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Hong Kong — Question for Short Debate

– in the House of Lords at 2:31 pm on 16th October 2014.

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Photo of Lord Luce Lord Luce Crossbench 2:31 pm, 16th October 2014

To ask Her Majesty’s Government what assessment they have made of recent developments in Hong Kong.

Photo of Lord Luce Lord Luce Crossbench

My Lords, I am grateful for this opportunity to take stock of recent developments and for the Government to give their assessment of the present situation in Hong Kong. I am also very grateful to noble Lords for contributing to this debate with their own experience and knowledge of Hong Kong.

Since Britain was a partner in the Joint Declaration of the Government of the United Kingdom and Northern Ireland and the Government of the People’s Republic of China on the Question of Hong Kong, we have an obligation, if not a moral one, towards the people of Hong Kong. I was privileged to be the Minister of State with responsibilities for Hong Kong in the period which led to the 1984 declaration. When that declaration was signed some 30 years ago, many of today’s demonstrators were not yet born. It is therefore worth stressing the background to that declaration.

Under international law, Britain was obliged to return Hong Kong, except for the island and Kowloon, to the People’s Republic in 1997. The only feasible option was to hand over the whole of Hong Kong to China. In doing so, we were conscious of the fact that many people had escaped from the communism of mainland China to seek larger freedoms in Hong

Kong. The choice was stark: negotiate the best agreement we could achieve or just hand them over. It was clear that the latter course would have led to the collapse of confidence and of institutions, the decline in business and the emigration of many skilled middle-class people. The only responsible course was to try to persuade the Chinese to agree to preserve every aspect of Hong Kong’s way of life which the British had helped to create over 150 years: freedom under the law, an independent judiciary, free press, free speech, freedom to demonstrate and the free market capitalist economy. The foundations for a democratic system were there but, up to 1984, successive British Governments had been hesitant to develop it.

It was of course the Thatcher Government and in particular the noble and learned Lord, Lord Howe, as the then Foreign Secretary, who led for Britain in the negotiations brokering this remarkable declaration of principles based on one country but two systems, granting the Hong Kong Special Administrative Region a high degree of autonomy. Article 5 sums it up:

“The socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist system and way of life shall remain unchanged for 50 years.”

I should stress the fact that Deng Xiaoping gave the go-ahead for these discussions because, he said, he trusted the noble and learned Lord, Lord Howe. The word “trust” is as relevant today in Hong Kong as it was then. We need to acknowledge that it was remarkably enlightened and far-sighted of Deng Xiaoping at that time to draw up a declaration recognising two very different systems in one country.

In these circumstances, it was surely inevitable that there would be severe strains from time to time in reconciling the determination of Beijing to preserve its ultimate authority over Hong Kong with its commitment to respect the sanctity of Hong Kong systems and way of life. We must remind ourselves that, soon after the declaration, the Chinese National People’s Congress developed the Basic Law of Hong Kong which put flesh on the principles expressed in the declaration. One ultimate aim of the Basic Law was to introduce universal suffrage for both the Chief Executive and the Legislative Council. It is also worth noting that, since 1997, the number of directly elected members of the Legislative Council has gradually increased.

I sense two factors that may go some way to explain the very real anxieties expressed in current demonstrations in Hong Kong, which consist of many young people with aspirations for some kind of participation in their political and economic future. First, there has not been real trust and confidence in the methods for choosing the Chief Executives of Hong Kong since 1997 and the extent to which they listen to the views of all Hongkongers. The second point is linked to the first and is focused on the methods for choosing and electing the next Chief Executive in 2017. The National People’s Congress had stipulated that there would be universal suffrage for the 5 million or so registered voters. However, on 31 August, after several months’ consultation with the people of Hong Kong, the National People’s Congress—the arbiters of the Basic Law—announced that all eligible voters may vote for their

Chief Executive from up to three candidates but that they must be nominated by at least 50% of the nominating committee of 1,200 people. The Chief Executive will be appointed by the Chinese Central People’s Government, based on the results of the election. The argument has been made that a majority of the committee will be sympathisers of the Beijing Government and that therefore there will not be a transparent and fair system, enabling Hongkongers to choose from a wide range of people. Thereafter, the Legislative Council must decide by a two-thirds majority in early 2015. Failure to do so will mean that the arrangements revert to those in 2012 when the present Chief Executive, CY Leung, was chosen without universal suffrage.

