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7. THERE CAN BE NO DOUBT THAT EITHER A DEFERRED, OR PARTICULARLY A NEGATIVE, DECISION WOULD HAVE A SEVERE EFFECT ON MORALE, AND THEREFORE OPERATIONAL EFFICIENCY, IN BOTH THE POLICE AND ADMINISTRATIVE SERVICE. CONSTANTLY DEFERRING A DECISION ON THIS ISSUE MEANS CONSCIOUSLY PUTTING AT RISK THE EFFECTIVENESS OF THE ADMINISTRATION HERE IN THE RUN-UP TO 1997. TAKING A NEGATIVE DECISION WOULD BE DELIBERATELY TO CREATE A SITUATION IN WHICH ADMINISTRATION BECAME HARDER AS A RESULT OF A CONSCIOUS ACT BY

HMG.

8. IF THIS ISSUE CONTINUES TO DRAG ON FOR A FEW MONTHS, I EXPECT MEMBERS OF HMOCS HERE TO LOSE PATIENCE. THEY WOULD THEN MAKE THEIR CONCERNS KNOWN PUBLICLY. I WOULD EXPECT THEM TO MAKE AS MUCH FUSS AS THEY COULD IN PARLIAMENT THROUGH THOSE IN BOTH HOUSES SYMPATHETIC TO THEIR CAUSE. AS YOU KNOW, THERE ARE SEVERAL. IT IS FOR YOU TO JUDGE HOW MUCH EFFECT THIS WOULD HAVE POLITICALLY IN THE UK. FROM THE HONG KONG PERSPECTIVE, I COULD ONLY SAY THAT WE ARE LIKELY TO HAVE PROBLEMS ENOUGH IN MAINTAINING THE MORALE OF THE CIVIL SERVICE AS 1997 APPROACHES, WITHOUT ADDING ONES THAT ARE WITHIN THE POWER OF HMG TO RESOLVE.

9. AS YOU KNOW, THE HMOCS ASSOCIATION SEE THE RESPONSIBILITY FOR HMOCS AS RESTING SOLELY WITH HMG. THEY ARE NOW TALKING OF TRYING TO OBTAIN A DECLARATION IN THE BRITISH COURTS THAT HMG HAS A RESPONSIBILITY TO INTRODUCE ARRANGEMENTS FOR HONG KONG HMOCS MEMBERS SIMILAR TO THOSE INTRODUCED FOR HMOCS OFFICERS IN OTHER TERRITORIES UPON THE CHANGE OF SOVEREIGNTY. THE ARGUMENT WOULD BE THAT THIS IS A MORAL OBLIGATION CLEARLY ESTABLISHED THROUGH PRACTICE AND PRECEDENT ELSEWHERE AND IN VARIOUS WHITE PAPERS.

10. TWO DAYS AGO BARRIE WIGGHAM (SCS) HAD AN INFORMAL MEETING WITH THE HMOCS ASSOCIATION COMMITTEE. ALTHOUGH IT WILL BE UNCOMFORTABLE, HIS ATTENDANCE AS SCS AT THE ASSOCIATION'S INAUGURAL GENERAL MEETING ON 28 JANUARY IS UNAVOIDABLE. IF WE ARE TO CONTAIN THE SITUATION HE WILL NEED TO HAVE SOMETHING POSITIVE AND SUBSTANTIAL TO SAY. WE MUST NOT LOSE SIGHT OF THIS POINT.

11. IN SECOND TUR, YOU REFER TO OFFICERS HAVING GONE TO HONG KONG WITH THEIR EYES OPEN. IN FACT, MOST HMOCS MEMBERS JOINED THE HKG WELL BEFORE THE JOINT DECLARATION. THE POSSIBILITY OF CAREER LIMITATIONS FOR HMOCS OFFICERS HERE WAS NO CLEARER THAN THOSE IN AFRICA OR ADEN. EVEN WHEN THE NEGOTIATIONS BEGAN, THERE WERE EXPECTATIONS OF AN EXTENDED LEASE OR A MANAGEMENT CONTRACT. YOU

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