CONFIDENTIAL
3.
(d) The Governor was opposed to the retention of this Scheme so long as beneficiaries counted against the 50,000 ceiling.
We pointed out that:-
(a) The Secretary of State had announced the Scheme
on 20 December.
(b)
B
4.
(c)
The business community continued to see attractions in it (see BTC Hong Kong Telno 59). Lord Sharp had written to Ministers to remind them that he had specifically supported the Scheme in the House of Lords, and had defended it to Prime Minister Li Peng during his recent visit to China.
The Scheme provided firms willing to make use of it with a guaranteed method of obtaining citizenship for some of their staff. No other part of the package gave such a guarantee.
It was agreed that the arguments were essentially political on both sides. The disadvantages which the Home Office saw in the handling of the Bill if the Scheme were kept would have to be weighed against the potential loss of support from British business.
5.
The Home Office need to have the point resolved so that they can get ahead with the drafting of the revised OD(K) paper. They will recommend to the Home Secretary that he have a word with the Secretary of State in the margins of Cabinet tomorrow, 8 March.
6.
The Secretary of State will want to reach his own conclusions. For what it is worth, my own view is that, given the opposition of the Home Secretary and the Governor, it would probably be best to concede the point, on the understanding that if there is strong pressure from British business the ASS, or something like it, could be reintroduced at a later stage. Home Office officials themselves put this idea forward, though they accepted that it would be untidy to announce a scheme, drop it and then put it back again.
Entrepreneurs
7.
Home Office officials are working on the outlines of a separate scheme for entrepreneurs, as the Prime Minister wishes. The criteria would include the capital employed, numbers on the pay-roll etc. The Governor would include these details in his recommendations to the Home Secretary. We discussed a figure for this category. I said it should be
/at least
2
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CONFIDENTIAL