IRAN (Hansard, 19 May 1980)

§ The Lord Privy Seal (Sir Ian Gilmour)
With permission, Mr. Speaker, I shall make a statement on Iran following the decisions taken during the informal meeting of Foreign Ministers of the Nine in Naples on 17–18 May. A copy of the statement issued by the Foreign Ministers of the Nine will be printed in the Official Report.
The Ministers reviewed the latest developments in Iran. There were some grounds for encouragement, but nothing that constituted decisive progress leading to the hostages' release. Accordingly, as agreed in their declaration of 22 April, they decided to proceed without delay with the economic sanctions set out in the Security Council draft resolution of 10 January. The necessary orders will now be drawn up. There is agreement that the conditions and circumstances of application to be followed will be decided in common with our partners. It is accordingly our intention to act simultaneously with our partners on the basis of legal instruments co-ordinated to achieve parallel effect.
The House will have the opportunity to debate the orders after they have been laid. As was made clear at the time when the House was considering the Iran (Temporary Powers) Act 1980, the Government intend to follow a variation of the affirmative resolution procedure for orders made under this Act. This means that such orders will lapse unless approved by the House within 28 sitting days. A parallel procedure will be followed for orders made under the Import, Export and Customs (Defence) Act 1939.
On the question of existing contracts, it was agreed that contracts for the export of goods to Iran entered into after 4 November 1979 would be affected by the sanctions. Export of goods under such contracts would be prohibited under the 1939 Act. However, service contracts will not be affected, except for new service contracts in support of industrial projects, which will be banned as from the date of the entry into force of the appropriate Order in Council. We shall be co-ordinating closely with our Community partners to achieve parallel effect on these questions.

§ Mr. Shore
This is a very unsatisfactory statement. The Lord Privy Seal will know from last week's debate that it was our view—a view widely shared in the House—that there should be further diplomatic efforts before triggering the sanctions against Iran. Does he not consider that the events of the last 72 hours, including President Bani-Sadr's open appeal to Britain and other European countries for a political initiative, the United Nations resumed mission to Tehran, and the bringing forward to next week of the date of the opening of the Iranian Parliament, strongly reinforce the case for a measure of delay?
Secondly, is the right hon. Gentleman not aware that the House and the country are now totally confused about the Government's sanctions policy? The Iran (Temporary Powers) Act and ministerial speeches clearly indicated that existing contracts would be exempt, at least in the first stage. Why, then, have the Government changed their mind? Has not the decision to make sanctions retrospective to 4 November made complete nonsense of the Act and of last week's debate?
I note what is said about the laying of orders, and I hope that arrangements will now be made for an early debate.
Finally, may I express my amazement and disquiet that the Minister has seen fit to confine his statement to Iran and to say nothing about the whole range of issues, including Afghanistan, East-West relations, the Middle East and the United Kingdom's contribution to the EEC budget, which have surely been the main subjects for discussion at Vienna, Naples, and now Warsaw during the past three to four days? This is not the way in which to treat the House, and I give notice that we shall expect a further statement on these matters tomorrow.

§ Sir I. Gilmour
As the right hon. Gentleman implied, there have, of course, been diplomatic contacts with Iran over the last few days, and he will be aware that the Foreign Ministers of the Nine referred to them in the last paragraph of their declaration. As I said in my statement, the Foreign Ministers did not think that they constituted decisive progress leading to the release of the hostages.
On the question of retrospection, the right hon. Gentleman is not quite right. 32 He will be aware of what the Minister of State said in the House on the Second Reading of the Iran (Temporary Powers) Bill. In order to make it clear to the House I shall quote what my hon. Friend said at col. 919 of the Official Report. In fact, at col. 921 he said it better—[Interruption.]

§ Mr. Speaker
Order. Hon. Members must not rise while another Member is addressing the House.

