CONFIDENTIAL
D 7. In accordance with the 1954 white paper, HMG should be
negotiating this safeguard with the successor Government,
but one does not exist until 1997. In the absence of such a
Government I should have thought we should discuss the matter with the Chinese: HKG is after all not in a position to commit the SARG to such expenditure. I submit that the chances of the Chinese agreeing to a sterling safeguard funded by the SARG are probably nil.
8. In conclusion, I believe that only HMG can realistically consider providing a sterling safeguard and I recommend that we accept this.
IS A STERLING SAFEGUARD NECESSARY?
9.
The arguements advanced as to why a safeguard should be introduced are:
(a) in previous colonies such a safeguard has (almost) always been introduced at the change of sovereignty. It is part of the package HMOCS members expect to receive. [Comment: a strong point on which we (rather than HKG) will be picked up.]
(b) it is inequitable that those who have loyally served the Crown should potentially be faced with a worthless
pension. [Comment: we cannot concede that this is a possibility.]
(c) Hong Kong HMOCS officers will almost all retire to
the UK. They should not be faced with pension income in
Hong Kong dollars and expenditure commitments in pounds. [Comment: tough, there is no contractual guarantee to provide a sterling linked pension.]
RODACP/4
CONFIDENTIAL