HL Deb 24 January 1990 vol 514 cc1102-38

5.40 p.m.

Lord Bonham-Carter rose to call attention to the situation in Hong Kong; and to move for Papers.

The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper.

Let none of your Lordships suppose that we on these Benches think that the situation of either the Vietnamese boat people or the people of Hong Kong is easy and one which has easy answers. On the contrary, it is extremely difficult. It demands from the Government a mixture of flexibility, compromise and firmness. I am glad to say that listening to the ITN one o'clock news today I noted that some encouraging developments were reported. It was reported first, that the 29-nation UN conference on refugees had reached an agreement, which would be announced, that there would be a moratorium of six months on forcible repatriation in order to give voluntary repatriation time to work. Secondly, it was reported that an effective and swift means of processing Vietnamese boat people who arrived in the new season would be established.

It was further reported, as I understand it, that the United Nations High Commission for Refugees would supervise and monitor these arrangements. Such was the report that I heard on ITN. It repeats almost word for word all the recommendations made by my right honourable friend Mr. Paddy Ashdown in another place on 19th December, before Christmas, and in a succession of letters to the Foreign Secretary. I am very willing to congratulate the Government on taking his excellent advice, and I only wish that they had taken it a little earlier.

The fact is that the Vietnamese boat people have always been an international problem which can only be effectively handled on an international basis. I am delighted to hear the progress which appears to have been made. I add that the prospects for voluntary repatriation are not discouraging. Under the UN scheme, 1,000 people have been repatriated already and the forecast for the coming year is 10,000 —a not insubstantial figure.

However, two matters which are of importance and significance were not mentioned in that report. Both refer to the difficult problem of how to stem the flow of further refugees leaving Vietnam, with or without the knowledge of their Government, and coming to Hong Kong. First, it is generally agreed that a substantial proportion of the Vietnamese boat people are economic refugees, driven to take the desperate course of sailing to Hong Kong to escape the poverty in which they find themselves. Thus one would suppose that it was in our interests to do what we could to diminish the poverty of Vietnam which has been brought about by the policies of the Government, by the effects of war, and by the aid embargo which we have imposed on that wretched country. It seems folly in the circumstances in which we are struggling with this flood of refugees who impose themselves on Hong Kong, that we should maintain this aid embargo. I hope that at the conference a further agreement was reached with the assent of the United States that the aid embargo would be abandoned forthwith. If it was not, I think that this country should abandon it unilaterally.

Secondly, arrangements should be made and the United Nations High Commissioner for Refugees should be helped to disseminate information within Vietnam, to stem the exodus, to discourage people from going to Hong Kong. On this I should have thought we should engage the co-operation of the Vietnamese Government as one of the quid pro quos for resuming aid. I also hope that the BBC's external services and other broadcasting organisations should collaborate. That seems to me about all I can say on the subject at present.

The settlement of the situation in Hong Kong must depend and fall finally as a responsibility on the United Kingdom, Hong Kong and China. Since the terrible events at Tiananmen square this summer, the Government of the Chinese People's Republic, driven by fear and insecurity —and we know that fear is always a bad adviser —far from relaxing their internal or external policy, have done neither.

If we look at the internal manifestations of the Government's policy, we thought—and it was presented as such —that it was a relaxation when martial law was lifted. However, it did not show much signs of being a relaxation. When martial law was lifted, there was no suggestion that the 150,000 troops in Beijing and around it would be withdrawn. They are still there. It was reported in a Hong Kong newspaper that 40,000 of the troops had simply changed out of military uniform into the uniform of paramilitary police. At the same time, a new municipal law was published banning strikes and demonstrations. Therefore, I have seen little sign of relaxation in the internal policy.

As to their posture towards Hong Kong itself, it has unquestionably hardened. In July, the Chinese Government insisted that Chinese troops should be stationed in Hong Kong after 1997. At the Commonwealth Conference they objected to what they called the "internationalisation" of Hong Kong. Since then they have demanded that the pace of democratisation should be modified. More recently, they have suggested the introduction of a two-tier legislature. Only 15 per cent. of those elected should have the right of abode abroad. More recently still, they have objected to the package of 20th December.

The question which we must face is: how do we respond? The answer is that of course we have to continue to negotiate with the Chinese People's Republic, no matter how intransigent it appears, because we hold cards much stronger in the negotiating position than is sometimes represented. It is our duty to try to persuade it of this. Further, we have to persuade them that the name of our policy is not appeasement. The idea is prevalent in some quarters and was given plausibility, I regret to say, by the secret visit of Sir Percy Cradock, the Prime Minister's personal foreign policy adviser, to Beijing. That was a most unfortunate venture in personal diplomacy. It was widely interpreted as going behind the back of the Foreign Office and a sign of weakness.

The criterion by which British policy must be judged is whether or not it increases the confidence of the people of Hong Kong. Does it or does it not encourage them to stay put? Does it help to reduce the haemorrhage of emigration which is running now at about 1,000 people a week? Although they are by no means the only bargaining counter we have, our strongest bargaining counter must be the skills and talents of the people of Hong Kong. Therefore it is important that we do everything in our power to stem that flow of emigration. If one applies that criterion to democratisation or to a Bill of Rights, we should support the OMELCO proposals for hastening democratisation simply because that is the consensual view of the people who are most important to the prosperity of Hong Kong. They are the people who make Hong Kong so fundamentally important to China. I support a Bill of Rights not only because the former Foreign Secretary, Sir Geoffrey Howe, pledged himself to it in July of 1989, but also because it is the view of those who live in Hong Kong that it is desirable for itself and as a confidence building measure.

On the question of passports let us apply the same criterion. We must ask ourselves whether the December package of 50,000 families or 225,000 people covered by it which Mr. Tebbit so strongly objects to and which has also caused confusion in other quarters is sufficient as a confidence-building measure. I say in all seriousness that the way we should decide the answer to that question is whether that number is sufficient to act as a trigger to mobilise international co-operation in an effort to increase that number.

I have said from the beginning that I believe we should try to mobilise our friends in the European Community, in the Commonwealth and in the United States to collaborate with us in providing a place of abode, in the event of the worst possible case occurring, to the population of British citizens in Hong Kong. The question we have to answer is whether our December package is big enough to persuade them. I ask most urgently that the Government call at the earliest possible moment a meeting of our colleagues in the European Community, in the Commonwealth and in the United States so that they can help in assuring the future of those people for whom we have a special responsibility. Such an international effort makes the problem facing us much more manageable. It would also provide the kind of confidence that would stem the haemorrhage and would increase the pressure on the CPR to act in the spirit of the joint declaration and in the idea of one nation, two systems.

I have said that I do not think we should underestimate our bargaining position, nor do I need to remind your Lordships of the immense and vital contribution that Hong Kong makes to the Chinese economy. That is astonishing when one thinks of the size of that place. It is astonishing that it creates 70 per cent. of total industrial investment and 33 per cent. of foreign currency. Two million people in southern China are directly or indirectly employed from Hong Kong. Trade between Hong Kong and China has increased in the past 10 years by 1,500 per cent. to £23 billion. That is quite apart from the huge investment being put into Hong Kong, for example in the port and sea development scheme.

Our policy therefore should be to be firm, to encourage the confidence of the people of Hong Kong and to do everything in our power nationally and internationally to provide security for the citizens of Hong Kong in the event of the worst possible case occurring. The Chinese People's Republic cannot want to inherit a ghost town. I beg to move for Papers.

5.55 p.m.

Lord Wyatt of Weeford

My Lords, the Liberal Democrats have been very helpful in putting down this Motion. I am sure your Lordships will agree that it is important to keep developing events in Hong Kong under frequent review. The noble Lord, Lord Bonham-Carter, made a wide-ranging and interesting speech. I agreed with quite a lot of that speech. I congratulate the Government on making some movement on passports. It is not enough, but it is a start. I am sure that if the Chinese are looking really nasty as 1997 approaches, the warmhearted British public will be willing for the numbers with right of abode to be increased. However, we now have something which we can show to other countries to encourage them to give similar help to Hong Kongers.

The Government must be admired for their courage in taking on the section of the Tory Party which has forgotten the pride with which the old Conservative Party honoured its obligations to protect citizens of the once great and benevolent British Empire. Mr. Tebbit and his friends have a blind spot. They cannot distinguish between immigrants from British Empire countries which sought and obtained their independence and those in Hong Kong whom we are about to hand over to a President Ceausescu-type of communist regime. The former were not refugees from political persecution. Hong Kongers have a high probability of becoming victims of it.

I believe that the Government will get through the necessary measures to obtain the limited number of passports. I am sure there are many Labour Members and non-Conservative Members in both Houses who are too decent to support the strange official Labour line that either all Hong Kongers should be given proper passports, or none. That effectively means, as it is intended to mean, that none will get them.

The feeling of bitterness in Hong Kong against Britain is still strong. However, the feeling is not as angry as it was. But the mood is nervous and volatile. It could erupt into ugly scenes as 1997 approaches, making Hong Kong increasingly difficult to govern. China is ruled by men who are frightened by the amazing overturn of seemingly solid communist governments in Europe and even in Mongolia. This induces them to make menacing threats to Hong Kong. The Basic Law now being formulated in China, with little input from Hong Kong, may contain a provision against Hong Kong being used as a base for subversion. This would rapidly be interpreted as grounds for censoring the press and television, although all democratic rights now existing in Hong Kong were guaranteed in the joint declaration of 1984.

Recently Li Peng, the Chinese Prime Minister, said that even if Mr. Martin Lee and Mr. Szeto Wah were elected to the Legislative Council by a 100 per cent. vote before 1997 they would not be allowed to keep their seats afterwards. That is because they have criticised China's attitude since 4th June. Peking is terrified of democracy. The provisions for electing the chief executive, the equivalent of the governor, will ensure that no one disapproved of by China could have the job. China jibs at the very modest proposal of OMELCO for direct elections to the Legislative Council. It is amazing that after more than 150 years there is still no one voted on to that body by popular suffrage.

OMELCO asks that in 1991 one-third of the council should be elected by popular vote, one-third should come from indirect elections in the functional constituencies and one-third should be officially appointed. For the 1995 election it asks that half should be elected by popular vote and half should come from the functional constituencies. Peking says no. By 1995 only 30 per cent. should be popularly elected, with 50 per cent. from functional constituencies, plus a sinister 20 per cent. from a so-called election committee. Those will be Peking's yes-men. No laws would be passed without the consent of those election committee members as well as of the rest. However, it is said that rejected Bills could be resubmitted and passed by a simple majority. I doubt it.

