CONFIDENTIAL

3.

I have been discussing with the Home Office the terms of a

draft letter which the Private Secretary might send to Mr Powell in

reply to that letter. It would seek to reinforce the Home and

Foreign Secretary's minutes of 2 and 5 December by pointing out that under existing rules significant numbers of entrepreneurs/small and

medium sized businessmen, including some from Hong Kong, already

come to this country to set up job creating businesses. It would also point out that not all Vietnamese boat people are dependent on

the State and quite a few success stories. The draft is attached

(for information only at this stage).

4.

I had been on the point of recommending that a draft on these

lines should issue as soon as possible. But I have just heard

(from the Home Office) that a letter is about to issue from No 10 in

response to the minuting about British citizenship for Hong Kong

businessmen, accepting that existing legislation should not be

amended but seeking clarification of some points. Under the

circumstances, I recommend that we wait and see what that letter

contains before contributing any further comment ourselves.

CONFIDENTIAL

ARPan

A R Paul

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