HL Deb 06 December 1993 vol 550 cc771-82

4.35 p.m.

The Parliamentary Under-Secretary of State, Department of Employment, (Lord Henley)

My Lords, with the leave of the House, I should like to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs.

"I will, with permission, Madam Speaker, make a statement about Hong Kong.

"We have an important job to do in the remaining years of British sovereignty in Hong Kong. We intend to carry out these responsibilities, with the support of this House. Part of our task will be to make arrangements for the elections to the district boards, municipal councils and the Legislative Council in 1994 and 1995.

"There is no argument between Britain and China over the principle that Hong Kong's democratic institutions should continue to develop. That is set out in the Sino-British Joint Declaration. It provides that by 1st July 1997 Hong Kong's legislature will be constituted by elections. China's Basic Law for Hong Kong after that date spells out more fully that process of political development.

"The issue is how these principles should be turned into practical arrangements. The proposals which the governor put forward in October 1992 with our full support were carefully framed to be consistent with the Basic Law. We have all along wished to proceed in agreement with China, in order to assure continuity in this important part of Hong Kong's life. That is why we have put so much effort since April into achieving an agreement in the talks with China.

"The talks have been concerned with complex electoral issues. But the underlying question is simple. Will we bequeath to Hong Kong an open and democratic system offering the electorate a genuine choice? Or will we settle for a system based on small electorates open to manipulation and corruption?

"The answer to that question affects the character of Hong Kong. Hong Kong owes its success in large measure to the rule of law supported by a clean and efficient administration. If that precious asset is to be preserved in modern circumstances, the territory needs an elected and credible legislature which can stand up for its way of life.

"That is why elections held under British administration in Hong Kong must be fair, open and acceptable to the people of Hong Kong. On that basis, we have made a concerted effort through 17 rounds of talks to reach agreement with China. I discussed matters twice with the Chinese Foreign Minister during this period. The Prime Minister sent a message to the Chinese premier. We have offered to make important moves to accommodate Chinese views, without compromising our essential requirements, as part of an acceptable agreement.

"We made plain from the outset that the talks could not continue indefinitely and that it would be for the Legislative Council to consider and pass the necessary legislation. This will be a time-consuming task. Some 48 constitutional and electoral instru-ments in Hong Kong are affected and may need amendment. All the primary legislation needs to be in place by July 1994. Some of the more urgent measures need to be on the statute book by February.

"When time began to press, we therefore explored fully the possibility of an interim agreement, which would enable us to get on with legislation on the more urgent issues, and gain a little more time to resolve the remainder.

"I explained to the Chinese Foreign Minister in New York on 1st October that this aim would not be achieved by an interim package limited only to the district board and municipal council elections. To deal with all the more urgent issues, an interim package needs to include the voting age and the voting method for all three sets of elections, including the Legislative Council, and the abolition of appointed membership in the district boards and municipal councils.

"The Chinese side evidently had no difficulty of principle with an interim package covering some LegCo issues. They accepted our proposal that the voting age should be lowered to 18 for all elections. They also seem to have had no difficulty of principle

with our proposal that the voting method should be single seat-single vote. They accepted that this should apply to the district board and municipal council elections. But they refused to accept as part of an interim package that the single seat-single vote method should apply to the Legislative Council.

"We and the governor consider that there are compelling reasons for including this proposal in the interim package: in practical terms it would otherwise be necessary to legislate twice on the voting system, using up legislative time which will be in short supply next year; the single seat-single vote system enjoys widespread support in the Legislative Council. If we had accepted the Chinese position and introduced legislation to apply this voting method to the district boards and municipal councils only, the council might have extended the measure to apply to the elections to its own body. That would lead straight back to further difficulties with the Chinese Government. We would not have saved time: we would have wasted it.

"Despite our best efforts, it has not been possible to reach agreement on this issue. The question of abolishing appointed members also remains un-solved. Time has now run out for pursuing these points.

"It is necessary to introduce legislation on them into the Legislative Council before their Christmas Recess. That will allow work to begin straight away in a Bills Committee. The Governor has therefore announced that he will publish draft legislation on 10th December for introduction on 15th December.

