TNAG-2923-FCO40-4198-Visits-and-proposed-visits-by-Alastair-Goodlad--Minister-of--1993 — Page 4

CONFIDENTIAL COVERING SECRET

HMOCS/Civil Service Issues

5.

The Minister last saw the HMOCS Association Committee

on 31 May and gave Mr Cartland a letter which set out the

progress made (agreement in principle to a sterling pension safeguard and to a revised compensation scheme, and the

Governor's decision that officers may retire early with full

pension). Subsequently Mr Cartland (but not others in the

Committee) was briefed in confidence by Mr Dinham about our

difficulties with the Treasury. His letter of 21 September

pressed for more details, but also sought to link HMOCS

members' concern over their package with the current debate

in Hong Kong on the change to the localisation policy. This is a spurious argument: there is a Local Compensation Scheme

for those affected by localisation and that is HKG's concern. Mr Goodlad's reply contained a straight-bat response noting

that the HKG would soon inform those HMOCS officers who would

be affected. But these arguments will no doubt resurface in

the Meeting with HMOCS Association (Brief No 7).

6. In a separate development, the South China Morning Post

of 27 September set out in detail our proposals for the

compensation scheme. We do not know the source of the leak, and HKG are neither confirming nor denying the accuracy of the report. The effect may not be altogether unhelpful, as

it will tend to confirm that something has been achieved in

all the long months of inter-departmental haggling here.

7.

HKG's interim decision to amend their localisation

policy, to allow certain oficers on overseas terms to

transfer to local terms, continues to provoke controversy.

One or two outside government (notably Christine Loh and

journalist Margaret Ng) have argued that civil servants

should be promoted on merit not on racial grounds, but it has

touched raw nerves with the Senior Non-Expatriate Officers

Association (SNEOA), and has provided a handy basis for

Chinese criticisms of the Bill of Rights and accusations of

British conspiracy to retain influence after 1997.

The

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