At this point, I stress that I believe that the People’s Republic of China, the people of Hong Kong and the British Government have a vested interest in ensuring that this special commitment to “one country, two systems” works successfully and indeed strengthens over time. China needs to demonstrate to the people of Taiwan that the Hong Kong arrangement could in future be viable for them. Moreover, although Hong Kong is perhaps economically less important to China than in 1997, the financial collapse of the region could have devastating consequences. In Britain, we have a moral duty to Hongkongers to encourage the maintenance of the principles of the declaration. In addition, we have strong financial, trade and educational links of importance to us. It is estimated that the stock of British investment in Hong Kong at the end of 2012 was just under £36 billion, some 40% of British investment in Asia. Some 126 British companies have registered headquarters in Hong Kong. Our total exports to Hong Kong in 2013 were more than £4 billion.

However, it is the future of the nearly 8 million people in Hong Kong that matters more than anything else. There is at present a serious tension between the Hong Kong Administration and many of the people of Hong Kong. I believe that there is now an opportunity for all sides to work for a constitutional mechanism that could gain the confidence of the people of Hong Kong. This would involve discussions between the people of Hong Kong and their Administration about how to introduce in 2017 an election process for a new Chief Executive where the nominations committee is broadly representative of the people of Hong Kong and where there is a free and fair choice of candidates.

The approaching second round of consultations will provide the opportunity to propose improved ways in which the four main sectors of representatives are chosen. The Chinese authorities have repeatedly made it clear that it is for the Hong Kong Government to determine the extent and nature of democracy in Hong Kong, in consultation with the people of Hong Kong. It is surely in everybody’s interest to have a Government in Hong Kong who enjoy the confidence of their people. Hong Kong has a well educated, vibrant population, well equipped to embark on a constructive and calm dialogue with the Government of Hong Kong and to help to construct the way forward.

Over the years, Her Majesty’s Government have produced six-monthly reports to Parliament on Hong Kong, which have been helpful and informative. The Government have repeatedly stressed the need to develop

Hong Kong’s distinctive way of life and level of autonomy. I look forward to hearing the Government’s view on the present situation and the importance of finding a solution which commands the trust and confidence of the people of Hong Kong.

Photo of Lord Goodlad Lord Goodlad Chair, Secondary Legislation Scrutiny Committee 2:41 pm, 16th October 2014

My Lords, I congratulate the noble Lord, Lord Luce, on initiating this timely debate and on his wise speech, with all of which I concur. I speak with what I hope is the degree of diffidence appropriate to one who does not live in Hong Kong and who has viewed recent developments there from afar. I was one of the noble Lord’s successors as Minister of State at the FCO responsible for Hong Kong and our relations with China. No one who cares about China and Hong Kong can view recent developments with equanimity and pass by on the other side. It is deeply distressing to see people’s lives and businesses being disrupted as they have been and are being. The noble Lord has given a learned and completely accurate analysis of the Joint Declaration and the Basic Law, which I will not repeat.

The noble Lord referred to the Foreign Office report to Parliament. In his foreword to the six-monthly report on Hong Kong deposited this July by William Hague, the then Foreign Secretary, he wrote that it was his belief that the best way to preserve Hong Kong’s strengths is through a transition to universal suffrage which meets the aspirations of the people of Hong Kong within the parameters of the Basic Law, and that there is no perfect model. The important thing is that the people of Hong Kong have a genuine choice and feel that they have a real stake in the outcome.

I agree with the Government’s position on that. I share my right honourable friend’s welcome that a broad range of groups will be and have been engaged in consultations organised by the Hong Kong Government. What the constitutional package will eventually look like is for the Government of Hong Kong’s Special Administrative Region, China and the people of Hong Kong to decide. In my view, there can be no argument but that constructive dialogue and sincere co-operation towards the reconciliation of opposing views is a better option than personal and economic disruption. That seems to me to be the lesson of history in various parts of the world. Dissenting parties eventually have to talk, and the earlier they do so the better.

Those of us brought up in the democratic traditions of this country instinctively share the impatience of those in Hong Kong for faster progress to genuine universal suffrage and broader-based representational democracy, but Rome was not built in a day. Much progress has been made constitutionally in Hong Kong over recent decades, in no small part thanks to the efforts of some of your Lordships.

Over recent years, we in this country have engaged in substantial discussion about constitutional matters: Northern Ireland, Scottish and Welsh devolution, proportional representation, constituency boundaries, the role and composition of the House of Lords, our relationship with the European Union—I could go on.

No doubt we shall continue such discussion. We have had violence on our streets but, by and large, most people believe as I do in early and continual dialogue.

