XN000022-1994-07-22 — Page 5

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FRIDAY, JULY 22, 1994

THERE IS ONE THING I WOULD LIKE TO SAY ABOUT ONE OF THE ALTERNATIVES WHICH HAS BEEN PUT FORWARD. THE GENERAL CHAMBER OF COMMERCE HAS, IT SEEMS TO BE UNCLEAR WHETHER IT IS OFFICIAL OR NOT, PUT FORWARD PROPOSALS FOR A TAX-FUNDED OLD AGE PENSION. I DON'T THINK, TO BE

KONG. IT HONEST, THAT THAT IS THE RIGHT WAY FORWARD FOR HONG DOES THREATEN PRECISELY THAT SORT OF WELFARE BLACK HOLE WHICH MANY PEOPLE HAVE RIGHTLY, IN MY VIEW, WORRIED ABOUT. WE'VE TRIED WITH THE BEST WILL IN THE WORLD TO PUT A PRICE TAG ON THAT PARTICULAR PROPOSAL. I'VE MADE SOME INITIAL ESTIMATES YESTERDAY WHICH, I THINK, WERE ON THE LOW SIDE. OUR BEST ESTIMATE IS THAT PAYING FOR A PENSION THROUGH THE TAX SYSTEM WOULD ADD BETWEEN THREE AND FOUR PERCENT TO PROFITS TAX AND BETWEEN THREE AND FOUR PER CENT TO SALARIES TAX. IT'S DIFFICULT TO BE ABSOLUTELY PRECISE BECAUSE YOU HAVE TO MAKE ESTIMATES ABOUT TAKE-UP BUT I DON'T THINK THAT THE COMMUNITY WILL REGARD THAT AS AN

ACCEPTABLE OR AFFORDABLE OPTION. IT ALSO HAS THE DISADVANTAGE OF BREAKING WHAT, IN OUR VIEW, IS THE IMPERATIVE IRON-LINK BETWEEN CONTRIBUTIONS AND BENEFITS, SO, I STILL BELIEVE THAT OUR PROPOSAL IS THE BEST ON THE TABLE. IT'S AFFORDABLE. IT PROVIDES IMMEDIATE HELP AND THE GOVERNMENT WILL ITSELF BE MAKING A CONTRIBUTION, AS YOU KNOW, WHICH WILL BE EQUIVALENT TO ABOUT 35 PER CENT OF THE COST OF THE SCHEME. I THINK IT'S A PRUDENT AND A COMPASSIONATE AND WORKABLE SCHEME AND WHILE I AM PLEASED THAT PEOPLE ARE PUTTING FORWARD ALTERNATIVES AS THE GENERAL CHAMBER OF COMMERCE HAS JUST DONE RATHER THAN OFFERING CRITICISMS, I DON'T THINK ANY ALTERNATIVE ADVANCED 90 FAR HAS A COMPELLING CASE TO BE MADE FOR IT. ANYWAY, THAT DEBATE WILL CONTINUE AND IN THE AUTUMN, WE'LL HAVE TO COME TO SOME DECISIONS.

QUESTION: MR PATTEN, WHEN YOU SEE JOHN MAJOR, WHAT PRECISELY WILL TELL HIM ABOUT SINO-BRITISH RELATIONS?

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GOVERNOR: I'LL BE TALKING TO HIM ABOUT WHAT WE'VE ACHIEVED OVER LAST FEW MONTHS, I KNOW THAT HE, LIKE PRETTY WELL EVERYBODY WESTMINSTER AND LIKE THE OVERWHELMING MAJORITY OF THE MEDIA IN BRITAIN, WAS VERY PLEASED WITH THE OUTCOME OF THE VOTE AT THE END OF JUNE BUT WE RECOGNISE THAT'S ONE STEP ALONG THE ROAD AND WE HAVE TO MOVE FORWARD NOW AND TACKLING A HOST OF OTHER ISSUES. I'LL TALKING TO HIM IN PARTICULAR ABOUT THE NUMBER OF ISSUES THAT WE NEED STILL TO RESOLVE ON THE JLG AGENDA. WE ARE VERY KEEN ΤΟ SEE POSITIVE CO-OPERATION ON THOSE ISSUES AND I HOPE THAT CHINA IS KEEN TO SEE POSITIVE CO-OPERATION AS WELL AND ISN'T JUST TALKING ABOUT CO-OPERATION.

QUESTION: MR PATTEN, WHAT

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SEEING DOUGLAS HURD ABOUT. ?

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GOVERNOR: I'LL CERTAINLY BE SEEING DOUGLAS HURD. I AM SEEING DOUGLAS HURD ON MONDAY AFTERNOON AND, OBVIOUSLY, ONE OF THE THINGS WE'LL ABOUT IS THE SORT OF ISSUES THAT HE WILL WANT TO RAISE WITH PREMIER QIAN WHEN THEY MEET IN SEPTEMBER.

QUESTION: MR PATTEN, WHAT SORT OF MESSAGE HAS MR GOODLAD BROUGHT FROM CHINA FOR BRITAIN?

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/GOVERNOR