HC Deb 12 December 1978 vol 960 cc586-621

8.49 a.m.

Mr. Robert Adley (Christchurch and Lymington)

The phrase that the Under-Secretary of State for Transport has just used—"stop dithering"—would seem an excellent text with which to begin my contribution to the debate. I apologise for raising the subject at this unusual hour, and I am grateful to the Minister for being here to answer. I hope that, as the debate has not come on until now, he has been able to get a little sleep in the intervening hours.

However, I do not apologise for raising the substance of the matter. I hope that the Minister has grabbed a copy of Hansard for 19th December 1975, in which he will see that I raised this subject on the Adjournment debate. That is almost three years ago to the day. In fact, it is now five years since I first took an interest not only in the subject of selling Harriers to China but in prodding Her Majesty's Government into making up their minds to get on with this important decision. It was, indeed, to a Conservative Government that I first went. This gives, I think, a little credibility to my claim for consistency on this subject, to which the Foreign Secretary kindly referred at Question Time the other day.

I hope that the Minister of State, when he replies, will make as agreeable a speech as the right hon. Gentleman the Member for Stockton (Mr. Rodgers), the present Secretary of State for Transport, did when he replied to my Adjournment debate three years ago. I hope also that, as a result of what has happened in the last three years, a lot of th hypothetical questions which I was then told I was asking can now be seen to be anything but hypothetical.

May I state first of all, Mr. Speaker, a number of simple facts? The Harrier is a unique defensive aircraft. China is not an enemy of the United Kingdom or of NATO. The sale of the Harrier would be good for employment in this country and good for our balance of payments. The question therefore arises, why are we dithering?

There are commercial arguments, there are strategic arguments, there are political arguments and there are practical arguments in favour of taking this course of action, but I presume that it is right that we should examine all four aspects, which I propose to do as briefly as I can.

I shall deal with the practical argument first. In the Adjournment debate to which I have referred, the then Minister of State for Defence, in answering my question as to why the Government would not pursue as quickly as possible negotiations for the sale of Harriers to the Chinese, said to me: The question is at what stage this interest can be considered sufficiently firm as to justify the Government taking it seriously. I hope it is accepted by all concerned that the Chinese have left Her Majesty's Government in no doubt whatever that they are ready to enter serious discussions at the earliest opportunity. I should be grateful if the Minister of State would confirm that when he replies to the debate.

With regard to the commercial argument, as I understand it the Government's attitude now is that they appreciate the commercial advantages of selling the Harrier to the Chinese but they want to delay the sale until they have achieved further commercial sales of non-military equipment to the Government of the People's Republic of China. In other words, they are using the Harrier as a carrot dangled in front of the Chinese in order to induce other purchases.

As someone who has in his past career been a director of the export division of a major British company and has had commercial dealings with people all over the world, I am bound to say to the Government that I find this a most unattractive way of trying to do business with the Chinese Government. In fact, I would go so far as to say that it is insulting, unbusinesslike and unwise. It is insulting particularly to the Chinese because it shows that Her Majesty's Government do not trust them. It is saying that we will not let the Chinese have the aeroplanes until they have done this, that or the other. With respect, that is no way to build up a lasting commercial relationship with people. It is unbusinesslike because it shows a lack of understanding of the methods of doing business with the Chinese.

It is unwise—I shall return to this in more detail later—because the Government must know, as I reminded the Prime Minister recently in a letter, that the Americans, in the guise of McDonnell Douglas, are busy building the Harrier under licence, under an agreement made by Hawker Siddeley Aviation with McDonnell Douglas. Certainly by 1982 the Americans will be in a position to sell the advanced Harrier to anybody to whom they want to sell it. There is, therefore, considerable unwisdom in allowing this situation to fester on indefinitely. That is the commercial aspect.

Again, the Minister will tell me if I am wrong, but the sale of the Harrier to the Chinese would be a question of selling aircraft each one of which is valued in excess of £3 million. As I understand it, the initial interest is in an order of 90 aircraft, with up to 350 being considered in the future. But, whatever the figures, and there is probably not much point in discussing this at great length, a large sum of money could be earned by this country from exports. I do not need to point out that we are talking about sales accruing to the nationalised air corporation.

I finish my comments on the commercial side by putting one thought to the House. What do hon. Members imagine would be the attitude of the French Government to this question if they were the manufacturers of the Harrier? Do we really think that they would have been dithering around in the way that our Government have been during the last few years?

I now turn to the strategic aspects of the argument. Again, I call in aid the comments of the then Minister of State in 1975. I cannot do better than take as my text the comments which he made when I raised with him the question of advanced technological sales to China. He said: we are prepared to consider requests for advanced technology from the Chinese as sympathetically as possible and that we are willing to meet them in the same positive spirit, provided this can be done in a way that is consistent with our own security interests and our obligations to our allies. Those comments were made by the Minister in the light of the fact that we had just sold them the Spey engine. It is perhaps worth repeating, especially when one is discussing the strategic aspects of this subject, that the Harrier is a defensive, close-support aircraft with an operational range of 100 to 200 miles. Flying in a straight line it could probably manage about 1,000 miles, whereas the distance from Peking to London is 5,073 statute miles.

I merely say these things in case anyone should ever suggest that there is a possibility that the Chinese might suddenly turn round and want to use the Harrier against NATO or Britain. The Harrier's range ensures that there is no possible NATO threat in regard to the use of the Harrier, whatever political upheavals might occur on the other side of the world.

I think that the root of the Government's indecision and unwillingness to come to a conclusion lies in something which happened 28 years ago—the establishment of COCOM, the committee of the Western allies which discussses what strategic items should or should not be sold to certain countries. The COCOM list compiled in 1950 still seems to me to be the "bible" by which the Government are deciding whether to proceed.

Perhaps it is worth reminding ourselves of the 12 countries on that COCOM list. They are Albania, Bulgaria, China, Czechoslovakia, East Germany, Hungary, North Korea, North Vietnam, Poland, Romania, Tibet and the Soviet Union. It does not take much working out to see which of those countries are members of the Warsaw Pact. It also does not take much working out to realise that the world has changed very substantially since 1950, and. not least, China herself has changed in attitude, atmosphere and international standing.

The one thing which the Chinese are trying to avoid doing is becoming social imperialists. They are desperately trying to avoid making the mistakes which they believe the Soviet Union made in its postrevolutionary development. Therefore, if China is to develop in the way in which the Government and people of that country wish to develop, she will need to be understood and assisted by the countries in the West and by the people in the Western countries, who take an interest in Chinese affairs.

The one thing that we should understand is that if the Chinese are to develop freely their own society in their own way, they will need an ability to defend themselves against the only real threat, and that is the threat which they face constantly from the Soviet Union. Therefore, the strategic argument seems to be very strong indeed, not in favour of doing nothing but in favour of doing something positive.

Although I did so in the Adjournment debate in 1975, as my hon. Friend the Member for Blackpool, South (Mr. Blaker) knows, I make no apology for again quoting the late Mao Tse-tung when he said: My enemy's enemy is my friend. I therefore believe that the strategic argument in favour of selling these aircraft to the Chinese is enormously strong.

I turn to the question of the Brezhnev letter. It was reported that Mr. Brezhnev had written to the Prime Minister that the Soviet Union would consider this sale an unfriendly act. The Prime Minister has refused to publish the correspondence, but the reports would have been refuted if they were wrong. It is monstrous that the USSR, this military mogul, with the largest forces that the world has ever seen, should say that that would be an aggressive act and perhaps sufficient provocation for his country to declare war on China. That is brazenly typical of the Soviet Union, behaving as the international bully. I hope that the Government will have none of it and will tell the Soviet Union that, whatever our changed role recently, British foreign policy is still made in Whitehall and not in the corridors of the Kremlin.

