HC Deb 12 May 1980 vol 984 cc973-1011

Question again proposed, That the Bill be now read a Second time.

Mr. Huckfield

I was trying to convey to the House the sense of urgency and the belief, as I am sure the Minister will agree, that the distinction between present contracts and future contracts is not clear. The impression has been given that many of my constituents need have no worry. Until the legal situation is clarified about what constitutes a breach of contract, I believe that my constituents have every reason to be worried. The House is talking about the possible threat ultimately to 19,000 jobs in the whole of Talbot United Kingdom. We could be talking about the ultimate threat to about 100,000 jobs in component suppliers and distribution. It is a figure of that magnitude.

There is nothing in the Bill about compensation for those affected. I hope that the Minister will refer to the matter.

Mr. Dalyell

Does my hon. Friend accept that much of what he says about Talbot also goes for Leyland vehicles, which has a major factory at Bathgate, and also for Massey-Ferguson?

Mr. Huckfield

My hon. Friend is right. Massey-Ferguson is affected. It also affects my constituents in Coventry. Leyland vehicles is affected. That affects both his constituents and mine, and many others. The more one studies the implications of the Bill, the more worried one becomes.

Mr. Bowen Wells (Hertford and Stevenage)


Mr. Huckfield

I shall not give way to the hon. Gentleman. He does not have a constituency interest, unlike many of my hon. Friends, who are desperately trying to catch your eye, Mr. Deputy Speaker.

This is a serious international situation that calls for a long, cool, in-depth appraisal. It does not call for the kind of hasty reaction implicit in the Bill. The national executive of the Labour Party has already taken the position of opposition to economic sanctions and military intervention. It is the position I take. While there is any risk to the jobs of my constituents I cannot support the Bill. My right hon. Friend the Member for Stepney and Poplar (Mr. Shore) made a genuine and sincere speech and I am sorry that, for the reasons I have outlined, I cannot follow him into his Lobby. Anything that puts the jobs of my constituents at risk, as this Bill does, must attract my opposition as it should attract the opposition of any hon. Member in similar circumstances. My constituents fear the loss of 19,000 jobs without one hostage having been released. That is why I shall oppose the Bill.

10.16 pm
Mr. Mark Lennox-Boyd (Morecambe and Lonsdale)

I hope that the hon. Member for Nuneaton (Mr. Huckfield) will forgive me if I do not pursue the points that he raised, but we are even shorter of time now than when he commenced his speech, and not entirely through his fault.

I wish to address myself to one or two aspects that have not been considered so far. I accept the need for these sanctions. I have followed all the arguments that have been put and I do not seek to repeat them. But how are we to take the matter a stage further and present the case to the Iranian people and their Government? On the face of the matter there are grounds for serious misgivings. Clearly, sanctions would be against our economic and commercial interests. As the hon. Member for West Lothian (Mr. Dalyell), among other hon. Members, observed, any austerity that might arise for the Iranian people as a result of the imposition of sanctions will be welcomed by the Ayatollah and his followers.

Further, the economic effect of sanctions will have very little weight politically. How, therefore, in the face of these factors, should we seek to present the effect of sanctions to the Iranian Government and people? It is important to answer that question, because it may help us address our minds to the issue as we present it to the people of this country.

As my hon. Friend the Member for Epping Forest (Mr. Biggs-Davison) said, it is wrong to generalise about other religions and other people, but it is a clear and manifest fact, which can be accepted as a valid generalisation, that people in the Middle East generally—I know quite a few—and Iran in particular attach a great deal of importance to loss of face. They more than understand the humiliating loss of face that the American people and Government have suffered as a result of the taking of the hostages, and they will more than understand—whether they respect it is a different matter—the need for allies such as ourselves to stand by our friends in the United States to prevent that humiliating loss of face from going further.

In a sense, in the Bill we are supporting a gesture of defiance—one designed not to bring a regime to its knees but to demonstrate precisely where we stand in a situation such as this. The people of the Middle East and Iran are past-masters at the art of defiance and of biting off their noses to spite their faces. We are practising what they preach, doing precisely what they are capable of doing. When it seems strange to us that we do it, we must not forget that it may not seem so strange to them. In a sense, we are making out not a moral but a material case for sanctions—a case for demonstrating precisely where we stand.

The right hon. Member for Stepney and Poplar (Mr. Shore) touched upon this in his closing remarks when he suggested that we wished to appeal to those of better instinct in Iran. We seek to demonstrate that there are times when all decent people, from all over the world, oppressed by a sense of such deep outrage at events, are persuaded to do things that on the face of it are contrary to their economic immediate self-interests. They are not prepared, and we are not prepared at this time and in these circumstances, to do further business with a people who have offended our sense of what is correct and necessary in diplomatic relations.

We are not seeking to bring down a Government by some commercial weapon. What we seek to do is to extend the art of diplomacy and to give right hon. and hon. Friends in the Foreign Office—and those ambassadors and diplomats who represent us—a case to present in argument with the Iranian Government. It is for that reason that any parallel that has been drawn with the Rhodesian sanctions is inappropriate, because they were, of course, presented on the basis that they were designed to bring down a Government.

Whether sanctions will be effective or not I cannot say, but I believe that they will be much better understood by the Iranians and their Government than we care to think. I also believe that they will be considerably understood by other Governments in the Middle East, particularly by the Saudi Arabian Government. The Saudis fully understand the need to make a moral stand when one feels angry about a specific situation.

Therefore, I welcome the Bill and invite my hon. Friend the Minister of State to consider my points. I ask him to indicate how diplomatic representations, as a result of any sanctions that we impose, will be made and how we will explain our situation. I ask him to bear in mind that when one is dealing with people in a country that at present is in an irrational state, and with a people in turmoil, it is often the unusual argument that may appeal.

10.21 pm
Miss Joan Lestor (Eton and Slough)

I wish to make it perfectly clear, because I disagree profoundly with my hon. Friend the Member for Nuneaton (Mr. Huck-field), that I believe in sanctions in certain circumstances. I supported them all along in relation to Rhodesia, and I shall continue to advocate them in relation to South Africa. I would defend my stand in my constituency, even though I felt that that stand might undermine some of its economic interests.

Having said that, I must also say that what we are dealing with tonight is a new and unusual situation. It may well be, as time progresses, that if we handle it wrongly the situation will not be unique as it perhaps now is in relation to the hostages. For that reason, I believe that it is important that nobody should be too dogmatic. We should weigh up carefully what we are doing.

I listened to the Minister's opening speech. Were I an Iranian, I would not be convinced that we were particularly serious about what we were doing. Were I an American, I would not be convinced that our great Alliance and the fellow feeling that we have for America were particularly strong. I thought that the Minister's speech was rather weak in both respects.

I listened also to the Foreign Secretary on the radio at the weekend. He spoke about the Bill being a political gesture. Gestures are dangerous weapons in politics and should be avoided.

I also believe that despite our outrage and indignation—I fully share the sense of indignation and outrage at the holding of the hostages, which is frightening and horrific—we cannot begin to understand the situation if we start the argument simply from that point. No matter what horror and outrage we and the Americans feel about the taking of the hostages, we cannot begin the argument by saying, as the Americans seem to be saying "We have been grossly and gravely wronged and, therefore, we will do A, B and C in order to redress the balance."

We must look for the beginnings of the problem and, more importantly than anything else, decide that any action that we may take tonight, or in the future, must be calculated to free the hostages. That is what the argument must be about. The issue is not one of getting our own back on Iran or of placating the feelings of America, however outraged those feelings may be. The issue is securing the release of the hostages, if possible without military action and without the shedding of blood. That should be the guide.

I do not have time to trace the history of events in Iran. However, perhaps we should try to explain why Iran has behaved as it has. I do not try to excuse or justify that behaviour. Perhaps if it were said that America and Britain were wrong about Iran it might help us to see through the light and perhaps to eat a little humble pie.

I want to avoid bloodshed, I want the hostages to be free and I want the possibility of such a weapon to be removed from future use. I ask myself what the forces in Iran want. They want the return of the Shah and of some of the assets that left the country with the Shah. Above all, they want recognition of past responsibilities and an acceptance of the role that America has played in Iran's sad history. We should conduct the argument in the context of what has happened in the last 20 years—the involvement of America in putting the Shah back in control and undermining a more democratic Government. If there were an acceptance of the role played by America and, to some extent, by Britain and the way in which we dismissed the horrors that took place there for our own economic interests, it should be possible to talk to Iran and to have some effect.

