TNAG-2100-FCO40-2989-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 123

A

CONFIDENTIAL

introduce a Compensation/Incentive Scheme for HMOCS officers in

Hong Kong on the lines previously agreed;

b) in order to achieve achieve the best use of public funds and

to offer a positive inducement to HMOCS officers continue to serve in Hong Kong well after 1997, in line with our

responsibilities under the Joint Declaration, those officers

leaving around the change of sovereignty should receive only very limited compensation (say 10% of the full payment), while

full compensation would be payable in nine further annual

instalments to those who stay on for a period of 10 years after

1997.

3.

c) we should aim to announce the scheme as soon as possible, having cleared our lines with the Chinese and consulted the

staff associations in Hong Kong.

Our best estimate of the likely cost of such a scheme over the

ten years from 1997 is [£16 million] at current prices and current exchange rates. In order to eliminate the effect of salary inflation in Hong Kong between now and 1997, compensation could be

based on today's salary levels of the relevant civil service

grades, to be increased only in line with inflation.

4.

ODA agree.

The

I submit a draft minute to the Prime Minister.

Governor of Hong Kong is also content with this approach, which we have discussed with Treasury officials.

BACKGROUND

Historical Background: Obligations to Her Majesty's Overseas Civil Service (HMOCS)

5.

HMG have long acknowledged that they have a special obligation

towards members of HMOCS. The 1954 White Paper, which established

HMOCS, stated that they were entitled to expect that "in the event

WEDABH/2

CONFIDENTIAL