5.

The Governor shares the view that gradual development is necessary in this field; it is known also that he lays great emphasis on full

consultation with all interests in the areas affected by any proposals

prior to their introduction. With this end in view he envisaged from the outset in 1966 the introduction of broad enabling legislation

on lines widely adopted throughout our former African territories. This would give the Governor-in-Council powers to establish local authorities for specific areas after processes of local consultation;

to allocate such functions and powers to these authorities as would

be appropriate having regard to their size, experience and capacity to undertake them; and to withdraw functions and powers having regard to their performance. So far as we know, this type of

legislation remains the Governor's objective. In our view it should

provide the necessary flexibility for the gradual development of a local authority system.

6. As to the extent of the changes to be made in the first instance,

he has emphasised the need for caution in the aftermath of communist confrontation. The dangers are that in present circumstances :-

(a) China may react to local government changes (although we

do not think this likely);

(b) local communists may seek to control or disrupt local

authorities with a large number, if not a majority, of elected members (they made an attempt to gain control of the New Territories Advisory Council in the late fifties).

The 1967 Working Party report was not intended as a blueprint for immediate action; its main purpose was to examine the possible lines of development. The Dickinson report on the other hand contains

proposals for the first instalment of reorganisation, taking account

of public reaction to the Working Party report and the implications of confrontation. Consideration in Hong Kong is now likely to be centred on the extent to which the Dickinson proposals should be

amended in the light of the comments thereon by the Urban Council and the Heung Yee Kuk (which we understand are now available).

proposals can be broadly divided into the following five categories :-

The

/ (i)

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