TNAG-0606-FCO40-754-Monitoring-progress-made-on-planning-papers-on-Hong-Kong-1977 — Page 110

Mr Cortazzi

CONFIDENTIAL

COVERING SECRET & PERSONAL

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* 1893.

18 MAR:977

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HONG KONG: THE TREASURY'S INTEREST

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1. You asked for comments on the final sentence of Mr Barratt's

letter of 14 March and a draft reply to his letter.

2. The Treasury may have had grounds for complaint last year that we were not keeping them sufficiently closely informed about matters affecting Hong Kong in which they have an interest.

The Planning Paper particularly was drawn up without consultation with the Treasury or any other outside department. I explained how this came about in my letter of 21 January to Mr Walker in the Treasury (in reply to the letter from Mr Scholar to which Mr Barratt refers). As well as a copy of the Planning Paper, I took the opportunity to send the Treasury a copy of the record of Lord Goronwy-Roberts' meeting with the Governor of Hong Kong and the Financial Secretary on

9 December last at which the prospects for the 1977/78 Hong Kong budget were discussed. Since then you have sent Sir Derek Mitchell, with your letter of 15 February, copies of the minute you wrote about our conversations with hr Haddon-Cave last December and of the Governor of Hong Kong's telegram no 155 containing a preview of the budget. I do not think, therefore, that the Treasury have any current cause for complaint that we are not keeping them in the picture. In replying to ir Barratt, however, you may like to send him copies of Mr Haddon-Cave's budget statement on 2 March and the note on the economic background to it, even though these are published documents which may already be available to the Treasury.

3.

Hitherto, our correspondence with the Treasury has been a little uneven. It is they who have been badgering us for information without providing much in return. I think that we might now seek to restore the balance by inviting them to help with a recent inquiry by Lord Goronwy-Roberts, on which the department is working separately, about the economic v ntage to the UK of maintaining the present constitutional position in Hong Kong. This is, in any case, a

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