TNAG-2689-FCO40-3891-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 74

HUA 233/1

PATE

L

80 1993

FROM : PDM FREEMAN

(Ext 0380)

DATE: 29 October 1993

: PS/Mr Goodlad

PS/Mr Lankester Mr Manning Mr Muir

Mr Trotter, OPD

Mr Morris, HKD

Mr Chakrabarti

770

A.

B.

PS/Baroness Chalker

HONG KONG : ARRANGEMENTS FOR MEMBERS OF HER MAJESTY'S OVERSEAS CIVIL SERVICE (HMOCS).

C.

1.

On her copy of Mr Smith's minute of 27 October recording the telephone conversation that day between the Secretary of State and Mr Portillo, Lady Chalker has asked to know which budget will bear the costs of any payments made to HMOCS. Mr Goodlad has asked a similar question in the context of the PES discussions.

2. The emerging package for HMOCS in Hong Kong is likely to involve three separate elements:

a) Compensation Scheme.

3.

This seems likely to cost around £39 million, splitting the difference between the FCO and Treasury position. Any payments would probably start in 1996/97

in 1996/97 and be spread over the five subsequent years.

4.

The source of this funding was addressed in Ministerial correspondence in 1988 and 1992. The Treasury Chief Secretary (then Mr Major) accepted that the aid programme would not be a defensible source for the funds, but gave no precise undertaking. Nor did the Secretary of State's letter of June 1992 produce a Treasury commitment. Treasury officials have informally told us that they do not consider this an appropriate claim on the