CONFIDENTIAL
HKA 23371
CC:
OCFEB 131
PS/Lord Caithness
Private Secretary
FROM: R A Burns
DATE: 24 January 1992
PS/PUS
Sir J Coles
Mr Muir
Mr Kerby, ODA
Mr Fish, ODA
Mr Davies, FED Miss Brooks, Legal
Advisers
Mr Wye, RAD
HONG KONG: HER MAJESTY'S OVERSEAS CIVIL SERVICE (HMOCS)
1. The Secretary of State has asked for a note on where we stand on this problem. In fact the time is now right to seek firm Ministerial guidance on how to proceed.
2.
We discussed the subject in some detail with the Governor last week. Passions are rising in Hong Kong, and it is clear that if we do not soon have something substantive to say, we shall find ourselves facing a considerable political row in Hong Kong which may blow back into Parliament here. We have been working very hard with the Treasury and ODA to find a solution, but the forthcoming inaugural meeting of an association of HMOCS officers in Hong Kong on 28 January, Lord Caithness's visit on 16-21 February and the visit by the Chinese Foreign Minister to London in early March require us to sort out a viable game-plan.
3. In the circumstances I agree with what Mr Ricketts proposes. It is the least we can do, and it is not negligible. The danger of course is that once we put forward a proposal for limited compensation in stages in this way, we shall be giving the HMOCS officers something real to bite on: they are likely to see our offer as inadequate and to raise at once the question of the sterling value of their pensions. Nonetheless, I believe we should now take the Governor's advice. He is best placed to advise us, and his view is that the scheme will go a considerable way to calming down passions in Hong Kong and that in fact we should not allow the best to be the enemy of the good.
4. In our recent discussions, the Treasury have not explicitly said that they accept that we should proceed with the proposed compensation arrangements funded by HMG.
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CONFIDENTIAL
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