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2.
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 advantage to the UK of maintaining the present constitutional position in Hong Kong. This is, in any case, a matter on which, at some stagę, we are likely to require the help of the Treasury, as well as of other outside departments, and I see some advantage in seeking it when replying to Mr Barratt's letter.
4. I believe that Mr Batratt's enquiry and the complaint that they (the Treasury) are not being kept sufficiently in touch are related to some lobbying of the Treasury by the Governor and Mr Haddon-Cave during their visit to London
in December and also during the visit to Hong Kong of
Sir D Wass. It would not be in anyone's interest if the Treasury and Foreign & Commonwealth Office were seen to be at odds over our attitude to Hong Kong. I suggest, therefore, that we should make some effort to bring the Treasury closer to our thinking. You might suggest that you talk with Mr Barratt or authorize me (and Mr Maud) to talk with Mr Walker.
5. The formal channel at departmental level of communication with the Treasury is through Financial Relations Department and this is the channel that HKD have used. I see no reason for changing this and I shall, if you agree, discuss with Mr Maud what measures we might take to liaise more closely with them and particularly to make them understand the "UK dimension" of political pressures directed towards Hong Kong.
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6. I submit a draft reply to Mr Barratt's letter. [FRD and Mr Smith, Senior Economic Adviser, concur.
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