Foreign Affairs and Overseas Development

HC Deb 08 November 1985 vol 86 cc220-86 9.37 am

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe)

I intend to concentrate most of my remarks today on the important issues of East-West relations and arms control, and on the contribution that a stronger Europe can make to that. My right hon. Friend the Member for Aylesbury (Mr. Raison) will deal with further points raised in the debate.

Before I turn to the main subjects, I should like to bring the House up to date on three other important areas where the Government have recently been active in international affairs. My right hon. Friend the Prime Minister has already drawn the attention of the House to the wide range of the discussion and the extent of common ground achieved at the meeting of Commonwealth Heads of Government at Nassau last month. That meeting showed again the unique scope and nature of the Commonwealth. We reached wide agreement on measures to increase the security of small states and on the need to devise more effective action to counter international terrorism and to halt drug abuse. Britain played a major part in securing those significant, practical agreements. We shall now work hard to put them into practice.

The discussions at Nassau were dominated by developments in Africa, and in particular the growing crisis in South Africa. The House has had the opportunity to debate the Commonwealth accord on South Africa. Nobody in this country or overseas who has read the reports of that debate could fail to be impressed by the broad measure of agreement—indeed, by the profound feeling on both sides of the House—on the evils of apartheid and, in the words of the Gracious Speech, on the need for "peaceful, fundamental change."

The Commonwealth agreed to establish a group of eminent people, who will seek to promote a dialogue between the South African Government and representatives of the black community. As the House will be aware, the British nominee for the group is my right hon. and noble Friend Lord Barber of Wentbridge. The right hon. Member for Leeds, East (Mr. Healey) will recognise that Lord Barber is a man well known to the House by virtue of his distinguished career in public service, including, of course, a term of office as Chancellor of the Exchequer. He belongs to the moderately exclusive club to which the right hon. Gentleman and I belong. He is equipped beyond that, by virtue of his more recent experience in working with many African countries, to make a knowledgeable and comprehensive contribution to the work of the group.

The 60 nations of the Commonwealth and the European Community have together given a plain political signal of the need for fundamental peaceful change in South Africa. As the Commonwealth accord acknowledged, it is not for outside countries to prescribe specific constitutional changes for South Africa. It is important to acknowledge that some significant legislative and other changes have been announced there, but the whole House wants to see from the South African Government more movement, more quickly. Above all, there is a need for effective dialogue with genuine black leaders. We urge the South African Government to take the earliest possible steps in that direction. In that connection, it is a matter of considerable concern that, since the Commonwealth meeting, they have introduced further sweeping restrictions on the press. These can do nothing to promote the essential objective of rapid peaceful change, which we all seek.

Peaceful change in South Africa is essential for the wider stability and prosperity of southern Africa as a whole. We have strongly condemned South African incursions into Angola. We equally deplore attempts to undermine security in Mozambique, and we shall continue to work for implementation of United Nations Security Council resolution 435 on Namibia and the withdrawal of foreign troops.

The Commonwealth Heads of Government also discussed international economic issues, especially the urgent measures needed to deal with the related problems of debt, exchange rate instability and protectionism. As we reaffirmed at Nassau, the Government remain committed to a substantive aid programme. That is true both for emergency relief—where our record on famine relief to Africa and earthquake relief in Mexico has demonstrated our firm and continuing commitment—and for long-term development. We shall also continue to support the invaluable work of the voluntary agencies. My right hon. Friend the Minister for Overseas Development will have more to say about this subject.

The report of the Select Committee on Foreign Affairs on famine in Africa, published in May, was a characteristically useful contribution to the House's consideration of this pressing and difficult topic. I take this opportunity, on behalf of the House, to pay tribute to the invaluable work of that Committee, under the distinguished chairmanship of my hon. Friend the Member for Stroud (Sir A. Kershaw.)

Another issue of great importance on which we have received heartening support from members of the Commonwealth is our commitment to the people of the Falkland Islands. As the Gracious Speech makes plain, we shall continue to honour that commitment. We shall also continue to work for more normal relations with Argentina. Since 1982 we have taken a series of initiatives designed to open the way to practical co-operation with Argentina. So far, however—although some Members of the House in their contacts with the Argentines have appeared to ignore this fact—there has been almost no response.

Nowhere is a co-operative approach more necessary than in the conservation of the south-west Atlantic fishery. The need to conserve the fishing stocks is universally accepted. It is plain common sense that conservation can best be achieved by co-operation among all those with an interest in orderly fishing in that region. That is why we have supported the initiative by the Food and Agriculture Organisation to put in place a multilateral fisheries regime. The first need is to establish the facts. To help in that, we have commissioned a study of the south-west Atlantic fishery from Dr. Beddington of Imperial college. This has now been completed and has been placed in the Library. We shall make it available to the FAO and the other fishing nations.

Our approach to this issue is wholly practical. We want an effective multilateral regime, entirely without prejudice to our position on sovereignty. I was encouraged to see recent press reports suggesting that the Argentine Government may be thinking on the same lines. The recent victory in the elections of Senor Alfonsin's party is a sign that democracy is being strengthened in Argentina. We welcome that, and we regard it as all the more reason for the Argentine Government to adopt our approach of looking for ways of reducing tension and co-operating together in a practical and sensible way.

Mr. Tam Dalyell (Linlithgow)

That electoral victory having been won, is it not all the more reason for the Government at least to recognise that sovereignty must be discussed—albeit very low down the list of topics—or they will get nowhere?

Sir Geoffrey Howe

There is no reason to change our position on that. We are approaching this practical matter without prejudice to the different positions held on sovereignty. We made clear our view on it when we attempted to establish a basis for talks in Berne more than a year ago. I have nothing to add to what we said then.

Obviously, I cannot discuss in great depth all aspects of the middle east, but the House will recognise that the depressing cycle of violence and retaliation has underlined the urgency of a negotiated settlement of the region's problems, and yet has at the same time made progress in that direction more difficult.

In the Gulf, we fully support the efforts of the United Nations Secretary-General. They remain the best hope for peace there, and we urge all those involved to work with him to find an early settlement.

The hijacking of the Achille Lauro, and the brutal murder of an innocent American passenger, reminded us of the ever-present alternative to Arab-Israel peace talks: a new wave of extremism in the region. The Prime Minister and I had hoped that my planned meeting last month with a joint Jordanian-Palestinian delegation would carry forward King Hussein's brave initiative for peace in the region. Unfortunately, and as King Hussein made clear, that meeting did not take place because of a last-minute change of mind on the part of the Palestinians. That was an opportunity missed, but we shall continue the search for ways to support the peace process. In the meantime, we look forward to the visit to Britain of Israel's Prime Minister, Mr. Peres, early next week.

We shall maintain our support, too, for UNIFIL—the United Nations Interim Force in Lebanon. This force is a contribution that the international community can make to stability in that tragic country. Our ambassador and his staff in Beirut are also working to secure the early release of the British United Nations official held hostage in Lebanon, Mr. Alec Collett. Such personal cases are among the most difficult and distressing problems that a Foreign Secretary must consider. The safe release of Britons detained in several countries, often for long periods without any or sufficient justification, is a subject of daily concern to me and my colleagues. We know the agonising uncertainty that families must endure. I know, too, that the plight of such people can often be made more difficult by public discussion, which is why I have mentioned only one name. We try to keep those Members who are directly concerned with these cases closely informed. The House will understand why, in the interests of those people, I think it best to say no more about individual cases here.

I referred to the efforts of our ambassador in Beirut, Sir David Miers. He returns to Britain very soon after representing Britain with distinction in an especially dangerous post. He is one among many members of the Diplomatic Service who, in today's increasingly violent world, risk their lives in the service of our country, and to whom the House will wish to pay tribute.

I said at the outset that one of the main themes I wished to tackle today was the task of improving East-West relations. In this, as in other areas of our foreign policy, our voice has been immeasurably strengthened by our ability to speak with the joint authority of our European partners. That is why we have proposed, as the Gracious Speech makes clear, that Community co-operation in foreign policy should be strengthened, by placing political co-operation on a more lasting foundation. I am glad to report that discussions on that proposal—based mainly on the original United Kingdom text—are making good progress.

Europe is central to Britain's foreign policy. Unlike the Labour party, we have a clear and unequivocal position. The Community provides much of the framework for Britain's relations, not just with most of the European democracies. but with our other allies and trading partners. If the United States stands as one pillar of the Western alliance for peace, the other pillar of the Atlantic arch stands right here in Europe.

Today, more than ever, Britain's influence in the world is linked to our place in Europe. That is why we have been committed, since we acceded to the Rome treaty in 1973, to its goal of

ever closer union among the peoples of Europe". My right hon. Friend the Prime Minister joined other European Heads of Government at Stuttgart two years ago in defining that aim as being to deepen and broaden the scope of the Community's activities so as to cover a growing proportion of member states' mutual relations and their external relations.

European unity is not a question of constitutional theory; it is about practical realities. It is about improving the prospects of economic success and of success in the fight against unemployment; breaking down the barriers to trade; easing the burdens on business and exploiting our common technological strength; and working together, in internal and external policy alike, for objectives which no single member state can achieve on its own.

The outcome of the inter-governmental conference, set up at the last Milan European Council, must be measured against those yardsticks. One of the questions being discussed at the conference is whether or not to change the Treaty of Rome. The treaty is not immutable, but if we are to consider change, it must be change for a purpose.

We shall judge any proposals which come for consideration by Heads of Government in Luxembourg in December by the extent to which they correspond to the objectives that my right hon. Friend the Prime Minister set out in Milan. How far will they make a real difference to completion of a genuine common market? How far will they strengthen political co-operation? How far, in other words, will they make a real contribution to European unity?

We in Britain can take particular satisfaction in the forthcoming accession to the Community of Portugal and Spain. As the Gracious Speech makes plain, the Bill providing for enlargement will be brought forward shortly. Enlargement is being accompanied by important and positive developments for Gibraltar, based on our firm commitment to respect the wishes of the Gibraltar people. This is the basis on which I shall pursue these and other questions when I hold a round of discussions with my Spanish colleague in Madrid next month.

I told the House in March that the search for mutual security between East and West would be a long haul. Nothing in the past six months has altered my view, nor my belief that progress can be, and is being, made.

The House has given welcome and broad-based support to the efforts which the Government have been making over the past two years to improve our relations with the East. Most recently, we have continued that process with the important visit to this country of the general secretary of the Hungarian Socialist Workers party, Mr. Kadar. I have had further extensive discussions with the Foreign Ministers of Eastern Europe and the Soviet Union. Dialogue is not an end in itself, nor will it change people's minds overnight, but it is an essential part of the steady process of building trust and understanding.

In pursuing that approach, we shall certainly not turn a blind eye to those aspects of Soviet and East European conduct that cause widespread anxiety in the House, and, indeed, throughout the country regarding Afghanistan and human rights.

On the many occasions when I have met Mr. Gromyko, and now Mr. Shevardnadze, I have urged them to take practical action on particular cases. The recent news that the Soviet Union intends to release for medical treatment in the West Mrs. Yelena Bonner, the wife of Dr. Andrei Sakharov, is at last a step, but only a step, in the right direction.

There have been reports that the Soviet Union may be thinking of some liberalisation of its policy on Jewish emigration. Let us wait and see. I am sure that the whole House will join me in urging them to take that action, for which we have long pressed and which is long overdue.

As I made clear to Mr. Shevardnadze in New York in September, we seek a constructive long-term relationship with the Soviet Union, but not at the expense of national security, nor of speaking our minds on the points where we disagree, nor of being ready to stand up for democratic values. There should be no doubt in Soviet minds of the seriousness of our purpose. Arms control is an integral part in that relationship, and the Gracious Speech reaffirms in clear terms the commitment of the Government to arms control.

Along with all our allies, we are determined to achieve balanced and verifiable measures of arms control, covering a wide range of weapons and activities. We are pressing particularly hard, in the negotiations in Geneva, where we shall be in the Chair next year, for a total verifiable ban on chemical weapons. We also look for real progress in the CDE and MBFR negotiations at Stockholm and Vienna.

The House will, I am sure, wish to appreciate the importance of the part the Government have been playing in helping to shape the arms control strategy of the West as a whole. We have been able to do that because of the essentially democratic nature of the North Atlantic Alliance. Between the NATO democracies, and within them, there is a give and take of views. As the arms control debate has unfolded, this Government have played a leading part in securing an agreed position within the alliance.

The ministerial meetings of NATO, which my right hon. Friend the Secretary of State for Defence and I attend, have been particularly important in underlining the commitment of the alliance as a whole to stable, balanced arms control, based on enhanced deterrence and scrupulous observance of treaty obligations. My right hon. Friend and I have been able to play an extremely active part in those debates.

Mr. Denis Healey (Leeds, East)

Will the Foreign Secretary tell us whether at last week's NATO council meeting Mr. Weinberger revealed the proposals which President Reagan announced two days later? Were they the proposals to which the council gave its support?

Sir Geoffrey Howe

There was a discussion of the proposals. In that context, the NATO council gave its united support to the approach.

Mr. Healey

Were they the new proposals?

Sir Geoffrey Howe

I think I am right in saying that the proposals were discussed then. There has been a great deal of discussion since then, and two days later there followed a broadcast by President Reagan.

My right hon. Friend the Prime Minister has also made an important contribution in her personal meetings with President Reagan and other Western Heads of Government.

Even the right hon. Member for Leeds, East will by now have come to appreciate the importance of the four points agreed between my right hon. Friend the Prime Minister and President Reagan at Camp David last December. That meeting, with its emphasis on the need to adhere to existing treaty obligations, can now be seen to have laid the basis for what has since become the strategy of the whole North Atlantic Alliance. It was on that foundation of respect for existing obligations that the June meeting of the North Atlantic council was able to confirm to President Reagan the alliance's view of the importance of observing the constraints of the Salt II treaty regime.

That process of consultation within the alliance, in which my right hon. friend the Prime Minister has played such an important role, will not stop with the summit that is to take place in a couple of weeks time. She and I will meet President Reagan immediately after the summit to discuss the way ahead.

There is another fact that needs to be recorded about the part played by Her Majesty's Government within the Western alliance. The one certain way of diminishing our influence and of destroying the role of the British Government overnight would be the adoption of the defence and foreign policies of the Labour party.

Britain's voice is heard in this debate, not because we have opted out of Western defence, but because we have been pulling our weight. The alliance has remained united, from the deployment of cruise missiles in Great Britain just two years ago to this week's welcome decision on INF deployment by the Netherlands Government, precisely because of our determination to stay together. President Reagan goes into the final stages of preparation for his meeting with Mr. Gorbachev confident that he has the free, full and united support of his NATO allies. It must be said plainly that the Government have played a full part in shaping and sustaining that support.

A large part of the discussions to which I have been referring has been focused on President Reagan's strategic defence initiative. Far too little attention has been paid to longstanding and comprehensive Soviet activities in the same area. As I pointed out in my speech to the Royal United Services Institute in March, that lack of balance has distorted the debate.

Mr. Healey

But when they seldom come they wish'd-for come, And nothing pleaseth but rare accidents.

Sir Geoffrey Howe

I am always glad to welcome the right hon. Gentleman's support for the wisdom that I occasionally manage to utter, and he has endorsed that particular speech many times.

I remind the right hon. Gentleman and the House of the key facts. The Soviet Union is alone in having deployed a sophisticated localised defence against ballistic missile attack, which it is now upgrading. The Soviet Union is also alone in having deployed an anti-satellite system capable of threatening important Western targets. Those activities, technically legitimate as they may be, demonstrate the hollowness of the Soviet claim that the threatened "militarisation of space" arises purely from American research.

That is not all. For a number of years now the Soviet Union has been carrying out an extensive programme covering high energy lasers, particle beam weapons, kinetic energy weapons, and all the associated paraphernalia for rapid progress towards a major expansion of its capability against ballistic missiles. It has begun to develop a new and significant ability to transport into space the massive equipment which would be necessary for a defence system beyond the atmosphere. It is also working to improve its ability to detect and track ballistic missile targets.

What have we heard from the Russians about such activities? Until now, we have heard virtually nothing. It is only the persistent disclosure by the West of the scale of Soviet research that has forced them belatedly to admit their own involvement in these areas. Even now, they have refused to acknowledge its true extent.

That discussion, too, is taking place upon the basis of the Camp David four points agreed between President Reagan and my right hon. Friend the Prime Minister. One of those four points, of the highest importance in this context, is that the strategic defence initiative should be pursued in full conformity with existing treaty obligations.

The importance of that has been expressly reaffirmed by the US Government. Secretary of State Shultz has confirmed, too, that their position is based upon a restrictive interpretation of the ABM treaty. President Reagan has made it clear that if success in research suggests further steps are desirable the US will be ready to consult its allies and discuss and negotiate on them with the Russians.

Each one of those points is a vital component of the Western position to which we and other European Governments attach high importance. Discussions of the kind suggested should be devoted to reaching agreement on how existing treaties apply to new technologies developed since they were signed.

As my right hon. Friend the Prime Minister said in New York, it is desirable for both sides to engage in an attempt to clarify ambiguities. We hope that they can seek a firm basis of understanding, while research programmes continue over the years, on what is and what is not permissible in the way of research.

The latest Soviet ideas relate to strategic and intermediate nuclear forces. They are a response to earlier US proposals. For many months we have urged the Russians to abandon their megaphone diplomacy—to stop relying on minority opinions in the West as a substitute for serious negotiations with the Americans— and to put forward their own ideas in detail. This they have now done, and it represents a tribute to the steadfastness of the alliance in pressing our case.

I shall not go into detail on the Soviet offer. I certainly endorse the judgment of NATO Defence Ministers that it is one-sided and self-serving. The West will never accept a Soviet definition of strategic nuclear forces which attacks the very core of alliance defence policy and preserves Soviet advantages in areas vital for our security.

I acknowledge, however, some positive elements in the proposals on which we can build, such as the proposals for significant cuts in the number of weapons systems and warheads, the prospect of independent agreement on INF, separated from the artificial linkage which the Russians have created with other aspects of the negotiations, and some recognition that UK and French forces are not an appropriate subject for bilateral negotiation between Moscow and Washington.

Mr. Gorbachev has also made a formal offer to the British Government of direct talks on nuclear forces and arms control matters. In the Prime Minister's reply delivered yesterday, she welcomed the prospect of a deeper dialogue. We agree that it is important for European Governments to talk to each other about the issues affecting the future of our continent. My right hon. Friend has made it clear that our position in respect of our own forces remains the same. There are essential conditions to be fulfilled if we are to review our position. We must first see radical reductions in the super-power arsenals without any significant change in Soviet defensive capability. We have made it clear that in those circumstances we should be ready to look afresh at the whole question.

We are ready and willing in future contacts to explore with the Russians the wider aspects of arms control, including the need for increased confidence and greater stability in the East-West relationship.

In her reply to Mr. Gorbachev's message, my right hon. Friend the Prime Minister proposed that this dialogue on the wider aspects of arms control should be pursued by the Soviet Foreign Minister, Mr. Shevardnadze, and me. I hope that he will be able to take up my invitation to visit this country before too long. Meanwhile, the US-Soviet negotiations in Geneva will continue to be the right place for arms control talks on nuclear weapons.

The United States Government have very recently put forward fresh proposals involving deep cuts in offensive weapons. These build upon their earlier approach. They respond to concepts in the Russian counter-proposals on which progress might be made, while rejecting other obviously one-sided features to which I have referred. The latest American proposals reaffirm NATO's willingness to halt, reverse or modify its deployment, provided that reductions can be agreed on the basis of principles to which all allies subscribe. The Government have given their full support to this new United States move.

The talks are still at the beginning of what may turn out to be an extended process of negotiation. It would be unrealistic to expect detailed agreements to emerge from the meeting between the President and Mr. Gorbachev, but if the will to seek agreement is there, that meeting could set the negotiations on a new path. It is the Government's profound hope that they will be the first purposeful, determined steps towards balanced arms reductions. We shall continue to ensure that our objectives, and our concerns, are fully reflected in the Western position.

When they meet in Geneva, President Reagan and Mr. Gorbachev will be taking part in the first US-Soviet summit for seven years. That is the culmination of a steady process of dialogue between East and West. Britain has played an active and, at some stages, a vital role. We have been able to make this contribution because we are a loyal member of NATO, firmly committed to the defence of Britain, and playing a central political role in Europe. We are proud that we have helped to create an historic opportunity to begin again the long and testing journey towards better understanding and greater trust between the two giants of East and West.

I am sure that the whole House will join me in wishing President Reagan and Mr. Gorbachev a productive and successful first meeting.

10.6 am

Mr. Denis Healey (Leeds, East)

Like the Foreign Secretary, I want to concentrate on the forthcoming Geneva summit where the leaders of the two most powerful countries in the world will meet. Our survival will depend in part on how that meeting goes. I strongly endorse the Foreign Secretary's closing words in that regard.

I shall not talk about the economic problems facing the European Community, although the outlook is as depressing as I can ever remember. The Foreign Secretary referred to Spain and Portugal joining the Community just six weeks from now, but the last meeting of Community Finance Ministers failed utterly to take account of that in arrangements for the budget next year. We shall have an opportunity to discuss the Common Market budget next week, I believe, so some of those issues can be left until then.

