China and Hong Kong

§ Mr. Speaker

Before I call on the Foreign Secretary, I must tell the House again that 36 right hon. and hon. Members wish to participate in the debate. Sadly, because of the late start, they will not all be called. I intend to limit speeches between 7 pm and 9 pm to 10 minutes, and if those who are called before 7 will bear that limit in mind, many more of their colleagues will be able to participate.

§ The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe)

Mr. Speaker, last Wednesday I reported to the House on my visit to Hong Kong. The exchanges which followed that statement reflected the very deep concern felt by all hon. Members about the future of the territory in the wake of the recent horrific events in Peking. Very important questions are at issue here, and it is right that they should be fully aired in this House. The Government accordingly welcome this opportunity for further debate.

The House has before it the report on Hong Kong of the Select Committee on Foreign Affairs. I should like to take this opportunity to thank the Committee for its report. The Government's formal response will issue in due course. The House will share my view that that report addresses our concerns, and those of the people of Hong Kong, seriously and comprehensively.

We are all conscious of Britain's historic responsibility for Hong Kong's future, and of our obligation to act with vigour and determination in fulfilment of that responsibility. We have never sought to shirk that obligation. Indeed, we were guided by it when first we took the decision to enter into negotiations with the Chinese about the future of Hong Kong.

By treaty, 92 per cent. of the area of Hong Kong reverts to China in 1997. The remaining 8 per cent. could never be viable on its own. After 18 months of tough negotiation, it became clear that the Chinese Government were not willing to contemplate the continuation of British administration beyond 1996, so we set ourselves the task —with the support of the people of Hong Kong—of securing alternative arrangements which would maintain the stability and prosperity of Hong Kong and the freedoms and way of life of its people.

The agreement that we reached—the Joint Declaration was widely recognised at the time, in Hong Kong, in this House and around the world, as the very best that could be arrived at in the circumstances. It was not an agreement imposed on Hong Kong, but one which the Executive and Legislative Councils were each able firmly to commend to the people of the territory. Under it, Hong Kong will have its own Government comprising Hong Kong people, not people brought in from China; the Socialist system and Socialist policies will not be imposed on Hong Kong from China; nor will Hong Kong pay taxes to China. Hong Kong's capitalist system and its way of life will continue, with all its human rights and freedoms, its laws and its legal system, its own freely convertible currency, its financial markets, its free port. None of that will change.

Hong Kong will conduct its own relations with other countries on matters such as trade, culture and civil aviation, and be able to conclude agreements on those 1164 subjects. It will continue to participate in international organisations as it does today. Entry into Hong Kong from China will continue to be regulated as at present, so that Hong Kong will not be flooded by immigrants from the mainland. By contrast, Hong Kong people will remain free to come and go as they please. Public order will be the responsibility of the Government of Hong Kong, as it is today. It is plainly provided that any Chinese military forces stationed in Hong Kong will not interfere in internal matters. I shall have more to say about that in a moment.

The Joint Declaration was—and is—a good agreement, and the people of Hong Kong continue so to regard it. That was confirmed by the Office of the Members of the Executive and Legislative Councils in the statement which it circulated to Members of this House on 16 June. Indeed it described it as a "triumph of diplomacy". The declaration is accepted on all sides as the basis for all that now needs to be done to rebuild confidence in Hong Kong and, in particular, to strengthen the Basic Law in which the provisions of the declaration are to be given legal effect.

I do not in any way seek to minimise the anxieties of Hong Kong people about the future. It was precisely to address those anxieties honestly and directly that I took the earliest possible opportunity to visit the territory after the events of 3 and 4 June. The Joint Declaration is, as I said during that visit, a text for the bad times as well as for the good. Events in China have not invalidated it, nor altered the assumptions on which it was based—on the contrary.

What is lacking today, and what must be restored, is confidence—and confidence that China will honour the agreement after 1997. That confidence has been gravely shaken. It certainly cannot be restored overnight. It will take time and effort. That is why China's attitude in the coming months and years will be of such crucial importance. China has reiterated her own commitment to the Joint Declaration, and we welcome that, but more—much more—will be needed to regain the trust of people in Hong Kong. There must be concrete steps to provide reassurance to the people of Hong Kong—steps that will need to be continued and reinforced over the months and years ahead. Once again, there are signs that the Chinese Government realise this. They must now act accordingly.

§ Mr. Bowen Wells (Hertford and Stortford)

Can my right hon. and learned Friend confirm that the Joint Declaration, and the treaty registered by it in the United Nations, for the first time gives a treaty base—recognised and signed by China—for the future of Hong Kong?

§ Sir Geoffrey Howe

My hon. Friend is absolutely right, but I hope that he and the House will forgive me if I do not give way as I customarily do. I have had the opportunity to answer questions on this matter for three and a half hours in the House, and to answer my hon. Friend in the Select Committee for about six hours. If I am allowed to continue my speech I shall come to what the Select Committee said.

As we have always recognised, and as the Select Committee said in terms, it is not possible to provide absolute guarantees for Hong Kong's future". One feature has always been identified as providing some real assurance in that respect. That is the natural self-interest of China itself. It plainly must be in the interests of the Chinese Government—any Chinese 1165 Government—to sustain the success of Hong Kong and to do so in the only way that it can be done—on the basis of the Joint Declaration and the principle of one country, two systems.

For our part, Her Majesty's Government of course accept the need to formulate policy, to take action so as to offer further assurance to the people of Hong Kong, to strengthen their confidence in the future. First, as I told the House on 5 July, a Bill of Rights for Hong Kong will be introduced as soon as possible. The Joint Declaration already states that the international covenants as applied to Hong Kong shall remain in force after that date. The draft Basic Law reflects this in article 39. These are very worthwhile achievements but, understandably, the people of Hong Kong are looking for more, and the Government accept their concerns. The proposed Bill of Rights will ensure that there is one fundamental legal text which sets out all the rights and freedoms that the people of Hong Kong currently enjoy. In 1997 it will form part of the existing law and will continue after the transfer of sovereignty in accordance with the provisions of the Joint Declaration.

Secondly, we shall firmly and painstakingly persist, in all the ways that are open to us, in making an effective input into the drafting of the Basic Law. The Basic Law drafting process is at present in suspense. The Chinese have said that they intend to prolong the present consultative period. In considering the further timetable for promulgation of the final text, the Chinese should give full weight to the need to produce a Basic Law which commands the widest possible support in Hong Kong, and to the need for sufficient time in which to produce it. That should take priority over all other considerations. I urge the Hong Kong people, and in particular those who have the opportunity to serve on the Basic Law drafting committee, to take full advantage of every opportunity to express their views so as to ensure that the draft is further improved.

When the drafting process is resumed, our priority will be—as it has been all along—to see that the Basic Law conforms fully with the spirit as well as the letter of the Joint Declaration. As co-signatories of the Joint Declaration, it is our right to insist upon that point. Moreover, getting the Basic Law right—and being seen to do so—will have a crucial effect on confidence in the run-up to 1997. If it is to boost confidence, it will need to meet the specific concerns that have been expressed about the current draft. I will give one or two examples.

The Foreign Affairs Committee has drawn attention to the very real anxieties about article 18 of the draft Basic Law. In its present form, this could enable the central Government in Peking to declare a state of emergency in Hong Kong after 1997. As I said to the House on 5 July, this is one matter that we are taking up with the Chinese authorities. In our discussions with them about the Basic Law, before the drafting process was suspended, we had already impressed upon them the need for this article to be very tightly defined. Following the events in Peking, this provision is now of even greater concern. It is clear that at the very least the special administrative region Government of Hong Kong will have to be directly and closely involved in any decision as to whether or not a state of emergency has arisen. As the Select Committee has also recommended, article 157 of the draft Basic Law, which 1166 deals with interpretation, will need to be carefully reconsidered. There are genuine worries about this article in Hong Kong and a way must be found to allay them.

Another very important concern, to which the Foreign Affairs Committee drew attention, is that of the stationing in Hong Kong of Chinese military forces. This goes to the heart of the fears of people in Hong Kong about their future. That is why we negotiated long and hard to secure agreement to the principle that Hong Kong would be responsible for its own internal security after 1997. and we achieved that objective. The provision is there, in annex one (section 12) of the joint declaration. The Hong Kong police force is being expanded to enable it to take on this role.

Nevertheless, the horrific events of 3 and 4 June have undoubtedly greatly intensified concern in Hong Kong on this point. We shall therefore be doing all that we ca .n to bring home to the Chinese Government the fact that their deeds as well as their words will be of fundamental importance. On this issue, the Chinese should not lose the opportunity to send a clear message of reassurance to Hong Kong's people. The question was already under active discussion in the Joint Liaison Group. The work of the group is, for the moment, suspended, but the group will continue to have the key role in ensuring the implementation of the Joint Declaration. No one in Hong Kong would dispute that the Joint Liaison Group will need to meet again before long, with this issue at the top of the agenda.

