Commons Sitting of 5 December 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  LOCHMADDY AND EAST LOCH TARBERT (IMPROVEMENT OF PIERS ETC.) ORDER CONFIRMATION BILL
  Read the Third time, and passed.
  BRITISH RAILWAYS ORDER CONFIRMATION BILL
  Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to British Railways: And the same was read the First time; and ordered to be considered upon Tuesday 11 December and to be printed. [Bill 18.]
Oral Answers to Questions
  SCOTLAND

    Teacher Training
    Mr. Maclennanasked the Secretary of State for Scotland what proposals he has for increasing in-service training for Scottish teachers.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): Prime responsibility in this area rests with education authorities. I have made resources available for training related to the standard grade and 16 to 18 action plan developments, and I am offering specific grant-aid towards in-service training in certain other priority areas. I have authorised staffing levels in colleges of education which will enable them to contribute fully to in-service training programmes.
    Mr. Maclennan: Will the Government safeguard academic prospects for the pupils who have already started standard grade courses by substantially improving the conditions of service set down in the post-Houghton review of 1975? Will the Minister include those proposals in the terms of reference of the independent pay review for which he has been asked?
    Mr. Stewart: A specific question on the independent pay review has been tabled. I emphasise that we have set out a full strategy for in-service training with the education authorities to make the best use of the resources of the centrally funded development officers and of training organisations in relation to the 14 to 16 changes and the action plan. I deplore the fact that some teachers have deliberately not taken advantage of the in-service training.
    Mr. Bill Walker: Does my hon. Friend accept that some of the in-service training will be carried out in the schools? Does he agree that thought should be given in the
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    management of the school programme to allowing one day a week or one day a month for training, because that would not be disruptive over a long period and would be manageable? Does he accept that such an arrangement could make a major contribution to solving the problem?
    Mr. Stewart: I note my hon. Friend's comment. My right hon. Friend the Secretary of State announced that he was prepared to allow reductions in the school year of up to 10 days for the preparation of in-service training.
    Mr. Strang: Do the Minister and the Secretary of State not understand that having to train in the evenings and at weekends is only one aspect of a host of factors, such as spending cuts and inadequate remuneration, which have driven teachers to strike today? When will the Government address themselves to the real problems in our schools, or is the strike the beginning of a period of disruption?
    Mr. Stewart: I certainly hope not. Such disruption does the teachers' general standing in the community no good. Expenditure per pupil in Scotland is now at its highest ever real level.
    Mr. Wallace: As the hon. Member for Edinburgh, East (Mr. Strang) said, in-service training is but one aspect of many justifiable grievances of Scottish teachers. Will the Minister guarantee that the standard grade examinations will go ahead as planned for 1986?
    Mr. Stewart: I hope so. We are committed to the standard grade changes. These changes have been widely welcomed in principle by the teaching profession as being in the interests of Scottish education.

    Local Government Expenditure
    Mr. Hendersonasked the Secretary of State for Scotland if he will list the categories of local government expenditure in Scotland which require his prior approval.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): Local authorities may not incur any liability to meet capital expenses without the consent of my right hon. Friend. As regards current expenditure, local authorities generally speaking do not require the prior approval of my right hon. Friend.
    Mr. Henderson: Is my hon. Friend aware that there is deep resentment among my constituents at the extravagant way in which Fife regional council is throwing about ratepayers' money in support of Arthur Scargill's political strike, ranging from expenditure on Christmas parties to substantial payments and loans to striking miners and their families? Some of that provision is wasteful because, if it were not paid for by Fife regional council, it would be paid for by the DHSS. Is my hon. Friend aware that many of my constituents feel that if those payments are not illegal they should be made so? Is my hon. Friend aware that urgent action is needed to protect the interests of ratepayers?
    Mr. Ancram: My hon. Friend makes a valid point. Obviously, it is up to each authority to satisfy itself that it has the power to make those payments. It is extraordinary that authorities—not just my hon. Friend's authority—which are constantly claiming that they do not have sufficient resources to service the needs of their areas can make that extra expenditure. The ratepayers are being asked to subsidise the failure of responsibility by the NUM.
    Dr. Bray: Is the hon. Gentleman aware that, as the Government directly control capital expenditure, they are responsible for the decay of the infrastructure in Scotland and the rotting away of services for housing, roads, hospitals and schools, which are greatly in need of repair?
    Mr. Ancram: I do not believe that the hon. Gentleman has seen last year's allocations. We take into account the bids made to us by authorities and try to meet them within the available resources.
    Mr. Kirkwood: The hon. Gentleman has confirmed that some categories of revenue require prior Government approval. Will he confirm also that the methods of assessing the needs of local authorities require prior Government approval? When will the Under-Secretary of State introduce the proper client-group approach of assessing local authorities' expenditure?
    Mr. Ancram: The hon. Gentleman should look at the system that exists at the moment, because need is assessed on the basis of the client-group approach. The guidelines are drawn up on the same basis. Increasingly, from year to year, we are making sure that the distribution of rate support grant occurs in accordance with that same system.

    Teachers (Salaries and Conditions)
    Mr. Norman Hoggasked the Secretary of State for Scotland how many representations he has received advocating an independent review of teachers' salaries and conditions of service; and if he will make a statement.
    The Secretary of State for Scotland (Mr. George Younger): I have been asked by the teachers side of the Scottish Joint Negotiating Committee for Teaching Staff in School Education to set up an independent review of teachers salaries. By the end of last week, I had received some 770 representations generally advocating a review, many of which asked for a review of conditions of service as well as salaries. I hope to announce a decision shortly.
    Mr. Hogg: Is the Secretary of State aware that today throughout Scotland teachers are on strike? Is he aware also of the real grievances of teachers and their justifiable case for an independent inquiry? Will he make that decision as a matter of urgency?
    Mr. Younger: However justifiable the teachers' case may be—I have undertaken to consider carefully all the points they have put to me—I honestly do not feel that industrial action does anything but the greatest harm to their case.
    Mr. McQuarrie: My right hon. Friend will be aware that the joint negotiating committee first wrote to him on 14 August 1984 requesting this meeting and that he recently met the committee. I am sure my right hon. Friend accepts that, having gone through the trauma of claims and all the rest of it in the last Parliament, it is essential that he should come quickly to a decision on the question of an unrestricted independent pay review body for the teachers so that both the Government and the teachers are obliged to accept the decisions of that review body.
    Mr. Younger: I note what my hon. Friend says. I have been asked by both sides to take careful account of all the facts that they put to me, and I am certainly doing that.
    Mr. Roy Jenkins: Does the Secretary of State recollect that when my hon. Friend the Member for Ross, Cromarty
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    and Skye (Mr. Kennedy) and I met him five and a half weeks ago to discuss this point he said that he hoped to reach a decision within two weeks? What is causing the delay? Is the right hon. Gentleman less effective in dealing with the dogmas of the Secretary of State for Education and Science than are his own Back Benchers?
    Mr. Younger: There is no dogma involved. It is a purely practical question. It is a major request that requires very careful consideration, and I am giving it that.
    Mr. Canavan: Is the Secretary of State aware that, since the last major independent review by Houghton in 1974, teachers' salaries have fallen behind those of many other categories of people, such as policemen, who can now earn as much as £138 per week more than a teacher? Bearing in mind that the teachers made their demand for an independent review as long ago as August, is it any wonder that they now feel that they have to resort to strike action in protest against this reactionary Philistine Government, who must bear full responsibility for the current crisis in Scottish education?
    Mr. Younger: I do not think that there are any circumstances in which strike action by teachers can ever be justified. The teachers' position would be more credible today if it were not the fact that some teachers started disruptive action even before they had given me a chance to consider their request.
    Sir Hector Monro: Does my right hon. Friend agree, in view of his statement that he will make an early decision on this very important subject, that it is unforgiveable to have strike action now and to prevent children from having education?
    Mr. Younger: I agree with my hon. Friend. The sad thing is that teaching is or should be a highly respected profession, and action of this sort does nothing for the teachers' case.
    Mr. Gourlay: Is the Secretary of State aware that the dog-in-the-manger attitude towards teachers' salaries and conditions has caused many moderate minded people, and even Tory supporters, to go on strike today? Why will he not invest in Scotland's future and help to restore Scotland to its place in the educational vanguard?
    Mr. Younger: I appreciate that many teachers feel very strongly about the issues. It is for those reasons that I am taking great care in considering their request. Teachers would expect me to do that.
    Mr. Donald Stewart: Is the Secretary of State aware that the industrial action is arising from sheer frustration, as the teachers feel that their case is getting nowhere? Therefore, the setting up of an independent review is extremely urgent. As their position and salaries have recently been drastically eroded, does he not think that the teachers have a fair case which should be attended to urgently and sympathetically?
    Mr. Younger: I appreciate that, and that is why I am considering their points very carefully. As I said, the regrettable fact is that the disruptive action started in the summer. If I were the most enthusiastic teacher in the world, I would not feel that such action could advance my case. It has the opposite effect.
    Mr. Lambie: Will the Secretary of State confirm that he is in favour of granting an independent review to

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    Scottish teachers, or will he at least make a substantial lump sum available to teachers for the extra work that has fallen on them? If the answer is that the Treasury will not sanction it, when will the right hon. Gentleman speak up for Scotland and tell the English Treasury to go to hell?
    Mr. Younger: As there is no such body as the English Treasury, I cannot very well ask it to do anything.
    I think that the hon. Gentleman is asking me to preempt the conclusions of the review that I have been asked to consider. I am taking into account everything that the teachers and employers have said to me.
    Mr. Robert Hughes: Does the Secretary of State recall that, exactly 10 years ago today, the House was debating teachers' pay and unrest in Scottish schools? Despite the fact that the then Labour Government had set up the Houghton committee, the right hon. Gentleman and his hon. Friends laid the responsibility for the unrest directly at the Government's door. Therefore, will he now accept his responsibilities, set up a review body and agree to meet its costs?
    Mr. Younger: I accept my full responsibility. I thought I had made that clear. In the interests of each side of the House it might be better not to recall the events of 10 years ago.
    Dr. M. S. Miller: In connection with conditions of service, will the right hon. Gentleman give an undertaking to teachers, who entered a pension scheme with good will many years ago, that when they receive their lump sum gratuity it will not be taxed, and that any such provision will not be retrospective?
    Mr. Younger: Matters of taxation are for my right hon. Friend the Chancellor of the Exchequer.
    Further to the question of the hon. Member for Kirkcaldy (Mr. Gourlay), we have already made provisions to help teachers with an extra work load. We have given them no fewer that 10 extra free days in the year on which to do further preparation for their teaching. We have also allowed for some extra staffing levels this year to help the minority of teachers who will have extra work to do in regard to the new standard grade courses.
    Mr. Willie W. Hamilton: As there is independent review machinery for police salaries, does the right hon. Gentleman think that a teacher is less, or more, important than a policeman?
    Mr. Younger: They are equally important, but I have not had a request from the teachers to set up an independent pay review body.
    Mr. Bruce: Does the Secretary of State not accept that the lack of an independent pay review and the fact that teachers' salaries have already fallen far behind have meant that there has already been a loss of dedicated teachers from the profession, especially science and mathematics teachers? If he does not set up a review, we shall fail to recruit the dedicated teachers whom we need. Does he not recognise that an independent review is long overdue and that he should make an early announcement to that effect?
    Mr. Younger: I appreciate the hon. Gentleman's comment. I would have hoped that most teachers, irrespective of these issues, would have felt that at present teaching is more exciting, innovative and creative than for many years. The finest people in the teaching profession
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    must respond clearly to this extremely challenging job, including the introduction for the first time of an all-graduate profession.
    Mr. Bill Walker: Does my right hon. Friend agree that when teachers behave like industrial trade unionists they should not be surprised if at a future date the Government decide to introduce legislation to ensure that, like industrial trade unionists, they are subject to the Employment Protection Act 1975 and anything else?
    Mr. Younger: I confine myself to saying that teachers are a highly respected professional body, but such bodies do not have their causes advanced by anything like the sort of industrial action that we now appear to be seeing.
    Mr. Dewar: Does not the Secretary of State not recognise that there has been an almost complete absence of support from Conservative Members because there is a widespread realisation that teachers have fallen behind comparable groups in society? Would the right hon. Gentleman think himself a member of a respected profession if he were earning between £8,000 and £9,000 a year as an experienced secondary school teacher doing a stressful and difficult job and coping with new curricula developments? If he wants to avoid industrial action and discontent boiling over in our schools during the coming months, does not he accept that he must make a prompt and sensible decision in favour of an independent pay review?
    Mr. Younger: There is not much in what the hon. Gentleman says with which I can disagree. I have made it clear all afternoon that I am carefully considering all the points put to me, and I shall try my best to make a response to the teachers. However, the hon. Gentleman must have been half asleep, because many of my hon. Friends have warmly supported me.

    Student Awards
    Mr. Steelasked the Secretary of State for Scotland how much money he expects to save by the cut in the level of student grant; and how many Scottish students will be affected.
    Mr. Younger: My right hon. Friend the Secretary of State for Education and Science will be making a further statement today.
    Mr. Steel: Does the Secretary of State not recognise that there has been a public outcry about recent announcements because they have come on top of a steady erosion in the value of student grants since the Government took office? Does he appreciate that a 14 per cent. increase will be necessary this year to restore the grant to its level at the time when the right hon. Gentleman took office? If there is further damage to the parental contribution, will that not militate against recruitment in the Scottish universities, because of the four-year honours degree compared with the three-year standard in England?
    Mr. Younger: I appreciate the right hon. Gentleman's latter point. However, as he has noticed, in the past year I have made alterations to the Scottish system of student grants to recognise the fact that the travel pattern of Scottish students is different from that south of the border. That was widely welcomed.
    Mr. Malone: Will my hon. Friend also bear in mind that Scotland is additionally affected because first-year

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    intake is often at the age of 17 and covenanting schemes are not available, thereby putting us in a very different position from our English equivalents?
    Mr. Younger: My hon. Friend is absolutely right. I appreciate his point, but he will no doubt take that question up with my right hon. Friend the Chancellor.
    Mr. Tom Clarke: Does the Secretary of State accept that these problems are taken as seriously by Scottish students and their parents as they are by English Conservative Members of Parliament? How does he relate education to industry, and are not Government policies giving students a signal that for most of them jobs will simply not be available?
    Mr. Younger: I do not think that this issue, important though it is, is directly related to industry or to jobs for students. This is a question of how to finance university education. As I have said, my right hon. Friend the Secretary of State for Education and Science will be making a statement later today.
    Mr. Wilson: I look forward to the recantation from the Secretary of State for Education and Science, but will the Secretary of State explain why he made a statement on grant cuts several days after the statement made by his right hon. Friend, and why on major aspects of grants he appears to be a copycat Minister and rarely to give the lead?
    Mr. Younger: On the contrary, I should have thought that the hon. Gentleman, who is supposed to be a specialist in Scottish affairs, would know that public expenditure calculations for Scotland take place at different times from those for England because we must work in line with the formula on which our block grant is worked out. The system is highly favourable to us, and I should have thought that the hon. Gentleman would know about it.
    Lord James Douglas-Hamilton: Will my right hon. Friend ensure that the fact that the majority of Scottish students at universities take a four-year degree course will be fully borne in mind and taken into account?
    Mr. Younger: Yes, I can confirm that.
    Mr. Ewing: Is it not a spineless approach for the Secretary of State to hide behind the Secretary of State for Education and Science? As the hon. Member for Dundee, East (Mr. Wilson) said, the Secretary of state issued a statement after he caught the night sleeper north, which meant that he was not subject to questions in the House. Why does he not tell his Scottish colleagues what arrangements he has made, and answer the question of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel)? What arrangements has the Secretary of State made to tell us what will happen to student grants in Scotland after the Secretary of State for Education and Science has made his statement this afternoon?
    Mr. Younger: The hon. Gentleman has been reading too many whodunnits. It would generally be for the convenience of the House if one of the Ministers involved made a clear statement about what the position will be. When my right hon. Friend makes his statement, he will make it on behalf of all Education Ministers.

    Salmon Fishing
    Mr. Leighasked the Secretary of State for Scotland if he will make a statement about the salmon fishing industry in Scotland.
    The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): There was a modest improvement in catches in 1983 in comparison with 1982, but I share the concern of the salmon interests in Scotland that catches in the 1980s have been poor in comparison with the previous three decades and that spring running fish have been particularly scarce.
    Mr. Leigh: Will my hon. Friend take this opportunity to pay tribute to the immense contribution made to the Scottish economy by anglers on the salmon leaps, including English anglers? Will he confirm that this contribution is being put under increasing strain by overfishing on the spawning grounds of Greenland, commercial netting at the mouths of rivers and poaching? What urgent steps will the Government take to deal with those problems by way of increased pressure on our Community partners, pressure on the local authorities involved and by introducing tagging?
    Mr. MacKay: My hon. Friend is right to draw the House's attention to the important part that salmon angling plays in the rural economy of many parts of Scotland. The Government are well aware of that and are worried about the decline in stocks. As my hon. Friend knows, we are considering seriously proposals put to us about tagging. We have come to agreements with Greenland about reducing the tonnage which it takes. Indeed, I noticed a recent press report that Greenland has not found the salmon to make up this year's tonnage for its fishing industry.
    Mr. Mason: Will the Minister inform the House what progress is being made on the legislation, which we expect, on the salmon-tagging scheme, which is designed to cut salmon poaching? It has been under review for nearly two years. Has not consultation gone on for too long? Is he aware that the House is growing impatient with the lackadaisical approach of the Scottish Office, as distinct from the Ministry of Agriculture, Fisheries and Food, which wants to get on with the matter?
    Mr. MacKay: I do not accept that the Scottish Office has been lackadaisical in this matter. My noble Friend the Minister of State and officials in his Department have had discussions with various interested organisations. It is clear that although there is considerable support for tagging, there is also considerable hostility to it. I hope that it will be possible to reach conclusions on this matter in the near future.
    Mr. Corrie: Is my hon. Friend aware that there is tremendous opposition to tagging of any sort among Scottish fish farmers? Does he accept that this will simply lead to legalised poaching? Might not it be far better to have a scheme of licensing game dealers to sell salmon, so that all the fish passes through them, just as game does now?
    Mr. MacKay: My hon. Friend has made a valid point about licensed salmon dealers. My right hon. and noble Friend and I are well aware of the objections to tagging felt

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    by the Scottish National Fanners Union and by the very important salmon farming industry in Scotland. Of course, their objections have to be taken into account.
    Mr. Johnston: Is the Minister aware that the sale of salmon fisheries, such as those in the river Conon, by the North of Scotland Hydroelectric Board, means that the opportunities for local people to fish are being drastically reduced? Does he not feel that their opportunity to fish for salmon in Scotland is something in which he should be interested?
    Mr. MacKay: There are very adequate facilities for local people to fish in Scotland. Many of them would find the situation much better if only there were more salmon. The hon. Gentleman mentioned the river Conon, but that is a matter for the hydroelectric board and I suggest that he takes up the matter with the board's chairman.
    Sir Hector Monro: Will my hon. Friend introduce legislation at an early date to help the district fishery boards? What steps is he taking to put pressure on Ministry of Agriculture, Fisheries and Food to prevent drift netting off the English coast?
    Mr. MacKay: I cannot predict the timing or precise content of any Bill, but, apart from the possibility of salmon sales control, we are considering how to strengthen the local administrative structure of the salmon fishery boards in Scotland. My hon. Friend will know that the drift netting to which he referred is a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food.
    Mr. Soames: Does my hon. Friend really accept the great importance of this asset to Scotland? If so, does he agree that the Government's prevarication on this issue, and on many others affecting the salmon, does them no credit?
    Mr. MacKay: I know my hon. Friend's deep interest in this subject, and we have all heard about his success in recent weeks. The Government are not prevaricating. We are well aware of the serious position and of the importance of the salmon fishing industry to rural Scotland. We are concerned to ensure that any proposals we bring to the House are correct.

    European Regional Development Fund
    Mr. Knoxasked the Secretary of State for Scotland what is the total value of grants made towards projects in Scotland by the European regional development fund since its inception in 1975.
    Mr. Allan Stewart: Total commitments and allocations for Scotland are £385 million.
    Mr. Knox: Is my hon. Friend satisfied that the people of Scotland are aware of the scale of those grants and of their significance to the progress of the Scottish economy?
    Mr. Stewart: I certainly hope that the people of Scotland are aware of the considerable importance of European regional development fund assistance. There was a recent and important announcement with regard to non-quota funds. The types of Scottish projects that benefit are roads, bridges, sewerage systems and industrial site services. Some Scottish Members may be interested to know that, following our discussions with the European Commission, we expect it to announce soon that it is prepared to add ferry vessels to that list.
    Mr. Allen Adams: I wish to raise a more parochial matter. Given the substantial sum that the Minister has mentioned, will he use the little ability that he obviously has to make sure that some of the money is used in our area to ensure that Renfrew district council can proceed with the building of its leisure centre, which it has been talking about for 10 or 15 years? I am sure he will agree that it might go to his credit if he could at least build public baths.
    Mr. Stewart: I am aware of the importance that the hon. Gentleman attaches to the Paisley leisure centre, which is near my constituency. In my constituency we already have those facilities at Barrhead. The matter is in the hands of the European Commission. Our application was made seven months ago and we presented what the Scottish Office believed to be a good case for European regional development fund assistance. The Commission is not yet convinced of the contribution that the project will make to tourism, but we are pressing it to give the project favourable treatment next year.

    Regional Policy
    Mr. Ewingasked the Secretary of State for Scotland if he will make a statement on the anticipated effect of the Government's regional assistance policy on the Scottish economy.
    Mr. Younger: The measures announced on 28 November maintain a strong regional policy in Scotland and extended regional development grants to service industries for the first time.
    Mr. Ewing: I should like to ask the Secretary of State about the economy of the central region. Does he realise that three of the areas in Scotland granted special development area status have unemployment rates below that of Falkirk, and that five of them have unemployment rates below that of Alloa? Why has the Secretary of State totally ignored the representations both of Central regional council and Falkirk district council about the need for development area status for the Falkirk area? Will the right hon. Gentleman consider meeting the local authorities, or at any rate the Labour Member of Parliament, to discuss the seriously deteriorating situation in the Central region?
    Mr. Younger: I appreciate the hon. Gentleman's concern. I shall be glad to see any hon. Member who wishes to see me about any such matter. It is not a straight matter of slotting an area into a category on the ground of the unemployment level. We also take into account other factors such as the industrial structure in the area. I fully appreciate the hon. Gentleman's concern about the central area—a considerable part of which is still an assisted area—but I still believe that the best way to look at the matter is in the broadest sense, taking into account other factors as well as unemployment.
    Mr. Corrie: Is my right hon. Friend aware that 200 steel workers in my constituency are under threat of redundancy? Will he assure us that the area will be given any aid that can be given under the scheme, to try to alleviate unemployment?
    Mr. Younger: I was glad to see the deputation from the area that my hon. Friend brought to see me, and I am considering very carefully everything that the members of the deputation said to me. The decision is one for the general management of the British Steel Corporation, and

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    rightly so, but I am glad that, under the regional changes, the area will be in the top tier for regional policy assistance.
    Mr. Home Robertson: Some areas of very high unemployment in Scotland are located in places that are no longer assisted areas, and which—as in the case of my own constituency—may not have been assisted areas for some time. What hope is there for development and job creation in such areas?
    Mr. Younger: Any properly planned regional policy is bound to concentrate on the very worst areas. Under all Governments, small pockets of high unemployment can occur in areas where the general level of unemployment is not very high. I can assure the hon. Gentleman that there are still powers available to the Scottish Development Agency, and other powers, that can be used even for areas that are not assisted. No doubt those powers could be used in appropriate cases.

    Coal Industry Dispute
    Mr. Ron Brownasked the Secretary of State for Scotland what he estimates has been the cost to date to the Scottish economy of the mining dispute.
    Mr. Allan Stewart: The loss of coal output directly reduced industrial production by some 2·5 per cent. in the second quarter of this year. The recovery in manufacturing output is continuing. The main effect of the strike has been the hardship suffered by the families of striking miners.
    Mr. Brown: Will the Minister face facts? The Government are responsible for the crisis. It is obvious that the miners are standing firm and will not be defeated, and so something must be done to resolve the crisis by bringing both sides together. What, if anything, do the Government intend to do?
    Mr. Allan Stewart: The people who should be facing facts are Mr. Arthur Scargill and his colleagues in the National Union of Mineworkers, and the fact that they should face is that there is a perfectly reasonable basis for setlement in the terms put to, and agreed by, NACODS.
    Mr. Henderson: Does my hon. Friend agree that one of the most unnecessary costs of the mining dispute has been incurred by local authorities which insist on dishing out ratepayers' money to support the operation? That has affected not only ratepayers in the domestic sector, but businesses as well, and there is bound to be a knock-on effect on jobs.
    Mr. Allan Stewart: I entirely agree with my hon. Friend. I know of the anger that that action has caused among ratepayers, especially in my hon. Friend's area. It is indeed surprising that councils which constantly claim that they are tight on resources should apparently be so flush with funds for such purposes.
    Mr. Eadie: If the hon. Gentleman will return to the original question about the effect of the strike on the Scottish economy and its cost, he must concede that the cost has been enormous. Will he note that the way to resolve the problem is to get back to the negotiating table to achieve a negotiated settlement? Is he aware that, since the Conservatives have been in Government, there has been less investment in the mining industry in Scotland?
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    Is he further aware that there was less investment in the industry in Scotland in 1983–84 than there was in 1979, when Labour was in power?
    Mr. Allan Stewart: The Government have an outstanding record on investment in the coal industry. We have invested £2 million a day in it.
    Mr. Eadie: Not in Scotland.
    Mr. Allan Stewart: As to the adverse industrial consequences of the strike, there have been reduced purchases of mining machinery, and loss of income has hit suppliers of goods and services to the mining community. However, the recovery in manufacturing output in Scotland is continuing—it was up 5 per cent. in the first half of 1984. Scotland is in favourable circumstances with regard to electricity supply because, as the hon. Gentleman will be aware, the electricity boards have alternative sources of supply.
    Mr. Maxton: As the Minister is so anxious to bring the strike to an end, why does he not advise the Cabinet to instruct the National Coal Board to go back to the negotiating table and start negotiating on the true facts about the viability of pits instead of the nonsense that it has talked so far? Is he aware of the report that I have in my hand, and which is marked "Confidential"? In it, five leading accountants, including two professors of accountancy, show quite clearly that the facts and figures that the NCB has used so far are utter nonsense? Will he go back to the negotiating table on that basis? [Interruption.]
    Mr. Allan Stewart: It is Mr. Scargill who has said that he has not budged an inch. The NCB has proposed a basis for settlement, which has been accepted by NACODS. Perhaps I might tell the hon. Gentleman and others who are cheering what he said that 2,267 miners are working in Scotland today. My right hon. and hon. Friends commend them for going back to work and their bravery in the face of intimidation. I know that Opposition Members regard them as scabs. That is the difference between us. We are the party of the workers, they are the party of the strikers.
    Mr. Campbell-Savours: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I shall take the point of order afterwards.
    Mr. Andy Stewart: Does my hon. Friend agree that the Scottish economy would have been worse affected if the Nottinghamshire miners had not continued to work?
    Mr. Allan Stewart: My hon. Friend is absolutely right. It is a pity that miners in Scotland did not get the opportunity to ballot, as did Nottinghamshire miners, as they would have been at work as well if they had had the chance.
    Mr. Douglas: Will the Minister restrain his hon. Friend the Member for Fife, North-East (Mr. Henderson) and concur with the convenor of Fife regional council in that, first, nothing that the regional council has done in support of the miners has broken the law and, secondly, that he is perfectly right to say that, "nae wain in my region will have a hungry belly."? Do Conservative Members intend to win the strike on the basis of hungry bairns' bellies? As we are approaching the season of good will, will the

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    Government show good will and get the Secretary of State for Energy to call the parties to the negotiating table to achieve an honourable settlement to the dispute, or do they intend to win by attrition?
    Mr. Allan Stewart: My hon. Friend the Member for Fife, North-East (Mr. Henderson) did not say that the action of the regional council was illegal. He said that he deplored it, as I do. As for the emotive language used by the hon. Member for Dunfermline, West (Mr. Douglas), I believe that the striking miners have a responsibility to take into account the interests of their families and to go back to work. Their jobs are there for them.
    Mr. Hugh Brown: I am glad that the Leader of the House is in his place as I wish him to repeat what I believe he said yesterday, although it is not in Hansard, when he urged the NUM to return to the negotiating table. If that is indeed the Government's position, will the hon. Gentleman instruct the NCB to be a bit more conciliatory?
    Mr. Allan Stewart: What I said, and am happy to repeat, is that in my view there is a perfectly reasonable basis for a settlement on the terms already accepted by NACODS. I am sure that if a ballot were put to members of the NUM as a whole on that proposition it would be accepted.
    Mr. Malone: If my hon. Friend reads the report to which the hon. Member for Glasgow, Cathcart (Mr. Maxton) referred, will he bear in mind that it was prepared by academics with little experience of the mining industry and that it was immediately ripped apart on breakfast television by a leading practical expert?
    Mr. Allan Stewart: I am grateful to my hon. Friend. As a former academic myself, I often take with a pinch of salt documents produced by academics.
    Mr. Dewar: Does the Minister accept that his synthetic rage in the past few minutes had made hint a somewhat ludicrous figure, like some demented Paddington Bear dancing at the Dispatch Box? Will he accept that the Opposition give the strongest possible support to local authorities in Scotland, which have shown concern and compassion for the real hardship being endured in their areas, and that we would welcome a gleam of humanity on this issue from Ministers of the Crown in Scotland?
    Whatever the record for the United Kingdom, will the hon. Gentleman admit that investment in the Scottish coalfields has declined since 1979 and that that is one of the major problems? Will he give a categorical assurance that, to the best of his and the Government's knowledge, there is no plan to close pits and reduce the work force on the lines forecast on fairly compelling evidence by the STUC and other bodies in Scotland?
    Mr. Allan Stewart: I am not prepared to comment on the status of documents which the NUM or STUC claims to possess. That is a matter for the National Coal Board. We all saw the hon. Member for Glasgow, Garscadden (Mr. Dewar) on television, giving support to Mr. Arthur Scargill in the Usher hall. He is now clutching at straws to hide the extreme embarrassment felt by him and some of his colleagues at the conduct of the National Union of Mineworkers.

    Aid to Industry
    Mr. Millanasked the Secretary of State for Scotland if he will make a statement on his Department's aid to industry.
    Mr. Younger: As announced by my right hon. Friend the Prime Minister on 28 November, responsibility for the administration of regional development grant in Scotland is being transferred from the Department of Trade and Industry to the Scottish Office. My Department's funding of both the Scottish Development Agency and the Highlands and Islands Development Board is being maintained at very high levels.
    Mr. Millan: Is the Secretary of State aware that, even with the present disgracefully high levels of unemployment in Scotland, there are still shortages of skilled labour? That being so, does he agree that it is scandalous that there should be proposals to close skillcentres, including one in my constituency? As he is one of the Ministers directly responsible for the Manpower Services Commission, will he ensure that those proposals—the case for them is argued on the flimsiest grounds, as I have seen from the paper that is to go to the MSC on 13 December—are withdrawn and the skillcentres allowed to get on with the job which they are so well equipped to do?
    Mr. Younger: I appreciate what the right hon. Gentleman says about the centre in his constituency, and I agree that those who work in these skillcentres are dedicated people, who have done good work for a long time. However, if the right hon. Gentleman carefully studies the papers that he has been given he will find that the amount and the quality of the training that is to be done is not being reduced, but increased. All that we are trying to do is to get the premises and buildings put into line with modern training conditions, and this is long overdue.
    Mr. James Hamilton: Will the right hon. Gentleman recognise that the Government's policies on trade and industry are doing nothing for the people in Lanarkshire? Is he aware that in my constituency there were 32 liquidations last week? Is he also aware that in my constituency a skillcentre is closing in Bellshill? Bearing in mind that over 20 per cent. of our people are unemployed, is it not time that the Government took their finger out and did something about the unemployed and about helping to train unskilled people?
    Mr. Younger: I think that it is an annexe of the skillcentre that is due for closure in the hon. Gentleman's constituency. The amount and the quality of training have increased. We are merely trying to get the type of premises brought up to date. As to regional support in general, the hon. Gentleman will know that Lanarkshire has had many important new developments, and he has warmly welcomed some of them in the House.

  SOLICITOR-GENERAL FOR SCOTLAND

    Seat Belts
    Mr. Maxtonasked the Solicitor-General for Scotland how many people have been prosecuted in Scotland for not wearing seat belts.
    The Solicitor-General for Scotland (Mr. Peter Fraser): The number of persons proceeded against in 1983 when the seat belt charge was the main offence was 275. The provisional figure for the first half of 1984 is 93.
    Mr. Maxton: In view of the very encouraging results in terms of prevention of injury following the seat belt legislation — I myself escaped minor injury in a car accident last week by wearing a seat belt—may I ask the Minister to consult his colleagues in the Department of Transport and urge them to support legislation to make it compulsory for car manufacturers to fit rear seat belts as a first step towards making the wearing of them compulsory in back seats as well?
    The Solicitor-General for Scotland: It is clear that the use of seat belts since the introduction of the legislation has been successful. My hon. Friend the Minister of State, Department of Transport has already said that she will announce the Government's intentions about making rear seat belts compulsory in the light of the Select Committee on Transport report on road safety.
    Mr. Malone: Were a substantial number of the people stopped for not wearing seat belts not prosecuted? In view of the success of the policy of wearing seat belts, will my hon. and learned Friends undertake a policy of prosecuting as often as is necessary?
    The Solicitor-General for Scotland: The figures that I gave do not show the number of offences that were recorded by the police. In the first half of this year, over 1,100 were recorded by the police. However, I make it clear that the figure I have given is of those cases where there was a main offence and prosecution for the offence. My hon. Friend will appreciate that, it is also within the power of fiscals to issue warning letters and to take advantage of the fiscal fine system. A number of people have been dealt with in that manner.

    Homelocators Ltd.
    Mr. McTaggartasked the Solicitor-General for Scotland if he will institute proceedings against Homelocators Ltd. of Glasgow for offences under the Accommodation Agencies Act 1953; and if he will make a statement.
    The Solicitor-General for Scotland: No report has been received by me or the procurator fiscal at Glasgow in respect of any contravention by Homelocators Ltd. of Glasgow under the Accommodation Agencies Act 1953, but, following the tabling of this question, I have now instructed the procurator fiscal at Glasgow to make inquiries.
    Mr. McTaggart: I am grateful to the Solicitor-General for that answer, and I recognise that he is trying to be helpful in this matter. Does he agree that even if this firm is found not to have been breaking laws, it is certainly guilty of circumventing them, and in the process has caused hardship to many students who are already under tremendous pressure? Can the hon. and learned Gentleman give the House an assurance that, if necessary, he will bring forward changes to the relevant Act to make sure that these practices cease as soon as possible?
    The Solicitor-General for Scotland: I am grateful to the hon. Gentleman for what he has said. It would be premature now to say whether there has been a breach of
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    the Act to which the hon. Gentleman has referred or whether there is a loophole in the law that is being exploited. If inquiries reveal that an offence has been committed, we shall give careful consideration to prosecution. Alternatively, if there appears to be a loophole, that will be made clear.

    Coal Industry Dispute
    Mr. Strangasked the Solicitor-General for Scotland how many people charged with offences arising out of the dispute in the mining industry have been refused bail.
    The Solicitor-General for Scotland: As at 3 December 1984, 18 persons had been remanded in custody after appearing in court charged with offences arising out of the mining dispute. Of the 18 persons, two were subsequently released on appeal and one immediately changed his plea to that of guilty.
    Mr. Strang: Will the Solicitor-General for Scotland recognise that these are honest men who have never been in trouble with the law in their lives, including the chairman of the Lothian central strike committee, Mr. David Hamilton, who is one of the constituents of my hon. Friend the Member for Midlothian (Mr. Eadie)? Mr. Hamilton has languished in Saughton prison for six weeks. Does the hon. and learned Gentleman not understand the damage that is being done by using the apparatus of the state to defeat the National Union of Mineworkers? When will he understand that it is outrageous that these men are being penalised? When will the Government face the fact that long-term damage has been done to the police force in Scotland in many communities because of the use to which it has been put in the miners' dispute?
    The Solicitor-General for Scotland: I have already said that 18 persons have been remanded in custody. There is a clear bail procedure and a clear opportunity to take advantage of an appeal if those concerned feel that bail should have been granted to them. Such appeals have been successful in a number of cases. The hon. Gentleman mentioned a particular case and he knows that as it is to come before the courts in the next fortnight I cannot comment on it in any detail. However, he will be aware that the man to whom he has referred is charged with a serious assault. He took the matter of his bail to the appeal court and his application was refused.
    Mr. Speaker: Order. I should have said before that the House must be careful about mentioning individual cases, especially those which are before the courts, and should bear in mind the sub judice rule.
    Mr. Gordon Brown: Will the Solicitor-General for Scotland at least agree to minimise hardship among mining families, although his colleagues seem determined to maximise it? Will he explain to the House why at least 100 miners have been refused legal aid by the Dunfermline sheriff court?
    The Solicitor-General for Scotland: The granting of legal aid in Scotland is a matter for individual sheriffs. The hon. Gentleman will be aware that the test that is required to be applied by the courts in those circumstances is that of the interests of justice. It is on that basis only that legal aid is granted or refused. The hon. Gentleman will appreciate that the prosecutor in Scotland is independent.

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    Nevertheless, he makes no intervention when an individual makes an application before the courts, whether it arises from the miners' strike or otherwise, for legal aid.
    Mr. Dewar: Will the hon. and learned Gentleman accept that in a letter to me of 13 November from his right hon. Friend the Secretary of State it was conceded that there were significant variations in the approach of individual sheriff courts to the granting of legal aid? These variations have been highlighted in a discreditable fashion by experience with picket-line offences. The hon. and learned Gentleman will be aware that a review of legal aid is being conducted. Will he give a guarantee or undertaking that the granting of legal aid will be considered in that review and that the results of it will be made known to the House?
    The Solicitor-General for Scotland: The hon. Gentleman appreciates that the administration of the legal aid system is a matter for my right hon. Friend the Secretary of State and not for me. However, it is a fact that there have been discrepancies in the way in which legal aid has been applied by the courts in Scotland. The hon. Gentleman will readily appreciate from his professional experience that discrepancies existed long before the miners' strike first emerged. I understand that my right hon. Friend is considering the matter as one of the issues to be included in an overall review of legal aid in Scotland.

    Salmon Poaching
    Sir Hector Monroasked the Solicitor-General for Scotland how many prosecutions have taken place in the latest available year for salmon poaching in the sea and fresh water, respectively.
    The Solicitor-General for Scotland: In the period from 1 December 1983 to 1 December 1984 there were 38 and 321 prosecutions for salmon poaching in the sea and fresh water respectively.
    Sir Hector Monro: Will my hon. Friend take every opportunity, now that we have an aircraft to add to the fishery protection vessels, to ensure that as many poachers as possible on the high seas are brought to book?
    The Solicitor-General for Scotland: Yes. I understand that "Younger's tartan air force" has already had considerable success in using aerial photography to catch those who have been engaged in illegal poaching for salmon at sea. Given that success, it is anticipated that we can look forward to further prosecutions in the Scottish courts.

    Diversion Scheme
    Mr. McKelveyasked the Solicitor-General for Scotland if he is satisfied with the progress of the diversion scheme.
    The Solicitor-General for Scotland: Yes, Sir. The scheme is still in its early days but continues to make steady and satisfactory progress.
    Mr. McKelvey: Is the Minister aware that I support the scheme? Does he not share my concern that in Ayrshire recently there were a couple of diversions involving cases of husbands of battered wives. Does the Minister agree that cases of serious assault are not proper to be used in a diversion scheme?
    The Solicitor-General for Scotland: Clearly, we want to expand the diversion scheme. I believe that the hon. Gentleman supports what is being done. Obviously there are also cases where it is not appropriate to take advantage of that alternative to prosecution. I do not know of the particular cases to which the hon. Gentleman has referred. If he feels that there have been cases of serious assault, I shall be grateful if he will let me know. It is certainly not intended that the diversion scheme should be used to deal with serious assaults, which should very much more properly come before the ordinary courts.

