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Mr Paul
Hong Kong Dept/FCO
Mr Stone
pl dizayns
Discussed 178/2
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FROM: D S F9 FEB 1990
OFFICER
3444)
INDEX
DATE:
1990
Mr Kelby
I had a useful discussion with Michael Stone on 12 February about how we should deal with the increasingly voluminous and searching questions compensation and pensions issues.
on
2. Given that we have still to put the compensation/incentive scheme to the Chinese, and that we are unlikely to be able to announce our proposals until the summer, we have no alternative but to play a straight bat to questions of detail. I think it important however that we should do all we can to lower the widely held expectation that there will be a general compensation scheme on traditional lines. The latest OSPA letter to Mr Maude presses hard on the compensation issue, and I would support an early response very much along the lines of what Mr Maude said to Mr Rooker in his letter of 10 October 1989. A clear indication that we do not see a case for a general compensation will not prove palatable to HMOCS staff in Hong Kong, but we might as well face their adverse reaction sooner rather than later.
3. In response to a request from Michael Stone for help in replying to a letter from Peter Bottomley MP, I sent him a number of paragraphs which could be used in the compilation of a reply to that letter, and to those from the various staff associations, which were handed to the Secretary of State during his recent visit.
4.
Unfortunately there is little we can say to give total reassurance on
any issue. For us to say that "of course we will pay pensions if the
Chinese default", or "of course we will protect the sterling value of your pension" could cause divisions between expatriate and local staff, and in the case of the former could act as a positive incentive for the Chinese to default. And I still feel that we are going to be hard-pushed to offer any guarantees to HMOCS staff, while denying them to local staff who came to Britain as a result of taking up the British nationality offer.
5. In view of the delicacy of the position I think we have little choice but to say something along the lines that "the various issues of concern are under review and that HMG can be relied upon
to look after the
interests of HMOCS staff". OSPA are well aware of the Carr-Robertson assurance (copy attached) and I am sure that it is only pressure from Hong Kong which is prompting them to seek an explicit assurance that we will pay pensions at a guaranteed rate, if the SAR Government do not. In due course I would expect OSPA, or Ivor Stanbrook in the House, to ask whether Carr-Robertson would apply in Hong Kong. It may be possible to avert such an eventuality by arranging for a Minister to explain to certain MPs that reticence was due entirely to Our wish not to induce a default by making public statements about Our willingness to pick up the tab. Otherwise it would not be easy to resist making a commitment which could
our
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CONFIDENTIAL