The next issue with which I wish to deal has already commanded a good deal of attention in the House—the development of representative government. It is an issue which requires the most careful and considered judgment. The Government therefore noted with particular interest what the Foreign Affairs Committee had to say on the subject. We agree with the Select Committee that the views of Hong Kong people on this matter are of crucial importance. We have always sought to base our policy on the principle that the pace of development should reflect the wishes of the whole community.

The unanimous view expressed by OMELCO on 24 May was a very significant step towards the establishment of a consensus in Hong Kong. After the events of 3 and 4 June, we must seek to determine how far that consensus now extends. It would be wrong for us to seek to anticipate that study, but it is already clear that the Hong Kong Government will need to reconsider their present plans for the elections in 1991.

My visit to Hong Kong left me in no doubt about the importance of another major issue—the prospect that emigration from the territory, particularly but not only by well-qualified professionals and middle managers, will increase. Everything that has been achieved in Hong Kong has been built on the energy and ability of its people, so the emigration of talent is a matter of great concern. The House accepts, and I hope that the people of Hong Kong will come to understand, that the answer to this problem cannot be found in the prescription most frequently pressed in Hong Kong—the granting of an open-ended right of abode to all British dependent territories citizens in the territory. It is seen as an insurance policy, but unlike any other such policy it is an insurance policy on which claims could be made by all the potential beneficiaries at any time. The practical difficulties of absorbing hundreds of thousands—possibly millions—of people make that impossible to contemplate. It would be wrong to raise 1167 expectations that we could not possibly meet. I do not believe that the House would support such a departure from the immigration policies pursued by successive British Governments since the early 1960s.

Nevertheless, it is surely right that we should do what we can to sustain in those people on whom the success and prosperity of Hong Kong significantly depends the confidence to remain. Their continued presence in the territory benefits everyone living there. If they lose faith in the future, all of Hong Kong will suffer. That is why we are working urgently on a scheme which will make some provision for people in both the private and public sectors on the basis of value of service to Hong Kong, as well as connections with Britain. New legislation may be necessary. Our response will be as generous as it can be, within the inevitable constraints.

Our objective will be to devise a scheme which is as open and fair as possible, consistent with the overriding aim of encouraging people whose service is of value to Hong Kong to remain there. That applies to those involved in the administration of Hong Kong—and not exclusively at the senior levels, and to those whose professional, technical, entrepreneurial and managerial skills are essential to helping Hong Kong to remain prosperous and stable. It also applies to those in particularly sensitive posts. A further, more detailed announcement will be made as soon as possible.

The international community at large has an important interest in Hong Kong's continuing success as a major financial and commercial centre. In our contacts with our partners and friends, we are emphasising that they, too —as democracies, and as major trading partners—have a role to play in sustaining confidence in the territory. We shall be making this point at the economic summit in Paris this weekend.

I was most interested in what my right hon. Friend the Member for Guildford (Mr. Howell) had to say on this subject over the weekend. Clearly we must distinguish between two distinct factors, which the Select Committee report identified. The first is the immediate need to reinforce confidence in Hong Kong. We hope that the scheme to which I referred will make an important contribution to that. The international community can help in that respect by making it clear that they continue to have confidence in the future of Hong Kong and in the Joint Declaration.

The second distinct factor is the action that might and should be taken in the case of some fundamental and overwhelming violation of the Joint Declaration. That is obviously something that we are all hoping to avoid and working to prevent, but we cannot, in all prudence, ignore the possibility. The people of Hong Kong need to be given the strongest possible assurance that, should the worst come to the worst, there would be help for those in need of a home of last resort. That reassurance would be greatly strengthened by a wide international acknowledgement that this is a problem with which no one country alone could cope. I have already discussed the issue with a number of Foreign Ministers. The House will have noted what Prime Minister Mulroney of Canada said in London on Tuesday, 11 July: We should all be ready to co-operate with the United Kingdom in the delicate and important task of re-establishing grounds for confidence among the people of Hong Kong that 1168 their territory has a secure, viable and democratic future well beyond 1997. The problem of Hong Kong is not only and just a problem for the United Kingdom. The problem of Hong Kong and its security and well being is a problem for the world.

§ Sir Russell Johnston (Inverness, Nairn and Lochaber)

Before the Foreign Secretary leaves this central and important issue, will he say a word about the views of the governor of Hong Kong, which he has not yet mentioned? I think that it would be fair to say that the governor would not altogether go along with what the right hon. and learned Gentleman has said.

§ Sir Geoffrey Howe

The governor's views—which, as the hon. Gentleman knows, were quite properly expressed to the Select Committee—have been taken into account both by the Government and by the Select Committee in reaching our conclusions. I wish to take this opportunity once again to pay tribute to the distinguished way in which the governor carries such a formidable burden upon his shoulders.

The task of turning the general concern of civilised nations into an explicit willingness at some future date to contemplate receiving people from Hong Kong is not something that can be easily achieved; it certainly cannot be achieved overnight. Over the coming weeks and months we shall be using every opportunity to raise the issue with our partners and friends.

The growing problem of human migration is one of the starkest and most intractable of our time. It has manifested itself most acutely within Hong Kong in the presence of almost 50,000 Vietnamese boat people. I told the House last week of the measures being taken to tackle this problem effectively and humanely. My hon. Friend the Parliamentary Under-Secretary of State will respond further to points on that issue in his closing speech.

§ Sir Philip Goodhart (Beckenham)

Can my right hon. and learned Friend give an assurance that physical force will not be used to compel those unfortunate men, women and children to return to a Communist country from which they have spent most of their lives trying to escape?

§ Sir Geoffrey Howe

The balance of the argument in that respect was set out in my statement last week. It was also dealt with in the report of the Geneva conference. My hon. Friend will recollect the conclusion that for those who do not qualify as refugees there is no prospect of passing through Hong Kong to a future somewhere in the remainder of the world which cannot and does not exist. In those circumstances, the entire balance of argument must point in the direction of trying to secure their return to their own land. That was the view expressed by the Geneva conference, and we must lend all our efforts to that end.

Our deep, immediate and continuing anxiety for Hong Kong is inevitably linked to our wider concern about the course of events in China. The House, the Government and the British people have repeatedly condemned the Chinese Government's blatant and reckless use of force against unarmed civilians. In common with other countries, we have concluded that business as usual cannot and should not be sustained in present circumstances. China must be left in no doubt as to the damage that her international reputation has suffered, but in our response we must have clearly in mind what we want to achieve. We want a secure future for Hong Kong and we want China 1169 to return to the path of genuine reform. Neither the international community, nor the Chinese people—nor, in particular, the people of Hong Kong—will gain if China is driven into inward-looking isolation.

It was with those considerations in mind that I announced a package of specific measures in my statement to the House on 6 June. Those steps have been paralleled by other Western countries. The Madrid European Council on 27 June agreed a set of measures reflecting those already taken by some partners, including the United Kingdom. The United States, Japan and others have adopted mutually reinforcing measures of their own. All are intended to bring home to the Chinese authorities the extent of our common concern.

However, in the interest not least of the people of Hong Kong, channels of communication must remain open. That was the clear view expressed when I was there last week. Hong Kong does not—indeed, cannot—wish to isolate China, and neither should we. For that reason, the Government do not accept the argument that we should impose blanket trade sanctions on China. Such measures have never worked in the past. They would be damaging to the Chinese people, for whom we have great respect, and with whom we wish to build a closer friendship, and they would be immediately damaging to Hong Kong, which has an enormous stake in China's economic development.

China and Hong Kong are each other's largest trading partner. Hong Kong provides nearly a third of China's foreign exchange earnings and two-thirds of her foreign investment. Sanctions would tend inevitably to drive the Chinese into a corner and would put a severe brake on the economic reform process which gives hope to the Chinese people for the future. Therefore, in common with the American Government, the Japanese and our EC partners, we do not intend to stand in the way of normal commercial dealings. For the time being, however, we have postponed consideration of concessional financing arrangements for new projects in China under the aid and trade provision. We are also suspending decisions on additional ECGD cover for China.

I told the House yesterday that the exhibition "British Expo: China 89" due to open in Peking in November has been postponed. The House will also be aware that the World Bank has deferred consideration of new loans to China, in view of the current economic uncertainty there. Those are all reasons for the Chinese authorities to demonstrate that they intend to stay on the path of economic reform and openness—an essential element of which must, as the European Council noted on 27 June, be respect for human rights.

At the end of the day, China will choose its own destiny, but measured and consistent expressions of concern from the international community about Chinese political repression can and will have a significant impact. Nowhere is that prospect more important than in Hong Kong, for Hong Kong's future must inevitably lie with China. The members of OMELCO, in their statement of 19 June, said: We are Chinese and proud of it".

However, they equally and rightly insist that Hong Kong's way of life is, and should remain, distinct. That is the essence of the assurance of "One country, two systems". The interests which led China freely to accept that undertaking remain as valid today as they were when the undertaking was given. If anything, they are stronger. In the economic sphere, it is no longer just a question of 1170 foreign exchange—millions of people in the neighbouring province of Guangdong are directly employed by Hong Kong enterprises.

