TNAG-2100-FCO40-2989-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 37

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The Executive Council has taken the view that these matters

are for HMG.

17. HKG will be concerned to ensure that any measures HMG

might take would not have a negative impact on their ability

to manage the civil service generally. Thus far HKG has

taken a very relaxed view of the possibility that HMG might introduce sterling safeguards. They have given no

indication that this could cause them difficulties, in that

local civil servants might demand the same. Nevertheless

this must be a worry, both for HKG and ultimately for HMG

should such demands destabilise the civil service. There is

the remote possibility that the introduction of a sterling

safeguard by HMG could undermine confidence in Hong Kong

generally.

The Chinese Authorities

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18. We did not attempt to include in the Joint Declaration

a sterling safeguard for HMOCS members. It is therefore likely that the Chinese would strongly resist any attempts

now to negotiate such a safeguard with them to be funded

by the HKG/SARG.

19.

The Chinese reaction to HMG putting in place a sterling safeguard for HMOCS pensions is hard to predict. They could denounce it as undermining the Joint Declaration by casting doubt on the stability of the HK dollar or by provoking

devisiveness within the civil service. But given that this

is a measure that have been introduced in most colonies,

their grounds for complaint would not be strong.

Parliament

20.

We can expect the overseas pensioners to lobby to

generate considerable support for the introduction of

ROZAUD/8