On a point of order, Mr. Speaker. I am sorry to delay our proceedings, but I seek your guidance on a procedural matter. I tabled a question to the Secretary of State for Wales, which was transferred to the Secretary of State for Transport. It initially appeared as question No. 1 on the Order Paper. I seek your guidance, on two points. First, is it procedurally correct that it should now appear as question No. 16 on today's Order Paper? Secondly, if we reach that question today, will the Secretary of Transport, or one of his Ministers, be here to answer it?

The hon. Gentleman is correct to say that his question now appears as question No. 16 on the Order Paper. I am not responsible for the transfer of questions. However, if we reach question No. 16 today, the Minister should be here to answer it.

asked the Secretary of State for Wales what representations he has received from Gwent county council concerning the Government's review of regional policy; what reply he has sent; and if he will make a statement.

The council has written to me about the results of the review as they affect Gwent. My reply makes clear the Government's commitment to a more cost-effective regional policy concentrating on the needy areas and the creation of jobs. Gwent will continue to be well placed to compete for new investment.

Does the Secretary of State appreciate that Gwent cannot understand the logic of cutting £60 million from the regional aid budget for Wales merely to provide tax concessions for those in the south-east of England? As a result of the changes, will there not be increased competition from Bristol, Swindon and the west midlands? How on earth are we going to put those 180,000 people back to work?

Many of the representations that we have received, including those from the Wales TUC, believe that financial assistance should be related to jobs rather than wasted on very large capital projects without any consideration of the relationship to jobs. We are making substantial savings by not financing the renewal of plant, which should be funded by companies out of their normal expenditure. Gwent will be well able to compete, not only because of the many advantages that it has for incoming industry, but because its northern part has the top level of assistance available. Elsewhere, through selective assistance, it will be able to offer a very attractive package of aid.

I agree that it is desirable that regional assistance should be geared to jobs rather than to capital exapansion. However, will the new arrangements be open to any reconsideration should the worst criticisms of certain people be realised in any respect?

The Government will always keep the progress of their policies under review. The cost-per-job limits under the revised system are about twice the average level of investment by companies. Therefore, there should be plenty of scope for significant investment, even with those cost-per-job limits.

As Newport, in the county of Gwent, has been demoted from development area to intermediate area status as a result of the recent changes and has consequently lost its regional development grant, can the right hon. Gentleman tell us what percentage of Gwent's working population were in receipt of, or eligible for, regional development grant before the changes, as well as giving the current figures? We know that in Wales the cut has been from 90 to 35 per cent.

In making that last statement the hon. Gentleman has shown that he does not understand that we are now dealing with a two rather than a three-tier system. Therefore, such a comparison is not relevant. I cannot give the hon. Gentleman the specific figures that he seeks, but if he tables a question I shall try to provide the information. Since 1979 more than £23 million of selective assistance has been given in the Newport travel-to-work area for projects valued at more than £166 million in order to provide about 7,900 new jobs. That shows the considerable value of selective assistance in attracting new investment.

asked the Secretary of State for Wales if, since his reply of 10 December, he has met the chairman of the National Coal Board to discuss the current state of the dispute in the coal industry.

I met the chairman of the National Coal Board on 14 January.

I thank the Secretary of State for his reply. It is encouraging to know that he has at last met the chairman. On 10 December he said that he had not met the chairman since the start of the dispute, on 6 March, until that day. Is the right hon. Gentleman aware that in Ogwr borough numerous jobs have been lost as a result of the mining dispute? The right hon. Gentleman has said that no jobs have been lost since March. We know that jobs have been lost. The right hon. Gentleman should have taken an initiative to try to resolve the dispute. I hope that he will attend a meeting to be convened with the Secretary of State for Energy this week.

I never said that jobs would not be lost. Indeed, I always said that other industries, notably the transport industry, were likely to be affected by this damaging strike. That is why I have urged the hon. Gentleman to press the members of the National Union of Mineworkers to return to work. I shall attend the meeting with my right hon. Friend the Secretary of State for Energy later this week and listen to the points made at that meeting.

Is the Secretary of State aware of the depth of depression caused in Wales by his economic policies? For example, the indices of house prices show that we alone in Wales had no increase in house prices over the past year. Is it therefore surprising—

Order. The hon. Gentleman's question does not have much to do with the chairman of the NCB.

Is it therefore surprising that miners are fighting for their jobs and their communities, given that background of depression? Will the right hon. Gentleman look at the definition of "economic pits" to ensure that social considerations, such as the future of our mining communities, are taken into account?

I shall be happy—and so will the NCB—to look at the definition of "economic pits" if Mr. Scargill is also prepared to look at and discuss the definition of economic pits and to negotiate about them. His refusal to do so consistently throughout the dispute has got us to the present situation.

Is my right hon. Friend aware that at the commencement of the strike the miners of south Wales voted 70 per cent. against taking industrial action, and that, had the NUM leadership listened to the grass roots of the nining industry, there would have been no strike?

It is deplorable that we still have not had a ballot, but 40 per cent. of the members of the NUM have voted with their feet and gone back to work, and another 1,700 members of the union returned to work today. That is why there is apparently a sudden interest among the leaders of the NUM to negotiate. I hope that they will negotiate about the real issues that are now before us.

The Secretary of State's attitude is not encouraging, given the importance of the dispute and the critical situation that it has now reached. Will the Government encourage a negotiated, principled settlement that will heal divisions in our society? Does not the whole nation look to the Prime Minister and the Cabinet to display statemanship in their attitude to a dispute that encompasses much suffering?

Of course we shall encourage a negotiated settlement. I think that there have been seven rounds of negotiations so far, in which Mr. Scargill has not moved one inch. That is why we are in our present position. The NCB has moved. It made it clear in its negotiations with NACODS that it could reach a settlement that offered a sensible future for the industry and its further development.

asked the Secretary of State for Wales if he has any plans to make an official visit to his Department's offices in Aberystwyth during the next three months.

Not at present.

I am sure that the Secretary of State is well aware of the fact that most of his staff at his Department's offices in Aberystwyth speak Welsh. To safeguard the future of the Welsh language, has the right hon. Gentleman any plans to update the 1967 legislation dealing with that language?

I have no plans at present for changing the legislation.

Although the right hon. Gentleman is perhaps fighting shy of visiting Aberystwyth, will he pluck up enough courage to go there to see at first hand the dairy farmers of west Wales, who are in an especially severe plight and who might be able to influence him to go to Brussels for the next round of negotiations?

I do not need to go to Aberystwyth to meet the dairy farmers of west Wales, because for many months I have met them almost every week, and I am fully aware of their views. As recently as last Friday I met the leaders of the Farmers Union of Wales and the National Farmers Union.

Is the right hon. Gentleman unwilling to go to Aberystwyth because of the number of posts lost in the Department's offices in Aberystwyth since he became Secretary of State?

The hon. Gentleman is wrong to suggest that I am not willing to go to Aberystwyth. I frequently go there. I simply do not have any plans to visit my Department there during the next three months.

Does the Secretary of State accept that centralisation of various public offices in Cardiff, which is a long way from mid and north Wales, is unhealthy? Will the right hon. Gentleman give the House an absolute assurance that the Welsh Office agricultural department will remain in Aberystwyth?

I have no plans to change the present arrangements. A large part of the agricultural department is situated in Aberystwyth. It is important that members of the agricultural department should be in close touch with other offices during the other important Government negotiations that occur in Cardiff and London. That is why we have the present arrangements. The Forestry Commission plans to concentrate its management on Aberystwyth.

asked the Secretary of State for Wales if he will estimate the damage to the Welsh economy caused by the miners' strike.

asked the Secretary of State for Wales if he will make a statement on the effect of the mining dispute on the economy in Wales; and if he will make a statement.

While the economy in general is coping well, there is an increasing impact on those sectors which serve the coal industry and on small businesses in mining areas.

Does my right hon. Friend agree that, because the latest CSO statistics show that the miners' strike is depressing economic growth by 1·5 per cent., and because every aspect of economic policy should be directed towards the reduction of unemployment, as the shadow Chancellor said last week, it is extremely damaging, totally illogical and contemptibly hypocritical for the Labour party to support a strike that prevents the creation of desperately needed new jobs in Wales?

I agree with my hon. Friend. I suppose that one could say that it is self-indulgent for Opposition Members who take that view to put forward their own luxurious opinions, attitudes and activities before considering the real impact of their actions.

When the Secretary of State meets the Church leaders later this week, will he bear in mind what we prayed for together at the beginning of this sitting? Will he then listen with a contrite heart and take account of the attempts by Church leaders to put forward the objective will of the Welsh people for a consensus and a Welsh solution to this dispute?

I shall listen carefully to the leaders of the Welsh Church and ascertain whether they have any proposals which are likely to forward the negotiations. At the moment I do not see how another general review of the future of the mining industry — on top of the three reviews that we have had in comparatively recent times—will help. I hope I shall hear that the Welsh Church leaders will press for a ballot and for the leadership of the NUM to negotiate and consider the industry's future. As always, I shall listen carefully to the Church leaders.

Will my right hon. Friend guarantee that no further concessions will be made on the already generous terms on offer to the miners?

It is certainly true that the NCB has moved a considerable way. It is difficult to understand how the NCB can go beyond the point that it reached in its agreement with NACODS. If we are to have a settlement, we need a willingness by Mr. Scargill and the leadership of the NUM to face the reality of discussing economic and uneconomic pits.

Will the right hon. Gentleman dismiss from his mind what his hon. Friend the Member for Clwyd, South-West (Mr. Harvey) has just said? Giving him the benefit of the doubt on his earlier answer about his concern for the economy of Wales, does the right hon. Gentleman agree that, with his responsibilities for Wales, it is time that he put pressure on the Prime Minister to ensure that negotiations take place?

What is needed is pressure from the hon. Gentleman, and all others who may have contact with or influence on the NUM, to ensure that negotiations can take place on a basis that includes consideration whether uneconomic pits should close and acceptance of the fact that there should be a ballot of the members.

Would my right hon. Friend care to estimate how ready the British Steel Corporation will be to resume its former level of orders from the South Wales coal board when the strike is over?

That will be a matter for the industry, but there is no doubt that the strike will have damaged markets. It will almost certainly also have changed the transport pattern for coal in the area, to the long-term disadvantage of British Rail and its employees.

Has not the mineworkers' leader already said that he is willing and waiting for negotiations to start without any set agenda whatever or anything being fixed beforehand? In view of that, and the fact that the national executive as a whole would take part in the negotiations, have we not reached the stage in this disastrous strike when the Government should put pressure on the National Coal Board to get negotiations under way?

I welcome the fact that Mr. Scargill has apparently said that he is willing to negotiate. However, I note that he has said nothing at all about being willing to negotiate on the question of uneconomic pits. Without willingness to talk about that, there is no hope of progress.

