SECRET
7. Rushford's view is that no new legislation would be required to change current leases to leases for a fixed period, whether or not a qualification was incorporated (ie the solutions at (a), (b), (c) and (e) above); the change could be effected by administrative action, though it might be thought preferable to proceed by way of legislation. The other solutions ((d) and "undetermined" leases) would require legislation in Hongkong, but not, in fushford's view, in the UK.
8. In the light of this brief analysis my own feeling is that the most promising solutions are (c) and (e) (if we could get either of them) followed by (d) and your own "undetermined" proposal.
9. Aushford points out (paragraph 10 of his note) that leases which determine when the Crown ceases to occupy the leased territ- cries are less advantageous to the tenant than those for a fixed period or "perpetual leases" since the tenant would be deprived of his interest when in due course the leased territories reverted to China. If the chineLe simply walked in it is unlikely that they would be very particular about the precise terns upon which the long kong Government had granted leases. If there was a negotiated transfer of power the British side would surely try to get the Chinese to accept cone arrangement which protected the interests of tenants.and it would be easier simply to negotiate a general arrangement that protected existing ittles throughout the Colony (including the leased territories) than to have to negotiate an additional arrangement that expired Crown leases in the leased territories were to be treated us if they had not expired.
10.
We will clearly need to put the legal issues involved in this question to the united kingdon Law Officers at some stage but
tushford takes the view, and I agree, that we should take matters rather further between ourselves before doing so. I should there- fore be grateful for your comments on the points made in this letter and, in particular, on the alternative solutions listed in paragraph 5 above. It would be helpful to know whether (eg because of the number of leases involved) you regard it as desirable to proceed by means of legislatim in Hong Kong, even though this would not, in ushford's view, be strictly necessary in most cases. It would also be very helpful to/the comments of the Embassy in Feking, particularly on the likely acceptability to the Chinese of the various solutions.
CC: ET Davies Esq
Mr
PEKING
Mr Cradock (c/o FED)
Mr Cortazzi
Mr Murray✓
lr
tushford
rir Samuel, FED
RJT McLaren
Hong Kong and General Departmen
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