TNAG-2686-FCO40-3888-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 44

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CONFIDENTIAL

DRAFT OF 11 May 1993

HM OVERSEAS CIVIL SERVICE (HMOCB) HONG KONG: COMPENSATION AND PENSIONS SAFEGUARDING

1. There are some 700 HMOCS staff in Hong Kong. Some 380 are police officers, 100 are administrative officers, 60 are in the

the judiciary, and

rest include accountants, engineers and The There are also some 1,600 existing pensioners. surveyors. Foreign Office, the Treasury and the Governor of Hong Kong agree that arrangements need to be settled quickly to compensate these staff for loss of prospects and protection, and to safeguard their pensions, once Hong Kong transfers to China in June 1997. This note summarises the outstanding issues on the package to be offered.

Background

2. The FCO and Treasury agree that a balance is needed between offering terms which are accepted as fair by the staff concerned and avoiding unreasonable cost to the UK taxpayer. There is no dispute that a legitimate expectation of help at some level does exist.

3. The FCO consider that to be fair the terms must broadly reflect those applied in the 42 previous cases when the UK has withdrawn from a Dependent Territory. This means following as closely as possible the commitments given in White Papers of 1954 and 1960. Otherwise the morale and commitment of the staff could

to be damaged, causing many

leave

and making it harder maintain stability in the run up to transfer in 1997.

4.

to

the

The Treasury argue that the White Papers

allow Government discretion to vary the terms offered to HMOCS in each Dependent Territory 50 as to reflect the Territory's circumstances. They consider that, compared with previous cases, Hong Kong differs in important respects, and the HMOCS there are in a significantly more favourable position. They believe this would justify setting the terms at a lower level than applied in the past.

5. On average, taking salary and pensions together, Hong Kong staff are around twice as well off as their UK counterparts (the difference in salary costs alone is smaller). Within that, the relative pay advantage enjoyed by administrators compared to

CONFIDENTIAL