IN July 1997, I went to an excellent party hosted by David Rennie, now The Economist’s Beijing bureau chief, to mark the handover of Hong Kong to the People’s Republic of China. Everyone else had interpreted the dress code as polo shirt and chinos, to mark the end of gweilo influence on the Territory; I turned up in Chinese pyjamas, with the trousers held up by an MCC tie.

Even so, I fancy I cut a more dignified figure than Tony Blair did that night, since he was handing over 97 per cent of the population of British Dependent Territories – about 6.5 million people – to a despotic regime notoriously indifferent to human rights and officially founded on Leninism, as modified by Mao and China’s then leader, Deng Xiaoping, whose catchy maxim was “Practice is the sole criterion for the truth”.

Well, if you’re entirely pragmatic, or cynical, you might take that as no more than a statement of the obvious in politics. And to be fair to Mr Blair, who had only just become Prime Minister, the terms of the settlement were largely set by the negotiations during Margaret Thatcher’s time in government which were initially led by Sir Edward Heath, with his stellar record of undermining UK interests. Standing up to China, admittedly, wasn’t an easy task then – when Deng told Mrs Thatcher he could “take the whole lot in an afternoon” she admitted there wasn’t anything she could do to stop it – and it may be even harder now.

Fat Pang (as Chris, now Lord Patten of Barnes, was known when he was Governor) did try to do something to safeguard the interests of the citizens of Hong Kong by expanding the democratic franchise but, as is now apparent, you can’t really do a great deal to protect human rights when the incoming government is a dictatorship.

So the current Government’s proposed provision that, if China imposes its national security law –with extradition to the mainland – all Hong Kong holders of a British National Overseas passport (there are about 300,000, though roughly half the population may be eligible) should be entitled to come to the UK with the right to work for at least 12 months is a welcome step.

Of course, it would have been better if we’d simply offered that – as some of us argued at the time – to all Hong Kong residents about 25 years ago, just as it would have been better if we’d extended a similar offer to other Commonwealth citizens, rather than Theresa May’s policy of illegally deporting members of the Windrush generation. But it’s not just a question of it being the right thing to do; it would very obviously be in the country’s best interests.

One result of Brexit is that opposition to immigration has fallen: according to some surveys, from about 50 per cent a decade ago to about 20 per cent now. Though I regret the end of free movement with the EU countries, it at least has the consequence that the UK can control immigration. That shouldn’t mean limiting it; on the contrary, it should allow us to open our borders to necessary workers, and the best talent from anywhere in the world.

The current population of Hong Kong, one of the wealthiest and healthiest on the planet, looks a particularly attractive prospect. But it’s no accident that a lump of rock in the Pearl River Delta, with no advantages other than a good natural harbour, should have become so successful.

Hong Kong exists because of trade. Any place without natural resources (and Hong Kong scarcely even has water) can only survive through trade. As Tai-Pan, James Clavell’s fictionalised version of its origins, depicts it, that was initially smuggling, piracy, tea and opium.

What really transformed Hong Kong, however, were the policies enacted by Sir John Cowperthwaite, the Scot who was the colony’s Financial Secretary in the 1960s. He favoured low taxes, minimal regulation, free trade and the avoidance of government debt and, under his stewardship, Hong Kong became the closest thing the world has yet seen to a truly free market and one of the most prosperous places on earth. Between the start of his tenure and the handover, GDP per capita increased by a factor of 63.

What a boon its industrious and inventive population would be to our economy. But we should go further. There is the opportunity not only to accommodate the people of Hong Kong, but to replicate the conditions that made it so successful.

The obvious thing to do is to set up some new jurisdiction within the UK, but modelled on Cowperthwaite’s principles: the Isle of Man, Gibraltar and the Channel Islands are already precedents for such a distinction. A low-tax freeport and financial centre right on our doorstep would have obvious benefits for the rest of the country, while, if it were very lightly regulated, it would create housing and employment opportunities not just for immigrants, but for UK citizens.

It could potentially create exactly the sort of major, galvanising transformation of the economy that would lift us out of the recession that is certain to follow our current crisis, and to provide a shot in the arm and signal of intent that ought to follow our departure from the EU. The fact that the EU would hate the idea might also be a useful point in trade negotiations.

What’s more, if located in the right sort of area, it could realign the whole country, balancing the disproportionate dominance of London. Ideally, for trading reasons, it should be on the coast and near a major airport. For unionist reasons, but also in the interests of geographical spread of wealth from London towards the north and west in general, it would be particularly good if it were located in Scotland.

You wouldn’t need much space: Hong Kong island is only about 80 sq km, and the new free city could start off quite a bit smaller. A modest start would be to transform Millport into something more along the lines of Singapore, exempting it from UK and Scottish taxes. If that turns out to be so successful that it outgrows Great Cumbrae, the next step would be to annex Rothesay.

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