HC Deb 25 May 1984 vol 60 cc1371-80 10.18 am
Mr. Hal Miller (Bromsgrove)

I should like, first, to welcome my hon. Friend the Minister of State, Foreign and Commonwealth Office. I hope that he has recovered from the illness that prevented him from replying to the debate in the House last week. I also hope that he will be grateful for the opportunity to put his thoughts about Hong Kong on the record, because I know that he takes a great interest in it.

Before proceeding further, I refer briefly to the interests that I declared in the debate last week — financial, family and emotional. Let me make it clear that the purpose of this debate is not to have a re-run of that which took place in this Chamber and the other place last week. Rather, my intention in raising this subject is to seek to draw some lessons from those debates and, in particular, to concentrate on the measures that now need to be taken in Hong Kong to maintain the confidence there which alone can provide the basis for the prosperity and stability to which the Governments of China and the United Kingdom have dedicated themselves in the negotiations.

The first lesson that I drew from the debate was that there was bipartisan support in both Houses for the Government's policies and for their conduct of the negotiations. That means that there is no doubt that China will be resuming sovereignty of Hong Kong after 1997 and will be assuming its administration. It is no good people imagining that they can come here to fish in troubled waters and stir up some kind of opposition that would effectively deflect the Government from their announced course. It is important that the wide and strong basis of support that the Government have for their aims in the negotiations and in their conduct of them so far should be clearly understood.

It is also important to put on the record that there is no sign that China wishes to resume sovereignty or assume administration before 1997. Therefore, we must address our minds not only to what will happen in the interim period but how to provide for what happens thereafter. It has been made plain by my right hon. and learned Friend the Foreign Secretary that China is thinking in terms of Hong Kong continuing to be a separate economic entity—a special autonomous zone in China—for at least 50 years with no disturbance to the present economic system or way of life. Therefore, we now need to consider the measures needed to provide for continuity, stability of administration and the maintenance of law and order, as well as for the ongoing economic activity.

It is significant that both Governments have continued to stress, even when they have felt unable to reveal the details of the negotiations — obviously, something as complicated as those negotiations has to be conducted in secret — that they are concerned to maintain the prosperity and stability of Hong Kong. So they are agreed. Governments may agree, but what is important is the reaction of the people. I must emphasise to my many friends in Hong Kong that it is no good their expecting outsiders to have confidence in the future of Hong Kong if they do not exhibit such confidence. They must also, for the first time, face up to the fact that they must assume some responsibility for the maintenance not only of confidence but of the many freedoms that they have enjoyed under British administration.

The purpose of the negotiations has been to see that those freedoms are continued after 1997. Judging by the releases from Peking, which are perhaps a little more forthcoming than the statements that we have been accustomed to here, it seems reasonably clear that Peking is committed to preserving freedom of speech, of assembly, of travel, of economic activity, of the Hong Kong legal system, of contract and all the other freedoms that those born in Hong Kong have come to take for granted. Indeed, those who have escaped from China have sought to achieve those very freedoms.

En passant, I should say that in a round robin to Members of Parliament it is suggested that I may have been under a misapprehension when I spoke about people escaping from China. It was said that those who left China were either criminals, undesirables or economically inactive. I can hardly see how that squares with the bodies that I have seen floating down the Pearl river or with the refugees crossing the border whom I have seen and held conversations with. I rebut the charge that it is inaccurate or unfortunate to describe those who left China in such circumstances as people who merely sought to find a form of economic activity that they were unable to sustain in China.

The negotiations no doubt seek to enshrine those freedoms. Thus one can see how complicated the negotiations are. That is probably why a demand has been made that the agreement should not be concluded until all the details have been spelt out. In the time scale set for the negotiations by China, I do not think that we shall achieve that degree of detail. However, I am not one of those who is depressed by that prospect. I believe that the main outlines of the agreement will be in place, and I trust that the latter will be in writing. That is the main assurance that people should seek. I see some advantage in work on the details of the agreement going on for some time, and in associating Hong Kong people with them, even at an unofficial level.

