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taxation. The process is inevitably a slow one given the general climate of opinion in the Councils and among senior officials. Indeed while officials might be sympathetic to some desirable measure to improve social conditions, opposition in Leg Co and/or ExCo seems to make progress impossible. In particular there is in our view need for:
(a) the development of a social security system providing an essential safety net for the old, the sick, widows and orphans and the unemployed;
(b) further improvement in the quality of public housing and a rapid rehabilitation programme of the older resettlement blocks combined with a different approach to financing;
(c) the development of a system which would avoid a complete reliance on market forces to determine wage levels; and
(a) the introduction of some control on hours of work and of a system of paid vacation leave.
25. Beyond this, there seems scope for further acceleration in the housing, educational and health fields; and rising public expectations in Hong Kong will make this desirable. It is perhaps necessary for the present plans, which were put back in the recent recession, to regain momentum before attempting anything more ambitious in these fields; but it is essential that the Colonial Government meanwhile give serious thought to ways of overcoming the fiscal and other limitations of the
past.
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26.
Britain and Hong Kong
The relationship between Britain and Hong Kong is anomalous, certainly as compared with our relation with most other Dependent Territories. As with our Dependent Territories, the Secretary of State continues to be constitutionally responsible to Parliament; but our ability to promote policies there, unlike other such territories, has been greatly weakened with the years. The latter has to some extent been a gradual and inevitable process, given the self- sustaining nature of the economy and its increasing sophistication; the development of substantial interests of its own; and the size and overwhelmingly Chinese character of its population. But equally, Hong Kong's independence of action was created by a willingness of successive Governments in London to allow the relaxation of requirements.
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