I shall not talk about South Africa, which we debated a fortnight ago. I am sure that we shall return to the subject many times in the new Session. I do not applaud the choice of Lord Barber as the British representative on the Commonwealth mission—I do not think that the chairman of Standard Chartered Bank can be regarded as totally without bias in these matters. I can only hope that the noble Lord distances himself as much from the Prime Minister on South African matters as he did from the Prime Minister's views on monetary problems when he was Chancellor of the Exchequer.

I should like to say just a word about Argentina. Even The Times welcomed the recent meetings between my right hon. Friend the Leader of the Opposition, me and the leader of the Liberal party and President Alfonsin on the grounds that they had decisively broken the taboo on discussions of Falklands problems. I hope that, in spite of what he said today, the Foreign Secretary will exploit the opportunities that we have offered him to produce an environment in which we can at least reduce the heavy burden on our economy and defences imposed by the Prime Minister's Fortress Falklands policy.

The Foreign Secretary must recognise that practical co-operation with Argentina on matters such as fisheries and communications with the Falkland Islands are bound to depend on our readiness to discuss all aspects of the Falklands problem.

Let me pass to the summit meeting. I deplore the tendency by newspapers and the Government to treat this essentially as a propaganda battle and to pay excessive attention to who is winning the propaganda war. I gather that when the Prime Minister last conversed with President Reagan she asked for a repackaging of the American proposals, as though they would be more acceptable if presented in gift-wrapping rather than brown paper.

The Foreign Secretary was curiously evasive in telling us whether the proposals which the NATO council discussed on Wednesday last week were the same as those put to the Soviet Union on Friday. My understanding is that they were not. The NATO council has not, so far, discussed the proposals as they were presented last Friday to the Soviet Government.

The real issues that underlie this so-called propaganda war are of vital importance to the people of Britain no less than to the people of the United States and the Soviet Union. Like the editor of the Financial Times, I could only see as a profound let down the speech at the United Nations in which President Reagan trailed his approach to the summit. Even as a propaganda effort it was clearly aimed at the right wing in his own Republican party rather than at world opinion.

Of course it is important that the Soviet Union and the United States should discuss regional problems that might bring them to blows. I welcome the talks on these matters which have already taken place, at least at official level, although I doubt that the President was wise to talk in September about joint Soviet-American "intervention" in the Third world. But in his United Nations speech the President's choice of issues was gravely one sided and his description, especially of what was happening in Nicaragua, was ludicrously distorted. Above all, he left out entirely the regional problems of the middle east where the risks to world peace are the greatest and where the Soviet Union and the United States are already directly and militarily involved.

In half of the middleeast—the eastern half—Russia and the United States have reached a close understanding about the Gulf war which has already been responsible for the loss of one million lives. They should be trying to bring it to an end rather than acting simply as co-belligerents with Iraq. Surely they need to reach an understanding with the other half of the middle east on how to get peace between Israel and her neighbours.

I shall mercifully draw a veil over the lamentable diplomatic shambles that attended the recent visit of two PLO representatives to London. I shall draw a veil also over the American achievement in undermining America's two best friends in the Arab world—King Hussein, by banning a contract to provide him with arms, and President Mubarak, by skyjacking the Egyptian aircraft and failing to apologise for doing so.

Now that the dust has settled, it is clearer than ever that no progress on the problems separating Israel from her Arab neighbours can be made without involving the PLO —both King Hussein and President Mubarak restated that during the past few days—nor can progress be made without the acquiescence, if not the positive co-operation, of both Syria and the Soviet Union. Until, somehow, diplomacy can create a framework that takes account of those two facts, all purely Western efforts to encourage a settlement are bound to fail. I hope that the Minister for Overseas Development will tell us precisely what the Prime Minister meant at Question Time the other day when she talked about the need for a framework for a new initiative for such talks. I believe that the framework must include the PLO, Syria and the Soviet Union.

I welcome the indications that Prime Minister Peres is now in contact with the Soviet Union and is seeking diplomatic recognition of Israel and the release of more Jews who wish to settle in his country. I hope very much that the summit at least assists in that regard.

The central problem facing the summit—the problem which has made it the focus of interest for thinking people all over the world—is whether it will help to bring the nuclear arms race to an end. My concern, which I have expressed many times to the House, is that the nuclear arms race is moving into an area that will make arms control more difficult and war more likely, unless it can be stopped now. It is a staggering fact that the United States and the Soviet Union between them now have 20,000 strategic nuclear warheads and well over 50,000 nuclear warheads, if one adds the intermediate and tactical weapons that they possess. Those 50,000 nuclear warheads amount to more than 1.5 million Hiroshima-size atomic bombs. If those arsenals of nuclear weapons were ever used there would be an eternity of nuclear winter.

Yet neither side has gained one jot in its security by pursuing this arms race during the past 40 years. Both have wasted colossal sums of money which would have been far better spent on improving the lot of their peoples and, indeed, the lot of the world.

So far, the stability of the nuclear balance between Russia and the United States has proved invulnerable to wide variations in their relative capabilities. It is now universally recognised, even by Mr. Richard Perle of the Pentagon, that there is broad parity in strategic nuclear weapons between the Soviet Union and the United States. For this reason deliberate aggression by one or the other is well nigh inconceivable at the moment.

However, the colossal size of their existing arsenals has encouraged both Governments to think more and more about the possibility not just of deterring but of fighting a nuclear war. Each suspects the other of hoping to win a nuclear conflict if it can destroy sufficient of the enemy's retaliatory forces in a first strike, so that each side is also thinking about pre-empting an enemy first stike. Mr. Richard de Lauer, the Pentagon's chief of engineering, recently recommended the Trident D5 missile to Congress on the ground that it was a counterforce weapon which might give the United States a pre-emptive capacity. That is the weapon that the British Government are planning to buy at colossal cost from the United States for Britain's forces.

The Soviet Union and the United States are developing, and beginning to deploy in some cases, two or three new inter-continental ballistic missiles, new strategic nuclear bombers, new air-launched cruise missiles and new missile-carrying submarines. The United States is planning to replace its obsolete nuclear weapons in Europe with new nuclear missiles and artillery warheads, and no doubt the Soviet Union is doing the same.

Fears on both sides of a first strike are bound to increase rapidly if these developments continue. A report of the recently published unclassified version of the latest CIA national intelligence estimate stated that Soviet air defences would not be able to prevent large-scale damage to the USSR by United States nuclear bombers and cruise missiles for at least the next decade— that is bombers and cruise missiles alone. More important, Trident D5 is said to offer the United States for the 1990s the capacity to destroy 95 per cent. of Soviet inter-continental ballistic missiles if it strikes first. The same CIA assessment reports that, at least until the year 2000, Russia could pose "no significant threat" to American atomic submarines.

Those figures from American sources take no account of the enormous destructive power of America's ICBM force, which is based on land. In addition, President Reagan is planning to equip the United States with a ballistic missile defence, through his star wars programme, and is inviting the Soviet Union to follow suit. He told a BBC correspondent that his message to the Soviet Union was: We wish you well with your defence plans. That is a different story from what the Foreign Secretary told us today and the President could have fooled me, because a welcome and goodwill for the Soviets' ballistic missile plans are the last views I have heard from Secretary Weinberger or Mr. Shultz.

President Reagan's personal attitude to star wars has not wavered since he first made a speech recommending it in March 1983, when he said: The human spirit must be capable of rising above dealing with other nations and human beings by threatening their existence. The President said that he was determined to find a way of defence which will make nuclear weapons impotent and obsolete. Bruce Kent and Joan Ruddock could not have put the case for nuclear disarmament more forcibly. The President added that if defensive systems were paired with offensive systems they could be viewed as fostering an aggressive policy—and nobody wants that. The tragedy is that that is exactly what the President's star wars programme is leading to. When the President made his speech in March 1983, nearly all the experts in the United States believed that it was nonsense, but when he made it clear in the following months that he was not to be shaken, they all switched round. In fact, there has never been such a mass conversion since a Chinese general baptised his troops with a hose.

Today, no one who is involved in the star wars programme shares President Reagan's view of it—not General Abrahamson, who is in charge of the whole project, not Dr. Yonas, who is the chief scientific adviser to the programme, and not Dr. Keyworth, who is the President's chief scientific adviser.

The State Department's official pamphlet on star wars, published a few months ago, said that the project is designed not to replace nuclear deterrence, but to enhance it. In other words, it is designed to threaten the existence of other nations and human beings more credibly. Its purpose is not to make nuclear weapons obsolete or to give the peoples of the world immunity from nuclear attack; its purpose, as has been welt described in speeches by Dr. Keyworth and in a speech by Dr. Yonas that I heard in Ottawa recently, is to protect America's land-based missiles, rather than to protect the American people. For that reason, it is bound to accelerate the arms race in both offensive and defensive systems and will lead exactly to the consequence against which President Reagan warned in his speech two and a half years ago. It will also lead to a situation in which, to use the recent words of Mr. Nitze, the

growth of defences could support rather than discourage a first strike. That is why the star wars programme has been publicly opposed by the last three American Presidents—by Republican Presidents Ford and Nixon no less than by the Democrat President Carter—and by at least three of the last four American Defence Secretaries—by Republican Secretary Schlesinger no less than by Democrat Secretaries Brown and McNamara. In fact, the SDI programme in the United States is supported only by those who reject arms control in principle, such as Dr. Weinberger and Mr. Perle, and, of course, by those who cynically hope to get a lot of money out of it. As the House knows, star wars is described by the military and industrial community in the United States as pennies from heaven.

The President is sticking doggedly to his original vision, but he is alone. In spite of his words on the BBC, no one really believes that President Reagan's successor —it will not be a decision for the present President—will give the Soviet Union the secrets of the star wars programme if it turns out to work. After all, only the other day the American Administration forced the British Customs and Excise to take a child's computer off the shelves of the duty-free shop at Heathrow because it might find its way to the Soviet Union.

Indeed, both American law and the ABM treaty forbid the United States to give information about ballistic missile defences even to its allies, including the United Kingdom. That fact casts an odd light on the idea of the Secretary of State for Defence that British firms could get great benefits from doing research for the United States into the SDI programme.

President Reagan told Soviet journalists last week that he would not deploy star wars until both sides had destroyed their offensive weapons, but on the very next day he was forced by his advisers to withdraw that undertaking. He then went to the other extreme and said that the United States would deploy star wars unilaterally if it could not get other world leaders to agree to an international system of defence against nuclear missiles. So much for the undertakings that the President gave to our Prime Minister in December. He now tells us not that he will consult or negotiate about deployment, but that if it proves feasible he will deploy unilaterally unless everybody else in the world agrees with him.

The European allies had grave misgivings about the star wars programme from the word go. Those misgivings were superbly listed by the Foreign Secretary in the speech to which he referred earlier and for which, I am told—I hope that I am wrong—the Prime Minister later apologised to President Reagan. If that is not true, I hope that we may be told so. The Foreign Secretary does not rise to respond to that challenge.

The tragedy is that the European allies did not make their position crystal clear in time. On the contrary, the Washington correspondent of The Sunday Times and The Guardian told us from American sources in September that the Prime Minister had used her support for SDI to try to get President Reagan's support for buying the Ptarmigan project and threatened to withdraw her support for SDI if she did not get the Ptarmigan contract. The House will agree that The Times showed unusual innocence recently in asking why President Reagan delayed until this week publishing the decision, which must have been taken long ago, to buy the French system instead, even though President Mitterrand has openly opposed the star wars programme from the start.

Of course, the reason for the delay is obvious. The President wanted to be sure that he had our Prime Minister in the bag at the NATO meeting before he announced his decision. He took her for a ride. She gained nothing by sucking up to President Reagan except to explode the myth of a special relationship with the United States. Her only reward was another spillage of rancid bile from the Prince of Darkness, Mr. Richard Perle, who, according to The Sunday Times last week, accused her of following Baldwin and Chamberlain in appeasing the Soviet Union. He did so because she had dared to question Mr. Perle's propaganda about certain alleged Soviet violations of the ABM treaty.

I agree with the Foreign Secretary that it is still possible for America's European allies to exert a decisive influence on American policy in this area, provided that they are united and honest on a clear policy. There is always a power battle in Washington between the White House, the State Department, the Pentagon and various parts of the Congress about almost every element of American foreign and defence policy. That power battle can be swung in Europe's direction provided that Europe makes its views known in time. The best example of that was when united European pressure on the American Administration gave victory to Mr. Shultz over Mr. Weinberger on the interpretation of the ABM treaty on testing. I congratulate the Foreign Secretary on the part that he must have played in mobilising European support for that interpretation.

I strongly support the Foreign Secretary's view—I have said so many times—that a collective European approach to the defence and diplomatic problems facing the Alliance is essential if we are to proceed in the direction of peace rather than war. It is important that Europe should constitute an independent pillar within the Alliance. I shall devote my remaining remarks to what Britain and Europe should be pressing the United States for in relation to the arms talks and the forthcoming summit.

The greatest danger of the arms race lies in the quality of the new weapons being planned rather than in the quantity of the old weapons. By far the best objective in the arms talks would be to seek a freeze on the testing, development and deployment of new nuclear weapons. A nuclear freeze already has overwhelming popular support on both sides of the Atlantic as well as almost unanimous support in the United Nations.

Of course, a freeze is not without its own difficulties. There is a problem in deciding the point at which one cuts off programmes already under way. I believe that, since the two sides enjoy rough parity, that problem should not be difficult to overcome. Certainly it would be much easier to negotiate a freeze than a reduction in existing weapons when the pattern of the two sides' deterrence is so different. Moreover, a freeze would be much easier to verify than a reduction in forces because it is easier to tell whether a new weapon is being tested than to know whether a weapon photographed by satellite is within a permitted ceiling.

The Prime Minister has made a great deal in the House of saying that it is not possible to verify a ban on research. She said that again the other day. That is true in relation to research in brains or in laboratories, but it is possible to verify a ban on the external testing associated with research, especially since public sources tell us that western satellite intelligence photography has a resolving power which enables its possessor positively to identify objects as small as 150 cms. across.

The United States Defence Department has already published a list of the tests that it plans to carry out as part of its SDI research programme, because it knows that Russia can and will observe them. Surely our objective, which we should press on our European allies to press on the United States, should be to tighten the ABM treaty so as to ban all tests relating to space defence—on both sides. That would kill not only the SDI before its birth but the possibility of a Soviet breakout.

I agree with the Foreign Secretary that the Russians have indulged in a great deal of activity in space defence in the last 15 years, but none of that activity could come to fruition in a new space defence system if tests were banned now.

If one seeks a ban on observable tests relating to SDI, one must also ban the development of anti-satellite systems on both sides. I remember Mr. Richard Burt, when he was still working at the State Department last December, saying that the United States would be proposing such a ban. However, the United States has not put forward such a proposal and Mr. Burt is now ambassador in Bonn. One can only guess at the new American policy.

Surely the United States has a major interest in banning anti-satellite systems now because it claims that the Soviet Union is ahead. Indeed, as the Foreign Secretary said, the Soviet Union is the only country which has a working ASAT system, although I believe it is a primitive one. Moreover, nothing would be more dangerous than for each side to acquire the ability to rob the other of its eyes and ears in a crisis. Dr. Keyworth, the President's main scientific adviser, pointed out the other day that if America develops an anti-satellite system it will enable it to test its technologies for each of the three layers of space defence. If we do not reach agreement on a ban on anti-satellite activity now it will soon become very difficult to verify because the Americans plan to carry their anti-satellite weapons on F15 aircraft. They will be difficult to detect by what the Russians call "national means", satellite photography.

By far the most important single contribution to a freeze would be a comprehensive test ban treaty. No one would deploy new nuclear weapons if they had never been tested in real life. It is only three years since the Prime Minister told us that negotiations for a comprehensive test ban treaty were going, alas, far too slowly and should be speeded up and completed. I hope that the Minister can assure us that the Government are now pressing for a reconvening of the conference for a CTBT because it would command overwhelming support in the rest of the world. The non-proliferation treaty review conference in Geneva the other day called upon the nuclear powers to start negotiations for a comprehensive test ban in the next six weeks—before the end of the year.

The only excuse offered for not proceeding to the signature of a comprehensive test ban treaty is the alleged inability of science to detect very small underground tests. However, this week's issue of Modern Geology contains a long article by the leading British seismologist, Dr. Leggett of Imperial college, in which he demonstrates that there is no chance of the Soviet Union successfully evading detection if it breaks a comprehensive test ban. That chance has been further reduced since that article was written by the fact that in the last few days India, Sweden and four other neutral countries have agreed to make their territories available for monitoring a comprehensive test ban and to man seismological stations in the Soviet Union —which in principle the Soviet Union has already agreed to accept as part of a comprehensive test ban treaty.

Another contribution which Britain could make, especially since the United States believes that the phased array radar at Krasnoyarsk is intended to control a ballistic missile system, is to take up the Soviet offer to stop the development at Krasnoyarsk in return for stopping work to produce a phased array radar at Fylingdales and at Thule in Danish territory.

If the American Government are worried about Krasnoyarsk, here is an opportunity to get rid of both. There is no question that if such phased array radars, whether in the Soviet Union, Britain or Greenland, were used as battle management stations for ballistic missile defence, they would be a flagrant violation of the antiballistic missile treaty. I suggest that the Foreign Secretary should immediately approach the United States and say that we insist that the United States should negotiate on the Soviet offer to stop development in Krasnoyarsk in return for stopping development at Fylingdales and Thule, and will refuse to proceed with the development until and unless such negotiations begin.

The correspondent for The Times in Washington reported last week that diplomats and politicians are asking two questions about President Reagan. Can he cope? Does he know what he wants? The second question is unfair. He knows exactly what he wants from the star wars system, and he described his desires eloquently in his interview with the BBC. The trouble is that nobody believes that what he wants is attainable. He has been deceived by his advisers on star wars as he was deceived by those who told him that there is no word in the Russian language for freedom. That is another remark that he made in his BBC broadcast. Those who share his yearning, as I hope all of us in the House do, to base the security of the human race on something other than mutually assured destruction know that star wars is not the answer. To pursue the star wars mirage means only an accelerating arms race in both offensive and defensive nuclear weapons.

The truth lies elsewhere. We need a freeze on all new nuclear weapons as the basis of our negotiation on the more complex but less urgent task of reducing the number of existing weapons. I agree with what I hope the Foreign Secretary implied, that that task, at least in Europe, could be achieved quite quickly, certainly if the British and French Governments would agree to let their forces be counted in the balance.

I regret that the Prime Minister, as the Foreign Secretary told us, has refused to talk directly to the Soviet Union about British weapons, but I welcome the fact that she has agreed to let the Foreign Secretary talk to Mr. Shevardnadze about wider aspects of disarmament on a bilateral basis. I am asking the British Government to take a lead in bringing the world back to sanity, to halt and reverse the nuclear arms race and to offer us a future to which out children can look forward with hope rather than with despair.

10.44 am

Mr. Reg Prentice (Daventry)

I congratulate my right hon. and learned Friend the Foreign Secretary on the speech with which he opened this debate and, if I may venture to do so, on the continued excellence of his work as Foreign Secretary. The country owes him a great debt. I particularly appreciate, and I think the House will appreciate, his analysis of the situation leading up to the imminent meeting between President Reagan and Mr. Gorbachev.

For old times' sake I should have liked to congratulate the right hon. Member for Leeds, East (Mr. Healey) on his speech, but I am afraid that I cannot do so. For more than a quarter of a century I have had the experience of listening to him speak from the Opposition Dispatch Box—that is, in the intervals when he was not in government and behaving differently—during his long, painstaking search for the office of Foreign Secretary, which must seem more remote as time goes on. The right hon. Gentleman's speeches are getting worse. Every speech —and this is particularly true of the one that we heard this morning—is preceded by an exhaustive and exhausting trawl for every detail, every statistic and every quotation—given out of context—and every varying nuance of meaning that he can discover between spokesmen in one department in Washington and another. That is all intended to add up to a niggling criticism of President Reagan and to be yet one more bid on his part to gain some support from the members of the Labour party, who are becoming more infected by anti-Americanism.

I listened with fascination to a quotation from some learned journal on geology, and I listened in vain, as did the House, for any message of support and good will for the President of the United States, who enters these very difficult discussions representing not only the United States but the Western democratic world in general. In this role, President Reagan deserves a message of support and encouragement from all of us in the House. This does not preclude detailed criticism here and there, but the general good will that we owe him as the leader of the Western world, and the respect that we owe him for the way in which he proclaims the values of the Western world, should come loud and clear from the House in this debate. There was not a murmur of that from the right hon. Gentleman.

I listened in vain for any reference to the problems of sub-Saharan Africa and the relevance of the British overseas aid programme. If the right hon. Gentleman had spoken about that, I would have been prepared to forgive him for the many conflicts that I had with him when I was Minister for Overseas Development and he was Chancellor of the Exchequer. During that time he was trying to reduce the Labour Government's inadequate aid programme, but was not allowed to do so by his Cabinet colleagues.

