Lords Sitting of 29 June 1990

Preamble
The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Guildford.

Royal Assent
The Chairman of Committees (Lord Aberdare): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Property Services Agency and Crown Suppliers Act,
Greenwich Hospital Act,
Pakistan Act,
Agricultural Holdings (Amendment) Act,
Food Safety Act,
Australian Constitution (Public Record Copy) Act,
Computer Misuse Act,
National Health Service and Community Care Act,
Bromley London Borough Council (Crystal Palace) Act,
South Yorkshire Light Rail Transit Act.

Child Abuse: Care Facilities
11.7 a.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they propose to assist local authorities who need additional staff to combat child abuse.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, the Department of Health through the social services inspectorate monitors the services provided by local authorities and gives advice and assistance as appropriate. It is for local authorities to consider how to use the funds available to them in the light of local circumstances and overall legislative requirements.
Lord Molloy: My Lords, I am grateful to the noble Baroness for that Answer. Is she aware that the abuse of children is an appalling disfigurement of our present society? Is she further aware that the National Society for the Prevention of Cruelty to Children and many local authorities which monitor children at risk have found a 35 per cent. increase in child abuse? Does she recognise that they are finding difficulty in obtaining staff to look after the increased number of children at risk? Can the Government do anything to help?
Baroness Hooper: My Lords, I fully agree with the noble Lord that all cases in this category are appalling and tragic. In the department we have read the NSPCC's figures with interest. We note that they are based on12 out of 109 authorities and are collected at a different time of the year from the department's figures. The early returns to the department from about 45 authorities (for the year ending 31st March 1990) do not support the increase of the order suggested by the NSPCC figures. Any increase or indication of increase must, however, be a matter of concern. We continue with our commitment to provide a proper framework to ensure the protection of children from abuse. We shall continue to work closely with the NSPCC in the valuable work it is doing on this and many other matters.
Lord Mellish: My Lords, does the noble Baroness agree that the vast majority of social welfare workers do a first class job? They really do. They have had so much criticism lately. It has been shown in recent cases that, short of actually living in the house and stopping the man coming home drunk and beating a child almost to death, there is nothing a social welfare worker can do. Is it not about time that we put that on the record?
Baroness Hooper: My Lords, the noble Lord has put it on the record very well on behalf of us all.
Lord Peston: My Lords, the noble Baroness surely agrees that there are great difficulties with the reported figures. They could be the tip of an iceberg, although our hope is that that is not the case. The problem is that we do not know very much about the scale of this appalling form of behaviour. Is the department financing research, first, into trying to get a clear picture of the extent of child abuse; and, secondly, into factors which might eventually throw more light on the causes of this appalling aberrant behaviour?
Baroness Hooper: My Lords, we are looking closely at the situation and monitoring it in the normal way. As I have explained, we have an annual system of returns. The returns are coming to the department in the usual way. However, I point out to the noble Lord that in response to what appears to be an increasing problem the number of field social workers has increased. My figures indicate that it has increased from 24,300 in 1984 to 27,870 in 1988. The Government are making available additional training grants —£19·4 million in grants to support a £27·7 million programme in 1990–91. Since 1979–80 local authority spending on personal social services has increased by 38 per cent. in real terms. If training is the area requiring attention, it seems that we are moving forward.
Baroness Seear: My Lords, can the noble Baroness follow up the point made by her noble friend Lady Faithfull about the training together of people —the police, lawyers and social workers —who need to handle together these issues? I understand that the noble Baroness, Lady Faithfull, said the other day that social workers are not taking part in these

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training programmes. If that is so, is it not deplorable? Will the noble Baroness see to it that it does take place?
Baroness Hooper: Yes, indeed, my Lords, that is an important point. I shall draw it to the attention of my honourable friend who is responsible in the department for that area.
Lord Harris of Greenwich: My Lords, the noble Baroness indicated that she did not accept the NSPCC figures and preferred those of her own department. Can she give the figures obtained by her department? She did not tell the House what they are.
Baroness Hooper: No, my Lords, I cannot help the noble Lord. All the returns have not yet come in and therefore we do not have the final figures. I indicated that the NSPCC figures were based on 12 out of 109 authorities. Our returns are based on 45 out of 109 authorities. I am advised that there can be a great deal of variety in the returns depending on the geographical location from which they come. It is therefore rather difficult to take a meaningful average if the figures are to be averaged out.
Lord Cledwyn of Penrhos: My Lords, the apparent growth of what my noble friend referred to as aberrant behaviour and the publicity given to it has become a matter of acute concern to noble Lords throughout the House and, I believe, to the general public outside. I appreciate the personal concern of the noble Baroness and her right honourable friends. But in view of the continuance of this behaviour and the need to bring in not only the NSPCC but the police, schoolteachers and other groups, including local authorities, is there not a case now for a major inquiry into the causes and the general implications of what has become a matter of national concern?
Baroness Hooper: My Lords, I agree that this is a very difficult situation. I think that everyone concerned, whether working in the department, the voluntary sector or in local authorities, takes the matter very seriously. I gather that it is largely a question of the management of the investment of funds rather than their adequacy which is at issue. Nevertheless, as I said in a previous response, in terms of the kind of integrated approach that has been suggested, I shall draw the noble Lord's remarks to the attention of my honourable friend.
The Earl of Lauderdale: My Lords, can my noble friend say first whether the figures to which she referred apply only to England and Wales or whether they cover the whole of the United Kingdom? In the event that they do not cover Scotland, perhaps someone could write to me on the matter. Secondly, as she indicated that there are geographical variations, can she at this stage give a hint as to the areas which are, shall we say, less well-behaved in this respect?
Baroness Hooper: My Lords, I shall deal first with my noble friend's last point. My understanding is that the problem appears to be greater in inner-city
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areas. So far as concerns the overall NSPCC figures, I believe that they relate to the 109 authorities in England.
Lord Dean of Beswick: My Lords, although I go almost all of the way with the remarks made by my noble friend Lord Mellish about the dedication of social workers, is the Minister aware that there have been a number of cases where children have met their deaths in the most horrendous way and where inquiries in various forms have been set up which have reached the conclusion that the performance of some senior social workers involved in those cases left much to be desired? No action is ever really taken to redress what has taken place, and we cannot bring these children back. Although some people are found wanting in this respect, nothing happens to their careers thereafter.
Having said that, is the Minister also aware that an increasing number of people are of the opinion that the absorption of children's departments in the old local authorities into enormous social services departments has led to a deterioration in the watch which is being kept on children? Will she, therefore, look into the matter? I am convinced that some of these incidents would have been avoided if the children's departments which specialise in the care of children had been left alone to get on with the job.
Baroness Hooper: My Lords, I understand that social service is an integrated activity, even if it is not integrated with other services to the extent which has been suggested today. We follow the generic social work approach in this matter advocated by the Seebohm Report. I am inclined to agree with the noble Lord, Lord Mellish, that it is virtually impossible to have total surveillance in these cases.
The Minister of State, Home Office (Earl Ferrers): My Lords, I wonder whether I may interrupt the proceedings for a moment. I hesitate to do so, but we have spent 10 minutes on one Question. The general idea is that we spend 20 minutes on four Questions. Therefore, your Lordships may think it appropriate to move on to the next Question.
Noble Lords: Next Question!
Lord Molloy: My Lords, I thank the noble Baroness for her encouraging words which will be well received by local authorities and the National Society for the Prevention of Cruelty to Children, especially as it is said that children could now suffer from physical sexual abuse —
Noble Lords: Order!
Lord Molloy: My Lords, the situation could be worse. It seems that the noble Baroness will take—
Noble Lords: Order!
Earl Ferrers: My Lords, I do not know whether the noble Lord has concluded his Question. If he has not done so, I think that it would be best if he did.

Channel Tunnel: Safety
11.19 a.m.
Lord Tordoff Lord Tordoff asked Her Majesty's Government:
Who is responsible for commissioning the necessary advisory work on issues of safety affecting the travelling public and those staffing the transport system for the Channel tunnel.
Viscount Ullswater: My Lords, the Channel Tunnel Safety Authority is an independent Anglo-French body set up under the Treaty of Canterbury. It gives advice on all aspects of tunnel safety to the intergovernmental commission which supervises tunnel construction and operation on behalf of the two governments. It also has a duty under the treaty to ensure that safety measures and practices comply with all appropriate national and international laws.
Lord Tordoff: My Lords, is the Minister aware that as part of the build-up of safety provisions it is necessary to consider the information and communication system in the light of the psychological and human factors involved, and that that work seems so far not to have been done? There is a suspicion that that is because the two operating companies are in dispute as to which will pay for the work. Is it not time that the Government banged some heads together instead of standing back from the situation as was apparent from the Minister's Answer to my Question?
Viscount Ullswater: My Lords, under the concession agreement with the two governments, Eurotunnel is required to submit all its designs and operating rules for approval by the intergovernmental commission. The safety authority vets all aspects of safety and advises the commission.
Lord Graham of Edmonton: My Lords, the Minister began his remarks by resting on the fact that an independent authority is concerned with the tunnel. The Government and people of this country do not want to be other than deeply involved in safety matters. Does the Minister recall a Statement made by the Government earlier this year to the effect that the Health and Safety Executive had been invited to review safety procedures? How far has that review gone? How far is it intended to go? Will the Minister bear in mind that the people of this country are not just concerned with safety as the tunnel is being built, but they will be deeply interested in what the Government have in mind to ensure that once the tunnel is built, it is safe for travellers?
Viscount Ullswater: My Lords, the safety authority is composed of members from this country and France, and includes members of the Health and Safety Executive, so it has a direct input into the safety authority. That is about as far as one need go at the moment.
Lord McGregor of Durris: My Lords, is the Minister aware that the results of tests carried out
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with the approval of the safety authority have not been published; and that Eurotunnel has declined to make them public? Does the Minister agree that to secure public confidence it is desirable that the public should participate in discussions on safety, and that they can do so only on the basis of the evidence of the tests?
Viscount Ullswater: My Lords, I have already indicated to the House that Eurotunnel has to put forward all its designs to the intergovernmental commission. The safety authority published its first annual report last year, which it was not required to do by statute; and it will publish another later this year. Details of its major decisions, on non-segregation in particular, were also published. I do not believe that the safety authority can be accused of trying to hide behind any form of obscurity.
Viscount Cross: My Lords, do Her Majesty's Government consider it safe for the public to travel in the cross-Channel trains while sitting in their cars in view of the fact that in this country many hundreds of cars catch fire due to self-ignition, electrical faults, overheating and fuel leaks? That often happens when the vehicle is stationary and after the ignition has been switched off. The car could be on the cross-Channel train and the train could be in the tunnel and under the sea.
Viscount Ullswater: My Lords, at the end of 1989 the intergovernmental commission announced its decision that Eurotunnel could continue to develop its transport system on the practice of non-segregation for cars and coaches, to which my noble friend alluded. Eurotunnel will have to meet a number of stringent safety requirements on, for example, fire detection and extinction, fire-proof barriers, staffing levels and emergency procedures.
Lord Tordoff: My Lords, further to the question from my noble friend and the Minister's reply, I should like to ask this question. Is he aware that there was no suggestion that the safety authority was withholding information, but that it had passed the information to Eurotunnel which was now refusing to release it to the general public? To revert to my earlier point on the psychological and human aspects of safety design, will the Minister undertake to investigate the situation in order to discover whether work is going on, and, if so, how far it has reached and when it is likely to be completed? It is vital that that work is done in the early stages before the work on the design of trains and escape routes is finished.
Viscount Ullswater: My Lords, I shall read carefully and take careful note of what the noble Lord has said. I undertake to write to him if I discover anything. I emphasise that the intergovernmental commission is responsible for the design and operating rules; and it is right to say that it is a responsible body which is advised by the safety authority. I believe that it covers all the details on which the noble Lord has expressed concern.

Birmingham Prison: Inspector's Report
11.26 a.m.
Lord Mishcon Lord Mishcon asked Her Majesty's Government:
What they propose to do in the light of the Chief Inspector of Prisons' report that Birmingham Prison is overcrowded, insanitary and overrun with vermin and that the Prison Service is not "fulfilling its duty to look after prisoners with humanity and to help them lead useful lives".
Earl Ferrers: My Lords, my right honourable friend the Home Secretary made public on 22nd June his response to the report by the Chief Inspector of Prisons in which he indicated the action that he has taken on the recommendations for improving the conditions of the establishment, on staffing and on the regime for prisoners. Those are detailed. Copies have been placed in the Library.
Lord Mishcon: My Lords, in view of the seriousness of the position, perhaps your Lordships will permit me for one moment to mention some of the findings in the report. A large majority, both convicted and unconvicted, are held three to a cell. In such cells there was insufficient space for each inmate to have a chair, locker and table. The inmates do not have integral sanitation. They slop out. The prison was infested by cockroaches, rats, feral cats and pigeons. Is the Minister aware that, were it not for Crown immunity, the Home office would be prosecuted in regard to those conditions? Having regard to the conditions, can he tell the House why during recent months young unsentenced offenders have been transferred from Brockhill Youth Remand Centre to Birmingham?
Earl Ferrers: My Lords, I accept that the conditions to which the report referred were most unsavoury. But the noble Lord will also recall that the report said that a great deal of work had been done and the Chief Inspector of Prisons paid tribute to that work. The report also admitted that a long timescale is unavoidable. Those conditions are of course unacceptable. A great deal of work is being done. A new three-year contract for pest control is being entered into which will be for work to avoid infestation as opposed to dealing with it when it is present.
The noble Lord asked why unsentenced youth offenders had been sent to Birmingham in recent months. The answer is that we had to make maximum use of the prison estate during a period of unease in the prison system.
Lord Elton: My Lords, will my noble friend tell us a little more about what is being done to meet that admittedly unsatisfactory position in a prison which becomes particularly unpleasant in hot weather?
Earl Ferrers: My Lords, a programme of improvements is being carried out at Birmingham at a cost of £16 million. A new alarm system and new exercise yard have already been put in. There is a new entry complex building, providing new accommodation for administration and facilities for
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prison visits and reception and discharge of inmates which cost about £3·75 million. The water services have been upgraded at a cost of £4 million. A new accommodation block for 172 inmates is due for completion in May 1991 at a cost of £5·9 million. Electrical services are being upgraded. Those works are being carried out.
On top of that work is planned for a new kitchen, the demolition of the old gatehouse, the conversion of the workshop to a new laundry and the refurbishment of G wing. When the new accommodation block has been completed the inmates will be transferred to enable G wing to be refurbished and in the longer term for integral sanitation to be installed in all the remaining wings.
Lord Harris of Greenwich: My Lords, is it not absolutely clear that as long as Crown immunity continues so will degrading conditions at Birmingham and other prisons?
Earl Ferrers: My Lords, the noble Lord has come to an astonishingly incorrect view. Because there is Crown immunity he is suggesting that the Home Office and the Government will not take steps to prevent these bad situations. The noble Lord knows perfectly well that a great deal is being done within the prison system. It is our intention to make it as good as possible. In that respect a very great deal of money is being spent.
Lord Harris of Greenwich: My Lords, there is nothing particularly astonishing about the point I made concerning Crown immunity. It has been made consistently in this House. Every time we have attempted to write into a Criminal Justice Bill a provision concerning Crown immunity it has been opposed by the noble Earl's friends.
Earl Ferrers: My Lords, that is not because of the Criminal Justice Bill; it is because the principle is that the Crown is immune. The noble Lord knows perfectly well that Crown immunity does not mean that the Crown does not try to keep up correct standards.
Lord Mishcon: My Lords, in the light of these uncivilised conditions, is it not surprising that the report also says that in the year 1988–89, £0·8 million of the budget was underspent for this prison?
Earl Ferrers: My Lords, the £0·8 million underspent related entirely to administrative support and had nothing to do with buildings.
Lord Mishcon: My Lords, can the Minister say whether that money could have been transferred?
Earl Ferrers: My Lords, transferring budgets from one to another is not all that easy.
Lord Monkswell: My Lords, Crown immunity appears to be part of the cause of the problem within Birmingham Prison. Will the noble Earl make clear to the House that the responsibility rests with the Government and not with the Crown?
Earl Ferrers: My Lords, that is entirely correct.

Tobacco-Growing: EC Support
11.32 a.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether they will request the EC to withdraw its financial support for and subsidy to the European tobacco-growing industry.
The Earl of Strathmore and Kinghorne: My Lords, we have long been critical of the Community's tobacco regime. We have consistently argued that support for this crop should be reduced. In 1988 we secured the introduction of measures to reduce expenditure through the stabiliser mechanism. We shall continue to press for more effective control of expenditure in this sector.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply. Does he recall that as recently as last week I was told that the total subsidy given to the tobacco industry in Europe was over £700 million a year in value? Is he aware that many taxpayers in this country much resent their money being used to subsidise an industry which can do so much harm to health and life—all the more so because the exports are now being beamed very much to the third world? Is my noble friend aware that there is not only an economic but also a very strong moral question here on which a great many people feel very strongly?
The Earl of Strathmore and Kinghorne: My Lords, I thank my noble friend for his remarks. I think I made clear in my Answer to the earlier Question that the figure was nearer £150 million rather than £700 million.
Lord Boyd-Carpenter: My Lords, no, in total.
The Earl of Strathmore and Kinghorne: My Lords, in answer to my noble friend's other points, we are concerned about the detrimental effect on health that results from tobacco consumption. Therefore, we shall continue to press for reductions in all forms of support to remove the incentive to produce surplus tobacco, particularly the higher tar varieties, and to reduce subsidised exports by whatever route.
Lord Renton: My Lords, can my noble friend say how much of the £700 million that has been mentioned is paid by British taxpayers? Have the British Government no power under the constitution of the EC to decline to pay or to exercise any kind of veto that would modify the scheme?
The Earl of Strathmore and Kinghorne: My Lords, I do not have with me the figures mentioned by my noble friend. I shall have to write to him on that matter. As regards the second point, the fact remains that as a member of the EC we are only one voice in 12. There is no likelihood of our being able to eliminate all support for this product, which provides a major source of income and employment in the southern member states.
Lord Gallacher: My Lords, does the noble Earl recall that when a similar Question was asked and answered just over two weeks ago, I invited the noble Earl to request his right honourable friend to press for a complete review in the Community of the tobacco regime to take account of both the health and financial aspects of the regime? Furthermore, I suggested that it might be useful to employ biotechnology as part of the review to discover whether any alternative use could be found for these areas. Does the noble Earl not agree that part of the problem is that there is no alternative but to grow tobacco because of the soil and climate? Can the noble Earl tell the House whether that request has been looked at and with what result? Furthermore, does the noble Earl not agree that precipitate action of the kind mentioned in the Question may result in social payments being made to the growers which in the long term and in the aggregate would give no relief to Community taxpayers? Does he further agree that a more constructive approach is required to what is a serious problem?
The Earl of Strathmore and Kinghorne: My Lords, I think I explained a fortnight ago that because of the inherent limitations of the terrain, soil and climate in the areas concerned, no suitable and remunerative alternative crops are easily available. The idea of alternative crops is not straightforward. Other crops such as olives and vines are in surplus already. There is often not enough water for timber-producing trees. In any case, they do not yield income for many years. We believe that both a stringent approach to future price-fixing negotiations and long-term reform are needed to bring the regime under more effective control.
Lord Mellish: My Lords, is the noble Earl aware that in this House, in the other place and among the public generally there are very strong elements that are bitterly opposed to the EC and its membership? Does the noble Earl not agree that it is extraordinary that money we allow to the EC is spent doing the very opposite of what we are doing in this country? Can the noble Earl explain that?
The Earl of Strathmore and Kinghorne: My Lords, no, I cannot. We are in a dilemma.
Lord Bruce of Donington: My Lords, is the noble Earl aware of the basic content of the report of the European Court of Auditors on the accounts of the Community for the year 1987? It refers specifically to fraud in this particular area. Will he ensure that at the next meeting of ECOFIN the matter of fraud in the tobacco industry of Europe receives urgent attention? Is the noble Earl further aware that the approximate contribution involved is about 18 to 20 per cent.?
The Earl of Strathmore and Kinghorne: My Lords, I believe that we covered this point a fortnight ago. As I said then, this Government take fraud extremely seriously. I shall pass on the noble Lord's other point to my right honourable friend.
Lord Boyd-Carpenter: My Lords, will my noble friend clear up the total expenditure figure? If he looks at the reply that he made a fortnight ago he will find that the figure of £150 million was our contribution out of a total from the Community of £700 million. Does my noble friend agree that that is a massive subsidy which is being given to this industry? Is he aware that the argument that the area concerned can only grow tobacco could be the same argument used by Colombia to justify growing cocaine?
The Earl of Strathmore and Kinghorne: My Lords, on the matter of figures, my noble friend is correct. I apologise if I misled your Lordships earlier on. The attitude of the United Kingdom is to seek to reduce expenditure on the tobacco regime through re-orientation of production away from the less marketable and high tar varieties.

