TNAG-2101-FCO40-2990-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 64

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XX

Treasury

Ministers

would certainly reject an

approcel

from feo Ministers

while riable

19977.

amount of

The

could take accoual

payment (3)

the

The precise pensions before 199 hould be for contineration

negotiation which cost to HKG of bringing forward it's habilities to pay pensions to HMoes 15. Mr Shipley said it would be impossible for Hong Kong to

do this. HKG's considerations were political, not

financial. HKG would not be able to capitalise pensions for

one section of its staff and not for the others especially

as local officers were the ones currently pressurising HKG

to capitalise their pensions. HKG's Financial Committee would never approve such expenditure. Mr Rayson said that HKG already recognised the importance of retaining its staff

and improving morale, this was HKG's special need.

-

Mr Shipley said that it was HMG not HKG which had special

obligations to members of HMOCS: it was HMG's responsibility

to reassure them about their pensions.

16. Mr Rew said the issue would be a presentational one.

For its part the Treasury would like to see some figures.

He reiterated that there was no commitment to a sterling

"Treasury officials would safeguard. Mr Rayson said that he could not advise Meir Ministers to go along with sterling safeguards and that/he

did not rule out the possibility of the Treasury returning

suggested that it might be helpful to their own proposal at some stage. Mr Rayson said it was

for the FCD and HRG necessary to reflect further on the matter and for,

Value = 15 HKG in settling consideration to be given to the political price to be paid

There were advantages in having this matter solved

M. Shipley and perhaps e could persuade it Financial Committee that

The proposal

at he migmas acceptabic and could be ring fenced as a one-offy this solution was necessary. Mr Shipley said

The issue.

options remained by KG. is be fully exploreinl

Whilst

The Treasury would be

glad to conside alternative

from HKG,

which had

emerged

K

to %% HKG

WHKG's.

that the Chinese would also need to be consulted. It would

be very difficult to persuade them to accept such a large pay off in 1997 and it would look like a clear indication of

a lack of faith after 1997.

17. Mr Rew said it could be presented as relieving the

Chinese of an obligation at a favourable discount. Mr Fish

(st) 300million agreed that a figure of 900 against reserves of HK$71 bn was small. Mr Shipley reiterated that it was not the cost of the idea which was HKG's problem. Mr Rayson

repeated that the Treasury would still keep its own idea on

JL6AAK/7

CONFIDENTIAL