Commons Sitting of 10 November 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  COUNTY OF SOUTH GLAMORGAN BILL [Lords]
  Ordered,
  That so much of the Lords Message [6th November] as relates to the County of South Glamorgan Bill [Lords] be now considered.—[The Chairman of Ways and Means.]
  So much of the Lords Message considered accordingly.
  Resolved,
  That this House doth concur with the Lords in their Resolution.—[The Chairman of Ways and Means.]
  Message to the Lords to acquaint them therewith.

ORAL ANSWERS TO QUESTIONS
  ENERGY

    North Sea Oil
    Mr. Peter Morrisonasked the Secretary of State for Energy what is his present estimate of the yield of oil from the North Sea in 1976, 1977 and 1978; and how this compares with official estimates made two years previously.
    The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): The Government's estimates are indicated in the table on page 16 of the Brown Book. For the years mentioned, these represent a reduction as compared with the 1973 forecast because of the over-optimistic view then taken of the time necessary to bring fields into production.
    Mr. Morrison: Is the Secretary of State aware that, because of the Government's uncertainty over the terms of participation in the oilfields, development in the smaller oilfields is being held up and
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    that this is resulting in a run-down in the fabrication yards, the net result of which is bound to mean even greater numbers of unemployed?
    Mr. Benn: The problems to which the hon. Gentleman refers are real, but the truth is that the estimates made in 1973 did not take account of the difficulties facing the offshore operators and have nothing whatever to do with the other factors mentioned by the hon. Gentleman.
    Mr. Gordon Wilson: Is the Secretary of State aware that in the most recent World in Action poll it was shown that, based on that sample, two-thirds of the Scottish people wish all or most of Scottish oil resources to be used for the benefit of the Scottish people through the Scottish Assembly? Will the Secretary of State comment on the implications of that sample poll on energy policy, particularly in view of the fact that self-sufficiency in Scottish terms is likely to be achieved by the late spring? Does the right hon. Gentleman concede that his Department's policies will have to change to accord with that situation?
    Mr. Benn: I am responsible for many things but not for World in Action public opinion polls or the assertions of the hon. Gentleman. I think that everybody recognises that what we want is to get control of our own resources, as far as possible. The policy that we are putting forward, which I hope both Houses of Parliament will pass this week, will help us in that intention. The benefits in Scotland, in terms of the number of jobs and opportunities, quite apart from the benefits that will flow from the oil to the people in Scotland, will be real.
    Mr. Robert Hughes: Does my right hon. Friend accept that his recent agreement with the oil companies on a greater share of work being given to British companies has been well received throughout the country, and especially in Scotland? Will he confirm that if the Scottish National Party's disastrous policy of a low depletion rate for North Sea oil were to be followed the Government would have to tell the people of Scotland that it would mean a drastic loss of jobs? We want oil-assured jobs and prosperity for the whole country.
    Mr. Benn: I am grateful to my hon. Friend for his reference to the memorandum of understanding, although the

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    main credit for that must go to my hon. Friend the Under-Secretary.
    On my hon. Friend's general point, it is not for me to interpret Scottish opinion, but from my Scots half-blood connection, and considerable knowledge, I should be surprised if the Scottish people wanted to separate themselves from the people of England. I think that both peoples would be the sufferers were that course to be urged.
    Mr. Patrick Jenkin: Did not my hon. Friend the Member for City of Chester (Mr. Morrison) make a valid point, namely, that the uncertainty which the Government have created by their policy of participation and the setting up of the BNOC is leading directly to a loss of jobs in the fabrication yards in Scotland? Will the right hon. Gentleman have the grace to recognise that fact, even if he cannot do much about it?
    Mr. Benn: The right hon. Gentleman has done his best to create uncertainty, and, because he says that there is uncertainty, he asks me to believe that what he says is correct. It is not correct. We are remedying the betrayal of the national interests by the Conservative Government when they had responsibility for oil matters.
    Mr. Skeetasked the Secretary of State for Energy what discussions he had with the Japanese Government about Japanese participation in the development of the North Sea oilfield.
    Mr. Benn: In the course of a visit to Japan last month, I took the opportunity of meeting several members of the Japanese Government. My informal exchanges with them included North Sea oil, among other topics.
    Mr. Skeet: The Secretary of State has not disclosed very much. Did he make a deal with the Japanese that Japanese exploration could take some interest in the North Sea? Did he discuss arrangements under which the Japanese could import crude oil from the United Kingdom? Did he recruit Japanese capital from the banks of the chemical industry? Finally, what is the position of the National Iranian Oil Co. in all this?
    Mr. Benn: I think the hon. Gentleman knows that the next round of licences which has been forecast has not yet been
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    announced in detail. I made it clear to the Japanese that there would be no discrimination against foreign companies applying for licences in the next round. It would have been quite wrong for me to anticipate the discussions. But the Japanese are very interested in this matter, as the hon. Gentleman knows. If I remember the figures aright, 73 per cent. of all Japanese energy is oil, and 99·7 per cent. of the oil they use is imported. The Japanese estimate that they will need to double their consumption of oil over the next few years, so their interest in the North Sea is very strong. [Interruption.] I made it clear that we should be making available further blocks for licensing, and they expressed an interest in it. I told them that there would be no discrimination against them.
    Mr. Patrick Jenkin: Is the right hon. Gentleman aware that what he is saying now about Japanese investment in United Kingdom oil is in marked contrast to what his predecessor said on 4th November last year, when he roundly condemned my right hon. Friend the Member for Sidcup (Mr. Heath) because we had even so much as talked to the Japanese about investing? Will he disown his right hon. Friend, and confirm that there has been a change of Government policy in this matter?
    Mr. Benn: No, certainly not. Indeed, if the right hon. Gentleman looks in Hansard he will find that when I was Opposition spokesman I made exactly the same criticism—that we believed that the previous Government, by linking Japanese investment in industry generally with a pledge to the North Sea, were making a wrong decision. Therefore, what my right hon. Friend my predecessor as Secretary of State for Energy said was right, and the approach that we are making on this is correct, too. When the licensing round is opened, there will be no discrimination against those who wish to apply for licences.
    Mr. Canavanasked the Secretary of State for Energy what is the estimated flow of oil from the Forties Field over the next 12 months at the latest date for which the figure is available.
    The Under-Secretary of State for Energy (Mr. John Smith): BP estimates 1976 production from the Forties Field at

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    a daily average of about 200,000 barrels. The precise quantities will depend on progress with development drilling on all four platforms, only one of which has so far been commissioned.
    Mr. Canavan: Does my hon. Friend agree that the start of oil flow from the Forties Field is a tribute to the public enterprise of British Petroleum, a company which is 70 per cent. in public ownership? But did my hon. Friend notice that at the opening ceremony last Monday there were representatives of the Tory Party and the Scottish National Party? Does he not think it strange that such Right-wing opportunists should jump on the bandwagon in view of the fact that certain Tory extremists tried to wreck the British National Oil Corporation, and certain Scottish nationalist extremists attempted to blow up the Forties pipeline?
    Mr. Smith: I am sure that the whole House will agree that British Petroleum showed immense enterprise in bringing this field on to production. I am glad to say that I have no ministerial responsibility for those who were invited to the ceremony, since it was a matter for British Petroleum, nor have I ministerial responsibility for opportunism on the part of anybody.
    Mr. Henderson: Is the Under-Secretary aware that I was one of the Members who had the pleasure of seeing Scotland's oil come ashore a few days ago? Is he also aware, and can he point this out to his hon. Friends, for whom I am sure he has no ministerial responsibility, that within a few months the arrival of oil in Scotland from the Forties Field will make Scotland self-sufficient in oil products? Will he explain to us when we shall see the benefit to Scotland from this?
    Mr. Smith: There are considerable benefits flowing from the exploitation of North Sea oil. The hon. Gentleman, some of whose constituents are involved in this, already knows that and ought to pay credit to it. It is not Scottish oil. It is British oil. It belongs to the whole of the United Kingdom and its benefits should accrue to the whole of the United Kingdom. What I find surprising is the definite and embarrassed silence of the Scottish National Party when the Shetlands
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    put forward a claim that is as justified as that of Scotland.

    Anthracite
    Mr. Hal Millerasked the Secretary of State for Energy what action he proposes to take in view of the difficulties merchants have in obtaining supplies of anthracite; and if he will make a statement.
    The Under-Secretary of State for Energy (Mr. Alex Eadie): Generally, the supply of anthracite, which is a matter for the NCB and the coal trade, should be adequate, but if shortages occur in certain parts of the country, alternative solid fuels should be available.
    Production of anthracite in the United Kingdom has declined as a result mainly of delays in bringing new opencast sites into production; also, less anthracite than usual is being imported this year by the trade. To meet demand in conjunction with the coal trade it has taken special steps to import supplies, and, in addition, the Board is taking all the measures it can to increase production.
    Mr. Miller: Does the Minister understand that in the West Midlands there are not adequate supplies, and that, for instance, since July coal merchants in my constituency have never had more than 40 per cent. of the amount specied in their annual tonnage contracts? That figure refers to road-borne supplies. For rail-borne supplies, the figure is 25 per cent. How are the merchants to supply their customers? Will the Minister understand that they expect somebody in the Government to be responsible for this state of affairs? Will he further understand their natural indignation at being forced to pay a levy for a promotional campaign when they cannot even obtain supplies for their present customers?
    Mr. Eadie: I understand the hon. Gentleman's anxiety—it is an anxiety that is shared in Scotland and in the Midlands—but I hope that he will agree that, under special arrangements made by the NCB and the trade, anthracite is being imported from West Germany, South Africa and Vietnam. The tonnage is estimated to be sufficient to safeguard the home market. The figure is about 100,000 tons. I take note of what the hon. Gentleman has said, and I take note also of his strictures, but this is the

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    responsibility of the National Coal Board and the trade, and not of the Government.
    Mr. Patrick McNair-Wilson: Will the Minister assure us that he will now make representations to the Chairman of the National Coal Board to make sure that this promotional campaign makes clear to customers that alternative sources are available, and that they will be suitable for their uses? The Minister will know that at the moment there is a great deal of unease in the mining industry about the level of coal stocks. It cannot be a good thing to promote the use of solid fuel if the customer cannot get what he wants.
    Mr. Eadie: I am glad that the hon. Gentleman has raised that matter. There are plenty of other types of coal, plenty of other types of smokeless fuel, and plenty of other types of bituminous coal. I am seized of the point made by the hon. Gentleman, that the situation could be misunderstood when we are talking about anthracite. Nevertheless, I shall draw to the attention of the Chairman of the National Coal Board the points that the hon. Gentleman has raised.

    Harebrecks Estate, Watford (NCB Heaters)
    Mr. Raphael Tuckasked the Secretary of State for Energy what action he proposes to take over the deadlock between the National Coal Board and the Watford Borough Council relating to the 600 fires in the houses of the Harebrecks Estate, Watford, details of which have been given him by the honourable Member for Watford; and if he will make a statement.
    Mr. Eadie: The NCB informs me that it is still awaiting a response from the Watford Borough Council to the revised offer that the Board made at the meeting on 24th July that my hon. Friend chaired.
    Mr. Tuck: Does my hon. Friend appreciate that for the last two years the residents of about 800 homes in Watford have had not heat but noxious fumes pumped into their houses by the heaters which the National Coal Board has installed, and that 30 other areas are having similar difficulties with these heaters? Will he do his best to winkle Sir Derek
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    Ezra out of his "hard-heading" to talk to the Watford Borough Council so that some sensible suggestions can be made? For the benefit of hon. Members, the term "hard-heading" means—
    Mr. Speaker: Order. This is not the time for statements.
    Mr. Eadie: I have every sympathy with the point that my hon. Friend is advancing, but I do not entirely accept the implications of his question. I hope he will concede that the Board's offer was to deal with extreme urgency with any cases in which health was shown to be at risk. I hope that he will take cognisance of what I said in my answer to his Question. The Board has made an offer to the town council and it is for the town council to respond to that offer. I think my hon. Friend will agree that there is a contractual relationship between the Board and the town council, and that contractual relationship should be pursued. I am sure that, through his good offices, my hon. Friend would want to be helpful as he has been in the past.
    Mr. Tuck: It is the same offer as was made two and a half years ago.

    Waste Heat (Power Stations)
    Mr. Rostasked the Secretary of State for Energy when he expects his Department to complete its study on the utilisation of waste heat in power stations.
    Mr. Eadie: The utilisation of waste heat from power stations is one of the subjects being considered by a group under the chairmanship of my Chief Scientist, Dr. Marshall. The group's report is not expected for several months.
    Mr. Rost: Have any discussions taken place between the Under-Secretary's Department and the CEGB on the question whether any of the 48 older power stations which are in town centres and which are due to be closed would be suitable for conversion to sell waste heat as well as electricity? Clearly, that would consume the fuel more efficiently than even in the most modern power stations today.
    Mr. Eadie: The Department of Energy is seized of the point of trying to get better thermal efficiency from power stations. Hence the reason for the reply that

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    I gave to the hon. Member's Question. These power stations are, of course, old and unsuitable for conversion, because they are nearing the end of their lives. However, there is always the possibility of redeveloping the station sites for the new combined heat and power plants, and the electricity supply industry is actively considering this possibility. I hope that the hon. Gentleman will accept the answer in the spirit in which it is given.
    Mr. Carter-Jones: Does my hon. Friend accept that it is a great condemnation of both sides of the House that, within a mile of these premises, a very large block of flats has been heated for 40 years by the waste heat from Battersea power station? Does he realise that this sort of utilisation could apply to a substantial number of coal-fired power stations today, and would prolong their lives and provide greater economic advantage to the country?
    Mr. Eadie: In the right circumstances, the combined production of heat and power can lead to substantial energy savings. Indeed, there are many good examples of this in industry, as my hon. Friend has suggested. However, the Government believe that schemes for combined heat and power should be economically viable. That is why we have the working party examining this proposition, and it will no doubt report to the House in due course.

    High Temperature Reactor
    Mr. Palmerasked the Secretary of State for Energy if he will make a statement on the Government's policy for the future of the high temperature reactor.
    Mr. Benn: The high temperature reactor has no place at present in the forward programmes of our electricity boards. Nor do we have the resources to pursue its development, given the higher priority of the AGRs, the SGHWR and the fast reactor. I have discussed the future of the Dragon project with other EEC Energy Ministers and Monsieur Simonet.
    Mr. Palmer: Does my right hon. Friend agree that this technique is a most valuable fall-back position should something go wrong—and it could easily go wrong yet—with the fast-breeder reactor and that the Dragon project has been a
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    net currency earner for the country over a number of years? May I also urge upon my right hon. Friend that a decision now to abandon the high-temperature reactor is extremely short-sighted, and one which this country will greatly regret in the future?
    Mr. Benn: I appreciate what my hon. Friend says. He is very knowledgeable. I believe that any country is bound to settle upon a particular reactor system. We have settled—I think that this is widely understood—on the SGHWR and the fast-breeder to follow the AGRs. Of course, the experimental operation being carried out on Dragon is of value. We have been paying very heavily for it ourselves, and I have made an offer to our partners abroad—I have discussed it with Commissioners Guido Brunner and Simonet, in Brussels—which would give an opportunity for this facility to continue if they wish it so to do. I am criticised for putting too much emphasis upon nuclear resources as compared with other non-conventional methods of energy generation. I think it would be wrong to pursue the Dragon project with the object that my hon. Friend has in mind—that it is a stand-by—as the only reason.
    Mr. Skeet: Before the Secretary of State takes the wrong decision on the high-temperature reactor, will he consider this matter from the angle of process heat and consult the British Steel Corporation and the chemical industry first? Will he also contact KWU of Western Germany, which has advanced ideas on this subject?
    Mr. Benn: The point about process heat is one that had to be taken into account. I recognise its relevance, because it is clear that any successful system, as the HTR promises to be, would have those side effects. I discussed the matter very candidly with Herr Matthöfer when I was in Bonn, and it was as a result of representations made by the German Government that I was able to make a further offer to our partners, saying that if, by the end of November, they would agree that it should continue until the end of June, we would cancel the desecondment notices to the AEA staff. I think I have played quite fair by this, but the basic

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    decision is one that the Government think is right.
    Mr. Patrick Jenkin: Is it not the case that by giving that extremely short notice the Government have simply held a pistol to the head of their partners on the Dragon? Is not the real long-term danger that this country will simply not be trusted by our partners to be the host country for major technological projects of this kind? When one thinks of the future of the Joint European Torus project, will not this be extremely damaging for Britain's scientific future?
    Mr. Benn: No, certainly not. If the hon. Gentleman knew the circumstances he would not make such a charge. We originally offered that it should continue until April, and we made it clear that our own view was that we could not justify it ourselves. Then, when we were told that this involved short notice, no one accused us of putting a pistol to anyone's head. It was said, rather, that it was rather short notice. We offered to extend it to June, which provides six or nine months' notice, provided that our partners were ready to agree to this by the end of November—that is, it was in their hands to determine the continuation of the programme. Therefore, I do not believe that the charge of putting a pistol to anyone's head could be laid against us. Moreover, among other Treasuries, the German Treasury is now extremely rigid in its control over research and development, and all the countries of the Community are anxious to get the maximum benefit from research that they commission.
    Mr. Evelyn King: As this concerns my constituency, may I be allowed one supplementary question, Mr. Speaker?
    Mr. Speaker: All right.
    Mr. King: Is the Minister aware that there are already considerable economic difficulties in my constituency? Will he give an assurance that, whatever decision he may take in respect of this reactor, the future of Winfrith as a whole is in no way in danger?
    Mr. Benn: I am grateful to you, Mr. Speaker, for allowing the hon. Gentleman to ask his supplementary question. I had a meeting recently with the Atomic Energy Authority staff side and I discussed
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    this matter with its members in some detail. They did not raise the staff question themselves, because the Authority was able to assure me that there would be no forced redundancies arising from this ending of secondment of staff. If the hon. Gentleman has anxieties beyond that, perhaps we may discuss them. I have no reason to believe that the matter impacts upon the future of Winfrith.

    Fuel Production
    Mr. Hardyasked the Secretary of State for Energy what is his estimate of the total volume of annual production of oil, natural gas and coal in the United Kingdom in 1975 and in 1980.
    Mr. Benn: In 1975 the production of oil is estimated to be between 1 million and 2 million tons, and natural gas is expected to be approaching 4,000 million cu. ft. per day. Estimates of the future annual production of oil and natural gas are given in the Brown Book "Development of Oil and Gas Resources of the United Kingdom" published by the Department of Energy. The production of oil is estimated to rise to between 100 million and 130 million tons in 1980 and natural gas production is expected to rise to 5,000 million cu. ft. per day. In 1975, coal production is expected to be about 125 million tons. The future level of coal production is discussed in the "Coal Industry Examination" reports. It is expected that production will be about 135 million tons in 1980.
    Mr. Hardy: I am most grateful to my right hon. Friend for that important answer. Will he confirm that there is a strong possibility, even if tight energy conservation policies are pursued, that the United Kingdom can export substantial quantities of offshore oil, even if this is merely on the basis of an exchange for less valuable oil of an inferior quality?
    Mr. Benn: As our oil production builds up to self-sufficiency and beyond, it is envisaged that the different grades of oil that we shall need will permit us to enter into the world trade in oil. If that is the point that my hon. Friend has in mind, I can give him that assurance.

    Oil Rigs (Divers' Safety)
    Mr. Aitkenasked the Secretary of State for Energy if he is satisfied with

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    the training and safety requirements for divers employed on North Sea oil rigs.
    Mr. John Smith: The Training Services Agency of the Manpower Services Commission announced on 5th November that it has introduced a national training standard for basic air diving and underwater working. The Agency has already established the Underwater Training Centre at Loch Linnhe to provide basic, deep and specialist diving training. My Department has introduced the Offshore Installations (Diving Operations) Regulations 1974, which came into force on 1st January this year—the first offshore diving regulations in the world, which other countries are copying. We are monitoring the working of these Regualtions in the light of our knowledge and experience, and we think that they make a significant new step towards greater safety for offshore divers.
    Mr. Aitken: I welcome that reply, but does the Minister appreciate that, so far, about 24 divers have lost their lives in North Sea operations? That is an alarming proportion, considering that the total number of working divers is about 950. I welcome the moves that have been made, but does the Mnister accept that a great deal of concern is felt about the Government diving school which he mentioned, particularly because the salary for a diving instructor being offered by that school is about £5,000 a year, which is much less than can be earned by a diver on the North Sea oil rigs? Will he try to put matters right by having a higher salary level for people in those important jobs?
    Mr. Smith: I should point out to the hon. Gentleman, that the figure of 24 deaths is for both British and Norwegian waters. The figure for British waters, for all accidents on the United Kingdom Continental Shelf, is 17. This figure is constantly misrepresented in the Press, and I am glad to have this opportunity to correct it.
    On the detailed point about salary, there are special arrangements for the administration of the diving school which are not the responsibility of my Department, but I shall pass the hon. Gentleman's observations on to those concerned.
    Mr. Robert Hughes: Does my hon. Friend recollect the study prepared by the Scottish section of the British Medical
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    Association, which pointed out the great dangers facing divers and other workers in the offshore oil business? The steps so far taken have been welcomed, but will he ensure that a statement is made in due course on all the suggestions made in that report?
    Mr. Smith: I am glad to confirm that that study is under close consideration by my Department and by other Government Departments. If we think that something useful can be done as a result of those recommendations we shall certainly not hesitate to take action.
    I should point out to the House that there are already three emergency squads of doctors, one based in Aberdeen, one in Lerwick and the third in Great Yarmouth, which between them provide a 24-hour, seven-days-a-week coverage of diving emergencies.
    Under our offshore diving regulations we have a team of 70 Government-approved doctors available to sanction divers as being fit to dive. These doctors, most of whom are based in the United Kingdom, have all completed a Royal Naval course in diving medicine or have equivalent experience.
    Mr. Gray: Is the Minister aware that the fee for the 12-weeks' course at the diving school near Fort William is in excess of £2,000 and that, although a trained diver can command a substantial salary, the services of many suitable young men may be lost initially, due to difficulty in financing their early training? Will the Minister consider a loan scheme on a short-term basis?
    Mr. Smith: The administration of the diving school is not the direct responsibility of my Department. The Shenley Trust Ltd. is involved in that. I should like to look carefully at the hon. Gentleman's suggestion, as that might be a responsibility of diving companies in the first instance.
    Mr. Gordon Wilson: Would the Minister care to say what recent representations he has received from the diving companies about rescue and training facilities, and what outcome he might expect from any discussions that he has had with them?
    Mr. Smith: I am not quite sure what the hon. Gentleman has in mind. We

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    have received representations from diving companies on a number of matters. I suspect that the hon. Gentleman has a particular medical point in mind. If so, I shall be glad if he will table a specific Question or write to me direct.

    Atomic Energy Authority (Rossing Uranium Limited)
    Mr. Andrew F. Bennettasked the Secretary of State for Energy if he will make a statement about the Government's present views on the agreement between the United Kingdom Atomic Energy Authority and Rossing Uranium Limited signed in 1968, and subsequently amended.
    Mr. Benn: I have nothing to add to the answer given by my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs on 9th December 1974.—[Vol. 883, c. 23.]
    Mr. Bennett: Does the Secretary of State now feel that the views he expressed in a letter on "Apartheid Lessons" in 1973 are no longer relevant?
    Mr. Benn: It is true that in 1973 I said that the Labour Government would terminate that contract. That is on record.

    Offshore Oil
    Mr. Grayasked the Secretary of State for Energy what is his assessment of the potential yield of oil finds in the West Shetland, Celtic Sea and Channel areas, respectively.
    Mr. John Smith: Oil has not yet been discovered in any of these areas. Seismic survey work suggests that they are promising, but further drilling will be needed before we can make a worthwhile assessment of potential reserves, area by area.
    Mr. Gray: Does the Minister accept that these are extremely high-risk areas and are hardly suitable for an inexperienced company, such as the British National Oil Corporation? Will he ensure that in such circumstances public funds are not put at unnecessary risk when private finance is available?
    Mr. Smith: If the hon. Gentleman is suggesting that we should abandon our participation proposals, I confirm that we shall do no such thing. It is an essential
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    part of the Government's policy that in the next round of licensing we shall have majority State participation. The great pity is that this was not done in 1971 by the Conservative Government. It is impossible to write down these areas as the hon. Gentleman is trying to do in advance. He should bear in mind that in 1969 a leading oil company said that there was no oil in the northern North Sea.
    Mr. Robert Hughes: Will my hon. Friend say what exploration drilling has so far taken place in the Celtic Sea? If I am right in thinking that none has taken place, what action will be taken if the companies do not carry out their responsibilities to explore the blocks for which they have licences?
    Mr. Smith: During the past year no drilling has taken place in the Celtic Sea, one reason being the high rate of success east of the Shetlands, where companies achieved a success ratio of one in two. Companies are under specific licence obligations to complete a drilling schedule or surrender their licence. Both the Government and the companies will be anxious to see that those obligations are fulfilled, and over the next year I expect to see activity in these areas.
    Mr. Alexander Fletcherasked the Secretary of State for Energy how many oil rigs are currently engaged in the exploration of United Kingdom oilfields: how many were so engaged at the end of October 1974; and how many he expects to be engaged at the end of October 1975
    Mr. John Smith: Twenty-six mobile drilling rigs were operating on the United Kingdom Continental Shelf at the end of October 1975. This compares with 25 at the end of October 1974.
    Mr. Fletcher: Does the Minister consider that that is progress? Does he not feel that the need to explore for oil in the North Sea requires a great deal of urgency and incentive from the Government, rather than the arm-twisting over what is referred to as "voluntary" participation, which is contrary to public interest and is in danger of driving further exploration rigs away from this area?
    Mr. Smith: That hardly squares with the fact that the present level of drilling activity is the highest there has ever been

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    in the North Sea. Indeed, our prediction for this year was 30, and the average is likely to be 28, so it was a reasonably accurate prediction. I take this opportunity of challenging the right hon. Member for Wanstead and Woodford (Mr. Jenkin), who, in recent articles, has suggested that the Government predicted an average rig year's activity of 40 for this year. That is quite untrue, and is a misinterpretation of the statistics.
    Mr. James Lamond: Will my hon. Friend remember that no matter how many oil drilling rigs there are in the North Sea, there is a limit to the amount of oil there? Therefore, will he sound a warning to the Scots who are pinning all their faith on the policy of the Scottish National Party, which suggests that Scottish oil, as it calls it, will solve all Scotland's problems? In fact, the limit of this oil will be reached in, possibly, 30 years from now.
    Mr. Smith: I think it is impossible to come to precise conclusions about the amount of oil there is, or how long it will last. I certainly agree with my hon Friend that it would be the height of folly to try to float off some sort of independent State upon a commodity which is finite and very much subject to price changes.

    Coal Exports
    Mr. Hannamasked the Secretary of State for Energy how Great Britain's exports of coal in 1975 compare with exports in the last five years; and whether he is satisfied that Great Britain is sufficiently exploiting its coal resources.
    Mr. Eadie: Exports of coal and coal products in 1975 are expected to be well above the average for the previous five years. The industry's Plan for Coal, involving expenditure of about £1,400 million at 1974 prices over the next 10 years, represents the maximum development of the country's coal reserves that we think is feasible, but the NCB is continuing with an active programme of exploration.
    Mr. Hannam: I ask the Minister to give the actual figures for the increase in exports. It does not help very much if we do not get them. Does he agree that countries such as Poland and the United States are increasing their production
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    and exports of coal quite dramatically but that we have not achieved the same improvement? Does he also agree that increased productivity in the coal industry could result in the industry's becoming a major exporter? What are the Government doing to achieve the kind of productivity increases that we were led to expect would result from the large pay increases of the past two years?
    Mr. Eadie: As the hon. Gentleman will probably have noticed, for the past three weekends I have been devoting some time to the question how we can build up an export market for the future. The economies of other countries are undergoing a depression. However, as the hon. Gentleman wanted figures, I can say that 90 per cent. of our coal trade is with the EEC. In 1974–75 it was valued at £60 million. Further, the EEC has predicted that in the next decade there should be an expansion in coal exports of about 20 million tons.
    Mr. Ioan Evans: Does my hon. Friend realise that there is deep concern in the South Wales coalfields at the fact that large coal stocks are being built up there? When one hears that coal is being imported there is anxiety, which might well affect productivity in the mines. Will my hon. Friend consult the NCB with a view to there being a drive to export the coal being produced? It could make a major contribution to the balance of payments.
    Mr. Eadie: That is precisely what I have been doing over the past two or three weekends. My right hon. Friend and I are meeting the National Union of Mineworkers this week to discuss some of these problems. Imports of coal are on short-term contracts, and when those contracts expire it is unlikely that we shall import any more coal.
    Mr. Patrick McNair-Wilson: Is the Minister aware that the Opposition congratulate him on what he is doing to encourage exports but that in the EEC 30 per cent. of all the imported coal comes from behind the Iron Curtain? We, as members of that organisation, ought to start using our elbows to see whether we can sell more of our coal in Europe rather than rely on the Russians and the Poles.
    Mr. Eadie: I could not agree more with the hon. Gentleman. That is the message I have been giving to the mining industry for a considerable time. I believe that there is capacity, not only in Europe but in the rest of the world, for exporting coal, and I hope that the mining industry and the National Coal Board see that potential, particularly when the world starts its upturn in economic activity.

    Electricity Prices
    Mr. Neubertasked the Secretary of State for Energy what discussions he has had with the Electricity Council, social security and welfare organisations about the hardship faced by consumers this winter as a result of increased fuel bills.
    Mr. Benn: I recently met the Electricity Council, when it described to me its plans for helping consumers who may be in difficulties during the coming winter. I have written to all hon. Members on this subject.
    Mr. Neubert: Has the right hon. Gentleman read the most recent report of the Price Commission—in particular, paragraph 2(9), which states that not only prices but, more significantly, costs in the nationalised industries are rising much faster than in the private industries? Is it not clear that, whatever steps he takes to relieve individual hardship, consumers are getting a much poorer deal from nationalised industries for their money?
    Mr. Benn: The nationalised industries undoubtedly have got into difficulties because of the long period of restraint on prices imposed upon them. The Question, as I understood it, was about the problems of hardship that might follow from increasing tariffs over the winter. On that point, I am anxious to see that the matter is handled with the greatest possible sensitivity, and I have reason to believe that the fuel authorities will do so.
    Mr. Mike Thomas: What part does my right hon. Friend expect the electricity, gas and coal industries to play in the discussions with the Secretary of State for Prices and Consumer Protection on the new price restraint package? What progress is being made in his departmental inquiry into tariff structures in the electricity and gas industries?
    Mr. Benn: Discussions are in progress over a very wide range of issues, including the rôle of the Department of Health and Social Security and social benefits. In the discussions that we are holding about energy tariffs and the inquiries we have made into them, Ministers are very deeply involved, and I cannot say more at the moment.
    Mr. Hordern: If the initiative of the Secretary of State for Prices and Consumer Protection to restrain prices by 5 per cent. in the coming year is to be carried out, how is the coal industry to meet its target of earning a proper return on its sales and assets?
    Mr. Benn: I do not want to ask the hon. Gentleman simply to await what the Secretary of State for Prices and Consumer Protection will be saying about that, but obviously the implication, for the energy industries, of proposals of the general character that she has mentioned has been the subject of discussion. We have in mind the move towards economic pricing, as has been made clear by the Government.
    Mr. George Rodgers: Will my right hon. Friend refute the suggestion that has been made in some quarters of the electricity supply organisation that gas prices should rise to the level charged by the electricity authorities in order to provide a common layer of charges?
    Mr. Benn: There is a competitive element in fuel prices, and the argument has been put that gas is underpriced, but this is not a view that I have felt would justify an increase in prices beyond that authorised by the Price Commission.

    Conservation
    Mr. Michael McNair-Wilsonasked the Secretary of State for Energy what is his Department's most up-to-date estimate of fuel saving as a result of the "Save It" advertising campaign.
    Mr. Corbettasked the Secretary of State for Energy whether he is satisfied with the progress of Her Majesty's Government's "Save It" campaign; and if he will make a statement.
    Mr. Eadie: It is obviously not possible to assess precisely the energy savings achieved by the "Save It" advertising

    913
    campaign, which is only one of a number of factors affecting total energy consumption. However, I am satisfied that it is playing a valuable part in changing attitudes towards the use of energy and encouraging its more efficient and economic use.
    Mr. McNair-Wilson: Why has so little of the campaign been beamed at the motorist? As it is now nearly a year since the Minister introduced the package, can the hon. Gentleman say what effect the speed limits have had in reducing our imports of motor fuel?
    Mr. Eadie: I am pleased to give the hon. Gentleman information about this matter. It is one of a number of factors affecting energy consumption. It is impossible to isolate or quantify the effects. However, motor spirit deliveries in August fell by nearly 7 per cent. compared with the previous August, despite the good weather.
    Mr. Corbett: Does my hon. Friend accept that one of the major values of the "Save It" advertising campaign has been in giving practical advice on small ways in which consumers can save energy? Will he therefore consider a Christmas edition of that advertisement?
    Mr. Eadie: I have said repeatedly from the Dispatch Box that we are not proud concerning ideas for conservation and saving. We shall consider my hon. Friend's suggestion.
    Mr. Rost: When will the Government follow their advertising campaign with a longer-term strategy, with a longer-term target and with a proper budget, and adopt some of the recommendations of the Select Committee on Science and Technology on energy conservation?
    Mr. Eadie: I fully understand the point made by the hon. Gentleman. We are giving consideration to the Committee's report. No doubt my right hon. Friend will announce to the House, in due time, his considered view.
    Dr. Edmund Marshall: In view of the effect of the "Save It" campaign on the demand for electricity and the levels of employment in the electricity supply industry, will the Government maintain close contact with representatives of the
    914
    industry, to minimise any employment difficulties that may arise?
    Mr. Eadie: My hon. Friend has already made the employment position clear to people associated with the industry. We are aware of what can be described as short-term considerations, but, in general, energy conservation must be a long-term strategy and that is what the Government intend to pursue.
    Sir Anthony Royle: Is the Minister aware that the 50 mph limit on main roads is increasingly being ignored? What consultations is he having with his hon. Friends who are responsible for transport with a view to lifting this speed limit, which is now totally out of date?
    Mr. Eadie: We do not intend to abandon these measures. The hon. Gentleman is suggesting that the law is being broken by drivers. I was able to inform his hon. Friend of the substantial savings and reduction in the consumption of motor spirit, which leads us to believe—I hope he will agree—that most drivers are law-abiding people.

    Power Stations
    Miss Fookesasked the Secretary of State for Energy what is his policy regarding the building of new power stations using oil, in the light of the increased costs of oil being imposed by OPEC.
    Mr. Eadie: The increased costs of oil will be fully taken into account when next we are considering the building of a fossil-fired power station.
    Miss Fookes: Does the Minister agree that that does not get us very much further? Could we not have a more positive statement of policy? Would it not be better to say here and now that the cost of oil and the need to preserve it demand that no more oil-fired power stations be built?
    Mr. Eadie: I think that many hon. Members will have great sympathy with what the hon. Lady has said. She knows my views in relation to the ideas which she is putting forward. However, she must agree that in the past one of the great problems when the House was trying to wrestle with energy policy and forecasts was that hon. Members became ultra-dogmatic in their approach.

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    Therefore, although there are many hon. Members who will agree with what she is saying, I think she must also agree that one must not be too dogmatic about the approach that one will take, bearing in mind the wide choice of indigenous energy resources in this country.

    Coal Stocks
    Mr. Patrick McNair-Wilsonasked the Secretary of State for Energy if he is satisfied that coal stocks are sufficient to meet all winter demands.
    Mr. Eadie: Coal stocks, together with coal production at its current level, should be sufficient to meet winter demand. But in difficult winter conditions transport might present a problem.
    Mr. McNair-Wilson: Does not the Minister agree that this good position for stocks, on which we congratulate him, is more a result of falling demand than of increased productivity, which is now worryingly low and 3 per cent. down on what it was last year? What action do the Government and the board intend to take to try to get productivity increased?
    Mr. Eadie: I do not think that I should hide from the House the fact that there is a decreasing demand for coal in keeping with the downturn in worldwide economic activity. Nevertheless, as the hon. Genleman has suggesed, we are very glad that we have the stocks. The hon. Gentleman will also be glad that productivity has undergone a bit of a revival during the past week or two, and one hopes that this will continue. Lastly, the hon. Gentleman will be glad to hear me reaffirm that my right hon. Friend and I will be meeting the National Union of Mineworkers this week to discuss all problems attendant on the mining industry.

  OVERSEAS DEVELOPMENT

    European Community Aid
    Mr. Hurdasked the Minister for Overseas Development whether he will make a further statement on his discussions with his EEC colleagues on aid from the Community to Commonwealth countries in South Asia.
    Mr. Corbettasked the Minister for Overseas Development what progress he has made in encouraging the European Economic Community to improve its financial aid to non-associated developing countries to assist in raising food output.
    The Minister for Overseas Development (Mr. Reg Prentice): Since my reply to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) on 15th October—[Vol. 897, c. 710–11.]—a modest 3·5 million units of account aid programme has been agreed to help promote the exports of the non-associated developing countries in 1976. The Council of Ministers, on 13th October, failed to reach agreement on a programme of financial aid to non-associated developing countries that would have assisted these countries in increasing their food production. Discussion is continuing about the possibility of a Community contribution to the International Fund for Agricultural Development (IFAD).
    Mr. Hurd: Does the Minister recognise the connection between this and other Community matters? If the Foreign Secretary persists in dragging his feet on a Community approach to such matters as energy, the energy conference and direct elections, does it not make the right hon. Gentleman's position much weaker when he is trying to argue for a Community approach to this subject, where a Community approach happens to suit our national interest?
    Mr. Prentice: No, Sir. I see no logical connecton between the two. At the Council of Ministers on 13th October, the argument to which the hon. Member refers was not used against me or against the other countries which were supporting the Commission's proposal for aid to non-associates.
    Mr. Corbett: Does my right hon. Friend accept that it is a matter of deep regret that, 14 or 15 months after making the original general commitment, the Council of Ministers has still not found it possible to carry out this pledge of extra aid for the non-associated territories? I note the Secretary of State's pledge not to accept "Non" or "Nein" for an answer, but is my right hon. Friend able to say when he expects to get "Oui" or "Ja" out of the Council?
    Mr. Prentice: I certainly agree that it is a matter for regret, which was expressed on both sides of the House in the debate we had on Friday. I hope that the unanimity of parliamentary opinion here will be noted in other European countries. Certainly, I hope to return to this matter as early as possible, and I hope to see another meeting of the Council of Development Ministers as early as possible. Meanwhile, we shall use other methods to try to persuade them to a different point of view. As to whether I accept "Nein" for an answer, I am having a meeting with my German opposite number the week after next.
    Mr. Michael Marshall: Does the right hon. Gentleman accept that those of us, on both sides of the House, who returned from India today from the Commonwealth Parliamentary Association conference were once more forcibly reminded of the particular problems of India, Bangladesh and Sri Lanka, following the increased energy costs. Will the right hon. Gentleman say a little more about what he is doing personally within the EEC context to try to bring a sharper focus to the EEC approach in these areas?
    Mr. Prentice: Yes, Sir. The main reason why Britain and some other European countries are pressing for a wider aid programme from the Community for the present non-associates is our concern with the situation in Southern Asia, and in India in particular. India is an under-aided country compared with other aid recipients throughout the world. More should be done for India, and, in particular, the Community should have an aid programme there.
    Mr. Spearing: Recalling that one of the arguments used for entering the European Community was that of giving greater aid to the Third World, does not my right hon. Friend think it possible that, because the general system of preferences of the EEC is now inferior to those which we gave to the South-East Asian nations, the continued refusal of the EEC to take action on its commitment could mean that they are now worse off vis-à-vis this country in terms of aid?
    Mr. Prentice: The system of preferences is a matter which is being pursued. As my hon. Friend knows, it is one for
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    my right hon. Friend the Secretary of State for Trade.
    Regarding the aid programme for India and other countries, many hon. Members said in the debate on Friday that they had campaigned for continued British membership of the EEC on the assumption that it would be outward-looking in such matters as the one we are discussing, and this is regarded by many hon. Members as a test case.

European Community Development Ministers
Mr. Russell Johnston37. Mr. Russell Johnston asked the Minister for Overseas Development when he next expects to meet EEC Overseas Development Ministers.
Mr. Rathbone40. Mr. Rathbone asked the Minister for Overseas Development what consultations he has had with other EEC Overseas Development Ministers prior to the six-Power meetings to be held in France later this week.
Mr. Prentice: No decision has yet been taken on the date of the next meeting of the Development Council, and there have been no consultations between EEC Development Ministers specifically to prepare for the economic summit meeting. But relations with developing countries are one of the items on the agenda for the summit, and many of the issues arising have at various times been discussed by EEC Development Ministers or Foreign Ministers.
Mr. Johnston: Does the Minister agree, notwithstanding the Written Answer to my right hon. Friend the Leader of the Liberal Party by the Prime Minister on 13th October, welcoming the Kissinger proposals at the World Food Conference, that those proposals have been undermined by the USSR grain deal, which to many of us ran totally contrary to the ethos of the Rome Conference? Will he say what attitude to the follow-up to Rome he will recommend to his Community colleagues?
Mr. Prentice: I think that the follow-up to the World Food Conference has been disappointing in many ways, although one of the most important initiatives was taken at the World Food Council in June, when my hon. Friend the Parliamentary Secretary announced a considerable extension of British fertiliser

919
aid. That initiative gave a lead to other countries.
I shall be attending the FAO conference later this week, and I hope to draw attention to the urgency of a much more comprehensive follow-up to the World Food Conference.
Mr. Rathbone: Is the Minister aware that many hon. Members will be concerned at his statement that there has not been a special meeting between himself and his colleagues prior to the meetings in France later this week? It seems to show a lack of awareness that at those meetings broad direction will be established over the attitude and direction for help to the developing world from the industrialised world.
Therefore, can the Minister reassure the House on three specific points: first, that the United Kingdom will continue to press for better understanding of those aspirations; secondly, that the United Kingdom Government will press, in conjunction with European Community countries, to continue better efforts, activities and thrust to meet those aspirations; and, thirdly, that the United Kingdom will not jeopardise the co-operative ventures such as those to which we now aspire in the EEC through lack of cooperation on other fronts, particularly on energy policy?
Mr. Prentice: I dealt earlier with the last point.
Next week's summit meeting will be attended by the Prime Minister, the Foreign Secretary and the Chancellor of the Exchequer, together with their opposite numbers from the other five countries. That represents a wide range of policy interests. I cannot anticipate in detail what my right hon. Friends will be saying, but I can assure the House that a good deal of attention will be given to the problems of the developing world, to its trade problems, to the commodity issue and to the flow of development assistance as part of the civilised relationship between countries.
Mr. Ioan Evans: Will my right hon. Friend consider discussing with the EEC Development Ministers the possibility of disposing of some of the huge food surpluses which are building up in Europe? Is it not a tragedy, with world-wide poverty and people dying of starvation,
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that we should have dried milk mountains and that now mountains of apples are being ploughed into the fields in France?
Mr. Prentice: This matter has been discussed. A Community food aid programme was discussed at the Council of Ministers on 13th October. The British Government and others were prepared to press for a larger programme but, unfortunately, that was not generally agreed.

