CONFIDENTIAL
Option B (your para 5)
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ie they
/ 4. I enclose details of exchange rates since 1972. Most of
these have been calculated on a daily average basis should be very accurate.
Option D (your para 6)
5.
If you are able to work out the costs for scenarios (a), (b), (c) and (d) for one or two of the key options, we agree that it would be useful.
Early retirement (your para 7)
6. We understand that calculations here will take a little more time. One factor to consider (on which Richard Plumb may be able to advise) is to what extent it would be normal in any such scheme to enhance pension entitlement, ie to allow extra years of (notional) service.
Presentation of costs
7.
I doubt that it is necessary to undertake calculations for the possibility of a gradual depreciation of the Hong Kong dollar. The real concern here is that things go so badly wrong after 1997 that the Hong Kong dollar plummets against the US dollar and thus sterling, in one or several abrupt falls. As you suggest we shall already have a large number of graphs and figures. I doubt that Ministers will want to examine yet another set. We need a worst case scenario and some interim scenarios; I think the options we have set out already probably cover these.
Yours sincerely,
Nigel.
N J COX
Hong Kong Department
cc Mrs S Brown, HMT
Mr K Woodfield, HMT Mr D Rayson, HMT Mr D Fish, ODA
hmocs.opts.ADM
SLM
CONFIDENTIAL