TNAG-2687-FCO40-3889-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 7

CODE 18-77

CONFIDENTIAL

175

Reference

Mr

Motri

fris

HMOCS

1.

As discursed with Martin

HKA 233/1

0200 1993

DESK INEX

Bigfan

চ

dion Tek

the Bliknen

Interesting. Mr. R. at least Seems more human stan his predecessors. Some informed Jack.

Channelling is worthwhile.

I spoke to Mike Richardson, HMT, on the letter which Mr Goodlad will pass to the Chairman of the HMOCS Association. During the conversation, Mr Richardson asked me how I thought the HMOCS issue could be resolved and whether there was any scope for compromise in our position. I explained that the Governor was unlikely to support any proposal which deviated significantly from the FCO proposal, and that he was looking to the Prime Minister for a political decision.

2.

I said we understood that Mr Portillo was not inclined to move towards us, and that there was therefore no scope for a compromise. Mr Richardson said he could not speak for Mr Portillo, but he thought that there might be some flexibility in the Treasury position. For example, in his view if we were prepared to concede on the pension safeguard mechanism they might be more flexible on the safeguard rate. I said that if a rate of 16 could be agreed, we might be able to accept the Treasury proposed mechanism (note: the Governor has already said he could do so if other elements in the package were acceptable).

3. On the compensation scheme, I stressed that a scheme as close to traditional schemes, including full factors, was essential. However, there might be some scope for savings which we could explore. Mr Richardson seemed to have in mind the idea of agreeing a cost for the scheme and then trying to arrange the scheme to fit it.

4. On SPOS, Mr Richardson said that it was not really his subject (it is dealt with by Don Raison) but his personal view was that SPOS did not operate fairly. The Treasury position was that they would consider amendments to SPOS after the safeguard scheme had been agreed.

5.

As Mr Richardson had to go to a meeting, we did not go into any further details. However, we concluded that there might be scope for officials to have another go at proposing a solution.

6.

This was an informal discussion and we should be careful not to place too much hope in Mr Richardson's remarks.

mor.min.ADM

SLM

CONFIDENTIAL