HL Deb 16 July 1990 vol 521 cc714-32

House again in Committee on Clause 1.

On Question, Whether Clause 1 shall stand part of the Bill?

Lord Derwent

I agreed with the Minister that since this clause deals with authorising a scheme to be set up in accordance with Schedule 1, this is an appropriate moment to express one's views on some of the detailed provisions of the draft scheme which the Government have circulated and which will in course be laid before your Lordships if this Bill is passed.

As I mentioned at Second Reading, the point which worries some of us concerned with business in Hong Kong—and I declare my interest—is the definition of the provision that points should be awarded to those working for British firms. First, I should make it absolutely clear that I am strongly in favour of giving points to those individuals who have personal British links. Indeed, I imagine that all Members of the Committee would agree with this, and I even feel that perhaps more points should be awarded under this head than is at present envisaged.

Secondly, it seems to me obvious that Britain should look to further its own commercial self-interest; and I have no difficulty at all with the proposition that those who may further Anglo-Hong Kong business relations should be favoured.

But it does not follow at all that it is in the British commercial interest to favour those firms which happen to be registered in Britain over those who are registered in Hong Kong itself. The important point is to get at those individuals and firms who are actually helping Anglo-Hong Kong business.

Perhaps I may give two examples. Both electricity generating companies in Hong Kong, Hong Kong Electric. and China Light and Power, which is controlled by the noble Lord, Lord Kadoorie, are buyers of British generating machinery. They employ engineers and others who are familiar with British equipment and are good clients of British companies. It must be in the British interest that these individuals should remain with their companies and in Hong Kong. However, those employees do not work for English based companies. Furthermore, they are likely to be less favourably inclined to continue to buy British if they feel that they have been discriminated against in the award of points.

Another example is presented by the two note-issuing banks, the Hongkong and Shanghai Banking Corporation and the Standard Chartered Bank—the first registered in Hong Kong and the second in London. Is it seriously suggested that it is in Britain's commercial interests to discriminate against the Hongkong and Shanghai Banking Corporation which is intimately involved in probably the bulk of Anglo-Hong Kong trade?

There is also a serious political point. The Government have been at pains to stress that Hong Kong is until 1997 in all senses British. Only the right of abode has been in question. If we now claim that "Hong Kong firms" are not "British firms" this will be taken as showing that we no longer regard Hong Kong is British in any true sense.

This is a matter which has been considered in depth in the past. Members of the Committee may recall that in 1981 the Hong Kong and Shanghai Bank made a bid to acquire the Royal Bank of Scotland. The question arose as to whether the Hongkong and Shanghai Banking Corporation incorporated in Hong Kong was a British or a foreign bank. The Lord Privy Seal, speaking in another place for the Government stated: It is a misapprehension held by some people, regrettably, that the HongkongBank Group is a foreign bank. It is not a foreign bank. It is a bank that is incorporated in a British Dependent Territory and it is subject to the rules of that territory".—[Official Report, Commons, 18/11/81; col. 275.] The Monopolies Commission took the same view. Page 90 of its report states: Certainly there is no question of our regarding the Hong Kong Bank as a 'foreign' bank". I therefore suggest to the Committee—and I am indebted to the noble Lord, Lord MacLehose, for the suggestion—that the definition of a British firm for the purposes of awarding points should be "any firm which is incorporated in the UK or in any of its dependent territories", which includes Hong Kong. In order not to cast the net too wide I would add the provision that the firm must engage in substantial business between Hong Kong and the United Kingdom.

My suggested formula would be fair, clear and easy to administer. Clarity is important. Vague concepts such as "British managed" are impossible to define and will be considered deeply suspect. The formula would achieve also the primary objective of favouring firms involved in business with the UK over firms incorporated in, say, France or Germany or Japan or the United States, and it would help those Hong Kong firms which are major clients of this country.

I very much hope that this is a matter to which the Government and the Governor will give careful thought when they come to draft the scheme in its final form.

Lord MacLehose of Beoch

I very much support what the noble Lord, Lord Derwent, said. I support the concept of giving points as set out in paragraph 14 of the draft scheme—a copy of which has been placed in the Library—for connections with the UK through, as stated in the draft, investment, relatives, residents, education and so on. However, the inclusion of the phrase "service with British firms" causes a great many unintended problems, and I believe that further thought should be given to that matter. It would discriminate in the most bizarre way between firms which are all British but which happen to be domiciled in different parts of British territory.

Many firms, large and small, which are pillars of Hong Kong, do great good for British business interests but happen to be domiciled either in the United Kingdom, Hong Kong or other British territory such as Bermuda. To discriminate between them at this juncture, even in this small way, would be most unfortunate. It might undo some of the good which has undoubtedly been done by the publication of the Bill.

