Commons Sitting of 26 June 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Value Added Tax
    Mr. David Atkinsonasked the Chancellor of the Exchequer if he is satisfied with the present threshold for value added tax registration liability.
    The Financial Secretary to the Treasury (Mr. Nigel Lawson): Yes, Sir. My hon. Friend will be aware that the VAT threshold was raised by 35 per cent. to £13,500 in this year's Budget.
    Mr. Atkinson: I thank my hon Friend for his reply. Is he aware that, for nearly half a million small business men, the cost of administering and collecting VAT from them is more than the revenue obtained? Will he initiate discussions with our Community colleagues to change the VAT system and end this scandal that employs tax collectors unnecessarily at the expense of free enterprise?
    Mr. Lawson: My hon. Friend will be aware that, under the sixth directive of the European Communities, the limit cannot be increased to an extent beyond that which would maintain its 1973 value in real terms. I do not, therefore, think that there is much chance of our securing a derogation from that. Nor do I wholly accept—although I appreciate the burden on small traders—that the situation is quite as bad as my hon. Friend suggests.
    Mr. Horam: Is the hon. Gentleman saying that he is bound by what the EEC decides on these matters? Will he not give further consideration to his hon. Friend's point? There is a good case for raising the minimum level for registration to £50,000. Is he aware that that would really help small businesses, rather than
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    the phoney measures that the Government have so far brought out?
    Mr. Lawson: The hon. Gentleman is well known as a supporter of the EEC. I would point out to him that when the registration limit was last raised in 1978—we have not yet got the statistics for the consequences of the increase in 1980—only about one-fifth of the traders paying tax who were invited to de-register, did so. The position is a little different from what the hon. Gentleman implied.
    Mr. Emery: Has my hon. Friend considered the possibility of a tranche above the cut-off limit whereby a trader can purchase a licence which will average the revenue that he would have had to pay in the band from £13,500 to £20,000, thereby ensuring that money is paid to the Revenue but making the system much more simple for small business men to operate, without the normal VAT return difficulties?
    Mr. Lawson: I will be happy to look at my hon. Friend's suggestion. My first impression is that, far from being a simplification, it might add to the complexity of the tax. Our purpose has always been to simplify where possible, rather than to make things more complicated.

    Credit Purchases
    Mr. Chapmanasked the Chancellor of the Exchequer if he will take steps to discourage the procurement of goods and services through hire purchase credit terms and the use of credit cards by providing incentives through the value added tax system for cash payments.
    Mr. Lawson: I have noted my hon. Friend's suggestion, but I would see some difficulty in using the VAT system for the purpose that he has in mind.
    Mr. Chapman: While recognising the importance of reducing private sector borrowing, may I ask my hon. Friend whether he sees any way in which the Government can come forward with initiatives to encourage the procurement of goods through cash payments rather than discouragement of credit terms through interest rates?
    Mr. Lawson: Interest rates are a considerable discouragement. The interest rate on many forms of consumer credit

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    is very high, especially on credit cards. The statistics show that there has been a falling-off in the rate of growth of consumer credit as a result.
    Dr. Glyn: Does my hon. Friend agree that the whole system of credit cards is an inducement to inflation? People purchase goods by producing a card rather than producing cash at the time. Will he consider some form of restriction of this credit system, which is causing an inflationary spiral?
    Mr. Lawson: My hon. Friend is correct. That is the nature of credit cards and all forms of credit. Discriminatory regulations against credit cards would lead to other forms of credit. We take the view that the best way to control credit is through its cost.

    Inflation
    Mr. Skinnerasked the Chancellor of the Exchequer what further steps he is taking with a view to reducing inflation; and if he will make a statement.
    Mr. Maclennanasked the Chancellor of the Exchequer if he will make a statement on the development of his policies to reduce inflation.
    The Chancellor of the Exchequer (Sir Geoffrey Howe): The Government's counter-inflationary strategy was set out in my Budget speech and in the medium term financial strategy.
    Mr. Skinner: Does the Chancellor of the Exchequer recall being interviewed by Mary Goldring on the "Analysis" programme a few weeks ago? Does he recall saying that he would like to see a massive business portfolio abroad in order that Britain can be great again as it was in the 1930s? Does he remember that he was asked whether that might result in 3 million people being unemployed? Will he tell the House what he told the people on the air—that he would not regard that as unwelcome and that the money would have to be found from North Sea oil? [HON. MEMBERS: "Too long."] Is he aware that the arithmetic shows that not enough is coming from petroleum revenue tax to pay for 3 million unemployed?
    Sir G. Howe: There is no point of contact whatsoever between the purported
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    summary in the hon. Gentleman's question and anything that I have said in the past. I cannot imagine where he gets his ideas from.
    Mr. Bruce-Gardyne: Has my right hon. and learned Friend noticed the results of the latest CBI survey on manufacturing industry's intentions which suggest that manufacturers expect to put up prices less than at any time in the past seven years?
    Sir G. Howe: I have noticed the fact to which my hon. Friend draws attention. House prices are standing steady and have been so for some months. That is among several indicators that the rate of inflation is likely to turn down fairly shortly.
    Mr. Healey: Does the Chancellor agree that the rate of inflation has more than doubled since he took office? Does he accept that that represents not only a total failure of the policies to which he has referred, but a betrayal of all the promises made during the last general election? Now that the Treasury is forecasting inflation at between 18 and 19 per cent. at the end of the year, will he raise the increase for the old-age pensioners in November by 10 per cent. to fulfil his legal commitment to keep the rise in pensions in line with the rise in prices?
    Sir G. Howe: The right hon. Gentleman should know better than to found his assessments of Treasury forecasts on articles in the newspapers. The Treasury's last forecast was contained in the record published at the time of the Budget. The right hon. Gentleman will know, because he talked about it often enough himself, that the rate of monetary growth between the middle of 1977 and the middle of last year was 15 per cent. per annum, and that that is the fundamental cause of the current inflation.
    Mr. Healey: Does not the right hon. and learned Gentleman accept the figures in his Red Book which show that the increase in money supply in the year before he took office was a good deal lower than the increase which occurred in his first year of office? Will he answer the central question? Will he undertake to raise the old-age pension in November

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    in line with the increase in prices by that time and not cheat pensioners again, as he has already cheated them out of £30 million by paying the pension increase two weeks' late?
    Sir G. Howe: The right hon. Gentleman is expert in these matters because the Government of whom he was a member reversed the basis of assessment of pension increases and thereby laid themselves open to the charge of cheating the pensioners. This Government will not cheat the pensioners.
    Mr. Alan Clark: In considering the development of his policies against inflation, will my right hon. and learned Friend reject totally any concept of interfering with wage levels? Will he recognise that a man's power to get the market rate for his labour is one of the primary freedoms with which the Conservative Party is associated?
    Sir G. Howe: I recognise, as the majority of hon. Members on both sides of the House recognise, that previous attempts to introduce pay policies which are applied across the board, whether by statute or otherwise, have always contained the seeds of their own destruction. Of course the Government are responsible for determining the pay of people in their employ, but that is an entirely different matter.
    Mr. Arthur Lewis: Will the Chancellor of the Exchequer explain how his policy, which appears to be working since unemployment is increasing, also seems to be increasing inflation? Is his policy to increase unemployment and inflation, because that is what has been happening for the last 12 months?
    Sir G. Howe: No. I am sure that the hon. Gentleman understands that so long as monetary discipline is maintained, as it will be, pay settlements which go beyond the underlying rate of the money supply and beyond the growth of the country's productive resources, are bound to add to the level of unemployment. The power to influence that level rests a great deal in the hands of people who conduct pay bargaining.

    Value Added Tax
    Mr. Hannamasked the Chancellor of the Exchequer if he will seek to relieve
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    from value added tax adaptations on cars for the disabled.
    Mr. Lawson: I am well aware of my hon. Friend's long-standing interest in this subject, and indeed of his tireless work on behalf of the disabled in general. But I am afraid that, as my hon. and learned Friend the Minister of State has explained previously to my hon. Friend, such a relief could not be justified in the context of a broadly based tax.
    Mr. Hannam: Does my hon. Friend accept that the provision of vehicles for the disabled has been discontinued by the Government and that it is therefore vital that the Motability leasing scheme is successful? Does he accept that one of the main obstacles is not the level of the mobility allowance but the VAT charged on adaptation?
    Mr. Lawson: My hon. Friend is aware of our concern for the success of the Motability scheme. That is why Motability and similar organisations supplying cars to the disabled are able to deduct input tax on cars bought for leasing. Such input tax is not normally deductible.
    Mr. Denzil Davies: Does the Minister agree that the main reason why people are suffering in this way is the increase in VAT from 8 per cent. to 15 per cent? Will the Government reduce the rate of VAT, not only to help the disabled but to reduce prices in general?
    Mr. Lawson: No, Sir. A reduction in VAT would have to be paid for by an increase in income tax. The vast majority of the British people do not want that.
    Mr. McQuarrie: Does my hon. Friend realise that the number of people involved in the adaptation of vehicles is minimal? Does he agree that the amount of money involved is such that there is the possibility of the Government doing something about it?
    Mr. Lawson: My hon. Friend is right. The cost might be small but it is impossible to draw the line there. Similar relief would have to be made in a number of other cases where, in equity, the case is equally compelling.
    Mr. Edwin Wainwright: Does the Minister realise that his answer will be met with displeasure by all decent people? Will he reconsider this, and look after

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    these poor unfortunate people who are disabled and deserve as much benefit as we can give, although a few might take advantage of it?
    Mr. Lawson: I appreciate the sincerity of the hon. Gentleman's question. Nevertheless, relief for the disabled is more sensibly given through the social security system than through complicated remissions which would damage the integrity of the VAT system and make it difficult to know where to draw the line.

    Inflation
    Mr Peter Bottomleyasked the Chancellor of the Exchequer what is his estimate of the effects of the levels of interest rates upon inflation.
    Mr. Lawson: If a rise in the general level of interest rates raises mortgage interest rates, there will be a short-run increase in the RPI as a result of higher housing costs. However, in the long run, the rate of inflation is determined by the rate of money supply growth. As higher interest rates help to reduce money supply growth, they will in the longer run help to bring down the rate of inflation.
    Mr. Bottomley: I am naturally most grateful for that answer. With regard to reductions in the rate of interest, does my hon. Friend recall the controlled experiment, when an answer by the Prime Minister to a question of mine knocked four cents off the value of the pound? Can I take it that the impact of reducing interest rates and the consequences for the value of the pound will lead to more industrial activity at some cost to the rate of rising prices?
    Mr. Lawson: It is certainly no part of our policy to maintain high interest rates for their own sake. As soon as interest rates can be reduced, consistent with maintaining the monetary targets, they will be reduced.
    Mr. Healey: Is not the hon. Gentleman aware that interest rates increase inflation because they increase the cost to industry, both of investment and of holding stocks, and that industry at present is groaning under the impact of these excessively high interest rates, which are far higher than is needed to control the money supply? Does not the hon. Gentleman agree that the attempt to re-
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    duce private bank borrowing by excessively high interest rates has been proved a total failure?
    Mr. Lawson: As usual, the right hon. Gentleman is wrong, and he knows that he is wrong, because he increased interest rates during his tenure as Chancellor of the Exchequer as a means of assisting in the battle against inflation. He also knows that countries throughout the world have increased interest rates over the past year, again as part of the necessary battle against inflation.
    Mr. Healey: Is the hon. Gentleman aware that when I increased MLR to 15 per cent., it started falling immediately and reached 5 per cent. within 12 months? He has maintained a 17 per cent. MLR for eight months already, and, apart from occasional murmurs from the Chancellor, which have been proved wrong within days of their being made, there is no prospect of a substantial fall in interest rates before the autumn, at least.
    Mr. Lawson: By allowing interest rates to come down too far, too fast, the right hon. Gentleman laid the groundwork for the rapid increase in monetary growth during the 18 months before the 1979 general election, which as my right hon. and learned Friend has pointed out, is the cause of the inflation from which we are now suffering.
    Mr. Dykes: Can my hon. Friend say whether there is now growing evidence that companies are finding it increasingly difficult to repay some of the interest charges, and that they are being added to the net value of outstanding loans, thereby increasing the total amount of loans outstanding in the company sector?
    Mr. Lawson: I have no doubt that in individual cases that may be so, but as a whole, the high level of interest rates is contributing to the lowering of inflation, not merely through bank lending but through the necessity of funding the very high Government borrowing requirement, which we have reduced from the abysmal inheritance that we received from the previous Administration.
    Mr. Campbell-Savours: Has the hon. Gentleman read the speech of his right hon. and learned Friend the Member for Hexham (Mr. Rippon) in the employment debate yesterday? What does he think

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    of the right hon. and learned Gentleman's comments on this subject, and those of his right hon. Friends who sit on the Government Front Bench?
    Mr. Lawson: I regret that I have not yet had the opportunity of reading the comments of my right hon. and learned Friend the Member for Hexham (Mr. Rippon). Therefore, I cannot comment on them.

    Interest Rates
    Mr. Lathamasked the Chancellor of the Exchequer what are the factors currently preventing him from reducing interest rates; and whether he will make a statement.
    Sir Geoffrey Howe: As I have made clear on many previous occasions, our policies are intended to create the conditions in which it will be possible for interest rates to fall in due course.
    Mr. Latham: Does my right hon. and learned Friend accept that the present rates of interest conflict with the Government's other essential strategy of encouraging small businesses and helping them to expand? When does he intend to resolve that conflict?
    Sir G. Howe: Clearly, for that, and a number of other reasons, it is desirable that interest rates should come down as soon as it is possible for them to do so, consistent with proper management of the money supply.
    Mr. Robert Sheldon: Is the right hon. and learned Gentleman aware that the high level of interest rates, together with the high level of the pound, is causing acute problems for many of our most successful companies, the latest of which is Rolls-Royce Motors? Will he bear in mind that it is not enough to adopt a simple solution of putting inflation as one's first priority if the result is the industrial dereliction which will be typified by a number of these excellent companies finding themselves in great difficulties?
    Sir G. Howe: I make no comment on the particular case raised by the right hon. Gentleman. However, it must be understood—this was the experience of the
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    Government of which he was a member—that the process of controlling the money supply at a time of high inflation necessarily involves, for a period, high rates of interest. In addition, the exchange rate is outside the control of the Government. It is, therefore, important for those concerned with the management of industry or pay bargaining on both sides to recognise the extent to which they are themselves capable of changing conditions in order to avoid the worst consequences.
    Mr. Eggar: When my right hon. and learned Friend decides to make decisions based on his evaluation of the state of the money supply, can he give some indication of what relative weight he gives to the figures for DCE, banking and £M3?
    Sir G. Howe: They are all among the factors which must be taken into account.
    Mr. Denzil Davies: Does not the right hon. and learned Gentleman agree that if he reduces interest rates significantly it will only mean an increase in bank lending? Presumably an increase in bank lending will increase the money supply, which will then put up the rate of inflation. Therefore, what is the point of reducing interest rates?
    Sir G. Howe: The right hon. Gentleman seems to have a remarkable capacity for standing on his head, because only a moment ago his right hon. Friend urged the merits of reducing interest rates. The right hon. Gentleman will know that interest rates tend to be a leading indicator as inflation comes down. When that time comes—I cannot make any comment as to when it will be—it will not have the adverse effect which he suggests.
    Mr. Richard Wainwright: Can the Chancellor now explain how he reconciles the prospects of reduced rates of inflation, which he held out yesterday at the Carlton Club, with the relatively rapid acceleration of domestic credit expansion in the banking month of May?
    Sir G. Howe: I would not attempt to take only one month's figures. If the hon. Gentleman chooses to do that in relation to one indicator, he is likely to mislead himself in many directions.

    Income Tax (Computerisation)
    Mr. Altonasked the Chancellor of the Exchequer if he intends to proceed with general computerisation of the income tax PAYE system; and if so, when.
    Sir Geoffrey Howe: Proposals based on the Inland Revenue's detailed feasibility study of the computerisation of PAYE are under consideration. I hope to make an announcement in the near future.
    Mr. Alton: Particularly in view of the evidence given by Sir William Pile to the General Purposes Sub-Committee of the old Expenditure Committee, can the Chancellor say whether the computerisation of the PAYE system will in any way limit Parliament's ability to make changes in the tax structure.
    Sir G. Howe: Once it has been completed the computerisation programme is designed to handle the PAYE system without impeding the possibility of introducing new developments of a very wide variety. However, while the process is being implemented—during the period when one is changing from a manual to a computerised system—there are bound to be some constraints on changes to the tax system at that stage.
    Mr. Ralph Howell: Will my right hon. and learned Friend delay any computerisation of the tax system until a complete reform of our taxation and welfare system has been carried out so that we no longer take such vast amounts of income tax from the lower paid, thus reducing the incentive to work?
    Sir G. Howe: My hon. Friend raises an important and familiar point to which he has given a great deal of attention over the years. However, the fact is that reform on the scale that he has in mind would be a long and complicated process. If we were to wait for that to be completed, before we were to set in hand the process of computerisation, we would not be acting in a sensible way.
    Dr. Bray: Can the Chancellor confirm his statement that the computerisation of the Inland Revenue is intended to facilitate changes in the structure, because my understanding is that the Inland Revenue's case is based solely on clerical
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    savings? As this point is most important it ought to be confirmed. Secondly, can he assure the House that a British-made computer will be used by the Inland Revenue?
    Sir G. Howe: Computer procurement is a matter for my right hon. Friend the Minister of State, Civil Service Department, and decisions on that project, including the method of procurement, have not yet been taken. The point raised by the hon. Gentleman is one which will certainly be borne in mind. As to the effect of computerisation, it is certainly intended to add to the versatility of the tax system, and that is one of the factors which have been borne in mind throughout the process of design.

    West Yorkshire
    Mr. Edward Lyonsasked the Chancellor of the Exchequer when he expects his present financial policy to result in the expansion of industry in West Yorkshire.
    The Chief Secretary to the Treasury (Mr. John Biffen): As the Government's monetary and fiscal policies take effect, inflation and interest rates will fall, creating the right climate for increased activity in British industry generally.
    Mr. Lyons: Is the Minister aware that the Government's policy of over-valued sterling, high interest rates and industrial non-intervention has caused a shattering acceleration in the decline of the textile, clothing and carpet industries? Is he further aware that in sectors of those industries there is now a gallop towards extinction? In those circumstances, will he change his policies and reverse those disastrous trends?
    Mr. Biffen: No, Sir. Any lurch to easy money or protectionism would be even more damaging.
    Mr. Marland: Does my right hon. Friend know that in areas such as the Forest of Dean, which has not been designated an assisted area, there is a serious problem with the infrastructure in some districts? Will he consider—
    Mr. Speaker: Order. This question is about West Yorkshire, and the hon. Gentleman must relate his remarks to that.
    Mr. Woolmer: Does the Minister realise that the wool, textile, carpet and allied trades have lost more than 7,000 jobs in West Yorkshire during the past six months? As British manufacturing industry crumbles under the high interest rates, the over-valued pound, and the Government's deflationary policy, when will the Government reverse their disastrous policies? If the Minister will not listen to the unemployed, will he at least listen to manufacturing Britain?
    Mr. Biffen: The Government are always happy to listen to representations from the industrial community. I do not believe that a contrived exchange rate below the level that the market will produce is any way a salvation for British industry.
    Mr. Richard Wainwright: Does the Minister accept that the high exchange rate generated by his monetary supply policies has had remarkably little effect in restraining imports of textiles and clothing?
    Mr. Biffen: No. The high exchange rate has had a beneficial impact on the price of raw materials.

    Public Sector Pay
    Mr. Butcherasked the Chancellor of the Exchequer if he will make a statement on the latest projection for public sector pay increases over the next 12 months.
    Mr. Biffen: Public sector pay settlements will need to be determined in the light of what the taxpayer and the ratepayer can afford. It is too early to reach firm views on figures.
    Mr. Butcher: I thank my right hon. Friend for that reply. Does he agree that future public sector pay settlements should be at rates that are considerably less than the rate of inflation, which should assist in further reducing Government borrowing?
    Mr. Biffen: Doubtless that consideration will weigh with the Government when fixing cash limits.
    Mr. Winnick: Is the Minister aware that the Government have lost any authority to ask for income or wage restraints of any sort? Is he also aware that public sector workers will be determined
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    to make a hard fight to stop themselves from being bullied and intimidated by the Government?
    Mr. Biffen: It is not the Government's purpose to bully or intimidate, but to operate by the rule of law, especially in respect of wages.
    Mr. McCrindle: On the question of the private sector, is my right hon. Friend convinced that falling profitability and reducing demand alone will induce private employers to follow the example of the Government in the public sector, or does he have any additional inducement in mind to stiffen that resolve?
    Mr. Biffen: The fall in profitability will be a major determinant in the level of earnings. That was evidenced in the May report of the CBI pay data bank.
    Mr. Horam: Have the Government now abandoned the nonsense that public sector pay settlements of about 20 per cent. are compatible with cash limits of 14 per cent.?
    Mr. Biffen: That view was never entertained.

    Sterling M3 (Wage Settlements)
    Mr. Freudasked the Chancellor of the Exchequer whether he is satisfied that the level of wage settlements are effectively lowered by restraint on growth of sterling M3.
    Sir Geoffrey Howe: Wage settlements not consistent with the rate of monetary growth run the risk of destroying jobs. The sooner and the more widely that is understood by wage bargainers, the sooner the upward trend in unemployment can be reversed.
    Mr. Freud: Will the Chancellor say to what heights unemployment will have to rise before he achieves restraint in wage settlements?
    Sir G. Howe: It is not for me to achieve restraint in wage settlements, but for those concerned with the business of pay bargaining. The central conclusion reached by the previous Labour Administration after the collapse of their pay policy was that it was best to leave pay bargaining to those concerned with it. Any attempt to achieve restraint by the imposition of a uniform policy contains the seeds of its own destruction. The

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    right hon. Member for Ebbw Vale (Mr. Foot) may well laugh, but he was the architect of the last lesson in that.
    It cannot be too strongly emphasised that it is for pay bargainers on both sides of the bargaining table to recognise their responsibility for creating unemployment if they insist on pay settlements that are too high.
    Sir William Clark: Does my right hon. and learned Friend agree that in past wage settlements far too much emphasis was placed on a 10 or 15 per cent. increase, without sufficient attention being paid to the increased productivity that Britain needs?
    Sir G. Howe: Yes, indeed. As my hon. Friend knows, during the past two years pay rises have exceeded the rise in prices by about 12 per cent.—more than twice as much as the growth of production in Britain. That is a prescription for disaster and rising unemployment.
    Mr. Denzil Davies: Is it still the Government's view that high wage settlements are not a cause of inflation?
    Sir G. Howe: High wage settlements are incompatible with the maintenance of proper monetary discipline. If the right hon. Gentleman would do me the courtesy of studying the speech that I made yesterday, he would see that it set out the point that high wage settlements contribute initially to a higher level of inflation than would otherwise be the case. In due course, inflation will come down, and the effect of high pay settlements will be to leave us with a higher level of unemployment.
    Mr. Henderson: Will my right hon. and learned Friend confirm that, where there is high profitability and high productivity, high wage settlements are entirely reasonable?
    Sir G. Howe: That is the right basis on which to approach the matter.
    Mr. Jay: Does the Chancellor yet see any signs of his policies being successful?
    Sir G. Howe: Yes, indeed. As I have already told the House—although the right hon. Gentleman may not have been here to listen—the level at which prices are rising will shortly peak out. The number of employers likely to make price
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    increases is at its lowest level since January 1973. House prices are not rising. Those characteristics suggest that the level of inflation is likely to turn around shortly.

    Tax Evasion
    Mr. Ron Brownasked the Chancellor of the Exchequer if he will expand tax evasion investigations, in view of the claim by the chairman of the Inland Revenue Board that an estimated £3,000 million per annum is lost to the Tresury through evasion.
    Mr. Biffen: The Inland Revenue keeps the matter of tax evasion under constant review. Revised and more efficient investigation methods have contributed to a fourfold increase in the amount collected by way of back taxes, penalties and interest in the three years to 31 October 1979.
    Mr. Brown: That is an interesting answer, although I do not accept it. Is it not about time that the Government dealt with the scroungers at the top—those who no doubt back the Tory Party—or is that something that the Minister wants to cover up? That is how it appears to people in Britain.
    Mr. Biffen: I reject entirely those accusations. The hon. Gentleman may be interested to know that the Inland Revenue plan to select 50 additional tax inspectors to deal with that problem.
    Mr. Peter Bottomley: I shall try to put the matter in a less emotional way. Will my right hon. Friend say whether an extra tax inspector is likely to draw back more money for the Revenue than an extra supplementary benefit investigator?
    Mr. Biffen: Not without notice.
    Mr. Healey: Will the Chief Secretary give his estimate for the revenue lost through tax evasion following the abolition of exchange controls?
    Mr. Biffen: Not without notice.

    Electrically propelled Vehicles
    Mr. Farrasked the Chancellor of the Exchequer if he will seek to zero-rate electrically propelled vehicles from value added tax and exempt them from car tax.
    Mr. Lawson: I have no proposals for zero-rating such vehicles for VAT. I am happy to reassure my hon. Friend that they are not chargeable to car tax.
    Mr. Farr: I thank my hon. Friend for that answer. May I draw his attention to the joint communiqué issued last weekend as a result of the Prime Minister's meeting in Venice, which stressed the need to encourage development of alternative forms of energy? Will he put his personal efforts behind boosting Government expenditure in that direction, because the present total annual Government expenditure on such a vital research is at a negligible level?
    Mr. Lawson: My energies, as a general rule, are not likely to be put towards boosting public expenditure in any area. My hon. Friend will be aware that the Finance Bill proposes the exemption of electrically-propelled vehicles from vehicle excise duty as an encouragement to the development of alternative energy sources for road transport.
    Mr. Ian Lloyd: While I welcome the news of that exemption, may I reinforce the plea of my hon. Friend the Member for Harborough (Mr. Farr) because, in the context of Venice, there seems to be little sign yet that Western economies generally are using powerfully and effectively the whole of the fiscal apparatus, as they will have to if they are to achieve a massive shift from a petroleum-based economy to other forms of energy?
    Mr. Lawson: I am not sure of the time scale during which alternative sources of energy are likely to come into play, but my hon. Friend will be aware of the increases in taxation that the Government have imposed upon oil and oil products with this consideration very much in mind.

    Minimum Lending Rate
    Mr. Ioan Evansasked the Chancellor of the Exchequer what is the latest rate of minimum lending rate; and what is the equivalent rate in the Federal Republic of Germany and Austria.
    Mr. Lawson: Minimum lending rate is currently at 17 per cent. The central bank discount rate, which is the equivalent of MLR, is 7½ per cent. in the Federal Republic of Germany and 6¾ per cent. in Austria.
    Mr. Evans: Why should we have the highest interest rates ever in this country when the Socialist and Social Democratic Governments in Germany and Austria can operate at a rate 10 per cent. lower than ours when they have lower unemplyoment, lower inflation, higher wages and higher industrial activity? Should not the Government abandon their Milton Friedman policies?
    Mr. Lawson: If the hon. Gentleman can see any resemblance whatever between the ramshackle and increasingly Left-wing dominated Socialist Party in this country and the Social Democrats of Germany he would do well to take another look and perhaps take a trip across the Channel to discover the truth.
    Mr. Adley: Is not the simple answer to the hon. Member for Aberdare (Mr. Evans) that in West Germany and Austria there are responsible trade union organisations that appreciate the importance of productivity and would not dream of failing to understand the relationship between wage claims not backed by productivity and increasing unemployment?
    Mr. Lawson: There are, as my hon. Friend suggests, many reasons why those two countries have been able to achieve considerably lower rates of inflation than we have, as a result of which, of course, they enjoy lower interest rates. The increase in interest rates over the past year in this country has been on average rather less than in most other European countries, including the Federal Republic of Germany.
    Mr. Gordon Wilson: Since the Government's centralised policies, which include having an overall high interest rate, are destroying jobs in areas of high unemployment will the Financial Secretary and his Department consider the possibility of lower interest rates in areas designated as being of high unemployment in special development areas?
    Mr. Lawson: If we were to reduce interest rates prematurely and excessively, thus allowing the money supply to get out of control, and allowing a resurgence of inflationary forces throughout the economy, we should do far more to increase unemployment in the regions and throughout the United Kingdom than will any result of the policies that we are now pursuing.

    European Community Budget (United Kingdom Contribution)
    Mr. Marlowasked the Chancellor of the Exchequer whether he will make a statement on the payment of the United Kingdom contribution to the Common Market.
    Sir Geoffrey Howe: I have nothing to add to the statement which my right hon. Friend the Lord Privy Seal made to the House on 2 June.
    Mr. Marlow: Can my right hon. and learned Friend help me? I have been trying with his Department and others to discover, over and above our net budget contribution, the net cost to the United Kingdom consumer of having to buy food at common agricultural policy prices rather than world prices, and the net benefit to other countries in Europe such as France? Not only myself but many other hon. Members and people in the country would like to the answer to that question.
    Sir G. Howe: If my hon. Friend will table a question on that subject or write to me about it I shall be glad to answer him, but not when he tables a question about payment of the United Kingdom contribution.
    Mr. Healey: Is the Chancellor aware that the Financial Secretary told the House last week that the Government have not the slightest idea by how much the public sector borrowing requirement will be reduced this year as a result of the agreement in Brussels? Will he confirm the general estimate that the PSBR will fall this year by under one-third the amount by which he claims the European countries will reduce our net budgetry contribution? Does this not reveal as even more fatuous the suggestion by the Prime Minister the other day that interest rates would fall faster this year as a result of the agreement in Brussels?
    Sir G. Howe: The right hon. Gentleman knows more about fatuity than most people, but he should surely acknowledge that a reduction in the PSBR is likely to be a significant factor affecting interest rates in a downward direction. My hon. Friend did not tell the House, as the right hon. Gentleman sought to suggest, that it was not possible to fore
    738
    cast the reduction. He said that it was not possible to make a precise forecast. and nor is it, as, again, the right hon. Gentleman well knows. The PSBR in the current year, and in subsequent years, will be substantially lower as a result of the settlement achieved by my right hon. Friend the Prime Minister—achieved by this Government, and so manifestly not achieved by the last Government.
    Mr. Healey: Will the Chancellor give us an imprecise estimate?
    Sir G. Howe: The settlement, which the right hon. Gentleman should be generous enough to acknowledge as substantial and successful, will make a substantial reduction in the PSBR.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Skinnerasked the Prime Minister if she will list her official engagements for 26 June.
  The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be having further meetings with ministerial colleagues and others.
  Mr. Skinner: Now that the Prime Minister and her Government have helped to smash low-paid industries such as textiles, boots and shoes, carpets and many others, now that she is sacking dinner ladies up and down the land, and now that she has shunned the nurses, does she have to use her vidictiveness against women cleaners in the various Government Departments, which has resulted in the mass lobby today following the sacking of 68 women cleaners at the Ministry of Defence at Bath and the introduction of a private contracting scheme? [HON. MEMBERS: "Too long."] Why does she not do the women in the country some good—
  Mr. Speaker: Order. The hon. Gentleman must be fair to others who want to ask questions.
  The Prime Minister: Dealing with the first two questions that the hon. Gentleman asked, on textiles we are carrying out the multi-fibre arrangement negotiated by the last Government. On carpets, we

  739
  have secured some reduction in imports due to the action of my right hon. Friend the Secretary of State for Trade. On the hon. Gentleman's many other complaints, I point out to him that during the year from May 1974 to June 1975 unemployment increased under his Labour Government by 54 per cent. Over the same period between 1979 and 1980 it increased by only 27 per cent.
  Mr. Woolmer: On a point of order, Mr. Speaker.
  Mr. Speaker: Can the hon. Gentleman raise it at the end of Question Time?
  Mr. Woolmer: May I immediately, in the interests of correcting the Prime Minister, point out—
  Hon. Members: No.
  Mr. Speaker: Order. No, the hon. Gentleman may not. That was a very good try, but not good enough.
  Mr. Kershaw: Does the Prime Minister recall that there was a rally in Hyde Park on Sunday at which the right hon. Member for Ebbw Vale (Mr. Foot), the deputy Leader of the Opposition, spoke against nuclear weapons? Has my right hon. Friend any information as to whether the right hon. Member for Stockton (Mr. Rodgers) is in charge of Labour defence policy—
  Mr. Speaker: Order. The Prime Minister is not responsible for the Opposition. I have said that before.
  Mr. David Steel: After the statement issued at the Venice summit, do the Government intend to expand investment in the coal industry? If so will the right hon. Lady look again in particular at the Department of Industry's refusal to sanction the investment necessary for the Phurnacite plant in South Wales?
  The Prime Minister: Investment in the coal industry is financed by the external finance limit and is of the order of £600 million. It is not for us to say precisely where the money should go.
  Mr. Anthony Grant: While I accept that my right hon. Friend is not responsible for the Opposition, may I ask whether she has, nevertheless, had an opportunity today to study the latest
  740
  outbursts of the Labour Party National Executive Committee and its wild allegations against our authorities in Northern Ireland? Does she think there is any truth in that, or is there no limit to the lunacy of that crazy body?
  The Prime Minister: If my hon. Friend is seeking my views on the statement of the National Executive Committee of the Labour Party against Northern Ireland, I think that the views it put forward were disgraceful.
  Mr. Molyneaux rose—
  Hon. Members: "Come on, Jim."
  Mr. James Callaghan rose—
  Mr. Speaker: Order. I had called the leader of the Ulster Unionist Party.
  Mr. Molyneaux: With regard to proposals for the future administration in Northern Ireland, will the right hon. Lady ensure that any statement on those proposals will be made to Parliament, which is the body to which such suggestions should be addressed?
  The Prime Minister: The proposals are expected to be published next week. They will, of course, be published in a paper which will be presented to the House of Commons. It is fully expected that my right hon. Friend the Chancellor of the Duchy of Lancaster will provide facilities for a debate not long after that. If the right hon. Gentleman requires a statement in addition, perhaps he will consult my right hon. Friend the Chancellor of the Duchy of Lancaster.
  Later—
  Mr. Adley: On a point of order, Mr. Speaker. Would you care to add to your ruling about the position of my right hon. Friend in answering questions about Opposition policy? In her role as First Lord of the Treasury, she has responsibility for taxpayers' money. You must be aware, Mr. Speaker, that Opposition parties in this House are funded by the British taxpayer, and that, therefore, the British taxpayer surely has a right to know who is speaking for the Opposition on matters such as—
  Mr. Speaker: Order. The answer to the question is that Ministers, including the Prime Minister, may be questioned only on those matters for which they are

  741
  responsible to this House. As yet, the Prime Minister does not claim responsibility for speaking for the Opposition. [An HON. MEMBER: "Who does?"] Order. We have had enough trouble for this week. It was a frivolous point of order, if I may say so with respect to the hon. Member for Christchurch and Lymington (Mr. Adley). I have given a clear ruling, which I also gave in the previous Parliament, when I took a similar line.
  Mr. Butcherasked the Prime Minister if she will list her official engagements for Thursday 26 June.
  The Prime Minister: I refer my hon. Friend to the reply which I have just given.
  Mr. Butcher: Does not my right hon. Friend agree that the increased application of information technology is crucial to our future economic well-being? British telecommunications engineers and software analysts are among the best in the world, and an enlightened public purchasing policy in this area could greatly assist in enhancing our skills as well as generating thousands of new jobs.
  The Prime Minister: I am happy to confirm that we have an excellent information technology industry. In some spheres, such as Viewdata, Prestel, fibre optics and the new telecommunications system X, we lead. I agree with my hon. Friend that we must use public purchasing to enable those companies to increase their exports.
  Mr. James Callaghan: The right hon. Lady frequently tells us that firms close and unemployment is caused because firms are not competitive. Will she tell us how she reconciles that with the letter that appeared in The Times yesterday about the caravan industry, stating that it is in an efficient industry, with a 97 per cent. share of the home market, and a healthy export record, and that it is now being brought "close to ruin" by Government policies. How does she reconcile that with her view that it is the uncompetitive firms that go bankrupt?
  The Prime Minister: With regard to any particular firm that finds itself in difficulty—
  Mr. William Hamilton: Industry.
  The Prime Minister:—or industry—there may be a number of different reasons. Many of us remember when the former Labour Chancellor of the Exchequer put up purchase tax and value added tax to about 25 per cent. That almost ruined the caravan industry. There are a number of industries or firms that will find themselves in difficulties. That is inevitable, partly because of the world recession—to which the IMF referred today—and partly because we have not yet squeezed inflation out of the economy. The right hon. Gentleman used to give that top priority. Until we have squeezed inflation out, we shall not have a firm base from which to go forward steadily to expand.
  Mr. Callaghan: When will the right hon. Lady take this problem seriously? Does she not recognise that there are industries that are competitive and that are holding their own at home and abroad? They do not fear competition, but it is alleged that, mainly as a consequence of Government policies, this industry, a healthy, growing British industry with a fine export record is close to ruin. What does the right hon. Lady intend to do about it?
  The Prime Minister: We have to continue policies which, as a top priority, will try to squeeze out inflation. The most competitive companies will survive and. as the Department of Trade report announced a few days ago, they have an excellent record. The most competitive and best companies will indeed survive, and we are grateful for that.
  Sir Paul Bryan: Will my right hon Friend find time today to assure our NATO allies that the policy of unilateral disarmament advocated by the Labour Party in its party political broadcast and at its one-day conference, represents the views of only a tiny fraction of the British people?
  The Prime Minister: I believe that the vast majority of the British people wish everything that we stand for in this country to be well and truly defended. We believe that any policy of unilateral disarmament is a policy of unconditional surrender.
  Mr. Barry Jones: Is not the future of the textile and steel towns bleak and frightening under the right hon. Lady's

  743
  leadership? What urgent help can the right hon. Lady give to the sizeable township of Flint—a steel and textile-producing town which currently suffers a male unemployment rate of 36 per cent.? What urgent and fundamental change will she make in her economic strategy, to save not only this town, but British manufacturing industry?
  The Prime Minister: The hon. Gentleman is asking us to change our whole economic policy—
  Hon. Members: "Yes."
  The Prime Minister: He is asking us to do one of three things—
  Hon. Members: Resign.
  The Prime Minister: To tax more, to borrow more or to print more. Which is it?
  Mr. Kenneth Lewis: Is my right hon. Friend aware that there is one important matter that concerns industry and commerce in this country—indeed, in any country—represented by a 10-letter word—perhaps a "No. 10 letter word"—"confidence"? Does not my right hon. Friend accept that it is important that at this time industry should be provided with the maximum of confidence? Will she encourage her Ministers to make speeches and policies that engender confidence, because that is important?
  The Prime Minister: The vast majority of people in this country have confidence that our policies will take us through to an expanding economy and greater prosperity. Those policies were confirmed by the Venice summit last weekend.
  Mr. Dormandasked the Prime Minister if she will list her official engagements for 26 June.
  The Prime Minister: I refer the hon. Member to the reply which I gave earlier.
  Mr. Dormand: Among her many engagements, why will not the right hon. Lady agree to meet a deputation from the Labour members of the TUC's Northern region? Is she aware that her recent, second, refusal is regarded as a major snub by the people of the North? Is she aware that the policies about which she has spoken are crucifying the Northern region, which not only has the highest unemployment rate in the country, but is now rapidly becoming a scene of devastation, not least because of the decision on the Consett steelworks. Will the right hon. Lady reconsider her decision so that we can present the case to her personally, in all its horrifying details?
  The Prime Minister: The answer is "No, Sir". If the hon. Gentleman wishes to take a deputation, I am sure he will do so to one of my right hon. Friends—
  Mr. Winnick: What a callous woman.
  The Prime Minister: I cannot act as a court of appeal for each or any of their decisions with regard to economic policy. Does the hon. Gentleman wish to increase taxes, increase borrowing, or print more money? Which?
  Sir W. Elliott: Is my right hon. Friend aware that on her very recent visit to the North-East of England, people at all levels of industry were highly impressed by her grasp of the region's difficulties and her understanding and sympathy for them? Will she take it from me that she will be most welcome in the region whenever she cares to return?
  The Prime Minister: I thank my hon. Friend. As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) pointed out in the debate on unemployment, the Labour Party twice doubled unemployment in the North-East, so it has nothing to boast about.