"These proposals are largely uncontroversial in Hong Kong. We had thought that they were uncontroversial with China. On a number of them it was possible to reach a common view in the talks. In those cases the legislation will reflect that. The Governor is not at this stage legislating on the main issues which remain in dispute, namely the functional constituencies, the composition of the election committee and objective criteria for the through train.

"We are not breaking off the talks. We have proposed a further round in December to pursue agreement on the remaining issues. We are prepared to work seriously and constructively to that end. We strongly hope that the talks will continue.

"Britain and China have to carry out what they agreed, namely to preserve Hong Kong's way of life and success while transferring sovereignty. That is a unique and difficult task best carried out together. The Joint Declaration makes clear the fundamental British responsibility up to 1997. We and the governor are committed to working with China in the interests of Hong Kong. We look for corresponding commitment from their side".

My Lords, that concludes the Statement.

Baroness Blackstone

My Lords, I am grateful to the Minister for repeating the Statement. I reiterate what we have said on numerous occasions; namely, that we have always supported moves towards greater democracy in Hong Hong. We believe that these relatively modest proposals for further democracy are consistent with the Joint Declaration. We understand that they are also consistent with the Basic Law.

This Statement is bad news for the British Government and, far more important, it is bad news for the people of Hong Kong. Why, after a year's discussion, are even the simplest of these proposals apparently still unacceptable to the Chinese Government and even an interim agreement beyond the reach of the Foreign Office, British Ministers and the Governor of Hong Kong? Why have Her Majesty's Government been unable after 17 rounds of talks to persuade the Chinese Government that the implementa-tion of these proposals is necessary?

Perhaps the Minister could give a little more detail about why the talks have collapsed and why the Chinese Government will not accept the single seat/single vote proposals that have been put to them. What hope can there be for agreement on the main issues in dispute such as functional constituencies and the objective criteria for the through train when there has been failure on these less important interim measures? Is it not apparent that the UK Government got off on the wrong foot when proposals for political reform were announced in October 1992 and never recovered from the bad start that was made as a result of the failure to consult the Chinese Government adequately at that time?

I do not wish in any way to imply that the Chinese Government's intransigence on these and other matters is acceptable. We on these Benches have been consistently critical of their human rights record, as we have of their handling of the Tiananmen Square demonstrations in 1987. However, we cannot be other than deeply concerned about the way in which our relations with the Chinese Government on the future of Hong Kong appear to have deteriorated in the past year and a half. Those who thought that the handling of these matters by the British Government and the Governor of Hong Kong lacked subtlety have been proved to be right in the light of these latest developments.

Is it not increasingly likely that the Chinese will now set aside these proposals in 1997 and introduce their own plans? What hope is there for the through train? Is it not also clear that without a substantial recovery of trust and serious further negotiations leading to agreement there is nothing that the UK Government can do to stop that happening?

The Statement says that the Government are not breaking off the talks. Can the Minister tell the House what the Government intend to do if as a result of today's announcement the Chinese refuse to pursue talks on the remaining issues? These are important questions that must be answered.

In addition, what can the Minister tell the House in the way of assurances that pressing ahead with the proposals for political reform on a unilateral basis will not jeopardise existing arrangements for the new airport and other major capital projects that have been agreed?

Today's Statement on the failure to come to any agreement on the practical arrangements to implement earlier agreements can only give rise to considerable anxiety among all those with an interest in the peaceful transfer of sovereignty in 1997 and in the long-term prosperity of Hong Kong. Above all, there must be anxiety about the great risks that are being taken with the future of the people of Hong Kong and their wish for an open and democratic system.

Lord Bonham-Carter

My Lords, I should like to join the noble Baroness, Lady Blackstone, in thanking the Minister for repeating the Statement made by his right honourable friend in another place.

In these circumstances it is easy to be wise after the event. We on these Benches have always supported Mr. Patten's initiative and we maintain that position. Of course it would have been better had democratisation been initiated at an earlier date, but that was not the position which faced the Governor when he took up his post. I take the view that it is better late than never.

