NOTE FOR THE FILE
CONFIDENTIAL
RECEIVED IN
RY NO. 51 2 5 MAR 1977
NXKORH
HONG KONG : REVIEW OF THE PUBLIC ASSISTANCE SCHEME
1. Mr Heppell, an Assistant Secretary in the DHSS, who will be helping Hong Kong in their forthcoming review of the public assistance scheme, came over for a meeting on Wednesday, 16 March. Mr Stewart, Mr Hurst and the Deputy OLA and I spent a couple of hours with him.
2. We began by telling Mr Heppell that during the past 18 months or so FCO Ministers had taken a closer interest in Hong Kong and that there had been more consultation than hitherto between Her Majesty's Government and the Hong Kong Government. This intensified "dialogue" had focused on the need for a substantial move forward in improving labour and social conditions in Hong Kong and, in particular, for measures to protect lower-income groups generally and especially in the event of a further recession. The outcome had been agreement on a 5-year programme of measures, which had been announced by the Governor in his statement at the opening of the current session of the Legislative Council last October. Mr Heppell, who has kept in touch with Hong Kong's affairs since his two-and-a-half year's secondment to Hong Kong in 1972-74, said that he had seen a copy of the Governor's statement.
3. We gave Mr Heppell copies of Mr Stewart's letter of 3 March to the Chief Secretary and Hong Kong's telegram No 270 in reply about the terms of reference for the review of the public assistance scheme. (Mr Heppell said that Hong Kong had just sent him revised terms of reference.) We explained that last year's agreement with the Hong Kong Government provided that Hong Kong's social security system should be extended by a scheme of extended benefits agreed to by 1 January 1978 for introduction in a series of steps by the end of 1980 (paragraph 23 (iii)(b) of Annex C to the Planning Paper). We saw the review of the present public assistance scheme as an important step in this process. Lord Goronwy-Roberts had, we told Mr Heppell, expressed the view that Hong Kong should move towards a system of non-means tested social security benefits: the emphasis between now and 1980 should be on social security schemes, which should cover the able-bodied unemployed among other groups, rather than on social welfare benefits. It was for these reasons that we had suggested various amendments to the original terms of reference for the review. We hoped that the review would include a full examination of the case for non-means tested benefits, either on a non-contributory or contributory basis and, if a case could not be made out, that convincing arguments would be produced to show why not. We mentioned that Professor Turner had concluded in his "interim and provisional review" of labour relations in Hong Kong that there would be "very wide support" for a social security scheme which was linked in some way with the "acquisition of accommodation rights" (paragraph 77(a) of Professor Turner's report, a copy of which we gave Mr Heppell). We expressed the hope that the review would examine this or similar possibilities, not least because the Governor had "warned off" Professor Turner from pursuing it in any further study that he undertakes (paragraph 2 of the Governor's letter of 8 March to Mr Stewart). The Hong Kong Government has its own alternative scheme.
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CONFIDENTIAL
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