The political position of the United States should also be considered. Last week, Mr. Carter warned that the sale might affect SALT. A few years ago, in COCOM, the Americans opposed it on the slightly far-fetched grounds that China might supply the aircraft to North Korea, which might use them against South Korea.

But there would be a more significant reason for the unhelpfulness of the Americans. That is McDonnell Douglas. I said in the 1975 debate that in seven or eight years that company would be able to sell Harriers to China if we did not. Now the period is two or three years. The Minister of State said on that occasion: I do not deny that sometimes there may be a place for the hon. Gentleman's declared cynicism in this respect."—[Official Report, 19th December 1975; Vol. 902, c. 2028–31.] So this is not a figment of my imagination. Like the French, the Americans pursue their interests more rigorously than we pursue ours.

The final political consideration is the role of our NATO allies. The Government have said recently that they are consulting our allies. I have not been able to discover which allies they mean. From my private contacts, I know of no NATO member which has expressed reservations about this. Perhaps we should have specific information rather than general allegations. Which of our allies have been consulted and which, if any, have expressed reservations?

The then Minister of State, now Secretary of State for Transport, quoted in December 1975 an interesting article which had been written in the New York Times, and which I now quote back at the Minister: For China, the chief factor is seeking better relations with the United States, West Europe and Japan undoubtedly was the need for political support to counterbalance the Soviet threat. But it is now clear that a second reason for Peking's rapprochement with the West was to gain access to modern military equipment. This is a factor that many actually promote stability in the delicate triangular Soviet-Chinese-Western balance. The Minister of State immediately said at that time he would not necessarily dissent from that. Nor would I. I hope that the Minister of State would not wish to depart from anything that his right hon. Friend said three years ago.

What I was informed three years ago was a theoretical interest has now become a positive interest. I am asking the Government to assert the independence of our foreign policy, to make sure that within reason we will not do anything that will genuinely upset any of our allies, but to confirm that we are not prepared to allow our foreign policy to be dictated by the Soviet Union. Let us stop being wet.

I finish with eight straightforward questions. Will the Minister of State confirm that the Chinese have now formally expressed interest in the Harrier? Will he confirm that the Soviet Union has objected to this sale? Will he confirm that the People's Republic of China is not considered an enemy of this country? Will he confirm that the sale of the Harrier would he a boost to the British aerospace industry? Will he confirm that the Harrier is a defensive aircraft? Will he confirm that McDonnell Douglas is producing the Harrier under licence? Will he tell us which of our allies he has consulted? Will he please tell us what on earth we are waiting for?

9.2 a.m.

Mr. Roderick MacFarquhar (Belper)

I begin by congratulating the hon. Member for Christchurch and Lymington (Mr. Adley), not just on his longevity in this affair but on getting the matter debated on this occasion. It is clear that it is reaching a crucial stage after many years.

I shall take the hon. Gentleman up briefly on the way he began his remarks, when he very cleverly carried on at the point at which the previous speech had just ended and spoke about governmental dithering. There are questions to be asked about the speed at which British Governments have handled this matter. But we must also bear in mind that the Chinese have to some extent been coy. Both sides have been shadow boxing. The Chinese have not wanted to ask, for fear of rebuff. On the other hand, the British Government were not going to get themselves into a lather, consult their allies, and get the industry excited, only to find that the Chinese had decided to buy some other aircraft or did not want to buy weapons from the West.

Therefore, one has to be balanced in this matter. The Chinese have been coy. I have told them that on occasions. It will be very useful if the Minister of State will confirm that on his recent visit the Chinese Vice-Premier made a formal request for Harriers.

Three main questions remain to be dealt with. First, should we sell Harriers to the Chinese? The hon. Member has referred to the enormous changes that have taken place in China's attitude towards the world in general and the West in particular in the 20 years or so since we were fighting Chinese troops in Korea. It is important to emphasise that there has been a change, and by no stretch of the imagination can we consider China to be an enemy.

There are two major reasons for saying that we should sell arms to China. The first is the question of the trade implications. The figure I have seen bandied around may be no more accurate than that given by the hon. Member for Christchurch and Lymington. That figure is about 70 aircraft, which at £3.5 million each adds up to about £250 million in the first tranche.

The question then arises: what further trade shall we do with this aircraft? The generally accepted wisdom is that the Chinese would then want to manufacture under licence. That may pose some problems for our allies, to which matter I should like to return shortly. But, quite clearly, we have the possibility here of several hundreds of millions of pounds of business, and that is just not something that the Government of this county, whatever their political complexion, can lightly turn down.

I come secondly to the global implications—or "strategic-political" implications as the hon. Member called them. I would argue that the dispute between China and the Soviet Union is the greatest windfall that has occurred to the West since the foundation of the People's Republic of China in 1949. That event in 1949 seemed to suggest to what is now called the Third World that the tide of Communism was moving irresistibly forward. Another 600 million people had been added to the Communist banner, and it seemed that nothing could stop the relentless advance. There were uprisings in various places in Asia, and it seemed that it was "China today and other parts of Asia tomorrow ".

As a result of the Sino-Soviet dispute, the whole political status of the Communist world has changed. It has become apparent to the rest of the world that Communism can be divided into two like anything else and that, rather than being one irresistible tide, there are two great nations, the Soviet Union and China, which have very divergent policies. They may call some of the things that they do by the same names, but actually they are very different. In terms of State-to-State relationships, there can probably be no greater hostility in the world today than that between China and Russia.

I do not think that anyone in this Chamber would want actively to connive at any hostilities between China and Russia. That could do no good to anyone. What I think we can say legitimately, however, is that this political advantage, in so far as we are able to effect it—I shall come to that shortly—should not be lightly thrown away. It is surely in our interests in the West to encourage China in a stance which represents friendship with the West and represents a divergence from the Soviet Union and thus an ending of the myth of Communist invincibility.

I remind the Minister that China will not maintain that stance without some slight encouragement from the West. Looking back at the 1930s,' there can be no question but that the Soviet Union was looking to the West for support in its expected struggle with Nazi Germany. The Russians proclaimed at that time that peace was indivisible. There is also no question but that the West responded very badly to those initiatives because of its suspicions of the Soviet Union. As a result of that suspicion and that restraint on the part of the West, what happened was that the Russians eventually decided to cut their losses and make their peace with Nazi Germany.

One can stretch parallels too far, but I would suggest that there is a possibility that, if China were to decide that the West had no real interest in dealing with it and was not able to stand up for itself against the Soviet Union, China might also decide that it had to cut its losses and that, while not going back to the old alliance that it once had with the Soviet Union, it would at least make its peace with Moscow. That would mean the throwing away of this immense diplomatic advantage about which I have just been talking.

I would add that China's foreign policy, of course, will not be dictated by London, or Washington, or Paris, or Bonn. What we can do is to have an effect upon the decisions that the Chinese make.

Referring back to the origins of the Sino-Soviet dispute, we see that Western policy can have a tremendous effect on relations between Russia and China. In 1959–60, when that dispute first emerged into the open, the West blunderingly, not knowing what it was doing, by applying different policies towards Russia and China, caused great unhappiness in Peking because of the Russians' attitude towards America. As a result, the Chinese began to rethink their attitude towards Moscow. The Americans, under the leadership of President Eisenhower and John Foster Dulles, were antagonistic towards China but were beginning to show an opening towards Russia. When Russia began to move towards that opening, the Chinese felt that they had been betrayed. That feeling of betrayal started the Chinese to rethink their position, and that led to their extraordinary reversal in attitude towards the West which we have recently seen. Western policy can affect Chinese policy. Therefore, it is essential that we encourage China in its more hopeful stance towards the West.