Points of Order
3.30 pm
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker, arising out of questions. My point of order relates to the rights of hon. Members and to the confidentiality of the document referred to by my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) in his supplementary to question No. 8. I have a copy of a document entitled "NCB Accounts—a Mine of Misinformation". The document is available in two forms. One is marked "Confidential" in red. The other is not marked at all. The document marked "Confidential" in red was given to me by a member of the Select Committee on Energy. Discretion as to whether that document is designated as a confidential document is in the hands of the Chairman of the Select Committee on Energy. It is within his discretion. In the event of his attaching the designation "Confidential", it means that the document becomes privileged. If the document is privileged, it is subject to the rules as set out in "Erskine May" on pages 153 and 154 where it says that until a Committee has reported to the House it is a breach of privilege for disclosure to be made of anything that took place during the Committee's private meetings, or for any of its papers to be made public.
My point of order is in two parts. Has the Chairman of the Committee abused his position by seeking to designate a document as confidential when it has already been made available to Members of this House and has already been made the subject of a BBC "Newsnight" programme in the middle of last week? This document has already been made public. Could it possibly be said that in designating the document as confidential the Chairman was intending to shackle the members of that Committee and prevent them from commenting publicly upon the contents of the document? Furthermore, in order to finalise my point of order, was my hon. Friend the Member for Rother Valley (Mr. Barron) placed inadvertently in contempt of this House? Was the hon. Member for Aberdeen, South (Mr. Malone), who rose today to refer specifically to that document and who is a member of that Select Committee, inadvertently or deliberately placed in contempt of this House?
Mr. Ian Lloyd: Further to that point of order, Mr. Speaker. The hon. Member for Workington (Mr. Campbell-Savours) did not give me notice that he intended to raise this matter. However, I have to inform the House that, as far as I am aware, no member of my Committee has with my knowledge made this document available. When it was received by the Committee it was marked "Confidential". The Committee was requested to treat it as such. As far as I am aware, we are under an obligation so to do.
Mr. Speaker: Order. We have a heavy day and I can dispose of the matter simply, because the hon. Member for Workington (Mr. Campbell-Savours) kindly gave me notice that he was going to raise the matter and I have had an opportunity to look into it. I have made inquiries about the document and I am satisfied that it may be referred to. Indeed, it has been referred to in the House before by the hon. Member for Bolsover (Mr. Skinner) on 29 November. An hon. Member must not refer to unreported evidence of a Select Committee, but if a paper has already
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been circulated to other persons before the Committee sends for it, clearly reference can be made to it in the House or anywhere else.
Mr. Kevin Barron: Further to that point of order, Mr. Speaker. I am very concerned about the position. I had hold of that document as a Member of the House last Thursday and I used it on three occasions at public meetings over the weekend. I came to the House on Monday evening to open correspondence from the Clerk to the Select Committee and in it was a copy of the document that I had used on public platforms marked "Confidential". It was I who handed it to my hon. Friend the Member for Workington (Mr. Campbell-Savours).
I have written to you today, Mr. Speaker to ask whether my actions over the past six days have indeed been a contempt of the House and I look forward to receiving your reply.
Mr. Dennis Skinner rose—
Mr. Speaker: Order. I have already referred in a kindly fashion to the hon. Member for Bolsover. I do not think that any point of order can arise.
Mr. Skinner: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. Let me dispose of the point of order. I do not think that the hon. Member for Rother Valley (Mr. Barron) has done anything wrong. I have nothing further to add to what I have already said to the hon. Member for Workington. As I understand it from the Chairman of the Select Committee, and as the House heard, when he received the document it was marked "Confidential".
Mr. Skinner: On a further point of order, Mr. Speaker. As you, Mr. Speaker, will look seriously into what my hon. Friend the Member for Workington (Mr. Campbell-Savours) had to say, and taking into account the admission of my hon. Friend the Member for Rother Valley (Mr. Barron), it is important that you understand that for many years the Coal Board has been twisting the accounts when it presented reports—
Mr. Speaker: Order. The hon. Gentleman is not on a point of order. He is abusing his point of order to make a political point which is not a matter for me.
Mr. Skinner rose—
Mr. Don Dixon: On a point of order, Mr. Speaker. Yesterday, during the Second Reading of the Local Government Bill, I was fortunate enough to catch your eye at 25 seconds to 10 o'clock. I intended to point out to the House how the Bill would deny millions of citizens the democratic right of electing their local representatives. I have no doubt but that the House would have welcomed that after listening to 30 minutes of boring diatribe from the Minister. However, at 15 seconds to 10 o'clock the Treasurer of Her Majesty's Household moved that the Question be put, and, rightly, you put the Question. I rushed to the House this morning to read my 20-second speech and I found that it was not in Hansard. Can you put this right, please?
Mr. Speaker: Hansard heard it, I am sure.
Mr. Skinner rose—
Mr. Speaker: Order. I will not take a further point of order from the hon. Member for Bolsover.
Mr. Ron Brown: You will remember, Mr. Speaker, that I asked a supplementary question to question No. 8. May I apologise to you and to the Leader of the House for misleading the House. The right hon. Gentleman replied to three questions on the mining dispute yesterday, and, unfortunately, I had read only two of them.
Mr. Skinner: On a further point of order, Mr. Speaker.
Mr. Speaker: I will take the point of order if it is entirely different and legitimate, but in fairness to his colleagues in the House, the hon. Gentleman should not take up time with spurious points of order on a day when we have a heavy programme before us.
Mr. Skinner: On a point of order, Mr. Speaker. One of the difficulties that hon. Members experience in relation to nationalised industries and documents of this kind is that we are allowed to ask questions only of a general nature. We are not allowed to ask questions about the day-to-day administration of any nationalised industry. That has been laid down. In your capacity as Speaker, you will know that there is a severe limit upon the areas about which we can ask questions.
Because of that I raise this legitimate point of order. Lots of information has been given to the Coal Board upon which Ministers have commented at the Dispatch Box, throughout the dispute and before. An important Select Committee was given figures by the Coal Board that have been proved to be false. They were also given to the House. If we are to be allowed only to raise matters of a general nature in relation to the National Coal Board as a nationalised industry and not about the day-to-day administrative figures we should have more reliable evidence.
It is pretty clear from the confidential document that the Chairman of the Select Committee has that, if we are not careful—this is what I ask you to rule upon—we shall be given Coal Board accounts in a twisted form delivered by people from the NCB who are bent and the House will be misinformed. We want to make sure that—
Mr. Speaker: Order. The hon. Gentleman was not here during Scottish questions.
Mr. Skinner: I was.
Mr. Speaker: Then the hon. Gentleman was not listening. This matter was extensively discussed during Scottish questions and it was suggested that there were two views on the report.

European Council (Dublin)
3.42 pm
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I should like to make a statement on the results of the European Council held in Dublin on 3–4 December. I was accompanied at this meeting by my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs. The conclusions of the Council have been placed in the Library of the House.
The Council covered four main subjects. First, we examined the economic situation in the Community on which the Commission had submitted a detailed report. In particular, we discussed the creation of more jobs by opening up the internal Community market for all goods, services and professions; by defining European standards for products; and by improving the Community's performance in advanced industrial technology. This has to be achieved in the context of—
"moderation in the evolution of real wages"
and
"a pause in the growth of current public expenditure and a decline for several years in its share of gross domestic product".
The Council agreed to set up a review of manpower policy with the aim of directing training to sectors where labour will be needed, of encouraging job mobility and of fostering enterprise, especially among young people.
Secondly, the European Council reached agreement on the Community's position in the enlargement negotiations with Spain and Portugal. Two major issues had been outstanding — wine and fisheries. Both were satisfactorily settled. Unfortunately, Greece reserved her position on enlargement, linking it with a bid for more money for Mediterranean programmes. However, the enlargement negotiations will now go ahead on the outstanding issues and, we hope, be brought to an early conclusion, with a view to accession on 1 January 1986. The outcome will have to be referred back to the Council of Ministers, especially in view of the position adopted by Greece.
Thirdly, we gave particular attention to further measures to relieve famine in African countries, particularly in Ethiopia. We agreed that the Community and its member states should provide 1·2 million tonnes of grain in 1985. This is a really major effort which the United Kingdom strongly supports. We appealed to other donor countries to match this effort.
Fourthly, we had a preliminary exchange on reports from two groups established after the Fontainebleau meeting. These groups are dealing with Community institutions and with practical measures such as easier movement of goods and frontier formalities. The final reports will be substantively discussed at the European Council in the first half of next year.
The European Council also urged the Environment Ministers to reach agreement at their meeting tomorrow on guidelines for the reduction of lead in petrol—a British initiative within the Community — and on vehicle emissions.
Within the context of political co-operation, the Council endorsed the principles for dealing with terrorism and the abuse of diplomatic immunity. which were adopted in September and are now being put into practice.

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We discussed East-West relations, stressing the importance of reaching satisfactory arms control agreements, and the middle east. In the discussion on central America we reaffirmed our support for the Contadora process.
Finally, the Foreign Affairs Council adopted the text on bydgetary discipline, including the strict financial guideline for agricultural expenditure. It is the result of considerable efforts over a period of years by Britain to ensure the better control of Community expenditure and a better balance in the Community budget.
Mr. Neil Kinnock: The most welcome news that comes out of the Dublin summit is the agreement to release 1·2 million tonnes of grain for Ethiopia and other African countries in the coming year. Will the Prime Minister give us an undertaking that, as the grain surplus of the Common Market continues to increase, she will prevail upon the other Heads of Government to increase that allocation as the opportunity arises.
Unfortunately, other consequences of the Dublin summit are much less satisfactory than the decisions on famine relief. First, the Prime Minsiter has failed to get the discipline over the Common Market budget that she promised. When reporting to the House after the last summit in June, the right hon. Lady said:
"we should like the principles to be embodied formally and legally in the budgetary procedure, but it must be done in such a way as to guarantee them."—[Official Report, 27 June 1984; Vol. 62, c. 1001.]
Will she now confirm that the document on budgetary discipline approved by the Dublin summit has no legal status, that it will operate on the basis of majority voting with no British veto, and that it falls lamentably short even of the objectives which the right hon. Lady set herself and promised us back in June?
Secondly, the Prime Minister may talk in her statement of the strict financial guidelines for agricultural expenditure, but is it not a fact that the 1985 Common Market draft budget, which will provide the basis for our 1986 arrangements, provides for a further and significant increase in the proportion of the budget going to agriculture and provides also for cuts in science, technology, investment in research and expenditure on transport and energy? Did the Prime Minister challenge that budget, because it will mean heavy disadvantages for Britain? In the light of that, is the right hon. Lady now prepared to reconsider her rash commitment six months ago to increase British VAT own resource payments to the Common Market by 40 per cent. in the coming year?
Tomorrow, the House debates the Chancellor's autumn statement, which provides for reduced expenditure on housing, education and other vital provisions such as regional aid and training. Against the background of financial stringency at home, how can the Prime Minister possibly justify the increased largesse to the Common Market to which she again committed herself in Dublin?
The Prime Minister: I thank the right hon. Gentleman for his comments about Ethiopia. The Community has pledged itself to provide 1·2 million tonnes of grain between now and the next harvest. All of that grain is not for Ethiopia — other places in Africa also need a considerable amount. It is thought that overall 2 million tonnes are needed of which the Community says it will provide 1·2 million tonnes. The Community is saying to
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other donors, "Will you please at least match that?" There is a considerable number of other donors who, as the right hon. Gentleman knows, are being very generous.
Considerable amounts of grain are due to land in Ethiopia, with 112,000 tonnes of wheat due to arrive in Ethiopian ports in December and another 94,000 tonnes in January, so that the distribution is kept up. As the right hon. Gentleman knows, the distribution is going well. It is vital that we have both flow and distribution. I do not think that we can commit ourselves at the moment to increased amounts. The total amount of cereal allocation in the budget is about 1·1 million tonnes. Not all of it goes to emergency aid; some of it is committed elsewhere. It is a combined effort between the Community and its member states. The right hon. Member will be aware that member states have been very active on their own behalf in helping Ethiopia, as well as within the Community. The text on financial budgetary discipline is binding on the Council itself, but it is not being embodied into a treaty or technically — legally — into the budgetary process. [HON. MEMBERS: "Why not?"] Because one simply cannot get agreement from all 10 countries. All of them have, however, agreed that the Council, which is the deciding unit in the whole Community, shall be bound by the clause on financial budgetary discipline. I hope that the right hon. Gentleman will welcome that.
With regard to the right hon. Gentleman's remarks about the autumn statement and public expenditure, he will have noted that I quoted from one of the documents submitted by the Commission to the Council in the discussion on employment, urging a reduction in public expenditure as a proportion of GDP.
Mr. Julian Amery: Is my right hon. Friend aware that, while the aid that we are, quite rightly, sending to Ethiopia is reaching the Ethiopian army and much of the civil population under Government control, the larger part of the country is not under Government control, and that none of the aid that we are sending is reaching the areas under the control of the National Liberation Fronts of Eritrea and Tigre? As a result, there is a tremendous influx of refugees—nearly 1 million — into the Sudan, and it is becoming an intolerable burden on the Sudan.
Will my right hon. Friend give serious consideration to sending aid through the Sudan to the areas controlled by the National Liberation Fronts of Eritrea and Tigre? There is some justification for doing so, in that those two organisations have offered a truce to the Ethiopian Government and the Ethiopian Government have not responded to it.
The Prime Minister: I am aware that not every area in Ethiopia has managed to get food, but the distribution is very much better than it was. My right hon. Friend is the first to be aware of the difficulties of getting supplies of food and water to the areas concerned. We are very much aware that Sudan is another area in need of help, and I shall take up what my right hon. Friend said about it.
Mr. J. Enoch Powell: How far are the new budgetary arrangements, as they affect Britain, capable of being overturned or deferred by action on the part of the European Assembly?
The Prime Minister: I do not believe that those new arrangements can be overturned by the Assembly. The

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Assembly has to act within the treaty. As the right hon. Gentleman knows, the treaty refers to 1 per cent. VAT, and his question is pertinent to some of the things being considered at the moment. The Assembly cannot go beyond 1 per cent. VAT. It has certain margins within that provision but cannot go above it.
Mr. Terence Higgins: What case is there for any increase whatever in EC agricultural expenditure?
The Prime Minister: My right hon. Friend may take that view, and some of us may go quite a long way towards meeting him on it, but it is not a view taken by everyone.
My right hon. Friend will also be aware that when we took the first steps to limit the guarantees on certain agricultural produce, it caused problems in Britain. We have to be aware that whatever is done is done gradually.
Dr. David Owen: What is the Government's view on the fact that the majority of Community countries wish to have an intergovernmental conference now on the treaties? In the light of the Greek attitude and the impending enlargement of the Community, are there not advantages for Britain in streamlining the Commission from 17 to 12, in safeguarding budgetary disciplines, and in ensuring that, provided we retain the safeguard of the Luxembourg compromise, there is more majority voting?
The Prime Minister: As the right hon. Gentleman knows, those matters are being discussed in the Dooge committee.
With regard to the right hon. Gentleman's point about reducing the number of Commissioners from 17 to 12, even at Fontainebleau I said that we were prepared to accept that. We think that it is absurd to have 17 Commissioners. There is not the work for 17 Commissioners to do. I must tell the right hon. Gentleman that I was not necessarily followed in my conclusions by other countries which have two Commissioners. I hope that ultimately they will see the wisdom of what I said.
With regard to majority voting, I have no wish to extend it beyond what is at present provided for in the treaty. Majority voting can operate in many areas, but we must stick to the Luxembourg compromise. From what the hon. Gentleman has said, I understand that he agrees.
Mr. David Harris: What about the fishing aspects of the Dublin summit? In particular, can my right hon. Friend assure our fishermen that the negotiating position agreed there will not be to the detriment of our fishermen, particularly in the south-west of England where Spain clearly hopes to gain increased fishing rights?
The Prime Minister: The Community adopted an agreed negotiating position on fishing. For obvious reasons, that has not been published, but I do not think that my hon. Friend would be unduly concerned about its provisions. I am sure he would feel that they reasonably protected Britain's interests.
Mr. Nigel Spearing: The Prime Minister has said that the Council has bound itself in respect of budgetary discipline. If that were to be so, would not that need financial regulations? Has not the Council reached conclusions only?
The Prime Minister: No, the conclusions bind the Council, but the hon. Gentleman is right in that this matter has not been transferred into regulations. Other members
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of the Community did not think that that was necessary. We would have preferred it, but the conclusions are now binding on the Council.
Mr. David Crouch: Will my right hon. Friend give more details about the satisfactory settlement on wine? Am I right in thinking that this settlement requires a much greater distillation of wine, and what effect will that have on the production and use of industrial alcohol in this country?
The Prime Minister: My hon. Friend will he aware that when wine production exceeds a certain amount—and it is triggered by three different criteria—the wine then goes for distillation into alcohol at a very much lower price. That is meant to be a disincentive to growing so much wine in the following year. I refer to table wine, not vintage wine. We are very much aware of the effect that this could have on industrial alcohol in this country. It is therefore important that the triggers are effective to reduce the amount of wine grown in successive years. That will thereby reduce the amounts that go to distillation because the price of that wine would be so low as to make it not worth producing.
Mr. Roland Boyes: Was there any discussion on the easier movement of professions in the internal Community market? Did the Prime Minister take the opportunity to raise the Football League's opposition to the free movement of footballers, which could have a devastating and damaging effect on the finances and standards of English football?
The Prime Minister: No, the hon. Gentleman will be well aware that we are talking about equivalence of qualifications, which can take a long time to negotiate. It is important to complete that part of our work so that our young people are able to practise more easily in other Common Market countries.
Mr. Stefan Terlezki: What provision has the EEC made for food and medical supplies to the 3 million Afghanistan refugees in Pakistan?
The Prime Minister: That is not dealt with through the EEC. We give refugee aid to Pakistan. We have tried to be as generous as possible, because we understand and applaud the excellent provision which Pakistan has made for those refugees from Afghanistan. I shall give my hon. Friend the precise figure. It was up to £3 million, burit may now have gone over that.
Mr. Andrew Faulds: During the conversations on the middle east, did the right hon. Lady pursue the suggestion put by the Greek Prime Minister that there should be a European initiative towards a settlement in the middle east, or is she simply prepared to wait until the American President bothers to notice the problem?
The Prime Minister: The hon. Gentleman will have seen the communiqué on political co-operation. The discussion on the middle east was not extensive. A new initiative could emerge only after very extensive consideration of the kind which specifically occurred at the Venice summit. The discussion was brief. Therefore, the communiqué summarises our present position and says that each of us has kept our contacts with the several parties involved in the middle east dispute. We intend to continue to keep those contacts separately and as a Community.
Mr. Eric Forth: Is my right hon. Friend satisfied with the provisions made in the context of enlargement both for migrant workers and the access of British industry to Spanish markets? Does she share my unease that the Greek bargaining position that is now being taken up is a foretaste of what is yet to come regarding Mediterranean countries' pressure on northern European countries on agricultural matters?
The Prime Minister: We have a particular interest in the negotiation of industrial tariffs of the Community with Spain in the negotiations for enlargement. We are not yet satisfied with the conditions, but they are still under negotiation. We are aware of the matter both regarding the quota on cars which are imported into Spain and on the high tariff imposed on them. Therefore, we want increased quotas and reductions in tariffs to take place especially steeply during the early years.
The Greek Government are demanding considerable sums for Mediterranean programmes. The sums were of such an order that my colleagues and I did not think that we could possibly agree to them, bearing in mind that Greece already derives substantial net benefit from joining the Community, which has increased steeply during the past two years.
Mr. Roy Jenkins: Does the Prime Minister recognise that Mr. Papandreou has become her most apt pupil in unilateral intransigence? Nevertheless, does she agree that it would be singularly inappropriate for Greece, which was eager to speed its entry into the Communityto block the entry of two at least equally qualified Mediterranean countries? Does she agree that that is an example neither of Socialist internationalism — a rare commodity these days — nor of democratic responsibility?
The Prime Minister: I recognise no similarity. The right hon. Gentleman has reason to know that the United Kingdom is still a substantial net contributor to the Community—[Interruption.]
I note that the right hon. Gentleman says that that is very good. He should be the first to understand that Greece is a substantial—I am sorry—a substantial taker-out from the Community and wants substantially to increase the sum which it takes out. There is, therefore, absolutely no parallel between the two cases. However, I agree that it would be disgraceful if Greece were to use that particular demand to block the entry of both Spain and Portugal. I am grateful to the right hon. Gentleman for expressing that sentiment in the House.
Mr. Francis Maude: My right hon. Friend announced the intention to proceed to the free exchange of services within the Community. Will she say when we may expect a genuine Common Market to replace the protection that exists at present?
The Prime Minister: My hon. Friend is right in saying that the article of the treaty on the completion of the Common Market for internal services has been pursued least, although in order of priority it comes above that for agriculture. It is a matter to which the Dooge committee is giving special attention. We have a special interest in it. The committee will report in March, when we shall consider how to take forward its proposals, and we shall have a substantive discussion on it by June 1985. The sooner we get a complete internal market in services the better.
Mr. Ernie Roberts: At the meeting did the Prime Minister raise the urgent and serious problem of massive unemployment in Europe? What cures and solutions did she suggest at the meeting?
The Prime Minister: As I said in my statement this was the first part of our discussions and the first matter to which we addressed our attention. I pointed out that there was a substantial report from the Commission — the annual economic report—which was geared especially to
"the dominant problem of unemployment."
It set out four particular groupings and 16 guidelines on matters to be followed. There is a full copy of the report in the Library.
Several Hon. Members rose—
Mr. Speaker: Order. There is to be a further statement of great importance, an application under Standing Order No. 10 and an important debate lies ahead of us. I shall take two more questions from each side.
Mr. Ralph Howell: I am glad to hear of the initiatives taken to try to solve the problem of unemployment in the EEC. Is my hon. Friend aware of the success of the United States in its work fare schemes in place of welfare? Will she institute a serious inquiry to see whether their methods can be useful in solving our unemployment problems?
The Prime Minister: We did not discuss those schemes in detail at this meeting, but they were discussed in detail at the London economic summit, at which many European Community countries were present, when President Reagan described them. Some of my hon. Friends in the Department of Employment have been studying those schemes.
Mr. Tom Clarke: When the Council considered the provision of grain and food aid to Ethiopia and to other countries, did it take into account the role of the United Nations and its various agencies? If so, what conclusions were reached?
The Prime Minister: Yes, we took into account the role both of other countries and, as many of our colleagues pointed out, of the extremely generous gifts from individual citizens and groups in other countries. We took the measure of what we could do both as a Community and as individual countries, and decided that we could provide 1·2 million tonnes of grain, out of a required amount of, we calculated, 2 million tonnes. That is not only for Ethiopia. There are other countries in need in Africa. Many of us also contribute to the world food programme which has been active in securing greater supplies of food to Ethiopia.
Sir Anthony Kershaw: Considering the attitude of Greece, is it expected that enlargement will cause particular difficulties, and when may we hear the outcome? Is it generally accepted that Greece has an absolute veto in all circumstances about enlargement?
The Prime Minister: Negotiations will go ahead on the remaining matters, which were wine, fish and industrial tariffs, for Spain and Portugal. We hope they will be completed by March so that the March Council can consider them. I think that it is technically true that Greece or any member state would have a veto on enlargement

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because if one insists on having a Luxembourg compromise on the veto, that inevitably follows. I hope that we shall be able to point out, as right hon. and hon. Gentlemen have, that it would be completely unjust if Greece, which is doing extremely well from its membership of the Community and is a democracy which has known non-democratic days, blocked the entry of other newly established democracies into the Community, when a purpose of their entry is to help and strengthen their democracy.
Mr. Russell Johnston: Is the Prime Minister suggesting that Greece is getting enough from the Community already? If so, does she still believe that economic convergence is a central objective of the EC? If the sums that Greece is receiving are sufficient, what hope can there be for a poor country such as Portugal? How and when does she expect the standard of living and economic opportunity of the poorer countries to be significantly improved?
The Prime Minister: In 1982, Greece's net receipts were £404 million, and in 1983 they amounted to £555 million. That represented the sharpest rise in any member state's net receipts, and made Greece the second largest net recipient of European Community funds after Italy. Greece has also benefited from certain special measures such as postponement of the introduction of VAT, which means a benefit of some £140 million. On top of those benefits, other sums were offered to Greece in pursuance of the agreement that we had, that such funds should be provided for integrated Mediterranean programmes as a consequence of enlargement. Therefore, extra on top of that has been offered to Greece. Greece said that it thought that that was not enough, but we said that it was all that the Community could afford for the time being. The hon. Gentleman mentioned convergent economic policies, but the Community is not meant to be a mechanical redistributive mechanism.

Student Awards
4.10 pm
The Secretary of State for Education and Science (Sir Keith Joseph): With permission, Mr. Speaker, I should like to make a statement.
On 12 November I announced changes to the student awards system involving the abolition of the minimum award, increased contributions from parents in the middle and upper reaches of the income scale and the extension of contributions, for those most able to pay, up to the maximum of the designated tuition fee of £520 a year. The resources released by these measures were intended in part to meet increases in the already substantial bill for student awards—about £700 million in 1984–85—and in part to provide additional money for science.
Our system of student support—amongst the most generous in the world—has long been based on the sharing of responsibility by the Government, the student's family and where appropriate the student himself. When resources are limited, it is, I believe, right for those parents who can afford to do so to carry a larger share of the costs of their children's higher education, in order to release money for urgent needs elsewhere, particularly at the moment for science.
I recognise the concern expressed in the House and elsewhere that the increase in parental contribution that was proposed was too sharp and the notice given too short to enable parents to make such a substantial adjustment in their financial affairs. I believe also that parents will want to know where they stand in relation to the next academic year.
I should therefore tell the House that it remains the Government's intention, subject to the decision of Parliament, to abolish the minimum award and to increase the level of parental contributions to maintenance for those in the middle and upper reaches of the income scale. I have, however, decided to withdraw the proposal that parents should make a contribution to tuition fees. My right hon. Friend the Secretary of State for Scotland has decided similarly. The cost of this concession in England and Wales in 1985–86 is £21 million. In order to find this extra sum, I have been through my recently announced expenditure programme again and I have been able to find £11 million savings towards it.
I have three savings to announce. First, there will be a reduction of £6 million in the addition to the equipment grant for universities in 1985–86. This means that universities will get £4 million for this purpose in that year instead of the £10 million that I announced earlier. I intend, however, that the selective scheme, with the agreement of the University Grants Committee, should now be extended to cover the three years to 1987–88: £7 million a year will be available in each of the two later years.
Secondly, there will be a reduction of £3 million—from £14 million to £11 million—in the amount which I had told the chairman of the Advisory Board for the Research Councils was a planned addition for science in 1985–86.
Thirdly, there will be a number of smaller economies amounting to £2 million. This will mean among other examples a smaller increase than already announced for

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the PICKUP programme; and less for educational research, adult education and the microelectronics programme.
The remaining £10 million needed in 1985–86 will, exceptionally, be found by an addition of that amount to the public expenditure planning total.
The Government propose to consider—and consult widely about—whether a radical change in the student support system, which might include loans, should be made so as better to meet the needs of students and their families whilst safeguarding the interests of the taxpayer.
I believe that these proposals meet the two main concerns of the House: first, that the increase in parental contribution was too sharp and too sudden; and, secondly, that the system of student support in the longer term should be reviewed.
Mr. Gordon Wilson: On a point of order, Mr. Speaker—
Mr. Speaker: Order. I shall take points of order afterwards.
Mr. Wilson: It is very important—
Mr. Speaker: Order. All points of order are very important.
Mr. Wilson: On a point of order—
Mr. Speaker: No; I said that I would take the hon. Gentleman's point of order afterwards.
Mr. Wilson: On a point of order—
Mr. Speaker: Order. I have told the hon. Gentleman that I will take his point of order afterwards, and I will.
Mr. Wilson rose—
Mr. Speaker: I will take it afterwards. I will not take it now!
Mr. Wilson: On a point of order—
Mr. Speaker: Order. Perhaps the hon. Gentleman did not hear me. I will take the point of order afterwards. I will not take it now.
Mr. Giles Radice: Is the Secretary of State aware that by withdrawing the proposal to charge for tuition fees he has been forced into a humiliating climb-down? Is he further aware that since the Government came to power they have reduced the real value of student grants by 14 per cent.? The right hon. Gentleman still proposes to abolish the minimum grant and is still not prepared to set up a wide-ranging and independent — I stress "independent"—review of financial support for all those in higher and further education.
Is it not also the case that the right hon. Gentleman is now cutting over £9 million from the increase in the science budget, which he told the world was so important that parents and students must pay for it? Terrified by their own Back Benchers, the Government have climbed down. How can the House have confidence in a Secretary of State who has displayed such incompetence and insensitivity? How can the Secretary of State have any confidence in himself?
Is the right hon. Gentleman aware that we would feel more respect for Conservative Back Benchers if they also used their muscle on issues affecting far greater numbers?
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Where is the Tory rebellion on the reduction in the pensioners' heating allowance? Where is the Tory rebellion on the cuts in regional aid? Where is the Tory rebellion on unemployment? We will take the Tory Back Benchers seriously when they force the Government to climb down on those other issues of fundamental importance to many millions throughout the country.
Sir Keith Joseph: The Government's purpose of strengthening the science budget — though admittedly less than we would have liked—is still being achieved.
Mr. Mark Carlisle: While obviously regretting the need for any increase in the parental contribution, I nevertheless say to my right hon. Friend that I and many of my hon. Friends will be glad that he has thought again about the question of tuition fees. We welcome the change and thank my right hon. Friend for what he has done in that regard, thereby preserving the principle of free higher education in this country.
Sir Keith Joseph: I very much respect the desire of my right hon. and learned Friend to find the best answer to the problem of student support, and I am grateful for what he has said.
Mr. David Steel: It will not be lost on the House that a rebellion by Tory Back Benchers has for the first time been half successful when it involves the interests of their better-off constituents.
The right hon. Gentleman misunderstands the position if he thinks that the public outcry is about the suddenness of the announcement. The outcry has arisen because the announcement comes on top of a steady erosion of the value of the student grant during the right hon. Gentleman's period of office. That is why it is unacceptable. Why is the right hon. Gentleman messing around trying to find £11 million by damaging cuts in other areas of education when the Chancellor of the Exchequer has told us that he is keeping £1,500 million in reserve for tax cuts in the spring? Will the right hon. Gentleman tell us about the effects of the cuts on the Scottish budget, about which he said nothing in his statements?
Finally, why should there not be a review before any changes are made rather than after the right hon. Gentleman has aready made some damaging decisions?
Sir Keith Joseph: All the better-off will still pay more in parental contributions, despite today's announcement. The question of arriving at the optimum balance between students and families on the one hand and taxpayers on the other will be at the heart of the review that has been announced. The cuts of £11 million are reductions in increases and leave substantial increases for the science budget.
Sir William van Straubenzee rose—
Mr. Wilson: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I have already told the hon. Gentleman that I will take his point of order afterwards, and I will do so.
Mr. Steel rose—
Mr. Wilson rose—
Mr. James Wallace rose—
Mr. John Maxton rose—
Mr. Speaker: Order. I am very surprised that the leader of the Liberal party and other should rise on points of order in the middle of a very important statement which the House wishes to hear. I am here to protect the interests of the whole House.
Mr. Wilson rose—
Mr. Wallace rose—
Mr. Maxton rose—
Mr. Speaker: Order. If the hon. Member for Dundee, East (Mr. Wilson) does not resume his seat, I shall have to ask him to leave.
Mr. Wilson rose—
Mr. Wallace rose—
Mr. Alexander Eadie rose—
Mr. Speaker: Order. I would be reluctant to have to ask the hon. Gentleman to leave. I ask the hon. Gentleman to resume his seat. I call Sir William van Straubenzee.
Mr. Wilson rose—
Mr. Wallace rose—
Mr. Maxton rose—
Mr. Speaker: Order. I think that I can almost anticipate the point of order that the hon. Member for Dundee, East wishes to make, although there is so much noise that the situation is very difficult for me. I believe that he wishes to say that we have had Scottish questions this afternoon, that there was a question on this point, and that the Secretary of State did not answer it as the Secretary of State for Education and Science has done.
Mr. Wilson rose—
Mr. Speaker: If the hon. Gentleman will be patient, I may be able to call him.
Sir William van Straubenzee: Does my right hon. Friend recall that I ventured yesterday afternoon to identify —and the point seemed to have approval—the inclusion of fees in the parental contribution arrangements as the issue of principle that was bothering so many hon. Members on these Benches? I said that that principle potentially affected not just the better-off but students from far less well-off homes than is normally supposed. What my right hon. Friend has now done, therefore, has gone a long way towards setting at rest the anxiety of Conservative Back Benchers.
Will my right hon. Friend venture to suggest to his Cabinet colleagues that the other lesson of principle is that Conservative Back Benchers who are anxious to support the Government must, in difficult matters such as this, be brought into consultation at a reasonably early stage?
Sir Keith Joseph: I am glad to pay tribute to the effectiveness of my hon. Friend's insight. The review and the following consultation will give an opportunity for the thorough canvassing of the options.
I gather that a question was asked by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), which I did not hear. I cannot answer for Scotland myself, but I am told that my right hon. Friend the Secretary of State for Scotland has yet to announce the allocations to programmes within the Scottish block. The effect of this change will be covered when he makes that announcement, which I understand he hopes to do shortly.
Mr. Martin Flannery: Has not the Secretary of State been kicked into grasshopping from one penny-pinching point to another? He has no answer to the accusation that, while giving public funds to the assisted places ,scheme and cutting down on education left, right and centre, he has now been brought to book, and, in order to please his own Back Benchers is having to make a concession that is not really a concession. He is stealing funds from other areas when he could take money from the rich to ensure that working people have a proper education.
Sir Keith Joseph: The hon. Gentleman should recognise that, as is often the case, that is inaccurate. On an exceptional basis, my right hon. Friend the Chancellor has helped to achieve a situation which allows an increase in the science research budget.
Mr. David Madel: I welcome what my right hon. Friend has said about fees and future inquiries into student support, but can he confirm that, as the student population is rising, the extra £15 million for awards in 1985–86 is safeguarded?
Sir Keith Joseph: Yes, Sir.
Mr. Wilson: As the Secretary of State for Scotland put off the leader of the Liberal party earlier this afternoon in Scottish Question Time with a promise that a statement would be made on this matter setting out the Scottish implications, will the Secretary of State tell us—we demand it — what the effect will be on the Scottish education budget?
Sir Keith Joseph: No, Sir. I have told the House that my right hon. Friend hopes to make a statement shortly.
Mr. Dick Douglas: On a point of order, Mr. Speaker.
Mr. Speaker: Order. We have already gone over this matter.
Mr. Douglas: No.
Mr. Speaker: Order. I have received notification that the Opposition Front Bench wishes to raise a point of order at the end of the statement. I intend to take points of order then.
Mr. Douglas: On a point of order, Mr. Speaker.
Mr. Wilson rose—
Mr. Speaker: Order. I have already said that I shall take the point of order later. I call Sir William Clark.
Mr. Douglas rose—
Mr. Wilson rose—
Mr. Speaker: Order. I have already said that I shall take the point of order after the statement.
Sir William Clark: Is my right hon. Friend aware—
Mr. Douglas: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I hope that the hon. Gentleman, who is a very experienced parliamentarian, is not trying to challenge what I have said. I have already said that I shall take the point of order at the end of the statement. That is exactly what I intend to do. I call Sir William Clark.
Sir William Clark rose—
Mr. Harry Ewing: On a point of order, Mr. Speaker.
Mr. Donald Stewart rose—
Mr. Douglas rose—
Mr. Speaker: Order. I think that this is intolerable.
Mr. Douglas rose—
Mr. Speaker: Order. It is intolerable that Privy Councillors—
Mr. Donald Stewart rose—
Mr. Speaker: Order. It is intolerable that Privy Councillors and experienced Members should seek to challenge a decision that I have already stated. As I have already told the House, I intend to take the point of order at the end of the statement. I have an obligation to the whole House, not just to Scotland.
Mr. Donald Stewart rose—
Mr. Douglas rose—
Mr. Speaker: Order. I call Sir William Clark.
Sir William Clark: Is my right hon. Friend aware that his statement will be widely welcomed here and throughout the country? Is he further aware that, rather than this being a humiliating defeat for him, we admire him for agreeing and admitting that his first assessment on student awards needed amendment? He showed political honesty and courage. In his long-term consideration of student awards, will he look into the extension of the business loan guarantee scheme for students?
Sir Keith Joseph: I am most grateful to my hon. Friend. We can ensure that his suggestion is taken into account in the review.
Mr. Eric S. Heffer: As someone who is not renowned for causing any trouble in the House, may I tell the right hon. Gentleman—[HON. MEMBERS: "No—ask him."]—may I let him know that Opposition Members are not averse to any Government taking notice of what Back Benchers think? It would be a good thing if all Governments did that.
Does the right hon. Gentleman understand that many of us are deeply anxious about the suggestion of loans to students, as such a proposal would result in ordinary working-class youngsters who have previously been given the opportunity to go to university not getting those opportunities because their families are unable to meet the cost? Is he aware that student grants are tremendously important to ordinary working people as they have given thousands of youngsters from working-class families the opportunity to go to university? Is he further aware that if the Government continue with the proposal of student loans they will meet the greatest resistance from both sides of the House—I hope?
Sir Keith Joseph: The idea of partial or total loans in replacement of grants is one that should surely be considered during the review. The experience of our neighbours in north-western Europe shows that a suitably drawn partial or total loan scheme does not discourage access to higher education in any way.
Mr. Alan Haselhurst: Is my right hon. Friend aware that we are pleased that the voices of
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his colleagues and those who have spoken through them have been heard by the Government? Will all options be considered in the review, including the possibility of our not being committed to further increases in parental contributions?
Sir Keith Joseph: I am grateful to my hon. Friend. I assure him that the review will aim to consider all the options before consultation.
Mr. Tam Dalyell: The Secretary of State and the Prime Minister in their respective statements talked about the Community's advance in high technologies. Precisely how many alpha research projects, many of which are already being refused, will now be refused when they would otherwise have been successful? What number of peer-group diagnosed alpha research projects will be refused as a result of taking money away from the science budget?
Sir Keith Joseph: The hon. Gentleman has evidently not absorbed the fact that the Government are proposing an increase in the science budget, although it is slightly reduced as compared with what we proposed at first. The answer to the hon. Gentleman's question cannot be given by any Minister from this Dispatch Box, because the decision is for individual research councils. I can give him a general reply that the number of approved and funded alpha grants will be substantially greater because of even the reduced increase which is now proposed.
Mr. Harry Greenway: Does my right hon. Friend recall that some 70,000 students were taken out of contributions by themselves and their parents under the package that he announced first? Will he assure the House that they will be safeguarded, as was first announced? Will he bear it in mind that adult education has suffered severe cuts already and should be subjected to no more? Will he remind the Opposition and everyone else of the importance of maintaining the access of able people to university, wherever they come from, as they will create the wealth which will pay for the welfare programmes that we all want? That is the only way in which that will be achieved.
Sir Keith Joseph: Those at the lower end of the income spectrum who would have benefited from the Government's first proposals will still benefit exactly as was originally proposed. I should not like the House to get the wrong impression about the diminution of the money that might have to be made in the allocation to the adult education programme. As far as we can tell, it will be about £100,000 a year.
Mr. David Winnick: Is the right hon. Gentleman aware that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) is absolutely right, that a loan scheme for students would undoubtedly disadvantage many working-class families and, although today's climb-down by the Cabinet shows that he has been listening to Back Benchers, the substitute proposals that he has put forward will be no less damaging to education than the earlier proposals and should provoke the same protests from his own side?
Sir Keith Joseph: I believe that the hon. Gentleman is wrong. The effect of a loan scheme, whether partial or total, depends on the detail of its construction. As for the

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hon. Gentleman's comments about the implications for education, even after the adjustment, we are proposing an improvement in the education and science budget.
Mr. Andrew MacKay: Is my right hon. Friend aware that on this very healthy day for parliamentary democracy his proposals on tuition fees will be broadly welcomed by Conservatives and by the country as a whole? Nevertheless, will he explain in more detail his proposals for grants in the middle-income groups so as to allay our fears that some families in that group may suffer unduly?
Sir Keith Joseph: I am not quite sure what my hon. Friend has in mind. We are removing the danger or the probability of any individual with just one child in higher education having to pay more than £205 per year, except in very unusual circumstances. What we do afterwards will depend on the review, which will take all the options into account, and on the consultations that follow the review.
Mr. David Lambie: Is the right hon. Gentleman aware that his climbdown will be totally unacceptable to students and parents in Scotland? He has said that the Secretary of State for Scotland will be making an announcement on a future occasion. Why is that announcement not being made today, after the right hon. Gentleman's own statement? May Scottish Members have a guarantee that any such announcement will be made on the Floor of the House so that we can ask questions on it and not through a private notice question or a press notice issued from Edinburgh?
Sir Keith Joseph: I cannot really answer that beyond saying, on behalf of my right hon. Friend the Secretary of State for Scotland, "Yes."
Mr. Michael Forsyth: Does my right hon. Friend recognise that his statement today will be widely welcomed in Scotland as a recognition of the unfairness of the parental contribution system? In carrying out the review, will he bear in mind that partial loans for students will be welcomed by students and parents across the political spectrum in Scotland as a fairer system whereby working class families will not have to subsidise others?
Sir Keith Joseph: I am grateful to my hon. Friend. I suspect that many hon. Members agree that the interests of taxpayers who do not have children in higher education and who may themselves have relatively low incomes must also be taken into account.
I should correct an error that I inadvertently made in reply to my hon. Friend the Member for Berkshire, East (Mr. MacKay). It is possible that some parents may have to pay as much as £270 per year more.
Mr. David Alton: Is not the Secretary of State simply playing ducks and drakes with his own budget and merely offering a continuation of the thin gruel of education cuts and turning the clock back to before the Education Act 1944? Will be guarantee that more funds will be made available for education and that the 20,000 places in higher education that have been lost in the past five years will be restored? Does he agree that it is immoral to give away £1·5 billion in tax cuts when this money is being denied to higher education?
Sir Keith Joseph: The hon. Gentleman has got it entirely wrong. The number of students in higher education is nearly 60,000 per year higher than it was in 1979.
Mr. Andrew Bowden: Will my right hon. Friend remind the House that many students are receiving grants in excess of the amount on which many pensioners have to live? Will he confirm that, in view of the need to restrict public expenditure, it is only fair and just that all sections of the community should pay their share, including those earning between £20,000 and £30,000 per year?
Sir Keith Joseph: Yes. We must also bear in mind the contribution of those on low incomes to the total tuition fees from which students in this country benefit, which vary from £3,000 to £8,000 per year.
Mr. Robert Hughes: Is the Secretary of State aware that, however humiliating this partial climbdown has been for him, it is an even greater humiliation for Conservative Back Benchers who have shown no spine or guts and have accepted a statement which, if anything, will damage the future of education even more than the original proposals?
Sir Keith Joseph: The hon. Gentleman is being unduly churlish. The result of today's announcement is to leave a substantial — a significant — increase in the money available for basic science research, which I should have thought would have been of interest to Members on both sides. It is also a recognition by my right Friend the Chancellor of a quite exceptional case so that he has been able to contribute to that result.
Mrs. Edwina Currie: Does my right hon. Friend accept that the most welcome part of his statement is that serious consideration will be given to the whole system of financing students in higher education and that there will be full consultation on this? Does he agree that the review is long overdue and that it must take particular account of those students whose parents cannot or will not pay for them?
Sir Keith Joseph: Yes, but I should not like any hon. Member to ride away with the thought that the reduction in savings accepted by the Government today can be free. We have had to make reductions in other forms of public expenditure.
Mr. Robert C. Brown: Is the Secretary of State aware that it is not unknown for students with extremely rich parents to live on chip butties because their parents will not accept responsibility for the parental contribution? In carrying out his review, will he bear it in mind that the only egalitarian way to finance education expenditure is through taxation and that that is the way in which the matter should be tackled?
Sir Keith Joseph: That is an approach that the Labour Government felt unable to adopt. There is a limit to what can be asked of the taxpayer.
Sir Bernard Braine: Most of us recognise that it takes great courage for a Minister to change course as my right hon. Friend has done today, and he should be given credit for that. Nevertheless, will he take a longer, harder look than he seems prepared to do? Does he agree that investment in minds is the finest investment that we can make for the future but that many

