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entitlement to benefit there was no question that State support would be withdrawn because the scheme was no longer solvent on the original basis. Government had to dig into its pockets. It could be argued that the 1911 and 1920 Acts provided protection which served to preserve social stability at a time when threats to that stability. were serious as, for example, in the General Strike of 1926. It is very doubtful if a system based on Poor Law relief would or could have been maintained in the face of heavy unemployment.
5. To revert to Hong Kong, some weeks ago I suggested to Hong Kong Department that Mr Heppell should be invited to the meeting of the Monitoring Committee this Friday and that his memorandum should be sent to the Governor for comments since it suggests ways in which the difficulties foreseen by the Governor could be overcome. Mr Heppell could be a useful ally provided he can resist any temptation to re-visit Hong Kong.
6. I think we should keep in mind that a small Colony like Gibraltar manages to run a social insurance scheme which provides for old age pensions, guardian's allowance, maternity grant, death grant, widow's benefit and unemployment benefit. Gibraltar also operates a supplementary benefits scheme akin to Hong Kong's Public Assistance Scheme, based on the criterion of need.
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7. The fact that unemployment benefit appears to have slipped from our vision causes me disquiet as I believe that in any recession it could be a stabilising influence. A compulsory and contributory scheme, even if initially on a limited basis, is worthwhile if it could be extended to include unemployment benefits (Gibraltar's scheme was extended to cover the self-employed in 1975).
8. I share Mr Heppell's concern over the possibility of placing on employers the liability to pay, for example, extended sickness benefits. They are unlikely to provide the scale of benefits or the certainty of payment which a State scheme could ensure. The reference to compulsory insurance to deal with industrial injuries is also disturbing in some respects. Unless the Hong Kong Government was prepared to exercise very tight control over rates of premia or insist on better scales of benefit the net result could be to enrich the insurance companies.
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9. The TUC is sending a delegation to Japan in March led by Mr Murray and we have tried to interest them in returning via Hong Kong. There are difficulties, but if they do visit the Colony they could be expected to show an interest in social security, particularly if their trade union contacts in Hong Kong point to Government delays in pursuing the proposals contained in last year's Green Paper. Professor Turner's interim report at the end of 1976 referred to the desire of Hong Kong workers to have adequate social security coverage and their willingness to contribute. This report has been studied by the TUC's International Committee and Professor Turner's study was mentioned at the Trades Union Congress in September. As you know, the Professor is in Hong Kong now and his final report may well include a mention of social security.
12 December 1978
CONFIDENTIAL
HRG Hurst