British Nationality (Hong Kong) Bill
11.40 a.m.
Earl Ferrers: My Lords, I beg to move that the Bill be now read a second time.
This is an unusual Bill to meet an unusual situation. In seven years' time Hong Kong will revert to the sovereignty of China. It will be the first time in the United Kingdom's history that we will have handed over a territory to a communist power. There are. as your Lordships know only too well, long historical associations and ties of affection which bind this country to Hong Kong. Britain has a clear responsibility towards the territory and its people.
Your Lordships will also be aware of Hong Kong's remarkable economic success story. This community of some 6 million people, nestling as it does in a small corner of the Far East, has a greater density of people than has any other part of the globe. It has become the world's eleventh largest trading entity. It is a remarkable success story and one in which Britain has had, and still has, a considerable stake in terms of investment, trade and jobs. Hong Kong is our largest export market in the Far East after Japan. It is in the United Kingdom's commercial interests, apart from anything else, to ensure that the prosperity of Hong Kong continues. Our task now is to help Hong Kong to weather the difficult period ahead and to ensure a successful transition in 1997. I think that the prospects are good.
In 1984 we established a solid foundation for Hong Kong's long-term future. In the Joint Declaration, which was signed in that year, China undertook to allow Hong Kong to continue to operate as a free market. That is a unique position incorporating the principle of two systems within one country. This remarkable document was an achievement for British diplomacy. It also represented a recognition by China of where its own economic interests lay. We have been co-operating with China over a range of issues to build on that foundation. We have agreed on progress towards direct elections to Hong Kong's Legislative Council and we have introduced a Bill of Rights to entrench the principles of the Joint Declaration.
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The Bill before your Lordships addresses an immediate and pressing problem. Hong Kong is currently going through a period of uncertainty and anxiety. As a result of this, the territory is experiencing severe emigration. Emigration from Hong Kong is nothing new. It has always been part of Hong Kong's character. But the figures have risen from an average of 20,000 a year during the first half of this decade to over 40,000 per year last year. This year we fear that the figure will reach 55,000. What is especially worrying is that so many of those who are leaving are Hong Kong's professional, managerial and technical personnel. These people constitute only 5 per cent. of Hong Kong's population, but nearly 25 per cent. of those who have recently emigrated belong to this category.
The underlying problem is one of confidence. Last summer my right honourable and learned friend the Lord President visited the territory and reported to Parliament on the traumatic effect there of the events which had taken place in China. I know that many of your Lordships know Hong Kong well and have been there to see the situation for yourselves.
My right honourable friend the Foreign Secretary set out the Government's analysis of the problem in his Statement on 20th December and this remains the basis for the Bill. First, we are convinced that the current rates of emigration and the reduced confidence which for a variety of reasons at present exists pose a real threat to Hong Kong's stability in the period before 1997. Secondly, most of those who are emigrating are doing so reluctantly because it is the only means of acquiring the assurance of a foreign passport. Thirdly, most of them would remain if an assurance of a foreign passport were available without the need for them to leave Hong Kong.
We considered carefully whether assurances falling short of British citizenship would have sufficed. But it is clear that a scheme which led only to entry clearance would be counter-productive. There would be a real risk that those who sought to benefit from such a scheme would be drawn to the United Kingdom simply in order to meet the residential qualifications for full citizenship.
The discussions which have taken place with the Governor of Hong Kong since December and the representations which have been received from many Hong Kong interests, including British firms that are operating there, have reinforced our conviction that only the assurance of immediate British citizenship would give people who are otherwise likely to emigrate the confidence which they need in order to enable them to remain in Hong Kong.
That is the background to the Bill. Perhaps I may now come to the substance of the Bill itself. I have made available to your Lordships two documents, the Bill and an explanatory note outlining our present views on the way in which the selection scheme will operate which has been placed in the Library.
Clause I of the Bill provides for the registration as British citizens by the Secretary of State of up to 50,000 people who will be recommended to him by

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the Governor of Hong Kong under a selection scheme which will be approved by Parliament and for the registration of their spouses and children under 18. Only those who are settled in Hong Kong and who already have some form of British nationality or who have an outstanding application in Hong Kong for British Dependent Territory citizenship will be eligible to apply under the selection scheme.
In considering the scale of the scheme we have had to achieve a difficult balance. The Governor of Hong Kong believes that 50,000 is a figure which is capable of having a real impact both on confidence and on emigration. Even at that rate, it is equivalent only to about half the number of key personnel who might be expected to emigrate from Hong Kong by 1997 at the present rate of emigration. But 50,000 families represents a commitment which I think that this country could honour if—which we do not expect to happen —a significant proportion of them in fact decide to take up the offer and decide to settle here. No doubt the 50,000 families, if they come, would make a valuable contribution to this country as they will, by definition, be a highly qualified group of people.
However, I stress that this is a nationality Bill. It is not an immigration Bill. The purpose of the Bill is not to encourage people from Hong Kong to come to Britain but, oddly enough, to encourage them to stay in Hong Kong. But they will do that only if they have the security of knowing that if things go badly wrong they will in the end have somewhere else to go.
Failure to act now would pose a much greater potential threat to our immigration policy. If Hong Kong were to suffer a collapse of confidence, Britain could be faced with far greater numbers seeking admission. We believe that this Bill, combined with our other policies for Hong Kong, will greatly reduce the possibility of such a collapse before 1997.
The Government gave careful thought to the roles of the Governor and the Secretary of State in the processes which are envisaged under the Bill. The Bill is designed to meet Hong Kong's needs, and it is therefore right that it should give the principal operating role to the Governor. It is he, and he alone, who will have the necessary local knowledge and who will be able to command the necessary administrative machine. Accordingly, it will be for the Governor to operate the selection scheme once Parliament has approved it. It will be up to the Governor to select and to recommend applicants for citizenship.
On the other hand, we considered it right that the power of registering British citizens should be reserved to the Home Secretary. The Bill provides that the Home Secretary shall not register a person whom he has reason to believe is not of good character, and so the final say on whether a person who is recommended by the Governor is acceptable as a British citizen will rest with my right honourable friend the Home Secretary.
During the Bill's consideration in another place concern was expressed that, as the Governor is not directly accountable to Parliament, Parliament
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would not be able to oversee the implementation and the effectiveness of the scheme which Parliament had approved. We appreciated this concern. We therefore agreed to the insertion of a new clause, now Clause 4 of the Bill, which requires the Governor to submit an annual report to the Home Secretary explaining how he has discharged his functions under the Bill. This will provide a means of keeping Parliament informed and Parliament will be able to take account of the Governor's reports in considering any proposal under Schedule 1 to amend the selection scheme at a later date.
The Government have also responded to concern that the Home Secretary's power of direction —which enables him to reserve a proportion of places for allocation closer to 1997 —might be used to change the distribution of places between different sections of the scheme which Parliament had approved in the Order in Council. Another place has amended Clause 1(3) in order to remove any doubts on that score.
I turn now to the selection scheme. It would not have been sensible to write the details of the scheme into the Bill. They have to be kept flexible so that Parliament can, if necessary, be asked to approve changes later on in response to changing circumstances in Hong Kong.
The outline scheme is set out in the explanatory note. It is based on principles which were originally suggested by the Hong Kong Government and it is the product of extensive discussions with them. It also reflects certain adjustments and clarifications which have been made in response to the discussions in another place. The final form of the draft Order in Council will not be settled until both my right honourable friend the Home Secretary and the Governor of Hong Kong have had an opportunity to take account of the views which have been expressed by your Lordships.
The scheme that we envisage would be divided into four separate sections. The largest would be the general allocation section. This would account for 72 per cent. of the 50,000 places. It would be open to people from a wide range of walks of life who have had a key role in maintaining Hong Kong's prosperity and successful administration. They would come from seven broad areas of work: business and management, accountancy, engineering, information sciences, medicine and science, law and education. The distribution of places to the various occupational groups within those broad areas would take account of the rates at which their members were emigrating in order to focus the assurances where the need is greatest. A residual category would be set aside for other technically or professionally qualified people outside the listed occupational groups who were performing essential functions.
Applicants in the general allocation section would be assessed on a points system. Points will be awarded for seven criteria: age, experience, qualifications, special circumstances, proficiency in English, British links and community service. The special circumstances points would provide a means

1825
of giving extra weight to occupations which may find themselves suffering higher emigration than others in the same group. It will enable qualities which were particularly important for certain groups to be recognised and it will enable exceptional individual merit to be acknowledged.
The Government considered it right to include in the scheme a provision affording a measure of assistance to British companies operating in Hong Kong. Service with a British firm would, therefore, be one of the criteria for which points would be awarded under the heading of British links.
Points systems are used by the Australian and Canadian immigration authorities and the concept is therefore well understood in Hong Kong. Considerable pains have been taken to make the system as fair as possible.
The Bill provides for the appointment of a committee to advise the Governor. He envisages that that steering group would include independent members as well as senior Hong Kong officials. The Independent Commission Against Corruption, which would also be represented on the steering group has been involved in the design of the selection system and it would monitor its operation.
Most points would be awarded on a basis which will be clearly prescribed in the Order in Council. However, the Governor would retain personal discretion in deciding how the 150 points for "special circumstances" should be awarded and, if necessary, in selecting between applicants who may be equally qualified.
Concern has been expressed in some quarters about that discretionary element in the points system. We have, therefore, concluded, in consultation with the Hong Kong Government, that the steering group, in advising the Governor on the exercise of his discretion, should operate as far as possible on the basis of descriptions of the groups from which individual names have been removed. We have also agreed with the Hong Kong Government that information about the basis on which the special circumstances points have been allocated in each occupational group would be made public in the Governor's report to the Home Secretary. As a result, the operation of the points system would be as transparent as possible. We believe that that will increase confidence in its fairness.
The second section of the scheme is for key entrepreneurs. It would make provision for a small number of businessmen whose individual standing, investments and operations are such that their departure could be damaging to confidence and employment in the territory. Not more than 1 per cent. of the places would be reserved for that section.
The disciplined services section would cover the police, prison officers, immigration officers, customs officers, fire and auxiliary air force services, as well as the Independent Commission Against Corruption and uniformed members of the garrison. It would operate on a points system similar to that which I have already described but it would be adjusted to take account of the needs of each service.
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The sensitive services section would provide for people who, as a consequence of service to Hong Kong or United Kingdom interests or because of their work or activities in any other capacity, would be especially vulnerable or exposed after 1997.
In order for the scheme to benefit Hong Kong properly, it must select applicants on the basis of their value to Hong Kong's economy and stability. But it would be quite wrong if it were thought that our proposals were designed just to cater for a wealthy and influential élite. The proposed scheme provides places for people from all sorts of different walks of life and different levels of income, each with their own peculiar and specific contribution to make to the life and to the economy of the territory. It will be a scheme to cover, for example, doctors, nurses, teachers, engineers, architects, computer programmers, air traffic controllers and police and other officers of various ranks, as well as business-men and senior administrators.
By limiting emigration and by bolstering confidence, it is hoped that this Bill will benefit all the people of Hong Kong—including those who do not secure places under the scheme.
The Government acknowledges that the Bill represents an unprecedented departure from the normal principles of nationality law. It has been necessary, therefore, carefully to circumscribe its scope. It is a particular, a self-contained and a time-limited measure. It is central to the Bill's design that the British Nationality Act 1981 should remain undisturbed and that the 1981 Act should continue to govern the acquisition of British citizenship by all those who fall outside the Bill's scope.
Nevertheless, the Government recognise that there exists a particular anxiety about the position of spouses of British citizens in the special circumstances of Hong Kong. There is of course provision in the immigration rules for British citizens to bring their spouses to live with them in the United Kingdom, but my right honourable friend the Home Secretary has recently given an additional assurance. He has made it clear that if a British citizen dies while he is resident in Hong Kong, his or her widowed spouse will be allowed to settle here at any time. My right honourable friend made it clear that the assurance would apply provided that the widowed spouse was still resident in Hong Kong, had not remarried and did not have citizenship of a third country. That assurance applies specifically to British citizens in Hong Kong. I believe that it meets the legitimate concern of expatriates that their spouse might become stranded in the territory in the event of their death either before or after 1997.
I have no doubt that much will be said during the debate about Britain's relations with China. There can be no doubt that Hong Kong's long-term future is bound to depend upon the actions and the attitude of the Chinese Government when they assume sovereignty in 1997. It does not follow, however, that Britain should henceforth comply in all matters with the views and wishes of Peking. As my right honourable friend made clear during the Bill's Second Reading in another place, Britain must act between now and 1997 on the judgments which we

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as trustees for Hong Kong consider are in the best interests of Hong Kong.
Britain is specifically required under the Joint Declaration to maintain Hong Kong's stability and prosperity in the transitional period and the Chinese have undertaken to co-operate with us over this. We are making every effort to persuade the Chinese Government that the Bill is necessary to the fulfilment of our obligation. We hope that the Chinese will come both to realise this and to accept it. Our belief is that, by granting British citizenship to 50,000 key personnel and their families, we shall in fact give those people the confidence to remain in Hong Kong so that they will continue to contribute their skills and talents to the continued success of Hong Kong.
Britain has both responsibility for and a powerful interest in Hong Kong and its continued well-being. Hong Kong needs this Bill. I commend it to your Lordships.
Moved, That the Bill be now read a second time. —(Earl Ferrers.)
12 noon
Lord Mishcon: My Lords, as is its custom, the House expresses appreciation to the noble Earl for the clear manner in which he presented the Bill. It is a Bill that awakens memories of previous discussions in regard to Hong Kong and our duties generally when, with dignity and honourable conduct, we disbanded what was an empire and turned it into a commonwealth. The duty upon the House today and in future stages of the Bill —certainly, the Second Reading will not be opposed from these Benches —is, as the noble Earl pointed out, to ensure that in so far as we are able we preserve the liberties of the citizens of Hong Kong, give them security and persuade the Chinese Government to see that obligations as we understood them are fulfilled.
In tracing the history of our relations with Hong Kong, I am reminded of the way in which Her Majesty's Opposition in this House have behaved. As noble Lords may remember, we were in the forefront when, with support from all over the House, we endeavoured to speak for those who would obviously want British nationality with a right of abode but who were underprivileged or might not be able to speak for themselves as eloquently as can some in Hong Kong.
I well remember the attitude of this House in December 1984 when the Joint Declaration was made by the United Kingdom and China. I recall the warmth with which it was greeted here and in the other place from all sections of Parliament. We felt that the Foreign Secretary had done a good job. We believed that what he had secured and was going to secure was a democratic system in Hong Kong with guaranteed liberties that would be passed on in 1997 to a government which would honour what was then in place.
I spoke about the dismemberment of an empire and the creation of a commonwealth. As the noble Earl so rightly pointed out, this is the first time that we have ever passed into foreign hands territory
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which was part of our empire. We have given independence proudly to those members of the empire and now the Commonwealth. When we came to think of those whose sovereignty might be affected by claims, this House, with some difficulty against the Government, managed to secure British nationality for them. We did that in the case of Gibraltar. The noble Lord, Lord Boyd-Carpenter, is not in his place. I well remember the support that we gave on that occasion to his very redoubtable claim for the citizens of Gibraltar. We did the same for the Falklands for the same reason —a possible threat to sovereignty.
I wish to heaven that Parliament were able to give to Hong Kong what we gave to Gibraltar and to the Falkland Islands. But it is not honourable to issue a cheque on the basis that it will never be presented. It is with that difficulty that we are all faced. We cannot promise the right of abode in our crowded island to six million people. We have to take into account the fact that if a right of abode is granted, it is a right upon which action can be taken.
I referred to what we have tried so far to do for the citizens of Hong Kong. Again, the Government were not especially helpful, if I may say so. In January 1986 I rose from these Benches to fight for the rights of ex-servicemen, those who had fought for us and those who were in Hong Kong as citizens. Looking to 1997 I asked, on behalf of my colleagues on these Benches, that rights of British nationality with the full right of abode should be given to them.
I know that the noble Lord, Lord Glenarthur, is taking part in this debate. Not one word that I shall say is meant as criticism of him as a Minister. We had the greatest admiration for him and we still do. Having said that, the Minister was acting under instructions and advice. I well remember, when I pleaded that that right could be given under existing legislation and that primary legislation was not needed to give the rights to ex-servicemen, the reply which I received on 20th January and recorded in the Official Report at col. 101:
"To expand a little, it is not possible to make provisions in the order to confer British citizenship on all former servicemen in Hong Kong because it is not permissible under the Hong Kong Act 1985. It would require an amendment to the British Nationality Act 1981. Such amendment could not be made by the order because that cannot make any provision not permitted under the Hong Kong Act, and it would therefore require primary legislation".
When I pleaded that one could act under Section 4 of the Act, I was told at col. 102 of the Official Report:
"As to the registration of all former servicemen under Section 4(5) of the British Nationality Act, which I believe was one of the points raised by the noble Lord, Lord Mishcon, that would not be possible because Section 4(5) can apply only to persons who have been in Crown service under the Government of a dependent territory".
Miracles happen in Whitehall. By some extraordinary circumstance, because of the pressure that was exerted in this House and in another place, only a few months later and without any primary legislation or any difficulty under Section 4(5) of the British Nationality Act, the Secretary of State announced:
"We have also agreed to meet the concern for ex-servicemen. There are about 270, and of those, 60 or so are eligible to apply

