My Smith

COVERING SECRET AND PERSONAL

RE

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4 MAR 17

P.A fes

Fees

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HONG KONG BUDGET

1.

You will remember that I drafted a telegram from

Lord Goronwy-Roberts to Hong Kong asking for some further details on the "strategy" underlying the budget. We have now received two telegrams containing very long-term financial planning and an extract from the draft budget speech on the budget strategy. Before I submit these to Lord Goronwy-Roberts, I should be grateful for any comments you may have.

2. I am a little disappointed that there is no mention of any new arrangements for a revised system of salaries or company tax. We know that the Inland Revenue Review Commission has made its report (although I have not seen it, I believe that you have a copy). One would have thought that Mr Haddon-Cave would have made at least some mention of this. However, he himself would doubtless say that he had not yet had time to consider the report and its implications.

JA B Stewart

24 February 1977

Hong Kong Department

COVERING SECRET AND PERSONAL

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