Commons Sitting of 17 February 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER In the Chair]
PRIVATE BUSINESS

  FELIXSTOWE DOCK AND RAILWAY (NO. 2) BILL
  Lords amendments agreed to.
  LONDON TRANSPORT (NO. 2) BILL (By Order)
  Read the Third time and passed.
  LLOYDS BANK BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Thursday.

Oral Answers to Questions
  Defence

    RAF Ely
    Mr. Freudasked the Secretary of State for Defence what is the current civilian staff at RAF Ely, what percentage this is of the total complement; and if he will make a statement in respect of future job opportunities for civilians at the hospital.
    The Under-Secretary of State for Defence for the Royal Air Force (Mr. Geoffrey Pattie): There are 144 civilians currently employed at RAF Ely representing 95 percent, of the total complement of the hospital or 0·5 per cent, of the Air Force Department's total civilian complement. As the hon. Member knows, a number of studies are under way which could affect the future level of civilian employment at the RAF hospital and elsewhere in the RAF. I hope to let him know the outcome of the studies at RAF Ely shortly.
    Mr. Freud: I am grateful for that reply. Will the Minister bear in mind the ever-worsening employment situation in Ely, especially in view of yesterday's announced closure of the Ely sugar beet factory? Will he continue the happy relationship of direct employment, rather than the deployment of remote agencies in order to supervise work for the RAF hospital?
    Mr. Pattie: I shall bear in mind what the hon. Gentleman says. I can assure him that the contract studies will not be proceeded with unless it can be demonstrated that there will be a genuine saving.
    Mr. Buck: Is my hon. Friend aware that many East Anglians are extremely grateful for the facilities which are extended by the Royal Air Force hospital in Ely to civilians in the area, not only by way of job opportunities but by way of the medical facilities that it provides? For example, the hon. and learned Member for Colchester had his left knee dealt with by that hospital. The cartilege was removed swiftly and safely. A similar facility is given to the hon. Member for Isle of Ely (Mr. Freud) and his constituents and many others in the area.
    Mr. Speaker: Was it a long operation?
    Mr. Pattie: It was a successful one.

    Cruise Missiles
    Mr. Norman Atkinsonasked the Secretary of State for Defence if he considers that the strategic value of installing cruise missiles on British and German soil is weakened by the French Government's refusal to grant similar facilities.
    The Secretary of State for Defence (Mr. John Nott):No, Sir.
    Mr. Atkinson: Will the Secretary of State tell the Prime Minister that when she meets President Reagan on 25 February she should point out that there is no longer a bipartisan approach in this country to nuclear weapons, and that, in view of the widespread opinion that exists in the Labour movement, once it is returned to power it will oppose the installation of cruise missiles in this country?
    Mr. Nott: The Prime Minister is already aware of the hon. Gentleman's views. It is a little more difficult to define the present Labour Party and its views. However, I shall pass on the hon. Gentleman's opinion in that regard.
    Mr. Trippier: Will my right hon. Friend emphasise the deterrent effect of cruise missiles and the need to site them in Europe because of their limited range? Will he take this opportunity to counter the myth that, because these missiles are based on selected sites in this country there is an increased likelihood of those areas being attacked, when the truth is that in the event of a nuclear attack nowhere in the United Kingdom or in any NATO country would be safe?
    Mr. Nott: My hon. Friend is correct. The United Kingdom is bound to be a target—if I may use that expression—in any conventional or nuclear war. It is a major industrial and economic nation. It would be the base from which NATO was reinforced. In fact, the introduction of cruise missiles will spread nuclear weapons more evenly throughout Europe than happens at present.
    Mr. Frank Allaun: If, as is becoming increasingly clear, the Norwegian, Danish, Dutch and Belgian Governments all refuse to have the missiles on their territory, will Britain do the same?
    Mr. Nott: It is not by any means clear that the Netherlands and Belgium will take that view. It was never intended that Norway and Denmark should be sites for cruise missiles. If Germany, Italy and Britain agree to site the missiles on our respective territories, that in itself will provide a very effective deterrent to comparable nuclear exchanges from the Soviet Union and the Warsaw pact countries.
    Mr. Wall: Will my right hon. Friend confirm that the French already have medium-range ballistic missiles on the Plateau D'Albion submarine-launched ballistic missiles, the Pluton tactical nuclear weapon and the force de frappe, and therefore have more nuclear weapons than we have?
    Mr. Nott: The French have a significant nuclear capability. They were not consulted because they are not part of the NATO integrated military structure. There was nothing more to it than that.
    Mr. Snape: Is not the time overdue for the Government to seek urgent disarmament talks with the Soviet Union and the United States, before the American-controlled weapons are installed on British soil? Have the Government such plans, and if not, why not?
    Mr. Nott: The Government are doing everything in their power to further arms limitation and control. The question relates to the cruise missile, and it is, therefore, worth noting that, until it was agreed with NATO that we should proceed with the modernisation of long-range theatre nuclear weapons, the Soviet Union refused to come to the negotiating table on arms limitation. Indeed, it was NATO's decision to go ahead with the modernisation programme that brought about the discussions in Geneva.

    Expenditure
    Mr. Churchillasked the Secretary of State for Defence when, on the basis of the Government's present expenditure plans, the percentage of central and local government expenditure devoted to defence is expected to rise to the average prevailing in the years 1964–65 to 1969–70.
    Mr. Nott: Although the proportion of total public expenditure devoted to defence is planned to continue to rise it will not reach the average level obtained in 1964–65 to 1969–70 by the end of the current planning period in 1983–84.
    Mr. Churchill: Is my right hon. Friend aware that under the Labour Government of the right hon. Member for Huyton (Sir H. Wilson) from 1964 to 1970 average defence expenditure expressed as a proportion of overall Government expenditure was approximately 15·5 per cent, and that last year it was only 11·6 per cent.? Would not a one third increase be required for it to rise again to the level of the period between 1964 and 1970? As it is acknowledged that the level of Soviet threat is substantially higher today than in the 1960s, is there not a danger of a credibility gap between the Government's rhetoric and their performance? Will the Government address themselves to the matter before the Prime Minister visits Washington later this month?
    Mr. Nott: As my hon. Friend knows, the Government are committed to an increase of 3 per cent.., in accordance with the NATO target. I am not sure that defence expenditure as a percentage of total public expenditure is the correct measure to take. By 1983–84 we shall be spending approximately the same proportion of our GDP on defence as we were in the 1950s and 1960s. Defence expenditure now is rising faster than other public expenditure programmes, and we should be satisfied with that. I agree that a massive threat faces us, but in the end we should look to the output of defence expenditure—how we are conducting our tasks—as well as the input of money.
    Mr. Arthur Lewis: As the 1950s have been referred to, will the Minister accept that some of us remember when the Churchill Government took over and had to cut the armament programme because there was not enough steel? Can we be sure that we have sufficient steel and coal to carry out this increase in armament production?
    Mr. Nott: The hon. Gentleman need have no fears on that count.
    Dr. David Clark: Bearing in mind our shrinking industrial base, will the Minister confirm that we already spend a much larger proportion of our GNP on defence than any of our European Allies? Is it true that with the overspend this year we shall be spending the same proportion as our American Allies?
    Mr. Nott: It is broadly correct that this year we shall be spending more of our GDP on defence than any of our European Allies, although the figures are subject to all sorts of qualifications. We shall not know the final figures for some time, but it may well be that the proportion of our GDP spent on defence will not be much different from that of the United States. Given the threat that faces us, the hon. Gentleman should be pleased about that.

    Cross Country Vehicles
    Mr. Foulkesasked the Secretary of State for Defence whether the analysis of "Operation Crusader" has shown a need for the purchase by the Army of new cross country vehicles.
    The Under-Secretary of State for Defence for the Army (Mr. Philip Goodhart): Analysis of "Exercise Crusader" has not so far indicated a need for new cross country vehicles other than those already in the programme.
    Mr. Foulkes: Will the Minister confirm that during the exercise Army vehicles became stuck in the mud and broke down? Will he reconsider his decision and put in an order for Stonefield vehicles, which can adequately replace the Army's clapped-out vehicles?
    Mr. Goodhart: I suspect that there has never been a major Army exercise without vehicles being stuck in the mud. I assure the hon. Gentleman that the Army's vehicles stood up well during the exercise.
    Mr. Bill Walker: In the event of the Army looking for new and more modern vehicles, will consideration be given to all-British manufactured vehicles, and, if such vehicles are being manufactured in Scotland, will they be given serious consideration?
    Mr. Goodhart: I give my hon. Friend that assurance.
    Mr. Robert C. Brown: Does not the Under-Secretary realise, without the need for analysis, the urgent requirement which exists for a new generation of British tanks? Will he consider doing away with the nonsense of spending so much on Trident and use the money to procure a new generation of British tanks?
    Mr. Goodhart: More tanks are in operation in BAOR at present than when the hon. Gentleman was responsible for the Army. The Army's tank procurement programme is substantial.
    Mr. Arthur Davidson: When will the Government publish a detailed report on "Operation Crusader', as, four months ago, the Minister's predecessor said would happen? Does the hon. Gentleman accept that we should then be in a better position to analyse the value and success of the exercise and, incidentally, to demonstrate the need for and the excellence of the Stonefield vehicle for military purposes, as well as its vital importance to the Scottish Economy?
    Mr. Goodhart: The analysis will be completed in the near future. The hon. and learned Gentleman and other hon. Members will then be invited to a presentation on the results.

    British Army of the Rhine
    Mr. Leightonasked the Secretary of State for Defence if he will seek to introduce new bilateral arrangements with the Federal Republic of Germany to offset the foreign exchange costs of the British Army of the Rhine?
    Mr. Goodhart: The last Anglo-German offset agreement, which was negotiated by the previous Administration, stated that bilateral offset arrangements would cease when the agreement expired on 31 March 1980, and there are no plans to re-open negotiations.
    Mr. Leighton: Is the Minister aware that that answer is unsatisfactory, when we are spending well over £1,200
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    million on our forces in West Germany, £762 million of which is in foreign exchange, which is a direct debit to our balance of payments and a subsidy to West Germany and which is equal to our recent rebate from the EEC? Does he agree that it is intolerable for a country in our straitened circumstances to be subsidising West Germany in that way?
    Mr. Goodhart: I assure the hon. Gentleman that host nations support is being actively considered throughout the Alliance. He referred to a figure of £762 million as the cost across the exchanges. In the coming financial year, for the first time, that figure should fall rather than increase.
    Mr. Wilkinson: As the main threat which confronts NATO and the central front is an armoured one, will my hon. Friend and his colleagues consider the possibility of using close air support to the greatest possible extent so that aircraft used in this country are mobile and can react quickly to that threat?
    Mr. Goodhart: Yes. All methods of dealing with the tank threat are being considered.
    Mr. J. Enoch Powell: Will not arrangements of this kind be a grotesque anachronism, at a time when we have an embarrassingly large surplus on our balance of payments and are seriously worried about the high exchange rate?
    Mr. Goodhart: There are no plans to have bilateral talks with the Germans on this matter. However, the cost of host nation support is a matter of concern throughout the Alliance.
    Dr. David Clark: Does the Minister appreciate that the cost of BAOR in the 1970s went up sixfold and that the defence budget is under intense pressure? Will he confirm or deny that he is considering bringing home a divisional headquarters from Germany? Is he examining the possibility of withdrawing more troops from Germany and stationing them on hand in this country, so that they can fly out in an emergency?
    Mr. Goodhart: I am not responsible for the story which appeared in The Times this morning. I assure the hon. Gentleman that next year, for the first time in decades, the foreign exchange cost of British forces in Germany will fall rather than increase.

    Recruitment
    Mr. Gwilym Robertsasked the Secretary of State for Defence if he will study the effect on recruitment into the forces of the widely differing living conditions and differing general facilities available to officers, non-commissioned officers and other ranks; and if he will make a statement.
    Mr. Pattie: I do not consider that such a study would serve any useful purpose.
    Mr. Roberts: Does the hon. Gentleman accept that it is widely accepted in industry that business efficiency can be improved by removing discrimination between various types of employees? Does he accept that the Japanese, who have taken the lead in this matter, have shown that this sort of teamwork greatly improves the range of business? Does he therefore agree that more of this type of teamwork is needed in the Armed Forces? Is not this sort of apartheid abhorrent to many young people, whatever their political viewpoint?
    Mr. Pattie: That question only shows that it is time that the hon. Member paid another visit to some of the Armed Forces. If he talked to people at a variety of levels in the Armed Forces, he would find that the apartheid, as he likes to call it, is something that they desire. They wish to be in separate groupings. If he does not accept that point, I should be happy to arrange a visit for him as soon as he likes.
    Mr. Stokes: Is not this a most mischievous question? Does not any armed force depend on hierarchy, including the Soviets? In the British forces, is not there a great esteem and respect between the different ranks?
    Mr. Pattie: As always, what my hon. Friend says is correct.

    North Atlantic Treaty Organisation
    Mr. Stephen Rossasked the Secretary of State for Defence when he expects next to meet his North Atlantic Treaty Organisation colleagues to discuss the future planning of the alliance.
    Mr. Nott: At the spring meetings of the Alliance's nuclear planning group and defence planning committee.
    Mr. Ross: When the Secretary of State meets his colleagues in NATO will he impress upon them the need to respond positively to the demands of the United States that we should improve our defences in Western Europe, particularly on the Turkish front? At the same time, will he make it clear to the Americans that there is no support for the neutron bomb in the NATO Alliance, and that if a request were to be made for it to be stationed in Europe permission would be refused by all countries concerned?
    Mr. Nott: On the first point, we shall give every support to the United States. On the latter point, there are no proposals by the United States for the deployment of neutron warheads—enhanced radiation warheads—in Europe. The American Defence Secretary has made it clear that before that happens, he will have full consultation with his European allies. Therefore, no proposals are now before us.
    Mr. Buck: Will my right hon. Friend emphasise to our allies that there is an increasing feeling that the geographical guidelines of NATO are irrelevant?
    Mr. Nott: It depends a little on which country one is in as to the opinion one holds on those subjects.
    Mr. George Robertson: As the decision to deploy cruise missiles in Europe was justified on the basis that it would accelerate disarmament talks and obviate the necessity for either cruise missiles or Soviet SS20s, when can we expect a major initiative from the Government to get those talks going?
    Mr. Nott: As I said in answer to an earlier question, it was not until a firm decision was made by our European allies to go ahead with the long-range theatre nuclear weapons modernisation that the Soviet Union agreed to come to arms limitation talks in Geneva. It refused twice. It was only when it was clear that the NATO Alliance intended to go forward with this programme that their representatives came to the negotiating table. That must show that the Soviet Union only understands strength. It does not understand the sort of weakness that the hon. Gentleman advocates.

    Northern Ireland
    Mr. Flanneryasked the Secretary of State for Defence what was the total cost of the armed forces in Northern Ireland in 1978, 1979 and 1980, respectively.
    Mr. Goodhart: The estimated extra costs of military operations in Northern Ireland for the past three years are:—

    £ million

    1978–79

    81

    1979–80

    96

    1980–81

    111

    Mr. Flannery: The Minister has carefully refrained from answering my question, which asked for the total cost and not the extra or additional costs. I have not received a proper answer because this matter seems to be a sacred cow. The Minister should give me a proper answer to the question. What is the total cost?
    Mr. Goodhart: I was under the impression that the hon. Gentleman wanted to know the extra cost. The cost of paying, feeding and clothing the units in Northern Ireland would be the same whether they were in Northern Ireland or anywhere else.
    Mr. Flannery: On a point of order, Mr. Speaker. As my question has, deliberately, not been answered—
    Mr. Speaker: Before the hon. Gentleman puts his point of order, I should point out that he will stop anyone else from asking a supplementary question if he gives notice now that he intends to raise the matter on the Adjournment. He can make his point of order in a moment.
    Mr. J. Enoch Powell: Is it not clear from the Minister's reply that the cost of maintaining in Northern Ireland a part of our necessary total forces is extremely small in relation to the total cost or our defence preparations?
    Mr. Goodhart: That is so. Most people would agree that a national army gives infinitely better protection to the people of Northern Ireland than would private armies.
    Mr. Bill Walker: Does my hon. Friend agree that while there may have been some doubts about the wisdom of sending in the troops in the first place, successive Governments have shown clearly that there is a commitment to maintain policing in Northern Ireland and to sustain it?
    Mr. Goodhart:" That is so.
    Mr. Flannery: On a point of order, Mr. Speaker. In view of the unsatisfactory answer—it was no answer to the question that I asked—I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.
    Mr. Speaker: I am obliged to the hon. Gentleman for the way in which he has waited to make his point of order.

    Chemical Weapons
    Mr. Frank Allaunasked the Secretary of State for Defence whether he will hold discussions with the United States Secretary of Defence on the use of chemical weapons.
    Mr. Nott: I have no plans to do so.
    Mr. Allaun: Has the Secretary of State gone back on the public statement last month—[Interruption.] I cannot hear myself speak.
    Mr. Speaker: Order. I thought it was the hon. Gentleman's hon. Friends sitting behind him who were making a noise.
    Mr. Allaun: Has the Secretary of State gone back on the public statement by his predecessor last month to the effect that Britain should consider achieving a chemical warfare system capacity? What was the Ministry of Defence team doing in America recently?
    Mr. Nott: Whenever a Ministry of Defence team visits the United States it discusses every aspect of the Warsaw Pact's capability, including nuclear, conventional and chemical weapons. The discussions were normal and nothing more. There are no plans to deploy chemical weapons hers at present. The hon. Gentleman suggested that my predecessor, my right hon. Friend the Leader of the House, somehow committed this country to specific talks on chemical weapons with the United States. I must ask the hon. Gentleman to produce the statement to which he refers.
    Sir John Langford-Holt: Does my right hon. Friend have any information about the possession by the Warsaw Pact countries of chemical weapons?
    Mr. Nott: The Warsaw Pact has a large offensive capability in chemical weapons. That is of grave concern to the NATO Alliance. We are increasing our ability on the defensive side to resist an attack by chemical weapons.
    Mr. Newens: The right hon. Gentleman says that there are no plans at present to deploy chemical weapons in this country. Will the right hon. Gentleman say whether there are any such plans under discussion?
    Mr. Nott: No.
    Mr. Warren: Will the Secretary of State make it clear in public that Warsaw Pact chemical and gas weapons are not in reserve but in the front line?
    Mr. Nott: Certainly. My hon. Friend is correct. The Warsaw Pact has a large offensive capability in these weapons that is of grave concern to us.

    Air Defence
    Wilkinsonasked the Secretary of State for Defence whether, following his statement of 20 January on the Defence Estimates for 1981–82, he will announce what measures are currently being taken to improve the air defences of the United Kingdom air defence region.
    Mr. Pattie: A substantial programme of improvements to the United Kingdom's air defences is now in hand. The Sky Flash medium range missile is in service and the Sidewinder AIM 9L short range missile, produced by a European consortium, will enter RAF service next year.
    Modernisation of the ground-based elements of the air defence network is well under way. An order has been placed for the first batch of new radars and the chosen contractor for the new data handling and communications system which will integrate all the components was announced in September 1980.
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    Development of the air defence variant of the Tornado, with its powerful airborne intercept radar, continues, as does that of the very advanced Nimrod airborne early warning aircraft which will replace the Shackleton.
    The plan to modify a substantial number of Hawk training aircraft to enable them to make a contribution to local air defence is going ahead as scheduled; and the conversion of nine VC10 aircraft to the tanker role, which is now well under way, will represent a valuable addition to the RAF's air-to-air refuelling capability, especially in respect of the air defence force.
    Mr. Wilkinson: I am grateful for that reply. Can my hon. Friend confirm that the Secretary of State's announcement on 20 January that an extra Lightning squadron was not to be formed, that half the complement of the No. 8 Shackleton early warning squadron was to be withdrawn from service, that Sky Flash II was not to be procured, and that further orders of Hawk aircraft were not to take place gave the impression that the United Kingdom's air defence was diminishing? Does he agree that the defence of the United Kingdom must be given a high priority as it secures sea lanes across the Channel and the east Atlantic and is vital to the reinforcement of NATO in Europe?
    Mr. Pattie: As my right hon. Friend the Secretary of State made clear in his statement on 20 January, the decision, made necessary by budgetary pressures, is to concentrate any reductions in our capability on older weapons systems and aircraft which are already due to be phased out.
    Mr. Wellbeloved: Are not fewer fighter aircraft defending Britain's skies today than when the Minister assumed responsibility in May 1979? Is it not disgraceful that the loud-mouthed patriots behind the Minister, who made such a scene about the number of air defence aircraft when they were in Opposition, should now adopt an attitude of craven silence, in the light of the Minister's disgraceful neglect of the country's air defence?
    Mr. Pattie: It is not true that fewer aircraft are defending us.
    Mr. Wellbeloved: Publish the numbers.
    Mr. Pattie: As the hon. Gentleman knows, in his day it was not the practice to publish the numbers and we shall not publish them. What he says is not true. I have not noticed any craven silence on the part of my hon. Friends.
    Mrs. Knight: Did my hon. Friend notice the report in The Daily Telegraph this morning to the effect that the cutback in aircraft will probably increase the risk of accidents and seriously jeopardise our combat capability? Has he a comment to make on that?
    Mr. Pattie: The reductions in training caused by a desire to reduce the amount of fuel used will have no impact whatsoever on the safety levels of the Royal Air Force.
    Mr. Snape: How many hours are flown by RAF crews in pursuit of the defence of the United Kingdom compared with the number of hours flown under the same procedures on 4 May 1979? Does the Minister remember his brave words from the Dispatch Box on 23 June last year when he and his hon. Friends made an attack on my hon. Friend

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    the Member for Erith and Crayford (Mr. Wellbeloved)? Is not the House owed an explanation about the Minister's failures and is not my hon. Friend owed an apology?
    Mr. Pattie: No. If the hon. Gentleman tables a question I shall provide the figures that he requires.

    Defence White Paper
    Mr. Robert Atkinsasked the Secretary of State for Defence when he expects to publish the next defence White Paper.
    Mr. Nott: Shortly before Easter.
    Mr. Atkins: Is my right hon. Friend aware that many of my right hon. and hon. Friends think that that Defence White Paper should continue to show the increases in expenditure that are so crucial to Britain's defence, with particular attention to the decision to be taken on the choice between the AV8B and the GR5 and the future of the European combat aircraft?
    Mr. Nott: My hon. Friend will have an early opportunity, in the White Paper on public expenditure, to consider the increase in defence expenditure. It will be published before the defence White Paper. We are still considering the question of the European combat aircraft. I hope that consideration will not be further delayed. I should like to speed up the processes, but they are complicated. They involve the procurement of systems to be used 10 years or 15 years ahead. We cannot rush, but in due course we shall have an answer to the question.
    Mr. Norman Atkinson: Earlier, the Secretary of State said that the Soviet Union came to the negotiating table only when nuclear weapons had been installed in Britain. Later he said that we had not yet acquired chemical weapons. When his earlier answer is applied to chemical weapons the logic is that we should now acquire chemical weapons in order to persuade the Soviet Union to discuss the abolition of such weapons.
    Mr. Nott: There is logic and distorted logic. The hon. Gentleman was applying the latter rather than the former. I did not follow his reasoning.
    Mr. Amery: Does my right hon. Friend agree that our response to the challenge of Soviet imperialism cannot be confined within cash limits? Does he recall that Mr. Neville Chamberlain, when he embarked on his experiment in detente with Hitler in 1938, spent 6 per cent, of the GNP on defence, and 12 per cent, in 1939 before the occupation of Prague? Does he recall that Mr. Attlee, at the height of the Korean war, spent 11 per cent, of the GNP on defence? Will he address himself to the danger of the problem rather than to the economic difficulties that face us at the present time?
    Mr. Nott: It would be pleasant for all of us—for my right hon. and hon. Friends and for Opposition Members—if we were not constrained by cash limits in our private or public lives. I am afraid, however, that there are limits to the resources of this country. Cash limits help Governments to keep within those resources. I must, therefore, repeat my support for the system of cash limits. I shall take note of the pre-war examples that my right hon. Friend has given. In regard to the present position, we are increasing our defence expenditure in real terms. It is going up faster than any other programme.
    Mr. Frank Allaun: That is right.
    Mr. Nott: We must ensure that the output—the manner in which we use resources going into defence—is deployed in the most effective way to meet the Warsaw Pact threat. It is there and—I agree with my right hon. Friend—it is growing.
    Mr. Stephen Ross: Will the Secretary of State confirm that the Defence Estimates this year will be as detailed as those presented last year, which was a pleasant state of affairs?
    Mr. Nott: Yes, they will be, but we are trying to keep the price of the White Paper down.
    Dr. David Clark: When the Secretary of State draws up his White Paper, will he bear in mind that many people believe that we are living beyond our means in defence terms? As a result, we are short of 3,000 men in the Armed Services because we cannot pay them. Our aircraft are not flying as they should be flying. Our tanks have not got enough fuel. We are preparing to fight on too wide a front. Is the right hon. Gentleman prepared to enter into negotiations with our NATO allies to review our role in NATO?
    Mr. Nott: I agree with the hon. Gentleman that there is a danger that we will spread our effort too thinly. I agree with him, and with my predecessor, that there is a need to examine the present health of the Alliance—the phrase that my right hon. Friend the Leader of the House used. We shall be considering all these questions within a NATO context. We shall be discussing them with our allies. These are important questions. I am addressing myself to them.

    Cash Limits
    Mr. Newensasked the Secretary of State for Defence to what extent he expects cash limits to be exceeded by his Department in 1980–81.
    Mr. Cryerasked the Secretary of State for Defence which items he expects to be affected by reductions in expenditure in 1981–82 to offset the anticipated overspend in 1980–81.
    Mr. Beithasked the Secretary of State for Defence by what amount his Department expects to overspend its cash limits for 1980–81.
    Mr. Nott: The current expectation is of an overspend of about £260 million. This will be reflected in a Supplementary Estimate to be presented to the House tomorrow. However, I am continuing to take steps to restrain expenditure.
    It is the general practice for any overspend on a particular cash limit to be offset by a corresponding deduction from the cash limit in question in the following year. However, the final outturn on the defence budget in 1980–81 will not be known for some time and the position will then be reviewed.
    Mr. Newens: Will the right hon. Gentleman apply the same rules to overspending of cash limits in his Department as are applied to the Departments of Health and Social Security, Education, Industry and all the others? If he is not applying the same rules, that is a totally unsatisfactory state of affairs. Should he not be introducing, or seeking to persuade the Government to introduce, Supplementary Estimates for other Departments?
    Mr. Nott: The hon. Gentleman asked me the question and I gave him the answer. He then asked the question again. I do not think that there is any point in reading out the answer a second time. I have already answered the question in my first reply.
    Mr. Cryer: Is it not a fact that, in the economic crisis that this country faces, we cannot afford the current level of defence expenditure and there should be some offset arrangement for the cash excesses this year? Should we not follow the example of Japan, which spends less that 1 per cent, of GNP on defence while, at the same time, leading the world in the production of goods and services that people need? Is not that the lesson of Datsun coming here?
    Mr. Nott: We have to afford the current level of defence expenditure because we are faced with a threat to our freedom and liberty. The hon. Gentleman would not be sitting in the House and putting these questions to me if we were not protecting ourselves and deterring aggression by other countries. I think that the current level of defence expenditure is essential, I entirely support the NATO target:, which the hon. Gentleman and the House know well.
    Mr. Beith: Since the Secretary of State has said that he does not intend to make apocalyptic choices to deal with the budgetary pressures which he will undoubtedly face—I take it that he includes Trident as one of the apocalyptic choices that he does not want to make— how on earth is the readiness of our Armed Forces to survive the constant cutting of men, equipment, exercises, fuel and training that will go on if he continues in the present way?
    Mr. Knott: That is the reverse of the real situation. We are not cutting in the way that the hon. Gentleman suggests. Next year we shall be spending £1,000 million more on defence than this year. Our planned increases are substantial. Since we took office, and including the year to come, defence expenditure has grown by around 8 per cent. It is untrue, as the hon. Gentleman suggests, that we are cutting. We are increasing.

    Prime Minister (Engagements)
    Ql. Mr. Michael Brownasked the Prime Minister if she will list her official engagements for 17 February.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had! meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Brown: Has my right hon. Friend considered with her ministerial colleagues the possibility of relocating the seat of government to the county of Humberside where the Conservative-controlled council has reduced the rates by 6p in the pound? Will my right hon. Friend take the opportunity of congratulating the Conservative council there on its excellent record and perhaps give her view on Labour authorities that jack up the rates with a consequent loss of jobs and industrial opportunities?
    The Prime Minister: I certainly take the opportunity of congratulating Humberside on being able to reduce its rates by 6p in the pound in spite of a reduction, I understand, in the rate support grant. I understand that Humberside has been very efficient in reducing the
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    numbers employed, mostly by natural wastage, not by redundancy. I understand that there has been a reduction of 3,000 by natural wastage. The county, nevertheless, has a very good pupil teacher ratio. It has a very good all round record. I congratulate it.
    Mr. Foot: Has the right hon. Lady had the chance today to apply her mind to the question of the growing coal crisis? While we are extremely grateful for the fact that the Government have abandoned the stance that they appeared to be taking on Tuesday and Thursday last week, against having the tripartite meeting for which I asked, does she not think it absurd that the country should have to wait until next Monday for that meeting to take place? Will she give orders that it should take place at once?
    The Prime Minister: My right hon. Friend the Secretary of State for Energy will be having a meeting with the National Coal Board and the National Union of Mineworkers. It was at first fixed for next Monday because it was thought that date was convenient to everyone. Since then, a message has come in with a request for a much earlier meeting. My right hon. Friend will be making a statement about it after questions. It is expected to take place tomorrow.
    Mr. Foot: I thank the right hon. Lady once again for having agreed to the proposal which the National Union of Mineworkers put forward this morning, which it put forward yesterday, and to which the Government could have agreed. I thank the right hon. Lady. Will she now agree that all proposals from the National Coal Board or the Government will be held up until those conversations have taken place?
    The Prime Minister: I imagine that tomorrow morning the area boards will carry on with their meetings with the areas. As one would expect, they took place yesterday, this morning, and are due to take place on Wednesday. They will need to do so to get the facts out about what their proposals are. I understand from the advice that I have received that there are far fewer pits to be closed than has been rumoured and, similarly, far fewer jobs to be lost than has been rumoured. It is absolutely vital that any talks should be conducted on the basis of the facts. I thank the right hon. Gentleman for his thanks. It is a rare treat.
    Mr. Montgomery: Has my right hon. Friend had time today to study the trade figures for January, which show a surplus of £957 million? Would she care to comment on them?
    The Prime Minister: It is an excellent result and shows that our exports are very high—[Interruption.] It also shows that imports have declined. However, in the past three months, exports have increased in volume. We should congratulate all those in industry—both management and work force—on achieving that excellent result.
    Mr. David Steel: Will the Prime Minister accept that most of us welcome the fact that the tripartite talks have been brought forward to tomorrow? Given the amount of the public sector borrowing requirement that is committed for redundancy pay and unemployment benefit, would it not be more fruitful to explore the National Coal Board's proposals for greater forward investment instead of considering greater expenditure on redundancy pay for coal miners?
    The Prime Minister: The Government have honoured the "Plan for Coal," which was produced in 1974. We are

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    particularly anxious that extra money should go into pits for the future. This year, investment amounts to about £800 million. The greater part of that amount comes from money that is supplied through the external finance limit, by taxpayers.
    Mr. Neubertasked the Prime Minister whether she will list her official engagements for 17 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave a few moments ago.
    Mr. Neubert: Can my right hon. Friend confirm today's reports that the public offer of 50 per cent, of the shares in British Aerospace was oversubscribed three and a half times, with many employee and small share applications? Why do not the Government sell off the remaining 50 per cent, of the shares and speed up the programme of denationalisation?
    The Prime Minister: My hon. Friend is right. The sale of shares in British Aerospace was oversubscribed by a factor of three. Approximately 40 per cent, of eligible employees applied for shares and an unusually large number of small applications—well over 100,000—were allocated in full. That augurs well for future issues of shares in nationalised industries. As regards my hon. Friend's second question, the shares were issued on the basis that the Government would retain a major shareholding. Therefore, there is no question of doing as my hon. Friend wishes, as retention of that major shareholding formed part of the understanding.
    Mr. Alfred Morris: Will the Prime Minister reflect today on the fact that the Disabled Persons Bill—which has the support of 267 hon. Members—was blocked last Friday by those who sit on the Government side of the House? Does the right hon. Lady support the Bill? If not, why not?
    The Prime Minister: Naturally, we all wish to do as much as we can for the disabled. The Government have increased a number of benefits—including the mobility allowance—by amounts that are far higher than the rate of inflation. Wishes and good intention are never quite enough. We must steadily try to improve the economy in order to make resources available. In the meantime, the disabled are affected by the number of professional people in the National Health Service. I should point out that the number of doctors in the National Health Service has increased by more than 2,000 and that the number of nurses has increased by more than 10,000.
    Mr. Ashley: Answer the question.
    Mr. John Browne: Will my right hon. Friend find time today to note that the Second Reading of the Armed Forces Bill showed—despite the free vote in this House to the contrary—that the Government apparently do recognise that the death penalty is a deterrent, at least in the Armed Forces? Will my right hon. Friend please reconsider extending that deterrent for the protection of the civilian section of the community? If not will she consider the proposal of a referendum on the subject?
    The Prime Minister: There has always been a free vote on the death penalty. Indeed, in this Parliament there has already been a free vote on this subject. Given that free vote, the Government are unlikely to reopen the question.
    Mr. Ford: Will the right hon. Lady find time today to study reports on the effective and orderly lobby that was
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    mounted yesterday by frustrated and angry textile workers? Do the right hon. Lady and her Government think that the textile industry is a strategic industry? Do the Government intend to maintain it as a viable industry?
    The Prime Minister: The textile industry is extremely important. It employs well over 600,000, people and is a very big provider of jobs. Certain parts of the industry are very good at exporting. The multi-fibre arrangement will come up for renegotiation. The Government intend to pursue a vigorous new arrangement with the Commission.
    Mr. Marlow: Is my right hon. Friend aware of the dastardly plan by the petrol monopolies to do away with the gallon in the fourth quarter of this year? As I know my right hon. Friend's instinct for popular feeling, may I ask her to do whatever she can to prevent that crime from being committed?
    The Prime Minister: I am all in favour of the gallon, although I know that some people purchase petrol in accordance with a particular cash amount. However, I assure my hon. Friend that I am for the gallon.
    Mr. Edwin Wainwrightasked the Prime Minister if she will list her official engagements for Tuesday 17 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Wainwright: With reference to the question asked earlier by my right hon. Friend the Member for Ebbw Vale (Mr. Foot), does not the Prime Minister realise that for several years pit closures have gone on at a steady pace? Does not the right hon. Lady realise that in the past six years about 46 closures have taken place? Why has the National Coal Board taken such rapid action to close pits? Did not the Government tell the NCB that it had to break even in 1982? Have they not compelled the NCB to take this action? If so, are not the Prime Minister and the Government responsible?
    The Prime Minister: As the hon. Gentleman knows, pit closures have been going on for a number of years. In the past decade there have been, on average, eight pit closures per annum. In the previous decade, pit closures took place at the rate of 40 per annum. There is nothing new about pit closures. Many pits become geologically exhausted and have to be closed.
    However, it is important to ensure a bright future for the coal industry, to honour "Plan for Coal" and regularly to invest large amounts in the future. I cannot over-emphasise the fact that the Government have honoured the "Plan for Coal." This year, investment amounts to £800 million. We want to put as much money into the future of coal as we can.

    National Economic Development Council
    Mr. Rentonasked the Prime Minister when she next plans to take the chair at a meeting of the National Economic Development Council.
    The Prime Minister: No further dates have yet been arranged.
    Mr. Renton: In view of the need to compete with Germany and Japan, does my right hon. Friend think it is appropriate to have a forum in which British industry's

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    winners and losers in the years ahead can be discussed? If so, does my right hon. Friend think that NEDC is the best place for such discussion?
    The Prime Minister: NEDC is concerned with much deeper economic factors. It is concerned with increasing the rate of productivity, investment and profitability. It tries to look ahead. It is useful that the Government, the CBI, financiers, banks and tradeunions should be able to discuss such matters. In addition, the sector working parties draw attention to matters that affect particular industries. Their reports are particularly valuable and can alert us to things that need to be done.
    Mr. Peter Hardy: Does the Prime Minister realise that a few moments ago she was extremely complacent in her assessment of the balance of payments position? Does she not accept that one reason for those figures has been the virtual cessation of the purchase of essential raw materials by large sections of British industry? Does she not recognise that when the oil has gone there will be very little left in many areas of the United Kingdom?
    The Prime Minister: I would not accept the hon. Gentleman's analysis. For years we were bedevilled by an adverse balance of payments. At the moment we have a very good balance of payments—one that countries such as West Germany envy.

Coal Industry
The Secretary of State for Energy (Mr. David Howell): With permission, I should like to make a statement about recent events in the coal industry.
The National Coal Board saw the national executives of the three mining unions last Tuesday, 10 February. Following that meeting, Sir Derek Ezra suggested to me, on behalf of the board and the three mining unions, an early tripartite meeting of the Government, the board and the unions. I was very glad to agree and had planned a meeting next Monday which was convenient to all parties. However, it became clear from contacts earlier today with both sides of the industry that they would prefer a preliminary meeting tomorrow. That will enable them to state their case at the earliest opportunity. I have gladly agreed to that.
As soon as I have been able to consider what is said tomorrow I shall wish to convey the Government's reaction to the board and to the unions. I shall therefore propose at tomorrow's meeting that there should be a further meeting between the Government, the board and the unions for that purpose next week.
At this stage, I should like to make this point: the long-term future of the industry, if it can contain its costs and increase its efficiency, is very bright. It is acknowledged all over the world that coal will have to meet an increasing proportion of our energy needs as the price of other fossil fuels soars. The Government have continued to provide masssive funds for investment in new and modern capacity. In 1980–81 the board's investment programme will have totalled about £800 million. The policy that the Government are pursuing is designed to maximise job opportunities in the long run—because that is what investing in new capacity means. We are investing today in jobs for the future.
Mr. Merlyn Rees: We welcome the Secretary of State's statement. For too long the possibility of a strike, and now the actual strike and the policies that led to it, have been discussed outside the House. The National Coal Board knew that the problem would arise. With regard to bringing the meeting forward from next Monday, of course we welcome the change of mind by the Government. That was not known at 12 o'clock today, and we presume that the change was made at the request of Mr. Gormley. There has been a lack of urgency in the Government's approach to the matter.
The first problem that needs to be discussed is the question of the cash limits. We need to consider imports on the same basis as that on which they are dealt with and controlled in West Germany, France and Belgium. Will the Secretary of State accept that economic forces have invalidated the assumption of the Coal Industry Act 1980? Does he recall that the preamble to the tripartite agreement of 1974 said:
"One of the difficulties faced by the coal industry with its long lead times from planning to production is that productive capacity cannot be varied rapidly to meet short-term fluctuations in the market. To ensure that adequate capacity and manpower is maintained, thereby forming the base on which the industry can expand, the Government promised in 1974 … that it would be prepared to give assistance to counteract the effects of the short-term fluctuations in demand."
The industry is now suffering from short-term fluctuations. Even though a meeting has been called for tomorrow, if the situation in the coal industry is allowed to run it will be too late to pull things back.
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Is the Secretary of State aware that, overall, the miners feel that they have been let down? They have carried out their bargain on the "Plan for Coal". Productivity has risen rapidly. Even in South Wales it increased by 5 per cent, last year. The miners believe that the thanks that they get for doing that is the closure of pits. What has caused the trouble is the announcement, based on weeks of guesswork, which put the closures in a different perspective. As the Prime Minister said at Question Time, and as we all know, pits are shut down constantly. Eight pits were shut down last year. The miners know that they work in an extractive industry. They complain that all these matters have been lumped together, outside the "Plan for Coal".
Is the Secretary of State aware that Wales—which leads on pit closures—is a close community, in which I was brought up, and that people there are adversely affected by the depression in a far greater way than are people in other parts of the country? In South Wales in particular, with the memory of what happened in the BSC, to talk about large redundancy payments will be irrelevant.
I remind the Secretary of State that events now have a momentum of their own. On the basis that the coal industry is an industry of the future, the Government must act quickly. If they handle the situation properly they can guide events back to the "Plan for Coal". No victories are needed. We need pure common sense.
Mr. Howell: I am grateful to the right hon. Gentleman for the welcome that he gave to my statement. As he says, the National Coal Board has known and recognised all along that it faced both a long-term need for closures of uneconomic pits and, in the shorter term, an imbalance between supply and demand that has been aggravated by the recession. He asked why these matters were brought together in a lump—to use his phrase. The National Union of Mineworkers, while recognising that discussions on closures had been pursued at regional level at a fairly steady rate in the past, asked that the National Coal Board should bring these matters together and state them centrally. The board agreed to do that on 10 February.
As to the view that this has happened suddenly, of course, once the National Union of Mineworkers and the National Coal Board had discussed the future and the need for closures, the regions and the NUM started talking. They discussed those matters on Monday, they are discussing them today, and they will be discussing them again tomorrow. The right hon. Gentleman suggests that there should be a firm reaction. I have gladly agreed to meet both sides of the industry. The original suggestion was that the meeting would be convenient for the industry and the Government on Monday, but today the industry suggested that a preliminary talk—a listening talk, as it has been described—would be useful tomorrow.
It would be absurd to go beyond that when discussions are still taking place between the National Coal Board, the regions and the NUM, and before they have finally decided on their plans. As I indicated in my statement, at tomorrow's meeting I shall certainly propose that there should be further talks with the Government in order to consider the outcome of the discussions between the NCB and the NUM.
The right hon. Gentleman made a number of other points. He mentioned the question of imports. I fully recognise the feeling and sensitivity on this matter. Our net