Other hon. Members on the Labour Front Bench, including the Leader of the Opposition, have been trying to make a party political argument out of the overseas aid programme. I can look back over many years of arguing for a better British aid programme, which has never been good enough, under either Labour or Conservative Governments, and is not good enough now.

Mr. Jeremy Corbyn (Islington, North)

Perhaps that is why the right hon. Gentleman joined the Tory party —on account of its wonderful concern for the poor of the Third world.

Mr. Prentice

My reasons for joining the Conservative party go wider than this debate and have often been stated, but I am prepared to state them again. I believe that Governments of both parties have failed to measure up to events, but I think that those who care about these issues have more respect for the Conservative Government, who have never promised to reach the United Nations target, than they have for the Labour party, which has always promised to do so in opposition, but has always moved away from it in practice. We should reach the United Nations target.

The House is in an unfortunate position during the debate on the Queen's Speech, not simply today, but all next week, because while we are discussing the Government's programme for the coming Session, we are told in the newspapers that the Government have been completing their review of public expenditure. We are led to believe that that was finished yesterday morning and that there will be a statement early next week.

The shape and size of every major programme with which we are concerned will be determined by the figures in that review, yet the House will have to discuss housing, education, law and order and many other issues, including the overseas aid programme, without the basic facts. That is a pity. The matter should be the subject of discussion through the usual channels in future years, so that when we look at all the programmes for the coming year in the context of the Queen's Speech debate it can be a more informed debate because hon. Members have the figures.

Public expenditure rumours keep coming into the Chamber, more or less in the role of Banquo's ghost. That is not satisfactory. If I am to believe the newspapers—I always try to—about a week ago, an argument was going on between my right hon. and learned Friend the Foreign Secretary and my right hon. Friend the Minister for Overseas Development, who wanted an increase compared with the figure that had been projected for 1986–87, and the Treasury Ministers, who, I read in the newspapers, wanted to cut it. The more recent rumours are that there is to be no cut, but a modest increase. I hope that that is so. My argument still is that we should be doing significantly more. When I say "we", I mean Britain as well as every other country in the Community and the Western world generally, as well as in the northern hemisphere, because the Soviet bloc's record in that regard is pitiful.

I do not want to repeat the standard arguments which I and many other hon. Members have often stated in the House. I want to make one simple point. I believe that the tragic situation that has developed in sub-Saharan Africa adds a new dimension to the problem. Increasing numbers of people who have always lived in a state of malnutrition are now suffering acute starvation, or are on the edge of it. Many reasons for that have developed in recent years—the succession of droughts, the advance of the desert into lands that were once cultivated, the increase in population, the mistakes, sometimes criminal, of some of the Governments of that region, the civil war in Ethiopia, aid so on. That has presented the world community with a challenge that is much larger and on a different scale from anything that we envisaged a couple of years ago.

This morning I was interested to hear the statement by the Director-General of the Food and Agriculture Organisation that the rains had made an improvement for the moment in some of those countries, but only some. Some are off the danger list of imminent starvation, but others are still very much on it. The point is that they are all very vulnerable. That state of affairs will continue for many years, and may get worse rather than better. From time to time we are likely to have to send in massive amounts of food aid, accompanied by medicines and other forms of emergency aid. We shall have to do much more in long-term develoment aid.

Within the aid programme, a contingency sum has always been set aside every year to help with emergencies. That has been fair enough for a temporary emergency such as an earthquake, the outbreak of civil war or a particularly bad drought. We send relief, and the contingency fund is in the programme for that reason. However, when we are dealing with a situation of this size and duration, that cannot be the real answer. If it has to be dealt with within a programme that is not increased, that means that this year, next year and in the years to come we shall be giving extra help in Ethiopia or the Sudan at the expense perhaps of India or Bangladesh. That is not good enough. I cannot guess what the public expenditure figures will be, but there should be a significant increase at least to recognise that new challenge.

There is also a new dimension in public awareness in Britain. The television programmes that showed children starving caused a shock wave in public opinion. As a result Bob Geldof and his friends have received a magnificent response for the great efforts that they have made and are still making. It did not start with Bob Geldof. I am sure that every hon. Member had this experience. In my constituency there were fund-raising efforts after those television programmes, by schools, youth groups, churches, women's institutes and specially formed village action groups, which raised a great deal of money. They properly wrote to me and said that the Government must do more. They are also doing something more significant. Many of those people are continuing to study the problem in depth. They recognise that it is a question, not just of emergency help, but of long-term development, and that we should not help east Africa at the expense of countries such as Bangladesh. They are prepared to continue fund raising, but they will also continue to demand of us a bigger response.

Those events have touched a sensitive nerve. Therefore, I say to my right hon. Friends on the Front Bench that, much as I support in general the strategy of the Chancellor of the Exchequer and the need for public spending restraint, I believe that there is a moral imperative in the aid programme that makes it unique, and that the people of this country are entitled to look to the Government and all political parties in the House for a bigger continuing commitment than we ever achieved in the past.

10.57 am

Mr. Donald Stewart (Western Isles)

The subject of today's debate is foreign affairs, but, as right hon. and hon. Members will appreciate, I wish to say a fair bit about what the Gracious Speech means for Scotland. However, therein lies my first point. There is so little about Scotland in the Gracious Speech that we might as well be a foreign country.

On Wednesday, I heard the Prime Minister congratulating her hon. Friend the Member for Aberdeen, South (Mr. Malone) on his speech, and I join her in those congratulations. When I heard her referring to his constituency as being in the far north, that made me wonder whether she thinks about my constituency; if ever it crosses her mind, she must imagine that we go about our business with teams of huskies. Little consideration is being given to the problems facing Scotland.

The Government give a false impression when they talk of maintaining a substantial aid programme, because our aid programme compares poorly with that of many other developed countries. It has been cut substantially in the recent past. Without a sustained attack on world poverty and famine by the countries of the northern hemisphere and more long-term development programmes, disasters, famines and other tragedies will crop up again and again, and the Government's performance so far has been deplorably inadequate. I agree with the right hon. Member for Daventry (Mr. Prentice) that the Labour Government's record has little to recommend it, although it was much better than the present Government's record.

In spite of the present difficulties of the United Kingdom, in world terms we are a relatively wealthy country and should be doing much more for the developing nations than we have done in the past under Labour or Conservative Governments.

The Foreign Secretary referred to the closer political unity of the EEC and mentioned several factors which make that desirable, but he omitted to refer to the other side of the account, which is that it can be accompanied only by further erosion of national sovereignty. The United Kingdom will learn about that in due course.

With regard to the accession of Spain and Portugal to the EEC, I have grave misgivings in one regard—the threat that it may pose to the Scottish fishing industry. The fishing fleets of those countries are in total greater than all the fishing fleets of the rest of the EEC. Naturally, I hope that the Government will get the best possible deal for our fishermen, but on past performance the chances are remote.

Fishing is no longer of great importance in England, so it is of no great importance to the Government when they reach the EEC bargaining table. In any case, whatever deals are made, there is also a crying need for better policing and inspection. Up to the present, the policing in our waters has been too often a joke. We need drastic action if our waters are not to be plundered by the new fleets from the Mediterranean countries.

I am disappointed that nothing was said in the Gracious Speech about the Government's attitude towards renewal of the multi-fibre arrangement. It is of tremendous importance to the textile and clothing industries that the arrangement should be renewed. There is a great fear in those industries that the Government are adopting a weaker position in the present negotiations. I hope that that will prove to be mistaken.

I am disappointed to see so little reference in the Gracious Speech to the problems of unemployment, especially in relation to Scotland, where, according to the most recent figures, it is still rising.

The Minister for Overseas Development (Mr. Timothy Raison)

I was interested in what the right Gentleman said about the multi-fibre arrangement. He seemed to be anxious that no more textiles from overseas should be admitted to Britain than is necessary. How does he square his rather hard-line view on that with what he says about overseas aid?

Mr. Stewart

I do not think that it will improve the position of overseas countries, in so far as we are able to help them, if we are to impoverish ourselves even further by not renewing the multi-fibre arrangement. I find nothing conflicting in my remarks. The Government preach that we must stand on our own feet, look after ourselves and then dispense any charity that is available. Indeed, the Prime Minister actually corrupted the story of the Good Samaritan by suggesting that he was able to help only because he happened to be well-heeled, and that he would not have been able to do so otherwise. Perhaps the Prime Minister should answer the Minister's question.

There appears to be more space in the Gracious Speech devoted to salmon fishing and the prevention of poaching in Scotland than to unemployment in Scotland. I heard some of the Conservative troglodytes growling with approval when that part of the Gracious Speech was read. "This is the way," they thought. "Deal with the poaching of salmon. That is the way to get to grips with the problems that face the United Kingdom".

The continuing commitment in the Gracious Speech to controlling public expenditure means that we can have little hope of the many full-time jobs that need to be created. Indeed, public expenditure cuts dominate the speech. The references to them are often couched in Orwellian newspeak, but the meaning is clear. The speech refers to Measures … to reform the operation of the Wages Councils". It also refers to reforming social security and to legislation

to facilitate funding by the industry of agricultural research, advice and related services". That manipulation of the English language could have sinister connotations were it not for the fact that the record is clear. We all know what it means. The code can be deciphered by all. The Government cannot get away with it. All the measures mean cuts, and the Government cannot hide behind the rhetoric.

I am also disturbed by the Government's determination to push through a Bill to remove statutory restrictions on shop opening hours, particularly on Sunday. Like other hon. Members, I received a letter in my mail today which mentions individuals, organisations, churches and other bodies opposed to the change in Sunday shopping hours. I shall not read them all but we should take note of some of them. The list answers the propaganda that there is widespread demand for Sunday trading. No such demand exists; I entirely refute the claim. It is sometimes claimed that Scotland has this freedom, but there is no basis whatever for the claim. The Secretary of State for Scotland said yesterday that it is the exception to find shops open in Scotland on Sunday. There is no basis for that propaganda.

Bodies opposed to the measure include the Association of Independent Retailers, the Bakers, Food and Allied Workers' Union, the British Council of Churches, the British Hardware Federation, the British Independent Grocers Association, the Catholic Bishops' Conference, the Church of England, the Co-operative Union Ltd, the Drapers Chamber of Trade, G. A. Dunn and Company, the Evangelical Alliance, the Free Church Federal Council, the Free Church of Scotland, the Free Presbyterian Church of Scotland, the Independent Footwear Retailers' Association, the John Lewis Partnership, John Menzies plc, the Multiple Shoe Retailers Association, the National Chamber of Trade and the National Federation of Meat Traders.

The list is endless. Having read it, I am wondering who on earth is in favour of the measure, apart from the Government. There does not seem to be any evidence that it is required in any way. The only basis for it is commercial greed. The Tory party wants to have the reputation, certainly in Scotland, of being far more solicitous than the Labour party with regard to Sunday observance but, now that money talks, the fourth commandment has to go.

It was suggested yesterday from the Conservative Benches that the question should be left to local authorities. I am interested in the view that the Government should now return some decision making to local authorities. It is against the recent trend of the Government's thinking. I am opposed to leaving the question to the decision of local authorities. The decision should be made in this House. I commend those Conservative Members who have said that they are prepared to oppose the Government on this type of legislation.

I welcome the reference in the Gracious Speech to drug peddling. It is a problem that concerns all parties in the House as well as the nation.

I welcome what has been promised on improving law and order but it would be a gross confidence trick if the Conservative Government, in the light of what has happened since they came into office, were to pretend to be the only party in this House concerned with law and order. That pretence could backfire on them. The point was dealt with yesterday in an excellent speech by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan).

In passing, I commend the Home Secretary for the pronouncements that he has made to date. I believe that in his new office he is acting in a firm and civilised manner.

I note with some wry interest the Government's commitment to seek widely acceptable arrangements for the devolution of power in Northern Ireland. They seek to impose on Northern Ireland something that the majority of the people of Northern Ireland do not want. In Scotland, most people want a Scottish Parliament. As many as 29 per cent. want a completely independent Parliament, and 44 per cent. want an Assembly with substantial powers. That expression of view has been ignored, just as the majority vote for the Scotland Act 1978 was ignored. At that time, the Prime Minister and Lord Home promised to produce a better Bill for devolution in Scotland. We are still waiting for it, just as we are still waiting for the new Bill on rating in Scotland. The growing strength of the movement for Scottish government is a factor that the Government, and any future Government, will ignore at their peril.

11.10 am

Sir Peter Blaker (Blackpool, South)

I have recently had the good fortune to visit three countries in the far east, and I want to say a few words about each. The first country was Japan, and the most important question in our relations with that country concerns the measures that Japan is taking in an attempt to reduce its vast trading surpluses with the remainder of the world.

The measures take three forms—liberalisation of the barriers to imports, stimulation of demand and raising and sustaining the value of the yen. I have no doubt that the Japanese Government intend to make the measures effective. I cannot judge whether they are sufficiently ambitious, but I have two doubts about whether they will be successful. Indeed, some of the Japanese to whom I spoke shared my doubts.

The first doubt is whether it will be possible to change the habitual practice of so many Japanese business men to buy Japanese without studying what is available from overseas—unless, of course, nothing Japanese is available. The second doubt is whether it will be possible to sustain the value of the yen—the most important of the three measures—in view of the enormous demand for Japanese funds from America. The financial flows from Japan to America during the past 12 months amounted to $40 billion, which is equal to Japan's trade surplus with America.

Whatever may be the validity of those doubts, it is important that Japan's measures to reduce its trade surpluses with the free world countries should indeed be successful; otherwise we will be faced with ever-increasing demands for protectionism in the United States Congress, which will have implications not only for economic relations in the free world, but for our political cohesion. This House should make it clear that it believes that it is important that Japan should succeed in its efforts.

The second country I visited was China, where the results of the liberalisation measures since 1979 are becoming evident. I visited a fanning township, which not long ago would have been called a farming commune, where the average income per worker has doubled during the past five years—admittedly from a low base—owing to the new incentive and liberalisation measures.

It is more difficult in an urban environment to apply incentives, but the Chinese are making efforts to introduce them more and more into the factories, and the results are becoming apparent there too. Indeed, these results and the enthusiasm shown by the Chinese for the changes are such that it is extremely unlikely that the new liberalisation tendency will be reversed. If there were any strength behind a desire for a reversal, I think that the memories of the horrors of the cultural revolution, which are fresh in the minds of many people, would be an effective barrier.

China wants to learn how an incentive-based economic system works, it wants to trade with the outside world and especially the free world and it wants joint ventures. This open door policy provides great opportunities to foreign business men, and especially to British business men because of the good will between China and the United Kingdom generated by the agreement on Hong Kong.

The Chinese market is undoubtedly difficult to enter for a business man who does not already know it. My advice to potential British exporters or those interested in joint ventures is to find someone who knows the China market. There is no better place to find someone to give that advice than Hong Kong, the third country that I visited.

Despite the agreement between the United Kingdom and China, there is still concern in Hong Kong about the future after 1997. I believe that that concern will steadily diminish as practical arrangements are made between the British and Chinese Governments on the various matters covered in the joint declaration and agreement.

There have been two recent examples. The first was an agreement in the Land Commission about the amount of land to be released in the coming 12 months, which was reached in a cordial and rapid manner. The second agreement was within the joint liaison group about Hong Kong's position in the Asian Development bank.

As I have just hinted, the importance of capitalist Hong Kong to China will become ever more obvious. We used to say that Hong Kong's value lay principally in its being a source of foreign exchange with China. Although that is still true to some extent, it is becoming more and more clear that Hong Kong is China's best source for technology.

One of the problems still debated in Hong Kong is whether—and if so, how fast—progress should be made towards more representative government. I was in Hong Kong when the new legislative council was inaugurated in its new building. It was a landmark in the direction of representative government. For the first time, it contains elected members. I believe that further constitutional development should be undertaken with caution. If it is too fast, it could damage the stability and prosperity of Hong Kong, which would not happen if we proceeded with caution.

I have mentioned three countries, two of which—Japan and Hong Kong—are success stories, not simply by Asian standards but by world standards. They are free enterprise countries. The third country, China, is engaged in a difficult struggle towards greater incentives and more economic success, following the agonising period of rigid state control and state ownership.

Would it not be a good idea if the Labour party sent a high-powered delegation to those three countries to study their respective economic systems? Perhaps then the Labour party might learn a thing or two.

11.17 am

Mr. Ian Mikardo (Bow and Poplar)

I shall not follow the right hon. Member for Blackpool, South (Sir P. Blaker) and speak about the far east, for the very good reason that I am not sufficiently well informed to speak with any authority. I have an old-fashioned prejudice against people who shoot off their mouths on subjects about which they do not know a great deal.

I shall devote my remarks to the middle east, an area of which I have been a deep student and in which I have travelled widely throughout the greater part of my adult life. I begin with a general observation, which is that to my mind almost all the discussion about the middle east, in this Chamber and elsewhere, is bedevilled by the fact that it takes place on much too narrow a front.

People talk about the middle east as though all its problems flow from the southern half of the littoral of the eastern Mediterranean. The countries of the whole area, from the Atlantic coast to Morocco to the border between Pakistan and India, are characterised by a great interweaving of relations and a great interlocking of interests and conflicts. One cannot look at any one part of the area in isolation. That includes the Arab world, Israel and the four contiguous, large and important non-Arab Moslem countries of Pakistan, Iraq, Afghanistan and Turkey.

I become fed up with those whose only attitude to the middle east is to say, "If we could only get rid of the argument between Israel and its neighbours, everything in that great garden would be lovely and there would be no problems. The whole of that Arab world would be a haven of peaceful development." That is not true. What would happen if it were possible to wave a magic wand, as a few would like to do, including one or two in this place, to ensure that Israel disappeared overnight? If that happened, there would still be the great dangers that are inherent in the rivalry in the area between the two super-powers. There would still remain the great dangers that are involved in the frantic Soviet search for naval bases in the Mediterranean, the Red sea, the Indian ocean and around the Horn of Africa, which my right hon. Friend the Member for Leeds, East (Mr. Healey) rightly described as the most immediate threat to world peace.

If Israel disappeared overnight, there would still be great problems arising out of the instability of the Governments of all the Moslem states. No respectable betting man would put a single coin on the certainty that any one of the Governments of the Moslem states will still be in office in three years' time. Perhaps that is partly because not one of them is a genuine pluralist parliamentary democracy. It is perhaps partly because 12 of those Government came to power by military acts of violence. Those who come in by the sword often go out by it in many parts of the world.

There are rivalries between the Moslem states. There is the enmity between Syria and Jordan. There is the full funny old relationship between Syria and the Lebanon. There is the quarrel between Syria and Egypt, as well as the quarrels between Egypt and Libya and between Greece and Turkey over Cyprus and the projected mineral deposits in the Aegean. All those conflicts would remain if Israel disappeared.

There are rival territorial claims between Saudi Arabia and Oman. There is the war between Iran and Iraq. In the first of the two battles of Khoramshahr there were more killed in 36 hours than in all the five wars between Israel and its neighbours put together. Apparently that battle did not rate a line in our press. It did not rate a mention in the Chamber. The war continues and no one sees the end of it.

There is a war between Morocco and Algeria in which Algeria is fighting with the Polisario front as its surrogate. That war has been going on for years and it would continue even if Israel disappeared overnight.

If Israel ceased to exist, there would still be a Soviet army in Afghanistan and a Libyan army in Chad. We must view the problems of Israel and its Arab neighbours against the background of the tremendously complicated relationships and the political and religious rivalries throughout the region. If one considers the Israel-Arab problem against that background, one can start to make a real assessment of the prospects of peace between Israel and its neighbours.

We all know that there are still many great obstacles in the path of peace, but there are some new factors that give cause for some encouragement and hope. To take the black side first, what are the main obstacles in the way of the peace process? The first, and perhaps the most serious in the long term, is the growth of religious fundamentalism. Islamic fundamentalism is best illustrated by the Iran-Iraq war, which is really a war between the Sunis and Shi'ites. A danger is posed by the Hebrew fundamentalists on the West bank. On the whole, they are rather less vicious than their Islamic counterparts, but they are still a considerable obstacle to peace.

The second obstacle to peace is Syria. It is not generally realised that Syria has a serious ambition to recreate Greater Syria. Syria looks upon the Lebanon, Palestine and Jordan as parts of Syria. Syria has never recognised the existence of the Lebanon. There has never been a Syrian embassy in Beirut and there has never been a Lebanese embassy in Damascus. Syria regards the Lebanon as the Lebanese province of Greater Syria. To the Syrians, Jordan is the Jordanian province of Greater Syria. When King Hussein lies tossing sleeplessly in bed at night, he is worrying about the Syrians and not the wicked Israelis. Syria has an equivocal attitude to the Palestinians because it looks upon Palestine as the Palestinian province of Greater Syria.

The third obstacle to peace is Israel's coalition Government. Those who think that it is a good idea to have some system of proportional representation that will avoid a one-party Government—there are some who think that it is better to have a Government in which more than one party is represented —could learn much from what is happening in Israel. The Government of that country has been struck by paralysis. It is clear that the peace process will not continue until the present Israel Government disappear and until Mr. Peres leads a Labour Administration.

