HL Deb 24 February 1981 vol 417 cc1032-50

6.49 p.m.

Lord Brockway rose to ask Her Majesty's Government whether they will appoint a Royal Commission to survey the unique social and political problems of Hong Kong and to make recommendations regarding its future.

The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I must acknowledge that I have never been to Hong Kong. Yet I feel that I know it as well as I know London. That is because for over 15 years I have had continuous correspondence with knowledgeable people there, not only those engaged in politics, but in the social life of the people; for I have received many communications from different organisations, have met their deputations when they have come to this country, and have learned much from the official reports which the Hong Kong Government have issued. I pay my tribute to their factual information.

My purpose tonight is not to criticise those who are responsible for conducting the administration in Hong Kong. I do not know in any country so many difficulties and complexities as they have to face. What I am seeking to do is to suggest that those problems are so great that we should ask the highest advisory authority in our constitution to consider them and to advise us.

In my Question I describe the social and political problems of Hong Kong as unique. I think I shall be able to show that they are. They are due to the fact that Hong Kong is poised in a situation of relationship with China and uncertainties about its own future. After the two opium wars in 1840 and 1860 treaties were signed which designated Hong Kong in perpetuity to Britain. China declares that they are invalid because they were imposed in those circumstances. I think it undoubted that, if that issue went to The Hague Court of International Justice, the court would agree, because of precedents which have occurred, that those treaties are invalid.

But the situation in Hong Kong does not rest merely on those treaties. In 1898 Britain leased from China the great area of New Territories, and that lease ends in 1997. I think it is generally acknowledged that Hong Kong could not be maintained without those New Territories. Therefore, in 16 years at most the momentous decision has to be taken whether Hong Kong is handed back to China or whether it remains in British occupation. Sixteen years is a short time for the conditions which would arise in either case. A decision cannot be delayed because of the consequences for the population of Hong Kong and its economy. The Financial Times has suggested that a decision should be made by 1985—four years away. The Executive Director of the Hong Kong Chamber of Commerce, Mr. J. McGregor, says that a decision must be made by 1982 at the latest. He points out that unless there is an early decision there will be a reduction of foreign investments into Hong Kong and there will be an outflow from Hong Kong of capital and expertise.

I want to look for a moment at the alternatives when a decision is reached. Is it to be a reversion to China of Hong Kong? If so, there will be immense problems of economic transference in handing over the great businesses in Hong Kong to a Communist régime where control would be so different. And there will be not merely the problems of the economic conditions but of the population. A large part of the population would not wish to pass into Communist China. A very large proportion of the population are British citizens with British passports. Where are they to go? These are problems on which we want the greatest investigation, consideration and advice.

The second alternative is that British occupation of Hong Kong should be maintained. When we consider that, we have to appreciate that China does not recognise Hong Kong as a British colony. It is their view that it is an integral part of China and that it will be taken back "when the time is ripe". I appreciate that recently there has been a statement from Peking that Britain and China, "must maintain the status quo to their mutual benefit". Clearly Hong Kong under its present administration is advantageous to China; first, because many external relations are conducted through Hong Kong and, secondly, because it is the means of acquiring foreign exchange with which to purchase goods.

But I want to ask this: if Britain is to maintain its occupation of Hong Kong does "status quo" as used by the Chinese mean that the present régime in Hong Kong is to be maintained? I want to suggest that the closest possible inquiry should be made to discover whether that is possible and whether it is desirable. Because of our relations with China, in Hong Kong there is no democratic self-government. If it had been a normal colony, its people would have had self-governing independence 20 years ago. But because of the relationship to China and the undemocratic system that there is in China conditions in Hong Kong deny the very beginnings of democratic self-government.

Let us just look at the administration. At the top there is a Governor with a legislative council and executive, and with advisory committees to make recommendations. Not one member of those bodies is an elected person; they are either civil servants or nominees of the Government, and perhaps it is inevitable that in Hong Kong the nominees should be a privileged élite—businessmen and landlords—and that in the advisory committee they should be lawyers and professionals. It is impossible to describe the gulf between those who are responsible for the administration of Hong Kong and the people themselves. All of those in the legislative council and the advisory committees are supporters of the Administration. No critics are permitted to enter them. There is nothing of the kind of democratic discussion which there is in the parliaments of democratic countries.

Below that top level is the urban council with 12 elected and 12 nominated persons. The franchise is ridiculously small, representing only 10 per cent. of the population, and the jurisdiction of the urban council is no greater than that of a parish council in this country. It is limited to recreation and culture and to very restricted aspects of health. I recognise there is now a proposal for district boards with a wider franchise. That will allow a marginal unofficial majority after 1982, the first occasion when there will ever have been an unofficial majority on any administrative body. But that recognised, the whole structure of Hong Kong denies democracy in the determination of the status and conditions of life of the people.

Inevitably there has grown up in Hong Kong a large number of pressure groups demanding change; there are community associations, professional organisations, Christian committees, conservation associations and students' unions. The present Government of Hong Kong have just had an inquiry made by the Standing Committee on Pressure Groups. I have asked the noble Lord, Lord Trefgarne, for a copy of its report, but he has courteously replied that it is not possible for me to see it because it is classified. Nevertheless it has been leaked and I have seen its contents, and large extracts have been published in this country in the New Statesman and in many papers in Hong Kong.