What attitude should we take towards the Soviet Union? The Government are keen to support a policy of detente towards Russia. We should not use the sale of weapons to China as a provocative "China card ". While we are not going to seek friendship with China because she is Russia's enemy, equally we should not eschew friendship with China because she is Russia's enemy.

I agree with the hon. Member for Christchurch and Lymington that British policy cannot be dictated from Moscow. I beileve that Mr. Brezhnev was ill-advised by his British experts when he sent his letter to my right hon. Friend the Prime Minister. If it contains the wording which leaks in the press have suggested, no British Government would be likely to fall in with the threat. Indeed, they would be more inclined to do the opposite.

If we should sell Harriers to China, how should we go about it? The first thing to be said—here we return to the hon. Gentleman's argument about dithering—is that we should do it soon. One can level the charge that there has perhaps been unnecesary delay, but the more important reason is that in all their peregrinations, with many Ministers going all over the West in the past few months, the Chinese have clearly been shopping around. They have been making many investigations, and they are about to place the orders for a vast number of contracts for industrial goods and defence equipment. If we dither now, if we are not to start looking lively and set about selling the Harriers to the Chinese now, the time may well be gone.

We should of course consult our allies. I shall be interested in the answers to the hon. Gentleman's questions about how we have been consulting them. Clearly, we must consult them. Even though the Harriers are certainly defensive, selling equipment of this type to China is not something that can be lightly undertaken.

The hon. Gentleman made some play with American opposition and suggested that in so far as it existed it was largely due to commercial considerations. I am not so sure about that. I should be more inclined to put my money on another fact that he mentioned —the worry about progress with the SALT talks. It is an open secret that there has been some division within the American Administration about whether it was a good idea for Western nations in Europe—not America, because she has said that she will not do it—to sell defensive equipment to China.

One school of thought seems to be that, if the Soviet Union is angered by this, SALT II might be irreparably damaged. My own feeling is exactly the opposite, that, while the Russians may huff and puff on this matter, greater closeness emerging between China and the West is far more likely to make the Russians decide to repair their fences with the West and therefore proceed with SALT FL rather than the other way round.

What is clear is that President Carter himself has taken a decision. I had the privilege in June of attending a conference at which he spoke, and I asked him the question directly. He has decided that we, the Europeans, may sell defensive weapons to China and that the United States has no objection in principle provided that it is consulted. I feel able to say that the President said that, because although he said it in a private meeting it was leaked to the press the next day, so I am not divulging any confidences.

However, we shall need to give the Americans an explanation on the question of the transfer of technology. There may be some concern that whilst it is all right to sell aircraft it may not be all right to sell the technology so that the Chinese themselves can manufacture them. There is a feeling in the United States that the Harrier is a very advanced aircraft, what the Americans call "a state of the art" aircraft, and that we should be transferring a major new technology to the Chinese. That might worry the Americans.

The correct answer is to say that what is called in the jargon the "cooking" Harrier has been around for so long that the advantages that we have in being able to make it will soon be lost, that it will be not only McDonnell Douglas but others who will soon be able to make it, and that we are not really transferring anything very advanced at present.

If there is still any dissension within the American Administration on this matter, behind the President's open acceptance of the idea of European sales of defence equipment to China, our consultations must be at Prime Minister to President level so that we can clear the lines and see that there are no hiccups in the sale's going forward.

From the point of view of helping the Americans not to be embarrassed in any way domestically, it might be a good idea to consider not totally avoiding COCOM but certainly modifying the way in which we use the COCOM procedures. If there were full formal consultation on the matter, the Americans might well be embarrassed.

The hon. Gentleman did not mention Japan, the ASEAN countries, India and the South Asian countries generally. They also have an interest in what China is doing. We should consult the Japanese, who anyway are members of COCOM, India in particular, which in the past has fought China on the border, and the ASEAN countries. We do not have to regard their opinions as being as binding as those of our closest NATO allies, but they must be consulted. I am happy to say that my researches suggest that no major obstacles would be put in the way by Asian countries.

However, if we are to sell, we might want to think of certain safeguards. The Americans are worried about Formosa, but it is almost ridiculous to think that the Chinese would want to use Harriers against Formosa. They already have aircraft which would be far more effective against it. Some people have expressed a worry that the Harrier could be used by the Chinese to provide a defensive screen for Cambodia—in other words, it might be used abroad. There are many hon. Members who would not approve of the way in which the Cambodian regime operates and the way it treats its people. The idea of the Chinese defending that regime against a possible Vietnamese attack with Harriers has caused some colleagues in the House some concern.

We have to bear one thing in mind, namely that, however reprehensible the Cambodian regime is, the Chinese have every right to support the idea of Cambodian independence of Vietnam. Having said that, there should not be any great difficulty for the Minister, or his colleagues who may eventually sign a deal with the Chinese on the Harrier, in stipulating that it should be used within Chinese frontiers.

What should we try to get out of this deal? I have mentioned some of the political and strategic advantages of it. I take issue with the hon. Member for Christchurch and Lymington, who said that it was unbusinesslike and insulting to the Chinese to say that we would not sell them Harriers unless they bought other things as well. The Chinese are very definitely in the package deal market at the moment. They are going round the Western world talking in terms of the four modernisations—agriculture, industry, science and technology and defence. It is clear that they see their deals with various countries as partaking of all those four modernisations.

With a country such as Britain, which has defensive weapsons to sell which the Chinese want to buy, I see no reason why we should not hammer out a deal which would include a large amount of industrial sales too. I welcome the reports that we are to conclude a £5 billion deal over seven years with the Chinese. The hon. Member for Christchurch and Lymington mentioned the French. I am certain that the one thing the French would do would be to insist upon a package deal. They are very good at insisting on that kind of package deal. I would certainly suggest to the British Government that we should emulate the French. To take up another point mentioned by the hon. Member for Christchurch and Lymington, what we have to look at is the long-term effect of our relationship with the Chinese. Putting aside the question of the Sino-Soviet dispute for the moment, what is absolutely clear is that sooner or later this vigorous nation of 900 million people will become a great Power. Whether it becomes a super Power is a matter of terminology and of the meaning of the phrase "super Power" in Chinese thought. It will be a Power in commonsense terms. As it becomes a great Power in the course of the next 30, 40 or 50 years, its leaders will look back and ask "Who helped us? Who decided to stand aside from this tremendous enterprise?" I would prefer the thought that in the twenty-first century, when China emerges as one of the two or three decisive nations in the world, its leaders should be thinking that Britain, among other nations, was prepared to help at a decisive turn in Chinese development.

9.24 a.m.

Mr. Hugh Dykes (Harrow, East)

I shall intervene only briefly in the debate because it would be wrong to make a long speech at this hour when the House is keen to make rapid progress. I apologise to the House for having got the timing of the debate slightly wrong. I hope that my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) in particular will forgive me in that I missed part of his opening remarks.

I congratulate most warmly my hon. Friend the Member for Christchurch and Lymington on his initiative and tenacity in waiting throughout the night for this debate, enabling him to launch this theme. If I may embarrass my hon. Friend by flattering him too much, may I say that I believe that this is one of the most important subjects to be debated on the Bill? The debate provides an opportunity for the Government to show some energy and initiative in responding to the overtures being made by the People's Republic for the purchase of Harriers and to get going with some firm orders as soon as possible. That is the plea I make, along with others present in the Chamber today.

