Hong Kong: Future

HL Deb 10 December 1984 vol 458 cc27-87

4.2 p.m.

Debate resumed.

Lord Tanlaw

My Lords, we now return to the debate on the future of Hong Kong and the draft agreement that has been placed before this House. Like the noble Lord, Lord Cledwyn, I am looking forward to the maiden speech of the noble Earl, Lord Birkenhead. I had hoped to be able to listen to the noble Earl before making my intervention, but, at rather short notice, I have had to speak somewhat high up the list and so although I was going to make a mere personal statement, I shall now have to make a much wider speech, and I hope that that fact will not be overlooked. Therefore, I was not in a position to receive many of the submissions from UMELCO and various other representations which have been made, but I have received reports of those submissions to my noble friends and colleagues.

The first question which I should like to ask the noble Baroness, Lady Young, concerns the suggestion put forward by UMELCO and, indeed, by others in another place, that there should be an annual report on, for want of a better phrase, how things are going in Hong Kong during the intervening period between now and 1997. This would allow this House and another place to debate the matter, and would act as a check; it would allow Members to raise anything which may have given rise to any sticky points which had not been anticipated in the draft agreement.

Another factor arises in this connection. Certain business interests that are trading with both China and Hong Kong do not often have the ability or the time to see what is happening on the constitutional side. If there were such an annual report, followed by a debate in both Houses, it could only assist the business future of Hong Kong.

The other aspect on which I wish to concentrate is the part of the draft agreement which prescribes: that the Government of Hong Kong will be composed of local inhabitants: that there shall be an elected legislature, and independent judiciary; that the Chief Executive will be appointed by the Central People's Government on the basis of elections or consultations to be held locally, and the Chief Executive can then nominate the principal officials. It is therefore essential that a system of electing the Chief Executive is organised before 1997, thus circumventing a consultative alternative system". What is not clear on the one hand but is made extremely clear on the other is that the legislature envisaged by Her Majesty's Government, by the people of Hong Kong and by the People's Republic of China is both a democratic and a representative one. This was emphasised by the Governor, Sir Edward Youde, in his speech at the drafting of the agreement itself. He said: to ensure that we achieve the objective of developing a system of Government on which the views of all sectors of our society are represented; which is responsive to the needs of our community; and which is responsible to the people of Hong Kong". Those who sit on these Benches and I am sure Members in all parts of the House definitely have great sympathy with those views. The Unofficial Members of the Hong Kong Executive and Legislative Councils, under the heading "Move to Representative Government", made a similar statement, which I also welcome. They said: It is therefore necessary to move to a more representative form of government". and that, Hong Kong must therefore devise its own unique style of representative government". The word "representative" appears in almost every one of these statements, and it goes without saying that those elections must also be democratic. Indeed, the White Paper outlines the development of this form of government, starting with indirect and then direct elections.

However, there is no mention of the voting system which is to be used. There is no mention of how these representatives are to be elected. It should be realised, and realised by now, that Hong Kong is a complex sectarian society on which there are many pressures and there are many inputs to voters—and certainly new voters who are to take part in elections which they have never had before. There is religion, cultural background and language; there are multifarious pressure points on voters before they can take a decision on the kind of person they wish to represent them. They have not had this luxury, if we can call it such, until now; but they have had the luxury of not having to bother about politicians, and they have done very well on it. Now that the responsibility is to revert back to Hong Kong, they will have to make these decisions in a polling booth.

I should like to ask the noble Baroness what kind of voting system the people of Hong Kong are expecting will be used. The implication is that it will be the same system as we operate in this country. I think that this point should be clarified at a very early stage because, as many noble Lords are aware, the voting system that we have in this country may be democratic but in no way is it representative.

Perhaps I may remind noble Lords that 42.4 per cent. of the votes cast in the last general election elected 61 per cent. of the seats in another place; 27.6 per cent. of the votes cast elected 32 per cent. of the seats in another place; yet 25.4 per cent. of the votes cast elected only 3.5 per cent. of the seats in another place. This raises another question altogether, but the point I wish to make is that the system of first-past-the-post in this country, and wherever it is used, may be democratic but it is certainly not representative, as the figures which I have quoted show and as we on these Benches know to our cost and as our voters who voted for their candidates know to their cost.

Will this system be used in Hong Kong? No advantage would be given to a political party; some people claim that there would be an advantage to those of us who sit on these Benches if the system were to be changed. In Hong Kong there are no political parties; so they are starting from scratch. I want Her Majesty's Government and, indeed, anyone who is concerned with the future of the voters of Hong Kong to consider how they will vote and what they will achieve by voting. If the noble Baronesss can show this House that the voting system of first-past-the-post is representative, I will be prepared to reconsider the matter. But why is it that so many countries in Europe use other systems and have dumped the first-past-the-post system in order to have a more representative government? I have said enough about this, but it is something that needs to be cleared at the beginning before we get into details of the draft agreement.

Another main point is that of the Basic Law and the drafting of the Basic Law. This point has already been made in the debate in another House and indeed by the noble Lord, Lord Cledwyn. It is difficult to be sure from the noble Baroness's remarks who will he responsible for the task of drafting. Everybody realises that the responsibility will be left to the team in Beijing, but our concern here is where the people of Hong Kong—and, this time, perhaps the elected representatives of Hong Kong—are going to fit in to have their say in the drafting of the Basic Law.

Are they going to be part of the British team, Her Majesty's Government's team, in Beijing or have a separate place of their own? They have to have a say. With the best will in the world it is no good us taking part in the drafting procedure if the final result is against the wishes of what will then be the elected representatives in Hong Kong.

I shall be as brief as possible, but I now want to come on to a few areas that the Basic Law is going to touch upon, mainly for clarification. They are areas in the judiciary which may need adjustment, and areas where possibly more liberalisation is required in deference to now having a democratically-elected legislature rather than a firm and reasonably fair government which did not have to bother with local voters.

One of the areas would be the Societies Ordinance, which I believe controls the formation of political parties. It has been long and difficult for associations and political parties to get formed in Hong Kong. I hope there will now be a slight easing of this because presumably there has to be some sort of label attached to those who are going to be representatives, and elected representatives, of the people of Hong Kong.

There is also the Independent Commission Against Corruption Ordinance, the ICAC. I wonder whether that may he loosened up a little? It is a quite fearsome ordinance. This could be done in conjunction with having an ombudsman, perhaps with full investigatory powers into alleged personal harassment, abuse of authority, or various other things which can occur with a law as far-ranging as this which has been used in Hong Kong to greater and lesser effect than perhaps its authors would have wished.

There is another factor that was a surprise to me, and it may be to some other noble Lords, and that is that the death penalty is still on the statute book in Hong Kong. I wonder whether or not it will still remain there during these intervening years. This is another factor on which people would like to be reassured.

Finally, there is one other area which was going to be the main subject of my intervention in this debate, and that is the localisation of the judiciary. I am perhaps not in any way normally qualified to talk about the judiciary, but I have served the noble and learned Lord who sits on the Woolsack for 11 years as a member of his committee on the selection of justices of the peace for Inner London. I was proud to do so and it was a rewarding experience. I feel qualified at least to raise the question of the future of magistrates in Hong Kong.

It would appear from the figures I have received from the Hong Kong office that out of a total of 62 stipendiary magistrates 53 are expatriates and only nine selected from the local community. I wonder whether or not the process of localisation can be accelerated to improve these figures. In the best of all possible worlds, and certainly so far as the future of Hong Kong goes, I cannot see the benefit of having magistrates from as far away as England who do not speak the languages in which the courts will be conducted, and have little or no understanding of Chinese family affairs, Chinese business affairs, or indeed the Chinese community as a whole.

The reason given why there are not more local magistrates has been that the remuneration has not been adequate to satisfy the local legal profession, who are used to much higher fees on the commercial side of the law. I have had this repeated to me on a number of occasions. When I have expressed amazement, it is the answer I have been given. We have all heard of fat-cat lawyers, but this is going a hit far. Anyone involved in the future of Hong Kong should also have a public-spirited approach and I do not see why the legal profession should be left out in this.

The answer that magistrates do not make enough money does not satisfy me. We are looking for a democratic and representative form of government at all levels, and that is what the people want, and this is something about which we should hear a little more. That is the only answer I have had, and I have looked hard for anything better. There has to be a change of attitude about the community. It is a business community, and I do not see why people should not take it in turns occasionally to take part in that community just as we do here. In this country there is a lay magistracy where ordinary people from all sectors of life from stockbrokers to bus conductors play a valuable role in operating the courts, and I do not see why they should not have a similar role in Hong Kong. We have here a helpful guide in our Lord Chancellor's office, the Green Book, as to how these magistrates should be selected. I wonder whether those who are visiting from Hong Kong, those teams from UMELCO and others, might not spend a little time in the Lord Chancellor's office to see how we go about matters here. It may be to their benefit.

The question of nationality has come up. We from these Benches have at another time made our views clear as to fairness and our obligations in this country as to what nationality is all about, including its definition. I do not think that this is the right time to raise it now. We shall continue from these Benches to try to safeguard as best we can those rights that were freely and honestly given to people in Hong Kong.

The reassurance that the noble Baroness has given about statelessness is an area where we have had a lot of representation. I am delighted, if I understood her correctly, that there will be a provisional draft which can look after this particularly awkward question for, I believe, people numbering not more than 20,000. It is a relief that that is what is being done with a sensible arrangement through negotiations with the governor.

I want to conclude with something on general attitudes about the future of Hong Kong. From talking to people in both business and government I have come to the conclusion that how you look upon the future depends primarily on your age. This is a purely personal view and I hope I shall not give any offence, but I have listened to enough people to have acquired some opinion. People who are perhaps over 50 have often come away from some form of oppression and found in Hong Kong a wonderfully free society in which they have developed successfully, intelligently, and brilliantly in many ways.

They cannot bear the thought that in 12 years' time, when they are possibly at retirement age, they will have to think about having to start again somewhere else. The over 50s are therefore perhaps understandably looking for passports of another country. What worries me is that they have their sons, and, with the way that Chinese family customs work, they listen to their elders with great care. Quite often young men who long after the year 2000 will have a brilliant future in Hong Kong both in business and in the Civil Service are worried about the conflict of advice.

I suspect that a lot of them want to give it a go and take a chance, if you like. They do not want to go to another country with a different and alien culture where they may be permanently classed as a second-class citizen. They want to take a chance and have a shot at what the future offers, with the goodwill that has been established so far. But it is their fathers and indeed their mothers who are saying, "Be careful. Hedge your bets". and so on, which is often creating a rather difficult climate for decision-making. We have to sympathise very much with people from the ages of 25 to 45 who have some difficult decisions ahead, but it is essential for the future success of Hong Kong, both commercially and constitutionally, that they stay after the year 2000 and take their chance with their families and with their children.

To end on a very personal note—and maybe it is possibly of some encouragement—many people in this country do not have much experience of the People's Republic of China or with Chinese people at all. I have daily experience and I assure your Lordships that it is due to different cultures exciting. It may have its confrontations, but the rewards more than compensate for anything else. That is the way I look at the future and I hope that many others will do so too. We wish all the people of Hong Kong a part in that future.

4.21 p.m.

The Earl of Birkenhead

My Lords, I must ask for your Lordships' indulgence for this, my maiden speech. It is a privilege to be speaking in such distinguished company on this topic, in particular to be taking part in the same debate as the noble Lord, Lord MacLehose, who was for so long such a distinguished governor of Hong Kong. I start by adding my congratulations to those which have already been given to the negotiators on both sides on what I see as an unprecedented treaty. It is really a remarkable document. It is perhaps the first agreement of its kind between capitalist and Communist powers since the October Revolution of 1917.

Both sides entered these negotiations with one overriding objective: the Chinese to recover their sovereignty over Hong Kong, and Her Majesty's Government to secure the future welfare and freedom of its 5.5 million inhabitants. The Chinese have most certainly succeeded in their prime objective and so, I hope, I trust, and I believe have we, but nobody—not here in this House, not in Hong Kong, not even in the People's Republic—can be absolutely sure of that. What one can say is that to the Chinese, being determined and, indeed, entitled to exert their claim, some transfer of sovereignty was inevitable. It was greatly preferable that such a transfer should be accompanied by an agreement. and it would be hard to imagine an agreement being more comprehensive or satisfactory than this one.

It would not, however, be fitting to allow our pleasure at the nature of this agreement to lapse into complacency. As other speakers have said, much remains to be done. There are still uncertainties. Above all, we should avoid complacency, because we do not have to live, except in our consciences, with the consequences of this agreement; the people of Hong Kong do. Many of them have risked their lives and abandoned everything to escape from Communism. One cannot possibly expect enthusiasm at the prospect of being handed hack to a Communist power, however many safeguards are built into their return.

Given this, their reaction as gauged by the assessment office is, I think, wary but constructive. Some of the individual submissions I found poignant and heartbreaking. I shall quote one: We do not care what happens to Hong Kong for our own sake. However, we worry for our children". Two of the concerns expressed seem to me to be particularly important and have already been touched upon by everyone who has spoken this afternoon. These are the questions of Hong Kong interests being consulted over the drafting of the basic law, which will, of course, govern the colony after 1997, and of their representation on the Joint Liaison Group. I was very happy that these points should have been so sympathetically received both by my noble friend Lady Young and also when they were raised in another place on Wednesday.

There is a more general, but equally important, point. It is essential for the people of Hong Kong to be involved directly in developments from now on. It follows that some democratic body should be elected in Hong Kong which would he truly representative of Hong Kong interests. By this I do not mean to imply the slightest criticism of the present Legislative Council; very much the reverse. I greatly admired their conduct over the past year which I thought to be both wise and courageous, and I thought that their debate which was reported in the assessment document faithfully reflected the reservations in the colony. Nevertheless, an elected body would have a legitimacy, a function of representation, that the present Legislative Council lacks. Perhaps this maiden speech is not the right time to dwell on this subject. I will return to the agreement.

The guarantees contained in the document are reassuring, but there are other reasons why it should work. One very important one is that the Chinese have never recognised the treaties under which we have held and continue to hold Hong Kong. On the contrary, they denounced them as being uneven and having been negotiated under duress. One must admit that they had some reason in that argument. Nevertheless, Chinese Governments of all persuasions have respected the treaties, when they could have taken over the colony at any time with little fear of retaliation. How much more likely are they to respect a treaty which they have freely negotiated and which is as solemnly binding as can be made possible in any arrangement between two sovereign states?

Now that they have achieved their ambitions for Hong Kong, or are well on the way towards achieving them, the main objective of Chinese foreign policy must be reunification with Taiwan. This can be achieved only by diplomatic means, and probably only in the distant future when new leaders will have forgotten the bitterness of the past. The Hong Kong agreement can be seen as a pilot project for this greater reunification. It must be seen to have worked. If it fails, then there will he no chance of reunion with Taiwan. Thus, China's concern for her own good name, her economic interests and her foreign aspirations all pull her in the same direction towards the strict observance of this agreement.

There have been also most encouraging changes in the People's Republic. When I first went there, shortly after the Cultural Revolution, I was amazed by the degree of conformity, which seemed almost inhuman, the complete submission of the individual to the state, the subjection of the expert to what was called the collective wisdom of the struggling masses. The uniformity was even sartorial. Mao badges adorned Mao jackets, hair was cut uniformly. How long ago it all seems now! The changes in China over little more that a decade have been quite astonishing and the pace of change, if anything, is accelerating.

A month ago, the Chinese Prime Minister Deng Xiaoping told us that egalitarianism has no part in modern Marxist thought while on Saturday the People's Daily carried this a bit further and told us in effect that Karl Marx has no part in modern Marxist thought. These pronouncements give legitimacy to what has already happened. There have been widespread experiments with elements of capitalism in both industry and agriculture. Foreign investment has been sought, as have joint ventures. In addition, three graduated classes of development zone have been started. The effect of all this has been to transform China, rather quietly with the full form of Communism preserved, from a doctrinaire Communist state to something which is well on the way to being a new sort of mixed economy. They have even celebrated their first peasant millionaire with some kind of fanfare. A short time ago, he would have been shot or, if he was lucky, sent off to Mongolia to be re-educated by the struggling masses.

There are perils as well as opportunities in the path that the People's Republic is taking. The scale of the task is absolutely stupendous: the modernisation of a country with 1,000 million inhabitants. There is so much that could go wrong. Expectations have been raised and disappointments could lead to dangerous reaction. What is certain, though, is that the changes which have already taken place will greatly improve Hong Kong's prospects within China. Little over 10 years ago, the contrasts between the two systems was absolute. If anyone had suggested that there could be any form of union between the unbridled capitalism of Hong Kong and the ultra-orthodox Communism of the People's Republic, the idea would have seemed quite absurd. Fortunately that is no longer so.

Noble Lords may have read that the highest designation of all development zones, that of "special economic zone", has been given to an area called Shenzhen which is adjacent to the New Territories, the part of China which meets Hong Kong. Within Shenzhen, booming conditions already almost rival those in the colony. Industry thrives, controls have been lifted, foreigners encouraged. The population of Shenzhen has gone up over 10 times since 1980. It has been so successful that it is now fenced in from the rest of China; so that we have the extraordinary spectacle of two parallel fences, one built by us to keep the Chinese out of Hong Kong, the second built by the Chinese to keep their own people out of Shenzhen. On the other side of that second fence lies the province of Guangzhou, itself a priority investment zone and, beyond Guangzhou, the rest of less privileged China. It is possible—no, I think likely—that Hong Kong, once a prime example of everything that the People's Republic opposed, will settle on the very apex of this new economic pyramid and become instead the symbol of her aspirations. Let us hope that this is so and let us do everything we can to help achieve this happy outcome.

4.35 p.m.

Lord Rhodes

My Lords, I am very fortunate to be able to follow the noble Earl and to congratulate him on his maiden speech. The majority of the House may not have realised while he was talking that he put his finger on one of the most important facets—one that is not very often mentioned—and that is the co-development of Shenzhen alongside Hong Kong. I do not suppose that the noble Earl has ever been able to forget that he had a very illustrious progenitor called F. E. Smith, and neither have we in the north of England, because we were always proud of him, not perhaps because of his legal prowess but because he never forgot his origins—which, in my opinion, is a virtue. The noble Earl's speech was first-class, and I hope that the House will have the opportunity of hearing him many times in the future.