INTERNATIONAL MONETARY FUND BORROWINGS
Sir G. Howe (by Private Notice)Sir G. Howe (by Private Notice) asked the Chancellor of the Exchequer whether he will make a statement about the further borrowing arrangements announced on Friday and about the conditions on which these sums have been made available.
The Chancellor of the Exchequer (Mr. Denis Healey): I have informed the Managing Director of the International Monetary Fund that the United Kingdom wishes to apply for a drawing of SDR 1,000 million—about £575 million—under the 1975 oil facility and for facilities up to and including the first credit tranche of normal IMF drawings, amounting effectively to a further SDR 700 million—about £400 million. Drawings are not expected until early next year.
The decision has been taken at this time because, in relation to the 1975 oil facility, it was essential for the International Monetary Fund to know now what United Kingdom application would be made, in order to plan disposition of the remaining resources of the facility.
The terms and conditions will be those normal for oil facility and first credit tranche drawings. Money drawn under the oil facility is repayable after between three and seven years and carries an average interest rate of about 7¾ per cent. Drawings on the first credit tranche are repayable after between three and five years, and the interest rate varies from 4 per cent. to 6 per cent. over time.
The Fund will require to be satisfied that United Kingdom policies are likely to achieve medium-term recovery of the balance of payments. I am confident that our existing policies will do this. [Interruption.] And so they will. In addition, in

921
respect of the oil facility, I shall be required to state United Kingdom policies in the field of conservation and new production of energy, and to undertake, in accordance with previous international agreements and pledges to avoid "beggar-my-neighbour" policies, to refrain from introducing any new, or intensifying any existing, restrictions on trade or payments without prior consultation with the Fund.
We have seen a substantial recovery in our balance of payments between last year and this year, but a deficit must be expected to continue for some time. We have used a variety of channels to finance it so far and shall continue to do so. The IMF oil facility, which I take some pride in having helped to establish, was designed as a recycling mechanism which would assist countries with substantial deficits wholly or largely due to increased costs of their oil imports. The United Kingdom would be in substantial surplus this year were it not for the recent increase in oil prices, and we are also covering a significant part of the increased cost of our oil imports. I am sure that it will be widely recognised as appropriate that the United Kingdom should itself now call on this facility, which will be an important supplement to other financing available to us.
Sir G. Howe: Does the Chancellor appreciate that the whole House will be understandably concerned about the implications for the Government's entire economic strategy of what he has had to say, since the sum being made available will meet only about six months' deficit on current trends? Does his statement mean that the Government have now given firm undertakings not to introduce import controls, either general or selective?
Are we right to understand that any further borrowing by the Government from the IMF will require the delivery of a letter of intent? Has the Chancellor had to give to the IMF his estimate of the public sector borrowing requirement for the current year? If so, will he now tell the House exactly what estimate he has given? If the present "Rake's Progress "—to use the Chancellor's phrase from his Budget Statement—continues far beyond the limits set out in that Budget Statement, when does the right hon. Gentleman
922
think there will be nothing else left to borrow?
Mr. Healey: The right hon. and learned Gentleman made some remarks about the size of our deficit. He will recall that before the oil price increase hit us the deficit was running at a rate of £4,000 million a year in the last three months when his party was in power. I should have thought that he, as an Englishman, would have taken some pride in the fact that not only have we wiped out the whole of that deficit on our non-oil trade but we have also, in the current year, covered a third of that part of the deficit resulting from the increase in oil prices.
On the second point regarding import controls, this borrowing does not rule out any import controls, but it does require consultation with the Fund if such controls are proposed.
On the right hon. and learned Gentleman's third question, it is, of course, the case that if the Government wished to withdraw further credit tranches they would be required to submit a letter of intent covering detailed quarterly targets for different aspects of economic performance, but such a letter is not required on this occasion and there is no monitoring of Her Majesty's Government's policies by the IMF as a consequence of this drawing.
On the last question relating to the PSBR, I am satisfied, from the informal discussions that I have already had, that the expectations and intentions of the Government as to both PSBR and domestic credit expansion are consistent with medium-term balance of payments recovery, and that is the essential criterion for the proposed drawings.
Incidentally, in case this question is of interest to the House, I propose to make available to the House in due course the letters of application and the memorandum which I shall be submitting to the Fund.
Mr. Horam: Is my right hon. Friend aware that most people regard this as a prudent alternative to further depression of economic activity, but does he not think that the IMF facility world-wide may now be too small for the demands upon it, particularly from the less developed countries?

923
Does he think that the developed countries have done enough to reflate their economies, and thereby reduce their surpluses, to meet the critical situation of world liquidity?
Mr. Healey: On the first question, the IMF's facilities world-wide may, indeed, prove inadequate to meet all the requirements of some of the less developed countries. This is one reason why I asked for a drawing on the 1975 oil facility, which is substantially smaller than the United Kingdom would be entitled to under the rules governing drawings on this particular facility.
On the second question, it is well known that the Government are concerned about the steps so far taken by those countries which are capable of reflating their economies, and this will, of course, be a matter for discussion at the forthcoming summit meeting.
Mr. David Steel: Did the IMF share the right hon. Gentleman's confidence in the present policies of Her Majesty's Government? Can he say whether he indicated to the IMF that import controls were under consideration by the Government? If these loans are available without conditions at apparently lower rates of interest than borrowing elsewhere, why did the right hon. Gentleman not have recourse to these funds earlier?
Mr. Healey: On the first question, I have discussed the Government's policies informally with the managing director of the IMF and my officials have discussed them at lower levels. I, personally, believe that they will obtain the endorsement of the International Monetary Fund. I hope that if and when they do so we shall no longer have criticism of our policies from the Opposition benches.
On the question of import controls, of course I drew the attention of those with whom I had informal discussions to statements in this area which had been made by my right hon. Friends and myself.
Mr. Powell: Does the right hon. Gentleman recognise that these borrowings necessitate a corresponding deficit on this country's current account, and will he therefore refrain from referring to the deficit on current account as though
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it were somehow a reflection upon British industry and the British economy?
Mr. Healey: With great respect, I think it was the right hon. Gentleman's former right hon. and learned Friend, the Shadow Chancellor of the Exchequer, who made derogatory remarks about the performance of British industry in the balance of payments field. I myself drew attention to the fact that that performance has been remarkably good in the last 12 months and, as I say, we would now have a substantial surplus on our trade were it not for the increase in oil prices. We have already covered a substantial amount of the increase in oil prices. This is a startling contrast, if I may say so, with the record which the Conservative Government left us.
Mr. English: Since much of the country's present difficulties result from the inflationary policies of the previous Government, and since the adoption of those policies in relation to the money supply or deficits in the nationalised industries is incomprehensible save to speculators who made money out of them, will my right hon. Friend ask the consent of the Leader of the Opposition to reveal any personal dealings whereby, whether directly or indirectly, any member of the previous Cabinet made a capital gain under those policies?
Mr. Healey: I do not think that that is a matter for me.
Mr. Gordon Wilson: Will the Chancellor of the Exchequer, speaking as an Englishman, state where the money will come from for repayment of these borrowings? Secondly, will the right hon. Gentleman note the recent poll which showed that two-thirds of the Scottish people wanted most, if not all, of the oil revenues and, further, in terms of his own statement, will he give an assurance to the Scottish people that they will not be beggared by their English neighbours?
Mr. Healey: One the last question, I hope that the hon. Gentleman will draw the attention of the Scottish people to the fact that they are benefiting substantially from a higher level of public expenditure per head than the people of other parts of the United Kingdom, As I pointed out last Thursday, this is one reason why unemployment has not increased so much

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in Scotland as it has in other parts of the United Kingdom in recent months.
I note what the hon. Gentleman said about polls, and I shall be interested to hear at some time whether, in view of his obvious attachment to polls, he would support a referendum in Scotland on the question of devolution.
Mr. Tugendhat: Is the Chancellor aware that we note the lack of apparent interest by his friends in the Tribune Group, after their strong statement last week? Can the right hon. Gentleman assure us that he will not be making statements or revealing at party meetings information that he is not revealing here? Would he not agree that his borrowing from the IMF makes it all the more necessary that the priorities stated at Chequers should be the priorities of the Government and not those put forward in the Tribune Group's policy statement?
Mr. Healey: Tempting as it is to allow myself to be dragged into some sort of confrontation with some of my hon. Friends, I shall seek to resist the temptation. I give an assurance, of course, that I shall not reveal information outside this Chamber which I have not made available inside it. However, I do not think that the hon. Gentleman would expect me not to make any statement outside this Chamber to another group of hon. Members or non-Members of the House which I do not make inside the House.
Mr. Wellbeloved: Will the Chancellor not be misled by the apparent silence in some quarters on the benches behind him in respect of the strong body of opinion in the Parliamentary Labour Party in favour of the imposition of some selective import controls? Will he assure the House that in his discussions he has made it clear to the IMF that he may well be operating the consultative process within the foreseeable future?
Mr. Healey: I have learned over the years to give as much attention to the silences of my hon. Friends as to their words.
Mr. Amery: For the sake of the record, may I follow up the Chancellor's reply to the first of my right hon. and learned Friend's supplementary questions? The right hon. Gentleman referred to the deficit we were incurring, as he said,
926
before the oil war. Is he aware that the Treasury forecast in the month before the oil war was that we should be in balance by the end of 1974 or early 1975? As patriotic Englishmen we now rejoice in the fact that the deficit is down to £2 billion instead of £4 billion, but we are sorry that it has taken the present Government nine months to a year longer than the Treasury forecast.
Mr. Healey: I am not clear whether the right hon. Gentleman is asking me to comment on the accuracy of Treasury forecasts or on any other matter. I was referring in my remark to the public statement of the then Governor of the Bank of England in February, before the 1974 Election, to the effect that in the preceding few months our balance of payments deficit had been running at an annual rate of £4,000 million, and that this was before the increase in oil prices had had any significant effect on our current account.

NORTHERN IRELAND CONSTITUTIONAL CONVENTION
The Secretary of State for Northern Ireland (Mr. Merlyn Rees): I will, with permission, make a statement.
The Report of the Northern Ireland Constitutional Convention has now been transmitted to me by the Chairman. The Report will be published as soon as possible in the new Session of Parliament and will be laid in accordance with the requirements of the Northern Ireland Act.
The House will recall that the Convention was set up under the Act of 1974 for the specific purpose of
"considering what provision for the Government of Northern Ireland is likely to command the most widespread acceptance throughout the community there".
This was the sole task of the Convention. It was not a Parliament or an Assembly and, as a Convention, had no advisory or other functions in the governmental field. It was in the discharge of its statutory task that it transmitted its Report to me.
Under the provisions of the Act, the Convention is now dissolved, although there is a provision under which it may be recalled at any time within six months of the date on which the Report was submitted, which takes us to 7th May next

927
year. In answer to a Question on 31st October by my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) I announced that I had decided to exercise my discretion under the Act to continue to pay salaries to members of the Convention. Suitable allowances will also be paid. I regard it as essential that members of the Convention should continue to be available for further consultations on constitutional matters. I wish to make it clear again that the Convention is not—cannot be—an advisory body to me. No decision has been taken whether or not to recall it for its constitutional purposes.
The House will not expect me at this time to make any substantive comment on the Report. As will be seen when the Report is published, it deals with a number of fundamental issues affecting the future government of Northern Ireland. These include, for example, the form of that Government, its powers and functions, its legal authority, questions of constitutional rights and its relationship with Parliament, financial assistance and taxation and responsibility for law and order and the use of the Army.
Both the Government and this House will wish to consider these matters very carefully, and I also hope that the people of Northern Ireland will ponder upon them since they profoundly affect the future of Northern Ireland. It is important that Parliament should now have time to consider the Convention's Report so that when, at an appropriate moment, we come to debate these matters, we shall do so on the basis of considered views. Nevertheless, I should make it clear that the British Army is under the control of this Parliament only, and the sovereignty of the Queen in the Parliament of the United Kingdom rests also at Westminster.
There is no quick and easy solution to the problems of Northern Ireland, and my strong view is that everything we say and do should acknowledge this. Meanwhile, Northern Ireland will continue to be governed by, and from, this Parliament. It is in accordance with this principle that the Northern Ireland Act 1974 provides for all functions of government to be exercised by me, with the help of other ministerial colleagues. That is the
928
position until Parliament decides otherwise.
I should finally wish to take the opportunity—and I am sure that the whole House will join with me in this—of paying a warm tribute to the Chairman of the Convention, Sir Robert Lowry, and his staff, for the way in which he has guided the work of the Convention.
Mr. Neave: Will the right hon. Gentleman take it that we should like to join in the tribute that he has paid to the Chairman of the Convention, Sir Robert Lowry, for the way in which he has guided the work of the Convention, and to his staff.
We shall wish to study this Report when it becomes available to us, but is the right hon. Gentleman aware that his statement that the British Army is under the control of this Parliament only, and that sovereignty resides with the Queen in this Parliament, is undeniable and has the full support of the Opposition? Can he say when comments can be expected from the Government, when they will announce them on the Report, and in what form they will do so?
Mr. Rees: I am grateful for the hon. Gentleman's support of my strongly felt view about the Army, which some people do not understand. Sovereignty for the United Kingdom Parliament rests at Westminster and nowhere else. It is most important that that should be realised. The best place for me to give the considered view of the Government on the Report will be in the House of Commons at an appropriate time when we have had time to consider it.
Mr. Molyneaux: Does the Secretary of State agree that the question of the future structure of government for Northern Ireland, within the framework of the United Kingdom, cannot meaningfully be considered in isolation from the important forthcoming discussions on the problem of devolution within the United Kingdom as a whole?
Mr. Rees: I think it inevitable that, within the course of the next year, we shall be talking about devolution in a wider aspect, but I should like to make one point. I am well aware that Wales is different from Scotland, and that Scotland is different from Northern Ireland. When we talk about devolution, we are

929
talking about it in different places. The philosophy may be the same, but I think the hon. Gentleman will fully accept that Northern Ireland has problems different from those of Scotland.
Mr. Stallord: Will my right hon. Friend make the Report readily available to the House as soon as possible? Is he aware that there have been reports that included in the Convention Report is a detailed Bill with a lot of wide-ranging powers covering all aspects of future government for Northern Ireland? Are those reports true? If so, will he be presenting that Bill to this House, and when?
Mr. Rees: I have just received the Report. It is a matter now of printing it. I observe from the contents that a draft constitution Bill has been drawn up, and this will be available with the views of the Convention itself on a majority vote, plus the views of the other parties in the Convention. I confirm that there is a Bill, and it makes very interesting reading.
Mr. Beith: Does not the Secretary of State agree that the earliest possible printing of the text of the Convention's Report is desirable if there is not to be speculation based on incorrect or inadequate reports? Does not he further agree that he is right to make clear at this stage that anyone who supposes that, during the period when the Convention's Report is being considered, this House could be intimidated by violence against its Members or against the British public in general is sadly mistaken? That should be made absolutely clear now.
Mr. Rees: I think the message is getting through—it certainly has got through in Northern Ireland during the past five years—that the violence, the killing, the 1,500 dead, do not seem to have changed anybody's views and that they will not solve the problem of Northern Ireland. I readily support what the hon. Gentleman said. Bombing and killing, including the violence aimed at Members of this House, some of whom are present today, will have no effect at all—in fact, it will have the opposite effect on public opinion in this country.
The Report has been sent for printing. As soon as it emerges, I will present it.
Mr. Fitt: Can my right hon. Friend indicate when the House will have an opportunity to debate the Government's
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assessment of the Convention's Report? In the meantime, can he indicate to Convention members in Northern Ireland, many of whom were local parliamentarians under the old system, what opportunities will be afforded to them to continue to represent their constituents in so far as they are still regarded in Northern Ireland as being the elected representatives of the people?
Mr. Rees: It is not for me to say when the debate will be. Obviously, the Report must first be printed. It needs to be read carefully. I shall endeavour to talk to politicians in Northern Ireland and it would then be appropriate to have a debate in the House of Commons.
I must make it clear that, although I am happy that Convention members should write to me or my colleagues on issues in Northern Ireland, they are not constituency members in Northern Ireland. The 12 Members of Parliament for Northern Ireland are the ones to bring matters to this House, where they can achieve a desirable result or otherwise.
The Convention was formed for one sole purpose, and it is an important purpose. I want to see political discussions take place. For that reason, we are continuing to pay Convention members for the foreseeable future, but it would be wrong of me to derogate from the position of elected Members of Parliament to this House of Commons.

"SCOTTISH DAILY NEWS"
Mrs. Bain: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the crisis facing the Scottish Daily News".
The specific issue at stake is the likelihood of the total disappearance of this newspaper. Throughout the year various attempts have been made to ensure that the Scottish Daily News would continue. In April the Government gave £1·2 million to start a workers' co-operative, which has since then produced the Scottish Daily News. Despite difficulties, a circulation of 180,000 has been reached and advertising has trebled.
At the moment the crisis lies in the fact that the liquidators have moved into the

931
Scottish Daily News and have said that the edition of Saturday 8th November was the last edition. But the Scottish Daily News refuses to die, and today in the streets of Glasgow the workers were selling their own product, the Scottish Daily News emergency edition. The response given to the Scottish Daily News in Glasgow today is such that people were donating £5 for a copy. There is terrific public support in Scotland for the Scottish Daily News. The emergency situation is such that the workers are having to work in the Albion Street offices to ensure that no asset stripping occurs.
The importance, Mr. Speaker, lies in the fact that there is support from all political parties, from all quarters of the House and from the public in Scotland. A petition of 20,000 signatures was collected last week. We wish to see the continuation of democratic expression in the Press in Scotland, and the Government would, I am sure, be interested to read the leading article in the Scottish Daily News today which shows connivance between the Government and Chrysler. Another important aspect of this matter is that 531 people—
Mr. Speaker: Order. The hon. Lady is going a little far. She must convince me that I ought to give permission for a debate on this matter tomorrow or the day after, and she must not go into the merits of the case too much.
Mrs. Bain: Given that it is an emergency situation, Mr. Speaker, with 531 people being placed on the dole, with the virtual collapse of a newspaper which is important to the people of Scotland, it is important that the House should give a full debate to the subject in order that hon. Members from both sides of the House can put the case to the Government and the Government can then explain why they are unwilling to take immediate action to save this newspaper.
Mr. Speaker: The hon. Lady was courteous enough to give me ample notice of her intention to make an application to move the Adjournment of the House under Standing Order No. 9, in order that the failure of the Scottish Daily News, a matter of vital interest to Scotland, could be debated.
I want to make quite clear my rôle as Speaker in relation to such applications. I am not allowed by the Standing Order to give the reasons for my decision. Sometimes I should like to do so. My decision does not relate to the importance of the matter. It is simply a question of whether or not I think it appropriate to disrupt the business of the House already arranged. In this case, today there is a long-awaited foreign affairs debate and tomorrow there is what will be a very long day's work. In these circumstances I cannot, whatever the importance of the matter, agree to disrupt the business already arranged. I am afraid that I must reject the hon. Lady's application.

FOREIGN AFFAIRS
Motion made, and Question proposed, That this House do now adjourn.—[Mr. John Ellis.]
4.0 p.m.
The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan): It is right that Parliament should concentrate attention on domestic affairs, but not, I suggest, to the exclusion of foreign policy. Foreign policy, rightly directed and vigorously applied, can reinforce and aid our domestic policies. It is in that sense and in that way that I approach many of the problems that I have to deal with.
In thinking about what I would say to the House today, my mind went back over the years I have sat here and took account of the difference in attitude of hon. Members and perhaps of the country to Britain's rôle in the world. Thirty years ago, when I first came to the House, we were admittedly the third of the super-Powers—the Soviet Union, the United States and ourselves. We were there and were supposed to be one of the arbiters of the world. Britain could reach out her arm in conjunction with those other two. Members of Parliament would demand action from the Treasury Bench—from the Foreign Secretary as he stood here—and would expect Britain's word to carry throughout the world—and it did. As the post-war years went on, however, our strength relative to that of others weakened in economic terms, but the myth lingered after the strength had evaporated.
We learned by experience that what we had thought was the case was not so, but then the pendulum swung to the other extreme and, instead of regarding ourselves as being one of the arbiters of the world, we began to think—I noted this as I listened to hon. Members, and sometimes I may have fallen into the trap myself—that in a decade or so these same 50 million people had become a nation of little influence, that we were of small account, that we had no influence anywhere in the world and that we were disregarded. That is not so either.
Neither of the two extremes—the one current when I first came into the House and that which is now so commonplace—"trendy", I think, is the word today—
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is true. I agree that the transformation of the Empire into a Commonwealth with much looser ties has clearly affected our economic position. I agree that our inability to match the economic successes of others has weakened our authority, and today we should be far stronger in our influence in the world if we overcame the problems of inflation and unemployment.
I repeat, however, that I think it wrong for the House to concentrate its attention exclusively on domestic affairs. It seems to me that we have a job to do here, and it is one in which we should use our influence abroad and our position in the world to reinforce and support our domestic policy—and the other way round too. I believe, after 20 months of holding my present high office—one of the great offices—that we still retain a high place in the estimation of many other countries in the world.
Our constitution is widely admired, as is the Monarch who heads it, and we are regarded as a nation that understands world problems and has a balanced judgment in finding solutions. Only last week the country heard President Sadat asking that Britain should play a larger part in the settlement of the affairs of the Middle East, that we should play a more prominent rôle. He is the latest among others who have said much the same to me in connection with other parts of the world, though perhaps more privately than he did. Should Britain ignore these calls to play such part as she can? Certainly not. It is our responsibility and our privilege to perform this rôle within the limits of our strength and the advantages which confer a greater responsibility on us.
The fact that we are a permanent member of the Security Council confers great responsibilities and great power to influence the course of events. The fact that we are a senior member of the Commonwealth is in itself an important asset. We are also a new but important member of the European Community. It is in our national interest to play a rôle in world affairs. A vigorous and outward-looking foreign policy will, in my view, aid our domestic regeneration, and, because I believe that, I intend so far as I can to ensure that our policy should be outward-looking and vigorous. In so doing, I believe, we

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shall influence the way in which other nations regard us.
Mr. Frank Allaun: Naturally, we agree with the Foreign Secretary that Britain should play a part in helping to bring peace to the world, but surely our rôle is not that of arms supplier to the world, particularly to hot spots such as the Middle East. Some of us feel that the price for supplying arms to the Middle East, to either side, will be far higher than the slight income we may get from exporting a few arms.
Mr. Callaghan: I note what my hon. Friend says, but I should be grateful if hon. Members did not try to divert me from the theme that I am trying to develop. Although I understand a part of my hon. Friend's remarks, that does not enter into the essential point that I am trying to make.
If we can exercise a vigorous and outward-looking foreign policy in conjunction with other nations through our membership of the Community and of the Commonwealth, and through our position as a permanent member of the Security Council, this in itself will aid our own domestic position. It can create an atmosphere of confidence, and in some ways it is the intangible things that are missing from our national life at present. Our policy can help to create that atmosphere if it is exercised in the interests not only of Britain but of the world as a whole.
We must, of course, select the areas where we can be most effective. That includes Western Europe—the Community—but our influence must be wider than that of Europe. Clearly our position as a member of the Security Council means that we act on the world stage. There again, however, we must be selective, because we cannot be equally influential at all points.
Our influence must include the Commonwealth, which is itself changing from those first heady days of independence, when to some—not to all; certainly not to me—the Commonwealth seemed a piece of sentimental history. Now there is a new recognition that the members form a unique grouping capable of exercising great influence, as they have done during the past few months. The Commonwealth
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Conference in Jamaica was perhaps one of the most successful and constructive that has been held for many years.
Not only is the Commonwealth changing, but so also are power relationships throughout the world. The days when the United States was predominant have gone. That has been recognised, too, by the United States. Even that country recognises the limitations on its strength. Solutions today cannot be imposed by one Power, however mighty it may be. The problems of today, and the solutions for those problems, require the co-operation of many countries. Multilateral solutions on a regional and sometimes on a global basis are needed.
This is an opportunity for Britain. Here we are, a medium-sized Power that can be of service to the world by means of the inner core of our relations, European and Atlantic. Alongside that is our unique relationship with the Commonwealth. These advantages, in the changing world situation in which the United States itself is recognising that it cannot impose solutions, give us unique information. They give us the powers of interpretation, persuasion and negotiation if we use them.
I see Britain's rôle in the changing world as that of a bridge builder, a rôle which gives us the power of interpretation of the Commonwealth to the Community, of the United States to the Community, and through our unique relationships with at least one of the parties in the Middle East. In all these ways, with Britain firmly grounded in the European and the Atlantic alliances, I see us being able to interpret and, not in any arrogant sense, to influence other nations because of our fortunate inheritance of information and world-wide contacts.
It is my objective to see that our foreign policy is directed not only to removing tensions in the world but also, as I have said, to reinforcing our domestic policy, so that foreign and domestic policies shall reinforce and interact on each other. If I apply that approach to our current problems, it is at this stage that the vision gets a little blurred. Nevertheless, I submit that we need a theme for our approach to the kind of problem that has to be dealt with today. It is a cliché to

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say that we are living in a dangerous and constantly changing world.
I do not underrate the dangers and tensions, the fierce fighting that we have seen in the Lebanon, the civil war in Angola, the unrest in Portugal, the problems of Southern Africa and of Cyprus, still unresolved, and the position in the Sahara, where I hope for a negotiated settlement. There is the situation in Belize, on which I am glad to say that a debate has started in the Fourth Committee of the United Nations. Some 55 nations have now supported the resolution calling for independence for Belize. As I have said in the House before, it is my intention to resume negotiations with Guatemala when that principle is recognised, as it will be, by the United Nations, in order to ensure that Belize and Guatemala can live together in the future, as they must.
Against all these anxieties there are grounds for hope. In my view, there is some encouragement for the belief that patient negotiation can eventually resolve some intractable disputes and may carry others forward. Let me give three illustrations. The CSCE at Helsinki is one. We debated that conference in March in our last major foreign affairs debate. Since then we have signed the Final Act. It was a historic moment. There is the Middle East dispute, which has been taken another step along the road to peace. The momentum there must be maintained. There is the change in tone of the dialogue between the developed and the developing countries.
Any hon. Member who reads Hansard for last March will realise the anxieties that the House expressed at that time on those three issues, not all of which have been removed by any means. If we think back to last March, however, we will realise that progress has been made in all these respects.
Take the CSCE as one example. Every nation that went to Helsinki signed an agreed code of behaviour. That in itself was significant and important. Of course, there is no overnight end to tensions. Both sides have great armaments. The Soviet Union is probably increasing the strength of its armaments at the present time. There are great ideological differences, and there is no armistice in the war of ideas. That war will go on between the Soviet Union and those who
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espouse the ideology of the Soviet Union and the rest of the free world.
The Helsinki conference symbolised a determination to build up more normal relations based on respect. Undertakings were given, and it is for all of us to see that all of us who are participants fulfil those undertakings. I do not want to start so shortly after Helsinki by taking a carping attitude because historic attitudes by particular countries have not been reversed overnight. That would be foolish, unless we were still conducting the cold war in its sterile way. We must be clear where we stand. There must be no misunderstanding about that. But if changes are to be made, for example, in what has become known as Basket III, we cannot expect those changes to be made immediately. They will come gradually, if they come at all. They will come by patient persuasion, by private representation, not by loud huckstering, which, as far as I can see, is likely only to make people more defensive than they are now.
The progress on arms reduction will be a test. I should like it to be made the major task for 1976. It will need a substantial effort to achieve any arms reduction that is mutually agreed, but it is to that task in Europe that we next have to turn our attention.
I mentioned the Middle East. I think everyone will agree that great credit is due to the parties concerned—to Israel and to Egypt—as well as to the United States Government for the settlement that has been reached. The last time we debated that matter, we were lamenting that Dr. Kissinger's efforts had been thwarted. He returned, and they have now succeeded.
On his recent visit to this country President Sadat paid generous tribute to our Prime Minister. I think we can claim that, by skilful use of the wide-ranging and varied international links and friendships that we enjoy, we have been able—perhaps not publicly, but privately—to exercise considerable influence on the nature of the settlement that was reached.
I emphasise that the Sinai agreement is not an end in itself. The momentum must be maintained. The position on the Golan Heights is bound to lead to continuing tension. That is one problem

939
that has to be solved and on which there should be a move soon.
The representation of the Arab people, the Palestinians, at a peace conference is another issue that has to be resolved. There will be tension until the mandate for peacekeeping is renewed, and I express now the hope that Syria will do that soon. We are reaching the stage where, taking into account perhaps an early move on the Golan Heights, we need a global settlement based on Resolution 242, which still stands up to examination. This would involve a withdrawal from occupied territories, it would involve respect for the rights of every State in the area to live within secure and recognised boundaries and it would involve a recognition of the rights, both human and political, of the Palestinian people.
These things we shall work for, and in doing this, our friendship with the United States, in this as in other fields, stands us and the Middle East in good stead. We indicated to President Sadat and to Mr. Fahmy, the Foreign Minister, when they were here that at an appropriate time—I do not know when that moment will arrive—we shall, of course, be ready to fulfil our responsibilities in the Middle East, if we are invited to do so, along lines that would have to be determined.
Then there is the third illustration that I gave—the change in the tone of the dialogue of the developed and developing countries. Here is another area in which the momentum must be maintained. The confrontation at the Sixth Session of the United Nations which I reported to the House last March has evaporated, at any rate temporarily. I think it began to evaporate at the Commonwealth Conference, and in conjunction with the statements by the United States Secretary of State, Dr. Kissinger, together with statements by the European Community and by the OECD, the temperature was lowered before we ever went back to the Special Session of the United Nations in September.
I believe again that the British Government can claim some credit for the proposals that we made in Jamaica, on which we had worked hard for many months. There was nothing that was just conjured
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out of the air. It had been a very careful period of preparation and consultation and a lot of work had been put in with other Governments. I believe that those proposals for stabilising earnings, as well as proposing various kinds of commodity agreements, themselves had an impact on the temperature and helped to create a better atmosphere.
Of course, the developing countries' demands go wider than that and there are more methods of helping, for which this country is particularly well placed—for example, the transfer of technology and technical assistance through qualified manpower. This country is rich; this country is wealthy in skilled and qualified manpower and technical capacity. It would be more difficult to meet their demands for the establishment of new industries, especially in a world recession, and the admittance of their products. But there was at the end of the day in the United Nations debate about six weeks or two months ago a genuine consensus, and it is our task to see, in all the forums with which we are associated, that the momentum is not lost. We want to see that the UNCTAD conference in Nairobi next May, as well as the work in other areas, carries forward these demands of the developing nations. It is in all our interests that that should happen. We cannot be an island of relative wealth in a world of poverty.
Having spoken of progress in three areas that we discussed last March, I now turn to some areas where there has been very little progress. The first of these is the Energy Conference, as it was originally called.
Mr. Robert Hughes: Before my right hon. Friend leaves the three areas that he has mentioned—he was speaking of the underdeveloped world—can he say whether he has had recent contacts with the OAU about the situation in Angola? I hope he will say something about his attitude towards the transfer of power, because this is a matter of vital and topical importance.
Mr. Callaghan: I have had contact with the OAU, and President Amin has sent a message to me about the Angola situation in which he has endeavoured to play a constructive part. I hope that my hon. Friend will be willing to wait

941
until my right hon. Friend the Minister of State winds up the debate, because if I make a tour around the whole world I shall still be going at 10 o'clock. I am trying to limit myself to a certain number of subjects as my right hon. Friend will deal with the others. I hope, therefore, that my hon. Friend will allow me to move on to some of these other matters.
I want to say a few words about the Energy Conference. The preparations for it have taken a long time since the French Government took the initiative many months ago, and during the course of the preparations the scope has widened considerably. It is now called not the Energy Conference but a Conference on International Economic Co-operation and it will deal not only with problems of energy but with problems of raw material, development and related financial matters. The scope, therefore, is wide enough. It is expected to take at least 12 months, and we cannot say how it will develop. The membership of the conference has been fixed to eight industrial nations and 19 developing nations, though I do not know how those numbers were arrived at.
What is our position here? The Community does not have detailed policies on the questions for discussion. In my judgment, it will not find a sufficiently detailed policy or a common interest. It is, therefore, appropriate that the United Kingdom should seek a place on its own merits and on its own account.
With regard to energy, by 1980 the United Kingdom will be producing 90 per cent. of Europe's oil and 45 per cent. of the total production of energy in the European Community. No one knows what the Community's position will be on the details of the questions to be discussed. There is no agreement that there should be a minimum selling price. France is not a member of the International Energy Agency, where an agreement was entered into for a minimum selling price. There is no understanding about the rate of depletion—one of the most important issues, I should have thought, in a matter of this sort. There is no agreement on the price of energy inside the Community.
We have invested, and will continue to invest, a greater proportion of our gross
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national product in energy production—running into many billions of pounds—than anyone else. Those are the simple facts. There is no common approach to those problems.
I should be neglecting my responsibilities if I did not claim a seat at the conference on behalf of the United Kingdom.
The method of deciding attendance is rather obscure. At present we are working with the Community on a mandate. We have done nothing so far to hinder the presence of the Community at a conference, but I warn now that if they go to the conference in the present unprepared state I see nothing but impotence and frustration for the members attending it. Problems will emerge day by day and week by week during the 12 months, and hurried meetings of the Nine will have to be called to try to find a patchwork formula that represents the highest common factor of agreement on issues on which there are substantial differences, I cannot believe that that is the right way in which to conduct a matter of such vital importance to this country.
We hope that the conference will do useful work. There are pessimists, but I hope that their judgment will be proved wrong. If we are present, as I trust we shall be, we shall certainly do our best to make a success of it. But we cannot afford to fail to indicate to the Community, to the United States, to Japan and to the other nations that will be present that we have a most important interest in this matter.
I hope that the Opposition share that view. I have listened to some stalwart speeches from some Opposition Members about it. I should be most interested to hear from the right hon. Member for Chipping Barnet (Mr. Maudling) whether the Conservative Party believes that Britain should be represented on her own account at this conference. He owes it to us and to the country to tell us.
Mr. Jeremy Thorpe: Before the right hon. Gentleman leaves that point, and without prejudice to the decision that he has taken, will he confirm that this country agreed to the ratio of 19 to eight? If we did agree, was not that unwise?
Mr. Callaghan: No. The question of representation had been made utterly clear to the Community and it was not

943
for me to instruct my representative that, if everybody else wanted to go ahead on the basis of 19 to eight, we should stand aside. I have expressed my personal view about those numbers, but I did not feel that it was right at that stage to hold up agreement on the issue merely on the question of numbers.
Mr. Thorpe: Was it not a fact that the figures of 19 and eight were the figures arrived at when the British were present and that which we agreed?
Mr. Callaghan: Yes, of course it was. I thought that was what I said. I do not know why the right hon. Gentleman interrupted again. I agreed because I did not believe it necessary to hold up agreement. That is not to say that I altogether agree that it is wise. The right hon. Gentleman will frequently find, if he becomes a member of a Government one day, that in the Community we do not necessarily accept everything that happens, but we do not always feel that we must make a stand.
The point was taken properly. The Community was aware for many months that Britain was claiming a seat, and that has never been departed from. The decision on the numbers was taken in the full light of that.
I pass on to another problem on which we have met with little success so far. That is the issue of Cyprus. We took advantage of the visit of Prime Minister Karamanlis and the Foreign Minister, Mr. Bitsios, to discuss the problem of Cyprus with them, and also with the Turkish Foreign Minister. We are keeping in close contact with both the Greek and the Turkish Governments, as well as with the Greek and Turkish Cypriots, to try to assist the talks that are proceeding between Mr. Clerides and Mr. Denktash. There has been a blockage in the talks, but the United States' arms embargo on Turkey has been lifted. I understand that attempts are being made to develop a national policy in Turkey and I very much hope that the efforts, and patience, of Dr. Waldheim will ensure some progress.
There are three issues. The first is whether there is agreement that there should be a bi-zonal arrangement between Greeks and Turks. The second is what should be the powers, great or
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small, and the composition of a central Government. The third is what should be the amount of territory in which each community would have a predominant role. We have intimated privately to each side our view of what steps could best be taken to help towards a solution. So far we have had little success.
As we are in the middle of private discussions with each side—the Community is also in contact with all parties—I prefer not to be pressed this afternoon to go into the details, because that would not be helpful in getting the parties together. I have outlined the problems that exist. We have given intimations of our view on these matters. Here again is an illustration of where we have to do good by stealth. I could, of course, make a tremendous declamation indicating exactly who we believe is right and who is wrong, and the degree of blame that should be attached to each side. If I did so we should entirely cut ourselves off from any influence we might have towards obtaining a better result. We are ready to help. We shall continue our private conversations, as will Dr. Waldheim, the United States of America and the Nine.
I call attention once again to the problem of growing nuclear poliferation. I am glad to see that there are the beginnings of a debate on the great dangers that the world faces from the increasing use of nuclear power. I do my best to foster this debate because I am sure that it is right. The raw materials that produce nuclear power for peaceful purposes can be used for other purposes too if the technology is known and is present.
I have illustrated this before—but not in the House—by pointing out that the bomb which destroyed Nagasaki contained the equivalent of about 10 kilogrammes of plutonium. By the middle 1980s, at present rates of progress, the world will dispose of 1 million kilogrammes of plutonium. Therefore the remedies, if they are to be effective by the 1980s, must be found now. Basically, I know no better way than to use the International Atomic Energy Agency. It should be used to safeguard enrichment and reprocessing plants and to control the use of nuclear materials throughout the whole of the fuel cycle. It is a very difficult thing to do.

