SECRET
Britain in favour of some form of elections in Hong Kong may arise if the present status quo in Macao is altered in this way.
4.
There are several differences of nuance over the question of the development of the present system of appointments of Unofficials to the Executive and Legislative Councils:
(i) There is agreement on the concept of increasing the
membership of LegCo and while we both have an open mind on its ultimate size, we have tentatively suggested a membership of 50. The Governor has not committed himself on this point.
(ii)
(iii)
(iv)
The Governor is anxious to maintain the close
institutional relationship between the Executive and Legislative Councils whereas we have suggested greater differentiation, with less emphasis on the executive functions of LegCo. We think this should give rise to more open government but the Governor may well feel that this could lead to greater controversy in the relatively unsophisticated political atmosphere of Hong Kong.
We consider that thought should be given to the payment of members of LegCo and ExCo in order to encourage representatives from the lower income groups to emerge. The Governor addresses himself only to the point of payment for "Members" i.e. Ministers drawn from the Executive Council and answerable in LegCo.
We consider that important segments of political opinion in this country (and perhaps the Secretary of State himself) will only be satisfied with the present move to enlarge the Legislative Council in June if one member at least has a background in the independent
trade unions.
Fiscal
5.
In paragraph 9 the Governor provides a useful corrective to thinking here when he makes the point that the social component of the Budget is to increase from the present 40% to 48% in 1979–80. This indicates a growing emphasis on the importance of social welfare
SECRET
/in Government