TNAG-0788-FCO40-992-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 27

NOTE FOR THE FILE

CONFIDENTIAL

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RECEIVED IN REGISTRY NO. 51 2 4 APR 1973

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DEVELOPMENTS IN HONG KONG IN THE 1980s

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1. As proposed in my submission of 10 April, which proposal was approved by Lord Goronwy-Roberts, I presented the paper attached to that submission to the Governor of Hong Kong on my arrival on 14 April. As agreed by Mr Cortazzi and Lord Goronwy-Roberts, I suggested to the Governor that, after discussions with Michael Stewart and myself, the Government of Hong Kong should present to the FCO a paper setting out their plans for social and other developments in 1980 which would be based upon material and include, as a subject for discussion, all the steps covered in the paper.

The Governor's first reaction was one of extreme reluctance to consider any further commitment of his Government to a plan to be approved by Ministers in Britain. After several talks he finally agreed that the Hong Kong Government would produce a draft brief for the Secretary of State's possible visit to Hong Kong in the autumn and that the content of this brief would be discussed between the Hong Kong Government and the FCO.

2. Towards the end of my visit Mr Stewart and I had a short discussion with the Governor on the content of the paper. In general Sir M MacLehose agreed that the draft brief would include those steps covered in the paper and that, to the extent that it was possible at this time, the brief would include quantified targets in, e.g. housing and medical spheres; numerical targets should be available up to about 1983.

3. The Governor told Mr Stewart and myself that he did not believe that he could honestly make any statement concerning proposals for fiscal reform other than a general statement of intent that fiscal procedures would be reviewed. He was also reluctant to consider the proposal for a reform of the budgetary process, maintaining that the impression held in the FCO which was that in Hong Kong it was decided first how much money would be available from the present taxation system and then dividing that cake, was wrong. Sir Murray maintained that there was no real difference between the budgetary procedures in Hong Kong and those followed in developed nations of the West. Mr Stewart disputed this assertion and it will clearly be one for further debate between us.

4. On education, Sir Murray said that in his view the ratio of pupils to teachers in schools was not the problem which needed the greatest priority in Hong Kong. In his view, the establishment of post-junior secondary education was the area which needed the greatest priority and diversion of Government resources.

5.

On the constitution of the Legislative Council the Governor maintained that he was most keen that Mr David Newbigging, the Chairman of Jardine Matheson, should be appointed to the

CONFIDENTIAL