POWERS WITH RESPECT TO CERTAIN CONTRACTS RELATING TO OR CONNECTED WITH IRAN.

HC Deb 13 May 1980 vol 984 cc1067-174

Mr. Dalyell

I beg to move amendment No. 2, in page 1, line 7, leave out ' either contracts for services or '

The Chairman

With this, we may take the following amendments:

No. 3, in page 1, line 8, leave out ' or transport '.

No. 4, in page 1, line 8, after ' goods', insert ' other than the products of oil companies).'

No. 8, in page 1, leave out lines 16 to 18.

No. 9, in page 1, line 18, at end insert ' and (c) shall not apply to the renewal or extension of any contract.'.

No. 10, in page 1, line 18, at end insert and (c) shall not apply to any contract made as a result of carrying out international obligations.'.

No. 11, in page 1, line 18, at end insert ' and (c) shall not apply to any contract, if failure to secure that contract would result in people being made redundant or put on short time; unless the government shall compensate those people for any loss of income.'.

Mr. Dalyell

I should like to start by looking at certain industries that are involved in service problems, including, for example, the chemical industry. In 1979, our exports to Iran from the chemical industry totalled £39.3 million, a drop from £71 million in 1978.

What is the definition of pharmaceuticals excluded from the list of items under the embargo and what is the machinery for determining which goods are or are not embargoed? It is no part of my plan to keep the Committee going unnecessarily, and I am not concerned to keep people up to all hours of the night merely for the sake of keeping them up, but there is a series of genuine questions that have to be put and I thick that they should be put fairly early.

We come up against the whole problem of renewals, which was raised by my hon. Friend the Member for Derby, North (Mr. Whitehead), who pointed out that a number of existing contracts with Iran include an option for renewal. If such an option came up, would it be treated as a new contract or as an existing contract?

The Minister for Trade referred last night to the Import, Export and Customs Powers (Defence) Act 1939 but said that no decision had been taken to use such powers and that no decision would be taken unless others were doing the same. The hon. Gentleman knows that the nature of the chemical industry is such that it has not one-off agreements but running agreements.

In West Lothian, as in many other constituencies, there are huge chemical complexes, particularly at Grangemouth. I know something about the industry, as does the Minister. It is not just a debating question but a real question when we consider what is a renewal of an existing contract and what is a new contract. Sometimes the line between them can be very thin. I should like a further statement on that matter.

Incidentally, I must refer back to the speeches of a number of hon. Members, including that of my hon. Friend the Member for Waltham Forest (Mr. Deakins), last night. How on earth does one find out, when a ship is approaching the Gulf, whether the merchandise that it is carrying is part of a new contract or part of an existing, renewed contract? Such matters are mind-boggling in their complexity.

I turn to the question of the compressed air industry. Compair, the British Compressed Air Equipment group, has benefited from the current improvement with Iran. Sales there had been negligible since before the revolution, when they ran at about £5 million a year, but a sales team that returned in late April reported a genuine upturn in business confidence and brought back the first significant order since the end of 1978.

Compair's main competitor is the firm of Atlas Copce of Sweden. What is Atlas doing in the light of the proposed embargo? It is busy trying to fill the gap, or should I say, given that its business is compressed air, the vacuum. Does it make any difference that Atlas has a United States subsidiary and partner? Not a bit, I understand. If we impose sanctions, Atlas will apparently take little notice, and that Swedish-American company will pinch British business that has been hard won over the years and regained after the revolution by the sweat of the brows of those who work for Compair.

That raises fundamental questions about both goods and services, which are the subject of amendment No. 2. It is all very well for the Government to say that we shall not be behind our competitors or in front of them. I ask them to find out what is happening in actual cases. To impose sanctions and remove business from a British firm such as Compair and then to find that a Swedish-American company, with, presumably, all sorts of American connections, pinches that business will not be a sensible situation.

The hon. Member for Canterbury (Mr. Crouch) is knitting his brow. He knows a lot about the chemical industry and, therefore, he must know that there are many multinational companies with American connections. My point is that to see British firms that have struggled in the Iranian market, which has never been easy, having their business taken over by competitors who have connections with the United States is a bit difficult.

I cannot help referring to the article in The Guardian by the hon. Member for Aldershot (Mr. Critchley), who described how his Whips seized him by the upper arm and said: It may not make much sense, but when the chips are down we must stand by our friends. The hon. Gentleman wrote: The President will continue to decide his course of action in the light of his own priorities, most of which are domestic and we should not compound the errors of our allies. We must be the candid friend". In the light of the Compair example and other industrial examples, we have to ask precisely why we are doing all this. If the hon. Member for Aldershot and a host of others are to be believed, we are doing it for the Americans. My question therefore becomes doubly valid. Is there not an obligation on firms that may be registered in Stockholm but nevertheless have intimate American connections not to take advantage of their competitors?

I go on from the compressed air industry to the electrical machinery industry. That industry points out that once the habit of buying British is interrupted it is very difficult to re-establish that habit and it can be done only with enormous difficulty. So we must not imagine that by starting a policy of sanctions all we are doing is creating some kind of minor hiccup. We must be under no illusion at all that this policy will have lasting effects and that once we are out of a market like that of electrical machinery and once—dare I say it?—the East Germans are in, we shall be unable to get the East Germans out, and to get back in when the political situation becomes better will be very difficult. So at issue here is possible lasting damage to British industry.

Mr. Eldon Griffiths (Bury St. Edmunds)

I agree with the hon. Gentleman on this point and, of course, it is one that was made vigorously in respect of sanctions against Rhodesia, Chile and many others. Will the hon. Gentleman say how he voted then?

Mr. Dalyell

Yes, quite openly. I voted absolutely along the line of Labour Party policy on Rhodesia. I have never made any public statement on Rhodesia. The truth is that in politics I think people should open their mouths in public only on those subjects which they pretend to know about. Without being pompous, I decided at a very early stage that I was no expert on Rhodesia, and I have never asked a question or made a speech in this House on Rhodesia.

Having said that, I am bound to add that we learn a bit about how ineffective in the short term or how effective in the long term sanctions are. However, I give the candid answer that I voted for sanctions all along. Perhaps the experience of Rhodesian sanctions, knowing how often they were got round, should make us very dubious about this proposition. I am not setting up as a knight in shining armour and saying I was correct all along. I admit that I supported Rhodesian sanctions. In fact, given the situation, I would probably have done so again—I must make that quite clear—but people learn, and these things are not black and white.

Mr. Andrew Faulds (Warley, East)

Would my hon. Friend agree that there was near universal observation of sanctions against Southern Rhodesia and that they did considerable damage to that economy, but that the present case is a question of politics by gesture, and that we and one or two other Western countries are making gestures against Iran, thereby helping our enemies in that part of the world and letting all our industrial and commercial competitors into an area where we have some contacts, which we are now going to abandon by wilful intention?

Mr. Dalyell

I agree particularly with my hon. Friend's point about gesture politics, because since he and I have been in the House we have learnt how very dangerous gesture politics can be—doing things that we do not entirely mean because we think it will please this or that group or country. I agree entirely with him that gesture politics are a very dangerous pastime and can be counter-productive. He knows far more about the effect of Rhodesian sanctions than I do, and I am interested that he says that they were not as ineffective as I had thought. My right hon. Friend the Member for Battersea, North (Mr. Jay), the former President of the Board of Trade, may agree with that.

It is one thing to have had sanctions against Rhodesia, which was landlocked and where, apart from South Africa, there were people who agreed with the policy on the borders of that country, but it is a totally different proposition to apply sanctions to a country which has a port on the Persian Gulf and where there are neighbouring countries—not only the Soviet Union, but also Turkey—which certainly will not co-operate in the sanctions. Therefore, in general terms, I accept what my hon. Friend says.

The First Deputy Chairman of Ways and Means (Mr. Bryant Godman Irvine)

The hon. Gentleman is aware, of course, that this is not a Second Reading debate. It is a debate related to a series of amendments, all of which are absolutely specific. Therefore, the hon. Gentleman should address himself to companies, services, and so on.

Mr. Dalyell

That is why I am coming back precisely to the matter of industry, but not at great length because the proposition was put by my hon. Friend the Member for Nuneaton (Mr. Huckfield) last night. But there again the matter of service is directly related, and I suppose I had better declare a constituency interest since I represent the truck and tractor division of Leyland, which, like Massey-Ferguson, is affected.

To take, for example, the Land Rover and the 6,000 bits for those four-wheel drive vehicles which have been assembled in Iran by another nationalised industry, this is a service relationship—and I have related all the industrial points in amendment No. 2 to service. The truth is that the whole nature of the business of kit assembly relates to service and to renewal, and it cannot just be brought to an end. That is why my hon. Friend the Member for Nuneaton and those representing Coventry are so concerned about the Talbot situation.

If the Government are saying that Talbot is excluded, the Land Rover is excluded and Leyland is excluded, are we sure what is to be the future of Leyland Motors in Iran and the Leyland factory in Tabriz? It is all very well to say that they will be excluded, but the matter of tit-for-tat comes into it. The Iranians will not accept cosily and neatly the terms that we lay down. If there are to be new practices in the industry, I can imagine the natural human reaction of the Iranians. If we mess them around, they will mess us around, and it is very unreal to think that we shall have some easy, cosy, well-ordered continuing of contracts if we go ahead with this proposition.

Mr. D. N. Campbell-Savours (Workington)

My hon. Friend referred to the Leyland contract. Has he been given an undertaking that British Leyland is not to be affected by sanctions?

Mr. Dalyell

I have been given no undertaking. All I can report is that there are people in the Leyland management who are profoundly worried about it—as, indeed, there are in the Massey- Ferguson management. I am looking for the Minister to make, at some time convenient to him, and I hope on this amendment, a statement as to the position of the motor industry.

Take, for example, the position of Massey-Ferguson, which is competing with the Romanians to supply tractor kits to the factory in Tabriz, in the north of Iran, where there is the main assembly plant. Massey-Ferguson's sales amounted to some $80 million in 1978 and they were down to $8 million last year. Incidentally, there is no payment problem. The company reports that the new Iranian authorities have been very quick, prompt and careful about payments.

4.30 pm

Massey-Ferguson executives have been visiting the country regularly this year, and they hope for a considerably improved order. Massey-Ferguson is competing with a less sophisticated and probably, from the point of view of the Iranians, a less attractive tractor to be made under Romanian auspices. If a cut-off is threatened in the future, the balance of advantage is with the Romanian competitors. Once those competitors are established, does anyone think that Massey-Ferguson will easily get back the business? If we think that, we are living in industrial cloud-cuckoo-land. It is not how the world works. If the Minister thinks differently, doubtless he will say so.

I listened with interest to the speech made last night by my hon. Friend the Member for Crewe (Mrs. Dunwoody). She said that she hoped that continuing talks would produce results. Are those talks more likely or less likely to achieve results if we go along with sanctions? My hon. Friend said that she believed in economic pressure. Those who believe in economic pressure have to be quite clear about what the motor industry will suffer from economic pressure. There is a considerable price to be paid. Even if the hostages were released and sent back to the United States, after all this economic pressure it is very unlikely that we would get back our tractor market.

I come to shipping, which is a service industry, and I am speaking to amendment no. 2. A 20,000-tonne support ship is being built by Swan Hunter at Wallsend. How much has already been paid by the Iranians, and what is the position of that contract? There are difficult issues of law here, and the Minister owes it to the House to explain the legal position. I understand that the Iranians have largely paid for the ship, so the question of confiscation arises, and that raises deep issues. As a Scottish Member, I also want to ask about the two smaller support ships being built by Yarrow. They are some way from completion. When will the decision be taken about those ships?

It is all very well to shrug one's shoulders and say that sanctions will be neutralised by ships taking goods to ports along the Gulf and the goods then being ferried across. It is true that there is plenty of surplus tonnage in the Gulf, but there will be a bias against those who have imposed sanctions and favourable attitudes to those who have not imposed sanctions. So the British shipping industry will be at a disadvantage and the Russian railway system may be a beneficiary.

We should not underestimate Iran's agreements with East Germany and Romania. What is to prevent someone in Dubai or Bahrain ordering from Britain what the Iranians need, having it sent to Dubai or Bahrain, and then ferrying it across to an Iranian port?

Equally, what is to prevent a Turkish entrepreneur, or the owners of the 2,500 Bulgarian lorries that already travel between Iran and Western Europe, ordering precisely what the Iranians would have ordered, and then at a small profit transferring the embargoed goods to Iran?

Mr. Eldon Griffiths

They are doing it now.

Mr. Dalyell

If it is being done now, what is to prevent its continuing to be done? The Minister smiles a wry smile. These are real questions, not debating points. Unless there is total co-operation, I do not see how it can be prevented. The British Government will not go round industry saying "Are you sure that the order that has come from Dubai or Ankara is not intended to go to Iran? "That leads me to the conclusion that the whole business is futile.

The shipowners have expressed a fear that they could be boxed into Iranian ports. What is certain is that there will be high insurance premiums, which will make shipping insurance, expensive enough already, even more prohibitive.

What is to be the policy about goods in foreign ships? Unless there is a military blockade, nothing can be done about that. Because nothing can be done, we get concerned about the question put by my right hon. Friend the Member for Leeds, East (Mr. Healey) and many others. Supposing sanctions fail, what is the next step? What is the step after that? From examination of the shipping position, it is clear that the only step that can be taken after sanctions is military action. I hope that there is a consensus in the House against any kind of military action.

Mr. James Lamond (Oldham, East)

I consider that some military action has already been taken.

Mr. Dalyell

We should not be under any misunderstanding that what happened, justified or unjustified, was military action.

We are asked to impose sanctions. I am told repeatedly that American goods are still getting into Iran. An official of the Committee for Middle East Trade, whom I will not name, is referred to in an article in the Financial Times of 25 April 1980. That committee is a section of the British Overseas Trade Board. The official points out that, despite the United States Iranian relations crisis, American goods have continued to reach Iran, partly through the ports on the Arab shore of the Gulf and certainly through Dubai, which could be used for circumventing a Western boycott, apart from its traditional role as an embarkation point for smuggling goods into Iran. I am asking the British Government whether they have any information on this point and whether they deny that this is so.

Are we to take measures against Dubai and against the other ports in the Gulf? If we do not, the proposition is once more proved to be ineffective. I am entitled to ask the Minister—the Minister shakes his head—whether he proposes a Beira-type patrol in the Gulf. I give way, because if the point can be cleared up my speech will be shorter.

The Minister for Trade (Mr. Cecil Parkinson)

It might not be a bad idea if the hon. Member for West Lothian (Mr. Dalyell) looked at the Bill to see what it covers. The Bill states exactly to whom it applies and to what it applies. It applies to future contracts for services, or the sale, supply or transport of goods. It applies to a range of people who are defined in clause 2(5) as being in The Channel Islands, the Isle of Man and any colony and…to any foreign country or territory in which for the time being Her Majesty has jurisdiction. The Bill also applies to British citizens in control of a ship or an aircraft registered in the United Kingdom. The Bill is quite specific. It applies to British citizens in certain areas. It also applies to them if they are in charge of a ship or an aircraft registered in this country. This is the scope of the Bill.

The First Deputy Chairman

May I ask the hon. Member for West Lothian (Mr. Dalyell) once again to confine himself to the amendment.

Mr. Dalyell

I am on amendment No. 3 precisely, and I am turning to amendment No. 4, which deals with transport. That raises the question of the transport of goods. I am glad that the Minister agrees about that. In this context we must consider Turkey and the land transport that passes through that country. Goods can be brought by sea to Turkey and moved overland by truck. A post-Khomeini agreement ends any kind of transit fee. Furthermore, new visa requirements have encouraged many of the Turkish owner-drivers to use their own 10-ton trucks on the route to Iran. The advantage of the Turkish sea-land route to those countries not applying sanctions is that they would avoid the heavy insurance imposed on ships using the Gulf and also avoid dangers.

Have the Government reached any understanding with Turkey about transport? The important routes through Turkey were notoriously bribe-prone and clogged during the regime of the Shah. There is now a change. There are no transit fees. Their abolition is partly in return for oil that the Khomeini regime has promised to Turkey.

Ankara may be under heavy pressure to fall in with American policies, but Premier Suleyman Demirel is deeply dependent on Muslim support. Neither his Cabinet colleagues in Ankara nor the Opposition would tolerate any anti-Iran moves. It is no good the Minister of State knitting his brow. We are discussing transport, and Turkey is crucial in relation to land transport.

Mr. Campbell-Savours

The Minister does not agree with the Bill, anyhow.

4.45 pm

Mr. Dalyell

It is up to the Minister to convince my hon. Friend the Member for Workington (Mr. Campbell-Savours) that he believes in the Bill.

Tehran has offered the destitute and cash-short Turkish economy 1.6 million tons of oil on easy terms. The frontier to local trade has been opened and the Iranians have made it possible to get diesel oil to Eastern Turkey on easy terms.

If there is no agreement with the Turks on land transport, what is to prevent any country that does not apply sanctions from buying goods such as machinery from British firms and selling them to a Turkish or other entrepreneur? That buyer can then transport the goods across Turkey in huge trucks and thus reach Iran. That question must be answered.

Mr. Parkinson

The hon. Gentleman answers his own question. He knows the answer. The Bill has relatively limited scope. It covers contracts for the supply of goods and services. If a British firm enters into an agreement, indirectly, to supply Iran, it will be breaking the law, but if a British firm sells to a Turkish firm, we have no jurisdiction in Turkey. We cannot close the Turkish border. The hon. Gentleman does not need to be told that by me.

Mr. Eric S. Heffer (Liverpool, Walton)

The Bill is not worth the paper it is written on.

Mr. Dalyell

My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) says that the Bill is not worth the paper it is written on.

Mr. Alan Clark (Plymouth, Sutton)

If that is the case, sit down. It is a ridiculous Bill. We know that.

Mr. Dalyell

The hon. Member for Plymouth, Sutton (Mr. Clark) says this is a ridiculous Bill, and I agree with him. On the other hand, I did not see him in the Division Lobby last night. Therefore, I ask him why he did not join his hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne), who had the courage of his convictions.

The First Deputy Chairman

Order. As far as I know, this amendment was not being considered in the Division Lobby last night.

Mr. Dalyell

I was merely expressing sadness at the sedentary interruption from the hon. Member for Plymouth, Sutton. He made a bold statement in the press about what he thought of the Bill. He uses language that is far stronger than I would dare to use about the Bill and yet he expects me to shut up and let him go home. He believes that everyone recognises the futility of the Bill. It is not like that. Though the Bill may be futile, it will have a variety of effects throughout the Middle East.

Mr. Clark

It is not correct that I made a statement in the press. I do not make statements to the press. I make them here, on the Floor of the House. I was trying to tell the hon. Member for West Lothian (Mr. Dalyell) that there is no point in his demonstrating that the Bill is ineffective. Is he criticising the Bill on these grounds and urging my right hon. and hon. Friends to make it more effective, or is he simply demonstrating that the Bill is futile and impotent? If it is the latter, he is wasting the time of any hon. Member with the slightest degree of percipience.

Mr. Dalyell

In the sense that the Bill cannot possibly work, it is far from impotent. The Bill is profoundly damaging in the effects that it will have in the Middle East. We get the worst of all possible worlds from the Bill. If it were useless and impotent, I would not be detaining my colleagues by making long speeches about it. The effect that the Bill will have in the Middle East is considerable.

The amendments relate to services. In the wisdom of the Chairman of Ways and Means, the amendments have been grouped together. If they had not been grouped we could have had a series of shorter speeches.

Mr. James Lamond

My hon. Friend is pursuing the amendments with the object of demonstrating the futility and uselessness of the Bill. He has tabled amendments which enable him to expand his arguments. As always, he recognises that it is his duty to prevent such Bills from being passed. I recall the fight that he had against a similarly useless and futile Bill which was supposed to give devolution to Scotland and which he killed by his efforts.

Mr. Dalyell

I am flattered, but I should be out of order if I sought to pursue that. Part of the job of the House of Commons is to expose Bills which are a sham and will not work. I object to propositions by those who do not believe in them.

Mr. Heffer

Gesture politics.

Mr. Dalyell

Gesture politics are extremely dangerous. People get into trouble when they become involved in gesture politics. This Bill and the Scotland Bill have one thing in common—many of their protagonists did not or do not believe in them.

Mr. Russell Johnston (Inverness)

Were the sanctions against Rhodesia gesture politics? If they were, they were an important gesture.

The First Deputy Chairman

Order. We are dealing with a series of amendments, none of which has anything to do with Rhodesia.

Mr. Dalyell

I shall leave Rhodesia and go to Australia.

Mr. Johnston

On a point of order, Mr. Godman Irvine. Surely it is possible to make comparisons.

The First Deputy Chairman

It is a question of the scope of the Bill and the debate. I am referring the hon. Member for West Lothian (Mr. Dalyell) to the amendment to which I imagine he is addressing himself.

Mr. Heffer

Further to that point of order, Mr. Godman Irvine. One of the amendments is amendment No. 10, which refers to "international obligations". An hon. Member could make a speech about international obligations and be justified in referring to what happened in Rhodesia, Chile or any other country.

The First Deputy Chairman

I do not want to jump the fence before we reach it. I am not sure what such a speech would be like, so I shall wait until it is made.

Mr. Dalyell

I have some sympathy with the hon. Member for Inverness (Mr. Johnston) because comparisons are valid. However, we have had a short discussion about comparisons and time is moving on. I have no doubt that my hon. Friend the Member for Walton will deal with it later.

Mr. Heffer

I think that my hon. Friend should deal with it later.

Mr. Dalyell

How will it be possible to determine which ship is carrying what? Let us consider Australia's position. If British ships cannot get in, what happens to Australian and New Zealand goods? Australia and New Zealand send one-third of their lamb exports to Iran. Food exports from Australia and New Zealand in the second half of last year were worth $68 million. Most of the lamb was carried in British refrigerated ships. How will we police ships carrying some Australian goods, some New Zealand goods, some British goods, some food, some materials that are embargoed and some that are not?

Mr. Parkinson

Food and medical supplies are exempt from the sanctions resolution which the Russians vetoed in the Security Council. The various member countries, including Australia, New Zealand, the EEC countries, America and Canada, are involved. We are taking action to enable us to meet that sanctions resolution. The member countries have committed themselves to meet the sanctions resolution which specifically excludes food and medical supplies.

Mr. Edward Rowlands (Merthyr Tydfil)

Where in the Bill are food and medical supplies excluded? There is no reference to them. A number of exclutions resolution, which specifically ex-of intent are one thing, but there should be a statutory statement that food and medicine are excluded.

