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CONFIDENTIAL - PERSONAL
10 DOWNING STREET
LONDON SWIA 2AA
From the Private Secretary 14 January 1999
Dee RN,
BA/POCL
I understand that your Secretary of State and the Secretary of State for
Trade and Industry were due to discuss this issue today. It may be helpful if I set
out the Prime Minister’s thinking.
NO FURTHER COPIES SHOULD BE MADE of this letter, and it
should be made available ONLY to other Ministers and officials with a
STRICT NEED TO KNOW of its contents.
The Prime Minister believes that:
our key objective should be to develop the Horizon Project, by negotiating
with ICL the earliest possible move to smart cards. It will be extremely
important to get the Post Office to take this negotiation seriously.
but at the end of the day, if this negotiation does not succeed in improving
upon the existing Benefit Payment Card project, it would be better to
accept this project than to pull out of the negotiation with ICL completely,
with all the damage that could do.
The Prime Minister is not close enough to the negotiations to take a firm
view on what precisely should be said to ICL at this stage of the negotiations.
But he thinks it may be easier to secure an outcome along the lines we want
(ie (i) above) if ICL are told sooner rather than later that the Government is
prepared to agree a deal with them that is broadly in line with the financial
parameters currently on the table.
The Prime Minister would be grateful if your Secretary of State and the
Secretary of State for Trade and Industry could discuss further, with other
Ministers and the Policy Unit as necessary, what the Government’s best
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negotiating strategy might be at this stage, and how best to engage the Post
Office constructively in negotiations on an improvement to the BPC project,
taking into account points (i) and (ii) above. He would then welcome a note on
this, agreed with the Chief Secretary, by close next Wednesday, 20 January. He
thinks it is essential that the Chief Secretary should be in a position to get back to
ICL with a positive message before the end of next week.
I am copying this letter to Antony Phillipson (Department of Trade and
Industry), Ros Roughton (HM Treasury), David North (Cabinet Office), Mark
Langdale (Lord Falconer’s Office) and to Sebastian Wood (Cabinet Office).
JEREMY HEYWOOD
Rod Clark Esq
Department of Social Security
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