TNAG-0568-FCO40-701-Planning-paper-on-Hong-Kong-1976 — Page 13

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Mr Larmour

HONG KONG

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CONFIDENTIAL

2575-475

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14/iii

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1. I should be grateful if you could find time to eek through the attached papers on Hong Kong.

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2. As you will see the Governor is annoyed with us, partly because he has not yet been sent the draft of the planning paper. This is because we have been waiting for the Governor's second despatch on internal policy which we only received on 9 March and you wished to see the Governor's two despatches and the planning paper side by side.

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3. There is, however, I think, more to this. Hitherto we have not really had a properly articulated policy for Hong Kong. Governor has had very wide discretion and he may fear that the policy when agreed will limit this.

4. The planning paper as at first conceived was to deal solely with the problem of how to handle the Hong Kong issue in relation to China (with particular reference to the Secretary of State's forthcoming visit). After I visited Hong Kong last December I concluded however that this was not enough. It seemed to me that there were real problems over relations between Britain and Hong Kong and that there was a need to make faster progress internally. I reached these conclusions independently of the Fabian pamphlet, but this, the increasing number of PQs on Hong Kong and the signs of mounting pressure from the TUC, NEC etc for movement on Hong Kong have confirmed my view that we must push on.

5. It would seem from the January speech of the Colonial Secretary and correspondence with the Governor that the need to do more to improve Britain's image in Hong Kong is accepted. The position on social reform is more complicated. The essential issue here is not so much the objective which I am sure the Governor shares but when and how. We must obviously weigh carefully the Governor's advice on these and must in particular try to avoid a constitutional crisis, but it is also important that we should all agree on the reasons why we need to push ahead rather faster. These are essentially:-

(a)

(b)

Social justice is inherently a good which any Government should seek;

If social progress is delayed, there is a danger that discontent will rise, making for instability and difficulties with China;

- 1

CONFIDENTIAL

/ (c)