The way in which we are approaching the problem will convince no one that we are serious. Our approach will not persuade the forces in control in Iran to change their tactics. It is likely to make them feel more outraged and want to dig their heels in. Those in control will probably say "We shall stand alone and you do what you can to us." If we recognise the role of America and Britain in Iran in the past 15 or 20 years, we may unearth the sense of outrage and indignation that the forces in Iran feel towards America and Britain.

When the Government said that they would introduce a Bill to provide sanctions, we were told, in good faith, that it would be necessary if diplomatic measures failed. We were told that the Government wanted no part of military action and that President Carter was anxious for us to join him in his policy. Yet President Carter was planning a rescue attempt. There is a thin line between that and military action. I put it no stronger.

The Lord Privy Seal said that we knew only of the possibility of a rescue attempt. We had no idea of the timing. I accept what he said. However, President Carter knew. To him, sanctions were not an alternative to a rescue attempt.

I am particularly interested and sensitive to the issue because I was a Minister in the Foreign Office when the Diego Garcia base was under discussion. There is now a block on the question whether that base was used in the rescue attempt. That worries me because, as I understand it, the permission of both allies must be forthcoming before the base can be used. If our permission was given, the Government have not been frank with the House. If it was not given and America used the base without asking our permission, that has sad and worrying implications for the use of any other bases that may be jointly shared in this country or in any other part of the world.

If the base was not used—and the report has been neither confirmed nor denied—it would have been more sensible for the Government to tell the House that it was not used and to clear up that area of doubt, which has ugly and dangerous implications for us all until we know the answer.

As I have said, I do not believe that the Bill, if it is intended that the sanctions should work, is strong enough to make an impression. I do not believe that it is serious. Perhaps the Government in America should discuss the possibility, along the lines that I have sketched, of accepting at least some responsibility for the feelings of the Iranians at this time, in such a delicate position. They should involve another Government who are friendly but neutral—possibly Switzerland—who could begin to negotiate along diplomatic lines for the release of the hostages. Without bringing in some other dimension in that way, we are stuck in the present position. I do not see the Bill making any change in that position.

10.32 pm
Mr. William Shelton (Streatham)

I have no doubt that we must support the Bill this evening, for two important reasons—first, the impact of the Bill within Iran and, secondly, the impact of the Bill upon our relations with the United States. On the question of Iran, I am influenced by my personal experiences last year. When the revolution ended in January last year, I was running a company that was owed a considerable amount of money by an Iranian Government organisation. I visited Iran frequently—I was there in June and July of last year The organisation listened to me, but I received no money at all. It was not until I took the sanction of legal action that I received the money, within two or three weeks.

I followed with great interest the remarks of my hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd). I thought that his speech was admirable both in content and in duration, and I agree entirely with what he said about the moral aspect, but I do not think that the House should underestimate the importance of the prospect of economic sanctions against Iran. We accept that sanctions take time to work, if they work at all. Nevertheless—I know them as other hon. Members know them—the Iranians will believe that sanctions will have an impact on them as time goes on, provided that all the Western countries work in unison. Consequently, I believe that sanctions are more likely to help than to hinder in the release of the hostages.

We understand that the foreign Minister, Mr. Qotbzadeh, is a moderate man who wished to have the hostages released and who probably still wishes them to be released. We know also that they will be released if the Ayatollah says that they should be released.

Many hon. Members said that the position in Iran was chaotic, and it is by our standards, but I suspect that if one went to Iran today, although I have not been there for some months, one would find that life was continuing more or less as normal for most people. I suspect that the Sheraton is still open, although probably only on four floors instead of 12. We know that power resides with the Ayatollah Khomeini. Hon. Members may laugh but if the luxury hotels are running probably the Government are running also. That is my experience of that country. There is no doubt that if the Ayatollah Khomeini says that the hostages should be released, they will be released.

Why should Iran be concerned about the prospect of the impact of sanctions? I should like to remind the House of something that I have heard in almost every speech—the fact that Iran has things of considerably more moment on its mind. I refer to the problems associated with Iraq. I remind the House that the Deputy Premier of Iraq, Mr. Tarek Aziz, survived an assassination attempt by an Iranian in April and that the Iranians did not deny that they had been involved. There has also been, more recently, the attempted assassination of Mr. Qotbzadeh in Dubai. Again the Iraqis did not deny that they were involved.

We do not know whether Iraqis were involved in the siege at Princes Gate. We think that they probably were. The Iranians certainly think that they were. I would also point out that Mr. Qotbzadeh, when in the Middle East, stated that all the Arab lands were originally Iranian. Six months ago, I would have said that war between those two countries was extremely unlikely. Today, I think that it is drawing far closer than I would have thought possible. If there is war between those countries, I suppose one would expect the Iraqis to go for Khuzistan. However, The Economist, for what that is worth, thinks that they will go for the islands in the Straits of Hormuz. Either way, I am quite certain that the unity of Iran weighs far more strongly with the Government of Iran—and there is a Government and authority there—than the maintenance of the hostages in the houses, wherever they may be. There is no doubt about that in my mind.

If there is war with Iraq, there will be problems with the Kurds, the Baluchis and the Turkomans, who, I believe, are Sunni Muslims and not Shia Muslims. Therefore, how can one think that the prospect of half a dozen Western Governments imposing sanctions on Iran will not weigh with those whose first priority must be the maintenance of their country?

The second aspect of deep importance is our relationship with the United States. Many of my hon. Friends have said how much we owe to the Alliance. I believe that to be true. I have not been to America recently, but friends who have tell me that it is not just a matter of the politicians in Washington feeling deeply; it is a matter of the people in the streets—in the Mid-West, the South and the far West—feeling deeply. I am quite convinced that if this House rejects the Bill it will cause a wave of isolationism throughout the United States, which may have no major impact but which nevertheless could well be damaging to us. It must be remembered that we rely on the United States for our protection, and have done so for the last 20 or 30 years. We cannot burke that fact. I wish it were not so, but it is.

I quote The Times leader of today, which said: The time is ripe for a radical review of strategy within the Alliance. But for that to be possible we have to show that the Alliance still exists". Therefore, we must pass this legislation.

10.39 pm
Mr. Roy Hughes (Newport)

Every hon. Member certainly wishes for the early release of the hostages. I am sure that those feelings are manifested throughout the country at the present time. Certainly, I was one of the original signatories to the letter that my hon. Friend the Member for Harlow (Mr. Newens) sent to the Iranian President calling for the release of the hostages. Nevertheless, I profoundly disagree with the provisions in the Bill.

I feel that fresh diplomatic initiatives are needed. Perhaps a group of Muslim countries could agree to intercede and prevail upon the Iranian authorities to achieve a breakthrough in order to secure the release of the hostages. As has been mentioned, the procedures at the United Nations have not yet been exhausted.

One has to face the fact that in Iran America has had its fingers burnt. My right hon. Friend the Member for Stepney and Poplar (Mr. Shore) pointed out that this chapter began with the accommodation of the deposed Shah in an American hospital, but the story goes back to much earlier than that—to the time when the Mossadeq regime was ousted by the CIA and, after a military coup, the Shah was eventually restored to power. That is the basic background to the situation.

As The Observer pointed out in a very revealing article yesterday, America already has its hostages in the $8 billion of frozen assets that it holds in American banks, presumably money belonging to the Iranian people.

As has been said many times in this debate, the reality of the situation is that sanctions very rarely work. Imposing sanctions is like cutting off one's nose to spite one's face. That is particularly so when one is dealing with a country such as Iran, which has so much oil and, therefore, so much bargaining power. One thinks of the words of the late Mr. Khrushchev, the Russian leader, who once said that Iran was a rotten apple that would fall into the Soviet Union's lap. Sanctions could do just that job for the Eastern bloc countries. Sanctions could throw Iran economically and politically in that direction.

In his opening remarks, the Minister said that he did not share that point of view, but one notes already how busy are Eastern bloc countries, such as Poland and Romania, in signing oil contracts with Iran and taking advantage of the present predicament of the West.

