TNAG-0438-FCO40-503-Visits-of-UK-Members-of-Parliament--to-Hong-Kong-including-v-1974 — Page 102

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11.

Lord Goronwy-Roberts also discussed these points with the

Colonial Secretary of Hong Kong. The present Governor is very well

aware of the need for social progress. I attach a note on the

Hong Kong Government's programme. This does not amount to a

complete defence against those who say that Hong Kong is doing too

little too late. But the housing programme in particular is a huge

one by any standards. Hitherto Hong Kong have been able to pay for

development programmes out of recurrent revenue, and they could be

criticised for refusing to go into debt in order to speed the process.

Their reason for avoiding this has, as Mr Roberts said, partly been to

avoid over-commitment of resources, and partly because of their

generally conservative finance policy. The argument for the latter

has been that it has kept Hong Kong stable and prosperous. It is

difficult to argue, in the face of Hong Kong's undoubted success,

that the policy has been wrong. At any event it is now having to

be modified in the light of the sharply increased social programme and

of inflation, particularly since the oil price increases which have

hit Hong Kong very hard. The next few years are going to be

difficult ones for Hong Kong financially.

It will not be easy to

urge them to accelerate their already greatly expanded social

programme.

8 May 1974

сс Mr Youde

1.

DCSE'

A C Stuart

Hong Kong & Indian Ocean Dept.

On the question of labour legislation and labour relations

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