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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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