Of course, that is easier said than achieved, but I hope that recent developments in Hong Kong will lead to progress rather than a hardening of attitudes and that the ingenuity and persistence of those in China and Hong Kong—not to mention here in this country—over recent decades, which have allowed different interpretations of the public interest to coexist to the huge benefit of the people of Hong Kong and others, including us, can be somehow resumed. Of course we stand ready to help, if we ever can. We wish them well.

G

We should stand ready to help the Government of Hong Kong. Gerald Morris R.N.V.R. D.C.M. D.S.M. Korean Medals, Canal Zone Clasps: Bomb & Mine Clearance .Naval General Service. Gerald Morris.

Submitted by Gerald Morris

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Liberal Democrat 2:45 pm, 16th October 2014

I recall the foreboding that I felt in the late spring of 1989 over the protests in Tiananmen Square. We know what happened. Although they enjoyed much popular support, the protests were suppressed. More than 300 people were killed and many more were injured and wounded. Foreign journalists were banned. Western Governments imposed economic sanctions and arms embargoes. I took part in the protest march around Causeway Bay and Happy Valley the following year on the first anniversary. That march still takes place.

There is no comparison between the freedoms enjoyed today in Hong Kong and the repressions of Beijing in 1989. First, there is freedom of assembly. It is true that on the 28 September, at the beginning of Occupy Central, the police used pepper spray, tear gas and batons to disperse the crowds, but the reaction was such that on the following day, the riot police were withdrawn. For two weeks, non-violent demonstrations were tolerated and spread. They spread to other parts. The only real threat of violence came from the triad groups in Mong Kok. There is an assumption that their involvement was encouraged by the authorities. That may or may not be true. Knowing something of these groups from practice in the criminal courts in Hong Kong, I had predicted they would get involved in any violence going—and indeed they did.

There have been isolated incidents as the police have this week removed barriers. On Wednesday last, some journalists complained of being punched and dragged by police officers in the Lung Wo Road. In the evening, Hong Kong police officers took the social worker Ken Tsang, a protest leader, to a quiet part of Tamar Park and beat him up. However, that has not been suppressed. Seven policemen have been suspended, the case has gone to the High Court for a mandatory injunction, the Independent Police Complaints Council has been informed and there have been protests by Amnesty International and the Hong Kong Bar Council, among others. In other words, the rule of law has been maintained and strengthened. There is freedom of speech, because all those events have been fully reported.

Indeed, the election of the next Chief Executive by universal suffrage in 2017 will be a significant step towards democratic government. Unfortunately, the Standing Committee of the National People’s Congress in Beijing has sought to set boundaries on the method of election: namely, as the noble Lord, Lord Luce, who must be congratulated on obtaining this debate, said, that there should be no more than two or three candidates; that they will be nominated by the nominating committee, and that each candidate’s nomination will require the consent of more than 50% of the committee, as opposed to the eighth of the membership of the committee when the previous Chief Executive was elected.

The present disturbances are fuelled not so much by demands for freedom, as in 1989, but by fears that the freedoms enjoyed by Hong Kong people might be taken away in future. Another factor is economic inequality. The World Bank has indicated that Hong Kong billionaires’ combined net worth equals 80% of the city’s gross domestic product. The disparity of wealth between richest and poorest as measured by the Gini coefficient is the greatest in Asia. The well educated young people on the streets of Hong Kong see no prospect of owning property themselves in the foreseeable future and fear that their interests are not represented at the decision-making level.

But as in Tiananmen Square, the protesters have no end game. They have made their point: that unless their views are considered, they have the capacity to disrupt the smooth running of the city. Today, they are still occupying 2.3 kilometres of the city’s streets. They should now hold back. Now is the time for compromise.

The Government themselves have been dilatory and entirely reactive. They are relying upon the protest movement losing public support, as people become increasingly irritated by the disruption of their livelihoods. Meetings with the Hong Kong Federation of Students have stalled. In the pending public consultation on the election process, the Hong Kong Government say that they will be seeking common ground and wish to forge consensus in a rational and pragmatic manner.

I suggest that these are the areas to be explored. First, can the nominating committee which chooses the candidates be elected to represent a broader spectrum of public opinion? At the moment, any prospective candidate is bound to tailor his platform towards the dominating business element. Secondly, is the new requirement that, to be nominated, a candidate must gain more than 50% support of the nominating committee desirable or sustainable? Thirdly, is there any justification for restricting the number of candidates to three? Fourthly, should political groupings be encouraged to put forward candidates for the committee to consider? A source of much friction in the current system is that a Chief Executive without a party behind him lacks political support in the legislature. At the Hong Kong Association luncheon at the Shard last Tuesday, I asked the Secretary for Justice, Mr Rimsky Yuen, about this. He said that there was no reason why they should not put forward candidates.

