done. It had been put to Lord Gorouwy-Roberts that, for example, the quality of housing in Hong Kong is poor,with considerable overcrowding and, in Lord Goronwy-Roberts' view, it was certainly true that more land was available than was generally realized. On education, however, it was accepted that great improvements had been carried out.
11. As far as taxation and financial policy were concerned Lord Goronwy-Roberts expressed considerable reservation. He accepted the need to maintain Hong Kong as a viable economic and financial centre but believed that fiscal policy needed improving. He considered that the aim must be, first, to identify social objectives and only then to decide what fiscal policy was necessary to provide sufficient funds. At present, the Govern- ment of Hong Kong seems to have the opposite priority.
Lord Goronwy-Roberts also felt that ,although poorer sections of the community may not fact direct taxation,they were still subject to considerable indirect taxation because of deficiencies in social amenities, eg medical services.
12. Sir Murray MacLehose explained that in Hong Kong the fee for medical consultation and medicines was 123p compared to 20p per item of medicine in the UK. The unemployed were required to make no contribution and yet were paid a benefit direct from revenue under the public assistance scheme.
13.
Mr Hurst made the point that such payment was means-tested and that the income of the whole family was taken into account in assessing need. Sir Murray MacLehose accepted this but insisted that means-testing was humanely conducted and was not to be confused with that applying in this country in the 1930s.
14.
Lord Goronwy-Roberts repeated that higher direct taxation on the more wealthy would provide funds to improve the conditions in all areas for those less well-off. He asked to be kept fully informed of developments, particularly details of the Green Papers and results of officials' discussions with Mr Heppell of the DHSS.
15. Sir Murray MacLehose explained that a wide-ranging review of all aspects of social welfare, both services and payments, had recently been carried out and that three Green Papers have been published. These have been very well received but will nevertheless take some considerable time to implement, not least because a minimum of 3,500 extra qualified staff will be required. In the next five years expenditure on social welfare would increase by 125%. Sir Murray expressed surprise that the opinion was still held that more money was needed to improve facilities. He was adamant that there was no evidence of such ⚫ a need.
/16.
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