BUSINESS OF THE HOUSE
Mr. James Callaghan: Will the Leader of the House state the business for next week?
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr Norman St. John-Stevas): The business for next week will be as follows:
MONDAY 30 JUNE—Progress on remaining stages of the Civil Aviation Bill.
TUESDAY 1 JULY—Supply [24th Allotted Day]: Until about 7 o'clock there will be a debate on an Opposition Motion on Inmos.
Afterwards, there will be a debate on a Liberal motion on the impossibility of controlling inflation and unemployment without a prices and incomes policy.
Motions on the Financial Assistance (Offshore Supplies Grants) Scheme and on the Petroleum (Production) (Amendment) Regulations.
WEDNESDAY 2 JULY—Debate on European Community Documents COM(80) 147 on convergence and budgetary questions, 7943/80 and 7944/80 on the Community budget settlement, 5437/80 and 7767/80 on the budget, and 7389/70 on fisheries policy, and on the conclusions of the meeting of the Foreign Affairs Council on 29–30 May annexed to the explanatory memorandum to 7943/80.
Motion relating to the Education (Publication of School Proposals) (No. 2) Regulations.
THURSDAY 3 JULY—Progress on remaining stages of the Local Government, Planning and Land (No. 2) Bill.
FRIDAY 4 JULY—Private Members' Bills.
MONDAY 7 JULY—Consideration of Private Members' motions until 7 o'clock.
Afterwards, completion of Report stage of the Civil Aviation Bill.
EEC documents to be debated on Wednesday 2 July
The relevant reports of the European Legislation Committee are as follows:
24th Report, HC 159-xxiv (1979–80), para 1
28th Report, HC 159-xxviii (1979–80), para. 1
35th Report, HC 159-xxxv (1979–80), para. 1
36th and 37th Reports (1979–80): Not yet published, but available in typescript form in the Vote Office.
Mr. Callaghan: With regard to Tuesday's business, will the right hon. Gentleman inform his colleague the Secretary of State for Industry that we tabled our motion on the question of Inmos in the hope and expectation that after the long delay that has taken place we shall get a decision on the financing of this important matter and also on the siting?
Mr. St. John-Stevas: I am sure that there was a motive behind the motion. The right hon. Gentleman has given notice of it. I am sure that he, or whoever speaks on his behalf, will pursue that point on Tuesday.
Dr.Mawhinney: With regard to the date for the Summer Recess, is my right hon. Friend aware that those of us with families would prefer to rise synchronously with the children from school rather than with the grouse from the moors?
Mr. St. John-Stevas: Perhaps I should declare my lack of interest in those two matters; but I sympathise with what my hon. Friend said. It is desirable that hon. Members should be able to spend as much of the school holidays as possible with their families. I shall do my best to see that the House rises at a reasonable time, but if I am to achieve this objective I need the help and co-operation of the Opposition.
Mr. McNamara: In relation to what the Prime Minister said earlier, can the right hon. Gentleman tell us on what day we can expect to see a statement on the new proposals for administration in the Six Counties, and whether a statement will be made on that day about the proposals?
Mr. St. John-Stevas: I hope that there will be a statement next week on the subject, and as quickly as possible after that a debate in the House.
Sir Derek Walker-Smith: Will my right hon. Friend—not as a matter necessarily of immediate urgency, and not

747
with regard to any specific individual case that may be currently exciting public interest—give sympathetic consideration to a debate during this Session on the general question of parliamentary privilege, with particular regard to the possibility of instituting a suitable remedy, without infringing parliamentary privilege, for citizens who may feel themselves aggrieved?
Mr. St. John-Stevas: My right hon. and learned Friend has raised an extremely important question. A debate will be taking place on procedures in the House and it would be difficult for me to find time for the general type of debate that my right hon. and learned Friend has suggested. Perhaps I could find time for it in the new Session.
Mr. J. Enoch Powell: Would the Leader of the House make clear what was I think his intention, that the statement on the Northern Ireland constitutional document—the initial statement to which he referred—would be made in the House, as was the statement on the previous constitutional document last October?
Mr. St. John-Stevas: I do not think that the right hon. Gentleman is correct. I think that the statement on the previous constitutional document was not made in the House, so the—[Interruption.] We are dealing with a question of fact—whether there is a precedent, and the precedent is against the statement being made in the House. What I have said is that there will be an early debate on the document, which will be published, and I should have thought that this was a matter of such importance and complexity that it needed a full debate in prime time and not a statement.
Sir Bernard Braine: In considering future business, will my right hon. Friend reflect on the unfortunate circumstances in which the House was asked to agree a European Commission document on health and safety matters before we had had an opportunity of discussing draft regulations affecting our own laws? This is putting the cart before the horse. Will my right hon. Friend assure us that we shall have an opportunity to discuss these important matters before the House rises?
Mr. St. John-Stevas: I shall look into the question that my hon. Friend has raised. I have already made clear that, save in exceptional circumstances, it is the policy of the Government that decisions on EEC matters that affect legislation and our rights in this House are debated here before final decisions are taken.
Mr. Foulkes: Further to the announcement that there will be a debate in prime time on the proposals for Northern Ireland, will the Leader of the House tell us how he proposes to relate the discussions on those proposals with the outcome of the all-party discussions on the future government of Scotland?
Mr. St. John-Stevas: I know that the hon. Gentleman connects these matters in his own mind, but there is no objective connection between these two reports. The all-party talks on Scotland are concerned with improving the procedures for dealing with Scottish business within the House, whereas the discussion document on Northern Ireland deals with major constitutional proposals.
Mr. du Cann: When will my right hon. Friend be able to take further action in respect of items on which he has already assumed commendable initiatives? I have in mind matters of procedure, allowances covering secretaries' pensions, and so on. There is a list of outstanding matters on which we should all be glad to make progress.
Mr. St. John-Stevas: I am grateful for the contribution made by my right hon. Friend to these matters. There are a number of outstanding matters, including pensions for secretaries, the question of an hon. Member's secretary being remunerated adequately and quickly when he dies, and various related matters. We are well ahead with our preparations for the resolutions that are needed. Within a very short time I hope, where necessary, to put motions before the House so that a number of these important items can be disposed of.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that there is a statement on the steel industry to follow business questions. Many right hon. and hon. Members are also hoping to take part in a

749
major debate. Therefore, I hope that we can have short questions. We shall see how we go along.
Mr. English: Will the right hon. Gentleman tell us how many workers for whom he is responsible to the House have seen their real income decline by 30 per cent. since 1964? Is the number greater than 635?
Mr. St. John-Stevas: I have no idea what the statistic is, but I shall certainly look into that question. One group of workers whose position we have improved after a long period of neglect is the catering staff, in relation to pensions.
Mr. McCrindle: In view of the great importance of the Wilson committee on financial institutions, which, among other things, reaches conclusions on the nationalisation of banks and insurance companies that are diametrically opposed to the official policy of the Opposition, does my right hon. Friend feel that a short debate could be fitted in on that subject between now and the time when we rise for the Summer Recess?
Mr. St. John-Stevas: That is a very interesting suggestion. I think that the appropriate date would be an Opposition Supply day.
Mr. Dubs: Is the Leader of the House in a position to give us a date for a discussion on the prison system and the May report?
Mr. St. John-Stevas: I hope that we shall be able to have a discussion on that important report before very long.
Mr. Farr: In view of the possibility of a statement on the Floor of the House on the Northern Ireland paper, does my right hon. Friend accept that it would be a very good idea if no such statement were made, because all too often, as in the past, hasty responses to such a complex document by right hon. and hon. Members on both sides, however well intentioned, may have grievous and serious effects?
Mr. St. John-Stevas: My hon. Friend has made an important point. It is important that there should be a full debate in prime time in the House within a short period of the publication of the discussion paper so that these issues can be discussed in depth and with knowledge by all hon. Members who wish to take part.
Mr. Cryer: In view of the hard-hearted complacency and apparent indifference of the Prime Minister towards the textile industry, will the Leader of the House give us time for a debate on both the cotton and woollen industries? Does he realise that jobs in West Yorkshire are being lost at the rate of 500 a week and that in my constituency the level of unemployment is now 7·4 per cent., whereas during the whole period of the previous Labour Government it was below the national average? Is it not time that we had an opportunity for a detailed debate, so that the problems can be aired and the Government can try, for once, to produce some solutions?
Mr. St. John-Stevas: I do not think that the hon. Gentleman is right in his reference to my right hon. Friend. As the Prime Minister made clear at Question Time, the Government are making sure that the proposals on the multi-fibre arrangement are enforced. We are also prepared to replace it by further agreements when it expires.
On the question of unemployment and the textile industry, there have been a number of opportunities to raise these matters in the general economic debates that we have had. Indeed, we had one yesterday.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call four more hon. Members from each side and then to move on to the statement.
Miss Fookes: Will my right hon. Friend give an assurance that the important and much-delayed debate on prisons will not be tucked away on a Friday?
Mr. St. John-Stevas: I cannot give an assurance that it will be held on any particular day. This partly depends on the convenience of hon. Members and Ministers and Opposition Front Bench spokesmen. We have to get them all together. I certainly note what my hon. Friend said.
Mr. David Watkins: Has the Leader of the House noticed that 160 right hon. and lion. Members have now signed early-day motion 717 on the subject of Consett steelworks and the devastating effects that its closure will have on an entire community?

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[That this House notes that management and workers at Consett Steelworks were led by the British Steel Corporation to believe that the future of the works would be assured if they made it profitable; notes that modernisation co-operation and the sacrifice of 2,500 jobs made the works profitable and highly productive; notes British Steel Corporation's failure to justify their proposal, made without consultation, to close the works; and condemns the proposal as a betrayal which could destroy a community.]
In view of the growing concern both inside and outside the House, and the complacency expressed by the Prime Minister in answer to my hon. Friend the Member for Easington (Mr. Dormand) on the general situation in the North-East, will he arrange an early debate?
Mr. St. John-Stevas: The decision on the Consett steelworks is primarily a matter for the judgment of the British Steel Corporation. It must decide how much steel it can sell and at what places it can make the steel most economically. I appreciate the hardship that has been caused at Consett by this closure, but my right hon. Friend the Secretary of State for Industry made an announcement last week on remedial measures for steel closure areas.
Mr. Marlow: Since the anomaly still exists whereby British citizens in the Irish Republic are not allowed to vote in general elections in Ireland and Irish citizens are allowed to vote in United Kingdom elections, and since this gives rise to a great deal of public concern and irritation, will my right hon. Friend find time soon to arrange a debate on this matter?
Mr. St. John-Stevas: I cannot promise an early debate on that matter. I suppose that the worst anomaly in the relationship between Great Britain and Ireland is that we should be separated at all.
Mr. McNally: Is the Leader of the House aware that at Question Time yesterday there was pressure from both sides of the House for an early debate on a roads programme that leaves construction workers unemployed while major road programmes are either abandoned or deferred?
Mr. St. John-Steyas: I am afraid that the roads programme has had to make its
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contribution to the necessary cutback in Government expenditure so that private industry may expand and create the prosperity to which we all look forward.
Mr. Kilfedder: Is a one-day debate adequate for the Northern Ireland devolution proposals, bearing in mind that at most only six hours will be available and even less time than that for Northern Ireland Members? Does the right hon. Gentleman recall the point that I put to him last week, which I repeat now in the presence of the Prime Minister, that he should arrange for an additional debate to take place where it matters for the Ulster people—in Northern Ireland—with the Northern Ireland Committee meeting in Belfast, perhaps at Stormont, so that the matter can be debated fully in the presence of Ulster people?
Mr. St. John-Stevas: It would mean an alteration in the rules of the House were the Northern Ireland Committee to meet in Northern Ireland or elsewhere. I certainly think that we need a full debate on the proposals for Northern Ireland when they are published. I shall consider whether this can be extended in any way.
Mr. O'Neill: Will the right hon. Gentleman find time for the Secretary of State for Scotland to make an announcement on the future of Scottish colleges of education? We are expecting something to happen and we do not want it to happen while the House is in recess. Therefore, will the right hon. Gentleman find time, before the end of the second week in July, to have this gentleman report his intentions to the House?
Mr. St. John-Stevas: At the hon. Gentleman's request, I shall consult my right hon. Friend the Secretary of State for Scotland to see whether that would be possible.
Mr. Charles Morrison: Is my right hon. Friend giving further consideration to the outstanding recommendations of the Procedure Committee? Will he find time for a debate before the Summer Recess?
Mr. St. John-Stevas: I have been conducting widespread consultations with hon. Members, with representatives of the Opposition and with representatives of Committees, to discover the wishes of the

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House. A debate will be held on those issues before the House rises for the Summer Recess.
Mr. Greville Janner: As there is growing pressure on social security offices, may we have a debate on the undignified state of many of those premises and on the unpleasant atmosphere in which the staff must work? Is my right hon. Friend aware that staff should have moved out of some premises, such as those in Newark Street, Leicester, long ago? Is he further aware that such pressures can create hardship for those who are already suffering?
Mr. St. John-Stevas: I cannot promise an early debate. However, the hon. and learned Member is right. Such offices and Government Departments should be made as cheerful as possible.

BRITISH STEEL CORPORATION
The Secretary of State for Industry (Sir Keith Joseph): With permission, Mr. Speaker, I wish to make a statement on the British Steel Corporation.
As the House was told on 10 June, for the last financial year the BSC estimates a loss before adjustments of £450 million from ordinary activities. There are also extraordinary items, consisting of redundancy and other closure costs and a writedown of over £1,100 million of fixed assets. Final figures will be available in a few weeks' time. That was all for the last financial year.
I now turn to this financial year. As the House knows, the Government have made £450 million of taxpayers' money available as the external financing limit. The chairman has warned me for many months that without corrective action the BSC's needs would greatly exceed the external financing limit. However, he also told me that he was seeking remedies and that he was not asking for more cash. On 6 June, however, he wrote to me that, even allowing for the remedies being pursued, his board foresaw an additional cash requirement of about £400 million in the financial year 1980–81 over and above the external financing limit. He wrote that unless the Government agreed to the factoring of home debtors and the sale and leaseback of major assets outside the external financing limit—to provide the £400 million—the BSC could not carry on trading, and the board would have to recommend the liquidation of the business.
Measures such as the BSC has proposed would, of course, only postpone the day of reckoning. As for liquidation, the Iron and Steel Act 1975 makes no provision for this. The £400 million figure is based on provisional trading forecasts. A firmer figure, which may well be larger, will have to await an up-to-date assessment of the BSC's trading position.
Over the past year, the market has fallen away both at home and abroad, with a depressive effect on prices. Meanwhile, the BSC's costs have been rising sharply. The long strike has, as I warned the House—[HON. MEMBERS: "We warned the right hon. Gentleman"]—made the BSC's sales and job prospects and the cash problems worse.

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We are not satisfied that the corporation has yet taken with sufficient speed and determination all the action open to it to reduce its cash requirement in 1980–81. Mr. MacGregor, who takes office as chairman next week, will need time to produce new proposals.
Until Mr. MacGregor has made his proposals, and until we are satisfied that the corporation is taking the necessary measures, we are not prepared to reconsider the level of the external financing limit. Should the Government decide to advance additional funds, any money required would involve a winter Supplementary Estimate and if needed before then would be provided by a repayable advance from the Contingencies Fund. I shall report to the House again later in the year.
Meanwhile, having considered the corporation's concern about taking on fresh financial commitments, I have asked the BSC to continue trading as an ongoing business. I have told it that in the last resort the Government would have to ensure that creditors of the corporation had their claims met in full.
The BSC has for years suffered from political interference and insulation from market realities. The taxpayer has already contributed over £4,000 million to BSC over the past five years. A further £450 million is being made available in the current year, and we are now being asked to consider yet further calls on the taxpayer. The BSC is still faced by excess capacity and a lack of competitiveness in an intensely competitive market. It is for the new chairman to use every practicable means, including a further review of capacity and disposals, to bring the corporation's cash requirements as close as practicable to the external financing limit and to see whether it is possible to restore the corporation's financial and trading position.
Mr. John Silkin: Is the Secretary of State aware that the statement will cause great unhappiness and uncertainty particularly in areas such as Scotland, Wales and the North, which are suffering from the worst unemployment since the war? Is he complaining about the cost of redundancies and closures—as he seems to be—despite the fact that he demanded them and blamed the previous Labour
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Government for not instituting them? Opposition Members have warned the right hon. Gentleman for over a year that his cash limits were unrealistic and impossible. Is he now telling us that that is true, and that he became aware of it only on 6 June? If he had listened to our advice and taken steps before last December there would not have been a steel strike and this situation would not have arisen.
Despite his indecision, and despite a year of dithering, will the Secretary of State state clearly and unequivocally whether he is in favour of a British bulk steel industry?
Sir K. Joseph: I accept that the statement will be distressing to those in the regions, particularly to those connected with the steel industry. It will also be distressing to taxpayers, because they hoped that their large payments to the BSC would result in a profitable industry. I was not complaining about the redundancies and closures. The Government have made special provision for those costs from the taxpayer. I am being asked to accept that if we had followed the Opposition's advice and bought off the strike, or avoided it by relaxing the cash limits, all would have been well. When the Labour Party was in office it continually deferred the closures that were clearly needed. It therefore delayed making redundancies until a time of relatively high unemployment. If it had not delayed, the job losses could have been absorbed easily, because there was then less unemployment than the world situation has now created. The right hon. Gentleman asked whether I was in favour of the bulk steel industry. The answer is "Yes", if it can be made profitable.
Mr. Patrick McNair-Wilson: Does not my right hon. Friend agree that the corporation's target became unrealistic on the day that the strike started, and that no buying-off of the strike could have altered that? Will not he further agree that, as a result of the world recession, substantial losses will continue in the bulk steel industry? Will he consider undertaking a far-reaching financial reconstruction of the industry which includes the introduction of private capital?
Sir K. Joseph: I am not sure that I accept the point that the target was unrealistic when the strike began because I believe that the purpose of the British Steel Corporation to achieve greater competitiveness and less overmanning was an important component of any attempt to cease to be a burden on the taxpayer. I certainly accept that steel companies all over the Western world are in difficulty, and it is for the new chairman to consider whether there is a part for private capital to play in various areas of the steel industry.
Mr. Beith: How can the new chairman persuade any group of steel workers to make their units profitable when they see that the price of profitability is closure? To add insult to injury, the cost of closure is added to the present difficulties of the corporation.
Sir K. Joseph: I think that the steel workers will well understand that it is in their own interests to make the industry in which they serve profitable.
Mr. Kenneth Baker: Will not my right hon. Friend agree that the grave statement that he has made this afternoon means that a large part of the financial position of the British steel industry is a direct and tragically inevitable consequence of the strike earlier this year? Does my right hon. Friend agree that the unions and the BSC must bear a large degree of the responsibility for the strike for imposing upon their industry such a grievous self-inflicted wound? Is it implicit in my right hon. Friend's statement about the additional support that the Government now envisage for the BSC that as we come out of the recession in the next two to three years there will be a slimming down for a viable British steel industry?
Sir K. Joseph: I agree with my hon. Friend that the strike and its consequences in the lost share of the home market bear a large responsibility for the problems now facing the BSC. I also agree that it is possible, under the new chairman and with the co-operation of all concerned, to build a satisfactory steel industry in the future.
Mr. Gregor MacKenzie: Will the Secretary of State say whether the measures taken by the BSC are in line with the comments made by the
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chairman-designate in his recent utterances in Wales and elsewhere which created a great deal of bitterness throughout the country? Secondly, does the right hon. Gentleman ever think about the social cost rather than the profits involved in these closures?
Sir K. Joseph: I cannot answer for the recommendations that the chairman will make or the actions he will take when he has had the time to consider the matter. His actions are bound to include a review of capacity and disposals, and I am sure that they will also include other possibilities, such as a review of overheads, buying and stocks and so on.
As for the social costs, I hope that the right hon. Gentleman will realise that the country, the economy and the taxpayer have handed over £5,000 million in the last five years which could have stayed in people's handbags and pockets, or could have gone in part into public services. That is a measure of the social cost that has been invested in the British Steel Corporation in the hope of making it profitable.
Mr. Grylls: Does my right hon. Friend agree that the deteriorating position of the BSC, which he has announced today, indicates the deplorably inadequate financial control within the corporation and more than justifies his own determination to secure the best man for the job as chairman, almost irrespective of cost? He has done the right thing, and what he has said today simply proves the need to have the very best man as chairman.
Sir K. Joseph: I note what my hon. Friend says, and I am glad that he agrees with me that the BSC deserves the best man that we can get.
Mr. Abse: Is the Secretary of State aware that his statement today will be clearly interpreted in Wales as a characteristic incitement on his part to further savage cuts and further redundancies in Wales? Does he have any idea of the social tensions that he is creating in the Principality? Is he aware of the consequences for the coal industry that could flow from further cuts? Does he have any realisation of the consequences of the fanatical Messianic course that he is taking, which is leading Wales to believe

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that the Government have taken leave of their senses?
Sir K. Joseph: The hon. Gentleman does no service to his constituents by devoting his eloquence to the concept that people can continue at work making goods that nobody wants to buy.
Mr. Kenneth Lewis: Is my right hon. Friend aware that there is no doubt at all on the Government Benches that the horrendous losses that he has announced today arise largely out of the legacy that he inherited? I believe that my right hon. Friend indicated that he was not prepared at this stage to ease the cash limits and therefore this matter would be reviewed in the autumn. In the meantime the British Steel Corporation would have to pay its bills as best it could. Will my right hon. Friend make sure, when he discusses these matters with the BSC, that the corporation does not withhold payment of bills to the private sector? That would only make the position worse with private industry. There is certainly a danger that the BSC may do that.
Sir K. Joseph: I agree with my hon. Friend, but I do not envisage that that situation will arise. I accept the possibility that it will be necessary to announce an extension of this year's cash limits, but I do not accept that finally, nor do I put a figure to it until the new chairman has had time to consider the position.
Finally, I must agree with my hon. Friend that not only I but my predecessors in the Labour Government have had to face the problems inherent in nationalisation of a great trading activity. Nationalisation removes the spontaneous capacity and willingness to adapt that exists in the private sector.
Mr. Campbell-Savours: In considering the international price structure for steel products, does the Secretary of State believe that the BSC is in a position to pass on to its customers the increases in energy prices being required by the nationalised industries?
Sir K. Joseph: That is one factor in the trading position of all firms. It leads to the need in all firms, including those that are nationalised, to operate as efficiently as possible.
Sir Anthony Meyer: Is my right hon. Friend aware that for those of us who are even more concerned about unemployment than about inflation—and that goes for any of us representing Welsh seats—his grave statement must further increase our fears that by pouring more and more money into propping up what remains of the steel industry we may be endangering more jobs than we are saving?
Sir K. Joseph: My hon. Friend is right in referring to this tragic diversion of money that could be fertilising new activities into the support of activities that are not making a profit. I must quarrel with him for suggesting that we can put unemployment as a priority above inflation, as if the two were unconnected. I adopt the words of the right hon. Member for Huyton (Sir H. Wilson), who said that inflation was the father and mother of unemployment.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been rising in their places from the beginning of supplementary questions.
Mr. Armstrong: Is the Secretary of State aware that people in Consett, Durham and Wales pay taxes just like anyone else? Does he realise that his statement this afternoon, which was quite devoid of any reference to the consequences for hard-working men and their families, will be regarded as a short-term petty punishment of those who reluctantly—in fact, they felt they had no option—went on strike earlier in the year? Does he not recognise that to write off the steel industry, which is so vital to the future of this country, in such an offhand way in order to support his own theories will be seen in the country as completely beyond comprehension? Does he recognise what is happening to families in Durham?
Sir K Joseph: But the right hon. Gentleman understands as well as I do that other jobs will be destroyed if money is taken to support people producing what others will not buy. Of course we feel for Consett. We announced last week the availability of taxpayers' money to support new industries in Consett.
As for the strike, it was a most misguided strike, as we warned from the beginning.
Mr. du Cann: In the context of the most grave statement about an industrial matter that I have heard in the House, with its frightful economic and family implications, and the appointment now of a new chairman, I should like to put two points to my right hon. Friend.
First, is it possible to ensure that the House has a further statement on the matter before we rise for the recess? Secondly, as we, fortunately, still have a viable, strong and prosperous steel manufacturing idustry in the private sector, will my right hon. Friend give the House the undertaking—on a matter about which I have corresponded with him—that the corporation will do nothing at taxpayers' expense to make that private sector unprofitable or to put its future in jeopardy?
Sir K. Joseph: I fear that I cannot give my right hon. Friend the assurance that he wants about the timing of the next statement, because there are only a few weeks before the recess and Mr. MacGregor becomes chairman next week. He must be given the chance to assess the position.
I should like to give my right hon. Friend the assurance that he seeks in his second question, but I cannot do so without qualification. All that I can assure him is that both sectors, the public and the private, operate under commercial imperatives, and, as he knows, we are restricting the subsidy as much as we humanly can.
Mr. David Watkins: Reverting to one of the right hon. Gentlemen's earlier answers, may I ask whether he is unaware of the fact that in Consett the steel workers co-operated in making the works viable to the extent of negotiating the sacrifice of 2,500 jobs, and that their reward has been to be told that the works is to be closed? Will he impress on the new chairman of the BSC that a major contribution, among others, that he can make towards making the corporation viable is to avoid paying out more than £30 million in redundancy money and to keep open the works, which is now forecast to make a profit of £7½ million in the current year?
Sir K. Joseph: I pay tribute to the cooperation of the work force concerned. I must point out that they made a profit only for a very few months in the past few years. I shall of course, ensure that
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the chairman reads the exchange of views in the House today, but I would not want to give false hope to the work force of Consett that the decision that has been made will be reversed.
Mr. Ian Lloyd: No one would wish to minimise the massive social, political and economic problems that these figures reveal, but may I ask whether they do not point in the most dramatic and stark was to a massive opportunity forgone, as my right hon. Friend has himself hinted? Has my right hon. Friend or his Department made any estimate of what might have been created in terms of new employment, new exports and new prosperity had £5,000 million been invested in silicon rather than steel?
Sir K. Joseph: I am not absolutely sure that it would have occurred if it had been routed through the Government or a nationalised industry, but I agree with the general concept.
Mr. Barry Jones: Has not the policy of the strong pound destroyed the potential for exports of the corporation? As 7,000 jobs have already been lost at Shotton, can the right hon. Gentleman give some indication that the remaining 3,000 jobs are safe? Does his statement presage that he is considering the large-scale selling off to private enterprise of some of the corporation's assets? Linked to that, has he any news of the possibility of the Lonrho bid for Shotton?
Sir K. Joseph: The strong pound has some advantages, as well some disadvantages, in reducing the price of imported material that British Steel uses. It is not within my power under the Act to initiate or ask for any sale of main-line assets, nor is my consent needed. It is up to the management. I cannot give any information about the Lonrho bid.
Mr. Lee: Does my right hon. Friend agree with the following three observations: first, that the figures that he has announced are absolutely appalling; secondly, that we are paying the price of the Labour Government's failure to slim down the industry in time through political weakness; and, thirdly, that as far as Conservative Members are concerned, Ian MacGregor cannot arrive a moment too soon?
Sir K. Joseph: I agree with the first and third part of my hon. Friend's comments. On his second comment, I suggest that deferment of difficult decisions costs jobs and does not save them.
Dr. Bray: Is the right hon. Gentleman aware that the evidence behind his statement will be examined very carefully in this House and elsewhere to see whether it is a piece of window dressing to give the new chairman of the BSC a low base line from which he can hardly fail to improve? Is the right hon. Gentleman also aware that as banker to the corporation he owes a duty to the House to inquire into the detailed causes of these figures. [HON. MEMBERS: "Nationalisation."] Having done so, will he say exactly what figure is due to the strike and what figure is due to the disastrous consequences of his economic policy?
Sir K. Joseph: I wish that there were such an explanation—or, rather, I do not wish it, because it would be dishonourable. I wish that the explanation were as simple as the hon. Gentleman suggests. Does he really think that the board of British Steel—and he can look up the names of the members—would have written solemnly to the Government saying that unless some cosmetic device were adopted British Steel would have to be liquidated, if there were not real problems? No, indeed. The market has fallen. The strike has caused grave damage to the industry. Of course the House will want to examine all this in detail.
Mr. Bruce-Gardyne: Reverting to the question from the hon. Member for Flint, East (Mr. Jones), may I ask my right hon. Friend whether he agrees that in the circumstances of the statement, which is bound to have extremely sombre implications for taxpayers and the PSBR, whatever the statutory position may be, there is a case for the Department urging the corporation to take very seriously the possibility, wherever it arises, of the disposal of assets to the private sector?
Sir K. Joseph: We certainly shall not stand in the way.
Mr. Allen McKay: Does the Minister realise that his statement that the steel strike played a great part in the present position is an indictment of himself and his Government for their sheer
764
neglect and their inability to recognise an industrial relations problem? If he looks back through Hansard, he will see that many Opposition Members warned him exactly what the consequences would be, and that had he been able to recognise the situation he would have got away with at least a lower increase in wages than he got away with eventually.
Sir K. Joseph: The hon. Gentleman wants the Government to continue the practice of recent years, which has led to the country to its present position.
The strike was more about how any pay increase could be financed than about the size of the increase. The argument on which the strike was based was whether the bulk of the pay increase would be financed by higher productivity or should be financed by the taxpayer. It seems to me that it would have been absolutely wrong for the Government to step in to stand between the implications of what the strikers were wanting and the results. If we had intervened we would have given a further setback to realistic bargaining between employees and employers.
Sir Ronald Bell: Are there not steel industries in the world with strikingly different manning levels which are not in such dire troubles as the BSC? Do not the huge figures announced by my right hon. Friend show that year after year, probably for social considerations, the challenge of international comparison was evaded?
Sir K. Joseph: Yes, but I must say that there are individual parts of the BSC in which manning is at international standards. If those standards had been allowed from the beginning, instead of being resisted by the unions and not insisted upon by management, there would not be this situation today.
Mr. Ioan Evans: Is the Minister trying to denationalise the steel industry without compensation, and was that one of the reasons why he sought to provoke the strike in the industry? Does he not realise the repercussions that this is having on the coal industry in South Wales and on numerous industries in the private sector, which will be suffering as a consequence of the action that he is taking?
Sir K. Joseph: Does not the hon. Gentleman realise that low productivity

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and uncompetitiveness in any industry repercusses on all industries, pensioners and patients in hospitals throughout the country?
Mr. Marlow: Does my right hon. Friend agree that the figure of £5,000 million which he mentioned amounts to over £300 for every family of four in the country? Is not this the enormous price we must pay for having a publicly owned monopoly? As a first step to putting things right, will he allow the people of Consett, should they so wish, to take the assets of Consett, add the redundancy payments that they will receive, and operate this as a private steel works, to give them some hope for the future and increase the size of private steel-making capacity in this country?
Sir K. Joseph: I agree with the first part of what my hon. Friend said. The second part is for the people of Consett.
Mr. Skinner: Will the Minister explain why he can always find time to bring forth statements on sacking workers, or attempts to sack workers, especially those who work in heavy industry? I instance his statement today. He speaks about the horrific figures associated with the operations of the British Steel Corporation. However, have there not been many occasions, including one recently, when Stone Platt Industries, for instance, was on the verge of collapse and a group, together with representatives of the Bank of England, was hurriedly set up to rescue it?
Does that not compare badly with the announcement made when the Minister was in office under the previous Tory Prime Minister, when a fund of £1,300 million was set up to bail out a few property speculators, including the right hon. Member for Taunton (Mr. du Cann)?
Sir K. Joseph: The hon. Gentleman uses his position in the House to throw aspersions all over the place. The fact is that the problems of the steel industry flow from management and labour producing steel uncompetitively.

OFFICIAL REPORT (STANDING COMMITTEES)
Mr. English: On a point of order, Mr. Speaker. I wonder whether you could assist us. With your long experience as a Chairman of Standing Committees, you will know that the practice hitherto has been that the daily parts of the Official Report—the white copies—are published, we hope, in time for the next meeting of the Committee, and that they are then bound up into a brown paper-back volume, which, equally, we hope, comes out in time for the Report stage.
No fewer than 12 Bills having more than one daily part have not had a brown volume issued, with the result that hon. Members dealing with Report stages—some of the Report stages have passed—have to deal with a mass of daily parts, in some cases a very large number, according to the number of sittings of the Standing Committee concerned. The earliest of these is the Committee on the National Heritage Act, which was concluded on 21 January this year.
It really is odd. I do not blame the Vote Office. Its staff have been of great assistance to me in trying to find out from the Stationery Office why the copies are not delivered. I do not blame the printers. It has always been the custom that these documents were never reprinted—they simply consisted of the daily parts bound together in a brown paper-back volume. However, the Stationery Office now blames the Editor of Hansard, saying that he is delaying the checking of the daily parts.
In the past, Hansard had nothing to do with it. Once the daily parts were printed, the brown volumes were produced. Later, a hard-backed volume was produced. That may be a corrected version, but that is for history.
Could you, Mr. Speaker, investigate the matter, find out who is responsible—whether it is the Government or the House authorities—and put it right?
Mr. Speaker: I undertake to consider this matter. I understand that it is a normal delay. However, I shall look into it and write to the hon. Gentleman.

BRITISH STEEL CORPORATION
Mr. Abse: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter which should have urgent consideration, namely,
"the statement of the Secretary of State regarding the British Steel Corporation."
The right hon. Member for Taunton (Mr. du Cann) expressed the view of the House when he indicated that this was the gravest statement on industrial matters that he had ever heard in the House.
That the matter is specific is clear from the way that the Secretary of State adumbrated the facts as he saw them and the lack of action which he indicated.
That this is a matter of urgency is realised by steel workers throughout the country when they are informed that the industry in which they are involved is in danger of being liquidated. That it is a matter of urgency that some action should be taken is clear when we know that one of our basic industries has hanging over its head the Damocles Sword of liquidation. It should be equally self-evident to the House that there should be a debate on such a matter.
That the matter is urgent, so as to relieve the anxieties of management throughout Britain, and that, indeed, it affects both the public and private sectors, has been amply demonstrated in all the questions that have come before the House.
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Bearing in mind the widespread anxieties that will have been caused as a result of the grave nature of the statement, I beg to ask that leave be given for a debate.
Mr. Speaker: The hon. Member seeks leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the statement of the Secretary of State regarding the British Steel Corporation."
The House will know that I do not decide whether the House discusses and debates this matter. That is not within my discretion. I do not decide anything other than the narrow question whether this matter should be debated tonight or on Monday night.
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the order but to give no reasons for my decision. I listened carefully to the hon. Gentleman, but I have to rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.
Mr. Ioan Evans: On a point of order, Mr. Speaker. In view of the serious nature of the subject of British industry, as well as the steel industry, I wonder whether we could, through the usual channels, ask for an early debate to be provided by the Government.
Mr. Speaker: The usual channels are not my concern. The hon. Gentleman can bring the matter to their notice.

ORDERS OF THE DAY SUPPLY
[23RD ALLOTTED DAY]—considered.
ORDERS OF THE DAY SUPPLY

  THE ARMY
  Motion made and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]
  4.28 pm
  Mr. J. D. Concannon: This is the last of the debates this year on the Armed Forces. As with the debates on the Royal Navy and the Royal Air Force, the theme that I am sure will run through this debate is the decision that is pending on the replacement of Polaris and its effect on the other programmes, in this case the Army, which was outlined in the Secretary of State's statement on the Defence Estimates, 1980.
  As my right hon. Friend the Member for Stockton (Mr. Rodgers) pointed out in the debate on 28 April:
  "Britain simply cannot sustain an increase in defence spending of 3 per cent. a year until 1986. Even if she could, and even if the Secretary of State stays on course, it will not be possible to maintain unchanged her commitment to the three conventional roles—in the central region, particularly with 55,000 men in BAOR, to the Eastern Atlantic and the Channel and to the defence of the United Kingdom—and an independent nuclear role. Something will have to give."—[Official Report, 28 April 1980; Vol. 983, c. 1017.]
  With defence spending this year at £10,785 million, and the cumulative effect of a 3 per cent. increase to the year 1986, plus a guess at inflation, defence expenditure by 1986 will be in the region of about £20,000 million, and that is without anything in the kitty for our own nuclear deterrent. Hon. Members on both sides of the House, notably my hon. Friends the Members for Sheffield, Attercliffe (Mr. Duffy) and for West Bromwich, East (Mr. Snape) in the debates on the Royal Navy and on the Royal Air Force, voiced apprehension about what will happen to the re-equipment programme, outlined on pages 66 to 77 of the Statement on the Defence Estimates, if the decision to carry on with another generation of our own nuclear deterrent is confirmed.
  In the debate on the 1980 Defence Estimates, the Secretary of State flatly
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  refused to publish a Green Paper on the crucial decision about the replacement of Polaris. I hope that he changes his mind. One of his junior Ministers, while in opposition, was taken to task in the debate on the Royal Air Force, for some of his views expressed, while in opposition in 1978, in book form, by my hon. Friends the Members for West Bromwich, East and for Erith and Crayford (Mr. Well-beloved). The Minister to whom I refer—it is not the Minister who will be opening for the Government in today's debate—wrote, under the heading "Britain Faces the Future Now", at a time when he was a Conservative Party spokesman on defence:
  "It is matter for conjecture as to whether the trumpets and banners will be out when Britain decides whether or not to replace the strategic nuclear deterrent, as decide she must. Will this decision be another 'moment of destiny'? Or rather more likely, a decision taken 'after full and careful consultation with our Allies' will be quietly announced?
  I happen to belong to the school of thought which believes that far more information could be given about Britain's defenses and defence installations than is currently available. In the House of Commons, comparison has frequently been made between the paltry generalisations of the usual British White Paper and the in-depth documentation available to US Congressmen."
  My hon. Friend the Member for West Bromwich, East dealt eloquently with that point in the debate on the RAF.
  The Minister went on
  "It is difficult to conduct any sort of sensible debate with the present British dearth of hard information".
  As an Opposition spokesman, I can say "Hear, Hear" to that. The rules of the House now mean that Opposition spokesmen cannot even sit in on the Select Committee on Defence. One has to try to find information from whatever corner one can. I believe that this is a mistake that will have to be rectified. If a Conservative spokesman at that time thought that he had trouble, I can only say that Opposition spokesmen now encounter even more trouble in finding information.
  The Minister went on
  "No one is suggesting the dissemination of information which would endanger the safety of the realm, but far more could be done without causing difficulties. The desire in Britain for secrecy in Government is well entrenched, and where defence is concerned, an extra layer of secrecy is provided 'in the interests of national security.'

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  A wide-ranging debate, ideally based on a Government Green Paper, would be desirable, because there can be few other questions more fundamental to Britain's strategic role in world affairs than the decision to replace the Polaris submarine-launched nuclear force. All other Britain's strategic options pale beside this.
  There is a feeling in some quarters in the Conservative Party that possession of the strategic deterrent is akin to some kind of virility symbol…There are a lot of questions to be answered before even a Conservative Government gives the go-ahead for replacement."
  I say "Hear, hear" to that. What has happened to this Minister? What has he discovered in the corridors of power that has changed his mind so quickly? Why cannot we lesser mortals in the House have the same information? The information might have the same dramatic effect on some of us.
  The Under-Secretary of State for Defence for the Army (Mr. Barney Hayhoe): I am sorry to interrupt the right hon. Gentleman. This is a technical point. I believe that it would be for the convenience of the House if, together with the general debate on the Army, we also debated the draft Army, Air Force and Naval Discipline Acts (Continuation) Order 1980, which is to be moved formally later. If he, the House and the Chair agree, I am sure that this would be for the convenience of all hon. Members.
  Mr. Deputy Speaker (Mr. Bernard Weatherhill): Would that be for the convenience of the House?
  Hon. Members indicated assent.
  Mr. Tam Dalyell: Would it not be proper to have the matter put on the Order Paper?
  Mr. Concannon: I believe that it would be for the convenience of the House also to debate the order. I intend to say a few words on the matter. I believe that my hon. Friend the Member for West Lothian (Mr. Dalyell) will have a better chance to say what he wants in a debate such as we are now holding rather than in a separate debate. The major debate—when the matter comes forward for renewal—is to take place next year. I am sure that my hon. Friend will want to say much more next year. Today, we are renewing an order that has to be renewed every year. It is very narrowly drawn. I
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  can assure my hon. Friend that it would be sensible to take it with the debate.
  If we could have some idea of the information that has so quickly changed the mind of the Minister, since he made those utterances before going into government, we should be grateful. I was informed in the last debate that the reason why we did not have a Green Paper was that this was how the matter was handled in the late 1940s. I have checked on the situation. I should have thought that the House was agreed that we have moved on since those days and that what was acceptable then no longer applies.
  I understood that one of the pledges given by the Government at the last election was that there would be more open government. Before the decision is made, the information must be made available to the House. It is not only we in the House who are interested in the relevant information but also the mass of the people outside, who have to foot the astronomical bills for defence. Those same people are at the sharp end of the battering of the Government's economic policies—the young and not so young growing band of unemployed about whom we have heard this week, including those affected by today's grave statement, and the defence Mrs. Mopps who are lobbying Parliament over worries about their jobs. They are not the only people asking questions. There are the pensioners who have been asked to pay their own Christmas bonus by having their pension put back two weeks.
  There have been cuts in sickness, invalidity, widow's, maternity and unemployment benefits. The housewife suffers from the ravages of inflation and rising prices. Many wonder what has happened to the lady who used to be seen with the shopping basket just before May last year.
  The Government are forcing increases in rents and rates, school meals, prescription charges, interest rates and mortgages. There has been the closure of hospitals, the ending of services and the diminution of many more. The work force—those still left with a job—are consistently hammered by the Government to accept a lower standard of living through their wage packet. All are demanding to know, through us, on what basis the Government will decide to spend their money, amounting to £6,000 million plus, I understand,

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  on what I have heard described as a status symbol, and an expensive one at that.
  Our friends and Allies in NATO and our Armed Forces are also worried about the effect of the decision on our contribution to NATO. My discussions with various people and groups reveal that the first priority they would like us to follow is our NATO commitment and the modernisation of our conventional NATO forces. They have no axe to grind if we continue our own so-called nuclear deterrent and our commitment to NATO. But they do have an opinion in the matter of priorities. If the straight question is whether the priority is to be another generation of our own nuclear deterrent or the re-equipment and keeping up to date of our NATO forces, I find that the answer comes down on the side of NATO. What will happen to the priorities for the Army of the re-equipment programme promised for the mid and late 1980s? Are the plans at risk?
  The Secretary of State has so far denied that there is a choice of priorities. It is the Opposition's view, and also, I gather, that of our NATO Allies, that we should re-equip our Army in NATO with the equipment to carry out the role expected of them than put back, or dilute, the re-equipment plans envisaged in the White Paper. We cannot, and should not, ask our Army, still recognised as among the best, if not the best, in the world, to use equipment that is no longer capable of doing the job that is expected.
  Pay has a bearing on morale. There are, however, other considerations to be taken into account when assessing morale. We must consider the role that Service men are asked to play, the welfare of their families, housing, education, pensions and the political backing that they receive from the House. We must ensure that they have the tools to do the job. All those matters have a bearing on the Army's morale.
  If the main battle tank is known to be vulnerable to the enemy's anti-tank weapons and if our anti-tank weapons cannot penetrate the enemy's armour, that has a detrimental effect on morale, especially among tank crews. The main battle tank is the great virility symbol of all modern armies and the nucleus around which tactics are built. The Chieftain tank is still among the best in the world.
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  It has its faults and is beginning to show its age. It is scheduled to be replaced by the MBT 80, but not until about 1990. The Army needs a better tank than the Chieftain before that date because of its vulnerability to the Russian T72 and its armour-piercing, high-velocity shells.
  What are the Government's views on Challenger, which was originally conceived for the Shah of Iran and is being built at the Royal Ordnance factory at Leeds—if we can get the steel? It could begin to be put in use in 1984 if a decision is taken soon. Will the Minister be more forthcoming about the future tank requirements of the Army and about how he sees the Chieftain replacement progressing?
  I turn to anti-tank guided weapons. Will the Milan medium-range anti-tank system be in service with the mechanised battalions by 1980, as promised? What about the studies on the next generation of ATGWs? Is the long-range ATGW still to be fitted to the Lynx helicopter? What about the role of helicopters in our Army? What is the Government's thinking on that matter?
  At the moment the Abbott self-propelled 105mm gun is in service, but I am informed that it will not penetrate the modern Russian armour. What progress is being made with its replacement, the FH70 and the SP70, which were due to enter service in the late 1980s? What about the multiple-launch rocket system which was promised for the mid-1980s? Are they all at risk, or are they waiting for a decision by the Secretary of State?
  After listening to the debates on the Royal Navy and the Royal Air Force and hearing about the vast sums required for the programmes and about the unit costs I shall put a few figures on the record, because not everybody reads the White Paper, although they might read Hansard. I shall deal with unit costs first, The Sting Ray lightweight torpedo programme costs £920 million. The Sea Eagle missile costs £350 million, new sonars for submarines cost £170 million, a nuclear-powered submarine costs £140 million, the Type 42 destroyer costs £85 million, one Tornado aircraft costs £10 million and the Puma helicopter costs £1·5 million.
  I have no doubt that they are worthy and priority projects. However, I can

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  imagine the cries of anguish in the officers' mess and other places where men gather in the Army. They will ask "What about the poor, and much maligned, bloody infantry?"
  What is to happen to the plans for the new armoured personnel carrier? The current APC, the FV432, entered service in 1963 and is overdue for a change. Is the replacement on time? Will it be our own MCV80 or the infantry fighting vehicle from the United States'? How much longer must our infantry wait for the new personal weapons which have been promised? The Army in NATO is expecting that equipment. If the plans are put back or diluted because of a decision on the next generation of nuclear deterrents, the morale of our men in NATO will suffer. If the Government decide—and there have been nods and winks—to go for another generation of nuclear deterrent after Polaris, with our commitment to NATO it is obvious that the next Labour Government will not be committed to that decision.
  Will the Minister say something about the British Army exhibition at Aldershot? He will have noticed early-day motion no. 726 signed by some of my hon. Friends. I hope that the Minister will not regard them as being part of the "loony Left". The Minister must take it seriously. For no other Army exhibition has there been so much secrecy. What is it all about? We should know. I invite the Minister to be as forthcoming as possible.
  There is no argument about the ninth report on Service pay. What is to happen to the tenth report? Will it be as readily acceptable? I was disappointed about the part in the ninth report that dealt with the Northern Ireland allowance. The report said that its value should be kept up to date. That meant an increase of 30p to £1·30 a day. That is still far behind the allowance given to the RUC and prison officers in Northern Ireland.
  I thought that I had fought and won the argument with the powers that be and that a catching-up process would continue until the level of the allowance paid to the RUC and the prison officers was met. It is a sore point with our Forces in Northern Ireland. I managed to get the allowance increased by 100 per cent., but that was only from 50p to £1.
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  I hope that in the next round the British Army in Northern Ireland will be treated on a par with the RUC and prison officers.
  I turn to the question of Service accommodation. My hon. Friend the Member for West Bromwich, East seems to have the same problems with the RAF as I have with the Army. Something must be done about the Property Services Agency. I have tabled questions about the problem. There is much frustration in the Services about the difficulty of having repairs done quickly. I invite the Minister to say something about that and about the Ministry's general policy towards housing.
  When the Ministry decides to sell surplus property, do the local councils have first choice as they do in my area? What is the Ministry doing about the never-ending problem of the Service man who, when he leaves the Army, has to rely on local authorities to find him somewhere to live? I admit that 95 per cent. of councils bend over backwards to assist the Service man and his family. However, council house waiting lists are growing longer by the day and it is almost impossible for councils to build new houses. In future, councils might not be as generous. Surely it is not beyond the wit of the MOD and the building societies to come up with a scheme to save this embarrassment.
  I should have been surprised if this had not been a good year for recruitment, because of the level of unemployment, particularly among young people. However, paragraph 611 of the White Paper shows that there is a smaller and smaller pool of young men available for recruitment. We must forget our prejudices towards the role of Service women and see whether there is a more signficant role for them. My views on the subject are well known and are the result of experience. We might have to grit our teeth and accept a more vigorous role for women in the Services, as have the Americans, the Russians, the Chinese and the Israelis.
  I turn to the order. It is a continuation order. The main Bill will come next year and we shall then have the chance to express our ideas and bring the Act up to date. Looking back at the last debate I see that it was a little broader

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  —I shall not incur the wrath of the Chair-as most of us did on those occasions—and it was very hard to keep within order. I think the record for keeping in order was seven minutes.
  I wish to deal with some of the points that I made last time and expand on one of them. When I was a member of the Select Committee years ago we often debated the subject of capital punishment in the Armed Forces. In June 1979 I said:
  "I understand that the House will shortly debate the subject of capital punishment. We were concerned about the matter in relation to the legislation that is now before us. If the principle of capital punishment is defeated the House might like to have an opportunity to examine these matters in more detail."—[Official Report, 27 June 1979; Vol. 966, c. 666.]
  We shall probably return to this subject when the main order comes up. I understand that we have considerable support from Conservative Members on this. We said that we would consider the capital punishment issue when we review the Act next year.
  I believe that we could never carry out capital punishment for certain offences in the Armed Forces in this day and age and I should not have thought that any responsible Member of this House would think that that was possible. We shall pay particular attention to this point when we deal with the order next time.
  Will the Minister say something about the powers of summary punishment, a subject which was discussed last year? The system seems to be working well and to be having the desired effect. Last year it was too soon to assess the situation satisfactorily and I hope that the Minister will bring us up to date on that question. I thought that it was a splendid idea. In my experience it is better for a man to be dealt with by his own commanding officer among his friends within the battalion.
  There have been some glaring contraventions this year of the Army, Air Force and Naval Discipline Acts. It may be coincidence that we see weekly reports about such incidents in the press. We have read of a particularly distressing one today. Such incidents do not represent the Army of today. The Army, the Navy and the Air Force do not like the bad apples and do not like this kind of publicity. Such incidents should not be seen as representative of today's Army.
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  The reports in the press today are extremely distressing. I am surprised—and I do not labour the point—that an individual in a professional army can get so far without having received the necessary treatment and appropriate care. I can imagine it happening in a conscript army but not in the professional army. Someone should say to such an individual that he would be better off out of the forces. I do not emphasise the point except to say that it is bad publicity for the Army. The Army does not want these incidents to happen, but we have seen one or two cases this year concerning what are called bully boys in uniform. We shall back the Minister and the Ministry of Defence on this issue. Such incidents should not be part of today's British Army and the sooner we eradicate them the better.
  We have also heard of the incident of the Royal Irish Fusiliers which was said to be an in-action scrap. I do not worry too much about that. The Irish invented fighting and I am the last person to worry about an inter-regimental scrap. However, I hope that our lads will realise that to fight and to smash up private property in built-up areas is wrong. I hope that appropriate reparations have been offered and apologies made to the people concerned.
  That is all I wish to say on the Army, Air Force and Naval Discipline Acts. The provisions must continue for another year, but I hope that the Minister will take cognisance of what we shall look for when the Act is reviewed next year.
  On behalf of the Opposition I pay tribute to the Army and to our Armed Forces as a whole. We pay tribute also to the many thousands employed in the back-up services for the way in which they carry out their duties. The duties of our Armed Forces are mainly in NATO, though some of them are deployed in far flung outposts. We still have an important role with the United Nations. We have forces in Cyprus, Gibraltar, Belize, the Falkland Islands, Hong Kong, Brunei and, from last week, the New Hebrides. I do not know how many more such outposts we can concern ourselves with, but I never thought that we would be sending troops to the New Hebrides and I hope that they will not need to stay there for long.

