CODE 18.77
Mr Fish
ODA
457
Reference
CONFIDENTIAL
HKA 233/1
HMOCS: OPTIONS
1. We are tasked "to set out a range of costed options for further consideration" by Ministers. We have of course already done a vast amount of work on this, and I think it would be good tactics to get a first draft across to Treasury officials early next week.
I can see no point in again trying to agree any sort of discussion paper with Treasury officials: we should
2.
concentrate on identifying and costing different options. I enclose a draft and would be grateful for your comments. I hope we can place the onus on the Treasury to work out and cost options involving Government subsidy to a private-sector scheme and to elaborate on non-HMG funded options.
3.
Drawing up this paper has reminded me that the figures we have used for the cost of sterling safeguards are not on the same basis as those for compensation: the former are in 1992 Hong Kong prices, the latter in 1992 UK prices. HMG's real contingent liability for sterling safeguards will increase each year by the difference between UK RPI and Hong Kong salary/pensions increases. We shall probably have to add a reference to this in the options paper: eg flagging the possibility of protecting only the UK 1992 real value of pensions.
Moxo.
NJ COX
Hong Kong Department
WH 302 270 2650
10 July 1992.
CONFIDENTIAL
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