CONFIDENTIAL

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or 54% of the then estimated population, by 1983/84. There are plans to increase the ratio of hospital beds from the present 4.3 per 1,000 population to 4.8 by 1983/84. Social welfare expenditure continues to increase. A very substantial programme of labour legislation has been undertaken in recent years and there are extensive plans for the future. It is recognised that the Government has special responsibilities in the labour field in the absence of effective independent trade unions.

12. The Governor announced further plans for labour and social reform in his speech on 6 October 1976 at the opening of a new session of LegCo. There has been some public criticism in Hong Kong that these plans have been imposed by an 'interfering'. British Government, that they are incompatible with Hong Kong's best interests and are designed to reduce Hong Kong's competitiveness vis-à-vis the UK. In recent months this feeling has been fed by public criticism in the colony of the Hong Kong Government's handling of a number of internal matters, particularly a rates increase, which HMG are thought to have inspired. In response to those misgivings the Governor of Hong Kong, and British Ministers and officials have consistently taken the line that while there is a continuing dialogue between HMG and the Hong Kong Government about how the two governments should best discharge their responsibilities for the welfare of the population of Hong Kong as circumstances change, nothing has been imposed on Hong Kong and the plans for further labour and social reforms being carried out by the Hong Kong Government are in the best interests of the local population.

Constitutional Progress

13. There is a small but vociferous minority in Hong Kong, which enjoys some support in this country, in favour of progress towards some form of representative government. However, the possibility of introducing an elected form of government is ruled out by Chinese opposition to any move which could be construed as setting

/ Hong Kong

CONFIDENTIAL

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