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of us are dubious about some forms of research expenditure? Will he take a close look at some of the unethical research taking place in accordance with guidelines laid down by the Medical Research Council?
Sir Keith Joseph: A large number of people will agree strongly with my hon. Friend, but the Government, like many previous Governments, have given the research councils autonomy to make their own decisions on such matters.
Mr. Kevin Barron: The Secretary of State has said that there will have to be other cuts to pay for this. How are those cuts likely to affect organisations such as the Workers Educational Association, which helps those who have not had the privilege of a university education? Has he considered cutting the present £30 million subsidy from taxpayers to the public schools?
Sir Keith Joseph: The reply to the first part of the hon. Gentleman's question is none; there will be no effect on the WEA. In answer to the second part, the Government reviewed all the possible sources of savings, including that one.
Mr. Alan Howarth: Is my right hon. Friend aware that there will be a warm welcome on the Conservative Benches and in the country for the commitment to study in the review the part that a loans scheme might play in student finance? Does he agree that the availability of loans in conjunction with grants could do much to widen opportunity and responsibility in higher education, as well as help to meet the Government's financial commitment within the bounds of what can reasonably be afforded?
Sir Keith Joseph: I welcome my hon. Friend's comment, but I should not like the House to imagine that a part-loan scheme, which I have long favoured, can be introduced without complications and costly options. It will need a great deal of thought before deciding whether the Government would be wise to adopt any option that would involve extra costs.
Mr. Derek Fatchett: Does the Minister feel that by saying over the weekend that it would be impossible to cut a further penny from the scientific budget but coming three days later to the House with cuts amounting to £11 million he will have enhanced his status in the scientific community?
Sir Keith Joseph: The hon. Gentleman is right. I did not, as I should have done, interlard every statement that I made on televison with the phrase "Parliament permitting" or "With the approval of the House". I was talking about the provisional allocations. I accept the hon. Gentleman's comment.
Mr. John Stokes: Is my right hon. Friend aware that his original proposals seemed to some of us wholly right in principle, although perhaps somewhat wrong in execution? Is he also aware that millions of people who voted Conservative, including a large number in my constituency, have incomes that are nothing like £19,000 a year? If we are a national party, is it not our duty to look after all classes, not just the middle band? Furthermore, if we are to control Government spending, should we back down just because we receive a few letters from our constituents?
Sir Keith Joseph: I agree very much with the first part of what my hon. Friend says. How much the taxpayer should contribute to the expensive education costs of students is an important question to decide. Although students will almost certainly in most cases benefit the public, they will also—and good luck to them—benefit themselves.
Mr. Gavin Strang: Surely the Secretary of State is aware. that the cuts that he has announced this afternoon are even more reprehensible than the parental payment towards fees? Does this not demonstrate that the Conservative Government attach more importance to the disposable income of their highly paid supporters than to science, which is crucial to our future? As the Secretary of State has made such a public capitulation on this issue, will he resign?
Sir Keith Joseph: The Government's purpose is being achieved. There is some redeployment towards scientific research, which will receive an increase even after the reduction from that increase this afternoon, and we shall embark on a review to sort out part of this complex matter, which arouses strong feelings on both sides of the House.
Mr. Patrick Cormack: I thank my right hon. Friend for listening and acting. However, I am somewhat disappointed that it has not been possible to find the extra £11 million, in view of the fact that my right hon. Friend the Chancellor of the Exchequer has told us that he is likely to have £1,500 million to spare. Bearing in mind that people are adults at the age of 18, will my right hon. Friend the Secretary of State reaffirm the pledge that he and his predecessor gave to the Select Committee, that it remains the policy of the Government to phase out parental contributions?
Sir Keith Joseph: No, I cannot give a pledge such as that. We have long recognised that it would be desirable to treat an adult as an adult in terms of the costs of higher education, but we do not judge it practicable in the present and foreseeable circumstances to be able to do as my hon. Friend suggests.
Mr. Mark Fisher: Does the Secretary of State agree that he has broken his word to the University Grants Committee and to the research councils? Does he not understand that this statement, far from allaying criticism, will be viewed with anger and contempt by the universities, by people interested in research and particularly by parents and students? Does he realise that he no longer enjoys the confidence of the House in his handling of education, and should he not resign?
Sir Keith Joseph: The hon. Gentleman is totally wrong. The vice-chancellors of many universities objected to the scale and the short notice of the proposal that I originally announced. I have had many letters from them urging some reduction in the proposed increase. I do not think that the hon. Gentleman will find support for what he is saying among universities or among the science community.
Mr. Gordon Brown: Will the Secretary of State confirm that, instead of cuts in one sector, there will be cuts in almost every sector of the education budget, and that in postponing the erosion of student grants in the short term he is proposing the elimination of student grants in the long term? Will he

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come clean and say that it is to make possible tax cuts at Easter that he is prepared to cut science, training, adult education and research in universities' budgets?
Sir Keith Joseph: The hon. Gentleman is wrong. The result of this afternoon's decision is that the science budget receives more, although slightly less than was originally announced.
Mr. Patrick Nicholls: Will my right hon. Friend accept that the fact that he has correctly identified one of the outstanding points of principle that concerns Conservative Members shows that he has displayed high personal courage, which can only increase the esteem in which Conservative Members regard him? In the deliberations that will follow, will my right hon. Friend be able to persuade my right hon. Friend the Chancellor of the Exchequer to find the remaining £11 million that has made this change possible?
Sir Keith Joseph: I am grateful, but it is a dangerous illusion into which we fall when we talk of the Government, or even my right hon. Friend the Chancellor of the Exchequer, finding money. It is all the taxpayers' money.
Mr. Nicholas Winterton: Does my right hon. Friend accept that many of us who have been highly critical of him will welcome his decision to maintain the status quo in tuition fees, which shows good sense? However, will he go further and say that, as the grants that many students obtain from local authorities are tax free, any contributions that parents make should be allowable against their tax?
Sir Keith Joseph: That is really a matter for my right hon. Friend the Chancellor of the Exchequer.
Mr. D. N. Campbell-Savours: Will the Secretary of State accept that the way in which he has dealt with this problem in securing the interest of articulate organisations and the middle-class lobby may in future mean that, instead of taking them on, he will turn his attention to the more deprived elements of our society and their education needs? Will he give an assurance that he will not do that?
Sir Keith Joseph: I do not think that the hon. Gentleman can be aware that in 1979 the Labour Government left a minimum award that was highly regressive in its affects, and that has only been removed by the decision, which has been confirmed today, to abolish the minimum award.
Mr. Derek Conway: Bearing in mind that the Representation of the People Act 1969 set the legal age of adulthood at 18, is it not incongruous that young people are even more reliant on their parents at a time when they are judged to be legally adult? When my right hon. Friend has his inquiry, will he examine closely the estimate that 46 per cent. of students do not receive the full parental contribution, which is a matter of concern? It is of great sadness to his colleagues that he will have to look round for the odd million here and there when it is so easy to find hundreds of millions of pounds, as we did last week, to throw at the National Coal Board.
Sir Keith Joseph: My hon. Friend has inadvertently misled himself. I think that he was intending to speak of the 46 per cent. of students who receive contributions. The
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House must recognise that any Government face a dilemma in balancing the adult status of the student child with the sheer budgetary burden of removing the parental contribution.
Mr. Wallace: You will recall, Mr. Speaker, that during Scottish Question Time the Secretary of State for Scotland said that the Secretary of State for Education and Science would reply to a question put by my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), the leader of the Liberal party. I repeat the question in the hope that the Secretary of State will answer A. I do not think that it depends on the work allocation that is always being referred to. What will be the savings in the Scottish Office budget as a result of the cuts which have been announced, and how many Scottish students will this affect?
Sir Keith Joseph: I still cannot reply to that question. That is a matter for my right hon. Friend.
Dr. Keith Hampson: Is my right hon. Friend aware that, although there will be some who will say that he has not gone far enough, the majority will acknowledge the importance of having a fundamental review, which all Governments over the past 10 years have been asked to carry out? The concession on fees which he has announced will have the single most important effect of reducing the burden on parents who are contributing to the maintenance of their children in university or other higher education. Will he ensure that my right hon. Friend the Chancellor of the Exchequer does something in the Budget to offset what has been done to science, the pickup scheme and micro-electronics to help modernise industry? He has only to see what is happening in Japan to recognise the importance of that.
Sir Keith Joseph: The Government have provided extra money for all these schemes. I hope that the erosion of their finance will be marginal compared with the increases with which they have already been provided.
Mr. Anthony Beaumont-Dark: Will my right hon. Friend accept that there is some relief and gratitude that, after much hard pounding, some common sense at least has been brought back to student grants? Does he think that it is worth the agony and the anguish to the great body of the middle class that for £11 million so much ill will has been caused? This time last week some of us stayed in the Chamber at a late hour because £800 million was to be put through on the nod on behalf of the greatest pressure group of all, which is formed by those who insist on going on strike in an industry which continually loses money. Does he agree that if we can get our priorities right those who contribute most, who are members of the middle class, will not be hit as hard as they have over this stupid matter?
Sir Keith Joseph: Under the constraint of various burdens on public expenditure, I can understand my hon. Friend's complaint. I hope that he and the House will recognise that it is a national interest to safeguard the quality of our scientific research base. It seems imperative to the Government to take urgent action to preserve it.
Mr. Teddy Taylor: Is my right hon. Friend aware that his statement will bring great relief to many parents, especially those of younger children who are not yet at university, who were worried that, once established, the principle of tuition fees could soar to an

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impossible level? Will he make it abundantly clear that the figure which has been arrived at is unlikely to re-emerge in any review?
Sir Keith Joseph: No, I cannot give my hon. Friend a guarantee that this or that possibility will not arise in the review. The review will give us the opportunity to consider all the options and then we shall consult upon them.
Mr. Stuart Randall: Is the Secretary of State aware that a recent NEDO report described British micro-electronics and information technology as being in serious crisis? Is he aware also that the gap between our main competitors in Japan, the United States, France and Germany and ourselves is widening? Does he realise that his proposal to introduce a cut in the micro-electronics programme will accentuate the gap, which must be bad for all modern or new industries in Britain?
Sir Keith Joseph: The hon. Gentleman has entirely wrong the scale of what might be involved. The erosion in the micro-electronics programme — the programme has been growing—might be £250,000 to £500,000 a year. That is dwarfed by what the micro-electronics programme is achieving.
Mrs. Elaine Kellett-Bowman: Will my right hon. Friend accept the thanks of the many parents who save conscientiously towards meeting the cost of the education of their children, who would have been unable to bear the additional burdens that it was proposed to place upon them? Will he accept also my thanks for the offer of a review, which will be greeted with great pleasure? People like to feel that they have influence in anything as important as the matters that will be examined during the review.
Sir Keith Joseph: I am grateful to my hon. Friend.
Mr. Radice: Is the Secretary of State aware that many of us are dissatisfied with his answers, especially on the science budget? I return to the review of student support. Given the mess which he made of his original proposals and the controversy which surrounds the issue of loans, will he guarantee that his review will be independent?
Sir Keith Joseph: The Government have not yet decided the form that the review will take. I cannot give any such commitment.
Mr. Donald Dewar (Glasgow, Carscadden): On a point of order, Mr. Speaker. I ask you, Mr. Speaker, to consider the damaging and rather disgraceful situation that has arisen this afternoon. After the statement of the Secretary of State for Education and Science, we know nothing about the thoughts, actions or reasons of the Secretary of State for Scotland on student grants. All that we have is a statement from the Department of Education and Science that the Secretary of State for Scotland has decided similarly. That is added as an afterthought almost insultingly, at the fag end of the Secretary of State's statement.
I ask you for some protection, Mr. Speaker. It is important that we know what is happening in the Scottish Office. We know the total figure that is involved for England and Wales and we know where the education cuts will fall, but when it comes to Scotland we are left in a
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black hole of uncertainty. We are left with the unfortunate impression that, whether the Secretary of State for Scotland has decided or not, he does not really know what has been decided in his name.
Is it not intolerable that, on a day that has included Scottish Question Time, we should be left with less information than the rest of the United Kingdom about a key decision of interest to universities, students and the people of Scotland generally? Will you consider, Mr. Speaker, whether it was not most unfortunate that when a precise and specific question appeared on the Order Paper — it was Question No. 4 from the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) — we were told that it could not be answered because there would be a statement from the Department of Education and Science? Any reasonable person would have deduced from that that the Minister making the statement would be in a position to deal with the Scottish figures and answer specific questions on Scotland. The Secretary of State for Education and Science was not in a position to do so. I presume that we were misled unintentionally during Scottish Question Time.
I hope that the Secretary of State for Scotland will not try to shirk his responsibilities. He is responsible for these matters in Scotland. He is quick enough to claim the credit if there are differences of approach in Scotland and England, but when the going becomes rough he must come to the House and not shelter behind another Minister. The right hon. Gentleman is in his place and the Leader of the House is in his. Can we now have, through you, Mr. Speaker, an assurance that there will be an immediate statement that will give us the details for Scotland?
Mr. Speaker: Order. The hon. Gentleman knows perfectly well that I am not in a position to give immediate guarantees that statements will be made. That is not a matter for me.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Further to that point of order, Mr. Speaker. I realise that there is great concern and anxiety in the House about the Scottish dimension of this afternoon's business and a wish that it should be made available to the House. I shall not comment on the remarks of the hon. member for Glasgow, Carscadden (Mr. Dewar) save to say that I think that they are rather contentious. At least that is how they are heard by English ears. I assure the House that an oral statement will be made as soon as possible, the modalities of which can be determined through the usual channels.
Several Hon. Members rose—
Mr. Speaker: Order. The House will fully understand my position. The House has heard what the Leader of the House has had to say. I am not certain that I shall be able to answer any points of order, but I will do my best.
Mr. David Steel: May I seek your guidance, Mr. Speaker, as the Member who asked question No. 4 on the Order Paper? It will be within your recollection that the Secretary of State for Scotland specifically asked us to wait until the statement was made this afternoon. Rather foolishly, perhaps, we agreed to that request. In retrospect, perhaps we should not have agreed to it. Indeed, in retrospect there is no earthly reason why we should have agreed to it. The Secretary of State for Scotland is not a subsidiary Minister. He is

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entitled to give us the information. My specific point of order is to ask why we should have a separate statement taking up the time of the House. Could we not direct the Secretary of State for Scotland to answer question No. 4?
Mr. Speaker: I cannot do that.
Mr. Bill Walker: Mr. Speaker, you will recollect that during Scottish Question Time this afternoon you called Opposition Members in consecutive order on more than one occasions. In one instance, four of them were called before anybody was called on the Government side of the House. I am not making any criticism, because I was called. I ask you, however, Mr. Speaker, to reflect that you were rewarded by the behaviour of Labour Members, even those on the Opposition Front Bench who attempted to disrupt the proceedings.
Mr. Wilson: Could I raise a point of order that includes three separate aspects? First. I raised a point of order during the statement because it became clear, from the answer that was given, that the Secretary of State for Education and Science had no intention of replying—or, indeed, may not have had information to enable him to reply — to the question about the Scottish education budget. I did not wish unnecessarily to interrupt the statement because I know of your preference for dealing with points of order at a later stage, but for Scottish Members a point of order was essential at that time. Without any knowledge of whether there would be a separate statement from the Secretary of State for Scotland, we could not know whether it was appropriate for us to direct our questions to the English Minister for Education and Science.
The second part of the point of order that I wish to bring to your attention is that the Secretary of State for Education and Science has control over the Scottish universities but, by reason of an anomaly, does not have control over the grant or budget of the Secretary of State for Scotland. The particular aspect to which I wish to draw your attention and to ask you to consider raising with the Procedure Committee, is that if Scottish Members of Parliament—it has happened frequently in the past—cannot expect to receive statements from the Secretaries of State for Scotland on policy matters affecting Scotland when equivalent statements are made by their colleagues, they are effectively treated as second-class Members of this House. Immediately after the Treaty of Union I believe that one of your predecessors wrote in terms of the orders of this House that it was the English House of Commons which was to continue. If the Procedure Committee and you, Mr. Speaker, do not direct your minds to the rights of Scottish Members of this House, that is exactly what it may be.
The third aspect of the point of order that I wish to bring to your attention, following upon the point of order raised by the leader of the Liberal party concerning question No. 4, is that we were misled. We look upon you to defend our rights as Members of this House when promises are made by Cabinet Ministers. We now know how the statement on grants will impact upon the education system in England and Wales. It will do so in a manner that must cause us concern over the equivalent budget for Scotland.
Either the Secretary of State for Scotland—who has acceded to the decision announced today in the House by his colleague — is aware of how he will fund it, in
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which case he is cowardly in not facing hon. Members, or, if he does not know, he is incompetent. It may be that he is both, but in either event a serious point of principle is involved. As Scottish Members we should be entitled to answers from our own Ministers. Otherwise, our attendance at this House is a waste of time.
Mr. Douglas: On a point of order, Mr. Speaker. Rather reluctantly may I ask you to reconsider some of the remarks you have made. During the exchanges that took place this afternoon you said, if I understood you correctly, that you represented the interests of all Members of the House, not just Scottish Members. On this occasion I ask you to consider what has happened. Scottish Members have been treated not as equals but as inferior to other hon. Members. You will be well aware that in Scotland we have a separate and distinct education system. It is not sufficient to have the Secretary of State for Education and Science answer for English universities and polytechnics when in Scotland the colleges of education, central institutions and student grant system form a separate and distinct system of education.
I am asking you, Mr. Speaker, whether you are aware of that and whether it is within your power and province to ensure that the Secretary of State for Scotland simultaneously, so far as is possible, comes to the House and answers on a co-equal basis for Scotland when the Secretary of State for Education and Science answers in this House for matters within his province. When is the Secretary of State for Scotland going to come to the House today to make such a statement?
Mr. Maxton: On a point of order, Mr. Speaker. You have the responsibility to protect the reputation both of this House and of every single Member in it. The reputation of this House will today have been severely damaged in Scotland by the action of the Secretary of State for Scotland, who has refused to make a statement on the matter. The Secretary of State has an opportunity to do so now. If he is saying that he does not know what is happening in the universities he should not be in the job. The fact is that, already, during the last three weeks, we have had two examples of Ministers coming to the House late in the day, as a result of pressure from the House. The Secretary of State is in a position to do that today. He does not have to leave it until another occasion. It is right that the Secretary of State, who is present and who is in a position to answer questions, should answer questions now from Scottish Members and not make a statement later.
The Secretary of State for Scotland (Mr. George Younger)rose—
Mr. Speaker: The Secretary of State is rising to his feet. It might solve the matter if he were allowed to speak.
Mr. Younger: I may be able to help the House. The House may not be fully aware of how the Scottish public expenditure system works. It works in this way. There is a block of Scottish expenditure within which the Secretary of State has discretion to make dispositions according to his priorities. None of the decisions on any parts of the expenditure within the Scottish block have yet been finalised. Therefore, this is merely one other part of the series of decisions that are being taken by my hon. Friends and myself within the Scottish block.
May I confirm what my right hon. Friend the Leader of the House said? I shall be making a statement to the

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House when the full implications of the whole Scottish block — [Interruption.] Perhaps the House would be good enough to hear me out. It is an important point. When all the decisions are taken about all aspects of the Scottish block, which is imminent, and when all the decisions are clarified, I shall be making a statement upon which hon. Members from Scotland or anywhere else will be able to cross-question me. At this moment, quite irrespective of any changes that are taking place today as a result of my right hon. Friend's statement, there is no way in which I am in a position to give any of the figures for any of the expenditure within the Scottish block. I should be grateful if the matter could be dealt with in the normal way.
Mr. Dewar: On a point of order, Mr. Speaker. I want to be clear, through you, what the Secretary of State is saying. When the Leader of the House rose to say that there would be a statement, the timing of which would be agreed through the usual channels, I understood that that would be a statement about student grants in Scotland. The Secretary of State now seems to be saying something rather different. He seems to be saying that at some future date, probably some way ahead, there will be a general statement about the overall public expenditure system in Scotland, including education, social work, housing and everything else. Somewhere subsumed in that will be the information about student grants parallel to that which has been given by the Secretary of State for Education and Science.
That is not satisfactory. We want a separate statement, parallelling the English one, giving us the information and the figure equivalent to the £21 million in England. Presumably that is known now and we do not want to wait until some future date.
Secondly, to save a further intervention, it would be helpful to the House and to the dignity of his office, if the Secretary of State for Scotland were to say that, with hindsight at least, he regrets the way that question No. 4 was dealt with. He gave a clear impression that the details requested would be supplied during the course of this afternoon's statement. That, as the Secretary of State for Education and Science made clear, was not the case. It is unfortunate that that impression was given and I hope that the Secretary of State for Scotland will join me in regretting that.
Mr. Younger: Further to that point of order, Mr. Speaker. Of course I am sorry if any misleading impression was given by me or anyone else. I did not imagine that the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) would be expecting anything in detail until the Scottish public expenditure was settled. [Interruption.] The reason for that is perfectly simple. Whatever changes have to be made could affect many different parts of the Scottish block. Therefore, by the time I am able to make a statement about this precise aspect, all the other aspects must be decided too. They have nearly been decided and I do not expect a statement to be long delayed. But when I make a statement, of whatever sort, it will have to cover all aspects of the Scottish block because they are all interdependent.
Several Hon. Members rose—
Mr. Speaker: Order. The House has heard the Secretary of State. We have an important debate before us—
Mr. Eadie: I am demanding my right to put a point of order.
Mr. Speaker: Order. We have an important debate before us. Other hon. Members have their rights as well. If the hon. Gentleman persists in raising points of order all afternoon, I cannot stop him. Nevertheless, that is unfair to his colleagues. I shall take his point of order.
Mr. Eadie: On a point of order, Mr. Speaker. I have never unfairly exercised my rights in this Parliament and I demand to put a point of order in relation to this issue.
We are well aware of how this matter arose. To some extent, hon. Members have rights and are entitled to respect the Chair of this honourable House. I want to put it to you, Mr. Speaker, that occasions can arise when it may be convenient for you to say that you will take points of order afterwards, but there are circumstances when it is right, and in accordance with the good workings of the House, that hon. Members who rise to their feet to make a point of order should be given the right to do so at that time.
I submit today that if that right had been given to hon. Members, the incompetence that the Government have shown today would perhaps not have been as bad as it has been. There may have been some reflections by the Government when hon. Members put the points of order on the Scottish aspect of the cut in student grants and fees.
Therefore, I say in all sincerity that this issue is occupying the minds of my constituents in Midlothian in relation to the whole aspect of university education, and, indeed, all education. We want the Secretary of State to come to the Dispatch Box today to tell us what is happening to student fees and grants. I submit that we have the right to put that point of order to you.
Several Hon. Members rose—
Mr. Speaker: Order. Let me deal with one point of order at a time. It is not a new doctrine that I do not take points of order in the middle of questions. It is long established and my predecessors, as far as I know, have always adopted that practice. It is right and fair to the House.
Mr. Robert Hughes: On a point of order, Mr. Speaker. I accept fully the statement that you made earlier today that it is your duty to protect the rights of all hon. Members, from whatever part of the country they come. I also accept your remarks made slightly later that there is a responsibility on the House and on you to take account of important business that faces the House.
It will be within your recollection that yesterday there was a series of questions to the Secretary of State for Education and Science and during those exchanges the right hon. Gentleman sought, or attempted, to make it clear that he was not shifting his ground in any way. Therefore, if there is any encroachment on the important business of the day, it is precisely because the Secretary of State sought to return within 24 hours to try to change that position.
It is time that the whole subject of statements made by Ministers was re-examined. There was no earthly reason whatever why the right hon. Gentleman had to come to the House today and make the announcement that he did. It

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would have been a courtesy to the House, to the Secretary of State for Scotland and to every hon. Member if there had been a period of calm and silence. That would have allowed consultation to take place so that the right hon. Gentleman did not place the Secretary of State for Scotland in the invidious and embarrassing position in which he has been placed today.
Indeed, Mr. Speaker, the Secretary of State for Education and Science has put you in an extremely embarrassing position. He has also put me in an embarrassing position. I am not one of those who constantly harps on about the specific and special rights of Scottish Members. But I feel strongly that, given the sequence of events — the Secretary of State for Education and Science answering questions yesterday, refusing to make an announcement, followed, 24 hours later, by questions to the Secretary of State for Scotland when a specific question dealt with the issue on which the Secretary of State for Education and Science was to make his statement—it beggars belief that we should not have had proper answers from the Secretary of State for Scotland.
Nothing that the Secretary of State for Scotland says about the difficulties that he is facing in announcing his programme can make up for the fact that, if he had said earlier, during Scottish questions, that he would be making a statement after the Secretary of State for Education and Science—even if he had said then what he said later about the need to examine the budget—that might have been acceptable. But the contempt that the Secretaries of State for Education and Science and for Scotland have for the House must be ended. You, Mr. Speaker, must look seriously at the issue of statements being made. Although "Erskine May" says that a Minister does not require either your permission or that of the House, that needs to be looked at so that we can judge whether our rights are being eroded in an insidious way.
Several Hon. Members rose—
Mr. Speaker: Order. These are not matters for me. If the hon. Gentleman feels that the system is wrong, he has a right, even an obligation, to take the matter to the Procedure Committee. That is where such matters are looked at. The House decides. I am elected by the House to keep the rules as they are. That is all that I can do.
Mr. George Foulkes: Further to that point of order, Mr. Speaker. I wish to seek your guidance. Earlier this afternoon the Secretary of State for Scotland said that no decision had been made about any part of the block grant allocation for Scotland. However, the Secretary of State for Education and Science said that the Secretary of State for Scotland had decided similarly on the question of student awards. That implies that a decision has been made. How can I find out which Secretary of State is misleading the House?
Mr. Speaker: I cannot advise on tactics.
Mr. Tom Clarke: Like my hon. Friends, I have no desire to be disrespectful to you, Mr. Speaker. I know that you will understand that. However, you will recall that hon. Members have an interest in this serious subject. My own interest was shown when you called me to ask a supplementary question to the question tabled by the right hon. Member for Tweeddale, Ettrick
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and Lauderdale (Mr. Steel). In common with the right hon. Gentleman and others, I failed to get information that is essential for the whole House.
Two important matters emerged. First, after a number of points of order, the Secretary of State for Scotland conceded that he had taken a decision on principle without considering the implications. That is of the utmost importance and deserves debate.
Secondly, you, Mr. Speaker, are right to say that you have a responsibility to the whole House. Equally, the House has a responsibility to you. The Government Front Bench has neglected that responsibility by presenting such a shambles to the House. We owe it to you to offer the apology to which you are entitled.
Mr. Ewing: Further to the point of order, Mr. Speaker. I was involved in question No. 4 tabled by the leader of the Liberal party. I asked the Secretary of State why he did not intend to make a statement similar to that which was to be made by the Secretary of State for Education and Science. The record will show tomorrow that the Secretary of State said that I had read far too many whodunnit magazines and that, on this issue, he never made any separate statements. He said that when his right hon. Friend spoke about education he spoke for all education Ministers. The record will show that.
The Secretary of State for Scotland put the Secretary of State for Education and Science in an embarrassing position. The right hon. Gentleman had enough difficulties today without the Secretary of State for Scotland causing him more. The Secretary of State for Education and Science was in no position to fulfil the statement by the Secretary of State for Scotland.
When the Secretary of State for Scotland said that the Secretary of State for Education and Science would speak on behalf of the Scottish Office he knew that to be untrue. We are told that we misunderstood, but the Secretary of State for Scotland knew that what he said was untrue. I have a respect for him, but he has a duty to his office and to the House to withdraw the answer to the question so that when the record is produced it will be correct.
Several Hon. Members rose—
Mr. Speaker: I can see several hon. Members who are anxious to take part in the next debate, but that will be made difficult if we persist with points of order. I cannot take the matter further this afternoon. The sensible course would be for the matter to be discussed through the usual channels. No doubt an arrangement will be made for a statement to be made to the House by the Secretary of State for Scotland. We shall then see what he has to say. I cannot take the matter further.
Mr. Dewar: Further to the point of order, Mr. Speaker. I accept that this is a matter for the usual channels. However, I should like to say publicly that it is important for the effectiveness of the Scottish dimension within the United Kingdom parliamentary system for the statement, when it comes, not to be an overall wrap-up of public expenditure in Scotland in which the debate about student grants will be lost. We must have an opportunity soon to discuss the specific issue on the Floor of the House. If we receive a sympathetic response, I shall be happy to leave the matter there.
Several Hon. Members rose—
Mr. Speaker: I shall hear the shadow Leader of the House.
Mr. Alan Williams: On a point of order, Mr. Speaker. I am sorry, but it seems that two completely separate issues are involved. The first is the issue of a statement on student grants in Scotland which, as has been said, can be dealt with through the usual channels. The second is that a Minister has misled the House. When that happens is it not normal for the Minister to come to the House to make a personal statement? In addition to the statement about student grants in Scotland we must consider good behaviour in the House of Commons. That means that tomorrow at the start of business the Secretary of State for Scotland should come here and make a personal statement based on what the official record shows.
Mr. Speaker: As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, we cannot take the matter further this afternoon.
Mr. Denis Howell: On a point of order, Mr. Speaker. My point of order is about points of order. I agree that the House should consider your position. You were put in an intolerable position by the Government's inept handling of the issue. During exchanges you rightly said that Mr. Speaker can exercise discretion about when to take points of order. That is in accordance with precedent and with "Erskine May", which also says clearly that if an hon. Member has a point of order it is his duty to raise it immediately, if necessary interrupting a right hon. or hon. Member. More thought should be given to the position when contentious statements touching on principles are involved.
You suggest, Mr. Speaker, that the Procedure Committee might be appropriate, but will you consider the conflicting difficulties in which you are placed? The usual channels will try to assist, particularly to ensure that hon. Members have adequate notice of which statements are to be made so that they can assess their possible effect on other Departments.
Mr. Andrew Faulds: On a point of order, Mr. Speaker. You made reference earlier—the right hon. Member for Birmingham, Small Heath (Mr. Howell) also raised the point—to the practice that has developed of points of order being postponed until later. Is it not the case that this was an innovation of Speaker Thomas and yet a further illustration of his many failures of judgment? May I ask you, Sir, to take this matter back very seriously and consider whether the traditional practice of accepting a point of order when it is put and allowing it should be resumed for the good health and conduct of the business of the House?
Mr. Speaker: I think that it is a wise practice to take points of order at the end of questions. If the right hon. Member for Birmingham, Small Heath (Mr. Howell) and the hon. Member for Warley, East (Mr. Faulds) thought this matter through, they would find that we would get through fewer questions if points of order were raised in the middle of questions. The hon. Member for Warley, East will know, because he has done this himself, that most points of order arise because the hon. Member did not receive the answer he expected.

Parliamentary Questions
5.41 pm
Mr. Dennis Skinner: On a different point of order Mr. Speaker. As you know, one of your awesome tasks is to oversee questions that are tabled by hon. Members. Sometimes we are in difficulty about the aspects on which we can table questions. The subject of taxation causes difficulty, because hon. Members can ask questions only about general taxation matters and not about individual aspects. I seek your guidance on the important principle that is at stake.
In recent days there has been much discussion about giving aid to Ethiopia. As a result, a group of young people got together and made an important record. That record is selling by the thousands and is making a tremendous amount of money to go towards aid for Ethiopia. I should like to table a question to ascertain the precise amount of value added tax that will accrue from the sale of that record and go into the Government's coffers. Many of us believe that the money the Government are taking from that charitable action should to to Ethiopia, instead of to the Chancellor of the Exchequer.
I wish to ask a question not about general VAT but about the precise amount of money that the Government are receiving through VAT from the sale of the record so that I can demand that the Government send to the Ethiopians pound for pound the money they have received. I want to find out about the money that those young people have made from producing a record, some of which goes to the Chancellor.
Mr. Speaker: If the hon. Member tables that question, I shall look into it. Perhaps he will send me the record.
Mr. John Home Robertson: On a point of order, Mr. Speaker. At any point during the past hour or so, has it crossed your mind that there is great merit in the argument for establishing a Scottish assembly?
Mr. Speaker: That frequently crosses my mind.

Teachers (Pay)
5.42 pm
Mr. Malcolm Bruce: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the strike today of Scottish teachers over the failure of the Secretary of State for Scotland to grant an independent pay review."
This matter is urgent because this is a major national strike involving more than 30,000 teachers — 80 per cent. of the members of the Educational Institute of Scotland. The matter is specific because that strike is disrupting the education of many thousands of pupils throughout Scotland. That is a regrettable development. The matter is also specific because the Government could do something about the problem by granting teachers an independent pay review.
This matter is urgent because the lack of independent pay review is leading to the disruption of the programme to develop standard grade examinations in Scotland. It is likely that the whole system could collapse in the next year or two and that students will be unable to take those examinations in 1986. The matter is urgent also because, already, many dedicated teachers are leaving, or contemplating leaving, the profession, specifically science and maths teachers who are in most need. They are leaving because they can receive better pay in other sectors.
I therefore urge you, Mr. Speaker, to give me leave to move the Adjournment of the House so that this matter can be debated and we can impress upon the Government the need to take positive action to grant an independent pay review and allow Scottish teachers to get on with the job they want to do—that of teaching our children.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the strike today of Scottish teachers over the failure of the Secretary of State for Scotland to grant an independent pay review."
I have listened carefully to the hon. Member, but I regret to say that I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 10 and, therefore, I cannot submit his application to the House.

BILLS PRESENTED
  INTOXICATING SUBSTANCES (SUPPLY)
  Mr. Neville Trotter, supported by Mr. Alex Carlile, Sir Geoffrey Finsberg, Mr. Marcus Fox, Mr. Roy Galley, Mr. Harry Greenway, Mr. Michael Hirst, Mr. Ron Lewis, Mr. Christopher Murphy, Mr. Reg Prentice, and Mr. Tom Torney, presented a Bill to prohibit the supply to persons under the age of eighteen substances which may cause intoxication if inhaled: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 19.]
  SEXUAL OFFENCES
  Miss Janet Fookes, supported by Mr. Charles Irving, Mr. Tom Cox, Mr. Anthony Beaumont-Dark, Mr. Robert Parry, Mr. Christopher Chope, Mr. Tony Lloyd, and Mrs. Elaine Kellett-Bowman, presented a Bill to make, as respects England and Wales, provision for penalising in certain circumstances the soliciting of women for sexual purposes by men, and to increase the penalties under the Sexual Offences Act 1956 for certain offences against women: And the same was read the First time; and ordered to be read a Second time upon Friday 25 January and to be printed. [Bill 20.]
  LOCAL GOVERNMENT (ACCESS TO INFORMATION)
  Mr. Robin Squire, supported by Mr. W. Benyon, Mr. Marcus Fox, Sir Bernard Braine, Mr. Jonathan Aitken, Mr. Charles Irving, Mr. Jim Lester, Mr. Allan Roberts, Mr. Alf Dubs, Mr. Clive Soley, Mr. Simon Hughes, and Mr. Michael Hancock, presented a Bill to provide for greater public access to local authority meetings, reports and documents subject to specified confidentiality provisions; to give local authorities duties to publish certain information; and for related purposes: And the same was read the First time; and ordered to he read a Second time upon Friday 1 February and to be printed. [Bill 21.]
  WILDLIFE AND COUNTRYSIDE (AMENDMENT)
  Dr. David Clark, supported by Mr. Andrew F. Bennett, Mr. Jim Callaghan, Mr. D. N. Campbell-Savours, Mr. John Cartwright, Mr. Sydney Chapman, Mr. Ron Davies, Mr. Peter Hardy, Mr. Mark Hughes, Mr. Stephen Ross, and Mr. Chris Smith, presented a Bill to amend the Wildlife and Countryside Act 1981: And the same was read the First time; and ordered to be read a Second time upon Friday 8 February and to be printed. [Bill 22.]
  UNBORN CHILDREN (PROTECTION)
  Mr. J. Enoch Powell, supported by Sir Bernard Braine, Mr. Donald Stewart, Mr. A. J. Beith, Rev. Martin Smyth, Mr. Anthony Beaumont-Dark, Mr. Ian Campbell, Sir Gerard Vaughan, Mr. James White, and Mrs. Ann Winterton, presented a Bill to make provision relating to human embryos produced by in vitro fertilisation, and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 15 February and to be printed. [Bill 23.]
  COPYRIGHT (COMPUTER SOFTWARE) AMENDMENT
  Mr. William Powell, supported by Mr. Nicholas Lyell, Mr. Nicholas Baker, Mr. Bryan Gould, Mr. David Madel, Mr. Richard Shepherd, Mr. Nigel Forman, and Mr. Patrick Nicholls, presented a Bill to amend the Copyright Act 1956 so as to provide new penalties for offences relating to infringing copies of computer programmes; to provide for the issue and execution of search warrants in relation to such offences; and to confirm that copyright subsists in computer programmes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 24.]
  SMALL BUSINESS
  Mr. Michael Grylls, supported by Mr. David Howell, Mr. William Cash, Mr. Michael Fallon, Mr. Richard Wainwright, Mr. Spencer Batiste, Mr. Neil Hamilton, Mr. John Browne, Mr. Andrew Rowe, Mr. Phillip Oppenheim, and Sir Philip Goodhart, presented a Bill to make further provision for, and to amend the law relating to, small businesses: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 25.]
  SPORTS FIELDS AND RECREATIONAL FACILITIES
  Mr. John Carlisle, supported by Mr. Nicholas Soames, Mr. Colin Moynihan, Mr. Richard Ryder, Mr. Robert Atkins, Mr. Martin Brandon-Bravo, Mr. Tim Brinton, Mr. Jim Lester, Mr. David Ashby, Mr. Jim Spicer, Mr. Matthew Parris, and Mr. Nicholas Winterton, presented a Bill to enable the Government to direct public bodies and other owners of recreational facilities to inform them of any proposed sale or change of use of sports fields or facilities, to monitor annually the loss of playing fields and facilities, and to encourage local authorities and others to offer the use of their sports facilities to voluntary sports bodies and community groups: And the same was read the First time; and ordered to be read a Second time upon Friday 25 January and to be printed. [Bill 26.]
  WATER AUTHORITIES (MEETINGS)
  Mr. Gerald Bermingham, supported by Mr. Marcus Fox, Mr. Derek Fatchett, Mr. Clement Freud, Mr. Michael Knowles, Mr. Robin Corbett, Mr. Matthew Parris, Mr. Frank Haynes, Mr. John Ryman, Mr. Allan Rogers, Mr. Robert Rhodes James, and Mr. Anthony Beaumont-Dark, presented a Bill to apply the provisions of the Public Bodies (Admission to Meetings) Act 1960, relating to the admission of the press and other members of the public, to meetings of water authorities, and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 February and to be printed. [Bill 27.]
  EDUCATION (SCHOOL BUDGETS)
  Mr. David Madel, supported by Mr. Gerald Bowden, Mr. David Knox, Mr. Michael Stern, Mr. Alan Haselhurst, Mr. Harry Greenway, Mr. John Carlisle, Mr. Robert Hicks, Mr. Peter Bruinvels, Mr. Graham Bright, and Mr. Hugh Dykes, presented a Bill to require local education authorities to publish annually certain financial information relating to maintained, aided and special agreement schools; to require the governing bodies of aided or special agreement schools to publish accounts of income and expenditure; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 8 February and to be printed. [Bill 28.]
  CHARTER TRUSTEES
  Mr. Charles Morrison, supported by Mr. Douglas Hogg, Mr. Robert Key, Mr. Richard Alexander, Mr. Michael Howard, and Mr. Jonathan Aitken, presented a Bill to provide for the continuation of the charter trustees of any city or town and for the preservation of their powers and of the privileges and rights of the inhabitants of their area upon that area becoming comprised in a borough: And the same was read the First time; and ordered to be read a Second time upon Friday 15 February and to be printed. [Bill 29.]
  HOSPITAL COMPLAINTS PROCEDURE
  Mr. Michael McNair-Wilson, supported by Mr. Patrick McNair-Wilson, Mr. Steve Norris, and Mrs. Renée Short, presented a Bill to oblige Regional Health Authorities to establish a complaints procedure for hospital patients and to draw such a procedure to the attention of patients: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 30.]
  CONTROLLED DRUGS (PENALTIES)
  Mr. Keith Raffan, supported by Mr. Mark Carlisle, Sir Edward Gardner, Mr. Teddy Taylor, Mr. John Wheeler, Mr. Frank Field, Mr. David Alton, Mr. Harold McCusker, Mr. Dafydd Wigley, Mr. John Cartwright, Mr. Roland Boyes, and Mr. Ron Davies, presented a Bill to increase the penalties for certain offences relating to controlled drugs within the meaning of the Misuse of Drugs Act 1971: And the same was read the First time; and ordered to be read a Second time upon Friday 1 February and to be printed. [Bill 31.]
  NORTHERN IRELAND (TERMINATION OF JURISDICTION)
  Mr. Ernie Roberts, supported by Mr. Tony Benn, Miss Joan Maynard, Mr. Bob Clay, Mr. Derek Fatchett, Mr. Dennis Canavan, Mr. Dennis Skinner, Ms. Clare Short, Mr. Jeremy Corbyn and Mr. Robert Parry, presented a Bill to make provision with respect to the termination of Her Majesty's jursidiction in Northern Ireland; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 15 February and to be printed. [Bill 32.]

  MOTOR-CYCLE CRASH HELMETS (RESTRICTION OF LIABILITY)
  Mr. Ivor Stanbrook, presented a Bill to exempt persons other than the actual offender from criminal liability in

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  resepct of the offences of driving or riding on a motorcycle in contravention of regulations requiring the wearing of crash helmets: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 33.]

  FABRIC ORIGIN MARKING
  Mr. Geoff Lawler, supported by Mr. Gary Waller, Mr. Richard Wainwright, Mr. Tom Torney, Mr. Nicholas Winterton, Mr. James Lamond, Mr. Cyril Smith, Mr. Barry Sheerman, Mr. Peter Thurnham, Mr. Ken Hargreaves, and Mr. Alastair Burt, presented a Bill to require the indication of country of origin for woven fabrics in outer wear textile products: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 34.]
  MINIMUM WAGES ETC.
  Mr. Dave Nellist, supported by Mr. Terry Fields, Mr. Eddie Loyden, Mr. Dennis Skinner, Mr. Dennis Canavan, Mr. David Winnick, Mr. Gerald Bermingham, Mr. Terry Lewis, Mr. Brian Sedgemore, Mr. Max Madden, Mr. Roland Boyes and Mr. Robert Litherland, presented a Bill to provide for the setting and enforcement of statutory minimums below which wages and allowances shall not fall with respect to different classes of employees and trainees; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 35.]

  COMPANIES (POLITICAL DONATIONS)
  Mr. Derek Fatchett, supported by Mr. Ian Mikardo, Ms. Jo Richardson, Mr. John Maxton, Mr. Doug Hoyle,
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  Mr. Ron Davies, Mr. William O'Brien, Mr. Robert N. Wareing, and Mr. Chris Smith, presented a Bill to require ballots of shareholders of companies incorporated under the Companies Act 1948 in respect of proposed donations for political purposes; to define political purposes under this Act; to require political funds to be established for the payment of such donations; to specify the qualfications for receipt of such donations; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 36.]

  GAMING (BINGO)
  Mr. Peter Fry, supported by Mr. Fergus Montgomery, Mr. Bernard Conlan, Mr. John Forrester, Mrs. Ann Winterton, Mr. Barry Porter, Mr. Eldon Griffiths, Mr. Sydney Bidwell, and Mr. Michael Moms, presented a Bill to amend the Gaming Act 1968 in respect of games which are played on bingo club premises and in which the players may be on different bingo club premises: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 37.]
  ROAD TRAFFIC (PRODUCTION OF DOCUMENTS)
  Mr. Tim Smith, supported by Mr. Geoff Lawler, Mr. Robert Kilroy-Silk, Mr. Andrew MacKay, Mr. Mark Fisher, Mr. Tim Brinton, Mr. David Alton, Mr. Tony Blair, Mr. Tony Favell, and Mr. Gerald Bermingham, presented a Bill to amend certain provisions relating to the production of documents under the Road Traffic Act 1972 and the Transport Act 1982: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 38.]

