the cost of supplying all blank UK passports for issue both in the UK and at consular posts abroad have, very reasonably, made it clear that they would not wish to be responsible for the cost of what is likely to be a vast quantity of passports needed for BN(O)s in Hong Kong. The Hong Kong Government accept that the UK consular fee for the issue of a passport would have to be charged instead of their Hong Kong fee, but they have proposed that the present financial arrangement should otherwise continue unchanged, ie that they should meet the cost of the blank passports and the administrat- ive costs of the issuing operation and should retain any balance of income.
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Regulation 9 of the current Consular Fees Regulations 1981 provides that 'Moneys received in respect of fees may be applied to defray official expenses or may be applied in any other manner authorised by the Secretary of State' There appears therefore to be no reason why either the Hong Kong Government or the Home Office should bear any financial loss from the issue of BN(O) passports. Finance Department have discussed the possible financial arrangements with the Treasury. The latter have now confirmed that they see no objection to the cost of the blank passports and Hong Kong's administrative costs being met out of the revenue from the passport fees, but they would expect any surplus to be surrendered to the Consolidated Fund as extra receipts (CFERS) and not be retained by the Hong Kong Government.
g.
The UK passport fee is set at a level which will produce sufficient revenue to offset the administrative and other costs of the passport-issuing operation in the UK and at posts abroad, as
as the costs of providing non-feebearing consular services abroad to British nationals. On present evidence it is likely that this fee will be more than enough to cover the costs of the Hong Kong Government. We are asking the Governor to confirm this. I f the Hong Kong Government were to make a loss it would be difficult to argue that they should bear it and we should have to look carefull at the implications for FCO expenditure. (There are rather different arrangements covering the work which the Hong Kong Immigration Department does on behalf of HMG in issuing entry clearances for the UK. In this case UK consular fees are applied for these services, th Hong Kong Government retains the full amount of such fees and is not
We are required to account for the cost of providing the service. looking further into the basis for this arrangement.). One complicating factor is that it is at present not known how many of the BDTCs eligible to apply for BN(0) status will choose to do so. Of those who do, and obtaining a passport is to be an integral part of the acquisition of the new status, many are unlikely to travel abroad, so it is improbable that there would be a corresponding rise in the call on our consular protection services.
In view of these problems about fees we propose to submit now to Ministers on the other BN (0) passport related issues and submit
10.
/later
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