TNAG-0266-FCO40-302-Responsibility-of-UK-for-colonial-expatriate-pensions-of-Hon-1972 — Page 12

CONFIDENTIAL

D. The Treasury's Proposals

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8. The Treasury wish to adopt what they call a "more

pragmatic" approach. They propose that, when requested by

an overseas government, we should be willing to reimburse

the cost of pre-independence pensions by grant-aid which

would be offset against our allocation of aid to the country

in question. The essential differences between the Treasury

and O.D.M. proposals are that:

9.

(a) O.D.M. lay down ground rules for the takeover and .

would state our willingness to take over pensions on

request, the cost to be "taken into account" in

determining aid allocations.

The Treasury prefer

ad hoc negotiation country by country as need arises,

the cost to be "offset" against aid allocations.

(b) O.D.M. propose that H.M.G. will ultimately pay

these pensions; the Treasury propose that the overseas

government should continue to pay and be recompensed by

grant-in-aid.

It seems to us that the Treasury proposals would mean,

that the initiative would always rest with overseas

governments. It is likely that each successive negotiation

would result in overseas governments trying to reach a more

favourable settlement than their predecessors were able to

achieve. Such negotiations are likely to be acrimonious.

They may well involve many countries over many years.

countri

would be a constant source of irritation to our relations

with Commonwealth countries.

This

CONFIDENTIAL

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