Mr. Dalyell

Why is there no statutory statement in the legislation? Mr. Carter and the press have said that food and medicines are excluded. Why is it not in the Bill? Will the Minister save time by answering the question?

Mr. Parkinson

This is simply an enabling Bill. The specific provisions which the Government decide to make when they decide to take action will be outlined in the orders which will be laid before the House.

Mr. Dalyell

That does not seem a satisfactory legislative practice.

Mr. Eldon Griffiths

Why does the Bill exclude the banks and not food?

Mr. Dalyell

That is a good question. The Bill deals in some detail with banks, but food and medicine are not dealt with. These are complicated matters. In no way do I criticise the Minister for not knowing the answer. I shall not chide him for not having such facts in his head. If he obtains the information, I shall give way later.

The whole shipping question is complicated. Let us consider Brazil. Between 50,000 and 100,000 tonnes of vegetable oil comes from Brazil every month. Related substances might come under the category of industrial use. How do we find out what is a British chemical substance or a Brazilian vegetable oil? Policing is impossible.

The Indians have been asked to supply consumer and engineering goods on a priority basis. An official Indian delegation in Tehran recently was asked to supply cement, sugar, textiles, drugs, steel, tyres and tubes, as well as eggs, meat, onions and potatoes. Significantly, Iran asked also that such goods should be carried in Indian vessels. Has the Department of Trade estimated the loss to British shipping of goods from India previously carried in British ships? There should be some estimate, because there is a transfer from British shipping to shipping of other countries, as specified by Iran.

5 pm

Mr. Andrew F. Bennett (Stockport, North)

My hon. Friend talks about British shipping and Indian shipping. There is a problem here because there is a tendency for ships to be leased to would-be owners, and there is a chance that it will be the same ship except that it is called an Indian ship rather than a British ship. Is it not a complicated matter to try to define what is British shipping? Presumably, under the Bill, if a person leased a ship knowing that it would be used for trade with Iran, he would be in breach of the regulations. If he leased it for general purposes without knowing specifically that it would be used for trade with Iran, it would be unfair to apply the regulations. Surely that makes a complete farce of the whole matter.

Mr. Dalyell

I am glad that my hon. Friend made that intervention. For two years of my life before coming to the House, I worked for the British India Steam Navigation Company, a subsidiary of P and O. I know how extremely complicated these matters can be in relation to the whole business of leasing ships in the Far East. The whole history of MacKenzie's—which later became British India—and other companies and the complications of P and O are such that it is difficult to identify precisely what, at any point in time, is the legal position of goods in a certain ship. That could become much more complicated if there was an enforced embargo, such as may follow from the proposition before us. No doubt my hon. Friend the Member for Stockport, North (Mr. Bennett) will expand on that point in his speech. It is an important issue of substance.

Before I continue to discuss amendment No. 4, I wonder whether the Minister is ready to answer—

Mr. Robert Sheldon (Ashton-under-Lyne)

Before my hon. Friend leaves the question of the chartering of ships, I wish to say that he was right to point out the complexity of the chartering process. Contracts can be entered into up to a year ahead, or even longer. Whereas the contract may be placed a long time ahead and, ostensibly, would not be covered by the provisions that deny the charterer the right to continue in that business, the actual orders placed for dealing with Iran could come at a subsequent time. Would those be covered by the restrictive legislation that we are discussing?

Mr. Dalyell

My right hon. Friend was the former Financial Secretary to the Treasury. He asked whether such charterers would be covered by the restrictions. I do not know the answer, but I hope that the Minister, when he replies— or possibly sooner—will give some answer. He may need help from civil servants in the Box, and I make no complaint about that. It is an important question. Is it now convenient for the Minister to reply to the question asked by my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands)?

Mr. Parkinson

The hon. Gentleman continually refers to amendment No. 4. I am not being difficult but, quite honestly, I am trying to relate his remarks to amendment No. 4, which states: after ' goods ', insert ' (other than the products of oil companies).' What point is the hon. Gentleman making? It certainly has nothing to do with amendment No. 4.

Mr. Dalyell

I was referring to chemicals and the products of oil companies in connection with amendment No. 4. On amendment No. 2 and the question of services, we must consider competition with Japan. Japan is the key to the success of the United States sanctions policy. The trade between Iran and Japan last year was $925 million. In March of this year alone it was $239 million. I give these figures to show how trade with Japan has increased dramatically since the Iranian revolution.

Japanese Government officials have said that their sanctions would not cover small companies because Japan's six largest trading companies account for nearly 80 per cent. of exports to Iran.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd)

The hon. Gentleman made the same point last night. Our evidence does not bear out his remarks. I would be grateful if he could give the House details of his evidence. We have no evidence that Japan intends to act through a small number of large firms. It has announced a set of measures against Iran which broadly reflects those announced by the European Foreign Ministers on 22 April. It has associated itself with the European statement, including those parts relating to economic sanctions.

I agree entirely with the hon. Gentleman about the importance of this point, but I am a little puzzled by the evidence that he has produced. It may be that his evidence relates to an earlier stage. Our evidence is that which I have given.

Mr. Dalyell

I refer to the Financial Times of 24 April, which quotes a Mr. Richard Hanson in Tokyo as saying: Japan is expected today to adopt the two-part package of diplomatic and economic measures against Iran which was worked out by the European Community countries in Luxembourg on Tuesday. Nevertheless, there are signs that the Japanese are eager to try to save the joint petrochemical complex which Mitsui and Company is building at Badar Khomeini. Mitsui is to despatch Mr. Hideaki Yamashita, president of the Japanese partner company, Iran Chemical Development, to Iran for a lengthy stay. The newspaper quotes Iran's acting Finance Minister, Mr. Salimi, as warning the Japanese Government that the future of the venture would be placed in jeopardy if Japan applied sanctions.

Is the Minister denying the report that 80 per cent. of Japanese trade with Iran is carried out by the six major companies? Is he denying that it is only the six major companies which will have sanctions applied to them?

Mr. Hurd

I have tried already to tell the hon. Gentleman of our evidence. We are in close touch with the Japanese on the matter. Our evidence, which is up to date, does not bear out the construction put by the hon. Gentleman on Japanese actions, which he has taken from certain newspaper cuttings.

Mr. Dalyell

I shall try to find the relevant cuttings. It is true that Iran's production now accounts for less than 5 per cent. of all non-Communist oil supplies. It is true that Iran's oil weapon is blunted and that a mild winter contributed to a fall of 8.5 per cent. in imports by the main industrial nations in the first quarter of this year as compared with 1979. With the general economic slowdown, the loss of Iranian oil could be weathered by industrial countries—that is, except for one, because Japan gets 10 per cent. of its oil from Iran, and the petrochemical complex costing $3 billion is the largest overseas project anywhere in the world on which Japan has embarked.

The question arises whether the Japanese will abide by sanctions. It was certainly the impression of some of our colleagues who were on a recent Inter-Parliamentary Union delegation that because Japan, more than any other industrial country, was dependent on Iranian oil, it was very unlikely that it would do so. If the Government have evidence that Japan will abide by sanctions and carry them through, they should say so. But some of us think that it is very doubtful.

Mr. Russell Johnston

That is exactly what the Minister has just said. It is not for me to speak for the Minister, but a minute ago he said that his up-to-date understanding was that the Japanese were prepared to implement a package comparable with that of the EEC. What assurances does the hon. Gentleman want?

Mr. Dalyell

I think that it is extremely unlikely that Japan would enter into any kind of full co-operation along those lines, because it has a $3 billion petrochemical complex, which is 85 per cent. complete, at Bandar Khomeini.

Given the warning that I read out from Mr. Salimi, some of us think that it is very unlikely that the Japanese will jeopardise their biggest investment outside Japan—and that is the threat they have had—in order to go along with the sanctions policy.

Switzerland is one of the few lifelines to the West from Iran at the present time. On May 27, Switzerland may decide to follow the United States example, but trade between Switzerland and Iran has increased in the first three months of this year over 1979. In 1978, Switzerland exported only 13 per cent. of chemicals. In 1980, chemicals accounted for 35 per cent., suggesting that the Swiss will follow the United States void. Therefore, one must ask whether the Swiss will go along with the sanctions policy. Again, that represents another gap. Indeed, many of the developing nations, such as Singapore, South Korea and the Philippines, would be only too delighted to expand their exports with Iran, even if in theory their Governments would like to support the United States.

That is the situation we face. Last night, the Minister of State said: We do not intend either to lag behind or to jump ahead of our other main competitors. We do not intend to take measures that have the effect of delivering trade into the hands of our competitors". In the circumstances that I have described, how can we be sure that that will be honoured? Some evidence must be presented to the House to show that the measures to be taken will be at all effective. The Minister of State went on to refer to the example of Mozambique and Cuba, and he said: one has only to study a little experience across the world, to know that there is no prosperity for Iran by hitching its economy to that of the East"—[Official Report, 12 May 1980; Vol. 984, c. 916–18.] However, what is to prevent firms from selling to East Germany or Czechoslovakia? Although it may be true that, at any rate in the short term, there are considerable problems for Iran in suddenly having to buy goods from Romania or East Germany, what is there to prevent British firms from selling goods which they would have sent to Iran to East Germany or Romania and having them transported by the Russian railway system? Again, that is an example of how unlikely it is that this policy will work.

That raises the whole question of the Eastern bloc. Tehran's long-term security rests on the willingness of the Soviet Union and Eastern Europe to replace Western companies. But, admittedly, some of those countries, do not have what the Iranians want. How will EEC countries know whether our exports to Eastern bloc countries are not passed on to Iran? What means of telling exist, or do we say to the Poles and the Czechs "You must not buy those goods in Britain as we suspect that you will be sending them to Iran "? Given the eagerness of Eastern bloc countries to get long-term oil contracts, particularly if deals are done on a barter basis, they have every incentive to get goods to Iran. That is the interest of the Eastern bloc countries.

5.15 pm

We must look at this against the fact that soon the Soviet Union will be a net importer and not a net exporter of oil. Therefore, it has every reason to get on terms with Iran.

With regard to the amendment dealing with transport, let us consider the position of Bulgaria. A Bulgarian lorry corn-many has 2,500 trucks operating to Iran and another 5,000 available. Its activity through Bazardam could certainly be stepped up by using the Turkish frontier crossings or, indeed, the Russian frontier crossings. Is not that just another example of the unreality of the proposals before us? The route from the Soviet Union via Astara and the rail crossing point at Julfa could certainly be improved, and, indeed, is being improved. At present there is heavy congestion at Julfa, but that is the result of the need for full customs documentation rather than any lack of facilities. More than the present 250 wagons a day could be handled if the paperwork was done in Iran. That again is evidence that what is being proposed with regard to the transport of goods is unrealistic.

In 1978, exports from COMECON countries to Iran amounted to less than 10 per cent. of those from OECD countries. But last year they rose to 20 per cent. There is obviously some limit to the extent to which Iranian firms can switch from their ordinary suppliers, but once a market is lost it is difficult to regain it

I do not want to be too long—

Mr. Russell Johnston

Hear, hear.

Mr. Dalyell

Well, a number of the amendments are grouped, and my hon. Friends know very well that this is our only opportunity to have any kind of proper discussion of the factual basis of all this. As the hon. Gentleman knows, orders restricted to one and a half hours allow very little time to raise the details of the subject.

We must also consider the position and reaction of the Arabs. The idea that we can just go along with current contracts and have no new contracts excludes any notion of tit-for-tat. There is anxiety that other Middle Eastern countries will show, or be obliged by their neighbours to show, solidarity with Iran by imposing a counter-embargo. The fact is—it was not really mentioned on Second Reading, as it might have been—that the Gulf as a whole could be alienated. What happens when the western Gulf States appeal to Iran for solidarity? Has that question been considered properly? I suspect that it has not. We are not just dealing with Iran. We are dealing with a reaction throughout the Gulf States and we are dealing with the whole Islam reaction.

There was a recent Chatham House paper, which is probably known to the Foreign Office, by Valerie Yorke, prepared for the Royal Institute of International Affairs. It was an interesting, revealing and deeply worrying paper. She states: The Saudi monarchy and Gulf Emirs have lost confidence in America's ability to assist them against invasions, coups and revolution after the failure to help the Shah. She argues that the Gulf rulers are not going along with sanctions and that they will want to reach an accommodation with the Ayatollah and other forces.

It is all very well talking of sanctions against Iran, but we should be under no misapprehension that we are putting in jeopardy our trade with the Arab world. That is a case that has been convincingly argued by the Chatham House paper. It is borne out by the speeches of my hon. Friends the Members for Waltham Forest and for Kingston upon Hull, Central (Mr. McNamara), who have recently returned from the Gulf area.

Mr. Robert Maclennan (Caithness and Sutherland)

I hope that my hon. Friend is not suggesting that the desire of Arab countries to reach an accommodation with Iran leads them to take a sympathetic view towards Iran's taking of hostages. The interest of the Arab countries and the Arab world in the maintenance of international law and diplomatic rights and practices is as strong as Britain's. There is widespread understanding of Britain's support of international law. My hon. Friend discredits the Arab world if he suggests that it does not understand our position.

Mr. Dalyell

The fact remains that the Arab world has made it abundantly clear that it does not approve of a sanctions policy against Iran. I do not doubt that Arab Governments feel strongly about the taking of hostages. Incidentally, the Russian Government came out against it. I think that almost every Government in the world see the threat to civilised international relations in the taking of hostages.

We are under an illusion if we think that the Arab world goes along with the policy of economic sanctions against Iran. I am prepared to give way to my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) if he wishes to deny that throughout the Middle East and the Arab world there is little support for the policy of sanctions.

Mr. Maclennan

My hon. Friend is adopting the tactic of raising fanciful suppositions and inviting other hon. Members in the Chamber to shoot them down. It is up to him to prove his case and not for us to rebut it.

Mr. Dalyell

I shall continue to quote from Miss Yorke's paper. She states: Iran's Revolution, now a year old, has unleashed destabilising forces in a region which supplies forty per cent of the West's oil needs. Undoubtedly it has marked a watershed in that country's relations with the West. But the most serious effect may still be to come. Iran's upheavals may compel the conservative rulers of the Gulf to adopt more nationalistic and more anti-Western policies in the interests of the survival of their regimes. It is too early to assess the long-term consequences of the Revolution for these are still being played out, but it has already had a number of important regional and global effects. In February 1979, the Shah's ' pro-Western ' and largely secular regime was replaced by a non-aligned Islamic one led by Ayatollah Khomeini. Iran subsequently abandoned its regional security role. With weakened armed forces, it could no longer act as a buffer between the Soviet Union and the conservative regimes in the Gulf. Economic and political chaos, and then conservationist oil policies, created oil shortages and encouraged price rises; these in turn influenced the pricing and production policies of other members of the Organisation of Petroleum Exporting Countries. Iran's relations with Western countries, and the United States in particular, became antagonistic because of their past association with the Shah. The rejection of internationally accepted rules (as in the seizure of American diplomatic hostages) deprived the West of ready means to reach an understanding with the new regime. Khomeini's Islamic Republic has created a number of problems for Saudi Arabia and the smaller Gulf states. Iran's withdrawal from its role as ' regional ' policeman has left them feeling more exposed.

The First Deputy Chairman

The hon. Gentleman, I fear, has not been able to persuade me that this is immediately relevant to any of the amendments that we are discussing.

Mr. Dalyell

It is, on the whole, a matter of trade and services. Of course, Mr. Godman Irvine. I bow to your ruling. However, I urge my hon. Friend the Member for Caithness and Sutherland, who has made a legitimate interruption, to discuss the issue with those of our colleagues who have recently returned from the Gulf. I urge him to read the Chatham House work on the subject, which must be well known to the Foreign Office.

Saudi Arabia and Jordan have both decided that security is best assured by keeping within the fold of majority Arab consensus and going along with Islamic solidarity. All the countries of the region deplore the prospects of concerted economic actions. They argue that the tightening of the screws can only increase instability in the region, to the detriment of existing regimes and to the advantage of the Soviet Union. The recent Islamabad conference showed the problem of Jerusalem to be more important to the participants than the Soviet action in Afghanistan.

The First Deputy Chairman

Order. Were any of these amendments being considered in Jerusalem?

Mr. Dalyell

I turn to banking, to which amendment No. 8 is directed. If the Government are serious about sanctions, why are banks and financial services excluded? An article on page 1 of the edition of The Times of last Friday states: As for the exclusion of banking and financial services, it was insisted that voluntary and confidential arrangements seemed to be working and ought not to be disturbed. Will the Government amplify that? Why is it that the banking arrangements should not be disturbed?

Mr. Donald Stewart (Western Isles)

The simple reason is that the British banks are coining the business that belonged to the Americans. They have done so merrily since the affair started.

Mr. Dalyell

I ask the Government to amplify their view. The right hon. Member for Western Isles (Mr. Stewart) agrees with me on few things in life, but in this instance we seem to be relatively united. The right hon. Gentleman's intervention is true not only of British banks but of Swiss and other banks. It is an issue to which the Government should respond.

Mr. Ioan Evans (Aberdare)

My hon. Friend the Member for Kingston upon Hull. Central (Mr. McNamara) asked what was meant by guidelines. He asked whether they would be merely exhortations or whether they amounted to more. No mention was made of guidelines before the Bill came before the House of Commons. If the guidelines are to be made known to the Committee while we are considering the Bill in Committee, perhaps the Minister will intervene to explain their nature.

Mr. Dalyell

It is in my recollection that when the term "guidelines" was mentioned my hon. Friend the Member for Kingston upon Hull, Central asked what it meant. Will they be more than exhortations as in industrial legislation? We have had enough difficulty about guidelines. We must be clear about their nature.

Mr. Heffer

If there are written guidelines, we should know what they are. It is the Minister's duty to give those guidelines, so that when these amendments are being discussed we can have them in front of us and can consider them. That is the only way that business can be conducted fairly.

5.30 pm

Mr. Dalyell

The Minister of State, Foreign and Commonwealth Office said yesterday: Restrictions…have been in force since the end of last year…The restrictions have been in force on the basis of guidance to major British institutions. They have worked satisfactorily and it does not seem sensible to legislate where an existing arrangement is working quite well."—[Official Report, 12 May 1980; Vol. 984, c. 920.] What guidance? My hon. Friend the Member for Kingston upon Hull, Central asked whether that power was legislative, a word in the ear or a bit of arm twisting.

My hon. Friend the Member for Aberdare (Mr. Evans) asked a relevant question. The Government should answer it. I hope that a Minister will come to the Dispatch Box and give some guidance. I promise to shorten my speech if the Minister will take up the question of guidance. Can he be tempted? He cannot.

Mr. Andrew F. Bennett

Will not my hon. Friend agree that it is important that guidance is given not only to banking institutions but also to the public? One of my constituents may lose his job. He may be made redundant if an engineering order is not fulfilled. He will want to know what sacrifices the banks are making. He wants that guidance to be made clear, so that he can see whether he is getting equal treatment.

Mr. Dalyell

That point raises the whole issue of parity of sacrifices. If people are made redundant at the Talbot plant in the constituency of my hon. Friend the Member for Nuneaton, or if they are made redundant in Liverpool, Workington or—dare I say it?—in Caithness and Sutherland, they will want to know why. Perhaps famous Caithness glass found its way to pre-revolutionary Iran.

What will the Iranians do about moving any of their $15 billion reserves? Most of those reserves are not subject to blocking orders. I see that my hon. Friend the Member for Oldham, East (Mr. Lamond) is nodding. Very little has been said about the role of those reserves. It is estimated that $4,000 million of Iranian deposits is in EEC banks. It is estimated that $1,500 million is in London and that about $1,000 million is in Paris. An attempt was made to place huge sums of deutschemarks. However, that was thwarted by the German authorities.

What is the Government's policy towards reserves held in London? Amendment No. 8 covers this point. We have the Minister's agreement on that. There is $3,800 million of frozen Iranian deposits with European subsidiaries of American banks. Several legal actions are being fought in London and other European centres, to determine whether American subsidiaries must follow instructions from American authorities. This question was partly dealt with last night.

Which banks will frighten depositors from oil-exporting countries? Until the Government clarify the position of German banks, and until they tell us whether those banks have gone further than British banks, we shall not be much wiser. Apparently, Bonn has pressed a four-point programme on the banks. The first point concerns the cessation of new credits to Iran's State or quasi-State institutions. The second point requires that no new accounts should be opened for official Iranian depositors. The third point seeks an undertaking not to increase Iran's non-dollar deposits. The fourth point suggests moving swiftly, on the slightest pretext, to declare Iranian borrowing in default.

Yesterday, the hon. Member for Peterborough (Dr. Mawhinney) raised the subject of banks. He asked for clarification about the position of British branches of American banks. The President of the United States has frozen financial transactions between American banks and Iran. However, the Bill will leave banks in Britain free.

Under the Bill, would British branches of American banks become liable? The Minister said that this question trenched on an old argument between ourselves and the Americans about the extent of their jurisdiction. I do not blame him, but he sought to pass the buck on to the Minister of State, Department of Trade. To his credit, die latter returned to this subject yesterday, at the beginning of his speech. I shall quote not from Hansard but from the Library copy. The Minister said: 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. Why is it not covered in the Bill?

The Minister continued: Iran has brought numerous actions in the courts to have its assets released, and the question is at present sub judice. I realise that we cannot get involved in matters that are sub judice. However, the Minister of State, Department of Trade will recognise that the hon. Member for Peterborough raised a substantial point. We need far more explanation than was given in a necessarily short speech at the end of a debate that had a 12 o'clock deadline.

We shall not have another occasion for discussing this issue. One-and-a-half-hour orders may be brought forward, and we shall not have time to discuss these issues. This is the last time that the House will be able to go into these issues in depth.

Mr. Parkinson

I hesitate to interrupt the hon. Gentleman and to revive what I hope are his flagging spirits. However, he has answered his own question once again. The matter is sub judice. As he has said, we cannot comment further. As a matter of interest, I shared a platform earlier this afternoon—it now seems like several months ago—with the silk who is representing the banks. He said that the issue will not be settled yet. Complicated and technical legal arguments are involved. Actions will come before the courts in November.

Mr. Dalyell

Those actions may come before the courts in November, but the policy will have gelled by then. That is part of the trouble. My hon. Friend the Member for Nuneaton has had some experience in the Department of Industry. He knows what we are on about. When thinking of the courts, one sometimes thinks of the Dickensian circumlocution office. These matters may be very complicated, but jobs are at stake. The issue is therefore urgent. It is all very well to say that the courts are dealing with this issue. I am not fishing for an intervention from my hon. Friend the Member for Caithness and Sutherland, but there is one law for lawyers and another for the rest of us. Lawyers take their time. Meanwhile, jobs and policies are at stake. I give way to my hon. Friend the Member for Nuneaton.