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coal imports are about 3 per cent. of the total. Ninety-seven per cent. of coal for British users is supplied by the British industry. In the calendar year our exports of coal will exceed imports. In other words, the industry will be entering into international trade in a net position. The return of our coal industry to international trade, which it knew in the great days of the past, should be welcomed by the whole House.
The right hon. Gentleman said that we should treat imports on the same basis as they are treated in Germany and France. I have to ask him whether he knows what he is talking about. The German plans are for up to 50 million tonnes of imported coal to be allowed into Germany in the coming year. The French plans have been for a major rundown in the French industry to allow a vast increase in the amount of imports coming into that country, I do not want to see that here. I should like to see our industry both import and export successfully and competitively, and that is what I believe it can do.
At the same time, I recognise that the major importers and major customers of the industry are the CEGB and the British Steel Corporation, and obviously the Government expect them to deal sympathetically—as the Government have said in the past—with the supplier, particularly when the supplier is facing a very sharp drop in demand. But comparisons with France and Germany, if the right hon. Gentleman is talking about imports, lead to very different conclusions from the ones that he has suggested.
As for the right hon. Gentleman's claim that the miners feel that they have been let down, I remind him of what my right hon. Friend the Prime Minister said a moment or two ago. We are investing in this industry £800 million in the current year. That is investment on a scale far higher than that proposed proportionately for the German industry or the French industry, and is again a very favourable comparison for the British industry.
There is no reason for the miners to feel that they have been let down. There should be only a realisation that this is a modem industry with a magnificent future, and that the Government are ensuring that major capital funds are going into modern capacity.
The right hon. Gentleman mentioned Wales. One recognises, of course, the severe difficulties for the areas which have the greatest number of pits in difficulties. Everyone must recognise that. The right hon. Gentleman says that he comes from Wales. I happen to be a Welshman. We know the difficulties that have faced the people of Wales. That must be seen sensibly. But the fact remains that the best hope—[Interruption.]
Mr. Speaker: Order.
Mr. Howell: I am sorry, Mr. Speaker. I should have included you in that reference, and I apologise for the omission.
The best hope for the industry and the best hope for secure long-term jobs is investment in modern capacity. It is an extractive industry, and that inevitably means closures.
The NUM asked the NCB to bring all the plans together nationally. What the NCB is now proposing was inevitable and predictable, and must now be carried through in a sensible way, with a full and sympathetic understanding of the problems, particulary on the redundancy side. I have no doubt whatever that it is in the best interests of the coal industry and of the nation for the future.
Sir John Eden: In his talks tomorrow, will my right hon. Friend point to the future and underline his belief that the industry's future very much depends upon continuing investment in the new and the profitable pits, which could be put at some risk by keeping open for too long the uneconomic pits? Will my right hon. Friend also confirm that if at this stage in the development of the industry miners were to go on strike they would only be letting down themselves and the interests of their families?
Mr. Howell: My right hon. Friend's last point is, of course, correct. A strike would benefit nobody, least of all the future of an industry of so much promise. My right hon. Friend is correct about the balance of the industry. Investment in modern capacity, in new faces in existing pits, and in new mines, promises the jobs and the competitive coal for the future that will make this a profitable industry
The difficulty that the industry has faced is that the worst 10 per cent. of the National Coal Board's mines lose about £190 million a year. In any extractive industry, one would expect some closures as old capacity becomes exhausted or badly uneconomic, at the same time as new faces and pits open up. That is the sign that the industry is squaring up to and meeting the future, and that is the emphasis that the Government wish to give in expressing their views about the bright future for our coal industry.
Mr. David Penhaligon: What part has the Minister taken in the discussions to date? Did not he realise the reaction that there would be to the announcement, or did he not care about it? Or has he got the reaction that he wanted?
Mr. Howell: The National Union of Mineworkers asked for a centralised meeting—indeed, not only the NUM but also the other unions involved—and the NCB put its point of view. It was, of course, recognised long ago that there would be totally understandable feelings and worries in the coalfields and among the unions about the implications for jobs and redundancies.
Some of the early figures that were rumoured, and some of the figures that were thrown around, have proved to be exaggerated. As the National Coal Board in the regions discusses these issues with the National Union of Mineworkers and the other unions, it emerges that the figures for redundancies are substantially lower than the first rumours, and that the figures of closures are substantially lower than the figure of 50 pits which was rumoured, and which was not mentioned or given by the National Coal Board.
The Government recognise also that they must view the problems of redundancies with sympathy and that these must be approached in a sympathetic and sensitive way. That was always foreseen and realised. It is part of facing up to the future for the industry—a strong future, which will be greatly enhanced by a commitment to investment.
Mr. Alec Woodall: Is the Secretary of State aware that recently the morale in the coal industry and the co-operation between man and management have been at the highest level in the whole history of coal mining, and that that has now been blown to the winds?
Does the Secretary of State appreciate that mine workers have co-operated 100 per cent. in the complete reorganisation of the industry? They have co-operated

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with the colliery review procedure which has brought about the closure of pits which have been physically exhausted. But now the Government are introducing a new element—that if a colliery is no longer economic it has to go.
Will the Secretary of State explain to his right hon. Friend the Prime Minister, who is sitting next to him, that it is not just a matter of the small number of pits which, according to the announcement, are now to be closed but that there is also the fear of the miners that this is the thin end of the wedge? It is easy to make a colliery uneconomic. One has only to leave a water valve open and that pit will become uneconomic in a matter of hours.
Does the right hon. Gentleman appreciate that he has blown to the four winds the mineworkers' confidence in their industry? Will he take steps now to reverse the position?
Mr. Howell: I understand the strong feelings of the hon. Gentleman, but I believe that his view of the industry is a defeatist one which does no service to the industry or to the miners. Let me tell him the reality of what is going on in the mines today. [Interruption.] In some of our new pits, productivity is up to seven times as high as it is in the old uneconomic pits. That is a major achievement, which I salute and which I make no apology for saluting, because it is a magnificent performance.
The future of the industry lies in more pits performing at those high levels of productivity and output per manshift, and in more investment in pits of that kind and in the jobs that will be available in those pits. That is where the interests of the industry lie. I make no apology for saying what I believe to be correct about the future of the industry. It is performing, in some of the best pits, as well as any deep-mine coal industry in Europe or the world. That fact should be recognised and not run down. It raises the morale of the industry and does not undermine it.
Mr. T. H. H. Skeet: In his talks, will my right hon. Friend the Secretary of State bear in mind that "Plan for Coal" had very much in mind that there would be pit closures, but that pit closures have fallen into arrears, as it were? Will he also bear in mind that it is not merely an investment of £800 million that has been provided for the industry for the year but that at least another £200 million has been spent by way of the various grants? Will he confirm that what we require in the United Kingdom is a totally competitive industry, which will look to the future for British coal?
Mr. Howell: I confirm what my hon. Friend has said. "Plan for Coal" always contained two elements—the heavy investment in new modern capacity and the closures. The heavy investment in modern capacity is going ahead. The question of closures is now being grappled with and faced by the industry. That is correct.
Mr. Donald Coleman: The right hon. Gentleman has expressed his Welshness. Does he not realise that the part of the announcement that applies to South Wales is the means of destroying a number of communities? Will he understand that it is impossible for miners in South Wales to accept the announcement when the National Coal Board has made no attempt to give any hope in terms of further investment in the industry in South
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Wales? In the light of the conversations that he will have with the NUM and the NCB, will he instruct the NCB to withdraw its notice in respect of the collieries in South Wales until the discussions have taken place?
Mr. Howell: These are matters that area representatives on the tripartite committee will have the opportunity of putting to me tomorrow. They will have the further opportunity of discussing them and their implications when we meet next week. These are the matters that will be discussed. That is the purpose of the meeting.
Mr. David Knox: Is my right hon. Friend aware that miners at the Victoria colliery, Biddulph are on strike today against the proposed closure? Is he further aware that these are not militants but individuals who are among the most moderate miners in Britain? Does not that suggest that there is something wrong and that the whole matter needs to be reconsidered?
Mr. Howell: I did not hear the first part of my hon. Friend's question. He will recognise that the need for more investment and the need for more closures is part of the unfolding pattern of the industry as it moves into the future. I have made that clear to the House. I believe that to be the right way forward. As the scale of the new investment is fully appreciated, and as it is seen where the prospects for the industry lie—they are extremely bright—those who have the best interests of the industry at heart will recognise that this is the way forward.
Mr. Don Dixon: When will the Government take account of the social consequences of their policy? The last pit in my constituency is to be closed, along with four pits in the Durham coalfield. The North has the highest percentage of unemployment in England, Wales or Scotland. It has the second lowest number of vacancies in England, Scotland or Wales. There are almost 50 unemployed persons for every vacancy. We do not have a Minister for the North, a Northern Development Agency, a Grand Committee for the North, a Select Committee for the North or Question Times for the North. However, we have the unfortunate record of the highest percentage of unemployment. When will the Government do something for the North of England before they suffer the consequences that will eventually come if their present policy is carried through?
Mr. Howell: As I have said, social policy must be approached imaginatively and sensitively, and that is what the Government are doing. I recognise the redundancy problems that are bound to arise from pit closures. There are bound to be some redundancies. However, we learn as the days pass that these will be far fewer than the exaggerated figures that have been thrown about. The Government will view with sympathy the social problems brought about by redundancies. We have always made that clear, and that is our position.
Mr. Jim Lester: I think that we all recognise that, whatever the factual economic case for pit closures, there are delicate sensibilities in the industry. I am delighted to hear that my right hon. Friend urged an earlier meeting than the one on Monday, and I look forward to Monday's meeting. Will he confirm that he will keep his diary open for as many meetings as are necessary to deal properly with the issue? I have great faith in the common sense and level-headedness of the British miner. I have

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lived among miners throughout my life. I am sure that if they recognise that they are treated fairly and that the Government approach this difficult and sensitive problem with an open mind and not in any dogmatic way we shall have nothing to fear from them.
Mr. J. D. Concannon: Well done.
Mr. Howell: The next meeting that I propose is not necessarily for Monday. It will take place on a suitable day next week. I share totally my hon. Friend's view that there is a need for the industry and the Government to talk open-mindedly about the way in which investment can be maintained. I have indicated our sympathy towards redundancies. I have said that in the current year the industry will certainly be exporting more than it is importing. I have some other words to say on that score. This adds up to a sensible agenda on which to discuss the problems that the NCB and the NUM now face, with which they have come to terms and with which they have to grapple in the light of the inevitable closures, which are difficult but which must be carried through in the longer term interests of the industry and the nation.
Mr. Dennis Skinner: Is the Minister aware that 10 years ago there were at least four pits in Derbyshire that were considered uneconomic? The situation changed dramatically because different seams were worked. The oil price increase in 1973 made a significant difference. Many of the pits that were regarded as being under threat 10 years ago are now producing coal. That has happened to such an extent in North Derbyshire that it was announced yesterday that no pits would close in the area. When the right hon. Gentleman talks about temporarily uneconomic pits he is talking about the economic pits of the future.
Does it not make nonsense of the Government's argument when we hear Ministers say that the recession is bottoming out? Surely it would be folly not to have sufficient coal and energy to ensure, if the Tories are right, that we are able to keep the factories going in future. Will the right hon. Gentleman bear in mind that one of the reasons why so-called moderate miners are incensed is that he and other Ministers, together with the NCB, were telling them only a few weeks ago that if they accepted a 13 per cent. wage increase they would keep their jobs? That is why they are furious in many areas. That is what the Minister does not understand. If the Government are to be at arm's length from the dispute, which the Prime Minister keeps saying she is and wants to be, will the right hon. Gentleman give a guarantee that when the strike is fully in action next week the Government will keep at arm's length and let it arrive at a successful conclusion?
Mr. Howell: I do not think that the hon. Gentleman's last remark is in the interests of the miners, the industry or the nation. I am grateful to the hon. Gentleman for confirming that in North Derbyshire there will be no closures. That brings home some of the exaggerated comments, figures and rumours that have been flying about, which have made it much more difficult for the industry to put the issue in a sensible perspective.
Individual closures, economic faces and economic mines are matters for management and unions to examine and determine. They have the colliery procedure. The management has to decide which pits are economic and which are uneconomic. It makes its decision on individual closures. That must be the way to run the industry.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call five more hon. Members from either side of the House. It will be a very long run.
Mr. David Crouch: Does my right hon. Friend agree that perhaps there has been a lack of communication? Will he consider the advice of Lord Robens, who carried out 406 closures when he headed the NCB? He advised that we should never think of a closure only in terms of its effect on the balance sheet. He added that to do so would be disastrous. Will my right hon. Friend bear that advice carefully in mind?
Mr. Howell: The views of the management and the industry about how closures are to be conducted are formulated in a most sensitive manner. They are based not merely on brutal arithmetical calculations but on a full understanding of the future potential of a pit and the implications of a closure, which is a serious event. I believe that approach to be right.
My hon. Friend mentioned the possibility of a lack of communication. After the meeting of 10 February it was rumoured that 50 pits were to be closed. Those rumours were circulated and they caused unnecessary fears about what was being proposed. There will be further details following discussion between the NCB and the appropriate regions tomorrow. However, the closures will be considerably fewer than the figures that have been bandied about.
Mr. Jack Ashley: Even if there has been some exaggeration, as the Prime Minister and the Minister said, does the Secretary of State not realise that he is damaging rather than helping the industry, because the miners in Stoke-on-Trent and elsewhere, who have responded to the request for an increased production, will not respond in future if they see pits being closed because of a temporary fall in demand?
Mr. Howell: I am not sure that the right hon Gentleman is correct. The miners are responding magnificently to the new investment with a higher productivity and a higher output per man-shift than before. The response is there. The mining industry knows—this is a point that one is entitled to make—that with a history' of uneconomic pits, the performance of the industry, which could be highly profitable and will be in the future, is being held back. Jobs and opportunities for opening up new investment are being jeopardised by uneconomic; performance. The sooner that that is recognised and we are able to move forward from the uneconomic pattern of the past, the higher the morale of the industry and the more the miners will be glad to be working in a profitable industry that can compete with the best in Europe and in the world.
Sir Albert Costain: Does the Minister appreciate that when considering the closure of Kent mines he should explore the possibility of miners being employed on the Channel tunnel? In that work their skills in the pits would be very valuable. Is it not better that they should be employed in helping the economy of the country than in producing coal at uneconomic prices, which will increase the price of electricity?
Mr. Howell: Clearly we welcome every new and profitable employment opportunity that can be found. The continuation of uneconomic pits and unprofitable mining,

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in some cases in pits well over 100 years old, will not help towards the prosperity of the industry or the country, nor will it help to create the jobs for tomorrow for which we hope.
Mr. Frank Haynes: Is the Secretary of State aware that he cannot see coal because the monetary policy of the Government is in the way? I come from a moderate coal mining area in Nottinghamshire, but does the right hon. Gentleman understand that the miners there are seething about the present policy? Is he aware that, because of the Government's policy about the mining industry, importers that supply us with coal will hold us to ransom in the future? Is he aware that we need every cobble of coal that we can produce from our own pits? Four years ago we were seriously short of coal. When the economy picks up, we shall desperately need every cobble.
Mr. Howell: Imports will fall in the current year. The present high level of imports arises as a result of long-term contracts entered into under the Labour Government. Rushing out to buy coal on the spot market is no longer possible. I do not blame the Labour Government for allowing long-term contracts. It is reasonable that industries should be free to buy coal particularly for electricity, for other processes and for other inputs at the cheapest possible price to maintain jobs and to produce competitive products. We want everyone to be in jobs, and the best way to maintain jobs is to maintain competition. That applies to all raw materials and all manufacturing processes. That was the view of the Labour Government.
Mr. Nigel Forman: Is my right hon. Friend aware that everything that he has said today, and everything that his Department has done since the Government have been in office, indicates the Government's continuing strong commitment to the future of the coal industry? In his forthcoming discussions with both sides of the industry, will he look again at possible increases in the market for coal by the adoption of some measures to encourage and assist the direct use of coal in industry because that is one of the markets for coal which could be expanded much further to the benefit of all employed in the industry?
Mr. Howell: I shall consider my hon. Friend's view. The economic facts already provide a massive incentive for industry to move from oil to coal. The economic attractions and the attractions in terms of energy efficiency of going over to coal and coal-fired equipment are very great, so the economics are working in favour of the expansion of the industrial steam-raising market for coal. I should like to see those economic forces working as vigorously as possible.
Mr. George Foulkes: Is the Secretary of State aware that when I spoke to the Scottish director of the National Coal Board some weeks ago there was no talk of closures—indeed, quite the reverse? That is why I believe that this is something that has been cobbled by the Government in the past few weeks. Will the Secretary of State stop treating tomorrow's meeting as a preliminary meeting because he knows the views of the miners and the NCB? Will he come to an agreement tomorrow on the basis of "Plan for Coal"?
Mr. Howell: The preliminary meeting is what both sides of industry have asked for. It has been recognised for a long time that closures in Scotland or anywhere else will continue. They have continued for the past two decades. It was always recognised that uneconomic pits would have to be closed as the industry moved to profitability. There is nothing new in talk of closures. It has always been understood that the process of closures would have to continue in an extractive industry.
Mr. Alan Haselhurst: If there can be flexibility in determining whether a pit has run out of coal, or of coal which can be profitably extracted, does my right hon. Friend agree that there could be flexibility in the timing of closures of such pits in order to dovetail in with new investment in production?
Mr. Howell: The precise timetable or programme is a matter for the National Coal Board. I know that it recognises the need for timing of new investment and the closing of uneconomic capacity to be managed sensibly. That is why the board is proceeding with talks in the regions.
I have emphasised the Government's commitment to heavy investment in modern capacity. We have sympathy with the redundancy problems, and our views on imports, which I re-emphasise are extremely small with net imports of 3 per cent. of the industry's total market in the United Kingdom, are matters about which we can talk. I shall listen to the views in the preliminary meeting for which I was asked. We can discuss those views in the further meeting that I have proposed. I am sure that we can examine in great detail the implications of what is being proposed by the National Coal Board. There is no reason why we should not continue to talk constructively because in our view the industry has a constructive future based on massive investment.
Mr. Peter Hardy: So far in these exchanges the Minister appears to have committed himself to a sensible, sensitive and imaginative approach. He has said that we must not be dogmatic. Therefore, will he give us an assurance that at the preliminary meeting and the one that will follow he will make it clear that the Government will not stick inflexibly to the timetable and the financial arrangements in the Coal Industry Act 1980?
Mr. Howell: The National Coal Board, even now, is continuing discussions on what it proposes. We shall have to see what the proposals will be when they have been completed and how the National Union of Mineworkers reacts both in the regions and centrally. We shall have to discuss the implications. The background against everything of which I have spoken takes place is a background of massive continued investment in the industry and an understanding of the social and redundancy implications of what is involved. Those are the matters, among others, that we shall discuss in the tripartite meeting. That is the right forum in which to discuss them, and to continue to discuss them, in a constructive spirit.
Mr. Peter Rost: I accept the need for closures, but is it not regrettable that the National Coal Board has failed to issue a more precise statement of its proposals, which might have avoided unnecessary fears and rumours and the precipitate action of the miners? Has not this matter been handled in a less tactful and sensitive manner than is desirable?
Mr. Howell: The NCB regional managements have produced precise statements about the implications of the closures during the next three years. It is true that when the matter was discussed at a national level on 10 February at the request of the National Union of Mineworkers and other unions, grossly exaggerated rumours appeared in the press. The figures for redundancies and closures produced at regional discussions have been precise. They are considerably less than was implied in some of the exaggerated rumours.
Mr. Michael Welsh: I am grateful to the Minister for swiftly altering the date of the meeting to tomorrow. When he attends that meeting, will he accept that no miner has any desire to strike? Miners want to work. It is only when they are driven to the extreme that they strike. They believe that they have now reached the extreme. It is important to bear in mind that viewpoint at the meeting. Does the right hon. Gentleman accept that we have always known that in the short run the industry needed more help than has been provided by the Coal Industry Act 1980? That was explained in Committee. But if the pits are closed in the short run there will be fewer shafts, and when the demand for coal increases the pits will be unable to meet that demand. It is vital that more investment should be provided in the short term to keep open the pits and to develop new seams. Industry should be encouraged to change from the use of oil to the use of coal. The EEC has money available, which could be provided for investment if the Government so desired. But the Government stopped the National Coal Board from borrowing from the EEC. Will the Minister ensure that at tomorrow's meeting an acceptable conclusion is reached so that the miners can return to work and produce more coal?
Mr. Howell: I agree with a great deal of the hon. Gentleman's remarks. Obviously, he has great experience of these matters. But there is no vast source of money available from the EEC to which we have recourse. That is not provided for under EEC arrangements. There is no such honeypot of investment. I have put forward a proposal to the EEC—and have continued to press it—for assistance for coal production within the EEC, but it has not yet proved acceptable to other Community members.
The hon. Gentleman said that men who believe that they are driven to extremes are deeply concerned and angered. Any reasonable person would feel so if he believed that he had been driven to extremes. But in this case that belief is not well founded. Neither the industry nor anyone working in it has been driven to the extreme. Proposals have been put forward to modernise the industry, to invest at a high rate, and to close uneconomic capacity, which has held back the industry. That is not driving anything to the extreme; that is the industry driving itself, through its magnificent performance, to a much brighter future.
The arrangements that follow the NCB's proposals will be discussed at the meeting tomorrow. I shall discuss those matters with both sides of the industry next week and, I hope, when further opportunities arise.
Mr. Merlyn Rees: The Secretary of State appeared to give blanket approval to the NCB proposals. Is there no room for negotiation in the discussions, given the Government's rolling cash limits, the temporary recession, and the rapidly increasing imports? During a period of industrial unrest two years ago the Labour Government had to come to the House every day and report on the position. Will the Secretary of State report to the House regularly on what is happening in the coal industry?
Mr. Howell: The arrangements for, and the precise timing of, any statements are matters for my right hon. Friend the Leader of the House. However, I am anxious to keep the House fully informed of what is happening in the great energy industries of Britain, including the coal industry. It would be wrong for me to have any other wish.
I have emphasised the Government's determination to ensure investment in modern capacity. I have spoken of our sympathetic view towards redundancies, and the problems that are bound to arise in an extractive industry However, I have already said that the facts about imports are different from those suggested by some hon. Members. I shall listen carefully to what both sides of industry have to say at the preliminary meeting tomorrow. I look forward to further discussions about the details and the implications of the NCB's proposals to secure the future of the industry and produce competitively priced coal and raw material for industry, our electricity generators, and our manufacturers. We intend to discuss how best the Government and industry can move forward along that path, which is the right path for the coal industry, those working in the industry, and the nation.
Mr Robert C. Brown: On a point of order, Mr. Speaker. I seek to have a correction made to column 90 of the Official Report of 16 February 1981, which records me as having mentioned a figure of "£50". The figure should be £250.
Mr. Speaker: I shall ensure that the necessary correction is made in Hansard. I think that some hon. Members are about to raise points of order. The House is anxious to debate the Linwood closure, which is an abbreviated debate. It is also anxious—this applies especially to Liverpool Members—to discuss the EEC sugar proposals. The Ten-Minute Bill comes before the debates, and will take half an hour from the time available for the debates. I warn hon. Members that they may prevent one of their colleagues being called to speak on a matter that means a great deal to them.
Mr. Allen McKay: On a point of order Mr. Speaker. The position relating to discussions about the strike in the coal industry is delicate. Indeed, the position in the coal industry has been delicate since 1926. Do you, Mr. Speaker, think that we should have a report from the Minister on Thursday, as has been suggested?
Mr. Speaker: That is not a point of order for me.

Wages Councils (Amendment)
4.17 pm
Mr. John Townend: I beg to move,
That leave be given to bring in a Bill to amend the law relating to Wages Councils.
Wages councils were founded in the 1920s to protect workers in manufacturing industries from sweat shop conditions, where organisation was difficult due to fragmentation. Like so many quangos, they have grown over the years. Their character has changed, and the majority of workers now covered by them are not in manufacturing industries but in shops, public houses and hotels.
I shall be quite frank. I want to see all wages councils abolished. However I know that some hon. Members would not go as far as that immediately. My Bill would severely amend and restrict wages councils. I hope that once that has been achieved without problems, it may be possible to persuade the House to abolish them altogether.
My criticisms of wages councils are sixfold, and are based largely on my personal experience in business. First, they are contrary to the Government's express policy that wages should be based on an employer's ability to pay. Because wage rates in wages council industries are settled nationally, they do not take account of the individual employer's ability to pay. Secondly, they create unemployment. If increased rates cause an employer to close his firm and to declare his employees redundant, so be it. Even if workers offer to forgo increases to safeguard their jobs—as has happened in many manufacturing industries during the past years—the law does not allow them to do so. That has resulted in thousands of jobs being lost in businesses that could not afford increased rates.
Originally, regional wages councils' rates were very low, and were paid by only a minority of employers—all good employers paid well above those rates. But in recent years, due to the large increases, wages councils' rates are now paid not by the minority but by the majority.
My third criticism is that these bodies bear down particularly heavily on young people. In recent years they have increased percentage rates for young people. They have narrowed the differentials between young and adult workers and they have reduced the starting age at which adult rates are paid. In April this year, in my own trade, a 19-year-old shop assistant will be paid £57 per week. In other retail trades the figure is £59 per week. That may be all right in the West End of London for a smart, intelligent, well-motivated youngster, but those rates apply equally in Hull and Liverpool, and they apply to the not very well-motivated, not very intelligent youngster as well. In practice, this simply means that there will be no jobs for that type of person.
I received a poignant and tragic letter this week from a parent writing about his son, who was made redundant after working for a firm for two and a half years. That parent said:
"It seems ludicrous to me that as my son was prepared to remain at his firm on the same wage before the Wages Council awarded under 21s an additional £10 a week, that I was not able to negotiate with his employers who were forced into reorganisation as a result of the award.
The employer was sorry to see my son go and what amazes me is the lack of intelligence of the Wages Council … who in my opinion should have realised that in view of the economic climate this was the wrong year to press employers to pay more wages to such employees who were quite content to have a job at the wage offered, for the time being at least.
150
As a result, my son just cannot find employment in Hull."
Is that not a tragic letter?
I therefore say to the House that any form of minimum wage reduces the job opportunities for the least able and for the ethnic minorities.
My fourth criticism is that the wages councils are bureaucratic and bear down heavily on small businesses. Although there are independent members holding the balance between trade union representatives and employer representatives, they are academics who have little or no experience of small business and little or no knowledge of small business men. Small business men themselves do not believe that their own representatives are much help, and rarely contact them. Most of the employer representatives are from large firms which themselves are often unionised and have a vested interest in forcing up the wage rates of their small competitors.
When such an employer receives a notice from the wages council he looks upon it as a notice from the Government, and in difficult trading times he sees no alternative but to declare one more of his employees redundant.
I cite just two examples of bureaucracy. One involves an employee who worked a five-day week. This lady had difficulty in getting her hair done on a Saturday, so she asked her employer whether she could work Saturday morning and have Friday afternoon off. This was mutually agreed. When the wage inspector came round, the employer was in great trouble for not having paid her five and a half days' pay because she was entitled to double time on a Saturday.
Another example was a woman with children at school. She was working 40 hours. She wanted to spend a little more time with her children, so she asked her employer whether she could work 36 hours. He agreed and paid her the hourly rate for the 36 hours, which was readily accepted. When the inspector came round, that employer, too, was in trouble, because the regulations stated that a person working 36 hours or more must be paid for a minimum of 40 hours.
My fifth complaint is that the councils have been inflationary. In recent years, their awards have been at a higher rate than inflation generally. Moreover, in far too many cases there has been more than one award in 12 months. If one includes the cost of additional holiday pay, shorter hours and the lower age limit for adult rates, the increase to employers has been way above the rate of inflation.
My last criticism is that these bodies are out of control. Even when the Labour Government had their 5 per cent. wage policy the wages councils took no notice whatever of that recommendation. Equally today, they seem to be taking very little notice of the Government's 6 per cent. cash limit for pay in the public sector or their policy that increases should be related to ability to pay.
Over the past 20 years, far from protecting employees, the wages councils have in many ways been actually harmful. I submit that they have largely outlived their usefulness.
The Bill would make the following changes. It would take out of the wages council area part-time workers and workers under the age of 21. In service industries where there are large numbers of small businesses the councils would be converted into statutory joint industrial councils without enforcement powers. Wage increases would be

151
restricted to no more than one in 12 months. There would also be a reduction in and, one hopes, the abolition of many of the bureaucratic rules and regulations.
I seek the support of both sides of the House for the Bill. I ask for support from the Opposition because of their well-known wish to increase job opportunities for young people and in particular for the less able and for the ethnic minorities. In addition, I suggest to my right hon. and hon. Friends that they should support the Bill because of their opposition to quangos and bureaucracy and their policy of reducing the burden on small businesses. On that score, I would expect also to have the support of hon. Members on the Liberal Bench, which unfortunately appears to be empty.
Without wages councils, we might well have had today a further 50,000 or 100,000 jobs in the retail, catering and hotel industries. Surely at a time when unemployment is tragically high our first priority should be to have more jobs, even low-paid jobs, rather than no jobs at all.
4.27 pm
Mr. Bruce George: I rise to oppose this mischievous and dangerous Bill, which seeks so to emasculate wages councils as to render them superfluous. I doubt whether many Opposition Members will go into the Lobby with the hon. Member for Bridlington (Mr. Townend). I hope very much that Conservative Members will also try to weigh the facts objectively. The case presented by the hon. Gentleman closely resembled that of the National Federation of Self Employed Limited. It was a classic case of not letting facts come anywhere near contact with the polemic to which we were subjected.
The hon. Gentleman's remarks may persuade Conservative Members to support the Bill, but I believe that if wages councils are abolished or emasculated this will eliminate the protection given to a grossly exploited sector of our population. Those who would support that perhaps wish to recreate the idyllic world when wages were set exclusively by market forces, as though we had passed from the 1880s to the 1980s without the intervening period of civilisation and social legislation.
The hon. Gentleman's speech was a mass of inaccuracies, prejudices and distortions, based upon unfounded assertions. No doubt there will be some who will wish to ingratiate themselves with small employers by voting for the Bill, but that will hardly recompense the small employers for the great damage inflicted upon their industry by "their" own Government.
If one is looking for a scapegoat for the ills affecting small businesses, I suggest that it is pretty stupid to look at those earning less than £55 per week. That is the situation that any statistics will reveal. The wages enjoyed—or experienced—in wages council industries in most cases are below £55 per week. So who are these bloated new members of the working-class aristocracy? Where are the overpaid booksellers and the overpaid workers in the service industries? I went to a restaurant today where the price of the caviar, which I did not have, was £33. In other words, the price of the hors d'oeuvre was almost equal to the weekly wage enjoyed by people in these industries.
Many of the claims that we have heard, therefore, do not stand up to close scrutiny. We have heard about large pay increases awarded by wages councils allegedly destroying thousands of jobs. Yet the highest minimum rate set by a wages council is £57·60. That is about half
152
the average wage in this country and about £10 below the statutory poverty line. Those are the people about whom we are talking, yet it is suggested that they help to destroy industry.
About 3 million people are covered by wages councils. The minimum level at which some of them are 'protected' is £36 a week. Can any hon. Member imagine someone working for £36 a week? By doing so such a person is earning his poverty.
We are told that minimum wages discriminate against ethnic minorities and other disadvantaged groups. If these present statutory protections are withdrawn, these people will be thrown to the wolves. The argument that these people will be protected by this measure is absolute balderdash. These vulnerable groups must be protected, not by abolishing wages councils but by strengthening them.
A report of the National Federation of Self Employed Limited says:
"It is quite probable that many of those in unemployment queues would readily accept less than the minimum wage."
However, the minimum wage is already a starvation wage. While the work ethic is strong in this country, can we really expect people to work for lower than the miserly level which wages councils have fixed for nearly 3 million people?
We are told that wages councils have narrowed the differential between young and old workers. The hon. Gentleman gave some statistics. However, a 16-year-old working in non-food shops can get £33·55 a week. Is that being overpaid?
We are told that wages councils are over-bureaucratic. The truth is that they have 270 employees serving virtually 3 million people and nearly 400,000 establishments. That is hardly an excess of bureaucracy. The wages councils have only 270 employees as opposed to the 4,500 social security fraud inspectors, whose numbers are going up. Yet the Government have proposed a decimation of the already depleted ranks of the wages councils inspectors, which will make it even easier for people to avoid paying the minimum rate.
Are these inspectors jackbooted, Gestapo-like officers who terrorise the honest employer? The chances of being inspected are slight. Even if one has been found to underpay, the chances of prosecution are minimal. There are about a dozen prosecutions a year—hardly terrorist tactics, though underpayment is endemic.
We are told that the council members contain too many academics. The hon. Gentleman seems to want a group of small business men whose vested interest will be not to elevate wages but to depress them. I compliment those academics who have been disparagingly referred to but who sit and engage in some kind of arbitration process.
The Bill proposes to abolish any restraints for those under 21 and for part-time workers, a large number of whom are presently covered by wages councils. The suggestion that if controls are removed from part-time workers it will somehow improve employment is a fallacy and nonsense. The Royal Commission on the Distribution of Wealth said that there would be an enormous increase in the number of people in poverty if restraints were removed from them. As for removing wages councils and replacing them with some kind of non-statutory, toothless body, that would be an absolute disaster.
Wages councils are a protection for the low-paid. If any Bill is to be passed by this House, I hope that it will be

153
a Bill to strengthen the wages council system and not to abolish them. The callousness of these proposals are breathtaking. We must protect the vulnerable and generally unorganised section of the work force. Wages councils cannot by themselves solve the problems of low pay. Those problems are a source of inefficiency in industry and social disharmony. There are many things which this House can do for the low-paid. I suggest that the first is to throw out this squalid little Bill.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
The House divided: Ayes 115, Noes 194.

Division No. 72]

[4.34 pm

AYES

Adley, Robert

Kitson, SirTimothy

Amery, RtHon Julian

Knight, MrsJill

Atkins, Robert (PrestonN)

Lang, Ian

Atkinson, David (B'm'th,E)

Lawrence, Ivan

Baker, Nicholas (N Dorset)

Lloyd, Peter (Fareham)

Banks, Robert

Lyell, Nicholas

Beaumont-Dark, Anthony

MacKay, John (Argyll)

Bell, SirRonald

McNair-Wilson,M. (N'bury)

Bevan, David Gilroy

McQuarrie, Albert

Biggs-Davison, John

Marland, Paul

Blackburn, John

Marlow,Tony

Body, Richard

Mates, Michael

Bonsor, SirNicholas

Maude, RtHon Sir Angus

Bowden, Andrew

Mawhinney, DrBrian

Braine, SirBernard

Maxwell-Hyslop, Robin

Bright, Graham

Mills, lain (Meriden)

Brinton, Tim

Molyneaux,James

Brotherton, Michael

Montgomery, Fergus

Brown, M. (BriggandScun)

Morrison, HonC. (Devizes)

Browne, John (Winchester)

Myles, David

Buck, Antony

Neubert, Michael

Budgen, Nick

Page, John (Harrow, West)

Carlisle, John (Luton West)

Page, Rt Hon Sir G. (Crosby)

Chapman, Sydney

Pawsey, James

Clark, Hon A. (Plym'th,S'n)

Pollock, Alexander

Clark, Sir W. (CroydonS)

Powell, Rt Hon J.E. (SDown)

Cockeram, Eric

Price, Sir David (Eastleigh)

Colvin, Michael

Proctor, K. Harvey

Corrie, John

Rathbone, Tim

Cranborne, Viscount

Ross, Wm. (Londonderry)

Dover, Denshore

Shaw, Michael (Scarborouh)

du Cann, RtHon Edward

Shelton, William (Streatham)

Dunlop, John

Shepherd, Richard

Dunn, Robert (Dartford)

Shersby, Michael

Durant, Tony

Smith, Dudley

Emery, Peter

Spence, John

Fell, Anthony

Spicer, Jim (WestDorset)

Fenner, Mrs Peggy

Sproat, lain

Fisher, SirNigel

Stainton, Keith

Fookes, Miss Janet

Stanbrook, lvor

Fox, Marcus

Stewart, A. (ERenfrewshire)

Fraser, RtHon Sir Hugh

Stokes, John

Gardiner, George(Reigate)

Taylor, Robert (CroydonNW)

Gow, Ian

Thome, Neil (llfordSouth)

Griffiths, E.(B'ySt.Edm'ds)

Thornton, Malcolm

Grylls, Michael

Townend, John (Bridlington)

Hamilton, Michael (Salisbury)

Viggers, Peter

Henderson, Barry

Walker-Smith, Rt Hon Sir D.

Higgins, Rt Hon Terence L.

Wall, Patrick

Hill, James

Waller, Gary

Holland, Philip (Carlton)

Walters, Dennis

Hordern, Peter

Ward, John

Hunt, David (Wirral)

Warren, Kenneth

Jessel, Toby

Wells, Bowen

Kellett-Bowman, MrsElaine

Wheeler, John

Kershaw, Sir Anthony

Whitney, Raymond

154

Wilkinson, John

Mr. Richard Alexander and

Mr. Christopher Murphy.

Tellers for the Ayes:

NOES

Adams, Allen

Gourlay, Harry

Allaun, Frank

Graham, Ted

Alton, David

Grant, John (Islington C)

Anderson, Donald

Grimond, Rt Hon J.

Archer, Rt Hon Peter

Hamilton, James (Bothwell)

Armstrong, Rt Hon Ernest

Hamilton, W.W. (C'tral Fife)

Ashley, Rt Hon Jack

Hardy, Peter

Atkinson, N.(H'gey,)

Harrison, RtHonWalter

Bagier, Gordon A.T.

Haynes, Frank

Barnett, Guy (Greenwich)

Heffer, EricS.

Barnett, RtHon Joel (H'wd)

Hogg, N. (EDunb't'nshire)

Beith, A. J.

Holland,S.(L'b'th,Vauxh'll)

Benn, RtHon A. Wedgwood

HomeRobertson, John

Bidwell, Sydney

Homewood, William

Booth, RtHonAlbert

Hooley, Frank

Boothroyd, MissBetty

Howell, Rt Hon D.

Bradley, Tom

Huckfield, Les

Bray, Dr Jeremy

Hughes, Mark(Durham)

Brown, Hugh D.(Provan)

Hughes, Robert (AberdeenN)

Brown, R. C. (N'castle W)

Hughes, Roy (Newport)

Brown, Ron (E'burgh,Leith)

Jay, Rt Hon Douglas

Buchan, Norman

Johnston, Russell (Inverness)

Callaghan,Jim (Midd't'n&P)

Jones, Barry (EastFlint)

Campbell, Ian

Jones, Dan (Burnley)

Campbell-Savours, Dale

Kaufman, Rt Hon Gerald

Canavan, Dennis

Kerr, Russell

Cant, R. B.

Kilfedder, JamesA.

Carmichael, Neil

Kilroy-Silk, Robert

Carter-Jones, Lewis

Kinnock, Neil

Cartwright, John

Lambie, David

Clark, Dr David (S Shields)

Lamborn, Harry

Cocks, Rt Hon M. (B'stol S)

Lamond, James

Cohen, Stanley

Leadbitter, Ted

Coleman,Donald

Leighton, Ronald

Concannon, Rt Hon J. D.

Lestor, Miss Joan

Conlan, Bernard

Lewis, Arthur (N'ham NW)

Cook, Robin F.

Lofthouse, Geoffrey

Cowans, Harry

Lyon, Alexander(York)

Craigen, J. M.

Lyons, Edward(Bradf'dW)

Crowther, J. S.

Mabon, Rt Hon Dr J. Dickson

Cryer, Bob

McCartney, Hugh

Cunliffe, Lawrence

McDonald, DrOonagh

Cunningham, Dr J.(W'h'n)

McKay, Allen (Penistone)

Dalyell, Tam

McKelvey, William

Davidson, Arthur

MacKenzie, RtHonGregor

Davis, Clinton (Hackney C)

McMahon, Andrew

Davis, T. (B'ham, Stechf'd)

McNally, Thomas

Deakins, Eric

McWilliam, John

Dean, Joseph (Leeds West)

Magee, Bryan

Dewar, Donald

Marks, Kenneth

Dixon, Donald

Marshall, D(G'gowS'ton)

Dobson, Frank

Marshall, Dr Edmund (Goole)

Dormand, Jack

MarshalI, Jim (LeicesterS)

Dorrell, Stephen

Martin, M(G'gowS'burn)

Dubs, Alfred

Mason, Rt Hon Roy

Dunn, James A.

Maxton, John

Dunwoody, Hon MrsG.

Maynard, MissJoan

Eadie, Alex

Meacher, Michael

Eastham, Ken

Mellish, RtHonRobert

Ellis, R. (NE D'bysh're)

Mikardo, lan

English, Michael

Millan, RtHonBruce

Evans, John (Newton)

Mitchell, Austin (Grimsby)

Ewing, Harry

Mitchell, R.C.(Soton ltchen)

Flannery, Martin

Morris, Rt Hon A. (W'shawe)

Fletcher, Ted(Darlington)

Morris, Rt Hon C. (O'shaw)

Foot, RtHon Michael

Morton, George

Ford, Ben

Newens, Stanley

Forrester, John

Oakes, Rt Hon Gordon

Foster, Derek

O'Halloran, Michael

Fraser,J. (Lamb'th,N'w'd)

O'Neill, Martin

Freud, Clement

Palmer, Arthur

Garrett, John (Norwich S)

Park, George

Garrett, W. E. (Wallsend)

Parker, John

George, Bruce

Parry, Robert

Golding, John

Pavitt, Laurie

155

Penhaligon, David

Stott, Roger

Powell, Raymond (Ogmore)

Strang, Gavin

Prescott, John

Straw, Jack

Price, C. (Lewisham W)

Summerskill, HonDrShirley

Radice, Giles

Taylor, Mrs Ann (Bolton W)

Rees, Rt Hon M (LeedsS)

Thorne, Stan(PrestonSouth)

Richardson, Jo

Tilley, John

Roberts, Albert (Normanton)

Tinn, James

Roberts, Ernest (Hackney N)

Varley, Rt Hon Eric G.

Roberts, Gwilym (Cannock)

Wainwright, R. (ColneV)

Robinson, G. (Coventry NW)

Watkins, David

Rooker, J.W.

Welsh, Michael

Roper, John

White, J. (G'gowPollok)

Ross, Ernest (Dundee West)

Whitlock, William

Ross, Stephen (Isle of Wight)

Wigley, Dafydd

Sandelson, Neville

Willey, Rt Hon Frederick

Sheerman, Barry

Wilson, Gordon (DundeeE)

Sheldon, Rt Hon R.

Winnick, David

Silverman, Julius

Woodall, Alec

Skinner, Dennis

Woolmer, Kenneth

Smith, Rt Hon J. (N Lanark)

Spriggs, Leslie

Tellers for the Noes:

Stallard, A. W.

Mr. Phillip Whitehead and

Steel, Rt Hon David

Mr. Dick Douglas.

Question accordingly negatived.