I have never ceased to marvel how chance plays a part in our lives, and I can never really get over how it came about that I was so interested in that part of the world. That interest has led me to Hong Kong 15 times now, and to the mainland of China five times in the last six years—and I am due to go again, God willing!, in March of next year. I thank my noble friend Lord Cledwyn of Penrhos for his remarks. He is very kind, and I appreciate it very much.

We are discussing a very fine document, and I wish to support the Motion that is before the House. What is particularly encouraging is the degree to which Chinese negotiators were willing to specify a detailed set of policies regarding the future of Hong Kong. The document provides that Britain will remain solely responsible for the administration of Hong Kong until 1997. That is common knowledge. It contains relatively specific guarantees that the present Judiciary, administration, finance, education, economic and social systems will be preserved for 50 years after 1997. The Joint Declaration, it appeared, was generally accepted by the Hong Kong people; but it was clearly stated in the White Paper that the alternative to this agreement would be no agreement. Although it is accepted that the agreement stands as it is, nevertheless the people of Hong Kong would like assurance that there will be opportunities for clarification, and they would like to be told that the last word on the subject has not been spoken.

My next point concerns the Sino-British Joint Liaison Group. This was originally envisaged as a consultative body, but in my opinion there is absolutely no doubt that it will be considered a forum for consultation and negotiation on matters which need clarifying throughout the next 12 years. The functions of this Joint Liaison Group are defined. One is to discuss matters relating to the smooth transfer of government in 1997; and there are many more. Here, again, the people of Hong Kong would like to know how their views will be represented on this group. The people of Hong Kong say that there should be a de facto arrangement whereby Hong Kong has a representative or representatives on the group.

There is plenty of work for this consultative body to do now, and one matter in particular is the nationality question. There is no doubt that there is disquiet that this was dealt with in an exchange of memoranda which, although associated with the agreement, nevertheless do not have the same force. It is obvious that the Chinese are not committed to incorporating these memoranda or their contents in the Basic Law. Other noble Lords who will follow me know more about the intricacies with which we shall be faced on the question of nationality, but there is one thing that ought to go out from this House this afternoon, and that is a determination to deal compassionately with those who need it in terms of nationality in the years that lie ahead.

I think the Joint Liaison Group should announce as one of its first priorities that it will discuss and clarify for the people of Hong Kong the various questions that have been raised about nationality. Here let me make a plea. Why cannot the people who have been negotiating and have made such a magnificant job of what they have done form an element of the group when it is set up after the agreement comes to pass? We need some continuity from the people who have gone through all the details in compiling this first-class agreement. May I ask that there should be consideration given to this point?

My next point also very much affects the people of Hong Kong. Who will speak for the people of Hong Kong during the next years when their voice needs to be heard? A White Paper on representation and reform has just been published. This sets up indirect elections to fewer than half the places on the Legislative Council—the number is approximately 24. Now there is a promise to review in 1987, before further reforms take place. At that juncture, the Governor of Hong Kong has hinted that some element of direct elections might come after the review; but he specifies the need for a step-by-step approach in which the system will, evolve naturally to meet the needs of present-day Hong Kong". I want to draw attention to this point because it is important. The Governor has been criticised and accused of fudging the issue, but I think the Governor was right, and, while the autonomy of Hong Kong depends on its ability to develop effective institutions of self-government, we have to proceed with extreme caution. That is where I come back to the speech of the noble Earl, Lord Birkenhead, who spoke for the first time this afternoon, about the relationship between Shenzhen, which is adjacent to Hong Kong, and Hong Kong itself.

The agreement promises an elected Legislature, but neither gives details about the proposed electoral system nor guarantees that the elections will be competitive. This must be taken into account by everybody. There are two sorts of elections: by indirect electoral colleges and elections by competition. But there is no statement in the agreement which says that they are going to be competitive elections. Instead, the structure of the regional government that will rule Hong Kong after reversion to China will be described in a "Basic Law" that Peking will enact some time between now and 1977.

Thus much rests on the contents of this "mini-constitution"—it will be a "mini-constitution"—and the process by which it will be drawn up. Peking has pledged to Britain that the Basic Law will embody all the guarantees and provisions of the joint agreement, and it has promised informally that the people of Hong Kong will be consulted through the drafting process. But the Basic Law will be unveiled well after the Sino-British agreement is concluded. There is no provision for either London or Hong Kong to approve its contents. Nor is there yet any indication as to how, or by whom, the basic law can be amended after 1997. This wants to be remembered.

It is quite possible, therefore, that the Basic Law will contain strict limits on representative government in Hong Kong—and the power to set those limits appears to belong to Peking alone. So, in my opinion, while taking the tenet that we should move step by step, we need also to walk in step with the Chinese Government.

Hong Kong faces one of the biggest challenges confronting the Eastern and Western world. What is going to be done about it? We have to back Hong Kong with all the strength that we can at this very important time. What can we do individually? Sometimes I think that there is precious little we can do individually, but I have been associated with the textile trade, both man and boy: as both employee and employer. I was an administrator in the Board of Trade concerned with the same trade. It should be recognised that China is the largest manufacturer in the whole world. There is no question whatever that over the years that lie ahead there will be confusion and argument about the multi-fibre arrangements, about GATT, and about other quotas. I may say from a personal point of view that I will lay open all the information and influence that I possibly can to help Hong Kong solve some of these problems when they arise.

What can Hong Kong do for itself? It can do a lot. It is a matter of confidence by the people of Hong Kong in the government of the future in Hong Kong which will make it possible to bring peace throughout the years. There is such a thing as unemployment in Hong Kong. There is such a thing as pensions in Hong Kong. There are certain things needed in the factory administration in Hong Kong, where the factories are not up to date in terms of good employment. Sinofication of the legal system is needed. Proceedings in magistrates' courts are still all conducted in English. We shall have to energise this question of what we are doing to the social side in Hong Kong.

The Hong Kong Government need to he definite about the outcome of the Llewelyn Committee, which has now been waiting for a decision for 10 years as to whether the Cantonese language is to be included in primary and secondary schools. Matters of that kind need to be dealt with forthwith. There is no question either that Hong Kong will be facing difficulties in the event of land values decreasing if a recession occurs at the same time. This is where the parent Government here will have to help Hong Kong.

I cannot believe that there will be a major change from what they have set their hand to. There will be hiccups, of course. Central government in a communist state is dependent on the good will of its regions, and central government in a communist state courts the regions by giving them autonomy. In the past, the regions in China have used their autonomy in cut-throat competition between the regions themselves, and so central government has found it necessary to claw back authority and fix prices as a result.

What can Government here do? They can do a lot. They can support the institutions which are making an effort towards friendship towards China (the Britain-China Centre is one example) and back the Sino-British Council. I will pay tribute to the service given by the BBC Overseas Service at Bush House. Is it generally realised that 30,000 letters were received by the BBC at Bush House last year as a result of its Chinese broadcasts?

I was glad to see that there has been an appointment to the consul-generalship in Shanghai, which is something for which we have been pressing for several years now. We have a first class man by the name of Trevor Mount, who is going to take up that appointment.

I come to what is my last point—or nearly. Earlier this year we heard the news concerning an invitation to Her Majesty the Queen to visit China. If that event could take place in, say, two years' time, when they will just have started constructing the basic law, it would be one of the most momentous visits of this century. The Chinese people would rise to it, I know; we have been told so.

When we were debating the third Question on the Order Paper this afternoon, concerning the Anglican and Roman Catholic clergy, I recalled that I myself attended church yesterday. At one point I was nodding off, but then I heard our parson praying. He was praying for the success of this very agreement and praying that it should be a lasting source of friendship between our two peoples. There is not a single person in your Lordships' House who would do other than agree that our parson was right. In the Anglican church it is the season of Advent. It is a time of hope and of looking forward to a coming. We hope that this agreement presages something wonderful coming in the future, because I believe that the Chinese people have the peace of the world in their hearts.

5 p.m.

Lord MacLehose of Beoch

My Lords, I should like immediately to congratulate the noble Earl, Lord Birkenhead, on his maiden speech. I am relieved that he chose a subject which is virtually the only one on which I can compliment him with some authority. I hope he stays with it in the 12½ years that lie ahead.

This is an excellent agreement and it is difficult to start without congratulating many people; naturally, first and foremost, the Chinese Government, but also Her Majesty's Government, the Secretary of State and the diplomats who carried out this very difficult task. There are also the members of the Executive Legislative Council who have performed their task with great dignity during the past two years. Above all, a tribute is due to my successor. I do not believe any official has ever had to carry out so delicate and complex a task and to reconcile so many diverse points of view—often heated—and done so with such success.

I listened with very great interest to what the noble Baroness the Minister of State said in her opening speech. She answered many questions and I hope that she will bear with me if I ask a few more. As I see it, the joint declaration had three main objectives: first, to restore sovereignty and administration to China in 1997 but at the same time to ensure that the essential elements of Hong Kong's prosperity, stability and lifestyle should continue for a long time thereafter; secondly, to make arrangements for liaison and co-operation in implementing the agreement and achieving an eventual smooth handover; and, thirdly, to announce what would happen after 1997 sufficiently far in advance to halt the erosion of business and personal confidence and, it is to be hoped, to rebuild it.

Although some ambiguities and gaps inevitably remain to be dealt with within the basic law or through the Joint Liaison Group, many of these objectives have been achieved and markets have steadied; and the outside view of Hong Kong has become quite bullish. But while the provisions are all that anyone could hope for at this stage, I think a degree of personal fear and suspicion persists. This was clearly reflected in the assessment and monitors' report. This is no criticism of either the agreement or of the Government of China but is simply a fact of which the Chinese leaders are, I am sure, very well aware.

In spite of this, the wish of the Hong Kong people clearly recorded for us is that we should sign. They said "yes" but with some unspoken "buts". I am told that much of this reserve is due to doubt: not of the sincerity of the Chinese Government, but concern about the way officials, unfamiliar with Hong Kong and its ways, may seek to implement the agreement. We shall have to wait and see. After all, the Joint Liaison Group will be there to deal with implementation problems and no doubt restraint and a sympathetic approach will be as necessary from Hong Kong as from the Chinese Government. In any case, fortunately there are 12½ years in which these doubts can be dispelled. Considering the fantastic changes that have taken place in Hong Kong itself, in Hong Kong's relations with China and in China itself during the past 10 years, who can say how those doubts may appear in retrospect in 10 years' time? Nevertheless, as the noble Earl said, it is the future of the people of Hong Kong that is at stake and I understand their attitude that the proof of this pudding will be in the eating; so, clearly no effort should be spared in its preparation.

I suppose the most important question we have to answer is whether the agreement will stand up. It is so good on paper that many have asked: is it too good to be true? That is one of the causes of the underlying concern. Last Wednesday in another place the Secretary of State, and today the Minister of State here, gave us most reassuring answers to these questions—the solemnity of pledged word; mutual interest; highest national importance of the policies of the Chinese Government such as a modernisation programme and the prospects of peaceful reunification with Taiwan. There is also our own strong national interest. There are other reasons, but I shall mention only one.

For a Communist government to commit itself to maintaining this capitalist enclave may seem to some so bizarre as to be incredible, but the fact is—and I do not know how much this is generally realised—this concept is entirely consistent with Chinese policy towards Hong Kong, at least over the past 20 years. During this time the characteristics of Hong Kong recorded in the joint declaration have been in existence but they, and the British rule that created them, have been permitted to exist not because of British power (China has overwhelming local power) or, I suspect, because of treaties which China held to be invalid and signed under duress. No, they could only have been permitted to continue because for good reasons it was the policy of the Chinese Government that they should. It is worth noting that that policy has remained constant through such upheavals as I hope China will never have to go through again. There was one aberration in 1967, but in my view that was the exception which proved the rule.

In my years as governor I found the Chinese People's Government and its officials in Hong Kong both friendly and supportive; so there is nothing inconsistent, far less suspicious, in the Chinese Government having now volunteered that Hong Kong should continue under their flag more or less as it is since it has been their policy to accept it for so long under ours.

For all those reasons I am sure that we should sign. I do not think there is any dispute about that. However. I think it is the fervent hope of the Hong Kong people that in signing we do not mentally sign off, but rather sign on for the next 12½ years of our responsibility. Our task during these years, in co-operation with Hong Kong and the Chinese Government, will be to help Hong Kong to be in the right shape politically, economically and psychologically to maintain continuity when the Hong Kong Special Administrative Region of China starts. If we succeed, as I am sure we will, we may well have assured the success of Hong Kong, and thus of Sino- British relations, over much of the 50 years that follow.

These 12½ years will probably be the most demanding and could be the most fruitful that the Chinese People's Government, ourselves and Hong Kong have ever had in their long relationship. Therefore, my first question to the Minister of State is whether she is satisfied that adequate forward planning has been made in the Foreign and Commonwealth Office for the provision of the staff necessary for this prolonged task. Certainly the resources of that department were deployed with enormous success during the recent negotiation.

I know that the Government are committed under the Joint Declaration to maintain their responsibility up to 30th June 1997. Of course their sincerity in that respect is complete. What the Minister of State said today is, of course, all that one could have wished. Nevertheless, I believe that during this period we may expect Hong Kong people to watch every action of ours to detect any sign of growing uninterest: for instance, in the degree of support that we give to Hong Kong in quota negotiations; what we do for Cathay Pacific in comparison with British Airways and British Caledonian; and even procedures for the new passports must be handled with care. We must avoid giving any impression that we are intending to expedite our disengagement. Those are just examples; but obviously constant care over the handling of this highly sensitive situation will be necessary if we are to avoid misunderstandings and jolts to confidence.

In addition, there is an obvious check list of specific things to watch out for, most of which have already been referred to by other noble Lords. There is the work of the Joint Liaison Group and the drafting of the Basic Law; and the obvious wish of Hong Kong people to participate. I noted what the Minister of State had to say about that. I agree very much with what the noble Lord, Lord Cledwyn, had to say, and I shall not repeat what others have said. Also, as the noble Lord, Lord Cledwyn, said, there are fears of conscription into the People's Liberation Army. I realise that that lies within China's sovereign right and is very far in the future; but if I am right in believing that the PLA's recruitment is filled by volunteers, and since I presume that the Chinese Government have no intention whatever of pressurising anyone in Hong Kong to volunteer, it would be most helpful if they said as much.

There is much concern about various matters to do with nationality and travel documents. These will be debated next year, but I add that to the list, in spite of the fact that other noble Lords have covered it, because the concern felt is so bitter and personal. I am glad that the noble Baroness repeated the assurance that no one will be left stateless. But this change in the status of Hong Kong, I am afraid, may well throw up rather unexpected nationality problems which must not be brushed aside. Moreover, there are special cases—I mean some people to whom we have a clear obligation to provide a home if they wish to make one in the United Kingdom, regardless of our expectation that Hong Kong will continue to be a free, happy, prosperous and indeed safe place for them to live in.

Then there is the question of the external commercial relations of the Special Administrative Region. Annex II of the Joint Declaration provides that the Joint Liaison Group will consider action by both Governments to obtain agreement of third countries to the external commercial relations of the future administrative region continuing as at present, and also its membership of international organisations. This is crucial to the future prosperity of Hong Kong, and to investment in that future. I ask the noble Baroness whether she is able to say whether she has any indications at this stage of the attitudes to this of any of the principal governments concerned.

Finally, there is the question of constitutional reform, so that the colonial administration can change into the representational government, with an elected Legislature, to which the executive will be responsible. Under the agreement this is to be provided for the Hong Kong Special Administration Region in 1997. Given the length of electoral cycles, there really is not long, and certainly not long enough, for any mistake, and at some stage, I presume, we have to make sure that what is proposed is acceptable to the Chinese People's Government and at least is not in conflict with the Basic Law. I suggest that this is very much a matter for local judgment, leading to the solution of this local problem in a local way and not necessarily a Westminster way. The recent White Paper of the Hong Kong Government indicates the step-by-step procedure that they will adopt.

Our experience of constitutional reform in developing countries has been mixed. I have two general points to make which your Lordships may find reassuring in the case of Hong Kong. The first is the Hong Kong people and their press are no strangers to politics in the sense of interest in the affairs of their city. Already there can be few communities in which so many individuals actively participate in one way or another. In fact, the basis for wider participation in government, and for familiarity with working electoral procedures based on adult suffrage, has been carefully laid over a number of years. Now that the Chinese Government have agreed to the principle of an elected legislature, that can be built on as the Government think best.

But does the Minister of State agree that it may be difficult to get full support for the idea of more representative government by more and better elections alone? Will public interest not focus much more on who has power; on how many more local people are promoted to the top jobs in the public services, and how quickly; and on whether some more direct responsibility is given to some members of the Legislature? I know that I have just said that that is a matter for local decision, but if the noble Baroness has any thoughts on this they would be of very great interest.

That brings me to the second point. Whatever route to representative government is chosen, certainly we need have no fear whatever about the capacity of the Hong Kong people to govern themselves. Whether in the public services or among the public who already participate in government on committees, boards or councils, talent and dedication are there in profusion. I am very glad that the committed band of expatriates in the public service may continue to serve Hong Kong, like their local colleagues, under the same conditions of service and pension as at present.

In parenthesis, I should point out the heavy responsibilities that these arrangements are going to place on the present 30 to 45 years age group, particularly of young professionals. As any noble Lord who has visited Hong Kong knows, they are a particularly bright and competent lot. They will be reaching their peak during the transitional period, and they are very well-qualified to ensure the administrative, economic and cultural success of the Special Administrative Region. I trust that publication of the Joint Declaration and its annexes will reassure them and encourage them to stay on.