Hong Kong
Mr. Speaker: This important debate on the Hong Kong agreement has had a rather late start, for reasons that the House well knows. I must announce to the House that I propose to operate the 10 minute limit on speeches between 7 pm and 8.50 pm. I hope that all hon. Members will bear that limitation in mind when making their speeches, because, as I said, this debate has had a late start and there is great pressure from hon. Members to participate.
5.49 pm
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I beg to move:
That this House, having considered the views of the people of Hong Kong as set out in the reports of the Assessment Office and the Independent Monitoring Team published in White Paper, Cmnd. 9407, approves Her Majesty's Government's intention to sign the agreement on the future of Hong Kong negotiated with the Chinese Government, which was published in White Paper, Cmnd. 9352.
The draft agreement which the motion commends for the approval of the House is a document of historic importance. It has a significance that goes well beyond Hong Kong itself. But it is with the unique and thriving community of Hong Kong that the House is rightly concerned today.
Hong Kong owes its success to the spirit of free enterprise and resourcefulness that has for generations been displayed by the people of Hong Kong of all races. It is that spirit that has created Hong Kong's unique way of life, and it is the preservation of that way of life, its rights and freedoms, and the prosperity and stability on which it has been built, that has been our firm objective. We have sought that throughout all the work that has produced the agreement that is the subject of today's debate. In that work, I have been most grateful to the official Opposition and to hon. Members in all parts of the House for the understanding and support which they have given me in a task which I have been able to feel I have been undertaking on behalf of the whole House.
The agreement that has resulted must, of course, be judged against the background of the historical realities that created the problem with which we are concerned today.
In May 1898, the second convention of Peking was signed, in Peking, by the British Minister resident there, Sir Claud MacDonald. I cannot believe that at the time when he signed that document he had any idea of the complexity of the problems that he would be bequeathing to the present generation.
Under that convention, the area which later became known as the New Territories of Hong Kong was leased to Britain for a period of 99 years. Those territories were added to the relatively small areas of Kowloon and Hong Kong Island, which had been ceded to Britain during the previous half-century. That 1898 lease covers 92 per cent. of the land territory of Hong Kong as it is today. It expires, of course, on 30 June 1997. On that date, the New Territories will revert to China.
The ceded territories, the other 8 per cent., have, over the past 87 years, become completely integrated with the leased territories. On their own, they would not be viable. It is those circumstances that compel the need for a specific agreement at this time.
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Yet the need for accommodation with China is not new to Hong Kong. Throughout most of its existence, Hong Kong has been dependent on co-operation with its giant neighbour. In recent years that has developed into a strong and complex relationship.
That is the background to the long— and at times very difficult—negotiations that have been taking place over the past two years. They have had to be conducted in confidence. I know that the need for confidentiality has been frustrating—for Parliament and, of course, much more so for the people of Hong Kong. Both have shown great understanding, and both, I hope, will take some comfort from my judgment that confidentiality was absolutely essential to the success of the negotiations.
I should like to give warm thanks to the members of the Hong Kong Executive Council, who played a vital part in advising the Government, through the Governor, throughout the negotiations. I give thanks too to the members of the Legislative Council. The confidentiality of the negotiations posed particular problems for them.
The Governor of Hong Kong has borne the dual burden of continuing responsibility for the government of Hong Kong and of continuous involvement in the negotiations. If I may be allowed to say so, he has borne that heavy burden with great distinction.
Our Ambassadors at Peking, successively Sir Percy Cradock and Sir Richard Evans, have led the negotiating team with great skill. They and all the officials involved, from the Hong Kong Government as well as from our own diplomatic service, well deserve the tribute paid to them by the Far Eastern Economic Review, which spoke of the "sheer professionalism" of the British team. I have no doubt that the whole House will wish to join me in thanking and congratulating them all.
Throughout all our work, we have aimed, of course, to reach agreement on arrangements which would be acceptable to the people of Hong Kong; arrangements that would enable them, and the international community, to have confidence in the future of the territory.
From the outset it was clear that such arrangements would also need to be acceptable to the Chinese Government. That is just another reflection of the fact that Hong Kong could never have become the place that it is today without establishing a practical relationship with the People's Republic of China.
In the early part of the negotiations we looked for ways which might allow a British Administration to continue in Hong Kong after 1997—on the basis that Britain would recognise China's sovereignty over the whole of Hong Kong. That course would have meant the minimum of change. The people of Hong Kong certainly expected that we would, as a first step, see if that was possible. So we tried, over 12 months of negotiation. But it became quite clear that a solution along those lines would not be acceptable to the Chinese Government, and that if we had persisted in seeking it, the talks would have broken down. That would not have altered the fact that 92 per cent. of the territory would revert to China, under the lease, in 1997. But in that way it would have done so without any agreement on its future.
We concluded that a breakdown in negotiations, with all the uncertainties that that would have created, could not in the long view offer satisfactory prospects for the people of Hong Kong, and for is future stability and prosperity.
We therefore decided, with the agreement of the Governor and of the Executive Council of Hong Kong, to

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seek to negotiate arrangements under which British administration in Hong Kong would cease after 1997 and Hong Kong, though becoming a part of China, would retain her distinctive way of life as a special administrative region of China.
The draft agreement before the House today is the result of the negotiations which were brought to a conclusion on that basis. If the motion on the Order Paper is carried, my right hon. Friend the Prime Minister and I will travel to Peking later this month to sign the agreement—and we shall, of course, be going as well to Hong Kong. This will be my third visit to Peking in nine months. It will provide an opportunity to renew the close working relationship that we have established with our Chinese colleagues. It must be said that this agreement would not have been possible without the vision and realism which has characterised the approach of the Government of the People's Republic of China to these negotiations. I should like to express my personal appreciation of the part played by my opposite number, Mr. Wu Xueqian, in bringing our negotiations to a successful conclusion.
Following signature, we shall bring forward legislation early next year to provide for termination of sovereignty in 1997, and to provide powers to make other changes to the law, including the nationality law, which will be necessary in connection with the agreement and termination of sovereignty.
The agreement is both comprehensive and detailed. Since it was published on 26 September, hon. Members will have had more than two months to study it. I described its main provisions in my statement of 25 October. Today I want only to stress a few of its significant features.
First, the joint declaration and its annexes constitute a legally binding international agreement. As the Chinese Foreign Minister recently told the Standing Committee of the National People's Congress in Peking, the joint declaration is a form of international treaty; it has the same force in international law and is legally binding.
Second, the policies set out in the agreement will, under the terms of the agreement, be stipulated in a basic law which will be passed by the National People's Congress of China and which will establish the special constitutional status of the Hong Kong special administrative region. The agreement provides that these policies will remain unchanged for 50 years.
The content of the basic law, and the arrangements for its drafting, are rightly of great interest to the people of Hong Kong. They are of crucial importance.
The law will be passed by the Chinese National People's Congress under the powers conferred on it by articles 31 and 62 of the Chinese constitution. Those articles provide the basis for special administrative regions with systems different from those in other parts of China.
It is, of course, the Chinese who must undertake the drafting of the basic law. But the joint declaration states that the basic policies for Hong Kong set out in the joint declaration itself, and elaborated in annex 1, will be stipulated in the basic law. The agreement thus provides clear guidelines for the drafting of that law.
I know that the Chinese leaders understand the great importance of this. I am confident, too, that they will have noted the hope, which has been widely expressed in recent weeks, that the people of Hong Kong will be fully consulted about the drafting of the law.
The Chinese Government have indicated that the people of Hong Kong will be consulted, though the exact form of
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that consultation has yet to be made clear. I welcome that indication. In that and in other respects, we stand ready to extend to the Chinese our fullest co-operation.
The third point I want to stress about the agreement is that it provides sufficient detail, in the many areas it covers, to give confidence, both internationally as well as in Hong Kong itself, that the future is a secure one. It provides a high level of autonomy for Hong Kong, as a special administrative region of the People's Republic of China. It provides a firm guarantee that Socialist policies pursued on the mainland will not be practised in Hong Kong. It provides for the administration of Hong Kong to be in local hands, and for the Executive to be accountable to an elected legislature. It provides for judicial power to be exercised independently and for a public service in which appointment and promotion will depend on qualifications, experience and ability.
The preservation of the legal system and courts to which Hong Kong is accustomed is fundamental to the continuation of Hong Kong's way of life. The agreement provides for this. Appeals to the Privy Council will cease. Instead there will be a Court of Final Appeal in Hong Kong.
The English language will continue to have equal validity with Chinese in the courts. The work of translating the laws of Hong Kong into Chinese is now going ahead.
The agreement provides for Hong Kong to continue as a world commercial, financial and communications centre. It will be responsible for conducting its own external trade, have its own freely convertible currency, and enjoy free flow of capital without exchange control.
Although the Central People's Government in China will be responsible for its external relations, Hong Kong will have considerable autonomy in conducting relations with other countries in many important areas. There are arrangements permitting Hong Kong to continue its participation in the GATT and other international trade agreements, and to participate in relevant international organisations. There are provisions for Hong Kong to continue to be an important centre for shipping and civil aviation.
There are full and explicit provisions for the preservation of human rights and freedoms, including those specified in the international covenants on civil and political and economic, social and cultural rights.
Finally, secure arrangements have been made both for the recognition of existing land leases after 1997, and for the extension of leases expiring before 1997, and for the granting of new leases for terms of up to 50 years beyond 1997. Those are only the broad outline. There is much more detail in the agreement.
So far, I have dealt with the future after 1997, but the next 12 years are also crucial for Hong Kong.
Mr. Eric Deakins: Whose task will it be to secure international recognition of this agreement and its terms in the period after 1997? Is it for China or for Britain, or will it be a combination of both? If it is both, has an adequate machinery been set up for that purpose?
Sir Geoffrey Howe: There are various aspects of that question. If the hon. Gentleman is referring to the need to secure continued recognition of Hong Kong's place in the GATT and other international arrangements, that is something on which both countries will co-operate. That is specifically provided for as one of the objectives of the joint liaison group, to which I shall refer in a moment.

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The next 12 years are also crucial for Hong Kong. In order to ensure the success of this enterprise, and to make sure that the provisions of the agreement are put into practice—such as the one that I have just mentioned—there will be a need for close co-operation between Britain and China in the period between now and 1997, especially in the later years. The joint liaison group which is provided for by the agreement is the best means of achieving this and of avoiding abrupt changes in 1997 which might disturb the continuity of life at that time.
The joint liaison group will be charged with the tasks of consulting on the implementation of the joint declaration and of discussing matters relating to the smooth transfer of government in 1997, as well as exchanging information. It will continue in being until the year 2000.
It is our firm intention that the group should carry out its functions so as to build confidence between the British and Chinese Governments on all matters relating to the agreement, as well as building confidence among the people of Hong Kong. We shall give the group our full co-operation to that end, because I regard its work as of the highest importance.
Mr. Alfred Morris: The right hon. and learned Gentleman will be aware that some people in Hong Kong are concerned that they could become stateless persons. Can he say anything on that important matter?
Sir Geoffrey Howe: That could arise in certain cases. It will be dealt with so as to ensure that statelessness does not happen. This matter will be included in the provisions of the Bill that we shall be introducing in the new year. I am glad to have had the opportunity of dealing with that point.
Mr. David Howell: If the joint liaison group is to play a leading part in underpinning the international status of the special administrative region after 1997, will people from Hong Kong be among its members?
Sir Geoffrey Howe: I was about to come to that point. I appreciate my right hon. Friend's concern, but perhaps he will allow me to deal with it at the appropriate point in my speech.
We took pains to ensure that there could be no possible ambiguity about what the group's functions will be. In no sense will it be a shadow Government. The agreement makes it plain that, in Chinese phraseology, the group shall be an organ of liaison, not an organ of power, and that it shall take no part in the administration of Hong Kong. The agreement also states explicitly that Britain will remain fully responsible for the administration of Hong Kong until 1997. I assure the House of the Government's wholehearted commitment to the full exercise of their responsibilities throughout that period.
Of course, the interests of Hong Kong will need to be properly represented on the joint liaison group. The exact composition of the group has yet to be determined, but I should like to make it clear that the British delegation will include officials from the Hong Kong Government. There will continue to be the fullest consultation with the Executive Council and with other representatives of the
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people of Hong Kong. It is important that the group should be able to enjoy the kind of confidence that is essential if it is to carry out its work properly.
Mr. Russell Johnston: Is the right hon. and learned Gentleman saying that while officials of the Hong Kong Government will serve on the British side of the joint liaison group, there will be no unofficial representatives?
Sir Geoffrey Howe: Annex II to the joint declaration on page 25 of the White Paper makes it clear that the joint liaison group shall enjoy diplomatic privileges. It is a diplomatic group. There is provision for the appointment of representatives of that kind to the group. However, as the group carries out its work — no doubt working through a variety of methods as time goes by — it is important that there is full representation of the viewpoint of the Hong Kong people. This point has been raised with me in a number of places. It is important that it takes sufficient account of the view of the Hong Kong people, as I hope we have been able to do during our negotiations thus far. As the group's work intensifies, that will be important.
Mr. Robert AdleyIs my right hon. and learned Friend saying that the joint liaison group will remain throughout the period of 12 years, that in no way will it evolve and that it will remain a purely diplomatic body?
Sir Geoffrey Howe: The agreement provides that the joint liaison group may, by agreement between the two sides, decide to set up specialist sub-groups to deal with particular subjects requiring expert assistance. Members of the joint liaison group and sub-groups can be attended by experts other than members of the joint liaison group. There is provision for a steady development of the working of the group in a practical fashion. The group will remain a body of which officials from either side will be members. That is part of the nature of the group, and those officials will include those from the Hong Kong Government. These matters are precisely set out in the agreement.
Mr. Robert Parry: Regarding representation on the liaison group, the Foreign Secretary will be aware that people from Hong Kong should sit on it. Is that the position?
Sir Geoffrey Howe: I have made it clear that officials of the Hong Kong Government will be members of the group. Beyond that there will be provision for input from the people of Hong Kong. It is plainly important that that should be so.
I have a long speech to make to introduce the matter. My hon. Friend the Minister of State, Foreign and Commonwealth Office will be able to answer these questions in more detail when he replies. However, the point raised by hon. Members relates to a point that I wish to underline.
Our aim throughout the negotiations has been to secure an agreement that would be acceptable to the people of Hong Kong. The Government have known from the start that the House would certainly wish to be satisfied on that point. That is why we decided that an assessment office should be set up in Hong Kong to collate and analyse the views of the people of Hong Kong on the draft agreement. Their report, together with the report of the two monitors whom I appointed to observe their work, was published as

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a White Paper on 29 November. That White Paper is the second document that is before the House today, alongside the draft agreement itself.
The period of assessment in Hong Kong ended on 15 November. It was a considerable achievement that a clear and comprehensive assessment report, as well as the report of the monitoring team, should have been compiled, forwarded and published within two weeks so that it was available to hon. Members within a fortnight at the completion of the process. I should like to thank the head of the assessment office, Mr. Iain MacPherson, the two monitors, Sir Patrick Nairne and Mr. Justice Li, and everyone else concerned for completing their work in time for the House to receive their reports in that way.
I am glad to draw the House's attention to the conclusion of the assessment office, endorsed by the monitors, that
"most of the people in Hong Kong find the draft agreement acceptable".
That is an authoritative, and most important, conclusion. It is based on careful analysis of the whole range of submissions and statements received. All the principal representative bodies in Hong Kong, along with the overwhelming majority of organisations and groups and most of the individuals expressing a view, accepted the draft agreement.
The overall picture from reports by and through the media was found to be one of general acceptance. The same view emerged from various independent opinion surveys. The independent monitors, who watched the work of the assessment office at every stage, confirmed that the office had performed its functions properly and impartially.
By any standards there has been a very vigorous and public debate on the draft agreement since it was published in Hong Kong. Over 3·5 million copies of the agreement were distributed in Hong Kong. The fact that more than 1 million of them were distributed by the New China news agency says something about the relationship within which the assessment was conducted. The assessment office received nearly 2,500 direct submissions, many from organisations representing a huge membership. That compares very favourably with previous exercises of consultation in Hong Kong.
The assessment office took into account 273 reports of discussions, debates, seminars, public speeches and interviews, and the results of 23 opinion surveys of various kinds. By any standards, it was a most thorough exercise in information and consultation.
One point on which a number of people commented in the course of this process was the fact that the draft agreement could not in any case be amended. I want to deal directly with this.
The normal practice in negotiating international agreements is that, once they have been initialled, they are not open to amendment. There is good reason for that. It is that in such cases any attempt to change the draft agreement would risk disturbing the whole delicate balance that had been established. So it was in the present case. That is why we took such trouble to consult the Executive Council at every turn during the negotiations, and that is why I made statements on my two visits to Hong Kong in April and July. In that way, we offered the people of Hong Kong opportunities to comment on the likely shape of the emerging agreement. Characteristically and rightly, they took advantage of those opportunities.
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Subsequently, the assessment exercise has enabled people in Hong Kong to express their anxieties about the completed draft agreement. The report gives a clear account of them. That will be of enormous value to us during the process of implementing the agreement in the years ahead and during the discussions we shall have in the future with the Chinese Government through the joint liaison group. That has been an added advantage of the whole exercise.
I shall now deal with one or two other matters which have attracted attention. The first is nationality. It was one of the most difficult subjects in the negotiations. Because it is also a matter which affects people in their personal lives, it gives rise to very strong emotions. It was not easy to reconcile the conflicting interests involved.
Nevertheless, I believe that what has been achieved is a reasonable answer to the problems. The Chinese Government were not prepared to agree that anyone born in Hong Kong after 1997 should acquire British nationality by virtue of their connection with Hong Kong.
What we have achieved is agreement with the Chinese Government on measures which will mean that those who are British dependent territories citizens before 1 July 1997 can retain during their lifetime an appropriate status, which by definition will be a form of British nationality. As with their present status, that will not entitle them to settle in the United Kingdom. But it will enable them to use a British passport and so to avail themselves, except in Hong Kong and China, of British consular protection.
Those arrangements have been set out in a draft exchange of memoranda which, although they are not part of the agreement itself, were agreed between the two sides and published alongside the agreement.
We were not able to provide that those persons who had been British dependent territories citizens before 1997 should transmit that status to their children for one generation thereafter. Obviously, I recognise that that has been a disappointment to many people in Hong Kong.
Mr. Andrew Faulds: Since that matter is not part of the agreement but is in an annex, would it be open to reconsideration in legislation, which must follow, about British nationality?
Sir Geoffrey Howe: I should not like to give the hon. Gentleman the impression that that could be open to consideration. I know from observations that he and other hon. Members have made in the past that the matter has been regarded, understandably, as being of importance. During negotiations transmissibility was unattainable. The compromise which was arrived at was the best that could be achieved. I have no doubt about that.
The second issue that I want to mention is the stationing of Chinese forces in Hong Kong after 1997. Under the agreement, defence is a matter for the Central People's Government. However, the agreement clearly provides that the special administrative region government will have full responsibility for the maintenance of public order and that forces sent by China for the purpose of defence shall not interfere in its internal affairs. I am confident that the Chinese Government are aware of the sensitivities in Hong Kong on this matter, and that they will act prudently.
I have one final point about the agreement. Some have asked whether there can be any guarantee that the Chinese Government will keep the agreement. There is no such thing as absolute certainty in relations between sovereign

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states. But I believe that we can all have confidence that the agreement will be observed. I say that for the following reasons.
The best guarantee of a country's performance is its own self-interest. The House will need no reminding of the United Kingdom's strong interest in adhering to this agreement and making sure that it works. China has a matching interest. First, China has and is likely to continue to have strong economic reasons for wishing to see Hong Kong remain stable and prosperous. Secondly, and perhaps even more important, the whole course of Chinese reunification, which has always been a central policy of the Chinese Government, is likely to be connected to the success of the agreement.
Both countries have given their commitment to the agreement. Both countries will wish to maintain their reputation by upholding the agreement in the spirit in which it was made.
It would be too much to expect that this document, which has emerged from extremely complex and sometimes difficult negotiations, could provide the whole answer to every problem. In some areas it will be necessary to elaborate the general principles set out in the agreement. One such area is the constitutional arrangements and government structure of the future Hong Kong special administrative region.
In that connection I welcome the White Paper on constitutional development which has just been published by the Hong Kong Government. It provides for substantial development towards representative institutions in the 1985 elections, and for the prospect of further development in this direction following a further review in 1987, which will consider also the question of direct elections. At the same time it rightly avoids sudden and dramatic changes, which could unsettle the very stability that all our efforts are designed to secure.
I have already told the House that we regard the next 12 years as crucial. We shall need to achieve progress in constitutional development. At the same time, we shall need to keep constantly in mind the unique circumstances of Hong Kong, and its future position as a special administrative region of the People's Republic of China.
Mr. Ivor Stanbrook: There is one important matter to which my right hon. and learned Friend has not referred, and which is referred to only briefly in the White Paper, and that is the position of the British expatriate staff in the public service of Hong Kong. Will my right hon. and learned Friend bear in mind that in the past, whenever a colony has achieved its independence, there has been a public officers' agreement, under which provision has been made for their future career prospects and pensions, and for compensation for loss of office arising out of constitutional changes? Will he give an undertaking that similar arrangements will be made for members of Her Majesty's overseas Civil Service in Hong Kong?
Sir Geoffrey Howe: I am grateful to my hon. Friend for raising that point, about which he has already asked several questions. As has been pointed out, the draft agreement in annex I, part IV provides satisfactorily for continuity of service by serving officers in the public service of Hong Kong on terms and conditions, including pay and pensions, that are no less favourable than before
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1 July 1997. Those provisions apply to members of Her Majesty's overseas Civil Service serving in Hong Kong as well as to other civil servants.
The resumption of sovereignty over Hong Kong by the People's Republic of China raises similar issues in respect of Her Majesty's overseas Civil Service as independence did for other dependent territories. However, it is not possible to define now, 12½ years in advance of constitutional change, all the arrangements that will apply to members of Her Majesty's overseas Civil Service serving in Hong Kong and to payments of their pensions by the Hong Kong special administrative region after 1 July 1997. Thus, at this stage, I draw my hon. Friend's attention to the contents of the agreement, which he has seen. I understand his concern and I hope that I have shown our appreciation of it.
Sir Nicholas Bonsor: There is one other peripheral but important matter that I should like my right hon. and learned Friend to comment on, and that is the long-term fate of the Vietnamese refugees in Hong Kong. He will be aware of the difficulties that the Hong Kong Administration face in trying to place those refugees throughout the world, and of the Government's reluctance—having already done a great deal—to take any more refugees now. I should be grateful if my right hon. and learned Friend would confer with my right hon. and learned Friend the Secretary of State for the Home Department to ensure that we take some refugees, and that we make every effort to encourage other countries to do so.
Sir Geoffrey Howe: Again, I am grateful to my hon. Friend for raising that point. Of course, it goes a little outside the debate that I am now concerned with, in commending the agreement to the House. But in so far as it is within the scope of today's debate, I am sure that my hon. Friend the Minister will have something to say about it at the end of the debate. However, that point takes us on to rather different territory.
Mr. Neville Trotter: I think that my right hon. and learned Friend has set at rest the worry about the role of the People's Liberation Army within the region, as it will not be involved in internal security. But there is another worry, and that is that conscription might be applied. That worry should be set at rest as soon as possible. Might it not be a good idea to establish some internal security force for the policing of the frontier with the rest of China, so that young people in Hong Kong can serve in that body and not be in any way subjected to the possibility of conscription to the PLA?
Sir Geoffrey Howe: It is obviously important that the arrangements that are to be in place after 1997, whereby public order is the responsibility of the government of the special administrative region, should be considered and developed so far as necessary. Conscription is not mentioned in the agreement. The Chinese Government have not suggested that there will be conscription, and there is no reason to assume that there will be such a thing. I cannot say more than that at this stage.
Mr. Faulds: Will the right hon. and learned Gentleman give way on that point?
Sir Geoffrey Howe: I shall not give way. I must try to draw my remarks to a close, as I want other hon. Members to have a chance of taking part in the debate. I

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have said as much as I can now about the balance of factors that we have to take into account on constitutional development.
I believe that what has emerged from these negotiations is a bold and imaginative plan for the future of Hong Kong. The concept of maintaining two separate political, economic and social systems within one country is a farsighted one, which is closely associated with Chairman Dengxiao Ping himself. As a means of reconciling the apparently irreconcilable, it could have important implications for problems in other parts of the world.
I am greatly encouraged by the favourable reception given to this draft agreement internationally—and not least by the major industrialised nations that can play such an important part in Hong Kong's future prosperity. Indeed, 1997 will not just mark the end of an era in Hong Kong but more important than that, it will mark the beginning of a new era.
The success of this agreement will depend not only on China and the United Kingdom but to a very large extent on the people of Hong Kong and on their willingness to make it work. As the House well knows, they are resourceful and resilient people. I believe that there is every chance that in the 21st century Hong Kong will continue to be the striking financial, economic and social success that it is today.
We shall certainly continue fully, responsibly and effectively to discharge our obligation for the administration of Hong Kong until 1997. Thereafter we shall follow the fortunes of the Hong Kong special administrative region with the utmost attention and interest.
This is a debate about the future of Hong Kong and about the draft agreement before the House today. I close by saying that it is an honourable agreement. It is good for Britain and good for China. But far more important than either of those things it is good for the people of Hong Kong.
On behalf of the Government, I warmly and strongly commend the agreement to the House.
6.27 pm
Mr. Denis Healey: I thank the Foreign Secretary for that thorough and detailed presentation of the agreement. However, I regret the fact that the Government did not accept the Opposition's suggestion that we should have two days for this important debate. At the time we were grateful for the extension of the debate by two hours but, of course, we have already lost more than that owing to not unfamiliar incidents in the House after Question Time. Accordingly, I shall try to keep my remarks short, as many hon. Members wish to speak. It will be relatively easy for me to do so, because the House gave careful consideration to the background to the negotiations as long ago as May, and I think it fair to say that at that time there was a broad consensus.
In September, the Government published the draft agreement and I believe that it was clear then that there had been a combination of political realism and diplomatic skill in both the People's Republic of China and Britain that we all admired, and which I hope may be applied in some other areas on which the issue of sovereignty is of central importance.
When we discussed the agreement briefly in the House on 25 October the House was broadly agreed that the agreement as Lord Butler said, was "the best we have", and certainly better than might have been expected a few
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years ago. At that time, the House was disposed to accept it as such, subject only to the views of the people of Hong Kong, as assessed by the office set up for that purpose. Now we have the report of assessment office and of the independent monitoring team. I propose to confine my remarks largely to the findings in those reports and to some of the important issues that emerged with new clarity from them.
The report of the assessment office suggests that the people of Hong Kong have taken much the same view of the agreement as has the House of Commons. The report is decently honest about the problem of judging opinion in a territory that has never possessed representative government as we know it here. The assessment office was clearly disappointed by the relatively tiny response to its inquiries. Only one individual out of every 3,000 in the territory put in a written submission, and I suspect that Sir Patrick Nairne and Mr. Justice Li were right to say that that was partly because the office took a long time to assure the people that any opinion that they might submit individually would remain confidential and inaccessible to outsiders for ever.
It is somewhat disturbing that out of the 1,000 people who expressed a view on the acceptability of the agreement, as many as one in three opposed it. Nevertheless it is difficult to dispute the conclusion in the report that, given the fact that nearly all the people of Hong Kong acknowledge the inevitability of China having sovereignty in 1997 and the impossibility of changing an agreement made by two Governments outside Hong Kong, the agreement must be accepted.
I was somewhat surprised, however, by the Foreign Secretary's suggestion that it was not possible to change any international agreement that has been initialled. I had formed the impression that that is not the view of Her Majesty's Government in the case of the draft treaty on the law of the sea. Perhaps, when he replies, the Minister will comment on that.
We would all agree that the important thing is to ensure that the agreement is carried out as the basis for the continued prosperity and well-being of the people of Hong Kong. I suspect that the general view of the people of Hong Kong was summed up by one person quoted in the report by the assessment office, who said that the draft agreement is a post-dated cheque and that the result can only be known when it is proved.
Perhaps the most interesting summary of the situation is contained in paragraphs 23 and 24 of the report of the independent monitoring team. I hope that I may be allowed to read it—as they say in the United States—into the record:
"Nobody in Hong Kong can escape the uncertainties of the future: those who have, or can acquire, a 'right of abode' elsewhere will take personal precautions in the short term while hoping for the best in Hong Kong in the long term. The minority who reject the draft agreement do so either because they can never accept reunification with Communist China or because they are bitter about the consequences for themselves as British dependent Territories citizens. The majority who accept it do so chiefly because they regard reunification as inevitable and are relieved that the terms of the draft agreement are as good as they are.
But the verdict of acceptance implies neither positive enthusiasm nor passive acquiescence. The response to the Assessment Office has demonstrated the realism of the people of Hong Kong. They know that their future now lies in their own hands."

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Some of the implications of that judgment on the findings of the assessment office are relevant to us in Britain. The House and the Government must take account of the clear misgivings that remain in Hong Kong. Both as a matter of honour and, I suggest, as a matter of British interest, we must accept our responsibility to do what we can to ensure that the agreement is successful, particularly in the 12 years before the resumption of sovereignty by the People's Republic of China.
There is a strong case for meeting the views of the Unofficial Members of the Legislative Council, at least so far as saying that the Government should publish an annual report that Parliament could debate. A firm commitment to debate every report would be perhaps unnecessary or even unwise, but the Government should make an annual report on developments in the territory and it should be open to the House, if it wishes, to debate it.
I hope that when we consider the legislation next year we shall be able to debate many of the issues that arise and to which the right hon. and learned Gentleman referred. However, some issues require special attention. There are the problems of the expatriate civil servants and of the Vietnamese refugees, which have already been referred to. I hope that the Government will take those problems seriously and will be able to allay some of the concern felt on those issues on both sides of the House.
A matter of even greater moral importance for Britain is that a substantial number of the people of Hong Kong served the British colonial Government in fields that could render them liable to victimisation in the future. I hope that the Government can give us an absolute assurance that those people will be guaranteed their future and their personal security.
There is also the problem of the British dependent territory citizens in Hong Kong. As the years pass, there is a case for giving somewhat fuller assurances on nationality and travel for those 2 million British dependent territory citizens. I gather from what the Foreign Secretary has said that, although this is not necessarily possible, it is not necessarily excluded. Not many of us would believe that it would be possible for any British Government to offer them all an automatic right of residence here. However, many of those people have skills and energies that could contribute greatly to Britain's economy and social progress. Having spent some weeks on holiday in California in August, I was immensely impressed by the contribution made by recent immigrants from Hong Kong, Vietnam, Taiwan, Korea and Japan to the stupendous growth of a state that is the size of Britain and has twice our annual national product. We should not be indifferent to the contribution that Chinese people from Hong Kong can make, although we cannot issue any blank cheque to accept as many of them as might wish to come here at any one time.
Mr. Parry: Does not my right hon. Friend accept the suggestion that, together with Commonwealth, NATO and the European Community, the Government might take the initiative to provide a haven for those who might wish to leave?
Mr. Healey: I was just about to refer to that proposal. I am glad that my hon. Friend is keen on it because I think that the suggestion is a very good one. The idea is that the Government should consider launching an international
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effort, drawing largely on members of the European Community, the Commonwealth countries and NATO, to assist in the resettlement of those who may wish to be resettled. I believe that the idea has been referred to as "operation Haven". I hope that the Government will consider that suggestion. The Minister of State may wish to say something about it when he replies.
There has been a dramatic change of opinion in Hong Kong about the joint liaison group since the idea was first mooted. Many people in Hong Kong originally saw the joint liaison group as an underhand mechanism by which Peking could get premature control over the territory. Those fears have been completely dispersed, and the joint liaison group is now seen in Hong Kong as a valuable instrument in ensuring the future development of the territory in line with the agreement. I take it that the Government also regard it in that light. It would be useful if some means could be found of associating the people of Hong Kong in the liaison group's work. We know from the draft agreement that the group will include officials of the Hong Kong Government and that there is some scope for evolution at a later stage, at least in the case of the working groups. I hope that Government officials in Hong Kong and the British Government will watch the possibility of development in that direction because there is no doubt that it would be greatly welcomed by the people of Hong Kong.
It is not unnatural that the people of Hong Kong would also like representation on the Chinese body that will draw up the basic law, but that must now be a problem for them to discuss with the Chinese Government. It is not essentially a problem that the British Government should discuss, once the agreement comes into force. Representation by Hong Kong on the joint liaison group or on any Chinese body that drafts the basic law raises what is still the most difficult issue concerning Hong Kong's future—whether its institutions can be given the power to reflect more accurately the views of the people of Hong Kong in the years before the change takes place. In other words, can Hong Kong move towards more representative government? That will not be easy in a territory in which there has been hardly any significant constitutional change for the past 100 years. Suddenly rushing the thing in 12 years is obviously open to real dangers.
We must test each step in the process before moving to the next to ensure that nothing that is done disturbs the political stability on which the economic prosperity of Hong Kong must depend. Through this agreement, the Government have a direct responsibility to the Government of Peking to deal with that problem in this way — I put it no higher than that. However, if any more representative system is to last, it is important that it should be in place well before the transfer of sovereignty. I assure the right hon. and learned Gentleman that I am fully aware of the problems that that raises and will be tolerant of any difficulties that the Government might encounter.
If the House accepts this agreement—I strongly hope that it will—and the Foreign Secretary and the Prime Minister sign it and it is passed into law in Peking and London next year, we shall be opening a new chapter in the life of some of the most vigorous, skilful and ingenious people who have ever been subjects of the British Crown. We are opening the new chapter under far better auspices than anyone would have believed possible only a few years

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ago. No other territory in the world is guaranteed 62 years of capitalist free enterprise by treaty. Some of us might regard that as a somewhat mixed blessing but it is not completely without precedent for a Socialist community to coexist with a capitalist one. Many of my right hon. and hon. Friends from north of the border will feel that that has been the problem of Scotland for many years. Although we hope to assimilate the rest of the United Kingdom with the Scottish model as the years pass it cannot come a day too soon.
As I have said, when we read the news that we get from Hong Kong and talk to travellers to Hong Kong and our colleagues who have visited the territory in the past six months, we find that everyone is impressed by the tremendous opportunities for external capital and enterprise in these new circumstances. They have been impressed by the fact that Japanese and American businesses are already gearing themselves up to take full advantage of competition with British businesses on what they regard as likely to be more equal terms than in the past. I hope that the Government will take every opportunity to press British businesses to be equally alert. Some of the princely hongs have shown far from the right spirit in their approach to the opportunities that now face them. I hope that their place will be taken by other British businesses with more energy and vision.
6.45 pm
Mr. Edward Heath: I commend most warmly the manner in which my right hon. and learned Friend the Foreign Secretary and those colleagues who have worked with him have conducted the negotiations. I should like to offer my full congratulations on the result that he has achieved. In my view he has been most successful.
This is a realistic agreement. It recognises the facts of the situation. I have always believed that the people of Hong Kong have recognised those facts. My plea to my right hon. and learned Friend is that he should continue with his present attitude and not allow himself to be diverted in any way from it. The temptations will be quite considerable — some of them have already been expressed today.
On 1 July 1997 we relinquish sovereignty over the island and the lease over the rest of Hong Kong. We shall then have neither sovereignty nor power and I beg my right hon. and learned Friend not by any sentence or phrase to give indications that will cause troubles for his successors when that time comes. That is fundamental in every respect. It is already being said that we must ensure that the agreement works, but it will not be in our power to see that it works. What lies in our power is to ensure that we carry out our side of the agreement. The rest will be in the power of Hong Kong and the People's Republic of China. I hope that that will always be at the forefront of my right hon. and learned Friend's mind and in the minds of his colleagues in the Foreign Office and the Government as a whole. To do otherwise would be unfair to the people of Hong Kong as we should be misleading them, and they would not then be able to make their own fair and responsible judgments about how to organise their future.
My right hon. and learned Friend rightly emphasised that Britain is responsible until the date of the handover. That alone puts great responsibilities on us. In the wealth of admiration which my right hon. and learned Friend and others expressed today, we should be foolish if we failed
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to acknowledge that Hong Kong has its problems, and great internal problems. I hope that we shall concentrate, for the remaining years of our responsibility, on helping Hong Kong to solve those problems. I do not need to go into them in detail as we all know what they are. Moreover, it is right to emphasise that Hong Kong now faces considerable competition from the rest of the Pacific. That has nothing to do with 1997 but derives from the fact that Singapore has emerged as an extraordinarily successful entity and is now linked up with Tokyo and Chicago, which Hong Kong is not. That is one of the elementary facts of financial life at the moment. If Hong Kong suffers from that it is not our fault, Peking's fault or the fault of the Foreign Secretary and the negotiators, but something that Hong Kong, with the aid of the British Government until 1997, has to resolve for itself.
I hope that we shall continue to do everything possible to help Hong Kong solve its problems and recognise that after 1 July 1997 we shall have neither sovereignty nor power. That affects nationality, which itself is complicated enough. The right hon. Member for Leeds, East (Mr. Healey) mentioned two groups whom we should look after and said that we might organise a European or world arrangement to accommodate those who wish to leave Hong Kong. I believe that that is impractical. I do not for a moment doubt the skill and drive of the people of Hong Kong—that is why I have confidence in their future. If we want to use some of that skill and drive, it is open to us to allow them to come to Britain without their having British or any other dependent form of British nationality. The question therefore does not arise. We should learn from the experience of the years in which we moved our colonies to independence but loaded ourselves with all manner of undertakings which we could not carry out afterwards and which became a source of grave embarassment to this country.
Mr. Healey: I think that the right hon. Gentleman has misunderstood my comments in two ways. The first group to which I referred were those whose work for the British colonial regime may render them liable to victimisation as time goes on. I hope that he will accept that we have a direct responsibility to give people who have served, for example in the police, the opportunity to come here before 1997, whatever their nationality status.
On the second point, I entirely agree with the right hon. Gentleman. I am not suggesting that we should give British dependent territory citizens a statutory right to live here. Like the right hon. Gentleman, I am saying that we should recognise that many of them could make a great contribution to our country by coming here and that we should be prepared to accept them, on a case by case basis, as the Americans have accepted hundreds of thousands of Asians from other western Pacific countries since the war.
Mr. Heath: I am grateful to the right hon. Gentleman for that explanation. His point about victimisation implies that the autonomous Hong Kong China Government will victimise people in Hong Kong. I am not for one moment prepared to accept that before the transfer of power in 1997 and it will not help the working of the agreement if we suggest that it will happen.
I have dealt with the Government of the People's Republic in private business in the City and I have always found them meticulous in carrying out agreements made

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since the revolution. International treaties and arrangements made since the revolution have also been meticulously observed. That should give us confidence that the same will be true of the agreement now before us, which I hope that the House will reaffirm today.
On the development of representative government within Hong Kong, I agree with the right hon. Member for Leeds, East that we must do our utmost to achieve proper, working representative government there by the time the handover takes place, but I cannot agree with the right hon. Gentleman's comments about not rushing things. With only 12 years to develop representative government, the question of rushing or not rushing does not arise. What I believe will do more harm than anything is the suggestion, as the tone of the White Paper implies, that we are doing this rather grudgingly. Post-colonial history shows that we have always suffered when we have seemed to be dragging out feet. There is always the argument that it would be so much better if these people let us go on ruling them because we do it so much better than they ever could, but not all of us share that view and the impression that we are only grudgingly making changes will be highly damaging to Hong Kong. My experience in talking to young Hong Kong Chinese is that they are anxious to assume those responsibilities, but that response to the assessment was low because they did not trust the present system to enable them to express their views safely and clearly.
Mr. Adley: I entirely agree with my right hon. Friend. Does he agree with me that there is likely to be more resistance to the change that he proposes from the Hong Kong Government than from the People's Republic of China?
Mr. Heath: Of course I do. My right hon. and learned Friend the Foreign Secretary will have seen the mass of advice from people in appointed positions who naturally enjoy their positions and will urge him to continue them rather than spreading responsibility too hastily. Far greater than any danger of haste is the danger of not having fully representative working government with experience by the time the handover takes place.
There is constant discussion about the stability of the People's Republic and of the administration in Peking, but no Conservative Member can deny that the direction of their agricultural policy in the past five years and now their industrial policy has been most satisfying. Of course there are aspects of the Chinese regime of which some people do not approve. That happens all over the world. Nevertheless, the direction adopted by the Chinese in agricultural and industrial affairs is certainly one that we can encourage and approve. The Chinese declaration about industrial policy could almost have been made in this House by my right hon. and learned Friend the Foreign Secretary, with occasional deletion of the word "Socialist" which had clearly been inserted to keep the ranks in order. It was a policy of enterprise, incentives and greater productivity, stressing that management must manage and that there should be good relations between unions and management and no interference from the Government. It says everything that my right hon. and learned Friend has been saying in various ministerial capacities for the past five years.
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There is one way in which we can help, given our good relations with the People's Republic and the part that we are playing in its affairs. My right hon. and learned Friend's achievements as Foreign Secretary fully justify the decision of the Government over which I presided and of which he was a member to enter into full relations with Peking in 1972. One of the purposes was to ensure the best possible answer for Hong Kong when the time came.
The right hon. Member for Leeds, East said that we must acknowledge the interest being shown by the Americans and the Japanese in capital in Hong Kong. In fact, 50 per cent. of the capital in Hong Kong is already American, 35 per cent. is Japanese and only 5 per cent. is British. That is the situation now and there is nothing new or experimental about it. Moreover, nearly 50 per cent. of trade with Hong Kong is American, more than 35 per cent. is Japanese and only 7 per cent. is British. Clearly, therefore, the American and Japanese economic interest is far greater than our own in both investment and trade.
The area in which we can be helpful is in joint ventures with the People's Republic, by far the greater part of which currently go to Japan, with a small amount going to the United States and a very small amount to Europe, of which we get only a proportion. This goes beyond the sphere of my right hon. and learned Friend the Foreign Secretary. It means that the Treasury as well as the Foreign Office and, indeed, the Government as a whole must take a much broader attitude to investment in such joint ventures than it now does. If Dengxiao Ping asks why he should get his joint ventures from us at 11 per cent. or 12 per cent. when he can get them from Tokyo at 4·5 per cent., I cannot give an answer. No one here can answer that, but an answer must be found if we are to have joint ventures with the People's Republic and thus extend our influence, help the People's Republic to stabilise and thus help the people of Hong Kong.
I congratulate my right hon. and learned Friend the Home Secretary all the very hard work that he and his team have done, some of which I have seen at first hand, and I thank him for it.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Paul Dean): Order. I remind the House that the 10-minute limit on speeches operates from 7 pm. I appeal for the co-operation of right hon. and hon. Members.
6.58 pm
Mr. J. Enoch Powell: I do not think that it would be possible to query the wisdom of relinquishing our sovereignty over Hong Kong under the terms of an agreement such as that now before us. Whatever may be the future of that agreement—we cannot look 60 years into our own future, let alone that of China — the agreement is a remarkable achievement, which many would not previously have expected the Foreign Secretary and his colleagues to achieve.
I wish to refer to just one element which, I believe, is technically not part of the actual agreement. The Foreign Secretary said that the last four paragraphs were not part of the agreement. That section is entitled "Associated Exchange of Memoranda". As I understand it, this means that, having been notified of our intentions as set out in those paragraphs, the People's Republic of China raises no

