HC Deb 25 July 1969 vol 787 cc2356-71

5.3 p.m.

Mr. Evan Luard (Oxford)

My right hon. Friend the Minister of State, Foreign and Commonwealth Office, and I took part only two days ago in a similar debate and on a similar subject. This reflects the fact that the world today is becoming so closely inter-related and that many of the services which at one time were primarily performed by the national States are more and more being taken over by the international community. It is for this reason that, within two days, this House has had to debate a subject concerning the development of new forms of international organisation.

I will not say much about the background of this subject—the development of an international system of tele-communications satellites—because I know that it is well known to my right hon. Friend. It is sufficient to recall that the existing system was always intended to be an interim one. It was established about five years ago, when only about a dozen countries were even interested in the subject, and willing to take part in early negotiations, and when there was only one nation technically equipped to play a prominent part in the system.

The result of that was that until recently the membership of the whole organisation was extremely limited. But, more than that, the result was that the United States played a dominant rôle within the organisation, which was reflected in two separate ways. On the one hand, all the day-to-day management of the system was placed in the hands of COMSAT, basically a United States national organisation, although certain marginal steps have been taken recently to give it more of an international appearance.

Second, the United States was given a voting power within the I.C.S.C., which was the governing body, that would always have more than 50 per cent. of the votes. Although this was not alone sufficient for it to win every vote, it meant that in practice it could be fairly sure of being able to get its way on almost any major question that arose.

Third, there was another factor which perhaps to some extent arose from that, but which I do not want to go into in detail today, and that is that, in practice, a large majority of the contracts placed in connection with the system have been placed in the United States. This is a complex subject, because it is arguable—and I shall say a few words about this in a moment—that the United States would win more contracts if the system was made fully international, in the way that I am seeking to argue this afternoon, than if it remained in the hands of what is virtually a United States organisation, COMSAT which, in recent years, has bent over backwards to place contracts in this country and in other European countries, even if they were not fully competitive with tenders made in the United States. I say no more on that.

Mr. R. W. Brown (Shoreditch and Finsbury)

Will my hon. Friend consider the fact that few other countries, including our own, have shown any will to prepare themselves for this, and, therefore, when asked, "Have you tested this equipment in space?" have had to say "No", because of a lack of interest in it?

Mr. Luard

I agree with my hon. Friend. It is not merely a lack of interest, but a lack of technical knowledge to a considerable extent.

It is probably true to say that not sufficient interest has been shown by organisations in this country and elsewhere in Europe about the immense opportunities, except insofar as the ground stations are concerned, where we have played an im- portant rôle. This was one of the major defects of the present system, which required to be reconsidered when the whole system was re-examined this year.

Two other developments made this re-examination particularly necessary. One is simply the enormous technological advances during this period. In the early stages the system relied on satellites such as TELSTAR, which in these terms is somewhat primitive. But the satellite system now has already launched the INTELSAT 3 series of satellites, and will shortly be launching the INTELSAT 4 satellites, which will have about 10,000 channels each, and will provide an infinitely better service than has been available so far. The importance of this is. that the whole satellite system will, as a result, play an even more important part than it does today in the public communications system of the world.

The next factor is the impending development of a regional system of satellites which might, in one way or the other, encroach upon, or be incompatible with, the international system. The Soviet Union has announced its intention of establishing an inter-sputnik system, and it is encouraging that since then the Soviet Union and satellite countries in East Europe agreed to take part, at least as observers, in the recent discussions in Washington. The other development was the proposal of the French and the West Germans to develop a regional system in Europe, which again makes it all the more necessary to have an integrated international system which can co-ordinate the activities of these regional systems with each other.

There have already been some discussions in Washington, first of all, in a conference of all the members, including many new members who joined so as to be able to take part in the conference. Altogether, there were about 70 participants, and about 15 observers from East Europe. Since those discussions in February and March of this year, more recently there have been meetings of a preparatory committee in Washington. At the end of those meetings, it was decided to have further meetings of the preparatory committee in September and November and a reconvening of the conference as a whole in the early months of next year.

I want to suggest to my right hon. Friend some of the considerations which, I hope, will be in the minds of the Government in the forthcoming discussions. So far, although many detailed points have been thrashed out at some length, it cannot be said that there has as yet been universal agreement about the type of system to be established. My main point is that the system should be converted from what is almost a national one—and certainly one which is dominated by one or a very few nations—into a fully international one.

