HC Deb 02 February 1977 vol 925 cc550-61
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Crosland)

With permission, Mr. Speaker, I will make a statement on the Falkland Islands and our relations with Argentina.

Since my right hon. Friend, now Prime Minister, made a statement on this subject on 14th January last year, Lord Shackleton has presented his "Economic Survey of the Falkland Islands". The whole House will join me in warmly thanking him and his colleagues for this immensely thorough and wide-ranging report.

The survey paints a vivid picture of this small community of 1,900 people, 7,500 miles away, yet staunchly British and with rich potential in the seas around them. But currently they face an uncertain economic future. The economy, essentially a monoculture based on wool, is stagnant; the resources do not exist to exploit the new potential in other fields; and emigration is increasing.

To remedy this situation, Lord Shackleton made a large number of recommendations, many of which will require further study and detailed consultation with the Islanders. Meanwhile the Government will proceed to implement those internal constitutional changes which have already been approved by the Falkland Islands Legislative Council.

The recommendations on development aid will fall to my hon. Friend the Minister of State for Overseas Development to implement. But I can say now that the Government are ready to consider, after such pre-investment studies as may be required, agricultural diversification, mutton freezing, knitwear production, and improvements to education. We also propose to pay special and urgent attention to the Islands' internal communications, with particular reference to the availability and maintenance of an efficient local air service.

The survey further recommended certain major capital projects, notably an enlargement of the airport and a pilot fishing project, which would bring the total recommended expenditure by the United Kingdom up to some £13 million to £14 million. The Government, like Lord Shackleton and his colleagues, are in no doubt that the potential for development is there, and they will at the appropriate moment commission the essential preliminary studies to determine whether airport enlargement is likely to be practicable and cost-effective.

But, for the rest, we cannot at this time accept more costly recommendations. The overseas aid budget, recently cut in the December public expenditure exercise, would not stand it. There are more urgent claims from much poorer communities. And the right political circumstances do not exist.

In Lord Shackleton's words, in any major new developments of the Islands' economy, especially those relating to offshore resources, co-operation with Argentina—even participation—should, if possible, be secured. The Government agree. Such new developments require a framework of greater political and economic co-operation in the region as a whole. Without such a framework, the prospect of achieving a prosperous and durable future for the Islands is bleak.

The Government have therefore decided that the time has come to consider both with the Islanders and with the Argentine Government whether a climate exists for discussing the broad issues which bear on the future of the Falkland Islands, and the possibilities of co-operaation between Britain and Argentina in the region of the South-West Atlantic.

I must make certain things absolutely clear. First, any such discussion, which would inevitably raise fundamental questions in the relationship between the Islands, Britain and Argentina, would take place under the sovereignty umbrella; that is, Her Majesty's Government would wholly reserve their position on the issue of sovereignty, which would in no way be prejudiced. Secondly, any changes which might be proposed must be acceptable to the Islanders, whose interests and well-being remain our prime concern. In consequence, thirdly, there must be full consultation with the Islanders at every stage; nothing will be done behind their backs.

To fulfil this pledge, I am sending my hon. Friend the Minister of State to the Falkland Islands in mid-February to hear from the Islanders at first hand how they view their future. He will also visit Buenos Aires. His object will be, in effect, to see whether terms of reference can be agreed for further more formal talks between the parties concerned.

My right hon. Friend the Prime Minister said this to the House last January: Given good will on both sides, Britain and Argentina should be able to transform the area of dispute concerning the sovereignty over the Islands into a factor making for cooperation between the two countries which would be consonant with the wishes and interests of the Falkland Islanders."—[Official Report, 14th January 1976; Vol. 903, c. 392.] To day, as 12 months ago, the situation in the South-West Atlantic is a source of potential confrontation, of which there have been recent examples. It is co-operation, not confrontation, both in the Islands and in the Dependencies, which we seek to achieve.

Mr. John Davies

First, may I thank the Secretary of State for making that statement? I join him, naturally, in paying tribute to the work of Lord Shackleton in putting before us the very valuable report that we have had to work on. Moreover, may I say that I welcome the tone of the right hon. Gentleman's statement, and particularly the reassurance that he is giving the House regarding the absolute need for the Islanders' acceptance of any arrangements which may be entered into on their behalf?

We welcome the announcement that there are to be discussions about cooperation with the Argentine, but we are anxious lest the case be presented to the Islanders in a form which in some sense looks like some degree of coercion upon them to accept what might otherwise be unwelcome arrangements in order to secure their economic future. I hope that the right hon. Gentleman will be able to reassure us on that subject. With that caveat, we welcome greatly the visit by the Minister of State and wish him well in his work.

