HMOCS
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Urge you to take the FCO proposal as a basis for settlement.
My proposals are already significantly less generous than in previous schemes.
The difference between us on the compensation scheme is small
(only £15million over 6 years). The theoretical liability on the pension safeguard looks big
(£250million) but would only apply if the HK$ became worthless.
Accept that public expenditure climate is tough. But very reluctant to put another proposal to HMOCS and be driven back. should if possible avoid a row and judicial review.
We
The Governor remains convinced that any offer less favourable than the FCO proposal would be rejected. He is also adament that he will publicly oppose any offer we make falling short of that. Hope we can avoid public disagreement with the Governor, which would be most damaging.
[If required]
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The Prime Minister would like to see a settlement on the basis of a compromise between FCO and Treasury positions. We would have to consult the Governor