reassuring: all officers may continue in service with terms
and conditions "no less favourable than before". But the
point is that there is sceptisism that the Joint Declaration
will infact achieve its aims.
28.
HMG cannot do anything which might show that we do not
have faith in the Joint Declaration. The Chinese on their
part are not going to see any need to go further than is set
out in the Joint Declaration to protect the position of
HMOCS members. Nevertheless, the only way on which a
sterling safeguard could be contemplated is in the context of what has happened in previous colonies. HMG's options are thus; (i) to restate our faith in the Joint Declaration,
(ii) to seek to persuade the HKG/Chinese that a sterling safeguard should be introduced for HMOCS members, (iii) or
to acknowledge that in Hong Kong's special circumstances
sterling safeguards are indeed a matter for HMG and that we are keeping the position under continuous review. As stated above, (ii) could be explored but is likely to fail, (i) is
in effect the current situation, (iii) is thus the only
viable option, if we wish to take action.
29.
My view is that there is no justification for introducing a sterling safeguard now. Nevertheless our hand
may be forced by the introduction of the compensation scheme. It is some form of assurance that is being sought.
This could be met in a number of ways which need not
trigger any expenditure by HMG unless the HK dollar dropped
significantly. For example:
(i) HMG could state that it accepts that a sterling safeguard is a matter for HMG but that we see no need
to introduce one at this stage and will keep the matter
under review.
-
(ii) HMG could introduce a sterling safeguard at about
16:1 the rate the HK dollar was pegged at from
This could (almost) be justified by the
1947-1967.
ROZAUD/11
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