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objection to them. The fulfilment of what is set out in those paragraphs is not, from its point of view, a condition to its acceptance of the rest of the agreement. From that it follows that this, and perhaps this alone of all that is set out in the White Paper is a matter which the House—and the country—is free to debate and decide for itself, since it concerns us materially, in the course of the legislation that will be laid before us.
In those paragraphs, the Government say that they
"will seek parliamentary approval for legislation"
to give
"a new status, with an appropriate title,"
to those who are now British Dependent Territories citizens by reason of their connection with Hong Kong, and those who will become such in the next 12 or 13 years.
It is true that the Government say that that status
"will not give them the right of abode"
in the United Kingdom. It does not. That is one of the absurdities and anomalies of a status which many of us thought should never have been created in the British Nationality Act 1981 and which has already had to be modified in the case of two of the territories to which it applied. But it is one thing for the Government to say that the new status will not give these people the right of abode in the United Kingdom. It is another to ignore the increasing pressure that will be brought to bear on the United Kingdom if we confer the kind of status adumbrated in this document, to admit its holders liberally and freely to the United Kingdom from Hong Kong in coming years, both before and after 1997. We would be foolish to underestimate the anxieties that exist or the pressures that may be deliberately engineered to that end in years to come. One can see the growth of such pressures already.
In September, The Times was writing:
"the British government should at least compensate for them"—
that is, the terms of the memorandum—
"by giving as broad a definition as possible to those B.D.T. passport holders eligible to settle in Britain under the discretionary terms of the 1981 Nationality Act."
After a few weeks that had become:
"Even though Britain is in no position to open its doors to such numbers we will have to be prepared to treat such an emergency, if it happens, with particular humanity and urgency."
And today, in the same newspaper, we are told:
"The present generation will probably be granted British overseas citizenship, which does not give the right of abode in this country but implies an ultimate moral obligation on Britain if things go badly wrong."
By what is proposed here we are incurring a virtually unlimited, though unacknowledged, liability to cede to pressure, a liability which could be of great consequence for our own future.
The Government have courted that result by the manner in which they have represented the new status. They have represented it as a continuation of the present British dependent territory status. In no circumstances could any status of the people of Hong Kong after 1997 be properly regarded as a continuance of their present status as inhabitants of a British dependent territory.
In the draft the Government have repeatedly referred to the travel documents that would be issued as "British passports". Now, we in the House may understand that a British passport issued to a British dependent territory citizen is not what the rest of the world would take it to be; but the rest of the world, and a great many of the people who will read this document, will think that a British passport means the same as a French passport—
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in other words, a passport the possession of which is equated with citizenship and with the rights of citizenship. It is a profound mistake on the part of the Government to use a concept and vocabulary that is bound to strengthen the internal and international pressures and to weaken the legal protections that we have against entry into this country where that has not been specifically decided in specific cases by the authorities of the United Kingdom.
I hope therefore that this proposal will be rethought, and will be rethought if not before, at any rate during, the course of the legislation that is to come before the House next year. The notion that the United Kingdom can confer a status that will outlast 1997 is itself the assertion of a falsehood. It represents the inadmissible division between citizenship and status on the one hand and sovereignty and power on the other. Where there is no sovereignty or power, there cannot be citizenship or status in any natural sense of the words. In this I concur entirely with what the right hon. Member for Old Bexley and Sidcup (Mr. Heath) said. We are in danger of adopting formulae at this stage which will be interpreted in the future in a way that will be a rod for our own backs, and will not be to the advantage either of those who might eventually be covered by it.
We have made such mistakes before. I see that in the document there is a reference to
"passports issued by the United Kingdom."
We have been through all that painfully in past years, when we found that the act of issuing passports by an authority responsible to the United Kingdom Government was interpreted as conferring all the rights naturally inherent in citizenship itself. As a result, we were held internationally as well as internally to be bound by the fact of the United Kingdom having issued passports to individuals, even though the citizenship possessed by those individuals was one that by our law did not carry the right of entry and abode to this country.
We have no need to make that mistake again. We are deceiving others and ourselves if we lay this foundation for a repetition of that mistake. I hope that reconsideration, in the context of the future legislation, will enable us to avoid it.
7.7 pm
Mr. Peter Temple-Morris: This is the best possible deal that we could get. It owes a lot to the realism of the people of Hong Kong, and the way in which they have accepted it, and the assessment team has said as much. Reality is the name of the game, and we salute the Hong Kong people for it.
I intend to make a short speech within the 10 minutes that are available to me. There are several realities. Reunification is unavoidable, and that fact has to be faced by all of us. Secondly, China has accepted, and we hope will go on accepting, the two systems. It is in her interest to do so. This point is absolutely crucial. It has been emphasised by both Front Benches, and will be emphasised again in the debate this evening. The crucial nature of this is that we must, in the 12 years to come, maintain the fact that it is in China's interest to make this a success.
The opportunities are enormous. I emphasise this, as it has not yet been touched on. That area of the far east is perhaps the premier potential growth area in the world. Europe has its difficulties, and it may be said that it has

409
reached a plateau of achievement, although we are hoping it will get better, while the potential of expansion in the future in that area of the east is enormous.
China will want to control Hong Kong, and that point will play a vital role in all this. To think otherwise is to delude oneself. Therefore, there are two points. First, we must preserve the value of what China takes over, and the self-interest argument comes in there. Secondly, we must create positions and institutions which are reasonably compatible with the system that is due to take over Hong Kong. Therefore, everything that we do must be directed to that end. Positions and institutions that are reasonably compatible is all that we can achieve.
The future of democracy within Hong Kong is a delicate matter and it has been approached delicately in the debate so far. There is nothing sacred about democracy. It has not always worked in parts of the world where we have wished it to work and where we have introduced it. In many instances it has declined rapidly and in many others it has died. It is important, whatever the system, to get the Hong Kong Chinese into leadership positions whatever the system that prevails in Hong Kong between now and 1997. During the next 12 years we must create something that will continue beyond 1997.
The proposals for indirect elections are just about right. Again, this is a difficult and delicate matter. We must proceed slowly in the recognition that democracy is neither a Chinese nor a Hong Kong institution. Democracy is not exactly the main attribute of Hong Kong or the reason for its success. There are great dangers in undue speed. Those who advocate speed, such as the radicals, pressure groups and Hong Kong observers, perhaps strike some of us as being rather too western-oriented for comfort, and perhaps not the ideal people to advocate a lasting system beyond 1997. I am not deriding democracy. I am merely observing that it is necessary to be practical. [Interruption.] I notice that one or two great democrats have responded to my remarks. Perhaps they are amused by what I am saying, but there is a certain seriousness behind my remarks.
We must not divide a consensus community. Hong Kong is not and has never been an independent state. It has operated by consensus and we must not exacerbate the differences which might appear between the Nationalists and the Communists by pressing on too quickly towards a system which is based on direct elections. That is why indirect elections will be going quite far enough for the moment. There are Communists within Hong Kong and they have a close relationship with the mainland. They would not win in any direct elections and we should not cause them to feel that they should not compete. If we did, they would opt for abstention and perhaps eventually influence those who take over to dismantle the system that we have tried so laboriously to build up.
It is all-important that the United Kingdom continues its interest and support over the next 12 years. It is pleasing that so many hon. Members are present in the Chamber to demonstrate their interest in Hong Kong, and this interest must continue. Indeed, it must be seen to continue. It is only then that China will take sufficient interest in the Hong Kong Chinese. It is imperative that we give them an increasing role if the framework is to last and continue beyond 1997.
It is vital also to maintain confidence. If we fail to do so, the consequences and results will be dire. We all know
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that various individuals are, understandably, going to various boltholes. When they have the nationality that will result from those boltholes, they may return to Hong Kong. There is a vital middle ground of talent within Hong Kong that is responsible primarily for the continuation of its success. That talent will leave if we get things wrong. This terrible danger was apparent in Shanghai back in the 1940s and it has been apparent in other parts of the world.
If things start to go wrong, they rapidly become worse. That leads to corruption, "take while you can," and the entire edifice collapses. That is why confidence is so vital. It is necessary to maintain Hong Kong's freedom of operation bearing in mind the opposition and competition which it faces. If exchange controls were to be introduced, for example, in addition to other measures, confidence would be lost and the Hong Kong experiment would diminish to such an extent that it would be the end of the agreement which we have all worked so hard to achieve and which we want to make a success.
In maintaining confidence, there is no greater challenge than the liaison group. The issue has been raised with my right hon. and learned Friend the Foreign Secretary and his answers were rather blurred, although he pointed out the presence of the Hong Kong Government on that group. Within the agreement there is a facility for continuation to the extent that we can involve the Hong Kong Chinese, at least for the moment on the sub-committees. The liaison group will have a vital role in the next 12 years. Its contribution and its access to the basic law will be all important. It is the duty and role of the House—I hope that my right hon. Friend the Minister of State will be dealing with this in more detail than my right hon. and learned Friend the Foreign Secretary did—to ensure that we have the active and vital participation of the Hong Kong Chinese on the group rather than a load of Hong Kong Government luminaries.
7.17 pm
Mr. Eric Deakins: I agree entirely with the hon. Member for Leominster (Mr. Temple-Morris) about the need to maintain the confidence of the people of Hong Kong. I hope that this debate will not be the last occasion on which we have a major examination of the affairs of the colony. I hope also that we shall have regular reports from time to time that will enable us to show the people of Hong Kong that we are continuing to maintain our interest in what will remain for the next 12 or 13 years a British colony.
I shall address myself to two problems. One problem is that of democracy and the other is the international recognition of the agreement. We have had the Hong Kong Government's White Paper and there have been comments already on how far and how fast we shall go by 1997. I join those, including the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who feel that by 1997 there should be in place in the colony a system of fully representative government. I believe that that will be in the best interests of the people of Hong Kong. I invite hon. Members to envisage a situation in which there is virtually no progress towards democracy in Hong Kong over the next 12 years. We shall then be handing over one authoritarian system of government to another. It will be much easier in those circumstances for the incoming Government and governor, if they wish, to make fundamental alterations irrespective of whether they are in accordance with the terms of the agreement. Their task in

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doing whatever they may wish after 1997 will be made immeasurably easier and smoother by the absence of representative institutions and government in Hong Kong which can represent fully to them the interests of the Hong Kong people. We need to have more representative government—that is, a majority of elected members of LEGCO and EXCO—but I do not presume to enter into the many arguments and discussions on the exact formula of the elections. That should be the guiding principle.
In paragraph 33 of the White Paper there is set out the issue of the powers, if any, that should devolve to the new Hong Kong Administration, the more representative Government. There is little point in making the Government more representative unless they have some powers with which to control the destiny of the Hong Kong people in the period up to 1997. The issue is uncertain and vague as it appears in the documents before us. I hope that we shall maintain the pressure on the British Government and the Hong Kong Government to make haste slowly during the next 12 years. That should be our theme and I hope that that will help the Hong Kong people to realise that we have their best interests at heart.
I turn briefly to the issue which has concerned me from the time that I visited Hong Kong earlier this year with a number of other hon. Members. We did so at the invitation of the Hong Kong Government. That issue is the international acceptability of certain of the provisions of the agreement. I refer in particular to the period after 1997. The agreement says that all ahould be well and that Hong Kong will be able to maintain its participation in GATT and its special status as a member of the multifibre arrangement. Both of those international institutions are vital for the future economic prosperity of Hong Kong.
If Hong Kong were unable to maintain its position within those two international institutions, its economic future would become very uncertain. That is recognised in the White Paper which is before us for provisional approval today and for approval by Britain and China next year in the form of legislation. The agreement is good, so far as it goes, but it does not go far enough. It may mislead people in Britain, China and Hong Kong about the need to take urgent measures to ensure that the special economic status of Hong Kong is recognised by other countries.
I invite the House to consider the economic climate in the world over the next 12 years. We have seen during the past 10 years, during which there has been the multifibre arrangement and other economic arrangements to benefit poorer countries, including Hong Kong, a climate of growing protectionism. I resist that climate and I intend to go on resisting it. Nevertheless, the mood of the House is that we need to protect ourselves much more. That mood is also evident in the United States and in other industrial countries. Therefore the international economic climate will not be very favourable towards concluding an international economic agreement for the continuation of Hong Kong's special status in GATT and the MFA.
The Foreign Secretary made great play— I do not blame him—of the fact that there agreement. However, all countries in the world recognise and applaud the agreement because it does not cost them anything to do so. Many countries are anti-colonialist. If the agreement ends colonislism, all well and good. Most countries are conscious of the value of friendship with the people's Republic of China, if only for economic reasons, because
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potentially in the 21st century China will be one of the largest markets in the world. Therefore, they do not want to lose any brownie points over the next 12 years.
The point we are asking them to accept is that this is not only an agreement between Britain and China over the future of Hong Kong. We are asking the community of nations in GATT and the MFA to accept that Hong Kong's special status should continue. It will require them to continue to make sacrifices, in the sense that we accept the obligations of the MFA.
Hong Kong also enjoys certain privileges under GATT as a dependent territory. In those circumstances, it is incumbent upon all of us in this House, and upon the British Government, together with the People's Republic of China, to map out a strategic campaign to ensure that at the appropriate time there is full international recognition and an agreement on these two issues well before 1997. That will be extremely difficult. At least two countries—the United States and France—will be very difficult to convince that the special status of Hong Kong under the MFA and GATT should continue after 1997.
During the last year there has been a row between Hong Kong and the United States over the rules of origin for certain goods and garments. That is a sign of the times. I believe that there will be forces in the United States—I use the United States as an illustration of a country where this issue has arisen during the last year—which will want to ensure that by 1997 the special economic status of Hong Kong should cease, because then it would revert to being part of mainland China for the purposes of the MFA. Unless China's quotas under these arrangements are increased, the net result will be to reduce the pressure on rich countries to take goods from countries such as Hong Kong, China and many other developing countries.
Under the MFA, I believe that there will be strong opposition from France and perhaps from other members of the European Community. I single out France because when the Foreign Secretary raises this issue at the Council of Ministers he will be told that this is an excellent agreement, that most of the members of the EEC welcome it and that they also welcome the fact that Hong Kong is to continue to enjoy a special economic status. However, when our Foreign Secretary, as I hope he will, tries to obtain a concrete agreement in the EEC recognising the special status of Hong Kong in MFA and GATT, I suspect that the French will say that 1997 is a very long way away, that circumstances may change, that there will be several different MFAs leading up to that point, that they cannot consider the matter properly and justifiably at this stage and that we should put off the negotiations until much nearer the time. However, when we get much nearer the time—1995, 1996, and 1997—I have no doubt that the French, and perhaps others, will drive a very hard bargain if we are to fulfil the commitment which is contained not merely in this agreement but in statements made by the Foreign Secretary in Hong Kong, Peking and in this House about the special economic status and international provisions for the economic future of Hong Kong.
I hope that the Foreign Secretary will take these points on board. I am extremely worried about the international economic status of Hong Kong. Everything depends upon that after 1997. The best we can do in this House is to ensure that we negotiate successfully on their behalf.
7.26 pm
Sir Peter Blaker: The hon. Member for Walthamstow (Mr. Deakins) is quite right to stress the importance of obtaining acceptance of this agreement by the international organisations and by other countries which are concerned with economic and financial matters. I shall return later to that subject. I believe that the most important aspect of this excellent agreement is the evident acceptance by China of the basic principle that Hong Kong will be run after 1997 by the people of Hong Kong. Given the enormous difference between the two ways of life on the mainland of China and in Hong Kong, any attempt by China to run Hong Kong would lead to great difficulty.
Given that the acceptance by China of the principle of Hong Kong being run by its own people is absolutely sincere, I am optimistic about the success of the agreement. This is what the "one country, two systems" slogan means. From it flows most of the other important aspects of the agreement. China has accepted a self-denying ordinance. This shows that China understands that if it were to intervene in the day-to-day affairs of Hong Kong after 1997 it would risk the collapse of a structure which brings benefits not only to the people of Hong Kong but to the people of China. From the acceptance of that principle flow the other consequences in the agreement: a separate system of law and courts, private property, a separate currency, the fact that China will not take taxes from Hong Kong, and the separate membership of Hong Kong in GATT, IMF and the other organisations to which the hon. Member referred. There is also the remarkable list of 16 freedoms which will be enjoyed by the people of Hong Kong. They are set out on page 22 of the agreement. The agreement is a great credit to all those who have been involved in the negotiations.
I wish to say a word about the role played by my right hon. and learned Friend the Foreign Secretary. It is clear that in the summer of this year, when the negotiations were at a rather difficult stage, the personal intervention of my right hon. and learned Friend when he visited Peking was responsible for unlocking the door. I want also to pay tribute to his officials. They have made a wonderful job of the negotiations. I want also to pay tribute to the governor and to the members of UMELCO who have clearly advised the Government extremely well.
My right hon. and learned Friend was right to pay tribute to the Chinese Government as well because China has recognised its own interest. I say that as a compliment. It is not always that Governments recognise their real interests. It is very much in the interests of China that the agreement should work and it is very much in its interest that it has been made in such an excellent way.
But there are still some concerns. First, will the agreement last? We may ask what will be the system in the United Kingdom in 20 years' time. I do not know. I hope that it will be a country in which I will be happy for my children to live, but I cannot guarantee it. We cannot guarantee what Hong Kong will be like in 20 years' time, but we should have confidence in the agreement.
There are many reasons for that confidence. China has a good record in observing treaties which it has signed. It has even observed what it describes as unequal treaties which are responsible for the creation of Hong Kong. The whole thrust of China's economic development is encouraging because it is becoming more compatible with
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the system in Hong Kong. There are the special economic zones and we have now heard about the first peasant millionaire in China, which is encouraging. In addition, the great publicity which the Government of China have given to their first peasant millionaire is encouraging. That tendency is now spreading to the cities.
I cannot say that that trend is irreversible, but it is much more likely that the tendency towards liberalisation will continue rather than be reversed. I think that it is likely to be successful.
The Prime Minister, Dengxiao Ping, said that China proposes to remain open to the world. If that is its policy, there is only one place through which it can successfully be open to the world and that is Hong Kong.
Then there is the proposal that Hong Kong will have a separate status in all the international organisations to which the hon. Gentleman referred. It would be an outrage if our allies and friends—the French and the Americans—were to obstruct the proposal. It is an intolerable thought that they may do so. It may occur, but if it does I am sure that China, the United Kingdom and many of our friends will ensure that the proposals in the agreement are put into effect.
Then there is the important Taiwan factor and the example that Hong Kong will give for the proposed reunification of the mainland and Taiwan.
There are several matters about which concern has been expressed by the UMELCO delegation. One is the question of possible statelessness for some Hong Kong residents. I hope that when my hon. Friend replies he will say something more in addition to what was said by my right hon. and learned Friend the Foreign Secretary about that matter. The possibility of statelessness for some Hong Kong people is a matter of great concern.
An annual report to Parliament has been proposed. That was referred to by the right hon. Member for Leeds, East (Mr. Healey). That is a good idea and I hope that when my hon. Friend replies he will say that the Government propose to accept that.
There are two concerns which are much broader than those that I have just mentioned. They are the drafting of the basic law and the joint liaison group. China will understand the importance of closely associating the people of Hong Kong with the drafting of the basic law. I say that because of what I said at the beginning of my speech. China has understood that the prosperity of Hong Kong, which is so much in China's interests, depends on maintaining confidence among the people of Hong Kong. If the people of Hong Kong feel that they are excluded from the drafting of the basic law and that their views are not being taken account of, confidence will suffer. I am sure that the Chinese Government understand that as well as we do.
A similar factor applies to the joint liaison group. I note that there will be Hong Kong civil servants in the group, but I hope that it will be possible, at least over time, for unofficial people from Hong Kong also to be part of the group. That would be in the interests of not only the Hong Kong people but Britain and China. I see little conflict of interest between those groups in this situation. It is in all our interests that Hong Kong should be stable and prosperous in the future, and that is the greatest ground for encouragement.
7.34 pm
Mr. Russell Johnston (Inverness, Nairn and Lochaher): It is one of the had things about the new 10-minute rule that it is difficult to intervene. I have been a great believer in giving way, but I give notice that on this occasion I shall not give way. That is bad because the fact that we give way in this Chamber is supposed to make us different from and better than continental systems where people make set speeches.
I reiterate the welcome that I gave to the agreement when it was announced by the Foreign Secretary and repeat my congratulations to him and my admiration of the remarkable approach made by the Chinese under Chairman Dengxiao Ping.
We are left with three basic questions. First, can Britain do anything about making the agreement stick in the spirit as well as the words? That has already been rehearsed quite a bit. Secondly, what should we do in the next 13 years about the internal administration while we still remain responsible? Thirdly, where does our responsibility stop to those Chinese now resident in Hong Kong, many of whom went there to escape the People's Republic of China and who fear reabsorption into it?
The right hon. Member for Old Bexley and Sidcup (Mr. Heath) said that we could basically do nothing to make the agreement stick. That is pretty important. As somebody said to me when I was in Hong Kong in October, the music is good but the song must be well sung. In other words, it is the implementation and practice that are important. I am sure that something can be done. One of the myths about sovereignty is that the decision-making process can be influenced only by a great power. One of the good things that the Government have achieved is to develop a close relationship with the People's Republic of China which gives them an opportunity to exert influence as things develop.
Britain has a special responsibility. We are not decolonising. It is not quite right to use that expression. Every time we have decolonised we have allowed people to decide for themselves what would happen and what form of Government there would be. That has not been done and we all know why. The Government have shown sensitivity, but in the years to come there will need to be a commitment to follow up matters. Various people have mentioned the idea of regular reviews. That was mentioned in the press at the weekend by Miss Lydia Dunn of the Legislative Council. It was also mentioned today by the right hon. Member for Leeds East. It is a good idea. But it is not enough to proceed on the basis that if the House wishes we shall have a debate on the annual report. The Government should commit themselves to a debate at least once a year to examine some sort of annual progress report so that we can monitor what is going on and so that we have the opportunity in the House to reassert the fact that we still have responsibility.
I am still not clear, despite the exchange with the Foreign Secretary, whether non-official people will be allowed on the joint liaison group. I gather they will not. I gather that they may be brought in for sub-committees. It may be that that is impossible, but the route through the sub-committees must be fully utilised.
The drawing up of the basic law has been mentioned by many people and undoubtedly it will be done on behalf of the Hong Kong people by the Chinese. The Foreign Secretary said that the Hong Kong people have been
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offered consultation. They deserve participation, which is different from consultation. That is a view that could well be conveyed to the People's Republic of China. After all, we have paid tribute to the People's Republic of China for going along with an agreement of remarkable flexibility. It is right to stress that that will be for the benefit of the People's Republic as well as Hong Kong. It may open the door to a resolution of the problem of Taiwan and certainly it has economic significance.
As everyone has said, it will be a bold person who claims that the economic modes and modules in the People's Republic of China, Hong Kong or the United Kingdom will be recognisable 50 years from now. It is a matter of trust.
What should we do about democratic institutions in the next 13 years? How fast do we move and what do we do? The agreement states:
"The Government of the Hong Kong Special Administrative Region will be composed of local inhabitants. The chief executive will be appointed by the Central People's Government on the basis of the results of elections or consultations to be held locally."
There is no guarantee of elections. I expect that the People's Republic will accept the structure that it inherits.
I agree that we must make haste in the next 10 years, but it must be done with care because everything depends upon Hong Kong's economic success, as the right hon. Member for Leeds, East (Mr. Healey) has said. That does not depend only upon how ingenious and effective people are in Hong Kong. It depends upon the world economic situation. As the right hon. Member for Old Bexley and Sidcup said, Hong Kong's exports are heavily concentrated in certain places and its economic position is fragile.
The question of nationality arouses strong passions. The Foreign Secretary said that "statelessness would not happen." I should like to be assured that that applies to the Portuguese, the Indians, the Parsees and other minority groups. I hope that they will have documentation to give them statehood.
What about the Vietnamese? The Foreign Secretary said that their problems were not the point of the debate, but they live there. I visited Hong Kong with the hon. Member for Warley, East (Mr. Faulds) in October. The flow of Vietnamese refugees continues. This year, 1,535 have arrived in 63 boats. They are allowed in and are not turned away. By the end of this year about 12,500 Vietnamese refugees will be living in Hong Kong. They keep coming and we do nothing about it. The Minister should comment on that. They cannot be left in camps for ever.
The right hon. Member for Leeds, East mentioned the sensitive areas—the police and those involved in security. We remember the riots in 1967. The people involved in security and the Communists are still there. Old grudges might be settled. The right hon. Member for Old Bexley and Sidcup said that there would be no victimisation. That is a trusting view for a man who claims to be a practical chap.
I shall not dwell on the question of the expatriates, but they are worried about the future of their pensions arid their security.
What about the main body of people—the 2·5 million who are British dependent territory certificate holders? It is not practical to say that we shall let them all in. The right hon. Member for South Down (Mr. Powell)

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would not allow that. Yet consider what Hong Kong has done. After the second world war 600,000 people lived there. After the 1949 uprising there was a tremendous influx followed by a steady flow and 2·5 million people were absorbed in an area of 393 sq miles, much of which is hill or island. My constituency comprises 4,900 sq miles. The United Kingdom does not lack space, but it lacks a tolerance to absorb other people. That is a fact that we have to face. I am not especially proud of it, but I recognise it.
The Government must concentrate on ensuring that people do not receive passports which are in any way devalued and that such passports give them access and entry—
Mr. Deputy Speaker Mr. Ernest Armstrong): Order. The hon. Gentleman must bring his speech to a close.
Mr. Johnston: I shall take one minute.
Mr. Deputy Speaker: The hon. Gentleman must not take one minute. We are under orders and his 10 minutes are up.
Mr. Johnston: Then I commend the agreement, and I am sorry that I could not say more about it.
7.45 pm
Sir Paul Bryan (Boothferry): Many of us have already found opportunities to congratulate the Foreign Secretary, the Governor and the negotiators of the draft agreement. I do so again. I now want to congratulate the people of Hong Kong and their representatives—the members of the Executive and Legislative Councils. One has only to read the agreement and the long "Elaboration of basic policies" that goes with it to realise that the Chinese negotiators were much influenced by the UMELCO paper published when we last debated the subject in May, and, I have no doubt, by the UMELCO delegation to Peking.
The Chinese have been just as keen as we to gauge Hong Kong opinion. In the last two years scores of prominent Hong Kong citizens have been asked to go to Peking, many of them to meet Deng himself. Hence an agreement that has surprised us by the degree of its detailed understanding of the financial and social set-up in Hong Kong has emerged.
In our last debate, several right hon. and hon. Members went out of their way to argue that as UMELCO is not an elected body like the House of Commons it could not represent the Hong Kong people. I ask the doubters to read the assessment office report which summarises the debate in the Legislative Council. The views expressed in that debate are completely in tune with reports from hundreds of individuals and organisations reporting to the assessment office. Originally I had doubts about the creation of the assessment office. In the event, I and many others were wrong.
The Hong Kong Government are to be congratulated on the thoroughness with which they sought public opinion. they circulated 2½ million copies of the draft agreement in two languages within a few days. They undertook the massive job of collecting and collating all the evidence. No such operation has ever been attempted in any other country.
The report is a valuable document. The range and number of contributors gives it credibility. Written
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evidence came from about 1,800 individuals. That may not seem many, but people do not often hurry to put pen to paper unless they have something to grumble about.
I was most impressed by the reaction of the network of 679 organisations and groups from all levels of society which permeates Hong Kong and covers every sector of the community. Because of that range of interest, in effect the report goes through the draft agreement with a fine tooth-comb. It provides the one and only systematic record of Hong Kong opinion at this critical point in the territory's history. It will be read by foreign Governments and, in particular, by serious long-term investors. It will certainly be read by the Chinese and referred to by the joint liaison group.
In the debate in May we looked forward to today's debate as the time to discuss whether the draft agreement had the approval of the people of Hong Kong. That question has now been settled by the overwhelming message of acceptance accompanied by, of course, a list of reservations, qualifications and questions which must be clarified or resolved in the years ahead. Let nothing I say tonight be taken to under-rate the seriousness of the problems yet to be solved.
I can find no better interpretation of the Hong Kong verdict than the last words of the report of the monitors, Mr. Justice Simon Li Fook Sean and Sir Patrick Nairn to whom we should be very grateful. They said:
"The majority who accept the agreement do so chiefly because they regard reunification as inevitable and are relieved that the terms of the draft agreement are as good as they are. But the verdict of acceptance implies neither positive enthusiasm nor passive acquiescence. The response to the assessment office has demonstrated the realism of the people of Hong Kong. They know that their future now lies in their own hands; and the widespread concern to be involved in the drafting of the basic law is a timely and important token of their wish to stand increasingly on their own political feet."
That interpretation leaves us with much to do during the next 12 years. More and more people are turning to the prospect of the basic law which they expect not only to reflect the draft agreement but to solve outstanding problems. There is an increasing call that Hong Kong people should not only be consulted but participate in the drafting of the basic law. Members of UMELCO have. advocated a
"basic law advisory and monitoring committee".
I doubt whether the Chinese will concede any such formal arrangement, but the way in which the draft agreement has so accurately reflected Hong Kong views gives me hope that the Chinese will take the trouble to ensure that the basic law does the same. The Chinese must know that they will need practical help from the British and the people of Hong Kong in drafting the law—something in which they have no experience.
What time must I finish, Mr. Deputy Speaker?
Mr. Deputy SpeakerAt 7.56 pm.
Sir Paul Bryan: In the UMELCO paper with which hon. Members have just been issued—the paper is in the House of Commons Library—fears about the implementation of the agreement and the policies of future Chinese leaders come high on the list. Those fears were well answered by Miss Lydia Dunn in the Legislative Council debate, when she gave six reasons why she believed that the terms of the agreement would be faithfully implemented. Judgment on that front made by leading citizens in Hong Kong seems to be more convincing than anything we can say in this Chamber.

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Earlier this afternoon, my right hon. Friend the Secretary of State for Education and Science undertook to reconsider his plans for a reduction in student grants. I warn him that, if his recommended economies include a reduction in overseas student grants, that would be politically disastrous in Hong Kong. The present scheme, financed in part by the Hong Kong Government, is going well, and any tampering with it would be regarded as a sure sign of declining British interest in the territory.
In our long and unique colonial history, we have never experienced a transfer of sovereignty compared with this one. With our other colonies, we have usually found virtue in handing over the reins of power at reasonable speed, leaving unsolved problens for the incoming Government to face. Often, those Governments faced a pseudo-Westminster system of government unsuited to their circumstances.
This time we have 12 long years. The responsibility is all the heavier on British shoulders. In the words of the UMELCO statement,
"Given that Hong Kong will be a special administrative region within China after 1997, with an elected legislature enjoying a high degree of autonomy, it is essential that a Government structure consisting largely of local people is in place and in proper working order well before 1997."
I stress that last sentence. That does not necessarily mean direct elections or any other preconceived system which happens to have worked in some other part of the world. We must develop a system that is tailormade to bring stability and prosperity to Hong Kong in its new and particular circumstances. With that objective firmly in our sights, I believe that the White Paper on the future development of representative government in Hong Kong is about right. I agree with this step-by-step approach. The steps should be quick and not too long. All the time we must ask ourselves, "Is the developing system attracting new talent and new leadership into government?"
7.55 pm
Mr. Jack Ashley: The hon. Member for Boothferry (Sir P. Bryan) spoke with great knowledge of Hong Kong, and hon. Members listened to him with respect. A few weeks ago, I visited Hong Kong and China. It was interesting to compare the reactions in the two places. In Hong Kong there was a welcome for the agreement but some reservations about the future. The agreement was enthusiastically acclaimed in China. There is no doubt about the fundamental importance that China attaches to this agreement, because to the Chinese the agreement is a recognition of the geographical, legal and emotive issues. They are completely committed to it. Although most Hong Kong people accept the agreement, it is essential for us to recognise frankly the different reactions of Hong Kong and China.
The reasons for some disquiet in Hong Kong—I put it no higher than that—have been expressed clearly since the initialling. Naturally, the Hong Kong people feel deeply about this matter because their way of life and community are involved. No one else is involved. I am glad that the Foreign and Commonwealth Secretary has given assurances that the people of Hong Kong may participate in the drafting of basic law and will be adequately represented on the joint liaison group. There is some anxiety about possible restrictions on individual rights and freedom and about passports for British dependent territory citizens. I hope that those anxieties will be considered carefully.
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It is only fair, and certainly important, to recognise China's point of view and its problems. A capitalist Hong Kong within the territory of China could place great strains on the whole of Chinese society. We should appreciate China's difficulties. The fears of some Hong Kong people may be unfounded, because there are many good and varied reasons for believing that the Chinese are acting in good faith and will scrupulously carry out the agreement. The Chinese habitually keep their word, and they have an excellent record for keeping international agreements. The Chinese had no need to sign this agreement, and, if they wanted, they could long ago have taken Hong Kong. We must recognise that fact.
The Chinese recognise Hong Kong's unique value, and they have been reasonable during the negotiations. They value their standing in the world as men of their word. The Chinese are great realists. As realists, they have Taiwan clearly in mind. Obviously, an acceptable and accepted settlement in Hong Kong could pave the way to a settlement on Taiwan with great political and economic implications for China. By proving the fears of the Hong Kong people to be groundless, the Chinese can maintain the special value of Hong Kong. A large part of the success of Hong Kong has been built on confidence, and if that confidence is seriously damaged, the unique value of Hong Kong will be damaged. By sustaining that confidence, China can preserve and enhance the value of Hong Kong. I believe that China will do precisely that.
The Foreign Secretary and the Governor of Hong Kong deserve great credit for the success of the negotiations. I have no doubt that they benefited from the wise and valuable counsels of Sir Percy Cradock, and I am very glad that the Foreign Secretary referred to him. But the brilliantly imaginative stroke was not British; it was Chinese. I pay tribute to Chairman Dengxiao Ping, for his startling concept of "one nation, two systems". That provided the breakthrough. Making a success of that concept will provide the great challenge for the future.
In meeting that challenge, the Hong Kong Government have a vital role to play in preparing for 1997. Clearly, the most important aspect will be to involve the people of Hong Kong in decisions affecting them and their children. The Hong Kong Government have operated a different form of government from our own, but their record is a splendid one. The Hong Kong Government have enjoyed outstanding administrators such as Sir Jack Cater and many others who have made a notable—indeed, a historic—contribution to Hong Kong. They have done that under a type of colonial Government that we no longer accept in Britain. Incredibly, it has survived in Hong Kong. But the time has now come for Hong Kong to adapt to the historic changes that are soon to take place in Hong Kong.
I have heard it suggested that the British system of adversarial politics should be implanted in Hong Kong. That is a wholly unrealistic concept and fails to take account of the political delicacy of the situation in Hong Kong. It would be a "bull in a Hong Kong shop" approach which would be wholly inappropriate for Hong Kong. I do not believe that it would work.
We want to see progress in Hong Kong. What is now required is an imaginative approach—something as realistic and shrewd as Dengxiao Ping's "one nation, two systems" concept. I cannot pretend that I have the answer or that anyone so far has found the answer, but there must be a greater involvement of the people of Hong Kong in

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the Government. The form of involvement should be decided not by the British Government or by the Hong Kong Government, but by the people of Hong Kong themselves.
The great challenge for the people of Hong Kong today is to produce political leaders. There has been no role for political leaders in the past in Hong Kong, but they are greatly needed now. I hope that people who believe in the future of Hong Kong will come forward. I appreciate the complexities of the situation there, but those people, who will become the political leaders of Hong Kong, can play a major role in their own destiny. Hong Kong needs to move forward to new forms of government which manage simultaneously to give continuity and to preserve posterity, and which are consistent with the new arrangement with China.
Whichever way the problems are tackled, it is of paramount importance for the British Parliament to maintain a very close interest in the affairs of Hong Kong. It will be even more important now than ever before to have more regular debates about the affairs of Hong Kong. Without that interest, Britain will be unable to fulfil its final role in Hong Kong and will be throwing away a valuable opportunity to mould the future of Hong Kong. By regular debates, Britain can remain involved in the developing process of Hong Kong after the signing of the agreement, and can play a major and significant role in the long-term future of Hong Kong.
8.5 pm
Mr. Peter Thomas: I apologise, in his absence, to my right hon. and learned Friend the Foreign and Commonwealth Secretary for not having heard his speech in full. I heard the end of it. I was unable to hear the whole of it because I was in a Select Committee.
From the debate so far it is clear that there will be overwhelming support in the House for the draft agreement. That is absolutely right. I join in the congratulations that have been given to my right hon. and learned Friend, to the Governor of Hong Kong, and to all the people who have been associated with the remarkable and superb draft agreement. It is unique, in that it brings together two sovereign countries with totally different approaches to economic life. They have come together in a realistic way in a historic agreement. Everyone concerned with it deserves the highest possible praise.
Few speakers in the debate so far have gone into any detail. How remarkable it is to find, in the elaboration by the Government of the People's Republic of China of its basic policies, the words:
"The National People's Congress of the People's Republic of China shall enact and promulgate a basic law of the Hong Kong Special Administrative Region of the People's Republic of China…in accordance with the Constitution of the People's Republic of China, stipulating that after the establishment of the Hong Kong Special Administrative Region the socialist system and socialist policies shall not be practised in the Hong Kong Special Administrative Region and that Hong Kong's previous capitalist system and life-style shall remain unchanged for 50 years."
How remarkable it is to find phrases such as that in an official document of a Communist country. The current social and economic systems in Hong Kong will remain unchanged, and so will the life style, rights and freedoms, including those of
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"the person, of speech, of the press, of assembly, of association,…of correspondence, of travel, of movement, of strike,…of choice of occupation, of academic research, of belief".
Those rights will be ensured by law in the Hong Kong special administrative region. Private property, ownership of enterprises, the legitimate right of inheritance, and foreign investment, will be protected by law. With such wonderful phrases, how could anyone not say that it is a remarkable and admirable document?
Therefore, I have no hesitation in giving my support to the agreement. I have no doubt that I shall be in very good company, in as much as all hon. Members in all parts of the House will be with me.
I listened with great interest to the speech of the right hon. Member for Leeds, East (Mr. Healey). He was absolutely right when he referred to the report of the assessment office. That clearly shows that there has been general acceptance of the draft agreement in Hong Kong. All the representative bodies have endorsed it, and there is a sense of enormous relief in Hong Kong. Two years ago people were extremely concerned, but there is now a sense of real relief and a determination to make the agreement work. I have no doubt that it will be extremely successful.
I appreciate that certain misgivings remain and that people will have reservations, but these are far fewer than many people anticipated. I am sure that some of them will be dealt with in the next 12½ years.
The continuing interest of this House will be important, and I am certain that over the next 12½ years the Government of the day will realise that they have a continuing responsibility for Hong Kong, which will be of major importance up to 1997. I have no doubt that the Government of the day will, before the end of this period, continue to carry out their paramount duty.
It is also important that this House should interest itself continually in Hong Kong. An annual report to the House on Hong Kong, perhaps followed by a debate, would be one way of ensuring a continuing interest in the fortunes and progress of Hong Kong.
The agreement makes it clear that the drafting and passing of the law will be done by the People's Republic. It is important that considerable assistance should be given to the People's Republic in the drafting of this basic law. I have no doubt that certain lawyers and officials will assist, but it is equally important that the people of Hong Kong should be involved. That is of major importance.
Vast changes will take place during the next 12½ years. Something like 100 Privy Council orders apply to Hong Kong, and they will have to be incorporated into Hong Kong law. The basic law will also incorporate the agreement. Therefore, it must be well drafted, and it is important that everyone with an interest should get involved and help the Chinese.
Several hon. Members have also referred to the possibility of more democratic representation in the Hong Kong assemblies—be it the Legislative Council, the Executive Council or whatever. In the main, this relates to the Legislative Council. There is no doubt that when the chief executive takes over at the end of 1997 or before that, he will have to be supported by a more representative council.
I am inclined to support what the right hon. Member for Leeds, East said. I do not support the views of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath). It would not be right if we tried to get the Hong Kong people to enter in a hurry into a form of democratic

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representation which is similar to western democratic representation. There is no history of that type of representation in Hong Kong, which has been a colony, nor is there such a history in China. If, out of enthusiasm, we try to introduce the form of democratic politics in this country into Hong Kong, we may well cause enormous suspicions and difficulties with China.
I do not know whether there can be democratic elections without political parties, but there may be trouble if, side by side, there is a Right-wing national party and the Communist party. This matter should be left to the people of Hong Kong, who see themselves in a unique situation. They should decide the pace at which they wish to have greater representation in their legislative bodies. That is the general wish in Hong Kong. The White Paper sensibly paves the way in accordance with the traditions and situation in Hong Kong.
Above all, stability and prosperity must continue. If in the next 12½ years anything happens to upset that, the value of Hong Kong to China will be diminished. That could well result in a total change and something very different from what people hope for.
I pay tribute to the Chinese who have agreed to this draft agreement and who have worked so hard to make it sensible and realistic. The Chinese have shown that they keep agreements. I therefore have no doubt that it will be in their interests—indeed, it will be their intention—to keep this agreement absolutely to the letter of the law.
8.16 pm
Mr. Robert Parry: My recollection is that this is the third or fourth debate on Hong Kong in which I have participated. In previous speeches I have been critical of the social system in Hong Kong, the lack of democracy and the repression of civil liberties in this last bastion of British imperialism.
Tonight we are debating the draft agreement on the future of the colony. Previously I have said that I have always accepted that in the last century Hong Kong was colonised under unequal treaties, and that it was inevitable that it would return to China in 1997.
The draft agreement has been broadly accepted in Hong Kong. Mrs. Elsie Elliott, an elected member of the urban council for many years, who has been in touch with the real grass roots in Hong Kong, supports the White Paper. She made that clear in an urban council debate earlier this year. It is also supported by the Heung Yee Kuk, which represents the people from the New Territories. If Mrs. Elliott is prepared to accept the draft agreement, that is good enough for me.
I welcome the decision to set up the special administrative region of Hong Kong, which will receive a high measure of autonomy. Last Monday, along with a number of other hon. Members from both sides of the House, I met a number of members of UMELCO, which has sent a delegation here to lobby hon. Members. They have raised some questions on the agreement. One is that the people of Hong Kong should not only be consulted but should actively participate on the drafting of the basic law. I agree.
They believe as well that the Hong Kong people should also sit on the Sino-British joint liaison group. That is also right. I do not accept that only expatriates or colonialists should sit on this group. The Hong Kong people have the
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right to sit on this group as it will deal with their future. If such people are unable to sit on the group now, I hope that they will be able to do so in the years ahead.
I do not believe that UMELCO should try to act as spokesman for the ordinary people of Hong Kong. A number of UMELCO members are at present in the Gallery listening to this debate. In the main they are wealthy or middle-class professionals who claim to speak for the masses but speak only for themselves. I have received many letters from people in Hong Kong and I have seen many reports in the papers which make it clear that UMELCO does not represent them. It is a pity that they were not campaigning with me, my hon. Friend the Member for Falkirk, West (Mr. Canavan) and the hon. Member for Christchurch (Mr. Adley) many years ago when we argued for democracy, basic civil rights and consultation with the people of Hong Kong. UMELCO members are visiting London at the expense of Hong Kong taxpayers. Yet people like Dr. Ding, Mrs. Elliott, Mr. Tsin Sai Nin, Mr. Andrew Tu, who represent the grass roots, must pay to come over here from their own pockets.
It is interesting that during the summer recess we saw an unprecedented number of hon. Members visiting Hong Kong. Those visits were also paid for—by Hong Kong tax payers. Over the years few hon. Members, with the exception of my hon. Friend the Member for Falkirk, West, have argued for democracy, tabled early-day motions, or taken part in deputations to the Foreign Office to argue for human rights and civil liberties.
I wish to raise the matter of Chinese troops being based in Hong Kong until 1997. Some UMELCO spokesmen raised the matter. It is made clear in the draft agreement that Chinese troops will be based in Hong Kong. Paragraph 42 on page 36 of the White Paper makes it clear that British troops will be withdrawn and
"that military forces Sent by the Central People's Government to be stationed in the SAR for the purpose of defence will not interfere in its internal affairs."
I hope that there will not be a need for a heavy military presence in Hong Kong. Obviously, the People's Republic has the right to base its troops there, if it wishes. The young people of Hong Kong may be asked to volunteer for the forces. I was pleased when the Foreign Secretary said that during the discussions there was no talk of compulsion in bringing people into the army in Hong Kong.
On the question of citizenship, I support the suggestion that I made earlier to my right hon. Friend the Member for Leeds, East (Mr. Healey). He agrees with me about a possible haven for people who may not wish to stay in Hong Kong. A couple of academics from St. Anthony's college, Oxford, raised the matter. The United Kingdom Government should take the initiative in launching an international effort, especially among the EEC and the Commonwealth and members of the NATO alliance to bring into being an operation haven. This will provide funds for co-ordination and resettlement and quotas in a large number of participating countries, to permit those holders of British dependent territories passports in Hong Kong as well as minority nationality passports and travel documents holders in Hong Kong, to settle in those countries abroad if they so wish. I hope that the Minister will consider that point.
Will the Minister ask the Hong Kong Government between now and 1997 to make a positive attempt to improve services in Hong Kong, which affect masses of the people? I am thinking of housing. Thousands of people

