M
They
in an increasingly sophisticated industrial environment. suspect that the absence of collective bargaining results in low wages and correspondingly high profits. (Our own analysis of the effects of the recession on Hong Kong indicates that there has been a shift of incomes from wages to profits since 1974.)
3.
The Secretary of State called a departmental meeting on 21 July to discuss, inter alia, these representations. lie had previously suggested to the NEC that there should be a small commission, on Donovan lines, which should go out to investigate the situation on the spot. At the July meeting, he was dissuaded from this approach on a number of grounds, not least because a UK commission of enquiry working in public might not obtain the necessary degree of cooperation from Hong Kong industry. Instead we have suggested that a low profile academic study might be more appropriate.
4.
The TUC and the NFC are naturally influenced by the historical experience of the labour movement in this country and will only be convinced by a full and detailed study by an unbiased and probing analysis of the trade union movement and industrial relations situation in Hong Kong in which the findings are related to the political, industrial and social circumstances of the Colony. No official British or Hong Kong body has the necessary experience and standing to do this with any hope of winning the confidence of the TUC and the NEC. Our original thought was that Dr McCarthy, an academic of reputation and standing and at present Chairman of the Railway Arbitration Tribunal, would carry the right amount of weight. Dr McCarthy undertook a major part of the research initiated by the United Kingdom Donovan Royal Commission and could be relied upon to approach the Hong Kong situation in an objective and practical way. His commitments in this country make it impractical for Dr McCarthy himself to undertake the lengthy (and discreet) enquiries which will be needed in Hong Kong, but a preliminary approach to him indicates that he would be willing to supervise and direct the work of one of his research students whom he would select especially for this task.
CONFILENIAL
15.