HC Deb 28 April 1960 vol 622 cc545-54

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Whitelaw.]

11.39 p.m.

Mr. Ernest Thornton (Farnworth)

On 10th March, I put a Question to the Secretary of State for the Colonies asking him whether he would consider appointing an independent inquiry to investigate bribery and corruption in Hong Kong. His reply, to be found in col. 614 of the OFFICIAL REPORT, was, No, Sir. This subject is kept under frequent review —I emphasise the word "frequent"— by the Governor, with the assistance of a Standing Committee."—[OFFICIAL REPORT, 10th March, 1960; Vol. 618, c. 614.] I submitted a further Question on 30th March and asked how often the Standing Committee, which assists the Governor in keeping this matter under frequent review, had met from 1956 to 1959. From the Answer, it emerged that the Standing Committee had met eight times in 1957, once in 1958, twice in 1959 and once this year. In other words, the special Standing Committee which is to assist the Governor in keeping under frequent review bribery and corruption in Hong Kong met only three times in the two years 1958 and 1959, when bribery and corruption in Hong Kong was probably worse than ever before and the position was rapidly deteriorating. This type of misleading information is not untypical of what comes from the colonial Administration in Hong Kong. The notorious Mountain Lead Mines case is a classic example.

On 23rd March, in answer to a Question, it emerged that the Standing Committee had been broadened and now included the Attorney-General and Mr. H. D. M. Barton. I have no doubt that this broadening or strengthening of the Committee was due to the blistering attack on bribery and corruption in Hong Kong made by the China Mail on 12th February last, about which I shall have more to say presently.

The Mountain Lead Mines case calls into serious question the department of the Attorney-General in Hong Kong. To my mind, there is no doubt that Mr. Hogarth and two others were wrongly charged. In any case, they were found not guilty. In Hong Kong, there are serious suggestions that the man who should have been charged was not proceeded against because of powerful pressure on the Attorney-General's department. This Mountain Lead Mines case stinks in Hong Kong and I hope that hon. Members who are interested will do me the honour of reading the case I presented to the House about a year ago in Vol. 604, c. 1235–39, of the OFFICIAL REPORT.

I cannot go into that case at any length tonight, but the nub of it is admirably summarised by a correspondent whose letter appeared in a recent edition of the South China Morning Post. I quote what he said: The Attorney-General, with tongue in cheek, criticises the reluctance of members of the public to play their part in enforcement of the law, but the fact is that the public do not trust their government and they fear reprisals. There was the instance of the mining case a few years ago when Mr. Colin Burns exposed a high European government servant. Mr. Burns was mentioned in the House of Commons for his public-spirited action, but how was appreciation shown? Government withdrew his company's mining licence and thus rendered his investment valueless, a ruthless and vindictive action, to teach Mr. Burns a lesson for sticking his neck out. This is another Grantham legacy. I regret to say that, from what I know of the case, what I have quoted from that letter is probably substantially true.

Mr. Barton is a member of the new, broadened Committee, Mr. Barton is an honourable man. I say that in all sincerity and I in no way question his integrity. I am, however, questioning his suitability to serve on a committee of this kind and carry with him the confidence of the public, by which I mean the ordinary people of Hong Kong, including the broad masses of the Chinese, and not the small group of wealthy Europeans and Chinese in Hong Kong.

Mr. Barton is a director of the Hong Kong Electric Company, about which I shall have something more to say later. When he and his fellow directors have been faced in recent years with a conflict between the public interest and private interests they have, not surprisingly, come down on the side of private interests. The person appointed for a job of this type must clearly demonstrate that the public interest is the overriding consideration. The Committee, even though it meets more frequently than its farcical predecessor, cannot deal with the problem at issue. It does not inspire confidence in Hong Kong.

Bribery and corruption in Hong Kong is very bad indeed, it is worse than ever before. In my judgment, it has reached a critical stage and threatens the very stability of the Colony. My assessment is based on reports, newspapers and public documents and it is evident that something is drastically wrong. I have had the privilege of visiting Hong Kong on three occasions, in 1946, 1950 and 1958, and I have seen something of the deterioration in the position. I know that bribery and "squeeze" has long been associated with the Eastern way of life, but things have got to a desperate pass and the situation has reached a dangerous stage. To a large extent it arises out of the mad scramble for wealth which there has been in Hong Kong in recent years.

