Г
CONFIDENTIAL
1
In any
2. As regards discussions of general policy, I had talks with the Directors of Social Welfare; Commerce and Industry, and Education. As the Financial Secretary was in the throes of his Budget preparations I made no attempt to see him as I usually would have done. case, past budgetary policy is well known and well documented and I could hardly expect him to tell me what was in his current budget. I recognised, however, that a change was in the wind and my report points to this: "It is fair to say that since brilliant economic success has been achieved thus far with the minimum of intervention by the Hong Kong Government, there has been reluctance until recently to change that policy in the pursuit of social objectives that might result (for example) in higher taxes and a wider tax base. There are now limited but welcome signs of change."
3. I am surprised that I should be accused of having produced a delayed report. I returned to London on
25 February and the report was completed on 21 March. Considering its scope and the fact that it had to be written in the intervals of other work, I don't think that is at all a bad timetable. It took the Governor rather longer to send the somewhat superficial comments which accompanied his letter.
4.
As regards the Labour Department's commentary, I think this is very thin, probably as a result of over-hasty preparation. It certainly does not carry us much further.
If we There are too many indefinite promises of action. are not simply to have another "fobbing-off" exercise then we shall need a much more down to earth dialogue with Hong Kong than these observations seem to envisage.
5. I have done my best to extract what is positive and have placed under this minute an outline submission which makes, I think, as fair a case as is possible on the material so far made available to us.
6. Finally, I agree with you that this should be played as an exercise in co-operation not conflict and I hope that the draft under shows my readiness to go along with this. But depending on the final form of the submission I may wish to insert a personal view expressing, my disquiet.
C
20 May 1974
Enc.
G Foggon
k
f
CONFIDENTIAL