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for registration as British citizens under section 4(5) of the British Nations lily Act 1981". [Official Report, Commons, 13/5/86: col. 656.]
I illustrate these points only to show, first, that pressure from your Lordships' House has its effect and, secondly, that Her Majesty's Opposition in this place have nothing to be ashamed of but certain matters of which they can be proud in their fight for those in Hong Kong not able easily to speak for themselves. We did the same for the war widows: that issue too has been conceded by the Government.
What are we to do in regard to the problem of confidence in Hong Kong? I talked about the December 1984 Joint Declaration and the hopes that we then had. The hopes were that we would so build up democratic institutions in Hong Kong with a predominant percentage of elected representatives that, whoever the government were in 1997, if China managed to observe its obligations as we were entitled to think it would, there would be liberties and freedoms, written in and established. That has not happened.
I wish to address the subject of security of the citizens of Hong Kong, and the persuasion for them to stay there on the basis that we have still some years left. One of the Foreign Office ministers is either about to go or has already left for Hong Kong. I cannot believe that the persuasion of this country, of its allies if necessary, and the persuasion too of prominent businessmen in Hong Kong whom China wishes to stay in Hong Kong, cannot be exercised in order to show that the greatest security of all is not an ability to leave and go elsewhere but a commitment to stay in a territory which is free.
Is not what happened in Tiananmen Square in June 1989 a chapter in the history of fights for freedom against tyranny that your Lordships will never forget and a reason for us not merely to say, "Let us try and a think of a half-hearted, muddled, arbitrary way of dealing with the situation"? Is it not our duty to press to ensure that freedom, liberty and democracy are in as strong a state as possible by 1997 to give confidence?
I turn to the legislation before us. The other place has spoken. There will be no question of the Second Reading, the principle of the Bill, or the expedition of its progress, being opposed. What are we faced with? Is it thought that we are giving assistance in obtaining confidence in Hong Kong with its population of six million when, by a points system, 50,000 heads of families will be allowed British citizenship? Will your Lordships pause for a moment? I am told that it is likely that 250,000 applications will be made. What of the confidence of the 200,000 who will be refused? What of their feelings of fairness, arbitrariness and insecurity?
The scheme itself is so odd. With reference to English proficiency, presumably one obtains full marks for that if one manages to produce an examination certificate. But what about the difference between examiners A and B and examiner C when it comes to a person who says, "I learnt this from my mother. She was most proficient in English. I have taken no examinations". One immediately
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wonders whether examiner A will give the same marks as examiners B and C in regard to such a person.
On the question of age, your Lordships may feel some embarrassment, as I do, on finding that if one exceeds the age of 40 one goes down a sliding scale of points. One reaches one's maximum points between the ages of 30 and 40. That is all right until one reaches the next category which is that of experience. If one has had an awful lot of experience because one is 50 or 60, one's points increase. It is therefore very much a question of swings and roundabouts going round rather giddily, one would have thought.
What about at the end of the day'? Only 50,000 people are authorised citizenship. What happens to all those —I imagine that there must be many —who have exactly the same number of points but the figure rises to over 50,000? Are names put in a hat for British nationality? Is the Governor left to decide? On what grounds does he decide?
If that is thought to be eccentric, carping criticism of a points system, perhaps I may refer your Lordships to an article in today's Times, headed "Some home truths about Hong Kong". The author is a former director of home affairs in the Hong Kong Government. I beg noble Lords not to take my language for granted. This is what he says:
"The scheme is impossible to administer fairly and will have divisive and embittering consequences, particularly within the Hong Kong civil service which is already deeply demoralised by anxiety about the future and internal dissension over pay and conditions of service".
The article adds:
"The scheme comes too late and offers too little to have the anchoring and confidence-restoring effects claimed for it by the Government. The Lords have been placed in the invidious position of having to improve what may be only the first of a series of Pyrrhic victories for the … Government that have been precipitated by the Hong Kong crisis".
In my closing remarks I should say something in answer to the question: what would you do? I say this perfectly frankly. I have said that we on these Benches wish to do our utmost to assist in what ought to be a joint task of securing confidence in Hong Kong. We wish to do so by obtaining that confidence through the proper democratisation of Hong Kong and its institutions between now and 1997. We would use all the pressure we could to achieve agreement from the Chinese Government. We also wish to see that our immigration rules are such that immigration rights would be granted to all those who need them. When my noble friend the Leader of the Opposition, in 1986 in extraordinary circumstances, moved a Motion to amend the Hong Kong order in order that ethnic minorities who would otherwise be stateless might have a position of safety in 1997, the Government accepted the obligation.
It is by those methods that we would hope to instil confidence in this old Crown colony for which, as the noble Earl rightly says, we have a deep responsibility. It is with sorrow and not in anger that I say on behalf of these Benches that the points scheme hardly fulfils that duty.
12.20 p.m.
Lord Bonham-Carter: My Lords, I do not propose to follow what was said by the noble Lord, Lord Mishcon, in any detail. This is one of the few occasions in which I find myself in profound disagreement with almost everything that he said. Noble Lords, can make a number of criticisms of the Bill, and we shall do so. A great deal should be discussed in Committee, particularly as regards the points system. Undoubtedly it is complicated both to devise and administer and it may be possible to improve it. However, we would delude ourselves if we supposed that by entrenching democracy in Hong Kong, desirable though that may be, we could give any guarantee whatever to the people of Hong Kong that that democracy would continue after 1997. Not only would we be deluding ourselves but if we told that to the people of Hong Kong we would be guilty of deluding them too. To propose that as the alternative policy to that which the Government have put forward is deeply and profoundly disappointing.
In speaking to the Bill I confess that I have been influenced by conversations that I have had with representatives from Hong Kong. The message that I received from those people was that they wanted the Bill to be passed, whatever its defects. They want it to pass quickly and they believe that it will increase confidence or, to use the jargon term, it will help to anchor people on Hong Kong. I shall return to that issue in a moment.
In accordance with what I have previously said on the subject from these Benches, I repeat that we regard the Bill as being inadequate. There are a number of issues that we shall raise in Committee. There is a sense in which the Bill is essentially self-contradictory. It is based on a series of propositions: namely that it is in the interests of the United Kingdom, China and the people of Hong Kong that the haemorrhage of emigration should be staunched; that the flow of emigration, now running at between 50,000 and 60,000 per year of the most highly-qualified and talented members of the population who are at the heart of the Hong Kong miracle, must be central to any policy that one devises towards Hong Kong; and that, above all, emigration is influenced by two factors —by the policy of the Chinese Government and by the existence or non-existence of an insurance policy. In others words, if people in Hong Kong who wish to stay there have the ability to leave, they are likely to stay in Hong Kong. That is the slightly paradoxical syllogism on which then Bill is based. But if those people are not provided with the ability to leave they will leave, and they are leaving, and they will be precisely the people whom we want most to stay.
Therefore, there are two types of insurance policy: first, that provided by the British Government which by allowing people to leave allows them to stay; secondly that which those not protected by the British Government will provide for themselves —that is by leaving. It is not difficult to identify which of those two policies is the better. The first anchors those people whom we want to anchor in Hong Kong; the second encourages those whom we want to stay in Hong Kong to leave. The
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first is a magnet and the second is a scarecrow, except that it frightens away the birds that we want to keep.
When I examined the Bill it appeared that in the quantities that were devised and decided upon a great deal was a matter of domestic and internal politics rather than Anglo-Hong Kong politics. If the proposition on which the Bill is based is that, given the ability to leave people will stay, then the greater the number who have the right to leave, the greater the number who will stay. It is that contradiction which appears to lie at the heart of the Bill. Thus the policy that we on these Benches have always proposed merely takes seriously the assumption on which government policy is based. The Government's justification for offering British citizenship to 50,000 families in Hong Kong applies to all those British citizens in Hong Kong. The noble Lord, Lord Mishcon, will say that that is a dishonourable pledge to make because we cannot cash the cheque. In fact, we have made precisely such a pledge to 250 million people in the European Community. No one says that that is a dishonourable pledge to make. Therefore, I do not regard that as being a serious objection to my suggestion.
There is a second factor which we must not forget. In it there is a happy conjunction in which our self-interest coincides with our moral obligation. We should not underestimate our bargaining position with China; nor should we forget the immense and vital economic contribution which Hong Kong makes to China's economy. It is in the interests of China that that contribution should continue and grow. Therefore, were the Chinese rational —and there is no reason to believe that they are wholly irrational —there would be a coincidence of interests between us and Hong Kong and them. We want to abate Hong Kong emigration and so should the Chinese. I agree with the noble Lord, Lord Mishcon, that that can happen only if human rights, a reasonable degree of freedom and democracy and a free market are retained.
Therefore, we must ask ourselves what pressure we can bring to bear on the Chinese Government as regards this complex and important issue. I suggest that the pressure that we can bring to bear is emigration. If it continues at the present rate and qualitatively in the same fashion, the Hong Kong which the Chinese Government will inherit will not be as valuable as the Hong Kong of today or that which it could be. I argue that, even if one does not accept all the proposals that I have made, a wider insurance policy is what we should pursue. Secondly, a wider insurance policy —especially if we had announced it earlier —would have allowed us to take a second step which we have not yet done successfully; that is, to appeal to our partners on the Continent, in the United States and in the Commonwealth to join us in providing an insurance policy for the same reasons to the citizens of Hong Kong.
It is late but I do not believe that it is too late to try to mobilise world opinion and assistance in guaranteeing to take in the citizens of Hong Kong and providing the insurance which is so essential to the future of those people.
12.30 p.m.
The Archbishop of York: My Lords, I have two reasons for speaking in this debate. First, it seems to me that there is a very strong moral dimension in this debate and that therefore your Lordships' House might look for some contribution from these Benches It deals with a people who have always looked to us in Britain for protection and who have legitimate expectations of us.
It deals also with what I believe is now the one and only area in the complex story of Hong Kong at present where we, as a nation, can make decisions on our own without having to bow to anyone else. Therefore, what we say reveals a great deal about how we regard the rights and dignity of a people for whom we still carry direct responsibility.
My second reason for speaking is that in March I had the privilege of leading a delegation from the British Council of Churches to Hong Kong where we spent a week at the invitation of the Hong Kong Council of Churches. That enabled us to meet a very large number of people at all levels of society from the governor at one end to the people who work in the factories at the other. We were able to explore with them in some depth their hopes and fears about the future. What was very noticeable was that the topic which always came to the top of the agenda after the Vietnamese refugees was the right of abode.
Although there were very heartening signs of some groups in the churches and business community who were preparing to stay in Hong Kong no matter what, nevertheless, we had very concrete evidence of a strong atmosphere of foreboding. In some of the churches we saw what those global emigration figures mean in practice. For example, some churches in the last year or so had lost about 30 per cent. of their membership through emigration. All the people to whom we spoke were aware of the pressure to seize whatever invitations to emigrate were offered to them while those doors remain open. In particular, teachers have recently been under very heavy pressure as a result of advertisements to go to Australia where jobs are offered to them. For the first time in its history the medical school has not filled all its places. There is a simple reason for that: it is a seven year course.
Curiously, the universities are planning a 50 per cent. expansion but nobody is clear from where the extra teachers are to come. In our contacts with the universities, it was obvious that the people who are viewing the future with the most confidence are those who already have foreign passports in their pockets.
Some of the newer churches in Hong Kong have been particularly badly hit; for example, in one congregation of 1,000 in one of the renewal churches before 4th June 1989, 5 per cent. of the congregation held foreign passports and 50 per cent. were applying for them. After June 1989, 80 per cent. of that congregation were applying for foreign passports.
That leads to tragic events in some communities. Some people slip away without even saying goodbye because there is a deep sense of guilt at leaving a place mixed with a deep desire to protect their own
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children's future. A major counselling task needs to be done and is being done in some of the churches.
The Hong Kong Christian Institute, which is an offshoot of the Council of Churches. has said that one can predict that by 1992 or 1993 a tenth of Hong Kong's population, a fifth of Hong Kong's Christians and as many as a quarter of Hong Kong's clergy and church workers will be gone. Many of the churches are, thank God, continuing to plan for a long-term future there, and in view of the heavy dependence of a colony's social and welfare services on church sponsorship, the presence of those people is vital for the future health of the community. It is essential that their confidence should not be undermined. That is why it is so disturbing to find that very large exodus from the churches.
It must also be said that we did not find very much trust in British intentions. It was sad to find the word "betrayal" used again and again. People felt let down in all sorts of ways, but the denial of the right of abode to all but a few was seen as the sharpest point of criticism. That is why we became quite clear as a delegation that that issue cannot be dealt with by the, "Wait and see until 1997" method. For that reason, I agree very strongly with the criticisms which the noble Lord, Lord Bonham-Carter, made of what the noble Lord, Lord Mishcon, said, because the crying need is to restore confidence now. Even if you rely on the build-up of democratic institutions, that will take time and will be fairly uncertain. All that must be done against a background of existing distrust towards Britain. Therefore, promises about what some future British Government or even what some future legislative assembly in Hong Kong may do in 1997 cuts no ice at all. What must be done, must be done now.
We went there as a delegation believing that the honourable course for Britain would be to restore the right of abode to all those with British passports. Some of our experience confirmed that. It soon became obvious to us that fears of a mass exodus to Britain are groundless. Most people are not interested in coming here and do not particularly like Britain. They are in Hong Kong because they like it and if they had to leave they would rather go to Australia, Canada or the United States where the society is more like that to which they are accustomed. For them British society seems appallingly restrictive. However, they now want some guarantee from us that their lives and freedom are precious to us, and that they will not, as a people, be abandoned after 1997. The right of abode would constitute that kind of guarantee.
This Bill goes a small way towards providing such a guarantee for some of them. I support it on the grounds that it probably represents the most that is politically possible, but that in itself seems a sad indictment of our attitude as a nation and our fears of accepting responsibility for those vigorous and likeable people for whom we are still morally responsible.
The Hong Kong people will accept the quota system and make the most of it because they are pragmatic and realise that it is better than nothing. It can be argued —and some of our delegation did

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argue, as did the noble Lord, Lord BonhamCarter—that the difficulties in interpreting the Bill fairly will sap confidence. It has been argued that isolating a specific group of people will force special Chinese attention upon them, which may be unwelcome. One could say that a more generous right of abode will make it more difficult for China to exercise discrimination against any group which had been picked out and given that right of abode. There is therefore merit in the argument that that would massively reduce the total emigration figures now and probably ensure a smaller exodus in 1997.
Others of us accepted the Government's intention to do the best that they can while lamenting the kind of racist fears which have forced them into this corner. That is what underlies the unwillingness to be generous. My support for the Bill therefore has this large note of regret attached to it.
In concluding, I welcome the guarantee that has been given to the Chinese spouses of British citizens. I met a number of those people in Hong Kong and it was a matter of deep worry to them. I therefore welcome that guarantee. I hope also that the needs of the small group of Chinese who claim British descent can be sympathetically considered. Their cases are not straightforward, and consideration of them belongs more properly to the Committee stage of the Bill, which I fear I shall not be able to attend. I mention it now as part of a general plea that the provisions of the Bill are interpreted generously rather than grudgingly. It is all part of what we owe to a colony which still has moral claims upon us and which it would be shameful to ignore.
12.42 p.m.
Lord Sharp of Grimsdyke: My Lords, as my noble friend Lord Ferrers said in his opening remarks, Hong Kong and its future present Britain with a unique situation. We have the responsibility up to 1997 for ensuring that Hong Kong continues to thrive, to flourish as one of the world's most dynamic commercial and financial centres during the transition from British to Chinese sovereignty. It is of special importance at this sensitive period in the history of both China and Hong Kong that the British Government and British businessmen show themselves committed to the territory's long-term wellbeing and ready to demonstrate their support for its people in concrete terms.
The case for special treatment for Hong Kong can be made out in terms of political considerations as well as moral obligations. The political considerations were covered by my noble friend Lord Ferrers and the most Reverend Primate, the Archbishop of York, addressed the moral dimension. But there is also a case to be argued on the basis of self-interest which must not be overlooked. With a population of less than 6 million, Hong Kong provides Britain with an important source of overseas earnings. Last year our exports in invisibles earned us £2·3 billion from Hong Kong. The territory is second only to Japan among Britain's Asian markets. Worldwide, outside the European Community and North America, Hong Kong is Britain's third largest market.
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There are more than 400 British companies in Hong Kong; in addition there are many companies which are not wholly owned from Britain, but in which there is significant British investment or management. In all, there is British involvement through direct control, investment or management in close to 1,000 companies in Hong Kong. Additionally, 2,500 British companies have agents there.
The obvious questions are: why have we managed to develop such substantial business relationships with Hong Kong; and will these valuable ties survive the change of sovereignty?
The crucial ingredient in the successful performance of British firms in Hong Kong has been the commitment of this vibrant territory to the principle of free trade and its opposition to government interference with the economy. Thus, the British exporter has been secure in the knowledge that no matter how turbulent and xenophobic the political scene in Asia, Hong Kong would provide him a safe base in which to develop business. Unlike almost every other part of the Asian region, the British businessman has been able to go to Hong Kong confident that his products and services would be judged on their own merits. Their competitiveness in terms of price and quality are the only entry requirements.
Thanks to the Joint Declaration and the proposed Basic Law, British firms have specific guarantees that the business environment which they will face in Hong Kong far into the next century will be a hospitable one. We should recognise with some gratitude that, despite differences with Peking over the last year, the Chinese Government have shown themselves firmly resolved that this open economy will remain in operation regardless of the change in sovereignty, with no change in its totally free currency markets; its freedom from import controls; its low taxes; and its aversion to budget deficits.
Nevertheless, despite this commitment to open competition, British businessmen have a special, though indirect, advantage as a result of the century and a half of British responsibility for the administration of the territory. The legal system is very much a British product. The standards and practices of the key professions —not just lawyers but accountants, engineers, architects and all the other skills essential to a modern urban community —are also British exports.
The educational system reflects the best of British experience. There is active interchange between the territory's universities and polytechnics and British academic institutions. Even at the secondary school level, British educational principles and practices exert a powerful influence. Needless to say, the language of commerce, finance and the professions continues to be English. Again, the Joint Declaration provides considerable reassurance that this state of affairs will continue well into the next century.
The principal cause for concern today is the sharp rise in emigration from the territory. At present, the outflow to new homes in countries like Canada and Australia is running at around 50,000 a year, a high proportion of them well-educated professionals and

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successful executives. This brain drain reached critical proportions during 1989 because of the inevitable alarm created among thoughtful Hong Kong people by the imposition of martial law and the rest of the tragic crisis which occurred so unexpectedly in China last year. In a city as cosmopolitan as Hong Kong, the better educated have educational and professional qualifications which enjoy international credibility. Large numbers of them, determined to ensure that their families have assured futures, must feel compelled to make plans to find alternative homes overseas when faced with serious political uncertainties. Several countries are ready to welcome those talented people, who generally arrive with significant financial resources.
For Britain, this situation poses a double threat. In the first place, there is the obvious danger that the loss of such vital talent will impair the efficiency of the Hong Kong community in general but, more especially, of its business world. Obviously, the attractions of Hong Kong as an ultra-modern base for British companies' operations throughout the Asian region would then decline dramatically. But an even more pressing danger is that the loss of the cream of Hong Kong's professional and managerial talent drain off from the territory the very people who have benefited most from their British-style education: the professionals who have undergone training in accordance with standards and syllabuses laid down in the first place by British professional bodies; or the managers and decision-makers whose preferred standards and specifications generally have been those of Britain. In other words, the brain drain threatens to remove from Hong Kong the British executives' closest counterparts in Asia. The result must be to make Hong Kong into a far more difficult environment for us.
There is no point in trying to allay the anxieties of this type of migrant with vague promises. The sophisticated group has made the major contribution to the development of Hong Kong into one of the world's most dynamic business centres. The family backgrounds of these talented individuals makes them all too well aware of the potential political hazards which could lie ahead for Hong Kong on a doomsday scenario, given China's past history. We must be frank and recognise that they had a shock in 1989.
My own conviction, following talks with senior Chinese leaders, including Li Peng, the Chinese Premier, as well as my recent conversations with a cross-section of the business community in Hong Kong, is that the long-term prospects for the territory remain excellent and that the Chinese Government have every intention of honouring the Joint Declaration. There seems to be no wavering in the determination of the Chinese authorities to maintain the uniquely successful community of Hong Kong, which China hopes will make a substantial contribution to China's future modernisation. But when people's nerves have been shaken, as they were in Hong Kong last year, the process of rebuilding confidence in China's good intentions cannot be achieved overnight.
A major priority must be, therefore, to buy time; create a breathing space until the key groups within
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the Hong Kong community can look towards 1997 with easy minds. For that reason, the Government's nationality package has a major contribution to make in stablilising the situation. Its key feature is that the individuals most vital to Hong Kong's continued success no longer need to try to arrange an early departure from the territory in order to qualify for a new nationality through residence overseas. Instead, they have been given the details of an extensive, well-organised and carefully targeted programme that will allow those qualified to obtain British citizenship without leaving Hong Kong—I repeat, without leaving Hong Kong. They will have an opportunity to obtain all the comfort and protection which British citizenship brings without having to desert their employers, their professions, or indeed their community, at a time when their talents and experience are urgently required to steer the territory intact through a challenging transition period.
The nationality measure has not received a universal welcome. Some Chinese officials have expressed doubts about its aims. We must address these fears through frank diplomatic exchanges on this issue. I raised this particular issue with the Chinese Premier, Li Peng. His view was that this measure was not necessary in the long term, but he did not address the short-term problem. It has also been argued that the package may well serve to encourage a substantial number of Hong Kong families to migrate to Britian. Again, on the basis of my own personal contacts with the Hong Kong business community over the past 12 months, I believe the opposite to be true and that individuals will be persuaded to postpone their migration plans long enough to give the Joint Declaration enough time to prove its worth. Hong Kong entrepreneurs and executives will not willingly exchange a low tax environment for what they regard as a penal tax regime in the UK.
There is, however, one aspect of the nationality package which is less than totally satisfactory. It is clear that a number of other countries with established links with Hong Kong, and with major companies trading there, are taking steps to grant citizenship or right of entry to certain Hong Kong citizens working for their country's companies in Hong Kong. These countries include a number of our fellow EC members. In short, they are looking quite unashamedly to further their own national interests by ensuring that those of their companies with major operations in Hong Kong are able to offer passports to key employees. By contraxt, our Government's nationality package —although it provides some element of priority under the point scoring system for Hong Kong citizens working for British companies —has very little in it to safeguard the position of the UK, as opposed to the position of Hong Kong. This is reflected by the low weighting of British links in the points system determining qualification for British passports. I understand that only 50 points out of a maximum of 800 points can be earned for British links. British business interests will have to compete with other British links within the 50 points, and that seems to me to reflect a low regard by the Hong Kong Administration for the

