Commons Sitting of 15 January 1986

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TRADE AND INDUSTRY

    Financial Services
    Mr. Michieasked the Secretary of State for Trade and Industry when he next proposes to meet the Confederation of British Industry to discuss the regulation of financial services.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Leon Brittan): I am always interested to hear the views of the Confederation of British Industry, but I have no plans for a specific meeting in the near future.
    Mr. Michie: Why did the Financial Services Bill not make it clear that we ought to have statutory bodies independent of the people whom they are supposed to be reviewing? That is successfully done in most of the financial markets in the rest of the Western world. Why cannot we have completely independent statutory bodies?
    Mr. Brittan: The independence of the Securities and Investments Board or its successor is unquestioned, but there is a real advantage in having regulatory bodies consisting of people who themselves are practitioners close to the market. That will lead to tighter rather than looser regulation.
    Sir Anthony Grant: Is my right hon. and learned Friend aware that many of us who are keenly interested in the subject of financial services sought to pose a number of questions to the Government in yesterday's debate, but we could not get an answer from my hon. and learned Friend the Under-Secretary of State because he was subjected to a most disgraceful muckraking campaign by the Opposition, with the result that serious points could not be answered? Will he find an opportunity to answer some of those questions in the near future?
    Mr. Brittan: I am sure that I or my hon. and learned Friend the Under-Secretary of State will wish to take the opportunity to put on the record the points that my hon. and learned Friend was unable to deal with yesterday. One is always suspicious of circumstances in which a Minister has answers to give but the Opposition seem reluctant to hear them.
    Mr. Ashdown: The Secretary of State might accept that while the personal reputation of the hon. and learned Member for Folkestone and Hythe (Mr. Howard) is
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    beyond question, it nevertheless remains the fact that Lloyd's is a major issue in the Bill, and to have a member of Lloyd's, of whatever status, pilot the Bill through the House of Commons is bound to be misunderstood—
    Mr. Speaker: Order. The question is concerned with the CBI.
    Mr. Ashdown: Does the Secretary of State recognise that the CBI and others are bound to misunderstand that, and that it is bound to undermine the standing of the Bill and, indeed, the probity of the Government? Will the right hon. and learned Gentleman reconsider the matter and, if the hon. and learned Member for Folkestone and Hythe cannot divest himself of his interest in Lloyd's, will he think of giving another colleague—
    Mr. Speaker: Order. That has nothing to do with it.
    Mr. Brittan: The CBI has made no representations to that effect.
    Mr. Gould: Given that one of the major objects of the Financial Services Bill, with which the CBI and everyone else is concerned, is the avoidance of conflicts of interest in the City, is it not odd that the Minister responsible for the Bill is himself involved in a conflict of interest'? Is the Secretary of State aware—
    Mr. Speaker: Order. The same principles apply to the Front Bench. The question must concern meetings with the CBI.
    Mr. Gould: This is a question relating to the regulation of financial services, which is the subject of the question on the Order Paper. Has the Secretary of State had his attention drawn to the Churchill-Butler statement on these issues, which has been endorsed by a line of successive Prime Ministers, the first paragraph of which reads: "It is a principle"—
    Mr. Speaker: Order. That does not relate in any way to discussions with the CBI. The shadow Minister must relate his question to that aspect.
    Mr. Gould: Nevertheless, this is a matter with which the CBI and everybody else in the City will be concerned. Will the Secretary of State ensure that if the Minister is unable for any reason to divest himself of the interest which he holds in Lloyd's, he will—
    Mr. Speaker: Order. That is quite out of order.

    Privatisation
    Mr. Nellistasked the Secretary of State for Trade and Industry if it is his intention to bring forward measures for the privatisation of all the publicly owned enterprises listed in the answer of 27 November, Official Report, column 870, within the lifetime of the current Parliament; and if he will make a statement.
    The Minister of State, Department of Trade and Industry (Mr. Peter Morrison): No. It is not expected that all the businesses mentioned in the previous answer can be wholly returned to the private sector during the current Parliament.
    Mr. Nellist: Before the Secretary of State departs the Front Bench, will the hon. Gentleman ask him whether he is aware that privatisation so far has cost working people in Britain over £1·4 billion as a result of the Government

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    under-pricing the assets that they have sold off, has given the mates of the Secretary of State in City institutions £300 million in fees and expenses, and has resulted in worse services and higher prices to working people?
    Rather than have further privatisation of publicly owned assets such as Rolls-Royce, which is in my constituency, why does the Minister not ask the Secretary of State to bring forward a one-day Bill, as did the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in respect of that company, to nationalise Westland plc and guarantee the jobs of the workers in Yeovil and the Isle of Wight?
    Mr. Morrison rose
    Mr. Speaker: Order. This is Question Time, not an Adjournment debate.
    Mr. Morrison: I can assure the hon. Member for Coventry, South-East (Mr. Nellist) that I put all those questions, precisely as he would have wished me to do, to my right hon. and learned Friend the Secretary of State. My right hon. and learned Friend agrees with me that all the hon. Gentleman's propositions are wrong.
    Mr. Kenneth Carlisle: Does my hon. Friend agree that denationalisation has been a good policy for this country? Have those businesses concerned not done better and begun to make profits? Above all, do not 90 per cent. of their employees now own shares in their own companies.
    Mr. Morrison: I agree with my hon. Friend, and must emphasise that the vast majority of employees now feel the benefits of privatisation.
    Mr. James Hamilton: Will the Minister confirm that the Government have given the British Steel Corporation a mandate to accelerate the company towards privatisation, with special emphasis on the tube-producing section? Will he confirm that that is Government policy?
    Mr. Morrison: I can certainly confirm that our policy, and that of the BSC, is directed towards a competitive and profitable industry.

    EC-USA Steel Arrangement
    Mr. Hayesasked the Secretary of State for Trade and Industry if he will make a statement on the EEC-USA steel agreement.
    Mr. Peter Morrison: The new EC-USA steel arrangement, ratified by the Council of Ministers on 10 December, is generally acceptable to the United Kingdom. The United Kingdom delayed ratification for several weeks, during which assurances were obtained from the United States authorities on adequate access for BSC exports of semi-finished steel to Tuscaloosa Steel of Alabama under an existing long-term contract.
    Mr. Hayes: I congratulate my hon. Friend on achieving what appears to be a satisfactory settlement to a very thorny problem. Does he accept that that was done through painstaking negotiation?
    Mr. Morrison: I assure my hon. Friend that the negotiations were long, complicated and difficult. However, it was essential for the steel corporation that we hung out for what we obtained.
    Dr. Bray: Does the Minister acknowledge that the level of exports of slabs to the United States, permitted by the United States, is nowhere near adequate to maintain Ravenscraig without Gartcosh?
    Mr. Morrison: I do not acknowledge that. As the hon. Gentleman is aware, by and large the deal that we obtained, with the exception of that part relating to Tuscaloosa, was based on current exports.

    Exporters (Assistance)
    Mr. Robert Atkinsasked the Secretary of State for Trade and Industry if he is satisfied with the financial and other support given to exporters by his Department.
    The Minister for Trade (Mr. Paul Channon): I am confident that support given to exporters by my Department is effective, but I am, of course, always looking for ways to improve it.
    Mr. Atkins: Is my right hon. Friend aware that many of us are extremely grateful to him for his work concerning exports? However, is he further aware of the criticisms of exporters and companies in various constituencies about the ECGD? They think of it as an umbrella available when the sun is shining, rather than when the need arises.
    Is my right hon. Friend aware that with many countries, such as Thailand and Mauritius a policy of soft loans would be beneficial to exporters in seeking to achieve success in those markets?
    Mr. Channon: I am grateful to my hon. Friend for his remarks.
    The ECGD has two duties, to provide an efficient support to exports and to break even, and that is difficult in view of the present economic conditions throughout the world.
    I shall consider my hon. Friend's point about Thailand and Mauritius. As he knows, I am still doing my best to help him and his constituents with the famous Bangkok bus project.
    Mr. Jim Spicer: Will my right hon. Friend take note that in this context the opportunities available to our exporters in Turkey are valuable, and will he pay particular attention to those opportunities?
    Mr. Channon: Of course I shall. I take note of my hon. Friend's view about opportunities in Turkey.
    Mr. Skinner: Does the Minister recall negotiations with a couple of firms which are trying to sell refuse collection vehicles to Ecuador but which are running into some trouble?—[Laughter.]— I know that this is different from normal practice, but that is what the game is about. Is the Minister aware that his Department has been holding up arranging export credit guarantees which would enable workers to build the refuse collection vehicles in the midlands and north-east Derbyshire? Is he further aware that more than 50 jobs are on the line? Why is the Minister causing all these difficulties by stopping the export credit guarantee arrangement? Will he deal with the matter, because if it is not finalised this week the jobs will go and the balance of payments will be the loser?
    Mr. Channon: I shall, of course, look at the matter. Ecuador has been a recipient of the DX facility from the ECGD. I do not know about the specific case that the hon.

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    Gentleman has in mind, but it is likely that it involves a case for which I have just agreed there should be export credits.
    Mr. Thurnham: Does my right hon. Friend agree that the purpose of exporting is to make us wealthier, rather than poorer?
    Mr. Channon: Yes, Sir.
    Mr. Maclennan: Is the Minister prepared to consider whether the financial duties requiring ECGD to break even are too tight and so defeat the purpose of existing exports?
    Mr. Channon: I shall certainly look at that, but I should be surprised if any rational man could come to that conclusion. The ECGD's cash flow problems are well known and serious. That is not surprising in a period of great economic difficulties throughout the world.

    Cars (UK Content)
    Mr. Woodasked the Secretary of State for Trade and Industry what steps he is currently taking to seek to persuade car manufacturers based in the United Kingdom to increase the United Kingdom content of their cars sold in the United Kingdom.
    Mr. Peter Morrison: My right hon. and learned Friend, I and officials meet senior management of the United Kingdom car manufacturers regularly to discuss this and similar matters, with encouraging results. For example, after a recent meeting with my right hon. and learned Friend, Vauxhall's chairman and managing director announced the company's plan to increase the United Kingdom content of the vehicles that it builds here from about 50 per cent. in the past year to about 60 per cent. by the end of this year.
    Mr. Wood: I thank my hon. Friend for that reply. Concern is caused when individuals are encouraged to buy British and some manufacturers, although based in this country, use a large imported content in their vehicles. Does my hon. Friend agree that good component manufacturers operate in Britain and that they should be encouraged by further purchases from firms such as Vauxhall?
    Mr. Morrison: I agree with my hon. Friend. As I said in my original answer, my right hon. Friend and I, and others in the Department, do everything that we possibly can to encourage purchases from home-based component manufacturers.
    Dr. Marek: Is the Minister aware that one of the steps that he can take is to ensure that we have a continuing supply of competitively priced and efficiently produced engineering steel in Britain? Will the Minister do everything in his power, if the United Engineering Steels company wishes, to ensure that a concast is installed at Brymbo steelworks?
    Mr. Morrison: The hon. Gentleman makes a particular and specific point. I agree that the component parts are important. I am happy to take his point on board and to look at the matter carefully. I can say no more than that at this stage.
    Mr. Roger King: Does my hon. Friend agree that there is a contrast between our open attitude in ensuring as free
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    a market as possible for the manufacture of cars in Britain and the attitude of other countries, notably Spain, which is conducting a blockade of our components?
    Mr. Morrison: Yes, but as my hon. Friend will be aware, negotiations are proceeding. We hope that they will be brought to a successful conclusion.
    Mr. Williams: As nearly all the increased import penetration in the car market since the late 1920s has arisen from the tied imports of Ford and Vauxhall—of course, we welcome the recent modest announcement—does the Minister agree that Vauxhall., with its massive trade deficit on vehicles, must make a far more substantial investment in major components, such as engines and transmissions, made in Britain, and possibly restore a design capability? Have not the Government made such investment more difficult with their record of five years of abnormally high interest rates? Interest rates are almost double what firms would have to pay if they went to Germany.
    Mr. Morrison: I would not describe the recent announcement as modest. It represents a significant increase. I agree with the hon. Gentleman that the more our domestic component manufacturers sell, the better. His wider question is a matter for my right hon. Friend the Chancellor of the Exchequer.
    Mr. Hanley: While recognising my right hon. and hon. Friends' considerable efforts in increasing the United Kingdom content of cars made in the United Kingdom, may I also ask that they recognise the tremendous contribution made by United Kingdom car component manufacturers to the content of cars made abroad? Will they encourage foreign buyers to buy even more components from the United Kingdom?
    Mr. Morrison: I entirely agree with my hon. Friend. The more that United Kingdom car manufacturers buy domestically, the more it will encourage foreign manufacturers to buy products made by British component manufacturers.

    Multi-fibre Arrangement
    Mr. Gouldasked the Secretary of State for Trade and Industry what progress has been made in preparing for the negotiations for the renewal of the multi-fibre arrangement.
    Mr. Lawlerasked the Secretary of State for Trade and Industry if he will make a statement on the current position regarding negotiations concerned with renewal of the multi-fibre arrangement.
    Mr. Channon: The Council of Ministers will be considering the Community's negotiating mandate at its meeting on 27 and 28 January. I announced the policy of the Government in the House on 9 May last year. I am meeting representatives of the industry and other interested parties next week.
    Mr. Gould: Is the Minister aware of the anxiety felt in all parts of the industry at the strong and persistent report that, despite his stated commitment to the effective renewal of the multi-fibre arrangement, British officials are in the van of those in Brussels who are pressing for a weakening of the import regime? Does he recognise that a substantial dilution of the MFA will cause immense

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    damage to the British industry, and will he assure the House that henceforth his officials will work religiously towards the achievement of an effective renewal?
    Mr. Channon: I assure the hon. Gentleman that the British officials in the negotiations are working under instructions from me and are following the Government's policy. I am surprised that the hon. Gentleman, with his experience in this area, should imagine anything else.
    Mr. Lawler: There is some anxiety and confusion in the industry about whether the Government believe that this should be the last such arrangement. Will my right hon. Friend clarify the position?
    Mr. Channon: We have never said that this should be the last MFA. A new MFA is likely to last for four or five years. The longer-term future of the MFA should be decided in the context of the proposed new GATT round of international trading talks.
    Mr. Torney: Is the Minister aware that the textile industry in Bradford has suffered for many years because of the importation of goods produced by competitors who use cheap labour? Is he further aware that if the multi-fibre arrangement is not renewed, or if it is weakened, it will create chaos in the woollen textile industry in Bradford and bring more unemployment to an area which already has above national average unemployment?
    Mr. Channon: The hon. Gentleman knows that it is the Government's policy that the MFA should be renewed. He will be pleased to know that during the first 10 months of 1985 wool textile exports increased by 14 per cent. to a record £518 million.
    Mr. Meadowcroft: Is it not true that many companies have coped and will cope with the diminution in the MFA, and that even within companies, some sections—for instance, spinning—will benefit from imports, whereas other sections, such as finished products, will suffer? Will the Minister remember that in any renegotiation we must be aware of that distinction and assist British companies to cope with the genuine free market at which they are aiming rather than protect them artificially?
    Mr. Channon: In general I agree with the hon. Gentleman. I am meeting representatives of the industry next week, and no doubt all those points will be considered in great detail.
    Mr. Sims: In the discussions, will my right hon. Friend take particular account of the views of the Hong Kong Government? Is he aware that although the present agreement is supposed to benefit underdeveloped countries the benefit has been very small and it has been to the disadvantage of Hong Kong? Will he ensure that the future agreement, if it does not help Hong Kong, at least does not penalise it?
    Mr. Channon: It is not for the British Government alone to decide the contents of the agreement, but we certainly take the view that it should give favourable treatment to the poorest developing countries and to developing countries with very low barriers to British exports, which includes Hong Kong.
    Mr. James Lamond: Is the right hon. Gentleman aware that import penetration in textiles is six times what it was 10 years ago and that unemployment is again increasing in the north-west, including my constituency,
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    which still depends heavily on the textile industry? Will he check again with his civil servants on the point made by my hon. Friend the Member for Dagenham (Mr. Gould), because authoritative sources on the employers' side suggest that British civil servants are taking a leading part in pressing for a much more liberal multi-fibre arrangement?
    Mr. Channon: I assure the hon. Gentleman, as I assured his hon. Friend, that the civil servants negotiating in Brussels do so with my express authority, and I keep a close control on and watch every detail of the negotiations. What the hon. Gentleman said is correct to a certain extent. That is one reason why we are seeking a renewal of the multi-fibre arrangement, which I believe met with the general agreement of the House last May.
    Mr. Madden: Is the right hon. Gentleman aware that workers in the textile industry suspect that Ministers at the Department of Trade and Industry are more interested in protecting their own political careers than in protecting the British textile industry? Does he accept that although there is no doubt that the Government are committed to renewal of the MFA, there is considerable doubt as to the extent to which the Government want a major relaxation of the controls? Will he now give a firm undertaking that the British Government do not favour or support any major relaxation of the MFA controls?
    Mr. Channon: The first part of the question says more about the hon. Gentleman than about Ministers at the Department. Any renewed MFA is bound to be more liberal than the present arrangement. I think that that is generally understood. As I have said, it should provide favourable treatment for the poorest developing countries and those with low barriers to British exports, and it should also help in relation to children's clothing. I am anxious to see a more liberal MFA, but one which does not damage the textile and clothing industry. The industry understands that very well, and I shall be discussing the matter in great detail with the industry next week.

    USSR
    Mr. Tom Coxasked the Secretary of State for Trade and Industry what was the total amount of trade between the Union of Soviet Socialist Republics and the United Kingdom for the year 1985.
    Mr. Channon: The full year's figures are not yet available, but the total amount of trade between the United Kingdom and the Soviet Union in the first 11 months of 1985 was £1,150 million.
    Mr. Cox: Is the right hon. Gentleman aware that as relationships between the Soviet Union and the rest of the world improve, so do opportunities for trade? Is he further aware that the United States has already sent major trade delegations to the Soviet Union to try to build up the United States' share of that trade? What help is the Department giving businesses in this country to do likewise? In particular, what special financial help is available to get contracts under way initially?
    Mr. Channon: The hon. Gentleman is quite right. Following Mr. Gorbachev's visit to this country, I believe that there are considerable prospects for increasing trade between Britain and the Soviet Union. In the short term that increase has not yet materialised, but at the annual

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    meeting of the British-Russian Joint Trade Commission on 6 and 7 February we shall be making a major effort to increase trade. Very good facilities are available for business men to trade with the Soviet Union, and they receive normal help from the Department. If the hon. Gentleman has any specific case in mind, perhaps he will get in touch with me.
    Mr. Terlezki: Is it conceivable that some of our industrial technology is being sold to the Soviet Union and may be used in the further development of Soviet star wars plans, nuclear weapons or, indeed, any type of weapon?
    Mr. Channon: I hope that that is not possible. My hon. Friend will be aware that there are controls under the COCOM arrangements to stop such exports.
    Mr. Tom Clarke: Is the Minister aware that the Gartcosh plant exports considerable orders to the Soviet Union as well as to other countries? Can he say when his Department will respond to the overwhelming recommendation of the Scottish Select Committee? If not, can he whisper to his right hon. and learned Friend and give the House the information?
    Mr. Channon: I admire the hon. Gentleman's ingenuity, but that is not a matter with which I have been dealing. However, my right hon. and learned Friend has heard what the hon. Gentleman has said.

    Northern Region
    Mr. Merchantasked the Secretary of State for Trade and Industry how much in regional grant aid has been made available to the northern region since 1979.
    Mr. Peter Morrison: A total of £913 million in regional grant aid has been made available to the northern region during the period I May 1979 to 30 November 1985.
    Mr. Merchant: Will my hon. Friend take this opportunity to reaffirm his personal commitment to beneficial regional aid? Does he agree that his answer gives the lie to those who claim maliciously that the Government have ignored and not helped the northern region? Will he confirm that the Government have given more than £1 billion to the northern region, including inner city aid?
    Mr. Morrison: I entirely agree with my hon. Friend. The northern region benefits more than any other part of the country from our regional policy, and rightly so. Some 97 per cent. of the working population are covered. My hon. Friend's sentiments are correct, whatever anyone else might say.
    Mr. Nicholas Brown: Does the Minister agree that, since 1979, 125,000 industrial jobs have been lost in the northern region and that the level of unemployment on Tyneside is among the highest in the country? Can he at least give us the assurance that aid from his Department to the northern region will not be reduced in the next three years?
    Mr. Morrison: As I said in reply to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant), the difficulties that the northern region is passing through are onerous, burdensome and personally unappetising to many families and people. That is why our regional policy is directed more towards the northern region than to any other part of Great Britain.
    Mr. Fallon: Does my hon. Friend agree that an the 1970s the northern region suffered from indiscriminate regional aid? Can he confirm that the new policy is working well and providing more jobs with the money used?
    Mr. Morrison: I agree. When my right hon. Friend the previous Secretary of State announced the new regional policy, it was directed towards job creation. That has to be the right way in which to target considerable sums of money.
    Mr. Campbell-Savours: Will the Minister confirm that in real terms there has been a reduction in regional assistance to the northern region since 1979, although there has been an explosion in unemployment? Will he answer the question yes or no? We do not want a flannel answer?
    Mr. Morrison: I shall answer yes, but I hope that the hon. Gentleman will allow me to qualify my answer to the extent that the money, which is still considerable, is now being targeted much more towards job creation.
    Mr. Beith: Did the Minister note the remarks of the retiring regional director of his own Department on unemployment? He expressed disquiet over the point that, in London, it seemed that if there were no riots in an area, there were no problems. Did the Minister agree with the emphasis that the regional director put on the need for public sector spending in the north-east? Does he fear that if something is not done we shall merely store up trouble for the future?
    Mr. Morrison: I did not see Mr. Atkinson's remarks, but I do not agree with them precisely, as presented by the hon. Gentleman. The northern region gets more regional aid than other parts of the country, in some of which there have been riots.
    Mr. Holt: In view of the failure of the Ministry of Agriculture, Fisheries and Food to locate Cleveland on the map, and in view of the failure of the Department of the Environment to decide how big the county of Cleveland is, and despite the Government's generosity so far in the northern region, will my hon. Friend confirm that, as the question relates to the availability of money, if any schemes from Cleveland are put forward the Government will not be ungenerous but will consider them sympathetically?
    Mr. Morrison: Regardless of what my hon. Friend says about Cleveland, he can rest assured that the county of Cleveland is well put on the map, by himself, constantly. The level of money given out depends on the number of applications. I shall be delighted to consider as many applications as I can.
    Mr. Ryman: The Minister has not been in the Department for very long, so he may not be fully briefed. Does he not appreciate that the origin of the trouble is that in 1979 the then Conservative Secretary of State for Trade abolished the special development area status of Blyth Valley, which includes Blyth and Cramlington. so wrongly earmarking regional aid? Consequently unemployment in Blyth Valley has risen astronomically as a direct result of the asinine regional policy of the Conservative Government.
    Mr. Morrison: I am well aware that the hon. Gentleman puts forward the case of his constituents assiduously. I know Cramlington, Blyth and Blyth Valley.

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    Unless I am gravely mistaken—and the hon. Gentleman will correct me immediately if I am—he will be aware that his part of the country gets regional aid to the greatest extent that is still possible.
    Mr. Neil Hamilton: Is my hon. Friend aware that in the recent review of regional policy his constituency was included in the map for selective assistance and mine was excluded—
    Mr. Speaker: Order. Is the hon. Gentleman's constituency in the north?
    Mr. Hamilton: Yes. Can my hon. Friend tell me what advantage might accrue from increasing unemployment in my constituency so as to reduce it in his own?
    Mr. Morrison: I am aware of the situation that my hon. Friend mentions because he and I have constituencies at either end of Cheshire. As he will be aware, the decisions were taken quite a substantial time before I became Minister of State.
    Mr. O'Neill: Does the Minister agree that the year to year figures for regional aid prove that the real value of regional aid has not just been cut in the northern region since 1979 but has been halved, as it has in every other depressed region? When will the Minister of State bring to the House the review proposals on regional aid that were promised by the Secretary of State for Trade and Industry? When will the Government start increasing regional aid instead of continuing over the next three years their policy of making cuts?
    Mr. Morrison: As I have said to other hon. Members, regional aid policy is now directed specifically towards job creation. As to when the review will be brought to the House, the answer is that it will be conducted during the year. The policy has been in existence for only 12 months. I cannot tell the hon. Member precisely when the review results will be ready. I hope that it will be towards the end of the year, but I cannot be held to that at this stage.
    Mr. Wrigglesworth: As the figure given by the Minister earlier contains a concealed dramatic decline in support for the northern region during the Government's term of office at a time when there has been an equally dramatic increase in unemployment, and as the number of grants depends upon the number of applications, can the Minister tell us what his Department proposes to do to increase the number of applications from the northern region and to increase the number of new businesses created there?
    Mr. Morrison: The hon. Gentleman will be aware that my right hon. and learned Friend the Secretary of State has made a particular issue of regional aid. He has made it abundantly clear to all and sundry that he is keen that there should be as many applications as possible. That is the message that has gone out to all regional offices, including the northern region.

    Books (Piracy)
    Mr. Baldryasked the Secretary of State for Trade and Industry what steps Her Majesty's Government are taking to curtail overseas piracy of books published in Britain; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): The
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    Government take every opportunity they can to press upon countries where piracy of British books is permitted to flourish the need for comprehensive and enforceable copyright law. We are in contact with several such countries on this issue at the present time and the European Community is in the process of detailed consideration of the link between intellectual property and trade policy as part of the Community's preparation for a new GATT round.
    Mr. Baldry: I thank my hon. and learned Friend for his reply. The Governments of South Korea and Signapore are at present actively considering fresh copyright legislation. What steps are the Government taking to ensure that such legislation adequately protects the interests of British publishers?
    Mr. Howard: We have recently written to the Government of Singapore suggesting some modifications to the first draft of the new copyright law that authorities have produced in that country. We are monitoring developments in South Korea and we shall make representations if it seems that that will be useful.

    Semi-finished Steel Products
    Mr. Cashasked the Secretary of State for Trade and Industry what are the prospects for exports of semifinished steel products; and if he will make a statement.
    Mr. Peter Morrison: United Kingdom steel producers export semi-finished products to many countries, and prospects in most of them remain broadly unchanged. However, I am pleased to say that exports to the United States should increase substantially under the British Steel Corporation's contract with the Tuscaloosa Steel Corporation of Alabama.
    Mr. Cash: Does my hon. Friend accept that, arising out of the minutes that have just been placed in the Library of a meeting with Sir Raymond Lygo, it is a matter of first importance, as my right and learned Friend the Secretary of State is reported as having said, to ensure that in relations with the United States, especially when dealing with semi-finished steel products, we avoid anti-British protection sentiments in the United States of America?
    Mr. Morrison: As I said in reply to an earlier question, when I think my hon. Friend was in his place, the negotiations on the deal with the United States Government over the Tuscaloosa Steel Corporation were extremely difficult. As my hon. Friend is aware, there is a protectionist wave that is evident throughout the United States. All such negotiations have to be handled carefully. Anti-American sentiments can endanger them.

    Johnson Matthey Bankers
    Mr. Dalyellasked the Secretary of State for Trade and Industry when the most recent annual return and accounts of Johnson Matthey Bankers Limited were received at Companies House.
    Mr. Howard: Accounts for the period ending 30 June 1985 were delivered to the registrar on 20 December 1985, and an annual return for 1985 was delivered on 31 December 1985.
    Mr. Dalyell: Following the experience of the Johnson Matthey affair, what have Trade Ministers learnt about the operational efficiency of the supervisory authority?
    Mr. Howard: My right hon. Friend the Chancellor has announced a review of banking supervision, which it is hoped will remedy the deficiencies that were revealed by the events at Johnson Matthey.
    Mr. Skinner: Is the Minister happy about the developments that are taking place in the Johnson Matthey business that relate to the accounts? What steps are the Government taking to ensure that the accounts are in a much healthier state, by dealing with people such as Mr. Sipra, who is in India and who owes Johnson Matthey about £70 million? Will he be brought back to this country so that he can repay some of that money? What steps are the Government taking? If they took steps to bring Mr. Sipra and others back to Britain, they might recover some of the money.
    Mr. Howard: The House will be aware that the Johnson Matthey matters are under investigation by the police. The fraud investigation group has been established. As for compliance with the law on the submission of accounts, there has been a substantial improvement over the position in recent years.

    Lloyd's (Regulation)
    Mr. Fatchettasked the Secretary of State for Trade and Industry if he will make a statement on the regulation of Lloyd's.
    Mr. Brittan: My hon. and learned Friend, the Parliamentary Under-Secretary of State with responsibility for corporate and consumer affairs, and I dealt with this matter yesterday during the debate on the Second Reading of the Financial Services Bill. I have nothing to add now.
    Mr. Fatchett: In the context of the inquiry that the Secretary of State established last week, will he assure the House that the inquiry will be completed before the Financial Services Bill completes its passage through the House? If any recommendations are made by those who carry out the inquiry, will the Committee that considers the Financial Services Bill, or the House, have sufficient time to act upon them and to implement them if necessary?
    Mr. Brittan: I cannot give that assurance. That is a matter for Sir Patrick Neill. He has suggested that he would hope to complete the inquiry in the summer. My hon. and learned Friend has said clearly that we do not think that it is at all likely that the Financial Services Bill would be a proper vehicle for statutory intervention, even if Sir Patrick came to the conclusion that further statutory intervention would be appropriate.
    Mr. Gould: As the Minister responsible for the Financial Services Bill and for the decision whether Lloyd's should be included within it—the Under-Secretary of State for Trade and Industry, the hon. and learned Member for Folkestone and Hythe (Mr. Howard)—is involved in a clear conflict of interest in this respect, may I ask whether the Secretary of State's attention has been drawn to the Churchill-Butler statement on these matters—a statement of principle that has been endorsed by a long line of Prime Ministers—which reads as follows:
    "It is a principle of public life that Ministers must"—
    Mr. Speaker: Order. The hon. Member must paraphrase, not quote.
    Mr. Gould: Very well, I will paraphrase the statement of principle, to the effect that where there is a conflict between a Minister's private interests and public responsibilities he must divest himself of those private interests. Given that the Parliamentary Under-Secretary is able to divest himself of his membership of Lloyd's, as I am advised, will the Secretary of State ensure that he either does that or passes the responsibility for the Bill to another Minister?
    Mr. Brittan: We have looked into this matter and explained it, and I am perfectly satisfied that my hon. arid learned Friend is well able to discharge his responsibilities with complete propriety.

    Ravenscraig Steelworks
    Mr. Wallaceasked the Secretary of State for Trade and Industry what representations he has received concerning Ravenscraig steelworks; and if he will make a statement.
    Mr. Peter Morrison: My right hon. and learned Friend and I have received a number of written and oral representations about Ravenscraig steelworks in the context of BSC's decision to close the Gartcosh works. Earlier today I replied on behalf of the Government, to the recommendations of the Select Committee on Scottish Affairs relating to Gartcosh. In that reply I stated that, having examined closely the recommendations and evidence, I remained of the opinion that the Government should not interfere with BSC's decision to close Gartcosh.
    Mr. Wallace: Will the Minister accept, as the overwhelming majority of Scottish opinion accepts, that the future of Ravenscraig is inextricably bound up with that of Gartcosh, and that any long-term guarantee to Ravenscraig would be meaningful and worthwhile only if it were extended to the Gartcosh plant? Notwithstanding the reply that he gave to the Select Committee on Scottish Affairs this morning, may I ask him to look at the figures now produced by the Scottish Trades Union Congress on recent trends and figures for markets for the steel produced there and to reconsider his decision, which is very damaging to Scotland and its industry, in the light of this new evidence?
    Mr. Morrison: I can, of course, appreciate what the hon. Gentleman says. There is very significant feeling in Scotland about Gartcosh and Ravenscraig. That is why we looked carefully indeed at all the evidence put to us. Having done so, we came to the conclusion that the decision of the British Steel Corporation on its future strategy, which was endorsed by the Government in August, should not be undermined.
    Mr. Ewing: How can the Minister honestly say that he has considered all the evidence and has come to the conclusion that he has reached when the evidence is all against his determination to bring about the closure of Gartcosh? How can the Minister condone a situation where the Government are prepared to spend nearly £10 million a year to keep Scottish workers unemployed when they could be investing that kind of money in the steel industry, not only of Scotland, but of the whole of the United Kingdom?
    Mr. Morrison: It is not for me to publish my reply' to the Select Committee in which I gave the reasons for the

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    Government's decision not to intervene in this particular matter, although I am sure that the hon. Member will understand them when he sees it. I perfectly understand that there is very strong feeling in Scotland about Gartcosh, but the hon. Member will be aware that there is overcapacity in the kinds of products made by Gartcosh. He will also be aware of the argument which says that Gartcosh and Ravenscraig are not inextricably connected.
    Mr. Hickmet: Does my hon. Friend agree that, in its attempts to survive, the British Steel Corporation, for the past three or four years, has had to take very difficult decisions involving the redundancy of many thousands of men? Now, when the corporation is profitable, excess capacity is being removed and, for the first time for many years, the corporation finds itself the most competitive steel producer in Europe, is it fair that the steel workers in Scotland should be exempted from some of the very difficult decisions that have had to be taken throughout the country, including in my own constituency, where 11,000 men have lost their jobs in two years?
    Mr. Morrison: I certainly agree that enormous progress has been made by BSC management and the trade unions within the corporation to make it into the most efficient steel corporation in Europe. I differ a little from my hon. Friend. I fully appreciated the fact that, in the short term at least, closure brings a bleak future for the 800 or so employees at Gartcosh and their families. It was in that context that I took my decision. I do not welcome taking such decisions.
    Mr. Strang: Is the hon. Gentleman aware that there is a lobby in the House of Commons today, representative of all walks of life in Scotland, to meet representatives from all parties in the House? Is he further aware that that lobby is clearly saying that the future of Gartcosh is crucial to the future of Ravenscraig, and that the future of Ravenscraig is vital to Scotland's future as an industrial nation? Will the hon. Gentleman recognise that Gartcosh is Scotland's industrial El Alamein and that it must stay open, even if that means driving every Tory out of Scotland?
    Mr. Morrison: Of course I realise that there is a lobby in the House today. Of course I realise also that there has been a consistent campaign. I am aware also that several representatives of the work force walked the whole way from Gartcosh to London. The hon. Gentleman should be aware that the very same representatives have had an opportunity to see me, which they requested, since the middle of October. That invitation has been extended, further extended and further extended again, and they did not decide to put their case. I wonder why.
    Mr. John Smith: Did the hon. Gentleman advise the Prime Minister to see the delegation that had walked all the way from Gartcosh? Why did she snub those representatives by refusing even to meet them when the request was put? Is the hon. Gentleman aware that there have been few issues in recent times on which majority opinion has been rallied more successfully than in the campaign to save Gartcosh? Why do the Government intervene in the Ravenscraig matter on an explicit political basis and claim credit for it, yet seem totally unable to intervene in the Gartcosh matter?
    Mr. Morrison: I made it quite clear to my right hon. Friend the Prime Minister that my door was open to see
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    the representatives of the work force, as it had been for more than three months. It seemed unusual, to put it mildly, that they did not take advantage of that. My door remained open. The right hon. and learned Gentleman is well aware of the fundamental difference between Gartcosh and Ravenscraig—[Interruption]—in terms of BSC's strategy.
    Mr. Speaker: Order. I fully understand and appreciate that there is an important debate to follow Question Time, but Question Time is important to those hon. Members with questions on the Order Paper.

