Philip Haddon-Cave
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Sir Charles Philip Haddon-Cave, , (; 6 July 1925 – 27 September 1999) was a British colonial administrator. He was the
Financial Secretary of Hong Kong The Financial Secretary () is the title held by the Hong Kong government minister who is responsible for all economic and financial matters (“Department of Finance” per Article 60 of the Basic Law). The position is among the three most sen ...
from 1971 to 1981 and the
Chief Secretary of Hong Kong The Chief Secretary for Administration, commonly known as the Chief Secretary of Hong Kong, is the most senior principal official of the Government of the Hong Kong Special Administrative Region. The Chief Secretary is head of the Governme ...
from 1981 to 1985. During his tenure of Financial Secretary, he famously coined the term "
positive non-interventionism Positive non-interventionism was the economic policy of Hong Kong; this policy can be traced back to the time when Hong Kong was under United Kingdom, British rule. It was first officially implemented in 1971 by Financial Secretary (Hong Kong), Fin ...
" as its chief principle, which has long-lasting effect on Hong Kong and world's economic philosophy.


Early life and government career

Haddon-Cave was born in
Hobart Hobart ( ; Nuennonne/Palawa kani: ''nipaluna'') is the capital and most populous city of the Australian island state of Tasmania. Home to almost half of all Tasmanians, it is the least-populated Australian state capital city, and second-small ...
,
Tasmania ) , nickname = , image_map = Tasmania in Australia.svg , map_caption = Location of Tasmania in AustraliaCoordinates: , subdivision_type = Country , subdi ...
, Australia with his brother David and sister Pamela. He was educated at the
University of Tasmania The University of Tasmania (UTAS) is a public research university, primarily located in Tasmania, Australia. Founded in 1890, it is Australia's fourth oldest university. Christ College, one of the university's residential colleges, first pro ...
and
King's College, Cambridge King's College is a constituent college of the University of Cambridge. Formally The King's College of Our Lady and Saint Nicholas in Cambridge, the college lies beside the River Cam and faces out onto King's Parade in the centre of the city ...
. He joined the British Colonial Service in 1952 was assigned to
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,
British East Africa East Africa Protectorate (also known as British East Africa) was an area in the African Great Lakes occupying roughly the same terrain as present-day Kenya from the Indian Ocean inland to the border with Uganda in the west. Controlled by Bri ...
. In 1961, he was appointed Financial Secretary in the Seychelles. In 1963, he was transferred to work in the Hong Kong government, working in the Department of Trade and Industry. In 1965, he became the Director of Trade and Industry and was promoted Deputy Secretary of Economy. In 1969, he was appointed
Deputy Financial Secretary Deputy Financial Secretary is a ministerial position in the Government of Hong Kong, deputising the Financial Secretary. The position was created in 2022 after John Lee took office as Chief Executive A chief executive officer (CEO), also kno ...
.


