TNAG-2685-FCO40-3886-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 56

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self government. We all know why we cannot now require china to provide an HMOCS Sterling pension safeguard. The point however is that in all HMOCS territories such a safeguard was provided either through HMG paying or requiring the territory (e.g. Bahamas, Brunei) to pay and the safeguard rate was based on the actual rate of exchange.

I would not quarrel with much of the detailed mechanics suggested by the chief Secretary. However without a more realistic rate of HK$16: £1 there simply will be no logically defensible Sterling safeguard.

Finally, it is perhaps an obvious point but it is of course quite likely that these

arrangements will involve no use of Treasury resources at all. on all our past exchange rate experience, the provision of a Sterling pension safeguard at a rate of 16:1, whilst creating a potential contingent liability, would result in no additional cost to HMG.

Compensation

I am aware of the 1960 white Paper and the reference to the Bahamas, Bermuda, Brunei and Hong Kong. The reference relates to the fact that HMG was willing to provide the other dependent territories with aid under the OSAS scheme to meet the HMOCs obligation. The four territories concerned have never been UK aided territories. This does not however mean that the HMOCS arrangements as detailed in the 1954 and 1960 White Papers should not apply to them. Indeed as far as we are aware HMOCS obligations have been honoured in full in the Bahamas and Brunei. Bermuda remains a dependent territory. should add that all this had nothing to do with salary levels in the four territories and it is worth noting for the record that in 1960 Aden and the South Arabian Protectorate was amongst the better paid Colonial Services!

I

I think another point needs to be spelt out. Although the Joint Declaration provides for continuity of service and maintenance of terms and conditions of service post 1997 this covers the position of the entire local Civil Service which will be transferred to the Hong Kong Special Administrative Region Government (SARG) in 1997. It has no particular relevance to HMOCS and was not done for HMOCS purposes.

The Joint Declaration and Basic Law

also stipulate that the senior posts must be filled by Chinese nationals. HMOCS officers are the ones most affected being largely senior officers of the

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