FCO TELEGRAM GUIDANCE NO.215.
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A STRONG POUND AND IS WATCHING VERY CLOSELY TO SEE THAT OUR PRESENT
IMPROVEMENTS ARE PROGRESSIVE AND CONTINUOUS. OUR FRIENDS WILL
RECOGNIZE OUR RESOLVE TO PUT A CONTINUING BALANCE OF PAYMENTS SURPLUS
IN THE FOREFRONT OF OUR OBJECTIVES.
(VII) LEGALITY OF RENEWAL.
IF IT IS OBJECTED THAT HMG HAD UNDERTAKEN THAT THE SCHEME WOULD
ONLY LAST A MAXIMUM OF 12 MONTHS, YOU SHOULD MAKE IT CLEAR THAT THE
EXISTING LEGISLATION HAS A LIFE OF ONE YEAR, BUT THAT WE HAD NEVER
UNDERTAKEN THAT IT WOULD NOT BE RENEWED, IF THE SITUATION
REQUIRED IT.
3.B. TRAVEL ALLOWANCE.
THE DECISION TO RETAIN THE TRAVEL ALLOWANCE HAS TO BE CONSIDERED
AGAINST THE SAME BACKGROUND. THE RESTRICTION SAVES ABOUT
£25 MILLION A YEAR, AND THIS COULD BE LARGER IN THE YEAR FOLLOWING
RELAXATION.
1.M.F. POSITION: THE RULES OF IMF AND OECD ALLOW FOR SPECIAL
CONCESSIONS FOR COUNTRIES IN BALANCE OF PAYMENTS DIFFICULTIES. AND
WE HAVE CONSULTED REGULARLY WITH THEM. THE PRESENT PROPOSAL IS,
FORMALLY, STILL BEFORE THE IMF BOARD, BUT THE CHANCELLOR WAS ABLE TO
DISCUSS IT WITH MR. SCHWEITZER IN WASHINGTON LAST MONTH.
STEWART
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