Mr Morris, HKD

CONFIDENTIAL

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lig/s

c.f Mr him, opit

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HMOCS

As you will see from Alex Allan's letter to me of 18 May, the Prime Minister and the Foreign Secretary had a word about Hong Kong pensions earlier today. It was agreed that the Foreign Secretary would speak privately to the Chief Secretary. The Foreign Secretary is thinking of doing this in the margins of Cabinet, or at the House of Commons, when an opportunity arises.

I should be grateful if you would provide by close of play on Wednesday 19 May a clutch card for the Foreign Secretary's use with the Chief Secretary. This should set out the arguments for the position which the FCO has put forward, but (as Alex Allan's letter foreshadows) include as a final tiret the option of splitting the difference. The Foreign Secretary would want to make clear that this would cause difficulty for the Governor, but that, final concession, he and the Prime Minister are prepared to see a settlement on that basis.

Please also attach the Governor's telno 774.

18 May 1993

CC : PS

PS/Mr Goodlad Sir J Coles

Mr Muir

Mr Hum

Stgown ömit

(J S Smith)

CONFIDENTIAL

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