In conclusion, I have two rather general points. This is a brilliantly drafted agreement. It provides Hong Kong with an excellent opportunity to continue its prosperity, stability and lifestyle under the Chinese flag; but there is no automaticity. The opportunity will have to be seized, protected and encouraged, not only by the signatories, but, above all, by the people of Hong Kong themselves, and their leaders. As the Monitor's report states, the future is in their hands. For my part, I have great confidence that with their realism and adaptability they will surmount this challenge as they have surmounted so many challenges to their survival in the past.

Secondly, and lastly, we have every reason to be grateful to the Chinese leaders for their vision and courage in offering this imaginative solution to a problem rooted in such emotive history. But I believe, too, that this agreement is of wider significance than the problem it covers. Certainly it has been so regarded by many of the keenest observers in America, Japan and Hong Kong. No Chinese Government could have proposed it, far less agreed to it in such specific terms, unless it totally excluded the extremist policies that have racked China in the past, and unless it was firmly committed to a long period of modernisation and raising living standards, and to reform domestic administration and develop external commerce to achieve it.

Over the last five or six years we have seen this pragmatic, economy-oriented, open-door policy beginning to work and gathering momentum. After these 150 years of foreign intervention, revolution, civil war, war, civil war, revolution, and then the years of continuing revolution that followed, surely we wish this new process well, for the sake of China, for the sake of Hong Kong and for the sake of our relations with both. I support the Motion.

5.21 p.m.

Lord Geddes

My Lords, it is my honour to be the first from these Benches to congratulate my noble friend Lord Birkenhead. I join with the noble Lords, Lord Rhodes and Lord MacLehose, in offering real plaudits and a warm welcome to the noble Earl, particularly in a debate as important as this, on which he clearly has very considerable knowledge. My research also shows that the noble Earl and I succeeded to your Lordships' House in the same year. To have here another member of the Class of '75 must be a good thing.

Secondly, I must apologise to my noble friend the Minister of State because I have failed to advise her, as I said I would try to do, of the topic or topics on which I shall touch this evening. I am afraid time not only caught up with me, it positively overtook me. I did, however, listen intently, and, if I may say so, with real reassurance, to what she had to say. I very much look forward to her summing-up at the end of this debate.

I also listened to and have subsequently read the speeches made in another place last week on 5th December. As one keenly interested in Hong Kong and its future. I warmly welcome what was said by my right honourable and learned friend the Secretary of State and by my honourable friend the Minister of State.

I had the privilege of being in Hong Kong both immediately before and immediately after publication of the White Paper. The many Chinese with whom I spoke welcomed it, though I also heard, as has been said by other noble Lords this evening, that many were guarded in respect of faithful implementation by future Chinese officials—and here I very much support what the noble Lord, Lord MacLehose, said, officials rather than leaders. For all that, the White Paper is not just a good agreement, it is an outstandingly good one. I gladly join in with all the noble Lords who have congratulated both the British and the Chinese negotiating teams on a very remarkable job, superbly done.

There are inevitably matters arising and gaps to be filled. Other noble Lords have concentrated, or will concentrate, on the vital aspects of the Basic Law, representation in Hong Kong Government, the Joint Liaison Committee, the preservation of human rights, conscription and all the other issues that are either outstanding and/or of concern to the people of Hong Kong. It will not surprise some of your Lordships if I restrict my remarks to the issue of nationality. It may conceivably be that the noble Lord, Lord Rhodes, had that in mind during his speech.

As has been said before in your Lordships' House, it is quite remarkable how retentive one's own memory is of what one has personally said on past occasions. On 21st May 1984, I expressed in this House fears that unless there was an ultimate bolt-hole or some escape route built into the agreement, an exodus of vital middle managers from Hong Kong could—and I emphasised "could"—develop. Such an escape route has been built in by way of the Exchange of Memoranda of 26th September 1984 and, certainly to date, no such exodus has taken place, nor indeed do I expect one. However, I still see three problem areas on the nationality issue. I unashamedly bring it up this evening in your Lordships' House, even though I may be accused of anticipating the debate on legislation next year. The three areas of concern, as I see it, are the acceptability of the new British passport, the restriction of transmissability and the statelessness of a minority of Hong Kong residents.

Regarding the passport acceptability, Mr. Howard Young, a Hong Kong urban councillor, has done a most interesting analysis of visa requirements for holders of United Kingdom British passports as compared to the British dependent territories citizens' passports. This analysis encompasses 180 countries worldwide, of which about 100 allow entry without visas to United Kingdom British passport holders, as against 70 to BDTCs. The difference of 30 includes, according to this analysis, most South American countries (Brazil, Chile, Colombia, Peru and Uruguay), all Scandinavian, three European (West Germany, Austria and Spain) and, perhaps most immediately relevant to Hong Kong, two Asian countries—Japan and Indonesia.

Not for the first or last time, I remind your Lordships, as you have already been reminded today, that Hong Kong's success is its people. Hong Kong has no other natural resource. For Hong Kong's continued prosperity—which is clearly as much in China's interest as anyone's—its people must be able to travel as widely and as freely as anyone else.

My honourable friend the Minister of State said in another place last Wednesday: Her Majesty's Government will do all they can to secure for the holders of those passports"— new passports— the same access to other countries as that enjoyed at present by holders of British Dependent Territories citizens' passports". That was most welcome. Nevertheless, if only to reinforce it. I do urge on the Government to prevail on all countries, and particularly those that I have mentioned, to lift their visa requirements now for Hong Kong BDTC passport holders and, secondly, to ensure that the holders of the new British passports from 1997 will in no way be disadvantaged relative to their previous BDTC status.

This brings me to the question of what that new passport will be called—or, rather, what exact title of citizenship a holder thereof will have—and when it will be issued. On the first point, some of your Lordships may recall the series of amendments to which the Government agreed at the Third Reading in this House of the then Nationality Bill in October 1981. I see the noble and learned Lord opposite. Lord Elwyn-Jones, does indeed recall. More seriously, I stress again the importance of the word "British" coming first in whatever title may be produced by the Government. Such prominence of the word "British" need not—almost certainly will not—in any way grant or imply right of abode in the United Kingdom, but it is of importance, certainly to all Hong Kong Chinese to whom I have spoken, out of all proportion to the weight that I think many of your Lordships attach to it when debating it in this House.

Secondly, there is the date of issue of these new British passports. An argument has, I understand, been put forward regarding the logistical problem of issuing, say, two-and-a-half million such passports on 30th June 1997, and suggesting that they should therefore be phased in earlier. Personally, I can see no disadvantage in issuing such passports earlier, provided that their holders are not thereby deprived of their BDTC passports before 1st July 1997. If some mechanism could be found so that the two could run in parallel it would seem to eliminate that logistical problem. It would avoid any erosion of confidence—this is something, I know again, that has really been concerning the Hong Kong Chinese—and would also give a good practical test to the acceptability of the new passport without the possibility of disadvantaging the holder, in that he or she would still be able, in case of problems, to fall back on the concurrent BDTC passport. It would also give time to iron out any problems, if indeed they were found to exist.

My second main problem area is the restriction of transmissibility of the new British citizenship and therefore passport. The United Kingdom memorandum of 26th September this year is, quite clearly, very specific on this point. It says that no person born on or after 1st July 1997 will acquire the status that will entitle him to continue to use passports issued by the United Kingdom Government—that is, the new British passport. I have been advised that the remarks attributed to Mr. Chi Peng-Fei, remarks that I passed on to your Lordships in our debate on 21st May—namely, that China would allow ex-BDTC passport holders to have two passports for two generations—are not acknowledged by the authorities in Peking. On the other hand, I, with many others, at a meeting last Monday with members of Hong Kong's UMELCO heard repetition of exactly those remarks alleged to have been made by Mr. Chi. Since this is—I do stress it—such an important and such a sensitive subject, I urge my noble friend the Minister again to discuss it with the authorities in Peking. As the right honourable member for Down South said, albeit on a distinctly opposite course to mine, in another place last week, the associated exchange of memoranda are not technically part of the agreement.

Since the question of transmissibility is addressed only in the exchange of memoranda and not in the agreement, could this not obviate the stricture of which my right honourable and learned friend the Secretary of State uttered on 5th December when he said that, any attempt to change the draft agreement would risk disturbing the whole delicate balance that had been established".— [Official Report, Commons, 5/12/84; col. 395.] My third main area is that of statelessness. In this context I was very relieved to hear what my noble friend the Minister of State told us earlier this afternoon and to note the remarks in another place last week by my honourable friend the Minister of State at column 469. They both addressed the potential statelessness of non-Chinese national BDTCs and of children born after 30th June 1997 to ex-BDTCs.

But there is also the category of non-Chinese nationals who may be resident in Hong Kong on 30th June 1997 but who will not have been resident for long enough to have become BDTCs. I ask my noble friend: "What will happen to them?". More generally, there does appear to be inconsistency between the British and Chinese memoranda of 26th September. To paraphrase, the British memorandum states that all BDTCs on 30th June 1997 will be eligible for the new British citizenship and therefore the passport. The Chinese memorandum, on the other hand, restricts the use of United Kingdom travel documents—dare we say passports?—to, Chinese nationals in Hong Kong who were previously BDTCs". Does this mean that Peking will not permit non-Chinese, ex-Hong Kong BDTCs to hold the new British travel document and reside in the Hong Kong SAR? My noble friend the Minister of State said—I wrote down the words very quickly lest I forgot them—in this context, "whatever their origin". I think that this is an important point and I hope that my noble friend will be able to reply to it.

Here we come to yet another dilemma. If the Government comply fully with their obligations under the 1961 Convention on the Reduction of Statelessness, as indeed they have said they will, and as my noble friend repeated this afternoon, and in particular with that part of Article 15 which reads: This Convention shall apply to all non self governing, trust, colonial and other non-metropolitan territories for the international relations of which any Contracting State is responsible the result will, as we have heard from the noble Baroness, be that such persons who would otherwise have been made stateless, will get some form of British citizenship. I ask this question—and I think that the noble Lord, Lord Rhodes, made the same point—"Is that not going to be a bitter pill for others to swallow—that is, those who will not become stateless but who would nevertheless welcome such British citizenship of whatever nature that may be?" Is there not, at the very least, a strong moral argument to offer the same form of British citizenship to the non-stateless ex-BDTCs and their children?

I may have appeared negative with regard to the agreement. I am not, I can assure your Lordships. It is, I think, a superb agreement. I consider it the result of truly masterly negotiating by the Governments both of the United Kingdom and of China. Much has to be done. Even more can, and I am sure will, be achieved. But safeguards, including those that I have instanced, need to be obtained. I warmly endorse the suggestion made in another place last week, and repeated several times in your Lordships' House this afternoon, that this Parliament not only should but must watch with great care events in and of Hong Kong over the next 12, if not 62 years. Yes, my Lords, let us have an annual report and, I hope, an annual debate, although not, I trust, just to and in the House of Commons, as the Minister of State is reported at column 467 as saying in another place last week.

We say to Hong Kong this afternoon and, if we can have this debate annually, we shall be able thereafter each year to say to Hong Kong: "We have not washed our hands of you. While to an increasing extent your future Hong Kong is now in your own hands, we are here to help you all we can."

5.38 p.m.

Lord Lindsay of Birker

My Lords, I should like to join other noble Lords in congratulating the Foreign Office on the very great skill with which they have conducted these negotiations over the future of Hong Hong. Likewise, we should be very grateful for the goodwill and reasonableness shown by the representatives of the People's Republic of China. When my wife and I were in Hong Kong in August last year, we found that local opinion made an unfavourable comparison between the legalistic approach of the Prime Minister and the action of the Portuguese authorities who were all ready to move out of Macao when the Chinese asked them to stay on.

In the West, a tradition of respect for law goes back to classical Greece and Rome. There is no such tradition in Chinese history. Law was simply an instrument through which the government controlled its subjects. It was therefore stupid to appeal to principles of western international law, especially when the Chinese maintain different principles, that treaties imposed by military force were not valid. We should be pleased that neither side allowed this initial bad start to hinder the progress of negotiations.

The only point over which I felt some doubt about the British handling of the negotiations was in accepting the demand for secrecy. This certainly increased anxiety in Hong Kong, where people felt that their fate was being decided behind their backs. I appreciate that there were advantages in secrecy, but the British would have had a strong case for saying that they had an obligation to the people of Hong Kong, who therefore had a right to know what was being decided. A continuing anxiety shows in the statement circulated by the UMELCO representatives in which they say, "There are also very strong requests that the people of Hong Kong should not only be consulted on, but should actively participate in the drafting of the Basic Law and that Hong Kong people should also sit on the Sino-British Liaison Group." I think it is a very hopeful sign that the People's Republic of China agreed to the retention of the legal system with the protection of human rights, because the protection of human rights by law is a break not only with Chinese tradition but also with Communist tradition. The traditional Chinese system was a paternalistic and authoritarian one in which the rulers controlled the people by giving an example of virtue. There was no idea of a legal system giving ordinary citizens enforceable rights against officials. For long periods this system provided government which was admired by Europeans, including such men as Voltaire, but it always tended to degenerate until oppression produced peasant rebellions and a period of civil wars or barbarian invasions until finally a new dynasty came into power and restored the system.

On the Communist side, Lenin was inclined to regard law as an instrument to maintain the ruling class so a dictatorship of the proletariat had no need of law to protect the common people against the government. When Chinese critics in 1957 compared the Communist Party to the ruling bureaucracy of the Empire, the official reply was that it was impossible for a Communist party to have interests different from those of the masses. If some Communist officials had behaved badly, this could only be because they had been corrupted by influences from the old society or the capitalist West. People will put up with a great deal when they do not realise that anything better is possible. Once they do realise that it is possible for law to protect the common people from arbitrary action by officials, the idea of the rule of law has an obvious attraction even for reasonable Communists, and the rule of law now figures in the programme of the present Peking regime.

As a parenthesis, I might remark that I say "Peking" because I think "Beijing" is an affectation when talking to an English-speaking audience. Peking has been English usage for something over 200 years and I think the people who insist on saying "Beijing" should also start to say "Wien" for Vienna, "Firenze" for Florence, "Muenchen" for Munich, and so on.

Few people on Hong Kong would feel anxious about the future if they could feel certain that the party line of the Chinese Communist Party would continue to follow its present trend. What worries them is that Deng Xiaoping obviously faces opposition from some elements in the party and the bureaucracy who might gain power in the future and return to past policies. I think to understand the depth of this worry one has to know something about the very wide fluctuations there have been in the Chinese Communist line between reasonable moderation and doctrinaire extremism.

During the war against Japan, the Communists followed a reasonable programme that was extremely successful. There was limitation of rent and an efficient progressive tax system. Peasants who had raised themselves from poor peasant to rich peasant by efficient farming were praised as "labour heroes". A distinction was made between good landlords and bad landlords. At the village level there were genuine elections with many more candidates than positions to be filled, and there was some respect for due process. A friend in the Public Safety Bureau told us that there were a number of people whom they suspected of being Japanese agents but they had not arrested them because they had not been able to obtain definite proof. My wife and I lived for two and a half years in the Commuist-held countryside and it is clear that the Communists had very strong popular support. People felt that. for the first time, they had a government which actually tried to help them. I think if these policies had been followed for a few more decades China would have realised Sun Yat-sen's slogan of "The cultivator owns his land". because the limitation of rent and a tax system that discriminated against unearned income made land holding a rather unprofitable investment, so that landlords tended to sell out to their tenants and put their money into trade or industry, which the Government actually encouraged.

Then you had the big swing. After attempts to avoid the civil war had failed there was a long period of nearly 30 years when the Communists followed some very doctrinaire policies that caused widespread suffering and injustice. In the countryside they returned to the policies of the Chinese Soviet Republic in the early 1930s, conducting class warfare against all landlords and all rich peasants, with very large numbers of executions. Agriculture was collectivised in the mid-1950s, although official statements admitted that individual middle peasants had been producing 20 or 30 per cent. more per acre than the very great majority of collectives.

In other things the years from about 1954 to 1957 represented a swing back to moderation. Then came the communes and the Great Leap Forward of 1958. These were supposed to produce "good clothes and enough to eat". The actual result was a fall of about 25 per cent. in agricultural production and near famine conditions over large parts of China. There was a slight swing back to moderation in the early 1960s. Then came the great Great Proletarian Cultural Revolution. Mao followed the critics whom he had suppressed in 1957 by denouncing the party bureaucracy and advancing the slogan that it was right to rebel. The first result was fighting between factions with weapons escalating from sticks and stones to machine guns and, in a few cases, to artillery. The army restored order in 1968 but a great deal of power remained in the hands of left-wing extremists, who followed Mao's slogan, "Never forget the class struggle", and abused their powers, creating a very unpleasant atmosphere of hysteria and fear.

I would like to give one example of the kind of thing that happened. When I was teaching at Yenching university I knew a workman in the power station. We were both involved in the anti-Japanese underground. He was arrested and tortured by the Japanese but did not give away any of his associates. When I met him again in 1983 he said that during the Cultural Revolution he had been attacked as a Japanese agent. That is the kind of thing that has happened. Then the universities were closed for several years, and when they were re-opened students and faculty were chosen on the basis of class origin and political orthodoxy. Students spent about half their time working in factories or on farms, and a good deal of the rest in political indoctrination classes.

The Deng Xiaoping regime proceeded to conduct some examination of recent university graduates who were doing scientific work in Shanghai, and found that about two-thirds failed at elementary mathematics, nearly three-quarters at elementary physics and rather more at elementary chemistry. This has given the present Chinese regime an appalling headache with lack of trained people. During this period, a long series of promises were dishonoured. Perhaps the most important to the people of Hong Kong is the promise made to Tibet in 1951 that Tibet could be a special region with a very large measure of autonomy. This promise was repudiated in 1958, leading to the Tibetan revolt of 1959.

Given all this, it is quite understandable that the people of Hong Kong should be afraid that the Chinese Communist Party might return to its past policies. I think actually the risk of this has become very small. For one thing, a shift back to previous policies would get no popular support. In 1983 many older people said to us that they had been enthusiastic supporters of the regime in the early 1950s. They excused several things they did not like because they believed they were building a wonderful new society. They had been partly disillusioned by the Great Leap Forward and completely disillusioned by the Cultural Revolution. Many people said that the only extenuating feature of the Cultural Revolution was that it had completely discredited the ultra-Left line in the party.

For another thing, the policies followed since 1978 have been so obviously successful. In the economic field, the move away from collectivised agriculture has produced a very large increase in production and raised the standard of living in the countryside. At one time, real incomes in the cities were two and a half to three times higher than those in the countryside. Now, many farmers have higher real incomes than most people in the cities. It is proving harder to introduce initiative in industry and to get away from the inefficiency of a highly centralised planned economy, but progress is being made. It is quite possible that productivity and living standards could rise to the level that has been attained in Hong Kong, Taiwan, or even Japan.

On the non-economic side, there has been a huge improvement. In 1973 my wife felt that the social atmosphere was worse than under Japanese occupation. Some people told us that since the Cultural Revolution, people felt it safest to avoid any social contacts outside the immediate family. In 1983 there were still restrictions on public political criticism, but people would talk very freely in private conversation, even in the presence of party members. One could have free discussions in trains or on buses. A permit is still needed for residence in major cities, but travel seems to be free. We met by chance one fairly old woman who had just retired from her job and was spending two years travelling round China before going back to live with her son. Famous temples that had been almost deserted in 1973 were full of Chinese tourists in 1983. The price of greater freedom has been some increase in ordinary crime, but people said in 1983 that this was being reduced.

All this means that an attempt to return to past policies would get no co-operation from the public but would probably produce general non-co-operation. We had long talks with some old friends from the war-time period who had been in trouble during the Cultural Revolution but had ended their careers as Ministers and were now on the new Advisory Council. They said that reasonable people had a majority on the Central Committee and what they hoped to do while they were still active was to ensure that reasonable people succeeded them.

Finally, as the noble Earl, Lord Birkenhead, so rightly said, there is a very strong inducement for winning genuine support in Hong Kong, because if you had a really successful Special Administrative Region in Hong Kong this would pave the way to a similar arrangement with Taiwan. I have not yet had the opportunity to read the recent pronouncement on the need to rethink parts of Marxism, but this may be of decisive importance. Large parts of Marxism are not false but only grossly over-simplified. What struck me in discussions with Chinese communists was their reluctance to think beyond the number two. A choice would always be between two roads, though even an ordinary crossroads offers you a choice between three—left, straight ahead or right. An effect always followed from a single cause, not from an interaction of several variables. I was interested to find that a member of the UMELCO delegation had had the same impression.

I might sketch one possible development from a rethinking of Marxism. Marx did not fully develop his ideas on the Asiatic mode of production but he did recognise that there were societies in which the rulers based their power on control of the apparatus of the state and not on ownership of the means of production. Suppose the Chinese leaders recognised that ownership of the means of production was not the only possible basis for exploitation, that a ruling Communist Party in a socialist system might degenerate into a new privileged and oppressive exploiting group, and this degeneration had clearly happened in the Soviet Union. They would then conclude that a Communist Party could avoid degeneration only by allowing free criticism and giving ordinary citizens power to control the party. The result would not be Western-style parliament democracy, but it could be a society with a great deal of freedom in which the government had a genuine claim to represent the people.

Revised Marxism would be a much better philosophy than that of many Western intellectuals, which has destroyed their ability to follow a process of rational inference. It is rather shocking how far this has gone. My prize example was a dean of the unit in which I used to teach who refused to admit that there was any connection between continuing an academic programme leading to an MA degree and continuing to provide the teaching that would make it possible for students to get the degree.

Finally, I might comment on two other points. Representative government in Hong Kong is starting with 12 members elected by local councils and 12 by functional constituencies. Members of the UMELCO delegation expressed the hope that the British authorities would not press for rapid development to direct elections by universal suffrage. Some years ago I heard the same opinion from other people in Hong Kong. After all, there are many countries which started off with parliamentary institutions and universal suffrage but rapidly degenerated into dictatorships, usually pretty unpleasant dictatorships. One of Sun Yat-sen's sensible ideas was political tutelage. He recognised that constitutional government could work only if there was a process of gradual development, starting with elected bodies at the local level. I think another point is that there is a very strong traditional feeling in China which prefers government by consensus rather than a system which works by competition between parties.

The other issue which other people have mentioned is British dependent territory passports. Last year in Hong Kong we found a widespread feeling that the United Kingdom Government had behaved rather badly. It had been known for a long time that these passports were not valid for residence in the United Kingdom hut, so long as this was not put on the passport, other countries accepted them as British passports. When some official decided to put this non-validy on BDT passports Hong Kong residents then had to get visas. There was also, I think, a general feeling of grievance over British immigration policy. Holders of BDT passports have taken an oath of loyalty to the Queen. Many of them have been educated in England and could fit easily into British society, to which they might make a useful contribution. I think that a few thousand businessmen from Hong Kong might do quite a lot to reduce unemployment.

These people see that the United Kingdom has accepted many immigrants who are almost unassimilable and can contribute nothing except completely unskilled labour, while they are kept out. In Hong Kong last year we met one young man whose father had worked for the BBC and whose mother was German. He had been educated in England. He had been a member of the Hong Kong Volunteers. When in England, he said he wanted to join the British army. The British officials told him that they would take him into the army for four years, after which he would have to leave the United Kingdom. He also complained that the British officials were very rude and actually misrepresented what he had said in some of the documents they produced. I do not suggest that the United Kingdom should accept Hong Kong immigrants by the tens of thousands, but I think it would be fair to give the holders of British dependent territory passports some special consideration in individual applications.

5.59 p.m.

Lord Fanshawe of Richmond

My Lords, I should like to pay tribute to my noble friend Lord Birkenhead on his remarkable maiden speech, which all of us listened to with close attention earlier on this afternoon. The knowledge that he obviously had about Hong Kong and China, about the economic position and the political position, and the way that he stressed and spelt out the problems which confront all of us, particularly those in Hong Kong, regarding the developments in the next 10 or 11 years, impressed us all. I look forward to hearing many more speeches by my noble friend.

Personally I feel—and this seems to have come over this afternoon—that the agreement which has been negotiated is much better than anything that I, and I think most noble Lords, expected even six months ago. It has been a great achievement for the negotiators, the officials, the Ministers and everybody involved in the Foreign and Commonwealth Office here at home and the Chinese officials in Peking.

But I am slightly disturbed by the euphoria which seems to be around in certain areas. Certainly from reading Hansard it seems that there was a feeling of euphoria during the debate in the other place last week. That is unfortunate because it has become increasingly clear this afternoon that here in your Lordships' House there is no euphoria. In my view the speeches—and I have heard them all this afternoon—have been realistic, praising the agreement and the negotiations, as I have done. But there has been a real understanding by the many people who have spoken (most of whom know China and Hong Kong very well) of the dangers and realities which face not only the people of Hong Kong, but also the people of the People's Republic of China.

All of us must have been impressed, as we expected to be. by the words of the noble Lord, Lord MacLehose of Beoch, with his knowledge and experience of Hong Kong—I think that he is the longest serving governor ever in Hong Kong—and he has great and detailed knowledge of China as well.

Some years ago, in 1972, as Minister responsible for Hong Kong under my noble friend Lord Home of the Hirsel, I went to Peking to negotiate the exchange of ambassadors. We succeeded in doing that at a time when the cultural revolution had just finished and at a time when there was clearly a change of attitude, although not yet the dramatic change of stance which became apparent a year or two later. The fact that, as a result of those negotiations, we put a remarkably able British ambassador—Sir John Addis—into position in Peking. and Mr. Sung was appointed here in London, helped to accelerate the change in attitude between the People's Republic of China and the United Kingdom. In the last few years we have seen this accelerate at a quite dramatic rate.

The noble Lord, Lord Lindsay, who has just spoken, and who fascinated many of us with his deep knowledge of China, having lived there for many years, underlined the extraordinary changes which are taking place, and which were commented on by my noble friend Lord Birkenhead in his maiden speech. We are now seeing this nation of 1,000 million people turning from a Marxist to a capitalist society. This enables all of us who have at heart Hong Kong's interests and relationships between the United Kingdom and China to view more comfortably and optimistically the approach to 1997.

However, as my noble friend the Minister of State will be the first to admit, there is scepticism around—indeed, quite a lot of scepticism—about what might happen. In her opening remarks this afternoon my noble friend the Minister of State—like, in the other place last week the right honourable gentleman the Secretary of State for Foreign Affairs and his Minister of State—answered some of our fears, certainly many of my own fears and concerns, and that seems to be true so far as other noble Lords are concerned, judging from their reaction this afternoon. But needless to say, like other noble Lords I have questions which I should like to put to my noble friend.

First, there is the matter of the elections. I hope that we shall proceed with great caution. While we have read the details of the first moves which Her Majesty's Government are making to bring about a change in the system of representation within Hong Kong, the very real dangers of political parties building up within Hong Kong and of the fighting that might take place—and by that I mean electoral fighting—between Nationalist party candidates and Communist party candidates could have a very grave effect on the stability of Hong Kong during the next 10 or 12 years. I wonder; and I ask this question: can a free democratic system really flourish if at each election candidates and voters risk being called to account in 1997? That is also an aspect which we perhaps should not forget.

Obviously the advantage of having a democratic system in being and in place in 1997 would be overwhelmingly helpful to the successful transfer of power at that time. But if it is possible, I should like my noble friend the Minister of State to try to tell us a little more about how she sees this developing, how she sees particularly the problem of political parties.

Secondly—and this is a point which I do not think has been raised this afternoon by any Member of your Lordships' House—will it be possible for China to prevent the envious living in Kwantung Province crossing into Hong Kong after 1997? I mention that because as a Minister—and my noble friend Lord Home will remember this himself—I knew that one of the big worries that lay on the plate of the noble Lord, Lord MacLehose, was the constant infiltration of people who lived in Kwantung Province or in Canton over the border into Hong Kong. Indeed, although the subject has not been mentioned today (and I suspect that it was not mentioned in the debate in the other place last week) even now there are a number of refugees, a number of people who live in Kwantung, who cross the border and come into Hong Kong. We therefore keep large security forces in order to control the border.

I know that at present the People's Republic of China keep their own army 20 or 30 miles back from the border on the Chinese side and they have managed to control the flood and the flow of refugees. But obviously when the system which at present exists in Hong Kong comes to an end in 1997, the Chinese Government will be faced with a major problem. I should be interested to hear whether my noble friend the Minister of State has any comments to make on this major problem.

The third point that I want to raise—and it was raised in great detail by my noble friend Lord Geddes in his speech earlier this afternoon—is that Britain should stand firm on the passport issue. I hope that my noble friend will continue to make clear that those who choose to take up British nationality have the inalienable right to retain it in the years ahead and that those now eligible to receive British passports should be allowed to receive them up to 1997.

The preservation of existing passport status and rights is widely seen in Hong Kong as a key test of credibility and of the guarantees. The statement made by my right honourable friend the Secretary of State in another place last week and the statement made by the Minister of State in even greater detail this afternoon, which I and other noble Lords have already welcomed, that assurances are given so far as the stateless people in Hong Kong are concerned, is comforting. Certainly those of us who hope to play a part when the legislation comes before this House will look at the Bill in great detail so far as it covers nationality, passports and stateless people in Hong Kong.

The noble Lord, Lord Davies of Leek, raised a most important point about pensioners with the noble Lord, Lord Cledwyn, after he had made his interesting and valuable speech at the beginning of the debate. I sat for many years in the other place with the noble Lord, Lord Davies of Leek, and on many occasions we saw British colonies come to independence and there then followed a great deal of misery and poverty for British pensioners because we had not safeguarded this very important point.

I think that the last two points which I want to make have already been covered; but I should like to touch on them again. The first concerns the Joint Liaison Group. I do not see why we cannot have "unofficials" as well as "officials" on this group. This was mentioned in practically every speech in the other place and it has been mentioned continuously this afternoon. In the other place the Secretary of State did not answer the question, but I hope that this afternoon my noble friend the Minister of State will be able to tell us that we shall try to arrange for "unofficials" to join the Joint Liaison Group, because this will help to maintain confidence. Of course, this also includes "unofficials'" involvement in Basic Law drafting, which could take place with the Joint Liaison Group itself.

It is most important that our role in the United Kingdom continues. This point has been made by two noble Lords this afternoon, and I should like to make it myself. I remember that when I first became interested in Hong Kong in 1964 there was total uninterest in both Houses of Parliament in the colony of Hong Kong. At that time many other issues were important, including the problems of Africa and the problems of other parts of Asia. So no interest at all was expressed in Hong Kong.

At that time several of us got together and formed the Anglo-Hong Kong Parliamentary Group, which flourishes today. This group, which at the Hong Kong end was helped by a most enlightened and well-known figure in the Hong Kong Government, Claude Burgess, played an important role in enabling people in Hong Kong to realise that the British Parliament—and, after all, at the moment the only method of democratic representation that they have in Hong Kong is through our Parliament here—was really interested in what went on in Hong Kong, and that there was a group of people who would fight their corner here at Westminster.

The idea of having an annual report and an annual debate might continue the feeling of togetherness between Hong Kong and Westminster during the next 12 years. I know that this idea would have the support of the noble Lord, Lord Cledwyn, who made the point in his opening speech, and I hope that this idea will receive a sympathetic response from Her Majesty's Government, which seemed to be indicated both in the other place and by the Minister of State today.

I should like to comment on the Hong Kong press and media, who have played an important role in maintaining the democratic debate in Hong Kong over many years. I do not think that any of us would wish to underestimate the crucial role that they have played. But I deplore the attacks about which we have been reading, not only on this occasion but also on the occasion of our debate earlier in the year, on the unofficial members of the Executive and Legislative Councils who have come to Britain to try to brief Parliament on the feelings of the people of Hong Kong. They have carried out that task with a selfless duty which is worthy of the admiration of all of us in both Houses of Parliament, and I should like to put that on the record this afternoon. They have educated political opinion at Westminster in a way which would not have been possible by anyone else.

From conversations on the telephone that I have had over the weekend with people in Hong Kong, I fear that, following the debate in the other place last week, there has also been a feeling that in some way these debates in both Houses are a sort of rubber-stamp operation. I should like to assure those people of Hong Kong 'who read the report of this debate today that that is just not so; that the speeches here today—which have been realistic, helpful and knowledgeable—underline our concern, which is the same as that of Hong Kong residents. It is that China will honour the agreement in spite of the possible changes within China's political system during the years ahead. I believe the likelihood is that China will honour these changes, and subject to no major upheavals in the next 50 years will work to ensure that the agreement functions. It is in Chinese interests, in British interests and in Hong Kong's interests that it should do so. As was made clear by the noble Lord, Lord Lindsay, and by my noble friend Lord Birkenhead, they have a need to follow the example of a success in Hong Kong in order to obtain the reunification of Taiwan with the Chinese People's Republic. But it is also important for economic reasons which have been mentioned by many other noble Lords today.

With some diffidence—and realising that it is very unfashionable in China, I thought that I might quote from a first edition of the Thoughts of Chairman Mao, which I possess. On page 310 of the first edition he says: We must learn to do economic work from all who know how, no matter who they are. We must esteem them as teachers, learning from them respectfully and conscientiously. We must not pretend to know when we do not know". With those few words, perhaps I may say that much has already been achieved by the negotiators in producing this excellent agreement; but more battles are worth fighting, both for China's sake and for Hong Kong's sake.

6.17 p.m.

Lord Greenhill of Harrow

My Lords, I should like to join other noble Lords in paying tribute to the noble Earl, Lord Birkenhead. He has to maintain a very high family reputation for speech-making, and I think we would all agree that he did much this afternoon to uphold it.

I wish to intervene only very briefly on one particular aspect of the matter under consideration. But before I do so, I have no hesitation in saying that I support the signature of this agreement. Like the noble Lord, Lord Fanshawe, I was surprised at how detailed and specific it was, and encouragingly so; but it contains imperfections, and these imperfections have been adequately aired in the House this afternoon. I have concluded that, given the circumstances, it is as good as we can get.

Our thanks are due of course to the British negotiators. There were several of them, from the Secretary of State downwards, and Sir Edward Youde has particularly been mentioned. It is ironic and perhaps a good omen that his career in China started 30 or more years ago in that he played a very courageous and personal role in the hostile incident of HMS "Amethyst"; and it is encouraging to see that his career has climaxed in an agreement which makes our future relations with China quite different and more assured.

However, it is not only to the negotiators on the last phase that we must pay tribute. I should particularly like to mention the noble Lord, Lord MacLehose, who has been very modest about the part that he has played in all this. For many years he worked very hard towards this satisfactory conclusion when he was working among many sceptical people. But such agreement looking to the future must inevitably have uncertainties, and who can forecast developments confidently in the years ahead? It is by no means clear that the Chinese Government have yet found the secret of ruling and administering a country of a billion people. Hong Kong will continue to be—and there is no discredit in this—a volatile community; so there are risks ahead. But we must accept the agreement and be sincere in our attempts to fulfil its spoken and unspoken terms. This is the only realistic thing to do.

But the particular point that I want to make does not concern the terms of the agreement; it concerns whether Her Majesty's Government are going to take legitimate advantage of what has been achieved. Over the last few decades Her Majesty's Government have been preoccupied by the problems of administration, defence of the colony, and the related differences with the People's Government of China. The commercial and industrial aspects of our relationship with Hong Kong and the People's Republic of China have perforce been prejudiced and have taken second place.

Using the confidence to which the United Kingdom had contributed so much, the United States, Japan, and European countries have in the past and much more so now increased their trade and investment in Hong Kong and China. The United Kingdom lags far behind. We have drawn only small advantage from our historical links with Hong Kong, and indeed studies show that we have in recent years derived no economic advantage whatsoever from this connection.

This has to change, and in the interests of our own economy at home we have now to try to get a bigger share of the opportunities likely to open up in Hong Kong and the People's Republic of China in the new circumstances. Others are already doing so. I hope that British business will think hard about these chances and act upon them, and that Her Majesty's Government will give all possible encouragement and help.

6.22 p.m.

Baroness Vickers

My Lords, may I first congratulate my noble friend sitting behind me on his very interesting speech. I should also like to congratulate my right honourable friend the Foreign Secretary on the splendid work he has done in regard to these proposals. I have always admired him, whatever office or appointment he has undertaken. This is one time when we can all of us congratulate him most thoroughly. I should also like to point out that Sir Richard Luce, the Minister of State, has done a splendid job, too. He has worked extremely hard. He understands the people concerned, and I am delighted that he has been able to keep his post now as the Minister.

I went to Hong Kong in November 1946. I had been working for the Red Cross in Indonesia and I managed to get on a troopship and got to Hong Kong. I spent just over a fortnight there. The conditions were appalling in comparison to what they are now. It is amazing what they have done in a comparatively short time. The occupation by the Japanese was extremely brutal not only to the British, but also to the Chinese themselves. The splendid manner in which all races had behaved—I emphasise all races because there were quite a number of difference races—and the great loyalty shown by the Chinese to this country, and the faith they had that we would bring them back again, that we would conquer the Japanese and give them a free life, was most moving.

In 1961 I was able to visit the Chinese People's Republic. I went alone. It was interesting. Nineteen sixty-one was not one of the best years, but it was a good year for seeing things. I went by train. It took two-and-a-half days and two nights to get from Hong Kong to Beijing. It gave one an insight into the great country that we were going to have contact with in the future. There were masses of people working at different jobs. You never saw one or two people working; it was 30 or 40, or perhaps more, especially in the fields. If you go by train, you really get to learn quite a lot about a country.

In 1970 I led a parliamentary delegation to China and was surprised by the remarkable changes. I was asked continually by reporters what I felt about the country. I gave them very genuine remarks, and one they were astonished at was the fact that the children had grown so much taller. They were getting better fed, getting more food, their education was improved, they were getting some games, and they were considerably taller than their parents. I went to quite a lot of factories and hospitals, I saw operations under acupuncture, and I saw all the goods in the shops, and the difference between that time and 1961 was quite fascinating.

I am now president of an organisation called the Europe-China Association, and I have led another delegation on friendship. This is a friendship which is lasting, I am glad to say, between the Chinese people of that great republic and Britain and the EEC. We have now lectures in all the different countries in the EEC and we also run summer schools at Oxford to which the Chinese Republic send lecturers. We really are getting together and getting an understanding not only between Britain and China, but also between Europe and China.

Only a fortnight ago we had a Europe-China dinner, which I am glad to say the Chinese ambassador attended and at which he made a speech. Also attending was Sir Percy Cradock, to whom we owe such a lot in these negotiations, first of all for when he was ambassador at Beijing—where he entertained our delegation—and, secondly, for all he has done since in advising the Government in regard to the various things which have taken place in formulating the future.

There is a saying among the Chinese, "The iron rice bowl". I understand that this means that the Chinese do not really want to have a static salary. They want to get rid of this static rice bowl. This is what they told me. There are millions of Chinese who want to go off and get a licence to earn an outside living. It was fascinating to find in my recent visit the number of stalls, particularly vegetable stalls and so on, in the streets. A great deal of selling was going on. I asked the prices and I found that the fresh vegetables were slightly more expensive than the ones in the shops, but people preferred to buy them because they knew they were fresh. This encouraged more people to come along and have their own businesses.

On my way home I stayed in Hong Kong. Perhaps I should declare an interest here because my brother has a small stockbroking firm in Hong Kong, which I am glad to say is still doing quite well, despite fluctuations in the money situation. I have also visited factories, hospitals, homes for children, and so on. One of the interesting things is that so many of the large enterprises, the large factories, are run by people who were living in Shanghai and came from there to Hong Kong to found businesses when they found they could not get on very well in their country of origin. I hope that anyhow they will not want to move again when we join up in the way anticipated with China itself, because in many ways they are the backbone of the big enterprises—I believe there is the largest toy factory in the world there—and they have certain feelings about what is going to happen in the future.

May I just congratulate Sir Ronald Black, with whom I stayed in the early days, and also of course the noble Lord, Lord MacLehose, who gave us great hospitality and good advice, and Sir Edward Youde, who I met when I first went to Beijing, and of course lastly, in a different category, Sir Percy Cradock, who has done such a lot of excellent work as ambassador. They have all taken an enormous interest in the Chinese people; and I think I am right in saying that all these ambassadors or governors spoke excellent Chinese, which does not always happen in the various countries to which ambassadors are sent.

I was also interested in Command Paper 9407. I read it all the way through to find out the different views of the different people. There are some sensible views and some quite difficult ones, but No. 20 by Dr. Henrietta Ip says: Understands that some anxieties remain, but points out that life is full of uncertainties anyway. I thought that was a good reason to be included among her other points. Another was that The Hong Kong SAR should adopt a more democratic approach in formulating its education policies and should improve the existing consultative system in the field of education. This is rather an appropriate moment, if we are to go in with China, to try to agree a formula in regard to education.

The last quotation that I have is from Mr. Peter Poon: In order to ensure genuine freedom of travel, the Basic Law should amplify that the meaning of 'unless restrained by law' means the law as currently practised in Hong Kong. Whether this can be undertaken I do not know; but I think Mr. Poon has a good point. He continues: The future political structure must be suitable for the unique position of Hong Kong, and radical changes introduced prematurely and hastily must be avoided. This goes on to another quotation, but the noble Lord, Lord Tanlaw, is not here. I gather from the White Paper, on page 13, paragraph 44, that he is not likely to get the type of voting he requires. I think that it will be along the lines we have in this country.

As I mentioned. I am the president of the Europe-China Association. Perhaps I could request Her Majesty's Government to take the initiative in launching an international effort with the EEC, the Commonwealth and perhaps members of the NATO Alliance to provide co-ordination and resettlement quotas if needed for the people in Hong Kong, to permit travel by those holders of British Dependent Territories' passports from Hong Kong as well as minority nationalities who at present travel on passports from that country. I understand that the numbers will probably be small. The purpose is to establish the principle that, in the last resort, no British citizen or his offspring, as has been said by my noble friend, will ever be handed over to another country against his will and also will not be made stateless.

The other point that I should like to mention relates to the Vietnamese. I visited a number of Vietnamese refugee camps on Hong Kong and I wondered what will happen to them in the future. Are arrangements being made for other countries to take them? I gather from the newspapers that even more Vietnamese are getting into Hong Kong at present and I hope that something may be said tonight about their future.

Whatever system is chosen in the future for Hong Kong, I hope that the twin pillars of democracy and free press and the rule of law will be kept and will be administered independently. There is a place on Hong Kong called the Happy Valley. I know that it is a place mostly for amusement and fun but I hope that in future Hong Kong will become a happy place and that the Happy Valley will remain.

6.35 p.m.

Lord Shawcross

My Lords, I rise to address your Lordships with a good deal of hesitation, but about one matter I have no hesitation at all: that is in congratulating the noble Earl on his thoughtful and important speech. The noble Lord, Lord Greenhill of Harrow, mentioned that he was carrying on a notable tradition and many of us in this House will remember his distinguished father. I recall many happy occasions with him of which one involved me in a little parliamentary difficulty. I was in receipt of a three-line whip for one particular evening when the noble Lord's father and I and our respective wives found ourselves whirling around in some peculiar contraption in the Battersea Fun Fair, which kept us. I think by centrifugal force, stuck on the sides while the floor disappeared. I am afraid I missed that Division. I put it all down to the machinations of the Opposition at the time!

I remember, too (not so many in this House will remember), with affection, the noble Earl's distinguished grandfather who, on more than one occasion, first when I was a Bar student and again as a young barrister, gave me great help. I congratulate the noble Earl. I am sure the House will hope that we shall hear his voice from time to time, and I certainly hope that he will speak more frequently to your Lordships than I have felt able to do in recent years.

That leads me to my personal hesitation. I apologise to your Lordships for breaking into your counsels after many years of silence the reasons for which, partly personal, partly political, I explained long ago. But this subject which your Lordships are debating is a matter of intense interest to me. Having used that word "interest". I must refer first to a limited and special sense in that I must declare an interest because I am a director of two highly successful companies in Hong Kong. I am connected with a small advisory committee of a newspaper group which publishes newspapers in the Chinese as well as in the English language. I have visited Hong Kong for about 30 years with a good deal of frequency.

As for China, I have no material interest there but I like to think that I am a friend of China, largely for the reason that was mentioned by the noble Lord, Lord Rhodes. I think China has been contributing, and will contribute, as much as any power can to the maintenance of world peace; and also I think that in recent years China has shown an extraordinary pragmatism, an extraordinary freedom from doctrine, in the evolution of its government and system, a freedom from doctrine which I think might often have been tried with advantage by other governments in the Western world.

I have travelled very extensively and many times in China, including Tibet. When I was there last in April as a guest of the Foreign Policy Association I had very long talks with the Ministers concerned. I was struck by their goodwill, by their obvious desire to find a modus vivendi, by their willingness to listen and discuss, and their pragmatic approach. But I felt then that it would be difficult in the time available to secure an agreement on more than the basic principles. I was therefore the more pleased and surprised when I read in the White Paper the very detailed and very comprehensive draft agreement which we see there.

Certainly the Chinese Government is much to be congratulated on its pragmatism in reaching a conclusion which coincided with ours on the draft agreement. Certainly we must congratulate the Foreign Secretary and the Minister of State, but we must also not forget—and one or two noble Lords have referred to this—the very important contribution made by the members of the negotiating team, the officials and particularly the present Governor and his noble predecessor. I shall spare the noble Lord's blushes, except to say that I think he was much too modest in the remarks that he himself made. As for Sir Edward Youde, if it is not an impertinence to say so, there were a few people—and I confess that I was among them—who had a little doubt at the time of his appointment. Events have shown how very wrong we were. He had had the advantage of course of being Her Majesty's Ambassador in Peking, he is fluent in Mandarin and reads the language. Ever since his arrival in Hong Kong, quietly and undemonstratively, as is his wont, but indefatigably, he has been working towards a solution of the problem, reaching agreement and working out its details. The highest praise must, I think, in this important matter go to the present Governor.

This is an excellent agreement and I am going to say only a little about three matters which have already been referred to in this House and which are certainly the concern of many people in Hong Kong. I got back only five days ago after three weeks in the colony during which I had many opportunities of talking to people, not only in business but in education and journalism, and to my many friends in the Lego and Exco—and here I would join with other noble Lords in expressing the gratitude that we all ought to feel for the work which has been done by the Lego and Exco and especially by Llmelco, whose members many of us have met, both some months ago and again in the last few weeks.

There is no doubt that in Hong Kong there is a complete consensus of opinion in favour of the agreement. I have heard it said that the number of Hong Kong people who replied to the questionnaire is comparatively few. Well, silence perhaps gives consent, and it may be that like those whose position is recorded in a famous minute of a Quaker meeting: "So-and-so and so-and-so spoke. The other Friends, having nothing to say, refrained from making the fact obvious". Then of course the fact is that a very large proportion of the population is somewhat illiterate. Many of them may have thought as indeed did one who was reported as saying: "I am only a potato. All I am concerned with is earning my living and maintaining my home. I have no opinions". And that no doubt truly reflects the view of a great many people. But among the knowledgeable people, the informed people, the literate people with opinions, there is no doubt a general consensus in favour of this agreement.

There are, however, a few areas of doubt. The first one is no doubt in regard to the Basic Law. There are those (both in this country and in Hong Kong) who think that Hong Kong ought to participate in or at least be consulted about the Basic Law. Formal participation is one thing; consultation is quite another. As an old constitutional lawyer myself—or, at any rate, "old"—I have great doubt whether participation, from a technical point of view, would be appropriate at all. After all, the Basic Law is an amendment of Article 31 of the constitution of the Chinese People's Republic. There are, I know, some residents in China who are members of the People's Congress by which this amendment of the law has to be approved. But Hong Kong is not yet a province of China, nor is it internationally recognised so to be.

What has to happen first is that the Chinese People's Congress has to approve the amendment of their own existing constitution which will admit the new province of Hong Kong, a special administrative region, to become part of China and to have this Basic Law as its constitution. It seems to me that it is quite inappropriate to talk about participation in any formal sense. Consultation is a very different matter and most of the specific matters that will have to be embodied in the Basic Law are already the subject of expressed agreement in the drafts or the accompanying statements. I have no doubt that will be loyally done.

On some matters, no doubt the Chinese Government may wish to consult us. There may be legal niceties about the way the specific matters are introduced into the Basic Law. All these are no doubt an appropriate subject for consultation, but the machinery for consultation already exists. There is the Liaison Committee; and I certainly repeat the hope that has been expressed here that that will not be composed on our side—and I mean the Hong Kong side, because that is also our side—solely of officials. There ought to be some representatives of the Chinese community on the Liaison Committee. That is the first method of consultation. If there is not agreement on the Liaison Committee then of course it is open to both governments to make representations to each other through the normal diplomatic channels.

I would add only this about the Basic Law. The formulation of these things in China no doubt takes some considerable time, but I hope that the Basic Law will be enunciated and passed by the Congress without too much delay, because so long as argument and doubts remain about it it will be a source of uncertainty and instability in Hong Kong, while what one wants to promote there of course is the continuance of stability.

The next thing that I wanted to refer to was the question of representative, popular government. Everybody I spoke to in Hong Kong about this matter expressed a good deal of caution. In this country we are very proud of our unwritten constitution, and in recent years we have attempted to transplant written versions of it into countries which have had no previous experience of democracy and have expected that it would take root in a few years, forgetting that it had taken centuries to evolve in this country. Sometimes, the results have been most unfortunate. I read that in another place last week someone had said that representative government in the full sense should be created immediately on the basis of full, universal suffrage; and, going further than we go in this country, that the legislature so elected should itself elect the executive council, which is, in effect, the Ministry of Cabinet, and that the executive council so elected should in turn elect the governor. That really would be a recipe for disaster in Hong Kong. Indeed, so far as the electoral system is concerned, I agree with the noble Lord who said that even in this country the present electoral system is becoming a disaster. There can be no possible question of transplanting, exactly as it is, the British democratic system.

There are no political parties as such in Hong Kong; there are no political leaders. One can see that if an election were to take place on the basis of direct suffrage, there would be some splinter parties and then, as the noble Lord, Lord Fanshawe, has said, one would get a national party—there are already indications that Taiwan would do its best to encourage such a party—which would want to abrogate the whole agreement, would want to maintain the complete separation from China and would want to reject the present views, as I think they are, of the majority of the people of Hong Kong. Then there might be a Communist party. There are a good many Communists in Hong Kong; of that there is no doubt. Presumably their desire would also be to abrogate the agreement, for very different reasons. They would want to merge quickly with China as it is. I am sure that this is a matter which must be considered very carefully and with caution; festina lente—we must hurry slowly.

It may well be that the system of electoral colleges and functional constituencies, which are not familiar to us in this country but have been tried elsewhere, will be the right method of approaching what is perhaps one of the most difficult problems.

Then, as the noble Lord, Lord Geddes, emphasised particularly, there is the question of nationality. It is most important that we should do nothing in this House or here to encourage emigration from Hong Kong. We should try as best we can to make Hong Kong such a successful and happy place in the next 12 years that people do not want to leave it, but there no doubt will remain a minority—perhaps not an insignificant number—who will be, as they are today, anxious about their future status.

There are, for instance, Eurasians who would not, they feel, become subjects of China. Of what country would they be subjects? This is a matter in which the rich can look after themselves without difficulty. They can put their money, part of their money, outside the country, and a good many of them have done that already. Then, when the time comes, if they want to leave, they can buy their nationality elsewhere. The people who are confronted wih real worry about this is a section of the middle and perhaps the lower orders of society. They are really not very interested in having travel documents which will entitle them to consular protection. What they want is citizenship, the right of abode—residence, as the lawyers used to call it in my day.

We will have an opportunity next year, no doubt, to discuss this problem very fully, but I hope that in the meantime the Government will give the most careful and sympathetic consideration to it. We do not want these people, small in number though they may be, to feel they have been sold down the river. We have a responsibility for them, and it is a responsibility which rests firmly on the British, rather than on the Chinese, Government in these particular respects.

The only other point about which I need say a few words concerns the question of the future. There are of course, as the noble Lord, Lord Fanshawe, said, a good many people who are a little sceptical about this. They say it is a fine agreement, that the present Government in China will no doubt do their best to carry it out; but their concern is about a future government. Will they be prepared to fulfil it? We live in a very uncertain world and it is difficult to prophesy. I can prophesy more safely than others because I shall certainly not be among those present when the time comes. But I have seen the changes that have taken place in China in recent years. I have noticed, for instance, the developments in the great rural areas of China where the mass of the population is—developments that would have been quite unthinkable 10 years ago, such as the great modification of the commune system, the ability of the peasants to engage in a good deal of private enterprise, free markets and so on—and I have noticed, too, the indications of private enterprise in the towns. I have seen the departure in recent years from the strict doctrines of Marxism, and most recently, last Saturday, as one noble Lord mentioned, there was the statement in the Chinese People's Daily, which is the official organ of the Chinese Government, that the teachings of Marx, of Lenin, and of Engels were no longer directly applicable to the circumstances of the modern world—a view I wish were recognised more readily by the disciples of Marx and Lenin in this country. Having seen all those things, I venture to suggest that in 12, 20 or 25 years' time one may see a China which has moved significantly to the Right and which, while not abandoning Socialist principles, not abandoning some industries which are organised on a public basis, may be much like that which we have here, with a mixed economy and a much more liberal society. I said it is difficult to prophesy because we live in an uncertain world, but I wish I could feel the same about Europe.

I am confident that, for the reasons that have been indicated by noble Lords in the course of this debate, this agreement will be fulfilled and that we can look forward to a very long period of stability, prosperity and co-operation in Hong Kong. The Chinese are people who keep their word. They are pragmatic people. They know on which side their bread is buttered. They have other reasons, such as Taiwan, for wishing this agreement to be a success. I think all the prospects are that with full co-operation and good will on both sides this agreement can be not only carried to a successful conclusion in 1997, but can continue for a very lengthy period indeed. I commend it most warmly to the House.

6.59 p.m.

Lord Gridley

My Lords, my first pleasant duty this evening is to congratulate my noble friend Lord Birkenhead. It was a great pleasure to hear him speak in your Lordships' House from the expertise which he has gained in life, and I am sure that his contributions to your Lordships' debates will be listened to with very great interest in the future.

In the speeches that I have heard up to the present there seems to have been a certain amount of euphoria about the agreement which we are considering. That was in the early speeches. But in the later speeches a certain amount of consideration was given to what would happen after the agreement came into force and what responsibilities we in Britain had for it. I believe that the future happiness of the people of Hong Kong will depend on what happens after the agreement is signed. What preparations will be made in the interim period in government out there up until 1997, so that it will be possible to ensure a smooth handover to the People's Republic of China in 1997? I assume that there will be promotions of Chinese in the colony to positions at present held by expatriate civil servants, and so on. Later in my speech I propose confining my observations to that particular aspect.

Whatever happens, the British Government will have the responsibility of ensuring that they hand over a settled and well-organised administration to the new government in 1997. That is a duty from which they cannot reasonably escape. Also, it is laid down in colonial regulations and in papers in the Colonial Office—certainly from the year of 1945—that one primary reason for handing over to an administration which could govern satisfactorily and with confidence was that Britain had a duty to the people of the country concerned. We certainly have that duty to the people of Hong Kong.

In recent years, as we have divested ourselves of certain parts of our empire and other nations have gained independence, I am afraid it has become only too obvious that, in certain circumstances, the population under people who have accepted responsibility have suffered. Even some of their own pensioners have suffered. I do not say that in criticism of the situation but to underline the position as I see it in respect of the proposals for Hong Kong at the present time.

I want to confine my speech and proposals very largely to the position of the Hong Kong civil servant and the Colonial Service in that particular. Before I begin the main theme of my speech, I should like to remind your Lordships that, in the highest traditions of the Colonial Service, it was the colonial officers in Hong Kong, who, when that colony fell in the last war, took the decision to stay behind with those whom we were then unable to govern. The position was that we should stay behind to share their sufferings with them—as was the case with colonial servants in Malaya. It is not my purpose to describe what happened during that period in Hong Kong, but that decision was in the highest traditions of the Colonial Service—and those traditions have probably been passed on to the colonial civil servants of today.

In addition, when victory came after the privations which were suffered, the first to liberate the peoples in that part of the world were Mountbatten's forces in Singapore. For a very long time where the Americans had their sphere of influence for some reason or another they did not appear. During that time a brave colonial civil servant from the Hong Kong Administration set off alone to discuss matters with the Chinese in the colony in order to try and establish some form of law and order. There were great distractions at the time, with people being shot and no semblance of order in the colony.

That civil servant held that position for three or four days, until the Americans arrived. It is worth while recording such stories and facts as they occurred at the time when we consider this evening what we are going to do with Hong Kong, so that these recollections will be recorded in Hansard for future generations to read.

On the question of the Hong Kong agreement, I want to say this in particular. Quite obviously, I support my right honourable and learned friend the Foreign Secretary in the difficult task that he must have faced in attaining it. However, I have reservations about the lack of clarity concerning the pensionable emoluments of Hong Kong civil servants. Where pensions are mentioned in general terms, they are not spelled out in detail in the agreement—and I understand that the agreement is about to be signed.

When I refer to Hong Kong civil servants, or to civil officers, I refer to men who have been recruited by Her Majesty's Secretary of State in the United Kingdom. They are Crown officers in every sense of the word, subject to the policies of Parliament through His Excellency the Governor and the Legislative Council in Hong Kong. When they accepted their appointment in the United Kingdom for service in the British colony of Hong Kong, they had reason to believe that their employee status would remain the same, with conditions of service applicable to service in Her Majesty's Overseas Civil Service—which would be protected by a public officers' agreement.

At present, there is no assurance about this. Moreover, it is only too clear to these officers from what is in the agreement that their employee status will change. Before I spell out the situation in some detail, I should state my interest, as I did at the outset of my speech. I am a former overseas colonial officer of 30 years' service in Malaya, and also it has been my privilege to serve regularly during the past 15 years on the council and executive committee of the Overseas Service Pensioners' Association.

That association was established in 1960 and has for 24 years been in operation. Our headquarters is at Hove in East Sussex. We now have at least 12,000 members of the association who are pensioners. We have a devoted staff dealing with the many problems which arrive from overseas. In addition, we have a capable and hard working secretary in Douglas Stenton, who is in almost daily contact with me by phone in regard to the problems which come before the association.

There have been difficulties and real hardships for some of our 12,000 pensioners. Allow me to give a brief example. For instance, we have never been able to resolve the dilemma of our central Africa pensioners of the defunct Central Africa Federation. This is due to faults of years ago and despite the fact that with a former Foreign Secretary, my noble friend Lord Carrington allowed me and the late Lord Boyd of Merton and others to sit in deliberation with members of the Home Civil Service to seek solutions which failed. I have given these illustrations to show the difficulties which can arise after independence is granted.

Secondly, Zimbabweans—formerly Rhodesians—are in a different category since they are government servants not recruited by the Secretary of State. They have funds which cannot be remitted abroad, and this is causing great privation to many and real hardship and suffering to some. Serious problems can and do arise after independence and Her Majesty's Government are fully aware of them from the submissions we make.

I submit that it is better to identify problems before independence takes place because afterwards the answer of Her Majesty's Government invariably is, "Sorry, but there is nothing we can do about these issues. This overseas government is now independent". That is why I seek assurances regarding the pensions of the overseas colonial officers in Hong Kong, and that their futures will be made safe and protected by a public officers' agreement.

I have already stressed in my speech that Hong Kong civil servants are servants of the Crown, and the fact that Hong Kong will cease to be a colony on 30th June 1997. Assurances are necessary, and every effort should be made to ensure that civil servants up to that date who leave the service will be entitled, as in the case of other members of Her Majesty's overseas Civil Service, to an accrued pension plus lump sum compensation for loss of office.

I do not consider it inevitable that a loss of office might happen in the case of Hong Kong, either before or after 1997. Much of what I state has already appeared in a speech on the Hong Kong agreement in the debate in another place on 5th December. This was made by, my honourable friend the Member for Orpington. Mr. Ivor Stanbrook, and I commend it for attention by the Government. It appears in Hansard, cols. 443–5.

I shall endeavour to be brief. In every other case where a colony has received independence—and Hong Kong is a colony—a public officers' agreement has been made with the successor government. Briefly, the provisions of the public officers' agreement are as follows: one, serving officers who remain and continue to serve remain eligible for transfer or promotion elsewhere; two, the government in which they serve agrees not unreasonably to withhold consent from any officer wishing to accept transfer or promotion and agrees to preserve his pension rights on transfer; three, pensions derived from service after independence—that is, in the case of Hong Kong, after 1997—should attract supplementary pensions payable by the United Kingdom Government; and, four, in the event of premature retirement caused by constitutional change a lump sum compensation is to be paid by the Government.

These pledges were designed to give confidence to officers on the future of their pensions. It was also an assurance given to encourage them to stay and serve a successor government in furtherance of the policy of Her Majesty's Government. It was also to assist a successor government by making available to that government experienced staff which would assist them in ensuring stability and. therefore, the happiness of the people in the new set-up for whom Her Majesty's Government had previously been responsible. Those are the provisions of the public officers' agreement. Much of this is in Colonial No. 306 of 1954, and also in Her Majesty's Overseas Civil Service Special Regulation by the Secretary of State of that date, and in Miscellaneous No. 520. Third Edition. I have spelled them out because I think it is important.

There is at present a widespread anxiety among the expatriate staff in Hong Kong about the future of their pensions. I consider it is unreasonable for Her Majesty's Government to say that everything will be all right and to imply that it is too early to discuss these issues, which will not take place for years. A public officers' agreement to expatriate staff recruited by the Secretary of State should be guaranteed by Her Majesty's Government to those officers of the Crown in Hong Kong as soon as possible. With respect, I submit that to do otherwise is to break a condition of their original appointments. An early statement is respectfully requested that a public officers' agreement will apply to all expatriate staff serving in Hong Kong and that they will be treated no less favourably than expatriate staff in other colonies.

What I have suggested does not, as far as I can see, affect the proposed agreement. What I have asked for are details for the inclusion of provisions in respect of a public officers' agreement. I do not know whether the Government have already considered the implications of a public officers' agreement. but I ask, even now, that they consider the position I have outlined and that Her Majesty's Government take up as a matter of urgency with the colonial government in Hong Kong a consideration of the implications of bringing in a public officers' agreement as soon as possible.

There is one other important factor which I have not mentioned in connection with a public officers' agreement. I refer to the provision for paying pensions which are payable in Britain in sterling. These should be at a fixed rate of exchange from the date of the agreement with China. As I have said, it is clear that I am anxious about the future of the Hong Kong civil servants as the agreement now stands. If possible, I should like a clear indication in the reply of my noble friend Lady Young that careful notice will be taken of the points I have made, and that an assurance about pensions will soon be given in some detail to the expatriate public officers and Crown officers serving in Hong Kong.

I hope that I can have those assurances this evening. Above all, I hope that their future, which is bound up with the future of Hong Kong and the happiness of its people—which I also wish to achieve—will be secured by the proposals I have made.

7.17 p.m.

Lord Todd

My Lords, I decided to take part in this debate not merely because as a citizen of this country I am naturally interested in the future of what has been regarded for 150 years or so as a British colony but because I have a strong personal interest to declare in the prosperity and future of Hong Kong. I have the honour to be chairman of a large charitable foundation, the Croucher Foundation, based in Hong Kong. It is devoted to the promotion of education, learning and research. I am also—and have been for some considerable time—a member of the council of the Chinese University of Hong Kong, which is situated, as many noble Lords will know, in the New Territories.

In consequence, I have been for a good many years a frequent visitor—indeed, almost a commuter—to Hong Kong and I have many contacts with its inhabitants, both Chinese and expatriate. I have also had a considerable measure of contact—relatively speaking—with the People's Republic of China in at least one aspect in that I was involved between 1975 and 1980 in the forging of agreements between the Royal Society in this country, of which I was president, and the Academia Sinica—the Chinese Academy of Sciences. Since then, and much more recently, I have been concerned in the development of similar agreements between the academy and the Croucher Foundation of Hong Kong; a foundation which, incidentally, at present supports a number of joint research projects between institutions of higher education in Hong Kong, on the one hand, and Chinese universities and, for reasons of current interest, the China National Offshore Oil Corporation. on the other. I most definitely have an interest in the development and long-term future of Hong Kong and its relationship with the People's Republic of China.

During the early stages of the negotiations with the People's Republic I frequently heard discussions about what might happen when the lease of the New Territories ran out in 1997. Many rumours were current and there was a good deal of unease, especially among those Chinese who had fled from the Communist regime. It was an unease which was of course heightened by the recent excesses of the Cultural Revolution. Let us be clear, of course. It is an unease which is bound to remain in some measure, whatever kind of agreement we sign now, on the ground that some people will say that if the Cultural Revolution could happen once, it could happen again.

There were also a few (mainly expatriates) who held what seemed to me the totally unrealistic view that the Chinese Government, for some obscure reason, might either renew the lease of the New Territories or at any rate allow Hong Kong to continue under British administration. As we all know, in the event, following long and arduous negotiations, carried out, I must say, with great skill and success by our representatives and those of China (a matter which has been mentioned by several speakers today), we arrived at the agreement which is now before us.

I am entirely in favour of this agreement. If there was any vote involved, I should vote for it without hesitation. I should also like to record my thanks, as others have done, to all those who were involved in the negotiations which led up to the agreement. I must say that I find it very difficult to imagine what better result could possibly have been obtained in present circumstances. No doubt there are some points that need further clarification, and some, like the nationality clauses, will be, to put it at its lowest, a disappointment to some people at least in Hong Kong. But, by and large, I believe that the agreement guarantees a secure future for Hong Kong, at least in so far as it is possible to guarantee anything in this very uncertain world in which we live.

As it happens, I was in Hong Kong on 26th September this year when the White Paper was published, and I spent the following month partly there and partly in the People's Republic. I was thus able to get an impression of at least the first reactions to the published memoranda in both places. I have to report that the reaction of those I met—and I should add that I took care to check with ordinary people in China, and not just through officials—was favourable to the report in both places. Perhaps they were overall more enthusiastic in China, but that was to be expected.

The change-over date, as set out in the memoranda, is 1st July 1997. As has been pointed out by many speakers, that is less than 13 years hence. That really is a very short interval, and much will have to be done in Hong Kong in the interim—not least the development of an effective system of representative government and a high level of political and administrative skill on the part of its leading members.

Perhaps I had better explain that. Most discussions of Hong Kong and its future which I have heard in this country (and to some extent also in Hong Kong) seem to be based on the idea that at the end of this century Hong Kong will be the same kind of place as it is now and that it will continue to be so thereafter. But nothing in this world can stand still; change is always the watchword. One thing is certain—the Hong Kong of 1997 will not be the Hong Kong of today, but in my opinion it will have before it very great opportunities if it is prepared, as I believe its people will be prepared, to take advantage of these opportunities.

In its efforts to modernise and catch up with the technology of today and tomorrow, China desperately needs trained people at all levels. In the production of such people Hong Kong is well ahead now, and if it maintains its lead, it will be of vital importance to China's development. That is why, in addition to thinking about Hong Kong as a port and a business and financial centre, we ought to be thinking about the educational needs of its people. Especially, to my mind, is this so in the matter of advanced training and research in its universities and the universities and polytechnics of Hong Kong. Here I must record with sorrow that the Hong Kong Government, with their niggardly approach to research funding, appear to me to be very short-sighted in this respect.

I echo what the noble Earl, Lord Birkenhead, said earlier today in his maiden speech, which I enjoyed enormously, perhaps the more so because I agreed entirely with everything that he said, and I remind your Lordships that just across the border from the New Territories lies Shenzhen. Shenzhen is an area designated by China for special economic development. It is developing very rapidly and much Hong Kong capital and expertise is involved in that development. The pace of development is extraordinary. I have no doubt that it will continue, and that by the end of the century Shenzhen, and probably the whole stretch of southern Guangdong as far as Canton (in which development involving Hong Kong capital and Hong Kong entrepreneurs is already under way), will be well-nigh indistinguishable from the neighbouring Hong Kong. So much so that I find it difficult to imagine that the present frontier and separation from Hong Kong will be easily maintained.

That situation, I believe, has tremendous potential as far as Hong Kong is concerned. There is a tremendous opportunity here for Hong Kong, provided that Hong Kong at that time has an effective administration and has in charge good people who can take advantage of the situation that is waiting for them in the province of Guangdong. In my view, there lies the future of Hong Kong.

From 1997 onwards, under the agreement, Hong Kong will be governed by its own people—essentially Chinese. Between now and then it is imperative that proper representative government—I shall not enter into details as to how that government should be chosen—must be installed in Hong Kong; and through it we have to develop, or see develop, a first-class administration; an administration that will be needed not just to look after the complex organism which is Hong Kong, but which will also be able to cope with what I believe (which follows from what I have already said) will be an extremely important, indeed an essential, modus vivendi with the neighbouring industrialised region of southern Guangdong.

My main criticism of the Government of Hong Kong is that for years they have, ostrich-like, ignored this possibility and the obvious necessity of developing representative government. Instead of that, they have continued to run Hong Kong on traditional colonial lines, totally ignoring the fact that the New Territories' lease was going to expire in 1997, with the kind of consequences which we now see.

I know of course that the Government of Hong Kong have recently issued a White Paper setting out proposals to proceed step-wise towards representative government. I welcome that White Paper, although I think it is a bit belated. What worries me, however, is whether, especially at this pace, 13 years is an adequate period in which to make the necessary transition. I hope it is. But if it is not, and we fail to do so, then I believe the blame should, and will, be laid at the door of this country for so long turning a blind eye to the crying need for change.

7.31 p.m.

Lord Home of the Hirsel

My Lords, my noble friend Lady Young, at the start of this debate, anticipated that we should have an interesting discussion. She will not have been disappointed, because we have had the benefit of the mature judgment of such noble Lords as the noble Lord, Lord Rhodes, the noble Lord, Lord MacLehose, and many others who know China or Hong Kong. We have benefited, too, from the maiden speech of my noble friend Lord Birkenhead. I remember sitting on the steps of the Throne—my father introduced me once—when his grandfather was speaking in this House on the subject of allowing Peeresses in their own right onto these Benches. He was emphatically negative and immensely amusing. I hope that the noble Earl himself will widen his interests and talk to us about all kinds of things in the future years.

Change and, in particular, the unfamiliar are always daunting. Given the contrasting circumstances—economic, political and social—in Hong Kong and China, it is very understandable that there should be some apprehensions, and even, as my noble friend Lord Fanshawe said, some scepticism, because as one looks into the future there is no denying that there are risks. But what has been so reassuring has been the massive demonstration of calm, calculating common sense with which the majority in Hong Kong have received this agreement. I hope that in neither House in our country is there any rubber-stamp mentality. But I think at this moment we can properly recognise that the Chinese, the British and the Hong Kong negotiators have shown statecraft of a very high order. So far then, so good.

Following the speeches of so many of your Lordships who have close knowledge of the situation, I wish to lay emphasis on only two points, which I consider to be of absolute importance at the present time. The first was selected by the noble Lord, Lord Cledwyn, and has been emphasised by others. That is the meticulous, painstaking care that ought to be taken as to the matters to be included in the Basic Law. That is a question on which I think the noble Lord, Lord Shawcross, (who we are all so glad to see coming back and speaking to us once again in this House) gave us very good advice as to the constitutional legal position. It is a Chinese obligation to get this Basic Law right. But as I think the noble Lord, Lord Rhodes, suggested, there is no reason why the Chinese should not take infinite trouble to keep, step by step, by consultation, with opinion in Hong Kong and in Britain. If the contents of the Basic Law can be agreed and the contents of it given the status of an international treaty—which, as I understand it, is the intention—there is the foundation of law on which we can build in the next 50 years; and a foundation of law is necessary for any lasting association.