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  During the last year the exploits of the Army have been forced into the limelight. I speak of the activities of the SAS in the centre of London and of those of our Commonwealth forces in Zimbabwe. Things might have gone terribly wrong in Zimbabwe and I believe that most observers expected things to go wrong there. It is a tribute to all concerned that the force made, and was seen to be making, a significant contribution to the outcome in Zimbabwe. I was pleased to see that a fair sprinkling of Birthday Honours were awarded to members of our force in Zimbabwe.
  I have deliberately left consideration of the role of our troops in Northern Ireland until the conclusion of my speech. The House knows how much I admire the dedication and professionalism of our forces in the Province and the way in which they have undertaken their task. They carry out their duties under great provocation and at great personal risk. Our soldiers must sometimes wonder where the next stab in the back will come from.
  On a recent visit to Northern Ireland I visited the troops on the ground and had discussions with those in charge of security. I spent the best part of two days with our newest regiment, the Ulster Defence Regiment, which this year celebrated its tenth anniversary. The regiment has grown in stature since it was established and it is significant that it co-operates with the RUC over most of Northern Ireland. That co-operation grows steadily.
  I found the working relationship between the RUC, the UDR and other units of the Army was first class. We might sometimes disagree on policy decisions about the role of the Army, but it is important during this debate that the thanks of the House and of the country should go to the Army for its dedication and the manner in which it carries out the role given to it by Parliament.
  Mr. Dalyell: On a point of order, Mr. Deputy Speaker. My right hon. Friend the Member for Mansfield (Mr. Concannon) is the most courteous of parliamentary colleagues, and I was loth to interrupt his speech when the Minister had interrupted him. But, on a matter of principle, I think that it is deeply unsatisfactory that, at the last moment,
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  the usual channels should mess around with the Order Paper in relation to defence.
  The point that I wish to raise in relation to discipline is a brief one. It is to ask a question about the philosophy in relation to discipline in Northern Ireland as opposed to discipline elsewhere. Be that as it may, it is surely proper that these things should be taken separately; and, if my silence was taken as assent, I can only say that I hope that that assent will not be confused with courtesy. The issue is really all about courtesy and not assent.
  I wish to register the most profound dissent. We know in other matters concerning defence that over the years Governments—I do not say by sleight of hand—have somehow or other by some alchemy of the usual channels ensured that things that should have been discussed have not been discussed.
  I do not assume the mantle of George Wigg. The right hon. Member for Stafford and Stone (Sir H. Fraser), and others, know perfectly well that the number of valid points—
  Mr. Deputy Speaker: I am sorry to interrupt the hon. Member for West Lothian (Mr. Dalyell). He should be addressing his point of order to me and not to the Minister.
  Mr. Dalyell: I shall be brief. It is profoundly unsatisfactory that there should be these last minute changes. Whatever has been said by the usual channels, the order of business is printed here on today's Order Paper. I should like to exercise any rights that I have in the matter and to insist that the two things be taken separately on grounds of precedent.
  Mr. Deputy Speaker: I am sure the whole House will agree that the hon. Gentleman is extremely courteous. I was looking at him when his right hon. Friend the Member for Mansfield (Mr. Con-cannon) rose. I think that that was the moment when the hon. Gentleman should have said that he disagreed. His right hon. Friend concurred, and I thought that I saw the hon. Gentleman nod. Therefore, I do not think that we can now go back on a decision that was taken by the House about three-quarters of an hour ago. I am sorry.
  Mr. Dalyell: I am not criticising you, Mr. Deputy Speaker, but I find it profoundly unsatisfactory that this should be done in the middle of a speech. If it was to be done at all, it should have been done properly by the Minister, and the Minister made a mistake.
  Mr. Hayhoe indicated dissent.
  Mr. Dalyell: Very well, if there is no mistake this raises the whole question of how the usual channels operate—
  Mr. Deputy Speaker: Perhaps I can help the hon. Genteman. The order is a very narrow one. I was listening to what the hon. Gentleman indicated that he intended to say in his speech. It would be easier for him to make his comments in this debate than in a debate on the order, because he probably would be ruled out of order. On reflection, it is also perhaps for his convenience that we proceed as agreed about three quarters of an hour ago.
  Mr. Dalyell: However narrow the order or the business, the fact remains that it is down on the Order Paper. I may easily have been ruled out of order, but in relation to precedent that is not what is important. What is important is that in matters of defence, and, I could argue, in other matters, we stick to what is on the Order Paper of the House of Commons rather than changing it in mid-speech.
  Mr. Deputy Speaker: I am not a party to what goes on between the usual channels. That is not a matter for me. Nevertheless, when the matter was raised by the Under-Secretary of State I asked the House whether it agreed. That seemed to be the general opinion. It is perfectly true that the hon. Gentleman rose and voiced dissent, but he then appeared to concur, and I took that as agreement.
  5.2 pm
  The Under-Secretary of State for Defence for the Army (Mr. Barney Hayhoe): Perhaps I can help. The hon. Member for West Lothian (Mr. Dalyell) has perhaps inadvertently misunderstood the position. The proposal that I suggested would be for the convenience of the House was precisely the same as the proposal which was put before the House by the hon. Member for Newcastle upon Tyne, West (Mr. Brown) when we last had a debate of this nature. In the past,
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  because of the narrow and restrictive character of the order, it has been found that it is genuinely for the convenience of the House if the debates are taken together. Hon. Members can then make their points about discipline without getting into trouble with the Chair, whereas, if the matters were taken separately, the points relating to the discipline Acts would be absolutely rigid.
  As the right hon. Member for Mansfield (Mr. Concannon) said, if one looks back over the record one finds a continual to-ing and fro-ing between hon. Members and the Chair. Therefore, no mistake was made. There was first an agreement that I would open the debate, but I then accepted a proposal from the right hon. Gentleman that he should do so. That is perhaps how the confusion has arisen. I am sure that what we have done is for the convenience of the House. As I understand it, the two motions on today's Order Paper are precisely as they were roughly two years ago when the same procedure was followed.
  Mr. Dalyell: In fact, what we have again done is to chip away, however minutely, at the erosion of the rights of the House of Commons.
  Mr. Hayhoe: The hon. Gentleman must sustain his own thoughts on that question.
  I should first like to say how grateful I am to the right hon. Member for Mansfield for the general tone of his remarks and comments about the Army, particularly for the way in which he ended his speech. I treat with some scepticism his call at the beginning of his speech for greater information on defence matters to be provided by the Government. Much more information was given in the White Papers produced by this Government than in the White Papers produced by the previous Government. As a result of the Government's action and their proposal to the House of Commons, we have established a Defence Committee, because of which much more information on defence matters is made known to hon. Members.
  We have had a debate in Government time on nuclear weapons and defence policy, whereas at no time did the previous Government make such a debate available. Although hon. Members may

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  well wish that more information were made available, at least we are doing a lot better than the last lot, and in politics it is no bad thing to do better than one's predecessors.
  I should first like to deal with one or two points which arise out of the draft Army, Air Force and Naval Discipline Acts (Continuation) Order. As the right hon. Gentleman said, this is a formality which is required to continue the Acts for a further year. A new Armed Forces Act is, and will be, required in 1981. Therefore, it will be introduced into the new Session of Parliament. Our normal procedure is that a Select Committee will look into all the matters and will ensure that all aspects of the question are thoroughly examined. I am quite certain that it will include the question of capital punishment, to which the right hon. Gentleman referred.
  The right hon. Gentleman asked for information about the extension of powers of summary punishment available to commanding officers. These extended summary powers have now been used on more than 400 occasions since July 1977, and a parallel reduction has taken place in the number of courts martial, although that may not be entirely due to the introduction of the new powers. However, there is clearly a great crossover, and I think that the right hon. Gentleman is right in saying that the changes are working well and are widely accepted.
  I should also like to give some information about the establishment of standing civilian courts to hear cases involving civilians who are subject to the Army and Air Force Acts while they are serving overseas. Since these came into operation, there have been more than 120 such trials involving about 170 accused, of whom a large proportion were juveniles. Again, that proposition was made in order to find a better way of dealing with these juvenile offences. The experience of the operation of these changes is broadly beneficial.
  In the debate last year, my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) raised an important point relating to civil air crew. He referred to it again in his speech on Monday. My colleague the Under-Secretary of
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  State for Defence for the Royal Air Force, in his opening speech on Monday—col. 41—indicated that this matter was under review and that he hoped to report progress to the House in the very near future. I am perfectly certain that my colleague will be able to give my hon. Friend further information if he writes to him.
  I turn to the wider subject of our debate. Few who know the Army well would dissent from the proposition that moral is much higher now than it was a year ago. The contrast is highly significant, and the general improvement is much to be welcomed by all concerned. Thirteen months ago, the Army was under-strength, over-stretched, uncertain about the future and suffering from too much turbulence and too little training. No wonder morale was low! Today, much has changed. The Army is stronger. Its commitments are in better balance with its resources. Turblence is being reduced and training increased. Recruiting is going well, and the dangerous haemorrhage of skilled and experienced officers and NCOs has been staunched.
  Confidence is returning, and morale is high. That has been achieved not only by the extra pay—welcome though the restoration of full comparability was a year ago—but more by the reductions in over-stretch and turbulence. Confidence and high morale have flowed from the realisation that the Government and their supporters—from the Prime Minister to the newest Back Bencher—better appreciate and better understand the contribution that the Army and the other Services make to our national life.
  We know that they are doing a worthwhile job, and they know that we know it. They are held in high esteem. I hasten to add that I claim no exclusivity or monopoly in such sentiments. The right hon. Member for Mansfield was forthright in his support for the Army. I know that his robust views are widely appreciated and admired. Surely, he would be the first to acknowledge that his views are not entirely shared by many of his colleagues below the Gangway.
  I also acknowledge that positive results have flowed from the work initiated by my predecessor, the hon. Member for Newcastle-upon-Tyne, West. The Ministry of Defence, as he and

  785
  everyone else who has experience of it knows, moves slowly. Much that happens now was started long ago, perhaps even by the hon. Gentleman's predecessors.
  I mentioned that recruiting has much improved. For adult and young soldiers it picked up last summer, and the October to December 1979 quarter was the most productive of recruits since 1971. Over the whole of 1979–80 the level of applications. enlistments and allocations to units was about 20 per cent. higher than the previous year. Understandably, there are significant regional variations in the recruitment pattern, and particular vacancies are hard to fill. We still have difficulty, for instance, in recruiting for several specialist trades, such as medical assistants, electronic warfare operators, electronic technicians, clerks and supply specialists.
  The target for adult and young soldiers for 1980–81 is at the same high level as last year, and recruiting continues to be buoyant with the total number of applicants this year 40 per cent. up on the equivalent period last year. But, although recruiting is going on successfully and wastage, including premature voluntary release, has been reduced, the Army is still currently more than 8,000 trained soldiers below strength. The majority of infantry battalions have one company at cadre strength only. Tanks are still undermanned in BAOR, though many fewer than a year ago, and some key trades are over 20 per cent. deficient.
  The trained strength of the Army is rising again after years of decline as recruiting improvements are reflected months later by better manning in the units. On present trends, we look forward to a much improved manning level within the next few years.
  Officer recruiting has taken longer to pick up, but prospects for 1980–81 look better with an increase in applications already apparent. Recruiting for the junior army has not been so successful as for adult soldiers. We fell some 6 per cent. short of our target last year and applications were down. The reason for that may have been that more school leavers are continuing their studies into their 16th year to improve their qualifications. It may also have been due in part to some deplorable and well-publicised incidents during the year, which
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  may have influenced a number of parents not to encouraging their sons to join the Army. The right hon. Member for Mansfield referred to those incidents, as he did to the news of the tragic suicide of James Darkin. The details of the bullying and the failure of the NCOs and officers to act will have come as a bitter shock to all who wish the Army well. I have discussed this matter with my right hon. Friend the Secretary of State and our sympathy goes to all the lad's relatives and friends, as it does to all who have been saddened and hurt as a consequence of the mercifully few, but none the less utterly deplorable, incidents involving vicious treatment of young recruits.
  Let me make it absolutely clear that brutality and bullying have no place in the British Army. It is not, and cannot be, the Army's way of doing things, and such conduct will not be tolerated. The Army takes its responsibilities towards its soldiers very seriously indeed. I am grateful for the right hon. Gentleman's comments on that matter. Hard and realistic training is essential, but there is no place, and there can be no place, for brutality and ill-treatment in the British Army today.
  To that end, the Army investigates most thoroughly every allegation of brutality or ill-treatment, and anyone—regardless of rank—who has been found guilty of such an offence has been punished. Any further incidents that come to light will be dealt with rigorously.
  Mr. Anthony Buck: The House will welcome the robust words that my hon. Friend has used in condemning bullying of all types. Will there be an investigation into the specific case that he mentioned, because the spokesmen in today's press are equivocal on that matter?
  Mr. Hayhoe: I called for a full report on the matter, but I have not yet received it. I shall try to give an indication later this evening, when I reply to the debate, if I have any positive information on the follow-up action. The matter will not be left as it stands today.
  I turn to a more agreeable matter, the women's Services. I am glad to report that recruiting is buoyant, if that is not an inappropriate phrase. Applications

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  for the WRAC are up 40 per cent. in 1979–80, and for the Queen Alexandra's Royal Army Nursing Corps they are up 50 per cent. As with the men, officer recruitment is almost unchanged, but prospects for this year indicate a small increase.
  The right hon. Member for Mansfield referred to the possibility of an extended role for women in the Armed Services. The possibility of arming Service women was mentioned in the 1979 White Paper, and spelt out in greater detail this year. The proposal is to allow women to carry arms for limited and purely defensive purposes, and there is no intention of employing them in combat roles. Even such limited arming would remove a barrier to the more flexible employment of women, which would enhance the contribution which they make to our defence, and would provide them with more job opportunities. The number of trained Service women serving at present is about 3,700. I would envisage an expansion of about 30 per cent. in the next six or seven years.
  I appreciate that the question of arming Service women is a sensitive one, about which some people feel strongly, although few representations have been received since comments were invited during earlier defence debates. No decision has yet been taken, and I again renew the invitation for views to be expressed.
  Mr. Dalyell: The Minister said that there was a shortage of electronic warfare specialists. Is that not an area where more attention could be given to the training of women?
  Mr. Hayhoe: There may be a role for women in that area. Careful studies are taking place to try to identify job opportunities within the Forces which it would be appropriate to open to members of the WRAC.
  Let me now turn to the Territorial Army. The last year has seen a welcome increase in its strength as well as the restoration of its traditional name. Its strength of about 63,000 is the highest attained since the 1967 reorganisation. It is at 86 per cent. of its establishment, and that is an increase of over 4,000 since last July. I know that all concerned in the TA will be grateful for the encourag
  788
  ing comments made yesterday by Her Majesty the Queen when she presented new colours to one of the important TA units—namely, the Honourable Artillery Company. The increase in Territorial numbers is due mainly to improved recruiting.
  I hope that the increased training bounties announced by my right hon. Friend last August together with the Government's general commitment and determination to improve the effectiveness of the reserves will be reflected in improved retention. TA equipment scales are under review, and I hope that we shall achieve our aim of providing all TA units with equipment appropriate to their role—but inevitably problems of priority arise.
  The effectiveness of the TA and the reserves will be improved when the new individual reinforcement plan has been fully implemented. Individual reservists will be available sooner, and any TA or regular units which are heavily reliant on individual reservists to bring them up to wartime strength will be ready to move that much earlier. Time may well be of the essence if an emergency arises.
  A major exercise code named "Crusader" is planned for this August. It is the largest peacetime exercise undertaken by the Army for many years and it should provide valuable lessons about our reinforcement capability.
  The Territorial Army also has an essential role to play in the defence of the United Kingdom home base as well as in the central region of NATO.
  Mr. Keith Best: My hon. Friend mentioned exercise "Crusader" which will be the first effective comprehensive exercise of its kind. Will he give an assurance that there will be an opportunity to debate the appraisal of the exercise? No doubt the Ministry will be carrying out a full appraisal. Will we have the opportunity to debate it on the Floor of the House?
  Mr. Hayhoe: That is a matter not for me but for my right hon. Friend the Leader of the House. I shall ensure that my hon. Friend's interest in this matter is made known to my right hon. Friend. Of course, there are general opportunities for debates on defence questions and these inevitably arise during the parliamentary year.

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  I have explained the essential role of the TA. Our arrangements for the defence of the United Kingdom base are under review and I am impressed by those who argue that the defence of key points can often best be undertaken by local people who know their areas well. Their ability to identify strangers in their home districts could well be of immense importance. We must find ways of harnessing all the available talent while making the best use of financial and manpower resources and allowing existing regular and Territorial Army units to concentrate on the tasks that require the skills that only they possess.
  The nation owes much to all those associated with the Territorial Army and other volunteer reserves. By this I mean not only the volunteers but their wives and families, whose support is essential, and of course their employers. The co-operation of employers and trade unions is needed if members of the volunteer reserves are to be allowed time off work to undertake their essential training. Many employers adopt an enlightened attitude and the Government are particularly anxious that all employers should understand the importance of the volunteer reserves, and in particular that they should recognise the demands that will be made upon members of the TA during the "Crusader" exercise this year.
  Mr. John Roper: Will the Minister ensure that his colleagues in other Departments make those Departments aware of the need for Territorial Army and other reservists in the public sector to be given time off for these purposes?
  Mr. Hayhoe: The hon. Gentleman has raised an important point. Some action has already been taken. If there are examples of where that co-operation is being withheld I should be grateful if they could be brought to my attention. I shall certainly do what I can to persuade others responsible in the public service to give as much help as they can.
  Dr. Alan Glyn: It is easy for the public service and large companies to comply with these requests. The real problem arises with volunteers who work in small firms. Has my hon. Friend thought about some form of compensation or some way in which the small firm could be enabled
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  to release people for this essential service?
  Mr. Hayhoe: My hon. Friend has put his finger on a difficulty which it is not possible to overcome. If the individual is a key member of a firm—he may well be because that is often the sort of person who joins the Territorial Army—there may be difficulties. We have to appreciate that, but I know that generally there is a great deal of co-operation by small firms. Their contribution in matters if this kind involves a greater contribution to the general well-being of the community than is made by the larger firm which can more easily accommodate the absence of individuals. The Territorial Army and the reserves constitute an essential element in our national defence effort. It is important that as many as possible of our fellow citizens are made aware of these views.
  I make no apology for having spent so long on manpower matters. In industrial language the Army is manpower or labour-intensive. Nearly half the budget of earmarked Army expenditure goes on personnel, 35 per cent. on Service pay and allowances, 8 per cent. on pensions and 14 per cent. on civilian pay and the civilian back-up for the Services, which is of considerable consequence. About 9 per cent. of the spending of the Army—about £270 million—goes on work services, maintenance, repairs, rebuilds and new projects.
  Modern living accommodation for our troops is of high quality, and rightly so. But only 2 per cent. of those serving in the United Kingdom are living in such accommodation. Nearly one in four are still living in hutted accommodation. Barrack modernisation will take us well into the next century, and the figures indicate the tremendous amount that needs to be done.
  The right hon. Member for Mansfield referred to housing and the disposal of surplus properties. As soon as they are identified in the Ministry of Defence they are handed over to the Property Services Agency for disposal. We are looking closely at a scheme which would give Service men a financial advantage similar to that proposed for council house tenants for the purchase of such properties. I hope that details of this scheme

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  can be announced in the not too distant future.
  Mr. Best: Will my hon. Friend ensure that when certain buildings are not required for the purposes he has outlined their transfer to the local authority will be facilitated?
  Mr. Hayhoe: That is a matter for the Property Services Agency, not the Ministry of Defence. My hon. Friend should address his questions to Ministers at the Department of Environment.
  Mr. Concannon: The Minister should be aware of the disquiet within the Army on that matter. The Minister may say that it is a matter for the Property Services Agency, but that agency does not get the blame from families or from ex-Service men. They blame their commanding officers or their immediate superiors. The Minister must get to grips with the Property Services Agency and move it along. His Department and the Army are getting the blame, and the Minister should be able to put it where it belongs—on the Property Services Agency.
  Mr. Hayhoe: There is some misunderstanding about the size of—and scope for releasing—married quarters, at present. There are about 20,000 vacant properties, but a large number of them are awaiting repair or modernisation, some are awaiting demolition, others are in places in which no one would wish to live, such as the centre of camps. Others have been allocated. In any large housing stock there will always be a number of vacant properties. When those facts are taken into account, the figure of 20,000 is narrowed down. I assure the right hon. Gentleman that we are keeping the matter constantly under review, and the last thing I should want is the Ministry of Defence, the Army or any other Service to sterilise property by holding on to it when there is no need to do so.
  Mr. Cranley Onslow: Having pinpointed that difficulty, will my hon. Friend ensure that in his review he does as much as possible to provide for the flexibility of resettlement which should be within the range of the ex-Service man? He does not necessarily wish to live on the edge of a regimental depot
  792
  any more than we wish to sell all the houses around the regimental depot to ex-Service men, because there may be other jobs in the area, and other people may need those houses.
  Mr. Hayhoe: That is important, and I hope that all hon. Members will try to influence their local authorities to adopt a helpful response to ex-Service men asking for accommodation. An enormous number do so, but some are not as helpful, and pressure should be put upon them continually.
  Mr. Concannon: There is a problem with local councils. I am certain that a circular was sent to all Army personnel, advising them to put their names on local council housing lists. If their names are on the lists, most councils can deal with their accommodation problems. Service men should be advised to put their names on local council waiting lists before they leave the Services.
  Mr. Hayhoe: I should like to leave that matter now, because we dealt with it extensively during defence questions recently. We are making some progress, which I hope will be beneficial. If suggestions arise during the course of the debate which can be pursued, I shall be happy to deal with them.
  Having given that indication about the calls on the Army's resources for dealing with work services and so on, I should like to point out that there are other important calls upon the Army budget, particularly for the Army re-equipment programme.
  The Warsaw Pact continues to introduce more and better equipment. The main emphasis is on mobility, fire power, armoured protection and night-fighting capability. I do not believe that an attack by the Warsaw Pact against NATO troops in Central Europe is at all likely. Indeed, the purpose of NATO is to deter any such attack, and the success of the Alliance over the last 30 years is illustrated by the fact that no such attack has occurred, and the Alliance has been maintained for peace within Europe. But if such an attack were to be made, it would certainly be spearheaded by heavy forces of tanks, with powerful support from armoured infantry, artillery, assault helicopters and aircraft. To counter and deter that threat requires a wide range of anti-armour weaponry, supplemented

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  by defences against artillery and air attack.
  We are currently embarked upon a comprehensive re-equipment programme to meet the present and foreseen threat. A number of improvements and additions to our anti-armour capability—to which the right hon Gentleman referred—are currently being introduced or are planned over the next decade. In answer to his question about whether all mechanised battalions in BAOR would be equipped with Milan by the end of this year, the answer is "Yes". The TOW long-range anti-tank guided weapon will be fitted with the Lynx helicopter in the early 1980s. In addition, an evolutionary series of improvement is also planned to the whole Milan, TOW, Swingfire family of anti-tank guided weapons, and preliminary studies with collaborative partners on the next generation of anti-tank guided weapons have already begun.
  To complement Milan and replace the Carl Gustav recoilless gun and the M72 rocket, we are currently developing a British man-portable short-range unguided weapon, Law. That will be a very effective weapon. Improvements are also in hand to the belly-attack Barmine.
  Opinions differ about the best mix of anti-tank weapons, but military opinion overwhelmingly believes that the most important anti-tank weapon is the tank itself. It offers the most effective combination of the qualities of firepower, mobility, protection and flexibility of operations to meet the armoured threat.
  The right hon. Gentleman referred to this country's future tank requirements. He will know that they are under review. The existing plans that we inherited were based on the replacement of the whole Chieftain fleet by MBT80 from the late 1980s onwards. The project definition phase of this development is near completion. But, as so often happens, it looks very much as though full development and production will take longer and will cost more than was originally thought.
  Another new factor is the opportunity, following the collapse of the Iranian tank order, to make an earlier purchase of a tank significantly better than the Chieftain, and with Chobham armour, as an enhancement of our present capability.
  794
  That is the Challenger option to which the right hon. Gentleman referred.
  All those matters are under urgent consideration and an announcement will be made as soon as possible. I wish that I could give the House more information today, but there is nothing further that I can say on this very important question.
  Another major decision referred to by the right hon. Gentleman concerns our fleet of armoured personnel carriers, part of which is due to be replaced in the mid-1980s. As the House knows, we are currently considering two contenders as replacements for the FV432—the British desigend MCV80 and the American infantry fighting vehicle. A decision on the choice of vehicle will be announced within the next few months. I am sorry that I cannot announce it today. I assure the House that, either way, British industry will be deeply involved in the matter.
  Mr. Dalyell: As a fervent supporter of the Challenger programme and as a believer in the necessity of tanks, may I ask the Minister what consideration is being given to the important issue of inter-operability as between Challenger or the equivalent of Challenger, and the German Leopard I and Leopard II? If there is escalating expense, would it not be sensible to have some arrangement with German development in this sphere?
  Mr. Hayhoe: In all matters of arms procurement at the moment, the advantages of seeking inter-operability are, of course, taken into account. A balance of judgment has to be made, and that cannot be the determinant upon which a decision will be made. I assure the hon. Gentleman that it is one of the matters taken into account in the considerations to which I have referred.
  I turn from armoured personnel carriers to the question of the firepower of the British Army, to which again the right hon. Gentleman referred. With regard to artillery, the FH70 155mm towed howitzer is now entering service and has been deployed to its first regiment. For the longer term, a self-propelled version is now under development, in collaboration with Germany and Italy, for introduction in the late 1980s.
  To strengthen our fire power capability in the short term, we are buying a further

  795
  48 M109 155mm self-propelled guns, which will enable us to increase the number of 155mm batteries in BAOR and to raise the number of guns per battery from six to eight—a real enhancement of fire power. Depth fire will be provided by a new multiple launch rocket system, capable of carrying 12 rockets and rapidly reloadable, to be procured in conjunction and co-operation with the United States, France and Germany. This is planned to enter service in the mid-1980s.
  To counter the threat from the air, we have embarked upon a programme of phased improvements to our low level air defence system, in particular to Rapier and to the Blowpipe man-portable missile system. We are looking carefully at tracked Rapier to supplement the existing towed system.
  We have no immediate plans to buy anti-aircraft guns, as suggested by the hon. Member for West Bromwich, East (Mr. Snape) on Monday, but this case is kept under close review in the light of their relative effectiveness against the likely threat.
  The increasing speed and complexity of modern warfare is giving added emphasis to the importance of up-to-date communications, command and control. In all these matters, major projects are in hand—Wayell, Ptarmigan, the battlefield artillery target engagement system, known as BATES, radio communications in the forward area, provided by Clansman, and so on. Many of them were initiated when my predecessor was in office. The combination of these improvements and others included in the recent White Paper will, I believe, sustain the effectiveness of the 1st British Corps against the threat well into the 1990s.
  The right hon. Gentleman referred to the interaction between this equipment programme and the decision about a successor to Polaris. Indeed, much has been said during the recent defence debates about nuclear weapons. This is not the time for me to intrude upon the savage internal debate of the Labour Party. But I must say that Hugh Gaitskell would be twirling in his grave at the recrudescence of unilateralism and neutralism that we see in the Labour Party. Of course, we understand and sympathise with the difficulties of the right hon. Member for
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  Stockton (Mr. Rodgers), but does he not deserve more support from his fellow members of the Shadow Cabinet and the Leader of the Opposition, who speaks for the Labour Party in this House on these vital national questions?
  I want to respond to the serious arguments put forward by those who believe that we cannot afford a successor system to Polaris without a major destruction of our conventional capacity.
  Mr. Concannon: Will the Minister give way?
  Mr. Hayhoe: I am replying to the specific question put to me by the right hon. Gentleman.
  Mr. Concannon rose
  Mr. Hayhoe: Let me reply to the question and then I shall give way. Because of the substantial sums involved, it is very easy to get this matter out of true perspective. As my right hon. Friend the Secretary of State pointed out on 24 January, the total capital cost of the successor system to Polaris might be about £4 billion to £5 billion spread over about 15 years. He indicated then that it is only when expenditure reaches its peak in the late 1980s that it might amount to 5 per cent. of the budget.
  On present plans, the defence budget is expected to grow by about 3 per cent. per annum cumulatively, so that by 1984 it would be 13 per cent. higher in real terms than in 1979–80. Therefore, even after expenditure on a successor to Polaris of the order to which my right hon. Friend the Secretary of State referred, we could still be spending more on conventional programmes in coming years than in the year in which we came to office.
  Mr. Concannon: After the attack upon my right hon. Friend the Leader of the Opposition—and seemingly other people within the Labour Party—I should like to place firmly on record that in my opening speech from the Opposition Dispatch Box I was speaking for the Labour Party and for the Labour Opposition when I said that any decision taken on Polaris would not bind the next Labour Government. That is the policy of the Opposition on Polaris. Whatever the Minister may want to make of this, I assure him that this is how we feel. We are committed to NATO, and to NATO we would give our first priority.
  Mr. Hayhoe: I appreciate the sentiments expressed by the right hon. Gentleman. They were not reflected in those terms by Labour spokesmen at a rally last Sunday. Indeed, if some of his hon. Friends below the Gangway were in the House today, they would have been giving him some pretty queer looks when he spoke as he did. I wish him well in the internal battle that he is engaged upon to prevent his party from going unilateralist and neutralist. It would be a tragedy for the country if it were to occur.
  Mr. Julian Critchley: With regard to the figures given by my hon. Friend a moment ago—before we got immersed in the debate on the Labour Party—what are the assumptions of economic growth over the next decade on which his figures are based?
  Mr. Hayhoe: What I gave were the announced plans in regard to the defence budget. It would not be proper for me, as a junior Defence Minister, to get involved in making general forecasts which are the responsibility of my right hon. and learned Friend the Chancellor of the Exchequer and his colleagues. Surely my hon. Friend is aware of that.
  I have spoken mainly about the United Kingdom's NATO commitment, but we have commitments outside the Alliance area. Some of these were referred to by the right hon. Gentleman—Belize, Hong Kong, Brunei, Cyprus, including the United Nations force there, and the logistical support that we supply to the United Nations force in the Lebanon.
  We also provide military assistance and advice and provide small teams of Army advisers on a more permanent basis to 20 countries, and soldiers from over 80 countries came to the United Kingdom in 1979 to participate in our training courses.
  The right hon. Gentleman referred to Zimbabwe. It would be wrong of me not to mention the British Army's involvement in the events of last December and onwards, because 900 British Army personnel, together with vehicles, helicopters and stores, were deployed to Rhodesia last December as part of the Commonwealth monitoring force whose task was to monitor the ceasefire in the period leading to elections and independence. It should be stressed that the Common
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  wealth force was not intended to intervene militarily, and its task required the personnel involved to display considerable courage and diplomacy, as they did with such resounding success.
  We are committed to providing assistance to the new Zimbabwe. Some 30 British Army personnel remained there to form the nucleus of a team to provide advice and assistance on the organisation and training of the new army. At present the team numbers 60 personnel, and it is planned to more than double that number by the end of the year. To complement the assistance provided by the team in Zimbabwe we are currently considering, with the Government of Zimbabwe, training for Zimbabwe personnel in the United Kingdom. As a first step, arrangements are in hand for a four-week course commencing in late July at the Army staff college, Camberley, for 36 officers of the Zimbabwe Army.
  The Army also stands ready to give assistance to the civil power. The most dramatic example of such military assistance during the past year, again referred to by the right hon. Gentleman, was the SAS assault which ended the siege at the Iranian embassy in Princes Gate on Monday, 5 May.
  Sir Nicholas Bonsor: Will my hon. Friend give way?
  Mr. Hayhoe: I had better get on, because I have been talking for a considerable time.
  It was the first time that troops had been used in that way, and the decision to deploy them was taken only after one of the hostages had been murdered in cold blood and his body thrown out of the embassy. Once that had happened, it was regrettably clear that the hoped-for peaceful resolution of the siege was not possible. The SAS had to be used as the only means of bringing the incident to an end with the minimum loss of life. The SAS did that with enormous aplomb and skill. Once committed, the solders acted with unexampled courage and dedication which has rightly earned them praise from many quarters both at home and abroad. The growth of urban terrorism is one of the most evil aspects of modern life. I hope that the lessons of this siege and the determination of the Government will not be lost on those who

  799
  contemplate such action in this country for political or criminal ends.
  Zimbabwe and the Iranian embassy siege show two sharply contrasting but mutually complementary faces of the Army. Nowhere do we see that combination better used than in Northern Ireland. I echo and underline what the right hon. Gentleman said about the diplomacy, courage, skilful and careful use of force in Northern Ireland. I think of the gallantry of the small number who deal with terrorist bombs. In the first four months of this year, 63 incidents have led to nearly 3,000 lb. of explosives being neutralised. In recalling their bravery and courage, I know that it is typical of all who carry out their tasks in support of the RUC. Also worth mentioning is the technical support given to these people by the Royal Armament Research and Development Establishment and the Military Vehicles and Engineering Establishment which provide them quickly with new tools in order that they may deal with new threats.
  I add a special word of congratulation, as did the right hon. Gentleman, to the UDR, now celebrating its tenth anniversary. I know how delighted everyone concerned has been over the visit of the Duke and Duchess of Kent earlier this week. It seems to have been a resounding success.
  I am pleased to report that the UDR is taking over more tasks appropriate to its enhanced operational capability, and that its full-time strength has been increased. I doubt whether any Army in the world could do its duty more diligently and with better humour than the British Army in Northern Ireland. It deserves our grateful thanks and full support. It is typical of its comrades throughout the whole of the Army and our Armed Services.
  In paying tribute to this splendid body of men and women who serve the nation with such distinction, let me end by recognising also the high qualities of those who command and lead, in particular, General Sir Edwin Bramall, the CGS. I count myself privileged to work with him and with those he leads so well.
  5.55 pm
  Mr. Robert C. Brown: Lest I should say anything
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  today that might be misconstrued, I preface my remarks by firmly establishing that I am not a unilateral disarmer of either nuclear or conventional weaponry. However, that does not prevent me from saying that the Labour Party would be failing in its duty if it did not constantly remind people of the horrors of nuclear war.
  Contrary to what a stranger might think from listening to some contributions in debates on the Armed Forces, the Labour Party is not a pacifist party. It has always believed that this country must be defended, and properly defended. Successive Labour Party annual conferences have supported our membership of NATO and rejected calls for withdrawal. Equally, annual conferences are on record as firmly supporting multilateral disarmament in both nuclear and conventional weapons.
  Therefore, we have every right to criticise severely the USSR for deploying the SS20 missile. Approximately 60 to 70 of these missiles are in situ targeted on Western cities, including the United Kingdom. As each month passes, another four SS20s emerge.
  If the leadership of the Soviet Union is serious in its search for peace, let it now say "We are prepared to abandon the SS20 programe. Will you now abandon your cruise missile programme?" A genuine offer on the SS20 would remove the need for NATO to deploy the cruise missile. Could the United States refuse to ratify SALT II if this were the ball game? I do not believe that it could. This is the way ahead to detente.
  We should be encouraging the Soviets to abandon their aggression in Afghanistan before they suffer the fate of our allies the United States in Vietnam. Nothing looks more likely to happen than that the Russians will have a Vietnam on their hands.
  Perhaps I may be permitted a little nostalgia. I say to some of my younger colleagues that my generation lost a lot of life—many lost it all—in the fight against Nazi oppression. To those who advocate unilateral action, I say that I remember with shame, as do many of my generation, the 1930s when more often than not on Saturday and Sunday nights the newsboys bellowed round the streets with special editions setting out some further atrocity in Abyssinia, and then,

  801
  it was Spain, while the rest of Western Europe haplessly looked on because it had nothing with which to tackle the menace that was developing. Then we ended up with Munich and Chamberlain with his little piece of paper—" Peace in our time."
  I recall with some bitterness and shame parading as a member of the Local Defence Volunteers, the forerunner of the Home Guard, with broomsticks because we had no weapons. Frankly, I often chuckle when I think of the night that a dejected Luftwaffe pilot, dangling on the end of his parachute, was faced with the LDV, all wanting to be the first to prod his hind quarters with a broomstick. I often wonder what terror that poor devil must have suffered.
  Enough of nostalgia. Suffice it to say that I firmly hope that never again will Western Europe allow a like situation to happen—for then my war was just about to start.
  I turn now to the starry-eyed ideal that we could step off the world and become neutral. It would be wonderful to have the £10 billion going on defence this year to spend on all the things that we hold so dear—hospitals, schools, new roads, social services, and so on.
  Alas, those who cherish such notions will discover that it does not work like that. In 1979–80, the two most frequently quoted neutral countries, Sweden and Switzerland, spent $400 and $292 respectively per head on defence. The United Kingdom spent $314 per capita. Although Sweden is neutral, it pays more per head to maintain that neutrality than Britain, a member of NATO, pays. Switzerland is roughly on a par with us. When people blather on about leaving it to others and about becoming neutral, they should remember that neutrality must be defended. Sweden and Switzerland, the great neutral countries of the world, recognise that.
  I have held ministerial office and have been responsible for transport and for social security. I bitterly regret the heavy burden of defence expenditure. That is why we have condemned the Government's defence policies. The Government have failed to set clear priorities for the 1980s. They have committed the country to cost increases that we cannot afford. They have not offered any ideas about disarmament. In such times, there can be nothing sacrosanct about public
  802
  expenditure cuts. Defence has as much right to play a part as transport, the social services, and so on. No Department can isolate itself from reality.
  In a recent survey, The Economist described the British Army as the "poor men of NATO". Although it acknowledged the Army's superlative training, it pointed out that the British Army was the most poorly equipped of the major NATO armies. It has ageing equipment and has suffered cuts in its budget in recent years. I do not accept that the assessment of The Economist is fair. However, the article pointed out that there were holes in the Army's equipment programme and that those holes must be plugged if the Army was to provide an adequate means of defence. That is particularly important in the present post-Afghanistan period. Some describe that period as "the window of opportunity".
  The Armed Forces and Ministers have to work within a tight framework. Nobody does that more than the Army. Although it possesses half the manpower of the Armed Services, it receives only 35 per cent. of defence moneys. I am sure that it niggles the Under-Secretary that there is far too much of equal shares and equal miseries in the Ministry of Defence building.
  Our weapons technology is good, but the Army's re-equipment programme must be urged on. The replacement for the infantry armoured personnel carrier is now an urgent matter. The MCV80 is only at the prototype stage. The United States infantry fighting vehicle is already in production by FMC. I think that that is a better bet than the MCV80. It has TOW anti-tank missiles, a rapid-fire 25 mm gun and, more importantly, six firing ports for infrantrymen enabling them to use their small arms while on the move.
  What efforts have been made in collaboration with the United States? Why should we not have an agreement to produce the IFV in Britain, with a licence to sell overseas? I confess that that idea is prompted by the fact that the Vickers factory at Elswick urgently needs more work. I do not apologise for saying that. If an arms business exists, I should be a hypocrite to say—hand on heart—that people should be walking the stones

  803
  on Scotswood Road instead of producing armaments for export.
  The new light 4·85 rifle should be a winner. It should become the standard NATO army rifle. Perhaps the Minister will give us details about competition, and tell us whether he is hopeful that NATO will adopt the rifle as standard equipment. The future main battle tank, the Challenger, will be the best tank. It has Chobham armour, and its firepower is enhanced by the best electronics available. However, no matter what the Under-Secretary of State might say or how the Secretary of State may have nodded, that tank is 10 years away.
  The first presentation to which I went at the Ministry of Defence was in November 1974. It seems longer ago than that. The presentation was on the future main battle tank. I went to several other presentations. On every occasion it was discovered that the top brass had changed their minds. If they were to decide to build a house they would want a 25 ft lounge, but the next time one saw the plans one would find that they wanted a 15 ft lounge and a 20 ft lavatory.
  The British Army's tank fleet is comprised of 900 Chieftain tanks. My right hon. Friend the Member for Mansfield (Mr. Concannon) said that those tanks were getting a bit long in the tooth, but, given the modifications, the Chieftain tank is superb. About 20 months ago I presided at a meeting of the Army Board. We had before us a paper from the Vice-Chief of the General Staff. He asked for 77 Chieftain tanks, as they were urgently needed to bring the war maintenance reserve of the British Army of the Rhine up to strength. The board accepted the request and treated it as a matter of urgency. The Government pulled out all the stops. Vickers Limited tendered and the tender was found acceptable. Had it not been for the general election, the order would have been given to Vickers and the tanks would have been produced at the Elswick works in Newcastle upon Tyne.
  The Northern region has the unenviable record of having the highest rate of unemployment in Britain. One would have to cross the water to Northern Ireland to find a higher rate. If the Army Board thought that this issue was urgent
  804
  20 months ago, it must be more urgent now. Why has not Vickers received the order? When will the Government get down to making decisions on matters that affect the battle fitness of our troops? Is the Minister aware that the Vickers work force has been working short-time for two or three days a week for many months? It could have been turning out the 77 Chieftain tanks that are badly needed. Nothing but the ineptitude of the Ministry of Defence has led to the present situation.
  I hope that when the Minister replies he will not muddy the pitch with talk about Iran and loss of the Shir Iran tanks. That has nothing to do with the issue. If the British Army of the Rhine desperately needed 77 Chieftain tanks 20 months ago to bring it up to war strength, it needs them even more urgently today. The Minister knows that as well as I do. The Minister knows that the Shir Iran tanks, now built in Leeds, are far too heavy for German bridges and that there is a problem of rail gauges as well. Therefore, there can be no question of taking these tanks off the shelf to fulfil the commitment that should have been fulfilled by the building of Chieftain tanks at Elswick, in Newcastle. If a modified Shir Iran tank were possible it might be worth looking at, but it is nearer the truth to say that the 77 Chieftains would have cost £100 million plus. That is the fly in the ointment. Despite the Prime Minister baring and beating her breast in public to maintain the image of the Iron Lady on defence, and despite all her talk about increased defence expenditure, the truth is that at the behest of "Howe owl", there is a trawl going on in the Ministry of Defence to find areas in which cuts can be made.
  I turn to the question of the successor to Polaris. To be or not to be, that is the question. I believe that there can be only one answer—not to be. A British independent nuclear deterrent certainly will not deter the Soviet Union. It may give the Iron Lady an opportunity to walk-tall with President Giscard d'Estaing, but the real deterrent to any Russian aggression across the frontiers of the two Germanys is well-equipped land forces. For that reason, I emphasise my opposition to Trident. Its cost seems indeterminate. At present it seems to be between £500 billion and £1,000 billion.

