TNAG-2101-FCO40-2990-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 72

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sterling safeguards should be given, Mr Rayson asked

whether, if HMG were to provide a safeguard, the HKG would

be prepared to put up the money for pensions before 1997.

The precise amount of the payment (s) would be for negotiation which could take account of the cost to HKG of

bringing forward its liabilities to pay pensions to HMOCS

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

safeguard. Mr Rayson said that Treasury officials would not advise their Ministers to go along with sterling safeguards and that Treasury Ministers would certainly

reject an approach from FCO Ministers while viable options remained to be fully explored. Whilst the Treasury would be glad to consider alternative proposals from HKG, he did not rule out the possibility of the Treasury returning to their

own proposal at some stage. Mr Rayson suggested that it

might be helpful for the FCO and HKG to reflect further on

the matter and for consideration to be given to the

political value to HKG in settling the issue. There were

advantages to HKG in having this matter solved and perhaps Mr Shipley could persuade HKG's Financial Committee that the

proposal which had emerged at the meeting was acceptable and could be ringfenced. Mr Shipley said that the Chinese would

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