HC Deb 18 December 1974 vol 883 cc1774-84

12.41 a.m.

Sir Paul Bryan (Howden)

I shall be visiting Hong Kong in January. I am particularly glad to have this opportunity to hear the right hon. Gentleman's views on various topical subjects before I go. As the right hon. Gentleman's noble Friend, the Under-Secretary of State, is also due to visit the colony shortly, this debate may also provide an opportunity for his colleague in this House to express the Government's attitude to Hong Kong's problems in advance of his arrival.

From time to time Hong Kong comes under a wave of criticism. Such criticism is almost always based on failure to recognise that all economic thinking there is related to one basic reality—its dependence on foreign trade.

Hong Kong is almost wholly dependent on imported food, it produces no industrial raw materials, and its domestic market is not big enough to absorb more than a small proportion of its industrial production. Food is imported from China, raw materials—textile fibres and plastics—largely from Japan. Hong Kong's processing industries use machinery imported from all over the world, and 80 per cent. of their finished products—predominantly textiles and clothing, electrical goods and plastic products—are exported mainly to the United States and the EEC.

This dependence on foreign trade leads inevitably to certain clear-cut economic policies. Due also to its origin as a trade entrepôt for China, Hong Kong believes in the virtues of free enterprise and free trade: low import duties, low taxation, unrestricted capital movements and equal treatment of locally based and foreign operations.

Firm and constant adherence to these policies has led to one of the most remarkable phenomena in history—the sevenfold growth in 25 years, on a tiny, inhospitable patch of this world, of a community from 600,000 to 4.2 million people. Let me emphasise, too, that the bulk of these 4 million people came to Hong Kong, often in the face of great hardship, of their own free will, and they remain there of their own free will.

Critics may say that these policies of low taxation and free enterprise have made the rich too rich. What they certainly have done is to attract investment from all over the world, resulting in highly efficient industry which alone can give good employment and a good living to this growing population. So these policies are the very reason for the existence of Hong Kong and its community. The prosperity that they have brought has been the main cause of the growth of the community.

This mushroom growth has in turn been the cause of huge social problems and it is to these that I should like to address my speech tonight.

I quote the Governor's speech to the Legislative Council on 16th October this year: In the last quarter century, life in Hong Kong has been dominated by the way in which the growth in population outstripped the capacity of any government to provide for residents and immigrants alike some of the basic infrastructure of life. But the problem was faced and very great progress was made. So much so that two years ago your Government concluded that the time had come when it would draw up programmes to make an end to these deficiencies forced on Hong Kong in the past and to do so within a measurable period. As a rough guide we set ourselves the time-span of a decade. I pay particular tribute to the approach of Sir Murray Maclehose, the governor, and his team to these social problems. Anyone who thinks of Hong Kong as a purely materialistic, get-rich society and nothing else should read the governor's mammoth "State of the Nation" speech. Three-quarters of this speech is devoted to the plans for the social betterment of those who live their lives in the colony.

By now these long-term plans for housing, social welfare, education, medical and health services, are well under way. I shall be specially interested to see something of them during my visit.

Housing has been one of the biggest problems and biggest achievements in Hong Kong. What has been done is unique in the Far East, but the problems remain formidable. The plans of the new housing authority look like transforming the situation within the next 10 years. I should like to know from the Minister whether these plans are affected by the current downturn in trade, which Hong Kong shares with the rest of the world.

The education services have not been able to keep up with the needs of the rocketing population. The new White Paper gives real hope that this will be remedied. I find the plans for technical education and polytechnic and industrial training particularly encouraging and necessary, especially in a society that can prosper only by consistently maintaining a technical lead in industry.

To the outsider, one of the less creditable sides of the Hong Kong scene would seem to be its crime and corruption record. This problem is being tackled with a will. There has been a real breakthrough in recruitment for the police. Police techniques and training have been improved. The idea of mobilising people in neighbourhoods to help each other and the police to deter crime seems full of promise and, if successful, might well be copied in other countries.