The election committee would be a second chamber, with Peking holding the veto. For 1999 OMELCO proposes 67 per cent. be directly elected, with 33 per cent. from functional committees. Peking says only 40 per cent. can be directly elected and the election committee members will have 10 per cent. of seats, thus retaining the veto from Peking.

The British Government are about to give their verdict on the composition of the Legislative Council in 1991–1995, the last time elections will be held under British rule, with the subsequent election due in 1999. The Government adopt a paternalistic attitude. They advise Hong Kongers not to annoy Peking by pushing for more than Peking proposes or beyond what the British Government consider it is safe to propose without outright rejection by China. We are behaving as though Hong Kongers are our children for ever and we are their nanny. We are not.

If the British Government proposals do not meet Hong Kong's expectations they will be rejected by the Executive Council. The governor would then have to override the Executive Council. That has never happened before. It would be a wonderful present of a precedent for China whenever it wanted the chief executive not to take the advice of the Executive Council or the Legislative Council. If the Governor persisted in pushing in adequate British proposals the Legislative Council would amend them. Otherwise the people of Hong Kong would throw them out, as communist governments all over the world are being thrown out for not following the people's will.

The British Government warn against the risk of annoying China, but it is the Hong Kongers, not us, who take that risk. If there is a reasonable government in Peking in 1997, all will be well. If it is the same Stalinist government as today it will have the embarrassment of openly reducing democracy in Hong Kong. Hong Kong would then be no worse off than if it agreed to China's present proposals.

We are out of date in trying to repress popular demands for democracy. They cannot be put back in the can. If we tried to do that, the Hong Kong people might even demand and seize complete independence now, just as parts of the Soviet Union are trying to do. Where would we be then if Chinese troops came in before 1997 to assert Peking's despotism? The joint declaration would be meaningless.

China is anxious that we should endorse the Basic Law when it emerges in its final form in February and March. That gives us a weapon to insist that any part of it which conflicts with the joint declaration should be removed. The other weapon belongs to the Hong Kongers; it is to insist on a strong element of genuine democracy before 1997. I advise them to go for broke and ask for 100 per cent. to be elected by popular vote in 1991. The longer such a system is in place the harder it will be to destroy.

Long happy with the rule of law and the democratic processes of British administration, Hong Kong has only recently realised the need to run its own affairs. How can we say to those intelligent, able and industrious people that they are less qualified to have one person, one vote than Romanians or Indians? Hong Kongers may not have had complete democracy but they know what it is all about. They will struggle not to be left out of the full democracy tide sweeping through the world. We must help them, not hinder them. We must hope that by 1997 there will be a more or less democratic government in Peking which will allow Hong Kong genuine autonomy and remove all our problems over Hong Kongers fearing to stay in Hong Kong.

6.6 p.m.

Lord Ennals

My Lords, it is a rare privilege for me to be able to speak in this House on a subject other than health. I am grateful to my noble friend on the Front Bench for permitting it. I am grateful to the noble Lord, Lord Bonham-Carter, for introducing the debate, and grateful too to the Foreign Secretary for having invited me, together with Timothy Raison, to go to Vietnam and submit a report on the boat people. My main contribution to the debate will concern the problem of the boat people with its obvious profound implications for Hong Kong.

I have been to Hong Kong on so many occasions that I should like to say two sentences on the broad issue. First, in my view it would be a shameful end to the long history of the British Empire and subsequently the Commonwealth if we were to betray our trust to the energetic, industrious people of Hong Kong. Secondly, Britain must, even though belatedly, push forward the process of democracy, as has been so powerfully argued by the people of Hong Kong themselves. Time is both short and precious and we must lay the foundations for a genuinely democratic system in Hong Kong before 1997.

If my first point has been the need for courage now to avoid the need for a mass flood of refugees from Hong Kong, then my second point and the rest of my speech must be dedicated to those who have fled from Vietnam as refugees or asylum seekers since 1975. They, too, were fleeing from communism. They were also, especially in recent times, fleeing from poverty. Of those whom Timothy Raison and I met who had been returned by plane on 12th December and who had wished to improve their standards of life in other parts of the world, none claimed to be refugees. They had hoped that they could be able to go to Australia, the United States, Canada, New Zealand or elsewhere, as nearly a million of the population had been able to do in the years before.

Vietnam's poverty cannot be blamed on its government alone. It has suffered from long years of occupation. It has struggled against occupation by Japan, the United States and France. It has been denied any form of compensation for the appalling damage that was done to the country during long years of war and for the boycott on trade imposed by the United States, with the support of Britain and other countries within the Community. I am certain that, although it obviously takes some time to see the effects of economic aid, at this moment it would bring great hope both to those in Vietnam —and discourage them from departure —and to those in Hong Kong —and encourage them to return —if Vietnam were incorporated within a world system of aid to the benefit of its people.

It would be unfair to blame the boat people for leaving. So many before them had left. If one considers the group of people interviewed by Timothy Raison and myself, one sees that they all left on 10th or 11th June 1988 and arrived on 20th June 1988. The rules changed on 16th June when they were half way there. They left with the entitlement to be refugees, arrived with that entitlement removed and quite rightly joined the screening process.

I thought it quite proper, although some people might say that it was a little late, that we should decide to draw a line between those who are refugees fleeing from persecution or fear of persecution and those hoping to find a better life in another country. It is vital for the long-term interests of refugees that that definition should be drawn. If we were to say that all who flee from wherever to wherever for a better life are refugees, there would be no definition of refugees left and all the guarantees provided for them since 1950 and supervised by the United Nations High Commission for Refugees would be lost. It is therefore right that the definition should he drawn.

Because Vietnamese citizens have for 10 years been permitted to be accepted as refugees on arrival in Hong Kong, one must try to understand their plight. In a sense they must still be treated as a special case. I was delighted to learn of the agreement reached in Geneva. It was exactly what had been recommended and hoped for. One of the first things I did after publishing our report was to have long discussions with UNHCR about how it would accept the responsibility. The United States' decision to come up with a genuine, orderly return programme after six months' strengthening of the voluntary programme was right for all concerned.

In our report we said that the most important issue was voluntary return. It is best if one can get people to do it because they want to do it. It is fascinating to note that some of the members of the group that we saw complained that they had been kept waiting. They all knew that they would go back o Vietnam. They did not complain about being back in Vietnam. They were complimentary about what had happened to them since they returned.

We have a major responsibility to help in the resettlement programme and to help boost the return programme. That means two things. As we said in our report, it means a major education programme in Vietnam which the Vietnamese Government are prepared to carry out. Much is already being done. Video material is now being prepared and I hope that it will be used with the help and backing which Britain can give to ensure that it is shown throughout Vietnam. Many organisations indicated that they would be ready to support that. It is essential that the message gets through to the camps in Hong Kong. I heard many people, including those whom we interviewed, say that they were not fully informed about the opportunity of volunteering to go back. The six-month moratorium which has been decided today is of great importance.

There is more that we can do to help those people who have returned. For example, the fishermen whom we interviewed went off their with their boats and came back without them. Vietnamese fisher families not only fish from their boats but live on their boats. If they do not have a boat, they have neither a job nor a place to live. That is the kind of aid that we can give them. We can help them with the money needed to make a boat. We can also help others, including farmers, agricultural workers and carpenters, with the tools of the job to enable them to settle back properly. If the British Government are responsive to the proposals made in our report and at the Geneva conference, a proper and effective solution might be found to the problem which is so sad for Vietnam, Britain and Hong Kong.

6.15 p.m.

Lord Sharp of Grimsdyke

My Lords, I wish to acknowledge most sincerely the courteous and gracious manner in which your Lordships received my admittance to your Lordships' House. I wish, too, to acknowledge in advance the usual courtesy extended to one who is making his maiden speech. I hope that your Lordships will accept that I have made strenuous efforts to sanitise my speech to ensure that I do not breach the convention which commands your Lordships' respect and attention.

It is in that spirit that I have to declare my special interest in the subject of this debate. I am chairman and chief executive of Cable and Wireless plc which currently owns 75 per cent. of Hong Kong Telecommunications Ltd., of which I am also chairman. Hong Kong Telecom provides Hong Kong's domestic and international telecommunications networks. It is Hong Kong's largest company with over 18,000 employees and a market capitalisation of over £4 billion.

Hong Kong is one of the world's most successful economies. It is in fact the eleventh largest trading territory in the world and little Hong Kong has achieved a level of exports nearly one-third of that of mighty Japan. Britain has a special role in Hong Kong as the sovereign power. That includes an obligation to maintain Hong Kong's stability and prosperity up to 1997. But, apart from moral and legal obligations, I believe that it is in Britain's economic self-interest to help Hong Kong.

The list of British equipment bought by Hong Kong Telecom includes satellite earth station equipment, broadcasting towers, fibre-optic cables and pay telephones. Those purchases are part of the £1 billion a year of visible exports from Britain to Hong Kong. Moreover, the dividends that Hong Kong Telecom pays to Cable and Wireless are part of the £1 billion a year of invisible earnings which the UK derives from the services of all British companies operating in Hong Kong. Other examples are power generation equipment for the electricity companies, rolling stock for the mass transit railway, cranes at the container terminal and the structural steel for the Hong Kong Bank's magnificent headquarters building; all these have been bought from Britain.

Those exports have been achieved because of the considerble British commercial presence in Hong Kong. British-managed or controlled companies have a gross stock market value of £20 billion which is 40 per cent. of the Hong Kong stock market. That far outweighs any other national business influence in Hong Kong which is an excellent base for expansion of British influence in the Asia Pacific region before and after 1997.

I should like to speak briefly about the so-called brain drain which is one of the most serious problems facing Hong Kong today. Although many Hong Kong people were optimistic when the joint declaration was signed, emigration has since accelerated and the tragic events of last June make it likely that that trend will continue. I believe thal there is very little disagreement on the reason for that emigration. People in Hong Kong fear uncertainty about the kind of lives that their families will have after 1997. They therefore seek the insurance policy of a foreign passport. At present, the only way to obtain one is to leave Hong Kong and spend several years abroad. I hope that the nationality package which was announced before Christmas will go some way towards alleviating the problems of emigration and I emphasise that the objective of the package is for the Hong Kong recipients to remain in Hong Kong.