We are suffering from a self-inflicted political strike brought about by Mr. Scargill and his storm-troopers. Will the order from France before the strike began for over 600,000 tonnes of Welsh coal now be lost, or could we recapture the market and keep the economy going in south Wales?

Markets will certainly be damaged, but we must all hope that the NCB will be able to regain those markets. With a quick return to work I hope that — depending, of course, on exchange rates and our competitiveness—we will regain a good share of world markets. However, our chance of that grows fainter with every day of the dispute.

The Welsh miners know that since 1979 unemployment in Wales has increased by 125 per cent. and that it is set to increase further. Is it not true that pit closures in mining valleys have major social consequences? What are the Government doing to speed up negotiations that could lead to the end of this damaging dispute?

I understand the concern of the miners. Pits have been closing in large numbers for many years, under Governments of both parties. Indeed, fewer pits have been closed in south Wales under the present Government than under our predecessors.

The essential facts are that Mr. Scargill decided to take his men out on strike without a ballot, and through seven rounds of negotiations he has refused to move. Without some willingness on Mr. Scargill's part to consider the realities of the coal industry, it is difficult to see how we can reach a settlement. However, I hope that the clear desire for negotiations by many people, which is evident this week, reinforced by the fact that the miners themselves are voting by going back to work, will take us to the point where there can be a settlement.

asked the Secretary of State for Wales if he will make a statement concerning the increase in the use of heroin and other drugs in Wales.

We are deeply concerned about the apparent increase in the misuse of drugs in certain parts of Wales, and that is why we have taken active measures, as part of the Government's campaign to combat the misuse of drugs throughout the United Kingdom. These include steps to ensure that local service providers are doing what is needed to develop coherent patterns of services, the offer of special funds to develop facilities to combat drug misuse and treat and rehabilitate those who misuse drugs, and the development of health education materials to help parents, professionals and young people.

The north Wales health authorities know of 1,000 cases, half of which involve heroin. It is argued that that represents only one tenth of the problem. Is the Minister aware that, of the distraught Clwyd parents I have interviewed, two have told me of the hell of seeing their two sons become heroin addicts? Is there not disquiet in Clwyd health authority, which wants to become a vanguard area, at the lack of additional funds specifically earmarked to cope with drug addition? What is the Department doing to inform the school population in Wales of the terrifying dangers of taking heroin?

The hon. Gentleman is right in saying that there were about 1,000 drug-related offences in 1984, half of which related to heroin. That figure of 1,000 is considerably greater than the total increase between 1971 and 1981. We are fully aware of the misery caused by drug addiction. We are taking steps with regard to health education. There are at least three sources of finance—the psychiatric reserve of the National Health Service, joint finance and the urban programme.

Which district health authorities have applied for special funding? Does my hon. Friend expect to be able to meet those applications in full? Can he assure the House that the money to be made available will be new money? As most of it is to be taken out of the Welsh Office psychiatric reserve, will he assure us that the reserve will be proportionately increased so that other NHS psychiatric developments do not suffer?

We have received bids from South Glamorgan, West Glamorgan, Mid Glamorgan, Gwent and Gwynedd health authorities and we are awaiting a final formal bid from Clwyd district health authority. I remind my hon. Friend that we have increased the money available to the NHS by 12 per cent. We are now examining the bids. We hope to announce our allocations to the various bids in due course.

Is the Minister aware of the anxiety of people in Gwynedd, especially in the port of Holyhead, about this matter? Will he confirm that community physicians who feel strongly on this or any other issue will be free to speak their minds, whatever the policy of the health authority that employs them? Will he also confirm and assure the House that if the British Medical Association makes complaints and approaches to the Department on the right of community physicians not to be gagged, the Minister will investigate those cases?

I am aware of the concern, especially in the Holyhead area. We have received the advice of the advisory committee on the misuse of drugs, which has provided material to assist doctors in treating and rehabilitating drug addicts. Doctors in Wales are in receipt of that advice through the Welsh Office.

asked the Secretary of State for Wales how much was spent per pupil in secondary schools in Wales in the most recent year for which figures are available; and how much this compares with the figure for 1978–79, at constant figures.

In 1983–84 cost terms, the provisional figure for 1983–84 is £1,006, compared with a figure of £902 for 1978–79.

Does my hon. Friend agree that there has been a satisfactory increase in expenditure per pupil in Welsh secondary schools, at constant prices? Has that been reflected in an improvement in standards?

I agree that the figures reflect the level trend being maintained in expenditure on education. In constant cost terms, local authority revenue spending on education in Wales, excluding school meals and milk, was virtually the same in 1983–84 as in 1976–77, despite the significant decline in pupil numbers. As to the second part of my hon. Friend's question, the Government are concerned to maintain and improve the quality of education to meet the needs of the future.

But what real progress is there if the Government are not taking advantage of the temporary drop in numbers? Currently, text books are at a premium, repairs and maintenance are crying out for attention and extra-curricular activities are being cut. Will the Minister confirm that the overall education budget for local education authorities from 1979–80 to 1983–84 has been cut in real terms by 2 per cent?

I most certainly do not accept the hon. Gentleman's last point. While resources have held level, the number of pupils has declined markedly—by more than 10 per cent. between 1978 and 1984. That is not consistent with the allegation of heavy cuts.

asked the Secretary of State for Wales what representations he has received from local authorities and others in Wales over the past month relating to the rate support grant and capital expenditure guidelines for local authorities in Wales for 1985–86.

Three local authorities and one hon. Member have made explicit representations concerning the adequacy of expenditure targets and capital resources since I announced details of the 1985–86 rate support grant settlement on 12 December.

Is the Secretary of State aware that the county of Gwynedd, which has the highest unemployment record of the eight counties in Wales, has suffered a further cut in regional support, as outlined in the Government's recent announcement? Is he further aware that that county, with less finance than is recognised by the Minister's own formula as being needed, cannot undertake not only the luxurious services that have faced the axe in the past but the statutory services that are required by this House?

Will the right hon. Gentleman give an undertaking that any authority unable to meet its statutory requirements because of the settlement can discuss this matter with him?

I do not agree that Gwynedd will have a problem in meeting its statutory responsibilities. As I told the hon. Gentleman during our debate last week, Gwynedd's share of current resources has increased. I note that its capital allocation for 1985–86 is about £11 million — one third higher than the allocation for the present financial year.

Gwynedd's share of the total capital resources allocated to the counties will, as a consequence, be increased. Therefore, both for current and capital expenditure, Gwynedd is doing rather well.

asked the Secretary of State for Wales what representions he has received regarding pupil to teacher ratios in Welsh schools.

The Department has received about 100 letters during the last six months which contain references to the pupil-teacher ratio.

Is my hon. Friend aware that the very satisfactory improvement in the pupil-teacher ratio during the years of Conservative Government none the less conceals disparities such as over-large classes, especially in primary schools? Will he issue guidance to education authorities to seek more flexible arrangements with the teachers' unions to ensure that teachers are available where they are most needed — in the over-sized classes of primary schools?

The overall teacher-pupil ratio has improved steadily during the past few years and is at its best ever level. However, I take my hon. Friend's point that, although that is a useful yardstick, we should not attach too much importance to it, because it is an average figure. Of course, there will be anomalies and difficulties. Local education authorities have my sympathy, but it is for them to manage their resources as best they can and to get the best provision possible within the resources available.

Two of the Minister's hon. Friends have used the word "satisfactory" when referring to education in Wales. Will he send them a copy of the recent inspector's report and say when and in what form he intends to respond to that report?

I am aware of that report. It backs the contention of my hon. Friend. Such reports are meant to examine the position carefully. That does not mean that everything is perfect. Satisfactory and perfect are a long way from each other.

asked the Secretary of State for Wales how many jobs have been created in each of the enterprise zones, in Wales from their inception to the present date; and if he will make a statement.

The latest quarterly progress reports from Swansea city and Delyn borough councils indicate that some 1,430 jobs have been provided in the Swansea enterprise zone since its designation, and some 260 in the Delyn zone. The first monitoring report on the Milford Haven enterprise zone is currently in preparation. Overall, excellent progress has been made.

At what cost?

As my hon. Friend says, at what cost are the jobs being provided in the enterprise zones in various parts of Wales? Has the Minister considered the problem of businesses, providing jobs in towns adjacent to enterprise zones because they are collapsing? An example is a boot and shoe retail outlet in Pontcirdawe. How does what is happening square with the Welsh people's expectations of enterprise zones?

It is wrong to draw comparisons between regional financial assistance and expenditure on enterprise zones which are experiments in removing burdens and barriers from businesses in addition to the ordinary industrial development activities such as site reclamation and preparation. Much has been done in the Swansea zone.

Regional assistance is available within enterprise zones, but it is not practicable to identify comparable expenditure in the two areas. The hon. Gentleman, as well as my right hon. Friend and I, are proud of the excellent work carried out by the Enterprise Trust in Neath.

Does my hon. Friend agree that the number of new jobs created in the Delyn enterprise zone is particularly remarkable, since until recently only one and a half acres of the 190-acre site have been available for development? Does he also agree that now that the clearance of derelict land and the creation of vital infrastructure is near completion the zone is poised to take off in a significant way?

I agree. The zone is comparatively new. The initial information augurs well and I trust that Delyn will benefit greatly and flourish.

I believe that the Swansea enterprise zone has, on balance, benefited employment in the lower Swansea valley. May we have an assurance that the figures which the hon. Gentleman has given are in no way padded and that they take into account relocations and jobs which have been destroyed on the periphery of the enterprise zones?

It is difficult to evaluate the figures. I take on board what the hon. Gentleman says and welcome his positive approach. I have no doubt that there has been a tremendous spin-off from the benefits of the enterprise zone. I am certainly not padding any figures.

asked the Secretary of State for Wales whether he will list those social and economic features of Wales his Department takes steps to stress to potential overseas investors.

Overseas investors choose locations where they think their business will thrive. The perception of Wales as an area of developing technology is, therefore, highly relevant. Wales offers them a skilled and adaptable work force, good industrial relations, good communications, attractive sites and premises, strong industrial back-up, good educational facilities and attractive living conditions. Financial inducements are an important but by no means major element in the complete package on offer.

Does my right hon. Friend agree that, while stressing that our fine golfing facilities are a plus with the Japanese, the Cardiff area enjoys all the facilities that he mentioned to a degree unparalleled in the rest of the country?

Cardiff and large parts of industrial Wales are extremely well placed to compete. Indeed, I tell my Japanese friends that it takes longer to get to their golf courses from the centre of Tokyo than it takes to get from London to the centre of Cardiff.

In view of the importance of communications, to which the Secretary of State referred, what assurances can he give to industrialists and others that the experience on the A55 between Llanfairfechan and Penmaenmawr, which was closed for large parts of last week by a landslide, will not be repeated? Will he assure us that the Welsh Office will investigate the rumours circulating in the area that the landslides were started by drilling initiated by the Welsh Office?

Order. That is somewhat wide of the question.

