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to table legislation in Hong Kong unilaterally, we should continue to make clear that we stand ready to continue discussions with the Chinese if there is a prospect of their being fruitful.
3. I found Exco surprisingly robust. They felt that the Governor's annual speech to LegCo had gone down well and that the community thought our position reasonable. However, they also believed that the general sense of optimism among businesspeople and the community more widely was largely due to their discounting the idea of any breakdown in the talks.
I pointed out that the main danger to HMG in Westminster terms would lie in any failure to support the original package sufficiently.
4. I had the usual robust question and answer session with LegCo. Aside from the talks, their concerns were centred on nationality issues. They have been more or less satisfied on the BDTC/BN(0) issue but are still exercised about the non-Chinese ethnic minority and the position of wives and widows of ex-servicemen. Some LegCo members are considering bringing one of the more robust wives or widows to Britain with a view to embarrassing HMG. I had to acknowledge that this was the first issue on which a gap had opened up between HMG and the Governor. On the nationality issues and on the talks with China I was inevitably unable to satisfy LegCo, to the extent that Emily Lau threatened to boycott future sessions with me, a prospect I face with equanimity. The session was followed as always by an exceptionally good humoured dinner with LegCo members.
5. I had a good meeting with senior HMOCS Association members. They recognised that a little progress has been made on compensation and sterling safeguards since our dialogue first opened. But they argued that it will be difficult to contain their members' irritation unless a deadline for a final decision is set. I told them that the Governor's visit to London in November should not be seen as any such deadline and continued to argue that their interest lay in a good agreement rather than an immediate one. promised that we would press on as hard as we could towards a solution. HMOCS are also concerned about the way in which localisation is being implemented (which they allege is different in several key respects to the practice in other ex-Colonies). The link between this and the question of a financial package is spurious; there is already a Local Compensation Scheme for those affected by localisation. Morale within HMOCS is not good but their leadership are behaving extremely responsibly.
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