It would be timely for both the Chinese and the Hong Kong Governments to reassure Hong Kong that its freedoms, which now include free access to the internet and social communications such as Facebook, will be preserved. There is a Chinese saying that a strong flow of water should not be blocked but channelled. The Government might also consider Mr Gladstone’s precept: trust the people, do not fear the people. Hong Kong is never going to compromise its prosperity and security by electing a Chief Executive who is completely anti-Beijing. The grievances of these young people should be addressed. They should never be suppressed.

Photo of Lord Sassoon Lord Sassoon Conservative 2:53 pm, 16th October 2014

My Lords, I declare interests, as recorded in the register of interests, as a member of the committee of the Hong Kong Association, as chairman of the China-Britain Business Council and as a director of Jardine Matheson Holdings and other companies in the Jardines group. I should add that I speak today very much from a business perspective. From a business perspective, Hong Kong is in an excellent position in 2014. Whether as a place with which to do business, in which to do business or from which to conduct business, Hong Kong could hardly be better placed. The UK, if we include both goods and services, exports some £7 billion to Hong Kong each year and around 40% of all UK investment in Asia is in Hong Kong. Firms of British origin, such as Jardines, could not be made to feel more welcome in today’s Hong Kong.

In the face of some major economic challenges, Hong Kong has prospered since 1997. The Hong Kong SAR Government, with the support of the PRC Government, have steered the economy with significant success. Who predicted in 1997 that the prosperity and stability of Hong Kong in 2014 would continue to be so soundly based on low and simple taxation, the rule of law, an independent judiciary, freedom of speech and a clean and competent civil service? We should remember that Hong Kong now ranks second in the World Bank’s rankings on ease of doing business, whereas the UK is in 10th position. As China’s financial centre, Hong Kong dominates the equity flows into and out of China and is a regional base for very many companies, including around 130 from the UK—a base for business not just in greater China but across the whole of south-east Asia. All this has been achieved, as we have heard, within the formula of “one country, two systems”, set out in the joint declaration and translated into law through the Basic Law in 1990. It has been a remarkable achievement exceeding, I suggest, all expectations.

The present protests in Hong Kong are of course worrying to all of us who wish to see a continuation of Hong Kong’s prosperity but they demonstrate two things. First, as my noble friend Lord Thomas of Gresford has just said, they demonstrate that the right to protest is very much alive and respected by the SAR Government. Secondly, they demonstrate that there is a process under way to develop the system of elections in Hong Kong within the framework of the Basic Law.

Finally, in looking forward to what my noble friend the Minister has to say in responding to this debate, and thinking of the UK’s position, can he confirm what I understand to be the case: that the details of the constitutional reforms in Hong Kong are not matters defined in the joint declaration; and that there are no specific obligations on the Government on these matters, and so no locus for direct intervention by the UK Government?

Photo of Lord Wilson of Tillyorn Lord Wilson of Tillyorn Crossbench 2:57 pm, 16th October 2014

My Lords, with demonstrations still going on in Hong Kong and emotions running quite high, it is quite hard to know how we here can comment helpfully on the situation there. But perhaps this debate launched by my noble friend Lord Luce gives us the opportunity to stand back and try to see these events in context.

It is now 17 years since Hong Kong became a special administrative region, or SAR, of China and the UK ceased to have any direct responsibilities for administration there. It is even longer—some 30 years—since the joint declaration on the future of Hong Kong was signed by China and Britain, and registered in the United Nations as an international treaty. That joint declaration has stood up well against the passage of time. There are accusations made now and then that China has broken the terms of the joint declaration but I personally know of no valid evidence that either China or the Hong Kong SAR has offended against the terms of that declaration. Of course what is going on in Hong Kong at the moment is not directly related to the joint declaration; rather, it is related to Hong Kong’s mini-constitution—the Basic Law which, as the noble Lord, Lord Sassoon, said just now, was passed as long ago as 1990 by the National People’s Congress of China. It is of course a Chinese document, not part of the joint agreement with the UK.

Looking from a distance at those massive demonstrations which have been going on now in Hong Kong for well over two weeks, it is hard not to be impressed by the enthusiasm of thousands of young people and their commitment to their own political future. It is hard too not to be impressed by the generally peaceful way in which the demonstrations have been carried out, particularly in their early days. It is hard to think of a great city in the world where this sort of demonstrating can go on for so long with so few serious incidents. Apart from the incidents referred to by the noble Lord, Lord Thomas of Gresford, where the police did certain things, some of the credit for this goes to the Hong Kong police as well.