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Britain again has played a major rôle in stimulating discussion and in putting forward positive proposals. There was, first, the Brezhnev-Wilson declaration of common intent at Moscow last February, when we began to see the outlines of the problem as it was to emerge. We have worked closely since then both with the Soviet Union and with the United States, and are in broad agreement about what it is necessary to do.
We promoted the establishment of a special advisory group to consider the implications of peaceful nuclear explosions. That group is now working and has had a number of meetings. Thirdly, I made specific proposals at the United Nations Ordinary Assembly in September, and we are following up those proposals in the IAEA and by discussion with other nations.
This is one of the most important topics for mankind. I hope that there will be growing public debate about it, for the sake of our children and our grandchildren. If we cannot control the peaceful uses of nuclear energy, if we cannot make the world see that we are running the most frightful risks mankind has ever run, we are going the right way to destroy our planet. At least, the possibilities will be there. Britain must not rest until we have exhausted all possible means of securing control, and we shall continue our efforts to that end.
I should like to say a word now about the European Community. Looking back over the past few months since our last debate, it can be seen that we have done useful work in the Community on political co-operation. The referendum was a watershed which settled the issue. But political co-operation, for example, has demonstrated its value in Portugal in the financial aid proposed and accepted, and in the political support given to the struggle for democracy in that country. We have worked together in the Community to develop a common attitude to Spain. Let me say once again that the British people have no quarrel with the people of Spain. We hope that they will emerge into a new relationship both with their own Government and with the rest of Europe. It will certainly be our desire to help them achieve a democratic society in their own country.
The Community is working out relations with Greece, which has made an
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application to join. At the moment we are waiting for the report of the Commission on that application.
The Euro-Arab dialogue is going ahead, but too slowly, although a meeting of experts will take place next week in Abu Dhabi to discuss how co-operation can be carried forward. A common position was worked out prior to the CSCE and a common stand has been taken on Israel's position at the United Nations. All these are of value.
Sometimes it has been very difficult to keep everyone in line, especially in relation to Israel. I do not know how long we shall go on succeeding but I do know that when the Community speaks with one voice—I think that what I am saying illustrates that I am ready to see Britain speaking with one voice for the Community wherever we can—Britain and the Community are stronger.
Internally, the issue that has arisen is that of direct elections—that is, not having members of the Assembly who are nominated by this Parliament but having them directly elected from the constituencies. That is a treaty requirement and, of course, we shall honour it.
Mr. James Wellbeloved: Not this decade.
Mr. Callaghan: I put it this way: not this Session.
The Assembly has proposed a much larger Assembly than the existing one, giving a workmanlike basis for the proposals suggested. The Council of Foreign Ministers is now studying the proposals that have come from the Assembly. I should divide the discussion into two parts. First, there are the issues that must be settled by the Community as a whole, an obvious one being the size of the Assembly and the distribution between the Members. Second, there is the question whether one has one election day or a number of election days, or whether to make it coincide with the General Elections of each country.
Those questions should be settled centrally either by the European Council or by the Council of Foreign Ministers. But I think that there are many other issues—indeed, most—that should be left to national Governments to settle. I refer, for example—we all know about such things because we go through it—to the preparation of the electoral roll, who

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is entitled to vote, the method of election, who has the right to be a candidate, and whether there is to be a dual mandate. Are Members of Parliament here to be free to stand for the Assembly, should they be debarred from standing, or must they be drawn only from this Parliament? I have my own views about that, and I dare say that all other hon. Members have too. Then there are the questions of constituency boundaries and of financing the elections. All these are quite intricate matters and will be difficult to work out.
We shall also need a treaty amendment which will have to go through various Parliaments and through this Parliament. That is why I have taken a view, not out of any ideological dislike but merely out of a regard for the practicalities of the situation, slightly less rosy than that taken by some of my colleagues. Some of them seem to have more docile Parliaments than we have at Westminster, and they seem to be quite certain that they have only to present a Bill for it to go through. Having had the experience of trying to reform the House of Lords, I am no optimist. I am aware that if one puts a constitutional Bill before this House one is putting it in front of 630 experts. There are other illustrations, but I shall not tread on dangerous ground.
As I have tried to point out to my colleagues, I am certainly not being obstructive, but with the best will in the world I think that it will take some time to get these matters through and prepare the legislation. The Government's responsibility is to enter into a discussion with the other parties. There will be need for considerable party debate about it, and we shall obviously need to discuss the matter in this House. Therefore, I think it will take some time to effect.
We should not try to hold matters up, but we should begin the process of discussion after the European Community summit in December and, subject to what the Cabinet has to say, I should certainly hope that my right hon. Friend the Lord President would want to do so. But all that will take time. I hope that right hon. and hon. Members agree with me that I should not be over-optimistic about it. But I do not say that we should deliberately hold it up, and certainly I am not trying to do so.
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The European Community itself is still uncertain of its rôle and its direction. The basic problem is still not settled. One problem that is gradually being settled is that those who thought they saw the Commission as a form of European Government are now deserting that view. What is certainly not settled is how the Community will grow and whether it is to be a federal system or a series of nation States co-operating wherever possible. Some nations hold one view and some hold others. No final decision has been reached on that. Nor, I think, will there be a final decision reached on it for some time to come. My own view is that we must co-operate wherever we can and on all possible occasions. We must act independently when we must, but even when we act independently it is our responsibility to keep contact with one another within the membership of the Community.
Apart from the Community itself, there has been a period of intense diplomatic activity. If I tell the House that during the past four weeks we have welcomed to this country the Prime Minister of Greece, the Crown Prince of Saudi Arabia, the Foreign Ministers of Canada, of Venezuela and of Brazil and the President of Egypt, hon. Members will realise the diplomatic activity that is going on. In addition we are looking forward to having President Nyerere with us, and before the end of the year the Swedish Foreign Minister and others. I hope to visit all the Gulf States and Saudi Arabia, and my right hon. Friend will be visiting Iran and Iraq.
I have spoken of the interaction of foreign policy and domestic policy, and I come now to my final word.
Sir Anthony Royle: I have listened with great care to the Secretary of State's impressive speech, but he has made no reference—perhaps he is intending to do so in his last few minutes—to South-East Asia, where major developments have taken place in the past few months. Many of us have watched with anxiety the recent negotiations in Hong Kong, the last major British base in the area. I should be most grateful if the Secretary of State would touch on those matters before he finishes.
Mr. Callaghan: I had not intended to do so. I realise that there are omissions, and I apologise for them, but my speech is long enough now. If I were to mention such matters it would become intolerably long. Hong Kong recognises the financial difficulties. An article I saw written by Lord Chalfont from Singapore or Malaysia was not exactly up to date with the latest position. I am hopeful that a satisfactory agreement will be made between both sides about future expenditure on defence in Hong Kong. Perhaps my right hon. Friend will pick up more detailed questions when he replies.
Finally, I want to say a word about the interaction of domestic and foreign policy in relation to trade. I expect the Foreign Office to take a continuously growing interest in overseas trade, in conjunction with the Department of Trade. The Diplomatic Service must play a key rôle in helping British business abroad to sell British goods. This is a view I keep expressing. I understand what is required.
The House may be interested to know that, including local overseas staff, there are now 700 Foreign Service officers employed whole time on commercial work, and many others spend part of their time on it. These officers have made some 98,000 visits to local firms, commercial organisations and Government Departments in the countries to which they are accredited. During the past year they have received 42,000 personal visits from British business visitors whom they helped. Now and again I receive a complaint about them, though I get many more letters of congratulation for the help they give.
I believe that the Foreign Service has really hoisted this in, and our officers understand that they have an important rôle to play not only in political matters but in advancing British trade. They are in the front line of the battle for national survival. I have made that absolutely clear.
We are rebuilding a number of our old markets, such as the Latin-American market, the market in the Soviet Union and parts of Eastern Europe, markets that are politically oriented. The Middle East is another politically oriented market. It is my desire that we should strengthen our effort in all these places.
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We regard the conference that is to take place at Rambouillet next weekend—which the Prime Minister, the Chancellor and I will be attending, as well as the Presidents of the United States and of France, the Federal German Chancellor and the Prime Ministers of Japan and of Italy, with all their colleagues—as a most important conference to see whether the West can pull the world as rapidly as possible out of the present recession in which unemployment has been combined with inflation.
In this country we are right to take inflation very seriously and to take the most Draconian steps to put an end to it. But we must not be too frightened of trying to get rid of unemployment in so doing, because we must tackle that problem too. The present unemployment ratio throughout the whole of the Western world has never been seen since the end of the Second World War.
The conference will deal with trade and monetary policy, energy developments and relations between developed and developing countries. I do not think that we should expect major decisions. Other countries' interests are affected, and it would be wrong for major decisions to be taken. On the other hand, there will be a meeting of minds which, I believe, will influence the decisions of all of us when we return to our own countries afterwards. That in itself is important.
I apologise to the House for having taken so long. I conclude as I began. It is our task to be active and vigorous in our foreign policy. It is our task to recognise the major themes—the relations between developing and developed countries, the proper exploitation and use of raw materials, how to get rid of the poverty of the world, how to overcome unemployment, and the nuclear threat. It is our job to isolate these themes, to work on them, constantly to prosecute them and not only to try to use foreign policy as a means of extending Britain's influence throughout the world—which is a beneficent influence—but also to advance our own interests and to help regenerate British industry here at home.
4.45 p.m.
Mr. Reginald Maudling (Chipping Barnet): The Foreign Secretary has no need to apologise to the House, because we have all listened with the greatest

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attention to his extremely interesting views on the problems and policies of his great office. I agreed with much of what he said, not least with his basic theme that this House should not be totally absorbed in domestic problems and that there is a certain danger of people in this country saying that because we cannot do what we used to do when we ruled a quarter of mankind we cannot do anything at all.
The change in our national situation in the last generation alone has been astonishing, in historical terms, and there is the grave danger that, somehow or other, we should say "What's the good of trying? What influence can Britain have?" The truth is that, as the Foreign Secretary made clear, we still have a very great influence, particularly when exercised through our membership of the European Community, and this, without doubt, is where our future lies in this realm of foreign affairs.
I intend to take up a number of the topics dealt with by the Foreign Secretary, and my hon. Friend the Member for City of London and Westminster, South (Mr. Tugendhat), who hopes to catch your eye later in the debate, Mr. Speaker, will deal with the economic problems, to which he has given a great deal of study.
May I add one item to the catalogue given by the Foreign Secretary? It concerns the Falkland Islands. I hope that the Minister of State will say a little about it. We gather that a mission, under Lord Shackleton, is soon to go to the Falkland Islands. We should like to know more about the background to this, and why it is taking place. In recent months certain anxieties have been aroused about this, and about the intentions of Her Majesty's Government. We should like the position to be made absolutely clear, if the Minister will be good enough to do that.
We all agree with the impression made upon us of the rate of change and the extraordinary fluidity of the international situation. It is quite different from anything that we have known in earlier decades. Certainly there are grounds for being depressed by the failure of the world to take advantage of science and technology, by the growing discord in many areas, by the suspicions that linger, and by the double-talk in international
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relations becoming more and more prevalent.
The fact is that science cursed us with the atomic bomb but blessed us with the nuclear stalemate. Yet what is growing up under the umbrella of the nuclear stalemate is not very attractive. There are no real signs, yet, of any progress in disarmament. As the Foreign Secretary said, the Soviets are continuing to build up their apparatus of war-making. SALT and the MBFR talks are not really making any progress. There was bad news again this morning, I saw, about SALT in particular. As the Foreign Secretary rightly stressed, the dangers of proliferation of atomic power are enormous and extremely urgent, and no one should be allowed to underestimate what they could lead to for the whole future of mankind.
It is hard, too, to see much growth of confidence and understanding between the nations. Rather, we see jealousy and suspicion. We see violence within nations replacing violence between nations. I am afraid that, in some examples, we see intolerance and even violence itself being virtually canonised by certain countries.
I do not know, but sometimes I feel that the meeting of minds is getting more remote rather than closer, with a sort of Humpty-Dumpty feeling—if that is who it was in Alice—that "Words mean what I say they mean; no more, no less". Obligations, if not actually broken, can always be reinterpreted in different words. This is the sort of world in which, when feeling pessimistic, we think that we are living. Yet there must always remain the other side of it. It would be folly to despair. As Winston Churchill once said, "Never weaken, never despair". The opportunities created by science and technology are as great as they ever were. They are still there to be grasped, and grasped they must be. The nature of man has not changed. In this swirling world that we face this above all remains.
Therefore, in dealing with foreign affairs, I think it is very important to analyse international problems in terms of human motives. After all, nations are only individual men writ larger. Unless we study more closely than we have done why men and nations are doing things, we shall never make progress in solving

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the problems of what they are doing and how we can cope with them.
What are the motives which impel nations in foreign policy? I think that the most powerful of all is simple fear. Often it is unreasoning fear. We have only to look at the problems in the Middle East between Arabs and Israelis, at the problems of Cyprus, and at the position of the Soviet Union. So much of what they do and so much of what they often appear to be doing aggressively springs from basic, genuine human fear, which must be exorcised if agreement is to be reached.
Then there are ambition and the lust for power, which are less effective in the modern world. However, an extraordinary pride remains—an astonishing possessiveness—about the minutiae of individual frontiers. Is not it strange how often nations nowadays seem passionately determined to defend frontiers drawn decades ago by other people, because, somehow or other, their national pride is involved?
We must not neglect the effect of sheer stupidity on foreign affairs, either. I believe that it was Schiller who said that with stupidity even the gods wrestle in vain. We must not underestimate this factor when it comes into international negotiation. But never must we lose sight of idealism. It takes so many forms, and it often walks hand in hand with violence and terrorism, oddly enough. However, idealism is still one of the basic human emotions and, I believe, still the strongest.
These motives, in different mixes and combinations, run through every problem of foreign affairs, and I am sure that, in seeking solutions to the problems facing Britain, it will be wise always to try to think why other people are doing what they are doing and whether, in those same circumstances, we would not be doing precisely the same. If we can do that, I think that we shall have a better chance of understanding these situations, and from a better understanding will come a better chance of getting agreement.
Therefore, the objectives of British foreign policy are to maintain the security and prosperity of the United Kingdom as part of the Western world. The threats to that security and prosperity are threefold—military, political and economic.
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We cannot have a complete foreign policy unless we have regard to all these threats.
First, there is the military threat. I have referred to the continuing growth of Communist power and the expansion of naval dispositions of the Soviet Union throughout many new areas of the world. It is hard to see these as purely defensive, in terms of a great land mass. Whatever the intention behind them, they cannot fail to give concern, and they must be taken fully into account in determining our own policies, in both foreign affairs and defence.
Secondly, there is the rebuff to the United States in South-East Asia, to which my hon. Friend the Member for Richmond, Surrey (Sir A. Royle) referred.
Thirdly, there is the weariness of democracy, the longing to get away from effort, the longing to believe that every thing will be all right, that this is a sensible and rational world, and that people will not do stupid things. Once we make that assumption—as we came very close to doing in the 1930s—we may be in great peril.
Then there is the political threat. There is the continued pressure and advance, in many areas of the world, of antidemocratic ideas, especially the weakening, in political terms, of the southern flank of NATO, and the development which is continuing, within the Third World, of hostility to the West in general and, of course, to the United States in particular.
There is the economic threat to our future, particularly illustrated in the development of the conscious power of the raw material producers. There is a consciousness of monopoly power, newly born, I think, in the experience of the oil producers, which might spread to other areas as well.
It is right for us to recognise that there is a strong claim on the part of the developing countries, in particular, that their economies should be helped to grow. I do not accept the extreme point of view that we have robbed them of their oil and minerals. Where would their oil and minerals be if we had not gone there? They would still be under the ground. I do not accept that point of view, but I accept that a new balance between the consumers and the producers

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should be sought, recognising the just interests of both, because, unless we can do this, the general tension and conflict within world affairs is bound to continue.
These factors seem to me to constitute the general background against which we should deal with the problems of foreign affairs. I should like now to come to some of those problems, and in one or two instances I shall criticise the Foreign Secretary for the attitude that he is taking.
First, I want to consider the Iberian Peninsula and the question of Portugal. We are all deeply concerned about the situation in Portugal, and we all wish to see—be we Socialists, Conservatives or Liberals—a pluralist democracy there. That is a horrible phrase, but we know what it means. What is so frustrating is that it is extremely difficult to see what we can now do about Portugal. Sometimes, I am pressed by colleagues to make powerful speeches denouncing Communism in Portugal, but I doubt whether that would help the friends of democracy in Portugal. I doubt whether overt intervention in that country's domestic affairs would help anyone. What is clear is that we must help the course of democracy in practical ways.
It is right for political parties, within their resources and in appropriate forms, to give aid to political parties of a democratic character in Portugal. It is certainly right—I am glad that the Foreign Secretary did this; I spoke to him earlier about it—to ensure that the EEC gives the maximum economic aid to the new Government in Portugal. Portugal's economic problems are very grave, and this alone could bring down democracy. I am positive of that. Those are the practical things that we can do, and I am sure that the House will support the Foreign Secretary in anything he does to help Portuguese democracy along those lines.
Then there is the grave situation in Angola. I do not know what line the Government are taking on this, although I believe that the Minister of State will refer to it in his concluding speech. Perhaps I may ask him to deal with a particular point.
Concern has been caused by a Press conference chaired by the right hon.
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Member for Lanark (Mrs. Hart), who was the Minister for Overseas Development. Apparently, she said on 27th October that the Labour Party gave its sole support to the MPLA. The MPLA was often invited to Labour Party conferences, and the Labour Party Secretary, Mr. Ron Hayward, met its leader, Mr. Neto, last year. I hop that the right hon. Lady's statement is not correct, because the MPLA is the Communist-supported body in Angola, but in view of that statement I think it would be helpful if the Minister were to make the Government's stance quite clear.
I turn now to Spain, and again I must criticise the Foreign Secretary's attitude, although he becomes rather testy when I do. I think that his attitude is important, first, because of the significance of Spain in Western Europe, and the grave consequences that would follow from a collapse of Spain and its defection from Western sympathies. Secondly, it is important because the prospects for the new régime seem to be good, and it is desirable that we support it. Spain seems to have done very well over the problems of Spanish Sahara, and, touching wood, I hope that the agreement will continue. Certainly a strong Spain is a very important part of Western Europe.
I think that there is a charge of inconsistency and prejudice to be made against the Government, which undermines their credibility and the credibility of their stance generally. I am referring to the condemnation of the execution of those who were found guilty of murdering policemen, and I should like to make clear the Opposition's position on this matter.
Although we have abolished the death penalty, I do not think that anyone in this country can honestly criticise other countries which retain it, and I would guess that the great majority of people would be in favour of retaining it. What we can fairly criticise is the fact that people are sometimes condemned and executed without a proper trial, but if we do it for one country we must do it for others.
Spain is not the only country in which there are military courts. Nor is it the only country in which the processes of law fall short of those generally acceptable in this country, and we should not pick and choose in this matter. I ask

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the Minister to give us an assurance that whenever Her Majesty's Government have evidence of people being executed after an inadequate trial they will protest in the appropriate way with equal vigour, whichever country is concerned. There must be consistency. I am sure that the Minister recognises that.
I come next to the problems of Cyprus, Greece and Turkey. It is a matter of urgency to make progress here, not only because of the damage being done to the NATO Alliance, but, more important in many ways, because of the damage being done to the people of Cyprus. The Foreign Secretary certainly recognised that this afternoon.
In the summer I was fortunate enough to visit Athens and Ankara, and to talk to leading statesmen in both countries. There was general recognition that there must be agreement and compromise. One leading Greek statesman said "We recognise that we must sign a cheque for the follies of the colonels, but it must not be too big", which seemed to me a highly realistic view to take. Clearly, the solution must involve some form of constitutional reform and change on the frontier. There must be some compromise in the constitution between the federal and confederal systems put forward and, on the frontier, between the present positions and the earlier line, in so far as it was a line, that used to exist.
Progress has been held up by the attitude of the Turks to the American arms ban and because of their impending election. I sympathise with their point of view on the arms ban, which was maintained by Congress in the teeth of opposition by the American administration. I hope that people will learn that the Turks will never give way to threats. It is a good thing that Congress made a move here and also that these partial senatorial elections have been held. So far as I can see, the extreme nationalist party that was feared to be emerging has not emerged with any great strength.
Surely the time has now come when the Turkish Government should make a move. Clearly, the ball is in their court. I believe that they have the will to do so. I hope that, in the course of the many things that he is doing with his American colleagues and his colleagues in the Nine, the Foreign Secretary will be able to
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bring to the Turks the concerted advice that it is up to them. If they wait much longer, the dangers are great. By acting now and showing their willingness to compromise and to make agreements, they can do great service to themselves and to the whole of Western Europe.
Mr. Cyril D. Townsend: The two Front Benches seem to share a common line on this matter, which is all to the good. However, as Britain is one of the original guarantors of a free and independent Cyprus, does not my right hon. Friend think it would be appropriate if the Government were to make a louder protest against the settling of Turkish peasant communities in northern Cyprus at this time? Will not that underline the diplomatic activity, which we all strongly support?
Mr. Maudling: That is a difficult question. I recognise what my hon. Friend says and I know of his interest in this matter. As the Foreign Secretary asked not to be pressed on this matter at the moment, I was not pressing him, but no doubt he will take note of the view of the House.
The other point that arises is the Greek application for membership of the EEC, which I and my hon. Friends strongly support. Europe could not conceivably be Europe without the presence of Greece, which is the cradle of so much of European civilisation. I do not believe that Greek membership would militate against Turkey's interests. In principle, ultimate membership of the Community is already provided for in the Treaty of Association, which was signed a little while ago. It was made clear to me by Mr. Karamanlis and other leading Greek statesmen that Greece regarded membership of the Community as keeping it within Europe at a time of difficulty between itself and NATO. It is certainly not regarded in any way as making its conflict with the Turks more difficult. In fact, it says the opposite. Greece believes that, within a European Community which it joined and which will be open for the Turks to join when they are capable of qualifying and wish to do so, the chances of a solution to the problems of the Eastern Mediterranean will be greater than at present.
I set no store by the argument that, if Greece were to join the Community, it

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would then be able to veto the admission of Turkey. I do not for one moment believe that Greece would do so. But I am certain that it would be made absolutely clear when Greece joined the Community that such a veto could not be used if the Community as a whole wished to have Turkey as a member.
I come now to the Middle East. I have seen a good deal of the problems there. I have visited the Arab countries many times on business. In the summer I was for some time the guest of the Israeli Government and learned of its point of view as well.
The trouble in the Middle East is one of conflicting antipathies. There is Arab versus Israeli, Left wing versus Right wing, and the United States versus Russia. These three differing conflicts tend to interact and to make more confused a situation that in itself is extremely difficult.
Anyone visiting the Middle East comes back totally convinced of the need for agreement on this problem and the benefits that could flow from it. In sheer economic terms, the burden of defence on Israel, and, I think, Egypt as well, is colossal. I believe that it is over 30 per cent. of the gross national product. It is probably a larger percentage than this country spent at the height of the last world war.
On the other hand, when one considers the technology of Israel in agriculture and the resources of the oil-producing States, one realises how a combination of those resources could make that part of the world fertile and flowering for the benefit and happiness of those who live there. Nothing could give greater benefit to the Middle East than an agreement between the Israelis and the Arabs. Yet, given genuine good will and the elimination of fear, which more than anything, I believe, underlies the Middle East problem, a solution is possible.
The agreement between Egypt and Israel was a great advance, and all credit should go to the Israeli leaders, to President Sadat and to Dr. Kissinger for the work they did in achieving it. But, as the Foreign Secretary rightly said, we must maintain momentum. Unless the momentum is maintained, the situation
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might collapse again, and for no one is this more important than President Sadat himself, whose very courageous position in the face of much criticism from other Arab countries can be fully maintained only if the progress towards general agreement can also be maintained. Clearly, there must be another meeting at Geneva at some time, but, before then, there must be more bilateral progress, and there must be some solution—in view, at any rate—of the problem of Palestinian representation.
These are still the two outstanding problems. The answer, I believe, is still to be found on the lines of Resolution 242, which both sides of the House have always adhered to and which remains the basic text for any lasting settlement in the Middle East.
Certainly the Arabs are entitled to a return of the territories taken from them in war. The Israelis are equally entitled, without any shadow of doubt, to real safety and security. But when one considers the geographical factors in Israel and the narrowness of the territory, and when one realises that in military terms the Arabs are far nearer to the heart of Israel than any Israeli is near to the heart of an Arab country, one recognises that there must be a genuine, effective and lasting guarantee of security before the Israelis can be expected to enter the sort of agreement that we must seek. Finally, I think that everyone will now agree that the other condition of agreement must be that the Palestinians should have a country of their own.
No good is served by those who advocate extreme causes. There is still a real fear in the Middle East—on the one hand, that the Arabs wish to eliminate the State of Israel and, on the other, that the Israelis plan a grand expansion across vast areas of the Middle East. These fears still exist in the minds of men there. They are utterly wrong. But, until those fears are exorcised, real peace will be very difficult to achieve. I was in Baghdad a short while ago talking to members of the Iraqui Government and I know that some Arab countries still will not recognise the continued existence of a State of Israel. Many Arab countries will, but some will not. This remains an obstacle to a settlement.
Then there is the United Nations resolution, which I deplore, describing

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Zionism as racism. This can only do harm and make a settlement far more difficult. I do not understand it. If one can have an Islamic republic—a very good thing, too—why not have a Jewish State as well? What is racist about one and not the other? So long as individuals within those countries are guaranteed proper human rights, surely both can live side by side, one with the other.
On the other hand, the Israelis must recognise that some of their activities in the occupied territories, particularly in the Golan Heights, seem to be designed not merely for strategic defence but for permanent occupation of the territory. Such activities do not help towards a solution of the problem and the more on either side who can be persuaded not to pursue those activities, the better the prospect for peace.
The two urgent problems, as I have said, are the Golan Heights and who represents the Palestinians. I was standing, only a few weeks ago, on the Golan Heights. When one looks out over Lake Kinneret—as Lake Galilee is now called—from the position previously occupied by the Syrians, one can understand perfectly well why the Israelis would be loth to see that position reoccupied by a potentially hostile Power. Therefore, the answer must come down in the long run to a United Nations presence, to demilitarisation, or to some way in which the: territorial aspirations of the one country can be matched with the proper defence considerations of the other. But until one looks at it on the spot, it is hard fully to understand the practical facts involved.
As for representation of the Palestinians, the time has come when it must be recognised that the PLO is, broadly speaking, the voice of Palestinians. Many people, of course, would like to see King Hussein speaking for them. But since the Rabat conference and the recent activities of the PLO, it has become a fact of international life that no one can ignore.
Its association with terrorism is to be deplored, and no hon. Member would for one moment countenance any support of terrorism. But the history of the Middle East and the Eastern Mediterranean shows many examples where righteous causes have been pursued by honest men while, at the same time,
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wicked men have been pursuing the same purpose.
One must not refuse to talk to those who are of good will because of the existence of those who are of bad will. Without doubt, in the long run there must be a settlement between the Israelis and Palestinians that will guarantee some appropriate Palestinian country of their own. The sooner it comes about, the better. I appreciate the difficulties as well as anyone, but I am absolutely convinced that the longer this is delayed and the longer effective consultation, talk and negotiation are postponed, the greater will be the dangers for all concerned in that part of the world.
I come back to the main issue, the protection of the United Kingdom against aggression. What is absolutely clear, surely, is that our protection against all forms of aggression, military, political and economic, will depend for its success on consolidating Europe and maintaining the American alliance. The simple fact is that, without the strength of America, especially its nuclear strength, Europe could not defend herself against a possible threat. Even if it were possible to build up in Europe a defence of this calibre and size, to do so would take an immense amount of time and would be an appalling waste of human resources. Therefore, anyone who throws any doubt upon the United States' determination to defend Europe does no service to the cause of peace between West and East, because the nuclear umbrella is there. Anyone who puts holes in the nuclear umbrella does no good to the human race.
It was, after all, the determination of the West to defend itself that made the Helsinki talks possible. I shall say a word or two about Helsinki in a moment. But one must never let people forget that it is because of our own apparent determination to defend ourselves that we have now reached the position where there is a growing chance of long-term concord between the Western and Eastern parts of the civilised world.
Let me say a word now about the European Community—the Foreign Secretary referred to these matters—and the need for cohesion. The Opposition believe that this country is clearly committed to the principle of direct elections

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to the European Parliament, and, committed as we are, we cannot possibly delay the matter deliberately, as the Foreign Secretary rightly said. But there are considerable practical difficulties about constituencies, numbers and the method of election which must, I agree, be ironed out There is no point in rushing it. To have a farcical first election to the European Parliament would be disastrous for its reputation. We have to get it right. We are working, as are the Government, on ways in which the matter should be tackled.
I hope that there will not be too much passion for bureaucratic tidiness, which is sometimes the fault of the Brussels administration. I do not see why, in the initial stages at any rate, countries should not decide for themselves to a large extent the methods and the details of how the elections are held in their own territories, so long as they produce by those methods and with those details representation of a proper democratic kind within the framework of the European Community. We have to go firmly forward to direct elections, to which we are committed, while at the same time making quite clear that we are concerned with the basic principle and not too much concerned with over-tidiness of mere detail.
I turn next to representation at the energy conference, on which the Foreign Secretary laid a trap for me. He has been doing it for weeks—the same trap. We are concerned about and recognise the enormous importance of the United Kingdom in the energy field. I imagine that that principle might be applied to other European countries in other fields—I am not sure about that; I should like to look up the details.
The question is whether it is right to press so strongly for separate representation at the conference when, by doing so, we may damage other equally important British interests, such as the cohesion of the Community and the success of the conference itself. What frightens me is that the Foreign Secretary, in being stalwart in protecting British interests—and no one must ever blame a Foreign Secretary for being stalwart in protecting British interests—may be endangering the whole conference and much of the future coherence of the Community.
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I hope profoundly that he recognises this and has somewhere in his mind, recondite as it may be, a solution that will enable him to reconcile these basic British interests. If he has, and produces it, we shall be delighted.
Mr. Wellbeloved: Does the right hon. Gentleman support him now?
Mr. Maudling: The Foreign Secretary has not given sufficient attention to the contrary dangers of the stand he is taking and the way in which he is taking it.
In conclusion, I turn to the broader picture outside Europe. The great world forces now are America and Europe, and Russia and China—not mentioned in the Foreign Secretary's speech, but he could not cover the whole world. It seems strange, indeed rather fortunate, that Russia and China do not seem to get on well together. It is most peculiar that these two great Communist Powers seem to have a considerable antipathy. From the Western point of view, this is perhaps fortunate, because a combination of Russia and China would be a formidable fact for the non-Communist world to face. We must avoid the temptation of assuming that because China is opposed to Russia, it is necessarily on our side. I think it is on its own side, as are the Russians.
I believe our objective should be to be on good terms with both Russia and China, but never to be exploited, or used, by either of them to the detriment of the other. What are their purposes? Are the Russians and Chinese expansionist, aggressive people? Do they want, by military force, to take over and dominate the world? I do not believe that to be their purpose.
From what I know of the Russian leaders, they are Russians before they are Communists and are deeply concerned with the development of the vast land mass of their country. But they feel that in order to maintain the security of their country, they must be in a position to destroy anyone outside their country who might threaten them. They will certainly never miss an opportunity to exploit any weakness in the West for the promotion of their own propaganda and the advancement of their own political point of view.

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As the Foreign Secretary rightly said, one of our greatest tasks is to explain and expand our own ideas throughout the world. The right hon. Gentleman said, "There is no armistice in the war of ideas". There must never be an armistice in the war of ideas because that, in some ways, is by far the most dangerous war of all at present. We must monitor in a positive spirit progress after the Helsinki agreement. We must try to find where we can agree and go forward together and not to carp and criticise, saying, "I told you so".
We must not be starry-eyed or over-idealistic, but must look hopefully for signs of genuine achievement rather than for signs of genuine disappointment. We must press on with the SALT and MBFR talks and with the treatment of individuals under Basket III.
These are immensely important tasks to be undertaken not only by this country but by our colleagues in the European Community. The fundamental truth, if I may restate it as a platitude, is that we must do this because the only alternative to what is called co-existence is co-destruction.
5.19 p.m.
Mr. John Mendelson: The right hon. Member for Chipping Barnet (Mr. Maudling) will be conscious of the fact that over a good deal of the ground that he covered in his contribution to the debate this afternoon he will have carried with him not only the Treasury Bench but also large sections of the House. He reinforced the impression made by the right hon. Gentleman the Foreign Secretary, who this afternoon had his first opportunity to give a more detailed account of his stewardship of his office. I found it a very impressive account against the background of Britain being a major international power, but no longer the super-Power, or one of the two or three super-Powers. The Foreign Secretary can rest assured that the account that he gave today will stand up to examination and will make a lot of his fellow citizens feel that our foreign affairs are in good and safe hands.
It was also important, beyond the politics of what my right hon. Friend said, that he stressed the economic side of the work of the Foreign Office. Those of us—a vast majority of the House of Commons—who have the opportunity to
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travel abroad know that the extension of the commercial and trade section of the Foreign Office, which started in a big way under the Foreign Secretaryship of the late Ernest Bevin, has had a great deal of success in recent years. I am far from satisfied with the amount of success that we are having, but some success can be seen. There are now in practically every country a number of people who know a great deal about trade and commerce, and who are very well informed. There are no better sources of information, and they are therefore in a position to back up our trade missions and our export drive.
The late Ernest Bevin was also concerned with strengthening the trade union representation in our foreign embassies. I wonder whether, in rightly strengthening the commercial and trade sections, we might in future be in danger of overlooking the strengthening of trade union representation. I do not want to dwell on this in detail this afternoon, but I would regret it if that representation were not extended.
During a visit to Portugal after the revolution of April last year, I found that some of our people there were extremely well informed politically, but I hope that as quickly as possible we can have permanently stationed at our embassy in that country some specialists in trade union affairs.
I agree with the right hon. Member for Chipping Barnet that no point is gained by a general denunciation of political parties in other countries with whose philosophies we do not agree. There is much more to be gained in quietly building up help and support for those whose philosophies we share. Effective trade union advice and representation in countries of that sort would make a useful contribution in that context. There is not enough of such advice in some countries where it would be most helpful.
I believe that whilst it is right for the Foreign Secretary to have a tour d'horizon and cover a large number of subjects, that is not a privilege that I can claim for myself. I therefore must confine myself to a few subjects and then sit down.
These debates are very useful to the House of Commons. I commend this idea to my right hon. Friend who is not only the Foreign Secretary but also a very

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influential member of the Cabinet and has something to do with the arrangement of business in this House. I know that if the Leader of the House and the Chief Whip were sitting next to him he would immediately point to those two gentlemen and say, "The arrangement of business is for them." None the less, he has some influence in the counsels of the Cabinet and with these two officers of the House, and I wish that sometimes we could have specially arranged foreign affairs debates on individual subjects in addition to these general debates, useful though they are.
The first subject on which I want to touch is one which I regard as most important, and which the Foreign Secretary dealt with namely, the aftermath of the Helsinki conference and the talks on mutual force reductions.
I share the Foreign Secretary's view about the way in which we ought to approach the aftermath of the Helsinki conference. I wish to add only one point to what he said. I am rather encouraged by the varying receptions given to the results of the conference in different countries in Eastern Europe.
If one examines closely the way in which the Press in the Warsaw Pact countries treated the result of the conference, and the way in which the propaganda experts in those countries have used those results, one finds interesting differences.
In the Soviet Union and the German Democratic Republic, in Moscow and East Berlin, for example, I find that the heaviest emphasis is on the two general principles that the Helsinki conference has concluded an important chapter in world history and finally ended any doubts about the results of the Second World War and, at the same time, has established the opportunity and possibility of moving towards further measures of detente and, in particular, force reductions and disarmament.
But in some of the other capitals of the smaller Warsaw Pact countries I find equally heavy emphasis on points hardly mentioned in Moscow and East Berlin. These are, first, the independence of each European country, all 35 of them, East and West, and secondly, the opposition to interference in the internal affairs of neighbouring countries. Those points are
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extremely valuable and they are among the major reasons why I supported the idea of a Helsinki conference. They are also the reasons which guided the Foreign Office in supporting such a conference, and rightly so.
It is of great importance, particularly to the smaller countries, that those principles, themselves of long-term historic significance, should be repeated by them with the respectability that the agreement reached at Helsinki has given to them. It has made it a little easier for them to repeat these principles, a fact which should not be underestimated. I do not think that any Member of the House does so—I do not wish to preach—but we must not always assume that everything can be said as easily in every political situation as it can be said in our debates here.
I take some encouragement from the fact that these different interpretations do exist. It would be the height of folly to question the adherence of the members of the Warsaw Pact to their alliance, just as we do not question the adherence of its members to the North Atlantic Alliance, and it would be foolish to engage in any propaganda to try to separate them. But it is of great historic importance to note that the desire to produce changes in their own way of living together is to be found among people in all countries. In that connection, I have not forgotten, nor shall I ever forget, what was a watershed in my own political experience—namely, the attempt by some people in Czechoslovakia to put what they called a human face upon their Socialism. Clearly, for all those who hold high the principle of non-interference in a neighbouring country's affairs, the principles of Helsinki and non-interference are important elements in their propaganda, and in Belgrade, in Bucharest and in other countries these principles are now repeated in strength every day.
As I have mentioned Czechoslovakia, in referring to what the right hon. Member for Chipping Barnet said about Spain, I would say that it is quite wrong, although we have heard a great deal about it recently, to accuse my right hon. and hon. Friends of partiality and prejudice in relation to political injustice in Spain. We direct our criticism wherever there is such injustice. We do it in

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Opposition and in Government. When there was unfair political justice in Spain, the Labour Party officially protested. We all protested. We sent lawyers there to try to defend the people involved, and we asked for political amnesty. Today, I repeat my demands, frequently expressed in public, but wherever possible privately as well, that the remaining political prisoners in Czechoslovakia ought to be released.
Whenever there has been contact with the representatives of those Governments, the Labour Party is on record as being instrumental in asking for and achieving the release of some political prisoners. The charge that we are selective is completely beside the point. It is simply not true, and it ought to be dropped. These matters are far too serious for a propaganda battle. I immediately agree that I am overcome with the hypocrisy of demands in a paper printed in East Berlin or in Prague calling for freedom in Santiago, 7,000 miles away, while those countries hold a lot of political prisoners of their own. That sounds a little hollow and does not add to the general international campaign. But it has nothing to do with the attitude of the Labour Party or with the attitude of my right hon. and hon. Friends who hold responsibility in the Foreign Office at present. The record of each and every one of them shows that they have fought all their lives against political injustice and the imprisonment of people for political reasons. I say that in passing, however, and turn to the second of only three points that I wish to examine.
My second point concerns the situation in the Middle East. As the Foreign Secretary rightly said, it is a most difficult situation but one in which he thinks that there has recently been a little more hope. I share his opinion and his assessment on that, but I am a little more apprehensive than he sounded. There is no harm in that. We on the back benches have a little more freedom in expressing some of our anxieties, and I should not necessarily wish our Foreign Secretary always to express his anxieties as much as I sometimes wish to do.
I found no quarrel in principle with my right hon. Friend's statement of the position, but in his summary and that given by the right hon. Member for Chipping Barnet I found missing one rather important
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precondition that preoccupies the minds of many of the people of Israel—still 40 per cent. of their citizenship—who have been inmates of a concentration camp. Among those 40 per cent., in particular, I find a deep fear that the aim of the physical destruction of the State of Israel has not disappeared from the minds of a number of important politicians in the Middle East.
The fear that the aim of the physical destruction of Israel is still present is an important factor in the equation. Obviously, in the steps at present being taken on the initiative of Dr. Kissinger, and in which, according to President Sadat, our diplomacy and our Prime Minister have had a useful hand, trust is an important matter.
I must say, however, that, on reading a verbatim account of President Sadat's Press conference at the National Press Club in Washington, I found reason for concern. President Sadat made two references which I found unforgivable. First, he delivered himself of the statement that before 1952, which was the year of the General Neguib revolution, many of the economic interests in Egypt were controlled by Jews. That statement has nothing to do with diplomacy or even with Zionism, as I have always understood it. That was a plain, anti-Semetic statement, and it gives great cause for concern when we remember that President Sadat was a politician who had to be put under surveillance by British authorities at the outbreak of the war against Nazi Germany.
I should not have wished to bring up that matter from the pages of history, but President Sadat's statement at the National Press Club in Washington, when he was the honoured guest of the President of the United States and of the American people, made me look up the record and made it necessary to bring up the question of that statement. It was an offensive remark. It was straight from the arsenal of Dr. Goebbels' Nazi propaganda, and it was completely out of place on a mission of peace.
The second statement that also made me feel concerned was in respect of the technical advice which President Sadat gave to the Palestinians. I have always been a severe critic of Mrs. Golda Meir. On one of the only two occasions when I have ever had the honour of having a

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discussion with her—the Prime Minister knows her much better, and my right hon. Friend the Foreign Secretary knows her well—I pointed out to Mrs. Golda Meir that I had always been critical of her administration for ignoring the Palestinians over a number of years. I know that I carry with me many of my hon. Friends and colleagues. Time was wasted and it would have been better for everybody in the Middle East if contact had been attempted and successfully taken up—
Mr. Richard Kelley: Does my hon. Friend agree that Mrs. Golda Meir once said that the Arabs did not exist, that they were not people?
Mr. Mendelson: I am saying that I have always been criticial of Mrs. Meir's attitude, and I am critical now, looking back at the fact that for too long the Meir administration ignored the position of the Palestinians. As I did in the past, I still regard it as essential that bridges be built between the Israelis and the Palestinians, as one of the main preconditions of a successful solution of the Middle Eastern problem.
However, when President Sadat was asked what advice he would have for the Palestinians in the Middle Eastern situation, he said in Washington, "I advise them to accept the setting up of a State within the suggested area as a first step." I regard that as a very dangerous statement. What does it mean? If the Palestinians accept the setting up of such a State as a first step, and not as a perament solution, it can mean only that President Sadat is encouraging them in, and approving of, their further stated aims of moving on towards destruction of the State of Israel. It casts grave doubts on the assumed position of the President of Egypt that the State of Israel should be permanently secured.
We have nothing on record about any intention of concluding displomatic relations. When the President of Egypt was asked on British television on Saturday evening by a British interviewer what he thought about future diplomatic relations he said that that must be left for the next generation. That is another disturbing statement. If one wants to live in peace with a neighbour, one should contemplate the setting up of normal diplomatic relations, after occupied teritorries have
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been released, as they must be, and after secure and permament boundaries for Israel have been secured.
Finally, I come to a matter which the Foreign Secretary chose not to deal with. He may think the time is too early, but President Sadat dealt with it. I would regard it as a most dangerous operation politically for Her Majesty's Government to agree to the sale of modern, offensive aircraft, such as the kind of warplanes that have been in the news recently, of which it is said that President Sadat wanted to order 200, to the Government of Egypt unless that Government undertake to establish full diplomatic relations with all their neighbours.
We all know that the sale of arms is subject to Foreign Office control and Foreign Office confirmation, and that no one can sell arms without the approval of my right hon. Friend the Foreign Secretary. I think it has always been our policy that if a country refuses to have diplomatic relations with a neighbour, and if there is therefore the danger of that country using these arms in military conflict with its neighbours, we do not sell arms to such a country. If these offensive weapons were to be sold to Egypt in the absence of an agreement to have diplomatic relations with Israel, as with all its other neighbours—the Government of Israel have stated that they are fully prepared, willing and, indeed, eager to have normal diplomatic relations with Egypt and Syria and to exchange ambassadors—I would oppose such a sale of arms and call upon as many of my colleagues who are prepared to do so to offer the strongest opposition to do so as well.
My last point concerns Portugal. In Portugal we are facing one of the biggest and most serious problems that we have faced for a long time. Since the revolution took place there, our hopes have been high, and we have been very much concerned that the revolution should lead to a parliamentary democratic system. But, of course, it is a little unrealistic to expect that to happen within a short space of time.
After the revolution, I was in Portugal as one of two members of the Political Committee of the Council of Europe. Our mission was to discuss with the Portuguese Government the possible entry of Portugal into the Council of Europe.

