CONFIDENTIAL
XX
Treasury
Ministers
would certainly reject an
approcel
from feo Ministers
while riable
19977.
amount of
The
could take accoual
payment (3)
the
The precise pensions before 199 hould be for contineration
negotiation which cost to HKG of bringing forward it's habilities to pay pensions to HMoes 15. Mr Shipley said it would be impossible for Hong Kong to
do this. HKG's considerations were political, not
financial. HKG would not be able to capitalise pensions for
one section of its staff and not for the others especially
as local officers were the ones currently pressurising HKG
to capitalise their pensions. HKG's Financial Committee would never approve such expenditure. Mr Rayson said that HKG already recognised the importance of retaining its staff
and improving morale, this was HKG's special need.
-
Mr Shipley said that it was HMG not HKG which had special
obligations to members of HMOCS: it was HMG's responsibility
to reassure them about their pensions.
16. Mr Rew said the issue would be a presentational one.
For its part the Treasury would like to see some figures.
He reiterated that there was no commitment to a sterling
"Treasury officials would safeguard. Mr Rayson said that he could not advise Meir Ministers to go along with sterling safeguards and that/he
did not rule out the possibility of the Treasury returning
suggested that it might be helpful to their own proposal at some stage. Mr Rayson said it was
for the FCD and HRG necessary to reflect further on the matter and for,
Value = 15 HKG in settling consideration to be given to the political price to be paid
There were advantages in having this matter solved
M. Shipley and perhaps e could persuade it Financial Committee that
The proposal
at he migmas acceptabic and could be ring fenced as a one-offy this solution was necessary. Mr Shipley said
The issue.
options remained by KG. is be fully exploreinl
Whilst
The Treasury would be
glad to conside alternative
from HKG,
which had
emerged
K
to %% HKG
WHKG's.
that the Chinese would also need to be consulted. It would
be very difficult to persuade them to accept such a large pay off in 1997 and it would look like a clear indication of
a lack of faith after 1997.
17. Mr Rew said it could be presented as relieving the
Chinese of an obligation at a favourable discount. Mr Fish
(st) 300million agreed that a figure of 900 against reserves of HK$71 bn was small. Mr Shipley reiterated that it was not the cost of the idea which was HKG's problem. Mr Rayson
repeated that the Treasury would still keep its own idea on
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CONFIDENTIAL