I said that it was hard not to be impressed by some of these things, but it is hard not to be concerned as well. After all, the objectives that the demonstrators set for themselves seem to have so little chance of being realised. Many of them say just that. For instance, there is the demand that the Chief Executive, Mr Leung Chun-ying, should resign. Perhaps that one was largely symbolic, rather like what occurs down the Corridor in another place when there are calls for the Prime Minister or other Ministers to resign.

However, the heart of the protesters’ demands, as other noble Lords have said, is of course that the election of the next Chief Executive in three years’ time should be on an open list of candidates put forward by the public, not processed by a nomination committee, nor with the list of candidates limited to two or three by that committee. That demand is not being made in a vacuum. After all, it is calling for the abandonment of what was laid down in the Basic Law way back in the 1990s, as well as what has been said by the National People’s Congress since. The Basic Law had what it called the ultimate aim of a Chief Executive elected by universal suffrage but that was to be on the basis of a nomination committee, which was to be broadly representative and chosen by what was called a democratic process. It really is hard to see those provisions being changed as a result of the demonstrations that have been going on and are going on now. Perhaps, indeed, as noble Lords have suggested, it might be better for those who are strenuously opposed to the provisions now being laid down to concentrate rather on matters such as how to form that broadly represented nomination committee and how it should actually operate in practice.

There is another, more serious concern about the demands being made. If the next Chief Executive is to be elected in 2017 for the first time ever by all the electors of Hong Kong, a proposal to do that has to be passed by Hong Kong’s Legislative Council—by a two-thirds majority, incidentally. If there is no such majority because people want more than is on offer, then the whole process of choosing the next Chief Executive falls back to what is there now—in other words, a choice made only by that committee of 1,200 people, not by universal suffrage. So the opportunity for a major step forward in Hong Kong would be missed, and that, to put it mildly, would be a great shame.

Looking beyond these concerns, there is an even bigger issue. Hong Kong and the lives of all its people can prosper, rather as my noble friend Lord Luce was saying, on the basis of trust, and that is trust between Hong Kong and mainland China. Hong Kong itself can play a full role in the development of China, with its financial expertise, its superb communications and its rule of law, only if there is trust between mainland China and Hong Kong. So when the dust settles on the present disputes, the hope must be that all those in positions of leadership, and all those enthusiastic young people concerned about the future of their society, will devote their efforts to building up that trust.

Photo of Lord Glenarthur Lord Glenarthur Conservative 3:06 pm, 16th October 2014

My Lords, during the two years from 1987 to 1989 when I was Minister for Hong Kong, sandwiched somewhere between the noble Lord, Lord Luce, and my noble friend Lord Goodlad, and of course with my noble and learned friend Lord Howe of Aberavon as Secretary of State, and with the noble Lord, Lord Wilson of Tillyorn, as governor, I like to think that I became fairly well attuned and attentive to the demands for increased democracy in Hong Kong. Those demands were understandable even if they were not fully deliverable, and there is precious little that I can say that will satisfy those whose views are immovable. Of course there were many others in Hong Kong then for whom demands for democratic reform were something of a sideshow, and what mattered most was continued economic stability and growing prosperity.

I know of the detailed work that went into the Sino-British Joint Declaration and subsequently into the Basic Law and the work of the Joint Liaison Group. None of those negotiations was easy yet, faced with 1997, pragmatic progress was essential and was achieved. It is now about five years since I was last in Hong Kong, although I have visited several times since 1997. On each visit—I am sure others share this view—I have been greatly encouraged that, broadly speaking, economic, business and social life in Hong Kong seemed to be continuing as it always had, and has been recognised and upheld as such by Beijing, but yes, increased democracy has always been an undercurrent. However much there may be concern now that somehow progress has been insufficient, it is worth remembering that in 1990 there was not a single directly elected seat for LegCo. Since then, the election for that legislature has become increasingly democratic, as the noble Lord, Lord Luce, has described. The facts and figures speak for themselves, and I pay tribute to all those who pressed for that direction of movement.

It is my understanding that the ultimate aim of universal suffrage for the election of the Chief Executive, as envisaged in the Basic Law and as a long-held aspiration of most people in Hong Kong, has proceeded well. That the election committee has been expanded from 400 to 800 and now to 1,200, encompassing 38 subsectors, is in itself substantial progress, even if it does not satisfy everyone. Although the joint declaration is mute on the details of the election of the Chief Executive, the Basic Law is more detailed, setting out in Article 45 that:

“The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures”.

