TNAG-0278-FCO40-314-Visit-of-Secretary-of-State-for-Foreign-and-Commonwealth-Aff-1970 — Page 12

CONFIDENTIAL

-9

for instance contributory pension schemes could not be accepted in Hong Kong due to the absence of long-term security. Hong Kong's methods of providing medical care to the broad mass of the population actually worked out to be cheaper to the average man than the "free" health service in Britain. Small contributions towards the cost of the health and educational services were not necessarily undesirable. There was no taxation specifically for education. On education the problem was that one in four of the population were being educated; 40 per cent of the population were under 15.

12. Mr. Stewart said that on labour legislation he understood that there was a case for greater penalties for infringements. Sir David Trench explained that maximum fines were generally adequate, but the Government could not dictate to the courts what fines to impose. Mr. Roberts explained that minimum fines were unpopular with the courts who sometimes acquitted people rather than fining them. The Government had not had much success in persuading the courts to increase penalties.

13. Mr. Stewart said that labour conditions were perhaps something that the Communists might exploit. Sir David Trench pointed out that since they were better than in China there was a limited field for this. Sir John Cowperthwaite pointed out that labour legislation was not necessarily popular with the workers themselves who wanted to be free to make as much money as they could. Rules against night work for women had been unpopular. Fortunately legislation was coming at a time of rising wages. Sir David Trench pointed out that it was very difficult to police the legislation. Most infringements took place in smaller factories. In general Hong Kong's labour legislation was not as out of date as was often made out.

Corruption

14. Mr. Stewart said that he understood that the Hong Kong Government were anxious to have an anti-corruption Bill with teeth. What form did corruption take? Mr. Sutcliffe said that officials were paid for not doing their job energetically. For instance Labour Inspectors were bribed not to visit a factory during what should be a rest period, and similar things happened with the police. They would obey orders and clear up trouble if asked but the local people knew that they could not keep up pressure, for instance on gambling, for long periods.

15. Mr. Stewart said that officials in London had not yet given him advice about the corruption Bill but the clauses about officials declaring assets created difficulties. Was he right in thinking that this was an essential part of the Bill? Sir David Trench said that it was. Corruption would never be completely eradicated, but this Bill was an important step. It already had had a deterrent effect. Mr. Wellbeloved asked about the maximum penalties for having undisclosed sources of wealth and whether the courts would impose them. Mr. Roberts pointed out that the burden of proof would be on the official to explain how he got his money. There was a safeguard in that he had a chance to give an explanation privately to the Attorney-General first. Hong Kong realised that this was an exceptional Bill, but their case was exceptional and had no parallel in Britain. When asked by Sir Denis Greenhill who informed against offenders, he said that it could be anyone, including an anonymous informer. To be effective the new law would mean that the police would have to have increased powers to investigate people's private affairs.

16. It was generally agreed that there were difficulties in the proposed legislation. In one sense the more successfully one controlled bribery, the higher bribes became. Courts might be reluctant to convict, but for officials the main sanction was dismissal.

10858

CONFIDENTIAL

C+