One way in which I would like to see this done is by the entire system being placed in some kind of relationship with the United Nations. The system as a whole might become one of the specialised agencies of the United Nations. After all, the United Nations already has agencies concerned primarily with communications matters, such as I.M.C.O. in shipping and I.C.A.O. in civil aviation. This organisation is in a somewhat different category from those, because they are primarily regulatory agencies, while this is an operational and commercial system which is selling services to the public. But I do not feel that, on this account alone, the idea of a specialised agency need or should be cast aside.

In any case, whether or not a specialised agency is set up, I suggest that the new system should be brought into some kind of relationship with I.T.U., the existing U.N. agency, which is primarily concerned with similar matters, and I would be interested to hear the views of my right hon. Friend on that possibility. I believe that the Swedish Government at one time were interested in establishing some relationship of this kind. If they revert to that proposal, I hope that we shall be prepared to support them, I believe, also, that the United Nations Secretariat has expressed interest in this system, both in the sense that it would hope that there was some relationship with the U.N. organisation as a whole, and because it would be glad of the opportunity to use channels on certain occasions, for example, in communications with peacekeeping forces in the field and for other similar purposes. However, I accept fully that whether or not this system is made into a U.N. agency or body of some kind is not of primary importance. It would be of symbolic importance as establishing the fully international character of the system. What really counts is whether the structure and organisation of the system is made fully international.

I want here to mention four points on which I hope that Her Majesty's Government will seek to achieve a fully international system. The first is the obvious question of access. Any system of this kind should be freely available to any nation, or any individual, or company of any nation who might wish to make use of it. I will not pursue that aspect, because, on the whole, it is fairly generally agreed.

The second point which I want to stress is the question of integration. If it is a fully international system and an effective international service, it is essential that all regional systems should be fully co-ordinated by it.

It was generally agreed at the recent discussions that any regional system should not be incompatible with the international system. This is, I suppose, something of a concession, but I am not sure that it goes far enough. For example, it does not make clear exactly what the relationship will be between the governing body of the new system and the regional organisations. It should be made clear that any State which becomes a member of the new system automatically enters into an obligation to see that any other system with which it is associated can be established only in conformity with the directives and wishes expressed by the governing body of the new Intelsat system.

The third point I wish to make in connection with the international character of the system is that it should have the legal status of other international organisations. This question was discussed at the recent meetings in Washington. Such a system should have a similar international status as the existing United Nations international agencies, including the privileges, immunities and tax status which those organisations have, and I hope that Her Majesty's Government will support this view.

The fourth and most difficult point in this connection concerns the structure of the new agency or system. This point has been discussed at the recent meetings in Washington, where there has been general agreement that there will be an assembly of some sort, a governing body and a managing body. The real question is the relationship between them, and I will discuss each in turn.

First, it is essential that there should be an assembly which is representative of all Governments and all member States of the organisation and which will meet—just as the assemblies of the existing specialised agencies meet—perhaps only once every two or three years but which will, on those occasions, be able to reach decisions on questions which primarily affect governments.

We are talking here of an organisation with links not only among Governments but among the so-called signatories; the communications organisations which must undertake the day-to-day operation of the system. Some have suggested there should be a second assembly to link these signatories. This is not, in my view, an important point. The need could be met as well if delegations to the assembly included representatives of these signatory organisations, with the purely technical matters being discussed among them at separate meetings. However, we should support the idea of an assembly of Governments which would, in a sense, be the ultimate decision-making body of the organisation.

Secondly, it is universally agreed that there must be a governing body which should be in session all or most of the time and which will make most of the day-to-day decisions of the organisation. It is also generally agreed that the voting power cannot continue to include a permanent majority of the United States. It is agreed that the voting power should be related to the investment of each member State and that this, in turn, should be related to the use made of the system by each member State.

But there is considerable disagreement about exactly how this should be interpreted, and this raises the problem of how far domestic usage should be included, especially domestc use between States such as Pakistan, which are territorially divided. There is also the question whether past, present or future use should primarily count in determining the voting power in the governing body.

It is clear that the voting power cannot simply be on a one nation one vote basis. There must be, as there is in the I.M.F. and the World Bank, a considerable dominance among those nations which give most to the system. But I want to give a warning on this.

The example of the I.A.E.A. shows the difficulties which can arise when there is a major difference in voting strength between the assembly and the governing body of an organisation. We may be well advised to seek a system in which member Governments, even if they were not large investors, had slightly larger voting power in the governing body if that were to help to avoid the periodic battles, such as those which have taken place in the I.A.E.A., between the assembly, the main body of the membership, and the governing body, which undertake management decisions.