The fourth great obstacle to peace is represented by the divisions within the PLO, which are doing great harm to the Palestinian cause. There are divisions in the leadership of the Palestinians, between PLO and non-PLO factions. There are dreadful divisions within the PLO itself. The PLO has adapted the double strategy which is known in Britain as the Armalite and the ballot box to become the hijack and the seat at the negotiating table. There is dreadful schizophrenia among the PLO about that and that is holding back the cause of the Palestinians in a way that they do not deserve. There is considerable danger that the PLO could become the OPL—not the Palestine Liberation Organisation but the Obstacle to Palestine Liberation.

As against all those difficulties and obstacles, there are some positive factors. There is a much greater will for peace among many Israelis. There has been a huge growth —I saw it with my own eyes a couple of weeks ago—in the numbers and effectiveness of the "Peace Now" movement. There is a growing understanding among circles in Israel which did not understand it before that territories that are held against the wishes of their peoples are liabilities, not assets, and could become grave liabilities. That conviction has been reinforced by the experience of the idiotic adventure in the Lebanon.

There is a greater will for peace among many Palestinians, especially on the West bank. I have talked to many of them and that is my clear impression. A local leadership is growing up which is becoming much more confident. These leaders are still a bit worried because they can get a bullet in the back at any time if they say something that the more extreme elements do not like. However, the leadership is becoming more confident and there are increasing signs that the people on the West bank want to continue to be allowed to till their fields and do not wish to be ruled by aliens. They want to get on quietly with their work and do not wish to give way to fanaticism of any sort.

I thought it significant that the President of Israel was able to do a "walkabout" around the West Bank unaccompanied by any security guard. He was able to talk to any and everybody. He is a good Arabic speaker. I thought it significant that in the last mayoral election in Jerusalem more Arabs voted for the Jew Teddy Kollek than had ever voted in previous elections for any Arab candidate when a large part of Jerusalem was occupied by Jordan.

The rapprochement between Egypt and Jordan is encouraging. So is the softening in the Soviet attitude, to which my right hon. Friend referred. I went with other members of the Foreign Affairs Select Committee to Moscow recently. We had an extended week as part of our study of UK-USSR relations. Towards the end of the week we had a second meeting with our opposite numbers, members of the foreign affairs commission of the supreme Soviet. They were a great deal more open and frank than they had been during our first meeting at the beginning of the week, which in itself was an encouraging sign.

At that second meeting, we put to the people on the Soviet side the argument that they were not acting in the best interests of their country by excluding themselves from the middle east peace process and by continuing to have no diplomatic relations with Israel. There are now signs of some moves in that direction. I should like to think that what we said to our opposite numbers in Moscow had some influence. It may or may not have done so. It may be merely that we were pushing at an already open door. We shall never know which is true. It does not matter which is. What does matter is that there are moves in that direction.

I wish to say a few words about what role, if any, this country has to play in the middle east peace process. I shall begin with a short historical preface. For centuries we were the dominant power in that part of the world. We successfully fought off attempts to replace us as the dominant power first by France, then by Germany, then by Turkey and then by Germany again.

Since 1945, we have thrown that position away, as a direct result of colossal blunders committed by five of our Foreign Secretaries —two Labour and three Conservative. First, there was Ernest Bevin with his malevolent misjudgment of the position in Palestine immediately after 1945 which led him on a downward spiral of error until he reached the point where he was sending escapers from Nazi concentration camps back to the same camps and using a rather unwilling British Navy to enforce those moves.

Herbert Morrison then got himself into a mess in his negotiations with Mossadeq, who was then Prime Minister of Iran, with the result that our American allies, who love us so much, seized the opportunity to jump in and largely edge us out of the Gulf area, to their benefit and our disadvantage, to the benefit of their oil companies and to the disadvantage of British-owned oil companies.

Then there was Eden, who never understood the Arabs and who got it all wrong. That finally led him, when he was Prime Minister, into the hideous error of the Suez invasion in 1956.

There is a lesson for everyone who talks, as the Foreign Secretary and my right hon. Friend talked today, about creating a European foreign policy, as though it was an easy and tremendously good thing to do. The Foreign Secretary's predecessor, Lord Carrington, in the six months during which he had the chair of the European Community, thought that he would do something dramatic about the middle east. Lord Carrington believed that the one issue upon which he could most readily obtain agreement from his opposite numbers in western Europe would be the middle east. A conference was convened at Venice. The Prime Minister was very much involved in it all.

The conference produced the Venice declaration, which was hugely pro-Arab and pro-PLO. They expected that the Israelis would reject it, but they equally expected that the Arabs would welcome it and that the Palestinians would jump for joy. Predictably, within a couple of hours of the publication of the Venice declaration, the Israelis denounced it. Two hours later, the PLO denounced it in language much stronger than that used by the Israelis.

The then Minister of State at the Foreign and Commonwealth Office, who was the best friend the Arabs ever had in the House, came to answer questions a couple of days later. He was a broken man. He was shattered. He had gone to all those lengths with the Foreign Secretary and the Prime Minister to create a great gift for his friends and they had not just looked the gift horse in the mouth; they had spat in the giver's eye. Everyone in the middle east saw that as a great joke. That great publicised effort finished in a dreadful flop and fiasco.

The last occasion was the joint Palestinian-Jordanian declaration, which my right hon. Friend called a diplomatic shambles. That is perhaps the understatement of the year. Anyone who knows the Palestinians could have told the Foreign Secretary that there was no chance that those two Palestinian gentlemen who came here would renounce the Palestinian covenant. They are members of the executive of an organisation which has a constitution —the Palestinian covenant. The Palestine covenant does not talk about the PLO coming to the negotiating table. It says that the only solution to the problem is out of the barrel of a gun. The PLO does not wish to negotiate with Israel. It wishes to drive all Israelis into the sea. Those men are bound by the covenant. To expect them to come here and denounce it would be like expecting a couple of us to go abroad for some talks and denounce the oath of allegiance to Her Majesty that we all take when we come into this place. That is binding upon us and the Palestinian covenant was binding upon them.

If we are to do anything, we must proceed modestly. We must be modestly conscious that, at best, we can play only a minor part on the middle east stage. We can go on to that stage only when we are invited by both sides. When we get on it, we had better walk delicately like a pedigree cat, rather than go charging around, as we have done up until now, like a bull in a china shop.

I hope that when those matters come before us at points of action, a good deal more thought, understanding and study of the area and its peoples will guide the actions of Her Majesty's Government than appears to have been the case until now.

11.40 am

Sir Julian Ridsdale (Harwich)

I hope that the hon. Member for Bow and Poplar (Mr. Mikardo) will forgive me if I do not deal with what he said about the middle east. I wish to return to the main theme of the debate. However, when the hon. Gentleman criticised some of the Moslem dictatorships in that part of the world, I was reminded of what was said when I was in Korea once by some young Korean university students—that it is very difficult to be a democrat on an empty stomach. I understand the wisdorn of the hon. Gentleman's words of advice, that it is best in politics to adopt a low posture. Results are sometimes better achieved in that way than by the use of megaphone diplomacy.

The main theme of the debate is the forthcoming negotiations with the Soviet Union. First, I congratulate my right hon. and learned Friend the Foreign Secretary on his excellent review, and I join my right hon. Friend the Member for Daventry (Mr. Prentice) in congratulating him upon his stewardship at the Foreign Office. His low posture stewardship is producing results. In my speech I have to support what my right hon. and learned Friend said about providing help for the developing world.

The right hon. Member for Leeds, East (Mr. Healey) did not help by running down our chief negotiator in his efforts to bring the nuclear arms race to a close. There ought to be unity, not disunity, when one enters into negotiations, but in his speech the right hon. Member for Leeds, East portrayed disunity.

During the opening stages of the debate the Prime Minister said that the President of the United States has given an undertaking that research into the strategic defence initiative will remain within the bounds of the ABM treaty. It is vital that this point should be stressed, because existing treaties are so important. I hope that the Soviet Union's extensive programme will similarly be included in the ABM treaty. The right hon. Member for Leeds, East did not say a word about this. However, it is vital that it should be included. I am glad that my right hon. and learned Friend underlined the Soviet Union's strategic defence initiative and laser research. It is vital that this is made clear to the public, otherwise people will be unable to see through the shallowness of some of the arguments that are being deployed, not only by the Opposition but by the Soviet Union.

I agree with the Prime Minister that a reaffirmation and strengthening of the ABM treaty would be a positive and commendable outcome of the summit. If it is pursued, I hope that the strategic defence initiative will create mutually assured security, and not what some people describe as mutually assured madness. I have attended three briefings by General Abrahamson, the leader of the United States SDI programme, and I attended a recent North Atlantic Assembly meeting in San Francisco. I am sure that, because of his successful leadership of the shuttle programme, he will be a good leader. Nevertheless, I hope that at the summit there will be an agreement not to proceed further than the ABM treaty will allow.

Nuclear negotiations are not enough. My right hon. and learned Friend the Foreign Secretary was right to speak about human rights and Afghanistan. Cannot agreement be reached, too, on chemical weapons? I underline my right hon. and learned Friend's point, that it is important to have a total, verifiable ban on chemical weapons. Yet how gloomy it is that during the last 10 years mutually balanced force reductions in Europe have made little progress. I make this point after touring this August the northern flank of NATO, our most important flank, and after taking into account the growing power of the Soviet navy, its powerful nuclear submarine force in the Barents sea and the formidable military landing craft capability of the Soviets in the Baltic. Those of us who have to face reality pay tribute to NATO, and especially to the lead that has been given by the United States during nearly four decades.

I have been a member of the North Atlantic Assembly for six years, and I am vice president of its political committee. The North Atlantic Assembly is the Parliament of NATO. If only NATO, or an equivalent organisation, with the United States playing its part, had been in existence in the 1930s, there would not have been a second world war.

I am concerned about the lack of support by the Labour party for NATO, and about the disparaging way in which the right hon. Member for Leeds, East turned upon the United States in his speech. When I entered the House in 1954, I remember that many Members on the Opposition Front Bench had been in the war cabinet with Winston Churchill and that they said, "We will never make the mistake of no support strength again." In my view, the Opposition are making that mistake again. It may be that this is because of their idealism, but they must face reality and wholeheartedly support the President of the United States in the vital negotiations that are now taking place.

I have just returned from a meeting of the North Atlantic Assembly in San Francisco. I was much impressed by the care shown by the United States to consult its allies, not only on the strategic defence initiative, but on all other issues. That is why NATO is so successful an alliance. One day of the conference was set aside to discuss Pacific affairs, the Japan-United States security pact. What NATO does in the Atlantic, this pact, in good measure, does in the Pacific. It is in our interests to see that a proper balance is kept between United States interests in the Pacific and in the Atlantic. In my view, this is being done, but we must realise the kind of pressures that there are in the United States to turn its eyes westwards to the Pacific. The Pacific basin is an enormous magnet. The United States is doing a great amount of trade in the Pacific, and has great defence and other interests in that region. However, to its credit the United States is saying that it will play its part in NATO as well as in the Pacific.

In this context, I underline the growing importance of Japan. This point was referred to by my right hon. Friend the Member for Blackpool, South. I would underline the growing strategic importance of Japan and the part that it is playing, not only in China and south-east Asia, but in the sub-continent. One of the most vital diplomatic moves in the last 15 years has been Japan's move towards Beijing. It has been made with the full co-operation of the United States and western Europe. Japan's economic success and the wealth that it has created has proved to be a far greater diplomatic weapon than merely military arms. We are preoccupied with the imbalance of trade with Japan, but the Japanese Government have signified their intention with several measures to try to ease the problem—

Mr. Mikardo

They have been saying that for 15 years.

Sir Julian Ridsdale

However, the most important matter is not the measures that they have said they will take directly to affect imports, but the help that they have said they will give to the developing world. The hon. Member for Bow and Poplar said rightly that such noises have been made for some years, but I hope that the Opposition will concentrate on what the Japanese Government have said now. They have introduced a vast programme of help for the developing world during the next eight years.

Anyone who has travelled in the Indian sub-continent and in Bangladesh, as I have recently, cannot help but be struck by the poverty there. One is also struck by the Japanese presence, not only in Bangladesh, but in the entire sub-continent. If Britain can join in joint ventures with Japan, it will benefit not only the developing world but this country. The fact that the Japanese will spend £80 billion during the next six years is a sign of their vast wealth and gives us some idea of the challenge that could be taken up. The programme could be of great help to countries such as Britain, which have a large imbalance of trade with Japan. The Americans are also interested in joining those ventures.

My right hon. and learned Friend the Foreign Secretary was right to refer to the growing political and economic co-operation in Europe. If Europe can emulate the growth achieved by Japan, it will have a similar influence not only in the middle east but in Asia and the Indian sub-continent. That is why I welcome the appointment of Lord Pennock and Lord Cockfield to examine the causes of the lack of co-operation in creating a common industrial market in Europe. Only with a common industrial market will Europe have the depth of co-operation and economic base that can ensure the success of diplomacy.

The prospects for fruitful negotiations in Geneva must be on all our minds. I fear that, although the tone of the Soviets may have changed, their policies have not. I hope that I am wrong. It may be some time before we achieve positive results, but to achieve those results we must keep up our guard and build our strength. By that I mean that we must help the developing world and build our economic strength, because the thaw will come, not through arms alone, but through the challenge of our economic strength to Russia.

11.52 am

Mr. Richard Livsey (Brecon and Radnor)

The debate gives me the opportunity to speak on behalf of the Liberal party on some of the great foreign issues of the day. The right hon. Member for Western Isles (Mr. Stewart) said that Scotland was poorly treated in the Queen's Speech. He is lucky; Wales was not mentioned at all. As a Welsh Member of Parliament, I deprecate that. I trust that it was not the work of the Foreign Secretary, who is known to be proud of his Welsh heritage.

The world looks to the arms control negotiations in Geneva for a positive reduction in the nuclear weapons held by the Russians and the Americans. We hope that the negotiations will he successful. A heavy responsibility lies on President Reagan and Mr. Gorbachev to ensure that common sense prevails at their summit meeting, and we wish them well in their task.

The record of recent years does not give rise to a great deal of hope. The deployment of SS20 missiles by the Russians and of cruise missiles by the Americans, and now the strategic defence initiative, with President Reagan in the van—all escalate the nuclear arms race—a race which makes the world a dangerous place in which to live. That applies to nations who possess nuclear weapons as much as to those who do not. I beg the House to realise that the democracies of western Europe are looking forward to progress in the talks. They hope for real reductions in nuclear weapons, and anything less will prove a grave disappointment. They will feel badly let down if no progress is made.

Britain still has a fund of good will in the world, and it is up to us to show a greater sense of leadership in these matters. It would be a step in the right direction to put some British nuclear weapons into the negotiations. Pious hopes are expressed in the Queen's Speech, but there are precious few signs of positive action.

The Government's record on South Africa leaves a great deal to he desired. The Prime Minister's visit to Nassau left us wondering what has happened to our moral authority in the world and the Commonwealth. South Africa, as ever, is a police state. In what other country could 15 per cent. of the population, who are white, dominate the other 85 per cent., who are black, because of the colour of their skin? Do we have to remind the Government that apartheid is an offence against mankind and strikes at family life because the migrant labour system denies freedom of movement through the pass laws, and strikes at individual liberty by disfranchisement on the basis of race? That is an indefensible system which is maintained only through fear, brutality and imprisonment.

It is 25 years since Sharpeville, but since then events in Soweto and the Cape and the recent massacre at Uitenhage bear testimony to a violently repressive regime. Try as Botha may, he is tinkering with an impossible task. Yet at Nassau Britain could not be persuaded to implement economic sanctions when real pressure for change would have brought results. We chickened out when the chips were down. We regret that decision, and the Government will come to regret it when the six months' grace given by the Commonwealth is up. We urge the Government to regain our moral leadership in the Commonwealth and to impose sanctions.

In the Queen's Speech we had hoped to see a strong statement of intent regarding South Africa—rather than the watered-down version that it contained—in an effort to bring about trust, freedom, democracy, liberty and justice to all that country's troubled people. We earnestly hope that in future we shall achieve that.

While in one part of the African continent races are divided through ignorance and prejudice, in another people have been starving to death. Famine, poverty and a lack of resources have contributed to the disaster in Ethiopia, Sudan and other countries affected by the recent droughts. The superb lobby of Parliament in October by members of the World Development Association campaigning against poverty and famine in the Third world have focused our attention on these acute problems. Voluntary bodies, Bob Geldof and Live Aid have galvanised the nation and shamed us into action.

Let us not forget that in an average year up to 1 million people in Ethiopia die from starvation—that is in an average year, not a year of famine. UNICEF estimates that, in 1978 alone, more than 12 million children under the age of 5 died in the Third world. Recent estimates put the figure at 15 million. The World bank estimates that 800 millon people are in a state of absolute starvation and despair.

What is the response of the British public when such enormous tragedies are translated to our television screens? We have only to remember the eyes of those appealing children looking through the camera lens while we sat in our comfortable homes. The great British public has responded generously to the sight of the root of Africa's starvation, but the Government have let our aid contribution fall to 0.33 per cent. of gross national product —far short of the United Nations target of 0.7 per cent.

In the meantime, in Europe, grain piles up in intervention stores. I am an agriculturist and see no rhyme or reason in our not sending grain immediately to where it is needed. If there is no transport, we must help provide it, and if there is no fuel, as was in the case in Sudan recently, we must provide that too.

In the longer term, we must provide the type of aid which will help to develop local agriculture in the poor countries of Africa, Asia and South America. Seed, fertiliser and simple tools can provide the basis for a better future. We should help them to help themselves. India has made enormous strides forward in the past 20 years and solved many of its food production problems, but the same cannot be said for Bangladesh.

By the end of the century, it could be possible for Africa to feed itself. Perhaps the most telling statistic that I have seen recently is that it costs $400 to transport 1 tonne of wheat to Africa, whereas for $200 a Third world farmer can be enabled to grow one tonne of wheat a year for the next 20 years himself. It is the quality, not just the quantity, of aid that counts.

I urge the Government to grasp the nettle and to commit themselves to what was not stated in the Queen's Speech —to meet Britain's United Nations target of 0.7 per cent. of gross national product in aid to the Third world, and match the mood of this great nation.

12.2 pm

Mr. Peter Temple-Morris (Leominster)

It is a pleasure to speak after the hon. Member for Brecon and Radnor (Mr. Livsey). I do not know whether he has assumed his party's foreign affairs portfolio or whether he is merely acting on behalf of the hon. Member for Berwick-upon-Tweed (Mr. Beith). Nevertheless, he has made a worthy translation from agriculture to foreign affairs.

A debate on foreign affairs provides a galaxy of choices but, like many others, I shall speak about East-West relations, as that is the major subject of the moment. I have no hesitation in wishing President Reagan well. I am pleased that he goes into these most important meetings with the West united behind him. I am addressing the House as a Back Bencher and I have wanted to say what I have to say about the Soviet Union and the United States for some time. It is our duty in foreign affairs debates to be as bipartisan and frank as possible.

I am not afraid to admit that, from the beginning, I have had profound misgivings about the strategic defence initiative. I would not pronounce such misgivings from the Front Bench but they must be expressed from the Back Benches on both sides of the House. I know that I am not alone in that respect. Moreover, such feelings are in no way anti-American. There is room for disagreement, as my right hon. Friend the Member for Daventry (Mr. Prentice) said. Although we support everything that the United States does in these talks, there is room for honest disagreement. Any point on which I might address the House has already been heard from various parties and interests, in the USA, including the Republican party and the Administration in Washington. If they can be frank in their exchanges, there is no earthly reason why we should not.

This is a unique opportunity to lay the foundations to limit the arms race. If the West or the Soviet Union fails in these negotiations, the effects will be profound. I for one will not be satisfied with a communiqué from Geneva about allowing more Aeroflot flights into New York. I understand that a few matters have already been quietly and privately agreed, but that is not sufficient. The nature of these talks makes it imperative that we achieve something. The West, and indeed the whole world, will be much poorer if we do not, so we are faced with a considerable responsibility. I am sure that the President of the United States has the best wishes of all hon. Members. With his massive mandate, he represents a strong second-term Administration. As a strong President with a mind of his own, he can make a major contribution to history and peace.

On the American side, the arms deficiencies of the post-Vietnam syndrome, Carter and the rest, have largely been made up. I know that some Americans disagree. However, we all agree that we have abundant means available to blow us all to smithereens, whatever the finesse and details of the negotiations. The right hon. Member for Leeds, East (Mr. Healey) cited certain facts and figures in that regard.

I am not saying that we should not negotiate hard. Of course we should do so, and we should be realistic and practical. We are all aware of what the Soviet Union can and will get up to given half the chance. But surely, if the will is there, we can begin the process of agreement, bearing in mind that a balance more or less exists.

On the Soviet side, there is considerable scope for opportunity in these talks. We must take advantage of the present Soviet mood. There is a new Soviet leader and new men and policies emerging. In assessing the Russian stance, we are entitled to look at what Gorbachev stands for. As some hon. Members know, I have probably spent more time with Mr. Gorbachev than any other Government Member or Back-Bencher because I had the honour to be his official host as chairman of the British branch of the Inter-Parliamentary Union. I am therefore entitled to make judgments. That is the only reason for mentioning that fact. Whenever one is nice to a person, one risks the animosity or sarcasm of cold war cynics who say. "Temple-Morris has been wooed by Gorbachev." I think that one is entitled to give one's views without hearing such accusations.

