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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

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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 can 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

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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

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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

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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

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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.

5.29 pm

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

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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."

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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

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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 distinc-tions. 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.

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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

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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.

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5.53 pm

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

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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

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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.

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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.

6.9 pm

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

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