CONFIDENTIAL
The Foreign and Commonwealth Office wish the scheme to be extended to
include dependent territories as they consider it would be difficult to
justify proposals which appeared to treat dependent territories less
favourably than independent territories. Inclusion of dependent territories would mean an addition of about £640,000 per annum for expatriate pensions in respect of Hong Kong and small amounts only for other dependent territories. If it appeared that the exclusion of dependent territories had been decided on specifically in order to avoid the inclusion of Hong Kong
this would cause serious difficulties in relation to that territory."
Foreign and Commonwealth Office consider also that the draft announcement should not be worded in such a way as to exclude for ever the taking over of the pension liability in (a) above. The possibility of negotiating a commutation payment from overseas governments in respect of post-independence pensions should be borne in mind.
The
14. No country or territory which was eligible for inclusion in the scheme would be pressed to take advantage of it and the fact that we would take account of the cost of pensions liability taken over in determining our aid allocation to any particular country might well induce certain eligible countries to continue with the present arrangements for the time being. The Foreign and Commonwealth Office and Ministry of Overseas Development consider however that only by making a statement of principle of their readiness to take over responsibility for payment of pensions and defining the extent to which Her Majesty's Government would be prepared to do so can we hope to avoid a series of acrimonious negotiations in which the initiative would rest permanently with overseas governments and constructive aid policies
would be at risk. If it were possible in the case of an overseas government which had asked to be relieved of the responsibility for paying pensions to
enter into an arrangement whereby it kept this responsibility against
reimbursement from United Kingdom aid funds, it would be difficult to avoid
the arrangement being called in question whenever the aid allocation was
reviewed.
15. The Foreign and Commonwealth Office and Ministry of Overseas Development
recognise that a particular difficulty might arise in the case of India.
Here only residual pensions amounting to £100,000 per year would be taken over (i.e. those of expatriate pensioners resident in India) but no
*This paragraph may be revised in the light of comments now being sought
from the Governor of Hong Kong.
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CONFIDENTIAL