TNAG-0612-FCO40-760-Visits-of-Lord-Goronwy-Roberts--Minister-of-State-for-Foreig-1977 — Page 8

i.

;

оо

(спиртека

tui order)

Drus

17/2

j

1.

.on 110

the brie:

Cron

overnor of Mon on on 13 Sve it! autour, then në r

orong- oberts' vi.it to

rent ( A telc Pc no 14 to on Long refer).

?. he

hɛ briefs may come in connection, ex fr tewart'. to .:on. 01 nextEJONE

10/2

110

mehl in

no

enverin: del were to

@

ว

eeting

The

he cancellation

received

anila

one other

r. Carrey 'n visit

J 2

ilton

17 rebra ry 1077

POVI ING CONFIDENTI L

Page

CONFIDENTIAL

HONG KONG BUDGET: 1977-78

BRIEF A

Background

1. At his meeting with the Governor of Hong Kong on 9 December, Lord Goronwy-Roberts asked for as much detail as possible of the Hong Kong Government's thinking on the Budget for 1977-78 three weeks before Budget Day, scheduled for 2 March. The Governor has now telegraphed a detailed preview of the Budget (the Department's submission of 15 February, copy attached, refers).

2. There is no indication in the Budget of any "strategy" nor of its effects on the economy of Hong Kong nor of its place in the long term planning of the Hong Kong Government. Essentially the Budget is an accountant's budget for the present Financial Secretary is concerned with good house-keeping.

However, this may

be remedied in the Financial Secretary's budget speech.

Line to Take

3. The Minister of State might say that he is grateful to the Governor for the early survey but that he is disappointed at not having seen any indication of the budgetary strategy of Hong Kong nor of its long-term fiscal planning. He might say that he hopes that the budget speech will contain an indication of the Hong Kong Government's thinking on this. The Minister of State might also say that the details afforded have given rise to some queries which he will wish to discuss at greater length with the Governor after he has had a chance to study the budget in full and the Financial Secretary's budget speech on 2 March. If pressed, Lord Goronwy- Roberts might say that he feels that a budget which plans to spend such a small proportion of the GDP (17%) could have, for example, made more provision for subsidised school places. Further, the raising of the Estate duty exemptions looked excessive in terms of past inflation and appears solely directed towards the higher income groups.

He would hope some improvement on these and other lines, to be discussed, will be made in 1978.

CONFIDENTIAL

ག

CONFIDENTIAL

PUBLIC OPINION IN HONG KONG AND THE UK IMAGE

BRIEF B

Background

1. During the Governor's absence from Hong Kong for five weeks last November and December, public opinion built up there on a range of unrelated matters, including rate assessments, the Government's plans for new labour and social legislation and rent increases in housing estates. This outburst was accompanied by

The allegations in the press about British "interference". Governor wrote to the Department on 29 December, shortly after his return from Hong Kong, saying "the opponents of labour and social reform had worked all this up into a general charge that Hong Kong was being led to ruin by those in the UK who wanted to eliminate its competitiveness",

The Governor has taken the heat

out of the situation for the time being but there could be dangers

for the future on two counts:

(a) that some officials in the Hong Kong Government may be inclined to encourage the growth of strong public feeling as an- argument a means of putting a brake on further social progress;

and

(b) that the British image in Hong Kong may suffer to the detriment of the Hong Kong /UK connections.

6() Mr Cortazzi wrote to the Governor in January to suggest that the new unofficial members of Legco, who were appointed to represent the interests of the working population, might be encour- aged to speak out more often and more forcibly in support of the social programme and that some of the Hong Kong Government's senior officials could do more to correct the impression that HMG were forcing the Hong Kong Government to adopt measures that were not in Hong Kong's best interests. The Governor, in his reply, did not react significantly to these ideas.

Line to Teke

2. I am sorry that you had such a difficult time over the New

I am glad that Year with your press and public opinion generally.

the situation has eased now. It is especially unfortunate that HMG should have been blamed and I am concerned lest pressure of

CONFIDENTIAL

/opinion