The report denounces the leading pressure groups, including the Hong Kong Christian Industrial Committee, and calls for Government action, expressing fear of "Communist infiltration", a phrase which amuses me when Hong Kong is so much dependent on Communist China. This suggests that there is not only an absence of democracy in the Administration but an actual discouragement of democratic expression by the people. That is the heart of the problem—the gulf between the Administration and the people—and the Administration is manned by a distant privileged élite with no contact with the masses of the people. The people live in a different world. That applies not only to the governmental administration but to the judiciary. Hence we have the helplessness of so many of the bewildered people who are charged, and I have had particulars of many cases.

So much for the Administration. The political conditions are paralleled by the social conditions; the crowded conditions of this restricted island, made more difficult by the illegal immigrants from China and the boat people from Vietnam, mean great problems. There has been a very ambitious housing programme, with tall buildings in which thousands have been housed. I recognise that, but I am receiving reports of serious, sometimes inhuman, overcrowding in the small rooms of those great mansions, and there is now widespread recourse to ramshackle huts and squatters groups are growing.

The Government, to raise revenue, are now selling land at thousands of dollars per square foot, leading to the eviction of people from their homes and small businesses. Speculators are buying and rents are increasing, so that neither people in their homes nor small businesses can possibly afford them. Taxation is low for the higher income brackets; but the salaries tax begins at a low level, so that even married labourers have to pay tax. There are no unemployment benefits, although the number of unemployed is growing and is now estimated at 200,000. Labour laws in Hong Kong have lagged behind international standards for 30 years, and even when laws are passed the departments lack the personnel to enforce them; the prohibition of child labour and safety regulations in industry and construction are an example. Human rights are denied, as a report to the Human Rights Committee of the United Nations by distinguished citizens showed. There is an agreement with the Chinese to control illegal immigration, but what is to happen to the 22,000 boat people from Vietnam who are now living in camps and who are allowed six-and-a-half square feet of space per person?

Those are some of the many problems in undemocratic Hong Kong. Some are outside internal responsibility; most are the consequence of an undemocratic society, which is maintained because of the different régime in China. I do not base my indictment on criticism of those responsible for the Administration, but on the undemocratic system of administration itself. And I seriously ask whether we should continue to be responsible for conditions which deny all our values of liberty, as we shall be compelled to do if we maintain the status quo, the present relationship, with China.

Therefore I suggest that this colossal dilemma requires immediate consideration by the best minds at our disposal. Do we withdraw in 1997, or should we maintain a régime which is alien to all our conceptions of liberty? It is an immense issue, but we are rich in ability and in experience, and we have in our present Foreign Secretary, the noble Lord, Lord Carrington, a man of reconciliatory and constructive approach.

We recently sent to Hong Kong 14 parliamentary representatives to investigate the operations and living conditions of the armed forces garrisoned there. That was to be welcomed, but as I have indicated, there are much more formidable issues to be resolved. I suggest a high-powered Royal Commission to advise what should be done. I hope that the Government will accept that suggestion.

7.13 p.m.

Lord Goronwy-Roberts

My Lords, we are all very grateful to my noble friend Lord Brockway for raising this Question. This is a matter not only of importance to the wellbeing of the people of Hong Kong, but also of far-reaching importance to the relations between this country and the People's Republic of China, and therefore to the whole balance of future relations between the West and China. So whatever we say or do about Hong Kong has an impact beyond the Crown Colony itself. I am bound to say that while I sympathise very strongly, as I always do, with my noble friend's passionate convictions about the need to improve the lot of the people in our few remaining dependencies, frankly in what he said I did not recognise a complete and true picture of what Hong Kong is like today. I was the Minister responsible for our relations with China and with Hong Kong, and as my noble friend Lord Rhodes—who has worked so hard and contributed so much to Anglo-Chinese understanding—will readily agree, it is impossible to talk about Hong Kong without weighing very carefully the facts, the figures and the reality of what has been done in Hong Kong, what is being done in Hong Kong, and what needs to be done in Hong Kong.

We could all agree that much remains to be done in Hong Kong, as indeed in a great many parts of Europe and beyond the Urals, but in all fairness we must also agree that a tremendous amount has already been done in Hong Kong, especially during the last crucial decade. I pay tribute at once to that great Pro-Consul, Sir Murray MacLehose, whose leadership and wisdom have stood the people of Hong Kong in great stead, and whose action has always been dictated by the need to maintain a balance of understanding, indefinable but real, between us and the People's Republic.

The story of Hong Kong is in fact one of unique achievement, especially in the four major social areas: improving social conditions, in particular in housing—and I propose to give a few details about what has been done regarding housing in Hong Kong; improving labour conditions; maintaining and expanding employment; and eradicating corruption. All of that has been achieved despite the extraordinary difficulties which face its people and its Government My noble friend was fair enough to refer to those difficulties, and indeed they are mountainous.

Of course, the basic problem has always been that of a rapidly rising population in a tiny land area, with today over 5 million people occupying only 400 square miles. It is almost as though the population of Scotland were crammed into the county of Surrey. In fact Hong Kong is one of the most densely populated territories in the world, if not the most densely populated territory among the other most densely populated territories. Moreover, what land there is is unproductive mountain land. Only a tenth of it is farmed, or is capable of being farmed, and its mineral wealth is almost negligible.

