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Hong Kong Government's present offer, without prejudice, pending arbitration when this becomes possible. This would be conditional on the Hong Kong Government making some concession on one of the other grievances: possibilities are the minimum entry point and the level for proficiency payments. In addition to normalising working relations, those in dispute could receive the back pay, which, they claim, amounts to some HK$4,000 (£500)

each.

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5. I recommend that Lord Goronwy-Roberts should make the following points:

(a) Because of the possible prejudicial effects that arbitration in this case could have on the setting up of a proper disputes machinery for the public service as a whole, a measure we are anxious to see introduced, he accepts that this is not, at present, a practical solution.

(b) However, he is anxious to do all he can to bring this dispute to an end. He will therefore arrange for officials to write again to the Hong Kong Government with a view to achieving an interim settlement, without prejudice to either side, pending the introduction of machinery for the settlement of public service disputes.

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