Perhaps something can be done by tighter drafting to give a lift to British firms, whether domiciled in the United Kingdom, Hong Kong or other British territory, and which conduct substantial business between Hong Kong and the United Kingdom. If that could be done in a way which was simple to administer, then I would support it. If it is to be complicated, it is only a small part of the scheme and I suggest that it would be better to drop it.

Earl Ferrers

I am grateful to my noble friend Lord Derwent for restraining himself from speaking to Clause 1 stand part before dinner and for making his contribution now. I am also grateful to him for drawing this point to the attention of the Committee. It is an important point and Members of the Committee who are well versed in company matters and familiar with the intricacies of company structure will not be surprised to learn that the Government are finding it somewhat difficult to establish a definition of what should constitute a British firm for the purposes of the Bill. A number of different suggestions have been put forward and the range of firms likely to be included varies one from another.

We are seeking to find a definition which will include firms which have a real claim to be regarded as British, while excluding the rest. There would be no point in a definition which was so broad that a higher proportion of applicants qualified for the extra points; the intended advantage would be cancelled out. It is plain that any criteria would have to be clear, readily verifiable and would not result in an administrative burden which would slow down the whole process of selection under the scheme.

That response may not be very satisfactory to my noble friend, nor indeed to the noble Lord, Lord MacLehose, who is deeply concerned about this matter. We are continuing to consider the possibilities and will bear in mind the suggestions made by the Committee this evening. I cannot give a strict definition tonight. We shall also reflect carefully on the implications of what has been said regarding the potentially divisive effect of awarding British links points on any basis not widely regarded as reasonable and fair. I also note the suggestion of my noble friend Lord Derwent that points for individual links with Britain should be considered.

Clause 1 agreed to.

[Amendments Nos. 8 and 9 not moved.]

8.15 p.m.

Baroness Ewart-Biggs moved Amendment No. 10: After Clause 1, insert the following new clause:

("Registration of widowed spouses . The Secretary of State shall register as a British citizen a widowed spouse of a British Citizen resident in Hong Kong who dies after the coming into force of this Act.").

The noble Baroness said: The purpose of this amendment is to protect widowed spouses of British citizens resident in Hong Kong who die after the coming into effect of the Act. I am pleased that the noble Lord, Lord Tanlaw, added his name to the amendment although he cannot be with us this evening.

There was considerable debate regarding this subject in another place, both following amendments tabled at Committee stage by the Labour Party and amendments tabled by Mr. Paul Channon at Report stage, which had all-party support. However, the response from the Minister was not very clear; it did not go far enough to satisfy the concerned group of people in Hong Kong or the organisations representing them. It is for that reason that I move this amendment—in order to persuade the Minister to state very clearly what is the position regarding this small but vulnerable group of people and to see what reassurance he can give them.

The members of the organisation called the Concerned British Expatriate Society put forward the grounds for their anxiety. They are as follows. They say that they understand that the Home Secretary indicated some provision for spouses in the event of a British citizen's death in Hong Kong, and assume that that means that those spouses will in theory be permitted to settle in Britain. However, they are not happy about the procedures which might follow.

Members of the organisation wonder what procedures will be necessary before the surviving spouses could exercise their options, and how long it would take before the arrangements were completed. They wonder what the situation would be in the case of an emergency. For example, if a British husband dies leaving a widow in Hong Kong with the children at school in Britain, would the widow have an absolute right to return immediately to Britain to be with her children and to deal with the necessary arrangements? They want to know what assurance will be given that she will not in any circumstances be denied entry in such a situation, and that she would not need to rely on the discretion of the duty immigration officer.

The members want to know whether that widow would be forced into the position of having to claim that she was a tourist in order to ensure entry, thus placing herself at risk by not having disclosed her true intentions at immigration. Those are very real concerns of British citizens in Hong Kong as to the future and what will happen to their bereaved spouses.

The members of the society are not clear whether the provision relates only to spouses who hold BDTC or BN(O) passports and hence that spouses of other nationalities may be denied even this encouragement. That point is of very real concern. When Mr. Peter Lloyd in another place gave his assurance regarding widowed spouses he said that the Home Secretary, has therefore given an assurance that applies specifically to British citizens in Hong Kong, that the widowed spouse of a British citizen who was resident in the territory at the time of his or her death will be allowed to settle here as a concession outside the immigration rules".—[Official Report, Commons, 13/6/90; col. 396.]

