DSR 11 (Revised)
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PRIVACY MARKING
J S Beastall Esq
HM Treasury
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TEL. NO:
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HONG KONG: HMG'S LIABILITY
1. Thank your for your letter of 4 October. I
apologise for the delay in replying.
2. We have consulted our/Legal Advisers. The formula
to which you refer (which as you will remember was
discussed with you when the Study of August 1982 was
prepared) was not produced by them. They did concur in
it but the second sentence involves a political
judgement.
3. On the legal position, our present legal adviser
considers that "financial obligations of the Hong Kong
Government" are in law the debts of the Crown, acting in
right of Hong Kong. It is correct that the Crown has in
the same capacity reserved the right to legislate in
respect of Hong Kong (Article IX of the Letters Patent).
In that sense it is free to legislate under the royal
prerogative át any time and acting in right of Hong Kong,
in order to establish from which particular resources
those debts are to be discharged.
However, such
prerogative legislation in right of Hong Kong could not
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