From the Private Secretary
10 DOWNING STREET
LONDON SWIA 2AA
SIR ROBIN BUTLER
HONG KONG: ARRANGEMENTS FOR MEMBERS OF HER MAJESTY'S OVERSEAS CIVIL SERVICE
I attach a letter on the above subject sent to me on 15 April by the Foreign Secretary's Private Office.
The Prime Minister had an informal discussion with the Governor of Hong Kong and the Foreign Secretary today about Hong Kong pensions. The Prime Minister explained that he had not had an opportunity to delve into the fine print of this longstanding and tortuous matter; and could not fairly make a ruling at a meeting at which the Treasury's point of view was not represented. The Governor said that he fully understood this, but wanted simply to make the case for an early decision. He himself was surprised that the subject had reached Cabinet level. The sums of money over which the FCO and Treasury had so far failed to agree were not that great.
Speaking to the case in the Foreign Office letter, the Governor said that there was no possibility whatever of the Government of Hong Kong funding the benefits. This was because the expenditure would have to be approved by the Legislative Council: and the Legislative Council would never vote for money for expatriate civil servants and policemen. He argued that HMG had a clear obligation in honour to safeguard the pension arrangements of the HMOCS officers: this was not in dispute. He saw a serious risk that the officers would decide, following the meeting of their association on 24 April, to seek judicial review. This was why we should no longer put off the process of reaching a decision.