I turn now to the question of management. It is generally accepted that management must be taken out of the hands of COMSAT. Differences have arisen over the interim period—how long it should be, what kind of structure there should be, what kind of relationship there should be between the governing body and the management. We should seek a system, I should have thought, under which there is some kind of director-general with a secretariat responsible to the governing body, even if many of the operational activities are still undertaken either by COMSAT itself or by some other organisations of this kind. This would serve to establish an international interest in the management decisions of the organisation, and might also serve to prevent friction over questions of contract.

Finally, I want to stess the importance of decisions on matters of this kind in the establishment of the sort of international community many of us wish to see. Services of this kind—above all, communications services—are public services which, for example, in the case of national States, have, for a very long time, often been taken into the hands of Governments and have been run by them in the public interest, for the public as a whole. It is important to ensure that, in an international community, something similar should be done. If, therefore, we wish to avoid the many conflicts which would otherwise inevitably arise between the various national organisations involved in these activities with the continuing shrinking of the globe, the objective of Her Majesty's Government should surely be the establishment of a fully international system of communications satellites, which may serve the interests of all nations and which will not be dominated by those nations which are most advanced and most technically equipped. I believe that, in this way, we shall best serve the interests of the international community as a whole.

5.18 p.m.

Mr. R. W. Brown (Shoreditch and Finsbury)

I congratulate my hon. Friend the Member for Oxford (Mr. Luard) on raising this subject, because it is vitally important to those of us who have been urging the Government and other European Governments for many years, virtually since 1964, when the interim agreement was first signed, to come to some definite decision as a European entity. One of the tragedies is that, although 1st January, 1970, is to be the operative date of the new arrangement, Europe has still not made up its mind.

Four items were discussed recently in COMSAT and in INTELSAT. I know that my right hon. Friend the Minister of State has played a considerable part and is anxious to get the right decision. But I am worried about the weakness of the Government's position on the question. We broadly support the Germans on the issue but want a much weaker arrangement. We want there to be a lot of "wishy-washy" areas where we can avoid something definite. I do not believe that an international communications system can operate like that. This is why I detected signs of annoyance in my hon. Friend about the interim arrangement.

I do not defend the American position on the Intelsat interim arrangement, but it would not have got off the ground if the Americans had not firmly said that they were to operate these satellites and insisted on a budget to provide the money and, by arranging for a built-in majority of 51 per cent., assured that the decisions were made and that the money was forthcoming.

It should not be believed that if we and the rest of the world, or the rest of the membership of the Intelsat interim agreement, take the view that we do not want to pay, the Americans will have to reach an agreement with us, for there is enough money privately subscribed in America to run the Intelsat on its own. The Americans do not need a subscription from the rest of the world to make it operate. If the rest of the world, particularly Europe, decides to set up a regional system—and I tried to get our Government and other European Governments to do that, because it is of fundamental importance, although we do not have the time today to go into the background of that argument—unless we are prepared to ensure that we operate exclusively through Intelsat our difficulty will clearly be how to carry out the sort of functions which will permit the exchange of pictures and provide the ability to see the enormous scientific achievement of this week.

I hope that my right hon. Friend will attempt to express the Government's view more positively than has hitherto been the case. I do not defend any continuation of the American position in which to some extent they are arguing that there should be no major reformation of the interim arrangements. They believe that only minor modifications are needed and that the arrangement will continue as for the last five years. I do not agree. But it is equally certain that if we say that that is not good enough, this country and Europe will have to decide to be more positive in our approach and not run away from the enormous capital investment which will be needed in the coming years.

My hon. Friend referred to INTELSAT 3 which has about 1,200 channels. INTELSAT 4 will have about 5,000 channels and INTELSAT 6 will have in the range of 10,000 channels. It is no good our saying that the money should be spent in some other way. If we are urging the Americans to greater reform as other members of the arrangement, we for our part must accept the commitment and appreciate that it will cost us large capital investment. Once one begins this system, one cannot stop half way.

We have to consider the implications for us. We have a heavy investment in telephone submarine cables and I can well understand the Post Office not being keen to see that investment, which has not yet been repaid, being overcome, so leaving the Post Office with a deficit because we have gone to the new system of satellite communications which means that the enormous investment in submarine cables is no longer needed.

I urge my right hon. Friend to try to be more positive. He is to represent us at the resumed conference on 18th November and I beg him to understand the tremendous opportunities which are open to the world by the use of communications satellites not only for televison and telephones, but in a whole range of uses including the attack on world poverty. He will be charged with the critical duty of trying to see the future and make the right decision. We need the global system and I believe that our country and Europe must be initially involved. I hope that when he comes to negotiate he will have great success on our behalf.

5.30 p.m.

