Confidential
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2389
LADY CHALKER'S VISIT TO HONG KONG: 2
4 OCTOBER 1993
нка 233/1
BACKGROUND BRIEF
HER MAJESTY'S OVERSEAS CIVIL SERVICE (HMOCS)
16 SEP 1993
HMG'S OBLIGATIONS AND PAST PRACTICE
1.
Two White Papers of 1954 and 1960 set out HMG's obligations towards HMOCS officers. Subsequent practice in some 42 territories established a clear pattern of arrangements for them when British rule ended. These included payment of compensation (for loss of the Secretary of State's protection, and of career prospects), provision of a sterling pension safeguard, and the right to retire with full payment of pension.
There are roughly 700 HMOCS officers in Hong Kong, occupying key positions in the police and administration.
2.
THE PACKAGE OF PROPOSALS
Compensation
3.
The HMOCS Association rejected our first proposal in May 1992. We have now agreed with the Treasury at the working level a compensation scheme which would cost some £38 millions over five years starting in mid 1996. The scheme will include a cap of £120,000 at 1992 prices on the size of compensation for each individual.
Sterling Pension Safeguard
4.
The FCO and the Treasury have agreed in principle that the package should contain provision for a sterling pension safeguard. The HMOCS Association are likely to argue that pensions should be protected at the present exchange rate of HK$12: £1. The FCO have proposed a rate of HK$16:£1, which takes into account the high average salaries enjoyed by Hong Kong HMOCS officers. The potential total liability for this scheme is big (£250 million over about 50 years), but it is wholly contingent.
5. The Treasury have proposed a trigger level of HK$26:£1 to take account of the difference in salary and pension levels between Hong Kong and UK public servants. The maximum contingent liability would be £100 million.
bgrnd.chalkvis.ADMIN
JEB
Confidential