Nevertheless the present Government in Hong Kong, the present system in Hong Kong, has assembled a workforce numbering 2¼ million people. Its unemployment is actually lower than that of most of the developed countries of the West. It may be rising, but in what country is it not rising during a period of deep recession? Its gross domestic product, its fixed capital formation, its attraction of investment, its overseas trade, its wage levels, and its social services have shown substantial increases over the testing years of the past decade. We should always remember—and here again my noble friend was fair enough to draw our attention to the point—that Hong Kong has had to cope not only with a rapidly rising population, but also with large-scale incursions of illegal immigrants. I recall dealing with this problem when I was a Minister. In one year it reached the figure of 100,000; the adding of 100,000 new mouths to feed, new hands to employ, new persons to house, to an already burgeoning population; but the Government, I believe, coped extremely well with that terribly difficult situation.

Government expenditure in the four key areas of social services—education, medical and health services, social welfare and labour—has increased more than fivefold in the past 10 years. Of what other country in the world can that be said? Whatever may be the system of taxation in Hong Kong, in the past 10 years they have contrived to spend five times more on those things that I and my noble friend hold most dear: education, medical and health services, social welfare and labour.

As I saw for myself when I visited Hong Kong more than once, the progress made in housing and rehousing the teeming millions has been nothing less than spec- tacular. Of course, with their increase in population, natural and incursive, however fast you build you are going to find families living on top of each other. We have that in this country, especially under this Government. But I repeat that the progress has been spectacular. The Hong Kong housing authority is the world's largest landlord. More than 40 per cent. of its people now live in public housing, and by the end of the 'eighties this figure will have reached 60 per cent. The rents are low, usually rather less than 10 per cent. of income.

In the field of education—and I was delighted to be part of this movement forward in the years between 1974 and 1979—free compulsory education has been extended to all children up to their 15th birthday. How recently was it that compulsory education up to the age of 15 was enacted in this country? It was not so very long ago. Technical and university education is increasing steadily. As to health care, the expectation of life in Hong Kong is about the same as in the United Kingdom. Its infant mortality rate is now a little lower than ours. These are not the results of a repressive, illiberal, anti-social Government: these are the results of humane, wise and dedicated devotion to the interests of the people of Hong Kong.

Provision for old age and unemployment still remains uninsured, and here I will join hands with my noble friend and say that it is time that social benefits of that kind were in fact nationalised. There is no ideology in this. Unless you have a system of insured social security, you are hound to have the dreaded and hated means test. I commend the point once more to the Government, as I commended it to the Hong Kong Government more than once during my tenure of office.

As to labour legislation (my noble friend was very critical of this, and I was surprised to hear him being quite so critical) 42 of the International Labour Organisation conventions have been applied to Hong Kong. This is a record which compares very favourably with that of any other neighbouring Asian country, including Japan, which has notched up not 42 but 36. So Hong Kong is leading the league in its attempt to apply International Labour Organisation standards to the treatment of its labour force. There have been very marked advances, as I have seen, in the control of employment of young children, which in the past was a dreadful blot on the life and system of the colony; in improving maternity leave benefits; and in improving employment safety regulations. A good deal remains to be done, of course, but let us remember that against a mass of difficulties—of unique difficulties—a tremendous lot has been achieved. In another important field—that of the eradication of corruption—it is now generally recognised that the back of syndicated corruption has been broken. The independent commission against corruption has done magnificent work under the inspiration of the Governor and the courageous leadership of Sir Jack Cater, the present Chief Secretary. This should be placed on the record, too.

On democratisation (or, as our Chinese friends in Hong Kong and on the mainland would say, on participation), on the question of democratic participation, I agree with my noble friend that progress has been too slow. I was continually pressing for stronger and quicker action in this direction, but always mindful of the fact that our Chinese friends see democracy in a rather different light from ours. They are more concerned with participation. There are their mutual aid committees. I sat in on the meeting of one of these excellent local committees. As to freedom of expression, really, with a free press and complete freedom of expression within those local communities and wherever I went, I really do not recognise the picture that my noble friend has painted.

Now they believe in participation; that is, in people coming together and discussing. The formalities that we have recently grown up with—the ballot paper, the secret ballot and so on—are recent graces in the democratic life of this country. It was non-existent up to 1832; it only really got going in 1885; and women were shut right out of it up till 1918, and were let in only by a kind of odious age selection after that. That is only 60 years ago. The Chinese approach this rather differently from ourselves. That does not excuse any unwillingness by the present Government in Flong Kong to extend the opportunity of participation, so that the Chinese majority are increasingly drawn into the institutions of government and administration. I believe they are, but far too slowly.

There has been progress at all levels, from the legislative and executive councils down to the district councils. More and more Chinese have been brought in; and certainly it is of importance that the Chinese who are brought in at various levels are properly qualified to do the work, because it is very hard work, very responsible work, that they do. We have the White Paper of January of this year, proposing directly-elected members of the urban district boards, and our own Home Office, I understand, is advising on electoral procedures. I put in the caveat once more that, while Home Office electoral procedures in the United Kingdom may in our eyes be perfect, or capable of perfection, by the time they are applied in Hong Kong, or indeed in Africa, they may need to be modified somewhat without impairing their essential, democratic purpose.

The reasons for all this progress—and it is real progress—are not far to see. I have mentioned the wise and humane leadership of Sir Murray MacLehose, who, against his own inclinations of comfort and interest, has twice agreed to extend his period of governorship. He has been aided by some remarkable men and women, British and Chinese, and indeed he and his assistants have identified the targets of opportunity. For instance, although it is physically impossible for this colony to feed more than a very tiny proportion of its population, its fishing industry, with 5,500 boats employing 36,000 people, meets more than 90 per cent. of its local fishing needs.