Mr. Gorbachev is entitled to make peace offers without being accused of making propaganda, as the right hon. Member for Leeds, East pointed out. Mr. Gorbachev had a deep concern for the Soviet economy. He would admit that, under the present system, the Soviet economy is not working, but he desperately wants to improve it. The concentration on internal affairs by his Administration since he came to power is evidence of that. He cannot afford to do what he has to do if he has to play star wars as well.

I agree with what the Foreign Secretary said about the anti-satellite system and the only anti-ballistic system in the world which are deployed around Moscow. The Russians are doing much work on such programmes, but we must remember that one reason for the intensity of Soviet feeling about star wars is that the Russians cannot afford it, yet are afraid of losing it. Star wars involves technology and systems far in advance of anything deployed around Moscow.

However, the Russians will play star wars if they have to. They are a super-power. I believe that they know—perhaps subliminally—that they are No. 2, but they feel that they have to keep up. There is almost desperation in their hope that they will not have to do so. The domestic repercussions of keeping up with star wars could be dangerous. Against that hard political background, I believe that Mr. Gorbachev and his Administration are, to use the Prime Minister's phrase, sincere in their wish to do business. This is a good opportunity. If we lose it, things will never be quite the same again.

The main theme of the talks must be disarmament. The Western world and the Soviet bloc expect that. If we fail, the strains on the Western alliance will be considerable. There is NATO unity as the talks commence, but many will agree with me that, if the negotiations are not seen to succeed, the preservation of that unity will be difficult in the medium and longer term.

The President's speech to the United Nations was unhelpful in promoting the success of the talks. I do not minimise the importance of regional conflicts or the supreme importance of human rights in the Soviet Union. However, those important matters must be secondary in the negotiations. They could best be discussed after progress has been made on the main question, rather than cause resentment in the Soviet Union by being promoted over what the Russians and most sensible people see as the main theme of the talks. I also fail to understand how anyone can expect the Soviet Union to discuss Afghanistan at the request of the American President without also discussing, for example, the middle east.

My grave fear is that the hard liners in the United States Administration are winning. There is nothing wrong with star wars or anything else being used to secure the best bargain in arms limitation talks, but I suspect that not far below the surface, certainly among some hard liners in America, there is a feeling that the Soviet Union should be pressed to compete with star wars, because it would not be able to put its internal affairs in order and its economy would be hit so hard that it would eventually break. The concept of pushing the Soviet Union into a corner, which I have heard expressed in a number of quarters, is more frightening than virtually any other.

I have been critical, and perhaps I may use that fact as credit for the sincerity of what I am about to say. I greatly welcome the achievements of the Foreign Secretary and the Foreign Office in making East-West relations a priority since the 1983 general election. I have no doubt that the various visits undertaken by my right hon. and learned Friend throughout the Eastern bloc, the Prime Minister's visit to Hungary and what has been said privately to the Americans, have had no small part to play in bringing the United States to the negotiating table. It is no secret that the Americans were not overwhelmingly eager to take their place at that table until relatively recently and particularly until the last presidential elections. Our role within the Western alliance is limited. The alliance is dominated by one partner. In anything that we say publicly or privately we have to take that into account. We depend upon the Americans for our western security and we are grateful to them. On the other hand, that is a slight handicap in discussing the detail of American policy and in having honest disagreements about the way it is going in relation to the middle east, central America or anywhere else. It is our duty on occasion to speak out.

Let us consider star wars and the consequences of its failure. My view is that star wars represents a dangerous escalation of the arms race. Star wars will not end the nuclear threat. It is naive to think that it will. It makes it more, not less, likely that someone will—frightful though it is—be tempted to have a go.

The Soviet Union will not keep out of the space race on the unlikely premise that a future United States president will be magnanimous enough to hand over the benefits of the enormous western effort to achieve the most sophisticated technology in the most difficult area of the universe.

The United States and the West must find a compromise. The consequences of failure are simple, serious and terrible. I do not overstate the position. The race for the military use of space will be on in a big way and in a fashion which none of us have the knowledge to contemplate. The cost will be enormous. The resulting deprivation for the people of the world will be equally enormous. Relations between East and West will be soured, not just for now, but for the foreseeable future.

An arms limitation agreement will become much more difficult because of those bad relations and because the Soviet Union will rely upon sheer numbers of missiles in case their eventual space system is inferior to that developed by the West.

Ironically, the more successful star wars is, the more money will have to be spent on conventional weapons. If the President's wishes come true, unfortunately conventional weapons will become that much more important.

Last but not least, star wars, far from offering a halcyon way to perpetual peace, makes nuclear and conventional war more, rather than less, likely.

12.17 pm

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

I shall begin my tour d'horizon at Lloyds avenue in the City and move quickly out to Nigeria, Zambia, Uganda, Pakistan and South Africa in relation to matters which are studiously avoided in the Queen's Speech.

Who can comprehend it? Johnson Matthey Bankers goes bust and a year later Mr. David Walker, an executive director of the Bank of England, describes the conduct of Mr. Rodney Galpin, an executive director of the Bank of England, as "daft and inexplicable." The Governor of the Bank of England is in a panic. The Chancellor of the Exchequer is perverting the course of justice. The Director of Public Prosecutions is in a muddle. The Export Credits Guarantee Department cannot explain how it was ripped off. The Foreign Secretary still has to deal with the Nigerian connection. The head of the fraud squad says to someone making a witness statement that if it is necessary he will arrest Margaret Thatcher herself. It is a bizarre story.

When Johnson Matthey went bust, about £120 million of its bad debts related to trade with Nigeria, and much of that was concerned with fraudulent transactions. Johnson Matthey was not the only one involved. There were others, such as BICC.

The ECGD was the victim of many frauds. Johnson Matthey provided pre-export finance for what has been described as "vanishing export contracts". That means that no goods were supplied, or that only a fraction of the goods that were supposed to be supplied were in fact provided. Often, Johnson Matthey Bankers got its money back, but it deliberately did not assign the export credits guarantees to itself. It left the benefit to go to the customers, so that they gained from the fraud.

In Nigeria there were also letters of credit frauds that involved ripping off the Nigerian Treasury. There is a good deal of evidence to suggest that Mr. Dikhu, who lived in Bayswater, was connected with those frauds. A group of Sindi families who were customers of Johnson Matthey Bankers were certainly connected with those frauds—Melani, Daswani, Bhotwani, Hemnani, Hadnani and Kishen cher Ani. It seems that a Mr. Golecha introduced those Sindi families to two directors of Johnson Matthey Bankers, Mr. Ian Fraser and Mr. Firth. It is also clear that a Mr. Macgregor and a Mr. Geoffrey Down, from the letters of credit department, knew what was going on at JMB.

The problems for JMB became serious when early in 1984 the coup took place in Nigeria. Then, the letters of credit were no longer honoured. When Mr. Fraser went to the customers and asked for his money back, they bluntly told him to "sod off', because he knew about the frauds that were taking place at the time. I believe that the Foreign Secretary has been having some difficulty in sorting out affairs with Nigeria in relation to the matter.

Let me be more specific. I refer to the Pahoomal brothers' fraud in relation to JMB. In November 1982, 29 forged Société Générale Surveillance certificates turned up at JMB. Detective chief inspector Cooling was investigating the matter. He thought there was a tip-off to one of the Pahoomal brothers. One of them disappeared to Singapore and one to Spain. I can now tell detective chief inspector Cooling what happened. Mr. Ian Fraser telephoned one of the Pahoomal brothers, and they disappeared. Mr. Fraser says that he solved that crime. He cannot remember whether he or the Société Générale Surveillance first informed the police but he does remember that during the following week he was on the telephone to the Pahoomal brothers. In June 1983 a report was submitted by the police to the Director of Public Prosecutions, and it is to the eternal shame of that director and the Attorney-General that they did not seek to take extradition proceedings or seek to bring the Pahoomal brothers to justice. They have been forced to reopen the case since it was brought to light more recently. Most of the money from the Pahoomal brothers was eventually returned to JMB.

Hon. Members will realise that two desperately important consequences flow from knowledge of that fraud. Had the Director of Public Prosecutions and the Attorney-General been competent and done their duty, it is likely that there would never have been a JMB collapse because the perpetrators of the crime would have been brought to this country, there would have been a criminal trial and they would have been brought to justice. It is inconceivable that the directors of JMB could have carried on behaving as shamefully as they did.

The second consequence is that, when JMB went bust and was taken over by the Bank of England on 1 October 1984, the DPP and the Attorney-General knew there had been fraud. The directors of JMB and the Bank of England knew there had been fraud. Notwithstanding that, it was not until nine months later that the Governor of the Bank of England invited the fraud squad to investigate. That is such scandalous conduct that it warrants the resignation of the Governor of the Bank of England. One of the people heavily involved in the crime, the man who had built up the loan book, Mr. Ian Fraser, was running around the bank for months trying to plug the gaps of his own and other people's crimes. That lies at the door of the Governor of the Bank of England.

I refer to the case of Mr. Arjandash Hirinand Melwani. Late in 1983 he came into unauthorised possession of about $10 million of JMB's money. His intention was to do a quick deal and then return it to the bank. Unfortunately, Mr. Melwani was arrested in Nigeria. My Nigerian ,sources have confirmed his arrest. However, it was mark-up day. That means that the money had to go back immediately, and Mr. Ian Fraser was said to be on the verge of committing suicide. As Mr. Melwani was in prison and could not pay back the money, Mr. Fraser had desperately to invent a profit. I believe that that is one of the reasons why the book-keeping started to go wrong at JMB. From that moment it was impossible to keep the books straight. It is clear that all the Sindi families know that. So did Mahmoud Sipra, because he has talked about it to people who have talked to me about it. Anyone who knew that Mr. Ian Fraser had been involved in that case did not have to blackmail Mr. Fraser but just had to go along and say that they knew about the case, and they would get a loan from JMB.

I have been struck by the fact that Mr. Ian Fraser has said on television that he has committed no dishonesty, he is an honourable man, and the only reason why he will not tell the public about the matter is that he has sworn the bankers' oath. I do not know what Mr. Fraser's bankers' oath was like, but I determined to find out for myself whether he was an honest man.

I had someone go and put a proposal to him, and take the recording that I now have with me, on a tape that I bought in Tottenham Court road. It records what Mr. Ian Fraser is doing today. Of course, I have a transcript and the police have a copy of the recording. Mr. Fraser admits that he is regularly engaged in black market currency deals in Nigeria. Those deals are calculated, first, to give him an easy profit and, secondly, to undermine Nigeria's economy.

The proposal put in the tape is that there should be a black market deal when a Nigerian has 10 million naira and wants to get sterling in this country but cannot because of exchange controls. There is a British business man in this country who wants to invest in Nigeria, and who is prepared to pay two and a half times the official rate. Mr. Fraser says that the problem is that the situation in Nigeria is now so difficult that one cannot walk around Lagos with millions of naira stuffed in one's back pocket. One certainly cannot walk around with suitcases full of it. He reckons that one can get only just over half a million naira into one's back pocket, and the deal can be done not in one but in 10 days. That is the sort of activity that bankers in Britain are engaged in today.

Mr. Ian Fraser says that Mr. Rodney Galpin, a director of the Bank of England, told him, "You keep your head down for three years and you will be back in banking." Is that really what Rodney Galpin thinks on behalf of the Bank of England — "Keep your head down", and, presumably, "Keep your mouth shut and you will be back in banking"?

When Mr. Ian Fraser left JMB, he got a job with a firm called Deechan Finance in Regent street. The principal shareholder is a Mr. Daswani, who is a customer at JMB. On 23 October this year Mr. Sipra's accountant telephoned Mr. Fraser, and got Mr. Daswani. They were talking about bribery, banking and Mr. Fraser. Mr. Daswani said:

A couple of call girls at night clubs, a few Xmas presents, birthday presents—don't make bribery. Everyone in banking does it. The fraud squad has discovered that Mr. Ian Fraser had a couple of mistresses who needed expensive entertainment. Mahmoud Sipra told us that Mr. Abdul Shamgi provided the flat for Mr. Fraser in Mayfair.

Who is Mr. Abdul Shamgi? First, to be strictly fair, we know that he is an acquaintance of the Prime Minister, he is a friend of the chairman of the Conservative party and he is an erstwhile friend of the Minister of State for Defence Procurement. He knew him when Abdul Shamgi was being investigated by the Anti-Slavery Society here a couple of years ago. He is held up by the Conservative party as the kind of immigrant who can come to Britain, make millions of pounds and show how the free enterprise system works. Some of his senior colleagues have come to see me in the House and told me that he used to say, "Margaret will make me a knight." Given his propensity and his ability to borrow, I should think that the chairman of the Conservative party will make him treasurer of the party.

I have here a schedule of Mr. Shamgi's borrowings at the time of the Price Waterhouse report. Mr. Abdul Shamgi owned Gomba Holdings. It owed Johnson Matthey Bankers £19 million. It owed the Punjab National Bank £4.25 million and it owed Credit Suisse £3 million. Mr. Abdul Shamgi was the principal in LLAC— the Wembley group. It owed Standard Chartered Bank £18.5 million. Mr. Abdul Shamgi was the principal in the Belgrave empire, which owed Barclays Bank £16.5 million.

It is not merely that Mr. Shamgi is a dishonest business man; he is also a crook. Mr. Shamgi bought the Gomba Stonefield empire in Cunmock in Scotland and he set up a shell of a factory producing heavy vehicles. He received many grants from the Scottish Development Agency. Then, when he had got those grants, he moved the whole operation, lock stock and barrel, to Rochester. The Scottish Development Agency has issued a writ against him. That is why I am not going to talk about it any more.

I now turn to the Kampala city council, where the last of Mr. Shamgi's frauds was committed and completed only a few months ago.

Mr. Tam Dalyell (Linlithgow)

May I tell my hon. Friend that there is great ill feeling among many people in Scotland about what happened over there?

Mr. Sedgemore

I am sure that there is, and there will be even greater ill feeling when they know the full story.

Mr. Shamgi entered into a trading contract with Kampala city council. A bill was discounted by Johnson Matthey Bankers for about $3 million. The money has actually come through. It belongs to Johnson Matthey Bankers. The last $1 million came through only a few months ago.

When Mr. Abdul Shamgi's partner said, "This belongs to the bank," Mr. Shamgi said, "They will never see this money. They don't know I have got it." Mr Abdul Shamgi's partner has been to the fraud squad to make a statement. What I cannot understand is why this luminary in the Conservative firmament is not in a remand prison, awaiting committal for trial at the Central Criminal court for fraud. I have always understand that Victorian values were about respect, the family life and the fear of God. According to Mr. Abdul Shamgi, they are about bribery, corruption, fraud, and tarts for bankers.

What I cannot understand about the international swindle in which Johnson Matthey Bankers was engaged is why, after the Bank of England went in, it resolutely and determinedly sought to put international financial criminals back into business—the Immans, Mr. Shamgi and Mr. Sipra.

Mr. Sipra had about 18 companies in America. We have been talking to the New York lawyers of Dow Chemicals who did Mr. Sipra for fraud. They say that each of those companies, in the late 1970s, perpetrated one fraud and then took no further action. When Dow Chemicals decided that it would get him at all costs—and it took the company four years to do it—he immediately came to London in 1980, looking for a bank to give him money. There it was—Johnson Matthey.

The number of frauds that Mr. Sipra has committed is infinite. It is not that he does it occasionally. He does nothing else but commit fraud. In August I wrote to the Chancellor of the Exchequer about the Exinco fraud, in which Mr. Sipra got $3 million on a fraudulent bill of lading.

I have in my possession about 50 pages from Mr. Stephen Weeks relating to the wrecking of the film "Bengali Lancers" by Mr. Sipra. He states that Mr. Sipra tried to persuade him to file a fraudulent insurance claim for £1.25 million. I also have a set of documents relating to Peter Duffell, the writer who has been ripped off by Mr. Sipra. Mr. Sipra's painter turned up yesterday demanding £4,000, but Mr. Sipra has done a bunk and is now in Karachi. Even as I speak, a north American company is seeking to serve yet another writ on Mr. Sipra for another shipping fraud. That is the man who owed Johnson Matthey $70 million, yet it tried to restore his position as a trader. What kind of country do we live in where that sort of action is tolerated?

Mr. Sipra, who owes the Bank of England $70 million, took out a legal action in the Supreme Court of New York. I have his legal document—all 32 pages of it. Mr. Sipra thought up a paranoid conspiracy by Harry Oppenheimer, Chartered Consolidated, Johnson Matthey Bankers and the Bank of England to put him out of business. He is claiming $300 million damages from the Bank of England.

The Bank of England was desperate to stop the action because it reached an agreement with Mr. Sipra in June, "You stop your action in New York" —and I have documentary evidence of this—"and we will not take out a contempt action in the English High court and we will drop our Mareva action against you." The whole position is bizarre because the agreement was reached in June, yet the New York court action lapsed on 24 May —such is the brilliance of counsel and solicitors who advise the Bank of England.

There was another aspect to settling the deal. The Bank of England offered the equity of 1 Chester terrace to Mr. Sipra for £65,000, although there was between £100,000 and £300,000 equity in the property. The Bank of England denies that it had anything to do with the deal. However, Mr. Sipra regards it as a good faith action by the Bank of England. I do not know why he should expect good faith when it is he who owes the money. The Bank of England wanted Mr. Sipra to do a wider deal.

Mr. Sipra's solicitor says on a tape recording: Well I tell you that transaction was a good faith move … in consideration of Sipra's allowing the proceedings in New York to be discontinued. They have signed in good faith allowing him to have the house for £65,000. That is how it came up … There were two pages of that agreement, the June agreement. The main point was Sipra's stopping the action in New York and there was the financial terms of course, one of which was about the house. Now Mr. Sipra, but not by design, had allowed the proceedings to be discontinued. He then telephoned the bank in a panic and as a sign of good faith on their part, bearing in mind the other provisions of the agreement, they allowed the house to come out of the general pot. The general pot belongs to the taxpayer, not the Bank of England. What is it doing giving that crook a gift out of money belonging to the general taxpayer?

Although the Bank of England admits that it entered into negotiations with Mr. Sipra to get him to validate a doubtful authority that it had to take money in March, it denies that there were any other negotiations with Mr. Sipra. However, on 28 September 1984 the Bank of England moved in and took $27.3 million from Mr. Sipra's companies and put the money into his loan account. The problem is that the bank claims it had oral authority resulting from a conversation between Mr. Sipra and Mr. Fraser, but Mr. Sipra did not have the full power of attorney to grant that authority. Ever since then the Bank of England has been trying to validate its doubtful authority. It tried it in March and was advised by its lawyers not to go ahead with the scheme. It denied that it tried it in July. I merely point out that there are some surrounding documents.

Secondly, Mr. Sipra's accountant, Mr. Ahmed Hussain, was with Mr. Sipra on 25 July. He saw a four-page letter which was concerned with the arrangement and a covering letter from Mr. David Curtis of Hambros bank, which asked, in effect, "Could you pre-date this letter to June or July 1984?" If that is true, the Bank of England has been conspiring to utter forged documents and to commit fraud against the other creditors.

The House should know that Mr. Sipra's solicitor, in a tape recording, has verified what the Bank of England denies had happened. The transcript of the recorded questions and answers with Mr. Sipra's solicitor, Michael Grant, reads: He can't seem to make up his mind when talking to me or others, whether or not the proposals for the deal with JMB came from JMB or from himself. They came from the Bank. I believe that they are behaving rather improperly. Who, the bank? Yes. I think you are right. Mr. Sipra told me there is a whole series of correspondence between him and the Bank going back and forth over this deal. As you understand it, is that basically true'? The deal that is there referred to is Mr. Sipra saying to the bank, "I will sign your documents and give you your valid authority if you give me some cash and some ships and return my film studios to me at a cheap price. I want you to give me back cheaply my Tiger Horse film company." The solicitor says: Yes. There is a wealth of correspondence on it. There is a great deal of exchange correspondence on it. Is your understanding of it that the Bank's position is sufficiently explicit in their letters to him? There is one letter I can think of which is explicit. So his position is therefore, protected to an extent that as long as he has that letter or they know he has that letter" — and this is the critical answer— There is one letter over four pages which came off of their solicitor's word processor, clearly marked as such which sets out a deal along the lines you have mentioned. In other words, the solicitor is corroborating the accountant. I would not put Mr. Sipra in the witness box as the chief witness for the prosecution, but he has provided corroboration on a number of occasions in different ways. I am not quite sure how the Bank of England intends to get out of that.

