§ Order for Second Reading read.
§ 4.1 pm
§ The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley)
I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is to provide the future Hong Kong Special Administrative Region's London economic and trade office with a limited range of privileges and immunities.
At present, the Hong Kong Government operate a number of ETOs around the world. They have offices in Brussels, Geneva, Washington, New York, San Francisco, Tokyo, Toronto, Sydney and Singapore. The prime function of the ETOs is to promote trade with Hong Kong and to provide assistance to companies that are considering investing or starting operations in Hong Kong. The ETO in Brussels also maintains close links with the European Commission, and the ETO in Geneva is responsible for handling Hong Kong's relations with the World Trade Organisation.
The Sino-British joint declaration of 1984 provides that the Hong Kong Special Administrative Region will, after 30 June 1997, enjoy a high degree of autonomy, including in the conduct of its trade and commercial affairs. For example, the future Hong Kong Special Administrative Region Government will be responsible for Hong Kong's trade policy. Hong Kong will continue to be a member in its own right of the World Trade Organisation and of the Customs Co-operation Council, as well as other international trade organisations.
The joint declaration provides for Hong Kong on its own to maintain and develop economic and trade relations with all states and regions and for it to establish official and semi-official economic and trade missions in foreign countries. Thus, Hong Kong will be able to maintain and further expand its network of ETOs after 30 June 1997.
The Hong Kong Government office in London is in a slightly different position from Hong Kong's other ETOs, reflecting the fact that Hong Kong is a British dependent territory until 1 July 1997. While the present London office performs a valuable trade and investment function, it also promotes Hong Kong in other ways—for example, by maintaining close contact with hon. Members who have an interest in Hong Kong affairs.
I expect that most hon. Members in the Chamber today will know the Hong Kong Government's Commissioner in London, Sir David Ford, who has done an excellent job, and I am pleased to see that he is continuing to do so. Over the years, many hon. Members have made sponsored visits to Hong Kong organised by the London office.
After 30 June 1997, the London office will become an ETO. It will continue to have contact with hon. Members, and I hope that educational visits will continue, but it will play a less active role in this respect, as the Chinese Government will be responsible for Hong Kong's foreign affairs. The main function of the office will therefore be to promote economic, trade and business links between 796 Hong Kong and the United Kingdom, which is the work normally undertaken by the commercial section of an embassy.
§ Mr. Hugh Dykes (Harrow, East)
My right hon. Friend will be aware of the large number of visits that have taken place1—I am thinking in particular of the one in which I was involved recently, which was, I think, the last visit to be made to Hong Kong by Commonwealth Members of Parliament before the handover.
Is he aware that members of the delegation came away with an overwhelming and extremely encouraging impression of tremendous optimism among the business community—Chinese and other nationalities working there—for the future; that, in respect of contact with the People's Republic of China authorities represented in Hong Kong, there was a strong determination to let Hong Kong continue to be run economically and in other ways by the local Hong Kong Chinese; and that that double impression created a tremendous overall impression of great optimism for the future?
§ Mr. Hanley
My hon. Friend is absolutely right, and I am pleased that his experience has confirmed what we have all been working for. I mentioned yesterday during Foreign and Commonwealth Office Question Time that, some five years ago, the Hang Seng index was at about 4,000. Today, with only seven months or so to go before the transition, it is up at 12,000. That is hardly a sign of lack of confidence, either in the present Hong Kong or its future. I am very grateful for what my hon. Friend says.
The Hong Kong Government are, however, concerned that their ETOs should be given suitable status by host Governments, including a limited range of privileges and immunities. The privileges and immunities are of practical benefit to the ETOs, and they also help to reinforce the fact that Hong Kong has, and will continue to have, autonomy in the conduct of its trade relations.