May I ask one or two specific questions? First, on the subject of aid, we sympathise with and understand the need at present not to extend an aid programme when there is so much need for constraint. However, is it not a fact that currently we in Britain enjoy from tax revenue resulting from activities in the Islands an extent of revenue which exceeds the aid that we currently furnish? Would it not be quite practicable at least to assure the Islanders that we would not remain a beneficiary of their own problems?

Secondly, on the fishing issue, may I ask whether it is the intention that an exclusive economic zone should be declared round the Islands at an early stage, and will that be of the same extent as that for the United Kingdom—200 miles?

Moreover, has the right hon. Gentleman considered, and will he ask the Minister of State during his visit to give careful consideration to, the potential offered by sea organisms known as krill which abound in the area of the Islands and could provide valuable revenue?

Finally, can the right hon. Gentleman reassure the House that he is not falling between two stools in the matter of the airport? Is it a fact that the airport as presently constructed is too short and that the extension of it to a greater length would be too expensive and would face us with a problem that would be highly unwelcome?

Perhaps the right hon. Gentleman can reassure us on those various points.

Mr. Crosland

I am obliged to the right hon. Gentleman for his opening remarks. We have no intention of trying to apply coercion to the Islanders. That would be wrong. Both we in this Parliament and the Islanders face a dilemma, because the future of the Islanders without co-operation with Argentina is undoubtedly not very favourable. That is something that the Shackleton report has underlined for us all.

On the specific question of aid versus the amount of money coming to this country from the Falkland Islands, the position is that if we take the last 25 years we find, as the Shackleton Report says, that more money has come to Britain from the Islands than has gone from Britain to the Islands in the form of aid. If we take the last five years, we see that the picture is the other way round. We have the somewhat ironic situation that almost all the post-tax profits in the Islands are drawn to this country and made good by the taxpayer here in the form of economic aid. Lord Shackleton has rather pointed remarks to make about this slightly curious and unusual situation.

The situation with regard to the 200-mile fishing limit is unbelievably complicated. Argentina has claimed a 200-mile limit round the Falkland Islands as part of her claim to sovereignty. There is a complication inside UNLOSC, there are complications within the EEC about this, and there are possible analogies with Rockall which need careful study. I should not like to give a definite answer on the subject except to say that what is essential is that we have a de facto agreement on the question of fisheries.

The answer to the question about krill is "Yes", and the point that emerges from the Shackleton report is that it is not just krill but a mass of blue whiting, alginates, tourism potential and possibly oil at some point, all of which ought to be explored, and can be explored only if we take a regional view of the South-West Atlantic as a whole.

On the matter of the airport, the right hon. Gentleman is right in saying that there is a risk. That is why, before we take a final decision, we must have technical studies.

Mr. Russell Kerr

Will my right hon. Friend accept the congratulations at least of many hon. Members on this side of the House at this attempt to plan a viable economic future for the Falkland Islands? Will he also take into account the fact that there is widespread perturbation lest in our attempt to help the Islanders economically, we hand them over politically to a quasi-Fascist State next door?

Mr. Crosland

I am well aware of that complication, which I considered most anxiously, but I still think that at the end of the day we have to proceed in this matter. Nobody is being handed over to anybody. All that my hon. Friend will do is to see whether the Islanders agree that there is a basis for discussion. There will be full consultation at every stage, and nothing will be done that does not meet the wishes of the Islanders. Therefore, while I strongly take the point made by my hon. Friend, I must tell him that the conditions that I have laid down provide a sufficient safeguard.

Mr. Beith

Although it is easy to recognise that the competing claims of poorer countries restrict the Government's ability to implement the more costly recommendations, does not the right hon. Gentleman recognise that his phrase about political circumstances not being right strikes apprehensions into the hearts of the Islanders and raises fears that pressure is being put upon them? Furthermore, does the right hon. Gentleman agree that, in moral terms, the argument about sovereignty is much less significant than that about the right of self-determination by the Islanders, who have made their views pretty clear?

Mr. Crosland

I agree, and we wholly accept the right of self-determination and are committed to that. On the final question, by far the easiest thing would be to do nothing—a very attractive and popular way out in a sense but a miserable way out—but we have this report showing the enormous potential for the Islanders' future economic development if we were willing to have economic cooperation with Argentina. We cannot have that unless certain political issues are raised. Therefore, I think that, in full consultation with the Islanders, we have to take a certain risk in this respect and see what comes out of it.

Mr. Dalyell

Does not an efficient local air service include that which the Islanders want most, which is some kind of direct air link and not through Argentina? Secondly, what are these complications with the EEC about fishing limits?

Thirdly, does not Lord Goronwy-Roberts go to Buenos Aires at the invitation of the Argentine Government?

