SECRET
072472
MDLOA! 278
NO QUESTION OF HMG'S OFFERING TO INTERVENE TO RELIEVE THE
HKG/SARG OF ITS OBLIGATION TO PAY HMOCS PENSIONS.
4. BOTH IN THIS CONTEXT AND MORE GENERALLY, MINISTERS ASKED
ABOUT THE IMPACT OF THE PROPOSED HMOCS ARRANGEMENTS ON THE MORALE OF LOCAL CIVIL SERVANTS. MINISTERS NOTED THAT THESE LOCAL OFFICERS TOO WERE WORRIED ABOUT THE SECURITY OF THEIR PENSIONS, AND THEY WERE ATTRACTED BY THE SUGGESTION THAT IT MIGHT BE POSSIBLE TO ENVISAGE INITIATING A PARTIAL FUNDING OF HONG KONG PUBLIC SERVICE PENSIONS AND THAT THE CHINESE MIGHT WELCOME THIS TOO. THEY NOTED THAT YOU AND YOUR ADVISERS HAD SO FAR SEEN DIFFICULTIES WITH THIS OPTION, BUT WOULD BE GRATEFUL IF YOU COULD GIVE FURTHER THOUGHT TO IT (EG ON THE LINES SET OUT IN OUR TELNO 737) AND LET US KNOW HOW YOU SEE THE POSSIBILITIES. THEY WOULD ALSO WELCOME THE VIEWS OF SIR R MCLAREN AND MR GALSWORTHY ON THE LIKELY CHINESE ATTITUDE TO SOME SUCH PARTIAL FUNDING PROPOSAL.
5. MINISTERS ALSO WONDERED WHETHER LOCAL OFFICERS MIGHT BE LESS RESENTFUL OF THE HMOCS ARRANGEMENTS IF THE HKG WERE (FOR BROADER REASONS) SOON TO ANNOUNCE A FURTHER DEVELOPMENT OF ITS LOCALISATION POLICY. CLEARLY THIS WOULD REQUIRE PRIOR CONSULTATION WITH THE CHINESE, BUT WE SHOULD BE GRATEFUL TO KNOW IF YOU HAVE CONSIDERED THIS POSSIBILITY.
HURD
YYYY
MAIN
41
.HER MAJESTY'S OVERSEAS
.CIVIL SERVICE RESTRICTED
HKD
LEGAL ADVISERS//MISS BROOKS FED
NEWS D
RAD//MR WYE
RMD
NNNN
DISTRIBUTION
41
OVERSEA PENSIONS/ODA//MR FISH
PS
PS/MR GOODLAD
PS/MR PATTEN
PS/PUS
SIR J COLES
MR HUM
MR KERBY