Orders of the Day
SUPPLY
[9th ALLOTTED DAY]—considered

Orders of the Day

  Talbot (Linwood)
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Mr. Speaker has selected the amendment in the name of the Prime Minister.
  4.45 pm
  Mr. Bruce Millan: I beg to move,
  That this House deplores the Government's failure to take effective action to prevent the threatened closure of Talbot, Linwood, particularly in the light of the refusal of PSA/Citreon to fulfil the obligations undertaken by the firm in 1978, and expresses its grave anxiety at this latest example of the devastation which Government policies are imposing on manufacturing industry throughout the whole country.
  Last Wednesday's announcement came as a severe shock to the West of Scotland. It is, of course, futile to pretend that there have not been previous crises at Linwood. Nevertheless, it would be wrong for the House to underestimate the feelings of shock, dismay and anger that last Wednesday's announcement brought to the area. If this decision to close Talbot, Linwood is allowed to happen—we are arguing from the Labour Benches that it should not—it will represent the end of a hope for the building up of car manufacturing in Scotland.
  There has been a certain amount of press comment—some of it, I am sorry to say, in Scotland itself—that suggests that Linwood was doomed from the start, that the original decision was a mistaken one, and that Linwood could never have succeeded. I repudiate that idea. In any case, the decision was that of a Conservative Government. In repudiating that suggestion I want to make clear to the House what the implications would be if it were true. It would be saying to Scotland "You do not have a prospect of obtaining this kind of industry. Regional policy does not work. We cannot make regional policy effective, and Scotland therefore must always be a kind of second-class area of the United Kingdom—and not only Scotland but a number of other areas".
  The political implications of that would be very serious. I am glad to see that in a different context they were recognised by the Secretary of State for Employment in a speech at the weekend, when he said that the House and the country are concerned not only with the South-East corner of England but with what is happenng in the rest of the country. The only trouble about the Secretary of State for Employment is that although he says these things he is a member of a Government who do not take the necessary policy consequences into account and who are devastating the whole of this country's industry.
  I have referred to the feeling of shock. There was also bitterness in the West of Scotland, because the unemployment situation there is absolutely grim. The Scottish situation is bad enough, with 12·7 per cent. unemployed at the latest count. In the Strathclyde region the figure is 15·1 per cent. What is more, male

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  unemployment there is now no less than 17·5 per cent.—before the Linwood closure. I remind the House that 95 per cent. of the people employed in Linwood are male. In the West of Scotland we are going to see 4,800 people directly from Talbot, Linwood, and considerable numbers more—taking the total certainly to beyond 7,000—losing their jobs within a very short period and with the vast majority of them having no real hope of obtaining alternative jobs in the grim situation that exists there.
  These figures for the whole of Strathclyde, appalling as they are, are overshadowed by the unemployment figures that will result from this closure in areas near the factory. In Paisley the unemployment rate is likely to go to 19 per cent.; in Johnstone the rate is likely to go to 23 per cent.; and in Linwood, immediately adjacent to the factory, the effect will be to take the rate to 40 per cent. That is the scale of the tragedy with which we are dealing in this debate.
  Even so, it may be asked, why debate Linwood, why debate this closure when closures are occurring throughout the country every day, when yesterday the textile workers lobbied Members of Parliament, and when there is a crisis in the coal industry? Linwood has special circumstances attaching to it; it has a special history. I shall not go back over the whole of that history, but I want to remind the House and put on record what happened at the time of the rescue of Chrysler UK by the Labour Government in 1976.
  At that time, Chrysler UK took on certain commitments to its manufacturing plants in this country. Those commitments were subsequently taken over in almost identical terms by Peugeot, when the factories were transferred to that organisation in 1978. The first commitment was that the plants in the United Kingdom should have equal treatment with those in the rest of the Chrysler, and subsequently the PSA, organisation. There were also specific commitments to keep open all the major manufacturing facilities, including Linwood. Thirdly, specific commitments were made—this was especially true of Linwood—to introduce new models to allow these manufacturing facilities to be fully utilised and to have an essential and necessary future. In the 1978 agreement it was recognised that there would need to be, as soon as possible, a replacement of the Avenger and Sunbeam models at the Linwood plant.
  These commitments have not been kept. There has not been equal treatment of the United Kingdom manufacturing plants by the new owners. We now have the decision to close Linwood, which, again, is against the guarantee and commitment given, and for the past two years the commitment to introduce new models at Linwood has also not been kept.
  I shall be told that over the past two years the economic circumstances have changed. Do we not know it in the House, and do we not know it in Scotland? We shall be told that the market has declined, that PSA has found it difficult to maintain, and has not maintained, its share in the United Kingdom industry. We shall be told that there is a general crisis in the European car industry and that there are special problems with the Iranian contract which are outside the control of PSA and the Government.
  That is not the whole story. It is not the whole explanation or excuse for what is happening now. Government policy has contributed directly to the crisis in
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  PSA, in Linwood and, indeed, in the whole car manufacturing industry and other United Kingdom industries.
  I hope that the House recognises that this is not just a question of Linwood making losses. The rest of the United Kingdom plants of PSA are also making losses and, indeed, losses are being made in the PSA European operations. If, therefore, the consequences of the closure at Linwood are logically followed they will have alarming implications for the rest of the PSA operation.
  Our first criticism of the Government is that we do not believe their protestations that they have tried hard to save Linwood. That is the Government's case, and that is what the Secretary of State for Scotland will tell us this afternoon. He will tell us that they tried, that they offered inducements, but that still the company would not stay. If that is true it represents a U-turn by the Government. The Tories voted against the Labour Government's rescue of Chrysler UK. If their policy had been accepted at that time Linwood would have gone in 1976, and so would Coventry. The whole of the Chrysler operation would have gone at that time.
  When the Government tell us how desperately anxious they are to maintain Linwood or any other operation in the United Kingdom they are not believed, because their industrial policy is completely schizophrenic. They go through the motions of offering inducements, but they do not believe in what they are doing, and when the going gets rough they give up and do not push their policy of inducement, which means that they do not enter into negotiations with sufficient determination to bring them to a successful conclusion. That can be illustrated by this case, when we consider the contemptuous way in which the company has treated Ministers.
  We were told that there was a meeting between the Secretary of State for Industry, the Secretary of State for Scotland and the managing director of the French company, Mr. Parayre, on Monday of last week and that certain propositions were put by the Government to the company. The Government were told that the company would think seriously about these propositions and let them know the result. We were told by the Minister of State, Department of Industry last Wednesday—the Under-Secretary of State for Scotland confirmed it—that the Government's first news of the French company's decision was conveyed to them only on Wednesday morning. Incidentally, the national trade union officials were put in exactly the same position.
  The letters to Members of Parliament representing the Talbot constituencies were posted by the company on the Tuesday. The notices to workers telling them that the plant would close down were certainly printed on Monday, and in my view must have been printed before that weekend. Therefore, when the meeting was being held on Monday the decision had already been taken and the dismissal notices had already been printed, yet the company, having gone through the motions of the meeting on Monday, did not even have the courtesy to tell the Government that it would announce the closure on Wednesday morning.
  Either the Government knew from a hint given to them, or they were told on Monday, that the decision had been taken—in which case Ministers have been guilty of misleading the House—or they did not know, in which case they have been treated by the company with the same kind of contempt that the company subsequently demonstrated towards Strathclyde regional council, which

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  twice sent the company polite and moderate requests for a meeting and was told by the company that it would not give the council the courtesy of a meeting, although it represents a wide body of opinion, including the Scottish CBI, in the West of Scotland.
  How do the Government respond to this gross discourtesy? We were told in a statement in the House last Wednesday that it was all terribly sad; it was a great pity, but we had to accept it; it was a commercial decision; there was nothing that we could do about it. We know the Secretary of State for Scotland. We are familiar with his excuses. He is always telling us how hard he is trying and we know how, at the end of the day, his efforts end in failure. Last week we had a refinement—he was not here at all—but normally we have the old familiar story from the Secretary of State.
  Let us suppose that the position were reversed and that a British company in France had met the French Government on Monday, and then, without telling them, had announced on Wednesday that it intended to close a major plant in France. Would the French Minister meekly accept that, and how very difficult and tragic it all was? Of course not.
  We have been given a demonstration of the lack of will that the Government have shown throughout. Nothing in Wednesday's statement and nothing since then has led us to believe that the Government would appeal to the company to reverse its decision. The Government have not even suggested that we should seek to delay the implementation of the decision well beyond June of this year.
  Moreover, the Government did not use one of their strong cards. The company still owes them £28 million. The Government could call in that money immediately. Yet Mr. Turnbull, the managing director of Talbot UK, said in his statement last week that the £28 million was not even mentioned during the negotiations with the Government. Indeed, it would cost the company considerably more than £28 million to withdraw from Linwood, because, apart from that amount, a considerable amount of money will be involved in redundancy payments.
  Not only was no serious attempt made to save Linwood; no assurance was given in last Wednesday's statement about Coventry. I do not wish to be alarmist, because I very much hope that it will not happen, but there was nothing in last week's statement to prevent the company, a little later, from doing exactly the same at Coventry as it has already done at Linwood. So, apart from asking the Government to take certain steps about Linwood, we are asking them to obtain certain assurances about Coventry, Ryton and Stoke.
  Even if the Government accept this decision as final, the Labour Party does not accept it as being the last word and the final chapter in the Linwood story. Nor do the trade unions accept it. The trade unions have been realistic and, in my view, responsible and constructive. I do not intend to mislead the House, or the men whose jobs are at stake, but it will be an extremely difficult job to reverse or even to moderate the decision. However, the effort should be made, and we do not believe that the Government have made that effort.
  The trade unions are particularly bitter, because over the past few years they have co-operated with the company in every possible way, whether in matters relating to productivity or to industrial relations. I was glad that in its
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  statement last Wednesday the company acknowledged that none of the blame for the failure could be attributed to a lack of co-operation by the trade unions during those years.
  We want the Government to make an effort, even at this late stage, either to have the decision reversed or to have it delayed, not just so that the redundancies can be phased out over a longer time scale—though even that would help the West of Scotland—but so that we can use the time that that will provide to find a solution to the problems of Linwood.
  I do not believe that that solution will be found simply by offering additional money to the company. The company has said that in present circumstances money is not the only or the essential issue. The Government are a little hurt by this. They have offered all that money to the company and the company has turned it down. It reminds me of what the right hon. Member for Sidcup (Mr. Heath) said during his term of office, namely, that he was offering investment incentives and yet no investment was forthcoming.
  The offers of assistance are being turned down because the problems at Linwood—here I come to my main criticism of the Government—cannot be isolated from the problems of manufacturing industry as a whole. The climate in which industry is operating is extremely detrimental, and even in the best of circumstances it is extremely difficult to persuade industry to invest and expand at present.
  Last Thursday, the day after the disastrous announcement about Linwood, the Department of Industry issued a small press notice about Government selective financial assistance to industry—exquisitely timed, may I say? The notice contained this statement:
  "The Government has made it clear that the main contribution it can make to industrial development is to establish an economic climate in this country in which free enterprise can expand and prosper".
  That is the Government's pretended policy, but what is really happening? Last week, we were given the figures for manufacturing industry. In 1980 there was a reduction of no less than 13.8 per cent. That takes us back to the 1967 situation. There was the largest decrease in manufacturing output that has ever occurred in a single year, including the disastrous years of the 1930s. That is where the Government's industrial and economic policies have driven manufacturing industry. Until there is a reversal of policy on interest rates and on the high value of sterling, we shall be unable to rescue Linwood, PSA be unable to expand in this country, and manufacturing industry as a whole will not be able to get going again.
  Last week's statement by the company said that the value of sterling was a deterrent to maintaining the Linwood manufacturing plant. That significant statement was not sufficiently noted in the press and elsewhere. It is also insufficiently known that, despite the criticisms that have been made of Linwood from time to time, 40 per cent. of the Sunbeams produced at Linwood have gone for export but, because of the high value of the pound, they have been sold at a loss. That story can be told by hundreds or thousands of manufacturing firms in this country. Naturally, in such circumstances Linwood cannot compete in world markets, but it is only experiencing the same kind of difficulty as much of our manufacturing industry.

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  Mr. Roy Grantham's resignation statement yesterday gave the reasons for his withdrawal as a Governmentappointed director of Talbot UK. He said that there was no way of solving the problems of PSA until there was a change in Government policy, whereby it would be profitable for private enterprise to expand and prosper. That is certainly what we do not have at the present time. Thus, I am asking for a delay in the implementation of the Linwood decision, even if it cannot be reversed. It is not, I repeat, simply to run down the redundancies at Linwood. It is to give us time, not only to produce solutions but to make the other major changes of policy that an increasing body of opinion in the country is now demanding from the Government. Unless we get such a change, nothing that we do for Linwood will save it.
  Any delay will cost the Government money. The irony is that their policies are already costing substantial sums of money and adding to the PSBR, when the only raison d'etre of those policies is to reduce the PSBR. The Treasury study last week showed that each additional person unemployed costs £3,400. If Linwood closes, it will therefore cost the Government about £25 million a year. Against that background we ask the Government to make the effort that they should have made before, and in particular to have the decision delayed so that we can see whether a solution can be worked out for Linwood.
  The Secretary of State will say that he will involve the Scottish Development Agency. We have heard it all before. He is bringing everyone together for a meeting on Friday. Last week we were told that the Government did not yet know what the meeting hoped to achieve. I am sure that we shall also be told that there will be new factory units, special attention to the area, and so on. I do not disparage such efforts. We need them anyway, with 17½ per cent. male unemployed in Strathclyde, without the special additional tragedy of the Linwood closure. Those efforts are not the whole answer, although they will cost a considerable amount of money.
  Neither should we simply abandon Talbot and believe that all will be well if we get the Datsun plant in Scotland. I hope that if Datsun comes to the United Kingdom an effort will be made to have the plant set up in Scotland, but my hon. Friends will also be making efforts to have it set up in other parts of the United Kingdom. We must try hard to maintain our existing manufacturing capacity as well as to establish new capacity.
  Everyone wants a change in Government policy towards manufacturing. Last week's announcement came at the time of an unprecedented drop in manufacturing output and coincided with the publication of the Treasury figures on the cost of unemployment. It also coincided with the interesting speech of the Leader of the House. In today's newspaper we can read the statement of the former Leader of the House. The message of those two right hon. Gentlemen, the TUC and the CBI is simple. The Government cannot continue to devastate British industry in the way that they have been doing over the past couple of years. Demoralisation is now so deep-seated that even when the upturn in the economy comes, if it ever does under this Government, very little of British industry will be left to take advantage of the more optimistic circumstances.
  Linwood is as good a place as any to start reversing Government policy, so that industry can fight back. The
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  debate is not only about Linwood, keeping Talbot in this country, and asking for reassurances about Coventry; it is about saving British industry. Linwood is not an isolated example; it is symptomatic of the deterioration and demoralisation of British industry. The time to stop the rot is now. The closure of Linwood is the latest manifestation of the Government's ineptitude and failure over the past two years, which has brought British industry to its knees.
  5.14 pm
  The Secretary of State for Scotland (Mr. George Younger): I beg to move, to leave out from 'That' to the end of the Question and to add instead thereof:
  'this House notes with regret the decision made by PSA within the 1978 agreement to close the Talbot, Linwood factory as a consequence of over capacity despite investment incentives available under the Government's industrial and regional policies; welcomes the company's continuing commitment to manufacturing in Britain; and approves the policies of Her Majesty's Government designed to encourage new employment opportunities in Scotland and other parts of the United Kingdom based upon the achievements of competitive industrial costs and practices.'
  It is always sad when Parliament fails to live up to a great occasion. With respect to the right hon. Member for Glasgow, Craigton (Mr. Millan), I rarely remember an opening speech in this sort of debate that fell as far short of what is expected at such a time. I hope that he will listen to the case that I have to make. Almost all of what he said has been said before and did not mean anything; when it did, he was telling only half the truth. That is no way to treat the House. Anyone from the town of Linwood who reads the debate will be greatly disappointed.
  Mr. Norman Buchan: Will the right hon. Gentleman give way?
  Mr. Deputy Speaker: Order. The hon. Gentleman is not giving way.
  Mr. Younger: The right hon. Gentleman is from the town of Linwood and, I know, will not agree with what I say. However, he has no right to prevent me from saying it.
  I start with what we can agree on. As my hon. Friend the Under-Secretary of State for Scotland responsible for industry indicated to the House on 11 February, we are deeply concerned about the loss of jobs in west central Scotland as an inevitable consequence of the Talbot Motor Company's decision to close its Linwood plant this year. Unemployment in Scotland already stands at 12.8 per cent. and in that area it is higher than the Scottish average. That in itself is a cause for concern before we even consider Linwood. The Linwood closure is bound to add substantially to the problem. I agree that it is a very serious event and cannot be understated. It is right that we should debate the matter today, and I am grateful to the Opposition for enabling us to do so.
  There is no concealing the fact that the closure is a crushing blow. It results from Talbot's reverses in an increasingly competitive car market. The company has had to regroup to save itself and to remain a significant force in United Kingdom car manufacturing. I am glad that it intends to remain at least a major manufacturing force in the United Kingdom. However, it causes everyone in Scotland great concern that the company is having to close its Scottish plant.
  The right hon. Gentleman, rather strangely, mentioned the fact that I was not in the House last Wednesday. He

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  might also have mentioned that I wrote to him personally the previous week to tell him that I might not be here. I have not had a reply to that message. It would be normal courtesy for an hon. Member to reply and say whether he had any objection. I hope that in future the right hon. Gentleman will find the time to do so.
  Mr. Millan: I was deeply suspicious about the right hon. Gentleman's excess of courtesy. He made sure that on Wednesday morning I was informed no less than three times that he would not be available for Scottish Question Time. Half an hour later, I discovered that the Linwood announcement was to be made.
  Mr. Younger: The right hon. Gentleman should look to his mail arrangements. The letter was written the previous week. If he had any objection, it is reasonable that even he should have replied. I was not here because I was conducting negotiations for the British fishing industry. I am doing the reverse today, if that is any consolation to him. At this moment I should be at an important meeting with leaders of the Scottish fishing industry. If the right hon. Gentleman was upset last week, I hope that he will be particularly grateful today, but I doubt it.
  Mr. Robert Hughes: I have been following the right hon. Gentleman's remarks carefully. Is he telling the House that the week before last he had information that on Wednesday of last week there would be an announcement about Talbot?
  Mr. Younger: I was not saying anything of the sort. The hon. Gentleman's right hon. Friend does not appear to be in close contact with him. I was telling his right hon. Friend that probably I should not be in the House on Wednesday because the fishing negotiations would still be going on. As it turned out, they were. I mention the matter only as an example of the right hon. Gentleman telling half the truth. It is not good enough to treat either me or the House in that way. I hope that he will try to do better in future.
  Our first reaction when the news came through that Talbot might decide to make this closure was to—
  Mr. Dick Douglas Mr. Dick Douglas (Dunfermline) rose—
  Mr. William Hamilton Mr. William Hamilton (Fife, Central) rose—
  Mr. Younger: Perhaps you will consider later, Mr. Deputy Speaker, whether the hon. Members for Dunfermline (Mr. Douglas) and for Fife, Central (Mr. Hamilton) might be called to speak. They seem to want to make a speech while in their seats.
  Our first reaction after that news was to think of whatever the Government could do to prevent the closure, to persuade the company to stay on by any means we could find. As a result, we have had numerous meetings with the company over the last few months. This is the answer to the right hon. Member for Craigton, who made out that we had seen the directors of PSA two days before the announcement, as if it were the first time that I had put those points to them. He was surprised that the announcement came two days later.
  We have been in constant touch with the company over many months on this matter. All the things that the right hon. Gentleman called on us to do have been done over and over again with the company. He must come to terms with that. I have had discussions with Mr. Turnbull, the British managing director, and with Mr. Parayre, as has
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  my right hon. Friend the Secretary of State for Industry. My hon. Friend the Minister with responsibility for industry in Scotland has met Mr. Turnbull and Mr. Parayre on several occasions. Our first aim was to try to secure the future of the Talbot operation in Scotland, despite the depressed state of the car industry throughout Europe and, indeed, throughout the world. I had hoped that PSA would develop new production capacity at Linwood, with Industry Act assistance. During our discussion with Mr. Turnbull of Talbot Motors on 15 January, we discussed the type and scale of assistance which would be available for a viable project at Linwood. However, at our most recent discussions on Monday 9 February with Mr. Parayre—chairman of Peugeot Citroen—and his colleagues, which again included Mr. Turnbull, we were given a further full and frank description of PSA's and Talbot's problems.
  At all those meetings we made it clear that the Government were prepared to make available for a viable investment project at Linwood the substantial scale of assistance which is available in special development areas, through regional development grants and selective financial assistance. It became clear, however, that there was no possibility of any project which showed signs of viability from the whole range of those which were examined—from manufacture of a new model through to manufacture and supply of motor components for the whole group. Indeed, the managing director of Talbot Motors has said publicly that Linwood would have continued to lose money even if the Government had funded 100 per cent. of the tooling and production of new models. The right hon. Gentleman slightly bowed to that view when he said that he thought that money was not the problem, so perhaps in that we are also at one.
  In the company's view, there was no prospect of profitability. Government assistance of any scale cannot conceal the fact that Talbot has too much productive capacity for its current and prospective markets.
  Mr. Allen Adams: The Minister has given the House considerable details about discussions with the company. Obviously, that sort of discussion did not take place the night before the Minister met hon. Members. However, Ministers told us the night before the announcement was made that they had no idea of the company's intention. The Minister used the words "No idea". Will the Minister now tell the House that he had some idea of that intention, because clearly he had?
  Mr. Younger: The hon. Member is referring to a different point, which I am happy to deal with. He is referring to whether it was on the night before the announcement that we already knew about the decision. I assure the hon. Member that we were assured at every one of the meetings with the company, at whatever level, including the last meeting, to which the hon. Member referred, that no final decision had been made. We repeatedly asked that question and we were repeatedly given that assurance. I can only take assurances that are given to me on these matters. Therefore, we did not know about the decision at that stage. We understood that the decision was being taken at a board meeting on the day after our meeting. I have no reason to doubt that that was so. We did not know about it at the time referred to by the hon. Member.
  Mr. Millan: Will the Minister tell the House when the Government were informed and when he first knew about the company's decision?
  Mr. Younger: That has already been said. The Government were informed on Wednesday morning, shortly before the press statement was made. On inquiring from the company why that was, we were told that it was anxious to see that its employees and local Members of Parliament were told before they heard it from any other source. That was understandable, and hon. Members might take that view if it suited them.
  I can imagine what Opposition Members would have said if just one of them had heard the news from someone else before the company had made its announcement. There would have been points of order, applications under Standing Order No. 9 and every sort of nonsense. That sort of humbug is not conducive to a sensible debate. I hope that we can get on to the sensible side of the debate.
  Mr. Buchan: The right hon. Gentleman has succeeded in making the situation worse. If he is saying that the morning after the decision on the Monday night, the company treated its employees with such contempt as to send out dismissal notices and then the Minister—not the organ grinder, but the monkey—came to the House on the Wednesday, not only to announce the decision but to defend it, that means that the employees did not react to the contempt with which they were treated by the company.
  Mr. Younger: I appreciate that the hon. Member feels strongly about this matter, but it does not add to the debate to speak in such terms.
  The hon. Member must bear in mind that three days are involved—Monday, Tuedsay and Wednesday. I have been trying to tell the House the truth to the best of my ability. The truth is sometimes rather lacking. I could say plenty of things that were not quite the truth. But I intend to tell the whole truth to the House. I believe that that is the way in which the people of Linwood would wish it to be done. I hope I shall be allowed to get through my speech and tell the truth. I do not intend to varnish over any of the difficulties.
  Mr. Millan: I do not want to return to the question of the Secretary of State's absence last Wednesday, but what he said earlier about writing to me was true. He did not add that on Wednesday morning, at about 10 o'clock, I received a telephone call from Brussels on behalf of the Secretary of State apologising for his absence that afternoon. I accepted that apology gratefully. However, during that telephone conversation there was mention only of the Secretary of State missing parliamentary questions, and no mention of Linwood.
  Mr. Younger: The right hon. Gentleman is unwise to keep up this peripheral issue in which no one is interested. I assure him that I asked one of my staff to ring him to tell him that. Neither I nor my staff knew that Peugeot-Citroen—
  Mr. Buchan: I knew at 9 o'clock.
  Mr. Younger: I have covered that point. I did not know at that time. If the hon. Gentleman opened his mail at 9 o'clock, he knew before I did. As I have explained, that is because the company took the view—one can agree or disagree with it—that its top priority was to see that its employees and the Members of Parliament representing
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  them knew first. Hon. Members may disagree with that, but that is what the company did. As I have no power or control over it—nor has the hon. Gentleman—that is what we must accept was its judgment on how to deal with the matter. I hope that I shall be acquitted of any discourtesy. I have no doubt that the hon. Gentleman meant to apologise for complaining about something about which he was properly informed but omitted to do so.
  In its press statement last Wednesday, the company outlined the reasoning which led it to table its decision. It acknowledged—as we must all acknowledge—the considerable achievement of PSA and its work force at Linwood, and the marked improvement in labour relations and productivity since PSA took over in 1978.
  Days lost through disputes dropped dramatically. As the company has attempted to slim down its operations and increase production standards, productivity has improved by no less than 20 per cent. in the last year. However, the company has had to reckon with particularly severe competition in the market place which increased as the total market for new cars shrunk. It sustained very serious financial losses in both 1979 and 1980, a large proportion of which were ascribed to Linwood.
  To go on as it was would not have saved Linwood but merely have put at risk the whole of the company's manufacturing activity throughout the United Kingdom. We should, therefore, be under no illusions about the reasons for the decision that the company has taken to close Linwood. It has nothing to do with the branch plant of a multinational acting capriciously or selfishly. It is for the company to represent its own case, but it is a firmly commercial case.
  The facts are, first, that the Talbot operation at Linwood has become increasingly unprofitable. Secondly, it has models which are becoming rapidly outdated. Thirdly, it can no longer be sustained by the group because of trading losses and the high cost of new investment which everyone knows is essential to keep the factory going. Fourthly, there is no prospect of a return on investment in a new model in current market conditions.
  Dr. Jeremy Bray: In the discussions that the Secretary of State and his colleagues had with Peugeot-Citroen did they ask at what exchange rate Linwood would become profitable? If the right hon. Gentleman did ask, what answer did he receive? If he did not ask, why did he not ask?
  Mr. Younger: The subject of exchange rates came up in various conversations, but it was clear that the size of the gap was so great that no one factor alone could make a major difference to the figures.
  I turn to the timing of the closure.
  Dr. Bray: Will the right hon. Gentleman give way?
  Mr. Younger: I must not delay the House too long.
  Dr. Bray: It is all very well for the Secretary of State to say that the gap was too large, but the Government have said that the deterioration in competitiveness was 50 per cent. in the last two years. Was the margin larger or smaller than that, and by how much?
  Mr. Younger: I am not clear what the hon. Gentleman means by "larger or smaller than". We can pursue that later. With respect to the hon. Gentleman, I think that the gap is so large that no exchange rate figure could bridge

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  it. He can go into the matter, but that is my view and I am certain that it is correct. I am trying to be as open with the House as I can.
  The timing of the closure was discussed thoroughly with representatives of Peugeot-Citroen and Talbot. Delay would certainly provide a measure of interim relief for the area, but as it is the plant has been working at only about 30 per cent. of its capacity. Since the autumn it has been supported by the temporary short-time working compensation scheme.
  Further delay could be justified only if there was a real prospect of ultimate viability. The company does not see such a prospect, so it could be achieved only at the cost of continuing losses on producing cars which are now suffering a sharp drop in market demand. It could not be financed by the company itself. There seems little point in continuing to produce cars at the taxpayer's expense with declining sales unless there is a prospect of a viable long-term operation.
  What about the right hon. Gentleman's argument about the declaration of intent about which he made much in his speech? He was not wholly open with the House about it. At the time of the PSA takeover the right hon. Gentleman and his hon. Friends were heavily involved in negotiations with PSA. They agreed the declaration of intent which, however one reads it, contains no cast-iron guarantee of the continuation of manufacturing operations in the United Kingdom, as the right hon. Gentleman claimed.
  In arguing that we should have made PSA live by the declaration, the right hon. Gentleman and his hon. Friends make out the document to be something that it never was. For it to be the kind of binding watertight agreement that they would like now, one would have to overlook the wording in the agreement which they agreed and signed. I shall quote from two short passages. They sound good until one sees the small print. Paragraph 4 reads:
  "To continue and strengthen [Talbot's] programme of modernisation of facilities and investment in order to ensure that [Talbot] grows and prospers as part of the PSA Group and thus specifically to provide to the extent consistent with prevailing economic conditions, continued employment at all [Talbot's] facilities".
  That contains a perfect let-out. Most of the wording is good, but there is a let-out.
  The right hon. Gentleman must have read the agreement before he signed it. Did he think that it would get through if it were subject to the strong light of scrutiny? Of course he must have done. But he was wrong.
  Paragraph 5 of the agreement reads:
  "PSA will also ensure that … future model programmes take particular account of the need to replace, as soon as PSA and [Talbot] consider feasible, the Avenger and Sunbeam cars at Linwood with models which offer the clear prospect of using the capacity of this facility to the fullest possible extent."
  Again, that sounds marvellous, but the qualifying words in the middle enable a company which finds it impossibly expensive or difficult, or if there is no market for the product, to say that the agreement does not constitute the cast-iron guarantee that the right hon. Gentleman would like.
  I do not criticise the efforts that right hon. Gentlemen made to tie the matter up. However, to come back now, having signed that document, and make out that it is castiron and copper-bottomed is not being straight with the House. It is also sheer cruelty to make those affected feel that something could be done when it never could.
  Mr. Buchan: The Secretary of State has made great play of the loopholes in the declaration of intent. He said that paragraph 4 was qualified by the phrase
  "to the extent consistent with prevailing economic conditions."
  Who is creating those prevailing economic conditions?
  Mr. Younger: The hon. Gentleman knows that the right hon. Member for Craigton claimed that guarantees were cast-iron.
  Mr. Buchan: Answer the question.
  Mr. Younger: My answer is simple. Prevailing economic conditions at all times affect everything.
  The right hon. Member for Chesterfield (Mr. Varley), as Secretary of State for Industry, tried to defend the fact that Chrysler would not introduce a small light car that it had undertaken to introduce. At that time the right hon. Gentleman said:
  "For sound commercial reasons Chrysler will not introduce a new small light car next year at the company's Linwood plant as originally envisaged".—[Official Report, 13 June 1978; Vol. 951, c. 391.]
  That is exactly the same situation. The company had undertaken a project that could not proceed because of commercial considerations. The right hon. Members for Chesterfield and for Craigton meekly bowed to that; and they were right to do so. However, when such overwhelming commercial considerations have been presented, for the right hon. Gentleman to give the impression that he would have done otherwise is nothing but sheer humbug. He should be ashamed of the fact that he expects us to swallow such rubbish.
  We are under no illusions about the impact on the immediate area of Linwood. The loss of 4,800 jobs cannot occur without creating major economic and social problems. I am now considering urgently in advance of the shutdown of Linwood what measures we can realistically take to generate new employment. I have called urgent discussions with the local authorities, the STUC, the CBI and others concerned, for Friday 20 February in Glasgow.
  I would here refer to the ad hoc committee, organised at the initiative of convenor Charles O'Halloran, of Strathclyde regional council, which has been pressing for a meeting with the PSA management so that it can argue for a reversal of the decision to close Linwood or at least postponement of the closure. I warmly welcome convenor O'Halloran's initiative. What he did was extremely helpful and sensible. He also began the meeting by making clear that the objective of the ad hoc committee was entirely constructive, to see what can be done in the future. It was not concerned with the sterile and useless business of trying to apportion blame. That is the right approach, as most people in the West of Scotland would agree.
  I have been watching the efforts of Mr. O'Halloran and his committee to try to get a meeting with PSA. I have today used my good offices with Mr. George Turnbull, chairman of Talbot Motors. He has drawn attention to the telex that Mr. Parayre sent yesterday to Strathclyde regional council indicating that he thought that such a meeting would serve only to raise false hopes that would later be let down. Mr. Turnbull is, however, I am glad to say, ready to meet representatives of the ad hoc committee to enlarge upon the reasons for the company's decision and to give details of the company's closure plans. He has emphasised that in his view there is no question of reversing or delaying the decision to close the plant. I think, however, that this is a useful and constructive offer.

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  I hope that it will be taken up by the ad hoc committee and that a useful exchange of views will take place with Mr. Turnbull.
  We cannot expect to get simple, straightforward, off-the-cuff, solutions. It would do no one a service to try to pretend otherwise. We have to mobilise every resource possible to generate more jobs in the area to replace those that have been lost. This is bound to be a difficult task.
  Mr. William McKelvey Mr. William McKelvey (Kilmarnock) rose—
  Mr. Younger: I think that I should press on with my speech. This is a short debate and other hon. Members wish to speak. I have given way too often already. I agree with the right hon. Gentleman that simply to pour in public money is not the answer. We shall take every opportunity to attract inward investment to the area and at the same time encourage the establishment and growth of indigenous companies. No doubt, that will be difficult, but it is not a task that we can shirk. Our aim must be to secure real, long-term industrial growth for the area. We shall call upon all resources from the public and private sectors to do this.
  The last thing that should be thought is that the attraction of new jobs, even at this time, is so hopeless that it will not work and can never produce results. Even at this time of fairly widespread redundancies and closures, caused by the current recession, it is only too easy to overlook the achievements being made in securing new jobs and employment. [HON. MEMBERS: Where?"]
  We have had a number of successes in new enterprises coming to Scotland. Nippon Electric is perhaps the most significant. There are also important expansions, including Sunbeam Electric at East Kilbride, resulting in East Kilbride being the sole manufacturing base for Sunbeam products in Europe. This means 300 new jobs within the next year. Dawson International Limited has recently created 200 new jobs at Ballantyne Sportswear, at Bonnyrigg. Additional jobs are expected in the near future both at that plant and at McKinnon of Scotland at Coatbridge, as the group continues to be one of the United Kingdom's most successful exporters.
  We also have some other major orders coming to Scotland. British Aerospace at Prestwick has an order for 14 aircraft; Kestrel Marine of Dundee, an order for £8 million contract work in the North Sea; and John Brown Engineering, orders for more than £55 million worth of gas turbines in various parts of the Middle and Far East. No less significant is the recent decision of Digital Limited to buy its new factory in Ayr and to establish itself firmly as part of Scotland's growing electronics industry. I am delighted that my hon. Friend the Minister of State, who was instrumental in bringing about that new factory, is present to hear that announcement.
  In case Opposition Members think that this is all stuff that they have already heard, I assure them that this is not by any means the end of the story. There will be an announcement tomorrow by a successful United Kingdom company of the immediate implementation of a multimillion pound manfacturing project for East Scotland to produce a unique high technology consumer electronic product. This project is expected to create about 1,000 new jobs over the next few years. I list these in order to say to those who may be affected by this truly difficult situation in the West of Scotland that the alternative of
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  looking for effective, high technology new jobs is not simply one on paper or in the minds of people who think up these schemes. It is working; it is happening. There are physical, real jobs being provided even at this time to prove it.
  I have taken longer than I wished, due to the many interruptions. I finish by saying that I agree with the right hon. Gentleman that this is a grim situation. The substance of the argument that he has put which is in tune with the motion that he and his right hon and hon. Friends have tabled, does not begin to stand up to scrutiny. The right hon. Gentleman made out that the undertakings given by PSA originally had not been kept. He stated that two or three times. The right hon. Gentleman failed to point out that the undertakings were couched in such vague terms as to be undertakings not to be kept in any case.
  Secondly, he made out that a decision had in some way been reached without any Government efforts to halt it or alter it or to persuade the company to stay. I think that I have destroyed that argument totally. Lastly, the right hon. Gentleman admitted that additional money was not the answer. At no point in his remarks did he give any indication of what he would have been able to do to change anything, to reverse anything, or to persuade the company to act otherwise.
  The right hon. Gentleman's effort this afternoon to extract political capital out of a disastrous situation in the West of Scotland has fallen flat on its face. I hope that the House will reject the motion and accept the amendment.
  Several Hon. Members rose—
  Mr. Deputy Speaker: Before calling the nexat speaker, I remind the House that a large number of right hon. and hon. Gentlemen wish to speak in the debate, so brief contributions would be in order. May I also say that interjections and interruptions tend to prolong speeches?
  5.47 pm
  Mr. Norman Buchan: We have had a long and sustained exercise in political hypocrisy this afternoon. The speech of the Secretary of State was one without shame, without remorse and without solutions. I do not believe that the right hon. Gentleman has either begun to understand the enormity of his shameful capitulation last week or to understand the deep sense of anger and bitterness that exists in the West of Scotland today. He does not understand that this matter is not seen in the West of Scotland only as a single factory closure. It is seen as a denial of the regional policies operated by Governments of both parties over the past two decades. The factory itself first came to Scotland as a result of the efforts of the Harold Macmillan Conservative Government—a more humane and compassionate group of Tories then, compared with the new brutalism seen from the present Tory Party.
  The anger and the alarm expressed in the West of Scotland can only be reinforced by the kind of speech that the right hon. Gentleman made. The right hon. Gentleman says that we should not apportion blame. The point of apportioning blame is to find some solutions for the future. What happened last week was that on Monday— the right hon. Gentleman claims—the Government put the full argument to the company. He said that they argued the case and offered inducements. We were told that the company's representatives were going to consult the board. Either the company was lying to the Government

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  or the Government are lying to us. On Tuesday morning letters were posted from Coventry. Either the company listened to the arguments and treated them with complete contempt or the Government are taking part in the lying. There is no other option. Until I encountered this Tory Government I had thought it inconceivable that a British Government should be treated with such contempt. The Government let the company go, but the next morning—before the wheels had stopped turning—letters were sent without demur or remorse.
  Events the following day were even more serious. No resistance had been offered. Last Wednesday, the UnderSecretary's statement did not say that the company had conned us, and had lied to us and that we would fight them. It said that the Government endorsed, supported and justified the company's action. The Government were given the Anglo Saxon symbol of a two-fingered salute with a French accent and they accepted it. That is where the blame lies.
  We have been told that it is too bad that the factory is to close. We have been told that urgent investigations will take place, that a working party is to be set up and that people will be called together to deal with the problem. Since the Conservative Party came into office we have heard that almost every week. My hon. Friend the Member for Kilmarnock (Mr. McKelvey) attempted to intervene because he wanted to tell the House that the same words and phrases, in the same order, had been uttered about Massey Ferguson. Nothing happened. We hear—as Hamlet said—"Words, words, words" but see no action. That is why there is alarm in the West of Scotland.
  I have never seen a Government so happy about scoring debating points on an issue that involves 5,000 people. They said that the declaration of intent could not be used because qualifying phrases were involved such as
  "to the extent consistent with prevailing economic conditions."
  I asked the Secretary of State who was responsible for the prevailing economic conditions. I received no answer. The right hon. Gentleman may be right when he says that it is only the qualifying phrase that prevents the declaration of intent from being implemented. If so, it is the Government's economic policies that are to blame.
  Mr. Younger: Rubbish.
  Mr. Buchan: The right hon. Gentleman cannot have it both ways. If he wishes to argue that the qualifying phrase was the only reason why the declaration of intent was not implemented, he should recognise that that phrase means it was dependent on the success of the Government's economic policies. On his own admission, the only conclusion is that the Government's economic policies have failed.
  Interventions have been made by some of my hon. Friends who have sought only to hear the facts. As time is short, I shall turn briefly to the figures. At the end of his speech the right hon. Gentleman triumphantly told us that, after a time, a firm would provide 1,000 jobs. He said that on the very day that he has endorsed the sacking of 4,800 employees. Each time a factory closes— [Interruption.] I wish that those on the Government Front Bench would face their responsibilities. Right hon. and hon. Members are behaving like sixth formers who argue with their teachers. We hear hyprocrisy, but we do not get any action. [Interruption.]
  Mr. Deputy Speaker: Order. I ask the House to give the hon. Gentleman a hearing.
  Mr. Buchan: Every week we hear that thousands of jobs have been lost. We are told that a group of 10 or 20 people will have jobs here and there. But there are more than 250,000 unemployed people in Scotland. As a result of this closure. 40 per cent. of males in Linwood will be unemployed. That is a higher percentage than for any other town in the United Kingdom, with the possible exception of Strabane, in Northern Ireland. Indeed, the figures are worse than those for general unemployment in 1931–32. Of insured workers—those liable for unemployment benefit—in Johnstone, 30 per cent. were unemployed in November 1931. That figure does not include the non-insured workers. Therefore, the real figure was slightly below 20 per cent. That occurred at the height of the devastation that took place in the 1930s. By June, that figure will be doubled in Linwood. That is the size of the enormity, yet Conservative Members wish to score debating points.
  We are sick and tired of the Government's remarks. We are told that there is no alternative. Week after week the Prime Minister tells us that there is no alternative. It is nonsense to argue that human beings who can work have no alternative despite the fact that capital and machinery are available. There is an alternative—namely, to let the people produce. The Government's figure of 4,800 will be doubled directly and trebled indirectly. The closure will mean that 10,000 more people will become unemployed in Scotland. Indeed, in the next two years 30,000 or more will become unemployed in the United Kingdom as a result of the closure. It will mean a £0·25 billion increase in the public sector borrowing requirement.
  If the Government fall back on deflation in order to solve the crisis, the position will worsen. That is the size of the problem, yet the Government say there is no option. However, there is a track that can produce three different models. The under-developed countries have urgent requirements. Incidentally, my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) asked me to apologise on his behalf as he has had to leave the Chamber, but he will return later.
  One option would have been to tell the company that the Government were willing to set up a holding company. The Government have said that they offered finance. However, the amount offered was the same as that offered to any company in the same situation. It was composed of the normal regional grants. An exceptional offer has not been made. For example, the Government have not offered to take over the factory or to run it in co-operation with Peugeot.
  Is there any reason why a light pick-up truck could not be developed at Linwood? It has the skills, the research and the ability to produce such a vehicle. Is there any reason why we could not have picked up the problem left by the loss of the MG? Is there any reason why Linwood could not have been the site for the production of cars for the thousands of disabled people? There is an urgent need for such cars. To say that there are no options is to say that human progress has come to an end and that regional policy has no meaning. If it is argued that regional policy can be allowed to go, whole tracts of the British Isles will be condemned and will become permanent industrial wastelands.
  If the Government show no sign of shame or remorse, they at least show signs of fear. The Leader of the House has called for a U-turn. The former Leader of the House, who was the only humane Tory in the Cabinet, was sacked

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  for his humanity. This morning, that right hon. Gentleman called for a U-turn. In addition, the people of Scotland are crying out loudly for a U-turn.
  The Government will have a major fight on their hands. There is a conparison here with Upper Clyde Shipbuilders, and we shall fight the same sort of battle. The lads in the factory have pledged themselves to that fight and we also pledge ourselves to that fight. The first answer to this shameful Government will be given on Saturday at the unemployment demonstration, when the Talbot workers will take a proud and honoured place in the march, as we marched before, over Upper Clyde Shipbuilders. In case the Government have short memories, that was the watershed, the catalyst, that led to the destruction of the Government of the right hon. Member for Sidcup (Mr. Heath). This, too, will be the sort of watershed that will send this most shameful of all Governments into oblivion.
  6 pm
  Mr. Allan Stewart: The hon. Member for Renfrewshire, West (Mr. Buchan) has spoken with passion and conviction and the whole House will pay tribute to the efforts that he has made in relation to Linwood over a long period. There have been thousands of words written about Linwood, but the hon. Gentleman put the matter in a nutshell last Wednesday when he said:
  "Is the Minister aware that for 16 years I have fought to preserve that factory".—[Official Report, 1 February 1981; Vol. 998, c. 867]
  Mr. Buchan: I shall not stop fighting.
  Mr. Stewart: That summarises the whole problem. From the start, Linwood has faced a battle for survival. Before I develop that theme I should like to say a brief word about the demeaning exhibition earlier concerning the Secretary of State's not being present in the House last Wednesday.
  The private notice question was accepted in my name and it seemed right to put the question to the Secretary of State for Scotland, given that responsibility for dealing with the situation at Linwood is primarily a Scottish Office function. My hon. Friend the Under-Secretary of State for Scotland answered the question fully and clearly. I have no fishing interests in my constituency, but I believe that it would have been completely wrong for the Secretary of State for Scotland to have left the negotiations at such a critical time.
  Mr. Harry Ewing: Does the hon. Gentleman agree that it should be placed on record that present at those fisheries negotiations were the Minister of Agriculture, Fisheries and Food—a more senior Minister than the Secretary of State for Scotland—and the Minister of State, Ministry of Agriculture, Fisheries and Food, who is also a Scottish Member of Parliament and knows more about the Scottish fishing industry than the Secretary of State for Scotland is ever likely to know? In those circumstances, would it not have been possible for the Secretary of State to come back?
  Mr. Stewart: I clearly made a grave error of judgment in giving way to the hon. Gentleman, who is continuing to nitpick on an issue that is not central to this debate. He is wasting the time of the House. We should be discussing
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  the real issues about Linwood, which is what I now propose to do. I want to be positive. Of course, it is easy to be wise after the event.
  When we look back at Linwood we shall not talk about what management did or did not do, or what the work force did or did not do. We shall concentrate on the role of politicians—not evil politicians, not stupid politicians— [Interruption.] We shall concentrate on the role of intelligent, well-intentioned politicians—Tory and Labour. It will be said that the tragedy of Linwood is a cautionary tale for politicians. There is no doubt that Rootes was pushed into Linwood against the company's better judgment. The Scotsman summarised the position last week. It said:
  "The closure decision is no less awful because it has been so clearly signalled for such a long time. It was the plant which bankrupted Rootes and forced them to sell out to Chrysler only four years after the Scottish operation was launched…. The plant finished Chrysler in the United Kingdom too."
  We have to look back and ask why Linwood has never been profitable. Labour Members blame current Government policies, but that plant has never been profitable under three owners and six Prime Ministers. The problems are more fundamental and complex. It is too easy to say that the problem of Linwood is that it is far away from the West Midlands. We know that car plants prosper in the South of America as well as in Detroit. The theory of Linwood never worked. It was thought that it would act as a catalyst and generate component manufacture in the area, but at present Linwood obtains only 3 per cent. of its components from local suppliers.
  Dr. Bray Dr. Bray rose—
  Mr. Stewart: No, I shall not give way to the hon. Gentleman. I have already given way once.
  Secondly, what about industrial relations? In the early years, Linwood was a byword for bad industrial relations. It has a strike record that has bedevilled the factory, its products and Scotland. Perhaps bad industrial relations were not so much a cause as a symptom of the underlying problem. The people felt insecure because there was continuing a question-mark over their jobs. I should like to pay tribute to the industrial relations and to the work force. The company statement said that the work force at Linwood had responded very well to the need to improve productivity and that the company in no way blamed it or the trade unions for the decision to close the plant.
  The Transport and General Workers Union convenor, Jimmy Livingstone, responded to this tragic news by saying:
  "We intend working normally and will show them what throughput is. No one is going to point a finger at us. No one is going to say we are the wreckers."
  The problem with Linwood was that it was never really one thing or the other. In the car manufacturing industry a company either has to be in the volume business or it has to be a small specialist manufacturer. Linwood was never successfully either. What can now be done positively and realistically? Much has been said in this debate and outside the House. The right hon. Member for Bristol, South-East (Mr. Benn) is not with us this afternoon, but he has talked to the press. He finds the decision unacceptable, and he said that if he had been the boss he would have called a conference of all interested parties. So much for the Socialist millenium. The hon. Member for Glasgow, Cathcart (Mr. Maxton), who is not present either, has said that the Labour Party should commit itself to fining the