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are homeless or living in boats. I hope that for housing, social security, pensions, social services, welfare and the health service, the Hong Kong Government will make a positive attempt to improve them without prodding from the British Government to do the right thing.
During our last debate I spoke about the freedom of conscience, religion and association. This is dealt with in paragraph 46, page 37 of the White Paper. I mentioned that the Catholic Bishop of Hong Kong was concerned with what may happen in the colony after 1997. In China there are many christians, Catholics and non-Catholics, bishops and priests who have been held in prison for many years. I hope that every effort will be made to guarantee that after 1997 those people will have the right to freedom of religion.
8.25 pm
Mr. David Howell: I fully share the admiration expressed on all sides for the work of the Foreign Secretary and his team in securing the agreement. There is no doubt that in difficult circumstances he secured the best possible agreement. Nor is there any doubt that, if things go right, the prospects for the future stability and prosperity of Hong Kong and that part of the world will be bright, especially with the opening up of the giant Chinese markets for the development of trade and commerce.
I shall concentrate on the international dimension, to which the hon. Member for Walthamstow (Mr. Deakins) addressed his interesting and perceptive remarks. By that I mean four things. Hong Kong is one of the key parts of the world's financial and trading system. It is one of the wealth-creating centres of the planet. It is a source of physical wealth and a range of new ideas. It is interesting that Hong Kong inspired the Foreign Secretary in a former role to develop his idea of enterprise zones, which have been introduced in the United Kingdom and now in the United States. Fourthly, it is the home of millions of free people, businesses and of tens of thousands of families, many of whom have tasted oppression in the past and clearly remember what happened in Shanghai.
So the autonomous survival of Hong Kong, without any undermining by the Communist party, is internationally vital. There is international interest in the survival of an autonomous Hong Kong. It is not merely a matter of pride, duty and interest here and in Peking, although it is also those things.
If there is an internationally vital requirement it needs two things. First, it needs a strong, internal SAR government, as many hon. Members have rightly observed. Minds will have to be made up not only on the ideas in the latest White Paper for the Legislative Council but on the Executive Council and the governorship before 1988. A decision will have to be made about whether there is to be a gubernatorial type of government with one figure in charge in 1997 or whether it is to be a government of a different sort. It will be essential for that government to develop. While the development may take time, the decisions must be made during the next two or three years. If the Peking cadres are to be kept from infiltrating the structure of government in Hong Kong, as they will naturally do, a strong government is essential.
Secondly, international interest and commitment must be secure. Some people will tell us not to worry about that,
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because Japanese and American capital will pour in as it is doing already. That is true, but the money will go out as fast as it has come in the moment when it is felt that the world has lost interest in the future of Hong Kong and that the special autonomous region is sinking back into the grey mass of greater China.
So we have an important task. We must ask ourselves what we can do. A number of suggestions have been made. I shall repeat some and make some new ones.
First, I like the idea of the annual report to Parliament that the right hon. Member for Leeds, East (Mr. Healey) and others have mentioned. It should be a report about the work of the joint liaison group and about internal developments. Indeed, I think that we should insist on that. My right hon. and learned Friend the Foreign Secretary should adopt that as a Government commitment and procedure.
Secondly, it must be right that there is involvement by the Hong Kong people in the joint liaison group—perhaps not immediately, but in due course. We shall need to press for that. Thirdly, the Hong Kong people must be allowed to help to draft the basic laws. I hope that my right hon. and learned Friend's optimistic assessment of that possibility is right and that that will happen, as it is essential. Most importantly, Hong Kong's autonomy as a separate region, with a separate political, trading, commercial and legal system must be underpinned internationally.
That means, in particular, two things. First, it means that the assertion made by my right hon. and learned Friend very strongly that what is written and settled is an internationally legally binding agreement must be made a living and continuing reality. Secondly, it means that there must be some means of ensuring that Hong Kong SAR passports are accepted everywhere, like the passports of any other sovereign state. There are two sides to the travel documents question. One is the issuing of them and the other is getting the international community to accept them. It is vital that SAR passports should be recognised throughout the international community.
I have mentioned a few things. The point I wish to emphasise is that it is within our power to achieve them. It is not true that all the cards remain even now in Peking's hands. In this debate I have detected signs of that dismal fallacy—a fallacy of the past that has no relevance today—that where there is no sovereignty, there is no influence. Any trade, diplomatic or financial negotiator or banker will confirm that that is not so. But the perpetuation of that fallacy has caused this country great grief and harm.
I am all for realism in recognising the future position of Hong Kong as an SAR of China, but realism must not become defeatism or disinterest. I fear that that would be the possibility if some of the views expressed in the debate were taken to their logical conclusion.
I believe that the agreement is the best that could be secured. However, this is not the time for opening champagne or for celebratory self-congratulations. If that tone has crept into the debate on some occasions, I regret it. The Chinese proverb says,
"Never praise a day before evening."
There is much wisdom in that when we look ahead to the enormous tasks on which we are only just now embarking in dealing with the future stability, security and prosperity of Hong Kong.
We are at the beginning of a very long and arduous journey to ensure the survival and prosperity of what has

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so far been one of the 20th century's most glittering successes and a beacon of light amidst a world of much darkness and misery. It is essential that we keep that beacon alight.
8.33 pm
Mr. Andrew Faulds: In my 10 minutes I shall not have time to make reference to the right hon. Gentleman's speech, which is the normal tradition, and nor do I intend to give way to interventions. I think that the introduction of the 10-minute rule is a nonsense, and I hope that we get rid of it.
I believe that both Governments, the British and the Chinese, and particularly their negotiating teams, deserve our warmest congratulations for having evolved an extraordinarily satisfactory agreement. And I believe that confidence—that essential component for its successful fulfilment—will be maintained by the conduct of the three parties involved in Hong Kong's future.
Concern has been expressed both here and in Hong Kong that China might not observe the agreement over the years. I strongly oppose that view—and there are very good reasons for doing so. First, historically, all Chinese Governments—whether dynastic, republican or Communist—have meticulously honoured their international agreements. Second, the process of the reunification of China will not be complete until Taiwan returns. Third, China needs to pursue the process of modernisation and will certainly not wish to damage its "open-door policy". Fourth, China needs the foreign exchange generated by Hong Kong. Finally, China may even want to learn from Hong Kong some of its dynamic commercial and trading skills.
Britain, of course, wants the agreement to work because of Britain's commercial and trading interests in Hong Kong's prosperity. But even more importantly perhaps Britain wants to tidy up the ends of empire responsibly. That she must do. What of the views of the Hong Kongers—the people most affected by the ending of the lease and the abandonment of empire? I have visited Hong Kong a number of times over the last few years, usually on the way to or from China in the company of my admirable friend, the hon. Member for Christchurch (Mr. Adley). On such visits, contacts in Hong Kong are normally pretty limited on the establishment round. But the purpose of my last visit in September—three days after the initialling of the agreement—was to elicit the reactions of the range of contacts which were set up at my specific request—and most of those were certainly not on the cocktail circuit.
Two reactions to the agreement were immediately clear from all those contacts. First was the "Chineseness" of the Chinese of Hong Kong—the feelings of attachment and affection for the land and the culture of their mother country, and that feeling seemed to override most of the adverse considerations. Second was the view stated time and again by all the groups I talked with, that the Chinese Government had met nearly all the points put to them at various meetings by Hong Kong representatives of a variety of interests. The agreement, they conceded, was much better than they had thought attainable.
But the real surprise of that last visit was the moderation and rationality of the reaction from those I thought would have responded otherwise. We Parliamentarians are great proponents and exporters of the Westminster model. But it does not always fit. And it often does not work. I had
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expected strident demands for the immediate introduction of direct elections to the legislative council. But it was not like that. Even the radical groups and the young intellectuals—a most impressive crowd of young men and women—were not arguing for direct elections now or tomorrow. They understand the unique and precarious position of Hong Kong. They want its prosperity to survive. In all the many conversations I had, most in the excellent company of the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston), these supposedly radical people seemed to me to accept, indeed to stress, the responsible view of "phasing in" direct elections and seemed to accept too the need for indirect elections for some period of time, although I must say that the functional constituencies were not universally popular.
What time, of course, is the crucial question. I criticised the Green Paper on Hong Kong's future while I was there, on its time scale of change. The recent revised White Paper has already brought the start of the process three years forward from the suggested 1988, to 1985. So far so good. However, I do believe that even this position is unduly pessimistic about the ability of Hong Kong people to comprehend the democratic procedures, although education in that area is mooted, and certainly needed.
The people of the territory have never had the chance or the choice of participation. I understand the argument about the Chinese tradition of respect for authority. But Hong Kong has had compulsory education for 32 years, since 1952. And Western pressures and attitudes have certainly been at play over many decades—whether always advantageous is another matter. Perhaps Hong Kong's people have more sense and more appreciation of Hong Kong's special situation than the local Government allow for. Democracy is an infectious thing, once given rein. And historical processes always move much faster than expected. I think that a somewhat quicker pace of change to fully representative government than the White Paper allows for, will have to be met in Hong Kong.
Then there are issues that remain out of the residual responsibility of empire. I am perturbed that the rights of protection and travel under the British Dependent Territories citizenship cannot be transmitted after 1997 to the first generation of Chinese Hong Kongers. I wonder if Her Majesty's Government have tried hard enough on that. Perhaps there was strong resistance from the Chinese Government to the possibility of such rights continuing and lasting beyond the 50 years of the two systems in one country. But perhaps we did not want an inflow of immigrants.
I am particularly concerned about the non-Chinese residing in Hong Kong —children of citizens of the British Dependent Territories who will become stateless after 1997 and who may number between 6,000 and 10,000. However, I understood the Foreign Secretary to give an assurance about them. Then there are the British Dependent Territory citizens living outside Hong Kong. Their numbers are difficult to estimate but a figure of 3,000 Indians, among others, has been put forward. Do we in Britain not have a responsibility to assure the future of those last categories? Have we not a duty to them on this demise of Empire? Fortunately, we will be able to pursue those matters on later legislation on nationality. But there are two further points that I must make. If and when direct elections to the legislative council are introduced—as I

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think that they will be before 1997—will privilege in the sense that we in this House enjoy it, of protection from prosecution, apply to members of that body?
Consideration must be given too to the abandonment of the oath of loyalty to the Queen—much as we love that admirable lady. The view has been expressed in Hong Kong that future members of the Legislative Council might not be prepared to give such an oath.
I am sorry to have had to rattle through my speech at such a ridiculous speed. I hope that the 10-minute limit will be reconsidered. However, I shall be grateful if the hon. Gentleman will make some reference to all those points.
8.42 pm
Mr. Hal Miller: I wish to treat with the subject of change raised by the hon. Member for Warley, East (Mr. Faulds) in the context of the need to maintain the prosperity and stability of Hong Kong. Several hon. Members have spoken today of the need for a realistic approach. I trust that my own note of realism will not jar on the atmosphere of eulogy and euphoria that has largely permeated the debate so far. I have already congratulated those responsible on the achievement of the draft agreement, but we are now more concerned with its implementation.
First, there is a question of prosperity. Hong Kong must prosper if it is to continue to enjoy its present autonomy, let alone the autonomy promised by China, because a Hong Kong that is not prosperous would not merit the operation of the concept of two systems within one country. China's concern for the prosperity of Hong Kong is evident from that country's expressed worries about the budget deficits in Hong Kong and the level of welfare benefits already available, which are not paralleled on the mainland.
Hong Kong, therefore, is under an obligation to succeed. That obligation has certain positive features. There has to be a response in the development of new products and the promotion of new markets. That, coupled with the political change now set in train, will inevitably involve changes in the education system in Hong Kong which—in parenthesis—I myself think are long overdue and would have hoped to see brought forward after the 1967 riots.
Negatively, there is the pressing need for Hong Kong to be protected against the swelling tide of protectionism in the developed markets of the world. That is a matter in which Britain's role and continuing interest are most important. As a member of the EEC, we are not only an important customer but the possesser of an important voice in the international bodies which regulate trade. We must secure Hong Kong's separate and autonomous representation on those bodies. Britain must also do a great deal of detailed negotiation on behalf of Hong Kong on such matters as traffic rights for Cathay Pacific Airways until 1997.
However much some people in Hong Kong may object—and some do—to continuing British involvement, and however much others may feel let down by Britain, Britain still has a responsibility to exercise. We will continue to be responsible for defending Hong Kong's interests on the joint liaison group before the year 2000.
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The second matter of importance is the stability of Hong Kong. Peking could not stand idly by and watch Hong Kong become unstable. That assumption has nothing to do with the draft agreement. It has been the case ever since 1949 that destabilisation would inevitably bring involvement. That is why the draft agreement provides for Britain to continue to administer Hong Kong until 1997, and I believe, why the British Government have declared their determination to govern until the transfer of sovereignty and administration takes place. After 1997, under the agreement, Hong Kong will still remain responsible for internal security. It is foolish to ask China whether it intends to station the PLA in Hong Kong or to introduce conscription. The Chinese are bound to say that they have every right to do so. However, there is no evidence that they wish to do so.
Hong Kong has to maintain internal security, and it will be important to maintain a strong civil service, free from political manipulation, as well as an independent judiciary. Hong Kong's commercial, financial and industrial success depends on laws that are certain and subject to independent interpretation as much as on an impartial and efficient civil service and police force.
The agreement provides for an executive to be subject to an elected legislature. The question that exercises many hon. Members is how those elections fit in with the concept of continuing British administration, the maintenance of stability and the transfer of power. On what system, furthermore, should they be based? A recent editorial in the Ming Pao paper made it plain that China had promised a high degree of autonomy but not necessarily a high degree of democracy. It is obviously important not to arouse any further the suspicions of Peking that were already a roused when the Green Paper was introduced before the negotiations on the draft agreement were completed. There is a danger that the Chinese may regard the White Paper as having been produced in an undue hurry. It is most important not to regard the elections as a test of China's sincerity about the agreement or to take them as an earnest of Britain's washing her hands of responsibility for Hong Kong. We must all understand that China would be bound to oppose the formation of a pro-Taiwan Right-wing political front. That could only have a destablising effect.
The White Paper was surely right to provide increased opportunities for training people in elections and leadership while allowing for consultation with China on the joint liaison group. We have to take China along with us and to settle Chinese suspicions, and the result is not likely to be an electoral system based on the Westminster model. As the UMELCO paper recognises, it is likely that a Hong Kong system will evolve and that Hong Kong leaders will emerge to stand up for Hong Kong's interests.
The aims of Britain, China and Hong Kong are the same—to work for a prosperous and stable Hong Kong. There will be increasing co-operation to that end, and not only on the joint liaison group for whose work the assessment office report has provided an initial agenda. People have derided the assessment office, but its report reflects views in Hong Kong, as the opinion poll commissioned by UMELCO has confirmed. In view of the attack made on UMELCO, I should like to pay tribute to it as its poll has been found to reflect all sectors of opinion in Hong Kong. Some tribute should be paid to the care and trouble that it has taken to elaborate it and for the excellence of its memorandum.

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Chapter 4 of the report draws attention to the items that Hong Kong people want to be dealt with on the joint liaison group. Most notable among them are the drafting of the basic law and the possible conflict between the laws of Hong Kong and that basic law. That issue is still a source of much anxiety and must be resolved. They also want the joint liaison group to deal with the appointment of the chief executive and future nationality. However much some people in Hong Kong might feel aggrieved, especially the young ones who are angry that their future has been decided by Britain and China in this way, and however much older people might feel bitter about the consequences of the British Nationality Act 1981, Britain has to remain responsible until 1997. If Britain gave up that responsibility, China would assume it—a vacuum could not exist.
The success of the two systems in the 50 years after 1997 depends on the success of the 12 years remaining until that date. Of course Hong Kong people are worried about changes in China—they always have been. It has never been possible to see more than five years ahead in Hong Kong. The draft agreement merely preserves that. The task in the next 12 years is to knit Britain, China and Hong Kong together ever more closely through the joint liaison group and through practical projects of cooperation such as the nuclear power plant, the telecommunications project, the Canton motorway, the second harbour crossing and so on. Hong Kong has an important role to play in the development of China and as an example to Taiwan of two systems in one country. However, its ultimate success will depend on the confidence that its people show in their own future and the efforts that they make to secure their own prosperity and stability.
8.51 pm
Mr. Dennis Canavan: I welcome the draft agreement in principle. It marks the beginning of the end of a long era of British colonial rule which dates back to the opium wars of the last century when Britain grabbed Hong Kong from China by an act of imperialist aggression and trickery. As far as we can gather, the draft agreement is generally welcomed by the people of Hong Kong. I say "as far as we can gather" because the method of assessment of opinions in Hong Kong is imperfect. By saying that, I am not making a personal attack on those involved in the assessment office. They had a difficult job and it was made more difficult by the fact that there is no representative government or assembly in Hong Kong. Indeed, there are no elected representatives in Hong Kong with any meaningful power and this is a point to which I shall return later.
Despite the general welcome of the agreement, some Hong Kong people have some reservations and fears. Those fears and reservations include the role of the people's liberation army, the possibility of conscription, nationality rights, passport rights, human rights and personal freedoms, freedom of religious practice, the desire to participate in the work of the joint liaison group and the desire to participate in the formulation of the basic law. There is also a general fear about undue interference by Peking. The best way in which to alleviate those fears and reservations and the best guarantee of preserving all that is worth preserving in the Hong Kong way of life is to maximise the autonomy of the people of Hong Kong. Complete independence is not an option—it never was.
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Sovereignty will ultimately be transferred to the People's Republic of China but even without complete independence there could be a high degree of self-determination. That would involve a high degree of internal democracy replacing the existing system of colonial patronage.
Last month, the Hong Kong Government published a White Paper to which several right hon. Members, including the right hon. Member for Old Bexley and Sidcup (Mr. Heath) have referred. I do not often agree with him, but I entirely agree with what he says about the White Paper. It is too little and too late. It proposes that, next year, an elected element will be introduced to the Legislative Council. It is worth reminding the House that, despite the introduction of that elected element, not one member of the Legislative Council will be elected directly on a universal franchise. Less than 50 per cent. of the Legislative Council in 1985 will be elected by any method. The functional constituencies which are proposed are unnecessarily divisive—they might reinforce existing or potential divisions in society. Moreover, the White Paper contains no proposals for elections, direct or indirect, to the Executive Council in 1985.
I understand what right hon. and hon. Members have said about it not being desirable suddenly to introduce tomorrow or next week a mini-Westminster model of democracy in another part of the world with a different culture, a different way of life and different traditions and call it the ideal model of democracy. There must be a phasing-in programme. Some of the pressure groups that I met during my recent visit to Hong Kong made that point strongly. However, it would surely not be unreasonable to suggest the target that by, say, 1990, the entire Legislative Council should be directly elected on a universal franchise, that the Executive Council, or whatever body replaces it, should be elected indirectly from the members of the Legislative Council and that the head of that council—the governor, chief executive or whatever he is called—should also be elected from the membership of the Legislative Council. The White Paper's proposals are far too pussy-footed, and one of the reasons for the go-slow attitude is that—I was sorry to hear this view expressed in the House as many people regard it, rightly or wrongly, as the mother of democracy—some people think that democracy is not bad as long as there is not too much of it and it is possible to predict who will win the elections. Some people seem to be afraid that those who win the elections may be a bit too radical or Left-wing and that perhaps the odd nasty Socialist may get elected to the Legislative Council. If people genuinely believe in democracy through direct elections they should not be two-faced. Adopting double standards and saying that democracy is all right so long as we win is hypocrisy rather than democracy.
I would not say that the Chinese version of Socialism is perfect, but it manages to feed the billion people of China. Anyone who imagines that the naked unbridled capitalist economy of Hong Kong could be transplanted to the People's Republic of China and continue to feed all those people is living in cloud-cuckoo-land. Although the draft agreement provides that for half a century after 1997 there will be guaranteed co-existence for a capitalist system alongside the Socialist system, no realistic politician, on whatever side of the ideological divide, could expect such co-existence to continue for ever. There will have to be some kind of accommodation between the two systems.

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The Hong Kong economy was largely built on the hard work and endeavour of its people. Unfortunately, this was sometimes accompanied by the exploitation of cheap sweated labour by multinational capital. That exploitation will not and should not survive and I hope that it disappears long before 1997. That is why, despite the provisions of the draft agreement, there will eventually have to be some accommodation between the two systems so that eventually all the people of the reunified China can live together in peace, equality and dignity, with respect for one another's human rights and a higher degree of social justice for all.
9 pm
Mr. Robert Adley: I am fortunate that you, Mr. Speaker, have returned to the Chair and called me as the clock shows 9 pm when we escape the appalling penance of the 10-minute limit. You will correct me if I am wrong, Mr. Speaker, but I understand that that is the position. It is a great tribute to your judgment that you have called me at this time.
Mr. Speaker: Order. The hon. Gentleman tempts me. There is no longer a 10-minute limit on speeches, but quite a number of other hon. Members wish to take part in the debate.
Mr. Adley: Thank you, Mr. Speaker. I have asked my hon. Friend the Member for Orpington (Mr. Stanbrook) to give me a swift dig in the ribs when I reach nine minutes.
I hope that those who observe our affairs will not take the thinness of attendance at this debate as in any way suggesting any lack of interest in the future of Hong Kong. I believe that more of us have spent more time genuinely worrying about whether we can get this matter right than any other single issue for many years. Members in all parts of the House are deeply aware of our responsibility to try to ensure that the people of Hong Kong have the future that they want.
I shall not take up time repeating the tributes to which my right hon. and learned Friend the Foreign Secretary and his colleagues are so clearly entitled. As he rightly said, we must remember the deep roots of history underlying the Hong Kong situation. We know the political reality, but the practical reality is also legion.
Only 3 per cent. of Hong Kong's fresh water supply can be obtained from the present territory of Hong Kong island, Kowloon and Stonecutters. When we talk about what the Chinese have done in the past and might do in the future, we should remember that they could at any time have turned off the water supply and taken over. The best guarantee that the people of Hong Kong have as to the likely behaviour of the Government of the People's Republic in the future is the reality of their behaviour since 1949.
My right hon. Friend the Member for Guildford (Mr. Howell) suggested that sovereignty was not the key issue. However, it always was for the Government of the People's Republic of China. It is no use our suggesting that it was not, or is not, an important issue for them. Although they could have taken over Hong Kong any time they wanted to, the negotiated return of Hong Kong to mother China is and always was the key emotive issue for them. More than two years ago, the previous Chinese ambassador said to me that until sovereignty was conceded
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nothing would be possible, but once sovereignty was conceded everything would be possible. As a result of that, I was perhaps slighty less surprised than some hon. Members at the progress that we have been able to make since we conceded sovereignty.
Two points require our attention. One is the pace of change. Those who hold power in Hong Kong now like it, and want to hold on to it. They have not been elected to it and have an obvious incentive to resist change. The idea of an annual debate is acceptable, but it is a peripheral issue and to suggest that it is the overriding priority emerging from the debate is indicative only of the priorities of those who have put the idea forward as though it is the most important thing in the world.
Those who have power in Hong Kong at the moment were appointed by the governor, who was appointed by Her Majesty's Government. They have always looked to London as the ultimate source of their patronage, and they want to continue to look to this place as the source of influence for Hong Kong. However, it is in Hong Kong itself that the changes must take place. Therefore, we should be encouraging change in Hong Kong: not change for change's sake but because it is vital that the people of Hong Kong should equip themselves with their own political institutions long before 1997.
I have never been a sycophantic supporter of UMELCO, so all that I have to say about it is to quote a sentence in a leading article in the Hong Kong Standard on 11 May which said:
"For a self-proclaimed mirror of Hongkong opinions, Umelco seems to reflect not so much the daily concerns of the Hongkong public but the obsessions of the few."
By quoting that, I am suggesting to my hon. Friend the Minister of State, Foreign and Commonwealth Office, and the Government that we must broaden our listening as we go into the next 12 years. We simply cannot allow a handful of people who are appointed by the governor to be taken as solely, or even mainly, representative of the genuine voice of Hong Kong. That is why I agree with the point that my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) made, particularly about the young people in Hong Kong.
Most hon. Members have spoken of citizenship. We must not forget that there are between 3,000 and 4,000 people in the Indian community, many of whom held British Indian passports before India achieved its independence in 1947. The Government must pay particular attention to that group.
My second point is about Chinese intentions. I believe that the Government of the People's Republic of China intend to observe both the spirit and the letter of the agreement, but they are looking for advice and guidance on the best way to achieve this objective. They wish to encourage change, provided it is change that aids in the maintenance of stability in Hong Kong. If I were to be so presumptuous as to give the Government of the People's Republic of China some advice, it would be to involve the people of Hong Kong in the creation and development of their own institutions. A motto of "Invite, involve and entrust" would be a good way for the Chinese Government to ensure stability in Hong Kong by keeping the people content and confident in their own future. I agree with those who have said that the people of Hong Kong should be involved in the drafting of their basic laws. After all, they themselves will have to live under the laws.

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One of the Government's main duties must be to encourage change and to keep an eye on those who want to stifle it. I do not share the concerns about the sincerity of the Chinese Government expressed by my right hon. Friend the Member for Guildford. If he is concerned about the sincerity of the Chinese Government's intentions, then surely he will agree that the best way to keep a check on that sincerity is to ensure that the people of Hong Kong are equipped with democratically elected institutions at an early date. The development of such institutions by Hong Kong people will make it far more difficult for the Chinese Government to interfere.
Numerous concerns are expressed daily by the people of Hong Kong, but in many ways it is extraordinarily interesting that we have 12 years to iron out the outstanding problems. One could only wish for the same thing for industrial disputes. The timing between events being discussed and action being taken causes trouble, and the shorter the time, the more the trouble. These 12 years are precious years and they are more than enough time to deal in detail and at reasonable length with the many problems that understandably concern the people of Hong Kong.
It is interesting that the agreement has been objected to by only two groups. One group is the Taiwan regime and the other is the Government of the Soviet Union. That speaks for itself. There is nothing that the Taiwan regime fears more than the ability of the Government of the People's Republic peacefully and quietly to conclude an agreement with Her Majesty's Government which is acceptable to the people of Hong Kong, which is implemented without too many problems and which shows the Taiwan people, especially the young, that the scare stories which are constantly being spread by Taiwan and its agents in Hong Kong about the intentions of the Government of the People's Republic are unjustified. I am more than happy to commend the agreement to the House.
The best guarantee for the future would be a broadly based and legitimately enfranchised representative body. I hope that the Government will listen not only to those who are appointed by the British Government but to a far broader base of people in Hong Kong. I wish the millions of citizens of Hong Kong the very best for the future. We shall be keeping more than an eye on them because we are responsible for their welfare for at least 12 years. The question is not whether the House will monitor what is going on. The Chinese do not want to take over Hong Kong and they do not want the British to relinquish control before 1997. We shall indeed be keeping a close eye on things, and we wish Hong Kong well.
9.12 pm
Mr. Tom Clarke: The hon. Member for Christchurch (Mr. Adley) made a crucial point when he referred to the views of the Chinese towards the Soviet Union and on the likely attitude of the Soviet Union towards the agreement. The debate has been interesting and realistic. It has reflected the views of the House as expressed in the various debates that took place during the negotiations. It was accepted that the agreement would be immensely difficult and complicated and I would be churlish—I do not intend to be so—not to acknowledge that the agreement was hard fought and entailed close examination of the small print. In common with all those who have contributed to the debate, I
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welcome the agreement. However, no one should be complacent while we study these matters over the next few months and on into the coming years.
I agree with those who have suggested that we shall be hearing about these matters for a long time to come. The leader in yesterday's edition of The Times made an important point, although I did not agree with the leader entirely. It offered the opinion that
"Both the full Commons and its Select Committee on Foreign Affairs must meanwhile keep closely in touch with the colony's fears and aspirations and the Government should be generous in allocating parliamentary time."
That is important, but equally important is the reference to "fears and aspirations". I happen to believe that the greater of the two is aspirations. The agreement offers a great deal of hope to the people of Hong Kong and to others well beyond its borders. I say that in the spirit in which comments have been made by many of my hon. Friends. We would not have devised the system of government that we have seen in Hong Kong in recent times if we had not believed in democracy, and we believe that a strong case should be made for improving democratic processes in Hong Kong. Having said that, I believe that the people of Hong Kong are beginning to indicate that they, too, take that view. I visited Hong Kong in March with my hon. Friend the Member for Hamilton (Mr. Robertson). We were impressed by the educational system and by community involvement, as we saw it. The young people whom we saw taking part in those activities, and in industry and in the public service in Hong Kong are the very kind of people who, notwithstanding the agreement, will say that they want to have a role in shaping their society. In my view, they are absolutely right.
I believe that the agreement is important. We recognise the importance of Hong Kong in trading matters. We also recognise that importance in the context of our relationship with China and the wider world. I was interested to read among the views expressed in the consultative document an assessment of the reaction to the agreement by the Hong Kong Federation of Education Workers. It is to be found on page 23:
"The solution of the Hong Kong issue under the innovative guidance of the 'one country, two systems' concept will be conducive to maintaining the stability and prosperity of Hong Kong. Moreover, the success of this 'one country, two systems' arrangement may embody a more far-reaching international significance."
I believe that to be right. I believe that the agreement, and the events which will follow, can have a very profound international significance. As my hon. Friend the Member for Hamilton is aware, because we visited the region, China has in Shenzhen an economic shop window which suggests that it is very much in the interests of China that Hong Kong should be seen to be prosperous and successful.
In view of the international impact of the agreement, it is right that the House should consider carefully its meaning in that context and beyond. In previous debates and discussions, hon. Members, including myself, referred to the refugee problem. Today the Secretary of State for Foreign Affairs repeated a view which he has twice expressed in the Chamber on the matter. He has said, broadly, that the refugee problem has nothing to do with the agreement; it ought to be left on one side and should be dealt with at another time. I happen to believe that it has everything to do with the agreement. The fact that refugees are living in those conditions and in that society

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is an affront to everybody who is involved in the discussions. I should have liked to hear a great deal more from our friends in Hong Kong about an attempt to seek a solution to the Vietnamese refugee problem.
I should like to refer to other views which were expressed in the document dealing with the assessment. On page 41 we are told that a group of individuals has said:
"We do not care what happens to Hong Kong for our sake. However, we worry for our children".
That is an admirable expression of an opinion which people understandably hold. I am sure that all hon. Members wish those who express such a view success in the objectives that they have set. Nevertheless, I believe that even the children of those people do not want the refugee camps to be continued but an international agreement to be arrived at. Notwithstanding the views which the Foreign Secretary has expressed previously on this matter, I believe that it would help us considerably if a new British initiative were taken. I am sure that hon. Members would encourage the Foreign Secretary to take that view.
Mr. Faulds: My hon. Friend has the luxury of being able to allow interventions which those of us unfortunate enough to speak between 7 pm and 9 pm were unable to do. Does he agree that the efforts that the Hong Kong authorities have put into taking care of the refugees are extraordinarily concerned and they have done a good job but that it is totally unreasonable to expect them to bear that burden on their own? It is essential that not only should the international community accept obligations in that area but that the British Government should be far less mean-minded in future in their attack on the problem.
Mr. Clarke: Yes, I am delighted to agree with my hon. Friend. When my hon. Friend the Member for Hamilton and I visited one of those camps, we were full of admiration for the work being done. Nevertheless, we noted that the camp was next door to a prison which we had to go through in order to see the refugees. Excellent work is going on, but I entirely agree that the Government should apply themselves to trying to seek a permanent solution to that difficult problem.
During future debates—I have no doubt that there will be debates on the Bill which the Foreign Secretary mentioned in his opening remarks—there will be further discussions about nationality because grey areas remain. There will be discussion about land ownership, defence and, above all, human rights. As those discussions continue, the relationship that has been developed between Britain, the people of Hong Kong and the Government and people of China can be improved, good though many of us believe those relations to be.
The Foreign Secretary said that the Chinese contribution to the discussions represented vision and realism. The very fact that he said that at this difficult time in international affairs will be welcome. I take the view, which I believe is shared by many of my hon. Friends, that the agreement is well worth while. But it ought to be seen not as the end of the story but as the beginning of what could be a new era of hope for the people of Hong Kong in terms of their attitudes to social democracy and so on, and, perhaps even more importantly, to the realisation of
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world peace. In the negotiations that have taken place we have set an example to the rest of the world which others might be encouraged to follow.
9.22 pm
Mr. Michael Marshall: I am glad to follow the speech of the hon. Member for Monklands, West (Mr. Clarke) because I found a great deal with which I could agree. May I at the outset declare my interest as a parliamentary adviser to Cable and Wireless. I do that in the particular context of Hong Kong because, as many hon. Members will know, Hong Kong's raison d'être as a financial and communications centre is a key element in the future not only of Hong Kong but of the People's Republic of China.
It was in that sense that I found myself in agreement with my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) when he talked about the competition between Singapore and Hong Kong. Therefore, if the House will allow me, I want to deal a little further with the experience of Cable and Wireless in Hong Kong and in the People's Republic of China. Its experience in the past and plans for the future, and above all the commitment which it has made to that triangular relationship, is of some significance.
It is fair to remind the House that the commitment which companies such as Cable and Wireless have made in Hong Kong, which goes back many years and involves many hundreds of millions of pounds of investment, has presently assured Hong Kong its standing as the leading communications centre in the far east. When we ally to that the joint ventures which have been agreed with the People's Republic of China, the implications become of extreme importance.
A co-operative agreement has been made for a microwave link between Guandong province and Hong Kong. That opens up communications with south China and connects with the Hong Kong-Guengzhou communications system. There is a telecommunications service agreement for exploration work in the south China sea. That is done through the Huaying Nanhai joint company. If energy resources are found in that part of the world, it will have a strong effect on the industrial development of China and Hong Kong and that will be important for companies such as Cable and Wireless and BP, which is directly concerned.
The agreement for a joint venture to provide a telephone service for the Shenzhen special economic zone is indicative of the way in which a British company operating in Hong Kong can provide the infrastructure for much of the new development on which the People's Republic of China depends.
China is to be commended on the way in which a cordon sanitaire has been introduced through the economic zones to allow an integration and interface between the two systems operated by Hong Kong and the PRC using the economic zones as a buffer. It is in Britain's interests as well as Hong Kong's interests to ensure that the economic zones are a success. A number of Hong Kong Chinese industrialists are already investing in the zones, and further afield in Shanghai. That is wise.
I support what my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) said about investment. The British share of investment and trade in Hong Kong has declined rapidly. American and Japanese investment has increased substantially, as has that from other

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European countries. Like many other hon. Members I visited Hong Kong recently. I am grateful to the Hong Kong Government for all that they did to enable us to see what 'was going on. However, I was depressed that already substantial numbers of Japanese and American companies are active on the ground and considering how they can establish manufacturing facilities in Hong Kong with a view to trading from Hong Kong with the People's Republic of China and moving progressively into the economic zones and hence into a wider Chinese context.
I urge British industrialists who are looking for future markets to think carefully about the opening up of China through Hong Kong. Some of us have been involved in that part of the world for 20 years. We know that it is a long haul. It took about 10 years for Cable and Wireless to conclude some of its early agreements. But agreements which the People's Republic have made since 1949 in trade and industry have been honoured. The record is good.
I urge British and Hong Kong companies to look to China for a strengthening of the link that already exists. That is in their interests. The greatest underwriting for the future lies in that investment for Hong Kong, Britain and China.
I have made those points by way of preamble. I also want to discuss some of the wider questions that have come from the agreement. However, industrial matters are of a wider significance than was perhaps appreciated until the agreement was signed. We now see the opportunities opening up. The examples that I have cited reflect farsighted vision in the past.
I am sympathetic to the whole question of Hong Kong passport holders. I should like to put one or two thoughts to my hon. Friend the Minister in the hope that he will convey my suggestions which I make as a contribution to further discussion. This is a complex matter. I do not pretend that what I am about to propose can be assumed automatically to be appropriate. I should like my proposals to be tested.
As a number of hon. Members have said, there is a wide range of existing passport holders in Hong Kong, and that raises serious problems. Already there are some problems for the so-called British dependent territories passport holders. There is plenty of evidence, from conversations that I and others have had, that those who come into this country with such passports experience difficulty, even as regular travellers, in making their way through customs and immigration. From time to time, there are particular problems with delays, investigations and so on.
It would be helpful to have a visa stamp in the passports emanating from Hong Kong that are used by regular travellers. Those regular travellers who can establish—I believe they can do this easily—a bona fide reason for their regular travel patterns should have their passports stamped with a visa. That would follow the American path whereby, after the initial visa is stamped, the passport holder can, in due time, move into a higher category of unlimited access. The British dependent territories passport allows that system, but I believe that my principle would help in two ways. First, the visa stamp system would facilitate the movement of regular travellers with a bona fide reason for travel. We could reasonably put it to the customs and immigration authorities that the movement of those travellers should be facilitated. Trade
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and investment and the links between Hong Kong, Britain and China would be facilitated if the passage of travellers were eased in that way.
Secondly—I hope that my suggestion has a wider significance and provides additional reassurance to Hong Kong residents—it would follow that, when the passport expired, the visa stamp would be transferred from passport to passport. After 1997, the authorities in the People's Republic of China could be reasonably expected to honour such a visa stamp. People are genuinely worried about the future of their passport after 1997. I believe that the use of a visa stamp would help to alleviate the difficulties. Having moved in that direction, I should expect the Government to look to the Commonwealth countries and members of the Community to follow suit. The assurances about access and, therefore, freedom of travel might prove helpful in the short term and, above all, in the longer term.
I do not agree entirely with my hon. Friend the Member for Christchurch (Mr. Adley), although he made a good speech. He brushed aside the importance of accountability to the House. I support the right hon. Member for Leeds, East (Mr. Healey) in putting forward a proposal, which I advanced in Hong Kong, for an annual debate in the House. I suggest that a convenient time to hold that debate would be during the annual foreign affairs debate. I believe that there should be a printed report on the work of the joint liaison group. It is true that the assessment office has provided us with a worthwhile agenda. but the provision of an annual report would help us to focus our debates. We may not want to debate this issue in every foreign affairs debate, but over the next few years such a debate would provide us with a check list on which we could work. It is important for the House to be seen to commit itself to that process of continuing observation and comment. In considering the work of the joint liaison group, there may also be opportunities for us, through the Select Committee system, to make a positive contribution. I accept that a great deal remains to be done.
With regard to the question of a wider franchise, I am somewhat reluctant automatically to argue that the Westminster model should be transplanted to Hong Kong. I believe that progress in that direction should be left essentially in the hands of those whose future lies in Hong Kong. In saying that, I am not overlooking the fact that there are probably many people in Britain who can make a contribution. This House and Her Majesty's Government have a continuing responsibility. I hope that a genuine feeling for democracy will be nurtured within Hong Kong on a basis that is acceptable to the people there as they face the realities of their future relationship with the People's Republic of China.
When I argue that we should continue to look at the role of Hong Kong—and the relationship of Hong Kong not only with Britain but with China—I do so because I strongly believe that in this House there are many friends of Hong Kong. Many of us have had great opportunities to be involved in trade and industry there. We have made many friends and have come to admire the tremendous success story that Hong Kong embodies.
The partnership between essentially Chinese people and British people has had many things to commend it. Despite my earlier strictures about the levels of British trade and investment, there are still outstanding examples of that partnership. In its own way, it has drawn on the peculiar

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skills and character of the two peoples. I hope that it may long continue, and that this House will play its part in ensuring that it does.
9.37 pm
Dr. John Marek: I regard the debate as one of the most important in this Session of Parliament. I think that it is as important as any other debate that may arise from the Queen's Speech.
I regard the economic development of Hong Kong, its stability and its future prosperity as of the first priority. I agree with the hon. Member for Arundel (Mr. Marshall) that we should seek to arrange the affairs of Hong Kong with the help of the people of Hong Kong—I shall develop that theme later—so that not only do they prosper but there are economic ties with the adjoining parts of the Chinese mainland.
I should like to refer to two points on which I think there has been a certain amount of fudging. The first is whether the part of Hong Kong that was ceded in perpetuity is viable. Everyone says that it is not viable. I also think that it is not viable. It is not viable because, as the hon. Member for Christchurch (Mr. Adley) said, the Chinese could turn off the water taps. It might prove to be very difficult if the water taps were turned off. However, any part of the globe can be viable if other nations have the will to support it.
The Falkland Islands is not a very viable colony. However, it seems to be of strategic value and there may be wealth from the sea and from Antarctica, so we are prepared to spend hundreds of millions of pounds in ensuring its viability.
I remind the House that there is a place in a somewhat similar position to Hong Kong—the city of West Berlin. It is an island surrounded by a political system completely different from its own, yet it is viable. It thrives and its people are satisfied.
I am not advocating that we should take an opposite view to that of the White Paper and that we should stick out for the continued independence of that part of Hong Kong. That would be extremely difficult, but more important, I do not believe that we should do so because the original treaty was unequal. It was forced on the then Chinese Government, and I agree with the People's Republic of China that it was unequal. The People's Republic would have every right, if it wished, to insist on gaining sovereignty.
How do we equate that undisputed right with the right of the people of Hong Kong to self-determination? That does not necessarily mean independence, or becoming part of China or part of the United Kingdom. My definition of self-determination is that we should accede to the wishes of the people. How therefore, do we equate China's natural desire to regain the sovereignty of Hong Kong with acceding to the wishes of the people of Hong Kong?
There is no guarantee that that can be done, but I have every confidence that the People's Republic will act with integrity. If the people of Hong Kong wish to proceed along the lines of the White Paper, I have every confidence that the principle of self-determination for the people of Hong Kong will be satisfied.
I give credit to the People's Republic and to the Foreign Secretary for taking this first giant step—there is still a long way to go—along the road to satisfying the
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principles to which I have referred. Clearly, anxiety and apprehension will increase as we get nearer to 1997. There is no way in which that can be avoided. We must therefore do everything in our power to ensure that there is continued stability in the colony.
There is no guarantee about what will happen after 1997. This House should order its arrangements so that it does its best for the colony up to that time. After that, there is nothing that we can do. We live in a world of nation states where sovereignty is sacrosanct, and we must realise that. It is, I believe, appreciated that when we hand over the welfare and future prosperity of the people of Hong Kong it will become the responsibility of the People's Republic of China.
How can we be satisfied that the people of Hong Kong agree with the White Paper? I am not completely satisfied that the assessment office has done enough. I admit that it tried to do this work independently and that it has genuinely sought to obtain the views of different bodies, institutions and people in Hong Kong. It received a few thousand replies, generally from people who are articulate. Unlike almost every other hon. Member who has spoken, I have not been to Hong Kong, but I know that arrangements were made to take down any views which were given to the assessment office if the person concerned did not wish to write them down.
There is no substitute for democracy, and that means one person, one vote. Until there is a democratic declaration by the people of Hong Kong that they wish to go along the road of the White Paper, I cannot be completely satisfied—it does not matter how elaborate the assessment has been—that this is their genuine wish. Some Conservative Members, excluding those who made the last few speeches, implied that democracy is all right for the United Kingdom but is alien to Hong Kong and China. I find that elitist attitude objectionable. I am certainly not advocating adversarial politics, politics based on the Westminster model or on any of the other western European models. Democracy means that on an issue as important as this one can go to a polling station and cast a secret ballot to say yes or no to a proposal. I need hardly remind Conservative Members that they advocate ballots for certain matters pertaining to trade unions from time to time. People are people whether they live in this country, Hong Kong or elsewhere.
It is important that the White Paper is understood by the people of Hong Kong. They must take time to reflect on it and come to a decision. The right hon. Member for South Down (Mr. Powell) is muttering the question, "What happens if they say no?" I have every confidence—
Mr. J. Enoch Powell: What happens if they say yes?
Dr. Marek: If the right hon. Member wishes to intervene, he may do so, but I shall take issue with him.
Regardless of what other hon. Members think, democracy is an absolute prerequisite for the development and determination of any peoples in any country. The people of Hong Kong should be able to vote on the proposed treaty.
I am confident that people who are sensible, everywhere on the planet, will realise the position and history of Hong Kong, and will say yes. If Conservative Members are not happy about that they are performing a charade because they are congratulating themselves on a

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wonderful treaty and saying that it is good for the people of Hong Kong. I notice Conservative Members smiling. If that is their attitude they are being dishonest. They should be honest, and put the treaty to the test via a referendum.
Mr. Deakins: Does my hon. Friend agree that even the British people do not have the right to pronounce on the treaty or the subject of tonight's debate, because treaties are under the royal prerogative? We are being asked to approve the Government's intention to sign the treaty, but not the treaty itself, but the British people, although we are a democratic nation, are not being asked to approve the treaty.
Dr. Marek: There are shortcomings everywhere. In a recent debate the Secretary of State for Education and Science made a memorable phrase when he said that indirectly elected bodies are nearer to the democratic end of the spectrum. That caused a great deal of laughter, but it is true. A representative democracy is never perfect. Our problem is to get a representative system of democracy as near to perfection as possible. Simply having an assessment office is not good enough. I suggest that we can get nearer to true democracy by having a referendum on the White Paper and how Hong Kong people envisage their future Government.
I take up the pleas of other hon. Members who have said that there must be progress to some sort of directly elected body, whether the Executive Council or the Legislative Council, or another. The hon. Member for Christchurch (Mr. Adley) put it well in his speech when he said that we should involve the people of Hong Kong in the development of their institutions. Other hon. Members said that we should make haste to do so. I do not disagree with that. We have time. It is only 1984 and we have until 1997.
But it is of the utmost importance that we make some sort of progress during that period, so that by 1997 we have a directly elected representational Government or an advisory Government. At this stage, I am not too concerned to spell out exactly which way things should go. That largely depends on the people of Hong Kong and how they see their institutions developing. But it is vital that we should have some form of directly elected democracy in Hong Kong. That is our duty and we should not fudge it. We should not say that Hong Kong and China have never had any democracy and so they should not have any now, because whose fault is that? We should not fudge the issue.
I reiterate that I am satisfied with the White Paper. But I look to the Government to take the people of Hong Kong into their confidence in their future actions.
9.50 pm
Mr. Ivor Stanbrook: I shall concentrate on two matters: the position of members of Her Majesty's Overseas Civil Service now in Hong Kong, and the question of nationality.
On the first issue, Hong Kong is a British colony like any other. Its transition from that status to that of a part of a foreign state involves the same problems for its Government servants as would its transition to full independence. Its colonial status comes to an end on 30 June 1997 and those members of Her Majesty's Overseas Civil Service who have been recruited by the Secretary of
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State outside Hong Kong, but who are then serving there, will be faced with such changes of employer and conditions of service that they will be entitled—as would members of Her Majesty's Overseas Civil Service elsewhere—to leave their jobs on accrued pensions plus lump sum compensation for loss of office. At least, that is what I hope will happen.
I must declare an interest in that I retired from the Colonial Service, now called Her Majesty's Overseas Civil Service, in 1960, with lump sum compensation and a pension which I still enjoy, thanks to the generosity of the Nigerian Government. To their credit, they paid only recently the final instalment of the capital sum needed in order to pay the pensions of all their former expatriate staff.
The question is whether the expatriate staff of Hong Kong will be equally fortunate. My right hon. and learned Friend the Foreign Secretary has not said so specifically. When I intervened in his speech and asked for an undertaking that expatriate staff now serving in Hong Kong would be treated no less favourably than were expatriate staff so situated in colonies that have already achieved their independence, he used a form of words to be found in the White Paper but did not specifically give me that assurance. I hope that my hon. Friend the Minister will give that assurance tonight, because I respectfully submit that it is simply not possible to say that British expatriate staff now serving in Government posts in Hong Kong will be treated any less generously than were the British expatriate staff of other colonies that have received independence.
In all previous cases there has been a public officers' agreement with the successor Government, guaranteeing expatriate staff certain rights. First, serving officers who continue to serve the successor Government remain eligible for transfer or promotion elsewhere in the Overseas Civil Service. Secondly, the successor Government agree not to unreasonably withhold consent from any officer wishing to accept a transfer or promotion, and agree to preserve his pension rights on transfer. Thirdly, pensions derived from service after independence—in this case, after 1997—attract supplementary pensions for overseas service, payable by the successor Government. Fourthly, in the event of premature retirement casued by constitutional changes, the officers concerned receive lump sum compensation from the Government.
Those pledges were designed elsewhere to reassure expatriate civil servants in the colony concerned and to encourage them to remain in the service of the colony after independence, if they were required.
I should like an assurance that the Government intend to apply a public officers' agreement to the officers of the Hong Kong Government service. That is very important because, in the case of Hong Kong, the relevant agreement is with a foreign Government—one that is actually in being, rather than one that is being offered independence on terms—and, furthermore, a foreign Government that has no financial responsibility for the implementation of the agreement.
If China will not pay for the pensions and redundancy terms of Hong Kong expatriate staff, I should like to know who will pay. It may be said that the Hong Kong special administrative region will pay. The officers concerned should be told without delay so that they can make their own decisions about their future careers.

