CONFIDENTIAL
the face of pressure from HMOCS members and their backers in
Parliament. Given the current strength of the Hong Kong dollar against Sterling, the HMOCS Association may press for a safeguard of at least 12.5:1. We have proposed that the trigger should operate at 16:1 which would allow for a 30% reduction in benefits before the safeguard came into play. This would provoke a major outcry from HMOCs officers but I believe that we can defend 16:1 on the grounds that Hong Kong salaries are generally significantly higher than those in UK public service and that our proposal represents a reasonable
balance between the interests of the officers and those of the
UK taxpayer. I have pointed out before that a decision on this could well be the object of a judicial review.
Compensation
8.
Our present proposal represents, in terms of cost, a compromise between the HMOCS demand and our earlier proposal, on which we consulted the HMOCS Association in May. Those earlier proposals were drawn up before Tiananmen, and concentrated on inducing officers to stay for eight or more years after 1997. We have no good answer to their criticism that this scheme forces them to work under Chinese sovereignty in order to gain the compensation to which they are entitled. We need to show that we are treating Hong Kong HMOCS officers in accordance with past practice elsewhere and to concentrate on keeping as many as possible of them up to 1997. To keep costs to the minimum, we propose that the maximum payable to any officer, over the five or six years of the scheme, should be £120,000 (1992 UK prices): this will be unpopular with the officers but is defensible in terms of past practice.
sos.min.HMOCS
MVS
CONFIDENTIAL
4
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