CONFIDENTIAL
POLICY
55
112011
MDHOAN 0298
CONFIDENTIAL
FM FCO
TO IMMEDIATE HONG KONG
TELNO 302
OF 25120OZ FEBRUARY 92
HKA 233/1
TOP COPY
Q DIST?
la
INFO PRIORITY PEKING, UKREP JLG HONG KONG
B
2612
PERSONAL FOR GOVERNOR FROM RICKETTS, HKD PEKING PERSONAL FOR AMBASSADOR
UKREP JLG PERSONAL FOR MR GALSWORTHY
HMOCS
•
1 AS YOU KNOW, THE SECRETARY OF STATE ACCEPTED YOUR ADVICE THAT WE SHOULD PRESS AHEAD TO ANNOUNCE DECISIONS NOW ON THE COMPENSATION SCHEME AND ADJUSTMENTS TO SPOS WHILE CONTINUING TO MAKE AS RAPID PROGRESS AS WE COULD ON STERLING SAFEGUARDS. THE SECRETARY OF STATE MINUTED ACCORDINGLY TO THE CHIEF SECRETARY ENCLOSING A DRAFT STATEMENT ON THIS ISSUE FOR LORD CAITHNESS TO BE ABLE TO USE WITH HMOCS OFFICERS WHEN IN HONG KONG.
2.
54
50
THE CHIEF SECRETARY HAS NOW REPLIED SAYING THAT HE IS PREPARED IN PRINCIPLE TO AGREE TO A COMPENSATION/INCENTIVE SCHEME AND TO AMENDMENTS TO SPOS, PROVIDED THAT IT IS AGREED THAT THIS WOULD REPRESENT ALL THAT HMG WOULD DO, AT A COST TO THE UK TAXPAYER, TO ADDRESS THE STERLING SAFEGUARD ISSUE. IF WE WERE PREPARED TO ACCEPT THIS, HE WOULD BE CONTENT FOR LORD CAITHNESS TO MAKE AN ANNOUNCEMNET WHEN IN HONG KONG. BUT OFFICIALS SHOULD DISCUSS FURTHER THE DETAILS OF THE COMPENSATION PROPOSAL, TO ENSURE THAT IT IS WELL-FOCUSED AND NOT UNDULY GENEROUS OR COSTLY, AND OF SPOS ADJUSTMENT.
IT IS
3. THERE WAS ALWAYS A DANGER THAT SEEKING TO PRESS AHEAD WITH THE COMPENSATION SCHEME WHILE LEAVING STERLING SAFEGUARDS UNRESLOVED, WOULD LEAD THE TREASURY TO THIS SORT OF PLOY. OF COURSE UNACCEPTABLE AND WE ARE RECOMMENDING THAT THE SECRETARY OF STATE SHOULD RETURN VERY QUICKLY TO THE CHARGE. WE HAVE SUGGESTED THAT APART FROM RESTATING FIRMLY OUR OBLIGATION TO PROVIDE A STERLING SAFEGUARD, WE HAVE SUGGESTED THAT AS
A ''COMPROMISE HE MIGHT PROPOSE THAT LORD CAITHNESS ANNOUNCES ONLY COMPENSATION, LEAVING SPOS TO BE SETTLED AT THE SAME TIME AS STERLING SAFEGUARDS. WE ARE FAXING TO YOU A POSSIBLE DRAFT ANNOUNCEMENT, REFERRING TO OPENING CONSULTATIONS ON OUR
1
PAGE CONFIDENTIAL