I should like to refer noble Lords specifically to one key part of the Government Statement made in your Lordships' House and in another place on 20th December last which has been virtually lost sight of in the welter of emotion —much of it, I fear, ill-informed —which has followed. Here I quote: within the total numbers I have given, the Government propose to introduce a special measure designed to help companies and institutions in Hong Kong to retain their key personnel … The companies and institutions concerned would arrange secondments of key personnel for work or training in the United Kingdom for relatively short periods of time, thereby minimising any disruption to their work in Hong Kong."—[Official Report, 20/12/89; col. 281.] It is clear that under this part of the package those concerned, having come to the United Kingdom for a period of secondment to work for a British company, will then have to return to Hong Kong for a much longer period before they can acquire the right of residence here. I welcome the targeting of the scheme at key workers whose presence is vital to Hong Kong. I know that it is not the Government's intention to give citizenship to a wealthy elite, and I hope that the legislation will make that clear.

I know that the scheme has been criticised as divisive but in my experience Hong Kong people are not jealous of their neighbours. They do not begrudge them success or good fortune. Rather they aspire to emulate them. Indeed when I visited Hong Kong a few weeks ago no one was opposed to the package on the grounds that it would cause jealousy or resentment. Their disappointment was that only 50,000 heads of household would benefit and not more.

I should like to end on an optimistic note. I believe that Hong Kong will weather this storm, that China's economic self-interest will prevail and that Hong Kong's success will continue long after it becomes a Special Administrative Region. That belief has been strengthened during my recent discussions with the CITIC, an external agency of the People's Republic of China, about the acquisition of a significant stake in Hong Kong Telecom. Here is China wanting to invest billions of Hong Kong dollars of hard currency in a Hong Kong company. That investment will bear fruit only if Hong Kong's capitalist system and way of life are maintained. I believe that this is a sure sign of China's long-term good intentions.

Boileau, the eminent French philosopher, said: That which is accurately conceived is accurately expressed. I hope that your Lordships will extend to me your sympathetic understanding if, on this special occasion, I have strayed from that splendid maxim. I should be grateful to your Lordships for your indulgence in accepting my speech as non-controversial, even if I have tested the limits of that indulgence. I confess that I look forward to the freedom of future opportunities to address your Lordships in a less restrained manner, recognising as Lady Bracknell said: "On these occasions it becomes more than a moral duty to speak one's mind. It becomes a pleasure".

6.22 p.m.

Lord Geddes

My Lords, it is a considerable honour to be the first to follow my noble friend Lord Sharp of Grimsdyke. He has spoken not only with great lucidity but also from a very real depth of knowledge regarding Hong Kong. He happens to share with one of my forebears the illustrious name of Eric, though I must say I hope that any axe which he may have (dare I say it?) is not as sharp. He shares with me the wonderfully therapeutic recreations of music and gardening. On behalf of the whole House I congratulate him most sincerely on his excellent maiden speech and hope that we shall hear him often in the future.

In thanking the noble Lord, Lord Bonham-Carter, for introducing this timely debate on Hong Kong, perhaps I may also say how very sorry I am that the noble Lord, Lord MacLehose of Beoch, is not able to be in his place this evening. I hope that it is in order on behalf of all your Lordships to wish the noble Lord a speedy and successful recovery from his operation.

The joint declaration of 1984 is, a formal international agreement, legally binding in all its parts". It represents, the highest form of commitment between two sovereign states". Paragraph 4 of that agreement states that during the transitional period leading up to the restoration of Hong Kong to China on 1st July 1997 (for the third time I quote), the Government of the United Kingdom will be responsible for the administration of Hong Kong with the object of maintaining and preserving its economic prosperity and social stability". This evening I propose to outline to your Lordships the only way in which I and, I believe, many others suggest that the United Kingdom can acquit itself of those responsibilities. I should like to begin by repeating what I first said to your Lordships on 21st May 1984: Hong Kong has one, and really only one, resource—its people. Without them and their confidence in the system, Hong Kong basically is nothing". —[Official Report, 21/5/84; col. 112.] In order to hand over to China a Hong Kong which bears some resemblance to the territory for which it negotiated in 1984, Hong Kong's main resource must be intact: its people must still be there.

Even before the events in China of June last year the people of Hong Kong were understandably nervous. But now there is a genuine and, I would say, wholly justifiable fear for their future. The recent events in Eastern Europe, particularly Romania, if anything should increase our concern for the people of Hong Kong. The demonstration in Hong Kong on New Year's Day this year which called for the downfall of Ceausescu's China highlighted the parallels only too clearly, and the extent to which it has drawn China's ire shows what a sensitive spot it hit with that country's leaders.

The Chinese will not relax their vigilance to search for and stamp out popular movements for democracy; quite the reverse. Martial law may have been lifted but the new PRC envoy to Hong Kong, Mr. Chou Non, is described —I quote from an article in the press —as an, unsympathetic, smooth talking hard liner who is likely to take a tougher line on Hong Kong matters than his predecessor". Despite the commitment in the joint declaration that, the Hong Kong Special Administrative Region will enjoy a high degree of automony [and] will be vested with executive, legislative and independent judicial power", Peking announced as recently as the 20th of this month that only 18 members of Hong Kong's 60-seat Legislative Council would be directly elected in 1997. Even that 30 per cent., as the noble Lord, Lord Wyatt, reminded us, will have their power curtailed by a two-tier voting system which would give blocking powers to indirectly elected members. We cannot acquiesce in such a situation and must ensure greater and faster democratisation.

The 1984 joint declaration and its accompanying Chinese memorandum said that China was not opposed to Britain giving passports to Hong Kong people and that it was entirely an internal matter for the British Government. Less than a year ago the same Mr. Chou Non and Mr. Qian Qichen, the Chinese Foreign Minister, separately stated that Britain's decision on how many Hong Kong citizens would be granted citizenship was an internal affair of the British Government. But now Peking is criticising this Government's brave — I use the word deliberately —nationality package and even stated that any Hong Kong resident who has the right of abode in any country other than China will be disqualified after 1997 from holding senior government jobs.

I base my case this evening on the United Kingdom's duty to fulfil its contract with China. I have not raised what to my way of thinking is the equally forceful argument of our duty to the people of Hong Kong. As that is an argument which apparently has no weight with certain Members in another place, I have altered my line of reasoning in case they are more readily convinced by our obligations to China under the 1984 joint declaration. I must say that I was more than shocked by some of the opposition to the Government's recent nationality package. Frankly, to me it smacks of racism. It is apparently based on what can only be described as the amoral and immoral excuse that it is a vote loser. This Government to my knowledge have never been known to shirk their responsibilities on that score —and heaven forbid that they should start now.

Those who make the claim that it undermines the Government's pledge not to allow any more full-scale immigration have entirely missed the point. The point is—as has been reiterated time and again—that granting the right of abode in this country to the people of Hong Kong is the surest way to prevent large-scale immigration. No one can any longer be in doubt that the only way to encourage the people of Hong Kong to remain there is to give them the freedom to leave.

We should make no mistake. If China finds itself presented in 1997 with a Hong Kong devoid of its main resource there will be little or no incentive for it to abide by its side of the 1984 contract and nothing in the Chinese leadership's behaviour should lead anyone to expect that it will honour its commitment without a powerful incentive.

A great deal is being said at the moment about the internationalisation of the Hong Kong question and the provision of an international safety net for Hong Kong. What that means in practical terms is surely that countries such as Canada, the United States and Australia will in an emergency accept Hong Kong people. But obviously they will accept only those people whom they see as an asset to themselves. The force of world opinion, and this country's undoubted higher duty towards Hong Kong, will be such that this country will be forced to take the remainder. Quite apart from the Government's duty to China, or even to Hong Kong, that is surely not the way to fulfil our obligations to the citizens of this country.

If we hand over to China a Hong Kong devoid of the majority of its key personnel, China may well say that the subject matter of the contract has been altered and that it is no longer bound by the terms of the 1984 joint declaration. We have the clearest obligation to do all that we can to avoid that situation.

6.32 p.m.

Lord Diamond

My Lords, we should certainly consider ourselves fortunate to have been able to listen to such a well-informed and timely maiden speech as that recently made by the noble Lord, Lord Sharp of Grimsdyke. It is indeed fortunate that with his enormous knowledge of affairs in Hong Kong he is able to speak at this time. I congratulate him most heartily on his speech and in particular on its confidence-building atmosphere. Too many of the speeches that we make in our attempts to improve the situation ignore the fact that our first duty is to restore, not to destroy, confidence in the future of Hong Kong. I therefore repeat my congratulations to the noble Lord.

Speeches by those who are particularly well-informed, such as the noble Lord, Lord Ennals, have been made with regard to the boat people. Therefore in the time available to me I shall restrict myself purely to comments about the economy of Hong Kong and the need to sustain confidence in it. In spite of the obvious fact that the major interests of the three parties in a prosperous Hong Kong are at one, and that the common accord between the two Governments in their negotiations on the Basic Law existed before June, there is no doubt that he events of Tiananmen Square created what has rightly been described as a haemorrhage of key personnel leaving their country, and a consequent need to take some overt action to restore confidence by attacking the malaise at its root level. By "malaise at its root level" I mean that every resident in Hong Kong would say to himself, "Things are fine now, but what if after 1997 they develop in such a way that my personal liberty and prosperity are such that I must go?" It is to answer that question that the Government have come forward with their proposals which I warmly welcome and support, as do all my colleagues on these Benches.

It is admittedly a minimum response that clearly will go some way towards restoring confidence and ensuring efficient government in the meantime. I very much hope and believe that it will encourage those who have already made a great contribution to follow our lead. Moreover, key workers who have an alternative choice —a right of residence in this country—quite obviously will not feel so much at the mercy of those who negotiated with them, as they would have done if they had no such rights, since they are likely to receive more sympathetic consideration.

I am sure that my long-term confidence is shared by the majority of people who know Hong Kong. I believe that it is still justified by the continuation of those economic policies of China—and I speak of Chinese mainland—which came into effect before June last year; namely, the movement towards a market economy and greater openness in foreign relations, especially towards the West.

I was particularly pleased to hear the noble Lord who has just made his maiden speech say that there is evidence of communist China taking a capitalist interest in the affairs of Hong Kong. Perhaps I may add that when I was in Canton less than two years ago my colleagues and I were being entertained by the authorities there. The main topic of conversation was the creation of a communist stock exchange in Canton. One may at first blush think that that is not necessarily the most obvious topic of conversation to arise in those circumstances.