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  company. I hope that will be denied by the Opposition Front Bench because nothing could be worse than that for the future of the company and its workers.
  The solution of the hon. Member for Paisley (Mr. Adams) is that imports should be stopped at the docks. I wish him well at Southampton docks. I suspect that the only people there would be the hon. Gentleman, the television cameras and the pressmen. I do not believe that the workers are so silly as to think that such solutions solve anything.
  Mr. Buchan: Will the hon. Member give way?
  Mr. Stewart: I have already given way, and there are many hon. Members who want to speak in the debate.
  Mr. Deputy Speaker: I said a few minutes ago that interruptions prolong speeches.
  Mr. Stewart: Thank you, Mr. Deputy Speaker. I have a great respect for the hon. Member for Renfrewshire, West but he has already had the opportunity to speak in the debate.
  What can we do constructively? The unions are looking at the costings and the economics of the plant. The Government should take those costings very seriously, not because they will lead to the decision being reversed but because we need to know all we can about the costings of the plant when we look to its use in the future.
  There has been some mention of Nissan-Datsun. I accept that it is almost certainly not a starter for the Linwood site. The last thing we want in the West of Scotland is for another factory to be pushed into a location that is not satisfactory for it. We do not want a repeat performance of that kind of thing. We want companies to come to the West of Scotland because they honestly believe that that is the best place for them, and because they honestly believe that they can stay there on a commercial basis and make profits.
  There are suitable sites in the West of Scotland. I draw the attention of the Front Bench in particular to Hunterston, which seems on the face of it to be a site of sufficient size, at the oil terminal, with its connections to the steel industry.
  I welcome my right hon. Friend's initiative in having a meeting on Friday of all interested parties. He will get a constructive response from bodies such as Strathclyde region and Renfrew district. We have had successes and are having successes in the West of Scotland, as elsewhere.
  It has been suggested that we need some kind of new task force to deal with the problem at Linwood. I am a little hesitant about creating new structures. Perhaps the best thing would be to say to the Scottish Development Agency "You buy the factory and see what you can do to turn it into a set of productive units".
  There has also been mention of an enterprise zone for the area. I do not know where that is necessarily appropriate for Linwood. I am not in a position to make that judgment. But I hope that my hon. Friends in the Scottish Office will explore that suggestion.
  We need to get the message across to incoming industrialists, whether they be from south of the border or abroad, about the positive attitude of the work force at Linwood, and the key fact that there is a skilled and responsible work force there.
  Having said that, I do not believe—
  Mr. Dennis Canavan Mr. Dennis Canavan (West Stirlingshire)rose—
  Mr. Stewart: —that the House for one moment should accept the Opposition motion. All the talk by Labour Members about the agreement is, frankly, a con. I was telling people privately months ago that that agreement was full of loopholes and almost certainly meant nothing. My hon. Friend the Member for Fife, East (Mr. Henderson), with whom I share an office, will confirm that.
  I reject the motion also because I know something of the efforts that Ministers have made in regard to Linwood. There have been formal and informal meetings weekly—almost daily at times—with Ministers, and I know that they have done everything possible. The motion is totally inaccurate and is a distortion of the truth. Even though Labour Members will vote for it tonight, in their heart of hearts they know that they will be voting for a motion that contains a travesty of the facts.
  6.14 pm
  Mr. Russell Johnston: It is, indeed, a very sad day. The right hon. Member for Glasgow, Craigton (Mr. Millan), who made an extremely passionate and coherent speech, was absolutely right to emphasise the shock, the horror and the bitterness felt in the West of Scotland when the closure was announced. It has emerged from what several hon. Members have said that this bitterness is made worse by a feeing of helplessness and impotence and a complete inability to know what on earth we can do about the position.
  I shall be brief, because I know that especially those hon. Members who represent constituencies which are directly affected will wish to contribute to the debate, but I want to pose several questions to the Secretary of State. I do not argue with him that this is other than a complex matter, and I do not think that it is possible to have simple solutions, but there are certain questions which it is reasonable and fair to put.
  Much reference has been made to the statement of intent, and we had the exchange between the Secretary of State and the right hon. Member for Craigton, the latter stressing the statement and the Secretary of State stressing the loopholes. Are guarantees of this sort worth the paper that they are written on? When the Government, with the best of intentions, are dealing with a multinational company, is there any point in having statements of intent, financial or otherwise?
  In this connection, one or two hon. Members asked what was to happen to the loan of £25 million. Somehow or other, it seems to have got lost, and we do not yet know whether it is coming back.
  What is the Government's attitude generally to intervention? It is becoming less and less clear. As the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher) said when he made his statement on Wednesday, it is not good enough that this should be a commercial decision. The Secretary of State repeated that today. But whenever the Government intervene in any way with what a company is doing, the decision that the company makes becomes less than commercial.
  The whole of regional policy is based on interfering with pure commerce. That is basically what the mixed economy is supposed to be about. It means that Governments take social responsibility. Regional policy is

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  about social responsibility. The creation of unemployment figures on the scale that will prevail at Linwood demands definite intervention of some kind.
  The Secretary of State said, in an intervention, that during his series of meetings, together with his hon. Friend, with representatives of PSA, interest rates and the strength of the pound were mentioned. There was also reference to worker directors, and this was referred to by the right hon. Member for Craigton in his speech as a significant factor. What weight would the Minister give to the effect of interest rates and the strength of the pound in leading us to the present position? This is, after all, a central part of Government policy. The Government are responsible for the strength of the pound and for the level of interest rates.
  What is the future of motor car manufacturing in Scotland? Is there any future for it? The Secretary of State at one point during his speech said that he would be trying for Datsun in competition with others concerned with other areas of the United Kingdom. This may be, in a sense, a naive question, but why is Datsun a runner? It starts with a green field site, whereas an established plant, purchased only two years ago, and which has demonstrated a considerable capacity to improve productivity and to have good industrial relations, is not in the some position. Why is Datsun a runner, and why is PSA, in the Government's judgment and in that of everybody else, not a runner?
  We know that British manufactured cars have been steadily losing their share of the market. The market itself has been shrinking and there were 200,000 fewer registrations last year. That is related to a degree to productivity levels. There are 30 cars produced per man in Japan, 15 in Germany and about seven in the United Kingdom? Is there nothing that can be done about that? Are the Government saying that a plant in which PSA had the confidence to invest only two years ago is to be tossed onto the scrap heap? I find that extremely difficult to accept. What does the Secretary of State think is the future? Is there any future for the motor car industry in Scotland?
  What is the future of regional policy in Scotland? This has, as the Secretary of State and the hon. Member for Renfrewshire, West (Mr. Buchan) said, a profound effect on regional policy. The number of jobs affected is huge. It is an area that is already suffering gravely from unemployment. The right hon. Member for Craigton said that we want a delay in implementation at the very least. Why not?
  I turn to what I consider to be the most grave and serious item. The Secretary of State indicated during the long series of interchanges, when he was asked when he found out, when he knew and when he was told, that he had been in discussion for a long time and that the writing was on the wall for a long time. If that was the position, what was done to prepare for it? If the event was unstoppable, there should have been some orderly transition to prevent the flooding on to the streets of thousands of men with nothing to do. This is an enormous waste of resources. I beg the Government to think more about what they are doing.
  6.22 pm
  Mr. Michael Ancram: I hope that the hon. Member for Inverness (Mr. Johnson) will forgive me if I do not take up his remarks. I shall follow your
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  advice on brevity, Mr. Deputy Speaker, and make only a few comments, I hope that it has become evident during the debate that there is not a monopoly of dismay in any one part of the House. The hon. Member for Renfrewshire, West (Mr,. Buchan) and my hon. Friend the Member for Renfrewshire, East (Mr. Stewart) have expressed the deep anxiety that is felt by those most closely involved in the closure, but there are implications for the whole of Scotland that the Government should consider seriously.
  Linwood was car manufacturing in Scotland. Its closure removes Scotland from the league of car manufacturers. The implications that flow from that are worthy of consideration. First, the closure highlights the even greater importance of seeking to retain the British Leyland truck and tractor manufacturing capacity at Bathgate.
  Secondly, the closure must give a greater incentive to the Government as a whole—by that I do not mean the Scottish Office in competition against the Welsh Office and other Departments—in seeking to persuade NissanDatsun of the advantages of setting up in Scotland. I accept, as did my hon. Friend the Member for Renfrewshire, East, that is looking for a green field site and that its interest in Linwood is at best remote. However, I am sure that my right hon. Friend the Secretary of State will agree that there are many such sites in Scotland. Even if Linwood closes, a pool of experienced and skilled labour will be available that would be able to retain a viable Scottish contribution to car manufacturing. I hope that the Government will respond to that challenge.
  Thirdly, there is the lesson of Linwood, which was referred to by my hon. Friend the Member for Renfrewshire, East. It is a lesson that should not be lost. The mistakes of the past should not be repeated. There is a great distinction—it is one that the right hon. Member for Glasgow, Craigton (Mr. Millan) seemed unable to grasp—between directing industry to a site and attracting it to a site. Directing, whether by Government edict or by financial inducement, often means building a house on sand. As we know, if a house is built on sand and the sand starts to shift, the house will collapse however often it is propped up. That, in a tragic way, has been the lesson of Linwood.
  Attraction depends on a suitable environment, adequate facilies, communications, and available skilled labour of which industry itself will want to take advantage voluntarily. The Government will be able to show NissanDatsun the sites in Scotland that fulfil those criteria.
  More importantly, the Government have a role to play at Linwood. It is a ready-made industrial site, with reasonable communications. Over the past few years it has had a provenly reliable pool of skilled labour. It is an ideal site for firms wishing to set up a European base. If some changes or some redevelopment is needed, that is precisely the type of function that the Scottish Development Association can and should carry out, even if a little public money is involved in so doing. In many ways that would be more effective than some of the gardening operations that it seems to be carrying out in Scotland.
  Sadly, but I think realistically, I cannot see that Linwood in its present form can be retained. To try to do so will in many ways merely prolong the agony for those who work there. Political parties, finance, local government, management and unions in Scotland are faced with the urgent need to find new and viable jobs by

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  persuading industry to come to the area. It is for that reason that I find the motion and the attitude of Labour Members depressing.
  We Scots are too often known for our ability to beat our breasts and for the way in which we like to indulge in recriminations. I hope that Labour Members will agree that in the face of what is happening at Linwood there is no place for that type of behaviour.
  Especially at the meeting on Friday, which I welcome, we must together put forward the brightest and most attractive face possible to those whom we seek to attract to the area. I believe that the attractions are there. We need the mutual will. If ever there was a time to forget the past and to think of the future, surely that time is now. If ever there was a time to avoid industrial disruption and action and to show the potential stability of the work force in Scotland, I believe that that time is now. I say that with a good deal of seriousness, in view of some of the actions that have been predicted as a result of the closure. If ever there has been a time to work together in co-operation towards a mutually desired end, rather than in opposition, I believe that that time is now.
  Talbot, Linwood is, sadly, dead and gone. I believe that from the ashes a phoenix can arise to take its place. It is better to look for new viable jobs than continue with the lame duck that has hirpled so tragically for so many years in the past. The goal of all hon. Members should be to show for once, as Scots politicians, that we can work together for the mutual benefit of Scotland.
  6.28 pm
  Mr. David Lambie: I am grateful to you, Mr. Deputy Speaker, for calling me to participate in the debate. My constituency is part of the district of Cunninghame, which adjoins the area of the Renfrew district council and extends nearly to the boundaries of Linwood. Many of those who work at Linwood come from my constituency, from the towns of Dairy, Kilbirnie and Beith, from as far west as Ardrossan, Saltcoats and the Slevenston area in the northern part of Ayr and from Irvine in my constituency.
  One of the ironies of the decision to close Linwood is that those of my constituents who were declared redundant when the Glengamock steelworks open hearth furnaces closed down, who were grateful to have the opportunity of employment at Linwood, are to be declared redundant for the second time.
  I am making a point that has often been made during the debate. We are dealing not with the death of Linwood but with the death of the surrounding area, the industrial death of the West of Scotland and Strathclyde in particular. It is not only the death of the town of Linwood, but the final nail in the coffin of my area of the Garnock Valley. Many of our hopes lay in maintaining the work force at Linwood until the other initiatives operating in the Garnock Valley came to fruition and increased employment.
  When one talks about unemployment and losing 4,800 jobs, and with the percentages in millions, one sometimes forgets that the man who is unemployed is 100 per cent. unemployed. He is not just a statistic. We have about 2½ million unemployed in the United Kingdom. We have 282,000 unemployed in Scotland. Those figures mean very little to hon. Members who come from the prosperous South and south-eastern parts of England. They talk about percentages. The percentage unemployment rate in
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  Scotland is 12·8 percent. In Strathclyde it is 17· percent. In my constituency in Central Ayrshire and in the district of Cunninghame the unemployment rate is 20·6 per cent., and that is before the effects of Linwood.
  Looking at that another way, what do these figures mean to individuals? I put that point especially to hon. Members who represent constituencies not yet affected by unemployment on the same scale as we are affected in west central Scotland. In the United Kingdom one person in every 10 is unemployed. In Scotland, one person in every seven is unemployed. In Strathclyde, one person in six is unemployed. In Cunninghame district, which used to be a prosperous district, one person in five is now unemployed. One person in four of the male population in the Cunninghame district adjoining Linwood, is unemployed. In the Garnock Valley, one in three males is unemployed. I walk down the main street of Kilbirnie on Saturday morning and see the advertisement for the unemployment demonstration in Glasgow. It is not necessary to tell the population about it. Every third male one meets on the main street of Kilbirnie is unemployed. The Minister who has industrial responsibilities knows that, because he has been there and he has often heard me saying that. We are facing not just the demise of Linwood, but the end of industrial Scotland—to coin the new mod phrase, the deindustrialisation of west central Scotland.
  We are seeing the demise not only of the new industries such as Linwood, but the old industries. New industries, such as Massey-Ferguson at Kilmarnock, Monsanto and Skefco,at Irvine, and the ICI nylon plant at Ardeer—all modern plants built two or three years ago—are closing. We are seeing the complete deindustrialisation of the whole of west central Scotland.
  The Secretary of State has said clearly today that he will do something. I have warned the Renfrew district councillors and the shop stewards at Linwood not to be taken in by these initiatives, because we have seen them all before. If any Member of Parliament has seen initiatives, it is myself. My God, I have seen the initiatives. But, we still have those rates of unemployment. The Secretary of State for Scotland will draw everyone together to form an ad hoc committee to discuss the possibilities, but at the end of the day we need not think of the future when deciding the value of those initiatives. We have only to look at the past to see what has happened. In the Garnock Valley we had the initiative of the Scottish Development Agency leading a task force. That task force was successful. We have had the full support of the Scottish Economic Planning Department, the Department of Industry, the Scottish Development Agency, the BSC and the urban development corporation. The task force was successful, yet every third male in the Garnock Valley is unemployed. Although the task force is successful, the traditional and the new industries are still dying. That is what will happen at Linwood if we say that the road out is not to fight for Linwood but to co-operate with the Secretary of State and take part in his initiatives.
  An initiative was introduced when the Singer works closed in Clydebank. We were told that it would not be possible to set up a task force there, but that it could be designated an enterprise zone. Thus we have an enterprise zone, things are going well, and that will solve the problems of the job losses in Singers. The Secretary of State and the Minister are meeting representatives of Cunninghame district council on Friday afternoon, to discuss another initiative to deal with the problems of the

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  industrial decline of Ardrossan, Saltcoats and Stevenston. I have been told that after they have met the representatives from Renfrew on Friday morning they intend to set up an enterprise trust. We have had a task force and an enterprise zone, and now we shall have an enterprise trust. I am told that that will be a community-based local initiative—what that means, I do not know—which will solve the problems of the Ardrossan, Saltcoats and Stevenston area where already one person in five is unemployed.
  The Secretary of State for Scotland will need to come up with something better than this fourth initiative if we are to solve the problems. We have had all these initiatives in Scotland. I am suggesting to the right hon. Gentleman and his hon. Friends that the only initiative we need is an initiative on behalf of the Tory Back Benchers to revolt against the policies of the Government, especially those of the Prime Minister and the Secretary of State for Industry.
  Mr. Canavan: If my hon. Friend the Member for Central Ayrshire (Mr. Lambie) thinks back to what happened in 1975, he will realise that all those who are now Ministers voted to destroy the jobs in Linwood. They voted against the rescue deal of the Labour Government. However, there was one exception on the Tory Benches, a constituent of mine, the late Betty Harvie Anderson, who refused the Tory Whip, to protect jobs of her constituents. At that time, Renfrewshire, East was represented by a courageous woman instead of the cowardly puppets sitting on the Tory Benches who are destroying jobs in Linwood and everywhere else in Scotland.
  Mr. Lambie: I fully agree. We need an initiative from Tory Back Benchers. Surely, when they go home to their constituencies every weekend, they are told by their supporters, the small family business men who have seen their businesses collapse, and the large industrialists, that the Government must change their policies. I am sure Tory Members are getting the same pressure from their constituents as are Labour Members. I am asking them to take the initiative. We cannot defeat the Government. The Government have an effective majority of 50 in the House. We cannot defeat them alone, but we can defeat them and get a change of policy if the Tory Back Benchers revolt, as they should revolt, when they see the figures. I suggest that the Secretary of State for Scotland—he is one of the decent types of Tory—should take the lead in the revolt against his right hon. Friend the Prime Minister and the Secretary of State for Industry. That is the initiative we need.
  If we cannot obtain an initiative in the House, we shall see a revolt in the country among people who will no longer stand for the present policies of the Government. If we cannot get rid of the right hon. Lady and her right hon. Friend with the help of the Tories, we shall have to seek the help of our colleagues in the trade union movement.
  6.40 pm
  Mr. Gordon Wilson: All hon Members concerned about the sheer enormity of the crises affecting the areas surrounding Linwood. Every hon. Member can chalk up closures and unemployment in his constituency. We can all see the almost irreversible trend
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  of factories closing and jobs disappearing. But even set against that background, the size of the Linwood closure, with its affect on the surrounding communities in Renfrewshire, Ayrshire and Glasgow, is so great that it almost causes us to gasp.
  If the closure takes place, the difficulties involved in regenerating the area will be enormous. Once an area's major prop, such as the Linwood plant, is taken away, it becomes almost impossible to replace it. It is in that area that the greatest criticism can be levelled at the Government. From the evidence available, which is very little, it appears that they have not gone out of their way to fight for the retention of the plant. They could at least have tried to mark time and support the factory for one or two years until the economic climate had changed, or until an alternative form of employment could be found. Instead, at the worst possible time they have criminally and callously allowed the factory to go to the wall.
  The Scottish Office is in the charge of men who are not prepared to fight for Scotland. I doubt whether the Secretary of State is even a member of the economic subcommittee of the Cabinet, which deals with important matters such as the bank rate, monetary policy, and industrial regeneration. The West of Scotland will rue the day that the Linwood plant closes.
  The problem facing the House is that PSA has announced its intention to close Linwood. Strong criticism could be made of the way in which the declaration of intent was drawn up six years ago with two escape clauses. We have not heard anything about the repayment of money that was lavished on PSA some years ago. That £28 million must be returned. Yet there is no sign that the Government intend to do anything about that. The Linwood factory has featured in newspapers and in debates in the House for a long time. At the outset, the factory was bedevilled with the Imp, which had technical problems. It never fulfilled the aims and intentions of the Rootes Group. The Hunter never reached the capacity available for its production.
  It is interesting to note that Chrysler threatened to close the Linwood factory during the negotiations that took place in December 1975. Certain promises were made which involved the introduction of the Avenger. A former hon. Member, Douglas Henderson, asked the then Secretary of State whether the declaration of intent would involve the introduction of a new model. The Secretary of State assured him that the declaration of intent envisaged the introduction of a new light car for Scotland by 1979. The fact that that new car has not appeared is a betrayal of the promises given in the House by the then Secretary of State, and also by PSA, which no doubt gave the Secretary of State that same promise. Hon. Members who know the factory better than I could probably tell of the lack of major investment and the lack of a new model for the factory that would be sufficient to withstand the difficulties that it was facing.
  The Secretary of State's statement was inadequate. The Secretary of State for Employment also made a statement. Amid jeers and heckling from young Conservatives at their conference, he warned that the problems that faced the North were different from those that faced the South. He put that fact pungently. Yet when the Government take decisions on regional policy they seem oblivious to that fact. Last Thursday I asked the Prime Minister about the future of the car industry in Scotland. She said that Scotland had the benefit of a number of oil jobs, that it had

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  a special advantage, and that the people in Linwood did not begrudge fellow car workers a reasonable future. I am sure that they do not begrudge the car workers in Coventry a reasonable future. But it is dreadful that the Government begrudge the car workers in Linwood a reasonable future in car manufacture.
  The Government must do something to replace the jobs that are being lost in that area. We all realise that that will not be an easy task. First, they could endeavour to buy time and to retain PSA until they could achieve another use for the factory that would keep it in production and keep jobs in the locality. They could push for development and try to attract other firms, including Nissan. As the right hon. Member for Glasgow, Craigton (Mr. Millan) said, many other hon. Members will seek to attract that company to their areas, and with good reason—because of the jobs bonus that it will bring. It would show some sincerity if the Government did something other than promise initiatives and talks.
  The credibility of the Government—whatever that may be in Scotland—is put to the test because of the closure. The Government appear to have turned their back on the whole concept of regional development, which has grown since the mid 1950, and was intended to retrieve the industrial position of areas with industries that had outlived their modem use, or in which investment had not been sufficient to enable them to keep pace with industries in other countries. The Government could make use of growth centres, industrial incentives, premiums and all the other paraphernalia—yet the evidence is that those regional aids are on longer in use. As has been pointed out by a number of hon. Members, a complete and utter change of the Government's economic policies is required if the vacuum that has been created in our industry is to be filled.
  The Labour Party is also on test. There are 44 Labour Members in Scotland. They should fight for the retention of the factory. It should be placed on record that in 1975 11 Scottish National Members forced the then Secretary of State to change his mind. The Government's industrial policy had been to give encouragement to British Leyland, and to cut back assistance to other car manufacturers. On 13 December 1975 The Times stated:
  "The reason for the change to a policy of saving the bulk of Chrysler at almost any price was political and not industrial. The fear was that the loss of jobs at Linwood, near Glasgow, would hurt the Labour Party, to the advantage of the Scottish nationalists. The results of the recent local elections in Scotland have shaken the Government badly."
  Those who were in the House at that time knew of the strain that the Cabinet was under. The policy on Linwood eventually changed, with the incidental effect of rescuing the Coventry factory.
  If the Labour Party wants to live up to its claim of trying to defend Scottish interests it must rescue that factory. It is for Labour Members to do so, and to bring pressure to bear on behalf of Scotland. Otherwise, by going along with the British system of government, they are saying that they are prepared to sacrifice the interests of workers in Scotland to maintain the illusory Union.
  6.49 pm
  Mr. J. F. Pawsey: As the first Englishman to speak in the debate—[Interruption.] There will be more than one Englishman speaking in the debate, so hon. Members on the Opposition Benches need not worry. I must first declare an interest. I have a Talbot plant in my
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  constituency, at Ryton. That is probably one of the more modern motor plants in the United Kingdom. It is significantly better than most, for over £27 million has been invested in Ryton since 1976. It has a work force that is proud of the cars that it produces. Productivity at Ryton has increased by more than 20 per cent. in the last eighteen months. Ryton has good management, headed by George Turnbull, and a good work force, who know what the mass production of motor cars is about, and the work force has really co-operated with management. It is no accident that Talbot's new model is to be produced at Ryton. That is a vote of confidence in both the Ryton plant and its work force.
  Talbot is perhaps more vulnerable than most, if only because of its commitment to the Iranian order. But the situation on the CKD units—the completely knocked-down units—shows that in February some 3,600 of these units will be due for delivery. There will be a substantial rise in March, and a firm CKD programme is now envisaged to the end of the year, as the hon. Member for Coventry, North-East (Mr. Park) knows, since CKDs are produced in his constituency, at Stoke.
  The overall picture for the car industry is gloomy. There are growing imports and shrinking home production and sales. It is apparent that home-made products are not particularly fashionable. The present high value of the pound helps the importer and hinders the exporter, and it is easy for foreign countries and foreign companies to sell on the United Kingdom market.
  I wish to speak specifically to the Japanese threat and to consider two aspects of that problem. First, there is the actual level of Japanese penetration. Here, may I refer to a booklet produced by the Ford Motor Company? That booklet shows that job losses in West European car manufacturing by 1985 are estimated as 560,000. That gives the House some idea of the assault that is being mounted on the West European motor industry and of the appalling situation facing the British motor industry. I agree with Fords that a five-year moratorium should apply to cars coming into the United Kingdom, with the exception of those coming from the EEC. That moratorium should act specifically against East European and Japanese vehicles, and also the threat that will come from Korea. There can be little doubt that the situation facing the British motor industry is very worrying indeed.
  The second aspect of the problem is Japanese investment in the United Kingdom. I believe that it is better to have imported money than imported cars. Investment brings new jobs, new ideas and new processes. It brings different ideas about tooling and design. I believe that investment can act as a catalyst, and I hope that it will.
  There is also the reality, however, that if Japan were not permitted to invest in the United Kingdom the Japanese would invest in mainland Europe. It is clear that if they do not invest in the United Kingdom they will invest in Germany and France, and the British market will then be under assault from cars coming in under an EEC banner.
  I turn specifically to Linwood. I refer first to the constructive comments of my hon. Friend the Member for Renfrewshire, East (Mr. Stewart). He suggested—and I hope that the Minister will take note of this—that Linwood be designated an enterprise zone. I heard Opposition Members snigger when that suggestion was made. I can

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  only say that if we had the opportunity to have an enterprise zone in the West Midlands we should take it with both hands.
  Mr. Les Huckfield: Speak for yourself.
  Mr. Pawsey: I therefore urge that if such a zone can be created in Linwood, it should be.
  I wish to go back to basis—to the original concept of Linwood—and to ask whether it was really practicable or viable in the first place. Was the original decision the right decision?
  In 1963, the original company was Rootes. There was a different style of management, but above all there was a different economic climate for motor vehicles. I have spent all my life in industry, including seven years in the motor industry. I worked at Dunlop, which was a major supplier to Rootes and, I believe, to Talbot. I remember the local arguments in Coventry in 1963 against the Rootes move to Linwood. I remember the doubts that were freely expressed at that time about the logistics of the whole concept. Many of the people in the motor industry had reservations about the original decision taken by Sir William Rootes.
  The reason for the decision that was taken at that time was easy to understand. Basically, it was the lure of cheap money and grants. Three loans were made in 1961–62, amounting to £9·6 million at 1 ½ per cent. below the then market rate. Between 1963 and 1970, £2·9 million was given in development grants. Those were very substantial sums of money at that time.
  I put it to the House that cheap loans and grants do not change the basic facts of geography. Scotland is a long way from Coventry. Cheap loans and grants do not make up for the absence of a labour force skilled in the mass production techniques of the motor industry. They do not make up for being isolated from the major component manufacturers. That point was well made from the Opposition Benches. Cheap loans and grants do not make up for the increased costs of transport and communication.
  I clearly understand the driving force of the argument that decided Rootes to build at Linwood. In 1963, employment in the West Midlands was perhaps at its highest level ever. IDCs were almost unobtainable. I also clearly appreciate that whereas employment in the West Midlands was at its highest level the situation in Scotland was very different. Clearly, the Government at that time wished to do something about that. That is the answer to the taunts that I heard earlier about Linwood being built under a Tory Government.
  Again, I put the question to the House: was the basic decision in 1963 the right decision? Many doubted then, and many would now say that their doubts were right. I in no way seek to denigrate Scotland in general or Linwood in particular—the Scots have a substantial and justified reputation as being some of the best engineers in the world—nor do I seek to minimise the situation facing the workers and the people of Linwood. I can understand and sympathise with them, because I know exactly how I would feel if Ryton were in the situation in which Linwood now finds itself.
  Mr. Huckfield: It will be.
  Mr. Pawsey: I do not think that it will. That is the difference between me and the hon. Member for Nuneaton
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  (Mr. Huckfield). I have some confidence in Talbot. I have confidence in the workpeople and in their products. I believe that Talbot will remain.
  On that point, I quote from the letter from George Turnbull about which we have heard so much:
  "Talbot has taken the decision to concentrate its car manufacturing activities in the Midlands. Very regrettably this means the closure of the Linwood Plant in Scotland. This decision was only taken after all possible options had been considered and also after prolonged and considered study of all the Company's manufacturing facilities in the United Kingdom. We have carefully examined every possible method of making Linwood viable but all our studies indicate that, whatever course of action we might propose, the plant would continue to be a drain on our financial resources.
  We now believe that a strong company with a secure future can only be achieved by concentrating car manufacturing activity in the Midlands and, in particular, by developing our activities in the Coventry area.
  The Ryton assembly plant in Coventry, where the Alpine and Solara models are made, will be further developed and an investment plan to introduce another model at Ryton is now at an advanced stage."
  That sums up the situation in the Midlands.
  The motor industry is in for a tough time, and Talbot cannot be insulated. Surely the new concept will ensure the survival of the maximum possible number of jobs, both at Stoke and at Ryton, as well as in the components industry. What we are seeing in the House today is a new realism. I believe that the action that is being taken by the company will ensure that the largest possible number of jobs is maintained in the Talbot motor company.
  7 pm
  Mr. John Maxton: I should first declare an interest. Like many other Members from the West of Scotland, I have constituents who work at Linwood. A large number of Labour supporters in Cathcart work at Linwood, and many of them are shop stewards. Many of them come from the area of Castlemilk within my constituency where, like the constituency of my hon. Friend the Member for Central Ayrshire (Mr. Lambie), unemployment is now running at more than 25 per cent. That may not have the same dramatic effect as it does on areas that neighbour Linwood, but it has a significant impact upon the immediate area.
  I am also a member of ASTMS. That union has 500 members at Linwood, and someone should say something on their behalf as well as on behalf of the others.
  This is a major shock for the West of Scotland. The way in which the Government have handled this matter, both in terms of the negotiations with the company and the way in which they have presented it to this House, is a disgrace. It shows a cowardly giving-in to the company without making a proper investigation of the true facts and without estimating the true economic effects on the West of Scotland.
  The Government should have looked a little more carefully at the company's claims that the Linwood factory was unviable and that the products it was making could no longer be sold on the market. I am told that the development costs of the Sunbeam are included in the price of that car—in other words, the company estimates what it costs to produce as against the price at which it sells. However, the Sunbeam was not a new car in the first place. It was an amalgam of various other cars. The development costs of the various parts of that car have already been absorbed in the selling prices of the cars from which it came.

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  If the company is including those costs in the sale price of the Sunbeam, and at the same time is telling the Government that the Sunbeam is not a saleable car, it is deluding the Government and the Government ought to be aware of that. If it is saying that the Sunbeam is a car which it can no longer sell, why is it that the Linwood factory, which has been on short-working throughout the last year, is now going on to a five-day week on Monday? The workers at Linwood are entitled to say "We are going on a five-day working week so that we can build up the Sunbeam production, so that the company can stockpile Sunbeams to sell on the market and tide it over until it can transfer the manufacturing of the Sunbeam to other factories in Europe". If that is the case, the Government ought to examine the facts carefully, because it seems that the Sunbeam is a car that is worth continuing.
  We should be told what the Government said to the company rather than being told that they tried to negotiate and offered money. The Government should have been prepared to consider sanctions against the company if it was not prepared to continue at Linwood. We know that the Talbot company wants only the dealerships in Britain and not the manufacturing. If that is the case, what sanctions were the Government prepared to take against the importation of Peugeot cars in order to save Linwood? If they are not prepared to take such action, the Labour Party should consider what action it is prepared to threaten against Talbot and Peugeot.
  My third point relates to full economic cost. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) talked about 4,800 jobs being lost at a cost of £25 million. However, research, which the Government have never been able to disprove, suggests that for every job lost in an industry such as the plant at Linwood, 10 other jobs will eventually be lost in the economy. In those circumstances, we are not talking about 4,800 unemployed but probably about 40,000 unemployed. If the Government maintain that these figures are incorrect they should at least produce other figures to disprove them.
  If we add loss of revenue and unemployment benefit together, we are talking about an annual cost to the Government of £246 million as a result of the closure of Linwood. That is a much larger figure than £25 million. I am not saying that those figures are correct, but they are based on fairly solid research and the Government have a responsibility to disprove them.
  If the figure is £246 million, are the Government prepared, as they ought to be, to spend up to £250 million in the Linwood area and the West of Scotland to retain those jobs at Talbot? That is what it will cost them if they do not. If they are not, what will be the effect on their PSBR targets? If £250 million is taken off those targets, we shall see even more disastrous effects. The roll-on effects of this closure will result in disaster for the West of Scotland.
  We intend to join the workers of Linwood in fighting this decision and to do everything we can to ensure either that Linwood does not close or, if it does, that other alternatives are put in its place.
  7.8 pm
  Mr. William McKelvey: Thank you for calling me, Mr. Deputy Speaker. I shall be as brief as I possibly can.
  Since the Conservative Party came to power, there has been an unprecedented acceleration in the destruction of
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  industry across the whole of Scotland, particularly in the West. The industrial map has been rent asunder, leaving behind acres of desolation and scores of factories which are virtually gathering moss. Added to that, the Government have left more than 250,000 human beings miserable as a result of their policies.
  It is a sad indictment of the Secretary of State for Scotland that it is being said quite openly in the pubs and clubs around the area, particularly on Clydeside, that in less than two years he has managed to destroy more Scottish industry than Adolf Hitler managed to destroy from 1939 to 1945. That is not to say that I would prefer Adof Hitler to the Secretary of State for Scotland. I merely make that point.
  The other day, my hon. Friend the Member for Bothwell (Mr. Hamilton) described closures in the West of Scotland as "a catalogue of disasters". Because of the shortness of time, it is impossible to list them all. I have a list of the closures that have taken place in Scotland over the past few years, and if they were set out in single columns they would fill two foolscap pages.
  I shall mention only some, because the Secretary of State said that through their efforts the Government were bringing industry to Scotland. All of us welcome any jobs that come to Scotland or, indeed, to the United Kingdom. Nevertheless, we ought to discuss the balance of jobs. If Scotland gets 1,000 jobs in the next two or three years—that is ''if", because so far we have not achieved the projected figures—we will all be glad. However, let us consider what we have had to suffer as a result of Government policies.
  At Singer on Clydebank, 8,000 jobs have been lost. Another 1,600 have been lost at Massey-Ferguson in Kilmarnock. A further 600 have been lost at Goodyear Tyres, in Drumchapel. Another 900 have been lost at Prestcold, in Hillington. A total of 800 jobs have been lost at the British Steel ironworks at Tollcross. Another 1,700 have been lost at BSR, in East Kilbride. A total of 800 have gone at Monsanto, in Irvine. Another 660 have been lost at Skefco, in Irvine, and a further 700 at ICI, in Ardeer. The total is well over 100,000.
  The factories which have been closed or which have partially closed or which are about to close number over 60. That is a terrible indictment of the Secretary of State for Scotland, because he pursues the policies of his Government. If he had fought harder in the Cabinet to reverse these measures, we would not be here today arguing this case.
  There is a parallel between what is happening in Linwood and what happened at Kilmarnock to Massey-Ferguson. Here we have the only car production factory in Scotland, just as we had the only combine harvester production plant in Great Britain when Massey-Ferguson were at Kilmarnock. At that time the Secretary of State for Scotland applauded the workers of Massey-Ferguson for their responsible attitude and for the fact that they used great initiative in bringing their case before the public. It was debated here; thousands and thousands of words were spoken about the fate of Massey-Ferguson, and particularly about the responsibility of its workers. Those workers went to the labour exchange with their heads held high and with dignity, but their dignity is now being tested very severely at the labour exchanges in Kilmarnock. I would advise the workers of Linwood that responsibility they must certainly have, but if it ends with their going in

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  a dignified fashion to the labour exchange they will only be suffering the same fate as the workers of Massey-Ferguson.
  We have spoken today to the shop stewards, who have said that the workers will fight the redundancies in a responsible fashion; all power to their elbow. Scottish Members on the Opposition Benches will support them in that fight. It is about time that the Secretary of State for Scotland and his colleagues said to them "We will also support you in the fight to prevent redundancies," and not capitulate to the Peugeot people by saying that it is a lost cause.
  The Secretary of State drew attention to the fact that the agreement was hardly watertight. It is the kind of agreement which, if it had been struck between management and trade unions through collective bargaining, would have been adhered to by both sides because of its spirit and intent. If a watertight agreement had been signed, would the Secretary of State for Scotland have adhered to it? That is a question which he did not answer. We still do not know what is to happen about the £28 million that is owed.
  We ought to be advertising the fact that Peugeot are double-dealers. Had they been sincere when they signed the agreement, in wishing to advance the cause for Linwood they would have pumped more capital into that factory and at least have given it a new model. These things they failed to do because they had planned over the years to dispose of Linwood. Now we know precisely what they are and we should not be afraid to say so. I ask that the Secretary of State for Scotland and his colleagues join the Linwood workers in fighting the redundancies.Let us have no more mealy-mouthed statements—
  Mr. Gary Waller: Will the hon. Member give way?
  Mr. McKelvey: No, I am not giving way.
  Mr. Waller: I am terribly sorry to intervene but I represent a car worker constituency—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Has the hon. Member for Kilmarnock (Mr. McKelvey) given way?
  Mr. McKelvey: No.
  Mr. Deputy Speaker: If the hon. Member for Kilmarnock does not give way, the hon. Member for Brighouse and Spenborough (Mr. Waller) must resume his seat.
  Mr. Mckelvey: I was just about to wind up by saying that we are fed up with these mealy-mouthed platitudes of the Secretary of State for Scotland. We want no more of phrases such as "Appropriate action will be taken to see that industry comes," because in Ayrshire we are sick to death of hearing them. We want action. Action can be taken now to redress the decline of Scottish industry by helping the people of Linwood to fight. Most of all, the Secretary of State must fight within the Cabinet to reverse the lunatic decisions of the Government in following their madcap monetarist theories.
  7.14 pm
  Mr. Bill Walker: I wish to speak briefly in this extremely serious and disturbing
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  debate. There is much more than the closure of Linwood in the lessons that are coming from the debate. Everyone in manufacturing industry would acknowledge that there are three interrelated and interdependent parts in any manufacturing concern—first, the workers; secondly, management; and, thirdly, the customer. If, for whatever reason, anyone of these three fails to produce that which is expected the result can mean, as is happening in this case, a loss of business and a loss of sales.
  Loans and grants are no substitute for goods that will sell, for good and effective management, or for good industrial relations and high productivity. The sad story of Linwood is that the products were not bought in sufficient quantity. It has been suggested that the models should be stockpiled. Anyone who has run a business knows that stockpiling means money that is not working, and that money not working at today's borrowing costs is prohibitive. That is an exercise that no one in his right mind could contemplate, so stockpiling does not seem to be an option in this situation.
  I should like to turn to the problem of designs. If one is to remain effective in this competitive area there is no doubt that designs that will sell are vital. That is a management responsibility, and management has failed abysmally. At Linwood, three successive managements have failed to produce models that will sell. I wonder how many hon. Members on the Opposition Benches drive cars that were made at Linwood. That more than anything, sums up the situation. In the end the customer determines. If the customer will not buy, no amount of Government money, no cajoling and no effort by Government can ever make up for that.
  If the workers are not led properly and if management is inept and does not produce the right models, one ought not to be surprised if productivity levels are not good and industrial relations are suspect. In the end I blame three successive managements for this failure. We must learn from that. That is vital. We should not pour more and more Government money into managements that are suspect, because that will not create permanent prosperity for the people of Scotland or anywhere else.
  It is completely wrong for us to make a political football out of jobs. Jobs are too serious a thing for us to be making snide political comments about them. What we should be doing in Scotland is trying to see how we can work together to present the best face of Scotland. Scotland has a good face. But we will not bring jobs or industrial investment to Scotland if we continue to delude ourselves that, somehow, Government money will in the end create products that customers will buy. That is not possible; it is not practicable; it is just nonsense.
  7.18 pm
  Mr. Allen Adams: I start my speech, Mr. Deputy Speaker, in a way that one probably should not start; that is, by apologising for the peculiar habit that I seem to have acquired in the House over the past three of four weeks, of consistently saying "You". Let me assure you, Sir, that the insults are not intended for you. I would not, however, say that they are not intended.
  I am sure that other hon. Members, like myself, will be shocked, appalled, horrified—all the usual words—at the apathy, the indifference, the contempt and the slothful approach of the Government Front Bench this afternoon. On a day when we are discussing the loss of 2,000, 3,000, 4,000—or perhaps 6,000, 7,000 or 8,000 jobs when we

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  take into account all the feeder industries that will be affected—it must be unique that Ministers can claim successes. They can say "All right, we are losing 8,000 jobs here, but a small shop has been opened round the corner which is employing two people". It has almost reached the stage at which if someone opens a front window in Springburn Road and starts selling chips it will be claimed as a major success by the Government.
  I was appalled to hear the comments of the hon. Member for Dundee, East (Mr. Wilson). He should be reminded that he is one of the people responsible for putting the Tories into power.
  Mr. Ernie Ross: My hon. Friend is referring to the hon. Member for Dundee, East (Mr. Wilson). The whole House is sickened by the hypocrisy displayed by the hon. Member, who once again has spilt out his poison, trying to divide workers north and south of the border.
  Mr. Adams: I am never in any difficulty in distinguishing between my hon. Friend the Member for Dundee, West (Mr. Ross) and the hon. Member for Dundee, East.
  I was one of the first employees of Rootes, as it then was, when I left school. I served a five-year apprenticeship. There were mistakes at the very begining. The Rootes family were good at motor manufacture but made some fundamental errors, one of which was their obsession with aluminium engines and gear boxes. Also, they were late in the market, and the Mini was by that time a well-established product. The company was then sold to Chrysler. Chrysler had a lot of Government money, and went away. Peugeot-Citroen came in and had more Government money, and now they are going away.
  We are annoyed at the lack of response from the British Government. If a British company had behaved in similar way in France, is it likely that the French Government would have responded in the same way? Of course they would not have. There is to be a general election in France this year and the French Government are prepared to take a much stronger line with French companies to retain involvement and employment in France than the British Government are prepared to take to keep involvement in this country.
  I believe that the Government are elected to look after the people, not to do what the Government have done—to wash their hands and behave like Pontius Pilate, saying "It is a commercial decision". It can never be just a commercial decision. That is withdrawal by the State on a broad front, which I do not accept against the background of the unemployment in the Paisley area.
  During December, Paisley lost 1,500 jobs, in the food manufacturer CPC, Ciba-Geigy and the textile mills, and one of the finishing companies intends to shut down within the next month or two. Yet the Government are sitting back as if they had nothing at all to do with it, telling the people of Scotland that it is a commercial decision and that the Government cannot intervene. The Government simply do not want to intervene. It is not a question of their not being able to. If the price is right the Government can intervene in anything, but they are not prepared to pay the price; they are taking a deliberate doctrinaire stand.
  I should like to hear from Ministers at what point they are prepared to intervene. We lost 1,500 jobs in December; we are now losing 8,000. Do we have to lose
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  another 5,000 jobs, or another 10,000 jobs, before the Government will intervene? Will they please tell the people of Scotland at what point they intend to intervene, or will this go on and on until no one is working?
  I object to the deception that has been practised on the House. I accept that the Minister did not know the company's intention. The Minister told us last week that there was no knowledge of what the company's decision would be. When I telephoned home on Wednesday morning my wife answered the telephone and told me that there was a letter for me from the company saying that it was to be closed down. At 6·45 pm the previous night I was meeting Ministers. If the Minister says that he did not know, I accept what he says, because he is an honourable Member.
  What do the Government intend to say to the company now? The company has deceived the House and the Government. The company has treated the Government, the House and the people of Scotland in a contemptuous way. People have a right to expect Ministers to take steps against people who act in that way; for instance, by taking a serious look at the company's franchise to sell cars in this country. I believe that right from the outset the company did not particularly want to produce cars in this country; it wanted to purchase the company purely for the franchise.
  The closure of Linwood is the thin end of the wedge. It affects the Stoke engine plant. If no cars are being produced at Linwood, fewer engines will be needed and fewer will be produced. That leaves Stoke dependent on the Iran order, and that is not a very stable market. So we have Linwood today and perhaps Stoke next year. I doubt whether the company has any serious intention of producing a new model. Actions speak louder than words, and we shall believe it when we see it.
  I ask the Minister to tell the people of Scotland what precisely he intends to do. He owes it to the people of Scotland to take firm action against the company and to say to the Prime Minister, on behalf of the Scottish people, that this company should be saved in one of the following ways: by Government intervention, by setting up a State holding company, by dissuading Peugeot-Citroen from leaving, or by bringing someone in. If none of those options is acceptable to the Prime Minister, the Minister should say to her "Find another Secretary of State for Scotland."
  7.27 pm
  Mr. George Park: The Secretary of State for Scotland was at pains to draw the parallel between the present situation and what happened when Chrysler opened the Talbot firm. There are parallels, but I am forced to the conclusion that the Secretary of State for Scotland knew nothing about these parallels and the weaknesses in the declaration of intent until he looked at the speech written for him by his civil servants for this afternoon. If the Secretary of State knew about weaknesses in the declaration of intent and did nothing about them he stands condemned of having a callous disregard for the fortunes of the people in Linwood.
  My main purpose in catching your eye, Mr. Speaker, is to make it clear that the employees in the Talbot works in Coventry derive no satisfaction from the Company's decision to close Linwood and to concentrate its activities in the Midlands. The Coventry workers know that they are part of an integrated activity, and that what affects one