That goes a long way, but not quite as far as answering the anxieties put forward by the members of the society. Furthermore, Mr. Lloyd found himself in a dilemma when he was pressed by Mr. Channon in another place regarding the case of a United Kingdom citizen having a spouse who was not Hong Kong Chinese, but may be Japanese, Filipino, Thai or some other nationality. He wanted to know whether that spouse would be covered and what assurances there were for that widow. It was to that question that Mr. Peter Lloyd said, Such widowed spouses were not included in the assurance given by my right hon. and learned Friend. However, we should like to consider some of the further points that my right honourable Friend has raised".—[Col. 396.]

He did not go any nearer to clarifying that position. When asked whether the widowed spouses in question would be allowed to enter the United Kingdom for settlement or merely permitted to enter and be required later to make application for indefinite leave to remain, he said, I am trying to remember the exact terms of my right hon. and learned Friend's undertaking, but I believe it is for settlement".—[Col. 397.]

Later he said that he wanted to look again at this whole question. That, I think, is the end. We have not heard what the exact terms are, and we have not heard the result of his wanting to look again at this question. Indeed, Mr. Channon and his colleagues were not satisfied with the answer that he gave. Therefore, it is right that we should ask the noble Earl to outline in this debate his intentions about those spouses who have another nationality. As I say, these could be Japanese or Thai who may well have children in England, who have no more connection with the country of their birth and who have supported their husbands during their time in Hong Kong and who might wish to join their children in England. What would be their position?

It is true that there is an anomaly. Those who are offered passports under the scheme proposed by the Government will be able to bring their spouses and children into Britain, whereas UK citizens living in Hong Kong who have married citizens from other countries—those covered by this amendment—will not have the same rights.

Therefore, I hope that the Minister will be able to give a clear answer. We believe that our amendment will remove the anomaly and the worries that I have described and will bring parity. I hope that the Minister will look at the amendment seriously and will give an explanation which will satisfy that small but vulnerable group of people in Hong Kong.

Earl Ferrers

The whole basis of the British Nationality Act 1981 is that the acquisition of citizenship should involve a period of residence in this country. For the spouse of a British citizen that period of residence is three years. It is designed to ensure that the non-British spouse has some links with the United Kingdom, independent of marriage; and, there is, of course, no provision in the 1981 Act for widowed spouses.

The new clause proposed by the noble Baroness, Lady Ewart-Biggs, represents a fundamental departure from that position. It is essential to our proposals that existing nationality principles should continue to operate normally, except in relation to the 50,000 key personnel selected under the Bill and their immediate families. Nevertheless, I can understand that British expatriates in Hong Kong are anxious that their spouses might become stranded in Hong Kong in the event of their death.

In response to this legitimate worry my right honourable friend gave, during the Second Reading of this Bill in another place, an assurance which applies specifically to all British citizens in Hong Kong. He announced that the widowed spouse of a British citizen who was resident in the territory at the time of his or her death would be allowed to settle here as a concession under the immigration rules, as if coming here as the spouse of a living British citizen. I know that was a point of concern to the noble Baroness and I hope that reply met her approval. The concession was to apply provided that the widow or widower had remained resident in Hong Kong, had not remarried and did not have citizenship of a third country.

My right honourable friend has given further thought to the terms of that assurance. Widowed spouses having citizenship of a third country were excluded from it on the grounds that, if they found it difficult to continue living in Hong Kong, they would have somewhere else to go and would not need to seek refuge here. However, on reflection we accept the argument that, even where the spouse does have citizenship of a third country—the noble Baroness referred to Japan or Thailand—he or she might well have a genuine concern about his or her position if the British partner were to die. My right honourable friend has therefore decided to extend the assurance to widowed spouses with a third country nationality. The assurance of settlement in the United Kingdom is therefore available, provided only that the widowed spouse has not remarried and is still resident in Hong Kong. The assurance can be taken up at any time, whether before or after 1997. British citizens resident in Hong Kong need therefore feel no reason to leave the territory in order to secure their spouse's future.

The Bill has been criticised for differentiating between the spouses of the 50,000 and the spouses of other British citizens. It is perfectly true that in granting the 50,000 immediate access to British citizenship the Bill would be treating them more favourably. The justification for that is the one I set out when I gave our views on Second Reading. The Bill is an exceptional measure directed at a specific group of people who, by definition, are essential to Hong Kong but who are leaving in large numbers.

I hope that explanation will satisfy the noble Baroness and that she will feel content with the assurances given.

Baroness Ewart-Biggs

I am most grateful to the Minister. He has responded exactly to the anxieties expressed. I repeat my gratitude and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 [Procedure]:

Lord Mishcon moved Amendment No. 11: Page 2, line 17, leave out ("Governor of Hong Kong") and insert ("Secretary of State for Foreign and Commonwealth Affairs").

The noble Lord said: With the leave of the Committee, I shall speak also to Amendment No. 12, and I do so extremely briefly. The purpose of the amendment is to ensure that it is not the Governor, with due respect to him, who is in charge of the regulations, but the Secretary of State for Foreign and Commonwealth Affairs who will be answerable to Parliament. That seems to us to be right. I beg to move.

