HC Deb 04 July 1991 vol 194 cc450-8

4.5 pm

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd)

With permission, Mr. Speaker, I should like to make a statement on Hong Kong.

The British and Chinese Governments this morning issued a joint statement about the result of intensive discussions over the last few months on a new airport for Hong Kong. Sir Percy Cradock, the Prime Minister's personal adviser on foreign policy, visited Peking from 27 to 30 June for meetings with Chinese leaders and officials. Agreement was reached on the Hong Kong airport project, and the two sides initialled a Memorandum of Understanding. This will provide a firm basis for building a modern airport to serve the expanding needs of Hong Kong and the future special administrative region. The Chinese and British Governments confirm their wish to deepen their co-operation over Hong Kong within the framework of the joint declaration and their confidence in the future of the territory as an international economic, financial, and trading centre.

The statement was released this morning, because of the time difference with Hong Kong.

The text of the "Memorandum of Understanding concerning the Construction of the New Airport in Hong Kong and related Questions" has been placed in the Library of the House. The Chinese Government have invited the Prime Minister to visit China, and he looks forward to doing so soon, and to signing the understanding on that occasion. It will come into effect on signature. In the meantime, the Chinese Government have assured us that they will raise no objection to the Hong Kong Government proceeding with the most urgent work relating to the airport.

Much work remains to be done if we are to ensure a smooth transition in 1997 and to give the Hong Kong special administrative region the best possible basis for success after that. The Chinese Foreign Minister has agreed to the proposal which I made in April, that in future we should meet twice yearly to discuss Hong Kong and other questions. The meetings between the Governor and the senior Chinese official dealing with Hong Kong in Peking are also being put on a regular basis.

The conclusion of this understanding ends months of uncertainty about Hong Kong's airport project and settles an undoubtedly difficult problem in our relations with China. The Chinese Government have expressed in the clearest possible terms their support for the airport project and have undertaken to provide clear assurances to investors.

I am grateful for the invaluable advice which the Governor of Hong Kong and his advisers in the Executive Council have provided throughout the discussions. The Government believe that the outcome will be generally welcomed in the House, in Hong Kong and more widely. It should provide a fresh impetus to international confidence in the continuing success of Hong Kong.

Mr. Gerald Kaufman (Manchester, Gorton)

The officials concerned deserve credit for negotiating a useful agreement which removes doubt over a project which is of great importance to the future of Hong Kong. It is also right that there should be proper consultation on other issues which genuinely straddle the remaining period of British sovereignty over Hong Kong and the period beyond transfer of sovereignty to China.

It is, however, important that the concept of straddling should not be stretched to cover all other issues relevant to, Hong Kong over the next six years. Can the Secretary of State assure the House that the agreement is the only one of its kind that has been made, or is under discussion, and that if other agreements are to be discussed, the House will be informed of them in advance?

Can the right hon. Gentleman also give an assurance that the appointment of judges to the Court of Appeal remains the sole prerogative of the United Kingdom Administration in Hong Kong? Will he further assure the House that a decision on the Bill of Rights and progress on democracy in Hong Kong will rest solely with the United Kingdom Government and the colonial administration?

It is right and sensible that the maximum possible cordial and constructive consultation should take place over Hong Kong with the Government of the People's Republic of China, but it is important to reassert—as the Government have constantly asserted—that until midnight on 30 June 1997 the sovereign power responsible for Hong Kong and its people will remain the United Kingdom Government, responsible to this Parliament.

Mr. Hurd

I am grateful for the right hon. Gentleman's general tone. The Memorandum of Understanding, which is in the Library, sets out the total extent of our understanding with the Chinese Government in respect of the airport project. There are no secret annexes, papers, or agreements arising out of the airport negotiations.

As the right hon. Gentleman knows, the joint declaration provides for a Joint Liaison Group, which exists to thrash out practical problems that arise from time to time. There will be continuing discussion in that group on the various matters, such as questions of land sales, that regularly come before it.

In April, I was trying—and I hope that this can be achieved—to push forward the impetus of that work, so that a backlog of unresolved matters does not pile up in the way that occurred recently.

As for judges, no changes are envisaged to previous practice, which will be maintained as in the joint declaration.

Several Hon. Members


Mr. Speaker

Order. I apologise to the House for making a miscalculation over business questions, and ending them five minutes earlier than I stated that I would do. I will therefore give a free kick to those hon. Members who were not called during business questions, without any prejudice against them next Thursday.