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As part of our duties, we met every member of the Cabinet. We met the President and the leaders of all the political parties. Also as part of our duties, we met the members of the Parliamentary Commission and the Electoral Commission, who were preparing the electoral system and the electoral register. These people were experts. They were preparing to visit a number of countries to inform themselves about other possible systems. But it was a far cry from people who were so specialised in these matters to those who were to organise the political parties.
We had the honour of being received by the Cardinal-Primate of Portugal. I asked him about the formation of political parties of the Right. He gave me a very characteristic reply. He said, "People may be a little hesitant to call themselves political parties of the Right". I found that, historically, an interesting and illuminating reply. It shows some of the problems of having lived for 48 years under a police dictatorship of the Right. Many respectable people have been closely identified with that police dictatorship. Everybody knows that the police that they supported had been trained by no less a person than Heinrich Himmler himself. He went there in 1936 to train them. Quite naturally, a lot of people who might be in the political parties of the Right are a bit hesitant about forming new political parties.
On the other hand, something that I regard as very important is the formation of independent and free trade unions. I went to see the only trade union centre then in existence and found that it did not deserve the name of trade union centre. It was a very small organisation, not the sort of organisation that we expect when we think of the TUC, and was very close ideologically to the trade unions in Eastern Europe. But alongside that, there are many other independent trade union organisations which have nothing to do with Eastern Europe.
That goes to show that it is a very difficult and slow process to bring about what Members of this House and other Western democrats might desire—that is, the creation of a parliamentary democracy in Portugal. It is unrealistic to be deeply disappointed if that does not happen overnight. What I think we can expect is something quite different. It is such
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institutions and such makeshift agreements in government as hold the situation open and make it possible for democratic forces to organise and form themselves
Here I am critical, both of our own Government and of other Governments in the EEC, that economic aid on a larger scale was not forthcoming much earlier. It ought to have been forthcoming many months ago. We ought to take some risks. We take many risks in international relations. We ought to be bringing a great deal of economic aid immediately to the help of the present Portuguese provisional Government and the President. That, of course, is what Dr. Mario Soares, the leader of the Socialist Party, and the leaders of the Democratic Party are demanding.
I hope that, before the debate ends, my right hon. Friend will be able to say something concrete about immediate economic aid to be provided and not worry that if things go wrong some of these materials will be used by the wrong people. It is much more important that the present provisional Government should be able to show some economic successes, particularly in the aftermath of the return of the people from Angola, who have no work to go to because they have no institutions and no plants to work in.
Economic aid should be provided immediately, and I hope that one of the practical results of this debate will be that my right hon. Friend will press the Foreign Secretary and the Cabinet, as the voice of the House of Commons that should go out from this debate, that economic aid should be stepped up and provided immediately. In that direction, we could make a useful contribution, which might not guarantee success but would be of some practical help to our friends in Portugal who need it most at the present time.
Several Hon. Members Several Hon. Members rose—
Mr. Deputy Speaker (Mr. George Thomas): Before I call the next speaker, I remind the House that well over 20 right hon. and hon. Members wish to speak, and unless we have shorter speeches a lot of them will be disappointed.
5.48 p.m.
Mr. Geoffrey Rippon: I shall not follow the hon. Member for

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Penistone (Mr. Mendelson) to any great extent. However, I fully support what my right hon. Friend the Member for Chipping Barnet (Mr. Maudling) had to say on the subject of Portugal. I am sure that Her Majesty's Government will do everything to support democratic forces in Portugal and help Portugal to become a full member of the European family. I think that the Foreign Secretary has done everything in his power, notably by his very successful and timely visit to Portugal. I am sure that he will not accept all the gloss that the hon. Member put upon events in that country. We do not want to see a dictatorship of the Right replaced by a police State of the Left.
Although I welcome what the Foreign Secretary has done about Portugal, I am rather disappointed by his recent conduct of our affairs, particularly in regard to the European Community. I feel that some of his actions are not quite in accord with the admirable objectives that he set out in his speech today. I am disappointed because it seemed to me that, up to the time of the referendum, he conducted the negotiations with skill and acted fully within the letter and the spirit of our Treaty of Accession. In consequence, the so-called renegotiations went forward with good will and understanding and resulted in a successful referendum vote, all without changing a word or a comma of the treaties and without breaching any of our rights or obligations under those treaties. That seems to me to prove that British interests, like those of other members of the Community, can be defended within the Community and within the treaties.
In the past few months, much of the advantage of acting in the Community spirit seems to have been dissipated not so much by the context as by the manner in which the Government have conducted our policy. For example, I thought that we took an absolutely dismal attitude on the policy for the environment and pollution. That was an area in which we had taken the lead. We know our economic difficulties, but there was no need for the Government to be quite so discouraging. In these matters it is our good faith that is at stake. It is not automatically taken for granted and has not been since the previous Labour Government imposed the illegal charge on our EFTA partners,
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quite apart from their see-saws in opposition.
Certainly the Foreign Secretary must defend British interests. President de Gaulle was never backward in the defence of French interests. He had a simple, direct philosophy from which he never departed and for which he won respect. He always honoured the word of France and he fought for French interests within the context of the treaty.
Every country in the Community understands that Britain has a special problem as an oil producer and that she must protect her investment in North Sea oil, but I do not believe that we are advancing our interests by the ham-handed attitude which the Government have adopted towards the world conference on development. As the Foreign Secretary said, it is now much more than a world conference on energy; it embraces the whole range of development, raw materials and the consequent financial implications.
As the Leader of the Liberal Party said, we might well have been a little more on the mark in the early stages in determining the numbers being represented at the conference. We might have sought the leadership of the Community delegation. Certainly we are entitled to take every action to secure a common position for the Community which adequately reflects our own interests. But we have no reason, and, I believe, no interest, in being quite so divisive as we continually appear to be in our attitude, and I hope that a satisfactory compromise will be sought.
In seeking that compromise, we ought to remember three matters. The first is an old myth which I hope can now be dispelled. Our ownership and control over our oil and other natural resources is no more an issue than is French sovereignty over Paris. Secondly, however important we may think it to be at this moment in time to have a floor price, or a minimum safeguard price, for our oil, we should be unwise to go on relying unduly, as we appear to be now, on North Sea oil as a panacea for all our economic ills and debts. Thirdly—and this, above all, should be borne in mind—there are the wider interests to which the Foreign Secretary referred. There will be much more at stake at this conference than oil prices. It would be much better for us

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to make it clear that we were studying these problems in a much wider context, particularly in relation to developing countries.
The current surplus of the OPEC nations is likely to be halved in 1975 compared with 1974, partly because of the economic recession but partly because of the enormous increase in OPEC imports from which we could benefit much more than we have already done if we deliver the right goods at the right price at the right time—for example, the car parts to Iran.
The real losers—and we should be showing this in our attitude—are the developing countries whose raw material prices are falling, which need help and which more than us need floor prices. The developing nations do not want handouts—the sort we referred to on Friday—or capital-intensive projects. They want trade and, above all, a fair price for their products.
The United Kingdom has world-wide trading interests, I therefore regret that the Government often give the impression that they are motivated by the narrowest, and ultimately the most self-defeating, of objectives. I hope that at the Summit Conference in Rome on 1st and 2nd December we shall see a much more statesmanlike and forward-looking view, because co-operation is as much a British as it is a Community interest.
We have done well out of the Community so far. The Chief Secretary to the Treasury said last week that we were a net beneficiary to the extent of £27 million last year. We did much better than the most optimistic forecast of even the most ardent pro-Europeans a few years ago. But we cannot hold ourselves out as a possible rich future member of OPEC and at the same time claim that we are so poor that we must have more and more out of the regional, social and other funds. I believe that less economic self-interest and a great deal more vision and leadership would be better for us all.
I hope that in Rome our Foreign Secretary will make a positive response to the demands not only for direct elections but for a European passport union and for further advances in the light of Mr. Tindemans' forthcoming report on European union.
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I accept that there are many practical difficulties with regard to direct elections. They argue themselves. But it is depressing the way in which the Government concentrate on the practical difficulties and do not emphasise the fact that it was the last Labour Government that in 1969, in the Saragat declaration signed by the present Prime Minister—the Government of which the present Foreign Secretary was a prominent member—committed us to direct elections, and that commitment has been honoured by successive Governments. We should be emphasising that, and not the difficulties.
There are many other areas where we could be more manifestly adopting a forward-looking position. Now that we are no longer obsessed with the question of enlarging the Community, we should be addressing ourselves positively to the widening of its horizons, the strengthening of its institutions, and the promotion of its further integration. We should be saying that step by step the political development of the Community should keep pace with its economic consolidation. It is Britain that should be saying that commercial economic policies cannot be implemented without taking account of the wider implications on external relations. It was Britain that said that the great contribution we would make, as the centre of the English-speaking peoples of the world, would be to bring in the Commonwealth and broaden the outlook. Unfortunately, that is not happening.
I do not believe that a European foreign policy is any good unless it is related to, and compatible with, the efforts of other nations, and other groups of nations, to come to terms with global problems. For example, relations with developing countries cannot be confined indefinitely to a series of commercial arrangements if we are to make an adequate contribution in the various international organisations where the Community should be speaking with a common voice.
European co-operation is the necessary basis, but it is not sufficient for action in many such spheres. The Foreign Secretary mentioned the most important—the control of nuclear power. There are others—the problem of food production and distribution, the exploitation and

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the conservation of the resources of the sea, and the safeguarding of the natural environment. These are the spheres in which Britain was a natural leader and ought to continue to be so. They are just as important as the problems of raw materials and energy. I do not suggest that we are neglecting them, but we are giving the impression in Europe, and elsewhere, that we are too motivated by narrow self-interest.
The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): I wonder how the right hon. and learned Gentleman equates the picture he is now presenting with the rôle which my right hon. Friend explained, and which the House knows Her Majesty's Government took to the Commonwealth, to the EEC and to the Special Session of the United Nations General Assembly, on the question of economic relations between developing and developed countries, with special concentration on commodity agreements. Surely this was essentially outward-looking, and surely it was the unity of the Community in that Special Session of the General Assembly which did as much to bring about a general agreement.
Mr. Rippon: Certainly we have taken a series of initiatives of a valuable kind, and they fit in with the Foreign Secretary's speech today. The fact is we are continually giving the impression, in Europe and elsewhere, that when it comes to the crunch our attitude is a narrow nationalistic one.
The Minister has just referred to the progress which resulted from the common attitude of the Community. How important, therefore, to have a common attitude at the world conference which is to take place in Paris over the next 12 months, whether it is on energy, materials or development.
Our purpose should be to give a new dimension to our European policy. I agree with the Foreign Secretary that we should not underestimate our potential influence in the world. It is Britain which should be warning our fellow members of the Community against adopting too introspective an attitude. We should be asking them to come along with us in the various initiatives we have taken.
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Equally, we must be responsive to their initiatives. We look as if we are sinking, time after time, into the same introspection ourselves. It is Britain which, within the Community, should be exercising our influence in all the organisations of which we are members—Western European Union, NATO, the Organisation of Economic Co-operation and Development and, above all, the Council of Europe, which embraces the associate members of the Community. As a former leading member of EFTA, we should recognise our special responsibility towards it. I rather regret that, at present, we concentrate in the House rather too much upon the affairs of the European Community and the policies of the Community without having regard to the nature and importance of the work taking place in the Council of Europe.
Britain should be seeking every opportunity to identify every nation in Europe—including those behind the Iron Curtain—with every aspect of the work of the Community in which they can take part—industrial, environmental and regional. In moving towards a true European unity, the new European patriotism, we ought to be trying to develop is a new dimension of, and not a substitute for, our national identity.
The Foreign Secretary spoke of our changing position in the world since 1945. Certainly, in the modern world greatness is not manifested by military power or territorial domination. We must be able to defend ourselves—that is a prerequisite of our position in the world. But our influence is going to be increasingly dependent upon our reputation for honest dealing, our economic stability and our technological progress. All that can be reinforced by the influence of our culture, our language and our common law, which is spread among all the English-speaking peoples and beyond. We can hardly export our concept of parliamentary democracy at the moment because all we have exported to India is the notion of how Parliament can be used to subvert the rule of law à la Clay Cross, or how to undermine the freedom of the Press.
Certainly we have a great deal to contribute in these directions. There is a feeling that we are on the retreat in so many areas. It is sad that the President of Egypt should have to come to this country to urge us to take more interest

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in the affairs of the Middle East. I welcome what the Foreign Secretary had to say of the interest the Foreign Office is to take in the expansion of overseas trade. But I do not think that is compatible with, for example, the closing down of our consulates in Nice or Miami. I think that is the sort of useless and foolish economy that damages rather than reinforces our national interest. I hope the Foreign Secretary will be able to stand up against the Chancellor of the Exchequer and not have an absurd position where one applies the same sort of percentage cut to foreign or defence policy as one does to the enormous Vote of, say, a Department like the Department of the Environment, about which I know something. It is the sort of economy that is beloved by anonymous civil servants, like AB and CD, but it does not help promote British interests.
Finally, I should like to emphasise something to those hon. Members opposite—and I am afraid there are far too many of them—who think that we can cut down on defence and our foreign policy and who, time and again, adopt a rather nationalistic view as they did in our debates on joining the European Community. It has been well said that it takes two men to make one brother, and internationalism really requires nations to interrelate. I should like the Foreign Secretary to emphasise far more than he appears to be doing at present in Europe our determination to interrelate our policies with our colleagues in Europe and our allies in the rest of the world.
6.5 p.m.
Mr. Evan Luard: My right hon. Friend the Foreign Secretary, in his wide-ranging and searching opening statement, mentioned the increasing need in the modern world to reach agreed multilateral solutions to many of the problems which we face today, such as those of world recession, inflation, energy problems and monetary affairs. My right hon. Friend spoke in particular of the forthcoming summit at Rambouillet and the conference in three weeks' time concerning energy problems and of producers and consumers generally.
I wish to devote my speech to this question, which is of special importance in the world today, of establishing the right
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procedures for securing multilateral agreement of this kind, and to refer in particular to one special aspect. It has become a truism to say that, in the modern world, all nations have become interdependent. With the rapid growth in communications, the decline of distance, and the tremendous increase in trade and other contacts between nations, it is the case that there are a large number of problems today which can be solved only on a joint basis.
For hundreds of years, until a decade or so ago, nations were in the habit of thinking in terms of solving their own economic and other problems, in almost total isolation and independence from each other. Today, that is no longer possible. Most of the great and difficult economic problems of the world are problems for all of us and to a large extent can be solved only by common action.
It is, therefore, important to consider how we can improve the institutions and procedures for reaching joint agreement on such matters. There is no shortage of institutions today for considering questions of that kind. Indeed, there is a plethora of institutions, but unfortunately often not in close or tidy relationship with each other.
For discussing specialised problems there are a number of very effective and well-recognised international institutions, mainly specialised agencies of the United Nations. If one wishes to discuss the problems of civil aviation, everybody knows that the place to discuss that is in ICAO, the International Civil Aviation Organisation, or if they are problems that concern the airlines in particular, in IATA. Everyone is aware that the place to discuss problems about shipping is in IMCO—the Inter-governmental Maritime Consultative Organisation, which is based here in London. If one wishes to discuss telecommunications problems, the place to do so is in the ITU and postal problems in the UPU, and so on.
It is true that there are some specialised subjects which are not at present well covered by such organisations. An obvious example is the question of energy. There is only one specialised agency in the United Nations concerned with energy and that is the IAEA, which is concerned only with atomic energy, about which there are important problems, but this is

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not a suitable body to discuss energy problems in general.
More recently, one or two partial bodies have been established, representing particular interests, such as OPEC, representing the oil producers, and the IEA representing the oil consumers. These are obviously not suitable bodies for general international discussion of energy matters, although in certain cases there may be negotiation between such bodies. At present, therefore we rely on ad hoc conferences such as the two which are shortly to take place, to discuss these matters. I think there is thus a good case for the establishment of a specialised agency of the United Nations devoted specifically to the discussion of energy problems.
Another specialised area where there is an unsatisfactory division of labour is trade, where we have one organisation, GATT, responsible for the hard detailed negotiation of binding agreements among nations but which, unfortunately, still has only a limited membership of about 80 members. On the other hand, there is UNCTAD, which is a much more political body, much wider in its membership with over 140 members but where there are, on the contrary, rather disorganised debates and the mobilisation of pressure groups on behalf of one group of countries or another. There is a need for some kind of rationalisation or integration of these two bodies, or a more effective division of labour between them.
But for the discussion of international economic problems outside trade there is an unsatisfactory situation. There is no body which has the specific task of discussion of questions of this kind. For monetary questions, there is the IMF, the authority of which is unquestioned in all parts of the world, and which has developed a tremendous degree of expertise in these affairs.
For development, the obvious place for discussion is the World Bank, although here, too, there is considerable dispersion of activity, because in addition there is the United Nations Development Programme, UNCTAD, the regional economic commissions of the United Nations, and a number of other bodies concerned with development problems.
But for the discussion of the central economic problems of the world, the
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kind of problems that will be discussed at the summit next weekend—problems of world recession, world inflation, energy prices and matters of this kind—there is a lack of any body whose specific task is to discuss such questions. I suggest that there is an urgent need for a more effective international institution for this than we have.
Now many people will like to see the United Nations become the main body for discussing questions of this kind. The United Nations was intended to be not merely a body for discussing matters of peace and security but, as the Charter laid down, a centre for harmonising the actions of nations.
All of us know and recognise, however, even those of us who are ardent supporters of the United Nations, that the United Nations is not at present well equipped for the discussion of many subjects of this kind. It has an enormously wide membership of 140 nations, taking part in almost every debate. There is generally not a very fair representation since it is based on one-nation-one-vote, regardless of a nation's size or importance. There is the tradition of diffuse debate and angry altercation. And there is the addiction to the passing of resolutions by a majority vote.
For all these reasons, the United Nations, as it has been traditionally organised, is not very well equipped for the discussion of difficult economic issues. What is really required is hard negotiation rather than wide-ranging public debate and altercation. The United Nations itself has become conscious of these defects, and over the past year or so has been giving considerable consideration to the way in which it could be better equipped for the debating and discussion of matters of this kind. Just a year ago, at the end of the last regular session of the Assembly, at the same time as the United Nations decided to seek to promote discussion of a "new international economic order", it asked the Secretary-General to set up a committee to look at what was called a "restructioning" of the United Nations, to enable it to undertake more effective discussion of matters of the kind I have been talking about this afternoon.
The Secretary-General appointed such a committee early this year, and I had

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the honour to be asked to serve on it. The committee met between February and May and we produced a report which, I am sorry to say, was totally ignored in the Press of the world.
Personally, I think that the outcome of the committee's discussions was a very satisfactory one. It was certainly widely welcomed in the UN itself, if only for the reason that although we represented 25 nations of the world, although we had within our committee the United States and the Soviet Union, rich countries and poor countries, countries from Latin America and Africa, we did, in fact, come up with an agreed report.
That in itself was rather remarkable, because although we were supposed to be so-called "experts" on the UN and, therefore, not specifically representing Governments, in practice many of the representatives—not including myself I should say, but many others—were either ambassadors or ex-ambassadors of their Governments and in very close contact with them. So when they put their hand to the report they were to a considerable extent committing their Governments. The fact that we were able to come up with an agreed report on a number of contentious matters affecting the UN was therefore itself a matter for—congratulation would be the wrong word—for satisfaction.
The report is at present being considered by an inter-governmental committee within the UN. I shall not describe in any detail what the recommendations were, because it was a fairly lengthy report and we went into a lot of detail. I should like to recount briefly the five main recommendations, which personally I very much hope will be put into practice, and I should like to think that our Government will be giving support to the implementation of the recommendations.
The first recommendation was specifically designed to overcome the problem that I mentioned earlier—that the UN at present is not well equipped for hard negotiation between Governments. Therefore, we suggested that where such negotiation was required, say, on commodities, energy prices and things of that kind, the UN should in some cases establish negotiating groups where there would be representative Governments representing a whole set of nations. Perhaps there
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would be nine Governments negotiating with one other, with a chairman, who would be a full-time chairman whose task it would be to knock their heads together and try to bring about an agreement. They would meet over a period of, say, a year, and come up with a recommended agreement or solution of the particular problem. It was hoped that the UN might then give its endorsement to such a proposal, and that this might then make possible a wide-ranging multilateral agreement on a subject of that kind.
Secondly, we suggested a rationalisation of some of the existing work of the UN, by the merger of a number of separate programmes and funds which exist at the present time, some of them operating in very closely-related fields, and putting them together under a single international development authority. Such questions as the environment, for example, population, food programmes or questions of that kind, would be put together under this development authority.
Thirdly, we suggested that there should be appointed a very high level director-general for development and international economic affairs, who would be second only to the Secretary-General and who would be of sufficient status to be able to promote agreement among Governments on matters of this kind and be able to deal on more than equal terms with the heads of the specialised agencies who, at present, for various reasons, are sometimes rather difficult for the UN to deal with.
Fourthly, we wanted to see an improvement in the work of the ECOSOC, the Economic and Social Council, so that it more often calls specialised conferences on particular matters at which the representatives would be not just general-purpose, UN-mission men, but, if possible, Ministers from Governments, or at least high-level officials who were experts in these particular areas.
Finally, it called for a great improvement in the co-ordination of the work of the UN and its specialised agencies, which are at present inclined to go their own ways, barely knowing what other parts of the organisation are undertaking, even though they may be working on closely related matters. I do not know whether the report will be implemented exactly in the form in which we have suggested. I do not know whether that necessarily

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matters. But I do hope that a substantial part of our recommendations will be implemented, because I am sure that the result will be a great improvement in the efficiency of the UN's work, and may even make it possible for the UN to act, as I suggested, as the centre where some of the important economic and social questions which nations have in common may in future be resolved. Nobody can deny that one of the main trends of the modern world is that nations have become totally dependent on each other, as my right hon. Friend the Foreign Secretary pointed out, so that we badly need more effective institutions for the discussion of matters of this kind.
I very much hope, therefore, that the Government will pursue this matter and that, if possible, they will seek to promote the implementation of this report, which will, I hope, at least make the work of the UN more effective than it is today.
6.21 p.m.
Mr. Russell Johnston: I hope that the hon. Member for Oxford (Mr. Luard) will excuse me if I do not comment on his remarks, important as they were, but I wish to use the limited time available to me to deal with some questions that were opened up by the right hon. and learned Member for Hexham (Mr. Rippon) in his admirable contribution to the debate. In particular, I should like to look at our rôle as a country in the new circumstances following the referendum.
Dean Acheson's oft-quoted and misquoted remark—I am not sure which I am doing myself—about Britain having lost an empire and not found a rôle should not be thought to be true any longer, because after the referendum our rôle should be quite clear. However, it seems to me that we are steadfastly refusing to play it. The referendum was not only about staying in the Community as it is. It was about playing a full part in the development of the Community, and this we are not doing. Unless we alter course and pursue a less negative and hesitant approach, we are likely to place the whole concept of the Community in jeopardy.
It is worth repeating endlessly that the basic concept of the Community is supranational. To place that concept in
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jeopardy would gravely imperil the prospects of each individual member of the Community, because, unless we can restrain the excessive nationalism which inhibits the Community, rather than contribute to it, which is what we are doing, we shall never be able to resist the external challenges that we face, nor reach for the prizes of economic stability, shared prosperity and political influence with which all our futures are bound up.
There is a background of great political instability in southern Europe, in the Mediterranean. Much of it has been touched on already. There is the example of Portugal. We do not know what Spain is on the edge of doing, and Italy is much in need of a supporting arm, so to speak. Yugoslavia is waiting. Greece is newly returned to democracy and she is on the verge of applying for entry into the Community. I hope that the Government will accelerate that entry, because I agree with the right hon. Member for Chipping Barnet (Mr. Maudling) that it is of the most profound importance for the future of political stability in Greece that she should be able to come into the Community quickly. The problems of Cyprus are unresolved and the situation in the Middle East is still explosive, although now slightly more optimistic.
In that kind of situation, which is arising against a background of declining American influence—Kissinger excepted—or certainly weakened American influence, the need for a coherent European Community approach is immense. Europe has a positive rôle to play as a mediator, and it is particularly depressing to see the Government's position as being mainly passive, and at worst negative.
Reference has been made to the Energy Conference. The Foreign Secretary was quite bland about it. He is very good at being bland. Nevertheless, the fact is that a tremendous row is taking place now about Britain's attitude, because Britain is very much the individual country out of step.
The right hon. and learned Member for Hexham referred to lost opportunities to take initiatives. Six or seven months ago there was much talk about Britain's taking an initiative on a Community energy policy and trying to match the need for Britain to have a guaranteed floor price, the need

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for the Community in turn to have some guaranteed supply, and the need for further availability of funds for more North Sea development.
Now the Foreign Secretary says that there is no common energy policy and he makes that the defence for his Gaullist approach—for that is what it is. What the expected differences between our country and the other members of the Community would be, or where there were likely to be frictions and tensions, was not made clear. But the repercussion effect is undeniable. As the right hon. and learned Member for Hexham said, it is not a question of doing things in isolation, believing that we can put them in a little box, shut the lid, turn the key and forget about them. They all interrelate, and if we are difficult in certain areas, other colleagues are less responsive in other matters.
There is the question of direct elections. The Foreign Secretary, ably supported by the right hon. Member for Chipping Barnet, made great play about being practical. He said that we must be practical and not airy-fairy, that we must not run off with notions, that the thing must work: very good. The year 1978 was the target that was set down at the summit conference, and presumably the Prime Minister and the Heads of State set out a practical possibility, although from the beginning it was recognised that it might have to be done in two stages.
As the report of the European Parliament recognised, there was a stage one in which there was an election according to individual national systems, regrettable as in some cases these may be, and a stage two whereby a common system was evolved. What is so worrying about the Foreign Secretary's approach to these questions is that he keeps saying, "I am not obstructing anything". But clearly he shows no enthusiasm for them, and that is what concerns me.
The same applies to the Tindemans' report, which is expected in December or January. The Government have given no indication, not even in the most general terms, of how they see the institutional future of that. There is not even a clear indication that they see a political union as a positive future.
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I come now to the Regional Fund. By giving way to the Treasury, the Government are in grave danger of undermining the possibility of extending and enlarging the fund in the future. The Germans will not pay more if it is to be used as a substitute for other British expenditure. If it is not to be used as it is intended—as we are committed to use it—namely, as an addition to existing regional expenditure, its future is not very good.
The right hon. and learned Member for Hexham referred to what he called the dismal attitude on pollution. The Department of the Environment is the one department, of all the departments in nine countries, to say that safety glass is something that we will not accept because it affects certain vested interests within the United Kingdom. It does not matter about the effects of not using the glass on those involved in accidents. But we expect our colleagues to respond positively to our proposals on overseas aid, despite the fact, incidentally, that one of the notably disappointing aspects of the White Paper on aid—which in many respects was excellent—was the continued adherence to the 60 per cent. limit in the relationship between aid and the purchase of British goods.
I come now to the Sadat visit, which I regard as an extremely significant and important event. The first political activity of significance in which I participated was the opposition to the adventure in Suez. To see, many years later, the President of Egypt coming to Britain is greatly to be welcomed. With respect to the hon. Member for Penistone (Mr. Mendelson), I regret the attack which he launched on the President of Egypt. He preceded that attack by remarking that denunciations of internal situations in other countries were often less than helpful. I think that was so in this case.
The hon. Gentleman is right in saying that we cannot expect instant action from the Soviet Union in connection with Basket III, or the Helsinki Agreement. It is a long and difficult process.
Mr. John Mendelson: I never said that.
Mr. Johnston: If the hon. Gentleman will allow me to finish, I will allow him to intervene. The hon. Gentleman said that we could not expect instant action

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following the Helsinki Agreement. All that we can expect is movement. He enlarged on this by reference to newspapers in Germany and so on. He mentioned the difficulty of expecting any kind of instant pluralistic democracy in Portugal. There are difficulties, and the hon. Gentleman instanced the problem of the Right-wing parties. It must be recognised that there are problems in both of those areas. Equally, it must be recognised that that is also the case in the Middle East.
Mr. John Mendelson: I never said anything about instant action on the part of the Soviet Union about Basket III. I did not mention the subject. The hon. Gentleman must have muddled up my speech with that of someone else. I did not mention the Soviet Union in that connection at all. Therefore, there is no parallel. I said that I welcomed the advance made with the limited agreement in the Middle East, but that I had an anxiety which the Foreign Secretary did not express but which I wished to express. I then quoted from the Press conference in Washington and the National Press Club.
Mr. Johnston: I do not think that it is profitable for us to continue the argument here. Perhaps we could do so outside.
I very much hope that the new and improved relations between this country and Egypt will not be pursued simply on the basis of Britain and Egypt, but that we shall seek by all available means to develop a joint European initiative in the Middle East. There is no question but that the Community, acting coherently as a whole, could do a great deal. We have an opportunity here to take an initiative and a lead. As the right hon. Member for Chipping Barnet said, we must maintain the momentum. That is of the greatest importance.
The right hon. Gentleman expanded on the question at some length, and I do not wish to go over the same ground, except to say that his approach was one which I found broadly acceptable. The step-by-step approach makes a great deal of sense. One cannot expect a problem so intractable to be susceptible to an instant, global solution, but, by building up trust and removing fear, the step-by-step approach is the right one.
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In conclusion, I wish to make five almost one-sentence points—I know the weakness of doing that. First, how exactly are we to receive monitoring reports on the progress of Basket III at Helsinki? I accept the Foreign Secretary's point that we cannot expect matters to move quickly, but it is important to have a monitoring of the situation and know whether progress is being made.
Secondly, the Chancellor referred this afternoon to import controls and said that he was opposed to them. I hope, therefore, that when the Foreign Secretary, or the Prime Minister, goes to Rambouillet, he will support the Japanese Prime Minister, who, I understand, is making this question his main subject of address. Equally, I hope that he will make it clear to the Japanese Prime Minister—and I am fortunate in that I have just returned from a visit to Japan with a parliamentary delegation—that if we are prepared—rightly, in my view—to continue to offer open and free trade with Japan, she in turn ought to take a close look at her trading arrangements, which often throw up more obstacles to British trade than she encounters in entering our market.
My third point concerns Cambodia. I do not know whether the Minister of State is able to speak on this subject or has knowledge about it to which others are not privy, but I returned from South-East Asia believing that terrible things were happening there. I know that we are relatively impotent in that situation, but if the reports are correct—I do not know whether any authentic reports are available to the Minister—our abhorrence should be expressed.
Fourthly, South-East Asia looks relatively stable, if only because individual countries are turning in on themselves to settle their internal problems, but I hope that it will be possible to lend some support to a country such as Thailand, which is wrestling in difficult circumstances with a parliamentary democracy. It is of the greatest importance that that parliamentary democracy, in a country like that, which has never been conquered by any European Power, should be sustained.
Lastly, I take the point that general denunciations are often counterproductive, but, none the less, I say again

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that I wish the Government would find it possible to be rather more outspoken about the repression of minorities, such as the Kurds, or prolonged political incarceration such as we see in Indonesia, despite the traditional Foreign Office attitude of non-interference in internal affairs.
Mr. Eldon Griffiths: What about Spain?
Mr. Johnston: I gave those only as examples. I assure the hon. Gentleman that, if I wanted to continue with examples, I could go on for a long time.
I return finally to my basic theme. The essential issue now is that we are members of a great community through which we can share in the evolution of a great force for freedom in the world, based not on aggression, but on democracy and co-operation. I do not think that we are showing a sufficient realisation of this, and it would be sad if that opportunity were cast away as we clutched at the tattered shreds of former Imperial grandeur.
6.40 p.m.
Mr. Colin Jackson: I followed with great interest the speech of the hon. Member for Inverness (Mr. Johnston) when he made his tour d'horizon until he was unfortunately brought down by my hon. Friend the Member for Penistone (Mr. Mendelson) somewhere between Sadat and Helsinki. After that I lost him. I heard a mention of Cambodia and, I think, of Iceland, but perhaps I may now start off on my own.
Of all the years during which I have had the privilege of speaking in the House about international relations this is one of the most fascinating years. In my early days we were overshadowed by the cold war. There was still the memory of the great old hawks and eagles such as Dulles and Stalin. In some years we tended to put a label on them; the year of the Cuba crisis, or the year of the rape of Czechoslovakia. I do not think one can label this year. It might be called "1975—the year of the doldrums" or the "Helsinki year". However, it is a fascinating year, and one in which in our debates we have every right to roam around the world and discuss the various combinations and permutations that
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would make up a more peaceful global community.
I want to draw on some of my experiences during the past few months to offer my own comments on the world and Britain's rôle.
First, in mainland China this summer I was immensely struck by the liveliness—the outward-lookingness, again—of Chinese foreign policy, particularly with regard to China's interest in Europe. China is welcoming the fact that Britain, through the referendum, said clearly that she intended to play a full part in the Western European economic and political partnership. China is obsessed—as the right hon. Member for Chipping Barnet (Mr. Maudling) said—with fear of the Soviet Union. I went through the airraid shelters in Peking which the Chinese were anxious to show visitors.
I think that Britain needs to move up a little here within the European context. Chancellor Schmidt has been to mainland China, and the French very early on indicated their interest in Peking. I am glad that the Foreign Secretary will be going to China next year. There are small diplomatic details about whether he gets two pandas, one panda or three pandas. The right hon. Member for Sidcup (Mr. Heath), the former Prime Minister, rendered signal service to Britain in his visits to China, but the visit to China next spring by the Foreign Secretary is very necessary.
There is a sense of positive uplift about mainland China today and its relations with us and with Europe. It is important that this momentum should be sustained, because we do not want to be hanging around dependent on Kissinger. Europe does not want to be too obsessed with a fear of China. It is not for us to take sides in this quarrel, but in 1975 and coming into 1976 British foreign policy will have a useful job to do in furthering our relations, economically, culturally and diplomatically, with mainland China at a critical stage. This is a stage where the scene will shortly change, with the leaders, Mao Tse Tung and Chou en lai, alas, aged and gravely ill.
The story concerning a second country which I visited this summer is not so good. I refer to our relations with India. I am sorry that the right hon. and learned Member for Hexham (Mr. Rippon) spoke as he did; I particularly deprecated his

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snide comments about India and Clay Cross, and his cursory dismissal of the people of that great sub-continent. One of the tragedies of the post-Second World War world is that the great opportunities that the late Mr. Attlee, Lord Louis Mountbatten and Pandit Nehru presented for Anglo-Indian relations have not been achieved. It is a matter of regret that the West as a whole has not managed to sustain good relations with India. Particularly unfortunate has been the United States' appalling record of miscalculations about Delhi. India has been unfairly treated by a lot of the Press, and overtly critically looked at by some of our politicians.
I had the privilege of having a long conversation with the Indian Prime Minister, Mrs. Gandhi, and some of the comments she made I did not see repeated in the Press here. One extreme Right-wing party—the Jan Singh—in its newspaper The Motherland talked about the lady being disposed of. I can imagine that if anyone in Britain suggested that our Prime Minister should be disposed of Lord Goodman—whatever his present r÷ le—would issue a writ pretty quickly to any paper that made such a suggestion.
There is no doubt that some of the comments made by Indian leaders such as Jai Prakash Marayan, whom I greatly respect, went much further than anyone in this country would tolerate in terms of remarks about law and order, saying that the Government should be brought to a halt, that the police should not fulfil their duties, and that the Army should ignore the President. Comments of this kind were way outside normal democratic behaviour. Clearly, we must regret that there has been a slip back in Indian freedom, but let us get it into perspective.
I should like to see in the near future our own Prime Minister visiting Delhi. After all, he is well known in Washington and Ottawa, so why not somewhere east of Suez? I am sure he would be extremely welcome if he made such a visit.
I was pleased to note that this year in India is the year of the good harvest. The monsoons have come. It is green where it used to be grey and sandy. Indians will feed themselves, and with inflation down, even though to a sizeable limit, I hope that British foreign policy, in this coming
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year, will have more uplift and be more positive in its relations with Delhi.
In conclusion, I wish to comment on the Middle East. Both Front Benches, and almost every speaker, have said that the momentum towards settlement must be sustained. They have not, perhaps, underlined what so many of us realise, that Syria has the ability now with missile armaments to strike at Tel Aviv, and that the Israelis have the ability to strike at Cairo and Baghdad. We dare not have the fifth war, and therefore our momentum must be sustained.
I was especially interested in the comments of my hon. Friend the Member for Oxford (Mr. Luard) about the United Nations and of the right hon. Member for Chipping Barnet about the presence of the United Nations on the Golan Heights. In this coming year surely we must have a real drive for a greater involvement—successful though it already is in Sinai—of the United Nations peacekeeping forces. I believe that our bases in Cyprus could be used also as a NATO logistical and overseeing aerial base to supervise the move towards peace.
My hon. Friend the Member for Penistone was alarmed by the speech of President Sadat. I was delighted by the success of the visit to London of President Sadat last week, during which he said "Take the West Bank as a first step." My hon. Friend thought that the second step might mean that President Sadat wanted to go westwards towards the Mediterranean. I believe that if one peers into the future through a mirror darkly, one sees that it is more likely that Palestine will expand to the east.
The Rabat Conference has recognised the PLO as the legitimate spokesmen for the Palestinian people. The Palestinian people live on the West Bank and on the East Bank. How many people in Amman are other than of Palestinian origin? King Hussein, an honourable, brave and courteous man, has promised that in time he will, by means of a referendum or some other device, recognise the will of his people. I am speaking of a possible future situation. I think Palestine is more likely to move towards the east. A Palestine which is solely based on the West Bank is not big enough to exist. Paradoxically, one might say that the lebensraum is not there.

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I hope that we shall move on to Geneva, and that there will be an unofficial conference to begin with, because we have problems with the national status of the PLO. We dare not let it freeze over at this stage, otherwise there will be the fifth war, and that will be the final war.
My final comment is that—if I may use a vulgarism—this world is up for grabs. It is much more interesting than it used to be. There is much more room for diplomacy on the part of our own and the French Governments. The Foreign Secretary said that America cannot dominate the world now as she used to; and, therefore, there is now more opportunity for initiative. The situation is less depressing than it was a few months ago, before the Sixth Special UN Conference on International Economic Co-operation. Again there is dialogue as opposed to deadlock. Therefore, Britain has a rôle to play. It has the energy required to do it and I trust that that rôle will be fulfilled.
6.51 p.m.
Mr. Julian Amery: I support strongly what the hon. Member for Brighouse and Spenborough (Mr. Jackson) has just said about the importance of strengthening our relations with the Chinese People's Republic. Despite all the deep ideological differences that divide us, there is an important community of interest between us, and that is something that we must nourish. That can perhaps best be done by frequent high-level contacts between Government, the House of Commons and the rulers in Peking.
I hesitate to say much about the hon. Gentleman's comments about India. The conflict between the maintenance of freedom and the maintenance of law and order in India is not new. We, as Members of the House of Commons, have had experience of it over many generations, and I dare say the rulers in Delhi will have experience of it for generations yet to come.
I was glad that the Foreign Secretary began his speech by stressing the close link that must exist between foreign and domestic policy. Foreign policy is not some exotic, specialist study. It is a bread-and-butter problem, perhaps more than any other. No doubt we are no longer the strong Power that we were, but we remain just as dependent as at any time in the nineteenth or early twentieth
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centuries on access to markets, access to raw materials, and on the contributions that our overseas investments and invisibles make to our balance of payments. Without these things, our present financial situation would be even worse than it is, and that is saying a good deal.
No doubt when our Navy was the strongest in the world and our currency was the strongest we could afford to sit back and await developments and decide how to react to them. In the much weaker situation that we are in today, we need to have a strategy to protect and to promote our interests. If one has a strategy, one must have a power base from which to operate. No one should understand the significance and importance of a power base better than the Foreign Secretary.
Let us look briefly at some of the dangers that threaten and the opportunities that are offered to us. I agree with the Foreign Secretary that it is much too early to try to draw up the balance sheet yet about the consequences of Helsinki; but we can say that the omens are so far not very good.
The new treaty between the Soviet Union and the German Democratic Republic looks, on the face of it, like a backward step, and appears to contain a reaffirmation of the Brezhnev doctrine. I should be grateful if, when the Minister of State winds up the debate he would give us his view whether this is in conformity with the spirit of Helsinki.
The reception accorded to the French President in Moscow seemed distinctly unfriendly and journalists I have talked to who were there confirm this view. It would appear that one of the reasons for the snub administered to President Giscard d'Estaing was that he laid so much stress on the importance of ideological détente as well as détente between States. I hope that we shall back up President Giscard d'Estaing and make it absolutely clear that we share his view that there can be no real detente without ideological détente.
I can see no signs of any relaxation in the treatment of political dissidents, Jews, Ukrainians and other minorities. Perhaps the right hon. Gentleman could say something to us on that matter.
The situation in Portugal gave grounds for anxiety earlier this year. It looks a

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little more encouraging at the moment. Unlike the hon. Member for Penistone (Mr. Mendelson), I have the impression that the EEC has timed its financial aid about right and is getting it in at the right moment. If we had got it in much earlier, it might have been counterproductive.
Events in Yugoslavia give cause for great concern. There appear to be mass arrests of what are called "Cominformists"—which seems a polite way of saying Soviet agents. If this is so, it is a clear breach of the spirit of Helsinki. It gives cause for fear that the Soviets are seriously contemplating intervening to bring Yugoslavia out of the unaligned sphere in which it has been for several years, and back into their own orbit. I shall not ask what would be too delicate questions of the right hon. Gentleman about what we are doing, on this, but I sincerely hope that, with the European Community and NATO, we are giving a good deal of thought to the matter.
Regarding the Middle East, I think that the agreement reached between Dr. Kissinger and President Sadat marked an important, positive step forward. I pay tribute to Dr. Kissinger for his part in the affair, but we should also pay tribute to President Sadat, who has run greater risks, perhaps, than anyone else concerned in bringing about this measure of agreement and this step towards peace.
On the subject of the representation of the Palestinian people, I ask my hon. Friend the Member for the City of London and Westminster, South (Mr. Tugendhat) to help us by clarifying something that was said by my right hon. Friend the Member for Chipping Barnet (Mr. Maudling) and about which I was a little uneasy. He appeared to say that we should recognise the PLO as the representatives of the Palestinian people. That depends on what is meant by the Palestinian people. I think it is true that the PLO represents the Palestinians in exile, those in the camps now almost entirely in the Lebanon and Syria, but I am not at all sure that it represents the people who live on the West Bank, or the Palestinians who live in Jordan under King Hussein.
I know that the Rabat Conference said that the PLO should be regarded as the
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representative of the Palestinians; but I judge that we would be a little premature in disregarding, at this stage, the claims of either the traditional leaders on the West Bank, or the King of Jordan himself. Perhaps my hon. Friend could clear up this point when he speaks, as I understand he will, at the end of the debate.
The situation in the Lebanon is much more serious, and it is something about which the right hon. Gentleman said little in his opening remarks. Perhaps the Minister of State would enlarge a little on this, as I know that it is within his particular sphere of responsibility. If the Lebanon were to be partitioned, or if the relatively pluralistic democracy which has existed there so far were to be overtaken by a PLO-dominated and Communist-influenced dictatorship, the situation both for peace in the Middle East and for the interests of the West could be extremely dangerous.
My right hon. Friend the Member for Chipping Barnet asked questions about Angola. I would ask only one further question. I trust that on the question of recognition of the Government of Angola, whatever it will be, as in the handling of the Lebanese problem, we shall move in step with our colleagues in the EEC
On the whole, the balance sheet since Helsinki seems to be against us, with the exception of the Kissinger-Sadat agreement, and perhaps some minor improvement in Portugal. The anxieties expressed by the Chinese underline this, and President Ford's statement yesterday that agreement on arms limitation and a summit meeting with Mr. Brezhnev had been postponed seemed to underline it further still.
This raises the question of what we can do. Alone, as right hon. and hon. Members on both sides of the House have stressed, we cannot do a great deal. There are some things that we can do by ourselves and some things that we can avoid doing. We have made a useful contribution in Oman in helping to maintain stability.
In view of what is happening in Portugal, Spain and Morocco, we have clearly been wise to maintain our position in Gibraltar. It may be that from the sovereign base areas in Cyprus we can do useful work. There are things that I wish we would avoid doing. The

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decision to withdraw from Gan and leave it open to Soviet occupation with no apparent safeguards seems to offer a serious threat to the future stability of the Indian Ocean. The same can be said of our withdrawal from Singapore as the first signs of Vietnamese imperialism rise about the horizon. I think that that is also true of the abrogation of the Simonstown Agreement when the Angolan situation looks as though it might turn into another Congo.
But, in the main, we cannot achieve great results alone. We must work with others. As I said earlier, we need a power base. The alliance on which we have depended hitherto has been NATO, and it must remain our main shield. But the leader of NATO—the United States—has been going through a prolonged and profound crisis following defeat in Vietnam, the triple devaluation of the dollar, the Watergate crisis and the even more recent political reshuffle; and now there is the imminence of new presidential elections. We cannot do much to solve America's problems for her, but we can revive the Old World to redress the present and I hope temporary weakness of the New.
We can make a much greater contribution, and here I join hands wholeheartedly with my right hon. and learned Friend the Member for Hexham (Mr. Rippon), in making a reality of the EEC. The potential power of Europe is very great. It is much the greatest market in the world—far greater for the rest of the world than the United States and the Soviet Union put together.
The bargaining power of this market is an enormous asset to us, and the ability of this European market, because of what it buys, to invest in the Third World is unequalled. The technology of Europe and the skills of its people are unequalled and with it their military potential.
Within Europe, Britain has a unique contribution to make. The City of London has more financial expertise than any other country in the world—except the United States—and in some respects the City stands ahead of New York. We have more world-wide connections than any other country. We are the only major oil producer in Europe, and we have perhaps the greatest technological knowledge in nuclear power, aviation and electronics among the European countries.
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President Pompidou once remarked that our oil and our City connections were part of the dowry that we would bring to Europe. I should have thought that, far from trying to keep them outside the European Community, far from trying to insist on a separate seat at the conference scheduled to take place, these were our trump cards for determining the European Community's policy.
Naturally, we shall not get everything our own way. But these are strong cards, and if we play them right we can have a tremendous influence in determining the policy of the Nine in the vital matters of monetary and energy policies.
It seems to me that we are in danger of throwing the hand away. Of course, if it is all a great manoeuvre, a skilful game, as a result of which we shall get the chairmanship of the delegation, I shall be the first to take my hat off to the Foreign Office and say that it has played the game absolutely right according to the book. From what I hear, however, my feeling is that that is not the case, and that it may be one of those occasions when the Foreign Secretary has been thinking not about his European power base, but about certain other power bases with which he is also concerned.
In spite of our military and financial weakness, members of the Community look to this country for political leadership as, in their different ways, do many of the countries of Eastern Europe and, indeed, the Chinese. What I missed in the Foreign Secretary's speech was any kind of grand design, any big approach to the problems of the world, problems that we could not tackle or influence to any extent just as Britain alone, but about which, with and through Europe, we could exert influence, often decisively.
As the right hon. Gentleman knows, in the last century, after Waterloo and up to about the 1880s, Britain neglected her colonial empire and thought very little of it. As foreign competition increased, however, and overseas dangers grew, we began to draw closer together to Canada, Australia, New Zealand and, after the South African war, to South Africa. Joseph Chamberlain said in a famous speech "We must learn to think imperially." The Commonwealth has changed out of all recognition. Today we must learn to think as Europeans.

