CONFIDENTIAL
there have to be further studies of commercial hypothecation in place of sterling safeguards, we want to go firm on the compensation scheme first and to begin consultations on it
with Hong Kong staff associations. The HMOCS Association AGM is on 14 January, and we cannot afford a public row on this subject now: Ministers will be sensitive to the domestic political consequences of our Hong Kong policy seeming to fall apart. If the Treasury officials resist this, we shall want to recommend that the Secretary of State takes it up with their Ministers. We should not show any FCO nervousness about putting another Hong Kong issue to the
Prime Minister.
SPOS
10.
Finally it would be worth trying to make progress on SPOS: there is no justification for the Treasury letting this hang on the other points. I recommend that you invite Mr Fish to speak on this.
N J Cox
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