Fourthly, when he is there, can he ask whether it would be possible, if there are links with Argentina, that they should be through the Province of Patagonia which has similarities with the Falklands and not directly through Buenos Aires, which is an alien city?

Mr. Crosland

In my rather tired condition, I am not sure that I have remembered all four questions. The airport enlargement which is proposed by Shackleton would enable planes to fly in from other parts of South America and further afield than Argentina.

With regard to Rockall, I would rather not go into that in more detail now, for a number of reasons that will be obvious to some hon. Members.

It is my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) who is going to Buenos Aires and the Falklands, and both the Falkland Islands and the Argentine Government are happy to receive him.

Mr. Michael Clark Hutchison

Does the right hon. Gentleman understand that the key to development in the Falklands and their safety is a proper airstrip? The construction company is there, and so is the equipment. The first duty of the Government is to get on with the extension of the airstrip.

Mr. Crosland

I think that this is the critical factor that colours a large part of the Shackleton Report. The position is that the present permanent airfield is not complete. It is way behind schedule and will not be completed until May. At the end of the day it will have cost £4½ million. The enlargement of this permanent airfield, which Lord Shackleton strongly recommends, is essential to the development of tourism, of fishing and possibly of oil in the future. It is essential to the whole island, but the trouble is that all these developments depend to a considerable extent upon co-operation with Argentina. That is why the question of the airport and co-operation in the region as a whole are so closely interlinked.

Mr. MacFarquhar

In view of my right hon. Friend's reassurance to the Islanders and the continuing intransigence of the Argentine Government on the question of sovereignty, what is it that has changed so that he is able to send the Minister of State to the Falkland Islands and Buenos Aires with confidence that he will not be going on a wild-goose chase?

Mr. Crosland

I do not think that I have total confidence in that. As my predecessors and those who served in Conservative Governments know, one has to make a judgment in these matters whether the time is appropriate for taking an initiative. An initiative of this sort carries the risk of failure. I do not hide that. But we cannot let this situation drag on and on with all the major recommendations of the Shackleton Report depending upon co-operation with Argentina. Without any total 100 per cent. confidence in success, I judged—and in my view this was right—that this was the moment to take the initiative.

Mr. Amery

As the right hon. Gentleman may know, I had some experience of the Falkland Islands problems while serving in the Department over which he now presides. May I join him and my right hon. Friend the Member for Knutsford (Mr. Davies) in welcoming Lord Shackleton's report? I entirely agree that in the long run the problems of the Falkland Islands must be worked out in conjunction with Argentina, but timing is of the essence. Is the right hon. Gentleman satisfied that it is possible to proceed or to seek that co-operation before the airfield is fully enlarged and that the stability of the present Argentinian régime is sufficient to allow it to embark on what may be the rather important negotiations which his statement inevitably opens up?

Mr. Crosland

The right hon. Gentleman is correct in saying that he had experience of this extraordinarily difficult problem. Of course it was a Conservative Government who, I think rightly, concluded the communications agreement with Argentina in 1971. It is a matter of judgment whether the chances of success outweigh the chances of failure. My judgment is that on the whole they do and that it is better to take this risk than to let the situation go on and on with, as I said, this vast potential waiting there to be exploited and nothing effective being done to exploit it.

Mr. Faulds

I warmly endorse my right hon. Friend's initiatives, but will he understand that some of us on these Benches—and I think some on the other side of the House—will have some continuing reservations both about the degree of self-determination in these matters assured to the Islanders and about the danger that the Islanders may become prisoners of developments in Argentinian political circumstances?

Mr. Crosland

Yes, Sir, these dangers exist, but at the end of the day it will be for this House, and only for this House, effectively to determine whether any changes in the present situation are made. Thus, our position is reserved to that extent. What I very much hope—so far I think this is occurring—is that when my right hon. Friend the Minister of State goes out to see whether a basis exists for proper discussion, he will, generally speaking, go out with the good will of the whole House.

Sir Bernard Braine

While in general no one could find any fault with the right hon. Gentleman's statement—it must be welcomed, particularly his recognition that the Falkland Islanders wish to remain British—is he aware that there could be conflict in what he has said? Does he recall that the Shackleton report said that two developments must go hand in hand—first, the reform of administration and closer participation of the inhabitants and, second, the injection of sufficient aid to give a new economic impetus? Does the right hon. Gentleman realise, therefore, that if Her Majesty's Government will not find the aid on the scale envisaged by Shackleton, that may lead to great disillusionment among the Islanders?