  805
  It was my privilege to serve on the Defence Council with Field Marshal Lord Carver, who was a superb Chief of the Defence Staff. I did not always agree with him, but I developed a high regard for him and for his courage, ability, integrity and honesty. His worries cause me to worry about the high cost of the Polaris replacement. It will almost certainly cause a cut back in Army re-equipment programmes. The Minister may shake his head if he wishes, but this has been the case over the years, and everyone in the House who has served in the Ministry of Defence must know that in times of cutback any equipment programme that has not been committed to contract is always the first for the chop. It happened in my time, it happened when the hon. and learned Member for Colchester (Mr. Buck) was in the Ministry of Defence, and I am sure that it will happen again now.
  Mr. Buck: The hon. Member mentioned Field Marshal Lord Carver. Perhaps he would like to put his views into the balance with those of Admiral of the Fleet Lord Hill-Norton, likewise a Chief of the Defence Staff, who went on to be chairman of the Military Committee of NATO. He took the view that it was very important for the efficacy of the Alliance to have a replacement for Polaris.
  Mr. Brown: I do not mind mentioning Admiral of the Fleet Lord Hill-Norton, or any other damned admiral for that matter. The hon. and learned Member must know that there has never been an admiral who would refuse to spend money on a big equipment programme in which the Navy could have its sticky little fingers. All the better if half the price of that programme could be filched from the Army.
  In any case, the futility of talking about a British independent nuclear deterrent is exposed as complete nonsense by Lord Carver in his letter to The Times of 16 May. I have no intention of reading that long letter, excellent though it was, but there is one passage that I shall quote. He said:
  "I can conceive of no circumstances in which it would be right, responsible or realistic for the Prime Minister of the United Kingdom to authorise the use of British nuclear weapons, when the President of the United States was not prepared to authorise the use of any US nuclear weapons; nor do I believe that the Russians would believe it to be a realistic assumption that he or she would."
  806
  I could not agree more. I share Lord Carver's sentiments entirely. I simply cannot conceive of a situation in which the British Government, in isolation, would want to use a nuclear weapon. Instead of beating her breast in public the Prime Minister should privately reflect on the gap in conventional weapons between the Warsaw Pact and NATO and decide that her insurance payment should go to new Army equipment, not pie-in-the-sky delusions of international grandeur.
  I am glad that the Minister referred to the increased strength of the Territorial Army. I am delighted that members of the TA have reverted to the name "Territorial Army", instead of the damned nonsense of "Territorial Army and Volunteer Reserve." I am sure that the TA will go from strength to strength and I am delighted to hear that the programme for re-equipment will go ahead under this Government. In the kindest possible way I urge the Minister to stand up to his top brass in order to make them realise that the TA is an equal, on all fours with the Regular Army. As long as the Regular Army condescendingly looks on the TA as a bunch of good natured amateurs the Territorial Army will not get the type of equipment that it requires. At the end of the day the Regular Army has a fair bit to say in this respect.
  The question of release from work is a thorny problem. It loses us many extremely good people every year, particularly in responsive units. It is easy to say that we should encourage employers, as indeed we should, but we should also encourage employees to become Territorial Army members. Far too often they are the butt of many jokes. Their workmates say "Are you off on another fortnight's skive?" All I can say is that a fortnight in TA camp is certainly no skive. I have been on one or two.
  I am happy to associate myself with all the remarks that have been made about the Army in Northern Ireland. No other Army in the world could have carried out this extremely difficult job with such success and restraint. Equally, I pay tribute to the forces that went to Zimbabwe to monitor the elections. I shall not name names, but I am certain that if the job had been done by many other armies the war would have started with

  807
  a vengeance before the election. Our forces carried out their tasks with good humour, and their contribution was invaluable.
  I turn to the question of housing for Service men. I know that, basically, that is a matter for the Department of the Environment. This is the problem that we face. The Ministry of Defence has the problem, and the Department of the Environment has the powers to deal with it, but because it is not a direct problem of that Department it is not too interested. We can exhort and send letters to Ministers, and so on, but this is something that must be looked at broadly by the Government. I never succeeded in getting this done. I hope that the Under-Secretary succeeds.
  The sort of thing that irritates me—only the Department of the Environment can tackle this—is the nonsense of a council such as that of Epping Forest, for instance, imposing a three-year residential qualification before a Service man can be considered for a council house. This effectively rules out every Service man, because apart for the oddest exceptions, no Service man can serve for three years in one place and thereby establish such a residential qualification. It is nonsense. I hope that the Minister has more success than I had.
  Mr. Wm. Ross: Is the hon. Member aware that the Northern Ireland Housing Executive treats all ex-Service men as absolute priority cases, and that they go to the top of the housing list as soon as they leave the Armed Forces?
  Mr. Brown: I am grateful for that intervention. In this respect, we have a lot to learn from the Irish. I hope that we emulate what the Northern Ireland Housing Executive does.
  Several Hon. Members rose—
  Mr. Deputy Speaker: Order. Before I call the next speaker I remind the House that a large number of hon. Members with constituency interests and direct personal interests wish to speak in this important debate. Speeches of 25 minutes will make it very difficult to call everyone.
  6.21 pm
  Mr. John Browne: I hope that the hon. Member for Newcastle upon Tyne, West (Mr. Brown) will not think it remiss if I say, as a new Member, that I thought his speech was excellent. I was very impressed, because he is a man with real experience. He is a Socialist, with Socialist ideals, representing a Socialist seat, but, unlike many Opposition Members, he has seen active service and has experience of the Ministry of Defence. I really enjoyed his speech. I found some of the points that he made extremely interesting, particularly his point on being prepared, the point about the price of neutrality, and his remarks on a system of licensing, urging the Minister to manufacture more under licence. They were excellent points, well made.
  I believe that there are many men and women serving in the Armed Forces and many of the general public who would wish to join me in thanking my hon. Friend the Under-Secretary of State and, through him, my right hon. Friend the Secretary of State and the Government as a whole for re-establishing a vital commitment to the defence of our country and to the defence of the treasured democracy and unequalled freedom that we all enjoy. It is this commitment that is the first classic duty of any Government and a duty that we ignore to the cost of every man, woman and child in this country.
  The result of this new commitment, as far as I have seen, is that not only has Service pay been improved but, equally important, so have conditions of service, especially those intangible but vital elements of morale. The Nelson touch was shown by my right hon. Friend the Prime Minister last year by her visit, in combat kit, to Crossmaglen. It did an unbelievable amount of good for the morale of the British Army in Northern Ireland.
  In short, the feeling that the present Government now give to the Armed Forces is the feeling that their lives, their dedication and their loyalty are not only wanted but are valuable to the nation and are appreciated.
  Whilst this vital commitment is not all money, much of it obviously requires money. The central money problem is not how much we can afford but how

  809
  much we, as a nation, will afford. We must have the will to defend ourselves. I see it as a prime duty of the leadership and the Government to help to restore this basic will and, by our example, so to inspire our allies around the world.
  I believe, on balance, that we should replace our independent nuclear deterrent, but the main thrust of my speech this afternoon is towards cost-effectiveness on more mundane issues—cost-effectiveness in both equipment and morale. I should like briefly to discuss four basic areas: organisation, recruiting, military equipment and the Territorial Army. I should like to make some suggestions and to ask my hon. Friend some questions.
  A decade or two ago, when I was privileged to serve in the Grenadier Guards, National Service had ended and we were short of men. The organisation of that day—in the infantry and in the cavalry regiments, and basically in the Army as a whole—was based on a system of fours, and because of this lack of men it was reduced to a system of threes. Coming more up to date, under the previous Government—although I respect the position of the right hon. Member for Mansfield (Mr. Concannon)—I must say that morale and military effectiveness fell dramaticaly. Indeed, I believe that the Scots Guards lost seven captains in a single day. As a result, today the Army is very short of captains and sergeants in the age group 27 to 33—the commanding officers and sergeant-majors of tomorrow. Then the Army will be relatively short of good leadership material in a world in which that good leadership will be of increasing and vital importance.
  I believe that the question that will have then to be faced is: how do we give those relatively fewer good leaders more access to men? The parameters will obviously be: how many men can a commander physically deal with, by visiting, liaison and travelling, and by radio communications? Obviously, the Clansman radio will help here. Secondly, how many sub-units, mentally, can he fight in an atmosphere of stress, disruption and fatigue?
  In the past, I was lucky enough to have as a tutor the late Captain Sir Basil Liddell Hart. We often discussed this problem of the ratio of men to leaders.
  810
  May I therefore suggest that my hon. Friend reviews, in the Army organisation, the possibility of raising this system of threes to a system of fives? For example, in an infantry battalion we would have five sections in a platoon, five platoons in a company, and five rifle companies in a battalion, leaving the brigade as a flexible unit according to the needs of the particular theatre and operational requirement.
  The advantages of such a system would be, first, that it would increase the size of the battalion and, therefore, reduce over-stretch in terms of battalion duties. Today, battalions have more duties rather than fewer duties, and yet battalion strengths have been reduced from 744 to about 650. Secondly, it would give the men more access to really good leadership. Thirdly, it would distribute more evenly over the formations the administrative overheads and the costs in terms of equipment, money and manpower of the headquarters, ending up with a lower overhead cost per man.
  I make one more point about organisation. I always thought that in the previous defence cuts it was utter madness to take the reconnaissance platoon and the assault pioneer platoon out of infantry battalions. It caused a real weakness in a vital element of our defence land forces. I urge my hon. Friend, as a matter of urgency, to replace those platoons in a support company with the anti-tank mortars and machine guns.
  Mr. Concannon: I do not want to start the Grenadier Guards versus Coldstream Guards argument across the Floor of the House. However, to be fair, I must point out to the hon. Gentleman that it has not always been Labour Governments who have made cuts in the Armed Forces. In my time in the Coldstream Guards we had three battalions, and it was certainly not a Labour Government that cut off the third battalion then.
  Mr. Browne: That is a very fair point. I accept it. We suffered in the same way.
  My hon. Friend the Under-Secretary said that recruiting was not so bad and was improving. It seems to me that the main problem area is that of wastage. There seems to be a hole in the bucket. We get the soldiers into the Army, but they leak out at the sides. This situation

  811
  stems from three basic reasons. One is the shortage of equipment. At present there are no reserves of equipment. The basic, No. 1 lesson in strategy is to expect the unexpected and to ensure that there are reserves. There are no reserves of equipment in the British Army. In fact, there is not enough equipment. That must be corrected.
  Secondly, I refer to the over-stretch of men, the reduction in the size of battalions and the increase in the role that they must play. Thirdly, there is turbulence—the aggro, especially for young married families in the present-day Army. I should be grateful if my hon. Friend the Under-Secretary of State would consider the viability of raising the age limits for the entitlement of marriage allowance and of marriage quarters, to discourage early marriage in the Army.
  The next subject that I wish to discuss is equipment. I was pleased to hear the Minister's remarks on the review of Army equipment. However, I question his views—I do not disagree with them—that the tank is the prime anti-tank weapon. I wonder whether, in the fog of a war, its Runs will have the field of fire to utilise their accuracy and range. I wonder whether vehicle-borne anti-tank missiles are not a more potent force, not in terms of exercises, in which tanks look great, but in terms of the real thing.
  In many areas the Army does not have enough equipment. This deficiency reduces its morale and fighting effectiveness. In some areas the Army does not have any of the items of sophisticated equipment that we in Britain make and sell abroad. I fully realise the problem of money, especially with high wages increasing the prices of the hardware, but has my hon. Friend or the Army considered leasing some of our military hardware, especially in the areas where we urgently need equipment now, before the replacements come on stream? I refer to stop-gap replacements for the Chieftain and the 432APC, and aircraft and computers. According to page 1–6 of the paper, we shall spend £12 million on capital expenditure for computers. In an age of fast-changing technology, I wonder whether that money will effectively go down the drain and whether we could spend one-tenth of the amount in five years' time on much smaller, simpler and
  812
  less costly computers. Perhaps we could lease computers in the meantime.
  I realise that there will be problems in terms of spare parts, and training in leasing the different types of equipment. However, I urge my hon. Friend to consider the questions of leasing and of building under licence some of the equipment that we need.
  I greatly appreciated the words and the real feeling that my hon. Friend the Minister put into the section of his speech dealing with the Territorial Army. I agree that it is a vital element of our defence system. It is cost-effective. However, I wonder whether I might make a suggestion about its organisation. At present the Territorial Army is split into two parts—the NATO battalions and the non-NATO battalions.
  I understand the reason for the split, but the Territorial Army is far too small to meet effectively the size and speed of the possible military threat to this nation. For instance, people in the reserve do not even know where to report. It is a farce to have a reserve at such a low standard of readiness. There is a need for a large basic reserve in the Territorial Army, in addition to what there is now. It would be much cheaper and less sophisticated. It should be trained in very basic procedures, such as Army organisation, equipment, map reading, small arms and basic infantry tactics, but with the knowledge of where the members are to report in cases of emergency.
  That would be a cost-effective addition to the strength of the Territorial Army. By virtue of its basic non-specialised training, it would be flexible when needed. This could be done at little cost. The members should be volunteers. The time requirements should be modest—one weekend in two months.
  There is also the problem of training. At present, 20 Regulars are training a NATO battalion. It is still a hard job to provide instructors for the non-NATO battalions. But for this basic reserve, I believe that there would be a tremendous number of volunteers. For example I would volunteer. I am sure that my right hon. and hon. Friends who have served in the Armed Forces would be prepared to offer their services on a volunteer basis to train such men. Much more emphasis should be laid in terms of sponsorship and liaison between the

  813
  Regular Army units and the Territorial Army.
  I should like to deal with one highly parochial matter. In my regiment we have what we call a Grenadier Day, when the Regular battalions meet the comrades and their families. I believe that we should be delighted to have a Territorial regiment affiliated to us, which would come to such meetings, so that people started to get to know each other. The Territorials would feel part of the national defence system. They would know the individuals involved.
  May I make a plea that ammunition be granted for these days? It might be costly, but it would be cost-effective. It would help on such days with the recruitment of young people into the Army.
  Now, may I ask some brief questions? Will my right hon. and hon. Friends please press for responsibility for civil defence to be moved from the Home Office to the Ministry of Defence? Will they press for realistic action to be taken to restore the credibility of the civil defence? People are worried that no effective civil defence exists. It must be restored, as a matter of urgency, in terms of national morale.
  The superb military hospital at Mill-bank was closed to make space for the expansion of the Tate gallery. That expansion has taken place in the garden of the Tate gallery. The military hospital building stands empty. The military hospital is in the centre of London. Formerly it gave the Armed Forces access to the finest medicine in this country, because the forces were near the specialists in the large London teaching hospitals. Those specialists must now go miles, to Aldershot, Greenwich, or Woolwich. Will the Minister please review the question whether it is worth reviving this excellent hospital? It is one of the cleanest hospitals that I have ever visited and it had an important link with civilian medicine. Will the Minister give to the Armed Forces, once again, this important access to the highest standard of medicine available in the country? We owe it to them.
  Finally, is my right hon. Friend satisfied that our capability in chemical and biological warfare is anywhere near adequate for the defence of this country? Do we have anywhere near enough counter-measures? Is enough training carried out in to
  814
  day's Army in terms of chemical and biological warfare as opposed to nuclear warfare?
  In closing, I apologise to the House if I have to leave the Chamber before the end of the debate to attend to duties outside.
  6.38 pm
  Mr. Stephen Ross: I should like to congratulate the hon. Member for Winchester (Mr. Browne) on raising some interesting points. I intend to deal shortly with the question of chemical and biological warfare, but I cannot agree with what he said about that subject.
  I believe that the Millbank hospital is earmarked for the Turner exhibition extension. The money for it was left by Mr. Clore. I have a slightly divided opinion about that. I should like to see the Turners exhibited. I understand that the Turner which was recently sold in America was the highest priced painting ever sold. There are vast numbers below the Tate Gallery. We should see them.
  I speak with some diffidence, following those who have preceded me, for I have never served in the Army and certainly not in the Guards. I served in the Royal Navy. I feel like falling in behind the hon. Member for Winchester in column of threes. At the age now of nearly 54, I think however, I might be excused that parade. My own impressions, from my limited experience as my party's spokesman on defence, are that the Government have to be credited with the fact that Service morale is greatly improved. This is evident to me from attending Service functions in my constituency and elsewhere. At one time, as the hon. Member for Winchester said, people were leaving at a phenomenal rate and the situation had become very worrying.
  One reason for the change is that the Services give a wonderful training to men who are sought, even today, by outside industry. One has only to visit places such as Crawley and Gatwick to find that skilled men are very much in demand and there is little unemployment. I believe that this state of affairs will continue. We have to find ways to keep these skilled people—they cost a great deal of public money to train—in the Services. The hon. Gentleman is right: there will be a gap to fill.

  815
  I should like to enter a plea for some of the Service men who have left in the last two or three years. I refer to their pension position. Now that the Prime Minister has set up an inquiry to look into the effect of the inflation-proofing of pensions I presume that Service men will be considered. It is wrong that there should be vast differences in the pensions of Service men, some of whom have given many years' service to this country but who find themselves penalised because they left the forces at a particular time.
  I find that many local authorities refuse to put Service men on their housing lists unless they have a job to take up. That seems almost impossible because a Service man cannot get a job until he actually leaves the Forces unless released early in order to attend interviews. That situation needs to be examined. Under an Act that has been strongly criticised and that I put through the Hosue—the Housing (Homeless Persons) Act—a provision, introduced by the hon. Member for Gosport (Mr. Viggers) was made that responsibility should not fall on garrison towns for housing Service men but should be passed to local authorities of their choice. A circular was issued at the time asking for priority to be given to the matter. It should be pursued.
  The pay increase has certainly improved morale. But the provision of equipment still niggles Service men. It has been forcefully expressed from the Opposition side and also by the hon. Member for Winchester that there is a need to modernise and update equipment. I attended the British Army equipment exhibition yesterday which confirmed that we can provide the goods. I should like to congratulate the organisers of the exhibition.
  I attended the naval exhibition last year and this was I believe the third Army exhibition on the present site. It was a superbly organised exhibition and the Ministry of Defence deserves to be congratulated. Whatever may be the moral implications of selling arms abroad, the exhibition was extremely impressive.
  I should like to add my voice to some points that have already been expressed. What is to happen about the tank re
  816
  placement, the Challenger? Are we to buy 300 Challengers or even about 70 Chieftains? I am surprised that there has been a delay. The MCV80 and the tracked Rapier have been mentioned. Those are items of equipment that the Army expects. It would be a great help if decisions could be made without further delay. One has the feeling that some decisions are held back because of the independent nuclear deterrent replacement, the Trident.
  I hope that the Under-Secretary will agree that I have been consistent. I have been opposed from the outset as, for many years, has my party, to the independent nuclear deterrent. I do not believe that we can provide our Forces with the equipment that they need at present-day costs and, in addition, place such a burden on our public expenditure as the replacement of the Polaris with Trident. I wish to make my position clear. As far as the Parliamentary Liberal Party and I are concerned, our NATO membership is sacrosanct and we accept cruise.
  It is a pity that no Labour Members below the Gangway are present. They seem to express volubly their views in Trafalgar Square against cruise, but they are not in the Chamber to take part in the debate. I was delighted to hear the views of the right hon. Member for Mansfield (Mr. Concannon) and to hear that he stands firm on the matter. If we accept the commitment to NATO, we must accept the cruise missile.
  I should now like to enter a plea for what I admit is a constituency interest. It relates to the NATO order for the early warning radar system. Two large orders have already gone abroad. The first, the Civil Aviation Authority order for the replacement, has gone to Philips. I recognise that there is some backwash into this country. At one time it was going to Westinghouse. Secondly, the first of the NATO orders has gone to General Electric of America. Yet this is the country that invented radar. I refuse to believe that the Marconis and Plesseys of this world cannot produce the goods. I appreciate the problems of tendering in NATO. The Government have to accept the decisions of the rest of the members of NATO, but there are strings that can be pulled. I should like to press that we put in our oar on this

  817
  matter. If this major contract is lost to this country, it will be disastrous for the export prospects of these two companies. About 1,200 of my constituents work for Plessey and I am not backward about putting forward their claims.
  One aspect of defence expenditure has not been covered. It is most important that we spend more—the amount is comparatively small—on advice and back-up facilities to friendly countries in Africa and the Gulf States. This matter was forcefully brought home to me yesterday. There were visitors at the exhibition I attended from friendly African States and the Gulf who said that they were almost desperate because they had bought British equipment but no one was able to show them how to use it.
  I was delighted with the remarks the Minister made about Zimbabwe. We shall, however, need to do more. The sum involved will be minor in relation to the defence budget. If we do not help these people, they will go to the French or the Germans or, in the end, to the East, to the USSR. We could have a lot of money in the long run while at the same time keeping the friendship of these countries. British Army officers have experience of carrying out this work with discretion and better than any nation in the world. We should make use of them.
  The hon. Member for Winchester mentioned chemical and bacteriological weapons. I trust that this is one area where we will not increase expenditure to any great extent. I recognise that we need to know how to deal with such weapons in a defence capacity. I believe that we possess great knowledge. I draw the line at such weapons used in an offensive capacity. I reject the idea that we should ever contemplate using chemical or biological weapons.
  Mr. John Browne rose—
  Mr. Ross: I shall give way in a moment. One has only to travel down the west coast of Scotland to the island of Gruinard to realise that it was infected with anthrax in the last war, and it will take 100 years before it has gone. It would be appalling to contemplate having these weapons up our sleeve.
  Mr. Browne: I must make clear that my question was based purely on defen
  818
  sive grounds. I agree with the hon. Gentleman. I abhor the aggressive use of such weapons.
  Mr. Ross: I am delighted to hear the hon. Gentleman make that distinction. I, of course realise that our potential enemies do have these weapons. We should know how to deal with them, but we should not use them in an offensive capacity.
  Mr. Robert C. Brown: Does the hon. Gentleman accept that there is no reason why we should have an offensive capacity? Our duty to our Service men is to give them the best possible protective equipment. The British Army has the best in the world.
  Mr. Ross: That is the voice of experience and I accept what the hon. Gentleman says.
  In a foreword to a book published in 1968 Lord Ritchie-Calder said:
  "Whilst one group of scientists are bending their energies to prevent diseases, another is devising man-made epidemics. While one set is discarding chemicals saying 'We dare not use that' another is picking them out of the trash can and saying 'You bet we can."'.
  That attitude must not be allowed to prevail.
  The Government have done quite a lot for the Territorial Army. I am delighted to hear that they are doing more. I doubt if the people of this country are really facing up to the threat which faces us. We need a larger and even more efficient TA and greater civilian participation in home defence.
  The Isle of Wight is the smallest county in the country. The chief executive of the county is chairing a study on home defence by chief officers of local authorities. He recently addressed a Conservative Party Back-Bench committee. His excellent report is to be submitted to the Home Office. I believe that it should also go to the Ministry of Defence.
  6.51 pm
  Mr. Antony Buck: It is a pleasure to speak after the hon. Member for Isle of Wight (Mr. Ross). I agree with much of what he said. We have had the opportunity to discuss defence matters in some detail because we went together to a SACLANT symposium. The hon. Gentleman and I agree about almost everything in defence matters except the

  819
  Polaris replacement. I am surprised and sorry that the Liberal Party does not agree with the view that is held by me and most of my hon. Friends, that it is important that there should be another decision-maker in NATO relative to the us or otherwise of the nuclear deterrent. It is no use Opposition Members quoting Field Marshal Carver, because I could quote Admiral of the Fleet Lord Hill-Norton back at them.
  We are in the deterrent business. If the system has to be used it has failed. The fact that we have it makes us less vulnerable, in any circumstances, to any type of attack from any nation, particularly Russia or the Warsaw Pact countries. One Polaris can deliver the TNT equivalent of all that was released by the Allies in the last war. To use the jargon, it can inflict "unacceptable damage" on the enemy. It makes us almost immune from attack.
  The French and Germans believe that it is important that we should have our independent deterrent. It will be interesting to see whether we can persuade them to put their francs and their marks where their mouths are to help with the cost. The majority of politicians to whom I have spoken—I am speaking not only of Christian Democrats—believe that it is important that we keep our nuclear deterrent.
  Mr. Concannon: Of course the French and Germans would like us to have a nuclear deterrent. However, if they were asked whether they want us to have this status symbol or to re-equip our NATO forces to keep them up to date, they would prefer us to look after the NATO forces. That is where we stand.
  Mr. Buck: I have posed that question to many European friends. I received a variety of answers. Some said that they would prefer the conventional force to be kept up. Others took a different view. A straw poll would reveal that the majority believe that it is of paramount importance to keep our independent deterrent. Some German politicians are looking for ways in which they can help with the payment of it without having a "finger on the trigger". I hope that an official Government attitude is taken, so that we have an independent deterrent the cost of which is shared by some of our allies.
  820
  I congratulate both Front Bench speakers on making speeches that were relatively free from jargon. It is important not to talk in jargon. When I first became Minister responsible for the Royal Navy I was puzzled by some of the alphabetic abbreviations. Cincnav (Home) sounds vaguely disruptive of domestic life. Another abbreviation reminded me of the criminal Bar. It is important not to use jargon, in order to get over the message.
  I was a little puzzled when the Minister talked about BATES. I wondered at first whether he was talking about "The Darling buds of May", but I now realise that he meant the battlefield artillery target engagement system. I advise my hon. Friend not to use such expressions more than infrequently.
  It is a blessed thing that there is a substantial element of agreement among responsible groups in all parties. I do not believe that we on the Government Benches have a monopoly of patriotism or of concern for the Armed Forces. I wish that hon. Members opposite, below the Gangway, did not think that they had a monopoly of concern about social matters. I concede that the Opposition spokesman and the hon. Members who sit near him are deeply concerned about defence. There is disagreement about the Polaris replacement, but the argument for a replacement is valid.
  It is sad that the headlines in much of the popular press today relate to the misery of a young soldier. I represent a garrison constituency. The saga related in today's press is, thank God, wholly exceptional. Wherever we find even a hint of bullying we must do all that we can to ensure that it is eliminated.
  Some hon. Members sometimes indulge in bullying in the House but it is rightly stamped on by the Chair. It must be stamped on in the Forces. We do not like bullies. Any bullying must be fully investigated. A special inquiry into the incident is suggested. I would welcome such an inquiry. That ties in with our discussion of Army discipline. It also ties in with my activities yesterday. I spent yesterday at what—to the right hon. Member for Mansfield (Mr. Concannon) is perhaps home from home—the military corrective training establishment at Colchester. I mention that the right hon. Gentleman has been in that establishment,

  821
  though I cleared the matter with him before doing so. What a man it made of him! [Interruption.] Hon. Gentlemen below the Gangway should ask the right hon. Gentleman direct about the cause of his having been in that establishment.
  I spent yesterday at Colchester as a member of the board of visitors, and I should like to pay tribute to the work that is done there—not only for the Army because malefactors from the other Services are now there as well. I pay tribute to Colonel Paul, the commandant of the MCTE. I commend his work there, as does my hon. Friend the Member for Aldershot (Mr. Critchley), who has served on the board of visitors.
  I am glad that Colonel Paul's connection with Colchester will not be severed. He is to become the adjutant of the garrison. That gives pleasure to everybody. I am also glad to note that the job of garrison adjutant has been upgraded to the rank of lieutenant-colonel. I have advocated that for a long time. The garrison adjutant has to deal with the commanders of the resident battalion in Colchester and it is appropriate that he should now carry, similarly with them, the rank of lieutenant-colonel.
  Bullying is stamped on at the MCTE We have the same attitude in this House, and that attitude should and usually does obtain throughout the Armed Forces. The tragic matter reported today must not be allowed to detract from the fact that the Armed Forces in general, have had a good year, as has the Army in particular. It has been good to see the upturn in recruitment and to observe the individual achievements that have been accomplished. One recalls in particular the work of the SAS in Knightbridge. That was a truely heroic event which caused a great uplift in morale throughout the country and the world. However, that event has already received enough publicity.
  The other great triumph of our forces arose from our participation in the monitoring force in Zimbabwe. A short time ago I received a letter from my right hon. Friend the Secretary of State in response to my suggestion that there should be an official history of the deployment of our troops in Zimbabwe. My right hon. Friend was sympathetic and said that there might be a small publication coming out in a matter of months. I should
  822
  be glad to hear whether progress has been made on that.
  We should be proud of the performance of our troops in Zimbabwe during the difficult election period and the period immediately afterwards. I listened with interest to what my hon. Friend said about the continuing help that we are giving with training to the troops of Zimbabwe.
  I suppose that Northern Ireland is the backdrop to the activities of our Armed Forces and in particular to the activities of the Army and the Royal Marines. I have lost track, but I think that I paid my thirteenth or fourteenth visit to the Province during the last year. I found, because of changes, that morale was high and that there was a remarkable spirit among our Forces.
  I should like my hon. Friend to deal with certain matters and in particular the issue of across the border co-operation. I do not think that we have got that co-operation right yet. That such co-operation should always be channelled through the RUC seems not to be sensible. I would have wished for a hot line between the Gardai and the British Forces and sometimes a direct line, as appropriate, to the armed forces of the Republic when a joint major exercise is contemplated.
  I should like to hear the views of my hon. Friend about hot pursuit across the border. It is not sensible that our forces should in all circumstances have to stop short at the border. I know that attempts have been made to get agreement on this matter with the Irish Government, but whether progress has been made in the matter I know not. It is important that we should have better across-the-border co-operation between the forces of law and order on both sides. I find it wholly amazing that there are still people who get sentimental about the IRA. apart from co-operation across the border we need to mount a major propaganda exercise in which our Armed Forces, in particular, must participate.
  The hon. Member for Isle of Wight who was with me in America last week, no doubt talked about Northern Ireland to Service chiefs and others from various countries. There is a mammoth and massive misunderstanding in the United States about the Northern Ireland problem. Even senior Army officers seem to

  823
  think that it is a matter of aristocratic Protestants keeping down poor working-class Roman Catholics.
  The Americans have no conception of the complexity and difficulty of the problem. There should be a greater understanding and knowledge of the incredibly difficult task confronting our forces in Northern Ireland. I suggest that the Army, together with the Northern Ireland Office and the Foreign Office, should mount a propaganda campaign so that our allies realise what we are trying to achieve in Northern Ireland, and the burdens that we bear.
  I am worried about the pattern of Army life. We should see that life in the Army is made more attractive. The coming of Spain into NATO—as I hope will happen, so long as Spain continues to demonstrate adherence to democracy, as I believe she is doing—might help by providing more attractive training areas and a more attractive pattern of Service life. Such a pattern may emerge through greater co-operation in NATO as well as co-operation throughout the Commonwealth.
  A posting to Northern Ireland is not a felicitous prospect for the future. There are the home postings to Colchester and Aldershot and occasionally there are plum postings to such places as Hong Kong. We should try to make the pattern of posting and training more attractive.
  I pay a high tribute to our Armed Forces. It is a privilege to serve, as I have tried to, as a constituency Member for a garrison town. We face many problems. One of them, brought to my attention yesterday, is the matter of housing. I know that my hon. Friend will say something about that.
  The position in respect of the sale of houses is unclear, I do not think that it will be sufficient for my hon. Friend to say that that is a matter for the PSA. The issue has been billed as a War Office matter. People who have lived for some time in their own houses—senior NCOs and others—should have the chance to buy them. We know that a scheme is about to come to gestation.
  I know that I carry the House with me when I pay a whole-hearted tribute to the
  824
  esprit and the quality of service in our Armed Forces, particularly the Army.
  7.8 pm
  Mr. Wm. Ross: Since a number of hon. Members have spoken about Northern Ireland, no doubt the House will not take it amiss if I concentrate my remarks on the role of Her Majesty's Armed Forces in the Province.
  Because of recent events it is well that the House should ask a few questions about what is going on and that we should seek answers to those questions. When I am asked, as I often am, to express my revulsion and anger at terrorist action in Northern Ireland, I find myself in a dilemma. There is a need to make the House, and our fellow citizens in Great Britain, aware of the anger and disgust felt by people in Northern Ireland. But there is also the fear within us that, if we make a public hullabaloo, that will encourage the IRA murderers to repeat their deeds. That is something which is constantly with us. I notice the right hon. Member for Mansfield (Mr. Concannon) nodding his head. He is well aware of that aspect of a politician's life in Northern Ireland. We must walk a narrow and delicate line.
  Because of that, I often make my views privately known to the security forces, but there are times when a public demonstration of a resolution to defeat the politics of the gun barrel is called for. The Secretary of State for Defence and the Minister, had they been with me in Newtownbutler on Monday evening, would have seen such a demonstration of 10,000 sober, sensible, reasonable British citizens expressing their sense of outrage because they must go about their daily business in the middle of what can only be described as a guerrilla battle ground.
  That that circumstance exists is a monument to the failure of successive Governments, who have failed to understand the nature of the attack on the British citizens who live on the frontiers of the United Kingdom. The hon. and learned Member for Colchester (Mr. Buck) referred to a lack of understanding among people overseas. I fear that that lack of understanding is widespread even in this House, and I should like to illustrate it by quoting what appeared in the Belfast Telegraph on 24 June. The

  825
  words were spoken by Councillor Sweeney of the Magherafelt district council. According to the article:
  "It saddened him to hear of anyone being killed but all they were hearing at the present time was how many Protestants were being shot in Fermanagh. The reason they were being shot was that they were members of the UDR. Anyone who took sides in any fight was putting one's life at risk. This whole idea of being shot because you are Protestant is a complete fallacy because the IRA are not interested in what your faith is. A Protestant is shot because he is a member of the UDR and is prepared to support the union with Britain".
  In other words, people are shot because they dare to wear the Queen's uniform. They are shot because their political belief is that the unity of this nation should be maintained. Those are the only conclusions which one can draw from those remarks. I wonder how many hon. Members who speak lightly about Northern Ireland really understand that aspect of life there?
  Yet politicans who have served in government over the past 10 or 12 years have stood for elections and have accepted Government posts. They have proclaimed by acceptance of those posts that they were prepared to shoulder the duties and responsibilities which go with standing up and saying to the electorate "Please vote for me. I know how to run this country". They are telling people that they understand the circumstances in each part of this country.
  I maintain that the first duty and responsibility of such people is the protection of the citizens who are under attack by those who are hostile to the State. The people who came to Newtownbutler on Monday came to remember their dead. But they also came to ask the Government, whose members were so willing to commit themselves to a strong law and order and defence platform when the votes were cast on 3 May last year, whether they are still committed to the same platform today. We wonder whether they are committed to that platform to the extent that they will meet and defeat a national foe on national territory and on the national frontier. It is certain that if they do not have the will to meet the national foe and to defeat it there, when a larger issue comes along they will be an equally broken reed for the people of this country to lean upon.
  826
  I believe that a victorious end to the battle against the Provisional IRA and its associates in Northern Ireland is vital if we are ever to demonstrate a Government and national will to defend British people in all parts of the Kingdom. The Regular Army and the full-time and part-time UDR are heavily committed. They have suffered heavy casualties in Northern Ireland and they must not be allowed to meet defeat in this war because of a lack, or failure, of political will.
  As I believe that is so, I am glad to have caught the eye of the Chair in this debate. As I have already said, some questions must be asked and they must be answered. That is why I took the precaution of drawing to the Minister's attention the general points that I intended to raise, so that he might deal with them in a reasoned and considered manner.
  Anyone who takes any interest in security matters or terrorist tactics knows perfectly well that the tactic of the terrorist is to evade direct conflict with any force which is hostile to him, when the conditions of conflict allow the terrorist's opponents to bring their military expertise, equipment and superior fire power into cohesive and effective action against the terrorists. That is not a mark of terrorist cowardice. It is a mark of terrorist good sense. It is the only way in which the terrorists can fight and hope to survive. We all know that.
  Those hon. Members who took part in such activities behind enemy lines during the last war know that perfectly well. Those of us who, like myself, served in another force fighting terrorism in Northern Ireland many years ago, also know it perfectly well. Indeed, the terrorist strategy is always to nibble at the edges of authority in any country in order to weaken and destroy the ability of the majority of that country to defend its society and State.
  I am perfectly well aware that whenever I put the theory in that way it sounds mild and detached. But the practical effect on the ground is not mild. It is brutal, bloody death. It is thunderous, murderous destruction. A gunman who appears without warning—and he does tend to appear without warning—with murder in his heart, on his face and in his eyes, is not an object about which

  827
  the victim, who is almost certain to die, can take a detached view. It can only be a pounding and desperate terror. It is as well that the House should sometimes think about that fact. The practical effects are orphans, widows, childless parents, funeral processions and a steadily rising anger against the authority which allows this to happen and continues to allow it to happen.
  As a representative of the people of Ulster, it is my duty not only to protest about what is happening there but also to offer advice to the authorities as to how the situation might be improved. There is no better place to offer that advice than in a debate on the Army, which has for so long been so heavily committed in Ulster.
  There are now two types of terrorist operations in the Northern Ireland context. There are the internal and external threats. They are closely related. Indeed, a symbiosis exists, and they would find the greatest difficulty in maintaining themselves if they were divided and kept apart.
  When I first spoke on the terrorist problem in this House about six years ago, I asked that the land frontier with the Irish Republic be sealed. During the last six years, I have seen nothing in the Northern Ireland security situation to alter my view that a firm control of the frontier is the vital prerequisite to victory over the gunmen. I must also say that I really doubt whether this Government, any more than their predecessors, have the political will or the political or moral guts to seal the border.
  Nevertheless, I hope to persuade, or at least to shame, the Government into providing a level of frontier control which will severely hinder the free flow of murderers from and back to the Irish republic. That was done during the 1956 to 1962 IRA campaign. It was done effectively by blocking many roads, which are well known to the Army commanders and the police authorities in Northern Ireland. It was done with fewer men than are presently committed. One must wonder why the situation was allowed to reach the stage at which it cannot now be done. I am weary—those who live along the border are more weary than I—of hearing the excuses for not doing it again. If the House permits
  828
  me, I should like to list some of those excuses.
  The first is that the local people will either fill in or by-pass the craters. So what? Surely we can find the equipment to dig a bigger crater. We should not only dig a bigger crater, but we should dig two or three more at 30 yard intervals. That would give the terrorists something to think about. Every time they fill them in, we must dig them out again, and keep them dug out. Surely, within 50 yards of the border, we can manage to keep at least one hole open.
  The same applies to blowing bridges. That can be backed by craters and dragons' teeth. The heavy concrete road blocks can be multiplied almost to infinity. Three or four rows of them at 50 yard intervals would be a better deterrent to the gunmen than that which presently exists. Some would say that that would cause an enormous amount of inconvenience. I have always found that funerals are a tremendous inconvenience. We could tolerate an enormous amount of inconvenience if it prevented one life from being lost.
  We have not shown the determination or the will to meet the foes of the United Kingdom, whether they live within or without its borders, or on the frontiers of the nation The roads will need, perhaps not regular checking, because that would be fatal, but frequent checking to ensure that the road blocking system is maintained, adequate, and still effective.
  Mr. Dalyell: On several occasions I have been with the Army in Northern Ireland. I have also visited Northern Ireland on other occasions, and have sat through the Irish debates in the House. There is no lack of political will on either side of the House. The Home Secretary, the Secretary of State for Defence, my right hon. Friend the Member for Leeds, South (Mr. Rees) and many others have sweated blood to try to do something in Northern Ireland. The truth is that it is not a lack of political will, but that those of us from this side of the water, for reasons of 600 years of history, are not very good when dealing with the affairs of Northern Ireland.
  Mr. Ross: I am grateful to the hon. Gentleman for his remarks. I take them to mean that he, at least, is willing to listen to what I have to say. One excuse

  829
  that is made to me is that some senior officers and senior policemen take the view that even if there were blocking arrangements, and even if we were prepared to tolerate any inconvenience, it would not be an effective deterrent because all that the gunman needs is a couple of cars, one on either side of the border. Anyone who takes that view must be shortsighted in the extreme. In those circumstances, the gunman needs far more than two cars. He needs luck, good communications and split-second timing. He has to stop the car, get out of it, go through the road block, and get into the other car. Either those two cars arrive at exactly the same moment, or one has to wait. In either case, seconds are lost, and seconds are vital to the fleeing murderer—he needs them all.
  The limited number of roads left open need to be effectively controlled. I direct the Minister's attention to the wide variation in the level of control evidenced at different points on the border. Hon. Members who have visited the border with me will know that on the Londonderry and northern part of the County Tyrone border, control of the major points is firm. But it took a long time to achieve that. There was one back road into the Creggan estate that existed until late last year before it was finally sealed. One could drive from Donegal to Creggan without being stopped at any permanent road check.
  Although I would not be prepared to give the present arrangements three cheers, I would be prepared to give them two cheers. They are not 100 per cent, effective. I am not convinced that they are in quite the right place. But at least they are a lot better than they are in other places. As one follows the border south and east, the level of control deteriorates. It seems to be at its worst adjacent to the worst areas of terrorist activity in Fermanagh and Armagh. Hon. Members may wonder which is the chicken and which is the egg in that situation. I am not sure, but if we gave border control priority we could see whether the situation improved. In other words, try that egg and let us see if it hatches out a chicken.
  We are told that the Army carries out a good deal of covert work. It should do far more. It is clear that the Provisional IRA and its fellow travellers are scared
  830
  out of their wits by the possibility of being ambushed when they are on their way to murder someone.
  Mr. Dalyell: They are not scared.
  Mr. Ross: They are scared. They are scared of covert operations, they are scared of running into undercover people, they are scared of people who sit down in a field or behind a hedge along the road, and stay there for four or five days without moving or showing themselves. They are not as frightened of mobile patrols that they can see and hear. I assure the hon. Gentleman that those are the facts of the matter. The one thing that the IRA fears is the covert movement of men throughout the countryside. That is cleary proved, because the IRA, like anyone under attack, reserves its most violent verbal and murderous attacks for those that it fears most. We all know that it fears most the covert patrols and the local forces.
  I listened with some interest to the Minister's opening speech, when he referred to the Territorial Army. He said that there was a possibility of using it for guard duty in the event of a major war. He went on to say that local people were better at that than anybody else. I began to wonder whether the Minister, his officials and the Army were not moving towards a Scottish, English and Welsh UDR for use in a major war. If there is a major war, the Territorial Army will not be in Britain—it will be in Europe. If the Minister, with a slip of the tongue, was indicating that, perhaps he will tell us whether he is intent on forming a Home Guard for defending fixed installations in Britain. That opens up many interesting thoughts.
  The IRA has mounted a long series of attacks on the local forces in Northern Ireland. There is no doubt that it fears them and that it is worried about people who know the territory. There is no doubt that it fears the SAS and similar groups of men. Such organisations should be expanded and used continually, especially in the border areas. In addition, the Government have other avenues open to them, and those avenues should be used. For example, the common travel area in Britain is a privilege, which is part traditional and part EEC. It carries with it responsibilities which the Republic has never shouldered. I

  831
  do not see why that should be allowed to continue. The Government should withdraw or suspend the rights of unhindered travel until the Queen's subjects are no longer the regular victims of terrorist attack from their neighbours' territory. As a side issue, the Government should be discouraged as actively as possible from giving up any of their existing powers to deal with terrorism. Even the practice of detention without trial should be retained. Any reduction of or withdrawal from the firm and rigid position on these matters will be seen by the IRA as a retreat by us and a victory for it. It will spur the IRA on to further acts of terror and violence.
  Mr. Dalyell: Perhaps.
  Mr. Ross: The hon. Gentleman has admitted that he does not know much about the position in Northern Ireland, and now he is not prepared to listen and learn.
  My final questions relate to the co-operation between the RUC and the Army, which everyone says is excellent. However, the newspapers pointed out to us regularly that there was friction between the former respective heads of the Army and the RUC in Northern Ireland—a friction that led last year to the installation of Sir Maurice Oldfield, and now Sir Brooks Richard, as security coordinator.
  I was told that Sir Maurice was to report to the Secretary of State for Northern Ireland on his inquiry into co-ordination and the whole security position in Northern Ireland. Since the army in involved, will the Minister tell us whether that report is yet available? He is bound to know about it. If it is not available why not? It is long overdue. If it is available, have its recommendations been acted upon. Have those recommendations which have been made and acted upon been helpful?
  We have heard the remarks of the Chief Constable of the RUC about a possible flare-up of violence in the near future. One is always suspicious about what appears in the press, but if he has been correctly reported the need for proper frontier control is vital in order to prevent his grim prophesies from becoming bloody reality. I make no frantic call today for action which the Government
  832
  could not easily carry out. I simply ask the Government to carry out their clear duty to protect their citizens.
  I believe that the men in every regiment, whether they are regular soldiers, full or part-time UDR, are well able to do the job for which they have been trained. That was well demonstrated at the Iranian embassy in another context. Slightly different methods may be needed in Northern Ireland, but the men are certainly capable of doing the job. If the Government have the courage to overcome their timidity and to take the first small steps for which I ask, that which is now beyond their resolution and courage will shortly be within their ambit.
  7.32 pm
  Sir Nicholas Bonsor: I attempted to interrupt my hon. Friend the Under-Secretary during his speech to raise the question of our troops in Rhodesia. I wanted to bring to his attention the concern felt by many Conservatives that the magnificent bravery displayed by our troops there should be recognised by some form of medal or other award. I hope that my hon. Friend the Under-Secretary and my right hon. Friend the Secretary of State will bear that in mind when considering what should be done.
  I want to concentrate on one point which has already been raised by my hon. Friend the Member for Winchester (Mr. Browne). It concerns the Territorial Army and its role in home defence. My hon. Friend the Under-Secretary mentioned the unthinkable thought of invasion by Soviet troops in the Western European theatre. I want to draw attention to that terrible prospect and to ask hon. Members to assume that that will happen and to consider the consequences.
  Quite clearly, our Regular Army and reserves, backed up by the vast bulk of our Territorial forces, will go into the European mainland and attempt to fulfil our difficult NATO commitment to hold the forward line of defence. Whether or not that succeeds, we shall be unable to wage a conventional war at that level for very long. Unless we have an instant victory, the war must leave us with one of two stark choices. Either it will escalate into a nuclear exchange, or we shall have to negotiate terms which will almost certainly involve the equivalent of a surrender for this country.

  833
  What will happen to this country during that period when our regular forces are stuck on the European mainland, unable to return home because our Navy and Air Force are not strong enough to give the kind of cover which enabled a withdrawal to take place so effectively in 1940? The point has been made, but I wish to emphasise it, that at the moment we have no civil defence establishment worthy of the name. I had the pleasure of meeting the chairman of the civil defence body on the Isle of Wight. He was mentioned by the hon. Member for Isle of Wight (Mr. Ross). What he told us was frightening. There is an undoubted and urgent need for changes in our civil defence structure and for a new civil defence force to be created. That, however, is a matter for my right hon. Friend the Home Secretary, not for my hon. Friend the Under-Secretary of State for Defence for the Army, and so I shall not go into detail on the needs for the change.
  Intertwined with and inseparable from that issue is the need for an armed home defence capability. At the moment only 15 battalions of the TA are scheduled to be left in this country to fulfil that role. Some 8,750 men will have the task of defending the entire nation against whatever forces may be sent against us. That, taken with the virtual certainty of a contemporary nuclear strike—we hope only at given targets, but undoubtedly in sufficient strength totally to disrupt law and order and ordinary civilian life—means that there is an urgent need for a county-based home defence unit.
  I find it difficult to see how any argument can be mounted against such a vital necessity, but I have to anticipate, since my hon. Friend may not accept my arguments—and he has the last word in the matter—the case which may be raised against the prospect of giving back to the TA a county-based strength of 100,000 men—150,000 would be better—spread across the country. In that way, each town, village and street could be defended by those who know them well and who are best able to fulfil that role.
  It might be argued, at first, that the volunteers would not be forthcoming. I think that two or three years ago when people were not fully aware of the dangers that face us that was probably true. I do not accept that it now is. I believe that 40 per cent. of those asked
  834
  in a recent opinion poll thought that there would be a war this century—that is, a war in which this country was directly involved. Of those asked, 25 per cent. said that they thought that it would happen in the next 10 years. I very much hope that they are wrong, but at least at the moment we have a realistic appraisal of the dangers by a large percentage of the civilian population, and this is the moment for us to recruit volunteers.
  It is worth recalling that in 1938 there were 175,000 members of the TA—three times the number we have today. A more striking fact still is that between January 1938, when the people would not face the prospect of a war, and August 1939, when it was stark and staring at them the numbers rose from 175,000 to 400,000. That latter figure was backed by more than 500,000 air-raid wardens operating voluntarily.
  I believe, therefore, that we could get a huge number of volunteers if we tried to establish a home defence force as opposed to a Territorial Army force which is used in a reserve capacity. I did not like, any more than other hon. Members liked, the distinction between TAVR 2 and TAVR 3, and I am delighted that the "Terriers" have their name back. As one who served in a territorial regiment for eight years I am proud of the record that the "Terriers" have held for so many years.
  We need a force to fill a role distinctly different from that played by most of the TA as regular reserve back-ups. We need to get to grips with the whole defence capability. We need to set up units properly equipped to fulfil that purpose.
  The second argument that might be used is that such a territorial unit could not possibly be effective against Soviet aggression. I do not accept that. If there are people with nowhere to go, nowhere to retreat to, trying to defend their families and their homes, they will fight to the death. I have no doubt that the spirit of this country which showed itself so well in two world wars is still with us today, waiting to be tapped for the kind of organisation that I am urging my hon. Friend the Under-Secretary to create.
  I believe, therefore, that it would be useful to have a force of 100,000 or

  835
  150,000 men equipped with small arms and given simple adequate communications equipment, supplied with Land Rovers to make them mobile, and given the training that the TA has always been very good at giving to its men so that it could operate in its area. Then, such a force would not only be highly effective but would be an adequate deterrent against anyone attempting to invade our shores.
  The third, and in the present circumstances the most likely, argument against such a proposal is that we do not have enough money or that other priorities take the available funds. Whatever other priorities there may be, there can be none more important than a home defence capability. Unless we have such a force, there will be a chink in our armour which will render the whole defence strategy useless as a deterrent. What use is it telling the Russians that we have some rockets that we shall fire at them, when we know that they have a very good civil defence capability—which we lack—for surviving such an attack? What use is it telling the Russians that we have good, well-armed front line forces that can hold a line in Germany if they know full well that we have no ability whatever to defend the women and children who are left behind? They will know that we will never dare face such a prospect. Rightly or wrongly, they will take whatever we say to be bluff.
  The greatest priority in defence expenditure must be the creation of a home defence capability. It will not be expensive. It costs £1,000 to train a Territorial Army man at present, as against £10,000 to train a regular Army man. We should be able to provide a home defence unit of 150,000 men more cheaply than that. We are talking about a figure of less than £100 million, out of a total defence commitment of about £8,700 million. That is a tiny percentage to provide a unit to carry out an important role—a role without which all the rest of our efforts will be in vain. If we fail to do that, we shall not be doing our duty towards future generations. We shall be selling the future survival of our race for a handful of silver, and if we do that, we fully deserve the title of a Judas generation. I do not believe that we shall do that,
  836
  and therefore I ask my hon. Friend to give three undertakings.
  First, I should be grateful if he would give an undertaking that the Shapland committee recommendations that the 15 home defence TA battalions that are currently allocated that role should be properly upgraded and equipped to fulfil it. Secondly, I ask the Government to undertake to give a lead by releasing, or ensuring the release of, people in the public service to fulfil Territorial Army commitments. I ask the Government to go further and to ensure that private employers are bound to release their employees to perform the same service. I appreciate the point that my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) made about small companies, but in that event compensation should be given to enable small companies to fulfil the commitment. Thirdly, I ask that the county structure should be reintroduced. Counties which do not have a county regiment now should have one, and their equipment should be suitable for home defence roles, with some anti-tank capacity, transport and equipment for communication. If that is done, so we shall be able to echo the words that Winston Churchill used in this House almost 40 years ago. He said:
  "I have, myself, full confidence that if all do their duty, if nothing is neglected, and if the best arrangements are made, we shall prove ourselves once again able to defend our island at home, and to ride out the storm of war, and to outlive the menace of tyranny."
  7.43 pm
  Mr. Tam Dalyell: About 12 years ago, I remember listening to the ranting, uncharitable maiden speech of Miss Bernadette Devlin given from the position from which the hon. Member for Nantwich (Sir N. Bonsor) spoke. That was 12 long years ago. Earlier in the week we heard on the radio the ranting speech of the hon. Member for Antrim, North (Rev. Ian Paisley). The hon. Member for Londonderry (Mr. Ross) does not rant, but he will excuse me if I say that the kind of speech that he made produces the same sort of depression that many hon. Members from this side of the water who have tried to take an interest in the affairs of Northern Ireland feel when we listen to speeches given from either side of the argument. What is he asking?

  837
  I listened to the hon. Gentleman carefully. I do not know whether the Minister will comment on his speech. The hon. Member was asking for 100,000 men from the British Army to be tied up in Northern Ireland for ever.
  My hon. Friend the Member for Westhoughton (Mr. Stott) and I were agreeing last night that the most miserable thing that we have ever had to do in our public lives was to go to the mothers of young soldiers—just as the hon. Member for Londonderry has done, and I do not doubt his courage or the courage of others in Northern Ireland—to explain for what great cause a 19-year-old or a 20-year-old in the British Army gave up his life. It is a very miserable experience. I hope that my colleagues will never have to do that. My hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown) knows about it well.
  That is partly why I wanted a separate debate on the discipline Acts. Have the Government reflected on the fact that discipline should be different, in the fraught conditions in Northern Ireland, from other Service conditions? A sergeant-major in my constituency who served in Malaya in 1948 told me that conditions are much worse for his son, who is a sergeant in Northern Ireland, than they were for him in Malaya. We cannot underestimate the tension and problems of those men on their fifth, sixth or seventh tour of duty in Northern Ireland.
  While many hon. Members will support these young soldiers and will refrain from criticising the actions of the British Army, some hon. Members wonder whether a British force in uniform can ever do anything about the problems of this Province. For 12 years many of our best parliamentary colleagues, including the hon. Member for Devon, West (Mr. Mills) and my right hon. Friend the Member for Mansfield (Mr. Concannon), and many many others have given part of their lives sweating blood to try to do something about the problem. If they have failed, I do not think that any other hon. Member has a chance of succeeding.
  Mention was made of Crusader. If it is to be such a big operation, together with Spearpoint, those hon. Members who have bothered to take an interest in
  838
  these debates should have an opportunity to look at what will be an important exercise.
  Mr. Hayhoe: Arrangements are being made for a substantial number of hon. Members who wish to observe to do so. That is highly desirable, but equally there must be some limit. I am sure that the arrangements will be willingly accepted by the majority of hon. Members.
  Mr. Dalyell: I am grateful to the Minister.
  I should like to pay tribute to those who have served in Belize. Recently, I attended a conference in Mexico City and I had the good fortune to be able to make a detour via Belize; they should not be forgotten.
  I was asked yesterday by a senior and respected parliamentary colleague whether I intended, as he put it, to be on parade again for the Army debate, having already participated in the debate on the Navy and the Royal Air Force. My response was that I would be on parade; whether I would be called was another matter.
  But I really do not apologise for this, because it is not just feasible to go ahead with everything simultaneously. We have to make choices, and it is proper that we should debate, in the context of the Army Estimates, as well as the RAF and the Navy, matters such as the Polaris replacement. There must be a coherent view on weaponry, and this covers all three Services.
  I state here a view that, frankly, is not acceptable to many members of the Left of my party with whom, equally, I agree on certain other issues these days. I am a believer that we must have an up-to-date British Army of the Rhine. This could be a major contribution to the West that is both meaningful and defensive. I believe that tanks help effective crisis management and are a more valuable British subscription to deterrence and defence of the northern flank area than Trident missiles could ever be.
  As a National Service man who trained on Cromwells, worked on Centurions and knows the Chieftain, I unqualifiedly accept the need to go ahead with Challenger. I imagine that when the

  839
  Minister referred to comprehensive re-equipment, that was what he was getting at. I also think that, if we are to have British Service men in tanks, those tanks must be the best that are available.
  I therefore put a question about cooperation with the German Leopard, the main battle tank 70, the Gepard anti-aircraft vehicle and the Roland anti-aircraft missile. I raised with the Minister the whole question of standardisation, or at least inter-operability. I asked what the European defence procurement secretariat was doing about this. I noted with some concern that he said that the tanks were undermanned in BAOR, because I agree with him that the best form of antitank weaponry is the tank itself.
  I have here the formidable German defence White Paper for 1979. To the relief of my colleagues, I say at once that I shall not read a long passage from it. Through the good offices of my hon. Friend the Member for Farnworth (Mr. Roper), who is sitting on the Opposition Front Bench, some of us went to Bonn to discuss these matters with the SPD. I refer the House to paragraph 209 on page 166 of the German defence White Paper for 1979. It states:
  "A tank combines long-range fire power with mobility and protection. Commencing in 1979, the Army"
  —that is the Bundeswehr
  "will field 1800 Leopard 2 battle tanks, a follow-on of the model Leopard 1 version. This new tank develops a high cross-country speed, has a new type of armoured protection and mounts a gun having a longer range than any other comparable weapon. To bridge the period until conversion is completed, a part of the M48 inventory to be replaced by the Leopard 2 will be equipped with the 105 mm gun which is also carried by the Leopard 1 MBT.
  And so it goes on.
  The general point, I hope, is taken that it is about time that we had more standardisation of weapons. Indeed, this kind of thing is a positive subscription to defence.
  With regard to artillery, I repeat the question that I asked earlier in the Navy debate about the artillery fire power being little more than that of Operation Goodwood in 1944. Probably there is a need for self-propelled howitzers.
  We come back to the key question: if we are to spend all this money on Trident, are we sure that the updating of
  840
  Rhine Army will not go by default? So, here I am a Member of Parliament who is for Tornado, for Challenger, for artillery and, frankly, for talking to the Russians: and who is against cruise and—not from any party reasons but from conviction—profoundly sceptical about Trident.
  It is not a question of being ungrateful to the United States. Indeed, if we are to talk in terms of gratitude, something has to be said about the 20 million Russians who died in the Second World War. There has to be something of a balance here.
  It was my impression, when in Bonn, that there were different opinions in the SPD. Frau Maria Schlei, my equivalent in the sense of being chairman of the foreign relations committee of the SPD, said quite bluntly "I am a Silesian. I represent Berlin. But, at the same time, I believe that we must look at things also from the shoes of the Russians."
  To have updated armour and a really powerful capability is something that is understood and is unlikely to lead to involvement in the kind of dreadful mistake that can only too easily happen with missiles. This is not quite a question of having one's cake and eating it, or of de-coupling from the United States.
  Here I come to the argument of the hon. and learned Member for Colchester (Mr. Buck). I make no complaint about his not being in his place. He is, as I understand, the chairman of the Conservative defence committee and a former Minister, and must be taken seriously. He said that he saw a British independent deterrent as a virtue—"as another source of deterrence". In my view, this is another source of uncertainty and is very dangerous. We want some degree of certainty brought into the whole matter of Western response. I leave it at that, because there are other hon. Members who want to speak on that issue.
  I turn now to the question of chemical weapons. We heard from the spokesman of the Liberal Party, and I think that some of us found it hard to differentiate between what is an offensive and what is a defensive weapon. But, having said this, it should be recognised that many of us think that chemical weapons—which, Heaven knows, would only be used posthumously for most of us, as a

  841
  bee-sting response—are both unnecessary and deeply offensive.
  Surely we have to look at all this expenditure in the context of the Brandt committee report. In 1978, the sum spent by all countries of the world on armaments totalled more than $400,000 million. Everywhere in the world, expenditure on armaments is impeding social progress, and that in turn is impeding the diminution of the social gradient from North to South. There are many of us who think that if the East-West problem is dangerous—I shall not rehearse my views on Afghanistan, which I have already done ad nauseam—the North-South problem is even more dangerous.
  It is not a matter of leaving Britain defenceless. I shall not be a party to leaving Britain defenceless, but we have to look at this expenditure in terms of the Third world. The German defence White Paper of 1979 makes many references to Third world policy, particularly in paragraphs 113 to 118. Despite the continuing differences in the conceptions of life and values, the industrial nations of the West and East must work together to bridge the gap between the poor and the prosperous nations so as to overcome hunger and privation in the world.
  Yesterday I went to an extremely impressive hour-long discussion led by the right hon. Member for Sidcup (Mr. Heath). This was a spine-chilling occasion, because he simply said, as a member of the Brandt committee, that there would be 2 billion people added to the population of the world in 20 years, that is to say, by the end of the century. By the year 2000 there would be 40 cities of over 20 million people and two, Bombay and Mexico City, of over 30 million. The right hon. Member for Sidcup went on to give his opinion of how that would lead to the most tremendous urban and racial tensions.
  In those circumstances, we have come to compare military expenditure on East-West problems basically against the vastly dangerous North-South situation of what will happen over the next two decades. Some of us do not apologise for being obsessed by Brandt issues, but when one hears these powerful contributions, not only from my hon. Friends but from the right hon. Member for Sidcup, the Shell Oil Company and many others, about
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  what is to happen, we must look at the whole question of massive expenditure on armaments.
  I am not saying that there is no role for the Army in this matter. One of the tragedies of Northern Ireland is that it nipped in the bud, because of Army shortages, the concept of "Op Macc"—the operation of military aid to the civil community, which was developed by Sir Derek Lang. I hope that perhaps the Army will once again look at any part that can be played by British Armed Forces, preferably, by my book, under United Nations auspices, in the kind of ghastly situation that we are getting in East Africa and have had in Cambodia. Some of us think this was the problem of the Russians going into Afghanistan, but I shall not argue that point.
  In many areas of the world there is massive civil breakdown leading to genocide. It may be that someone's troops, possibly not under a national flag, will have to sort this out. Therefore, I welcome and applaud the kind of job that the British Army did in Zimbabwe. I think this kind of training is important. It involves extremely high quality people. In all the contacts that I have had with the Forces, I found that I was dealing with persons of high calibre and quality.
  Mr. Roper: Does my hon. Friend agree that there has already been a lot of evidence of this? I was recently in the South Pacific and was fascinated to see the work that had been done by the Royal Engineers in improving the water supply in Tuvalu. This is being done to a significant extent.
  Mr. Dalyell: Yes, that is important. I take the point from my hon. Friend who knows such a lot about these matters. I hoped that he was not going to press me on the question whether the Marines going to the New Hebrides was a wonderful idea.
  I end on a note of criticism. I am not very happy about this exhibition at Aldershot. I can understand a number of countries to which we might wish to export arms. The list was produced in the House of Lords, I understand, in answer to Lord Brockway on 29 April. When I look at some of the firms and countries involved—Argentina, Chile—I am not at all happy. I am not happy about Guyana after the murder of Mr. Rodney.

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  My right hon. and learned Friend the Member for Dulwich (Mr. Silkin) and many other responsible people have come back from Guyana and said that there is a powder keg there. Should we be exporting military equipment to Honduras or to Uganda? No. The Ministry of Defence must understand that on the export of arms there are genuine worries among balanced, sensible people.
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  There are others who wish to speak. I have had a sufficient hearing.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. I remind the House that eight hon. Members have been here all day and are still waiting to speak in about an hour and a half. Any speeches of more than 10 minutes will deprive one or more hon. Gentlemen of the opportunity to speak in the debate.
  8.4 pm
  Mr. Julian Critchley: I visited the Aldershot exhibition on Tuesday, being the Member for that constituency. One certainly admires the efficiency and effectiveness with which the exhibition is organised. I do not wish to embark on the morality of arms sales in a wicked world, save to say that it is a regrettable necessity, in that it reduces the unit costs of our own arms production to our own Armed Services, that sales should in the last analysis be under the control of the Foreign Office, not the Ministry of Defence, and that it is a trade that should be carried out with scruple on our part.
  I think that over the next eight or nine years we shall witness the impact of the world recession on the legitimate and perhaps praiseworthy ambitions of the Government to spend more money on defence. The impact of the world recession will mean that we shall have to make choices. Those choices will be uncomfortable, for something will have to give. I fear that were we to go for a Polaris replacement as opposed to holding on to Polaris or a cruise missile alternative, the British Army of the Rhine might be starved of men and equipment.
  What I want to consider briefly, because I was fortunate to be called in the Navy debate and I want to get this speech over in five or six minutes, is what are the circumstances in which war might conceivably break out in Europe.
  I do not think that the Soviet Union is preparing for war. I do not think that it is the Soviet policy to start a war at a given time. However, there is a finite possibility that war in Europe will arise through accident and miscalculation.
  The Soviet strategy is to pre-empt; that is, to wait for what they consider to be for pre-emption would be a NATO Alliance and then beat us to the punch. What would be the signal for pre-emption on the Soviet part? I fear that one signal for pre-emption would be a NATO decision to mobilise.
  Were that to happen, were the Soviets to decide to pre-empt on a NATO decision to mobilise, a Soviet attack would probably take one of two forms. It could be launched with theatre nuclear weapons, chemical and conventional weapons together, using them first; or it could be a solely conventional attack.
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  The effect of the first alternative—using the whole range of weapons available to the Warsaw Pact—would be to remove NATO's inhibitions about nuclear first use. Yet, we would be obliged to consider the first use of nuclear weapons in the full knowledge of the inevitability of escalation—escalation in the context of Soviet theatre nuclear superiority as well as Soviet superiority in strategic weapons.
  The effect of the other alternative—a Soviet attack with only conventional forces—would be equally embarrassing. It would immediately place upon the NATO Council the responsibility for the first use of nuclear weapons in the event of our being defeated in a conventionally fought war.
  One has only to imagine the horror of a situation in which the NATO Council meets on the verge of defeat to try to get agreement between 13 partners as whether to introduce battlefield nuclear weapons into a deteriorating situation. Clearly the German view in such circumstances will be of immense importance because, were we to use theatre nuclear weapons first, those weapons would land upon Germans in either East or West Germany.
  There would also be the effect on the decision-makers of declining civilian morale—the threat of Armageddon. We do not properly think through what the results might be. I assert, for the purposes of debate, that in these awful circumstances the decision to use nuclear weapons first on our part will invariably and inevitably be postponed. Therefore, NATO would have to fight and win a war with conventional weapons only—a war that would be short, sharp and shocking. It would be a war fought by our forces-in-being, NATO being unlikely to be able to reinforce adequately and in time, and it would be a war that we would be likely to lose. We would need something more than a second "Miracle of the Marne" to come back with our forces-in-being against the weight of an overwhelming conventional Soviet attack. The priority of NATO and of the United Kingdom should be to strengthen our conventional forces. The next war—if it is to come—will be short.
  Nuclear weapons might not be used and might prove unnecessary. Conventional weapons will be necessary in any future conflict. NATO needs an adequate nuclear capacity. However, we must also

  847
  be able to demonstrate a more than adequate conventional capability, if we are to avoid a disastrous war that may arise through accident or miscalculation.
  8.10 pm
  Mr. Robert Banks: I am grateful for this opportunity to join with those who have expressed appreciation of the Army's good conduct. I am privileged to represent a constituency that has an Army establishment, a Royal Air Force establishment and, on the very boundary, a somewhat small naval establishment that deals with communications.
  I should like to speak on two subjects that are of profound consequence, in my view, for the Army rather more than for the other Services, namely, chemical warfare and the control and security of civilian populations, with particular reference to the Central Front region. For a long time, people have tended to believe that aggressive action—if that, unhappily were to occur—would put pressure on the Northern or Southern fronts because of their apparent weakness. The tendency in our debates has, therefore, been to worry less about the Central Front. Here I must depart from my hon. Friend the Minister, because the heaviest concentrations of our military forces in NATO are stationed in Western Germany in defence of any attack from the very large might of the Warsaw Pact armour in Eastern Germany. While the superiority of Warsaw Pact forces has been and remains a source of concern, the possibility of aggression has been rated less there than in less protected areas on the flanks.
  In any event, difficulties between NATO and the Warsaw Pact on the flanks would result in immense tension on the Central Front. It is the consequences of the possible use of chemical warheads by Warsaw Pact that I want to discuss. I do not wish to deal only with the British Army of the Rhine. We must be concerned with the broad aspects of such warfare on all the NATO forces stationed in Germany. I attach overwhelming importance to the need for us to consider NATO armies, rather than the British Army in isolation. We are totally interdependent with the allied armies of NATO.
  It is of course difficult, if not impossible, to make an accurate assessment of the Warsaw Pact's chemical warfare
  848
  capability. We have to rely on reported information and Government statements here, in the United States and elsewhere. In 1969 an estimate in the newspapers stated that Soviet chemical weapon stocks comprised "one-fifth or one-sixth" of total ammunition stocks. That was deduced from aerial photographs of Russian storage sheds that were compared with similar sheds in the United States, used for storing chemical weapons. That has now been disregraded. Nevertheless, there is no doubt at all that the Soviet Union does possess a major capability for offensive chemical warfare.
  To quote the United Kingdom defence White Paper:
  "Soviet forces maintain large stocks of chemical munitions and are fully equipped and trained to operate in a chemical environment."
  There are large numbers—probably between 60,000 and 100,000—of chemical troops in the Soviet forces, who are responsible for technical advice, decontamination reconnaissance and the operation of all specialised equipment and vehicles. All combat and combat support forces receive chemical warfare training from these trained chemical corps specialists. Chemical warfare is organic to the Warsaw Pact force structure. The military posture statement for the fiscal year 1981 in the United States simply states:
  "The Soviets have developed a variety of modern agents, multiple delivery systems and the tactical doctrine for large-scale employment."
  As my hon. Friend the Secretary of State said in the House in February, what is alarming is the existence of a chemical capability by Warsaw Pact countries. He said that the Government at present were considering what their attitude ought to be. My hon. Friend the Member for Winchester (Mr. Browne) raised that point earlier.
  The United States and the Soviet Union have been engaged in bilateral talks since 1976, following their agreement to ban the development, production and stockpiling of bacteriological weapons and on their destruction. These talks have been in progress for four years. Some agreement has been reached on the concept of prohibiting the development, production, stockpiling or acquisition of supertoxic lethal chemicals. It was agreed that on accession to the convention, States would declare their stocks of chemical weapons and ammunition production plants, and

  849
  would announce plans for their destruction to be completed within 10 years.
  One of the problems, and undoubtedly the most important one, to be resolved is that of on-site inspection and verification measures. While bilateral negotiations resumed in Geneva in February, multilateral negotiations have been suggested by Canada, France and the Netherlands, and a working group this year will endeavour to define the topics to be included in a multilateral convention banning chemical weapons. I think it would be wise for the British Government to put our full weight behind a multilateral convention, or indeed a precursor conference of all interested nations to lay down markers and to put pressure on the two parties to reach an agreement to ban these deadly and inhuman weapons. Such a conference might prove decisive by voicing an opinion not only by European countries, but joined by other nations in a non-aligned free world. There is one step that Britain can take to resolve that problem quickly.
  The Soviet Union can make a positive step to make an agreement possible, and that is something that we shall continue to hope for. The question is how long this situation of imbalance with Soviet and Warsaw Pact chemical capabilities can remain unchecked. The fact is NATO relies totally on the stocks and delivery capability of the United States. In 1969, President Nixon halted production when he renounced the first use of chemical weapons. With a shelf life of about 10 to 15 years, it is not surprising that the report of the United States Under-Secretary of Defence for Research and Development for the fiscal year 1980 states:
  "Our retaliatory stockpile has deteriorated to less than prudent levels … There is a serious lack of modern air-deliverable munitions to provide full tactical support and about half of the current stockpile consists of mustard agent which is less effective than nerve agents."
  Mustard gas, incidentally, caused more than 1 million casualties during the First World War, and over 200,000 people were killed by it. The development of a lethal binary warhead has begun, but no decision has been taken about its production, and construction of the pilot plant is not included in the 1981 budget. Binary agents are two chemicals that are harmless in themselves, but when mixed in the warhead during delivery they produce a lethal gas.
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  During the Second World War both sides had at least an equal chemical capability. This is regarded by many—and I agree with them—as being the factor that stopped their use. In today's situation in the NATO Alliance, the United States has old and deteriorating stocks of chemicals. The means of their delivery, that is, with modern chemically charged warheads, and where those stocks are held, are matters for grave concern. We are awaiting an agreement between Russia and the United States. That has been dragging on for four years. In any event, it would be 10 to 15 years before any agreed ban could be regarded as effective, and relations between the two countries after Afghanistan can hardly be regarded as conducive to an amicable and trustworthy agreement.
  The Soviets possess a considerable threat, the use of which could paralyse the Central front forces and lay a path to the industrial heartlands and the Channel ports for protected and trained Russian forces to occupy. Therefore, we have to come to terms with the situation. In my view, we should continue to press for an agreement in the way I have described, and, secondly, we must now take steps to ensure that some members of NATO begin the process to develop and produce binary weapons and warheads which can be delivered by our latest missile launchers. I say this with reluctance, but only by raising our retaliatory capability can we hope to achieve either a banning agreement or the non-use of these ghastly weapons because each side knows the other's strength.
  I should like to turn now to the question of the troops' protection and decontamination on the Central front. The British Army is considered to be the best equipped for protection, but our philosophy differs from that of all our NATO partners in that our troops will fight "dirty", as the expression goes; that is to say, we do not decontaminate our personnel or vehicles. I shall return to this point later.
  I come back to what I said at the opening of my speech, that we must think in terms of NATO army forces as a whole. If, for example, one sector is weak in protection against chemical attack, all sectors are very seriously affected because this presents a breakthrough

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  point. Looking at the forces as a whole, it is true to say that protective clothing is not issued to all personnel in all forces in the front line. These troops should have, and many do have, modern respirators with interchangeable spare filter canisters. But not all. The United States' respirator on issue does not have a screw thread canister filter. It is grossly out of date and it takes a minimum of 20 minutes for a man to change the internal filter pads. The respirator must be taken off to do it. That respirator will be replaced, but not until 1985. A stock of protective suits manufactured in the United States is held in addition to British suits which were purchased some time ago. But in my opinion, and that of others who have seen them, the American suits are not as good as the British version.
  Britain has developed the Naiad chemical attack warning device, but I suspect that there is a reluctance to get acceptance and orders from our partners for this excellent and vital piece of equipment. Troops are still being trained to detect chemical contamination with pieces of coloured paper and sets of chemical solutions, which is a lengthy and complicated operation and totally out of date.
  NBC protection for vehicles is incredibly limited and in the Netherlands forces, for instance, only the Leopard tank and the Gepard anti-aircraft tank have some built-in NBC protection. A long and worrying list of deficiencies can be drawn up, and I will not weary the House with too much detail. Suffice it to say that, if our Army forces and those of NATO are to survive effectively and hold the territory of Europe in any aggression, action must be taken now and urgently to introduce effective personnel protective and detection equipment and to up-date armoured vehicles for NBC protection. Procedures, research and training should be devised immediately within NATO and all in all an even greater emphasis should be placed on defence from chemical attacks. The picture is at present an alarming and gloomy one.
  I return to the point about the British view on fighting "dirty". There comes a point when one must clean up. Repairs
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  to equipment and vehicles will be necessary and the effects of chemical attacks immobilising vital armoured equipment is a reason, in my view, for providing decontamination procedures and effective ways of doing it, so that vehicle repairs and servicing may be carried out. Existing civilian installations, such as car washes, should be brought into a pre-planned decontamination strategy.
  Finally, I wish to refer to a subject that was raised by my hon. Friend the Member for Nantwich (Sir N. Bonsor) and which I think is of immense importance, namely, civil defence. We are concerned about the situation in the United Kingdom, and the Government's review will no doubt be announced shortly. The movement and protection of the civilian populations in Europe from conventional chemical and nuclear attacks is of vital significance in order to control and defend the central front region. That is part of our defence, so I think it is right for me to comment on the position in Europe in the context of Army movements. In a period of tension I think there is little difficulty in picturing the effects of the cross-traffic of troops and armour endeavouring to move to frontline positions against the movement of millions—but millions—of civilians in their cars and on foot, frantically going in the opposite direction. The whole of our reinforcement plans and NATO's defence strategy in Central Europe could and would—as things stand—be completely undermined by the mass movement of civilians searching for shelter, or seeking to get as far away as possible from areas of likely attacks. For decades this subject has been ignored and I believe that NATO must wake up to the consequences on civilians in a period of tension when attacks might be thought to be expected.
  Therefore, civil defence must not only deal with people's protection, but it must cover a whole range of possible situations from crisis management to a total nuclear exchange. People have got to be prepared and to know what to do, and that is something that has been totally neglected by Governments of many European countries. NATO staff stress that even in a total and devastating nuclear exchange, more than half of the industrialised countries could be expected to survive the initial exchange. But they will be in urgent

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  and immediate need of civil defence measures to prolong survival, despite the effects of fall-out.
  The proportion of population for which some shelter protection is available ranges from 70 per cent. in Norway, 60 per cent. in Denmark and probably a little less than 50 per cent. in Holland, to less than 10 per cent. in most other countries. In Britain it is entirely reliant on make-shift arrangements in people's own homes. We anxiously await the Government's review of this subject. Civil defence preparations in Europe are variable, unco-ordinated and terrifyingly inadequate. There is no NATO communications system for fallout data and movement patterns and prediction. Across-border information is transmitted only on a bilateral basis. Even so, communications are grossly vulnerable, both from electro-magnetic pulse effects resulting from a nuclear burst, or land or overhead lines which even a conventional attack could rupture.
  The provision of nuclear shelters is seen, however, in France as the necessary counterpart of its policy of nuclear deterrence. A shelter-building programme was carried out in seven départements in 1979. This project, which also includes surveying existing premises and providing information for the public, will cover a quarter of France within the next four years. France has no policy to provide protection against chemical warfare.
  I do not intend to take up more time than I should to support my case. Simply the situation has been caused by years of neglect and cuts in civil defence programmes, except in a few cases which are well-known. Something must be done. The challenge to us, but more especially to NATO, is to act to make up the shortfalls in our defence, and in doing so I believe we can protect the peace.
  8.28 pm
  Mr. Bruce George: I am fortunate to have been called in all three of these Service debates—although, bearing in mind that there is not this evening intense competition on the Opposition Benches, perhaps it is not so fortunate as inevitable.
  If there is any theme or essential unity in the three speeches that I have made on the issue of defence, it is that conventional forces are so vital
  854
  that one cannot tolerate the idea of seeing already unsatisfactory conventional forces made even less satisfactory as a consequence of carrying on from Polaris to Trident, and that the opportunity costs for the Army, the Royal Air Force and the Royal Navy are very severe.
  What the Government are possibly doing on a diminishing budget is reversing the trend of military history in this country over a period of 20 years. We were severely over-extended in the 1950s and 1960s, and as a result of reappraising our role, we concentrated on those roles within NATO that we were able to perform adequately—to maintain the defence of the United Kingdom, to guard the Eastern Atlantic and the Channel, and to have a presence in West Germany in the form of BAOR and the RAF in Germany. This was our role within NATO.
  The Government use the words "wider defence interests." I believe that they are thinking about reversing our role, which even 10 years ago there was still a desire to spread overseas. Thankfully, the alternative process of containment and looking much more inwardly was, I believe, the right one to be adopted. The policy about which the Government may be thinking and talking—although, I suspect, not thinking about it too deeply—is one that I would regard as a positive disaster.
  Many people still hanker after the days of our great Imperial past. The events of the last few months in Afghanistan have given those people in this country and in the United States who hanker after a much wider role in the world a great deal of fortification. The idea of having Britain once again policing the world is absolute nonsense, be it done on a permanent basis or in some form of panda car rushing out if there is a crisis here of there. To do this with resources which are already over-stretched is a gross folly.
  If the Government are able to provide a successor to Polaris to re-establish some involvement in the rest of the world and to improve our conventional capability, they will have done something that most serious observers consider to be an impossibility.
  What needs to be done for the Army is enormous. Anyone who has been to military units in Germany or who takes even a minimal interest in defence matters realises that the BAOR may have among

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  the best soldiers in the world, but I do not think that very many people would argue that it would be fighting with the best equipment in the world. It is rather ironic, I suppose, that, whenever the Labour Party is in office, these deficiencies are exposed. I have with me an article written in 1977 in the Sunday Telegraph. It talks about
  "Our paper tigers on the Rhine."
  We tend not to hear so much about these inadequacies when the Conservative Party is in office. I am certain that the situation then was nowhere as desperate as some politically vindictive observer outside this place sought to show.
  However, I think that even the greatest supporters of BAOR are obliged to admit that the resources with which our men would be fighting are inadequate. At present our firepower as measured by the density of major weapon systems is about the lowest of all our NATO allies in Western Germany. Statistics computed from the IISS study "The military balance" reveal this very clearly. A few years ago Britain had only half of the firepower of an American force. The situation is even more gloomy when one breaks down the allocation of the figures to each of the major weapon systems.
  Whilst we may be outfired by the Soviet Union, the United States would not appear to be so. However, the United States is not facing the most likely invasion route for a Soviet army. It is the British Army that is the most likely army to be facing such an invasion. There, we would appear to be locally outclassed by a factor of 2:1. Our ability to shift resources to key points is further impaired by our very limited airlift capacity, and this exacerbates an already very serious situation.
  Many nations are able to redress their lack of battlefield mobility and ground-based firepower by employing airborne firepower in ground-attack aircraft. This, too, as the evidence shows, is seriously deficient as far as the United Kingdom is concerned. Therefore, unless we are prepared to put a great deal more money and resources into BAOR and RAF Germany, I believe that if there were to be an invasion by the Soviet Union, although we could talk very gloriously about what our forces would do, I believe that with their present equipment
  856
  they would be unable to discharge their responsibilities as competently as they and certainly we should desire. That demonstrates the task that is faced by the Government. I wonder whether adequate resources will be available for the forces, if they are diverted to a costly Trident programme.
  I should like to speak briefly about the Territorial Army. The hon. Member for Aldershot (Mr. Critchley), whether deliberately or not, undermined the concept of the Territorial Army by saying that if there were a conflict it would be over before the Territorial Army got near the combat zone. It is important to ensure that our reservist or territorial troops can be swiftly mobilised. As a member of the Select Committee, I hope to be one of those who observe Operation Crusader, if only to prove to us and the Soviet Union that our troops can be swiftly mobilised and that our Territorial Army is well trained, well equipped, can be swiftly mobilised and has a competence at least equal to that of full-time soldiers, and more than equal to that of potential adversaries.
  It is good that many hon. Members are now speaking about the Territorial Army. I understand from history books that in 1900, 120 Members of Parliament belonged to the volunteer forces. This meant that no Government of the day dared to seek to improve the volunteer force as there was an enormous lobby here to prevent a major reform from taking place.
  Our troops must be well armed, well trained and swiftly mobilised. They must be supplied with the proper amount of ammunition at the right time. The first investigation of the Select Committee was into the ammunition storage sites for the British Forces in Germany. Anyone reading the report would not get a great deal out of it. There are so many asterisks that it looks like the transcript of a President Nixon tape. Obviously, the Minister will be looking, not at this report, but at the copy without the asterisks. The Committee was reluctantly obliged to include many asterisks, although it felt that in some cases they were superfluous, or should not have been included.
  Ammunition may not be as glamorous or impressive a subject as numbers of tanks, funnels or planes, but unless our troops are properly supplied with ammunition for the duration of a conflict,

