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5.
However, on the strong advice of Mr Galsworthy and the Governor, Lord Caithness decided that it was better not to make any statement which might become public (or to open the
consultations with HMOCS officers which are the next step)
until we had briefed the Chinese. This will take a little time, so, in order to pin down the progress we have made with the Treasury and to minimise the risk of future Treasury back-sliding (eg after an election is called or in the light of Hong Kong's announcement last week of its healthy fiscal reserves), he has made the statement in a confidential letter to Sir David Ford (Chief Secretary of Hong Kong and the most senior HMOCS officer in the
territory).
6.
We need now to wrap up the present correspondence, confirming where matters stand. We can agree to a request by Treasury officials' that we should clear with them the briefing line for use with the Chinese (this will be difficult and time-consuming, but we can hardly refuse the
request). On the details of our compensation scheme we had feared that the Treasury officials would seek to block
unworkable progress by pressing on us factitious proposals for changes and requiring that we agree these details before opening consultations in Hong Kong. In fact they have not done so, but there is advantage in our showing that we are considering the ideas they have put forward and will keep in
close touch at official level as we prepare for the
consultations. The draft minute from the Secretary of State
therefore also covers this point and, to protect our
position in future discussion, rebuts the Chief Secretary's ill-informed assertions on sterling safeguards. To avoid provoking a rejoinder from Mr Mellor it is less acerbic than
our first draft.
Moso.
N J Cox
This minute is intended not to require any response from the Chief Secretary; and
NJCAAP/4 to establish that officials should proceed wilt consulting the Moors in
The Governor's main requirement.
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Hong Kong over the coming weeks. This meets
Zrchetts 10/0
No comments yet.
Private notes are available after approval.