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even to raise the idea with them would be dangerous to our
wider interests. (In the worst situation it could lead to
the Chinese seeking to re-open the provisions of the Joint
Declaration in which they guarantee continuity of public
service, salaries, pensions etc after 1997.) This advice
from David Wilson, Robin McLaren and Tony Galsworthy draws on years of negotiating with the Chinese and on close personal involvement in the discussions in which the Chinese
have raised Hong Kong civil service pensions. I back their
judgement.
6. However, as indicated in my minute of 26 February I am
content that we should take no final decision about HMG
funding of the sterling safeguards until the private sector
approach you mention (Option (d) in the paper) has been fully explored. I am glad that our officials continue to work on this and had a useful meeting with Barings on
6 March.
Compensation
Malcolm
7. As for what Add Caithness could say in Hong Kong last week, we were grateful for the revised draft statement enclosed with your letter. However we saw difficulties in
Hong Kong terms with the revised formulation of paragraph 5 on, pensions questions (sterling safeguards and SPOS). Malcolm
Lord Caithness therefore concluded that the option at the
end of paragraph 6 of your letter was the best one, ie that he should say nothing about pensions at this stage and
confine his announcement to a low-key statement of our
intention to open consultations on the
compensation/incentive scheme (ie the last two sentences of
para 4 of the draft enclosed with your minute): in the first
instance he has given this statement in confidence to Sir
David Ford in order to allow us time to brief the Chinese
before the decision becomes public. We shall
arrange this briefing as quickly as possible and are happy to agree to your officials' request that we clear with them
JIFABG/3
happy gled
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