    European Community
    Mr. Brightasked the Secretary of State for Trade and Industry what further progress has been made in opening up the internal market of the European Community.
    The Minister for Information Technology (Mr. Geoffrey Pattie): During the last six months the Council has agreed a number of measures which should facilitate the free movement of goods and services within the Community. The Internal Market Council of 12 December endorsed a detailed programme of action for the Netherlands and United Kingdom Presidencies with the aim of securing the adoption of a large number of further measures in 1986. A copy of this programme is in the Library of the House.
    Mr. Bright: In what respects does my hon. Friend think that the most progress will be made to the benefit of the United Kingdom, especially with respect to small businesses, which still find that some of the obstacles put in their way when exporting to Europe are difficult to overcome?
    Mr. Pattie: The Council has adopted a directive liberalising the marketing of unit trusts, co-ordinating national customs, computer developments and reducing clearance times at internal frontiers. My right hon. Friend the Prime Minister has taken an initiative that will ensure that all new proposals emanating from the Commission will be scrutinised with respect to the burdens that they will place on small businesses.
    Mr. Nellist: Does the opening of the internal market of the European Community include consortiums for the production of helicopters? If so, will the hon. Gentleman advise workers at Westland not to accept job guarantees from the leaders of such a consortium, especially as Lord Weinstock, the leader of GEC, axed 1,000 jobs in Coventry, South-East just before Christmas? Will the hon. Gentleman advise them that they cannot believe the truth of such a spokesman for a European consortium?
    Mr. Pattie: The hon. Gentleman should be aware that defence procurement measures, which are largely what are involved in the Westland case, do not come within the purview of the Commission.
    Sir Brandon Rhys Williams: Does the Department recognise that for Londoners and the whole British economy the most important aspect of this process is the achievement of a fully integrated European market for capital over the whole range of financial services, with London playing its proper pre-eminent part?
    Mr. Pattie: Yes.

    W. G. Allen (Tipton) Ltd.
    Mr. John Mark Taylorasked the Secretary of State for Trade and Industry what representations he has received about the conduct of the liquidator of W. G. Allen (Tipton) Ltd.
    Mr. Howard: I understand that my hon. Friend is referring to W. G. Allen & Sons (Tipton) plc. which is in receivership, not in liquidation. My hon. Friend has drawn my attention in the last few days to a number of points. I am considering them to see whether exercise of my Department's investigative powers is warranted.
    Mr. Taylor: In thanking my hon. and learned Friend for that reply and noting that he is to look into the matter, may I ask him to pay due attention to shareholder concern about inaccuracies in letters from the stock exchange, and the fact that a statement of affairs is still awaited? This company failed within three months of having a clean auditor's report. There seems to be some conflict of interest. Will my hon. and learned Friend bear those things in mind?
    Mr. Howard: I shall take all those matters into account.

    China
    Mr. William Powellasked the Secretary of State for Trade and Industry if he will make a statement on trading prospects with China.
    Mr. Channon: There are good prospects for steady growth in our trade with China, which has substantially increased in the last two years.
    Mr. Powell: Will my right hon. Friend confirm that China will be able to benefit from the substantial increases in the soft loan facilities which the Secretary of State should be able to announce? When does he expect that such loans will become available for China?
    Mr. Channon: We have already told the Chinese Government that in principle we are prepared to offer soft loans for project business. We had preliminary talks with them, and it will not be long before some of them come to fruition.

    Services (Trade Liberalisation)
    Mr. Hanleyasked the Secretary of State for Trade and Industry what progress is being make in his talks on liberalising international trade in services.
    Mr. Channon: The GATT contracting parties agreed at their meeting in November to set up the preparatory process for a new round in which the British Government think it essential that all relevant topics, including trade in services, should be included. Meanwhile, the United Kingdom continues to press for completion of the Community's internal market in services as in goods.
    Mr. Hanley: I had always understood that one of the main objectives of the European Community was freedom of trade by the removal of restrictive trade practices. Will my right hon. Friend give me some idea of when the current dispute over the German insurance market might be resolved and the possible prospects for the British insurance market when that has occurred?
    Mr. Channon: It will, of course, depend upon the decision of the court. I hope that the court decision in the
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    German case will be made in the not too distant future, and that it will be in favour of the position that we have adopted. Before long that would lead to substantial progress being made in this area.

    South Africa
    Mr. Flanneryasked the Secretary of State for Trade and Industry what volume of trade in cash terms was conducted with South Africa in 1983, 1984 and 1985, respectively (a) in imports and (b) in exports.
    Mr. Channon: The value of United Kingdom imports from South Africa were £765 million in 1983, £726 million in 1984 and £914 million in the first 11 months of 1985. The corresponding figures for exports were £1,111 million £1,204 million and £933 million respectively.
    Mr. Flannery: Is that not a comment on the political efforts of this Government at a time when apartheid in South Africa is grinding the whole of southern Africa into confusion? People are being shot down daily — [Interruption.]—murdered all over the place, because they are asking for some kind of equality. Why do we not take a leaf out of the American book and exert some pressure on that Government and make it clear to them that we are not willing to flourish while people are held in such miserable subjection in that country?
    Mr. Channon: I disagree with the hon. Gentleman's analysis of events. No one dislikes apartheid more than do my hon. Friends and myself. One of the major forces for reform in South Africa has been the activities of industry, and in particular British industry, in improving conditions for black workers in South Africa and protecting jobs both here and there over the past few years.
    Mr. Hill: Does my right hon. Friend agree that more publicity should be given to the number of jobs that rely on South African trade—in particular, the work that we do in the port of Southampton—and to the fact that many workers take the realistic view that South African trade provides their livelihood? Is it not the case that any way in which we can expand trade with South Africa would be good for this country's work force?
    Mr. Channon: My hon. Friend is right to point that out. There are probably hundreds of thousands of jobs in this country that depend upon trade with South Africa, and many thousands of jobs—including many among the black workers—in South Africa.
    Mr. Nellist rose—
    Mr. Madden rose—
    Mr. Speaker: Order. I shall take points of order arising directly out of questions.
    Mr. Madden: On a point of order, Mr. Speaker.
    Mr. Speaker: Arising directly out of questions?
    Mr. Madden: Indeed, Mr. Speaker. I ask you to reflect on your ruling about question 1 today. It involved the CBI and the regulation of financial services. You will recollect that you asked my hon. Friend the Member for Dagenham (Mr. Gould) and other hon. Members who wanted to ask questions about Lloyd's to desist. If your ruling stands, it would seem that in future you are prepared to accept questions about Lloyd's only if the question refers to

    1075
    Lloyd's, such as question 14. As it is an important matter, I ask whether you would reflect on the matter and give the House your advice.
    Mr. Speaker: Order. I can say to the hon. Member straight away that I reflected when the question was first put. I knew perfectly well that question 14 on the Order Paper was the question on which these matters should properly be raised.
    Mr. Nellist: On a point of order arising out of Question Time, Mr. Speaker. Would you consider later today expressing your sympathy, on behalf of the Opposition, with the Secretary of State for Trade and Industry for the fact that, following his loss of his memory yesterday, he has lost his voice this afternoon? He answered only two questions.
    Mr. Speaker: Order. I have lost my voice as well.

Solicitor-General (Letter)
3.32 pm
Mr. Tam Dalyell: On a point of order, Mr. Speaker. May I ask your help with a matter, about which I gave you notice this morning, relating to documents for the coming debate? It may be within the recollection of the House that on 6 January the Law Officers wrote a letter to the right hon. Member for Henley (Mr. Heseltine). It was partly and selectively leaked. For the purposes of greater accuracy, I went to the Library this morning to ask for the complete letter so that one could look at it in full and not selectively. The Library, with its normal efficiency and courtesy, found that it did not have the letter. The Library then rang the Law Officers' Department, which said that higher authority would have to be consulted before it could give me the letter. When higher authority was consulted, lo and behold, the letter was not forthcoming. The House does not have the full text of that letter. It is extremely unsatisfactory to make decisions or speeches on the basis of selectively leaked letters. I wonder whether there is any way in which you can manage to get before the House the full text of the letter written by the Law Officers and sent to the former Secretary of State for Defence.
Mr. Speaker: Order. I cannot help the hon. Member. Whether the Government choose to put a letter before the House is entirely a matter for them. I believe that the Leader of the House wishes to say something.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): So that we may keep these matters in perspective, may I say that in no sense do I represent higher authority. The House will appreciate that there are conventions relating to advice from the Law Officers. I can inform the House that the Solicitor-General has authorised publication of his letter of 6 January to the then Secretary of State for Defence, and arrangements are being made for it to be made available to the House later this afternoon.

Cruelty to Animals (Amendment)
3.34 pm
Mr. Harry Cohen (Leyton): I beg to move,
That leave be given to bring in a Bill to prohibit all tests of cosmetics, tobacco and alcohol and similar experiments on animals; to prohibit the draize eye irritancy test and the I.D50 poisoning test; to prohibit behavioural and psychological experiments on animals; to prevent use of animals in warfare trials or experiments; to abolish the practices of hare coursing, and fox and stag hunting; to prohibit the use of domestic animals in animal experiments; to increase the penalties for convictions of causing, procuring or assisting at the fighting or baiting of dogs, cats or other domestic animals; to ban the import and sale of bull terriers and the advertising of fighting dogs for sale, including the advertising of qualities related to fighting; to regulate laboratories in which animals are bred; to reconstitute the Advisory Committee on Animal Experiments; and to promote alternatives to animal experiments.
I stress that there is no connection between this matter and the next item of House of Commons business. [Interruption.]
Mr. Speaker: Order. The hon. Member has every right to be heard.
Mr. Cohen: I am pleased, Mr. Speaker, that this large gathering today is concerned with animal rights. The British enjoy a reputation as animal lovers. That reputation, I fear, exists more in the hearts and minds of decent British people than in the practices that are embodied in the law of the land.
The shameful reality is that 110 years have passed without improvements to the Cruelty to Animals Act 1876. My Bill seeks to bring the law closer to public perceptions of our humanitarian protection towards animals, and to distance future legislation as far as possible from the barbaric brutality allowed at present. In so doing, my proposals run counter to the Conservative Government's legislative intentions on this matter, which are to afford less protection to animals while employing a deft legislative "newspeak" to hoodwink and placate public opinion.
The Government are too squeamish to use the word "experiment" and have substituted the word "procedure" to ensure that public sensitivities are not offended while appalling cruelty to animals will actually be allowed to increase. This is a betrayal of the public's heartfelt wish to provide proper rights for animals, to see an end to barbaric blood sports and to end unnecessary animal experiments.
My Bill puts a stop to the obscenity of killing animals in the name of sport by abolishing the practices of hare coursing, fox and stag hunting. This is a Labour party policy which I should like to see enacted immediately. To their shame, the Conservative Government have twice overruled the Northern Ireland Assembly's unanimous votes to outlaw hare coursing. Perhaps this tendency to override public and parliamentary opinion will diminish somewhat when the Government are reminded that a recent poll of Conservative voters showed a majority opposed to all forms of hunting. The measure that I propose not only puts a stop to the rights of sadists to enjoy the fun of the kill while devastating our countryside but also sorts out their less well heeled blood brothers who support dog fighting. In line with RSPCA policy, my Bill would substantially increase penalties for convictions for causing, procuring, assisting or aiding and abetting at the fighting or baiting of dogs, cats and other domestic

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animals. It would also ban the import and sale of pit bull terriers and the advertising of fighting dogs for sale, including qualities related to fighting.
There should be stiff prison sentences for those indulging in dog fighting. The traffic in domestic animals for animal experiments must be halted. This shady enterprise is such big business in residential areas that pet shop owners in my constituency display notices warning animal owners to keep their pets under constant surveillance. What are we to make of the standing of scientific establishments which apparently fail to notice that their stock of animals for experiments consists of every breed under the sun, obviously tamed for domestic life and pining for human contact? Such establishments should have their licences withdrawn instantaneously and permanently. My Bill ensures that laboratories may obtain animals of specified breeds only from licensed breeders who can produce proper evidence of the legitimate origin of these animals. In addition, breeding establishments will be subject to regular and spot inspection and the export of animals will be banned.
The obscenity of current animal experimentation in which over 67,000 animals are killed every week is tackled in my Bill. My objective is to see animal experiments phased out within a decade. However, the overwhelming majority of tests could be abolished immediately, starting with a ban on all animal tests for cosmetics, tobacco and alcohol. The Bill would also immediately end the Draize eye test where irritants are administered without pain relief until the animal's eye bursts. The LD50 test, whereby animals are painfully poisoned until 50 per cent. of them die, would also go. In line with the Labour parliamentary campaign group for animal rights, there would be a prohibition on the use of animals in warfare trials in which they are deliberately shot at, irradiated and subjected to germ and chemical warfare. Behavioural and psychological tests on animals in which they are deliberately driven to madness for so-called "insights" into human psychosis will also cease.
At present, the Government employ 15 inspectors to check on the 21,000 vivisectionists who cut up three million animals each year. That ludicrous situation will be transformed under my Bill as a result of greater powers for the Home Office advisory committee. At present the committee is packed with either licensed experimenters or pro-vivisectionists, including Dr. Coid, the doctor responsible for designing the primate cages which featured so infamously in the recent prosecution of the Royal College of Surgeons. It is essential that the independence of the committee should be firmly established, with membership consisting of persons with a knowledge of the subject but no vested interest whatsoever by way of monetary gain or job dependency. The primary function of the committee will be the responsibility for securing a continuing and sizeable decrease annually in animal usage in laboratories.
1080
The new independent composition of the advisory committee will also free its decision-making processes from the undue influences of the drug companies. As the Sunday People so accurately observed:
"The name of the game is profit and to hell with animal suffering".
Research into disease prevention has been passed up because drug companies prefer animal experiments for their latest wonder cures. Thus, animals suffer in their millions as drug companies race to develop so-called "new" products, most of which are simple recombinations of other brands, an increasing number dangerous to humans—such as Thalidomide, Eraldin and Opren. Tackling causes and the prevention of illness are not as profitable as "cures", even if the latter means countless unnecessary human and animal deaths in the process. Yet, the Research Defence Committee, a pro-vivisection group funded by the drug and cosmetic multinationals, confidently assesses the Conservative Government's new legislation with the comment:
"I cannot think of a single experiment allowed now that will not be allowed in future."
Medical research which is so bound up with the fortunes of drug companies lacks any incentive to develop alternative research. The Conservative Government, as the political voice of big business, ensure that the purse strings of state research remain controlled by the vivisectionists. They have allocated a derisory £200,000 over three years for the consideration of alternatives to animal experiments. In this scenario, human life is indeed held cheap, while animal protection counts for nothing. In conclusion, my Bill forces the parliamentary, scientific and commercial establishment to face up to the failure of their endless experiments on animals, to take account of the horrendous issue of assessing the pain and suffering endured by animals, while at the same time insisting upon medical research to follow a more civilised and effective path by using non-animal alternatives. My proposals, not the Government's, are more in tune with what the public want.
This Bill, not the Government's, recognises and responds with genuine measures to meet the growing public disquiet about animal experimentation and barbaric sports. My Bill is a Socialist measure aimed to uphold the value of human life, to free sport from a sordid blood lust and provide protection and rights for animals. It is an essential element towards the achievement of a safe and healthy environment for all living creatures in a civilised society. As Labour's programme says:
"We are partners on this planet with animals, not their masters."
Question put and agreed to.
Bill ordered to be brought in by Mr. Harry Cohen, Mr. Tony Banks, Mr. Jeremy Corbyn, Mr. Brian Sedgemore, Mr. Roland Boyes, Ms. Jo Richardson, Mr. Doug Hoyle, Mr. Allan Rogers, Mr. James Lamond, Miss Joan Maynard, Mr. Martin Flannery and Mr. Robert N. Wareing.

CRUELTY TO ANIMALS (AMENDMENT)
Mr. Harry Cohen accordingly presented a Bill to prohibit all tests of cosmetics, tobacco and alcohol and similar experiments on animals; to prohibit the draize eye irritancy test and the LD50 poisoning test; to prohibit behavioural and psychological experiments on animals; to prevent use of animals in warfare trials or experiments; to abolish the practices of hare coursing, and fox and stag hunting; to prohibit the use of domestic animals in animal experiments; to increase the penalties for convictions of causing, procuring or assisting at the fighting or baiting of dogs, cats or other domestic animals; to ban the import and sale of bull terriers and the advertising of fighting dogs for sale, including the advertising of qualities related to fighting; to regulate laboratories in which animals are bred; to reconstitute the Advisory Committee on Animal Experiments; and to promote alternatives to animal experiments: And the same was read the First time; and ordered to be read a Second time upon Friday 7 February and to be printed. [Bill 58.]
Opposition Day
[3RD ALLOTTED DAY]
Opposition Day

  Westland plc
  Mr. Speaker: Before we embark upon this important debate I must announce to the House that I have selected the amendment in the name of the Prime Minister.
  3.45 pm
  Mr. Neil Kinnock: I beg to move,
  That this House, noting the serious allegations made in public by the former Secretary of State for Defence, the Right honourable Member for Henley, about the conduct of the Government in respect of Westland plc, and aware of the major implications for defence procurement, manufacturing industry, technology and employment, calls on Her Majesty's Government to make arrangements to set up a Committee of the House to consider the issues raised by the matter, ensuring that such a Committee would be provided with all the relevant documents and letters, many of which have been publicly referred to but not yet published, in order to establish for the nation a truthful record of the events relating to the present and future position of Westland plc.
  This debate is about helicopter manufacture and the industries related to it. It is about technology and certainly about employment. It is, a debate about defence procurement policies and about European co-operation. Indeed, it has now apparently become an issue which affects the stability of interest rates.
  The debate on Westland plc is about all those things, but most of all it is about something even more elementary, even more basic in our political life. For I consider that the debate most of all is about the truth; that is why, despite her reluctance to come to the House to make a statement, it was essential that we secured the presence of the Prime Minister to speak in the debate today. It is not just because of the complete collision of testimony about Government conduct in relation to the affairs of Westland plc, nor indeed because the right hon. Lady has ultimate responsibility for all the activities of Government; it is mainly because of the right hon. Lady's particular system of rule and her particular involvement in the issue of Westland plc.
  That the Prime Minister is domineering is not a matter of contention or doubt. The whole country knows that. Indeed, there is a growing entertainment industry based entirely upon that fact. What is less obvious and much more serious is that that domineering attitude in a system of Cabinet government in a democratic country has enormous effects on the whole course and style of the way in which our country is governed.
  In such a system of Cabinet government it is simply not possible to dominate absolutely and continually on the merits of argument because there are always other good arguments in fair contention. Nor is it possible to dominate always by patronage or even by petulance. To dominate absolutely it is necessary for the domineering to employ other techniques, and plainly they include tactics which go well beyond the bounds of clever politics and become systematic connivance against Cabinet colleagues for the purpose of achieving a particular end.
  When those people who will not concede to domination or bullying or will not back down, really make up their minds they must be undermined, isolated or bypassed. The

  1083
  right hon. Lady has had some success with the system of rule by overrule because she has taken the precaution, generally speaking, of surrounding herself with some jelloid Ministers. But sooner or later someone was bound to resist, even to the point of resignation, and that day arrived last Thursday.
  In the course of that resignation the right hon. Member for Henley (Mr. Heseltine) made some serious charges about the conduct and course of the Government. His charges relate mainly to the events on 4 and 18 October; 4, 5, and 9 December; 11 and 12 December; 30 and 31 December; 6 January, when the Solicitor-General entered the fray; and the 8 January meeting between the Secretary of State for Trade and Industry and Sir Raymond Lygo, chief executive of British Aerospace.
  Those charges made by the right hon. Gentleman must be answered in detail by the Prime Minister today. Some of them should be easy to deal with if they are false or at all misleading. For instance, the right hon. Lady can determine the veracity of the right hon. Gentleman about the minutes of meetings on 4 and 18 October, to which she has continually referred, by publishing those minutes, including all the details of the meetings that took place and the consideration that took place. It would not be a great leap out of security or secrecy for her to do so.
  Before Christmas, sections of the minutes of the 4 October meeting were freely discussed and quoted in the press. Last Monday night, on "Panorama", the minutes of the 18 October meeting were quoted in part. Indeed, The Times on 14 January reported that the Government
  "took the unprecedented step of quoting from the minutes of two ad hoc meetings of ministers held on December 4 and 5 in an attempt to undermine Mr. Heseltine's resignation statement."
  Therefore, it cannot be too much to ask that the same treatment is given to the minutes of other ad hoc meetings in October.
  In his resignation statement, the right hon. Member for Henley alleged that, after his efforts in November—undertaken at least with the acquiesence of the Government—to secure a recommendation from the European national armament directors to extend the 1978 declaration on helicopter procurement, he encountered unexpected and strong opposition to his views at an ad hoc ministerial meeting on 4 December, and then at another on 5 December. He encountered further strong resistance at the Economic Committee meeting on 9 December, so he tells us, and that opposition came not from the Secretary of State for Trade and Industry but from the Prime Minister. It appears that that opposition was based on the right hon. Lady's efforts to set aside the recommendation of the national armaments directors that the right hon. Gentleman had painstakingly accumulated in the days at the end of November.
  I must ask the Prime Minister why she took that course at those meetings and why she has pursued that course so avidly. I must ask her the question that The Times put yesterday, about
  "why, and in what circumstances, the decision of the national armaments directors in favour of European helicopter procurement was set aside."
  The Times continued:
  "Was it merely not endorsed, as Downing Street would have us believe, or deliberately shelved, as Mr. Heseltine argues? If it was shelved why was it shelved? Mrs. Thatcher has to give the House the clearest possible answer on this point. It is naive to think that there is something as simple as non-intervention in
  1084
  matters of this kind, particularly where the Government is so important a customer of the company concerned. But it is evenhandedness that is the Government's claim in the Westland affair. Mrs. Thatcher needs to explain exactly how her administration's practice matched its rhetoric."
  There are three crucial questions. First, why was the policy adopted? Was it through the persuasiveness of Sir John Cuckney, with all the great weight of his experience and expertise? Was it, as has been alleged, to do with the strategic defence initiative, or with an anti-European sentiment or for some other reason? We need to know that, and this House and the country deserve to know that.
  Secondly, how was the policy adopted without the benefit of collective decision by the Cabinet, which plainly was the case?
  Thirdly, how does practice in the privacy of Government match the public declarations to this House and to the country about the Government's policy? The right hon. Member for Henley says that there is no match; he says that there is no connection between private machinations and public declarations. Someone, he plainly implies, has been telling the truth; someone has not been telling the truth.
  The right hon. Gentleman says that there was an even-handed policy for public display and a private policy of favouritism for actual use. That is a very grave allegation, but like so many others it could be easily disproved if it were false or even inaccurate. It would be supreme folly for the right hon. Gentleman to make such charges if they could not be substantiated. So I ask the Prime Minister whether the circumstances of 4 and 18 October and of 4, 5 and 9 December were as the right hon. Gentleman has alleged. She can tell us. She can prove or disprove what he said and she must do one or the other.
  Much the same applies to the E Committee meeting of 9 December. There are two versions of events. From the right hon. Member for Henley we hear that it was an inconclusive meeting that did not resolve policy and which decided that there should be a further meeting on 13 December. From the Secretary of State for Trade and Industry we hear, in answer to my colleagues, my hon. Friends the Members for Monklands, West (Mr. Clarke) and for Birmingham, Perry Barr (Mr. Rooker), that the 9 December meeting was a conclusive meeting which resolved policy and set a deadline of 13 December for the European submission.
  These are the two versions. They are in stark conflict and collision, one with another. All that we have to rely on to make up our minds at this stage is the circumstantial evidence as to which version is correct. The circumstantial evidence is that, some time before the Cabinet meeting of 12 December—probably on 11 December—the relevant Deparments were notified by the Cabinet Office that the meeting on Friday was cancelled. One can cancel a meeting only if it has been proposed.
  Another meeting was fixed for 13 December. We want to know the truth about that, because that is a fulcrum date. This is a crucial set of circumstances. There is essential testimony in public by both right hon. Gentlemen, and the House must decide, because by that decision we shall be deciding what course the Government really have been undertaking and whether there was one course for private use and another for public consumption.
  The Prime Minister can prove or disprove these sets of circumstances and she must do one or the other. We have the word of two right hon. Members. This is an honourable

  1085
  House which accepts honourable words. What are we to do when there is such an exact conflict in the description of the circumstances, the status and even the existence of the meeting—the alleged meeting—of 13 December?
  The choice is invidious for us. The conclusions can be reached only by the calling of witnesses. The witnesses are not all hon. Members elected to the House. Fortunately, however, the House has, over the years and in its wisdom, developed a procedure which permits witnesses to give evidence. That is why we consider that it is sensible for all the parties concerned—in the Government, in the public service and elsewhere—who have been witnesses to the various events to appear before a Committee of the House so that a proper assessment can be make and so that they can develop and demonstrate their version and the veracity of their version of events.
  Mr. Eric Forth (Mid-Worcestershire): I am grateful to the right hon. Gentleman. He has been seeking to lecture the House on the workings of Cabinet government. Can the right hon. Gentleman explain the basis of his insight into the workings of Cabinet government? Can he tell us to whom among his colleagues he has spoken about the workings of Cabinet government or what his other sources of information or authority are?
  Mr. Kinnock: The issue at stake is much more basic. I can tell the difference between a truth and an untruth. I know a stink when I smell one.
  The Committee that we seek, which could be convened and which would be of such utility to all involved, would not just consider the veracity of two right hon. Members. The Committee would inevitably consider why a policy change was favoured and why that policy was so rigorously followed by the Prime Minister from 3 December—so enthusiastically as to inspire the grave allegations that she was ill-tempered and, more seriously, that a meeting was cancelled. There were even implications that a Cabinet minute did not carry an account that had been insisted upon by a member of that Cabinet.
  Following the E Committee meeting of 9 December, events marched on. On 13 December, without benefit of further Government consideration of the options, the Westland board met and dismissed the European consortium proposals. In the wake of that, on 16 December, the Secretary of State for Trade and Industry was able to provide the House with what ha must have considered to be a fait accompli that would quieten the issue. He was unsuccessful and the conflict continued. The rival camps exchanged propaganda barrages, to such an extent that, when the Cabinet met on 19 December, we are told that it was decided, presumably collectively, that the lobbying had to stop. However, it did not stop and the contest continued. The allegation is that, far from allowing collective decision-taking to work through the Cabinet and through departmental responsibility, the Prime Minister became even more deeply involved. It is said that she did not direct Sir John Cuckney's letter of 30 December to the appropriate defence procurement department, but to the Department of Trade and Industry, and that she accompanied that directed missile—[Interruption.] I should have said missive, but missile will do. She accompanied it with guidance that the then Secretary of State for Defence considered to be materially misleading.
  The Prime Minister then set the Law Officers on the right hon. Member for Henley when he decided to
  1086
  communicate directly with Lloyds merchant bank. someone made sure that the Solicitor-General's letter became public knowledge by leaking extracts.
  The activities following 16 December ranged from the extremely unconventional in Government to the highly disreputable in Government. In the Sunday Telegraph this week Mr. Ian Waller, on behalf of many others, stated:
  "This Government has been ruthless in persecuting journalists and civil servants for trivial breaches of the Official Secrets Act, yet Whitehall has been like a sieve in recent weeks—including Heseltine's ministry, which unsuccessfully prosecuted Ponting and had a clerk, Miss Tisdall, jailed. The most flagrant breach of all was the leak of a letter from the Solicitor-General damaging to Heseltine's case. Again it stretches credulity to believe this was an accident and not authorised at a high level."
  Mr. Waller asked the question that we all ask:
  "Will Mrs. Thatcher act against the culprit—or does she have one rule for top people and another rule for clerks?"
  We seek an explanation of why a Government who were so sensitive on Monday of this week about the British Aerospace letter were apparently so insecure on Monday 6 January. Did the leak of the Solicitor-General's letter come about by misfortune—as Oscar Wilde might put it —by carelessness, or as a result of something much more devious than either of those possibilities? The Prime Minister is in a position to tell us the answer, and she must tell us. Was that occurrence inadvertent or was it simply a further episode in the efforts to ensure that the arguments for one option were muted so as to elevate the attractiveness of the other option' that faces Westland?
  On the matter of muting, we come to last Wednesday's meeting between Sir Raymond Lygo and the Secretary of State for Trade and Industry. On Monday, my right hon. and learned Friend the Member for Monklands, East asked the Secretary of State for Trade and Industry why the Secretary of State had decided to speak to Sir Raymond Lygo at all on 8 December. The Secretary of State for Trade and Industry quaintly replied that since Sir Raymond happened to be in the Department of Industry building,
  "it would have been wholly artificial if I did no: see Sir Raymond."
  What was wholly artificial was the version of events provided by the Secretary of State for Trade and Industry.
  We have the private and confidential letter in our possession and the records of the House to demonstrate that point more than adequately. The Secretary of State for Trade and Industry said:
  "Let me make it clear that it is untrue to say that in the course of the meeting I made any suggestion that British Aerospace should withdraw from the European consortium or that its participation was contrary to the national interest."—[Official Report, 13 January 1986; Vol. 89, c. 781.]
  He said that it was untrue. The Prime Minister's letter to British Aerospace, which was published this morning, backs what she describes as his recollection, shared by others present at the meeting that took place at about 5 o'clock last Thursday evening.
  Let us examine Sir Austin Pearce's letter. He states:
  "Sir Raymond returned directly to a special Board Meeting of British Aerospace which was in progress and made a 1·1111 report of his conversation to the Board. He also wrote down all the salient points that had been made to him. His report stated that the following points were specifically covered by the Secretary of State."
  For brevity I shall move on to point 6:
  "that what we were doing was not in the National Interest
  7. That we should withdraw."

  1087
  Can anyone imagine a plausible reason why Admiral Sir Raymond Lygo should fabricate those details of the conversation?
  Sir Paul Bryan (Boothferry): Read No. 4.
  Mr. Kinnock: The hon. Gentleman calls for No. 4. The letter is now a matter of public record. I invite the whole country to read all the points in the letter. But that does not move one inch from the fact that the Secretary of State for Trade and Industry said on Monday that it was untrue that he had said during the meeting that British Aerospace was acting against the national interest and that it should withdraw. That point is not negatived, offset, reduced or diluted.
  Sir Paul Bryan: Read No. 4.
  Mr. Kinnock: Can anyone imagine that a man of Sir Raymond's character—a chief executive of a corporation that sells 80 per cent. of its products to the Government—would leave the Department of Trade and Industry and minutes later, half a mile away in Pall Mall, bear false witness to the assembled board of British Aerospace? Can anyone seriously believe that? The Secretary of State for Trade and Industry said that it was untrue. The implications for Sir Raymond Lygo are obvious, and extremely serious.
  There is perhaps only one inaccuracy in the proceedings described by Sir Austin Pearce in his letter and by Sir Raymond Lygo in his report. The views of Sir Raymond Lygo and Sir Austin Pearce acknowlege the fact that they are not men given to exaggeration or over-reaction. The letter that we have all now read probably understates the atmosphere and the nature of the pressure of the Department of Trade and Industry meeting.
  The House can hear directly from the Secretary of State for Trade and Industry, but it cannot hear from Sir Raymond Lygo, despite the gravity of the problems that he faces as a consequence of the Secretary of State's statements. The House owes Sir Raymond Lygo the opportunity to present his full testimony and full record to a Committee of the House. Far be it for me to save the Secretary of State for Trade and Industry by calling for his resignation, but I cannot see how he can bring himself to stay in his present position.
  Only one question remains in my mind about the Secretary of State for Trade and Industry: is he a culprit, or a victim, in this matter? The Prime Minister sits next to him today, as she did on Monday. Is he her agent, or has he been acting on his own? That is the question which the Prime Minister must answer. She must answer it, clearly and honestly, now.
  4.10 pm
  Mr. Tam Dalyell: On a point of order, Mr. Speaker. It is in the recollection of the House that, very courteously, the Leader of the House said that the Law Officer's letter had been made available. I went to the Library where, equally courteously, I was told that the letter is embargoed, "until the Prime Minister has sat down".
  Mr. Speaker: That is not a matter for the Chair.
  4.11 pm
  The Prime Minister (Mrs. Margaret Thatcher): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
  "endorses the Government's consistent objective of supporting Westland plc in its efforts to achieve a financial reconstruction, of supporting United Kingdom participation in collaboration with North Atlantic Treaty Organisation allies and of safeguarding the interests of the company, its employees and its shareholders, recognises the efforts of the Government to ensure that the Westland board had more than one option to secure that objective; affirms that it will be for the company to determine its future course of action; and further recognises the competence of departmental Select Committees of the House of Commons to consider the issues raised by these developments."
  I do not think that there is a great deal to answer in what the right hon. Member for Islwyn (Mr. Kinnock) said. He seems to have made certain conclusions long before the debate started. In so far as he asked me questions, I will try to answer them during the course of my comments.
  At the outset, I wish to refer to the correspondence between Sir Austin Pearce and me, which has been published today, to which the right hon. Gentleman referred, dealing with the meeting on 8 January between my right hon. Friend the Secretary of State for Trade and Industry and Sir Raymond Lygo. My right hon. Friend the Secretary of State has given the House his account of that meeting, and the record of the meeting taken by the Department of Trade and Industry has been published today in full—every single word has been published today in full. I fully accept that the record taken by the Department of Trade and Industry is an accurate and fair account of what was said. I very much regret that there is a different recollection in some respects of what was said, but I believe that when the House has had an opportunity to study the record of the meeting right hon. and hon. Members will see that the Secretary of State for Trade and Industry said that he had no view on the merits of the two offers, that it was for the shareholders of Westland to make a decision, and that it was not in the national interest for the present uncertainty to drag on. There are many in the House who will agree with that sentiment.
  I have today received a further letter from Sir Austin Pearce, which has also been published. In it he expresses the hope that we shall now be able to concentrate on the important issues concerning the future of Westland. I agree. It seemed to me that the right hon. Member for Islwyn did very little of that.
  This afternoon, therefore, I shall first set out the approach taken by the Government towards Westland during its period of difficulty. I shall then deal with the charges—
  Mr. John Gorst: Before my right hon. Friend leaves the Civil Service minute, may I ask whether she believes, considering the important matters that were discussed on that occasion, and the fact that the civil servants' record was dated two days later, that that record is remarkably skimpy and short? Is she certain that it was not a belated and hindsighted record?
  The Prime Minister: No. Ministers and civil servants will have occasion deeply to resent what my hon. Friend has said. The record was taken contemporaneously and was dictated two days later. There were several people present who confirmed that the record is accurate. I do not find it sparse. It is a full account of what happened, and is very much fuller than the alternative which is available in the other letter.
  Mr. David Steel: The official record of that matter need not be in doubt, because what is important is the sentence near the bottom of page 3 of Sir Austin's letter, where he says:
  "Whatever the words used were meant to convey, the message was perfectly clear."
  The Prime Minister: That is why it was absolutely vital to get out the full record of the meeting at the Department of Trade and Industry, unusual though it was. The meeting was attended by several people who confirmed that that is a correct record of the meeting.
  I shall set out the approach taken by the Government towards Westland during its period of difficulty and then deal with the charges that have been made against the Government and against me personally. My right hon. Friend the Member for Henley (Mr. Heseltine), who served in the Cabinet for more than six and a half years, has now made accusations about what he considers to be the breakdown of constitutional government. The House will therefore expect me to answer that charge.
  It may help the House if I begin by setting out the developments in relation to the Westland company during the past 18 months. I do this to demonstrate to the House: first, that the company and the Government's approach to it have been the subject of the most thorough collective consideration by Ministers; secondly, that during this period the Government have been aware of the company's precarious financial position and of the particular legal obligations that that imposes on the board of directors; thirdly, that the Government wished the board of Westland to explore fully all possibilities for minority shareholdings in the company, including what has become known as the European option. It is important that the company should take the course which it judges to be the best safeguard for the future of the work force and the shareholders. Fourthly, I shall show that the defence implications of the company's future were given full weight in our discussion, which took account of the need to ensure that our armed services are given the best equipment to meet their operational requirements. I will then come to the circumstances surrounding the resignation of my right hon. Friend the Member for Henley on 9 January.
  Mr. Dave Nellist: Given the large-scale movements in shares of Westland during the past four to five days, and the possibility—some would say likelihood — of Friday's meeting blocking both offers to Westland, and since the Prime Minister's fourth item said that defence was the highest priority for the Government, have the Government considered following the example of the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in 1971, and pushing an Act through the House in one sitting to secure the public ownership of Westland so that the jobs of the workers in Yeovil and the Isle of Wight can be properly guaranteed? Any surplus capacity could go to civilian use, such as making helicopters for air-sea rescue and food transport in Africa.
  The Prime Minister: I shall deal with that point later. Clearly the Opposition line is that the whole lot should be nationalised at the taxpayers' expense.
  The fact that Westland faced a difficult situation was first brought to the Government's attention late in 1984. We were told that the company's problems stemmed partly from a decline in the market for civil helicopters, including
  1090
  delays on the prospective Indian order for 21 W30, helicopters and partly from the lack, in the short term, of large orders from the British armed services.
  The Government remained in close contact with the firm in the latter part of 1984 and early in 1985. Westland's difficulties were the subject of discussion at both ministerial and official levels between the Department of Trade and Industry and the Ministry of Defence. Careful consideration was given to what action might be open to the Government to help Westland—in particular, whether the services' helicopter requirements could be met by the purchase of the Westland W30. The Government concluded that we could not justify giving Westland orders for helicopters for which our armed forces had no operational requirement. It was judged that there was no defence interest that called for a rescue operation by the public sector. Instead, Westland should be encouraged to seek a market solution to its difficulties that would involve an injection of private sector capital. That was and remains the Government's position.
  It was against that background that the Bristow Rotorcraft company announced an offer for Westland in April 1985. As the scale of Westland's problems became apparent to him, Mr. Bristow asked the Government a number of questions, including whether we would procure the W30 helicopter. I took the chair at meetings of Ministers on 18 and 19 June to settle the Government's response, which was in accordance with what I have already said. We also agreed that, if Bristow Rotorcraft withdrew its offer, the Bank of England should be encouraged to bring together the main creditors to develop a recovery strategy. Bristow Rotorcraft did withdraw its bid and on 26 June Sir John Cuckney became chairman of Westland. At the beginning of July, Defence Ministers were told that the United Technologies Corporation, the parent company of Sikorsky, were interested in the possiblity of some form of participation in Westland. On 8 July 1985, as hon. Members will recall, the future of Westland was raised on the Adjournment of the House. My hon. Friend the Minister for Information Technology made clear in replying to that debate that it was not for the Government to seek to intervene in the management of the company or to seek to influence the form the company's future should take.
  Throughout the summer, Ministers and officials at both the Departments of Trade and Industry and the Ministry of Defence kept in close touch with Sir John Cuckney. On 24 September, Sir John showed the Government reports on the company's financial position that had been prepared by Price Waterhouse. He told us his plans for the financial reconstruction of Westland, involving the introduction of a new industrial partner. He revealed that he was having discussions with a number of companies of which those with Sikorsky of America, a part of United Technologies—with whom Westland had a longstanding relationship dating back to 1947—were the most promising. The company had also been in touch with MBB of Germany, Aerospatiale of France and Agusta of Italy. Sir John also stressed the urgency of reaching a solution before Westland had to finalise their accounts later in the year.
  At a meeting of Ministers on 16 October, it was decided to encourage Westland to explore further the possibilities of co-operation with the European companies which were partners or potential partners of Westland in a number of collaborative projects. That view was communicated to Sir John Cuckney by the Secretary of State for Trade and

