officers, have been offered a once and for all opportunity to convert from contract to permanent and pensionable terms, with entitlement to join HMOCS. They argue that they cannot make a proper choice unless they know whether a general compensation scheme
will be in place in 1997. The final deadline for a decision to
convert is 31 March 1991.
History of Ministerial consideration of the issue
11. OD (K) agreed in 1985 that we should aim for arrangements whereby HMOCS officers in Hong Kong would be eligible for compensation from local revenue. In 1988, however, Ministers
decided that it would not be right or feasible to ask the Hong Kong
Government to bear the costs of a General Compensation Scheme
because a locally financed scheme for expatriates only would be highly divisive within the Hong Kong civil service and would place the Hong Kong Government in a politically untenable position.
Ministers also acknowledged that the Hong Kong Government was already making a substantial contribution to the total cost of compensation arising from the change of sovereignty in 1997 by funding a limited compensation scheme (to facilitate localisation of senior civil service posts before 1997) and a special scheme for Special Branch officers at a combined cost of some £40 million.
B 12. In his minute of 24 November 1988 to the Chancellor of the
Exchequer, Sir G Howe proposed that a General Compensation Scheme (costing an estimated £10-20 million over 10 years from 1997) should be funded by HMG from the ODA Overseas Superannuation Vote; and that the starting point for the PES negotiations for the years in question should include sums to cover the additional cost of the C scheme. In December 1988, Mr Major, the then Chief Secretary to the Treasury, agreed that the proposed scheme should be financed by HMG, although he declined to give any undertaking about how the cost of the scheme should be met in PES terms so far in advance. Following this exchange with the Treasury, however, Sir G Howe decided that the time was not right to put the proposal to the Prime Minister as
WEDABH/4
CONFIDENTIAL