A NOTE ON POINTS MADE BY S FOR TSY
DURING LUNCH WITH
MOD OFFICIAL ON 21 OCTOBER 1993
1.
Grateful for the hospitality of lunch. It gives me an opportunity to
speak informally and very candidly about the wider and more
important issues between HKG and UKG affected by the talks.
2.
Frankly disappointed by the outcome of this round of talks. Probably
HKG's fault in not explaining the Hong Kong position clearly before
hand. The talks have come to a very critical stage posing great risks for
both HKG and even more so for UKG.
3.
Two big issues are involved. First, UK income tax and, second, possible
cost overhang together with very heavy expenditure forecast in 1994-95
despite the rapid run-down in garrison strength.
4.
All senior officials including the Governor privy to the recent rounds of
talks have been genuinely surprised by the discovery that UK income
tax has been charged, and even topped up, under the 1988 DCA across