Mr. Les Huckfield (Nuneaton)

I am most grateful to my hon. Friend, especially as I had not intimated that I wished to rise. He is absolutely right, because, in layman's language, this is a glorious enabling Bill. Once the Government have got it through, they can do all sorts of things with it. My hon. Friend is absolutely right when he says that the issues must be decided here and now. It does not matter about Orders in Council, which will come too late anyway, and even in future debates in the House the Government will keep referring back to the decision that the House takes today. The Government must not shuffle off their responsibilities for a second day running. The Minister of State tried to evade and avoid matters last night. He must not do it tonight. We must know tonight, here and now.

Mr. Dalyell

All these points really must be followed up, because there is not another opportunity, and on this occasion there is plenty of time. I am not spinning it out for the sake of spinning it out. The truth of the matter is that the Government business managers, in selecting this day, knew very well that many of my colleagues who would have wanted to ask questions would not be here. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) has said that he would have made a speech for an hour, as would my hon. Friend the Member for Edinburgh, Central (Mr. Cook). All of them have parades and various engagements tomorrow. Do not tell me that the Government business managers did not know perfectly well what they were up to. [Interruption.] It may be that we shall have both today and tomorrow, because this Bill is much more important than the Gas Bill. [Interruption.] I did not hear the sotto voce interruption from the Minister of State, Foreign and Commonwealth Office. But, seriously, this is the last occasion on which we can probe these matters, and, coming back to amendment No. 8, it is the last occasion on which we can look at matters of compensation.

There is a great deal of confusion about the nature of the proposed boycott. It is all very well, but what is the position on compensation? Do we take it that people who lose money as a direct result of observing a boycott will not be able to claim compensation from the Government? The Department of Trade has said on this that it has never heard of anyone receiving compensation for complying with an official embargo.

The truth is that a number of firms have been geared over some years to a particular market. I shall not speak in detail in the presence of my hon. Friend the Member for Nuneaton, who has been in contact with George Turnbull and many of whose constituents work on the so-called Peycan project at Talbot. He will correct me if I am wrong. The truth is that if Talbot does not get some kind of compensation if it is excluded, it is in considerable trouble. My hon. Friend may want to make this point for himself. If so, I shall naturally give way to him. The point was shoved aside last night, because when my hon. Friend the Member for Coventry, North-East (Mr. Park), the former convener of stewards at Chrysler, wanted to interrupt on precisely this point—he has asked me to say that he is extremely bothered about the position—there was no reply. Therefore, in the Minister's reply, I hope that there will be a proper discussion of the Talbot situation.

What happens to current contracts in relation to compensation if the Iran customers' reaction is not to go along meekly with the plans of the West and the countries which are imposing sanctions? Their reaction will be simply tit for tat. I do not like to call it the stubborn Iranian question, but, of course, it is. If the Minister were a stubborn Iranian he would not sit by and dutifully say that he would honour current contracts to the letter, albeit that sanctions were threatened in the future.

The truth is that we are trying to have our cake and eat it. Simply to say "We shall see that there are certain exceptions for current contracts, but, of course, we shall not have new contracts" means that very soon, because it takes two to make a bargain, others will react in a human way. I ask the Minister: If he were an Iranian in this position, what on earth would he do? He would not go along meekly with a proposal put forward by his adversaries. It may be a rhetorical question, but it is a valid question because we are dealing with human nature.

5.45 pm

Human nature leads me directly, again on amendment No. 8, to the export credit guarantee situation. Somehow or other, firms have found that most of their customers have managed to pay for goods received before the revolution. It looked as if chaos caused to records by banks being attacked and disrupted during the overthrow of the Shah would lead to nonpayment. That is how it looked. The City of London thought that £800 million was at risk. Incidentally, the Export Credits Guarantee Department never disagreed with that figure. That was the doomsday figure which never materialised. The ECGD thought that it might have had to pay out £800 million. The Minister will correct me if I am wrong, but in fact it has paid out £80 million; and even under the ECGD investment insurance scheme losses have been remarkably low. I think I am right in saying that only 14 companies are said to have been involved, with a total of £12 million at risk. This is a very different scenario from the losses that have been suffered in other countries where there has been political upheaval.

Therefore, in relation to those supplies which are not covered by the embargo, what is to be the policy of the ECGD? Indeed, one must couple with that the question whether the Exchange Control Act 1947 and the Import, Export and Customs Powers (Defence) Act 1939 are consistent with the Treaty of Rome, because this raises very serious questions of our relations with our European partners in this matter.

It is the view of the Financial Times' writers on industry, from their telephoning around, that a partial recovery in British sales to Iran after the period following the deposition of the Shah will be wiped out by the proposed EEC embargo. That is the view that is being put forward. British sales to Iran in the first quarter of 1980 amounted to some £90 million. If this trade were extended, as it would have been throughout the year, this would take the total for 1980 to double last year's figure. Although about half of the first quarter figure consists of Talbot car kits and Land Rovers, this leaves a significant rise in other goods, and these include spare parts and equipment such as generators and pumps.

Talk as one may about completing contracts, the fact is that placings of new orders will go elsewhere and the recovery will be cancelled out. Once we have put on sanctions, do not imagine that we shall get back into the market just like that.

This links the question that is bothering a number of firms—the problem of under-invoicing. The Bani-Sadr proposal that a Government agency should be responsible for all purchases from abroad is designed in Iran as an anti-inflationary measure, but it is also to cut out the practice of under-invoicing to avoid customs duties. It is reckoned there that the bazaar importers have been paying possibly only half of their duties.

It is in these circumstances that I ask whether the Government are satisfied with the exchange control regulations which they are hoping to apply to Iran if the Bill becomes an Act.

We understand the Americans' position, but we should be clear about what is being asked. United Kingdom firms, which are the most competent in the market, are becoming increasingly confident about the trade resurgence. In 1979, United Kingdom sales to Iran were down by £500 million to £232 million, which was a fall of 69 per cent. If the current recovery continued, exports would be worth at least £353 million and probably £400 million by 1980. In spite of the turmoil of the revolution, we have nearly recovered to the amount that we were selling to Iran under the Shah. That is to the credit of British industry.

Mr. James Lamond

I admire the meticulous way in which my hon. Friend has prepared his material. I agree with most of his argument. However, he paints a rosy picture of the future, which he imagines would continue without the Bill. My hon. Friend reads many foreign newspapers. In the San Francisco Examiner on 15 May there was an article that indicated that the United States had prepared the ground for intervention in Iran by posting in a number of special agents disguised as business men. That is now known to the Government in Iran as a result of the abortive attempt to rescue the hostages. It will make business opportunities in Iran difficult in the future. Business men will be under suspicion and their opportunity to obtain new business will have diminished. I do not want to detract from my hon. Friend's argument—

The First Deputy Chairman

Order. Interventions need not be lengthy, even when speeches are.

Mr. Dalyell

My hon. Friend's intervention raises fundamental issues that were mentioned by my hon. Friend the Member for Eton and Slough (Miss Lestor) yesterday. Events did not begin with the taking of hostages. Agents were unwisely infiltrated by the Americans into Iran.

The First Deputy Chairman

Order. May I ask the hon. Gentleman to return to one or other of the amendments?

Mr. Dalyell

There is no doubt that there was infiltration. Many of the present rulers of Iran come from families who suffered loss at the hands of the Shah's secret police. That is part of the background to the argument. My hon. Friend's comments about phoney business men are extremely relevant. I have neglected my duty in failing to read the San Francisco Examiner. Nevertheless, I take my hon. Friend's point.

The recovery of the United Kingdom business with Iran will come to a grinding halt if we have sanctions. What has America to lose with trade sanctions? In December, America's trade to Iran was down to $6.6 million and in January $6.3 million, compared with $3,684 million in 1978.

The Foreign Secretary was in Washington on 4 May. He was asked on ABC TV whether he would support new military measures. He is reported as replying that Britain would have to be convinced that such measures would be likely to result in the hostages being freed, and he said that he thought that that was rather unlikely. Lord Carrington went on to say that our hearts were with the Americans. However, he made the point that sanctions, particularly by Britain and Italy, would place an infinitely heavier burden on Britain and Italy than on the United States. He told the American viewers that they should not underestimate what America wanted us to do or our willingness to help.

We should be clear that there is not equality of sacrifice. The sacrifice in terms of trade and jobs will be borne most heavily by the EEC and Western Europe, particularly Britain and Italy.

Mr. Alan Clark

The hon. Gentleman is right to draw the attention of the House to the inequality of sacrifice. Whatever may be the attitude in Washington, American private enterprise will regard our sacrifice as its opportunity. It will find ways to fill the gap through the circuitous routes that the hon. Gentleman mentioned.

Mr. Dalyell

Already, through Dubai and other ports, American goods are reported to be finding their way to Iran. For the same reasons as British industry, American private enterprise does not want to neglect its contacts. Once there is a technical cut-off, it is difficult to re-establish that technology. Once the Iranians switch to technology from Leipzig, engineering design from Dresden or trucks from Romania, they will not revert to their previous suppliers or snub those who helped them in a time of adversity.

My hon. Friend the Member for Oldham, East talked of the Americans preparing the ground. American business men have been preparing the technical ground. There is evidence that certain items in the chemical industry which can be obtained only from the United States are still finding their way to Tabriz and other Iranian cities. We are being asked to support our friends, but they are not being as vigilant as they might. I should like convincing evidence that there is an effective American boycott. I believe that the hon. Member for Plymouth, Sutton will agree that there is not an effective American boycott. Although American industry no longer has the $3,600 million trade with Iran that it had in 1978, it is nevertheless taking scrupulous care not to sever existing lines of communication. We have to talk frankly to the Americans. We have to tell them that before asking us to make lasting sacrifices they should be certain that the boycott of American goods will be watertight.

On the linked question of the renewal of contracts, I listened carefully at 11.55 pm last night to the Minister of State, in his winding-up speech, say that each case must be judged on its merits. What are the criteria for merit?

6 pm

Mr. Andrew F. Bennett

Would not my hon. Friend agree that, in judging each case on its merits, there is a danger of unfairness towards those British subjects who are at the moment in Iran, trying to obtain or extend contracts? They are anxious, as are their families, about their safety. At the same time, they are trying to negotiate contracts that may or may not be vetoed, because there is no clear information about what will be approved by the Government under possible regulations. It this not a very unsatisfactory situation? Would it not be more satisfactory if the Government spelt out in debate which contracts will be approved, which can be renegotiated or reviewed, and which will be firmly vetoed?

Mr. Dalyell

There is a profound obligation on the Government to spell out what my hon. Friend the Member for Stockport, North suggests. Although the Government may say that the matter was covered in the Minister's winding-up speech, one finds, looking closely at the Minister's remarks, that the valid point is not answered. The Minister said: There has been a great deal of talk about reluctance—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 sanction. It is not a job to which we are looking forward". That is the understatement of the year, I suspect, from the Government Dispatch Box. The hon. Gentleman went on: 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 emphasing 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.

Mr. Peter Viggers (Gosport)

On a point of order, Mr. Weatherill. I apologise for interrupting the hon. Gentleman in mid-flow. I was under the impression that in Committee it is not in order to make a Second Reading speech and certainly not in order to make someone else's Second Reading speech.

The Chairman (Mr. Bernard Weatherill)

I thank the hon. Gentleman. I have only just come into the Chair, as he will have noted. I have not heard what the hon. Member for West Lothian, (Mr. Dalyell) has been saying for the last two hours.

Mr. Dalyell

Are you suggesting, Mr. Weatherill, that I should repeat my remarks for your benefit?

The Chairman

Certainly not. Since the hon. Gentleman tempts me, I would say only that two hours spent moving an amendment is overdoing it a bit.

Mr. Dalyell

The problem, Mr. Weatherill, is that this is really the last occasion on which there can be any detailed examination of issues that are far more important to this country than the Gas Bill or any of tomorrow's business. One has to take one's opportunities in the House of Commons. This is the last opportunity for a proper examination. If asked how the matter should be properly discussed, I would be the first to say that I am not persuaded that discussion on the Floor of the House is the most satisfactory method of scrutinising seriously the issues at stake. It might have been preferable, had there been time, to have a Select Committee and a public hearing where all the issues could have been properly examined.

Hon. Members have a duty to carry out a proper examination of issues. We have to use the tools that are given us. Unless we take advantage of the tools that are available, there will be no proper scrutiny at all. The First Deputy Chairman of Ways and Means, who has been in the Chair, is very vigilant, as are my colleagues. I think I can therefore claim that I have not been guilty of repetition and that I have put forward valid questions that might have been better presented in a Select Committee. [HON. MEMBERS: "Hear, hear."]

Those of my colleagues who have been present say "Hear, hear". That is not sheer politeness. If my colleagues were critical, they would be the first to give me the proverbial bird and to give an enlarged yawn. There has been no waste of time. I have put these matters as succinctly as I can. I challenge any hon. Member to say that I have been irrelevant or time-wasting on any issue. I am approaching the end of my remarks.

I have to ask to what extent Orders in Council would be required to implement any specific sanctions that were decided. Would they come into force on being laid or would there be a time gap? My hon. Friend the Member for Nuneaton is concerned about the motor industry, as, also, am I and other hon. Members with constituents who work for British Leyland. We know that the Orders in Council are of considerable and critical importance.

Will Ministers confirm that under the Import, Export and Customs Powers (Defence) Act 1939 they already have power to interrupt existing contracts with Iran if there were a change of policy and if they thought it necessary? There are still considerable doubts about the whole issue of renewal and about what is an existing contract, a new contract and a renewed contract. My hon. Friends the Members for Dunbartonshire, Central (Mr. McCartney) and for Nuneaton have first-hand knowledge of the engineering industry. They know that what is termed a new contract is a very slippery definition. When one enters into some kind of package deal, it is difficult to know what element of that package is new business and what is business that legitimately follows from previous business. I should like the Government lawyers to explain this matter.

I should like to end on a note of agreement with the Opposition Front Bench. Should not total trade policy be taken to the United Nations? We shall return, on amendments Nos. 36 and 37, put forward by the official Opposition, to the question of EEC countries. But there can be no sensible policy on sanctions without full and meaningful United Nations backing. The United Nations should put its deeds where its mouth is and do something about the matter. From remarks made yesterday and today there is clearly no chance of that kind of enthusiasm. Although one deplores what has happened to the American hostages, there is no international will to make the kind of proposals that the Government have put before the House work in any meaningful circumstances.

I offer no apology for trying to conduct a serious and courteous examination of the issues. Unless we make the most of the opportunity to examine the grave issues that are at stake for this country, we shall drift into a situation of deeper involvement for which we shall have only ourselves to blame.

Mr. Eldon Griffiths

I am not sure how to follow the hon. Member for West Lothian (Mr. Dalyell) in his fairly lengthy excursion, but my speech will differ from his in that it will be a great deal shorter.

I address myself to amendment No. 3, on transport, amendment No. 4, on oil, amendment No. 8, on banking, amendment No. 10, on international obligations, and amendment No. 11, on compensation. I do so because since 1974 I have had the honour to be the chairman of the British-Iranian parliamentary group in this House and during that period I have frequently travelled to Iran to promote British trade and investment. I declare an interest, in that I have a directorship of a large British engineering group that sells goods from the Midlands to Iran. I have also assisted with British transport enterprises in Iran and British banking enterprises there.

Like my hon. Friend the Minister of State, I deeply regret the necessity for this legislation. Both he and I have spent a great deal of time promoting British trade, jobs and profits, and it is, therefore, with a sense of sadness that we see a great deal of hard work in both private and Government sectors going down the drain with the Bill.

I am not only sad; I am a litte sceptical. I agree with the point made by the hon. Member for West Lothian at the beginning of his speech when he said that it was most unlikely that any of the Bill's provisions would be effective. I have spent enough time in Iran and the Gulf States to know that the attempt of the United States to prevent goods and services from getting into Iran has already proved ineffective, because of the numerous back doors through which many merchants, Americans included, are continuing to convey American goods to Iran.

I regret the Bill and I doubt whether it will succeed. Nevertheless, I support it for the two reasons that were put forward in the debate last night. First, we must record our abhorrence of the Iranian treatment of the American hostages, and this is the only way available to us. Secondly, we must, as a matter of national interest, support the United States.

I turn specifically to the amendments and confine myself to asking a number of specific questions of my hon. Friend the Minister of State, whose task I do not envy. Amendment No. 3 deals with transport. No doubt this will prevent British airliners from continuing to land in Tehran or Abadan. Has any calculation been made by British Airways of the revenue consequences, and, if so, can my hon. Friend give us an indication of these? It is important to our relations with the United States to demonstrate how much we are doing in the interests of the Alliance. I do not ask my hon. Friend for precise answers, because this will arise only as and when orders are made. However, the House will expect to probe the cost to our airlines.

6.15 pm

Amendment No. 4 deals with the oil companies. As, when and if the appropriate order is made, will my hon. Friend undertake to give an estimate of the consequences for British Petroleum? I am not sure whether oil is excluded, but the amendment proposes that it should be. I ask my hon. Friend to consult BP, because at present it is one of the few oil companies in the world that is short of crude oil. It has lost oil in Nigeria and the Middle East; therefore, it is a matter of consequence to have an estimate of the loss of Iranian crude oil.

Amendment No. 8 deals with the banks. I reiterate the question put by the hon. Member for West Lothian, who asked about the position of Iranian reserves held in London. I believe that the Bill would have been better had it been shorter. The one clause that would have been better left out is that which excludes the banks, to which amendment No. 8 specifically refers. If it is the case that the guidelines—the practice of the banks—are sufficient and, therefore, they do not need to be covered, what is the point of specifically excluding them on the face of the Bill? The Bill gives general powers to the Government. It says: Her Majesty may by Order in Council make such provision in relation to contracts in any way relating to or connected with Iran, being either contracts for services or contracts for the sale, supply or transport of goods, as appears to Her to be necessary or expedient". That is a general power. It could be applied to banks or anything else. It would be open to the Government to exclude banks if they wished to do so. The Government are taking powers to do anything that they believe to be expedient or necessary. Therefore, they can deal with the banks or not deal with the banks, as they judge expedient. I can only conclude that the Government, for the most part, think that it is inappropriate to apply the powers to the banks, save only through the guidelines. If that is their thinking, what is the point of having the exclusion on the face of the Bill?

In a matter of this sort, it would be far simpler to bring to the House a simple enabling Bill and then to rely on specific orders for specific matters. If the Government did not think that the banks needed to be covered, no order would be required.

Amendment No. 10 deals with international obligations. I hope that there is no intention to apply sanctions to the international rescue operations that are so frequently needed in Iran. Very few countries have such a propensity for terrifying earthquakes as does Iran. From time to time we hear of whole towns and villages being destroyed and tens of thousands of people being made homeless. It is a remarkable feature of our relations with Iran that over the years we have provided considerable aid to deal with natural calamities. It has stood our country in good stead that we have responded to natural disasters in a generous way.

I hope that my hon. Friend will give an assurance that neither the United States nor ourselves will allow the sanctions legislation to stand in the way of international rescue operations. My hon. Friend may say that food and medicines are excluded, but there are many other items, such as blankets, that can be of assistance in international rescue operations.

I must make my only contentious remarks on amendment No. 11, which proposes that if there is a failure to secure a contract as a result of the legislation, those who are made redundant or put on short time should receive compensation. It is the sheerest humbug for those who have put their names to that amendment to make such a proposition. It will be impertinent of them to move it.

Labour Members frequently demanded that trade with Iran should be cut, because they did not like the Shah. At that time, no tears were shed about the difficulties of our exporters and no hon. Members made two-hour speeches about the loss of production schedules or the difficulties that our industries would face. There were no demands for compensation for those made redundant.

Labour Members took a different view of the Shah and were for ever demanding the very sanctions against Iran that they are now opposing.

Mr. Ioan Evans

The hon. Gentleman referred to the hon. Members who are associated with the amendment. Will he name one of those hon. Members who did what he alleges? Is he saying that my hon. Friend the Member for West Lothian (Mr. Dalyell) called for sanctions against the Shah?

On the question of attitudes, have not a number of Conservative Members said, in debates on Rhodesian sanctions, that they are opposed to any economic sanctions? Yet they are bringing forward the Bill.

Mr. Griffiths

Within the British-Iranian parliamentary group we have had many debates on that specific matter. The hon. Member for West Lothian is not a signatory to amendment No. 11. I am addressing my remarks to those who have signed that amendment.

Mr. Andrew F. Bennett

The amendment stands in my name, and when it originally appeared on the Amendment Paper it was in my name only. Can the hon. Gentleman quote one instance of my having done the things that he accuses me of doing?

Mr. Griffiths

I do not intend to get into that argument with the hon. Gentleman. He knows that during the long period of the Shah's regime there were numerous debates in the House, in Committee and outside on the question whether Britain should continue to trade with the Shah's regime, which many people thought was tyrannical, corrupt and damaging to the cause of progress for the Iranian people. They demanded that we should stop the exports of arms and engineering back-up facilities. When talking about a large tank programme or an arms complex, hon. Members should remember that our engineering industries produce conveyor lines and electronic systems that are not armaments but are critical to those industries.

It is ironic that those who oppose the sanctions proposed in the Bill demanded that jobs should be lost, that export contracts should be stopped and that no compensation should be paid, because they disagreed with the Shah's regime. The Shah's regime may have done a number of things, but it never held hostages against international law. It is therefore humbug for hon. Members to have tabled amendment No. 11.

Mr. James Lamond

Will the hon. Gentleman give way?

Mr. Griffiths

No, I must conclude. The hon. Gentleman will have an opportunity to make his own speech.

I regret the necessity for the Bill, but I support it for the reasons that I have outlined. I hope that my hon. Friend the Minister for Trade will tell us that no omnibus order will be made but that any order will be precise and related to the specific goods and services that the Government seek to prevent being exported to Iran. With an omnibus order we shall not have an opportunity, within the one and a half hours that will be allowed for the debate, for the proper examination that the House should give to such matters.

I hope that my hon. Friend will also be able to tell us that there is no question of orders being laid unless our friends, allies and competitors are taking the same line, and that no orders will be brought forward unless he is satisfied that every diplomatic avenue has been exhausted. One great advantage of the Bill is that it may strengthen the arm of those who are seeking a solution that will make the powers provided in the Bill unnecessary.

Mr. Andrew F. Bennett

The attack by the hon. Member for Bury St Edmunds (Mr. Griffiths) was grossly unfair to the hon. Members who have signed amendment No. 11. I cannot see among those who have signed the amendment the name of any hon. Member who has argued for general trade sanctions against the Shah's regime.

A number of us were critical of the the arms sales to the Shah's regime, just as we have been critical of arms sales to other people and critcal of the whole armaments industry. We have argued consistently not only that we ought to cut our arms sales but that we should ensure that those in British industry had alternative useful jobs as a necessary compensation.

It is ironic that some of those who defended the arms sales to the Shah's regime have seen some of the arms used for purposes that they do not like. Of course, if we sell arms it is difficult to guarantee that the circumstances in which they will be used will be circumstances of which we approve. The suggestion of the hon. Member for Bury St. Edmunds that there were proposals for other sanctions against the Shah is grossly unfair.

I was surprised to hear the hon. Gentleman propose that the Government should have gone for a general enabling Bill. It is unsatisfactory to give Ministers powers to do what they like. If we followed that line, we could end up with Parliament meeting just after a general election, passing a short Bill providing that the Government could do what they liked for the next five years, and all hon. Members going home.

It is important to spell out on the face of a Bill the intentions of the Government and to make sure that regulations merely carry out the details and do not set out wide areas of policy.

I wish to speak in support of amendments Nos. 8, 9, 10 and 11. There is considerable concern in Stockport, both in large firms, such as Mirless Blackstone, which may find big orders being put in jeopardy because of the Bill, and in small companies that may be directly affected or affected as subcontractors.

The people of Stockport have no basic objection to a boycott, as they demonstrated in the nineteenth century during the period of the cotton famine at the time of the American Civil War. However, they want to know whether a boycott will be of any use and what is to be its direct purpose. They are particularly unhappy that even by reading the Bill they cannot find out what is proposed.

There are those in Stockport who have had friends and relatives in Iran trying to negotiate, renew or continue contracts over the past six months. They have been concerned about the well-being of those people and their safety, in the light of television programmes and newspaper headlines that have appeared in this country. They want to know whether all that effort and all that worry were in vain, and they would like to be able to see, in the Bill or in a clear statement by the Government, precisely what is intended.

6.30 pm

Of course, those who may be contemplating having to go out to Iran in the next few weeks to continue negotiations for contracts will want to know whether all their efforts will be entriely wasted or whether they can go ahead. They are also concerned about the implications for future years, and whether this measure will blight trade for a long time ahead.

Mr. Dalyell

Do the small companies in Stockport see that they are under threat from small companies in Japan? My hon. Friend was in the Chamber when the Minister of State, Foreign and Commonwealth Office challenged me on my statement that only six major Japanese companies were affected. Because of the wealth of material at my disposal I could not immediately find the statement, but I can now quote from The Times of 25 April 1980. It says: Japanese Government officials said the sanctions would not cover small companies because Japan's six largest trading companies account for nearly 80 per cent. of exports to Iran. The measures also exclude exports of food, chinaware, general merchandise". If British small companies, including those in Stockport, are affected and small companies in Japan are not affected—if The Times report under the bye-line "Peter Hazelhurst, Tokyo, April 24" is correct—are not our firms at a disadvantage?

Mr. Bennett

I think that our firms are at a complete disadvantage. I think that the small firm is also at a major disadvantage, because it cannot be sure what is happening and it does not have within its staff anyone who can afford to be an expert on the regulations. The staff find it hard enough to find their way through the normal import and export regulations without trying to produce someone who is an expert in this sort of area.

What they are looking for from the Government is a clear statement so that they may know what they are entitled to do. The Government are supposed to be concerned to help the small business man, but from the way the Bill is presented and the way the debate has gone it seems to me that they are not giving people clear guidance about what is happening. I think that many people are worried that the Government will come in at the end and veto contracts rather than give them guidance at the start. Most small business men feel very resentful about the amount of work that they have to put in when they do not get a contract in the end. They will feel even more resentful if, having got a contract, they find that the Government have stopped it without having told them at the start that they were wasting their time.

Certainly people in Stockport are very concerned whether or not the banks are to be included. I understand that the Government are really saying that they are already getting the co-operation of the banks, but I think that it is important that the effect on the banks is seen, because it is not easy for my constituents, who could well be asked to work short time or could lose their jobs, to see what sacrifice is being made by the banks.

Mr. Parkinson

It might help the hon. Gentleman if I explained it to him like this. The banks have already effectively stopped taking business from Iran and have done so from the beginning of this year; they have not extended further credit or accepted any further deposits; they have frozen their position. They are already in the position in which the hon. Gentleman is scared that some of his manufacturing companies might be; they are not accepting any contracts, and future contracts started for them in January.

Mr. Bennett

But as far as the continuing contracts are concerned they are all right, and as far as the freezing of assets is concerned those assets go on bringing them interest and money, so that their position is very different from that of a firm that is dependent on individual contracts. However, I thank the Minister for his intervention, although I do not suppose it will convince many of my constituents.

The next question concerns amendment No. 9, which deals with the renewal or extension of contracts. I hope that the Government can be specific about this, because there is a whole series of contracts in which there is a clause providing that a new contract can be worked out if everybody is agreed and a price can be fixed, and so on. Sometimes the wording is pretty specific, but sometimes it is fairly vague—a matter of little more than a general feeling of agreement between the parties that if everything goes well the contract will be continued. I believe that it is important that on the face of the Bill rather than in the regulations it is made clear what is involved.

Amendment No. 10 deals with the question of international obligations. I do not want to develop that much further, but I hope that the Minister will make it absolutely clear, where there are over-flying rights, questions of air safety, and so on, how far these will be involved in any sanctions.

The final question concerns compensation, and it seems to me that this is the most difficult one. If we want to get the hostages released, however, it is necessary to say that there should be equality of sacrifice and effort. It is particularly important that that sacrifice be shared by everybody in this country and in other countries that are participating. What worries my constituents is that at the moment there is not a great deal of evidence that that sacrifice will be equally shared. If they are to be made redundant or if there is to be a loss of jobs, that ought to be taken specifically into account.

I appreciate that this is a very difficult area. It is easy enough for a company to say that it would have got a contract but for this, but it may well be that in 10 years' time the company could still be saying that it did not get a contract because of the hard feeling that existed. This is one of the problems that my hon. Friend the Member for West Lothian (Mr. Dalyell) referred to earlier. But there are some areas where it can be shown specifically that jobs have been lost because of lost contracts, and the Government ought to be looking very hard at ways in which they can help those companies to find alternative markets or to compensate them.

I accept the arguments about other parts of the world and I would argue strongly that if sanctions of this sort are applied the community has a duty to make sure that people do not suffer as a result. It may well be that if the companies with which I am concerned in Stockport were facing a booming world market they would be in a position to pick and choose. Unfortunately, at the moment they are not, and orders lost in this situation may be crucial to them.

Mr. Eldon Griffiths

I call to the hon. Gentleman's mind, because of the comparability here, what happened in the case of Chile. Numerous British jobs were lost, and contracts were lost, because the aircraft engines that the Chilean Government had ordered and paid for were not delivered, owing to an upwelling of political sentiment in this country Does the hon. Gentleman suggest, as a matter of principle, that the taxpayer should become liable because of an up-welling of political sentiment, on one side of the House of Commons or the other, that leads to a breach of contract?

Mr. Bennett

It seems to me that we ought to accept responsibility. I do not think it is reasonable for us to argue that somebody else ought to be making the sacrifice rather than us. That is the danger of this measure; it is up to somebody else to make the sacrifice. It is a fairly important principle that those who ask people to make sacrifices ought to be prepared to make those sacrifices themselves and that there ought to be some equality of sacrifice. It seems to me, from the way the Bill is presented at the moment and from the negotiations with our so-called allies, that there is not a great deal of evidence that there will be equality of sacrifice.

I hope, Mr. Weatherill, that you will allow separate votes on amendments Nos. 9 and 11. I wish to make it absolutely clear that I and, I am sure, the vast majority of my constituents condemn the attitude of the Iranian Government and that our opposition to the Bill is not to condone what they are doing but simply to argue that what we need are effective measures rather than ones that appear to many of us to be a sham and to have little substance.

Mr. Alan Clark

I shall speak to amendment No. 10, which refers to the aspect of international obligations. In earlier exchanges it was mooted that this amendment might allow fairly wide latitude to those of us who did not manage to catch Mr. Speaker's eye in the Second Reading debate.

The element in the Bill that I welcome and that would be enhanced by acceptance of amendment No. 10 is its frailty and imprecision. By simply paving the way for a series of enabling orders it amounts to little more than a gesture. The inclusion of the amendment would make it possible for the emissaries of the Foreign Office to get out of practically any requirement that might later be imposed upon them in enforcing what is alleged to be the purpose of the Bill.

It might be thought tactless to draw attention to this. The Foreign Office might not welcome the fact that we have rumbled this so early on, but it is appropriate to get the issue out of the way now, because circumstances might change. In the one and a half hours allowed for debate when an Order in Council is put before the House, if we adopt a hypocritical attitude to the Bill at this stage we might then be asked to eat our words and give greater strength or teeth to the present completely impotent document.

If we included paragraph (c) we should be able to tell the Iranians that the Bill was pure shadow boxing, for the purpose of presenting a temporary facade of conformity with the Alliance. It is necessary only to look at the provisions to know that nothing will happen and that trade will proceed as we all wish. There should be no question of substitution, as the hon. Member for West Lothian (Mr. Dalyell) put it. That dangerous element, to which he drew our attention in discussing other amendments, can be short-circuited by explaining that with these three exclusions the Bill is worth so little that it need not worry anyone.

Sir Raymond Gower (Barry)

Will my hon. Friend describe the sort of international obligation that he has in mind?

Mr. Clark

In this context, the very imprecision of the amendment seems to me to be an advantage. By being so widely drawn it will allow our negotiators to exclude at will whatever they choose.

We have to take care that the Bill is, in essence, no more than a piece of shadow boxing, because it is not even in the interests of the United States. The purpose of Iranian sanctions is to make conceivable the re-election of the most disastrous incumbent of the White House since President Harding, and that probably is not in the interest of the Americans.

The Bill interferes in the internal political arrangements of the United States and Iran. It is in all our interests to ensure, by such amendments as we can impose upon it, that its effectiveness is so reduced that we shall never be called upon by Orders in Council to give it the force that it was originally conceived to possess.

6.45 pm

Mr. Russell Johnston

The problem with the amendments is that their whole purpose is to make the Bill ineffective. They are not amendments, in the sense that if they were accepted they would negate not just part of the Bill but the whole purpose of the Bill. Our arguments are not about the amendments but about the general purpose of the Bill.

The argument about transportation was dwelt upon at some length by the hon. Member for West Lothian (Mr. Dalyell). He said that unless there were agreements with Turkey—not to mention the presence of many willing Bulgarian lorry drivers anxious to transport goods across Bulgaria—and the countries that border upon Iran to prevent their importing the goods and then transporting them to Iran, the whole object of the exercise would be vitiated.

As the Minister said in his intervention, there is a great deal of truth in that The Bill does not pretend to deal with such a matter. If that is advanced as an argument of substance against the effectiveness, apart from the appropriateness, of the legislation, I fail to see why that argument was not adduced against sanctions in Rhodesia, given the position and attitude of South Africa. Precisely the same argument applies, and for the same reasons the aforesaid sanctions were not as effective as it was argued they might be.

The hon. Member for Liverpool, Walton (Mr. Heffer) said that we were in the business of gesture politics. It is widely accepted by those who support the Government's proposition that the Government are bringing forward this legislation in the open-eyed knowledge that in terms of efficacy it leaves a great deal to be desired. Nevertheless, the position was fairly set out by the right hon. Member for Stepney and Poplar (Mr. Shore), in an extremely pertinent and well-argued contribution, showing that the object of the exercise was to bring pressure upon the authorities in Iran for the purpose of securing the release of the hostages who have been held in flagrant disregard of international obligations for more than six months.

The hon. Member for Stockport, North (Mr. Bennett) spoke about spreading the load. The hon. Member for Bury St. Edmunds (Mr. Griffiths) quoted the example of the aero-engines that had been paid for by the Government of Chile and subsequently were not sent to that country. There have also been arguments for arms embargoes of certain kinds on different countries at different times and for different reasons.

The hon. Member for Stockport, North argued that if the Government, or Parliament, approved this legislation we should consider whether there was any way in which we could compensate the firms and their employees who were dependent for their livelihood upon trade with Iran. He argued that they would have to bear the costs, in real terms, of, let us say, our act of moral support for the United States. We should consider that point carefully.

Though the hon. Member for Bury St. Edmunds is correct in saying that this is a principle that has never been contemplated before by the Government it is, nevertheless, something that we cannot avoid considering if we are to take this step, which I support. I support it reluctantly, but I support it. I believe that our support should be in the terms outlined by the right hon. Member for Stepney and Poplar.

It would be wrong if the national burden of our asserting this position were to fall in haphazard fashion upon certain firms and individuals who would have to carry the moral burden of the action that we propose to take. I am not being dogmatic about this matter; I am simply picking up the point made by the hon. Member for Stockport, North and suggesting that this is an argument that deserves support. I am not necessarily saying what should be done about it, but it seems to me that the hon. Gentleman has put his finger upon a potential domestic crisis that we may cause in seeking to correct an external international injustice.

Sir Raymond Gower

Are not the consequences described by the hon. Member for Inverness (Mr. Johnston) to firms and their employees inevitable when sanctions are applied to any country?

Mr. Johnston

The hon. Member for Barry (Sir R. Gower) makes a fair point. I admit, as did the hon. Member for Bury St. Edmunds, that I am extremely doubtful about sanctions as a general proposition. I take the view that our response to the imprisonment of the hostages should, in the first instance, have been a diplomatic response. In other words, we should have tried to reply in kind rather than attempt to widen the issue into the commercial area.

This legislation is introduced as an agreed proposition to bring pressure to bear on Iran in order to effect the release of the hostages in response to a direct plea from the United States. I am prepared to accept that that is a plea to which we should respond.

Mr. Ioan Evans

We are debating methods by which pressure can be brought to bear upon Iran. The hon. Member for Bury St. Edmunds (Mr. Griffiths) attacked some of my hon. Friends—without naming them—by saying that they had suggested earlier sanctions against Iran.

I think it is deplorable that an hon. Member should make accusations of that kind while failing to name the hon. Members whom he was attacking. The hon. Member failed to mention the name of any hon. Member who had said that there should have been economic sanctions against Iran during the regime of the Shah.

As has been clearly stated, there are hon. Members who have from time to time said that we should not sell arms. They have said that not only should we not sell arms to Iran but that there should be no trade in arms. That is a respectable view that should not be distorted in the way the issue before us was distorted by the hon. Member for Bury St. Edmunds.

My hon. Friend the Member for West Lothian (Mr. Dalyell) made an admirable speech and gave us a comprehensive survey of the issues. It needs to be said that we are dealing with amendments to the Bill and not whether we deplore what has happened to the American hostages. The House is unanimous in its condemnation of the taking of hostages of any nationality who are acting in a diplomatic capacity in another country. That goes without saying.

However, I say it again because there has been an attempt on the part of some supporters of the Bill to suggest that those of us who are opposed to this particular measure are prevaricating in our condemnation of the arrest of the American diplomats in Iran. We are not prevaricating.

We debated Rhodesian issues for years and we heard hon. Members—including, I think, the hon. Member for Bury St. Edmunds—condemning economic sanctions as a mechanism that should never be adopted. Those hon. Members who opposed the sanctions against Rhodesia said that sanctions were wrong in principle and that we should never contemplate imposing them. Yet this Government—who when they were in Opposition condemned economic sanctions against Rhodesia—are now putting forward proposals for such sanctions against Iran.

Let me make my position clear. I believe that there are times when economic sanctions should be used. I supported the economic sanctions imposed by the British Government upon the illegal regime in—

The Chairman

Order. I am sorry to interrupt the hon. Member for Aberdare (Mr. Evans). I called him because his name appears in support of the amendments. It is not in order for the hon. Member to make a Second Reading speech.

Mr. Evans

I was about to say why we had tabled these amendments and I intended to move on to discuss the general principle.

It has been said that we might not be supporting economic sanctions. Some of us in Opposition wish to make amendments to the Bill and draw attention to certain of Government's proposals. It is not that we are opposed to economic sanctions. Cases can be argued for the imposition of economic sanctions. In the context of this proposal, though we are unanimous in our view that the hostages should not be held by the Iranians, we suggest that economic sanctions are not the instrument by which their release will be secured.

I compliment my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) on his persuasive speech yesterday. He suggested a course of action that the Government could take. We have raised the matter in the Security Council but there was no unanimity on that occasion. If we are to have sanctions, I believe that those sanctions should be imposed by the United Nations

7 pm

The Chairman

That is a Second Reading point. The amendment states: leave out ' either contracts for services or '. Other amendments deal with leaving out transport or oil companies. The debate is not about general sanctions. That took place yesterday.

Mr. Evans

I am coming to the specific issue. The amendments deal with contracts, transport and the products of oil companies. The Bill excludes the products of oil companies. The Bill excludes banking. The amendments highlight that the Bill is a gesture to the Americans. In that gesture we are trying to persuade them that they should not take military action in return for our imposition of economic sanctions.

Sir Raymond Gower

Does the hon. Gentleman agree that the amendments make nonsense of the Bill and that if they were passed it would not even be an effective gesture? If one wants a valid Bill or valid sanctions, one cannot approve these absurd amendments.

Mr. Evans

The Bill is nonsense. The Bill states that an order shall not apply to any contract made before the date on which the Order is made". That means that all existing contracts with Iran stand. What a strange form of economic sanction that is.

The Chairman

Order. I should be grateful if the hon. Gentleman would reserve such comments for Third Reading.

Mr. Evans

I think that you are being a little harsh, Mr. Weatherill. I was replying to the hon. Member for Barry (Sir R. Gower). We are seeking to deal with the clause and the amendments which refer to the Orders in Council. The Orders in Council will give specific detail to the Bill's provisions. Only in Committee can we find out what the Government intend to do. We are told that existing contracts will not be affected.

Mr. Dalyell

Is my hon. Friend sure that such contracts will not be affected? If he or I were in the position of Iranian decision-makers, having to deal on a day-to-day basis with the problems, would we be prepared to sit idly by and say "All right, the West can do this to us. The West can have its policy on the current contracts and we shall fall in with it"? There is a considerable incentive, even with a financial loss, in not going along with the wishes of those who make life difficult. Is not that human nature in current-day Iran?

Mr. Evans

Real dangers have been mentioned in the debate. My hon. Friend the Member for Nuneaton (Mr. Huckfield) talked about the car industry. At Newport docks cars are ready to be exported to Iran. Chrysler, now Talbot, had a strong trading arrangement with Iran for parts to be shipped from here to be assembled in Iran. Undertakings were given to the previous Government about Talbot continuing those arrangements. If that contract is ended, the factory producing Talbot cars could be closed and the cars could be produced in France. The French Government could say "Sanctions are being imposed by your Government. A new situation is created."

Amendment No. 8 deals with the exclusion of banking. The clause states that an Order in Council shall not apply to any contract with a bank or other financial institution for the provision of banking or other financial services. The Bill borders on farce. Exemptions are being made by the Government. We can argue about whether sanctions are the answer. They must be discussed at United Nations level. If the United Nations agrees, we should go ahead. Will sanctions help? As the Minister said, we are not sure what effect they will have. We are not sure whether the Bill will be beneficial.

I deplore the arrest of the hostages. They have been dispersed, but they are still alive. I hope that they will be able to return eventually. Are we doing something that could provoke a reaction? We must examine that. We are not discussing whether we want the hostages to be released. The House is unanimous in believing that it is wrong that diplomats should be taken and confined as they have been in Iran.

Yesterday we had a Second Reading debate on the Bill and at the same time the House of Lords was dealing with the Southern Rhodesia (Sanctions) (Amnesty) Order 1980.

The Second Deputy Chairman (Mr. Richard Crawshaw)

Order. The hon. Gentleman is well outside the ambit of the amendments. He should at least make a casual reference to the amendments which we are supposed to be discussing.

Mr. Evans

I shall come to a conclusion shortly, Mr. Crawshaw. I was making some general remarks about the whole nature of the Bill.

The Second Deputy Chairman

Order. The hon. Gentleman is not entitled to make remarks about the whole Bill. We are discussing amendments. Unless he can relate his remarks to them, he must resume his seat.

Mr. Evans

I was making one or two general remarks.

It is strange that we are discussing a Bill which is not as firm as the United Nations sanctions resolution on Rhodesia. Exemptions were included in the United Nations resolution on Iran, but under the Bill oil is exempt. Fancy dealing with Iran, a major oil producer, and exempting oil from sanctions. That is not laid down in the Bill, but that is what the Minister told us on Second Reading.

The question of banking is dealt with in amendment No. 8. Presumably, it would be permissible for foreign companies exporting to Iran to be financed by banks in Britain. The Minister told us that certain guidelines have been issued to the banks, but the details have not been made known to the House. If the Government have taken certain decisions about the major financial institutions, we are entitled to know the details.

Mr. Dalyell

My hon. Friend talks about the oil industry. It is difficult to define what is an oil industry and what is a chemical industry. In my constituency there is BP Chemicals, which is half in the oil industry and half in the chemical industry. I know that in South Wales there are similar problems. That is part of the difficulty in trying to define one group of materials which includes another group of materials—chemicals—in another category.

Mr. Evans

As my hon. Friend said, it is a wide area. One hon. Member said that a deal had been arranged whereby Japan would import oil from Iran. We heard also that gas from the oil industry in Iran would continue to be supplied to West Germany, Czechoslovakia and other countries. Apparently that is to be allowed to continue, yet oil is to be excluded.

Sir Raymond Gower

Will the hon. Gentleman point out where in the Bill it states that oil is excluded? If it is excluded, what is the purpose of amendment No. 4? I put it to him that oil is not excluded by the Bill.

Mr. Evans

The hon. Gentleman might put that point to me, but I cannot answer for the Government. The Government made a categorical statement that oil is excluded. It will be interesting to see whether the Government accept the amendment. The hon. Gentleman was not in the Chamber for the Second Reading debate yesterday when, in reply to a question about the oil deal with Japan, the Minister made a categorical statement to the effect that oil would be excluded. The amendment was tabled to discover the Government's view on the matter. If they are to exclude oil, let them accept the amendment

Mr. Parkinson

Let me put the hon. Gentleman out of his misery. He is making very heavy weather about a non-point. His argument is based on a misconception. There is no intention that the powers under the Bill or the 1939 Act should be used to control the import of oil products. As far as I know, we do not export much oil to Iran.

