CONFIDENTIAL

agreement.

There could be some parliamentary questioning of why it is necessary to legislate so far in advance for the termination of sovereignty. The answer is that we need to legislate so that we can ratify the The reason why we negotiated and concluded an agreement

now rather than closer to 1997 was to give Hong Kong the certainty that it needed if stability and prosperity were to be maintained and if planning for the future was to be possible. The date on which the termination of sovereignty will take place is known and is not a

matter for any further negotiation. There is therefore no reason to avoid including the necessary provisions in the Bill. This clause proved to be uncontroversial in the House of Commons.

CONFIDENTIAL

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