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  rubs off on another. That aspect has not been lost on the French workers of Talbot. We understand that a message of support has come from the metal workers' union in France, the CGT, pledging its solidarity and support for the workers of Linwood in the fight to retain their jobs.
  There is considerable scepticism in Coventry as to whether the operation there will survive, even if Linwood closes. A Linwood closure does not strengthen Coventry's position. In fact, it makes the position there more vulnerable, because it would become an even smaller part of a company which could absorb it in France without loss of production. The Coventry factory has had to take its full share of the 5,000 redundancies that have taken place in the past few years.
  Members of Parliament of all political persuasions expressed their concern to Ministers before Christmas, and even in that short time 450 more jobs have gone at Ryton. The Scottish closure will have an impact on the Stoke works of possibly a further 800 jobs. To lose a basic 5,000 jobs at Linwood, plus the peripheral effects, makes the Coventry employees wonder when the axe will fall on them, not whether it will fall.
  Their prospects on the job market are not good. The present unemployment levels in Coventry bear a close resemblance to the unemployment levels in Paisley. That is something that should be recognised. It did no good for the morale of all the Talbot employees to know that the Peugeot company paid Chrysler only one dollar for the entire United Kingdom production. Peugeot was really only interested in the dealer network and the commercial vehicle section at Luton and Dunstable. We are seeing an unfolding of the plans that the company had from the very beginning.
  The irony is that in a matter of months the components made at Linwood will be produced at the Mulhouse plant owned by Talbot. Moreover—and I say this mainly for the benefit of the hon. Member for Rugby (Mr. Pawsey), who thinks that he is getting a new Ryton model—the new Metro size C15 is to be made in France. That is evidence, if evidence were needed, that when multinational companies get into trouble it is the peripheral companies that take the brunt. Productivity improvements of the order of an admitted 20 per cent. have made no impact whatever on the decision makers.
  The work at present proposed for the Coventry factory is such that we are close to the point where we shall be mere assemblers of parts made in France. Frankly, I do not believe that Ministers have tried hard enough. They have approached the management in a stereotyped fashion, instead of recognising that this extraordinary situation needed extraordinary efforts on their part.
  No Talbot employee in Coventry can really feel sure that his future is secure beyond the very short term. I hope, therefore, that it will be possible to delay the implementation of the decision, and that there will be further investigation into it. Moreover, I hope that it will not be confined to Linwood but will extend to the United Kingdom operations of Talbot.
  7.34 pm
  Mr. Les Huckfield: There is one significant feature that has not emerged so far in this interesting debate, and that is that, if the closure goes ahead, British Leyland will be the only complete car
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  manufacturer left in this country. Every other company will be either assembling foreign-manufactured or foreign-designed cars. The most serious defect of the strategy now being put forward by the Government is that, as yet, Leyland is left with no new model in the biggest selling sector of the model range.
  We are now witnessing a cosmetic operation designed to conceal the gradual but complete exodus of Talbot from this country. It is not just a matter of Linwood. As my hon. Friend the Member for Coventry, North-East (Mr. Park) said, unless new work comes to the Coventry Stoke works, at least 50 per cent. of the work force there will have nothing to do by June of this year.
  The factory at Ryton has been working one day a week since last August. It is all very well for company press releases to talk about new models, but so far Ryton has been given no details of any new models. We have been given vague promises, but we have seen no details.
  I echo my hon. Friend's words. My constituents, like his, as well as the workers at the Coventry works of Talbot, derive no joy from the Linwood closure. Nor do the workers in Talbot France. My hon.Friend mentioned the telegram of support, of which we received a copy from the Scottish TUC today. The CGT's telegram expresses its
  "Full solidarity with Talbot workers in unions and in any action they may see fit to take to defend their jobs and livelihood against the plans of this multinational company".
  The Government may not have had a favourable answer from the Talbot employers, but the unions in Talbot have had a favourable and solid response from the unions in Talbot France.
  We are witnessing the complex pattern that has evolved in international car manufacturing. The problem in this country is not just the fact that the import sector of the market is going up but that there has been a switch from manufacturing to assembling. We are fast becoming a country that imports other countries' completed cars or half-completed cars in boxes and puts them together. The Talbot development that has taken place over the past two or three weeks is very much part of that pattern.
  However, that is something that the Government do not seem to understand. Three separate statements on the car industry have been made since the beginning of the year, and there seems to be no connection between them. The Government do not seem to recognise the size of the problem, let alone have a coherent strategy to deal with it.
  Even if the British Government are not determined to see that their car industry survives, the French Government are determined to preserve theirs. They have already made a gesture of recognition that PSA Citroen has taken on more than it can manage. As far as we can understand, the French Government have already made new premises available to PSA Citroen in France. But they have gone further. They have offered to pay the wages of the workers in those factories for a limited time. That is the kind of competition that Talbot France provides.
  Have the Government ever bothered to find out the loss situation? Have they discovered that the Talbot France losses in the first six months of last year were twice the Talbot UK losses? Did not the Government inquire why, when Talbot France losses were twice as big as the Talbot UK losses, the United Kingdom operation was scheduled for closure?
  Talbot France is offered two completely free factories and also receives an offer to pay the wages of the workers

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  in those factories. That is the kind of competition that we are up against. The Government say that all they will make available to Talbot UK is the same kind of offer that any other company would have received. I do not believe that the Government have even tried.
  The French Government have been adept at protecting their car industry; this Government have also been adept at protecting the French car industry. Today we have heard Front Bench speeches not from the Industry Department but from the Talbot public relations department. A Conservative Government took Rootes to Scotland in 1963; if they are allowed to do so, a Conservative Government will preside over the killing off of Linwood in 1981.
  Mr. Leslie Spriggs: Not long ago a French senior Minister stated that if agricultural workers were to be unemployed they would not be French. That applies equally to the car industry.
  Mr. Huckfield: My hon. Friend is right. The French Government's determination to preserve their agricultural and industrial sectors puts this Government's policies in the shade.
  In 1975, with only half the current level of unemployment, a Labour Government were prepared to make available a package deal of £162 million to keep Chrysler in the country. This Government are prepared only to make available to Talbot the same assistance that any other manufacturer might get.
  We are concerned not only with the pusillanimous way that the Government have caved in to Talbot but with the way that they announced the news. My right hon. Friend criticised the Secretary of State for being in Brussels at the time when the announcement was due. I received a letter telling me of the closure posted in Coventry on the Tuesday morning. When we met the Minister of State on the Tuesday evening he said that he still had not been told about the closure, although he had a pretty good idea about the decision. I can understand why George Turnbull asked me in his letter to keep the information confidential. It was not only to give the company time to inform its employees. He was asking that the information be kept from the Government, too. The Government appear to have suffered from a lack of information in the discussions.
  The Government have behaved throughout like innocent bystanders. A £28 million loan is still outstanding, the company has received £64 million of taxpayer's money in grants, and there are £215 million of unutilised tax losses—a free tax holiday for the company if it wishes to stay in the country. We met the Secretary of State on 15 December and he told us, as constituency Members, that he would not hesitate to use the sanction of the remaining loan. Why, therefore, does Mr. Turnbull say publicly that the £28 million loan was not mentioned in the discussions? Despite the meetings and the promises, the Government did not even try. They let Talbot walk all over them. That is our criticism.
  The Government are failing to safeguard an investment made by successive Governments on behalf of the British taxpayer. If the pressure of the declaration of intent signed by the company, promising equality of treatment and investment, the £28 million loan outstanding and the £215 million tax loss that so far has been unutilised cannot keep Talbot in the country, how can the Government believe that they can keep Vauxhall in the country? We shall soon
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  have the same problem with Vauxhall. If the Government adopt the same attitude, I shudder for the workers at Vauxhall.
  If, unlike the French Government, this Government are not prepared to intervene to protect our manufacturing base, why do not they intervene on grounds of regional policy? The hon. Member for Renfrewshire, East (Mr. Stewart) regretted the fact that Rootes had gone to Linwood. That can only be an argument for having no regional policy. It was right for Rootes to go to Linwood as the critical centre of a regional policy for that part of Scotland—and it was a Conservative Government in office at the time. We supported the move. If the factory closes, the key ingredient of that regional strategy will be removed. Instead of affording the area special development area status or a new form of assistance, it would be far more preferable for the Government to increase the present assistance to keep the factory going. Other alternatives could also have been considered for manufacture in the plant, and it is not too late now.
  Many Conservative Members will be voting for the second time to close Linwood. If Talbot and Linwood die it will be because the Government passed by on the other side. The workers of Scotland and the workers of Talbot all over the country will know who is to blame. I therefore invite my right hon. and hon. Friends to support us in the Lobby.
  7.47 pm
  The Minister of State, Department of Industry (Mr. Norman Tebbit): Two major themes have been apparent in the debate. I regret the theme that was introduced when the right hon Member for Glasgow, Craigton (Mr. Millan) opened the debate. As my right hon. Friend said, his speech was carping, ill-natured, irrelevant, petty, unjustified and niggling over peripheral issues, such as whether my right hon. Friend should have been in the House last Wednesday. The right hon. Gentleman did not even have the courtesy to admit that he had received a letter from my right hon. Friend. In half an hour of niggling rubbish there was not one constructive thought. The right hon. Gentleman's speech was a melancholy whine. It was the sort of speech that gives the House a bad name. The right hon. Gentleman should consider how his speech will sound to those outside the House, not least the workers at Linwood. He merely picked a petty quarrel with my right hon. Friend.
  The theme was taken up by the hon. Member for Renfrewshire, West (Mr. Buchan), who referred to the failure of regional policy. Yes, the closure is a failure of regional policy. The company has failed since 1963. The firm has had three sets of owners. It has been the subject of intense, solemn and binding agreements, which did not bind anyone. It has received massive subsidies. Except in one year, it has never made a profit. That must show that there was something adrift, not merely with the policies that have been pursued in the last two years but ever since 1963. I accept that, as does the hon. Gentleman. It behoves us to consider how we should manage these things better.
  Mr. Buchan: That does not prove the impotence of regional policy. It shows the failure of companies, even when supported by regional policy, to put in from the beginning the sort of investment that was necessary. In this connection, tribute has been paid to the work of the labour

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  force. What was lacking was fresh investment, fresh plant and fresh models. That is the problem. The Government have the responsibility for bringing about such changes.
  Mr. Tebbit: I do not want to be unduly unkind to the hon. Gentleman. I am told that it is not the thing to do in the House. However, since PSA took over the company it has put in £110 million of investment and has got nothing out of it except losses.
  Mr. Buchan: Not at Linwood.
  Mr. Tebbit: I am not saying that it was at Linwood. The hon. Member cannot get by by just shouting at me. PSA has put in £110 million.
  Mr. Huckfield: Give way.
  Mr. Tebbit: No, I shall not give way. The company has had to subsidise losses that have been made. The hon. Gentleman can ask the company about it. He is complaining all the time that Ministers are acting as PRO agents for the company. I shall give the outline figures, that is all.
  The hon. Gentleman and his hon. Friends talk about the conduct of this company. I hold no brief for the company. I do not have to do so.
  Mr. Buchan: The Minister is reading a brief.
  Mr. Tebbit: The hon. Gentleman must not say things that he knows are untrue. He can hardly expect that my notes were written for me by PSA this afternoon while I was on the Bench. He is just plain ignorant about these matters. I must tell him that the losses made by the company per car are twice as high at Linwood as the average across the whole company. That must stick in his mind.
  The hon. Member for Renfrewshire, West gave a wearisome recital of the same old half-truths.
  Mr. Huckfield: Name one.
  Mr. Tebbit: I have never been to a Scottish football match, and I am not encouraged to go to one after the way in which the House has behaved this afternoon.
  I know that the hon. Gentleman tries to listen from time to time, but he never seems to hear anything that is said to him. In a last despairing effort, I shall tell him again what has been told him time and time again. I shall outline the final sequence of the meetings on Monday, Tuesday, and Wednesday. My right hon. and hon. Friends and I saw the PSA company on Monday. That was not our first meeting with the representatives of Talbot. We had had a continuing dialogue with them over a considerable time. No last-ditch stand was going on, with bidding up with cash. The company told us its worries and how it saw the situation.
  On Tuesday night, I told the hon. Gentleman and his hon. Friends that we had seen the company and that it had undertaken to consider, at its board meeting, what we had said. I could not tell the hon. Gentleman that that board meeting was to be held first thing on Tuesday morning because it was not guaranteed that that meeting would come to a final conclusion, and it would not have been right for me to do so. I was not in contact with the company during the day.
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  On Wednesday, the company made its statement. Clearly, it had been prepared for a decision by the board, and had posted the letters on Tuesday night after the meeting.
  Mr. Huckfield Mr. Huckfield rose—
  Mr. Tebbit: I shall not give way. That is the truth. That is the story, and I am sorry if the hon. Gentleman cannot accept it.
  The hon. Gentleman's speech was characterised by his half-baked concept of suddenly deciding that MG motor cars should be made at Linwood. He thought that that would be the way out of all the problems. That theme was taken up and echoed many times by Opposition Members. In contrast to that, there was another theme.
  A constructive theme was offered by my right hon. Friend the Secretary of State for Scotland, my hon. Friends the Members for Edinburgh, South (Mr. Ancram), for Rugby (Mr. Pawsey), for Renfrewshire, East (Mr. Stewart) and for Perth and East Perthshire (Mr. Walker). They recognised the history of the problems that have hit the company. They frankly recognised the scale of Government investment in it—loans of £64½ million, grants of £90 million, and never a profit, except in one year. Is that the basis on which we can resurrect the motor industry in Scotland? I strongly doubt it.
  The industry will not be helped by lunatic suggestions that punitive measures should be taken against the company, trying to take its motor cars back and trying to crush its dealer network. Such suggestions are childish. They are the wilder dreams of people who have not made any attempt in their lives to run a business.
  Those suggestions were better categorised by one of the barmiest suggestions of the whole day, made by the hon. Member for Glasgow, Cathcart (Mr. Maxton). He suggested that we should subsidise continuing production of Sunbeam motor cars to be stored—his genuine little Sunbeam mountain. He could not understand why anyone thought it was funny. That suggestion was not funny—it was plain ridiculous.
  What attracts investors—whether domestic or from overseas—to operate in this country is not the sort of debate that we have had this afternoon. No one would be attracted to this country if he thought that the hon. Member for Nuneaton (Mr. Huckfield) might be a member of the Government again.It was suggested that we could virtually lock up the company and refuse to let it go home. The hon. Member says that the French could have done it. Of course they could not. They have no more power to compel a company to stay in France than we have. The hon. Member should ask himself what has happened to the Leyland factory at Seneffe. I know that it is not in France; my geography is not as bad as that. However, it is typical of what happens on these occasions.
  The attraction for a country is not the sort of inflationary policies followed by the Labour Government. It is not having to live through winters of discontent and strikes. It is not the Price Commission, the planning agreements, or sterling plunging to $1·60 and the Government's having to call in the IMF that encourages investment in this country. Honest money encourages such attraction, with commercial freedom, sensible labour practices, low taxes and rates, and competitive component manufacturers. There is no hope that we can persuade—
  Mr. Huckfield: Rubbish.
  Mr. Tebbit: If the hon. Gentleman cries incessantly, like a parrot, he is unlikely to hear anything that is said to him. If he tries it, he will find it difficult to keep his mouth and ears open at the same time. I suggest that he tries keeping his mouth closed and his ears open for a moment.
  There is little prospect of maintaining PSA in Scotland, at Linwood. We have to accept that. Many of my hon. Friends and many Opposition Members are glad that PSA, through Talbot, has a continuing commitment to stay in manufacturing in the Midlands and in the truck business at Dunstable.
  It is sad that Opposition Members never looked more miserable or downcast than they did when my right hon. Friend was listing new jobs and new industries. [Interruption.] Need I say more? They chose to sneer at the odd 1, 000 jobs. They sneered at jobs in the hundreds, although such jobs are the best. They are in the firms that will grow in a way that Rootes, Chrysler and Talbot could never grow. Such firms have not been dragged struggling, with their arms held behind their backs and money pushed into their pockets, to go to places that they do not want to go to. Such firms really want to go.
  I remind the House of what my right hon. Friend the Secretary of State for Scotland said earlier. There is a success story in Scotland. I refer to the success story of Digital Equipment Ltd., which employs some constituents in Central Ayrshire. I used to work for Digital Equipment Ltd. and I know the inside story of what brought that company to Ayrshire. It was not regional grants. They were regarded as Green Shield stamps. The company went to Ayrshire because it wanted to go there. I had something to do with that decision. The company decided to go to that part of the country because it was impressed with the quality of the labour force and because a site was available. It was impressed with the history of good industrial relations in that part of Scotland, and the education facilities were good. The company believed that it could be successful there.
  That decision would have been the object of sneers today, because only 200 jobs were involved. Today, 700 jobs are involved and the company is still growing.
  The Government's policy is to make Britain an attractive place in which companies can grow and not decline in the way that the company at Linwood has declined since 1963. I do not have a word of regret for what the Government have done. My right hon. Friends and I regret the disaster that has come from the failure of the enterprise at Linwood. That does not mean that we believe in pushing more money on to a reluctant employer, who has said that he could not succeed even on a 100 per cent. grant.
  I ask my hon. and right hon. Friends to go into the Division Lobby tonight in total contempt for the Opposition motion and in support of the amendment.
  Question put, That the original words stand part of the Question:—
  The House divided:Ayes 240, Noes 297.

  Division No.73

  [8.4 pm

  AYES

  Adams, Allen

  Ashley, Rt Hon Jack

  Allaun, Frank

  Ashton, Joe

  Alton, David

  Atkinson, N.(H'gey, )

  Anderson, Donald

  Bagier, Gordon AT.

  Archer, Rt Hon Peter

  Barnett, Guy(Greenwich)

  Armstrong, Rt Hon Ernest

  Barnett, Rt Hon Joel (H'wd)

  200

  Benn, Rt Hon A. Wedgwood

  Hamilton, James(Bothwell)

  Bennett, Andrew(St'kp'tN)

  Hamilton, W. W. (C'tral Fife)

  Bidwell, Sydney

  Hardy, Peter

  Booth, Rt Hon Albert

  Harrison, Rt Hon Walter

  Boothroyd, MissBetty

  Hart, Rt Hon Dame Judith

  Bradley, Tom

  Haynes, Frank

  Bray, Dr Jeremy

  Healey, Rt Hon Denis

  Brown, Hugh D. (Provan)

  Heffer, Eric S.

  Brown, R. C. (N'castle W)

  Hogg, N.(EDunb't'nshire)

  Brown, Ron (E'burgh, Leith)

  Holland, S.(L'b'th, Vauxh'll)

  Buchan, Norman

  HomeRobertson.John

  Callaghan, Rt Hon J.

  Homewood, William

  Callaghan.Jim(Midd't'n&P)

  Hooley, Frank

  Campbell, Ian

  Horam, John

  Campbell-Savours, Dale

  Howell, Rt HonD.

  Canavan, Dennis

  Huckfield, Les

  Cant, R. B.

  Hudson Davies, Gwilym E.

  Carmichael, Neil

  Hughes, Mark(Durham)

  Carter-Jones, Lewis

  Hughes, Robert (AberdeenN)

  Cartwright, John

  Hughes, Roy (Newport)

  Clark, Dr David (SShields)

  Janner, HonGreville

  Cocks, Rt Hon M. (B'stol S)

  Jay, Rt Hon Douglas

  Cohen, Stanley

  Johnson, Walter (Derby S)

  Coleman, Donald

  Johnston, Russell(Inverness)

  Concannon, Rt Hon J. D.

  Jones, Barry (East Flint)

  Conlan, Bernard

  Jones, Dan (Burnley)

  Cook, RobinF.

  Kaufman, Rt Hon Gerald

  Cowans, Harry

  Kerr, Russell

  Craigen, J. M.

  Kilfedder, JamesA.

  Crowther, J.S.

  Kilroy-Silk, Robert

  Cryer, Bob

  Kinnock, Neil

  Cunliffe, Lawrence

  Lambie, David

  Cunningham, G.(lslingtonS)

  Lamborn, Harry

  Cunningham, DrJ.(W'h'n)

  Lamond, James

  Dalyell, Tam

  Leadbitter, Ted

  Davidson, Arthur

  Leighton, Ronald

  Davies, Rt HonDenzil(L'lli)

  Lestor, Miss Joan

  Davies, Ifor(Gower)

  Lewis, Anhur(N'hamNW)

  Davis, Clinton (HackneyC)

  Litherland, Robert

  Davis, T. (B'ham, Stechf'd)

  Lofthouse, Geoffrey

  Deakins, Eric

  Lyon, Alexander(York)

  Dewar, Donald

  Lyons, Edward (Bradf'dW)

  Dixon, Donald

  Mabon, Rt Hon Dr J. Dickson

  Dobson, Frank

  McCartney, Hugh

  Dormand, Jack

  McDonald, DrOonagh

  Douglas, Dick

  McElhone, Frank

  Dubs, Alfred

  McGuire, Michael(Ince)

  Duffy, A. E. P.

  McKelvey, William

  Dunn, James A.

  MacKenzie, Rt HonGregor

  Dunnett, Jack

  Maclennan, Robert

  Dunwoody, MrsG.

  McMahon, Andrew

  Eadie, Alex

  McNally, Thomas

  Eastham, Ken

  McTaggart, Robert

  Ellis, R. (NED'bysh're)

  McWilliam, John

  Ellis, Tom (Wrexham)

  Magee, Bryan

  English, Michael

  Marks, Kenneth

  Ennals, Rt Hon David

  Marshall, D(G'gowS'ton)

  Evans, John (Newton)

  Marshall, DrEdmund (Goole)

  Ewing, Harry

  Marshall, Jim (LeicesterS)

  Field, Frank

  Martin, M(G'gowS'burn)

  Fitch, Alan

  Mason, Rt Hon Roy

  Flannery, Martin

  Maxton, John

  Fletcher, Ted(Darlington)

  Maynard, Miss Joan

  Foot, Rt Hon Michael

  Meacher, Michael

  Ford, Ben

  Mellish, Rt HonRobert

  Forrester, John

  Mikardo, lan

  Foster, Derek

  Millan, RtHonBruce

  Foulkes, George

  Mitchell, Austin (Grimsby)

  Fraser, J. (Lamb'th, N'w'd)

  Mitchell, R.C. (Soton Itchen)

  Freeson, RtHon Reginald

  Morris, Rt Hon A. (W'shawe)

  Garrett,John(Norwich S)

  Morris, Rt Hon C. (O'shaw)

  Garrett, W. E. (Wallsend)

  Morris, Rt Hon J. (Aberavon)

  George, Bruce

  Morton, George

  Gilbert, Rt Hon Dr John

  Moyle, Rt Hon Roland

  Ginsburg, David

  Mulley, Rt Hon Frederick

  Golding, John

  Newens, Stanley

  Gourlay, Harry

  Oakes, Rt Hon Gordon

  Graham, Ted

  O'Halloran, Michael

  Grant, John (IslingtonC)

  O'Neill, Martin

  Grimond, Rt Hon J.

  Orme, Rt Hon Stanley

  201

  Owen, Rt Hon Dr David

  Stoddart, David

  Palmer, Arthur

  Stott, Roger

  Park, George

  Strang, Gavin

  Parker, John

  Straw, Jack

  Parry, Robert

  Summerskill, HonDrShirley

  Pendry, Tom

  Taylor, Mrs Ann (Bolton W)

  Penhaligon, David

  Thomas, Dafydd(Merioneth)

  Powell, Raymond (Ogmore)

  Thomas, Jeffrey(Abertillery)

  Prescott, John

  Thomas, Mike (NewcastleE)

  Price, C. (Lewisham W)

  Thome, Stan (PrestonSouth)

  Race, Reg

  Tilley, John

  Radice, Giles

  Tinn, James

  Rees, Rt Hon M (Leeds S)

  Torney, Tom

  Richardson, Jo

  Varley, Rt Hon Eric G.

  Roberts, Albert (Normanton)

  Wainwright, E, (DearneV)

  Roberts, Ernest (HackneyN)

  Watkins, David

  Roberts, Gwilym (Cannock)

  Weetch, Ken

  Robertson, George

  Welsh, Michael

  Robinson, G. (Coventry NW)

  White, Frank R.

  Rodgers, Rt HonWilliam

  White, J. (G'gowPollok)

  Rooker, J.W.

  Whitehead, Phillip

  Roper, John

  Whitlock, William

  Ross, Ernest (Dundee West)

  Wigley, Dafydd

  Ross, Stephen (Isle of Wight)

  Willey, Rt Hon Frederick

  Rowlands, Ted

  Williams, Rt Hon A.(S'sea W)

  Ryman, John

  Williams, SirT.(W'ton)

  Sever, John

  Wilson, Gordon (DundeeE)

  Sheerman, Barry

  Wilson, Rt HonSirH.(H'ton)

  Sheldon, Rt Hon R.

  Wilson, William (C'trySE)

  Silkin, Rt HonJ. (Deptford)

  Winnick, David

  Silverman, Julius

  Woodall, Alec

  Skinner, Dennis

  Woolmer, Kenneth

  Smith, Rt HonJ. (N Lanark)

  Soley, Clive

  Tellers for the Ayes: Mr.

  Spriggs, Leslie

  Joseph Dean and Mr. Alan

  Stallard, A. W.

  McKay

  NOES

  Adley, Robert

  Carlisle, Rt Hon M. (R'c'n)

  Aitken, Jonathan

  Chalker, Mrs. Lynda

  Alexander, Richard

  Channon, Rt. Hon. Paul

  Alison, Michael

  Chapman, Sydney

  Amery, Rt Hon Julian

  Churchill, W.S.

  Ancram, Michael

  Clark, Hon A. (Plym'th, S'n)

  Arnold, Tom

  Clark, SirW. (CroydonS)

  Atkins, RobBert(PrestonN)

  Clarke, Kenneth (Rushcliffe)

  Atkinson, David (B'm'th.E)

  Clegg, SirWalter

  Baker, Kenneth (St.M'bone)

  Cockeram, Eric

  Baker, Nicholas (NDorset)

  Colvin, Michael

  Banks, Robert

  Cope, John

  Beaumont-Dark, Anthony

  Cormack, Patrick

  Bell, SirRonald

  Corrie, John

  Bendall, Vivian

  Costain, SirAlbert

  Benyon, Thomas (A'don)

  Cranborne, Viscount

  Bevan, David Gilroy

  Critchley, Julian

  Biffen, Rt HonJohn

  Crouch, David

  Biggs-Davison, John

  Dean, Paul (NorthSomerset)

  Blackburn, John

  Dickens, Geoffrey

  Body, Richard

  Dorrell, Stephen

  Bonsor, SirNicholas

  Douglas-Hamilton, LordJ.

  Boscawen, HonRobert

  Dover, Denshore

  Bottomley, Peter(W'wichW)

  du Cann, Rt Hon Edward

  Bowden, Andrew

  Dunn, Robert (Dartford)

  Boyson, DrRhodes

  Durant, Tony

  Bright, Graham

  Dykes, Hugh

  Brinton, Tim

  Eden, Rt Hon Sir John

  Brittan, Leon

  Edwards, Rt Hon N. (P'broke)

  Brooke, Hon Peter

  Eggar, Tim

  Brotherton, Michael

  Elliott, SirWilliam

  Brown, M(BriggandScun)

  Emery, Peter

  Browne, John (Winchester)

  Eyre, Reginald

  Bruce-Gardyne, John

  Fairbairn, Nicholas

  Bryan, Sir Paul

  Fairgrieve, Russell

  Buchanan-Smith, Alick

  Farr, John

  Buck, Antony

  Fell, Anthony

  Budgen, Nick

  Fenner, Mrs Peggy

  Bulmer, Esmond

  Finsberg, Geoffrey

  Burden, SirFrederick

  Fisher, SirNigel

  Carlisle, John(Luton West)

  Fletcher, A. (Ed'nb'ghN)

  Carlisle, Kenneth (Lincoln)

  Fletcher-Cooke, SirCharles

  202

  Fookes, Miss Janet

  McQuarrie, Albert

  Forman, Nigel

  Major, John

  Fowler, Rt HonNorman

  Marland, Paul

  Fox, Marcus

  Marlow, Tony

  Fraser, Rt Hon Sir Hugh

  MarshallMichael(Arundel)

  Fraser, Peter (SouthAngus)

  Mates, Michael

  Fry, Peter

  Mather, Carol

  Galbraith, HonT. G. D.

  Maude, Rt Hon Sir Angus

  Gardiner, Qeorge(Reigate)

  Mawby, Ray

  Gardner, Edward (SFylde)

  Mawhinney, DrBrian

  Garel-Jones, Tristan

  Maxwell-Hyslop, Robin

  Glyn, DrAlan

  Mayhew, Patrick

  Goodhart, Philip

  Mellor, David

  Good lad, Alastair

  Miller, Hal(B'grove)

  Gorst, John

  Mills, lain(Menden)

  Gow, Ian

  Mills, Peter (West Devon)

  Gray, Hamish

  Miscampbell, Norman

  Greenway, Harry

  Mitchell, David(Basingstoke)

  Grieve, Percy

  Moate, Roger

  Griffiths, E. (B'ySt.Edmds)

  Monro, Hector

  Griffiths, Peter Portsm'thN)

  Montgomery, Fergus

  Grist, Ian

  Moore, John

  Grylls, Michael

  Morris, M. (N'hamptonS)

  Gummer, JohnSelwyn

  Morrison, HonC. (Devizes)

  Hamilton, Michael(Salisbury)

  Morrison, Hon P. (Chester)

  Hampson, DrKeith

  Mudd, David

  Hannam, John

  Murphy, Christopher

  Haselhurst, Alan

  Myles, David

  Hastings, Stephen

  Needham, Richard

  Havers, Rt Hon Sir Michael

  Nelson, Anthony

  Hawkins, Paul

  Neubert, Michael

  Hawksley, Warren

  Newton, Tony

  Hayhoe, Barney

  Nott, Rt Hon John

  Heddle, John

  Oppenheim, Rt Hon Mrs S.

  Henderson, Barry

  Page, John (Harrow, West)

  Heseltine, Rt HonMichael

  Page, Rt Hon SirG. (Crosby)

  Hicks, Robert

  Page, Richard (SWHerts)

  Higgins, Rt HonTerence L.

  Parris, Matthew

  Hill, James

  Patten, Christopher(Bath)

  Hogg, Hon Douglas(Gr'th'm)

  Patten, John (Oxford)

  Holland, Philip (Carlton)

  Pattie, Geoffrey

  Hooson, Tom

  Pawsey, James

  Hordern, Peter

  Percival, Sirlan

  Howe, Rt Hon Sir Geoffrey

  Peyton, Rt Hon John

  Howell, Rt HonD.(G'df'd)

  Pink, R. Bonner

  Howell, Ralph (NNorfolk)

  Pollock, Alexander

  Hunt, David (Wirral)

  Porter, Barry

  Hunt, John(Ravensbourne)

  Prentice, Rt Hon Reg

  Irving, Charles(Cheltenham)

  Price, Sir David (Eastleigh)

  Jenkin, Rt Hon Patrick

  Prior, Rt Hon James

  Jessel, Toby

  Proctor, K. Harvey

  Jopling, RtHonMichael

  Pym, Rt Hon Francis

  Joseph, Rt Hon Sir Keith

  Raison, Timothy

  Kaberry, SirDonald

  Rathbone, Tim

  Kellett-Bowman, MrsElaine

  Rees, Peter (Dover and Deal)

  Kimball, Marcus

  Renton, Tim

  King, Rt Hon Tom

  Rhodes James, Robert

  Kitson, SirTimothy

  Rhys Williams, Sir Brandon

  Knight, Mrs Jill

  Ridley, HonNicholas

  Knox, David

  Ridsdale, Julian

  Lamont, Norman

  Rifkind, Malcolm

  Lang, Ian

  Rippon, RtHonGeoffrey

  Langford-Holt, SirJohn

  Roberts, M. (Cardiff NW)

  Latham, Michael

  Roberts, Wyn (Conway)

  Lawrence, Ivan

  Rossi, Hugh

  Lawson, Rt Hon Nigel

  Rost, Peter

  Lee, John

  Royle, SirAnthony

  Lester Jim (Beeston)

  Sainsbury, HonTimothy

  Lewis.Kenneth(Rutland)

  St. John-Stevas, Rt Hon N.

  Lloyd, Ian (Havant & W'loo)

  Scott, Nicholas

  Lloyd, Peter(Fareham)

  Shaw, Giles (Pudsey)

  Loveridge, John

  Shaw, Michael (Scarborough)

  Luce, Richard

  Shelton, William(Streatham)

  Lyell, Nicholas

  Shepherd, Colin(Hereford)

  McCrindle, Robert

  Shepherd, Richard

  Macfarlane, Neil

  Shersby, Michael

  MacGregor, John

  Silvester, Fred

  MacKay.John(Argyll)

  Sims, Roger

  McNair-Wilson, M(N'bury)

  Skeet, T. H. H.

  McNair-Wilson, P. (NewF'st)

  Smith, Dudley

  203

  Speed, Keith

  Vaughan,DrGerard

  Spence,John

  Viggers,Peter

  Spicer, Jim (WestDorset)

  Waddington,David

  Spicer, Michael (SWorcs)

  Wakeham,John

  Sproat,lain

  Waldegrave,HonWilliam

  Squire,Robin

  Walker, RtHon P.(W'cester)

  Stainton,Keith

  Walker, B. (Perth)

  Stanbrook,lvor

  Walker-Smith, Rt Hon Sir D.

  Stanley,John

  Wall,Patrick

  Steen,Anthony

  Waller, Gary

  Stevens,Martin

  Walters,Dennis

  Stewart, Ian (Hitchin)

  Ward,John

  Stewart, A. (ERenfrewshire)

  Warren,Kenneth

  Stokes,John

  Watson,John

  StradlingThomas.J.

  Wells,John(Maidstone)

  Tapsell, Peter

  Wells, Bowen

  Taylor, Robert (CroydonNW)

  Wheeler, John

  Taylor, Teddy (S'endE)

  Whitney,Raymond

  Tebbit,Norman

  Wickenden,Keith

  Temple-Morris, Peter

  Wilkinson,John

  Thomas, Rt Hon Peter

  Williams,D.(Montgomery)

  Thompson,Donald

  Wolfson,Mark

  Thome, Neil (llfordSouth)

  Young, Sir George (Acton)

  Thornton,Malcolm

  Younger, RtHonGeorge

  Townend,John(Birdlington)

  Townsend,CyrilD.(B'heath)

  Tellers for the Noes:

  Trippier,David

  Mr. Spencer Le Marchant and

  Trotter,Neville

  Mr. Anthony Berry,

  van Straubenzee, W. R.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on Amendments), and agreed to.
  MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House notes with regret the decision made by PSA within the 1978 agreement to close the Talbot, Linwood factory as a consequence of over capacity despite investment incentives available under the Government's industrial and regional policies; welcomes the company's continuing commitment to manufacturing in Britain; and approves the policies of Her Majesty's Government designed to encourage new employment opportunities in Scotland and other parts of the United Kingdom based upon the achievements of competitive industrial costs and practices.

  European Community (Sugar)
  [Relevant European Community document: No. 10009/80.]
  Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
  8.15 pm
  Mr. Roy Mason: I beg to move
  That this House calls upon Her Majesty's Government to take steps to preserve cane sugar refinery capacity in the United Kingdom; to press for cuts in the beet quotas of other Common Market countries; to safeguard jobs among sugar workers in the United Kingdom, and to assure the African, Caribbean, and Pacific countries that the commitment on the Sugar Protocol stands firm.
  We are very concerned about the pending closure of the Tate and Lyle refinery at Liverpool. We are concerned about the surplus production of sugar within the European Economic Community. We are concerned about the selfish image of a rich industrialised Community threatening the economies in the Third world and constantly placing thousands of our old Commonwealth colleagues' jobs in danger. We are also concerned about the image of Britain under a Tory Government who, among the many African, Caribbean and Pacific countries, are allowing the view to prevail that they may well renege on the sugar protocol of the Lomé convention.
  The Community document before us is relevant to the debate. The sugar quotas for the Common Market countries are to be fixed for the next five years. The total Community A and B quotas are to be reduced from 11·6 million tonnes to 11·2 million tonnes. This is a minuscule reduction compared with the demand for cuts by the Opposition of the other Common Market sugar producers and also requested by the ACP countries and, indeed, by the Commission itself. Even then, it does not mean that there will be a reduction in sugar production. Producers can still produce more than their quota allocation of A and B quotas through C quotas and sell it if they wish on the world market without a Common Market refund; or, as is proposed in the regulation, it can be stored and qualify for storage refunds. The United Kingdom's combined A and B quotas have been cut from 1,326,000 tonnes to 1,092,000 tonnes. In particular, the B quota has been cut from 286,000 tonnes to 52,000 tonnes. Again, they can still produce as much as they wish on the C quotas. Nevertheless, the cut in B quotas represents an unfair cut in British quotas compared with France, Germany and Denmark.
  We oppose the proposed sugar quotas. If agreed by the Council of Ministers, they will mean a further five years of surplus sugar production. Initially, the quotas were fixed in 1974. That was a time of temporary shortage. Between 1975 and 1979 it has cost us over £1,000 million to support a sugar mountain and subsidised exports. For too long, surplus production has been excessively high. In addition, exports have been too high. Until last year there was a sugar mountain, and sugar was being dumped at subsidised rates on the world market.
  In 1979–80 sugar production in the Common Market was a record 12·3 million tonnes, although consumption was stagnant at 9·5 million tonnes. That represents a surplus of nearly 4 million tonnes. In that year, Common Market prices were nearly four times world price levels. The dumping of the surplus on the world market cost European taxpayers £356 million.

