SPOS
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9. David Mellor recognised that the current arrangements for Supplementary Pension for Overseas Service (SPOS), as applied to Hong Kong were inequitable. I hope we can agree that officials can implement the necessary changes as soon as they can be technically introduced.
Other Matters
10. I believe that we should continue to resist pressure from HMOCS officers for the right to retire in 1997 on full pension, if this was to be at HMG's expense.
Conclusion
11. The extra work done since we met in July has refined some of our cost estimates but has introduced no new elements of
substance. I am sure that we must now take the necessary political decisions. These need to give us a robust position sustainable in the face of pressure generated by HMOCS officers and to give us a defensible case in the event of judicial review. The compensation proposals will inevitably be more costly than we originally hoped; but the maximum contingent liability in respect of sterling safeguards for pensions will be lower than we originally estimated. Chris Patten has made his own assessment of the position since his arrival in Hong Kong. You will have seen his letter to me.
He feels strongly that we must settle matters soon. I agree. Further delay will destroy any remaining trust among HMOCS officers that we are serious about addressing their concerns. It will begin to undermine our ability to administer Hong Kong effectively. That is not tolerable.
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