SECRET
DESKBY
for an announcement is growing.
OPD (K) on 1 July presents a
natural opportunity to try to force things to a decision. If
WERE to
such a decision was to go in our favour, all well and good. But
we would have to be prepared for a less satisfactory outcome, in
which OPD (K) members, who after all will only have a limited
Acquaintance understanding of the subject, will either favour a compromise
involving splitting the difference in cost, or alternatively will
invite the Cabinet Office to fulfil their original brief of
recommending a solution. The Treasury have said that they do not
believe the issue needs to be put to OPD (K). There does now seem
to be a real chance that we could in time secure an acceptable
deal through official-level negotiations including a compensation
scheme involving slightly lower factors, and a sterling safeguard
at 16:1, albeit with the proposed Treasury mechanism. If the
Treasury can see these elements falling into place, I doubt they
would let the SPOS amendment stand in the way of an overall deal.
If, however, we take the issue to OPD (K) and are sent away to
continue bilateral negotiations with them, we would probably find
ourselves back to square one, with the Treasury back in
stone-walling mood.
4.
One further point to bear in mind is that when the next round
of consultations are held with the Association, they will have to
be on the basis of detailed draft schemes. These schemes, which
your and our officials have been working on, are complex and
leave plenty of room for the Treasury to save money at the
margins and be difficult if they so wish. Thus, even if we did
get a decision in our favour at OPD (K) that would not necessarily
be the end of the story and it could still be some time before a
detailed scheme was worked up and an announcement could be made
and further consultations held.
5. As against that, we cannot guarantee that we will be able to
extract an acceptable deal after a further two months or so of
official-lever
haggling
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