TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 167

SECRET AND PERSONAL

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4. Our broad position with the Treasury, as I understand it,

is that we are urging them to respond favourably to the latest

Hong Kong proposition. Ironically, however, Sir Murray

MacLehose is telling us at the same time that he doesn't mind

if the proposition put to the Treasury fails. I have not seer

the Executive Committee paper to which he refers, ror do I

know why he and Mr Haddon Cave recommended that Hong Kong

should not "participate" in the guarantee. I find it

difficult to reconcile this with reports from Mr Royle's

Assistant Private Secretary that Mr Haddon Cave was complaining

of the attitude of FCO officials and saying that if he could

not get an agreement he would resign. I am by no means

persuaded, moreover, that Hong Kong are really in a position

to judge without fairly wide consultations what the consequences

to them would be of being seen to leave the framework of the

Sterling Agreements.

judgement that

5. But, even if we could assume that Hong Kong knew exactly

what they were doing and were right in the

they would be all right going it alone, that is by no means

the same thing as saying that IIMG in the UK from their ow

point of view would be satisfied with such a situation. The

matter should not rest in London between "a sordid finarcial

calculation" on the one hand ard pressure from the FCO on the

Treasury to "help" Sir Murray MacLehose on the other hand.

need a sober and detailed calculation of our own interests.

My first reaction is that a non-participation by Hong Kong in

the current sterling arrangements and their successors,

whatever these might be, might not be of any great importance

provided we had thought through very carefully what the political

SECRET AND PERSONAL

/and

We