aefl.kw/docs/6.4.12

HM Treasury

Mr NC G Whitney

Hong Kong Department FCO

London SW1A 2AH

ET MON

HKA 233/1

NTIAL

Parliament Street London SWIP 3AG

Telephone 071-270

8712

Richelts

Mr Moyles 8/12

File.

Mavis

Mr Fish, ODA

18/12

4 December 1992

644

ominous?

Dear Nigel.

HMOCS: LINE TO TAKE WITH THE HMOCS ASSOCIATION

GHI

Thank you for your letter of today's date.

We can support changing the word "hopes" to either "intends " or "aims" if it helps to clear up the ambiguity in the minds of the HK HMOCS Association Committee. But we can go no further on our existing line as set out in the first paragraph of your letter.

We

cannot accept the revised line proposed by the HKG. We are not agreed on a compensation scheme on "traditional lines", and to say that we are considering a "revised" compensation scheme risks raising HK HMOCS' expectations unduly.

More generally, though we must (and are) seeking to meet the legitimate expectations of HK HMOCS members, we must not be swayed in pursuing HMG's interests in this matter, particularly in terms of the contingent costs we will be taking on, by paying undue attention to the political machinations in Hong Kong.

We are in the process of formulating a response by the Chief Secretary to the Secretary of State's letter of 18 November. Some important technical issues have still to be resolved. I have in mind the relationship between a sterling safeguard and SPOS. We will reply as soon as

these have been worked out to our satisfaction.

Yours, Kevin Wordfull.

KEVIN WOODFIELD

Switchboard 071-270 3000

Fax 071-270 5653

Telex 9413704

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