CONFIDENTIAL
Decision to delay until nearer 1997
17.
There are precedents for this in other Dependent Territories, where safeguard schemes were introduced only just before independence. But the difference in Hong Kong is that we want to persuade HMOCS officers to stay up to and beyond 1997, and therefore to give them the assurance well beforehand that their pensions are safe. HMOCS officers have to decide by June whether to transfer to a new pension scheme (involving the possibility of later retirement and other changes): they need to know by then what arrangements HMG will be making. By delaying a decision, we would encourage the HMOCS Associations to step up their pressure on HMG to reach a firm decision in their favour, and would ensure that the uncertainties, and the risk of large numbers of HMOCS deciding to leave, would remain. This is therefore an unattractive option from HMG
and Hong Kong's point of view.
CONCLUSIONS
17.
On
This is a complex problem, with many different factors affecting the final decision. But the key issues are (i) are Ministers prepared to abandon the protection given to HMOCS officers in successive White Papers and by Ministerial undertakings? (ii) how serious is the risk of a deterioration of the quality of administration in Hong Kong if this problem is allowed to drag on without a solution? and (iii) what would be the political damage of trying to force Hong Kong to pay for a scheme against their will? the first point, there is a possibility of judicial review, as well as political damage. On the second, it will never be possible to produce a precise estimate of the extent or timing of a crack in HMOCS morale in Hong Kong. But if it occurred on a substantial scale, the effect on our ability to discharge our obligation to administer Hong Kong up to 1 July 1997 would be very serious. The implications for maintenance of law and order are particularly worrying,
NFJABA/9
CONFIDENTIAL