031047Z
MMENT:
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Annex
CONFIDENTIAL
FM FCO
TO PRIORITY HONG KONG
TELNO 2205
OF 31113OZ DECEMBER 91
INFO PRIORITY PEKING, UKREP JLG HONG KONG
STRICTLY PERSONAL FOR GOVERNOR, FROM BURNS
PEKING PERSONAL FOR AMBASSADOR
UKREP JLG PERSONAL FOR PAUL
MIPT: HMOCS MATTERS
HKB 233/1
1. I RECOGNISE YOUR FRUSTRATION, BUT I DO NOT THINK IT IS FAIR TO SAY THAT THE POINTS YOU MAKE ARE FALLING ON DEAF EARS. THE PROBLEM WE FACE AT THIS END IS THAT THERE IS AT THE MOMENT AN EQUALLY IMPLACABLE TREASURY VIEW THAT NO EXTRA MONEY WILL BE FOUND FROM HMG. I SEE NO SIGN THAT THEY WILL RELENT (EXCEPT FOR AN APPARENT WILLINGNESS TO HELP MAKE A COMMERCIAL HYPOTHECATION SCHEME WORK). HMOCS OFFICERS IN HONG KONG ARE CONSIDERED TO BE WELL OFF AND TO HAVE GONE TO HONG KONG WITH THEIR EYES OPEN. THE FACT IS THAT HONG KONG IS SEEN TO BE A THRIVING ECONOMIC SUCCESS, WELL ABLE TO AFFORD WHAT IS NECESSARY TO KEEP ITS ADMINISTRATION UP TO SCRATCH: WHEREAS THE POLITICAL PRESSURES HERE ON THE CHANCELLOR ARE ACUTE. GIVEN THE OTHER NEW PRESSURES ON THE TREASURY (EG. HELPING THE RUSSIANS DESTROY THEIR NUCLEAR HARDWARE) I THINK IT VIRTUALLY INCONCEIVABLE THAT WE WILL EXTRACT MONEY BEFORE THE GENERAL ELECTION. BUT SINCE
THE DEBATE IS ENGAGED I DO WANT TO TRY TO GET THE ISSUES LOOKED AT AGAIN AT CABINET LEVEL BEFORE THE SPRING. AND IF WE ARE TO HAVE ANY HOPE OF GETTING MINISTERS TO ACCEPT SOME COST FOR HMG, WE NEED TO BRING OUT THAT THE COST OF NOT DOING ANYTHING COULD WELL BE HEAVIER, POLITICALLY IF NOT FINANCIALLY. HENCE THE REQUEST IN MIPT FOR THOUGHTS ON WHAT YOU WOULD HAVE TO DO IF NO DECISION WAS POSSIBLE ON A SCHEME FOR HMOCS.
2. INCIDENTALLY SOME HMOCS WASTAGE IS INEVITABLE. CAN YOU IDENTIFY WHOM YOU REALLY MUST KEEP IN PLACE UP TO OR THROUGH 1997, BY HOOK OR BY CROOK?
HURD
ΜΑΙΝ
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SIR J COLES
[MCLACHLANJ
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