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5. We could not of course expect that the Hong Kong Government would provide the facilities and staff for the issue of passports and not receive any payment for this service. The Home Office, who at present meet the cost of supplying all blank UK passports for issue both in the UK and at consular posts abroad, have justifiably made it clear that they would not wish to be responsible for the cost of what is likely to be a vast quantity of passports needed for BN(0)s in Hong Kong; or if they were to have that responsibility they would wish to put in early PESC estimates for the necessary funds.
6.
It would seem reasonable that the income from fees collected for the issue of BN (0) passports in Hong Kong should be used to offset:-
(a) the actual cost to the Home Office (or possibly to the FCO if this would simplify the operation) of the blank passports; and
(b)
the administrative costs to the Government of Hong Kong of the passport issuing operation.
Regulation 9 of the Consular Fees Regulations 1981 provides that "Moneys received in respect of fees may be applied to defray official expenses or may be applied in any other manner authorised by the Secretary of State".
7. Passport and consular fees collected under the Consular Fees Order, whether in the UK or abroad, are I believe credited to Appropriations in Aid, but there is an off-setting operation providing financial cover for the general cost of providing all consular services overseas and the level of our passport fee is fixed with this in mind. There seems no reason however why fees from BN (O) passports issued in Hong Kong should be taken into account in this context. Although consular protection work (at certain posts quite considerable) is carried out by our posts for Hong Kong BDTCS in third countries, it has been accepted in the past that the cost to HMG is more than offset by the services the Hong Kong Immigration Department provide in dealing with UK entry clearance work in Hong Kong. I shall be grateful for any comments which Finance Department may have on these points.
8. Before any proposals for a financial arrangement could be made to the Home Office and the Hong Kong Government, I think we need to know what fee the latter currently charge under their Fees Ordinance for the issue of a passport and what proportion of this charge is estimated to be the administrative cost of the passport issuing operation. Should it prove that the latter administrative costs are higher than our own passport fee and that there would therefore be a shortfall, it may be that Hong Kong could in each case collect a handling fee in addition to our consular fee in order to make up the difference, provided the total
/cost of