TNAG-2028-FCO40-2890-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 61

Mr McLaren

CONFIDENTIAL

Call on the Secretary of State by Mr Henry Keswick

Mr Keswick called on the Secretary of State this afternoon. You and I were present.

Mr Keswick went through most of the points in the letter which he had sent to the Seretary of State in advance of the meeting. He had known the Governor a long time. He recognised the difficulties of his task. But the Governor did not have "our confidence". Devolved power gave the Governor enormous power and if he was vindictive and bloody-minded it became very difficult for British companies to operate.

Among the points which Mr Keswick singled out for mention were:

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the composition of EXCO;

the site of the Consulate-General;

the implementation of the Hay Davison Committee report;

extra-territoriality;

the role of the Central Policy Unit (in particular the excessive power of Mr Leo Goodstat);

the honours system (why had a CBE been given to Li Ka Shing given his previous record);

the Right of Abode Committee;

telecommunications policy;

the British Chamber of Commerce;

the Hong Kong and Shanghai Bank.

Mr Keswick said that he would make exactly the same arguments if the Governor were present and had indeed had this argument with him. Britain's ability to do business in the Far East depended on Hong Kong and he believed that the playing field was not level but tilted against him and others like him. He had deliberately not conducted a public campaign against the Governor, eg he had not used the press as he could easily have done, but he looked for action to make the Government of Hong Kong more responsive to British needs.

CONFIDENTIAL