  1091
  Industry on 17 October. Sir John said that he had made it clear to the European companies that he would consider any reasonable proposition. He again emphasised Westland's need for a rapid conclusion to its plans for a financial reconstruction.
  It was apparent that, unless such a reconstruction was clearly in prospect before the 1984–85 results were announced, the company could be legally obliged to go into receivership. A number of contacts subsequently took place with European companies and Governments and it became known that Fiat of Italy was associated with United Technologies' proposals. But as late as the last week of November, by which time negotiations between Westland and United Technologies-Fiat were in their final stages, no formal proposals had appeared from European helicopter companies for participation in a reconstruction.
  It was at this stage, on 29 November, that the national armaments directors, who are senior defence officials, of the United Kingdom, France, West Germany and Italy met in London at the request of their respective defence Ministers. The national armaments directors recommended that the four Governments should cover their main helicopter needs in future solely by helicopters designed and built in Europe. This would have represented an exclusive commitment to buy only helicopters which qualified as European in this special sense, that they were not only built but designed in Europe. That would have gone far beyond the 1978 declaration of principles to which we still adhere.
  On 2 December Sir John Cuckney wrote to the Secretary of State for Trade and Industry to urge that the recommendation should not be accepted by the Government. He stressed that, if the recommendation was approved, the board felt that it would not be able to recommend to the company's shareholders any reconstruction proposals involving Sikorsky and Fiat. He added that, while Westland had received indications of interest from the European companies, they did not mark any commercial advance over earlier proposals which had been rejected as inadequate. In consequence there was a serious risk that there would be no effective reconstruction proposals in place within the urgent timescale to which the company had to adhere.
  In the light of these developments Ministers met under my chairmanship on 5 and again on 6 December to consider their response. In doing so they were very conscious of the approaching deadline for publishing the Westland accounts—with losses publicly predicted to be of the order of £100 million—in fact they were about £98 million attributable to shareholders—and the need therefore for the company to have a financial reconstruction package clearly in prospect by then if it was to avoid going into receivership.
  The issues before us were, first, whether to agree to write off the launch aid of nearly £40 million for the W30 project if it were subsequently terminated. It was evident that that was now a condition for any successful financial reconstruction which would allow the company to continue in business. The second issue was how to respond to the recommendation of the national armaments directors. The groups of Ministers to which I have referred considered those two issues at the meetings I have mentioned.
  Mr. Jeff Rooker: Will the right hon. Lady give way?
  The Prime Minister: I shall not give way as I should like to complete these very tightly argued points.
  At the end of the second meeting on 6 December it was clear that a majority of the Ministers present were ready to decide that the Government should reject the recommendation from the national armaments directors, thus leaving Westland free to reach its own decision. But because a minority of Ministers—including my right hon. Friend the Member for Henley—felt very strongly about the matter, I decided that a further discussion must be held in Cabinet Committee, namely in the Economic Sub-Committee, for which a full paper should be prepared.
  The Economic Sub-Committee of the Cabinet therefore met on Monday, 9 December. Sir John Cuckney and his advisers were invited to attend for part of the time to report on their company's position and to answer questions. After considerable discussion, it was concluded, first, that repayment of launch aid for the W30 would be waived if that project were terminated, and, secondly, that, unless a viable European package which the board of Westland could recommend to its shareholders was in place by 4 pm on 13 December—Friday of that week—the Government would make clear that the country would not be bound by the recommendation of the national armaments directors. That deadline was set in order to allow reasonable time for more specific European proposals to be put together without running up against the deadline imposed by Westland's need to have a financial reconstruction package in place by the time its accounts were published. At the end of the meeting, Sir John Cuckney was informed in confidence of the conclusions so that he knew where the company stood. I repeat that if the national armaments directors' recommendation had remained he could not have brought forward the Sikorsky-Fiat bid. The fact that the Government were not bound by that recommendation enabled there to be a choice of two options eventually—Sikorsky-Fiat and the alternative European option which developed.
  The conclusions of the meeting of the Economic Sub-Committee of the Cabinet on 9 December laid down a clear line of policy and made it unnecessary to hold a further meeting. It was recognised in discussion that the timetable would allow for another meeting of Ministers before 4 pm on 13 December if unforeseen developments required one, but no decision to hold such a meeting was taken or recorded. The conclusion was clear, the events happened and the decision took effect. No meeting was agreed, so there was no meeting to cancel.
  A firm proposal from the European consortium, which by that stage included British Aerospace, was received by the board on 13 December. The proposal took into account a provisional agreement reached between defence Ministers of the four countries based on the recommendation of the national armaments directors.
  The European consortium's proposal was not acceptable to the board. Accordingly, as decided at the meeting on 9 December, the Government were not bound by the NADs' recommendation. In the light of the decisions taken on 9 December, there was no further issue to discuss, though the matter was raised in Cabinet on 12 December.

  1093
  The position was fully reported to the House in a statement by my right hon. and learned Friend the Secretary of State for Trade and Industry on 16 December, including the decision about the national armaments directors' recommendation and the Government not being bound by it. I answered questions on 17 December. On 19 December, as I told the House the same afternoon, Cabinet reaffirmed the Government's view that it was for Westland to decide what was the best course to follow in the interests of the company and its employees.
  Westland subsequently put proposals to its shareholders on 21 December to effect a capital reconstruction involving United Technologies and Fiat. Those proposals, and those of the European consortium, which in this period was joined by GEC, were subsequently improved in various respects, but that did not affect our fundamental policy that it was for the company and not for the Government to decide between them.
  On 30 December, Sir John Cuckney asked me to confirm that Westland would still be considered a European company by the Government if the UTC-Fiat consortium took a minority shareholding. In replying on 1 January I told him that, as long as Westland continued to carry on business in the United Kingdom, the Government would continue to regard it as a British and therefore a European company and that we would support it in pursuing British interests in Europe. I also said that, whichever of the two proposals currently under consideration the company chose to accept, the Government would continue to support Westland's wish to participate in European collaborative projects and would resist to the best of their ability attempts by others to discriminate against Westland.
  Cabinet on 9 January confirmed unanimously the Government's conclusions of 19 December and agreed that to avoid any possible prejudice to the sensitive commercial negotiations then in train all statements by Ministers should be cleared interdepartmentally through the Cabinet Office to ensure that all answers given by the Government were consistent with Government policy. Every member of Cabinet agreed except my right hon. Friend the Member for Henley. He then left the Cabinet. I shall return to that point in a moment.
  I have given the House this full account because I think it is important to set the developments of the past month in the wider context of the Government's clear policy and the company's difficulties over a period of a year and a half, the attempts made to find a solution to them and the urgency in the closing weeks of last year of finding a solution which would allow the company to continue trading.
  Mr. Jack Straw: The Prime Minister has now passed 6 January in her account, but she has omitted all reference to the leak of the Solicitor-General's letter which I believe took place on that date. Is she satisfied that neither the Secretary of State for Trade and Industry nor any of his officials had anything whatever to do with that leak?
  The Prime Minister: I answered written questions either yesterday or this morning making it quite clear that an internal inquiry had been instituted. The hon. Gentleman asks me about a particular leak, but if I had to answer every' question raised in the newspapers we should have a very long task.
  1094
  The Government's approach throughout has been guided by a number of important considerations.
  First, the Government concluded that no national interest considerations required the mounting of a public sector rescue bid. It followed that we could not dictate a solution to the company's problems. Responsibility for its future had to remain in the hands of its directors and shareholders—where it ought to be. Had the Government pressed the board of Westland to favour or adopt a particular solution it might have been taken to imply that we were ready to use public funds to underwrite the company's finances. We were not and are not prepared to accept any such liability.
  Secondly, and in line with our active support for greater co-operation in European defence procurement, we were ready throughout to encourage the possibility of a European solution, while affirming that it was for the board and the shareholders to decide what was best for the company.
  Thirdly, we wished to ensure that our armed forces would have and would continue to have access to the most cost-effective equipment which fully meets our military needs.
  I believe that the House will agree that the record shows that the Government have acted consistently with those principles throughout.
  There have been suggestions that the Government did not discuss the issues in sufficient depth or in a timely way. The account that I have given shows that such an allegation is absurd. There have been innumerable discussions of Westland's affairs between Departments and with the company over a period of 15 months. The company's future was the subject of collective discussion between Ministers on 18 June, 19 June, 16 October, 5 December, 6 December, 9 December, 12 December, 19 December and 9 January.
  There can be no doubt that the problems have been considered properly and responsibly. Colleagues in the Government, particularly those most closely concerned, were given ample opportunity to express their views, and did so, and ample opportunity to seek to persuade other colleagues before the policy was decided.
  I have dealt in considerable detail with the points concerning the Government's approach to Westland. I should like to emphasise one particular point in that account. Unanimous agreement was reached at the full Cabinet on 19 December. I repeat—unanimous. On 9 January Cabinet confirmed the identical policy and once again the policy was agreed unanimously. It was vital from that day forward that we should give strict practical effect to the policy as the crucial time for the company's decision was approaching. This was not a technicality. It was essential for the effective discharge of collective responsibility.
  The whole of the rest of the Cabinet agreed the procedure that we should adopt—with the sole exception of my right hon. Friend the Member for Henley. He was prepared to acknowledge the advantages of collective responsibility without being prepared to accept the disciplines that it requires. That the rest of the Cabinet could not accept. It would be a denial of the collective responsibility on which our system of constitutional government depends. Cabinet heard his decision with great regret. They recognised his services to Government over six and a half years in office. But the decision was his, and his alone.

  1095
  It follows from what I have said that the Government have conducted themselves properly and responsibly throughout and that there is no cause for an inquiry. The amendment in my name and those of my right hon. and right hon. and learned Friends recognises the important role of the departmental Select Committees in matters such as this. The Government's concern is to see a financial reconstruction of Westland as soon as possible which maintains a British helicopter design, development and manufacturing capability, supports United Kingdom participation in collaboration with NATO allies, and safeguards the interests of the company, its employees and its shareholders.
  I believe both sets of proposals put to the company could achieve these objectives; I hope that the shareholders will be able to take their final decision very shortly.
  I commend to the House the amendment which endorses the Government's consistent policy.
  4.41 pm
  Mr. David Steel: The most brazen part of the amendment moved by the Prime Minister is that which asks the House to endorse
  "the Government's consistent objective of supporting Westland … and of safeguarding the interests of the company, its employees and its shareholders".
  My basic disagreement with the Government is that, as the Prime Minister has just shown adequately, the Government's consistent attitude has been to say that it is nothing to do with them, that it is entirely up to the company.
  My hon. Friends the Member for Yeovil (Mr. Ashdown) and for Isle of Wight (Mr. Ross), who, between them, represent the bulk of the work force of the company, had a total of six meetings last year with Ministers in the Ministry of Defence and the Department of Trade and Industry. All were designed to stir the interest of the Government to try to secure the stability of Westland and the continued employment of its work force in its helicopter, hovercraft and other divisions. No doubt the records of those meetings could be added to the plethora of paper that we already have.
  In each case, the Government steadfastly and consistently refused to assist. They said that these matters were for normal commercial consideration. The Prime Minister quoted to the House a section of the speech made by the Minister for Information Technology on 8 July. He said:
  "It is not for the Government … to seek to influence the form its future should take."—[Official Report, 8 July 1985; Vol. 82, c. 881.]
  There, of course, lies the basic division across the Floor of the House. Most of us on the Opposition side of the House believe that it should be possible for any Government, especially where defence interests are at stake, to have at hand some means of securing the interests of companies that get into temporary difficulties. If the Government still had the National Enterprise Board it would have been perfectly possible to have public participation for a necessary temporary period in which the company could get back on its feet and not necessary to have a nationalisation solution. We believe that, given the state of the company last summer, the proper course would have been for the Government to consider taking a 21 per
  1096
  cent. shareholding and thus actively put together some kind of European consortium under the 1978 helicopter agreement. The right hon. Member for Henley (Mr. Heseltine) subsequently did this in the last two months of 1985.
  The truth is that the Prime Minister and the whole Government continued, throughout most of last year, to operate a free-market theory in a world where the free market no longer exists. Every other country, whether it be the United States or our European partners, gives far more support and active assistance in various forms, including public participation, to their defence industries than this Government are prepared to do. That is our basic quarrel with the Government's attitude to Westland throughout last year.
  Later in the summer, the new chairman and the new board took their places. At this point Members of Parliament, the Sikorsky company, Sir John Cuckney and British Aerospace were all told that the Government would not get involved. The strong impression among Westland personnel was that the Government would not be surprised if, although they did not necessarily hope that, the company went into receivership. Various other companies would then pick up the pieces. This is where the Government are consistent in their non-industrial strategy. It does not matter if we do not have a helicopter manufacturing capacity, it does not matter if we do not have a pulp-making mill capacity or a steel rolling mill —such has been the Government's strategy all along. The result of this strategy since the Government came to office has been a reduction by about one fifth in the manufacturing capacity of this country. The result has been that 1983 was the first year when, excluding oil, our imports exceeded exports. This is the record, and into it the Westland saga fits with total consistency. We cannot support such an attitude, partly because if Westland had gone into receivership I am told that about 90 other supply companies could also have gone into receivership. But the Government allowed that threat to continue throughout last summer.
  Mrs. Edwina Currie: The right hon. Gentleman says that the Liberal party does not support the Government's attitude. Recently the right hon. Gentleman was reported in the press as saying that the European possibility should be pursued. However, in recent days, other Liberal Members have backed Sikorsky. Does the Liberal party have an attitude at all or is it sitting on the fence?
  Mr. Steel: If the hon. Lady will be kind enough to let me make my speech she will know my attitude. I shall make it perfectly clear. I have already said what should have been done last summer. I am taking the matter in sequence and I shall now move on to what happened last autumn.
  The Cabinet, including the former Secretary of State for Defence, must accept responsibility for the united attitude that it took towards the Westland company throughout the summer of last year. It was not an attitude that we supported.
  The Government have also lacked a defence procurement strategy. I am one of those who stand firmly behind the twin-pillar concept of the NATO Alliance. That concept cannot operate if one of the pillars gradually acquires the bulk of the technology and manufacturing

  1097
  capacity for our defence equipment. Surely that was the reason behind the 1978 helicopter agreement. It was also behind a number of other collaborative ventures that Britain has entered with our European partners.
  It is not anti-American to say that there ought to be greater common manufacturing efforts among NATO's European partners. That is why the Government should have followed this concept in the middle of 1985 when Westland was in trouble, but they did not. In September, the new Westland board, as the Prime Minister described accurately, had to put into effect a rescue package by mid-December — a short time — to avoid going into receivership after the accounts were published in mid-December.
  Mr. Nicholas Baker rose—
  Mr. Steel: The Prime Minister rightly says that the Sikorsky-Fiat deal was built on a long record of collaboration between Westland and Sikorsky. Therefore, in the tail end of last year, the board recommended to its shareholders a bird in the hand rather than any number of birds in the bush. It is not surprising that the bid has been supported by the shareholders, the employees and the board. They have supported it because it is the only available deal to come forward of its own accord and therefore it deserves support. The company has been perfectly right to be irritated at the manipulation by Government throughout November and December, having been told earlier that it was all up to the company.
  Mr. Tony Marlow: The right hon. Gentleman knows that both his hon. Friends the Members for Yeovil (Mr. Ashdown) and for Isle of Wight (Mr. Ross) now support the Sikorsky deal. Does he agree? Is that now Liberal party policy?
  Mr. Steel: I thought that I had just made that point clear.
  One of the more interesting points in the correspondence to which much attention has been given lies in a comparison between the official record of the minute and Sir Austin Pearce's letter. According to Sir Austin Pearce, Sir Raymond Lygo
  "found reference to the national interest confusing".
  In the official minute, however, Sir Raymond
  "questioned what was the national interest".
  It is no wonder that industrialists found the national interest confusing. It appeared to be whatever the latest Cabinet Minister said it was when they met. There has been no clear direction of national interest in this matter. The Prime Minister more or less glories in the fact that the Government saw no national interest in this issue at any time last year. On both manufacturing and defence grounds, we dissent from that view.
  As for the constitutional issues raised by the resignation of the Secretary of State for Defence, when last did a Government have so many ex-Cabinet colleagues out on their ears, not through old age or incompetence but for deviation from the given line? A Cabinet room which increasingly becomes converted to an echo chamber for one person's views is a danger to democratic government. The long-term lessons of this affair are that the Government have been industrially incompetent and that the morale of government has been undermined by a failure to conduct the processes of government on the basis of collective decision-making.
  1098
  I agree with the leader of the Labour party—the Prime Minister did not answer one point yesterday. The relationship between the Prime Minister's reaction to leaks by Ministers and ex-Ministers as compared to the alleged offences of civil servants under section 2 of the Official Secrets Act 1911 is obscure. Can there be one law for the rulers and ex-rulers and another for the ruled? The Prime Minister must now declare that section 2 is formally dead and buried unless she intends to mount prosecutions.
  The Prime Minister has manipulated the processes of government unacceptably. Most serious of all, she has been cavalier with Britain's long-term manufacturing interests. It has been a discreditable episode in the life of an increasingly discredited Government.
  4.52 pm
  Mr. Michael Heseltine: May I begin with art apology to the House? Much of what I have to say I would have preferred to say to the House first, but circumstances did not make that possible and I apologise for that.
  Much of what has been said so far shows that there are two issues at the heart of the matter—the relationship of Britain with its European and American allies in the Atlantic Alliance and the role, if any, that the Government should play in their relationship with industrial companies in seeking to enhance and protect the defence industrial base of the country.
  I hope that I do not need to say to the House, and certainly not to my party, that I am as committed to the concept of the NATO Alliance as anyone in our party. I hope that I have played a role in selling the advantages of the NATO Alliance. I am wholly dedicated to the concepts and advantages that have come from it. I know of no other credible way in which to protect and defend the freedoms that we cherish. The issue, however, is the relationship and whether it should be one of partnership.
  The political processes would be uncontrollable if, on either side of the Atlantic, tensions developed so that either side felt unfairly disadvantaged by the processes of the Alliance. We have one great thing in common—a common enemy—but the scale of the resources presents great problems. The United States of America spends some $280 billion a year on its defence requirements. That undoubtedly gives it and us enormous defence and deterrence, but it also provides an enormous industrial dilemma. That vast resource flows into the technology frontiers and creates huge production runs. It is spent largely within one market, which is perhaps the most protected market in the Alliance, by technology transfer regulations, by "buy American" protection laws and by extra-territorial controls.
  This scale of taxpayers' resource is irresistible and it is co-ordinated through the vast buying machinery of the Pentagon. It is also protected by the immensely zealous interest of Congress. It is channelled into the largest and richest companies on earth. It is irresistible and if unchecked it will, in the legitimate pursuit of American corporate ambitions, buy its way through sector after sector of the world's advanced technologies.
  Two consequences flow from that. The bigger and richer the companies become, the more they centralise their design and high technology facilities, and the more the flow of brains and talent is drawn to the western sun belts and the more the resentment will grow in Europe. The slower we are to react, the less effective we become as industrial partners to the United States. The more

  1099
  Europe is criticised for failing to play its part in sharing the burden of the defence of the free world, the more the resentments will grow in the United States.
  So, for the strength of the Alliance and to preserve the conviction of partnership upon which it must politically depend, the more we in Europe must recognise that it is in our interests—and in America's—to strengthen and co-ordinate our industrial base.
  Should we try to influence our companies? Are there any arguments about our defence interests, about our aspirations as a European partner or about our commitment to the preservation of the high technology base in Britain? At the end of the road, are there even any arguments about the maintenance of jobs in Britain when large sums of taxpayers' money are being paid out? Since Government is far and away the largest customer, should it not expect to play some role in influencing the destiny of our defence contractors?
  Mr. Paddy Ashdown: Will the right hon. Gentleman give way?
  Mr. Heseltine: Forgive me.
  I have absolutely no doubt that the answer to all those questions has to be yes. In the starkest case, our companies, with few exceptions, are too small to survive individually as genuine partners with American companies. There is no point at which the process of acquisition would stop if Government believed that a market place flickering at the margin of the taxpayers' resource would lead anywhere except American domination, company by company, sector by sector.
  My position has been consistent ever since I had the privilege to help establish the European Space Agency in 1973. The background is for me clear. So is Government policy on this critical matter. The Government White Paper of 1985 made clear that we were committed to a major drive forward in the co-ordination of the defence industrial base in Europe. The helicopter agreement of 1978 made it clear that we were committed to seeking the co-ordination of the European helicopter requirements. So could there be—should there be—an exception in the case of Westland? Should Britain dine a la carte in Europe, going for the airbus, supporting Tornado and the European fighter aircraft, but opting out of helicopters? Such a theory has its attractions. Often one gets a better choice a la carte, but it is usually more expensive and one's companions tend to copy one's example.
  The longer that we in Britain go on preserving an uncoordinated, fragmented European industrial base, cowering behind our frustrations every time somebody else wins, or tries harder than we do, or gets up just that little bit earlier than we do, the longer our relative decline compared with the United States of America will continue.
  Let us come to that small helicopter company in the west of England. My position has always been that if in the end there was only one way to save Westland on reasonable terms I would back Sikorsky. My own belief is that at the critical moment the Government had a clear preference for Europe and that, for reasons that I fail to understand, Sir John Cuckney set his face against any reasonable exposure of that European preference to his shareholders. I fail to understand his statement yesterday
  1100
  that, come what may, he will not put the firm, financially better, technologically more advanced, British-European offer to his shareholders.
  I do not believe that even the most laissez-faire of my colleagues would have intended that leaving the choice to the Westland company would result in unidentified and unidentifiable financial groups slogging it out behind the closed doors of City institutions, as is witnessed, as though we were selling one of Britain's defence contractors in job lots to the highest bidder.
  Mr. John Wilkinson: I am most grateful to my right hon. Friend. We have all been listening with rapt attention to his grandiloquent statement and we are impressed with the idealism behind his observations about European collaboration. But is it not simplistic to paint a picture of an entirely one-way street, seeing that British industry has most successfully, to our advantage, collaborated with the Americans on the Harrier 2 and on the Hawk for the United States navy? We are also providing the Rapier to defend United States air bases in this country. Europe has provided the spacelab to go in the shuttle and is to collaborate with the National Aeronautics and Space Administration on a space station for the 1990s. Is my right hon. Friend not being simplistic about these matters?
  Mr. Heseltine: There are examples on both sides of export successes to the continent of Europe, to the Third world and to the United States. We are not talking about co-operative success; we are talking about the simple question whether the United States would allow a significant defence contractor to be owned or effectively controlled by an overseas country. The answer is a categorical no. I do not understand why we should have a different answer in this country. It is well known—I have made no secret of it and never will—that I hope the shareholders of Westland will recover some sense of national pride when they meet on Friday.
  I must elaborate on the two specific points that I have just made. First, at the critical moment the Government had a clear preference for Europe in the rescue of Westland. Throughout 1985, as the Prime Minister has fairly said, every option was canvassed. There are virtually no opinions that are not represented on the files on the matter, but my preference clearly follows the European co-operative sentiment in the White Paper which my Department was responsible for publishing last year.
  Of course, throughout the early months, when the Prime Minister rightly said that there were considerable interdepartmental discussions and even meetings, the scale of the Westland crisis was hardly perceived. The first serious solution was the Bristow takeover bid. So none of the anxieties about effective foreign control were on the agenda in a practical sense at that time. It was only with the withdrawal of that bid—I remind the House that that took place only in June of last year—that we had the disclosure of the financial crisis which many of the existing board who were there then seem hardly to have perceived. It was only when that crisis broke in June that Sir John Cuckney took over.
  It often appeared as though there was no way through for the company. The only way through might have been an extremely expensive public rescue. Every option, including a Sikorsky rescue, had to be preserved and encouraged. Every one of us would have been guilty if we

  1101
  had blocked off such options. The Department of Trade and Industry and the Ministry of Defence worked through the options. As events unfolded I had no cause originally for concern that my European preference would not receive consideration. Of course, the DTI was the sponsoring Department but at that time it was faithfully maintaining the European option.
  By October — this is the point at which the difficulties which have led to my resignation from the Government began to develop—the preservation of that choice had become a clear preference. I must say to the Prime Minister that her description of the account in the two letters of 4 and 18 October does not tally with my reading of those letters. I have a very full understanding of what is in them. If the Government can publish Sir Austin Pearce's letter and now the Law Officer's letters, I cannot understand why they cannot make available the letters of 4 and 18 October.
  Those letters would show that Sir John Cuckney recognised a European preference and that the Secretary of State for Trade and Industry declared a European preference. I have to say that about that time Sir John Cuckney was beginning to advise the Government that there was no realistic European option. It was only then that my anxiety began to grow. It was at that time that the willingness that I had had until that moment to support the sponsoring Department turned to an anxiety that the preference for Europe was being choked off.
  During August, as the House knows, I had concluded on behalf of this country the European fighter aircraft agreement. If I dare say so, perhaps more than any other Minister I have deep experience of how Europe works. I told my colleagues privately in mid-October that Sir John Cuckney had the wrong experience to give him an insight into how European collaboration works. It is not his fault. It is an unusual experience to have, but nevertheless it remains a fact. Collaboration in Europe, where companies—even in this country—are in practice close to their Governments, is actually led by Governments and not by companies.
  I obtained, therefore, my colleagues' agreement to see whether I could help to counter the increasingly certain view of Sir John that there was no European option. I met Sir John—as the House knows, I was abroad in early November—on 26 November. He said that he welcomed help. He explained that he had not the staff to process the work himself because he was so involved with the Sikorsky negotiations and that it would be good for the company to have a choice. So I began my negotiations with the full support of my right hon. and learned Friend the Secretary of State for Trade and Industry and with that of Sir John.
  It has been suggested that I was indifferent to Westland's future. I shall say something about that, because nothing could be further from the truth. My Department's responsibility for Westland was to ensure that the industrial capability, which is a critical defence interest, was maintained. I always made it clear that I would insist on the maintenance of that defence capability. Secondly, it was its responsibility to secure the best, or at least reasonable, value for money for the defence budget. It was not the responsibility of the Ministry of Defence to take over the sponsoring role of the Department of Trade and Industry or to use defence money for company rescue plans, unless the cost of so doing could be extremely
  1102
  limited. It is for the Department of Trade and Industry to propose in such matters, and it made it clear on 4 October that it would not use DTI money for rescue purposes.
  I stated clearly that receivership would be the best solution in certain circumstances. I said that most clearly on 25 September when I became so concerned about what was happening that I instructed officials in my Department that no options other than receivership were to be discussed further without my express authority. Why did I react so strongly? I did so because, on that day, I received a submission from my Department which said that, although no costed options for Westland yet existed, there was a plan. The Government were to fund £120 million for underwriting sales of 45 W30-160s, a civil helicopter, write off £40 million of launch aid on civil projects and provide perhaps another £25 million of further cash for redundancy. As my officials said at the time, to maintain the supply of spares and other Ministry of Defence requirements would cost Her Majesty's Government, on current information from the company, about £120 million to £165 million in cash and £40 million in written-off launch aid. It might have seemed just a small helicopter company in the west country, but my perspective had changed dramatically.
  The military advice to me on the value to the Ministry of Defence of the helicopter order was that it would not be justified on military procurement grounds even as a gift. It will be seen clearly that by 3 October I am recorded as saying that I was not in favour of a receivership option.
  Mr. Bill Walker: My right hon. Friend will be aware that on 21 September I had a meeting with him in his office with principal officials from Sikorsky. Would he care to tell the House what he told them at the meeting?
  Mr. Heseltine: Yes. I told them exactly what I have already told the House. I told them that we had to preserve all options. It would have been unthinkable, not knowing whether there was a European option, to reject one option that was sitting in my office at that time. I should add that my hon. Friend behaved properly on all occasions and that I believe that I have answered his question as honestly as I can.
  It has been suggested that I withheld £6 million from the company. It was my accounting officer who withheld £6 million on what he believed to be grounds of commercial prudence. I instructed that I was to be kept in touch immediately, even when out of the country, with the attitudes of Westland's bankers on this matter.
  In June, I put forward a limited form of Ministry of Defence guarantee to help with the uncertainties over the Indian order. My colleagues felt unable to accept it and I think that their reasons for refusing to do so were perfectly proper. I formally directed my accounting officer to pay the £6 million to Westland in October and, therefore, I took upon my own personal political shoulders the responsibility for making a payment of that large sum of taxpayers' money, which my accounting officer would not make. I remind the House that I was the Minister who was deputed to talk to Mr. Gandhi about the W30 order from India when he was in Britain.
  In the end, whatever else I may have done, the Westland shareholders have a choice, and substantially better terms than those negotiated by the Westland board. The original Sikorsky offer, which the board firmly

  1103
  supported, argued that the only practical offer was for up to 40 per cent. of the shares in the company and 30 per cent. to 40 per cent. of the work to go the United States of America. Sikorsky is saying now that it will perhaps accept the transfer of only half that shareholding and only half that amount of work to the United States of America. So much for the company that, as we were told on 5, 6 and 9 December, might go away if we did not sign up without more ado. No one knows now who is buying what shares from whom in the stampede by an American multinational company to break into the European markets.
  I wholly reject the suggestion that I have been indifferent to Westland's interests, but I plead guilty to the charge that I have intervened in what I believe to the legitimate interests of Britiain's industrial defence base. I delivered a deal from the British and European sources to rescue Westland. On Friday 13 December, the bid, deal or offer was rejected by the Westland board in what I calculate to have been about 40 minutes. There was not a phone call and there were no meetings. There was a simple no.
  I had been empowered by my colleagues in the British Cabinet to pursue the possibility of a British-European rescue for Westland, but I was given no chance to report back my proposals to the Cabinet Committee which authorised me, or to the full Cabinet I was required instead to report them to the board of a private company. Virtually every Fleet street commentator said that the proposals were better. Even Sir John Cuckney's remarks indicated something of the same flavour. It was so much better as a deal that Sikorsky had to improve its offer in every material respect. Of course, no meeting took place in Government after my deal had been made available. There were meetings before but no meeting took place after the British-European deal had taken a form in which it could be discussed sensibly.
  On Friday 20 December a full, as I am advised, legal offer was submitted to the Westland board by the European consortium. On Saturday 21 December, Westland proceeded to circulate to its shareholders the Sikorsky-Fiat proposals, which offered the company less money, less work and less technology and involved scrapping an existing agreement to produce Black Hawk helicopters, which is still in existence, to the best of my knowledge, with Short Brothers of Belfast.
  Much of what has happened since is in the public domain. In the absence of any collective judgment, which I continued to ask for as late as 23 December, I continued publicly to answer quetions, as I was, I think, properly' entitled to do as the Secretary of State for Defence. I felt that I owed that at least to those who had responded so quickly and generously to the approaches which my colleagues in government had authorised me to make.
  I must now come to the closing chapter of this extraordinary affair. I have explained that Sir John Cuckney, in discussions with me on 26 November, said that he would welcome a choice but had not the staff to process it. I fixed a meeting, after consulting the Defence Minister of the Federal Republic of Germany, for 29 November, consisting of four national armaments directors and representatives of three companies. I met the national armaments directors and the companies and explained the urgency of the matter. I then left to speak
  1104
  for my hon. Friend the Member for Rochford (Dr. M. Clark). By the time I returned, agreement had been reached.
  Even before the meeting had taken place, Sir John Cuckney telephoned the permanent secretary of my Department, saying that he had learned of its existence in the Financial Times. He said that he was expecting a telex in hours from Sikorsky and that as soon as it came he would convene a board meeting which would confirm the Westland-Sikorsky deal. So much for the man who, only a few days earlier, had said that he would welcome a choice. I am at a loss to understand how Sir John could on 26 November encourage a Minister of the Crown in the belief that choice would be welcome and three days later threaten to stifle it at birth.
  Mr. Gerald Howarth rose—
  Mr. Heseltine: I have a limited knowledge of company law. That is a matter for the Department of Trade and Industry. [Laughter.] I am, however, under the impression that it is the duty of a board of directors to seek the best deal for its shareholders. The only excuse could be that even the knowledge of such an alternative deal would frighten Sikorsky off. That would have to be a miscalculation of historic proportions.
  The House knows the background to the deal that I was trying to negotiate. In 1978, the four countries had signed an agreement to use their best endeavours to produce helicopters in Europe. The four, including the United Kingdom, had continued with that policy. At the meeting that I called, the national armaments directors agreed on the rationalisation of European requirements for helicopters for the rest of this century—the EH101, the NH90 and a merged version of the PAH2 and Al29. That was the culmination of what had been embarked upon in 1978, the opportunity for Europe to keep within Europe all the design, all the technology, all the jobs, and to standardise, with no competition from any of the countries concerned, on three helicopter requirements.
  At that meeting, therefore, the national armaments directors took the 1978 agreement a stage further. They said that they would in future not simply try to co-ordinate but would purchase helicopters designed and developed solely in Europe. They had decided on helicopter requirements for the rest of the century.
  I must make it clear that I took no part in that decision. I was in Southend. The proposals were awaiting my return from Rochford. They were contingent on the European offer being accepted for Westland. With the national armaments directors' constraint, of course, Sikorsky would be ruled out in terms of its Black Hawk helicopter; and Sir John Cuckney asked the Secretary of State for Trade and Industry to lift this proviso of the national armaments directors at once. I refused to agree until a proper choice was presented between Sikorsky and the European offers.
  The purpose of the meetings on 5, 6 and 9 December was to persuade colleagues to support the Secretary of State for Trade and Industry in his request to lift this provision. I have to say to the Prime Minister that I do not agree with her sense of urgency about this matter. There was no need to lift the national armaments directors' directive to allow the negotiations with Sikorsky to continue. It would have been necessary to lift the directive

  1105
  only if the agreement with Sikorsky was to be signed. Sikorsky could have been told about it and that the directive would not be implemented if its preference was exercised. During the negotiation of that preference, there was no need for it to be lifted.
  Mr. Wilkinson: My right hon. Friend the former Secretary of State has throughout his tenure of office taken great pride in the fact that, under his stewardship, competition has been maximised and, with the help of Mr. Levene, the Chief of Defence Procurement, alias the national armaments director, great savings in cost have accrued to our taxpayers. How come that my right hon. Friend was so pleased that his national armaments director should announce to him a provisional agreement which would specifically preclude competition in the very important area of armaments where over the years a great deal of public money has been expended?
  Mr. Heseltine: I wonder whether my hon. Friend has really thought through where the competition options would be in Westland if it were effectively owned by an American company which had already designed the helicopters for the United States forces, which were then to be available under licence to this country on work-sharing agreements. The House must understand that in all the procurement policies of the advanced world Governments actually buy the helicopters that suit the countries in which those companies are situated. If there is an effective American control of one of our major defence suppliers, I do not believe that there would ever be a really competitive choice to buy from Europe.
  I accept, therefore, that there are limitations on the concept of competition. I have discussed it very fully with my colleague, the Federal German Minister. The way in which we will do it, if we see the Europeans advance in this way, is to ensure that the competitive pressures are arranged within Europe precisely as the Ministry of Defence is making arrangements now for competitive pressures to be exercised within Britain. It is no accident, because I share my hon. Friend's view that the percentage of new contracts to the Ministry of Defence subject to competition has risen in the past 18 months from 45 per cent. to 70 per cent.
  Mr. Ashdown rose—
  Mr. Heseltine: No. [Interruption.]
  Mr. Speaker: Order.
  Mr. Heseltine: I come to the two meetings of 5 and 6 December. I do not think that any of my colleagues would dispute that they are not of constitutional significance because they were ad hoc meetings. It is a perfectly legitimate way of conducting the business of government to gather together the immediately interested Ministers to dispatch uncontroversial or relatively uncontroversial business. There were, however, sufficient numbers—not a majority, but sufficient numbers—of Ministers at those meetings on 5 and 6 December to ensure that a properly constituted Cabinet Committee should meet to resolve the matter. That meeting took place on 9 December. It was, of course, a meeting of the Economic Committee of the Cabinet. Sir John Cuckney was invited —I think helpfully—to put his views about the urgency of the Sikorsky situation and about the European option to all my colleagues on that Committee. He stressed, of
  1106
  course, how essential it was to lift the national armaments directors' directive. A significant number of my colleagues came new to the arguments.
  At that meeting I put forward a totally different proposal. I asked for just five days, until Friday 13 December, to ensure that the European proposals, which now included British Aerospace, were proved or not. I made it absolutely clear that if I failed I would back Sikorsky. After hearing all the arguments and after listening to Sir John Cuckney, a clear majority of my colleagues supported my proposals. The meeting ended with a clear statement that we would meet again on Friday at 3 pm, when the Stock Exchange closed. The officials of the Cabinet Office recorded the words. They are not in the minutes but I believe them to be in the notebooks from which the minutes are prepared. [HON. MEMBERS "Oh!"]
  It was no surprise to me when, therefore, the Cabinet Office arranged the meeting for Friday at 3 o'clock. It was a devastating surprise when it subsequently cancelled the meeting. I was content with the outcome of that meeting on 9 December because my colleagues had given me time, and I had another meeting at which colleagues could take whatever steps they felt then appropriate if they wished to give advice to Westland's board. That was the very least that the Government could do in common courtesy to the Ministers of other allied countries who had already made and still had to make such efforts to consolidate the offers for the rescue of Westland.
  It is now well known that that meeting on Friday never took place. The board of Westland threw out the British Aerospace-European proposals as though they were a mere public relations handout. Collective judgment had been frustrated. I had no doubt where my duties lay. I had been entrusted by my Cabinet colleagues to seek a European deal. I had been entrusted by my European colleagues with the advocacy of their case. I therefore circulated details to my colleagues in Cabinet and sought a collective decision. That was denied me. I was told not to raise the matter in Cabinet. I refused to be silent. I protested about the cancelled meeting in Cabinet on 12 December. The Cabinet minutes did not record my protest.
  At the next Cabinet meeting, on Thursday 19 December, it was stated that we should show no preference. I explained that events would shortly unfold that would cause us to rethink that position. The next day, British Aerospace, the General Electric Co. and the Europeans put forward a full proposal. I again asked for collective judgment. It was again denied me.
  I explained that I would have to answer questions on defence procurement policies or the resulting uncertainty about the European proposals would be fatally darnaging. This was not challenged in Cabinet; but otherwise the public controversy was to be cooled and there were to be no ministerial public statements. That night, the Secretary of State for Trade and Industry implied that I was holding a pistol to Sikorsky's head. I did not respond to those words. On Sunday, he spoke on radio and recorded a broadcast for "The World This Weekend". The BBC informed me, and I agreed to respond only if I was convinced that he had broadcast. I heard the broadcast by the Secretary of State and agreed to go ahead. Efforts were made to stop the programme—[HON. MEMBERS: "Oh."]—but I was told that, whatever the Secretary of State for Trade and Industry did, I was not to appear. I could not accept such one-sided treatment.

  1107
  I withdraw not one word of my account of the Prime Minister's reply to Sir John Cuckney on new year's eve. Sir John wrote to the Prime Minister, in my view, to get answers that were perhaps different from those he had got from the Secretary of State for Defence. There was a draft of an indicated reply. It was sent to the Department of Trade and Industry and not the Ministry of Defence. There was an intervention by the Law Officers which materially changed the sense of the proposed reply.
  I do not think that there is any point in delaying the House with more details of the events as they unfolded. I say at once that I would not support the form of inquiry suggested by the official Opposition, because I believe that there is ample precedent in the instruments of the House, which I did all in within my power to support when they were brought into existence to make any full exploration of the circumstances that the House may consider necessary, but, if there is to be an inquiry, I would expect to be called to account for everything that I have said and my role to be fully and carefully examined in detail.
  Suffice it to say that the culmination of events came in the Cabinet on 9 January. We were supposed to be evenhanded, leaving the matter to the shareholders, standing back. At that late stage, there was perhaps, realistically, nothing else to do once the board had made its final, and in my view ill-judged, recommendation. There were then selective leaks from the Law Officers' letters, which were used, wrongly, to damage my credibility. The Foreign Office instructed the British ambassador in Rome to ask the Italian Government to send no more messages of support for the European consortium. [HON. MEMBERS: "It is a scandal."]
  The Secretary of State for Trade and Industry urged the managing director of the leading company in the British consortium to withdraw in the national interest. I reported that incident at once on Wednesday night to No. 10 Downing street. The next morning, in Cabinet, it was suggested that all answers to questions on Westland should be submitted to the Cabinet Office before release.
  Mr. Hugh Dykes: Will my right hon. Friend give way?
  Mr. Heseltine: No.
  This included answers to questions which already publicly carried my name. I had no confidence, in the light of what had already happened, that such a constraint would be used fairly or without prejudice to the interests of the British-European offer. What I had said with confidence one week would be at the mercy of the most trivial form of interdepartmental squabbling over words. The board of Westland could have been forgiven for seeking to exploit those uncertainties.
  I was with great pride Secretary of State for Defence in Her Majesty's Government. There are special responsibilities in that job, and one of them is a conviction in one's capacity to do whatever one believes to be right and against all pressures. With great regret, but no doubt, I left the Government.
  5.38 pm
  Mr. James Callaghan: I have listened over a long period to many great speeches. I do not think that I have ever heard a resignation speech in which the position of the resigner has been so firmly
  1108
  founded as the one we have heard today. It is inconceivable that the Prime Minister and the Government should refuse some form of inquiry into the allegations of the right hon. Member for Henley (Mr. Heseltine). He has made statements that directly contradict points made by the Prime Minister and others of her Ministers. There can be no confidence in the Government until this matter is cleared up. I say to the right hon. Lady that in the interests of good government she has a responsibility to see that the right hon. Gentleman's points are fully examined independently and that the truth is asserted and delivered to the House.
  The decision to resign is not an easy one to make. It means parting with friends and colleagues. It means that whispers and slanders and untruths will be told about the person who has resigned. When a person resigns he will be told that he has weakened the party, and it will undoubtedly be said that he is fulfilling some long-range ambition. I am sure that it is an agonising decision. Sometimes resignations do not take place on great issues. They are sometimes the culmination of a long series of frustrations which eventually explode and boil over.
  I listened to the right hon. Gentleman outlining the framework, the philosophy, against which he was taking these decisions and carrying out, up to a certain point, what he believed to be Government policy, and I contrasted his speech with the turbid recital of dates that we had from the Prime Minister. I have no doubt who has so far had the better of this argument. I salute the right hon. Gentleman for his courage in resigning. He will have a difficult path ahead of him. I do not believe he planned it, nor do I believe the Prime Minister wanted to push him out. It is one of those inevitable consequences of two stubborn people meeting and neither being willing to give way. When stubborn temperaments clash, we may well ask what the rest of the Cabinet was doing to try to prevent—[Interruption.] If my hon. Friends are interested I will return to this point a little later.
  We are not dealing just with a clash of two strong personalities, as has been brought out by the right hon. Gentleman, because there are important public issues at stake that the House should address. The first issue is the future of this insolvent company. Can it be given a prosperous future? As we have been told by the Prime Minister and the right hon. Gentleman, the background is fairly straightforward. When it first fell into trouble both the Secretary of State for Trade and Industry and the right hon. Gentleman were in favour of and ready to adopt a European solution, taking along with them, perhaps, a rather unenthusiastic Prime Minister.
  Before such a European solution could be adopted, it was necessary for the Government to put some work into Westland and, as has been made clear to us, they were not ready or able at that stage to do so. The future for the company was grim, and I have no doubt that it was with thankfulness that the Prime Minister and the other Ministers involved learnt that Sikorsky was ready in July to offer both finance and work so that the company could carry on. In its weak position the company eagerly grasped that, as there seemed to be no other future. Much later this prompted the European Governments and companies to come forward with a proposal for collaboration.
  Criticism may be made of the European consortium in that it did not come forward earlier in view of the 1978 agreement for which my Government were responsible. But it did come forward, and the Government have not yet

  1109
  explained to my satisfaction and to the satisfaction of many others why they did not examine the European option as fully as they should have done. It is at this stage that the first criticism of the Government must be made, and so far the right hon. Gentleman has made the case that there was inadequate consideration.
  The Prime Minister's defence this afternoon was that the company had to produce its accounts by the end of the year and would have shown a loss of £100 million, and that without any financial reconstruction in sight it would have had to go into receivership. There was a great deal to be said for that solution and I understand that at certain stages the right hon. Gentleman put forward that solution.
  What is the position of this company today? We are told that the shareholders will take a decision. But that decision will not be in the hands of the shareholders if the banks choose to exercise their powers. If the National Westminster bank and Barclays bank were to say tomorrow that they refused to cover the borrowings of this company any further, the company would immediately go into receivership. The shares that are now changing hands at £1·25 each are worthless—pretty well worthless; I exaggerated slightly but not by much. On Friday the shareholders will take decisions on shares which have little value and those decisions will be on matters of supreme national interest. I want to demonstrate why this is so.
  Westland is not a unique company, especially in the defence field. As the right hon. Gentleman said, to some extent the company depends on collaboration with others and on foreign technology in its work. That illustrates the important and central issue with which he started his speech, that for many years Britain, like other medium-sized countries, has not been capable of meeting its arms requirements from its own arsenals. The question of what policy we should adopt in purchasing arms from other countries or in co-operating with other manufacturers in joint production is not a new issue.
  The House is aware that there is much history and there are many precedents on policy decisions to assist a Government confronted with a problem such as Westland. The Government were faced with the two options and the Prime Minister seems to have conducted the discussions, especially in the last two or three weeks, with all the restraint and rationality of a Saturday late night pub dispute after the pub has closed and people emerge with black eyes. The Secretary of State walks out of the Cabinet and the Leader of the House has an uncomfortable half hour on television. The Solicitor-General has his letter leaked without his knowledge, the poor pathetic Secretary of State for Trade and Industry has to weave his way around half truths and evasions and then has to come back and confess. It has been a miserable week for the lot of them on the Government side. [Interruption.] The hon. Gentleman is not yet on the Front Bench but I am sure he will be one day if this lot go on as they are.
  The work force has spoken out strongly in favour of Sikorsky and the opinion of the work force should be respected—[Interruption.] I will not give way —[Interruption.] I am told that the hon. Gentleman has Barbara Castle's diaries. I have not read them, so I shall not give way as I would not be able to answer his question. If the House will allow me I would like to make a serious speech. The work force has said strongly that it wants the Sikorsky solution and we must respect its opinion. It believes that the Sikorsky solution will give it the best chance of retaining its skills. None of us can give the
  1110
  workers a clear assurance that if the Sikorsky solution is adopted it will give them a future, and that is by virtue of some of the reasons given by the right hon. Member for Henley.
  Mr. Ashdown: Or from the other solution either.
  Mr. Callaghan: There is, for example, one company that would certainly have a future. I am sure many people will echo what the right hon. Gentleman had to say about the disgraceful way in which huge blocks of shares are being bought and sold by faceless individuals who will then throw the shares into the scales on Friday. This kind of predatory company acquisition has nothing to do with the efficiency of the market place about which Conservative Members are always regaling us. It has nothing to do with the productivity of the work force, and the defenders of unbridled capitalism will be hard put to it to argue that what is happening in the City of London this week is the best way to safeguard the future of one of our defence industries.
  He would be a bold man who would reassure Westland that its future was secure. After all, Sikorsky, as has been pointed out this afternoon, is not the principal in the matter. It is one of the divisions of United Technologies, a vast American corporation, to whom the investment of a few million pounds in Westland is no more than the office petty cash.
  I shall forecast one likely pattern of development. Sikorsky, despite its 10 per cent., will dominate the future of Westland and its policy. It will use Westland as a useful tool to attack the rest of the European helicopter industry. In which case, Aerospatiale will survive because France will determine that it survives, unlike this Government's attitude. Fiat, already linked with Sikorsky, will make a bid for Agusta and the Americans will secure a dominant position in Italy. That is not the way to conduct American-European defence procurement—in their interests or ours.
  We need a basis of equality in our relationships, and the helicopter agreement, to which the right hon. Member for Henley referred in his statement of resignation, was intended to secure that basis of equality between Europe and America. That is not anti-Americanism. It springs from the understanding that a true partnership requires equality between the partners. If one partner can do without the other, there is no real partnership.
  I speak today because there is history to guide us on these matters which the Government have neglected. Eight years ago—the House will have noted the date 1978—the Boeing aircraft company was on the prowl in Europe, dangling offers of joint production in front of British aircraft firms as well as those in Italy and France.
  At that time, British Aerospace was a nationalised company and the Labour Government were brought into discussions with Boeing at an early stage. I had become Prime Minister and I made it my business to meet the leaders of Boeing and the other American aircraft companies in Washington. After a long series of discussions, my advisers and I came to the conclusion that, despite the offer that Boeing was making of an apparently equal partnership with British Aerospace, the consequences, whatever its intentions at the time, would have been different. Boeing's long-term aim was to choke the infant Airbus, to suck the technology out of British Aerospace and to reduce its role to that of a sub-contractor.

  1111
  The principal officials of British Aerospace were of the same mind as my colleagues in the Cabinet. We authorised fresh vigour to be imparted into our negotiations with France and Germany with a view to a joint European production of the Airbus. It was a difficult negotiation. At one stage it involved President Giscard and Chancellor Schmidt before the three countries could reach an agreement. But we did, and the results today—this surely has a moral for helicopter production—is that Europe has an independent aircraft industry; that British Aerospace is renowed as one of the foremost manufacturers of wings in the world; and even American airlines are buying the European Airbus.
  If only the Government had shown the same enthusiasm, had overruled some of Sir John Cuckney's proposals and had secured his enthusiastic co-operation, and if the right hon. Gentleman had been allowed to pursue the line that he was following, the result might have been different.
  We had other problems in 1978 with the Americans over the financing of Rolls-Royce engines. We got the Export Credits Guarantee Department, on what I believe was a good piece of financing, to support the sale of Rolls-Royce engines to American companies. The Americans accused us of unfair competition. They went to Congress. The matter was taken up by President Carter. I was in Washington again. We had a talk about the matter with the American Secretary to the Treasury, and I say in fairness to the Secretary of State for Trade and Industry that he would have been on a fair point if he had limited his conversation with Sir Raymond Lygo to pointing out the dangers that British Aerospace was running, and of anti-American sentiment. I must say, however, in view of the present position of the Airbus and its American relationship, that it would have been rather like teaching his grandfather to suck eggs.
  Our experience was that, although we had a rough passage with the Carter Administration for several months, which needed a great deal of smoothing over, in the end, the President and I recognised that the Americans were fighting their corner and that we were fighting ours. We both made a calculation of where our national interests lay. Surely the moral is that the Secretary of State for Trade and Industry should not have been so timorous as to pressurise British Aerospace to withdraw because he was afraid of American displeasure. [Interruption.] I am not sure what the right hon. and learned Gentleman is saying, but if he wishes to interrupt I shall gladly give way.
  The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Leon Brittan): I am simply repeating what I said to the House and what is confirmed by the official record, which is corroborated by three senior officials who worked, I imagine, for the right hon. Gentleman's Government and whose integrity was not questioned, and by my hon. Friend the Minister of State. At no stage did I ask British Aerospace to withdraw.
  Mr. Callaghan: It is extraordinary, is it not, that when there is a difference of opinion between the Prime Minister and the right hon. Member for Henley, it is the Prime Minister who is correct. When there is a difference between the Secretary of State for Trade and Industry and Sir Raymond Lygo, it is the Secretary of State who is
  1112
  correct. The Secretary of State is still muttering. Despite his vehemence, I cannot say which version is the truth. I say to the right hon. and learned Gentleman and to the Prime Minister, how does she think that the Government can keep any respect when there is a direct contradiction between the letters that we hold in our hands and what the Secretary of State has just said?
  The European Nations—the Secretary of State is not worth wasting time over—decided on the helicopter declaration agreement for three reasons. First, we were fearful that the United States in its vigour, appetite and size would swallow us one by one. Secondly, in those technologically advanced sectors, the need to invest huge resources in research and development forces even market leaders into collaborative deals with their competitors, leading to common sourcing of components and much else. The third consideration was the failure of the two-way street, an arrangement under which America undertook to purchase part of its defence requirements from Europe to offset the huge flow of American equipment purchased by Europe. Both sides were to purchase from each other.
  I heard what the right hon. Member for Henley said about some of the traffic that had gone the other way. If the right hon. Gentleman were to draw up a balance sheet of the two—if I may continue my metaphor of the two-way street—all the American vehicles were pouring down the track towards us, but we had nothing but a rather broken down cycle for the return journey.
  Those important policy considerations do not seem to have been taken fully into account. I have mentioned three factors—the fact that we were going to be demolished by the Americans, one by one, the need for technological collaboration and the failure of the two-way street—which do not seem to have been given the consideration that they should have been given.
  I come to the Prime Minister's conduct. The right hon. Member for Henley claims that it amounts to a constitutional outrage. With respect, I believe that that is overegging the pudding. Every Prime Minister has his or her style of conducting Government. It is up to the Cabinet whether it puts up with it or not. That lot will put up with almost anything. There is the well-known example of Attlee's strong rebuke to Churchill over conduct of the wartime Cabinet. We have since been told that Mrs. Churchill apparently agreed with Attlee. She told Winston so, and then he tried to mend his ways. I wonder whether there is a role here for some other sensible spouse? The right hon. Gentleman let the cat out of the bag by publicly blowing the gaff on what his less courageous colleagues have long whispered behind their hands: that they find the Prime Minister's method of conducting business objectionable. I think that the House can understand what they are getting at.
  But what were Ministers doing during this period of growing controversy between the Secretary of State for Defence and the Prime Minister? Was the Chancellor of the Exchequer doing his best to calm things down? I suppose that the Foreign Secretary was off on one of his foreign travels and that he was not available to help. But what about the ebullient tones of the Leader of the House? Where was the Chief Whip? What were all these Ministers doing while this issue was boiling up? I can only say to them all that if they behave like mice they must expect to be chased and that if they act like doormats they must expect the Prime Minister to trample all over them. I am

  1113
  bound to say to the Ministers who are sitting on the Treasury Bench today that, with one or two exceptions, the present Cabinet has less spirit and contains fewer men of talent than any Conservative Government since the war. Most of them are sitting outside it. I wonder whether the Prime Minister ever considers whether the fault is that the tallest tree in the forest will not allow any substantial growth in her shade?
  However, all is not lost. If the Ministers play their cards properly, the resignation of the right hon. Member for Henley has given them another chance. He is the sacrificial lamb, although he will be a pretty tough lamb to digest. They can now, if they choose, re-establish Cabinet authority, because the Prime Minister dare not risk another resignation on the same grounds. If the Ministers care to do so, they can now rein in these authoritarian instincts that they tell us they find so objectionable.—[HON. MEMBERS: "They would not dare."] If they do not dare to do so, then it is a job for the Back Benchers. And if the Back Benchers do not, in due course the electorate will.
  The right hon. Member for Henley told us that just before he left the Cabinet meeting there was not a single member of the Cabinet who supported him. He should not worry overmuch about that. There is a precedent. When Anthony Eden left the Conservative Government in 1938 in disgust at Neville Chamberlain's willingness to treat with Mussolini behind Eden's back he could not find a single supporter to speak for him in the Cabinet, but two years later Eden was back and Chamberlain was out. In case the thought has ever crossed the right hon. Gentleman's mind—although I do not suppose that it has—let me remind him that Eden went on to become Prime Minister.
  As for the Secretary of State for Trade and Industry, I have been screwing myself up to try to find something favourable to say about him and to try to show some understanding for his position. I fear that the trouble is that the decent instincts that I am sure he possesses have, somewhere, become atrophied behind that lawyer's mask. I say to him in all seriousness that on Monday he failed to understand or to weigh properly his responsibilities to the House on the one hand and to British Aerospace on the other. The House is aware that commercial matters have always been given special confidentiality by the Department of Trade and by Government generally in the conduct of Government business, for obvious reasons. The fact that a letter was marked "Private and Strictly Confidential" should certainly have led him to refuse to divulge its contents but never to deny its existence.
  Last Monday the Secretary of State should have let his instincts guide him. Then he would not have had to weave and shuffle as he did and eventually be forced to come back to the House and confess. He has had an awful lesson, but by his demeanour since I wonder whether he has learnt that lesson and whether he really understands the House of Commons. If he does not, the sooner he goes back to the Bar and makes his reputation there the better.
  My right hon. Friend the Leader of the Opposition has called for an inquiry. I repeat to the Prime Minister that, whether or not she accepts this form of inquiry, it is now absolutely imperative that these matters should be inquired into if confidence is to be restored in the Government's position and integrity. The inquiry should, I suggest, go a little wider. It should also review some of the policy questions raised by the right hon. Member for Henley—
  1114
  and I hope by me, too—about how to carry further European defence procurement co-operation and how to integrate this with the Atlantic Alliance.
  The Prime Minister cannot be very proud of the way that she and her colleagues have handled the future of Westland. If the Sikorsky offer is accepted, it will be the wrong decision: wrong for this country, wrong for European co-operation and wrong for European-American relations. What has happened shows, I regret, a readiness to ignore the lessons of the past, a refusal to examine seriously the European option, an attempt to deceive by saying one thing in public and doing another thing in private. Most dangerous of all, it shows a lack of understanding by the Prime Minister of the way to handle her colleagues in order to get them to work as a team. For her, the verdict must be that it is getting very late.
  6.6 pm
  Mr. Jim Spicer: I have an almost impossible task in following the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), the Father of the House. I shall not attempt to follow the broad-brush approach that he has used during the last half hour. However, at one point he said that he intended to speak about the workers at Westland. I hope that at this point, as I speak about the workers at Westland, the right hon. Gentleman will pay some slight attention. Three or four hon. Members have a constituency interest in Westland. We form a strange alliance. I refer to the hon. Members for Yeovil (Mr. Ashdown) and for Isle of Wight (Mr. Ross), my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) myself and one or two other hon. Members. Over the years we have followed Westland's fortunes and we speak from experience of that company. When the tumult and the shouting has died away and when all the politicans have departed, having had their say about the dates of various meetings and their outcome, the problems of Westland and companies like it will not have disappeared. Therefore, we should address ourselves briefly this afternoon to Westland's problems and I will not go very far away from that main point.
  All hon. Members who fall into this category knew quite well that in the spring of 1985 Westland was in deep and dire trouble. There was the possibility of a cancellation of the Indian order and there was a lack of orders for the W30. My right hon. Friend the Prime Minister mentioned that a year or 18 months ago the storm clouds began to grow over Westland. We were made well aware of that fact by management and also by the trade unions and workers at Westland. It was against the background of a worsening situation that Sir John Cuckney took up the incredibly difficult task of chairmanship of the company. When he was appointed I did not hear one word of criticism from the Government or the House of his appointment or of the board. He had an almost impossible task to perform and he set about it with vigour.
  In the interests of the board, the shareholders and the workers of Westland, there are three simple questions that I believe must be answered during this debate. As is often the case during some debates, the answer is known before the question is put but I ask my right hon. Friend the Member for Henley (Mr. Heseltine) when Sir John Cuckney first went to the Ministry of Defence to ask for help, to explain the problems facing the company and to point out the obvious future if that help did not arrive.
  Mr. Heseltine: Sir John Cuckney rightly went to the Ministry of Defence very early on. I had to refer him to the Department of Trade and Industry, which is responsible for taking decisions about how rescue operations should be handled.
  Mr. Spicer: I accept that. This first meeting took place on 17 July. I fully accept that the Ministry of Defence was not the sponsoring Department. However, my right hon. Friend the Member for Henley has made it clear during the debate how vital that Department's interests are and how important it was for there to be continuity of supplies from Westland to the Ministry of Defence.
  My understanding is that when Sir John Cuckney went to the Ministry of Defence on 17 July he did not receive any promise of direct support from the Minister either in trying to get together a European consortium or any direct intervention from the Government because my right hon. Friend the then Secretary of State made it clear that he would be against any direct intervention at that stage. Therefore, the possibility of bankruptcy loomed large.
  My second question is: what would have happened to Westland if Sikorsky had not come forward with its offer? I emphasise that the offer did not just appear at the end of September or October. At the end of July Sikorsky, as a friend of Westland, was beginning to talk, even in Washington, about the problems of Westland and saying that it had worked with Westland for a long time and it wondered whether it could help in any way. That news must have filtered back, if not in July then early in August, and it was quite clear that there would be a move by the Americans at an early stage.
  What would have happened if Sikorsky had not come forward? The chairman of Westland, having spoken to the Secretary of State for Defence and the Secretary of State for Trade and Industry, went round to speak to British Aerospace, the General Electric Company, Aerospatiale, Agusta and Messerschmitt. All of those companies said that it was bad luck and that they were sorry. However, we all know that, with the exception of Agusta, which was genuinely concerned because of its collaboration with Westland, they were all hoping that when Westland went into bankruptcy they would pick up the pieces. Some were happy that a company which might have been a future contender was going out of business. Those were the problems that Sir John Cuckney faced in July and August.
  British Aerospace is leading the European consortium. Firm guarantees should have been given to British Aerospace from all the partners in the European consortium that they will be willing and able to live up to their commitment of providing genuine work for Westland over the next three or four years. My right hon. Friend the Member for Henley took part in the "Panorama" programme on Monday and he knows the reaction of the Westland workers as they listened to that debate. There must be no mistake: Agusta and Aerospatiale are not in good shape at the moment.
  Also, the memories of the workers at Westland are long and they do not need to be reminded of the agreement made in 1968 between Aerospatiale and Westland, which was to be a splendid example of collaboration. With the connivance of Aerospatiale the French Government broke that agreement almost immediately and halved their order for Lynx helicopters from Westland. One cannot blame the workers or management of Westland if they remember that occasion and if they fear that it might be repeated.
  Mr. Stephen Ross: Does the hon. Gentleman agree that the managing director of Westland has been telling the work force that he has attended at least three meetings with the French and the Italians in recent months and has had little support from them?
  Mr. Spicer: I made that point earlier on. It was in July and August that the exchanges took place and there was no support and no clear-cut commitment. The tragedy of the resignation of the right hon. Member for Henley is that he has been a leading and respected figure in bringing the European concept together. With his support behind it, a future European consortium for helicopters would have carried more weight and conviction. Now that he has resigned I have less sense of conviction about the way in which that cobbled-together European commitment will hold up under the stresses and strains that will come about over the next few months and in the years ahead.
  Mr. Dalyell: I visited Westland on 21 November as the company's guest. That was when the problems were starting. It was my impression, as a visitor—I cannot put it higher—that the workers were deeply worried because they had not been told what the various options and possibilities were. They were worried about the constant changes in management and in decision-making. Can the hon. Gentleman tell us whether the European option as it is now put forward has been fully spelt out? I do not know.
  Mr. Spicer: I thank the hon. Gentleman for that comment, because it serves to illustrate my point. There is not a single person, including Sir John Cuckney and Members of the House, who in July or August would not have welcomed the sight of two contenders emerging at the same time. We would then have had a race, and the winner would have been fleetest of foot and the one that was prepared to offer the most to the Westland workers and shareholders. The fact that that did not happen is an indictment of what happened during the period from July until September. In my view, the European offer was too little too late.
  Mr. Ashdown: I will try to assist the hon. Gentleman in answering the previous question. I am aware of the criticisms mentioned by the hon. Member for Linlithgow (Mr. Dalyell) about the deficiencies in the spread of information to the work force of Westland. It may be helpful to the hon. Gentleman to know that the members of the work force that I have consulted, from the trade unions to the shop floor, feel that over the past two or three weeks they have been provided with a magnificent service of briefing by the management and are now well aware of the full details.
  Mr. Spicer: The hon. Gentleman is well qualified to speak on that. His work at Westland is well known and respected.
  If the European offer had been made two or three months earlier there would not have been the same confusion in November or December. That is the nub of the problem. It is no wonder that the work force, the shareholders and the board of Westland look upon Sikorsky as a friend in need.
  There comes a time in all walks of life when one has to stand by someone who has helped one out before. Half of the problem about the way in which this whole affair has been dealt with by the board is that it did not have a

  1117
  convincing offer early enough. It knows in its heart of hearts that all those great European companies wanted to see Westland go into liquidation, and that cannot be a welcome thought.
  Mr. Nicholas Baker: I am grateful to my hon. Friend for giving way; one neighbour cannot possibly refuse another. I am interested in what he said because a number of my constituents work for Westland. No one could fail to understand why the work force, given the direction of the board and the view that it takes in this matter, is now of the view that it is. But it is hard to understand from the account that we have heard this afternoon, however late the British-European consortium deal has come along, the apparent inadequacy of the consideration given to that proposal — not previous proposals but that proposal which my right hon. Friend the Member for Henley said is something that could only be Minister-led — by the Westland board of directors for the benefit of the company.
  Mr. Spicer: My hon. Friend makes a point, but I can only say that the board of Westland has lived for the past three months with the nightmare of liquidation hanging over it. There comes a time when one no longer has the opportunity or the time and decisions are made in haste. It is a tragedy that such a situation has been allowed to come about. I would say only that those of our constituents who work there have a much better future now than seemed possible six months ago. For that we have to thank the Government, my right hon. Friends the Prime Minister, the former Secretary of State for Defence and the Secretary of State for Trade and Industry.
  6.22 pm
  Mr. Ken Eastham: The House has been concentrating its attention on the activities of the Cabinet during the past two or three weeks. I shall not dwell on that because it has been more than adequately dealt with by my right hon. Friends the Leader of the Opposition and the Member for Cardiff, South and Penarth (Mr. Callaghan).
  It should be recognised that the crisis has lasted now for well over a year. Deplorable activities have taken place with regard to the personal conduct of members of the Cabinet but I want to put on record some of the facts of the unfortunate situation in which the company finds itself.
  The hon. Member for Dorset, West (Mr. Spicer) said that he had a constituency interest and referred to one or two alliance Members. I also have an interest, being an engineer by training and a member of the Amalgamated Union of Engineering Workers. We have a great interest in the fact that 7,000 workers are involved. For that reason I and my hon. Friends have during the past year continually asked questions during Question Time on defence matters and made representations which have evidently fallen on deaf ears.
  Numerous deputations have come to the House of Commons to meet Labour Members. There have been deputations from management and trade unions. I remember one meeting a few months ago when the management briefed Labour Members. They came along with slides and advised us in great detail just how critical their position was. At the same time, they also pointed out the problems of suppliers in the helicopter industry. We should remind ourselves that suppliers in other parts of the
  1118
  country are involved with the engines, electrics, instruments, metals and several other major components, and they are desperately interested in maintaining their companies and the jobs in them.
  The last meeting that we had with the trade union group from Westland took place on 12 December. Its members said that they did not want to be treated as political footballs. Understandably, we had a great deal of sympathy with them. That is exactly how Labour Members felt the workers had been treated. It is all right being concerned about the shareholders and the stock exchange, but there has been little comment during the debate on the livelihoods of so many families who are dependent on the contracts. Et is not due to any failings on the part of this group of skilled workers that they find themselves in a difficult position.
  On 12 December the members of the engineering union told us that on numerous occasions the management had encouraged them to come to Westminster to lobby Members on behalf of the company. Suddenly, a directive was issued by the company forbidding trade union members from doing that. 1 was rather suspicious about such a trend.
  Numerous deputations went to the Ministry of Defence and I joined one or two. We met the Minister with responsibility for defence procurement when we made special pleadings, explaining the desperate situation that the company was in. The Minister sat rather stony faced and gave us no encouragement whatever. We pleaded with him to tell the company what was required. We asked him, if he did not know the specification, to turn to his expert advisers to find out what kind of helicopter he wished the company to tender for. The reply from the Minister and his civil servants was to advise us that they did not know what specification the armed services required. I can understand that, but it is like constantly moving the goalposts. The management do the tendering and say what can be done and suddenly the civil servants change the specification. I remember pointing out to the Minister that it was not good enough for the company to be at the whim of the Ministry which, in six months, would provide such a specification.
  Sir Adam Butler: I think that the hon. Gentleman is referring to one or more occasions when he came to see me about AST 404. He must not distort the record. He knows that there was no question of the civil servants changing the goalposts; it was the Army, which, in the light of experience on various manoevres, decided that it did not want the smaller helicopter. It had to go back to the drawing board and see what was needed. That is what I told the House and his delegation when he came to see me.
  Mr. Eastham: I am not in any way distorting the facts; I am but stating the simple fact that the company was given no indication of the required specifications. At that meeting, I told the Minister that it was unrealistic to expect a company to continue to meet a wage bill when it was not obtaining the necessary contracts essential to its survival. Other hon. Members were present at that meeting—
  Mr. George Park: The delegations to which my hon. Friend referred met successive procurement Ministers, not only the right hon. Member for Bosworth (Sir A. Butler). The problem was not only one of the Army making up its mind about what