  857
  however long or short, there will be great danger. I am not talking about anything other than what was officially published. The report points out that unless we and our allies have a proper supply of ammunition, a possible danger could come about when ammunition ran low, and the only alternative, therefore, would be to move up the scale of response. Therefore, if there are not enough shells, conventional weaponry and ammunition, the danger emerges of the conflict being escalated.
  The report diligently investigated the problems of the distribution of stocks and outloading. The hon. Member for Harrogate (Mr. Banks) referred to the problem of refugees getting in the way of reinforcements. The distribution of ammunition would be affected by the same major problem. I wonder whether that aspect has been fully considered.
  The Committee considered that the question of security should be dealt with swiftly. I shall not go into any great detail. Paragraph 26 of the first report from the Defence Committee says:
  "Thirdly, with many of the more primitive and open stores little or no use can be made of intruder alarms and other modern devices."
  We saw insufficient examples of modern technology that could be used to protect important sites. I hope that many of the Defence Committee's recommendations will be acted upon swiftly. Unless our troops are properly supplied, the situation will be desperate.
  On a visit to Germany a year ago, a number of hon. Members and I received briefings, officially and unofficially, on what needed to be done to improve the lot of the soldier in the British Army of the Rhine. Many of these improvements could be introduced at little cost but with major returns. Some improvements, in the nine or 10 months since my last visit, have been considered and some implemented. We were told of the need to improve removal and storage arrangements for troops posted abroad and the need to improve voting arrangements for soldiers serving abroad.
  A major problem that we came across was the desire to transfer entitlement of troops to leave warrants to their wives and children as permitted in the United Kingdom. Soldiers told us vociferously that they are fully paid-up members of the Welfare State, paying the same rates
  858
  of income tax as people in the United Kingdom but not entitled to the same range of benefits. This matter has been raised in the House previously.
  The major issue overshadowing all others was the problem of home ownership. Further, a number of single men told us that the improvements which had been made seemed to affect their married colleagues much less than themselves. Great concern was expressed not only about employment conditions but about working conditions. Many work in conditions that would not be tolerated in the United Kingdom where there are trade unions to protect the work force.
  Many thought that the process of speeding up barrack modernisation was not going as swiftly as desired. Many things need to be done, not necessarily in the form of putting more tanks in the field. Our troops will be stationed in Germany for a considerable number of years and must be allowed working and living conditions that would be regarded as satisfactory in the United Kingdom. They must be properly paid, properly housed and have the working conditions that we in this country would regard as essential.
  I am pleased that our debates over the last week or so have not been characterised by the hysteria that one hears in other countries. I hope that we are responding to a crisis situation much more maturely and not reaching for the gun as swiftly as is threatened, perhaps, in the United States. It strikes me as amazing that the crisis should have developed so swiftly. The Soviet spending pattern has been one of a steady increase over 20 years. To the best of my knowledge, there has been no sudden increase. In many ways, the crisis, although exacerbated by Afghanistan, is one of our own making because we were too blind to see what was obvious to many people. What can now be seen as a panic response could endanger an already serious situation.
  Although it is obvious that we need to be properly armed and protected, I am pleased that some hon. Members have mentioned détente and disarmament. Disarmament will not take place in a vacuum. I do not believe that one should disarm unilaterally. It has been said that, if we did, the lamb may lie down with the lion but, clearly, the lamb will have many sleepless nights. I do not believe that

  859
  we should disarm without proper security arrangements.
  It is essential, for the United States, Europe and the Soviet Union, that détente is back on the political agenda, that SALT II is ratified and that we move on to SALT III. That will mean that we can achieve chemical warfare disarmament and an end to an arms race that is not only crippling us but also, clearly, crippling the Soviet Union and depriving its citizens of the quality of life they deserve.
  If ever a group of people has worked hard for an improvement in living standards, it is the citizens of the Soviet Union. They deserve a much better life than has occurred hitherto largely because of the enormous burden of defence expenditure placed on them. Some of that burden is our responsibility and some, obviously, the responsibility of their own Government.
  On the last occasion when the Minister spoke in the debate on the White Paper, he referred to the disarmament initiatives last November. I hope that we can start a period of negotiation from a position that recognises that although the world got close to the brink, there is a realisation on both sides of the Iron Curtain that, unless a halt is called to enormous defence expenditure, the future of this country and the world will be much more at risk. I hope that we can get back to the negotiating table. Greater security in the short term and in the future will be achieved only as a result of negotiated disarmament.
  8.45 pm
  Dr. Alan Glyn: I agreed with many of the arguments advanced by the hon. Member for Walsall, South (Mr. George). I am glad that he came out firmly against unilateral disarmament. I was pleased at what he said about the Territorial Army and about supplies in Europe. I differ from him in that I believe that we must not only defend NATO but have the ultimate deterrent.
  In the limited time available I shall divide my speech into three parts. First, I shall deal with my constituency. I have the honour to represent a constituency which includes a garrison town. Secondly, I shall discuss morale in the Army, with particular reference to the Territorial
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  Army, the reserve forces and civil defence. Thirdly, I shall refer to the long-term strategy.
  My constituency has a slight problem, which can be overcome. Wellington barracks are being rebuilt and the Victoria barracks for the Footguards in my constituency are in limbo awaiting rebuilding. We understand the reasons. The authorities have coped well by using Uxbridge, but that is not satisfactory. The town likes to have a battalion of Footguards stationed in the area both for traditional and practical reasons. There is a close liaison between the Royal borough, the castle, the Army and the Member of Parliament. I hope that it will not be long before we once again have the privilege and honour of having a battalion stationed in the area.
  Morale in the Army has never been higher. The reason is that the Government have done a great deal to help the troops, particularly the non-commissioned and junior officers. We have lost many in the most valuable section of the Army—the middle grade of non-commissioned officers. It will take a long time to replace them, because they require training and the opportunity to gain experience. I have confidence that the Government will ensure that they are replaced.
  The housing of men when they are serving is of vital importance. The separation of families from their homes when serving abroad gives rise to obvious complications and domestic difficulties. We must make the local authorities responsible for housing Service men who have finished their service. Service families must be at the head of housing lists. We must do everything possible to make housing available when men leave the Service, but we must be careful not to release too much housing too quickly. We must strike a careful balance to ensure that Service men's interests are protected both while they are serving and when they leave the Service.
  I turn to the Territorial Army, about which much has been said. It renders a great service. It is time that we realised that its role is vitally important not only for reinforcement in Europe but for home defence. I am glad to see that we are going for good equipment and training abroad. I agree with my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) that we should,

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  perhaps, compile a register of people with skills and special qualifications who could be used in time of war. The Germans and almost all of our European Allies still depend upon national service.
  It is up to the House and the country to consider whether it is necessary to establish some form of service to the Army, the community, the Territorial Army or whatever organisation requires it. It would not work for the Royal Air Force and the Royal Navy, as the training for these Services would be too complicated. People in such a Service could feel that they were part and parcel of our national defences.
  It is vital that we have an adequate civil defence and it is essential—I have said this before—that civil defence should be under one military command. We cannot afford to have two sections of a complementary Service commanded by different people. We need a unified command for a civil defence that is adequate and backed up by the Territorial Army and by those who may well be unable, or too committed, to serve in Europe.
  We are in danger of falling foul of three things. They are atomic fall-out, bacteriological warfare and chemical attack. Those dangers are alarming. I differ from many hon. Members on this, but I believe that the best deterrent against the use of such weapons is that our enemies should know that we also are in possession of them.
  I was interested in what my hon. Friend had to say about the role of women in the forces. Women could fulfil the role of assisting in the organisation of the military defences of this country.
  The lesson of Afghanistan is that the only way to defeat tanks is with tanks. It is no use our relying on Soviet promises of détente. We know that divided Germany is extremely worried. West Germany has national service, but there are 5,000 nuclear warheads not far from its frontier.
  My hon. Friend made the crucial point that we are short of tank crews. We know that we are heavily outnumbered in tanks by the Warsaw pact. I am sure that the proper defence against tanks is tanks and anti-tank weapons. I am also certain that we must convince our enemy that we are determined to fulfil our obligations to NATO and that we possess the ultimate deterrent.
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  People should realise that there is a danger, but we should not panic. We should take it quietly, but our people should realise that we have the capacity to defend this island. We should let all our people know that every one of them has a role to play in the defence of our nation.
  I make no bones about the fact that I prefer that the control of Polaris should be in our hands. My hon. Friend the Under-Secretary of State for Defence for the Royal Navy gave me an assurance in that regard the other day. If there should be a difference of opinion between the Allies, at least we know that we have control over our own destiny. Unless we have complete and utter security it is no good spending money on social services or anything else. We must first establish the security of our nation against aggression. Then it is up to us to go forward and assure our people that without adequate defences there is nothing left for us.
  I hope that that message to our people will be a sincere one. It is vital that people should realise the dangers but that they should not panic. For Heaven's sake let us make sure that our defences are adequate against all eventualities.
  8.55 pm
  Mr. Keith Best: We have heard some thoughtful speeches about the balance between nuclear and conventional weapons. I content myself by merely suggesting that nuclear weapons are perhaps there as a deterrent and are never likely to be used, whereas conventional weapons are there definitely to be used when the deterrent fails.
  I do not wish to embark on a discussion of that argument tonight, because I wish to concentrate my remarks principally on the use of conventional weapons, and particularly on one aspect of that. It is also incumbent upon us, particularly at this time, to talk in terms of cost-effectiveness. I know that that is a matter which will commend itself to the Minister. I think that he knows what I intend to talk about. It is the question of the most cost-effective way of providing conventional forces, which is through the reserve forces.
  I do not subscribe to the concept of a total army provided from reserve forces, such as occurs in Switzerland. However, I believe that in time of tension such as we

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  undoubtedly live in now there is a tremendous scope for an extension of conventional forces through the medium of reserves. My hon. Friend, in reply to a parliamentary question that I asked in November, told me that the total cost of the Territorial Army was 1·1 per cent. of the total defence budget. That is remarkable, when one considers that the TA would provide some 30 per cent. of all our mobilised army in war.
  I wish to concentrate my remarks upon the need to stimulate interest in, and recruitment to, the Territorial Army. I must declare an interest as a serving member of the TA. I shall certainly be out there on "Exercise Crusader", not as a Member of this House but in a military capacity. I acknowledge that measures which the Government have already taken, such as the increase in the bounty, the emphasis upon more overseas training and other measures, will assist in what I advocate tonight. But in the words of page 57 of the White Paper, we must also ask ourselves whether we can be assured that our reserve forces are
  "fully effective and swiftly available."
  "Exercise Crusader" will certainly test that. I reiterate what I said in an earlier intervention, that I hope that there will be an opportunity to debate the outcome of "Exercise Crusader" on the Floor of the House.
  I wish to draw attention to four areas of concern which were identified in the Shapland committee report and to suggest four answers. The first problem identified was one of recruitment. In 1977, the TA was recruited up to only 82 per cent. I was glad to hear my hon. Friend say that it is now recruited up to 86 per cent. It therefore seems that that situation is ameliorating.
  The second problem is one of annual turnover, which currently stands at a rate of about 18½ per cent. among officers and 30 per cent.—a staggering figure—among soldiers in one year. That is something which must be looked at very carefully indeed.
  The third problem is lack of training. According to the Shapland report, in 1977 only 26,600 members of the TA did sufficient training to earn their bounty
  864
  for that year. That was out of a total membership of 54,000. Therefore, it can be said with some veracity that the TA is perhaps working at only 50 per cent. efficiency.
  The fourth matter which was identified and to which one must address one's mind was that of wastage. On 23 March 1978, about three-fifths of the members of the TA had served in it for three years or less. That problem is largely exacerbated by a certain amount of unimaginative training, which I think is being dealt with by the Government.
  I should like to suggest four areas on which we must concentrate. The first is that the TA should be made more attractive to people by affording them the opportunity of learning civilian trades which have a military bias, and there should also be an emphasis upon a correlation between what people can learn in the TA and civilian qualifications. That is important because people would feel that they can become members of the Territorial Army and learn a civilian trade at the same time. It could be a useful adjunct to the general training facilities in Britain.
  Secondly, there is a need to circularise and inform employers about the Territorial Army, and to ask them to encourage their employees to join. I welcome the statement made by my right hon. Friend the Prime Minister a short time ago. I hope that as a result of that statement I shall find it easier to get the Whips to agree to my getting away from the House—bearing in mind her exhortation to employers to allow employees leave for military duties. Much more needs to be done in that sphere.
  Page 5 of the Shapland committee's report painted a disastrous picture when it talked about the emphasis given by the previous Prime Minister on the Territorial Army. It states:
  "The Committee regrets that it must record that this statement has generally had little or no impact in the country nor on employers, too many of whom know nothing about the TAVR nor see any case for supporting their employees who are members of it."
  That is something which could principally be dealt with through the TA associations. I urge my hon. Friend not to burke the issue, but to familiarise the country, especially employers, with the facts about the Territorial Army.

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  Thirdly, there is the question of a central policy concerning the movement of members of the Territorial Army within Britain. Again, that is something that Shapland emphasised but about which the Government so far have done nothing. It is sad when a person who has been a member of the Territorial Army for some years and has reached a highly sophisticated level of training moves to another part of the country because of his job and, because of the inefficiency of the overall machine he is not fitted into another Territorial Army unit near his new place of work.
  Fourthly, there is a great need for closer liaison between the cadet forces and the Territorial Army to promote a smoother transition from one to the other. Much more could be done there.
  We live in a time when I do not consider that the days of conventional battle are over. We still need conventional warfare, and the manpower to fuel that. The Territorial Army is undoubtedly the most cost-effective way of providing that. There is a need for us to look to a wider world—in the words of the White Paper "a wider defence interest", and certainly beyond the bounds of NATO. Here I made a crie de coeur for the reestablishment of a Territorial para brigade. My hon. Friend may find me rather like Cato, coming back to the one theme that we should try to reinstitute a Territorial Army para brigade.
  The Soviet adventure in Afghanistan has shown that we live in a period of great tension, which has come about in the space of one generation. Hon. Members of my generation have to consider seriously whether we may find ourselves having to go to war. That is something which, sadly, we have to contemplate. It is largely in our hands whether we shall have to do so.
  9.4 p.m.
  Mr. Nicholas Lyell: I am grateful for the opportunity to take part in the debate at this late hour. If an army marches on its stomach, my hon. Friends will know that I shall be brief. I wish to follow the arguments of my hon. Friend the Member for Anglesey (Mr. Best) and all other speakers who concentrated on questions of priorities. The overriding priority that I wish to emphasise in the context of our
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  present forces, and lack of them, is that of increasing home defence.
  It was said by Lord Montgomery that the defence of the realm is a seamless garment. In other words, our whole defence strategy, based as it is upon deterrents, can succeed only if we not only have the suicidal power to inflict terrible damage on the enemy but are seen to have the will and the ability to continue to defend ourselves, not only on the Continent but in Britain, in the event that the deterrent effect should fail. When I say "fail" I mean, not in the sense of failing to deliver hideous damage, but in the sense that we shall begin a war that we had intended to deter. Therefore, our ability to defend our home base is essential to the credibility of our nuclear deterrent and of our whole policy.
  Defence of the home base involves two considerations. It involves a system of home defence and an adequate system of civil defence. The latter has already been dealt with and is not the responsibility of my hon. Friend the Under-Secretary. I shall therefore concentrate on the former. I greatly praise what the Government have done—I do not seek to denigrate what happened under the Labour Government—for the morale of the Army. Therefore, if I seek to expose what I feel are inadequacies it is not in a carping spirit.
  Reading the White Paper carefully, my eye could not fail to land on paragraph 349, which contains one of those sentences that is significant for what it implies rather than for what it states:
  "Home defence would place heavy demands on the Army, particularly before the completion of mobilisation provides the TA and other reservists earmarked for home defence."
  Beneath those 25 words lie a multitude of sins. One wonders whether we have at the moment a carefully thought out and adequately manned system of home defence.
  It is not easy—it is probably right that that should be so—to draw figures too quickly from the White Paper. Other hon. Members have mentioned some of the figures showing the availability of defence for this country. My impression was that 30 Regular infantry battalions might be available with 38 TA battalions. I understand, however, from my hon. Friend the Member for Nantwich (Sir N. Bonsor) that only 15 of those latter battalions are likely to be available in this country.

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  Whatever the figures, if one compares them with a conventional attack even remotely comparable to that in the last war—and I know that we are not supposed to look back in that way—it is clear that we have nothing like an adequate conventional formation with which to provide sufficient home defence. It is clear that we could not possibly achieve the manpower necessary unless we relied upon what I broadly call our citizen army. That citizen army has to be formed either from those who are currently totally unconnected with the Armed Forces or from what is called the Army reserve but which at the moment seems to undergo no training, even though it appears in the White Paper as part of the force available for the defence of this country.
  I was glad to hear the encouragement from my right hon. Friend the Prime Minister at Question Time on Tuesday for the efforts being made to enable the Afghans to defend themselves, either by means of equipment or by encouragement. Her words would apply equally appropriately to this country. We must set up a system of home defence that is carefully organised—it will take some time to build—and is provided with the necessary manpower. That can be done, first, by a system of building on the Territorial Army, which provides valuable services, but not enough; secondly, by organising a scheme whereby those people in the Regular Army reserves undergo training and are given a specific role; and. thirdly, either by encouraging greatly increased recruitment to the Territorial Army or by reintroducing some form of required service on a short-term basis in order to provide the necessary manpower.
  Britain is the only country in Europe—apart from Eire and Luxembourg—that makes no requirement of its yoking men to provide any sort of service. It would not be wise to go back to an old-fashioned form of National Service, because we are talking about a system of local defence. That requires a limited role and limited training. We could make enormous advances by a period of training of three or six months, which could probably be carried out on a local basis, largely by people living at home. The cost of that sort of training and approach would be
  868
  small in the context of the overall budget, but the effect would be significant.
  I believe that the country would welcome the opportunity to provide that service. Young men and women leaving school and beginning their working lives would be prepared to give up the time, whether on a part-time or short-term, full-time basis. It could be achieved on a voluntary basis, or a requirement could be indicated by the nation. It would not be expensive. Albeit under-used, we have the basic infrastructure to provide that training, either by building on the Territorial Army or by drawing back into use some of the facilities that are available to the TA but that are not being used at present.
  The Regular Army has always been worried lest its energies might be deflected by having to carry out that training, but men and women leaving the Regular Army could be tempted by proper terms and conditions to undertake that training while they were still in full possession of their military knowledge and experience. I am sure that they would be delighted and well able to carry out that training.
  I have outlined briefly the nature of the home defence force that I believe we need. It would enable us to draw on substantial numbers of trained people—people trained for a limited role, largely an anti-armoured vehicle, anti-tank and anti-personnel role. They would have to be trained to operate only in their locality, and. therefore, the principal object would be to tie down any invading force until such time as our professional forces could bring the weight of greater armour and greater attack to bear.
  It would not be expensive, and it would indicate one of the crucial factors in a deterrent strategy—the will to defend oneself—and provide a means of putting that into effect, if necessary. In so doing, it would add immensely to the confidence of the country in its defence force, and it would thereby remove a great deal of the risk that is inherent in relying simply on the retaliatory notions of a unilateral nuclear defence capability. It would greatly increase our security, and it would provide a good base for constructive talks and communication—whether between ourselves and the Russians or any other bodies—that would lead us back to a path of sanity. The tensions that are present this year would be seen to recede, and we would get ahead, finding the mutual

  869
  and balanced reduction in forces which must be the objective of everyone concerned with defence.
  9.15 pm
  Mr. James Kilfedder: Having served for a number of years in the Territorial Army, I endorse and concur with what the hon. Member for Hemel Hempstead (Mr. Lyell) and other hon. Members have said about the Territorials. However, I wish to pay a fulsome tribute to the Ulster Defence Regiment, which has celebrated its tenth anniversary this year.
  When the UDR was created, it was immediately subjected to verbal attack, and some Republican politicians warned their supporters against joining it. Since then, it has been slandered from time to time and its members have been the object of terrorist attacks.
  Ten years on, the Ulster Defence Regiment can view its short history with pride. The great majority of Ulster people would wish to acknowledge the dedication and courage of those who have served or are presently serving in the UDR. The regiment deserves our fullest praise and support for the valuable contribution it makes in the battle against terrorism in Northern Ireland.
  I put this question to the Government: is it not time that the Ulster Defence Regiment was given the Royal accolade and renamed the Royal Ulster Defence Regiment?
  Sadly, many serving members have been murdered by the Provisional IRA, and often in the most appalling circumstances, such as the callous slaughter of Mr. Latimer in front of his 11-year-old son a short time ago in Newtownbutler. He was the sixth member of the UDR to be slaughtered this year.
  The House should ponder the remarks of the SDLP Councillor Sweeney, to which reference was made in the debate. He said on Monday that Protestants who joined the UDR are taking sides in the present conflict in the Province, and therefore they leave themselves open to attack by the Provisional IRA. He added these words, and they are worth considering:
  "A Protestant is shot because he is a member of the Ulster Defence Regiment and is prepared to support the union with Britain."
  Without any further comment—because I do not think one needs to comment
  870
  further on that kind of vicious remark—I suggest that the Attorney-General should look at this incitement to murder members of the UDR. I should like to know what the Minister has done about this matter, or whether any reference has been made either to the Attorney-General or to the Director of Public Prosecutions.
  I hope that makes clear to this House the naked threat to every member of the UDR, and the provocation which is still presented to the Ulster people in the eleventh year of a foul Provisional IRA terrorist campaign.
  But the shameful attack by that SDLP councillor on the UDR is matched by the Democratic Party's presidential platform committee in the United States. I note from the press that for the first time it has come out in support of a united Ireland and condemns the "violence on both sides" in Northern Ireland. The Democratic Party in the United States is therefore equating the Regular Army and the UDR with the Provisional IRA.
  We have heard many tributes paid in this House to the United States. We have had statements by the Government indicating our co-operation with the United States in its stand against the Soviet invasion of Afghanistan and in the matter of the hostages in Tehran. Surely we are entitled to expect something from the United States Administration. The kind of remark that I have just quoted should prompt the Government into having a full-blooded row with the present United States Administration.
  Many attacks are made on the Soviet Union by the President of the United States, but at least the Soviet Union, according to Pravda, has condemned the violence of the Provisional IRA. The Administration in the United States have not condemned that violence in the firm, unequivocal way that we would expect from a friendly country which relies on our support in so many parts of the world. Instead of insults from the Tammany Hall politicians in the United States, the Army deserves the admiration and praise of that country.
  We can be proud of the courage and patience of our regular soldiers serving in Northern Ireland. They are all very young. Many of them are inexperienced. But the people of Northern Ireland are proud of the regular troops because they are standing with the UDR and the police

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  as a barrier between them and the barbarians who would drag Northern Ireland down into one bloody battleground.
  I feel strongly about the Government's decision to withdraw another battalion of Regular soldiers from Northern Ireland. It means that the Regular Army strength in the Province has been reduced to about 11,650 troops—the lowest level since 1972. With the exception of 1976, the number of Regular Army troops in Ulster has steadily decreased since 1974 when there were more than 18,000 troops in the Province. There are now 6,500 fewer Regular soldiers in Northern Ireland than there were six years ago, despite the fact that the Provisional IRA continues to pursue its bloody campaign of terror, mutilation and destruction. Therefore, I repeat my demand for an increase in the number of Regular troops in Northern Ireland so that the movement of Provisional IRA terrorists across the Border can be stopped and lives thereby saved.
  The Government have so far responded by saying that these troops are needed for NATO commitments. Surely charity begins at home. The Government's duty is to ensure that lives are protected in all parts of the United Kingdom. Having ensured the safety of the citizen, they can then look after their responsibilities in the wider sphere in Europe. It is wrong for the Government to say that they must fulfil their NATO commitment, bearing in mind that our NATO allies are far from helpful over the battle being waged in Northern Ireland.
  I was interested in the remarks made by the hon. and learned Member for Colchester (Mr. Buck). He spoke of his experience on his recent visit to the United States, where officials and politicians totally misunderstand the situation in Northern Ireland. If they misunderstand it, it is high time for the Government to initiate what I have asked for in the past and what has been asked for again today—a massive propaganda campaign to explain to people in the United States exactly what is going on and to say that we need the help, support, sympathy and understanding of our friends in every part of the world, particularly in the United States, to bring to an end this terrible menace that threatens life in Northern Ireland.
  872
  Members of the Army to whom I have spoken say that the Irish Republic is less than wholehearted in its attack upon the Provisional IRA and that, if it wished, it could reduce the volume of terrorist traffic across the border. Therefore, the Army should be asked how it can contain terrorism along the border. Certainly roads ought to be sealed. The haven provided by the Irish Republic should be made less safe for Provisional IRA terrorists. We cannot allow the present situation to continue. This is its eleventh year. We do not want it to continue into the years ahead. The Minister must give some assurance to the people of Ulster that action will be taken.
  It should be noted that only two hon. Members from Northern Ireland—the hon. Member for Londonderry (Mr. Ross) and I—have been present during the debate, despite its importance. However, the hon. Members for Antrim, South (Mr. Molyneaux) and for Belfast, West (Mr. Fitt) visited us for a few minutes. Only a few months ago, the Official Unionists organised a monster demonstration in Belfast. Only a few days ago, the hon. Member for Antrim, North (Rev. Ian Paisley) arranged a demonstration in Newtownbutler. Both demonstrations were about security. Many people fear that the anxieties of many Ulster people, particularly those in border areas, are being used in a power struggle between those two major parties. I am sure that all hon. Members would deprecate that.
  9.25 pm
  Mr. Concannon: I am particularly pleased that all those who have waited all day have managed to speak in the debate. I hope that they will not mind if I gabble as quickly as I can in order to leave as much time as possible for the Minister to reply.
  The debate has been thoughtful and more wide-ranging than usual. I think that I was right when I said that one big decision would cloud the issue. The Minister's opening remarks did not take us much further. Although he took us through the equipment plans and everything else, he could not tell us whether the decisions were sticking. All hon. Members know that the main decision will depend on whether the re-equipment of our NATO forces goes ahead as planned.

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  We have had some noteworthy contributions. The Opposition have had to contribute quality rather than quantity. The shortage of tank troops has been discussed. I was an infantryman, a reservist and a member of the Territorial Army. I came out of that as a tank driver and gunner. I understand that my hon. Friend the Member for West Lothian (Mr. Dalyell) is equipped in the other two trades. If there is too great a shortage of tank drivers, we shall offer ourselves as volunteers. Perhaps we should offer ourselves for operation Crusader.
  I am glad that Conservative Members have not claimed that patriotism sits on their Benches alone. I was happy to hear the speech made by the hon. Member for Winchester (Mr. Browne). It was not a bad speech for a Grenadier. When I come to the Dispatch Box I have to look out of the corner of my eye. There is an hon. Member who is always sitting there when I am at the Dispatch Box. Perhaps he is keeping an eye on me. He was my first adjutant in 1947. I am sure that he keeps his eye on me for old time's sake. Perhaps he reports back.
  These debates are enjoyable. However, I was frightened, because the hon. Member for Windsor and Maidenhead (Dr. Glyn) spoke about Victoria barracks. Good God, are they still up? They were a dump when I was there. I don't know how they manage now. My hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Brown), who has a background in the Ministry of Defence, made a succinct speech. He put our party's view clearly. He said that the Labour Party was not a pacifist party. It is not. We have always had pacifists in it, and they will always be a vociferous group.
  The Labour Party is committed to NATO. The rejection of this at our party conferences goes on every year. We are certainly not unilateralists. These are the things that I want to reiterate. They brought me to my feet when the Minister was speaking. He was certainly taking the wrong view just because we were questioning the pending decision on the new generation of Polaris submarines. We do, and will, question that decision. Until we get the facts on that matter, there is nothing on which we can base our opinion. If it comes to us as a fait accompli, our party's position is that
  874
  we shall certainly not be bound when we are again in office on the Government Benches.
  I have said many times that what we shall have to do with our reservists and reserve forces is to find something more interesting for them to do in order to hold their interest. I am glad that that matter has been mentioned this evening. As has been said, it is not good enough that they should be fobbed off with bits of equipment and things that the Army deems they should have. They ought to be brought into affairs much more. They ought to be given a much wider role in the defence of the United Kingdom. I have suggested previously that we should think about using them in the defence of airfields and in various other roles within the United Kingdom. The new Rapier system is one of the things that I was possibly thinking about in that respect.
  As regards NATO, it is very important that we go ahead with the re-equipment programme as quickly as possible, for the reasons that I spelt out earlier. We have heard some very thoughtful speeches from Conservative Members. I was delighted to find that possibly the views to which Opposition Members are coming are meeting with some approval on the Conservative Benches, concerning the Polaris replacement and what our priorities should be. We have certainly nailed the point as to where the Opposition's priorities will be. If there has to be a choice, it will certainly lie with NATO. We are committed to NATO. I understand that that is also the Liberal Party position. Clearly, the Government will have to take this matter very seriously. They will have to consider very seriously how they come to a decision and what information they will give to the House. They must consider when and how the decision is to be made.
  I am pleased to see two Northern Ireland Members present for this defence debate—the hon. Members for Londonderry (Mr. Ross) and for Down, North (Mr. Kilfedder). They were talking about areas and people that I know particularly well. They were also talking of the difficulties that I know very well. Sometimes we can stand in this House and offer certain easy answers to the situation in Northern Ireland. After five years of personal experience of the Province I can

  875
  honestly say that it was not an easy problem. It is not an easy problem now. It is a problem which must be worked at very hard and diligently.
  I know the difficulties to which the hon. Member for Londonderry referred. It is always very difficult to speak out, because if one speaks out one must be very careful that one is not becoming part of the propaganda machine of the IRA or any other terrorist organisation. One must be very careful about what one does.
  I know that the two Northern Ireland Members present this evening speak very sincerely. I know what good constituency Members they are. Certainly their words will be read very widely in Northern Ireland.
  I conclude on the subject of détente. I should like to put the Labour Party view on this. The real wish of the Labour Party is to spend less, not more, on defence. We want to stop the arms race and not be forced to join it. This was spelt out succinctly by my hon. Friend the hon. Member for Farnworth (Mr. Roper), who backed me up today. I am glad to see that he has recovered from his illness.
  Arms control and disarmament must be one of our continuing concerns. No Government had a better record in the pursuit of peace than the previous Labour Government. They put their full weight behind the crucial SALT talks between the United States and the Soviet Union. They sought urgently to make progress in reducing conventional forces in Central Europe at the MBFR talks in Vienna. They worked for a speedy conclusion to a comprehensive test-ban treaty. We say that all those objectives must be followed up. It is our task, even at this most difficult time, to seek to maintain the momentum towards arms control, disarmament and détente. In particular, the dialogue with the Soviet Union must continue even if the United States is cool about the prospects at the moment. There is common interest between the West and the Soviet Union to achieve security at a lower cost, if this can be achieved, by mutual agreement and with proper verification.
  It is essential that the SALT II agreement be ratified and that the discussions on SALT III begin. The aim would be to put theatre nuclear weapons higher on
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  the agenda with a view to an interim agreement before other matters are settled. In every way, in public statements and through diplomatic channels, the United Kingdom should urge continuing progress on the basis of equality of reduction and proper verification and inspection. We want to halt the arms race and we believe that multilateral disarmament is the answer. That is our position.
  Let me end by reiterating my thanks and those of the Labour Party to our Forces, wherever they are, for the job that they do and, as has been said in the House many times before, for the manner in which they do it. From my experience and visits to them, I do not know of any other army that would have put up with the jobs that our forces have done this past year. We may talk about Central London. I had the pleasure of being with our troops in Zimbabwe and Northern Ireland. We must not forget those in BAOR and the others scattered around the globe, such as those in Belize. They go about their work and perform the role given to them by Parliament. We in Parliament should never forget that when we send them out to do our bidding. This is the time, in a debate such as this, when we should say "Thank you".
  9.38 pm
  Mr. Hayhoe: I welcome very warmly the wide measure of agreement which this debate has shown about our views in this House on the British Army. Some members of the Armed Forces follow our proceedings. However, I am not sure that Hansard is the bed-time reading in every barrack-room in the country. I hope, at any rate, that the message will get through to them that there has been a broad degree of unanimity in the House. They will be gratified to know that there is widespread support.
  This has been a constructive and responsible debate. Perhaps that is partly due, not so much to those who contributed to our proceedings, but to those who were absent. One looks below the Gangway on the Opposition side. If those Benches had been fuller, a discordant note would have been heard. The debate has been all the better for the absence of those Members.
  I welcome the warm support from the Opposition Front Bench for NATO. This has been a bipartisan policy for the past 30 years. We see our membership of that

  877
  Alliance as absolutely pivotal to the security of our country. It would be a sad day if one of the major parties in this country ever betrayed the friendship with our partners in the Alliance. It would be as bad for the Alliance and ourselves.
  The right hon. Member for Mansfield (Mr. Concannon) referred to arms control and disarmament. I do not propose to spend much time on those vitally important subjects. This is not because I wish to diminish their importance or to diminish the great concern of the Government for progress to be made on these fronts. I spent some time, during the two-day debate on the defence White Paper, speaking on these matters and, again, in the debate on nuclear questions. The position that the Government adopt on arms control and disarmament has been set out many times. It would be better, rather than repeating it again, to try to reply to some of the many points that have been made.
  As the right hon. Gentleman indicated, the decision that is awaited about a successor system to Polaris has tended to overshadow many of the contributions. The hon. Members for Newcastle upon Tyne, West (Mr. Brown) and Isle of Wight (Mr. Ross), my hon. and learned Friend the Member for Colchester (Mr. Buck), my hon. Friend the Member for Aldershot (Mr. Critchley) and the hon. Members for West Lothian (Mr. Dalyell) and Walsall, South (Mr. George) and other hon. Members had comments to make about our policy towards nuclear weapons. At one stage, I thought that a competition was raging about quoting past Chiefs of the Defence Staff. Lord Carver was quoted from one side of the House, rebutted by Lord Hill-Norton, quoted from the Government side. I thought it only fair, now that my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force is sitting on the Front Bench, that the RAF should have a look-in and that reference, and, perhaps, the casting vote, should be given to Marshal of the Royal Air Force Sir Neil Cameron. I am delighted to say that he comes down on the Government side of the House and against the views expressed by Opposition Members.
  This is, perhaps, too simpliste a way of approaching a major question. The real essence of the argument produced
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  on this matter is from those who say that the costs of going for a successor system for Polaris would, as my hon. Friend the Member for Aldershot said, starve BAOR of conventional weapons. That is a serious point.
  I sought, in my opening speech, to give some figures in rebuttal of this argument. I cannot go further than to say again that if one looks at the way that our present expenditure is forecast, even after taking account of expenditure on a successor system to Polaris, we shall have the resources to spend more on conventional programmes than was being spent in the year we came to office.
  Mr. Roper: The hon. Gentleman made the point, in his opening speech, that the 3 per cent. per annum increase being made in response to a request from NATO will enable the Government to do this. That 3 per cent. was decided upon by NATO collectively to improve the conventional forces of the Alliance. It was not intended for such adventures as the replacement of Polaris.
  Mr. Hayhoe: I believe that within the context of the cumulative 3 per cent. growth, to which I have referred, we will be able to find the resources to make certain that the British Army has an adequate conventional capability and, at the same time, provide the resources that, over the long period of the lifetime of a successor system, are quite a small percentage. We can argue this matter, and, as events unfold, history will show which of us has forecast and estimated correctly.
  It is clear on the figures available that we shall be able to make an adequate contribution to the conventional role of our forces that are aligned to NATO, at the same time as finding the resources for producing a successor system to Polaris.
  I stress that no decision has yet been made on the issue. All that I am doing is repeating the information given in our previous debate. No decision has been made. When a decision is made it will be announced to the House. I have the authority of my right hon. Friend the Secretary of State for Defence to say that he is not willing to accede to the request for a Green Paper on the issue. However, he is committed to producing a substantial document in support of the decision that the Government will make. We shall go

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  further in that respect than any previous Government.
  Mr. Stephen Ross: Will the hon. Gentleman give way?
  Mr. Hayhoe: I must continue. We could spend the remaining time discussing this matter, but other important issues have been raised, not least by the hon. Member for Newcastle-upon-Tyne, West, who talked about tanks. I fully understand his interest in Vickers, Elswick.
  The decision that was taken when he was chairman of the Army board 18 months ago, on an additional 77 Chieftain tanks, has been overtaken by the new opportunities resulting from the cancellation of the Iran order. That gave the capacity for other decisions to be made. The hon. Gentleman said that there were problems of size and weight in a tank along the lines of the Iranian tank, or a variant of it, which would make it unsuitable for service in BAOR. I hope that the hon. Gentleman will give credit to all concerned and recognise that they will take such problems into account and make any modifications that might be required if the decision goes in favour of the Challenger option.
  The hon. Gentleman asked about an in-service date. It is estimated that it will be possible to put the tanks into service in the mid-1980s. They would not therefore have the same time-scale as that which is apparent for the MBT80.
  Mr. Robert C. Brown: Will the hon. Gentleman give way?
  Mr. Hayhoe: No. I must go on. I am trying to answer many questions.
  Mr. Brown: Will the hon. Gentleman give way?
  Mr. Hayhoe: I hope that the hon. Gentleman will forgive me.
  Mr. Brown rose—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. One at a time, please.
  Mr. Brown rose—
  Mr. Hayhoe: I must disappoint the hon. Gentleman.
  Mr. Brown rose—
  Mr. Deputy Speaker: Order, The Under-Secretary of State is not giving way.
  Mr. Hayhoe: I want to turn to—
  Mr. Brown: Give way.
  Mr. Deputy Speaker: Order. The hon. Gentleman knows the rules. If the Minister does not give way he must resume his seat.
  Mr. Hayhoe: The hon. Gentleman assiduously pursues his constituency interest. I have acknowledged that. However, many other points were raised in the debate which also deserve answers.
  Mr. Brown: Will the hon. Gentleman give way?
  Mr. Deputy Speaker: Order.
  Mr. Hayhoe: I mentioned Vickers, Elswick, because although that is not in the constituency of the hon. Member for Newcastle upon Tyne, West he has an interest in it.
  Mr. Brown: Give way.
  Mr. Hayhoe: I shall not give way. This is absurd. A number of points were raised about Northern Ireland.
  Mr. Walter Harrison: Will the hon. Gentleman give way?
  Mr. Hayhoe: The Labour Deputy Chief Whip attempts to intervene when he has not even been present for most of the day. Both I and the right hon. Member for Mansfield have sat here for every minute of it. It is fair that I should attempt to answer some of the points raised by hon. Members who have been here. That I intend to do.
  Mr. Harrison: On a point of order. Mr. Deputy Speaker.
  Mr. Hayhoe: So far as my hon. and learned Friend the Member for Colchester was concerned—
  Mr. Harrison: The Minister has made a personal attack. Of course I have not been here during the entire debate, but I feel that I am entitled to seek to protect my hon. Friends.
  Mr. Hayhoe: What is the point of order?
  Mr. Harrison: It was granted by the Chair.
  Mr. Deputy Speaker: There was no point of order.
  Mr. Hayhoe: On a point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order.
  Mr. Harrison: The Minister challenged me.
  Mr. Hayhoe: I was rising on a point of order.
  Mr. Deputy Speaker: Order. I was under the impression that the Under-Secretary had given way—
  Mr. Hayhoe: I had not given way.
  Mr. Deputy Speaker: Order. I was under the impression that the Under-Secretary had given way, because he had sat down and the Opposition Deputy Chief Whip was at the Dispatch Box. Now shall we—
  Mr. Hayhoe: I did not give way.
  Mr. Deputy Speaker: The hon. Gentleman did not give way.
  Mr. Hayhoe: Hon. Members who have been present during the debate all day will well understand—
  Mr. Harrison rose—
  Mr. Hayhoe: No, I am not giving way. Hon. Members who have been present in the debate all day will know that I gave way a great deal in my opening speech. I gave way to all but one of my hon. Friends who wished to interrupt. I am trying to answer points that were raised in the debate. If Opposition Members do not wish me to do that people outside the House will draw their own conclusions.
  Mr. Robert C. Brown: On a point of order, Mr. Deputy Speaker. This is not a bogus point of order. The fact is that in his reply the Minister made no reference at all to the point that I made about the urgent request of the Vice-Chief of the General Staff for 77 Chieftain tanks which, had the order gone to Vickers at Elswick—
  Mr. Deputy Speaker: Order. It really is an abuse to raise on a point of order a question that the hon. Member wished to raise with the Minister.
  Mr. Hayhoe: That episode has successfully wasted a lot of time and, therefore,
  882
  a number of hon. Members will not get replies to important questions.
  I turn to important points on Northern Ireland raised by the hon. Member for Londonderry (Mr. Ross) and by my hon. and learned Friend the Member for Colchester. I think that the hon. Member for Londonderry will recognise that security policy in Northern Ireland—including matters concerning the crossing and sealing of the border—is rightly a matter for my right hon. Friend the Secretary of State for Northern Ireland. My right hon. Friend, of course, receives professional advice both from the Chief Constable and the GOC troops. I hope that nothing that the hon. Member for Londonderry said was in any way seeking to undermine their authority and their professional standing. I wholly repudiate the hon. Gentleman's suggestion that the Government are behaving timidly or with lack of courage merely because we do not follow either the tactical or the strategic advice that he gives us.
  My hon. and learned Friend the Member for Colchester asked about co-operation between security forces on both sides of the border. I can tell him that such co-operation is increasing all the time and is producing results. There have been arms finds and arrests, and so on. The hon. Member for Londonderry referred to the effectiveness of covert operations particularly by the SAS. We have been putting increased emphasis on that kind of operation and though I cannot discuss the numbers involved or the type of operation I can say that they are achieving results.
  The former security co-ordinator, Sir Maurice Oldfield, was required not to produce a report but to report on a continuing basis. This he did. I have no doubt at all that he made an extremely valuable contribution towards improved co-operation between the security forces in the Province.
  I turn to the question of home defence, which was raised by a number of my hon. Friends, particularly the Members for Nantwich (Sir N. Bonsor) and Hemel Hempstead (Mr. Lyell). They made a powerful case for an extension of home defence forces recruited on a local basis. I am grateful to them for their suggestions. As I made clear earlier today, the adequacy of our arrangements for home defence is under active study. The greater

  883
  use of reservists in home defence is certainly possible. One of the options under study is that of raising some form of auxiliary force on a local basis.
  Many important points were also made about the Territorial Army. I am grateful for them, and I can assure the hon. Members who made them that they will be taken fully into account.
  My hon. and learned Friend the Member for Colchester raised the case of Private Darkin. I have instructed that further inquiries should now be made by the Special Investigation Branch, which is looking into this case in the light of the evidence given at the coroner's inquest. I shall make certain that those inquiries are pursued very thoroughly indeed.
  I turn to the question of the British Army exhibition which was raised by a number of hon. Members. They asked for details of the sales and the countries invited to attend this exhibition. I must tell them that that information has always been treated as confidential by successive Administrations. There are sound security and commercial reasons for continuing to do so. It does not mean in any way that the United Kingdom exports arms in an indiscriminate fashion, because there are strict controls on defence sales overseas, as I explained at Question Time recently.
  The hon. Member for West Lothian referred to the assistance that the Army gives overseas. During the past year, the Army has carried out relief operations in Jamaica, following the floods of June last year. It has also done so in Dominica, following the devastation caused by hurricane David in August 1979. In May and June of this year it helped to drop supplies of grain in Western Nepal in order to relieve the famine resulting from last year's drought. It is now actively engaged in Belize in dealing with the flooding. The Royal Engineers have carried out overseas tasks in the Falkland Islands, Kenya, Gambia, St. Helena, St. Vincent and Tuvalu. An immense amount of helpful work has been done by British Army contingents overseas.
  The hon. Member for Newcastle upon Tyne, West asked about small arms for the 1980s. The requirement to replace
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  the present family of small arms is a firm one, and will be carried through by the mid-1980s. NATO has not yet announced the results of the trials to select the new standard calibre for future personal weapons, but British weapons of that calibre will unquestionably provide a combination of reduced length, lighter weight, reduced recoil, better handling characteristics and an optical sight that will significantly improve the effectiveness of future small arms fire.
  The hon. Member for Walsall, South asked about ammunition stocks. He pointed to the report of the Select Committee on defence, which dealt with very important matters indeed.
  My hon. Friend the Member for Harrogate (Mr. Banks) made an authoritative speech about chemical weapons. One recognises the substantial report on these matters which he has made to the Western European Union—
  Mr. Walter Harrison rose in his place and claimed to move, That the Question be now put.
  Question put and negatived.
  Question again proposed, That this House do now adjourn.
  Mr. Hayhoe: The final question to which I wish to refer is the point raised by my hon. Friend the Member for Harrogate (Mr. Banks). He raised important questions about chemical weapons, which were also referred to by other hon. Members. I wish to make it plain—
  It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

  THE ARMY

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Motions relating to Ways and Means and the consideration of Lords Amendments to the Transport Bill may be proceeded with, though opposed, until any hour.—[Mr. Cope.]

  DEFENCE
  Motion made, and Question proposed.
  That the draft Army, Air Force and Naval Discipline Acts (Continuation) Order 1980, which was laid before this House on 3 June, be approved.—[Mr. Cope.]
  Mr. Deputy Speaker (Mr. Bernard Weatherill): The Question is—
  Mr. Tam Dalyell: On a point of order, Mr. Deputy Speaker—
  Mr. Deputy Speaker: Order. I am on my feet.
  Question put and agreed to.
  Mr. Dalyell: On a point of order, Mr. Deputy Speaker. I am not complaining against you, but in the presence of the Government Chief Whip and the usual channels I should like the Chief Whip's attention—
  Mr. Deputy Speaker: Order. The point of order must be directed to the Chair and not to the Government Chief Whip.
  Mr. Dalyell: You may recollect, Mr. Deputy Speaker, that during the speech of my right hon. Friend the Member for Mansfield (Mr. Concannon) the Minister interrupted—I do not blame him for that—to say that by some oversight he had failed to make it clear that item No. 2 on the Order Paper, the motion relating to the Army, and Air Force and Naval Discipline Acts (Continuation) Order, would be taken with the main debate. It will also be within your recollection that I said at the time that I did not want to interrupt further the speech of my right hon. Friend the Member for Mansfield. Therefore, in a sense, assent was given by the House.
  It may be a narrow issue, but consider what has happened. I wished to raise an important matter in the debate on the different attitudes to discipline in Northern Ireland and in the remainder of the Services, which is surely covered by item No. 2. Through no fault of his own, the Minister did not get around to answering my point. That is precisely what happens when, for convenience sake, we truncate our procedures.
  I do not know the exact nature of the agreement that was entered into, but some of us will continue to object to such informal arrangements for convenience, made through the usual channels and possibly for genuine reasons. I am not saying that they tried to get round, or get out of, the issue. A very important issue appeared on the Order Paper and it was proper to raise the matter. But the only opportunity to raise a sensitive matter about discipline in Northern Ireland and the discipline of the Army, which raises many important issues that
  886
  worry many people, was not reached. That is what happened when we mess around with our procedures.
  I am not making a complaint against you, Mr. Deputy Speaker, or against Mr. Speaker or anyone else. It was done in good faith. But I wish to put down a marker that some of us will continue to object to such fudging around with matters that appear on the Order Paper. The usual channels had no business to do that.
  Mr. Robert C. Brown: Further to that point of order, Mr. Deputy Speaker. My hon. Friend the Member for West Lothian (Mr. Dalyell) is a straight man and I am sure that he would not wish to mislead the House. However, he has inadvertently done so. In his earlier submission, he said that it was through no fault of the Minister that he had not been able to respond to the simple point raised by my hon. Friend earlier today vis-à-vis discipline in Northern Ireland and Great Britain. It was directly through the discourtesy of the Minister in failing to give way to myself, that he did not have time to respond to the point raised by my hon. Friend.
  Mr. Deputy Speaker: That is not a point of order. If I may deal with the point of order raised by the hon. Member for West Lothian (Mr. Dalyell), as I explained earlier this afternoon I am not a party to anything that goes on between the usual channels. I asked the House whether it agreed that the two items should be taken together, and that was agreed. I think that the hon. Member for West Lothian understands that fully.
  Mr. Dalyell: My point was simply that it would have been most discourteous to have started an argument on this matter in the middle of the speech of my right hon. Friend the Member for Mansfield (Mr. Concannon). May we leave it, then, Mr. Deputy Speaker, that this will be raised with you as Chairman of Ways and Means and that perhaps over the next few weeks we may reflect on the issues involved to see what can be done in the future?
  Mr. Deputy Speaker: Perhaps we had better leave the matter there.

  WAYS AND MEANS

    BUILDING SOCIETIES
    Resolved,
    That provision may be made wth respect to the matters to be taken into account by the Commissioners of Inland Revenue in exercising their powers under section 343(1) of the Income and Corporation Taxes Act 1970.—[Mr. Cope.]
    Ordered,
    That it be an Instruction to the Standing Committee on the Finance Bill that they have power to make provision thereon.

    CAPITAL TRANSFER TAX
    Resolved,
    That section 122 of the Finance Act 1976 may be amended so as to extend its provisions to certain additional cases.—[Mr. Cope.]
    Ordered,
    That it be an Instruction to the Standing Committee on the Finance Bill that they have power to make provision thereon.

  TRANSPORT BILL
  Lords amendments further considered.
  TRANSPORT BILL
    Clause 41

      FUNDING OF RELEVANT PENSION OBLIGATIONS
      Lords amendment: No. 63, in page 38, line 41, at end insert "or described".
      10.7 pm
      The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this we may take Lords amendments Nos. 83 and 84.
      Mr. Clarke: These are drafting amendments, dealing with a point that arose in our earlier debates. The point deals with various pension schemes and arrangements falling within the BR 1974 pension fund and the NFC 1978 pension fund. Those funds are the main supplementation schemes which were set up to deal with the problem of the inflation-proofing of these pensions. The arrangements under those two funds are sometimes described in general terms rather than being specified precisely in the trust deeds that established them.
      The amendments are intended to put it beyond doubt that all the schemes and arrangements within the funds are eligible for support under the Bill. The particular problem is that the amendments are necessary to cover future schemes of supplementation.
      Question put and agreed to.

    Clause 44

      PAYMENTS BY MINISTER IN RESPECT OF BR AND NFC PENSION SCHEMES
      Lords amendment: No. 64, in page 41, line 3, leave out "sections 48 and 49" and insert "section 49".
      Mr. Kenneth Clarke: I beg to move that this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: I should tell the House that privilege is involved with

      889
      this amendment. If it is agreed I shall cause the appropriate entry to be made in the Journal. With it we may take Lords amendments Nos. 69 and 70, the amendment to Lords amendment No. 70, Lords amendments Nos. 71 and 72, the amendment to Lords amendment No. 72, and Lords amendment No. 73.
      Mr. Clarke: This series of amendments deals with the surpluses that may arise on basic schemes behind which there are supplementation schemes that cover the inflation-proofing element of those pensions.
      Before I go into the technicalities of the amendments, it seems that there are broader issues of policy which I know have been troubling the Opposition throughout and which lie behind the Opposition amendments to the Lords amendments. Underlying the concern that has been expressed in this House at earlier stages and in another place is a fear that somehow the changes that we were making posed a potential threat to the position of pensioners. The feeling has been expressed repeatedly in debate on this and other parts of the Bill that behind the complexities of the drafting there lay a threat to the entitlements of retired railwaymen who have been contributing for many years to the British Rail pension funds.
      Throughout, the Government have been anxious to make it clear that they are not in any way concerned with weakening the entitlement of pensioners who receive what are known as historic pension expectations. The Government are engaged in arguments about technicalities—about how those pension entitlements are to be secured and financed in future years. There have been disputes about those technicalities between people such as my right hon. Friend and myself, bearing in mind the interests of the taxpayer, and those on the British Railways Board and the managers of the funds who have had to bear in mind the way in which they are to meet their obligations to pensioners.
      There are two giant interest groups, both commanding substantial funds, who are debating how best to divide the obligations towards the pensioners. We are all agreed that the pensioners and their widows should receive the pensions to which they are entitled. During debates on the Lords amendments and associated
      890
      amendments these matters were voiced again by Opposition spokesmen in another place, and I can tell from the text of his amendments that the right hon. Member for Barrow-in-Furness (Mr. Booth) will pursue the matter yet again.
      One of the Opposition's fears is that if the division that we are making between the obligations of the Government and the obligations of the British Rail pension fund managers should prove to be wrong in practice, and if the calculations of the actuaries are overtaken by movements of inflation and a change in the economy which cannot be forecast now, pensioners' rights will be threatened. They fear that it could throw on to the British Rail pension fund, and the British Rail Board behind that fund, financial obligations which they may be unable to meet.
      My noble Friend Lord Bellwin sought to reassure Members in another place on that point, and it is important that I put on record at this stage the Government's position, in order to try to reassure everyone involved.
      First, I make clear that the Government are talking about what I may describe in colloquial terms as a slightly doomwatch situation. We do not believe that the arrangements that we have set out pose a great danger of the Government, British Rail or the National Freight Corporation's pension fund managers being unable to meet these obligations. I understand the fears, and it is to those fears that I address my remarks. We are not seeking to remove or to reduce the pension entitlement of pensioners. I believe that the fears spring from misunderstandings of the Bill, and of the Government's intentions. I repeat that it is no part of our policy to worsen the position for railway pensioners.
      The Bill is concerned with the arrangements whereby the cost of meeting the pensions is divided between British Rail and its pension fund and railway business on the one hand, and the Government and the general taxpayer on the other. The pensions in question are railway pensions. They are not Government pensions, and they are the responsibility of British Rail. The Government are committed to giving some financial support to British Rail to help with the payments, and the Bill changes the form of that help, although not its extent.

      891
      The arrangements that are proposed under the Bill are in many respects similar to those that were envisaged under the 1974 Act, and the responsibility for the historic pension liabilities will remain with the board, although Government support for those liabilities will be provided. We are contemplating a similar approach to the calculation of the amount of support. Under the 1974 Act there would have been an actuarial valuation of the assets and liabilities of each scheme. As a result of that valuation it would have been decided how much of the liabilities of each scheme, and what proportion of the liabilities, could not be met from the assets of the scheme. A funding debt would then have been created to cover that proportion. Under the Bill the same proportion of the liabilities will be met directly by Government support payments.
      10.15 pm
      As I have said, I accept that we may not get the actuarial assessment precisely right. There is inevitably a measure of uncertainty about the actuarial assumptions. But every pension scheme—and, indeed, every insurance scheme—depends on actuarial assumptions. I still do not see that the actuarial assumptions that stand to be made under the Bill are different from those that actuaries are making all the time in relation to occupational pensions of all kinds, or from the assumptions that would have had to be made under the 1974 Act. I do not believe, therefore, that the Bill introduces any new risks in this respect.
      Nevertheless, the question arises of what would happen if the Government support payments proved to be insufficient and the pension schemes had to look to the British Railways Board for further funds to make good their obligations. I repeat that the Bill does not affect the pension entitlements of pensioners or the obligations owed by the board to its pension schemes.
      Members and pensioners could in the last resort be at risk only if the board were to default on its legal obligations to its creditors. This is most important, because to allege that pensioners are at risk is to allege that the board would default on its debts.
      The House will know that on a number of occasions nationalised industries have run into financial difficulties. Indeed, that
      892
      is something of an understatement. There have been quite a lot of occasions on which nationalised industries have run into financial difficulties. It has happened to British Rail on three occasions. On each occasion it has been put in a position in which it could discharge its obligations.
      People everywhere deal with nationalised industries on the basis that their credit is as good as that of the Government. Whatever the technical legal distinction, that is the practical position. There is no reason why they should not continue to do so, the railway pensioners can be confident that the board will be able to honour its legal obligations.
      In the course of our discussions on the Bill the suggestion has been put forward that there ought to be an express Government guarantee of the historic pension obligations. I can well understand why the suggestion has been put forward. However, we have to look at the implications of the suggestion. I have already said that there is no realistic prospect that the board will not discharge its obligations. The effect of an express guarantee of these obligations will be to transfer them directly to the taxpayer.
      If the board ran into further difficulties, to which the historic pension obligations were a contributory factor, it would mean that the other assets and obligations of the board—in other words, the remainder of the board's finances—would not be brought into account.
      The 1974 Act, for which the Bill is merely a replacement, did not transfer the board's obligations to the Government, and we do not think that it would be right for there to be such a transfer now. While some of the obligations are of very long standing, the historic obligations, as they are called, are dominated by comparatively recent obligations, incurred in the early 1970s. Indeed, the magnitude of the obligations is not fixed even now.
      At the margin, the board's eventual liability is affected by the board's current management decisions. It is not unreasonable, therefore, that responsibility should remain with the board. The issue whether the Government stand behind the specific obligation with a specific guarantee raises the whole question of the relationship between the Government and the nationalised industries.

      893
      Successive Goverments have maintained an arm's length relationship with the industries. Within the limits laid down by the law, they may manage their own affairs; they have their own assets, rights and liabilities. The Bill is not intended to disturb the overall financial settlement between the board and the Government; it is concerned with the mechanics of that settlement. Still less is the Bill intended to disturb the general relationship between the Government and the nationalised industries, or between the industries and those with whom they do business or to whom they owe obligations.
      Confidence is something that builds up over time. It was by referring to the existing position, which has stood for many years, that I was able to say that railway pensioners can be confident that the board will be able to honour its obligations.
      On the question whether one needs to go beyond that practical position, with which we are all familiar, and in regard to which everyone has traded with nationalised industries over many years, I do not believe that a specific guarantee would add to the security of pensioners or give them any protection that they do not now have but it could cause complications. The issue is whether the board will meet all its obligations. It could not be in financial difficulties in which the Government would rescue it in relation to one set of creditors and not in relation to another. I do not say that it is more likely that some obligations rather than others will be honoured. In the course of proceedings on the Bill Ministers have been asked to say that the Government stand behind some nationalised industry obligations. By implication, that might mean that we do not stand behind others. That would destroy the whole basis on which people deal with nationalised industries—a basis that has been accepted for many years by successive Governments.
      I have attempted to sketch the relationship between the Government and the nationalised industries, on the one hand, and the basis upon which other people deal with the nationalised industries, on the other. Many are not profit-making. Many are not solvent, or would not be solvent if they were trading wholly in the private sector. The Government do not give a specific guarantee for any of
      894
      their specific debts, but as British Rail has been rescued three times by financial reorganisations it is clear that in practice these industries continue trading because the Government's credit is implicitly behind them.
      Looking at this doomwatch situation, I feel that what I have set out is a reiteration of the position, which is longstanding and is still accepted by the Government. If the British Railways Board had any doubt about its continuing ability to meet its pension arrangements for whatever cause, the basis of the existence of the nationalised industries which I have described would come into play.
      Having set out the basic position, it seems easier to deal with the technical problems to which the amendments refer. Having drawn back from the general, which is the whole basis upon which British Rail pensioners can expect to receive their full pension entitlement and feel confident about it, I turn to the specific amendments, which deal with the inflation-proofing part of their pension expectations and the supplementation schemes that have been brought into being to provide inflation-proofing for those who are otherwise members of what are described as the basic schemes.
      Amendments Nos. 64, 69, 70, 71, 72 and 73 are really drafting amendments. They are not designed at this stage to make any change in the policy upon which the Bill was based when it started. They are an attempt to delve into the complexities of clause 48, which is a nightmare of verbiage. The background is a nightmare of complications of pensions practice and the amendments attempt to make it clear and to provide guidelines within which the Government Actuary, pension fund managers and everybody else will work in practice.
      The amendments have two aims. The first is to make sure that in the operation of the surpluses clause all future schemes of supplementation are taken into account.
      The second—this is the most important objective—is to ensure that the reduction in the Minister's payment to the supplementation scheme matches the reduction in the proportion of future supplementation paid by the supplementation schemes.
      The second is the major question, which recurs over several groups of

      895
      amendments that we are about to discuss. I do not criticise the selection, Mr. Deputy Speaker, but one or two are paving amendments towards subsequent amendments, and so on. I shall be guided by the House at what stage, if necessary, we are taken into the details of exactly where the supplementation schemes now stand.
      The supplementation schemes are designed to cover the inflation-proofed element of the pension expectations. We all know that inflation is going on at a great rate. That means that the obligations of the supplementation schemes continue and arise steadily year by year.
      On the other hand, the basic schemes, which are relieved of their obligation to give inflation-proofing to their members, are given considerable surpluses by inflation. The debate turns on how much the Government and the taxpayer are entitled to recover from the surpluses created within the basic schemes to recompense the taxpayer for the inflation-proofing for which he has had to pay to the members of the basic schemes. The same inflation that increases the Government's obligations increases the surpluses in the basic schemes. It would not be right for all those surpluses to be distributed merely to continue improveing all the basic pension entitlements of the members. The taxpayer is entitled to his share to recompense him for the supplementation that he is otherwise standing behind.
      The amendments cover various issues. Until I have heard what hon. Members think, I shall not go into detail. There are specific amendments that deal with the fair division of the surpluses that spring up in the basic scheme. That is probably the most important point.
      I hope that I have explained the background to the drafting amendments. I hope that I have helped the House to agree with the Lords amendments. I also hope that I have put them in the context of the Bill's basic philosophy. The Government see themselves eventually standing behind British Rail's obligations.
      Mr. Deputy Speaker: It may be for the convenience of the House if I say that it will be in order for the Minister or any other hon. Member to speak to the amendments. When we come to them on
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      the Order Paper, I shall put them to the House.
      Mr. Albert Booth: I thank the Parliamentary Secretary, because he has carefully outlined the assurance that was given by Lord Bellwin in the other place about the position of virtually all the railway pension schemes covered by the Bill. I refer not only to basic schemes with supplementation but to the other schemes that will have their means of funding changed under clause 44 and subsequent clauses.
      The Parliamentary Secretary was clearly well aware that his words—which will appear in Hansard tomorrow—will be studied carefully by trustees of pension schemes, by members of the board of British Railways, by members of the executive committee of the Transport Salaried Staffs Association and by the National Union of Railwaymen, ASLEF and several others who have a special interest in this subject. Although that assurance was highly qualified, it recognised that there was a difference between the pension schemes under discussion and private industrial pension schemes in general. The Parliamentary Secretary set it in the context of the special position of nationalised industries and of the way in which the Government are assumed to stand behind them, but he nevertheless sought to say that at a certain point the Government could not allow the nationalised industries to default on certain basic pension commitments.
      I do not wish to diminish the importance of statements that are made in the other place. However, it is important that a Government Minister should make the Government's position clear in this Chamber. Ultimate responsibility rests with the Minister, who is the authoritative voice of the Government. That applies to all issues, but it is particularly relevant to discussion of the Bill.
      In previous debates, particularly in Committee, Government Ministers expressed a different view. I am not complaining. There would be little point in having such long and detailed debates on legislation unless members of the Government and Opposition Members could change their minds. However, their view has changed, and we welcome that change. That is not to say that we

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      are completely satisfied with the provisions or that we would not have preferred our amendments to have been selected on Report. However, we recognise that the change has taken place and that an assurance has now been given that did not exist when the Bill left this House to go to the other place.
      10.30 pm
      I turn quickly to the amendments. I regard Lords amendment No. 64 as something of a legislative conjuring trick. I cannot complain of it that it is not literally true or that it is not legally correct, but the situation that it describes is not a commonsense one. What the amendment does is to say, in effect, that clause 48 no longer controls clause 44, or clause 44 is no longer qualified by clause 48. That is nonsense in commonsense terms because, clearly, the way in which clause 48 determines the relevant proportion must affect the amount that the Minister will have to pay out under the terms of clause 44. The cleverness of it—the conjuring trick, as I call it, without wanting to cause offence—is that the way in which the amount which the Minister pays to supplementation schemes is now changed by changing the relevant proportion, instead of the way in which it was done when the Bill left this House. Therefore, I regard it as not much more than a conjuring trick.
      The more important amendments, those to which we have tabled amendments, are Lords amendments Nos. 70 and 72. In submitting to the House the Opposition's amendment to Lords amendment No. 70, I hope to make it clear that the purpose of the amendment is to ensure that once there has been a clawing back by the Minister of the surpluses in the basic pension funds which have supplementation schemes, for the purpose of reducing the amount which the Government pay to supplementation schemes, that should happen no more. In simple terms, that is the effect of Lords amendment No. 70.
      Without the carrying of Lords amendment No. 70, at any time during the operation of this legislation when a surplus occurred in a basic pension scheme there could be a further clawback. The ultimate injustice of it is that this is a ratchet process. There can always be a clawing back whenever a surplus occurs, but there is no provision in the Bill for
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      a reduction ever to be made in the clawback, for a change ever to be made in the relevant proportion reducing that in order that the basic pension scheme has to contribute less towards the supplementation. That is the issue of our amendment to Lords amendment No. 70.
      Apart from what I call the basic injustice of the matter, I want to put to the House a limited number of further but important justifications of our amendment. The first of these is that it is illogical, unfair and unbalanced to say that in respect of the pension schemes covered by the Bill in which the Government contribution is determined by the unfunded and funded proportion the determination is made once and for all, never to be changed again, when, in clear contradistinction to that, in the case of the basic schemes it can be changed again and again. What possible justification can there be for these dual standards, for treating one sort of railway pension scheme in one way, as something to be determined once and for all, and treating another type of railway pension scheme in an entirely different way, making it subject to a ratchet which enables the Government to take more and more from any basic surplus?
      Surely it must be the case that when the actuary comes to make his assessment of what is the funded proportion and what is the pay-as-you-go proportion, in the case of schemes other than the basics with supplementaries he will face exactly the same problems of judgment and estimation as faced the actuary dealing with the basic pension scheme. He will have just as much difficulty or ease in forecasting how inflation will move for the next 5, 10, 15 or 20 years, however long the scheme will run or have pensioners. He will have just as much difficulty or ease in predicting how the investments will perform and in estimating what the death rate of the pensioners will be. Those are all the factors which determine whether he has the right judgment of whether the schemes are properly funded. Yet the Government, in putting forward the Bill, suggest that in one case it should be done once and for all and that in the other case it should be opened again and again.
      I argue, on Lords amendment No. 70, that there is a dual standard. There is almost a duplicity in the approach to the

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      schemes. I argue, in addition, that in the 1974 Act—the Minister is aware of this, having studied the issue carefully—there could be no possibility of clawing back any surpluses which arose after 31 December 1979. Whatever merits or demerits the 1974 Act might have had, it established by 31 December 1979 the final calculations which had been made under that Act of the amount that the Government would put towards the funding.
      Mr. Harry Cowans: Does my right hon. Friend accept that the dual standard is such that if, by prudent management and good housekeeping, a pension fund makes a surplus, that money will not be passed back to the participants of the scheme? If, on the other hand, the pension scheme falls into difficulty, no help will be forthcoming. Under the Government's scheme, anybody who exercises prudent management and thrift for the benefit of the members will be penalised. However, if the scheme falls into deficit, the Government will ignore that as well.
      Mr. Booth: With great respect to my hon. Friend, who speaks with considerable concern and knowledge on this matter, I suggest that the situation is somewhat worse than he described in his intervention. He is right in saying that the beneficiaries of a basic pension scheme cannot fully benefit from good management of the scheme to the extent that a surplus is produced, because the Government can use part of it to make them pay towards supplementation.
      The point that my hon. Friend did not touch upon, which I say makes the situation worse, is this. If the managers fail to manage the scheme well and do not ensure that they meet their obligation to contribute towards supplementation, by way in which the Bill determines the relevant proportion the members of the scheme will suffer. The British Railways Board will be put into a difficult financial position. Either way, the members will lose. Therefore, the situation is worse than my hon. Friend described.
      There is a strong argument in favour of Lords amendment No. 70. Under the 1974 Act, there could have been no possibility of clawing back surpluses which arose after 31 December 1979. Our
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      amendment would preserve the principle of the 1974 Act in that respect. The Bill would enable something to take place to the disadvantage of the funds which could not have taken place under the 1974 Act.
      Our amendment would help the Government to keep their promise. They promised, when we began discussion of the Bill, that there would be no worsening of the pensioners' position under the Bill. A clawback under the Bill that could not have existed under the 1974 Act must surely mean a worsening. We want to avoid that situation. Our amendment is, therefore, designed to help the Government to keep their promise.
      The purpose of our amendment to Lords amendment No. 72 is to ensure that any reviews of these basic schemes which have supplementation by the actuary take place at five-year intervals. We would prefer the even-handedness that would be achieved if the Government accepted our amendments to Lords amendment No. 70 and that if the determination is to be made with clawback it should be on a once-and-for-all basis.
      If the Government will not accept that proposal, we believe that there is merit in considering reviews at fixed five-year intervals. This would help to protect the position of the funds. In some circumstances, as I believe the Parliamentary Secretary will realise, it could assist the Government. If a review showed that the fund was running into deficit because of the original estimate and the Government were prepared to provide further support for supplementation, it would throw another obligation on the Government. That has not so far been accepted.
      If the Government do not accept our proposition in the amendments to Lords amendment No. 70, it would at least be a potential safeguard to know that following a review showing that the fund, despite the best possible management, was no longer able to cover the relevant proportion first determined, the Government would be pressed to reconsider their position.
      I do not suggest that the amendment provides a wonder solution. It is no magic formula for solving the problem that will devolve on those who run the basic and supplementary schemes, but it would create an inferior alternative to our amendments to Lords amendment No. 70 in establishing a degree of certainty about

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      the running of the scheme. It would limit for five years the number of variations and difficulties and would create a certain knowledge that a review would take place which, I believe, could lead only to one of two situations—the further clawback, if the Bill is not changed or, as I am certain will be the case, a call upon the Government from those who run the scheme and many more concerned about these railway pension schemes to change their position on a most unfair ratchet situation that could only worsen the situation of those who run basic funds and make no contribution to solving considerable problems.
      Mr. Kenneth Clarke: I shall not go at great length into what I said on the important matter of the position of the Government, the board and the pensioners, who look to someone to make sure that their pensions are paid. I do not believe that what I said in Committee amounted to a great change. I may have been expressing an understanding that I believed to be the existing practice, that there was no real danger of a nationalised industry defaulting on the debts of others that were of any significance. That might have led to me being a little brusque with the Committee at times. What I have said this evening is the Government's considered view. It is not a personal opinion. I was more explicit than the previous Government were on the same subject.
      10.45 p.m.
      All that the White Paper on nationalised industries, produced by the last Labour Government, said about the key issue of how the nationalised industries trade was:
      "The nationalised industries are free from the private sector discipline of bankruptcy."
      Perhaps that is really a terse way of saying what I have said this evening. I hope that I have reassured hon. Members about the risk of pensioners having their pensions entitlement reduced.
      The right hon. Member for Barrow-in-Furness (Mr. Booth) described Lords amendment No. 64 as something of a conjuring trick. It is not. It is a paving amendment for a later amendment that alters the way in which we calculate the extent of the Government's clawback. The method that we have chosen can if necessary be debated in detail on later amendments.
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      The right hon. Member explained what is behind the amendments to Lords amendment No. 70 by expressing his concern about the way in which the Government's clawback will continue steady as long as surpluses emerge and are distributed. He saw in that some unfairness when contrasted with the way in which actuarial assumptions which lay behind the division between the funded and unfunded proportion of funds were fixed at one point once for all. Such a comparison is not fair. We are fixing once and for all the proportion of surpluses that the Government will be entitled to claw back. A later amendment states exactly what that figure should be.
      The surpluses that are likely to emerge under the basic schemes will emerge not suddenly but steadily, year on year. The basic schemes have their obligations fixed in money terms. In times of inflation, at whatever level they are fixed, surpluses will steadily emerge. Part should be recovered by the taxpayer to protect against the same inflation pensioners who are members of the basic schemes.
      The actuaries managing the schemes will not suddenly make distributions. Each year they will make a prudent calculation of what must be kept in the fund for contingencies and distribute that which they are free to distribute. We are determining that part of that should go to reimburse the taxpayer and part to improve the basic schemes. A fixed proportion will go to the taxpayer through the clawback arrangements in clause 48.
      The clawback is a fair arrangement. The right hon. Member suggested that it represented a deterioration in the position in the 1974 Act, because then the Government did not have the ability to claw back any part of the surpluses. That is not right. It was a possibility. The supplementation schemes have the responsibility for inflation-proofing. The basic schemes have obligations only in money terms and are therefore likely to produce surpluses.
      Even without the Act, British Rail and its pension fund managers would not accept the supplementation fund carrying all the cost of inflation when the basic schemes produced large surpluses to improve basic benefits.
      I remind the House that the British Railways Board introduced a Private Bill

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      towards the end of the last Parliament which, among other things, was concerned with basic schemes and supplementation schemes.
      Essentially, the board's Bill would have enabled it to transfer the responsibility for paying future supplementation, together with the associated funding debt created under the Railways Act 1974, from the BR 1974 fund—the British Rail supplementation scheme—to any basic scheme. Behind that Private Bill the board obviously had in mind the possibility of future surpluses in basic schemes, and it was dealing with precisely the point that we are dealing with.
      It was obviously only right that as they threw up surpluses those basic schemes should take on some of the obligations of inflation-proofing, which itself is creating those surpluses.
      On his final point, the right hon Gentleman was trying to get back to what I know has been a fundamental policy difference between us throughout, about the reappraisal of actuarial valuations of any kind under these pension fund arrangements. I shall not rehearse the arguments again. I regret to say that we have never really come to agreement. I realise that. An amendment was moved in another place which was not carried, so, with respect, we cannot debate the issue again here.
      If it pleases the Opposition, I realise that they remain unrepentant, but it is not within the scope of these amendments. Right hon. and hon. Gentlemen are as familiar with the Government's arguments as I am. The 1974 Act provided for a once-and-for-all fixed acturarial assessment, and we cannot, as part of this Bill, contemplate arrangements whereby we start improving the 1974 Act settlement at the expense of the taxpayer in order to give added guarantees to nationalised industry employees.
      There it is. That is an issue between us. I suggest that it does not arise on these amendments.
      Question put and agreed to. [Special Entry.]

    Clause 44

      PAYMENTS BY MINISTER IN RESPECT OF BR AND NFC PENSION SCHEMES
      Lords amendment: No. 65, in page 41, line 26 after "year" insert
      "which may be applied towards the payment of such of the pensions, increases and expenses payable under or incurred in connection with the scheme as correspond to the obligations."
      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a drafting and technical amendment to pick up an inadvertent error. The amendment is to the advantage of pension funds, particularly the NFC 1978 pension fund. The amendment secures that not only the historic income, to use the jargon of the Bill, of a British Rail or National Freight Corporation scheme is taken into account in determining the Minister's payments in respect of the historic liabilities.
      A scheme may also have non-historic liabilities, assets and income. The amendment secures that the non-historic income is left out of account because, as is obviously proper, it stands to be used to meet the non-historic liabilities. The National Freight Corporation fund in particular has some continuing income being paid by people in service at the moment for their own pensions obligations. It would not be right for the Government to get the benefit of that to reduce their obligation towards historic pension obligations.
      Question put and agreed to.

    Clause 45

      MEANING OF "THE RELEVANT PENSION OBLIGATIONS".
      Lords amendment: No. 66, in page 42, line 20, after second "of" insert
      " or sums representing accrued rights in respect of".
      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Richard Crawshaw): With this we may take Lords amendments Nos. 67, 68, 78 and 82.
      Mr. Clarke: These amendments are concerned with the problem of so-called

      905
      transfer values, which, as the House will know, arise when someone transfers from one employment to another. It is possible to carry pension entitlements from one employment to the next with a lump sum payment being made by the fund managers of the first employer's pension fund to the fund managers of the second employer's pension fund in order to carry the acquired obligations from one fund to another.
      The drafting of the Bill as it left this House did not clarify all the problems that can arise in that situation. Amendments Nos. 66 and 67 arise out of an undertaking given in Committee when certain defects were pointed out in the drafting. Those amendments provide that the historical element of the transfer value paid by the British Rail or NFC pension scheme shall be treated as part of the historic pensions outgo of the scheme even though the board and the corporation were not, at the operative date, under an obligation to guarantee the payment. That means that there are certain schemes which, at the time when the historic obligations are deemed to have become historic, were not under a legal liability to make transfer payments. They have subsequently become so liable. When transfer payments are made, they reduce the Government's liability because they get rid of the emerging cost of that pension. It is right that that should be taken into account in determining the Government's future liability.
      The new clause deals with block transfers—the arrangements whereby a whole section of employees are, for some reason, transferred from one business to another. The board of the successor company might wish to allow its employees to transfer in a block to new pension schemes. The new clause provides that when that happens the old schemes will receive the same support as if the people concerned had not transferred. That follows through the policy of the Bill that we are not looking for lump sum capital payments suddenly to present themselves to the taxpayer but we seek to deal with the matter on an emerging cost basis.
      The arrangements are complementary to each other. In the case of individual transfers or transfers to other employers,
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      the amendments to clause 45 provide for support for the transfer of payment.
      Question put and agreed to.
      Lords amendments Nos. 67 to 69 agreed to. [Some with Special Entry.]

    Clause 48

      REDUCTION OF PAYMENTS IN RESPECT OF CERTAIN SUPPLEMENTARY SCHEMES
      Lords amendment: No. 70, in page 45, leave out lines 34 to 44 and insert—
      "(2) If the actuary to the basic scheme certifies that the assets of that scheme exceed its liabilities, then, in relation to the supplementation scheme, any obligation arising after the date of the actuary's certificate to pay or secure the payment of any increases of pensions payable under the basic scheme or, if less, the relevant proportion of any such increases shall not be regarded as a relevant pension obligation for the purposes of any determination under section 47(1)."
      Read a Second time.
      Mr. Deputy Speaker: Does the right hon. Member for Barrow-in-Furness (Mr. Booth) wish to move his amendment?
      Mr. Booth: Yes, Mr. Deputy Speaker.
      Amendment proposed to the Lords amendment, after 'liabilities', insert
      'such certification being given before the date of the Minister's determination under section 46(1)(b)'.—[Mr. Booth.]
      Question, That the amendment to the Lords amendment be made, put and negatived.
      Lords amendment agreed to.
      Lords amendments Nos. 71 to 73 agreed to. [Some with Special Entry.]
      Lords amendment: No. 75, in page 46, line 3, leave out "the basic" and insert "that".
      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may take Lords amendment No. 76 and the amendment to Lords amendment No. 76.
      Mr. Clarke: The best way to open a debate—I shall reserve other matters for my reply, if one is called for—is to explain how we envisage the clause being administered. It is an extremely complicated clause. It is the so-called surpluses

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      clause, dealing with the position where a basic scheme keeps producing surpluses, whereas the supplementation scheme keeps making inflation-proofed payments to members of the basic scheme.
      The Opposition amendment is con-concerned with the problem of what will happen if the arrangements provided for by these amendments, whereby the Government claw back a certain proportion of basic scheme surpluses, result in a situation in which, because the actuarial assumptions are wrong and, in practice, things happen in a different way, a basic scheme that has been in surplus, and has therefore been reimbursing the taxpayer and making some modest improvements in his pension entitlements, suddenly goes into deficit, with the apparent result that the basic scheme entitlements are threatened. The fears on that score are much exaggerated, but I entirely appreciate that they are felt deeply by many people concerned with the interests of the railwaymen and the employees of the National Freight Corporation, who are merged with the scheme.
      11 pm
      Let me deal with the first point, concerning the distribution of surpluses. It will be for the actuary of the basic schemes to advise on how much surplus it is safe to distribute. If he thinks that a contingency reserve should be held back he can use a basis of valuation on which only the amount that it is safe to distribute appears below the line as a surplus.
      We shall not be seeking to impose any particular basis of valuation. All that we are seeking is a reduction in the taxpayers' payments to the supplementation scheme equal in value to a certain percentage of the surplus available for distribution.
      Secondly—and this is important—we are not proposing that the offset should be immediate. A surplus will not be used up at once. It is to deal with this point that we have had to extend the clause so extensively. The clause envisages that when a surplus emerges the actuaries should consider all future schemes of supplementation and decide what proportion of all future supplementation can be met from the surplus. In effect, the proportion of the surplus that is earmarked for supplemen
      908
      tation will be gradually and evenly distributed over the whole term of liabilities of the basic scheme. A small proportion of the surplus will be used to offset part of the first future schemes supplementation, a further small proportion will be used to offset part of the next scheme of supplementation and so on year by year. The surplus will not immediately be swallowed up in one bite.
      Thirdly, the clause does not require the trustees of the basic scheme to change the rules of the scheme so as to provide for increases to be paid. The Lords amendments to clause 50 give them the power to do so if they do not already have it, but they are not compelled to pay the increase. In practice, they may wish to pay increases on an annual basis. The clause operates on the Minister's payments to the supplementation scheme.
      The right hon. Member for Barrow-in-Furness (Mr. Booth) has, during debates throughout the passage of the Bill, argued a point that was again pressed very strongly in another place. That is the point on which I have just touched, which is that there could be circumstances in which a basic scheme ran into deficit with the operation of the clause. I hope that the House will welcome some considered words on that possibility, which has caused so much trouble, even at this late stage of the passage of the Bill.
      We consider, for two basic reasons, that this is most unlikely to happen. First, the actuary will have to hold back a contingency reserve when he gives a certificate. Obviously, the purpose of such a reserve is to provide protection against experience being worse than the assumption. Secondly, if the actuary made a mistake, with the measure of self-correction under the clause the main risk would be that the assumptions about inflation might be wrong. The liabilities of the basic schemes are largely fixed in money terms. If inflation were worse than the actuary assumed, the basic scheme's scheme of supplementation would certainly rise in money terms, but so would the money value of the surplus on the basic scheme, because inflation would increase the money return on the scheme's investments.
      Equally, if inflation fell the surplus might fall in money terms, but so would the money costs of supplementation. Even so, I am not prepared, certainly at

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      this stage of the Bill, to argue that such a deficit would never arise, although, as I have explained, I think that it is very unlikely.
      The right hon. Gentleman has tabled amendments to try to deal with the eventuality, because he is not satisfied that it will not arise. There will be drafting difficulties with his amendment. It is always difficult to legislate precisely for something that is difficult to foresee. I have tried to find a form of words that will meet the right hon. Gentleman's fears.
      I realise that if I argue that this is a most unlikely eventuality I am not on strong ground in saying that we need not bother to provide against it, because it will not cost much to do so. However, one enters a minefield if one tries to provide against any eventuality in precise terms. I can suggest another approach. I have to begin by qualifying what I have to say. As his amendment shows, the right hon. Member accepts that there are circumstances in which a deficit would arise which would not merit relief. I am talking only about a deficit that satisfied two conditions, which would have to apply before there was an obligation on the Government to do something about it.
      The first condition is that the deficit should have arisen because of the previous operation of the surpluses clause. The second is that it should be attributable to an incorrect estimate of the proportion of supplementation that the basic scheme could bear, and that the error should be an error due to factors outside the control of the scheme.
      If the deficit arose for another reason, for instance, because over-generous improvements in the basic benefits had been granted by a reckless or imprudent decision, it would be accepted that that did not apply, because it would not be an obligation for the Government. But in the case of a deficit that met the two conditions that I described, and where a deficit had occurred for reasons beyond anyone's control, because the actuarial assumptions had been wrong and the Government had benefited from clawback as a result of those wrong assumptions, I assure the right hon. Gentleman that the Bill would not prevent the supplementation scheme from resuming the payment of supplementation in full, or to
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      whatever extent was necessary to put matters right.
      The Bill would simply prevent the increase from being a relevant pension obligation and subject to mandatory reimbursement. However, in the circumstances that I have outlined—the faultless deficit—it would be reasonable to look for additional assistance from the Minister for the supplementation scheme. It is likely that the Government would be prepared to look favourably on such a request.
      Mr. Booth: Obviously, the Parliamentary Secretary has given an important assurance to the House. Does he accept that if the trustees of the fund were to use that 20 per cent. of the surplus which could not affect the proportion to deal with improvements it would not be held against them in determining whether there was a liability arising from the obligation to meet their increases in payment towards supplementation because of the determination of that relevant proportion that subsequently proved to be incapable of being met by the basic fund scheme?
      Mr. Clarke: The best answer to that is "Yes." However, that is outside what I said about imprudent distribution give the right hon. Gentleman the assurance that he seeks. On that basis, I shall deal briefly with the technicalities of the amendments, which are a recasting of the way in which the obligation on the Government is calculated when such circumstances arise. There is even a mathematical formula—fortunately of an elementary sort—that intrudes into one of the Lords amendments. It achieves the purpose of ensuring that the clawback to the Government is the correct amount—80 per cent. in the Bill as returned from another place.
      If any hon. Member wishes to press me on that mathematical formula I can explain it by giving examples, but I assure the House that it works. I have seen the examples, but, without some magic of mathematics which is beyond me without a close study of my brief, I cannot enlighten the House further.
      Mr. Booth: As a trained engineer, I cannot resist the reference to the mathematical formula. I have no objection to the Government legislating by way of mathematical formulae instead of the use of beautiful English prose, but I hope that

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      if they do so they will include the appropriate mathematical qualifications. If they are using a formula A+B-1/A to describe what can only operate within the limits of positive values, they should make it subject to that qualification. It would be nonsense if it were used out of that range.
      I turn to the issue on which the Parliamentary Secretary has made an important statement to the House and on which he has given what will be regarded by those who are concerned about clawback as a valuable assurance. It is one which, short of dealing with the matter in legislation, could hardly be improved upon. Therefore, I hope that I shall not be thought to be carping if I suggest that we should consider, albeit briefly, the case for stating the assurance in terms of our legislation. After all, we are legislators; that is one of the purposes for which we are elected to this House.
      The purpose of our amendment to Lords amendment No. 76 is to attempt to legislate the assurance, difficult though that is. In other words, the purpose is to provide for the Government to repay sums of money which have previously been clawed back if a pension fund which was thought to be in surplus runs into a deficit at a later date.
      I shall not enter into the argument whether this is likely or unlikely to occur. It is a matter which has been argued between us across these Benches for some time. We are clearly on record as saying that we believe that there is a considerable possibility that the actuarial estimates may be wrong in one way or the other.
      I have considerable sympathy with the Parliamentary Secretary when he says that it is difficult to draft an amendment or to draft legislation to give effect to that assurance. I press upon him only that it is exceedingly difficult to draft it bearing in mind that the Lords have altered beyond recognition the clause as it left this House and that we have had relatively little time to consider it, the Lords having finally decided the matter last Thursday and there having been a batch of about 130 amendments on Monday.
      There has been very little time in which to attempt this drafting exercise. Nevertheless, we have attempted it. I do not claim that we have produced an elegant piece of prose. I claim that it is a serious
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      and sincere attempt to put into words—we did not try an algebraic way of doing it—a legislative assurance that if the funds ran into debt by reason of the Government reducing their supplementation payments because of the way in which the relevant proportion was calculated, there would be a legal requirement to repay a just proportion. That is what we are arguing for in the amendment.
      One has only to cite a fairly simple example to show the importance of this matter. Where there was a surplus in the basic fund and 80 per cent. of that surplus was estimated by the actuary to be capable of financing 40 per cent. of the supplementation, 40 per cent. would be the relevant proportion. Suppose that the actuary's assumption about inflation turned out to be too low, or that the assumption about the interest which he was to get on the fund's investments turned out to be too high. A more likely possibility, as I see things at the moment, would be that inflation rose faster than interest rates.
      The other important factor with these relatively small funds arises where the death rate of pensioners turns out to be higher than expected. In such circumstances, it is quite likely that the fund could run into deficit and be unable to meet the relevant proportion laid upon it by the requirements of the Bill. The Government have not denied that it is a possibility, although perhaps an unlikely one. Previously when we have argued the matter they have said that if they wrote into legislation an absolute assurance that if the fund went into deficit they would alter the proportion, it would be open to the trustees to increase benefits or to reduce contributions in such a way as absolutely to ensure that the fund was run into deficit, and the relevant proportion would then be adjusted appropriately. That is a slight on those who run the funds.
      Putting that aside, we have tried, as has the Parliamentary Secretary in giving us an assurance, to guarantee that that will not happen. I think that the amendment meets that point by making it clear that the liabilities of the fund arise only if the rules on payments remain unchanged and the scheme is run properly on the lines envisaged when the relevant proportion was first determined.

