CONFIDENTIAL

useful to indicate would be willing to have a meeting if

Qian thought this would be useful.

Fully endorse Governor's line on a referendum.

Right to continue normal relationship with China as far as possible (eg Lord Howe's mission, trade missions etc). But we

must be alert to Chinese efforts to use this as a lever over

us on Hong Kong.

HMOCS

Agree with the Governor that we should make revised

proposals to the HMOCS Association as soon as possible. Have

been discussing with the Chief Secretary the expenditure implications.

M

Need to be guided by a number of political principles:

many precedents from other dependent territories for arrangements for HMOCS officers. Arrangements for Hong Kong

HMOCS should be based on these and justifiable as meeting

honourably our obligations. That will also be our best

defence against judicial review.

The package will therefore need to comprise a compensation

scheme on traditional lines and an HMG-funded sterling

safeguard set at a level which HMOCS officers can be brought

to accept (Treasury attempts to set this at a level to reflect

equivalent UK civil service salaries/pensions will only lead to rejection of the scheme by the HMOCS officers and

consequent trouble for the Governor in Hong Kong).

Traditional packages for HMOCS officers also included right to retire on transfer of sovereignty. If Governor can offer

ptm.OPD18Nov.PETER

JEB

CONFIDENTIAL

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