However, the purpose of the debate is to draw attention to the measures that should be considered. I am not saying that the Minister is in a position to respond to my points today, but I should like to place it on record that people are thinking about such measures. It is not for us to tell people in Hong Kong how they should conduct themselves. I am merely saying that our degree of confidence in the future of Hong Kong will be reflected in the degree of confidence that they have and the measures that they take.

But, of course, the role of the Hong Kong Government is crucial in giving a lead to the people of Hong Kong over the actions that should now be put in train and the subjects that should now be considered. As I have said before, the wonderful economic achievements of Hong Kong and its great vitality and excitement are crucially dependent on confidence. It may be compared with the Indian rope trick. It is easy for the strands to unwind and, indeed, they could do so very rapidly if confidence was lost and if the rope were not sustained by it. A clear lead needs to be given by the Hong Kong Government.

In the opening paragraphs of the paper presented to us by the unofficial members of the Executive and Legislative Councils, it is claimed that they played a large part in determining the policies of the Hong Kong Government, as they were in a majority on both Councils. They will have to play their role. It is not enough for them to come here and labour the fears and anxieties of people in Hong Kong. They portray them very vividly, but they will now have to play some role in developing the future of Hong Kong in the circumstances that have been clearly established both in the negotiations and in debates in the House.

For the Hong Kong Government to give such a lead, their authority will have to be strengthened. That may sound odd from someone who was a civil servant in the Hong Kong Government in a Hong Kong that did not have a democratic system and was run by Civil Service rule. But the Government's authority needs to be strengthened by a wider association of unofficial people within the Government and the development of their role, along with the development of the Hong Kong Government's accountability to the people of Hong Kong, leading towards wider participation.

Views were expressed about the speed at which Hong Kong should become more democratic. The right hon. Member for Leeds, East (Mr. Healey) was right to refer to the priority of developing the Hong Kong Government's accountability rather than developing a system of democratic elections. Confidence, and perhaps even stability, could be quickly eroded if there were a rapid development of traditional party political conflict. I hope that China will accept a self-denying ordinance not to seek to introduce into Hong Kong Communist ideology that is enshrined in a party political platform. That would immediately crystallise the anxieties and fears that I have mentioned and could cause great uncertainty. It might even be difficult to find candidates to oppose a Communist candidate. Those minded to oppose might represent a very small faction on the other side of the spectrum. The stability and confidence that both Governments seek to ensure would then be quickly lost.

The Hong Kong Government's authority might be strengthened in the first place by extending the appointment of unofficial members to the Councils in order to draw on a wider range of experience and occupation, and to provide later for their replacement by members who are elected either directly or indirectly from the district boards. But it is not enough just to have those people on the Councils. They will have to do something. They could provide real assistance and at the same time spread a much wider understanding of the position, and thus help to maintain confidence, if, after the main agreement between the Government of China and our country has been reached, they are involved in working out the further details that will obviously be required.

It was not realistic to expect the agreement to be struck and written by September and to contain all the elements that will be necessary to answer all the questions that will be asked. It is important to buttress the Hong Kong Government's authority in helping to give a lead to Hong Kong and to maintain people's confidence.

There is a need to provide for stability and continuity of administration. There are about 114,500 civil servants in Hong Kong on the permanent and pensionable establishments of whom fewer than 1,000 are on expatriate terms. That is a good illustration that there are many perfectly competent individuals in Hong Kong who are capable of sustaining Hong Kong's administration. However, they must have confidence, for instance, that their pensions will be paid. I would resist the requests that I believe are now being made that officers on the permanent establishment should be allowed to take their accrued pensions so far and convert to contract. That would be a most unfortunate move.