  1119
  it required — it continually added requirements for further equipment until it reached the point where the aircraft virtually required a new engine. The Army could not make up its mind about how many troops the planes should carry, so the orders could not be placed with Rolls-Royce and negotiations broke down.
  Mr. Eastham: My hon. Friend was present at the meeting to which I referred, and his comments are accurate. It was nothing but a can of worms. The MOD would not help the company by telling it what it really required.
  Although the MOD consistently said that it was unsure of its requirements, shortly before the House rose in December the Minister said that his Department was placing an immediate order for six helicopters. How could the MOD suddenly know what it needed? How was it able to place an immediate order for six Westland helicopters? I have not been given adequate answers to those questions.
  The debate during the last few weeks has centred on the shareholders, so it is especially interesting that the company is now wooing its work force and asking it which company it would like to succeed. I am not making a case about which firm should own Westland, but perhaps in future takeover bids for other companies the managements and shareholders will follow the precedent being set by Westland and consult their work forces. However, I doubt that that will happen. Workers should beware of Greeks bearing gifts. If Sikorsky takes over Westland, they can be sure that it will be the last time that they are consulted. They will certainly not be consulted about any slimming down of the work force and the consequent redundancies.
  Mr. Ashdown: The hon. Gentleman persists in carrying on the misunderstanding widely perpetrated by the former Secretary of State for Defence that Westland will fall under effective American control if the Sikorsky bid succeeds. Can the hon. Gentleman explain how a partnership shareholding of less than 20 per cent. is effective control?
  Mr. Eastham: I do not want to become involved in share ownership. My prime interest lies in ensuring that the skilled engineers retain the jobs to which they are entitled. I believe that to be a legitimate point.
  Much has been said about the American proposal, and the trade unions have studied it with great interest. A meeting in Brussels last Monday with the vice president of the Commission, Mr. Narjes, was attended by Mr. Jack Whyman of the AUEW, who is chairman for the trade unions, assisted by Mr. Chris Darke of AUEW-TASS. There were also three representatives from France, one from Germany and three from Italy. They said in their written account of the meeting:
  "Following a full and frank discussion, we all agreed on the need for European co-operation in Aerospace and the following statement was issued to the Trade Unions.
  On behalf of the EMF Bureau, a delegation composed of representation of EMF affiliated organisation in the UK, Germany, France and Italy met with Mr. Karl-Heinz Narjes, Vice President of the European Commission, whose responsibilities include industrial policy, on Monday 13th January, 1986 in order to discuss the future of Westland.
  The EMF delegation re-affirmed its support of European co-operation in the aeronautics field and hence chooses the European Consortium option whilst expressing the wish that this does not exclude other groups stressed that this sector, and
  1120
  especially the helicopter sector, is of strategic importance and that European manufacturers are fully capable of meeting demand."
  They also called for a debate within the European Parliament and asked the Commission to make its position known as quickly as possible. They intend to follow up the employment problems arising from whichever option is chosen.
  Usually, we do not hear any mention of trade union interests, yet they have a vital interest. The buying and selling of shares is not the only factor—jobs are on the line, and that is often forgotten.
  I always put a question mark over guarantees that companies might give their workers. Has Sikorsky given any clear guarantee about design and technology work? Are we certain that that will be retained in Britain? Are there guarantees about the manufacturing content of the helicopters—or will there be a system of sub-assembly, with the helicopters arriving in Britain in large cases and the workers getting out their screwdrivers and assembling Sikorsky-brand helicopters made in America? Is it simply a matter of Sikorsky wanting to secure the order book? Is it another example of asset stripping? We all know the consequences of asset stripping—the casualties are the thousands of workers made redundant. Those workers have done nothing wrong; they are the victims of wheeler-dealers.
  The Government should remember that a considerable amount of taxpayers' money has been invested in Westland. Members of Parliament who represent the engineering industry believe that the workers are entitled to job security. The Cabinet has hardly distinguished itself during this affair, and we have all suffered half truths and statements that are supposed to be truths. It is nothing but a can of worms, so I am cautious about Cabinet proposals. A cooling off period is needed so that we can make a proper assessment. The decision is not just for Westland, nor is it for America. It is a decision for Britain and it involves 7,000 jobs.
  Several Hon. Members rose ߞ
  Mr. Deputy Speaker (Sir Paul Dean): Order. Many hon. Members wish to speak in the debate, so I appeal for short contributions.
  6.40 pm
  Mr. Cranley Onslow: I have no wish to detain the House long. I realise that many of my colleagues wish to intervene.
  I must declare that I have no interest in these matters. Although for many years I had a connection with the helicopter industry, none of the events which concern Westland involves anyone with whom I am connected in a professional sense. I know many of the personalities. I do not conceal that from the House. I have known them for many years and I know something about the background.
  I might help the House by mentioning some of the personality involvements which I have had in the affairs of Westland and with the aerospace industry, with my right hon. Friend the Member for Henley (Mr. Heseltine), with whom I served as a junior Minister in the Department of Trade and Industry between 1972 and 1974.
  I regret the course of events that led to my right hon. Friend's resignation, as do most of his colleagues.

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  However, not all of us—not even a minority of us—think that his action was right or that his resignation was for the right reasons.
  If my right hon. Friend the Member for Henley were here, I am sure that he would not deny that between 1972 and 1974 he was an interventionist Minister in an interventionist Government. The Government actually managed the affairs of Rolls-Royce (1971). That Government sought to make the board of the newly constituted British Airways get on with bringing BOAC and BEA together. That Government were deeply concerned about the future of the British Aircraft Corporation, Hawker Siddeley and GEC. The Government sought to influence those companies. That never came to anything, but the Government were interventionists in a positive and thought-through way. My right hon. Friend mentioned the European Space Agency, and there was Concorde and all the European collaboration which that project involved.
  I hope that my right hon. Friend will not mind my saying that he was an interventionist in that term in office and that he showed in his comments today that he is still an interventionist. But he has been an interventionist in a different Government—in a Government who are not committed to intervention. In that fact the House can find the root causes of much of what has happened.
  It is also clear from what my right hon. Friend said that, in the particular case of Westland, the Cabinet had taken a conscious decision that it should not intervene. It is possible to disagree about the reasons for that decision and the merits of the issue. We have heard differing views this evening from hon. Members who have an acquaintance with Westland matters.
  It is important to get one issue straight in the minds of the House and of the public. Westland is not a big company. It is not involved in the highest areas of technology. The company is not crucial to our defence effort. Those facts were no doubt in the mind of the Cabinet when it approached the Westland problems, which have been well known to the House for a year or more.
  Westland is unlike Rolls-Royce. That was a large company in enormous trouble. It had enormous commitments to our national defence efort, to the defence efforts of our friends and allies and to great companies in the United States and elsewhere which could not be allowed to fall. Rolls-Royce could not be allowed to go bankrupt and be bought up—as I said at the time—by the Kamikaze Aircraft Corporation. We could not let Rolls-Royce go. A decision recognising that Westland today is different from Rolls-Royce then is not unreasonable. That decision should not have come as a surprise to my right hon. Friend.
  If there ever was a time when Westland could have been taken into public ownership, it was when the Labour Government were in power. The employees at Westland persuaded Ministers of the day not to nationalise the company. If I had been asked at the time, I should have said that that was probably the only company in the aerospace industry that should have been nationalised. It could have been restructured and been given different management. That could have solved the problems. That opportunity was missed by a Labour Government, not a Conservative Government.
  In its approach to the difficult problem the Cabinet might also have been persuaded, rightly, by the type of arguments deployed by my right hon. Friend the Secretary
  1122
  of State for Transport on one of those almost continuous television chat shows about Westland's problems after Christmas. He argued that unless the Government were prepared to use public funds to bring the company into public ownership they could not force the company to carry out Government policy.
  My right hon. Friend the Member for Henley should have recognised that. He should have seen earlier that his authority must come under severe constraint. It was clear that the majority of the Cabinet, having considered these matters on various occasions, did not think that the disadvantages of whatever solution the Westland board recommended to shareholders were serious enough to warrant intervention by the Government, using public funds. The disadvantages must have included the fact that the company was caught—as we are sometimes—in the crossfire between the Americans and the French.
  We are talking about an industry in which, apart from the American capability—which is considerable—the French are the leading helicopter manufacturers and have the greatest guarantee of support from Government. Some who study such matters would say that the French motives in this affair have simply been to use Westland as a blocking tactic to keep the Americans out of Europe. The French probably have no intention of furthering or fostering the company's capability, of maintaining its design staff or of giving it work which can be relied upon. I pass no judgment, but I think it is right to make that point in answer to the crude, anti-American sentiments voiced by the Opposition.
  Having heard what my right hon. Friend the Member for Henley said about the Alliance and the American defence capability, it seems to me, and to others who also study the subject, that the United States Government's commitment to NATO somewhat exceeds the French Government's commitment. That is to our advantage, not disadvantage.
  The Americans understand the politics, the logistics and the procurement problems of the Alliance. They know that if there is to be a genuine commitment by the United Kingdom to the continuance of the Alliance it must pay off in terms of worthwhile jobs. There is a good case for saying that it is more probable that the Americans will genuinely and positively seek to solve the difficulties of a company such as Westland more than will Aerospatiale. Those are matters about which it is possible to have different opinions. It is reasonable to say that the Government may not agree, but they agree at least that there is no need to intervene and that, without detriment to the national interest, the decision should be left to the shareholders. The more options that the company has before them, the better.
  My right hon. Friend the Member for Henley should have seen the position sooner — certainly before October. He should have realised that, whatever may have been said to him, he was not authorised to strike a deal with Europe, to pledge the Government's credit or to go beyond the influence that his former Department possesses.
  The Prime Minister was entitled to put an end to disagreement between her Ministers. I say to her with diffidence that when the historians compile their analysis of these events there will be some who will write how remarkably patient and long suffering my right hon. Friend the Prime Minister was during the disagreement. The House knows that I say that not to curry favour with the

  1123
  Prime Minister, but because I believe it to be so. Sometimes hon. Members say things because they believe them to be so.
  In his account of the course of events that led to his resignation—on television and on the radio—my right hon. Friend the Member for Henley complained of a constitutional outrage. In a perceptive article in The Guardian Mr. Hugo Young said that that was hyperbole—exaggeration carried beyond any reasonable point—and I agree with him. Mr. Young gave some examples about what he believed to be constitutional outrage.
  During the Christmas recess I read the diaries of Sir John Colville dealing with his experiences as private secretary to Sir Winston Churchill at Downing street. He relates the time when the Prime Minister had just had a stroke and told his private secretary, "Do not let my Cabinet colleagues know about this. Carry on the Government as if I were in full control." Mr. Colville and Mr. Christopher Soames, as they then were, had the opportunity, if they had wished to take advantage of it, to do just that. Sir John Colville states that to do that would have been a constitutional outrage and he is right. To cancel a Cabinet Committee or to make provisional arrangements for a Cabinet Committee and then not to hold it is not a constitutional outrage. Indeed, I suspect it may have happened before.
  Mr. David Winnick: Will the hon. Member give way?
  Mr. Onslow: I am sorry. There are other hon. Members whom the House may wish to hear, but the hon. Gentleman is not one of them.
  Some of those who have commented on the Westland affair have called it a trauma, which shows the depth to which our education system has descended. I think that they may have meant a drama, which is what it could be called. My main complaint about the coverage of the affair is that it has been made into a melodrama. Much has been magnified, developed and distorted out of all proportion.
  Mr. John Hannam: That is nothing new.
  Mr. Onslow: No, it is nothing new, especially when Parliament is in recess and the media can have a field day. It is standard practice. If the "Today" programme, which is dedicated singlehandedly to getting the nation out of bed on the wrong side every morning, and the rest of the media are allowed a clear run, they will take advantage of it. I do not complain, but I think I am entitled to make the observation.
  I am glad that Parliament is back and that parliamentary matters of great importance can be debated and considered in their proper place, which is in Parliament rather than on the television screen. I am pleased that we have had this debate and I welcome the Government's amendment. I believe that in his speech my right hon. Friend the Member for Henley supported the proposition of a Select Committee process to show its capacity for investigation rather than the type of inquiry suggested by the Opposition.
  Matters must be investigated. Challenges and assertions have been made, which no hon. Member should allow to be lightly brushed aside, such as the unlikely charge by my right hon. Friend about the Foreign Office, which I do not
  1124
  find credible. Things have been said about Sir John Cuckney and Sir Raymond Lygo and even about Sikorsky and civil servants. There are many other cases about which it is important to establish the facts and not simply to hear partial accounts bound by the limitations of a one-day debate.
  It would be interesting and valuable for the House to have from Sir John Cuckney, as chairman called in to rescue the company, an account of the way in which he believed it to be his duty to carry out that function. It is important for Parliament that there should be no prejudging and no leaping to conclusions just because something has been said and an opportunity to deny it has not yet come along. I hope that the House will avoid that temptation from now on.
  The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) mentioned in his speech the affairs of the British Aerospace letter about which we had such a storm in a teacup on Monday night—when the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) came shuffling in from behind his green baize door like a sort of geriatric Jeeves to do all the mischief that he could.
  My right hon. and learned Friend the Secretary of State for Trade and Industry — with with hindsight — could have done better. He should have known from the fact that my right hon. Friend the Member for Henley asked about a letter that he presumed that such a letter existed. It could be assumed that the letter's existence was likely to become public knowledge. However, the contents of the letter were the burden of the matter. Even the right hon. and learned Member for Monklands, East (Mr. Smith), who is so adept at whipping up a parliamentary storm, will concede that this is not the most serious of matters that have engaged the attention of the House. There are serious issues, but that matter need not detain us.
  With due diffidence, Mr. Speaker, if the debate is to be a credit to Parliament, as it should be, it is vital that it should proceed to its conclusion with the House being able to give a fair hearing to both sides. I would say to the Opposition Front Bench that we have recently had the unhappy experience of a type of trial by decibel. I do not believe that the House or the country wish to have that repeated tonight. Nothing is more important than that my right hon. and learned Friend the Secretary of State for Trade and Industry, whom we on this side of the House know and admire, should have an absolutely fair hearing during his reply.
  6.59 pm
  Mr. John Morris: The hon. Member for Woking (Mr. Onslow) described Monday's events as a storm in a teacup. Those events do not deserve that description.
  I do not wish to pursue the apology that the Secretary of State for Trade and Industry made on Monday about the non-disclosure of his awareness of the British Aerospace letter in his reply to my hon. Friends the Members for Bolsover (Mr. Skinner) and for Newcastle upon Tyne, North (Mr. Brown). I wish to query two aspects of the Solicitor-General's letter.
  The House will know how the Law Officers Department generally operates. It is briefed by other Departments, which provide the basic information. It would be extremely unusual if the Law Officers were suddenly to act of their own accord without being requested, briefed or instructed by the Department. The

  1125
  Law Officers are the Government's legal advisers; they do not act on their own. Therefore, one wonders who instructed the Solicitor-General. Who inspired him? Who advised him? How did he come to write his letter? Was it part of the black information campaign being run by No. 10 to denigrate the then Secretary of State for Defence?
  Mr. Winnick: The hon. Member for Woking (Mr. Onslow), who is the chairman of the 1922 Committee, came to the defence of the Prime Minister in a rather shoddy speech. Is my right hon. and learned Friend aware that the deputy chairman of the 1922 Committee is quoted in The London Standard as saying this:
  "The skids are under Leon."
  The London Standard states that the deputy chairman
  "said that Mr. Brittan's job was now in serious jeopardy, Mr. Fox added, 'What we have got to get clear is that there are not two standards, one for one Cabinet Minister and one for another.'"
  Therefore, what the chairman of the 1922 Committee said was contradicted by the vice-chairman.
  Mr. Morris: I am grateful to my hon. Friend, who will be able to develop his point later. But I do not wish to be detracted from the questions to which I seek answers from the Government. Who inspired the Solicitor-General to write his letter? If we get nothing else from the debate, the House deserves and demands an answer to my question about who motivated him to put pen to paper.
  The Solicitor-General states in his letter that he writes on the basis of Cabinet papers, and, he adds,
  "on the basis of the information contained in the documents"—
  those are Cabinet papers and what he has read in The Times—
  "which I emphasise are all that I have seen."
  That is a somewhat unusual phrase for the Solicitor-General to have used, unless he wished to protect himself against a future suggestion that he was inspired to write by someone else. If that is true, who was it and what was the state of knowledge of the Secretary of State for Trade and Industry? Was he full and frank with the House on Monday in reply to my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), who asked:
  "Was the correcting letter from the Law Officers to the Secretary of State for Defence seen by the right hon. and learned Gentleman or his Department before it was sent to the Ministry of Defence?"
  The reply was:
  "I saw the letter after it was sent."—[Official Report, 13 January 1986; Vol. 89, c. 783.]
  That completely ignored the other part of my right hon. Friend's question as to whether the Department had seen it.
  Against that background, I have asked—I want a reply tonight because we cannot wait until tomorrow or Friday when it would normally be given—whether the Secretary of State for Trade and Industry or anyone in his Department saw the Solicitor-General's letter in draft before it was sent. All that he says in his answer is that he saw it after it was sent. Did he see a draft, did he see the material upon which the letter was based, or was he consulted about the contents of the letter before it was sent?
  The purpose of my asking that is this: it is all very well for the Secretary of State during questioning to confine himself narrowly, as he did on the British Aerospace letter, to a precise answer on exactly what he did or saw at any one time. Although he ignored my right hon. Friend's invitation to reply for his Department, he was answering not only for himself, as he said earlier, but for the entire
  1126
  Government. It may be true that he saw the letter only after it was sent, but we know from our experience that letters are prepared in draft. On such a matter, a letter would go to No. 10, come back again and be seen by several people in several Departments, such as the Foreign Office. Although the Secretary of State may be accurate in saying that he saw the letter sent only after the event, can we be sure that he did not see the basis for the letter? In this instance, too, was he less than frank with the House?
  Mr. Dalyell: Does my right hon. and learned Friend believe that it is all the work of an over-zealous civil servant? Would not any civil servant, understandably mindful of his career, be extremely careful to get political instruction before doing any such thing? Would not those exceedingly careful men at the Law Officers Department take infinite trouble in contacting the Departments concerned before they wrote any such letter?
  Mr. Morris: I find it inconceivable—the House will respect my view on this, if on nothing else—that the Law Officers would have sent such a letter without consulting and obtaining the fullest possible instruction from the primary source, which is the Department concerned. In this instance, where the Solicitor-General was writing to correct another hon. Member he would have got full clearance from No. 10, too. That is my experience, and I doubt whether anyone who has served in Government would come to a contrary view. If I am wrong, I am happy to be corrected, but I want a precise answer, not another evasive answer that will cause the Secretary of State for Trade and Industry to return to the House to apologise once again for a half-truth.
  How did the Solicitor-General's letter come to be disclosed in part? Prima facie, such a disclosure is contrary to section 2 of the Official Secrets Act. Who would have authorised that? It would not be in the interests of the Secretary of State for Defence to do so. Indeed, he adopts a high moral tone on disclosures by civil servants or anyone else. He sends for the chief constable of the Ministry of Defence. He consults the Director of Public Prosecutions and the Solicitor-General, who then telephones the Attorney-General in the south of France, or does whatever is necessary to obtain the fullest possible clearance.
  Since the Secretary of State for Defence would not have disclosed the contents of the letter, who would have done so? We are left with the Secretary of State for Trade and Industry or No. 10 Downing street. Only those two parties would have an interest in disclosing the letter and, in all probability, the necessary material on which the letter was based. The Secretary of State agrees that he saw the letter after it was sent. I believe that a couple of hours elapsed before it was leaked from somewhere. Since the Prime Minister has agreed that an internal inquiry procedure has been set up, if evidence is forthcoming during that inquiry — we have had important although not always successful prosecutions under the Official Secrets Act during the past few years—what will happen to the perpetrator of the leak if he is discovered?
  On Monday I asked the Solicitor-General whether, in this context, he considered equality under the law as an important principle. I found some difficulty in phrasing my question and Mr. Speaker in his wisdom eventually agreed to my asking whether other inquiries had been inhibited because of the handling of that matter. In the

  1127
  course of his reply, the Solicitor-General assured me that in the discharge of all their functions, Law Officers exercise an independent and impartial judgment. The assurance I want tonight is whether that independent and impartial judgment will be given if, in the course of the internal inquiries, sufficient material is obtained to refer the matter to those who are responsible for prosecuting. I trust that whoever is responsible for the leak will be dealt with in the normal way—equality under the law—and that the Secretary of State for Trade and Industry can claim tonight that the leak did not come either from him or from his Department. Such an assurance would lift that cloud from his head.
  7.11 pm
  Sir Adam Butler: I will not follow the points made by the right hon. and learned Member for Aberavon (Mr. Morris), although I agree that he has made an important point that needs to be answered. That point, however, is a fairly narrow aspect of the problem.
  I had hoped that my right hon. and hon. Friends would approach the debate with some slight trepidation as to the outcome. Any anxiety that we might have had on that score frankly disappeared when we heard the very weak attack mounted by the Leader of the Opposition. The right hon. Member for Islwyn (Mr. Kinnock) claimed that he intended to talk about the substantive aspects, the importance of high technology, procurement policy and the relationship within NATO. Instead, he dealt solely in innuendo and allegation that were unsubstantiated.
  I would not be surprised if the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) is making a comeback. The right hon. Gentleman entertained us with his considerable wit on matters in which, as I shall show, he is somewhat out of date, not least concerning the factual matters about the two-way street.
  I should like to refer to the exchange of letters and in particular to the recollections of what took place at that now famous meeting between the chief executive of British Aerospace and my right hon. and learned Friend the Secretary of State for Trade and Industry. It does not do individual hon. Members, or the House as a whole, any good to imply, because one accepts completely what one party to the meeting says took place, that the other side is lying. I confess that frequently my recollections of meetings can, although made in good faith, be quite different in detail from those of other people who attended those meetings. In the case of the British Aerospace meeting we have the recollections of four or five people against the recollections of Sir Raymond Lygo.
  I know Sir Raymond Lygo well. He is an honourable man, and he is also a wilful man. Sometimes in such circumstances people hear what they wish to hear. The leader of the Liberal party opened our eyes to that fact and drew the attention of the House to the letter from Sir Austin Pearce that used the phrase:
  "Whatever the words used were meant to convey, the message was perfectly clear."
  In other words, it was not the meaning of the words that was important, but the interpretation that was put upon them. I prefer to accept that there was a misunderstanding on this matter which occurred in good faith and that in no
  1128
  way has my right hon. and learned Friend the Secretary of State for Trade and Industry misled or sought to mislead the House on that issue.
  I agree with my hon. Friend the Member for Woking (Mr. Onslow) in his comments about my right hon. Friend the Member for Henley (Mr. Heseltine), the former Secretary of State for Defence, and his departure from the Cabinet. It is a great pity that my right hon. Friend cannot continue in Government. The Cabinet and the Government need a range of views and men of different experience and outlook and one feature of the Conservative party is that we have accommodated such views. Equally, I believe that it was largely my right hon. Friend's own fault that he was forced to resign.
  We do not yet know the full story and we may never know what actually happened in my right hon. Friend's mind, though we have a better understanding now than we had before. My right hon. Friend's espousal of the European consortium bid, his organising of that bid and his paternalistic approach to that matter — he talked about "my deal that should have been considered by Cabinet"—were factors in his resignation. I told my right hon. Friend that I intended to be critical of him tonight and I am sorry that he is not present. I believe that it was his over-association with that bid that caused him finally to take the step that he did. That was a great pity.
  Mr. Tony Marlow: At some stage in his speech did not my right hon. Friend the Member for Henley (Mr. Heseltine) say that what he wanted was for the Cabinet to give a strong recommendation to the shareholders and management of Westland that they should go for a particular deal? Is that not a peculiar thing for a Conservative Cabinet to do?
  Sir Adam Butler: Does my hon. Friend the Member for Northampton, North (Mr. Marlow) mean peculiar for the Cabinet or peculiar for an individual Minister? I believe that in either case that would be completely wrong.
  My right hon. Friend the Member for Henley was piqued because the consortium's deal was not discussed after Friday 13 December by the Cabinet. Surely the party that should have discussed that was the Westland board and it did so. In the event, it would have been wiser politically, if not better, if the board had been prepared to put both options to the shareholders with a full explanation. It may be that the time pressures about which we have heard were such as to make that impossible.
  My right hon. Friend has earned credit in ensuring that the European consortium bid was firmly on the table. One must ask whether his intervention was necessary. He believes that Governments must be involved when defence collaborative deals are being formulated. I have had some experience of that. My hon. Friend the Member for Dorset, West (Mr. Spicer) drew attention to the long time scale during which bids could have been forthcoming. Bids could have come from GEC which could have bought Westland out of its petty cash. Bids could have been forthcoming from British Aerospace and I believe that the European bid could have been put together earlier. That did not happen, and Westland was under enormous financial pressure and up against its legal responsibilities in regard to continuing trading. Faced with that reality, Westland had to press on with the one genuine possibility that presented itself.
  My right hon. Friend the Member for Henley deserves great credit for his work in connection with defence

  1129
  collaboration in Europe and I gave my right hon. Friend my full support in that matter. The European defence industry will become fully competitive only if it collaborates and will be able to compete with the Americans only if it works together and produces long production runs and if the European NATO allies work to that end.
  The trading position with America is not, as the right hon. Member for Cardiff, South and Penarth described it, a shambles and a virtual one-way street. A few years ago the ratio would have been 4: 1. The proportion may have improved since I left the Government, but the position then was of the order 2: 1. However, the position in Europe as a whole was 6: 1 against Europe.
  My first point with regard to collaboration is a qualification of the need for and importance of such collaboration within European NATO. The Americans must accept that it is in the interests of the Western Alliance that the European pillar of NATO should be strengthened. That will require considerable maturity of response and resistance to the easy pressures for protectionism which may result. That view has friends in Congress and people such as Senator Nunn have chided Europe for its weakness in that respect, but the Americans cannot have it both ways. The Alliance as a whole and the Americans' interest as a whole, internationally and in security terms, will benefit from a stronger Europe.
  Mr. William Cash: Following the points made by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), does my hon. Friend agree that a successful arrangement with Sikorsky does not mean that it will automatically take over and effectively destroy the entire Westland exercise but that, on the contrary, a proper engagement with Westland through Sikorsky may enhance rather than damage the European pillar?
  Sir Adam Butler: I decided to avoid, if possible, advising Westland shareholders which way to vote, so I hesitate to answer that question. As I read what Sir John Cuckney has said in print and through advertisements, I believe that he sees the consequences of the Sikorsky deal as a stronger Westland than otherwise would be the case, and there is some support for the view that a stronger Westland will make for a stronger European helicopter industry than if the collaborative arrangement on the production side had taken place.
  Secondly, although the object of defence collaboration in Europe is excellent, it cannot and must not be exclusive. We have heard how much co-operation already takes place between ourselves and the Americans. That will and should continue, but it should not be exclusive. The same applies to Anglo-Canadian, Anglo-Australian and Anglo-New Zealand co-operation. European defence collaboration is perfect as an ideal, but it must not become an obsession.
  Thirdly, and highly relevant to the decision by the Westland board and shareholders, collaboration will be strongest if it is based on partnerships initiated by industry and on links seen to be of mutual advantage by the companies involved and where there is industrial compatability. Partnerships imposed by Ministers and politicians run the risk of suffering the same fate as the house that was built on sand.
  In response to the question half put by my hon. Friend the Member for Stafford (Mr. Cash), I believe not only
  1130
  that Westland may be stronger in the hands of Sikorsky but that collaboration on important projects such as the EH 101 and the A129 light attack helicopter will not be prejudiced if Agusta faces the situation, a matter on which there have been varying reports in the press. I believe that that collaboration will continue as planned.
  With regard to criticism of the Government's handling of the case, although with hindsight certain slips would not have been made, I believe that in general the Government have behaved very properly. Having decided against the nationalisation route—it is interesting to note that the Leader of the Opposition never even suggested that and had to be reminded of it as an option by one of his Left-wing friends—and having rejected the NEB approach of the Liberal party, the solution had to come from the private sector. As I have said before, as a Minister I considered very carefully the possibility of placing orders with the company, what we should buy if we were to rescue the company in that way and whether we could fill the two to four years' gap in production and thus produce the necessary cash flow to finance the new projects, but the models available to us were either not wanted or wholly unsuitable. As has been pointed out, the Army did not want the W30 even as a gift. However, we supported the company strongly in relation to overseas sales at all levels and especially in relation to India.
  The role of Government as sponsor and purchaser is extremely important and extremely delicate. Government must be even handed and I believe that in this case the Government must state clearly what their procurement policy is likely to be and their views with regard to international relationships. The letter from my right hon. Friend the Prime Minister to Sir John Cuckney spelled that out. In my view, however, the Government cannot say to shareholders, "The national interest is this, so we want: you to forgo what is in your best interests." Government cannot do that in a takeover situation and they cannot do it in this situation. It is for the board to fulfil its legal responsibility to run the company having regard to the interests of the shareholders and of the employees. My private Member's Bill imposing the obligation to have regard to the interests of employees was thrown out by the Labour Government but that requirement is now law. Boards have to run companies with that in mind and that is what the Westland board has been doing.
  I cannot say whether the Westland board is right or wrong, but I believe that it has a better chance of being right than the large number of people who sit on the sidelines and comment from partial knowledge. It is paramount that the shareholders make the right decision when they eventually vote and one must be concerned that their judgment should not be clouded by the political smokescreen that has arisen about certain very important matters. One must be concerned, too, that the Opposition, especially, have regarded this as an opportunity to damage the Government but may well merely damage the prospects of the company.
  Mr. Dalyell: On a point of order, Mr. Deputy Speaker. Can the Secretary of State for Trade and Industry confirm or deny the report on the 7 o'clock news that it was a senior official from the Department of Trade and Industry who leaked the letter from the Law Officers' Department?
  Mr. Deputy Speaker (Mr. Harold Walker): Perhaps the right hon. and learned Gentleman will seek to catch my eye later in the evening.
  7.29 pm
  Mr. Paddy Ashdown: I commence by declaring an interest—I have shares in Westland plc. For fear that people may think that I hold such a large amount that it will sway my judgment, may I explain that, even at their present elevated price, they are worth less than 10. I bought the shares in 1976 in order to attend the annual general meetings of the company and I will be there on Friday.
  If the Government are reaping the whirlwind over the Westland affair, that, frankly, is no more than they deserve. Over the past 15 months, I and other hon. Members from all parties have repeatedly warned the Government of the impending crisis at Westland helicopters. We were joined in this by the trade unions, to which I pay tribute, and the members of the work force. My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) mentioned that in detail in his speech.
  On 8 July 1985, I initiated an Adjournment debate in which I was supported by Conservative and Labour Members. We received scant reply from the Minister for Information Technology, and indeed the Prime Minister referred to this in her speech. This is not the first time that the Government have totally failed to see a major crisis in the making, despite ample warning. I understand that the Prime Minister is reported—contrary to the tone of her speech from which one would assume that Westland has occupied her every waking moment for the past five or six months—in last Sunday's newspapers as complaining at a recent Cabinet meeting that members of the Cabinet had spent three hours discussing an
  "insignificant little company in the South West".
  The Prime Minister is reported as saying:
  "What is the world coming to".
  The world has swiftly descended around her ears.
  It will be remembered that the Prime Minister showed an equivalent disregard for warnings she had received over the apparently insignificant little islands in the south Atlantic some years ago. The word being leaked by the Government is that the judgment of the former Secretary of State for Defence can no longer be trusted. I think we are entitled to be concerned about the judgment of the Prime Minister in failing to identify the importance of these matters and to take action to prevent them from damaging British interests.
  I listened with great care and with admiration to the speech of the former Secretary of State for Defence. Everyone present will remember that speech as a parliamentary occasion until their dying day. The speech was delivered with great sincerity and with considerable ability. I believe that the reasons given by the right hon. Member for Henley (Mr. Heseltine) for resignation were powerfully expressed and could not fail to find sympathy with every hon. Member who heard them. Those matters will go on rumbling.
  The point at which I part company with the right hon. Member for Henley is over some of the details that he provided of his part in the Westland affair. I must say that I was disappointed that, throughout his speech, although I made interventions to him on three occasions—
  Mr. Gerald Howarth: And I did.
  Mr. Ashdown—and although he accepted interventions from all other places in the House, he refused, for
  1132
  reasons of time. I note now that he is not in his place to hear what I have to say as the constituency Member. I find that quite remarkable. One or two people will draw the conclusion from this that some of the facts which the right hon. Gentleman related concerning Westland are shaky, to say the least.
  May I put the record straight concerning the view of Yeovil on the Westland affair? Westland first approached the former Secretary of State for Defence in October 1984—not, as the right hon. Gentleman said, last year. Westland mentioned the possibility of collaboration with the Europeans, but the right hon. Gentleman declined to show any interest. After Sir John Cuckney took over the company in July, he also approached the right hon. Gentleman about the company's problems. He was told that Westland was a private firm which should seek a private solution to its problems.
  I compare this to the noble sentiments that were stated by the right hon. Gentleman in his speech. There was no suggestion at that time of a desire to intervene to help the company. In fact, the right hon. Gentleman candidly admitted in his speech that one of his suggestions was that the company should not survive at all but pass into receivership. Westland also approached members of the consortium which the former Secretary of State for Defence claims to have set up — in his speech he referred to "my deal"—all of whom, in the summer and autumn of last year, turned their backs on Westland.
  GEC and British Aerospace said that they were not interested and privately suggested that they would welcome the company going into receivership so that they could pick up the pieces. The chairman of British Aerospace is even reported to have said that the production line for the new Anglo-Italian helicopter, the EH101, the world-beater that Westland was relying on, should be removed from Yeovil and taken to Brough. How is that for asset stripping? Then the role of those who now seem so eager to join Westland was that of undertaker, not partner. The right hon. Gentleman did absolutely nothing to stop them.
  Mr. Stephen Ross: Will my hon. Friend consider what would have happened to Westland's work force of 1,500 on the Isle of Wight if the company had gone into receivership? Would any European or British company be willing to pick up the pieces of Westland Aerospace in the Isle of Wight?
  Mr. Ashdown: Indeed not. My hon. Friend has made this point powerfully and capably, and I respect him for having done so.
  Westland then approached European aerospace firms for assistance. Again, in every case, they were shown the door. With over-capacity in Europe, all the continental manufacturers, each of which would have been in a similar position to Westland were it not for nationalisation, considered that the easiest way to solve over-capacity was to see Westland go under. This has privately been the primary commercial aim of Aerospatiale for many years. The House is entitled to know, now that European collaboration is so important, why they were not interested six months ago.
  Mr. Cash: Will the hon. Gentleman explain whether he has been entirely consistent — he has berated