§ Sir I. Gilmour
I am prepared to read column 919 later, but column 921 is more comprehensive. The Minister of State said: The hon. Member for Blackburn (Mr. Straw) asked about existing trade under existing contracts. This Bill gives the Government no power under existing contracts. Powers exist under the 1939 Act not over contracts, but as regards the shipment of goods. No decision has been taken to use those powers. No decision would be taken unless it were clear that our main competitors were doing the same. If any such proposal were made, it would have to be submitted to this House for approval."—[Official Report, 12 May 1980; Vol. 984, c. 921.] That deals with the second point.
Concerning the right hon. Gentleman's third point, we shall debate the orders as soon as possible. That will have to be decided in conjunction with our partners and with the usual channels.
As to the right hon. Gentleman's fourth point, he displayed, if I may say so, some ignorance about Community procedures. He will be aware that this was an informal meeting of Foreign Ministers, of the sort that takes place every six months, and that it is not customary for decisions to be taken at these informal meetings. It was not customary under the previous Government, and it is not customary under the present Government, for a statement to be made after them. I am making a statement about Iran because the Foreign Ministers agreed exceptionally at Naples that their several Governments would now take certain action. In view of last week's debate, I thought it was only courtesy to the House to make a statement.

§ Mr. Shore
I should like to press the right hon. Gentleman a little further on the last part of his answer; indeed, I should like to press him on virtually everything that he said. It really will not do to make a statement to the House on 33 the basis of having had what he calls an informal meeting of Foreign Ministers, about which he says that the convention is that reports are not made, to found upon that informal meeting a major statement of policy, and then to say that other matters—we know that this has been a weekend of quite exceptional diplomatic activity—under discussion in Vienna as well as in Naples are not to be the subject of report to the House. I warn the right hon. Gentleman that this will not be acceptable to us. If this is to be the new practice of the Government we shall find many ways of making them change their mind.

§ Sir I. Gilmour
It is no good the right hon. Gentleman working himself into a rage. He knows the procedure. We are acting here in accordance with the historic procedures. The matter concerning Iran was quite exceptional. It was well known that the Foreign Ministers at the informal meeting were, for once, intending to make a decision on the matter. But, as the right hon. Gentleman well knows—or should know—decisions are not usually taken at informal meetings of Foreign Ministers.

§ Mr. Amery
We are hoping that the prospect of sanctions, allied to quiet diplomacy, will lead to the release of the hostages, but does my right hon. Friend agree that the decisions taken present us with an awkward dilemma? If the sanctions fail—they usually do—the credibility of the West will be still further weakened, and we shall have no option except to strengthen the Western military capability in South-West Asia. If, on the other hand, they succeed in imposing unacceptable damage on the Iranian economy, this will redound to the advantage of both the pro-Soviet and the pro-Western opponents of the present Iranian Government. Should not we make up our minds fairly quickly, to identify who are our friends in Iran?

§ Sir I. Gilmour
My right hon. Friend has pointed to the disadvantages that are attached to sanctions. I think that many people in the House, if not most people, would agree with him. In principle, most people are against the sanctions, because usually sanctions do not work, but after two days of debate in the House last week, my right hon. Friend and the rest 34 of the House will be aware of the reason why this course has been adopted.

§ Mr. Russell Johnston
What are the grounds for encouragement to which the Lord Privy Seal referred, and why have they had no effect on the timing of the sanctions?
The Lord Privy Seal said that the sanctions would be introduced in parallel by the members of the Community. How does he intend to demonstrate this to the House, following the debate?

§ Sir I. Gilmour
With regard to the first part of the hon. Gentleman's question, I refer him to the last paragraph in the declaration by the Foreign Ministers. I also refer him to the various aspects of what my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) has just called "quiet diplomacy".
With regard to simultaneity, we shall have to co-ordinate very closely with our partners, and we are in very close touch with them.

§ Mr. Dalyell
If the 1939 Act is now considered sufficient, what on earth was the House of Commons doing on Monday and Tuesday of last week? Will the Lord Privy Seal look at the statement made by the Minister of State, Foreign and Commonwealth Office? He said: We came to the conclusion that the 1939 Act was not sufficient for our purposes because, although it is a blockbuster, its scope is too narrow.—[Official Report, 12 May 1980; Vol. 984, c. 919.] What has changed in the last 72 hours?