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When I say "we", that leads to another question which it would not be in order to debate today, but on which I want to touch briefly. If by "we", we mean the United Kingdom, strong and coherent in the councils of Europe, I see a great future for Europe and for us in Europe. If by "we", we mean an invertebrate, broken and battered United Kingdom, with a separate Scotland, a separate Wales and a separate Ireland, I am afraid that the prospect for the future would be dim. But that is a debate for another day.
7.8 p.m.
Mr. William Whitlock: I hope that the right hon. Member for Brighton, Pavilion (Mr. Amery) will forgive me if I do not deal with all his comments, although the burden of my remarks is about one matter which he raised briefly.
At the outset of the debate my right hon. Friend the Foreign and Commonwealth Secretary said that we were no longer a top nation in a military and economic sense. That is a hard fact with which none of us can disagree. But, like my right hon. Friend, I believe that out of our experience of being at the centre of events for so long, we still have a great deal to offer the world. We can still exercise an influence around the world out of all proportion to our size and numbers. I want that experience and that influence to be brought to bear on the situation which has followed the Helsinki Conference.
At the opening of that conference on 30th July, my right hon. Friend the Prime Minister said that the real test of the success of the conference would be not the undertakings signed but the progress in fulfilling them. In the House on 5th August he said that the Final Act:
"…is not of course a peace treaty, nor is it any other kind of legally binding agreement. It is rather a set of political undertakings which will at the very least provide a yardstick against which future behaviour can be measured and judged…. This conference represented no more than a beginning".
It is the beginning in which I am interested. The Prime Minister went on to say:
"The actual undertakings must be the subject of continuous monitoring and, finally, the test of Belgrade."—[Official Report, 5th August 1975; Vol. 896, c. 231–4.]
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—the test in two years' time at Belgrade when the representatives of the various countries who signed the Final Act come together to assess the results and to recommend action for the future.
At the opening of the conference my right hon. Friend the Prime Minister said that detente meant little if it was not reflected in the daily lives of our people, and there is surely no man or woman in the length and breadth of this country who would not share the hope that the Helsinki Conference will lead to increased adherence to the principles of respect for human rights and human freedoms, including the freedoms of thought, conscience, religion and belief.
But perhaps no section of the community of this country hopes more strongly that the conference will lead to worthwhile changes than do the Ukranians who live in various parts of this country. I am sure that any hon. Member who has Ukranians living in his constituency will agree that they are excellent citizens, people who are completely integrated with the communities in which they live, but who steadfastly, determinedly, and in a way which is wholly admirable, maintain their own culture. Proudly, they teach their children the history of the Ukraine—its literature and its language. In spite of the crushing of the Hungarian uprising and in spite of what happened in Czechoslovakia in 1968, they continue to cherish the belief that the Ukraine will one day be an independent and separate State.
These constituents of mine have read the Final Act of Helsinki in perhaps a more detailed way than other British citizens. They have seen that the Final Act contains four sentences which are at the heart of the undertakings reached at Helsinki. I shall not read out those four sentences, but they are headed:
"Respect for human rights and fundamental freedoms, including the freedom of thought, conscience, religion or belief."
Having read that document, and particularly those four sentences, the Ukrainians wonder and hope. They hope that the undertakings which have been signed are really meant, but they wonder whether it is just another scrap of paper which will make no difference. Of course, they are only too aware of the constant violation of human rights in the Ukraine, in spite of the fact that those rights are

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guaranteed in the constitution of the USSR, in the constitution of the Soviet Republic of the Ukraine and, of course, by the Universal Declaration of Human Rights.
There is then no absence of constitutions, undertakings or declarations supposedly guaranteeing human rights in the USSR. Yet, for many years, the Russians have tried to stamp out the aspirations of the Ukranians to maintain their own culture and their own national identity, and have refused to allow them to exercise those human rights about which the Russians will, at any time, sign a document.
In spite of the fact that Article 17 of the constitution of the USSR states that
"The right freely to secede from the USSR is reserved to every union republic."
any man or woman who openly advocates the secession of the Ukraine is subjected to the most inhuman treatment—as though he or she had no rights at all. For the last two or three years particularly, large numbers of Ukrainians who have committed no crime against either the State or society have been tried in an entirely unconstitutional way, made political prisoners and thrown into prisons where conditions are far worse than those which apply to criminal offenders. They have been forced to do work for which in many cases they are not physically equipped. They have been transported thousands of miles from their homes. They have been subjected to physical and mental suffering, divested of every aspect of human dignity, and denied elementary rights in every possible way.
These people are not murderers, thieves, hooligans or swindlers. They have been sentenced only for convictions and beliefs which the Russian constitution says that they may hold. In the Ukraine anyone who persistently attempts to claim his rights is certain to be declared psychologically abnormal and shut up in a mental institution where attempts will be made to destroy him as a sane human being. What is called "ideological subversion" is uncovered in poetry, in writings, in music, in paintings, and even in private correspondence, and those found guilty are thrown behind bars or locked up in mental hosiptals. So much for all the guarantees, constitutions, undertakings and declarations.
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Among the many who are treated in this way are courageous men such as Valentyn Moroz, Leonid Plushch and Vyacheslav Chornovil. Women also are made political prisoners and subjected to the same violation of human rights—women such as Iryna Senyk, Stefania Shabatura, Oksana Popwytch and many others.
Every effort is made in the Ukraine to teach the Ukrainian people "unanimously to approve" Russification and to accept that their culture and language must be stamped out. But for every one of the many people who are in political prisons and mental institutions, there are thousands more who think as they do, who have not yet lost the capacity for independent thought, but, because of the savage consequences, dare not express their views in public.
Our ability to render practical assistance to these unfortunate people is limited by the fact that we lack any formal standing to intercede with the Soviet Government on behalf of Soviet citizens. But we must consider ourselves free, especially after the Helsinki Conference, to bring to the attention of the Soviet Government the strength of feeling in this country, in this House and outside, about certain Soviet domestic policies which are in contravention not only of the constitution of the USSR but of the spirit and letter of the Universal Declaration of Human Rights and now of the Final Act of the Helsinki Conference.
The continuous monitoring mentioned by the Prime Minister must surely lead to approaches to the Russians about this matter. I hope that my right hon. Friend the Foreign Secretary will not miss a single opportunity to convey to his opposite numbers in the Russian Government our abhorrence of the situation in the Ukraine and our hope to see evidence shortly of progress towards adherence to the principles of the undertakings signed at Helsinki.
The early release of Ukrainian political prisoners would be an earnest of Russian intention to live up to those matters to which they so far paid lip service alone. Let us see the undertakings at Helsinki reflected in the lives of the people of the Ukraine. Then—who knows?—the moving Ukrainian anthem, which I heard in Nottingham last night, which spoke of freedom and liberty and of the history

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of a proud people, will perhaps in the not too distant future be heard in the Ukraine itself.
7.21 p.m.
Mr. Dennis Walters: I hope that the hon. Member for Nottingham, North (Mr. Whitlock) will understand if I do not take up the theme of his speech. I wish to say, first, how much I agreed with my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) on the importance of Britain taking into Europe the strengths she has at home in the City and overseas in her diplomatic skills and knowledge of world affairs. It would be sad if we created divisions and did not produce our strengths, one of which should be to help the Community to play a more significant and unified rôle in the world.
The Foreign Secretary, very understandably, expressed satisfaction about the recent visits to London of Middle Eastern leaders. It is a satisfaction which I fully share. I was delighted to hear that the Foreign Secretary now plans to visit the Gulf and Saudi Arabia. But I hope that, when he replies, the Minister of State will correct an omission by the Foreign Secretary when he said that he was to visit Iraq but did not mention Syria. At this stage, it is most important that there is a ministerial visit to Syria.
Mr. Ennals: May I clear that up straight away? It was merely a slip of the tongue. My right hon. Friend will visit Saudi Arabia and all the States of the Gulf. I shall be visiting Jordan, Syria and Iraq.
Mr. Walters: I am glad to hear that. I hope, also, that he will not allow himself to be influenced too much regarding the sale of arms. The reality of the matter is that the United States is supplying Israel with the most up-to-date equipment, that Israel has the Phantom strike aircraft, and that, if countries such as Egypt and Syria are not to have to revert to obtaining their supplies exclusively from the Soviet Union, they must have some source of supply in the West. In that case, surely, we should be one of the main suppliers.
The Israeli-Egyptian disengagement agreement has been widely welcomed in the West as a positive step towards peace in the Middle East. The fear of another
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Middle Eastern war, which, quite apart from any other consequence, would have a calamitous effect on the economies of Europe, understandably makes Western opinion responsive to any development which appears to make the likelihood of such an event more remote. I hope that the agreement will prove successful, as my right hon. Friend the Member for Chipping Barnet (Mr. Maudling) and other hon. Members have said, and that the momentum will be maintained.
However, it should be noted that there has also been less favourable Arab reaction, and it is not only the more militant Arabs who disapprove of the terms agreed. I spoke to King Hussein in Amman in October—he is one of the outstanding moderates—and confirmed that many of the moderates are also perplexed and anxious, despite President Sadat's undoubted achievement in creating an entirely new and more positive relationship with the United States. King Hussein does not see that the arrangement entered into brings a genuine overall peace agreement any nearer. Other experienced observers are even more concerned.
A peace settlement which has a genuine chance of success must, as clearly and unequivocally stated in Resolution No. 242, presuppose an Israeli withdrawal to the 1967 borders. That proposition was confirmed by the Foreign Secretary and by my right hon. Friend Withdrawal would naturally go hand in hand with the establishment of solid and satisfactory guarantees ensuring the rights of all States in the area to live in peace behind secure and recognised borders. The longer withdrawal is delayed, the less chance there is of bringing about an agreement which can stick.
The interim arrangement over Sinai appears to have little relevance in speeding up such a withdrawal. King Hussein found it difficult to understand how an agreement which has no fixed timetable for further movement on other fronts, and which, for the time being at least, has proved divisive in the Arab camp, could help to bring the necessary pressure on the Israelis to make them fall back. In this he is very close to the position of President Assad.
One of the more significant developments in the Middle East, which has run parallel with Dr. Kissinger's diplomacy,

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has been the rapproachement between Jordan and Syria. King Hussein was aggrieved also that the disengagement agreement failed to extract from Israel any assurances, even on such an obvious issue as the expanding building programme on the West Bank where the Israelis are continuing to colonise in flagrant violation of United Nations resolutions and international opinion.
A recurring theme of political comment both in the Arab world and elsewhere is that Europe ought to be playing a more active rôle in the search for a just and lasting peace in the Middle East. If the European Nine really mean what they say about the importance that they attach to co-operation and friendship with the Arab world, those Governments must be prepared to exert themselves more. It is simply not good enough to sit back and leave it all to others—in practice, to the United States.
I realise that it is one thing to make out a general case for a more active rôle by Europe and another to suggest precisely what European Governments can and should do, and any discussion of European initiatives must begin with accepting that the key to peace lies in Washington. Only America has the power to persuade Israel to accept the need for withdrawal from the occupied terrorities and for negotiating with the Palestinians regarding the establishment of a Palestinian State; and unless Israel yields on these two essential points there can be no lasting peace.
That being so, it may be tempting for European Governments to decide that there is nothing they can usefully do beyond lending their support to American peace-making efforts. But that would be wrong, for Europe has an essential contribution to make—as the hon. Member for Inverness (Mr. Johnston) said. It lies primarily in urging and encouraging Washington to use its power of persuasion on the Israeli leadership and also in taking independent initiatives.
Paradoxically, perhaps, the first essential step for Europe in this rôle is to establish its independence from America in regard to policy in the Middle East. It needs to make clear that it does not identify itself in all respects with Washington's interpretation of Western interests in the area and, indeed, that Europe's interpretation of these differs
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substantially from what appears to be the American interpretation—for instance, in the need for urgency to secure an overall settlement; the desirability of associating the Soviet Union with the peacemaking process; the necessity of accommodating Palestinian national aspirations and of dealing with the Palestinian Liberation Organisation as the legitimate representative of the Palestinian people—I was delighted that my right hon. Friend the Member for Chipping Barnet emphasised that point—and, above all, the need to distinguish between proper concern for Israel's security and a partisan support for Israel's attempt to consolidate expansion.
These are some of the respects in which Europe may feel that its own interests are not being well served or reflected by the present trend of American policy. There are, moreover, two obvious reasons why the European perception of Western interests in the region differ from the American. First, even with North Sea oil, Europe is far more vitally dependent on oil from the Middle East than is America and thus has a far more compelling need to avoid, and interest in avoiding, political action that might forfeit the friendship and co-operation of the Arab world.
Secondly, in determining its policy Europe is not constrained to anything like the same extent as the United States by internal Zionist pressure. Over the past few years Europe has made some progress towards establishing its independence from the United States. A major step was that taken by the European Nine when they issued their declaration in November 1973. The first initiative that those Governments can and should take now is to reaffirm that declaration.
Other initiatives which the Nine could usefully take are, for instance, to sponsor a resolution in the General Assembly calling for an early resumption of the Geneva Peace Conference, recognising that it is essential that the Palestinians should be represented at the conference, declaring that the PLO should be accepted as the legitimate representative of the Palestinian people but at the same time urging the PLO to declare that it is prepared to renounce the use of force against Israel once Israel agrees to withdraw from the West Bank and the Gaza Strip and

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to accept, in those territories, the establishment of a Palestinian State.
A further initiative would be the sponsoring of a resolution in the Security Council calling on Israel to desist forthwith from the creation of facts in Arab Jerusalem and to undertake the progressive dismantlement of all the settlements which it has established in the occupied territories.
Finally, the Community—or Britain and France separately, but the Community preferably—must state that it would be prepared to share in any guarantees which are called for and which may be necessary to bring about a lasting settlement.
The whole issue of the creation of new settlements in the occupied territories, and especially on the West Bank, is absolutely vital. I hope that the Foreign Secretary now appreciates that fact. I recently spent three days on the West Bank. A great deal has already been written about the ugly new buildings in East Jerusalem, erected in direct contravention of a unanimous resolution of the Security Council passed in 1969, and of the General Assembly resolution of 1972, and in the face of repeated protests from organisations and individuals of all persuasions who love the city.
But that is only one aspect of the picture, although understandably the most publicised because of Jerusalem's unique character and its significance to Moslems and Christians as well as to Jews. New development schemes are under way between Jerusalem and Bethlehem and between Jerusalem and Jericho and there appears to be a carefully planned strategy to surround Jerusalem with new conurbations. Instead of planning to dismantle Israeli settlements, it has recently been announced by the development branch of the Jewish National Fund that the foundations of 50 new settlements will be laid during 1976.
Any visiting observer is, therefore, bound to ask himself whether the Sinai disengagement agreement is regarded in Israel as a prototype for other agreements, which would ultimately secure the implementation of Resolutions 242, 338 and the other relevant resolutions of the United Nations, or as a device for buying time for the consolidation of
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Israeli rule in the whole of Palestine and parts of Syria.
Step-by-step will succeed only if the steps are big steps. It follows that there must also be some rapidity and some timetable about these steps.
Since coming to power in 1970 President Sadat has repeatedly shown that his principal aim is to achieve peace in the Middle East. In October 1973 he also demonstrated his capacity to take dramatic action when persuaded that there was no other course left open to him. The great majority of Arabs wish to build up their country's economy. They can only do so if there is a genuine peace settlement. They share the President's peaceful aspirations, as has been confirmed in London not only by the President but also by Prince Fahad during his visit and by other Arab leaders.
The Israeli moderates, who have the same end in view, should now assert themselves, because if Israel continues to look upon the acquisition of territory as the overriding priority, no interim agreement—and certainly not the one recently entered into over Sinai—could stick. Another war would be inevitable. Time is not on the side of peace. There must be a continuing momentum if a new war is to be avoided.
Europe, which has so much to lose if there should be a war, must play a full and active part in preventing that war, and Britain and France should take the lead.
7.38 p.m.
Mr. James Lamond: One of the hazards of waiting for some considerable time to speak is that one hears a number of points of view that one would like to follow. The thoughtful and restrained speech that we have just heard from the hon. Member for West-bury (Mr. Walters) has a great deal of my sympathy, and I apologise if I must change the subject a little and return to the point that I wish to make.
Opening the debate, my right hon. Friend the Foreign Secretary dwelt for a short time on the changed position of Britain in the world. He mentioned that at one time we were one of the great Powers and that now many people thought that our power and importance had dwindled until they were negligible. He also said that he did not share that

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view, and nor do I, because I believe that we still have a considerable influence and that it is the more welcome because it stems not from military but from moral power. I thought that my right hon. Friend was rather modest. He did not mention that he is in no small measure responsible for some of the prestige that we have in foreign affairs, because he is always reasonable, straightforward and honest, as is ably demonstrated when we hear him making speeches at the Dispatch Box and answering Questions at Question Time.
I hope that my right hon. Friend will not mind if I make some observations about the things that I feel he has not done as much about as I would have hoped. I turn to the document about which my hon. Friend the Member for Nottingham, North (Mr. Whitlock) spoke, the Final Act that was signed in Helsinki on 1st August.
I do not think that the contribution made to the debate by my hon. Friend the Member for Nottingham, North is the best way of using this Final Act. I appreciate my hon. Friend's comments, which were made from the heart. I estimate that I too have several thousand Ukranian constituents in Oldham, but if the Soviet Union, for example, were to examine the work of this Parliament and continually to draw our attention to what it sees as our shortcomings in Northern Ireland, we should begin to feel that the Soviet Union was not building the best of friendly bridges and that the Final Act signed in Helsinki, which enabled it to make such criticism, was perhaps not as good an instrument for peace and prosperity as we had hoped.
I am aware that between good friends candour and straight talking are an essential part of that friendship, but friendships must be built up before they reach that stage. We all know that too much candour at the beginning and shortly after an acquaintanceship is made can often lead to the premature termination of friendship.
I feel that important though Basket III was in the Helsinki Final Act, the most important part was the reaffirmation by the nations present of their desire for peace and justice in the world and among the signatory States. Although the conference was on security and co-operation in Europe, it will not have escaped the
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notice of those Members interested in foreign affairs that among the signatories were the President of the United States and Pierre Trudeau, the Prime Minister of Canada. That was extremely significant, because it indicated that the conference had implications spreading much wider than Europe. I had the opportunity to be in Helsinki during the conference, and afterwards I was invited to go to the United States to talk with groups in various cities about the implications for the United States. I spent rather a strenuous time, going to nine different cities in 14 days.
There is a great yearning in Great Britain, Europe and the United States for a rundown in the arms race, an extension and strengthening of detente, and for the money presently being poured into defence to be poured into a more productive use to assist the economies of the United States, Great Britain and the countries of Europe, and to give much more assistance and help to the Third World.
I know that Conservative Members have said that this is one area in which we must not have any cuts in spending. I do not accept that view. I feel strongly that much more can be gained in strengthening the peace in the world and reducing the tension by cutting out the nuclear arms race and the conventional arms race and using that money to build friendships with developing nations.
It is no use the Foreign Secretary, the Shadow Foreign Secretary and other Members calling for a cessation to the proliferation of nuclear arms and saying what a dreadful thing it is and how short the time at our disposal—all of which is very true. There is a great danger to the world from such a development. It is no use, on the one hand, calling for this cessation and saying that the proliferation of nuclear arms should not continue, and, on the other, arguing, as did one hon. Member earlier today, the need for us to have a nuclear umbrella and saying that there should never be any holes in that umbrella. It is no use saying that the rich, wealthy nations must have this protection, but the developing nations, such as India, perhaps, or Brazil, should not develop these weapons.
I agree that the developing countries should not develop these weapons, but

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it is rather like a father saying to his son "Do not do as I do; do as I say." If these nations see us setting our present example, how can we in all conscience ask them not to go along the road that we apparently think necessary to preserve our existence?
There is a great deal of support in the world today for the view that we must turn from the arms race, that we must not have the sort of agreement that we have just seen President Sadat come here to conclude with Great Britain to buy Jaguar aircraft for £600 million, which his country can ill afford. Instead of the money being used for that purpose, it should be used in some constructive way.
I do not say these words lightly. My constituency contains five Ferranti plants, and many of the workers there are on defence work. Many hundreds, if not thousands, of my constituents work for Hawker Siddeley. I am sponsored—and declare it proudly—by the Amalgamated Union of Engineering Workers—the TASS section, that is the Technical and Supervisory Section. That section fully supports the view that I am putting about the arms race, and so does the AUEW engineering section.
I know from practical experience that many of trade union members want to work in this sort of employment because there is no alternative for them in defence work. They ask "If somebody has to make these arms why should it not be us? If someone has to supply these arms, why should it not be us?" That is a thoroughly immoral attitude. I have no doubt that this will all be reported to my constituents, but I say to them and to the House that I believe that if they were given the opportunity to work at jobs that were constructive, they would far rather do so than make weapons of mass destruction.
The Foreign Secretary has worked hard during the past year. It is interesting to read the speech that he made during the debate on the Queen's Speech last November, when he mentioned all his objectives as Foreign Secretary. Some of these have been achieved, and some progress has been made towards achieving others, but not sufficient attention has been given to the task of reducing our arms burden. I believe that others may follow our example. Therefore, I ask
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the Foreign Secretary to turn his attention to that matter.
7.50 p.m.
Mr. Richard Luce: At the risk of injecting a little controversy into the debate, I must respond to the remarks of the hon. Member for Oldham, East (Mr. Lamond). Of course all of us in the Chamber detest arms and the trade in arms. We all detest warfare. But has not the hon. Gentleman learned the lesson of history—that unless one maintains a balance of power, there will inevitably be conflict? This, surely, is one of the lessons of history which he, like every other Member of Parliament, ought to have learned.
One of the difficulties of this type of debate on foreign affairs is to decide whether to make a dramatic tour d'horizon or to pick out one issue and devote one's speech to that problem. I have decided to make a brief combination of both approaches.
I wish to talk about Britain's interests outside the EEC area, with special emphasis on Southern Africa. When one is speaking about any aspect of foreign policy outside the European area, one must do it within the context, as my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) and the hon. Member for Inverness (Mr. Johnston) rightly stressed, of our membership of the Community. One must discuss it within the context that it is from our European base that we should consider our foreign policy in other parts of the globe.
For that reason, when looking at issues outside Europe, we should continually think about whether it is possible and right to evolve a European approach, as we are beginning to do with, for example, the Third World and, as my hon. Friend the Member for Westbury (Mr. Walters) said, the Middle East, and with Cyprus, the Iberian Peninsula and the CSCE negotiations. That is the kind of thinking that should be encouraged in the Foreign Office, and infused by the Foreign Secretary into every issue that we consider in every part of the globe.
Within that context, therefore, I shall consider one or two other issues, but first, it is necessary for us to accept certain realities of today about our country. The first reality is that we are no longer a

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world Power, although, with the end of the Empire, we have certain inherited responsibilities, one of which we had to exercise last week, in Belize. The Falkland Islands also have been referred to.
The second reality is that economic weakness means that we have less political influence in the world. The fact that we have become economically weaker relative to other Powers in the last few years has weakened the influence that we can have on other issues or in other parts of the globe. This leads to further considerations. We need to strengthen our economy in order to have more influence. We need a stronger Europe in order that we and Europe can have a stronger influence. Indeed, in this context, it is worth considering that, with the American elections coming up once again next year, the rôle of Europe will assume greater importance in the coming 18 months.
We need to consider also the great assets which this country has in its foreign affairs. Inherited, perhaps, from the past is our special position in the Security Council—to which the Foreign Secretary referred—in the Commonwealth and so on. Moreover, because of our experience in many parts of the globe, we have great skill and knowledge in many aspects of the world's problems. Indeed, our experience is unique in the world today.
Above all, however—this needs to be emphasised, because it has struck me wherever I have been in any continent, and it has not yet been stressed in today's debate—there is the enormous fund of good will that exists towards this country. In countries which we have governed or, say, in Latin America, where we have a historic relationship but not a colonial one, this fund of good will towards us gives us a degree of influence and a rôle to play, perhaps disproportionate—to put it honestly—to our present economic strength. But the good will exists and we have the skills, and we should use them not only to further our own interests, but to secure greater stability in the world.
Those assets can easily be tarnished, diminished or even squandered by mistakes which our Government may make. I give two examples, and they apply not only to the Government, but to the country, too. There are the double standards which from time to time
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the Government impose. They take one line on Spain and another on Chile. They fail strongly to condemn Communist intrusion into Cambodia. There is no consistency, and if we lack consistency in our attitude towards the internal affairs of other countries we shall lose respect.
My second criticism is of industry. We shall lose respect and good will if our export performance becomes unreliable. The more unreliable our exports are, the less good will are we likely to have in the long term.
With those considerations in mind, let me look briefly at one or two issues. Something which has not been stressed strongly enough today is the rôle that we ought to be playing in regard to NATO from a Foreign policy viewpoint. It seems extraordinary that although the interests of the European countries that are members of NATO extend far beyond the Tropic of Cancer—for example, to the Indian Ocean, where we have vital interests in trade and oil supplies—NATO itself has no responsibility whatsoever south of the Tropic of Cancer.
In relation to Europe, despite our defence cuts, Great Britain still has a strong navy. We should be taking a political lead in persuading other NATO Powers to extend our area of responsibility south of the Tropic of Cancer, and at the same time—I speak here not only of ourselves but of Europe as a whole—enhancing our relationship with our natural partners and the emerging Powers in, for example, the Indian Ocean, where Iran is becoming a most important Power and will contribute more and more to the security of that area.
We have heard much today about the Mediterranean, about the skills which Britain can use in Cyprus because of its special position there, and about the Iberian Peninsula.
It is worth mentioning Latin America in this context. Canning once said that we should bring in the New World to redress the balance of the Old. It has taken a long time for that particular New World to emerge. But most hon. Members would agree that one or two of the Latin American countries, such as Brazil and Venezuela, are likely to emerge as great and important Powers in the coming decade or so. For that reason, I warmly welcome the Foreign Secretary's decision to visit the Latin American countries

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during 1976. The good will towards Great Britain in that part of the world in enormous. The potential for trade is vast, although there are one or two problems—the results of our Empire—which tend still to cause friction between us.
I referred earlier to the Falkland Islands. Although it is a cause of friction, there is one thing above all else that we must remember, namely, that although there are only 2,000 islanders, they are of British origin, and they have every right to expect a reassurance from the Government—I hope that the Minister of State will give that assurance—that there will be no change in the sovereignty of the Falkland Islands, without the full consent of the islanders themselves. Naturally, we must do all we can to help to build a bridge between the islands and Latin America, so that communications can be improved and a better relationship built up between the islanders and the Latin Americans.
The Middle East has been mentioned as another area where our skills can be used. Indeed, President Sadat said at the weekend that he would welcome a British rôle at the Geneva Conference.
I want to make my final remarks about Southern Africa. Racial tension is now one of the most explosive issues. South Africa is the cockpit of this tension. The world is watching to see how things develop in that part of the globe.
What is our relationship to southern Africa? We no longer play an imperial role, but we have experience of that part of the globe. We have some economic influence, and we have our legal responsibilities for Rhodesia. The dramatic changes that have taken place since April of last year mean that we have a new situation which could, in my view, lead to progress in race relations.
This week is significant in southern Africa. As from tomorrow, there will have been a decade of UDI in Rhodesia; and Angola, that large country with enormous economic potential, gains its independence. A European approach to the problems of Angola might be of some help. However, if we take South Africa and relate it to the rest of Africa, we find that our trade with black Africa is two and a half times as much as it is with South Africa itself, although we have a larger share of direct investment in South
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Africa than we do with the remainder of black Africa. In contrast, from the trade aspect, black Africa, especially Nigeria, is becoming of increasing importance to us.
There is a growing interdependence between South Africa and black African States, which also is of great importance. There is increasing trade between South Africa and Zambia. South Africa depends for its hydro-electric schemes to a considerable extent on Mozambique and on Angola. There is interdependence not only in these spheres but in migrant labour.
In considering our policy towards southern Africa, we should bear in mind that South Africa will increasingly need skilled black Africans if its economy is to expand. One institute in South Africa has forecast that by 1980 South Africa will need 2 million skilled Africans if its economy is to expand at a reasonable rate. This could have enormous social implications for internal developments within South Africa.
We already see the beginning of a breakdown in the rigidities of petty apartheid, and this should not be scoffed at. Those who have been there in the past year or two and have compared it with the 1960s recognise a gradual transformation and relaxation in race relations.
What should Britain's rôle be in this? First, it needs to be stressed that contact and dialogue with South Africa is far better than isolation. If we accept that, we must also accept that the more we trade with and invest in that part of the world, the more we can influence events. If we take matters a stage further and consider the large number of British companies operating in South Africa, surely the best way to influence events there is to invite companies to ensure that they have the best possible standards of employment practices. In such a way they can give a lead to a changing climate, to educating and training Africans and to advancing their standards.
In considering the problems of the Homelands, we have to recognise that an important event will take place next year, when the Transkei is due to have independence. Here, again, no harm will be done by developing a European approach to this problem. Indeed, because they are so wholly economically

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dependent on the South African Republic, we should be doing our best to encourage non-South African investment and trade with the Homelands.
Finally, we should be doing our best to foster the policy of détente, which is now being initiated by Mr. Vorster, and encouraging the four African presidents of Mozambique, Zambia, Botswana and Tanzania, who have so much influence on the course of events in Southern Africa.
In Rhodesia we have, of course, just debated this issue. Although we have no overwhelming influence, we have some influence, which we can use behind the scenes. If progress is made in negotiations between Mr. Smith, and the Africans, Britain must play a rôle and take the initiative in trying to give reassurances to both sides during the transition so that their fears about the future can be eased. I hope that we will stand ready to do this immediately the talks make progress.
In his wonderful book "Cry, The Beloved Country", Alan Paton referred to the fear of bondage and the bondage of fear. It is a fact that the Africans long to be released from the fear of bondage and the Europeans from the bondage of fear. It is to that aim which we must work in that part of the world.
8.9 p.m.
Mr. Robin F. Cook: I hope that the hon. Member for Shoreham (Mr. Luce) will forgive me if I do not pursue him across the wide expanse that he has covered. I cannot refrain from taking him up on one point, which I had difficulty in grasping. He accused the Government of double standards and referred to them having a different approach to Spain from that which they have to Chile. If there were two régimes in the world towards which the Government have had a consistent policy where they have consistently condemned executions without proper legal process, I should have thought that they would be precisely those two countries.
Mr. Luce: I referred also to Cambodia and to the fact that the Government had failed strongly to condemn the Communist intrusion into Cambodia.
Mr. Cook: I accept that but if the hon. Gentleman consults Hansard tomorrow
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I think he will find that he gave as a specific example the contrast between Spain and Chile. I find it hard to see a contrast between them.
I do not intend to follow the hon. Gentleman on a trot round the globe or, indeed, to follow other hon. Members who have gone on such a tour. I intend to take the other approach and to concentrate on one specific issue—that of Diego Garcia.
I make no apology for concentrating on this issue alone because this is, after all, the first opportunity that the House has had in the last two months to discuss the matter since a considerable quantity of information was made available in Washington. I find it a vivid illustration of how weak this House is in controlling our executive that, over the past two months, whilst more information and some serious allegations have been made, not just in a foreign legislature but in the legislature of our major ally, we have been reduced to asking the executive when it is to give us time to discuss the matter.
We are fortunate in that the Minister of State is to reply to the debate, and I think I am right in saying that he has ministerial responsibility for Diego Garcia. I find it curious that the Minister responsible for disarmament should be the man given ministerial responsibility for our end of the biggest base currently being constructed on British soil. However, no doubt the Foreign Office sees some logic in this arrangement.
The information that has been made available, not to this House but to the Senate in Washington, over the past couple of months raises three main areas of concern with which I wish to deal. The first issue is the question mark which it puts against the candour of successive Governments in their handling of this matter. I have followed the issue of Diego Garcia with some interest during the past few months, as I think some hon. Members will be aware, and have raised it at Question Time. I have, frankly, been humiliated to learn for the first time about the evacuation of the island, not in this House or in its Library but through Press reports from what was happening in Washington.
I want to refer to a letter which the Secretary of State sent to my hon. Friend

1023
the Member for Salford, East (Mr. Allaun) on 13th October. I do not think that my right hon. Friend or my hon. Friend will object to my quoting from it. In the course of that letter the Secretary of State produces the one single instance in which the Government made a statement about the evacuation of the island—a Press release on 10th November 1965. The letter says:
"I think you will agree the statement makes it quite clear that the information which you suggested the US Congress extracted with such difficulty only this year, was in fact freely available from the beginning."
That is true up to a point. The only snag is that the Press release, to which the letter refers and which was enclosed with it, was issued solely in Port Louis, Mauritius, and was freely available only to those who happened to be passing through Port Louis, Mauritius on 10th November 1965.
The other point worth noting is that although the Press release quoted a statement in the House, it was not the statement in the House which referred to the evacuation but the Press release's gloss on that statement which admitted that there would be an evacuation. This raises in my mind the unworthy suspicion that there must have been another Press release issued on 10th November 1965 in Whitehall. Why was it that we were sent the Press release issued in Port Louis, Mauritius, as opposed to the Press release issued in Whitehall on that date? Could it be that the latter was less explicit?
Here we have the interesting fact that if one looks up the Press for 11th November 1965 one will find in The Guardian the observation:
"There will be a British civil administration for the 1,400 inhabitants of the islands."
Clearly, that Press report must have been based on a Government Press release—one which was different from the one we had been sent and also one which has given rather a false impression of the development on the islands. At present, far from their being a civil administration of the islands there is only a lieutenant-commander in charge of administration, which perhaps does not matter particularly since there are only 30 naval ratings as the sole British subjects left on the island.
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I hope that my right hon. Friend, when he replies to the debate, will clear up this matter. I hope that he will see fit to release the Press statement that must have been made in Whitehall on 10th November 1965, so that we can at least be reassured that there has been no attempt, however casually or quietly, to mislead the House about what was happening on that island.
The second main area of concern to which I wish to turn is the injustice that, to make room for a military base on this island, we transported 1,100 people across 1,400 miles and put them on to an island which is not only the most overcrowded spot in that part of the globe but is also one of the poorest nations.
We have been told by the Foreign Office that these people went willingly. I do not know much about the psychology of islanders in the Indian Ocean, but I do know that when constituents come to my surgery seeking a council house, they do not go willingly if offered one which is more than three bus stops away from where they have been living for the past 10 years. I very much doubt whether human psychology is so different on the other side of the globe that people enthusiastically embrace a move of 1,400 miles. Indeed, I suspect that when the Foreign Office said that they went willingly it means only that they went peacefully and without military coercion.
It has been difficult to get details of the precise arrangements for transportation, not least because Mr. Todd who administered the transportation has apparently been instructed in the past month not to speak to the Press. But we do know that at least one party of those in course of transit had to spend a week in prison at Seychelles because no alternative accommodation was available. We know also that most of those transported to Mauritius travelled on one cargo ship which, in normal circumstances provides accommodation for 12 passengers. The great majority of islanders who made the trip did so under tarpaulin on the open decks of the ship, 140 islanders on one occasion being transported in this way.
It is hard to understand why arrangements for the resettlement should have been so ill-prepared. It is also hard to forgive the naivety of the Government in

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not setting up any form of legal trusteeship to cover compensation to islanders, and in not putting even one penny of the compensation money under the absolute control of the islanders. On the contrary, as we now know, the money was paid entirely to the Mauritian Government who, in all fairness, have other matters to consider, and have many other severe pressures to meet on a very short budget.
But beyond the specific instances of inhumanity one can pick out, there is the basic ethical question: how far was it right, or fair, to uproot a human settlement from an island? It was a settlement going back in some cases five generations of islanders to the early 19th century, with a stable and viable economy, and where all the people were British subjects without any form of political representation to protect them.
It must be a matter of some shame to this House that when the Government found themselves faced with a population of British subjects such as this, vulnerable and wholly dependent, they chose to sacrifice their interests. It is ironic to reflect that the base now being constructed in Diego Garcia was originally intended for Aldabra but was not proceeded with in Aldabra because it would disturb the turtles. Indeed, the hon. Member for Eton and Slough (Miss Lestor), in her former incarnation at the Foreign Office, actually had the sheer gall, in the course of a Consolidated Fund debate on this matter, to assure us that there were no turtles in Diego Garcia to be disturbed.
Sir George Sinclair: To be accurate, it was giant tortoises.
Mr. Cook: I willingly accept the correction. I do not wish to dissociate myself from the campaign to save the tortoises or turtles in Aldabra because I believe that it was a wholly merited campaign. But surely it should disturb us to know that our Government and this House are apparently less concerned about the disturbance to a large body of British subjects.
The right hon. Member for Chipping Barnet (Mr. Maudling) made what I believe to be a perceptive point in his speech when he said that if we are to understand the answer to the question, "What?" we must first ask "Why?". I
1026
pose the question—why the evacuation; why, if all we are putting on the island is "an austere communications facility", was it necessary to lift every inhabitant off the island? Why, indeed, was it necessary to go further and remove the entire population of the two neighbouring islands on neither of which is there a single military facility?
I think that we get a clue to the answers to the question "Why?" if we look up the Senate hearings of the past summer. Among them is a statement by General Brown, Chairman of the Joint Chiefs of Staff of the United States, in which he said to the Senate Armed Services Committee:
"We must develop and invest in secure facilities where we can operate as free of foreign political constraints as possible Diego Garcia offers us the opportunity to construct a modest installation on an unpopulated speck of land."
There we have it. The population was removed, not because there was too little space or because of any desire to protect the security of a military installation, but purely to preclude any future political constraint or political pressure on the American bases in that area. I view with great regret the fact that two Labour Governments have helped to facilitate such an arrangement.
The third main area of concern raised by the additional information which has come to us is the strategic case for having a base at Diego Garcia. The information that has come out of the Senate hearings is deeply damaging to that strategic case. I advise hon. Members who are interested to read the transcript of the hearings which is available in the House of Commons Library. The case is now so weak that only last week the Senate voted by a considerable majority to delay approval of funds until further information was made available.
Attention has been focused in the past on the Russian naval threat in the area, which we have discussed in this House in the past few months. Hon. Members will be familiar with my view that attention has been focused on the threat to the point of losing sight of any perspective. For instance, the Russian naval presence in the Indian Ocean is still substantially less than that of the French Navy, and although greater than the American naval presence it is significantly less than the American naval presence

1027
when it is augmented by a task force as happens increasingly regularly. The hon. Member for Haltemprice (Mr. Wall), shakes his head, but he will find that this information was provided by Mr. Schlesinger during the Senate hearings.
Mr. Patrick Wall: The hon. Gentleman will realise that the Soviet task forces are permanently there. The American and French forces—and our own, for that matter—go there on cruises only from time to time.
Mr. Cook: I must press my point. I was referring to the permanent French naval presence. I was distinguishing the permanent American presence, which I concede is less than the permanent Russian presence, but it has been augmented for one-third of the year for the last two years by a presence which makes it greater than the Russian presence.
At no time during the past five years has the Russian naval presence, permanent or temporary, been anything more than substantially less than the combined Western presence. Moreover, in the past four years, the Russian presence has shown considerable stability, and in the first six months of this year was slightly down on the 1974 level.
I concede that it is very difficult for a layman to interpret these matters. It is difficult for a layman to make the right judgment of the strategic balance. I have seen the photographs of the installations at Berbera, as I am sure have other hon. Members. They are very impressive, but I do not pretend to understand them.
I was struck by one fact that emerged from the Senate hearings, namely, the quantity given for the storage of fuel at these two bases. The State Department's estimate of the fuel facilities at Berbera for the Russian Navy was 170,000 barrels of oil. It is proposing to provide facilities in Diego Garcia for 700,000 barrels of oil. I find it hard to understand why, if Diego Garcia is a modest response to an aggressive Soviet presence, it requires to be fueled with four times as much storage facilities as the threat to which it is responding.
Leaving aside the disagreements on the strategic balance in the area, the critical question about foreign policy which confronts us about the Indian Ocean is this: is it worth sacrificing the good will of the
1028
nations around the Indian Ocean in order to put our own base there to maintain, like primitive Newtonians, an equal and opposite reaction to the Russian presence?
There can be no question that we are sacrificing the good will of the States in that area—even the States traditionally allied to the West. Australia and New Zealand, both of which have Labour Governments which could speak with some authority to the present Government in Britain—have gone on record as being opposed to the expansion of Diego Garcia. Indonesia, whose régime is almost wholly dependent on support from the West, is also openly on record as opposing its expansion.
Not one of the 29 nation States around the Indian Ocean has supported the expansion and it is worth noting that in Mauritius the lawyer who acts for the islanders who have failed to obtain their compensation is the leader of one of the main opposition parties. I should not have thought that the history of this sorry episode is the best introduction to Britain's foreign policy for a man who may very well become the leader of that State.
The Secretary of State referred to the threat of nuclear proliferation and the need to combat it. I share entirely the sentiments expressed, but I share also the statement of the hon. Member for Old-ham, East (Mr. Lamond) that it is no longer enough for fine words on this matter. We must also have action.
The action we are taking at Diego Garcia runs contrary to the interests of those who are opposed to further nuclear proliferation. One of the main reasons why the States around the Indian Ocean have opposed this expansion is that they are on record as wishing to see the Indian Ocean a nuclear-free zone. They see the expansion at Diego Garcia as endangering that.
The United States have made no secret of the fact that, if they carry through this expansion, they will station on the island KC 135 tankers, whose main function will be to refuel in-flight aircraft entering the area on service and specifically to refuel in-flight B52 strategic bombers.
It is ingenuous to say, as we have been told in the House time and again, that there are no plans to place strategic

