TNAG-0753-FCO40-957-Future-of-Hong-Kong-1978 — Page 112

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HKK Ovall RECEIVED DI MOstay NO. 51

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Sir Hurray MacLehose GBE KOMINDECKO Governor and Commander-in-Chief

Government House

OFFICER

PA Actig september 1978

187°

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REGISTRY

PT. BU GU

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The. Mc Laren

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Please discuss

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210

HONG KONG

See 198

NEW TERRITORIES LEASES

1.

hear from both HK aw

We discussed your letter of 6 July at the meeting which you attended in Donald Furray's office on 17 August. The FCC represen- tatives argued and I think you accepted that the wider political issues involved in the question of New Territories leases, including the timing and nature of an approach to the Chinese, the tactical handling of it, and the coucessions which might be made in retura for an acceptable understanding were matters best considered in the context of a review of the relevant sections of the 1976 Planning Paper. This remains our view, and I hope to write to you shortly about this wider ranging exercise. But we fully accept that the problem of the New Territories leases will have to be faced anyway during the next few years, nd that ways and means of dealing with it should be studied separately as a matter of priority.

2.

As you kno: our Departmental legal adviser does not share your law officers' view that the Hong Kong Government cannot legally grant leuses extending beyond the expiry date of the New Territories Lease. Ile is quite clear that under international law the United Kingdom possesses rights of sovereignty over the leased territories, and that neither a fresh grant of jurisdiction from the Chinese nor legislation in the United Kingdon or Hong Long would be necessary before such leases could be granted. But he agrees with the advice given to you chat legislation in Hong Kong (but not necessarily in the United Kingdom) will be needed if we should decide that the special circumstances of the case call for some novel form of lease not permissible at common law. I enclose a note setting out kushford's views at greater length.

3. We discussed the requirements for a new form of lease to replace the current Crown leases in the New Territories. In the first place the chosen solution must "obliterate the legal and administrative significance of 1997" (as you put it in your letter) in a way which is not open to challenge in the Courts of Hong Kong. Secondly, it must be acceptable to the Chinese, which means (barring unexpected developments in the Chinese attitude) that it will have to be compat- ible with their position on the treaties, and their view that the problem of Hong Kong is one to be settled "in an appropriate way when the time is ripe. It will also be highly desirable that the solution should be one which requires no action on the part of the Chinese other than acquiescence in steps taken in Hong Kong. These steps should be kept as simple as possible so that they can be readily understood by the Chinese.

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