CONFIDENTIAL

assurances available for the GAS will be allocated between occupational groups according to a formula based on their respective emigration rates over the past two years, and the

overall size of the group.

15. HKG would strongly prefer all 31 occupational groups

to have some allocation, So that all sectors of the

economically active population would be eligible to apply

for British citizenship and they argue that any distribution

which excluded whole occupational groups or particular

Occupations within these groups would be divisive and

difficult to present in Hong Kong. In their view, all sectors have some 'key' people. They would, however, apply a subjective "modification factor" to reduce the number of

places which would otherwise be allocated to the groups with

a relatively low skill level, to take account of the ease

with which those leaving would be replaced. Their

proposals, set out in Annex C2, show the suggested

allocation after a 0.25 modification factor has been applied

to the five groups at the bottom of the list.

16.

Although over 2 million (73%) of Hong Kong's working

population fall within these five groups, and HKG's proposals would allocate them just 12% of the places, I am

deeply concerned about any of the assurances going to lower

skilled groups. We have offered assurances with the

intention that they would go to genuinely key people who are

needed in Hong Kong but who would also bring benefit to the

UK if, contrary to expectation, they decided to come here.

Although it would mean substituting our definition of who

are key personnel for the Governor's, and would effectively

rule out some employees of British concerns (PSA, British

Trade Commission, British Council and the Garrison

below. I propose that we should exclude from the scheme at

least those groups with an emigration rate of 1% or lower,

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see

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