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MDHIAN 740!

5. IT WOULD BE POSSIBLE FOR HMG TO INTRODUCE SOME FORM OF SPECIAL SUPPLEMENTATION ARRANGEMENTS FOR POTENTIAL HMOCS OFFICERS AS A QUID-PRO-QUO FOR WITHDRAWAL OF THEIR ELIGIBILITY TO JOIN HMOCS (PARA 6 OF TUR). THE QUESTION OF HOW MUCH COMPENSATION SHOULD BE OFFERED WOULD HAVE TO BE A MATTER FOR HMG TO DECIDE. IT IS VERY DIFFICULT TO PREDICT HOW PEOPLE WOULD REACT IN SUCH CIRCUMSTANCES. OUR INITIAL ASSESSMENT IS THAT NOTHING LESS THAN AN EXTRA 10 PER CENT OF BASIC SALARY WOULD BE ATTRACTIVE ENOUGH

TO DO THE TRICK.

6.

HOWEVER, AS WE HAVE SAID BEFORE (MY TELNOS 672 AND 685), WE CONSIDER THIS APPROACH TO BE WRONG. IT WOULD OPEN AN INEVITABLE CAN OF WORMS IN THE CIVIL SERVICE HERE AND HAS VERY LITTLE, IF ANYTHING, TO DO WITH THE HMOCS OBLIGATIONS. IN ADDITION, WHILE WE CAN PRESENT PHASED HMOCS COMPENSATION ARRANGEMENTS TO THE CHINESE AS AMOUNTING TO GIVING OFFICERS DELAYED ACCESS TO THEIR HMOCS COMPENSATION ENTITLEMENT, FOR HMG TO PAY SUPPLEMENTS TO CONTRACT OFFICERS EMPLOYED BY THE HONG KONG SARG WOULD BE SOMETHING QUITE DIFFERENT. THIS WOULD AMOUNT TO THE INTRODUCTION OF A NEW TERM OF SERVICE EXCLUSIVELY FOR EXPATRIATE OFFICERS. CHINESE OBJECTIONS

WOULD BE LIKELY AND WOULD BE EASY FOR THEM TO JUSTIFY (SEE E.G. JD78, QUITE APART FROM GENERAL POLITICAL ARGUMENTS). FINALLY, YOU WOULD BE RUNNING THE RISK OF COMPENSATING A SUBSTANTIAL NUMBER OF POTENTIAL HMOCS OFFICERS WHO MIGHT NEVER HAVE OPTED FOR PENSIONABLE TERMS AND WOULD FOR THEIR OWN REASONS HAVE PREFERRED TO REMAIN ON CONTRACT.

7. THE WIDER QUESTION OF RETAINING KEY OFFICERS (PARA 7 OF TUR) IS A DIFFICULT ONE. AS WE HAVE SAID BEFORE (MY TELNO 94), WE HAVE NO POLICY OF PROVIDING INDUCEMENTS TO SPECIFIC INDIVIDUALS IN THE HONG KONG CIVIL SERVICE. IT WOULD NOT BE AT ALL EASY, EITHER POLITICALLY OR IN STAFF RELATIONS TERMS, TO INTRODUCE ONE AT THIS STAGE. IF WE DID, IT WOULD BE VERY DIFFICULT TO PERSUADE ALL CONCERNED, INCLUDING THE CHINESE, THAT IT WAS BEING IMPLEMENTED OBJECTIVELY.

8.

WE HAVE, ON THE OTHER HAND, ACCEPTED THE NEED TO MAKE THE NECESSARY ARRANGEMENTS FOR OFFICERS ADVERSELY AFFECTED BY THE APPROACH OF 1997. BOTH THE LIMITED COMPENSATION SCHEME AND THE SPECIAL BRANCH SCHEME FALL INTO THIS CATEGORY. (WE EXPECT THESE TO COVER AROUND 170 HMOCS OFFICERS, WHO WILL THEREFORE NOT BE ELIGIBLE FOR THE GCS.) WE HAVE ALSO, WHEN NECESSARY, IMPROVED CONDITIONS OF SERVICE IN GRADES WHERE RECRUITMENT OR RETENTION OR

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