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contribution made to the UK economy by UK controlled business interests in Hong Kong.
In their original proposals the Government did indeed address this point by proposing a secondment scheme which would have been a particular benefit to those British companies with operations both here and in Hong Kong. Unfortunately, Ministers have not felt able to include that provision in the legislation and are now looking at alternatives. While I must declare an obvious interest in this matter as the chairman and chief executive of a company with major Hong Kong and British interests, I would most strongly urge my noble friends to identify a means, either within the legislation or outside it, to accord to British companies the same degree of support as other governments are giving to their companies with operations in Hong Kong.
That said, I wholeheartedly commend this Bill to your Lordships. I cannot, therefore, comprehend or accept the unfortunate comment about an alien culture advanced in another place against the Government's nationality proposals. I find it ironic, to say the least, that one of the principal antagonists of the package is a board member of a company which recently made great efforts to obtain a licence to operate a privileged franchise in Hong Kong. It would seem that to some politicians Hong Kong's money is acceptable, but not the people who provide it.
If the Government initiative is rejected, we shall inevitably experience a steady erosion of the £2 billion per annum contribution to our balance of payments and the responsibility for that will have to be placed directly on those who are vociferously and emotionally seeking to reject the modest package proposed by Her Majesty's Government. If we fail, through our own lack of initiative, to maintain a vibrant Hong Kong, we may be sure that both Hong Kong's and China's, memories will be long and British businessmen in the next century will have to pay, in terms of lost profit opportunities, for a lack for foresight on our part today in maintaining the wellbeing of Hong Kong.
Lord Mishcon: My Lords, before the noble Lord sits down, and to ensure that there is no misunderstanding, will he make clear, without necessarily mentioning a name, that the gentleman in another place to whom he referred is not a Member of Her Majesty's Opposition.
Lord Sharp of Grimsdyke: My Lords, I can confirm that.
12.59 p.m.
Lord Irvine of Lairg: My Lords, I confine my speech to a single important issue of principle —the exclusion of judicial review in a system designed to bolster confidence in Hong Kong. The provisions of the Bill are unclear and the task to which your Lordships may think we should set ourselves in Committee is to clarify them.
Clause 1(5) provides:
"Neither the Secretary of State nor the Governor shall be required to give any reason for any decision made by him in the
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exercise of a discretion vested in him by or under this Act and no such decision shall be subject to appeal or liable to be questioned in any court".
Clause 3(4) provides:
"Section 1(5) above shall apply to a decision made by a public officer by virtue of subsection (3)(b) above as it applies to a decision made by the Governor".
Those provisions undoubtedly exclude judicial review of discretionary decisions by the Governor or public officers. The Government do not dispute that. The object of the provisions is to oust the ordinary jurisdiction of the courts to review discretionary decisions. It is not a heartening provision to read in the Bill at a time when a major object of policy for Hong Kong should be the advancement of democracy and respect for the rule of law.
Let me make plain what I am not saying. I am not advocating an appeal system which would be a re-run of the initial decision-making process. I am not advocating the courts substituting their decision for the Governor's decision. There is a great deal of misunderstanding of what judicial review is about. It is about neither of those things. Discretionary decisions under statutory powers can be reviewed by the courts on very narrow grounds: error of law —that the decision-making body neglected relevant or took into account irrelevant considerations, the decision-maker primarily determining what are relevant and what are irrelevant considerations; or that the decision-maker acted in breach of the rules of natural justice, for example by denying an individual the opportunity to reply to a serious allegation against him in a personal respect, by failing to honour an undertaking to follow a particular procedure in a particular case or by making a decision that was perverse or irrational.
The courts never substitute their discretion for that of the administrator. They review on those very narrow grounds and generally the effect of a decision adverse to the administration is only to require it to go through the decision-making process properly. It does not require it to change its mind, but it greatly adds to public confidence in the administrative process.
It is disheartening to see those modest and limited remedies excluded at a time when we should be seen to be advancing respect for the rule of law in Hong Kong. It is disheartening too to see the Governor in terms relieved of any obligation to give reasons for those critical decisions over individuals' lives. In the United Kingdom today it is widely regarded as the badge of good public administration to give reasons for discretionary decisions. Today is not time for a lesser standard in Hong Kong, especially since the administration of the new points system is bound to attract charges, however groundless, of cronyism, favouritism and even worse.
Finally, there is the question of whether the effect of this clause is not merely to exclude judicial review of discretionary decisions but to prevent review of a failure to accord statutory rights en route to the discretionary decision. The Government say that the clause does not have that effect, but it is doubtful and the statute should surely be clarified. A provision along the lines of Section 44(3) of the British

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Nationality Act is required. Nothing in that section affects the jurisdiction of any court to entertain proceedings of any description concerning the rights of any person under any provision of that Act.
Let me give an example. Under Clause 3 the Governor may, and obviously will, make regulations governing the manner under which applications are to be made to him. The regulations may make different provisions for different cases. It should be made clear that anyone who is denied his proper rights under the regulations should be entitled to go to the courts to have them upheld.
Perhaps I may give another example. The selection scheme to be set out by an Order in Council may specify different criteria or different selection methods for different classes of person. Let us suppose that the Governor departs from those in considering a particular case and applies the wrong criteria or the wrong selection methods. I would not be happy without an express provision that he could be challenged in the courts when Clause 1(5) so emphatically lays down an absolute bar on questioning his discretionary decisions in the courts. There should be no fear of judicial review, of the floodgates being opened. The courts have to grant leave for an application to proceed. Frivolous or hopeless cases are easily weeded out. It is only the reasonably arguable cases that go forward.
The provisions of the Bill to which I have been calling attention are a test of the sincerity of our commitment to the rule of law in Hong Kong and I do not doubt that noble Lords will desire to consider those provisions with care in Committee.
1.5 pm.
Lord Holme of Cheltenham: My Lords, I cannot imagine that anyone rises to his feet for the first time to address this House without feelings of trepidation. I certainly have such feelings myself and, if anything, they are increased by having to follow speeches of such distinction from all sides of the House. I should particularly like to mention the speeches of my noble friend Lord Bonham-Carter and of the most reverend Primate the Archbishop of York, and to stand here and acknowledge that I am to be followed by the noble Lord, Lord MacLehose, whose unique status and knowledge in this matter is, I am sure, acknowledged on all sides of the House.
I am told by the powers that be that watch over our destinies here that a maiden speech is supposed to model itself on those eponymous young ladies and show decorum and modesty. I shall try not to stray from the straight path of virtue into the realms of controversy but if I do I hope that I shall have your Lordships' indulgence because this a matter and a Bill which necessarily arouse strong feelings.
In introducing the Bill the noble Earl, Lord Ferrers, said that the Sino-British Declaration stood on solid foundations. We must hope that it does, but it seems to be a declaration that requries more and more buttresses as nervousness about 1997 increases. One of Her Majesty's Government's main buttresses has to been to propitiate Beijing by somewhat back-pedalling on the process of democratic reform. Admittedly, there is —in my
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view, admirably —a Bill of Rights proposed for Hong Kong. That prompts the slightly disrespectful question that if it is appropriate for Hong Kong, why should we not enjoy it in the United Kingdom? However, when it comes to other questions of democratic elections and institutions, the proposals seem to be very limited indeed.
The regime in Beijing consists of old men and fallible men. No doubt sooner or later they will go the way of Ceausescu, Honecker and other tyrants. However, so long as the regime that exists in Beijing is in power, is it not natural that people in Hong Kong will remember Tibet and Tiananmen Square? Is it not natural that confidence will continue to be at best precarious?
There is evidence of declining confidence in Hong Kong. There have already been references to that point in the debate. Effectively, the rate of emigration from Hong Kong has trebled between 1986 and now. Successful people from Hong Kong have already gone to establish their bases in Canada, Australia and the United States. Indeed. Vancouver is today a boom city on inward investment from Hong Kong to Canada.
Inward investment to Hong Kong is regrettably a different story. A survey of reports about Hong Kong published in the financial press of the United States over the last six months of last year showed that in almost every case stories about Hong Kong were coupled with a mention of the lack of confidence. I should like to read to the House a short quotation from an article which appeared in the New York Review of 15th March 1990. I commend it to those noble Lords who have not had the chance to read it. In the article Ian Buruma said:
"Now, more than ever, Hong Kong feels like a city without a past, or a future, only a frenzied presence. Almost the only institution still talking about big investments in the future is the government itself, just to keep the morale up, to show that not all is lost. A new airport is planned, for example, but quite who will finance such a grand project is still unknown".
There is —and I think we must accept it —a crisis of confidence, both local and international, in Hong Kong.
The answer should be for the Government to take such measures as will give people in Hong Kong the confidence to stay put. That has been the motive of the policy put forward so eloquently by the leader of my party and his colleagues in another place and put forward this morning by the noble Lord, Lord Bonham-Carter. The provision of British citizenship to British subjects in Hong Kong is not designed to promote emigration from Hong Kong to the United Kingdom, but rather to provide a safety net which will increase the confidence of those in Hong Kong who have to walk the high wire from now to an uncertain future. It is a policy about persuading people to stay in Hong Kong, not about encouraging them to leave.
I regret to say that the Government's policies fall a long way short of this right and rational policy but I acknowledge that the Bill is a short step in the right direction. I suspect that, even in their own relatively modest terms, the Government will rapidly find the number of 50,000 inadequate. There will be justified pressures from business on the lines described just

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now by the noble Lord, Lord Sharp of Grimsdyke, if the regulations and the points system seem somewhat weighted towards civil servants and weighted away from the absolutely key management skills that are needed for British businesses in Hong Kong to retain key managers. There will be pressures from expatriate spouses and from the potentially stateless. There will be many others. There will be good cases and hard cases. The Government will find themselves increasingly trying to force a quart into a pint pot. I suspect —indeed I predict —that the Government will have to come back on this mattter. If they find the numbers to be inadequate even in their own terms, I hope that they will have the courage to come back and increase the numbers.
Some noble Lords will no doubt support the Bill on the basis that the best should not be made the enemy of the good. I shall support the Bill as revised by your Lordships in Committee, but not on that basis. For I do not believe that this is a good Bill. I regret to say that it is a rather sorry little Bill. I shall support it because I do not believe that the best should be allowed to be the accomplice of the worst. The worst was represented in another place by that rather unappealing mixture of near racism in some quarters and what seemed suspiciously like electoral hypocrisy in others.
I conclude on a personal note. I first went to Hong Kong more than 30 years ago as a young officer in the Gurkhas. I could not have imagined then that in 1990 voices of senior politicians in Britain would be raised in favour of abdicating our responsibilities and of leaving Hong Kong in the lurch. The end of empire has not been easy for Britain. We have no, doubt made errors and misjudgments. But I do not recall before hearing voices raised of senior politicians who contemplated running away from our responsibilities. For all its inadequacies, the Bill is an acknowledgment of responsibility. It is in that spirit that I believe it should be supported.
1.15 p.m.
Lord MacLehose of Beoch: My Lords, it is a great pleasure to follow the noble Lord, Lord Holme of Cheltenham, and to be able to congratulate him on his maiden speech. I do so with all the greater pleasure since I now know that he was a Gurkha officer in Hong Kong. It was a most interesting and eloquent speech. I hope that we shall frequently hear him in the House.
However cautiously he welcomed the Bill, I certainly welcome it unreservedly. As the noble Earl said in introducing the Bill, Hong Kong is moving into a difficult transitional period. During that period it is quite essential that the administrative, social and other systems should be at peak performance. That is now at risk because the key people able to ensure it are leaving. They are leaving simply to qualify for an insurance of a citizenship carrying with it a right of abode.
On no account should we criticise them for doing that. Whatever may be their fortitude and devotion to Hong Kong—I am sure that in most cases it is very high —the pressure on them from their parents, from their children and from their relatives to seek
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an insurance for family reasons is enormous. I strongly support the Government in tackling the problem in this way and in directing this substantial injection of British citizenship without residence qualifications at this type of person.
I have no doubt about the policy, but one wishes that the numbers could have been higher. I agree with much of what the noble Lord, Lord Bonham-Carter, said. But we have got this far with these numbers, which are indeed very substantial. The essential point is to pass on, implement the Bill and use the numbers to reduce the flow of emigration as quickly as possible so as to confront this immediate problem.
The limitation on numbers involves divisiveness between those given and those refused. I do not see how that can be avoided. I should like to put the, as it were, moral point in this way. Our responsibility as I see it is to all Hong Kong. For the vast majority of people in Hong Kong the question of emigration simply does not arise. If we are to discharge our responsibility to them, we must ensure that the commerce that employs them, the administration that protects them, the public and social services that support them, and hitherto have done so on a steadily rising standard of living, continue to keep going. But that is under threat because the people most able to ensure it are leaving in search of an alternative citizenship. I am therefore convinced that aiming at this selection of people the amount of citizenship available is right, is morally right and is in the wider interest of all people in Hong Kong. The Bill places very heavy responsibilities on the Governor of Hong Kong and his staff. I can only say that such responsibilities could not be placed in safer or more careful hands at this time.
I regret the fact that the Chinese have been critical of the Bill. However, I hope that they will realise that while the need for action of this sort may not have been foreseen when the Joint Declaration was made in 1984, neither was it excluded by its terms if taken before 1997. 1 also hope that they will come to see that in the circumstances we have no alternative if stability and prosperity are to be preserved. Perhaps, too, they will consider whether there is something that they can do to encourage people to stay.
The Minister of State will be visiting Peking next month. A good mutual understanding between the two governments is important in world terms, and certainly is the basis upon which Hong Kong's prosperity must be built. The past 12 months have been unhappy. But time moves on. We should not forget the considerable imagination and statesmanship that China has shown for Hong Kong over many years. Despite what has happened in China, work on future arrangements has progressed —point by careful point has gradually been put behind us. Of course, much may still remain to be done but the immediate problem is to stop the future which is now being built being eroded by this wave of emigration to which the Bill is addressed.
Most of the points that I wish to make have already been made by previous speakers in the debate. However, there is just one point that I should like to add. It concerns the ethnic minorities. I accept

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that their problem is additional to that addressed in the Bill and that the limit on heads of household in the legislation leaves us no room for others. But these people should not be forgotten. I remember very well the assurance given by the noble Lord, Lord Glenarthur, in your Lordships' House in 1986. It was much welcomed at the time. However, times change; of course they change, if they did not do so this Bill would not now be before the House.
I suggest to the Government that, under the new circumstances, the claims of these people to British citizenship should be reconsidered. I do not want to deflect this debate into the complexities of that associated but different issue. I believe that on examination the Government would find that the numbers involved are very small. Surely at a time when we are about to register up to 225,000 people, the opportunity should be taken in addition to tackle this long standing and emotive problem so worthy of your Lordships' attention. However, I leave that aspect of the matter aside for the moment. Perhaps there will be opportunities to talk about it in Committee. In the meantime, I urge your Lordships to support the Bill and to do everything possible to ensure its speedy implementation.
1.24 p.m.
Lord Glenarthur: My Lords, I suspect that I shall follow many of the remarks and aspirations which the noble Lord, Lord MacLehose, with all his experience, made plain in his speech. I warmly support the Bill. I hope that it has a rapid and unhindered passage through your Lordships' House. As we have heard, the haemorrhage of talent from Hong Kong, covering many aspects and sectors of its life and society, has been an increasing worry over recent years. Of course it is true, as my noble friend Lord Ferrers said when introducing the Bill, that Hong Kong has never been a truly static society; indeed, people have always come and gone. However, recent circumstances have increased the number of emigrants to truly frightening and damaging proportions. If Hong Kong's economic position, its stability and the skill of its administration are to be retained, this wastage must at least be slowed down and —it is to be hoped — stopped.
The circumstances which have led to the increase have already been mentioned and I shall not rehearse them. However, during the time that I had ministerial responsibility for Hong Kong, it became quite clear to me and my ministerial colleagues that some method within our own control had to be devised to increase in the people of Hong Kong the confidence to remain there up until 1997 and beyond. Only in that way, coupled of necessity with a most supportive attitude on the part of the People's Republic of China, as the noble Lords, Lord Mishcon and Lord Bonham-Carter, pointed out, could Hong Kong's dynamic entrepreneurial and sophisticated society be maintained —to the benefit of its people and also to the ultimate advantage of the People's Republic of China.
I agree very much with what the noble Lord, Lord Bonham-Carter, said about democratisation and what was suggested by the noble Lord, Lord
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Mishcon —who I am sorry to say is not in his place at present —as a cure-all for increasing confidence. Of course, very considerable progress has been made in democratisation in many different ways over the years. It may not have taken place as fast as some people would have wished; nevertheless, it is there. To that extent it provides part of the confidence which people require, although it certainly does not provide it all.
Many people in Hong Kong have argued long and hard —and I have had considerable exposure to their views over the past few years —that some form of package granting right of abode in the United Kingdom should be brought forward. They say that such a measure would provide the very valid insurance policy which they feel it is Britain's responsibility —indeed, its duty —to give. However, in my view there has been throughout a realisation that it would have been impossible for this country to guarantee the right of abode here to all Hong Kong citizens. Certainly the political realities of pressing for that guarantee have been made clear to the people of Hong Kong over recent months. I think that that has been broadly accepted by them.
I last visited Hong Kong in February, at about the time that the immigration package was announced. There seemed to be a general welcome for it, and that has been made clear to me in many subsequent conversations. The difficulty is that any scheme must to a greater or less extent be divisive. There seems to be no way of getting away from that fact. Nevertheless, I have no doubt, as the noble Lord, Lord MacLehose, hinted, that the methods to be employed by the Governor and the administration in Hong Kong in selecting who will be eligible for right of abode in this country will be as fair, as far sighted, and as balanced as possible.
I share to some extent the concerns expressed by the noble Lords, Lord Bonham-Carter and Lord MacLehose, that provision for only 50,000 heads of family provides a more limited choice than many may find desirable. Acceptable it may be —but only just. It will, perhaps, increase the number of hard cases to be decided. That point was mentioned by the noble Lord, Lord Holme of Cheltenham, in his admirable maiden speech. It it also bound to diminish choice and to make that aspect more difficult. Moreover, from what my noble friend Lord Ferrers said in his opening remarks, it seems that he too understood the force of the argument. I should have liked to see the opportunity afforded to a greater number of heads of family. It worries me that the current severe drain of expertise might be difficult to stem rapidly enough, even given the package of measures announced. A greater number of heads of families might have constrained those whose moves abroad are imminent.
One other factor leaves me a little hesitant —the difference between 50,000 heads of families, as written into the Bill, and a total figure of some 225,000, which is the figure widely canvassed at about the time the package was announced. The mathematics seem a little curious. I am not convinced that the size of the families of the 50,000 will be as great as the governments here and in Hong Kong have estimated. Expectations in Hong

