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legal as opposed to a moral obligation, and whether

H.M.G. will in any case be in a position to fulfil

any such obligations, are not examined in this note.

An announcement relating to H.M.G's financial

responsibility for expatriate pensions in dependent

territories would ventilate public discussion of

2.

the nature of our obligations towards Hong Kong

pensioners. We would therefore have to ensure

that our policy was defensible in the Hong Kong

context and as non-committal as might be. We must

avoid,

3.

(a)

(b)

having to distinguish the case of

Hong Kong from that of other Colonies

any

for some reason, whether explicitly

publicly

stated or implied, which could lead to

A

the loss of the political confidence

in the Colony, which is so vital;

giving hostages to fortune against the

event of a Chinese take-over.

Any announcement of the new policy which

included overt reference to dependent territories

would cause problems for us of varying magnitude

according to the scope and immediacy of the

announcement.

For example,

(a)

an announcement that we will consider

the claims of dependent territories

when the time of independence comes in each case,would be innocuous and

non-committal. It would of course

generate considerable interest in Hong Kong

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/(6)

NOTHING TO BE WRITTEN IN THIS MARGIN

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