Mr. Evans

The Minister is not getting away with that statement. Britain is now an oil exporter because of North Sea oil. We are making an agreement with our EEC partners, who may be importers of oil. The Minister would not deny that Iran is a major oil exporter. It would be a major economic sanction against Iran if we said that it could no longer export oil. If he is saying that the sanctions apply only to British exports of oil to Iran, that is nonsense. It is like selling refrigerators to the Eskimos. The Minister cannot get away with that.

The point that has been made by this side of the Committee is that the Japanese will take oil exports from Iran. Does the Minister deny that? I shall give way to him if he is prepared to deny that.

7.15 pm

Mr. Parkinson

I think that it might help if I make a general appeal to hon. Members who intend to take part in the debate to look at the Bill. That might shorten the discussion. The Bill does not deal with exports. It deals with contracts for British citizens to supply goods.

Mr. Evans

I understand the Minister to be saying that the Bill does not affect countries purchasing from Iran. That point was not made clear yesterday when the Minister said that oil was excluded. It is a good thing that the amendment was tabled, because it has clarified the position to some extent. The Minister has given a further explanation. We are discussing a matter of major importance. We understand that the Foreign Secretary cannot introduce the Bill because he is in another place. Yet instead of the Bill being presented by the Lord Privy Seal it was introduced by the Minister of State, Foreign and Commonwealth Office.

Tony Marlow (Northampton, North)

rose—

Mr. Evans

I shall give way in a moment. There should have been a time lapse between Second Reading and Committee. I do not think that there is a need to deal with the matter with such urgency.

The Second Deputy Chairman

Order. The hon. Gentleman must bring his remarks within the terms of the amendments that we are discussing. His remarks relate to the debate yesterday, not to today.

Mr. Evans

The point that the Minister has made shows that he has replied to several points raised on Second Reading. We are expected to move to the Committee stage of the Bill without having seen a copy of Hansard.

Mr. Marlow

I am grateful to the hon. Gentleman for giving way. The Minister intervened during his speech. Will he clarify whether his understanding of what the Minister said was that if a national of a third country decided to buy goods in the United Kingdom and then ship those goods to Iran, that would be perfectly legal once the Bill becomes an Act? If so, it is a significant matter. I should like to know what the hon. Gentleman thought of that.

Mr. Evans

I posed such a question on Second Reading. There could be companies in this country with overseas subsidiaries. We have lived through the Southern Rhodesia (Sanctions) (Amnesty) Order 1980, when we thought that we were dealing with people who had had contact with the illegal regime in Rhodesia. People flew back and forth to Rhodesia, and British companies dealt with subsidiaries in Africa and with firms in other countries. That was a way to getting around the sanctions. The point raised by the hon. Member for Northampton, North (Mr. Marlow) is important.

Are economic sanctions being taken against Iran to bring to an end the holding of the hostages? Is that the issue? The purpose of the amendment is to find out what is in the mind of the Government. That is why we are tabling amendments about the oil position. The matter is very vague. Is it a charade? Are we saying to the Americans that we do not want them to take military action, that we are taking sanctions because we want to maintain the Alliance and that we want to show good will? We know that the Bill will not do anything. It is meaningless. It is nonsensical. Yet we wish to go through the procedures in the House to avoid military action by the United States.

When dealing with the amendments, it is important to bring out the purpose behind the Government's intentions. That is why the amendments are important. They deal with contracts, transport, oil companies and banking.

I do not wish to speak at length, but the whole Bill has been dealt with in an unsatisfactory manner. It is agreed that we should seek to bring about the early release of the hostages. Yet the taking of tough action against Iran, instead of cooling the position, might have the opposite effect. In Iran at present a Parliament is emerging and a President has been elected, although a Prime Minister has not yet been appointed. In different parts of the world there are the doves and the hawks. We should be saying "Let us hold back and do nothing which will set matters aflame."

It may well be that the Bill is not the method whereby we can cool the situation but rather the method by which it can be aggravated. When the West has talked of strong sanctions, the reply from the leaders in Iran has been "All right; we shall set the refineries ablaze. We shall block the seas which provide an entry to Iran and to other countries such as Saudi Arabia." That could result in a state of conflagration in the whole of the Middle East.

I believe that we should cool it. We face a difficult international situation. I do not believe that the Bill advocates a method that we should adopt, although in other instances an argument can be made for economic sanctions. There is also an argument which can be made, and should be made, for our calling upon the Iranian regime to release the American hostages.

Mr. Marlow

I should like to speak in favour of amendments Nos. 2, 9, 10 and 11, because I should like to see the Bill reduced in its activities. In fact, I vehemently wish that the Bill could be withdrawn, although I realise that that wish is rather forlorn. In wishing that the Bill should be withdrawn, I appreciate that I am in the minority on the Conservative Benches, but, as right hon. and hon. Members will realise, minorities are sometimes right.

I should like to look at the genesis of the present situation. The taking of the hostages in Tehran, as everyone else has said, was an outrage of cosmic proportions, justifying almost any effective action to secure their release. That does not mean that it justifies counter-productive or ineffective action. To most of us it seems obvious that European Governments have been concerned from the outset at the possibility that the United States, in its understandable frustration, might indulge in some mad military venture to secure the release of the hostages.

The Second Deputy Chairman

Order. I know that hon. Members have been straying very wide in this debate, but the hon. Gentleman knows that we debated this subject yesterday. We are now debating very fine points, and if the hon. Gentleman wishes to make a contribution he should limit it to one or more of the amendments.

Mr. Marlow

As I have said, Mr. Crawshaw, I am speaking in support of several of the amendments because I wish to see the scope of the Bill reduced. I want to set out my case for wanting the scope of the Bill reduced. I believe that it could have damaging implications for the country, and I feel that if some of the amendments were adopted the potential damage that it contains could be reduced.

European Governments were obviously concerned at that possibility. In the event, the raid took place—

The Second Deputy Chairman

Order. The hon. Gentleman clearly made his point when he said that he was opposed to the Bill. Having said that, will he now divert his attention to why he wants the Bill changed and the amendments inserted? That is all that the Committee is concerned with.

Mr. Marlow

In the total measure, which I seek to reduce, the Government are introducing not powers to deal with existing trade but, rather, powers to deal with future trade and future contracts of services. I understand that if the amendment is passed services will be able to continue, but in respect of the supply of goods, if someone from a third country acts as a broker or intermediary the supply of goods to Iran will be able to continue. In effect, that will considerably reduce the effectiveness of the Bill.

I also understand that at this stage there are to be no penalties and that no one visualises that anyone will be imprisoned or fined for contravening the Bill as presently drafted. No one visualises that in respect of the supply of services or the sale of goods there is to be a blockade or a Beira patrol. In effect, the sanctions as proposed by the Government will not work, and the Government do not expect them to work.

The Second Deputy Chairman

Order. The hon. Gentleman has raised two matters. One of them relates to third parties. We are not discussing that subject in the amendments. The other concerns the question whether there will be a Beira patrol, but that does not come within the scope of the amendments. We must keep to what the amendments are about and not indulge in Second Reading speeches.

Mr. Marlow

The purpose of the Bill as drafted at present is to secure the release of the hostages. As it stands, I do not believe that it will in any way bring forward the date of their release. As the amendments suggest, the Bill will not provoke such a strong reaction in the part of the world in which the hostages are now so sadly situated. I should like to see the Bill amended, because, in common with every other hon. Member, I am concerned that the hostages should be released as soon as possible.

Mr. Dalyell

I do not know whether this is a point of order or an interruption, Mr. Crawshaw. However, I feel a little guilty because I raised the question of the Beira patrol in connection with amendment No. 2. We are talking about services, but the truth is that, unless we discuss matters of services and transport in terms of what may happen, we are not having a meaningful discussion. The illustration of the Beira patrol and the Persian Gulf is precisely what the amendments are designed to be about.

The Second Deputy Chairman

As I understand it, the hon. Member for Northampton, North (Mr. Marlow) raised the matter in regard to penalties, but that is not what we are discussing at present. I do not see what the Beira patrol or anything else has to do with the amendments that are at present under discussion.

7.30 pm

Mr. Marlow

The only reason why the Government have expressed—I was going to say "with any degree of conviction", but I do not think that there was any degree of conviction about it—a desire to bring the Bill forward is that they wish to cement the Atlantic Alliance and to continue our alliance with America in good heart. I support the amendments because I believe that if they are included the Bill will be less damaging to our interests and at the same time will have no detrimental influence on the Atlantic Alliance.

If there is anyone in Washington with any intelligence—I sincerely believe that there is—I am sure that he will look upon the Bill as it currently stands as unnecessary and probably most ineffective, particularly with regard to the release of the hostages. I understand that there is a feeling of terror among hon. Members at the prospect of United States isolationism developing, although that is not something that we can discuss at the present time. But I believe—

The Second Deputy Chairman

Order. I am sorry to interrupt the hon. Gentleman again, but will he relate his remarks to one of the amendments? He is now saying what he could have said yesterday, or what he can say during the debate on clause stand part, if we ever get to it. From the amount of discussion around this subject, it does not strike me that the Chair will allow it, especially if hon. Members continue to stray across the whole of the Bill. Will the hon. Gentleman please relate his comments to one of the amendments?

Mr. Marlow

I entirely accept what you are saying, Mr. Crawshaw, but my concern is for the future of the Atlantic Alliance, and I am concerned that the Bill should be beneficial to it. I should therefore like to see it amended.

I think that one of the most important things for the Atlantic Alliance is the future of the Middle East and the future relationships between the Alliance and the Middle East. I believe that the Bill as proposed will cause damage between ourselves and the Iranians, damage to our commercial prospects and damage to the interests of the West in the Middle East. Therefore, I would very much like to see the amendment passed.

Mr. Heffer

I speak in support of amendments Nos. 8, 9, 10 and 11. I note that the Minister appears to be getting slightly worried. I shall not be too long, but I shall try to deploy some arguments in support of those amendments.

Amendment No. 8 proposes that we omit from the Bill lines 16–18 on page 1. Those lines state that an Order in Council under subsection (1) (a) shall not apply to any contract with a bank or other financial institution for the provision of banking or other financial services. Why is it considered essential for that clause to be in the Bill? There could be a good reason for it—indeed, I am sure that that is so.

An interesting article appeared in The Times on 23 April. It was headed European Banks may take a strong line on Iran. The article stated: The news that the foreign ministers of the EEC had agreed on a joint stance towards Iran which might lead to economic sanctions found the West German banking industry fully prepared to fall in line. British commercial banks were unwilling to be drawn on the question as yet, although widespread compliance with any Government request to restrict banking operations with Iran is virtually certain. Obviously it is not "virtually certain", because it is clear that the Government have decided that banking operations will not, basically, be affected.

The article continued: The position of Iranian deposits with European banks remains delicate, if only because no country wishes to frighten depositors from oil-exporting countries. I understand that argument. The article stated: There are still about $3,000 million frozen Iranian deposits with European subsidiaries of United States banks. Several legal actions are being fought in London and other European centres to determine whether American subsidiaries have to follow instructions from United States authorities. At the beginning of the year there were estimates of $4,000 million of Iranian deposits with banks in EEC countries, of which around $1,500 million were deposited in London and $1,000 million in Paris. That gives us a clue. Are the Government serious? Are they developing a facade to disguise their real attitude to sanctions? It seems that when they are confronted with the really important issues they will not do anything about them.

Mr. John Bruce-Gardyne (Knutsford)

I should hope not.

Mr. Heffer

Exactly. I am not against the Bill. I understand the Government's position. However, the amendment is being moved to enable us to obtain a full explanation.

Let us know precisely what is behind the Government's thinking. We are entitled to have spelt out clearly exactly what the Government have in mind. I accept that we could be in trouble if there were a real effort to impose sanctions through banking. Only idiots would say "We should not take any notice of the problems that arise if we carry out sanctions as they will have to be implemented if the part of the clause is removed as the amendment proposes." I hope that we shall have a proper and thorough explanation from the Minister.

Mr. Dalyell

Yesterday the hon. Member for Peterborough (Dr. Mawhinney), who is now having a good gossip behind the Government Front Bench, for which I do not blame him, referred perfectly properly to American subsidiary banks in the United Kingdom. Is it not profoundly unsatisfactory that the Government's reply both last night and today should take refuge in the sub judice position of these complex legal matters? Surely we should not have to wait until November. The issue should be sorted out within the foreseeable future and before we start introducing legislation of this sort.

Mr. Heffer

I take my hon. Friend's point. I heard the exchange that took place between himself and the Government Front Bench at an earlier stage. As so often happens with problems of the sort that now face us, there are legal proceedings and Governments tend to hide behind the sub judice rule. That is understood, but it does not help us. Surely we have the right to be helped in this instance.

There could be another explanation. It could be the main explanation, and I think that I have put my finger on the core of the problem. There are some sinister people who take the awful view that bankers have to be left alone because bankers are protected by a Conservative Government while workers are not. There are some who take that view. It is amazing how many millions of ordinary working people take that view. Indeed, it has been strengthened because of the proposals contained in the Budget. I agree that they are not connected with the amendment, but those people would take that area of Government policy into account when considering the amendments that we are discussing. They would bear in mind how the bankers went pretty well scot-free in the Budget and are doing very well out of it while ordinary working people are being clobbered.

Those who argue along those lines may have a point, especially when it comes to consideration of amendment No. 11. There may be thousands of working people employed by a company that has a contract with Iran. Those who support my argument say that the contract should be renewed when it expires. Let us suppose that the Government get away with their measures and it is not renewed. That supposition is made on the basis that amendment No. 9 is not accepted. That means that thousands of working people would be thrown out of work. That would not happen in normal circumstances. It would not happen because of the normal crisis of the capitalist system.

Mr. Alan Clark

There is no such thing as a "normal" crisis.

Mr. Heffer

Of course, that crisis is with us all the time. There is always a normal crisis in the capitalist system. At some times it is slightly more normal than at others.

Mr. Bruce-Gardyne

There are abnormal crises as well.

Mr. Heffer

I accept that there are abnormal crises and they complicate the issue. The Bill may throw workers out of work. What will happen to them?

Mr. Alan Clark

What about South Africa?

Mr. Heffer

That is an interesting point. I had been about to touch on that subject. Some people are prepared to suffer, because they believe in what they are doing. There is a case in English history, connected with the United States of America. Ordinary working people in Lancashire suffered because they would not agree to the import of Southern cotton. People virtually starved for a principle. Working people do not support the Bill. They will not be thrown out of work happily.

Mr. Alan Clark

If people want to starve for ideological reasons, that is down to them. I welcome the hon. Gentleman's argument. It is not for a Government to say that people should starve because the Government do not approve of certain trade. That is a good point. Why does not the hon. Gentleman extend that principle to cover commercial contracts with South Africa, Chile and the other countries that he does not like? If working people want to starve, we should let them. Why should the Government decree that they should starve?

Mr. Heffer

I thought that the hon. Gentleman would ask that type of question. I was surprised that Mr. Crawshaw did not point out that the amendment has nothing to do with Chile or South Africa. He has been telling other hon. Members that they cannot extend the argument. I assure you, Mr. Crawshaw, that I am doing my best to keep to the subject—

The Second Deputy Chairman

Order. The hon. Member for Plymouth, Sutton (Mr. Clark) asked the hon. Member for Liverpool, Walton (Mr. Heffer) a valid question that followed from the hon. Gentleman's remarks. I hope that the hon. Gentleman will answer.

Mr. Heffer

Before you rose, Mr. Crawshaw, I had been about to say that if I were allowed to do so I would be happy to deal with the question put by the hon. Member for Plymouth, Sutton (Mr. Clark). Indeed, I should like to extend my answer further. There is no doubt that the Labour movement—including the mass of the trade union movement and Labour supporters—was prepared to carry out sanctions against South Africa. It did not like the racialist policies of the South African Government. That is a very different situation. In Chile, the Government were overthrown by a military dictator. One day there was a democracy, the next day there was total—

7.45 pm

The Second Deputy Chairman

Order. I had hoped that the hon. Gentleman would answer briefly and not go into the historical background.

Mr. Heffer

I accept your reprimand, Mr. Crawshaw. I was trying to plot my course on the basis of your rulings. If I cannot pursue that point, I shall have to leave it. I hope that I have given some answer. Hon. Members can guess what I was not allowed to say.

Working people do not agree with this policy. I am not particularly in favour of opinion polls. However, they indicate clearly that the majority overwhelmingly oppose what has happened to the American diplomats. They have made clear that they want them out. However, they do not want economic sanctions that may lead to a military conflict. Through no fault of their own, workers will be thrown out of work by a policy that has not been dictated by this Government. This Government are part of a little cabal that meets in Europe. They have been subjected to some form of blackmail—if that term is acceptable—by the United States of America. As a result, people will be thrown out of work.

The Government have a duty to compensate those who are thrown out of work for any loss of income. Indeed, they also have a responsibility to compensate companies. I have given some of the reasons behind my support for these perfectly reasonable amendments.

Mr. Alan Clark

I hope, Mr. Crawshaw, that you will stop me if you do not like the tenor of my point. Does the hon. Gentleman maintain that the trade union movement should compensate any members who may suffer as a result of sanctions against South Africa—

The Second Deputy Chairman

Order. The hon. Gentleman was very far-sighted. He is out of order.

Mr. Heffer

I cannot reply to that point, because I am not allowed to do so. Obviously, I am disappointed that I cannot develop the argument.

These amendments are important. I do not think that the Bill is particularly bright My dad would have had a marvellous phrase to describe it. However, I cannot use that phrase in the House. It is a way of saying that the Bill is neither one thing nor the other. If the Bill is left in its present form, it could become highly dangerous in certain circumstances. As time goes on, the situation might become dangerous. Certain aspects of the Bill will be seen not to work. There will be moves to strengthen future legislation.

These amendments are reasonable, sensible and well put. They should be accepted. I hope that there will be no need to vote and that when the Minister winds up he will say that the amendments are so admirably moderate that he will accept them without question.

Mr. Les Huckfield

I am fortunate to follow my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) as a benign and benevolent mood has descended on the Chamber. I do not intend to disturb that mood too much. However, I would not have spoken at all this evening if the Minister had ventured to answer some of the questions that I posed last night. The Minister knows that some of the questions that I raised have caused a considerable flurry of meetings in his Department throughout the day. Perhaps the Department does not tell the Minister all that happens. I can see why.

This morning, I wrote to the Minister of State, Foreign and Commonwealth Office. I do not know whether the communications system is such as to guarantee that that letter has been conveyed to the Department of Trade. I wrote to the Foreign Office this morning specifically on the points on which I had sought answers last night and upon which I hope that we shall glean some further information this evening. The collection of amendments which we are taking together under your guidance, Mr. Crawshaw, affords ample opportunity for me to develop this point and still remain within the rules of order.

Amendment No. 3 deals with transport. Amendment No. 4 deals with oil companies. Amendment No. 8 deals with banking. Amendment No. 9 deals with the renewal of contracts, which is the most important issue upon which I hope we can glean further information. Amendment No. 10 deals with international obligations. Amendment No. 11 deals with compensation, about which I also wrote to the Foreign Office this morning.

The points on which I sought further information last night and on which I am still awaiting further information centre mainly around the question of the future of the Talbot contract with the Iranian manufacturing company which puts together the bodies, which are made in Iran, with the engine and power train kits, which are chiefly put together in the Stoke works at Coventry and on which are dependent, in turn, at least another 350 suppliers.

As I said last night, if we are talking about the renewal of contracts, we could be talking about approximately 2,000 workers immediately involved on that work alone. On any sanctions having an effect, the jobs of those workers would be immediately in jeopardy. That could put about 4,000 workers, all told, in Coventry plants at risk; and ultimately, if that were to put in jeopardy the future of Talbot in the United Kingdom, that could, on a directly employed basis, put some 19,000 jobs in jeopardy. If one extends that to include jobs in components, engineering supplies and distribution, we could be talking about up to 100,000 workers all told.

p It was because of that danger that I sought particular clarification on the issue of the renewal of existing contracts. Last night the Minister could only tell us—and even then he made only a passing reference to it—that it was all a matter of individual contracts and induividual judgement. I am sory, but that does not satisfy the people I represent, some of whom came down to see me yet again this morning. They were not satisfied about the information that we were given last night. I had a deputation from the Talbot Stoke joint shop stewards only this morning because they were not satisfied with the information given in the replies last night. They have asked me specifically to find out exactly were they stand.

Amendment No. 9 deals with the renewal of existing contracts. The Minister for Trade will know that there is more than one contract involved. He can talk about renewal options being available and about those options being available to certain parties, but he knows very well that the whole issue of trying to separate out future contracts from existing contracts and their renewal is not at all simple. I hope that the hon. Gentleman will have the grace to pay some attention to the points to which he was not able to reply last night.

Unless I get some satisfaction from the hon. Gentleman tonight, I shall press this matter further, and I shall have to tell those whom I represent that they will have good cause to continue to be worried. We got no information last night, despite the fact that the Minister of State, Foreign and Commonwealth Office, quite specifically said that he would refer to the points which I had raised and that the Minister for Trade, in his winding-up speech, said that he intended specifically to refer to the points that I had raised. We got no answers last night, and it does not look as though we shall get many answers this evening.

On the specific question of amendment No. 9,1 want some more detailed information, particularly confirmation that the Talbot contract to supply the engine and power train for the Peycan assembly in Iran will be able to continue and will not have to be breached, even under the Bill. I should also like some kind of undertaking that even under the 1939 powers breach of that contract will not be allowed.

It is all very well for the Minister of State to deal with possible future sanctions under the Bill. As I have said before, I do not believe that the issue of what constitutes a future contract is clear.

Mr. Dalyell

On the question of future contracts, I know that my hon. Friend knows the motor industry even better than I do. I represent the Leyland truck and tractor division at Bathurst and he represents very important sectors of the British motor industry. We are talking about the future. There are running contracts. One does not just go in for a single package. Packages run into one another. We still have not got an answer on what is to be considered a new deal and what is a renewal, or what is part of an old deal. Until we get some kind of clarity on this matter, it would be a dereliction of duty not to oppose this kind of proposition. The future of large sectors of the British motor industry could well be at stake, remembering that it is a matter not only of Iran but, as some of us believe—and as we have pointed out at possibly inordinate length—the whole of the Middle East. What would the British motor industry do without the Middle East.