I agree that communications are extremely important. We cannot give absolute assurances that landslips or nature will not intervene to interrupt transport links temporarily. The hon. Gentleman will know that we are spending enormous sums at present on improving that road.

As an economic feature, does the right hon. Gentleman stress skill training? Will he tell us of his efforts to prevent the closure of the Llanelli and west Gwent skillcentres? Is he prepared to accept that if he does not prevent those closures it will be a humiliating defeat for him?

Skill training is of first importance for attracting new industry, and the Government have done more than any previous Government to develop it. The proposals to which the hon. Gentleman referred come from the management of the Manpower Services Commission to the commission, and the commission has not yet taken a final view on them or given that view to Ministers. When that happens, I shall consider what further action is required.

asked the Secretary of State for Wales what representations he has received regarding the future of Cardiff-Wales airport.

The Department received representations from the Cardiff-Wales airport joint committee about its proposals to extend the runway. I am sure that my hon. Friend will welcome the Government's favourable response to those proposals.

I am grateful to my hon. Friend for that reply. An increase of 11 per cent. in passengers at Cardiff airport in 1983–84 is welcome. Does he agree that we must do everything that we can to help the airport authority to ensure a greater use of the airport in future, especially during the tourist season?

I, too, greatly welcome the announcement by my hon. Friend the Under-Secretary of State for Transport of a capital expenditure allocation to enable the runway at Cardiff-Wales airport to be extended in 1985–86. That is a clear demonstration of the Government's commitment to the development of the airport, which is a substantial asset to south Wales, and it demonstrates the point of my right hon. Friend the Secretary of State that it will be even easier to get to a good game of golf in Wales in the future.

Does the Minister appreciate that the Opposition welcome the increasing success of Cardiff-Wales airport and hope that its most recent application will be considered favourably? How does he reconcile his attitude with the proposal to spend more than £1 billion at Stansted airport? Could not that money be used, not only to develop Cardiff-Wales and other regional airports, but to create general development work and thus employ more people?

There appears to be a misunderstanding on the hon. Gentleman's part. The money has been allocated. The runway extension should be operational by the summer of 1986. It will allow direct transatlantic flights between Cardiff and the eastern United States and Canada. I am sure that it will boost the number of tourists coming to Wales and make Wales an even more attractive location for inward investment.

I beg to move, That the Bill be now read a Second time.

I have it in command from Her Majesty The Queen to acquaint the House that Her Majesty, having been informed of the purpose of the Hong Kong Bill, has consented to place Her Prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

The Bill that is before us today is short but of historic importance. The House had a full opportunity to discuss the Sino-British agreement on the future of Hong Kong on 5 December. I was heartened then by the warmth and unanimity of the support with which Members approved the Government's intention to sign it. I am confident that it provides satisfactorily for the continued stability and prosperity of Hong Kong into the 21st century. As the House knows, the agreement was signed by my right hon. Friend the Prime Minister and her Chinese counterpart, Premier Zhao Ziyang, in Peking on 19 December.

It was clear from the debate in December that the House saw the agreement as a good one, and one that met the needs of the people of Hong Kong. A number of right hon. and hon. Members raised the concerns expressed in Hong Kong about certain aspects of the agreement. Those concerns have also been fully documented in the report of the Assessment Office.

We have had a full discussion of these matters. For the most part, they do not directly concern the Bill. It is not, therefore, necessary to go over this ground again in today's debate, but I assure the House that the Government have the concerns raised in this House and in Hong Kong firmly in view. We shall continue to bear them in mind in our future discussions with the Chinese, particularly in the Joint Liaison Group.

A number of hon. Members suggested during the debate that the Government should make an annual report on Hong Kong to the House and that there should be a debate on it. I entirely accept that the House will wish to be informed about developments in Hong Kong fully and speedily when they occur. I assure hon. Members that the Government will take care to report to the House whenever there is anything significant to report. There is certainly no reluctance on our part in that respect, but I frankly doubt the value of institutionalising an annual report and debate. My fear is that that could well have the unintended effect that important developments were not properly debated as and when they occurred. This is not what any hon. Member wants.

Does that mean that the right hon. and learned Gentleman does not want an debate annually and wishes the matter to be left to the discretion of the Government?

I am saying that the Government are well aware of the need to keep the House informed of changes and developments in Hong Kong and do not wish to avoid debates on those matters as and when appropriate. However, if we provide expressly for an annual report and annual debate, that will tend to act as a concentrator and a means of diminishing the prospect of a sensible report and debate when that is important. I am wary of the institutionalisation of anything of that sort. Such reports tend to be a repetition of previous reports in form, for example. Although designed with the best intentions, they often have the opposite effect of that intended.

I am somewhat perplexed by what the Foreign Secretary has just said. We have annual reports on the Army, the Navy and the Air Force, which are debated in the House and which produce useful debates. Those debates do not prevent the House from raising any matter concerning the Army, the Navy or the Air Force in between times if that seems appropriate. Regular reports are made to the House by the European Community on various matters, which again does not prevent us from debating other matters when that seems appropriate. The right hon. and learned Gentleman has given an opaque reason for opposing a recommendation which has been supported widely in the House and in another place.

That may be the right hon. Gentleman's opinion, and there is room for differences of judgment. The right hon. Gentleman's judgment is not mine. My instinctive reaction to the annualisation of reports is to regard that practice as often diminishing the importance and value of the reports. However, the matter can be considered hereafter, and I have no doubt that it will be considered on many occasions. We shall report to the House on these matters, as we recognise the need for the House to have opportunities to debate them. However, despite the overwhelming quality of the right hon. Gentleman's rhetoric, and the breadth of support for the proposition in earlier debates, I am not persuaded that it would be right to institutionalise an annual report in the way that is proposed.

Since the debate in which those matters were raised, my right hon. Friend the Prime Minister and I have visited Peking for the signature of the agreement and we were able to raise with Chinese leaders a number of the questions that were touched on in that debate. The House will not expect me to go into details of our discussions, but Chinese leaders at the highest level gave us solemn assurances of China's commitment to full implementation of the agreement and of their intention to consult Hong Kong opinion on the drafting of the basic law on a wide basis.

Following that signature, we and the Chinese Government both have to satisfy our respective constituional requirements in order to ratify the agreement. The main purpose of the Bill before us today is to enable Her Majesty's Government to ratify the agreement.

The Bill itself provides for the termination of British sovereignty and jurisdiction over Hong Kong as from 1 July 1997. I shall briefly describe its main features. The central provision of the Bill is clause 1. It provides for the termination of British sovereignty over ceded parts of Hong Kong and the termination of British jurisdiction over the whole territory with effect from 1 July 1997. That clause will enter into force on the exchange of instruments of ratification. The clause will enable the Government to meet their obligation under paragraph two of the joint declaration, in which the Government of the United Kingdom declare that they will restore Hong Kong to the People's Republic of China with effect from 1 July 1997.

In recent years it has become the invariable practise when the United Kingdom divests itself of sovereignty over territory to do so upon the authority of an Act of Parliament. The situation of Hong Kong is of course sui generis. In this case we are entering into an agreement with another power to terminate sovereignty as from a certain specified date. Nevertheless, the need for parliamentary authority for the termination of sovereignty remains the same: it is essential that this authority should exist before the Government ratify the agreement and thus create an international obligation.

The schedule to the Bill deals with three aspects related to the agreement and the termination of sovereignty. They are, first, the changes in British nationality laws necessary as a consequence of the agreement and the associated exchange of memoranda with the Chinese Government; secondly, amendments to British laws in preparation for or consequent upon the termination of United Kingdom sovereignty and jurisdiction; and, finally, the provision of diplomatiic privileges and immunities to the five Chinese members of the Joint Liaison Group.

I deal now with nationality, and in this context I shall mention the reasoned amendment tabled by the right hon. Member for South Down (Mr. Powell), and my hon. Friend the Member for Orpington (Mr. Stanbrook) and I made it plain in the House on 5 December that the legislation that we proposed to introduce would provide powers to make the amendments to nationality legislation that are necessary as a result of the agreement and the United Kingdom memorandum.

Those provisions are contained in paragraph 2 of the schedule, which enables a subsequent Order or Orders in Council to be made to ensure that British dependent territories citizenship cannot be ratained or acquired on or after 1 July 1997 by virtue of a connection with Hong Kong and to create a new form of British nationality that may be acquired by persons who are BDTCs by virtue of such a connection with Hong Kong.

Following consultations with the Hong Kong Executive Council, it is intended that the title of the new form of nationality should be "British National (Overseas)". It has not been easy to devise a title which meets all the necessary requirements. On the one hand, it needs to make clear that we are dealing with a form of British nationality. Nothing less than that would be acceptable in Hong Kong. On the other hand, it is essential that the title we choose can continue to be used after 1997. For this to be possible, the title must clearly carry no implication of a continuing constitutional relationship between Britain and Hong Kong after 1997.

I believe that the title we have chosen meets those needs. It has necessarily been the subject of careful consultations with the Executive Council. The completion of these consultations has enabled me to announce the title to the House today. There should now be adequate time to explain the choice of the new title—

Will my right hon. and learned Friend repeat the title once again?

Certainly. It is "British National (Overseas)". The fact that my hon. Friend has intervened to ask for that repetition underlines the point that I was making, that there needs to be adequate time to explain the choice of the new title to the people of Hong Kong.

I am grateful to the right hon. and learned Gentleman for giving way to me once more. He said that the title had been agreed after consultation with the Executive Council. Having talked to some of the members of the council, I understand that that title was about the seventh on the list of possible titles. I am not sure that it is true that the absence of any reference to Hong Kong in the title is acceptable.

The hon. Gentleman is right to say that the suggestion that the title should include a reference to Hong Kong is one of the factors that has been canvassed, for understandable reasons, but, for the reason that I have given, in our judgment, which was acceptable to the Executive Council after discussions, it would not be acceptable for the title to carry the implication of a continuing constitutional relationship between this country and Hong Kong. I readily accept that it has not been a matter of swift and easy deliberation to come to a conclusion about that, but that was one of the factors that we had in mind.

Will my right hon. and learned Friend clarify, under paragraph 2(1)(b) of the schedule, the use of the word "may", because I understand that there is considerable concern in Hong Kong over the use of the "may" rather than "shall". My right hon. and learned Friend has just said what the new form of citizenship will be called. Can he tell us something about the citizenship and the documentation that will result from such a title?

I hesitate to answer any point, unprompted. about the precise drafting of a subparagraph of a paragraph of a schedule. I shall decline my hon. Friend's invitation, but will note his point and see that an explanation is advanced in due course.

rose—

I hope that my hon. Friend has a less subtle point to raise.

I am certain not certain that my point is that subtle. My right hon. and learned Friend has just mentioned the constitutional purpose of the title of British National (Overseas). I am particularly interested to know—I am sure that the House is, too—what rights such people in Hong Kong will have after 1997. Will they be able to come to this country to settle permanently?