  1133
  everyone else in Europe and in this House—in his own attitude to Westland, its shareholders and its employees from the beginning?
  Mr. Ashdown: I thank the hon. Gentleman for his intervention, but for reasons of time this is the last one that I shall accept. I shall come to his point later.
  It was only when Westland had been shown the door by everyone else that it turned to Sikorsky. Let me disabuse the House of some of the propaganda that has been put about concerning Sikorsky. Sikorsky is not, as it has been carefully portrayed, an American bloodsucker waiting to feed off a British firm. That may suit Labour party mythology, but it is at varience with the facts. Sikorsky has been Westland's old and reliable partner for more than 38 years. People in Yeovil trust Sikorsky. The relationship which has stretched over a generation has been warm, even-handed and profitable for both sides. That is why, at a recent meeting, when the two offers were put to the work force, Westland workers voted 1,500 to one in favour of Sikorsky.
  I find it odd to hear from the Labour party that somehow or other the workers are being hoodwinked and duped. What a demeaning view of the work force!
  Ms. Clare Short: Who said that?
  Mr. Austin Mitchell rose—
  Mr. Ashdown: I apologise to the hon. Gentleman, but for reasons of time I will not give way. He may study the record tomorrow and he will see that the record backs me up.
  The vast majority of the small shareholders, in common with the work force, support this deal. It is only the large financial institutions of the City of London which are opposed. It is interesting to note that it is an opinion which the Labour party supports. The shareholders and the work force support this deal because they know that every successful helicopter that Westland has built since the war, with the exception of the Lynx helicopter, has been built under licence from a Sikorsky design. That is precisely what is proposed.
  Far from merely resembling a United States kit, Westland has added its expertise to Sikorsky aircraft to make them world beaters. We have used the aircraft and even Sikorsky admits that they are better than its own. They can sell in places where Sikorsky cannot sell.
  I am sorry to say that, by contrast, Westland's relationship with Aerospatiale has been very different. It has been strained, difficult and infected with perfidy. Only when it became apparent that, because of interest shown by Sikorsky, Westland would not go to the receiver, as many hoped, the ex-Secretary of State for Defence and his present partners decided to act.
  A report in today's Financial Times shows that the ex-Secretary of State's chief official, Sir Clive Whitmore, did not even approach British Aerospace or GEC until a mere seven weeks ago in late November. It is no surprise that we believe that the ex-Secretary of State's consortium is hastily cobbled together and ill-founded. Nor is it without significance that each member of the consortium, which the ex-Secretary of State is lobbying so hard to force down Westland's throat, a few short months ago expressed their preference that the company should go into receivership.
  1134
  Is it any wonder that a constituent recently told me that they feel that they are being offered a poisoned cup from the hand of the poisoner himself?
  The right hon. Member for Henley expressed the view, which also is supported by the Labour party, that Sikorsky is about to own Westlands. Quite the contrary—it will own less than 20 per cent. In terms of finance and work, there is little to chose between the two offers. A recent parliamentary answer to me revealed that the six Sea Kings which are so tantalisingly dangled before Westland's eyes by the ex-Secretary of State if his consortium's proposals are accepted will come to Westland whichever offer it chooses. That offer reduces by 300,000 hours the work offered by the European consortium.
  Even if the offers were equal in quantity, they are not equal in quality. Contrary to the propaganda that is being put about, the Sikorsky-Fiat offer gives more high technology, not less, and provides work in the late 1980s when Westland needs it, not in the early 1990s when it does not. It offers as a partner a firm that Westland has worked with for 37 years, not those who so recently said that they would like the firm to go into the hands of the receiver.
  Perhaps most important of all is the fact that the offer gives Westland two firms to deal with rather than five and one new director on the board, not four. The ex-Secretary of State's proposals would mean Westland having three representatives of foreign Governments because every other European manufacturer is nationalised. It would put on Westland's board directors who represent its chief competitors. Westland is competing against the French in India. It is not difficult to imagine what the role of the Aerospatiale director on the Westland board would be.
  I am a fervent supporter of European collaboration, especially in defence matters. I have long said that, all other things being equal, I would prefer a European deal. I hope that that answers the hon. Member for Stafford (Mr. Cash). Throughout, I have said that I would keep an open mind, that I thought that Sikorsky had the edge but that I would wait and see what happened. Only last week when matters were finalised did I come down in favour of Sikorsky. All other things being equal, I should have preferred a European deal, but all other things were not equal.
  It would be ludicrous to ask Westland to accept any deal simply because it has "Europe" stamped on the outside. Europe is a good thing, but not if the price is increasing the risk to a great firm that has served Britain's defence interests magnificently and to thousands of jobs. The paradox is that the ex-Secretary of State for Defence has hastily cobbled together an inadequately founded deal and has thus damaged the very cause that he would espouse—European collaboration. The ex-Secretary of State claims to have espoused that cause as a matter of principle. He told us that all that he has done has been done as a matter of principle. I have to tell him that we in Yeovil see things somewhat differently. We cannot understand how he can make a principle out of a firm that he was prepared to see go into the hands of the receiver only a few months ago. We do not understand how the man who insists on giving £10 billion to the United States for Trident without British industry getting so much as a look-in should now be concerned about the continuation of a 38-year-old liaison that has profited Britain considerably. We are bewildered that the person who brought cruise missiles to Britain without giving the British people a say in their

  1135
  firing should now be worried about the United States taking over the country. We cannot see how the person who signed a star wars deal with the American President only a few weeks ago to act as a siphon for Britain's real high technology should now be worried about technology leakage from Westland. The ex-Secretary of State might claim all this as a matter of principle, but we see things differently.
  It is essential that Westland's problems be resolved as quickly as possible. Further delay must mean greater risk to it. The management must be allowed to get back to running the company in these delicate circumstances and those who work there must be able to get back to their jobs. The Government must ultimately recognise that, because of their ineptitude—the ex-Secretary of State plays a part in this—the future of a great company that has served Britain magnificently and the security of thousands of jobs and the prosperity of my area is now in the hands of manipulators in the City of London and politicians whose concerns include their reputations rather than exclusively what is good for Westland.
  When this ridiculous farrago, this circus, has moved on, and Westland is merely a mark in the political history books, we shall have to get on with the job of earning our living and serving Britain's defence interests by making the best helicopters. We will expect the Government to provide the support that they have so signally failed to provide throughout this sorry saga.
  7.47 pm
  Mr. Jerry Wiggin: The House knows that I share a deep interest in the employees of Westland helicopters — 1,400 of them work in my constituency. The next biggest employer employs half that number. The company's future is therefore a matter of great concern to me and my constituents. The wealth that Westland puts into Weston-super-Mare is crucial to its economy.
  I also want to express the anxiety that is felt by my constituents and those of the hon. Member for Yeovil (Mr. Ashdown). I am not convinced that some of that anxiety is as serious as is made out by some union leaders for their own purposes. In July, it looked as though the company was going into receivership, but it now has a good hand with two bids on the table.
  The hon. Member for Yeovil is right to draw attention to why the management and work force feel comfortable with Sikorsky. As engineers, they have had a very good relationship with the company. They have found its designs good, although improvable, for a long time. With Aerospatiale, however, Westland has experienced the difficulties that were also experienced in the joint project to build Concorde, with three helicopters. The French are not easy people to deal with and their method of doing business is alien to our people. In both cases, however, substantial—
  Mr. John Smith: Concorde.
  Mr. Wiggin: I remind the right hon. and learned Gentleman that I came to the House when Concorde was being built. There was a daily flight of engineers and technicians between Filton and Toulouse to deal with that project. The stories about differences of opinion were
  1136
  multitude. I do not want to exaggerate that; I simply make the point to explain the lack of enthusiasm within Westland for a European consortium.
  In every conversation that I have with my constituents on the subject, the importance of urgency is raised. They believe that for peace of mind, for the credibility of the company and, very importantly, for the planning of the future work promised by both consortia there should be an urgent decision to resolve uncertainty. Nothing is as unsettling as uncertainty.
  How did we get into this mess? As early as 1982, it was clear that there was a gap in the military procurement of helicopters by the Ministry of Defence from Westland. In an open and discussed manoeuvre, Westland went into the civilian market just before the over-capacity of helicopter production worldwide and the collapse in the oil price led to a catastrophic diminution in the market. I do not exempt the unions from blame. The productivity of Westland factories has not been as good as it should have been. Indeed, in Weston-super-Mare there was a disastrous strike not so many months ago.
  Everyone, including the Government, has to accept some of the blame. The Government made a serious misjudgment in not appreciating the deep national interest that people have in the country's single helicopter manufacturer. Small though the company may be, it has managed to run up large liabilities. The concept that receivership would in some way solve the problems of Westland is mind-boggling. I was sorry to hear my right hon. Friend the former Secretary of State say that he seriously considered that option. It would have been damaging to the name of Westland. It took Rolls-Royce years to recover from what happened in 1972. It was ridiculous to contemplate that option for Westland.
  Sir John Cuckney was told by the Government to solve his own problems. When he came back with Sikorsky in tow, the European helicopter manufacturers took fright. It was that more than anything else that enabled the European consortium to be put together.
  I am sorry that my right hon. Friend the Member for Henley (Mr. Heseltine) resigned from the Ministry of Defence. I had the privilege of working for him for a few weeks. I believe that he started to breach many of the impenetrable barriers that had been left by Secretary of State after Secretary of State. The creation of a central staff, which I considered to be one of the greatest achievements of his period of office, will be to the benefit of that Department for many years.
  The industrial might of the United States leads one inevitably to the conclusion that any item of armaments can be bought more cheaply across the Atlantic. I remember seeing more Chinooks on one airfield than we have in the whole Royal Air Force. I remember seeing on one airfield a line-up of fighters that contained twice as many as we have in our Air Force. It is such capacity that makes every item, from a simple bullet to the most sophisticated aircraft, cheaper across the Atlantic. That is what the Ministry of Defence must resist. I hope my hon. Friend the Minister of State is listening, because he and I have recently fallen out on the very point of price and whether it is better to buy cheaply across the Atlantic or to support our own industry.
  On the other hand, one has to accept that, if the united states of Europe, which is what I believed I was voting for when I supported our entry into the EEC, is to mean anything, it must be able to produce helicopters. So the

  1137
  concept of an international consortium based within Europe to manufacture helicopters must be right. The Falklands war taught us many lessons. We must have within the shores of the United Kingdom basic indigenous suppliers of armaments materials. Could we have obtained the very quick assistance that was given at Yeovil and Weston-super-Mare during the Falklands war if parts had had to come from the United States? Would the United States have felt able politically to assist us in that unforeseen circumstance? Whatever happens, and in whatever partnership, we must maintain our capacity within the United Kingdom.
  The basic problem is that we do not have enough helicopters in our armed forces. The sooner we tackle that serious problem the sooner we will get over the difficulty that is facing us today. The United States has 14 helicopters per 1,000 men in the armed services; the United Kingdom has 2·7. The United States has 800 helicopters per division; we have 180.
  When I was in the Ministry of Defence, I found it difficult as a layman to persuade the military to consider the movement of men and materials by helicopter. There are 100 good reasons why it cannot be done and the military knew them all. There are 1,000 reasons why it can be done, and they did not know one of them. If a senior military officer is hung up on the movement of infantry in armoured vehicles, he will not allow his staff to argue to the contrary. I should remind the House that the Ministry of Defence is spending just under £500 million on the MCV80. I have long held the view that at least half that money should have gone into helicopters, not for constituency reasons, but because that is how modern battles will be fought. That is what the Americans found in Vietnam and what we found in the Falklands. It will be the same if we are unfortunate enough to be engaged in a war in future.
  I am sad that the affairs of Westland have caused such division within the ranks of the Cabinet. One of the greatest evils that affect Government today is the propensity for leakage of documents. How many documents have been leaked already in this unfortunate saga? It is impossible to run a Government or a business unless proper secrecy and confidentiality are observed. When documents are leaked indiscriminately or deliberately there is blood on the carpet and damage all round.
  I hope that within the next few days the Government will put their mind to drawing this unhappy affair to a conclusion. If the European consortium means business, it can for a modest sum make a bid for the company and buy out existing interests. If it does not mean business, let is say so and let the Americans get on with it. Between them, let the matter be resolved as soon as possible.
  7.58 pm
  Mr. Willie W. Hamilton: Anyone who attended the early part of the debate must have noticed the striking contrast between the narrow, low-key speech of the Prime Minister and the statesmanlike speeches of the ex-Secretary of State for Defence and of my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan). They both saw the great danger which exists not only for this country but for Europe if there is American domination in defence and in the commercial sphere. It is not anti-American, as the Secretary of State
  1138
  for Trade and Industry has asserted, to say that we are entitled to defend our national interests as we see them as strongly as the Americans defend theirs.
  By any standards, this has been a devastating week in parliamentary politics. It has been strewn with nuggets of gold for students of the British constitution. It has echoed with accusations from all sides of bad faith, retractions, character assassination, half-truths and downright lies. As if that were not enough, there has been, as the hon. Member for Weston-super-Mare (Mr. Wiggin) reminded us, a veritable flood of infringements of that sick joke, the Official Secrets Act 1911, by a succession of Ministers, ex-Ministers and others.
  In all this furore it seems that the least important matter at issue is the future of Westland. I have no reason for going into that and, indeed, I am not capable of making an educated assessment of the company's position. However, that is rather disturbing, or should be, for a Government who claim to be patriotic. A decision is being made by the unseemly scramble of unknown and faceless men and women for shares in the City. Does anyone really think that that scramble is being motivated by a defence of the national interest? Is it merely an example of squalid greed that is motivating those concerned?
  A Conservative Member said yesterday that, if a vital defence concern is implicated, the Government cannot stand back and say, "Leave this to a group of shareholders of whatever size the company might be." Whatever the future of Westland, and long after that is decided, the political and constitutional consequences will be enduring and dramatic, not least for the future of the Prime Minister.
  The right hon. Lady's speech this afternoon was deliberately low-key and irrelevant to the issues that we are debating. She, above all Ministers and ex-Ministers, comes out of the shambles with the most egg on her face. From the outset, her fumbling and deviousness have allowed a relatively minor pimple to grow into an angry and ugly boil, which finally burst with the Cabinet walkout last Thursday of her Secretary of State for Defence.
  The former Secretary of State for Defence was clearly fed up. The Cabinet meeting last Thursday was the climax of a general disillusionment with the way in which the Prime Minister runs the Government. Since 1979, the right hon. Lady has shown a ruthless penchant for kicking out of office a gaggle of Ministers who have dared to disagree with her. Never until now has she had one who has had the guts and the courage to walk out on her. That is the crux of the constitutional issue that is now before the House.
  Unlike the rest, the right hon. Gentleman does not intend to go quietly. We shall encourage him to follow the course on which he has embarked. The right hon. Gentleman has gone with an extremely big bang. My right hon. and hon. Friends and I do not regard him as any sort of martyr, but having listened to him this afternoon and to the Prime Minister, any objective observer and listener must be convinced that he was telling the truth rather than the Prime Minister.
  Almost immediately after the right hon. Gentleman had walked out of the Cabinet meeting, he became the villain of the piece. He had been the favourite of Tory party conferences and the favourite within the Cabinet. He was the favourite at the 1983 general election to attack the CND. Immediately after he walked out, there was initiated a carefully orchestrated process of character assassination by No. 10. That was not initiated by the Prime Minister.

  1139
  The right hon. Lady delegated the task to other Ministers who are prepared to tow the line, not least her mincing lackey, the Secretary of State for Trade and Industry. By God, what a pathetic figure he is! Most of the charges that he made have been renounced by successive Ministers, including the Foreign Secretary, the Home Secretary, the chairman of the Tory party, the Chancellor of the Exchequer, the Law Officers and various loud-trumpeting Tory Back Benchers. Over the past week liars and dissemblers have been strewn around like dossers at midnight underneath Waterloo bridge.
  The Government, who presume to be an Administration of law and order, have engaged in more infringements of the Official Secrets Act in the past week than have taken place previously over the past decade. The former Secretary of State for Defence may be included. There is the Solicitor-General and a person un-named, and my hon. Friend the Member for Linlithgow (Mr. Dalyell) probably has the name of that person by now. The list includes the Secretary of State for Trade and Industry. I wonder how many prosecutions will result as a direct consequence of the infringements.
  We know that Mr. Ponting and Sarah Tisdall were prosecuted, but we shall see whether that is the fate of the Solicitor-General, the Secretary of State for Trade and Industry and of the right hon. Member for Henley (Mr. Heseltine). I forecast that there will not be one prosecution as a direct result of the revelations. The unvarnished truth of this squalid story must be exposed in the national interest. I hope that the Government will give unequivocal undertakings that all papers will be available to any committee which seeks to investigate this matter and that all Ministers will give an unequivocal undertaking that they will give oral evidence to any such committee. If they are searchers after the truth, as they try to convince us they are, nothing less will suffice.
  When the future of Westland is decided, whichever way it goes—I hope that it goes the European way—the constitutional issues will remain. They will plague the Government until the truth, the whole truth and nothing but the truth, is disclosed.
  8.7 pm
  Mr. John Wilkinson: After today's debate, there may be as many different views on why my right hon. Friend the Member for Henley (Mr. Heseltine), the former Secretary of State for Defence, resigned as there are Members who heard him speak this afternoon. I have my own opinion, for what it is worth, and I shall share it with the House. To be candid, I think that my right hon. Friend was rumbled. I found his stewardship of the Ministry of Defence deficient in terms of a helicopter strategy. Many of us were warning the Ministry for many a long month of that deficiency. The aviation committee, of which I was the then chairman, visited Westland at Yeovil in November 1984, and ever since that date it was warning the Ministry, and especially my right hon. Friend, that something urgent had to be done about Westland if the company was to be saved.
  My right hon. Friend rationalised his resignation. He did so with the invocation of grandiose ideas about the European-American relationship, the two-way, or, as he would describe it, the one-way street, and the difficulty which our manufacturers face in selling their products into
  1140
  the American market. As so often with my right hon. Friend, he overstated his case. He suggested, for example, that it was virtually impossible to sell into the American market and yet Normalair Garrett, which is an important part of Westland, has a significant system in the Rockwell B1 supersonic bomber. It has another system on the F18 fighter aircraft. Normalair Garrett is a 50–50 company, half Garrett and half Westland, half American and half British. So the fact that that section of Westland has been in part American has in no way detracted—rather the contrary—from its ability to sell into the American market.
  Furthermore, one of the great difficulties that Aerospatiale, the big white hope of my right hon. Friend the former Secretary of State for Defence, has faced in selling its products into the United States has been its lack of an American partner to assist it in that process. One of the causes of the substantial losses incurred by Aerospatiale in its helicopter division has been its failure to sell helicopters, particularly the Dauphin, into the United States of America.
  It is my belief that the relationship with Sikorsky, if endorsed by the shareholders on Friday, will enable the Westland company to sell the EH101 into the United States market. It would not have such a good chance of doing so were the Sikorsky-Fiat rescue package to be turned down. I say that because Sikorsky does not have an aeroplane in the 15-tonne class, the EH101 class, so it looks to the acquisition of the possibility of helping to sell the EH101 in the USA as something significant.
  My right hon. Friend also adduced all sorts of grandiose arguments about burden-sharing. Here, too, his arguments were deficient because if burden-sharing means anything to me—and I wrote a paper for the Western European Union on this subject only two years ago—it means an equitable sharing of the financial burdens of defence.
  Mr. Peter Hardy: The hon. Member is quite right to remind the House that he wrote a report for the WEU two years ago, but he will recall that on 5 December he presented a report on the European fighter aircraft. It seems to me—and the hon. Member will recall that I spoke in the debate and supported his paper, which also had the support of Opposition Members—that the basis of his argument as recently as last month was that we had to co-operate in Europe, as with the European fighter aircraft that he has so consistently supported.
  Mr. Wilkinson: I am grateful to the hon. Gentleman, who leads the Labour delegation with distinction, but I shall show him that there is no mutual incompatability between these two propositions. If burden-sharing is to mean anything, we have to put our money behind our strong sentiments in favour of the Alliance, and this my right hon. Friend was signally unable to do. If he had been able to put money forward for some short-term helicopter procurement, while a longer-term rescue package was put into place, the position of the Westland company would not have become so critical.
  In particular, he could have ordered some more commando versions of Sea King for the Royal Marines to replace their existing Wessex; he could have ordered more Sea Kings to replace the existing Wessex for the Royal Air Force for air-sea rescue; he could have retained the Wessex thus freed for service with the Royal Auxiliary Air Force in the light support role; he could have given a clear

  1141
  confirmation that the Royal Navy would actually order the EH101 — an order has not yet been placed for that aeroplane. To have done so would perhaps have facilitated borrowing from the banks for Westland.
  He could also have concerted a requirement with the Italian army for the mark 2 version of the Agusta 129. This he failed to do. Last, but not least, the Royal Navy could have procured the hovercraft, if only in an experimental role, for mine-hunting. My hon. Friend the Member for Leeds, North-West (Dr. Hampson) laughs, but it has considerable merit for minesweeping in inshore waters.
  Sir Kenneth Lewis: I do not dispute what my hon. Friend says because he speaks from a knowledge of these things, but I would like to ask him whether finance might not have been a difficulty for the Ministry of Defence when it came to ordering a large increase in its hardware at a time when the Treasury was bearing down heavily on its budget.
  Mr. Wilkinson: It certainly was a difficulty but the difficulty at that stage was not a lack of funding because of the Treasury. That will happen. The former Secretary of State for Defence continues to insist that there will be no need for a defence review when we know that there will have to be a defence review because of the relative price effect, whereby the cost of weapons goes up faster than inflation.
  The point that I would like to make is that the overspending on the Nimrod mark 3 programme was so severe that it impinged adversely on the budget for the procurement of aircraft. This was the main reason for the inability of the services to acquire helicopters and, above all, the inability of the services to fulfil air staff target 404 for a light support helicopter to be flown by the Royal Air Force in support of the Army.
  The Army has identified the need for such an aeroplane since the early 1970s. The actual air staff target was not written until 1978. The target for a 13-seat aeroplane was written round the Black Hawk because at that time it was the only aeroplane that could fulfil the role because the military version of, the W30, was not developed. Yet, because of the funding problems that I have mentioned, AST 404 fell by the wayside—and more is the pity as far as Westland is concerned.
  I believe that this judgment is inherently correct, that there will be a need for such an aeroplane and that this need of our armed forces will have to be fulfilled.
  Dr. Keith Hampson: Will my hon. Friend give way?
  Mr. Wilkinson: No, I am trying to reply to the hon. Gentleman. He referred to my report on the European fighter aircraft. I was going on to say that the former Secretary of State for Defence, was wrong to suggest that Government should always lead the collaborative process and that, unless that happened, collaboration was bound to fail. There are many instances where successful collaboration is industry-led. The hon. Gentleman will remember the 1981 seminar in Lancaster house, under the auspices of the WEU, on aeronautical consortia in Europe, for which I was general rapporteur. There was the STAR communications satellite consortium, the MESH consortium in space business, the Euromissile Dynamics Group. These consortia, industry-based, prove that in many
  1142
  instances there are good industrial grounds for collaboration. As my right hon. Friend the former Minister of State for Defence Procurement, the Member for Bosworth (Sir A. Butler), said in an excellent speech, from all his experience that, in his judgment of Government, is the case.
  Dr. Hampson rose—
  Mr. Wilkinson: May I please finish the argument? I think that my hon. Friend has only just come in and I am trying to make an important point.
  My right hon. Friend the former Secretary of State for Defence tried throughout the summer to reconcile the irreconcilable by trying to get the French into the European fighter aircraft project. That we all knew to be impossible because there were essentially two requirements. The French air force requirement, which is optimised for air-to-ground, is different from that of the other four air forces, which is essentially optimised for the air-to-air role. Nevertheless, my right hon. Friend insisted on spending time and nervous energy on this problem. Eventually the Germans called the French bluff, the Luftwaffe insisted that its operational requirements must be met in full. To his credit, the German Defence Minister, Manfred Wörner, who is a good friend of mine, stuck by the German air staff's decision and the former Secretary of State for Defence had to accept the reality.
  Dr. Hampson: Will my hon. Friend give way?
  Mr. Wilkinson: No. Please let me finish my sentence.
  The other side to this was that so much time had been expended over EFA on the part of the former Secretary of State for Defence, when it was quite clear that the PANAVIA structure was the right one and should be built upon, that he failed to spend sufficient time on the problems of Westland.
  Dr. Hampson: Will my hon. Friend give way, because this is a monstrous, grotesque distortion of the truth?
  Mr. Wilkinson: I give way.
  Dr. Hampson: My hon. Friend well knows that my right hon. Friend the former Secretary of State for Defence spent all that time convincing all the Europeans of his and this country's total commitment to European collaboration. That was fundamental to having the Germans on our side so that they would not go with the French. I was a party to the lobbying efforts by officers of the Committee. As my hon. Friend well knows, we were trying to get the Ministry of Defence to buy the W30 rather than this extraordinary package, which my hon. Friend has now conceived out of his own expertise. He knows full well that the problems faced in getting the air staff target accepted had nothing to do with my right hon. Friend the former Secretary of State for Defence. There were long-standing problems concerning the financing of, for example, Nimrod and the Army's attitude which preceded the period in office of my right hon. Friend, for whom my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) used to work.
  Mr. Wilkinson: I regret allowing that intemperate intervention by my hon. Friend the Member for Leeds, North-West. I worked with the project management team on the prototype of the Jaguar. I have been associated with the Tornado. I believe that European industries have

  1143
  worked well together for a much longer period than my hon. Friend the Member for Leeds, North-West has had experience in these matters. I shall leave it at that.
  The trouble is that my right hon. Friend the former Secretary of State for Defence did not put concrete proposals on how work would be provided to fill the hole in Westland's order book. All the projects in the so-called European package are paper aeroplanes for the 1990s. My right hon. Friend said that somehow we shall "merge"—whatever that means—the PAH2 of the French and Germans with the Agusta 129 of the Italians. The general staffs of the French and Germans have found it hard enough to concert their requirements around that single aeroplane. The British and the Italian armies have not agreed the specification of the joint aeroplane, so I do not know how that merger will take place. It does not provide work for Westland. The NH90 is also a paper aeroplane, in which five partners are involved. It is a nine-tonne aircraft with a configuration similar to that of the Black Hawk. It will come into service in the late 1990s. The Black Hawk is available and, with the new Franco-British RTM322 engine, which will operate shortly, its lift capability will be augmented by 25 per cent. That cost-effective option for our armed forces will sell exceedingly well on export markets, for which Westland's sale territories have already been designated. The EH101 is not incompatible with the existing Sikorsky programmes.
  I regret to admit that I think that my right hon. Friend the former Secretary of State for Defence was rumbled. It was only when Sir John Cuckney had a rescue package in place that Mr. Levene, the national armaments director, was told to meet his European counterparts—
  Dr. Hampson: It was not Levene. My hon. Friend has an obsession with Levene.
  Mr. Wilkinson: I do not have an obsession with Mr. Levene. That was when Mr. Levene was told to come up with an alternative strategy. That strategy does not provide the work needed. If implemented, it will be detrimental to the competition needed in the defence procurement business to secure the most cost-effective equipment for our armed forces.
  8.23 pm
  Mr. David Winnick: Clearly, if there had been no interest in the two groups that have bid for Westland, the Government would have been quite willing to let Westland go to the wall. The Prime Minister made that position clear this afternoon. That point should not be overlooked by the work force in Yeovil or those employed by other firms dependent upon Westland. Many other firms—not least in the west midlands—have collapsed because of Government policy during the past six years.
  Like my colleagues, I listened with much interest to the right hon. Member for Henley (Mr. Heseltine) when he spoke of the need for a substantial industrial base in Britain. How right he was. That industrial base has been constantly undermined and eroded by the policies of the Government of which the right hon. Gentleman was a member. He must take some responsibility for what has been happening in industry since 1979.
  As for the exchange of letters between the chairman of British Aerospace and the Prime Minister, one can see that there is a considerable difference between the accounts of
  1144
  the meeting held on 8 January. The only point on which the two sides seem to have agreed was that there was a meeting on that date. This matter must be pursued.
  Paragraphs 6 and 7 are the crucial points in the chairman's letter to the Prime Minister referring to the meeting on Wednesday with the Secretary of State for Trade and Industry. On 13 January the Press Association's news agency quoted a source close to the board, who said:
  "I was astonished to receive a phone call on Wednesday night from an equally astonished and somewhat shaken chief executive saying that he had been subjected to a naked threat in Mr. Brittan's office."
  He said that he
  "felt so strongly about the manner in which the threat had been made that he felt he had to report it to his board that night."
  I wish to ask this question, especially because the Secretary of State for Trade and Industry is in his place—why should the chief executive of British Aerospace say that he was told by the Secretary of State that the company's actions were not in the national interest and that it should withdraw from the European consortium unless that were true? What would be the chief executive's motives in going to his chairman and making up a story? Does the chief executive bear a grudge, or is he conducting a vendetta against the Secretary of State? Is it suggested that the chief executive is in the pocket or the pay of the right hon. Member for Henley?
  If the chief executive of BAe has told the truth, as outlined in the letter from the chairman to the Prime Minister, the Secretary of State for Trade and Industry has clearly not been doing so. One thing is certain—both cannot be right. The accounts differ substantially. We must therefore conclude that, if the chief executive is right, the Secretary of State has not been telling the House the truth.
  The Secretary of State for Trade and Industry must realise that this matter will not go away. Despite the forthcoming vote, which obviously will show a substantial Government majority, most of the right hon. and learned Gentleman's colleagues believe that he should go.
  The London Standard tonight quotes the hon. Member for Shipley (Mr. Fox), stating:
  "Mr. Marcus Fox, the deputy chairman of the powerful 1922 Committee … declared: 'The skids are under Leon.'"
  The article continued:
  "Mr. Fox said that Mr. Brittan's job was now in serious jeopardy. And he added: 'What we have to get clear is that there are not two standards, one for one Cabinet Minister and another for another.'"
  The Minister of State for Defence Procurement (Mr. Norman Lamont): Where is the relevance in this?
  Mr. Winnick: The hon. Gentleman should know the relevance of this—we do not believe the Secretary of State for Trade and Industry. We believe, as do the majority of Tory Members, that the right hon. and learned Gentleman should, in duty and honour, resign from his position.
  I also want to comment about the way in which the Prime Minister goes about her job. In an effective speech my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) spoke about that. What has emerged from all that the right hon. Gentleman the Member for Henley said when he resigned from his position confirms the strong impression of what The Economist last week described as the Prime Minister's "increasingly catankerous leadership". That journal also said,

  1145
  "Her treatment of senior colleagues has landed her with a needless load of trouble."
  It is interesting to note that since the Prime Minister first formed her Administration in 1979, 14 members of the Cabinet have been dismissed, and now the right hon. Member for Henley has resigned. We should not be surprised at that style, because before she went to Downing street the right hon. Lady publicly and frankly stated that if she became Prime Minister she would have no time in the Cabinet for arguments. That is one election promise she has undoubtedly kept.
  Cabinet Ministers who hold or have held different views from hers—and there were quite a number of them—were simply removed from office. In the main what the right hon. Lady wanted was a Cabinet of people who were not willing to stand up to her or to argue with her. What we now have is a Cabinet of such people, with the exception of the Secretary of State for Energy who once a year is allowed to make a speech, usually out of London, showing how wet he remains. On the basis that he makes such a speech only once a year, he is allowed to remain in the Cabinet. I am afraid that the rest of the members of the Cabinet know well that if they were to speak out or argue with the right hon. Lady or insist on matters in the way that the right hon. Member for Henley has done, they would be dismissed.
  An increasing number of people realise the right hon. Lady's domineering and intolerant attitude and deeply resent it. What we have learnt from the right hon. Member for Henley confirms our strong impression about what has been going on in the Cabinet in the past six years. The attitude of the British people in resenting the Prime Minister's style, attitude and domineering ways will shortly be shown in Fulham and certainly at the next general election.
  Mr. Speaker: Before I call the next speaker, I should say that I understand that the Front Benches would like to commence the winding-up speeches at 9 o'clock. A large number of hon. Members still wish to take part in the debate.
  8.33 pm
  Mr. Alan Haselhurst: Before this debate began, I nursed the fear that there was a danger that Westland might become almost incidental to the debate. Fortunately, that has not generally been the case. The hon. Member for Walsall, North (Mr. Winnick) rather fanned the flames of my suspicion once again. At the heart of this debate is the survival of Westland and that must be our first priority. We are concerned with Westland, its expertise and its skilled work force because we should have a helicopter manufacturing capability in this country.
  A long-term interest has to be faced as well. The short-term survival of Westland is not the only issue, but surely it is one of the dominant thoughts in our minds at present. As my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) reminded us, it has been a worry for some time. I do not wish to go back into the past as he chose to do, because almost a whole evening could be devoted to what happened in the past. We should address ourselves to the present situation and look at it from the point where the Government became sufficiently worried about what was happening to Westland that they galvanised themselves and decided that they were going to try to ensure that a choice was placed before the shareholders.
  1146
  It would be churlish of the House not to recognise the efforts of the Government in that respect. I hope that I am not delving into controversy if I say that the Government appeared united in their view that the shareholders should be the final determiners of what was to happen. In my mind, it follows that if the shareholders were to be placed in that situation, some of them at least might find it relevant to think about exactly what view the Government might have about the future of our helicopter capability. The shareholders might have wanted some guidance on the national interest. I do not believe that they could have been left to guess what the national interest might be and they could only look to the Government for some clue about that.
  The national interest is not an easy thing to determine. As Sir Raymond Lygo made clear in his conversation with my right hon. Friend the Secretary of State for Trade and Industry—I am reading from the authorised version—that point was discussed between them. It seems mildly surprising that the Government did not have a more positive view which looked beyond the mere immediate survival of Westland, vital though that is. It seems that there was a defence aspect as to whether or not Westland survived, and in partnership with whom it survived. There might be an aerospace aspect to the matter, bearing in mind our commitment and involvement in developing collaborative ventures in Europe with fixed-wing aeroplanes. We might have a parallel interest in helicopters.
  It is certainly inconceivable that the Government do not have a view about whether what happened to Westland would have an effect upon our aerospace dealings, because it is clear from the Civil Service accounts of my right hon. Friend's meeting with Sir Raymond Lygo that the Government are greatly concerned about what our aerospace export potential should be.
  Then there is the European aspect. I make no apology to the House for expressing my enthusiasm for collaborative deals with Europe. Where possible, this is a right and necessary priority for the United Kingdom. I do not want to say anything which will impede the rescue of Westland and I am certainly not in any sense anti-American. There is a great deal of aerospace trade traffic between the United States and Europe and that is right and proper.
  The British aerospace industry should not have just one single pattern of involvement. It is healthy for customers, be they Governments or private companies throughout the world, that there should be more than one major supplier in the aerospace business. It is healthier for the competitive environment if there can be at least two major players in the aerospace game. I hope that we can get within Europe some counterweight to the American aerospace industry. That hope falls a long way short of obsession, the term used by my hon. Friend the Member for Bosworth (Sir A. Butler).
  It is a heavy responsibility for anyone speaking in the debate to try to guess what the Westland board in this anxious time will decide to do. It is easy to point the finger of scorn at either of the deals on offer. One can make fun of what Sikorsky might wish to do in future when it has its grip tightened upon Westland. It is equally possible to make fun of Aerospatiale and say that it too is hoping that in the end there will be damage to Britain. We are trying to pursue collaborative deals in Europe in the aerospace

