TNAG-0266-FCO40-302-Responsibility-of-UK-for-colonial-expatriate-pensions-of-Hon-1972 — Page 64

CONTEDENTIAL

within the Aid Programno, vhich is expected to rise from

£227 . to 8245 m. in the financial year 1971/72.

4. This O.D.H. proposal would remove a long-standing irritant

in our relations with independent Commonwealth countries a4d a

threat to the conduct of sensible and constructive aid policice.

There is growing pressure on the U.K. to accept responsibility

for the payment of expatriate pensions, The most serious for

thic has taken is in Tanzania which repudiated hor

obligations with the result that we were obliged to cut off

aid. The Kenya Government has "decided" to cease the payment

of pensione to expatriates and has asked for discussions 1. the

context of the next round of aid talks. Other countries,

possibly less dependent on our aid or believing that we will

submit to pressure, are likely to follow either Tanzania's or

Konya's cxample sooner or later. Although our present position

hoo a perfectly logical basis and has been hallowed in

independence agreements it is an issue which rouses many strong

emotions in many "new" countries which find themselves forced

to foster an emergent and often extreme nationalism,

amrovements desired by F.C.0.

5. While there are a number of improvements we want to see in

the proposals as at presont drafted, particularly those relating

to dependent territories, this does not affect our support for

the scheme as a whole. It is in our view esscntial to find a

way of dealing with pension problems because of the potential

clicct on aid policy. The improvements we would like to dwe are

Pollows:

1) Deprudent Territories and Associated States.

C.D.l's proposals (paragraph 42) are not acceptable

COFIDENTIAL,