CONFIDENTIAL
SECRETARY OF STATE'S MEETING WITH THE CHIEF SECRETARY ON HMOCS
(27 OCTOBER)
Points to Make
General Points
-
We agreed in margins of Cabinet on 1 July that we should both
be flexible in order to reach a solution.
- Should recognise that the Governor is in a difficult position.
He needs the loyalty of HMOCS and cannot be seen to have agreed
to a package which they regard as unfair. We must avoid a rift
between us and the Governor.
Compensation
- ODA's latest figures show my proposed scheme would cost £46 million, whereas your proposal would cost £32 million.
- Our officials are agreed that it should be possible to produce
an acceptable scheme costing £39 million. Suggest we ask
officials to finalise a scheme on this basis.
Sterling Safequard
- I have stressed before the presentational value of a rate of
HK$16: £1, and that even at this rate the chance of any liability
being incurred is remote. The Governor is adamant that the
HMOCS Association will not accept a rate any worse than
HK$16: £1.
- I have looked for flexibility in our position. If you could agree a rate of HK$16: £1, we could accept the mechanism for the safeguard proposed by your officials. This makes it even less likely that any payment would ever be required from HMG.
sos.brief.ADM
SLM
CONFIDENTIAL