TNAG-0205-FCO40-241-Pensions-policy-1970 — Page 52

(3) But we could not face the consequences of Hong Kong's

arbitrary exclusion from a scheme which could, as it was

framed, be applied to the Colony.

9. Ideally, Hong Kong's inclusion in an all-embracing scheme would be the best solution: its annual expatriate pensions bill is about £650,000, about half the bills of Malaysia and of three or four African territories. Inclusion would provide a substantial gesture of a financial nature at a time when one is badly needed to offset the damaging decisions to Hong Kong's interests we have had to take in recent years, e.g., import surcharge (1964), devaluation (1967), import deposit scheme (1969). It could help to reduce the adverse effect of our likely refusal to assist with the development of

Kai Tak airport. Looking further ahead, we may need to point to some tangible evidence (other than the garrison) of our support for Hong Kong to counteract the sense of isolation which I think will inevitably be felt if and when we enter the Common Market and Hong Kong finds that it alone or all our dependent territories stands outside, with all the consequences that this may have for its trade

with us.

10.

Conversely, the deliberate exclusion of Hong Kong from a scheme

which might otherwise apply to it could have quite serious consequences. It would greatly exacerbate a feeling that is increasingly aired in the Colony that we seek to evade our responsibility for it and neglect its interests.

The danger is that each time Hong Kong is

(in local eyes) singled out for special and ungenerous treatment there is speculation about our motives, about the Colony's uncertain future and about the possibility that we might be progressively

dissociating ourselves from our responsibilities for it.

It is,

I suppose, just arguable that a decision not to take over expatriate perisions in Hong Kong could be interpreted as an indication of our

confidence in its assured future. But it is not a case I should

care to argue; nor I imagine is it a view we would wish to see put forward because it might carry the implication that we lacked

confidencé in the future of other territories to which the scheme was being applied and might even for this reason be in conflict with our general presentation of the scheme to other territories.

/ 11.