§ Sir I. Gilmour
Nothing at all. Not for the first time, the hon. Gentleman has totally misunderstood the position. We shall have to produce orders under both Acts. The 1939 Act is not sufficient. For one thing, it does not deal with service contracts; for another, it does not deal with transport.

§ Sir Derek Walker-Smith
The announcement referred, I think, to the special legal difficulties likely to be encountered in Germany and Italy in regard to retrospection in the context of these contracts. Can my right hon. Friend say in what way the legal position there differs from that in this country, where, presumably, the trader would have to rely on the doctrine of frustration and that of an intervening act, if sued for 35 breach of contract? Could my right hon. Friend make a statement in the House—or get one of his right hon. Friends to do so—elaborating somewhat, for the guidance of those concerned, the position of people involved in contracts and saying how we differ in this respect from the other two countries?

§ Sir I. Gilmour
I would not want to burden the House with my views about the legal position in Germany and other countries. That would be beyond my competence. I can only say to my right hon. and learned Friend that, as I suggested earlier, we shall aim to act simultaneously and also with the same degree of severity over these matters, to see that we are not getting in front of our partners, nor getting behind them. That must be our objective, and I hope the House will agree that it is a sensible one.

§ Mr. Winnick
Is the right hon. Gentleman aware that many will feel that the Government have cheated over the date when sanctions are to be applied, and that those who will suffer and feel most strongly are those whose jobs could be at risk in this country? Would it not have been far better, on the merits of the matter, for the Foreign Ministers to recognise that sanctions are a futile and farcical gesture, which—as was pointed by many of us on the Labour Benches during the debate last week—will in no way help to secure the release of one hostage?

§ Sir I. Gilmour
I do not know whether the hon. Gentleman is always consistent about sanctions and thinks that they should never be pursued anywhere, but to say that we have been cheating is characteristic of him. It is totally wrong. I have already read out to the House what my hon. Friend said during the debate, and my hon. Friend the Minister for Trade said much the same thing. There is no question whatever of cheating.

§ Mr. Temple-Morris
Does my right hon. Friend agree that if, at the end of the day, in addition to sanctions, and in order to get the hostages released, we are obliged to consent to some sort of bizarre trial or inquiry into the role of the United States of America—and, indeed, the Shah—in Iran, everybody 36 should be properly represented at those proceedings? Does he further agree that in addition there should be ample opportunity to compare the present regime with its predecessor?

§ Sir I. Gilmour
No doubt that is so, but my hon. and learned Friend will appreciate that it goes well beyond the confines of my statement.

§ Mr. Ennals
Surely the right hon. Gentleman must recognise that the statement that he made goes against the will of the House? It was perfectly clear in the debate that the measure did not apply to contracts made before the debate. Surely the right hon. Gentleman will agree that many hon. Members on each side of the House voted for the Bill in those circumstances. He is now telling the House something that is quite different. Surely, what he is now suggesting is against the absolute will of the House, as expressed in the Lobbies.

§ Sir I. Gilmour
I do not think that a point becomes any stronger by being repeated three times. I have already given the answer. The 1980 Act does not apply to existing contracts, but, as my hon. Friend made clear several times to the House, the 1939 Act does.

§ Mr. Aitken
Did the Foreign Ministers of the EEC receive any indication from the French Foreign Minister as to what would be said about Iran by President Giscard to President Brezhnev at their mysteriously private summit meeting? If not, was this not a serious omission?

§ Sir I. Gilmour
My hon. Friend will appreciate that that has very little to do with my statement.

§ Mr. Ioan Evans
Have not the Government completely misled the House on this question? Is it not a fact that the 1939 Act does not cover service contracts or transport contracts? Is the right hon. Gentleman not aware that there may well have been service and transport contracts arranged between 4 November and today, yet those who have drawn up those contracts were not aware that this legislation would be retrospective? If the measure is an enabling Act and needs to be amended, will amending legislation be brought before the House?

