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comments the Association wish to make, but we are under no illusion that the Association's agreement to this proposal is likely to be forthcoming. Nonethless we think it desirable that this proposal (which we previously judged to be just sufficient to be defensible if coupled with a sterling safeguard of pensions) should be on the table before the team leave Hong Kong, eg in case there is a need to defend our position publicly.

7.

On the question of sterling safeguards, I understand that the Foreign Secretary is about to write to the Chief Secretary in reply to Mr Mellor's letter of 19 March. Subject to developments on this front, we think the team will have to stick to the line that the question is still under consideration and that they cannot predict when decisions will be taken or in what sense. Unless you see objection, the team might add a point we previously used in a more general context, that we understand HMOCS officers' wish to know the outcome of this consideration in good time before the 30 June deadline for their pensions decisions.

8.

In the light of these consultations we shall work up the detailed proposal for a scheme, for submission to our Ministers and clearance with you. The timetable for decisions will be tight if we are to promulgate the scheme in early June.

You ever,

PF Ricketts

CC:

Peter Rickette

D Rayson Esq, HMT

K Woodfield Esq, HMT D Fish Esq, ODA

ASHAJC

CONFIDENTIAL

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