10 MAY 193 10:22
H M TREASURY HEF DIV
aefl.to/Woodfield/1.10.5
CONFIDENTIAL
P.3
Compensation
I
lead to a substantial fall in their sterling value that the new Chinese Government refuses to pensions.
ΟΙ
pay
Delete "and in full" at the end of the third sentence.
paragraph 23: add at the end of the second sentence:
...or if the Chinese Government reneged on its commitment to pay pensions.
H
attach a copy of the advice received from Treasury Solicitor on the vulnerability of HMG to legal challenge to the Treasury proposal on compensation. This does not, we believe, alter the position as set out in paragraph 10 (and paragraph 24) of your draft.
However, the draft does not fully reflect the Treasury case for a more limited compensation scheme, and we suggest revising paragraph 8 as follows:
Other points
"They base their case оп three arguments: (i) the Joint Agreement with China enables staff to stay in their jobs after 1997 on the same terms and conditions; since their careers are not lost altogether there is less to compensate for; (ii) unlike other DTS, staff in HK have always been aware of the date оп which UK rule will come to an end; (iii) payments are as much an inducement to keep staff on as they are to compensate them, and the level of inducement necessary needs to take account of the? higher salaries and pensions benefits they enjoy.
We also suggest the following more detailed amendments:
paragraph la our information is that the 700 or so HMOCS staff in HK are split about 50-50 between administrators and police officers, and that existing pensioners number around 1600;
paragraph 3 as a reference is made to White Paper commitments it might be helpful to attach an annex showing what these commitments are;
Paragraph 4: amend the penultimate more clearly:
sentence to read
"Within that, the relative pay advantage enjoyed by administrators compared to their UK counterparts is substantially higher than that of police officers."
In the light of the attached advice from the Treasury Solicitor, to replace the last sentence with the
following: