Shall
Selete 'a'
Jebate
I the
for in
I that
·
But
La
gain
22 March 1989]
[Mr Temple-Morris Contd]
THE FOREIGN AFFAIRS COMMITTEE
RT HON SIR GEOFFREY HOWE, QC, MR ROBIN McLaren, cmg, and MR ALAN PAUL
it must have independent finances and financial arrangements. Ian Taylor.
Mr Taylor
20. Thank you, Chairman. I am glad you pointed out my lack of legal knowledge. Can we look at Chapter 5 of the Basic Law on which I would like to ask one or two questions? Article 106 stipulates that the Hong Kong SAR shall "avoid deficits and ensure that the budget is commen- surate with the growth rate of its gross domestic product". Article 107 stipulates that the Hong Kong SAR in enacting laws on taxation take "the low tax policy previously pursued in Hong Kong as reference". Do you think these pro- visions are consistent with the "independent finances" promised in the Joint Declaration?
that
shall
(Sir Geoffrey Howe) I have taken this on previous occasions as an example again of the fascinating quality of the way things are taking place within the Basic Law Drafting Committee. I am really summarising the debate as it is going on. Plainly everyone is concerned to ensure that the Basic Law will reflect the high degree of autonomy provided from the Joint Declaration and the suggestion was that the text of these Articles 106 and 107 as they appeared in first draft inhibited that autonomy, although I think you and I would not find it difficult to agree the objectives there defined are quite praiseworthy ones: one,jbalanced budget and, two, low taxes. That is the debate, as I understand it, that is still taking place within the Basic Law Drafting Committee. These clauses are an interesting example of the wish of the Chinese draftsmen to take account of Hong Kong views and there the debate is still proceeding, as I say, between the two concepts. My own belief is that, while it would clearly be legitimate to have articles which directed attention to the desirability of these objectives, probably it would be in the end preferable - but this is very much for the Drafing Committee – to have a conclusion which retained the autonomy notwithstanding an injunction to respect the objectives. I think that is the sort of position that is likely to emerge again it is very much a matter of what will carry the day as a matter of confidence with Hong Kong participants on the Basic Law Drafting Committee.
21. I would certainly accept that the termin- ology used would be very welcome in many West- ern countries as a sort of built-in ground rule in order to balance budgets. The key thing is whether business in Hong Kong feels that the provisions in these articles do provide the degree of indepen- dence in monetary, currency and international trade arrangements sufficient to preserve the free enterprise and trade system.
(Sir Geoffrey Howe) Yes, that is precisely the question which in the last resort has to be answered by those most directly accountable to the opinion that is being reflected, I think. As I understand it, it is the business community that is most attracted to the provisions implicit in these two articles. I have no doubt even the business community are
19
[Continued
probably divided and we shall have to see how the Basic Law Drafting Committee judges the best balance.
22. But from the representations you have received so far you think you are on the right track? (Sir Geoffrey Howe) Yes, I think it is very import- ant on something like this not to overplay our role on this track. There is a huge debate taking place on these two very articles within the Basic Law Drafting Committee and the Consultative Com- mittee with Hong Kong opinion expressing itself on different sides of the argument. What we seek to do is to make sure that opinion is transmitted in so far as it needs amplification and to keep perhaps an overriding eye on the fundamentals, which is why I opine as I do about the importance of autonomy probably reserving a more overriding deserving frankly, the answer will depend upon the judge- consideration than these fiscal objectives. But,
ment of those closer to the scene than you or I as to what is most likely to carry confidence in Hong Kong.
23. One final question: are there sufficient safeguards to carry out the requirement that the SAR Government will not be required to remit revenue to the Central People's Government? This is something that was set forth in the Joint Declar- ation. I just would like your comment on it.
(Sir Geoffrey Howe) I know it was set forth in the Joint Declaration,I was an important feature of it. I have not had my attention directed to any aspect of the Basic Law that causes disquiet about that. Article 105-the one immediately preceding which is regarded as sufficient provides for inde- pendent finances of the SAR, which shall use its financial revenues exclusively for its own purposes, and they shall not be handed over to the Central People's Government and The Central People's Government shall not levy taxes on the SAR. I think that is as explicit as you can be.
Chairman
24. Is it realistic, Secretary of State, to think in terms of this as HKSAR expanding and that a wider area might be covered by these independent financial policies and, indeed, obviously by the hard currency prevailing in the area?
(Sir Geoffrey Howe) I think it is a question which can scarcely be directed at any of us actually. If you ask me to offer a judgment, I would say that the authorities in the People's Republic of China are themselves seeking to establish special economic zones which are designed to have locally some of the vitality that is associated with Hong Kong, and I think I am right in saying that Chairman Deng Xiao Ping has himself talked at some time of the desirability of trying to create other Hong Kongs in China. But I would not like to go beyond that. One of the features one must notice is that the provisions of the Joint Declaration are very expressly designed to be applicable to the area of the Hong Kong SAR and there are provisions for treating outside as being separate. The only other
-
It
sufficient. It. Guctation
end of guerah
Χ
'mama
No comments yet.
Private notes are available after approval.