CONFIDENTIAL

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Hong Kong on the road to internal self-government and independence: and by conflicting political allegiances within the Chinese population.

The Chinese authorities are known to be highly

sensitive to the risk that any form of election to LegCo might lead to the success of Kuomintang (KMT) candidates. The Governor considers, and we agree, that the way forward is to adjust the social composition of LegCo, without altering its essential (ie non-elective) character - a step which was recently taken and to increase public participation at all levels of government.

Corruption

14. There have been allegations of corruption in the Hong Kong Police and the rest of the public service for many years. Public outcry, particularly after the escape of Chief Superintendent Godber to this country in 1973, led to the setting up of an Independent Commission Against Corruption (ICAC) in February 1974. The Commission's functions are to investigate complaints of corruption, to take steps for its prevention and to enlist community support for its elimination. There was some initial pressure from critics of the Hong Kong Government for HMG to appoint a Commission of Inquiry to look into the whole question of corruption but Ministers declined to adopt the proposal on the grounds that the ICAC must be given a proper opportunity to carry out its task. In fact, the ICAC has proved to be a vigorous body and there has been criticism during the past year that its investigating methods pose a threat to personal freedom. This problem is being watched but it was inevitable that if the Commission became effective it would provoke criticism.

Death Penalty

15. The existence of the death penalty for murder in Hong Kong and the fact that successive Secretaries of State have taken the view. that they could not carry the House of Commons in a decision to permit an execution to take place in Hong Kong is an irritant in our relations. Crime is regarded as the greatest social problem in the colony and public opinion there still strongly favours the

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CONFIDENTIAL

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