1029
ships or strategic aircraft on the base permanently. The whole point of developing the base is to render it capable of servicing planes and ships entering the area on strategic missions. It is precisely because of this, because the States around the area see this as introducing a nuclear threat into the Indian Ocean, that so many of them have come out in opposition to it.
I understand the point of view of those in the House, particularly those on the Opposition benches, who disagree with the view I have taken of strategic balance and who say that the Russian threat is greater than I have said and that we must respond to it by assisting the Americans to develop such a base. I do not agree with that view, but it is a tenable view.
However, I cannot understand why there has been so little interest in the House in some of the other matters upon which I have touched. I cannot understand why we have acquiesced, and why the official Opposition have acquiesced, in learning about the dealings of the Government in this matter through reports of what happens in the Senate, what happens in Washington, rather than in this House. Nor can I understand why the concern for the 1,100 British subjects who were treated in this fashion should have been expressed by only so few Members of the House and mainly by my hon. Friends below the Gangway.
The Sunday Times had a particularly galling line in its Insight report on the matter. It said that the conclusion of this affair is that it is easier to bamboozle the House of Commons than it is to bamboozle the Senate. If one takes a view of what happened in this case, I am afraid it is easy to reach that conclusion.
Fortunately, the decision of the Senate to delay funds for this matter gives us a breathing space in which we can examine the matter again. We can press the Executive rather more closely and come to a more balanced view of the situation. I hope that Members on both sides of the House will participate in that debate in the coming year.
8.29 p.m.
Mr. Jonathan Aitken: The hon. Member for Edinburgh, Central (Mr. Cook) has done the House a great service by bringing to our attention the
1030
curious circumstances surrounding the evacuation of the Diego Garcia islanders. I found his critical analysis a considerable indictment of the Government and I agree with him that it is a source of shame to the House that the American Senate should have aired this topic at such great length, whereas we should not yet have found any adequate time to debate it. I join the hon. Gentleman in expressing the hope that time will be found in a future Session.
However, as the hour is late and other hon. Members wish to speak, I hope that the hon. Gentleman will forgive me if I do not follow him in any detail—although I agree with his general thesis—but rather concentrate my remarks on one of the most interesting foreign policy initiatives of the present Government, namely, the attempt to strengthen and develop Britain's relationships with the Middle East oil-producing States. We on this side of the House should give at least two cheers for what the Government are trying to do in this area, although a caveat should be entered about certain errors which gave the wrong impression of Britain's intentions during the first 12 months of the Middle Eastern policy of this administration.
When the present Government came to power, in March 1974, it was widely believed, rightly or wrongly, in the Middle East that the new Ministers were enthusiastic and dedicated supporters of virtually all aspects of Israeli policy. That belief was to some extent echoed last weekend by President Sadat's rather barbed comments about the Prime Minister's special relationship with Israeli leaders.
The impression that Britain might be abandoning its former even-handed approach to the Middle East situation certainly needed correcting, but the corrections took much longer than expected, due, as much as anything else, to Arab over-reaction to the famous photograph of the Prime Minister giving a warm welcoming embrace to Mrs. Golda Meir. That was a public relations error that might be called "The kiss that nearly lost a 1,000 ships full of British exports."
However, in the past six months the sirocco of change seems to have been blowing through Downing Street and Whitehall, and a new chapter in our relationship with the Middle East seems to be opening. It is a chapter which is

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perhaps symbolised by many ministerial visits in various directions, and particularly by a visit commencing the week after next by the Foreign Secretary to Saudi Arabia and the Gulf States.
I believe that this is the first visit to the Gulf by a British Foreign Secretary since the present Mr. Speaker went to Bahrain in 1960. The fact that 15 years have elapsed since that occasion is a sad reflection on foreign policy priorities by successive Governments. The good wishes of the whole House will go with the Foreign Secretary when he sets off, for I think we all now appreciate the momentous significance that these countries have in terms of our future as an exporting and trading nation and as a world financial centre.
The late Mr. Ernest Bevin, when Foreign Secretary, once told Britain's miners "Give me another 5 million tons of coal a year and I will give you a foreign policy." I find that approach refreshingly realistic and rather better than some of the empty words that we have heard in this debate about Britain's moral influence. In that Bevinesque mould the present Foreign Secretary might justifiably say to British business men today "Give me reliable delivery dates and I will give you a foreign policy."
Speaking as someone who has been visiting the Gulf States regularly, both as a journalist and as a business man since 1966, I am painfully aware that the gap between British export potential and performance is the Achilles heel of our reputation in that vital area. Although the prime responsibility for export success or lack of success lies with the exporters themselves, nevertheless I believe that there is plenty of room for improvement in the Foreign Office's own arrangements for promoting British exports. I shall illustrate this by references to two countries on the Foreign Secretary's itinerary.
I refer, first, to the United Arab Emirates, a country where the reserves of good will and affection for Britain are almost as large as the UAE's oil revenue itself. British exports to the UAE have increased by over 104 per cent. in the current year in terms of volume, but our share of this export market in terms of value has slipped back. One reason for this slippage is that the British Embassy is not the export-promoting power-house
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that it should be, particularly when compared with the energetic and, at times ruthless, export promotion tactics of other foreign embassies in that country.
This is no reflection on the hardworking and popular British ambassador to the UAE. It is a reflection on the Treasury and Foreign Office planners who keep the British Embassy in Abu Dhabi understaffed, overworked, and inadequately housed. When the right hon. Gentleman goes there, he will find that all of those words are fully justified. I hope that he will look at this situation during his forthcoming visit, because it needs an extra push from the Government if Britain is to capitalise on the untapped export opportunities created by the warm feelings of friendship in that country towards Britain.
I turn to Saudi Arabia, which is the most important export market of all in that area. The Government are to be congratulated on the success of Crown Prince Fahd's recent visit to London. As secretary of the British Saudi-Arabian Parliamentary Group, let me say how much we appreciated and were honoured by the visit of the Saudi Foreign Minister, Prince Saud Al Feisal, to the House.
Successful though all the aspects of that royal visit were, there can be no resting on political, diplomatic, or social laurels. If Britain is to win the glittering export prizes held out to us by the remarkable £80,000 million five-year plan of Saudi Arabia, the Government and our top export companies must become much more active in that kingdom, where Britain has hitherto been conspicuous largely by her absence.
Why on earth should the Memorandum of Technical and Economic Co-operation signed between the Governments of Great Britain and Saudi Arabia be a classified document? I understand that the paper contains references mainly to future economic hopes in the areas of agriculture, town planning, educational buildings and training of personnel, and I cannot understand why a paper setting out openings for British exporters should be regarded as secret.
That is to some extent indicative of certain old-fashioned attitudes that still exist towards commerce in the Foreign Office. I thought that the Foreign Secretary was a little complacent when he

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spoke with warmth about the excellent commercial work being done by British embassies. Naturally, there are many embassies—Teheran is an example—where remarkable performances are being put up. But I have been mildly worried for some time about the unevenness in quality of commercial attaches in British embassies. I think that this unevenness is perhaps due to the Foreign Office policy of expecting its diplomats to shift effortlessly from political reporting or Chancery duties into commercial work.
I believe that export promotion is such a specialised area that Britain would do better to revert to the Australian system of appointing skilled trade commissioners to serve under ambassadors in British embassies. As with the Australian system, we should recruit trade commissioners for short tours of duty from private enterprise businesses in this country. Perhaps the British embassy new office in Riyadh, which I understand is to be headed by a senior official from the Department of Trade, is a step in the right direction.
Finally, I hope that the Foreign Secretary will haul aboard the message that, although new initiatives for export promotion arrangements in the Middle East oil-producing States should be a high priority of his trip, all such initiatives will be largely wasted unless Britain is seen to be actively helping in the search for peace in the Middle East and pursuing a genuinely even-handed foreign policy in doing so. It used to be said that trade followed the flag. I suggest that now it would be true to say that trade follows foreign policy.
Even after listening to the right hon. Gentleman's speech I ask myself whether the Government actually have a clear policy for what they are trying to do in the Middle East. Are we playing the part that President Sadat and others want us to play in peace-making? There is an impression in the area that the Government are to some extent tied to America's apron strings. Nothing could be more demeaning to Britain's posture in the Middle East than that the right hon. Gentleman should be thought to be Dr. Kissinger's poodle, particularly in countries such as Syria and Iraq where, incidentally, the export potential is fast becoming almost as attractive as in some of the Gulf States.
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Britain must not be afraid to speak out in its own independent way on Middle East affairs, particularly, of course, on the Palestinian problem, which I believe can be solved in the long term only by the creation of a Palestinian State on terms that do not threaten the existence of Israel.
In common with other hon. Members, I believe it essential that we keep up the momentum of the search for peace. In conjunction with my hon. Friend the Member for Westbury (Mr. Walters) I am not too sure that the Sinai Accord is a sound foundation on which to build that peace. I could give several reasons for this belief. I shall single out one. I believe that it is absolutely wrong that one of the terms of the deal of this accord should be that Israel is to receive Pershing missiles from the United States. As the Pershing missile has been designed exclusively for use with a nuclear warhead, the American policy of supplying Pershing missiles to Israel—which policy incidentally was strongly opposed by the politically late Mr. James Schlesinger of the Defence Department—will, I believe, earn the United States Government the opprobrium of mankind if nuclear weapons are introduced into the Middle East in this way. I hope that the Foreign Secretary will do everything in his power to get this policy altered.
Although I have criticised points of detail in our Middle East policy, I hope that the Foreign Secretary will accept that both sides of the House wish him well on his forthcoming tour, and I hope that some of the points made in this debate will help him to be both a good statesman and a good salesman for Britain in the Middle East.
8.40 p.m.
Mr. Alan Lee Williams: I shall not take up the observations of the hon. Member for Thanet, East (Mr. Aitken) about the Middle East, except to say that I share his view that there is now an opportunity for the United Kingdom and Europe to play a constructive rôle in the, Middle East. The only difference I have with the hon. Gentleman and several other hon. Members who have spoken on this subject is that I have some reservations about moving away from the agreements already reached in the Middle East. If we are to play a constructive rôle, I think it should be to underpin the

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agreements that have already been reached, largely through the initiatives of Dr. Kissinger. But I see a rôle for us there, and it is an important rôle.
I want to come back to the main thrust of the debate and pick up a point made by my right hon. Friend the Foreign Secretary when he said that the core of foreign policy was based on European and American understanding. I believe that to be profoundly true. It is the central issue for us today.
I start from the basic premise that Europe and America are natural partners whose political, economic and strategic interests converge. But the European-American partnership now requires the close and urgent attention of all Governments committed to maintaining the credibility of Western European defence. British policy ought to be directed towards fashioning a new European partnership within which Western Europe could and should be required in the 1980s to play a primary rôle in its own defence, with America playing a markedly secondary rôle in the defence of Western Europe.
That changed strategic relationship should be based upon a harmonised foreign policy within the European Community, as, indeed, was achieved in the common approach by the Community towards the European Security Conference. The pluses of the European Security Conference seem to me to be that the overall balance seems to owe more to Western philosophy than to Eastern philosophy. But, of course, the amount of energy, time and diplomacy that have gone into reaching an agreement at Helsinki has, to a certain extent, detracted from the building up of the European Community itself and, on from that a new relationship with the United States.
I ask my right hon. Friend, who negotiated the arrangements for Helsinki with great skill, to turn his attention now to the creative opportunity presented within the European Community and to the opportunities presented in building up a new relationship between Europe and America. The difficulties facing us are complex. Many of the countries of Europe face tremendous internal problems arising from the recession and the
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energy crisis, problems which, inevitably, have diverted their attention from community building in the Atlantic area, across the Atlantic area, and, above all, between the Atlantic area and Japan.
Inevitably, at this time of night, I have to truncate my speech to enable other hon. Members on both sides to speak, but I want briefly to refer to two or three other matters with which I had hoped to deal at greater length. I believe that we now have a real opportunity to give a new impetus to British diplomacy within the European Community. I think that my right hon. Friend will agree that, with all the problems he has faced, there are certain other difficulties arising now which give the impression—quite wrongly, but the impression is nevertheless given—that Britain is hesitant on a number of important internal matters within the European Community.
I know from my right hon. Friend's approach that he is aware that, if he goes too fast or too far, difficulties will be created not only within the Labour Party, but in the country as well. I understand all that. Nevertheless, from the contacts that I have with our political friends, as it were, within the European Community, I know that there is a feeling that Britain is still very reluctant on a number of fundamental issues in the development of the European Community. It is important that we should dispel that impression as soon as possible.
I do not share the criticism made by the right hon. and learned Member for Hexham (Mr. Rippon), or endorse the points made by the hon. Member for Inverness (Mr. Johnston), speaking for the Liberal Party, when he accused my right hon. Friend on the energy question, about whether we should have separate representation at the projected Paris meeting. I do not attach the same importance to that issue. I think that the oil question is unique. It presents tremendous problems for the United Kingdom, and I hope that our partners will understand the unique nature of those problems. They are problems of which we are all fully aware in this country, because of the attitude taken up in various parts of the United Kingdom. That is not the issue. But there are other areas where, I think, we could show greater enthusiasm.

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While I agree with my right hon. Friend's strategy, I find myself at times disagreeing with his tactics. A few years ago, I did not even agree with his strategy. Either I am learning, or my right hon. Friend has come a long way. He has a very special position within the European Community if only he can now give the impression, as I hope he will as time wears on, of being enthusiastic about thinking within the Community and acting within the Community—without necessarily in any way betraying our national interests.
The men who led us out of the thicket of mid-century parochialism—people such as Keynes, Hammarskjoeld, Bunche, Pearson and Monnet, to mention but a few outstanding individuals—are dead or retired. The task immediately ahead of us now is to find worthy successors. Perhaps my right hon. Friend will seize the initiative and give the lead to Europe that it so desperately needs.
8.47 p.m.
Sir George Sinclair: I am delighted to follow that brief but very effective speech by the hon. Member for Hornchurch (Mr. Williams). I share with him and with many other hon. Members a deep belief in the need for Europe to play a greater part in its own defence. For 25 years we have had peace under the American leadership of NATO. It is now up to a more united Europe to make a greater effort in its own defence. That need has not decreased over the years.
Today, we are faced with an ever-increasing nuclear and conventional strength in Russia. It is a prime responsibility of Government, which I know the Foreign Secretary accepts, to provide for the defence of our own country as part of Europe. At the moment, we are not, perhaps, strong enough industrially to play the part that we should play, in view of our responsibilities, but we must not be the ones who lead a decline in the European defence effort and NATO. In the past, we have led Europe to defend itself. We must keep up our efforts within the European Community.
I turn now to a small part of the NATO sphere of interest—Cyprus. I declare an interest because I draw a pension from that country and, for five years, I was in office there. It is of direct concern to NATO because it is over Cyprus that
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Turkey and Greece, two members of NATO, might turn to armed conflict. That is what makes the island of major international importance. It also has great human importance for us all because of the sufferings of both communities—in the Turkish community when in 1964 many became refugees and in the Greek population following the coup d'état and the subsequent Turkish invasion in 1974. There have been great movements of population, and great suffering among all communities in Cyprus—even among our own expatriate community.
I wish the Foreign Secretary well in his search for a solution. It is a stubborn task, as anyone who has been as concerned with it will know. But to those people who think that it should be left to the two communities on the spot, I should like the Foreign Secretary to explain that for hundreds of years that has not been possible in Cyprus. It has not been possible in recent years. It is not possible now. So many interests are involved in that small island, with a population of about half a million, that its fate is bound to be affected by countries outside, especially by Greece and Turkey, which have communities in Cyprus bound to them by religion, culture and language.
There is much to be said on what led to the outbreaks of violence between Greeks and Turks since the settlement made in 1959–60. It is well to remember that that settlement was not reached solely by Britain as the sovereign Power. It was reached in consultation with Greece and Turkey, which were told by Britain to put forward a settlement between them that would carry acceptance by their two communities in Cyprus, provided that we were able to keep in Cyprus a secure base in an island at peace. That was the origin of the settlement. It was an international settlement.
The trouble has been that, from the beginning, the Turkish Cypriots were robbed of some of the main provisions of the settlement, provisions designed for their protection and on the basis of which they became party, as Turkey became party, to the agreement.
There have been faults on both sides, but never let us forget that the provisions of the 1959–60 settlement, upon which the Turks relied, were frustrated by the Greek-Cypriot leadership in Cyprus, with the backing of the Greek Government.

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We bear some responsibility in this. I was there at the time. I believe—with hindsight—and I claim no credit for this—that we ourselves should before Cyprus became independent have put those provisions into effect. I believe that it would then have been possible to avoid some of the subsequent conflicts.
But let us not spend more time talking about what is past. It is urgently necessary for the interests of the inhabitants and of NATO that we should obtain a settlement in Cyprus. NATO could be split apart on its most sensitive edge by armed conflict between Greece and Turkey. Those two countries have an interest in a solution. So have we. America, the main force in NATO, has a major interest in a solution in Cyprus, even if, as I believe, the United States have often gone on the wrong track in trying to find a solution.
The enlarged EEC, too has an interest in a solution because the two countries are on the periphery of the EEC. Greece has an application to join, and Turkey is hoping to join. We all have an interest in this island reaching a settlement, and it must be an international settlement. I do not believe that we can now go back to the old settlement of 1959–60, but we must reach an arrangement that will make the Turks feel secure.
I hope there will be a unified island, but, as matters are now, is must be based on two zones to which a great range of powers will have to be devolved under an internationally agreed constitution. Each community will need to feel confident that it is master in its own part of the island. But there must be a central Government that will establish as much common ground as possible, will develop that common ground, and will try to resolve the conflicts of interests that are bound to occur on an island which has been torn apart and has suffered major bodily transplants.
I, therefore, hope that there will be a central government, that Cyprus will be independent, and that the settlement will be based on two zones which will manage most of their own internal affairs, especialy matters such as education and social services.
To reach a solution will take a great deal of patience. I hope that all encouragement
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will be given by the Foreign Secretary to the two main protagonists, Mr. Clerides on the Greek Cypriot side and Mr. Denktash on the Turkish Cypriot side. Both are greatly concerned with the future of their own communities, but they are also deeply concerned about the future of all the peoples of Cyprus and its continued independent existence.
There is plenty of good will surrounding Cyprus, but what has happened there, not just over the past 20 years but for many years before, has created problems that may remain intractable for many years to come. I wish the Foreign Secretary all good fortune in trying to get reason to prevail and I hope that there will be two zones within one unified Cyprus—there must be some adjustment to current communal frontiers to make that possible.
8.58 p.m.
Mr. Robert Hughes: I wish to refer to two historic events in southern Africa that will take place this week. Tomorrow, the Portuguese colonisation of Angola will finally end on a date, 11th November, which represents the 500th anniversary of the Portuguese establishment of Luanda. The hopes that were expressed a year ago, that there could be a peaceful handover of power to a coalition Government do not appear likely to be fulfilled. We are seeing a bitter civil war among three liberation movements—the MPLA, the FLNA and Unita. Recently maps have appeared in the Press, allegedly showing how much of the territory is controlled by each organisation. I cannot say—and I suspect that no one else can say—how accurate those maps are.
The problem for the British Government is whom to recognise as from tomorrow, or the day after, as the legitimate Government of Angola. The MPLA claims to be the sole liberation movement in Angola and to be the sole governing body. Strenuous efforts are being made by the OAU to try to reach some agreement among the three organisations so that fighting will end and will not be pursued to its bitter conclusion.
Traditionally the Foreign Office rôle in a situation like this is "wait and see". Traditionally the Foreign Office attitude is "Once we know who controls the majority of the country, we shall decide

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on recognition." But I suggest that such an approach in Angola is not appropriate. The attitude that we must wait and see who controls the majority of the country before we grant recognition is a spur, if adopted by other countries, for the fighting to continue with renewed bitterness.
All of us are concerned about the import of foreign forces and of foreign influence in Angola. The Chinese have been involved, as well as the Soviet Union and the South Africans. We know that there are mercenaries fighting on the Unita side and that South African forces have crossed the Caprivi Strip into Angola. Some people may say that is all a lot of nonsense, but it is not so long ago that the same charges were made about South African police and army units operating inside Southern Rhodesia. We were told that that was not true. In fact, confirmation that such an operation was taking place came when the South Africans said that they were withdrawing their police.
I believe that we could best serve the independence of Angola and bring about a peaceful solution either by recognising the transitional Government, which is probably the MPLA, or by recognising the MPLA, while at the same time pursuing every avenue we possibly can to end the fighting.
I refer to the second historic event, which is not of such long-standing duration but is in a sense of equal importance. The 14th November is the tenth anniversary of the declaration of independence by Ian Smith. I believe that the past 10 years represent a decade of shame for Britain. It is utterly shameful that 10 years after the event we should still be talking about the possibility of a negotiated settlement with Ian Smith.
I understand that the Prime Minister said in a chat show on Mersey Radio last week that one of the mistakes that he now recognised was that he thought in the days of "Tiger" and "Fearless" that Ian Smith was sincere about his negotiations over a move towards independence. I do not believe that the position has changed since then. Ian Smith is trying to buy time in the hope that there will be a split in the African national movements that will carry on for a long time. As we know, they are split at the moment. If he takes that attitude, he will be sowing the seeds
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of destruction in Rhodesia, which he will live to regret.
None of us wants to see a long liberation struggle in Zimbabwe. We do not want to see repeated in Rhodesia the events of Mozambique, Angola or Guinea Bissau where people had to fight for many years in order to gain independence and were held down by repression. Those are the seeds of disaster, and for any intelligent persons to believe otherwise seems inconceivable.
Therefore, although I entirely accept that the position in Rhodesia has to be resolved by the people there, I hope that the British Government will not take the view that we have no responsibility beyond simply the final agreement of a constitutional settlement. The Labour Party programme is quite specific. We said that whatever the settlement was, and however it was reached, we should submit it to the Rhodesian people in a referendum on the basis of "one man, one vote" to ensure that it was acceptable to the people of Rhodesia.
Nothing less than a guarantee that we stand by that pledge can lead to any properly negotiated settlement. We ought to say specifically to Ian Smith and the white settlers in Rhodesia that we stand by the commitment we gave in our Labour Party programme in 1973—that we support the liberation movements in southern Africa.
Events take a curious twist. We stand back and say that we shall not help the liberation movements when they see that the only way for them to achieve their freedom is to take up arms. They look around the world to see where they can possibly get assistance and, knowing that NATO arms have been found in southern Africa to be used against them, they get arms from the Soviet Union or Czechoslovakia. We then say that this shows that they are in the camp of the Russians and automatically back the opposite side, because we get bound up in this sort of cold war mentality.
What happens in Rhodesia is our responsibility, and if we want to see events brought to a speedy conclusion, we should say that we want to guarantee the settlement and that, if it has to come to an arms struggle, we shall supply weapons, if necessary, to the liberation movements to enable them to obtain their

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freedom. In this country we take for granted civil liberties, the right to demonstrate, the right to argue, the right to criticise, the right of trade union organisation, the right to vote. But apparently this commitment does not go to the extent that we are prepared to support people in southern Africa who wish to obtain their freedom.
I welcome, as many of my hon. Friends have done, the Foreign Secretary's initiative to respect the integrity of the people of Belize, and his view that they should not be threatened by a neighbouring country, and that they have rights. That contrasts strangely with the attitude that we shall never in any circumstances use force in Rhodesia to see that a majority population is not held down by whites in the minority.
I hope that the fact that the Prime Minister of South Africa is involved with President Kaunda and others in trying to solve the Rhodesian problem will not lead us to the view that we should go back on our party programme in relation to southern Africa and South Africa itself. We said that we would look carefully at the issues involved and cancel the Rio Tinto Zinc agreement in South-West Africa. That pledge has now been abandoned. We said that we would not encourage further British investment in South Africa. That pledge, too, appears to have been modified, if we are to take the British Steel Corporation and British Leyland investment decisions into account.
I hope that we shall not let our contacts with South Africa lead us away from our pledge or away from what I believe is one of the most succinct definitions of how a Labour Government should behave in the whole of southern Africa. We said:
"Neutrality towards the existing and coming struggles in Southern Africa is impossible. Between the exploiters and the exploited there is no middle ground."
All my right hon. and hon. Friends assented to this party programme. If in our foreign policy we act as a Government on those two simple sentences, I believe that we shall see that our responsibility is to those who have been oppressed for generations and who continue to be oppressed, and that we shall
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do all we can to remove that oppression from them.
9.9 p.m.
Mr. Christopher Tugendhat: The last four speeches have been on the Middle East, Western Europe, Cyprus and various parts of southern Africa. That demonstrates more clearly than anything else the difficulty in which the House has found itself in this debate.
We have foreign affairs debates so rarely that it is impossible for Members to find a theme that can inspire the whole debate. It is impossible for anyone to deal in depth, one speech after another, with the same problem and, of necessity, the debate ranges widely over a variety of problems.
As the Foreign Secretary said at the outset of our proceedings, this is not a satisfactory way in which to deal with foreign affairs. The Foreign Secretary is a powerful Minister, a leading figure in the Government, and a major figure in the Labour Party as well, which is not always the same thing, and I hope very much that in the next Session he will use his substantial influence to ensure that we have more debates, not just of a general nature, but specific debates on particular foreign affairs subjects, as a number of hon. Members have asked.
Notwithstanding the rather diffuse nature of the debate, we have had some distinguished speeches. The return to foreign affairs of my right hon. and learned Friend the Member for Hexham (Mr. Rippon) was particularly welcome and I, and I am sure many hon. Members on both sides of the House, welcomed his robust remarks about Britain's European policy. I hope very much that the Minister sitting on the Front Bench at the time took them to heart.
My right hon. Friend the Member for Brighton, Pavilion (Mr. Amery), too, asked what I thought were some penetrating questions about Helsinki and detente, questions deserving an answer. The hon. Member for Oxford (Mr. Luard), speaking with his great experience of international affairs, had a great deal to say that was interesting about the organisation of business in the United Nations.
The only speech I regretted was that of the hon. Member for Penistone (Mr.

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Mendelson). I thought that his remarks about President Sadat were unjust and uncalled for. President Sadat has risked much for peace and moderation. Indeed, he has risked more than anyone in this House has ever been asked to stake.
One ought to give credit where credit is due. President Sadat has earned the right to the support and praise of people who want peace in all parts of the world. As he has just visited this country, it is important that we recognise the great contribution that he has made towards peace in the Middle East and that I am confident he will continue to make.
Other features of the debate have been the concern that a number of hon. Members have expressed about the Government's European policy and also the concern that a number of my hon. Friends have shown about the dual standards that the Government have applied in dealing with issues as they arise in different parts of the world. My hon. Friend the Member for Shoreham (Mr. Luce) raised this topic.
Many of us remember how the Foreign Secretary dealt with this matter at Question Time recently. He described the criteria that he adopted in deciding whether to issue a public complaint or protest to a particular country. When I listened to him, I was reminded of Milton who described hypocrisy as
"the only evil that walks
Invisible, Except to God alone."
I do not think that the Foreign Secretary is a hypocrite. As a rule, he does not display those tendencies. However, his remarks at Question Time last week about the criteria that he adopts in deciding when to make a public protest and when not to do so, and his attempts to justify the way in which he had behaved towards Spain and the way in which he has not behaved towards other régimes in Eastern Europe smacked of hypocrisy. I thought that Milton was perhaps not quite right when he said that it
"…walks
Invisible, Except to God alone."
On that occasion, I think the hypocrisy was visible to the House.
This is more than simply a party point. As the Foreign Secretary himself said at the opening of his speech today, Britain does not have the power that it had when he first came to the House, yet it has
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influence. It also has the desire and will to use its influence. Our influence would be greater if we did not indulge in double standards. When one does not have physical power or armed might, when one relies on moral suasion, it is important to be even-handed and to be seen to be fair.
Another reason why it is important is that these remarks and protests about the application of double standards are not noticed simply in the Western Press and in the House of Commons and such places. They are noticed where they really matter—in the prison camps and gaols in the countries in which oppression takes place.
I do not know whether the Foreign Secretary, during his very busy time in office, has had the opportunity of reading Solzhenitsyn's book "The First Circle" In that book there is a particularly moving passage in which inmates of the prison in which the greater part of the sequence takes place talk in rather rueful terms about the way in which they are forgotten by everybody outside, while the political prisoners in Greece attract so much attention, and in rather rueful fashion they compare their own lot with that of prisoners in Greece and the attention that was paid to them. Since then, things have looked up on that front in some respects. Much more attention is now paid to Russian prisoners—[Interruption.] My reference to Solzhenitsyn is quite correct.
Mr. Mendelson: I tried to deal with that point, and I repeat it now. The charge is quite untrue. From the very beginning of the foundation of the Soviet Union to the invasion of Czechoslovakia it has been the Labour Party and Labour supporters who have raised the subject of political prisoners in Communist countries many times. We are on record as having done that, so the charge is untrue and ought not to be repeated.
Mr. Tugendhat: The hon. Member for Penistone took 30 minutes to make his speech, which is a great deal longer than I have or even his right hon. Friend had.
The point that I made was about the Government. My hon. Friend the Member for Chingford (Mr. Tebbit) tabled a Question that was answered on 5th November by the right hon. Gentleman. On that occasion the Government admitted the central point that I am making

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I am not talking about Labour supporters—those great champions of liberty in Communist countries such as the Webbs, who saw through all this kind of thing. If the hon. Gentleman read Orwell and Muggeridge, he would realise that what he is saying is not by any means the whole truth. I was referring to the Government, and I should also like to ask the hon. Gentleman to refresh his mind on George Orwell and he might learn a little more about double standards. I shall not allow myself to be deflected for too long by the hon. Gentleman. He should reread his Orwell. I am sure that he has read Orwell, even if he has since forgotten it.
The other thread running through the debate was the concern about our policy in Europe. My right hon. and learned Friend the Member for Hexham and the hon. Members for Inverness (Mr. Johnston) and for Hornchurch (Mr. Williams) mentioned it, and I shall not go over the ground that they covered. However, I hope that the fears that they expressed, which I largely share, will not prejudice the success of the Paris conference, to which the Foreign Secretary referred in his opening speech.
The Foreign Secretary said that the conference was extending much wider than simply the question of energy. It will be an important moment in the relationship between the producer countries and the consumer countries in respect of all commodities, not only oil. It will also be an important moment in the relationship between the developing countries and the industrial countries. Its importance, as the Foreign Secretary said, extends far beyond oil.
I hope that as he conducts his initiative over the representations he will not prejudice the important developments that we all hope will take place. They are important, not only in their own right, because the relationship between the developing countries and the industrial countries is important, but because the British Government have paid a great deal of attention to this problem. They have put much emphasis upon it in the conduct of their affairs.
I think that we all agree that the emphasis—beginning with the Prime Minister's initiative at the Commonwealth Prime Ministers Conference at Kingston
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—that the Government have placed upon it was right. Whether or not one agrees with the precise proposals in different areas, clearly it is of great importance to the United Kingdom that the relationship between the developing countries and the industrial countries should be harmonious and that new arrangements should be devised to deal with trade, commodities and raw materials. It is particularly important for this country above all, partly because we are more dependent than most on imports of commodities and other raw materials, and more deeply affected than most by fluctuations in their price and interruptions in their supply.
We are very much affected also by the condition of the economies in the producer countries, since of all European countries we still send a greater proportion of our exports to the raw material producers than do our neighbours and our partners in the European Community. Therefore, their prosperity and our prosperity are closely linked, and it is particularly important for us that they should be well off and able to import our manufactured goods.
Mr. Ennals: The hon. Gentleman is setting out a number of arguments showing why the Government should be represented at the conference. Before he ends this part of his speech, can he answer the question that his right hon. Friend did not answer? Does he think that Her Majesty's Government should have a seat at the conference or not? His right hon. Friend would not say "Yes" or "No".
Mr. Tugendhat: The right hon. Gentleman will understand if I go a moment over my allotted time in answering that question. I am sure that he would agree—I believe that the Foreign Secretary made this point—that we must look at Britain's membership of the Community as a whole. We have to consider interests on a whole range of subjects together. We do not want to prejudice our interests in one field by our actions in another—
Mr. Callaghan: A real Foreign Office answer.
Mr. Tugendhat: Hon. Members can see how useful it was to be able to listen to the Foreign Secretary earlier today. It

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is important that we should not prejudice our important objectives in one sphere by our behaviour in another. There is a danger that the initiative taken by the Prime Minister at Kingston will run into the sands because of what is happening now.
I was particularly pleased by the extent to which the Foreign Secretary referred to earnings stabilisation schemes. In his speech at the Special Session of the United Nations he referred to them generously, but I have felt that perhaps we had not devoted enough weight in our contributions to earnings stabilisation schemes. There has been a slight tendency to allow the less developed countries' proposals for buffer stocks and commodity agreements to have rather too much of the running. I am sure that the Government are right to say, as they have said in a number of fora, that the UNCTAD proposals for a $6 million buffer stock to support the prices of 10 commodities is an important initiative that deserves consideration.
But it would require 1 billion dollars at recent prices to accumulate a buffer stock of copper equivalent to 10 per cent. of a year's consumption; and 10 per cent. of a year's consumption has already proved inadequate in the case of tin. I have not reason to suppose that it would not prove inadequate in the case of other raw materials.
I hope that the Government will put their full weight behind proposals for earnings stabilisation schemes on the Lomé model. I hope that they will in particular support the imaginative ideas put forward by Dr. Kissinger at the United Nations for a much more ambitious Stabex scheme, involving annual loans of up to 2·5 billion dollars and a total of outstanding loans of 10 billion dollars. The Lomé Convention is a modest experiment in this field, but it is an exciting one. If the British Government would lend their support to the United States and other Governments putting forward more ambitious schemes, we could make considerable progress on this front.
My reason for preferring earnings stabilisation schemes of this sort are threefold. First, experience shows that it is safer not to try to outwit the market, that what often brings commodity agreements down, what leads to buffer stocks
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running out and things of that nature, is that it is difficult to read markets before they move. It is easier to work on a basis of providing people with assistance when one knows what they have lost as it were, rather than trying to second-guess the way markets will move.
The great advantage of earnings stabilisation schemes is that they enable one to help producers hit by a local disaster. A commodity agreement guaranteeing prices is all very well if one happens to be producing the stuff, but if one's great mine explodes or one's cocoa is hit by blight, disease, or something of that nature and one does not have anything to sell, having a commodity agreement to guarantee the price does not do one a great deal of good. If one has guarantees to support one's earnings if they fall regardless of the reason, apart, obviously, from political reasons, one is enabled to help people who need it.
Another reason for preferring earnings stabilisation schemes is that they enable one to identify the poorest countries. When we debated aid and development on Friday, an aspect of the Government's policy that secured universal support in the House from all the parties represented here on that occasion was the emphasis on helping the poorest countries, and the earning stabilisation scheme enables one to concentrate help on the poorest to a greater and more accurate extent than price stabilisation schemes.
The Foreign Secretary referred also to the transfer of technology, which is another aspect of the relationship between the industrial countries and developing countries to which the Government have given a lot of attention, and indeed, to which the Commonwealth Secretariat in its most interesting report, "Towards the New International Economic Order", has also devoted some attention. I do not dissent from what the Prime Minister said at Kingston, nor from what the Commonwealth Secretariat said, but I regret that other things were not said as well.
There has been a tendency in the British Government's approach to these matters so far to think of the transfer of technology from industrial countries to developing countries as something that is largely a matter between Governments. It has been talked about largely in an

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inter-governmental context. Governments have a rôle to play, and on that score I do not dissent in any way from what the British Government have said.
None the less, it is a pity that the British Government have not said more about how to provide a framework in which foreign direct investment could play a greater rôle in the developing world. Britain has an important contribution to make. We are one of those developed countries with a greater penetration by foreign direct investment within our economy than many others. We are also second only to the United States as a home of international companies. Consequently, we have experience both as recipient and exporter of foreign investment.
On the question of the transfer of technology, it must be recognised that multinational companies represent a substantial reservoir of talent and experience, as well as technology, if one can use the word in that context. The developing world, like Western Europe, would gain enormously if a way could be found to harness the energies of the multinational companies to assist the developing countries in such a way as to guarantee those countries against the abuse of power and against the readiness of some of those companies—a small minority, but some—to find loopholes in the laws of the countries in which they operate.
The United Nations took a useful initiative when it set up its inquiry called the Committee of Eminent Persons—a rather odd name with which to dignify an inquiry. Nevertheless, the eminent persons produced some interesting ideas and showed that it was possible to bring together experts from the developing countries and from the industrial countries to find ways of harnessing these companies to the development of the developing world.
The European Commission, too, has done a lot of useful work in this field. Its ideas for the formation of consortia to undertake particular projects in developing countries where there would be a partnership of State enterprises from the host country—from the African or Asian country or wherever the project was—State enterprises from Western European countries, and private enterprise concerns operating together within
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a context set by the Governments of all the countries concerned are extremely interesting and well worth the study and attention that experts in the European Commission have devoted to the matter.
I know that the Labour Party has a certain prejudice against large multinational, private enterprise concerns. But even in a parliamentary debate, hon. Members would agree that, especially in Scotland, Ulster and parts of the United Kingdom some distance from the industrial centre, foreign direct investment has played a very useful rôle in providing jobs and opportunities as old and established industries decline.
Mr. Robert Hughes: Chrysler.
Mr. Tugendhat: I thought that someone would mention Chrysler. Chrysler is the exception that proves the rule, and it shows the necessity of having very tight rules and of establishing a framework. It shows the necessity of having a Government with experience in these areas with the resources to work out satisfactory laws and to use their expertise to the benefit of developing countries.
Mr. Robert Hughes: What about Chrysler?
Mr. Tugendhat: As the hon. Gentleman comes from Scotland, he will no doubt be able to tell me whether he puts Honeywell, for instance, in the same category as Chrysler, or IBM and all the other companies that have brought jobs to Scotland. I am sure that he will agree, knowing about Chrysler and about Litton—in case he was not aware of Litton, the other example of a multinational that has run away—that these things do happen. I have written in books on this subject myself, so that I am not ignorant of the dangers, but the opportunities and benefits that they can bring are great. The United Kingdom, both alone and as a member of the European Economic Community, has a great deal to offer the developing countries in finding ways to harness the resources and energies of private enterprise with their own State concerns within a legal framework that will guarantee observance of their own laws and the interests of their own economic development.
Those were the principal observations that I wished to make. I conclude by asking the Government to consider carefully the need for consistency, in both the

1053
way in which they exercise our moral influence and the way in which they decide whom to praise and whom to blame. The Foreign Secretary had some wise words to say about that when he talked about Cyprus. I hope that the way in which he referred to Cyprus will prove a better guide to the way in which we should behave in other areas than the ways in which we have behaved in other parts of the world.
I hope, too, that we shall remember, as has been said by a number of hon. Members on both sides of the House, that Britain's greatest interest and greatest ability to be a force for good in the world comes when we act through and in partnership with the rest of the European Community. I hope that the Government, now that this country has joined the EEC, will ensure that we not only do our best to build a strong and united Community, but act where possible through the Community towards the rest of the world.
9.35 p.m.
The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): I should like to link the last point made by the hon. Member for City of London and Westminster, South (Mr. Tugendhat) with his first point. The last point was about consistency and the first point about the wide-ranging debate and the fact that we do not have enough time for foreign affairs debates in the House. I agree with my hon. Friend the Member for Penistone (Mr. Mendelson), and I wish that we could have more debates on specific subjects instead of roaming around the world as we do. But for consistency, I must say to the hon. Member for City of London and Westminster, South that we have had three full days of foreign affairs debates since the last Queen's Speech, all of them in Government time. The Opposition refused to grant a day on the subject in the debate on the Queen's Speech and have not granted a single Supply Day since. So if I agree with him that I should say to my right hon. Friends that I should like to have a little more time, I hope that he will also show that due respect and do the same to his right hon. Friends. Our record is better than theirs.
I will try to reply to as many of the questions as I possibly can. There have
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been three themes that seem to have run through the debate, on which I think we are in agreement. First, although our voice is weakened by our economic difficulties, our influence in the world, as I think all have recognised, is substantially greater than could be deduced from our economic strength alone. This point was made by the right hon. Member for Chipping Barnet (Mr. Maudling), who spoke from the Opposition Front Bench. In reply to a comment made by the right hon. Member for Brighton, Pavilion (Mr. Amery), I would say that we cannot, of course, do it alone. We are not talking about Britain's rôle on its own but of the influence that we have in the world, not only for our own sake, but because of our rôle in the Community, in the Commonwealth, within the Atlantic Alliance and in the United Nations.
Secondly, foreign policy is more and more concerned with world economic issues. This debate has shown that it is concerned with world trade, monetary reform and economic relations, both within the industrialised world and between the developed and developing countries—hence the importance that we attach to the economic summit at Rambouillet and the forthcoming Conference on International Economic Co-operation, about which I should like to say a word in a moment or two.
Thirdly, Britain's interests depend upon a minimum of international tension and a maximum of co-operation. They can best be pursued by an outward-looking and vigorous foreign policy. During the debate, in spite of some rather harsh words from the right hon. and learned Member for Hexham (Mr. Rippon), paying his welcome visit to the House, there has been a warm welcome for the constructive rôle that my right hon. Friend has played in the EEC, in the Commonwealth, and in the United Nations. We have developed a close partnership with the United States, and we have achieved a substantial improvement in our relations with the Soviet Union. I believe that this has made a major contribution to détente.
A good deal of comment has been made on the Helsinki Conference. It is too early yet to draw up a balance sheet on the Helsinki Agreement. We must follow the Agreement through very carefully. We are keeping developments under close review. We have discussed