Earl Ferrers

I am left aghast at the brevity of the noble Lord, Lord Mishcon, and in admiration of it.

It is of course right that the selection scheme should be set out in an Order in Council and that this should be submitted to Parliament by the Home Secretary. It is the scheme which will set out the principles and criteria according to which applicants will be selected. By contrast, the regulations, with which we are concerned here, will deal with the practical aspects of the administration of the nationality package, specifically with procedural matters and with fees.

The approach which the Government have proposed is to make the Governor and the Secretary of State respectively responsible for regulating those aspects of the arrangements of which they will be in charge. I hope that makes sound sense.

The Bill is constructed on the principle that the responsibility for considering applications, selecting up to 50,000 key people and recommending them and their spouses and children for British citizenship, should rest upon the shoulders of the Governor. In those circumstances, it should be for him to regulate those stages of the process. The Governor has control of the administrative machinery and the necessary local knowledge. Therefore, it is he who is best placed to prescribe the most suitable procedures.

It has been suggested that the final decision on the composition of the advisory committee should rest with the Secretary of State. I do not believe that it would be either sensible or helpful to transfer the appointment of the committee to the Secretary of State. The committee's role will be purely advisory and the person who will need its advice will be the Governor of Hong Kong. It is upon his shoulders that the responsibility for operating the selection scheme will lie. In those circumstances, it must be for him to appoint to the committee those people whom he feels can best assist him in his task. What is more, only the Governor will have the necessary local knowledge to enable him to make a sensible judgment.

I do not believe that transferring to Whitehall the appointment of the committee would improve either the quality or the impartiality of the appointment process. On the contrary, I think that Hong Kong is more likely to have confidence in the committee if it is appointed locally by the Governor rather than by a Government Minister in London.

8.30 p.m.

Lord Mishcon

The Minister is so generous that he has dealt not only with amendments that I moved but with Amendment No. 13, which I have not yet moved. In order to expedite the proceedings of the Committee I say at once that it seems a great shame that the Government are recommending that Parliament be excluded from vital matters that affect the citizens of a colony that they have looked after for so many years. It is a shame that all this is being done locally in Hong Kong by the Governor without Parliament being able to deal with the regulations in any way. The Governor will make them, and that is that.

As the Minister has been kind enough to deal with Amendment No. 13, which I have not yet moved, with the leave of the Committee I shall speak to it with Amendments Nos. 11 and 12 and deal later with the moving or not moving of it. Again, this committee will have a great deal of power. I believe that the estimate of the number of applicants is about 250,000. They will come before the committee, and again the Governor is given the power not just to nominate but to appoint. No questions can be asked in Parliament about the suitability or unsuitability of the committee concerned. All that is vested in the Governor. Quite obviously, Parliament disapproves because the lights have immediately become dimmed. I point out that this diminution of parliamentary power is taking place at the wish of the Government. I hope that there will be second thoughts concerning this matter. I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 12 not moved.]

Lord Mishcon moved Amendment No. 13: Page 2, line 30, leave out ("appoint") and insert ("nominate").

The noble Lord said: I have already spoken to this amendment, as has the Minister. I hope that some of the words that I have uttered, quite apart from the miraculous intervention of providence, will enable the Minister to think again about nomination by the Governor and not appointment. I beg to move.

Lord Sharp of Grimsdyke

We spent a considerable time earlier deciding whether or not to delete "shall" and insert "may". In that respect we were talking about the allocation of powers and responsibilities between the Governor of Hong Kong and the Secretary of State. If the Government are not persuaded by the eloquent pleadings of the noble Lord, Lord Mishcon, supported in part in the contribution made by my noble friend Lord Renton, and if "shall" stands part of Clause 1, we should spend a little time discussing the machinery by which the Governor of Hong Kong is going to exercise his powers and responsibilities.

The noble Lord, Lord Howie of Troon, made a trenchant contribution about the consultants' needs and responsibilities in terms of keeping Hong Kong going. He made the point that while the Governor may be the best judge of what is in the best interests of Hong Kong, he is not necessarily the best judge of what is in the best interests of Hong Kong and Britain. In that regard I wish to make a narrow point about the composition of the committee. At Second Reading I expressed my concern about the operation of the points system. I heartily concur with my noble friend Lord Derwent in his comments. The operation of that scheme may be inimical to the interests of British industry and commerce.