I turn briefly to our domestic economy. I make no apologies for doing this, because until the intervention of my hon. Friend the Member for Nuneaton (Mr. Huckfield) the debate seemed to have some unreality about it. At present we need all the overseas trade that we can possibly get. Many of the Middle East oil producers need our products and our technology. What is more, they have the money to pay for those essential goods and services. If there is any doubt about that, I refer the House to Hansard and the answer to a question last Tuesday, 6 May, tabled by my hon. Friend the Member for Bury and Radcliffe (Mr. White), which illustrates quite clearly the massive extent of the trade between this country and Middle Eastern oil-producing countries.

Mr. Ivan Lawrence (Burton)

How does that argument differ from the argument that says that it is very much in our economic interests to trade with South Africa? On what side is the hon. Gentleman in that argument?

Mr. Hughes

We feel that apartheid is essentially a most evil regime. That would be my attitude to South Africa. But we are not debating South Africa tonight, and we know the United Nations attitude towards South Africa in that respect.

This debate is essentially about Iran. One notices that our trade there in 1979 was less than one-third of what it was in 1978. We have a vested interest in restoring stability to that country, and the Bill will do little to help in that respect. Diplomatic initiative is needed at the present time, not trade sanctions.

Unemployment in this country is now over 1½ million and rising. My area in South Wales is pretty devastated at this time. There are 6,000 steel redundancies pending in the Newport area. I said earlier, in my intervention during the speech of my hon. Friend the Member for Nuneaton that Newport docks relied substantially on the car trade with Iran. It is an important financial factor. If that trade were taken away, the effect would be devastating. I ask the Minister what is likely to be the future for this sort of trade if the Bill is passed, and I certainly hope that it will not be passed.

If that sort of trade is allowed to continue and a certain amount of trade—one might say "old trade"—goes ahead and new trade is forbidden, we are still dealing with the Ayatollah Khomeini, and, whatever his merits or demerits, all the world now realises that he is a very determined and stubborn old man. If we start dillydallying in this way under the provisions of the Bill, he could say "Out altogether." That is my forecast of what he is likely to say.

I draw attention to the editorial in The Times this morning. That newspaper is almost always friendly to the Government, but it was pointed out that sanctions will certainly not work quickly. It quoted Dr. Henry Kissinger as saying that he knows no Europeans who believe that sanctions will work. I believe that economic considerations cannot be put to one side. Labour Members must remember that our people essentially will be put out of work.

I was not impressed by the words of the Minister of State in his opening speech. The veil was lifted on Government policy and there was not very much underneath. I understand the gesture of friendship to the Americans, but we must appreciate that American foreign policy is very erratic at present, particularly because of the forthcoming presidential election. We, as a country, should have the courage to tell the Americans that these sanctions will not work. For those reasons and many others, I cannot support the Bill.

10.50 pm
Mr. Eldon Griffiths (Bury St. Edmunds)

This is a miserable little Bill. I do not like it one bit. But I shall support it for two reasons. First, I can see no other way open to the House of registering our abhorrence at the treatment by the Iranians of the American hostages. We have a duty to take such steps as are open to us to make clear beyond peradventure in Iran and elsewhere that what Iran has done to the American hostages is totally unacceptable. I shall support the Bill, miserable though it is, for that reason.

Secondly, I shall support the Bill, in common with the right hon. Member for Stepney and Poplar (Mr. Shore) and my hon. Friend the Minister of State, because I believe that we owe to the United States this gesture of solidarity. The first speech that I made in the House 16 years ago was on our special relationship. I have never deviated from my belief that there is no security and no prosperity for this nation, or, indeed, for Europe, unless the great republic is committed to our defence and support. I believe that the late Sir Winston Churchill's greatest achievement was not the Battle of Britain but bringing in America to help us to survive. Since that time the American people, in their own interests, perhaps, have remained loyal to the Western Alliance. For that reason above all else, I believe that it is necessary for the House not to slap in the face the American Administration and public in their hour of need.

I believe that our support for the United States should be unmistakable, but it cannot be uncritical or unqualified, and it must be reciprocated. It cannot be unqualified, because many Americans have grave doubt about the policies of their own Administration. Indeed, before long that Administration may be changed.

Secondly, I cannot provide unqualified support because the recent track record of the Carter White House and State Department has not led me to believe that their judgment—

Mr. J. Enoch Powell

On a point of order, Mr. Speaker. Is it not out of order for an hon. Member to appear in the House wearing decorations?

Mr. Speaker

It is certainly against all our customs.

Mr. Raymond Whitney (Wycombe)

I apologise to the House, Mr. Speaker.

Mr. Speaker

It is against our tradition to sit in the Chamber in that way, but I regret to say that I have seen other hon. Members come in in different styles of dress as well. It is against our custom, and it is a long tradition.

Mr. Griffiths

They do things differently in the American Congress.

I was saying that our support cannot be unqualified, first, because many Americans have reservations about the conduct of foreign policy by the present Administration and may yet change it and, secondly, because the recent track record of that Administration has demonstrated a number of failures of assessment of world affairs which I find lamentable. One need mention only Angola, the Horn of Africa or, indeed, some of the activities of Mr. Brzezinski following the invasion of Afghanistan to conclude that by no means all wisdom is to be found in the State Department or the White House in the judgment of world affairs. That being so, our support cannot be unqualified.

Secondly, I believe that our support cannot go all the way in all circumstances. I should indicate one or two possible limits where our support would have to be withheld.

We could not conduct sanctions against Iran if the cost to this country were greater than it was to Iran. We could not conduct such sanctions if the only result, as my hon. Friend fairly said, was that some of our trade with Iran went to our allies. I look forward to the Government's reply demonstrating that there will be a degree of solidarity within the European Community on this matter.

Above all, the United States owes us a measure of reciprocity. It will not be possible to explain to the British people that we should continue to support the United States in this matter if, for example, the United States continues to deny to the Royal Ulster Constabulary the pistols that it needs to carry out its duties in Northern Ireland. On that issue we can look to the United States for a measure of reciprocity. However, I believe that we owe it to the Americans to support them in their hour of need.

I ask my hon. Friend two questions about the diplomatic scene. Is he able to give an assurance that in conveying to the Government of Mr. Bani-Sadr the decision of the Government and of the House of Commons when the Bill is enacted, the British Ambassador will do his utmost to pursue the many diplomatic and unofficial overtures that have been opened between the West and the Government of Mr. Bani-Sadr in recent weeks? I do not ask my hon. Friend to speak in detail. As he rightly said, it is best that these avenues be pursued in private. However, the House is entitled to ask, as the price of passing the Bill, for an assurance that the diplomatic channels that have recently been opened, through Britain and through various persons, both official and others, in the United States are being pursued with the greatest determination.

Secondly, is my hon. Friend able to give the assurance—he came close to it in what he said about the visit to Washington of the Secretary of State for Foreign and Commonwealth Affaire—that he is now confident that between the British Government and the United States there is a ready consultative mechanism that will ensure that we are not taken by surprise should the United States undertake some further vigorous action, be it diplomatic, economic or military? It is not the price of the Alliance that we are informed in advance in detail, because in operational circumstances that may be impossible. However, the House is entitled to an assurance, as the price of the Bill, that the consultative mechanism between Washington and London is now extremely close.

10.57 pm
Mr. David Winnick (Walsall, North)

I think that the hon. Member for Streatham (Mr. Shelton) should be congratulated, because so far he has been the only hon. Member to show any enthusiasm for the Bill. The hon. Member for Bury St. Edmunds (Mr. Griffiths) described it as a miserable measure. A number of hon. Members on both sides of the Chamber said that they will support the Bill with reluctance. Clearly, they do so without much conviction.

The Minister of State introduced the Bill without conviction. We are told that he is a rising star in the Administration. He has been rehabilitated from his former employment, and I am sure that at No. 10 no mention is made of the person for whom the hon. Gentleman used to work. Although he did his duty, he did not seem able to convince the House that he really believed that it was necessary to introduce this measure.

Like everyone else in the House, I strongly deplore the holding of the hostages. They should be released. The action is wrong. As my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) said, it is certainly wrong in international law. As someone who is pleased that the Shah's regime has been abolished, I take the view that those responsible for holding the hostages have committed a serious error of judgment. They believed that it was necessary to take such action to focus attention on the evils that occurred under the Shah's regime. They wanted to bring world opinion to understand the crimes and the tortures that were carried on under the previous regime in Iran.

