st.ps/dr/22mp1.2
CONFIDENTIAL
will in practice enjoy a substantially better income in retirement than their UK counterparts unless there were a catastrophic fall in the value of the Hong Kong
dollar.
5. It was for such people that the Governor made proposals costing some £50 million in compensation, and involving contingent liabilities of another £250 million or so. The package I proposed in my letter of 15 January offered compensation payments costing up to £37 million together with safeguards involving contingent liabilities of another £100 million or so. The Governor's letter regards such a package as cheap. UK taxpayers and their representatives could well take a different view. If understand your legal advisers now believe
the arrangement required primary legislation, that would only add to our presentational problems.
6.
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as I
safeguard
It would of course
be easier to present a more generous scheme for HK HMOCS officers if the Hong Kong Government were to contribute to its funding. In the absence of any such offer, my letter of 15 January struck a reasonable and defensible balance between the interests of HMOCS officers in Hong Kong on the one hand, and of the UK taxpayer on the other. I have seen nothing from the Governor to change my views, but am ready to discuss the issues again with you as soon as you wish.
7. I am copying this letter to the Prime Minister.
Yours ever
Michell.
MICHAEL PORTILLO
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