  1147
  business with fixed-wing aircraft, and when we are doing that it does not sit too easily to make snide remarks about our partners in those enterprises.
  The vehemence of the Westland board against the European consortium has to be taken as significant, even if at the same time it constitutes a most singular aspect of this whole affair. I am worried that there is now a tainted atmosphere which might yet have a damaging effect on Britain's overall position in future aerospace business. I hope that that is not so. At the end of the day we can only try to determine what we believe Britain's national interest to be. Each of us in this House can only make his own interpretation of that, but blending short and long-term considerations it seems to be a pity that the opportunity to try to take one closer step towards integration of the European aerospace interests has not yet been grasped. I hope that we shall not rue that day.
  8.39 pm
  Mr. Gavin Strang: The hon. Member for Saffron Walden (Mr. Haselhurst) said that at the heart of this debate was the future of Westland. Opposition Members are truly committed to the future of Westland, but at the heart of this debate is the motion and the amendment. The motion speaks about the need to secure a truthful record of what has transpired. To some extent, the debate has been inevitably dominated by the speech of the Prime Minister in attempting to answer the serious allegations made by the right hon. Member for Henley (Mr. Heseltine) in his resignation statement and also the further serious allegations made by the right hon. Gentleman.
  I wish to concentrate on the role of the Secretary of State for Trade and Industry, because he is still a member of the Government. There are two matters to which I wish to refer. The first is what he said, on behalf of the Government, to British Aerospace. When that point was raised by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the Secretary of State replied:
  "Let me make it clear that it is untrue to say that in the course of the meeting I made any suggestion that British Aerospace should withdraw from the European consortium or that its participation was contrary to the national interest."
  When I put it to him that the House was not satisfied with his reply, he said:
  "The account that I have given of the meeting is accurate. I do not think that to warn people of the consequences of pursuing matters in a particular way, which they had accepted, and of which they had had word from their subsidiary— I am not accusing a particular person, but certain things had been said involving anti-Americanism which were likely to damage their interests—is the same as expressing a preference for the deal."—[Official Report, 13 January 1986; Vol. 89, c. 782–5.]
  The Secretary of State is directly refuted by the letter which Sir Austin Pearce sent to the Prime Minister on behalf of British Aerospace. Sir Austin Pearce says that the Secretary of State said
  "that the decision should be left to the shareholders alone".
  He also said
  "that what we were doing was not in the National Interest"
  and
  "that we should withdraw".
  I trust that, even if the Opposition's motion is not carried tonight, the Government's amendment means that the Select Committee on Defence at least—that is not what the
  1148
  Opposition want—will be enabled—no pressure will be put on Conservative members of the Committee to prevent it—to secure a full and open record of what happened.
  My second point is more damning. It is that the right hon. and learned Gentleman deliberately misled the House as to whether—
  Mr. Speaker: Order. No right hon. Member, or even hon. Member, deliberately misleads the House.
  Mr. Strang: The right hon. and learned Gentleman misled the House about the letter. He knew that the Government had received a letter. If we read the Hansard report of Monday's exchanges — which is a most damning document—it is clear that he was anxious to conceal that fact. It is one thing to refuse to answer a question. We are all at liberty to do that. We can say, "I am not prepared to answer that on behalf of the Government". There may be uproar, but at least we know where we stand. One can also give a truthful answer which evades the point. But what one cannot do is deliberately—I withdraw that, Mr. Speaker—to do what he did.
  When the right hon. and learned Gentleman was asked by the former Secretary of State for Defence about the letter, the right hon. and learned Gentleman said:
  "I have not received any such letter."
  Later, when he was challenged by his hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), he said:
  "I can only speak for myself."
  He was then asked by my hon. Friend the Member for Bolsover (Mr. Skinner)
  "whether the Government had received a letter from"
  (See columns 1215 and 1241.)
  Sir Austin Pearce. The right hon. and learned Gentleman replied:
  "If it helps the hon. Gentleman, I am not aware of any letter from Sir Raymond Lygo to anyone else either."—[Official Report, 13 January 1986; Vol. 89, c. 782–6.]
  He ducked the question. If that is not deliberate evasion, I do not know what is. We can then see what he said to my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Brown). Having done that, can the right hon. and learned Gentleman then come here at 10 pm and apologise? Is that acceptable? I say that it is unacceptable.
  The right hon. and learned Gentleman perhaps did not know what was going to happen at Downing street. No one knows that. Downing street let it be known that a letter had been received, I presume, at about 3·30 pm that Monday afternoon. If that had not been done by Downing street, did the right hon. and learned Gentleman think that it might be possible to keep the matter concealed and for it not to leak from British Aerospace? Did he think that the existence of the letter would not be discovered?
  The suspicion is such that the right hon. and learned Gentleman must go. I feel no malice towards him. No one suggests that what he has done is such that his career should be damned for ever more, but if parliamentary democracy means anything, it means that right hon. Gentlemen do not give such answers when they have the type of information that we know he had. The Government must be prepared to face up to this matter. The Secretary of State has to be sacrificed to maintain a principle that is fundamental to parliamentary democracy.
  8.44 pm
  Mr. Kenneth Warren: I declare an interest as an aeronautical engineer, but I have no part

  1149
  in the present Westland negotiations. I am Chairman of the Select Committee on Trade and Industry. That Committee today decided that next Wednesday it would consider whether it was right and proper for it to examine the Westland problem.
  May I draw the attention of the House to the fact that this is a debate about Westland plc. I am worried that the turmoil and trouble at Westland has been diverted into a political issue which prejudices the working lives of many hundreds of Westland's workers, and the tens of thousands of workers in other parts of the aerospace and aero-engine industries which support that company. Westland is not up for grabs. It is not up for sale. It is trying to stay in business. Both sides of the House should try to place Westland once again in the forefront of helicopter design and manufacture, which is where it should be.
  Westland is a vital United Kingdom engineering resource. It contains a helicopter technology which is unequalled in western Europe. I am worried that in the discussions which have taken place with Her Majesty's Government no consultations appear to have taken place with those who supply Westland. For every one person working at Westland two others work in the aerospace industry supporting Westland—the Racals, the Ferrantis, the Smiths, the Lucases, the Dowtys and the GECs. None of those people has been consulted. It has been suggested that the company should go up for auction to the highest bidder.
  I am sorry that my right hon. Friend the Member for Henley (Mr. Heseltine) is not here, because I am extremely worried by the fact that the man who had some part and interest in the activities of Mr. Clive Ponting clearly breached the Official Secrets Act when he stated what were in Cabinet minutes and what had taken place in Cabinet discussions. I speak as a former chairman of the parliamentary campaign for freedom of information. It is unfair that there should be two standards of official secrets.
  Mr. Dick Douglas: As Chairman of the Select Committee, the hon. Gentleman should not be intervening in the debate.
  Mr. Warren: I wish to return to the letters—
  Mr. Douglas: I have a great respect for the hon. Gentleman. I am a member of the Select Committee on Defence. If his Committee is to undertake or consider an investigation, he is on thin ice when he intervenes in the way that he is doing. That is my considered view.
  Mr. Warren: So much for the hon. Gentleman's considered view. I am speaking as a Back Bencher. I believe that the House has freedom of speech and that it is the prerogative of hon. Members on both sides.
  I shall continue to speak about freedom of information. I am worried about the letter from the Prime Minister which has today been sent to Sir Austin Pearce, the second paragraph of which states that she understands that Sir Austin Pearce, the chairman of British Aerospace, is not prepared to release a copy of Sir Raymond Lygo's account of the proceedings. That is ridiculous. When the whole of the correspondence has been published, there can be nothing wrong in allowing Sir Raymond to publish his account of the proceedings.
  I have known Sir Raymond well for a number of years and I believe that there was a misunderstanding about what was said between him and my right hon. and learned
  1150
  Friend the Secretary of State for Trade and Industry. I recommend that those two gentlemen should get together tonight or at least tomorrow morning to try to resolve the differences in what each thinks the other said. Westland is surely more important than who is right or who is wrong in a political issue.
  The next matter about which I should like to talk is anti-Americanism. I am worried that my right hon. Friend the Member for Henley should talk about anti-Americanism, because he negotiated the SDI agreement a little while ago. British Aerospace is using United Technologies to promote its activities in the United States. Good luck to it. Let us consider the other partners in the so-called European consortium. Aerospatiale is under contract to Sikorsky for helicopter work. Messerschmitt-Bolkow-Blohm is part owned by Boeing, which is a competitor of Sikorsky, Aerospatiale and Westland. The simplicity with which people are classified as Europeans or anti-Europeans is unacceptable. Fiat is all right when it is supplying engines for the Tornado but apparently it is not all right when it is trying to help our helicopter industry. Last year, Agusta— a nationalised Italian company—tried to put up money to save Westland. Now it is no longer acceptable because it is on the European side. I am trying to be fair. The over-simplification of the issues that have been put before us has left in doubt the credibility with which my right hon. Friend the Member for Henley (Mr. Helsetine) tackled this problem. I am sorry that have to say that.
  Ten days ago I was invited by Westland to meet its directors and those of Sikorsky and Fiat. I explored with them what is meant by man-hours. I adopted a technical approach because it is not the man-hours that matter but who is the design authority: who gives design leadership in helicopter manufacture and who decides what engines and what systems should be used. The information that I obtained on both that and other occasions when this issue was discussed was that the design authority option is not available to Westland in the case of the European bid but that this option remains available to Westland if it follows the Sikorsky-Fiat route. I hope that they will choose Sikorsky as their partners.
  I have received information that there is a bid before the Ministry of Defence for a new sighting system for the Army's helicopters. British Aerospace has put in a commendable bid to update the equipment that they are currently supplying. A Swedish-American-British group called Heliton has also put in a bid. It amounts to approximately the same value, on a fixed price basis, as that which has been put up by British Aerospace—£70 million. For reasons that nobody understands, the Ministry of Defence has said that although it may be a fixed price it will make the price £100 million, thereby wiping out that bid. The only problem is that the Royal Swedish Air Board has said that it is willing to buy between 20 and 30 Westland W30 helicopters and some Sea King helicopters.
  In the cause of freedom of information, why has that information not been put before the House? Why has the House not been told the facts about defence contracts and of their value to Westland's resurgence? It is time that the attention of this House was turned to the restoration of Westland as a leading aerospace company and to the maintenance of the technology of its supporting companies. We must not waste the skills of the men and women at Westland. It is time that we looked after these people.
  8.53 pm
  Mr. Tam Dalyell: The House will acquit me of being uninterested in Westland per se. I went to Yeovil in mid-November. I was taken round the plant by unions and management. I was also a member of an ASTMS delegation that was most courteously received by the Minister for Trade on the Indian order.
  I wish to use the time available to me to return to the speech of my right hon. and learned Friend the Member for Aberavon (Mr. Morris). Since my right hon. and learned Friend made his speech a senior civil servant in the Department of Trade and Industry has been identified, according to the news on Channel 4, by the inquiry as the source of the leak of the Law Officer's letter. This is the letter that I made such a fuss about at 3·30 this afternoon.
  If the news report is true—and apparently it is—upon whose instructions was a senior civil servant at the DTI asked to leak a letter from the Law Officers? Are we to believe that an over-zealous senior civil servant took it upon himself to do this?—[HON. MEMBERS: "Why not?"] I have some experience of the Old Bailey. I know what civil servants can go through. If anybody looks at what Clive Ponting went through and how he was treated by some of the Ministers who have spoken today, any civil servant would by very careful not to leak anything without ministerial authority.
  My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) asked a key question. He said:
  "Was the correcting letter from the Law Officers to the Secretary of State for Defence seen by the right hon. and learned Gentleman or his Department before it was sent to the Ministry of Defence?"
  The Secretary of State for Trade and Industry replied:
  "I saw the letter after it was sent."—[Official Report, 13 January 1986; Vol 89, c. 783.]
  The question was whether he had been consulted, whether he had been told about the letter and whether he had been given any idea of its contents. Was the answer that was given to my right hon. Friend the whole truth?
  Mr. Merlyn Rees: That is a matter for the Secretary of State for Trade and Industry. My hon. Friend and I got involved with Mr. Ponting because our view was that he should have been dealt with not under the Official Secrets Act 1911 but by the disciplinary procedures of the Civil Service. I hope that this case will not be dealt with under the Official Secrets Act.
  Mr. Dalyell: We need to know whether the answers given to my right hon. Friends the Members for Morley and Leeds, South and for Blaenau Gwent (Mr. Foot), who went back on Monday to this exact point, are the whole truth. Having read that Law Officer's letter, I now understand how reluctant Her Majesty's Government were to place it in the Library of the House of Commons. For a careful lawyer's letter, it contains an extraordinary paragraph. The penultimate paragraph says:
  "On the basis of the information contained in the documents to which I have referred, which I emphasise are all that I have seen, the sentence in your letter to Mr. Horne does, in my opinion, contain material inaccuracies in the respects I have mentioned, and I therefore must advise you that you should write again to Mr. Horne correcting the inaccuracies."
  What are we to think? Are we to think that on that Saturday the Solicitor-General was suddenly reading The Times and, equally suddenly, without any prompting, he said, "I must write a most serious and damaging letter against one
  1152
  of my senior colleagues"? Is that how the Government work? Is it a likely scenario? I ask my right hon. and hon. Friends to consider whether this bears any relationship to reality.
  The paragraph is really saying, "If what you are reported as saying is accurate, then it seems to me that it might not be legal. Are you sure?" It seems to me that the Legal Officers were asking the Secretary of State for Defence whether what he had said was accurate.
  There is a great contrast between the full letter and what Mr. Anthony Bevins quite properly, from the point of view of a journalist, wrote in The Times. Mr. Bevins referred to the trumped-up earlier leaks with a partial text of the Solicitor-General's letter. Who was it, and for what reason, who leaked a partial text? That is the question that the Secretary of State for Trade and Industry will have to address when he winds up the debate.
  My right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) raised many questions. I wish to repeat just one of them. I refer to the notes of the meeting on 13 December. Are they as the Prime Minister would have them, or are they as the right hon. Member for Henley (Mr. Heseltine) would have them? If we are told that the notes are difficult to find, I ask my right hon. and hon. Friends whether they have gone the way of the log book of the Conqueror. Is that what has happened to them? In such a situation notes taken by civil servants are sacrosanct. Is there not some condition that notes of Ministers' contributions taken by civil servants may not record things that are against Government policy? Is that not in the guidelines?
  Mr. Merlyn Rees: I do not think that civil servants are enjoined not to make a note of things that are against Government policy.
  Mr. Dalyell: I have the permission of my right hon. and learned Friend the Member for Aberavon to repeat two of his questions that should be answered tonight. My right hon. and learned Friend the Member for Aberavon asks the Secretary of State for Trade and Industry, pursuant to his reply to the right hon. Member for Morley and Leeds, South on 13 January, whether he or anyone in his Department saw the Solicitor-General's letter in draft or material upon which the letter was based before it was sent and whether he was consulted about the contents of the letter or its sending before it was sent. My right hon. and learned Friend asks the Attorney-General whether he will refer any apparent breach of security involved in the disclosure of the contents of the recent letter from the Solicitor-General to the right hon. Member for Henley to the Director of Public Prosecutions for his consideration and advice as to whether a decision to prosecute under section 2 of the Official Secrets Act 1911 is to be taken. Those questions should be answered between 9.30 and 10 o'clock tonight.
  9 pm
  Mr. John Smith: The Prime Minister must now be wishing that she had responded to the call by the Leader of the Opposition on Monday to come to the House and make a statement on behalf of the Administration that she heads to answer the serious questions of public concern that were revealed during the recess and have doubled since Parliament reassembled.
  One of the reasons why the right hon. Lady would have been wiser to make a statement is that it would have

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  reinforced her reputation for forthrightness and boldness, which are said to be her leading characteristics. In addition, it would have had the tactical advantage that the Secretary of State for Trade and Industry would not have had to respond on Monday on behalf of the Government. That is where the really damaging series of events start from. When the Leader of the Opposition put the case for an inquiry he reminded us of the considerable history of the matter. The right hon. Member for Henley (Mr. Heseltine) also reminded us of that in his capable account of the way in which the Cabinet and Ministers addressed themselves to those issues.
  There are two clear periods in this event. There is the warring period, when the Secretaries of State fought each other not just in the Cabinet Committees but in the columns of the press to the extent, as Sir Austin Pearce pointed out, that Sir Raymond Lygo was told by one Secretary of State what the national interest was and was given an opposite explanation of the nation's interest by another Secretary of State.
  Since the resignation of the right hon. Member for Henley, there has been a period of post-resignation depth charges. Those depth charges let loose underneath the ship of Government have shaken the whole fabric to its foundations. It has been a most revealing time because it is not often that the veil of Government is parted and we are privileged to see what happens behind that curtain. It has long been the suspicion, well beyond the view of the Opposition, that many funny things happen behind the curtains that conceal the inner activities of the Thatcher Government from the nation. That suspicion has been amply justified.
  There is a wider concern than the affairs of Westland, although we must be careful not to forget that that is at the heart of the debate.
  Mr. Peter Thurnham rose—
  Mr. Smith: There is concern about the way in which the Government have sought to manipulate some aspects of the matter. We know what the previous Secretary of State for Defence has had to put up with. We know how he has been cut down from behind, that he has had to face stories and gossip, and we know the way in which he has been prevented from putting his case. He mentioned a matter today which is of serious public concern, although it is not directly related to the details of the Westland story. He referred to a telephone call made from 10 Downing street to the BBC about a programme in which he was involved.
  My next comment is a responsible one and I should like the Secretary of State for Trade and Industry to give a specific answer to it in his reply. I also hope that the Prime Minister will feel obliged to reply to it.
  On Sunday 5 January the radio programme "The World this Weekend" set out to cover these matters. In the morning of Sunday 5 January the Secretary of State for Trade and Industry recorded an interview for "The World this Weekend". Later in that morning a telephone call was made from No. 10 Downing street to the producers of the BBC programme informing them that No. 10 was withdrawing permission for the interview to be used. The BBC informed No. 10, greatly to its credit, that it would not co-operate in such—I will start again for the benefit of the Prime Minister who has just arrived because it is important that she hears what I have to say.
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  On Sunday 5 January, the Secretary of State for Trade and Industry recorded an interview. Later that morning No. 10 called the BBC withdrawing the so-called permission for the interview to be used. The BBC refused to co-operate, but offered the Secretary of State for Trade and Industry a chance to do the interview all over again—one might think an act of considerable generosity in the circumstances.
  Meanwhile, down in Oxford, the former Secretary of State for Defence had left his garden for long enough to go into the local studio of the BBC in Oxford, no doubt fitting it carefully in between pre-arranged photocalls with half the world's press who went to visit his garden. Sitting in the studio in Oxford, the Secretary of State for Defence was ready to take part live in that very edition of "The World this Weekend".
  I am informed that while the former Secretary of State for Defence was in the studio waiting to start the interview, another telephone call came from No. 10 to the BBC saying that he had no permission to give any interview. I suppose that the very best that can be said about that is that it is even-handed in some respects—both are to be gagged. Neither Secretary of State can be trusted to appear on the same programme.
  However, that is not all about manipulation. It is fortunate that the Secretary of State for Foreign and Commonwealth Affairs has arrived in the Chamber because he may be able to tell us whether it was on his instructions or those of the Prime Minister that the British ambassador in Rome was asked to go to the Italian Government and tell them to stop sending any telegrams to the Secretary of State for Defence for the United Kingdom. If that is true, and there has been no denial of it—the Secretary of State for Trade and Industry is not directly responsible for the Foreign Office but he is replying to the debate on behalf of the Government—we need to know why.
  What a curious Government when a British ambassador is sent to tell a foreign Government not to communicate with a member of that very Government. What kind of impression do we create upon our allies? It is bad enough when they do not know which Secretary of State to communicate with because they both have different conceptions of the national interest, but how much worse when our foreign and diplomatic service is used for purposes of personal manipulation by the Prime Minister against her own Government.
  Then there is the affair of the Solicitor-General's letter. Those of us who have had the opportunity in the past hour or two of reading that letter will wonder why it was sent at all. A more cavilling document it is hard to find. But, as my hon. Friend the Member for Linlithgow (Mr. Dalyell) and my right hon. and learned Friend the Member for Aberavon (Mr. Morris) said, one of the crucial questions here is how the Solicitor-General came to write the letter in the first place. He starts off:
  "Dear Michael, I saw in the 'The Times' on Saturday the text of a letter you are reported to have sent to the Managing Director of Lloyd's Merchant Bank."
  I suppose that there are a number of explanations. He could have been sitting down on Saturday and picked up The Times and said, "Oh my goodness"—remembering all the telegrams that were passing and are all detailed here—"I had better write to my old friend Michael and tell him that he has got things slightly wrong." That would be a very innocent view of the whole matter. As my right hon.

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  and learned Friend the Member for Aberavon said, Law Officers usually do not disturb themselves to write letters to anybody unless there is a special inducement or instruction to do so. It has crossed some of our minds that someone in the Government spoke to the Solicitor-General—
  Mr. Brittan indicated assent.—
  Mr. Smith: Now we know the answer to that point. One mystery has been resolved after only 11 minutes of my speech—the Secretary of State put the Solicitor-General up to it. I quite accept that the Secretary of State might want to consult a Law Officer during these matters. The point is: who asked the Solicitor-General to send that letter to the Secretary of State for Defence? No doubt the Secretary of State for Trade and Industry will tell us precisely what his role was in that matter and how the letter came to be written.
  Another matter is the leak of that letter. While the first matter is important, the second is sinister. If it is the case that one Department of this Government deliberately organised a leak to frustrate a Minister in the same Government, that is not only dirty tricks but a habit that is inimical to the practice of good government in this country. An investigation was called for by Opposition Members as soon as the information was revealed, and I understand that that has now taken place.
  The rumour is—and I do not know whether it is true—that an official in the Department of Trade and Industry has been identified as the culprit. I hope that the Secretary of State will tell us whether it was on the instruction of any senior official or Minister in his Department that that leak took place. Secondly, if it is true that the leak came from an official in the Department of Trade and Industry, has he or will he recommend to the Law Officers that that person be prosecuted, as has happened previously?
  I move directly to some of the more central events of the drama. We have watched, almost as astonished bystanders, as the former Secretary of State for Defence, beginning with his very careful resignation statement, revealed each chapter of this affair. He has spoken in a way that no one has been able to speak for years because he has been at the heart of the Thatcher Government for six and a half years. He speaks as a witness of knowledge and credit because he was entrusted with very high responsibility in a number of different offices of state.
  To some extent, Opposition Members have had to watch the drama because we have not been possessors of information. In our system of government, information is uniquely locked within the people who run the Administration at the time. It is only accidentally and by a series of curious events that the veil has been parted.
  Those charges will have to be answered by the Secretary of State for Trade and Industry on behalf of the Government. I propose to say little or no more about them other than that the Prime Minister—who must have known what the charges were, although she spoke before the former Secretary of State for Defence—chose to ignore them. The Prime Minister's hope is that this will all go away and that she can turn her back on this affair and get on to something else. I have to tell the Prime Minister that it will not go away. The tactic of refusing to make a statement on Monday led to a full-scale debate on
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  Wednesday. The failure to give answers on Wednesday means that the debate will continue in the House and throughout the country.
  I want to discuss the Secretary of State for Trade and Industry's involvement. It is fair that before he replies he knows what the Opposition expect him to answer. I begin with one of the minor matters but on which the former Secretary of State for Defence laid importance. Why does he not agree to publish the documents of 4 and 18 October which, it is said, show that he had a strong preference for the European solution? If he is prohibited from publishing by instruction from the Prime Minister, will he tell us whether it is true that the former Secretary of State is correct in saying that he supported the pro-European solution?
  The most important question that the Secretary of State for Trade and Industry must answer is about the so-called British Aerospace affair—the meeting in his Department the day before the Secretary of State for Defence resigned. The right hon. Gentleman knows—he must have known since Monday—the importance of that letter. Looking back, most of us did not realise how truly significant it was. It figures in our deliberations as a result of a question by the former Secretary of State for Defence. I have thought ever since then that if the former Secretary of State for Defence had not asked that question we should still be in ignorance about the existence and content of that letter.
  The important question, as the Secretary of State for Trade and Industry knows, is about what transpired at that meeting in two important respects. The Secretary of State was asked on Monday about what he said to Sir Raymond Lygo. The Secretary of State said that there was no truth in the suggestion that he said that British Aerospace was acting against the national interest or that it should withdraw from the European consortium.
  There are two pieces of evidence before us. The Prime Minister has chosen to reveal the departmental minute and we have a letter from Sir Austin Pearce. The information is not yet complete because Sir Austin Pearce in his letter says that a full transcript of Sir Raymond's account of proceedings is available. I understand that that was attached to the letter to the Prime Minister. The Secretary of State for Trade and Industry must have read it.
  The line is that Sir Austin Pearce objects to that being published. I regret that but I understand that the Government have no objection to it being published because otherwise it would be foolish to refer to it in that way. The sooner that we have the full text of that memorandum the better, in the interests of the Secretary of State for Trade and Industry and of everyone else. It should be published at an early date.
  The Secretary of State relies upon the minute to bolster his account of the meeting. The minute is called the official record. In fact, it is the note taken by the Secretary of State's private secretary, to be sent to the private secretary of the Minister of State responsible for the aerospace industry. The deficiencies in the document are serious. First, the minutes are not meant to be a verbatim account of what happens at a meeting. They are meant to be an official record for future action.
  Mr. Alfred Dubs: Many years ago I was in the Civil Service. I remember being told that notes taken at meetings were to be a creative process. It would be most

  1157
  unusual, if not unheard of, for a civil servant making a note of a meeting to put into his Minister's mouth words which were at variance with the Minister's stated policy.
  Mr. Smith: I wondered what instructions had been given to civil servants when I was a Minister. I am sure that my hon. Friend the Member for Battersea (Mr. Dubs) is right and I take account of his experience.
  The important point is that the record was not meant to be verbatim. However, the most important difficulty about relying on the record arises from the sequence of events. The controversial meeting took place at 5 o'clock on Thursday 8 January in the office of the Secretary of State for Trade and Industry. The allegation that the Secretary of State said that British Aerospace was acting against the national interest and that it should withdraw from the consortium was contained in the resignation statement on
  9 January of the former Secretary of State for Defence, the right hon. Member for Henley. The so-called minute is dated 10 January. It was prepared long after the controversiality of the conversation was known and when the sensitivity of the conversation was well understood.
  The letter from Sir Austin Pearce is most important. It is highly relevant and it is fortunate that it has become available. I shall mention some matters that are slightly at the margin, but just as important. Sir Austin Pearce's letter states:
  "The meeting took place immediately following a discussion Sir Raymond was having with Mr. Pattie on Airbus Industrie's proposals for a new programme."
  The Secretary of State for Trade and Industry said that it would have been "wholly artificial" if he did not see Sir Raymond Lygo, but apparently a message was sent to the meeting that the Secretary of State wished to see him and the Minister of State took Sir Raymond to the Secretary of State's presence.
  One aspect that Sir Austin Pearce is worried about is the connection with the Airbus proposals. He states:
  "The connection is worrying to say the least."
  The chairman of British Aerospace is worried that a connection is being made between Airbus—the future of his company—and the Westland affair. That must cause the Prime Minister deep concern. That is not a matter of credibility, but a matter about the way in which the Government behave and project themselves.
  In his letter, Sir Austin Pearce states that,
  "Sir Raymond returned directly,"
  after the meeting with the Secretary of State,
  "to a special Board meeting of British Aerospace which was in progress and made a full report of his conversation to the Board. He also wrote down all the salient points that had been made to him. His report stated that the following points were specifically covered by the Secretary of State."
  I shall refer to some of the points. He said that the Secretary of State

  "1. expressed a view that as the DTI were our sponsoring Dept we should have consulted with his Dept before we entered the Consortium.

  2. … whether we had fully considered the effect our actions might have on our American business.

  3. his concern at the Consortium leadership role we appeared to be adopting."

  The following point is fair to the Secretary of State:
  "4. that the decision should be left to the shareholders alone".
  Sir Raymond Lygo makes that claim also. The report continues:
  "5. That the agreement of the National Armaments Directors had never been endorsed by Government."
  The Secretary of State was correct on that point, as history has shown.
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  "6. that what we were doing was not in the National Interest.
  7. that we should withdraw."
  That matter could hardly be more clear from the testimony of Sir Raymond Lygo. The Secretary of State muttered that it is not true. If it is not true, what is the Secretary of State's position on Sir Raymond Lygo? He must tell us in his reply. Is he telling us that Sir Raymond Lygo invented the conversation or that he had a brainstorm? Is he telling us that Sir Raymond repeated the conversation in front of the board of British Aerospace and wrote it down at the time because his brains had deserted him suddenly and his imagination had taken over? We know perfectly well that neither Sir Raymond Lygo nor Sir Austin Pearce had the faintest idea that this would be a matter of public argument or that it would figure in debates on the Floor of the House.
  If there is any doubt about Sir Raymond Lygo, let me draw attention to the fourth paragraph on page 3 of the letter to the Prime Minister, where Sir Austin Pearce says:
  "I have no doubt that Sir Raymond's account of the events so fresh in his memory and recounted to the Board so soon after the event with the assistance of notes made immediately after that meeting was substantially correct and"—
  this is significant
  "are borne out by much other information that is coming to light. So far we have refused to make any public comment."
  That speaks volumes.
  I should tell the Secretary of State for Trade and Industry that if anyone would benefit from a committee of inquiry into the matter it is him, because if he is telling the truth, he has nothing to fear from an inquiry that would consider the matter fully and at which he would be given a full opportunity to exonerate himself. He must decide what to do. I make no calls for action by him before an inquiry is constituted, because I do not wish to prejudice the outcome of an inquiry. The Secretary of State should submit himself to the verdict of that inquiry.
  The debate is not simply about the political fate of one Secretary of State for Defence or the political future of a Secretary of State for Trade and Industry, let alone a Prime Minister. It is not simply about the contents of this letter, although circumstances force us to consider it carefully. It is not just about the relationship between Government and private industry, although that gives some cause for concern. It is not just about the ultimate destination of the control and ownership of one of Britain's important defence contractors, important though that is. The importance of this debate is that the Westland affair provides us with the clearest possible, most graphically illustrated, most thoroughly documented demonstration of how the Government have sacrificed, and continue to sacrifice, public interest to their ideological obsession with market forces.
  In addition, when the Government know that their obsession with market forces collides with the public interest and would be revealed, they engage in a course of deception to keep it concealed from the public eye. That is why, throughout the affair, the Government have shown a public face of even-handedness and of leaving it to the shareholders and the market to decide, but, as each step in the process has revealed, all the while, Ministers—especially the Prime Minister and the Secretary of State for Trade and Industry—have been working to achieve one solution. They have worked to obstruct one solution being put and have promoted another, but they knew that they could not be caught doing that, so they kept up the facade that they were even-handed.

  1159
  That is what has led them into this difficulty. That is what puts Ministers into the awkward position of having to decide between observing confidentiality and giving honest answers to the House of Commons. That is why we have had so many meetings of the Cabinet and the Government. Although Governments have many controversial and difficult things to do, the open and clear course is to call a meeting of the Cabinet, allow the two protagonists to put their cases, reach a decision, say that that is Government policy and get on with it. But that has not happened yet. There have been selective meetings of Ministers and manipulation of Cabinet minutes. No. 10 Downing street has practised a course of deception on one of the principal members of the Government. The former Secretary of State for Defence has many genuine complaints about the way in which he was personally treated by the head of the Government.
  However, the Government are obsessed with market forces, even when £750 million worth of Ministry of Defence work has gone to that company during the years, and only recently another £40 million was committed. The cost of the public sector orders far exceeds the past or future value of the company. Its share capital is insignificant compared with the size of the public sector orders that are given. Therefore, it is a legitimate matter of public concern and should, from the beginning, have engaged the full attention of Government from the top down. Cases should have been argued—no doubt passionately and carefully—in the national interest and, decisions having been taken, they should have been implemented openly and fearlessly. The opposite has happened and this discreditable Government with their discreditable Prime Minister and discreditable Ministers have finally been found out.
  9.30 pm
  The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Leon Brittan): I would like to start by referring once again to the statement that I made on Monday in which I sought to apologise to the House for any misleading impression that I may have given in my statement that afternoon. From some of the comments made during the course of today's debate, it has been suggested that I view the charge of misleading the House as being something less than of the utmost gravity. I assure the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) that that is most certainly not the case. I welcome the opportunity of reiterating the apology I made on Monday.
  Since Monday, permission has been given for the letter from Sir Austin Pearce to be published. That account of the meeting which took place between myself and Sir Raymond Lygo is, of course, substantially different from that given by the minutes taken by my officials and confirmed by my recollection and the recollection of others.
  Although a close scrutiny of the document will show that there is great similarity in the accounts, there are material points which are different. [Interruption.] On the two material points in Sir Austin Pearce's letter to which exception has been taken, points 6 and 7 — the suggestion that I told Sir Raymond Lygo that what British Aerospace was doing was not in the national interest and
  1160
  the suggestion that British Aerospace should withdraw from the consortium—I made it quite clear to the House on Monday that I said no such thing.
  Ms. Clare Short: Will the right hon. and learned Gentleman give way?
  Mr. Brittan: No, I shall not give way. A number of accusations have been made against me and I think that the House would wish me to have the opportunity to reply.
  I said no such thing at that meeting and I have made that absolutely clear. Since Monday's debate, I have looked at the records supplied by Sir Austin Pearce and I repeat once again that at no time during that meeting did I say that what British Aerospace was doing was not in the national interest. Nor did I say that British Aerospace should withdraw from the European consortium. I would be perfectly happy to give an account of that meeting to a Select Committee of the House and I have no objections to doing that.
  I would tell those hon. Members who would challenge my account of that meeting that fortunately I was not alone at the meeting. There were six people present in that room. Apart from myself, there were three civil servants, including my private secretary. Of course, Sir Raymond Lygo was present, as was my hon. Friend the Minister of State. It is useless for the right hon. and learned Member for Monklands, East (Mr. Smith) to say, in his attempt to deal with these matters, that the practice of the Civil Service is not to record the whole of what we say. We all know perfectly well that that is the practice. Quite apart from what was said in the note which corroborates my account to the House on Monday of what I said, all persons present at that meeting other than Sir Raymond Lygo—that is to say, three senior civil servants who have served Governments of different political persuasions, my hon. Friend the Minister of State and myself — have all confirmed our recollection as well as the note. I repeat that at no stage did I say that what British Aerospace was doing was not in the national interest. Nor did I say that British Aerospace should withdraw from the consortium.
  Mr. Winnick: Will the Minister give way?
  Mr. Brittan: No, I will give way as often as the right hon. and learned Member for Monklands, East gave way. It is I who am under attack, and I am entitled to defend myself.
  Anyone who challenges what I have given as an accurate account of what occurred on that occasion and suggests that I am telling a lie, not to put too fine a point on it, is saying the same about not one but five people, including three distinguished public servants.
  With regard to the conflict of recollection, on the matter of the national interest I can understand how Sir Raymond Lygo could have misunderstood what I said. The record of the meeting, which accords with the recollection of all those present other than Sir Raymond Lygo, shows that I said that I believed that it was not in the national interest that the uncertainty about Westland should carry on much longer. I should have thought that that view would commend itself to the House.
  If we are talking about probabilities—I do not rest my case on probabilities because I was there and I know what I said, as the right hon. and learned Member for Monklands, East well knows — it would have been absurd for me to say that the participation of British