  205
  For some years, we have consistently produced a surplus. Of course, one must recognise that occasionally—as the result of rare combined circumstances—there may be a shortage. In one year in seven a shortage may occur. Last year was such a year. The Cuban crop was largely destroyed as a result of rust disease. There was a drought in India that harmed the sugar crop. Therefore, the Soviets were in the world market, prices rose and the Common Market recouped some money instead of losing it. However, that does not detract from the force of one of our main charges, namely, that in most years the EEC has dumped, and will—if new quotas are agreed—continue to dump sugar at subsidised rates on the world market.
  As a result, the EEC is destroying market opportunities for African, Caribbean and Pacific countries as well as for the developing countries. Trade outlets are closed to them and they cannot compete. Their economies are constantly placed in jeopardy. Mauritius, Jamaica, St. Kitts, Fiji and the whole of the Caribbean block depend on the deal agreed when we entered the EEC, which is enshrined in the sugar protocol of the Lome convention. It guaranteed that 1·3 million tonnes of cane sugar could enter the Common Market. That means mainly the United Kingdom. That is one of the main reasons why Parliament resolved that the United Kingdom should enter the EEC.
  If the assurances on New Zealand lamb and butter and on ACP sugar had not been firmly agreed I doubt whether the House would have agreed to enter the Community. The right hon. and learned Member for Hexham (Mr. Rippon) negotiated on behalf of the Government. At the time he made a clear statement. He said that there would be—
  "a secure and continuing market in the enlarged Community on fair terms for the quantities of sugar covered by the Commonwealth sugar agreement in respect of all its existing developing countries."
  He underlined that undertaking and stated:
  "If quotas for beet sugar production were increased in such a way that imports from Commonwealth countries were threatened, it would be a breach of undertakings by the Community".
  That Government guarantee is of crucial importance to all the ACP countries, to their economies and to the livelihood of many poor workers in the cane sugar industries of the old Commonwealth.
  When my right hon. Friend the Member for Deptford (Mr. Silkin) was Minister for Agriculture, he gave an assurance to a deputation of ACP country Ministers on 15 March 1979. He said that he would preserve the traditional outlets in the United Kingdom market for ACP sugar. In reply to similar representations, the present Minister of Agriculture said on 28 June 1979 that he could confirm that the Government's policy was unchanged in that regard. In particular, he said that he endorsed the statement made to the ACP Ministers on 15 March 1979. That commitment to the ACP countries was strongly underlined when, in 1973, a former Minister of Agriculture, Mr. Joseph Godber said:
  "first, that the undertakings constituted a moral commitment by the enlarged Community. Second, that it would be the firm policy of the British Government to ensure that the proposal of the Community would be implemented in accordance with the agreed Commonwealth interpretation of it. The United Kingdom stands by all those assurances without reservation and will continue to do so."
  206
  To me, that is the firmest commitment by the Government. However, the ACP countries now feel that the Government will renege on those specific guarantees. Representatives of the ACP countries met the Minister in June 1980. They stated that the United Kingdom demand for sugar had fallen, that the British Sugar Corporation was then facing a second successive record beet crop, the United Kingdom surplus was becoming larger and that the ACP countries were not responsible for any surplus; their quotas and their supplies remained fixed. But in the meantime, beet output was increasing in the other Common Market countries. The Minister undertook to have further consultations should a situation arise in the United Kingdom market that would be harmful to the interests of the ACP countries. They now believe that the warnings and the fears that were expressed to the British Government were not heeded. With the pending closure of the Liverpool refinery they believe that another major bridge is to be destroyed.
  The sugar cane refineries in Britain are the bridges by which the cane sugar of the ACP countries can gain access to the United Kingdom. One by one, they are being pulled down and we are now reaching the stage where ACP cane sugar will have to be diverted from the United Kingdom. The Hammersmith refinery has been closed, with the loss of 294 jobs and 130,000 tonnes of refining capacity. Sankey refinery was closed, with the loss of 352 jobs and 160,000 tonnes of refining capacity. The refining capacity at Liverpool has been reduced, and the plant at Warker, Greenock was closed with a loss of a further 110 jobs and a further 110,000 tonnes of refining capacity.
  Already, without the complete closure of Liverpool, 1,790 jobs have been lost in the United Kingdom and a refining capacity of 650,000 tonnes has been lost to the ACP countries. That is not solely because of the policies of the present Government. It has been spread over a number of years. One by one the bridges are being pulled down, thousands of jobs are being lost and refining capacity within the United Kingdom is being denied to the ACP countries. To them, the closure of the refinery at Liverpool is the last straw. We have now reached the stage where ACP cane that is normally destined for the United Kingdom will have to be diverted elsewhere within the EEC.
  Mr. Robert Parry: With regard to the closure of refineries and the loss of jobs, is my right hon. Friend aware that 734 jobs have been lost in Liverpool, and 252 in Sankey on Merseyside? If the Tate and Lyle refinery closes, 1,570 jobs will be lost, and in total Merseyside will have lost 2,556 jobs?
  Mr. Mason: I am grateful to my hon. Friend. One of the reasons for the debate is to enable us to highlight the fact that Merseyside has been suffering terribly because of the closures to which he referred, the half closure of the Liverpool refinery, and the pending closure of it. From the point of view of the ACP countries, the closure of the Liverpool refinery is extremely serious. They recognise that the outlet that has been guaranteed to them from the Commonwealth sugar agreement days will be denied.
  Within the Common Market the quotas are still too high. In Denmark, Germany and France, production continues to increase. The percentage increases in the B quotas are 7·8 per cent. in Denmark, 11·7 per cent. in Germany and 9·1 per cent. in France. The percentage

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  increases of B quotas on A quotas in Denmark, Germany and France average 30 per cent. So their quotas are still too high and they are continuing to increase. If this continues, more grain refineries within the United Kingdom will be in danger of closing.
  If larger volumes of beet sugar are produced within the Common Market—and especially by the three countries that I have mentioned—the economic viability of the Tate and Lyle cane refineries will be endangered, more links or bridges with the ACP countries will go, and our commitments to them will be dishonoured. Therefore, the Minister must press for a greater cut in some of the expanding beet producers within the EEC. A cut in EEC quotas could save Liverpool. The beet producers elsewhere in the EEC are the surplus producers of sugar in Europe, not the ACP countries.
  The Government must recognise the impact of this on our domestic industry. The Liverpool refinery is likely to close, with a loss of 1,500 jobs, and with a repercussive affect, causing another 1,500 jobs to be lost in the retail and other sectors. This is already a depressed area, with 51,000 unemployed. The closure could make Liverpool a disaster area.
  We believe that this is avoidable. Let us look first at the figures of sugar demand and supply in the United Kingdom, especially in the light of our Commonwealth commitments. The consumption of sugar in the United Kingdom is about 2·3 million tonnes. Production from sugar beet at home is 1·5 million tonnes. Common Market imports from other Community countries is between 150,000 and 200,000 tonnes. The ACP countries send us, on average, just over 1·1 million tonnes per year. So we have about 150,000 tonnes surplus to our requirements.
  One of the dangers that I suggested of the diversion to Europe now of ACP sugar that ought to have been going to Liverpool is that some will go to France. What a country in Europe to take cane sugar from ACP countries! We divert sugar to French cane refineries, which they can turn off at a tap at any time when there are agricultural price level discussions or fishery talks with Ministers. That will be another stick with which the French can beat us.
  Within the United Kingdom, sugar beet production has risen from 900,000 tonnes at the time of our entry into the Common Market to 115 million tonnes, an increase of about 20 per cent.—albeit, I admit, encouraged by the White Paper "Food from Our Own Resources". But in recent times consumption has fallen, and the British Sugar Corporation will not now reach its estimated target, hence the beet factory closures that have recently been announced.
  But we fairly consistently have a European beet surplus, and it is right that the Minister should help to protect BSC's investment and jobs. This means that he must fight for greater cuts in the French, Danish and German quotas, where the European surplus is really being created.
  Up to two years ago, 350,000 tonnes of Common Market sugar was allowed to come into the United Kingdom, until my right hon. Friend the member for Deptford (Mr. Silkin) prevailed upon United Kingdom importers and users to cut back those imports. The figure was cut roughly to a ceiling of 200,000 tonnes, but last year 178,000 tonnes of sugar came into the United Kingdom from the rest of the EEC. It is known as an insurance by the users in the United Kingdom, but it is some insurance when up to 3,000 jobs in Liverpool can be
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  placed at risk, and 750 jobs in beet refineries in this country, because the users, as a measure of insurance, want to allow 178,000 tonnes of sugar to come from the rest of the Community into the United Kingdom. Every imported tonne of beet squeezes out the ACP cane.
  Thirdly, recognising that the Common Market countries are expanding their beet production and threatening economies and jobs in ACP countries and the jobs of British workers in beet and cane refineries, the right hon. Gentleman must if necessary be prepared to veto the sugar quota proposals in the agricultural price review.
  Mr. Eldon Griffiths: I represent a constituency which has probably the largest sugar beet plant in Britain or in Europe. Is the right hon. Gentleman in favour of a higher quota for sugar beet production in Britain or a lower one? In other words, does he want more beet sugar from our own resources or less?
  Mr. Mason: In a perfect world we would try to strike a balance between beet and cane—[HON. MEMBERS: "Answer the question".] The port refinery trade unions—the Transport and General Workers Union and the General and Municipal Workers Union—would both like to work towards that aim and—[HON. MEMBERS: "Answer the question".]—so would we. I know that the Minister will go for a higher quota for beet producers in Britain. That is mainly because he is upset on their behalf because the French, the Danes and the Germans are to be offered a large quota.
  I do not want Britain to be guilty in exactly the same way as the French, the Germans and the Danes. Therefore, I advise the right hon. Gentleman when he goes into the negotiations not to raise the beet quota for Britain too high. We must try to strike the right balance.
  A reduction in the quotas of beet producers in Europe, or a ban on the entry of the 200,000 tonnes of sugar imports from the rest of the Common Market, could help to save Liverpool. Tate and Lyle's surplus capacity is 300,000 tonnes. It could live with a surplus capacity of 100,000 tonnes. It is possible to save Liverpool within the range that I am talking about.
  If the Minister is concerned about the growing levels of unemployment in Britain, the concern of the ACP countries and the commitment to them on our entry to the Common Market, I suggest that he should take action on one or more fronts. I repeat that refining capacity in Britain is on a dangerous decline. That applies to Hammersmith, Sankey, Greenock and Liverpool. There has been the loss of jobs and a total of 750,000 tonnes of refining capacity has gone. This trend is the death knell of the ACP countries and the Lome convention. It will shatter our world and our bond in the old Commonwealth. It signals a total disregard of the concept of Britain helping the Third world and projects a shameful image for Britain and the Common Market throughout the world.
  The High Commissioner for Guyana, Cedric Grant, speaking on behalf of the ACP Ministers, recently said:
  "The situation, as I am sure you realise, has serious implications for the future of the imports of our cane sugar into the United Kingdom and seriously threatens the validity of the undertakings given to us at the time of Britain joining the EEC. We hope that our deep concern about this matter will be recognised."
  We say to the Government that there must be greater cuts in Common Market beet production. We must save our beet and cane refineries and the jobs that are involved. We must stop the destruction of the cane refinery bridges

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  by which ACP cane sugar enters Britain and the Common Market. The British cane refineries are their salvation. Above all, we must stop building sugar surpluses in Britain which are unloaded on to the world market at subsidised prices, thereby threatening the development of economies of the Third world.
  The Common Market, with the connivance of Britain, is pursuing a selfish sugar policy towards the rest of the world. We must improve the image of the community. Britain must give a lead by honouring its commitments. If we can cut back the Common Market surplus sugar production, and if we can stop invading the world markets with our subsidised surplus production, we can gain our respect and honour and apply for membership of the international sugar agreement. Thereafter we can plan a positive role in the orderly production, exporting and marketing of sugar in the world and, I hope, bring about some order and sanity in the international marketing of this commodity.
  8.40 pm
  The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): I beg to move, to leave out from 'That' to the end of the Question and to add instead thereof:
  'this House notes with regret that both Tate and Lyle Limited and the British Sugar Corporation have had to announce closures following the contraction of the United Kingdom market for sugar; supports the Government's intention of negotiating a quota for sugar beet production in the United Kingdom which represents a fair balance between the interests of cane and beet sugar producers and of pressing for a reduction in total Community sugar quotas; and confirms that recent developments in no way call into question the obligation towards developing country sugar producers which were accepted by the Community under the Lome Convention and which it wholeheartedly supports.'
  I have listened to the speech of the right hon. Member for Barnsley (Mr. Mason) with immense interest. I also read the motion in his name and those of his right hon. Friends upon the subject. His main point of advocacy was that the Government should strenuously try to reduce the sugar quotas of other European countries. He spoke of the possibility, in the coming price negotiations, of vetoing those proposals, if necessary. I must remind him that the quotas of which he complains so bitterly were those agreed to by the Labour Government—quotas that continue to be in operation.
  If I veto any suggestions of changed quotas, as the right hon. Gentleman suggests, the quotas to which his Government agreed will continue to be in operation. Therefore, all that I should do would be to allow the continuation of quotas that are 450,000 tonnes greater than the current proposals of the Commission. Therefore, I ask the right hon. Gentleman to consider carefully the nature of the proposals that he has made, because they would not achieve his expressed objective.
  The right hon. Gentleman must recognise that the Labour Government agreed to the quotas that are currently in force. We are discussing Commission proposals that will place an additional levy on those producing sugar in the Community—2½ per cent. flat levy on the A quota and a 40 per cent. levy on the B quota—and proposals that advocate the reduction of the current sugar beet quotas—those agreed to by the Labour Government—by 3·8 per cent., or a total of 450,000 tonnes.
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  The right hon. Gentleman rightly points out that those proposals include a suggested reduction in our quotas of 17 × per cent. below the quota that the Labour Government obtained, and claimed credit for obtaining, when they were responsible for the negotiations.
  I shall deal clearly with the point about the ACP commitment. I am sorry that in his remarks the right hon. Gentleman may have aroused among the countries concerned fears that are totally without justification. I am glad to say that in the past week my hon. Friend the Minister of State, at a meeting overseas, has conferred with a number of the leaders concerned. I am glad also—I am sure that the right hon. Gentleman will be pleased to hear the news, as will all who support the ACP agreement—that after the announcement of the intended closure of the Liverpool refinery, Tate and Lyle offered a contract meeting its full commitment to all the countries concerned for the next five years.
  Therefore, the Commonwealth countries concerned know that the British Government have reaffirmed their total allegiance to the convention. The European Commission has done the same—this is a European commitment and not only a British one—and the main refiningcompany concerned has offered a further five years of contracts to all the Commonwealth producing countries.
  Mr. David Alton: Has the Minister seen the wording of the contracts? Can that wording be made available to hon. Members who, quite rightly, are now suspicious because of the allegations made earlier be the right hon. Member for Barnsley (Mr. Mason)? Does the right hon. Gentleman feel that a five-year contract is in the spirit of the Lome convention? Is he content, every five years, to go through this "Will we or won't we" saga?
  Mr. Walker: That is the way that it has always been done. Understandably, the convention is a commitment—irrespective of refining or anything else—to buy 1·3 million tonnes of sugar from ACP countries at the price being paid for beet in Europe. That commitment is irrespective of the refining capacity. Refining firms, whoever they may be—Tate and Lyle is the most dominant—must agree commercial contracts with growers. In the past, they have always been five-year contracts. Current contracts will be renewed next year. Because of potential fears about the closing of the Liverpool refinery, Tate and Lyle made an offer to all the countries concerned to take the full contracts for the coming five years.
  Mr. Eric S. Heffer: Will the Minister say whether the Governments of ACP countries have issued a statement saying that they are happy with what has happened? They issued a statement on 22 January pointing out that the closure of the Tate and Lyle refinery in Liverpool would be disastrous. Have they now said that that closure does not matter?
  Mr. Walker: I do not expect statements from the those Governments saying that they are blissfully happy because they have received contracts for the next five years. The British Government and the European Commission have confirmed that the commitments of Britain and Europe under the Lome convention remain in total. I am sure that the offer made last week to renew their contracts in total has removed their anxieties that the closure of the Liverpool refinery could mean an end to the contracts.
  Mr. Parry: Was not the spirit of the Lomé convention that 1·3 million tonnes of sugar would be imported, refined and consumed in the United Kingdom? Will that still happen?
  Mr. Walker: At the request of the countries concerned, the Lomé convention made a European commitment. As the hon. Gentleman knows, for a number of years some of the Lomé ACP countries have chosen to have refining carried out on the Continent rather than in Britain. During past years Tate and Lyle has refined 1·16 million tonnes of sugar under the Lomé agreement. It has completed contracts for a larger amount, and it has offered to take contracts for the coming five years. I am pleased to confirm the position of the ACP countries' contracts for the coming five years and also the reaffirmation by the Community and the Commission that the Lomé convention will be strictly adhered to.
  It is important for the House to recognise certain points when deciding what the right hon. Member for Barnsley referred to as the balance in the market between beet and cane. He said that the previous Labour Government's White Paper "Food From Our Own Resources" provided for a beet production of 1·3 million tonnes. They were shareholders in the British Sugar Corporation. As the responsible ministry, they pursued the agricultural policies concerned. They said both to our agricultural industry and to the British Sugar Corporation that that was their objective. It remained their objective until they left office.
  The right hon. Gentleman did not mention the 1979 White Paper, published only a couple of weeks before the general election, in which it was made perfectly clear that the Government intended and wanted sugar beet production in Britain to continue to rise. The first brake put upon that attitude was made by myself. When I took office the Commission had put forward proposals for sugar quotas. I examined the obviously declining consumption of sugar and decided that if the Labour Government's objective of 1·3 million tonnes of beet remained the objective of this Government there would be considerable potential damage to the cane refining industry.
  Therefore, it was my decision to reduce the quota from the 1·326 million tonnes that the Labour Government obtained, and to reduce their declared objective of 1·3 million tonnes of beet production to 1·15 million tonnes. In doing so, I was lobbied by trade unionists from both the cane and the beet refining sectors. The trade unionists from the cane refining sector expressed anxiety that the position might result in difficulties in their industry, but I think that I am correct in saying that they were relieved that I had reduced the figure by that 200,000 tonnes. The sugar beet trade unionists—the same trade unions, but obviously representing different members—complained strongly about my announcement and stated that in their judgment their industry had been successful, deserved support, and had been positively encouraged by the Government to invest and to create the capacity that existed.
  At the behest of the Government, and with the Government as a substantial shareholder, the British Sugar Corporation invested £150 million in capital investment to reach the targets set for it by the Labour Government. As a result of reducing that quota and of adhering to that over virtually the whole of the past two years, under pressure from both sides, we have the sad circumstances of this debate. Tate and Lyle has announced the closure of the
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  Liverpool refinery and the British Sugar Corporation has announced the closure of four of its factories, with a resulting 750 permanent staff unemployed as well as 500 staff who were employed during the sugar beet campaign.
  It therefore cannot be said that the Government decided to give preference to beet sugar as opposed to cane. It can, however, be said that for a substantial period I have made it clear to both the cane refining industry and the beet refining industry that the balance of 1·15 million tonnes for beet compared with 1·16 million tonnes for cane refined last year is one that in the current circumstances, I considered it correct to make.
  Certain trade union leaders came to see me yesterday on this subject. They stated that Tate and Lyle's suggestion that the solution lay in reducing the sugar beet quota for Britain to 936,000 tonnes—which would probably result in a further four sugar beet factories being closed, with all the redundancies that that would involve—was not a solution which they favoured. They did not favour saving unemployment in one locality by creating it in another.
  Mr. James A. Dunn: The Minister will also recall that when he received a deputation of hon. Members from Merseyside the same point was put to him, with the added suggestion that he might consider encouraging an export market for beet sugar.
  Mr. Walker: Perhaps the hon. Gentleman will allow me to deal with the idea that one could solve the problem by other European countries reducing their sugar industries. As the right hon. Member for Barnsley knows, it is clearly unlikely that countries that have had substantial quotas, agreed to by the Labour Government, and have built up industries and employed people in them, will happily and readily close those businesses and create unemployment. However, from a negotiating point of view, so long as one does not introduce new proposals with lower quotas—which is and has consistently been the proposal of the United Kingdom Government—the existing quotas continue to be in operation.
  I should like to discuss the two forms of closure. First, there is the difficulty with regard to Tate and Lyle, in Liverpool. A number of hon. Members will know that I have received a delegation of hon. Members and a delegation representing all strains of political and commercial thought in Liverpool, who pointed out the grave situation that exists in Liverpool and the substantial further increase in unemployment that such a closure will create. I recognise that, and the Government also recognise the problems of Liverpool.
  Tonight is not the occasion to list the substantial number of measures that the Government have decided to take—either of specific application to Liverpool or general application to Liverpool—to endeavour to assist with its problems. However, in taking its basic decision Tate and Lyle stated that it could refine virtually the whole of its current throughput by closing the Liverpool refinery. It stated that it was making a substantial loss on the Liverpool refinery with its present throughput, and that there were disadvantages in the Liverpool refinery, in terms of its geographical location vis-a-vis the docks and the additional costs involved.
  When Tate and Lyle first intimated, in December, that it was considering this closure, I immediately asked the company to enter talks with the Department of Industry to

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  see whether it could make any changes in its Liverpool refinery, or whether there were any possibility of changing the types of activities that it was pursuing at Liverpool in respect of which Government grants under the Industry Act could become available and might affect its decision. Such talks were held.
  I gather that one alternative suggestion was the possibility of a modernised refinery near to the port. The difficulty was that with a modern refinery, which was more suited to the capacity available, there would still be the loss of the majority of jobs. Despite the range of aids on offer and available the company decided that it would close the Liverpool refinery and that no alternative refining capacity could be made available in Liverpool.
  Only two suggestions have been made to help solve the problem. One has been a direct reduction in quotas for the sugar beet industry, which I do not believe is a correct solution. It would be a particularly dishonourable solution, especially when the previous Government positively stimulated, encouraged and urged the capacity to be increased, the investment to be put in, and the men to be taken on.
  The right hon. Member for Barnsley used the word "renege" when he spoke about the ACP. There is no intention of doing that. However, I have had to renege upon the Labour Government's firm commitment and objective of a 1·3 million-tonne beet production in this country. As a result of that, a number of factories have already decided to close.
  I am under equal pressure from the British Sugar Corporation. For the last two years I have stated that there is no way in which I would support or approve of its going up to its original targets. Early in December I met groups representing the trade unions from the cane refining side of the industry. They urged me to confirm in writing that if there were no agreement on quotas this year and if I used the veto on the Commission's current proposals, as the right hon. Gentleman suggested, the existing quotas would continue in force.
  The existing quotas for the British Sugar Corporation would be about 1·3 million tons. At the beginning of December, before there was any talk of a decision to close the Tate and Lyle refinery at Liverpool, I told the cane refining men that I would put it in writing—and did—that the Government would never support any quota for beet production above the 1·15 million tons that we had announced. We informed the British Sugar Corporation that that was our firm opinion and that we were not going to change it. Therefore, I say to the House that I very much regret that in both cane and beet refining there are closures, redundancies and unemployment. The Government have succeeded in getting the balance between the two to a degree that is of much more advantage to the cane refiners than was the case with the policy that I inherited when I came into office.
  Mr. Teddy Taylor: Could my right hon. Friend tell us what Tate and Lyle now estimate their capacity of cane to be, realistically? Is it about 1 million or 1·1 million tonnes? Have they given him a figure?
  Mr. Walker: They said 1·1 million.
  Therefore, the position is that we have endeavoured to see, by the decision that I took shortly after coming into office—reversing the policy that I inherited—that refining
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  in this country is sufficient to make sure that the ACP obligations are kept, to make sure of the continuance of a substantial cane industry in this country and to make sure that the British Sugar Corporation, although treated harshly by a reduction of 200,000 tonnes in its quotas, had good notice that that was going to happen.
  Mr. Tony Marlow: My right hon. Friend talked about redundancies and closures—very unpleasant things. Can he tell the House and the country why we are contemplating these closures and redundancies, be they in cane or in beet, at a time when we are still importing nearly 200,000 tonnes from the Community? After all, when we joined the Community we were not importing anything like that. Would it be fair to say that during the time that we have been in the Community, excepting the period of his stewardship, we have been outflanked?
  Mr. Walker: No, that is untrue. When we joined the Community, in terms of cane, we decided and agreed upon the Lome convention of 1·3 million tonnes. The Community has adhered totally to that, and that has been refined. What is more, I would say to my hon. Friend that for most of the years that this has been in existence it has been of considerable financial benefit to the ACP countries concerned because they have been provided with a price connected with the European price, which has been well above the world price for most of those years. That has been the position in terms of obligations to the cane sugar industry.
  The purchase by a number of British food producers of sugar from sources apart from the British Sugar Corporation and Tate and Lyle was a commercial decision. The right hon. Member for Barnsley said that that came down from 350,000 tonnes to less than 200,000 tonnes, but it is a commercial decision, which they have freely taken, not because they were outflanked on price—the price is consistent throughout the Community—but because they decided that they required other sources of supply.
  We have a situation, therefore, in which, as a result of this agreement, the cane producers of the Commonwealth have benefited in most years. This is the first year for some years when the world price is higher than the European price. Therefore, whilst our consumers in this country are benefiting from that, the ACP countries are not. But for four of the five years they have benefited on a substantial scale.
  As I said, I regret the difficulty of the situation in an area where sugar consumption is reducing. It has created problems for both sides of the industry, but I say to the House that we have honoured and will continue to honour the Lome agreement, and that we have decided objectively what is fair and reasonable for both sides of the industry.
  9.5 pm
  Dame Judith Hart: I am astonished that no Foreign and Commonwealth Office Minister is sitting on the Government Front Bench, ready to participate in the debate, as the motion before the House explicitly refers to the Lomé convention. As the Minister knows, I was very much involved in the Lomé convention. I can understand to some extent why no Minister from the Foreign and Commonwealth Office is present. During the all-night negotiation of Lomé in Brussels we rested for our final

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  agreement upon my right hon. Friend Lord Peart, the Minister's predecessor, reaching a conclusion with his colleagues in the EEC on the sugar protocol. It was only at about 6 am that we put the two together and were able to establish Lomé with the sugar protocol. Although the two issues are separate they are deeply conjoined, certainly in the view of the ACP countries.
  I appreciate the difficulty of achieving a balance between beet sugar refining capacity and the jobs involved here, and cane sugar refining capacity and the jobs involved here. I am glad to have the assurance from the Minister—indeed I have had it from his right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs—that the Lomé commitment stands. That is good, and I accept all that the right hon. Gentleman said about that.
  I come now to the smaller print—the EEC agricultural policies, our engagement in those, the refining capacity for cane sugar in the United Kingdom, and how far our commitment to refine cane sugar which is intrinsically within the Lomé convention will be met after the closure of the Tate and Lyle factory.
  On the subject of the relative production of beet and cane sugar, the right hon. Gentleman is right to refer back to the decisions taken by the previous Government and the policies they were pursuing. I remind him that we are now in an extremely deep depression—I do not put the whole responsibility for that, although many would, upon the Government—and that has an affect upon the consumption of sugar here and in the rest of the world, particularly in the developing countries. Once developing countries begin to get off the ground one of the first commodities they want is sugar. Only in a few instances do those countries have refining capacity and when they do they are very proud of it.
  The fall in demand for sugar which has taken place during the last few years is a further reflection of world recession, particularly of recession in the developing countries themselves. Perhaps the right hon. Gentleman should involve himself in the discussions about the British Government's response to the Brandt Commission's report, because it affects sugar.
  I come back to what I was saying about beet and cane sugar. This should change the attitude towards the relative degree of production of beet and cane, and the EEC commitments to its own beet sugar producers. I welcome the right hon. Gentleman's support for the reduction of a beet sugar quota here. I speak as one of the comparatively few Labour Members who has a considerable farming constituency. My constituents do not grow beet sugar, but I know that anyone who grows beet sugar in Norfolk or wherever could equally grow grain. Grain is useful to world food supplies. Beet sugar is something that can be replaced by cane sugar production in the developing countries.
  Mr. Paul Hawkins: When the right hon. Lady talks about replacing grain by sugar, does she not realise that sugar beet is a break crop in the growing of cereals? One must have a break crop, particularly a crop such as this, that is not only profitable but that breaks the cereal succession, which, if it is carried on too long, leads to diseases.
  Dame Judith Hart: I accept that. It goes without saying. But to grow beet sugar or some other crop as a
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  break crop is a different matter from the beet sugar quota agreed within the EEC. It is possible to arrive at a sensible policy for agriculture here which integrates with world food policy.
  We know that EEC subsidies are paid to various groups of farmers to switch production from one crop to another. My constituency happens to have the major share, such as it is, of the glasshouse industry in Scotland. It is only two or three years since the EEC offered subsidies to glasshouse producers to pull down their glasshouses so that the Italians, the French and those in the southern part of Europe could grow tomatoes.
  If there is a CAP that offers subsidy to switch crops, why is there not a subsidy for beet sugar? Why can we not have an integrated CAP policy—though I despair of any sense or logic in the CAP—which links world food policy with the needs of our own refining capacity, whereby less beet is grown in Europe as a whole and, if need be, Norfolk farmers are subsidised to introduce different break crops and grains? Increased grain production would increase world food supplies.
  I welcome what the right hon. Gentleman said about the change of emphasis on beet sugar production in the light of the changes that have taken place during the past few years. However, I wish he would go further. I wish that we could have a reasonably organised CAP. I accept what the right hon. Gentleman said about the Tate and Lyle factory in Liverpool. In a letter to me last week the Foreign Secretary stated:
  "Tate and Lyle have said that they are prepared to continue to buy the same amount of ACP raw sugar as hitherto, and that they will try to find a market elsewhere in the Community for the amount they will not be able to refine themselves in the UK following the closure of the Liverpool refinery".
  I believe it is that to which the right hon. Gentleman refers when he talks about the assurances given to the ACP sugar producers.
  Mr. Peter Walker: May I bring the right hon. Lady further up to date? Tate and Lyle has now offered specific contracts either to take the total as it previously was and to be the party responsible for totally fulfilling the contracts or, if the other countries concerned prefer to place the contracts for the balance of what they will be refining themselves with other European refiners, to allow them to do so. The company has given ACP producers a categoric position for the next five years.
  Dame Judith Hart: The letter was dated 9 February That is why the Foreign Secretary adds:
  "But even if it could not be, the Lomé commitment stands."
  However, I repeat that the company is saying that it will try to find a market elsewhere in the Community for the amount that it is not able to refine itself.
  A letter from Lord Jellicoe states:
  "The closure of Liverpool will leave available for other markets in the EEC not more than 125,000 tonnes of ACP sugar…Our preliminary enquiries lead us to believe that there is an excellent chance of placing any sugar surplus to our requirements, mostly to France, where there are three cane refineries, but possibly also elsewhere."
  There may be more up-to-date information, but the letter leads me to believe that the Government are permitting Tate and Lyle to close and to leave Livepool with the attendant loss of jobs.
  Mr. James A. Dunn: The information that Lord Jellicoe gave to my right hon. Friend in that letter is not the same as the information that I received when I visited

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  him in the company of my hon. Friends the Members for Liverpool, Walton (Mr. Heffer) and Liverpool, Scotland Exchange (Mr. Parry). Lord Jellicoe categorically said then that the surplus for overseas refining would be no more than 60,000 tonnes. The figure has dramatically changed in the past few days.
  Dame Judith Hart: The Foreign Secretary's letter mentions 60,000 tonnes. However, let me quote Lord Jellicoe's letter in full:
  "You are correct in assuming that there will be some increases in the capacity of our London refinery, by the removal of bottlenecks, so that we expect in future to be able to refine around 1·1 million tonnes of sugar in an average year. The traditional tonnage of ACP sugar that has been imported for refining in the UK has been 1·225 million tonnes. The closure of Liverpool will leave available for other markets in the EEC not more than 125,000 tonnes of ACP sugar, some of which has in any case recently been finding a home elsewhere in the EEC. Our preliminary enquiries lead us to believe that there is an excellent chance of placing any sugar surplus to our requirements, mostly to France, where there are three cane refineries, but possibly also elsewhere. I believe that there is every prospect that all the 1·3 million tonnes of ACP sugar should continue to be imported and consumed within the Community, although the quantity coming to the United Kingdom will reduce slightly."
  Our commitment to Lome, which I welcome and which is correct, is bringing about the loss of jobs and refinery capacity here, but not in France and other member countries of the Community. That does not make much sense. It does not make sense when considering the workers in Liverpool and our commitments to the ACP countries.
  My final point is important. If the right hon. Gentleman does not wish to take note of it, his officials may. The Labour Party has a commitment to leave the Common Market—
  Mr. Robert Atkins: Which Labour Party?
  Mr. Heffer: There is only one Labour Party.
  Dame Judith Hart: I refer to the official Labour Party. I am certain that one of the main concerns of some of my former hon. Friends who are in the process of moving elsewhere is that that commitment should not be honoured. However, it is a policy decision of the Labour Party that we should leave the EEC if we are re-elected to power. If we are re-elected, and when we carry out that commitment, in terms of Lome, the ACP and the sugar protocol we shall have to consider how to honour the obligations to the ACP countries.
  My preliminary discussions with some of the sugar producing countries show that they would welcome our going back to the Commonwealth sugar agreement. Should that happen, we would need the cane sugar refining capacity in Britain. Officials should at least take account of that when they consider what would happen if there were a change of Government.
  9.23 pm
  Mr. Geoffrey Rippon: I shall not follow the right hon. Member for Lanark (Dame Judith Hart) into the question of divisions of opinion in the Labour Party. Still less shall I speculate on how it might honour commitments which it had unilaterally abrogated. The right hon. Lady spoke from her wide experience about a matter that deeply concerns all hon. Members.
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  It is necessary to remind ourselves of the nature and extent of what I described at the time as both a specific and a moral commitment to the developing sugar-producing countries of the Commonwealth. That commitment was made by the Community and is frequently repeated and accepted by Her Majesty's Government. It is embodied in title 3 of protocol 22 of the Treaty of Accession.
  As President de Gaulle once said, the trouble with treaties is that they are like roses—they fade, they fade. The memory of what was intended lapses, the circumstances change and the process of evolving new mechanisms and arrangements overlaps the original concept. As the right hon. Lady said, that happens particularly at a time like the present, when there is a grave international trading recession. To put it another way, when one is up to one's behind in alligators one is apt to forget that one's original purpose was to cleanse the stream.
  Our debate takes place against a background of growing unemployment. It causes anxiety to both cane sugar and beet sugar producers. In the difficult determination of what closures are necessary—whether of the Tate and Lyle refinery in Liverpool or of sugar beet factories elsewhere—we must keep faith with the Commonwealth countries which relied upon the word of honour of Britain and the Community. It is important to put clearly on the record exactly what we promised and why we promised it.
  The essential history of the negotiations can be found in the Hansards of 22 February, 17 May, 9 June and 21 July 1971. In our discussion on 22 February 1971, I tried to explain to the House that the Commonwealth sugar producers wanted to be able to plan production ahead with the degree of assurance that they had under the Commonwealth sugar agreement. For that they required—and still do—what the Jamaican Minister of Trade and Industry, Mr. Bob Lightbourne, described as "bankable assurances". That phrase came up thereafter in our discussions. He wanted assurances that would enable bank managers to provide the credit necessary for the roll-on of sugar production.
  Cane sugar production has to be planned a number of years in advance. It is more difficult than planning for sugar beet production. A long process of negotiation followed, until I was able to tell the House:
  "As regards sugar, the Community on 11th May undertook to bear in mind the importance of sugar for the economies of the developing Commonwealth countries concerned after 1974, and suggested that the question should be settled within the framework of negotiations on whatever form of association or trading agreement these countries wanted. I replied that this approach was helpful but needed clarification. I did not think that the undertaking, so far as sugar was concerned, was sufficiently firm to provide the sort of assurance which the Caribbean countries and other sugar producers had always needed.
  In the early hours of 13th May, after further contacts, the Community put an additional text to us. They now said that it would be the firm purpose of the enlarged Community to safeguard the interests of the countries in question whose economies depended to a considerable degree on the export of primary products, in particular sugar. This text amounts to more than a declaration of intention. It is both a specific and a moral commitment.
  I can now say this to the developing sugar producing countries of the Commonwealth. There would be room in the enlarged Community, of which Britain would be part, both for present quantities of sugar from these countries at remunerative prices and for the development of sugar beet production."—[Official Report, 17 May 1971; Vol. 817, c. 885–6.]
  That declaration, including the words "firm purpose", was embodied in the protocol as a translation of the phrase

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  "aura àcoeur". That caused a lot of fun, because the next day the Evening Standard employed its "dial a Frenchspeaking expert" to translate what it meant. We were told that it meant "It is right there, written in the heart of me. It is in my soul. It is in my being." When the Evening Standard reporter said that that sounded religious, even hymn-like, the reply was "Well, it is rather."
  Whatever the quibbles about the French translation, the English version is clear and official. It binds the Government and the House, because it was the agreement that both sides of the House demanded continuously. It provided a wide protection for the sugar-producing countries of the Commonwealth so that we would have regard to their interests, and not simply to their access to the Community market. That is clear from all the discussions which took place with the Commonwealth countries which culminated in the Lancaster House conference of 2 and 3 June 1971. The communiqué is set out in full in Hansard of 9 June.
  It needs to be emphasised that the independent developing Commonwealth sugar producers accepted the Community's proposal, which is now in the protocol only on the basis of the Lancaster House communiqué. The essential paragraph in that communiqué is the one that reads:
  "There was a full discussion of the Community's offer made on sugar after 1974. The British delegation assured other delegations that the Community's proposals constituted a specific and moral commitment by the enlarged Community, of which the United Kingdom would be a part. The British Government and other Commonwealth Governments participating regard this offer as a firm assurance of a secure and continuing market in the enlarged Community of fair terms for the quantities of sugar covered by the Commonwealth Sugar Agreement in respect of all its existing developing member countries. The developing Commonwealth countries will continue to plan their future on this basis."—[Official Report, 9 June 1971; Vol. 818, c. 1062.]
  Dame Judith Hart: I want, as one of those involved in the 1974 negotiations, to endorse every word that the right hon. and learned Gentleman has said.
  Mr. Rippon: I conveyed the text of that communiqué—this was all said in 1971—to the Council of Ministers on 7 June. I did so entirely on the basis that the communiqué was not simply the British interpretation but the Community interpretation that should be placed on the agreement that we had reached. They received the statement. They placed no interpretation of their own on it. For my part, then and now, I took the view that this was all that was necessary. They had already given their own firm assurance, however one may choose to translate "aura à coeur".
  Whatever view we take, so far as the British Government are concerned there can be no possible doubt about the position. In the event—this is where the right hon. Lady comes firmly into the picture—although many people forecast a battle royal the Community Council of Ministers in 1974 formally endorsed the 1·4 million tonnes commitment, as they put it, "on a continuing basis". The Community's agreement—this is also important—that the great bulk of the Commonwealth sugar would be exported "in accordance with traditional patterns of trade" meant that it would come to United Kingdom refineries, as before, so long as the price was fair.
  Those undertakings, in my view—I am again at one with the right hon. Lady—remain intact. They remain intact regardless of the negotiations subsequently, such as
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  the Lomé sugar protocol of 1975. I think that the right hon. Lady will agree that Lomé does not replace the original agreement. It merely underlines and underpins it. We must hold firmly to that.
  Dame Judith Hart: Quite right.
  Mr. Rippon: There are difficulties about making long-term arrangements concerning primary products. In the absence—we could not negotiate this—of a guaranteed weather clause in the Treaty, supplies are bound to fluctuate from year to year. Equally, as we know, consumption patterns are bound to vary. Of course, we hoped, and I indicated, that there would be room in the enlarged Community both for the Community's interest in developing sugar beet production and as for the Commonwealth sugar. At the Lancaster House conference, I made a statement to which the right hon. Member for Barnsley (Mr. Mason) referred. I stated clearly that if quotas for beet sugar were increased in such a way that imports from Commonwealth countries were threatened, it would be a breach of undertakings by the Community. I went on:
  "The Community's regulations clearly laid down that production in excess of quotas must be disposed of on the world market, and, therefore, could not be a challenge to Commonwealth cane sugar."
  I wish, like the right hon. Gentleman, that the Community would become members of the international sugar agreement. I am sure that this is the right solution in the longer term. Meanwhile, a situation has arisen where the Governments of the principal suppliers of cane sugar to the United Kingdom have undoubtedly shown concern. Perhaps subsequent discussions have modified that concern but they were concerned. They wrote to me, and no doubt to the right hon. Lady, to tell us that they were concerned about the announcement that Tate and Lyle intended to close the Liverpool refinery and about the circumstances that had caused that decision. I share that concern.
  They fear not only the next five years but the long-term weakening of the only secure bridge over which their cane sugar can gain guaranteed access to the Community. That is why I initially wondered—and, to some extent, still do—why the Government had not backed the proposal that the Commission put forward last year. It would have reduced the British quota below the figure now sought. It would also have given the Tate and Lyle refinery its best chance of operating profitably and at its present capacity.
  I can understand why the French Government should fight for higher sugar beet quotas at our expense. After all, the French have always blamed us for the fact that they have a sugar beet industry. They say that it is our fault because we blockaded Napoleon. However, I cannot understand why a British Government, in the face of previous assurances, should ever fight for sugar beet quotas that may undermine the position of ACP countries, both now and in the long-term future.
  In a changing situation ad hoc arrangements can be, and have been, made with Commonwealth sugar producers. However, I emphasise that they must be agreed. In practice, less ACP sugar has gone to Tate and Lyle than the maximum now proposed. It is not a matter of blaming the ACP countries. On the contrary, the ACP countries have acceded to our requests and have placed sugar elsewhere from time to time. They have played fair by us, and we should play fair by them.

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  I have been very much encouraged by my right hon. Friend's speech. I understand that later consultations were satisfactory to the ACP countries. I shall study my right hon. Friend's speech more carefully tomorrow. I rely absolutely on his remarks about the consultations that took place and the degree of satisfaction felt by the ACP countries. My right hon. Friend and the majority of the Cabinet were parties to the clear and unequivocal commitment that was given to ACP countries. I take my right hon. Friend's speech as a solemn assurance that those undertakings will not be breached and that the Government are not for turning on this issue.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I remind the House that if the business motion is carried the debate will end at 11.30 pm. I should point out that 20 hon. Members wish to speak.
  9.38 pm
  Mr. Robert Parry: My right hon. Friend the Member for Barnsley (Mr. Mason) has given the historical background to this debate and my right hon. Friend the Member for Lanark (Dame Judith Hart) has touched on the question of the Lomé agreement. I hope that the House will understand if I deal mainly with the proposed closure of the Tate and Lyle plant, which lies in my constituency. I wish to deal with the effects that that closure will have on the people of Liverpool, and particularly on those who live in the inner city areas. On Merseyside, more than 100,000 people are unemployed. In the special development area nearly 16 per cent. are unemployed.
  The position in Liverpool is far more serious. In inner city areas—including my constituency—unemployment has reached 40 to 50 per cent. Those are official figures, given by the Under-Secretary of State for Employment just before Christmas.
  Recently, the Daily Mirror carried out a survey in a multi-storey block of flats in my constituency—Logan Towers—which is situated close to the refinery. That survey showed that 50 per cent. of the people living in those flats were unemployed. The deputation that met the Minister this morning included people from all strata of society. I think that the Minister was touched when the Roman Catholic archbishop. the Rev. Derek Warlock, said that only last Sunday he went to St. Anthony's church, in the Scotland Road area, and found that, in a parish that formerly had 12,000 people, only 2,000 remained. Out of that 2,000, 250 worked at the Tate and Lyle, refinery. That gives some indication of the tragic consequences that will accrue in the inner areas of Liverpool. Mr. Runge, the managing director of Tate and Lyle, told the Minister that in his opinion the work force at Tate and Lyle was second to none.
  We are pointing out that the closure of the Tate and Lyle refinery is due not to bad industrial relations or poor production but to the old question of the production of sugar beet in the United Kingdom. The Tate and Lyle workers are not opposed to the British Sugar Corporation producing more sugar. They insist—they have asked us to support them—that the 1·3 million tonnes of ACP sugar should be imported, refined and consumed in the United Kingdom. They say that if the British Sugar Corporation
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  wished to refine more than the 936,000 tonnes that has been proposed the surplus should be exported. The cane sugar workers have never put forward any proposals that would lead to a loss of jobs in the beet industry.
  Following an all-party meeting of hon. Members, the Minister wrote to me last Wednesday saying:
  "On the question of exports, I made clear that if either or both companies"—
  That is Tate and Lyle and the BSC—
  "were able to export and hence maintain a higher throughput than could be absorbed by the United Kingdom market, I would welcome it. But exports are less remunerative than home sales and I could not require one company to incur the cost of exporting to ease the problems of the other."
  Is there no way that a joint venture could be set up between the British Sugar Corporation and Tate and Lyle to export surplus sugar? I understand that the British Sugar Corporation is totally opposed to that, but I see no reason whatever why such a venture could not be set up. The Minister said that it would not be against the public interest.
  Will the Minister of State consider the question of an increase in the regional premium from £7·50 to £20 a tonne? I understand that that would be borne by the EEC budget, and would cost £4·4 million a year gross. The net figure would be lower because the EEC budget would have to pay for absorbing the surplus sugar. That cost is very small beer when we consider that United Kingdom taxpayers and consumers have paid £1 billion over the last five years—£200 million a year. That is the highest contribution of any member State. Will the Minister really fight in Europe for the workers of Liverpool? Will he really put his shoulder in their corner?
  Unemployment on Merseyside has reached such tragic proportions that we cannot face any more closures. There are 30,000 young school leavers under the age of 18 unemployed on Merseyside. Is the Minister aware that at Tate and Lyle there are more than 100 young apprentices serving their time who will be thrown on the scrap heap half way through their training? If the majority of people who are 50 years or more are made redundant, they will have no possible chance of finding any alternative employment.
  The estimated cost of the closure of the refinery is £30 million. The bill for social security and loss of revenue that will follow will not be far short of £10 million a year. That does not take into account the degradation and feeling of absolute despair and despondency of the people in an area which has suffered so much.
  In the last year or so, even in the area where the refinery is situated, we saw the closure of Tillotsons, with the loss of nearly 500 jobs. Around the corner, we saw the loss of the CBS Engineering and Ship Repairing Company, again with the loss of several hundred jobs. The cane workers have also suffered their share of losses in the industry. My right hon. Friend the Member for Barnsley has already mentioned the number of jobs that have been shed there.
  As I said earlier, in an intervention, Liverpool cane workers are carrying the can. They are carrying more than two-thirds of the total number of jobs which have been shed by the Tate and Lyle company.
  I asked the Minister of State a question when I was dealing with the position at Tate and Lyle. He replied:
  "One of the tragedies of the situation is that this should be seen simply as a beet sugar versus cane sugar lobby. Cane sugar is important, and so is beet. Beet production holds an important position in British expenditure. We believe that there is a place