Where it is to be got, this colony (with very few resources) goes out and gets it. They make the best of what they have. Of course, it has major assets in its sheltered harbour, the only developed deepwater port on the Chinese coast and for a long time its main activity as a colony was trade. But, as that ceased to be its major occupation, the present Government and their immediate predecessors saw to it that not only service industries and tourism were rapidly developed but that manufacturing industry, which depends almost exclusively on the attraction of investment—and I want to make a point about investment in Hong Kong in a moment—should be developed. Today 45 per cent. of the activity of Hong Kong is in manufacturing—and in the manufacture of goods of a very high quality and not so cheap either. The old legend, "Made in Hong Kong", representing, therefore, shoddy and cheap, has disappeared. This is now a major manufacturing country producing goods which compete with the best in the rest of the world.

All this progress depends upon investment and investment depends upon stability. Stability and confidence in the future are the essential needs of Hong Kong—not just for its well-being but for its survival. Here my noble friend is absolutely right. We should, with due expedition, proceed to talk to our friends in Peking of the future, beyond 1997, when the present constitutional arrangement—if they will permit me to call it so—ends. It is essential that a feeling of stability and of confidence for the future should be sustained by friendly talks conducted, without a sense of strain and, certainly, without a sense of hostility, over the next few years. I do not share my noble friend's feeling that it is quite as chronologically urgent as he puts it; but that is a matter of opinion. I think there is time so that we do not have to rush things. This is not the Chinese way. They are, above all, a patient people. They wait and think so that their actions at the end of their thinking are all the more effective. We should emulate them in this—we are quite capable of doing it—and talk to them gently and gradually without rushing things as to the future; so that investment can see the possibility of increase without the possibility of failure after commitment.

Stability, in part, depends upon the wisdom and ability of the Hong Kong Government and, indeed, of the leadership in Hong Kong generally, which is both Chinese and British. I am thinking of the trade union movement, the great mass of which is led by Chinese and without the goodwill of whom you can do nothing. In part, it depends upon the wisdom and ability of its own leadership and in part on the continuation of the constructive understanding that marks the attitude of the People's Republic of China. It is very difficult to define this understanding but it is a practical fact and it is sustained—if I may repeat this; and I hope my noble friend will acquit me of presumption when I say this—by the highly intelligent visits which are paid by eminent parliamentarians and businessmen from this country to Peking and the talks that then take place between the two sides. My noble friend Lord Rhodes has so far led three such delegations—

Lord Rhodes

My Lords, it is two, going on for a third.

Lord Goronwy-Roberts

My Lords, I know the results of those and so, I believe, does the present Foreign Secretary. We owe a great deal of gratitude to my noble friend Lord Rhodes for the practical efforts he has made to sustain this precious understanding between us and the vast and potentially powerful People's Republic of China.

Both as a former Minister and now speaking from this Bench, I would not wish to define the under- standing. It is, as I have said, a practical fact which in word and deed we all have a duty to sustain. If we do so, the future of Hong Kong and the wellbeing of its people will be assured whatever form of government may evolve. But, even more important than that, the excellent relations which are now growing between this country and China and which have implications of growing hope and strength for Western democracy will also be strengthened. I end as I begin. In considering Hong Kong, we must consider the Chinese dimension at all levels. I hope that this debate, for which we are grateful to my noble friend for inaugurating, will help to remind us of that extremely important fact.

7.37 p.m.

Lord Campbell of Croy

My Lords, we are grateful to the noble Lord, Lord Brockway, for giving us this opportunity to discuss Hong Kong and, of course, as the noble Lord, Lord Goronwy-Roberts, has said, our relations with China, which inevitably arise on that subject. The noble Lord, Lord Brockway, gave us his sincere impressions from correspondence over years with residents in Hong Kong. He spoke of a gulf between the Hong Kong administration and the people. I wish that he had visited Hong Kong—he told us that he never has—because I think lie would have formed a somewhat different view and that he would accept the astonishing achievements of the Hong Kong community, administration and people, against a background of pressing problems caused by hosts of refugees and the density of the population.

How and why Hong Kong exists and flourishes is often a puzzle to observers. It is a world phenomenon. It is the product of a century and a half of trading, of British administration and pressures from and within China. People who have never been to Hong Kong often ask: how can over five million people live in such a small area and flourish? And that area is largely swamp and steep hillside. The fact that they do flourish is a triumph of determination, enterprise and hard work. Another question which is asked is this. At a time when most colonies in the world have disappeared, how is it that Hong Kong still has colonial status although it is a flourishing, successful, up-to-date community? My answer to that would be that there is quiet agreement among those most concerned to preserve stability. The Chinese Government in Peking would view with some concern a third Chinese Government in the Far East—for that is what Hong Kong would produce if it became self-governing. And, of course, the second Chinese Government is in Taiwan. There is also the lease of the New Territories to be considered; so that we have the paradox of a colonial system when the United Kingdom is handing over independence to colonies and keen to hand over to other dependencies when they are ripe for it. It is a paradox because Communist governments do not normally favour the continuation of colonial régimes.

However, clearly the Peking Government does acquiesce in the situation. The present constitutional arrangements seem the best to meet the interests of the Government of China, the United Kingdom Government and the population of Hong Kong. Indeed Peking would be disquieted—even alarmed—if the British Government were to initiate steps towards a new independent state. So, Hong Kong continues as a Crown Colony with a governor and council. I think the noble Lord, Lord Brockway, accepted the reasons for this as I have described them. I think I detected that he understood that.

