CONFIDENTIAL
The Treasury team had only heard by chance that one possibility was being seriously studied, to the point where HKG had appointed an independent consultant. The proposal as I understood it was that Hong Kong civil servants should be able to assign to a bank or finance house their future pensions entitlements earned up to that point, and take a loan against that security which they could then invest in any currency of their choice. HKG doubt that this scheme will in fact prove at all attractive to HKG civil servants (not least since finance houses would make a charge for managing any such scheme). The attraction from the Treasury team's point of view is that this would be a scheme that was nominally offered to all HKG civil servants hence avoiding any suggestion of discriminatory treatment for HMOCS officers. Dave Fish told me privately that he thought there might be some mileage in this, particularly if HMG were to make clear to the finance houses concerned that they would underwrite the sovereign risk that pensions might not be paid
after 1997.
5.
Any cost
to HKG?
for all HK unl servants or just some? ~) same
The Treasury team were keen to know who HKG had appointed as their consultant. Wiggham refused to tell them (it is Richard Margolis). I encouraged Wiggham to find a way of sharing with the Treasury team at least the terms of reference of Margolis' consultancy and if possible to give them access to him (if he completes his study, and the Treasury team then claim that it does not cover all the angles, this will be a recipe for further delay).
6.
I agreed with Sandra Brown that we should have a wash-up meeting once they are back next week. We shall then need to get on with preparing a minute from the Secretary of State to colleagues.
Problems
PF Ricketts
UK1AAQ
CONFIDENTIAL