SECRET
SECRET
FM FCO
TO PRIORITY HONG KONG
TELNO 924
OF 061415Z JUNE 92
INFO PRIORITY PEKING, UKREP JLG HONG KONG
ec'd Mr Broadbent
Eco. Adv.
367
072472
EW12/6 MDLOAN 7278
TOP COPY Q DIST
+
HKA 233/1
PERSONAL FOR GOVERNOR
PEKING: PERSONAL FOR AMBASSADOR
UKREP JLG: PERSONAL FOR MR GALSWORTHY
HMOCS ARRANGEMENTS
1.
LADY CHALKER CHAIRED A MEETING TODAY TO DISCUSS THE WAY FORWARD IN THE LIGHT OF THE CONSULTATIONS IN HONG KONG FROM 7-11 MAY AND MR GOODLAD'S DISCUSSIONS IN HONG KONG LAST WEEK. THE GOVERNOR-DESIGNATE, MR GOODLAD AND OFFICIALS ATTENDED.
2.
MINISTERS AGREED THAT WE SHOULD AIM TO SECURE AGREEMENT HERE
ON A PACKAGE OF HMOCS ARRANGEMENTS BEFORE MR PATTEN LEAVES FOR HONG KONG. THEY DECIDED TO RECOMMEND THAT THE SECRETARY OF STATE SHOULD MINUTE THE PRIME MINISTER PROPOSING THAT HE CHAIR AN EARLY MEETING WITH FCO AND TREASURY MINISTERS TO DISCUSS:
(A) OUR PROPOSAL FOR A STERLING SAFEGUARD, FIXED AT A DEFENSIBLE
LEVEL: AND
(B) A REVISED COMPENSATION PROPOSAL MORE IN LINE WITH TRADITIONAL PRACTICE. THIS WOULD PROBABLY INVOLVE THE USE OF TRADITIONAL ACTUARIAL FACTORS (TABLES IIA AND IIB OF THE HONG KONG LIMITED COMPENSATION SCHEME), WITH THE COMPENSATION TO BE PAID IN FIVE OR SIX ANNUAL INSTALMENTS TO OFFICERS SERVING IN JUNE 1997, AND WITH NO PENALISATION OF OFFICERS WHO OPTED NOT TO SERVE ON UNDER THE SAR GOVERNMENT. THERE WOULD BE A CAP, SO THAT NO OFFICER COULD RECEIVE A TOTAL OF MORE THAN ABOUT
PDS 120,000 (WHICH REPRESENTS AN UPGRADING OF TRADITIONAL CAPS
IN THE 1960'S OF PDS 12,000 IN LINE WITH UK RETAIL PRICE INFLATION).
3.
MINISTERS EXPRESSED CONCERN ABOUT THE DIFFICULTIES IN THE WAY OF FULFILLING THE WHITE PAPER COMMITMENT REGARDING RIGHT OF EARLY RETIREMENT AND ASKED US TO DO MORE WORK ON THIS. THE SECRETARY OF STATE'S MINUTE TO THE PRIME MINISTER WOULD NEED TO FLAG UP THE PROBLEM, WHILE MAKING IT CLEAR THAT THERE COULD BE
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