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 ack for its rejection. I therefore think that we need to consider what moves might be possible.

Since

CONFIDENTIAL

/The Governor

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