031047Z
COMMENT:
CONFIDENTIAL
FM FCO
TO PRIORITY HONG KONG
TELNO 2204
OF 311112Z DECEMBER 91
INFO PRIORITY PEKING, UKREP JLG HONG KONG
STRICTLY PERSONAL FOR GOVERNOR, FROM BURNS
PEKING PERSONAL FOR AMBASSADOR UKREP JLG PERSONAL FOR PAUL
-PR
YOUR TELNO 3941: HMOCS MATTERS
1.
Pa
Anmere
HKB 233/1
MANY THANKS FOR THESE FURTHER THOUGHTS. YOUR POINTS ABOUT LEGCO ARE WELL TAKEN AND WILL FIGURE IN OUR PAPER. I HAVE TOLD THE TREASURY VERY FIRMLY THAT WE CANNOT CONTEMPLATE SOUNDING OUT THE CHINESE UNTIL MINISTERS HAVE ADDRESSED THE ISSUES. I IMAGINE THAT WHATEVER THE CHINESE REACTION YOUR PROBLEMS WITH LEGCO WOULD ONLY BECOME COMPOUNDED. NOW THAT WE HAVE GENERATED SOME MOMENTUM TOWARDS A RESOLUTION OF THIS PROBLEM THROUGH THE TREASURY/ODA VISIT TO HONG KONG, I THINK THAT WE SHOULD TRY TO PRESS THE DISCUSSION TO A CONCLUSION IF WE CAN. I WOULD BE RELUCTANT TO ABANDON EFFORTS TO REACH AGREEMENT ON A PACKAGE. BUT I AGREE THAT THE PAPER WE PREPARE SHOULD ALSO INCLUDE THE OPTION OF GOING AHEAD WITH COMPENSATION ARRANGEMENTS ONLY. THAT APPROACH WILL HOWEVER FACE CRITICISM FROM THE ODA AND THE TREASURY ON THE
GROUNDS THAT IT WILL NOT BY ITSELF ACHIEVE THE OBJECTIVE OF STABILISING THE HMOCS PROBLEM.
2.
SO OUR PAPER WILL ALSO NEED TO ADDRESS THE CONSEQUENCES OF MINISTERS REACHING NO DECISIONS ON THE ISSUE. GIVEN THAT, AS YOU SAY, FUNDING FROM HKG WILL BE IMPOSSIBLE TO IMPLEMENT IN PRACTICE, AND THAT IT WILL BE VERY HARD TO BRING TREASURY MINISTERS TO ACCEPT THAT HMG SHOULD BEAR A CONTINGENT LIABILITY FOR HMOCS PENSIONS, THE POSSIBILITY OF NO DECISION IS ONE THAT WE HAVE TO FACE.
3.
SUCH A DECISION COULD TAKE TWO FORMS. THE FIRST WOULD BE A CLEAR CUT CONCLUSION THAT, PAST HINTS TO THE CONTRARY, NO SCHEME WAS POSSIBLE. I WOULD WELCOME ANY THOUGHTS YOU COULD LET US HAVE ON WHAT MEASURES YOU WOULD THEN NEED TO TAKE. MIGHT IT FOR EXAMPLE BECOME NECESSARY TO PAY MORE TO KEEP KEY HMOCS OFFICERS IN THE POLICE FORCE AND THE SENIOR CIVIL SERVICE? WOULD THAT PROPOSAL ALSO RUN INTO LEGCO PROBLEMS? IF SO, HOW WOULD YOU SEEK TO OVERCOME THEM?
4.
ANOTHER POSSIBLE MINISTERIAL CONCLUSION WOULD BE TO PUT OFF A DECISION AT LEAST UNTIL LATER IN THE YEAR AND POSSIBLY UNTIL MUCH NEARER 1997. THE EFFECT OF THAT, APART FROM CONTINUING THE UNCERTAINTY FOR HMOCS OFFICERS, WOULD PRESUMABLY BE TO ENCOURAGE THEM TO PUT MOUNTING PRESSURE ON HMG TO INTRODUCE A SCHEME. WOULD YOU EXPECT THAT UNDER THESE CIRCUMSTANCES AS WELL IT WOULD BE NECESSARY TO TAKE SPECIFIC MEASURES TO ENCOURAGE KEY PERSONNEL TO STAY? IF SO HOW WOULD YOU PLAN TO DEAL WITH LEGCO ON THE ISSUE?
5. PLEASE KEEP US ABREAST OF YOUR THINKING ON REASSURANCES FOR
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