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Kong have perhaps been raised by that overall figure. It concerns me that, to some degree at any rate, those expectations have been sold just a little short.
However, those two small points apart and being acutely aware of the arguments in favour of the proposed scheme, I believe that the Bill is about as good as any of us could have expected. Should an appeals system be introduced or pressed for, there is a real risk that matters could become more complicated than some believe they already are and the selection scheme made much more difficult to set up.
I stress again the real and urgent need, which I have expressed in Hong Kong and which I firmly believe to be the case, that Britain's duty and honour are at stake. The moral aspect, to which the most reverend Primate the Archbishop of York referred, is a real one. Under the circumstances of Hong Kong's reversion to China in 1997, a territory and people so dramatically successful should be given every opportunity to remain so. There is need to give them as much assurance and insurance as possible. We cannot shirk our responsibility for so doing. Others might play their part, notably the People's Republic of China. But we owe it to the people of Hong Kong, who rightly expect it of us, to do all that we can to ensure that the Bill reaches the statute book with all speed.
1.32 p.m.
Lord Monkswell: My Lords, I wonder whether I shall possibly be the only person in the debate who so objects to the Bill that I shall probably upset a number of your Lordships. The Bill has been described as a "sorry little Bill" by the maiden speaker, whom I congratulate on his speech. I describe it in stronger language. It is a tawdry little Bill that does the Conservative Government no honour and unfortunately places Members of the other place in some odium.
I should like to speak about the principle of the Bill, some of the details of the Bill and some of the practical results of the Bill. First, the principle: we are asked to believe that by giving the professional people, the leadership and the leading administrators in Hong Kong the opportunity to leave (the right of abode in this country) we shall persuade them to stay. The logic of the approach escapes me. They might, if they were paid enough money, I suppose, be persuaded to stay until 1997. Then, almost by definition, they would take advantage of their British passports and come to live in Britain. I cannot see that that would be to the long-term benefit of Hong Kong.
I ask your Lordships to ponder on what we mean by citizenship. What do we expect of our citizens? What do they receive in exchange? Citizenship confers a responsibility on the citizen to owe allegiance to, and some respect and support for, the place that gives them citizenship. They owe a responsibility to the "city" of which they are a citizen. To balance that, the city of which they are a citizen has a responsibility to look after its citizens.
If someone in Hong Kong has such a citizenship of this country, for which institution or group of
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people will he or she be working? Whose best interests will that individual be seeking? Will he or she be seeking the best interests of Britain or of Hong Kong? If there are 50,000 British citizens in senior positions in Hong Kong with a right of abode in this country, they will owe an allegiance to this country. They will do what is best for this country not what is best for Hong Kong. I am not sure that that is what we should be doing in our position of responsibility vis à vis Hong Kong, because of our historical links with that, effectively, city.
The whole process of conferring a limited number of citizenships out of the total population of Hong Kong is a nonsense. What we ask the British people, the people of Hong Kong and the people of China to believe is an illogicality.
I shall now touch upon a couple of points within the Bill which grieve me. The first relates to Schedule 1, Paragraph 5(1)(c), which authorises:
"the Governor to decide at his discretion between persons equally qualified under the scheme".
How will the Governor make that decision? It is an open invitation to bribery. Then, sub-paragraph (2) provides:
"A scheme may also in particular include provisions authorising the Governor to make a recommendation in respect of any person who, having regard to such matters as are specified in the scheme, he considers should be recommended in view of his special contribution to the economy of Hong Kong".
Apart from the bribery aspect, we are asking the Governor to discriminate in favour of wealthy people. The concept that British citizenship (the right of abode and the right to vote in our elections) can bought by and sold to the highest bidder is objectionable.
Lord Glenarthur: My Lords, perhaps the noble Lord will allow me to intervene for a moment. It is illuminating to hear what he has to say. I wonder whether he could tell the House if he has visited Hong Kong and, if he has, when his last visit was.
Lord Monkswell: My Lords, I have not had the pleasure of visiting Hong Kong, and I am not sure that I ever shall. I do not believe that that is necessarily relevant. If we are expected to make decisions affecting people in foreign countries, is every Member of the House and of the other place to be flown around the world to get a personal view on the situation? I think not.
Another point about the detail of the Bill that concerns me is contained in Schedule 2, paragraph 3. The provisions there appear to place a restriction on whom a British citizen may marry. I find that rather objectionable. We talk about living in a free society, yet we place that kind of restriction on people. I find that totally objectionable.
I now turn to the practical implications of the Bill. What, effectively, will the Bill do? We have heard that emigration from Hong Kong has risen from 20,000 to 40,000 a year over the past nine years. We have also heard how a large proportion of those emigrants can be described as key professional people. I suggest that this Bill is nothing more than a raiding party which effectively seeks to obtain for this country some of the rich pickings in terms of

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highly-qualified people who are emigrating from Hong Kong. In that respect, it has nothing to do with support for Hong Kong but everything to do with supporting the United Kingdom economy.
The need for that support results from the lack of education and training that has prevailed over the past 10 years of Tory Government. We have to find skilled people from somewhere and 50,000 Hong Kong Chinese with professional qualifications, skills and aptitudes will no doubt help a little. Money will change hands. I wonder what the going rate for Hong Kong British citizenship will be and where that money will end up. I suspect that a great deal of it will end up in the back pockets of senior Tory politicians.
I wonder which way these new British citizens will vote when it comes to an election. I calculate that there will be something like 100,000 voters involved, which is equivalent to at least three extra MPs. I object to the prostitution of British citizenship for the benefit of the Conservative Party.
Lord Harris of Greenwich: My Lords, I am not a Member of the Conservative Party. The noble Lord has not done credit to his case by the latter observations in this speech.
1.42 p.m.
Lord Geddes: My Lords, using the noun "friend" in a context perhaps wider than that usually used in your Lordships' House, I should like to congratulate my noble friend Lord Holme of Cheltenham on a quite outstanding maiden speech. He and I spent an extended period together about 20 years ago at a certain educational establishment on the banks of the Charles River in Massachusetts. I know at first hand of his very considerable ability. Though I shall not guarantee always to agree with him politically, I much look foward to hearing him on many future occasions in your Lordships' House.
I apoligise to my noble friend the Minister and to the House if I have to leave before the end of this debate. I have a long-standing engagement elsewhere in London at four o'clock. Therefore, should this debate run beyond 3.30 p.m. I shall be unable to stay for what surely by then will be the winding-up speeches.
I congratulate the noble Lord, Lord Monkswell, most sincerely. It is the first time in 15 years in your Lordships' House that I can say quite sincerely that I disagreed with every single word that he said. Then to rise after an interjection from my noble friend Lord Glenarthur to say that he has never even visited Hong Kong does a great injustice to himself and to his party and certainly it is rude in the extreme to Hong Kong.
I should like to register my very firm support for this Bill. My only reservation is that I would have liked it to have gone a little further. As other noble Lords have pointed out today and as I have pointed out on previous occasions, the core of professionals, managers and those with technical skills on whom Hong Kong basically depends for its undoubted success amounts to about 300,000 people. That is the realistic number which I had hoped we would be
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considering. Nevertheless, 50,000 people and their dependent families is an excellent beginning, particularly, as has been said, unlike the case with Canada, Australia and the United States, this Bill does not require residential qualification outside Hong Kong.
I applaud the Government's courageous stance in the teeth of strong opposition not least from among its own ranks. The Hong Kong authorities are confident that the Bill will staunch the current 50,000 to 60,000 haemorrhage of talented people provided the Bill receives Royal Assent in the very near future. I most sincerely hope that it will.
Today I wish to revert to an issue that I have raised on a number of occasions in previous years. The noble Lord, Lord MacLehose, concentrated on it towards the end of his speech. I refer to the future of the non-ethnic Chinese minorities in Hong Kong. These people are British dependent territory citizens. It is estimated that they number about 11,000 persons in total; that is to say, about 3,300 heads of households. The Foreign Affairs Select Committee report of last year found that they,
"are inadequately provided for by the Joint Declaration".
Yet nothing has been done in the Bill to alleviate the plight of these people. As far as I am aware, they are not eligible for Chinese nationality and neither is the British national overseas passport transmissible after two generations. Thus many of them have no rights of residence in this or any country other than Hong Kong. Therefore, statelessness is a real possibility for these people.
The Chinese have made their attitude to those who do not have Chinese nationality abundantly clear by their reaction to this Bill and its proposals. The only indication that such people have that their situation is recognised is contained in speeches in this House and in another place. The noble Lord, Lord MacLehose, instanced the assurance given by my noble friend Lord Glenarthur in 1986 which at that time was most welcome.
However, that assurance and undertaking given in 1986, though repeated since, pre-dates the tragic events of June 1989 and pre-dates this Bill and the Chinese reaction to it. I do not think that it is going too far to say that we now have to recognise that we can no longer repose the same amount of trust and confidence in the Chinese leadership than perhaps mistakenly we did then.
I also have a series of what I fear to be rhetorical questions for my noble friend. I say "fear to be" because while they are questions to which good responses should be available, I fear that I may not receive substantive answers. In terms of the statement made by my noble friend Lord Glenarthur, what constitutes "pressure to leave Hong Kong"? How shall we be able to discover whether these people are suffering this pressure? Who will decide? How, as a practical matter, will we be able to carry out their removal from Hong Kong? Perhaps most importantly, how will this Government make their assurance binding on future governments? I ask the noble Baroness, Lady Ewart-Biggs, whether, if needs be, any future Labour Government would honour that assurance?

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I am not today campaigning, as I might be tempted to do, for the right of abode in order to give some I million BDTC passport holders —that is, 300,000 heads of family plus their dependants —the right of abode or British citizenship. However, I should like to point out that, because of the way the Bill is drafted, the total numbers involved are necessarily somewhat uncertain. As my noble friend Lord Glenarthur has pointed out, the figure of 225,000 is estimated to be a maximum. On the other hand, we have heard figures of 250,000 mentioned. In that context an additional 11,000 non-ethnic Chinese, whose case even aroused the sympathy of my right honourable friend the Member for Chingford in another place, would not seem to be a significant increase.
Even the figure of 3,300 heads of family is almost certainly higher than is relevant in this context, as some of them will already have other passports and others may well be granted British citizenship within the 50,000 envisaged in this Bill. We are probably talking of no more than an extra, say, 2,000 heads of family. As the noble Lord, Lord MacLehose, has done, I urge the Government most strongly to consider the fate of these people. They are our responsibility and we should not bear that responsibility lightly.
Reverting to the Bill and indeed to Hong Kong on a broader front, I hope I may add my voice as strongly and as powerfully as I can in supporting and indeed complimenting Sir David Wilson, the Governor of Hong Kong, on the way he has handled, and indeed is handling, all the many highly complex issues relating to Hong Kong. I have absolutely no doubt that he will continue in the same vein in the future and in particular in his exercise of integrity with regard to the discretion given to him under this Bill.
1.52 p.m.
Lord Tanlaw; My Lords, it is always a pleasure to follow the noble Lord, Lord Geddes, and other noble Lords who have much experience of Hong Kong. As a result most of what I have prepared has already been said by other noble Lords, including the noble Lord, Lord Holme of Cheltenham, in his marvellous maiden speech. I am sure we all look forward to hearing more of what he has to say on future occasions. The noble Lord made reference in particular to the new airport. I hope to mention it also a little later on.
I wish to declare an interest in that I am an outside director of a company that employs more than 5,000 people in Hong Kong. I was in Hong Kong earlier this year when this Bill had its Second Reading in another place. I was able to gauge at least some initial reactions of various sections of the community in Hong Kong. I prefer to call this Bill the passport Bill. It is a minimal piece of legislation. In my view it in no way compensates for the unfulfilled obligations that Britain has towards the people of Hong Kong. However, as the noble Lord, Lord Holme, said, it at least acknowledges them. Therefore I wish to support it.
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The debate on Second Reading in another place was seen in Hong Kong as rather unimportant. Many different political views were expressed, but in what was an interesting debate it was interesting to note that all the opinions concerned the importance of the impact of this Bill on people in Britain. Little was said about its impact on people in Hong Kong, although the usual remarks were made about stability. I feel that this Bill was spawned by the British Nationality Act 1981. I do not like to disagree with the noble Earl, Lord Ferrers, but, as I said at the time of the passing of that Act, it was not about nationality of British citizens as its title misleadingly implies; rather, it was about the control of immigration into this country of those British passport holders in Hong Kong and elsewhere who were entitled to a right of abode in Britain. I opposed the Act at that time for that very reason.
There were also those who opposed this Bill in another place. They might have done so out of some misguided form of patriotism or out of political opportunism. Neither of those two factors has shown up in the debate today, thank goodness. This debate provides an opportunity to obtain some much needed clarification on certain points contained in the Bill. For instance, I am still not clear on the position of non-British spouses of British citizens working in Hong Kong. That was referred to by the noble Lord, Lord Monkswell, in his rather objectionable remarks. He mentioned that point, however, and I wonder whether the Minister can say whether those spouses will have the same rights as any other spouse married to a British passport holder. If that is not the case, I hope the Minister will explain why.
Perhaps I have not read the Explanatory and Financial Memorandum very well. However, I cannot see how any distinction can be fairly made in situations of this kind. I asked that question in another form during the passage of the British Nationality Act, but I was not given a reply. Therefore I shall ask it again. Can the noble Earl make a distinction in any terms between a holder of a British passport who resides in Hong Kong and a British passport holder who resides in, say, Westminster? If he cannot do so, then how can a spouse of such a passport holder be judged differently simply because he or she lives in Hong Kong?
Schedule 2 to the Bill would indicate that special application has to be made to the Governor of Hong Kong for his recommendation before these rights can be granted. Perhaps the noble Earl can confirm that. Will he also say on what basis this distinction has been made? The only distinction or difference I can see is that the majority of residents of Hong Kong are of the same race, colour and religion as my lady wife, which happens to be different from the majority of British citizens. Is this, therefore, the basis on which the special application has to be made to the Governor of Hong Kong for the spouse of a British passport holder resident in Hong Kong? If that is so, that is a direct contradiction of what appears to be stated in Clause 2(3) of the Bill which refers to Section 42 of the original British Nationality Act which specifies that discretion must be exercised

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without regard to "race, colour or religion". I may have this matter all wrong and perhaps the Minister can put me right. I sincerely hope that I have got it wrong and that it can be clarified as some concern has been expressed to me on this point.
There is also the matter of the points system. Some of us may just be able to remember the points that were awarded for rations during the war. One had to clock up a certain number of points to obtain a steak, a piece of mutton or a rasher of bacon. On trying to read through the Explanatory and Financial Memorandum, the same thoughts run through my mind about how to get the right number of points to get the various pieces of paper which can get me what I want. However, there is a sad aspect to the points system and it has been raised by a number of noble Lords. The ethnic minorities do not even get a ration book. I am taking the analogy one stage further. They do not even have any points to start with. That has been mentioned but overlooked time and time again. I hope that when the application of the so-called points system is put into operation, some kind of understanding of the situation of ethnic minorities will be taken into consideration.
Another point has been made by a number of noble Lords about assessing the Britishness of firms to entitle people to a few more points than have been indicated to date. One need not be legalistic about this. I am sure there can be a way of deciding how British a company is —for example, whether it is registered in this country or elsewhere. That is common sense for these people which have to make Hong Kong work in a commercial sense. I hope that that point will be taken into consideration when this Bill is implemented.
Other noble Lords have referred to the age bar. There will be a need for executives in both the administration and in businesses to have had experience of some of the rougher times that have occurred in other parts of the world as well as having experience in Hong Kong. They need such experience to see their companies, or administrative sections of the Government, through what could be difficult periods. Young men in their thirties and forties may be good at making money and imaginative in many ways, but they are not the right people to hold on to stability and to justify what they are doing without asking too many questions during a difficult period of upheaval or transition. I hope that that point will also be taken into consideration when the practical aspects of the Bill are considered.
Many people have spoken about emigration, saying that everyone is leaving Hong Kong for other, safer countries because of the uncertainty about the future. That is given as one of the main reasons for the Bill; it is intended to give confidence. However, as I have said before, only a few people are affected by it. The majority have to stay, keep their jobs —one hopes —and look to the future for their families and themselves.
I have said in previous debates on Hong Kong and I shall say again that companies and government departments must have a system for further training.
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There must be properly set out ladders for the enhancement of individual careers that will span beyond 1997. The new regime which comes in from mainland China will not bring new management skills; quite the reverse. It will have to lean very heavily on the management skills available in Hong Kong, whether to operate the high-speed lifts in the skyscrapers or the complex financial structures on which many companies in Hong Kong are based. It is essential that each company should look to its own people and give them some security for the future.
The syndrome of the packed suitcase at the bottom of the stairs, the passport ready and the air ticket already booked has to go. The majority of people have to decide to stay on in Hong Kong. They should unpack their suitcases, cancel their air tickets and convince themselves that they are staying.
I do not know what will happen. I am neither optimistic nor pessimistic, but Hong Kong has to work. The only way that it can work is not through the politicians or through any policital freedoms which may or may not be won or written on pieces of paper; it has to work as an international business capital, a business capital with a future and with a future for its people. The extension of the airport or the container port are essential capital programmes which it must be agreed should be undertaken now. They must be seen to be undertaken now and must span beyond 1997.
When the right honourable gentleman the Minister of State goes to Peking he should make it clear that the Government of the People's Republic of China, whatever they may or may not be doing politically, must come down to earth regarding their capital programmes for Hong Kong. If the role of Hong Kong as an international business capital is undermined during the next five or six years everyone in Hong Kong will suffer— economically, politically and in any other way that one cares to mention. That has nothing to do with passports to allow a minority to come back to this country.
When I was in Hong Kong the analogy of the main river and the well of plenty was explained to me. The politics of mainland China can be seen as a great main river that determines its own course, pushing the banks back here and there, but it has nothing to do with the well of plenty in Hong Kong. My worry is that the politics of the mainstream river will burst its banks and muddy the waters of the well so that it is no longer a well of plenty.
Those people who advocate democracy in Hong Kong must be very careful in their choice of phraseology. It is essential that it is accepted that the freedoms that have been won or tacitly accepted, without any form of democracy, by this Government and the Government of Hong Kong for the past 100 years will continue. They must not be mixed up with slogans about democracy which can be confused with the political developments in mainland China. That has nothing to do with Hong Kong. If there is confusion in the minds of those who run mainland China which leads them to believe that Hong Kong is becoming a political as well as a financial centre, that would endanger not only the businesses but also the lives of everyone there. Therefore, I hope that

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that point can be clarified and that there will be restraint in the terminology used. There should be determination that those freedoms which have made Hong Kong great will continue well beyond 1997.
2.4 p.m.
Lord Eden of Winton: My Lords, the noble Lord, Lord Tanlaw, has treated us to a most interesting and original speech. I am delighted to be able to follow it and to endorse the noble Lord's final words. It is extremely important that we move forward carefully and cautiously in relation to the progressive democratisation of institutions in Hong Kong. It can so often become the excuse for more heady reactions and for excessive demands which would be counter-productive in the context of Hong Kong.
As was noted on another occasion when Hong Kong affairs were debated in your Lordships' House, in relation to democracy and the progressive move towards wider popular representation and the means for achieving that in Hong Kong institutions, it is essential above all that whatever is established in Hong Kong endures in that form beyond 1997. If any changes were to be introduced today which gave encouragement in the short term to individuals calling for such moves but which did not endure beyond 1997 it would be a grave error of judgment on our part. Therefore I hope that those making pleas from the Labour Benches and in particular the noble Lord, Lord Mishcon, will come to recognise the overriding need for care and caution.
That is very much a view expressed to me by OMELCO, not least by its distinguished leader. I am sure that all Members of your Lordships' House would wish to express their warmest congratulations to her on the significant honour bestowed upon her in the recent Birthday Honours. It is richly deserved. I am sure that she would be the first to accept that it is also a recognition of the responsible role that the legislative councils have played during the course of the very difficult months since the summer of last year.
It would be wrong to attempt to widen the scope of the Bill. I accept the point made by the noble Lord, Lord MacLehose, which was referred to by my noble friend Lord Geddes, about the ethnic Asian minorities. If we can do something for them, it would be worthwhile and correct on our part. But I do not think that this Bill should be used as an attempt to encompass too many differing aspects of immigration.
As my noble friend Lord Ferrers reminded the House when he presented the Bill for Second Reading, it is not a general immigration Bill. It is a nationality Bill with very limited scope both in time and objective. It is not designed to go beyond 1997; it is designed to deal with a requirement for our immediate and urgent consideration. It is limited also with regard to the numbers that it attempts to accommodate.
Like others of my noble friends who have spoken, I could have wished the numbers to have been much greater. I believe that they could and should have been much greater. We have been advised against offering a cheque which we should not be able to
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honour. I should certainly be prepared to honour the cheque should it be called on in the case of the numbers contained in this legislation. I should have been prepared to go for a larger figure. Indeed, I pressed for a much larger figure in our earlier deliberations on this subject.
I totally disagree with those whose voices have been raised, particularly in another place and regrettably very often from Benches on which I sat when I was a Member, to call for tighter curbs and smaller numbers or to warn people against the threat of being engulfed —the word used was "swamped" —by potentially large numbers of immigrants from Hong Kong into this country. That is a grotesque misrepresentation of what would take place. It is quite clear to me that most of the speeches were made for purely partisan, narrow-minded constituency reasons. They had little relevance to the realities of the situation in Hong Kong or what would be likely to develop in this country.
If those people were to come to this country, being people of considerable skill and expertise, as has already been underlined, they would contribute substantially to the economic prosperity of this country just as they have been and are now contributing to the prosperity of Hong Kong. We are right to have this Bill before us. I congratulate the Government on persisting with it. In the face of dire threats in another place, they could have taken the easy way out. But that would have been shameful. I am grateful, as I am sure are the people of Hong Kong, that the British Government have not betrayed them.
In the numbers of those who are currently leaving Hong Kong that my noble friend gave to your Lordships' House, he made clear the urgency of the situation, expecting something like 55,000 to leave Hong Kong in the year. They are not just people from any walk of life. That number includes people with highly specialised skills. Something like 13 per cent. of Hong Kong's information science professionals, who include computer experts, have left Hong Kong. That is a drain that cannot be long sustained. One cannot see people of such calibre and expertise leave the colony and expect its prosperity to continue as it has done up to the present time.
Yet we have an obligation under the terms of the Joint Declaration imposed upon Her Majesty's Government to ensure the prosperity of Hong Kong right through to 1997. We mean to fulfil that obligation. This Bill is an earnest of our intention so to do. It is one of the essential instruments to enable us to achieve that objective. That is why I find it hard to understand the attitude of the Chinese Government in Beijing in criticising this measure. If this Bill is in anybody's interest, it is in the interest of the People's Republic of China. I hope that before long mature judgment will prevail in Bejing. I hope that that they will get away from their own fears which have governed them since June 1989 and that they will learn to recognise the reality of the situation and the valiant effort that is being made by the British Government to honour the terms of that Joint Declaration.

