TNAG-0205-FCO40-241-Pensions-policy-1970 — Page 50

!"

involved under these formulae; on the face of it the scheme could theoretically at some future date apply to the Colony. There might have be some embarrassment vis-a-vis China and we should, of course, to handle with care questions about our future intentions toward the Colony (but this is necessary in any event) and refuse to be drawn on whether the application of the scheme to Hong Kong did not confirm that we envisage ultimate independence as a possibility. What is likely to be a greater source of embarrassment is that such a scheme might provoke awkward speculation (even Civil Service pressure) about what will happen to expatriate (and local) pensions if the present situation of the Colony were to be altered by

force majeure.

It could be countered that this would be a

different situation for which the scheme does not and was not intended to provide. However, the danger lies in the question being raised at all, since any speculation about a Chinese take-over and unanswered questions about what will happen in that event tend to lower morale and diminish confidence. One might hope in this situation that expatriate staff would hold off, relying on assurances already given (as, for example, the Carr/Robertson exchanges of

1964).

Local officers, on the other hand, could well press their case in an acutely embarrassing way - particularly if (as I understand is being separately considered) we were to assume a responsibility for pensions of local as well as expatriate officers in South Yemen.

5.

The

Understandably there is a strong feeling in the Office that what we are prepared to do for independent or near-independent territories (some of which are quite affluent) we should do for dependent territories (many of which are far from affluent) proposals are, it seems, that we should also declare ourselves ready to pick up the expatriate pensions bill for dependent territories forthwith or, alternatively, to consider picking up the bill for a dependent territory in certain circumstances (paragraph 7 of Mr. Fairclough's minute).

6. We could, I think, happily accept an unconditional application to all dependent territories forthwith, i.e., if this included Kon Kong. There might be strong pressure from local officers that we should also take responsibility for their pensions, based on the well-founded fear that a successor Government in the Colony would fail to do so. But provided there is no breach (e.g. in South

/ Yemen)...