Mr. David Curtis realised that I was on to him in September. He called a meeting at Hambros bank, which was attended by himself, Mr. Thomason, one other person from either JMB or the Bank of England, Mr. Sipra and Mr. Adrian Huggins, who was Mr. Sipra's solicitor. My information about the meeting comes from a secretary, Ann Duffy. Secretaries are very useful. She was present for only part of the meeting but she says that they were discussing how they could stop Mr. Sipra's accountant getting this information around. Mr. Adrian Huggins said that he did not want to play any part in that. That can be interpreted in many ways and I shall not attempt to interpret what was going on at the meeting. However, he was asked a question and asked also to nod if he agreed with the answer. He nodded. Ann Duffy was asked to type out the fact that he had answered the question and had nodded. The document was put into a filing cabinet and she was asked to destroy the copies.

What kind of—

Mr. Jim Spicer (Dorset, West)

On a point of order, Mr. Deputy Speaker. I realise that you can have little control over the subjects that are raised in a debate of this nature, but it seems that we are having a full speech from the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) for the prosecution, as it were, which could continue for the next hour. At what time will the Front Bench replies commence? Is there any likelihood that anyone else will be able to contribute to the debate if the hon. Gentleman continues to address the House in such a way?

Mr. Deputy Speaker (Paul Dean)

As the hon. Member for Dorset, West (Mr. Spicer) has said, the debate on the Address is a wide-ranging one. I remind the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) that there are many Members who wish to contribute to the debate.

Mr. Sedgemore

I am grateful to you, Mr. Deputy Speaker, and I take the point. I believe that the entire country wants to know what happened in the JMB case, and I doubt very much whether I will get another opportunity to deal with it. I crave the indulgence of the House on this occasion. I shall try to come quickly to a close.

Mr. Sipra's solicitor talks about the meeting on 26 September. He says that Mr. Sipra said that there was some kind of authority but that he refused to sign anything and that the stories were getting around to other people, which is why some action was needed.

Mr. David Curtis says that no such document existed. The evidence to the contrary comes from an accountant, a solicitor, Mr. Sipra and some back-up documents. The only way we shall ever sort that matter out is by setting up an inquiry into the Johnson Matthey affair. Given the extraordinary circumstances which I have been repeating in relation to other aspects of the Johnson Matthey affair, I should have thought that the case for an inquiry was now irresistible and overwhelming other than to a Government who are desperate to secure a cover up.

I shall refer briefly to Mr. Michael Hepker because I have mentioned him previously in the House. He has accused me of completely misleading the House. He borrowed money through Ravensbury Investments to develop a Tesco site in south Wales. That turned out to be fraud. The Johnson Matthey revenge story equally turned out to be a fraud. Two Welshmen, a Mr. Roy Page from the Welsh Development Agency and a Mr. David Liddiatt, put up some money to develop a Sainsbury's site near Swansea. When they went to the south of France to collect their share of the money from Mr. Hepker, who was putting all this money through a tax avoidance scheme, they were told that the big boys in the Isle of Man would not like it. They did not like what was done in relation to the Tesco deal. They held the two Welshmen responsible. I have seen the files and I do not know how they can be responsible.

The Swansea city council paid out £675,000. Of that, £25,000 went to a firm of solicitors and £600,000 went —I have the telegraphic transfer—into Mr. Hepker's Swiss bank account at the Banque Populaire Suisse in Geneva, which is held in the name of the Anglo European Development Corporation. I have checked other transactions through that bank account and discovered that it is Mr. Hepker's bank account. If anyone wants to obtain the number, it is 10.946772/0. The Inland Revenue has now issued a claim for £300,000 corporation tax which has not been paid. No action has been taken against Mr. Hepker, although I told the fraud squad about the case some time ago.

When I last mentioned the matter in the House I referred to the supasave-money save David Lee liquidation. There, the liquidator, acting on behalf of Imperial Tobacco which has lost £500,000, has carried out a £200,000 investigation into a "money-go-round" fraud by Mr. Michael Hepker. The liquidator submitted the papers to the Director of Public Prosecutions. The solicitor for the DPP has said that there is a prima facie case of fraud, but there has been no charge because the DPP said that he would rather the Inland Revenue dealt with the matter. It is fair to say that £1.5 million is owed to the Revenue. The Revenue has not dealt with it. I do not understand. There is one case after another where there appears to be paralysis on the part of the DPP and the Inland Revenue. What on earth is going on with our society? If I go to the east end of London and pinch 80p out of a till, three car loads of policemen come down. Steal 280 million pence, as Mr. Hepker has done, and he sits up in Leeds running a public company.

Mr. David Walker says that the kinds of thing that I have been saying are damnable. I believe that it is damnable that the Governor of the Bank of England, Mr. David Walker, Mr. Rodney Galpin, Mr. Patrick Smith, Mr. Patrick Brennan, Mr. Martin Harper, Mr. George Copus, Mr. David Curtis, and Mr. Thomason should be treating with international financial criminals in the way that they have. The sooner we clear up this kind of cesspit, which is not helping the Bank of England, the City of London, the English legal system or the parliamentary system, the better. I shall gladly give evidence to that inquiry.

12.50 pm

Mr. Dennis Walters (Westbury)

The House will be relieved to know that I have not been carrying out any criminal investigations. Therefore, I shall not follow up what was said by the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) but will revert to the main theme of the debate—foreign affairs.

Before turning to the middle east, I wish to associate myself with the remarks of some of my hon. Friends about the quiet skill of my right hon. and learned Friend the Foreign Secretary. I also very much agree with the remarks of the right hon. Member for Daventry (Mr. Prentice), who said that aid is a moral imperative.

Seldom has the outlook for a peaceful settlement in the middle east been so bleak. The hon. Member for Bow and Poplar (Mr. Mikardo) said that if there were a resolution of the Arab-Israeli problem it would not remove many of the other disputes in the area. That may well be true. However, resolving the conflict would go a long way towards removing the main threat to peace. Therefore, we should give priority to bringing this about.

Recent events are partly to blame for the lack of progress. However, it is lamentable that so little has been achieved in the year since President Reagan's re-election. The fault lies primarily in Washington. After his landslide victory, President Reagan was in a strong position to act swiftly and decisively. There was a Reagan initiative on the table. Although it was shelved because of opposition in the area, it could have been revived without much difficulty to form the basis of a new, major United States-led peace offensive. Admittedly, for it to have a reasonable chance of success it should have envisaged an international forum and recognised the need for participation by the Soviet Union which—in my view mistakenly—the American Administration have been over-anxious to avoid. Instead, even before the recent disasters, not much progress had been made.

After a great deal of delay Mr. Richard Murphy, and then Mr. Shulz went round the area on exploratory visits which led nowhere. The American response to the brave and imaginative initiative launched by King Hussein after his significant agreement with Mr. Arafat was surprisingly negative and frosty. When Mr. Murphy made a subsequent visit to the middle east he dashed any hopes that had been raised that he would meet a Jordanian-Palestinian delegation by imposing conditions that were so demanding that King Hussein could not possibly fulfil them. The United States Administration was in fact upholding the Kissinger doctrine in a different way by allowing Israel to dictate the terms for negotiation with Palestinian representatives. No Palestinian leader, however conciliatory, could accept them and retain his credibility.

More recently, there followed a series of calamities. Several incidents and killings confirm that, among the splinter groups of the Palestine Liberation Organisation, there are men of violence who, although repudiated by the leadership, are willing to defy both their leaders and international law. The Israeli raid on Tunis, in so-called response to one such act, was an unacceptable form of national terrorism. Although not so costly in human suffering as the unprovoked invasion of Lebanon when nearly 20,000 lives were lost, the Tunis attack was a gross infringement of the sovereignty of a moderate and friendly state. Incidentally, more than 100 people were killed, the majority of whom were Tunisian civilians. President Reagan's defence of that aggression was indefensible and the British Government rightly joined every other member of the Security Council in condemning it.

The hijacking of the Achille Lauro was a botched-up act of violence which included the senseless and cruel killing of an elderly American citizen. Although the PLO leadership had condemned the outrage and agreed with President Mubarak to bring those responsible to trial, President Reagan decided to pre-empt any such trial by instructing the American air force to intercept the Egyptian transport plane carrying the gunmen and force it to land in Sicily. At that point, American soldiers clashed with Italian police on Italian soil about who should arrest the passengers. Understandably, Mr. Craxi was outraged and shocked by such behaviour.

Mr. Mikardo

Will the hon. Gentleman give way?

Mr. Walters

The hon. Gentleman made a long speech in the debate. I shall not give way, because I know that several other hon. Members wish to speak.

The effect of that episode was to weaken Presiclent Mubarak and King Hussein—the two principal moderate leaders in the Arab world —and to bring down the Italian Government, which has now fortunately been reconstituted under the same leadership. It is certainly time that sensible, cool diplomacy and statesmanship replaced the feverish, high-handed and counter-productive activity that too often emanates from Washington.

The collapse of the visit by the Jordanian-Palestinian delegation to London was a sad ending to the courageous decision taken by the British Prime Minister and the Government to arrange a meeting with my right hon. and learned Friend the Foreign Secretary. Had the meeting taken place, it would not have been a decisive event towards peacemaking, but it was an imaginative step in the right direction. The responsibility for the failure must lie in the confusion prevailing in the Palestinian camp and was a foolish error of judgment.

However, the root causes of the problem have not changed. Israel has occupied all of Palestine since 1967. In defiance of United Nations resolutions and international law, it has not only held on to the territories then acquired, but has colonised them with illegal settlements and oppressed the population. That remains the main cause for the continuing instability and tension in the area. Peace in the middle east is in everyone's interests, except that of the extremists, but there can be no lasting peace settlement unless Palestinian rights are recognised and some justice is accorded them.

The best way to make progress is for direct negotiations to take place among the parties involved, but in the forum of an international conference. That is what King Hussein was trying to achieve. Obviously, it was essential for the Palestinians to participate if the talks were to be relevant. The Venice declaration recognised that the PLO should be associated with any negotiations, and the agreement between King Hussein and Mr. Arafat had made that easier.

Although the British Government made a wise attempt to assist and the European Community's response was positive, the United States Administration continued relentlessly to snub King Hussein, with the profoundly regrettable result that his initiative had been effectively killed.

Where do we go from here? Mr. Peres has made an important speech expressing his desire to make progress towards peace. Mr. Peres is not Mr. Begin or Mr. Shamir, and his words should command attention. The question to be probed is whether the difference between him and the Likud leadership is a matter of substance or of style. But it certainly should be probed in order to discover whether he would be willing to discuss the future of the occupied territories with those who are genuine and recognisable representatives of the Palestinian people, and to make realistic territorial concessions in exchange for peace.

At the same time, the PLO executive should seize the opportunity provided by the present stalemate to broaden its base. A Palestinian Government in exile should be formed either in Cairo or in Tunis—preferably in Cairo —to include a number of distinguished Palestinians, whether already associated with the PLO leadership or not, who command widespread respect and international influence. Such a development would greatly strengthen the Palestinian negotiating credibility.

Finally, it should be recognised yet again that the only power which can impose a middle east settlement remains the United States. The tragedy is that Washington has for too long allowed its policy making to be wholly subordinated to the apparent interests of Israel, instead of giving precedence to its own interests, those of its European allies and its Arab moderate friends, and indeed even to the true long-term interests of Israel itself. In those circumstances, it has been easy for the Israelis to prevent the peace-making process of negotiation from going ahead.

We should all remember that world peace could be at issue in the middle east, and that the time is long overdue when the United States should cease to be one of the players on the Israeli side and return to the umpire's box. If that happened, the position in the area could be rapidly and drastically changed. It is a great challenge to British and European statesmanship to bring that about.

1.2 pm

Mr. Tam Dalyell (Linlithgow)

My speech, in common with the remarkable parliamentary tour de force of my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore), is concerned with truth to Parliament, behaviour in high places and what is happening to our society. Both speeches require deep considered answers.

As one who is not a member of the Foreign Affairs Select Committee, I should like to pay tribute to the hard work done in that Committee by parliamentary colleagues of all parties. Too often their work goes unsung, and it is work done on behalf of the House of Commons.

I echo the request made during business question yesterday by my right hon. Friend the Leader of the Opposition for an early debate on the report of the circumstances surrounding the sinking of the Belgrano. My hon. Friends the Members for Bow and Poplar (Mr. Mikardo), for Newham, South (Mr. Spearing), for Falkirk, West (Mr. Canavan) and for Doncaster, North (Mr. Welsh), by their application and sheer hard work, have produced a minority report that deserves an answer.

In particular, the Prime Minister owes the House an explanation of why the first draft of Sir John Nott's speech on 4 May 1982 was withheld from the Select Committee's inquiry. As Mr. Speaker knows, I thought that the proper way to proceed was to place that internal paper of Government almost as soon as it came into my hands into the hands of Mr. Speaker. I did that on Monday 21 October, in Mr. Speaker's capacity as guardian of the House of Commons' right not to be deceived. I have not the slightest uncertainty that this is a genuine document. Equally, the Clerk to the Select Committee gives me a categorical assurance that no such draft came before his Committee or was seen by him. I am informed that it was not in the so-called "crown jewels".

I should like to read a short extract from that document: On 2 May, at 8 pm London time, one of our submarines attacked the Argentine cruiser, Belgrano, which was escorted by two destroyers. This surface attack group was close to the total exclusion zone and closing upon elements of the Task Force. The cruiser itself had substantial fire power provided by six and five inch guns and Seacat anti-aircraft missiles. Together with its escort ships, the threat to the Task Force was such that the Task Force Commander could ignore it only at his peril. It would not have been possible to continue to enforce the total exclusion zone if the Belgrano group had been allowed to continue unmolested. The House will note that the attack involved the cruiser only. The escorts were not attacked and we believe subsequently went to the assistance of the damaged cruiser. Two torpedoes hit the Belgrano and Argentine reports now indicate that she has sunk. That should be compared with what was actually said to the House on 4 May 1982. To cut my speech short, I refer the House to Hansard for 4 May 1982 at column 30 and draw attention to the word "detected".

During business questions yesterday I asked the Leader of the House to put a copy of John Nott's first draft into the Library, as it would be helpful to hon. Members. He replied: I shall look into that matter." —[Official Report, 7 November 1985; Vol. 86, c. 114.] There is a reason why hon. Members should be able to see the first draft of John Nott's speech. His amendments are there, but the amendments of the first draft are to do with parliamentary protocol and not with substance. The crucial substantial change in the statement must have been required by someone else. At the stage of the first draft, it did not occur, apparently, to John Nott to alter "attack" to "detect". It appears that the change from incomplete truth to downright deception was made on the orders of someone else, and that someone else can only have been the Prime Minister.

I refer the House to appendix 14 of the Foreign Affairs Select Committee report —the letter written by the Select Committee to John Nott, to which he replied: Thank you for your letter of 1 April. Some three years have passed since the event in question, and I do not recall why I should have used the word "detected". I am sorry that I cannot be more helpful. Some forgettery! The document is a draft statement for Nott to make on 4 May. It states that the Belgrano was attacked at 8 pm on 2 May. Nott's actual statement was that the Belgrano was detected at 8 pm on 2 May. The change cannot have been accidental. It must have been deliberate. That brings me back to what I have always thought was the key point—the fact that the cover up started, not subsequent to Nott, but with his initial statement.

I believe that the Prime Minister and John Nott knew that the Belgrano was sailing away from the exclusion zone, but that they wanted to sink her and, as we had not declared war formally and were acting in self-defence under article 51, they had to make it appear that the Belgrano was an immediate threat. The word "attack" was accurate, but it might provoke questioning. The word "detect" and the untrue statement about the Belgrano closing in on the task force would allay any fears among our allies, who were being told that we were not the aggressors.

In this connection I stress the significance, which is reinforced by the leaked Nott first draft, of the Prime Minister's admission in her letter to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on 19 September 1984. Paragraph 11 of the annex to that letter appears in Hansard for 29 October 1984 and says:

Conqueror's report on the Belgrano's position was received by Northwood at 3.40 pm and made known to senior naval officers there and at the Ministry of Defence later that afternoon … But she could have altered course again and closed on elements of the Task Force, acting in concert with the carrier to the north. In the light of the continued threat posed by the Argentine naval forces against the Task Force, the precise position and course of the Belgrano at that time was irrelevent. For this reason, the report was not made known to Ministers at the time."—[Official Report, 29 October 1982; Vol. 65, c. 790.]. The Prime Minister said that at 3.40 pm on 2 May Northwood was told of the Belgrano's course—that it had been and was sailing away from the exclusion zone. She said that later that afternoon the Ministry of Defence was told, but Nott, not once, but three times, and not just on 4 May, but on 13 May, said that Conqueror was "closing" on the task force. If his officials did not know the true course of the Belgrano, it is conceivable that the Government line about confusion and the "fog of war", to use Noel Annan's phrase, might be credible.

But they did know. So either the officials misled Nott, or he misled the House of Commons. It was not the officials who misled Ministers. It was Ministers who misled the House of Commons.

The words are specific. I believe that the change from "attack" to "detect", and the words "closing in on" are all part of the same pattern with the same purpose—to suggest that we faced an immediate and unavoidable engagement with the Belgrano and were acting in self-defence in sinking her.

Why did Nott allow the Civil Service draft to be changed to "detect", which he and the Prime Minister knew to be untrue? Why did they go to the trouble of altering texts and thereby presenting a deliberate, known and central untruth to the Commons? What did the Prime Minister, Nott and the right hon. Member for Hertsmere (Mr. Parkinson) know that the Civil Service in the Ministry of Defence did not know? The Prime Minister knew about the Peruvian peace proposals, as did people at Bush house that Sunday morning, from Foreign Office telegrams. Why was the draft of Nott's statement deliberately altered—certainly with the Prime Minister's agreement, or, as I am told, on her initiative at her instigation—two days after she, Nott and the right hon. Member for Hertsmere were told the truth?

In the past, excuses have been made for Nott—that in the "fog of war" he made a genuine mistake on 4 May 1982. Now, from the leaked first draft of the speech in the possession of Mr. Speaker, we know that Nott's crucial "mistake" in giving the Commons and the country the idea that the 44-year-old Belgrano was an immediate threat to the task force was a deliberate deception by the Prime Minister and Sir John Nott. The purpose of the deception was to enable the Prime Minister, having attacked the Belgrano, to scupper peace proposals that would have deprived her of military victory—the central purpose of the Falklands war needed to ensure the Prime Minister's domestic popularity.

Of course, the Prime Minister went to enormous lengths to try to ensure that the draft statement was withheld from the Select Committee on Foreign Affairs during its investigation into the events surrounding the sinking of the Belgrano. I repeat that the Clerk of the Select Committee —my hon. Friend the Member for Bow and Poplar knows that the Committee has an able Clerk, with a retentive memory—assures me that neither he nor Members of Parliament saw any such statement. It was not even in the "crown jewels".

Had it not been for the fortuitous events surrounding the troubles of the right hon. Member for Hertsmere—I have given him notice that I would refer to him—the Prime Minister might have got away with this document never seeing the light of day. The Director of Public Prosecutions has publicly announced that he is considering whether the right hon. Member for Hertsmere improperly communicated a document to an unauthorised person. I believe that the Director of Public Prosecutions would be failing in his duty if he did not ask Mr. Speaker for a copy of the draft speech that resides with him. I understand that Mr. Speaker has to seek the permission of the House to give documents in his possession to the DPP.

Though I make it clear that Miss Sara Keays did not herself give the document to me, I believe that the copy that I have given to Mr. Speaker originated in the papers of the right hon. Member for Hertsmere. Furthermore, the Director of Public Prosecutions should consider the public statement by Sara Keays in The Mirror on Saturday 12 October this year. It is available to hon. Members in full and, to save time, I shall read only part of it: The detective-sergeant in charge of the on-the-spot investigation amazed me by saying—no doubt to reassure me —that 10 Downing Street had been informed and had ordered a news blackout. The matter, he added, had been referred to the Commissioner of the Metropolitan Police. When I asked the reason for the news blackout, he said that there was a suggestion that it was a security matter. I am not concerned with the motives or morality of Miss Sara Keays. Bluntly, I am not interested in bed, but I am interested in burglary.

How come Downing street was informed immediately about what is purported to be an ordinary burglary in Battersea? I suggest to the DPP that this bizarre burglary was an attempt to snatch back some of the papers of the right hon. Member for Hertsmere which incriminated the Prime Minister for her behaviour over the Falklands. I would not be surprised if the Keays burglary was carried out by the same thugs who were surprised by Hilda Murrell, the 78-year-old Shrewsbury rose grower, who was the subject of a brutal and callous murder. If that idea is thought fanciful, why should the Commissioner of Police of the Metropolis be informed of what was happening about an ordinary burglary in south London? For heaven's sake, what was so special about the house of Elisabeth Keays?

I have been an hon. Member for nearly a quarter of a century. It would not have occurred to me to speak in these terms about the Governments of the right hon. Member for Old Bexley and Sidcup (Mr. Heath), Sir Alec Douglas-Home or Harold Macmillan, my first Prime Minister. But we are faced with a cold, calculated, cynical and sustained deception, by the occupant of 10 Downing street, of the House of Commons and one of its senior Select Committees. If we simply shrug our shoulders and say that it happened three long years ago, by our inaction we injure democracy itself. Ministers, however exalted, should not be allowed to get away with deception and I join my hon. Friend the Member for Hackney, South and Shoreditch in asking plaintively, "What is happening to Britain?"

