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I should perhaps make it clear that I could not, in honour, accept any arrangements which fail to give Hong Kong HMOCS officers the same arrangements and reassurances provided elsewhere. End of Empire carries with it certain obligations which have to be dealt with honourably, even if this means a cost to HMG. Sterling pension safeguards are a matter of vital importance and officers need to know where they stand now.

The HMOCS issue has been outstanding since 1986. It dogged my predecessor for the full five years of his Governorship. It is now late 1992. I have enough difficulties to face over localisation generally, including the need to identify and groom suitable local officers for principal official posts and to discuss Civil Service issues with the Chinese. I do not want to deal with all this against a background of unresolved HMOCS issues and with disgruntled expatriate officers worried about their future.

I should be grateful for an early decision, on the basis of which consultations with the HMOCS Association can proceed. It is very important that this subject is out of the way well before the end of the year.

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Governor

The Rt Hon Douglas Hurd, CBE, MP

Secretary of State for Foreign and

Commonwealth Affairs

Foreign and Commonwealth Office

CONFIDENTIAL

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