TNAG-0119-FCO40-155-Lord-Shepherd-s-visit-1969 — Page 8

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CONFIDENTIAL

16. Mr. Wong said that he was in favour of Lord Shepherd's

proposal regarding a levy on industry.

17. Mr. P.Y. Tang said that Hong Kong owed the United Kingdom a great debt. Unfortunately since the end of the last war, Hong Kong hadbeen buying much of its industrial machinery from countries other than Britain. He thought that this trend might be reversed if British machines could be supplied free to training centres. He said that Japan, France and America were already contributing laboratory equipment free of charge.

18. Lord Shepherd said that he was bound to point out that if these countries contributed as much to world defence and overseas aid per gross national product as Britain, they might be facing the same economic difficulties. Nevertheless he took the point which Mr. Tang had made. 19. The question of Kai Tak airport was raised by Sir Albert Rodrigues. Lord Shepherd said that he would prefer not to go into any detail about this until he had discussed the matter with the Governor.

20. On local government, Mr. Wong said that the increase of scope of local government had been the subject of many reports over recent years. Thought had now crystallised and there were currently proposals for increased scope and functions. He thought that many around the table would go along with the Dickinson Report subject to certain reservations, e.g. the provision of an official chairman.

21. Lord Shepherd said that he was worried about the extent to which a reconstituted Urban Council would be able to cope with the present system of administration in Hong Kong which was highly sophisticated. He would not be willing to see much change in the present executive administration since this could lead to loss of efficiency. Furthermore, some of the proposals for the further development of the Urban Council were not without major political implications. The recent elections for the Urban Council had not

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reflected/