There is a special Chinese angle to these matters. The Chinese Government have shown no difficulty in understanding the need to continue a capitalist market economy in Hong Kong and have reaffirmed their commitment under the joint statement. I see no reason, either because of current conversations with China —and I was talking to those in the embassy for two hours only a few days ago—or because of the precedents that China has set in the past, to believe that China will not honour its commitments in the way in which it entered into them, and which it has now reaffirmed. That may be considered somewhat naive. I do not believe that one achieves anything by doubting the honesty of nations when they have shown no propensity to be otherwise. Therefore I am glad that the Government have taken these steps which I am sure will help enormously.

I hope that the noble Lords will be good enough to bear in mind that by entering into the joint declaration of 1984, and by approving for so many years ahead the continuation of two systems in Hong Kong, the parties demonstrated that they had resolved the argument between sovereignty and economic prosperity. They decided that it was far better to have a prosperous Hong Kong open market economy than to exercise absolute sovereignty. I see no reason for believing that that will not continue.

Finally, as to democratisation, I hope that the Government will not rush the matter. I remember very well first hearing Clem Attlee's wise advice that a good statesman should only go as far as he absolutely needs. The Government need to negotiate, as they are doing, as favourably as possible.

So far as the 1991 elections are concerned, I believe that as we move away from the crisis of last year, the Government would find the atmosphere much more favourable, if they negotiated the rest of the plan at a much later date. They have no need to do it now. We approve these proposals and we believe that the House as a whole should similarly do so.

6.41 p.m.

Lord Eden of Winton

My Lords, I too should like to congratulate most warmly the noble Lord, Lord Sharp of Grimsdyke, on his maiden speech. Like the noble Lord, Lord Diamond, who has just spoken, I found particularly warming the encouraging message which he gave to your Lordships' House. But I think we all recognised that, speaking as he does with such knowledge of Hong Kong and with such authority from his long experience of Hong Kong and of China, the words he spoke here will be faithfully recorded and reported, and much spoken about throughout Hong Kong.

In that sense, I am sure we should also thank him for the encouragement which he is giving through his speech, for the work he is doing in Hong Kong, for the condidence he is showing in the future of Hong Kong and for the encouragement he has given to its people. I should also like to thank the noble Lord, Lord Bonham-Carter, for having taken the initiative to bring forward this debate. It is, as has been said, an extremely opportune and timely one.

Recently, in relation to Hong Kong the Government have had three extremely difficult decisions to take. I do not think anyone should underestimate how difficult they must have been. There has been the matter of the determination of the nationality package; there has been the whole difficult question of the Vietnamese economic migrants and the refugees associated with them; and there has been the question of democratization—to use that rather nasty, contrived word—which covers a much larger problem than perhaps is recognised.

On the first two, the Government have already announced their decision. On the third—democratization—they have not yet done so, but it seems that their decision is likely to be taken and announced very shortly. I hope very much that they will accept the proposals of the Hong Kong Legislative Council. They are modest. They are not in any way to be seen as excessive demands. They are the product of much debate and discussion internally within Hong Kong and as such they should carry considerable weight with us here.

Considering this matter reminds us that the United Kingdom Government still have sovereign responsibilities for Hong Kong right the way through to 1997, and it is essential that we are seen to be exercising our proper role in respect of those responsibilities. It would be unfortunate if the impression were to be given that on major matters we were falling too far over towards the views expressed from Beijing. However, that is not to say that we should ignore those views. It is absolutely essential, particularly in respect of democratisation, that we take those views very much into account. Therefore I recognise that there may have to be some form of compromise, perhaps over the phasing, over the number of steps which are taken for the introduction of democratisation.

I do not think that we can go immediately, or, as the noble Lord, Lord Wyatt of Weeford, wants to do, go for broke, 100 per cent. It would be much more sensible to go by degrees, because the important thing here surely is not the precise percentage that is taken as a first move but that the first move leads on to subsequent moves and that those subsequent moves and what they enshrine are secured for all time into the future. In other words, what is most important in the terms of democratisation is continuity after 1997, so that we have the commitment of the Chinese Government to back it all the way through and continue its development after 1997.

The noble Lord, Lord Ennals, made a most interesting and informed contribution on the Vietnamese economic migrants, and he has done tremendous service in the careful study that he made of this subject. It could not have been easy for Ministers—I know he recognises this fact—to take the decision that they did to return a number of Vietnamese economic migrants by compulsory means. I am sure it is right that they did so. If it is now the case, as appears to be so, that there is some form of agreement for a six-month moratorium, I hope that that will at least provide for the treatment to be given to the new influx of refugees that may he expected from March, because it would be foolish indeed for the international community to close their eyes to the fact that more are likely to come as soon as the weather conditions permit.

I also hope that if there has been this agreement which has been signalled to us this afternoon, it indicates that the United States attitude has changed and that no longer will we have what a senior official recently said to me when I was in Hong Kong: "You must remember that for the United States Vietnam is still the enemy". That time is now past and it ought to have been buried in the past. I agree with those who have said that it is time to look ahead, to give economic aid to bolster up, to improve and strengthen the economy of Vietnam in dealing with this difficult situation.

Lastly, I want to say a word on the nationality package. I support very much the proposals of Her Majesty's Government. I believe that we have this commitment in this country which should be honoured and I would be dismayed if, by one means or another, however contrived, another place were to reject the Government's proposals when they come to legislative form. This is the very least we can do and I think that all Members of the other place should support the Government in the decision that they have taken.

What we have to ensure is that we do whatever we can between now and 1997 to secure and promote the economic strength of Hong Kong. I ask your Lordships to compare the successes of Hong Kong, about which we heard earlier today, with the circumstances which have overcome the people of Eastern Europe or those of other states where freedom of the individual is denied.

In Hong Kong we have a shining example of a free market system with free people. I hope that it will not be too long before the Government of China recognise the fact that even though freedom may carry some risks (and what system does not?) a free people, given free choice, offers a much better prospect of happiness for all their citizens and the opportunity for the security of government. That is what we have achieved in Hong Kong and what we shall shortly be bequeathing to China. It must deserve the inheritance that it is gaining.

6.50 p.m.

Lord Derwent

My Lords, I add my thanks to the noble Lord, Lord Bonham-Carter, for introducing the debate. The fact that the House shows such a continuing interest in the future of Hong Kong is a positive factor in reassuring the people there that they are not forgotten and abandoned.

Apart from giving myself the pleasure of speaking after the noble Lord, Lord Sharp of Grimsdyke, to whom we listened with the greatest attention, I had not intended to intervene in today's debate until I read the intemperate attack on the Governor printed last Sunday by one of our leading newspapers. The report speaks of "furious British business giants" who are alleged to have described Sir David Wilson as a "puppet of Peking" and to have called for his removal from office. The newspaper's editorial described him as a "lack-lustre errand boy".

I have no direct knowledge of what any British businessman or businessmen may have said to the press and I do not necessarily believe everything that I read. However, as some noble Lords may know, I am closely connected with some of the largest Hong Kong businesses controlled by Hong Kong Chinese people. I declare an interest in that respect. I wish to assure your Lordships that none of my friends would wish to be associated with any such denunciation of the Governor. Indeed, there is considerable admiration for the patient and dedicated way in which Sir David is trying skilfully to advance the cause of the people of Hong Kong. We find it to be profoundly unhelpful when the press or businessmen say anything which may undermine the authority of the man who must negotiate on our behalf with the People's Republic of China.

Tonight I wish to say only that I hope that one of the signals which will go out from this House to the Government in Beijing is that the Governor enjoys the full confidence of all noble Lords.

6.53 p.m.

Lord Bramall

My Lords, I also congratulate the noble Lord, Lord Sharp, on his most impressive and knowledgeable speech and thank the noble Lord, Lord Bonham-Carter, for the opportunity to discuss a most important subject.

However much one approves of the historic agreement on the future of Hong Kong after 1997—and I happen to believe that it remains in the long-term interests of its people—this country will, whichever way one looks at it, be handing over more than 4 million people to the tender mercies and ultimate authority of a form of government which at the moment, has few if any attractions for the people of Hong Kong. When one sees the way in which people throughout eastern Europe have rejected forms of authoritarian government to which they have not even been handed over but have actually grown up with, we can appreciate what a major step that is.

China's compliance with the spirit as well as the letter of the agreement, giving a large measure of autonomy to Hong Kong for 50 years, will greatly ease the transition and soften the landing. But unless the Basic Law is tightened, excuses could be found to water down that autonomy. After the Union flag comes down and the British armed forces have left there can be no guarantee that China's view of autonomy will be the same as ours or that of Hong Kong.

It is not surprising that we, who took Hong Kong by an act of war and ruled it for 150 years (except for three years), who benefited from, and helped with, the self-generated and manifest success story, and to whose people, therefore, we have deep and binding obligation have some real problems on our hands.

Basically, other than the important problem of refugees which has already been fully covered, these fall into two parts. The first is to whom, and to how many of those who now live and work in Hong Kong, should we give the right of abode in this country? The second is to what extent we introduce soon a predominantly elected democracy as opposed to the merely free society which now exists, albeit in the guise of a benign autocracy.

As regards the first problem, the Government have taken a courageous and, I believe, correct stand. They have done so on the basis that, if certain people had a guaranteed escape route, they would not wish to leave Hong Kong—that is, at least not unless China manifestly shows (and we hope that it will not) that it does not accept the kind of freedom and autonomy which is hoped for if not expected under the treaty—and that they will certainly stay long enough to work towards the handover of a going concern in 1997 which, under the treaty, is our part of the bargain.

Peking, or Beijing, may not like that questioning of its ultimate good faith. However, there is little that it can do about it because in a free society no one can stop people leaving. All that it can do is to threaten, as it appears to have done, that after 1997 anyone so protected by us will not be employed or protected by it. If that happens we must expect all those who have been allowed to come to us or to go to other areas in Europe to do so. But in a world in which all areas are becoming more cosmopolitan I find nothing unacceptable about that. I believe that some people have greatly underestimated the ease with which such friendly, immensely able and innovative people can be absorbed into our society and the contribution that they can undoubtedly make to our general wellbeing. We should be under no illusions about what will hapen. As has been said, we may even have to take more people if something goes wrong.

The other part of the problem is more difficult, as the right honourable gentleman the Foreign Secretary is no doubt finding, perhaps giving an occasional, cursory thought to his erstwhile literary treatment of another traumatic if hopefully different scenario in Hong Kong in one of his novels.

When I was in Hong Kong during the 1970s it was the conventional wisdom that there could not be an elected democracy there because China would not like it. It was believed that China's particular friends would always have to win such an election and that if they did not all hell would break loose. Sadly, however much we should be moving forward together with China—and no stone must be left unturned to do so—some of that cautionary tale still applies. That is for the simple reason that at this moment, and since the fiasco of Tianaman Square, China fears the repercussions of a truly democratic society within its borders even more than it welcomes the enormous economic advantages of a profitable, foreign exchange earning powerhouse to help with its modernisation.

Of course, in time all those things may change and hopefully for the better. But for the moment, even the direction let alone the timing of any change is uncertain. On the other hand, Hong Kong probably sees such a logical development not only as a sensible way of governing itself freely and effectively over and after the transitional period, but also as an insurance policy within China and internationally against too many liberties being taken with its self-government after we have left. However much Hong Kong seeks to keep out of Chinese internal affairs, a conflict of interest is all too obvious.

As has been said, there may be some negotiable compromise and I sincerely hope that there is. But if not, Her Majesty's Government have the difficult job of deciding where they put their weight and influence. Loyalty and our own political system—the responsibility for Hong Kong is entirely ours—would seem to point to our meeting these most understandable and ultimately inevitably aspirations of the Hong Kong people. If we do, are we prepared for any confrontational situation which may then arise if China sees it as a strong incentive to change and democratise a political system before it is right to do so?

Are we prepared not only to maintain, but if necessary to enhance, a strong garrison in support of the police to ensure that while we are in charge no undue pressures can be put on the citizens of Hong Kong nor liberties taken, as has happened in the past?

If we proceed along this path—and, as my noble friend Lord Wyatt said, we may have no option but to do so—we must have the courage and resources to see it through. On the other hand, in the longer term can Hong Kong be certain that it is in the interests of the people who remain there to embark too early on such a high profile course of constitutional reform in advance of any prospect of changes in China which must in any case one day come about when Chinese goodwill is so fundamental to a harmonious transition? Certainly such political development will always remain a good bargaining point. One day, perhaps not too far off, it may be accommodated without friction on either side as China herself becomes, we hope, more democratic. However, only in Hong Kong will it really be possible to tell where this balance of advantage lies and what would be the best timing. For the moment very careful thought and statesmanship are required; and I know well that Hong Kong possesses citizens and public figures with just those qualities and capabilities.

The task of this country is to support in every way we can the true interests of the people of Hong Kong. Our responsibilities do not end when the Hong Kong ship of state has been piloted through the outer reefs and into the grand harbour of Chinese sovereignty; but only when she is safely and happily berthed alongside. There is still so much to do before we have fully met our obligation.

7.2 p.m.

Lord Willoughby de Broke

My Lords, I should like to begin by thanking the noble Lord, Lord Bonham-Carter, for initiating this debate. I join with other noble Lords in praising the noble Lord, Lord Sharp of Grimsdyke, for his excellent maiden speech. I declare some sort of fellow interest because I too made my maiden speech on the subject of Hong Kong.

We all recognise what a thorny problem the Government have in Hong Kong, and it is all too easy for us as outsiders to propose, while the Government have to dispose. The question of passports has in particular exercised everyone concerned with Hong Kong. I agree with the noble Lord, Lord Wyatt, and my noble friend Lord Geddes that this is an opportune moment to congratulate the Government on their resolute stance in the face of strong opposition both in China and, regrettably, in another place. In an ideal world Hong Kong would have wished for more passports, but I believe the Government now deserve encouragement rather than criticism.

Leaving the passport issue on one side, it is now clear that we must answer the need of Hong Kong for a firmly entrenched guarantee of more rapid progress to democratic government. Until June of last year it was possibly true that Hong Kong was vulnerable to the criticism that there was little interest in politics and that representative government was low on the agenda; but that was only partly true. The governor's powers have always been exercised after thorough deliberation with EXCO and LEGCO. There was democracy, if not in form at least in substance. However, the opinion polls, the demonstrations and feedback to members of LEGCO, all indicate great support for a fully elected representative government in Hong Kong sooner rather than later.

This case was eloquently and persuasively pressed by Dame Lydia Dunn and Alan Lee on their recent visit to this country. Their question—and I put it to this House on their behalf—is this: why the hesitancy in granting a limited step forward? What is the bone sticking in the Government's throat that stops them from swallowing the OMELCO consensus for a minimal increase to 20 directly elected seats in 1991—as we have heard, that is rather modest and only one-third of the total of 60 seats in the legislative council—and a further increase to half the seats by 1995? This would mean that until 2003 there would not be a fully directly-elected Legislative Council; 13 years from now. That is a far cry from the proposal of the noble Lord, Lord Wyatt, for 100 per cent. in 1991 and even less than the recommendation of the All Party Foreign Affairs Committee in the summer of last year which recommended that half the seats be directly elected in 1991 and all by 1995. I ask again: why the hesitation?

Our record in granting self-determination has been honourable. Our former colonies in Africa were given their freedom with a Westminster model for democracy as a parting present; in some cases it was with almost indecent haste that they were shown the door to independence with a bare year or two to assimilate and understand an alien system of representative government. We went to war over the wishes of the Falkland Islanders to be free. I understand that we have offered to help Romania organise its first free elections. We endorse freedom wherever we find it. All this is entirely to our credit. Why then do we still haver over the now strongly expressed wishes of the citizens of Hong Kong to participate more fully in their own destiny? Surely we cannot know better than the people of Hong Kong what is good for them. They above anyone else care about the stability of that territory in which they live.

We all realise, both here and in Hong Kong, that there has to be a dialogue with China; but dialogue not monologue. It was very encouraging to hear the words of my right honourable friend the Foreign Secretary that this does not mean finding out what China wants and then doing it. It means putting Hong Kong's interests above the fear of treading on Chinese toes. It means not allowing China to eviscerate the joint agreement by altering the provision for an elected legislature. Of course, there has to be dialogue and we have to allow for the concept of "face"; but we too have "face", which is our duty to the expressed needs of the people of Hong Kong who, it is worth noting, were not consulted on their future at the signing of the agreement with China in 1984.

At 30th June 1997 the only protection they will have is what we give them now; thereafter, they will be on their own. How then can we deny them what they ask? They are willing to take the risk. They are not asking us to take the risk for them. This country risks nothing, yet it would help Hong Kong so much if we were to grant what are, after all, limited requests with ready good will rather than having each concession wrung from us as though we were not all on the same side.

I believe that in giving Hong Kong what it now seeks in terms of electoral freedom, the Government would be supported wholeheartedly not only in this House but by all sides in another place and there is nothing that would at this moment be more warmly welcomed in Hong Kong.

7.8 p.m.

Lord Gridley

My Lords, in opening my speech, I should first like to express my appreciation to the noble Lord, Lord Bonham-Carter, for the Motion moved by him and also great appreciation for the maiden speech made by the noble Lord, Lord Sharp of Grimsdyke. It is a great example of the assistance that can be given in your Lordships' House and of the people of his calibre and experience who come here to give us the benefit of their experience in such situations as we are considering today.

It is customary to make some comment on the speech of the previous speaker and although I do not wish to go over what has already been said in the speeches of other noble Lords this evening, I agree wholeheartedly with what he said about giving the responsibility for the government of Hong Kong to the people themselves long before it is anticipated that they should have it. However, before I come to that, I should like to say that we are grateful to the noble Lord, Lord Bonham-Carter, for calling attention to the issues involved in returning Hong Kong to China after the year 1997. These issues are bound up in securing the future happiness of the people of Hong Kong and the responsibility lies heavily upon Her Majesty's Government to achieve that, or at least endeavour to do so.

Perhaps I may say that it is not as if the grant of independence to Hong Kong and its procedures follows the pattern observed by Britain hitherto when granting self-government to other member countries when the former British Empire was being dissolved. That procedure has not been followed because it has not been possible to do so. In that procedure, and long before the territories to which I have referred were later advancing towards independence, the people within those areas were being given by the British Empire experience and responsibility within various administrative posts in the progress towards democracy and independence. That progress occurred in the territories for which they were responsible. They lived and worked in those territories while Britain was exercising a light and loose control. That has not been the procedure so far leading up to 1997 when Hong Kong will be handed back to China.

I find myself with a certain amount of anxiety concerning other matters. I refer to the 225,000 people from Hong Kong who will settle in Britain in certain circumstances. I do not believe that the people of this country markedly object to that. However, they tend to say that we, in the parliamentary sense, consider that we should help people who are in difficulties and not consider all the implications involved in a decision of that kind; namely, of absorbing that number of people without difficulty, and besides the question of the British interests involved. That is all I have to say. I have spoken for a very short time. Those are the matters that I wished to bring to the attention of your Lordships.

7.11 p.m.

Lord Butterfield

My Lords, I also add my appreciation and congratulation to the noble Lord, Lord Sharp of Grimsdyke, on his very impressive maiden speech. I wish to make his remarks almost the central theme of the few points that I want to make. I congratulate him on the remarkably good internal and international telephone service in Hong Kong, which I have enjoyed. I wish all strength to his equipment and activities on that front.

I am on my feet because I am the chairman of two education trusts in Hong Kong, which means that I spend quite a lot of time talking to young people who wish to pursue higher education in this country or elsewhere in the Commonwealth. I am embracing the importance of information because I find that the students surprise me from time to time with the strength of their feelings about what is taking place in Hong Kong. They have a very real concern that we shall be deciding with Beijing rather than with them in the future.

I was with some of the students at lunch today because they were all anxious that the chairman should entertain them to lunch in time for the Chinese New Year on Saturday. I must convey to your Lordships my surprise that in the past these young people thought that we feared that China might be very upset if we indulged in widespread democracy in Hong Kong. The noble and gallant Lord, Lord Bramall, made the point. The students resent, and feel very bitter about, the fact that we have not given them much opportunity to have a voice in their future.

The message that comes through is that all of us who have the opportunity must, whenever we can, give the people of Hong Kong an opportunity to express to us their point of view. I fully support all that the Government are doing. I believe that their strategy so far has been excellent. I am anxious that we improve the intelligence service as best we can. I hope that any noble Lords who get strong signals about a lack of confidence in what we are doing will make sure that the Foreign and Commonwealth Office hears what is in people's minds.

