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revenue rather than a higher figure and, in sum, he thought that the approach to the budget was out-dates. Mr Haddon-Cave said that he would not answer the se
broad questions in the course of the present brief discussion but asked that the criticisms and arguments be developed
in writing and sent to him, when he felt sure he would be able to clarify them satisfactorily. Mr Smith said he
would be delighted to do so as he agreed that nothing could be resolved at breif meetings.
9. He stressed that in his counter-arguments he had to
take account of the views of Ministers. Mr Haddon-Cave
was rather sceptical that the Secretary of State would be concerned with the details of the budget but Mr Stewart confirmed that, in any critique of the budget, account had to be taken of the known views of the Secretary of State. Mr Haddon-CAve pointed out that the Governor had to work
according to the Letters Patent and Royal Instructions and that his main responsibility was the welfare of all the people in Hong Kong. Mr Stewart accepted this and suggested that, if the criteria for Hong Kong was only economic growth, then Hong Kong was a success, but that if other criteria were applied e.g. welfare benefits, then the success was not as manifest and Whitehall was obliged to inform the Governor of this. Mr Haddon-Cave agreed but said that, once the suggestions or directives had been made to the Governor, thereafter it should be left to the Hong Kong Government to carry out the directives.
10. It was impossible, he thought, to rule Hong Kong from London unless the rules and conventions pertaining to Hong Kong were changed. The balance between growth and redistribution of wealth, for example, nust be a matter of judgement. There were certain matters which he could not quickly change without an adverse reaction from the people of Hong Kong. He cited as an example the concept of net income after tax, and a social wage. The former was of direct concern to the people of Hong Kong but the latter was a concept which they would resist if it meant a
reduction in their net income. The objectors would not be confined to the business community but wald be from all sectors
/He pointed
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