10 MAY '93
10:21
aefl.to/Woodfield/1.10.5
H M TREASURY REF DIV
TIAL
HM Treasury
PF Owen Esq
Parliament Street London SW1P 3AG
Telephone 071-270
P.2
132
HKA 233
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плест
TRY
17 MAY 1993
REGISTRY Action Taken
Economic and Domestic Affairs
Secretariat
Cabinet Office
70 Whitehall
LONDON SW1
Peter
Dear lote,
HONG KONG PENSIONS
10 May 1993
Thank you for sending us a draft of your paper on this issue under cover of your letter of 5 May: 28
We would like to draw your attention to two major points we have on the draft, the first related to the 1964 Carr-Robertson assurance and the second on compensation. Some further more detailed points are also set out below.
1964 Carr-Robertson Assurance
Paragraph 12 states that the
we
sterling pensions safeguard would only apply in the event of a fall in the HK dollar, and that different commitments (ie the 1964 Carr-Robertson Assurance) would come into play in the event of a default on pension payments by the Chinese. This does not accord with the legal advice received from Treasury Counsel. That advice says that HMG's commitments under Carr-Robertson which said that HMG would step in if former HMOCS experienced financial hardship as a result of a change in circumstances in a former UK territory cover both the exchange rate value of pensions as well as a default on paying them. Counsel's advice was that a safeguard to ensure a minimum value for the pensions would cover both contingencies provided that the scheme introduced could be defended as being fair; and that HMG had a great deal of scope in determining what was fair provided it took the initiative and announced its intention to introduce a scheme.
In the light of legal advice we suggest confirmation the following amendments:
subject to FCO
paragraph 12 delete the last sentence in and change the first sentence to read:
parenthesis
"FCO and Treasury agree that the Government must guarantee pensions at some level against the possibility that economic difficulties in Hong Kong
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