CONFIDENTIAL

FROM:

RA Burns

PA

(48

HKA 233/1

DATE:

cc:

7 February 1992

PS/PUS

Sir J Coles

Mr Muir

Mr Kerby, ODA

Mr Fish, ODA Miss Brooks, Legal

Advisers Mr Wye, RAD

H.M.T. will find this had to

PS/Lord Caithness

адее

we

nunt ex

expect

боле

Private Secretary agreed what is in patat is that

watery down.

HONG KONG: HER MAJESTY'S OVERSEAS CIVIL SERVICE (HMOCS),

1 са

can take thing matters

compensate when

1 an

stage furthe in H.K, if we are 1. I agree with the terms of the draft minute to the not to face Treasury. As Mr Ricketts says, I have warned them that we considerable will be writing in this way. The Treasury will want to argue

over the fine print of the compensation arrangements: they difficulher.

contend that this may not need to be as expensive as we say. But this could be done in parallel to the letter to the Chief Secretary. I suspect that the Treasury will also prove most reluctant to agree to any movement on SPOS in the absence of a wider agreement on sterling safeguards. I suspect therefore that the language in para 2 of the draft statement on sterling safeguards will be a little too forward for the Treasury to accept. But I think it is the right starting point and certainly close to the minimum that Lord Caithness will have to say if he is to retain credibility and goodwill in Hong Kong.

A daw Runs

R A Burns

EM1ABP

CONFIDENTIAL

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