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that our best hope for achieving this was through Private Office
channels. I have included in the Secretary of State's statement a
passage on entry refusal cases which will need to be cleared
directly with the Home Secretary's Private Office. When this is done it would be helpful if you could also press for a reply to the Secretary of State's minute, to reach us in advance of the debate.
Hong Kong Civil Servants' Pensions
4. I take it that the Secretary of State has in mind the question of a possible general compensation scheme for members of HMOCS in Hong Kong. The next step will have to be a bilateral between the Secretary of State and the Chancellor of the Exchequer, to make the case for agreement in principle that payments under a General Compensation Scheme in the ten years from 1997 can be financed by an additional PESC allocation. It was however agreed, on the principle
of tackling one problem at a time, that we should first secure a
resolution of differences over the Defence Costs Agreement. The dust is now settling on that front, and we are preparing to submit to the Secretary of State on the General Compensation Scheme in early September, when Ministers have returned from the summer break. The Governor is aware of our proposed timing, and is content.
5. There are a number of other problems relating to Hong Kong
Civil Servants' pensions which will need to be resolved at some stage. These include the possible conclusion of a Public Officers Agreement and possible arrangements to safeguard the sterling value of pensions. It is intended to tackle these some time nearer to
1997.
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