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The latter figure does not allow for the effects of inflation on costs over the next 12 years, which would probably be offset to some extent by fee increases.
5.
Mr Minter suggests four alternatives for dealing with BN (0) passport costs in para 5 of his minute of 11 November.
I am strongly inclined to recommend alternative (i), ie that the Hong Kong Government should retain the whole of the fee charged, for the following reasons:
(a)
(b)
(c)
6.
if the Hong Kong Government were to retain the entire BN(0) fee, the profit over the current BDTC issuing arrangements, as at present calculated (£190,000 a year), would depend mainly upon the numbers applying. The figure of 2.5 million BN(O) applicants over 10 years is no more than a "guesstimate" by the Hong Kong Government, and a smaller actual figure could take them into a comparative loss situation;
although the HK Government will not set the fees for BN (O) passports, they will nevertheless be performing a service for HMG which we could consider as similar to those already covered by the reciprocal convention. To direct the HK Government to remit to the Exchequer such profits as acrue might lead them to review the whole scenario of services, to our disadvantage;
it would be much simpler administratively to authorise HK to retain the whole fee and bear the costs; ie to accept full financial responsibility, and to obtain their agreement to this arrangement continuing until 1997, regardless of any increase in costs or decrease in numbers of applicants arising over the period.
I recommend that we hold a meeting of all recipients of this minute as soon as possible so that we can agree upon a line to put to the Treasury.
18 November 1985
Afford
H D Marcelin
Nationality & Treaty Dept. (213-4005 CL511)
Copies (With Encs):
Mr McDougal, MVD
Mr
Mr Hill, HKD
Miss Kaye, Consular Dept. Mr Escritt, Finance Dept Mr Minter, Finance Dept
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