CONFIDENTIAL
To sum up on this point I think that by agreeing
to this endorsement we would lose nothing, and would
stand a very good chance of avoiding the worst of the
confrontation in Hong Kong which now threatens.
I can see that the moves which are requested
for the ethnic minorities and the ex-servicemen pose
much greater problems. From the strictly Hong Kong point of view, given the Governor's advice, I would not have felt justified in pressing you to make concessions on them. However I am becoming concerned about the Parliamentary situation, particularly in the House of Lords. Although UMELCO may acquiesce in failure to meet these requests, they are unlikely to drop them publicly. If the Order, which is essential to the implementation of the nationality provisions of the Sino-British agreement, were to suffer a defeat in the Lords, we should be severely embarrassed vis-a-vis the Chinese Government. It would also be very damaging to our relationship with Hong Kong. I therefore propose that we should set in hand urgently more detailed studies of the implications of concessions in the two areas of the ethnic minorities and the ex-servicemen. I understand that the Hong Kong Government are prepared to send officials to London to assist in this. At the very least, even if we decide that no concessions are possible, this will demonstrate clearly the Government's seriousness in reconsidering the position following
the two debates.
I hope very much that you can agree to these
proposals.
CONFIDENTIAL
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