TNAG-2430-FCO40-3532-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 42

FAXED 1/12/92

OFFICE OF THE BRITISH SENIOR REPRESENTATIVE,

SINO-BRITISH JOINT LIAISON GROUP HONG KONG

M JC Waters Esq

Civil Service Branch

West Wing

CGO

Dear rike,

PENSION SAFEGUARDS

1.

HKA 233/1

1 December 1992

See alread PE

10/12

Thank you for sending me a copy of your draft speaking note for the Secretary for Civil Service to speak to the staff unions on 3 December.

2.

I set out in my letter of 27 November to the Chief Secretary my very strong reservations about the line which HKG is thinking of taking on the pension safeguards fund.. The draft speaking note takes no account of my concerns, and it follows that I disagree strongly with it. Paragraph 3 of the speaking note undoubtedly in my view accepts in principle the idea of a pension safeguard fund: it will certainly be taken by unions to mean that, and I cannot see that once this is said there will be any possibility of refusing to have such a fund. I understand that there is considerable doubt whether ExCo in fact advised that the Government should go this far.

3. I am concerned only with the likely repercussions with the Chinese. My own belief is that if we adopt this position we shall be in baulk with the Chinese on all subjects involving budgetary considerations until a sum of money has been earmarked for this fund.

4. So far as I know HMG has not been briefed as yet on what HKG are proposing to do. I wonder if it is right that, on a matter of this importance and with such far reaching implications, HKG should take this action without consultation with London.

home ever

Cc: CS FS

A C Galsworthy

S for Tsy (Attn. Mr John Wilson)

IC

PA PS/GH

bce:

SECRET

Mr P F Ricketts, HKD, FCO

648