We have now reached that point in interventions when I may conclude, at least for a time, that the intervention is likely to be dealt with in the rest of my speech. I shall therefore proceed to the next section to meet my hon. Friend's point.

If an amendment to the title introduced — I can understand why it might be argued that it is desirable—there should be an opportunity to do that, after the further explanation that I described, in another place. I said on 5 December that the schedule included a specific provision that the orders may include any measures that are necessary—this is a separate point—to ensure that no British national or any child born after 1 July 1997 to a British national is made stateless as a result of the arrangements.

Did the right hon. and learned Gentleman say that if an amendment was desired to be debated that could happen in another place? Is he implying that there would be no opportunity for that during the Committee stage of the Bill?

Clearly, there would be an opportunity in Committee in this House, as in the other place, for that point to be debated. However, I was saying that, in my judgment, if the title is to be further explained and appreciated in Hong Kong before it is incorporated in the Bill—if it is incorporated—it might be more suitable for more time to elapse, which is why I identified the other place. I am sure that nothing that I can say will have the effect of inhibiting the right hon. Member for South Down (Mr. Powell) from debating the matter in the House. I have indicated, however, the likely response.

It is the Government's intention that all the necessary amendments to nationality legislation should, if possible, be made by one Order in Council, although the Bill would allow for adjustment or addition by further Orders in Council, if that became necessary. I should emphasise that these powers to alter the nationality laws by way of Order in Council could be used only in connection with the purpose which I have described. They would not permit alterations to be made for any other purpose or in respect of any other group of people not connected with Hong Kong. We intend to make the order at an early date and, at the latest, within a year of the passage of the Bill. The Bill provides that such orders will be subject to the affirmative resolution procedure. I emphasise that Members of both Houses would have a full opportunity to consider and debate the proposals in this Order in Council.

I do not agree —I anticipate the point likely to be made by the Opposition—with the right hon. Member for South Down that this procedure would provide inadequate opportunity for consideration of the measures proposed. It was precisely because we knew that the House would want to give detailed consideration to the orders that we proposed to make them subject to the affirmative procedure. Obviously, the Government will take careful account of the points which enjoy widespread support among hon. Members, and which may arise during today's debate.

I apologise for interrupting the right hon. and learned Gentleman again, but this point may prove to be the nub of any disagreement on the major procedure that the Government recommend. Having laid an order for discussion in both Houses, will it be possible for the Government to take account of strong objections to some element in the order and, without seeking affirmation by both Houses, to revise the order and bring it back for later voting? We are concerned most about the fact that it would be possible, under the procedure envisaged by the Government, to put forward an order to which there turned out to be strong and valid objections in Hong Kong, this House and another place, and yet the Government would not be free, even if they wished, to vary the terms of the order before a vote was taken.

I understand the point that prompted the right hon. Gentleman to intervene. He will appreciate that it is not customary for an order that is being debated under the affirmative procedure to be subject to amendment. Indeed, that cannot be done in the debate taking place at that time. The design of a procedure that would meet the right hon. Gentleman's point takes one into relatively unknown territory. I should need to discuss that point further before giving a firm answer. I am anxious for hon. Members to take the opportunity afforded by today's debate and the debate in Committee in both Houses to register the points about which they are concerned.

My right hon. Friend the Minister of Agriculture, Fisheries and Food met that point by bringing forward a drat order to deal with the agricultural provisions and at a later date brought forward a substantive order so that hon. Members could go into the order in detail. Voting took place later on the substantive order.

I do not have in mind every aspect of the activities of my right hon. Friend the Minister of Agriculture, Fisheries and Food. I am grateful to my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) for drawing my attention to that example. If pressed, I could think of other examples. At the moment, there is no undertaking in that respect.

Will the right hon. and learned Gentleman give way?

I hope that the right hon. and learned Gentleman will allow me to get on with my speech.

Does the right hon. and learned Gentleman agree that there would be no need to consider or design a new procedure if the Government said that they would introduce their draft order on a tentative basis and did not seek to roll measures through the House, regardless of opinion? The Government should make sure that there is ample opportunity for views from Hong Kong to be expressed. The Government would suffer no loss of face, if strong representations were made to the House, by withdrawing the measures temporarily and reconsidering the matter during debate.

The right hon. and learned Member makes the point with his customary eloquence. I shall not now give any undertaking on the matter, but I hear what is being said about it.

Perhaps I may be allowed to proceed with the substance of my speech, leaving some questions to be answered by my hon. Friend at the end of the debate, rather than try to answer them now.

The Bill does not in itself include the full and final provisions on this subject and I can give some reasons why that is so. The agreement set a time limit for ratification, which must take place before 30 June this year. By that time the Bill must have passed through both Houses and received the Royal Assent. That is why the Bill was introduced so soon after the signature of the agreement.

Although the United Kingdom memorandum lays clown the main lines of what is necessary, there is still —as our discussion so far has demonstrated—detailed work to be done in framing legislation to give effect to it. Those are matters that require careful thought and consultation, not least in Hong Kong. There must be adequate time for that consultation to take place.

This is a subject in which there is, understandably, interest in Hong Kong. It is most important that the legislation is acceptable there. Work on this is in hand. and discussions are taking place with the Executive Council in Hong Kong. However, it would not necessarily be wise, and in fact it is not necessary, to attempt to carry through detailed provisions in the time scale which the date of ratification imposes on legislation. Even so, the measures concerned arise directly out of the agreement and the memorandum. It is, therefore, appropriate that all such matters should be dealt with in the Bill.

I can give some examples — no doubt other hon. Members will give others—of the details that are likely to be included in the order. It will, of course, make provision for the removal of Hong Kong from the list of dependent territories in schedule 6 to the British Nationality Act 1981 with effect from 1 July 1997, and for the acquisition of the new form of nationality. For technical reasons it is not possible to rely on the words

"by virtue of a connection with Hong Kong".

The order will therefore detail who is eligible to acquire the new form of nationality.

It is the Government's intention that the new form of British nationality should carry broadly the same benefits as British dependent territories citizenship, except that it will not be transmissible by descent. Holders of the new status will be able to use British passports. They will be eligible for British consular protection in third countries. They will have a right to registration as British citizens on the same terms as BDTCs. In short, the order will in effect redefine the scope of the British Nationality Act 1981 to cover the new status where appropriate.

In addition, the order will also set out the circumstances in which persons who might become stateless as a result of these provisions, and the children born after 1 July 1997 to holders of the new status, if they would otherwise be stateless, may acquire a form of British nationality, which will be British overseas citizenship.

Even though the proposals cannot yet be final, we thought it right that the Bill should contain a clear indication of the Government's intentions with regard to nationality and set out a framework for the subsequent subordinate legislation that will be necessary. Parliament quite rightly expects to have the opportunity of considering what the general nature of such legislation would be. Moreover, to adopt any other course would perpetuate uncertainty in Hong Kong—

Will the right hon. and learned Gentleman give way?

I shall give way in a minute. It could also lead to doubts about the Government's willingness to implement the provisions of the United Kingdom memorandum. I am sure hon. Members would agree that that would be most unsatisfactory.

Will the right hon. and learned Gentleman confirm that the assurances that he has just given would cover non-Chinese Hong Kongers who live abroad—in south-east Asia somewhere—who would be in a ghastly limbo of lostness if they were not covered by what I understand are the assurances that he has just given?

The hon. Gentleman must forgive me if I do not respond instantly, as almost every word in his sentence might have some special meaning which must be considered. I shall see that his question is considered. If possible, my hon. Friend the Minister will deal with it in his winding-up speech.

I understand the circumstances with regard to stateless people — they show a caring Government — but I am still worried about whether British Nationals (Overseas) are to have priority over any other people from abroad if they want to settle in the United Kingdom permanently.

No. There is no intention to effect or imply any such change. We intend to give substantially the same rights and limitations as are attached to British dependent territory citizens under existing law, with the principal change of withdrawing the right of transmissibility for one generation. There is no change along the lines that my hon. Friend suggests.

For the reasons that I have outlined, I invite the House to reject the reasoned amendment in the names of the right hon. Member for South Down and my hon. Friend the Member for Orpington.

Paragraph 3 of the schedule gives the necessary powers to make changes in British law in consequence of or in connection with the ending of sovereignty. It enables Orders in Council to be made to repeal or amend United Kingdom legislation in so far as it is part of the law of Hong Kong, to enable the legislature of Hong Kong to repeal or amend United Kingdom legislation in so far as it is part of the law of Hong Kong and to legislate with extra-territorial effect, and to repeal or amend British legislation which relates to Hong Kong. These are normal provisions when this country ceases to have sovereignty over a territory. They are written into independence Acts, and, although this Bill is of course different from an independence Bill, a similar provision is necessary in the case of Hong Kong. It would be inappropriate to continue after 1997 to have references in the laws implying the continuation of a constitutional relationship with this country.

Paragraph 3 will also allow Hong Kong, in the years up to 1997, to adopt local laws to replace those United Kingdom enactments which currently form part of the law of Hong Kong in, for example, on civil aviation and shipping. It is primarily in those areas that legislation will be necessary with extraterritorial effect, for instance in connection with air piracy and regulations for shipping. This is a very important provision, since it is clearly essential that by 1997 Hong Kong's law can be self-contained, as that law will form the general corpus of law of the special administrative region under the agreement.

Finally, paragraph 4 of the schedule accords diplomatic privileges and immunities to the five Chinese members of the Joint Liaison Group who will attend those meetings of the group which take place in London. We need to do this to fulfil our obligation under annex II to the joint declaration, which provides for the creation of a Joint Liaison Group of five British and five Chinese members to meet in London, Peking and Hong Kong. The annex provides that members of the Joint Liaison Group will enjoy diplomatic privileges and immunities as appropriate when the group meets in the three locations. Existing legislation would not cover this rather unusual category of representative, and it is therefore necessary to legislate specifically. Hong Kong will need to legislate separately to provide privileges and immunities in Hong Kong for the Chinese members of the group until 1997. Appropriate measures will have to be taken for the British members of the group thereafter. It will be for the Chinese to provide similar privileges and immunities to the British members when the group meets in Peking.

Before concluding, I should like to say something about the future. The signature of the agreement and, I hope, the passage of the Bill, leading to ratification of the agreement, represent the beginning of a process, not the end. There is much to be done between now and 1997. It will require the closest co-operation between ourselves and the Chinese Government. It will also require the closest consultation throughout with the people of Hong Kong.

The process of consultation, which has worked so well throughout the negotiation of the agreement, will be further assisted by the progressive strengthening of representative government in Hong Kong over the next 10 years. As the House knows, the first elections to the Legislative Council will take place in September this year, and there will be a further public review of the electoral process and constitutional structure in two years' time.

The most immediate task will be the establishment of the Joint Liaison Group, provided for in the agreement. We are now actively working on this. The Governor of Hong Kong is in London this week, and my discussions with him will include this important subject. Thereafter, we shall also need to discuss practicalities further with the Chinese Government. I shall inform the House in due course of progress on this issue.