The former Foreign Secretary my right honourable friend Mr Hague says, in his foreword to the Government’s six-monthly report on Hong Kong covering the period from January to June this year, that meeting the aspirations of the people of Hong Kong within the parameters of the Basic Law is the best way forward. He goes on, as my noble friend Lord Goodlad mentioned, to say that,

“there is no perfect model”,

and I entirely share that sentiment. We are where we are, and ultimately it is for the people of Hong Kong and the Governments of China and Hong Kong to decide how to carry things forward.

It is perhaps easy to dismiss or perhaps forget the difficulty of how the Basic Law was achieved all those years ago, and to underestimate the challenges faced by the Joint Liaison Group before 1997 and up to its ending in 1999. Most negotiations end up with a degree of compromise and, as the noble Lord, Lord Luce, said, I understand the frustration of many younger people now demonstrating that the pace of democratic reform has not been as fast as, or precisely in the direction that, they would wish it to be, or would have wished it to be had they been able to articulate their views all those years ago. However, the fact is that there has been encouraging progress; that any candidate nominated must be so by 50% of the nominating committee, as the noble Lord, Lord Thomas of Gresford, has said; and that the precise mechanism for choosing the nominating committee is a matter for public consultation that will take account of the views so vividly being expressed currently on the streets of Hong Kong.

These are troubling times. They demand cool heads in Hong Kong and Beijing, as they do among those of us commentating on the situation from many thousands of miles away. That is not to say that the United Kingdom should not use all the powers and influence available to it to ensure that China sticks absolutely to the letter of the Basic Law, nor should we be ashamed to say that as time passes other aspirations for democracy among Hong Kong people will emerge, and that those aspirations will require sensitive handling in Beijing, as everywhere else. The Basic Law cannot now be changed but it was long argued and hard won and must be respected by all, not least in the continuing process of delivering the success of the promise held out by the concept of “one country, two systems”, to which, as this short debate makes quite clear, we all aspire.

Photo of Lord Marlesford Lord Marlesford Conservative 3:10 pm, 16th October 2014

My Lords, I declare my interests as in the register. When my noble friend Lord Patten of Barnes was Governor of Hong Kong, he achieved two things. First, he focused the eyes of the world on Hong Kong so that, if it were ill treated or the “one country, two systems” agreement were interfered with, it would be headline world news. Secondly, he taught the people of Hong Kong the basics of politics, how to express and advocate what they wanted and to stand up for themselves. Recent events have shown that both lessons have been learnt.

Democracy can be most soundly built if it has good foundations and is then constructed brick by brick. On the whole, attempts to offer countries our pattern as a ready-made kit instantly applicable have been a disaster, often leading to anarchy or dictatorship. The foundation for democracy in Hong Kong was the joint declaration enshrined in the basic law. It is important to remember that a majority of local citizens identify themselves as Hongkongers rather than Chinese. That proportion is growing: Hong Kong University does a poll on this twice a year and has shown that since 1997 the proportion has grown from 60% to 67%.

This of course reflects the most important of all the facts about Hong Kong: it is a true international financial capital, the third most important after London and New York. China is lucky enough to have that international capital. I emphasise that, although Shanghai is the undisputed commercial capital of China, that is very different from being a financial capital. Shanghai is decades away from being so. There are many reasons for that, but the paramount one is the rule of law and the supremacy of an independent and incorrupt judiciary, which China does not have but Hong Kong does.

Photo of Lord Bach Lord Bach Shadow Spokesperson (Foreign and Commonwealth Affairs) 3:12 pm, 16th October 2014

My Lords, I congratulate the noble Lord, Lord Luce, on obtaining this debate, but I go further and thank him for his opening speech, which set out in clear and sympathetic terms the background to what has been described as Hong Kong’s,

“most challenging political crisis since the handover in 1997”.

Who better than the noble Lord to do this? He was the Minister responsible for Hong Kong in the period that led up to the 1984 joint declaration and he has set out today the issues that the then Government had to take into consideration at the time. I believe that our country owes a debt to the noble Lord and to the noble and learned Lord, Lord Howe, who was then Foreign Secretary, for what they achieved.

