CONFIDENTIAL

11. Against this extremely worrying background I have asked

my officials to consider what the financial implications for

the Government are likely to be. Given all the

uncertainties, it is impossible to give a precise indication at this stage. But I believe that it may be necessary for us to contribute in one or more of the following ways:

(a) immediate emergency relief: we can expect requests for direct assistance to Hong Kong (either direct or channelled

through UNHCR) to provide additional emergency accommodation

(tents, conversion of barracks and other buildings into

temporary accommodation for new arrivals). In the very short term, the Hong Kong Government may be able to squeeze the required funds out of the money that has already been voted. But in due course they will need to revert to Finance Committee, with unpredictable results. In any case, there will be strong humanitarian and political arguments for HMG to respond quickly and sympathetically to appeals for emergency relief, should the need arise.

(b) additional permanent accommodation: in the slightly longer term, it will be necessary to build additional

permanent accommodation (ie purpose-built detention

centres). One such centre (the Whitehead project) is under construction at a cost of £13 million and will come on stream in September. That will, however, be insufficient if the arrival trend continues at its present level. now a distinct possibility that, if further detention centres are required, HMG will have to meet part, if not all, the costs. There will also be a need to find and train

additional staff to man such centres.

There is

/ (c)

CONFIDENTIAL

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