We have negotiated a satisfactory agreement for the future of Hong Kong. We have had ample demonstration that it is acceptable to this House and to the people who live there. We now need to move rapidly to ratify and implement the agreement so that the renewed confidence that has been established in the territory with the publication of the agreement and its signature can be secured and strengthened.

As I have explained to the House, paragraph 8 of the joint declaration provides that instruments of ratification shall be exchanged before 30 June 1985. It is very much in the interests of the United Kingdom and of Hong Kong that we should make as rapid progress as possible with this Bill to enable us to meet that date.

The Bill is short and straightforward. I strongly commend it to the House.

rose—

Order. I should announce that I have not selected the amendment in the name of the right hon. Member for South Down (Mr. Powell).

First, I thank the Foreign Secretary for lifting the veil on some of the matters which were left obscure in the Bill, but I regret that he did not lift the veil on rather more.

This is the last chance that the House will have to discuss the general framework of the agreement and to question the Government on some of the issues on which they were either unable or unwilling to give their views before Christmas. The Bill gives us no opportunity to discuss those issues in Committee, although it establishes a procedure for deciding other vital issues, especially nationality, on which I shall have some questions to put soon.

I should like first to raise some issues that arise with new urgency after the Prime Minister's most recent visit to Peking and Hong Kong, just before Christmas. The House has become so accustomed to U-turns and somersaults from the Prime Minister recently that it is easy to believe that she was infected by Mao Tse Tung's doctrine of permanent revolution. Indeed, she might well go down in history as the incredible revolving Maggie. There is stark contrast between her first and second visits to the far east, which were just over two years apart. The first was a disaster from every conceivable point of view. The right hon. Lady offended the Chinese Government so deeply that the possibility of any agreement over Hong Kong seemed capable of disappearing. Just the other day, the Daily Telegraph quoted Mr. Deng Xiaoping, the main Chinese leader, as muttering to an aide:

"I can't talk to that woman, she is utterly unreasonable."

The Prime Minister has at least one great achievement to her credit — she elicited a similar response from Senator Reagan on her visit to Washington before Christmas. He said:

"She talked and she talked—and in the end I gave up interrupting."

That is the Maggie we all know and love, especially Conservative Members on the Front Bench.

The real damage on the Prime Minister's first visit was done by her subsequent press conference in Hong Kong. Mr. David Bonavia, the staid but much respected correspondent of The Times in the far east, said:

"Mrs. Thatcher left the next day, somewhat like one of those typhoons which run in from the Western Pacific, leaving a trail of destruction behind them. Seldom in British Colonial history was so much damage done to the interests of so many people in such a short space of time by a single person."

The Hong Kong stock exchange collapsed and did not recover to the level at which it stood before the right hon. Lady's visit until just two weeks ago. That recovery was due to the fact that the Foreign Office has shown so much patience and skill in undoing the damage done at that time. I must say, from the Opposition Front Bench, what nobility I perceive in the patient merit of those public servants. We — and none more than the Foreign Secretary and her whom he serves—owe a great deal to all of them.

The arrangement reached general agreement both in the British Parliament and in Hong Kong as the best that could be achieved in the circumstances, and far better than anyone believed possible in the immediate aftermath of the typhoon. It is sometimes sad to reflect how much of the time of the Foreign Office during the past six years has been spent in clearing messes made by the Prime Minister. Its diplomatic triumphs, from Rhodesia to Hong Kong, have not so much increased Britain's influence in the world—that, like sterling, has never stood so low—as effected the smoothest possible disengagement from the past responsibilities of the empire. There are still some quite important tasks awaiting the Foreign Office, not least in the Falklands, where experience with Hong Kong could prove of vital importance and set interesting precedents.

The skill of our diplomatists, combined with the underlying good will of the Beijing Government. has transformed the atmosphere and offered the people of Hong Kong a far more promising future than most people expected when this act of the drama opened in the summer of 1982. But, once again, some clouds over that achievement have been cast by the Prime Minister. Just before Christmas she paid a second visit to Beijing and Hong Kong, when it was a different story. The right hon. Lady was the toast of Peking. We were told by the DailyTelegraph that she told the Chinese leaders that she fully understood China's unique concept of maintaining the territory as a capitalist enclave in a Marxist state. I wonder whether China still wishes to be regarded as a Marxist state, especially in the light of some recent articles in the Peking press about Marxism and its relevance to the modern world.

When the right hon. Lady flew to Hong Kong, it was a different story. She was as arrogantly insensitive to the views of the Hong Kong people in her second press conference there as she had been to the views of the People's Republic of China during her first visit there. In fact, she outdid even the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in the chilly disdain she showed for the 5·5 million people who live in that territory. Perhaps, again, Peking has done something in bringing the Prime Minister and the right hon. Member for Old Bexley and Sidcup— who in many ways she so closely resembles—together on at least one subject in current British political concerns.

When the right hon. Lady was asked during her last press conference in Peking whether it was unreasonable for the people of Hong Kong to want actual representation on the committee drafting the basic law for Hong Kong—which will embody the agreement that she had made with the Peking Government, and which means that Hong Kong becomes a special administrative region —according to the Far Eastern Economic Review, she snapped:

"That is not the point. The basic law is the law of China. You would expect China to draw up the basic law…Some in Hong Kong found such insensitivity to their feelings frustrating, but they have long realised that if they want to extract further concessions from the Chinese leadership about their future, they have to rely on themselves and not Britin."

I shall refer later to some of the problems that that issue raises.

The second extraordinary event during the press conference in Hong Kong was not referred to or clarified by the Foreign Secretary this afternoon. According to the Far Eastern Economic Review, the right hon. Lady

"caused consternation among Government officials when she said that Sir Edward Youde, the Governor of Hong Kong, would be member of the Sino-British Joint Liaison Group."

The officials know, as the House knows, that for the first three years of its existence the Joint Liaison Group is to meet alternatively in Hong Kong, Peking and London before it sets up its principal office in Hong Kong in July 1988. With such a schedule, it is unlikely that the Governor would be a member of the group because that would mean his spending two thirds of his time outside Hong Kong.

The question posed by the Far Eastern Economic Review —and I repeat it to the Foreign Secretary —is whether the Prime Minister had a temporary loss of memory during the press conference or deliberately ignored the advice of the Foreign Office. I hope that the Minister will be prepared to answer that question when he replies to the debate.

The right hon. Gentleman has probably done a service to the House by reminding us of the difficulties of coping with the machine-gun fire of questions during press conferences in Hong Kong. That being so, was not the Foreign Secretary wise not to try today to answer highly detailed points that might be more suitable for the Committee stage as such answers could easily be misunderstood and cause a great deal more harm than good if they were to be so misinterpreted?

I understand the hon. Gentleman's lack of confidence in the Prime Minister's ability to handle the press, and I fully share his view. The fact is that the right hon. Lady chose to address the press conference. The Foreign Secretary has held press conferences in Hong Kong during which no such unfortunate lapses occurred. The questions that I am asking the Minister to answer cannot be raised in Committee, because that will be tightly confined to the matters in the schedule. I am raising questions of wider importance, and they can be raised only on Second Reading. None of them will be unfamiliar to the Foreign Office, the Foreign Secretary or the Minister. If they have answers to the questions, there is not the slightest reason why they should not give them to us this afternoon.

I hope that the hon. Gentleman will agree that the question whether Sir Edward Youde is to be a member of the Joint Liaison Group is relevant and that there is not the slightest reason why it should not be answered by the Foreign Secretary today. Indeed, the right hon. and learned Gentleman was unwise not to answer it, in view of the consternation aroused in Hong Kong by the Prime Minister's press conference.

I hate to twist the bayonet in the wound, but I come now to the Joint Liaison Group. The Far Eastern Economic Review states:

"To complicate matters, Thatcher"—

I apologise for not giving the right hon. Lady her full title, but I am quoting—

"told reporters in Peking that the joint liaison group would be consulted on the pace of political reforms. There is concern in some quarters that this may mean interference by China."

I hope that the Minister will tell us precisely what is implied by that. I well understand that it will be the responsibility of the Joint Liaison Group to ensure that developments between now and 1997 do not disturb the arrangements laid down in the agreement that will be confirmed in the Bill. The Joint Liaison Group's role in overseeing the movement towards democracy or more representative government in Hong Kong is of deep concern to this House, the other place and the people of Hong Kong. We deserve some explanation about what the Prime Minister meant by that remark.

The most damaging comment on the Prime Minister's visit was the following:

"The prime minister's offhand dismissal of the issue of Britain's moral responsibility — one which Thatcher herself stressed repeatedly when she was in Hong Kong in 1982—flew in the face of generally acknowledged concern".

That compels me to make a comment on the implications of this rather unhappy story of prime ministerial intervention in the affairs of the territory. I hope that the Foreign Secretary will assure us that in future he will not allow the Prime Minister to go on barging about like Rhoda the rhino with her usual arrogant incompetence in issues which clearly she does not understand. I am sure that if the right hon. and learned Gentleman seeks such an undertaking, he will receive a lot of support in the Cabinet, not least from his successor as Chancellor of the Exchequer after the hair-raising irresponsibility of No. 10 on the exchange rate just over a week ago.

I have often expressed my qualified admiration for the Prime Minister. She has some qualities which are unique in her Government. There is no member of her Cabinet with whom I would rather go tiger shooting, but I should absolutely insist that, before we set out together, she was taught the difference between a tiger and an elephant—particularly the elephant that I was riding. In future, when the Foreign Secretary takes the Prime Minister abroad with him, he would be wise to take similar precautions, or he could find, as he did during his last visit, that the patient work of months — indeed, years — is undone by a careless remark by the Prime Minister.

The problem is that the Prime Minister still insists on indulging favourite aspects of her personality on issues that she does not understand and too often seems to see her responsibilities for the government of this country as a monstrous ego trip.

I want to put some specific questions to the Foreign Secretary which arise out of the various outbursts by the Prime Minister during her world tour. I pressed the right hon. and learned Gentleman in December for an annual report on developments in Hong Kong which the House would be able to debate if it wished. We do not want an automatic annual debate on Hong Kong. I was not particularly encouraged by what the right hon. and learned Gentleman said this afternoon, nor was I convinced that he was totally persuaded by his own argument. His argument was that if we had an annual report on a question, it could never be discussed at another time. That argument is not worthy of consideration. The House will be able to insist on debates on Hong Kong whenever it wishes, but it is important that they are well-informed debates.

In the difficult and critical period before 1997, when sovereignty is finally transferred, it would be useful to have an annual report to Parliament. The Foreign Secretary admitted that that view is held strongly by members of all parties in another place and here. I hope that he will reflect on what he said this afternoon and come to a different conclusion later.

