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B & C Governor commented in Hong Kong telegrams Nos. 470 and 471.
D
E
36
HA
A
66
6. Both CPA and Laker Airways have appealed to Mr Nott against the CAA's decision. The Hong Kong Government have publicly supported CPA. They have already commented on the technical aspects of the appeal and in doing so suggested that the best solution to the problem was for Mr Nott to grant licences to both CPA and BCal, in
line with the ATLA decision.
7.
In the meantime, the Secretary of State for Scotland wrote to Mr Nott on 15 May supporting BCal.
8. As regards timing, Mr Nott wishes to dispose of this issue quickly because:
(a) Sir F Laker wishes to see him on other pressing air services business and cannot do so whilst the Hong Kong/London appli-
cations, in which he has an interest, are sub judice; and (b) he is to address the Hong Kong Association annual Dragon
Boat Dinner in London on 17 June.
Argument
9. In the Secretary of State's absence, the Lord Privy Seal wrote to Mr Nott on 7 April explaining the political and commercial con- siderations which led him to support the stand taken by the Hong Kong Government. Many of these considerations are elaborated in the Hong Kong Government's submission. In addition, we are trying to nego- tiate a greatly increased Hong Kong financial contribution towards the maintenance of British troops in the territory under the Defence Costs Agreement, and we are requiring Hong Kong to do their bit over Iranian sanctions. Moreover, although it is not specifically mentioned by the Hong Kong Government, a decision by Mr Nott favourable to CPA would have a beneficial effect on relations with Hong Kong, in that our special relationship with the territory will have been seen to have been taken into account in reversing the CAA decision.
10. When the Lord Privy Seal wrote to Mr Nott in April, the Secretary
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