We have to face up squarely to the very weak negotiating position in which we find ourselves. Our ability to find our way through the position which the Statement describes so frankly and vividly depends on our ability to convince the Chinese of the importance to them of the prosperity of Hong Kong, the degree to which they see that that prosperity depends on the rule of law in that city state, and the extent to which they are prepared to allow two systems to co-exist. There is no real leverage which we can exercise unless we can convince them of those elementary and crucial factors. In looking at the position in which we find ourselves today we have to confront those serious facts.

There are two other points which I should like to raise. The Chinese position affects their standing in the world, to which they are sensitive. That standing was not improved by Tiananmen Square. It is not improved by what is happening in Tibet. It has not been improved by their response at the APEC meeting to President Clinton's approach to them on human rights. In that connection I should like to ask the Minister whether we can be confident that we and the United States Government stand four-square on the position of Hong Kong and what their position is in relation to Hong Kong. It will not be improved if China remains intransigent about Hong Kong and the proposals which Governor Patten has made. They do not wish to stand alone against the tide of events in the 20th century. I do not believe that they want to jeopardise the main conduit for investment into Southern China which is transforming that whole area.

Of course we must be prepared to compromise in the negotiations, as in any negotiations, but it takes two to negotiate. If someone refuses to negotiate there is not very much that the other party can do. However, I do not believe that we should be prepared to compromise too far on the way that the legislature is elected because the rule of law depends on that.

I should like to mention the importance of the position adopted by the business community in Hong Kong. It is essential that there should be no split between business and the democratic movement within Hong Kong. The business community should be encouraged to stand behind the position adopted by the Governor. It seems to me that it has not been good news that Mr. Murdoch has sold his paper in Hong Kong to someone who, it is generally believed, will not support the governor but will support Beijing. We can only hope that other businessmen do not behave in the same fashion.

Lord Henley

My Lords, perhaps I may respond to the two Opposition Front Bench speakers first before I take questions from other noble Lords.

I welcome the partial support that we received from the noble Baroness, Lady Blackstone, and the Labour Benches and the more fulsome support from the noble Lord, Lord Bonham-Carter, although he much regretted that events had not occurred earlier. However, I believe that he answered the question himself when he said that we have to start from where we are. That was the position that the Governor was in.

Very simply, the noble Baroness, Lady Blackstone, asked why we could not obtain an agreement, and what hope there was for future discussions. She stated that this was bad news for Her Majesty's Government and for Hong Kong. It is certainly not due to lack of effort or lack of willingness on the part of Her Majesty's Government. Her Majesty's Government have negotiated with the Chinese Government on many occasions. Nor has there been any lack of willingness on the part of Her Majesty's Government—again I stress the point—to compromise. In the end one has to ask the Chinese authorities why there has been failure. I believe the noble Baroness answered those questions herself in part by saying that there was a degree of intransigence on the part of the Chinese.

We believe that we need a system which recognises the genuine aspirations for democratic government of the people of Hong Kong and which allows further development post-1997. We believe that it is our plain duty to administer Hong Kong to the best of our ability up until 1997. That obviously includes those elections. We believe that the proposals which Governor Patten has put forward respond to those aspirations.

With regard to hope of future discussions, the Chinese Government themselves have a strong interest in a smooth transfer of power in 1997. The Chinese Government have a strong interest in a democratic and prosperous Hong Kong. We believe that if the arrangements then in place are working well and are consistent with the Joint Declaration and Basic Law, as we believe that they are, we cannot see why they should be changed. We cannot see why it is in the interests of the Chinese so to change them. Again, I stress the points made by the noble Lord, Lord Bonham-Carter, as regards China's position with the remainder of the world community. I do not believe that China's position will be in any way improved by the authorities' intransigence on such matters.

Perhaps I may say a few words on the airport issues upon which the noble Baroness touched. Our views are that those matters are quite different and should be dealt with separately and on their merits. We believe that the Chinese officials have frequently said exactly the same thing. I think that everyone agrees that Hong Kong needs a new airport if it is to remain an international trade and financial centre. The Hong Kong Government will be getting on with work on the airport where possible. It is still necessary to resolve some of the financing issues with the Chinese and we hope that that can be done so that the airport can be ready on time.

Finally, perhaps I may reiterate that we believe that there will be a good deal of water flowing under the bridge between now and 1997. However, I stress that it is not only in our own interests that those matters are resolved but also in the interests of the Chinese and of the people of Hong Kong.

4.55 p.m.

Lord Callaghan of Cardiff

My Lords, there can be no doubt that the Government have had a difficult hand to play ever since the signing of the Sino-British agreement. However, I cannot congratulate them on the way that they have played it. The old saying is, "You should speak softly and carry a big stick". That is fine, but one should not speak loudly if one has no stick. I fear that the Government have got themselves into a cul-de-sac because they have totally misunderstood the basis of negotiations with the Chinese Government, who are not a democratic government. They do not therefore accept the normal canons of behaviour that we in this country, or indeed in the western world generally, accept. The Government have got themselves into a cul-de-sac; they cannot now satisfy the people of Hong Kong completely, and we are now endangering our long-term relations with China. It is a terrible example of ineptitude.

When I went to Beijing in May, I had a long talk with President Jiang Ze Min. On my return I reported fully to the Prime Minister on what I thought the position was. I told President Jiang Ze Min that I believed that the British Government were negotiating in good faith and wished to come to an agreement but that it was quite obvious from the difference between us that there would have to be a compromise in the view that we were expressing. I am not privy to any secret discussions; we all know that secret discussions about which we know nothing take place nowadays. However, on public ground no compromise has been made that the Chinese could accept.

They are not a democratic government. If they were, we should be starting from a different basis. However, they believe that the proposals which the Governor of Hong Kong has made—I believe that he has been the guiding spirit, and much responsibility rests upon him—have stretched the spirit, if not the letter, of the agreement to the uttermost, and the string will stand no more. They believe that the British have been seeking to—I shall not continue. I have taken up my time.

I simply say this to the Government. The Government have no particular strength on this matter. They are building on sand at present. They should recognise their weakness and begin to negotiate on the basis of reaching a settlement.

Lord Henley

My Lords, I respond briefly to the noble Lord, for whom I have the utmost respect. As I believe the noble Lord admitted, the negotiations are very difficult. We negotiate from very different positions of strength. I have to say to the noble Lord that there has been considerable compromise by Her Majesty's Government throughout the many negotia-tions which have been held; and there will be many more negotiations. I reject his criticisms of our attempts to negotiate. There have been many meetings. I stress that there have been compromises by Her Majesty's Government. We would obviously be prepared to consider any further proposals by the Chinese Government.

However, it is important at this stage that we go ahead on this particular front. We intend to do so. We have offered further meetings; and certainly further meetings have been offered with the Chinese Government later this month.

Lord Geddes

My Lords, I welcome the Statement from the Minister on two counts, first, that a Statement has been made, and, secondly, certainly from the British side, that talks are to resume. To my knowledge exactly a year ago bar two days this House had a quite significant debate on exactly this subject. There were many speeches from noble Lords of enormous eminence who warned Her Majesty's Government that they must take this matter very carefully indeed. In that context, I agree almost wholeheartedly with the comments of the noble Lord, Lord Callaghan.

Her Majesty's Government have got themselves into a cul-de-sac. Perhaps I may instance briefly one example thereof. I refer to the statement, if I heard it correctly, about not only pursuing the single seat-single-vote system but that Her Majesty's Government had thought that the limited proposals were uncontroversial with China. By definition, the single seat-single vote system is not acceptable to China, not least on the criterion of the through train. They have said that consistently. I urge the Government, please, to take on board that one has to negotiate with the Chinese in the way that the Chinese accept, and not as Westminster accepts, which the Chinese simply do not understand.

Lord Henley

My Lords, my noble friend is quite correct in that we thought that some of our proposals were largely uncontroversial in Hong Kong. We also thought that some of them were largely uncontroversial in China. I have to say to my noble friend that we were able to reach a common view in talks on a number of matters. As I said to the noble Lord, Lord Callaghan, talks will certainly continue, and we have proposed a further round of talks in December. We will keep our door open and be prepared to continue discussions with the Chinese Government for the benefit of the future of the Chinese Government, ourselves and the people of Hong Kong. I certainly take note of what my noble friend had to say, with his great experience of the Far East, and I am sure that my right honourable friend the Foreign Secretary will take it on board.

Lord Marsh

My Lords, is the noble Lord aware that since negotiations in this round began, there have throughout been voices which warned the Government of the impossibility of achieving results on the stand which they were taking? There is a division between the business community and the government, or a large section of it. Sir Percy Cradock and virtually every other former adviser of the British Government have warned them on the issue right the way through. I should be interested to hear the Minister's views on the recent article on this subject by Sir Percy Cradock. The Government are pursuing a line about which people have warned them, but they refuse to accept the possibility that what they see as a legitimate negotiation could be and is seen by the Chinese as a classic example of British 19th century arrogance which fails to recognise the realities of who will rule Hong Kong in 1997.

Lord Henley

My Lords, I have seen Sir Percy's article. I regret that I have not yet had time to read it, but officials have. Sir Percy is a distinguished former public servant and he is obviously entitled to his views. But we do not believe that it is right to say that there has been any change of policy on Hong Kong. We remain committed to the approach as set out in the Joint Declaration and we need to get on with urgent legislation. There is no reason why that should damage wider co-operation, which I believe is self-evidently in the interests of Britain, China and Hong Kong. That is why we say that the discussions will continue.

Lord Bottomley

My Lords, have the Government considered the wise words uttered today by Sir Percy Cradock.? They are reported in the press and, as we all know, Sir Percy was our ambassador in China at the time of the Joint Declaration. Have the Government considered the economic consequences of not carrying China with us? The recent cancellation of an order submitted for an underground railway by GEC may be a warning of what is to come.

If we act unilaterally, is there not a danger that the Chinese will do the same? The Chinese have already indicated that they will not recognise the agreement and will introduce a new legislature after the transfer of power. Do we really wish to end the last days of British responsibility in chaos and disorder? I hope that the Government will do everything possible to secure an agreement with China.

Lord Henley

My Lords, of course the noble Lord is right to underline the concerns of business. But, as I think the noble Lord, Lord Bonham-Carter, made clear, and I agree with him. business is not the only concern that we should underline on these occasions. There is the concern of the people of Hong Kong which must be borne in mind. I responded to the question which the noble Lord, Lord Marsh, asked about Sir Percy Cradock's article in whatever newspaper it was.

As regards any damage to the Hong Kong economy and the way of life of the Hong Kong people, what we are looking for is stability. We believe that our way forward is the right way to go and it is important that democratic processes should start. As I made clear in the Statement from the Foreign Secretary, for those reasons it is important that that process should continue as early as possible. We believe that what we are proposing does not go beyond the Basic Law which the Chinese agreed. We therefore believe that it would not be in the interests of the Chinese, post-1997, as I said in my response to the noble Baroness, Lady Blackstone, to change what we had already brought in at an earlier stage.

Viscount Slim

My Lords, is it not a fact that politicians generally speak politics? As the noble Lord, Lord Bottomley, said, there is a great need to consider the commercial angle. As other noble Lords have already quietly advised the Government, that is definitely being forgotten. We talk of Hong Kong, but it is the British business in China that will be paramount in the future to the nation. China has to be the largest market for Great Britain in the next 80 to 100 years. It is surely the duty of the Government to get the matter straightened out. So far, as I see it, the Statement merely makes excuses for not obtaining a conclusion to the conversations and talks.

I believe that it is up to Her Majesty's Government, at the right moment and in the right place, to give a little, to make certain that we get agreement before we find that British business in Hong Kong and China is completely ruined.

Lord Henley

My Lords, I do not accept the remarks of the noble Viscount about making excuses. Obviously our commercial interests with China are very important. Trade with China is growing. The balance of trade is in China's favour, and we would wish to maintain any close commercial relations. We do not believe that, with the trade growing, and particularly since it is growing in China's favour, any disagreements over Hong Kong which we believe can be resolved should necessarily spill over into any broader bilateral relationship, whether in trade or other matters.

Lord Mackie of Benshie

My Lords, I wish to ask the Minister a simple question. I thought that my noble friend Lord Bonham-Carter made an excellent point about world opinion. He asked an important question: is the United States—a much more important country than ourselves—at one with the Government's policy?

Lord Henley

My Lords, I can certainly confirm that the United States is fully in support of our policy on Hong Kong.

Lord Stewartby

My Lords, can my noble friend say whether, during the long series of exchanges with the Chinese Government, we have been able to gain a clear understanding as to why they have objected to a number of the proposals which have been put forward? Will he be good enough to comment on an impression which I gained from a visit to China last month? I met a number of people, both in government and out of it, and my impression was that there is in China an absolute determination that Hong Kong should remain a very successful and prosperous commercial centre. However, there was also a considerable nervousness that it might provide a base from which political agitation could be developed to undermine the government itself in China. I should be grateful if my noble friend could comment on that.

Lord Henley

My Lords, I would rather not speculate on exactly why there is intransigence on these matters from the Chinese. Obviously it is a matter for the Chinese Government. I can confirm that it is in the Chinese Government's interests that Hong Kong should remain prosperous after 1997. We believe that it should also remain democratic, and we do not believe that it would be in the interests of the Chinese Government to disturb the processes which have already started and which might disrupt any chances of prosperity continuing and growing.

Lord Shepherd

My Lords, I had hoped, having had relations with Hong Kong for many years, that 1997 would see a transfer of power and responsibility between the United Kingdom and China in a way in which there was friendship and confidence. I do not think that the Government can believe, from the interventions made today, that this House feels that that is likely to be achieved. I do not blame Her Majesty's Government entirely. I believe it is the result of a lack of understanding. My noble friend Lord Callaghan said that the Chinese are not democratic. All that I can say to the noble Lord is that in all my experience, the People's Republic of China has honoured every agreement, political or commercial. I believe that the agreement that was made between Mrs. Thatcher (the noble Baroness, Lady Thatcher, as she now is) and the People's Republic of China will be honoured to the full.

My anxiety—one which I am sure will be felt most in Hong Kong tonight—is that the handing over of power will not be in the spirit in which the agreement was made. Therefore I hope that the Minister, while recognising his difficulties in not having direct access to the department, will see that the message of this House that will go to the Secretary of State is that we shall need to recover the spirit of the original agreement, and to find ways and means by which all the problems can be overcome. To say that we wish to see a democratic structure in Hong Kong is, I have to say to the noble Lord, rather late. I recognise that, having been a Minister of State in the Commonwealth Office who tried to bring some of it about. But there was resistance and difficulty. I think that it is probably too late now to go to the very threshold of antagonism between the two great countries who will have to make the success of that agreement possible and right for the people of Hong Kong. I hope that the noble Lord will recognise genuine anxieties, not only here but also in Hong Kong, and that some new steps have to be taken to recover some of the goodwill that we had together when we signed the agreement.

Lord Henley

My Lords, as the noble Lord will know, any feeling in this House will certainly be taken note of by my right honourable friend the Foreign Secretary. He will certainly take note of what the noble Lord had to say, and also note the remarks of all other noble Lords. The noble Lord said that it was all rather late. But, as the noble Lord, Lord Bonham-Carter, said, we have to start from where we are. It is no use pretending that we have not done things in the past. There were reasons why we could not do things in the past, and no doubt the noble Lord will know why he could not do things in the past. I say to the noble Lord that 1997 is still four years away. Much can happen in that time. We shall certainly continue to negotiate and to seek agreement so far as is possible with the Chinese Government in the best possible interest of the people of Hong Kong.

Lord Harmar-Nicholls

My Lords, my noble friend accepted the message from the noble Lord, Lord Shepherd, which I believe was very wise. As the noble Lord said, it was based on experience. Hong Kong is not a new problem for Parliament. We have been involved in these matters for many years. We have had delegations from Hong Kong and we have had duels year after year. I do not believe that anyone who listened to the exchanges over those years expected the position to be very different to what it is. It was quite clear that, as we got nearer to the hand-over date, the real difference between rigid communism and our democratic approach would show itself. The only message which ought to come out of what has been said is this: all the best with continuing the negotiations; achieve what you can, but the vital aim at the back of our minds is, however it ends, in or before 1997, it must not end in acrimony. It must be ended in the spirit in which the agreement was made. Quite apart from individual items, which will be battled for, let us see that that overall spirit is not completely lost.

Lord Henley

My Lords, I simply could not agree more with my noble friend. These matters must not end in acrimony. Perhaps I may add just one rider. They must also end in the interests of the people and the economy of Hong Kong.