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According to part IV of annex I of the draft agreement, expatriates will be employed
"only in their individual capacities".
They will not be entitled to "privileged treatment" which I take to mean treatment special to expatriate staff, such as expatriate allowances or overseas leave with passages paid. The agreement also specifically states tat, after 1997,
"heads of major government departments"—
and in some cases deputy heads—will be changed. Those posts will not be held by expatriates.
Those changes are not unreasonable, but they will fundamentally affect the conditions of service of the officers concerned. Clearly they will justify the early application of a public officers' agreement, such as we have had in the case of all former colonies, to all expatriate staff in Hong Kong.
It is not good enough to say that this discussion is premature because the event will not take place for more than 12 years. The whole point of the arrangement is to reassure existing staff, all of whom hold positions of great responsibility in the colony and carry on its government at senior levels, about their future. It is very important that the Government should make the position clear. I therefore trust that very shortly, if not this evening, the Government will give an undertaking to all expatriate staff serving in Hong Kong that they will be treated in this respect not less favourably than expatriate staff in other colonies have been treated on independence. I trust that the application of these arrangements will be made now and that the effective date of the public officers' agreement providing for pensions to be payable in Britain in sterling at a fixed rate of exchange will be from the date of the agreement with China as is normally the case with independence agreements.
It being half past Ten o'clock, the debate stood adjourned.

Hong Kong

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Motion relating to the Hong Kong agreement may be proceeded with, though opposed, until Twelve o'clock.—[Mr. Major.]
  Question again proposed.
  Mr. Stanbrook: Nationality issues are rather more complex. We thought when we passed the British Nationality Act 1981 that it was substantive and definitive. I wrote a textbook on the strength of that proposition, but it looks as though I shall have to write a fresh edition fairly soon. As the right hon. Member for South Down (Mr. Powell) said, we have already made alterations to that legislation. It is clear from the British memorandum attached to the draft agreement that the Government are proposing to change the law of British nationality once again by creating a fresh category of citizenship. It apparently will not be British citizenship because the right of abode in the United Kingdom is specifically ruled out, so the people concerned will not become British citizens. Nor will it be British dependent territory citizenship, as that must end in Hong Kong on 30 June 1997 when sovereignty passes. It is inevitable that that species of
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  citizenship should also end. According to the memorandum, they will get what is rather obscurely called "appropriate status".
  It is suggested that that "appropriate status" might be that of British overseas citizens. That status carries few rights and few obligations except those on the United Kingdom Government. Those who now hold it are spread around the world. They already number well over 1 million. They have no right of abode in the United Kingdom and mostly live in independent countries which were formally part of the British Empire. They have retained this status because of faulty legislation of the past, in that it is a claim on future British Governments in regard to their citizenship rights. It is a species of British nationality and perhaps creates a moral obligation.
  It is quite clear that, irrespective of whether "appropriate status", as described in the agreement, turns out to be British overseas citizenship, we will be adding to our existing embarrassment in having large numbers of people around the world who have this form of moral claim on the United Kingdom, and unnecessarily so. According to the official Foreign Office estimate, there are 3 million British dependent territory citizens in Hong Kong who, on 1 July 1997, will get the new citizenship. Their number will be added to the more than 1 million existing British overseas citizens. What rights will those 4 million people have? They will have the right to some kind of travel document or passport issued by the United Kingdom, entitling them to travel round the world under the diplomatic and consular protection of Her Britannic Majesty.
  Mr. Henry Bellingham: What is wrong with that?
  Mr. Stanbrook: There is a great deal wrong with that. They will be hostages to immense trouble and problems arising from the fact that they do not have a proper citizenship, although they have rights against this country. In many cases, those rights eventually terminate with the presence here of such people who then become entitled to full British citizenship.
  Many of us who were on the Standing Committee which considered the British Nationality Bill hoped that such a continuing obligation would end naturally with the absorption of the people in question into the citizenships of the countries in which they live. Apparently, we were wrong. Even worse, we are now adding to the number of people who will be able to travel around the world in that way. In this case, they will have the right to live in Hong Kong, to leave Hong Kong freely and, in theory, to return there with the right of abode there, but in the meantime they will be entitled to draw upon the protection of the United Kingdom Government.
  The 3 million people concerned are mostly of Chinese ethnic origin. We understand from the Chinese memorandum that such people will automatically be entitled to Chinese nationality. A number, however, will not be defined as Chinese compatriots. The official Foreign Office figure for those people is about 6,000. They include people who have been naturalised as citizens of the United Kingdom and Colonies in Hong Kong and people born in Hong Kong. As my hon. Friend the Member for Christchurch (Mr. Adley) said, many of them will be of Indian origin and, I dare say, will have some prospect of settling in India.

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  These people constitute a different group, likely to become "stateless" but having a continuing right to call upon Britain. Many of them have a genuine expectation of assistance from us. According to figures supplied to me by my right hon. and learned Friend the Foreign Secretary, 188 of them were naturalised in Hong Kong. If such people become stateless and do not receive the status of British overseas citizens or British dependent territories citizens, or the "appropriate status", I believe that they should be considered separately from the rest of the 6,000 and that special arrangements should be made for them.
  Provision of that kind is fraught with problems and likely to involve us in considerable difficulties with individual people, but I believe that special provision should be made because when those people became citizens of the United Kingdom and Colonies, albeit in the colony of Hong Kong, they swore allegiance to the Queen and no doubt believed and expected that their British passports made them British, with all the rights entailed by that. In 1997, however, their status will be terminated. I believe that in their case that would be unfair, considering the circumstances and the fact that they will not get Chinese nationality. We should make special provision for them and perhaps give them British citizenship. If we do not do so, we shall be storing up trouble for ourselves and at the same time depriving ourselves of the industry and talent of some very remarkable people who, out of all proportion to their numbers, have helped to make Hong Kong the remarkable place that it is.
  10.9 pm
  Mr. Ken Eastham: I apologise to the House for having been absent when the two Front Bench spokesmen made their speeches. I was attending the Select Committee on Employment. I am sure that the House understands that hon. Members do other things besides attending the Chamber. I have explained that point because I may repeat some of the remarks that have already been made.
  I was privileged to visit Hong Kong a few weeks ago. It is of great benefit for an hon. Member to see a country at first hand rather than seeing documents. I was surprised, even shocked, to see the great dimensions of success, drive and energy that Hong Kong is enjoying. There is obviously a spirit of co-operation, and I am glad to say that it prevails between the Government and the people as well. I pay special tribute to the Civil Service, which seems a most excellent and competent body.
  Before I went to Hong Kong, the Green Paper making recommendations on the proposals for electoral reform had been issued. When I arrived, being accustomed to the democratic system in the United Kingdom, I thought that there would be great enthusiasm, and people would be pressing on the doors, demanding to have the recommendations implemented immediately. I was surprised to learn that many people in Hong Kong were satisfied and were taking their time to say what they wanted. There seemed to prevail among them the wish that there be a process of gradual change. I must confess that when I spoke to one or two of the Hong Kong people I felt rather impatient, but this was probably because of the traditions of the United Kingdom. I felt wiser after I had returned, and understood some of the traditions of the Chinese people. I still believe in the democratic system
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  and in elected bodies. In 1997, we should leave the people of Hong Kong with a system of which they will approve and be proud.
  Registration is important. In the past the number of people who registered was extremely low, but there was a genuine attempt by the civil servants to encourage Hong Kong citizens to take up registration so that they could participate in the coming elections. I am sure that all hon. Members who have been to Hong Kong and had meetings with various sectors in the community would still nail their colours to the mast and say that they believe in free speech, the freedom of religion and of travel, the right to strike and to organise. There should be a balanced and a caring society from that basis.
  When I was in Hong Kong, the assessment office had just been opened, and the following week it went into operation. My hon. Friend the Member for Walthamstow (Mr. Deakins) was there with me, and we closely questioned officers and asked how they would approach this problem. Both sides agreed that it would be rather difficult. There was a genuine attempt to get some true cross-section assessment as to what people felt. I was delighted to note that nearly three million copies of the White Paper had been printed and circulated. To distribute nearly three million copies of the White Paper to a population slightly larger than 5·3 million was no mean achievement. I should say that it was an honest endeavour to consult the people. I hope sincerely that there were no citizens who did not respond because of fear. I am sure that the assessment officers were anxious to ensure that their deliberations were fully representative. It seems that there was general approval. It seems also that a most excellent job was done. One recognises that there will always be qualifications, and some were included in the assessment summary. However, I feel confident that the agreement has the support of the Hong Kong people.
  It pleases me to think that people in the United Kingdom are genuinely interested in the people of Hong Kong. I received a letter only the other day from the Greater Manchester county ecumenical council. The council addressed itself to Hong Kong and I took it as a sign that British people are genuinely interested in the important future of the people of Hong Kong. The council's letter is a fairly representative document. It includes the views of church leaders and representatives of the Anglican, Roman Catholic and free church of the area.
  One paragraph states:
  "people from Hong Kong who were once British subjects have been progressively stripped of a meaningful nationality and the rights that go with it, to be left after the recent British Nationality Act with a second-class British dependent territories citizenship."
  The letter continues:
  "The British Government should recognise its responsibilities towards the Vietnamese refugees in closed camps in Hong Kong."
  I agree with those sentiments. I took the trouble to see for myself some of the conditions of the unfortunate Vietnamese refugees. I do not believe that the refugees are solely the responsibility of the British Government, and they are certainly not the responsibility of the Hong Kong Government. Unfortunately, we all seem to be casualties of the Vietnamese war. The warring factions withdrew and left the problem of the refugees to others. The refugees are floating around, landing in different countries and creating a serious problem. They should not receive inhuman

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  treatment, but I wish that other countries, especially the United States, would take a greater part in facing some of the problems that have confronted the Hong Kong people as a result of the war.
  The council's letter observes that:
  "Hong Kong residents…will not become Chinese citizens on the eversion of the Colony to the People's Republic (i.e. those not born on Chinese/Hong Kong territory and without Chinese ancestry)."
  There will be serious problems for those people and they should receive sympathetic consideration.
  Furthermore, everybody appears to believe that it is a good agreement. I congratulate the Governor, who was very closely involved over many weeks and meetings in negotiating the deal. We must now encourage the people of Hong Kong to feel confident. Nevertheless, we have to recognise that the citizens of Hong Kong will always have reservations about the agreement, because 2·7 million of the inhabitants are refugees from the mainland on account of the tortuous period of the Chinese cultural revolution. It has led to a certain element of fear and distrust among those people. Therefore I hope that these 2·7 million citizens out of the 5·3 million citizens of Hong Kong will feel confident that the agreement includes them, that there will be no reprisals and that together with the remainder of the people of Hong Kong they will be able to look forward with confidence to the future.
  Turning to industry, it is believed by many people that the industries of Hong Kong are based upon textiles and clothing. That is not the case. Hong Kong has made great strides in electronics. There may, therefore, be problems unless something is done about this problem. The United States, for example, has introduced an embargo upon electronics. Unless that kind of problem is resolved it will be very damaging to the electronics industry in Hong Kong. One has to stand still only for six months or for 12
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  months in the electronics industry and the company dies. The technology is changing all the time. Therefore, this aspect needs to be carefully considered.
  When I left Hong Kong I made one comment about the proposed agreement. It may not meet with the approval of everybody. However, I believe that the agreement should be endorsed by the United Nations. I do not mean to insult the Chinese Government or the British Government. However, this will be an international agreement. Therefore I believe that the United Nations ought to be involved.
  Whatever agreements are signed and whatever may happen in 1997, other fundamentally important matters will have to be considered. The most important of these is lasting friendship between the United Kingdom and the people of Hong Kong. We have fostered very good relationships for many years. There is no reason why we should not look forward confidently to good business relationships after 1997. We should not adopt the attitude that after 1997 the curtain will be rung down. There is no reason why arrangements should not be made through the Chinese Government for a conference to be held every year or every two years after 1997 in order to discuss issues which are of mutual interest to the people of Hong Kong. Nor is there any reason why specialist teams should not take an interest in Hong Kong and why the tourist industry should not continue. There is no reason why we cannot carry on promoting trade between Hong Kong and Britain. With those remarks I would like to extend the very best wishes to the people of Hong Kong.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Paul Dean): Order. It might help the House to know that the wind-up speeches are expected to begin at about 11.10 pm. Five or six hon. Members have sat here for a long time hoping to speak. If hon. Members could restrict themselves to 10 minutes or less, it should be possible to allow every hon. Member to speak.
  10.24 pm
  Mr. Henry Bellingham: I am pleased to follow the thought-provoking speech of the hon. Member for Manchester, Blackley (Mr. Eastham), although I do not agree with every word that he said.
  Last week I attended several constituency functions, both political and otherwise. Many points were raised on subjects such as student grants, the deduction of £1 from heating additions and sugar beet quotas, but Hong Kong was not mentioned. Had Norfolk farmers put Hong Kong before sugar beet quotas, something fairly dramatic would have had to have happened. It is a compliment to my right hon. and learned Friend the Foreign Secretary that it was not mentioned; because it shows that he has got it right.
  I join many right hon. and hon. Friends who congratulated both my right hon. and learned Friend the Foreign Secretary, my hon. Friend the Member for Shoreham (Mr. Luce), those people on the negotiating team from both sides and those many people from Hong Kong who were closely involved in the crucial negotiations. We have learnt today that they were painstaking, at many times frustrating and disheartening, but ultimately rewarding. They can certainly be proud of their achievement.
  When UMELCO came here in May they issued a statement that laid down full criteria by which the acceptability of a Sino-British agreement to the Hong Kong people would be judged. I am sure that they would agree that those criteria have been met virtually in full. They have been met in a way that many people would not have dreamt possible three or four months ago.
  When that statement was issued, it was as though UMELCO were saying that that was what they hoped would be achieved but that they had grave doubts. That was very much the mood three or four months ago. Things have changed a great deal and in their debate they made a strong recommendation to the people of Hong Kong to accept the draft agreement.
  What about the people of Hong Kong themselves? There has been great mention of that today. The report of the assessment office covers not only the organisations and pressure groups but several important opinion polls and surveys. They will have got through to many ordinary people, and, again, the result was fairly overwhelming. In the most important opinion poll 71 per cent. said that the agreement was quite good and 14 per cent. said that it was good in some way.
  There can be little surprise that, with such an overwhelming feeling of general acceptance, some basic anxieties come to the surface and will continue to do so in the months ahead. We have heard about the fear of conscription into the PLA. Will my hon. Friend the Minister look carefully at the suggestion made by one or two members of UMELCO about the volunteers being expanded and a regular battalion being attached to the existing territorial battalion. Perhaps they could take on a role that even the Chinese would accept and approve of. Will my hon. Friend look carefully at that?
  At the same time, will he consider the future role of the Gurkhas? We are now entering a new era of relations with the People's Republic of China. I see no reason why, after 1997, we could not have the Gurkhas stationed in Hong Kong. We have troops stationed in the countries of many
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  allies. I hope that will be considered carefully in the months ahead and that some definite arrangement will be arrived at with the Chinese.
  There are bound to be anxieties about the development of representative government. There may be great pressure internationally but also in the House for direct elections. I would be one of those hon. Members who would urge caution on that point. The Hong Kong Government's White Paper strikes a balance. I agree with the hon. Member for Warley, East (Mr. Faulds) that at the moment there is no obvious demand in Hong Kong for direct elections. We must proceed with caution. Of course, we want direct elections eventually. I should like to see them everywhere in the world. But in this case we must be realistic and proceed with caution.
  The nationality problem causes anxiety. That thorny subject is mentioned in the memorandum attached to the agreement, which shows what a difficult problem it is. We shall discuss that subject when we consider legislation in the near future. That is the time to go into more detail. I voice my concern about the 6,000 British dependent territories citizens who are of neither Chinese nor British origin. After 1997 their children could become stateless. My right hon. and learned Friend referred to that, but it still causes anxiety.
  I take exception to some of the remarks by the right hon. Member for South Down (Mr. Powell) and by my hon. Friend the Member for Orpington (Mr. Stanbrook). We are being shortsighted about the Hong Kong Chinese and the possibility of them coming here. The people have no great desire to come here, but it would be a safety net if they knew that we would be liberal in our interpretation of discretion under the 1981 Act. If 10,000, 20,000 or 30,000 Hong Kong Chinese came to Britain we would be fortunate. It would be an occasion for rejoicing rather than for throwing up our hands in horror.
  The next 12 years will be crucial. If stability and prosperity are maintained, there is every chance that they will be guaranteed thereafter. However, we must have a determined and strong commitment from the Government. The transition must be smooth so that 1997 does not represent a sudden break with the past, but a continuation of the gradual process of evolution. I like the idea voiced by the right hon. Member for Leeds, East (Mr. Healey) of an annual report to the House. We must be kept in touch.
  Confidence is of the utmost importance. Hong Kong's prosperity and stability depend on highly volatile financial and business markets. If confidence is eroded the markets could collapse. That has been said by many today, including my right hon. Friend the Member for Blackpool, South (Sir P. Blaker).
  We have heard about Peking's great modernisation programme and how it is trying to quadruple its industrial and agricultural output by the year 2000. That will depend upon the maintenance of political stability in China and upon the development of the offshore oil reserves. Above all, it will depend upon the continuing prosperity of Hong Kong. That is why China has such a vested interest in maintaining the status quo in Hong Kong.
  There will be great investment opportunities for British firms in China. Indeed, C. Y. Cheng, the economics professor at Indiana state university, estimated that to reach its goal China will have to spend $1 trillion. That is a huge sum and there will be rich pickings for British firms. They must not assume that because we are

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  embarking on a new era of relations with China that orders will fall into their laps. They will have to go out there and capture the orders.
  When I was in Shanghai recently it was impressed upon me that we are not being aggressive or competitive, and that we were not cutting the bureaucratic barriers like the Italians, French, Germans and Japanese. We have a long way to go.
  The uncertainty is over. The Hong Kong people can face the future knowing where they are going, with growing confidence. I praise the Secretary of State for the work that he has done, but we are a long way from a diplomatic triumph.
  Many Chinese people believe that it is a great tragedy that the British administration is coming to an end. Many are critical of the way in which we embarked upon the negotiations and raised so publicly the question of the treaty and convention. That meant that the Chinese had political face to save. Many are critical of the appalling human rights record in China.
  Now is not the time to look back. Now is the time to be positive, because the Hong Kong people are realistic. Before we leap for joy we must remember, as the right hon. Member for Leeds, East said, that we are dealing with a post-dated cheque. We can be optimistic when we know that that cheque will be honoured. The future holds much potential, but it is also full of risks. If all three parties play a constructive part in minimising those risks, the future will have a great deal to hold for the people of Hong Kong.
  10.35 pm
  Mr. Paddy Ashdown: It is a pleasure to follow the hon. Member for Norfolk, North-West (Mr. Bellingham). I agreed with some of his comments, particularly about British dependent territories citizen passport holders and citizenship.
  I think it was Henrik Ibsen who had someone say in the play "An Enemy of the People" that in a democracy the minority is always right. From time to time that statement gives some comfort to the alliance. I may take comfort from it tonight, because I fear that I will introduce a jarring note into what has otherwise been a gentle and well-modulated debate.
  I shall start on the easy side by joining other hon. Members in congratulating the Government on the general tenor of this agreement. There is a Chinese statement which, for the benefit of the World Service, goes, "tien xia de shih wu mei you shih chien shih mei de." I am sure that all the hon. Members who are present in the Chamber know precisely what that means but, for the benefit of those who will read those words in Hansard in the morning, it means, "There is nothing under heaven which is completely perfect". That is true about this agreement. It is, nevertheless, as near perfect as the Government could have got in the circumstances. The British Government are to be congratulated on that, as are the Chinese Government.
  Such reservations as I have are not related to the Government, but rather to the way in which the House has handled the issue. A very old and wise Member said to me before I became a Member of Parliament, "The moment when you must be most suspicious is when there is common agreement on all sides of the House of
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  Commons". Both this debate and the previous Hong Kong debate have been characterised by a tenor of common agreement on both sides. I am deeply suspicious about that. There are good reasons why the previous Hong Kong debate had to be carefully conducted and why we had to be statesmanlike. At that stage, the agreement had not been drawn up. On this occasion, it has.
  I have not been in the Chamber for the entire debate, but I have discussed it with my colleagues. I apologise for the fact that I have not been present, but I had to be away for an hour or so. There has not been, in the tenor of the argument from both sides of the House, the real and genuine fear—I go further and say "anger"—which I noted in Hong Kong and which I found on discussing the matter with my Hong Kong friends and colleagues, felt about what the British Government have done and are doing in terms of the future and citizenship of the people of Hong Kong. Those who study the White Paper with a careful eye will see signs of that feeling. The Hong Kong people were asked to assess whether an agreement should be accepted. The only alternative was an agreement imposed unilaterally by the Chinese. It was an agreement based on whether the people would like it or lump it. It is not surprising to know that the population of Hong Kong has chosen essentially to like it.
  Some aspects of the assessment should concern us. As the right hon. Member for Leeds, East (Mr. Healey) said, one third of the individuals who commented on the agreement said they were against the agreement and criticised it. Furthermore, nearly half of the organisations that put in statements on the agreement chose to remain anonymous. That is remarkable, in view of the general climate in which the assessment was conducted.
  On page 80 of the White Paper, the monitors said, rightly, that the comments were made by people who were traditionally reserved in political matters. We must not expect from a population that has been anaesthetised from politics—largely at our request—for so long the type of fairly pungent comment that is heard in the House of Commons. There is concern about what is happening to the people of Hong Kong. I am depressed by and worried about the fact that that worry has not been expressed with the force that I observed in Hong Kong, which I believe characterises the views of many Hong Kong people. It is right to say that many in Hong Kong are angry about what is going on. Many are concerned, and some feel betrayed. Those words crop up in the assessment.
  It may be that some hon. Members do not like the word "betrayal". Some may feel that it is inappropriate. I believe that it is inappropriate. But it is as well that we should recognise what people feel. It is as well that we should recognise that there needs to be a voice in this House which is capable of expressing their anger. I believe that the tenor of the debate will not be understood by many of those who hoped that their fears, their concerns and their sense of betrayal would be reflected here, albeit in terms of challenging the Government. I do not criticise the Government. I criticise in a sense the way that we in this House have reacted to our responsibility to express the views of the people of Hong Kong in a forthright fashion.
  The hon. Member for Wrexham (Dr. Marek), who is not here, said that the Hong Kong agreement is the greatest issue in the Queen's Speech. I suggest that it may well be the greatest issue that this House has dealt with in the past 20 or 30 years. We are handing over the future and the rights of 5 million people to a Government from whom

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  many of them have fled. They all remain deeply concerned about the future. We have never done such a thing before. We have never been faced with such a sense of concern. [Interruption.] The right hon. Member for Western Isles (Mr. Stewart) says that we had no option, but it is right that this House, carrying that responsibility and duty on its shoulders, should express the views of those people clearly and forthrightly.
  Mr. Nicholas Winterton: Like the hon. Member for Yeovil (Mr. Ashdown), I have not been able to be here throughout the debate, but I believe that he is doing a great service to the House in reflecting the views of the vast majority of the people of Hong Kong who, because they are not part of the moneyed class, the moneyed mandarins, will not be able to leave Hong Kong. It is up to Back Benchers such as ourselves to reflect the views of those who cannot leave, and whose views have not been adequately monitored in the lead-up to the draft agreement. Does the hon. Gentleman agree that those who are at the grass roots in Hong Kong are deeply concerned about the agreement?
  Mr. Ashdown: I confirm that that is my view, at all events. Those people believe that there is a moral duty on the British Government that has not been adequately fulfilled.
  I recognise the imperatives under which the Government have had to operate, but I believe that we in this House have allowed our Government too easily to slough off that moral responsibility, without sufficient question.
  We all understand that we are not now in a position to alter the agreement, or the nature of it. But this debate can start the process of setting the agenda for what will happen in the next 13 years. That is the significance of the debate. It is in that spirit that I agree with the right hon. Member for Leeds, East , who said that we should review the matter on a year-by-year basis. The House might choose not to debate the issue, but reports should be produced on how we fulfil our duties and responsibilities towards the people of Hong Kong. The House should have the right to debate the issue annually.
  The area in which the anger, concern and sense of betrayal of the people of Hong Kong is most significantly expressed is that of citizenship. There are those who are holders of British dependent territories citizens' passports and who, in good conscience in Hong Kong, and with a deep sense of duty, actually took an oath of loyalty to the Queen. They find that no sense of reciprocal duty has been shown by the British Government. They are concerned about that.
  The right hon. Member for Leeds, East introduced a significant, interesting, imaginative and daring concept when he talked about setting up an "Operation Haven". It may be too tall an order, but we should at least try to do something along those lines. If we could put such a scheme into operation, its very existence might act as a back pressure on the Chinese Government to operate strictly in terms of the agreement.
  The Government of the People's Republic of China have operated an open door policy. They have committed themselves to open doors for Hong Kong for the next 50 years. But an open door is of use only when, having stepped through the door, one has somewhere to go. They have honoured their side of the open door policy. That
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  must be in the best interests of the future of Hong Kong. There is a duty on us to see what, if anything, can be done at least to investigate the possibility of ensuring that something happens on the other side of that open door. If that can be done, it will give considerable reassurance in terms of confidence building over the next 10 to 15 years.
  The importance of Hong Kong to the future of the south-east Asian Pacific basin is now absolutely vital. Whether the free capitalist economies which now exist in some of those countries survive as the norm will, at least in some measure, depend on the survival of Hong Kong as a free institution under the terms of this agreement. That is important, because many nations—ourselves included — wish to see this emergent and powerful industrial force develop in line with our way of life, our freedoms and our industrial and economic system. I suggest that a certain international status is attached to Hong Kong. It is important that it be allowed to develop as a free institution because it will encourage that kind of institution elsewhere in this important area.
  It would be appropriate for the British Government now to go along to their friends—NATO was mentioned—who are also interested in the survival of that kind of institution in that area, to see whether something can be pinned together to bring "Operation Haven" into reality. Perhaps that cannot be done, but we should at least try.
  If at the very least, we can provide some international substance for the Hong Kong travel document post-1997, which assures freedom of movement if not right of settlement, that will be a recognition of the importance of Hong Kong's future trading capacity and the free institutions in the colony.
  I very much hope that the Government will accept the moral duties that now rest upon them. I hope that they will use this period to see whether we can give some substance to concepts such as "Operation Haven" and to the document under which the Hong Kong people will live.
  I was concerned and disappointed to hear the Foreign Secretary say that only officials in the Hong Kong Government would sit on the joint liaison group. The case that he made did not convince me, nor will it convince the people of Hong Kong. There is no reason whatever why membership of that group should be confined to members of the Hong Kong Government. However, if that must be, it should not be confined to expatriate members of the Hong Kong Government. It should at least encompass ethnic Hong Kong-Chinese members of that Government who have a commitment to the colony because they have lived there all their lives.
  If the free democratic institutions of Hong Kong develop along the lines that the Government wish and we get directly elected representatives, are the Government saying that even in that instance those who represent the people of Hong Kong on the joint liaison group will still be the bureaucrats? It would be outrageous if those who were elected under such institutions were not allowed to serve on the joint liaison group. I hope that the Minister will clarify that point.
  In conclusion, this is the greatest issue in human terms that the House has faced for a long time. A moral duty rests upon us. Many hon. Members believe that we should make every effort to honour that moral duty and ensure that the opinions and concerns of the people of Hong Kong are more adequately expressed in the House than they have been during the debate.
  10.49 pm
  Mr. Andrew Rowe: I also had the good fortune this summer to be the guest of Hong Kong. I, like many of my colleagues, returned impressed by the energy, inventiveness, creativity and social sophistication of the colony. Few British people who had to live in the sort of houses in which the squatters have had to live for up to 10 years, would ever have achieved the degree of meekness and homeliness which they have achieved under those astonishing conditions.
  I was struck, in my ignorance, by how remote Hong Kong has felt from us, despite our presence there. That has inspired a range of myths and legends. One might have expected a land of sweat shops instead of intensely sophisticated manufacturing units, the conditions of many of which are better than in many places in the world and, indeed, better than in some of our cities. The remoteness is a two-edged weapon. It has enabled Hong Kong to escape some British diseases, such as over-regulation, over-taxation, over-unionisation and, therefore, overpricing. However, it has also led to a realisation that it is not at the forefront of British thinking.
  We owe a great debt especially to UMELCO. While we were in Hong Kong and during the visit of its members here, they gave us a model of what a good briefing should be. I pay tribute to S. Y. Chung and his team for a remarkable educational exercise.
  I am distressed by the tenor of much of tonight's debate. The line between realism and pessimism is often too narrow. I have an edgy feeling that tonight we may be seeing the beginnings of a diminishing interest and our gradual move away from involvement. That may have been an inevitable part of disengaging ourselves from other parts of the former British Empire. If my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) is right that Hong Kong may have difficulty in entering the next stage of its economic development in competition with the rest of south-east Asia, our commitment will become more valuable and not a glad excuse to distance ourselves because in 12 years' time we shall no longer have direct responsibility.
  Hong Kong has a great deal to teach us. I was impressed, as was my wife, who is a specialist in these matters, to see the enormous skill with which it runs an integrated service for the handicapped. We were impressed by the way in which it runs a successful national preventive health campaign, which has many models for us.
  It is indispensable to the future prosperity of the United Kingdom that we learn and create the mechanisms for sharing in Hong Kong's sophistication to understand China. It is entirely within the Government's power to accelerate and encourage the formation of joint endeavours with Hong Kong in that most important area — for example, British universities should be much more closely linked with the universities of Hong Kong. There it is possible to study the changing moods and understandings of China more easily than we can here.
  I shall concentrate on one detail, which would seem to me to be of enormous importance, in the report of the Assessment Office. It was reported that there were anxieties about the accreditation of Hong Kong's academic courses and degrees. It is vital that a mechanism —I cannot say whether it should be the one suggested, of an independent council—should be provided whereby
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  Hong Kong is assured of its ability to accredit its courses and to authorise its diplomas and degrees in a way that will make international recognition instantly possible.
  Anyone who has taught in a university knows perfectly well that it is one thing to have a paper accreditation and another actually to see the students as they come to do post-graduate work, or whatever. Another way of ensuring that the standards are up to international standards—as they certainly are in the case of some of the courses put on in Hong Kong—is to make sure that we have much more common work together.
  Britain is in a peculiarly privileged position to assist in the development of Hong Kong, and vice versa. If we or the Government can do anything to encourage, for example, the great British companies in Hong Kong—which seem to use their London offices much less than they might do to inform people about Hong Kong—to put their corporate weight behind helping fledgling British companies to make their mark in Hong Kong, and eventually in China, we shall have made a remarkable contribution.
  Ultimately, it is not just an economic but a philosophical and political question. If Hong Kong's economy falters, it may become less attractive to China. If China's politics go wrong, Hong Kong will be in very serious danger and trouble. It is absolutely essential that, whatever we say about economics, we should remember that for 100 years Hong Kong has been our responsibility and, if the going gets tough because politics go wrong in China, to the greatest possible extent that we can contribute on the international stage to improving relations between Hong Kong and China, it will be our duty to do so.
  10.57 pm
  Mr. Ron Lewis: I shall certainly take your advice, Mr. Deputy Speaker, and at this late hour my contribution to the debate will be very brief.
  My interest in Hong Kong is that of an ordinary Back Bencher who has been following the fortunes or misfortunes of a colony known as Hong Kong, which at present comes under the British flag. When we were advised that the Foreign Secretary was setting off to meet the Chinese to seek an agreement over the future of Hong Kong, most of us—regardless of party—had certain doubts and misgivings as to whether our British Foreign Secretary and Government would not go to Hong Kong and have to acquiesce in everything that the Chinese had to say. But that has not been the case. If hon. Members are honest with themselves, they will all agree that the Foreign Secretary and his team came away from those talks with a far better agreement and understanding than any of us had envisaged.
  One thing about the debate has been the great unanimity on the part of hon. Members. However, the exception was the hon. Member for Yeovil (Mr. Ashdown), who has just left the Chamber. But I felt aggrieved when, long before any agreement had been reached, and almost before any meeting had begun, I read that Jardine Matheson was pulling out of Hong Kong. I believe that that move gave a very bad impression to other businesses concerned, and I hope that, even at this late stage, Jardine Matheson may have second thoughts and perhaps agree to retain an office in Hong Kong.
  I have listened upstairs this week to the views of the members of the official delegation who are in this country

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  on their mission. They were speaking and lobbying Members of Parliament. I formed the impression that even the majority of those who are here on an official visit find the agreement acceptable. although of course they would have liked it to go much further.
  Yesterday, I also met an ordinary citizen from Hong Kong. I had quite a discussion with him. He posed a number of questions, of which I shall mention only two. First, he asked me what is likely to happen in the event of a change of Government in Hong Kong. None of us knows the answer to that, but I believe honestly that, whatever Government may hold power, Peking will honour the agreement arrived at with the British Government. I told that ordinary citizen that such was my belief and my faith.
  The second question was a very important one—at least to me and to that ordinary citizen of Hong Kong, who is a deeply committed and very evangelical Christian. He asked me whether we can be assured that people in Hong Kong will have religious freedom, without any interference from the State.
  I believe that many good Christian people, and many people who do not belong to any basic Christian faith, are wondering what is likely to happen after the Chinese takeover in 1997. I could say only that I believe that we must have a basic trust that the undertaking given will be fulfilled whatever happens.
  I hope that my plea, uttered in this British Parliament, will echo not only through Hong Kong but throughout China. After 1997 I want to see complete religious freedom in Hong Kong, with no interference from the State whatsoever. I believe that that should be one of the main objectives of the joint liaison committee. In its meetings over the next few years, the committee should try to move further along that road.
  I undertook to raise those points in the debate, and I have done so. It remains only for me to say to the Hong Kong people in general, in the words of the old hymn with which, as a Methodist preacher, I am very familiar:
  "Ye fearful saints fresh courage take, The clouds ye so much dread Are big with mercy, and shall break In blessings on your head."
  11.4 pm
  Mr. David Heathcoat-Amory: I have only five minutes so I shall put only a few thoughts on the record. First, I repeat the congratulations that have been given to my right hon. and learned Friend and his officials. The Foreign and Commonwealth Office has taken its share of the blame for Britain's economic ills during the past 20 years, so let us recognise a success when we have one.
  The agreement shows that differing political systems can be brought together in agreement when mutual interests can be identified. I strongly hope that the same mixture of firmness and patience, which my right hon. and learned Friend specialises in, can be brought to bear in the search for an agreement with Argentina over the Falklands and with the Soviet Union over arms control. I am glad that that skill has already yielded results in Gibraltar.
  All the democratic institutions in the world will not save Hong Kong unless we preserve its economic prosperity and success. I should like to reinforce what the hon. Member for Walthamstow (Mr. Deakins) said about the future of Hong Kong's trading rights and quota allocations. I hope that Opposition Members were listening to him because some have little right to speak for
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  Hong Kong when their protectionist policies for the United Kingdom would spell disaster for the employment prospects and prosperity of Hong Kong. I hope that when the protectionist tendency in the Labour party next raises its head it will remember this debate.
  The People's Republic of China knows quite well that a Socialist Hong Kong is of no use to it. It is interesting that the agreement states not that Hong Kong may retain its capitalist lifestyle for the next 50 years but that it will do so. If some oriental Labour party were to take root in Hong Kong, it would find that its decrees were null and void if they conflicted with the basic law. It is fascinating that the world's largest Communist power is guaranteeing for 50 years the success of a capitalist offshoot.
  How else is Hong Kong to be protected? How else is this delicate and vulnerable system to be preserved? Surely it is by building up Hong Kong's political confidence and ability. There will be many difficult times between now and 1997 and beyond. There will be ups and downs and moments of despair and gloom as well as of euphoria. That is the nature of any society that is founded on risk. As the moment of British withdrawal grows nearer, that security must be replaced by a home grown set of political institutions capable of taking the strain.
  Right hon. and hon. Members have commented on the White Paper on representative government. I do not like the functional constituencies. I do not think that people should be represented according to whether or not they belong to some producer interest group. But the most important thing is not what form of election Hong Kong goes for but how the elected men and women are to control their Government. How are they to scrutinise the workings of the Civil Service and the Executive? Will there be a ministerial system? Is it right that officials should sit on those representative bodies? Not all of those decisions can be made now, or even soon, but time is short. We have only 12 years and the direction of the constitutional changes must be embarked on soon because Hong Kong cannot afford any mistakes. Other societies can afford one or two false starts, but not Hong Kong. Whatever system is chosen, it is vital that it should be supported by those twin pillars of democracy, a free press and the rule of law administered independently. Both now exist in Hong Kong and both are rare commodities in the world. Their preservation will be the real test of the agreement and of the sincerity of the People's Republic.
  Personally, I am an optimist. I believe that developments in China towards greater personal and financial freedom are irreversible. There will, of course, be difficulties. China has problems, with its immense population pressures, rising expectations and a society and country far more diverse than we realise. Nevertheless, I believe that it is through its revolutionary stage and embarking on a long period of development, and it is important that this country should play a part in that economic development. There are 1 billion people in China, all with massive unfilled wants. I urge British business men to look to China rather than to the saturated markets of Europe for orders in the 1990s. China is not an easy market. It is not an easy country. Business men will have to get to know the provinces as well as Peking. They will have to invest both time and money. But if the future of the world is to revolve around the axis stretching from the United States to Japan and China, it is vital that this country plays a part.

