KING KONG

JAN 33

CONFIDENTIAL

Administrative Service and the Police Force. We must face the realities. Hong Kong people running Hong Kong does not mean ex British Colonial Service officers running Hong Kong. In reality the opportunities for ex HMOCS officers post 1997 are very slim. In many ways I would have said worse than in a large number of other territories such as Malawi, Botswana, Fiji and the Western Pacific. This is even before we take account of the politics of the People's Republic of China.

There is in my view an overwhelming case for an equitable compensation scheme. This could only be option C as set out by the Foreign Secretary, albeit with the artificially low cap of £120,000.

Conclusion

We have exhausted the technical arguments on this issue. A political judgement is now needed. With the other difficulties I am facing on the political front, I cannot allow this issue to drag on further, if we are to have a stable administration in the run-up to 1997. The Secretary of State's proposals represent the absolute minimum necessary to achieve a resolution. I could not in any circumstances honourably accept or defend anything less.

I am copying this letter to Douglas Hurd and Michael Portillo.

The Rt. Hon. John Major MP

The Prime Minister

No. 10 Downing Street

London

SW1

Governor

c.c. The Rt. Hon. Douglas Hurd CBE MP

Secretary of State

Foreign and Commonwealth Affairs

The Rt. Hon. Michael Portillo MP Chief Secretary

Treasury

CONFIDENTIAL

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