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discussed by Ministers and Mr Scott therefore wrote on 15 January to Mr Fitzgerald and Mr Pickford at the Department of Employment to record our acceptance of the revised quota and to seek confirmation that the other Departments agreed. This was duly given.

5. The Governor is seeking the retention of the Hong Kong quota at 300 per year. I suggest it must be accepted from the outset that so soon after acceptance there are no grounds for us to seek Departments' approval to an increase in the size of the quota for the dependent territories. However, the table in Mr Le May's minute (below) indicates that it might be possible to agree to the Governor's request because the other territories have taken less than 100 vouchers between them for the past two years. I do not recommend this course for the following reasons:

6.

a.

The declared aim of the Government's

policies is to curtail large-scale immigration. The extent of the reduction to be effected in Commonwealth immigration has not yet been revealed publicly. Some areas (e.g. the West Indies) are likely to be resentful over the cuts when they are known. For external and internal political reasons the cuts will have to be seen to affect all areas. (So far the only territory for which Ministers have agreed there is to be no change is Gibraltar and here special factors obtain.)

b. There could be political and economic pressures

which produce changes in the pattern of

immigration from the other dependent territories; e.g. the Seychelles or the Gilbert and Ellis Isles. where there is chronic over population. Further, since under the new work-permit scheme, unskilled and semi-skilled immigration from independent Commonwealth countries (except Malta) is virtually to cease, employers seeking this type of worker may attempt to attract more immigrants from the dependent territories, who will remain eligible for any type of employment.

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I think the best we can do provided the Home Office and Department of Employment agree (and you may care to sound out Mr Bohan and Mr Covington informally), is to consider increasing the number of permits to be available to any one territory to 240 within the overall ceiling of 400, and subject to annual review. You may wish to consult Mr Scott on this possibility and if he agrees, we can formally approach the other Departments.

7. The Governor supports his case for the retention of the quota at 300 (for which only those people in Hong Kong who are citizens of the United Kingdom and Colonies are eligible) by citing the larger numbers who, having no claim to our citizen- ship, obtain on the strength of their Certificates of Identity work permits under the existing scheme for aliens. But this situation, too, is likely to change. You will recall that

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