Crime figures nevertheless are still rising. I must warn the Minister of State that when his colleague visits Hong Kong he will meet a very strong pressure to reactivate the death penalty. One cannot generalise about the deterrent effects of capital punishment. It differs in varying societies. The people of Hong Kong seem almost unanimous in their belief that it would have a deterrent effect there.

Will the Minister say a word about the mass transit railway? This has every prospect of being one of the most remarkable engineering feats in the world. It was, therefore, naturally a disappointment when the contract was not won by the British consortium. The main reason for the success of the Japanese tender was the absence of an escalation clause. This seemed remarkable at the time but quite incredible now in the face of current Japanese inflation. Do the Japanese still maintain their original tender? If so, Hong Kong has certainly got a bargain.

The Minister will find a considerable sense of grievance among textile manufacturers regarding the EEC generalised scheme of preferences. A situation in which preferences in the British economy are given to Hong Kong's competitors but not to Hong Kong is quite impossible to explain or to justify. The exclusion of footwear has recently been removed but this is of small importance. I hope that the Government are making a supreme effort to negotiate the inclusion of textiles.

I appreciate that the Minister of State will not be able to deal with all my questions in 10 minutes tonight, but I should be grateful if those he is unable to answer orally could be answered by letter before I go to Hong Kong next month. There will be concern at the prospect of paying a higher share of defence costs, as foreshadowed in the latest defence review. The general assumption that this is a highly prosperous community well able to pay out more is not valid in today's conditions. The economy is sound. Indeed, we in this country could take some lessons in how Hong Kong has kept its economy sound in the face of worldwide inflation, shortage of material and depressed export markets. These economic difficulties coincide with quite exceptional capital expenditure necessary to carry out the social programmes I have mentioned. For these much additional finance by foreign loans and other means will have to be found. Now, therefore, would be a par- ticularly unfortunate time to be saddled with a greatly increased defence bill.

I hope that the Minister of State will enjoy his first visit to Hong Kong. I believe that what will impress him most are the people. These people, with their ability, their ingenuity, realism and persistence, are the principal asset of Hong Kong. They are the explanation for its success and its hope for the future.

12.53 a.m.

Mr. Philip Goodhart (Beckenham)

I am grateful to my hon. Friend the Member for Howden (Sir P. Bryan) and to the Minister of State for allowing me to intervene in the debate.

I wish to raise the question of the fate of refugees from China in Hong Kong. There have been reports in the Press of an agreement with the Peking Government that newly-arriving refugees from China who are apprehended by the Hong Kong police are handed back straight away to the Chinese Communist authorities. I know that the flow of refugees causes grave problems for the Hong Kong administration, but as my hon. Friend rightly reminded us, modern Hong Kong was built by refugees.

I hope that the Minister of State will confirm that we have not agreed automatically to hand refugees back for punishment at the hands of the Communist authorities from whom they have tried to escape, because such a course is inhuman and contrary to human rights.

12.54 a.m.

Mr. Hal Miller (Bromsgrove and Redditch)

As one who has spent half of the last quarter century in the service of the Hong Kong Government, may I urge the Minister to explain to my hon. Friend the Member for Beckenham (Mr. Good-hart) that it was always the practice during that period to return illegal entrants whence they came? There has always been a quota for the entry of those of Cantonese origin into Hong Kong as part of the original agreement dating back to the cession of the territory and the lease of it. Will the Minister of State confirm that the community of Hong Kong is in no shape to sustain an uncontrolled volume of immigration because of the great social problems to which my hon. Friend for Howden (Sir P. Bryan) referred?

12.55 a.m.

