CONFIDENTIAL
on pensions. Governments with whom there are agreed Overseas Service Aid Schemes (OSAS), designed in part to retain the services of overseas officers after independence, are reimbursed a portion of subsequent pensions costs relating to the "inducement allowances" which HMG has provided as an addition to the local salaries paid by the governments. Third, HMG pays United Kingdom pensions supplements to overseas pensioners on the same scale as these are paid to Home Civil Service and similar pensioners in Britain and so protects the overseas governments from cost-of-living claims for increased pensions. 7. Certain overseas pensions have been taken over by Britain under special arrangements with the governments concerned. The most notable example is
the case of India (see paragraph 31 below).
..
Thus the figure of nearly £15m given in the first paragraph of this paper
as the extent of Britain's present annual financial responsibility for overseas pensions is made up as follows:-
Ex-gratia loan advances to cover default
1.1
Pensions paid by governments in receipt
of budgetary aid
0.5
Pensions sums due to inducement allowances
1.1
Pensions supplements payments
3.7
Payments resulting from special agreements
8.4
14.8
PRESENT AND FUTURE SITUATION
9. Overseas governments have never fully accepted the validity of the fundamental principle. They tend to regard their responsibility for pensions earned before independence as an unwelcome part of package deals which comprised the price of independence. As the dates of accession to independence recede into the past the governments are increasingly inclined to question the morality of the printiple and to seek ways of repudiating their pensions responsibilities. The cutting of aid to Tanzania, the necessity for which was in any case regretted
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CONFIDENTIAL