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4.
The Governor has replied that he cannot hold the line with
the HMOCS Association for another two months and that he would
therefore wish the issue to be put to OPD (K) for a decision.
Helpfully, he has indicated that he could accept, as part of
an overall deal one element of flexibility: ie reduced
compensation factors in line with those used in some other schemes such as Fiji and the Western Pacific. He indicated
earlier that he could accept, also as part of an overall deal,
the Treasury proposed mechanism for the sterling safeguard
scheme if the safeguard rate was no worse than 16:£1.
5.
The two concessions the Governor is prepared to offer give us a real chance of reaching an agreement with the Treasury
which we can recommend to Ministers. But this cannot be done
before OPD (K) on 1 July. If, however, we do ask OPD (K) to take a decision we run the risk of either getting a decision
unacceptable to the Governor, or of OPD (K) asking the Cabinet
Office to fulfil its original brief of recommending a solution.
If either were to happen we would be no closer to an acceptable
solution and the Treasury's hand would be strengthened, thus
reducing our chances of securing a deal at the working level.
think we should point out these risks to the Governor and ask
him to confirm that he does want to go to OPD (K).
6.
If he does, I recommend that we invite No 10 to agree, and
to ask the Cabinet Office to circulate their paper on HMOCS as
the basis for discussion. The Foreign Secretary can then
minute OPD (K) colleagues setting out the Governor's comments
on the paper and reiterating that our proposals are the minimum package that can be imposed on HMOCS officers. Mr
I
hk.sub.ADM
SLM
SECRET
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