TNAG-2101-FCO40-2990-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 80

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8. Mr Rayson said that it seemed that expectations had been raised as to what would happen at the handover of sovereignty, but that the obligation could not be phrased any stronger than this. Mr Fifoot pointed out that

expectations had not been raised, but had been created by

Col 306. Mr Kerby added that HMOCS had been set up as a distinct service and members had been induced by these

expectations. Mr Rayson said that Col 306 indicated that

the successor territory should meet these commitments.

Mr Fish agreed that this was the way Col 306 pointed.

9.

Mr Rayson asked if the SARG was expected to default on

payment of pensions. Mr Paul explained that the Chinese had given an undertaking in the JD to continue to pay pensions

and benefits on terms no less favourable than before.

Mr Rew said that HMG would only have an obligation if the

Chinese defaulted and for this scenario the Carr-Robertson

Assurance gave a guarantee. Mr Fish said the Carr-Robertson

Assurance was intended to guarantee pensions which not were

already protected. Mr Rew said the onus was on the SARG to

pay the pensions, but in default of payment, the

Carr-Robertson Assurance would step in. Mr Fifoot said that the Carr-Robertson Assurance dealt with aspects of continuity of service and payments. Considerations regarding the exchange rate mechanism had not been added, but HMG was expected to take this step in Hong Kong as it

had done elsewhere.

10.

Summing up, Mr Paul said that while HMG had no clear

cut legal obligations it was certainly arguable that we had

moral responsibility. It was likely that most MPs would see it in this way.

JL6AAK/4

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