Me Rickettic Miss Williams or 13/11 I Stone ofr
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I encouraged in sew to minute with his views from the sidelines: he has experence of negotiating with the Treasury. My fish (ODA) is not back at his deste yet, but I shall
discuss with him tomorrow.
Mr
HKD
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Nor
13/01
FROM
DATE
HKB 233/1
185
: J A Dew
RMD
: 13 November 1991
CC : Mr Burns
Mr Muir
Mr Chase
26/11
? (this is what they say)
?
HONG KONG : HMOCS PENSIONS
1.
I am sorry I had to leave Mr Burns's meeting with Mrs Brown, Mr Rayson and others from the Treasury shortly before the end. But I hope you will not mind some comments from here.
2.
The Treasury are clearly utterly convinced that the only justifiable solution is that the Hong Kong Government should transfer a capital sum adequate to ensure the value of the pensions into sterling now. They believe the ODA proposal, for HMG to take on a guarantee of the pensions' sterling value, would fall foul of the PAC and feather-bed the expatriate civil servants (well paid people who knew the score when they went to Hong Kong in the first place). The Treasury believe we have not yet tried hard enough to sell their idea in Hong Kong. I doubt if any Ministerial discussion or correspondence at this stage would shake the Treasury - they would simply brief the Chief Secretary to stand firmly on the ground they have staked out.
3.
To stand a chance of moving the Treasury I believe you will need to provide some new hard evidence that their proposal has been energetically pushed in Hong Kong and got nowhere for genuine reasons. I understand that a visit to Hong Kong by ODA (and Treasury) experts with the ODA in the lead is now proposed for this purpose. It would do a great deal of good for Mr Rayson to go in person, to remove any scope for Treasury suspicions that their proposal had not been adequately pushed. I believe that we in the Diplomatic Wing should keep well down and certainly not lead the team (as the ODA have suggested).
4. We also need figures on the cost to Hong Kong of capitalisation now, and a clear idea of how those figures relate to other demands on Hong Kong's reserves before 1997. Without such figures it is difficult to sustain your argument that capitalisation is inconsistent with the Prime
RC7ADV
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