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HKA 233/1
1 MA:
87
155525
MDHIAN 6176
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FM HONG KONG
TO DESKBY 10120OZ FCO
TELNO 750
OF 101058Z MARCH 92
INFO IMMEDIATE PEKING, UKREP JLG HONG KONG
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YRTELNO 452 AND 453: HMOCS: BRIEFING THE CHINESE
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1. UKREP JLG IS COMMENTING SEPARATELY ON THE TACTICS FOR CONSULTING THE CHINESE AND THEIR LIKELY REACTION. BTU WE TOO ARE SERIOUSLY CONCERNED AT THE SUGGESTED CHANGE OF TACTICS AND AT YOUR SUGGESTION THAT SUCH DETAILED INFORMATION SHOULD BE INCLUDED IN THE STATEMENT.
2. PARTICULARLY WORRYING IS THE SUGGESTION THAT THE CHINESE SHOULD BE TOLD THAT THE UK GOVERNMENT WILL ONLY PAY FOR THE COMPENSATION INCENTIVE SCHEME IN THE FIRST INSTANCE. TACTICALLY THIS WOULD BE UNWISE. BUT I HOPE ALSO IT DOES NOT/NOT REPRESENT THE REAL POSITION. OUR CLEAR UNDERSTANDING, MOST RECENTLY FROM MR MELLOR'S LETTER TO THE SECRETARY OF STATE, IS THAT THE TREASURY HAVE AGREED TO AN HMG-FUNDED COMPENSATION SCHEME. I HOPE I CAN BE ASSURED THAT THIS IS STILL THE CASE.
3. GIVEN THAT THE AIM OF THE STATEMENT IS TO BRIEF THE CHINESE ON THE COMPENSATION SCHEME, AND NOT ON STERLING SAFEGUARDS OR SPOS, I SEE NO REASON FOR ANY REFERENCE TO POSSIBLE PAYMENTS BY HKG, LET ALONE THE SARG. EITHER, PARTICULARLY THE LATTER WOULD IMMEDIATELY GIVE THE CHINESE A JUSTIFIED CAUSE FOR DEMANDING CONSULTATION.
4. I CAN SEE NO ADVANTAGE IN HONG KONG TERMS OF REFERRING TO A 'SEVERANCE AWARD' RATHER THAN A COMPENSATION SCHEME (PAR 3 OF TUR). THE ONLY WAY THAT THIS SUBJECT CAN BE PRESENTED LOCALLY IS THAT, IN ACCORDANCE WITH ITS HISTORICAL OBLIGATIONS, HMG WILL INTRODUCE APPROPRIATE COMPENSATION ARRANGEMENTS FOR HMOCS OFFICERS WHICH REFLECT THE TRANSFER OF SOVEREIGNTY IN 1997.
5. MY FINAL GENERAL POINT IS ON TIMING. AS WE HAVE SAID BEFORE, WE NEED TO ISSUE A LETTER FROM LORD CAITHNESS TO THE CHAIRMAN OF THE HMOCS ASSOCIATION (MR MICHAEL CARTLAND, DUE BACK FROM LEAVE SHORTLY) ON 23 MARCH AT THE LATEST. WE HAVE ALL AGREED THAT WE NEED TO GIVE THE CHINESE 10 DAYS OR MORE TO CONSIDER THE
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