      913
      11.15 pm
      The only improvements which could be paid would be from the 20 per cent. of the surplus which does not contribute any money towards the relevant proportion. In so far as those improvements improve the basic scheme, they would in some ways reduce the amount of supplementation required.
      The basic schemes to which these supplementation schemes apply bear the names of railway companies long forgotten by the average member of the public. They are probably remembered by the cognosenti and literati of railway history, I suppose. The names certainly do not appear on current railway timetables. One can find them in only three places: railway history books, pension documents and schedule 8 to the Bill. On page 72 we see names such as the Lancashire and Yorkshire Railway Pension Fund Society, the London, Brighton and South Coast Railway Pension Fund, North British Railway Insurance Society, the South Eastern and Chatham Section of the Southern Railway Enginemen and Motormen's Pension Fund Society and the Thomas Bantock & Co. Superannuation Fund.
      The decision that we make now cannot affect the past when these funds were formed, but it will affect the future, just as the Parliamentary Secretary's assurance will affect the future. In providing for that future, we would be failing in our duty if we reneged upon what are properly called historic pension rights.
      Question put and agreed to. [Special Entry.]
      Lords amendment: No. 74, in page 46, line 4, leave out "85" and insert "80".
      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Booth: I beg to move, as an amendment to the Lords amendment, to leave out '80' and insert '75'.
      The effect of the amendment would be to reduce the amount of any surplus clawed back from the Government in respect of the older pension funds from 80 per cent. to 75 per cent. The purpose of the clawback is to help to pay for cost of living increases.
      The past practice has been to claw back only about 60 per cent. Here I agree with
      914
      the Parliamentary Secretary again. I am agreeing with him rather a lot tonight. Even without this legislation, the situation would not go on in which vast surpluses in the few basic funds which could accumulate such surpluses did not contribute towards supplementation. But the figure chosen by the Government is too high for the purposes for which those funds have had to provide.
      I remind the Parliamentary Secretary that some of these pension funds provide very low pensions—some would say miserably low pensions—compared with those provided by a number of other industries. In some cases the pension funds exist for the sole purpose of paying pensions to the widows and orphans of railwaymen. The fact that some older widows are reliant on the funds is a reminder of the dangers that attached to railway work when their husbands were involved in the running and managing of our railways.
      I rely more on the views of the managers of the funds than on my own opinion, and they have complained bitterly that if the Government go ahead on the basis of an 80 per cent. clawback there will no longer be scope to increase pensions out of future surpluses that would have existed but for the Bill. They can see no compensating advantages for their pensioners under any other provisions of the Bill.
      With whatever persuasive power I may have left at the eleventh hour and fiftyfith minute of our discussion of the Bill. I urge the Minister to reconsider his proposal. It would be better to revert to 60 per cent., but it would be unrealistic to urge that on the Minister. Obviously, we should not agree on that. We want to be realistic and we must reach a compromise. At least, let us agree that we must meet, to a degree, the proper claims of those who have been at the sharp end of running the funds and have had to answer directly to the beneficiaries.
      The Government have made clear that they will not abandon what we regard as a high percentage, but, while not conceding our principle and not expecting the Government to abandon their principle, I believe that if the Government accepted our amendment they would make a practical contribution to easing the difficulties in the running of pension funds. Those who run the funds make a useful contribution to dealing with a

      915
      complex and continuing problem of providing for beneficiaries of funds created long ago in anticipation of a problem that exists now and is serious.
      Mr. Kenneth Clarke: I confirm that the Government have had in mind the position of the beneficiaries of some of the old pension funds in all our provisions. The railways that set up the funds are historic—many of them pre-1923 regrouping railway companies—and it is amazing that the obligations exist to railwaymen, their widows and dependants. In these inflationary times, their pension entitlements are important to them.
      We have debated the Government's clawback throughout the Bill. We are all agreed that the Government—that means the taxpayers—are entitled to have some clawback, for the reasons that I was labouring a little while ago. Inflation creates the obligation but it also creates earnings for the basic scheme, and that should go, in some part, to compensating the taxpayer for the inflation proofing.
      We have been searching for the right figure and, to an extent, our proposal is an arbitrary choice. I shall not rehearse the arguments, but I do not accept that 60 per cent. is the usual practice. It varies widely. The difficulty is that there is such a wide variation between pension schemes. In some cases, all the pensions are in payment and it is good fortune that inflation proofing has been provided. Such schemes are in a different situation from those in which a substantial part of the membership are serving railwaymen, contributing to a scheme that is supposed to be inflation-proofed. It is somewhat hard in that case if the taxpayer takes back most of the surplus on the investments that the serving railwaymen is funding and leaves only a small proportion to inflation-proof the pension.
      We have been searching for the right figure. The Government began with a figure of 85 per cent. The figure of 80 per cent. has been inserted after the Lords amendment was moved as an Opposition amendment and was accepted by the Government in another place. That is Lords amendment No. 74 which we are now considering.
      The Opposition have canvassed various figures. There was an Opposition
      916
      amendment in this House to reduce the figure to 70 per cent. which was rejected on a Division on 25 March. We are left with 80 per cent. and 70 per cent. The right hon. Member for Barrow-in-Furness (Mr. Booth) drives a hard bargain but urges compromise in an eloquent fashion. His amendment is, in effect, an offer of settlement at a figure of 75 per cent. As it is an arbitrary figure and as we have moved slowly towards it, I am disposed to accept it. I invite the House to accept the Opposition amendment to Lords amendment No. 74.
      Mr. Frank Dobson: It would be churlish to criticise the Parliamentary Secretary, but I am a churl. Perhaps one of the reasons why I am a churl about old railway pensions is that my paternal grandfather was killed in a railway accident before the First World War and the circumstances then were such that my grandmother got nothing from the railway company following the accident. I do not have any interest to declare in this because my family was not a beneficiary.
      Both of the undertakings which the Minister has given tonight about other aspects of these pensions and this agreement to accept the reduced figure put forward by my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) are welcome. It is a pity they were not conceded or made clear earlier. My right hon. and hon. Friends and the Minister and his hon. Friends would have saved a great deal of time if that had been the case. One might say that there is almost a justification for the House of Lords as a result of this—and that is the first time I have ever thought of a justification for that place.
      Perhaps if we could send the Bill back to the Lords with this amendment and have the Lords send it back to us in about six months' time we would have reduced the clawback to nothing. That would be the one justification for the House of Lords. However, I do not think that, even then, we should preserve that archaic heap at the other end of this building—just for the sake of a minor reduction in the clawback.
      I welcome the Minister's concession on this issue. I wish that it had been made earlier in our proceedings.
      Amendment to the Lords amendment agreed to.
      Lords amendment No. 74, as amended, agreed to. [Special Entry.]
      Lords amendment No. 76 agreed to. [Special Entry.]
      Lords amendment: No. 77, in page 46, leave out lines 16 to 21 and insert—
      "(5) References in this section to the assets and liabilities of the basic scheme are references to the assets and liabilities of that scheme so far as it relates to the payment of pensions increases of which are or are likely to become payable under the supplementation scheme."
      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.
      This amendment, made in another place, discharges an undertaking that I gave in this House to my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle), who raised a particularly difficult point about the British Transport police force superannuation fund. When I replied to him then I said that there were so many different pension funds, all of which have the most extraordinary rules, that it was almost impossible for those who drafted the Bill to cover every eventuality. This fund pays increases of pension to some of its pensioners but not to others. The others receive their pension increases from the supplementation scheme.
      11.30 pm
      As I promised, the amendment provides that the clause will apply only to so much of any surplus in such a scheme as is attributable to those of the members and pensioners who stand to receive their increases from the supplementation scheme.
      I am grateful to my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle), as he has pointed out a discrepancy in the Bill that might have caused minor hardship to the fund.
      Question put and agreed to.
      Lords amendment No. 78 agreed to. [Special Entry.]

    Clause 50

      SUPPLEMENTAL PROVISIONS
      Lords amendment: No. 79, in page 47, line 19, after scheme "insert
      "or any other pension scheme established by the Board or the Corporation".
      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 80, 81 and 85.
      Mr. Clarke: All the amendments discharge the undertakings that were given in Committee. Some schemes have no power to distribute a surplus by way of pension increases. At present, they have to get powers by means of a Private Bill. That is clearly anomalous. The amendments confer the necessary powers on the trustees to change the rules.
      Question put and agreed to. [Special Entry.]
      Lords amendments Nos. 80 to 85 agreed to. [Some with Special Entry.]
      Mr. Deputy Speaker: We shall now deal with Lords amendment No. 122.
      Mr. Kenneth Clarke rose—
      Mr. Deputy Speaker: I am sorry. There is an amendment to deal with first.
      Mr. John Prescott: The amendment is concerned with issues arising out of the transference of the National Freight Corporation to the private sector. The Lords amendment takes it further than the existing provisions in clause 37 and schedule 6, which concern the rights, obligations and liabilities of assets of the National Freight Corporation. Lords amendment No. 122 allows the additional technical transition provision. We are concerned with the statutory restrictions on bodies affected by this transfer. In the brief time available to us on Monday, when we received the amendments, we tried to assess their meaning. We then tabled our amendment. On reflection, we wish to make further comments, even about the Opposition amendment.
      Unfortunately we have had to draft several amendments in haste. It is a pity that the Government did not see

      919
      sense at the beginning. In Committee we tried to obtain the very assurances that they now seek to give us. No doubt the thought that £20 million may be lost if the Bill is not completed by the end of the week has concentrated their minds wonderfully. If we had had more time we might not have tabled the amendment.
      At first sight the Lords amendment seemed to state that if a company was involved with the State-owned National Freight Corporation it would be denied the chance to cease trading with that corporation on denationalisation. Any statutory protections would not apply. However, we could not rely on the draft-man's skill to tell us what an amendment means. We had to discover which bodies were involved. We are advised that the British Transport advertising subsidiary of British Rail creates an anomaly.
      I have since talked to the advertising subsidiary and to the National Freight Corporation. It is interesting to note, as the Minister has made a number of comments about having financially to rescue nationalised industries—there is no desire to open up the argument—that both Labour and Conservative Governments have contributed to the financial difficulties of nationalised industries. It is interesting for the House to note that the British Transport advertising company is a very successful company, which makes a lot of money for its size, competes with the private sector very well, and has made a considerable contribution to the finances of British Rail.
      Advertising is a highly competitive area. It is pleasing to note that this State-owned asset is doing well. No doubt I risk the possibility that the Minister will want to sell another profitable State asset. I cannot help bearing in mind something that occurred on Thursday of last week and that shows the effect of advertising, particularly on the consumer. I had occasion to join one of the 125s to Leeds on Thursday. It was absolutely packed. There was standing room only in both first class and second class. No one could sit down. There, sneaking into the guard's van, was Jimmy Savile, the man who has encouraged so many people in this country, in the year of the train, to join trains. Perhaps we both enjoyed a pleasant con
      920
      versation in the guard's van about the effects of his advertising on people travelling on British Rail.
      It is nice to know that British Rail has problems in not being able to provide seats for all those who wish to travel by train. That is a problem of success rather than one of failure.
      In one financial year this company has contributed over £2 million to British Rail's finance. It is pleasing to note, particularly from my very biased, ideological point of view, that it is a State-owned asset.
      Nevertheless, looking back on the history of this company, one must say that certain restrictions were imposed on it by legislation immediately after the war, on the establishment of the British Transport Commission. The belief was that the public sector should not be allowed to stray over into the private sector and take profits from the legitimate area of the private sector. The Labour Government who introduced that legislation no doubt put that kind of sop in to satisfy the private interests, which were concerned about the extension of the public sector.
      In 1975 this company was given further freedom to expand in certain public sector areas and has done rather well from that expansion. Therefore, the simple point that is to be taken from this research is that, quite contrary to what we feared—that this company would be restricted in some way by the amendment—it in fact is being given more freedom. Therefore, we greatly welcome the amendment, which will allow the British Transport advertising company to deal with what I believe are long-term contracts on sites belonging to the National Freight Corporation. It will enable those contracts to continue and not be hindered by restrictions that cover the operations of the British Transport advertising company. Therefore, we support the Lords amendment, and later in the proceedings I shall ask leave to withdraw our amendment to it.
      Our amendment was designed to deal with limitations that we had wrongly interpreted. Perhaps the Parliamentary Secretary will tell us why he stops here. If he and the Government believe that all these industries or companies should compete with each other and he is prepared to make it easier for another public

      921
      sector company to compete with the private sector, why does he not lift the further restrictions that are placed on the public sector side—particularly the British Transport advertising—and that give rise to certain anomalies? For example, British Transport advertising is able to sell advertising space on buses, but only those buses of the National Bus Company, which is within the remit of its operating powers in the public sector. It is not able to sell similar advertising space on buses in, for example, town areas. This is an anomaly that will not be changed when this Bill is enacted.
      I hope that the Parliamentary Secretary, in this full thrust of competition and in the desire that the public sector should stand up to competition, will erase the anomaly that allows private firms to compete with public sector firms in the public sector area of contracts but prohibits a public sector company from going out into the private sector and competing with private sector companies.
      I hope that the Parliamentary Secretary will direct his Department to ask what are the difficulties for these public sector industries. Can they earn more money for British Rail? Can they reduce the debts of British Rail? Can they reduce the debts and claims on the Government by this action? It may be useful for the Parliamentary Secretary to address his mind to those points.
      However, we welcome the Lords amendment. In view of further considerations on it, the Opposition's amendment will be withdrawn at the appropriate time.
      Mr. Deputy Speaker: It is not moved, in other words.
      Mr. Prescott: I am sorry, Mr. Deputy Speaker—it is not moved.
      Mr. Kenneth Clarke: If the hon. Member moves the amendment, it can be withdrawn in due course, Mr. Deputy Speaker.
      Mr. Deputy Speaker: If the hon. Gentleman moves his amendment, it can be withdrawn later.
      Mr. Prescott: I am sorry, Mr. Deputy Speaker.
      I beg to move, as an amendment to the Lords amendment, in line 6, at the end to add.
      922
      'unless the statutory restriction was imposed by legislation passed subsequently to this Act and prior to the date of the transfer '.
      I intend to withdraw the amendment at the appropriate time.
      Mr. Kenneth Clarke: First, I was delighted to hear that British Rail was doing extremely good business on the journey on which the hon. Member for Kingston-upon-Hull, East (Mr. Prescott) met Jimmy Savile. No doubt the hon. Gentleman will follow up that experience with a claim for more investment by British Rail on that service in due course to accommodate the passenger demand.
      Secondly, I shall not be drawn into arguments about the late tabling of these amendments and the circumstances in which we made concessions. I am sure that this amendment was not one that was tabled on Third Reading in the House of Lords last Thursday. There are a substantial number of amendments, but their tabling goes back all the way, from the Report stage in the House of Commons. It is indeed the case, however, that the purpose of the amendment is not apparent when one looks at its terms. One has to have an explanation before one can see what on earth was thought to be behind it. Therefore, I understand why a precautionary Opposition amendment was put down about it when it was realised that it affected the position of British Transport Advertising Limited. But the Lords amendment, which I commend to the House, relieves British Transport Advertising Limited from what would otherwise be a restrictive effect of the Bill.
      The amendment has a very narrow purpose. It is to safeguard a particular contract between British Transport Advertising Limited and the National Freight Corporation. Under that contract, British Transport Advertising enters into contracts with third parties for the display of advertisements of those third parties on NFC property.
      Under the Bill as originally drafted, the British advertising company would have lost the powers to perform this contract because, as the hon. Gentleman said, it is limited by section 14 of the Transport Act 1962 to dealing with other transport boards. As the purpose of the part of the Bill to which we have now directed our attention is to denationalise the National Freight Corporation, it

      923
      would go outside that section of the Transport Act 1962, and unless we agree to the amendment British Transport Advertising could no longer legally carry out its contractual obligations to the NFC. That was never intended. The amendment therefore overrides that general limitation upon it.
      The Opposition amendment seeks to make sure that somehow we do not do anything else between now and the appointed day when the NFC becomes a limited company, but I assure the hon. Gentleman that nothing else lies behind the Lords amendment. It related only to that one contract. We had no intention of doing anything else in this field between now and the appointed day.
      I must emphasise that the effects of the amendments are of a transitory nature only, as it applies only to obligations, and so on, transferred under the Bill on the appointed day. There is no permanent widening of the powers of British Transport Advertising or any other body in a similar case. Indeed, so far as we are aware, no other body is known to be affected in such a way.
      The hon. Gentleman invited me to trail my coat about this long-standing limitation on British Transport Advertising—a highly successful business that has operated under statutory constraint for the last 18 years. The obligations probably go back further than that. This Bill has never been regarded as the vehicle for doing that. I do not think that this debate would be a very suitable vehicle for me to make detailed comments. Anything that I now say is an off-the-cuff statement. It is certainly not a considered statement of policy.
      I acknowledge that British Transport Advertising is a highly successful company. We welcome its ability to prosper commercially and in competition, potentially, with others. Of course, if we were to examine it closely to see how successful it was competitively, it might lead us to question why it needs to remain a public sector company, as it is a highly successful advertising undertaking. As I say, however, we have not looked at that as a considered item of policy, and we are dealing with a much narrower purpose tonight. I therefore commend the Lord amendment to the House.
      11.45 pm
      Mr. Prescott: In view of the Minister's statement, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 6

      SUPPLEMENTARY PROVISIONS WITH RESPECT TO TRANSFER UNDER SECTION 37
      Lords amendment No. 122 agreed to.
      Lords amendment: No. 123, in page 68, line 40, leave out "(a)".
      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may take Lords amendment No. 124.
      Mr. Clarke: These amendments are essentially technical. Again, their purpose will be by no means readily apparent. The policy of the Bill is that on the appointed day the successor Companies Act company will step into the shoes of the National Freight Corporation in every respect.
      Clause 37 and schedule 6 are intended to secure a smooth transition. As originally drafted they purported to transfer the rights, liability and obligations of the corporation to the successor company.
      The agreements under which the present nationalised corporation operates can sometimes refer to the corporation without imposing obligations or conferring rights. There are references of that kind in, for instance, the trust deed constituting the 1978 National Freight Corporation Pension Fund. To make sure that the wording of the Bill did not exclude such general agreements, the amendments widen the existing transitional provisions so as to convert, as from the appointed day, any such reference into a reference to a successor company.
      I see that it is thought an appropriate moment to give me a message about the by-election this evening. I can only say that, while I congratulate the Conservative candidate on her achievement and wish that she had done better, I very much doubt, if the House had agreed with the Lords in this particular amendment, that it would have affected the

      925
      result in Edinburgh, Central very significantly earlier this evening.
      Question put and agreed to.
      Lords amendment No. 124 agreed to.

    New Clause

      PENSION SCHEMES
      Lords amendment: No. 125, in page 69, line 37, at end insert—
      '—(1) Subject to sub-paragraph (2), the provisions of section 74 of the Transport Act 1962 (Minister's powers to make provision about pensions in the nationalised transport industry) shall have effect on and after the appointed day as if—

      (a) the expression "Board" included the successor company; and

      (b) the references in subsection (1)(a)(ii) of that section to the Commission included references to the Corporation; and

      (c) the reference in subsection (2)(a) of that section to a pension scheme in which employees of the Commission, or a subsidiary of the Commission, participated before the date there mentioned included a reference to a pension scheme in which employees of, or of a subsidiary of, the Corporation participated before the appointed day.

      (2) Except on the application of the successor company, no order shall be made under the said section 74 on or after the appointed day which has the effect of placing the successor company or a subsidiary of the successor company in any worse position; but for this purpose the successor company or a subsidiary shall not be regarded as being placed in a worse position because an order provides that any changes in a pension scheme are not to be effected without the consent of the Minister.
      (3) An order such as is mentioned in subparagraph (2) which is made without the application of the successor company shall not be invalid because in fact it does not have the effect of securing that the successor company and its subsidiaries are not placed in any worse position, but except in so far as the successor company approves the effect of the order the Minister shall as soon as may be make the necessary amending order.
      (4) Subject to sub-paragraph (6), any order under the said section 74 and any regulations to which paragraph 17 of Schedule 7 to the Transport Act 1962 applies (which continues in force certain earlier pension provisions) which—

      (a) are in force immediately before the appointed day; and

      (b) relate to the Corporation, its employees or its pensions schemes,
      shall continue in force, subject to any provision made by virtue of sub-paragraph (1), and as respects anything falling to be done on or after the appointed day shall have effect as if for any reference (however worded and whether
      926
      express or implied) to the Corporation there were substituted a reference to the successor company.

      (5) A person who on the appointed day—

      (a) ceases to be employed by the Corporation and becomes employed by the successor company; or

      (b) is employed by a company which immediately before the appointed day was a subsidiary of the Corporation but on that day becomes a subsidiary of the successor company,

      shall not thereby cease to be eligible to participate in any pension scheme in which he was a participant immediately before the appointed day.
      (6) Subject to sub-paragraph (5), a person who on or after the appointed day leaves or enters the employment of the group consisting of the successor company and its subsidiaries (in this sub-paragraph referred to as "the NFC group") shall not be eligible by virtue of any provision of an order under the said section 74 made before that day—

      (a) to participate in any of the Corporation's pension schemes by reason of any employment outside the NFC group; or

      (b) to participate in a pension scheme other than one of the Corporation's pension schemes by reason of his employment within the NFC group.

      (1) In this paragraph—

      (a)" participant", in relation to a pension scheme, means—

      (i) in relation to a scheme under which benefits are or will be receivable as of right, a person who has pension rights under the scheme (whether he has contributed or not); and

      (ii) in relation to a scheme under which benefits are not or will not be receivable as of right, a person who (whether he is referred to in the scheme as a member, as a contributor or otherwise) has contributed under the scheme and has pension rights thereunder;

      and "participate" and "eligible to participate" shall be constructed accordingly;

      (b) "pension", "pension rights" and "pension scheme" have the same meaning as in section 74 of the Transport Act 1962; and

      (c) references to the Corporation's pension schemes are to schemes established by the Corporation or in relation to which the rights, liabilities and functions of the Transport Holding Company were transferred to the Corporation by the British Transport (Pensions of Employees) (No. 1) Order 1968.

      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.

      927
      The amendment concerns pensions, which no doubt will lead the entire House to believe that I am about to get immersed in the technicalities of pension schemes again. I am glad to say that this has nothing to do with the other pension provisions in part II which I was debating with the right hon. Member for Barrow-in-Furness (Mr. Booth) a little earlier.
      This is a technical amendment, which inserts transitional provisions to secure that the change of the National Freight Corporation into a denationalised successor Companies Act company has no untoward consequences on the pensions front. The amendment is necessary because the problem that one has to sort out is the criss-crossing of pension scheme membership between British Rail and National Freight Corporation schemes. I do not have to rehearse the history, but there has been a general interchangeability between those companies. Particular businesses have gone backwards and forwards. People have retained their pension rights.
      The result is that some British Rail employees are members of National Freight Corporation pension schemes and some National Freight Corporation employees are members of British Rail pension schemes. What we are aiming to do is not to disrupt those who have gone through that process and are in their present pension funds. We have tried to make sure that the criss-crossing does not continue in the future, as it will not be appropriate for it to continue once the National Freight Corporation becomes a private sector Companies Act company.
      The amendment also provides for a limited order—making power to continue in elation to the successor company schemes in case that is needed to sort out any complications that might still arise after the transition.
      Mr. Prescott: Again, this is a very complicated area of pensions, into which I venture for the first time. I do not intend to show that I do not understand it. Details have been gone into this evening. Certainly, we have been pressed by the British Railways Board representatives on some of the points that the Minister made about the criss-cross pensions. He has said that he intends
      928
      to make an order to cover a number of the points. I hesitate to detail the specific areas of employees concerned. The Minister indicated some of the three categories I have in mind, especially those covered by the interavailability regulations of the British Transport (Pensions of Employees) Order 1969 applying to the National Freight Corporation and staff who belong to the BR pension schemes.
      These categories of employees and others want the Minister to ensure that all points of concern are covered in the order. The hon. and learned Gentleman did not say whether there had been any difference of opinion over interpretation of some of the pension schemes. I assume from his remarks that it is not necessary for me to spell out the categories, that he is aware of them and that he intends to cover these areas by making an order.
      I note what the Minister said about the by-election. The hon. Member for Glasgow. Shettleston (Mr. Marshall), a constant attender in Committee, could not be present today. He has sent us the result of the by-election, which is very satisfactory.
      Mr. Dobson: I do not wish to delay matters but I am perturbed by the Parliamentary Secretary's last remarks. Unlike my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), I am without the benefit of an actuary. It is almost like being without benefit of clergy in a semi-marital relationship when talking of pensions.
      I should like to have an assurance from the Minister that no one presently working for National Freight who is a member of a British Rail scheme and no one currently working for British Rail who is a member of the National Freight scheme—none of the existing pensioners or scheme members—will suffer as a result of the amendment, which I am scarcely able to follow.
      Mr. Kenneth Clarke: No one in the National Freight Corporation will have to change his pension scheme as a result of the conversion of the corporation into a private sector company. Nothing in the Bill will change the obligation of British Rail and the National Freight Corporation, soon to be the company, to reimburse each other in respect of employees in the other's pension scheme. In future,

      929
      when employees transfer to or from the National Freight Company, they will have to transfer to their new employers' pension scheme. That is only to make sure that, after the transition, it becomes like a private sector company in that respect.
      I shall bear in mind the points made by the hon. Member for Kingston-upon-Hull, East (Mr. Prescott). I do not believe that there is any difference of opinion. I think that the three basic principles I have set out are the aim of all sides. We retain this limited order-making power in case unexpected complications—only too easy in this sphere—need to be resolved by using the order-making power.
      I am glad to know that the hon. Member for Glasgow, Shettleston (Mr. Marshall) is still in touch with us. There were times during the passage of the Bill when I wished that more hon. Members were communicating only by telephone from different parts of the United Kingdom. I recall, however, some of the hon. Gentleman's valuable contributions.
      Question put and agreed to.

    Schedule 9

      REPEALS
      Lords amendments Nos. 126 and 127 agreed to.
      Lords amendment: No. 128, in page 74, line 20, column 3, leave out "138(1)(a)"insert" 138, in subsection (1)(a)".
      Mr. Kenneth Clarke: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may discuss Lords amendment No. 129.
      Mr. Clarke: The amendments are minor and consequential. I do not think that anybody will think that they are worth debating.
      Question put and agreed to.
      Lords amendments Nos. 129 to 135 agreed to.

  FISHING INDUSTRY (FLEETWOOD)
  Motion made, and Question proposed: That this House do now adjourn.—[Mr. Berry.]
  11.55 pm
  Sir Walter Clegg: I am grateful for the opportunity to bring before the House the problems of the fishing industry in the port of Fleetwood. I am particularly grateful to my hon. Friend the Minister of State for coming to the House at this late hour to reply.
  My hon. Friend has already received two delegations from the fishing industry in Fleetwood this year. I thank him for the courtesy and understanding that he has shown. The last time that my hon. Friend received a delegation from the Fleetwood Fisheries Development Committee, he spent two hours listening to the most forceful and lucid case.
  The problems are not new to the Minister. It is time that the House and the country were made aware of the crucial situation facing the port of Fleetwood. It is the largest fishing port on the West Coast. It is ideally situated to exploit the prolific fishing grounds that lie to the west, not only in time of peace but in time of war, as the last two great wars showed when vast quantities of fish were landed at Fleetwood to keep the country supplied with food.
  Fleetwood is a modern port which has done its best to cope with the loss of Icelandic fishing grounds. When that happened, the interests at the port did not sit on their backsides. They got together to tackle the problem. Local capital and a substantial loan from the Wyre borough council, the local authority, set up new landing arrangements following the collapse of the old system in March 1979. The dock labour force was reduced. The most modern fish-landing machinery in Europe was purchased from Canada and installed in the modernised fish dock.
  At the beginning of this year, Fleetwood had reason to be confident of the future. Not only had it a highly efficient port but it had a modern and adaptable middle water fleet. The inshore fleet had increased over five years from 30 vessels to 70 vessels, mostly between 40 ft. and 80 ft. In January the middle

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  water fleet—the most modern in the country—consisted of 14 vessels of 108 ft. to 140 ft. between five years and nine years old, three vessels of 110 ft. and three between 76 ft. and 78 ft. of ultramodern design.
  The position is different now. Of the middle water fleet, 10 vessels are laid up, three have been sold and two are to conduct exploratory voyages. Only five of the vessels which we had at the beginning of the year are still fishing, and that is largely because the crews have taken a 5 per cent. cut in wages to keep them at sea.
  The inshore fleet is still fishing, but I am told that tie-ups are imminent because, with rising costs, it is hard to make a living. The port is poised on a knife-edge. It is close to collapse despite all the efforts. The collapse would be a tragedy for the port and the country.
  What has led to this tragic situation? The reason is not far to seek. It is the collapse of the price for fish at the quayside. The average return per kip in the first few months of this year compared with 1979 is £3 per kip less. The inshore fleet reports that whiting and plaice are bringing the same price or less than they did three years ago, while the middle water fleet tells me that average prices today are almost the same as those realised in 1976. These prices must be viewed against savagely rising costs. Fuel prices have increased by 95 per cent. and the cost of nets, ice and other ancillary items, landing charges, etc., have soared.
  The 10-vessel fleet of J. Marr and Sons lost £260,000 between January and March this year and other firms in the middle water sector report very heavy losses. The Fish Transport Company, which carries the fish away from Fleetwood, has shown a fall in profitability of £10,000 and a downturn of 9,100 stone of fish between 1 March and 11 June this year.
  A survey of the Marr Hewett and Ward fleet shows that between 1 March and 18 April a loss of £151,000 was incurred against Fleetwood's share of the Government subsidy of £39,000. That subsidy was intended to cover a six-month period.
  The inshore fleet is at present unprofitable, and 120 fishermen from the 10
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  ships laid up are out of work. It is estimated that about 2,300 jobs are now at stake. If the fishing side of the port collapsed, it would put at risk the viability of the British Transport Docks Board in Fleetwood.
  I have a letter from the manager of the board in which he says:
  "One general point which might be worth bringing out is the excellent spirit of cooperation between all the fishing interests in Port, and between them and ourselves as Port Authority. This spirit of co-operation is certainly not traditional in the fishing industry and I understand that it has yet to be achieved in other fishing ports. If Fleetwood is in trouble despite this, there must be external reasons."
  The manager goes on to point to a grim future. In the case of the fish docks, charges have had to be reviewed again from 1 July, only six months after the last review. Charges are being increased from 1 July by about 12 per cent., giving a total increase this year of about 28 per cent. Gross revenue for the port in 1979 was £2·4 million and net profit before tax was £6,000. This profit hides a large deficit on the fish docks and shows why it is essential that the fish docks break even. To achieve that, it is essential that laid-up trawlers are back at sea very soon. The clear implication is that the failure of the fish docks will put the whole operation of the port in peril.
  This, then, is the critical situation now being faced. Why has the quayside price of fish collapsed? The reason is not far to seek. It is the wholesale dumping in this country of heavily subsidised foreign fish, especially of frozen fish fillets for processing. That has depressed market prices.
  There is no way in the present situation in which either the middle water or the inshore fleet can get the return from cod that they would like. Urgent Government action is, therefore, required. There should be a limitation on foreign imports, especially of frozen fish fillets. At the same time, I think that until the crisis is over there should be operating subsidies and further exploratory voyages to keep our trawlers at sea.
  In the longer term we require a just solution to the common fisheries policy, and subsequent to that we need help with any further reconstruction of the fleet either from the EEC or from our own Government. After the debate, I shall

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  give my hon. Friend the Minister a long brief from the Fleetwood Fisheries Development Committee, which sets out in full the problems to which I have referred and its suggested solutions.
  I turn to another aspect of the crisis which I find especially worrying, namely, the redundancy position of the fishermen thrown out of work through no fault of their own. Because of the method of payment for fishermen, they do not receive the normal redundancy pay of dockers and steel workers. Their skills are of little avail when they are ashore, jobs are difficult to find, and retraining opportunities are few. A settlement of the common fisheries policy should include adequate redundancy pay for fishermen thrown out of their jobs. These men, both in peace and in war, provide the basis of our minesweeping fleets. They deserve justice, and they should get it.
  That is the crisis facing Fleetwood, which has done its best to cope with the vast changes in the pattern of fishing. The port has modern facilities and a modern fleet. Time is running out, and help is needed now. My right hon. Friend the Prime Minister has indicated to me that there are to be crucial talks between the Minister and the fishing industry in the coming week. Unless those talks produce something positive, I am fearful about the future.
  It is inconceivable that Britain should be without an effective fishing industry. It is equally inconceivable that the country should be without its greatest port on the Western seaboard. We hate to come here rattling a begging bowl. We are asking for a fair deal for the industry so that it can make its profits out of the market. That is the industry's dearest wish, and we are not being given that chance.
  Like every fishing port, Fleetwood is a closely knit community. I went to live there 30 years ago and I have the utmost admiration for the men who make a hazardous living from fishing. It has always been a hazardous and high-risk industry. I cannot but again appeal to the Government to help us to overcome the difficulties that we have tried so very hard to overcome ourselves.
  12.8 am
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): I congratulate my hon. Friend the Member for North Fylde (Sir W. Clegg) on having secured the debate tonight. As he appreciates, I am very well aware of the problems faced by the fishing industry at the present time, not only in Fleetwood but more generally. This subject, about an important industry, affects men's lives—and not only their lives but, as my hon. Friend indicated in his closing remarks, the whole community and all the social ties that go with it. It is right that there should be an opportunity in the House for the subject to be debated in the way in which my hon. Friend has raised it.
  I thank my hon. Friend for the constructive way in which he has raised the matter. As he knows, there is a unity between my hon. Friends representing fishing constituencies and the Government in facing the problems of the industry. There is support for the industry, and the need to see it receive a proper deal, in all the different corners of the House. I acknowledge, as did my hon. Friend, the way in which the representatives from Fleetwood, when they came to see me, raised the matter, and the constructive and reasonable way in which they presented their case. I pay tribute to the leader of the delegation, Mr. Edwin Walker, not only for the way in which he led the delegation but for the leadership that he has provided in Fleetwood.
  That is a factor that I take into account in my consideration of the problems that face us at the present time.
  I ask my hon. Friend to convey to those he represents at Fleetwood my gratitude for the way in which they have presented their case on the two occasions on which I have met them. Equally, I am in no doubt about the seriousness that my hon. Friend attaches to the problems in the port. If there is an opportunity to help I want to do all I can.
  I share my hon. Friend's admiration for the way in which Fleetwood has, by self-help enjoyed a certain recovery over the past year or so. I can understand the frustration and even despair felt there at the resurgence of difficulties. Fleetwood is important both for its deep-sea connections and its inshore industry. There is a good co-operative effort between the two sectors, combining with onshore interests.

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  The problems affecting Fleetwood have afflicted the fishing fleet generally The deep-sea fleet has encountered considerable problems through the lost opportunities resulting from the extension of limits to 200 miles. Those problems had, to some extent, been offset by the relative prosperity of the inshore fleet, at least until recently, when its fortunes took a downturn as well. That has highlighted the stark financial position of the industry.
  The prime concern in recent months has been about fish prices. Until the latter part of last year prices were keeping pace with inflation. Fishermen, it is true, were suffering a decline in income in real terms, but at least prices were keeping pace with the increase in costs. There has been a dramatic change since December, however. Costs, particularly fuel costs, have continued to rise. The price of oil affects more than just fuel, however, showing itself also in the cost of gear and much else in the industry. Cost inflation has therefore been running at a higher rate in the fishing industry than in many other industries. In addition, prices, instead of keeping pace with cost inflation, have declined, as I was able to confirm from an examination I undertook in preparation for the debate.
  The decline has continued throughout the earlier part of the year, particularly for cod and haddock. In recent weeks, however, prices have firmed up slightly, particularly for saithe, although I lay no great stress on that. I hope that what little improvement there has been will continue. All the fishermen to whom I have spoken do not want to work on subsidies; they want a proper return from the market.
  I accept that the risk of collapse seems to be looming fairly large. I am under no illusion about the meaning of that for the fishing industry generally, and for Fleetwood and its community in particular. In his analysis of the position, my hon. Friend is right in saying that imports have been the most important single factor in lowering prices in the fishing industry. There are a number of reasons for that. My hon. Friend mentioned the dumping of fish. That is easier said than it is to substantiate. We have not been able to substantiate that dumping, in the technical sense of the
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  word, has taken place. Neither has the industry.
  There is concern that the fishing industries of other countries are in receipt of greater subsidies, resulting in lower prices. But we must be careful, because we, too, give subsidies to our fishing industry. We introduced a temporary six-month £3 million subsidy in April, and the annual subsidy for 1980–81 is just over £23 million.
  It is difficult to make comparisons between different countries, and sometimes it is difficult to obtain information about what other countries are doing. Countries such as Germany, which is sometimes held up as an example of a country that is more generous to its fishing industry, do not subsidise their industries to the extent that Britain does. But there is real concern when subsidies are granted in areas that our fishermen feel are particularly helpful in respect of operating costs.
  The regional subsidy that the French Government give towards fuel costs is one about which our industry feels very sore. We are trying to bring the question of subsidies up to date, and I shall inform my hon. Friend of the results of the survey that is being conducted by our embassies in Europe. But we must be careful not to over-emphasise the point, because we also give subsidies.
  The strength of sterling also affects the fishing industry, and it is probably the biggest single factor affecting the quantity of fish coming into the country at present prices. We are anxious to do what we can to help and, in a limited way, we have already given help in one area. As we announced in May, we negotiated within the Community an adjustment in the reference price for fish, which has the effect of raising the tariffs on imported frozen fish from third countries. We are currently negotiating with the Commission on the restoration to their former level of certain tariffs that were reduced a year ago in order to help our processors, who were having difficulty in obtaining supplies. I hope that by the beginning of July we shall know precisely where we stand.
  I have mentioned two areas, but I should like to refer to a third area that indicates our understanding of the position on imports. As my hon. Friend knows, at the recent Fisheries Council meeting 10 days ago in Luxembourg there

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  was some discussion of a deal with Canada. It involved certain opportunities for deep-sea fishing. We would have had our share, although not to such a great extent as others, because we have not traditionally fished the Canadian waters in the way that the German fleet has done.
  In return for those opportunities for our deep-sea fleet, we would have had to take increased imports of cod, in particular, from Canada. That is something that we have resisted. In this we have had support from the Danish and Irish Governments. We believed that it was not a good deal. To allow extra imports to come in when we already had a weak market because of the strong pound would not have been sensible, and would not have helped our industry at the present time.
  I hope that I have been able to indicate to my hon. Friend that the Government have taken action in those three areas. The aid has been of a somewhat limited nature, but we have shown concern about what can be done. I have tried not to over-emphasise the effect of the action on the economics of the industry or on the catching side. I have not tried to pretend that it has been able to change a difficult position into a good one, but it has contributed to a certain extent.
  I viewed with certain concern statements made earlier this week by some of the representatives of our processing industry, criticising the increase in tariffs. I regarded those statements with a certain amount of sorrow, for two reasons. The first is that what we are doing is not so dramatic as to have a great effect on costs or on the availability of supply to our processors. The second is that when, two years ago, the processors were going through a difficult time and the catching industry, generally speaking, was in a very much more prosperous state, the Government of the day rightly took action to help the processing industry. I am a little sad to see that when it sees the position being restored to what it was before the action was taken to help it, the processing industry should react in the way that it has.
  The fishing industry is a complete industry, from the catching side, the merchants and the ports to the processors. I am a little unhappy to see this kind of split of interests in our food industry, because it is most important
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  that we should all work together for the future of the industry.
  I turn now more specifically to the action that we have taken. As my hon. Friend knows and has freely acknowledged, at the beginning of April we gave £2 million to the fish producers' organisations to help them in the various schemes that they devised. We also gave the industry fl million to help the exploratory voyages. We have financed 63 exploratory voyages, enabling more voyages to be undertaken than would otherwise have been possible.
  We have shown quite clearly that we were prepared to act when the industry was in difficulty. We were prepared to devote to it sums of public money at a time when, as my hon. Friend knows, finance to help industry in one way or another was not exactly freely available. It demonstrates our real concern for the industry that we were prepared as a Government to do that.
  We freely acknowledge that the position has not improved dramatically in the industry—if, indeed, it has improved at all—since we introduced the aid scheme at the beginning of April. At the beginning of May, individual groups came to see us. As my hon. Friend knows, I met a delegation from Fleetwood. We have shown, therefore, that as a Government we are prepared to reconsider the position. We said at the beginning of May that we would meet the industry in early July. We felt that that was a sensible date—a midway point in the six months' aid scheme. We would then know the position reached in regard to import tariffs. We felt that it was a good time at which to sit down with the industry and assess the position. We have asked the representatives of the industry to produce their figures and we shall be meeting them on 3 July.
  At the meeting next week we shall meet the representatives of the industry. We have their submissions about the financial state of the industry. We shall not be able to make immediate decisions. The purpose of the meeting on 3 July—the industry is also clear on this point—is simply to assess the position. My right hon. Friend the Minister and also my right hon. Friend the Secretary of State for Scotland and the other Fisheries Ministers will therefore consider as quickly as possible the case that has

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  been put before us. We shall consider it with our other colleagues and then come back to the industry with our reaction to the case put to us.
  My hon. Friend kows what we have already done in regard to tariffs and the temporary aid scheme and what we propose to do about reassessing the position towards the end of next week. In this way we believe that we have demonstrated that as a Government we are concerned to have a proper fishing industry and to deal with the specific problems affecting ports such as Fleetwood.
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  I have not mentioned the common fisheries policy. That is another area of vital importance for the future of the fishing industry, and we hope to be able to deal with it urgently and constructively.
  The Question having been proposed after Ten o'clock on Thursday evening, and the debate having continued for hall an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-five minutes past Twelve o'clock.