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  I believe that the real achievement of this remarkable agreement will be if our extraordinary but fruitful relationship with Hong Kong can be translated into an equally exciting and peaceful relationship with the largest and most populous country in the world on the mainland.
  11.11 pm
  Mr. George Robertson: This is a late hour in the House, but it is just dawn in Hong Kong. We understand that the debate is being taken live by the media there and that large numbers of people will have been listening through the night to our deliberations in the past five or six hours. Those who have listened here and elsewhere will recognise that it has been a wide-ranging and informed debate on a subject that the whole House has treated with appropriate seriousness. I still regret that the Government felt unable to allow two days for the debate. Despite the 10-minute rule, which ensured a reasonable number of contributions today, other Members on both sides who wished to express their views were no doubt deterred by the limited chance of being able to do so.
  The gravity of the subject for the people of Hong Kong has been well recognised in the House, and very few of the fears, apprehensions and potentials have been left unexplored. That is right because, as has been stressed so many times today, this is an historic occasion for the House and for the people of Hong Kong. There are few examples in the world of such an amicable and equable transfer of sovereignty as this change will mean. For this nation, it is unique in that sovereignty is being passed not to an indigenous population but to another nation. Those facts emphasise the uniqueness both of Hong Kong's status since 1897 and of the new status promised from 1997. That status has been the root of Hong Kong's economic success so far and in it lies the basis for a future success based, as many hon. Members have said today, on the entry point to the massive Chinese market.
  Some have characterised the debate as having a foregone conclusion. The hon. Member for Yeovil (Mr. Ashdown) admitted that he introduced a jarring note into what has been a fairly unanimous debate. There was a weakness in his argument, however, in that he did not say how he would have achieved a better agreement or indeed what kind of better agreement could possibly have allayed the accusations of betrayal that inevitably come when such a traumatic change takes place.
  Mr. Ashdown: I was rather careful to say that I think that the Government have done a good job. I was criticising the House and not the Government for not having a Member to express those fears in the way that they should have been expressed.
  Mr. Robertson: The hon. Gentleman was frank enough to admit that he had not been here for the whole of the debate, but he underestimates many of the fears that have been expressed, both in the assessment report and by right hon. and hon. Members in this debate.
  Those who have said that the debate is a foregone conclusion are right in fact, even if they are misguided in tone, because the foregone conclusion was already there, as with the year 1997. As that year was predetermined, most of what has followed from it can be said to have been predetermined as well. However, the draft agreement whose terms we are being asked to endorse tonight was
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  never a foregone conclusion, and nor were the details in it, which will provide a protective framework for Hong Kong society to continue virtually unchanged for at least 62 years.
  As in all good negotiations—I speak as one who was a negotiator for more than nine years—the ground was prepared in advance for the likely outcome. However, few would have dared to make a prediction about the likely final package, however sceptical or optimistic one started out. The official Opposition have already commended the success of the negotiators, especially the professionals in the team, in achieving this agreement, and have deliberately, both in the negotiations and the subsequent reception of the results, sought to make no political capital out of a highly sensitive subject. It is as well to underline the point made by the hon. Member for Wells (Mr. Heathcoat-Amory) that, if the same realism was shown in other negotiations on other subjects, many hon. Members would be happier about foreign policy.
  Given the provocation of the Government in almost every other subject, the generosity in this one will be difficult to achieve again. However, we believe that to attack, undermine or harass the Government at times of such delicacy and confidentiality would have impeded progress and would have brought benefits only at the expense of the interests of the people of Hong Kong. Therefore, we are happy to do what right hon. and hon. Members have done today and commend the amount of detail in the agreement, the reassurance it provides on central issues such as freedom before the law, and for the signal that it more than anything represents—that the People's Republic of China is determined to maintain the uniqueness of Hong Kong and to protect the prosperity that has provided such benefits to the People's Republic.
  There is a gamble associated with living as a populated merchant bank for a Communist state, but it will be no more of a gamble for those who have already lived in the immediate shadow of the cultural revolution, which scythed its way through China but left vulnerable, invadeable and easily established Hong Kong unscathed and unaffected.
  Therefore, it is difficult to accept that China would have entered into such a visible, verifiable, legally binding agreement if it had no intention to abide by it. The valuable and cherished international reputation of China, its respectability in the eyes of traders and competitors and even superpower equals is on the line. The Chinese Government know it, we know it, and the commitments have been given with their eyes fully open.
  A framework now exists, and it is in high international profile, for Hong Kong's future for at least 62 years. That is longer than most of us have any such detailed framwork to work within. Faith will perhaps be needed to make it work, but also realism and a common continuing concern for shared interests and perceptions. Shared interests, or the lack of them, dominate relations throughout the world and the position of the people of Hong Kong will be little different from that of the rest of us over the next few decades.
  Much has been mde of the suggestion that has come from Hong Kong, first from Miss Lydia Dunn, and then endorsed by the rest of her colleagues in UMELCO, about the possibility of a continuing interest in Parliament and in the United Kingdom generally on progress within Hong Kong. Many of the detailed matters that have been raised in the debate, by the UMELCO submissions and, most

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  importantly, by the valuable report of the assessment office could not be raised fully in a debate such as this. They cannot even be debated while we discuss the legislation that will be introduced in the new year. They can be dealt with only over the years as events unfold.
  The joint liaison group conducts its work and many of the issues which have been raised will be on its agenda. Now that the sensitive negotiations are over and the agreement has been made—it will probably be endorsed tonight—with the consent of the Hong Kong people, there is little need for secrecy and undue confidentiality. It has been said in the House and elsewhere that we have a duty to ensure that progress towards 1997 is open and accountable. That is why the idea of an annual report from the joint liaison group through the Government to Parliament and the possibility of a debate in the House on it are the minimum offers that we can make. Regular monitoring by the Select Committee on Foreign Affairs is also a means of open administration that we should be willing to put forward.
  Progress towards more representative institutions is the clumsy title which the Government of Hong Kong have used to describe a movement towards more democratic institutions. The creation of democratic institutions in Hong Kong has been resisted over the years, partly and mainly because the very suggestion of independence or self-determination has been enough to set alarm bells ringing in Beijing, which have caused experiments to be kept to a minimum. That reason for caution has gone. With sovereignty acceded, with the agreement in existence and with China's declaration that the next 12 years are Britain's responsibility alone, that major inhibition has fallen. Perhaps the overriding objection has also gone.
  It was interesting to hear earlier this evening from the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who I regret is not in his place for the Front Bench replies. The right hon. Gentleman made a remarkable contribution, as we have come to expect from him over the past few weeks. I have usually enjoyed them. The discomfiture of those on the Government Front Bench has warmed the hearts of most of my right hon. and hon. Friends. However, I did not derive much comfort from the right hon. Gentleman this evening. He sought to advance a number of arguments that will not offer great comfort to many in Hong Kong. He suggested that a lack of democracy in Hong Kong was something we should regret and be ashamed of. He said that the arguments advanced for the proposed system have come from those in appointed places who want to enjoy keeping them.
  The right hon. Member for Old Bexley and Sidcup is not a humble Back Bencher. He is not in my position of being a relatively junior Member of the House who has enjoyed only a fragment of a moment of his party being in power. The right hon. Gentleman was Prime Minister from 1970 to 1974 and I would wager a considerable sum that the governor of Hong Kong during his period of office appointed many people. I would wager also that some of those who are in London this week representing UMELCO — nominated members of the Legislative Executive Council — were probably appointed under the Government who were headed by the right hon. Gentleman. It ill becomes him to start preaching democratic reforms at this stage in Hong Kong's development when he had it considerably in his power to do something substantial, constructive and fundamental to strengthen democracy in Hong Kong.
  Mr. Nicholas Winterton: Will the hon. Gentleman give way on that point?
  Mr. Robertson: No, I shall not give way.
  Sir Paul Bryan: Why not?
  Mr. Robertson: The hon. Gentleman, from a sedentary position, asks "Why not?" The hon. Member for Macclesfield (Mr. Winterton) has allegedly preached a doctrine in favour of the ordinary people of Hong Kong, but in a debate which began at about five o'clock the hon. Member for Macclesfield appeared at a quarter to eleven. That is why I shall not give way.
  Fear of Chinese over-reaction was not the only inhibition on institutional change. I address my remarks also to my hon. Friends the Members for Falkirk, West (Mr. Canavan) and Wrexham (Dr. Marek). There still remains in Hong Kong the traditional Chinese antipathy to confrontational elections which my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) mentioned and, crucially, the problem of introducing elections into a society without any experience of them —in addition, a society with two substantial, externally motivated partisan electorates which we cannot ignore.
  The progress towards the more elected and representative Government that is proposed in the White Paper is perhaps unduly cautious. The Government of Hong Kong must be ready in the 1987 review to consider holding direct elections and having a greater proportion of directly elected legislators and extra members than they seem willing to contemplate at the moment. The danger now is not of Chinese over-reaction to democratic reform but of insufficient time before 1997 in which to create a strong, viable, locally based system which will withstand the inevitable pressure and traumas as 1997 advances. The priority must remain that changes, reforms and improvements must proceed at a pace which does not threaten the all-precious stability and prosperity upon which Hong Kong's future security is based, but must be at a pace and of a nature moulded in Hong Kong by the people in Hong Kong whose future depends upon it.
  Much has been made this evening of the institutions that exist in Hong Kong. As the hon. Member for Wells (Mr. Heathcoat-Amory) said in his brief but relevant contribution, side by side with the reform of government through elections in Hong Kong must go administrative reform. The accountability of the newly reformed institutions is as important as the elections themselves. The transition from colonial rule to a self-governing administrative region must involve open, accountable government at all levels.
  I turn to the fraught question of nationality. The assessment office report has found grave dissatisfaction among some sections of Hong Kong life with the provisions in the memorandum of agreement on nationality. This is hardly a surprise since the same sense of let-down, disappointment and even accusations of betrayal occurred after the passage of the British Nationality Act. The attitude displayed this evening and the views expressed by the hon. Member for Orpington (Mr. Stanbrook) and the right hon. Member for South Down (Mr. Powell) perhaps underline the feelings which were expressed at that time. But whatever provisions had been adopted on nationality then and now, the very fact of changing the particular status at present enjoyed by Hong Kong residents would have led to protest.

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  Nobody who has enjoyed the right to the blue passport and the quasi imperial injunctions we have heard quoted this evening will ever lightly give it up. But some change was inevitable, given the magnitude of the new arrangements. However, some areas still need to be examined: first, those people who have been mentioned by a number of hon. Members who will be rendered stateless by the changeover. I welcome very much the Foreign Secretary's assurance that at the end of this process nobody will be left in that state.
  Secondly, as my right hon. Friend the Member for Leeds, East (Mr. Healey) said, we have to consider the circumstances of some people in Hong Kong for whom we have particular regard — those citizens who have, by virtue of their public work or background, reason to believe themselves vulnerable in the new circumstances. They will have to be given protection by Britain and they have a right to know it in advance. The Government must be prepared to give assurances on that soon.
  Points have been raised this evening on the question of the basic law and the participation by the Hong Kong people in the drawing up of the Chinese basic law on the agreement. Nobody should, in considering that issue, under-estimate the problems of such a complex and unprecedented handover of power. That is why the implementation of this agreement is bound to throw up practical issues which can be dealt with only as they arise.
  Some of those problems have been raised in this debate and they will be raised in the debates on the Bill that will come before Parliament in the new year. But the basic law is not within the power of this Parliament and it would be wise not to be transfixed by that issue at this time, especially as China has said that the process of drawing it up will take up to 10 years to complete.
  Nevertheless, the demand from the Hong Kong people for a monitoring of the process must be taken note of and deserves attention. It is not for Britain to say yes or no to the request for Hong Kong's participation. That is up to China, and how persuaded it is of the merit of the idea. Our responsibility is and remains to ensure that the terms of the argeement are discharged and are eventually, before 1997, included in full in the basic law.
  Many other matters have been raised in this debate. The international acceptability of the new status of Hong Kong is one obvious area that bothers hon. Members and will bother people in Hong Kong who know that their future prosperity will depend on its own international acceptability.
  The question of conscription into the Chinese army and the location of elements of the Chinese army in or near Hong Kong has also been raised. There is the problem of the refugees, and, in particular, the Vietnamese boat people who are in Hong Kong in large numbers and whose status has still to be clarified. That will have to be taken up at a future date.
  Those are matters of real and understandable apprehension, but not matters which we can raise in a debate of this nature. Those fears and apprehensions exist and must and will be pursued with the other subjects in the transition period until the handover.
  The future of Hong Kong is not about institutions, be they social, economic or political. Nor is it about buildings or systems of concepts, however grand. It is about people who, over the past 88 years, came to live in Hong Kong
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  in the knowledge that its incredible mixture of colony, free trade area, super-plan city and bastion of free expression had a finite life until 1997. They may have come to make money, for freedom, or to find cash or refuge. They may have come for a financial killing or for a way of life distant from arbitrary arrest or directed labour. Whatever they came for, they did so on time borrowed from the large neighbour next door.
  Nevertheless, they are people who demand our attention and who deserve it, however great may be the historical accident which has placed their future in our hands. The next and crucial phase in Hong Kong's remarkable history is about to commence and we in this Parliament will play a pivotal part in making sure it promises all that those people, 8,000 miles away from us, really can expect. That will demand from us constant vigilance which we can readily pledge, but it will also demand a hard-headed realism on the part of the Hong Kong people, knowing that their future, perhaps for the first time, is completely in their own hands. How they choose to use it will determine the kind of society that they will inherit.
  We shall discharge our obligations and our onerous responsibilities. We can offer no less. But we must do so conscious that our real obligation now is to provide the means, the machinery and the institutions which will put the momentous and personal decisions into the hands of Hong Kong's own people.
  11.35 pm
  The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): Ministers cannot often claim that a debate has been historic or moving, but without doubt I can claim that today's debate has been historic. It is a debate of great importance, and the range of contributions has been remarkable. I go further. The House has shown a tremendous sense of responsibility towards the 5·5 million people who live in Hong Kong, contrary to the contention of the hon. Member for Yeovil (Mr. Ashdown), who implied that hon. Members were not particularly bothered about the anxieties of the Hong Kong people. The debate has shown that they are concerned. The Assessment Office report also reveals that concern.
  The British Government's duty is to do their best for the people of Hong Kong. That is precisely what we are doing now. We have a draft agreement which attempts to achieve just that. It has been widely welcomed in the House. The agreement should give the people of Hong Kong a chance and a feeling of hope for the future. It enables them to maintain their economic system and their way of life after 1997 and, as the hon. Member for Hamilton (Mr. Robertson) said, for at least 50 years thereafter. Whether he and I will still be around in 63 years' time I am not sure, but that is the agreement with the Chinese.
  The agreement provides for continuity. It sets the framework for continuing continuity, stability and prosperity. It contains a large amount of detail to cover every facet of life among the Hong Kong people. It provides a high degree of autonomy and enables Hong Kong, after 1997, to administer itself and to run its own economic, financial and commercial affairs. It allows Hong Kong to continue to play a unique role in the world as a trading and financial centre. All that is placed in an

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  international agreement between the United Kingdom and China. We are talking about a unique agreement for a unique set of circumstances.
  The right hon. Member for Leeds, East (Mr. Healey), my hon. Friends the Members for Bromsgrove (Mr. Miller), for Leominster (Mr. Temple-Morris) and for Mid-Kent (Mr. Rowe), and my right hon. Friends the Members for Guildford (Mr. Howell) and for Blackpool, South (Sir P. Blaker) talked about the Government's responsibility in the next 12½ years. It is important to make it clear once again that the Government will maintain full responsibility for administering Hong Kong until 1997 and will continue to work hard to build up Hong Kong's strength and prosperity.
  Many hon. Members suggested an annual report to the House of Commons. We shall take such ideas seriously and some system of regular accountability to the House is of great importance to the people of Hong Kong, as is the interest that right hon. and hon. Members will maintain over the next 12½ years.
  There has been much discussion about the implementation of the agreement. As my right hon. Friend said, one can never, in this world, have an absolute guarantee, but we have a legally binding international agreement. More important than anything else in this matter is the fact that the best prospect for success is the self-interest of all the parties to make the agreement a success.
  The hon. Members for Warley, East (Mr. Faulds) and for Carlisle (Mr. Lewis) and my right hon. Friend the Member for Blackpool, South have all stressed the self-interest of China in making this agreement work. China's economic interest, general policy on reunification and reputation for sticking to international agreements are factors that we are entitled to take into account. There is certainly a strong British interest in ensuring that the agreement works. I believe that the United Kingdom and China will work effectively together to fulfil our joint interest and our determination to honour this agreement. That self-interest on both our parts has been more important than anything else to the people of Hong Kong.
  We have been considering the White Paper and the draft agreement in the context of the report of the assessment office and its conclusion that most Hong Kong people find the draft agreement acceptable. That conclusion was endorsed by the independent team of monitors who believed that the assessment office carried out its task accurately, fairly and impartially. The assessment office's report highlighted a considerable number of reservations and anxieties in the minds of the Hong Kong people. Many of those anxieties have been clearly and fully evoked by hon. Members during this debate, and rightly so. I want to assure the House that those views will be carefully borne in mind by the Government in any future discussions with the Chinese Government on the implementation of the agreement.
  I should like to answer every contribution, but that would be extremely difficult. I shall, however, make that attempt. I assure hon. Members that if I miss their contributions I shall write them a letter answering their points if I can. The right hon. Member for South Down (Mr. Powell), the hon. Members for Hamilton and for Inverness, Nairn and Lochaber (Mr. Johnston), my hon. Friend the Member for Orpington (Mr. Stanbrook) and many other hon. Members raised the important subject of nationality. As my right hon. and learned Friend the Foreign Secretary has emphasised, the Government will
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  introduce legislation in the new year to give effect to the nationality provisions in the United Kingdom memorandum. That will involve the creation of a new form of British nationality for former Hong Kong British Dependent Territory citizens who obtained a passport before July 1997. In general, they will enjoy the same benefits as British Dependent Territories citizens, except for the transmissibility of their status to their children.
  During the negotiation, we argued strongly for transmissibility. The Chinese side that it could not in any circumstances accept it, and in the end, we had to accept this measure. The House will have the opportunity to debate further the nationality questions connected with that legislation. Individual rights of abode in, the United Kingdom are not affected by the agreement. British Dependent Territory Citizens do not have this right of abode now, as the right hon. Member for South Down knows, nor will their future status carry that right. Rights of abode in Hong Kong are fully protected by the agreement.
  The right hon. Member for South Down and I served together in Committee on the British Nationality Bill during the four months of its proceedings, and his speech did not come as a great surprise. The right hon. Gentleman is worried about the possible flow of immigrants into this country.
  There are only an estimated 20,000 British citizens in Hong Kong. They have the right to enter and live in the United Kingdom, as the right hon. Gentleman knows. The 3 million or so British Dependent Territories citizens in Hong Kong do not have a right of abode in the United Kingdom and will not have it in 1997 if they acquire the new status for which they are eligible under the terms of the United Kingdom memorandum. Our efforts have been directed to achieving conditions under which people will not wish to leave Hong Kong. We believe that the agreement provides those conditions.
  My right hon. Friend the Member for Guildford and my hon. Friend the Member for Arundel (Mr. Marshall) asked about travel documents and passports. According to section XIV of annex I of the Joint Declaration, residents of the SAR will be able to use travel documents issued by the SAR Government. They will record the holder's right to return to the SAR. The Chinese Government will assist or authorise the SAR Government to conclude visa abolition agreements with states or regions. Those who are on 30 June 1997 British Dependent Territories citizens by virtue of a connection with Hong Kong will be eligible to retain a status which will enable them to use British passports after that date. Those passports will make it clear that the holders have a right of abode in the SAR, and Her Majesty's Government will do all they can to secure for the holders of those passports the same access to other countries as that enjoyed at present by holders of British Dependent Territories citizens passports. There is no reason to believe that third countries will not recognise those passports.
  There were several speeches in which the dangers of statelessness were raised. The hon. Member for Warley, East mentioned it, as did many other hon. Members. It is important that I should say something in addition to what my right hon. and learned Friend said. There are concerns which, understandably, are felt by members of the community in Hong Kong, that they might become stateless as a result of the agreement. We intend fully to comply with our obligations under the 1961 convention on

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  the reduction of statelessness. It is possible that some British Dependent Territories citizens who may not be considered to be Chinese nationals will not acquire the new status in 1997. There is also the question of children born after 1997 to ex-British Dependent Territories citizens who are not considered to be Chinese nationals. I assure the House that we shall provide for such people to have a form of British nationality if they would otherwise be stateless. The House will have an opportunity to scrutinise the legislation in due course.
  There were several questions about international help with resettlement. The question was raised by the right hon. Member for Leeds, East, by the hon. Member for Liverpool, Riverside (Mr. Parry), and by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) who is not here. Our aim all along in the agreement has been to provide security for the future of the people of Hong Kong in such a way that they would not wish to leave. We have a very good agreement which does just that, and I do not think this is the moment to be taking steps to ask other countries to assist with resettlement of the Hong Kong people. Other countries would find incomprehensible such a display of lack of faith in the agreement that we have just reached, and I cannot believe that they would find our arguments persuasive. Moreover, because it would display a lack of faith, it would inevitably be very unsettling for the very people in Hong Kong for whose security we are seeking to provide. Therefore, I suggest that that is not the best way of proceeding.
  There have been speeches in the debate about the very important position of the Vietnamese refugees in Hong Kong. That does not affect the agreement immediately. I am sure that my hon. Friends will understand it if I do not go into too much detail save to say that the matter is of very great concern to the British Government. We are very conscious of the important problems that it raises, particularly for the Hong Kong Government, with their very heavy responsibilities there. We are making every effort, in co-operation with the United Nations High Commission for Refugees, and with other countries, to seek permanent solutions to the problem of the Vietnamese refugees who are at present in Hong Kong.
  A number of hon. Members have asked about consultation with the people of Hong Kong. In particular, I single out the Joint Liaison Group and the Basic Law, which were referred to by the hon. Member for Yeovil, the right hon. Member for Stoke-on-Trent, South (Mr. Ashley)—who gave me notice that he would not be present — and my hon. Friend the Member for Leominster among others.
  There is not a great deal that I can add to what my right hon. and learned Friend said, except that we attach very great importanc to the Joint Liaison Group as a forum for consultation with the Chinese Government over the implementation of the agreement. The detailed procedures will be worked out at a later stage, although the framework for its activities are already set out in annex II to the Joint Declaration. I expect the United Kingdom side of the Joint Liaison Group to include appropriate Hong Kong Government officials. The group will be an organ of diplomatic discussion between the two Governments. Therefore, it is likely that we shall have to keep participation at official level. But I remind the House that the range and sophistication of consultation in Hong Kong
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  is now very strong, and I am certain that we shall be able to find ways of ensuring that the views of the people of Hong Kong are taken fully into account during the discussions in this important group.
  Mr. Ashdown: Will the Minister give way?
  Mr. Luce: I hope that the hon. Gentleman will forgive me, but if I am to do justice to the House I must proceed. I understand his concern, but I should try to answer the debate.
  My right hon. and learned Friend the Member for Hendon, South (Mr. Thomas), and my hon. Friends the Members for Boothferry (Sir P. Bryan) and for Christchurch (Mr. Adley) asked about the Basic Law. As the House knows, the drafting of the Law is a matter for the Chinese Government. However, the agreement states that the policies described in the Joint Declaration and annex I will be stipulated in the Basic Law. We therefore already have a good idea of what it will contain.
  The Chinese Government have made it clear that the people of Hong Kong will be consulted on its drafting, although the exact form of this consultation has not yet been specified. In the period between now and 1997, there will be a need for close co-operation between the British and Chinese Governments. The Joint Liaison Group exists for this purpose, and we look forward to a close and constructive partnership in that connection.
  In his short but moving speech, the hon. Member for Carlisle spoke of basic freedoms, including religious freedoms. That is a matter of profound importance to the people of Hong Kong, and, as he knows, all existing freedoms will be stipulated as a result of this agreement in the Basic Law.
  The constitutional development of Hong Kong has caused great interest and a large number of hon. Members have expressed legitimate concerns. We all fully accept that we should build up a firmly-based, democratic administration in Hong Kong in the years between now and 1997. The White Paper sets out the proposals on elections to the Legislative Council in 1985, after taking account of public comments on the earlier Green Paper. For the first time in Hong Kong, some Legislative Council members will be indirectly elected, rather than being appointed by the Government. The White Paper envisages a step-by-step approach — that is the right way of proceeding—to more representative government which takes fully into account Hong Kong's special circumstances and traditions.
  A review of possible developments will be held in 1987 before the 1988 elections. Public reaction to the Green Paper in Hong Kong was generally in favour of its aims and of the gradual and progressive nature of its proposals. The public recognised the need to ensure that the prosperity and stability of Hong Kong are not put at risk by introducing too many constitutional changes too quickly. However, the Hong Kong Government have responded to public feeling by increasing the number of Legislative Council members to be elected in 1985 from 12 to 24. That is the sensible basis on which we should proceed.
  My hon. Friend the Member for Orpington asked about the position of Her Majesty's Overseas Civil Service. He was a distinguished member of it, as I was, so we have a joint interest in ensuring that its interests are safeguarded. We have its interests closely in mind. As my right hon. and

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  learned Friend the Foreign Secretary said, the draft agreement provides satisfactorily for continuity of service by serving officers in the public service in Hong Kong on terms and conditions, including pay and pensions, no less favourable than before, to 1 July 1997. The resumption of sovereignty over Hong Kong by the People's Republic of China raises similar issues in respect of Her Majesty's Overseas Civil Service as independence has in other dependent territories. I remind my hon. Friend that the public officers' agreement, to which he referred, has generally been negotiated at the last moment before independence in the case of other independent territories, and signed after independence. Constitutional change is still more than 12 years away in Hong Kong and the Government have, and will continue to have, closely in mind the interests of that particular group of civil servants as well as of contract officers, other expatriates and local civil servants.
  Other important points were raised, including points about defence and the position of the People's Liberation Army. Under the agreement, China would remain responsible for foreign affairs and defence, but public order will be the responsibility of the Special Administrative Region. The House will wish to take that division of responsibility fully into account.
  The hon. Member for Walthamstow (Mr. Deakins) made an important point, which was backed up by my hon. Friend the Member for Wells (Mr. Heathcoat-Amory) and my right hon. Friend the Member for Guildford, on the question of Hong Kong's membership of international agreements. At present Hong Kong plays an important role in the General Agreement on Tariffs and Trade and the multifibre arrangement. The agreement allows its continued participation in GATT and any successor to the present MFA. It also provides that the Hong Kong SAR will have the status of a separate customs territory. A priority task of the joint liaison group will be to consider action to be taken by the British and Chinese Governments to enable the SAR to function as a separate customs territory and, in particular, to ensure the maintenance of its participation in GATT and other similar arrangements. We shall therefore work together to secure and protect Hong Kong's position. Given the widespread international good will expressed since the publication of the agreement, I have no doubt that our partners will show sympathy and support towards Hong Kong. We shall certainly work to that end.
  The agreement has been widely praised as giving Hong Kong a strong chance of success. It was achieved under the supreme leadership of my right hon. and learned Friend the Foreign Secretary with the fullest possible professional support of the Governor of Hong Kong and other professional advisers, and in close co-operation with members of the executive council and legislative council
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  under the leadership of Sir S. Y. Chung. That has made an outstanding contribution to the progress that we have made.
  The Government have done their best. We have given the people of Hong Kong a firm basis on which to build a prosperous future. We and China will work as strongly as we can to make the agreement a success. The political will is there. We believe that it can and will succeed. The Government will work in the closest possible co-operation with other countries, especially China, to ensure that it is a success. For the next 12 and a half years we maintain full responsibility for Hong Kong and its administration. We expect and believe that the international community will give its support to us in this. It is in the British interest that this agreement should succeed, and I am confident that the people of Hong Kong will work hard to make it a success. I therefore strongly commend the agreement to the House.
  Question put and agreed to.
  Resolved,
  That this House, having considered the views of the people of Hong Kong as set out in the reports of the Assessment Office and the Independent Monitoring Team published in White Paper, Cmnd. 9407, approves Her Majesty's Government's intention to sign the agreement on the future of Hong Kong negotiated with the Chinese Government, which was published in White Paper, Cmnd. 9352.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at the sitting on Monday 10th December, Standing Order No. 3 (Exempted business) shall apply to the Motion in the name of Mr. Secretary Jenkin relating to the draft Local Government (Interim Provisions) Act 1984 (Appointed Day) Order 1985 with the substitution of One o'clock or three hours after it has been entered upon, whichever is the later, for the provisions in paragraph (1)(b) of the Standing Order. —[Mr. Durant.]

PETITION

  Human Embryos
  12 midnight
  Mr. David Mudd: I beg leave to present a petition signed by 939 of my constituents who have expressed concern over the contents of the Warnock report. I join with them in that concern.
  The petition states:
  Wherefore your Petitioners pray that the House of Commons will take immediate steps to enact legislation which forbids any procedure that involves purchase or sale of human embryos, the discarding of human embryos, their use as sources of transplant tissue or as subjects for research or experiment (unless this is done solely for the benefit of the embryo concerned). And your Petitioners, as in duty bound, will every pray etc.
  To lie upon the Table.

British Telecom Computer Centre, Portsmouth
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
12.1 am
Mr. Michael Hancock: I am fortunate to have the opportunity of this Adjournment debate so soon after the unfortunate occurrence in Portsmouth involving the closure of BT's computer centre.
I have the dubious pleasure—if that is the right word —of being the first Member of Parliament to challenge the consequences of BT's privatisation and the effects on employees, many of whom have given BT very loyal service only to find in the opening days of privatisation that their jobs are at risk and that the centre in Portsmouth will close.
I do not believe that the tragic upheaval and trauma facing those people has been seriously considered by the management of BT. Indeed, I do not believe that the Government considered that prior to privatisation. Anyone reading the Act that allowed BT to change hands, would find it very difficult to discover provisions that gave the House any responsibility. Surely, it should have shown some loyalty to the staff who have worked for so long within BT's organisation.
The closure is a double loss for Portsmouth, which has the worst unemployment of anywhere on the south coast and which is desperately trying to encourage the sort of industry represented by that computer centre. The job prospects of the 150 people working at the centre, and of the young people in the area who have been trained in those sophisticated skills, will be lost. Presumably, as far as BT is concerned, they will be lost for ever.
There has been a complete loss of morale among the staff at the computer centre and a waste of good-will. Indeed, that centre had a marvellous industrial relations record and its employees had given loyal and devoted service in the interests of the Government. The waste of public money alone prompted me to write to the Public Accounts Committee, urging it to investigate the closure. About £20 million of the taxpayers' money will go down the tube when the centre closes. That money was hard-earned in the first instance, and, having had the privilege of seeing round the centre, I agree with the employees there that the money was well spent, too. It will now simply be frittered away.
British Telecommunications has behaved in a most deceitful way. The decision was made before privatisation took effect, but was deliberately suppressed. Indeed, I believe that the management of BT came clean only after my final letter to the regional director in which I suggested that unless I received an answer within 14 days I would raise the matter in the House and ask the Minister to confirm what the future of the site was to be.
The decision was deliberately suppressed before privatisation, and carried out afterwards. Adopting a phrase used recently in the House, I would say that BT is playing bingo with other people's money. The real losers will be the employees at the centre.
The centre was brought into being in 1980 after pressure from local Members of Parliament, the staff sides and the regional management of BT. It was opened in 1981 at an initial cost of £500,000 for the building, a conversion
474
and adaptation cost of £1 million and some £7·5 million for the equipment installed at the time. The site was a disused warehouse, so the centre made use of surplus land in the city. It became a centre of employment offering jobs for over 150 people.
According to BT, the centre is recognised as the most cost-effective centre in the country. BT has itself recognised the fact that the work load at the centre is extremely heavy and that it does a good job. Indeed, despite the closure, BT has agreed to spend nearly another £4 million on enhancing the equipment there and will be taking on about another 100 people. It was a sad reflection on the members of the management of BT that in their recent letter to me they made it clear that anyone taken on after next January to cover the workload would be told that the job would be a very short-term experience. The £4 million is to be added to the colossal amount of money already consumed by the centre. It will simply be thrown away.
The centre's work covers an enormous area. It deals with 3·5 million subscribers' accounts and the ordering and work load of 12 telephone areas. The centre is being closed, apparently, because BT wants to adopt a new concept — the front office concept. To arrive at that decision it has had to dabble in new types of computer and to consider different practices in this country and abroad. For instance, BT bought the Cincinnati-Bell system. BT in fact experimented to the tune of about £17 million of taxpayers' money, which has subsequently been written off because the experiment was a complete failure. If BT has learnt nothing else, it should surely have learnt that the centre in Portsmouth is worth saving. Its equipment has been tried and tested. Its staff has responded to the job given to it.
Because of the establishment of the new districts, the need arises to absorb the existing computer centres within BT's new district organisation. A problem thus arises for three of the existing centres— Portsmouth, Derby and Rochdale. The problem has been alleviated in Derby and Rochdale because BT has suggested that, because those centres are close to the areas that they serve, they can be absorbed. It is ludicrous that a company such as BT, which we are told almost daily is in forefront of new technology, finds it impossible to base a computer centre in Portsmouth to communicate with Brighton, which is only 46 miles in one direction, or Southampton, which is 25 miles in the other.
There must be a better way of doing things. The Minister could use his influence with BT management on at least two. The centre could remain open and meet the needs of the south downs district—the new name for the district in which Portsmouth will be based. The distance from Portsmouth to Brighton, the district headquarters, should not pose a problem. If we can cover the world by satellite I am sure that we can bridge 46 miles. The city has well established data communication links. A precedent for that solution has already been set at Derby and Rochdale. The centre can justify its existence as it can cope with the work load. Indeed the south downs district will represent a slight reduction in its work load.
The second solution is that the centre could remain open and meet the computing requirements of the Southampton district. No decision has been made about the Southampton computer site, so it is not too late for BT to

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designate Portsmouth as the centre which deals with the Southampton area. Such a solution would use existing expertise and capital investment.
I hope that the Government have the wit to recognise that they have an obligation to the centre's employees and to youngsters who need the type of jobs that the Secretary of State for Education and Science constantly tells us people should train for. Our city needs the jobs. The Government should use their influence with BT management in that regard. What proportion of BT computing staff are employed at Portsmouth? How many jobs are likely to be created in BT computing in 1985 and 1986? What guarantees do Portsmouth employees have that they will be selected for those posts? Why is BT unable to use its data communication technology to retain Portsmouth as a centre for Brighton and Southampton when it currently covers areas as far away as Norwich and Cambridge and has data links with sites as far away as Edinburgh? What proportion of the money that is to be spent in the next four or five years developing the front office concept—the real culprit—is needed to retain the Portsmouth centre?
Finally, what will be the total cost of making staff at Portsmouth redundant and the cost of redeployment throughout BT? BT itself suggests that it will cost about £17,000 per employee to transfer staff to other sites. For th staff, many of whom have given 20 years service at the Portsmouth centres, the most annoying aspect is that they will have to apply for their own jobs. Not one of them has the right to have his own job guaranteed to him. That is a very sick, sad state of affairs.
Under the Act the Secretary of State has specific powers to use his influence to instruct the Director General of Telecommunications as to the way in which the service should be run. He has a specific responsibility, given to him by this House, to promote the interests of consumers, purchasers and users. It cannot be beyond the wit of anyone to see that that responsibility must be used to investigate what I consider to be the scandal of the proposed closure of the Portsmouth centre, the absolute waste of countless millions of pounds of taxpayers' money and the writing off and disregard of the loyalty and integrity of the staff.
I am grateful for the opportunity to bring this matter before the House today and I hope that the response will be an initiative by the Government to see whether there is any way in which they can express their concern and their willingness to try to direct British Telecom to retain the Portsmouth centre.
12.16 am
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): The hon. Member for Portsmouth, South (Mr. Hancock) has asked for ministerial intervention in the detailed local affairs of a large private sector company and I have listened carefully to all that he has said. I was a little surprised at the somewhat intemperate language of his harsh and, I believe, unfair criticism of British Telecom. I do not wish for a moment to give the impression that it is not right for him to pursue the interests of his constituents in whatever way he sees fit. Nevertheless, although there may well be value in a public airing of a perceived problem, there is no substitute for direct approaches to the management of the company in a case of this kind.
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I can answer many of the points that the hon. Gentleman has raised, but on the extremely detailed matters that he raised in the latter part of his speech, although I am anxious to respond, I am afraid that I shall have to look up the details and reply to him by letter.
The hon. Gentleman has already sought a meeting with my right hon. Friend the Secretary of State in the hope of persuading him to intervene but has been told that there is nothing that Ministers at the Department of Trade and Industry can do. It may be helpful if I clothe that rather bare statement with some more general explanation.
The operations of British Telecom, like those of any large employer, are of interest to a wide range of people — individual and business customers, suppliers and employees. There is also room for interest in its operations from the wider standpoint of the role that the company can play in encouraging growth in the economy through its research and development. Individual Members of Parliament may have points to raise wth a company from any of those standpoints, but it is understandable that the aspect that most are quickest to raise concerns decisions affecting employment. Such decisions, however have to be made in the context of the company's overall objectives. Among these, in the case of British Telecom, the provision of an efficient service to customers rightly, in my view, ranks high.
The hon. Member has, I believe, been in correspondence with British Telecom which will no doubt have told him that the local communications services division, the division with the main direct contact with the public, is at present being re-organised—the hon. Member touched on this—into 24 management districts in place of the former 61 areas. I would not think it useful to debate the merits of the new structure here, except to say that British Telecom is satisfied that it will help to make the company more responsive to its customers. That must be welcome to us all. Similarly, I would not see merit in exchanging views on just why one area headquarters is chosen to be the headquarters of one of the new and larger districts, while another is not. Most of us in such a discussion would stick up for the case of the headquarters in or near our own constituency, although we would recognise that there may be good company reasons for preferring another location. It happens that the British Telecom decision has been to make Brighton the headquarters of the south downs British Telecom district rather than Portsmouth, and it also happens that the proposed rundown of the Portsmouth computer centre is part of a similar reorganisation of the computer back-up that the new reorganisation in districts needs.
It is the right of the hon. Member to seek further explanations from the British Telecom management, who will I am sure take careful note of all that is said in tonight's debate. I understand that the British Telecom director concerned, who would be very happy to see the hon. Member, is Mr. Noel Tappenden, who can be contacted at Telecom Centre, Newgate street. I have, however, no reason to suppose that British Telecom has not weighed carefully the points that have been made about the development of the Portsmouth computer centre and the capital expenditure involved in it.
The hon. Member argued in the earlier part of his speech that had British Telecom still been a nationalised industry the Government would have been in a position to intervene in a matter of this kind. Perhaps they would with an Alliance or Labour Government, but it has been this

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Government's firm policy to give the nationalised industries the maximum possible freedom to reach their own commercial decisions on such matters. Therefore, if this point had been raised two, three or four years ago my answer would have been that this must be a matter for the business judgment of the corporation's board, and I would have invited the hon. Member to take it up with British Telecom direct.
If that were inappropriate then, it is surely doubly inappropriate now. I think that everybody in the country must have noticed that in the past few days British Telecom entered the private sector. It has entered the private sector with more than 2 million small shareholders, considerably more than any other private sector company in the country.
Mr. Hancock: Surely, if this had happened two years ago, the hon. Gentleman, as a responsbile Minister of the Crown, would have wanted to investigate how about £20 million worth of investment since 1980–81 had been written off after such a short time. Would he not have questioned carefully the management of BT about the ethics of doing this, and about the merits of pursuing a policy that will lead the company to spend about £20 million developing another centre in place of the one in Portsmouth?
Mr. Trippier: I am anxious not to encourage the hon. Gentleman to make another speech, but I draw his attention to a number of Adjournment debates in which I have participated, referring specifically to the Post Office, rather than to BT. He will find a common denominator in my replies to those debates, in that I said that we do not interfere in the commercial judgment of the Post Office, which is not privatised.
The Government meant what they said in the prospectus of BT. We said that we did not intend to use our shareholding—to which the hon. Gentleman referred—to intervene in the commercial decisions of the company.
The hon. Member surely cannot expect us to intervene now with the company in what is an entirely commercial decision of its own. It would be a complete breach of faith with those 2 million new private shareholders for us to do so, and I am sure that the hon. Member will understand that.
I understand that British Telecom has replied fairly recently to the hon. Gentleman, setting out its intentions and the arrangements for the full consultation that it has in mind. We should bear in mind also that it is not proposed that the closure should take place until 1988. If the hon. Gentleman and his constituents wish to avail themselves of the opportunity, there can be considerable consultation with the company before then. The hon. Gentleman should understand that it is no good trying to enlist us in his support, and he will understand well that it is not my place to go into the merits of the decision.
The hon. Gentleman has made much of the situation in Portsmouth and its employment problem. I do not deny that problems exist and that they are a source of much concern locally. However, I feel that he does less than justice to the splendid efforts of the Portsmouth city council, of which he is still a member and, by all accounts, an active one.
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The city council's promotion of new industrial and commercial developments, together with the encouragement of tourism, have done much to mitigate the effects of the rundown of the naval dockyard, which for so long dominated the local economy. By its diversification, the city council is laying the foundations for future prosperity.
As I am sure the hon. Gentleman well knows, I have had the privilege of visiting Portsmouth on a number of occasions. I have always been struck during these visits by the initiative and enterprise displayed by the city council. These are key ingredients for success.
Many of the initiatives have been on the small firms front, and here I must declare an interest. I have always been conscious when speaking in Portsmouth—where initiatives to help small businesses abound — that I preach to the converted when I tell the City Fathers that this sector is so very important for our future prosperity.
I am sure that the hon. Gentleman will agree that the foundations for future prosperity are being laid locally by the city council. There is an exercise in self-help taking place there. The community is pulling itself up by its bootstraps. For its part, my Department has contributed nearly £3 million in grants under its support for innovation programme towards 19 projects since 1979. It is supporting also the Portsmouth ITEC, as the hon. Gentleman will know.
Our general economic policies are creating the conditions in which businesses of all sizes and types can flourish. Business in Portsmouth, which has the full support of the city council, is well placed to take full advantage of the opportunities that we have created.
I have referred to the hon. Gentleman's suggestion that the Portsmouth computer centre would not be run down if British Telecom were not being privatised. I want to lay stress on the argument that I advanced earlier. I think that the hon. Gentleman's suggestion is entirely wrong. British Telecom's decision arises from its increasingly commercial attitude as it is faced with commercial competition. It is nothing to do with privatisation. The Government can take some responsibility for British Telecom's commercial attitudes, as we have encouraged the competition and appointed the present strong management at British Telecom. To that extent the hon. Gentleman can reasonably lay some of the responsibility for British Telecom's commercial decisions at the Government's door. But the sale of British Telecom to the public is a quite different matter. This complements the decisions taken earlier but does not directly affect the reorganisation of computer services of concern to the hon. Gentleman.
This reorganisation is part of a policy which has brought the public great benefits—a far better service for customers, lower real prices for telecommunication services as a whole and a more efficient management of resources. That must be generally welcomed.
It is important to stress the Government's standpoint in British Telecom and other employers enlarging the number of jobs that they can maintain viably and not shirking the need to make organisational changes where these would enable a more efficient service to be provided. When the modest reductions in employment in British Telecom are considered, thought should be given also to the increased employment resulting from other companies taking advantage of the new competitive environment. As I said earlier, Portsmouth should be well able to take the closure of British Telecom's computing centre in 1988 in its stride.

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I shall not intervene in the hon. Gentleman's dispute on behalf of his constituents with British Telecom. I cannot and should not do so, and it would be a breach of faith with the 2 million new shareholders to do so. The hon. Gentleman might like to think how he would convince those many thousands of the 2 million who live in his
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constituency that it is in their interests for British Telecom to preserve these jobs at any cost. For the power to determine the future of British Telecom has now been transferred to them.
Question put and agreed to.
Adjourned accordingly at half-past Twelve o'clock.