CO537-6046 — Page 321

I think that we are all agreed that a scheme based on indirect election such as that suggested in the Governor's new proposals at No. 23 is, in present circumstances, to be preferred to the scheme put forward in his despatch of the 25th August last (No. 58 on -/49). This does not, to my mind, detract from the value of the proposals then submitted but follows from the very changed circumstances in China, and especially in the disappointment of our hope of establishing diplomatic relations with the new Goverment of China.

But assuming the acceptance of the principles underlying the Governor's new proposals, there are two schools of thought (if I may express it in that way) as to the size of the unofficial majority to be created in the Legislative Council on the new basis, and I am not sure that the issues involved are very adequately represented at the passage marked 'Y' in the note at No.25 of our meeting with the Governor, and our further discussions with the Governor should I think be directed mainly to the resolving of these issues.

The question which was put to the Governor was whether there was any serious risk of a substantial majority of unofficials who would be opposed to the Government on any really important issue. The answer which emerged from the discussion was that on any issue affecting the international status of Hong Kong, there was no such risk, and that in his opinion, even such a large unofficial majority as he has proposed would be perfectly safe. On the other hand, there might well be a majority of unofficials united in opposition to the Government on such important matters as proposals to increase taxation, or as to the size of a military contribution to H.M.G.

It was therefore agreed that the real issue to be decided is whether we are to guard against only the first, or both, of these contingencies. If we are to guard against both these contingencies, it was agreed that the proposals in No. 23 would have to be modified so as to provide for an unofficial majority of only one which by the exercise of the Governor's original and casting vote, could be converted into an unofficial majority of one.

That the sink in

But, as I understand it, the Governor's view is such a small one that, after all that has been said in the past five years about the desire of H.M.G. to see constitutional progress in Hong Kong, such a small unofficial majority would not satisfy public opinion in Hong Kong. I therefore understood his preference to be that, as in all other Colonies where unofficial majorities are conceded, we should accept the risk of the Government being defeated by the unofficial vote, on such matters as taxation and finance, and that the only kind of risk which we should positively guard against in the framing the new constitution, should be one affecting the international status of Hong Kong. As I have said above, the Governor feels that, for such a purpose, his proposals are perfectly safe. Moreover, this being so, he would prefer not to whittle down the unofficial majority to something between those proposals and an unofficial majority of one. But while I understood this to be the Governor's own personal view, he did I think, indicate that, if soundings in Hong Kong should reveal that public opinion would be prepared to accept an unofficial majority of only one then he would be perfectly happy to put forward proposals on that basis.

It is as I have indicated above the issues arising

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