I am sure that all noble Lords who know Hong Kong are aware of how mercurial the situation is there. I believe that is reflected in the dreadful attack on the remarkable Governor, Sir David Wilson, who seems to embody all that is best in what we are trying to do in Hong Kong. He is leaving Hong Kong with a development programme concerning airports, communications, tunnels, education and health which is going to run well into the next century. That is exactly the way one would wish to see a strong man providing leadership and giving people confidence. I applaud all that he has proposed.

One of the interesting features about talking to students, which is inevitable when the students are in this country and therefore less concerned about passports, is that they are now beginning to believe there is more concern in Hong Kong about people having a vote. In a way a vote is more valuable in general to the younger people of Hong Kong than the possession of a passport. As an aside, I must tell your Lordships that I was a little disappointed when I explored the question of where they would like to go it they leave Hong Kong. There is no doubt that the new world, particularly Canada, seems to them to be a more glowing home for them and their families in the future. I fear that is because we diminish all the time the amount of money we are putting into research, which is a very important matter for students.

I wish to convey to your Lordships how much we are going to need strong nerves. We shall need to increase our personal information by listening to what these wonderful people of Hong Kong are telling us. We must have strong nerves in being willing to argue out with them whether the line that they are pursuing at any moment is right. Like the rest of us, they are empiricists and great opportunists. I apologise to your Lordships for another aside. A student said to me today: "I understand that your foundation gives £500 a year to the department where I work, but I do not seem to be able to get any of it to travel to London or to go to meetings".

I explained to him that the reason we give £500 to the department where he works is to offset all the incidental expenses that he incurs; for example, for electric light and even soap. As soon as that was explained to him he understood. That is part of my argument for embracing the need for the exchange of as much information as possible in the Far East and Hong Kong. The noble Lord, Lord Ennals, made the point that we are just beginning to make communication with Vietnam by using videos in order to try to slow down the flow of the boat people. That is another example of rather late communication with the Vietnamese.

We have heard from noble Lords two instances of the way in which the people of Beijing are prepared to embrace capitalism when it appears to be in their interests. These are pieces of information which we need to build into our own store of knowledge so that we are not blown off course by any unexpected development. The students said that there may be demonstrations in the streets of Hong Kong concerning voting. We shall need strong nerves to support our Foreign Secretary and the Governor if and when that situation comes about.

All the people I know who are involved with education in Hong Kong are absolutely committed to help the people there. My main signal to the students today was to say that all the trustees with whom I am concerned and who are interested in finding scholarship people in Hong Kong want it to be made quite clear that they intend to continue visiting Hong Kong while there is strength in their bodies, and long after 1997. There is no question that any of the people of that kind—any more than, I imagine, industrialists, commercial people and bankers—want to pull out from supporting this wonderful group of people.

7.20 p.m.

Lord Glenarthur

My Lords, of the issues of burning concern in Hong Kong at the moment, I should like to refer to two; the Vietnamese boat people and, almost as briefly, the process of democratisation.

On the former, the current reduced rate of new arrivals, compared with the scale we saw last summer, should not lull us into a false sense of security. As my noble friend Lord Eden of Winton said, the sailing season will shortly be upon us again. The prospect of a further dramatic influx is all too real. I know from bitter experience how such an influx is likely to test, possibly even more dramatically than last year, the ability of Hong Kong to cope, and at the same time to strain further the patience of people in the territory. Whatever the facilities that might be developed to handle continued arrivals, not to take steps to discourage the continuation or the prospect of a further influx is unsupportable. I very much agree with the noble Lord, Lord Bonham-Carter, that the issue is one of international significance.

Voluntary repatriation is only one element in bringing this sad story to a satisfactory conclusion. Moreover, I doubt that its pace could ever be adequate. Beyond that I say only that I should like to examine in detail what has been achieved today at Geneva, glad as I am that agreement has been reached. We all share humanitarian concern for the boat people, but such concern is at least tempered when set against the true reasons for about 90 per cent. of them leaving. I sincerely hope that if there is to be a six-month moratorium on forcible repatriation, it will not lead to a new and damaging influx. I am bound to say that there is a real risk that it might.

I should like to turn now to constitutional reform. For some time the wish of Hong Kong was indistinct on how representative government should develop. There was no clear view about how the proportion and totals of elected and other representatives to compose LEGCO should be made. The Government argued, and it is understandable that they should still argue, that due regard must be given not only to any emerging consensus, but also to the likely impact of any decision upon China and what that impact might mean for the continuity of approach up to 1997 and beyond.

I do not think that we or the Chinese authorities can pretend that the ambiance within which earlier consideration of this issue took place is now the same as it was before 4th June. Not only are the events of those days fresh in all our minds, but since then we have seen dramatic moves towards democracy in eastern Europe. Surely there is a moral dimension in this. It really is difficult to encourage democracy in one part of the world and adopt a more restrained approach in another. Members of LEGCO know that should the Government support their consensus view on constitutional reform, the United Kingdom's opportunity to influence matters if changes are made post 1997 will be non-existent. The force of the argument that adopting the consensus, based as it is partially on a degree of hope, is one of risk and of potentially damaging consequence is absolutely clear to me. I do not believe for one minute that it is lost on the people of Hong Kong. The greatest risk is that what we sign now could be unravelled in 1997, doing unique damage to the progressive mechanism of developing democracy and already transferred sovereignty.

From all I have heard, however, OMELCO certainly acknowledges this dilemma. It realises that we could not help in that event. So does this not introduce another moral aspect, one of respecting the risks which OMELCO itself acknowledges? The difficulty of reaching a decision on this is all too apparent. I do not go so far as the noble Lord, Lord Wyatt, in suggesting that direct elections should be complete by 1991. But after much consideration it is now my clear belief that we should take careful note of the reasoning behind the OMELCO consensus, and with its clear understanding of the risks of adopting it, endorse it as the right way forward. The issue, as the noble and gallant Lord, Lord Bramall, said, requires very careful, measured judgment. Nevertheless, the effect on confidence in Hong Kong of adopting it now will be considerable, and the prospective damage of not doing so, as the noble Lord, Lord Wyatt, said, very real. Like him I suspect that arrangements in place in 1997 will not perhaps be as easy to dislodge as some fear. The balance of argument, I suggest, has tipped measurably in favour of adopting the LEGCO consensus.

7.26 p.m.

Baroness Seear

My Lords, some while ago it was agreed that not every speaker would congratulate a maiden speaker on his speech. However, I intend to continue to break the rules, for the speech of the noble Lord, Lord Sharp of Grimsdyke, was so exceptionally brilliant and so extraordinarily relevant and valuable in today's debate that one can congratulate him on his contribution, not just as a matter of courtesy but with the greatest sincerity.

As one would have expected, at the beginning of the debate my noble friend Lord Bonham-Carter, divided the subject into two parts. He dealt with the question of refugees and then with the future of Hong Kong. In dealing with the refugees, he drew on the welcome news which we heard today, though only on television —we have not had it officially confirmed—that there has been a United Nations agreement to a six months' moratorium on compulsory repatriation. This will give a chance for the voluntary scheme, apparently, as the noble Lord, Lord Ennals, indicated, inadequately advertised in the past and inadequately understood by the people concerned, to succeed.

My noble friend also stressed strongly that the reason why so many people who do not pretend to be political refugees want to escape from Vietnam is the stark poverty of that country. Therefore, if we want to avoid a continuation of attempted emigration from Vietnam, it is essential, whatever we may think about the government there and whatever we may have felt about them in the past, that we should get together internationally to do something to relieve poverty there. That would be in the interests of the people of Vietnam and also very much in our interests and in the interests also of the people of Hong Kong. That was my noble friend's message on that aspect of the subject.

My noble friend said that democratisation in Hong Kong should be speeded up. He referred also to the important question of right of abode in this country and attitudes towards the Government's proposals. My noble friend said today, as he and honourable friends in another place have repeatedly said, that this is essentially a matter to be tackled on an international basis. Surely it is time to make yet another attempt to get our colleagues in the European Community, in the Commonwealth and in the United States to share the problem of giving assurance to the people of Hong Kong. It is very much in our interests and in their interests so to do because what everybody must want and what China must want is that people should stay in Hong Kong and not come here.

I know that what I am about to say has been said before, but it must be underlined. It would be better if it is known by the Chinese that there is somewhere where the passport holders of Hong Kong can go—be it Canada or Australia, it does not matter where it is. We are perhaps a little apt to forget, although we have been told this, that not all the world regards the United Kingdom as the most desirable haven in the world. Indeed, we were told by the noble Lord Lord Butterfield, that the young are rather more interested in going to the wide open spaces of Canada where the monetary opportunities can be found. If Canada can be encouraged to take them, good luck to them. It would ease the problem.

As regards the bargaining of the Hong Kong people with China, not only before 1997 but also thereafter, surely the knowledge that they have somewhere to go will strengthen their bargaining hand. That is the issue. However, if China knows that they have nowhere to go and they have no rights of abode, then the Chinese authorities can grind the people into the ground in any negotiations which take place. But if the people of Hong Kong can say, "If you push us that far we shall go off', China will surely wish to maintain these moneyspinners who, as the noble Lord, Lord Bonham-Carter, made clear, contribute such a remarkable amount to the economy of that part of the world.

Once again, we beg the Government not to be frightened about numbers and to give guarantees on an international basis that will make it possible for the people of Hong Kong to put up an effective defence in arguing with the people of China.

I have recapitulated briefly what my noble friend Lord Bonham-Carter said. I did so because I assumed, as I had the task of winding up the debate, that my job would be to reply to the people who opposed the point of view put forward and the issues raised by my noble friend. However, my difficulty is that no one has opposed them. Of course I should say that I noticed there is a total absence of speakers on the Labour Back-Benches. Indeed, the only speaker in today's debate from those Benches will be the noble Lord, Lord Cledwyn.

Noble Lords

Lord Ennals has spoken!

Baroness Seear

My Lords, I actually referred to the Back-Benches. I hope that the noble Lord, Lord Cledwyn, will reassure us that in the general drift of the arguments which have been put forward today, on which there has been such unusual unanimity throughout the House, we should read no significance into the fact that there are no Labour Back-Bench speakers. I hope that he will also confirm that we can be reassured that the Labour Party—the official Opposition—supports the main arguments which have been so powerfully voiced and so strongly supported in your Lordships' House today.

