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the change of sovereignty should receive only very limited compensation: full compensation would be payable only to those who stay on for a period of, say, 10 years after 1997, rather than leave in that year. Those who

left within the 10 year period would receive an appropriate portion of the maximum sum, which would vary according to individual circumstances. A very rough average might be in the area of £40,000 per officer, on the basis of the provisions of the Hong Kong Government's own compensation schemes (para 7 below). An "incentive"

scheme on these lines would fall short of what HMOCS

officers in Hong Kong would hope to receive, but it would be defensible and would be consistent with the intentions

of the 1960 White Paper.

5. The cost of such a scheme would depend on how many HMOCS officers decided to stay on after 1997. We

estimate that the total sum would be between £10 and £20

million, spread over 10 years from 1997 (ie an average of £1-2 million a year over the period). It would be significantly less than a scheme offering full

compensation in 1997.

HOW THE SCHEME SHOULD BE FINANCED

6. I have considered very carefully whether it would be right or feasible, as matters have developed since 1985,

to ask the Hong Kong Government to bear the costs of a

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