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I was greatly encouraged to hear the interesting speech of my noble friend Lord Sharp, in which he referred to a recent conversation that he had had with the Chinese Premier. What is encouraging is the reaffimation that we have had once again that it is the intention of the Beijing Government scrupulously to honour their responsibilities in the Joint Declaration.
Some of the terms of the Joint Declaration are very relevant to our discussion today on the Bill. The Joint Declaration gives firm assurances that after 1997 there will be a right to work in Hong Kong; a right of abode in Hong Kong; and a right to travel to and from Hong Kong. Those are some of the provisions that I am sure will be honoured. They have some relevance for the people who may not now be included in the provisions of the Bill. Those people who may not fall within the compass of the points scheme —the selective scheme —and may as a result prove to be disappointed, will still have available to them the provisions of the British Nationality Act 1981, although admittedly they will require a resident period to be met in this country should they wish to come to this country.
The Bill seeks only to provide for a small number of people who have an important and significant contribution to make to the stability and prosperity of Hong Kong. It is a Bill designed to encourage those people to stay in Hong Kong. I do not believe that any of your Lordships would wish the significance of this measure to be exaggerated. But neither do I think that it should be minimised. It is not fair to describe the Bill as a paltry measure. It is not. It is a measure of some considerable importance.
However, the true significance so far as concerns the future of Hong Kong is not so much the Bill, but the attitude of China. China more than any other country has the responsibility for the continuing prosperity and stability of Hong Kong. We have the moral obligations which we are doing our best to discharge. But China can ensure that Hong Kong continues to be the economic success that it has been up to this time, and it is in China's own interest to ensure that that is so.
2.17 pm.
Lord Thurlow: My Lords, all noble Lords will endorse what the noble Lord, Lord Eden, has just said: that the only factor that will settle the future of Hong Kong in the long run is the attitude of the People's Republic of China; and that it is indeed very much in the interests of the People's Republic of China that Hong Kong should continue to thrive. We seek to help Hong Kong to get through the immediate difficult years that lie ahead. This Bill will not solve everything. But the package is designed to make people stay. I strongly support the Bill and I hope and believe that it will succeed in its aims. I hope that it will be implemented as soon as possible.
As the noble Lord, Lord Mishcon, suggested, Hong Kong can be regarded through the perspective of the series of settlement of dependent territories that started in 1947. This has covered more than 40 territories, of which some 20 were large territories with large populations. There are certain constraints
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in common in relation to all those settlements. They are constraints on the capacity of the British Government to determine the conditions of transfer, given the problems of satisfying the different interests affected, whether internal or external. There has never been an option for the United Kingdom Government to impose an ideal solution. We have never been able to do more than try our best to secure the welfare and progress of the citizens of those territories. That has always, and necessarily, involved a measure of compromise between what we saw as being in the best interests of all concerned and what was negotiable. To put the point crudely; British responsibility for a larger territory cannot be terminated without some measure of future risk for someone. Final settlements cannot be assessed in terms of simple right and wrong, and sweeping assertions of British moral obligations to the inhabitants can have only general validity. It is satisfactory that the Bill acknowledges the important specific obligation in relation to sensitive groups in Hong Kong.
We know that our options have been strictly limited. The moral considerations have been referred to by many noble Lords. I see no ground to regard as eligible for right of abode in this country the vast majority of the population of Hong Kong —that is, those who, in comparatively recent years and with full knowledge of the date of the end of the lease on the territories, chose to enter Hong Kong in pursuit of their own economic and social interests.
I am not qualified in the numbers game. However, the number authorised in the Bill appears to be too low and too heavily influenced by exaggerated fears about our contingent absorptive capacity. I endorse the comments made by the noble Lord, Lord Glenarthur. Like the most reverend Primate, I hope that in due course the number will be reconsidered and possibly raised in the light of experience.
It is important that the Bill is implemented as soon as possible and without avoidable delays. Any provision for appeals, as has been suggested in some quarters, is totally unacceptable on grounds of timing. Although I am not a lawyer, I suspect that on those grounds there are strong objections to the proposals put forward by the noble Lord, Lord Irvine, for judicial review. I hope that the Bill will receive your Lordships' support as soon as possible and that it will achieve its aims.
2.25 p.m.
Lord Derwent: My Lords, as some of your Lordships may be aware, I am closely associated with a prominent Hong Kong-Chinese business group and I declare my interest.
I should merely like to stress two points and make one comment on the details of the scheme. First, all my friends in the Hong Kong business community, which provides most of the jobs upon which the population depends, warmly welcome the Bill as a limited but real contribution to the restoration of confidence.
However, we welcome it only because we believe that it will help to keep certain of our key personnel

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in the territory. We in the business community, for our part, will do our best to persuade those of our employees who receive passports to remain in our employment and, therefore, in Hong Kong. We know already from the reactions of many of those most likely to receive passports under the scheme, that they have every intention of staying if—but in some cases only if—they are successful in obtaining them.
Secondly, I too believe that the Government are to be warmly congratulated on persevering with the Bill in spite of the political problems which it provoked in this country. However, in the same context, we very much regret that the Bill should have caused Hong Kong to become the object of party political controversy in another place.
In recent years it has been a matter for congratulation that British policy towards Hong Kong has been broadly bipartisan or tripartisan. From the point of view of restoring confidence in Hong Kong and also from the point of view of negotiating with Beijing, we believe that it is important to re-establish that bipartisan approach as soon as possible.
At least in your Lordships' House all parties have sought to debate Hong Kong affairs in a constructive, helpful and non-party spirit. For that reason, I warmly welcomed the statement of the noble Lord, Lord Mishcon, that, while he does not agree with the Bill, he will not seek unduly to delay its passage and, while he disagrees with the method chosen by the Government to restore confidence, he will do all he can to work towards the restoration of confidence in Hong Kong.
However, I should like to ask the noble Baroness, Lady Ewart-Biggs, to take this opportunity to give the people of Hong Kong one specific assurance. To my mind it is unthinkable that once an individual has been granted British nationality under the Bill if it reaches the statute book, a future government should seek to remove that nationality from him. However, there has been so much speculation on the subject in Hong Kong, where people do not always totally understand our procedures, that I very much hope the noble Baroness will confirm that her party, if it came to power in the future, would have no such intention, as I feel sure is the case.
It had not been my intention to comment upon details of the draft scheme. However, in view of the Minister's specific reference to extra points being awarded to employees of British firms, I believe that I should point out that that provision poses considerable problems of definition. Unfortunately, if the scheme is to be transparent, which is everybody's intention, the term will have to be defined. I share the view of my noble friend Lord Sharp of Grimsdyke and the noble Lord, Lord Tanlaw, that individuals who have personal British links, training or background should receive extra points.
I also share the view that Britain should look to further its own commercial self-interest. However, business between Hong Kong and Britain is conducted by both British and Hong Kong firms. Surely the test should be whether the individual applicant is involved in activities which further
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British commercial interests rather than whether his employer for the time being—and people change jobs —happens to have his head office in London or in Hong Kong or, indeed, elsewhere. That is a question to which we shall return in Committee. However, I thought it right to draw your Lordships' attention to the fact that the question is not as simple as it at first sight appears.
Having mentioned that point of detail on the scheme, I wish to make it clear that I support the Bill without reservation and thank the Government for its introduction. The Bill will not of itself assure the future of Hong Kong, but it is a valuable lifeline at a difficult moment.
2.30 p.m.
Lord Monson: My Lords there are two separate, albeit intertwined, themes to the Bill which are neatly encapsulated in its title. The first is British nationality and the second is Hong Kong. I shall deal briefly with the second.
Many, perhaps most, noble Lords who have spoken today have a profound and thorough knowledge of Hong Kong and often of China. In contrast, although I know South-East Asia to some extent —a region of which I am very fond —I have not yet had the privilege of visiting what is known as East Asia, which includes Hong Kong and China. Therefore, although like most concerned people I take a considerable interest in the colony and sympathise with the worries and concerns of its inhabitants, I feel one must leave it to the experts on the region to determine not only the technicalities of the Bill —for example, the merits of the points system —but above all, how essential the Bill is for the future wellbeing of Hong Kong. The verdict of the experts in this House and in another place seems to be that it is essential.
Like many people, I have niggling doubts as to whether the Foreign Office has over the years secured the best possible future for the people of Hong Kong. Whether justified or not, those doubts are now irrelevant. We must deal with the situation as it exists today and not as it might have been.
That brings me to the second aspect of the Bill, the British nationality aspect. which could be subtitled. "the immigration aspect". I must take issue with the noble Earl, Lord Ferrers; it is quite wrong to base policy on the confident assumption that the Bill is merely an insurance policy on which a claim is never likely to be made. One hopes that a claim never will have to be made, but for the purposes of the Bill one must envisage a worst case scenario, to use current jargon.
That being the case, it would be unfortunate if the impression were given that this House was in any way adopting the élitist attitude which characterised the British establishment, including the Churches, in the 1950s and early 1960s. Those who lived in quiet and salubrious areas and were therefore unaffected by the mass immigration of the time—apart from benefiting from the cheap labour that it initially provided —were utterly contemptuous of the fears and worries of ordinary

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people living in poorer districts who were naturally adversely affected by such a massive wave of immigration.
We should therefore show ourselves to be more than willing to consider carefully the arguments of those whose instincts arc to oppose the Bill on the grounds that it would permit further immigration into this country. The main arguments against the Bill advanced by those in another place, who almost certainly represented a larger constituency in the country than the votes in the Division Lists would suggest, were, first, that the Bill breaks Conservative election pledges. That is undoubtedly true. However, the British electorate is sophisticated and cynical enough to recognise that all governments of all persuasions and in all countries—one only needs to look at President Bush earlier this week —break election pledges from time to time. Therefore although it is certainly embarrassing for the Conservatives, given that their opposition to immigration played a considerable part in their election victories in 1979 and 1983, that in itself is not a very powerful argument against the Bill.
The second argument is that we are a very overcrowded country, Again, that is perfectly true. Mr. Julian Critchley, writing not in his capacity as honourable Member for Aldershot but as a semi-professional journalist, asked sarcastically whether Mr. Norman Tebbit had visited Hadrian's Wall recently, after Mr. Tebbit had spoken about the country being overcrowded. More to the point, one could ask Mr. Critchley whether he had recently tried to drive even one-tenth of the way round the M.25. I have always maintained that the quality of life in this country would be immeasureably better if we had the population density of France or the United States. Having said that, I would guess that the maximum numbers that might be involved as a result of the Bill, if the worst came to the worst, would be just about manageable. In any case, this time round, it would be the turn of the indigenous middle class rather than the indigenous working class to bear the brunt, mainly in the form of higher house prices for first-time buyers.
The third argument advanced in another place was the dual loyalty argument. The "cricket spectators" analogy may not have been an ideal choice. I have noticed over the years that Mr. Tebbit frequently spoils a reasonable case —even an excellent case —by choosing the wrong analogy or metaphor, thereby shooting himself in the foot. Nonetheless, the problems that can often stem from a conflict of loyalties are real problems and the subject should never be swept under the carpet.
More often than not there is no problem. With hindsight, it is obvious that it was totally unecessary to intern so many Italians during World War II. Most of them were entirely apolitical and very few indeed had any enthusiasm for Signor Mussolini. The Japanese-Americans, who were situated mainly in California and elsewhere on the west coast, were treated even worse; again, totally without justification, since theirs were loyal, hard-working and law-abiding communities. However, a considerable number of Germans living outside
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Germany in the 1930s were infected with enthusiasm for the Nazi movement; in particular those living in Latin America. Those people caused considerable problems for the allies. And although the great bulk of Irish people living here have no time whatever for the IRA, there are still in Britain enough passive supporters of that terrorist organisation to provide an adequate number of safe houses for IRA cells operating in this country.
However, having said that, I cannot believe that there would be any problem at all with the, literally, select group of people with whom this Bill is concerned. Therefore, while it is certainly always legitimate to raise the question of possible dual loyalty, I am sure that it does not apply in this case. Consequently, of the three main objections, only that relating to potential overcrowding has much force; and then only if—heaven forbid —things should go very wrong in Hong Hong.
Neither side in this debate—I do not mean today's debate but the overall debate on this topic —has morality totally on its side. If the gamble which this Bill represents comes off, obviously all parties will benefit enormously. However, once you have ensured that those categories most at risk in Hong Kong are given passports—that is, senior police officers, civil servants, and so on —there is nothing particularly moral about granting a passport to A but denying one to B, or granting a passport to Y but not to Z. In other words, the issues faced are essentially pragmatic ones.
There is one final factor to bear in mind. We know that, if a referendum had been held after World War II on whether mass immigration into Britain should be allowed, the answer would have been a resounding "no". However, if a referendum were to be held today on whether a strictly limited number of educated and respectable Hong Kong citizens should be allowed in, I very much suspect that there would be a majority in favour—perhaps not a large majority, but a majority all the same. It is important to bear that in mind. It can only be a guess, of course, but I should be prepared to place good money on it.
With that in mind, and because the gamble that this Bill represents seems worth taking in view of the potentially enormous prizes to be gained by all parties if everything works out well, I have come round to accepting that the Bill is indeed worthy of support.
2.40 p.m.
Viscount Mackintosh of Halifax: My Lords, I too should like to add my congratulations to the noble Lord, Lord Holme of Cheltenham, on his maiden speech. We look forward to many further contributions from him in the House.
Having recently returned after spending two years in Hong Kong, I believe that the Bill must be regarded as an expression of the Government's responsibility to the citizens of Hong Kong. That it should be put forward as a measure to stem what has been known as the brain drain or to curtail substantial emigration from Hong Kong is misguided. From my experience of living and working among those who perceive themselves to be

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the most vulnerable following the handover to China in 1997 —the professional and managerial classes —I maintain that, a British passport or not, those people will seek to ensure a stable future for their families now, outside Hong Kong.
In a particularly Chinese way, that would require resettlement in a country where those people could establish a permanent lifestyle for successive generations. I consider those feelings to be widespread among the professional and managerial classes. Such people will not remain in Hong Kong unless they are absolutely certain that they will be able to live and work there in the long term, even if they have an escape route —a British passport. Why would they wish to spend six or seven years building up a career in Hong Kong, establishing a family environment and putting their children through the Hong Kong educational system if they do not have confidence that they will be able to remain in Hong Kong after 1997? The entrepreneurs and the owners of businesses will remain in Hong Kong, but the Bill is not aimed at them. It is aimed at the managerial and professional people who are the most likely to leave now.
The level of confidence required to keep those people in Hong Kong is not enjoyed by many at the moment. It is certainly not possible for the British Government to influence that confidence through this Bill alone. That confidence is primarily a matter for the Peking Government and, if the British Government wish to increase confidence in Hong Kong, they must use all their influence to impress upon the Peking Government the need to restore confidence in Hong Kong.
As my noble friend Lord Ferrers said in his introductory speech, the Joint Declaration is viewed from this country as a diplomatic triumph. Looked at from the crowded streets of Hong Kong, it is regarded rather differently at the current time. When viewed as an acknowledgement of the Government's responsibility to the citizens of Hong Kong, I add my support to the extension of British citizenship to heads of households in Hong Kong. I shall therefore support the Bill, despite my lack of confidence that it will achieve the increase in confidence in Hong Kong that the Government desire.
An aspect of the Bill with which I am unhappy involves the treatment of spouses. It has been confirmed in recent correspondence from the Home Office that ordinarily the Hong Kong Chinese spouse of a British citizen may qualify for right of abode in the UK only after three years' residence in the UK, living together as husband and wife. I was pleased to hear my right honourable friend reiterate the statement by the Home Secretary in another place on 19th April this year that the Hong Kong Chinese spouse of a British citizen would have no difficulty living here during the lifetime of that British citizen or, given certain provisos, in widowhood.
If that is the case, why is it necessary to grant further passports to the spouses of citizens to be created under the Bill? How can those two categories —the Hong Kong Chinese spouse of an existing British citizen and the Hong Kong Chinese
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wife of a British citizen to be created under the Bill —be treated differently? My right honourable friend has gone some way to alleviating the fears and concerns of the British expatriate but he has not gone quite far enough.
I strongly recommend that this anomaly be corrected and that automatic citizenship be granted to this category of Hong Kong citizen —the spouse of an expatriate British citizen —who, only since 1981, has been required to spend three years resident with his or her spouse in the United Kingdom before achieving the right of abode here. The total number affected is only around 300. If the Government reiterate that this measure is unnecessary because they will have no difficulty in living here, surely the granting of citizenship to the spouses of the 50,000 new citizens to be created under the Bill is also unnecessary.
I hope that my right honourable friend feels able to assure the House that there will be no discrepancy in the treatment of Hong Kong Chinese spouses of any British citizen. If the Bill is to remain in its present form, then, to be totally consistent, the spouses of British expatriates should be given automatic independent right of abode in the United Kingdom. If it is felt that the three-year rule of living together should remain, this should at least be satisfied by living together for three years in Hong Kong, not just in the United Kingdom. That would not disadvantage the Hong Kong Chinese spouse of a present British citizen to the same undeniably iniquitous extent as at present.
Although I do not share my right honourable friend's belief in the influence that the Bill will have on confidence in Hong Kong, I nevertheless feel that it is a step in the right direction. I give it my support.
2.46 p.m.
Lord Harris of Greenwich: My Lords, I should like to say at the outset —and on this point I believe there will be agreement on all sides of the House —that it was a pleasure to listen to the maiden speech of my noble friend Lord Holme. It was a speech of outstanding quality. It is normal, I know, on occasions such as this to say that one hopes that one will soon have the privilege of hearing the noble Lord again. There is no need to worry about that consideration. Given the rather modest numbers of these Benches, the noble Lord will have many opportunities in the relatively near future to participate in our debates.
Both my noble friends Lord Holme and Lord Bonham-Carter explained our general attitude to the Bill. I do not therefore propose to traverse that ground again. Some of the issues will be dealt with in detail in Committee. I want to deal with one or two matters which cause us continuing concern.
The first and central purpose of the Bill, as was said by my noble friend Lord Bonham-Carter, is to establish an insurance policy. The Government have argued that the possession of a British passport by the 50,000 and their families and their right of abode in Britain will promote stability in Hong Kong. We agree with that. Without the Bill, the consequences in Hong Kong could be extremely serious. The

