CONFIDENTIAL

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importance to the UK and to British interests (paragraph 4.3).

Detailed statement on the value of Britain's economic stake in Hong

Kong.

Nationality

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- In accordance with the Committee's recommendation that the

Government should offer assurances to key personnel in certain

specific categories (paragraph 4.19) Secretary of State announced on

20 December that the Government proposed to introduce legislation to

give full British passports to 50,000 key people and their

dependants, without their having to leave the territory in order to

qualify. Further details were set out in the British Nationality

(Hong Kong) Bill which was published on 4 April and had its second

reading on 19 April.

As Committee recommended, Government have taken every available

opportunity to seek to promote international support for Hong Kong (paragraph 4.15). For some months now, we have been encouraging our

friends and partners to follow our lead in providing assurances to

Hong Kong people to give them the confidence to remain in the

territory. Several countries, including Singapore, France, the

Federal Republic of Germany, Belgium and Luxemburg have already

found ways to give Hong Kong people assurances without their having to leave Hong Kong.

A number of other countries are still

considering what action they can take to assist, including those

whose nationality laws do not permit the offer of citizenship.

Australia and Canada are examining the scope for flexibility within their existing immigration regulations. The possibility of new

immigration arrangements for Hong Kong is also under consideration by the US Administration and there have been expressions of support

in the US Congress, including a proposal that the immigration quota

from Hong Kong should be increased to 20,000 a year beneficiaries

should be allowed to defer settlement in the United States until the

year 2002.

Noted Committee's recommendations that Section 4(5) of the British

Nationality Act 1981 should be used more generously in the future.

But as the Committee themselves pointed out, the then Home Secretary

CATAAU

CONFIDENTIAL

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