Mr. Brook Bernacchi, chairman of the Hong Kong Reform Club, a man of high esteem and well respected in Hong Kong, says: Corruption is bad in every big city, but Hong King is one of the worst in the world. In the Mountain Lead Mines case, to which I referred, Mr. Justice Charles is on record as saying: Corruption is all too prevalent in the Colony. I wish to quote extracts from what is a staggering article in the China Mail of 12th February: A correspondent's assertion that an impartial commission of inquiry is needed to investigate corruption will be received with wide approval. The extent of this evil, more than any other, is our greatest cause for shame. For all that is admirable in this Colony, for all our dazzling prosperity, the great achievements of Government and the genuine hard work that has gone into making Hong Kong the place it is today, corruption is the millstone around our neck, dragging us down and down. It is impossible to exaggerate its incidence and perhaps the only reason Government could offer for not holding a public inquiry is that the resultant scandal and shock would rock Hong Kong to its foundations. The correspondent is quite right when he says that Government could never successfully carry out such an investigation for there are few who would dare to probe it to its true depths … At its highest level fortunes are passed over for favours, and at its lowest the odd dollar or so as 'tea money.' It concludes: But perhaps Hong Kong needs the shock that a truly impartial investigation could give. Perhaps we have been telling ourselves how good we are for too long And it would be a change for us as well as others to know how really rotten we are. Perhaps only then will Hong Kong be driven by shame and desperation to work out useful methods of correction. That is one paper. It is confirmed by the Hong Kong Tiger Standard on Tuesday, 22nd March: While there are some ugly black stains on the record of a handful of our top firms which have extensive contacts with the public, no private business house of any size has within its staff structure an organised system of corruption as it exists today within the Government. To most Hong Kong residents, unless he is blessed with the innocence of a child, corruption in certain sectors of our civil service is an open secret. The Catholic Sunday Examiner said: Corruption in the form of squeeze goes down to the lowest rank of Hong Kong citizens … but it is essential that reform should begin at the top even if necessary in the most august ranks. I wish to say a few words about the Electricity Supply Commission's investigation and report. This investigated the Hong Kong Electric Company and the China Light and Power Company. This is not a story of corruption but it is far from being a story of probity and upright commercial and business dealings.

These are private monopolies and they have a record of high charges and huge profits. In 1946–58, their retained and distributed profits came to .83d. per unit sold, averaged over the whole period. In 1958–59, the United Kingdom Electricity Authority price per unit for interest payments and consolidated surplus was equal to.27d. If that Authority had charged on the basis of those in Hong Kong it would have made a consolidated surplus last year of £150 million more than it did, and over the years in question, 1946–1959, would have made £1,000 million consolidated surplus higher than it did.

Distributed profits of the Hong Kong private electricity companies over these twelve years averaged ½d. per unit and the Commission condemned the policy of charging less than the cost of production for certain industrial users. To what extent were directors of these electricity companies also directors of these preferential customers? That needs investigating.

The Commission recommended outright nationalisation and the two companies' bluff was called, because, before the Commission, they had said that either they must be left to work uninterfered with, or they must be taken over completely. I have not the time to read extracts from the Report referring to that. It is on page 31. A copy is in the Library of the House. It is a most interesting Report and I commend it to hon. Members.

Now the companies go cap-in-hand to the Hong Kong Government and ask them not to nationalise. Or did the Hong Kong Government ask them to make this request? Now there is to be a twelve months' moratorium. There is to be an informal approach to be explored to find a compromise. I suggest to the Colonial Secretary that this will provoke disquiet and suspicion in Hong Kong.

I had intended saying something about the recruitment of seamen in Hong Kong. This, I believe, is a racket. I have not the time to make any further reference to it tonight, but I hope that the Colonial Secretary will have it looked into and, if it is the racket I think it is, see that it is burst wide open.

The problem of bribery and corruption in Hong Kong cannot be dealt with effectively by Hong Kong itself. Too many people are involved, some deeply, some slightly. This is not to say that there are not people of probity in Hong Kong. Of course, there are, Europeans and Chinese. But their lot year by year is made more difficult, and in the interests of these people who find honourable dealings and clean business and administration more difficult, and in the interests of the great mass of poor Chinese who are the ultimate sufferers, I urge that an independent Commission from the United Kingdom be appointed.