The hon. Member for Belper (Mr. Mac-Farquhar) is a great expert on China, and the whole House listens with respect to what he says because of his detailed knowledge of that country. He was right to say at the end of his speech that the Chinese will in the future look back and say "Which were the countries prepared to be realistic and co-operative with us, entirely without any political conclusions therefrom, in our critical take-off stage of development in respect of all sorts of goods and services, and in armaments as well? "

I believe that the old-style equation regarding China as a menacing Power in the Far East has now been dispelled, to the satisfaction of most expert opinion in the West, and, therefore, that this need no longer concern us in respect of such a purchase as this. We have here a great opportunity for the country to take advantage of sales to a foreign Power, within the full ambit of security from our point of view, which will, I think, boost the production and, therefore, the productivity of the enterprises concerned with a most amazing aircraft.

One cannot too often pay tribute to the amazing qualities and scope of this unique aircraft. It is worth recalling that the United States Marines themselves prevailed upon the American Government, the most difficult possible customer for purchases of foreign armaments and aircraft, to make their own purchases of Harriers. Of course, while we should have liked them to carry on purchasing all from this country, they are manufacturing under licence, which is a great tribute to the technology of the people concerned. It is a unique aircraft. I believe that it will remain unique for many years ahead, and it has a special role which fits in very well with the Chinese requirements, as I see them, for self-defence purposes.

That is why hon. Members throughout the House, and especially on these Opposition Benches, are impatient and anxious that these orders should materialise as soon as possible. It is understandable that it takes time to work out all the parameters and modalities of complicated overseas defence orders. That is always understood. There is always a tailoring of requirements for any purchaser overseas, especially in the case of a complicated high-technology armaments and flying system such as the Harrier.

Nevertheless, subject to all those understandable and inevitable delays—there is no criticism of the Minister on that account—we on these Benches wish the Government to proceed as fast as possible. We regret the signs of vacillation and hesitation—even slowness, which may be just part of the traditional bureaucracy of the present Government and I hope is nothing more—and we want them to proceed now as fast as possible.

I conclude with this thought which, I think, fits into the whole debate in geopolitical as well as in long-term strategic military terms. We know—this is one of the reasons why we rather like the Chinese at the moment—that the People's Republic of China is very pro-Europe. We have our own reasons for knowing why the Chinese are enthusiastic, but I think that it goes beyond that. I remember that when I made my own visit to China some years ago, in company with my hon. Friend the Member for Christchurch and Lymington, the Chinese took a genuine and detached interest in the development of Europe for its own sake.

Of course, they were keenest on it for obvious reasons which I need not spell out today, but they took that detached interest in how both the Community and Europe as a whole—the wider entity of Europe, the comity of Europe—were developing perhaps as one kind of grouping ". I put the word in inverted commas. That was remarkable because the Chinese in those days, although they have begun to come out into the open world now, had always been extremely introspective and not, with respect to them, very interested in much that was going on in the outside world.

That was fascinating, and I think it relates back to aircraft in general and military aircraft in particular. It is sad and chastening for us to look back over the past 10, 15 or 20 years and see the succession of lost opportunities on the European scene in aircraft development and technology, and in sales too. We have seen it with civil aircraft. I think it ludicrous that we have the competition between the TriStar and the airbus, for example. We have seen what is happening to the new generation of civil aircraft and the inevitable transatlantic tussles which are taking place, wastefully and tragically, without the necessary concerted development of a European civil aircraft.

In military aircraft, too, we are, I think, only a few years from the time when Canada will have to place a definitive order for the new all-purpose weapon to replace the existing American ones in Canada. We are only a short time from that in defence ordering terms. In the European theatre, too, we still see the need for a proper rationalisation and concerting of effort and development to give us one or a number of basic European military aircraft models. The Harrier fits deliberately and specifically into that context. There is no reason why the other European countries should not support us in the development of the Harrier on the European scene as well. If the Minister will refer to that aspect, I shall be grateful.

9.35 a.m.

Mr. James Lamond (Oldham, East)

I apologise for not being here at the beginning of the debate although I am very interested in this subject. I would like it to be known that there is at least one Labour Member who objects to the sale of the Harrier to the Chinese, and possibly there are several hon. Friends who agree with me, although I have not discussed it with them.

I agreed with many of the points made by my hon. Friend the Member for Belper (Mr. MacFarquhar), in particular when he said that there is no doubt that within the next 30 or 40 years the Chinese People's Republic will emerge as probably the greatest world Power. On numbers alone, the Chinese must claim a place among the great Powers, and there is a great deal to be admired in their history, in what they have achieved, in their culture and in many other aspects of their life.

The tragedy, I believe, is that we are trying to show our friendship for the Chinese, perhaps, or to develop our trade with them, by selling them arms. I would be 100 per cent. behind the Government if we were trying to sell them socially useful goods that would be a benefit to the people of China and would strengthen our friendship with them, but I am afraid that the things we are selling them may at the end of the day not help to further our own cause of friendship with the Chinese or peace in the world.

I met the Chinese ambassador to the United Nations when I was in New York during the recent special session of the General Assembly on disarmament. I had a talk with him about the speech that the Chinese Foreign Secretary delivered at that session. I am sure that hon. Members who are interested have read it.

That speech by the Chinese Foreign Secretary was very frightening for someone who lives in Britain, because he really said that war between the Soviet Union and the United States was inevitable. He did not go into details of the results of such a conflict, but those of us who are interested can imagine what those results would be on the economies of both countries and on our own country, where the destruction would be terrible.

I wonder whether the Government are doing the right thing—believing as they do, obviously, that there is a permanent rift between the Soviet Union and China —in encouraging the Chinese in the hope that the Soviet Union will be frightened by that, perhaps, and will be afraid to go to war. I do not believe that the Soviet Union wants war any more than we do.

Mr. Adley: Will the hon. Gentleman confirm that he believes, as I do, that the essential difference between China and the Soviet Union in their policies is that the Soviet Union is holding down the peoples of Eastern Europe by force while China is trying to tread a different path? If the hon. Member accepts that proposition, will he relate it to this discussion?

Mr. Lamond

I accept that the two countries are treading different paths, but I must say that I have some reservations about what is happening in Cambodia. I do not accept the press reports about the Vietnamese invading Cambodia and about the Chinese coming to Cambodia's support. I have read reports of what happened in Cambodia after the revolution. They were appalling to read. I am sure that that feeling is shared by many other hon. Members.

I wonder how realistic it is for my hon. Friend the Member for Belper to say that we could sell Harriers to the Chinese with the reservation that they must be used only within the Chinese borders, and so on. It would be very difficult to lay down such conditions after the aircraft had been sold. In fact, I doubt whether the Chinese would accept such restrictions.

I believe that this sale of Harriers to the Chinese must set back the disarmament talks that we have been pursuing with the United States, the Soviet Union and other countries. The talks were the subject of a forceful speech by my right hon. Friend the Prime Minister at the disarmament session of the United Nations to which I referred earlier. He placed great emphasis on the talks, and I fear that there will be a serious setback to them if we go ahead with this sale.

9.41 a.m.

Mr. Alan Clark (Plymouth, Sutton)

I apologise to the House for this intervention after my rather late arrival in the Chamber. The only point that I should like to make, and in so doing I congratulate my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) on the tenacity and consistency that he has shown in pressing for this sale, is that when the House approves the sale of the Harrier to China this should not be taken as general approval for a more comprehensive and continuing rearmament of China by the industries of this country and of Europe.

I say that as one who has often argued for the reduction of defence expenditure by subsidising it through sales and exports of armaments. I say it simply because, if I might adopt the phrase used by my hon. Friend the Member for Harrow, East (Mr. Dykes), in a geopolitical sense I regard this as being very much terra incognita and something that we should look at very carefully indeed.

The Harrier is a defensive weapon and its sale in limited quantities is justifiable in overall strategic terms. Indeed, it will probably be a stabilising element in the overall balance of armaments in the Far East. But already there are rumours that, for example, the possibly aborted order for the "Shir Iran" Chieftain may be diverted to the Chinese. Although the right hon. Gentleman has assured me in answer to a Parliamentary Question that these had already been paid for and therefore it is not a matter of desperation to whom they should be sold, I should nevertheless regard sales of that kind as something which the House should consider carefully.

I say that because we have to rid ourselves of the first flush of optimism about the change of direction in China and its avowed friendship with the West and with Europe and see it in power-political and world power-political terms, and look at the same time at the nature of the regime in China. It always used to be a kind of cynical joke in the 1950s that if one were a pessimist one taught one's children Russian. but if one were a realist one taught them Chinese.

As the hon. Member for Belper (Mr. MacFarquhar) said, within 50 years the Chinese will be by far the largest and undoubtedly the most powerful country on the globe. This is much more significant to the Soviet Union than it is to us. The Russians remember their own exploits in the Great Patriotic War. They remember how, when attacked by a more militarily competent but smaller Power, they wore it down by sheer numbers and by the advantage of space. The Russians realise that if they are involved in any form of nuclear conflict they will be so weakened that they will be open to invasion or pressure along their enormously long land frontier from a country which greatly outnumbers them and which, in the long term, may well overhaul them in both military and economic terms.

That is why I feel that overtly to alter the balance of power and armaments on that Eastern frontier is a matter which should be approached delicately. Certainly, a stabilising measure is desirable, but if Western Europe is seen to be accelerating the rearmament of China, it can only be interpreted by the Soviet Union as an excuse for still further raising its own level of armament spending. We know that there are contingency plans in Soviet military circles and they may even decide to stage a pre-emptive strike against China before that process goes too far.

It must be the prime purpose of the West to reduce the overall spending on armaments by the Soviet Union because, given the nature of our two societies, the Russians can always spend more than we can.

Mr. Adley

Is not my hon. Friend pursuing the rather dangerous argument that it is in the West's interests to see that the Chinese are kept as weak as possible so that the Soviet Union does not have an excuse to rearm? The Soviet Union does not need excuses to do anything. It will do what the hell it wants.

Mr. Clark

My hon. Friend has expresed in rather simplistic terms the argument that I have tried to moderate. It is in our interests to help the Chinese to maintain a balance, and the sale of defensive equipment, among which the Harrier is pre-eminent, is desirable. I caution the House against approving a general rearmament of China by Western technology, because I have no doubt that the Soviet Union would regard that with great alarm and that those who argue in its councils against its innate caution in military adventurism would be encouraged, possibly, to take more serious measures and that that would lead to a still further increase in Soviet spending on armaments.

History has always shown that the greater the volume of armaments available at any one time, the more likely it is that, ultimately, they will be used. I know that these may be misrepresented as arguments of appeasement, but my record and what I have said in the House will defend me against that charge. If we show by our deeds that we intend to stage a full and progressive rearmament of China, which is a repressive, authoritarian and, in my view, only transiently friendly regime, we shall be taking serious risks with the world balance of power and doing so in possibly the most sensitive area in the world.

We have had an effective balance which has maintained peace for the past 30 years. To disturb it by a major strategic alteration of emphasis at this moment would be highly dangerous.

9.49 a.m.

Mr. Peter Blaker (Blackpool, South)

I, too, wish to congratulate my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) on raising this subject and on his consistency. The debate has shown from the interventions of, for example, my hon. Friend the Member for Plymouth, Sutton (Mr. Clark) and the hon. Member for Oldham, East (Mr. Lamond) that much wider implications are involved in the sale of Harrier aircraft to China than the jobs that will be created or the benefits to our balance of payments.

I agree with the view that we should not rebuff the desire that China is showing for a closer relationship with the West. This is a promising development and it is of enormous importance. Our reaction in the West to China's overtures to us is one of the most important issues in foreign policy.

The economic implications are considerable. Let us assume that 90 aircraft are involved in the proposed purchase. That figure has been mentioned in the press. I am told that 3,000 jobs will be produced on the construction of the airframe alone. Each sector of the aerospace industry will be involved in manufacturing the various parts for those aircraft. It is probable that the relationship which we would establish with the Chinese Government would continue for up to 10 years. That relationship will be of benefit and make it more likely that we sell other goods to the Chinese.

It is possible that we shall license the Chinese to manufacture further Harrier aircraft themselves. That would help our balance of payments. It is possible that we shall be able to sell further defensive arms to the Chinese. The dangers to which my hon. Friend the Member for Plymouth, Sutton referred are remote at present. I see no harm, only advantage, in the sale of defence weapons such as anti-tank missiles to the Chinese.

The hon. Member for Oldham, East said that we should sell only socially useful goods to China. What China considers to be socially useful might not be what the hon. Member regards as socially useful. The Chinese think that the Harrier is socially useful since they regard it as necessary to preserve their independence and way of life.

Of course, the hon. Member is really talking of civilian goods. But if we were to rebuff the Chinese desire to buy the Harrier from us our prospect of selling civilian goods to China would be damaged significantly.

My hon. Friend the Member for Christchurch and Lymington referred to indications that the Government might try to make a package deal incorporating the Harrier and large quantities of civilian goods. The Foreign Secretary made a statement in the House on 22nd November and the Prime Minister made a statement on 16th November which suggested that that is the Government's intention. It would be useful if the Minister of State would tell us whether that is what the Government plan to do.

I can see the merits of a package deal. Such deals are nowadays a popular way of doing business. But we should be cautious about giving the Chinese the impression that we shall sell them the Harriers only if they agree to a large package deal involving civilian goods. It might be better to be forthcoming about the Harrier deal and not to tie it to other issues. In the end we might that way sell more civilian goods.

The scope for the sale of civilian goods is large. In March this year Chairman Hua announced a large development programme. He said that the intention was for China to double its coal and steel production by 1985. He listed 120 new projects. Some of the projects are very big indeed—for example, 10 iron and steel complexes, 30 power stations, six new trunk railways, five key harbours and 10 new oil fields. These are projects of enormous importance.

Mr. Alan Clark

The Chinese are extremely short of foreign exchange and one wonders how all the orders will be paid for, especially if there is to be simultaneous over-heating, as we call it in the West, of the internal economy. It may be that they will find that the Communist system is not well suited to dealing with that problem. It may be that they will have difficulty in paying for some of the orders that they have placed and that we shall fund them ourselves.

Mr. Blaker

Inability to honour commitments has not so far been a characteristic of the Chinese. I think that my hon. Friend will agree with that. I am not an expert on the Chinese economy—it is difficult for anybody in the West to be an expert on that economy—and there must be a risk that the Chinese will over-extend themselves. That is a matter that is in their control rather than in ours. But deals are now being signed up with the Germans, the Americans and other countries. If it is true that China's foreign exchange resources and credit resources are limited, that is an argument for getting a move on with the Harrier project and with our other sales to China and not allowing delay.

Mr. James Lomond

I am interested to hear of all the possible developments within the People's Republic of China. I certainly hope that we get our share of the developments. Would the hon. Gentleman be in favour of the Prime Minister, for instance, going to Peking and negotiating an extended line of credit, perhaps extending over a number of years, at suitable rates of interest, with the Chinese Communist Government?

Mr. Blaker

I recognise what is in the back of the mind of the hon. Gentleman. He knows of my interest in the deal that the right hon. Member for Huyton (Sir H. Wilson) negotiated with the Soviet Union in 1975 and the criticism that I levelled at it. I am not sure whether it is best for Prime Ministers to negotiate such deals, but if such deals are to be made it is better to make them with a country that is not openly hostile to us and does not profess to be dedicated to our overthrow than with one that is so dedicated and openly says so.