I suggest to the Committee that my concern would be alleviated somewhat if the UK senior trade commissioner was appointed to the committee. He is responsible for the protection, promotion and advancement of British trade and commerce and industrial interests. He has ambassadorial status and he is an ex-Foreign Office man. He has been appointed by the Department of Trade and Industry to represent those trade, industrial and commercial interests. I urge the Secretary of State to make strong representations to the Governor of Hong Kong that, in the general interests of interpreting what is in the best interests of British companies, however defined, and other related matters the appointment of the senior trade commissioner be considered.

Earl Ferrers

I am enormously excited that the noble Lord, Lord Mishcon, should think that I spoke to Amendment No. 13 at the same time as speaking to Amendment No. 11. I try to prepare myself with a certain amount of rigidity towards the matters that I have to speak to. I also have to prepare myself for all the vicissitudes that I am likely to be subjected to by the noble Lord. I can assure him that it was not part of my intention to divest myself of all my thoughts on Amendment No. 13 when dealing with Amendment No. 11. The fact is that, had I not done so, I should be bound to tell the noble Lord that essentially the same objection applies to Amendment No. 13 as I gave to Amendment No. 11. It is that the decision should be taken locally by the Governor because he has the best knowledge of all the circumstances in Hong Kong and of local personalities.

My noble friend Lord Sharp asked whether the Governor of Hong Kong would take it on himself to include the senior trade commissioner. I must tell him that it is up to the Governor to appoint those whom he feels are most suitable to advise him on these matters. No doubt he will take note of what my noble friend has said. I cannot go further than that and give my not le friend any suggestion that the Governor will or will not follow his proposal.

Lord Mishcon

With his admirable and usual ingenuity, the Minister paraphrased what he said under Amendment No. 11 with eloquence and clarity when he dealt with Amendment No. 13. I have failed to convince him that Parliament should play some part in this matter and that there should be ministerial responsibility instead of placing it all in Hong Kong. I seem to have failed in that effort. At this time it is inappropriate to do anything other than ask leave to withdraw the amendment.

Amendment, by leave, withdrawn

Lord Mishcon moved Amendment No. 14: Page 2, line 41, at end insert: ("(5) Regulations made under this section shall be subject to approval by resolution of each House of Parliament.").

The noble Lord said: I rise with the same objective in mind that I had when moving Amendments Nos. 11 to 13. It is at least to give some residuary power to Parliament so that the regulations can be formally placed before both Houses and approved. If Parliament feels that they are not fair in any respect then at least the parliamentary voice will have been heard. I beg to move.

Earl Ferrers

The noble Lord, Lord Mishcon, was kind enough not to say that I had spoken to this amendment as well. Had he done so I should have been bound to tell him that, in response to Amendment No. 11, the Committee endorsed the Government's view that it would be inappropriate for the regulations governing the procedures in Hong Kong in relation to applications and to the selection scheme to be made by the Secretary of State. These must and will be local regulations made by the Governor. It follows from that that it would be inappropriate for the regulations to be laid before Parliament. There would be no mechanism for it. The Governor would have no locus to enable him to lay the regulations before us. While I can understand the noble Lord's desire to have parliamentary approval, this matter is the responsibility of the Governor.

Lord Mishcon

At least I have advanced in the sense that the point I made is understandable. That indeed is progress. It does not really mean that I think that the Government accept the amendment. In the circumstances, I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Clauses 4 and 5 agreed to.

Clause 6 [Short title, savings, commencement and extent]:

On Question, Whether Clause 6 shall stand part of the Bill?

Lord Mishcon

In the course of moving Amendment No. 1 I pointed out what appeared to be a contrast, to say the least—if not an inconsistency—between Clause 1 and Clause 6. Clause 1 says that the Governor recommends and the Secretary of State has to accept—the mandatory word is now in. The only exceptions to that are made by Clause 1.

Clause 6 differs from that in that it says that the Secretary of State has the right not to register any of the families recommended by the Governor if the Secretary of State takes a certain view about the applicant's character or the character of a member of the applicant's family. I shall not argue the point now, and the Committee would not expect me to do so. I merely draw attention again to what seems to me to be an inconsistency. All I ask of the Minister is that he does not forget the point that I have raised. It may well be that I shall receive a letter from him with reasons as to why I am wrong. If I happen to be right he will have an opportunity at Third Reading to put the situation right.

Earl Ferrers

I find 3it difficult to forget any points which the noble Lord makes. I shall certainly see that the point about which he is concerned is considered, as I said I would do in regard to Clause 1. I shall, if I may, take up his suggestion and write to him about it.

Lord Mishcon

I am much obliged.

Clause 6 agreed to.

8.45 p.m.

Schedule 1 [Selection Schemes]:

Lord Monkswell moved Amendment No. 15: Page 4, line 41, leave out paragraph (c).

