CONFIDENTIAL

Redacted under FOI Exemption S 27(1);

Not enough simply to rely on powers under 1981 British

Nationality Act or on existing immigration rules. BNA might be

sufficient to meet needs of very limited number of Crown Servants

in sensitive positions but makes no provision for private sector.

Number of key people will in excess of figure of 6000 which you

mentioned on 6 March.

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May be that some Hong Kong people could qualify to come here.

investors or under work permit scheme. But in order to gain

settlement for themselves and their families, they would have to leave Hong Kong taking their assets with them. This is precisely

the opposite of what we are trying to achieve.

As

Do not believe that our scheme will strengthen demands of other

Hong Kong people for similar treatment. Our inability to grant right of abode here to all Hong Kong people now widely accepted in

territory. In event of complete collapse of confidence, would

obviously be in totally different situation and would have to look to friends and partners for help. But we are far from being in such a situation now and our objective is to ensure that it never arises.

Not true to say that we have failed to negotiate robustly with

the Chinese on democracy and Basic Law. We pressed Chinese very hard on Basic Law and achieved significant improvements.

On direct elections, we took them to limit to what was

achieveable. Originally we were looking at only 10 directly elected

seats in 1991 and we know that this is what Chinese would have

preferred. Figure we have now announced is only 2 seats below

proposal put forward by OMELCO but 8 more than Chinese preference.

Will

Nevertheless, outcome did not go as far as we would have liked.

As I have already made clear, we therefore continue to press for a

faster pace of democratisation.

LANDT DRAGTAT

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