Mr. Robert Adley (Christchurch)

Is my right hon. Friend the Secretary of State aware that those who are concerned with the welfare of the people of Hong Kong will wholeheartedly welcome the ability of my right hon. Friend and his colleagues to negotiate a satisfactory agreement?

Does my right hon. Friend agree that projects that cross 1977 are clearly covered in the 1984 agreement, but that we would be well advised to ensure, in everyone's interests, that where such projects are initiated there is the fullest consultation not only in Hong Kong but with the Chinese Government as well?

Does my right hon. Friend agree that the best interests of the people of Hong Kong are served when there are good relations between the British Government and the Chinese Government? In that regard, will my right hon. Friend accept my assurance that those who are concerned about that aspect will wholly welcome the news that my right hon. Friend the Prime Minister is to visit China, and that my right hon. Friend the Secretary of State will have twice-yearly meetings with his counterpart?

Mr. Hurd

I am grateful to my hon. Friend. I hope that we are back on course, in co-operation with China, in carrying out the joint declaration. It states that, in the second half of the period up to 1997, there will be a need for closer co-operation, which will be intensified during that period. At the same time, the joint declaration recognises—as the Chinese Government have publicly reaffirmed—that, until then, the Hong Kong Government retain the authority to administer Hong Kong effectively. Those are the two principles, and if right hon. and hon. Members study the Memorandum of Understanding, they will see that they are thoroughly carried through in what has been agreed.

Sir Russell Johnston (Inverness, Nairn and Lochaber)

Is the Foreign Secretary aware that it is a pleasure to be in a position to congratulate the Government on the outcome of the negotiations, and also Sir Percy Cradock, who played an important part in those negotiations? Will he convey to the Prime Minister the fact that many people feel that, when he goes to China, it would be desirable that he should tell the Chinese Government that there is considerable unease in Hong Kong about the future of free expression post-1997 and that the remarkable "two systems in one country" experiment will not work unless it is genuinely applied?

Mr. Hurd

I am grateful to the hon. Gentleman. When my right hon. Friend goes to the far east, he will discuss a whole range of matters, including many international matters, that arise because China is a permanent member of the Security Council, as well as a main player in the Pacific and in Asia. It will be a wide-ranging set of discussions. The Prime Minister and the Chinese leaders will undoubtedly range over the whole question of Hong Kong and the crucial importance of maintaining in practice as well as in words the principle of "two systems in one country."

Sir Peter Blaker (Blackpool, South)

When our right hon. Friend the Prime Minister visits China, may I express the hope that he will also visit Hong Kong? Such a visit would be extremely popular. My right hon. Friend and all the others concerned on the British side, including Sir Percy Cradock, deserve the greatest credit for their success in producing what appears to be a satisfactory outcome to this long-running problem. Is not the lesson of this story that patience and persistence are particularly important in discussions with the Government of China?

Mr. Hurd

I am grateful to my right hon. Friend. My right hon. Friend the Prime Minister certainly intends to visit Hong Kong when he visits the far east and Peking. I am grateful for the way in which the House has reacted so far to my announcement. There has been a bit of a knee-jerk tendency—not in this House but elsewhere—to treat any kind of understanding and co-operation with China about Hong Kong as some form of surrender. No one who has followed these negotiations could say that that is the course which has been followed this time. We came quite near to the point when everybody knew that the airport project might have to be postponed. That was a statement of reality, but it seemed sensible—obviously to both sides—before that stage was reached to make a final effort to resolve the difficulties that had persisted. I am very glad that that has been done.

Dr. John Marek (Wrexham)

Will the Foreign Secretary reflect on the fact that, although the announcement about the building of the airport is very welcome, it may have been bought at too high a price, in that the Chinese Government have not negotiated with or consulted the Government and, more importantly, the Legislative Council of Hong Kong? Does the Foreign Secretary agree that, if the joint declaration is to mean anything—that Hong Kong will have a large measure of autonomy—the Legislative Council of Hong Kong must be involved in these important negotiations? If he does, will he refer the matter to his right hon. Friend the Prime Minister so that, when he goes to China, he finds out whether consultation can take place between the special administrative region-to-be and the Poeple's Republic of China? That is the proper way to go forward.

Mr. Hurd

As regards the immediate agreement, I am glad to say that the members of the ExCo were fully consulted and fully agreed. The first reports coming in today of the public comments of the unofficial members of LegCo are overwhelmingly favourable, as are the comments from the business community. So far, so good. As the hon. Gentleman knows, in the autumn of this year Hong Kong will take a step forward, in the sense that 18 members of the Legislative Council will be directly elected by universal suffrage.

That arrangement had some critics. However, it will become increasingly realised, as it is understood, that renewal of whatever the right figures are for 1995 will go through in 1997 and will be respected by the Chinese Government and carried through, therefore, into the special administrative region government. Although that does not go as far as the hon. Gentleman would like, it will be a considerable change and one that looks a good deal more solid than it would have been if we had gone for a higher figure this year, which would probably have been swept away in the middle of the decade.

Sir John Farr (Harborough)


Hon. Members

Hear, hear.

Sir John Farr

May I congratulate my right hon. Friend on his successful efforts with the Chinese Government and may I especially direct my congratulations not only to him, but to all his staff who obviously worked so hard in such a persevering way with such a very difficult problem? Having said that, may I ask my right hon. Friend whether he will be a realist and realise that there is still a chance that the Chinese Government may see matters in another way? At this time, after my right hon. Friend's successful negotiations so far, would it not be advisable, before the hand-over date, to bring in the United Nations to underwrite any agreement that has been reached?

Mr. Hurd

I am grateful to my hon. Friend. It is a great pleasure to see him back in the House and looking so well. We have conducted this matter in a thoroughly realistic spirit, and the negotiations have been long—perhaps for that reason. However, I am very satisfied with the ultimate result. I do not pretend to my hon. Friend—or to anyone else—that the agreement will ensure that there will be no more problems and anxieties between now and 1997, because the effort that has to be made to bring about two systems in one country is extraordinarily difficult. I am not sure that the formal involvement of the United Nations would be helpful, but everyone knows that the success of Hong Kong is due to its international character. Many people are keeping a close and helpful eye on how the arrangements fare.

Mr. Max Madden (Bradford, West)

Can the Foreign Secretary say when the new airport is expected to become operational'? Is he confident that British firms will gain a reasonable share of contracts for that giant project? Is he aware that the BBC has reported that there has been an agreement that a minimum level of reserves will be left in Hong Kong in 1997 under the agreement? Has there been any clarification of a recent report that a senior Chinese Government official said that the Chinese Government were not bound in any way by any agreements that have been made, including the Bill of Rights, and that, as far as the Chinese Government are concerned, 1997 is a clean slate? Has there been any urgent clarification of that worrying statement?

Mr. Hurd

Those were three very relevant questions. First, the Hong Kong Government can now go ahead with the first work on the airport. The full agreement comes into effect when my right hon. Friend the Prime Minister signs it. The Hong Kong Government can go ahead with the immediately necessary work. I do not know exactly when the first runway will be operational. The original hope was that it would be operational before the transfer of power. That may still be so. However, those are now matters for the Hong Kong Government, and not for Her Majesty's Government. It is a fine project which has been carefully worked through, and it will be extremely impressive.

If the hon. Gentleman looks at the Memorandum of Understanding, he will see the undertaking: On the basis of the above understandings the Hong Kong Government will plan its finances with the firm objective that the fiscal reserves on 30 June 1997 to be left for the use of the Hong Kong Special Administrative Region Government will not be less than HK$25 billion. The present reserves are 72 billion Hong Kong dollars. It was thought by those who advised us that that was a reasonable undertaking. The Chinese are, of course, bound by the joint declaration, and they have frequently emphasised that fact. In the future, they will be bound by the Basic Law. As regards human rights, they are bound by the undertakings that both those documents contain.

Several Hon. Members


Mr. Speaker

I will endeavour to call the hon. Members who are rising, provided that they ask brief questions. I should like to start the next debate at 4.45 pm at the latest, because there is great pressure to speak in it.

Several Hon. Members


Mr. Speaker

I call Mister—what does he call himself? Mr. Morris. I mean Mr. Norris.

Mr. Steve Norris (Epping Forest)

Not for the first time, Mr. Speaker, but never mind.

I add my congratulations to those which my right hon. Friend has already received, and congratulate his team, too. Does not my right hon. Friend agree that, especially for the business community, the airport project has long been the litmus test of the warmth of the relationship with the People's Republic of China in general, and especially after 1997, and that the agreement therefore bodes well for business confidence not only in the colony but here, because if British firms are up to the mettle, they may be able to participate closely in the airport and other projects?

Mr. Hurd

The point has been raised before, and I did not answer it when the hon. Member for Bradford, West (Mr. Madden) raised it. It is important that there should be a level playing field and that those responsible for letting the contracts, who do not of course include Her Majesty's Government, should give a fair wind and equitable treatment to the bids put in by British contractors. I very much hope that British contractors and consultants will bestir themselves. They cannot expect business to be handed to them on a plate, and I hope that all those with influence in the matter will make sure that they are awake to the opportunities for British industry that this huge project affords.

What my hon. Friend said about the feelings of business men has been made clear to me many times over the months. They wanted an agreement, not just because of the importance of the airport but because, as my hon. Friend said, they saw it as a sign of whether or not there was good co-operation. But it did not seem to us that that feeling among the business community, which is entirely understandable, should make us short-circuit the negotiations or produce a result that would in some way weaken or reduce the authority of the Government of Hong Kong between now and the middle of 1997. That would have created new difficulties and anxieties in other parts of Hong Kong. We had to reconcile the two aims, and I think that we have now done so.

Mr. Roger Sims (Chislehurst)

My right hon. Friend will know that both Hong Kong and China have many friend on both sides of the House who will have been given great pleasure by his announcement. Does the agreement to which he referred also cover proposals for substantial increases in port facilities, which were an integral part of the original port and airport development strategy proposals? That is particularly important because Hong Kong is the gateway to south China and south China would benefit greatly from increased harbour facilities.

Does my right hon. Friend also agree—

Mr. Speaker

Order: I think that one question is enough on a day as busy as this.

Mr. Hurd

My hon. Friend will see an annexe to the memorandum which sets out the core programme projects —the projects that are already agreed without the need for further consultation. Other projects that straddle 1997 will be subject to the kind of consultation mentioned in the memorandum but will then be for decision as the joint declaration provides.

Sir Richard Luce (Shoreham)

I welcome most warmly the progress on the airport. May I congratulate my right hon. Friend and, through him, the Governor of Hong Kong, Sir David Wilson, on their robust leadership for the people of Hong Kong? Does he agree that the most important way in which to secure the long-term future of Hong Kong is the proper, full and effective implementation of the 1984 joint declaration, which provides for the full preservation of the freedoms of the people of Hong Kong?

Mr. Hurd

I agree entirely with my right hon. Friend. I am very conscious of the fact that the Governor and his advisers, rather than the Government here, have been in the hot spot. It was very difficult to handle these matters successfully—with a free press, free communications and free debate in Hong Kong—but they have done so through difficult negotiations and I congratulate them.

Mr. Michael Colvin (Romsey and Waterside)

Does my right hon. Friend acknowledge that in the current world recession, with civil aviation doing particularly badly, the one area of growth is still the far east, where Hong Kong provides a vital civil aviation hub, and that, in terms of business confidence for the future, the go-ahead for the airport was vital?

On the question of British contractors getting work, does my right hon. Friend acknowledge that there has been no shortage of British initiative in securing contracts to build the airport at Macau? I very much hope that British firms will be equally adventurous when it comes to securing contracts for the future building of Hong Kong's airport.

Mr. Hurd

My hon. Friend puts it very well, and I entirely endorse what he says.

Sir Michael Neubert (Romford)

Does my right hon. Friend agree that this very welcome settlement of the question of the new Hong Kong airport removes some significant obstacles to the development of our wider interests in the far east? As British Airways is keen to extend its service to Hong Kong and to Taiwan twice a week to compete with Cathay Pacific, KLM and with a subsidiary of Japanese Air Lines which already operate there, and as there is already contact between the Taiwanese and the Chinese, will my right hon. Friend facilitate our national flag carrier's application to operate there?

Mr. Hurd

I detect a difficulty in that question. I think that I had better not answer it off the cuff. Either I or my right hon. Friend will write to my hon. Friend.

Sir Giles Shaw (Pudsey)

May I add to the congratulations on my right hon. Friend's achievement from patient diplomacy. Has there been a genuine change that leads him to believe that patience and diplomacy are now recognised by the other side as the proper way to proceed?

Mr. Hurd

This is an example of how patience overcomes obstacles. We can all draw lessons from the exchanges and difficulties and the way in which we have solved them.