The noble Lord said: It is interesting that at this stage of the evening's debate the amendment assumes greater importance than it would otherwise have through the Government not accepting Amendments Nos. 11 to 14. By not accepting those amendments the Government have effectively surrendered the Secretary of State's powers to the Governor, who is not answerable to Parliament in the way that the Secretary of State is. On that basis it behoves us to be very careful about the authority we devolve to the Governor.

In moving the amendment I am attempting to take away from the Governor a certain amount of discretion with regard to his determination of which persons should be recommended for British citizenship. As we heard in the first debate today on whether the word used should be "shall" or "may", the Secretary of State is by virtue of the Bill required to confer British citizenship on. whoever the Governor recommends. Given that circumstance it becomes very important for the decision of the Governor to be completely open and above board and beyond question. We have also heard that the discretion of the Governor cannot be challenged in the sense that judicial review will not be available regarding a discretionary decision.

The argument against this amendment will concern how a decision will be made between two or more applicants who have the same points total. There are three possibilities. First, the situation would not arise if the scheme were so devised that points allocated did not produce a tie. It should not be beyond the wit of man, of computers or of a committee—a committee would be the perfect instrument to do it—to devise a scheme which did not produce a tie. Another option is to provide what I would describe as random selection. In effect, one would put all the names into a hat or box and draw out the requisite number of names. The first names out of the box would achieve the result.

The worst possibility is the one with which we are faced by the Bill as it is drafted. I refer to the Governor having to make the decision on some criterion which is not written down. Such a scheme is bound to be almost by definition an arbitrary decision which is not capable of rational explanation and, what is worse, is capable of misinterpretation. Some Members of the Committee will remember that at Second Reading I raised the possibility of monetary arrangements being involved in the selection system. That would be a very unfortunate possibility for people to associate with the selection of these 50,000 heads of household. I beg to move.

Lord Glenarthur

I have listened to the noble Lord, Lord Monkswell, and I studied what he said at Second Reading. What I fail to understand is his assertion that in some way others would be better suited and better fitted than the Governor to decide between two people who might have the same number of points. To suggest that somebody over here would be more suited is the same argument as was so well answered by my noble friend Lord Ferrers with regard to the importance of the Governor knowing his own area better than anyone else.

To suggest, as the noble Lord has said again tonight, that in some way a form of bribery is even practicable in these circumstances is outrageous. What he says impinges not only on the Governor of Hong Kong but on an extremely able body of people who serve the Governor. It is a monstrous allegation. I hope that the noble Lord will think carefully before going further in that way.

Lord Mishcon

I Was not in the Chamber when the noble Lord, Lord Monkswell, spoke at Second Reading. However, I hope that I know him well enough to know that he did not wish to give offence to anyone. If he meant literally what he said I do not think that he did—I should like to dissociate the Front Bench of this party from any such suggestion.

Earl Ferrers

I am most grateful to the noble Lord, Lord Mishcon, for making that intervention. Those of us who heard the speech of the noble Lord, Lord Monkswell, on Second Reading were frankly horrified by what was suggested. Although the noble Lord has come to his rescue as best he can in saying that the noble Lord did not really mean what he said, all I can say is that to those of us who heard his speech it sounded very much as if he did mean what he said. However, if he did not mean what he said he would have been better advised not to have spoken.

I was surprised that the noble Lord, Lord Monkswell, actually returned to the subject, although in a more modest way, this evening. He referred to "monetary transactions". My noble friend Lord Glenarthur is quite right to suggest that if there is any question of bribery being insinuated in any of these considerations, it is indeed a monstrous suggestion. I hope that the noble Lord will, if I may put it this way, get that out of his system as quickly as possible.

The noble Lord suggested two changes. He moved Amendment No. 15, but I presume that he was speaking also to Amendment No. 16 as they are grouped together. His proposed changes to the Bill would affect the form of the selection scheme and would take away from the Governor, as he put it, the discretion as to who should have citizenship.

I can well understand the concern which some people may feel about the Governor having the power to choose between two equally qualified candidates. However, I believe that it is justified as an essential power of last resort. The intention is that in general the points scheme will pick out those applicants with the best claim, on the basis of the criteria to be approved by Parliament; and the special circumstances points, which will be awarded after taking into account the advice of the steering group, will help to distinguish between otherwise equally qualified candidates.

But there may, nevertheless, be circumstances when more than one candidate has secured a particular points total, and the number of places available is insufficient. In these cases, either available places must be left unfilled, or someone must choose who will fill them. In my view, it is in the best interests of Hong Kong that such places should not be wasted. Therefore, a choice should be made, and I think that the Governor, who is in the best position to take account of local circumstances, is the right person to make the choice. He will, if he wishes, be able to call upon the advice of the steering group before exercising this discretion.

