CONFIDENTIAL
SECRETARY OF STATE'S MEETING WITH CHANCELLOR: JUNE 1992: HONG KONG: HM OVERSEAS CIVIL SERVICE
POINTS TO MAKE
-Your officials have fought valiantly to prevent any new commitment of UK funds, but we now need political decisions.
- Three aspects, all likely to inspire interest in the House:
-moral obligation: White Papers and practice in all other Dependent Territories establish a strong case: we cannot renege on such commitments.
-huge UK interests in Hong Kong: commercial, financial, and political. We need these officers to stay, at least until 1997, if we are to administer the territory successfully. Unless we soon announce proper compensation and pension safeguards, we shall lose them.
-reasonable expectations of HMOCS officers: they have expected we would treat them as in other DTS: thus risk of judicial review if we fail to do so.
Ideally Hong Kong would pay. But we have explored this fully since 1984, and it cannot be done: the local legislature would not approve funds for special treatment for these expatriates; and to force Hong Kong to pay would cause a crisis with China -the Chinese might well threaten to repudiate their Joint Declaration commitment to the continuing payment of pensions after 1997.
So either HMG must take responsibility or we renege on our duty to ensure that proper arrangements are made.
Sterling safeguard of pensions will cost us nothing unless the Hong Kong dollar falls against sterling. In all 42 other cases since HMOCS was established in 1954, when British rule has ended, HMOCS officers have had guarantees for the continued sterling value of their pensions. How could we justify leaving Hong Kong HMOCS officers uniquely unprotected against exchange rate fluctuations ?
CONFIDENTIAL
POINTS
To
MAKE