CONFIDENTIAL

officers and help anchor them in position, thus

strengthening the authority of the new Governor and his

government over the next five years, improving the prospects

for a smooth transition and making it less likely that the

liability will ever become real. Taking action now will

also make it easier for us to hold the line that these are specific arrangements deriving from our historical obligations towards HMOCS officers: if we were to leave the

matter unresolved until problems actually occurred it would

be much harder for us to hold the line against claims by

non-HMOCS officers, who have shown equal commitment in Crown

service, to receive equal support from HMG.

10. Once we have agreed the principle of an HMG-backed

sterling safeguard, our officials can look again at the

practical details to ensure that the liability is fixed at

the minimum level necessary to fulfil our obligations. I

should be happy to meet you to discuss the question if you

would find this helpful. If we cannot reach agreement we shall need to discuss collectively with colleagues.

".

I

:

hope we can also make early progress on amending the

David Mellor recognized SPOS regulations for existing pensioners "the degree of inequity" in the way they operate at present this

letter of 24 February).

Secretary of State

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