TNAG-1154-FCO40-1434-Visits-by-Members-of-Parliament-(MPs)-to-Hong-Kong-1982 — Page 156

(DEFENCE AND EXTERNAL AFFAIRS SUB-COMMITTEE)

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ately located outside Hong Kong'. The performance of Jardine Matheson & Co. is impressive; profits since 1970 have grown 566 per cent. from HK$38 million to HK$215 million, assets are up from HK$285 million to HK$2,671 million and the dividend per share has increased 420 per cent. (The Times, 18th August 1975). In the light of the above, and of the fact that the only role for which British Forces in Hong Kong are now properly equipped is internal security we see no reason why adequate taxation should not be levied on the gigantic corporate wealth of companies in Hong Kong to meet the full cost of those Forces, for so long as they remain." (Mr. Hooley.)

Question put, That the Amendment be made.

The Committee divided:

Ayes, 3

Mr. Frank Hooley

Mr. Arthur Lewis

Mr. Julius Silverman

Noes, 6

Sir Frederic Bennett

Mr. Bernard Conlan

Mr. Geoffrey Finsberg

Colonel Sir Harwood Harrison

Mr. Anthony Kershaw Mr. John Loveridge

Paragraph 4 agreed to.

Paragraph 5 read as follows:

We consider that the continued presence of British Forces in Hong Kong is vital to the continued existence and the economic well-being of the Colony. In international law, title to the Colony exists in a series of treaties ceding Hong Kong Island and part of Kowloon in perpetuity and leasing the New Territories until 1997. It was acknowledged that the Peoples' Republic of China, like their nationalist predecessors consider that Hong Kong's cessation was founded on unequal treaties dating from a period of internal weakness. In Chinese eyes the settlement of questions raised by the treaties was in no way dependent on the ending of the lease for the New Territories, and the future of Hong Kong, Kowloon and the New Territories was indistinguishable. For the moment, it is clear that the Chinese government acquiesce in the status quo, but a withdrawal of British Forces might well force a change of attitude (Q. 15). The Chinese have a substantial interest in not disturbing arrangements as Hong Kong provides a source of valuable foreign exchange, a good local export market and an entrepôt for Chinese exports elsewhere. For the United Kingdom, in addition to preserving the political stability, there are some important economic advantages to be gained from the continued presence of British Forces. First, substantial benefits accrue to the United Kingdom balance of payments from the invisible earnings of banking, insurance, shipping and other commercial interests (Q. 79). Second, Hong Kong is, regarded as a British airport and this is of considerable value to Britain in negotiating flying rights for British Airways and other British airlines since these can be traded off against landing rights else- where in the world (Q. 80). The health of the internal economy is also greatly dependent on the prospects for the future of the Colony. The flow of investment in Hong Kong to continue the rapid expansion of its

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