1.18 pm

Mr. Jim Spicer (Dorset, West)

We have had a most unusual debate. Had I not been present today, I would have been at the Duke of York's headquarters for a meeting of the council of the Parachute Regiment.

I am happy to say that if the men of 2 and 3 Para had been sitting in the Public Gallery to hear the speech of the hon. Member for Linlithgow (Mr. Dalyell), they would have been surprised and bewildered to hear that, three years after the event, the Belgrano still figures so large in the views of some hon. Members. [Interruption.] I am not prepared to accept interventions on that point. I would far rather listen to the men of my regiment than those we have heard in the House over the past three years.

My right hon. and learned Friend the Foreign Secretary was right to concentrate on the events that will take place in Geneva. They will affect not only the United States and the USSR, but the whole world. It is vital that we should give our full support to the President of the United States in his negotiations there.

Important though Geneva is, we should never forget that tension, confrontation and ultimately conflict are far more likely to be triggered by events in the middle east than anywhere else. Indeed, the Foreign Secretary said that there was a depressing cycle of violence. That violence is not confined to Israel and its neighbouring states. It spills over, as we have seen in the last few weeks, and could result in an international incident that could cause another war.

The hon. Member for Bow and Poplar (Mr. Mikardo) painted a broad canvas. I agree with much of what he said. If we had more time I would address more than a few words to the hon. Member for Brecon and Radnor (Mr. Livsey), whom I last met in a market place in Brecon. However, I should like to question him in detail about the apparent change in attitude in his party, the members of which only a year ago were talking strongly about the removal of cruise missiles from the United Kingdom but who have now changed course and are lumping SS20s and cruise together. That is a welcome step forward. Can we hope that the Liberal party conference next year will confirm that view now that the Left wing of the party has become leaderless in that respect?

The breakthrough achieved by the Camp David accord between Israel and Egypt is the last positive step towards a wider settlement of the Arab-Israeli conflict, but even that accord is in danger of breaking down. Israeli and Egyptian ambassadors have been withdrawn and the situation is not good. Unless that accord is reactivated with the support of the populations of both countries, I am sad to say that we shall face further trouble.

Rough waters in that area have not deterred King Hussein from launching his initiative aimed at achieving further settlement between Israel, Jordan and the Palestinian people. The world should applaud his brave attempts which have continued since early this year when he signed an agreement with Yasser Arafat.

Most politicians and statesmen play with their careers, but people such as King Hussein and President Mubarak not only play with their careers, their thrones or presidencies, but put their lives on the line as well. We should applaud them.

King Hussein's aims have the full support of President Mubarak and are aimed at achieving agreement for a Palestinian-Jordanian confederation with adequate safeguards for the Israelis in terms of the demilitarisation of the West bank.

Such an agreement can never be reached without the full support of the Palestinian people. From my personal contacts with them I know that, although they might have changed their attitude somewhat over the years, in essence they still support the PLO and Yasser Arafat. Whether we believe that to be right or wrong, that is the position.

However, most Palestinians agree that past PLO policies which have centred on violence and terrorism have led only to more misery and oppression for them. That note of realism is getting through to all the Palestinian people. Certainly, in my recent discussions in Jerusalem with 40 or 50 leaders from the West bank and Jerusalem it was clear that they believe that Yasser Arafat should renounce force and be prepared to accept resolution 242, thus paving the way for peace negotiations through an acceptance of the existence of the state of Israel.

Hon. Members have mentioned the recent outbreaks of violence and terrorism in the middle east, which dealt a savage blow to the Hussein initiative and sadly led to the failure of the London talks with the King and PLO representatives.

No one should be in any doubt that my right hon. Friend the Prime Minister and the Foreign Secretary were right to make an attempt to break the log jam. That the attempt did not succeed should not be seen as the end of the road.

It was only last week that the chairman of the International Democrat Union, Dr. Alois Mack of Austria, wrote to the Prime Minister in the following terms: In spite of recent events and setbacks to the peace process in the Middle East, the IDU remains convinced and the initiative of the King of Jordan and the President of Egypt should not be allowed to stall. We fully support your efforts to open this dialogue further, and we entirely recognise that the fact that they did not take place was entirely due to the failure of the two PLO representatives to give appropriate undertakings in respect of the renunciation of force and the acceptance of relevant UN resolution. Our Washington communiqué made reference to the window of opportunity for peace. That window still exists, but it is narrowing. As IDU chairman, I would like to express my full support for both your past, and I hope future, attempts to provide assistance to all others who are working so courageously towards a final peaceful settlement. Those are the views not only of the Conservative party, which sits in that organisation, but of many other centre and centre right parties throughout the world. There is a "window of opportunity", but that window will not exist for much longer. By the end of 1986 it may be too late. That window may have slammed shut because in July 1986 the Government of Israel will change and Mr. Shamir will become the Prime Minister. Anyone who has met both the present Prime Minister of Israel, Mr. Peres, and Mr. Shamir must realise that at that point the chance of real negotiations between Israel, Jordan and the Palestinians will become very slim indeed. The attitude of Mr. Peres and all that he and his party stand for in the middle east is directed towards a peaceful negotiation and co-existence with the people of Palestine.

Sadly, in my experience of talking to Mr. Shamir, he believes in a "Greater Israel", annexation and an increase of the Israeli population on the West bank. At that stage moderate opinion in the Arab world would recoil from any further negotiations, and who could blame the King Husseins and the Mubaraks of this world if they said, "We have put our heads above the parapet once too often and we are not going to do it again"? That is the view of other moderate leaders in the Arab world. They would say that they will never again take that chance, and a major opportunity will be lost. It is certain that escalating violence will follow close behind.

What of the future then? On the West bank and in Gaza, some 1.5 million Palestinians would continue to exist as second-class citizens alongside just over 3 million Israelis in Israel proper. In 20 years, those two populations may come into balance. What would happen in that Greater Israel? Would Palestinians be given full citizenship rights or would they be second-class citizens, initiating a form of apartheid which no one in this country or the House could recognise? That is the danger, and that is why it is right that the United Kingdom and Europe should use every effort to keep momentum going for negotiations, to support King Hussein and to draw in the reasonable Palestinian opinion which wishes to turn its back on violence but will return to it without any doubt unless there is genuine progress in the next year.

1.29 pm

Mr. Jeremy Corbyn (Islington, North)

I resent the way in which the hon. Member for Dorset, West (Mr. Spicer) was gratuitously offensive to my hon. Friends the Members for Linlithgow (Mr. Dalyell) and for Hackney, South and Shoreditch (Mr. Sedgemore), because the matters that they raised and the issues that they discussed are very important. The principle of the right of the public to know what Ministers and the Government are up to is extremely important. If those matters cannot be exposed here, where can they be exposed? My hon. Friends were right to raise them.

I shall confine my remarks to Latin America, which managed to get a line in the Queen's Speech when the Government claimed to support the Contadora process, and the implications of the debt crisis for the people of Latin America. While British interests there are normally assumed to be relatively modest, the Government's policy towards the Falkland Islands has changed their attitude towards the whole continent and led us into making a secret military treaty with the dictatorship in Chile.

In yesterday's issue of The Guardian there was a brief report—all too often such reports are brief—from Chile, which said:

Six shot in Chile protests … six demonstrators had been wounded by gunshots and more than 250 arrested … Police used teargas, water cannon and riot-control pellets against protesters on university campuses, and in working-class areas and city centres throughout the country. As night fell at the end of the first day, troops patrolled Santiago in greater force, and helicopters beamed powerful searchlights at militant neighbourhoods. Why do the British Government feel virtually paralysed and unable to do anything constructive about the dreadful violations of human rights in Chile? They continually turn a blind eye on the fate of so many people in prison in Chile. The reasons can be found in an excellent article by Duncan Campbell in the New Statesman of 25 January, in which he catalogues the way in which British policy towards Chile has been dictated entirely by considerations of the Government's approach towards the Falklands. He writes that a series of understandings were reached in 1982 between the British and Chilean Governments in which Britain gained: —Use of Punta Arenas, an air base in southern Chile, for RAF spy planes, disguised in Chilean markings. —Use of Punta Arenas other areas to infiltrate SAS special forces into Argentina for espionage and to destroy Argentine aircraft on the ground; —A complete exchange of intelligence, including monitoring and codebreaking of Argentina signals carried out by Chilean Naval intelligence staff. The Chilean Government gained: —RAF Canberra aircraft used in the secret operation … —A squadron of RAF Hawker Hunter aircraft, most of which was delivered to Chile after the war started. Most important was Britain's support in undermining United Nations investigations into Chilean human rights abuses, by opposing the reappointment of the UN's special investigators. Many other things can be said about the Government's relationship with the Chilean dictatorship.

Of all the most murderous dictatorships in Latin America and other parts of the world, the Government of General Pinochet must take the prize for the number of people who have disappeared, the number of beatings and murders in the prisons and the poverty that has been imposed on the people. General Pinochet achieved power in 1973 by using British-built planes to bomb the Moneda palace, murder Salvador Allende, the President, and impose a dictatorship. The Government are happy to recognise and do business with it, and apparently they are happy to provide arms for it. Those arms are being used to murder Chilean people. It is a spin-off of the Falklands war and the Government's approach to it that they are prepared to provide those arms and that support for the Chilean junta. The Government stand condemned and in disgrace as a result.

On Monday next week the Luxembourg summit will take place. It is interesting that the Government announced this week in the Queen's Speech that they support the Contadora initiative to bring peace to central America, yet apparently the Foreign Secretary cannot attend the Luxembourg summit, which is an important part of the Contadora process. Despite the Government's protestations that they support that process, their record since 1979 has not been one of respecting the democracy of the people of Nicaragua. It has been the opposite—slavish support for United States policy in that region. We well know what that policy is. In effect, it has been to encircle, attack, economically undermine and militarily attempt to destroy the Government of Nicaragua. That Government took power in 1979 after the removal of the dictatorship. It faced election and was elected by a much larger vote than the present British Government achieved, and a far larger vote and participation than the President of the United States achieved when he was elected.

The cost of the war being fought against the people of Nicaragua by the United States through surrogate forces is appalling. In July 1985, President Ortega announced that material damage resulting from the Contra war amounted to $1.3 billion. In 1981, the Nicaraguan defence budget was only 7 per cent. of total Government spending. To enable the people to defend themselves, that defence spending has now gone up to 40 per cent.

As a result of the war, 170,000 people have been displaced. Production has been lost. Twenty-five million dollars has been lost on the coffee harvest as a result of Contra activity. There is also the human cost. Twelve thousand people have been killed or wounded by the Contra. That is in a very small country. Many others have been kidnapped, taken away, and may well be missing for ever more. Their fate is totally unknown. What should and could the British Government be doing about that?

It is obvious that every time the Contadora nations in central America have attempted to come to a peaceful arrangement or to form some kind of treaty on the matter, the United States Government have changed their stance and blocked that attempt. The Washington Post of 6 November last year quoted a leaked United States Government statement which said: We have effectively blocked Contadora Group efforts to impose a second draft of revised Contadora Act. Following intensive U.S. consultations with El Salvador, Honduras and Costa Rica, the Central Americans submitted a counterdraft to the Contadora states on October 20 … that shifts concern in Contadora to a document broadly consistent with U.S. interests. I submit that United States interests in central America depend entirely on removing the Government of Nicaragua, not because it is a military threat to the United States or anything else like that but because of the independence of the people of Nicaragua and their determination to overcome their own poverty, their own debt and their own underdevelopment. They are an inspiration to many other people throughout the continent. That is why the United States Government oppose them, and that is why the British Government support United States policy in the region.

The Federation of Conservative Students wing of the Government party is openly supporting the Contra, and sent one of its representatives there, where he went on patrol with the Contra forces which were attempting to destroy the Government. If our Government approve of that form of terrorism, they should say so or denounce the Federation of Conservative Students for what it is doing in Nicaragua.

The CIA's "freedom fighters' manual", as it is called, has recently been published in the United States, after it had been leaked. It headlines what the free Nicaraguan can do in order to down the Marxist tyranny. Some of it is laughable. It calls on people to come in late to work, to leave lights on and to waste water as much as possible. It calls on them to destroy crops on the state-owned farms and to destroy the communications network. In short, it calls for the long-term and permanent destabilisation of that country, in the same way that the CIA destabilised other countries in Latin America, particularly Chile, before the coup in 1973.

We require from the Government a clear statement that they seriously support the Contadora process, and that in supporting it they oppose the American military presence in central America and oppose American military aid being used as a destabilising force.

It would be appropriate if we could have a clear undertaking from the Government about their attitude towards loans to Nicaragua that are put through the Inter-American Development Bank and the International Bank for Reconstruction and Development. It appears that the Government strategy is based not on the creditworthiness of either Nicaragua or El Salvador but solely on American interests in the region. In effect, they are instructing British representatives to support all loans to El Salvador, come what may, and to oppose all loans to Nicaragua, come what may. It is a further example of the way that the Government put political considerations of their own rather curious, paranoid view of the world above the needs of the poorest people of some of the poorest regions in the world.

On the same theme, I hope that the Government are prepared to tell us what proposals they will put to the United Nations High Commissioner for Refugees on the problems of missing people in central America, of refugees being forcibly moved from border regions to other parts and on the safety of those people. It is a matter of great concern that Britain, as one of the European countries supposedly supporting the Contadora process, appears to be at variance with every other European Government in their policy towards central America.

I want to discuss the international debt crisis and its effect on Latin America—which is the largest debtor region in the world—and also the concept of that debt. It might not please Conservative Members, but there is a growing unanimity throughout Latin America to adopt a different strategy to deal with the international debt crisis because of the way in which commodity prices have continually fallen for producer countries while interest charges have continually risen. That has resulted in the debt burden becoming larger and larger. The different strategy could either be that followed by the Government of Peru, which would limit debt repayments to no more than 10 per cent. of export earnings, or a complete moratorium on debt repayments.

Representatives of most Latin American countries attended a recent conference in Cuba. I shall quote from the federal deputy and vice president of the Foreign Relations Commission of the Chamber of Deputies of Brazil, Joäo Herān Netto, who said: Within the plurality of forces present, the Brazilian delegation confirmed that there was a broad consensus on the following points: The Brazilian foreign debt was contracted behind the backs of our people and its total is now, insofar as interest alone is concerned, an unbearable burden due to the immense social cost which threatens even the return to democracy in the country. It is, therefore, a political problem which cannot he reduced to economic dimensions. The IMF conditions imposed on debtor countries are unacceptable because they burden those countries with the whole weight of the international crisis, determining a breakdown in the structures of those economies which are forced to pay exorbitant interest rates. We were transformed into exporters of capital, and we have already paid much more than was loaned to us. That is a common and popular view within Latin America. The total debt is $60 billion and many banks have stopped lending to the region. Each year $25 billion more is leaving Latin America than is entering. The poor of the Latin American countries are propping up western banks, rather than the popular view that it is the other way round. It is time that the debt crisis was looked at from that point of view.

I want to quote Michael Manley, a former Prime Minister of Jamaica, who this month wrote an article in South magazine. He said: The developed countries find it easier politically to sidestep the issue, because they don't want to face their own electorates with a plan that would involve some degree of contribution from everybody. The Third World has long grown used to pulling in its belt, cutting back on its social services, enduring falls in already abysmally low standards of living. We, therefore, are already making the contribution of our sacrifice to the solution of the problem. The United Nations recently published its 1985 world economic survey, which quotes in detail the fall in world trade, and, more significantly, the increasing burden of debt repayment on very poor countries and the reduction in real prices for basic commodity products from Third world countries. Those are the issues that must be faced. If they are not, the poverty of the Third world will become greater and greater, the international banking system will be under greater and greater strain and probably collapse, and the poor of Europe and of Latin America will suffer as a result of that crisis.

I hope that these issues will be faced by the Government and that they will come clean on their policies towards the international debt crisis and Latin America.

1.45 pm

Mr. Andrew MacKay (Berkshire, East)

In the few minutes that remain available to Back Benchers in today's debate, I shall not take up the remarks of the hon. Member for Islington, North (Mr. Corbyn). I hope that he will not mind if I do not pursue his remarks about South America. Instead, I shall address myself to the middle east crisis, especially after visiting both Jordan and Israel recently.

First, I express my full support for every word that was said by my right hon. Friend the Member for Daventry (Mr. Prentice). I concur entirely with his argument that it is a moral imperative that the Government increase their aid budget. Like my right hon. Friend, I hope that the latest rumours that we read in the press about the size of the aid budget for next year will prove to be true when they are published next week.

When I returned from Israel and Jordan, I appreciated that Britain had a major role to play in the middle east crisis. It annoys me immensely when I hear some hon. Members suggesting from both sides of the House that it has nothing to do with us and that we have no influence in that part of the world. I suggest that we have considerable influence.

It is unfortunate that our American allies are tainted with an Israeli bias. They have treated some of their friends in the middle east abysmally recently especially the Jordanians and, to a lesser extent, the Saudis. Therefore, their role in the peace process can be only limited. The Soviet Union has left a nasty taste in the Moslem world, especially in Syria. I do not think that Soviet influence and peacemaking could be anything but biased and, therefore, would not be very productive. The European Community, especially after the Venice declaration, could play a role. I hope that I am not considered unduly critical when I say that the Community is cumbersome when it comes to dealing with foreign affairs. Certain partners, such as the Greeks, take a biased position, and I rather doubt whether the EEC can be the centre of the peacemaking stage.

As I have said, I believe that Britain can have a major influence in the middle east. The courageous initiative taken by my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs failed recently, but that was due to no fault of our own. That does not mean that we should not redouble our efforts to do all that we can in the middle east.

It is extraordinarily difficult to find a peace formula, and we shall have setbacks. There will be plenty of evil parties in that part of the world wishing to see us fail I have in mind the Syrians, the Libyans, the Ayatolla Khomeini and his friends in Iran and certain extremists within the state of Israel. That does not mean that we should not be speaking to our many friends in the middle east, including the moderate Arab states in the Gulf, courageous King Hussein of Jordan and Prime Minister Peres of Israel, who has clearly indicated in the past few weeks that he, his party and his Government wish to see the peace process proceed.

Any peace process must hinge on the West Bank arid on the exchange of land for peace. I am a member of the Conservative Friends of Israel and I believe that friends should tell a few home truths occasionally. The Israeli Government's policy and that of the Administration which preceded them of creating new settlements on the West Bank is wrong, misguided and against Israel's interests and can only do damage. I hope that my right hon. and learned Friend and his colleagues, when speaking to Mr. Peres, will make that clear. When I was in Israel I had the clear impression that many Israelis were embarrassed about the settlements and could see no moral justification for them.

My hon. Friend the Member for Westbury (Mr. Walters), who is well qualified to speak on the middle east, said that the Palestinians were divided. As my hon. Friend the Member for Dorset, West (Mr. Spicer) said, it appeared at one time that the majority of West Bankers supported the PLO and Mr. Arafat. I am not sure after the past few weeks whether that is still necessarily true. I was taken with my hon. Friend's idea of setting up a Palestinian Government in exile in Cairo or Tunis made up of representatives of the PLO and other Palestinians who were men of good will with international reputations. We cannot have a peace settlement without the Palestinians recognising a state of Israel and renouncing violence. That must be a prerequisite. It was right for my right hon. and learned Friend the Foreign Secretary, to insist that that was a prerequisite before the PLO delegation came here. It is only a pity that possibly through lack of communication or some more evil motives the PLO representatives could not sign that declaration.

I urge my Government to continue to do all that they can to ensure that there is a peace settlement in the middle east and to recognise, notwithstanding the recent setbacks, that we have a major role to play. If we do not succeed, the middle east may be the area where the third world war starts. It is an area which could cause immense economic damage to the world in the future. I feel strongly, as does my hon. Friend the Member for Dorset, West, that time is running out for our friends and the moderate people in the middle east, especially for King Hussein, President Mubarak and Prime Minister Peres. For their sake and the sake of world peace, I hope that the Government will do all that is in their power to try to find a peace settlement.

1.50 pm

Mr. George Robertson (Hamilton)

Predictably, we have had a wide-ranging debate, with some startling and amazing contributions. In the brief time available, neither I nor the Minister can cover all the points.

The House will be aware that everything about which we have talked today, whether it be the middle east, development aid, famine, the European Community, Hong Kong or Japan, is overshadowed by the coming summit between President Reagan and Mr. Gorbachev on the state of East-West relations and the crisis that now affects the world.

My right hon. Friend the Member for Leeds, East (Mr. Healey) was unfairly disparaged for not showing sufficient interest in the success of the summit. A close re-reading of his speech will show that the Opposition are as interested as anyone in the success of the summit and hope that President Reagan and Mr. Gorbachev will manage successfully to deal with the momentous and important issues that will be before them when they eventually meet in Geneva.

The importance of that issue should remind us that tomorrow is the 25th anniversary of the election of President John F. Kennedy to the White House. For those of us who were then still young and junior in politics, that was a momentous occasion for the United States of America, with a change of generation and attitudes in the nuclear age. I came across a quotation the other day from a speech made early in President Kennedy's term of office, which I think is as true today as it was in June 1963, when he said: And is not peace in the last analysis, basically a matter of human rights—the right to live out our lives without fear of devastation, the right to breathe air as nature provided it, the right of future generations to a healthy existence? In an era when, as my right hon. Friend has so aptly described, we have stockpiles of weapons that could destroy this planet many times, how much truer those words are today than they were then.

