Recommendation

CONFIDENTIAL

2.

I recommend that we agree.

SAAD agree.

If Ministers

are content we shall write accordingly to Home Office and Department of Employment officials on the lines of the

attached draft.

Background and Argument

C 3. The background to this subject is in my submission of

25 April and the subsequent minutes from Sir J Coles and

APS/Mr Garel-Jones.

4. Both the Home Office and Department of Employment would

prefer a shorter phase out but are prepared settle for

abolition over 4 years, provided that it begins with a cut in the 1991 figure. They accept the need to address the

particular circumstances of St Helena in a sensitive way.

They do not object to the review of the effects of

abolition. But they do not want it to be announced for the

present, because they believe such an announcement would

encourage pressure groups to push for further concessions

for Hong Kong.

5. I believe this is the best deal we are likely to get and that we should accept it. From Hong Kong's perspective it is good news; instead of their quota finishing in 1990 as had been agreed, it will continue for a further 4 years

(from 125 places in 1991 diminishing by 25 per year to 50 in the final year 1994). SAAD believe that the 4 year phase

out is manageable from St Helena's point of view also. The Home Office/Department of Employment proposals provide for 45 places in 1991 falling to 30 in 1994; this is actually slightly better over the 4 year period than our proposal (which envisaged a annual reduction of 10 places).

Furthermore SAAD are encouraged by the willingness of the

POPAJK/2

CONFIDENTIAL

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