CONFIDENTIAL COVERING SECRET
D A Walker Esq Assistant Secretary
HI Treasury
21)
21 January 1977
LAST
(81) Pme til!
1. Michael Scholar of the Treasury has written to me about a Planning Paper concerning Hong Kong which has been prepared in the FCO. It so happens that for some time Humphrey Maud and I have been discussing; the Paper with a view to showing it to you.
have now agreed that I should send you (as the Head of that Pentuent of the Treasury most concerned) a copy.
2. The Planning Paper on Hong Kong, which was completed and approved by CO Ministers in the spring of last year, resulted from the view taken by the previous Foreign and Commonwealth Secretary that the time had come for Hong Kong to make a substantial move forward in terms of improving social conditions. It was throught that such a Paper would provide a useful basis for the discussions that the Secretary of State was to have with the Governor of Hong Hong when he visited the Colony in the spring of last year. In the event, there was a change of Secretary of State and ir Crosland decided against visiting Hong Kong at that tire.
3. The Planning Paper was drawn up in close consultation with Hong Kong and the final version was agreed to by the Governor. It was not thought necessary to involve other Departments in
hitehall in the preparation of the Paper and its high security classification - it was originally classified TOP SECRET and later SECRET in view of sensitive references to China's position --- would have made such consultations difficult. No doubt, that difficult could have been overcome but I believe the view was taken in this Office that, given the remit from the Secretary of State, it was open to officials to prepare and finalize a Planning Paper without reference to other Departments. It was accepted, of course, that if this were done other Departments could not be regarded as bound by what any such Paper said.
4. I enclose a copy of the Planning Paper. You will wish to look particularly at paragraphs 22-25 of the main part and
CONFIDENTIAL COVERING SECRET
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