CONFIDENTIAL

Debates have now been held in both Houses.

You will, I am sure, have received reports on these from David Waddington and Simon Glenarthur. In the Commons almost every speaker urged the Government to make concessions, though a few on the Government side suggested that to concede British citizenship to the ethnic minorities would be wrong at this stage. In the Lords, no-one spoke in favour of the Government : most of the speakers favoured concessions on all three of the Legislative Council requests, with particular emphasis on the extension of British

citizenship to the ethnic minorities.

If we make no concessions on any of these proposals, the Governor of Hong Kong has advised that there will be an open confrontation between HMG and

the Hong Kong Legislative Council. We have managed, not always easily, to come through the last three difficult years in Hong Kong, including the period of the conclusion of the agreement, without such a confrontation to fail now would be very damaging,

not least to the Hong Kong Government, and it would

undermine what we have achieved so far by the agree-

ment.

If we make no moves, the Unofficial members

of the Hong Kong Executive and Legislative Councils

will not give up they will send a delegation here

to lobby the Prime Minister, and they will lobby

extensively in Parliament against the Crder.

it cannot be amended in Parliament when we put it

forward for final approval, they will ask for its

rejection. I therefore think that we need to

consider what moves might be possible.

Since

CONFIDENTIAL

/The Governor

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