TNAG-0266-FCO40-302-Responsibility-of-UK-for-colonial-expatriate-pensions-of-Hon-1972 — Page 33

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£25-£35 million and to take their chance in negotiations aimed at offsetting it against their ordinary aid. Hong Kong might well complain if it were

excluded. Moreover, by announcing in general terms our readiness to assume

responsibility for expatriate pensions we should be inviting claims from countries which have shown no disposition so far to upset existing arrangements. It is relevant that out of some 30 overseas Governments who are potential claimants, those which are currently showing dissatisfaction with the present

arrangements are only a few in East Africa,

18. The Treasury conclude from this that further consideration should be

given to a more pragmatic and limited approach to the problem without radical change in our long-standing policy on overseas pensions. While the attitude of the East African Governments may be understandable, there is nothing in their arguments which invalidates our principle. And while we cannot prevent any Government from refusing on political or other grounds to continue to

finance pension payments to expatriates, this does not mean that we need to undermine the principle that successor governments are responsible for such payments in order to deal with such situations. It is common ground among Departments that we should not respond to such an approach in any spirit of retaliation or retribution, and that the cutting off of aid is in general undesirable. The Treasury agree that when requested we should be willing to provide grant aid to finance expatriate pensions in respect of pre- independence service, and if necessary also compensation and commutation loan

repayments, while offsetting these costs against the country's ordinary aid

allocation. To judge from the statement by the Government of Kenya quoted

in paragraph 8 above, this is all they would expect viz. an agreement to

differ on the principle and to come to terms on the offset of "pension aid"

against other aid.

19. The Treasury therefore consider that instead of the proposed change of

policy we should negotiate with Kenya an agreement on the lines they have

suggested, to take effect from April 1971. We would of course make public

the agreement reached, and in so doing could indicate that we should be

willing to deal in a similar way with any other country desiring the same

arrangement as Kenya. We could consider some renewal of aid to Tanzania.

No doubt Uganda and perhaps some other African territories would seize on the

opportunity to follow Kenya, and we would offer them no more and no less than

-Spee

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