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3. However the Government did not announce the scheme at
Officials continued to work on the other
that stage.
elements of a package, ie the question of sterling
safeguards and adjustment to the operation of the Supplementary Pension for Overseas Service
(SPOS) regulations.
A.
After discussion between our Departments and with the Hong Kong Government, my officials put forward last August their detailed proposals for tackling this package of issues. Your officials had reservations about the proposals for sterling safeguards. Subsequent exchanges have narrowed
these differences, and I understand that the enclosed discussion paper is now broadly agreed among Departments. However we are still some way from decisions, mainly because of uncertainty about the feasibility of one possible option for sterling safeguards (option (d) in the attached paper).
5.
Pressure has meanwhile built up rapidly in Hong Kong, where many HMOCS officers are no longer prepared to rely on our repeated assurances since 1984 that these matters are
under active consideration. They have recently organised themselves into an Association: at present its leadership is moderate and responsible and they kept a firm grip on the
several hundred members who attended the association's
inaugural meeting last week; but we cannot expect this
restraint to continue. Already last week there were media
reports of some of these top expatriate civil servants, judges and police officers voicing publicly their lack of
confidence in the Joint Declaration. We have all the
ingredients here for a political row which may spill over
into Westminster.
6. In these circumstances I accept the strong advice of the
Governor of Hong Kong that we should make an immediate
announcement about the compensation scheme and the SPOS adjustment, while continuing to make as rapid progress as we
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