1055
a number of the follow-up points with a number of other Governments, in the context of UNESCO, the Economic Commission for Europe, and also bilaterally. For example, we have initiated with the Soviet Union a wide-ranging review of the problems facing journalists.
There have been a number of observations about our rôle in the European Community. The matter was raised by the right hon. Member for Chipping Barnet, by the right hon. and learned Member for Hexham, and by the right hon. Member for Brighton, Pavilion. Since the referendum so resoundingly endorsed British membership of the European Community, the Government have been playing a full and constructive part in all the Community's policies and activities. In doing so, naturally we are doing our best to promote British interests. That is what one would expect a British Government to do. We realise, too, that it is in the British interest that the Community itself should prosper and be strengthened. That is the spirit in which we shall approach the questions concerning future development of the Community which will arise in the years ahead.
The right hon. and learned Member for Hexham accused my right hon. Friend of being ham-handed, while the hon. Member for Inverness (Mr. Johnston) used the words "passive" and "negative". I think that that was because of my right hon. Friend's insistence on a separate seat at the Energy Conference. From what has been said, anyone would think that the British Government were the only Government in the EEC that ever stuck up for themselves against all their other partners. That is not so. France, Germany, Denmark and others have all dug in their heels on occasions on what they considered to be their national interests. The problem may be that British newspapers give my right hon. Friend too good a Press.
We are not wreckers—quite the contrary. We work hard and successfully to produce common EEC positions. Portugal is one example that has been discussed in the debate. Helsinki is another example. At the United Nations we were able to agree on a common EEC stand. During the last session of the General Assembly of the United Nations there
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was a total of 94 occasions on which the EEC countries voted together—that is, on 80 per cent. of the votes cast. That is a tremendous step forward.
On the question of the Community standing together, I return to a point about Spain, made by several Opposition Members. The protest which we made to the Spanish Government was carried out collectively with the other members of the Nine. Is it the suggestion that we should have been the one man out on this? Is the right hon. and learned Member suggesting that the Eight should have wished to make their protest and that we should have been silent? That is the only assumption I can make from the protests that have come from his side of the House.
Mr. Rippon: The right hon. Gentleman referred to the Government's insistence on their separate representation at the World Development Conference. No one wants to embarrass the Government, but how will they get out of the difficulty they have created for themselves by pursuing the wrong objective at the wrong time and in the wrong way?
Mr. Ennals: We shall have to see. In a moment or two I shall come to the conference to which the right hon. and learned Gentleman referred. I was talking about unity within the Community. Unity does not mean uniformity. It certainly does not mean subservience. Neither the British people nor, in the long run, our EEC partners would thank us if we were to conceal our concern about matters of vital national interest. It could only mean that when the inevitable day of reckoning came the British posture would be far tougher than the one adopted by my right hon. Friend on the crucial issue of oil. He was right to speak out and make clear as early as he did the position that we took.
The EEC is a grouping of nine nations, each with centuries of independent history behind it. Such nations can proceed relatively swifty towards harmonisation on all sorts of economic matters. But to suppose that questions of supreme national interest can be Europeanised overnight is, frankly, to live in Euro-cuckoo-land.
I want to refer to the International Conference on International Cooperation. The issue is vital, none more vital to the economic future of this

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country. My right hon. Friend was right to make a claim to our own seat at the conference. It still is not clear to me whether the Opposition Front Bench would have taken the same view. There has been a great deal of hesitation—I suppose for internal party reasons. But none can deny that as by far the major producer of energy in the Community by the 1980s—certainly of almost all the oil—we have a distinctive national interest in this matter.
It is a matter on which, as yet, there is no clear mandate. If it were true that we all spoke together, that the whole Community accepted our interest, of course there would be no problem. I think our position is understood by opinion abroad, as well as in Britain and in this House. I say to the right hon. Member for Chipping Barnet that in staking our claim we are in no way preventing the Community from attending, nor are we impeding the Community in attending, nor are we impeding the Community's preparations for the conference. We should like the Community to agree to the maximum extent it can in preparation, for the conference. Nevertheless, our claim has been made and it will be maintained.
Mr. Amery Mr. Amery rose—
Mr. Ennals: I say to the right hon. Gentleman, before he gets up and asks me, that it is no ploy. I was glad to have the support of my hon. Friend the Member for Hornchurch (Mr. Williams) in the position that has been taken.
Mr. Amery: Would it not have been more natural, as a member of the Community, to go to the Community and say, "Here is a special interest that we have."—just as the French had over agriculture—"This is how we would like the mandate to be devised, how we would like the delegation composed. Are you prepared to agree?" If the Community had said "No", there might have been some justification for seeking a separate seat or for making a compromise. But to start from the beginning by saying, "Our interest is so separate" seems a very un-communal approach.
Mr. Ennals: I think that the right hon. Gentleman has got it wrong. We indicated right from the beginning that we sought a seat at the conference and we
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hoped that there would be agreement on the mandate. We have to say that there is not yet agreement on the mandate. Therefore, that strengthens the position that my right hon. Friend has taken.
I want to proceed—
Mr. Maudling: If we do not get our separate seat, shall we boycott the conference?
Mr. Ennals: I must say to the right hon. Gentleman that if he will not answer any of my questions I am certainly not going to answer his.
In this debate we have sought to show the many fields in which we seek to cooperate with our European partners. The hon. Member for Inverness, when he referred to the historic visit of President Sadat—and I am glad that tributes have been paid not only to President Sadat but to the courageous rôle that he has played in a very difficult situation in the Middle East—said that he hoped that our relationship with Egypt and the other Arab countries would not be on a purely bilateral basis.
That, of course, is the purpose of the Euro-Arab dialogue. It is an imaginative development in relations between the member States of the European Community and the countries of the Arab world. The aim of the dialogue is to strengthen the existing links between the two groups of countries by means of discussions on a wide range of matters—economic, financial, technical and cultural. I believe that the work that has been done by the experts is an extremely good preparation for what I hope will be real progress in this field.
Perhaps I may also say that in the European context we very much hope to see early progress in the negotiations with the Mashraq countries, Egypt, Jordan, Lebanon and Syria, under the Community's overall Mediterranean approach. These negotiations are designed to lead to the conclusion of agreements which will also serve to strengthen the links between the Community and those countries.
The right hon. Member for Brighton, Pavilion referred to the danger of a breakdown in the delicate balance between the communities in the Lebanon. We have all been saddened by the tragedy and personal suffering which have come to the citizens of the Lebanon. I am glad

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to say that the situation at present appears to be more hopeful. Discussions have been taking place between the leaders of the various Lebanese communities and the National Dialogue Committee. We hope that these will be continued in an atmosphere of reconciliation and mutual understanding. Certainly, we shall remain in close contact with our partners in the Nine to see whether we can make any constructive contribution.
This has been a wide-ranging debate on the Middle East, and not just in economic terms. It has been concerned with the central political issues between Egypt and Israel. Points of view have been expressed that have been substantially in opposition from different sides of the House.
I repeat that the Government warmly welcome the agreement reached between Egypt and Israel. We look upon it as an important new step on the path towards a comprehensive settlement. But we say also—this was mentioned by the hon. Member for Westbury (Mr. Walters)—that the momentum of the negotiations must be maintained. The situation is still extremely tense. The Golan front between Syria and Israel is itself tense and is likely to remain so, at least until the end of this month when the mandate of the peacekeeping force on the Golan Heights is due for renewal. I shall be discussing those issues when in Damascus in a few days time.
It is not easy to see the way ahead. The Government have no doubt about the genuine intention of the United States Government to press ahead as rapidly as possible to try to bring about a settlement. The immediate aim is a new step on the Golan. But it will not be much longer. After this, in order to reduce tension and to ensure that the Sinai agreement was not the end but the beginning of a peacekeeping process, we must see progress on the broader issue of the Palestinians and the West Bank. This is, perhaps, the central issue and until it is resolved we cannot see that the solution to the problem will be found as a whole.
Again, we shall keep in touch with our partners in the Nine and, as my right hon. Friend said in introducing the debate, we are ready to play our part in international deliberations if it is the wish of the parties principally concerned.
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My hon. Friend the Member for Penistone referred to a speculation about arms sales following President Sadat's recent visit. In the course of the talks which my right hon. Friends the Prime Minister and the Secretary of State held with President Sadat, they discussed in general terms the question of arms supplies to Egypt and other Middle East countries. My right hon. Friend reiterated the Government's policy on this issue which has been stated on a number of occasions in the House.
I want to make only four brief points. First, we have ourselves, as have the United States, encouraged Egypt to diversify away from the Soviet Union. Secondly, we continue to keep in close contact with the United States on these questions of arms supplies to the Middle East. Thirdly, we do not, and will not, supply arms to the point at which it could damage the possibilities of a settlement. Fourthly, the President knows that if a request is made we should give serious consideration to assisting.
My hon. Friend the Member for Aberdeen, North (Mr. Hughes) and the right hon. Members for Chipping Barnet and for Brighton, Pavilion referred to Angola. We welcomed the Alvor agreement when it was signed in January between the Portuguese Government and the three Angolan liberation movements. This provided, as the House knows, for co-operative progress towards independence tomorrow on the basis of a transitional Government in which all three of the movements—MPLA, FLNA and Unita—would participate on an equal basis. There were to have been a new constitution and elections throughout the country.
None of these has happened. It all broke down. I suppose the latent antagonism between the movements destroyed the fragile framework of cooperation, and independence day will not be a time for celebration as it was in Mozambique less than a year ago. It will be a time when the country is faced with the tragedy of civil war.
We have little opportunity to bring an influence to bear upon the situation, although it is an issue that we have discussed closely with our partners in the Nine. We wish the OAU well in its attempts to bring the parties together on the eve of independence.

1061
In the present confusion it is too soon for us to take any decision on questions such as recognition. No party in Angola can now fulfil our criteria for recognition. We have not chosen to support one party as opposed to another and it is right that we should not do so.
I emphasise that the basic concern of ourselves and the rest of the Community is that the people of Angola should gain true independence, and have a chance to live in peace, to develop the potential of their very rich country, and we shall do all we can to help them.
I am sorry that I cannot comment on the points made by my hon. Friend concerning Rhodesia. We had a day's debate on this subject 10 days ago. But this Government will stand absolutely by the pledges that it made to the country in both our manifestos in relation to Rhodesia.
A final example of our co-operation with our European partners was at the Seventh Special Session of the United Nations, referred to in detail by my right hon. Friend and by the hon. Member for the City of London and Westminster, South, which was the best example of the way the Community, by working together, has been able to exert an influence on world decisions.
I welcome the speech by my hon. Friend the Member for Oxford (Mr. Luard) in which he spoke about the report of the committee of experts, of which he was a notable member, on the reform of the social and economic sector of the United Nations. I regret that it was not discussed in detail at the Seventh Special Session. We congratulate the authors of a very constructive report and it is now our concern that the proposals should not be buried but taken up and carefully considered.
The right hon. Member for Chipping Barnet spoke of the Spanish Sahara. We welcome the Moroccan Government's decision to respond to the Security Council's call to end the march into the Spanish Sahara. It was a courageous decision by King Hassan. We hope that it will lead to successful negotiations between Morocco and the other countries concerned. Hon. Members may already have seen reports that a Moroccan delegation is about to visit Madrid for further talks with the Spanish Government. We
1062
hope that they will produce success. For our part, we shall continue to give full support to steps taken by the Security Council to reach a fair and peaceful resolution of the dispute.
The right hon. Member for Chipping Barnet asked me to say a few words about the Falkland Islands. On 27th May I met three of the Falkland Island councillors in Rio de Janeiro. Among the matters to which they attached great importance in connection with the future of the islands was their declining economy and their dependence on the wool industry. They asked for the appointment of a far-reaching, economic and fiscal survey of the islands to explore diversification and the development of possible oil and krill industries and to advise on priorities for capital expenditure. We decided that that was a reasonable and valid request.
We therefore appointed a survey and we asked Lord Shackleton to take on the job as chairman. Most people would recognise that he was particularly suited for this rôle in the light of his previous ministerial experience, and certainly the decision was warmly welcomed in the Falkland Islands, not least because of his father's long association with the islands. I very much hope that the Argentines will not put difficulties in the way of the survey's transit through Argentina. It certainly presents no challenge to their interests. The hon. Member for Shoreham (Mr. Luce) asked whether I would give an assurance that Her Majesty's Government's position on sovereignty remains unchanged. I give that assurance to the House. Like him, I believe that we must aim to build bridges between the islands and the Argentine.
Mr. Callaghan: A long bridge.
Mr. Ennals: A long bridge, as my right hon. Friend says.
I should like to say a word about the dispute on fishing limits with Iceland. The Minister of State reported to the House on 29th October about the most recent round of talks, which took place in London on 23rd and 24th October. He reported that it had been agreed that scientific and technical discussions on the state of the fish stocks off Iceland should be held by British and Icelandic fishery experts as soon as possible and that a

1063
further meeting at ministerial level should take place in the light of these discussions.
Those talks between experts took place in Reykjavik last week and my right hon. Friend is planning to visit Reykjavik at the first opportunity to continue his negotiations with Icelandic ministers. We are determined, in so far as it lies within our power, to secure a satisfactory agreement with Iceland and to replace the one expiring on 13th November. It is a week for significant dates.
However, I must make it clear that until such time as a new agreement is reached the British fishing fleet has rights, which were established by the International Court of Justice, and no British fishing vessel will go unprotected where protection may be necessary.
A final word about Belize to which my right hon. Friend made reference a few days ago. Since we decided to increase the small garrison in Belize in the face of increasing Guatemalan military
1064
activity on the border with Belize, the Guatemalan Foreign Minister has publicly stated that Guatemala is seeking only a peaceful solution to the problem through negotiation. I very much welcome this statement—as I believe the House will—and look forward to an early resumption of negotiations as soon as current action in the United Nations is complete. The reinforcements will be withdrawn when there is no further need for them.
There have been some points that I have not dealt with, but my canter through has covered most of the principal points raised. The mood of the debate has reflected the widespread support for the main tenets of the foreign policy of the Labour Government. We are pursuing and will continue to pursue a positive foreign policy and—
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

BUSINESS OF THE HOUSE
Ordered,
That the Airports Authority Bill [Lords] may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Stoddart.]

ORDERS OF THE DAY

  AIRPORTS AUTHORITY BILL [Lords]
  Order for Second Reading read.
  10.1 p.m.
  The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): I beg to move, That the Bill be now read a Second time.
  This is a straightforward, uncomplicated consolidation measure. It consolidates the Airports Authority Act 1965, which, as the House will know, was the Act which established the British Airports Authority, together with nearly all the subsequent Acts which relate to the Authority.
  The Bill has been through the Joint Consolidation Committee, which has confirmed that it is a pure consolidation measure and that it accurately represents existing law.
  10.2 p.m.
  Mr. Tom King: We are grateful to the Minister for introducing the Bill, but we disagree with him in one respect. He said it was uncomplicated. To anybody who has studied it, it is immensely complicated. But we appreciate that it is a pure consolidation measure, and we have no objection to it.
  10.3 p.m.
  Mr. Ivan Lawrence: As a member of the Joint Consolidation Committee, I wish to observe that the Report which the Committee was ordered to make to the House contains this sentence:
  "The Committee regret that the term 'aerodrome', which is not in common use, is nevertheless perpetuated by inclusion in the Bill."
  This raises an important matter. Consolidation is not merely intended to bundle together a lot of legislation under
  1066
  a single Act. That is, of course, its most important function, but the opportunity should not be let pass to bring up to date out-of-date language. There is no doubt that the word "aerodrome" is out-dated and does not mean what we think it means. It does not mean what we mean by the use of the word "airport".
  I appreciate that there are difficulties in changing all the wording of the legislation deleting the word "aerodrome" and substituting the word "airport". But the least of the difficulties is the fact that the word "aerodrome" has a more restrictive meaning than the word "airport". Briefly, without going into the detailed definitions in the dictionaries, an airport involves much of the paraphernalia of an aerodrome, particularly that which is concerned with the embarkation and disembarkation of passengers. So there is the difficulty that an airport means something more than an aerodrome.
  Nevertheless, the Bill is called the Airports Authority Bill, not the Aerodromes Authority Bill. There is recent legislation, entitled the Policing of Airports Act 1974, and there is a reference in the Bill in Clause 10—at any rate, in the rubric—to airport police. It is clear that if the argument were that we should never alter "aerodrome" to mean "airport" in any context, those references would be to "aerodrome" and not to "airport". So even the draftsmen of the recent legislation recognises that there is a sense in which "airport" should be used in legislation of this kind. The word "airport" does not appear in the definition clause—Clause 23—but "aerodrome" does.
  I am well aware that it is difficult, if not impossible, to make amendments of this sort at this stage in the House of Commons. I am not sure that the House of Commons has the power to make amendments in any case in consolidation legislation and it would have to be referred to the House of Lords. I am equally well aware that we do not have time to do it and that if it involved many consequential changes that might not be justified.
  I have therefore risen to my feet to sound the note of warning that, if it is important to ensure that history does not perpetuate words that are no longer used, or that no longer have their original

  1067
  meanings, the time must come when somebody says, "Let us not use the word 'aerodrome'. Let us use the word 'airport'. Let us define it in the legislation and let us deal with it in that way." Perhaps at some stage in the not too distant future somebody will find a means whereby "aerodrome" can be replaced by "airport" as defined in the Bill referring to all other consequential legislation where it is not important to have legal changes as a result of changing the terminology.
  Although I, of course, am not a parliamentary draftsman and I am not sure how this could be achieved, it cannot be beyond the wit of man to bring the usage of words from time to time up to the common, everyday popular meaning without having to change all the legislation which has gone before.
  I hope that the Minister will bear in mind the fact that the Committee said more than he said it said and that it particularly regretted that "aerodrome" is nevertheless perpetuated by inclusion in the Bill. I also ask him to invite those who advise him in these matters to apply their minds to ensuring that in future legislation of this nature makes use of more modern language.
  10.7 p.m.
  Dr. Alan Glyn: I wish to be brief. I appreciate that this is a consolidation measure and that there is very little which we can do about it. It refers to a large number of Acts and, as the Minister has rightly said, it merely consolidates them.
  I am rising on a simple point concerning Clause 10. A number of my constituents are affected by the policing—
  Mr. Deputy Speaker (Mr. George Thomas): I hope that the hon. Gentleman is not going to proceed to discuss the merits of the clause. He is not in order in doing so.
  Dr. Glyn: No. I was only regretting that, as my hon. Friend the Member for Burton (Mr. Lawrence) said, we cannot alter the measure in any way, because, particularly in one clause, it would have been beneficial if we could have altered some of the terms of service which have given rise to a great deal of argument and trouble, as the Minister knows, to a
  1068
  number of people who have been affected by previous Acts. All that this Act does is to consolidate those Acts.
  Mr. Deputy Speaker: I was very kind to the hon. Gentleman.
  10.9 p.m.
  Mr. Edward Lyons: I am the only member of the Joint Committee on the Consolidation of Statute Law on this side of the House at the moment. That is a very valuable Committee, but it is not always the most exciting. The argument about "aerodrome" and "airport" is about the most stimulating thing that has happened in that Committee for years. We get lost in that Committee, and I do not know whether hon. Members realise what a valuable function we perform in looking at the differences between two concepts such as the old, English "aerodrome" and the new, American "airport".
  Mr. Lawrence: The hon. and learned Gentleman has omitted to mention the occasion when the Commons defeated the Lords during the last Session on a measure in the Consolidation Committee.
  Mr. Lyons: I shall not remind the House on what trivial matter that took place. None the less, there is something to be said for copying the American innovation of "airport", because it is so functional. When we use words such as "aerodrome" the parliamentary draftsman says, "We used 'aerodrome' in the last Bill, so why bother to change it in this one?", and it becomes self-perpetuating. We need more flexibility in the drafting of our statute law; therefore I echo—perhaps for the only time in my life—the hon. Gentleman's sentiments.
  10.11 p.m.
  Mr. Arthur Davidson: How right the hon. Member for Bridgwater (Mr. King) was when he said that my words "This is an uncomplicated Bill" were a little optimistic. However, it is an uncomplicated Consolidation Bill, so uncomplicated that not one word has been changed, including "aerodrome". As the hon. Member for Burton (Mr. Lawrence) will know, the word "aerodrome" appeared in the original Airports Authority Act and has been perpetuated in all subsequent Acts that have been consolidated with it.

  1069
  Had "aerodrome" been changed to "airport", no doubt even more hon. Members would have risen to complain that it was not strictly a consolidation measure. However, I will ensure that the hon. Gentleman's remarks, which I do take seriously, are passed on to my right hon. and noble Friend the Lord Chancellor, and I am sure that the Law Commission and the draftsmen will be interested in them.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole house.—[Mr. Stoddart.]
  Bill immediately considered in Committee.
  [Mr. GEORGE THOMAS in the Chair]
  The Chairman: As this is a consolidation Bill, I propose to follow the usual practice by putting the Question on clauses and schedules in groups. I shall be grateful to any hon. Member who has a point to raise if I am able to collect his voice before I put the Question.
  Clauses 1 to 16 ordered to stand part of the Bill.
  Clauses 17 to 26 ordered to stand part of the Bill.
  Schedules 1 to 6 agreed to.
  Bill reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

POST OFFICE (LIMITATION OF PRICES)
10.13 p.m.
The Minister of State, Department of Industry (Mr. Gregor Mackenzie): I beg to move,
That the Compensation for Limitation of Prices (Post Office) Order 1975, a draft of which was laid before this House on 27th October, be approved.
This Order provides for the payment by my right hon. Friend the Secretary
1070
of State for Industry of the sum of £307,017,000 to the Post Office in respect of financial losses which its businesses have incurred in the financial year 1974–75 in consequence of its compliance with the national policy relating to limitation of prices. Section 1(1) of the Statutory Corporations (Financial Provisions) Act 1975, read with subsections (3) and (7) to (10) of that section and Schedule 1 to the Act, enables my right hon. Friend to make such an Order.
The sum to be paid corresponds to the aggregated deficits incurred by the Postal, Telecommunications, Giro and Remittance Service businesses on their revenue accounts for the financial year 1974–75, this being the limit imposed on compensation payments by Section 1(3) of the Act. For the purpose of assessing compensation to the Post Office, its postal services, telecommunications services, banking Giro and related services and data processing services have been treated as if they were separate undertakings.
The total sum of £307 million represents the deficits shown in three of the businesses, revenue accounts for 1974–75, which were laid before Parliament in accordance with Sections 11(10) and 42(3) of the Post Office Act 1969. The figures were £195 million for telecommunications business, £109 million for the postal business, and just over £3 million for the Giro and remittance services taken together. The House will recall that the Giro service itself achieved a modest profit, as did the Post Office data processing service. In compliance with subsections (7) and (8) of Section 1 of the Statutory Corporations (Financial Provision) Act 1975, the approval of the Treasury has been obtained to the draft Order, and the Post Office has been consulted in the normal way.
I am sorry to burden the House with this detailed explanation, but I thought it wise to spell out the statutory backing. I remind the House that the 1975 Act continues legislation introduced by the previous administration.
Last year, in the parallel debate, Conservative Members spoke critically about the inclusion of the whole of the deficit in the compensation payment. Other hon. Members have suggested, to the contrary, that compensation should be based on revenue forgone. I remind the

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House that the deficit over the two years 1973–74 and 1974–75, taken together, was of the order of £440 million—a quite intolerably large sum—and I blame this, as hon. Gentlemen know, on the policies of hon. Members opposite when they were in power. We could not undo overnight what I regard as their folly in departing from a rational pricing structure, but we have done so as quickly as was reasonably possible and have, to our deep regret, necessarily had to cause hardship through increased prices and loss of employment in the supply industry and, indeed, in the Post Office along the way. I hope that hon. Members opposite will acknowledge that the deficit is die consequence of their policies. Therefore, compensation is in every way proper.
Those of my hon. Friends who have suggested that compensation should be based on revenue forgone have a better case. It is important that the self-financing ratio of the Post Office, and of other nationalised industries, be improved. For this reason, we are seeking to ensure now, and should have liked to be able to do so earlier, that the Post Office earns a modest profit. But, whatever its merits, this is not die basis on which compensation is to be calculated under the Act.
Last year a number of hon. Members, including the hon. Member for Tonbridge and Mailing (Mr. Stanley), expressed reservations about the qualifications which the Post Office's auditors had felt professionally obliged to enter into their report. This year these are less severe and, in particular, agreement has been reached on the introduction of new procedures for assessing values and depreciation of telephones and ducting and on a programme for the similar assessment of other fixed assets. This is a major exercise and will take some years to complete: it will not be inexpensive. Since the Post Office is, at considerable expense and inconvenience, making it its duty to satisfy its auditors in this field, and since the auditors are among the most distinguished firms of accountants in the United Kingdom, I should regard any aspersion on the financial integrity of either as much to be deplored.
I am very conscious of the unprecedented size of the deficit for 1974–75 and therefore of the sum to be provided for
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as compensation under the Order. The facts are that, although early action was taken after we came into office, it was not until 1974, June for posts and August for telecommunications, that increases in the tariffs could be implemented because of the preliminary procedures required by legislation—both the Price Code and the Post Office Act. The further increase which we had always recognised as necessary could not, for similar reasons, take effect until 17th March 1975 for posts and the end of March for telecommunications. Hence they had virtually no impact on the receipts for the year in question. It is not a matter for any surprise that with costs steadily rising, and tariffs able to be raised only modestly, there was an unprecedented deficit.
On the postal side, throughout the year the Post Office waged a sustained campaign to halt and then to reverse the deterioration in the standard of service caused mainly by acute staff shortages in certain key areas. A vigorous recruitment campaign, coupled with improvements in pay, enabled the Post Office to recruit and train more than 21,000 new staff for postal and counter work, and to reduce the number of postman vacancies from 9,500 to 5,500. By the end of the year some improvement in the quality of the letter service was already becoming apparent, and this trend has, happily, since continued. The total volume of letters posted was a little lower than in the previous year but parcel tariff increased by 3 per cent.
On all sides of the telecommunications business—finance apart—there was much progress. A total of 1·35 million telephone connections were added to the system, which grew to nearly 13 million. Local calls increased by 6·4 per cent. to 13,523 million, trunk calls by 8·2 per cent. to 2,313 million, and international calls by 19 per cent. to 73 million.
At the end of the year 99·5 per cent. of subscribers had STD facilities. Continued productivity improvements resulted in savings, equivalent to nearly 5,000 engineering, clerical and executive jobs.
The increase of the loss on this business from £61 million to £195 million was, of course, of great concern. But, as I have explained, costs increased inexorably. There were very proper reasons for the increase in wages, and the only tariff increase was that of 14 per cent. in the summer.

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Hon. Members will know from my reply to the hon. Member for Bridgwater (Mr. King) that, in implementing the Government's policy for phased return to economic pricing, the Corporation expects to record a modest profit for 1975–76. Unfortunately the road back to financial viability is proving slower for the postal business. Hence, I expect that there will be a need to seek the approval of the House to a compensation Order next year.
But the postal deficit for 1975–76 is likely to be far less than for 1974–75. Some may argue that the postal business would have done rather better with a smaller increase in tariffs. Present evidence is that for the month of October—immediately after the last increase and therefore unrepresentative—total postings were down by 13 per cent. on the comparable figure for October 1974. The Post Office is always concerned to lose traffic from whatever cause. But its goal must be a return to financial viability.
As for telecommunications, it is still less credible that in such a developing and technologically based service there would be a long-term decline in demand. The Post Office has been assuming a 0·5 per cent. growth in trunk calls and a 2 per cent. growth in local calls this year, but that over a longer period the rate of growth would be restored to something of the order of 8 per cent. per annum or even higher. Clearly it is far too soon to estimate the accuracy of these figures, but I have little doubt that the telecommunications business will not be substantially diverted from its steady progress by the higher level of charges.
As I have already mentioned in the House, the aim of the Government's economic pricing policies is to ensure that the consumer pays for the true costs of the goods and services he consumes in every case where they can be sensibly identified and that these costs should include an appropriate return on public capital invested in the industries. As I said earlier, it was the former administration's departure from these policies which put Post Office tariffs at an uneconomic level in the years 1971 to 1974 and created the substance of the problem we are dealing with today.
The Post Office, like other nationalised industries, had to catch up. In order to
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maintain efficient services, the full economic cost of providing these services must either be borne by the users of those services or, in the absence of an economic pricing policy, the taxpayer must pay. It is the Government's view that the user should pay, though this must be consistently with the Post Office's social obligations. I would have hoped that Conservative Members would have welcomed the implementation of this policy which is designed to cut the level of public expenditure.
I cannot help but look across to the benches opposite and realise that the hon. Member for Tonbridge and Mailing will have come here, amongst other things, to ask me about the deficiencies in the pension fund of the Post Office. Deficiency contributions in respect of pensions have been expressly included in Post Office expenditure in every year since 1961–62. These payments are one crucial and inescapable cost of running a business and, since the Post Office is required by law to break even, taking one year with another, if not met out of revenue, can be met only out of compensation or allowed subsidy.
We believe that it is right to follow up policies of economic pricing, which means that the Post Office should, in principle, accept a deficiency as a proper charge. But, as hon. Members on both sides of the House are well aware, it is being contended that the particular element of a deficiency arising from the 1969 settlement warrants special treatment, but, as I told the hon. Member for Bridgwater in an answer the other day, my right hon. Friend the Secretary of State is still considering this contention, and an announcement will be made in due course.
This brief debate is on the Order. We have had fuller debates rather earlier this year, and I do not want to weary the House or to tempt you, Mr. Speaker, into calling me to order by straying too far from what is a rather restricted subject. With permission, I will speak briefly at the close of this debate if points are raised.
I expect that several hon. Members will ask me about the progress in setting up the independent review of the Post Office which my hon. Friend the Minister of State in the Department of Prices and Consumer Protection promised following the Post Office Users' National Council's

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report on the tariff increase implemented at the end of September. Unfortunately, I cannot make an announcement tonight, but I hope that an announcement will be made about the chairman and the terms of reference soon.
Mr. Tom King: I say to the Minister—and he will not be surprised to hear me say this—that we have the gravest doubts about this Order. Our concern is whether this Order is even valid, and it is a particular disappointment to us as I understand that the Statutory Instruments Committee was due to consider this matter this afternoon but due to the lack of a quorum it was unable to do so. The comments of the Statutory Instruments Committee would have been extremely useful, because, as the Minister will know, the point that concerns us is that the Statutory Corporations (Financial Provisions) Act is solely concerned with the consequences of compliance with the policy on the limitation of prices. This brief Order includes the claim that that is what the figure of £307,017,000 is all about. Those who were present at the debate on the previous Order on 2nd December 1974 will know that the Opposition were concerned about this matter.
There is a deadly coincidence of the sums of money. The postal deficit was £109 million. What is the consequence of compliance with the prices policy? It is £109 million. The loss on telecommunications was £194,550,000. What compensation is the Post Office receiving? It is £194,550,000—the identical sum.
The Minister tried to establish—this was part of the argument in the previous debate—the total blame and reason for these deficits. Today he put the blame squarely on the pay restraint policies of the previous administration. But he changed his tune half-way through his speech and said that only part of the problem was the previous policy of price restraint. That is closer to the reason. However, that does not go as far as the Price Commission whose Report stated that the rapid escalation of costs in recent months was responsible for the deficits. The recent Price Commission's Report conflicts with the Minister's statement. I tried to put down a Question to the Minister on this point but the Table Office, ever protective of Ministers,
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said that the matter was too contentious for a parliamentary Question. I meant to confront the Minister with the totally contradictory view of the Price Commission.
What has been the real effect of price restraint? What are the amounts? I do not believe that any Member of Parliament believes this Order or the figures. As a matter of convenience someone took the deficits and said "That is the compensation".
We are dealing with large sums of money in this Order. It is important for the Post Office and Parliament that we should not fudge or bodge up the figures. Nor should we say "We have a convenient Act. Let us lose the figures in that. We shall tidy it up." That is highly undesirable. Yet it appears that we shall do the same again.
The Minister referred to the Written Answer to my Question on 7th November on the probable outcome of the Post Office performance in 1975–76. I asked the Minister:
"what is the latest advice he has received of the estimated Post Office deficit for 1975–76."
I was delighted to learn that it was hoped that there would not be a deficit, and that the Minister was looking for a modest surplus from the Post Office. He is a brave man, especially in the light of some of the figures he gave about the loss of traffic in the first month following the latest price increase.
That is the Minister's position. Some of us remember sadly the speed with which ironically the same deficit figure of £70 million turned within six weeks into £300 million for this year. We must all pray that that does not happen again.
We are as worried as the Minister must be. It is too soon to know what will be the impact of the latest tariff increases. I said "Here we go again for 1975–76," because the Minister answered:
"the Post Office Corporation as a whole will record a modest surplus for 1975–76. But it is likely that compensation for price restraint will be needed in respect of the postal business. This is expected to be within the figure of £70 million referred to by the Chief Secretary to the Treasury of 9th June."—[Official Report, 7th November 1975: Vol. 899, c. 372.]
The Minister spoke of "compensation for price restraint". What price restraint

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has there been in 1975–76? It will come as a shock to the public, who realise that in the past year the postal tariff has risen from 4½p to 8½p, that telephone charges have doubled, trebled and in some cases quadrupled in the past year, that this is a demonstration of price restraint in action.
Perhaps the Minister will explain just what the price restraint has been. I thought that we were operating under the discipline of the Chancellor of the Exchequer who wished to move away from deficit financing. Has there been price restraint in 1975–76? If there has not—and I am not aware that there has, because the latest price request from the Post Office was virtually passed in full by the Government—how can the Minister turn round next year and bring forward a further Order, which he warned us in his speech he would do?
On this occasion the Act is being used improperly, and it is a serious matter. I am not attacking the Post Office. It is not a party political attack. It is in the interests of the Post Office that these matters should be put clearly in the open. It is also our duty as Members of Parliament, if Parliament is to be seen to be doing the job of guardian of the nation's finances, not to be seen as fudging an issue such as this. We should stand up and say "Yes, there is an element that is caused by national policy on price restraint. That is a certain sum as near as can be defined, but there are other elements that have contributed to this".
The Post Office has not pretended that it is due to price restraint. Therefore, it is all the more regrettable that the Government have dodged behind the legislation. The official and helpful Press release from the Post Office on this matter mentions the reasons for the price increase in July. It says that the finances and estimates of the Post Office had drifted from its original predictions largely as a result of the ever-rising rate of inflation and a decline in business. That is the honest answer. We all know that that is what happened. There has been a drop in traffic, with the downturn in the economy, and the rate of inflation has increased.
When the Post Office announced its budget in January it said quite bluntly
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that it had estimated on a rate of inflation of 20 per cent. The effect of a rate of inflation of over 25 per cent. had a serious effect on the Post Office's finances, as the Chairman of the Post Office said. On the figures given by the Post Office, I estimate that that 5 per cent. error in the forecast of the rate of inflation cost it £44 million alone. The Minister might like to confirm whether that is right. At that time the Minister said that the Post Office relied on a narrower definition of the social contract than actually proved to be the case. That was euphemism carried to a high degree.
Today I received an Answer to a Question which I had tabled to the Minister. I appreciate that he ensured its availability for today's debate. I asked him whether he would illustrate his conclusion that
"the substance of the problem of Post Office deficits was caused by uneconomic tariffs in the years 1971 to 1974."
Although the Answer was, helpfully, prepared quickly, I find it difficult to understand but the Answer appears to indicate that the shortfall caused by the price restraint was nothing like the deficits that are being estimated. At the end the Minister made the helpful statement:
"The statements also show that the actual deficits have generally exceeded the amount of the shortfall as described above. This is mainly because inflation proved greater than could be allowed for in the price increases."
Therefore, out of the Minister's own typewriter has come the contradiction of the very Order that he has advanced.
There is also the question of the pension fund deficit, to which the Minister fairly referred. This is a matter of serious concern to the Board of the Post Office and to the unions. The UPW has made representations about it. We have been given the figure of £90 million as the sum needed last year, and. I understand, this year, to meet the deficit on the pension fund.
What worries me about the whole situation is that we are fogging the Post Office finances, by hiding the deficits and putting through deficits against orders which are not really applicable, and muddling in matters such as the pension fund. I have some sympathy with the reasons behind the statement given in a further answer to my Questions. Incidentally, I am most grateful for the energy

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shown by the Department in answering those Questions. I asked what guidance the Minister had given the Post Office on the treatment of the pension fund deficit in future years in its forward financial planning, and I was told that
"The Post Office's financial planning necessarily includes alternative provision for a wide range of contingencies."
My God! I bet it does. That is the wisest thing I have ever heard come out of the Post Office. With the sort of erratic treatment it receives in these respects, the Post Office is wise to plan for the widest range of contingencies possible.
This is a serious matter. We have had the difficulty of the confusion of the figures and of knowing what the future treatment of the pension fund deficit will be, although we know that the Post Office has to stand it for this year, there is no mention of that here, as it has nothing to do with compensation for price control.
There is also the whole question of depreciation, which was well brought out in an interesting article in the Economist, pointing out that the Post Office was taking a progressive view of depreciation and that, unlike many companies which still worked on historic cost depreciation it was working on replacement cost. The article said that in its present depreciation of £388 million a year the effect of operating on replacement cost was £130 million added to the cost that might be shown by many other businesses in their normal accounts.
We are used to talking fairly casually about millions of pounds in this Chamber, but by any standards depreciation of £388 million is an enormous sum for any business, and one is very concerned at the continuing qualification of the accounts by auditors. The Minister rightly picking up the point made in last year's debate, said that there had been substantial improvements, and that arrangements had been made to try to resolve the matter by 1977.
Satisfactory procedures have been agreed for £1,621 million-worth of fixed assets. That is a substantial sum, which one might think must cover most of the possibilities—but only if one were unaware of the huge scale of the undertaking. The fact is that the procedures
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for auditing and establishing in the accounts £3,122 million-worth of fixed assets have been qualified by the auditors, who say that at present no satisfactory procedures exist for that vast amount of assets.
If there are no adequate procedures to record the assets, how can one be confident that the depreciation figures are correct? As the Minister fairly said, the accountants are very distinguished—two of the leading firms of British accountants. No doubt hon. Members have read their qualification of £3,000 million-worth of the Post Office's assets, saying that the procedures for recording them are unsatisfactory. The significance of that to the present matter before the House is that it puts a question mark over the substantial depreciation provisions.
All of that underlines our concern about the Order, which raises in a simple sentence all the problems of the Post Office finances and tries to tie them all up as though they were merely the consequence of price restraint. That is neat and tidy, but false. Any hon. Member who is familiar with such sums will know that this is not right. It is against this background that we have a duty to not only the country, but to the Post Office, to insist that we get the matter right. I hope that the Minister will give us a much clearer idea of what will be the figure attributable to price restraint and of the other factors involved, because the Post Office faces some very real problems.
The Minister has indicated that the first month of the new increases has shown a 13 per cent. drop in postal traffic compared with the equivalent month last year. Over a year 13 per cent. amounts to 1,300 million letters. Hon. Members who have knowledge of the Post Office will know what that will mean in terms of employment and finances. It is an extremely serious situation. We drew attention to this matter in the debate which took place in July. We feared that the effect of the tariffs would be a decline in traffic which would have serious consequences for the Post Office and for the people employed in it. Moreover, it would affect the service which the Post Office would be able to give to the public. We have also been told that there has been a further switch to

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second class mail, but that was predictable.
It is against that background that one must be extremely concerned about the validity of, and the confidence with which one can view, the Minister's forecast of the deficit for 1975–76.
My hon. Friends and I take no pleasure in this deteriorating situation, because it should be a matter of great concern to all hon. Members. Therefore, we welcome the Minister's decision to appoint an independent review. However, I am disappointed that he is unable to announce the names of its members and its terms tonight. I am sure that he recognises the urgency of the situation, because in any circumstances a review is a difficult matter. However, it is unforgivable to announce a review and then not to get on with it. If we are to have a review, we have a duty to the Post Office to get on with it as quickly as possible.
In the light of the way in which the Order has been presented and the lack of information about it, I hope that the Minister will tell us more about what we regard as a most unsatisfactory Order.
10.48 p.m.
Mr. John Golding: I declare my interest as an Assistant Secretary of the Post Office Engineering Union. As the Minister rightly acknowledged, Labour Members are concerned about the hardships being faced by the Post Office staff—workers in the private equipment manufacturing concerns—and by the consumers—hardships caused by the business recession and by the belated return to economic pricing. We must however—and I shall speak only about telecommunications, because I and other hon. Members are engaged on an inquiry by a Select Committee into the postal services—be careful to keep the picture in perspective.
Sir William Ryland was right. In an article in the AEUW Journal this week on the problems facing the Post Office, summed up by him as "How to make ends meet", he stressed that:
"The future of telecommunications is strong. Growth, new and exciting services, and new technologies will ensure better and more varied services at fair prices, giving good value for money."
The potential here is very great indeed. However, we must be careful in our policies not to destroy that potential.
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Therefore, those who call for further Post Office economies, whether they be manufacturers of equipment, representatives of the Users' National Council or Ministers, must appreciate the extent of the stringent measures already taken and the fact that future growth and modernisation depend on the maintenance of staff morale.
Already the Post Office staff is facing premature retirements, redeployment, a ban on adult recruitment and reductions in earnings.
As a result of these economies, 8,000 jobs will be lost in Post Office telecommunications alone. Manpower economies within the telecommunications service have been all the more difficult to find because of substantial and sustained voluntary improvements in the use of manpower during the last decade which have increased labour productivity by 6 per cent. a year and saved 78,000 jobs. That was the result of voluntary improvements and consequent increases in productivity during the last decade before the present stringent economy measures were introduced. The union's view is that any further economies could produce a collapse in staff morale which would be detrimental to the recovery and future of telecommunications. There should be no resort to further economies, nor a return to compensation payments.
I listened with interest to the speech made by the hon. Member for Bridgwater (Mr. King). I recall that he strongly supported Ministers who first introduced the principle of compensation payments. I also recall that in Opposition we made similar speeches. It is inevitable that in Opposition we make such speeches because the principle of compensation payments is virtually indefensible.
It is impossible to calculate what the income of the Post Office would have been but for price restraint. Therefore, the whole system is a nonsense. But the system was introduced when the hon. Member for Bridgwater was assisting the Minister for Posts and Telecommunications. Perhaps that gives him great expertise to exploit the inconsistencies of the system. However, we should not take him too seriously.
Mr. Tom King: This matter came up recently when I believe my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) pointed out that we