Understandable though, all the attention has been focused on the hostages. Nothing could do more to help the present situation and to remove much of the tension in the Middle East than ensuring the hostages' release. I hope that it is clear what I, like my hon. Friends who oppose the Bill, think about the holding of the hostages.

I am opposed to the Bill. I shall vote against it. I hope that many hon. Members on both sides of the House will do so. It is generally accepted that it is a gesture, but it is futile and will do nothing to secure the release of one single hostage. It is also harmful. My hon. Friend the Member for Nuneaton (Mr. Huckfield) pointed out the consequences for trade. Many of our constituents will be harmed.

I agree entirely with my hon. Friend the Member for Eton and Slough (Miss Lestor). I do not pretend that I am against sanctions in all circumstances. I supported sanctions against Rhodesia and I support sanctions against South Africa. However, it depends on the circumstances. Sanctions rarely work, but there are special circumstances in which they are justified. They are not justified with regard to Iran.

The Government appear to argue that it is necessary to introduce sanctions in due course, together with our EEC partners, otherwise the United States will resort to military action. It seems likely that sanctions will not work. Will the Americans then say that we have done our best but have been unsuccessful and that they have no alternative left but to use military force?

The Government's clear duty is to warn the American Administration of the dangerous and disastrous consequences if they resort to military action. The Middle East situation is difficult and delicate. However much we deplore the holding of the hostages, there is no justification for the Americans resorting to military force.

We should not lose sight of the fact that much injustice has occurred in Iran. The Government do not say much about what happened in Iran in the past 25 to 27 years. It is important for us to remember that the United States played a most dubious role in that country. Many Iranians wonder why there is so much concern over the hostages when Western Governments expressed no concern during the Shah's regime when crimes and tortures occurred. The regime was supported to the hilt by the United States.

We know that warring factions exist in Iran. There is no love lost among the Left and Right and the various religious factions. However, Iranians are united in believing that the United States played the principal role in making it possible for the Shah to return to power in 1953. Two years before that, when there was hysteria in this country over the nationalisation of oil, there was a great anti-Iranian feeling. That, too, has not been forgotten by the Iranians.

Many Iranians feel a burning sense of injustice at the wrongs done to them by the United States and many Western countries. What would be the reaction if sanctions were to bite? I agree with the right hon. Member for Down, South (Mr. Powell). If sanctions were effective, the Iranians would become more resilient in their attitude. If sanctions were to be effective, the Iranians, far from giving in, surrendering and releasing the hostages, would be far more likely to take the opposite view and become even more determined to resist the West and hold on to the hostages.

There is no alternative to diplomacy. I know how difficult it has been so far. I understand the frustration of the American Administration in using diplomacy to secure the release of the hostages, but military action will not secure their release. Sanctions will not secure their release. There is no alternative to continued diplomatic efforts at the United Nations, involving the Soviet Union, despite Afghanistan. There is no alternative to doing everything through diplomatic channels, using neutral and Muslim countries and leading Muslim personalities. At the end of the day, only diplomacy will secure the release of the hostages.

11.7 p.m.

Mr. John Bruce-Gardyne (Knutsford)

I wish to preface my remarks with something that is almost certainly out of order, Mr. Speaker. We crossed swords on the last occasion on which I was on my feet and you were in the Chair. In retrospect, I believe that whatever the merits of the argument I was wrong in my actions and I wish to apologise to you.

Mr. Speaker

I am much obliged to the hon. Member.

Mr. Bruce-Gardyne

I must congratulate the hon. Member for Walsall, North (Mr. Winnick). I do not think that I have ever heard him make a speech in this House which has not fully convinced me of the wisdom of voting in the opposite direction. But there must be an exception to every rule. I confess that tonight is that one exception.

I have listened carefully and with fascination to right hon. and hon. Members opposite who have expressed deep doubts about the effectiveness and good sense of sanctions. Yet these are the same right hon. and hon. Members who trooped through the Lobbies year after year in support of sanctions against Rhodesia. I always opposed sanctions against Rhodesia on two grounds—I believed that they were unenforceable and counter-productive. If that was true of Rhodesia, it is infinitely more true of Persia.

I join with other hon. Members who have expressed abhorrence of the way in which the American hostages have been held captive. That sort of treatment makes any form of international relations impossible and it is right that the international community should denounce and oppose such an action in every sensible way. But the question to which we must address ourselves tonight is whether the propositions involved in the Bill are sensible in the circumstances. No one has suggested that sanctions would automatically spring the hostages; that is a proposition that does not bear a moment's consideration.

I listened with great care to the Minister's arguments. Perhaps his heart was not entirely in his job, and I commend him for that. He argued that we must make an effort or forfeit all influence in the United States. The right hon. Member for Stepney and Poplar (Mr. Shore), in his effective speech, seemed to argue that we should approve the Bill because we must demonstrate our support for the law of nations.

Our friends deserve our counsel and not just our agreement to whatever they propose. If my friend suffers from toothache, tells me that he is minded to blow off his foot in order to cure the pain and says that he expects me to do likewise or else he will jump off a cliff, my taking a pistol and blowing off my foot is not necessarily the course of friendship or the right way to urge counsel upon him.

As for the proposition that we should maintain an influence, we must consider the events of the past few weeks. I believe that the United States was justified in the military action which it attempted, but we have the word of former Secretary of State Vance that at that time he was telling allied Governments that the American Government were not minded to indulge in military action and that, therefore, those Governments should proceed with sanctions. Thus we cannot seriously argue that the application of sanctions will guarantee us the benefit of the ear of the United States Government in all circumstances.

I have to ask the right hon. Member for Stepney and Poplar whether it is likely that the application of sanctions will reinforce respect and support for the law of nations. Will that respect and support be reinforced by the sight of some nations, such as ours, honouring sanctions in the letter and the spirit and others honouring them in the breach or by acrimony building up between allies over who is applying proper sanctions and who is not? I doubt it.

There have been many references to the Bill being a gesture, but we have a tradition of enforcing the laws that we pass. Other countries may treat their laws like gestures, but we do not. I fear that if we pass the Bill we shall find that those who trade from this country will be treated with a severity that applies to no others. That would not be conducive to furthering respect for the law of nations.

What will be the effect on the rest of the Muslim world of the imposition of sanctions against Iran? The Muslim world is deeply alarmed and disturbed at what has happened to the American hostages in Tehran and is not remotely sympathetic to that action, but, if the nations of Western Europe invoke trade sanctions against a country which glories in being the centre of Muslim revolution, that is not likely to be conducive to constructive support for the West in the Muslim world.

It has been suggested that we ought to give the Bill a clear passage because it is only an enabling measure.

If we vote for the Bill tonight, we shall miss the last opportunity to express our view in the House of Commons before the chopper of sanctions descends. The right hon. Member for Stepney and Poplar shakes his head, but the fact, as he knows and as the debate has confirmed, is that the order that the Government will be empowered to make will be subject only to retrospective approval in the House. If imposed when the House was in recess, it might be months before the House was given an opportunity to debate the matter.

On those grounds, I find myself, with great regret, bound to come to the conclusion that the Bill should not be given a Second Reading.

Mr. Speaker

Mrs. Gwyneth Dun-woody.

Mr. Dalyell

On a point of order, Mr. Speaker. I make not the slightest complaint that some hon. Members were not called, but I put to you that, as a number of hon. Members on both sides wished to speak, you and the Chairman of Ways and Means might see fit to allow a generous selection of amendments, particularly No. 7.

Mr. Speaker

The hon. Gentleman is one of the most ingenious people, not only in this House but in the world. I have nothing to do with the selection of amendments for the Committee stage.

11.17 pm
Mrs. Gwyneth Dunwoody (Crewe)

A number of strains common to all hon. Members have run through the debate. One of the most important, expressed strongly, has been total abhorrence of what has been going on in Iran in relation to the American hostages.

It is helpful to put on record that as a form of political persuasion the incarceration of embassy officials, fulfilling their normal duties, is a method sadly lacking in finesse. It turns against the Iranian nation the justifiable anger of America and encourages the rest of the world to look askance at a Government who do not respect even the minimum international conventions. Until the situation is resolved peaceably, it is impossible to discuss the real problem of the Iranian people and the development of their revolution. The Iranian Government must, and should, be aware, as a result of this debate, that we are concerned that the situation should be ended. They should do everything possible to resolve the situation rapidly.

