TNAG-0171-FCO40-207-Effect-of-UK-s-economic-measures-on-exports-from-Hong-Kong-1969 — Page 10

SECRET

CYPHER/CAT A

IMMEDIATE F CO

TELEGRAM NUMBER 154

SECRET.

NEUTRAL FRAME

TO OSLO

20 OCT. 1969 (TRADE POLICY)

ADDRESSED TO OSLO TELEGRAM NUMBER 154 OF 20 OCTOBER AND TO COPENHAGEN BERNE HELSINKI LISBON STOCKHOLM VIENNA UKMIS GENEVA.

IMPORT DEPOSITS.

MY TELNOS. 152 AND 153.

PLEASE ALSO PASS ON THE FOLLOWING PERSONAL MESSAGE FROM PRESIDENT BOARD OF TRADE TO MR. WILLOCH. PLEASE TAKE PARALLEL ACTION WITH APPROPRIATE MINISTERS WHO LEAD DELEGATIONS TO EFTA

COUNCIL.

26

BEGINS.

YOU WILL BE INFORMED TODAY OF THE ANNOUNCEMENT ABOUT THE IMPORT

DEPOSIT SCHEME WHICH THE CHANCELLOR OF THE EXCHEQUER IS

TO MAKE IN PARLIAMENT THIS AFTERNOON,

2. I KNOW THAT YOU WILL BE DISAPPOINTED THAT WE HAVE FOUND IT

NECESSARY TO KEEP THE SCHEME IN OPERATION BEYOND THE END

OF THE TWELVE-MONTH PERIOD BUT YOU WILL NOTE THAT WE ARE MAKING

A START ON PHASING IT OUT BY REDUCING THE RAGE. WE LOOK

FORWARD TO ITS TOTAL PHASING OUT AS SOON AS WE ARE CONVINCED

THAT IT IS SAFE TO DO SO.

3. ALTHOUGH OUR BALANCE OF PAYMENTS IS NOW GREATLY IMPROVED

THIS HAS BEEN ACHIEVED BY DOMESTIC MEASURES OF UNPRECEDENTED

SEVERITY AND WE DO NOT FEEL THAT WE CAN PUT THIS ACHIEVEMENT

AT RISK BY A PREMATURE RELAXATION IN ANY FIELD. IF WE WERE TO

TERMINATE THE IMPORT DEPOSIT SCHEME ABRUPTLY THERE WOULD NOT

ONLY BE CONSEQUENCES FOR OUR IMPORTS AND FOR CONTROL OF DOMESTIC

CREDIT, BUT ALSO SOME ADVERSE MOVEMENT ACROSS THE EXCHANGES.

25

FF.

SECRET

/4.