously be helpful if the new arrangements could be engineered from Hong Kong rather than from Peking. This is much more easily said than done.

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The Governor puts considerable emphasis on the need to build on Hong Kong's existing institutions and to retain continuity. For that reason he favours a system of collegiate, rather than direct election, whereby various boards and councils produce the indirectly elected Legislative Council which in turn would elect a Governor. Sir Percy Cradock has been considering the same questions and has, in his preliminary comments, come down in favour of direct elections.

SECRET

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