Mr
Pa
stone 17/12
CONFIDENTIAL
107
HKB 431 16
FROM:
A R Paul
DATE: 17 December 1990
CC:
п/к
Mr McLaren
Mr Burns
HMOCS MATTERS
1. I took the opportunity of my visit to Hong Kong last week to call on Mr Shipley to find out how the Hong Kong Government proposed to respond to the Treasury's proposal on sterling safeguards. I explained that the matter had been discussed with the Governor during his recent visit to London; that the political difficulties had been explained to us; but that we nevertheless hoped that a way could be found to keep the dialogue with the Treasury alive.
2.
He
Mr Shipley said that he was working on counter proposals, using the Treasury's proposal as a framework. had not yet finalised his ideas, but envisaged something on the following lines. Existing pensionsers would be given the opportunity to cash in their pensions, as would others as they reached pensionable age. At the same time, local officers would also be given the opportunity to commute their pensions. He anticipated that the cost of these proposals to the Hong Kong Government would be
HK$ 8.2 billion between 1991 and 1997. It was therefore by no means certain that this idea would be endorsed.
3. I explained to him that it would be helpful to have his response to the Treasury as soon as possible, together with a "strategy" telegram, on the basis of which we would submit to our Ministers on the way forward. We agreed that it might be useful for Mr Shipley to pay a further visit to
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CONFIDENTIAL
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