It remains only for me to address the noble Lord, Lord Trefgarne—that indefatigable warhorse on the Front Bench. We know that he cannot give us straight answers to these questions today; but the feeling of the House must be plain to him. Can he not say that the Government will at least look at the issue of increased aid to the people of Vietnam? Can he say whether they will respect and perhaps even attempt to extend the period for voluntary repatriation and that they will do a great deal more to ensure that the people concerned know what are the opportunities and conditions? Can he also confirm that the Government will cease to be so frightened about giving rights of abode in this country?

I find it very difficult to understand why this capitalist Conservative Government is so frightened of letting the people of Hong Kong into this country. Indeed, such people seem to me to be the archetypal marketeers and the best source of prospective yuppies, so beloved to the Tory Front Bench, that they could possibly find. Therefore, the idea that such people would be a burden on the country is hard to accept. I would lay a wager that for every person from Hong Kong who comes into this country, there will be two new small businesses within two years of his arrival.

Will the noble Lord please say that the Government are open-minded in this matter, and that they are prepared to change their attitude from the miserable, guarded and nervous attitude which they have adopted up until now?

7.34 p.m.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Lord, Lord Bonham-Carter, for enabling us to have this debate today, and for his thoughtful and stimulating opening speech. As usual, we have heard a number of expert speeches on the subject. I join noble Lords who congratulated the noble Lord, Lord Sharp, on his maiden speech. He made an admirable and witty speech and spoke with great knowledge, experience and wisdom. We look forward to hearing many speeches from him in the future.

The noble Lord, Lord Sharp, referred to the Foreign Secretary's Statement following his visit to Hong Kong. I shall refer to the main points contained in Mr. Hurd's report. However, before I mention those, I must acknowledge the fact that Mr. Hurd had a very difficult task to perform in an atmosphere of apprehension and uncertainty. He conducted himself with dignity and sincerity. I feel that I must say this even if I do not agree with every detail of government policy. The difficulties facing the Government are complex. I am conscious that they would not be less so if they had to be tackled by a Labour Government. I hope that that remark satisfies the noble Baroness, Lady Seear.

When the House debated the joint declaration in 1985, we did so in a reasonably relaxed atmosphere, as noble Lords will recall, because we had some confidence that after 1997 Hong Kong as a special administrative region would continue to enjoy essential rights and, a high degree of autonomy as well as executive, legislative and independent judicial power including that of final adjudication". These and other constitutional details are included in the Basic Law which is still under discussion. The tragedy, as many noble Lords have pointed out in their speeches, is that the events in Tiananmen Square shook the confidence of the Hong Kong community and that of the rest of the world. As the noble Lord, Lord Bonham-Carter, made plain, it is against that background that this debate is being held.

The Basic Law now under discussion is crucial. It is the Basic Law which will decide the future of Hong Kong. The proposals of OMELCO on the Basic Law appear to me to be reasonable. In last Wednesday's Statement, the Foreign Secretary said that the joint declaration must be made to work. He said: An important element in that is the extent and pace of movement to democracy in Hong Kong before and after 1997".—[Official Report, 17/1/90; col. 681.] We agree with that. But, at that point, Mr. Hurd was not able to go into detail. He said that he would announce a decision within the next few weeks. Moreover, when the Prime Minister spoke to Dame Lydia Dunn yesterday she repeated that assurance. We hope that there will be a constructive outcome and that OMELCO's proposals for the evolution of the Legislative Council can form the basis of the development of a democratic structure in Hong Kong.

The acceptance of the OMELCO formula would give great confidence to the Hong Kong community, especially the financial and business community. OMELCO's recommendation is a modest one because there is a case for all members to be elected by 1995.

The point to note here is that this is well within the provisions and the spirit of the joint declaration. After all, autonomy means home rule, and home rule—that is, except foreign affairs and defence—can operate through the agency of a directly elected legislative council which will in turn help to sustain the outstanding Hong Kong economy which is and which will continue to be so important to China. That point was made by the noble Lord, Lord Diamond, in his speech. We must continue to negotiate with the Chinese Government, but I see no good reason why that government should not accept this, as Mr. Deng himself envisaged two systems of government operating in one country. What is to be the difference between the two systems of government? Further, what difference did Mr. Deng envisage when he made that statement? He must have had in mind the difference which results from the fact that Hong Kong has been a British territory for a long period, and that therefore the influences of Britain in terms of democracy would be felt in Hong Kong.

We shall await the Foreign Secretary's Statement on democratisation with interest. Perhaps I may assume that he will make it before Easter, which would be helpful. The House will recall that last July Sir Geoffrey Howe said that a Bill of Rights listing the rights and freedoms of the people of Hong Kong would be passed. Can the Minister indicate what progress is being made on that, although I understand that it is primarily a matter for the Hong Kong Government and not for the United Kingdom.

The noble Lord, Lord Bonham-Carter, and other noble Lords dealt with the problem of the Vietnamese boat people. As I have no time to go into detail, I shall merely say that that is an almost intractable problem, and I fully agree with the noble Lord, Lord Bonham-Carter, that it cannot be satisfactorily resolved without international understanding and co-operation.

The United States Government have far more responsibility for the state of affairs in Vietnam than the British Government, but Britain is left to find the answer to that awful dilemma.

We have all read the report prepared by my noble friend Lord Ennals and Mr. Timothy Raison. We listened to my noble friend's constructive speech with great interest. The report makes important recommendations. I hope that the Minister will be able to give the Government's response to them when he winds up.

As the steering committee is sitting in Geneva at present, perhaps the Minister can give us the latest information. We are delighted that progress has been made, and, like the noble Lord, Lord Glenarthur, I welcome the agreement on a six month moratorium on forcible repatriation.

The main purpose of the Foreign Secretary's visit to Hong Kong was to explain and to hear the community's reactions to his nationality proposals which he had announced here on 20th December. He then said that everyone he met had said that they hoped the proposals would have made provision for more people but welcomed them because they would keep more people in Hong Kong. The Foreign Secretary had a difficult decision to make. We also know that whatever solution he produced, it would have been open to criticism from some quarter or another. So it has turned out, with Mr. Norman Tebbit especially on his high horse. But the Government's proposed scheme deserves careful consideration. It has some flaws which must be scrutinised carefully when we come in due course to debate the Bill. For example, a points system will be difficult to operate, as we know from long experience. We shall need to go into that system in great detail. A fair system which does not discriminate in favour of the "top bracket" is essential. It seems to me to be our duty to help to achieve that. Like the noble Lord, Lord Bonham-Carter, I hope that it will lead to a greater response and readiness from other countries which have far more space than this country. The noble Baroness, Lady Seear, mentioned Australia, Canada and the United States. Given time, and patient discussion and negotiation, I have some faith that there will be a response from our friends in the Commonwealth and other countries.

We should not forget that there are others whom we must accept, such as stateless persons, war widows (few in number now) and Crown servants under the British Nationality Act 1981, as well as people who would clearly be at risk if they could not leave; but we shall come to those matters again in due course.

Like the noble Lords, Lord Derwent and Lord Butterfield, I should like to pay a tribute to Sir David Wilson, the governor of Hong Kong, for the wise and calm manner in which he has conducted his duties over the past few difficult months. Criticisms of him were not helpful to Hong Kong's future. His recent visit to Peking was not easy. No doubt he had to argue for democratic advance against those who are afraid of it. Things will change over the next few years. I listened carefully to the noble and gallant Lord, Lord Bramall, and his proper warning, from his long experience, against over-optimism. We should heed his warnings carefully.

A warm tribute is due to OMELCO; and, as I have said before in these debates, we should all heed its views carefully. In close agreement with OMELCO and the Government of Hong Kong, the Government here must talk, persuade and seek international support for their arguments. I hope that the Government of Japan, whose influence in Peking is significant, is being kept informed. They more than most will appreciate the importance of Hong Kong to mainland China.

Much can be achieved in seven years, as we in Europe know only too well, and if we proceed with patience, determination and a commitment to a just and fair settlement, I believe that we can succeed.

7.45 p.m.

The Minister of State, Department of Trade and Industry (Lord Trefgarne)

My Lords, I join with all those who have paid tribute to the noble Lord, Lord Bonham-Carter, for providing this further opportunity to debate Hong Kong at a time when the affairs of the territory are at the forefront of our minds. This evening's debate has once again demonstrated the detailed knowledge and experience which your Lordships bring to bear on matters affecting Hong Kong. I shall try in the time remaining, or perhaps a little less, to answer as many of the specific points as I can.

I must start by reiterating the tributes that have been paid to my noble friend Lord Sharp on his maiden speech. He was, as has been said, drawing upon a great depth of experience and authority on matters concerning Hong Kong and his speech will have greatly assisted your Lordships.

Today's debate has set out clearly the central issues of concern to Hong Kong, which include the continuing and fundamental importance of the 1984 Sino-British joint declaration and the need to maintain a dialogue with China in order to turn the joint declaration into a reality; the need for Britain to do all it can to reassure the people of Hong Kong that its commitment to their future remains undiminished, and in particular to control the outflow of talented and enterprising people from the territory; the need to build up a democratic system in Hong Kong in the remaining years of British administration which will develop up to and beyond 1997; and finally, the need to deter a further influx of Vietnamese boat people into Hong Kong this year.

Our fundamental objective is to build a secure future for Hong Kong. We continue to believe that the joint declaration provides the best framework to achieve that objective. No one has been able to suggest a better alternative.

Unlike other British colonies, Hong Kong has never had the prospect of independence. Under international agreements whose validity we have never disputed, 92 per cent. of its territory would revert to China on 1st July 1997. The remaining 8 per cent. could never have been viable on its own. Those are the realities of history and geography that cannot simply be ignored. We negotiated long and hard with China to ensure that Hong Kong reverts to China on the best possible terms.

What Britain achieved in the Sino-British joint declaration was agreement on specific arrangements for Hong Kong's future which would preserve its basic freedoms and way of life for at least 50 years after 1997. Our task now is to ensure that the safeguards in the joint declaration remain real and credible and that the undertakings given in that agreement are honoured. The Chinese leadership has repeatedly confirmed its commitment to the joint declaration and to the concept of one country, two systems. That is something we welcome.

The destiny of Hong Kong is inevitably bound up with the destiny of China. Any viable future for Hong Kong must depend upon successful and secure co-existence with China. That objective is enshrined in the joint declaration.

