TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 198

LE MON

SECRET

4.

First, I think I should let you see, strictly for your own eyes, the enclosed copy of a telegram which we received following his recent talk with Mr Royle in Singapore and which landed on my desk almost simultaneously with your letter. (We have not of course let the Treasury see this, and I hope what Philip is reported as saying will not reach them through their own sources of information).

5.

We do of course fully understand the problems and difficulties - political as well as financial - to which the whole Treasury handling of the sterling agreements (and in particular its protracted course) has given rise at your end. In fighting your battles at this end, however, we have to do so within the concept of the totality of the sterling problems which the Treasury are facing and the important position of Hong Kong within it.

j

6.

Moreover, as a former Colonial Service officer, I entirely comprehend and indeed sympathise with Philip's sense of "first loyalty" to Hong Kong - that is part of the tradition in which I was myself raised! But if that loyalty is taken beyond a certain point, either by way of bargaining tactics or simply in sheer forthrightness and extremity of expression, it can do harm to the case which is being fought with Whitehall, and does not help those of us here whose job is to try to get a fair and workable balance struck between Hong Kong and UK interests. I sometimes can't help feeling (and I am not alone in this) that Philip, in the very difficult and responsible role which he carries so stoutly, is none-the- less over-committed to the hard line with Whitehåll.

7.

I fully expect that he might retort (and you might well agree) that he is not prepared to pull his punches in the hope that we weak-kneed chaps here might do better for him: and I am certainly not trying to suggest that the faults are all on one side. What I am trying to wrestle with is the basic problem facing all of us who have responsibilities for the good administration of Hong Kong - and I know how much alive. to that you yourself are. Following your talks here, the Secretary of State has sent a minute to a number of his colleagues, making the point that HMG as a whole have a responsibility towards Hong Kong and emphasising the need to balance the United Kingdom and Hong Kong interest across the whole field; and the Prime Minister has called for a general review of our relations with the Colony before his visit early next year.

We have something here to build on. As part of the process, I wonder is there anything more you and I can do at either end to get more understanding and trust into official relations at least, based on the mutual realisation that, while your chaps naturally fight Hong Kong's corner and while we in the Office naturally must work as part of HMG in the UK, our job at both ends is the same and must remain so as long as HMG remains responsible for Hong Kong, ie to find the way together of building bridges over problems.

SECRET

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