If we are negotiating an agreement that will provide that the present way of life under Chinese administration is to continue for at least 50 years after 1997, we must start to think about providing for continuity of administration, and pensions will be an important part of that consideration.

The Hong Kong system is not the same in all respects as the one that we know in Britain. There are many public servants in bodies such as the university and the mass transit railway. Hong Kong has given us a lead by privatising many branches of social welfare activity. There are many public servants in the employ of bodies such as the Tung Wah hospital, which recently sent a delegation to Britain. Pension payments are a significant financial factor and in the present financial year are estimated to cost nearly 1 billion Hong Kong dollars. It is clear that consideration must be given to pensions in the negotiations. It would be helpful to receive an indication that the issue is being considered so that people understand that their problems are being taken into account.

The indications that have been given by China suggest that there might be room for continuity in the administration of some expatriates. The proportion of expatriates within the administration is already small and it may well become smaller, but there may be room for continuity for some of them and that issue should be clarified in the negotiations

Continuity of administration is important but that is of no avail without the maintenance of law and order. The Royal Hong Kong police have a strength of just under 24,000. They have a vital role to play and it is important that we should seek to maintain their morale and integrity. One of the difficulties to which many people have referred in the past—the Hong Kong Government have sought valiantly to tackle the problems which they have expressed—is the maintenance of the integrity of the Hong Kong police. Policing will be required in the 50 years after 1997, which is only 13 years away, and junior police officers could expect in the normal course of events that their careers would continue. They will need to be given a pretty clear indication of the side on which their bread is buttered, if I may put the matter in those terms. It is necessary that the continuity of policing after 1997 is addressed, as well as the position of those who are in what I might describe as sensitive posts.

Confidence-maintaining measures should be considered in the light of economic factors. Land has always been one of the major revenue-producing assets of the Hong Kong Government but its significance goes far beyond that. An immediate and clear indication that Hong Kong is to continue with its present way of life and systems after 1997 for at least 50 years would be to assimilate the terms for land in the new territories and those in the urban area. Much of the current development, industrial, commercial and residential, is taking place in the new territories due to the phenomenal expansion of the economy and the society, and the land issue is most important.

One of the great guarantees for Hong Kong's future is its geographical position and the advantages that it enjoys as an obvious choice for a regional centre. It is a centre for far more than merely physical facilities — the container port, for example. Even now, consideration is being given to the creation of an arbitration centre for the entire region. There is a well-established conference centre. The airport facilities have been widely used and I think that they need to be expanded. One of the measures that would help to create confidence would be for further consideration to be given to a second Hong Kong airport. I suggest that consideration should be given to constructing the second airport on the Deep Bay site that was considered before the revolution in China, and not Lan Tau island. That would be a tangible mark of Chinese interest in their special economic zone at Shenzhen and in the autonomous entity in the special zone of Hong Kong.

I am not suggesting these measures as part of a reflationary package. With an increase in exports of over 50 per cent. in the first three months of the year, it is not necessary to talk about reflationary packages against that background. However, it is necessary to consider projects that will provide the necessary infrastructure for Hong Kong beyond the end of the century. One part of that infrastructure is the construction of the power station that is currently being undertaken. My hon. Friend the Member for Arundel (Mr. Marshall) has talked abut the development of Hong Kong as a regional telecommunications centre to service oil developments in the south China sea, to service the developing air traffic and to serve the telecommunications needs of Hong Kong, the south seas, as they are called in the area, and the mainland of China.

Mr. Michael Marshall (Arundel)

I am grateful to my hon. Friend for making that reference because it is an important point. Does he agree that there is a tripartite partnership in oil exploration, atomic power and telecommunications for the whole of southern China as well as Hong Kong, and that if confidence in Hong Kong were destroyed or withdrawn the whole edifice would collapse?

Mr. Miller

My hon. Friend is wise to emphasise the essential self-interest of China in the success of those projects and in the continuing success of Hong Kong.