The firmest guarantee of any agreement is that it is based on common interest. China has a massive interest in Hong Kong's continuing success. Hong Kong provides one-third of its foreign exchange earnings and two-thirds, no less, of its foreign investment. It is China's largest trading partner and its gateway to the whole international system. That huge stake has not been diminished by recent events in China.

Our relations with China are undoubtedly going through a difficult period. It is right that we should seek to rebuild them. There must be a continuous dialogue with the Chinese Government about all aspects of Hong Kong's future.

It is in no one's interests, least of all Hong Kong's, for differences to be aired publicly or, as my noble friend Lord Carrington once said, for our relations to be conducted through megaphone diplomacy. That is why we are keen to return to rational discussion through private exchanges. The fact is that there are many issues related to our joint responsibility for Hong Kong which must be discussed. That is why we have been seeking to maintain a dialogue at various levels through the work of the Sino-British joint liaison group and through the recent visits to Peking by Sir Percy Cradock and the Governor of Hong Kong.

As my right honourable friend the Foreign Secretary made clear during his recent visit to the territory, there is no question of the Government simply sitting back and letting the clock tick on towards 1997. As we have already demonstrated by the announcement of our citizenship scheme, we have not flinched from taking difficult decisions when these are necessary.

Over 40,000 people emigrated from Hong Kong last year, many of them key professional and business people. This year the figure is expected to be at least 55,000. Continued emigration on this scale would threaten the competitiveness of Hong Kong's economy and the efficiency of its public service. Without the package of measures which we are offering, more people would make up their minds to emigrate. That is something we must try to prevent, not only because we have a duty to Hong Kong but also because if confidence in the territory collapsed completely we could then be faced with a much more serious problem.

We hope that other countries will now follow our lead in offering similar assurances to Hong Kong. Of course Hong Kong is a British responsibility. But it is also an international financing and trading centre and its major trading partners have a strong interest in its continuing stability and prosperity. Some countries have already found ways to give Hong Kong people assurances without their having to leave the territory. This is welcome. We have been taking every opportunity to encourage others to take comparable measures and we shall continue to do so.

Hong Kong is rightly taking a positive view of its own future. An example of this is its plans for a £10 billion airport and port project. This is a major undertaking by any standards and one of the largest projects of its kind in the world. I should like to add that Britain supports these projects because of the positive contribution which they will make to the economy and that our companies are actively engaged in their pursuit. There is an opportunity here for Britain to work with Hong Kong to help it achieve the prosperous future which its energies deserve.

So we and the Hong Kong Government are doing all we can to build up confidence in the future of Hong Kong. But we do not pretend that it is the whole answer. China also has an essential part to play in helping to shape that future. The drafting of the Basic Law has now reached a crucial phase. The outcome of that process is a matter of major concern to the British Government. It will be a Chinese law. But as co-signatories of the joint declaration, we have a responsibility to ensure as far as we can that the Basic Law fully reflects the joint declaration. We have therefore been following the Basic Law drafting process very closely, including the recent meetings in Canton, and will continue to take every opportunity to underline to the Chinese the importance of a Basic Law which commands widespread support in Hong Kong.

A key section of the Basic Law is the chapter on the future political structure, and this is the focus of intense debate. Discussion of the Basic Law and the provisions for constitutional development after 1997 have also stimulated interest in the pace of democratisation before 1997, which is a matter for decision by the British and Hong Kong governments.

Your Lordships have rightly drawn attention to the strength of feeling in Hong Kong on the subject of democratisation in the territory. A substantially larger number of directly elected seats will be introduced in the elections to the Legislative Council in 1991 than was hitherto envisaged. Our aim will be to ensure that the system we introduce before 1997 is durable and capable of further development after that time.

The best outcome would be one which reconciles the wishes of Hong Kong people for a substantial step forward in 1991 with the continuation and further strengthening of democracy after 1997. We are seeking to reconcile these two because that is clearly the best way. But if the best way is not attainable we shall have to take our own decisions in the best interests of Hong Kong. My right honourable friend the Foreign Secretary has already made clear that the Government will be announcing their intentions very shortly.

The debate has also focused on one of the other immediate concerns of Hong Kong —the heavy burden on the territory of the Vietnamese boat people. Here again, the Government have not flinched from the need to take difficult decisions. In December we authorised the Hong Kong Government to proceed with the mandatory repatriation of 51 Vietnamese boat people. This was not something which we relished. But the plain fact is that Hong Kong cannot be expected to cope indefinitely with an endless stream of migrants from Vietnam, most of whom have no prospect of ever finding a new home. It is therefore imperative that we find effective ways of ending this futile exodus.

I should like now to pay tribute to the noble Lord, Lord Ennals, and my right honourable friend Mr. Raison for the determination and dedication they showed in undertaking their arduous mission to Vietnam and for their thorough and comprehensive report. I am pleased to say that their report has been placed in the Library of the House. We are naturally glad that the noble Lord, and my right honourable friend were able to confirm that there is no evidence that the 51 people have been ill-treated since their return to Vietnam.

It is also clear from their report that the message has not yet got across in Vietnam that no country is willing to take those boat people who are found not to be genuine refugees. In this regard, we welcome the report's recommendation for a campaign of education. We shall be studying this and other recommendations in the report very carefully with a view to implementing them as quickly as possible.

Perhaps I may turn now to some of the specific points that have been raised. First, regarding the outcome of the Geneva meeting, I am sorry to say that the statements about that outcome which were made by the noble Lord, Lord Bonham-Carter —I am sure in the best of faith and in accordance with some press reports that have been received —were both premature and over-optimistic. When he spoke, the conference was still in session. I understand that it has now finished and has failed to reach a consensus.

The United States and Vietnam are still standing out against the consensus. We very much regret that, but we understand that the United Nations High Commissioner for Refugees now intends, at the request of the committee, personally to carry out a round of urgent consultation. We hope that the United States and Vietnam will subsequently decide not to block what would otherwise be a full consensus.

The noble Lord, Lord Bonham-Carter, also suggested that there might be an international conference on the right of abode. We have already been doing everything possible in multilateral fora and bilateral contacts to rally international support for Hong Kong. My right honourable friend the Prime Minister raised the matter at the Kuala Lumpur Commonwealth Conference and at the Madrid European Council.

We have taken every suitable opportunity to press our friends and partners to follow our lead in announcing a package of assurances to give people the confidence to remain in the territory. We are certain that this is the best approach and the one most likely to achieve the desired results.

The noble Lord was concerned too about China's attitude to Hong Kong. There is, I must emphasise, no question of appeasing China. We negotiate firmly and tenaciously in the best interests of Hong Kong. Of course, if that does not involve immediate rejection by China, that is an added bonus. But in order to achieve the best results it is essential that we keep our channels open. That was the purpose of Sir Percy Cradock's visit which took place, contrary to some views expressed, with the full knowledge of the Foreign Office and in full accord with the Madrid declaration. That declaration did not in any way prevent contact by senior officials, of whom Sir Percy is one. Indeed, Sir Percy, having served as ambassador in Peking in years past, was a good man to undertake that mission. I can think of none better.

The noble Lord, Lord Bonham-Carter, and the noble Baroness, Lady Seear, spoke about the need to end the aid embargo to Vietnam. It is of course desirable that conditions in Vietnam should improve so that its people are happy to stay there. That will require sensible economic policies on the part of the Vietnamese authorities. It is equally clear that international aid will have an important role to play. We are already giving financial assistance to help those being reintegrated back into Vietnam, but in order to qualify for full programme aid Vietnam must demonstrate that it is a responsible member of the international community. It must, for example, be ready to fulfil its responsibilities to its own people by agreeing to take back those screened out as non-refugees who have no future other than in their own country.

My noble friend Lord Willoughby felt that the Hong Kong people had not been properly consulted about the 1984 agreement. However, the Hong Kong people were given an opportunity to express their views on the draft joint declaration. A thorough survey was carried out with independent monitors and it was the clear view of the great majority of Hong Kong people that the agreement was the best that could have been achieved at that time.

The noble and gallant Lord, Lord Bramall, suggested that China had ruled out beneficiaries of our scheme for jobs after 1997. The Chinese have said that a small number of top posts will be reserved for Chinese nationals after 1997. I believe they are thinking of a number around 50. That is tiny compared with the 50,000 beneficiaries of the scheme that we have announced.

As many of your Lordships have pointed out this afternoon, confidence in Hong Kong is still at a low ebb. It cannot be rebuilt overnight. We do not underestimate the difficulties involved, but I can give a firm assurance that Britain will defend and promote Hong Kong's interests in any way we can. I do not imagine that we alone can lay the fears of Hong Kong wholly to rest, but Hong Kong and its people have the assurance of our good will, our support and our unstinting effort on their behalf. We are determined to do all we can to ensure that the final chapter in our long administration of Hong Kong is an honourable one and that our last substantial colony passes successfully through the remaining eight years of British rule.

8.2 p.m.

Lord Bonham-Carter

My Lords, I shall not keep your Lordships long following a constructive debate which, broadly speaking, has revealed a like-minded approach among your Lordships to the problems confronting Hong Kong. I wish to thank all those noble Lords who have participated in the debate. I wish to say in particular how much I enjoyed and how much I learnt from the speech of the noble Lord, Lord Ennals, based on his experience in Vietnam. I found it a great pleasure for once in a while to be speaking in agreement with the noble Lord, Lord Wyatt of Weeford. That is an event which does not occur every day of the week.

The general view, it seems to me, has been one of encouragement to the Government to practise firmness and flexibility in their policies towards Hong Kong and to do everything they can to build up confidence there. There are only three points on which I disagree with what the noble Lord, Lord Trefgarne, said. On the question of a conference on the right of abode for British citizens in Hong Kong, I am not surprised that in the past there has not been much response to overtures from the Government to our friends. I do not think we can expect a response until we put our money on the table. Having put our money on the table, we shall be in a much better position to ask others to join us in that endeavour.

I am deeply sorry at the news that the United Nations conference on refugees has ended without agreement. One can only hope that the efforts to reach agreement involving the United States and Vietnam and the other parties will prove successful. Finally, I was rather disappointed by the noble Lord's response to the proposal, which was generally supported, that the aid ban to Vietnam should be discontinued. He naturally said that to send money to Vietnam until one knew that money was being used in a proper way and until one knew that the government was one for which one could have respect was a dubious policy. However, I can only say that I would prefer to send money to such a government than to send back men. We are prepared to do the latter but I think we should also do the former. This has been, I hope, a useful and timely debate. I shall not keep your Lordships any longer. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.