TNAG-1085-FCO40-1335-Implications-for-Hong-Kong-of-changes-in-the-British-nationa-1981 — Page 157

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(ii) excluding from control (a) premises in buildings issued

with an occupation permit after the date of gazetting of the Bill (June 19), and (b) premises with a current rateable value of $80,000 or more with effect from 18.12.81 and premises with a current rateable value of $60,000 or more, with effect from 18.12.82.

There was public opposition prior to and after the passage of the Bill. It come mainly from two quarters: from labour organisations (including the left-wing Federation of Trade Unions) who criticised the higher increase ceiling, and charbers of commerce who predicted foreign enterprises would pull cut of HK. There was also criticism that by relaxing control the government was negligent of the difficulties of the little man in meeting rising living costs. Several days before Leglo debate representatives of companies from major industrial countries, led by the American Chamber of Commerce, care out in full force at a press conference to denounce the "luxury" flats decontrol reasure. The Federation of HK Students did a telephone survey, showing public opposition to decontrol. Representatives lobbied UMELCO. Chinese Manufacturers' Association also denounced proposals. Bill passed with three Unofficials speaking against and six speaking for (including Sr. Unofficial). The Fress immediately carried sustained criticism of the decision, saying it was against public interest and public wish. Comments of opposition groups were also reported. Foreign companies reported to have adopted a "wait and see" attitude and AmCham appeared to have backed down, saying it would proceed with plan to build flats for members in NT. Press and public interest seems to have died down. FS in interview with Reuter said overseas company could leave HK if they cannot meet rent costs. This was widely reported in the press without adverse comment.

Government's proposals are intended to be fair to both landlords (controlled rents are now generally some 35 per cent of market rent) and tenants. The Government had always hoped, and it was announced prior to the setting up of the Committee to review rent control legislation (report published on May 10), that rent control would be short-term measures. However, while the government generally accepts the recommendations by the committee, it does not consider this the right time for a significant move to phase out rent control. Raising the percentage ceiling of permitted increases was designed to slow down the rate at which such rents have been falling behind market rents. Excluding new premises from controls was intended to encourage developers to produce flats for the rental market and to discourage hoarding by owners. Excluding the luxury flats from control in two stages reflects the government stand that it only assists those considered to be in need of protection. It is now working on a proposal by the committee to expand the jurisdiction of the Lands Tribunal to cover, disputes arising from tenancies which are excluded from control.

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