CONFIDENTIAL
that it reflects a lessening in the relationship between the
UK and its dependent territories. We believe that we could
meet this need with the draft line to take at Annex A.
9.
However, SAAD argue that the impact on St Helena of
abolition would be severe in economic, social and political
terms and would increase pressure on the aid budget (details
at Annex B). From St Helena's viewpoint the best solution
would be for their part of the quota to continue
indefinitely. But exempting St Helena would pose problems for our Hong Kong interests. Although we might announce
that the quota scheme was being abolished for all dependent
territories other than St Helena, we would not be able to conceal for very long (the Hong Kong press is very
persistent) the fact that in recent years only Hong Kong and
St Helena have been using the quota. We would then be thrown back on our original difficulty of explaining why in practice we were discriminating against Hong Kong.
Conclusion
10. In view of the clash of Hong Kong and St Helena
considerations we have tried to identify a possible
compromise. The best option seems to be that we should
propose to the Home Office and Department of Employment:
(a) that, in order to solve the presentational problem, we
would, as discussed informally, agree to an announcement of
a 5-year phase-out of the Quota for all dependent
territories;
(b) but, because of St Helena's unique problems and the
likely recurrent costs to HMG of abolition in that
territory, we should need to review its position after two years (ie end of 1992). This review provision need not be
disclosed outside St Helena; and the outcome of the review
would then be most unlikely to attract attention or
BAGAFJ/4
CONFIDENTIAL