CONFIDENTIAL
174451
MDHIAN 3440
DESPITE THE HOPES AND EXPECTATIONS OF 1984 AND THE EFFORTS WHICH MANY HMOCS OFFICERS HAD MADE AND WOULD MAKE TO HELP IT WORK, THERE WERE NOW DEEP AND GROWING DOUBTS ABOUT THE DEGREE OF PROTECTION IT WOULD OFFER IN PRACTICE AND DISTRUST OF CHINESE INTENTIONS, AS MANIFESTED EG OVER THE BASIC LAW'S DRAFTING, THE AIRPORT NEGOTIATIONS AND THE COURT OF FINAL APPEAL. THEY MENTIONED TIANANMEN AND PARTICULAR RHKP CONCERNS ABOUT THE CHINESE/SARG APPROACH TO THE RULE OF LAW. THEY ASKED THAT WHEN MINISTERS CAME TO TAKE DECISIONS, THEY SHOULD FIRST STUDY THE INTELLIGENCE ASSESSMENTS FOR HONG KONG'S PROSPECTS UP TO AND BEYOND 1997.
6.
THE TEAM SAID THAT HMG HAD NOT SHOWN GOOD FAITH AND THAT OUR UNILATERAL PROPOSALS OFFERED NO FAIR BASIS FOR DISCUSSION: WE SEEMED TO BE GOING THROUGH THE MOTIONS BEFORE IMPOSING OUR OWN PENALTY SCHEME. WHILE THE TWO SIDES' STARTING POINTS WERE SO FAR REMOVED, THEY WERE NOT PREPARED TO OFFER COMMENTS ON OUR PROPOSAL. WE SHOULD NOW PUT FORWARD A FULL PACKAGE OF PROPOSALS FOR HMOCs, INCLUDING A RADICALLY REVISED COMPENSATION PROPOSAL, AND SHOULD HOLD CONSULTATIONS ON THAT. THEY REHEARSED THE CASE FOR PROTECTING THE STERLING VALUE OF THEIR PENSIONS AND FOR IMPROVING THE SPOS (PENSION SUPPLEMENT) REGULATIONS.
7. WE EXPLAINED OUR IDEAS AND DEPLOYED THE ARGUMENTS IN OUR BRIEF, BUT THEY MADE LITTLE IMPACT. AGAINST THIS BACKGROUND, WITH THE RISKS OF A BREAK-DOWN AND A PUBLIC ROW, WE WORKED, AS PREVIOUSLY AGREED, TO GET OUR DETAILED PROPOSAL ON THE TABLE AND TO MAKE OUR MOST DEFENSIBLE PHASING PROPOSAL (20 PERCENT IN 1997, AND ANNUAL INSTALMENTS OF 10 PERCENT FOR THOSE WHO STAYED 8 YEARS): WE ACHIEVED THIS. (BECAUSE OF THE SPEED OF DEVELOPMENTS WE JUDGED IT BEST TO LEAVE THE PHASING FIGURES BLANK IN THE PAPER WE TABLED AND TO STATE ORALLY THAT THEY WERE WHAT WE NOW FELT ABLE TO RECOMMEND TO MINISTERS, HAVING TAKEN NOTE OF THE ASSOCIATION'S CALL FOR A SIGNIFICANT PAYMENT FOR ALL HMOCS OFFICERS SERVING IN 1997.)
8.
WE THEN TRIED HARD TO INDUCE THE ASSOCIATION TO DISCUSS THE DETAILS OF OUR PROPOSAL. WE SAID THAT WE HAD MADE CLEAR IN ADVANCE OUR POSITION ON EARLY RETIREMENT AND STERLING SAFEGUARDS: WE HAD NOTHING FURTHER TO SAY ON THESE POINTS. WE HAD TABLED A DETAILED PROPOSAL, PARTS OF WHICH WOULD BE COMMON TO ANY SCHEME FOR HMOCS OFFICERS. OTHER PARTS WENT TO THE HEART OF THE ASSOCIATION'S OBJECTIONS TO OUR APPROACH, BUT SURELY HERE TOO THEY COULD COMMENT ''WITHOUT PREJUDICE'', IE ABOUT WHAT DETAILED ARRANGEMENTS EG PHASING THEY WOULD PREFER IF MINISTERS OPTED FOR
THIS APPROACH?
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