The second of my points concerns the liaison machinery for consultation on which the representatives of China, Hong Kong and Britain will serve. I think it is of the first importance that those who have already won each other's respect, friendship and confidence should be included in the membership. That will give continuity, leading on from the events of the last couple of years. The noble Lord, Lord Tanlaw, I think was very wise to ask that in that body there should not be Unofficial Members brought in. But there is a question of age involved, and there should be introduced into this body some younger people who have to look forward to living in the situation as it will develop after 1997.

Continuing consultation is the spirit of the matter. In the law there is the letter and in consultation and co-operation there is the spirit. The noble Lord, Lord Shawcross, said that he detected that China might be moving to the Right. I detected this some 10 years ago, when I went to China as Foreign Secretary and I was received into the Great Hall of the People's Republic with the massed bands playing the Eton Boating Song.

So I give my blessing to this agreement. There is a long way to go. The noble Lord, Lord Rhodes, suggested that at some appropriate point Her Majesty the Queen might go to set the seal on the progress. That would be wonderful, if it proved to be possible. Perhaps that is looking too far ahead. But while, with many of your Lordships, I do not minimise the task ahead, I cannot overstate the prize that will be won if this agreement comes to fruition.

7.37 p.m.

Lord Kennet

My Lords, I must apologise for not having been present at this debate until just now: I had a long and inescapable engagement elsewhere. We are debating today more than we always realise. It is not only the merits of a particular treaty, not only—though this must always be our first thought—the future of 5.5 million people, not only a unique style of decolonisation at the very end of the British Empire. It is more than that. It is, with one or two irritating but insignificant exceptions, the end of democratic Europe's long journey home. It is also the end—since Macau goes with Hong Kong—of the redemption of China from foreign rule.

This clever treaty about the future of this clever people writes finis under the chapter of human history which began 500 years ago when Spain and Portugal, having redeemed their land from the Arabs, simply did not stop but turned half right and carried on across the Atlantic.

I said "democratic Europe". All the "European" empires are now ended, save one: the Russian. And I have not the least doubt that at some time in the next hundred years someone will stand up in this House or the other and remark that some event—and let us hope it is a clever little treaty and not a stupid great war—has finally ended that and given everyone in the world back to themselves, even the Uzbeks, the Kazakhs, the Inuit and the Afghans.

Hong Kong and Macau will complete mainland China. On the way they are governed after 1993 will depend China's hope of redeeming Taiwan. That is the biggest single reason the people of Hong Kong have to expect the observance of the treaty.

The China which is thus coming once again into its own has been in continuous convulsive change for more than a hundred years. The duration of these convulsions is not surprising given the size of the population and the age of the culture. The 11 European imperial powers were always Lilliputians over a recumbent China. More than a century ago, Japan opened to the West. And now it is China's turn. That opening had, in a sense, to await the end of foreign territorial rule and it was able to do so because China, unlike Japan, had all the natural resources needed to live on in the modern age.

The last dynasty of Chinese imperial rule, the Manchurian Chin, never absorbed the Chinese civilisation, let alone the Western. The revolution of China against the Chin dynasty, a revolution which lasted from 1856 until 1911, was a sort of inner liberation which formed the backdrop to the encroachment of the outer powers—Britain, the United States, France, Germany and so on.

The opium wars which gave us Victoria Island and Kowloon were a fairly standard part of the scramble for the world. It was the United States which insisted on most-favoured-nation treatment for all in the carve-up. Thirteen nations divided Shanghai. Berlin, in our age, is a good deal simpler. This was the time, 1858, when we got Kowloon. We got the lease on the New Territories, the end of which we are now debating, not in the blithe expansion of early 19th century imperialism, but in the decadent, autophagous, phase. We demanded and got it because we needed more land in defence. But—we often forget this—who did we need land against in the defence of Hong Kong? Not against the Chinese, but against the French who were creeping up the coast from Vietnam and even against the Germans who were creeping down it from the north-east.

The foreign Chin dynasty fell in 1911, the Kuomindang, inspired by the Russian revolution of 1905, took power, and lost it in 1949 to the Chinese Communist Party, which had been founded in 1921 inspired by the Russian revolution of 1917. A dynasty of foreigners was succeeded by two successive Chinese regimes with foreign ideas in their heads.

These Chinese with foreign ideas in their heads secured the return of city after city by arrangement after arrangement, from Hankow in 1927 to the British and American agreement to abolish extraterritoriality in 1943. Along the way they faced another foreign invasion and domination, that of Japan. That, too, they got rid of with considerable American, but no Russian, help at the back door. The only nuclear weapons ever dropped in anger have played their role in Chinese history, too.

Now we go, and Portugal with us. And we go peacefully and with goodwill. It is an immense epoch in human affairs. (I use the word precisely, meaning not the stretch between turning points but the turning point or divide itself.) We expect great epochs to produce new ideas, and this one is no exception. It seems an indelible characteristic, thank God, of our race that we cut our ideas to suit our circumstances. The ailing giant, China, is now fully convalescent, almost whole. We, the standard bearer of Europe's second imperialism, depart in peace according to our word. To suit the occasion, China invents two new ideas. The first is post-Marxist Communism and the second is "one country, two systems".

A Chinese Communism which rejects Marx and Lenin has been visible by over-the-horizon radar for some time now. Last Friday, it appeared clothed in due form and order. The Chinese Communist Party has always called itself Marxist-Leninist, and for a time it called itself Marxist-Leninist-Stalinist. Stalin was still up on the wall of every school and office when I was there in 1972. Now we have the admirable sight—who but China could do it?—of the established government of a Communist state, erected by civil war on the ruins of an attempted Western-style liberalism, for a generation the terror of the United States and the bogey man of "How do you get to the moon?" stories, pointing out that, since Marx died 100 years ago and worked out his theories long before that, and Lenin died 60 years ago, they may not always be the best guide to what is happening now.

Let us listen to the actual words. I quote: Not only were some of Marx's ideas tentative; he wrote more than 100 years ago and the world has greatly changed since his death. Marx, Engels and Lenin did not have the opportunity to experience the process of putting their ideas into practice, therefore, we cannot expect the writings of Marx and Lenin of that time to provide solutions to our current problems". Under the banner of that discovery, and with the turgid but pregnant verbiage of the resolution of the Central Committee of the Chinese Communist Party on 20th October as a guide to what everyone should now do at all levels, China opens the doors to the West another 10 degrees. Doors so wide open will be hard to close. That is one good thing. The other invention, "One country, two systems" will in the long run perhaps be even more fertile for the world. There is much natural worry in Hong Kong about this. How can the economic and political freedoms promised be reconciled with the Chinese constitution, which, on a superficial reading, looks a bit rigid? The answer to that question is set out with extraordinary care. objectivity and ingenuity in a long article published in the People's Daily on 28th September—that is, two days after our treaty was initialled in Peking.

The fact that it was so set out is quite a lesson for those who will be dealing with China in the future. When Her Majesty's Government first faced the fact that if nothing was done, commercial and financial confidence in Hong Kong would collapse some time in the 1980s—I am talking now about a realisation which took place some time in the late 1970s—they decided to try it on à la Macao. They approached the Chinese and asked them ever so innocently how it would be if they were to start issuing land leases in Hong Kong to run beyond 1997. The Chinese countered immediately with the statement that that was a point of detail, and that there were points of principle to settle first. Her Majesty's Government kept it up for quite a while, trying to find a back door, or perhaps one might even say an underground tunnel, into the question of sovereignty; but finally gave up and agreed to discuss the 12 principles that the Chinese had put forward first.

"One country, two systems" is the product of a typical Chinese insistence on first things first. No doubt it did us no harm to scout around a bit, tapping for hollow places, and the result is pretty much as we should have wished. Others will perhaps benefit from our experience. Sir Geoffrey Howe has himself said that "one country, two systems" could come in handy elsewhere. All thoughts turn to Argentina and the Falklands at this point. All thoughts that is except those of Mr. Denis Healey in the House of Commons, who promptly applied the dictum to Scotland and England; one Socialist system in Scotland and one capitalist system in England, which he hopes to see swiftly converted to the Scottish system. I believe that this perception will prove to be a diversion from the mainstream of history. But the idea may come in handy not only for Argentina, not only for Spain, but principally and perhaps most fruitfully, a long way ahead, for Germany.

We are growing towards each other all over the world. The old shotgun marriages of territorial annexation and territorial federation and the old shotgun divorces of secession should yield, and are beginning to yield, to the peaceful establishment day by day, so you hardly notice, of quiet grey liaisons and associations which can probably do the world's work better.

7.49 p.m.

Lord Morris

My Lords, I cannot begin to match the erudition of the noble Lord, Lord Kennet. My only rather thin excuse for contributing to the debate is that I have spent some little time mainly in the People's Republic of China, so much so that I know Peking more than I know Hong Kong, and I know Amoy or Xiamen, as it is now known, more than I know Kowloon. I am convinced that this astonishing achievement of Her Majesty's Government in reaching agreement with regard to the future of Hong Kong together with the the Government of the People's Republic of China will not be regarded by the historians of the future as a mere footnote to history. I believe that the implications of this agreement are immense, for it is, most importantly from my point of view, a resounding demonstration of goodwill between the two governments and the two peoples.

In my view it is very much in the interests of the West that there be an ever-increasingly strong China. It is by no means fanciful to envisage what might well happen if the strength of China in any way influences Russia to feel that its interest lies with far closer ties with Europe, which after all is its cultural and linguistic relative. The tripartite balance of a strong United States, a stronger Europe with Russia, and a strong China, would, I believe, provide a greater chance and a greater hope for the peace of the world than any other single factor in the next hundred years. In so far as this Sino-British Hong Kong Agreement contributes to this end I, like other noble Lords who have spoken, do nothing other than rejoice in it.

I, and I believe all other noble Lords must agree with the noble Lord, Lord MacLehose, who, in his fascinating speech, suggested that the signing of this agreement is by no means a signing-off of responsibilities but more a signing-on of exciting opportunity. As such, great care must be brought to bear, not just for the next twelve and a half years, but forever and a day, for Anglo-Sino co-operation is, in my humble view, so important to this country that it is almost impossible to overstate that importance. Things can, for many and varied reasons, go very wrong even with the best will in the world. Even this afternoon, my Lords, of all times, I was informed in the dining room of your Lordships' House that they had run out of China tea! The answer, I believe, to all misunderstandings, mistakes. careless talk is for those involved through diplomacy, trade and cultural links, to get to know and respect one another and then shortcomings will soon be forgotten and forgiven.

This point leads me to remind your Lordships most respectfully that the Chinese ideograph for England literally means "Land of Heroes" or "Land of the Brave". The single most important message that I have learned from China is that, despite our long historical associations and mutual respect and admiration for one another, I am asked the question, "Where have the merchant venturers of England gone? Why are they not here to help us in our future?" I am afraid my answer is that they have covered their hearts in black coats, they have covered their courage in striped trousers, they have become not merchant venturers but more merchant bankers, prudent men of business, and their imagination is cloaked in fear. I find this very very sad and if this agreement leads to a strengthening above all of trade ties and trade co-operation between the two countries then it will have done a superb job.

I will not allow myself to be tempted to broaden this debate on the subject of bilateral trade and, as all things with regard to this historic agreement have been said by those who have gone before me, I will end purely upon that note.

7.55 p.m.

Lord Oram

My Lords, as others have said, the importance of this debate is reflected and emphasised by the experience and variety of the speakers who have taken part in it, including perhaps most notably, in the noble Lord, Lord MacLehose, a former Governor of Hong Kong, and—if he will allow me to say so—in the noble Lord, Lord Lindsay of Birker, one who told us in a recent debate that he fought with the Chinese Communists against the Japanese. Indeed in this House we manage to gather together a variety of experience for debates such as this. But our debate was certainly enhanced by the excellent maiden speech that we heard from the noble Earl, Lord Birkenhead. I listened to it with really warm appreciation and I echo those who have said that we look forward to hearing him on other occasions.

We have also had the benefit of hearing views almost entirely from speakers who have direct experience in a business sense, a legal sense, or in other ways of Hong Kong and of China and, in the case of my noble friend Lord Rhodes, we have one who has become almost an unofficial ambassador, I would say, both to the People's Republic of China and to Hong Kong as well. He is a frequent visitor to both. When I went to China with a parliamentary delegation some three years ago we were constantly aware as we travelled of the goodwill that my noble friend has engendered by his frequent visits. I was glad to hear from him today that he still plans to go and that he is going again in March.

The Motion we are considering today has already, as we know, been approved in another place and when, as I have no doubt it will be, it has been approved in this House, authority will then have been given to the Prime Minister to go shortly to Peking to sign the agreement which has been reached after two years of very skilful and very patient negotiation.

The circumstances of the Prime Minister's visit this time will be in fortunate contrast with those of two years ago, as indeed one hopes will be her frame of mind and her sense of diplomacy. We can all take satisfaction that her signature to the agreement will register the fact that a problem of really remarkable complexity has been solved with a remarkable degree of unanimity, which has been reflected in the debate to which we have just listened.

I recall that the Secretary-General of the United Nations has himself paid tribute to the negotiators and has said that they have set an example to others of how international questions should be settled; and certainly this debate has confirmed that view. Indeed the Foreign Secretary and his advisers are to be congratulated on transforming a situation which, only two years ago, looked difficult indeed into one of optimism and hope. The Foreign Secretary in turn has been generous in praising what he has called the "vision and realism" of his Chinese opposite numbers.

As the noble Lord, Lord MacLehose, pointed out, and the noble Earl, Lord Birkenhead, developed this theme most interestingly, it is not only in relation to Hong Kong that Chinese vision and realism are in evidence today. They are in evidence in their approach to major policy devopments in mainland China itself, because under the leadership of Deng Xiaoping a really massive transformation is taking place in China. They are now building a socialist society in which individual and small collective enterprises are being liberated from the excessive bureaucratic centralism of the earlier regime. I personally had the opportunity last year to make an intensive study of the success of these new methods in rural China, and I welcome the recent decision that has been announced to adopt similar methods in the urban communities.

The noble Lord, Lord Shawcross, suggested that China is moving to the Right. These definitions are sometimes puzzling, but I think I know what he meant, and I agree with him. But I would say that any suggestion that these developments in China represent a reversion to capitalism is, in my view, quite wide of the mark. These internal changes that I have described briefly are being paralleled with an open-door policy towards the rest of the world, and therefore it has been a fortunate historical coincidence that the negotiations about Hong Kong which we have been debating have proceeded against a background of internal and external policies on the part of China which have been most favourable to the conclusion of this agreement that we are now considering.

I think I can best recall the main issues raised in this debate if I ask just three questions. They are questions which have really run through most of the speeches in today's discussion. My first question is the simple-sounding one: is the agreement a good and acceptable agreement? Secondly, I would ask: after it is signed, what problems remain to be tackled? My third question is: will the agreement stand the test of time? There is no doubt in my mind—nor, does it seem, in the minds of any of your Lordships—that the answer to the first question is, "Yes, it is a good and acceptable agreement". And why? I believe it is because it rests upon, and successfully implements, the proposition of one country, two systems; because it is in the interest of Beijing that Hong Kong should become part of the one country of China. It is in the interests of the United Kingdom, and of the people of Hong Kong, whom we represent, that there should be two economic and social systems within that one country so that the way of life familar to the people of Hong Kong can he preserved into the foreseeable future.

This double objective is being achieved, on the one hand, by China having the right, which has been referred to many times, to pass through its National People's Congress the basic constitutional law, and to have also a consultative voice, throughout the Joint Liaison Group, about the implementation of the joint declaration; and also, of course, China is being given (if that is the word after 1997 the responsibility for external relations and defence. So that, in summary, is what China gets from this agreement.

On the other hand, there is a very considerable catalogue of guarantees to the people of Hong Kong. The noble Baroness, Lady Young, spelt them out in some detail. In summary, I suggest they are these. They will have their own elected Legislature, their own legal system and courts, their own freely convertible currency and their own financial and commercial institutions open to the world; and, moreover, these will persist throughout the first half of the 21st century. That is the other side of the balance sheeet of this agreement. Such an agreement, it seems to me, is a balanced implementation. as I have suggested, of one country, two systems. It is that which, in my judgment, makes this agreement good and acceptable.

But then my second question arises. What will be the problems to be wrestled with after the signing of the agreement? Running through the debate, many speakers have raised points which they see may be of some difficulty in the future. I shall refer briefly to four that occurred to me. First, there will be the need for consultation between the Chinese Government and the people of Hong Kong about the exact terms of the basic constitutional law which the People's Congress will enact. Apparently it is not yet clear what that process of consultation will be, and I have no doubt that some difficulties in this connection will need to be resolved. But I was glad to see that the spokesmen for UMELCO have expressed confidence that there is sufficient detail in the agreement to ensure that the Basic Law will be satisfactorily drafted. I feel sure that, if they think that, we in this House can share that confidence.

Secondly, I should like to mention a problem which has not I think been mentioned in the debate and which in a sense does not arise directly from the agreement. But it is a matter which the Hong Kong Government must seek to solve and which may therefore be of concern to the Joint Liaison Group. I have in mind the problem of the 12,000 Vietnamese refugees, many of whom are living in prison-like conditions. My attention has been called particularly to this problem by my noble friend Lord Ennals in his capacity as a leading member of the British Refugee Council. It seems to me that the recommendations of that council deserve sympathetic consideration both by the Government here in London and by the authorities in Hong Kong.

I will not say much about the nationality question. We have had learned and interesting contributions on this subject, particularly from the noble Lord, Lord Geddes, and the noble Lord, Lord Shawcross. We are to have the opportunity of debating that kind of issue in the new year, when the legislation is before us.