My hon. Friend the Member for Plymouth, Sutton referred to the caveat that we must enter—namely, whether China has the resources to carry out a programme of the magnitude that I have described. Whether China is able to carry out all the enormous projects that are planned or whether it is not, it is clear that there are great opportunities to be seized by Western countries.

Under the new dispensation China has decided to modernise. It needs the West in order to do that. It cannot rely on the Soviet Union, partly for political reasons and because the Soviet Union does not have the resources or the advanced technology to meet China's needs.

Mr. Adley

If we are considering these matters in global terms, is it not important to recognise that the three trading blocs with which the Chinese see themselves negotiating are Japan, America and Europe? Should we not, as my hon. Friend the Member for Harrow, East (Mr. Dykes) has said, take advantage of the fact that the Chinese regard relations with Europe as a matter of great importance? Is it not right that, apart from normal trading considerations between China and America, China and Japan and China and Europe, the Chinese add to that equation their wish to im- prove their relations with Europe specifically?

Mr. Blaker

My hon. Friend is right.

There is the opportunity to build a lasting relationship with China, which has its implications not only for our economic prospects but for our political prospects. The Chinese have a mutual interest with ourselves in the West in security. The advantages of taking a rapid decision to sell the Harrier to China are significant. I would have expected a greater display of urgency from the Government than we have seen so far. They give the impression that they are dragging their feet. I hope that the Minister of State will explain the delay when he replies

On 21st November the Secretary of State told the House that the details of the Chinese requirement had only just become known. That is true only in the most literal sense. We have been talking to China for years. Certainly the British aerospace industry has been talking to China for a long time. Therefore, there must be a pretty good knowledge of what the Chinese want.

What are the possible objections? Of course we need the consent of our allies. The impression that I get from reports of the recent NATO meetings is that our allies, or most of them, will not object. On 7th December the Daily Telegraph reported that our allies at the NATO meeting expressed reservations but not objections. The United States Secretary for Defence said that his country had no objections to the sale of defensive weapons to China. Even though there were reservations, the atmosphere was favourable. Why have the Government not pursued this matter in the past? Why are they only just exploring the reactions of our allies? They could have sounded them out long ago.

It has been reported that the United States Government are worried about the effect of the sale on the SALT negotiations. I hope that is not the case. The SALT negotiations are important, and I hope that a satisfactory agreement can be reached before long. It must be a satisfactory one, as it is possible to imagine a SALT agreement which would do harm. However, it would be unwise to assume that an agreement is just around the corner. We have been told that for months, if not years. It may be a long time still before such an agreement is concluded. If we hold up the sale until the agreement is concluded, we might lose it altogether.

It is unlikely that the Soviet Union, whatever it may say, would refuse to sign a SALT agreement simply because of the sale of Harriers to China. We are all familiar with the Russian technique of bluster and bluff in order to stop Western countries from doing anything against Soviet interests. Indeed, I agree with the hon. Member for Belper (Mr. MacFarquhar) that the Russians are on balance more likely to sign if we sell the Harrier than if we hold up the sale.

Mr. Brezhnev's letter to the Prime Minister is in the tradition of Russian bluff and bluster. It would be most undesirable if the Government were to back down on their intentions because of it. The effect would be to strengthen the voices of the hawks in the Kremlin. We had the example recently of the enhanced radiation weapon, commonly known as the neutron bomb, and there was a carefully orchestrated Soviet campaign against that. To my regret, the West decided not to go ahead with its production. That was an unfortunate decision to take. If we were to back down on the Harrier sale now, in face of further Russian indications of disapproval, the danger would be increased.

It is said by some that the sale of the Harrier would involve a danger to détente. This argument shows a misunderstanding of what détente means to the Russians. It is not a present by the Russians to the West. It is something of great advantage to the Soviet Union. The Soviet Union hopes, among other things, to obtain a great deal of technology and credit and grain from the West as a result of détente, and these it is indeed getting. The Russians will not put these things at risk by upsetting détente simply because of the sale by Britain of the Harrier to China.

It was implicit in what the hon. Member for Oldham, East said—

Mr. Michael Hamilton (Salisbury)

On a point of order, Mr. Deputy Speaker. Are you able to explain to the House why the Government Chief Whip and Deputy Chief Whip have suddenly appeared in the House at this hour?

Mr. Deputy Speaker(Mr. Oscar Murton)

The Chair has no knowledge of that at all.

Mr. Blaker

No doubt they are interested in the debate, Mr. Deputy Speaker.

It was suggested by the hon. Member for Oldham, East that the Russians might genuinely be afraid militarily if we were to sell the Harrier to China. I cannot imagine that they have any legitimate reason for fear. The Russians have over 40 divisions on the frontier with China. The imbalance in favour of the Soviet Union on that frontier is enormous. This is also relevant to what my hon. Friend the Member for Plymouth, Sutton said. We have a very long way to go before there is a danger of any capacity on the part of the Chinese to launch an attack against the Soviet Union.

The Harrier, as other hon. Members have said, is a defensive weapon. It has a short range and it is slow, but the Harrier happens to be particularly suitable for China with its lack of airfields and with the Harrier's capacity for an anti-tank role, its capacity for a spotting role, and its value in a guerrilla warfare role.

Another fear is that the West will build up China economically and militarily and that China in the end will turn out to be a danger to the West, although perhaps not until the next century. Here I agree with the hon. Member for Belper that when China has built itself up—it will certainly do this, whether we sell Harriers or not and whether we help to modernise China or not—it will be better from our own point of view if China regards Britain, and, indeed, Western Europe, as one of the areas which have helped it to achieve its modernisation than if we appear to have rebuffed its efforts.

I hope that, if there are still objections from our allies, the Government will do their best energetically and urgently to dispel them. I regard the COCOM system as a valuable system. I hope that the Government will not do anything to destroy it. But I think that a very strong case exists for treating China differently from the Soviet Union inside COCOM.

I believe that the Harrier deal has become the touchstone of our relations with China. The Chinese have made it clear that they wish to have the Harrier. If we sell it to them, much will follow to our advantage, both economically and politically. If we reject their desire to have it, the consequences will be bad, both economically and politically. For one thing, the Chinese will not readily accept such a loss of face and, after all, they were the people who invented the concept of the loss of face. I hope that the Government will put themselves in a position to take a decision to sell the Harrier, and to sell it soon.

10.9 a.m.

The Minister of State, Ministry of Defence (Dr. John Gilbert)

I congratulate the hon. Member for Christchurch and Lymington (Mr. Adley) on raising this subject this morning, not only because of his own well-known and long-held interest in the matter but because it gives me the opportunity to put the question of the possible sale of Harrier aircraft to China in its proper context.

In recent months there has been a tendency for the Harrier issue to assume a disproportionate significance in our overall relations with China, and this has been reflected both in the press and from time to time in the questions asked in this House. While this interest reflects the undoubted importance of the issues which are raised by the prospect of such a sale, it tends to obscure the fact that the revival of active Chinese interest in the Harrier has taken place in parallel with, and, indeed, is closely connected with, the deepening of our relationship with the People's Republic over a whole range of areas in recent months.

Of course, hon. Members will be aware that it is the Government's policy, as it has been of all previous Governments, not to discuss the details of individual sales or potential sales of military equipment. There is nothing sinister or new about this. The negotiations which take place between a foreign Government and a British defence equipment supplier are, quite properly, a matter of commercial confidentiality between the parties involved. This is equally the case with the possible sale of Harriers to China as it is with other potential sales to China or, indeed, to any potential customer. I therefore wish to make it clear at the outset that I am not able to discuss the details of the proposed Harrier deal or of the progress of the negotiations.