The ETOs in Brussels and Geneva have enjoyed such privileges and immunities for a number of years. The Canadian Government have enacted legislation to grant privileges and immunities to sub-state entities, and provided a range of these to the ETO in Toronto. The Australians have enacted similar legislation for Hong Kong's new ETO in Sydney. The Japanese provide a range of non-statutory privileges and immunities to the ETO in Tokyo, and are considering enacting legislation to provide these on a statutory basis. The Singaporeans are still discussing with the Hong Kong Government what privileges and immunities they will grant to the ETO in Singapore, and the American Government have undertaken to enact legislation so that the three ETOs there can receive privileges and immunities.
The Hong Kong Government look to the British Government, both as the sovereign power until 30 June 1997 and as a co-signatory to the joint declaration, to help support Hong Kong's future autonomy. My right hon. Friend the Prime Minister made it clear when he visited Hong Kong in March this year that Britain's obligations to the people of Hong Kong will not come to an end at midnight on 30 June 1997. It is against that background and the steps that other Governments have taken to give Hong Kong's ETOs a suitable status that my hon. Friend the Minister for Trade, who I am pleased to see present, and fellow signatories have decided, through the Government, to introduce the Bill.
797 The limited privileges and immunities that we propose are set out in the schedule to the Bill. They are taken mainly from the Vienna convention on consular relations. They are, however, not nearly as extensive as those found in the convention, as the ETO will not be a consular mission.
The Chinese Government have been consulted and have agreed to our proposal to grant limited privileges and immunities, with effect from 1 July 1997, to the London office of the future Special Administrative Region Government.
The proposed package of privileges and immunities has been discussed with the Hong Kong Government to ensure that it will meet the functional needs of the ETO. In considering the Bill, I would urge hon. Members to bear in mind the important message that we shall be giving about the future autonomy of the Hong Kong Special Administrative Region. It is only right that, as the former sovereign power, we do all we can to provide assistance.
I am pleased to move the Second Reading of the Bill. I am conscious that the House will have a full debate on Hong Kong on 14 November, and I look forward very much to that. It is a technical Bill, and I am grateful that the hon. Member for Leeds, Central (Mr. Fatchett) and the hon. and learned Member for Fife, North-East (Mr. Campbell) support it.
§ Mr. Derek Fatchett (Leeds, Central)
The official Opposition support the Bill. The Minister was right to say that, although it is a technical measure, it sends a number of constructive signals to the people of Hong Kong, and is important to United Kingdom-Chinese relations. The Minister was also correct in saying that, given the specific and technical nature of the Bill, we cannot broaden the scope of our debate. In any case, we have no need to do so, as a full day's debate on Hong Kong is scheduled for two weeks' time.
We are delighted that the Government have acted quickly on the matter. We understand the reasons for the Bill. We wholly accept that obligations arise from the joint declaration and the responsibilities defined within it, and we wholeheartedly agree with the Government that Britain's responsibilities to Hong Kong and its people do not end on 1 July 1997.
Although I might sound old-fashioned, I believe that it is crucial to Britain's future standing in the world that we honour our obligations to Hong Kong after July 1997. In many respects, our role may be more important now than it was previously. We owe that responsibility, and whether a Conservative or Labour Government are in office in 12 months' time, we shall endeavour to carry out all the commitments that we consider morally important.
Let me add the praise and thanks of the Opposition to the Hong Kong office that is currently based on London. This may be almost our last chance to thank Sir David Ford and his colleagues for their work on behalf of Hong Kong and for the service that they have provided, not only to hon. Members, but to others in the United Kingdom who are interested in either trading with Hong Kong or looking to that country as a potential source of inward 798 investment into the United Kingdom. The role of the Hong Kong Office will change substantially after 1 July next year. That is one reason why we need the Bill, and it should become law.
The Minister rightly pointed out that Australia and Canada have already taken measures to ensure that the privileges and immunities set out in the Bill will be in place in those countries. It would look wrong indeed if Britain had not carried out those responsibilities when other countries had already done so.
There is no disagreement on this technical measure—far from it. We support the Government, we wish the Bill full speed, and look forward to it becoming law.
Let me end with two slightly broader points that are relevant to the role and functions of the new economic and trade office. As the Minister said, It is worth reminding ourselves that, a few years ago, there was a great sense of pessimism about the future of Hong Kong. That pessimism was totally unjustified, and today, optimism in the island continues to grow at some pace. All hon. Members would like the United Kingdom to repeat the economic performance of Hong Kong. That is probably a matter of consensus across the British political divide.