Within that system there is the urban council dealing with local district affairs and recently there have been two White Papers, to which I draw attention, on proposals for improving local district administration. The fact remains, though, that Hong Kong has colonial status and a non-elected Government. It is the relationship with China which is the prime factor. For years, Hong Kong has provided important services for China, for example in trade and foreign currency. In return, Hong Kong buys water and other supplies from China. In the past five years, as relations between China and the Soviet Union have worsened, Hong Kong's role has become even more important to China. The help and advice of industrialised countries in the West is needed too. Hong Kong is the natural channel for such services and it is also a vital source of entrepreneurs' skills. More than ever the interests of China and her improving relations with the West converge with the economic well-being of Hong Kong. China increasingly needs the services which Hong Kong can provide.

In recent weeks it has become apparent that the Chinese Government are feeling the effects of the world recession and that they may have been trying to do too much too quickly. Retrenchment has therefore been announced in Peking where some of their projects for the future are concerned. Bonds none the less continue to be forged with Western countries. That is good news for Hong Kong. For its part, Hong Kong seems able to meet increasing activity and demands for services. That is good news for China. The Government in Peking have been turning to the West for technical expertise and, within present economic constraints, would like to order plant and equipment for projects from the West. Here are opportunities both for Britain and for Hong Kong. As a result of recent and new contacts with Westen countries, the Peking Government are aware that numbers of English-speaking visitors have been coming to their country. These visits are likely to be mutually beneficial. This is where I have been involved in a very small way, and I shall outline how because it is a good illustration of the trend which I am describing.

The Chinese Government have requested the Thomson Foundation to be consultants in starting a new English language daily newspaper in Peking. I am a trustee of the Thomson Foundation. I would point out that it is distinct from the Thomson Organisation. The Foundation was established by the late Lord Thomson (Roy Thomson as many of us knew him) about 16 years ago. Its purpose is training and education in journalism and television for countries which can benefit. The Chinese appear to have made their request because the Chinese Government feel the lack of a daily newspaper in the English language. I have a quotation from the Minister responsible in the Chinese Government. What he has said about this is: We hope to make the English language paper a success, so that our friends abroad will better understand China and China's views about major world issues". Our team went to Peking last month and they have started an editorial training course there. I saw two of them in Hong Kong when I was there before Christmas. They were instructing at a course for Hong Kong journalists. The first issue of the new newspaper is expected early in May. I have in my hand the first dummy of the paper, which will be called the China Daily. That is a very tangible new link between China and the West.

In the relationship between China and Hong Kong we have to take into account the difficult matter of illegal immigrants. Hong Kong has absorbed huge numbers of refugees, including a considerable number of Vietnamese boat people. But there is a limit to the numbers that can be absorbed. There is a real danger that this small area could be swamped by refugees and illegal immigrants. The British armed forces, including the Gurkhas, have had the unenviable task of catching intruders—mostly at night—with very long and uncomfortable hours. The soldiers who have been carrying out that task have done so with fortitude and good humour. I hope that I shall not be regarded as partisan in saying that, because the British battalion doing the two year tour of service there now with the Gurkhas is the regiment from northern Scotland where my home is, the Queen's Own Highlanders. That job has fortunately become less arduous recently because of the change of policy last October, when the Government in Hong Kong decided to drop the principle known as "touch base". That is to say, if an illegal immigrant were to become established in a household with an address, he could then be issued with an identity card. Now illegal immigrants will be returned when apprehended, even if they have found themselves an address in Hong Kong.

I am told that the result is that before October the average of illegal immigrants being caught was about 260 a day; it is now about 20 a day. This is important because it is an example of the armed forces of Britain working with the Chinese border forces, mainly in the interests of Hong Kong—because it is Hong Kong which will suffer if swamped by refugees. I should like to join with the noble Lord, Lord Goronwy-Roberts, in paying tribute to Sir Murray MacLehose, the present governor. I point out that not only has he been asked to extend his term there but his predecessor, Sir David Trench (and I remember visiting Hong Kong when he was in office) also had his term of office extended as a result of pressure within Hong Kong. On the occasions when I have been in Hong Kong under both governors it has been the Chinese, not in the Administration, but the Chinese people living there—and I address this particularly to the noble Lord, Lord Brockway—who have been saying to me: "We want the governor to stay on, and we hope his term will be extended". That is hardly the kind of request one would get from people one met casually if there was this great gulf between Administration and the people, despite the anomalous colonial status.

I have described the developing co-operation between China, Hong Kong and Britain. Of course, the question of what is to happen in about 16 years' time, when the lease of the New Territories is due to end, is a very important matter. But neither on this nor on the conditions, social, welfare and housing, in Hong Kong can I agree that a Royal Commission would be appropriate. A Royal Commission would take at least three years to report, and probably more; and the situation is continually changing. The United Kingdom Government, in close concert with the Hong Kong Government, should, in my view, seek at a time of its own [...], to reach an understanding with China on the [...] of Hong Kong. The prospects are good because China and Hong Kong need each other as partners. The prospects are good because relations between all three are improving. The fostering of good relations and the recognition of the joint interest of the three parties is the principal task ahead and not the panoply and procedure of a Royal Commission. While, therefore, I acknowledge the concern of the noble Lord, Lord Brockway, and his very sincere feelings about the conditions that have occurred in Hong Kong from time to time because of the impossible numbers of refugees who have arrived, I cannot support his proposal for a Royal Commission.

7.51 p.m.

Lord Rhodes

My Lords, I welcome this debate and I congratulate the noble Lord, Lord Brockway, for having initiated it. I am only sorry on one point, and that is that I never asked him to go with me to China and Hong Kong in 1979 or 1978, and in April this year when I am asked by the People's Republic of China to go again.

