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CONFIDENTIAL
and death benefits scheme was first put forward. Mr Heppell has written a very helpful note on the points raised by the Governor: as you will see, he is reasonably confident that the major problems can be circumvented. But it is clear that a good deal of further
work would be needed.
4. The Governor proposes to go ahead with a White Paper on
the various other social welfare reforms that were outlined
in
last year's Green Paper, omitting for the time being the social security scheme. In the meantime the Legislative Council have been told (in paragraph 97 of the Governor's opening speech) that the Government hope to put forward proposals in the area which would have been covered by the contributory scheme during the Council's present session, ie before the summer holidays. Mr Heppell suggests that before putting forward new proposals, the Government might consider producing a further Green Paper setting out in a neutral way the case for and against a contributory scheme, whether voluntary or compulsory. He argues that this would not significantly delay the introduction of whatever measures are decided on since the work done in preparation for the Green Paper would serve to prepare the ground for implementing the Government's
eventual decisions.
5. The difficulties outlined by the Governor are clearly genuine. However, one of the contributory scheme's main advantages is that it would establish the right structure for further developments in social security as and when these become possible. The Governor's alternative approach of dealing with each risk separately by other means (paragraph 11 of his letter) would be much less attractive from this point of view. I therefore propose to send the Governor
a copy of Mr Heppell's comments and ask him to consider whether, in the light of them, the difficulties outlined in his letter can be overcome. I would also ask him for his views on Mr Heppell's idea
of a new Green Paper.
6.
Before writing to the Governor I suggest that we should discuss these proposals at the meeting of the Hong Kong Standing Committee on 15 December. Subject to your views I should like to invite Mr Heppell to attend for this item.
8 December 1978
Copy to:
Mr Cortazzi
R JT McLaren
Hong Kong and General Department
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