China must recognise that her actions have damaged confidence in Hong Kong and that she has a vital role in repairing that damage. We have already been transmitting that message to the Chinese Government and we shall continue to do so. In the same spirit, and to the same end, it would, I think, be right for us to take advantage of any sensible opportunities that may arise for contacts for that purpose between Ministers with responsibility for Hong Kong.

For almost 150 years, Britain has administered Hong Kong with fairness, justice and dedication. We have forged a unique partnership between Britain and the territory's Chinese inhabitants. That partnership has survived many tests and has gone from strength to strength. The last eight years of British administration which lie ahead will pose new and difficult challenges, but our commitment to the people of Hong Kong will be as strong as ever. Her Majesty's Government will strive with all their energy to achieve a secure and succesful future for Hong Kong and its people.

§ Mr. Gerald Kaufman (Manchester, Gorton)

The Foreign Secretary has referred to his visit to Hong Kong and, as he will know, last month, through the courtesy of the Hong Kong Office, I was able to go there too. During my visit, an Air Force helicopter flew me along the border between the New Territories and the People's Republic of China. Almost immediately below I saw the forest of skyscrapers that is the Chinese city of Shenzhen.

A year ago, I was in Shenzhen and marvelled at the dynamism which had created that burgeoning and booming commercial centre in such a short period. Like others who at that time had the opportunity of visiting China, I was profoundly encouraged not only by the economic progress that China is making but, even more, by the implications for political liberalisation of that economic progress. I was able to discuss with Chinese officials the optimistic prospects for economic links between Shenzhen and Hong Kong, of which the Foreign Secretary has just spoken—such a tiny distance separating them; economic links both before and after 1 July 1997.

Now, sadly, it is impossible to use the word "optimistic" in relation to Hong Kong. The natural misgivings of the people of that territory about the unknown factors in the impending transfer to China had been alleviated by the positive achievement of the Joint Declaration of 1984 and the progress made since in drafting the Basic Law—progress involving genuine consultation between China and the people of Hong Kong. Now, developments in China, and especially the massacres in Peking, followed by the stream of executions since then, have made Hong Kong wary about how much it can trust the Peking regime to adhere to the Joint Declaration.

That is why, just as I did, the Foreign Secretary will have heard during his visit to Hong Kong from representatives of the people there—none of them, I am afraid, directly elected; that is something for which the Labour party when in government must bear responsibility with the Conservative party when in government—about safeguards for which they are looking in the period 1171 before the Basic Law is completed and before it goes forward for enactment by the National People's Congress of the Chinese People's Republic.

Many of those safeguards are considered in the report on Hong Kong of the Select Committee on Foreign Affairs which was published the week before last. As I shall explain, I do not agree with all that report's conclusions and recommendations, but it is a most important document which contains much valuable material and many positive suggestions which ought to be adopted. I congratulate my right hon. and hon. Friends who, together with Conservative Members, worked so hard and expeditiously to complete that report.

The report deals with large matters and with matters which appear to be small but which, nevertheless, are important. For example, I draw attention to the recommendation in the report about the location of the British consulate general and the importance of it being prestigious. Those of us who were in Hong Kong not long ago and saw the huge demonstrations and signs outside the office of the New China news agency will know the symbolic importance that the people of Hong Kong will attach to the location of an office. I hope that, when the Government come to respond to the report, they will deal with that matter among a number of others.

The members of the Committee tried to come to terms with another problem to which the Foreign Secretary referred a moment ago—the apparently intractable problem of the boat people from Vietnam. No one who has seen the conditions in which the Vietnamese are held in Hong Kong—I in no way criticise the Hong Kong authorities who, in the circumstances, have done a miraculous job in providing conditions of cleanliness, good health and good food, but, nevertheless, the conditions are so awful that no one who has seen them can fail to be moved by the plight of the people in those centres and camps—

§ Mr. Chris Mullin (Sunderland, South)

Does my right hon. Friend agree that one assurance that we can give the people of Hong Kong is that, however rough the going gets, we shall never hold refugees from Hong Kong in conditions quite as deplorable as those in which many Vietnamese refugees in Hong Kong are held?

§ Mr. Kaufman

I very much hope that that would never occur. I am sure that it would not.

In its report, the Select Committee recommends mandatory repatriation of migrants from Hong Kong. I shrink from such a solution, but I can understand why the Committee arrived at that view. The flow has to stop, and it is arguable that the best way of stopping the flow is for potential migrants in Vietnam to witness the return of their compatriots and so realise that migration is fruitless.

I am more persuaded by the views put forward by the British Refugee Council which would entrench protections for human rights in any policy aimed at dealing with the problem. I value the council's recommendation that People who are not granted asylum should not be returned to Vietnam unless there is clear evidence that it would be safe for them to do so, firm assurances are given that they will not be penalised in any way, and their well-being and resettlement are thoroughly monitored by the United Nations High Commissioner for Refugees. 1172 The key to solving the problem and obtaining such assurances is to accept the British Refugee Council's views about the relationships with Vietnam. The council says: The desperate poverty in Vietnam must be tackled as a matter of urgency and we urge Western governments to mount a major aid programme and improve relations with Vietnam. We believe that economic aid and improved relations will make a major contribution to improving the human rights situation which will also help to stem the flow of refugees. Economic development will encourage others to stay and those who have left to return. The British Refugee Council goes on to say: Normalisation of relations with Vietnam by the West and the lifting of trade and aid embargoes are essential, and should not be tied to negotiations about refugees. However, they will begin to address one of the root causes of migration. People will only stop leaving when they see hope for the future for them in Vietnam, and that depends on the resumption of international co-operation with the Government. Those are sensible and important suggestions.

Meanwhile, I hope that when people in Hong Kong seek the right of abode in Britain and wonder why their demands are not immediately accepted, they will take into account the problems caused to them by the arrival in Hong Kong of migrants from Vietnam, who are only one eighth of the proportion of their population that British dependent territory passport holders in Hong Kong are of the population of the United Kingdom.

Much attention has understandably been focused on what the Select Committee's report says about demands for right of entry to Britain and right of abode here of Hong Kong British dependent territory passport holders, to which the Foreign Secretary referred this afternoon.

The Labour party agrees with the report's conclusion, which, as I understand it, is also the Government's view, that it would not be right to offer any commitment to those passport holders on the right of entry to the United Kingdom or the right of abode here.

I do not believe that it is possible to obtain or offer definite international guarantees of the kind proposed in the report to British dependent territory passport holders, but I agree with the spirit of the report that this is a matter on which international discussions should take place with a view to obtaining assurances about policy in the event of a crisis after the transfer of Hong Kong to China in 1997. I trust that that matter will be a major item on the agenda for this weekend's Paris summit, and on the agendas of the Commonwealth Heads of Government meeting in Kuala Lumpur in the autumn and of the European Community summit at the end of the year. It should also be the subject of discussions between the Government and the United States Administration.

The Select Committee suggested that limited relaxations of our immigration laws should be implemented for specific groups in Hong Kong, and we can travel a certain distance with the Committee in that respect. We see no difficulty in offering right of abode to the very small number of war widows. In the Labour party's policy review report published two months ago, we made a clear commitment to non-Chinese minorities in Hong Kong, to whom right of entry is also recommended by the Select Committee. We accept the Committee's recommendations in respect of certain students having a clear and specific link with this country through their physical presence here. Those are all small and finite categories. As the Government are still considering them, I understand why the Foreign Secretary did not mention those categories this afternoon. However, I hope that the Government will find 1173 it possible to accept all those recommendations. They could so so without creating any controversy at all in this House.

We cannot agree with the Select Committee's recommendation for limited relaxation of our immigration laws in respect of two further categories, including people described as occupying key positions. Last week, when responding to the Foreign Secretary's statement on his return from Hong Kong, I told him that we recognise that certain Crown servants might feel or find themselves at risk as the transfer of Hong Kong to China approaches. We consider that it would be right for the Home Secretary to consider using his discretion under the Immigration Act 1971 in their favour, on an individual basis. The Committee's report also refers to the Home Secretary exercising his discretion under the British Nationality Act 1981. That option should also be considered positively. Such discretion should be used generously where appropriate, but it would not be right to create a special catch-all category of Crown servants, as the report recommends.

When I met Dame Lydia Dunn in Hong Kong and again in Britain, I was impressed by her argument—also made by those who argue for a blank right of abode, which we do not accept—that the creation of elite categories would be divisive and could not be defended in Hong Kong. Dame Lydia's view is that the creation of such categories would make it more difficult to govern Hong Kong. Still less do we accept the proposal to give assurances to people of affluence or influence in the private sector, which would be socially divisive. I see no reason why such people should be given preference over any other British dependent territory passport holders in Hong Kong. Morever, I cannot see how such a group can be defined, whether in an Act of Parliament or in an immigration rule, without introducing invidious distinctions. While we shall examine the scheme that the Foreign Secretary said the Government are considering, we have grave doubts about its implications.

