CONFIDENTIAL
5.
markets we probably did slightly over-react. But that is a very different matter to saying that with the knowledge we had at the time we should have acted differently. Considering the speed of Hong Kong's recovery, and the short time (in comparable international terms) during which resources were under-employed, we cannot have got things very far wrong. But I repeat there were lessons that we learnt. In London, shortly after the relevant budget, Lord Goronwy Roberts commented to me that it was all that could be expected in the circumstances. It was a generous and fair comment at a time of acute disappointment and anxiety.
10.
With regard to your remarks on estate duty in para. 5, the rate had been raised by three points last year. The slight raising of the threshold this year was not so much a concession to the bottom end of the bracket that might be described as 'rich', as to the Inland Revenue Department, which did not consider the revenue from these small estates commensurate with the effort of collection. However I note that anything that even could be construed as a concession to the rich (even $1.75 M out of a total budget of over $8,000 M) is considered open to a charge of inequity.
11.
Finally, I was disappointed and hurt that Philip's phrase of 1976 should have been disinterred and shaken in my and his face once again. This year's speech was carefully drafted to avoid anything which taken out of context could cause embarrassment in London, and in Philip's position I would be very upset indeed. Don't you think it is time that this was dropped?
t
Mu