It has been said that the nature of the governance of Hong Kong has always been the most difficult and sensitive issue relating to handover and thereafter. It was always going to be thus. No one thought that a system of “one country, two systems” was somehow going to be trouble free. Hong Kong had not known democracy under British rule, although in latter years this may not have been the fault of British Governments. The Chinese claim that there has been more democracy in Hong Kong in the past 17 years than in the previous century and a half and, in a sense, they are right, even though in the latter years they seem to have resisted in strong terms British proposals for more democracy.

We know the immediate cause of these demonstrations —they have been well explained by noble Lords today. It is easy to understand why thousands of Hong Kong citizens are fearful that the choice of a new Chief Executive in 2017, to be decided by universal suffrage, will be fatally flawed, or at least hugely restricted, by the power of a nomination committee to draw up a small shortlist. However, to limit the significance of these protests—and it always takes bravery to protest—to this important issue alone is probably a misreading. Whether their fears are justified or not, the thousands on the streets are surely asserting their rights under the 1984 joint declaration to protest peacefully and speak openly, which are crucial rights, along with the right to universal suffrage, in any democracy. They are also perhaps expressing their concerns about what will happen in future.

I agree with the noble Lord, Lord Wilson, that to see young people, in particular, anywhere showing their commitment to democracy and freedom is moving and impressive. However, as he said, the situation on the ground remains a matter of deep concern. We on the Opposition Benches support the Government in seeking reassurances from the Government of China regarding their commitment to the “one country, two systems” principle. It is vital that Hong Kong is able to pursue the fundamental rights and freedoms of its people, including universal suffrage. A period of dialogue, which we hope will begin, is needed to move Hong Kong forward. We urge the Chinese Government on the one hand and the pro-democracy protestors on the other to engage constructively in that discussion. We look forward to the Minister’s reply.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip) 3:16 pm, 16th October 2014

My Lords, this has been an expert and sober debate. On these occasions, I remember that on my first visit to China and Hong Kong, the most useful briefing I had was from the noble Lord, Lord Wilson of Tillyorn. I think that he was then a little less grey than he is now and I suspect that I was, too.

The Government firmly believe that the United Kingdom and China share interests in a prosperous, capitalist Hong Kong with a thriving civil society, a clear rule of law and the movement towards political autonomy that was outlined in the joint declaration of 1984. I pay tribute to the noble Lord, Lord Luce, for his role as the then Minister of State in securing the joint declaration. As we approach the 30th anniversary, the UK remains as committed to the joint declaration as ever. “One country, two systems” works well. The high degree of autonomy, rights and freedoms enshrined in the joint declaration continue to be upheld. Hong Kong has an independent judiciary and direct and active participation in political debate by a number of different political parties. We have just seen how lively civil society in Hong Kong is. It is a vibrant and engaged civil society in every way. It has the freedom, recently shown, to participate in regular, and usually peaceful, protests in accordance with the law. The United Kingdom recognises Chinese sovereignty over Hong Kong, but has shared interests in the widest sense in the future of Hong Kong.

The noble Lord, Lord Luce, talked of Britain’s moral duty to Hongkongers to encourage the principles of the joint declaration and said that the future of nearly 8 million people in Hong Kong matters above everything else. Perhaps I should mention that a quarter of a million British citizens live in Hong Kong, as well as a substantially larger number of overseas British nationals, so we have all sorts of different stakes in the future of Hong Kong. I assure my noble friend that Britain’s commitment to Hong Kong remains as strong as ever. As a signatory of the Sino-British joint declaration and as a country with the many ties with Hong Kong that have been expressed by the noble Lord, Lord Sassoon, and others in trade, economy, culture and education, it is vital to us as well as to China that Hong Kong continues to prosper. Part of our shared interest is that we are all aware that if Hong Kong did not continue to be stable, to be clearly governed by the rule of law and to prosper, other financial and service centres around east Asia would be very happy to take over some of what makes Hong Kong so prosperous.

Hong Kong is an important part of the UK’s relationship with China and we discuss it regularly and continuously at all levels. This has included discussions between the Prime Minister and Chinese Vice-Premier Ma Kai in September and Premier Li Keqiang in June, including the issue of constitutional development. Our six-monthly reports on Hong Kong to the British Parliament show our commitment to continuing to follow developments in Hong Kong and the implementation of the joint declaration closely. The most important thing is that the high degree of autonomy, rights and freedoms that are guaranteed by the joint declaration and embodied in the concept of “one country, two systems” are respected.