Sometimes I think we are an arrogant lot to think, as we have done, that we can take our Westminster form of government all over the world to other colours and other cultures—one of the biggest myths that has ever been exploded in this century. I remember going with the right honourable Walter Elliot on a mission to Africa to present a mace on the hottest, most sweltering day I have ever known, with the Speaker and all the ancillary workers, with full-bottomed wigs, sweating it out. Where is the mace today? Nobody knows. And that has happened on so many occasions. Sometimes we get pontifical about the way in which other people should run their affairs; and this is one.

In my opinion there are three factors affecting Hong Kong: first, Hong Kong's relations with China, and particularly with the Kwangtung province which is contiguous to it; secondly, Hong Kong's relations with the United Kingdom; and, thirdly, Hong Kong's ability to cope with the requirements of and to provide employment for a younger, better educated and more sophisticated generation.

To understand the problem and the importance of strong and friendly ties with China, which has been so persuasively argued by participators in this debate, I think one must just look at the past and weight it up. We in Britain hold that the few square miles of Hong Kong were ceded to us in perpetuity by China under the Treaty of Nanking in 1842. A further few square miles of the Kowloon peninsula on the mainland of China were conceded as a colony in the Convention of Peking in 1860. In 1898 an additional 365 miles of the mainland and some 230 contiguous islands, constituting the New Territories, were leased by China to the United Kingdom for 99 years. So we contend that we have Hong Kong Island, a bit of the Kowloon peninsula in perpetuity, and that China holds the remainder of the colony but will not exercise effective sovereignty over it until the New Territories' lease expires on 1st July 1997.

But China takes a different view. China says that the agreements were made under duress when China was unable to defend herself. This came out clearly at the United Nations in 1972 when Mr. Huang Hua, the present Foreign Secretary in Peking, was permanent representative of the People's Republic of China at the United Nations. He said this—and it is as well for everybody to get it right into their heads: Hong Kong and Macau are part of Chinese territory occupied by the British and Portuguese authorities. The settlement of the questions of Hong Kong and Macau is entirely within China's sovereign right"— you will notice there was no mention of a Royal Commission— and does not at all fall under the ordinary category of 'colonial territories'. … The United Nations has no right to discuss these questions. For the above reasons, the Chinese delegation is opposed to including Hong Kong and Macau in the list of colonial territories covered by the declaration and requests that the erroneous wording that Hong Kong and Macau fall under the category of so called colonial territories 'be immediately removed from the documents of the Special Committee and all other United Nations documents". That needs to be remembered when we talk about future policy for Hong Kong. I reiterate what other people have said about the necessity for goodwill and the building up of a friendship which the Chinese will reciprocate. Sir Murray MacLehose will go down in history as one of the men who have done more than anybody else to facilitate that very fact.

We made a journey to Peking at the invitation of the Chinese Government; and, do you know, they issued that invitation to His Excellency, in his official position as governor of Hong Kong. That ought not to be overlooked, because it indicates the consent to Hong Kong's status by the Chinese. In discussing the future, the governor was asked by Senior Vice Premier Teng to tell the investors in Hong Kong to put their hearts at ease. So it is working.

Hong Kong is a neutral point of contact in Asia. It has earned the reputation of being a free zone of China managed by the British. A change has come over events during the last three years. There is now a through train service between Kowloon and Canton, a daily air service between the two cities, operated by the Civil Aviation Administration of China, and there is a hovercraft service operated by a Hong Kong-based firm. It is reported that a 200-kilometre four-lane highway is to link Kowloon with Canton by 1982. In addition, a regular supply of electricity from the China Light and Power Company to the Guangdong Electric Company was successfully negotiated and connected in 1979.

What I am coming to is the interesting development that has taken place, and is taking place. How can you have a Royal Commission for a territory which is fast changing its nature? I ask your Lordships to tell me how. It is called a "rapidly vanishing border" between the New Territories and the adjoining Po-On district of Guangdong province. Whether we like it or not, this interlocking will go on and on. In fact, you will have difficulty in unscrambling it now.

How important is Hong Kong to Britain? The answer is that we have a unique position. As manager of China's free zone in the Far East, we control an important gateway to China. We have every reason to be proud of our stewardship. There is no doubt that China intends to use to the fullest advantage the facilities and expertise which are available in Hong Kong. Perhaps the most spectacular of the 1979 events were the financial arrangements that were made for a three-cornered deal involving Great Britain, Hong Kong and China. Under its terms, the British will sell mining equipment to China. The Chinese will mine coal which they will then sell to the China Light and Power Company. The coal will be used to power a new facilitity, purchased from British suppliers, that China Light is building at a cost of 1.8 billion Hong Kong dollars to generate electricity. This is only one of many schemes.

Is it generally realised that we sell more to Hong Kong than we do to India and other countries in the Far East, with the exception of Japan. That has a population of 100 million people, and yet we sell to Hong Kong two-thirds the volume of what we sell to Japan. That is no small beer. We have good friends in Hong Kong, Anglophiles in Hong Kong, who are keeping skilled craftsmen going in this country, and preserving the know-how which has been top in this country and which has produced employment for many years. I am referring to the electricity generating industry. It it were not for the orders which we now have from Hong Kong, there would be 2,000 men out of work who are, at the moment, doing a wonderful job with their own craft.