It is worth while reminding ourselves of some of Hong Kong's success. A great deal of potential has already been realised, and there is a great deal more. Hong Kong is the eighth largest trading community in the world, the eighth largest stock market, and the fifth largest centre for foreign exchange dealing. Probably the most remarkable figure, and the legacy that China will inherit, is that, at the end of the current financial year, Hong Kong's fiscal reserves will be equivalent to 150 billion Hong Kong dollars. That is a very healthy nest egg for Britain to leave for Hong Kong and the future.
It is also worth while reminding ourselves that, in Hong Kong, China will have a new economic force representing 20 per cent. of China's new gross domestic product. Hong Kong is already a substantial economic success; it is already a substantial world trading partner. The facilities in the Bill are important for maintaining that economic and trade function. The lesson from such figures and the broader issues that we shall debate in two weeks' time are clear enough. It is in China's interest to allow, maintain and encourage the development of Hong Kong's economic success. We have an interest in that; China has an even greater interest.
Much of Hong Kong's economic and trading success has been based on the values that are central to its political system and way of life. It is important for the future that all recognise that there is an intimate link between political activity and economic success, especially in the context of Hong Kong. We shall be raising those broader issues in two weeks' time, but they are important in the context of this Bill, because, in agreement with the Chinese on these narrow issues, we are ensuring that Hong Kong will have the right to trade and encourage its trade, and be seen as a separate entity in a whole range of activities.
The Bill is specific, but still part of the changeover of control in Hong Kong. It is certain that, although the changeover will take place, all hon. Members have great faith in the people of Hong Kong continuing to make their island a great success. We have seen what they have done in the past, and I believe that they will continue to achieve such success in future. Britain's task in future, as it is in 799 this Bill, is to ensure that we do all that we can to maintain such success and the Hong Kong way of life. I support the Minister in introducing this legislation.
§ Mr. Menzies Campbell (Fife, North-East)
I, too, can be brief. The Minister may be relieved to hear that I have not brought a megaphone with me, in the light of our exchange yesterday during Foreign Office questions and his characteristically generous telephone call to my office this morning.
As has already been pointed out, the Bill is entirely sensible. It will enable the United Kingdom to do as much for Hong Kong as Canada and Australia have already done, and should clearly pass through the House with neither let nor hindrance. I am particularly encouraged by the fact that the Bill is being introduced with the agreement of the Government of the People's Republic of China. Such agreement may well be the basis on which we can effectively argue for a closer coming together of opinion on some more fundamental issues, several of which I have no doubt will be touched on in the debate on 14 November.
I add my good wishes and congratulations to those already expressed to Sir David Ford, who has been a most assiduous representative of Hong Kong in this country. He has taken every opportunity in the least officious way to promote the case of Hong Kong and ensure that right hon. and hon. Members have been well aware of the issues at any particular time. He has been especially effective in ensuring that a ready stream of individuals from Hong Kong, especially members of LegCo, have visited the United Kingdom to talk face to face with hon. Members. The debate on 14 November should not be foreshadowed by this debate, because we are concerned today with essentially a technical measure.
The Minister will have readily anticipated that there will be concern in the House during the debate on 14 November about civil rights, particularly freedom of expression in the print and broadcast media. Recent observations from a fairly high level in the Chinese Government have raised a number of questions in the minds of the people of Hong Kong. These are important issues. To put it bluntly, it would be a poor legacy if we left free trade, but not free speech. The House should be concerned with those matters when we consider the broader issues. The Bill should pass through the House as soon as is convenient, and I am happy to give it my support and that of my right hon. and hon. Friends.
§ The Minister for Trade (Mr. Anthony Nelson)
I take the surprising liberty of coming to the Dispatch Box—having not expected to do so—because my right hon. Friend the Minister of State, Foreign and Commonwealth Office, has kindly given me the opportunity to wrap up this short debate. I do so with great pleasure, because I have taken a close interest in trade relations between Hong Kong and the UK.
