Option F:
Treasury officials admit privately that it would not be defensible for HMG to safeguard only 50% or (for those on the old pensions scheme) 75% of pension. In all 42 previous cases the full pension was safeguarded. The idea might have been tenable if it had proved possible to construct a
private-sector scheme to safeguard the remaining, commutable, element of pension, but it has not (see below).
Option G:
The last vestige of an idea which the Hong Kong Government, Treasury and we have fully explored over the past year. We need to provide HMOCS officers with a life-time safeguard, but the private sector is not prepared to take long-term positions in the Hong Kong dollar. A scheme covering only the first five years after the change of sovereignty would not meet our objectives or be politically defensible; moreover even a limited scheme of this kind would require Government subsidy, which would be seen to signal lack of confidence in the Joint Declaration and/or to be lining the pockets of the private sector. In essence we would be taking out commercial insurance against political risk: but it is of the essence of responsible government itself to cover such risk, particularly when the risk is of breach of a bilateral Treaty.
B. COMPENSATION
Option A (original proposal)
- This was the proposal broadly agreed between Ministers in 1988, subsequently refined in official discussions, and on which we consulted the HMOCS Association in May.
The consultations showed that the proposal is completely inadequate, falling too far short of traditional practice and the reasonable expectations of HMOCS officers. The Hong Kong Government, on whose advice we had relied, were taken by surprise by the depth of hostility to the proposal.
Developments since 1988, particularly since Tiananmen in June 1989, have shaken HMOCS officers' confidence in their ability to serve on in Hong Kong after 1997. Our proposal would have meant that officers who felt they had to leave in 1997 would receive only 20% of half the compensation paid in other Dependent Territories: this is not defensible.
options.comm.1.KMOCS
MVS
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