The noble Lord, Lord Monkswell, is concerned about the power, in subparagraph (2), for the Governor to recommend people on the basis of their outstanding contribution to Hong Kong's economy. That Provision is directed to the key entrepreneurs section of the scheme described in the Explanatory Memorandum.

The key entrepreneurs section covers just 1 per cent. of the 50,000 places available, and is intended for those businessmen who have, over the years, built up some of Hong Kong's most successful commercial enterprises. Large numbers of people depend on them for employment, and there is no doubt that if such key businessmen left Hong Kong, their departure would damage confidence.

It therefore seems entirely fitting that a small proportion of places should be reserved for this category. Indeed, it is unthinkable that a scheme which is designed to select key people in Hong Kong should not specifically include them.

Lord Monkswell

I should like to thank all noble Lords who have spoken in the debate, some in support of my proposals and others seeking clarification. By my remarks, and the amendments tabled in my name, I do not intend to cast any aspersions upon the character or the position of the Governor of Hong Kong or members of the Civil Service. That was not my intention. However, it is to protect their good name and position that I wish to take away the discretion which may bring them into a situation where other people may think that they may be unduly influenced by money or bribery. By keeping the legislation as it is, we would be putting them in an invidious situation. I see no reason why we should do so.

Perhaps the Minister can give me some explanation as to why a lottery system is not an acceptable method of determining between a small number of applicants who may have the same number of points, as opposed to using the discretion of the Governor. I do not think he answered that point. I think that it would be useful for us to know the Government's view on the matter.

I turn now to deal with Amendment No. 16. In regard to the selection of entrepreneurs to which the noble Earl referred, I fail to see why the recommendation must be at the discretion of the Governor and why it cannot be determined by some scheme or arrangement.

Earl Ferrers

The noble Lord, Lord Monkswell, was concerned about the situation where a number of people had achieved the same number of points. He suggested that, when the Governor had to choose who should be acceptable, perhaps a lottery system could be used. Whatever system one devises, there is always the possibility that there will be more than the correct number of people who are theoretically available for acceptance to the scheme.

On Second Reading the noble Lord, Lord Mishcon, asked what would happen if there were 50,001 applicants who were acceptable. In such a situation someone has to choose. One can either use the rather disagreeable suggestion made by the noble Lord, Lord Monkswell, whereby you have a lottery and simply spin the wheel, or one can consult the person who is more likely to be the most knowledgeable on the matter—namely, the Governor—who will then be able to say, "From all those who are equally qualified I must make a decision on who is the most qualified". In the end, it comes down to a personal decision. Of course the system is not infallible and wrong decisions may be made. However, a wrong decision made in that way is more likely to be right than a decision made by way of a lottery.

Lord Monkswell

I thank the Minister for his reply. It was not terribly satisfactory. However, in the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 16 not moved.]

Schedule 1 agreed to.

Schedule 2 [Registration of Spouses and Minor Children]:

[Amendments Nos. 17 and 18 not moved.]

Lord Monkswell moved Amendment No. 19: Page 5, leave out lines 6 and 7.

The noble Lord said: Again we have a situation where there is a discretion given to the Governor to recommend whether a spouse or a child of someone who has obtained British citizenship by virtue of the scheme should or should not become a British citizen. It seems to me to be rather an unsatisfactory arrangement when, having gone through the procedures of the scheme, someone has obtained the qualifications to become a British citizen and the Governor quite arbitrarily—because there are no requirements upon him to seek guidance as to how he should reach such a decision—may or may not allow the spouse or the child to become a British citizen alongside the person who is a registered British citizen.

We come under enough criticism in this country in our immigration procedures for separating families. Therefore, to allow the possibility for such a situation to arise under the provisions of the Bill, for whatever reason—and the Governor is not given any advice as to how he should reach his decision—is quite unsatisfactory.

I shall speak also to Amendment No. 20. Effectively it is a continuation of the Governor's power to withhold British citizenship from spouses or children. I hope that the Government will accept the amendment on the basis that it must fly in the face of our human rights obligations to give the Governor of one of our colonies the power effectively to separate a family.

9 p.m.

Earl Ferrers

The noble Lord, Lord Monkswell, says that he hopes that the Government will accept the amendment because it goes against the human rights convention. I do not advise the Committee to accept the amendment for reasons which I shall give. The amendments seek to make acquisition of British citizenship by spouses and children automatic rather than conditional on a recommendation by the Governor. The amendment would require the Home Secretary to register spouses and children whether or not they wish for or had applied for it. That is undesirable. Any spouses and existing children should be given a choice.

I should make it clear that spouses and children will normally be recommended as a matter of course. The requirement for them to be recommended, however, ensures that their applications will initially be processed by the Hong Kong Government who will be in a much better position than the small team of United Kingdom officials whom we expect to establish in the territory to undertake the task of carrying out the relevant checks, ensuring that the information provided is correct and confirming whether the applicants are eligible for registration in accordance with the Bill's requirements.

