aefl.mr/sr/9.20.7
HM Treasury
CONFIDENTIAL
DIE
ET MON
Mr Stone xx
کرنا
RM7 218
43
Parliament Street
London SWIP 3AG
Telephone 071-2704902
า
AR Paul Esq
Hong Kong Department
Foreign and Commonwealth Office
Whitehall
LONDON
SW1A 2AH
Dea Ala.
31 July 1990
HONG KONG: COMPENSATION/INCENTIVE SCHEME FOR MEMBERS OF HMOCS
35
this In my Since
During my absence on leave you sent me a draft submission on subject for comment and clearance at very short notice. absence my colleague Mrs Flint rightly declined to do so. returning from leave I have contacted your Department to be told that Mr Stone and yourself are on leave.
The
2. I must say that I am surprised at this turn of events. last communication I had from you was on 4 June. In that letter you said the draft paper was being revised. In my telephone conversations with you at that time I gained the impression that you agreed that a meeting on this issue (and possibly related issues) would be needed before any submission was made to Ministers. I now understand that such a meeting is to be arranged. I have informed your office of my availability and that of Mrs Brown who would attend in my absence.
3.
Turning to the draft submission itself, it still seems to me to leave a lot of questions unanswered, not least: What it is proposed Ministers should be invited to agree to? As Dave Fish comments in his minute to you of 17 July, we would obviously prefer the less expensive option: and the annex to the draft submission indicates that the "modified compensation" scheme would be the least expensive. But much depends on the assumptions underlying the different options. In particular, on option 3 you suggest the terms should be a 25% of salary bonus per year for a maximum of 10 years; but reducing the percentage bonus and/or the number of years would reduce the cost. Moreover, there must be a concern that relating any compensation/incentive scheme to a traditional General Compensation Scheme would open the possibility of further pressure for a full blown scheme. I should make it clear that if you be for you to resist any such pressure: there can be no suggestion that HMT would agreed to a fully fledged traditional General Compensation Scheme for HMOCS in Hong Kong. On
a more detailed point, I think it worth noting that if it were decided to go for a scheme based on a salary bonus, then any such supplement should be non-pensionable.
4.
The submission fails to address effectively the question of limiting the liability for compensation falling on Announcing a scheme this far in advance increases the uncertainty
HMT.
CONFIDENTIAL
Switchboard 071-270 3000
Fax 071-270 5653
Telex 9413704