CONFIDENTIAL
on sterling safeguards, which would then have to be
left to be re-fought nearer to 1997; and that HMOCS
officers would therefore have to decide their futures
without any guarantee about the ultimate value of their pensions. The absence of this is bound to
weaken the incentive effect of our scheme as well as
being highly unpopular with the officers, who are expecting a full package;
(iii) we could continue our discussions with the Treasury at
official level, with the aim of clearing the ground and allowing a Ministerial discussion of the full
package in a few months. The disadvantages here are
that the uncertainties and frustrations will continue
for HMOCS officers; a political row could develop as
the Governor warned; and there is no guarantee that in the end the Treasury will accept our proposals for a
sterling safeguard.
14.
In the circumstances, I think that we should switch our tactics and go for option (ii). If we can secure Treasury agreement to that in advance of Lord Caithness'
visit to Hong Kong, it would give him a significant piece of
good news to announce. We would not be able to announce the
details of a proposal, since we are committed to consult the
officers concerned. But Lord Caithness might make clear
that we had reached decisions, and would be sending a team
to Hong Kong in March to hold such consultations.
15. This submission reflects discussion with ODA, although they have not in the time available seen its precise terms.
Podletts
PF Ricketts
Hong Kong Department
BODAFX/8