CONFIDENTIAL

Legislative Council in October. He saw real difficulty

in being too specific this year about the minimum wage and statutory hours of work. He thought this would greatly prejudice his chances of gaining consent to the provision of a weekly rest day, annual leave with pay and an increase in the number of public holidays which are in the legislative programme for the next session. He would, however, make a general statement that within the next five years labour legislation in Hong Kong would achieve standards at least up to the best Asian equivalent (less Japan). While this would imply a minimum wage and statutory hours of work (e.g. as in Singapore), I did not think this went far enough for us to answer Parliamentary Questions. We are to correspond and jointly work out a formula to make the commitment more specific without risking adverse repercussions in Hong Kong.

4. On fiscal matters, I questioned the Governor closely

on the various statements made by the Financial Secretary

which were inconsistent with the aim of producing greater

social progress in Hong Kong. The tax-paying public in Hong Kong would need to be prepared for a change in these budgetary assumptions. The Governor apologised for the tone

/of the

CONFIDENTIAL

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