Mr. Ian Taylor (Esher)

As a member of the Select Committee on Foreign Affairs when it reported on Hong Kong, I know exactly how important the project was, both politically and economically. My right hon. Friend the Foreign Secretary deserves credit for the perseverance shown in ensuring that the deal is the right one. Will he also note that it was clearly shown in the joint declaration —which I understand has the status of a treaty in the United Nations—that Britain has a responsibility to ensure that Hong Kong has economic prosperity and social stability by 1997, and that that means working in close co-operation with the Government of China to ensure that end? Is that now recognised by the Government of China, and do they recognise also their responsibilities to ensure that there is a stable economic system through 1997?

Mr. Hurd

I believe that those points are understood. We must now develop ways to intensify the co-operation. I believe that we now have a much better chance cif doing that without people feeling that in some way the authority of the Hong Kong Government between now and 1997 is being undermined.

Mr. George Walden (Buckingham)

I hope that my right hon. Friend will not take it amiss if I say that, although I congratulate him on the achievement of this solution, one must say frankly that it is a deal that we would have preferred not to have been obliged to conclude. I believe that my right hon. Friend will agree that the House will inevitably face a conflict between Chinese power and British responsibility as 1997 approaches. I hope that he also agrees that the Chinese should not draw the conclusion from the agreement that they should seek to interfere further because that would damage the interests of Hong Kong and of mainland China.

Mr. Hurd

I do not think that they will draw that conclusion from the way the negotiations have progressed. We are faced with a huge project that required perhaps one quarter of its finance from private investment. It was simply a fact—we have to deal in facts—that that investment would not have been forthcoming unless there had been some Chinese acquiescence in the project. That is a fact. We have got more than some reluctant acquiescence: I would say that we have full-hearted approval of the project. Although it is certainly a deal, like most of these practical arrangements, it is a deal that is overwhelmingly in the interests of Hong Kong.

Sir John Wheeler (Westminster, North)

Will my right hon. Friend add my warm congratulations to the roll call of approval this afternoon? Does he accept that the agreement will do much to sustain the confidence of the people in the long-term future of Hong Kong, thus rooting them in their country and giving them the expectation of a reliable future?

Mr. Hurd

There will be prickly problems ahead, as my hon. Friend suggests. However, we can tackle them through the machinery now in place, which has been strengthened as a result of the Memorandum of Understanding. We can tackle them with a better chance than we had before of finding the right kind of answer.

Mr. Bowen Wells (Hertford and Stortford)

I also congratulate my right hon. Friend on this understanding. What kind of an airport have we agreed to? Is it a much smaller airport? Does it have the port facilities, factory sites and highways that were originally envisaged? Did my right hon. Friend or anyone else consult the two legislative assemblies—the Executive Council and LegCo—on the issue before the understanding was reached?

Mr. Hurd

If my hon. Friend looks at the annexe to the Memorandum of Understanding, he will see the main projects of the core of the airport and that it is basically the project that was originally designed. It is a major airport and a major project, but the details and the decisions are not for the British Government; they are for the Hong Kong Government.

On my hon. Friend's second question, ExCo was fully consulted and unanimously approved. One cannot consult LegCo on confidential negotiations but, as I have said, it appeared from the tapes this morning that the initial reaction of Unofficial Members is favourable.

Mr. Anthony Coombs (Wyre Forest)

In recognising the crucial importance of this agreement for confidence in Hong Kong and for the future economic growth of that area, does my right hon. Friend see that as further evidence of a greater identity of view and sense of co-operation between the permanent members of the Security Council —an identity of view that could be used to great effect in other parts of the world where there are regional problems, such as the middle east, the Horn of Africa and Cyprus?

Mr. Hurd

Like others, we have found that it is now much easier to discuss wider international matters with the Chinese Government than it used to be. There is plenty of scope for that—for example, the issue of arms control and the criteria for exports of weaponry are important subjects in which the Chinese have an important role to play.

Mr. John Browne (Winchester)

On a point of order, Mr. Speaker. Will you confirm that, in keeping with the fine traditions of this House, under which you have a tricorn hat, wig and gown, it is in order for me to wear a hat, provided that I remove it when addressing you? Will you also confirm that my wearing it will not in any way curtail the democratic voice in the House of the people of Winchester?

Mr. Speaker

Yes, that is the democratic right of the hon. Gentleman. It is a long tradition. In centuries past, hon. Members frequently wore hats. The trouble is that if an hon. Member wears a hat, it is difficult for me to recognise him [Laughter]. That is the problem.