Mr. Huckfield

I am grateful for my hon. Friend's intervention. He has made a typically relevant point. This is an expanding market, and British manufacturers and assemblers ought to have a growing part of the market.

I hope that the Minister of State will appreciate the significance of the point I raise. I know that his hon. Friend the Member for Coventry, South-West (Mr. Butcher) appreciates it. We are probably dealing with one of the most lucrative and best commercial contracts of any European country with Iran. That is the significance of it. We have already had the figures from the Opposition Benches which show that for the first three months of this year the Talbot contract with Iran was responsible for more than half of the revenue earnings of United Kingdom trade with Iran. It has that degree of significance. That is why I say that we must have a far more definite statement that the contract will be secure in all aspects.

On the question of renewal, the Minister also ought to know, and will know if he has been as exercised as he claims to have been in his Department, that there is every possibility that the French could use the sanctions issue as an excuse—I use that word advisedly—to switch the sourcing of that contract from the United Kingdom into France.

I quote briefly from a memorandum which the stewards brought to me this morning. I praise the Talbot Stoke joint shop stewards committee in the Coventry workshop for the notes they have supplied to me. [Interruption.]

I am sorry if the hon. Gentleman finds this gleeful in some way. I do not find gleeful or joyful the possible loss of jobs of 4,000 people in Coventry and possibly 19,000 people up and down the country. I find it a very serious issue. The possibility that because of the Government's action we could lose a vital car contract to one of his so-called trading partners, if the contract goes to France, I take very seriously indeed. I only hope that an equally serious attitude will be concentrated upon that contract by the Department of Trade. [Interruption.]

I find it rather distasteful, Mr. Crawshaw, that the Minister will persist in responding to some of these very serious points by descending to personal innuendo. He ought to be above that in his position. My constituents will take very careful note of his attitude tonight. They will hang on to every word he says in this debate because they are very concerned that under the provisions of the Bill and under those contained in the 1939 Act, and even if the provisions contained in these two pieces of legislation are not made operable, the French could use this as an excuse to transfer the sourcing of that contract elsewhere. The hon. Gentleman should appreciate the seriousness of the matter. If he does not, we must make sure that his lack of attention is conveyed outside the House.

Mr. Dalyell

In the former Chrysler Linwood factory, which was taken over by Peugeot, there is considerable concern among shop stewards about how easily work can be transferred from Scotland to France. Although the Talbot production figures in my hon. Friend's constituency are considerably better than the French figures, the threat of transferring the work is all too real.

8 pm

Mr. Huckfield

My hon. Friend is right. Talbot United Kingdom is on target and hopes to meet the break-even point set for it by the French parent company by the end of this year. The continuation of the contract with Iran is an important element. We are therefore concerned to have substantive assurance from the hon. Gentleman that no aspect of the contract will be in jeopardy.

Amendment No. 11 concerns a matter that I raised in a letter to the Foreign Office this morning. We have so far had scant information on compensation. If the hon. Gentleman has been following the paper work on the case, he will know of the possibility of Talbot applying to be considered under the short-time working compensation scheme. My hon. Friend the Member for Stockport, North (Mr. Bennett) mentioned compensation. The Government at last have the opportunity to tell the House what will happen if, as a result of sanctions, a company makes an application under that scheme. That scheme was introduced by the previous Government and assisted the Chrysler company, as it was then, because of a temporary interruption of the contract due to the Iranian revolution. Chrysler benefited from that assistance, and the circumstances were similar to those now.

The company has been given to understand that the operation of the short-time working compensation scheme and its relevance to the cessation or temporary interruption of the contract is entirely at the discretion of the Secretary of State for Employment. My constituents and the company's management would like to know where they stand. My hon. Friends the Members for Blackburn (Mr. Straw) and for Stockport, North would also like to know where their constituents stand if some of the companies for which they work make an application under the scheme. It is all very well to make a generalised hypothetical statement that the Minister may look favourably at an application. That is not good enough for our constituents. What compensation will be offered.

Talbot could not bear the cost of a lay-off agreement for a substantial period. If the supplies under the contract were interrupted, the company would probably lose the contract. The issue would then be redundancy. The contract, supplies. jobs and revenue would be lost for ever.

Mr. Dalyell

With little prospect of regaining contracts from Romania and other competitors.

Mr. Huckfield

My hon. Friend is right. Similar considerations apply to Massey-Ferguson, which has already experienced enormous difficulties in Turkey and other countries in that part of the world because of problems with the Export Credits Guarantee Department and inability to pay bills. Other companies will also be in difficulties.

As well as wanting information on the crucial issue of renewal of the existing contract, we need a guarantee that the Government's powers under the 1939 legislation will not be used with regard to that contract. People want an undertaking that, even if the powers under the Bill are not brought into operation and the Government choose not to bring in their powers under the 1939 legislation, they will do all they can to prevent the company sourcing this contract by France. It is the best contract that any United Kingdom company has with Iran. In the first three months of this year it has been responsible for half the revenue-earning from trade with Iran. It is critical, and we need answers.

Mr. Ioan Evans

My hon. Friend has dealt with contracts for exporters. There is nothing in the clause to exclude imports. The exemptions apply to a contract made before the relevant day and to contracts with banks and financial institutions. The Bill becomes more and more curious. I understood that sanctions would cover imports and exports, but the Minister now tells us that it will be exports only.

Mr. Huckfield

My hon. Friend reinforces my call for answers. I hope that the Minister will not continue the process of evasion and avoidance.

Mr. Campbell-Savours

It is tragic that amendment No. 7 has not been selected. It would have widened the debate and perhaps have led to an extension of the Second Reading debate.

These amendments afford the opportunity to put constituency points. Amendment No. 9 deals with the renewal or extension of a contract. Amendment No. 11 deals with redundancy or short-time working that may result from the introduction of the Bill. The Bill has a direct effect on employment. In many parts of the country it will lead to severe unemployment.

It is appalling that the Bill seeks to exclude those organisations that are friendly with the Conservative Party but includes industrial workers, who, perhaps, have more affinity with the Labour Party. Clause 1(2)(b) deliberately excludes organisations friendly to the Conservative Party. I wonder whether those organisations impressed on the Government the need for the exclusions. As the hon. Member for Bury St. Edmunds (Mr. Griffiths) stated repetitively yesterday, it is an appalling Bill. It demonstrates a clear bias against industrial workers.

The Second Deputy Chairman

Order. Will the hon. Gentleman say to which amendment he is referring?

Mr. Campbell-Savours

I was about to refer to a meeting held in the House about 10 days ago, when shop stewards from the Transport and General Workers Union and other unions came to London from the Talbot plant to express their anxiety about the loss of jobs that will result from the Bill. Amendment No. 11 deals with redundancy and short-time working stemming from the Bill. The potential loss of a £150 million contract for Talbot, with a loss of several thousand jobs—about which there have not been satisfactory replies from Ministers—means that many Opposition Members find that it is necessary to speak. Khomeini has said, on a number of occasions, that Iran may decide, on the introduction of sanctions, to terminate a number of trading arrangements with Western European countries. The termination of those agreements would lead to loss of jobs in some parts of Britain, especially the part that I am sent to the House to represent.

I have tried to measure the effects of this sanctions Bill on companies and workers in my constituency, especially the effects on redundancy and short-time working. The first company I studied was BSC Cumbria, which has a plant my constituency employing about 5,000 people, many of them producing railway lines. Workington is well known internationally for this product that it has supplied over the years to countries throughout the world, especially the Middle East I was informed of a history of supply to Iraq, Iran, Jordan, Egypt, Saudi Arabia, Dubai and Kuwait.

The consultancy arm of British Rail, Henderson, Hughes, Busby and Trans-mark, is at the moment busy trying to negotiate the construction of a new railway network throughout Iran to which Workington can, perhaps, look for orders. These orders have a direct bearing on my constituency, which falls at present within a special development area but is soon to be demoted. The orders are vital if Workington is to maintain at least current levels of employment and to avoid the increasing unemployment that is developing in parts of the country and in certain towns in my constituency. We need the potential of the rail network and the orders that could possibly flow to my constituency in the event that we won the contract. We hope eventually to secure the order. The introduction of the sanctions Bill could have a bearing on whether those orders come to fruition.

I now turn to another company in my constituency, Condura Fabrics—

Mr. Dalyell

I declare an interest as an NUR-sponsored Member of Parliament. As one who has taken an interest in rail exports, may I ask whether it is not the case that Workington exports are jeopardised not only in Iran but throughout the Middle East? This is the inevitable consequence of what we are doing. Some of the Arab States have made clear—

The Second Deputy Chairman

Order. What the hon. Gentleman says is an argument for not passing the Bill at all. We are discussing amendments that seek to limit certain aspects of it. If the hon. Gentleman refers to whether the Bill applies to existing contracts or future contracts, his remarks will be within the terms of the amendment. He is not able to discuss what is likely to happen due to actions by the Iranian Government that are beyond our control.

Mr. Dalyell

On a point of order, Mr. Crawshaw. There is a grey line concerning these amendments. I do not ask for a reply immediately, because there needs to be time for thought. I should like to know, however, which amendments you intend to call for a vote. Has the Chair made up its mind which amendments it is prepared to call?

The Second Deputy Chairman

I shall try to help in any way I can. I understand that the amendment under consideration will be called. There is grouped with it amendment No. 11, on which I understand certain hon. Members are anxious to see a Division called. I think that the Chair would allow that. I wish to make the point clear. An argument relating to what the Iranian Government, or any other Middle East Government, might do as a result of the Bill is outside the control of this Government. It has nothing to do with the amendments that we are considering. If the hon. Gentleman wishes to keep within order, he should limit his arguments to amendments Nos. 9 and 11.

Mr. Dalyell

Further to that point of order, Mr. Crawshaw. Is it really being said that what the Iranian Government, or any other Government, may do is irrelevant? The reaction of the Iranians is highly relevant to what we are doing. Any action that we take has its counter-reaction. Actions in political life have their consequences. Is it said—

The Second Deputy Chairman

Order. The hon. Gentleman has made the point clearly. I have answered the hon. Gentleman. The hon. Gentleman's remarks are relevant to the Second Reading debate relating to what might happen if the Bill is passed. The Bill is now in Committee. We are discussing amendments to the Bill or whether it is to be amended at all. The two amendments, as I have indicated, deal with the aspects to which the hon. Gentleman refers. Those amendments are Nos. 9 and 11.

Mr. Kevin McNamara (Kingston-upon-Hull, Central)

Further to that point of order, Mr. Crawshaw. Is not the reaction of the Iranian Government to the effect of the amendments relevant?

The Second Deputy Chairman

I cannot quite understand the point the hon. Gentleman is making.

Mr. McNamara

I am sorry, Mr. Crawshaw. I was trying to be unusually terse. You informed my hon. Friend that the point he was making about the attitude of the Iranian Government to the Bill was a Second Reading point. I was pointing out that in Committee we could, surely, look at what is likely to be the Iranian Government's attitude to the amendments that we are discussing.

8.15 pm

The Second Deputy Chairman

With respect to the hon. Gentleman, that would be irrelevant. We are discussing a specific number of amendments that seek to do particular things. Amendment No. 9 seeks to tie down the Government so that the Bill will not affect existing contracts or future contracts. It is legitimate for hon. Members to argue the reasons for that amendment. Amendment No. 11 asks whether the short-time legislation would apply if people were made redundant. That is another argument. Those are the fine points with which we are dealing. We are not discussing the reaction of the Iranian Government to the passing of the Bill.

Mr. Campbell-Savours

I thank my hon. Friend the Member for West Lothian (Mr. Dalyell) for intervening. He raises a question stemming from his sponsorship by the National Union of Railwaymen. It is an interesting point. If this sanctions Bill is passed, there will be a response not only from Iran but from the whole Islamic world. That point has not become evident from the debate. A far wider conflict is involved. That is why we are particularly worried in Workington. I drew attention to the number of countries in the Middle East with which we have traditionally traded in railway line production.

I now turn to Condura Fabrics, another company in my constituency which employs a great number of people and produces textured fabrics for fitting on car seats. I asked the company whether it was supplying any products that may form part of the Talbot contract. The company informed me that it was not but that it is currently bidding for part of that contract. That company equally needs work in my constituency. There have been some lay-offs, and it is important that the company should enter a more healthy trading period and enjoy a fuller market. If the sanctions order were to be introduced, jobs in that company might not be created again in a special development area, or, indeed, in a town where the unemployment rate is almost 15 per cent.

The chemical industry is also affected by the sanctions order. Exports of chemicals to Iran last year totalled £71 million and in 1979 £39.3 million. Part of those chemical exports came from Pentagon Chemicals in my constituency. I contacted that firm today and it told me that it was already selling to markets in Iran. Although it feels that its area of the industry—food and pharmaceuticals—is not affected by the Bill now, it believes that it might be affected in the future. That belief stems from the fact that the company is developing a new product—an agent which prevents the growth of bacteria in oil wells. The company has spent a lot of time trying to get markets for this in Iran and it has been looking forward to getting that business. I am told that on the day the siege took place in London the company's representatives were actually submitting samples to the attachés at the Iranian Embassy.

Mr. Dalyell

This is one of the difficulties that we face. Who is to say what is a chemical, which is embargoed, and what is a pharmaceutical, which is allowed? There is a very thin dividing line.

Mr. Campbell-Savours

I wish that I could answer all those questions on the complicated matters relating to the chemical industry. I cannot. All I can say is that Pentagon Chemicals has worked very hard to get this business and the company is distraught at the prospect of losing it. In passing, I must say that it is tragic that our Benches are not full this evening, because many jobs will be lost as a result of the Bill.

Mr. Jack Straw (Blackburn)

My hon. Friend has been talking about the way in which orders made under clause 1 might affect future contracts. Does he agree with me that there is still a good deal of uncertainty facing companies which must fulfil existing contracts? That arises from the fact that we still have no clear commitment from the Government that they will not apply the powers under the 1939 Act to stop shipments of goods which are produced under existing contracts.

My hon. Friend will recall that last night the Minister of State said that no decision had been taken to use these powers. He went on to say that any decision to do so would depend on a debate and a decision in the House. Will my hon. Friend accept that the implications of the Minister's statement that those powers could be used in respect of existing contracts will create a good deal of uncertainty about whether the firms can go ahead? I offer as an example—

The Second Deputy Chairman

Order. The hon. Member is supposed to be making an intervention; he appears to be making a speech.

Mr. Straw

I was trying to make my point in an interrogative manner in the hope that my hon. Friend would pick it up. Is my hon. Friend aware that in my constituency there is a firm which, having heard the full text of the Minister's statement yesterday, still asks whether it can go ahead and produce the goods? it appears that firms can go ahead and produce goods, but whether they will be allowed to ship them from the docks is another matter. This is a matter on which we need some clarification.

Mr. Campbell-Savours

I find it hard to believe that the Minister of State will not seek the opportunity provided by the winding-up speech to answer all the anxieties that have been raised on this question by my hon. Friends. We have made repeated statements demanding information about our constituency companies.

Mr. Dalyell

My hon. Friend the Member for Workington (Mr. Campbell-Savours) referred briefly to the fact that many of our right hon. and hon. Friends are absent from these Benches. If we speak on their behalf, the Government Whips must accept the responsibility—I will not call it blame, because all Governments manipulate the House of Commons—

The Second Deputy Chairman

But what has this to do with the amendment?

Mr. Dalyell

I was just saying that many of our right hon. and hon. Friends are absent and we are speaking on their behalf. There are a great many hon. Members who are committed to their own constituencies for the day of action tomorrow.

The Second Deputy Chairman

There are enough hon. Members here to keep the debate going without wishing for any more.

Mr. McNamara

On a point of order, Mr. Crawshaw. Can you guarantee that the closure will not be moved?

The Second Deputy Chairman

I cannot guarantee anything. I can only be guided by what the Committee wishes.

Mr. Campbell-Savours

I am sure that my right hon. and hon. Friends who are not present today will read the columns of the Official Report tomorrow and the day after to study the Minister's reply. Nearly every constituency in Britain will be affected directly as a result of the Bill. I think that it is tragic that, in presenting the Bill to the House, the Minister did not ensure that a separate statement was made about the effect of the sanctions orders, particularly in the regions where jobs are so scarce and precious and where daily we reflect on our unemployment rates.

Pentagon Chemicals was confident of new business. That company is now worried. I want an assurance from the Minister of State that he will look into the affairs of the company in that context.

I turn to another company which also has a major operation in my constituency—British Leyland. The company has a long history of providing and delivering products to the Middle East. In Iran today there are 400 double-decker buses that were bought in this country. A number of double-decker buses—though I do not know how many—have also been delivered to Iran.

8.30 pm

There are outstanding inquiries at the Workington plant for more than 1,000 buses for Iran over the next four years. That will be a major order, even if only part of it is realised, and part may go to Germany and France. The Government are investing in new plant, through assistance under the Industry Act 1972, to produce the new Titan bus and we shall look forward to building buses for the Middle East market, and certainly for Iran, if the Bill is not passed.

We have also had inquiries from Kuwait for 20 buses and from Dubai for a further 20 buses. We feel that this attack on Islam—and it is not exclusively an attack on Iran—may prejudice the potential for business in that part of the world for the Leyland plant in Workington.

A recent delivery of 200 buses to Iraq—

The Second Deputy Chairman

Order. I want to assist the hon. Gentleman. Will he please relate his remarks to one of the amendments? He is not relating his comments to any amendment at the moment.

Mr. Dalyell

Is not the matter of transport related to amendment No. 4? My hon. Friend referred to French competition and, in spite of the statement of the Minister of State, Foreign and Commonwealth Affairs in an answer on 23 April to my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk), the truth is that the French Government have made clear publicly that they find many difficulties in French law about implementing sanctions. The Italian Government have made a similar statement.

There are great legal difficulties, and I do not believe that the French Government will stir themselves unduly to find legal reasons for not allowing French competition in the bus industry.

Mr. Campbell-Savours

I have tried to locate other companies in my constituency which would be affected by the Bill, and I have succeeded. I refer to amendment No. 11, and I believe that the effect of the Bill will be to create redundancy or short-time working in my constituency. That is why I have referred repeatedly to a number of companies which wish their case to be put to the Minister.

Mr. Russell Johnston

The hon. Gentleman described the legislation as not only an attack on Iran but an attack on Islam. That is unfair.

Mr. Campbell-Savours

The hon. Gentleman is entitled to his view, but I and many of my hon. Friends believe that it is an attack on Islam and that we shall feel the repercussions of the introduction of the Bill for many years.

Mr. McNamara

Is my hon. Friend aware that I have just returned from the Persian Gulf and I know that there is to be an Islamic conference in the near future at which America will be pilloried for its raid into Iran and—

The Second Deputy Chairman

Order. We are getting outside the scope of the amendments. The hon. Member for Kingston upon Hull, Central (Mr. McNamara) has raised an argument which would have been appropriate on yesterday's Second Reading but is not within the scope of the amendments.

Mr. Campbell-Savours

I wish to refer to the wider problem in my region. I am informed that at Wallsend the future delivery of a 20,000-ton ship, which cost £40 million, will be prejudiced if the Bill goes through.

Mr. Dalyell

Is it not important to point out that that ship is 85 per cent. paid for by the Iranians, that to withhold it will raise deep questions of confiscation and that the Government had better outline their policy on confiscation?

Mr. Campbell-Savours

The Minister for Trade asks "Why?", but I should have thought that it was obvious why we seek reassurances which we must have in order to satisfy our constituency interests.

Another matter that needs consideration and affects redundancies or short-time working is what will happen if exports that would otherwise have been sent to Iran are diverted within the European market. I should like to quote the comments of Ernst Peiper of Salzgitter, a large steel company in Germany. He said: The embargo against Russia or Iran would hit the company hard, to the tune of £50 million in annual sales, and 60,000 tonnes of structural steel which they already sent to Iran. It is important to raise such matters, because we must ask where that structural steel will end up. That is particularly important when our own steel industry is reeling from problems, many of which have been difficult to resolve.

Will that steel end up in the United Kingdom? The Germans will sell it in some market. I feel that the Minister of State should tell us what action he intends to take, if that steel comes to the United Kingdom, to insulate the workers in the structural steel industry in the United Kingdom from the effects of the Bill.

Mr. Dalyell

Before my hon. Friend leaves this point, the same Ernst Peiper said that company sales to Iran were running at DM 90 million per month in the year to June 1980 and that they had sold 60,000 tonnes of steel in the first quarter of this year. Can anyone imagine that in those circumstances a company like Salzgitter, if it was subject in any way to sanctions through German law—which is rather stricter in these matters than French or Italian law—would not then trade through a third country, probably Turkey? Many Germans have been very open about this. They have the most intimate connections with Turkey. Those of us who were members of the indirectly elected European Assembly know the close contact that existed between the Germans and the Turks.

The Second Deputy Chairman

Order. The hon. Member is completely out of order in discussing this. If the hon. Member wished to discuss this sort of thing, he should have tabled amendments. Then, if the amendments had been selected, we could have discussed them. Such amendments are not tabled and they have certainly not been selected. We are not discussing what happens when these goods are not sent to another country. I hope that the hon. Member for Workington (Mr. Campbell-Savours) will relate what he is saying to one of the amendments, as he was doing on amendment No. 11a short while ago.

Mr. Campbell-Savours

I have tried to keep to amendment No. 11, which relates to redundancy and short-time working. I think that my hon. Friend has made a very relevant point, and that is that if companies abroad, subject to other laws, are able in one way or another to bypass international rules or regulations—if that be what they are—on the question of supplies to Iran, they will intervene in our markets at a long-term cost to our people in our industries. I think that relates directly to amendment No. 11.

On the whole question of the general trend in exports to Iran, we are told that in 1978 the total amount of exports to Iran was £500 million. By 1979 it had been reduced by 69 per cent. to £232 million. By 1980 it had increased by 50 per cent. to £350 million. It seems to me that that is an expanding market which Britain can rightfully claim will have a bearing on the number of manufacturing jobs we are able to create even under the difficult industrial strategy that has been introduced by this Government. These particular amendments are about ensuring that we create work and jobs and maintain jobs at home.

Amendment No. 11, as I have said, is a constituency amendment, which will commend itself to any hon. Member of the House who recognises that in his constituency he may well have factory closures or short-time working.

I am one of those hon. Members—and I do not believe they are exclusively on the Labour side of the House; I think that they exist even on the Government Bill. We know that it will damage our Front Bench—who pour contempt on the constituents' interests. We have had a number of statements from Government Members saying that they do not believe the order will work because they accept that it will be bypassed. I only wish that the Government would see reason and withdraw the Bill even at this late stage and ensure that we are all able to protect our constituency interests.