Financial Secretary of Hong Kong

He became the
Financial Secretary of Hong Kong The Financial Secretary () is the title held by the Hong Kong government minister who is responsible for all economic and financial matters (“Department of Finance” per Article 60 of the Basic Law). The position is among the three most sen ...
in 1971, succeeding Sir John Cowperthwaite. Contrast to his predecessor, he was known to be willing to discuss budgetary and monetary policies. He recognised a broader responsibility for the government in economy. He noted that the Hong Kong government's attitude to the economy "is frequently but inadequately described as
laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...
." He preferred to describe its stance as one of the "
positive non-interventionism Positive non-interventionism was the economic policy of Hong Kong; this policy can be traced back to the time when Hong Kong was under United Kingdom, British rule. It was first officially implemented in 1971 by Financial Secretary (Hong Kong), Fin ...
" in his Budget Speech in 1980, in which the government should not "plan the allocation of resources available to the private sector and to frustrate the operation of market forces", the private sector should accept and bear the costs of its own mistake; and the government had certain specific obligations. First it recognised its budgetary and fiscal policies would affect the entire economy and that it had a responsibility to intervene in a limited fashion. Second the government should be prepared to exercise guidance and impose restraints on banking and securities. Third, it was responsible for establishing advisory bodies where private interest could be maximised and public interest secured. Fourth, the government should provide law and order, defence, preventative health measures, fire services, sanitation and a basic network of roads and drainage and fund the services of housing, education, medical and health services and social welfare. In 1972, the
Hong Kong dollar The Hong Kong dollar (, currency symbol, sign: HK$; ISO 4217, code: HKD) is the official currency of the Hong Kong, Hong Kong Special Administrative Region. It is subdivided into 100 cent (currency), cents or 1000 Mill (currency), mils. The H ...
slumped to the bottom of its band against the
US dollar The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
but Hong Kong did not have US dollar reserves to defend the rate. The government was forced to sell sterling for US dollars to then buy Hong Kong dollar to support the rate. In July 1973, the Hong Kong dollar was dragged down against sterling due to the continued devaluation of the US dollar as a result of the outflow of capital from Hong Kong. In August 1973,
Governor A governor is an administrative leader and head of a polity or political region, ranking under the head of state and in some cases, such as governors-general, as the head of state's official representative. Depending on the type of political ...
Murray MacLehose Crawford Murray MacLehose, Baron MacLehose of Beoch, (; 16 October 1917 – 27 May 2000), was a British politician, diplomat and the 25th Governor of Hong Kong, from 1971 to 1982. He was the longest-serving governor of the colony, with four ...
and Haddon-Cave attempted to end the historic commitment to sterling reserves but the idea was rejected by London. The British government offered a unilateral agreement in return to guarantee sterling balances at a new slightly higher rate. In July 1974 the price of US$1 fell below HK$5.05 which force Haddon-Cave to announce the Hong Kong dollar to float free from its link to the US dollar on 27 November. However, the floating exchange caused the serious problem of inflation in the 1970s in an annual rate of 9.5%. He followed Cowperthwaite line to insist the colony did not need active monetary policies because of the economy's automatic adjustment mechanism although he later came close to admit that the era of automatic adjustment was over. During his tenure of Financial Secretary, Haddon-Cave was concerned about the massive growth of government spending under MacLehose administration. The government projected a three years substantial government deficits, in which Haddon-Cave described as "clearly quite unacceptable". He proposed several tax reforms to increase the government income and change the lack of progressivity in the system. In his 1973 Budget Speech, Haddon-Cave announced his intention to "restore" the profits tax as he deemed that "Court decisions have shown that a business Hong Kong doing exactly what it was set up to do in Hong Kong and nowhere else can have business income derived from outside Hong Kong, coming from no conduct of business outside Hong Kong, and escaping charge." He repeated his intention in the 1974 and 1975 Budget Speeches although no policies were implemented, which was thought to face the opposition from the business interests. Haddon-Cave also proposed tax on dividends, following Cowperthwaite had proposed a decade earlier. A Third Inland Revenue Ordinance Review Committee was set up to investigate over the matter in 1976. Although Haddon-Cave endorsed the Report to the Commissioner of Inland Revenue, the Committee's proposal to tax dividends was eventually abandoned, due to the opposition of the unofficial members of the Legislative Council. Only the recommendation of increased rate of profits tax for corporations was adopted, which left the geographical scope of profits tax remained narrow. For his services, he was awarded Commander of the
Order of St Michael and St George The Most Distinguished Order of Saint Michael and Saint George is a British order of chivalry founded on 28 April 1818 by George IV, George IV, Prince of Wales, while he was acting as prince regent for his father, George III, King George III. ...
(CMG) in 1973 and knighted with the
Order of the British Empire The Most Excellent Order of the British Empire is a British order of chivalry, rewarding contributions to the arts and sciences, work with charitable and welfare organisations, and public service outside the civil service. It was established ...
(KBE) in 1980.


