TNAG-0607-FCO40-755-Monitoring-progress-made-on-planning-papers-on-Hong-Kong-1977 — Page 15

CONFIDENTIAL

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1. MATTERS ARISING

a) The Budget

WQG

Cast refems in leg to speech

At the last Standing Committee Meeting it was agreed that this department would take up with the Governor the point that the Budget speech did not seem to relate to the policies given in the Governor's LegCo speech.

The Governor in his reply argued strongly that this was not so and that the Budget was, and could clearly be seen to be, an instrument of economic and social policy.

We would expect the Governor to discuss during his visit later this month the outline of next year's Budget and would expect to see a detailed draft of the speech during February.

b) Report of the Third Inland Revenue Review Committee

The Governor has now replied to Lord Goronwy-Robert's letter. He shares the Minister's view that the Report is unsatisfactory but has not produced any other suggestions as to ways in which taxation could be made more equitable. A submission has been sent to Lord Goronwy-Roberts recommending that we get away from an argument on details and return to the more general point of re-distribution of income.

c) The Turner Study

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Professor Turner has returned from Hong Kong and his report is hoped for by the end of the year. ?

d) Child Labour

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This subject could more usefully be dealt with under item 2:1 the LegCo speech.

e)

ILO Conventions

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The Hong Kong Government have accepted the timetable which we suggested. It would seem that progress is being made at an acceptable rate.

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f) New Appointments to LegCo

It is too early for an assessment of the performance of the three most recently appointed members, but the brief for your recent visit suggested that you discuss with the Governor the performance of those appointed a year ago. It also suggested that you seek his views on a possible apointee to the still vacant Official seat.

g) Quarterly Report

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LEUNG/ENGLISTS

The system seems to be working very satisfactorily and the reports continue to be useful.

CONFIDENTIAL

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