*
CONFIDENTIAL
}
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efforts were put into housing the refugees in the '60s).
6.
When Sir Murray MacLehose was sent as Governor at the end of 1971 his brief was to speed up development. The most striking symbol of this was the plan, announced during his first year of office, to build 1.8 million units of new housing in ten years, enough for almost half the population. This is a massive programme by any standard. Sir Murray was aware of the urgency.
You may like to see his Annual Despatch for 1972, which ends with the words "I think we have time to achieve this happier state, but only just. This must therefore be a Government in a hurry".
7.
Since 1972, Hong Kong, like the rest of the world, has run into economic problems. The Governor's despatch of 28 May 1974 describes the situation immediately before his visit to the UK for talks with Lord Goronwy-Roberts. The traditional Hong Kong solution to economic difficulties has been to expand out of them. This has worked in the past to the benefit of all the inhabitants, but it has been held to imply balanced budgets and holding back real wages.
8.
His
The Governor is therefore in a political difficulty. ten year development plans are two years old and were already announced before the present UK Government took office. There is therefore inevitably a tendency in the Labour Party to regard them as a plateau from which further immediate advances should be made. But within the Colony there is a strong tendency among both officials and unofficials to think that the previous plans may have been too bold in present economic circumstances, and that they should be scaled down or rephased. When Hong Kong is required to pay substantially more for its defence, these pressures on the Governor will be increased. He cannot rule by decree without destroying confidence in Hong Kong. So he has to carry his Executive Council
with him.
9.
Some things can be done without costing much public money. For example, the new Labour Commissioner has been able to achieve
CONETTONIT AT
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