TNAG-0205-FCO40-241-Pensions-policy-1970 — Page 14

CONFIDENTIAL

(b) Quasi-governmental servico

We are aware, of course, that we have up to now regarded the "Crown Servico principle" as sacrosanct. But sinco wo are now proposing to alter our stand on the widor "principle", I wonder if there is not also a case for spreading the net wider to include quasi-governmental personnel. If a local council, or some other body over- seas, roneges on its pensions obligations to oxpatriates, I assume that HMG would feel morally bound to pick up the bill as we have done for government pensioners in Tanzania, for example. We suggest, theroforo, that in nogotiating with oversees governments on the main issuo we should also bo propared to discuss paying the poncions of quasi-governmental personnel in return for a commutation payment by the rolovant body.

Commuted Pension Loans

3.

This paper is acceptable subject to the need to change it if the "field of proposed HMG responsibility" is expanded to take in the above points.

Exclusion of certain countries

4.

This paper is acceptable subject to the comments below:

(a) Burma

On reconsideration we think that Burma ought to bo included. The unresolved Anglo-Burmese expropriation issues are a running sore but we do not now think that this is sufficient reason to mit Burma, Burma is, course, given aid by us and there is insufficient reason to treat Burma differently from India and Pakistan.

(b) Federation of Rhodosis and Hyssland (CAPE)

It is of course arguable that federal servico wan "post-independence" and that thero are established arrangements for meeting federal pensions. Novor the loss in the view of Zombia and Malawi, federal servico pre- dated their independence and they will argue very strongly that federation was imposed on them against their will, that it was a British imposition and that the UK should therefore accept total responsibility for federal pensions. We therefore recommend the inclusion of the CAPF. Perhaps all that will in effect be necessary will be for the UK to meet any future Zambian and Malawian contributions to a deficit in the fund.

(c) Hong Kong

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The implications of accepting responsibility for othor dependent territories and quitting Hong Kong are likely to be considerable, both politically and financially, unless we can find some formula that will be acceptable to tho Hong Kong authorities.

May I leave matters on the footing that we would in principle want the dependent territories to be included in the schemo

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CONFIDENTIAL