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  for beet sugar and cane sugar within our sugar refining capacity and we intend to keep a proper balance to the benefit of both." [Official Report, 5 March 1980; Vol. 980, c. 488.]
  Does the Minister of State feel that a proper balance has been kept? Over the past six years, the British-grown beet share of the home market has increased from 26 per cent. to 49 per cent. I am not opposed to the British Sugar Corporation's growing more beet provided that it is exported, but I would be totally opposed to any further expansion of the British Sugar Corporation output at the expense of the workers in Tate and Lyle at Liverpool.
  I understand that the proposed merger with S. and W. Beresford is before the Monopolies and Mergers Commission and that the report is due in two weeks' time. Labour Members of Parliament were advised by trade unions that if the merger were to go through—I understand that it would not be against the national interest—the Tate and Lyle refinery would be saved, because the new company could then export cane.
  The Minister's point that the Tate and Lyle company has signed a five-year agreement with the ACP countries does not wash very much with me, because the various high commissioners for the ACP countries have shown their grave concern over the closure of the refinery. They feel, as we do, that this is the thin end of the wedge and that the bridges have been taken down.
  There were three preconditions for the British Government's accession to the EEC, and the commitment to the ACP countries was one of them. The other two were the British contribution to the EEC budget and the imports of New Zealand dairy farm products. We know about the fights that have been put up by successive Governments in that connection, but they have not been very successful in defending the interests of the ACP countries. Those countries are rightly asking that their sugar cane should not have to suffer. They fear that if assurances given about preserving the cane markets can be breached once, they can be breached again.
  The Minister has the right of veto on the new sugar regime on 1 July 1981. Will the right hon. Gentleman use his veto? If not, why not? Will he use it to ensure that Tate and Lyle will be able to remain open on Merseyside? If the closure takes place it will displace surplus home sugar from the United Kingdom. However, the United Kingdom taxpayer will still have to pay £1·8 million.
  The Government are pumping cash into Liverpool in the form of inner city area payments. I am sure that the hon. Member for Liverpool, Wavertree (Mr. Steen) will refer to those payments if he succeeds in catching your eye, Mr. Deputy Speaker. Liverpool is also receiving Government assistance in the form of activity by the National Enterprise Board and the urban development corporation. It is crazy that the Government are pumping money into Liverpool at one end when there is a constant outflow of jobs at the other end.
  I was delighted to note that there were seven Conservative Members among the group) of Members that saw the Minister last week. If they are so concerned about the loss of jobs on Merseyside, I hope that they will demonstrate their concern by abstaining when the Division takes place. I should prefer Conservative Members to vote against the Government. That would demonstrate the strength of their feeling about the loss of jobs in Merseyside constituencies. I voted against the Labour Government on issues on which I felt strongly, and I ask Conservative Members to think again.
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  I was disappointed by the Prime Minister's refusal to meet an all-party delegation to discuss these issues. In the past, my right hon. Friends the Members for Huyton (Sir H. Wilson) and for Cardiff, South-East (Mr. Callaghan) have met all-party delegations from Merseyside. I shall be receiving next Thursday, a document produced by the three main trade unions involved—namely, the Transport and General Workers Union, the General and Municipal Workers Union, and ASTMS. I believe that the document will contain several options. If the Government are interested in saving the Liverpool Tate and Lyle refinery, one of the options could be the answer to the problem.
  When I receive the document I shall present it to the Prime Minister. The right hon. Lady has given me an assurance that she will meet me. I wrote to her this afternoon and asked her to meet me next Monday or Tuesday. I shall advance the argument on behalf of the trade unions and Merseyside Members.
  If there is no response from the Government, all these exercises having been gone through, I shall be convinced that the Government do not give a damn about unemployment on Merseyside, and specifically in Liverpool. The company is not responsible, there is no depression within the industry, and the workers are not responsible. If the Government do not respond, I shall consider that they are washing their hands of Tate and Lyle, Liverpool, and are trying to blame either the EEC or the company for making a commercial decision.
  If the Government decide to allow the Tate and Lyle refinery to close, the next time a Minister starts shedding crocodile tears from the Dispatch Box over job losses on Merseyside I shall call him a hypocrite.
  9.53 pm
  Mr. Michael Shersby: I am pleased to have the opportunity to take up the remarks of the hon. Member for Liverpool, Scotland Exchange (Mr. Parry). I think that I am the only Member in the Chamber who has worked in the sugar industry. I have done so for about 15 years. I declare the interest that I have placed in the Register of Members' Interests. I am director general of the British Sugar Bureau and secretary of the United Kingdom Sugar Industry' Association.
  I shall put forward my own point of view and comment upon strategy. I shall do so as one who for 15 years has been in a position to observe the events that have led up to the problems that we are now discussing. As the hon. Member for Scotland Exchange said, the debate has been triggered off by the proposed closure of the Tate and Lyle refinery at Love Lane, Liverpool. I share the hon. Gentleman's distress about the jobs that will be lost if it is closed.
  I identify myself with those who, through no fault of their own, face redundancy. Nobody outside the House, or any hon. Member, can fail to be deeply distressed about the effect of that closure and what it will mean to the lives of the men and women of Liverpool, where unemployment is so high, especially among unskilled workers in the city centre.
  I want to explore the reasons why the closure of Love Lane, as those of us in the industry know the Liverpool refinery, is imminent and the effect that that will have on the ACP suppliers. Let us be quite clear about two facts. First, the closure is not due entirely to Britain's membership of the European Community, nor is it due entirely to the expansion of the sugar beet industry at the

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  expense of the cane refiners. That expansion is due mainly to the encouragement given to sugar beet production by the Labour Government in their White Paper "Food from Our Own Resources" which was endorsed by the TUC and the National Farmers Union. The policy in that White Paper was to produce 1·3 million tonnes of beet sugar. That is fact. I am not blaming the Labour Government for developing that policy.
  The closure of the Liverpool refinery is about to take place because of the substantial reduction of 400,000 tonnes in sugar consumption in Britain since 1974 due to a number of factors, which are in themselves complex. First, there has been a major switch by the food and drink manufacturers to the use of glucose, mainly in the production of jam, beer, cider and confectionery. That amounts to at least 200,000 tonnes of sugar, and it occurred because of the sugar shortage in 1974. At that time manufacturers reformulated recipes to use glucose instead of sugar and that, coupled with price competition from glucose, has resulted in a large permanent loss to the sugar industry. How vital it is, therefore, to ensure security of supplies in the future and to prevent further substitution by other sweeteners using reformulated recipes.
  Secondly, there has been a direct reduction in domestic consumption of sugar of about 100,000 tonnes, due mainly to changes in lifestyle and dietary habits. For example, when I entered the sugar industry in 1966 about 50 per cent. of white sugar was used in the home and about 50 per cent. in food manufacture. By 1974 the position had become 60–40 in favour of food manufacture. More and more women were going out to work. They were cooking less at home. They drank less tea in the home and the beginning of a new age of ready prepared food had arrived. The net result was a substantial reduction in the per capita consumption because the housewife used more sugar overall in previous years in home cooking and purchases than she and her now smaller family consumed in manufactured foods of every sort which are so quick, easy and pleasant to put on the table at the end of a busy day. Those are the facts that we have to face.
  Thirdly, the world recession in 1980 has resulted in the consumption of much less ice cream, soft drinks and confectionery in Britain. That accounts for another 100,000 tonnes loss of sugar consumption, making 400,000 tonnes altogether. The fact that the House must face is that per capita consumption of sugar is now 11·2 ounces per week on average compared with 17 ounces a week in 1966 without a corresponding increase in manufacturing usage. So much for the reasons for the decline in domestic sugar consumption.
  I turn to Britain's obligations to import sugar under the Lomé convention, and the development of beet sugar production both in Britain and in Continental Europe. To put the position into perspective, it is first necessary to recall Britain's sugar strategy to 1975. Under the Lomé convention the Community—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That, at this day's sitting, the Motion relating to EEC Sugar Proposals may be proceeded with, though opposed, until half-past Eleven o'clock.—[Mr. Brooke.]
  Question again proposed.
  Mr. Speaker: I remind the House that there is about one hour left for Back Bench speeches. Almost everyone in the Chamber is trying to catch my eye. I appeal for brevity.
  Mr. Shersby: Under the Lomé convention, the Community undertook to receive and refine about 1·3 million tonnes of raw cane sugar from ACP countries. The British beet producers expected to produce annually an additional 1·3 million tonnes under "Food from Our Own Resources." Imports to fill the gap between ACP imports and domestic beet sugar production were to be 100,000 tonnes. That provided sugar supplies of 2·7 million tonnes to meet demand at that time, and was based on our then sugar consumption requirement. Since 1975 consumption has fallen to 2·3 million tonnes. British beet sugar production has not exceeded 1·15 million tonnes, and beet production has stabilised at about 210,000 hectares.
  Cane sugar imports from ACP countries, which were about 1·225 million tonnes, have now fallen to 1·17 million tonnes—not through any default by ACP suppliers, but at the request of Tate and Lyle because of the contraction of the market, in addition to 150,000 tonnes of white sugar imports mainly from Denmark and Ireland. Consequently, the 1975 strategy has been overtaken and a new strategy is necessary.
  The new strategy that we have heard about tonight should have three objectives. First, there should be security of British supply. Secondly, there should be flexibility to allow for variations in supply. Thirdly, there should be a balance of competitive advantage as between beet production, imports of raw sugar from ACP countries, and imports of white sugar from Europe.
  I wish to say a few words about imports of white sugar from Europe. They are unavoidable, not because of any sinister plot by our fellow Europeans to undermine the sugar workers of Liverpool and East Anglia but because the industry's customers want a competitive third source of supply. The only barrier to EEC imports is a low-cost British industry, whether it is in cane or beet. I ask the House to take that point into account.
  The method by which to achieve a new sugar strategy must take account of the latest proposals in the EEC document, and of my right hon. Friend's explanatory memorandum on European Community legislation. If implemented, together with the improvements that I am advocating for a new sugar strategy, it will achieve a reduction in the cost of European sugar disposal and a stable market both for British beet and ACP cane sugar in Britain. It will also provide job security for a smaller and more efficient British sugar industry.
  How will that strategy be achieved? First, the British "A" quota for sugar beet should be maintained at the current level of 1,040,000 tonnes of white sugar. But the "B" quota will be reduced from the present 286,000 tonnes to a future 110,000 tonnes, which is vital in order to cope with crop variation and climatic conditions. That is a total of 1·15 million tonnes overall.
  The maintenance of the beet "A" quota and the reduction of the "B" quota means that the British Sugar Corporation has to reduce capacity—I draw this to the attention of the hon. Member for Scotland, Exchange—by closing four of its smaller and older factories and concentrating production at its modern larger factories upon which it has spent £150 million of its own, not the taxpayers' money, in the past five years or so.

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  If, however, the pressure from Opposition Members— some of whom are seeking to cut beet sugar back to 936,000 tonnes—were to succeed, the British Sugar Corporation would have to close another four factories which are efficient and cost-competitive. Whereas the present closures do not involve any loss of acreage, the closure of a further four factories would mean the loss of 50,000 hectares which our fanners could no longer drill for sugar beet.
  Accordingly, I believe that the British Sugar Corporation has taken the right step in bringing its production into line with current circumstances. To cut back its quotas to 936,000 tonnes would be a severe setback for the British Sugar Corporation and for British farmers, which would not assist Tate and Lyle or the ACP suppliers. My right hon. Friend the Minister of Agriculture, Fisheries and Food should therefore be supported in his insistence on a United Kingdom quota of 1,150,000 tonnes. It must not be less.
  Distressing though the position in Liverpool is, one must express similar feelings for the British Sugar Corporation's employees at Selby and Nottingham—areas of high unemployment—and in the rural areas of Ely and Felstead, where the corporation's factories are probably the area's biggest single employer. The loyalty of the employees to the beet sugar industry is no less than that of the employees in the cane sugar refining industry. It has been outstanding. That, too, is being recognised by the board of the British Sugar Corporation in the severance terms, which I am glad to see have been described as generous.
  I remind the House that the reason behind the present situation is a loss of 400,000 tonnes in consumption. We have heard quite a lot tonight from the right hon. Member for Lanark (Dame Judith Hart) about the obligations that Tate and Lyle has entered into. Perhaps the House will allow me to comment on them. It has contracted to import 1·225 million tonnes of ACP raw sugar and to place any surplus over United Kingdom consumption requirements for refining elsewhere in the Community. I emphasise the words "over United Kingdom requirements". That is the problem. Tate and Lyle has to place the surplus in the Community because it is in excess of our own domestic consumption requirements. This very important point enables Britain to discharge its full part of the Community's commitment to take up 1·3 million tonnes of Commonwealth sugar, the vast bulk of which will still be refined in Britain.
  The Government must apply pressure to prevent sales of imported EEC sugar at any price lower than Continental intervention price plus freight. In other words, there must
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  be no dumping and no unfair competition. I hope that the Minister will give the House the necessary assurances on that point when he winds up the debate.
  These three methods of achieving a new strategy would, to my mind, leave the United Kingdom market in approximate balance. With an efficient United Kingdom industry, we shall be in a much better position to compete with EEC imports. I am sure that that is as important to me as it is to the hon. Member for Newham, North-West (Mr. Lewis), who has a very big cane sugar refinery near his constituency.
  Why does Tate and Lyle feel that it must close its Liverpool refinery when it will contract for 1·225 million tonnes but expects actually to import between 1·05 million tonnes and 1·1 million tonnes? The reason is that the Love Lane refinery has a current production of 300,000 tonnes. With its refineries at Silvertown and Greenock, Tate and Lyle will be able to refine about 1·1 million tonnes. In the past, those refineries between them have refined up to 1·15 tonnes.
  I understand that further investment is to be made to keep those refineries going at full capacity. That means that 300,000 tonnes capacity at Liverpool represents substantial over-capacity which it is costing Tate and Lyle more than £10 million a year to maintain. Quite simply, that means that Tate and Lyle's viability is being undermined to a serious extent, and that cannot be allowed to continue, in the interests of fellow workers and ACP suppliers alike.
  Therefore, for these complex but inescapable reasons, there appears to be no realistic alternative to the closure of Tate and Lyle refinery in view of the decline in consumption. That is the reason why Tate and Lyle has come to this difficult decision.
  The choice facing the United Kingdom industry is as follows—if British Sugar cut back to 1,150,000 tonnes, and Tate and Lyle to 1,100,000 tonnes, both United Kingdom producers will be efficient and highly competitive. It will be more difficult for the French and other EEC producers to export surplus sugar to the United Kingdom. There will be much more security of employment at both Tate and Lyle and British Sugar. That is a sensible sugar industry strategy. My right hon. Friend is to be congratulated on his courage in supporting it. If we want to strengthen that bridge between the ACP suppliers and the British consumer, this policy is the way of achieving it.
  Several Hon. Members rose—
  Mr. Speaker: Order. I remind the House—I promise not to do so again—that if speeches are limited to just under 10 minutes each I shall be able to call at least another six hon. Members.
  10.12 pm
  Mr. Robert C. Brown: I shall try to adhere to your appeal, Mr. Speaker.
  My hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry) eloquently portrayed the plight of the city of Liverpool and the desperate unemployment and industrial dereliction that exists there. As a Member for a North-East constituency that has more than its fair share of misery—misery inflicted on the workpeople by the Government's policies—I echo all that he said. I am also a sponsored Member of Parliament for the General and Municipal Workers Union, which is the majority union at Love Lane, in Liverpool. Therefore, I could be said to be speaking for the workers tonight. I make no apology for that.
  If the Love Lane refinery is closed, another major segment of the heart of Liverpool will be gone. If it happens, it will be the result of gross mismanagement of the sugar regime by the United Kingdom Government and the EEC.
  The net result of six years of the existing European sugar regime has been a massive surplus of EEC beet sugar production amounting to 15 million tonnes over the last five years; the expenditure of £1,000 million of EEC taxpayers' money, the majority of it going to the beet producers; the expenditure of a further £4,000 of EEC consumer money in order to maintain an artificially higher price, the whole benefit of which went back to European farmers; the loss of 3,600 sugar jobs in the United Kingdom, including the jobs in Liverpool as a result of the Tate and Lyle closure; and the alienation of our friends and allies among the Commonwealth sugar producers.
  That is a terrible record for an inefficient system of commodity production and marketing. However, it is within the context of those figures that the cost of saving Liverpool needs to be seen. In total, it would cost a few million pounds to cover Tate and Lyle's losses on the refinery. In any case, those losses are not as large as the propaganda men make them out to be.
  My union does not see the basic problem as being a conflict between production at Tate and Lyle and production at the British Sugar Corporation. At present, the name of the game at the British Sugar Corporation is rationalisation.
  The aim must be to achieve a sugar policy that will embrace the needs of the workers in the beet production and refining process, as well as in the raw cane processing and refining. The fact remains that the past EEC regime, plus national policies in France in particular, and the BSC's own expansionist motives, have led to substantial over-capacity in beet production in the Community. This reflects also the serious decline in sugar consumption at home and to a lesser extent in Europe. It is the creation of over-capacity, plus Tate and Lyle's own ruthless outlook on jobs in relation to the ex-Manbré refineries, that has caused the problems in the cane refining industry.
  The Liverpool Love Lane refinery is not a lame duck. When at full production it possibly breaks even. At a time of abnormally high world prices for sugar, at the end of the European regime, it might well make a substantial profit. As we said earlier, the cost of closing it could be substantial compared to the cost of keeping it open. Nevertheless, it is clear that some European intervention in the market is going to be necessary.
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  The Minister of Agriculture, Fisheries and Food will shortly be entering into negotiations with other EEC Ministers. We are asking him to adopt a stance that will support the continuation of the Liverpool refinery. That will mean a planned control of total European sugar production. It will also mean that we should keep down the overall subsidy from the consumer to the producer, at least cutting it substantially below the effective rate of the past five years.
  Tate and Lyle has agreed with the unions that it will not take any irrevocable action on the refinery until the beginning of April. That gives us an initial breathing space. The trade unions intend to use this space to draw up an overall assessment of the position, in particular the future economic and marketing arrangements of Tate and Lyle. That is expected in a couple of days. Since it seems unlikely that a new regime, with different pressures on it, will be agreed by the Council of Ministers in April, the breathing space is much longer. We must use that time to good effect.
  The Minister should make a public decision. He should insist that no final decision will be taken while renegotiations continue. I also ask him to await the production of the report by the unions and to ensure that his officials co-operate with the unions in producing the facts for the case to be argued. Like the unions, I believe that there is a negotiable position within the EEC, which will retain the full refining capacity of Tate and Lyle, including keeping the Liverpool works open, which would not act to the great detriment of the British Sugar Corporation.
  Nevertheless, we recognise that there is some conflict. Production of beet sugar for the United Kingdom market has had far-reaching and damaging social effects. It has not yet been able even to fulfil its quota. Even the Minister of Agriculture, who has to take on board the interests of the farmers as well as those of the BSC, must recognise that the system is the basic cause of the plight of the workers in Liverpool who, if they are made redundant, will in turn grossly aggravate the social problems of that area of the city.
  At the end of the day the Minister of Agriculture may have to recognise that, whilst there are alternative crops that British and European farmers can grow, there are no alternative jobs in Liverpool. A relatively small diversion of resources could save them. We have a right and a duty, on behalf of the Tate and Lyle workers, to make that demand of the Government.
  10.20 pm
  Sir William Clark: At the outset I must declare an interest. I am a director of British Sugar Industries, which is a subsidiary of Tate and Lyle, although I am not on the refining side.
  I regret the closure of the Liverpool refinery. The throughput has been low over past years, for two reasons. Hon. Members who know the refinery intimately will bear me out in this. The throughput in the Liverpool refinery has been such that because it has not worked to capacity it is losing a lot of money. There are two reasons for that. One is that the consumption of sugar, partly because of the recession and partly because of the use of sugar substitutes, has been about 400,000 tonnes less over the past five or six years. That has meant that the ACP cane sugar that Tate and Lyle imports is the company's only business. With its three refineries, Greenock, Thames and

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  Liverpool, the throughput is not sufficient. It is a question of commerce, and if the throughput is not there there is no point in keeping the refinery open.
  Tate and Lyle, which is the main refiner in this country, has said that it will take 1.25 million tonnes or thereabouts of ACP sugar. My right hon. Friend the Minister referred to the copper-bottomed guarantee, but he will find that Tate and Lyle will take the ACP sugar provided it has the flexibility—which it has not at the moment, because of EEC regulations—to divert some of the sugar to the rest of the Community.
  The 1·3 million tonnes from Lomé is a commitment not of the United Kingdom Government but of the Community. French refineries have capacity. They import sugar from Martinique, Guadeloupe and other places. The producers in Martinique and Guadeloupe are in a slightly different position from the ACP countries because those two islands have the advantage of being metropolitan districts of France. If Liverpool closes, there will be a shortage of refining capacity in this country of about 100,000 tonnes per year, but that capacity can easily be found within the EEC.
  I have just come back from Jamaica and Belize, and I have recently been in Guyana and Barbados, talking to people in the sugar industry. What worries the ACP countries is that apart from the closing of the refinery there is a growing surplus of sugar within the Community. They feel that if there is a surplus in Europe it is possible that some of our European partners will say "We must look after our best farmers. All this sugar comes from a long way away. Let us cut Lomé".
  I remind the House that surplus sugar in this country or in the Community has a detrimental effect on the world price, unless it is controlled. The ACP countries are committed to produce their 1·3 million tonnes. They cannot send more than 1·3 million tonnes to this country or to the Community. Since the ACP/Lomé convention started, they have never reneged on their production, apart from one occasion when there was a hurricane in Mauritius.
  The political danger cuts across Tate and Lyle and the sugar regime, and so on. If the Common Market were to cut lending, how would that affect the Lomé countries? Cane sugar is grown only in sub-tropical climates, and it is about the only crop that can be grown there in bulk. Beet sugar, on the other hand, is grown in temperate climates, and other crops can be grown instead of beet. That is the difference between cane and beet.
  There is a political question. If Lomé is cut, what will it mean to the countries concerned—Mauritius, Fiji, St. Kitts, Jamaica, Barbados, Belize, Guyana, and so on, the countries of the ACP? They will lose their guaranteed market for part of their sugar. If they lose their guaranteed market, their economy will be upset. These are Third world countries—developing countries. If their economy is upset, a political vacuum will be created. When people cannot be employed there, they sit in the hills twiddling their thumbs and get up to mischief.
  What does the West do then? If we cut the Lomé agreement, cut the quotas of those countries, and ruin or shake their economies, who will fill the vacuum? Let us take the Caribbean. Will Cuba fill the vacuum? Let us take other countries—Mauritius or Fiji. Will Russia fill the vacuum there?
  I am afraid, as I think the West should be afraid, that someone will fill these vacuums if they occur. My guess
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  is that the West will fill them. But how stupid can we get? The West will then have to give aid to those countries, having taken away the trade on the Lomé agreement. Here we have a political problem that cuts across the domestic sugar arguments that have been adduced in today's debate.
  I should have thought that the easiest remedy was for the Common Market to reduce its beet quotas. Let us forget the United Kingdom for a moment. The beet quotas within the European Community are too high, and a surplus of sugar is being built up in the Community. The ACP sugar that comes in is not allowed to be re-exported, but beet sugar should be exported. The reason why BSC does not export beet sugar is that if it exports it will lose £15 a tonne on the sale price. The EEC has not yet joined the international sugar agreement because it does not have a concerted or co-ordinated comprehensive sugar policy. Its surpluses get thrown on to the world market. That is the reason for the yo-yoing world market price of sugar.
  The Government have an irrevocable commitment, which we must alter, as my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said. It is essential that ACP countries continue to enjoy a fixed quota, with a fixed market and a fixed price. It is in the interests of the West to see that Lomé is kept in being. It is no good saying that we accept Lomé unless we acknowledge that we must do something about the excess beet programme.
  10.28 pm
  Mr. David Alton: I listened with interest to the hon. Member for Croydon, South (Sir W. Clark). His arguments conflicted with those advanced by the hon. Member for Uxbridge (Mr. Shersby). The two arguments sum up the dilemma facing the Minister of Agriculture, Fisheries and Food when he considers the uncertainties and difficulties of the sugar market at a time when consumption has dropped. The former argument was in favour of the sugar beet industry. I suspect that, had the hon. Member for Grantham (Mr. Hogg) been able to intervene earlier, he would have put the case for those working in the sugar cane industry. That is the dilemma.
  Hon. Members representing Liverpool constituencies have tried to put the arguments on behalf of our constituents to the Minister. On the two occasions that we have met him he has been most courteous and helpful. I thank him for that. However, helpfulness, patience and sympathy are not enough when we face other dilemmas as well. I have met Lord Jellicoe, and my colleagues and I have met the Minister at civic delegations and we have had meetings at the Liverpool town hall and with trade union groups today. They have all been to discuss the problems of a city in a major crisis. What do we do in a city which, as the hon. Member for Liverpool, Scotland Exchange (Mr. Parry) said earlier, already has over 50,000 people out of work? Over the past four years, 40,000 people have been made redundant in the city of Liverpool—that is, 10,000 for each year. Today 50,175 people are registered as unemployed in the city of Liverpool and well over 100,000 on Merseyside. We have only 890 vacancies in the Liverpool employment offices. If the refinery closes, men and women who have given a lifetime of service to the company will be thrown on to the scrap-heap. There is no other work for them in the Liverpool area.
  The cost to the country of leaving those people on the dole will be enormous. Last week in its "Economic Progress Report" the Treasury admitted that for every person left unemployed the cost to the taxpayer is about

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  £3,500 a year in lost tax revenues and unemployment and social security benefits. Therefore, the 1,500 redundancies at Love Lane will mean an additional burden for the taxpayer of £5,250,000 a year, without taking into account redundancy payments and so on. Liverpool's 50,000 unemployed equals £175 million a year in lost taxes and unemployment benefits. Some would put the figure even higher.
  We must also consider the political and social consequences of the closure. It is a shame that we have no Ministers from the Departments of Employment, Industry or the Environment in the Chamber. There are important implications in the debate for those Departments.
  It is said that in the recent march through Liverpool the workers were good humoured, patient and tolerant and that there was no disorder. Many of us who were worried about the effect of the march on the city were delighted with the outcome. Sadly, I suspect that if another march takes place it will not be so orderly. People's patience is running out. The Government are risking serious confrontation.
  The Prime Minister must come off her pedestal. She says that she is not for turning. She has not been for listening either in the case of Tate and Lyle. The hon. Member for Exchange and I asked her to meet a civic delegation consisting of trade union representatives, Liverpool Members and the Bishop and the Archbishop of Liverpool. She was not prepared to meet them. She said that she did not herself see delegations. She later modified her response by agreeing to see the hon. Member for Exchange. She should have been prepared to see us. Many of us regard her response as an insult and a slap in the face for the people of Liverpool.
  On 11 February the Liverpool Echo stated:
  "The Premier should step down from this lofty position and if mere delegations are below her dignity, the city of Liverpool would offer her a warm welcome to see at first hand what is happening outside Whitehall."
  Mr. Arthur Lewis: I think that the hon. Member ought to be fair to the Prime Minister. When I questioned the Prime Minister, she said that she would see any Member who had factories closing in his constituency, so each of the hon. Members concerned can go to see the Prime Minister.
  Mr. Alton: I think that the hon. Member will agree that it would be ludicrous if every Member of the House queued up in Downing Street. Because of the present climate, all of us have redundancies in all our factories. Would it not have been better if the Prime Minister had met a joint delegation? Would not that have saved time? Would it not have been a more conciliatory way of dealing with this matter?
  As I have said, the Secretary of State has been patient and has listened carefully, but I think that the Prime Minister should not have handled this matter in the way in which she has done. People in Liverpool blame her very much for the policies that are being pursued by the Government. Furthermore, the Prime Minister has not set foot in the city of Liverpool since before the last general election. That, too, is a matter of great regret to many Liverpool Members, because it would do the right hon. Lady good to come and walk around the streets of Liverpool and see for herself the effects of the policies that she is promoting.
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  I turn next to the question of the role of Europe. Since 1900, the world has been glutted with sugar in eight years out of 10. The EEC's policies are underwriting this cycle. Tate and Lyle has been squeezed by an EEC pricing system that is biased in favour of beet refiners. Beet refiners enjoy margins about five times as wide as those of cane refiners. This favouritism has allowed the BSC to increase its share of the home market by undercutting Tate and Lyle's selling prices by as much as £20 a tonne. Clearly, this has been cause for concern for ACP countries, which initially saw the closure of the refinery at Liverpool as the thin end of a wedge and reacted by writing in the terms that they did to Members of this House.
  Five-year agreements, and contracts that none of us here has yet seen, are no substitute for a clear commitment to honour the spirit and the letter of the Lomé convention for many years to come. Just as Liverpool's economy stands to be ruined in the long term, so do the economies of thousands of people living in places from Mauritius to Fiji, who also rely on Tate and Lyle for a living.
  The EEC will be brought into disrepute—I say that as an avid European; I make no apology for that—if it goes on in a foolhardy fashion pursuing these kinds of policies. They make no sense to any of us who look at them. Instead of 61 MEPs junketing around the world with 74 support staff, they would do far better to sit down and sort out the common agricultural policy, which undoubtedly is bringing them and the EEC into disrepute.
  I finish with what I believe to be the four choices before this House. I said at the beginning that I believe that the Secretary of State faced a crude choice between the sugar beet and the sugar cane industries. Whether the choice is cane or beet, he owes it to the workers within the industry to ensure that, before any refinery is closed, alternative work is found for those employed in the industry. It is just not good enough to pass the buck around Whitehall.
  Secondly, the Secretary of State must ensure that the balance is right. The Government must re-examine their policies. They must look at areas such as Liverpool, which are being turned into industrial deserts, and ensure that the chaos which I have, regrettably, had to predict tonight does not come to pass. That requires political judgment.
  Commercial judgments, too, are required by companies such as Tate and Lyle. They must remember that Tate and Lyle, which has grown up in Liverpool, is a firm which last year made—as the Secretary of State told us at the meeting this morning—a profit of £30 million. The company, too, must make social judgments, bearing in mind its commitment to its work force, some of whom have worked there all their lives, as did their parents and grandparents before them. My grandfather worked for the Tate and Lyle refinery in London for all of his working life, so I know that it is a company that has cared for its work force in the past, but, sadly, its record on that matter will be jeopardised if it does not deal with its workers at the Liverpool refinery with rather more than the courtesy and respect that it has shown them so far. The company should try to bring about a breathing space during which new efforts could be made to save the Tate and Lyle refinery.
  The Secretary of State has not yet called a joint meeting between the British Sugar Corporation and Tate and Lyle. The dilemmas facing the industry were summed up earlier by his hon. Friends. If he could bring the people together, there might be some hope yet for the refinery.

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  All the Government grants, job creation programmes, urban development corporations and enterprise zones in the world are no substitute for the 10,000 jobs that Liverpool is losing each year. The Secretary of State has always been committed to the concept of inner city revival. He was the architect of the original studies which led to the establishment of the partnership committees. He cares passionately about the future of our inner cities. I hope that he will think again about allowing the refinery to close with the subsequent job losses which will make Liverpool a total industrial desert. I hope that the Government will lift the dead hand of unemployment off our city, consider the social, moral and commercial implications of the decision, and think again.
  10.41 pm
  Mr. Anthony Steen: Much of what the hon. Member for Liverpool, Edge Hill (Mr. Alton) says is worth listening to, but I do not agree with all that he says. He should have said that the Minister of Agriculture, Fisheries and Food has increased the amount of cane sugar that can be produced. We should thank my right hon. Friend for that. He has reduced the beet quota so that more cane sugar can be produced. Without that, Tate and Lyle might have closed many years ago.
  I have been on most of the delegations and attended most of the meetings. It seems that everybody blames somebody else for the Tate and Lyle problem. The people of the country are blamed for eating less sugar. Tate and Lyle is blamed for closing the Liverpool plant rather than others. Tate and Lyle offers to keep the Liverpool plant open if the beet quota is pegged at 936,000 tonnes or the British Sugar Corporation is told to export excess production.
  The EEC is also blamed. Some people say that the French must be pulling a fast one somewhere. The beet farmers say that we should grow local beet because it is good for food rotation, it helps the balance of payments and is less expensive. Members of the European Parliament raise the issue in Strasbourg and exhort that Parliament to do something. Everybody blames somebody else. Everybody points the finger elsewhere and does not take responsibility for a practical solution.
  When I asked the Secretary of State for the Environment last week about Tate and Lyle after his statement on inner city policy, he said that it was a matter for the Minister of Agriculture, Fisheries and Food. When I asked the Minister of Agriculture about the effects of the closure I was told that it was a matter for the Secretary of State for the Environment. Because Tate and Lyle has a work force of more than 1,600, it is, apparently, not a matter that concerns the Minister with responsibility for small firms. The rate loss as a result of the closure will be in excess of £500,000; and one would expect the Department of the Environment to take some interest.
  It seems that the closing and opening of refineries is based on a commercial judgment. It is a matter for Tate and Lyle and the British Sugar Corporation, and the Government cannot intervene. The Government say that their policy is to let free market forces operate without any distortion. What is a special development area? Is not that a market distortion? What about partnership committees? Are they not market distortions? We have been promised an urban development corporation. Is not that a market distortion? What about enterprise zones and EEC regional
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  aid? Do not they distort our market forces? The sugar quota is a market distortion. The Government are involved and they are intervening in a number of ways.
  I hope to make a simple and practical suggestion on which the Government can comment. I believe that it could be a short-term solution for solving the Tate and Lyle situation in Liverpool. An enterprise or venture involving business, the Government and local government, and the public and private sectors, could provide a short-term staying solution. I do not expect Tate and Lyle to go on losing millions of pounds a year keeping the Love Lane plant open. Nor do I expect the Government to finance the on-going, loss-making venture by providing some sort of subsidy. I believe, however, that if £22 million is to be spent on an urban development corporation, and if we are to have an enterprise zone, we must ask the Government to provide some enthusiasm and speed to enable the urban development corporation to start work within the next two or three years, providing new jobs and new industries.
  I hope that the Minister of Agriculture, Fisheries and Food will not argue that his Department is not involved. It is too easy to keep saying this. We must expect the Government to make a commitment. At the same time, my right hon. Friend must ask the chairman of Tate and Lyle to keep the plant open for two or three years and run it down. In that two or three years, it is to be hoped that new jobs will spring from the work of the urban development corporation. What is the point, after all, of urban development corporations and enterprise zones if new jobs do not materialise?
  It is to be hoped, therefore, that Tate and Lyle will keep the plant open for two or three more years and use some of the £25 million profit it made last year to phase the rundown of the plant and enable the work force to switch into new businesses under the urban develoment corporation. The Government have a responsibility towards people who are not merely Tate and Lyle employees. They are the people of this country for whom the Government have responsibility.
  The beet farmers could surely grow some other crop for two or three years. There are plenty of root crops that they could grow. If they are short of land, the Minister will be aware that 60,000 acres of agricultural land is taken every year by urban sprawl and green field site developments on the edge of our towns. The Government need only to stop the erosion of green field sites and to persuade the planners not to continue building in the outer cities until inner city land has been filled.
  I am not asking that the Minister should intervene and distort commercial judgments. I am asking him to exercise his own commercial judgment. In cash terms alone, it makes sense. Added to this must be the effect on thousands of families all over Liverpool. This is not simply a matter of 1,500 jobs. It seems that 5,000 or 6,000 jobs will be affected as a direct result of Tate and Lyle closing. The Government and the company can, and should, produce a plan which would allow the rundown of the company contemporaneously with the new businesses formed in the enterprise zone and under the urban development corporation.
  This is not only a compassionate way to proceed. It is commercially sound and essential for the future, if there is to be one, in Liverpool.
  10.48 pm
  Mr. James A. Dunn: In view of the time, I feel that it is a shame that the appeal made by Mr. Speaker was not made at the commencement of the debate. Perhaps many more hon. Members would have had the chance to speak. I am reluctant to try to speak against the clock. I declare my interest because other interests have been declared. I am trying to speak for the people who will lose their employment. Their voice has not been heard often in the Chamber in this debate as one single appeal. Sympathy has been expressed and appreciation shown of the difficulties that confront all those involved. With those words, Mr. Deputy Speaker, I ask you to convey to Mr. Speaker a request that he reconsider how contributions are made in such short debates by Privy Councillors, who do not necessarily always have identification with the subject before the House. I trespass and I shall not go further.
  I direct my remarks directly to the Minister, who has so courteously received hon. Members on more than one occasion, as the hon. Member for Liverpool, Edge Hill (Mr. Alton) has stated. The right hon. Gentleman has tried within the limits of his responsibilities and the constraints placed upon him to meet some of the needs and to try to explain some of the complex problems that confront him. I hope that he will not take it amiss if I say—as I did before—that the joint deputation went beyond his sole responsibility and trespassed on to the responsibility of other Departments. That is one reason why I believe that the Prime Minister should have received a deputation made up of people from many walks of life. She might then have become more aware of our feelings. I am not saying that the right hon. Gentleman did not convey the consensus expressed at the meeting. However, it is always better to have direct talks. Their impact cannot be pushed easily to one side.
  The right hon. and learned Member for Hexham (Mr. Rippon) explained the background to this issue and the statements that he made to the House when we considered entry into the EEC. He explained the assurances that he gave to the old Commonwealth nations which now form the ACP countries. There was a firm commitment to 1·4 million tonnes of cane. If that figure still applied, the Love Lane refinery would not face any problem. However, that is not the figure. Tate and Lyle has used its commercial logic to make different statements. It sent a written reply to the Foreign Office, to my right hon. Friend the Member for Lanark (Dame Judith Hart). At the same time it gave verbal assurances to some of my hon. Friends when we spoke to Lord Jellicoe. We spoke to Lord Jellicoe before this issue had been raised in the House, and he firmly told us that both he and Tate and Lyle wanted constraints on beet sugar production.
  I cannot recall any of my colleagues supporting constraints in order to ease the problem for the cane sugar refinery. Tate and Lyle made a commercial judgment. There is no reason why the Standex arrangements for commodity financial support within the EEC could not be used to support the export of surplus—above 930,000 tonnes—beet sugar. Indeed, Tate and Lyle says that it can operate commercially with 1.1 million tonnes of cane.
  Such support would allow time to be utilised to find new markets for the export of cane sugar. Why should not
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  the United Kingdom export beet sugar throughout the world? Europe has been increasing its volume of exports every year. Some of the figures are dramatic.
  I am led to believe that the European export of beet sugar accounts for about 14 per cent. of total sugar exports. At one time the figure was only 6 per cent. Why cannot the United Kingdom join in that venture to export, as other European nations do? Why cannot the Government constrain and restrict the importations of at least 200,000 tonnes of beet sugar from Germany and Denmark? If we continue to import such amounts, employment will suffer.
  Therefore, the Government could do many things. Points have been made about the inner city partnership and about the Government's attempts to overcome the employment crisis on Merseyside and Liverpool. Mention has also been made of some of the things that could be done.
  But, at the end of the day, the Minister of Agriculture put his finger on the problem when he accused my right hon. Friend the Member for Barnsley (Mr. Mason) of misleading himself, in that he could not achieve what he was seeking. With respect, my right hon. Friend said that those were not the facts as he understood them, and he asked what the Government intended to do to ease the terrible problem and the burden of the proposed closure of the Tate and Lyle refinery. I have not yet heard the Minister say how he would overcome that problem. Perhaps he will take the opportunity tonight to make positive suggestions as to how Tate and Lyle can be kept open, how the 1,500 jobs can be maintained and how the Lomé convention can be properly honoured, with the refining taking place in the United Kingdom even if consumption does not take place here. If that can be achieved, the major part of the problem will disappear overnight. If that is not done, all the sympathy in the world will not help.
  10.58 pm
  Mr. Richard Body: If we lived in a sensible world this problem would not exist and we need not have this debate. In such a world the lowest-cost producers would have first place in our market. We express regret at the closure of these refineries, but the fact is that in the real world successive Governments have, by an act of policy, artificially stimulated the production of sugar beet by a massive degree of State control in the form of grants, subsidies, tax allowances and other forms of State aid. The result is that sugar beet can now be put on the market at a price substantially less than that of cane sugar. If that continues cane sugar will be at a serious disadvantage, so long as the consumption of sugar stands still in the Common Market.
  The consumption of sugar now stands at about 9·5 million tonnes a year. The amount of ACP sugar should be about 1·3 million tonnes. Therefore, if we are to honour the agreement we should be making sure that the production of Common Market sugar—beet sugar—is no more than 8·2 million tonnes. We all know that that is markedly less than the amount that is being produced and that will continue to be produced. We know that if that process continues, up to 3 million tonnes of beet sugar will be dumped on the world market.
  That is serious for the ACP countries, which have to export 2·5 million tonnes in order to gain the foreign exchange that they must secure in order to maintain a

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  humble standard of living. It is important for them to get fair prices for that 50 per cent. of their exported sugar if the Community continues to dump up to 3 million tonnes of sugar year in and year out. It should be emphasised that every tonne of sugar that is dumped on to the world market by the Common Market is a tonne of sugar displaced from ACP exports or sold by them at an artificially depressed price.
  If the figure is to be about £350 million a year for subsidies for those exports, that is the same thing as taking away from those poor countries the sum of £350 million a year. I do not think that my hon. Friend can contradict me on that. If we are in earnest in supporting the Lomé convention, we must insist on substantially lower quotas of sugar being produced in the Common Market. If we fail to insist upon that we cannot expect those very poor people in the Third world who are dependent upon cane sugar for their livelihood to have the livelihood that they deserve.
  11.0 pm
  Mr. Frank McElhone: In replying to this very important debate, I hope that the Minister will give serious attention not just to the speech of my right hon. Friend the Member for Barnsley (Mr. Mason) and others but to the views expressed outside the House—from the churches, from the local authorities, and from the trade unions. As the Liverpool Echo echoed—if I may use a pun—it was a disastrous insult to the people of Liverpool when the Prime Minister refused to meet a bishop and an archbishop, and the leaders of the Liverpool community. It was a very bad snub.
  Despite the misery of unemployment that faces so many workers now in Liverpool, the most gratifying thing that I found yesterday in talking to some of them was their equal concern for the poor people in the Third world countries who might be at risk if cane refining were in any way reduced or stopped at some time in the future. The Prime Minister, however, has shown a lack of care and interest in what is a very serious problem in that part of the world.
  We know that at the weekend the right hon. Lady made a speech in which she talked about "dead-slow Socialism". It is not dead-slow Socialism that this country has to worry about. The dead-stop idealism of the Government and their dead-stop economy are destroying Merseyside and the rest of the industrial base of this country. To the eternal shame of the right hon. Lady, her policies concerning the Third world appear to have gone into rapid reverse.
  I warn the Government that it will not be good enough for the Minister, in replying to the debate tonight, to say that the sugar can be refined at Greenock or London and that the rest will be refined in France or elsewhere.
  The Minister referred to the agreement by Tate and Lyle when he said that there was an assurance of a five-year guarantee for the ACP sugar. What he did not say—I think he left it out deliberately—was that that would depend on the flexibility of refining. That is the problem that we are facing today. The decision by Tate and Lyle to close the Liverpool factory and refine the surplus in France puts seriously at risk the future of the refining industry in this country.
  After our earlier debate today, who can trust the French? When we were in Government we believed that the promise given to produce cars at Linwood was a very solemn promise. I am sure that the Government, who were
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  involved in negotiations as late as last week, were also extremely disappointed that the French reneged once more on a promise.
  It will not be good enough for the Minister to state that if the Third world countries get into difficulties they can go to the European development fund, when that fund, during the 1975–80 period, allocated only £318 million out of a £1,500 million limit—and most of that, I am sorry to say, went to three former French colonies. The books of the fund are now being studied by the European Court of Auditors, and that cannot give a great deal of confidence to countries that might be in trouble because of decisions by the British Government.
  The Government cannot wash their hands of this matter and leave the responsibility to the vagaries of market forces or to Tate and Lyle. As the right hon. and learned Member for Hexham (Mr. Rippon) rightly said, there is a solemn and binding agreement for this country and the rest of the EEC to accept annually 1·3 million tonnes of cane sugar from the ACP countries.
  I say to the right hon. Lady—I am sorry that she is not here—and to the Government that if they intend to stand by the principles of the Common Market—they keep telling us from the Dispatch Box that they intend to do that—they must also stand by their commitments. That must be put across in the House. If the philosophy of interdependence—a word that seems to roll off the tongues of Ministers—is to mean anything, this is the first real opportunity for the Government to put the concept into practice. This is a litmus test of their good intentions to save the future of the cane refining industry.
  We should recognise that the industry's future is seriously at risk in the United Kingdom. The Government were prepared to give extra financial assistance to the French firm at Linwood to save the Scottish car industry. As a Scot, I say that what is good enough in financial terms for Clydeside is equally good for Merseyside. I hope that the Minister will bear that in mind. My hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry) made that point very strongly.
  I have little sympathy for the Tate and Lyle company. Despite the many handouts and the giving of sympathy to the ACP countries and the Third world in general, I am sorry to say that over the years this profitable company spent less than 1 per cent. of its turnover on modernising and improving its factory at Liverpool. How can it survive in a competitive world with that sort of record? Earl Jellico reminds me of the man who, after murdering his mother and father, throws himself on to the mercy of the court now that he is an orphan. He cannot have it both ways.
  The Government must accept that we are not dealing merely with another factory closure, important though that is; we are dealing with the survival of several Third world countries.
  Mr. Alan Haselhurst: If the hon. Gentleman has no sympathy with Tate and Lyle, does he have any sympathy for the employees who will lose their jobs in the BSC factories? Why is that not expressed more clearly in the motion that he is asking the House to endorse?
  Mr. McElhone: I must ask the hon. Gentleman to be patient. I shall come to the issue.
  I was about to refer to three Third world countries. The first is St. Kitts, where 69 per cent. of exports come from

