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arguments we can muster. The most sensitive point is what

would happen if there is a breach of the Joint Declaration:

the only safe line if pressed on this is that it would be

for the Government of the day to consider how to respond.

After the consultations

16.

The consultations are likely to be difficult, but given

the moderation of the Committee and the fact that we shall

be undertaking to report their views back to Ministers, it should be possible to keep some lid on things publicly

until we are closer to decisions. (Nonetheless we are preparing contingency lines for News Department to use with the media).

17. On our return I shall submit again, setting out the

options and recommendations for what we should put to the Treasury, with a view to promulgating the scheme in early

June. At this stage I doubt that we shall need to move

on the maximum sum payable: the cash sums involved will be respectable, relative to those paid in other territories and to UK public service salaries. The protracted phasing period is harder to justify, and the cost implications of a move here would be less significant. Ministers may also wish to look again at the question of early retirement, ie

in the light of what sort of case the HMOCS Association make

about it during the consultations next week and perhaps too in the light of the Treasury response on sterling safeguards. (I set out at Annex A some considerations going against the points in para 12 above. Personally I

think these carry some weight. However the Treasury would strongly resist a change of policy on this point).

Mor

N J Cox

NC1ACC/8

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with there tactics and commend

them to the Minister. The litter to the Cartland

needs to issue tomorrow. Wehave had some mortmful unchanges with the homernor,

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homeauer des shall and Muiston this with

and will insulting remind alter to the Chuif Secaibary.

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