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the
20. Liabilities under
safeguarding scheme would be contingent. The maximum exposure under the Treasury approach is estimated at some £100m; under the FCO approach it would be £250m (both discounted to 1992 net present values). The liabilities would last for as long as any pensions remained to be paid, which
ouid ce 50
decline costs would progressively. They are projected to peak around 2007/08, with a maximum cost in that year of £20-25m (in undiscounted 1992 prices) if the FCO package were adopted.
years
or more.
The
21. Treasury Counsel's opinion is that, SO long as some safeguard scheme is put in place which can be defended as fair, the courts would allow the Government wide scope to decide its terms. In particular and by contrast with the compensation element
the courts are unlikely to consider it unreasonable for the Government to have regard to Hong Kong: UK relativities. The safeguarding scheme cannot in any case be based wholly on precedent, since unlike in previous cases it is being put into place well in advance of transfer of sovereignty.
Timing
22. The issues have been under discussion since 1984. The HMOCS Association were promised consultations last Autumn, which have yet to take place. They had expected that the matter would be resolved during the Governor's visit in April. They are pressing for a solution, and can be expected to increase their lobbying of MPs and others. The Association's Committee is expected to -eet towards the end of May, and the Association chairman is threatening to resign if early progress is not made.
Conclusions
23. The Governor has stated that the FCO's package represents the minimum he could accept or defend. Anything less could undermine the commitment of the staff concerned, distract from more important issues, and at the margin make it more difficult
· to maintain stability.
24.
The HMOCS Association might gain some support in Parliament in arguing that the FCO package is the minimum consistent with fair treatment on the basis of precedent. Whether it would win general sympathy either in Hong Kong or in the UK given the favourable position of HMOCS staff is more questionable.
25.
The Treasury argue that it is unnecessary, to achieve the Governor's objectives and secure a publicly defensible position,
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