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MDHOAN 106
STERLING SAFEGUARDS PROBLEM, WE CANNOT TELL THE CHINESE THAT HMOCS IS A PURELY UK MATTER. THE FACT IS THAT HMG'S OBLIGATIONS ARE TO ENSURE THAT PROPER HMOCS ARRANGEMENTS ARE MADE, NOT NECESSARILY TO MAKE THEM ITSELF: THE FIRST RESPONSIBILITY FOR MAKING THEM LIES WITH THE GOVERNMENT OF THE TERRITORY CONCERNED. WE HAVE ALWAYS FELT THAT OUR MAIN HOPE OF SECURING CHINESE ACQUIESCENCE IN THESE ARRANGEMENTS WILL BE IF THE UKG RATHER THAN HKG ARE PAYING FOR THEM. SO, EVEN IF WE COULD GET WHITEHALL CLEARANCE TO DO SO, IT SEEMS BETTER NOT TO THROW AWAY THIS CARD TOO SOON OR TOO CHEAPLY. WE WONDER IF IT WOULD BE BETTER TO SAY THAT HKG DO NOT BELIEVE THAT LEGCO WOULD AGREE TO FUND A COMPENSATION/INCENTIVE SCHEME, AND CONTROVERSY ABOUT IT WOULD BE UNDESIRABLE, SO THE UKG WILL PAY, IN THE FIRST INSTANCE AT LEAST. THE CHINESE WOULD NOT EXPECT US TO ACT ALTRUISTICALLY, SO WE NEED TO POINT UP THE PRESSURE WHICH THE HMOCS LOBBY IS PUTTING ON MINISTERS HERE, EG IN PARLIAMENT. 5.
WE THINK THE BRIEFING SHOULD MENTION ALL THE TRADITIONAL OBLIGATIONS, INCLUDING EARLY RETIREMENT WITH FULL PAYMENT OF PENSION. HOLDING ANYTHING BACK NOW COULD COMPLICATE THINGS LATER PUTTING ALL ON THE TABLE COULD GIVE US ROOM FOR MANOEUVRE.
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6. WE ALSO THINK IT WOULD BE HELPFUL TO GIVE THE CHINESE A ROUGH IDEA OF WHAT THE SCHEME IS LIKELY TO MEAN IN CASH TERMS. TOO GENERAL AN ACCOUNT COULD LEAD TO THEIR JUMPING TO FALSE
CONCLUSIONS.
7. MIFT CONTAINS A QUICK REDRAFT OF YOUR SPEAKING NOTE REFLECTING THESE POINTS. WE HAVE NOT YET DISCUSSED IT WITH LEGAL ADVISERS, THE ODA OR TREASURY, BUT WOULD WELCOME YOUR VIEWS AND THOSE OF SIR R MCLAREN AND MR GALSWORTHY BEFORE WE DO
SUBJECT TO SIR R MCLAREN'S VIEWS, WE ARE HAPPY TO TAKE YOUR ADVICE THAT, DESPITE THE DIFFERENCES OF INTEREST AND PERCEPTION BETWEEN HKG AND THE UKG, THE BRIEFING SHOULD BE GIVEN BY UKREP JLG RATHER THAN IN PEKING.
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WE SHOULD ALSO BE GRATEFUL FOR VIEWS ON THE LIKELY CHINESE REACTION TO THIS BRIEFING. WE ASSUME THEY WILL EXPRESS CONCERN, URGE US TO TAKE NO ACTION UNTIL THEY HAVE REFLECTED, HAVE GIVEN THEIR VIEWS AND WE HAVE COMPLETED CONSULTATIONS ON THIS IMPORTANT MATTER AFFECTING THE TRANSITION. THEY MAY SAY THAT WE MUST PUT A FULL PACKAGE OF PROPOSALS TO THEM BEFORE THESE CONSULTATIONS CAN BE USEFULLY UNDERTAKEN. AND THEY MAY SEIZE THE OPPORTUNITY TO RE-OPEN OTHER HONG KONG CIVIL SERVICE QUESTIONS, PARTICULARLY
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