SECRET FM FCO
TO IMMEDIATE HONG KONG
TELNO 2248
OF 23144OZ NOVEMBER 90
SECRET
97
125527 MDHOAN 2214
ва
нив 431
NOV 1990
16
TOS COT
PERSONAL FOR GOVERNOR FROM PAUL, HKD
HMOCS MATTERS: COMPENSATION AND STERLING SAFEGUARDS
1. KEITH SHIPLEY WILL NO DOUBT HAVE BRIEFED YOU ON THE OUTCOME OF THE TALKS WHICH HE HAD LAST WEEK WITH THE TREASURY, THE ODA AND OURSELVES ABOUT COMPENSATION AND STERLING SAFEGUARDS FOR
HMOCS OFFICERS.
2. IN THE COURSE OF THE MEETING, AT WHICH VARIOUS PROPOSALS AND COUNTER PROPOSALS WERE DISCUSSED, THE TREASURY PUT FORWARD A PROPOSAL ALONG THE FOLLOWING LINES:
(A) AS PART OF AN ARRANGEMENT WHEREBY HMG TOOK OVER RESPONSIBILITY FOR THE PAYMENT OF HMOCS PENSIONS AT AN AGREED STERLING RATE, THE HONG KONG GOVERNMENT WOULD PAY OVER TO HMG THE CAPITALISED VALUE OF ALL SUCH PENSIONS, IE CURRENT AND FUTURE ONES.
(B) THE SUM INVOLVED WOULD NEED FURTHER NEGOTIATION.
(C) THE TREASURY HINTED THAT THEY WOULD BE WILLING TO CONSIDER PAYMENT OF THIS CAPITALISED VALUE BY INSTALLMENTS, PROVIDED PAYMENT WAS COMPLETED BEFORE 1997.
3. I SHOULD STRESS THAT THE PROPOSAL, WHICH I HAVE SOUGHT TO SUMMARISE ABOVE, NO DOUBT AT THE COST OF CONSIDERABLE OVERSIMPLIFICATION, WAS PUT FORWARD ON A NO COMMITMENT BASIS, SINCE TREASURY MINISTERS HAVE NOT BEEN CONSULTED.
4. IT WAS AGREED WITH SHIPLEY THAT HE WOULD REFLECT FURTHER ON THIS PROPOSAL, AND WOULD CONSULT THE CHIEF SECRETARY AND YOURSELF BEFORE REPLYING FORMALLY. THE POSITION IS THEREFORE THAT WE AWAIT YOUR RESPONSE.
5. FROM MY DISCUSSIONS WITH DAVID FORD EARLIER THIS WEEK, I SUSPECT THAT YOU WILL HAVE REAL DIFFICULTIES WITH THIS PROPOSAL. ON THE OTHER HAND, TREASURY AGREEMENT TO ASSUME RESPONSIBILITY
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