Mr. Crosland

I hope that the group of recommendations referred to by the hon. Gentleman, who knows the Falkland Islands well, will go through. A number of them have already been approved by the Falkland Islands Legislative Council. On the second question—the major capital projects, as opposed to the smaller matters of aid that I mentioned—if we were the richest country in the world with lots of money to dish out in all directions, we might be able to take these on entirely by ourselves. But that is not our position, and that is why I came to the conclusion, which I think—I do not want to put words into Lord Shackleton's mouth—is implicit in many of the things Lord Shackleton says about tourism, fisheries, airport enlargement and so on, that in practice they can go ahead only in the framework of a wider economic co-operation in the South-West Atlantic.

Mr. Heffer

Since we have so often heard in the House that the positions of Governments are being reserved and that no commitments will be entered into only to discover later that we have been slid into a position which perhaps the House did not want, shall we have a report back to the House once the Minister of State returns and shall we be kept fully informed of the negotiations at all stages? Thirdly, how precisely will the Falkland Islanders be asked in the final analysis whether they accept the outcome of these negotiations?

Mr. Crosland

Yes, the House will be kept fully informed and I do not doubt for a moment that my hon. Friend will make a statement when he returns. As to how the Islanders will be consulted, in the initial stages my hon. Friend is spending five days there. If he reaches any final conclusion which may be put to the Islanders, how the consultations should occur under those circumstances will then be a matter for discussion at the time, but there will be full consultation.

Several Hon. Members


Mr. Speaker

Order. I propose to call the four hon. Members who have been here throughout and who have been rising to catch my eye, and the hon. Member for Birmingham, Handsworth (Mr. Lee). But I hope that they will be brief.

Mr. Luce

Will the right hon. Gentleman make it absolutely clear that there will be no change in the sovereignty of the Islands without the full consent of the Islanders? Since the Shackleton report highlights the important commercial prospects in the islands and their fisheries, tourism and so on, can the Government not look at this whole matter as a prospect for joint investment opportunities which would bring great benefits to Great Britain, the Islands and Argentina, if Argentina co-operated economically with us, rather than as a question of doling out aid as money which will be wasted?

Mr. Crosland

My statement is clear on the first point. On the other point, the hon. Gentleman made a speech in an Adjournment debate recently which I read with some interest. I agree with what he said then, that these investment opportunities, as he rightly described them, must in practice be undertaken in co-operation with Argentina. The dilemma that we face—this is the difficulty which underlies these questions—is that we know that the Argentine Government will not want to discuss solely economic co-operation. Inevitably, political issues will come up. That is why I have given the assurance, and it is in respect of that that we take this risk, deliberately.

Mr. Lee

Is not the effect of this economically desirable approach likely only to be to fan the flames of the Argentine Government's pretensions to sovereignty? Is not the reality that the Argentine Government have not abandoned their claim to the Islands and that, whether my right hon. Friend likes it or not, this initiative is bound to give impetus to that claim?

Mr. Crosland

It is correct that the Argentine Government have not abandoned their claim to sovereignty, and they will not abandon it. The question is whether we should allow that claim to impose on us a position of total passivity. That does not seem sensible to me.

Mr. David James

Would the right hon. Gentleman explain to me, as someone who has lived and worked in the Falkland Islands, why it is proposed to drag our feet over the vital air runway decision, which is the key to the entire development in the future of the Falkland Islands? Do we have to seek the permission of the Argentine Government to lengthen a runway on British property?

Mr. Crosland

No, Sir; certainly we do not have to seek their permission. But Lord Shackleton made it clear in his report that the runway development—the airport enlargement—was needed for the sake of tourism, further fisheries development and major capital developments in the Islands, and that those capital developments in turn largely depended on co-operation with Argentina. That is the link. Certainly there is no question of its depending on the permission of the Argentine Government.

Mr. Kershaw

Would the right hon. Gentleman accept that, in spite of several references to the airfield, the position remains a little obscure, at least to me? Would he agree that the point of extending the airfield so as to allow international flights to places other than Argentina is a political rather than an economic problem?

Mr. Crosland

With respect, I think that it is a mixture of the two.

Mr. Jessel

Is there not great potential in krill, which have been increasing in numbers rapidly in the South Atlantic because of the slaughter of whales which used to feed on them, so that the balance of nature has been disturbed and they are now multiplying with great rapidity? Is that not a large potential source of foodstuffs for starving people in development countries, which could at the same time bring great benefit to the Falkland Islands?

Mr. Crosland

That is certainly the case, and it comes out dramatically from the Shackleton report.

To come back to the question which has underlain much of the discussion in the last half-hour, the potential for development around the Falkland Islands—not just with krill but with alginates and the blue whiting and other species of fish—is a basic reason that I do not think that we can simply go on sitting on our backsides and doing nothing about the political situation as well. It is that which supplies the impetus for some new initiative and move in the area.