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The Prime Minister invited the Foreign Secretary to comment, in particular on the issue of pensions. The Foreign Secretary said that as regards HMOCS, proposals were being put to the Treasury.
The Foreign Secretary pointed out that in general we had had and would have a series of tussles with the Chinese on a number of issues. We had been able to get much of what we wanted. On democracy we had reached a conclusion about the first direct elections. We would need to return to the issue at the right time. Relations with China were still uneasy but we were pressing the Chinese hard on a number of matters. The Foreign Secretary noted the very favourable impact on China of the generous flood relief provided by Hong Kong.
Sir Percy Cradock said that the airport MOU had averted the most serious threat to Hong Kong since 1984. Had agreement not been reached there would have been a cold war with no communication between the two sides at all. The MOU left it very clear that it was up to us to take decisions. The Prime Minister added that it was a mistake to think that the Chinese always won all the points. They did not.
The Prime Minister concluded by saying that if members of EXCO wanted he would be very happy to have another meeting with them next year. This meeting should probably convene in London (either a representative group or the whole of EXCO). Baroness Dunn accepted with alacrity.
I am copying this letter to Jeremy Heywood (HM Treasury) and Sonia Phippard (Cabinet Office).
Jans,
Stephen
J.S. Wall
Richard Gozney Esq
Foreign and Commonwealth office
Redacted under FOI exemptions 27(1), 40(2) and 41.
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