While we go some but not all of the way with the Select Committee on the right of entry and abode, we accept almost completely its recommendations for progress with democracy in Hong Kong. I hope that, when the Government respond to the Select Committee, they will not go for the lowest common denominator—as they did when the Hong Kong Government issued a White Paper on representative government last year. That was a serious error, as is confirmed by the events that have taken place in China since then.

We concur with the Committee's view that 50 per cent. of the places in the Legislative Council should be directly elected in 1991 and that full direct elections should be introduced for 1995. We also agree with the Committee that the chief executive should be elected, but prefer election by direct adult suffrage rather than through an electoral college after the transfer of sovereignty in 1997, as proposed by the Select Committee. We also agree with the suggestion made to me when I was in Hong Kong that the chief executive should be made accountable to the Legislative Council. It is most important that as much direct, representative, responsible and accountable democracy as possible should be available in Hong Kong before its transfer to China in 1997.

We see merit in the Committee's recommendations that assurances should be sought from the Chinese Government on the Basic Law and the Joint Declaration. 1174 It would be constructive to achieve continuity in the interpretation of laws existing before the creation of the Hong Kong special adminstrative region, so that there can be confidence in the judicial system. We support the Committee's recommendation for a Bill of Rights and are glad that the Government are already acting on it. It is important that the Basic Law accords in every particular with the Joint Declaration.

In debate on the Basic Law one year ago, I drew attention to certain apparent discrepancies between the Basic Law and the Joint Declaration and expressed the hope that they would be remedied. For that reason if for no other, it is important that the Hong Kong representatives should resume their work on drafting the Basic Law. I understand completely why they withdrew from that work, and in the circumstances they were right to do so. However, as the draftsmen's absence gives the representatives of the People's Republic of China a much freer hand and would provide them with excuses if the Basic Law is regarded as being unsatisfactory, when it is completed, it is proper that the Hong Kong representatives should return to the work of drafting it. Even so, I agree with the Foreign Secretary that the People's Republic should consider favourably extending the timetable for the Basic Law process. The British Government should strongly represent that view to the Chinese Government.

The Foreign Secretary spoke of making contacts with Chinese Ministers where appropriate, and mentioned the possibility of meeting his counterpart at the United Nations in the autumn. The right hon. and learned Gentleman should also consider an early formal and specific meeting with his counterpart, because it is important to put issues directly to the Government of the People's Republic. Above all, and in line with the view of the Select Committee, the Government should put it to the Government of the People's Republic that the People's Liberation Army should not be present in Hong Kong after the transfer in 1997. To the whole world, the current image of the People's Liberation Army is one of blood and barbarism. Even if the People's Republic expresses contrition—which so far it shows no sign of doing—it will take a long time for that image to fade.

I find particularly repulsive reports in today's newspaper of a trip around Tiananmen square yesterday for western tour operators. I find equally repulsive the mercenary and cold-blooded statements made by some of those tour operators when they visited the area where the massacre took place and saw physical signs of it. It is clear that the Chinese Government believe that the slaughter in Tiananmen square can be easily forgotten and that, after routine protests by western liberals, it can quickly be business as usual between the Government of the People's Republic of China and the democracies. It is essential that the Chinese Government are made to understand with crystal clarity that memories are not so short, and that horror cannot so speedily be erased.

That is why we on this side take exception to the attitude expressed yesterday by the Foreign Secretary towards the mission of the 48 Group which is due to visit China in October. We deplore any British business group visiting China so soon after the massacres. To exchange pleasantries in Peking so soon after a barbaric crime is insensitive enough. To drive past the site of that atrocity, as the mission is bound to do during the five days when the group is due to be in Peking, is even worse. Worse still is to tout as an attraction a meeting with Li Peng, the Prime 1175 Minister of the Government responsible for the massacres. Yet the Department of Trade and Industry is providing financial assistance to the mission. The brochure says: DTI support will be available to participants in the mission on the usual terms, as a contribution to travel cost. Official facilities will be drawn upon to the full. Lord Young, the Secretary of State for Trade and Industry, is on record as welcoming and commending the mission.

In the full immediate flush of horror at the Peking massacre, the Foreign Secretary said: there can be no question of continuing normal business with the Chinese authorities."—[Official Report, 6 June 1989; Vol. 154, c. 30.] That firm and clear attitude has not lasted much longer than the time that it took to utter the words. Yesterday, the Foreign Secretary took every opportunity to defend not only the trade mission but Government support for it.

I wish that the right hon. and learned Gentleman would understand what use the Chinese authorities will make of the arrival of such a high-powered mission officially sponsored by the British Government. The propaganda value is incalculable. Does he not realise that to continue Government sponsorship of such a mission will encourage the Chinese Government to believe that, no matter what they do in the future or have done in the recent past, the British Government will accept it? The Government should cancel their sponsorship of the mission without delay. To continue sponsorship will send absolutely the wrong signal to Peking.

I do not say that there must never again be trade relations between Britain and China. Nor do I say that there must never again be cordial or even close relations. China will outlive this regression, just as it outlived the cultural revolution, to rejoin the wider world community in a more open and encouraging way than ever before. If China is to become a welcome member of the world community again, with all the wisdom and experience that that ancient nation can bring to civilised exchanges, she must first demonstrate that what happened in Peking last month was an aberration that will not be repeated. While the Chinese Government continue the present sickening series of executions, many of us will not be convinced.

Yet we want to be convinced. We want to believe that the enormous encouragement that we have drawn from the remarkable Chinese experiment in economic pluralism can be resumed. Our admiration for the Chinese people, their skill, industry, cheerfulness and bravery, continues unabated. Our admiration for those who stood up publicly for democratic values at their own peril is admiration for the real China, which many of us have visited and marvelled at.

We want to resume close friendship and personal relations with the Chinese Government. We ask them to make that possible. We say to them, end the executions, give clear and firm assurances to Hong Kong, and show by responding to what we ask for on the Basic Law and the Joint Declaration that, although we have been living through a nightmare, that nightmare will soon come to an end.

§ Mr. Edward Heath (Old Bexley and Sidcup)

It is now some 20 years since I first went to Hong Kong, and in the intervening period I have returned there many times. I have developed an immense admiration for the people of Hong Kong and their achievements, which have grown progressively faster over those two decades.

When the Joint Declaration was signed it was natural that the people of Hong Kong were anxious about the future. But in the few years that have elapsed since then confidence in Hong Kong has grown, and economic activity and financial success have continued and even increased. Then came the tragic disaster of last month.

The Foreign Secretary was absolutely right to go to Hong Kong. He has been criticised in some quarters for it. He must have known the reception that he would receive, but his visit was invaluable not only for him to see at first hand the circumstances in Hong Kong and to inform his colleagues in the Government of them, but as a lightning conductor for the intense feeling on the island. For that he should be most strongly commended. His services to Hong Kong and to this country in so doing have been invaluable.

In the words of some friends of mine in Hong Kong, we are still stunned by the traumatic experience through which we have passed. Many of us here, too, are still stunned by the trauma in Peking and other big cities in the People's Republic of China. I acknowledge immediately that I am one of them. No one believed that it could possibly happen. How could it happen when the people at the top had themselves suffered during the cultural revolution? Deng Xiaoping said to me, "I am here only because Mao Tse-Tung said that not a hair on my head was to be damaged." His son was thrown out of his college window, his back was broken and he was denied treatment. How could those in authority in Peking have allowed the massacre to happen, or indeed authorised it? We still need to know the whole story. Perhaps we shall never know it, but the ghastly tragedy was there for us all to see.

The pernicious and dishonest journalist, Edward Pearce, has accused me of condoning the massacre. I have never condoned it for a moment. I am not ashamed that in 1972 as Prime Minister I brought about full diplomatic relations with the People's Republic of China. It was in the interests of this country and Hong Kong that we should have friendly relations with China. In my first discussions with Mao Tse-Tung I obtained from him, in the presence of Zhou Enlai, Deng Xiaoping and Hua Guofeng, an undertaking that nothing serious would happen in Hong Kong and that the changeover in 1997 would be peaceful. That was a valuable undertaking from those in control then and who proved to retain control in the following years. I could not possibly condone for one moment the massacre in Peking and the executions and shootings in the other cities that followed.

I now come to the position in Hong Kong today. The Foreign Secretary is right to emphasise that an increase in confidence is required above all. He would be the first to add that that is the most difficult thing in the world to bring about. It is difficult to achieve that in any circumstances, let alone in circumstances as bad as these.

I agree with the right hon. Member for Manchester, Gorton (Mr. Kaufman) that perhaps Peking will now realise that it has shocked not only Hong Kong and Britain but the rest of the world, and that it will take a 1177 considerable time to restore confidence. It remains to be seen whether, as happened after the cultural revolution, there emerge people who want to promote peaceable development in that enormous country, not only economically but politically. I do not underestimate the political difficulties of changing organisations and institutions in a country of 1,050,000,000 people. I have never been able to work out what the most admirable constitutional arrangement would be and I have never met anybody who could. That must be acknowledged. But until we see proof that the movement is political as well as economic, we shall find it very difficult to regain our confidence in Peking.

I have differed in the past with my right hon. and learned Friend the Foreign Secretary on the question of the speed and the form of democratisation in Hong Kong. He mentioned it again today, saying that it was receiving consideration. My view is that the only action that we can take in the near future that would do something to restore confidence in Hong Kong is to speed up both the timing and the method of democratisation. I am afraid that I have always believed that the advice that my right hon. and learned Friend received was wrong. It came from the wrong people, who had an interest in maintaining the present circumstances, first, because they could not trust democracy in Hong Kong and, secondly, because they wanted to be in a position to hand over Hong Kong in 1997.

Let me repeat my request, which I have made in two earlier debates: that my right hon. and learned Friend—who is backed by the organisations in Hong Kong—should speed up the process and the method of democratisation.

§ Mr. Robert Adley (Christchurch)

I do not think that anyone in the House dissents from my right hon. Friend's sentiments about democracy in Hong Kong. Does he recall that fears used to be expressed that the two most widely organised political bodies there would turn out to be the Communist party and the Guomindang? Does that still obtain, and is it a danger that we need to consider?

§ Mr. Heath

I agree that that was said. The answer is to get the other organisations in Hong Kong going, which would maintain the democratic basis. Surely we as a country have enough experience to help Hong Kong to organise its parties in that way.

I know that others have taken the view that Hong Kong will never have a party organisation. I do not accept that, and what my hon. Friend has said denies it. The existing groups—even if they are not categorised as political parties —are there and will act. I hope that any status that the Communist party in Hong Kong may have had has now been demolished by events in Peking, but that does not alter the fact that we must play our part—or, at least, the governor and his council must play their part—in the organisation of a great democratic system in Hong Kong.

I do not agree that those in Hong Kong have a right of abode, or that we are under an obligation to create such a right. I think that it is our responsibility to consider the practical side of the question as well as any moral or traditional, historic, national or legal obligations. The practical problems are on our doorstep: there are between 40,000 and 50,000 Vietnamese refugees in Hong Kong. Have we been able to persuade the world to accept them? Not at all. A mere trickle is returning to Vietnam. Of the 1178 29,000 Ugandan Asians expelled by Idi Amin, we took 25,000; the Americans took 1,000, the Canadians 1,000 and the Swedes 2,000. That was a big enough problem, and some of us have been damned for it ever since. With Hong Kong, we face a major practical difficulty.

What worries me particularly is the fact that, if we accept an obligation in 1997 because of circumstances that may exist then, we shall place on our successors a burden that we ourselves need not shoulder. There will be a different Government—perhaps of the same party, but with different people in it—[Laughter.] Naturally, I hope that my right hon. and learned Friend the Foreign Secretary will still be here.

A different Parliament—perhaps two Parliaments hence—will have to carry out the obligation that we have accepted and that we shall have placed upon it. I do not consider that a proper responsibility for us to accept for the future.

§ Mr. Nicholas Budgen (Wolverhampton, South-West)

Does my right hon. Friend agree that perhaps the worst betrayals that this country has ever perpetrated have been when we have made promises to, for instance, countries in central Europe without being aware of the circumstances in which we might have to honour those promises? That entirely supports his view that, if we made a promise now that would have to be implemented by others in the future, we might find that they—for good reasons—had to go back on it.

§ Mr. Heath

It will be a wonderful day when I make a speech, on whatever subject, into which my hon. Friend does not introduce the European Community and its treaty.

§ Mr. Budgen

That is not the point.

§ Mr. Heath

Of course, a nation is responsible for any treaty into which it enters, but those treaties could have been changed at some future date under the terms of a later treaty. I do not wish to become involved in an argument about whether they should ever have been established; that is part of history, and will be in the memoirs.

Then we come to the worrying question of people leaving Hong Kong in the intervening period. I agree with my right hon. and learned Friend that he has an obligation where officials are concerned, but I should have thought that it would be possible to deal with that on a financial basis with sufficient inducements for people to stay until 1997, with an undertaking that they were prepared to do so. I do not believe, however, that the Government are obliged to make an arrangement involving the managers of private enterprises. That must depend on the enterprises themselves, and they have an interest, in exactly the same way as Peking has an interest, in maintaining the position of Hong Kong for its financial and industrial and trading future.

Once we get past that, the risk of accusations of discrimination is immense. The argument will go as follows: "You can say that so-and-so is more valuable to Hong Kong than the man in the street, but if people are to suffer, why is he to be let off while the man in the street suffers?" It is as simple as that. I cannot see a means of implementing a layer of special arrangements without Parliament and the Government being accused of unjustifiable discrimination. That is the immediate problem that awaits us.

1179 Let us try to look to the future. We hope that Peking will now have recognised the disastrous impact on the world of what has happened. Did it realise at the time? If so, why did it allow the world to see it on television? Why should all the telephone lines have been open throughout the episode? Let us hope that it now realises and will change; and let us see a change similar to that which followed the cultural revolution and to what—as far as we know—is happening in the Soviet Union today.

We can say this about Peking: when it gives international undertakings—this is an international undertaking, registered with the United Nations—it adheres to them. When it gives financial undertakings to, for instance, investment banks, in my experience, it adheres to those. That may be one hope for the future —that, having given an undertaking registered with the United Nations, Peking will adhere to it.

Let us be open and frank. We now face the most difficult task in politics: to remain patient in unknown circumstances that we cannot control and to which we can see no immediate answer. I hope that, both here and in Hong Kong, we can prove that we are able to master it.

§ Mr. Paddy Ashdown (Yeovil)

It is always difficult to follow the right hon. Member for Old Bexley and Sidcup (Mr. Heath) because his speeches are very carefully listened to and well worth listening to. I agree with almost all that he said, except for the curious assertion that we cannot take a decision or make a commitment today because it would lay a burden on future Governments and future generations. I should have thought that that was the basis on which we always go ahead. It is not an unreasonable basis in this area, too.

Five years ago, in 1984, I first spoke in the House on the subject of the Joint Declaration and Hong Kong. On that occasion I remember congratulating—I do so now—the Government on having put together the Joint Declaration. I believed then, and I believe now, that it is the foundation on which we must go forward. It was a not inconsiderable diplomatic achievement. However, I recall saying at the time that that good foundation would be significantly undermined if Britain failed to honour its moral obligations. I also recall saying that I was depressed because I did not hear the genuine fears, anger and sense of betrayal which were felt at that time in Hong Kong being echoed in this House. It gives me no pleasure whatsoever to note that, following the appalling and tragic events in Tiananmen square, the predictions and comments that I made then have come all too tragically true.

In a sense, it does not matter how much faith Britain puts in the Joint Declaration, or how much faith China puts in it. To be able to make it work, we have to ensure that there is faith in Hong Kong that it will work. If there is no faith, the basis upon which it was drawn up—one of the articles to which we committed ourselves being to hand over Hong Kong with a prosperous economy and a stable society—will be undermined. The people of Hong Kong will believe that the agreement is not worth the paper on which it is written and that it cannot be delivered. In a real sense, Hong Kong is the silent partner in this bilateral agreement between Britain and China. The survival and 1180 success of the Joint Declaration requires the people of Hong Kong to believe that it can work and that it will be observed.

The Foreign Secretary was absolutely right when he identified the purpose of the Government's actions and those of the House as being to recreate a sense of trust and belief in the Joint Declaration so that Hong Kong can remain economically prosperous and socially stable.

It is my case—I argued it five years ago, I have argued it in the lead-up to this debate and I argue it now—that at the heart of the re-establishment of that trust is the need to provide the people of Hong Kong with the capacity, as free citizens, to leave Hong Kong. Part of the Joint Declaration and of the agreement that the Government rightly reached with the Chinese was that the Chinese would follow what they referred to as an open door policy. People would be free to leave Hong Kong. However, an open door is useless unless, when one walks through it, there is somewhere to go. It may be that the Government of the People's Republic of China will honour their side of the open door agreement, but that agreement is meaningless unless we are prepared to underpin it, too. The freedom to have somewhere to go to is the bottom line in any action that is taken to ensure that the people of Hong Kong feel confident about the future.

We can have as much democracy as we wish, but it will not work if people are always looking over their shoulder at a tyrant who is just round the corner and who is prepared to lock them up for their views—if not today, tomorrow. It would be wrong of us to believe that democracy is like some magic charm that we can wave in the face of People's Liberation Army tanks and they will go away. If that was our belief, God knows, it must have been snuffed out after the terrible events in Tiananmen square. What will happen if those events are, despite our best efforts, recreated in Nathan road, Kowloon after 1997?

There is no earthly reason why those who are rich enough, clever enough or skilled enough will want to stay to make Hong Kong work and keep it prosperous and socially stable if, at the end of the day, the status that they are generously granted is not that of a free citizen but that of a refugee. If people do not stay now, the capital which underpins the financial stability of Hong Kong will leave, too. The question whether we honour that right of abode is not one that can be traded off against greater democracy. It lies at the heart of and underpins everything else that we do to establish and preserve stability in Hong Kong.

Before I come to that matter, let me deal with a few of the comments that are germane to the debate and that were referred to by the Foreign Secretary and others. I join the right hon. Member for Old Bexley and Sidcup and the right hon. Member for Manchester, Gorton (Mr. Kaufman) in congratulating the Government on having shifted their position. For the past five years all of us have argued that the issue of democracy is very important—that the arrival and takeover by the People's Republic of China of the special administrative region of Hong Kong should be more than simply a question of sending in a man with a screwdriver to change the nameplates on the door of Government house. An established democratic process in Hong Kong would ensure that that would happen.

The Foreign Affairs Committee report was correct and wise in saying that the time has come to increase the pace of democracy in Hong Kong. It said something else which 1181 is also important. The decisions that must be taken about the pace of the adoption of democracy in Hong Kong are delicate and careful ones. They could unbalance political and economic stability in Hong Kong. In that sense, the Foreign Affairs Committee report was correct. What must guide us in the decisions that are taken about the pace of democracy are the views of the people of Hong Kong. It is far better that they should take their own decisions, in so far as that is possible, about the pace of democratisation than that we should draw up blueprints in Westminster or Whitehall.

Some of the ingredients of the democratisation process include a chief executive in Hong Kong. I share the view that it would be better if the chief executive were elected on a free franchise of all voters in Hong Kong than in an electoral college. The time of the excellent governor, Sir David Wilson, will run out naturally before 1997. I take the view that it would be extremely helpful to Hong Kong if his replacement were to be not a Foreign Office official but a politician, or some other person of independent standing in the United Kingdom.

It is correct to say that the Joint Declaration is the basis for going forward. There are voices—

§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

I am astonished by what the right hon. Gentleman has just said. Does he not think that at some point before 1997 it would be better for a Hong Kong Chinese national to take over that role to prepare for the role as chief executive instead of importing someone from the United Kingdom? I do not know whether the right hon. Gentleman is offering his own services. However, it is a strange suggestion.

§ Mr. Ashdown

I hear the hon. Gentleman's words, but there are two arguments. I do not intend to tell him now which I think is the better argument. I have no doubt that the hon. Gentleman believes, as I do, that the views of the people of Hong Kong are important. The Under-Secretary of State for Foreign and Commonwealth Affairs is laughing. I wonder what the Government's stated view on this is now? There is a balanced argument, which I shall put to the hon. Gentleman in the terms in which it was put to me by very senior people in Hong Kong. The prevailing view among the Chinese on OMELCO and UMELCO is that it may be better not to have a Hong Kong national in those circumstances precisely because of the divisions that it might cause. The view in Hong Kong, and it is one to which the House must pay attention, is that it would be better to have an independent and objective person from the United Kingdom. I ask the hon. Gentleman to think a little more carefully about that.

The Joint Declaration is the right basis for going forward. There are those in Hong Kong, including Martin Lee, who believe that it should be scrapped. That would be wrong, dangerous and destabilising. We should strengthen the Joint Declaration by any means that we can. The right hon. Member for Old Bexley and Sidcup said that the Chinese are good at honouring agreements. He is correct, but there is one exception—the Sino-Tibetan agreement of 1951, which, rather chillingly, used the phrase, "One party two systems". That agreement has been repudiated and ignored, leading to the destruction of religious, cultural and political systems, the flight of 100,000 people from Tibet and the death by starvation and execution of 100,000 more. Almost as a dress rehearsal for the events in 1182 Tiananmen square, two months earlier there was a major descent on dissident elements in Tibet and hundreds, if not thousands, of people were summarily arrested at midnight on March 7.

I am not sure that I can take the same comfort in the Chinese honouring agreements as did the right hon. Member for Old Bexley and Sidcup. The Government should consider reinforcing the Joint Declaration, or perhaps the Basic Law internationally in the United Nations, not just by its registration as a treaty, but by passing a resolution before the Security Council. As China has a veto, it would be interesting to see how it would react. The Government should consider reinforcing the Joint Declaration or the Basic Law by guaranteeing powers or appointing people to scrutinise and investigate its operation.

I now come to the Basic Law and the legal system. I welcome the Government's agreement that we should have a Bill of Rights, but I ask them to look carefully at the June 1989 Amnesty report which points out some worrying factors about the use of the death penalty in Hong Kong and safeguards against torture and arbitrary detention.

I share the Foreign Secretary's view on sanctions. I do not believe that sanctions would be appropriate at present, but the Government should recognise that China may be considered for chair of the United Nations Commission on Human Rights later this year. I hope that the Government will make it clear that any such decision would be extremely unwelcome and that they will oppose it.

On nationality, I believe that there is a moral obligation. Britain has handed over people to their own Governments many times before, rightly and properly, in the dismantlement of our empire. But we have never handed over an entire people to another Government, let alone to a Communist tyranny. We cannot remove the special responsibility for that special act by irresponsible scaremongering with figures such as 3.25 million. Everyone who has studied this matter knows that there is no possibility of 3.25 million people coming to Britain before 1997. A poll carried out by the South China Morning Post shows that 6 per cent. might come here before 1997. However, it is possible that they will come here if, to use the governor's expression, Armageddon should strike after 1997. The Government have already accepted responsibility for providing homes for the people of Hong Kong should Armageddon strike. The difference between the Government's proposals and mine is that their proposals would not allow an orderly transferral of citizens, but instead would require a panic plan to house penniless refugees.

What would happen if we gave right of abode now? Perhaps 6 per cent. would come here. However, as 1997 approached, many others would make preparations to take out an insurance policy in Britain in case the worst should happen. Hong Kong Chinese tell me that they would begin investing in Britain and establishing subsidiaries of Hong Kong firms here. They would prepare for that eventuality by diversifying their businesses.

Instead of orderly preparation, as was considered in the Corry report which suggested that under those circumstances there was a real possibility of economic benefit to Britain, and instead of an orderly approach to a desperate human problem, the Government are producing policies that rely on a mass influx of penniless, destitute refugees. Their policy is designed to bring about the very scenario that they say that they are trying to avoid.

1183 Peter Kellner was right when he wrote in The Independent: What would really mess things up would be for Hong Kong's business people, teachers, doctors and engineers to settle in the United States, Australia and West Germany and for its pensioners, unmarried mothers, waiters and street-cleaners to come to Britain.

§ Mr. Adley

Everyone seems to consider the problem in terms of United Kingdom immigration policy. Will the right hon. Gentleman consider the following scenario for Hong Kong, which is more likely and would be more damaging? Hong Kong has the Joint Declaration because of its usefulness to China. If we were to do as the right hon. Gentleman suggests and gave people in Hong Kong the right of abode now, and anything should happen in the next eight years to create a blip in confidence and people started to leave Hong Kong in numbers, a slow departure could become a flood and Hong Kong could lose some of its best people. It would then lose its attraction to China. Where would Hong Kong be without its attraction to China?

§ Mr. Ashdown

The hon. Gentleman's useful interruption takes me to my next point. The Government's argument is that that would encourage just such an exodus. At present there is no evidence for that. Why should people leave Hong Kong at present? It has a growth rate of 8 per cent. a year, it has a much more pleasant climate than ours and it is a well-ordered and beautiful city. The Government have provided their own answer by saying that they will give a right of abode in Britain to make sure that the skilled people and the administrators will stay in Hong Kong. They argue that the way to make sure that the skilled remain in Hong Kong is to give them the right of abode in Britain. If that applies to those people, why does it not apply to the rest?

Unless the assurance of the ability to leave is given, the people of Hong Kong will begin to leave. That is exactly what is happening. The Canadians are setting up seminars in hotels in Hong Kong to attract the best people to Canada because they do not have the confidence to stay in Hong Kong. The French are issuing passports to those working in French banks. When Singapore offered the opportunity of relaxation, there were 25,000 people outside the Singapore offices. Just down the coast, there is a large population of Chinese with Portuguese passports and the Portuguese have given them the right of abode.

As a result, families are being split and the best and the brightest are leaving Hong Kong. There are the beginnings of a flight of capital. Once again Government policy seems absolutely dedicated to undermining the financial and social stability that they wish to preserve, weakening the credibility of the Hong Kong administration and increasing instability. That policy is mad and nonsensical. The Government's selective approach is divisive and against the recommendation of the Hong Kong administration and adds to the worry about that general policy.

There is another broader consequence. The sense of betrayal and anger and the concern about Britain not living up to her responsibilities are not confined to Hong Kong but are spreading to other nations round the Pacific rim. A senior British business man who runs one of the most established firms in the colony said to me that the 1184 Government's actions had the potential of doing as much damage to Britain's interests in the far east and the Pacific basin as Britain's actions in Suez did to our interests in the middle east.

We should offer right of abode. That is not too much. If people think that it is too much, perhaps we should try to reinsure that risk internationally. I was interested in the amended plan, published in a newspaper article the other day, put forward by the right hon. Member for Guildford (Mr. Howell), and I hope that we will hear more details. It may offer a way forward. In that article, he said that there must be a way round this difficult matter, if sensible brains can address it properly.

This is not just a moral issue. It is a practical way of underpinning democracy in Hong Kong. The only power that the people of Hong Kong will have to pit against the might of the Chinese Government after 1997 will be the power to withdraw the one thing that China needs so badly —a prosperous Hong Kong. If we make that power a reality, the power to limit the PRC's actions will be stronger. That is why I believe that our commitment to the establishment and preservation of democracy after 1997 depends on ensuring that we make a commitment before 1997 that the Chinese can leave Hong Kong if they wish.

This is not the first time that we on the Liberal and Social Democrat Benches have stood alone making these arguments. I did this five years ago. My hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston) did it about a year ago and my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) has done it several times. I am proud to say that our party believes that we have a moral and practical duty to honour the right of abode that underpins democracy in Hong Kong.

I am depressed by two factors. First, I am depressed by the attitude of the official spokesman for the Labour party, the right hon. Member for Gorton. It is incomprehensible that the Labour party voted against the 1981 regulations the consequences of which it is prepared to accept. I contrast the Labour party's words in that debate, when it declared its opposition to that legislation, with the attitude that it is taking today in support of the Government. I especially remember the words of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who is now deputy leader of the Labour party. On 4 June 1981, in committing the Labour party to repeal the legislation, he said: The necessity for repeal and replacement is all the greater, not least because the Bill is largely based not on Government theories about nationality, but on Government fears about immigration."—[Official Report, 4 June 1981; Vol. 5, c. 1159.] Now we note that the Labour party is joining in fanning those fears about immigration.

I remember the words of the hon. Member for Holborn and St. Pancras (Mr. Dobson) when he summed up that debate: Nationality is a fundamental concept which ought to be decided on principle and not on expediency. The Bill is shot through with expediency from start to finish, which springs from the artificial fears which the Conservative Party and others have attempted to create among the British people about the prospect of others immigrating to this country." —[Official Report, 4 June 1981; Vol. 5, c. 1178.] Brave words, but abandoned words. I think of the Labour party in its great period, when it helped with the dismantlement of empire. I think of the Labour party as a great defender of civil liberties, the rights of ethnic minorities and international justice. I compare that with 1185 what I see now—a sham, hollow replica of that Labour party. We now see the new model Labour party facing its first moral challenge—and it has failed.

I am depressed at the attitude that the House takes to these matters. We have never in our history taken a decision like this. Of course, we must hand back Hong Kong in 1997—we have no other option—but that means the territory, not necessarily the people. I ask the House to pause and think of the enormity of the act that we are contemplating. We hand over 6 million people to a Communist tyranny, all of whom are our responsibility, half of whom are our passport holders and the majority of whom fled from that tyranny in fear of their lives. We hand them over to a tyranny of old men who have only recently slaughtered their young citizens on the streets of the main square of their capital city for daring to believe in democracy.

The House shrugs its shoulders. It says, "We can do nothing about this. There is no way that we can help in that circumstance." My party does not believe that, and we shall divide the House. Britain is now writing the last pages in the history of its empire. If the House allows the Government to get their way in this matter, there will have been complicity in ensuring that those last pages are grubby, shameful and discreditable pages in what should be an important and glorious history.

§ Mr. David Howell (Guildford)

The Select Committee on Foreign Affairs will be grateful, I know, to nearly all right hon. and hon. Members for the way in which they have received its report after its inquiry into the position in Hong Kong. It is always nice for members and the hard-working staff of Select Committees to have their work appreciated. In fact, it is nice to get their reports debated at all. We certainly appreciate the comments that my right hon. and learned Friend the Secretary of State, the right hon. Member for Manchester, Gorton (Mr. Kaufman) and others have made about this study.

It was obvious that in the first place the reception given to the Select Committee's report in Hong Kong was very different. There were cries of "Shame" and "Dishonourable", and many other rough words were used. I, for one—I suspect that I speak for all other members of the Select Committee—see nothing dishonourable in stating firmly and clearly at the outset what we are capable of doing and what we think should be done. Nothing could be worse—as others have said more eloquently than I— than making commitments now that later, disastrously, we cannot keep.

§ Mr. Michael Marshall (Arundel)

Does my right hon. Friend accept that one of the most telling paragraphs in the Select Committee's report is paragraph 4.10, which discusses the scale of the problem? The right hon. Member for Yeovil (Mr. Ashdown) glossed over what could be a major problem. Does my right hon. Friend accept that there is a genuine problem in terms of refugees seeking to qualify as British dependent territory citizens and adding to the numbers?

§ Mr. Howell

If I have time, I shall consider those matters in more detail.

Having had the opportunity to talk to a number of visitors from Hong Kong since the visit by my right hon. and learned Friend the Secretary of State, I do not think 1186 that it is too optimistic to say that, on further study of what my right hon. and learned Friend, the Select Committee report and many people who are interested in Hong Kong's future are trying to say, there has been a slightly better and less hostile reception.

I have no doubt that my right hon. and learned Friend the Foreign Secretary has shown courage—the courage to say no. That is a difficult act of statesmanship. He has been accused, as we have, of not fulfilling obligations. We have unique obligations to the people of Hong Kong. In a sense, my right hon. and learned Friend is the embodiment of the fulfilment of those obligations, with his ceaseless visits to the territory and, above all, his achievement of an agreement that is unique in history. I remind hon. Members that one of the treaty partners—the People's Republic of China—agrees to forswear the right for its political system to be operated in a piece of territory that will be within its sovereign control. It is extraordinary that there will be capitalism and no Socialism will be allowed. It would be unconstitutional for Socialism—I apologise to Opposition Members—to operate in the special administrative region of Hong Kong. My right hon. and learned Friend has gone almost as far as possible in statecraft and politics in dealing and grappling with this appallingly difficult issue.

We are now moving into the realms of psychology and psychological reassurances, and some of the most complex and difficult issues that the House has ever been asked to face, particularly the unique issue of how we devise reassurances. It is not a matter of keeping people here, letting them go or allowing them in, but how to devise reassurances to keep people in another place—in Hong Kong. That is a difficult, complex issue.

There are three matters raised in the report with which I wish to deal, and the first is relations with China. The report carefully examined the relationship between the two treaty partners, ourselves and the People's Republic of China. We had some fairly firm words to say in paragraph 3.5 about the importance of further discussions and advice on the Basic Law, discussions in the joint liaison group, and any administrative changes in Hong Kong itself being built on the principle of recognising the needs of Hong Kong. During our visit to the territories, we heard and examined suggestions—we found no hard evidence or validity for them—from many leading opinion-makers in Hong Kong that not enough account had been taken of the needs of Hong Kong and that too much attention had been paid to second-guessing and apprehensions about what the Government in Peking really want for Hong Kong.

That period has passed. I do not think that there was validity for such fears, but they existed, and it is important for the Government to ensure that, from now on, not a scintilla of doubt is left in people's minds that the British and the Hong Kong Administration are pursuing the interests of Hong Kong. We must ensure that the Basic Law—which the Chinese are drafting and have reasserted is to be promulgated on the original schedule, although the length of the consultation period has been extended—at least conforms with the Joint Declaration, the remarkable document that was secured by my right hon. and learned Friend five years ago.

The situation is reinforced by the simple fact that the PRC now has a vastly greater interest in moving in a way that will maintain the stability of Hong Kong. In a sense, the dangerous and unpredictable giant has weakened itself 1187 by the horrors of the night of 3 and 4 June in Tiananmen square. It is now as much in China's deep interests as it is in our interests to see that everything necessary is done to maintain stability in the territory. That is what the Select Committee has to say about that matter. Perhaps hon. Members will elaborate on it.

The second matter is democracy. It is quite right that Hong Kong must decide. That must be the governing principle. The Select Committee took the liberty of offering its view. In discussions, the Select Committee did not see why it should not offer its own views, given the way in which the democracy issue is handled and is germane to maintaining stability in the territory. Our strong recommendation is that democracy should be entrenched before 1997. The recommendation is ahead of the decision that was taken by the Hong Kong Administration and the British Government before the massacres, and ahead of the view that was taken at that time by the Office of the Members of the Executive and Legislative Councils, on 24 May. Since then, I have heard that OMELCO is again examining the matter and is moving to support for an even more rapid timetable. I am sure that my right hon. and learned Friend will keep in close touch with that matter, the development of ideas within the territory, and the move towards entrenching democracy.

There has been a turnaround. There were people who used to say, "We have done very well without democracy in Hong Kong; why do we need it? It is destabilising and will bring out the Kuomintang and other things." Quite often, the same people are now saying the opposite—that the dangers of introducing democracy and stability too quickly are more than outweighed by the imperative need to ensure that Hong Kong is a strongly entrenched democratic institution and society by 1997 and that that will give it a strong and vibrant place under the sovereignty of the PRC, but as a democratic unit, the voice of which the world and, of course, Peking, its sovereign power, will recognise.

