TNAG-1270-FCO40-1620-Financial-policy-in-Hong-Kong-1983 — Page 86

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MATTER COULD BE REGULARISED BY LEGISLATIVE AMENDMENT, WHICH

COULD IF NECESSARY BE RETROSPECTIVE. IF THE LEGCO REFUSED TO

COOPERATE SUCH LEGISLATION COULD BE ADOPTED BY ORDER IN COUNCIL

UNDER THE POWERS RESERVED TO THE CROWN.

9. THE PROPOSED TRANSFER FROM THE EXCHANGE FUND TO GENERAL REVENUE ACCOUNT DOES NOT APPEAR TO RAISE ANY LEGAL OR FINANCIAL

PROBLEMS.

10.

EXCO WILL MEET ON THE MORNING OF 12 OCTOBER. THE IDEA IS

TO IMPLEMENT THE MEASURES AFTER MARKETS CLOSE FOR A LONG

WEEKEND ON THE EVENING OF 13 OCTOBER. IF THE SECRETARY OF STATE'

SUPPORT NEEDS TO BE SOUGHT BY THE GOVERNOR, THIS WILL BE DURING

12 OCTOBER.

11. THE INITIAL VIEW HERE IS THAT IT WOULD BE RIGHT, IN THE

EVENT THAT THE GOVERNOR DECIDES TO ACT DESPITE EXCO'S OPPOSITION,

TO BACK HIM UP. THIS MIGHT TAKE THE FORM OF AUTHORITY TO THE

GOVERNOR TO INFORM EXCO THAT THE BRITISH GOVERNMENT HAVE

CONFIDENCE IN HIS JUDGEMENT. IF THIS STEP IS TO BE TAKEN, WE

WILL WANT TO BE SURE THAT AT LEAST THE PRIME MINISTER AND

CHANCELLOR ARE CONTENT BEFORE A FINAL DECISION IS TAKEN.

ARE WARNING THEIR OFFICES ACCORDINGLY.

12. IF WE PROCEED AS IN PARAGRAPH 11 ABOVE, IT WILL BE

CLEAR THAT HMG HAVE GIVEN THEIR APPROVAL TO THE SCHEME

AND PARLIAMENTARY AND OTHER QUESTIONS WILL BE ANSWERED

ACCORDINGLY. IF, ON THE OTHER HAND, EXCO AGREE WITH THE

SCHEME

WE

THE IMMEDIATE PROBLEM WILL BE LESS BUT THERE MAY

STILL BE PARLIAMENTARY INTEREST (ESPECIALLY IF THE SCHEME SUB-

SEQUENTLY GOES WRONG). MINISTERS MAY BE ASKED AS TO WHETHER OR NOT

THEY GAVE THE SCHEME THEIR APPROVAL. WE THEREFORE NEED

CONSCIOUSLY TO DECIDE WHETHER TO PUT OURSELVES IN A POSITION

WHERE WE WOULD ANSWER SUCH A QUESTION IN THE AFFIRMATIVE,

OR WHETHER TO TAKE THE VIEW THAT WE REGARDED THIS AS A

MATTER FOR THE HONG KONG GOVERNMENT ON WHICH HMG AS SUCH

WAS NOT CALLED UPON TO TAKE A VIEW. THESE ARE THE TWO ENDS OF THE

SPECTRUM. THE DEPARTMENT ARE CONSIDERING WHAT FORM OF WORDS THE

SECRETARY OF STATE MIGHT MOST HELPFULLY AND ACURATELY USE IN

PRACTICE.

ноше

LIMITED

HD/HKD

PS

PS/MR LUCE

PS/PUS

MR GIFFARD

MR DONALD

COPIES TO

MR BURROWS LEGAL ADVISER

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