Attention must be given to maintaining the competitiveness of Hong Kong in terms of other centres in the area, for example, Singapore. There has been some loss of confidence in Hong Kong because of recent changes in the tax system. We may wonder how anyone could suffer a loss of confidence when the rate of salary tax has increased from 16 per cent. to 18 per cent. Many of us would not regard that as a source of worry. My point is that, for the first time, interest on overseas holdings was brought into the tax system, and that was one of the main advantages that Hong Kong had enjoyed. A tabulation of the comparative advantages of Hong Kong as a so-called tax haven would reveal that the advantages are not now as considerable as they were. I keep emphasising that Hong Kong is a centre of a region of many activities, and it is important for its development that its competitive position in terms of taxation and incentives is kept in mind.

Apart from the administration and the economy, some political measures need to be considered. It would be helpful if there were an early sign that English will remain the official language in Hong Kong during the 50 years after 1997. The efforts now being put into promoting Hong Kong as, for instance, an arbitration centre would be largely wasted if it were no longer possible to use English as the main language. It is important to freedom of contracts and international trade for English to be used in the judicial system, and I believe that it should remain the official language.

It is no good saying that there will be freedom of travel if travel documents are not recognised and unless the right of abode in the special zone that is to be Hong Kong is not only recognised but enshrined in some document to give people the security of abode that they must be seeking. I am not suggesting that the people will be given a document to give them an automatic right of resettlement in this country. People are rather limited in their imagination if they believe that everyone in Hong Kong wants to live in an economy such as ours. The Hong Kong people need something that provides right of travel and abode in Hong Kong, and that is most important.

Difficult questions come under the political heading. I must refer again to the continuing influx of population from China. That influx may not sound like much, but 150 people a day from China coming into Hong Kong represents in a year the population of a town the size of Camberley or, by the end of 1997, the population of a city even larger than Glasgow. That population influx is adding to the social and other problems, including instability, of Hong Kong, and that issue must be tackled.

The British and Chinese Governments are agreed on their desire to maintain the prosperity and stability of Hong Kong. That is the object of the negotiations leading to the agreement. Their efforts will be of no avail unless efforts are made by the Hong Kong people to sustain their own confidence.

I am grateful for the opportunity of canvassing some of the more important points to which reference should be made.

10.44 am
Mr. Robert Adley (Christchurch)

I congratulate my hon. Friend the Member for Bromsgrove (Mr. Miller), who is a fellow officer of the British-Chinese parliamentary group, on taking the debate a stage further in a thoughtful and constructive look at Hong Kong's future. I intend to continue with the theme that he started.

It is essential to note that the interregnum of 13 years will be a difficult time for everyone. We must ensure—I use the words of Lord Wilson in another context—that we do not have 13 wasted years, which would be a tragedy. We could see even worse than wasted years if the Hong Kong people do not take cognisance of the crucial point made by my hon. Friend—they have the main role to play in confidence building. The Hong Kong people are, of course, not alone in that effort. Three parties are essential factors in confidence building: the People's Republic of China, Hong Kong and the British Government.

The Chinese Government must be aware of the sensitivity of opinion in Hong Kong. Only this morning, an announcement appears to have been made about the possibility of stationing troops from the People's Liberation Army in Hong Kong after 1997. Most people have been led to believe that that would not happen. I do not wish to debate whether that will or will not happen, but the Chinese Government must be aware that even to allow such comments to slip from the lips of their leaders can do more to destroy confidence in Hong Kong's future than anything said in the Chamber or anything said and done in Hong Kong. Such a statement has a disastrous effect on the Hong Kong stock exchange, which is one of the most frantic institutions in the world, and does little to build or maintain confidence in Hong Kong. That comment is in marked contrast to the behaviour and atmosphere in the Chamber this morning.