§ Sir I. Gilmour
Repeating myself for the fourth time will not make any difference. It has been made perfectly clear that the 1939 Act applies in this case and that there is no question of amending legislation being needed.

§ Sir Nicholas Bonsor
Is my right hon. Friend aware that on the Government Benches he had overwhelming support in bringing legislation forward to use sanctions against Iran? However, is he also aware that many of us on the Government Benches were not aware, in listening to the debates last week, that the retrospective element of the legislation which will now be involved against Iran was even being considered? Is he further aware that it will do enormous damage to British industry, and that many people since November have made contracts—quite justifiably—which will now be revoked over their heads? I do not believe that my right hon. Friend intended this when he last spoke to the House and I hope that he will confirm that it is only because of the influence of the EEC on British Government policy that this step has now been taken.

§ Sir I. Gilmour
I am grateful to my hon. Friend for his opening sentence. He will be aware that the contracts going back to 4 November will come under the 1939 Act.

§ Mr. Douglas
Will the Lord Privy Seal indicate how the Nine propose to monitor the effect of sanctions? What instruments are available to ensure that other nations who do not play cricket, as we do, do not cheat over the imposition of sanctions? Secondly, will the right hon. Gentleman indicate the number of firms and jobs that might be affected by the retrospective element of the legislation that he seeks to impose?

§ Sir I. Gilmour
It is too early to discuss how we shall monitor something that has not yet been brought into effect. I entirely agree that it is an extremely important matter. We shall see that the cricketers do not suffer more than the non-cricketers. On the second point, I agree that it is important, but I cannot give the House any figures.

§ Mr. Hal Miller
As one who went along with the sanctions policy with great misgivings, but realising that it was necessary to do something to support our 38 American allies, may I ask my right hon. Friend's help in giving us some reason why the 1939 powers are being invoked and why they are being backdated to 4 November? Has any decision yet been taken on what constitutes a new contract? Those of us who are concerned with the motor industry, for example, in which orders are consistently renewed on a schedule basis, find the position very confusing and disturbing.

§ Sir I. Gilmour
I appreciate my hon. Friends' point. As he realises, at the meeting in Naples no decisions were taken on the details, although this is a particularly important detail. The Government consider that it will be in conformity with the Naples decision that continuing arrangements, essentially concluded before November, should be excluded from the sanctions.

§ Mr. Cryer
Can the Minister tell us whether any estimates have been made of the number of jobs likely to be lost? Also, do the Government now accept the principle that retrospective legislation is necessary, although they did not give that impresseion in the debates last week? Is it not true that my hon. Friends' views about "cheating" are indeed justified? Will the Lord Privy Seal also accept that this is a particularly complex issue? In view of its complexity, added to the fact that people might be retiring from the scene very shortly, and that it is to do with foreign countries, will he adopt the Attorney-General's principle that in those cases an amnesty will be introduced?

§ Sir I. Gilmour
I have already answered the hon. Member's first point. I cannot give an estimate. I have also answered the allegation of cheating. I entirely agree that this is a complex matter. The date of 4 November has been chosen because that was the date on which the hostages were taken.

§ Mr. Marlow
As today's announcement is part of a co-ordinated European foreign policy, and as many of us cannot possibly believe that it would have been made otherwise, can my right hon. Friend confirm that the visit of President Giscard d'Estaing to President Brezhnev is part of that policy? Or is it just an ego trip on the part of the President of France? Secondly, if we are now going 39 in for retrospective legislation, what does my right hon. Friend think that the Ayatollah will do with the Talbot contract?

§ Sir I. Gilmour
The first part of the question is beyond the reaches of the statement. Secondly, my hon. Friend talks about retrospective legislation. Certainly these are retrospective sanctions, but that is not the same thing as retrospective legislation. Obviously, I have no information about the Ayatollah's intentions.

§ Mr. Jay
Is the Lord Privy Seal aware that he is just as accountable to the House for what Ministers do at informal meetings as he is for what they do at formal EEC meetings?