I have left perhaps the most difficult problem to the last of my list; that is, how should we seek to develop a system of representative government for Hong Kong between now and 1997? It is understandable that a good deal of the discussion, led particularly by the noble Lord. Lord Tanlaw, and followed up by others, was about the machinery of democracy and the pace at which that machinery can be installed. I have not got it in mind to make any specific points about that machinery, but I should like to repeat something which I have said in your Lordships' House on an earlier occasion when we were discussing Hong Kong.

Whenever I think of democracy, I have in mind very much more than the machinery of government. I believe that democracy is fragile unless it is underpinned by a range of social and economic organisations such as trades unions, student organisations, co-operatives, voluntary social service groups, women's organisations and neighbourhood committees. Organisations such as those, of which we have a very great wealth in this country, are necessary in order to underpin the more formal electoral system for the machinery of government. Therefore I hope that between now and 1997 efforts will be directed not only at getting the right system of representative government in an electoral sense, but that equal efforts will be made to provide what I would call a healthy and robust infrastructure of democracy. I believe that to be equally important.

The third question which I asked some minutes ago was: Will the agreement stand the test of time? I believe that it will do so because not only in itself is it an agreement that has been carefully and fairly constructed but, as the noble Lord, Lord Home of the Hirsel, has said, it is one which will be formally incorporated as a treaty in international law. As several members of your Lordships' House have said, China, under very different regimes of government, has maintained an honourable record in its compliance with international obligations. I am confident that that record will continue.

We are thinking of a period of 50 years; in fact it is longer than that, it is 62 years. No one can possibly forecast with any certainty the course of events in Hong Kong, China or anywhere else in the world over such a period. If it is true, as has been said, that a week is a long time in politics, then certainly if my arithmetic is right 2,600 weeks are a long time indeed. Nevertheless, although the future is hazy, the 50-year provision in the agreement is an important element because it shows the intention of the present Chinese Government. It is an expression of goodwill and of good faith. However, it is much more than that: I believe that it is the clue to the restoration of confidence in Hong Kong because it is the foundation upon which the people of Hong Kong can plan and work for the future.

Therefore, as my noble friend Lord Cledwyn made clear, we on these Benches not only approve this Motion, but we also congratulate most warmly all those who trod with such success the very difficult path of negotiation. We, like others, look forward to a harmonious and prosperous relationship in the future between the people of Hong Kong and the massive population of the People's Republic of China.

8.13 p.m.

Baroness Young

My Lords, we have had a well-informed, realistic and I believe valuable debate. In 1898 Lord Salisbury was able to say, apparently without contradiction, when introducing to your Lordships' House the 1898 Convention of Peking: As soon as we possess the actual text it will be immediately communicated to Parliament. I do not know that the details of this matter are of any general interest, although they are of strategic importance". Times have certainly changed. The interest that your Lordships have demonstrated in the future of Hong Kong well illustrates the sense of commitment and responsibility that all of us feel towards the people of that territory. I believe that this debate has not in any way been a rubber stamp.

I should first like to congratulate my noble friend Lord Birkenhead on his maiden speech which we all greatly enjoyed. We hope that we shall hear from him often. I understand that the noble Lord, Lord Kadoorie, has sent his apologies for his absence because he is ill in hospital and unable to take part in the debate. I am sure that we all wish him well. Your Lordships clearly agree that the Hong Kong agreement is a good one, that it provides a satisfactory basis for the future of Hong Kong and that the territory has every prospect of stability, prosperity and still more remarkable development into the 21st century. Those points were made by your Lordships who have spoken from all parts of the House; but I am particularly glad of the support that has been given by the noble Lords, Lord Cledwyn, Lord Oram, Lord Tanlaw and Lord Kennet.

There have been certain worries and concerns expressed by the people of Hong Kong. I regard those as quite natural and understandable given the significance and the uniqueness of the change that lies ahead of the population. Some of those concens have been raised by your Lordships today, and I shall try and answer as many of them as I can.

A great many noble Lords have raised the question of how we can be confident that the agreement will he implemented by both sides, and have asked how can we be confident in the future. There can of course be no such thing as certainty about the future in this world. But as I indicated in my opening speech, there are the strongest reasons to believe that the agreement will he observed. National prestige is involved in upholding an agreement recognised by both sides as legally binding. National self-interest is served by the preservation of Hong Kong's flourishing economy. China's national objective of eventual reunification is intimately associated with the success of this agreement. The noble Lord, Lord MacLehose, made a great many helpful and constructive points in this regard. To answer one specific question that he asked about resources for the Foreign and Commonwealth Office in the years ahead, let me say that we are looking at our resources in relation to the next 12 years. I can assure him that we are aware of the vital importance of having the right people in the right place at the right time and that we shall give this high priority.

I am sure that all of us in your Lordships' House were also very struck by what my noble friend Lord Birkenhead said both about the need to avoid complacency and about the Chinese honouring their agreements. I think that my noble friend was most helpful. My noble friend Lord Gridley, and the noble Lord, Lord MacLehose, both raised points about the future of Her Majesty's overseas civil servants. My noble friend Lord Gridley raised the position of HMOCS officers serving the Hong Kong Government. I have taken note of his remarks and I can assure him that the Government are very well aware of the important points that he has raised. They are under active discussion at present. I cannot add by way of assurances to what my honourable friend the Minister of State for Foreign and Commonwealth Affairs said on this point in another place. The draft agreement provides satisfactorily for continuity of service by serving officers in the public service in Hong Kong on terms and conditions, including pay and pensions, no less favourable than before 1st July 1997. These provisions apply to members of Her Majesty's Overseas Civil Service serving in Hong Kong as well as to other civil servants.

The resumption of sovereignty over Hong Kong by the People's Republic of China raises similar issues in respect of HMOCS as independence has in other dependent territories. The fact remains however that it is not possible to define now—12½ years in advance of constitutional change—all the arrangements which will apply to members of HMOCS serving in Hong Kong and to the payment of their pensions by the Hong Kong SAR Government after 1st July 1997. It would not have been possible to do that so early in other colonial territories where constitutional change has taken place. As the noble Lord knows, public officers' agreements have been negotiated just before independence. I can assure him however that Her Majesty's Government have very much in mind the concerns of HMOCS officers which he has mentioned, as well as those of other Hong Kong civil servants.

In this connection I should like to refer to what the noble Lord, Lord MacLehose, said about providing a home and security for some of those who have served us well in Hong Kong and who might feel at risk. I can assure the House that the Government have this point very much in mind. In certain limited cases certain rights of admission will exist at the discretion of the Home Secretary in the United Kingdom. That will be on a very limited basis for people who were exposed to special considerations and special factors.

I now turn to the questions that were raised on nationality. My noble friend Lord Geddes asked a number of questions on this matter, in particular about the acceptability of new passports. According to Section 14 of Annex I to the Joint Declaration, residents of the Special Administrative Region will be able to use travel documents issued by the SAR Government. They will record the holder's right to return to the SAR. The Chinese Government will assist or authorise the SAR Government to conclude visa abolition agreements with states or regions. Those who, on 30th June 1997, are British dependent territory citizens by virtue of a connection with Hong Kong will be eligible to retain a status which will enable them to use British passports after that date. These passports will make it clear that the holders have a right of abode in the SAR. Her Majesty's Government will do all they can to secure for the holders of those passports the same access to other countries as that enjoyed at present by holders of BDTC passports. There is no reason to believe that third countries will not recognise these passports.

My noble friend Lord Geddes also asked whether the new passports would be issued in 1997. Detailed procedures for the issue of new-style passports have not been worked out. No decision has yet been taken on the date of issue of the new-style passports, but I am not certain that having a sudden and dramatic change of style in 1997 is the best way of ensuring that the new style is generally recognised and accepted in third countries. It is, however, a point which deserves serious consideration.

However, I should not wish to hold out any hope that the question of transmissibility could be raised again with the Chinese Government. They were quite adamant against it, and our final agreement not to press it further was an integral and essential part of the settlement which produced the agreement. But I am happy to reassure my noble friend about the content of the Chinese memorandum. This refers to Chinese nationals holding British travel documents, because the memorandum is concerned only with Chinese nationals. There is no suggestion that those who are not Chinese nationals should not carry British passports. Section 14 of Annex I makes this quite clear.

My noble friend Lady Vickers asked about international help with resettlement and referred to the possibility of an operation that might be mounted with the aim of resettling large numbers of the people of Hong Kong. In this agreement our aim all along has been to provide security for the future for the people of Hong Kong in such a way that they wish to stay and make their lives there. We have a very good agreement which we believe does that.

I do not think that this is the moment to be taking steps to ask other countries to assist with resettlement of Hong Kong people; we should be tearing down with one hand what we had built up with the other. Other countries would find incomprehensible such a display of lack of faith in the agreement that we have just reached. I fear that they would see resultant pressure for emigration from Hong Kong as something precipitated by us. I do not think that they would be inclined to help. Moreover, any such action, because it would display a lack of faith, would inevitably be very unsettling for the very people in Hong Kong for whose security we seek to provide.

My noble friend Lady Vickers and the noble Lord, Lord Oram, both mentioned the question of the Vietnamese refugees. This is a question which is rather outside the scope of this debate, but I should like to say that we are very aware of the strains that this problem places on the Hong Kong Government. We are making every effort, in co-operation with the United Nations High Commissioner for Refugees and with other countries, to seek permanent solutions for those Vietnamese refugees who are at present in Hong Kong. Naturally I hope that this problem will be resolved well before 1997.

My noble friend Lord Fanshawe raised a question on controls on Chinese immigration to Hong Kong. The agreement clearly provides that entry into the Hong Kong Special Administrative Region of persons from other parts of China will continue to be regulated in accordance with the present practice; that is, under Section 14, Annex I.

I now turn to a number of questions that have been raised about the Joint Liaison Group, because a number of your Lordships, including the noble Lords, Lord Shawcross and Lord Rhodes, and my noble friend Lord Fanshawe suggested that there should be unofficial Hong Kong representation in the British delegation to the Joint Liaison Group. We attach great importance to the group as a forum for consultation with the Chinese Government over the implementation of the agreement. The detailed procedures of its work will be worked out at a later stage, although the framework for its activities is already set out in Annex II to the Joint Declaration.

I would expect the United Kingdom side of the Joint Liaison Group to include appropriate Hong Kong Government officials. I appreciate the need to involve the people of Hong Kong in discussions that will determine their own future, but the group will be an organ of diplomatic discussion between the two Governments. Therefore, it is not likely that there could be participation by non-officials in the group. However, I am certain that we shall be able to find ways, as we have done in the past, of ensuring appropriate consultation in Hong Kong.

The noble Lord, Lord Rhodes, and my noble friend Lord Home asked about continuity on the Joint Liaison Group. I should like to confirm that this is very desirable, and I think that it is very probable that there will be that continuity. The noble Lord. Lord Cledwyn. the noble Lord, Lord Shawcross, and my noble friend Lord Home raised a number of points about the Basic Law. This is an important question of the need to involve the people of Hong Kong in the drafting of the Basic Law. The drafting of the Basic Law will be a matter for the Chinese Government to undertake. However, it is stated in the agreement itself that the policies described in the Joint Declaration and Annex I will be stipulated in the Basic Law. This means that we already have a good idea of what will go into it. The Chinese Government have stated that the people of Hong Kong will be consulted on its drafting, although they have not yet made clear what form this consultation will take. In the period between now and 1997 there will be a need for close co-operation between the British and Chinese Governments. The Joint Liaison Group exists for that purpose, and we look forward to constructive and amicable dialogue.

The noble Lord, Lord MacLehose and the noble Lord. Lord Cledwyn, raised a point about possible conscription in Hong Kong. I can confirm that the draft agreement does not deal with the question of conscription. There is certainly no suggestion in it that there will be conscription in the SAR; nor has the Chinese Government made any suggestion that there will be. Given the People's Republic of China's overall responsibility for defence, this is obviously a question for them, but they are aware of the strong views which have been expressed in Hong Kong on this subject.

The noble Lord, Lord Cledwyn, also asked whether Chinese troops would be subject to law in Hong Kong, and I can confirm that I would expect the Basic Law to deal with this matter. The Joint Liaison Group has been set up to facilitate liaison and consultation between the two Governments in the period up to 1997, and this question could well be a matter for discussion there. The noble Lord also asked what will happen to Hong Kong Chinese serving in the British forces after 1997. Nineteen ninety seven is still 13 years away. It is, we think, too soon to tell exactly what arrangements will be appropriate for locally-engaged Hong Kong Chinese serving with the British forces, but I can assure the noble Lord. Lord Cledwyn, that we shall certainly continue to fulfil our obligations towards them as responsible employers.

The noble Lord, Lord Lindsay, asked about human rights. I appreciate his concern on this point. I believe that the agreement makes full provision, and indeed remarkably full provision, for the preservation of human rights, including freedom of the press and of belief, after 1997.

Almost all of your Lordships referred to the important question of constitutional development in Hong Kong up to 1997. I fully accept the legitimate concerns which have been expressed that we should develop a solidly based democratic administration in Hong Kong in the period up to 1997. The Hong Kong Government recently produced a White Paper on the subject, to which a number of noble Lords have referred. This envisages a step-by-step approach to more representative government. This approach takes into account the special position and customs of Hong Kong. A review of further possible developments will be held in 1987, before the 1988 elections.

In the extensive consultations which preceded the White Paper it is worth noting that while many people favoured the idea of direct elections in principle few wanted them in the immediate future—a point made on a number of occasions in the course of the debate. As a number of noble Lords have pointed out, the form of representative government evolved for Hong Kong must match the special conditions of the territory. Public comment on the Green Paper was generally in favour of its aims. There was understanding of the gradual nature of its proposals.

The public recognise the need to ensure that the prosperity and stability of Hong Kong are not put at risk by introducing too many constitutional changes too quickly, but the Hong Kong Government has responded to public feeling by doubling the number of Legislative Council members to be elected in 1985. There was little evidence of support for any moves towards direct elections in 1985. While many people favoured the idea of direct elections, few wanted them in the immediate future.

In preparing the White Paper the Hong Kong Government has recognised the need to keep in mind the provisions of the draft agreement on the future of Hong Kong and the proposals have been framed accordingly. The White Paper proposals are entirely consistent with the provisions in the draft agreement on the future of Hong Kong, which specified that the Legislature of the Hong Kong SAR shall be constituted by elections. The nature of the electoral system after 1997, however, is not specified in the draft agreement.

The noble Lord, Lord Tanlaw, asked me a question about proportional representation. I take the noble Lord's point, but he will be aware that we in the Government do not see the matter in quite the same light as he does. However, I can say to him that Hong Kong is in many ways sui generis, and I think that we should be careful not to project images from political experience elsewhere haphazardly into that territory.

He also asked a question about the high proportion of expatriate magistrates. I have a good deal of sympathy with what he has said about the need for more localisation with the transfer of sovereignty in 1997 in mind. The Hong Kong Government has pursued a policy of localisation for many years, and with considerable success. They would be the first to agree that it needs to be continued; and I agree with the noble Lord, Lord Tanlaw, that the magistracy is an important area in this respect.

The noble Lord, Lord Greenhill of Harrow, asked a specific question about the prospects for developing trade with China—a point also made by the noble Lord, Lord Morris. I agree with the noble Lord, Lord Greenhill of Harrow, that the prospects for trade with China are bright, but successful trade in China will continue to need hard work from the companies involved. They should now take the initiative, and I can assure him that Her Majesty's Government will give every support.

A number of your Lordships referred to the suggestion that the Government should make an annual report to Parliament and that there should be an annual debate on Hong Kong. I am always a little suspicious of the idea of set timetables, but I take note of what has been said and I agree that regular accountability to Parliament is important. I have no doubt that Parliament will maintain the interest in, and commitment to, Hong Kong that has been amply illustrated by this debate.

Lord Cledwyn of Penrhos

My Lords, before the noble Baroness passes on to another subject, I wonder whether she would deal with this matter? First, may I, on behalf of noble Lords, thank her for the thorough way in which she is responding to the debate. On the point of further debates on Hong Kong, either on a White Paper or in another way, she will know that there are a number of questions. However thorough and zealous she has been in answering, there are a number of points which remain unanswered and as the years proceed a number of matters will arise on which Parliament and this House will need answers. Will she give an undertaking that even if set debates are not possible there will be, in Government time, opportunities for the Government to report on the way matters are developing in Hong Kong?

Baroness Young

My Lords, I certainly take note of the point that the noble Lord, Lord Cledwyn, has raised. In the course of the next 13 years up to 1997 I have no doubt that there will be a number of matters that Parliament will wish to debate. He would not expect me at this stage to give guarantees about any specific matters, but I am sure that the point that he has made is an important one. It was made by his right honourable friends in another place. It is certainly one to which I shall draw the attention of my right honourable and learned friend the Secretary of State, and I have no doubt that Parliament will continue to maintain its interest in Hong Kong.

The Government, for their part, will continue to discharge effectively the obligation to assure the administration of Hong Kong up to 1st July 1997. I wish to emphasise that point again. It will be our prime aim to maintain Hong Kong's stability and prosperity. There can be no doubt of our commitment to the territory.

I have been encouraged by the favourable reception this agreement has received from your Lordships. If the Motion is approved my right honourable friend the Prime Minister will visit Peking on 19th December accompanied by my right honourable and learned friend the Foreign and Commonwealth Secretary to sign the agreement. They will then visit Hong Kong.

My Lords, an era of Hong Kong's life will come to an end in 1997 but another, no less full of promise, will begin. The British and Chinese Governments are committed to making the agreement work, but success of the agreement will depend not just on China and the United Kingdom but also on the people of Hong Kong. We have given the people of Hong Kong a firm basis on which to build a prosperous future. They are, as we all know, a resourceful and resilient people, and I believe that they will make Hong Kong in the 21st century an even more striking financial, economic and social success than it is today. The agreement gives them the foundation on which to build. It is a good agreement, and it constitutes a firm foundation. That is why I commend it to the House today.

On Question, Motion agreed to.