Chief Secretary of Hong Kong

Haddon-Cave was appointed
Chief Secretary of Hong Kong The Chief Secretary for Administration, commonly known as the Chief Secretary of Hong Kong, is the most senior principal official of the Government of the Hong Kong Special Administrative Region. The Chief Secretary is head of the Governme ...
in 1981. In his tenure, he oversaw the massive district administration reform under the District Administration Scheme. He helped establishing the District Boards and the first District Board elections in 1982 and the second elections in 1985. He also oversaw the establishment of the Provisional Regional Council. He also witnessed the Sino-British negotiations on the Hong Kong sovereignty after 1997,
Prime Minister A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is not ...
Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of the Conservative Party from 1975 to 1990. S ...
visit to Beijing in September 1983 and the finalisation of the
Sino-British Joint Declaration The Sino-British Joint Declaration is a treaty between the governments of the United Kingdom and China signed in 1984 setting the conditions in which Hong Kong was transferred to Chinese control and for the governance of the territory after ...
in December 1984. As Chief Secretary, he also acted as Governor of Hong Kong on several occasions.


Personal life

He retired from public service in 1985. After leaving Hong Kong, he spent his retirement quietly in England. He died of heart attack while in a taxi near his retirement home in
Oxford Oxford () is a city in England. It is the county town and only city of Oxfordshire. In 2020, its population was estimated at 151,584. It is north-west of London, south-east of Birmingham and north-east of Bristol. The city is home to the ...
, England on 27 September 1999. He married Elizabeth Alice Simpson in 1948, who designed many of Hong Kong's commemorative coins, including the reverses of the "Return to China" set of 1997. The couple had two sons and one daughter. His youngest son Sir Charles Anthony was appointed to the High Court in 2011. Many of Haddon-Cave's family and relatives still live in Hong Kong, including younger son Francis who was called to the bar in 1999. He was also the grandfather of actress
Jessie Cave Jessica Alice Cave Lloyd (born 5 May 1987) is an English actress, comedian and cartoonist, known for her role as Lavender Brown in the ''Harry Potter'' film series and for her shows in London and at the Edinburgh Fringe. She has also published ...
, Sydney-based artist and property investor Ismay Haddon-Cave and television producer, Ali Haddon-Cave., Despite his long years of service in Hong Kong, Haddon-Cave was famous for his dislike of Chinese food, and at Chinese banquets, Haddon-Cave frequently insisted upon ordering steak.


Legacy

Economist
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...
hailed Haddon-Cave's "
positive non-interventionism Positive non-interventionism was the economic policy of Hong Kong; this policy can be traced back to the time when Hong Kong was under United Kingdom, British rule. It was first officially implemented in 1971 by Financial Secretary (Hong Kong), Fin ...
" as a fairly comprehensive implementation of
laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...
policy. In his obituary, Haddon-Cave was regarded as "one of the architects of the stability and prosperity that the
ong Kong Ong or ONG may refer to: Arts and media * Ong's Hat, a collaborative work of fiction * “Ong Ong”, a song by Blur from the album The Magic Whip Places * Ong, Nebraska, US, city * Ong's Hat, New Jersey, US, ghost town * Ong River, Odisha, ...
people enjoy now as an autonomous region of China." Although he attempted to reform the tax system, he was praised for "his disciplined intellectual approach to the task of balance of balancing the economy...by keeping tax levels and public expenditure low."


See also

* Profits tax in Hong Kong


References

{{DEFAULTSORT:Haddon-Cave, Charles Philip 1925 births 1999 deaths University of Tasmania alumni Alumni of King's College, Cambridge Chief Secretaries of Hong Kong Companions of the Order of St Michael and St George Financial Secretaries of Hong Kong Government officials of Hong Kong Hong Kong people of Australian descent Knights Commander of the Order of the British Empire People from Hobart