The Government are naturally well aware that China's modernisation programme includes defence, and we have made it clear that we are prepared to help the Chinese in this area, as in her other three modernisation programmes which have been mentioned in the debate. My right hon. Friend the Secretary of State has announced that we are prepared to respond to Chinese interests in British military equipment. We take into account the usual political, strategic and economic criteria and our international obligations.

We are certainly in principle willing to supply some defensive equipment to china, but we do not wish to become solely a supplier of military equipment. We hope that the various aspects of our relationship with China—political, trade, cultural and defence—will keep in balance and that any defence sales will be part of a wider trade relationship.

Our general policy on defence sales to China applies as much to the Harrier as to any other item of military equipment in which the Chinese have displayed an interest. During Vice-Premier Wang Chen's recent visit to the United Kingdom, he gave us much clearer and more precise information about the Chinese interest in the aircraft. Indeed, it was only during that visit that Chinese interest in the Harrier was confirmed.

We are carefully considering the information which Vice-Premier Wang Chen gave us against the background of our general policy, which I have already indicated. We shall reach our final decision on whether or not we can supply when we have been able properly to weigh the many issues involved.

Mr. MacFarquhar

Of course, the Government cannot take a decision until they have weighed every consideration. However, can my right hon. Friend tell the House whether they are likely finally to reach a decision within the next month or two?

Dr. Gilbert

I am always hesitant about giving deadlines to my colleagues, but I can assure my hon. Friend that there is no unnecessary procrastination on the part of the Government and that there will be a decision shortly.

Mr. Adley

Will the right hon. Gentleman amplify these outstanding considerations?

Dr. Gilbert

As I have already said, I cannot go into the details of the negotiations. I made that clear a few moments ago. The hon. Gentleman will have to possess himself with patience. Matters are moving, and the hon. Gentleman is clearly aware of that. There is no sign of discontent on the part of the Chinese in regard to the speed of the negotiations. I ask the hon. Gentleman to take that from me.

I have already mentioned our international obligations and the need for us to consult our allies. Hon. Members have mentioned the co-ordinating committee, consisting of the NATO countries less Iceland plus Japan, which monitors exports of strategic equipment to Communist countries. The United Kingdom continues to maintain its commitment to COCOM, and for this reason we are obliged to consult our allies before we sell military equipment to China. The COCOM committee keeps under review the strict criteria which govern its operation, and it is concerned to ensure that these criteria continue to reflect current political and economic realities. Reports of the supposed attitudes or actions of our NATO allies in no way affect our general approach. The attitude of the Soviet Union has also received considerable publicity.

The Government believe that it is in the interests of peace that China should contribute to the strengthening of international stability and take its proper place in international affairs. This is more likely to be achieved if the West helps China to modernise her economy and if due account is taken of her legitimate strategic interests and sovereign right to provide for her defence.

The Soviet Union has expressed its concern in an area which is of importance to itself as well as to China. The British Government understand the concern of both countries. The Prime Minister has already told the House that we do not intend to allow other countries to dictate our relations with China or anyone else.

The Government have certainly not been dragging their feet. Of course, China's interest in the Harrier has been talked about since 1972, but it was only during the Vice-Premier's visit that we obtained enough information about the precise nature of the Chinese requirements to begin to give serious and detailed consideration to the matter. Since we received that information, we have pressed on with the necessary consultations.

Mr. MacFarquhar

Is my right hon. Friend saying that before the Vice-Premier's visit the Government did not give any consideration to this matter?

Dr. Gilbert

I am saying nothing of the sort. I am saying that one could not give the matter serious and detailed consideration until we knew the Chinese requirements, whether they had a firm interest, the numbers they were talking about and whether they envisaged buying the aircraft or licensing it. All these matters were not revealed to us until the Vice-Premier's visit. As I said, I do not know how long the consultations will take, and I do not propose to speculate. But the Government recognise the many benefits which would accrue to employment and the balance of payments from such a deal. British Aerospace is pursuing its negotiations so that if the Government's final decision is favourable no time will have been lost.

Mr. Lu Tung, the Chinese Minister at the Third Ministry of Mechanical Building, is visiting this country at the moment. One of his main interests is aerospace, and the Harrier will feature among a number of projects, military and civil, which he will be discussing with British Aerospace. The Secretary of State met him last Friday and explained the Government's position on the Harrier as on other defence sales and I believe that he hopes to meet him again before the end of his visit.

I stress again that a possible Harrier sale must be seen in perspective. We do not intend to become a supplier only of arms to China. If we supply the Harrier, and possibly other arms, it will be only as part of a wider and balanced package of increased trade across the whole spectrum of goods and services. The Harrier is not and must not be the touchstone of our relations with China. We want our new relationship to go much deeper than the sale of one aircraft.

Several Hon. Members rose—

Mr. Walter Harrison(Treasurer of Her Majesty's Household)

rose in his place and claimed to move, that the Question be now put.

Question accordingly agreed to.

Question put, That the Question be now put:—

The House divided: Ayes 152, Noes 43.