The Government’s assessment is that the Chinese Government’s White Paper of June 2014 has not undermined judicial independence, nor has it breached the 1984 Sino-British joint declaration. The White Paper reiterates China’s commitment in the joint declaration that the Hong Kong special administrative region exercises a high degree of autonomy in accordance with the law and is vested with executive, legislative and independent judicial power. The independence of the Hong Kong judiciary, as the noble Lord, Lord Thomas of Gresford, stressed, has been and continues to be key to Hong Kong’s success in the world economy. We share his view that the rule of law continues to prevail and that policing of the recent demonstrations has been largely proportionate.

On 31 August, the National People’s Congress standing committee in Beijing announced its decision on the methods of Hong Kong’s electoral reform. We welcome its reconfirmation of universal suffrage as China’s objective for the election of Hong Kong’s Chief Executive. We also recognise that the detailed terms set out by the National People’s Congress would disappoint those arguing for a more open nomination process. We therefore encourage dialogue and consensus-building during the next stage of the consultation, in line with the basic law which provides Hong Kong’s constitutional basis.

Today, we are witnessing a significant phase in Hong Kong’s development, with calls for democratic reform through widespread protests. As we have said in statements since the protests began at the end of September, we call for rights and freedoms to be respected and urge all sides to engage constructively in dialogue to work towards a consensus that allows a meaningful advance for democracy in Hong Kong. We welcome the fact that the Hong Kong Government have responded to the protestors’ demands with offers of talks with the Hong Kong Federation of Students and the other organisations involved. We hope that a mandate for these talks will be agreed as soon as possible. We will continue to monitor these events. Perhaps I should add that Her Majesty’s Government are conscious, from the experience of the Arab spring and other events, that, in reform and consultation, slow progress is often better than an attempt to move to the politics of the streets and to overthrow, which can often take us backwards rather than forwards.

On the wider issue of Hong Kong’s constitutional reform, the Government’s position remains unchanged. The detail of the constitutional package is for the Governments of Hong Kong and China, along with the people of Hong Kong, to decide, in line with the basic law and the subsequent decisions of the standing committee of the National People’s Congress. We recognise that there is no perfect model. We have, after all, heard earlier today some disagreement about what the perfect model for democracy for the United Kingdom might be. The important thing is that the people of Hong Kong have a genuine choice and feel that they have a real stake in the outcome. Reaching consensus requires all parties to continue to engage in a constructive dialogue. It is also Britain’s long-standing position, I reiterate, as a co-signatory of the Sino-British joint declaration, that Hong Kong’s prosperity and security are underpinned by its fundamental rights and freedoms, including the right to demonstrate.

My noble friend Lord Sassoon asked whether the details of the constitutional reforms in Hong Kong are matters defined in the joint declaration. There are no specific obligations on the Government on these matters and no locus for direct intervention by the Government. As I stressed, the details are for Hong Kong and China. Both the UK and China made commitments to Hong Kong through the legally binding 1984 joint declaration. That agreement, which led to the handover of Hong Kong, protected Hong Kong’s previous capitalist system and lifestyle for 50 years, with all the rights and freedoms that I have mentioned. The basic law and subsequent National People’s Congress decisions set the terms for constitutional development in Hong Kong. Our legal obligations under the joint declaration were to run Hong Kong until 1997 with the object of maintaining and preserving its economic prosperity and social stability and to restore Hong Kong to Chinese sovereignty with effect from 1 July 1997. Following that handover, we maintain an interest in ensuring that China honours its legal obligations under the joint declaration.

My noble friend also speaks, quite rightly, of Hong Kong as an excellent place for business in east Asia, as an important part of Britain’s international extension of our own economic interests through financial and legal services, as a large export market and as a centre for a number of British companies. I also pay tribute to my noble friend Lord Glenarthur and his work as Minister of State responsible for Hong Kong in the late 1980s. He rightly says, as others have, that it is for the people of Hong Kong and the Governments of China and Hong Kong to decide how to carry things forward.

My noble friend calls these “troubling times”. The Government believe that it is important that Hong Kong citizens’ basic rights and freedoms, including those of assembly and demonstration, are respected in line with the joint declaration, and that it is also important that demonstrations are carried out in accordance with the law.

The future of Hong Kong, as this debate has shown, is of great importance to the UK as a signatory to the joint declaration. However, it is also important to us because of our close history, our wealth of personal links and the strong two-way trade and investment. All these make Hong Kong one of the UK’s most important international partners and an essential part of our overall relationship with China. It is therefore vital to us that Hong Kong continues to enjoy prosperity and stability through the success that is underpinned by autonomy, rights, freedoms and the rule of law, all of which are guaranteed by the joint declaration. That is the message that we will continue to convey both to Hong Kong and in our regular and continuing dialogue with our partners in China.