The Minister of State, Foreign and Commonwealth Office (Mr. Frederick Mulley)

I should like to join my hon. Friend the Member for Shoreditch and Finsbury (Mr. R. W. Brown) in congratulating my hon. Friend the Member for Oxford (Mr. Luard) for raising this very important question of international arrangements for communication satellites. Both of my hon. Friends have taken a long and informed interest in this subject, and I want particularly to pay tribute to the work which my hon. Friend the Member for Shoreditch and Finsbury has done for a long time in the Council of Europe and W.E.U. I am sure that he would not expect me today to canvass all the controversial issues in which he has been involved with these organisations.

We are all extremely conscious of the role that satellite communications play in modern society. It is very appropriate that we should end this parliamentary week with a discussion on this subject. It is by means of satelllites that we have for some time been watching events in other parts of the world. This week we had the opportunity of witnessing in our own homes the historic moment of man's first step on the moon, at the very instant it happened.

We tend to take things so much for granted, but it is only a matter of five years that this system has been in existence. As my hon. Friend the Member for Oxford said, dependence on satellite communications is growing. The international telecommunications satellite consortium known as INTELSAT and the network of earth stations for our international telephone telex television data transmission and other services are bound to play an even more important role in future than they have in the last few years.

I know that the Postmaster-General would agree when I say that from the technical and operational viewpoint INTELSAT has been, and continues to be, an outstanding success. During the five years of its existence it has put into orbit three generations of satellites, and the system now provides global coverage, thus achieving the original objective of the consortium. A total of 17 States signed the Washington interim agreements in 1954 establishing INTELSAT, and they have now been joined by a further 51 countries. Many other States have expressed an interest in applying for membership.

This country was one of the founder members, and is the second largest user of the system after the United States. I agree with my hon. Friend the Member for Shoreditch and Finsbury that much of the credit for this achievement must go to the Americans. Were it not for the enlightened attitude and generosity of the United States Government the INTELSAT system would not have been possible. We would no. have had the opportunity of watching the moon landing, nor would we have had the opportunity of seeing live, election events on the other side of the world, cricket and football matches, the Mexico Games and all the rest. United States technology and ideas provided the starting point which led to the development of a purely world-wide system.

Similarly, we owe a debt of gratitude to COMSAT, the United States corporation, which acted as manager of the system. Whatever changes we may think necessary in future, and I agree that changes are desirable, we must ensure that nothing is done which may impair the technical and commercial viability of the system. As my hon. Friend the Member for Oxford said, the Washington agreements under which INTELSAT was established were interim agreements. It was envisaged that, following an initial trial period, member countries would come together to write a permanent arrangement for the organisation which would come into effect on 1st January, 1970. To this end, a conference was convened in Washington in February, 1969, and negotiations are to continue this year with a view to arriving at definitive arrangements as soon as possible.

It is now clear that because of the complexity of this task and the differences of view among member states, a new agreement will not be completed this year. But there is every hope that a settlement will be reached next year. Meanwhile, the interim arrangements will continue in force. It is an indication of the great importance that the United States Government attach to this subject and to these negotiations that they have appointed so distinguished a leader of the United States delegation as Governor Scranton. I had the pleasure and opportunity of discussing these matters with him when he was here in, I think, April.

In response to the request of my hon. Friends, I should like to focus on what the Government believe to be the main considerations in negotiating permanent arrangements for INTELSAT and I should like to take up some of the points raised by my hon. Friend the Member for Oxford. I do not think that he will find that we are totally unsympathetic to some of the points that he made.

The two principal objectives, which I believe are entirely compatible, are the continued economic and technical viability of the system and arrangements which permit full participation by all members in determining the policies of the organisation. In the Government's view, and, I think that I am right in saying, in the view of all INTELSAT members, some changes are necessary in the structure of the organisation if these two objectives are to be achieved. The temporary arrangements which were acceptable to a small group of nations in 1964 are not in every respect appropriate to a permanent organisation consisting of a very much larger number of members, some of which are developing their own satellite technology. Essen- tially we are trying to devise arrangements which are more democratic and which will not only satisfy INTELSAT'S existing members but encourage other States, including those of Eastern Europe to which my hon. Friend referred, to apply for membership or make use of the system.

Since the negotiations on definitive arrangements for INTELSAT are not being conducted in public, the House will understand if I do not describe in detail the many issues under consideration. But I think that I can and should give some details of the structural changes which we believe will contribute greatly to the well-being of the organisation. My hon. Friend the Member for Oxford will find that we have anticipated in our discussions a number of his very important points.

First, it appears to be the general wish of INTELSAT members that an assembly should be established in which all member States would be represented and in which they would all have an equal vote. I do not think that my hon. Friend mentioned the size of the vote in the assembly, but I do not think that he would dissent from that proposition. Broadly, the task of the assembly would be to review the past performance and future activities of the organisation and consider such issues as are appropriate to Governments rather than to communications entities.