The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals)

I am grateful to the hon. Member for Howden (Sir P. Bryan) for raising the question of the United Kingdom's largest remaining dependency. I was glad to hear that he will be visiting Hong Kong. I am sure that as chairman of the Anglo-Hong Kong Parliamentary Group he will have a warm welcome. We look forward to hearing his impressions when he returns. It will be interesting for him to compare views with those of my noble Friend Lord Goronwy-Roberts, who is visiting Hong Kong shortly before he goes.

Hong Kong's population has grown from 600,000 in 1945 to 4¼ million today. The overwhelmingly Chinese population have chosen to live in Hong Kong of their own free will. This has been to the benefit of all. Up to this year real wages have increased by about 5 per cent. a year over the last 10 years and are now the highest in the region outside Japan.

The hon. Gentleman painted a glowing picture of the situation in Hong Kong, but it would be unwise to underestimate some of the serious problems. I am certain that he will become aware of them on his visit next month. Rapid expansion has brought congestion and grave social problems. In parts of Kowloon the population is over 400,000 to the square mile, 10 times the rate in Tokyo. There has been a grave shortage of housing. In the early 1960s there was an overwhelming squatter problem, which has even now not been completely resolved. Education and health services have had to be continuously expanded to meet the demand.

The Hong Kong Government's social programme, which started in 1972, is a 10-year programme to provide satisfactory living standards for all. It is an ambitious programme designed to meet urgent human needs.

As with so many other countries, world economic problems in the past year have posed great difficulties for Hong Kong, which is totally dependent on trade Exports are down this year compared with last year. The Government are faced with a need to raise new revenue, perhaps with new taxation, to keep the social programme going. Real wages have declined by about 12 per cent. this year, and future prospects are still doubtful. In this situation there may have to be some review and rephasing of the social programme, but the Governor, who is now on a visit to London, has confirmed that the social programme will go forward.

The hon. Gentleman asked about the housing programme. The Hong Kong Government already house 1.56 million people, which is 38 per cent. of the total population. The 10-year housing plan aims to provide housing for an additional 1.8 million. The broad objective is to provide by 1984 acceptable self-contained accommodation for every family in Hong Kong. It is a massive programme by any standard. We all hope that it will continue.

As for the health and medical programme, the main proposal in the 1974 White Paper is a target of 5.5 hospital beds per thousand population by 1983. At present there are 4.1 per thousand. This compares with about nine per thousand in the United Kingdom.

Expenditure on social welfare should increase by about 80 per cent. between 1974 and 1978. This will be through a continued and expanded public assistance scheme, disability and infirmity allowances, and emergency relief.

The hon. Gentleman referred to the new 10-year education programme announced in October 1974. The main objective is to provide by 1979 nine years' subsidised education for every child up to the age of 14. In the senior secondary classes the aim is to provide places for 40 per cent. of the 15–16 year age group by 1979. This programme will remove one of the main criticisms of the educational system in Hong Kong, that children who have completed their primary schooling at the age of 12 have been left in limbo because there were no secondary school places for them and because they could not legally start work in industrial undertakings until the age of 14.

Recently there has been interest on both sides of the House in labour conditions. Determined efforts have been and are now being made to raise general labour standards by improvements in workmen's compensation, factory safety, paid holidays, severance pay and reduced hours of work. The legislation is backed up by a much strengthened inspectorate. Much remains to be done, but much has been achieved.

The employment of children under 14 in industry has long been a problem and last November a large-scale programme began to provide every child under 14 with an identity card complete with photograph. When that is complete, I hope we shall be able to say that that is one social problem of Hong Kong that has been solved.

Two key pieces of legislation have been enacted this year: first protection of workers against acts of anti-union discrimination; secondly, severance pay for workers who become redundant or are discharged through no fault of their own. The average industrial daily wage of about £2 a day in Hong Kong compares, for example, with 200 million people in India with a monthly wage of less than £2. But Hong Kong has also had its inflationary problems. The retail price index increased by 15 per cent. in the year ending June 1974, and with wages relatively static there has been a decline in real wages. Employment, however, has continued at a high level, although there has been some decline in employment over the past 12 months—a reduction of about 28,600 jobs in industry.

