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[LORD HENLEY] should apply to the district board and municipal council elections. But they refused to accept as part of an interim package that the single seat-single vote method should apply to the Legislative Council.

"We and the governor consider that there are compelling reasons for including this proposal in the interim package: in practical terms it would otherwise be necessary to legislate twice on the voting system, using up legislative time which will be in short supply next year; the single seat-single vote system enjoys widespread support in the Legislative Council. If we had accepted the Chinese position and introduced legislation to apply this voting method to the district boards and municipal councils only, the council might have extended the measure to apply to the elections to its own body. That would lead straight back to further difficulties with the Chinese Government. We would not have saved time: we would have wasted it.

"Despite our best efforts, it has not been possible to reach agreement on this issue. The question of abolishing appointed members also remains un- solved. Time has now run out for pursuing these points.

"It is necessary to introduce legislation on them into the Legislative Council before their Christmas Recess. That will allow work to begin straight away in a Bills Committee. The Governor has therefore announced that he will publish draft legislation on 10th December for introduction on 15th December. "These proposals are largely uncontroversial in Hong Kong. We had thought that they were uncontroversial with China. On a number of them it was possible to reach a common view in the talks. In those cases the legislation will reflect that. The Governor is not at this stage legislating on the main issues which remain in dispute, namely the functional constituencies, the composition of the election committee and objective criteria for the through train.

"We are not breaking off the talks. We have proposed a further round in December to pursue agreement on the remaining issues. We are prepared to work seriously and constructively to that end. We strongly hope that the talks will continue.

"Britain and China have to carry out what they agreed, namely to preserve Hong Kong's way of life and success while transferring sovereignty. That is a unique and difficult task best carried out together. The Joint Declaration makes clear the fundamental British responsibility up to 1997. We and the governor are committed to working with China in the interests of Hong Kong. We look for corresponding commitment from their side".

My Lords, that concludes the Statement.

Baroness Blackstone: My Lords, I am grateful to the Minister for repeating the Statement. I reiterate what we have said on numerous occasions; namely, that we have always supported moves towards greater democracy in Hong Hong. We believe that these relatively modest

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proposals for further democracy are consistent with the Joint Declaration. We understand that they are also consistent with the Basic Law.

This Statement is bad news for the British Government and, far more important, it is bad news for the people of Hong Kong. Why, after a year's discussion, are even the simplest of these proposals apparently stiil unacceptable to the Chinese Government and even an interim agreement beyond the reach of the Foreign Office, British Ministers and the Governor of Hong Kong? Why have Her Majesty's Government been unable after 17 rounds of talks to persuade the Chinese Government that the implementa- tion of these proposals is necessary?

Perhaps the Minister could give a little more detail about why the talks have collapsed and why the Chinese Government will not accept the single seat/single vote proposals that have been put to them. What hope can there be for agreement on the main issues in dispute such as functional constituencies and the objective criteria for the through train when there has been failure on these less important interim measures? Is it not apparent that the UK Government got off on the wrong foot when proposals for political reform were announced in October 1992 and never recovered from the bad start that was made as a result of the failure to consult the Chinese Government adequately at that time?

I do not wish in any way to imply that the Chinese Government's intransigence on these and other matters is acceptable. We on these Benches have been consistently critical of their human rights record, as we have of their handling of the Tiananmen Square demonstrations in 1987. However, we cannot be other than deeply concerned about the way in which our relations with the Chinese Government on the future of Hong Kong appear to have deteriorated in the past year and a half. Those who thought that the handling of these matters by the British Government and the Governor of Hong Kong lacked subtlety have been proved to be right in the light of these latest developments.

Is it not increasingly likely that the Chinese will now set aside these proposals in 1997 and introduce their own plans? What hope is there for the through train? Is it not also clear that without a substantial recovery of trust and serious further negotiations leading to agreement there is nothing that the UK Government can do to stop that happening?

The Statement says that the Government are not breaking off the talks. Can the Minister tell the House what the Government intend to do if as a result of today's announcement the Chinese refuse to pursue talks on the remaining issues? These are important questions that must be answered.

In addition, what can the Minister tell the House in the way of assurances that pressing ahead with the proposals for political reform on a unilateral basis will not jeopardise existing arrangements for the new airport and other major capital projects that have been agreed?

Today's Statement on the failure to come to any agreement on the practical arrangements to implement earlier agreements can only give rise to considerable anxiety among all those with an interest in the peaceful

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