CONFIDENTIAL
FM FCO
TO DESKBY 28010OZ HONG KONG
TELNO 1664
OF 271051Z NOVEMBER 92
CONFIDENTIAL
HKA 233/1
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635
111777
MDHOAN 4890
COPY EWIST?/Du
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PERSONAL FOR GOVERNOR FROM RICKETTS, HKD
626
YOUR TELNO 2752HMOCS: LINE TO TAKE WITH HMOCS ASSOCIATION
1. We have agreed with the Treasury that you can inform Cartland that quote HMG hopes that further consultations can be held in the near future on a package of proposals which will include provision for a sterling pension safeguard unquote. We hope that this statement, with its explicit confirmation that a sterling safeguard will be part of the revised proposals, and combined with any assurance you may be able to give on early retirement, will be sufficient to ensure the re-election of a moderate committee.
2.
The Treasury are still considering our proposal on compensation and are not prepared at this stage to agree in principle to a revised scheme. However, if you are asked on this point, we and the Treasury agree that you can say quote consideration is also being given to a compensation scheme as part of the overall package unquote. We hope that officers will interpret this positively since there is no mention of an incentive scheme.
3.
The Chief Secretary has not yet replied to the Secretary of State's minute of 18 November. Vibes at official level indicate that Treasury officials are continuing to make heavy weather of compensation in the light of the possibility of an early retirement scheme. And we think it is most unlikely that the Chief Secretary will accept a sterling safeguard rate set at 16:1. We think that at best he may come down to 22:1 reflecting average pay differentials between Hong Kong and UK civil servants. We would be grateful for your further thoughts on whether a revised package containing a safeguard at this level, (although we might want to start above this eg 24:1, and be prepared to move back to 22:1 in negotiation) combined with a revised compensation proposal (hopefully Option C) would provide an adequate basis on which to hold a further round of
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