§ Sir. I. Gilmour
The Government are responsible for every action taken by Ministers and by the Government. As the right hon. Gentleman knows perfectly well, in normal circumstances statements are not made after informal meetings.

§ Mr. Bowen Wells
Is my right hon. Friend aware that he will receive many congratulations for trying to co-ordinate the policies of Western Europe over Iran? Is he also aware, however, that the retrospective element of this legislation was not made plain to the House in the debate last week? There is no doubt about that. Will my right hon. Friend bear in mind that European statesmen must find a way to compensate those who have entered into contracts since November? This is a particularly serious element in the statement that my right hon. Friend made today.

§ Sir I. Gilmour
I agree that it is serious, but there is no precedent for giving compensation in such cases. My hon. Friend must be aware that the possibility of going back beyond the present date on the sanctions legislation was clearly kept open by the Government Front Bench——

§ Mrs. Dunwoody
No, no, it was not.

§ Sir. I. Gilmour
It is no use the hon. Lady chanting "No". The passage that I have already read out to the House indicates that clearly. There was certainly no decision to introduce sanctions as from 4 November, because that decision had not been taken. It was taken only by 40 consensus at the meeting in Naples as at the weekend.

§ Mr. Straw
Is the Lord Privy Seal not aware that the statement that he read out, made by the Minister of State in response to my intervention, was that no decision on the use of the 1939 Act had been taken? That statement was made to provide reassurance to hon. Members that existing contracts would not be affected. That was the whole point of his statement. If there was a possibility that at the weekend meeting retrospection would be introduced, surely the Lord Privy Seal and his officials knew of it? If they did, why was the House not informed of that possibility? The truth is that hundreds of firms and thousands of workpeople will now feel that they have been totally deceived by the Government—and they have been.

§ Sir I. Gilmour
With respect to the hon. Gentleman, the debate to which he is referring took place a week ago, so I do not think that the last part of his question is very relevant. [HON. MEMBERS: "Why not?"] I agree that what my hon. Friend the Minister of State said was in answer to an intervention by the hon. Gentleman, but my hon. Friend went on to say—and I repeat—that no decision has been taken to use those powers. No decision would be taken unless it were clear that our main competitors were doing the same. If any such proposal were made, it would have to be submitted to this House for approval. The possibility was clearly kept open.

§ Mr. Kenneth Lewis
As many of the firms affected by this matter will not have any cover at all under the ECGD, which has, I think, been withdrawn, and no compensation, will my right hon. Friend and other Ministers concerned in other Departments at least try to find out how many firms are affected and seek to arrange for Government Departments to pick up the orders to Iran which will be lost to those firms, so as to keep the firms busy making those orders?

§ Sir I. Gilmour
Certainly we shall make all the inquiries asked for by my hon. Friend. Every relevant matter in this concern will be considered very carefully by us. I give that assurance.

Several hon. Members
rose——

§ Mr. Speaker
Order.

§ Mr. Dalyell
rose——

§ Mr. Speaker
Order. If the hon. Member for West Lothian (Mr. Dalyell) wants to stop me, mid-way, from calling anyone else, so be it. However, I propose to call those hon. Members who have been rising to catch my eye since the statement was made.

§ Mr. Peter Bottomley
Will my right hon. Friend confirm that he has been making himself accountable for part of an informal meeting by making this statement, which gives the House of Commons an opportunity of considering it? Will he accept my assurance that I welcome the fact that he is moving only in concert with our European partners, which was the basis of the debate on the Bill last week, and that retrospective possibilities, although we have not yet heard when they will come in, are covered only by the 1939 Act and not by the Bill that we passed last week?

Sir I. Gilmonr
That is true. I entirely confirm what my hon. Friend has said—that we shall act in close co-ordination with our partners.