The third point is nationality. The Committee expressed the view that others have expressed, that the idea of granting right of abode to the existing 3.28 million people in Hong Kong who are eligible for British dependent territory passports, let alone the other 2 million or so who will be eligible in coming years, is an impossibility. I paraphrase the Select Committee's words, but the conclusion is obvious. It is an impractical, implausible and therefore worthless undertaking.

No country can put its immigration policy into commission. That is what it would be. We can talk about it being an insurance policy, but with an insurance policy the person providing the cover has certain criteria upon which a claim is honoured. In this case, the right to make a claim would be delegated and put in commission. In effect, it would put not merely our policy of 27 years standing but our entire policy in these matters into commission.

It is a great pity that able minds and much money in Hong Kong have been mobilised behind an advertising and public relations campaign to go on hitting against the single narrow target of right of abode for all those passport holders in the United Kingdom. It will cause grief, be a misdirection of energy, and keep alive unfounded 1188 expectations and divert the vast abilities of the Hong Kong people from thinking about their own situation in a more realistic, international way.

As for categories, the Select Committee's report endorses the view, which is now the view of my right hon. and learned Friend and the Government, that there should be eligible categories for passports. My right hon. and learned Friend has said that a package of proposals will come forward. That will be difficult, just as everything is difficult in this matter. Of course, expectations in Hong Kong, even on that narrow point, are growing. There are two views in Hong Kong. One is that the numbers must be very large. I have heard quite responsible people suggest that anything less than 100,000 will be worse than nothing. Others have said that everything would be worse than nothing and that it is such a divisive concept that it would be wrong for any categorisation at all to take place, particularly those who say that it is an all-or-nothing argument—either a right of abode for everybody or nothing.

Perhaps I am too frank, but the divisions are there already. Perhaps between 500,000 and 1 million people in Hong Kong already have passports. They can go anywhere they like. Many of them can already come here. To talk about it being divisive, to deny that perhaps not very highly salaried people doing absolutely vital work in law and order and administration should also have the reassurance of that passport—I accept the reassurance argument in this context—is a little unfair and crude, and does not recognise the importance of these matters.

Therefore, there are two voices in this. I believe that it is right to opt for categories, although there has been strong advice from some quarters that the whole thing should be dropped. This will be a difficult issue to bring forward, but I know that my right hon. and learned Friend the Foreign Secretary has approached it with his usual extreme care and subtlety.

At the end of paragraph 4.15, the Committee referred to longer-term assurances and said—I paraphrase—that the British Government should take a lead with our EEC partners and with other immigrant-receiving countries, such as Australia, Canada and the United States, in putting in place and seeking to establish the definite assurances that are needed in the years ahead. I believe that that is the right direction for the Government to take. As I said earlier, that is a very much better direction into which the energies of the people of Hong Kong can be diverted than is knocking their heads against the unavoidable and pointless objective of passports for everyone.

It has already been said by our EEC partners that they do not want to know about these things. As we look at this issue it is worth bearing in mind the Portuguese question. Of course, as the right hon. Member for Yeovil (Mr. Ashdown) said, the numbers are quite different. I understand that the Portuguese are to give 100,000 full citizenships—not just passports—to the Chinese people in Macao, and that there has been talk of almost double that number.

The Portuguese example follows a different policy line from the one that we have adopted. Let us think for a moment about what it implies in Europe. Those people will become citizens of Portugal but in due course, when Portugal has fulfilled all its obligations and has become a full member of the European Community, those people will become citizens of the EEC. That will not happen 1189 immediately elsewhere because there are questions about right of settlement and right of abode for people coming to this country. However, I imagine that it will apply immediately in the case of Portugal and that the people who take up that right will be free to go anywhere in Europe—and that they may well do so.

If we are honest with ourselves, we know—I expect that my right hon. and learned Friend knows this full well—that at the moment every EEC country is facing the most severe and frightening prospect of mass immigration of one sort or another—whether from the Maghreb or anywhere else. Anyone who thinks that the problems of other EEC countries are not ours in relation to these pressures from outside and to the enormous volume movements of world immigration and emigration—and vice versa, that our problems are not theirs—is living in another world.

My right hon. and learned Friend is right to have discussions on this with the rest of the European Community—I shall come to the wider world in a moment —so that future pressures can be met in an orderly way. Those pressures are coming—only an ostrich with its head underground could deny that fact—and we shall not be able to deal with them alone, any more than we can contemplate the ideas about passports alone.

§ Mr. James Couchman (Gillingham)

Is it not a fact that the Portuguese have always granted rights of citizenship to those born in their colonies of Portuguese parents and that the British Nationality Act 1981 confirmed that that would continue to apply in Macao?

§ Mr. Howell

Yes, I believe that it is. That point simply emphasises the problem.

The Committee urged my right hon. and learned Friend to take the lead in this matter. I hope that he will consider what we said. Indeed, he has already given a response that sounded extremely positive on that.

My own view—this is not the view of the Committee which has stated its views in the report—is that other countries such as the United States, Australia and Canada and, as we have recently read, Singapore, which has announced a figure of 25,000, although I gather that larger numbers are now contemplated, should become involved in what is, in effect, an underwriting scheme. It is a scheme for keeping those people in Hong Kong, which is what we are concerned to do.

I hope that the offers and assurances can be taken up, and not only if catastrophic events overwhelm the territory. Although my right hon. and learned Friend referred to such circumstances when he spoke to the Committee, that is a fuzzy concept. In reality, there would not be one single morning on which there was an overwhelming catastrophe. There would be ugly and rising tensions and dangers with sudden large groups of people seeking to leave the colony. Of course, one does not want any of that to happen—it is unpleasant even to have to talk about it—but we must realise that there will be circumstances well short of a neatly defined "catastrophe" —whatever that means—in which enormous pressures will come upon us and for which some provision and pre-vision would be desirable.

On a narrower scale, the flexible package that my right hon. and learned Friend will use on behalf of the 1190 Government is a first pebble in that pool, as are the ideas of the Singapore Government and the proposals that we are now hearing from the United States Congress.

§ Mr. Ashdown

I do not want to take up too much of the time of the House. We are all listening with great care to the right hon. Gentleman's personal views on this issue, which I find encouraging. Those views are obviously what he referred to in the Asian Wall Street Journal. However, I hope that he will not be guilty of raising the hopes that he has accused others of raising in Hong Kong. To be more specific, is he referring to an international agreement giving a promissory note in the event of catastrophe? Is he referring to something which would generously allow the people of Hong Kong to be considered as refugees in the event of terrible occurrences in the future, in which case such a provision would do nothing to keep people in Hong Kong—or is he referring to a commitment to citizenship? If he is not to raise people's hopes falsely, I hope that he will be a little more specific.

§ Mr. Howell

There are real difficulties in setting out what one suggests other countries should come together on and examine and the things in which my right hon. and learned Friend should take the lead. I am seeking to address perhaps unsolicited advice to the people of Hong Kong and am saying, "Please cease aiming all your huge energies at the right of abode for everybody"—which, if I understand his intervention, the right hon. Gentleman seems to think they should still work for—"and divert it into examining ways of seeking international assurances." I have used my words very carefully—I shall not repeat them because they are on the record—about in what circumstances those assurances should be given.

There is interest in this problem all around the world. It is not confined to just this country, as my right hon. and learned Friend recognised in his earlier remarks. Whether we "take a lead" as the Select Committee suggested or not —and, in my view, we have in a sense taken a lead—there are many other things to be done. The Bill of Rights is to be put in place. My right hon. and learned Friend is moving vigorously on that. There is also the question—

§ Dr. Jeremy Bray (Motherwell, South)

rose—

§ Mr. Howell

I am sorry, but I think that I must rush on because I have taken too much time already.

There is also the question of keeping the People's Liberation Army out of Hong Kong. The Select Committee warned about that, and I know that my right hon. and learned Friend has noted our words. There is also the question of the physical, long-standing, long-enduring construction of a mighty building which would be the Great British consulate-general, showing that Britain will remain interested in the territory for years and years ahead. It would be a physical manifestation of our interest. There is also the recommendation in our report that the issue of the boat people should be dealt with. I shall not elaborate on that difficult issue now. There is also the final interpretation of the law, which we suggest should be clarified, and there are proposals for the development of democracy.

Most of those aspects of our report were denounced in Hong Kong in the heat of the moment. Now is the time for cooler consideration. Of course, as my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) has 1191 said, ultimately the interests and the future of Hong Kong depend on China. For all its unpredictability and for all the hideous upheavals of recent days and the past, China has stayed predictable throughout about Hong Kong. Even in the moments of blood, smoke and horror, we must remember that basic fact.

In eight years' time Hong Kong becomes a ward of China. We must make sure that it remains also a precious godchild of Britain, Europe and the whole free world. A secure future can surely be built on that basis.