CONFIDENTIAL
004307
MDHIAN 8577
DISAPPOINTING: AND OUR REVISED ESTIMATE OF 2.5 PERCENT GROWTH IN
HAS REAL GDP FOR 1990 MAY HAVE TO BE FURTHER REDUCED. INFLATION NOT SUBSIDED AS FAST AS WE HAD HOPED AND MAY EXCEED 10 PERCENT. FOR THE YEAR AS A WHOLE.
8. THE MAIN IMMEDIATE THREATS TO THE ECONOMY ARE EXTERNAL AND RELATE TO THE MIDDLE EAST CRISIS: IMPORTED INFLATION AND A SLOWDOWN IN EXPORT MARKETS. BUT THE LABOUR SHORTAGE REMAINS SEVERE, DESPITE A MARGINAL EASING IN RECENT MONTHS, AND WAGES CONTINUE TO RISE SHARPLY. THE TIGHT LABOUR MARKET IS SEEN AS A MAJOR BRAKE ON GROWTH.
CIVIL SERVICE
9. CIVIL SERVANTS ARE THE GROUP WHICH HAS DRAWN MOST COMFORT FROM THE BRITISH NATIONALITY PACKAGE. NEVERTHELESS, PEKING'S CONTINUING CRITICISMS OF THE SCHEME ARE STILL CAUSING CONCERN.
10.
THERE HAD BEEN AN INCREASE IN AGITATION OVER CIVIL SERVICE PAY AND CONDITIONS OF SERVICE, CAUSED AT LEAST IN PART BY THE APPROACH OF 1997. EARLIER IN THE YEAR, FIREMEN AND HOSPITAL STAFF WERE THE MAIN FOCUS OF PUBLIC ATTENTION. IN RECENT MONTHS, OTHER GROUPS OF CIVIL SERVANTS, NOTABLY THE POLICE FORCE, HAVE BEEN PRESSING THEIR CLAIMS. THE CURRENT REGRADING EXERCISE, TOGETHER WITH THE RESULTS OF THE GENERAL PAY TREND SURVEY NEXT SPRING, ARE LIKELY TO MAKE CIVIL SERVICE DEMANDS A RECURRENT PROBLEM IN THE
MONTHS AHEAD.
11. CIVIL SERVICE DISPUTES OVER PAY AND CONDITIONS HAVE LED TO CONSIDERABLE TALK OF LOW MORALE, PARTICULARLY IN THE POLICE FORCE. IN FACT, CIVIL SERVICE RECRUITMENT AND WASTAGE PROBLEMS ARE CERTAINLY NO WORSE THAN IN THE PRIVATE SECTOR. TELEPHONE POLLS AND OTHER REPORTS INDICATE SOME PUBLIC IMPATIENCE OVER THESE PAY CLAIMS, AS WELL AS ANXIETY ABOUT POSSIBLE DISRUPTIONS TO PUBLIC SERVICES.
VIETNAMESE BOAT PEOPLE
12. THE LOW ARRIVAL RATE SO FAR THIS YEAR (UNDER 4,600 AS AGAINST OVER 30,000 AT THE SAME POINT IN 1989) HAS TAKEN MUCH OF THE POLITICAL STEAM OUT OF THIS ISSUE. HOWEVER, TROUBLE IN THE CAMPS OR A RENEWED INFLUX NEXT SPRING WOULD UNDOUBTEDLY REVIVE THE FIRST ASYLUM DEBATE. LACK OF PROGRESS TOWARDS A FULL FLEDGED PROGRAMME OF MANDATORY REPATRIATION CONTINUES TO CAUSE CONCERN.
WILSON
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