Division No. 22] [10.20 a.m. AYES
Allaun, Frank Garrett, W. E. (Wallsend) Pendry, Tom
Archer, Rt Hon Peter George, Bruce Perry, Ernest
Armstrong, Ernest Graham, Ted Phipps, Dr Colin
Ashton, Joe Grant, George (Morpeth) Price, C. (Lewisham W)
Barnett, Guy (Greenwich) Grant, John (Islington C) Rees, Rt Hon Merlyn (Leeds S)
Barnett, Rt Hon Joel (Heywood) Hamilton, James (Bothwell) Richardson, Miss Jo
Bennett, Andrew (Stockport N) Harrison, Rt Hon Walter Roberts, Albert (Normanton)
Bishop, Rt Hon Edward Hart, Rt Hon Judith Robertson, George (Hamilton)
Boardman, H. Hattersley, Rt Hon Roy Rodgers, Rt Hon William (Stockton)
Booth, Rt Hon Albert Home Robertson, John Rooker, J. W.
Bottomley, Rt Hon Arthur Hooley, Frank Roper, John
Bray, Dr Jeremy Horam, John Rowlands, Ted
Brown, Hugh D. (Provan) Howell, Rt Hon Denis (B'ham, Sm H) Selby, Harry
Brown, Robert C. (Newcastle W) Howells, Geraint (Cardigan) Sheldon, Rt Hon Robert
Buchanan, Richard Hughes, Robert (Aberdeen N) Shore, Rt Hon Peter
Butler, Mrs Joyce (Wood Green) Hunter, Adam Short, Mrs Renée (Wolv NE)
Callaghan, Rt Hon J. (Cardiff SE) Irving, Rt Hon S. (Dartford) Silkin, Rt Hon John (Deptford)
Campbell, Ian Jackson, Miss Margaret (Lincoln) Silkin, Rt Hon S. C. (Dulwich)
Cant, R. B. Janner, Greville Skinner, Dennis
Cocks, Rt Hon Michael (Bristol S) John, Brynmor Smith, Cyril (Rochdale)
Cohen, Stanley Johnson, James (Hull West) Spriggs, Leslie
Coleman, Donald Jones, Alec (Rhondda) Stallard, A. W.
Colquhoun, Ms Maureen Jones, Barry (East Flint) Stewart, Rt Hon M. (Fulham)
Concannon, Rt Hon John Judd, Frank Stoddart, David
Conlan, Bernard Lamond, James Stott, Roger
Cook, Robin F. (Edin C) Leadbitter, Ted Strang, Gavin
Cowans, Harry Lewis Ron (Carlisle) Taylor, Mrs Ann (Bolton W)
Craigen, Jim (Maryhill) Lofthouse, Geoffrey Thomas, Ron (Bristol NW)
Crawshaw, Richard Loyden, Eddie Thorne, Stan (Preston South)
Crowther, Stan (Rotherham) McElhone, Frank Tierney, Sydney
Cryer, Bob MacFarquhar, Roderick Tomlinson, John
Cunningham, Dr J. (Whiten) McKay, Allen (Penistone) Varley, Rt Hon Eric G.
Davidson, Arthur Maclennan, Robert Wainwright, Edwin (Dearne V)
Davis, Clinton (Hackney C) McNamara, Kevin Wainwright, Richard (Colne V)
Deakins, Eric Madden, Max Walker, Terry (Kingswood)
Dean, Joseph (Leeds West) Marks, Kenneth Ward, Michael
Dormand, J. D. Marshall, Dr Edmund (Goole) Watt, Hamish
Douglas-Mann, Bruce Marshall, Jim (Leicester S) Weetch, Ken
Duffy, A. E. P. Mason, Rt Hon Roy White, Frank R. (Bury)
Dunnett, Jack Maynard, Miss Joan White, James (Pollok)
Ellis, John (Brigg & Scun) Meacher, Michael Whitlock, William
English, Michael Millan, Rt Hon Bruce Williams, Rt Hon Alan (Swansea W)
Ennals, Rt Hon David Mitchell, Austin (Grimsby) Williams, Rt Hon Shirley (Hertford)
Evans, Fred (Caerphilly) Morris, Rt Hon Charles R. Williams, Sir Thomas (Warrington)
Ewing, Harry (Stirling) Morris, Rt Hon J. (Aberavon) Wilson, Gordon (Dundee E)
Farbairn, Nicholas Morton, George Woodall, Alec
Flannery, Martin Mulley, Rt Hon Frederick Wrigglesworth, Ian
Foot, Rt Hon Michael Murray, Rt Hon Ronald King Young, David (Bolton E)
Ford, Ben Orme, Rt Hon Stanley
Fowler, Gerald (The Wrekin) Palmer, Arthur TELLERS FOR THE AYES:
Fraser, John (Lambeth, N'w'd) Park, George Mr. Thomas Cox and
Freeson, Rt Hon Reginald Pavitt, Laurie Mr. James Tinn.
NOES
Adley, Robert Hayhoe, Barney Ogden, Eric
Biggs-Davison, John Hutchison, Michael Clark Page, Rt Hon R. Graham (Crosby)
Blaker, Peter James, David Page, Richard (Workington)
Bottomley, Peter King, Evelyn (South Dorset) Rhodes James, R.
Brotherton, Michael Knight, Mrs Jill Roberts, Michael (Cardiff NW)
Buchanan-Smith, Alick Le Marchant, Spencer Roberts, Wyn (Conway)
Carlisle, Mark Madel, David Trotter, Neville
Clark, Alan (Plymouth, Sutton) Marshall, Michael (Arundel) Wakeham, John
du Cann, Rt Hon Edward Mather, Carol Wall, Patrick
Dykes, Hugh Mawby, Ray Winterton, Nicholas
Fletcher, Alex (Edinburgh N) Maxwell-Hyslop, Robin Younger, Hon George
Goodhew, Victor Mills, Peter
Goodlad, Alastair Monro, Hector TELLERS FOR THE NOES:
Gower, Sir Raymond (Barry) Mudd, David Mr. Michael Hamilton and
Grant, Anthony (Harrow C) Neubert, Michael Mr. R. A. McCrindle.
Grist, Ian Newton, Tony

Question, That the Bill be now read a Second time, put accordingly, and agreed to.

Bill read a Second time and committed to a Committee of the whole House immediately considered in Committee pursuant to the Order of the House this day.

[Mr. OSCAR MURTON in the Chair]

Clause 1

ISSUE OUT OF THE CONSOLIDATED FUND FOR THE YEAR ENDING 31ST MARCH 1979

10.31 a.m.

Mr. Michael English (Nottingham, West)

I beg to move, in page 1, line 13, leave out "may" and insert "shall ".

As I understand it, the possibility of amending the Consolidated Fund Bill in Committee is, to say the least, limited. There is a whole paragraph in "Erskine May" saying what one cannot do. I understand that this is almost the only thing that one can move.

The difference between "may" and "shall" in the United States, which derives its procedures from ours, has resulted in an Act of Congress. In the United States there is a procedure known as impoundment, whereby Congress endeavours to force the Administration to spend the money granted by Congress. In this country yet another aspect of the lack of control we impose on the Executive is that, even when we grant money to the Executive, there is no possibility of any amendment moved by any person present to discuss a particular detail of this large sum of £23,000 million that we are currenly authorising the Government to spend.

In the United States, which, I repeat, derives its procedure from us, a Democratic Congress has found that a Republican President, such as President Nixon, has not spent what he has been authorised to spend by Act of Congress.

The point of my amendment is well illustrated by happenings in recent years. It was only a year or so ago that public expenditure cuts were proposed by the Government and were argued about at great length by hon. Members on all sides of the House, some in favour and many against. And what happened at the end of the year?

The shortfall in expenditure—unplanned and unproposed by the Treasury, and, indeed, uncontrolled by both the Treasury and the House—was much greater than the intentional reduction in public expenditure. It was over £2.2 billion. In other words, we are much weaker as a Parliament than is the American Congress, for the reason that in the United States there is the impoundment procedure which forces the Executive to spend upon projects approved by Congress.

In this country the Executive can, if it wishes, totally avoid spending sums approved by the House. Therefore, one complete aspect of parliamentary control is totally missing. At this stage we may not discuss in detail what the Government may spend the money on, and when we have passed this Bill, if it passes without my amendment, the Government may not even bother to spend the money on a particular project and may change their minds. Indeed, they may not even know what individual Departments are failing to spend.

A situation in which a Government plan expenditure cuts but find that all their expenditure plans are overwhelmed by even greater underspendings Department by Depatment, which is not known to the Treasury until the end of the year, is chaotic. Our financial procedure is in need of revision.

I am grateful to my right hon Friend the Leader of the House for his promise that the Select Committee reports on the Civic Service and procedure will be debated as soon as possible after we return from the Christmas Recess. Therefore, I hope that sooner or later we shall attempt to revise these deplorable procedures.

The Chairman (Mr. Oscar Murton)

I am grateful to the hon. Member for Nottingham, West (Mr. English) for giving notice of the fact that he intended to raise this matter. I wish to explain the difficulty which would arise if his amendment were accepted.

This Bill is founded on a series of resolutions, each one of which is to the effect that a sum not exceeding—I emphasise the phrase "not exceeding "—a certain number of pounds, indeed a large number, be granted to Her Majesty. Accordingly, the total of all these sums is set out in the Bill in terms of a permitted maximum. The effect of the hon. Gentleman's proposed amendment would be to transform a maximum figure into an exact figure and would therefore, in my view, be outside the scope of the founding resolutions.

In the circumstances, I regret that I cannot propose the Question to the House in the terms which the hon. Gentleman has raised.

Mr. English

I am grateful to you, Mr. Murton, and, of course, I would not dream of challenging your ruling. Indeed, your ruling illustrates my point as to the total inadequacy of the financial procedures of the House.

You have just ruled, in effect, that our procedures prohibit both Houses of Parliament from doing what is commonly done in the United States of America derived from our procedure. You have ruled that financial control in respect of both Houses is meaningless, because it puts no control whatever on the Executive in the sense of ordering it to spend any money.

Clause I ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.

Bill reported without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills) and agreed to.

Bill accordingly read the Third time and passed.