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CONFIDENTIAL
restrictions would put the fulfilment of Hong Kong's social pro- gramme's in jeopardy. The Governor and Financial Secretary indeed had stressed the bouyancy of Hong Kong revenue. Moreover there was surely scope for some increase in taxation. We accepted that a generally low rate of taxation was necessary for investment in Hong Kong and noone expected Hong Kong to adopt the sort of taxation levels applying in Britain.
2.
Mr Luard and I strongly denied that the pressures on Hong Kong to do more in the social field were the result of complaints by the textile unions and textile industry. We stressed that there was a wide spectrum of opinion in Britain which thought greater social progress in Hong Kong right and necessary in present circum- stances. Mr Jordan was pretty aggressive in his response.
He
argued that there was child labour in Britain, that Hong Kong workers did not want extra holidays and improved conditions () and that there was a lack of incentive to invest caused by the fact that
He said Hong Kong business did not know what they were in for. that they were very much afraid of what might be coming in future years. He was thus by implication at least critical of the Governor's decision not to announce the full programme.
He was
particularly suspicious of the possibility that a minimum wage rule would be imposed on Hong Kong.
3.
Mr Jordan did not persuade either Mr Luard or myself of the validity of his case. Indeed it seems to me that the way in which he presents his case is liable to be counter-productive.
11 February 1977
@
HAH Cortazzi
CONFIDENT IAL
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