Let us not ignore what has happened recently in South Korea. I have been in South Korea within the last two years, and my conviction is that bribery and corruption was more at the root of the trouble there than rigged elections. Let us remember that these things that happen in these great underdeveloped continents have a habit of spreading. I urge the Colonial Secretary to give urgent consideration to this matter. I feel very seriously about it. A critical stage has been reached and something drastic should be done, emanating from this House which has the ultimate responsibility.

11.56 p.m.

Mr. Edward du Cann (Taunton)

I am grateful for the opportunity of intervening shortly in this debate. In view of the fact that there is so little time I will speak directly to the point at machine-gun speed.

I have had the opportunity to visit Hong Kong twice privately during approximately the last twelve months. I have many Chinese and European friends there, in Government and outside. I am glad of the opportunity to pay tribute to both these sections of the community in Hong Kong for the tremendous amount of social work that they are doing. It is true that much remains to be done, but much has been done, and it is right to point out that this work has not gone unnoticed or unregarded in England.

It is plain, for all that the hon. Member for Farnworth (Mr. Thornton) has said, that the leading businessmen and Civil Servants in Hong Kong are scrupulously honest and above suspicion. It would be quite wrong if it were thought that we in this House in any way cast aspersions on their character. Private enterprise, too, has done a remarkable job of development in Hong Kong. Had if it is the opinion of the House that standard of living would be very much lower than it is today.

But there is some corruption, and there may be many reasons. Perhaps it is inadequate laws, perhaps the tradition of the East, perhaps many things are responsible, human weakness among them. But it is the opinion of the House that if corruption exists, even in the slightest degree, it must be rooted out.

The hon. Gentleman rightly referred to the Committee established by the Government in Hong Kong. That has been strengthened not only by the appointment of the Attorney-General as chairman, but by Mr. Barton's appointment, by the appointment of a leading Chinese member of the community, by the appointment of the Establishment Officer and the Deputy Commissioner of Police.

I regret, with great respect to the hon. Gentleman who, I recognise, is completely sincere, that he has attacked Mr. Barton. Mr. Barton has the respect of Chinese and Europeans alike because he has done much officially and unofficially to promote the welfare of the citizens of Hong Kong. I believe that the members of the Committee are suitable people to look into the causes. I have the terms of reference and they are broad. I hope the Colonial Secretary will make it clear that the Committee has his fullest support and will appeal to the people of Hong Kong to give it their support. I hope that he will also make it clear that he will watch the situation and not hesitate to intervene if necessary. That is the proper way to deal with this matter.

I have heard the argument used that if commercial people accept presents in the normal course of business, why should not civil servants. I hope my right hon. Friend will make it clear that such an argument has no sanction whatever from official quarters. We should be determined to root out corruption if and when it exists.

12 m.

The Secretary of State for the Colonies (Mr. Iain Macleod)

I am very glad that my hon. Friend the Member for Taunton (Mr. du Cann) intervened in the debate. I thought that he said more in four minutes than the hon. Member for Farnworth (Mr. Thornton) did in the whole of his speech. When an hon. Member puts on the Order Paper of the House of Commons a subject for debate like bribery and corruption in Hong Kong, it is up to him to produce the facts to back up his assertions. There is a reason why, in my view, this duty—which has not been discharged by the hon. Member—should weigh more heavily upon him. He has many times been to Hong Kong; he is a leading spokesman of the Lancashire textile industry, which has often found itself in conflict with the interests of Hong Kong, and he can never find anything good to say about Hong Kong. Is he, therefore, the detached, analytical observer of the Hong Kong scene that he would like to put himself forward as?

Mr. Thornton rose—

Mr. Macleod

I do not intend to give way.

Does it not occur to the hon. Gentleman, sometimes, that perhaps his Lancashire spectacles rather blur his vision and make him distort the view? At least, there is a special responsibility on him, which he has failed notably to discharge tonight, to be scrupulous in buttressing with facts any case that he chooses to put forward, in view of his own interests.