I am grateful to the hon. Member for Leeds, Central (Mr. Fatchett) and the hon. and learned Member for Fife, North-East (Mr. Campbell) for their remarks, and I particularly note what the hon. and learned Gentleman said about free speech as well as free trade. I am sure that their courteous and responsible remarks today will have 800 been greeted by a much wider audience, as they have added to the aura of political stability and bipartisan national unity that we express in this House on behalf of our country towards Hong Kong.
This non-political Bill is a practical measure with limited expenditure implications. The people of Hong Kong will be heartened by the reservoir of good will in this House towards Hong Kong, and I hope that they will see the Bill as evidence of the Government's determination to do what we can to ensure that Hong Kong continues to enjoy full autonomy in the conduct of its economic and commercial affairs. I am sure that many hon. Members will continue to have dealings with Hong Kong in the London office long after 1997 in trade and commercial matters, and that the office will continue to perform its functions as effectively as it does now.
I very much appreciate the personal commendations that have been rendered on this occasion, and I am sure that the office will continue to play its role fully and effectively. The office will promote trade and investment between the UK and Hong Kong, which will help to secure the future of Hong Kong as a special administrative region, not just politically but commercially. For reasons of prosperity and good commerce at a time of transition—as well as for constitutional reasons—I very much welcome all the expressions of support that have been made today.
I have great pleasure in supporting my right hon. Friend the Minister of State, whose personal work in this area has been outstanding. He has taken his visits to Hong Kong seriously, and I take great pleasure in adding my commendation to the Bill.
§ Dr. Marek
I wish to question the Minister of State on one aspect of the Bill. Will any of the rights to be granted to the Hong Kong office on 1 July 1997 be in any way weaker than those granted to the offices of the provinces of Canada or the constituent parts of the Commonwealth of Australia? I hope that that is not the case, but if it is, I should like to know where and why the privileges will be different from those currently offered to all the other offices that will be in a similar situation after 1 July. This is a pure point of information, and I wonder whether the Minister has the answer to hand.
§ Mr. Hanley
With the leave of the House, Madam Deputy Speaker, I shall reply to the question of the hon. Member for Wrexham (Dr. Marek), who takes an assiduous interest in Hong Kong.
The Hong Kong Government office in London already receives partial exemption from rates and exemption from income tax for its staff. These are provided on an extra-statutory basis. The additional privileges and immunities in the Bill are for the running of the office, and include exemption from duties and taxes for the staff on the importation of certain effects and a motor vehicle, and on official vehicles for the office. The number of staff at the Hong Kong Government office will fall slightly.
The revenue forgone—this is not quite what the hon. Gentleman asked, but it may help the House if I say it—as a result of granting a limited range of privileges and immunities to the office and its staff should be well below £1 million. That is quoted in the explanatory memorandum.
801 As for the differences between the Hong Kong office and any other office, I should explain that Hong Kong's position is unique. It is incumbent on Her Majesty's Government, as a co-signatory to the Sino-British joint declaration, to help Hong Kong to maintain its autonomy and international standing in trade matters. It would seem bizarre, as the hon. Member for Leeds, Central (Mr. Fatchett) said, if the United Kingdom did not help Hong Kong on this issue when other countries such as Australia, Canada and Singapore have planned or have granted a similar range of privileges and immunities to Hong Kong.
As for the differences with other countries, I think that it is true that the privileges that we are granting here are extra to the privileges and immunities granted to other offices. I shall certainly list them for the hon. Member for Wrexham. I shall send him a letter and publish the list of privileges and immunities granted to others, although it is true to say that most other similar offices have fewer privileges and immunities than are listed in the Bill. I do not have the detailed list with me, but I shall willingly answer the hon. Gentleman's question. It would be helpful to the House if I put the list in the Libraries of both Houses.
Question put and agreed to.
Bill read a Second time.
Bill committed to a Committee of the whole House.—[Mrs. Lait.]
Further proceedings stood postponed, pursuant to the Resolution of the House [25 October].