It is the easiest thing in the world to criticise and it is sometimes a good thing that criticism is focused on injustice and on government which borders on tyranny. Hong Kong was devastated and looted almost to the point of extinction, when the war finished. It still plays the traditional role of providing refuge for hundreds of thousands of refugees. When all the countries in the Pacific area said No to Vietnam refugees, who said Yes? Hong Kong saddled, as it was with scores of thousands from the mainland, took 50,000. I sometimes think that it would have been a good relief to Hong Kong if a thousand or two of those refugees could have been landed in Jersey—that haven of the taxpayer, not the refugee. Hong Kong's record is one of continual progress. The accommodation that has been provided in Hong Kong is phenomenal. There is not another place in the world that can touch it, for either the speed at which people work or the way in which they do it. So it goes on.

A Royal Commission would take several years to come to conclusions. There is already much anxiety in Hong Kong about the length of leases, and whether it is possible to be effective and economic—I ask your Lordships to weigh my words carefully—before 1997. So anything which would cause the Chinese to delay making their position clear about their policy towards Hong Kong would be detrimental and, in my opinion, dangerous to our interests in the Far East. We have going there a momentum of goodwill and friendliness which the Chinese will honour.

8.7 p.m.

Viscount Hanworth

My Lords, I apologise for intervening without having put my name down, but what I have to say will not take very long. I was stationed in Hong Kong for two years and I still have connections with it. That is the reason why, having listened to the speech of the noble Lord, Lord Brockway, I feel I must postpone my journey home.

One of the important and worthwhile traditions of this House is the moderation of noble Lords' speeches, as well as not castigating other speakers, but I am afraid that on this occasion I shall push very near the borders of what I think this House should accept. Frankly, and with all due respect to the noble Lord who asked this Question, I must say that, in my view, his speech was far from helpful or useful. Whatever one's views, one must admire the idealist approach of the noble Lord, Lord Brockway. Personally, however, I find idealists who have no regard to the hard facts of life, and the imperfections of human nature, very hard to live with. I am concerned with the quality of life and, in view of the extraordinary circumstances in Hong Kong, I should think that a benevolent autocracy was the best answer. I believe that, unfortunately, the same could well apply to other developing countries and I suggest to the noble Lord, Lord Brockway, that he might look at some of them and decide how far his brand of democracy is likely to work to the benefit of the citizens, which is what really matters.

I think that I have said enough on that point. But just sitting here, with Western spectacles, is not satisfactory. I think it would behove the noble Lord, Lord Brockway, to go out to Hong Kong before he starts to make the kind of speech which he has made this evening. What really makes me surprised is that he talks about accommodation problems there. The population has increased and increased. The Hong Kong Government have made immense efforts on rehousing, but the flood over the border swamped it all. The shanty towns have been removed time and again, but what happens? They fill up again. So you have to look at this, not through the eyes of people in this country, not through the eyes of people who complain, but through the eyes of those who see what is practical in that very well run colony.

Finally, as regards the question of the future I can very well understand the wish of Hong Kong to have a firm future but I think it should be pointed out that throughout Hong Kong's history, until perhaps a few years ago, there has been the threat of China walking in at any time. Militarily they could do so. There never has been a garrison which was sufficient to deter even a two division attack on Hong Kong. But China had not even got to do that. All they had to do was to push a lot of people over the border; the situation would then become intolerable. So for many years the people in Hong Kong have lived with complete uncertainty.

The future is something which we could well leave to our diplomats, with all the goodwill that we now have with China. I think it is the greatest mistake that Lord Brockway has again taken up this issue. Despite all the admiration for some of his idealist approaches, I suggest that he could well leave Hong Kong alone, or else go out there and see for himself.

8.12 p.m.

Lord Trefgarne

My Lords, Hong Kong is frequently described as unique. It has been said tonight, and so it is. Despite the many problems that it has had to face since the Second World War, it has adapted to ever changing circumstances and has now, through the diligence of its people and the good sense of its Government, established a strong political, economic and social base on which it can build with confidence.

Hong Kong is also very fortunate in that our commitment to the territory is complemented by China's attitude to it. Our relations with China have never been better. This applies particularly to Hong Kong. Hong Kong's relations with China have indeed become much closer in recent years. In 1979, the governor, Sir Murray MacLehose, went to Peking at the invitation of the Chinese Government. While there he saw Vice-Premier Deng Xiaoping, who stressed that those who were putting their faith in the future of Hong Kong need not worry. Indeed, as the noble Lord, Lord Rhodes, reminded us, he specifically asked the governor to tell investors in Hong Kong "to put their hearts at ease". This point has been repeated by other Chinese leaders. There can be no doubt that the significance of these assurances has not been lost upon those who live and work in Hong Kong, thus boosting confidence in Hong Kong's stability. This is demonstrated by the territory's continued prosperity and the very high levels of long-term investment in industry and other forms of development.

One or two of your Lordships have referred to the uncertainty about Hong Kong's future. Of course Her Majesty's Government recognise that there are legal problems connected with the end of New Territories' lease in 1997, but these are points which can best be met by reliance on the helpful attitude of the Government of the People's Republic of China, to which I have already referred. We have an interest with China in the stability and prosperity of Hong Kong, and it is on this that we must build.

One aspect of Hong Kong's success is the continued and growing strength of its economy. Hong Kong industry, although hit by the last recession in world trade, adapted to it with great resourcefulness and emerged into a period of remarkable growth in the later 1970s, averaging 12.4 per cent. per annum. The world, including Hong Kong, is now facing another recession, but again Hong Kong is setting an example of adaptability and enterprise. I am therefore confident that as world trade picks up, Hong Kong will again be ready to meet new challenges as they emerge.