  241
  sugar. The second is Fiji, where exports of sugar amount to 76 per cent. of total exports. The third is Mauritius, where sugar exports amount to 85 per cent. of all exports. The industry is labour-intensive, which is crucial for Third world countries. Those countries do not have to depend on imported energy to maintain the industry. The future of Liverpool must be protected so that the future of these countries may also be protected.
  These Third world countries are endeavouring to stand on their own feet. That is the philosophy of the Conservative Party. The other philosophy about which we hear so much from the Government is "trade, not aid". Is it not better to guarantee the future of these small countries by ensuring that they are able to trade rather than allowing them to go bankrupt and ending up in the care of the IMF, or depending more and more on the United Kingdom and other countries' aid programmes. That is why we continue to believe that the futures of Liverpool and of these countries are inseparable. That is why the plant at Liverpool must be saved.
  I shall outline the steps that the Government can take. Their attitude has been one of total indifference to job losses. They should ask themselves why Tate and Lyle is persuading many cane producers to send some of their crops to the Continent for refining. Is it a question of consumption or a question of price? The company refines only 1·17 million tonnes—the Minister said 1·16 million tonnes—and it contracted to take 1·225 million tonnes. I understand that the balance was to be sent to Ireland for refining to make up the 1·3 million tonnes agreement.
  This is a Government responsibility. Although in essence and in legality it is a Community responsibility, the Government have a moral, social and political responsibility to ensure the continuance of the refining industry and to guarantee the future of the small countries to which I have referred.
  The Government must press the Community to join the international sugar agreement. The Minister agrees with that. I hope that that will be done as soon as possible, despite the objection of France. It will prevent the dumping of Continental sugar on the world market and even prevent the illegal dumping of sugar in Britain. At a stroke—to use a favourite term of the Conservative Party—it would save the British taxpayer a great deal of money, because much of that dumping is heavily subsidised by Community, and therefore British, taxpayers' money. It would give a better price deal to Third world sugar exporters, which would encourage greater investment in those countries. As Tate and Lyle says in its statement, it would restore the in-transit export trade, which has cost it 200,000 tonnes in lost refining of cane sugar. The difference between 1·17 million tonnes and 1·225 million tonnes, together with that 200,000 tonnes, gives a total figure of 255,000 tonnes available for refining. We are told that Liverpool has a capacity of 300,000 tonnes.
  The Government could take steps to persuade the British Sugar Corporation to sell its sugar on the open market. After all, the Government are major shareholders in that company. Why is it that after £150 million investment in that company we find that the Danes and others can sell between 150,000 and 200,000 tonnes of EEC white sugar to Britain, but that we cannot sell anything to the Continent?
  Mr. Shersby: The answer is that the food and drink manufacturers prefer a third source of supply. It is not a question of the British Sugar Corporation being uneconomic in any way.
  Mr. McElhone: The hon. Gentleman misses my point. I am not complaining about the 150,000 tonnes coming to Britain for food manufacturers, although I would prefer that they did not do so. I hope that the Minister will take the line of persuasion used by my right hon. Friend the Member for Deptford (Mr. Silkin), who persuaded food manufacturers substantially to reduce their intake of EEC white sugar. If Continental producers within the same Community can sell between 150,000 and 200,000 tonnes of sugar to Britain, the BSC—with £150 million public investment—should be able to sell sugar to the Continent.
  Mr. Peter Walker: Why, during their last month in office, did the Labour Government urge the BSC to increase its production while not specifically urging it to export?
  Mr. McElhone: That may have been the case, but positions do not remain static for any Government. It should not be difficult—certainly not impossible—for a company of the size of the BSC, which claims to be the most efficient refiner of beet sugar, to sell sugar to the Continent or anywhere else. Without being facetious, if the Government can employ defence salesmen to sell weapons of destruction, why cannot the Ministry of Agriculture, Fisheries and Food sell sugar to the Continent and elsewhere? That would reduce the BSC share of the British market to about 1 million tonnes. Tate and Lyle would have the remainder of the British market for cane sugar, which, allowing for the imported white sugar for food manufacturers, would leave Tate and Lyle with a capacity of about 1 million tonnes. Lord Jellicoe, the chairman of Tate and Lyle, said that he could keep open the Liverpool factory with a sugar beet quota of 936,000 tonnes.
  Does the Minister accept that in terms of volume the margin between success and failure for the workers—the Opposition are primarily worried about the workers of Tate and Lyle and the BSC—is small indeed? The Minister must recognise that Britain now has the lowest-ever consumption of sugar. Even under this Government we hoped that that might be reversed and that it would go back to 2·4 million or 2·5 million tonnes. Taking a long-term view, there is no excuse for the sacking of 750 workers by the BSC. It was timed in an extraordinary way, I believe, in order to put pressure on the Government on the eve of this debate.
  There are other factors that cannot be ignored. Tate and Lyle has stated that the economic recession has seriously aggravated the problem and that due to the strength of sterling many of its customers are losing export markets for products containing sugar. I do not think that the Government can deny that.
  I therefore rest my case for Liverpool and the 750 workers employed by the BSC. I hope that commitments will come from the Government which give some hope even at the eleventh hour for the workers in Liverpool. Lord Jellicoe also said that world sugar consumption will rise by 3 per cent. Booker McConnell, in evidence to the Select Committee, stated that by 1990 consumpton will rise by some 33 million tonnes. In my opinion, therefore, Tate and Lyle, the BSC and the Government should be

  243
  treating the problem in a far more serious fashion. So far, there has been complete indifference to the plight of the workers.
  In conclusion, for the Government to allow Tate and Lyle substantially to reduce its sugar refining capacity would be seen not only as a massive breach of faith from the point of view of the people involved in the Lomé agreement, but as the destruction of just about the last vestige of credibility that the Government have with the Third world. That is why we shall vote for our motion tonight.
  11.17 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): In the debate today we have, quite fairly and understandably, heard a number of different points of view in relation to a number of very important issues. I certainly appreciate, as I believe that many hon. Members on both sides of the House appreciate, that on some aspects there are paradoxes and differing points of view which in some circumstances are difficult to reconcile. Given the different backgrounds from which some of those points of view have been put, I understand and respect the deep feelings underlying them.
  By contrast, the last speaker from the Opposition Front Bench, the hon. Member for Glasgow, Queen's Park (Mr. McElhone), tried to ride both horses together all the time. Other Opposition Members attempted to make clear the points of view from which they were arguing. The hon. Member for Queens Park cannot have it both ways all the time, as he tried to do this evening. He says that he wishes to preserve the jobs of the cane sugar workers in Liverpool. That is an entirely honourable view. But given the situation in the sugar market, to which my right hon. Friend the Minister referred at the beginning of the debate and which others realistically described throughout the debate, and given the policy of the Labour Government, of which the hon. Gentleman was a member, he cannot at the same time seek to preserve every single job in the British Sugar Corporation as well. I therefore found his speech one of the least convincing in the debate.
  Secondly, I would say to the hon. Member for Queens Park that it is equally wrong to say that on the Government side of the House there is total indifference to the problems of the cane sugar workers in Liverpool. That is quite untrue. I believe that his hon. Friends who represent Liverpool constituencies would deny what he said as well. They have come on deputations to myself and to my right hon. Friend the Minister. I think that the one thing that they will not say is that there has been total indifference. Indeed, the deputations of trade unionists and others that I have met have expressed appreciation for the way in which the delegations have been received and the way in which the matters have been discussed.
  Equally, my own hon. Friends—for example, my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen)—have also been on these deputations and have thus demonstrated the real concern that they feel and the very active part that they have played in representing the views of Liverpool. Therefore, it is utterly false to say that there is indifference either on the Government Front Bench or, more particularly, among those of my hon. Friends who represent Liverpool constituencies.
  Mr. Heffer: I agree that we have been courteously received when we have gone on deputations, but will the hon. Gentleman now tell us something that we have been waiting for from the Secretary of State, and now from him? Precisely what proposals do the Government have to ensure that the factory is kept open and that Merseyside will be assisted in its problems? That is what we want to know, and that is what we have not been told.
  Mr. Buchanan-Smith: I shall come more precisely to some of the deep issues raised by this matter, but I wanted to start by making clear that the position in Liverpool is understood, as are the implications of the decision of Tate and Lyle in relation to its factory. At the beginning of the debate, my right hon. Friend mentioned the various ways in which the situation in Liverpool can be eased in the event of the closure going ahead. I must stress again that the seriousness of the social and economic implications for Liverpool is understood, not least from the strength of feeling expressed by the broad cross-section of opinion represented in the delegations which have come to see us. That is why I totally refute what the hon. Member for Queen's Park said a few minutes ago.
  I turn now to what I think is the second main strand in the debate—that is, the realistic approach which we must all adopt—as did many of those from the trade unions and other groups who came to see me—towards the position of the sugar industry today. I repeat what my right hon. Friend said at the opening of the debate, that there is no question of beet being favoured at the expense of cane sugar. That cannot be stated too categorically tonight. As my right hon. Friend said, when we came to power, we inherited a difficult situation from the Labour Government, in which the hon. Member for Queen's Park was a Minister. They had negotiated and accepted, and at the time when they left office were supporting, a total beet quota of 1·3 million tonnes.
  The right hon. Lady the Member for Lanark (Dame Judith Hart) referred to the support which she had in those negotiations from the Minister of Agriculture at the time, now Lord Peart. I shall quote what the noble Lord, then Minister in the Labour Government, said:
  "…we have achieved"—
  I emphasise those words—
  "a large increase in the 'A' quota from 900,000 tons to 1,040,000 tons. There is also a very large increase in the 'B' quota and next year the full EEC price will apply to no less than 1·5 million tons of home-produced sugar—far more than the most we have ever produced."—[Official Report, 31 October 1974; Vol. 880, C. 416.]
  That was said by the Labour Minister of Agriculture at the time, who negotiated that increase for beet sugar. That is the increase which we inherited.
  My right hon. Friend is the first Minister of Agriculture to stand up to this difficult decision. If we were to protect the position of workers in the cane sugar industry, and if we were to respect the commitment which we have given to ACP countries, the first prerequisite was to get a better balance in the sugar market. My right hon. Friend took that difficult decision, against what the previous Government had done, and agreed and announced that we should have a reduced quota for beet sugar. We are the first Government—and he is the first Minister—prepared to take that decision, which has been against the interests of the British Sugar Corporation and against the interests of workers in the beet sugar industry.
  Mr. Anthony Steen: Will my hon. Friend say tonight that he will increase the cane sugar quota temporarily so that Tate and Lyle can continue in business until the urban development corporation and the enterprise zones have got going and jobs can be switched from Tate and Lyle to these new centres of enterprise and wealth creation?
  Mr. Buchanan-Smith: I understand the point which my hon. Friend makes. The problem we have is to get the sugar market into a better balance. We have already taken the crucial first step in the reduction of sugar beet production.
  I turn to two other points of particular importance. Those were raised by the hon. Members for Liverpool, Scotland Exchange (Mr. Parry) and for Liverpool, Kirkdale (Mr. Dunn) in relation to the question of the subsidisation of exports. This is a difficult question. Already within the United Kingdom—and this is of benefit to the ACP countries—we enjoy a higher regional price, being regarded as an area of deficit. This creates difficulties in regard to exports because the export premium is based on the lower price that is available in other surplus areas of the Community.
  My hon. Friend the Member for Uxbridge (Mr. Shersby) asked that there should be no unfair competition from the EEC. I give him the assurance that we will do everything to make certain it does not happen.
  I ask Labour Members to remember that if we use the veto, as we were called on tonight to do, on the negotiations in Europe, what we would do is retain the sugar beet quota at the high level that it was when their party left office. At the same time we would also negative the proposal from the Commission that the European Community should join the international sugar agreement, which I believe we ought to do. If we follow the motion before us tonight, that would be negatived as well.
  I come now to the absolutely crucial part of the debate, the ability to take the sugar from the ACP countries. Here I turn to the intervention of my right hon. and learned Friend the Member for Hexham (Mr. Rippon). I remind him, as he reminded us in the House tonight, that we have commitments in the United Kingdom Government. I agree we have those commitments; they are moral and legal commitments. I know that the United Kingdom will not resile from those commitments.
  I also remind my right hon. and learned Friend that when he negotiated this when we entered Europe—I refer to the White Paper for which he was responsible in July 1971, I think—it was made clear that after the end of 1974, when the existing commitments to the Commonwealth sugar agreement expired, the responsibility would be then taken over by the Community as a whole. The actual legal responsibility rests not only with the United Kingdom but with the Community as a whole. While the United Kingdom will fulfil its obligations—I give my right hon. and learned Friend that assurance—we have also got to remember that that commitment is one which rests not only with the United Kingdom but with the Community.
  Turning to the question by the right hon. Lady the Member for Lanark, what we have to remember is that the fundamental point of the arrangements that we and the Community have made through the Lomé convention is to give suppiers from the ACP countries, about whom we are so rightly concerned, assurances for an indefinite period
  246
  for a set quantity of sugar. In addition, the price level is firm for a year at a time. This is linked to the Community support prices and is not subject to violent fluctuations.
  Moreover, I believe that in the way this agreement has worked, it has also meant that in regard to our commitments to the ACP they are able to supply the Community at a higher price than they would otherwise have been able to do. We stick to that commitment.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 242, Noes 300.

  Division No. 74]

  [11.30 pm

  AYES

  Adams, Allen

  Dunnett, Jack

  Allaun, Frank

  Dunwoody, Hon Mrs G.

  Alton, David

  Eadie, Alex

  Anderson, Donald

  Eastham, Ken

  Archer, Rt Hon Peter

  Ellis, R. (NED'bysh're)

  Armstrong, Rt Hon Ernest

  Ellis,Tom (Wrexham)

  Ashley, Rt Hon Jack

  English, Michael

  Ashton, Joe

  Ennals, Rt Hon David

  Atkinson, N.(H'gey,)

  Evans, John (Newton)

  Bagier, GordonA.T.

  Ewing, Harry

  Barnett, Guy (Greenwich)

  Field, Frank

  Barnett, Rt Hon Joel (H'wd)

  Fitch, Alan

  Benn, Rt Hon A. Wedgwood

  Flannery, Martin

  Bennett, Andrew(St'kp'tN)

  Fletcher,Ted(Darlington)

  Bidwell, Sydney

  Foot, Rt Hon Michael

  Booth, Rt Hon Albert

  Ford, Ben

  Boothroyd, Miss Betty

  Forrester, John

  Bradford, Rev R.

  Foster, Derek

  Bradley, Tom

  Foulkes, George

  Bray, Dr Jeremy

  Fraser.J. (Lamb'th,N'w'd)

  Brown, Hugh D.(Provan)

  Freeson, Rt Hon Reginald

  Brown, R. C. (N'castle W)

  Garrett, John (NorwichS)

  Brown, hon(E'burgh,Leith)

  Garrett, W. E. (Wallsend)

  Buchan, Norman

  George, Bruce

  Callaghan, Rt Hon J.

  Gilbert, Rt Hon Dr John

  Callaghan,Jim(Midd't'n&P)

  Ginsburg, David

  Campbell, Ian

  Golding, John

  Campbell-Savours, Dale

  Gourlay, Harry

  Canavan, Dennis

  Grant, John (Islington C)

  Cant, R. B.

  Hamilton, James(Bothwell)

  Carmichael, Neil

  Hamilton, W.W. (C'tral Fife)

  Carter-Jones, Lewis

  Hardy, Peter

  Cartwright, john

  Harrison, Rt Hon Walter

  Clark, Dr David (S Shields)

  Hart, Rt Hon Dame Judith

  Cocks, RtHon M. (B'stol S)

  Hattersley, Rt Hon Roy

  Cohen, Stanley

  Haynes, Frank

  Coleman, Donald

  Healey, Rt Hon Denis

  Concannon, Rt Hon J. D.

  Heffer, Eric S.

  Conlan, Bernard

  Hogg, N. (E Dunb't'nshire)

  Cook, Robin F.

  Holland,S.(L'b'th,Vauxh'll)

  Cowans, Harry

  Home Robertson, John

  Craigen, J.M.

  Homewood, William

  Crowther, J.S.

  Hooley, Frank

  Cryer, Bob

  Horam, John

  Cunliffe, Lawrence

  Howell, Rt Hon D.

  Cunningham, G.(lslington S)

  Huckfield, Les

  Cunningham, DrJ. (W'h'n)

  Hudson Davies, Gwilym E.

  Dalyell, Tam

  Hughes, Robert (Aberdeen N)

  Davidson, Arthur

  Hughes, Roy (Newport)

  Davies, Rt Hon Denzil(L'lli)

  Janner, HonGreville

  Davies, Ifor (Gower)

  Jay, Rt Hon Douglas

  Davis, Clinton (Hackney C)

  Johnson, Walter (Derby S)

  Davis, T. (B'ham, Stechf'd)

  Johnston, RusselI(Inverness)

  Deakins, Eric

  Jones, Barry (East Flint)

  Dean, Joseph (Leeds West)

  Jones, Dan (Burnley)

  Dewar, Donald

  Kaufman, Rt Hon Gerald

  Dixon, Donald

  Kerr, Russell

  Dobson, Frank

  Kilfedder, James A.

  Dormand, Jack

  Kilroy-Silk, Robert

  Douglas, Dick

  Kinnock, Neil

  Dubs, Alfred

  Lambie, David

  Duffy, A. E. P.

  Lamborn, Harry

  Dunlop, John

  Lamond, James

  Dunn, James A.

  Leadbitter, Ted

  247

  Leighton,Ronald

  Rees, Rt Hon M (Leeds S)

  Lestor, Miss Joan

  Richardson, Jo

  Lewis, Arthur (N'hamNW)

  Roberts, Albert(Normanton)

  Litherland, Robert

  Roberts, Ernest (Hackney N)

  Lofthouse, Geoffrey

  Roberts, Gwilym (Cannock)

  Lyon, Alexander(York)

  Robertson, George

  Lyons, Edward (Bradf'dW)

  Robinson, G. (CoventryNW)

  Mabon, Rt Hon Dr J.Dickson

  Rodgers, Rt Hon William

  McCusker, H.

  Rooker, J.W.

  McDonald, DrOonagh

  Roper, John

  McElhone, Frank

  Ross, Ernest (Dundee West)

  McGuire, Michael(lnce)

  Ross, Stephen (Isle of Wight)

  McKay, Allen (Penistone)

  Ross, Wm. (Londonderry)

  McKelvey, William

  Rowlands,Ted

  MacKenzie, Rt Hon Gregor

  Ryman, John

  Maclennan, Robert

  Sandelson, Neville

  McMahon, Andrew

  Sever, John

  McNally,Thomas

  Sheerman, Barry

  McTaggart, Robert

  Sheldon, Rt Hon R.

  McWilliam, John

  Silkin, Rt HonJ. (Deptford)

  Magee, Bryan

  Silverman, Julius

  Marks, Kenneth

  Skinner,Dennis

  Marshall,D(G'gowS'ton)

  Smith, Rt Hon J. (NLanark)

  Marshall, Dr Edmund (Goole)

  Soley, Clive

  Marshall, Jim (LeicesterS)

  Spriggs, Leslie

  Martin,M(G'gowS'burn)

  Stallard, A. W.

  Mason, Rt Hon Roy

  Steel, Rt Hon David

  Maxton,John

  Stoddart, David

  Maynard, MissJoan

  Stott, Roger

  Meacher, Michael

  Strang, Gavin

  Mikardo, lan

  Straw,Jack

  Millan, Rt Hon Bruce

  Summerskill, HonDrShirley

  Mitchell, Austin(Grimsby)

  Taylor, MrsAnn (Bolton W)

  Mitchell, R.C. (SotonItchen)

  Thomas, Jeffrey(Abertillery)

  Molyneaux, James

  Thomas, Mike(Newcastle E)

  Morris, Rt Hon A. (W'shawe)

  Thomas, Dr R. (Carmarthen)

  Morris, Rt Hon C. (O'shaw)

  Thorne, Stan (PrestonSouth)

  Morris, Rt Hon J. (Aberavon)

  Tilley, John

  Morton, George

  Torney, Tom

  Moyle, Rt Hon Roland

  Varley, Rt Hon Eric G.

  Mulley, Rt Hon Frederick

  Wainwright, E.(DearneV)

  Newens, Stanley

  Watkins, David

  Oakes, Rt Hon Gordon

  Weetch, Ken

  O'Halloran, Michael

  Welsh, Michael

  O'Neill, Martin

  White, Frank R.

  Orme, Rt Hon Stanley

  White, J. (G'gowPollok)

  Owen, Rt Hon Dr David

  Whitehead, Phillip

  Palmer, Arthur

  Whitlock, William

  Park, George

  Willey, Rt Hon Frederick

  Parker, John

  Williams, Rt Hon A.(S'sea W)

  Parry, Robert

  Wilson, Rt HonSirH.(H'ton)

  Pendry, Tom

  Wilson, William (C'trySE)

  Penhaligon, David

  Winnick, David

  Powell, Rt Hon J.E. (S Down)

  Woodall, Alec

  Powell, Raymond (Ogmore)

  Woolmer, Kenneth

  Prescott, John

  Price, C. (Lewisham W)

  Tellers for the Ayes:

  Race, Reg

  Mr. James Tinn and

  Radice, Giles

  Mr. Hugh McCartney.

  NOES

  Adley, Robert

  Biggs-Davison, John

  Aitken,Jonathan

  Blackburn, John

  Alexander, Richard

  Blaker, Peter

  Alison, Michael

  Body, Richard

  Amery, Rt Hon Julian

  Bonsor, SirNicholas

  Ancram, Michael

  Boscawen, HonRobert

  Arnold,Tom

  Bottomley, Peter (W'wichW)

  Atkins,Robert(PrestonN)

  Bowden, Andrew

  Atkinson, David (B'm'th,E)

  Boyson, Dr Rhodes

  Baker, Kenneth (St.M'bone)

  Braine, SirBernard

  Baker, Nicholas (NDorset)

  Bright, Graham

  Banks, Robert

  Brinton,Tim

  Beaumont-Dark, Anthony

  Brittan, Leon

  Bell, SirRonald

  Brooke, Hon Peter

  Bendall, Vivian

  Brotherton, Michael

  Benyon,Thomas(A 'don)

  Brown, M.(BriggandScun)

  Best, Keith

  Browne,John(Winchester)

  Bevan, David Gilroy

  Bruce-Gardyne, John

  Biffen, RtHonJohn

  Bryan, Sir Paul

  248

  Buchanan-Smith, Alick

  Hawkins, Paul

  Buck, Antony

  Hawksley,Warren

  Budgen, Esmond

  Heddle, John

  Burden,SirFrederick

  Henderson, Barry

  Carlisle, John (Luton west)

  Heseltine, Rt Hon Michael

  Carlisle, Kenneth (Lincoln)

  Hicks, Robert

  Carlisle, Rt Hon M. (R'c'n)

  Higgins, Rt Hon Terence L.

  Chalker, Mrs. Lynda

  Hill, James

  Channon, Rt. Hon. Paul

  Hogg, HonDouglas(Gr'th'm)

  Chapman, Sydney

  Holland, Philip (Carlton)

  Churchill, W.S.

  Hooson, Tom

  Clark, Hon A. (Plym'th, S'n)

  Hordern, Peter

  Clark, SirW. (CroydonS)

  Howe, Rt Hon Sir Geoffrey

  Clarke, Kenneth (Rushcliffe)

  Howell, Rt Hon D. (G'ldf'd)

  Clegg, Sir Walter

  Howell, Ralph (NNorfolk)

  Cockeram, Eric

  Hunt, David (Wirral)

  Colvin, Michael

  Hunt,John (Ravensbourne)

  Cope, John

  Irving, Charles(Cheltenham)

  Cormack, Patrick

  Jenkin, Rt Hon Patrick

  Corrie, John

  Jessel, Toby

  Costain, SirAlbert

  Jopling, Rt Hon Michael

  Cranborne,Viscount

  Joseph, Rt Hon Sir Keith

  Critchley, Julian

  Kaberry, Sir Donald

  Crouch, David

  Kellett-Bowman, MrsElaine

  Dean, Paul (NorthSomerset)

  Kimball, Marcus

  Dickens, Geoffrey

  King, Rt Hon Tom

  Dorrell, Stephen

  Kitson, SirTimothy

  Douglas-Hamilton, LordJ.

  Knight, MrsJill

  Dover, Denshore

  Knox, David

  du Cann, Rt Hon Edward

  Lamont, Norman

  Dunn,Robert(Dartford)

  Lang, Ian

  Durant,Tony

  Langford-Holt, SirJohn

  Dykes, Hugh

  Latham,Michael

  Eden, Rt HonSir John

  Lawrence, Ivan

  Edwards, Rt Hon N. (P'broke)

  Lawson, Rt Hon Nigel

  Eggar,Tim

  Lee, John

  Elliott, SirWilliam

  Lester Jim (Beeston)

  Emery, Peter

  Lewis, Kenneth(Rutland)

  Eyre, Reginald

  Lloyd, Ian (Havant& W'loo)

  Fairbairn, Nicholas

  Lloyd, Peter (Fareham)

  Fairgrieve, Russell

  Loveridge, John

  Farr, John

  Luce, Richard

  Fell, Anthony

  Lyell, Nicholas

  Fenner, Mrs Peggy

  McCrindle, Robert

  Finsberg, Geoffrey

  Macfarlane, Neil

  Fisher, SirNigel

  MacGregor, John

  Fletcher, A. (Ed'nb'ghN)

  MacKay, John (Argyll)

  Fletcher-Cooke, SirCharles

  Macmillan, Rt Hon M.

  Fookes, Miss Janet

  McNair-Wilson,M.(N'bury)

  Forman, Nigel

  McNair-Wilson, P. (NewF'st)

  Fowler, RtHon Norman

  McQuarrie, Albert

  Fox, Marcus

  Major, John

  Fraser, Rt Hon Sir Hugh

  Marland, Paul

  Fraser, Peter (South Angus)

  Marlow, Tony

  Fry, Peter

  Marshall Michael(Arundel)

  Galbraith, Hon T. G. D.

  Marten, NeiI(Banbury)

  Gardiner, George(Reigate)

  Mather, Carol

  Gardner, Edward (SFylde)

  Maude, RtHon Sir Angus

  Garel-Jones,Tristan

  Mawby, Ray

  Gilmour, Rt Hon Sir Ian

  Mawhinney, DrBrian

  Glyn, DrAlan

  Maxwell-Hyslop, Robin

  Goodhart, Philip

  Mayhew, Patrick

  Goodlad, Alastair

  Mellor, David

  Gorst, John

  Meyer, SirAnthony

  Gow, Ian

  Miller,Hal(B'grove)

  Gray, Hamish

  Mills, lain(Meriden)

  Greenway, Harry

  Mills, Peter (West Devon)

  Grieve, Percy

  Miscampbell, Norman

  Griffiths, E.(B'ySt. Edm'ds)

  Mitchell, David(Basingstoke)

  Griffiths, Peter Portsm'thN)

  Moate, Roger

  Grist, Ian

  Monro, Hector

  Grylls, Michael

  Montgomery, Fergus

  Gummer, JohnSelwyn

  Moore, John

  Hamilton, Michael(Salisbury)

  Morris, M.(N'hamptonS)

  Hampson, DrKeith

  Morrison, HonC. (Devizes)

  Hannam, John

  Morrison, Hon P. (Chester)

  Haselhurst, Alan

  Mudd, David

  Hastings, Stephen

  Murphy, Christopher

  Havers, Rt Hon Sir Michael

  Myles, David

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  Needham, Richard

  Sainsbury, HonTimothy

  Nelson, Anthony

  St. John-Stevas, Rt Hon N.

  Neubert, Michael

  Scott, Nicholas

  Newton, Tony

  Shaw, Giles (Pudsey)

  Nott, Rt Hon John

  Shaw, Michael(Scarborough)

  Oppenheim, Rt Hon Mrs S.

  Shelton, William(Streatham)

  Page, Rt Hon Sir G. (Crosby)

  Shepherd, Colin (Hereford)

  Page, Richard (SW Herts)

  Shepherd, Richard

  Parris, Matthew

  Shersby, Michael

  Patten, Christopher(Bath)

  Silvester, Fred

  Patten, John (Oxford)

  Sims, Roger

  Pattie, Geoffrey

  Skeet, T. H. H.

  Pawsey, James

  Smith, Dudley

  Percival, Sirlan

  Speed, Keith

  Peyton, Rt Hon John

  Spence, John

  Pollock, Alexander

  Spicer, Michael (SWorcs)

  Porter, Barry

  Sproat, lain

  Prentice, Rt Hon Reg

  Squire, Robin

  Price, Sir David (Eastleigh)

  Stainton, Keith

  Prior, Rt Hon James

  Stanbrook, lvor

  Proctor, K. Harvey

  Stanley, John

  Pym, Rt Hon Francis

  Stevens, Martin

  Raison, Timothy

  Stewart, Ian (Hitchin)

  Rathbone, Tim

  Stewart, A. (ERenfrewshire)

  Rees, Peter (Dover and Deal)

  Stokes, John

  Rees-Davies, W. R.

  Stradling Thomas, J.

  Renton, Tim

  Tapsell, Peter

  Rhodes James, Robert

  Taylor, Robert (Croydon NW)

  Rhys Williams, Sir Brandon

  Taylor, Teddy (S'end E)

  Ridley, Hon Nicholas

  Tebbit, Norman

  Ridsdale, Julian

  Temple-Morris, Peter

  Rifkind, Malcolm

  Thatcher, Rt Hon Mrs M.

  Rippon, Rt Hon Geoffrey

  Thomas, Rt Hon Peter

  Roberts, M. (Cardiff NW)

  Thompson, Donald

  Roberts, Wyn (Conway)

  Thorne, Neil (llford South)

  Rossi, Hugh

  Townend, John (Bridlington)

  Rost, Peter

  Townsend, Cyril D.(B'heath)

  Royle, Sir Anthony

  Trippier, David

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  Trotter, Neville

  Wells, John(Maidstone)

  van Straubenzee, W. R.

  Wells, Bowen

  Vaughan, DrGerard

  Wheeler, John

  Viggers, Peter

  Whitney, Raymond

  Waddington, David

  Wickenden, Keith

  Wakeham, John

  Wiggin, Jerry

  Waldegrave, HonWilliam

  Wilkinson, John

  Walker, Rt Hon P.(W'cester)

  Williams, D.(Montgomery)

  Walker, B. (Perth)

  Wolfson, Mark

  Wall, Patrick

  Young, SirGeorge(Acton)

  Waller, Gary

  Younger, Rt Hon George

  Walters, Dennis

  Ward, John

  Tellers for the Noes:

  Warren, Kenneth

  Mr. Spencer Le Marchant and

  Watson, John

  Mr. Anthony Berry

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.
  Mr. Deputy Speaker Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  'That this House notes with regret that both Tate and Lyle Limited and the British Sugar Corporation have had to announce closures following the contraction of the United Kingdom market for sugar; supports the Government's intention of negotiating a quota for sugar beet production in the United Kingdom which represents a fair balance between the interests of cane and beet sugar producers and of pressing for a reduction in total Community sugar quotas; and confirms that recent developments in no way call into question the obligation towards developing country sugar producers which were accepted by the Community under the Lomé convention and which it wholeheartedly supports.'

  Commonwealth Development Corporation (Finance)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]
  11.42 pm
  Mr. Bowen Weils: My first subject for debate having been usurped by the Opposition and extensively debated, I welcome the opportunity to raise another subject of equal importance.
  The Government's policy on assistance to overseas countries has been attacked, as has the reabsorption of the Ministry of Overseas Development into the Foreign and Commonwealth Office. I wish to set the record straight and to lay the foundations for a distinctly Conservative policy on overseas investment, trade and aid which will be easily understood and which will attract the support of the entire electorate, including the Archbishop of Canterbury, Oxfam, the World Development Movement, the United Nations Association and Christian Aid, to mention but a few of our vociferous critics.
  Any Conservative policy must start from the premise that overseas investment by private companies has generated and continues to generate the majority of employment and wealth overseas. Table 1 of the recently published British aid statistics from 1975 to 1979 amply demonstrates that. In 1979 private flows totalled £2,450 million. Total official flows were only £1,037 million. Clearly, the major contribution to developing countries overseas is through the private sector. The development of the Third world therefore depends on the private sector.
  Table 33 of the same statistics shows Britain's very proud record in giving overses aid, both in the past and now. If one looks particularly at the percentages of the gross national products of countries that provide aid and compares them with the figures for our country, one finds that we are at the top of the league, at 2·26 in private flows, and that total net flows represent 2.83 per cent. of our GNP. Our nearest competitor in Europe is Belgium, at 2·03. Rich countries such as France and Germany are giving only 1·51 and 0·95 per cent. of their GNPs. Taking other Development Assistance Committee members, we find that the United States, for example, is giving only 0·8 per cent. of its GNP.
  That is a demonstration to the world of the way in which this country is contributing par excellence to the development of the Third world, in both private and public flows. It is a denigration of this country for anyone to describe our aid programme as mean, or in any way as something of which we should not be abundantly proud. The present Government are carrying on in that proud tradition.
  It is this investment that generates trade. It is this activity that generates internal taxes to pay for badly needed social provisions, such as schools and hospitals, in those countries. Only with that kind of development, which is profit-making, will the countries that we seek to help truly benefit.
  It will be objected that this activity also denies British industry much-needed capital, exports and jobs, but perhaps I may refer to a recent paper, published in Business Investment in the United States, in which it is
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  demonstrated convincingly that those countries that export most in terms of capital generate most jobs, both in the host country and in the country from which the money comes. It is undoubtedly untrue to suggest that because we export capital to invest overseas we deny jobs to our own people. The opposite is undoubtedly the case. Independent research is proving that.
  There is little doubt that British private activity is the main engine for development in the Third world. It is the absence of adequate investment in productive agriculture of industry which creates the horrible visions retailed by the voluntary aid agencies. It is undoubtedly, therefore, trade and investment in Third world countries to which we should look for real and adequate creation of wealth.
  It is this realisation that has led to calls by Third world countries for the new international economic order. The Third world, ironically, does not want paternalism and the implications of control that go with it. Third world countries want to grow through their own efforts. Their complaint is that the financial and trading terms of the world systems are stacked against them. I have a great deal of sympathy with this argument, to which I shall return.
  Mr. Alex Pollock: Would my hon. Friend care to express his reaction to the fact that apparently the subject of British aid to the Commonwealth Development Corporation has attracted not the slighest interest from the Opposition Benches, be they Labour, Liberal or Scottish National? Will my hon. Friend comment on that marked absence?
  Mr. Wells: That is a very good observation. The Opposition Benches are totally deserted. It is the opposition Members who profess to weep for the benefit of our overseas cousins and brothers, but when it comes to putting forward a positive programme of things that we can do, in our own financial difficulties, they do not want to take part in a debate. They want to go home.
  I have a great deal of sympathy with the argument of those who wish to create a new international economic order. It is significant that the British Conservative Government and the Third world agree. The Conservative Government agree with people who are regarded as extreme in the Third world. That is the basis on which the Conservative Government can begin to develop a programme that will receive the approbation even of our absent friends.
  If we proceed from the agreed basis in co-operation with the Third world, what do we have to do to encourage the growth of investment? First, we must remove artificial barriers, such as exchange control. We have already done that, although it has not been sufficiently appreciated either at home or overseas. Abolition of exchange control was a major act by the Government to assist overseas development. We have tried to reduce trade barriers against Third world products coming into Britain. In spite of the arguments for protection, we have valiantly resisted them. That is a major contribution to the continued development of Third world countries.
  Such actions alone will not generate investment growth. The Third world is short of several vital ingredients—management skills and technical knowledge, human caring, human ability and human enterprise. Without them, nothing can be made to grow. Only the combination of finance, trading opportunity, management and administrative skill will produce development, private or public. Without that, little will result.

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  Britain lacks finance at present. It can help with trading opportunities, particularly with the large opportunities opened by our membership of the EEC. That has given our Third world trading partners a great opportunity, as we said in the last debate on sugar, provided that we do not become too greedy.
  We have know-how and management skills, much of which was acquired overseas, so that management is particularly sensitive to overseas conditions. An enormous prize is to be won if Britain, by its diplomatic skills, brings together Arab money and European skills to invest in and manage profitable enterprises in the Third world. That probably means changing the world-wide financial institutions. I congratulate the Minister on beginning that process and on agreeing to the new International Development Association contribution, which is the major part of our overseas aid programme.
  That brings me to the thrust of our aid budget. If we agree that effective development is brought about by the combination of finance, trading opportunity, management and technical knowledge, we should bend our efforts to that combination and change the emphasis of our aid programme.
  The Commonwealth Development Corporation is an example that springs to mind. That organisation combines the four factors superbly. It has had a successful record since its inception in 1947 with, of course, a few hiccups, some of major proportions. It has overcome them. It is providing management, administrative and technical skills, with finance in partnership with overseas countries.
  Multinational organisations fall down because they have only loans to give. The Commonwealth Development Corporation is now in a position, with the assistance of the ODA, to invest in equity participation in many enterprises overseas that are small and cannot bear loan interest charges and repayments, especialy in the initial years. They are essentially equity investments. Only if one has enough of the right kind of investment to offset any possible losses—because equity is high-risk—can one go in for it. The CDC has reached that position.
  The CDC also manages to act as a catalyst of private investors overseas. Many private investors are not familiar with the countries in which they wish to invest, but others are. I pay tribute to the multinational organisations that have contributed a great deal to the prosperity of many countries in which they operate. Many of the newer countries are not known so well to the British overseas investor. The CDC knows them. It acts as a catalyst and provides additional financial investment.
  The Commonwealth Development Corporation fits perfectly into the pattern of a Conservative overseas development programme. Articles in The Times over the past week give vivid examples of its effectiveness in the field. I do not want to embarrass the Minister on the question of the CDC's finances. I know that the negotiations are at a delicate stage.
  I wish to emphasise that because it is such an effective arm of a directly Conservative development programme it should be expanded and should utilise its experience to inform the entire efforts of the ODA in these fields. This is not to decry other ODA programmes. In a period of financial stringency we must improve the quality of our assistance to make up for any shortfall that may be necessary. This is clearly the direction to take. I ask the
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  Foreign and Commonwealth Office and the Treasury Ministers, when considering the size of the future of the CDC, to view it not in a narrow sense but in the context of a Conservative aid programme.
  The Government were concerned by the reception they received over the Brandt report. I am certain, however, that the solution to these problems is not simply to chuck in money and thereby transfer enormous resources to developing countries. To assist that development one needs the elements of finance and administrative and managerial skills, in partnership with the country concerned. I hope that the Minister will bring forward a programme that will be supported by the entire British electorate, which is not the case at present.
  11.57 pm
  The Minister for Overseas Development (Mr. Neil Marten): It is many years since this House has had an opportunity to discuss the affairs of the CDC. I share the views expressed by my hon. Friend the Member for Moray and Nairn (Mr. Pollock), in his brief intervention, when he drew attention to the serried empty ranks of Opposition Benches. It is a great pity that Opposition Members who complain very much about our cuts in the aid programme were not present to hear the excellent speech of my hon. Friend the Member for Hertford and Stevenage (Mr. Wells). My hon. Friend speaks from experience of CDC.
  The debate is also well timed. As my hon. Friend will be aware, Ministers are currently considering a number of aspects of CDC's operations. The record of CDC over more than 30 years of its existence is one in which the corporation and the country can take justifiable pride. The majority of its investments are in projects aimed directly at increasing the productive capacity of the countries in which it operates, and it works in both the public and the private sectors.
  Its large investments in renewable natural resources are of particular value, not simply because of the importance of that sector in developing countries but because many successful enterprises would not exist if the CDC had not formulated proposals and implemented them.
  This is where the CDC's mode of operation, which is rare among development agencies, of providing management—as my hon. Friend said—from its own staff for a proportion of the projects in which it invests has contributed distinctively to its success. This approach has brought with it the invaluable benefit of a continuing interchange of the CDC's staff between those who plan, those who manage and those who operate. It gives the CDC a degree of realism and practicality which underlies its natural approach to development.
  I have already seen on the ground a good deal of the work of the CDC during the journeys that I have made since becoming Minister for Overseas Development. I have a genuine admiration for the projects that I have visited and for the skill and devotion of its field officers. I recall, for example, that when I was in Malawi a year ago I visited the Smallholder Tea Authority—a long-standing CDC-supported project—and the more recently established National Seed Company. I believe that that also attracted your attention, Mr. Deputy Speaker, when you were in Malawi.
  Next week I shall visit the Pacific and while I am in the Solomon Islands I look forward to seeing something of Solomon Islands Plantations Limited, which was set up 10 years ago and in which the CDC holds 70 per cent. of the

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  shares, together with the Solomon Islands Government and local landowners. It has successfully pioneered the commercial development of oil palms on Guadalcanal.
  Since the establishment of the CDC, representatives of the corporation have periodically joined representatives of the responsible Department to review general problems and future policies; this is, of course, in addition to continuous contact on day-to-day matters.
  The 1980 review, whose report has just been submitted to Ministers, was on a wider scale and included representatives of the Treasury and the Department of Trade. It was charged to review the future role, financing and operations of the CDC in the light of current aid policies and of the wish of Her Majesty's Government to give greater weight to political and commercial considerations alongside basic developmental objectives. I stress "alongside". We continue to regard it as important for the majority of our bilateral funds to go to the poorest countries—those least able to generate an adequate volume of domestic savings for investment or to attract private investment from abroad.
  We also regard it as important that the scarce funds that we provide should be spent on sound development projects—either in the revenue earning sectors of the economy or to help build up the necessary infrastructure. We have a good record for achieving these ends. The review concluded that the CDC had been an important and effective instrument of bilateral aid policy. It considered the priorities for the CDC's investment policies, both as to the sectors and the countries in which it operates. It looked at ways in which the CDC's work already supports British political and commercial objectives and at ways in which its contribution could be increased or improved upon.
  Most important, and that is the particular subject of this debate, it examined in considerable depth the ways in which the CDC at present derives its funds, the scale of its operations—both in the past and which the CDC would like to aim at for the future—and the financing options which might be open to Ministers to consider for different levels of operation. These are questions which will have to be considered inter-departmentally by Ministers. As I told my hon. Friend yesterday at Question Time, I am not in a position tonight to say what our decisions will be. The Foreign Secretary and I had a very useful preliminary discussion last Tuesday with the chairman and general manager of the CDC, at which we undertook to consider sympathetically the needs of the CDC for finance from the Government.
  We made it clear to Lord Kindersley that we continue to regard the CDC as an important element in the United Kingdom's aid programme. Its aims and methods are very much in line with the Government's aid policy. It invests in productive development which brings a return both to the CDC and to its partners in developing countries.
  We are indeed willing to consider providing bilateral aid—whether capital aid or technical co-operation—alongside investment by the CDC. Indeed, my
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  hon. Friend seemed to be driving at that point. We provided, for example, capital aid for infrastructure and housing, as well as technical co-operation, in connection with the Malawi Smallholder Tea Authority. In Mauritius we are financing a main canal for the irrigation authority while the CDC is providing technical services and a loan for irrigation for a smallholder sugar scheme.
  There are, therefore, arguments for enabling the CDC to maintain something like its present level of activity. But, however valuable the CDC's work may be, we have to set that against the overriding need for this country, and the main objective of the Government—namely to reduce inflation and to reduce public expenditure. Against that background, the implications of commercial borrowing by the CDC are being considered.
  In principle, there is much to be said for supplementing advances from the aid programme with commercial borrowing by the CDC. I do not believe that such borrowing, mixed as it would be with aid advances, would prejudice the CDC's developmental role. Under the Commonwealth Development Corporation Act 1978, the CDC is empowered, subject to Government consent, to borrow; and there is provision for its borrowing to be guaranteed by the Treasury. Therefore, there is no legal obstacle to its approaching commercial markets for loans. There are, however, implications for the public sector borrowing requirement which we need to examine carefully before we can reach a decision on commercial borrowing. That we are doing.
  Mr. Michael Mates: Does not my hon. Friend find it extraordinary that on a subject as important as this, a subject on which the Opposition's heart bleeds in public so often, not one member of the Opposition is here to hear what is being said by my hon. Friend about the difficult priorities that he is trying to sort out within the Government?
  Mr. Marten: Yes, I find that extraordinary, and it is a point that my hon. Friend the Member for Moray and Nairn mentioned earlier, and on which I commented at the beginning of my speech. As my hon. Friend the Member for Petersfield (Mr. Mates) said, the Opposition's heart bleeds, but when we are discussing a serious matter they are not here.
  The Foreign Secretary and I made it clear last week to the chairman of the CDC that we attach consdiderable importance to the part that the corporation plays in overseas development. As I have explained, there are problems in providing all the finance that is needed, but we fully appreciate the need for the earliest possible decision in order to give the corporation a firm basis for forward planning. We shall press on with the necessary discussions as quickly as we can.
  Question put and agreed to.
  Adjourned accordingly at seven minutes past Twelve o'clock.