Mr. McNamara

I wish to refer to amendment No. 8. I am glad that the Minister of State is in his place. Yesterday, in the Second Reading debate, he said: Subsection 2(2)(b) excludes contracts with banks or other financial institutions for the provision of banking or other financial services. Restrictions already operate in this area and have been in force since the end of last year, as my right hon. Friend the Prime Minister has made clear in the House. The restrictions have been in force on the basis of guidance to major British institutions. They have worked satisfactorily and it does not seem sensible to legislate where an existing arrangement is working quite well. I asked the hon. Gentleman: What does the Minister mean by ' guidance '? Is it legislative power, a word in the ear or a bit of arm-twisting? He replied: No; guidance in this context is guidance. The arrangements have been working satisfactorily. As Mr. Byrd, a current American politician, is in the habit of saying ' If it ain't broke, don't fix it'."—[Official Report, 12 May 1980; Vol. 984, c. 920.] A very dangerous precedent is being outlined by a spokesman for the party of law and order, and it is to that point that I wish to address my remarks.

Here we have a matter of the gravest import by any standards. Regrettably, one of the most distasteful aspects of the debate is that we have been talking about jobs, contracts, money and employment while hostages are being held perhaps in fear of their lives. In the debate to which we have been forced by the Government, we have posed as the champions of law and order and the upholding of principles in the decent conduct of people and nations.

Whereas every contract, every future contract and every renewable contract in the greater part of British industry will be subject to the provisions of the Bill, a major part of British invisible earnings and a major part of the City operations will not be subject to regulations laid before the House.

That is a wrong attitude for us to take. We should be seeking to establish that if these regulations and laws are necessary they should be properly policed and enforced, and open to the careful examination of all who are concerned with these matters. Thus we would be able to see that there was proper parity and fairness of treatment among individuals, whether in banking, the construction industry or manufacturing industry.

8.45 pm

This amendment is important for that reason and that is why, Mr. Crawshaw, when you come to consider the amendments, I hope that you will call a Division. I believe that the provision is discriminatory and wrong.

I gave an undertaking that I would not speak for too long. I wished to make a point of principle on this part of the Bill. I hope I have kept to my undertaking and I hope that, in turn, we may have a Division on this issue.

Mr. Rowlands

In one sense Ministers and the Government have no one to blame but themselves for the confusion and uncertainty that have been created by the Bill and in particular by this clause. The reason for this lengthy and important debate is that the full range of amendments that cover the clause are, as many of my hon. Friends have said, the only means we have of probing and discovering what the detailed intentions of the Government are in the Bill, though there will be another opportunity to which I shall refer shortly.

The confusion and uncertainty have arisen because of the way in which the Government have chosen to bring the issue of sanctions before the House. The Government have not taken the opportunity to bring forward a decent Bill incorporating the full range of possible sanctions and the enabling power for those sanctions and subsequent orders. They have decided not to do that.

Nor have the Government decided to rest their case on existing legislation, namely, the Import, Export and Customs Powers (Defence) Act 1939. There we have an odd, curious and difficult mixture of legislation. One of the reasons why the uncertainty and confusion reign is that the Government depend on two pieces of legislation—one going back to 1939 which was brought into the House as a war measure and this much shorter enabling Bill concerned with future contracts for services which may or may not arise.

Those of my hon. Friends who have spoken have raised fundamental problems and there have been occasional jibes and grimaces from the Minister and his right hon. and hon. Friends as though the issues raised by my hon. Friends were not important. As a result of the manner in which the Bill has been introduced and because of the lack of adequate explanation there is a danger that firms and jobs will be blighted in key areas and in key firms.

It is important that when the Minister replies to these amendments he clarifies some points and nails a number of fears. If the concern and fears that have been expressed during the debate are unreal and unfounded, for goodness sake let the Minister spell out the meaning of the Bill in clear language. He certainly did not do so in his reply yesterday.

The difficulty that has faced the Committee is that we do not know or fully appreciate how the combination of the proposed legislation and the 1939 Act will work. What will be the combination of powers as a result of using the 1939 Act together with the proposed legislation? What will be the consequences of using the two pieces of legislation?

I have not heard whether Merthyr Tydfil is affected. I have tried to relate the statements by Ministers on Second Reading and in interventions in the speech by my hon. Friend the Member for West Lothian (Mr. Dalyell) to the objective in the Bill and to the Import, Export and Customs Powers (Defence) Act 1939. I understand that the purpose of the Bill is to enable the implementation of the January Security Council resolution. Will the powers in the Bill and the 1939 Act ensure that the whole of that resolution is implemented? I wonder whether the Government will be able to implement that resolution when the Bill is passed. I am not sure whether the combination of the Bill and the Act covers the Security Council resolution. We are entitled to know which bits of the resolution are covered.

Mr. Dalyell

I am sure that my hon. Friend realises that he is on an extremely important and substantive issue. Section 7(1) of the 1939 Act states: Where a person about to export goods from the United Kingdom, in the course of making entry thereof before shipment, makes a declaration as to the ultimate destination thereof, and the Commissioners of Customs and Excise have reason to suspect that the declaration is untrue in any material particular, the goods may be detained until the Commissioners are satisfied as to the truth of the declaration, and, if the Commissioners are not so satisfied, the goods shall be forfeited. How do we know the ultimate destination of goods? It is all very well blithely to refer to the 1939 Act, but that Act was put together for the purposes of the Second World War. Suddenly to resurrect the difficult provisions in section 7 will create difficulty and a lawyers' paradise.

Mr. Rowlands

That is why we sought, in an amendment which was not selected, to ensure that any action under the 1939 Act should be subject to parliamentary procedures. We have had a verbal assurance on that. However, it should be included in the legislation.

One of the curious aspects of the clause is that it takes up as much space specifying what is not included as it does describing those matters which are included.

The Second Deputy Chairman

This is not a "clause stand part" debate. I hope that the hon. Member will refer to one of the amendments.

Mr. Rowlands

I wish to refer to the amendment which is designed to delete clause 1(2)(b). That deals with exclusions Half of the clause deals with exclusions. I believe that I am in order.

Earlier in the debate we said that one of the curious aspects of the Bill was that, while there were certain exclusions, they did not include the exclusion of food and medicine—although that is a deliberate exclusion in the Security Council resolution. Paragraph 2(a) of the resolution states: shall prevent the sale or supply…of all items, commodities, or products, except food, medicine, and supplies intended strictly for medical purposes". When the Minister replies, will he say why those exclusions are not included in the Bill? He said that he would not dream of introducing orders, but he should not have introduced orders about existing contracts for banking and financial institutions. Why did he not choose to exclude—as did the Security Council— food, medicine and supplies intended strictly for medical purposes —words taken directly from the Security Council resolution, to which, apparently, the whole of the Bill relates?

Mr. Ioan Evans

I do not wish to labour the point, but earlier in the proceedings the Minister uttered a significant statement. I raised the question of contracts relating to imports and exports. The Minister intervened and said that the Bill related to exports but not to imports. If the Minister is to maintain his position that the Bill provides for one-way trade sanctions against exports to Iran, there should have been an exclusion amendment. My right hon. Friend mentioned the 1939 Act, yet the Bill deals only with exports to Iran.

Mr. Rowlands

I do not wish to do the Minister's job for him, but, presumably, the reason for that is that the Security Council's resolution relates to exports to Iran. As I said at the beginning of my speech, the Minister will have the power to prevent any form of imports from Iran under the 1939 Act. That adds value to the point that I have made. The House is in a dilemma about the handling of the sanctions—if they are to have any effect—because the powers under an old piece of legislation will be as appropriate as, if not more appropriate than, the powers in the Bill. It is that balance and mix which causes worry and confusion.

The orders under the 1939 Act will not be subject to parliamentary scrutiny. We have been given a verbal assurance that they will be brought to the House in some way or another, but they will not be brought under any parliamentary control in the way in which orders under the Bill will be brought under control. Therefore, we have every reason to be worried and concerned.

Amendment No. 8 seeks to delete lines 16 to 18 of clause 1, which relates to the contracts of banking and financial institutions. The House was thrown into confusion yesterday when the Minister said that guidelines had been in existence from the end of last year. This morning we went to the Library of the House to find out where the guidelines had been deposited, so that we might know exactly why the subsection had been included. Why have the contracts for banking and financial institutions been excluded from the Bill when contracts involving car workers' jobs have not been excluded? We have received no explanation about that, and I hope that the Minister will give an explanation when he replies.

Because of my own experience in office, I can understand and appreciate why the Government wish to maintain a certain amount of commercial confidence. If that is to be the Minister's argument, let me anticipate it straight away. It is all very well for commercial confidence to be maintained, by the guidance that was given by the administrative agreement and, presumably, a voluntary relationship between the Government, Whitehall and the banks and financial institutions, if no public action is to be taken with regard to sanctions. But the moment the Government decide to bring orders before the House of Commons to stop trade or a contract of any form, the public have a right to know what else is going on and what other action is being taken.

9 pm

If there were no orders—I hope that I can carry Conservative Members with me—and no bans on any kind of public contracts could have a potential and clear effect on the jobs of people in various firms or constituencies and areas, the voluntary agreement between the banks, the financial institutions and the Government on how to handle Iranian commercial relationships should remain wholly confidential. That is a voluntary commercial agreement However, the moment one starts to move into the area of public prohibition of contracts, which is what the Bill is about, and the promulgation of orders that say "You shall not accept this order and you shall stop this export", people whose jobs may be affected and firms that may find themselves in financial difficulty have every right to ask " Is that happening to others, such as the banks and finance houses, as well?"

It would be an outrageous proposition if the sacrifice in the name of sanctions on Iran were limited to car workers' jobs in Coventry or elsewhere without our knowing whether or not a similar sacrifice had been made by those who were involved in financial dealings of one kind or another. That is the material and distinctive point to which I should like the Minister to reply. He cannot rest his case on the pure and simple argument that it is commercially confidential administrative guidance, voluntarily agreed. He can certainly do so until he makes the first order, but as soon as he makes the first order he must make public the whole range of measures that are in force, whether voluntarily or by law, in relation to sanctions on Iran.

The other major aspect that has arisen as a result of the amendments relates to the renewal and extension of existing contracts. Many of my hon. Friends raised very strong points. Ministers may feel that they are bogies that have been put forward in order to frighten hon. Members into opposing the Bill. They may say" You are creating unnecessary problems for yourselves and firms and creating unnecessary worry and concern." There is one simple way to remove that uncertainty, and there is one certain way to remove the potential blight that could be created—and that is for the Minister to say that all existing contracts are safeguarded and that the renewal and extension of existing contracts are safeguarded, so that we have a clear and unequivocal view.

I have served in Government. There can be no greater art than Foreign Office drafting capacity. But at least the Minister of State does not come from the Foreign Office. However, this is not an occasion for weasel words or for diplomatic language. There is a need for a clear and unequivocal statement regarding the renewal and extension of existing contracts, as well as the position of a host of firms, as many of my hon. Friends pointed out.

I hope that the Minister will take this opportunity to allay the fears and suspicions that I have voiced, so that we may move on to other important aspects of the Bill. The most important requirement is to erase the potential blight that may be created by uncertainty. I have in mind the doubts and concerns that have been expressed and the ambiguities and ambivalence of the Government's policy on sanctions against Iran.

Mr. Parkinson

In the earlier part of the afternoon I was grateful for my training in Committee on Finance Bills, when I had the pleasure of serving with the hon. Member for West Lothian (Mr. Dalyell), who never ceased to surprise Committees by producing letters from virtually every chartered accountant in Scotland who had some interesting and obscure point to raise. I was glad that I had had some early training as I listened to the hon. Gentleman's interesting, albeit slightly long, speech.

I was not quite sure that the hon. Gentleman was quite sure about his attitude to the Bill and what he was most worried about. He gave us a graphic description of his knowledge of geography and how to get goods from A through B to C. He was demonstrating that rings could be run around the Bill and that it was a measure that nobody needed to bother about. He then argued that the Bill would put half the British labour force out of work and that it would do immense damage to a wide range of business. He gave us a little pen picture of everyone.

It may help the Committee if I explain our present position. When the Foreign Ministers met on 22 April, they committed themselves to returning to their countries and putting on to their statute books, if they needed to, legislation which would give them the power to implement, should they decide to do so, the United Nations resolution on sanctions, which was passed early in January but was vetoed by the Russians.

At the end of our proceedings, if they ever come to an end and if the Bill is enacted, we shall have a measure on the statute book that will add to the powers that already exist in the 1939 Act and will enable the Government to meet their commitment. When my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs returns to the Council of Ministers on Saturday, he will have fulfilled his pledge. He will have at his disposal a range of powers. We have entered certain provisos about the use of the powers. We shall use them only in concert with our European partners.

Some hon. Members have asked "What happens if other countries have not provided themselves with the relevant powers?" If that happens, there will be no question of the powers that our Foreign Secretary has being used. It is a fundamental part of the scheme that the powers will be used only in concert and that all the countries concerned will have to have powers to take similar steps before any country will be called on to implement any action.

I am sure that the hon. Member for Nuneaton (Mr. Huckfield) has sat on the Treasury Bench and become irritated from time to time. I do not doubt for a moment his deep concern for his constituents. I respect the way in which he is voicing those concerns and ensuring that his constituents' views and worries are aired in this place. If I was a little short with him from time to time, I apologise for that. I recognise that he has a real concern.

The Government have put themselves in the position of meeting a commitment. We are not going to move any faster than, or to move out of concert with, our allies. For instance, if cars cannot go from Britain from Iran, they will not be able to go from France to Iran. That is because the countries concerned have committed themselves to taking identical powers to stop the transfer of goods.

Mr. David Stoddart (Swindon)

The Minister does not know the French.

Mr. Parkinson

That eventuality will not arise.

Several hon. Members

rose—

Mr. Parkinson

I have listened to a great deal from Opposition Members. Perhaps they will listen in silence for a few moments as I reply to the debate.

I shall set something of a precedent. I shall deal with the amendments in the order in which they were taken. I shall answer the case for the amendments one at a time. The Government will not accept amendments Nos. 2 and 3, for the simple reason that they would undermine the Bill's purpose. If the amendments were accepted, the Government would not have the power to meet the commitments that the Foreign Secretary gave at the meeting on 22 April. They would deny him some of the powers that he would need if we were to implement the Security Council resolution.

Amendment No. 4 has continually preoccupied the hon. Member for Aberdare (Mr. Evans). The amendment appears to be based on a misconception. There is no intention that the powers under the Bill, or the powers under the 1939 Act, should be used to control the import of oil products. This is not dealt with in the Security Council's draft resolution. We do not export oil products to Iran on any substantial scale. There are some small exports of oil. That is hardly a surprising statement. The hon. Member for Aberdare has made his point, and I accept it. Theoretically, it would be possible to do what he said. However, the Bill will be used to implement only these powers and the sanctions resolution. There is no intention that the Bill should control oil imports.

Mr. Ioan Evans

rose—

Mr. Parkinson

I think that I have answered the hon. Gentleman. To my certain knowledge, he has raised this point four times.

The hon. Members for West Lothian, for Stockport, North (Mr. Bennett,) for Liverpool, Walton (Mr. Heffer) and for Merthyr Tydfil (Mr. Rowlands) and my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) raised a question on amendment No. 8. It seeks to remove restrictions on financial transactions. The arguments are wide ranging. We heard the bankers versus the workers argument. The Government are supposed to care about bankers but not about workers. We are supposed to be looking after our City friends. It was totally predictable that that argument would be advanced.

The measures concerned with the limitation of new credits on loans, the availability of deposit facilities and related matters are among those envisaged in paragraph 2(c) of the resolution before the Security Council. Hon. Members will be aware that we are already applying similar restrictions, on the basis of the dreaded guidance, to all major British banks. The banks have accepted a limitation on their right to carry on the business of extending further credit and of accepting further deposits. They accepted that limitation on their business at the end of last year. Indeed, I think they did so on 29 December. The banks have been operating—

Mr. Cryer

rose—

Mr. Parkinson

I shall not give way to the hon. Gentleman. The banks have been operating with limited rights as regards business with Iran. They accepted voluntarily restrictions on their opportunities to do business with Iran. Far from favouring them, we are simply saying that voluntary arrangements are already in being. They meet the requirements of the Security Council resolution. There is, therefore, no need to include such measures in the Bill. This measure does not bestow any privileges on the banks. It confirms their acceptance of a limitation on their powers to do business. That limitation has already been in place for several months.

Several Hon. Members

rose—

Mr. Parkinson

I shall not give way. I am prepared to give way to the hon. Member for Merthyr Tydfil, but the hon. Member for Keighley (Mr. Cryer) has only just come into the Chamber.

Several Hon. Members

rose—

The Chairman (Mr. Bernard Weatherill)

Order. Only one hon. Member may speak at a time.

Mr. Rowlands

Will the Minister ensure that guidance is made available in the Library?

Mr. Parkinson

I seem to remember that the right hon. Member for Ebbw Vale (Mr. Foot) used regularly to give a certain reply on Thursday afternoons—"Not next week".

Mr. Rowlands

Why not?

Mr. Parkinson

Because at present, as the hon. Gentleman said, matters of commercial confidentiality and banking confidentiality are involved. The hon. Gentleman himself said that, as and when orders are made, perhaps the Opposition would feel it right to demand that information. He said that there were limits and that commercial confidentialities were involved, and the banks are operating restrictions under the supervision of the Governor.

9.15 pm

Mr. Rowlands

Will the hon. Gentleman give way?

Mr. Parkinson

No, I am not giving way. The hon. Gentleman will not interrupt me again, because I shall not give way.

There is nothing more that I can say except that the hon. Gentleman's arguments are not soundly based and are misconceived.

Mr. McNamara

Will the hon. Gentleman give way.

Mr. Parkinson

No, I will not give way.

Mr. Cryer

Disgraceful !

Mr. Parkinson

I move on to amendment No. 9, on which again—[Interruption.] The hon. Member for West Lothian addressed the Committee for nearly two hours this afternoon. He repeated himself on innumerable occasions. He went on a great tour of Europe and of factories in Scotland. He is the last person who has any right to show any signs of irritation.

I now turn to amendment No. 9. This is a very important amendment and there is tremendous concern about this point. The purpose of the amendment is to widen the exception in the Bill relating to existing contracts by providing that renewals and extensions of existing contracts should be excluded from the powers in the Bill. Such a provision would be too wide and could lead to abuse of the exception in regard to existing contracts. I remind the House that the Bill deals only with the question of future contracts. Therefore, we believe that the amendment would be too wide and would produce an unsatisfactory result.

The Government intend to be flexible on questions of renewals or extensions of existing contracts. We recognise that frequently a new contract is required for purely technical reasons—to set a slightly increased price in view of inflation or to extend a delivery date which cannot be met. That kind of case, where it is in substance the same contract, we shall regard as a contract made before the date on which the order is made and, therefore, excluded from the powers in the Bill. Where, on the other hand, there is a major change in the terms of a contract or where a contract which has come to an end is renewed, we propose to regard this as a new contract. But each contract will have to be considered on its merits. It will be a question of fact. [Interruption.] I intend to come to the hon. Member for West Lothian and the question of Talbot.

Mr. Dalyell

It is absolutely unreal, as the Minister knows.

Mr. Cryer

What right of appeal is there?

Mr. Parkinson

The hon. Member for Nuneaton—unlike his hon. Friend the Member for West Lothian, who seems to enjoy the sound of his own voice enormously—raised a very serious matter. He said that there is widespread concern among Talbot workers. He gave us the figures yesterday, and he repeated them today, of the number of people who are involved as subcontractors, suppliers, or direct employees of Talbot. I will state again what the position is.

The Foreign Secretary is going to the meeting on Saturday with wide enabling powers. The Government have given a great deal of thought and care to the situation of Talbot and to safeguarding Talbot's position as much as we can. The Foreign Ministers will decide what form sanctions will take and orders will then be made. However, we realise the importance of this contract—its importance to the company and to the hon. Gentleman's constituents. We know that other companies which have similar concerns are in the market. We are not seeking to adopt measures which will harm us more than they will harm Iran.

I cannot be specific, because the Foreign Ministers will decide on Saturday. I hope that a nod is as good as a wink to a blind horse, and that the hon. Gentleman realises that our Foreign Secretary will attend the meeting in full awareness of the problems of Talbot and the need to ensure that that important contract is safeguarded.

Mr. Les Huckfield

The Minister is trying to be helpful. However, PSA Citroen, which owns all of Talbot apart from the 10 per cent. owned by Talbot United States, is a private French company. It is not Government controlled. How can the Minister prevent that company from shifting the contract from a United Kingdom to a French source?

Mr. Parkinson

It is impossible for this Government to order the commercial decisions of private French companies, regardless of a sanctions order. That power was never even in the hands of the previous Labour Administration. Why should the company wish to switch the contract? Compliments were paid to its productivity. If the hon. Gentleman has such a low opinion of the owners of Talbot, why does he fight so hard for his workers? Surely he feels that the company is to be trusted, that it has made a good investment and that his constituents are worth backing and will do a good job. If they continue to do so, I do not see why the Bill should influence the company to make that decision.

Mr. Cryer

Will the hon. Gentleman give way? He has misled the House.

Mr. Parkinson

I have not misled the House. I do not intend to give way to the hon. Gentleman, who has not been in the Chamber.

Mr. Heffer

On a point of order, Mr. Weatherill. May I respectfully inform the Minister that we are in Committee? It is therefore, courteous to give way.

The Chairman

That is not a point of order for the Chair. It is up to the Minister whether he gives way.

Mr. Cryer

On a point of order, Mr. Weatherill. Is it in order for the Minister to say that he does not have powers to deal with a private company operating in this country? Under the Industry Act 1975, the Minister has powers to require a foreign-owned company to behave in a certain way. The Minister should stay within the rules of order and make accurate representations and respond to representations made to him.

The Chairman

It is up to the Minister to make his own speech. It is not a matter for the Chair.

Mr. Parkinson

The hon. Gentleman has not been in the Chamber for the debate. He comes in, promptly mishears what I say, misquotes me and expects to be taken seriously.

The hon. Member for Nuneaton said that a privately owned French company, based in France, had the power to take—

Mr. Cryer

The Minister does not know; he is only an amiable bar-fly.

Mr. Parkinson

I regard those remarks from an hon. Gentleman who spends more than his share of time down in the nether regions as offensive.

Mr. Cryer

I do not know to what the Minister is referring, but it appears that he is accusing me of spending time in the bar. That is not true and the remark should be withdrawn.

