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Reference....................

In view of Hong Kong's reaction and the opposition of other Whitehall departments to our proposals, it is recommended that we should now cease to press for the inclusion of

dependent territories but insist that, as regards the dependent territories, the following arrange- ments should apply in relation to expatriate pensions:-

(a)

as they approach independence offers will be made to them designed to assimilate them to the position applicable at that stage to IIMG's responsibilities in relation to expatriate pensions in independent countries;

(b) for dependent territories other than those

covered by (a), account would be taken of their expenditure on expatriate pensions in assessing their needs for development aid.

In addition:-

(c)

it is our intention in any event to increase the level of our aid to dependent territories generally.

In addition it is recommended that we should insist that the above points should be included in any public statement announcing new policies. Unless we make some statement on the lines of (b) and (c) we will be exposed to criticism that, by adopting the line at (a), we are neglecting our own territories (some of which are extremely poor) in favour of independent countries that are in a position to exert pressure on us.

CONFIDENTIAL

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