Leadership in Hong Kong is essential. The Hong Kong people must start to assume leadership. I agree with my hon. Friend the Member for Bromsgrove that there will be a continuing role for the expatriates, provided they are selected by the Hong Kong people rather than appointed by the British Government. I understand that that is the Chinese Government's attitude towards the continued role of expatriates in Hong Kong's administration: if they are selected and chosen by the Hong Kong people and qualify under the seven-year residency rule they will be free to remain.

My hon. Friend said—and I stress this point—that it is essential that the Hong Kong people should face the reality and inevitability of change. The Chinese people of Hong Kong can no longer ignore politics in the broadest sense—and I do not mean party politics. They can no longer opt out of the business of running Hong Kong. They must assume much more responsibility for providing political leadership within Hong Kong — and again I stress that I do not mean party political leadership. It is important to broaden the franchise far beyond anything that exists in Hong Kong at this time.

The third leg of the stool of confidence building is the British Government, who, over the years, have allowed and encouraged the Hong Kong Government to have almost complete autonomy. It is not realised, even in China, how little control the British Government have or have ever wanted to have in recent years over the Hong Kong Government. The lack of control has gone hand in hand with an absence of democracy, for reasons that are historically understood by all of us.

The British Government must take on board the crucial role that they have in ensuring a spread of more democratic institutions in Hong Kong. I am not talking about one man, one vote tomorrow or even necessarily at all, but the British Government must provide an impetus for the Hong Kong Government to ensure that the people of Hong Kong are not obstructed in the essential process of taking control of their own affairs and lifestyle. If we do too much too soon, we could create instability, but if we do too little too late ultimate disaster could result.

I understand that the Chinese Government fear above all finding themselves in 1997 having to replace the British Government as the body which provides the leadership for Hong Kong. The best guarantee against that is to encourage the creation of institutions which will enable the people of Hong Kong to select, or elect, their own leaders. The method of doing that has to be worked out in the next few years. It requires an impetus. I urge my hon. Friend the Minister not to allow the Hong Kong Government to obstruct that process.

10.50 am
The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce)

I am grateful to my hon. Friend the Member for Bromsgrove (Mr. Miller) for raising this important subject again today. I am also grateful to him for his kind personal remarks. As a former member of the Hong Kong Civil Service, he speaks from deep personal experience in describing the anxieties that the Hong Kong people feel as they consider their future. In particular, my hon. Friend is perhaps uniquely well placed in the House to reflect the concerns of Members of the Hong Kong public service. I am glad that my hon. Friend the Member for Christchurch (Mr. Adley) was able to intervene, since he has taken an intense and close interest in the future of Hong Kong.

I shall endeavour in the few minutes at my disposal to comment on some of the points raised today. My hon. Friends will understand the constraints within which I can make my remarks as the negotiations are still continuing and the talks must remain confidential. There is obviously little that I can add to what my right hon. and learned Friend the Foreign Secretary said in the debate last week.

The debate last week rightly focused on the longer-term future of Hong Kong after 1997. I am sure that my hon. Friends were not expecting me to go over that ground again today. Much of what has been said today relates to the period before then. I should, therefore, like to take the opportunity of assuring the House, if assurance is needed, that we recognise that the administration of Hong Kong until 1997 should remain firmly a United Kingdom responsibility. We are committed to carrying out this responsibility in full. We shall continue to provide the framework within which the Hong Kong Government can administer the territory effectively and plan for its future. We are fully aware of the need to maintain in good shape the fabric of government in Hong Kong and all that that implies.

My hon. Friend referred to the vital need to maintain confidence in Hong Kong. The British Government are deeply aware of the need to sustain the confidence of the people in the period of change which lies ahead. I believe that this perception is shared by the Chinese Government. For our part, we are committed to maintaining confidence by working for a detailed, binding agreement to assure a high degree of continuity in Hong Kong's systems and lifestyle.

