HKK 846.
香港總督府
RECEIVED IN
REGISTRY No. 50
CONFIDENTIAL
- 9 SEP 1975
Der Duncan.
GOVERNMENT HOUSE
HONG KONG
18th August 1975
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We are going to be in an exceptionally difficult and potentially dangerous situation this autumn. The defence costs negotiations come on top of the long anxiety about the recession, danger of unrest, and drop in revenue, and the equal anxiety about how to raise enough money to keep the social programmes going without precipitating the explosion we all want to avoid or scaring away investment and employment. On top of this we have a population thoroughly worried about crime, with an all-time record for homicide; while I think we are doing the right things about crime and are beginning to have proof that we are working on the right lines, there is not the slightest prospect of a significant improvement becoming apparent to the public for a year or even two years.
You in Whitehall must be aware of this conjuncture which places an extraordinarily heavy burden on this Government and on me personally. I hope you realise how important it is to concentrate on disposing of defence costs and to avoid peripheral but potentially abraisive issues such as some of those set out in your letter of 8th August. We are going to need to be very careful indeed to get through this winter and next year's budget without serious trouble. Please get the Department to keep this constantly in mind. I warned in my annual despatch that this was a year in which we must be extremely careful. do hope it has not already been forgotten.
Sir Duncan Watson, KCMG
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