TNAG-0275-FCO40-311-Development-of-Kai-Tak-airport-at-Hong-Kong-1970 — Page 10

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D

Mr. Mirora ford

Xiallo

Mr.

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Кайнен

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. (0.1.) (20)

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I have seen Mr. Laird's submission to you of

30 September about the Kai Tak airport extension.

2. I realise that the immediate proposal in paragraph 5

of that submission is simply for an interim answer by the Parliamentary Under Secretary to enquiries about HMG's position. But I think it would be quite wrong for Mr. Royle

to give the kind of answer that is proposed to any such enquiries without Treasury (and preferably ODM and Board of Trade) concurrence. So far as I know, it is not in fact true to say that we are looking at this question in the

context of the over-all review of the nation's economy

I have seen no sign of this item coming up in the current public expenditure exercise, and I think that the Treasury might take exception to having this publie complication

injected into their proceedings.

3. I think they might particularly take exception to this in view of the longer term proposal which Mr. Laird advances for a British Government guarantee of a Hong Kong loan in the

City.

I should have thought Treasury objections to this proposal would be extremely strong; so far as I know, the British Government has never guaranteed a Colonial loan,

nor an Indian loan in the days when we were responsible for India. And I am sure the Treasury would think that this was a quite impossible moment to give any such guarantee against

British revenues.

e.g.

4. If it were felt that Treasury concurrence should be sought for Mr. Royle to speak in the way proposed, I think it would probably be best raised at Ministerial level by means of a letter from Mr. Royle to the Financial Secretary

to the Treasury.

5. Mr. Wade Gery has just suggested to me a conceivable technique by which it might be possible for Hong Kong to raise money in the City of London for this purpose, without running into Treasury snags. This would be to employ a device which I understand the Government of Singapore have invented,

/and

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