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can on sterling safeguards.
7. On the compensation scheme, our detailed proposals have
hardly changed since Ministers agreed the scheme in
principle in 1988 (Annex C of the Inter-departmental paper). At the present exchange rate of HK$14: £1 we now expect the cost to be between £20 and £30 million spread over 8 years hum 1797
(the maximum would be about £39 million; the minimum about
£4 million). A period of consultations with the staff
associations must precede finalisation of the scheme. We
shall also want to brief the Chinese.
8.
SPOS is much less significant in financial terms: about
£1 m per annum at present exchange rates, or £2 m if the
dollar fell to HK$16 to £1. But the present inequity is a
source of strong complaint to the Overseas Service
Pensioners' Association and tackling it would help significantly to reduce the immediate heat of the HMOCS
issue in the UK.
9.
It is proposed to meet the SPOS from the ODA
superannuation vote. The PES provision for superannuation
is not cash limited, but taking on this new commitment would
of course add to out turn expenditure, including 1992-93. This is a matter of long-standing UK pensions legislation and it would not be proper to divert Aid Wing funds for the purpose. (Nor is there any possibility of the Hong Kong Government now starting to contribute special support for expatriate officers). The compensation obligation will also require separate provision in due course: the fulfilment of
our obligations to HMOCS officers is an interest of the
Government as a whole; and the costs for Britain of a
break-down in the Civil Service or Police there would be
very high.
10. There are drawbacks to proceeding step by step. In the interests of reducing the costs to the taxpayer and of encouraging HMOCS officers to stay on in Hong Kong, both our
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