SPOS
CONFIDENTIAL
9.
David Mellor recognised that the current arrangements for
Supplementary Pension for Overseas Service (SPOS), as applied
to Hong Kong were inequitable. I hope we can agree that officials can implement the necessary changes as soon as they can be technically introduced.
Other Matters
10. I believe that we should continue to resist pressure from
HMOCS officers for the right to retire in 1997 on full
pension, if this was to be at HMG's expense.
Conclusion
11. The extra work done since we met in July has refined some
of our cost estimates but has introduced no new elements of
substance. I am sure that we must now take the necessary
political decisions. These need to give us a robust position
sustainable in the face of pressure generated by HMOCS
officers and to give us a defensible case in the event of
judicial review. The compensation proposals will inevitably
be more costly than we originally hoped; but the maximum
contingent liability in respect of sterling safeguards for
pensions will be lower than we originally estimated. Chris
Patten has made his own assessment of the position since his
arrival in Hong Kong. You will have seen his letter to me.
He feels strongly that we must settle matters soon.
I agree.
Further delay will destroy any remaining trust among HMOCS
officers that we are serious about addressing their concerns.
It will begin to undermine our ability to administer Hong Kong
effectively. That is not tolerable.
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CONFIDENTIAL
5
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