We in Britain of course have a stake in Hong Kong's prosperity. Apart from our responsibility for the territory, it offers striking opportunities to our industrialists and traders. It is a matter of particular satisfaction to Her Majesty's Government that the Hong Kong Government's commonsense economic policy has been so successful. We greatly welcome the challenge this poses for British enterprise. The opportunities are certainly there and we hope we shall improve our share of this expanding market both in trade, in goods and in major project work. I should mention that Hong Kong is already Britain's second largest market in Asia. I doubt whether Hong Kong's success would have been possible without the free trade principles which are so fervently adhered to there. Hong Kong sets a useful example to others and we applaud them for this.

Against this background, the ties between Britain and Hong Kong have matured and become closer in recent years. Our relationship is based on mutual understanding and a fundamental coincidence of interests. I know that problems do arise between us, but both sides approach areas of potential difficulty with good sense and are prepared to listen to each other's point of view. This was shown last year when we came to satisfactory conclusions over such issues as, for example, the defence costs agreement.

I am very much aware of the deep concern in Hong Kong over the Nationality Bill. We fully understand this. My noble friend the Foreign Secretary and other colleagues in the Government have given personal attention to the representations that the Government of Hong Kong and the unofficial members of the legislative and executive councils have made to us. These are being considered very carefully at a high level. I cannot at this point in time predict what the outcome will be, but there are two points which I would particularly wish to stress to your Lordships. It has been suggested—and clearly many people believe—that the proposals in the Bill are deliberately intended to distance the United Kingdom from Hong Kong and thereby to reduce its obligations to the territory. I can assure your Lordships that nothing is further from the truth. As my right honourable friend the Home Secretary made clear in another place on 28th January, we attach great importance to our links with the territory. The Bill is not aimed at Hong Kong. It is not intended in any way to weaken our ties.

Much of what has been said this evening has been about Hong Kong's internal affairs. Her Majesty's Government have of course a constitutional responsibility for the good governance of Hong Kong, and my noble friend the Secretary of State for Foreign and Commonwealth Affairs is answerable to Parliament for this. However, I should like to make it quite clear that its internal affairs are, first and foremost, a matter for the Hong Kong Government to manage. Moreover, Her Majesty's Government have every confidence in the Hong Kong Government's ability to do this fairly and successfully. Here, I should like to echo the tributes to the role and record of the governor, Sir Murray MacLehose, which have been paid this evening. His good sense and balanced judgment during ten years of office have been a major factor in providing a stable and fair society.

The problems, particularly those arising from population growth, which Hong Kong has had to face in recent years have been enormous. I need only mention here the influx of an estimated 180,000 illegal immigrants from China and more than 80,000 refugees from Vietnam between 1st February 1979 and 31st December 1980. The fact that it has coped so well is truly remarkable evidence that our confidence is well placed.

Almost 260,000 housing units were built between 1973 and 1980. Gross national product per capita rose by an average of 6.5 per cent. per annum in the 1970s. Hong Kong's achievements in providing housing, medical and health care, education, assistance for the needy, recreational facilities and generally the opportunity for its people to enjoy a full and satisfying life are outstanding by the highest standards, and a record of which the people and Government of Hong Kong can be justly proud.

On the question of employment, which the noble Lord, Lord Goronwy-Roberts, raised, it is perhaps worth noting that the legal minimum age of employment was raised from 14 to 15 in September last year, which has helped on the problem, of course; and the employment of children under 14 has always been prohibited in Hong Kong.

Hong Kong is sometimes criticised as being undemocratic; indeed, the noble Lord, Lord Brockway, made that point in his speech tonight. It has no elected legislature, unlike the other remaining dependent territories which support populations of any size. But then, Hong Kong occupies a unique geopolitical position and it is not surprising that it has developed its own unique and highly effective method of monitoring and responding to public opinion. The Government spend vast amounts of their resources on assessing public opinion and in involving the man in the street in practical administration. A very recent example of this can be seen in the proposals to set up district boards, with a significant elected element, throughout the territory. This is not mere window-dressing. It is a practical measure to improve the quality of local government in one of the world's most densely populated areas. In any event, window-dressing is not a skill which the Hong Kong Government have chosen to learn or use, nor indeed would their people allow them to do so.

All this adds up to a striking success story. The ever changing face of Hong Kong symbolises a spirit of adventure, of self-help and enterprise, based on political and economic confidence. Nowhere is this better seen than in the growth of the new towns in the New Territories, where communities of up to half a million people each are springing up to provide homes for a new generation of industrial and office workers where five years ago there was farm land and mountain territory. Nothing could better demonstrate Hong Kong's pride in its present and confidence in the future.

I must therefore say that I see no justification for the sort of Royal Commission on Hong Kong which the noble Lord, Lord Brockway, has suggested. Such an inquiry would not contribute new information about so open a society, nor would it help it to plan for the future. Indeed, it might in itself raise doubts and thus undermine stability. There is no evidence that new institutional arrangements would serve Hong Kong better than the existing ones. What the territory needs is the scope for its resourceful people to develop their society and consolidate the economic basis on which they have already built so much. I am confident that the present policies of Her Majesty's Government, for which I have been glad to note so much support here this evening, provide the best foundation for this.

My Lords, I should like to end on a simple and straightforward point. The ultimate responsibility for the good government of Hong Kong and the protection and wellbeing of its people rests with Her Majesty's Government here in London, and specifically with my noble friend the Foreign and Commonwealth Secretary. I reaffirm our commitment to that constitutional position tonight.