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introduced income tax at 5 per cent. But that did not mean that we could not attack it when it got to 98 per cent. There is a slight difference between the levels of payments.
Mr. Golding: The hon. Gentleman was addressing himself to the principle of calculation, not to the level of payments. I have attended debates on this subject many times since the early 1970s. The principle was introduced by the last Conservative Prime Minister only as a sop to the CBI.
It would be a simple solution for the Government to provide larger subsidies so that telecommunications tariffs could be reduced or at least pegged. Alternatively, they could spend even more public money, cither directly or indirectly, purchasing telecommunications equipment which was not wanted. The Government could do these things, but I hope they will not. I argued the case against subsidies at the Labour Party conference. I am pleased to inform my hon. Friend that that conference endorsed its 1973 policy decision against indiscriminate blanket subsidies for the nationalised industries. With some exceptions, notably the railways and the mines, it is more important to spend taxpayers' money on pensions, hospitals, schools, housing, single-parent families and welfare generally than on nationalised industry subsidies—particularly for the telephones of businesses and other large private subscribers.
So far I have been negative in opposing those who want a return to the policies of the past, but what can be done in the future? The Government ought to meet their moral obligations and make a contribution to the Post Office's superannuation fund in respect of the £90 million a year shortfall which relates to commitments incurred before the Post Office became a public corporation. This would ease its finances considerably. However, there must be no question but that the pensions of Post Office staff are paid, despite any dispute between the Treasury, together with the Minister responsible for posts and telecommunications, on the one hand, and the Post Office and its unions, on the other hand.
The Government should take part or all of the private manufacturing industry into
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public ownership. The quicker we learn the facts surrounding the purchase of cable, the better. Since 1960, I have often accused equipment manufacturers of failing the Post Office and the nation with high prices, unreliable delivery dates and a loss of export opportunities, although judging by figures supplied by my hon. Friends earlier today, it seems that their export performance has improved in the past 18 months.
The Post Office has been taken to task by the Telephone Users' Association for the non-provision of a service in a case where it is quite clear from the Users' own report that the delay has been caused by late delivery from the private manufacturer. This is a story which is repeated all too often. The time is now ripe for the Post Office to undertake large-scale manufacturing itself.
Both the Post Office and private manufacturers should speed up the development of electronic systems to replace the out-of-date equipment which should be phased out here as soon as possible. It cannot be sold abroad. The Post Office should also pay far more attention to marketing and, if Governments will refrain from intervening, to forecasting as well.
The Government should settle a national telecommunications development plan and let the Post Office get on with the job of implementing it. The Post Office will be well run only if it is allowed to be run from the inside by a staff and management who are determined to provide the best possible service at fair prices. This cannot be done by Post Office inquiries, which must be the biggest growth industry in the country, or if management does not have control over pricing and investment.
The problems facing the Post Office are considerable, but they will be solved given the necessary determination. The potential of Post Office telecommunications is great. I am glad that the Minister has confirmed that there has been no absolute decline in the number of telephone calls being made and that the Post Office is confident that a growth rate will soon be re-established.
The potential is considerable, and for the good of the Government and the nation, it must be realised to the full.
11.0 p.m.
Mr. John Stanley: We are engaged in the operation of what I might call the parliamentary Parkinson's law, whereby the larger the sum of money under discussion, the later at night it is debated, the fewer Members are in the Chamber and the shorter the time available for debate. Tonight is no exception. We are disposing of the horrifying sum of £307 million of taxpayers' money in precisely 90 minutes—or at the rate of just over £3 million a minute.
I shall speak very briefly. I should like to pose three questions about the Statutory Instrument. I should like to know whether the deficit should be as much as £307 million, whether it is reasonable to attribute the whole of that deficit to a policy of statutory prices restraint, and whether the deficit itself can be related to the normal trading activities of the Post Office.
First, then, the deficit itself and whether it should be as much as £307 million: the Minister of State endeavoured to put the responsibility for this enormous deficit on to the Conservative Government, but I remind him that we are talking about a financial year which was covered wholly by the period during which the Labour Government's policies were being put into operation. My view is that the main cause of this enormous increase in deficit in the financial year 1974–5 lay very much less with the price restraint policy than with the enormous increase in the national rate of inflation, which knocked the Post Office's finances sideways.
Why was it, at a time of enormous national inflation, when businesses both in the public and private sector were coming under great pressure on profit margins, that it was not until the last dying weeks of the financial year 1974–5 that the Post Office was able to get the benefit of increased tariffs? It is a striking fact that a period of 18 months elapsed between the previous tariff increases, made available under phase 2 of the last Government's counter-inflation policy, and the coming into operation of the first tariff increase under the present Labour administration which began to operate only on 17th March, 1975. Yet it was in March 1974—a year earlier—that the Chancellor of the Exchequer
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announced in his Budget that the Government were moving over to a policy of eliminating subsidies in the nationalised industries. It was quite apparent to the nationalised industries that inflation was accelerating. Surely it would have been a logical response for the Post Office to come forward with tariff increases at some time in mid-1974 rather than in January 1975.
The Minister of State suggested that what was inhibiting them was the Price Code. Has he forgotten that the Price Code was amended by his own Government? There was no barrier to the Government's amending the Price Code to enable the Post Office to obtain the increases in tariffs which were necessary.
We should be grateful for his explanation why it was that it was January 1975 before the Post Office, it is claimed, was ready and willing to lodge its first application for an increase in tariffs. It is my very firm view that in fact the Post Office was ready and willing to lodge an application for increases in tariffs in the summer of 1974 but was deterred from doing so by the Secretary of State for Industry because of the proximity of the election in October that year.
My second question was whether the deficit could have been eliminated if there had been complete price freedom. I raise it because, according to the Order, the sole justification given for claiming £307 million of the taxayers' money is that the Post Office complied
"with the national policy relating to limitation of prices."
In other words, the Government are telling Parliament that if there had been no national policy of limiting prices, there would have been no deficit in the Post Office for 1974–75.
I have grave doubts about that supposition. I believe that even if the Post Office had had total price freedom in the last financial year, it would still have had a serious deficit, and that the evidence for that lies in what we have seen in the current financial year.
In March and September 1975, two of the largest ever increases in Post Office tariffs took place, yet, despite them, with the Post Office having had the benefit of those increases for almost the whole of this current financial year—certainly in the case of the first increase—we are told

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that there is still likely to be a new Order for compensation for price restrain, which means a fresh deficit in 1975–76.
In other words, the indications are that the postal service, at any rate, is suffering seriously under the law of diminishing returns and has become fundamentally uneconomic, and may be in a permanent loss-making situation. I hope that this is not the case, but it appears to be so from the evidence of the last 18 months. Price increases put forward are not, so far, succeeding in getting the postal service out of the red.
If that is so, I share the doubts expressed by my hon. Friend the Member for Bridgwater (Mr. King) whether it is reasonable and justifiable to use this system of Orders under the Statutory Corporations (Financial Provisions) Acts to reclaim fundamental underlying deficits in any nationalised industry. The Minister fairly pointed out that the first Act was passed by the Conservative Government at the beginning of 1974—but that was followed by a similar Act, involving even higher sums, passed by the present Government. It was the clear intention of the Conservative Government that this device was to be used solely for making up genuine trading losses of nationalised industries which were suffering under the policy of statutory price restraint.
I do not believe that it was the policy of the Conservative Government or the policy of this Government that such a device should be used to wipe off fundamental losses in individual parts of a nationalised industry which may have moved permanently into the red.
There are serious parliamentary implication if we continue to go down this path. We are providing a cash grant of taxpayers' revenue to meet underlying losses, and we are doing so in a way that gives only minimum parliamentary control. More important, by resorting to this method, we are removing from nationalised industries any obligation to increase their borrowing requirements in order to finance deficits. This is a means whereby significant parliamentary controls can be evaded. I hope that we shall not go on using the Statutory Corporations (Financial Provisions) Act simply to eliminate recurring deficits of individual nationalised industries.
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My last question was whether the deficit actually related to the normal trading transactions within the Post Office. A significant element of the deficit does not. Over one-third of the £307 million is required to meet the deficit in the Post Office pension fund. The sum of £107 million is simply charged to the profit and loss account to meet the deficit in the pension fund. That should have been clearly stated on the statutory instrument. There is no doubt that trading losses are one thing, but extraordinary provisions to meet a deficit in pension funds are separate. I do not want to continue the slightly acrimonious exchanges that we have had in previous debates about the question of liability for the deficit in the pension fund because it has been clearly stated what the balance of the deficit is between the pre-Corporation liabilities and the post-Corporation liabilities. In its memorandum of 9th July the Post Office said:
"If the pre-Corporation liability had been properly funded the deficiency would have been only £300 million."
In other words, of the actuarial deficit in the pension fund on 30th September 1972, roughly £300 million relates to post-Corporation liabilities and £800 million to pre-Corporation liabilities. It has to be pointed out that responsibility for the £800 million of pre-Corporation liabilities arises solely and wholly out of the way the pension fund was originally set up under the 1969 Post Office Act. I believe it is incumbent on the Government to set up a formal Government inquiry into this deficit. The very size of the deficit justifies a full and proper inquiry.
We are talking about a deficit of £800 million arising out of a piece of legislation. What is quite evident is that a miscalculation of enormous dimensions was made in respect of the funding of the Post Office's pension liabilities.
It seems imperative to have some form of formal scrutiny to make sure that politicians learn from their mistakes. I am far from happy about this Order. The deficit should never have been as much as £307 million. It does not relate to the normal trading activities of the Post Office. Pension fund liabilities should have been separately identified.
I am disturbed to hear the Minister say that he expects to bring forward next year—covering the financial year

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1975–76—yet another Statutory Instrument calling for more compensation for statutory prices restraint. This seems to be completely in contradiction to the remarks the Chief-Secretary made in the debate on the Statutory Corporations (Financial Provisions) Bill on 9th June, when he said:
"The Chancellor said in his Budget Statement that these price restraint subsidies were likely to have been phased out completely by April 1976. It remains our firm intention to keep to this timetable so that subsidies in 1976–77 will not be necessary."—[Official Report, 9th June, 1975; Vol. 893, c. 48.]
I would have hoped that in the current year it would be possible to phase out these deficit subsidies. I hope that the Minister will assure us that his Department is doing everything possible to staunch this liability on the taxpayer.
11.15 p.m.
Mr. Ian Wrigglesworth: The hon. Member for Tonbridge and Mailing (Mr. Stanley) has spent about £45 million worth of our time this evening. I shall try not to be so expensive. I take the opposite point of view from that of the hon. Member. This is the third debate in a year on Post Office affairs. It may only be 90 minutes, but bearing in mind all the demands upon the time of the House over the past year, the Post Office has done well. I am told by hon. Members that now that the Post Office is a public corporation we never get the opportunity to call it to account and to question it. Those who come to the House on a Thursday afternoon to ask the Lord President whether he will find time for a debate on their pet subject should take note of the fact that the Post Office has done very well.
I wish to say a few words on the specific question of prices and then on the review of the Post Office which has yet to be established. I find the remarks of Conservative Members contradictory. I am not sure what they are suggesting. They condemn the Government for introducing this measure and say that it should not be necessary. What do they suggest as an alternative? Do they suggest that the Post Office should put up its prices even more? Or do they suggest that Post Office staff should be cut substantially to stop these deficits? I have not heard any alternatives put forward.
Mr. Tom King: These deficits are historical, relating to 1974–75. The options that the hon. Member raises are not much good. Whatever we do now will not affect the situation. We say that if £307 million is lost there is legislation to compensate for price restraint, which should be used in the proper way. If it is necessary to write off the remaining deficit, which is a trading deficit, that should be faced up to.
Mr. Wrigglesworth: I am grateful to the hon. Member for that explanation. It would still be a charge upon the taxpayer, irrespective of the way it was handled. It is either written off or handled in this way. That is a fair attitude. But let us not deceive the taxpayer, as I suspect some remarks might have done, into thinking that there is some mystical way in which the deficit can be done away with. The Opposition say that the taxpayer has to pay and there is no alternative to that. I accept that that is the case. Like my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), I regret that this Order and others like it should be put before us.
I fully support the Government's policy of phasing out price subsidies in the nationalised industries. The hon. Member for Bridgwater (Mr. King) asked whether these are justifiable costs. If the hon. Member read an article which appeared in the Daily Telegraph shortly after the price increases were announced he will know that the Chairman of the Post Office Corporation, Sir William Ryland, said:
"Prices have been kept down too. Recent statutory pricing policies required us to budget for losses. Under-priced services meant over-stimulated demand. Over-stimulated demand meant higher investment at very high rates of interest. All to provide services which did not begin to cover our costs."
That was the situation the Post Office was in and is in as a result of Government action under both parties. We cannot blame the Post Office for the situation in which it finds itself. This loss has to be covered. The gradual phasing out is surely the best way to do this, rather than introducing even more swingeing price increases, which is the only other option open to the Government. When Conservative Members criticise the Post Office for the present state of affairs they should remember that it was this policy

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of subsidising prices that stimulated demand, as the chairman said. That is a very dangerous policy.
It may be that the Post Office should have anticipated the situation and budgeted accordingly, but when the Government tell a nationalised industry to pursue a certain policy it is difficult for that industry to plan for changes in Government policy which it cannot foresee. For that reason, the Post Office has faced great burdens in trying to plan ahead in these circumstances.
The hon. Member for Tonbridge and Mailing asked why the price increases were delayed, as they were. The hon. Gentleman should try to run an organisation with a staff of 425,000 delivering 35 million letters a day. He should try to plan for it. It is an enormous task. In a situation in which there are two General Elections within a period of six months, with price codes being changed, and, in addition, it takes three months at the minimum to get through a price increase, because of the necessity to go to the Post Office Users' Council, the Department of Industry, the Cabinet and the Price Commission, when changes in Government policy are taking place, and when there is uncertainty, which is not the responsibility of the Post Office, it is not difficult to understand why price increases are delayed and why the Post Office faces all the problems of planning for such an enormous organisation.
It is with regret that I support the Government's action. It is one of the last dying embers of the policy of subsidising the nationalised industries' price restraint policies.
I say a word now about the cost to the Post Office of the inquiry which has been laid upon it. Hon. Members will recall that in the course of our last debate on the Post Office, I roundly condemned inquiries which had been held into its affairs. I regret that this latest inquiry has been established. The facts are widely known. I have my own interests in the Post Office, as parliamentary adviser to one of the unions and as a former Post Office employee. We have a Select Committee on Nationalised Industries, which at present is conducting a thorough investigation into one of the businesses of the Post Office. Why is it necessary, on top of one inquiry, to
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establish yet another? It is an intolerable burden to load upon the Post Office not only the inquiry but also the uncertainty of delay from August until November without any inquiry being appointed and without any terms of reference being published.
I know that the Minister appreciates that the Post Office is willing to assist in the running of this inquiry and to expedite its work. I hope that he will try to assist the Post Office by appointing the inquiry and by getting the terms of reference published as soon as possible, so that the inquiry can get on with its job, publish its findings, and let the Post Office do the job that it has to do.
At the end of the day, the Post Office management has to run the Corporation itself. It has to plan ahead. If, all the time, it is looking over its shoulder at this House, the Department or the Government investigating its activities, it is not devoting its attention to the job of providing efficient telecommunications, postal and other services. That is the job to which the management of the Post Office should be devoting all its time. I regret that in the coming months so much time will have to be spent providing information for the inquiry. I hope that it will be expedited as much as possible.
11.24 p.m.
Sir George Young: It is a pleasure to speak in the debate after the hon. Member for Thornaby (Mr. Wrigglesworth). We share a common stake in the Post Office Pension Fund and we are delighted to see the concern of our parliamentary colleagues that we should both be provided for in our old age.
In previous debates the Minister has robustly reminded us that he does not run the Post Office and is not responsible for some of the criticisms which, in our enthusiasm, we visit on him. I shall respect the hon. Gentleman's sensitivity by concentrating briefly on one subject which is his responsibility, namely, the financial targets for the Post Office that are set by the Government.
The situation is that nearly all the nationalised industries have the same financial target—roughly to make 2 per cent. on turnover. One has only to look at the Post Office to realise what a nonsense this is, because there is the same

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financial target for the postal service, which has virtually nil growth and which is labour-intensive, as there is for telecommunications, which is capital-intensive and which enjoys a growth in demand. It is economic nonsense for the Government to set the same financial targets for two such completely different industries.
The Government owe it to the Post Office and to the country to define, much more clearly and coherently than they have done to date, their expectations of these two services, to set realistic and relevant financial targets, and to ensure that the country gets good value for money. Historically, such targets have been expressed in terms of so much return on assets. Two particular problems have arisen, and I put this point to the Minister because I hope he is contemplating setting fresh targets for the Post Office.
First, many of the nationalised industries, and particularly the Post Office, are monopolies. As such, they can jack up tariffs to meet any financial targets which the Government set them, and there is no guarantee that those assets are being used efficiently. Secondly, because of the high rate of inflation, the provision that has been made by the Post Office and other nationalised industries for replacement has been inadequate, and there is an argument that the nationalised industries should now move over to current cost accounting. It would be interesting if the Government could share their thinking with the House and, when they set financial targets, set out clearly on what basis the assets are to be valued. The Post Office telecommunications side could have a target of a 5 per cent. to 6 per cent. return on net assets if they were valued on a current cost basis.
When the Minister sets targets for the Post Office he should set them in terms of output per employee, of letters delivered per postman, so that one can try to flush out some of the overmanning in the Post Office, but financial targets are set which can easily be achieved by putting up tariffs.
The price of mismanaging the nationalised industries is high. Over the past 10 years we have spent about £3,000 million in subsidies to nationalised industries of the kind that we are debating this evening. That sum of money could have built 375 new schools, 200 new hospitals,
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or 300,000 new homes. We are not debating the Post Office in isolation, we are debating a problem which means that resources are being diverted towards the Post Office and away from services which desperately need those resources. The Government owe it to the House to set realistic targets for the Post Office, so that it can contribute to the Exchequer instead of being a drain on it.
11.28 p.m.
Mr. Giles Shaw: It is important that we have a discussion of this kind, ranging from the consumer on the one hand to the taxpayer on the other. They happen to be the same person. The consumer is involved in both those categories, in footing the bill as well as enjoying a reduced level of service in many aspects of Post Office activities.
The Minister said that as a result of the new postal tariffs the traffic loss in the first month was 13 per cent. What was the estimated loss for the first month, which was a matter of deep calculation in the Post Office, and what is the average estimated loss for the 12 months under the current review?
Secondly, I must refer to the Price Commission and its reports. For two successive quarters the Price Commission has warned the Government of the rate of escalating costs within the nationalised industries, and in its advice it has made a clear distinction between price policy and cost policy.
In his opening remarks the Minister said that there was some improvement, and that the number of vacancies had dropped from the 9,000 level to the 5,000 level. May we ask what effect this will have on costs? If, as I suspect, it will increase costs, bearing in mind the falling return in terms of service, what does the Minister expect he will have to do to reduce costs in order to come anywhere near the cash targets that he has set?
Thirdly, on the question of pricing policy, will the Minister comment on the extent to which he sees recovery being spread as between industrial users and domestic users of the Post Office services? I draw a distinction between telecommunications services on both those grounds, because the domestic user is to some extent insulated against some tariff increases which are passed by the Post Office on to industry. Bearing in mind;

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the recurring reductions in industry's profit levels, because of the operation of the Price Commission and the Price Code, does the hon. Gentleman suggest that it will be Post Office policy to increase again the charges upon industry so as to subsidise to some extent the consumer?
I raise these questions in the name of the hard-pressed taxpayer and consumer.
11.31 p.m.
Mr. Gregor Mackenzie: We have an expression in the part of the world that I come from—"You can have your feet ca'ed away from you." This has not been quite the debate that I expected we would have. It has been a very useful and constructive debate. I am grateful to hon. Members for the way in which they have participated and for the spirit in which they offered advice to me.
Advice can sometimes be a little contradictory. I am never certain whether the remarks are directed to me, as a Minister in the Department responsible for the Post Office, or to the Chairman of the Post Office Corporation. I suspect that some of the remarks are for me and some are for him. I take note of the remarks which are directed at me, and I am sure that the Chairman of the Post Office Corporation will take note of the remarks which are directed at him. I have said repeatedly that I am not the Chairman nor do I seek to be.
My hon. Friend the Member for Thornaby (Mr. Wrigglesworth) said that during the year that he has been in the House we have had a number of discussions on the Post Office. I do not think that such debates necessarily do much good for the morale of the Post Office staff. However, a debate in which helpful comments are made, as they were made in this debate, is useful.
Members of the House should not take it upon themselves to try to manage the Post Office. It I were the chairman of a nationalised industry, or of a large public company, I should not like to have anyone constantly looking over my shoulder, as we seem to be doing with the Chairman of the Post Office Corporation. Those who accept the task of serving on the boards of nationalised industries will be heartened by the comment of my hon. Friend the Member for Thornaby that, they having been
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appointed, Members should allow them to get on with their job.
I see the hon. Member for Tonbridge and Mailing (Mr. Stanley) shaking his head as though there were something wicked in the suggestion that the Chairman of the Post Office Corporation should be allowed to do the job he has been appointed to do. He was appointed by the Tory Government and he was re-appointed by my right hon. Friend the Secretary of State. I am sure that the Chairman would appreciate it if he were allowed to get on with the job without constantly being offered advice by members of the public. Everyone has an interest in the activities of the Post Office.
Mr. Tom King: We did not ask for this debate. We are having the debate because the Government want permission to recover losses made by the Post Office. It is the Government who brought forward this motion which is being discussed in an hour and a half.
Mr. Mackenzie: I hoped that I was being complimentary to the hon. Gentleman earlier. I hope that the House will accept that it is difficult to manage the Post Office and that the House should be showing its confidence in the Chairman and his Board.
I was asked whether I would demonstrate how the effects of price restraint added up to the same figures as the deficits. I have taken some trouble about this, for I must confess that figures sometimes trouble me. It may come as a great surprise to the House but it is true that I can be troubled by figures, as can other hon. Members.
We are not claiming that the calculation of the effects of price restraint on the costs and revenues of the Post Office would produce a figure equal to the actual deficits incurred by the Post Office businesses. The concept on which the Post Office demand for compensation for price restraint is based is that in its absence the Post Office would have fulfilled its statutory financial obligation of securing that its revenues were not less than sufficient to meet all charges properly chargeable to revenue account, including allocations to general reserves, taking one year with another. In other words, being a law-abiding organisation, the Post Office would have set its prices at levels that would have ensured that it did at least a little better

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than simply breaking even. Price restraint prevented the Post Office from doing that.
Thus, it is reasonable to compensate the Post Office up to the limit of the deficits, as the Act allows, unless there are identifiable reasons for not doing so. Thus, it would be wrong for the House to withhold compensation of the full amount of the deficits unless it were clear beyond doubt that factors other than price restraint had materially contributed to the deficits.
I was asked to set out the effects of price restraint on both costs and revenue. Hon. Members know perfectly well that to be meaningful such a calculation would have to work its way through from the very beginning of price restraint, because the effects of price restraint are cumulative and therefore it would be artificial to consider within the compass of a single year what the Post Office would have done had the circumstances of preceding years been entirely different from those actually prevailing.
Therefore, with complete freedom to determine its own price levels, the Post Office would have expected to remain in surplus. Any calculation of the loss of revenue due to price restraint and forgone opportunities would certainly show that price restraint cost the Post Office substantially more than the sum we are discussing tonight.
Mr. Tom King: This is the crucial point. The hon. Gentleman is saying that because the Post Office is a law-abiding organisation, it would have been able to make a good profit but for price restraint. There are plenty of good companies that are law-abiding and that unfortunately, because of the way in which the economy moved, or for some other reason, did not do what they hoped to do. That answer will not do.
Mr. Mackenzie: I am sorry to disappoint the hon. Gentleman, but it is the only answer he will get.
My hon. Friend the Member for New-castle-under-Lyme (Mr. Golding) asked me about manufacturing in the Post Office. I have made many speeches on this subject. My right hon. Friend the Secretary of State has received definite proposals from the Chairman of the Post Office about manufacturing arrangements. They are now being studied and I will
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let my hon. Friend have my comments on them later.
My hon. Friend asked me about the telecommunications side. I can say that the Post Office's long-term plans envisage the integrated system that he and I have been discussing for many years. However, such a system, as we are both aware, requires many years of forward planning and massive investment, and it is complicated by an ever-changing technology and the need to satisfy various demands as they arise. Those plans will be evolved gradually and steadily.
My hon. Friend mentioned the pension fund, as did the hon. Member for Ton-bridge and Mailing. I cannot add to what I said in my opening comments. I accept that this is a contentious subject. I know that the hon. Gentleman has been concerned about Consols for some time. This matter must be fully considered. The Government are considering it now. I am anxious that we should not say "We introduced it in 1969; the Conservatives carried it on between 1970 and 1974; now we are being called on to make a decision." This will take some time. I am sure that the hon. Gentleman would not wish us to take a decision in haste.
I was surprised at some of the comments of the hon. Member for Tonbridge and Mailing about the increased charges which were introduced in June 1974. That was one of the first—some people thought that it was unpopular—acts of the Labour Government, but I thought that we were right to do so. I supported that policy when the Labour Party was in opposition. On taking office I consulted my senior colleagues in the Department and the Government at the earliest opportunity, so as to ensure that the measures were passed as quickly as possible.
I was asked whether the Government hoped to ensure that there would be no further compensation orders after the 1975–76 Order. Nobody promised that there would not be a further order.
Mr. Stanley: In the debate on the Statutory Corporations (Financial Provisions) Bill the Chief Secretary said that it was not envisaged that the 1975–76 Post Office compensation would exceed £70 millions. Will the Minister give us an assurance that the ceiling still stands?
Mr. Mackenzie: That is the ceiling at which we are still aiming. It is too soon after the introduction of the latest tariff increases to make any assessment. Those increases were brought into being a month or so ago. It is therefore not possible to give the categorical assurances for which the hon. Gentleman asks.
My hon. Friend the Member for Thornaby asked about the Post Office inquiry. Despite the doubts of Members of Parliament, union representatives and others, the Government responded to the suggestion of the Post Office Users' National Council. There will be a wide-ranging inquiry. However, an inquiry provides no magic wand. It will not enable the £300 millions about which we are troubled to disappear overnight. However, I hope that the inquiry will be of value to this House and to the Post Office. The Post Office will give every co-operation to the review body, once it has been established.
I am sorry that time does not permit me to answer all the points made in the debate. However, I have taken a note of all the points made and shall provide answers to them.
Question put and agreed to.
Resolved,
That the Compensation for Limitation of Prices (Post Office) Order 1975, a draft of which was laid before this House on 27th October, be approved.

POST OFFICE (LIMITATION OF PRICES)
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

PUBLIC TRANSPORT (CHORLEY)
11.44 p.m.
Mr. George Rodgers: Today the House has been occupied with large events. It might well appear incongruous that our business should be rounded off by a parochial debate on the cost of public transport in the Chorley constituency. However, it is one of the virtues of our parliamentary procedure that attention can be focused on particular problems that beset one constituency. This issue is of major importance to a vast number of people living in my part of Lancashire.
1100
I appreciate that the cost of travelling by public transport is not unique to the area which I represent. None the less, I am well informed about the misery and frustration that is created by the upward price spiral and the downward spiral of the standard of the services in my constituency. If this anxiety is a reflection of what exists elsewhere, it emphasises the need for urgent action immediately.
In recent weeks there has been a surge of anger and discontent about the cost of journeying by public transport. The anger and dismay are of such proportions that it would be remiss of those in office to evade or avoid the conclusion that a review of policy in this area is an immediate necessity.
In February of this year the Ribble Motor Company, a subsidiary of the National Bus Corporation, which provides a "service"—I put that word in quotation marks, advisedly—in Lancashire, secured authority to increase its fare charges by 33 per cent., a substantial rise by any standards and massive when related to recent improvements in wages and salaries. In September the company was back again seeking permission to impose a further increase in its charges. Again the application was successful, despite the united opposition of every local authority in the area. On this occasion, superimposed on the already elevated rate, it was decided to replace the half fare charge for children between the ages of 3 and 15 with a formula that meant that children paid two-thirds of the full charge for any journey by bus.
The impact of the two increases has been formidable. In many cases as much as one-sixth of available family income is now being devoted to paying for children to get to and from school. To add to the injustice, the bus operators steadfastly refuse to recognise that the minimum school leaving age is now 16. Thus, we have the absurd position of people who are obviously scholars travelling to school yet being charged full adult fares for the journey.
Within the Chorley constituency there are 23 parishes from which children have to travel to school. Schools are usually situated in nearby towns. Should the distance between school and home be less than the statutory distance which enables

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free transport to be provided, the cost to the parent, regardless of income, can be £1·40 per week per child. One does not need to be a mathematician to realise the enormity of the financial burden if there are one, two, three or even four school children in one family.
With the approach of winter, the darker evenings and the existence of unlit roads, it would be a folly to suggest that youngsters living in remote districts should walk to and from school. Yet I fear that harsh economic circumstances will mean that many children will be forced to face the hazards of using Shanks's pony instead of the security of the school bus during the coming months.
The school child has become the captive of the bus company. Although the reluctance of parents to expose their children to avoidable risks has been recognised, it has been decided to inflict a special levy on this helpless section of the travelling public. What next? Is it the intention of the accountants to take further advantage of this easy market by levelling the full adult fare on every passenger, regardless of age? The attitude is one of sheer commercial opportunism.
I have spoken only about travel to school, but the area of discontent, financial and social hardships is much wider. In the villages, a new category of disabled person has emerged, comprising those who are immobile and isolated, not by physical handicap but by virtue of an inadequate, inefficient and expensive public transport service. Many villages are without doctor, pharmacist or local authority office, not to mention a post office, welfare facility, or youth club. Those who live in small communities are confined, caged and constricted, because they simply cannot afford to utilise whatever scanty passenger transport provision is still available.
Ironically, the Chorley constituency is straddled by motorways which reach out all over the country, but to partake in a journey from one village to another has become an expensive adventure which almost demands supplies of quinine and fresh water. Certainly it seems that we are devoting lavish sums to accommodating the private car, often at the ex-expense of worsening public transport.
1102
I want to comment briefly on two factors directly associated with the cost of public transport, although I appreciate that my hon. Friend the Minister has no direct responsibility for either. It is difficult to discuss the cost of public transport unless we accept that there is an overlap of responsibilities. I plead the fact of collective Government responsibility.
We are all aware that proposals have been placed before local authorities and other interested parties substantially to reform the unfair and obsolete system of providing free transport for schoolchildren who live beyond the three-mile limit. I know full well that if the proposals are implemented they will involve only a redistribution of money already being spent. However, I should be the last to obstruct the redistribution of wealth, and I am anxious that the amended scheme should be introduced as quickly as is feasible, especially since it will require parliamentary time and legislation. I understand that my right hon. Friend the Secretary of State for Education and Science is awaiting the response and guidance of the local authority associations. I urge that steps be taken to bring discussions to a speedy conclusion, so that we may move towards a somewhat saner policy.
On the second point, I shall be even more brief. It is to the eternal credit of a previous Labour Government that the prerogative of providing concessionary fares to pensioners and disabled people was given to local authorities. Many have responded well, and the recipients of passes or tokens have been enabled to travel, often over hundreds of square miles, at little or no personal expense. Unfortunately, confusion has arisen when neighbouring authorities have widely contrasting schemes, or, perhaps, no scheme. The level of fares is now so high that the extent of the provision can enhance a pensioner's income by several pounds a week. All that I seek is that the Government act as honest broker to establish some conformity, preferably at the standard of the more enlightened local authorities.
Those two items having been recorded, I draw to my hon. Friend's notice the curious hotch-potch of bus services in Lancashire, where no fewer than a dozen operators compete for business. It is

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hard to believe that that is the road to efficiency. I am convinced that the case for public transport being administered on a county or regional basis is now overwhelming. The National Bus Company could well act as a sub-contractor, carrying out services as requested by the appropriate local authority.
As things stand, the county council is not even consulted before alterations in fare structures are demanded, which is truly astonishing when an increase in fares has such a devastating effect on the county budget. Obviously, when the charge for the passage of children was increased by the bus companies, the county council had to fork out the additional cost for every child qualifying for free travel to school, and the rates precept went up accordingly.
It would be churlish if I did not pay tribute to those actions by the Government and the Department to meet some of the problems of public transport. The replacement of a tangle of specific grants by the transport policy and programme allocation and the supplementary grants system is a firm step towards a coherent policy for public transport.
Equally, the decision to concentrate a greater proportion of assistance on rural services is warmly welcomed.
The language used in the Department's circulars on the subject is somewhat indigestible, and at times almost incomprehensible. When doing my homework on the topic I felt that I was absorbing more than I wished to know about public transport. However, I concede that in the Department there is now an awareness of looming disaster if the situation is not brought under control.
It is easy to be critical, and it is cowardice to point out the defects without offering some possible remedies. I am absolutely persuaded that we must divert resources away from road construction and towards the relief of public transport. We must decide quickly whether licensing concessions are to be provided to allow minibuses to replace the huge and pricey vehicles that trundle, sometimes half-empty, around the countryside. There should be a determined move towards the staggering of working hours and holidays, so that transport services are utilised sensibly.
1104
The attitude of the operators who respond, almost instinctively, to every crisis by putting up fare levels must be firmly resisted. A greater element of democracy should be introduced into passenger transport authorities and traffic commissioners. The capacity of the bus to conserve our supplies of energy must not be underrated. Customer resistance and the diminishing return on the fare increases clearly demonstrate that the simple equation that increased prices mean a greater overall return is no longer valid.
A great number of families, mostly from the low income groups, are totally dependent upon public transport. The car-less ones have had enough. They are being shabbily treated, and it is no wonder that they are angry, frustrated and bewildered. I have received a mass of petitions objecting to the staggering increase in bus fares. I have received letters of protest from borough and parish councils in my constituency. Moreover, I have had correspondence from parent-teacher associations, trade councils and trade unionists. What is most important is that at my surgeries I have met frightened people who can no longer meet the soaring demands of the transport operators.
At a time of grave economic crisis, the Labour Government which took office at the end of the war created the National Health Service and the programme of family allowances. We should now recognise a new area of need and provide assistance to those who rely on public transport. In my view, that would prove a wise investment. I believe that in the final resort the Government must accept responsibility for the provision of a sound public transport system. It makes moral, social and good political and economic sense.
I was saddened by the measures to combat inflation, because, although they offered some modest protection against price increases, especially concerning food costs and rents, they provided no shield against the rising charges for public transport.
Had time permitted, I should have liked to include some observations on the distinct possibility that about 10,000 employees of the transport undertakings face unemployment because of the diminishing number of bus routes. I should

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have liked to comment at length on the limitations to labour mobility, due to the financial implications of using public transport to travel to places of work. I long to discuss the rô1e of the railways in creating a fully integrated transport service. Most of all, I should have liked to read some of the many despairing letters which I have received from the victims of those who operate the system. Indeed, I should have liked to find time to pay tribute to the local trades councils, the Lancashire Evening Post and the Leyland Guardian for helping to expose the hardships which have arisen following the outrageous increases in charges. I do not make a practice of casually praising the Press, but in this instance a first-class piece of crusading journalism took place.
Common sense demands that the Minister be given ample opportunity to reply. I hope that my hon. Friend will have words of hope and comfort for those in my constituency and in other areas who are stricken by the savage and continuous increases in the cost of travelling by public transport.
11.59 p.m.
The Under-Secretary of State for the Environment (Mr. Neil Carmichael): Myhon. Friend the Member for Chorley (Mr. Rodgers) has raised a matter concerning his own area. As he said, considerable concern has been expressed throughout the country about the cost of public transport. I noticed that at the outset he said that up till now he had been dealing with big issues, and he apologised for raising the question of transport in Chorley. He can rest assured that I feel just as concerned about this matter as I do about the issues which were raised in the earlier debate. However, the cost of public transport must be considered in its entirety and against the background which my hon. Friend described.
My hon. Friend properly drew attention to a wide variety of separate issues. If I do not have sufficient time to deal with them all, I hope that he will accept that I shall deal with them later and shall write to him as fully as I can on the other issues that he raised.
The House will know that the Government have made their view clear that in
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the face of severe inflationary pressures of recent times fares must keep pace with rising costs.
In our present economic situation the Government's overall policy is to seek to limit both central Government and local authority expenditure. The transport policies and programmes, which county councils submitted to the Minister for Transport last year, estimated that revenue support to buses would amount to £85 million, at November 1973 prices, in 1974–75. If local authorities had continued with their existing fares policies in 1975–76 their revenue expenditure could have been as high as £170 million—that is, double. The Government could not agree to support policies which were likely so rapidly to increase the burden on local authority rates and on the taxpayer alike at a time when there are major claims on public resources from other important expenditure programmes. Nor are low fares an entirely efficient way of helping low income groups, since much of the subsidy goes to benefit the better-off. I have discussed this point privately with my hon. Friend, because I feel strongly about it. Nevertheless, in order to reduce the impact on rates of local authorities' revenue support policies during 1975–76, and to moderate the level of fare increases which would otherwise be necessary, the Government have made a special grant allocation of £90 million through transport supplementary grant towards local authorities' support of public transport. This is, of course, in addition to the sum of over £60 million which is made available to the bus industry generally from central funds by way of new bus grant and fuel duty rebate for stage services.
I am aware that recent fares increases by Ribble Motor Services Ltd., which serves the Chorley constituency, have caused a great deal of concern to my hon. Friend and that he has been particularly worried about the additional increased charges for children from one-half to two-thirds of the adult fare. Bus fares are, in the first instance, a matter for the commercial judgment of the individual operator. This must be so. They are the people who know the costs of providing the services and the operational constraints within which they have to be provided. Fares, however, are subject to the approval of the traffic

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commissioners. These statutory independent bodies have a duty, amongst others, to ensure that fares charged are not unreasonable.
In considering applications from bus operators for revisions of fare scales, the traffic commissioners are also, at present, under a statutory obligation to have regard to the Price Code. Fares applications are normally heard in public, and the commissioners may at their discretion listen to representations from interested parties at a public sitting. In certain circumstances there is a right of appeal to the Secretary of State, but my right hon. Friend has no power to intervene unless a properly constituted appeal is made to him.
As I understand it, Ribble's fare increases have been required to enable revenue to meet costs, but my hon. Friend will understand that I am not able to comment on these matters, since, as I have explained, the Secretary of State has no locus in them. This is more particularly the case with regard to the fares increase and associated adjustments to concession rates which took effect from 5th October, since the period within which appeals to the Secretry of State may be made on it expires on 6th December and I can say nothing which could reflect on the merits of any potential appeal. I am sure that my hon. Friend will appreciate that point.
I know that my hon. Friend is also concerned that some people are less able to cope with this higher cost of travel than are others, and this raises what is in many respects the separate issue of concessionary fares facilities.
As regards concessionary fares for children, a distinction must be made between journeys to school and other travel. All local education authorities have a duty to meet the costs of travel to school for children of compulsory school age who live more than a certain distance away. Local education authorities also have discretion to contribute to the travel expenses of other pupils if they consider it necessary and can make the resources available.
The Government are well aware that the effects of the existing statutory arrangements for school transport are causing a great deal of concern not only
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in Lancashire but over the country as a whole.
In a report published at the end of 1973 the Working Party on School Transport recommended changes in those arrangements; but subsequent consultations on the recommendations with the local authority associations and other interested organisations showed that there was no general agreement as to the changes that should be made.
As my right hon. Friend the former Minister of Transport, now the Secretary of State for Education and Science, explained on 29th October, in reply to a Question by my hon. Friend the Member for Wrexham (Mr. Ellis)—and as my hon. Friend said this evening—proposals for revised school transport arrangements have been sent in the form of a consultative document to the local authority associations and other interested organisations. It may, however, be some time before all the replies are to hand.
In addition to the statutory arrangements for schoolchildren, bus operators have frequently offered reduced fares for children on their own initiative and commercial judgment. There is nothing in law to require bus operators to treat children any differently from adult passengers and operators are free to decide up to what age and between what hours any fare concession shall apply, within the overall control of bus fares exercised by traffic commissioners. The commissioners may decide that the general public are being penalised because there are so many concessionary fares.
These are the circumstances in which Ribble's concessions to children are set. Bus companies have found this sort of commercial-based concession very difficult to maintain in recent years, and many companies now offer no concession to schoolchildren of any age.
I know my hon. Friend is also concerned about the position of other groups, such as old-age pensioners. Here, again, I can draw his attention to other statutory provisions which give local authorities powers to offer concessions. All local authorities now have general discretionary powers, under the Transport Act 1968, to arrange concessionary fares schemes with operators for the elderly, blind and disabled, and to meet the costs. My information is that Chorley

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Borough Council does have such a scheme in operation, by way of a token system.
My right hon. Friend the Secretary of State has no power to require local authorities to arrange concessions or to say what form a local concessionary fare scheme should take. A mandatory or national scheme would require legislation imposing a duty on local authorities, or empowering central Government to arrange and finance whatever concessions Parliament thought appropriate. The position at the present time, I am afraid, is that even within the terms of the legislation now in force, the Government have recognised that the expansion of existing concessionary fares schemes and the introduction of new ones is not possible in the present economic circumstances.
My hon. Friend spoke about introducing a greater element of democracy into PTAs and traffic commissioners. He will know that all the passenger transport authorities are democratically elected, being the councils of the metropolitan counties in each case. Section 15(2) of the Transport Act 1968 provides that passenger transport executives must obtain the approval of their passenger transport authorities
"before making, or authorising or consenting to the making of, any alteration in the general level of charges for the transport services provided by the Executive or…for reducing or waiving those charges in a particular case or cases of a particular class".
The writ of traffic commissioners runs in passenger transport areas, and although I note that my hon. Friend calls also for greater democracy in these bodies, I should emphasise the manner in which they are appointed.
Three traffic commissioners are appointed in each of the 11 traffic areas. The chairman is a full-time salaried appointment, but the other two commissioners are appointed from panels of persons nominated by local authorities. In addition, a number of deputies are selected from these panels each year, in case a commissioner is unavailable or has an undesirable interest in particular proceedings.
Mr. Eddie Loyden: In his obvious enthusiasm for democracy, does not my hon. Friend feel that it would be advantageous to have
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direct elections to these bodies, seeing that they involve the ordinary people who use the services so much?
Mr. Carmichael: I am not being terribly enthusiastic about democracy in explaining how the system works. I was explaining that, apart from the full-time members, traffic commissioners are appointed by local authorities—local councillors. That is a reasonably democratic way to appoint them. They are answerable to their local authorities and, through them, directly to the electorate.
Mr. George Rodgers: Surely the central theme here is lack of standard behaviour towards public transport and the question of consumer involvement, which all Governments, certainly this one, have regarded as necessary to the development of all the interests concerned. Will my hon. Friend respond to the point about direct consumer involvement?
Mr. Carmichael: That would be going wider than the subject of the debate. But I am not sure how much more democratic one can get in the PTA, which is an elected local body. Its members are, therefore, people who know what is happening in their areas. The executive appointed by them is not allowed to increase fares or lay down major policy without the authority of the PTA. I do not see at which point the consumer can be much better protected than by the councillors he elects and to whom he can make representations. That is surely a fairly good step on the road to democracy.
My right hon. Friend the Secretary of State for Prices and Consumer Protection is looking for ways to increase the scope of public participation in these things, but surely the present system is a good basis, with its proportion of elected representatives. There would be some resentment if there were selection by some other body. It would certainly be worth considering whether there is any body for the selection of representatives which could be more democratic than an elected body.
My hon. Friend referred to the need to review public transport policy, particularly for developing resources away from road construction towards the relief of public transport. We cannot debate the subject fully now, but I shall write

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to my hon. Friend and explain the position. I remind him of my right hon. Friend's announcement on 2nd July that we are working on a thorough review of transport policy and intend—
The Question having been proposed after Ten o'clock on Monday evening and
the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at fourteen minutes past Twelve o'clock.