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Government go on to say that they believe that unless the situation concerning our relations with China deteriorates very severely, most of the 50,000 and their families will want to remain in Hong Kong. That point was made by the most reverend Primate the Archbishop of York.
He said —and I agree with him —that the overwhelming majority do not want to come to the United Kingdom in any event. That is right. Quite apart from any other consideration, they would in most cases experience an extremely substantial reduction in their standard of living. This seems to be common ground. But if that is so, why do we limit the guarantees to the 50,000 families? If significantly more people received the guarantee, surely that would promote greater stability in Hong Kong. The guarantee in the Bill is far too limited. Notwithstanding that we have reached a late stage in the passage of the Bill, I hope that the Government will consider the matter once again.
Let us move on to examine for a moment the alternative situation; namely, that all does not go well in Hong Kong. Let us suppose, for example, that our relations with China for one reason or another deteriorate rapidly, that there are further disturbances in China with further massacres of dissidents, and that there is a total collapse of confidence in Hong Kong. Is it suggested that in such a situation we should simply walk away from our responsibilities in the territory? In my view, that would be quite unthinkable. However, what is more relevant is the fact that it is clear that that is not the position of the Government.
On 14th June last year Sir Geoffrey Howe told the Foreign Affairs Committee of the House of Commons:
In the … last resort situation of events overwhelming the people of Hong Kong, then in those circumstances it is, I think inescapable that the United Kingdom with its special responsibility for the territory would be the country to which they would look for treatment as refugees and we would have to try and discharge that responsibility with the help of others".
I welcome that statement unreservedly —that is, so far as it goes. However, it would only grant refugee status to those wanting to leave Hong Kong in the situation that I have described. There would then, presumably, have to be a desperate hunt for countries which were prepared to take large numbers of refugees at the last possible moment. Unless the Government of the United Kingdom offered to take substantial numbers of these people, there would be little prospect of our colleagues in the European Community, or the Governments of Australia and the United States, agreeing to do the same.
Surely all that points in one direction: the wisdom, now, of substantially increasing the numbers of people being guaranteed the right to enter the United Kingdom. If all goes well, the likelihood is that remarkably few people would come to the United Kingdom in any event. However, if all went seriously wrong in Hong Kong, we would be compelled to accept large numbers of refugees in an exceptionally limited time frame. Therefore, by conferring on substantially larger numbers of Hong Kong residents the right of abode in the United Kingdom we would
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both increase confidence in Hong Kong and apply a considerable constraint on the Chinese Government.
I think we should also remember that the Chinese economy is in an exceptionally poor condition. That is one of the reasons—indeed, almost certainly the only reason —why they have agreed to allow Professor Fang to leave his state of imprisonment in the United States Embassy in Peking. The Chinese authorities dislike Professor Fang just as much as Mr. Brezhnev hated Sakharov. He has been allowed to leave the United States Embassy because of the heavy and continuing congressional pressure to maintain sanctions against China. Under pressure from the United States, the World Bank still refuses to resume full lending facilities to China. As a result, many commercial banks are hesitant about offering their money.
In the current condition of its economy, Hong Kong is of immense economic significance to China. I believe that is one ground for optimism about its conduct over the next seven years. By being forced to recognise that if all went disastrously wrong in Hong Kong there would be a wholesale exodus, carrying with it the most serious implications for their economy, the Chinese Government are likely to adopt more civilized conduct.
However, quite apart from the considerations to which I have referred, there are two other matters that I believe it is right to mention. First, the Portuguese Government have chosen to behave very differently from our Government. They are giving the people of Macao the automatic right of Portuguese citizenship in the relatively near future. Moreover, as a result of their membership of the Community, these people will be entitled to live in the United Kingdom. In the same way, if we had adopted a more generous policy, many of those who acquire the right to enter the United Kingdom would settle in other Community countries as well as our own.
I turn now to the second issue to which I wish to refer, and one touched on by the noble Lord, Lord Irvine of Lairg; that is, Clause 1(5) which is a thoroughly nasty provision. Under it, no one will be able to apply for judicial review against a decision to refuse him right of abode in the United Kingdom. It protects the position of the Governor and that of the Secretary of State. It seems to me extraordinary, when for the past 20 or 30 years we have been devoting, rightly, a great deal of attention to increasing the rights of individuals, that such a provision should appear in legislation. The only circumstances in which one will succeed with such an application before the courts is if, as the noble Lord, Lord Irvine of Lairg, pointed out, there is a breach of natural justice, irrational conduct and so on.
Is it seriously maintained that in such circumstances a private citizen in Hong Kong should not have the right to make such an application before a judge? I hope that we shall have some explanation from the Minister at the end of our debate. He cannot argue that that would confer an automatic right of appeal. It would do nothing of the sort. There has to be an application before a judge for judicial review on such a matter. It would be allowed

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in the most limited circumstances only where a prima facie case of some significance could be put before him.
The Government must justify that provision or they will have a fairly difficult time in Committee on that issue. That provision is part of the price we pay as a result of the absence of a written constitution in this country. In the almost inconceivable circumstances of such a provision appearing in a Bill before the United States Congress, or the Bundestag in West Germany, if enacted, it would be struck down by the courts. In this country we have no such protection. A Minister, armed with an adequate majority in the other place, can merely introduce such a provision in a Bill and prevent the courts from examining his conduct and, in this case, that of the Governor of the colony. It is wholly objectionable and should be removed from the Bill.
We have made our position on the Bill entirely clear. We support wholeheartedly its objectives. We doubt whether they will be achieved unless there are significant improvements in the number of people who will potentially be allowed to enter the country.
Lord Monkswell: My Lords, perhaps I may intervene. The noble Lord mentioned that he hoped to make clear his party's position on the Bill. In his disclosure vis-a-vis the Portuguese relationship with Macao, he did not explain whether his party was in favour of granting full British citizenship with a right of abode to the entire 6 million population of Hong Kong.
Lord Harris of Greenwich: My Lords, first, the number is not 6 million; it is 3 million. Secondly, my noble friend Lord Bonham-Carter made his position on that matter clear at the outset of the debate, and so if the noble Lord reads Hansard he will have the good fortune of reading our clearly defined position.
There remains —I believe that this is conceded on all sides —a dangerous lack of confidence in Hong Kong. Last year —the Minister confirmed this point in his speech —there was record emigration, and the numbers of emigrants have increased this year. In many businesses the turnover of staff is between 25 and 30 per cent. Twenty-five per cent. of all doctors left Hong Kong last year, and 20 per cent. of psychiatric nurses are planning to do the same. There is a clear danger that unless it is corrected, this haemorrhage of talent could inflict the most grievous damage to Hong Kong long before 1997. The Government have still got the capacity to take remedial action in this Bill and significantly to improve it. I very much hope that they will not fail to do so.
3 p.m.
Baroness Ewart-Biggs: My Lords, the speeches of all noble Lords who have taken part in this debate have amply demonstrated the great concern of this House for the people of Hong Kong. The Bill acutely affects the lives of people in Britain's remaining colony. It is little wonder that the subject has aroused so much passion both inside and outside Parliament.
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When presenting the Bill, the noble Earl went to great lengths to explain the urgent need for its implementation. He explained that its significance lay not in its effect regarding emigration per se, but in the influence that it will have on the maintenance of confidence in Hong Kong. That has been stressed by nearly all speakers in the debate, though some have expressed doubt as to whether that will be so. In view of the nature of the subject many noble Lords had to speak in hypothetical terms. That is what has made it difficult to put a clear and concrete view about the Bill.
The Minister also went to some lengths to describe the present worrying situation in the colony. In his very interesting and rewarding maiden speech, the noble Lord, Lord Holme, painted a very stark picture of the position, as he saw it, in the colony now. He described the large number of people who are leaving every week or who anticipate leaving during the rest of the year. It will be the highest number so far. The right reverend Primate was able to give precise figures which he acquired during a visit to Hong Kong recently.
It has been made clear that these figures concern the key people and they are going mainly to Canada or Australia. These are the people who are targeted by this Bill. It is true that they are needed to keep Hong Kong running smoothly as a major world financial centre. If they stay and give the necessary confidence, other Hong Kong people would be happier to remain.
The points system devised by the Government to select 50,000 heads of families is designed to accomplish that response. Everybody has agreed that that is the purpose of the points system. However, approval for that system has not been unanimous. One should see it more as a way of providing certain measures to deal with a particular situation that is occurring at the present time. As the noble Lord, Lord Sharp, said in his very interesting speech, it is a means of tiding Hong Kong over during a very difficult interim period prior to 1997.
However, that should not be confused with justice. I do not think anyone would agree that there is anything fair about a points system. I believe the Minister said that this measure was not an emigration but a nationality matter. I do not believe it is that either. It is about expediency. It is a damage-control measure. It is a particular solution for a current problem. It is in that light that we should be looking at the Bill before us today.
Many noble Lords have given their views on what the Hong Kong people want and whether they want this measure. It has been said that it represents an almost arbitrary selection of a small minority of people and that others with the same qualifications will be excluded. This may cause anger and resentment and set families against each other. It may also have embittering consequences within the Hong Kong Civil Service, where there is already great unrest. That may well be so. The result will depend very much on how the screening process will be conducted.
On that point I wish to ask the Minister whether additional officials will be allocated to assist in that

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procedure. If that is the case, I wish to ask him about the recommendation which appeared in the Select Committee report:
"Our concern is that any increase in the manpower required to register British citizens in Hong Kong does not necessitate any reduction in staff tackling the backlog of naturalisation applications. We recommend accordingly that any additional staff required. for the registration of British citizens in Hong Kong should not lead to a reduction in the numbers processing naturalisation applications within the IND".
I should be grateful to have two answers from the Minister on that point.
I am swayed by the argument that the Hong Kong people view a points system rather differently from the way we do. The most reverend Primate made the point that he feels that the Hong Kong people are more pragmatic. I believe they are already familiar with the points system as applied by Canada and Australia. I have even heard it said that, whereas in London a taxi driver is well able to tell one the names of every player in the World Cup, in Hong Kong a taxi driver is equally well equipped to reel off the points system of every country in the world. I can imagine that that is the case.
It would be correct to conclude that Hong Kong people view this Bill more in the light of an insurance policy than a means to come and live in England. I am told this is borne out by a poll that showed that only 5 per cent. of the 50,000 householders in question would leave Hong Kong and take up residence in Britain. However, all noble Lords who have spoken agree that that would depend entirely on what happens in China. The noble Lord, Lord Holme, spoke on that matter cogently, as did the noble Lord, Lord MacLehose, who stressed the need for great mutual understanding between the British Government and the Chinese.
I end my remarks by referring to a few of the points that have been made by noble Lords who disagree about the scheme before us. We have decided that it is necessary to have a scheme, but there is disagreement on whether the scheme we have is the right one. However, before I comment on the scheme, I wish to reply to two questions that have been asked me during the course of the debate. The noble Lord, Lord Derwent, asked me whether the Labour Party would withdraw any nationality conferred on a citizen of Hong Kong under this Bill if it were in government. I am happy to give the noble Lord an assurance that a Labour Government would not withdraw any British nationality that was given to any Hong Kong citizen in this Bill.
The noble Lord, Lord Geddes, referred to the ethnic minorities, which the noble Lord, Lord MacLehose, was also concerned about. The noble Lord, Lord Geddes, asked me what position the Labour Party would take. I shall quote what my noble friend Lord Cledwyn said in a debate in May 1986 regarding the right of abode in the United Kingdom of members of Hong Kong's ethnic minorities. It was in that debate that the noble Lord, Lord Glenarthur, gave a commitment which has been referred to many times during this debate. My noble friend Lord Cledwyn, in winding up that debate, said that he thought that the noble Lord,
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Lord Glenarthur, had given a strong undertaking. He added:
"I must of course, confirm that my party, in government, would honour that obligation, but I must also say to the House that from my conversations with my right honourable friends in another place I have the authority to say that we would consider going further and taking other steps as well". —[official Report, 16/5/86; col. 1438.]
I hope that that will set the anxieties of the noble Lord at rest.
My noble friend Lord Irvine made a very important point when he clarified what is meant by a judicial review. The noble Lord, Lord Harris, also asked for clarification of that point. It is very important that in replying the Minister should let us know exactly what people's rights will be with regard to a judicial review.
The noble Lord, Lord Bonham-Carter, said that he disagreed with my noble friend Lord Mishcon. However, when it came to the point I noticed that in fact he agreed with quite a lot of what he said. The noble Lord, Lord Bonham-Carter, wanted a wider insurance policy, as he called it. My noble friend Lord Mishcon had already put forward ways of providing that wider insurance policy by building up democratic structures that he felt would give the people of Hong Kong the confidence to remain there.
Several speakers, including the most reverend Primate, the noble Lord, Lord Tanlaw, and the noble Viscount Lord Mackintosh, were worried about the spouses of British subjects in Hong Kong. There is an anomaly which was clearly set out by the noble Viscount. Again we shall be grateful to the Minister if he will clarify that point.
There was agreement among many noble Lords, notably the noble Lord, Lord Glenarthur, and the noble Lord, Lord Eden, about the numbers involved. They thought that 50,000 was a very limited number. The noble Lord, Lord Glenarthur, pointed out that 50,000 heads of families made 225,000 people. I was also confused on that point. Even if that figure is correct I wonder how it was arrived at.
I fear that some speakers have mentioned what they described as the electoral hypocrisy exercised by the Opposition Front Bench in another place. It would be rather difficult under the circumstances pertaining in your Lordships' House to accuse the Opposition Benches in this House of the same thing. Electoral hypocrisy is something that we cannot indulge in.
The noble Lord, Lord Harris, quoted the example —which has often been mentioned —of Portugal giving citizenship to all the people of Macao. However, he did not mention the number of people involved. I believe that it is 7,000. It is therefore rather difficult to compare the position of Portugal with the position of Britain, which would have to take 3·25 million people.
Lord Monkswell: My Lords, can the noble Baroness clarify the proportions involved? I believe that the number of people in Macao vis-à-vis the population of Portugal is approximately the same as the number of people in Hong Kong in relation to the population of the United Kingdom.
Baroness Ewart-Biggs: My Lords, I am afraid that I cannot clarify that point because I do not have the figures. Even if I had, I do not believe that I would be persuaded by the noble Lord's argument. I believe that the situation is entirely different and in absorbing 3·25 million people we should not show responsibility toward the people of this country.
We hope that this Bill will advance the interests of the people of Hong Kong. There is absolutely no doubt about it. We do not oppose the Bill, as my noble friend Lord Mishcon said. Nevertheless, I believe that the scheme comes a little too late. I should like to ask the Minister why we have waited such a long time for this Bill. I should have thought that if it were about restoring confidence it would have been very much more useful had it come before Parliament a great deal earlier.
I also believe that the Bill offers too little to have the anchoring and confidence-restoring effects claimed for it by the Government. In reality only the Joint Declaration, zealously honoured by China and Britain in spirit and the letter can do that. Let us hope that that is exactly what will happen. We do not oppose this Second Reading.
3.15 p.m.
Earl Ferrers: My Lords, as might have been expected we have had an interesting and, if I may say so, a most informed debate. A number of noble Lords who have great knowledge of Hong Kong have spoken. So have others who have great knowledge of business and those who have particular knowledge of the political issues involved.
Just before she sat down the noble Baroness, Lady Ewart-Biggs, asked why this has not been done before. She will know perfectly well that there was a great deal of difficulty in deciding the right course to take over what is a difficult and a unique position. A great deal of consideration had to be given to it both within the Government and between the British Government and Hong Kong. I believe that it has been useful to have this Bill before us today.
I should like to congratulate in particular the noble Lord, Lord Holme, on his maiden speech. It was a remarkable maiden speech, delivered in a way which was extremely agreeable and which depicted the great confidence which I am sure is characteristic of the noble Lord. I was delighted to hear from his noble friend Lord Harris that we shall be hearing from him many times in the future —not because of the paucity of the number of noble Lords on those Benches but simply because of the quality of his own personal intervention. He said that he hoped that he would look like a little girl full of modesty and decorum. He did not look much like a little girl. I do not suppose that he has too much modesty but he has a great deal of decorum, and modesty was there in the right amount. He succeeded in making his speech without making it controversial too. When he said that this was a sorry little Bill, I thought that he was sailing a bit close to the wind but then I realised that it was merely an explanation of his own views.
His speech was in contrast with the only contribution that I found to be unfortunate
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—namely, the speech of the noble Lord, Lord Monkswell, which if I may say so, was disgraceful. I think that he lowered the tone of the whole debate as well as bringing little credit to himself or indeed any comfort to those on his own side of the House. To suggest that this Bill is a raiding party to obtain rich pickings from Hong Kong because of the lack of education given by the Tory Government over the past 10 years and to say that much of the money will land up in the back pockets of Conservative politicians was a shocking intervention. I think that, when the noble Lord reflects upon his words, he will feel that it was a speech that he would prefer not to have made.
One of the greatest problems that we have had —it has been mentioned all round the Chamber —is that many people would have liked this Bill to go further. That is wholly understandable. I think that the most reverend Primate the Archbishop of York felt that, as did the noble Lord, Lord Bonham-Carter, my noble friends Lord Glenarthur, Lord Eden and Lord Mackintosh and the noble Lords, Lord Tanlaw and Lord Harris of Greenwich. I believe that everyone felt that, if this was going to work, what a pity that it could not go even further.
It is an odd concept to try to give people British citizenship in order that they should not come to Britain but stay where they are. It may not be a wholly appropriate simile, but over the past 40 years we have retained a most astonishing weapon, the nuclear weapon, for the very good reason that it should never be used. Oddly enough, that has worked. A similar principle applies here. One can apply a system of protection which can be formidable in the hope that it will not be used.
The most reverend Primate the Archbishop of York put the problem in perspective when he said that by 1997, according to his delegation, one tenth of Hong Kong's population, one fifth of the Christians, and a quarter of the church workers, will have gone. Those were rather frightening statistics. I was even more alarmed at the prospect of the church workers heading the field of those leaving. I am sure that that was only an unfortunate part of the statistical analysis. The most reverend Primate was quite right when he said that what one needs is confidence now. My noble friend Lord Sharp said that that was so, that we needed confidence now, and that the Bill would help. That is the purpose of the Bill, I hope that it will help.
However, the most reverend Primate posed the fascinating question, repeated by the noble Lords, Lord Bonham-Carter, and Lord Harris of Greenwich: if the principle of the Bill works, why do we not give it to more people because then we shall build a bigger foundation and even fewer people will come? I do not know that such a hypothesis could be borne out by fact. However, we have to try to decide on a figure which, if the worst came to the worst, this country could honour. We feel that 50,000 is the right figure, plus the families.
The noble Lord, Lord Mishcon, was right when he said that one cannot give a cheque which one cannot honour. I do not believe that this guarantee

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will have to be honoured to its totality. The whole purpose of giving such protection is to give confidence to Hong Kong and to enable those people to remain there.
The noble Lord, Lord Mishcon, said that one needs to give security and confidence now and to democratise the organisations before 1997. I believe that he said that he would not have introduced the Bill. I agree with him that we ought to give as much confidence as possible and encourage that confidence to be given. But that alone will not enable people to remain in Hong Kong. As we have seen already people have been going to other countries. As the most reverend Primate has pointed out, people are leaving at a great rate. The whole point of the measure is to try to stem the flow.
The noble Lord, Lord Bonham-Carter, made one curious intervention, if I may say so. He asked: why can not give more people this guarantee because we are giving a pledge to 250 million people in the European Community? I thought that that was a most astonishing suggestion. It is grossly flawed for two reasons. Any measure to do with the European Community is two-way traffic. People can come to this country; we can go to other countries. When one gives a passport in the European Community one does not give citizenship. Those who use European passports retain their own citizenship. Therefore, when the noble Lord tries to confuse the European passport with the provisions under this Bill he is trying to confuse Piccadilly Circus with Tuesday afternoon. The two are not the same.
We have had a number of interventions. The noble Lords, Lord Derwent, and Lord MacLehose of Beoch —who is a most distinguished ex-Governor of Hong Kong—and the noble Lords, Lord Sharp and Lord Tanlaw, and my noble friend Lord Geddes are involved in business in Hong Kong. They understand the difficulties. We also heard from my noble friend Lord Glenarthur, who as a Minister of State was involved with the problems of Hong Kong in particular. I found encouraging the fact that a majority of your Lordships recognise that there is a problem and that however one tries to solve it, it will never be done in a way that is totally equitable to everyone.
The noble Lord, Lord Mishcon, the most reverend Primate and other noble Lords referred to the figure of 50,000 and asked whether it could be increased. If, against all expectations, those selected decided to come here, that is a figure that we believe we could honour.
The noble Lord, Lord Mishcon, expressed anxiety about the operation of the points structure. He said that maximum points would be awarded to those between the age of 30 and 40 years and he found that personally disturbing. I am sure that if the noble Lord were applying he would score well on experience, education, training, proficiency in English and public community service, even though he might be knocked out on grounds of age. The purpose of making that provision is that the highest rate of emigration is within that age group.
Lord Mishcon: My Lords, I am grateful to the Minister for allowing me to intervene, especially after such a flattering remark. I was trying to make a serious point, that while the young are favoured on points, people are also awarded points for length of experience. That struck me as being paradoxical and I do not know whether it similarly strikes the Minister.
Earl Ferrers: No, my Lords, it does not. It strikes me that there are two or three separate qualifications for which points are given. In certain instances experience is valuable; in other instances youth is valuable.
The noble Lord, Lord Mishcon, also expressed anxiety about the necessity to have a certain knowledge of English. We have made it clear that those without a formal qualification in English will be able to take a specially arranged simple test. Therefore, there will be no discrimination against them. I see no reason why it should be assumed that such a test cannot be applied fairly. It will be designed to be as objective as possible.
The noble Lord, Lord Holme, insinuated that the scheme may have been weighted towards civil servants. Hong Kong needs public servants to ensure successful and effective administration until 1997. The number in the private sector far outweighs the number in the public service. The points system is designed to enable an appropriate number of key public servants to qualify. However, the final result is intended to produce a significant majority of key people from the private sector.
My noble friend Lord Sharp asked why there is no approved secondment scheme as was proposed in a Statement last December by my right honourable friend the Foreign Secretary. Our initial thinking included a proposal for a secondment scheme. It would have allowed those participating to secure British citizenship by a mixture of residence here and in Hong Kong. British firms would have been in a good position to make use of such an arrangement for their staff. However, as we continued to think about the matter other ways of helping British firms emerged. We have proposed that points should be awarded for British links, including service with a British firm. Therefore, the Bill does not contain provisions for a secondment scheme. We shall take account of any views expressed about the assistance that we might give to British firms in Hong Kong and the most appropriate way of doing so.
The noble Lord, Lord Tanlaw, and my noble friends Lord Sharp and Lord Derwent asked why those working for British firms should not be given a bigger advantage in the points system. We have proposed that up to 35 points should be available for service with British firms. In a highly competitive selection scheme that would give people who work for British companies a significant advantage over those who are otherwise equally qualified. The purpose of the scheme is to benefit Hong Kong as a whole, and it would be against Hong Kong's interests to give employees of British companies such an advantage that they secured places ahead of others who might be better qualified. As my noble friend

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said, other countries are focusing their help on their companies' employees. However, our responsibilities go further.
The noble Lord, Lord Mishcon, referred to the difficulty about choosing between equally qualified candidates. One of the main purposes of the special circumstances point is to reduce the bunching of equally qualified candidates around the pass mark for each occupational group within the general allocation and disciplined services sections. The governor would approve the use of relevant criteria against which a candidate scores to be recalculated where the bunching occurred. Adjustments will be made in that way until the bunching is resolved or reduced to a minimum.
Lord Mishcon: My Lords, I intervene again because this is important to the people of Hong Kong. I asked a rather different question. The Bill fixes the figure at 50,000 heads of households —50,001 would be ultra vires the Bill. I asked what would happen when a number of people —and there must be a number —all finish with exactly the same points. How is the choice to be made? Is it right that it will be made by the governor pulling names from a hat? How else can that issue be decided?
Earl Ferrers: My Lords, the answer which I was giving to the noble Lord is not wholly irrelevant because a points system will be allocated until bunching is prevented. If a position is reached where many people have the same points, then a judgment will have to be made. I understand that that judgment is likely to be made by the governor but, if I am wrong on that, I shall let the noble Lord know.
My noble friend Lord Geddes said that the Joint Declaration does not offer the non-ethnic Chinese any worthwhile assurances. I do not believe that that is so. It guarantees them both the right of abode in Hong Kong and a freedom of movement as well as the protection of all existing laws in Hong Kong. There is no risk that they will become stateless when their British dependent territory citizenship status lapses. Not only they but their children and their grandchildren born after 1997 will qualify for British overseas citizenship if they otherwise become stateless. Also, we have given assurances that their case for admission will be considered sympathetically if they come under severe pressure to leave. Therefore, the Government believe that their position is reasonably safeguarded.
My noble friend Lord Geddes asked how the pressure to leave would be defined. One cannot be specific on matters like pressure. Each case will be different. The general approach is to consider each one on its individual merits and circumstances. As regards how each person will get out of Hong Kong if they are under pressure to leave, I assume that there will be no difficulty in them doing so.
The noble Lord, Lord Tanlaw, gave the example of the ration book and felt that it was rather bad luck on some who did not even get a ration book. Under the Bill or scheme there is no specific
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provision but it is open to any member of the non-Chinese ethnic minorities to apply for selection provided that he or she can meet the eligibility criteria set out in the Bill and can work in one of the eligible occupation categories.
The noble Lord, Lord Tanlaw, and my noble friend Lord Mackintosh of Halifax and another noble Lord were concerned about spouses. That is an important point. They felt that wives of British citizens were being treated differently from wives who had become British citizens. If an existing British citizen marries a non-British spouse, that spouse does not automatically receive British citizenship. He or she would have to spend a qualifying period of residence in the United Kingdom and the spouse will normally be able to accompany the British citizen here for that purpose.
The purpose of the Bill is to enable key personnel and their families to stay in Hong Kong. It was therefore decided that the spouses of those key personnel should also be registered as British citizens provided that they have the Governor's recommendation. That should happen as a matter of course provided there are no doubts regarding the character of the spouse. The point of the Bill is that it gives key personnel and their families the right to enter this country. It would perhaps have been considered unfair if we had given special rights to the heads of families but different rights to their spouses and children.
The noble Lords, Lord MacLehose and Lord Tanlaw, referred to non-ethnic Chinese minorities and were concerned about their position. They will be able to apply under the scheme. There is no special provision for them in the Bill because their position is safeguarded by both the Joint Declaration, which provides for their right of abode in Hong Kong and their freedom of travel, and the provision of British overseas citizen status for any who will be stateless down to the second generation born after 1997.
The noble Lords, Lord Irvine and Lord Harris, and the noble Baroness, Lady Ewart-Biggs, referred to judicial review. That is an important point. Clause 15(5), which excludes appeal in judicial review, relates only to discretionary decisions. It is similar to a provision in the British Naionality Act 1981; in other words, there is no review on the decision but there is the ability to have judicial review of the methods by which that decision was arrived at. If the courts were to review discretionary decisions they would only be able to substitute their judgment for that of the Secretary of State or the Governor, on whom under the Bill Parliament has placed responsibility.
There is nothing in the Bill which seeks to exclude the proper role of the courts in reviewing matters other than discretionary decisions; for example, procedural impropriety, mistakes of fact and so forth. It is not necessary, and indeed would be wrong, for the Bill to spell out the rights of courts to examine matters other than discretionary decisions. If we did so we might raise doubts about their powers in relation to other legislation which does not contain such provisions.

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The noble Lord, Lord Harris, and the noble Baroness, Lady Ewart-Biggs, referred to the problems which exist in Macao. Approximately 100,000 people in Macao hold Portuguese nationality. That means that around 20 per cent. of the population of Macao have the right to Portuguese citizenship. The reasons for that are largely historical and not because of Hong Kong's present position. It is therefore wrong to draw comparisons between what the Portuguese people in Macao have had historically as of right and what we are giving to the people in Hong Kong.
The Portuguese are not operating an assurance scheme, nor are they granting Portuguese nationality to everyone in Macao. After 1992 Macao residents with Portuguese nationality will have the same freedom of movement within the European Community as all other European nationals. That is not new.
The noble Baroness, Lady Ewart-Biggs, referred to staffing. The staff who process the registration recommendations will be based in Hong Kong and are expected to number around seven. It is not decided from where they will be drawn. The noble Baroness referred to the recommendation of the Select Committee. We are studying its recommendations and will reach a decision later.
Britain's task now is to help Hong Kong weather the difficult transitional period which lies ahead. We have undertaken to do so as part of our obligation under the agreement with China. I believe that the Bill has an important part to play. It will provide a core of Hong Kong's key personnel with an assurance that if the worst comes to the worst they are entitled to come to this country. However, the indications and our thoughts are that they will prefer to stay, as the most reverend Primate said, in Hong Kong, which is a place they like and which they do not necessarily wish to leave. The Bill will give them the confidence to remain in that territory. I believe that it will also send out a good and useful signal to the people of Hong Kong as a whole of Britain's continued commitment to their welfare.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Insurance Companies (Amendment) Regulations 1990
3.40 p.m.
Viscount Ullswater Viscount Ullswater rose to move, That the draft regulations laid before the House on 11th June be approved [21st Report from the Joint Committee].
The noble Viscount said: My Lords, these regulations are intended to fulfil the obligation on the Government to implement the Second EC Council Directive on Non-Life Insurance, often referred to as the non-life services directive. The adoption of this directive in 1988 represented a significant and welcome step forward in the completion of the single European market in the field of insurance and noble Lords may find it helpful if I set it in its context.
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Freedom of establishment for insurance in the European Community was achieved in the 1970s. Freedom of services, however—freedom, that is, to write contracts across frontiers —has been long delayed and it is only since the judgments of the European Court of Justice in December 1986 that progress has been made. The present directive reflects those judgments in respect of non-life insurance and will create a genuinely liberal regime for the writing of so-called large risks —meaning for the most part risks where the policyholder is a company above a certain size. Member states may continue to impose greater restrictions on risks other than large risks, and most other than the United Kingdom probably will.
I do not propose to describe all the draft regulations in detail, though I shall of course be happy to explain any of them more fully if that would assist the House. I will, however, refer briefly to some of their more important aspects. First, the regulations amend the Insurance Companies Act 1982 and subsidiary regulations by establishing a regulatory framework within which EC companies may cover risks situated in the UK. Equally, UK companies (which includes branches of EC companies established in the UK) may cover risks situated in other member states. As I have already explained, the directive provides for two regimes—a liberal one for large risks, which is mandatory, and a much more restrictive one for so-called mass risks, which is optional.
The UK has always been an open market for non-life insurance and we do not propose to take up the option of the mass risks regime. EC companies wishing to do services business here will therefore be subject to the large risks regime irrespective of the nature of the contract. Such a company will be required to submit certain documents to the Secretary of State, including certificates issued by its own supervisory authorities regarding its solvency and the classes of business which it is authorised to carry on. It will be entitled to carry on business from the date on which those documents are received.
Certain new requirements are imposed on the company as regards the information about itself which it must provide to prospective and actual policyholders. I stress that although EC companies covering all types of risks will have access to the UK market under the large risks regime, one additional requirement in the case of personal and other mass risks policyholders is that before any contract is entered into they must be informed where the insurance company is established. That is a new safeguard that does not apply at the present time. The regulations also include provisions to reflect the rules on matching contained in Annex 1 to the directive.
The regulations also contain new rules governing law applicable to a non-life insurance contracts and they empower the Secretary of State to take action against a United Kingdom company which is in breach of the law of another member state.
The Government attach a high priority to the completion of the single market in insurance and we regard it as important that all member states should

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implement the present directive promptly and effectively so that the Community's insurance industries can take full advantage of the new opportunities that it offers. The present regulations are designed to fulfil our own obligations in that respect: I commend them to the House. I beg to move.
Moved, That the draft regulations laid before the House on 11th June be approved [21st Report from the Joint Committee]. —(Viscount Ullswater.)
Lord Graham of Edmonton: My Lords, we on these Benches have no objection to the regulations and see their good sense in fulfilling our obligations as members of the EC. They are much too full of technical detail for me to comment on them sensibly, but, having read them and listened to the Minister, I certainly understand that we seek to enhance the reputation of the British insurance industry, which is great, well-appreciated worldwide and very important to this country. I also detected strands in the Minister's speech which are designed to ensure that the security of the investor and the probity of the companies involved in the insurance market are given close attention.
I am sure that the Minister does not need me to tell him that from time to time sensitive matters come into the public domain and that it is clear that the best kept regulations in the world fail to stop fraud or recklessness with regard to insurance. There are two main areas of insurance with which we are concerned. I am always conscious of the individual —the person who insures genuinely rather than invests, not to make a profit, but simply to ensure that in his or her old age or at a given moment in time, he or she will have money available to help them. Under the Financial Services Act, the Government have, to their credit, created a network which by and large works well. However, as even the best regulated regime and fully staffed departments of state can get into trouble, anything that the regulations do to ensure that such problems are avoided is to be welcomed.
One of the tags that I learned when I studied commercial law concerned bona fides —being of the utmost good faith. That is one of the bedrocks of the commercial insurance world. Millions of people put their money and their future, with the utmost good faith, into the hands of insurance companies. We on this side of the House are sensitive about the Government's responsibilities to ensure that that faith is not misplaced. Having listened to the Minister, I certainly see no objection to the regulations.
Viscount Ullswater: My Lords, I should like to thank the noble Lord, Lord Graham of Edmonton, for the welcome that he has given to the regulations. Insurance regulations in the United Kingdom have a good record. Supervision has been effective. At the same time the industry has enjoyed the freedom to innovate and compete. That has given us a competitive industry.
On Question, Motion agreed to.

Representation of the People Bill
3.50 p.m.
Lord Allen of Abbeydale: My Lords, I beg to move that the Bill be now read a second time.
This small Bill which has been brought to us from another place carries an impressive Title, but is quite modest in content. However, its provisions will be helpful to electors, officials and party workers and so far as I am aware, it has the advantage of being non-political and non-controversial.
The Bill's provisions are aimed at entitling an elector who moves house during the currency of an electoral register to apply to be treated as an absent voter at all elections throughout the outstanding period of that register. The precise arrangements for voting in parliamentary elections are not always a matter of prime interest to Members of your Lordships' House. I suspect that the noble Lord, Lord Graham of Edmonton, who I see is to speak, can claim a greater expertise than most of us possess.
It will be recalled that to be on the electoral register for a particular district or a London borough council electors must be resident on a qualifying date —10th October in Great Britain and, I think I am right in saying, 15th September in Northern Ireland. The register comes into force on 16th February following, and remains in force for a year. People who move house during that period have to wait for the next register before they can vote in their new constituency.
The consolidating Representation of the People Act 1983 entitled an elector who moved to another area to apply for an absent vote for parliamentary elections during the currency of one electoral register. A similar right was conferred by regulation for European parliamentary elections. But those relevant provisions of the 1983 Act were repealed by the Representation of the People Act 1985. The provisions which that Act substituted for absent voting have proved in practice to fall a little way short of the ideal.
Their effect is that people who move house and want to vote by post or by proxy now have to make a separate application at each election —parliamentary, European or, in Great Britain, local government. This has caused a good deal of confusion and extra work, particularly when a parliamentary election and a local election came pretty close together and separate applications had to be made for each —as a good many people discovered with some surprise. The political parties and the election registration staff have suffered and, above all, so have the voters.
Section 6(2) of the 1985 Act sets out a list of persons eligible for an absent vote. Paragraph (a) of Clause 1 of the Bill adds to that list any person who is no longer resident at his qualifying address or at any other address in the same area.
Paragraph (b) of the clause, borrowing language in the main originally used in the 1983 Act, sets out the only circumstances in which two addresses are to be regarded as being in the same area. To complete the story, and in view of the reference in the Long Title to an indefinite period, under Section 6(4)(b)

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of the 1985 Act, which will bite on this addition to that section, the entitlement to an absent vote would cease on the coming into force of the next register.
The practical effect is that someone who moves house and goes to live outside the area covered by the register which includes his name may now make one comprehensive application to be treated as an absent voter during the currency of the register for all parliamentary elections —that is, European parliamentary elections under regulations which will come in due course; and, in Great Britain, local government elections.
The Bill's Explanatory Memorandum states that the Bill,
"has no implications for public expenditure or public service manpower".
I think that that is quite right. Any possible change, one way or the other, would be minimal. The Bill could not come into force until some procedural points have been dealt with by minor amendments to the Representation of the People Regulations and then there are also the regulations to be made dealing with European elections. However, I hope that the Minister will be able to tell us that these should not take long.
As I said at the beginning of my speech, the Bill should be helpful to voters, to officials and to party workers alike. I commend it to your Lordships.
Moved, That the Bill be now read a second time. —(Lord Allen of Abbeydale.)
3.55 p.m.
Lord Harris of Greenwich: My Lords, it is Friday and the hour is fairly late. I shall, therefore, be extremely brief in what I have to say. The noble Lord, Lord Allen of Abbeydale, made an overwhelming case for this small and useful Bill. It has all-party support. We on these Benches are very much in favour of it.
Lord Graham of Edmonton: My Lords, from these Benches I echo the words of the noble Lord, Lord Harris of Greenwich. The Bill is eminently sensible and its drafting has been based upon experience. Indeed, we have all had experience of these matters when knocking on people's doors. Because they have registered once, some people assume that that is all they need to do. There is great irritation when you point out to them that they are not in fact registered and that they should have repeated the exercise.
I am most grateful to the noble Lord, Lord Allen of Abbeydale, for having explained so lucidly what is a simple step but one which, without any party animus, whatever, is bound to be good for democracy and the convenience of electors. We on this side of the House certainly support the Bill.
3.57 p.m.
Earl Ferrers: My Lords, the two noble Lords who have just spoken have, if I may say so, set a precedent of brevity which I hope that they will continue to
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use. However, if I do not follow them to quite such a degree, I hope that they will forgive me.
The House will be grateful to the noble Lord, Lord Allen of Abbeydale, for introducing this Bill and for having explained its purpose. It is, indeed, a rare pleasure for a government spokesman to have the opportunity to speak on a Bill which, so far as I am aware —certainly so far—has proved to be completely uncontroversial and which has the full support of all the major political parties. Its provisions have been welcomed by the various local authority associations representing those dealing with electoral matters and I am sure that it will also be welcomed by all those electors who move house, and who, therefore, need an absent vote in their old district or constituency until the next annual register is compiled.
The Bill simplifies matters both for the elector and for the registration officer. It replaces the need for a person who has moved house to apply for an absent vote on each occasion during the year in which the register is in force and when there is an election. The Bill enables a single application to be made which will cover all elections.
We had originally hoped to address this matter in the Representation of the People Act which came before your Lordships' House last year. However, it did not prove possible to do so because it was necessary to keep that Act —which dealt, as your Lordships will doubtless recall, with new arrangements for overseas electors —as short and as straightforward as possible. We are therefore very glad that this early opportunity has arisen to make proper arrangements for electors who move house.
The financial and manpower implications of this Bill are not easy to assess precisely. The Bill will remove the need for a person who moves house to make a separate application for an absent vote at each election which arises before he or she may qualify to be included on the register at their new address. If, therefore, there were to be more than one election before the register in question expired, there might well be a saving on costs and manpower. But I doubt whether that would add up to a significant amount.
Of course, some people may well apply as a matter of course under the new provision in order to ensure that they get an absent vote even if no election is in prospect and even if, in the event, none actually ever takes place. I think, therefore, that it is highly unlikely that this provision will place any extra burden on local authorities; and the local authority associations agree with our view on this aspect of the matter.
The provisions of this Bill will come into force under an order made by the Secretary of State following Royal Assent. They cannot take effect until, as the noble Lord, Lord Allen of Abbeydale, rightly said, some small amendments are made to the Representation of the People Regulations. They are not likely to take much time. It will also be necessary to amend the European parliamentary regulations so as to apply the Bill's provisions to European parliamentary elections, and that will be done as soon as possible. The Bill will simplify the

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system and reduce the bureaucratic burden on a large number of electors who move house each year. I can only think that that will be to the advantage of everyone. I congratulate Lord Allen of Abbeydale on the Bill and wish him success.
Lord Allen of Abbeydale: My Lords, I do not believe there is anything for me to say except to thank noble Lords who have spoken for welcoming the Bill which I believe will be useful. I merely ask the House to give the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

British Railways (No. 3) Bill
Committed to an Unopposed Bill Committee.
House adjourned at one minute past four o'clock.