Confidence is, as my hon. Friend the Member for Bromsgrove implied, internally generated. Of course, we understand the anxieties of the Hong Kong people caused by their uncertainties about the future. The need to preserve the confidentiality of the negotiations also causes frustration. But I am sure that the Hong Kong people, who over many decades have shown an unusual degree of resilience, realism and determination, will face the future in the same constructive spirit.

Both my hon. Friends referred to the question of accountability. One important way in which we can contribute to the ability of the Hong Kong people to strengthen their autonomy and their confidence is through the evolution of representative institutions. Steady progress has already been made on this front in recent years. An elected element was first introduced into administration at the district level in 1982. Only last week plans to strengthen further the elective content of local government were announced in Hong Kong. This will be followed by a Green Paper this summer making proposals to develop the representative status of the two main central Government institutions—the Executive Council and the Legislative Council. All that will help to strengthen confidence, self-confidence and the autonomy of the people.

The British Government are grateful to the unofficial members of the Executive Council and the Legislative Council for their work. At that level the system is not representative. But the system has operated for many years under different Governments. The unofficial members demonstrate day after day a heavy sense of duty towards the people of Hong Kong.

My hon. Friend the Member for Bromsgrove rightly focused on the public service. I shall take this opportunity to say a little more about the public service since last week's debate did not cover that ground. I pay tribute to the sense of responsibility demonstrated by public servants in Hong Kong during these uncertain times. They have made and are making a major contribution to Hong Kong's development. I have the highest regard for their efficiency, to which the spectacular economic and social development of Hong Kong bears witness.

I can assure Hong Kong public servants that Her Majesty's Government are fully aware of their concerns and fears, both through regular reports from the Hong Kong Government and from representations from individual civil servants and staff associations. For reasons with which my hon. Friends will be familiar, I am not able to go into details now about the content of our talks with the Chinese in Peking, but the Government's aim is to maintain the maximum degree of continuity after 1997 in the public service as in other areas. That continuity would cover such aspects as the security of jobs, the payment of pensions and the preservation of conditions of service. These matters are of great concern to us in the discussions.

A community as sophisticated as that of Hong Kong relies heavily on the diverse and specialist skills of its public servants. The fabric of government is complex. Her Majesty's Government are determined to keep this fabric intact and to maintain the morale and efficiency of the public servants at its present very high level, so that the territory and its administration can pass smoothly through the period of change which lies ahead.

My hon. Friend the Member for Bromsgrove also referred to the importance of the maintenance of law and order. This remains a high priority for us. The assurance that I have just given in relation to the public service also covers the police. I hope that that goes far enough to reassure my hon. Friend.

My hon. Friend talked about the economic future of Hong Kong. I agree that one of the strongest aspirations of the Hong Kong people is to enjoy the continuity of their economic way of life. I am sure that my hon. Friend was right to draw attention to the fact that Hong Kong is an important economic regional centre. We hope that it will remain so. Important factors such as trade agreements with third countries — GATT, for example — are involved. Such arrangements are also part of the negotiations and, therefore, I cannot say much more about them, but they are important factors in terms of continuity and the way of life of the people.

My hon. Friend the Member for Bromsgrove, supported by my hon. Friend the Member for Christchurch, has done the House a service by raising issues in addition to those raised in the debate last week. As the House is aware, our aim can be simply stated. It is to make arrangements for a high degree of autonomy for Hong Kong under Chinese sovereignty after 1997. It is also to provide the greatest possible continuity of systems and lifestyle for the Hong Kong people. To that end we are working for a detailed and binding agreement with China that would enshrine such arrangements. Confidence has been a central theme of the debate. A satisfactory agreement along those lines is, I believe, the surest way to maintain the confidence of the people of Hong Kong and of those outside who trade and invest there.

I am extremely grateful to my hon. Friend the Member for Bromsgrove for raising this subject today.

It being Eleven o'clock, MR. SPEAKER interrupted the proceedings, pursuant to Standing Order No. 5 (Friday sittings).