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22. It will obviously be important to ensure that the process of consulting the Chinese does not lead to extensive delays in

announcing the scheme.

It would probably be tactically unwise to

set a deadline at the outset for the conclusion of discussion with the Chinese. But we should give the Chinese a clear idea of the timescale on which we were working and might need to introduce a deadline at a later stage if the Chinese were not cooperative.

Consultation with HMOCS Staff Associations

23.

Another hoop to be gone through before we can announce the scheme is consultation with the staff associations in Hong Kong. Consultation with the relevant staff associations is a requirement laid down in the 1960 White Paper.

24. If we proceed with the modified compensation scheme offered

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by Ministers in 1988, we must be prepared for severe criticism by the staff associations, Overseas Service Pensioners Association and possibly, by certain MPs (eg. Mr Stanbrook). They will claim that we have failed to fulfil our responsibilities to HMOCS members in Hong Kong; that compensation and the right to retire early with immediate payment of pension has been granted in the case of all

other British dependent territories; and that the consideration that is given to inducement to serve the SAR Government is out of all proportion to the consideration given to compensation for loss of career under the Crown. The concern we have shown for Hong Kong Chinese in the nationality package may also be contrasted unfavourably with our alleged abandonment of British expatriate

civil servants to the SAR. We have also considered whether our

actions could be challenged in a Judicial review. We have concluded that while such a possibility cannot be ruled out, it is extremely unlikely.

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25.

However, the proposed compensation/incentive scheme can be defended on the grounds that it has been designed to suit the particular circumstances of Hong Kong in a way which, to quote the

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