I was persuaded by my own argument, and it was that that led me to make my offer to the House. My anxiety is practical. I do not wish to diminish or discourage discussions on Hong Kong. Perhaps my experience is unique, but one can become depressed by the wearisome familiarity of the structure of annual reports. They can fall into an annual rhythm, even when the scene is changing as rapidly as it is in Hong Kong. I am anxious not to condemn the reality of the subject to being encapsulated in a wearisome annual framework.

I, too, am an ex-Chancellor, but I never found the annual public expenditure reviews and Budgets to be as boring as the right hon. and learned Gentleman clearly found them at the time. Perhaps that was because of the content of the documents, not because they were annual. I hope that the right hon. and learned Gentleman will reconsider, particularly in the light of the many cases that contradict his conclusion.

I am puzzled as to what the right hon. Gentleman thinks. He said categorically that he was not very keen on annual reports, but he also said that he was.

We often have the same uncertainty about the Foreign Secretary. He is drawing down the curtain on an episode in history which began with the opium wars. There could have been no better Foreign Secretary to perform that function than the right hon. and learned Gentleman.

The question was not about me.

Yes, it was.

Will the right hon. Gentleman give way?

If I misunderstood, I shall give way.

I simply wanted to know whether the right hon. Gentleman was in favour of annual reports.

Which right hon. Gentleman?

The right hon. Member for Leeds, East (Mr. Healey).

It is such an unfamiliar experience for me to be accused of such ambiguity that I misunderstood. Of course I am in favour of annual reports, but I believe that the House should have the right not to debate them if it does not want to do so in a particular year. That is normal. Many annual reports from the European Commission, the United Nations, the World Bank and the International monetary fund are not debated each year. I see that the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston) is now convinced, if I understand correctly that the majestic inclination of his chin signals areement rather than fatigue.

Perhaps I may continue, after being so courteously interrupted, on a question about the basic law. That issue is solely for Beijing. As I said in December, if the people of Hong Kong wish to influence it, they must approach the authorities in Peking.

One of the Peking-sponsored monthlies in Hong Kong, called Wide Angle, suggested that ultimately a drafting committee of 40 or 50 would be established, of whom at least 10 would come from Hong Kong. I was surprised that the Prime Minister rejected the idea of Hong Kong participating in any way in the drafting of the basic law since that article appeared before the Prime Minister's visit to Peking.

This is a matter for Peking, but have the Government any information about how the authorities in Peking propose to consult the 5½ million people who will 'become citizens in 1997? It would be helpful if that were known as soon as possible.

We all agreed that the Joint Liaison Group was vital to ensure orderly progress, and the initial fears about it in Hong Kong have long since disappeared. I hope that the Minister will answer the specific question that I asked about the group's role in determining the pace of political change in Hong Kong—the Prime Minister referred to that in her press conference — and tell us who will represent the British Administration in Hong Kong on it. Will Sir Edward Youde be a member, as the Prime Minister asserted in Hong Kong? Will there be scope at any stage or in any area of its work—for example, in working groups—for representatives of the people of Hong Kong to be members? We asked those questions last time, and we are still waiting for answers.

Can the Foreign Secretary or the Minister tell us what steps the Government are taking to ensure that the rest of the world allows Hong Kong to continue its membership of international organisations, such as GATT and the multi-fibre arrangement, when Hong Kong leaves British sovereignty and becomes a special administrative region of the People's Republic of China? I understand that Peking agrees with Whitehall that Hong Kong should remain a member of those organisations, but we have yet to hear whether the other members of those organisations take the same view. We deserve to know what soundings the Government have taken and what assurances, if any, they have so far received. The Bill does nothing to enlighten us about those issues and, as drafted, does not allow us to raise them again in Committee. For that reason, I took this opportunity to raise them on Second Reading.

The Bill establishes a procedure to deal with problems of nationality, and I am glad to say that the Foreign Secretary gave us further information about that today. These matters are of direct human and personal concern to 3 million people in Hong Kong. Above all, there is the proposed conversion of BDTC status into a new form of British nationality. We support that objective as strongly as we reject the view of the right hon. Member for South Down (Mr. Powell) that no such provision should be made. In seeking to have the Bill rejected on the ground of the procedure involved, the right hon. Gentleman is being less than candid about his real objectives, although I appreciate that this may be his only opportunity to raise the matter.

Apart from the merits of the Bill, does the right hon. Gentleman agree that it is undesirable to alter an Act of Parliament by an Order in Council made under a different Act of Parliament? That is the point of the amendment. It prevents the House from amending the alteration to the original Act of Parliament.

That is precisely the point with which I am about to deal, and which I raised with the Foreign Secretary in an intervention during his speech.

Can the Government tell us whether there is any other case of a new category of citizenship being established for members of a colonial territory through an Order in Council? I know that it has happened in the case of one or two associated states, but I do not think that it has ever happened in the case of a colonial territory. In principle, it is undesirable that it should be done in this case. However, I understand why the Government chose this route. If the House is to accept the decision, certain important conditions must be met.

I greatly welcome the fact that the title given to the new form of citizenship will be British National (Overseas). I know that the people of Hong Kong will be glad that the "British" occurs first. This was a matter of interest when BDTC status was discussed in the British Nationality Act 1981. In the end the Government had to change their view. I am glad that the Government have accepted the change, because the word "British" at the beginning of the title will increase the influence of the new status on the readiness of other Governments to accept it.

It could take years to register up to 3 million people for this new form of citizenship. Their existing status must be confirmed, and formalities will have to be gone through. What is still puzzling is that presumably the registration of people with the new status will begin well before the transfer of sovereignty in 1997. Will individuals who register early for the new status keep their existing status until the transfer of sovereignty? Do I understand that that will not be affected by their decision to opt early for the new sovereignty? That is a question of great concern to the people of Hong Kong, and it is one to which the Government should not have the slightest difficulty in replying clearly today.

My next question relates to the point raised by the hon. Member for Orpington (Mr. Stanbrook). Many Opposition and Conservative Members are worried that, by adopting the affirmative procedure of Order in Council, it will be impossible for the Government to take note of widespread and legitimate objections in Hong Kong and in the House to elements in the new status such as were successfully taken note of when we discussed the British Nationality Act 1981 and when an important change affecting British dependent territory citizens was agreed.

Can the Foreign Secretary guarantee to leave enough time between the publication of an Order in Council and debate in Parliament to allow views to be formed on the Order in Council in Hong Kong and for them to be made known to hon. Members? The discussion would be a farce unless the House and the other place were able to take into account the considered views of the people of Hong Kong. If there is strong opposition to elements in the Order in Council expressed in the debate, will the Government make provision to take the Order in Council away without a vote, revise it and bring it back? In other words, will the Government be prepared either to publish an Order in Council initially as a draft order, as the Ministry of Agriculture, Fisheries and Food already does in many cases, or at least to treat it as a draft order and be prepared to withdraw it and resubmit it if there proved to be overwhelming opposition to elements in it expressed in the House or the other place, or both? Unless the Government give these assurances tonight, I suspect that the proceedings next Monday will be more difficult and prolonged than most hon. Members would wish them to be. Similar considerations apply to any Order in Council which is made to avoid statelessness for any current residents in Hong Kong.

I hope that the Minister can give satisfactory assurances on those points and on my earlier questions. Otherwise consideration by the House of the Bill, and certainly of any future Orders in Council, will be a great deal more difficult than is necessary.

The House will have been amused by the long ramble taken by the right hon. Member for Leeds, East (Mr. Healey) through the gossip columns — on my reckoning, it lasted for 27 minutes — and it was grateful that, at the end of his speech, he turned his attention to the Bill.

The question whether sovereignty over Hong Kong should be transferred to China in 1997 has already been decided by the House, and almost no one in the House believes that it took the wrong decision. Opinion is almost unanimous that the agreement made with the Government of China is an excellent one that will enable the people of Hong Kong to preserve their traditional way of life. Indeed, it is a remarkable agreement, embodying as it does no fewer than 16 specific freedoms that go to make up the way of life of the people of Hong Kong.

It is becoming clear that one anxiety of the people of Hong Kong—about the durability of the agreement—has less basis than it seemed to have at one time. It is clear that the agreement is likely to last. It will last for reasons of self-interest on the part of China: the economic self-interest; and a self-interest in the sense that it will set an example which will be relevant to the possible unification of the mainland of China and Taiwan.

Nevertheless, it was obvious from the Prime Minister's press conference in Hong Kong last month that some people still oppose the agreement. There were references in the questions asked of the Prime Minister to handing Hong Kong to a Communist dictatorship. Such questions displayed a basic misunderstanding of Deng Xiaoping's concept of, "one country, two systems." When people ask, "Can the Chinese in Peking keep their hands off religion in Hong Kong after 1997," or "Can they keep their hands off the education system," or "Will they allow private property to flourish in Hong Kong," they fail to understand what the concept of "one country, two systems" involves. It will require a self-denying ordinance on the part of the Chinese Government. China is as well aware as anyone that Hong Kong is the goose that lays golden eggs, now for its own people and also for China, but in the future increasingly for the benefit of China. The arrangement of "one country, two systems" contains an automatic goose-preserving mechanism. If the Chinese begin to meddle in the internal affairs of Hong Kong, contrary to what they have declared in the agreement, confidence in Hong Kong will disappear, the goose will grow thin and pine, and the eggs will no longer appear.

A good example of the common interest that China and Hong Kong have in the prosperity of Hong Kong occurred recently. This morning I was fortunate to talk to Sir S. Y. Chung, the senior unofficial member of UMELCO, who has come to Britain directly from Peking to be present for the debate. We are grateful to him and to other members of UMELCO for being kind enough to brief some of us during the past few days. He was in Peking to attend the signing of the agreement for the Daya bay nuclear power station. That is an enormously important project worth $4 billion.

At the signing ceremony, the Prime Minister of China made four points about the project. First, it is the largest joint venture into which China has entered since the open-door policy was adopted. Secondly, the project is bigger than all the other joint venture projects that have been signed by China during that period put together. Thirdly, it will be a catalyst that will help forward similar joint ventures. Fourthly, because most of it is financed by a loan, and that loan will be repayable from the proceeds of sales of electricity to Hong Kong, China has a built-in interest in ensuring that Hong Kong remains prosperous. Only if Hong Kong remains prosperous will China be able to service the loan. That is an interesting example—examples are happening almost every day—of the way in which the common interests of Hong Kong and China will be built up.

Recently a two-week seminar in Hong Kong was attended by representatives of the 14 cities that are now special economic zones along the coast of China. Those representatives came to Hong Kong to learn how to operate a free enterprise system, to arrange instruction in technology and to consider the possibilities of raising money. It is interesting that they came to Hong Kong, not to Shanghai or other ports on the Chinese coast, to look for those advantages. I believe that they will continue to look to Hong Kong for them.

It is worth asking ourselves whether it is right to legislate so soon after the signing of the agreement. I believe that it is the right course, because it helps to preserve certainty about the future. Therefore, helps to sustain prosperity, because certainty is necessary if prosperity is to continue.