There has also been interest in Hong Kong's adherence to ILO Conventions. As at 1st June 1974, 20 conventions had been declared fully applied to Hong Kong and 10 had been declared applied with some modification. For purposes of comparison with ILO Member States in the area, 31 conventions had been ratified by Japan, 18 by the Philippines, eight by Malaysia, eight by Indonesia, and 21 by Singapore.

As has been said, crime is a major factor in Hong Kong.

Mr. James Lamond (Oldham, East)

My right hon. Friend has given an impressive recital of achievements in Hong Kong, many of which I saw when I visited the area last summer. I join hon. Members opposite in their admiration of what has been achieved. What worries me is the narrowly-drawn membership of the Legislative Council. Will my right hon. Friend try to find time in his reply to say something about any ideas he has to encourage broadening the membership of the Legislative Council to include, perhaps, some people from the lower levels of working life in Hong Kong?

Mr. Ennals

That matter is under consideration. There is no doubt that it would be of advantage to Hong Kong if it had a Legislative Council which was more representative of various social groupings in the colony, though there are considerable difficulties about constitutional changes for reasons which I think my hon. Friend, as well as hon. Members opposite, will recognise.

When my hon. Friend intervened I was about to say a few words about the crime problem. The 1,500 mutual aid committees set up by the Hong Kong Government are an important element in fighting the wave of violent crime but they are not a substitute for an effective police force. Progress has also been made in the reorganisation of the police force. I am glad that the hon. Member for How-den referred to that.

Although the death penalty still exists under Hong Kong law, no sentence of death has been carried out since 1966. There is no doubt that public opinion in Hong Kong still strongly favours the implementation of the death penalty in extreme cases. This is a difficult problem which we are examining with the Governor. The Member for Bromsgrove and Redditch (Mr. Miller), in an intervention, mentioned that immigration from China into Hong Kong has increased considerably in recent years. Estimated figures for both legal and illegal immigration were 74,000 in 1973, compared with 37,000 in 1972 and less than 13,500 in 1971. The Chinese Government have since taken some steps to reduce the number of legal immigrants entering Hong Kong, but the overall figures are still a matter for concern.

The arrangements for the return of illegal immigrants to China are generally a revival of procedures which fell into abeyance in 1967. The absence of their application has in recent years led to substantial increases in illegal entry. Estimates are 10,500 in 1971, 17,000 in 1972 and 18,000 in 1973. These numbers greatly added to the Hong Kong Government's task of improving social conditions in the Colony. I can assure the hon. Gentleman that all cases are considered on an individual basis before any action to return is taken. Full account is taken of any special circumstances or cases of genuine hardship.

We are committed to seeking substantial improvements for Hong Kong in the enlarged EEC. Hong Kong already benefits under most of the Community's Generalised Scheme of Preferences. In terms of total duty remitted, only Yugoslavia receives greater benefit than Hong Kong. The scheme will be extended in 1975 to cover some Hong Kong footwear, and we intend to press for the extension of the scheme to Hong Kong's textiles in 1976.

Hong Kong will also be negotiating with the Community for the conclusion of a bilateral agreement for the regulation of Hong Kong's textile exports under the GATT Multi-Fibre Textile Arrangement. We intend to use our influence as far as possible towards the achievement of greater liberalisation for Hong Kong's textile exports in keeping with the spirit of the Multi-Fibre Arrangement.

In the short time available I have sought to answer most of the questions. I shall look carefully at HANSARD to see whether there are any questions that I have not covered. I feel that the visit of my noble Friend the Under-Secretary of State and that of the hon. Gentleman will be much appreciated in Hong Kong, and I am sure the House will be interested in such reflections as the hon. Gentleman has when he returns from the colony.

Question put and agreed to.

Adjourned accordingly at eight minutes past One o'clock.