The requirement for a recommendation from the Governor will also ensure that he can check whether applicants meet the good character requirements. The amendments are also inappropriate because they remove the 1997 cut-off date. Under the amendment, spouses would continue to be eligible long after the intended life of the assurance package had passed. For example, a principal beneficiary who contracted a marriage well into the next century, having remained settled in Hong Kong, would be able to transmit citizenship to the new spouse. In the Government's view, spouses acquired after 1997 should be subject to the normal rules governing the acquisition of citizenship by spouses as set out in the 1981 Act.

Lord Monkswell

On the basis that we shall not get far with the Government and the Bill, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 20 not moved.]

Lord Monkswell moved Amendment No. 21: Page 5, line 12, leave out from ("above") to end of line 14.

The noble Lord said: The amendment seeks to delete from the Bill the restriction that it appears to place on the ability of a British citizen to marry the person of his or her choice. As I understand it, the Bill provides that someone who is registered as a British citizen under the procedures of the Bill will not be permitted to marry someone unless he or she is resident and settled in Hong Kong. That flies in the face of the established situation as I understand it: that a British citizen is free to marry whomsoever he or she chooses. I am not a legal expert, but as far as I am aware the Government have not yet seen fit to restrict the ability of a British citizen to marry whomsoever he or she wishes.

The Bill appears to place such a restriction on a British citizen. If the Minister can assure me that my interpretation of the Bill is wrong, I shall be happy to withdraw the amendment. On the basis that that is my understanding, I feel that the Bill is wrong. I hope that most of the Committee thinks that it is wrong. I beg to move.

Earl Ferrers

The amendment seeks to remove the proviso under which a spouse acquired after the registration of the principal beneficiary will be eligible under the Bill only if the principal beneficiary is settled in Hong Kong at the time of the marriage.

The justification for that proviso is self-evident. The privilege of immediate British citizenship for a spouse is justified only by the Bill's objective of anchoring principal beneficiaries in the territory.

Clearly, in those cases (which we believe will be few) where the recipient of an assurance emigrates from Hong Kong, contrary to our intention in granting citizenship, it follows that there can no longer be any justification for the spouse of a subsequent marriage to be registered under the Bill. In those circumstances, it must be right that such a spouse should have to meet the normal requirements for the acquisition of British citizenship, as set out in the 1981 Act.

Lord Monkswell

I thank the Minister for his reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Remaining schedule agreed to.

House resumed: Bill reported without amendment.

Earl Ferrers

My Lords, I beg to move that this Report be now received.

Moved, That the Report be now received.—(Earl Ferrers.)

Lord Mishcon

My Lords, it would be appropriate to say a few words in regard to this Motion.

We all appreciate the courtesy with which the Minister and the noble Lord, Lord Brabazon of Tara, when he dealt with amendments, treated us during Committee stage. They fully realise, however, that courtesy is not sufficient on such a Bill. Important points have been raised at this stage. If I repeat myself, I apologise, but it is necessary. I hope that because the points are so important constitutionally and for the sake of our name in Hong Kong, the debate will be seriously considered by the Minister and his right honourable friend the Secretary of State. Perhaps they will consider them with a view to seeing that there is a completely open mind on the important matters that have been raised, and that possibly we shall receive some benefit from this stage when we reach Third Reading.

Earl Ferrers

My 3Lords, I am grateful to the noble Lord, Lord Mishcon, for making those remarks and for doing so as briefly as possible. I greatly appreciate the co-operation which he has given over the Bill. I realise that some aspects are fairly unacceptable to Her Majesty's Opposition for various reasons, yet the noble Lord has seen that the progress of the Bill has been as equable as possible.

The noble Lord, Lord Mishcon, is the first to realise that there is a problem in Hong Kong which we did not wish to happen. We had to take steps to alleviate it. Whatever steps we took would not have been acceptable to everyone. We took those steps that we thought were right and that would command the greatest acceptance not only in Hong Kong but also in this country.

As we have gone through the Committee stage today, various aspects have not found favour with the noble Lord, Lord Mishcon. He has been kind enough to express reservations but not in an offensive or unduly penetrating way. I have told him that I shall consider the matters that he raised with as open a mind as possible. He will realise that when a whole department of government has been considering matters strenuously over the past six months to try to reach the right conclusions, it is difficult to contemplate that possibly all the conclusions are wrong. Despite that, I shall keep as open a mind as I can in considering the points which I realise that the noble Lord, Lord Mishcon, and others have made seriously.

On Question, Motion agreed to: Report received.

House adjourned at eleven minutes past nine o'clock.