SECRET
1 314
MDHOAN 1251
IN THE 1954 WHITE PAPER (COLONIAL 306) FROM WHICH THE PHRASE WAS TAKEN.
3. IN PARA 7 ALTHOUGH WE HAVE PUT THE SPEAKING NOTE TO THE TREASURY IN THIS FORM, WE OURSELVES REMAIN UNEASY ABOUT HONG KONG'S IDEA OF DESCRIBING THE PAYMENTS AS DIVIDING INTO A COMPENSATION ELEMENT PAYABLE IN 1997 AND AN INDUCEMENT ELEMENT PAYABLE THEREAFTER. QUITE APART FROM THE CHINESE ANGLE, THIS WOULD NOT BE AN EASY CONCEPT FOR US TO DEFEND IN CONSULTATIONS WITH HMOCS OFFICERS, EG IN CONSIDERING THE DIFFERENT OPTIONS FOR PHASING THE SCHEME. WE WOULD PREFER TO BE ABLE TO ARGUE THAT
THE WHOLE SUM (NOT JUST THE SAY 20 PER CENT WHICH MIGHT BE PAYABLE IN 1997/98) CONSTITUTES COMPENSATION BUT THAT, IN ACCORDANCE WITH PAST PRACTICE AND HONG KONG'S SPECIAL CIRCUMSTANCES, PAYMENT IS BEING PHASED IN A WAY WHICH PROVIDES AN INDUCEMENT TO STAY. SINCE THE MAXIMUM WOULD BE ONLY HALF AS GENEROUS AS A TRADITIONAL SCHEME, HMOCS OFFICERS MIGHT ARGUE THAT THE HONG KONG APPROACH MEANT WE WERE OFFERING THEM ONLY SOME 10 PER CENT (IE HALF OF 20 PER CENT) THE COMPENSATION PAID
ELSEWHERE. THIS IS ANOTHER REASON FOR THINKING ABOUT GETTING
AWAY FROM THE ''COMPENSATION/INCENTIVE'' TERMINOLOGY AND CALLING THE HONG KONG SCHEME SOMETHING SUI GENERIS, LIKE ''HMOCS SEVERANCE AWARD SCHEME''.
4.
SEE MIFT
HURD
YYYY
ΜΑΙΝ
29
HKD
FED
NEWS D
RMD
PS/LORD CAITHNESS
SIR J COLES
NNNN
DISTRIBUTION
29
MR BURNS
LEGAL ADVISERS//MISS BROOKS
ODA//MR KERBY
ODA//MR FISH
No comments yet.
Private notes are available after approval.