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inevitable, that Arculli will oppose the rates increase and may well carry many CRC members with him may seem like quite an attractive middle course. I should add that we are not very clear to what extent CRC senior members have been encouraging Arculli in his opposition to the rates increase. We have heard on equal authority both that Allen Lee is actively encouraging him behind the scenes, and that he is just sitting back and letting him have his head.
9. What does seem clear, on this issue at least, is that there is little willingness on the part of the four CRC members on EXCO to press the Government's case. Selina Chow, in a most revealing remark (if quoted correctly) said in early March, "The Budget comes from the Financial Secretary. It is not an ExCo budget. We are completely separate". The Budget may perhaps be a rather special case: just as in the UK, so here, it is very much the direct responsibility of the Financial Secretary, and ExCo are given little say in its formation. But in most Western governments, I suspect that Cabinet members would be expected to give rather more support to the Finance Minister in Parliament than Hamish is currently getting from ExCo unofficials who are on LegCo.
10. All this illustrates the potential pitfalls for a government which no longer has, and now institutionally almost cannot have, a majority in the legislative assembly.
11. As to the political effect of the present imbroglio, we assess that the UDHK (and the other liberal groups) have emerged from the Budget imbroglio in better shape than the CRC. They have remained united and consistent in their opposition to the Budget and have been able to win credit for ostensibly defending the interests of the community without incurring opprobrium for shaking the system too radically. The CRC, by contrast, have looked divided amongst themselves and evidently torn between a sense of loyalty to the administration and the need to curry electoral favour.
12. There is a view that LegCo is still "settling down" and may become easier to handle as its members gain more experience and understand the constraints on their position. It is also arguable that, paradoxically, Hamish Macleod was "unlucky" to have such a large surplus at his disposal since this made it more difficult to justify fiscal prudence. I think there is also a growing realisation in all sectors of the HKG that more can and should be done at a much earlier stage to consult and lobby potential government supporters in LegCo. This may well mean a readiness to take account of specific CRC recommendations in future budgets. However, having said all that, it is difficult
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