I wish to deal with the situation in Hong Kong as I see it. Let me make it abundantly clear that it is no part of my case to argue that there is no corruption in Hong Kong; indeed, the size and even the existence of the anti-corruption branch in Hong Kong proves that up to the hilt. Of course, it is true that practices which, if a Government servant were involved, would amount to corruption, are, unhappily, commonplace in Hong Kong. The general prevalence of these practices is one of the greatest difficulties the Government must face in combating corruption in public service.

I entirely agree with my hon. Friend's point that it is essential that the public service should accept for itself higher standards than those that might prevail outside it. But it is not easy, in the circumstances prevailing in Hong Kong, to maintain the standards for which I am certain that we must strive.

In my view, the case for a commission of inquiry falls to the ground because no facts are put forward to justify it. But I do not rule it out, if the hon. Member will produce evidence. I have read all the evidence to which he has referred, in the newspapers in Hong Kong. I have all the cuttings to which he has referred, and many more. So, because he has failed to put forward the criteria for a commission of inquiry, I will say what I feel the requirements should be. I would order a commission—or, rather, the Governor would; it is his responsibility rather than mine—if there were in Hong Kong flagrant cases of corruption, well known to the public, where people had escaped punishment because of the inadequacy of Government control, or if there were positive evidence of a substantial increase in general corruption.

The hon. Member kept saying that things are getting worse; but I do not believe that. Nor do the sources that I regard as particularly well-informed on this matter in Hong Kong. The third requirement would be that there should be practical ways, under existing legal principles, by which control of corruption could be tightened.

If I or the Governor were satisfied on all those matters I would gladly arrange for a commission of inquiry. But the Governor does not feel that these criteria have been met, and, therefore, he does not feel that there should be such an inquiry, and I wholly support him in this. It may be that the Governor, who is a man of very wide experience in these matters, is influenced to some extent by his experience as Governor of Singapore in 1957, because he appointed such a commission following the kind of Press comment to which the hon. Member has referred on the subject of corruption, and the report of the commission made it clear that, despite the invitation to the public to furnish information, very little material was forthcoming on which the commission could go to work, and the cases which it investigated showed that the allegations of corruption made could not be substantiated.

There is no question here, therefore, of the Government being reluctant in any way to investigate these matters. This is a first-rate Administration, very competently run, and I think that my hon. Friend dealt faithfully with the nasty little suggestion which the hon. Gentleman managed to get into his speech against a member of the new Committee. He is a man of great integrity in Hong Kong, and no suggestion should be made—

Mr. Thornton

I was at pains to say that he was an honourable man; that he was a man of the greatest possible integrity, but that he was faced with a conflict of interests which would not carry public support and confidence.

Mr. Macleod

Precisely. I heard what the hon. Gentleman said. He started by saying that this man was an honourable man, and he went on to make what I say again was an extremely nasty and unfortunate suggestion against a man—

Mr. Thornton

It is the right hon. Gentleman's nasty mind.

Mr. Macleod

—of great probity and integrity.

Mr. Thornton

The right hon. Gentleman should answer the case.

Mr. Macleod

The hon. Gentleman made a point about the number of times the old Committee met. I think that this is a very poor measure of its activity and that it does not bear any relation to the campaign against corruption that is being waged by the anti-corruption branch of the police force.

The hon. Gentleman drew attention to the fact that the Committee met only once in 1958, but that was because at its meeting in 1957 it made a series of policy recommendations on which the Government subsequently worked, and I believe that the new Committee will command considerable confidence in spite of what the hon. Gentleman has said about the Attorney-General and members of it, and I believe that this is the right way of going to work.

It is quite clear that there is no complacency whatever in the Hong Kong Administration. It is quite clear that it is eager, if real evidence is furnished, to try to root out corruption in Hong Kong, particularly in the Government service. If the hon. Gentleman likes to produce real evidence, the Governor will be most anxious to study it, and, if it is adequate, he will not necessarily be averse to setting up a commission of inquiry.

Mr. Thornton rose—

Mr. Macleod

I cannot give way; there are only seconds left.

The hon. Gentleman has tonight conspicuously failed to produce the evidence which the sort of charges that he has made make it incumbent on him to produce.

Mr. Thornton

The right hon. Gentleman has failed to reply to them.

Question put and agreed to.

Adjourned accordingly at eight minutes past Twelve o'clock.