The economic successes of Hong Kong are remarkable. The agreement initialled in the autumn and signed in December has already had a beneficial effect on the economy. Land prices have recovered from the severe drop that they suffered some time ago. Hong Kong's exports have increased by 25 per cent. over the same period last year. Investment is coming in from the United States, and inquiries about investment are coming in from Japan.

Paragraph 2 of the schedule will be the most-discussed matter during today's debate. I am glad that the Foreign Secretary announced today the nomenclature of the new form of citizenship which will replace that of British dependent territory citizen for Hong Kong people. What time scale does he envisage for the passage of the relevant Order in Council? It has been represented to members of the Hong Kong parliamentary group that it should be passed within a year, for much the same reason as I mentioned when I congratulated the Government on introducing the legislation rapidly.

With regard to the amendment of the right hon. Member for South Down (Mr. Powell), I remember that many years ago when I was studying law lawyers used to enjoy arguing whether it was proper jurisprudentially to enable an Act of Parliament to be amended by Order in Council. But they never came to a clear conclusion. and I am not sure whether, if they set about the subject now, lawyers would come to a conclusion. However, we should bear in mind the fact that the Government have only a narrow scope when tabling the order.

My right hon. and learned Friend the Foreign Secretary has already committed himself fairly clearly to what he means by

"a new form of nationality,"

which is referred to in paragraph 2(1)(b) of the schedule. There is not much scope for the introduction of an order in due course which will be ultra vires, it seems to me. If the Government introduced an order which went too wide, which I take to be one of the concerns of the right hon. Member for South Down, would not the Joint Committee on Statutory Instruments draw that to the attention of the House, and would not the House therefore have an opportunity to consider whether the order went too wide?

If I have correctly understood the anxieties of the right hon. Member for South Down—

indicated dissent.

—they should be modified by the fact that the order has to be within the terms of the Bill, and they are seen to be pretty narrow when one considers paragraph 2 of the schedule. We also have the knowledge that the Joint Committee on Statutory Instruments will examine the order when it is laid. I do not believe that the Government have a blank cheque. To put it at its mildest, it is a cheque of the kind which bears at the top, "Not above £30."

My right hon. and learned Friend the Foreign Secretary discussed whether there might be an amendment to the Bill incorporating the new name of the citizenship to be granted to the BDTC. It will be rather difficult to do that in the Bill. As I understand it, the intention of the usual channels is that the House should consider the remaining stages of the Bill in a week's time, and I am not sure that that allows enough time to ascertain the opinion of the people of Hong Kong on the proposed name. That leaves the possibility that another place might consider an amendment. My right hon. and learned Friend referred to the possibility of the Government putting forward such an amendment in another place. But I am not sure that I would be entirely happy to leave that debate to another place and not debate it first in this House. I am inclined to say that in my view that idea is not really a starter.

Then we had a discussion about whether there would be a draft Order in Council. The Bill already provides that the order will be laid in draft, so I do not think that hon. Members are really talking about the laying of a draft Order in Council, which was the language used by the right hon. Member for Leeds, East. We shall have a draft Order in Council, anyway. The real point is the one raised by the right hon. and learned Member for Aberavon (Mr. Morris). Will the Government introduce an order in tentative form without the intention of having a vote on that occasion but in order to ascertain the view of the House? If we had a vote, it is likely that the Whips would be on, and it would be difficult to ascertain the view of the House. Therefore, I am attracted by the idea of the right hon. and learned Member for Aberavon.

I was grateful when my right hon. and learned Friend the Foreign Secretary outlined some of the relevant factors which would have to be covered by Orders in Council introduced under paragraph 3 of the schedule. The list on page 8 of the White Paper containing the agreement is a long one. We might need Orders in Council on many of the subjects there set out, including such matters as copyright, land, shipping, adherence to the GATT and the IMF, pensions of civil servants, and so on. These orders would be laid under the negative resolution procedure. I hope that the Government will be responsive if it is the wish of the House to have debates on that category of orders as well. It is important that they should take great care to see that these matters, which will come up over the next few years, are adequately discussed if that is the wish of the House. It may be necessary from time to time to have more than one and a half hours for a debate on an order. In the case of the order on the nationality question, for example, it is inconceivable that the House would be happy with a debate lasting only one and a half hours. It might be necessary to have a full day's debate.

I support the Bill. There are many tasks before China, the United Kingdom and Hong Kong over the coming years until 1997. There is the elaboration of the basic law. There is the progress towards democracy in Hong Kong. There is adherence to the international organisations. There is the work of the Joint Liaison Group. There are many other tasks. I am optimistic that these tasks will be discharged successfully and in a way which reinforces the relations between China and the United Kingdom and between both of them and the people of Hong Kong. All three of these parties are pragmatic people. I believe that they are all determined to make the agreement work. What is more, it is in the interests of all three parties that the agreement should work.

In the last few days I have had the pleasure of meeting a number of people in Hong Kong, especially experienced and eminent lawyers, and I am grateful to the Foreign Office and to the Hong Kong Government for making the arrangements. I was concerned to establish as far as I could — I readily concede that I could do it only on a very limited basis —any views that were held on the legal implications arising in the post-agreement period.

Other than two short visits to Hong Kong in the past, I confess that my knowledge of the sitution was limited. As a former defence Minister under my right hon. Friend the Member for Leeds, East (Mr. Healey), I had then and subsequently familiarised myself with and visited our defence establishments there, so I was not entirely innocent.

The first matter that was drawn to my attention was a concern about the basic law. It was conceded on all sides that this was a matter for the Chinese Government. It was felt that the British Government had no role in this. I was not aware of any expectations that they might have.

Nevertheless, on a matter so vitally important for the people of Hong Kong, how are their views to be made known to China? There was a wish that China should establish a proper forum so that the views of the people of Hong Kong might be received. There was also the view that nothing should be seen to be done which might poach into our responsibility over the next 12 years. Whatever fears there might be in that respect, in my view the paramountcy of the need for a proper and adequate means of ensuring that the views of the people of Hong Kong are better known outweigh some people's perception of danger.

Other than the welcome continued impetus towards democracy, about which I detected a degree of ambivalence—certainly as regards the development of collective, let alone party, views — what other machinery might be set up? I was glad to hear the affirmation today by the Foreign Secretary that the Chinese would consult in Hong Kong on a widespread basis. However, at present we are not clear how that is to be done to ensure that the views of the people of Hong Kong are fed in in the proper way before the basic law is formalised.

Another matter that causes concern is the timing of the introduction of the basic law. The legal traditions of a non-capitalist state are different from the traditions of a capitalist state or of a state with a mixed economy. To this must be added the complications of a system of law that is based upon precedent and the common law, upon which is grafted a number of statutes. The system in China is totally different from that in Hong Kong. However, a basic law has to be evolved which caters for the development and continuance of the existing laws in Hong Kong, although they will have to be changed to meet circumstances as they develop.

I was asked how the concept of judicial review would operate after 1997, in particular regarding clashes between legislation within Hong Kong and the basic law. To resolve these differences, so far as they can be resolved, will take time. However, the view expressed to me time after time was that it should not take too long. The great value of the agreement has been the diminution of uncertainty. That has been reflected in a number of ways. Reference has been made, for example, to property values and the stock exchange index. Whatever the indicators, there has been a return of confidence to Hong Kong. Therefore, agreement on the basic law by China well before the end of this decade will give added impetus to the continued diminution of uncertainty.

Circumstances will change and develop between now and 1997. However, I suspect that the drafters of the legislation are sufficiently wise to recognise the need for flexibility in order to meet conditions between now and 1997 and to form the foundation for the period thereafter. Within these constraints, I believe that the sooner China determines its basic law the better it will be for Hong Kong.

Before the right hon. and learned Gentleman moves on from the very important point that he has made, will he be a little less timid and consider the possibility of advocating, as there is in America, a supreme court to rule upon any conflicts that might exist between local law and basic law and thereby resolve any differences that might arise? Unless there is machinery of that kind, surely all that the right hon. and learned Gentleman is saying is very vague and unconstructive. Surely it is bounden upon us to try to make a more constructive suggestion.

My appearance of timidity is essentially because there is ambiguity on this point. It is a grey area. I am sure that the hon. and learned Member for Burton (Mr. Lawrence) will have read the terms of the agreement. He will have learnt that appeal to the Judical Committee of the Privy Council will no longer continue. He will also have read that there is a proposal to set up within Hong Kong a supreme court which will deal, as a final court of appeal, with matters arising within Hong Kong and that the suggestion has been made that judges from outside Hong Kong should sit on such a court.

However, to turn to the point which the hon. and learned Member for Burton has made—that it is a grey area and what is to happen in future—machinery is envisaged for appeals within Hong Kong, but, as I understand it, and I should be glad if I could be corrected—I see that the hon. and learned Gentleman is nodding agreement with me—there is a grey area relating to what happens if there is any clash between the law of Hong Kong and the basic law. The basic law is paramount.

Let me take a perhaps ridiculous example, and I do so only by way of example. The agreement envisages freedom for religion. What will be the position if, because of a brainstorm, whoever is legislating in Hong Kong decides to diminish that freedom, which I hope will be enshrined in the basic law? I envisage that that would be a matter requiring some kind of machinery similar to the judicial review which we have in this country. I am glad that the hon. and learned Member for Burton has given me the opportunity to elaborate at perhaps greater length than I intended upon this matter. I hope that when the Minister winds up the debate he will give an assurance about adjudication and future possible clashes at that level—the point upon which the hon. and learned Gentleman has put his finger.

The other matter that is causing concern is the status of the new passport. I welcome the observations of the Foreign Secretary. As I understood it, he said that within a year the matter of laying an Order in Council would be determined. However, the problem is: when will it become operational? My right hon. Friend the Member for Leeds, East made this very point. Until 1997 there will be an Order in Council setting up the status of the new passport. When will people expect to have these passports, or is it envisaged that people will continue to hold their present passports for the best part of the next decade? The way in which a passport is treated by the receiving country is very important. That is the consumers' test of any passport and of any status that it seeks to cater for. Therefore, well before 1997 this problem ought to be clarified.

It will be the Government's responsibility to ensure that receiving states are made abundantly aware of the status and value of the passport so that for a number of years people can use the new passports, if they so wish, to ensure that they are properly tested by the receiving countries. When one is dealing with millions of passports, in order to avoid a hiatus it may be necessary to have a period of dual validity for both existing and new documents.

When I met distinguished members of the councils, together with the hon. Member for Welwyn Hatfield (Mr. Murphy), it was not clear whether all the stages of the Bill would be taken tonight. I said that I doubted very much whether all stages would be taken tonight. I was relieved, upon my return, to find that this would not happen. However, as the right hon. Member for Blackpool, South (Sir P. Blaker) said, it is a very short time indeed between Second Reading and the Committee stage next week for the views of the people of Hong Kong to be made known.

