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There is constant dialogue between the Hong Kong Government
and the Foreign and Commonwealth Office on what we do. In the
constitutional circumstances this is right, and within my experience
the dialogue has been understanding, helpful and stimulating, As
for pressure if that is the right word, there is just the same sort
of pressure from London as we have here in Hong Kong; that is, the
way to do things wo have said we will do, when we have said we will
do them always provided that the means are there. There is no
evidence of any intention or attempt to press Hong Kong into an alien
or inappropriate mould.
With regard to the first point, I think the principal fear
is that Government targets have been set so high that they can only
be reached by a rise in taxation so large as to undermine our economy.
This is groundless. It is in fect a contradiction in terms, because
it is so obvious that the circumstances of Hong Kong require a
fiscal environment which is both attractive in comparison to
competitive countries, and which also allows a margin of profit for
enterprise and risk wide enough to retain and attract capital for the
expansion of the economy and the preservation of employment in the
particular circumstances of Hong Kong,
This is not something on which any Government in Hong Kong
could possibly afford to take risks. Because of these apparent
restraints the Government programmes have been phased so that on
certain assumptions and broadly speaking they can be financed from
growth.
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