You suggest there is no safeguard against the amendment of Article 101. I believe that the section of the Sino-British Joint Declaration to which I have referred does constitute such a safeguard. The Joint Declaration is an internationally binding agreement, which confers on both parties a responsibility to see that its provisions are faithfully implemented. The draft Articles of the Basic Law in turn provide that those authorities who will be immediately responsible will give effect to the relevant provisions in the Joint Declaration.
You also ask about a Public Officers' Agreement in respect of Hong Kong HMOCS. This was covered in Mr Luce's letter of 15 April 1985 to Mr Pusinelli, in which he quoted Lady Young's statement in response to Lord Gridley in the House of Lords on 14 March 1985. enclose a copy of this letter for ease of reference. This remains the Government's position.
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I note your views about the impact of exchange rate movements on the sterling value of pensions paid to Hong Kong pensioners resident in this country. But I continue to believe that it would not be sensible or feasible to determine policy on the basis of uncertain short term trends in exchange rate movements. Other factors also need to be taken into account. The Hong Kong Government award annual pension increases which, in recent years, have outstripped comparable awards in the UK. The sterling value of Hong Kong pensions, taken over time, still compares well with those paid to equivalent public sector employees in the United Kingdom. For example, between April 1981 and April 1988 Hong Kong pensions increased by 84%, the decline of the dollar against sterling was 21%, and the increase paid to the UK public sector for the same period came to 48%. It is true that these comparisons do not hold for the most recent period noted in your letter (ie July 1985 to April 1988). Nevertheless I stand by my earlier conclusion that, taking an overall view, it is not clear that the present arrangements work to the disadvantage of Hong Kong pensioners.
You also refer in your letter to the rules governing the payment of UK Supplementary Pension for Overseas Service (SPOS) about which you have written to the ODA. I understand that a detailed reply will issue shortly.
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