I hope that the managers of the business of the House will reconsider the matter so as to ensure that there is a longer time between the two stages. Although Hong Kong is only a matter of many hours flying time away, lime is needed for people to form their views. The earliest opportunity that they had to see a photostat or telex copy of the Bill was just before last weekend. They are very anxious indeed to have time in which to make representations. People cannot come from Hong Kong at five minutes notice.

I trust that if representations come within the next few days the Government will be able to respond to them before Third Reading. I should be far happier if we did not rush this legislation, and did not put all our eggs into one basket and relied on matters to be further considered in the other place. This morning I had representations from the Indian community, and I am sure that other hon. Members received some as well. Representations are bound to come, and they must be given proper consideration, so that people's anxieties can be allayed.

There is a similar problem with statutory instruments. We have quite rightly been told that nationality provisions need an affirmative resolution of each House. That means a debate and, if necessary, a vote. I agree with the right hon. Member for Blackpool, South that one and a half hours may be completely inadequate to deal with all the representations. The anxiety that has been expressed about the speed of the Bill will be expressed about the publishing of statutory instruments in good time so that, before the matter is debated in the House, there is adequate time for the people of Hong Kong to make their views known.

My right hon. Friend the Member for Leeds, East spoke of draft regulations. I suggest that draft orders should have a green edge, in the same way as we have Green Papers, and should be on a tentative basis. There should be no loss of face by the Government if, when they have published and we have debated the draft instruments, so much anxiety is expressed in the House that the only proper course is to withdraw them at the end of the debate. I have been here for more than a few years and have had some experience of what the Whips get up to. I fear that we shall be driven through the Lobbies far too quickly, without adequate time for the Government to reflect on the representations that are made.

I hope that we shall have an assurance from the Minister that, such is the importance of these draft instruments, and particularly as we are in partially uncharted seas, we should not make mistakes. We should be given every chance to ensure that people are not only heard but have a response from the Government on the feelings expressed in our debates. As draft orders need a negative resolution, the House will have to be on constant watch. It will be up to us to ensure that, when there is disquiet, prayers are tabled and we have the opportunity to discuss these matters and, if necessary, to reject them by a vote.

Having said that, I wish the Bill a fair wind. The Joint Liaison Group has an important role to play in the future of Hong Kong, even though the Prime Minister did not understand its role. My right hon. Friend the Member for Leeds, East referred to the Prime Minister's statement about the Governor. She said that she would be astonished if the Governor was not part of the Joint Liaison Group. Rightly or wrongly, the Prime Minister is always confident. This is a danger, as she knows very little about these matters.

The House has a continuing responsibility until 1997, both legally and morally. During that period there should be regular debates on Hong Kong and its policies and problems to show the people there that we care. I was disappointed with the argument put by the Foreign Secretary. I know the difficulty of discussing annual reports that are long out of date. He has told the House that when there is anything worth reporting it will be reported to the House. It is important that this is done, not by a statement at 3.30 pm, but through a debate, with adequate time provided by the Government, so that these matters are debated and ventilated in the House. We need better assurances from the Government tonight.

Hong Kong is a thriving part of the expanding and virile south-east Asia and western Pacific. America and Japan have not been worried about sovereignty. They have taken a greater share of the trade, development and expansion of Hong Kong. I hope that we recognise this and play our part as a trader and developer in ensuring that Hong Kong has an even greater role in raising the standard of life of ordinary people in the part of Asia well beyond its borders. The important issue is the standard of life for the people in Hong Kong and beyond, not an argument about sovereignty, which has bedevilled us for such a long time, but which has caused no anxiety to America or Japan. They have been able to snatch a growing proportion of trade in Hong Kong, a proportion even greater than ours.

It is no more than three parliamentary weeks since we discussed the subject matter of the Bill—the agreement on which it is founded—both in this House and the other place. It was debated well and fully. Taken together, those debates were the best debates that we have had on Hong Kong for many years. Over the past 10 years or so hon. Members' interest in Hong Kong has increased greatly. It has grown with the importance of Hong Kong in the world. Now we have a well-informed parliament, ready to keep its eyes on the progress in Hong Kong. We are determined to do that in the years up to 1997.

We have hon. Members who have made it their business to learn about Hong Kong; the debate in the other place showed how much people such as Lord MacLehose with his deep knowledge of the territory, Lord Home, a past Foreign Secretary, Lord Lindsay of Birker who lived in China for many years and has so much experience, and Lord Rhodes, who has taken such an interest in both Hong Kong and China, know about the area. Parliament today has a wealth of experience and knowledge on this subject, hence the quality of our debates.

The verdict of those debates was an acceptance of the agreement, an acknowledgement of the fact that it was acceptable to Hong Kong, coupled with a deep appreciation of the skill of the negotiators who achieved that agreement. Since that debate, confidence in Hong Kong, which took a turn for the better on 26 September when the agreement was signed, has continued to rise. The UMELCO speaking notes that most of us have received say:

"Since the signing of the Joint Declaration, confidence in Hong Kong has considerably recovered".

It goes on to refer to the rising stock exhange, the firm dollar, and so on.

David Bonavia has already been quoted in the House. He has said:

"The New Year marks Hong Kong's entry into politically uncharted waters, but its economy shows every sign of making a fast recovery from the uncertainty of the recent past."

The Hong Kong Bank, in its January report, states:

"Hong Kong was entering 1985 with a renewed sense of confidence and optimism following the signing of a treaty with China on the territory's future after 1997."

So the progress continues. The efficacy of the Bill depends on China honouring the draft agreement, a factor which has naturally featured already in the debate. In this connection a passage from the debate in another place deserves our consideration. I quote from the speech of Lord MacLehose of Beoch. He said:

"For a Communist Government to commit itself to maintaining this capitalist enclave may seem to some so bizarre as to be incredible, but the fact is—and I do not know how much this is generally realised — this concept is entirely consistent with Chinese policy towards Hong Kong, at least over the past 20 years."

Lord MacLehose went on to say that the characteristics of Hong Kong, as described in the joint agreement, have been permitted to exist over all these years irrespective of the regime in Peking. He continued:

"In my years as governor I found the Chinese People's Government and its officials in Hong Kong both friendly and supportive; so there is nothing inconsistent, far less suspicious, in the Chinese Government having now volunteered that Hong Kong should continue under their flag more or less as it is since it has been their policy to accept it for so long under ours."— [Official Report, House of Lords, 10 December 1984; Vol. 458, c. 39.]

Order. Is the hon. Gentleman quoting a Minister or a Member of another place?

A Member of another place.

It is in order in the current Session to quote a Minister in another place, but not a Member.

Thank you, Mr. Deputy Speaker. I shall not do so again.

So the changes that we are anticipating are not so sudden or out of character as some suppose. The co-partnership in industry between the two countries, about which we talk a great deal, has existed for a long time. No one has ever quite known the scale of it because it has not been over-advertised, especially when the political climate in Peking has been uncertain. There is evidence of increasing interdependence between China and Hong Kong. The meteoric growth of trade between the two countries shows how that is happening. Trade has increased fivefold in five years. In 1984, entrepot trade increased by 130 per cent. That is an illustration of what has happened with the opening of the door from China to Hong Kong.

In the course of 1984 China overtook West Germany and the United States to become Hong Kong's second and most important export market. That might be thought to be not unnatural for neighbouring countries, but in 1978, before the "four modernisations" were announced, China ranked only 37th in Hong Kong's markets. There has been an enormous increase in the connection between the two countries and Hong Kong's role as an entrepot has been transformed. Re-exports to and from China have more than doubled every year since 1978, and it was thought that they would amount to HKS25 billion in 1984.

An article on Hong Kong appeared in the Financial Times on 3 January. It read:

"Hong Kong will remain the main doorway to the only remaining huge undeveloped market in the world … People here have a shared language and culture, and they have commercial links throughout the mainland that it would take a Western businessman years to develop."

In addition, the container port is the third most active in the world and is about to become the second most active. As we heard from my right hon. Friend the Member for Blackpool, South (Sir P. Blaker), China goes to Hong Kong for its technology. The signing of the agreement on the Daya bay nuclear plant has been the most significant development for many years. When this Bill is debated in another place I hope that Lord Kadoorie, the Chairman of China Light and Power, a main partner in the project, will be there to tell us all about it.

I stress the growing interdependence between the two countries because it shows that the economic scene is changing so quickly that it is impossible to visualise Hong Kong in 1997. It is certain that Hong Kong will be a very different place when we hand over our sovereignty. We in the United Kingdom will find it hard to keep up with developments.

There are signs also that political changes may come faster than we anticipated. It was apparent during the debates in December that most of us agreed with the Green Paper produced by the Hong Kong Government on electoral reform and the subsequent plan. I understand that an unexpectedly large number of candidates are likely to come forward for district board elections, which will be taking place shortly. There is a great variety of candidates. The somewhat lukewarm interest that we assumed would be taken in the voting procedure may prove wrong, and we may have to move faster than we expected.

I was extremely glad to read in the newspapers two or three days ago that the successor to Sir Philip Hadden Lave as Chief Secretary is to be David Aikers-Jones. I am sure that those who know David Aikers-Jones will agree with me that he is an admirable choice. He has served the Hong Kong Government in the New Territories for the past 20 years and he has great knowledge of China, the Chinese language and Hong Kong. There will be general delight that he has moved into such an important pos: at such a critical time in the history of the territory.

Over the past year UMELCO has supplied us with three papers prior to our three debates. The changing nature and content of the papers tell the story. The first paper, which was published in May, consisted of a long list of matters of concern to those in Hong Kong, and genuine matters of concern they were. It consisted also of a long list of assurances and undertakings that they needed in the agreement. I and many other hon. Members wrongly thought that UMELCO was asking for too much I doubted whether the Chinese Government would go that far. In the event, I was wrong. and the agreement obtained was much more favourable and much more detailed than I had ever expected.

The second UMELCO paper was published on 29 November 1984. It reflected the success as set out in the agreement. It was a reasoned paper accepting the agreement and giving the reasons for doing so The four critical areas on which assurances had been sought had met with satisfactory assurances.

We have now been supplied with the third speaking note. It is a much shorter document than the papers which preceded it. That is because so much of what had been asked for had been granted. However, that does not mean that we are left with no worries. Most of the worries that can be dealt with by the Bill relate to nationality. The paper concentrates on the status of the new passport, nomenclature, statelessness and so on. That does not mean that they are the only remaining worries, but they are important worries with which the House must deal in the next few weeks and months. I very much hope that the Government have listened to those who have asked for sympathetic consideration of those nationality worries. For example, are we giving enough time? Would it be a good idea to put off the Report stage and Third Reading for a while so that we can hear more views from Hong Kong, as has been suggested?

But whatever happens we must remember a point that has already been made several times, and that is that during the next few years the people of Hong Kong will be watching Britain to see whether our commitment to that territory continues undiminished until 1997. Today they will be looking to see how we deal with their worries about nationality. That is the first test of commitment that we must pass. I hope that the Government will do all they can to pass that test.