TNAG-2367-FCO40-3440-British-Dependent-Territories-(British-Overseas-Territories)-1991 — Page 101

CONFIDENTIAL

11.

From St Helena's viewpoint the best solution would be for their part of the quota to continue indefinitely. But

it is clear that the Home Office would not tolerate that.

Once the Hong Kong part of the quota was abolished, it would only be a matter of time before the rest of it went as well.

We therefore agreed with SAAD that we should seek as large a

concession as possible to compensate St Helena. Accordingly we floated the proposal with Department of Employment and

Home Office officials that the phase-out period should be

extended to five years. Officials in both departments

believe that their Ministers would be prepared to pay this

price for the abolition of the whole quota.

12. The Hong Kong Government was already resigned to the

abolition of the quota in 1990. The additional advantage to them of a five year phase-out period is that it will defer

abolition until much closer to 1997. It also gives St Helena a little longer to work on their plans for building

up the tourist industry and other prviate sector developments on the island to generate substitute

employment. We and SAAD are confident that on this basis

the political impact of abolition in both territories would be manageable. The Governor-designate of St Helena is content with this approach.

BAGAFJ/5

Johann

J C Morris

roso

CONFIDENTIAL