§ Mr. Les Huckfield
Cannot the right hon. Gentleman understand that many of us who took part in the debate last Monday and Tuesday can now see that we were totally misled? Is he aware that in a long and partially acrimonious debate last Tuesday, when I raised the point about the renegotiation of existing contracts, I was given the assurance by the Minister for Trade that Government policy was designed to affect only future contracts? Bearing in mind what the right hon. Gentleman has just said about the retrospective element, cannot he see that we now know that we have been totally misled?

§ Sir I. Gilmour
I appreciate that that is what the hon. Gentleman may think, but having read both what my hon. Friend the Minister of State, Foreign and Commonwealth office said and what my hon. Friend the Minister for Trade said, I can only advise the hon. Gentleman to read what they said. I hope that he will then withdraw what he has just said.

§ Mr. S. C. Silkin
If at all times it was the Government's intention to use the 1939 42 Act, retrospectively if necessary, why was it necessary for the Government to lay so much emphasis on the non-retrospective character of the 1980 Act?

§ Sir I. Gilmour
Because the 1980 Act does not apply retrospectively if applied to service contracts. But from the bits that I have already read out from the remarks of my hon. Friend the Minister of State, it will be seen that he kept the possibility of retrospection clearly before the House.

§ Mr. Teddy Taylor
Whether or not they are retrospective, what arrangements exist to ensure that other member States, particularly France, will honour the sanctions policy and not use sanctions as a device to secure contracts that would otherwise be secured by the United Kingdom? If my right hon. Friend thinks that this matter is hypothetical, perhaps I may ask whether he ever visited Salisbury, Rhodesia, during the time of mandatory sanctions, when it was difficult to move in Meikle's hotel without meeting Frenchmen and Germans?

§ Sir I. Gilmour
I think that my hon. Friend will appreciate that I have already answered that question when I said that we shall see that those who play cricket are not disadvantaged by those who do not.

§ Mr. Spriggs
Is the right hon. Gentleman aware that to bring in retrospection at this stage is letting down right hon. and hon. Members who went into the Division Lobby in support of the sanctions Bill? I am one of those hon. Members who opposed the Bill, because I could not trust the Government's foreign policy. Here we have a bankrupt policy being exposed to the world. If we are all at one in favour of getting the hostages released, for goodness sake let us have a foreign policy to which the whole of the House can agree.

§ Sir I. Gilmour
Certainly the Conservative Benches are very much in favour of a bipartisan foreign policy, and in some respects we have that. But as the hon. Gentleman voted against the Bill he does not have much cause to complain.

§ Mr. Maclennan
Will the Lord Privy Seal say what consideration the Foreign Ministers gave in their discussions to the position of companies that had already entered into contracts? Will the Government not allow the lack of precedent for 43 compensation to stand in the way of the obviously sensible need to compensate firms that have lost out as a result of the Government's action?

§ Sir I. Gilmour
As I have said, we shall take into account every relevant consideration. But in order not to raise false hopes, I must make clear that there is no precedent for giving compensation in these matters.

§ Mr. Campbell-Savours
The right hon. Gentleman said that there is no precedent. Has he consulted the Secretaries of State for Industry and Employment about special compensation being paid to workers who have lost their jobs in support of a measure that is put before the House as being in the national interest? Does not he think that that is due, particularly in the light of the reinterpretation of the Act that was before the House as a Bill the other day?

§ Sir I. Gilmour
I can only repeat what I said in answer to the last question.

§ Mr. Shore
The Lord Privy Seal, having listened to the exchanges in the House, will be aware that he has not satisfied the House, particularly on the question of retrospection, which is very important. I think I am also right in saying that he has not satisfied the House in his refusal to go wider than the narrow subject of Iran, important as it is, and to deal with the major questions that have been discussed by British Ministers in Vienna and Naples. I must ask the right hon. Gentleman again to reconsider what he has said and to make a statement on these subjects tomorrow.

§ Sir I. Gilmour
My statement had nothing to do with what was going on in Vienna, and I have already explained to the right hon. Gentleman—I am sure that, on reflection, he will realise this—the difference between an informal meeting and a formal meeting of Foreign Ministers.
Following is the statement: