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value of the Hong Kong dollar is not fixed, and there is no sterling safeguard or other special provision for HMOCS members: indeed a separate provision indicates that "privileged treatment for foreign nationals" will not be maintained. Moreover there is no general confidence in the civil service that these clauses of the Joint Declaration will be honoured (or that HMG could or would enforce them).
ELEMENTS OF A PACKAGE
(A) COMPENSATION
8. In 1988 Ministers accepted the need for a compensation scheme funded by HMG. Detailed proposals could not be taken forward immediately, but officials have now refined earlier proposals, in consultation with the Hong Kong Government. Details of the proposed low-cost scheme and extra background
are at Annex C.
9.
This scheme is more modest than a traditional compensation scheme and is likely to fall short of HMOCS members' expectations, but it addresses the White Paper obligation to provide compensation. The cost of the scheme is difficult to predict. The most likely figure is between £20-30 million, with a maximum of £44 million. The scheme at Annex C has been designed to form part of a package, with a sterling safeguard (see next section) (and adjustment to UK pension supplement (SPOS) regulations (final section)). But if no such package can be agreed, one option would be to introduce a compensation scheme only. Views differ on the impact this would have. It might buy some time with HMOCS officers. Alternatively, however, HMOCS officers might see it as so inadequate that it would only fuel pressures for a full safeguard scheme as well. There is also a risk of salami tactics by HMOCS officers - first pressure for a full traditional compensation package, then pressure for sterling safeguards.
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