CYPHER/CAT A
PRIORITY
CONFIDENTIAL
Busins Police
MINISTRY OF OVERSEAS DEVELOPMENT ΤΟ
NEW DELHI
TELNO MODEV 794
CONFIDENTIAL
STAG
5 DECEMBER 1969 (S.A.D.)
PA MAN DIN कर
Police File
K18/35=
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FOR YOUR CONFIDENTIAL INFORMATION, MINISTER OF OVERSEAS DEVELOPMENT IS CONSIDERING PROPOSING CHANGE IN BRITISH POLICY ON
OVERSEAS PENSIONS, UNDER WHICH BRITAIN WOULD TAKE OVER FROM
OVERSEAS GOVERNMENTS COST OF EXPATRIATE PENSIONS RELATING TO
PRE-INDEPENDENCE SERVICE. THOUGH PRESSURE FOR SUCH A TAKE-OVER
COMES MAINLY FROM AFRICA, IN EQUITY IT WOULD HAVE TO BE OFFERED TO NON-AFRICAN COUNTRIES ALSO. THERE ARE HOWEVER A FEW GOVERMENTS
WHICH IT WOULD BE INAPPROPRIATE TO INCLUDE, AS BEING SPECIAL
CASES.
2.
INDIA, IN OUR VIEW, IS ONE SUCH CASE, AND PURPOSE OF THIS TELEGRAM IS TO SET OUT BACKGROUND AND INVITE YOUR URGENT COMMENTS ON OUR PROVISIONAL CONCLUSIONS, AS WE WISH TO FINALISE SUBMISSION TO MINISTERS AS SOON AS POSSIBLE. THERE ARE ALSO IMPLICATIONS FOR
PAKISTAN.
3.
INDIA'S EXPATRIATE PENSIONS WERE FUNDED IN 1948 WHEN INDIANS BOUGHT TAPERING ANNUITIES FROM BRITAIN FROM THEIR STERLING BALANCES AT A COST OF £148M. IN 1955 BRITAIN ASSUMED RESPONSIBILITY FOR PAYING BULK OF INDIA'S EXPATRIATE PENSIONS AGAINST A LUMP SUM SETTLEMENT UNDER WHICH BRITAIN REPAID £47M. TO INDIA. SOME PENSIONERS (E.G. THOSE RESIDENT IN INDIA) WERE EXCLUDED FROM AGREEMENT: COST OF THEIR PENSIONS IS THOUGHT TO BE CIRCA £100,020 A YEAR. (FOR CUMPARISON, INDIAN PENSIONS WE TOOK OVER IN 1955 CURRENTLY AMOUNT TO £8M. A YEAR, BUT ROUGHLY HALF OF THIS REPRESENTS UK INCREASES WHICH ARE NOT INCLUDED IN THE OTHER FIGURES IN THIS TELEGRAM.)
4. WE THINK THAT IN EQUITY BRITAIN SHOULD NOW TAKE OVER THE £130,000 A YEAR NOT TAKEN OVER IN 1955. WE ARE NOT HOWEVER DISPOSED TO RECOMMEND THAT WE SHOULD REPAY ANY PORTION OF CAPITAL SUM EFFECTIVELY TRANSFERRED TO BRITAIN UNDER 1955
SETTLEMENT, IN OUR VIEW THIS SETTLEMENT CLOSED THE ACCOUNT. /5. WHILE
CONFIDENTIAL
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