All of us, whatever our political complexions, must hope sincerely that those discussions taking place at the highest level between the super-powers will be productive and will lead to a lessening of tension, a reduction in the arms race and a climb-down in the number of arms that both sides feel they must have.

I should like to pose two questions which I do not think the Foreign Secretary sufficiently took on board, but which the Minister for Overseas Development may be able to answer. The first relates to a question that my right hon. Friend asked the Foreign Secretary and to which he chose not to reply. I am sure that the House will be interested in hearing the answer. Did the Prime Minister apologise to President Reagan for the Foreign Secretary's helpful, constructive and widely praised speech about the strategic defence initiative to the Royal United Services Institute for Defence Studies at the beginning of last year? It is very important to know whether the wise words of the Foreign Secretary represent British Government policy, or whether the rumoured apology to the President of the United States is a fairer reflection of the Prime Minister's acquiescence with United States policy.

Secondly, do the Foreign Secretary and the Government believe that the strategic defence initiative should be a matter for negotiation at the Geneva talks, whether at Secretary-General level or in the continuing arms discussions, in response to the offers that have been made relating to deep cuts? This is fundamental to the outcome of the negotiations. The right hon. Member for Daventry (Mr. Prentice) poured cold water on my right hon. Friend the Member for Leeds, East for pointing out the differences that exist between the various Administration spokesmen. This does not require great forensic skill or detective work. The President of the United States and his Secretary of State for Defence are publicly at odds about so fundamental a matter as arms control. The House of Commons deserves to know precisely what is the view of the British Government and what advice the Prime Minister gave to the President of the United States on this important matter.

The Gracious Speech also refers to the European Community. Although the House will have an opportunity next Thursday to consider European Community matters, they are relevant to this debate, for the Gracious Speech states: Within the Community, they will work for improved decision taking, strengthened co-operation on foreign policy". The Foreign Secretary told us that he is pleased with the progress that is being made on the British Government's proposals for foreign policy co-operation within the intergovernmental conference. That is very different from what we were told by the Prime Minister following the Milan summit: that our European Community partners had hijacked the Foreign Secretary's proposals and taken them further, leading to considerable resentment by the Government.

I do not believe that satisfactory progress has been made. Following the Foreign Secretary's presentation paper, after which the European Community embarked on foreign policy co-operation, the first initiative was a united stand on sanctions against South Africa, yet it was the country which claimed authorship of the initiative which, of all the European Community countries, chose to stand aside from that one area of foreign policy co-operation. The statement that the Foreign Secretary's proposals about co-operation are making progress within the intergovernmental conference stretches the belief of hon. Members.

A large number of issues have been raised in the debate. In remarkable speeches, my hon. Friends the Members for Hackney, South and Shoreditch (Mr. Sedgemore) and for Linlithgow (Mr. Dalyell) asked serious questions about two separate but very important issues. I doubt whether they will receive answers this afternoon from the Minister for Overseas Development, but Parliament deserves an answer to their questions. Speeches have been made by other right hon. and hon. Members about Hong Kong, Japan and the middle east. I regret that it is impossible to cover the important matters that they have raised. However, their comments, representing different points of view, should be listened to with care.

The Government's position on South Africa causes widespread anxiety in the House and in the world. Despite all the advances in modern technology, the Prime Minister and the Government cannot have seen the television pictures to which the British people were subjected night after night, until the censors of South Africa's police state rudely turned them off. Perhaps she and the Government were far too busy constructively engaging the controllers of apartheid to make time to see the violent oppression of the black majority, which has caused more than 900 deaths since May 1984. Perhaps she and the Government are too busy working, as she said on 10 October, "through negotiation", to solve that country's crisis.

The Labour party does not scorn such negotiations, but with whom do the Government believe they should negotiate? The Foreign Secretary talked about dealing with black African leaders, but which "genuine leaders"—to quote the Commonwealth document—should be involved in such talks? Only a few years ago, the Government sat down in the comfort of Lancaster house to deal with the leaders of the Patriotic Front in Zimbabwe, while their fighters were actively engaged with the Smith regime. Yet the Government helped to thrash out the new constitution for Zimbabwe. Why do the Government continue to insist that the ANC gives up its armed struggle as a condition of those negotiations? Why cannot the Prime Minister sit down with Oliver Tambo, who addressed the Select Committee on Foreign Affairs two weeks ago, and who was described by the assistant editor of the Cape Times in an unprecedented and illegal article as, an essentially moderate black leader"? What are the positive measures ascribed by the Foreign Office to President Botha's futile reforms? Which of those positive measures gives hope to the majority in South Africa that democracy is just around the corner? What is the root of the violence in South Africa, if not apartheid itself? Having been dragged kicking and screaming into accepting, albeit grudgingly, EC and Commonwealth sanctions, the Government still refuse to say what they will do if the South African Government do not, as the Foreign Secretary said in The Sunday Times of 13 October, convince the world community that it is, even now, tackling the fundamental issues of black political rights and the total abandonment of the concept of apartheid. That question has been asked even by Conservative Members, and the House deserves an answer to it. What will happen in six months' time?

The Opposition want peaceful change in South Africa. That is why we, with the majority in South Africa, call for sanctions as one of the last remaining options in our power to show not only our moral repugnance at apartheid, but, more importantly, to show President Botha and his allies that the economic pillars that sustain apartheid must be dismantled to force the system's negotiated demise.

If sanctions do not work, why did the Government have them against Ian Smith in Rhodesia? Why did we take part in sanctions against Poland? Why do we still operate sanctions, through COCOM, against the Eastern bloc? If sanctions do not work, why do the Government have a record of trying to make them work?

Today, I came across a remarkable cartoon from an Afrikaaner newspaper, Die Beeld, of 22 October 1985. It portrays Mrs. Thatcher as a warrior, holding high her Union Jack shield bravely to defend the apartheid castle against the battering ram of sanctions from the rest of the world. What a true heroine of Afrikaanerdom she has become out there, and how those in Pretoria must have danced round their dining room tables during the Nassau Commonwealth meeting as the Prime Minister brazenly spoke up for inaction. If the British people still do not know the identity of apartheid's friend, the ruling white bloc in South Africa, through its newspapers, certainly does.

As the Foreign Secretary told us earlier, after the Nassau conference the Government appointed his man to the team of Commonwealth eminent people. Of course, the former Chancellor of the Exchequer is a man of truly eminent stature, clear vision, sound judgment and hard work. Or is he? On 11 March 1970, Lord Barber, then Mr. Tony Barber and chairman of the Conservative party, said in Capetown: South Africa is our ally and we will treat it as such. That is what this eminent man, newly appointed to the investigation committee, had to say in 1970. What sort of signal is that to give to our Commonwealth partners? No doubt the British embassy in Pretoria has been besieged with calls from genuine black leaders congratulating the Government on their remarkable choice.

Despite all the Prime Minister's words about the need and urgency for change, the Conservative Government remain a remarkable friend to apartheid. They alone seem to cling vainly to a hope that President Botha's irrelevant reforms will satisfy the majority. However, President Botha has repeated endlessly his commitment to maintaining apartheid's superstructure and rejected any idea of abolishing the Group Areas Act. Instead he asked his President's council to look at ways of improving it—rejecting the council's advice to abolish influx controls. How then can our Government talk continually about "positive measures"? The abolition of two apartheid laws a year leaves 108 years to go before apartheid is demolished and 85 per cent. of the population are given the rights which we consider to be absolutely normal.

The Government offer nothing new in their programme for the forthcoming year regarding the important areas of the Third world and overseas aid. Several hon. Members mentioned the matter this afternoon and, rightly, even the right hon. Member for Daventry raised it remarkably in his otherwise undistinguished speech. He made some damaging criticisms of his Government. I only wish that the Government showed the same concern about overseas aid as do hon. Members and the British people, who have given generously from their pockets for the relief of famine in Africa. But they do not. When the Prime Minister stood on the steps of No. 10 when she took office in 1979, she said: Where there is despair, may we bring hope. She obviously did not mean the Sudan and the slums of Calcutta, any more than she meant the inner cities and dole queues of her new Britain. She soon made clear what she thought of the "handouts"—that is her word—that the Labour Government had spent on making life a little better for and giving hope to the world's poorest people.

Last week the Prime Minister told us again what she thought of overseas aid. She said that any increases that the Government made in overseas aid would mean cuts in other Government spending. What a disgraceful statement from a Prime Minister who has presided over record cuts in overseas aid. The Minister for Overseas Development can wriggle all he likes, but he cannot deny that the aid budget has fallen by 18 per cent. in real terms since 1979, that it fell by 3 per cent. last year, when the British people gave so much for famine relief, and that our aid spending has fallen to the lowest level ever recorded as a proportion of GNP—to 0.33 per cent. which is less than half the United Nations' target, to which the Minister says the Government remain committed. He cannot wriggle from the criticism of the Foreign Affairs Select Committee and its brutal attack on the funding of famine relief in Africa.

The British people want to play their part in famine relief and overseas development. A couple of weeks ago 20,000 of them came here to demonstrate that fact. It is time that the Government registered that and stopped cutting aid. As my hon. Friend the Member for Islington, North (Mr. Corbyn) pointed out, the problem of world debt is crippling the economies even of countries to which famine has not yet spread. In sub-Saharan Africa, debt servicing now costs nearly one third of export earnings. Their economies are being strangled by draconian measures imposed on them by Western bankers and the International Monetary Fund. We stand back and pretend that it is all their fault and that if they would only adopt our methods they could climb out of the crisis that has been imposed on them.

When will the Government take up their responsibility to the rest of the world? Will they continue to tell the poor to pull themselves up by their own bootstraps and then insist on the very austerity programmes that are destroying their economies, or will they at long last make a positive gesture? Will Ministers at least discuss the possibility of converting the debts of the poorest countries into grants and relieve them of the burden that prevents real development? Will they take heed of the voices of the 20,000 people who came to the House, and the millions of others who want a Government who care about the poor and the Third world and are prepared to put money rather than just words into ending famine now and preventing it in the future?

2.10 pm

The Minister for Overseas Development (Mr. Timothy Raison)

It is a bit much for the hon. Member for Hamilton (Mr. Robertson), in a debate on foreign affairs and overseas aid which the Opposition asked for, to devote just the last two and a half minutes of his speech to overseas aid and to speak in terms which are palpably outrageous and grossly exaggerated. One cannot help acknowledging that the Opposition spokesman on overseas aid seems to be far away from the House this afternoon, which implies a not very enthusiastic devotion to the cause that the hon. Gentleman has tried to uphold.

We have had an interesting debate. It has been a mixture of wisdom and extremist sensationalism. I do not intend to respond in detail to the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore). He has made allegations about an enormous cast of characters. As far as I could tell, they fell into three groups. The first comprised many individuals whom the hon. Member described as crooks. Those are matters for the police. The second was the Bank of England and the new management of Johnson Matthey Bankers. I remind the House that, as my right hon. Friend the Chancellor of the Exchequer said on 17 July, it was the bank and the management who called in the police. The hon. Member for Hackney, South and Shoreditch also talked of the Government's role. I reject with contempt the hon. Gentleman's allegations and deplore his baseless charge that my right hon. Friend the Chancellor is perverting the course of justice. My right hon. Friend told the hon. Gentleman on 24 October: If there are any matters for the police to pursue I am confident they will do so.—[Official Report, 24 October 1985; Vol. 84. c. 183.] We have had a wide-ranging debate. The right hon. Member for Western Isles (Mr. Stewart) talked about Sunday trading at one point. That seemed a little far removed from overseas aid and foreign affairs. It also struck me that it was a little rum that he should inveigh so heavily against proposals for reforming the English law on Sunday trading, when it is likely that the reform will be similar to that which is already upheld in Scotland. I am not aware that the right hon. Gentleman has spent his days campaigning for a reform of the Scottish law.

Perhaps more relevant to our debate, the right hon. Gentleman launched a characteristic and passionate plea for more aid and then said that our best action would be to shut off textile imports from the Third world. That also is slightly paradoxical.

Mr. Donald Stewart

The right hon. Gentleman will remember that the Auld report included Scotland, so the proposed legislation is not necessarily confined to England and Wales. As for the multi-fibre arrangement, none of the countries that I have in mind for aid has textile industries.

Mr. Raison

I wonder whether the right hon. Gentleman has heard of a country called Bangladesh, which I assume he wants to aid and which has provided us with an enormous quantity of textiles to which we are responding generously.

We have covered a great deal of ground. My right hon. Friend the Member for Blackpool, South (Sir P. Blaker) and my hon. Friend the Member for Harwich (Sir J. Ridsdale) made interesting speeches on aspects of far eastern policy, among other matters. Much time has been spent on the problem summarised as "star wars". My hon. Friend for Leominster (Mr. Temple-Morris) made a speech to which the House listened carefully. The right hon. Member for Leeds, East (Mr. Healey) devoted a substantial part of his speech to the star wars problem.

I shall talk primarily about overseas development because it is right that I should do so. I believe the House would want me to consider that matter. The right hon. Member for Leeds, East closed his remarks with the hope that Britain would take the lead in bringing the world back to sanity over nuclear weapons. I assure him that the Government will continue to seek equitable, balanced and verifiable measures of arms control in the nuclear field, as elsewhere. Nothing could be saner than that.

The right hon. Member for Leeds, East asked specifically about American consultation on the latest United States proposals tabled at Geneva. We knew about those detailed proposals in advance. There had been extensive consultations, including President Reagan's meeting on 24 October in New York. Mr. Nitze's meeting with the North Atlantic Council on 6 November which concentrated on Mr. Shultz's visit to Moscow was a part of that process. We are actively seeking progress with respect to the comprehensive test ban, to which the right hon. Member for Leeds, East referred. In July, we tabled a paper at the conference on disarmament dealing with verification. We know that the technical problems have not yet been resolved. They are important and cannot be swept under the carpet. We believe that it would be premature to resume substantive negotiations on a comprehensive test ban treaty until solutions to these problems have been found.

Although the House listened carefully to the right hon. Member for Leeds, East because he has great experience, I think that it struck many hon. Members as a pity that he did not take account of how much work on space research the Russians had already done. He made a passing reference to it but concentrated the bulk of his attack on the American side. It seemed to me that the way in which he dealt with this matter was very unbalanced.

Mr. Healey

I made it absolutely clear that I endorsed the statement by the Foreign Secretary about the work carried out during the past 20 years by the Soviet Union on ballistic missile defence. I asked the Government to support an initiative to stop further work on both sides of the iron curtain. I had to spend so much time on star wars because, so far, President Reagan has refused to negotiate. He has refused to negotiate on the cessation of work at Krasnoyarsk, Fylingdales and Thule.

Mr. Raison

There is no comparison between the installations at Krasnoyarsk and Fylingdales. An early warning system existed at Fylingdales long before the 1972 ABM treaty. We are confident that the existence and the proposed modernisation of Fylingdales is in full conformity with the obligations of the United States under the ABM treaty.

The House understandably devoted considerable time to the problems in the middle east. Right hon. and hon. Members spoke with great authority, concern and expertise. I do not have the time to pursue this matter in detail but must make one particular point. The right hon. Member for Leeds, East referred to the Prime Minister's remarks in New York about a framework. It is encouraging that Mr. Peres and King Hussein have spoken of the need for an international framework within which peace negotiations could take place. We shall continue to play our part in supporting all constructive moves by the parties concerned.

My hon. Friend the Member for Westbury (Mr. Walters) and other hon. Members referred to the PLO's role. We continue to believe that the PLO should be associated with the negotiations. That is in line with the Venice declaration.

The Queen's Speech says that the Government will give full support to the Commonwealth, and play a constructive role at the United Nations. They will maintain a substantial aid programme; play their part in the relief of famine and of other disasters; and encourage investment in developing countries. We shall continue to fulfil all those commitments.

My right hon. Friend the Member for Daventry (Mr. Prentice) and my hon. Friends the Members for Westbury and for Berkshire, East (Mr. MacKay) spoke of aid as a moral imperative. I accept that view. Aid gives us advantages—and it is right that it should do so—but a moral imperative lies at the heart of it. Anyone who looks carefully at our aid programme will see that we are fulfilling that moral imperative.

My right hon. Friend the Member for Daventry asked for more money to be provided for the problems in Africa and he is not alone in making that request. By skilful and well directed use of aid resources, we have managed to play a big part in helping to meet famine problems in Africa and we have done so without damaging our long-term development programmes.

In the last financial year, we provided from within the aid programme £95 million of emergency assistance related to the famine in Africa. I have explained to the House previously that we found those funds by drawing on the contingency reserve, which exists to deal with crises, and by making sure that European Community and our own food allocations have been directed okerwhelmingly towards the famine problems.

All too often, food aid is not targeted effectively and is provided indiscriminately. The Government have long wanted to get food aid used properly, and I believe that we can claim that by directing our food aid programme sensibly and by encouraging the Community to do likewise we have achieved a heavy concentration of famine relief on Africa without damaging our country programmes. I have never had to say that we must cut back on planned country programmes to meet short-term famine needs. I hope that my right hon. Friend the Member for Daventry will support our approach and agree that the results have been effective.

I do not claim that our aid programme has been immune from the effects of our public expenditure policy. However, the more that people look at what we are doing, the more they will see that our programme is concentrated and is held in high regard throughout the world.

The average aid figure of OECD countries is 0.36 per cent. of gross national product. Our figure is 0.35 per cent. To all intents and purposes, we are in line with other OECD countries. I accept that we have not met the United Nations target, but we hope to move towards that and, in the meanwhile, we are concentrating on the job of providing help most effectively where it is needed throughout the Third world.

Our aid programme is strongly oriented towards poor countries and a crucial factor is that it takes the form not of loans, which serve to generate debt, but of grants. The hon. Member for Hamilton raised that point and I can tell him that, through the mechanism known as retrospective terms adjustment, we have written off the aid debts of 21 countries, to a value of about £1 billion. In that respect, the British aid programme has been one of outstanding value. The ways in which we have generated a strong aid programme owes much to our traditions and experience across the world. I am repeatedly impressed by the high regard in which our experts and technical co-operation officers are held.

I am moved by the way in which our response to the immediate, desperate famine in Africa has been received. We have been criticised at home, but when I talk to the people of the countries involved about the British effort the picture is different. I was visited earlier this week by Major Dawit, the head of the Ethiopian Relief and Rehabilitation Commission who is in charge of the relief operation in Ethiopia. Our differences with the Ethiopian Government are well known. Their politics are far from our politics, but in spite of that Major Dawit told me—far from formally —that he was deeply touched by what Britain and the British Government had done for Ethiopia. He also paid tribute to the exceptional work of the Royal Air Force Hercules contingent. I have had the good fortune to fly with the Hercules contingent in Ethiopia on more than one occasion. Seeing the way in which that team worked with such professional efficiency and with a profound humanitarianism is something that I shall never forget and, more important, that the Ethiopians will never forget. Our response to the famine has been of outstanding quality and quantity.

We must go further than deciding how to deal with the present grave famine crisis which is gradually easing as a result of the enormous quantities of food aid provided by the western world. There have been distribution difficulties, but the response has been tremendous. The grain mountains are a weakness of the common agricultural policy and we often criticise them, but if we had not had them it would have been much harder to feed the people of Ethiopia and Sudan in recent months.

Mr. Nigel Spearing (Newham, South)

That is not true.

Mr. Raison

There is no question about that. The immediate relief operation is of great importance and it is being conducted with skill and determination. Our minds are now turning to the next phase in the operation—the medium-term rehabilitation process. As the need for food aid diminishes, the next phase is to help to provide seeds for next year's crops, tools, water and machinery. This Government will play a full part in that rehabilitation. We must also think about the longer-term development of Africa. That is the ultimate answer to dealing with the cruel famines.

In spite of the tremendous political difficulties such as the nature of Governments and the several wars raging in some of the countries, a coherent strategy for development is emerging. That will make a difference in the African continent. There is a chance of reversing the pattern of declining food production against an increasing population which is at the heart of the problem. That requires strong co-ordination between the donor countries. We have to agree among ourselves and with the recipient countries on the right policies. That means that those who produce food must receive a proper reward for their efforts. If the farmers are not paid enough they will take refuge in the cities, add to the population pressure and do nothing to solve the problem.

The currencies in recipient countries are characteristically overvalued. That is damaging to tourism and in many other ways. Bureaucracies are out of hand and often incompetent. Left to himself, I am sure that the ordinary African farmer could cope better than he has with all the people sitting on top of him. There is much wisdom in that belief. In other respects we have to help Africa get away from the domination of ideologies that do nothing to bring about effective development in the true sense. To put it bluntly, African Socialism, whatever the ideals associated with it may have been, has proved to be as bad a way of producing food as Socialism in the east of Europe.

It is particularly important to realise that we are not trying to preach from outside. I find myself talking—

It being half-past Two o'clock, the debate stood adjourned.

Debate to be resumed upon Monday I1 November.