Hon. Members

Withdraw.

The Chairman

The nether regions of the House cover a large area. If the Minister was referring to the bar, I am sure that he will withdraw the remark.

Mr. Parkinson

You are right, Mr. Weatherill, in suggesting that the nether regions cover a wide area. I was trying to answer a serious point. The hon. Gentleman's hon. Friend said that a privately owned French company had control of the Talbot company. I said, simply, that this Government are not in a position to give orders to a privately owned French-based company. That must be a correct statement of the facts. I was talking about giving orders to the controlling parent company based in France. I hope that the hon. Gentleman accepts that this is not within the powers of this Government or any other British Government.

Amendment No. 10 seems to us rather baffling. I was not much clearer having listened to the hon. Member for Stockport, North move it. I should like to explain why I find it puzzling. In the circumstances of this legislation, it seems unnecessary to make a specific exclusion of contracts made as a result of carrying out international obligations. Any contract related to, or connected with, Iran falling within the terms of clause 1 of the Bill and resulting from the carrying out of international obligations would almost certainly result from international obligations owed to Iran. We are not aware of any obligations owed to Iran under any international agreement to enter into a new contract. We could not understand what the amendment was aimed at.

My hon. Friend the Member for Bury St. Edmunds said he hoped that this amendment would not stand in the way of disaster relief. I am happy to give the assurance that it would not be used and could not be used in that way. It would not be the Government's intention to do so.

I turn now to amendment No. 11. The Government accept that any implementation of sanctions may cause losses to our own people as well as to Iran and to Iranian nationals and enterprises. Indeed, it is for that reason, among others, that we used every possible diplomatic means at our disposal before we moved towards taking sanctions. I reminded the House yesterday that even at the 22 April meeting the Foreign Ministers divided their actions into two stages—political actions that were taken pretty well imediately, and then a warning to Iran that if progress was not made towards release of the hostages further steps would have to be taken. The Government have not been rushing towards this step. They have been forced gradually to take action because it has been requested by our American allies and because it is the only means left at our disposal, every diplomatic channel having been used to put pressure on the Iranian Government.

We think that clear exclusion, on the face of the Bill, of existing contracts should go a long way to minimise any loss to British firms. There will be no element of retroactivity about the provisions of the Bill. Firms can do much to safeguard their position before sanctions are actually implemented by Order in Council. But the Government have never previously accepted a liability to pay for losses when sanctions have been carried out on a collective, international basis. We feel that, in the present climate, this would not be the time to set a precedent.

Mr. Rowlands

The Minister has made an important statement about the position of existing contracts and the fact that the Bill is not retroactive and that there is, therefore, no need for compensation. Would he extend that argument equally to the powers under the 1939 Act? That is our concern and worry.

Mr. Parkinson

I told the House last night, as the hon. Gentleman knows, that orders under the 1939 Act do not require the approval of the House. We have, however, committed ourselves to taking parallel action that will give the House a chance to consider any orders made under the Act. If the House showed its disapproval of those measures, any orders made would be revoked.

9.30 p.m.

Mr. Rowlands

The Minister made an important statement about the retroactivity of the provision. He said that the Bill in no way affects existing contracts and that there is, therefore, no need for any form of compensation. Will he make the same statement about the powers that the Government might exercise under the 1939 Act? That is where the worry and concern lie—over the existing contracts.

Mr. Parkinson

I explained that the Government cannot commit themselves so specifically, because the Bill simply adds to the range of powers that the Foreign Secretary will need if he is to meet the obligation that he undertook on 22 April. The Bill is an enabling measure, as is the 1939 Act. How these Acts are used will depend on the decision to be taken at the weekend. I have pointed out that the Foreign Secretary is aware of the importance of existing contracts that could be affected by the 1939 Act. He will go to the meeting with that very much in mind.

Mr. Les Huckfield

I am grateful to the Minister for the constructive spirit in which he is trying to respond to the debate. Can he tell us how the Secretary of State for Employment would respond to an application by a company affected by a 1939-type sanctions provision, under the short-term working compensation scheme? How would that be received by the Government?

Mr. Parkinson

I should like to be helpful, but the hon. Member must address that question to my right hon. Friend the Secretary of State for Employment. I cannot believe that he really expects me to stand at the Dispatch Box now and respond on this important issue. It will be treated very seriously by my right hon. Friend, to whom I suggest he writes.

We have had a wide-ranging debate, covering a large number of amendments. I have tried to answer all the points, but there were so many specific matters that it has not been possible for me to deal with them all. I hope that the

Committee, having listened to my explanation why the Government do not find any of the amendments acceptable, will accept my advice. I hope that the hon. Members who have tabled the amendments will not press them.

The Parliamentary Secretary to the Treasury (Mr. Michael Jopling)

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

Question put, That the Question be now put:—

The Committee divided: Ayes 188, Noes 53.

Division No. 291]	AYES	[9.33 pm
Alexander, Richard	Gow, Ian	Nelson, Anthony
Alton, David	Gower, Sir Raymond	Newton, Tony
Ancram, Michael	Grant, Anthony (Harrow C)	Normanton, Tom
Aspinwall, Jack	Grieve, Percy	Onslow, Cranley
Atkins, Robert (Preston North)	Griffiths, Eldon (Bury St Edmunds)	Page, John (Harrow, West)
Baker, Nicholas (North Dorset)	Griffiths, Peter (Portsmouth N)	Page, Rt Hon Sir R. Graham
Banks, Robert	Gummer, John Selwyn	Page, Richard (SW Hertfordshire)
Beaumont-Dark, Anthony	Hamilton, Hon Archie (Eps'm&Ew'll)	Parkinson, Cecil
Beith, A. J.	Hamilton, Michael (Salisbury)	Parris, Matthew
Benyon, Thomas (Abingdon)	Hampson, Dr Keith	Patten, Christopher (Bath)
Best, Keith	Hannam, John	Patten, John (Oxford)
Bevan, David Gilroy	Harrison, Rt Hon Walter	Penhaligon, David
Biggs-Davison, John	Hawksley, Warren	Percival, Sir Ian
Blackburn, John	Heddle, John	Prentice, Rt Hon Reg
Boscawen, Hon Robert	Henderson, Barry	Price, David (Eastleigh)
Bradford, Rev. R.	Higgins, Rt Hon Terence L.	Raison, Timothy
Braine, Sir Bernard	Hill, James	Rathbone, Tim
Bright, Graham	Hogg, Hon Douglas (Grantham)	Rees-Davies, W. R.
Brinton, Tim	Holland, Philip (Carlton)	Renton, Tim
Brittan, Leon	Hooson, Tom	Rhodes James, Robert
Brocklebank-Fowler, Christopher	Howells, Geraint	Rhys Williams, Sir Brandon
Brotherton. Michael	Hunt, David (Wirral)	Ridley, Hon Nicholas
Brown, Michael (Brigg & Sc'thorpe)	Hunt, John (Ravensbourne)	Ridsdale, Julian
Buchanan-Smith, Hon Alick	Hurd, Hon Douglas	Rossi, Hugh
Budgen, Nick	Johnston, Russell (Inverness)	St. John-Stevas, Rt Hon Norman
Butcher, John	Jopling, Rt Hon Michael	Shelton, William (Streatham)
Carlisle, John (Luton West)	Kaberry, Sir Donald	Shepherd, Colin (Hereford)
Carlisle, Kenneth (Lincoln)	Kellett-Bowman, Mrs Elaine	Shepherd, Richard (Aldridge-Br'hills)
Chalker, Mrs. Lynda	Kershaw, Anthony	Shersby, Michael
Clarke, Kenneth (Rushcliffe)	King, Rt Hon Tom	Silvester, Fred
Clegg, Sir Walter	Knight, Mrs Jill	Sims, Roger
Cockeram, Eric	Lamont, Norman	Speed, Keith
Colvin, Michael	Latham, Michael	Speller, Tony
Costain, A. P.	Lawrence, Ivan	Spicer, Jim (West Dorset)
Cranborne, Viscount	Lee, John	Spicer, Michael (S Worcestershire)
Crouch, David	Le Marchant, Spencer	Sproat, lain
Dean, Paul (North Somerset)	Lennox-Boyd, Hon Mark	Squire, Robin
Dorrell, Stephen	Lloyd, Ian (Havant & Waterloo)	Stainton, Keith
Douglas-Hamilton, Lord James	Lloyd, Peter (Fareham)	Stanbrook, Ivor
Dover, Denshore	Lyell, Nicholas	Stanley, John
Dunn, Robert (Dartford)	Macfarlane, Nell	Steen, Anthony
Durant, Tony	McQuarrie, Albert	Stevens, Martin
Dykes, Hugh	Marland, Paul	Stewart, Rt Hon Donald (W Isles)
Edwards, Rt Hon N. (Pembroke)	Marlow, Tony	Stewart, Ian (Hitchin)
Elliott, Sir William	Marshall, Michael (Arundel)	Stewart, John (East Renfrewshire)
Emery, Peter	Mather, Carol	Stokes, John
Fairbairn, Nicholas	Maude, Rt Hon Angus	Stradling Thomas, J.
Fairgrieve, Russell	Mawby, Ray	Taylor, Teddy (Southend East)
Faith, Mrs Sheila	Mawhinney, Dr Brian	Tebbit, Norman
Farr, John	Maxwell-Hyslop, Robin	Temple-Morris, Peter
Fenner, Mrs Peggy	Meyer, Sir Anthony	Thompson, Donald
Fletcher-Cooke, Charles	Miller, Hal (Bromsgrove & Redditch)	Thornton, Malcolm
Fookes, Miss Janet	Mills, lain (Meriden)	Trippier, David
Forman, Nigel	Mills, Peter (West Devon)	Viggers, Peter
Fox, Marcus	Moate, Roger	Waddington, David
Fraser, Peter (South Angus)	Monro, Hector	Wakeham, John
Gardner, Edward (South Fylde)	Montgomery, Fergus	Waldegrave, Hon William
Garel-Jones, Tristan	Morrison, Hon Peter (City of Chester)	Waller, Gary
Glyn, Dr Alan	Murphy, Christopher	Ward, John
Goodlad, Alastair	Myles, David	Watson, John
Gorst, John	Needham, Richard	Wells, Bowen (Hert'rd & Stev'nage)
Whitney, Raymond	Winterton, Nicholas	TELLERS FOR THE AYES:
Wickenden, Keith	Wolfson, Mark	Mr. Peter Brooke
Wilson, Gordon (Dundee East)	Young, Sir George (Acton)	and Mr. John Cope.
NOES
Anderson, Donald	Fletcher, Ted (Darlington)	Powell, Rt Hon J. Enoch (S Down)
Atkinson, Norman (H'gey, Tott'ham)	Foulkes, George	Powell, Raymond (Ogmore)
Booth, Rt Hon Albert	Fraser, John (Lambeth, Norwood)	Sheerman, Barry
Buchan, Norman	Hamilton, W. W. (Central Fife)	Skinner, Dennis
Callaghan, Jim (Middleton & P)	Haynes, Frank	Soley, Clive
Campbell-Savours, Dale	Heffer, Eric S.	Spearing, Nigel
Canavan, Dennis	Home Robertson, John	Spriggs, Leslie
Clark, Dr David (South Shields)	Huckfield, Les	Stoddart, David
Craigen, J. M. (Glasgow, Maryhill)	Hughes, Mark (Durham)	Straw, Jack
Cryer, Bob	Hughes, Robert (Aberdeen North)	Taylor, Mrs Ann (Bolton West)
Dalyell, Tam	Jones, Dan (Burnley)	Tinn, James
Davis, Terry (B'rm'ham, Stechtord)	Kilfedder, James A.	Wainwright, Richard (Colne Valley)
Dixon, Donald	Lamond, James	Walker, Rt Hon Harold (Doncaster)
Dormand, Jack	McCartney, Hugh	Welsh, Michael
Dubs, Alfred	McCusker, H.	Winnick, David
Eastham, Ken	Morris, Rt Hon Charles (Openshaw)
Evans, Ioan (Aberdare)	Newens, Stanley	TELLERS FOR THE NOES:
Evans, John (Newton)	O'Neill, Martin	Mr. Kevin McNamara
Ewing, Harry	Palmer, Arthur	and Mr. Andrew F. Bennett.

Question accordingly agreed to.

Question put accordingly, That the amendment be made:—

The Committee divided: Ayes 53, Noes 181.

Division No. 292]	AYES	[9.43 pm
Anderson, Donald	Evans, John (Newton)	Powell, Raymond (Ogmore)
Atkinson, Norman (H'gey, Tott'ham)	Fletcher, Ted (Darlington)	Sheerman, Barry
Booth, Rt Hon Albert	Foulkes, George	Skinner, Dennis
Buchan, Norman	Fraser, John (Lambeth, Norwood)	Soley, Clive
Callaghan, Jim (Middleton & P)	Hamilton, James (Bothwell)	Spearing, Nigel
Campbell-Savours, Dale	Haynes, Frank	Spriggs, Leslie
Canavan, Dennis	Heffer, Eric S.	Stewart, Rt Hon Donald (W Isles)
Carmichael, Neil	Home Robertson, John	Stoddart, David
Clark, Dr David (South Shields)	Huckfield, Les	Straw, Jack
Craigen, J. M. (Glasgow, Maryhill)	Hughes, Mark (Durham)	Taylor, Mrs Ann (Bolton West)
Cryer, Bob	Hughes, Robert (Aberdeen North)	Wainwright, Richard (Colne Valley)
Dslyell, Tam	Jones, Dan (Burnley)	Walker, Rt Hon Harold (Doncaster)
Davis, Terry (B'rm'ham, Stechford)	Kilfedder, James A.	Welsh, Michael
Dewar, Donald	Lamond, James	Wilson, Gordon (Dundee East)
Dixon, Donald	McCartney, Hugh	Winnick, David
Dormand, Jack	Morris, Rt Hon Charles (Openshaw)
Dubs, Alfred	Newens, Stanley	TELLERS FOR THE AYES:
Eastham, Ken	O'Neill, Martin	Mr. Kevin McNamara and
Evans, Ioan (Aberdare)	Palmer, Arthur	Mr. Andrew F. Bennett.
NOES
Alexander, Richard	Chalker, Mrs. Lynda	Fraser, Peter (South Angus)
Alton, David	Clarke, Kenneth (Rushcliffe)	Garel-Jones, Tristan
Ancram, Michael	Clegg, Sir Walter	Glyn, Dr Alan
Aspinwall, Jack	Cockeram, Eric	Goodlad, Alastair
Atkins, Robert (Preston North)	Colvin, Michael	Gorst, John
Baker, Nicholas (North Dorset)	Cope, John	Gow, Ian
Banks, Robert	Costain, A. P.	Gower, Sir Raymond
Beaumont-Dark, Anthony	Crouch, David	Grant, Anthony (Harrow C)
Beith, A. J.	Dean, Paul (North Somerset)	Grieve, Percy
Benyon, Thomas (Abingdon)	Dorrell, Stephen	Griffiths, Eldon (Bury St Edmunds)
Best, Keith	Douglas-Hamilton, Lord James	Griffiths, Peter (Portsmouth N)
Bevan, David Gilroy	Dover, Denshore	Gummer, John Selwyn
Biggs-Davison, John	Dunn, Robert (Dartford)	Hamilton, Hon Archie (Eps'm&Ew'll)
Blackburn, John	Durant, Tony	Hamilton, Michael (Salisbury)
Boscawen, Hon Robert	Dykes, Hugh	Hampson, Dr Keith
Braine, Sir Bernard	Edwards, Rt Hon N. (Pembroke)	Hannam, John
Bright, Graham	Elliott, Sir William	Harrison, Rt Hon Waller
Brinton, Tim	Emery, Peter	Hawksley, Warren
Brittan, Leon	Fairbairn, Nicholas	Heddle, John
Brocklebank-Fowler, Christopher	Fairgrieve, Russell	Henderson, Barry
Brooke, Hon Peter	Faith, Mrs Sheila	Higgins, Rt Hon Terence L.
Brotherton, Michael	Fenner, Mrs Peggy	Hill, James
Brown, Michael (Brigg & Sc'thorpe)	Fisher, Sir Nigel	Hogg, Hon Douglas (Grantham)
Buchanan-Smith, Hon Alick	Fletcher-Cooke, Charles	Holland, Philip (Carlton)
Budgen, Nick	Fookes, Miss Janet	Hooson, Tom
Carlisle, John (Luton West)	Forman, Nigel	Howells, Geraint
Carlisle, Kenneth (Lincoln)	Fox, Marcus	Hunt, John (Ravensbourne)
Hurd, Hon Douglas	Myles, David	Sproat, lain
Johnston, Russell (Inverness)	Needham, Richard	Squire, Robin
Jopling, Rt Hon Michael	Nelson, Anthony	Stainton, Keith
Kaberry, Sir Donald	Normanton, Tom	Stanbrook, Ivor
Kellett-Bowman, Mrs Elaine	Onslow, Cranley	Stanley, John
Kershaw, Anthony	Page, John (Harrow, West)	Steen, Anthony
King, Rt Hon Tom	Page, Rt Hon Sir R. Graham	Stevens, Martin
Knight, Mrs Jill	Page, Richard (SW Hertfordshire)	Stewart, Ian (Hitchin)
Lamont, Norman	Parris, Matthew	Stewart, John (East Renfrewshire)
Latham, Michael	Patten, Christopher (Bath)	Stradling Thomas, J.
Lawrence, Ivan	Patten, John (Oxford)	Taylor, Teddy (Southend East)
Lee, John	Penhaligon. David	Tebbit, Norman
Le Marchant, Spencer	Percival, Sir Ian	Temple-Morris, Peter
Lermox-Boyd, Hon Mark	Prentice, Rt Hon Reg	Thompson, Donald
Lloyd, Ian (Havant & Waterloo)	Price, David (Eastleigh)	Thorne, Neil (Ilford South)
Lloyd, Peter (Fareham)	Raison, Timothy	Thornton, Malcolm
Lyell, Nicholas	Rathbone, Tim	Tinn, James
Macfarlane, Nell	Renton, Tim	Trippier, David
McQuarrie, Albert	Rhodes James, Robert	Viggers, Peter
Marland, Paul	Rhys Williams, Sir Brandon	Wakeham, John
Marshall, Michael (Arundel)	Ridley, Hon Nicholas	Waldegrave, Hon William
Mather, Carol	Ridsdale, Julian	Waller, Gary
Maude, Rt Hon Angus	Rossi, Hugh	Ward, John
Mawby, Ray	St. John-Stevas, Rt Hon Norman	Watson, John
Mawhinney, Dr Brian	Shelton, William (Streatham)	Wells, Bowen (Hert'rd & Stev'nage)
Maxwell-Hyslop, Robin	Shepherd, Colin (Hereford)	Whitney, Raymond
Meyer, Sir Anthony	Shepherd, Richard (Aldridge-Br'hills)	Wickenden, Keith
Miller, Hal (Bromsgrove & Redditch)	Shersby, Michael	Winterton, Nicholas
Mills, lain (Meriden)	Silvester, Fred	Wolfson, Mark
Mills, Peter (West Devon)	Sims, Roger	Young, Sir George (Acton)
Moate, Roger	Smith, Dudley (War. and Leam'ton)
Monro, Hector	Speed, Keith	TELLERS FOR THE NOES:
Montgomery, Fergus	Speller, Tony	Mr. David Waddington and
Morrison, Hon Peter (City of Chester)	Spicer, Jim (West Dorset)	Mr. Tom Newton.
Murphy, Christopher	Spicer, Michael (S Worcestershire)

Question accordingly negatived.

Mr. Dalyell

On a point of order, Mr. Weatherill. Will you allow us to divide on amendments Nos. 8 and 11 after the next debate?

The Chairman

I am pleased to confirm that I shall allow Divisions on amendments Nos. 8 and 11 after we have debated amendment No. 35.

Mr. Rowlands

I beg to move amendment No. 35, in page 1, line 12, at end insert— ' (1A) No Order in Council shall be made under this section until the Security Council of the United Nations has after the passing of this Act discussed the detention of hostages referred to in subsection (1) of this section.'.

The Chairman

With this we may discuss the following amendments:

No. 36, in page 1, line 12, at end insert— '(1B) No Order in Council under this section shall be made unless the Secretary of State has previously certified to each House of Parliament that each of the states listed in the Schedule to this Act has adopted legislation to the like effect or has made provision to the like effect as that made in the Order in Council.' No. 39, new schedule—States having adopted sanctions legislation— France, the Federal Republic of Germany, Italy, the Netherlands, Belgium, Denmark, the Republic of Ireland and Luxembourg.'.

Mr. Rowlands

The amendments raise two issues. Amendments Nos. 35 and 39 deal with the diplomatic moves that we believe should take place before any order is enforced. However, amendment No. 36 deals with the way in which we and other EEC countries act. I shall deal with that separately.

The case for amendment No. 35 was set out powerfully by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) yesterday. It is fundamental to our approach that we cannot and should not see the American diplomatic hostages issue as an East-West confrontation or as a special United States-Iran relationship. The matter is not entirely bilateral. It should not be interpreted as an East-West issue.

As my right hon. Friend said yesterday, we should see the hostages issue as an international diplomatic problem, which is subject to international law and which has been sustained by nation States even when they have been on the point of hostility or war. The principle of allowing diplomatic personnel to leave the territory of a nation even after a declaration of war has been a fundamental and profound principle, which nations have upheld. That is what is being challenged by the detention of the American diplomats.

It is tragic that the diplomatic hostages issue has been overtaken by subsequent events, in particular by the Soviet invasion of Afghanistan. There has been a break in international consensus on the hostages issue. Last December the Security Council unanimously voted to condemn the action. It called upon the Iranian authorities to obtain the release of the hostages and to allow them to return home. On 15 December the International Court of Justice made an important ruling that reaffirmed the principle and called upon the Iranian authorities to release the hostages. It is important to remind ourselves that that is at the heart of the issue. It is not a "back Carter" issue.

When Ministers presented the case yesterday in those terms, they did an injustice to the issue. It involves the way in which the international community will back international law and the customary conventions that allow diplomatic representatives to be free from

the brutal treatment and imprisonment from which the American diplomats now suffer. As my right hon. Friend the Member for Stepney and Poplar said forcefully yesterday, the tragedy of the position is that since last December some of that international consensus has been lost. We believe very strongly that, before anything else, that principle and international understanding about the nature—

It being Ten o'clock, The Chairman left the Chair to report Progress and ask leave to sit again.

Committee report Progress.