One equally strong strain running through the debate has been deep unease. The Minister of State, in introducing the Bill, did it little service. He aroused in us considerable qualms about what the Government were trying to do. He said, as far as one could gather, that it was his view, whatever the lacuna and the diffi- culties in the Bill, that the real intention was to make a gesture. I must say to him frankly, as my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) stated, that this is the worst possible reason for putting forward a Bill on sanctions. It has been made clear time and again that the House of Commons is not prepared to accept such an argument.

The Bill is an enabling measure, and if the Minister gets the power to bring in orders he must do so because he believes genuinely that sanctions will work. Unlike some of my hon. Friends, I believe that, when one is seeking to apply pressure in a situation such as that which exists in Iran, one must make clear that in no circumstances will one resort to any form of force. The Opposition have made clear that we are opposed totally to any kind of military action. We want to make that clear to our American friends.

If one is to look to a form of pressure that will have some effect, one must look to economic, political or diplomatic pressure. It is vital that during the period of diplomatic talks—I hope that they will take place and that the Americans will seek to return to the Security Council, even at the risk of having their motion vetoed yet again—we shall be doing everything that we can to persuade the Iranians that they do themselves little good and very great harm in not allowing the American diplomats to leave the country. The Iranians must understand that the American diplomats were fulfilling a properly accredited role and that they should be allowed to leave a country in which they are no longer welcome.

The Government obviously have not been prepared to bring forward a proper piece of legislation. The Minister of State was cavalier in his description of the contents of the Bill. He said that clause 1(2) (a) covered future, not existing, contracts. We have an interest in this matter and we want to know what will happen when the renewal of contracts falls due. I hops that the Minister who is to reply will make it clear that he is aware of the implications of this part of the Bill.

The worrying aspect for me was that the Minister of State said, in a light and insouciant way, that subsection (2) (b) would exempt any contract with a bank or other financial institution. He gave a facile reason for that. "We are," he said, "operating existing guidelines." He did not seem prepared to make clear what those guidelines were and he gave no justification for the fact that, while some industries will suffer from sanctions, some financial institutions will escape their effect. It would be one of the most bizarre of ironies if the car workers of Coventry had to pay the price of a sanctions order while bankers with heavy involvements in Iran were to escape. I therefore ask the Government to make their intentions clear.

There has been a lot of discussion about the fact that because this is an enabling measure the House would have the right to debate individual sanctions as they arose. Unless some of the amendments that the Opposition will be moving in Committee are accepted, we shall have considerable doubts on that score because, as the Bill stands, some of the sanctions could go through without being fully debated. In the final analysis, that would serve no useful purpose.

The real difficulty about the Bill is that it seems to have been cobbled together in great haste. The implications about the visas for Iranian citizens were brushed aside by the Minister of State as being the responsibility of the Home Secretary. It seems strange to some of us that people coming here to fulfil useful roles—they are frequently members of the Commonwealth coming to work in nursing or teaching or other areas—should find it extraordinarily difficult to get permission to reside in the United Kingdom while people of other nationalities have encountered very few difficulties. We shall want to examine that closely in Committee.

If we are to entertain the idea of putting pressure of any kind on to the Iranian Government, we have the right to discuss the implications with our American colleagues. One of the difficulties foreseen by many hon. Members on both sides of the House in this situation is that when the nine Foreign Ministers came to an agreement to apply economic sanctions there was at that time a clear understanding that this would be their method of offering positive support to the Americans because it was not just an American situation. The incarceration of diplomats is something that should, and must, concern every nation. We cannot carry on inter- national affairs if we are no longer able to deal through accredited representatives. Therefore, it was not just a matter that concerned the American nation.

Nevertheless, one has to say that, after that agreement had been reached and before the sanctions Bill was brought before the House of Commons, there was the abortive attempt at rescuing the hostages. I do not criticise those who, under considerable pressure, decided that an attempt of that sort should at least be tried. I think that if we were in a similar situation we should be looking very hard at all sorts of action. I hope that we would resist any such attempt, because I believe that in this situation force is the opposite of the course of action which we would expect to produce practical results.

Mr. Leslie Spriggs (St. Helens)

Is my hon. Friend saying, regardless of the consequences for jobs and in the face of the growing unemployment figures, that even if sanctions mean increasing unemployment in this country we should support those sanctions?

Mrs. Dunwoody

I know of my hon. Friend's real concern for his constituency. I hope that he will accept that my concern is equally strong. I have made it clear that that was not what I was saying. I have said that I believe that any sanctions orders which is brought forward that will affect individual industries must be brought under a positive resolution of the House of Commons to allow us to debate it and its effect.

I return to the point that if the Americans find themselves, as they believe, at the end of the road of diplomatic persuasion they must not imagine that they can expect the same sort of support from the British if they move towards any kind of military action.

My hon. Friend the Member for Waltham Forest (Mr. Deakins) said that if we applied sanctions we would have to follow them up with a blockade. I do not believe that that is so. I believe that we must make it clear that international condemnation, diplomatic pressure and continuing talks will produce the results.

I should like to see the newly elected Iranian Parliament given the chance to consider how it would like to handle the question. I also believe that if the President of Iran was given the backing of the Ayatollah we could expect to see a far more sensible and practical approach to this delicate and thorny question.

However, we come back to the point that at present the Americans, it seems to me, are not prepared to go back to the United Nations. I would ask them seriously to consider returning to the Security Council. It may be that the Russians at this moment are prepared to think again, because I believe that they understand that their own citizens would not escape the same kind of attack if it were spread throughout the diplomatic community. It may be that the Russians would be prepared to support a new initiative.

Mr. Whitney

Will the hon. Lady give way?

Mrs. Dunwoody

The hon. Member for Wycombe (Mr. Whitney) was not here for the debate. I am sure that he will forgive me. I am cutting into the Minister's time and I think that it would be helpful if we gave the Minister as much time as possible to set out the Government's view. We have not heard it so far in this debate.

Mr. Whitney

Let us hear the hon. Lady's position.

Mrs. Dunwoody

If the hon. Gentleman has any doubts about that, let me put it to him in simple words which I hope he will understand—perhaps in words of one syllable.

I do not believe in military action. I believe that economic and diplomatic pressures should be applied to Iran. If the enabling Bill is given a Second Reading, the Government should accept the responsibility of coming back to the House to debate each order so that it is clear to us all which industries will suffer, why there is no financial bar and why existing contracts will escape the difficulties. I hope that that simple statement of my position will be understood even by the hon. Member for Wycombe.

We have already made it clear that the Bill should be improved by the amendments in the names of the Leader of the Opposition and my right hon. and hon. Friends. Some of the difficult aspects of the Bill need to be clarified. Some of the implications must be spelt out. The amendments would do that job for the Government. It is in the interests of all civilised nations to protect the normal intercourse between diplomats and Governments. That must be as true of the Russian Government as it is of any other, The Security Council has an important role and should be brought back into the discussions before too many irrevocable decisions are taken.

The EEC Foreign Ministers must be seen to stand together when they agree to take joint action. I understand that Britain is one of the few nations that has had to introduce specific legislation. Many of our European partners are able to act under existing powers. It would be wrong if we took action which appeared to put us in an isolated position vis-a-vis our colleagues.

The problem involves an unusual and frightening development. The Iranian people are wrong not to be prepared to release the hostages, even if they believe that they have a case because of the difficulties that they encountered under the Shah. They would have a more sympathetic hearing if they took that action immediately. There is no understanding in democratic countries of the view that by taking violent action against people who have no personal responsibility one can gain support for a political position.

The frustrated anger of a powerful nation such as America is only too understandable. It can become dangerous. Whatever can be done to resolve the problem must be done peacefully and preferably as quickly as possible. We shall expect from the Government not the cynical and uneasy pragmatism that we have heard in speeches this evening but a clear commitment that they will do everything that they can reasonably do to secure the release of the unfortunate victims of this nasty little incident.

Any order that relates to subsidiary legislation must be brought to the House before being put into operation. We shall not accept the Government using the powers in the Bill to take decisions in some spheres without full consultation. That is the implication of the widely drawn clauses. We should like the Government to accept our amendments. Our intention is that the powers in the Bill should be used only when the full consent of the Commons has been gained and when the House is clear about all the implications so that there is no misunderstanding. A good friend is one who, from time to time, speaks plainly and from a trustworthy affection. Let us make clear our failures—

Mr. Eric S. Heffer (Liverpool, Walton)

I am sorry to intervene at this stage, but I wish to know what my hon. Friend is advising my hon. Friends to do. Is she saying that we should support the Bill?

Mrs. Dunwoody

I am sorry that my hon. Friend finds the matter so difficult to understand. I shall support the Bill because my right hon. Friend the Member for Stepney and Poplar set out very plainly why—and I am being honest about it—he believed that, even with all the difficulties, he had to fulfil a positive role. If we do not believe in taking military action, and if we do not wish for the sort of difficulties in which we could become involved by an apparent show of force, we must back that with a straightforward application of some form of diplomatic pressure.

The Bill is inadequate, it is badly drafted, and there are many reservations about it, but I shall support it.

11.36 pm
The Minister for Trade (Mr. Cecil Parkinson)

I wish to begin my remarks by dealing with one or two of the specific points and questions that have been raised during the course of the debate.

My hon. Friend the Member for Peterborough (Dr. Mawhinney) asked what would be the position of the branches of United States banks in the United Kingdom. Under United Kingdom law, the law could apply to banks, but in practice it would have virtually no application because contracts for banking and financial services are excluded. Under United States law, the law has attempted to require United States banks in the United Kingdom to freeze Iranian assets. That is not covered in the Bill. Iran has brought numerous actions in the courts to have its assets released, and the question is at present sub judice.

The hon. Member for Aberdare (Mr. Evans) asked whether United Kingdom companies with subsidiaries in other countries would be affected by the Bill. Broadly speaking, the answer is that it can apply to overseas subsidiaries of United Kingdom companies, but there are limitations on criminal offences.

Dr. Mawhinney

I am grateful to my hon. Friend for his answer. Will he say whether the matter is sub judice in the courts of Britain or in the courts of the United States?

Mr. Parkinson

As I understand the matter, it is sub judice in the courts of Britain. If that is not correct, I shall write to my hon. Friend.

The hon. Member for Swansea, East (Mr. Anderson) was concerned that various member countries of the EEC might have considerable agricultural exports which would not be caught by the Bill. EEC exports to Iran last year totalled only 3 per cent. of EEC exports. Therefore, there should not be any huge exporter of food who would be likely to steal a march on any other member of the EEC.

My hon. Friend the Member for Leominster (Mr. Temple-Morris) said that he supported the Bill but that he had various reservations. He hoped that we would not allow our preoccupation with the hostages to distract us from the need for the West to have a strategy about Russian incursions into various parts of the world. It was for precisely that reason that my right hon. and noble Friend the Foreign Secretary went to Washington. We shall follow up in the NATO councils and in the EEC ministerial meetings our attempts not to allow our strategy to be lost in the detail of this situation.

Various hon. Members asked whether the Japanese Government would be a party to the various agreements. The Japanese Government have been working closely with the Governments of the EEC and are committed to taking parallel steps and parallel measures.

Mr. Dalyell

The Japanese Government have said that only the six major firms in Japan are affected and that the lesser firms are not affected. Therefore, 20 per cent. are not affected. We know perfectly well that the 80 per cent. represented by the six major firms could operate through the lesser firms.

Mr. Parkinson

As I understand it, the Japanese Government have associated themselves very clearly with the decisions announced by the EEC Foreign Ministers on 22 April, including those concerning economic sanctions.

My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) said that he hoped that the Bill would not become a substitute for diplomatic action and that diplomatic action would continue. I assure him that diplomatic action in a variety of ways is continuing, even during the course of these discussions.

Various hon. Friends have raised the question of a possible blockade of the Straits of Hormuz. I remind them that when my right hon. Friend the Prime Minister reported to the House on the results of the meetings of Heads of Government in Luxembourg she made it quite clear that in her opinion the use of force, including any attempt to blockade the Straits of Hormuz, would be an extremely grave step and one that should not be taken until all other attempts to solve the problem had failed.

Mr. Julian Amery (Brighton, Pavilion)

I can quite appreciate that none of us wishes to see any military measure adopted except as a last resort, but we really would be pulling the rug out from under the sanctions proposal and the diplomatic machinery if at the end of the day we made it clear that we were not, in the last resort, prepared to use force as well.

Mr. Parkinson

I note what my right hon. Friend has said, but I am sure that he would not expect me to comment on that in discussion of a Bill which enables the Government to take the power to impose economic sanctions. We regard this as a major step, and we would regard any extension of this step as a very grave matter indeed, as my right hon. Friend the Prime Minister made clear on 27 April.

In opening the debate, my hon. Friend the Minister of State, Foreign and Commonwealth Office described the steps which our American allies have taken following the seizure of the hostages more than six months ago, on 4 November. Wherever they have argued their case, they have won the argument. The International Court of Justice at The Hague ordered the release of the hostages. In the Security Council two resolutions condemning the Iranian action and calling for the release of the hostages were passed in December, and a third, which would have imposed sanctions, was defeated in January only by the Russian use of the veto.

The truth is that, in seizing the American embassy and the hostages, the Iranian Government have breached the Vienna convention on diplomatic relations, and far from protecting the United States diplomats on their territory, as they were bound to do, they have connived at their seizure and their subsequent detention. The justice of the American case was best underlined by President Bani-Sadr, of all people, during the recent seizure of the Iranian embassy in London, when he reminded us of our obligations to the London hostages and pointed out very forcefully to Her Majesty's Government they were under exactly the same duty as his Government were choosing to ignore. His own reaction was further evidence of the seriousness of the offence which has been committed against the United States and its citizens.

I think that from all quarters of the House tonight we have had confirmation of the fact that, whatever else we disagree about, we are united in deploring this appalling and regrettable seizure. It is indefensible. There is no argument, therefore, either at the International Court or within the international Community, or, indeed, in the House of Commons, that a serious offence has been committed and that prolonged diplomatic efforts over a period of months have failed to produce an answer.

In her statement to the House of 14 April, my right hon. Friend the Prime Minister said: The Americans have asked us to consider a wide range of measures. These include applying the economic sanctions that the Russians vetoed at the United Nations in January."—[Official Report, 14 April 1980; Vol. 982, c. 791.] A similar request was made to all the United States' major allies.

It was against that background, therefore, that the Foreign Ministers of the EEC met on 22 April in Luxembourg and decided on a course of action, to be taken in two stages. First, there was to be immediate political action such as the introduction of visas, the reducing of Iranian embassy staff and an embargo on arms sales. Those were the first immediate political steps to be taken. The Iranians were warned that unless they changed their ways a further step would be taken. A commitment was made to economic sanctions based on the vetoed Security Council resolution of 13 January. All the countries of the Community committed themselves to taking the necessary powers by 17 May. I stress that that decision was unanimous.

I should like to deal immediately with the rather cynical suggestions which have emerged from various quarters of the House that our allies are not to be trusted in taking this decision. There are no grounds for making that assertion. The Government, in concert with their allies, have committed themselves to taking the powers to impose sanctions. Other Governments have confirmed that they will do the same. A unanimous decision was taken by the Foreign Ministers. The commitment was confirmed in the communique following the meeting of European Heads of Government, attended by our own Prime Minister. Again, the decision on that occasion was unanimous. Therefore, at Foreign Minister and Heads of Government level, members of the EEC have pledged themselves by 17 May to have the power to enforce the economic sanctions envisaged by the vetoed Security Council resolution of January.

Mr. Spriggs

Can the hon. Gentleman say whether the President of the United States consulted the Government prior to lifting the ban on the export of wheat to the Soviet Union because of what happened in Afghanistan?

Mr. Parkinson

I think it is true to say that the Government were informed before that decision was taken.

I was saying that this commitment was made originally on behalf of the British Government by the Foreign Secretary and that it was confirmed by the Prime Minister and the other European Heads of Government. It is to meet that commitment, undertaken by our representatives, that the Government have introduced the Bill. In all this we have been acting in unison with our partners in the Community, and we intend to ensure that that remains the case. We are also in close touch with Japan, Canada, Australia and New Zealand, which are taking similar steps.

My hon. Friend the Member for Epping Forest (Mr. Biggs-Davison) asked about the value of our exports to Iran. In 1979, our exports amounted to £232 million. In the first three months of this year, they were just in excess of £80 million. I might add that other members of the Community are far more dependent on trade with Iran than we are. Virtually no members of the Community are less dependent on Iran for petroleum and petroleum products than we are. Therefore, the commitment which has been made by the other member States is perhaps a more difficult one for some of them than it is for us, even though it is difficult for us.

My hon. Friend pointed out that the Government already had the powers to introduce a ban on the export of goods to Iran. Those powers exist under the Import, Export and Customs Powers (Defence) Act 1939. But there are gaps in the provisions of that Act which the Bill seeks to fill. For instance, that Act does not deal with future service contracts in support of industrial projects or the signature of contracts to supply goods, as distinct from the physical export of goods. The main features of the Bill were outlined by my hon. Friend, but there are three particularly distinctive features. The powers are very specific and are related only to the Iranian crisis. The Government are taking powers to deal with problems that arise from this crisis alone. The Bill deals only with future contracts. It excludes financial contracts.

Mr. Straw

The Minister has correctly said that the Bill deals only with future contracts. Does he not accept that the power that exists in the 1939 Act could be used to thwart the execution of existing contracts? While under the Bill firms would be able to continue to produce goods in this country, they could subsequently be banned from exporting those goods to Iran. Does the Minister accept that it is creating unnecessary uncertainty for the Government to hold out the possibility that they might use the powers under the 1939 Act to ban the shipment of goods under existing contracts?

Mr. Parkinson

In my remarks I hope to make clear to the House the distinction between the powers under the Bill, and the way in which they will be implemented, and the powers under the 1939 Act. I hope that the hon. Gentleman will be patient until I do so.

Hon. Members have expressed doubts about or have questioned the existence in the Bill of subsection (2)(b) of clause 1, as compared with the resolution which was considered by the Security Council in January. That resolution was concerned with the limitation of new credits or loans, the availability of deposit facilities and related matters. As hon. Members may be aware, restrictions in these areas have been in force since the end of last year on the basis of guidance provided to major British banks. Those arrangements have been working satisfactorily, and in the circumstances we see no merit in contemplating legislative provision. The resolution considered by the Security Council did not contemplate the freezing of financial assets. That is not in question in any way.

Mr. John Parker (Dagenham)


Mr. Parkinson

If I may, I wish to get on. I have quite a lot to say.

If the House approves the Bill, the Foreign Secretary will attend the meeting of the EEC Foreign Ministers on 17 May with the Government having the full powers they need to implement the Security Council decision. The decision on the extent to which those powers are used will be taken at that meeting and subsequently translated into action by orders made under the two Acts.

A number of hon. Members asked about the procedure for obtaining parliamentary approval of any orders made by the Government. I should like to tell the House how this will be done. Under the Bill, an order will be laid before the House. Unless it is approved within 28 days, it will lapse. There is no need for the Government to ask the House for approval under the 1939 Act, but the Government intend to do so. The Government will follow a procedure as far as possible parallel to that envisaged by the Bill. The House will have the power to discuss and to decide on any Government proposals or measures taken under either of these two Acts.

The hon. Member for Nuneaton (Mr. Huckfield) spoke about the application of the Bill to the Talbot contract. The Bill applies to future contracts. The Talbot contract is an existing one which would be affected, if at all, by the 1939 Act. The Government are fully aware of the importance of the contract to the future of the Talbot company and its suppliers. Other member States have similar problems and other Governments are anxious to avoid similar consequences. That is why the Bill puts the emphasis on future contracts. Whether future supplies are under an existing contract or a new contract will depend upon the facts in each case.

Mr. Les Huckfield

Will the hon. Gentleman give way?

Mr. Parkinson

No, I have not time.

The objections to our proposals have fallen into three general categories. First—

Mr. Huckfield

On a point of order, Mr. Speaker. The House has been told by two Ministers that we would have a specific answer—

Mr. Speaker

Order. The hon. Gentleman is making a debating point.

Mr. Parkinson

I have given the hon. Gentleman the answer, but, as he showed earlier, he is not capable of understanding answers when he gets them.

The objections that have been made to our proposals have fallen into three major categories. The first is that they will not work and are a charade. I remind the House that Iranian imports in 1979 were only 30 per cent. of those in 1978. As the Iranian economy has begun to pick up, even slightly, so has the demand for imports from the West. I suggest that to be cut off from supplies under future contracts from the world's major trading countries when one's economy is already operating at a very low level and when a slight increase in demand has shown an increased need for Western exports would be very damaging to the Iranian economy.

I believe that pressure will be noticed and felt. The House underestimates the power of these measures if Iran, as a result of steps taken under the Bill and in concert with our allies, is denied access in future to meet its needs to our market, to Japan, to Canada and to the other countries which I mentioned. The Iranian economy is geared to Western technology and the effect will be serious and will be felt, as the right hon. Member for Stepney and Poplar (Mr. Shore) indicated that he believed.

Secondly, there was the argument that we should be driving Iran into the arms of the Russians. Again, a number of speakers have doubted that, and so do I. Not only is there a fundamental clash between Communism and Islam, but the Russians and their satellites could not meet Iranian needs. They are constantly proving that they have to turn to the West for supplies and technology. They are in no position to replace us in a market which is geared to supplies from us.

Mr. Huckfield

Will the hon. Gentle-Man give way?

Mr. Parkinson


Thirdly—and this argument has been used regularly—it is argued that, as the Americans did not consult us on their rescue attempt, why should they listen to us in future? In my view, my hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) dealt with this point extremely well. Our allies have asked us for help. If we give that help, we should use the moral edge that that will give us to ensure that our views are heeded and taken into account. A refusal to help at this stage would be a way of guaranteeing that our views are not heeded by our American allies. I believe that they need our advice as much as they need our support.

There has been a great deal of talk about reluctance to implement these measures. I spent a great deal of my time last year travelling round the world trying to boost British trade. No one is more reluctant than I am to see us turning our backs on an important market. My Department will have to administer these sanctions. It is not a job to which we are

looking forward.

In my view, there are three compelling reasons why we must give the Bill a Second Reading. We must drive home to the Iranians the consequences of their actions in seizing and holding the hostages. We are not just emphasising a minor point of principle. We considered this principle so important last week that we were prepared to put at risk the lives of the cream of our security forces to rescue Iranian hostages. This is a matter of prime importance.

The second reason is that our most important and faithful ally is in trouble, has asked us for help and has specified how we can help. I believe that we owe it to the Americans to respond to their request.

The third reason is that with our EEC and other partners we have committed ourselves to take these measures—a commitment made by the Foreign Secretary and repeated by the Prime Minister. We must keep our word.

There has been a great deal of talk about futility. There is a central futility in this whole situation—the futility of the Iranian Government in hanging on to the hostages. Let no one in the house be in any doubt that that is the central futility that we all condemn. The Iranian Government have it in their power to bring this situation to an end. They can release the hostages and return to normal relations with their important trading partners. It is in the interests of Iran and the whole of the West that they do just that as soon as possible.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 230, Noes 85.

Division No. 290] AYES [12 midnight
Alexander, Richard Braine, Sir Bernard Clarke, Kenneth (Rushcliffe)
Alton, David Bright, Graham Cockeram, Eric
Amery, Rt Hon Julian Brinton, Tim Cocks, Rt Hon Michael (Bristol S)
Aspinwall, Jack Brittan, Leon Colvin, Michael
Atkins, Robert (Preston North) Brocklebank-Fowler, Christopher Cope, John
Baker, Nicholas (North Dorset) Brotherton, Michael Costain, A. P.
Benyon, Thomas (Abingdon) Browne, John (Winchester) Crouch, David
Benyon, W. (Buckingham) Buck, Antony Cunningham George (Islington S)
Berry, Hon Anthony Budgen, Nick Davis, Clinton (Hackney Central)
Best, Keith Bulmer, Esmond Dean, Paul (North Somerset)
Bevan, David Gilroy Cadbury, Jocelyn Dorrell, Stephen
Biffen, Rt Hon John Carlisle, John (Luton West) Douglas-Hamilton, Lord James
Biggs-Davison, John Carlisle, Kenneth (Lincoln) Dover, Denshore
Blackburn, John Carlisle, Rt Hon Mark (Runcorn) Dunn, Robert (Dartford)
Blaker, Peter Chalker, Mrs. Lynda Dunnett, Jack
Body, Richard Chapman, Sydney Dunwoody, Mrs Gwyneth
Boscawen, Hon Robert Clark, Hon Alan (Plymouth, Sutton) Durant, Tony
Bottomley, Peter (Woolwich West) Clark, Sir William (Croydon South) Dykes, Hugh
Eggar, Timothy Le Marchant, Spencer Robertson, George
Elliott, Sir William Lennox-Boyd, Hon Mark Rodgers, Rt Hon William
Eyre, Reginald Lester, Jim (Beeston) Roper, John
Fairbairn, Nicholas Lloyd, Ian (Havant & Waterloo) Ross, Stephen (Isle of Wight)
Fairgrieve, Russell Lloyd, Peter (Fareham) Rossi, Hugh
Faith, Mrs Sheila Lyell, Nicholas Rowlands, Ted
Fenner, Mrs Peggy Lyons, Edward (Bradford West) Sainsbury, Hon Timothy
Finsberg, Geoffrey McCrindle, Robert Shaw, Michael (Scarborough)
Fisher, Sir Nigel Macfarlane, Nell Shelton, William (Streatham)
Fletcher, Alexander (Edinburgh N) MacGregor, John Shersby, Michael
Fletcher-Cooke, Charles MacKenzie, Rt Hon Gregor Shore, Rt Hon Peter (Step and Pop)
Fookes, Miss Janet Maclennan, Robert Silvester, Fred
Forman, Nigel McQuarrie, Albert Sims, Roger
Fowler, Rt Hon Norman Madel, David Skeet, T. H. H.
Fraser, Rt Hon H. (Stafford & St) Major, John Speed, Keith
Galbraith, Hon T. G. D. Marks, Kenneth Speller, Tony
Gardiner, George (Reigate) Marland, Paul Spicer, Jim (West Dorset)
Garel-Jones, Tristan Marten, Nell (Banbury) Spicer, Michael (S Worcestershire)
George, Bruce Mates, Michael Squire, Robin
Gilbert, Rt Hon Dr John Mather, Carol Stainton, Keith
Ginsburg, David Maude, Rt Hon Angus Stanbrook, Ivor
Goodhew, Victor Mawby, Ray Stanley, John
Goodlad, Alastair Mawhinney, Dr Brian Steen, Anthony
Gow, Ian Maxwell-Hyslop, Robin Stevens, Martin
Grant, Anthony (Harrow C) Mellor, David Stewart, John (East Renfrewshire)
Griffiths, Eldon (Bury St Edmunds) Meyer, Sir Anthony Stradling Thomas, J.
Griffiths, Peter (Portsmouth N) Miller, Hal (Bromsgrove & Redditch) Tebbit, Norman
Grylls, Michael Mills, lain (Meriden) Temple-Morris, Peter
Gummer, John Selwyn Mills, Peter (West Devon) Thatcher, Rt Hon Mrs Margaret
Hamilton, Hon Archie (Eps'm&Ew'll) Moate, Roger Thomas, Rt Hon Peter (Hendon S)
Hamilton, Michael (Salisbury) Montgomery, Fergus Thompson, Donald
Morrison, Hon Charles (Devizes)
Hampson, Dr Keith Morrison, Hon Peter (City of Chester) Thorne, Neil (llford South)
Hannam, John Mudd, David Tinn, James
Harrison, Rt Hon Walter Murphy, Christopher Townend, John (Bridlington)
Havers, Rt Hon Sir Michael Myles, David van Straubenzee, W. R.
Hawkins, Paul Needham, Richard Varley, Rt Hon Eric G.
Hawksley, Warren Nelson, Anthony Viggers, Peter
Heddle, John Neubert, Michael Wakeham, John
Henderson, Barry Newton, Tony Waldegrave, Hon William
Higgins, Rt Hon Terence L. Normanton, Tom Walker, Bill (Perth & E Perthshire)
Hill, James Ogden, Eric Walker-Smith, Rt Hon Sir Derek
Hogg, Hon Douglas (Grantham) Onslow, Cranley Waller, Gary
Holland, Philip (Carlton) Owen, Rt Hon Dr David Ward, John
Hooson, Tom Page, John (Harrow, West) Warren, Kenneth
Hordern, Peter Page, Rt Hon Sir R. Graham Watson, John
Howells, Geraint Page, Richard (SW Hertfordshire) Wellbeloved, James
Hunt, David (Wirral) Parkinson, Cecil Wells, Bowen (Hert'rd & Stev'nage)
Hunt, John (Ravensbourne) Parris, Matthew Wheeler, John
Hurd, Hon Douglas Patten, Christopher (Bath) Whitney, Raymond
Jay, Rt Hon Douglas Pawsey, James Wickenden, Keith
Jessel, Toby Penhaligon, David Williams, Delwyn (Montgomery)
Johnson Smith, Geoffrey Percival, Sir Ian Winterton, Nicholas
Jopling, Rt Hon Michael Price, David (Eastleigh) Wolfson, Mark
Kellett-Bowman, Mrs Elaine Rathbone, Tim Woolmer, Kenneth
Kershaw, Anthony Rees, fit Hon Merlyn (Leeds, South) Young, Sir George (Acton)
Knight, Mrs Jill Rees, Peter (Dover and Deal)
Lamont, Norman Renton, Tim TELLERS FOR THE AYES:
Latham, Michael Rhodes James, Robert Mr. Peter Brooke and
Lawrence, Ivan Rhys Williams, Sir Brandon Mr. David Waddington.
Lee, John Ridley, Hon Nicholas
Allaun, Frank Dubs, Alfred Lambie, David
Ashton, Joe Eastham, Ken Lamond, James
Atkinson, Norman (H'gey, Tott'ham) Evans, Ioan (Aberdare) Leighton, Ronald
Barnett, Guy (Greenwich) Evans, John (Newton) Lestor, Miss Joan (Eton & Slough)
Benn, Rt Hon Anthony Wedgwood Faulds, Andrew McElhone, Frank
Bennett, Andrew (Stockport N) Foot, Rt Hon Michael McKay, Allen (Penistone)
Bruce-Gardyne, John Freeson, Rt Hon Reginald McKelvey, William
Buchan, Norman Garrett, John (Norwich S) McNamara, Kevin
Callaghan, Jim (Middleton & P) Golding, John Marshall, Dr Edmund (Goole)
Campbell-Savours, Dale Graham, Ted Marshall, Jim (Leicester South)
Canavan, Dennis Hardy, Peter Maxton, John
Carter-Jones, Lewis Hart, Rt Hon Dame Judith Meacher, Michael
Cook, Robin F. Hattersley, Rt Hon Roy Mikardo, Ian
Crowther, J. S. Haynes, Frank Mitchell, R. C. (Soton, Itchen)
Cryer, Bob Healey, Rt Hon Denis Molyneaux, James
Dalyell, Tam Heffer, Eric S. Morton, George
Davis, Terry (B'rm'ham, Stechford) Hogg, Norman (E Dunbartonshire) Newens, Stanley
Deakins, Eric Holland, Stuart (L'beth, Vauxhall) Orme, Rt Hon Stanley
Dobson, Frank Hooley, Frank Palmer, Arthur
Dormand, Jack Huckfield, Les Park, George
Douglas-Mann, Bruce Hughes, Roy (Newport) Pavitt, Laurie
Pendry, Tom Silverman, Julius Taylor, Mrs Ann (Bolton West)
Powell, RI Hon J. Enoch (S Down) Skinner, Dennis Thorne, Stan (Preston South)
Race, Reg Snape, Peter Tilley, John
Radice, Giles Soley, Clive Wilson, William (Coventry SE)
Richardson, Jo Spearing, Nigel
Roberts, Ernest (Hackney North) Spriggs, Leslie TELLERS FOR THE NOES:
Rooker, J. W. Stallard, A. W. Mr. David Winnick and
Ross, Ernest (Dundee West) Stoddart, David Mr. Philip Whitehead.
Silkin, Rt Hon John (Deptford) Straw, Jack

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Newton.]

Committee this day.