GENERAL COMPENSATION SCHEME
Background
CONFIDENTIAL
1.
There are some 700-800 officers in HKG who are or who have the
option to become members of Her Majesty's Overseas Civil Service
(HMOCS). HMG has an obligation to compensate HMOCS officers for the
change in their status arising from the transfer of sovereignty in
1997. Such compensation has been paid in every other dependent
territory on independence.
2. Because of our commitments under the Joint Declaration to bring about a smooth transition in 1997, the normal compensation scheme,” involving retirement at independence with immediate payment of pension and positive inducement to members of HMOCS to stay on has
therefore been drawn up.
3. The scheme proposed involves only limited compensation (say 10%
of the total amount agreed) for those who leave at the change of
sovereignty: full compensation would only be payable on a year by
year basis to those who stayed on for, say, 10 years. the scheme we
have in mind would offer annual payments of about 20% of salary to those who opt to stay.
4.
We have recently again consulted Hong Kong on the proposed
scheme. Officials there believe it will not be well received by
HMOCS members not generous enough. But our view is that no scheme
short of full compensation will be well received. We are going back
to Hong Kong with more details to flesh out the scheme.
5.
Treasury has accepted that a scheme, funded by HMG is necessary and has noted the financial implications, estimated at
£10-20 million. We will shortly consult the Secretary of State on
the most appropriate timing or approach to the Prime Minster.
ROYACQ (2)
CONFIDENTIAL
BACKGROUND