TNAG-0266-FCO40-302-Responsibility-of-UK-for-colonial-expatriate-pensions-of-Hon-1972 — Page 36

WOULD 4. THE REACTION OF THE PUBLIC SERVICE AS A WHOLE WOULD ALMOST CERTAINLY BE ADVERSE. IT WOULD BE SEEN AS ANOTHER FAVOURABLE AND DIVISIVE CONDITION FOR EXPATRIATES. IT WOULD RAISE THE WHOLE ISSUE OF THE POSITION OF THE PROTECTION OF LOCAL OFFICERS PENSIONS SHOULD THERE BE NO VIABLE HONG KONG GOVERNMENT TO MAKE PAYMENT.

5. I THINK THAT PUBLIC REACTION. WOULD BE SOMEWHAT SIMILAR TO THAT OF THE LOCAL PUBLIC SERVICE SEMI COLON AND THE PROPOSALS WOULD BE SEEN AS A FURTHER WEDGE BETWEEN THE LOCAL AND EXPATRIATE ELEMENTS OF THE SERVICE. IT IS POSSIBLE THAT SOME SECTIONS OF THE PUBLIC MIGHT REACT WITH THE SUGGESTION THAT

IF HMG WERE TO TAKE RESPONSIBILITY FOR PENSIONS FOR EXPATRIATES, THAT THEY SHOULD TAKE ON THE RESPONSIBILITY FOR THE COST OF OTHER EXPATRIATE CONDITIONS OF SERVICE (E.G. EDUCATION ALLOWANCES).

6.

WE SEE CONSIDERABLE DIFFICULTIES IN THESE PROPOSALS, THE ARGUMENT CONCERNING PENSIONS FOR LOCAL OFFICERS SEEMING TO US PARTICULARLY COGENT. IT IS DIFFICULT TO SEE HOW SUCH A PROPOSAL COULD, IN ANY CASE, BE FINANCED BY HMG SINCE THERE ARE NO AID FUNDS MADE AVAILABLE TO HONG KONG SEMI COLON THERE IS NO SUM TO TAKE INTO ACCOUNT FOR OFFSETTING THE COST OF THE ASSUMPTION OF THIS

RESPONSIBILITY. FURTHER,

FURTHER, IF HMG WERE TO ACCEPT THIS RESPONSIBILITY THE TREASURY WOULD HAVE TO BE CONSULTED IN RESPECT OF EXPATRIATE

THISWOULD SALARIES BECAUSE OF THE RESULTANT PENSION COMMITMENTS.

BE UNACCEPTABLE FROM OUR POINT OF VIEW BECAUSE IT MIGHT WELL LEAD TO DIFFERENTIAL TREATMENT OF LOCAL AND EXPATRIATE SALARIES, AND WOULD LOCALLY BE REGARDED AS A DEGREE OF UNITED KINGDOM INTERVENTION IN DOMESTIC AFFAIRS, WHICH WOULD CAUSE SUBSTANTIAL POLITICAL DIFFICULTIES.

7. THERE HAS BEEN LITTLE TIME FOR DETAILED CONSIDERATION OF THESE FAR REACHING PROPOSALS, BUT MY INITIAL REACTION IS, FIRST, THAT THEY CARRY THE SEEDS OF FAIRLY WIDESPREAD EMBARRASSMENT, BOTH IN HONG KONG AND ELSEWHERE, IF APPLIED AT ALL, AND SECONDLY THAT IF THEY ARE CARRIED FURTHER HONG KONG SHOULD BE OMITTED FROM THEIR SCOPE. I WOULD HOWEVER BE GRATEFUL TO BE KEPT CLOSELY IN TOUCH WITH DEVELOPMENTS.

GOVERNOR

SENT 1128Z/3 FEBRUARY RECD 1128Z/3 FEBRUARY