Secondly, as my hon. Friend mentioned, there is a strong feeling that when the governing body which is to replace the interim committee and in which the commercial policy of the organisation is determined, no one member should occupy a predominant position. In 1964, because the United States were very large investors in the system, COMSAT, the United States representative in the interim committee, was accorded a vote of about 60 per cent. which has since, because of the admission of new members, fallen to 53 per cent.

While we subscribe to the view that member States' investment in the system and voting rights should reflect their use of the system, we believe that the permanent voting arrangements should be such that, at least, no one country should be able to impose its will or block decisions which command the support of the vast majority of members.

Thirdly—and this is, undoubtedly, the most difficult issue—the United Kingdom and the great majority of INTELSAT members do not consider it appropriate that the management of the world-wide system should be directly and formally in the hands of COMSAT, particularly as that entity is also the United States spokesman in the governing body and possesses by far the largest voting share.

The United States Communications Satellite Act, 1962, under which COMSAT was established, made provision for COMSAT to assume that duale rôle and this was inevitable and understandable in the infancy of INTELSAT and as an interim arrangement. In our view, however, it is not appropriate or acceptable that this arrangement should remain enshrined in a definitive agreement.

We believe that provision must be made for different arrangements which will ensure that the management body is the impartial servant of the governing body and, thus not only serves, but is seen to serve, the interests of all INTELSAT members. We believe that this would be practicable and attainable despite the difficulties which it may cause for the United States and consistent with the paramount need to protect the viability of the system.

Mr. R. W. Brown

In the governing body, does my right hon. Friend favour simply one man, one vote, or one man, one weighted vote according to investment or one man, one vote according to usage of the system?

Mr. Mulley

As I have said, in the assembly we accept the principle of equal votes, but I will not disguise the fact that the negotiation of the voting system in the governing body will be an extremely delicate and difficult business.

I do not think that at this early juncture in the negotiations, it would be helpful if I gave any further indication of our view. I am trying to indicate the kind of final solution to which we are working, but the detailed arrangements will be difficult to achieve. As the negotions are confidential, it would not be helpful for me to go further.

Mr. Luard

Will my right hon. Friend comment on my point that there have been other international organisations, such as in which there have been periodic conflicts between the governing body and the assembly because of excessive weighting? I am in favour of some weighting, which is inevitable, in the governing body, but will my right hon. Friend acknowledge that there must be careful consideration against weighting predominantly in favour of the most developed countries.

Mr. Mulley

I readily agree that we should not have excessive weighting, because the word "excessive" already prejudges the answer. The whole question is what would or would not be excessive. I accept that there is a difficulty.

I stress that to succeed, this must be a technically efficient and commercially viable organisation. If the Olympic Games were held but because of incompetence or disagreement in the body running the organisation we did not get the live performance that we now expect there would certainly be many debates or Questions on the subject in the House. We have, therefore, to work out a system which will give the full opportunity of all members to participate in the organisation, but, at the same time, we must have one which will be efficent and commercially viable. This is the heart of the difficulty and of the delicate negotiations which have been going on for a long time.

The negotiations have been conducted at the official level by a team of representatives of the several Departments concerned. They have been led by Mr. Killick, an Under-Secretary in the Foreign and Commonwealth Office, and I would like to pay tribute to the work which he and his colleagues have done and are doing.

In conclusion, I take up the final point of my hon. Friend the Member for Oxford about placing INTELSAT under United Nations control. INTELSAT is, in a sense, a peculiar animal. It is an international public service, fully conscious of its high responsibilities. At the same time, as I indicated in reply to his intervention, it has to be run on a sound and continuing commercial basis. We do not believe it is necessary, appropriate, or even practically possible that INTELSAT should be an organ of the United Nations.

Neither the United Nations nor the other member States of INTELSAT have suggested a change of this kind. What we do think important is that the permanent arrangements of INTELSAT are such that they fully conform with the principles enshrined in the United Nations Charter and in the General Assembly Resolution 1721, and they are, that the organisation should be open to all member States of the United Nations and of the United Nations agency, the International Telecommunication Union, that all States have access to the system without discrimination, and that all member States should be able to participate in determining the organisation's policy, which should reflect its fully international nature.

We confidently believe that a settlement on these lines will emerge from the current negotiations in Washington, in which the United Kingdom will continue to take an active part.

I should, therefore, like to thank my hon. Friends for their contributions and for raising this very important matter. I hope that they may take some satisfaction from the position which we have taken and from our determination to seek an efficient and genuinely international organisation for the future.