CONFIDENTIAL
FM FCO
TO IMMEDIATE HONG KONG
TELNO 1020
OF 2315OOZ MAY 90
CONFIDENTIAL
146453
MDHOAN 9332
-MKB 431/4 TOP COPY
MY 1990
Q DIST?
50
FOR SHIPLEY CSB FROM STONE, HKD
YOUR TELNO 1612: MP'S LETTER: MATTERS OF CONCERN TO AECS
1.
WE DO, OF COURSE, ACCEPT THAT UK CIVIL SERVICE SALARIES ARE NOT SUBJECT TO FLUCTUATION BUT OUR VIEW IS THAT THE STATEMENT ABOUT RELATIVITIES IN THE DRAFT LETTER IS CORRECT AT CURRENT EXCHANGE RATES. EVEN ALLOWING FOR REDUCTIONS IN THE STERLING VALUE OF BASIC PENSIONS, HONG KONG PENSIONERS HAVE BEEN BETTER OFF IN TERMS OF OVERALL INCOME THAN OTHER UK OR HMOCS COUNTERPARTS. THE QUESTION OF RELATIVITIES IS IMPORTANT BECAUSE, IN ANY DISCUSSION ABOUT THE NEED TO PROTECT THE VALUE OF HONG KONG PENSIONS, THE TREASURY ARE CERTAIN TO HAVE REGARD TO LEVEL OF BENEFITS PAID TO UK PUBLIC SERVANTS WHOSE BASIC REMUNERATION DOES NOT ALWAYS COMPARE FAVOURABLY WITH THEIR COUNTERPARTS IN
HONG KONG.
2.
THUS FAR BOTH WE AND YOU HAVE SAID THAT STERLING SAFEGUARDS ARE NOT A MATTER FOR OUR RESPECTIVE GOVERNMENTS. THE PROPOSED TEXT WOULD TAKE THE MATTER A LITTLE FURTHER, SUGGESTING THAT AT SOME STAGE THE QUESTION MIGHT BE CONSIDERED MORE SYMPATHETICALLY. THIS COULD ARISE FOR EXAMPLE IN THE HK DOLLAR/US DOLLAR LINK WERE TO FAIL AND THE HK DOLLAR DEPRECIATE SIGNIFICANTLY.
3.
4.
WE AGREE WITH PARAGRAPH 2 OF TUR.
GRATEFUL FOR ANY FURTHER VIEWS ON THIS SUBJECT, WHICH IS LINKED TO OSPA'S LETTER TO MR MCLAREN. OSPA'S AGM WILL TAKE PLACE ON 31 MAY SINCE THERE ARE HOLIDAYS HERE ON 25 AND 28 MAY, GRATEFUL FOR VIEWS DESKBY 2409OOZ.
HURD
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