TNAG-2367-FCO40-3440-British-Dependent-Territories-(British-Overseas-Territories)-1991 — Page 51

fate through the abolition of the Quota. Moreover, since

Ministers have approved the introduction of income tax for

St Helenians working on Ascension Island, the loss of the

Quota combined with this new tax would be seen as unfair and

oppressive. Over the proposed 5 year period of phasing out

the Quota the cumulative total cost to the Island is

estimated at about £300,000 through unemployment payments

and lost remittances from the UK. Thereafter the annual

cost could be around £100,000. These are costs which HMG

will have to offset.

4. If, therefore, we agree that proposals as they now stand, we shall suffer political difficulty (and possibly unrest) on St Helena and budgetary costs. This points to treating St Helena differently.

BAGAFJ/9