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  Aerospace was against the national interest and even more absurd for me to say it at that meeting. Sir Austin Pearce correctly recalls that I had a meeting with him on 13 December — a day on which, to put it mildly, the controversy was running pretty hotly because by then the Government's endorsement of the national armaments director's recommendation was due to expire unless an offer was received from the European consortium which was acceptable to the Westland board. Had I believed that the participation of British Aerospace was against the national interest, I had ample opportunity to say so on that occasion. I did not say it then and I did not say it on 8 January. I very much regret that Sir Raymond Lygo had a different understanding, although I note that he is not prepared to have his own account made public. I have no objection to saying to a Select Committee what I have said to the House. Similarly, I have no objection to Sir Raymond Lygo disclosing whatever record he took at the time.
  Mr. Dykes: Will my right hon. and learned Friend give way?
  Mr. Brittan: I would rather not give way, as I wish to deal with some of the more general matters that have been raised, particularly some of the serious questions about industrial, commercial, economic and European policy.
  The Prime Minister has already set out in her speech the policy of the Government and the reasons behind that policy. On occasions such as this, it is natural for opinion between parties and within parties to polarise, and to polarise in opposite directions. The matter is presented as a controversy between a European solution to problems and a transatlantic solution to problems. There is a tendency to polarise the issue as a belief either in an interventionist policy in industry or a hands-off policy in industry. I do not see the issue in such a simple way.
  With regard to the contrast between the European and transatlantic solution to problems, I recognise that there is a great deal to be said for an independent European source of industrial activity not only in defence but in other areas. It does not follow, however, that its advantage is supreme in every case. It is a gross over-simplification of a serious issue to pretend to present such a clear-cut choice. With regard to the aircraft industry, and especially fighter aircraft, there is a powerful case for European co-operation. I am happy to pay tribute to my right hon. Friend the former Secretary of State for Defence for the work that he did in helping to bring that about. I part company with my right hon. Friend, as I suspect others will, because, although it is right to have European co-operation on fighter aircraft, it does not necessarily follow that that must be the only solution at which the Government should arrive with regard to helicopters.
  There are of course advantages in European co-operation even in the case of helicopters. I am not denigrating that solution. There are disadvantages, however, and one is entitled to draw attention to them—disadvantages from the point of view of competition policy, value for money and choice. One of the more unconvincing passages of my right hon. Friend's speech was where he tried to say that in the European defence arrangements it was still possible—even when there was only one source of defence procurement—to prevent monopolistic pressures and the country paying more than necessary for its defence.
  Dr. Hampson rose—
  Mr. Brittan: There are advantages and disadvantages in European co-operation over helicopters. It is unrealistic to present, as some uninformed people have done, a caricature of the choice facing a British company which has fallen on hard times as between a European or American solution. It is unrealistic and an over-simplification, because reference has been made by those hon. Gentlemen who have constituency or other personal connections with Westland, such as the hon. Member for Yeovil (Mr. Ashdown) and my hon. Friend the Member for Dorset, West (Mr. Spicer), to the fact that Westland has had, for 38 years, the closest possible connection with Sikorsky. Sikorsky is not a newcomer to Westland. In the successful days of Westland, that success was achieved by building planes initially designed in the United States—such as the Sea King and the Wessex — and then developing them with their expertise for other and specialist markets.
  That is the experience of Westland. It is not conclusive—it does not follow from that or from the fact that the work force virtually unanimously favours one solution—[Interruption.] It does not follow that that is the solution or the only solution, but it follows from the account that I have given of the advantages and disadvantages of the European route and of the American route that it is entirely reasonable for the central policy of the Government to be to leave the choice to the company through its shareholders.
  Mr. Mark Fisher: Will the right hon. and learned Gentleman give way?
  Mr. Brittan: No.
  That will always be the right policy. When it comes to Government intervention, I am not taking an absolutist stance. I am not taking a stance that there are no circumstances in which it would be right for Government to have a policy or a view about which route was the preferred one. Nor am I saying that there are no circumstances in which it would be right for the Government to intervene financially as well as by expressing a preference.
  My view in these matters is that it is perfectly legitimate for a Government to sponsor and assist British industry in certain cases by, for example, giving launch aid of some £250 million for the Airbus, the protection of which launch aid was a perfectly legitimate reason for me to warn Sir Raymond Lygo—[HON. MEMBERS: "Warn?"]—not against being a member of a consortium but of the danger presented to the consortium by talking about the issue in a way which stimulated protectionist attitudes in the United States.
  Let me remind the House—
  Mr. Dykes: Will my right hon. and learned Friend give way?
  Mr. Brittan: No, I shall not give way.
  Mr. Dykes rose—
  Mr. Speaker: Order. The hon. Gentleman has seen that the Secretary of State is not giving way.
  Mr. Brittan: I remind the House that, on this important point, the record of the meeting which, as I understand it, the right hon. and learned Member for Monklands, East

  1163
  was at least good enough not to dispute as being inaccurate but rather challenged as being incomplete makes it quite clear that Sir Raymond Lygo understood—
  Mr. John Smith: I did not say that.
  Mr. Brittan: Sir Raymond Lygo—
  Mr. Smith: Can I make this clear?
  Mr. Brittan: Yes, certainly.
  Mr. Smith: The Secretary of State's recollection is incomplete. I made no such distinction. I drew attention to considerable differences between the two documents. I said that there were deficiencies in it because it was done after the issue became controversial. I am not to be taken as assenting to the proposition that the Secretary of State has pronounced.
  Mr. Brittan: The right hon. and learned Gentleman is perfectly well aware that, although indeed the minute was written up on 10 January, the notes from which it was taken were made—
  Mr. Fisher rose—
  Mr. Straw rose—
  Mr. Brittan: I shall not give way. The notes from which it was taken were made contemporaneously and accord fully with the minute of the meeting. The right hon. and learned Gentleman may not find it comfortable to be reminded—
  Mr. Dykes: Will my right hon. and learned Friend give way?
  Mr. Brittan: No.
  Mr. Dykes rose —
  Mr. Speaker: Order. The hon. Gentleman has been here long enough to know that if the Secretary of State does not give way he must sit down.
  Mr. Brittan: The right hon. and learned Gentleman may find it uncomfortable to be reminded of the point, but it is indeed the case that Sir Raymond returned to the question of anti-American sentiment.
  In case anyone thinks that that is a pretext or excuse, let me remind hon. Members of what Sir Raymond Lygo himself said about it. He said that British Aerospace Incorporated, the United States subsidiary of British Aerospace, had expressed great concern about its United States business being harmed. So that was not a fantasy in my mind but a subject of serious concern. The right hon. and learned Gentleman might also like to know that the record of the meeting showed that I responded by saying that I was ready in that case to act immediately in defending British Aerospace's interest.
  Those who regard as unreal the prospect of America taking action against British Aerospace should know that it is only within a very recent period that I had to write to the United States trade representative, Mr. Clayton Yeutter, about that very matter. The position of the United States Government is that they do not like the success of the Airbus. [Interruption.] These are serious matters and they are highly material to what was said and done in relation to Westland. The United States Government do not like the fact that the Airbus is doing increasingly well.
  1164
  It is not just that they do not like it; they are actually threatening to take action against it. That action is on the basis of protectionism in the United States. What they say is that the support that we are giving to the Airbus in Europe entitles them to take protectionist action against it.
  Mr. Stuart Bell rose—
  Mr. Brittan: I am not giving way.
  It is to that sort of pressure that one is responding. The anxieties that Sir Raymond Lygo and I share are very real. It is for that reason that I say that we were not as a Government, and I was not as an individual, taking any kind of absolutist position either in relation to Britain and Europe or Britain and America, nor were we taking any absolutist position with regard to intervention in industry.
  Mr. D. N. Campbell-Savours: Tell us about Rome and the ambassador.
  Mr. Brittan: My right hon. Friend the former Secretary of State for Defence suggested that on 4 October I indicated that I had a preference for a European solution. Why that should be regarded in the eyes of my right hon. Friend as such a devilish thing to have escapes me, but it so happens that that is not the case. On 4 October I stated that the prospect of a European solution being developed within the time scale did not seem to be good, but I wanted to get a better assessment of those prospects before responding to Westland's proposals for Government underwriting of W30 sales. At that stage the proposition being put forward by Westland in concert with Sikorsky was that, if the reconstruction went through, the Government should underwrite W30 sales. So I recommended that Westland should be encouraged to pursue discussions urgently with European partners. However, I did not express a preference on that occasion for any particular solution that might be developed by Westland. [Interruption.] I believe that I am entitled to deal with the matters which were raised by my right hon. Friend the Member for Henley. I shall not have the agenda for my defence dictated by Opposition Members.
  Mr. Fisher rose—
  Mr. Brittan: I shall not accept interventions.
  Mr. Fisher rose—
  Mr. Brittan: The hon. Gentleman cannot seek to intervene all the time on the one hand and expect me to deal with all the matters which have been raised on the other. [HON. MEMBERS: "Give way."] Are Opposition Members being honest in saying that they want to hear my answers or do they want merely to shout me down? The other matter—[Interruption.]
  Mr. Speaker: Order. The debate has proceeded in good order so far. Other right hon. and hon. Members have been given a fair and quiet hearing and the House should afford that also to the Secretary of State.
  Mr. Brittan: Opposition Members are muttering from a sedentary position that I am not answering the debate. I am answering a point which was made by my right hon. Friend the Member for Henley, the ex-Secretary of State for Defence.
  Mr. Fisher rose—
  Mr. Ted Leadbitter: On a point of order, Mr. Speaker. As I understand it, when Ministers reply,

  1165
  they are presumed, as Front Bench spokesmen, to take up the issues which have been raised during the debate. I ask you, Mr. Speaker, whether there is any procedural manner in which you can ask the Secretary of State to respond to the charges made by the right hon. Member for Henley (Mr. Heseltine).
  Mr. Speaker: I think that that is exactly what the Secretary of State is doing.
  Mr. Brittan: For the convenience of the House, I shall explain what matters I am proposing to deal with in the time left available to me. They are exactly the ones that I had in mind to respond to if I was allowed to proceed uninterrupted. I was going to deal with the meeting of 17 October, with the Foreign Office telegram and with the Law Officer's letter.
  I shall deal first with the meeting of 17 October, to which my right hon. Friend the ex-Secretary of State for Defence has drawn attention. At that meeting, Sir John Cuckney referred to what he described as the Government's preference for a European minority shareholder in Westland. I said that a European minority shareholder was in both the commercial and political interests of the Government. However, that was against the background that in the board's view at that time a reconstruction involving Sikorsky seemed likely to require an element of Government underwriting. I therefore urged Sir John, as I had done previously, to explore thoroughly the possibility of a European minority shareholder. What I did not do, and have never done, was to suggest that the Government would make any attempt to influence the eventual decisions of the board or the company's shareholders. I remind the House that at that time Fiat had not joined Sikorsky.
  Mr. Heseltine: I think that I heard my right hon. and learned Friend say for the first time that at the meeting of 17 October he indicated that a European minority shareholding was in the commercial and industrial interests of Westland. That, I think, is a preference.
  Mr. Brittan: What I said was perfectly simple and straightforward. I said that a European minority shareholder was in both the commercial and political interests of the Government—I shall move on quickly because I know that the House wants to hear about other matters. I said that in the context of a Sikorsky bid, which at that stage seemed likely to require an element of Government underwriting. A European minority shareholder emerged later, and that was Fiat.
  When my right hon. Friend the Member for Henley wrote to Lloyds bank on 3 January, the House will recall that he wrote in answer to Mr. Horne, who had written to him that day. The Westland directors noticed that the terms of his letter were in certain respects different from the terms used in the Prime Minister's letter, and raised the matter with the DTI as the sponsoring Department, and there has been no doubt about that. I, in turn, consulted the Law Officer, as I said in an intervention earlier in the debate, who had not been sent a copy of my right hon. Friend's letter of 3 January. The Law Officer subsequently wrote the letter which has been the subject of controversy. I did not see it before it was written and I did not ask him in any way to write the letter to my right hon. Friend the then Secretary of State.
  Finally, let me deal with the other matter that has been raised.
  Mr. Derek Foster rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question accordingly put, That the original words stand part of the Question:—
  The House divided: Ayes 217, Noes 370.

  Division No. 37

  10 pm

  AYES

  Abse, Leo

  Evans, John (St. Helens N)

  Adams, Allen (Paisley N)

  Ewing, Harry

  Alton, David

  Fatchett, Derek

  Anderson, Donald

  Faulds, Andrew

  Archer, Rt Hon Peter

  Field, Frank (Birkenhead)

  Ashdown, Paddy

  Fields, T. (L'pool Broad Gn)

  Ashley, Rt Hon Jack

  Flannery, Martin

  Ashton, Joe

  Foot, Rt Hon Michael

  Atkinson, N. (Tottenham)

  Forrester, John

  Bagier, Gordon A. T.

  Foster, Derek

  Banks, Tony (Newham NW)

  Foulkes, George

  Barnett, Guy

  Fraser, J. (Norwood)

  Barron, Kevin

  Freeson, Rt Hon Reginald

  Beith, A. J.

  Freud, Clement

  Bell, Stuart

  Garrett, W. E.

  Benn, Rt Hon Tony

  George, Bruce

  Bennett, A. (Dent'n & Red'sh)

  Gilbert, Rt Hon Dr John

  Bermingham, Gerald

  Godman, Dr Norman

  Bidwell, Sydney

  Golding, John

  Blair, Anthony

  Gould, Bryan

  Boyes, Roland

  Gourlay, Harry

  Bray, Dr Jeremy

  Hamilton, James (M'well N)

  Brown, Gordon (D'f'mline E)

  Hamilton, W. W. (Fife Central)

  Brown, N. (N'c'tle-u-Tyne E)

  Hancock, Mr. Michael

  Brown, R. (N'c'tle-u-Tyne N)

  Hardy, Peter

  Brown, Ron (E'burgh, Leith)

  Harman, Ms Harriet

  Bruce, Malcolm

  Harrison, Rt Hon Walter

  Buchan, Norman

  Hart, Rt Hon Dame Judith

  Caborn, Richard

  Hattersley, Rt Hon Roy

  Callaghan, Rt Hon J.

  Haynes, Frank

  Callaghan, Jim (Heyw'd & M)

  Healey, Rt Hon Denis

  Campbell-Savours, Dale

  Heffer, Eric S.

  Canavan, Dennis

  Hogg, N. (C'nauld & Kilsyth)

  Carlile, Alexander (Montg'y)

  Holland, Stuart (Vauxhall)

  Cartwright, John

  Home Robertson, John

  Clark, Dr David (S Shields)

  Howell, Rt Hon D. (S'heath)

  Clarke, Thomas

  Hoyle, Douglas

  Clay, Robert

  Hughes, Robert (Aberdeen N)

  Clelland, David Gordon

  Hughes, Roy (Newport East)

  Clwyd, Mrs Ann

  Hughes, Sean (Knowsley S)

  Cocks, Rt Hon M. (Bristol S.)

  Hughes, Simon (Southwark)

  Cohen, Harry

  Janner, Hon Greville

  Coleman, Donald

  Jenkins, Rt Hon Roy (Hillh'd)

  Concannon, Rt Hon J. D.

  John, Brynmor

  Conlan, Bernard

  Johnston, Sir Russell

  Cook, Frank (Stockton North)

  Jones, Barry (Alyn & Deeside)

  Cook, Robin F. (Livingston)

  Kaufman, Rt Hon Gerald

  Corbett, Robin

  Kennedy, Charles

  Cox, Thomas (Tooting)

  Kilroy-Silk, Robert

  Craigen, J. M.

  Kinnock, Rt Hon Neil

  Crowther, Stan

  Kirkwood, Archy

  Cunliffe, Lawrence

  Lambie, David

  Cunningham, Dr John

  Lamond, James

  Dalyell, Tam

  Leadbitter, Ted

  Davies, Rt Hon Denzil (L'lli)

  Leighton, Ronald

  Davis, Terry (B'ham, H'ge H'l)

  Lewis, Ron (Carlisle)

  Deakins, Eric

  Lewis, Terence (Worsley)

  Dewar, Donald

  Litherland, Robert

  Dixon, Donald

  Livsey, Richard

  Dobson, Frank

  Lloyd, Tony (Stretford)

  Dormand, Jack

  Lofthouse, Geoffrey

  Douglas, Dick

  Loyden, Edward

  Dubs, Alfred

  McCartney, Hugh

  Dunwoody, Hon Mrs G.

  McDonald, Dr Oonagh

  Eadie, Alex

  McGuire, Michael

  Eastham, Ken

  McKay, Allen (Penistone)

  Edwards, Bob (W'h'mpt'n SE)

  MacKenzie, Rt Hon Gregor

  Ellis, Raymond

  Maclennan, Robert

  1167

  McNamara, Kevin

  Ross, Stephen (Isle of Wight)

  McTaggart, Robert

  Rowlands, Ted

  McWilliam, John

  Ryman, John

  Madden, Max

  Sedgemore, Brian

  Marek, Dr John

  Sheerman, Barry

  Marshall, David (Shettleston)

  Sheldon, Rt Hon R.

  Martin, Michael

  Shore, Rt Hon Peter

  Mason, Rt Hon Roy

  Short, Ms Clare (Ladywood)

  Maxton, John

  Silkin, Rt Hon J.

  Maynard, Miss Joan

  Skinner, Dennis

  Meacher, Michael

  Smith, C (Isl'ton S & F'bury)

  Meadowcroft, Michael

  Smith, Rt Hon J. (M'ds e)

  Michie, William

  Snape, Peter

  Mikardo, Ian

  Soley, Clive

  Millan, Rt Hon Bruce

  Spearing, Nigel

  Miller, Dr M. S. (E Kilbride)

  Steel, Rt Hon David

  Mitchell, Austin (G't Grimsby)

  Stewart, Rt Hon D. (W Isles)

  Morris, Rt Hon A. (W'shawe)

  Stott, Roger

  Morris, Rt Hon J. (Aberavon)

  Strang, Gavin

  Nellist, David

  Straw, Jack

  Oakes, Rt Hon Gordon

  Thomas, Dafydd (Merioneth)

  O'Brien, William

  Thomas, Dr R. (Carmarthen)

  O'Neill, Martin

  Thompson, J. (Wansbeck)

  Orme, Rt Hon Stanley

  Thorne, Stan (Preston)

  Park, George

  Torney, Tom

  Parry, Robert

  Wallace, James

  Patchett, Terry

  Wardell, Gareth (Gower)

  Pendry, Tom

  Wareing, Robert

  Penhaligon, David

  Weetch, Ken

  Pike, Peter

  Welsh, Michael

  Powell, Raymond (Ogmore)

  White, James

  Prescott, John

  Wigley, Dafydd

  Radice, Giles

  Williams, Rt Hon A.

  Randall, Stuart

  Wilson, Gordon

  Redmond, M.

  Winnick, David

  Rees, Rt Hon M. (Leeds S)

  Woodall, Alec

  Richardson, Ms Jo

  Wrigglesworth, Ian

  Roberts, Allan (Bootle)

  Young, David (Bolton SE)

  Roberts, Ernest (Hackney N)

  Robertson, George

  Tellers for the Ayes:

  Robinson, G. (Coventry NW)

  Mr. Mark Fisher and

  Rogers, Allan

  Mr. Ron Davies.

  Rooker, J. W.

  NOES

  Adley, Robert

  Brandon-Bravo, Martin

  Aitken, Jonathan

  Bright, Graham

  Alexander, Richard

  Brinton, Tim

  Alison, Rt Hon Michael

  Brittan, Rt Hon Leon

  Amess, David

  Brooke, Hon Peter

  Ancram, Michael

  Brown, M. (Brigg & Cl'thpes)

  Arnold, Tom

  Browne, John

  Ashby, David

  Bruinvels, Peter

  Aspinwall, Jack

  Bryan, Sir Paul

  Atkins, Rt Hon Sir H.

  Buchanan-Smith, Rt Hon A.

  Atkins, Robert (South Ribble)

  Buck, Sir Antony

  Atkinson, David (B'm'th E)

  Budgen, Nick

  Baker, Rt Hon K. (Mole Vall'y)

  Bulmer, Esmond

  Baker, Nicholas (Dorset N)

  Burt, Alistair

  Baldry, Tony

  Butcher, John

  Banks, Robert (Harrogate)

  Butler, Rt Hon Sir Adam

  Batiste, Spencer

  Butterfill, John

  Beaumont-Dark, Anthony

  Carlisle, John (Luton N)

  Bellingham, Henry

  Carlisle, Kenneth (Lincoln)

  Bendall, Vivian

  Carlisle, Rt Hon M. (W'ton S)

  Benyon, William

  Carttiss, Michael

  Best, Keith

  Cash, William

  Bevan, David Gilroy

  Chalker, Mrs Lynda

  Biffen, Rt Hon John

  Channon, Rt Hon Paul

  Biggs-Davison, Sir John

  Chapman, Sydney

  Blackburn, John

  Chope, Christopher

  Blaker, Rt Hon Sir Peter

  Churchill, W. S.

  Body, Sir Richard

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

  Bonsor, Sir Nicholas

  Clark, Dr Michael (Rochford)

  Bottomley, Peter

  Clark, Sir W. (Croydon S)

  Bottomley, Mrs Virginia

  Clarke, Rt Hon K. (Rushcliffe)

  Bowden, A. (Brighton K'to'n)

  Clegg, Sir Walter

  Bowden, Gerald (Dulwich)

  Cockeram, Eric

  Boyson, Dr Rhodes

  Colvin, Michael

  Braine, Rt Hon Sir Bernard

  Conway, Derek

  1168

  Coombs, Simon

  Hogg, Hon Douglas (Gr'th'm)

  Cope, John

  Holland, Sir Philip (Gedling)

  Cormack, Patrick

  Holt, Richard

  Corrie, John

  Hordern, Sir Peter

  Couchman, James

  Howard, Michael

  Cranborne, Viscount

  Howarth, Alan (Stratf'd-on-A)

  Crouch, David

  Howarth, Gerald (Cannock)

  Currie, Mrs Edwina

  Howe, Rt Hon Sir Geoffrey

  Dickens, Geoffrey

  Howell, Rt Hon D. (G'ldford)

  Dicks, Terry

  Howell, Ralph (Norfolk, N)

  Dorrell, Stephen

  Hubbard-Miles, Peter

  Dover, Den

  Hunt, David (Wirral)

  Dunn, Robert

  Hunt, John (Ravensbourne)

  Durant, Tony

  Hunter, Andrew

  Dykes, Hugh

  Hurd, Rt Hon Douglas

  Edwards, Rt Hon N. (P'broke)

  Irving, Charles

  Evennett, David

  Jackson, Robert

  Eyre, Sir Reginald

  Jenkin, Rt Hon Patrick

  Fallon, Michael

  Jessel, Toby

  Farr, Sir John

  Johnson Smith, Sir Geoffrey

  Favell, Anthony

  Jones, Gwilym (Cardiff N)

  Fenner, Mrs Peggy

  Jones, Robert (Herts W)

  Finsberg, Sir Geoffrey

  Jopling, Rt Hon Michael

  Fletcher, Alexander

  Joseph, Rt Hon Sir Keith

  Fookes, Miss Janet

  Kellett-Bowman, Mrs Elaine

  Forman, Nigel

  Key, Robert

  Forsyth, Michael (Stirling)

  King, Roger (B'ham N'field)

  Forth, Eric

  King, Rt Hon Tom

  Fowler, Rt Hon Norman

  Knight, Greg (Derby N)

  Fox, Marcus

  Knight, Dame Jill (Edgbaston)

  Franks, Cecil

  Knowles, Michael

  Fraser, Peter (Angus East)

  Knox, David

  Freeman, Roger

  Lamont, Norman

  Gale, Roger

  Lang, Ian

  Galley, Roy

  Latham, Michael

  Gardiner, George (Reigate)

  Lawler, Geoffrey

  Gardner, Sir Edward (Fylde)

  Lawrence, Ivan

  Garel-Jones, Tristan

  Lawson, Rt Hon Nigel

  Gilmour, Rt Hon Sir Ian

  Lee, John (Pendle)

  Glyn, Dr Alan

  Leigh, Edward (Gainsbor'gh)

  Goodhart, Sir Philip

  Lennox-Boyd, Hon Mark

  Goodlad, Alastair

  Lester, Jim

  Gorst, John

  Lewis, Sir Kenneth (Stamf'd)

  Gow, Ian

  Lightbown, David

  Gower, Sir Raymond

  Lilley, Peter

  Grant, Sir Anthony

  Lloyd, Ian (Havant)

  Greenway, Harry

  Lloyd, Peter, (Fareham)

  Gregory, Conal

  Lord, Michael

  Griffiths, Peter (Portsm'th N)

  Luce, Rt Hon Richard

  Grist, Ian

  Lyell, Nicholas

  Ground, Patrick

  McCrindle, Robert

  Grylls, Michael

  McCurley, Mrs Anna

  Gummer, Rt Hon John S

  Macfarlane, Neil

  Hamilton, Hon A. (Epsom)

  MacGregor, Rt Hon John

  Hamilton, Neil (Tatton)

  MacKay, Andrew (Berkshire)

  Hampson, Dr Keith

  MacKay, John (Argyll & Bute)

  Hanley, Jeremy

  Maclean, David John

  Hannam, John

  McNair-Wilson, P. (New F'st)

  Hargreaves, Kenneth

  McQuarrie, Albert

  Harris, David

  Madel, David

  Harvey, Robert

  Major, John

  Haselhurst, Alan

  Malins, Humfrey

  Havers, Rt Hon Sir Michael

  Malone, Gerald

  Hawkins, C. (High Peak)

  Maples, John

  Hawkins, Sir Paul (N'folk SW)

  Marland, Paul

  Hawksley, Warren

  Marlow, Antony

  Hayes, J.

  Marshall, Michael (Arundel)

  Hayhoe, Rt Hon Barney

  Mates, Michael

  Hayward, Robert

  Maude, Hon Francis

  Heath, Rt Hon Edward

  Mawhinney, Dr Brian

  Heathcoat-Amory, David

  Maxwell-Hyslop, Robin

  Heddle, John

  Mayhew, Sir Patrick

  Henderson, Barry

  Mellor, David

  Heseltine, Rt Hon Michael

  Merchant, Piers

  Hickmet, Richard

  Meyer, Sir Anthony

  Hicks, Robert

  Miller, Hal (B'grove)

  Higgins, Rt Hon Terence L.

  Mills, Iain (Meriden)

  Hill, James

  Miscampbell, Norman

  Hind, Kenneth

  Mitchell, David (Hants NW)

  Hirst, Michael

  Moate, Roger

  1169

  Monro, Sir Hector

  Soames, Hon Nicholas

  Montgomery, Sir Fergus

  Speed, Keith

  Moore, Rt Hon John

  Speller, Tony

  Morrison, Hon C. (Devizes)

  Spence, John

  Morrison, Hon P. (Chester)

  Spencer, Derek

  Moynihan, Hon C.

  Spicer, Jim (Dorset W)

  Mudd, David

  Spicer, Michael (S Worcs)

  Murphy, Christopher

  Squire, Robin

  Neale, Gerrard

  Stanbrook, Ivor

  Needham, Richard

  Stanley, Rt Hon John

  Nelson, Anthony

  Steen, Anthony

  Neubert, Michael

  Stern, Michael

  Newton, Tony

  Stevens, Lewis (Nuneaton)

  Nicholls, Patrick

  Stewart, Allan (Eastwood)

  Normanton, Tom

  Stewart, Andrew (Sherwood)

  Norris, Steven

  Stewart, Ian (Hertf'dshire N)

  Onslow, Cranley

  Stokes, John

  Oppenheim, Phillip

  Stradling Thomas, Sir John

  Oppenheim, Rt Hon Mrs S.

  Sumberg, David

  Osborn, Sir John

  Tapsell, Sir Peter

  Ottaway, Richard

  Taylor, John (Solihull)

  Page, Sir John (Harrow W)

  Taylor, Teddy (S'end E)

  Page, Richard (Herts SW)

  Temple-Morris, Peter

  Parkinson, Rt Hon Cecil

  Terlezki, Stefan

  Parris, Matthew

  Thatcher, Rt Hon Mrs M.

  Patten, Christopher (Bath)

  Thomas, Rt Hon Peter

  Patten, J. (Oxf W & Abdgn)

  Thompson, Donald (Calder V)

  Pattie, Geoffrey

  Thompson, Patrick (N'ich N)

  Pawsey, James

  Thorne, Neil (Ilford S)

  Peacock, Mrs Elizabeth

  Thornton, Malcolm

  Pollock, Alexander

  Thurnham, Peter

  Porter, Barry

  Townend, John (Bridlington)

  Portillo, Michael

  Townsend, Cyril D, (B'heath)

  Powell, William (Corby)

  Tracey, Richard

  Powley, John

  Trippier, David

  Prentice, Rt Hon Reg

  Trotter, Neville

  Price, Sir David

  Twinn, Dr Ian

  Prior, Rt Hon James

  van Straubenzee, Sir W.

  Proctor, K. Harvey

  Vaughan, Sir Gerard

  Pym, Rt Hon Francis

  Viggers, Peter

  Raffan, Keith

  Waddington, David

  Raison, Rt Hon Timothy

  Wakeham, Rt Hon John

  Rathbone, Tim

  Waldegrave, Hon William

  Renton, Tim

  Walden, George

  Rhodes James, Robert

  Walker, Bill (T'side N)

  Rhys Williams, Sir Brandon

  Walker, Rt Hon P. (W'cester)

  Ridley, Rt Hon Nicholas

  Waller, Gary

  Ridsdale, Sir Julian

  Walters, Dennis

  Rifkind, Rt Hon Malcolm

  Ward, John

  Roberts, Wyn (Conwy)

  Wardle, C. (Bexhill)

  Robinson, Mark (N'port W)

  Warren, Kenneth

  Roe, Mrs Marion

  Watson, John

  Rossi, Sir Hugh

  Watts, John

  Rost, Peter

  Wells, Bowen (Hertford)

  Rowe, Andrew

  Wells, Sir John (Maidstone)

  Rumbold, Mrs Angela

  Wheeler, John

  Ryder, Richard

  Whitfield, John

  Sackville, Hon Thomas

  Whitney, Raymond

  Sainsbury, Hon Timothy

  Wiggin, Jerry

  St. John-Stevas, Rt Hon N.

  Wilkinson, John

  Sayeed, Jonathan

  Winterton, Mrs Ann

  Shaw, Giles (Pudsey)

  Winterton, Nicholas

  Shaw, Sir Michael (Scarb')

  Wolfson, Mark

  Shelton, William (Streatham)

  Wood, Timothy

  Shepherd, Colin (Hereford)

  Woodcock, Michael

  Shepherd, Richard (Aldridge)

  Yeo, Tim

  Shersby, Michael

  Young, Sir George (Acton)

  Silvester, Fred

  Younger, Rt Hon George

  Sims, Roger

  Skeet, Sir Trevor

  Tellers for the Noes:

  Smith, Sir Dudley (Warwick)

  Mr. Carol Mather and

  Smith, Tim (Beaconsfield)

  Mr. Robert Boscawen.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments):—
  The House divided: Ayes 367, Noes 217

  Division No. 38]

  10.14 pm

  AYES

  Aitken, Jonathan

  Dorrell, Stephen

  Alexander, Richard

  Dover, Den

  Alison, Rt Hon Michael

  Dunn, Robert

  Amess, David

  Durant, Tony

  Ancram, Michael

  Dykes, Hugh

  Arnold, Tom

  Edwards, Rt Hon N. (P'broke)

  Ashby, David

  Evennett, David

  Aspinwall, Jack

  Eyre, Sir Reginald

  Atkins, Rt Hon Sir H.

  Fallon, Michael

  Atkins, Robert (South Ribble)

  Farr, Sir John

  Atkinson, David (B'm'th E)

  Favell, Anthony

  Baker, Rt Hon K. (Mole Vall'y)

  Fenner, Mrs Peggy

  Baker, Nicholas (Dorset N)

  Finsberg, Sir Geoffrey

  Baldry, Tony

  Fletcher, Alexander

  Banks, Robert (Harrogate)

  Fookes, Miss Janet

  Batiste, Spencer

  Forman, Nigel

  Beaumont-Dark, Anthony

  Forsyth, Michael (Stirling)

  Bellingham, Henry

  Forth, Eric

  Bendall, Vivian

  Fowler, Rt Hon Norman

  Benyon, William

  Fox, Marcus

  Best, Keith

  Franks, Cecil

  Bevan, David Gilroy

  Fraser, Peter (Angus East)

  Biffen, Rt Hon John

  Freeman, Roger

  Biggs-Davison, Sir John

  Gale, Roger

  Blackburn, John

  Galley, Roy

  Blaker, Rt Hon Sir Peter

  Gardiner, George (Reigate)

  Body, Sir Richard

  Gardner, Sir Edward (Fylde)

  Bonsor, Sir Nicholas

  Garel-Jones, Tristan

  Bottomley, Peter

  Gilmour, Rt Hon Sir Ian

  Bottomley, Mrs Virginia

  Glyn, Dr Alan

  Bowden, A. (Brighton K'to'n)

  Goodhart, Sir Philip

  Bowden, Gerald (Dulwich)

  Goodlad, Alastair

  Boyson, Dr Rhodes

  Gorst, John

  Braine, Rt Hon Sir Bernard

  Gow, Ian

  Brandon-Bravo, Martin

  Gower, Sir Raymond

  Bright, Graham

  Grant, Sir Anthony

  Brinton, Tim

  Greenway, Harry

  Brittan, Rt Hon Leon

  Gregory, Conal

  Brooke, Hon Peter

  Griffiths, Peter (Portsm'th N)

  Brown, M. (Brigg & Cl'thpes)

  Grist, Ian

  Browne, John

  Ground, Patrick

  Bruinvels, Peter

  Grylls, Michael

  Bryan, Sir Paul

  Gummer, Rt Hon John S

  Buchanan-Smith, Rt Hon A.

  Hamilton, Hon A. (Epsom)

  Buck, Sir Antony

  Hamilton, Neil (Tatton)

  Budgen, Nick

  Hampson, Dr Keith

  Bulmer, Esmond

  Hanley, Jeremy

  Burt, Alistair

  Hannam, John

  Butcher, John

  Hargreaves, Kenneth

  Butler, Rt Hon Sir Adam

  Harris, David

  Butterfill, John

  Harvey, Robert

  Carlisle, John (Luton N)

  Haselhurst, Alan

  Carlisle, Kenneth (Lincoln)

  Havers, Rt Hon Sir Michael

  Carlisle, Rt Hon M. (W'ton S)

  Hawkins, C. (High Peak)

  Carttiss, Michael

  Hawkins, Sir Paul (N'folk SW)

  Cash, William

  Hawksley, Warren

  Chalker, Mrs Lynda

  Hayes, J.

  Channon, Rt Hon Paul

  Hayhoe, Rt Hon Barney

  Chapman, Sydney

  Hayward, Robert

  Chope, Christopher

  Heath, Rt Hon Edward

  Churchill, W. S.

  Heathcoat-Amory, David

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

  Heddle, John

  Clark, Dr Michael (Rochford)

  Henderson, Barry

  Clark, Sir W. (Croydon S)

  Heseltine, Rt Hon Michael

  Clarke, Rt Hon K. (Rushcliffe)

  Hickmet, Richard

  Clegg, Sir Walter

  Higgins, Rt Hon Terence L.

  Cockeram, Eric

  Hill, James

  Colvin, Michael

  Hind, Kenneth

  Conway, Derek

  Hirst, Michael

  Coombs, Simon

  Hogg, Hon Douglas (Gr'th'm)

  Cope, John

  Holland, Sir Philip (Gedling)

  Corrie, John

  Holt, Richard

  Couchman, James

  Hordern, Sir Peter

  Cranborne, Viscount

  Howard, Michael

  Crouch, David

  Howarth, Alan (Stratf'd-on-A)

  Currie, Mrs Edwina

  Howarth, Gerald (Cannock)

  Dickens, Geoffrey

  Howe, Rt Hon Sir Geoffrey

  Dicks, Terry

  Howell, Rt Hon D. (G'ldford)

  1171

  Howell, Ralph (Norfolk, N)

  Needham, Richard

  Hubbard-Miles, Peter

  Nelson, Anthony

  Hunt, David (Wirral)

  Neubert, Michael

  Hunt, John (Ravensbourne)

  Newton, Tony

  Hunter, Andrew

  Nicholls, Patrick

  Hurd, Rt Hon Douglas

  Normanton, Tom

  Irving, Charles

  Norris, Steven

  Jackson, Robert

  Onslow, Cranley

  Jenkin, Rt Hon Patrick

  Oppenheim, Phillip

  Jessel, Toby

  Oppenheim, Rt Hon Mrs S.

  Johnson Smith, Sir Geoffrey

  Osborn, Sir John

  Jones, Gwilym (Cardiff N)

  Ottaway, Richard

  Jones, Robert (Herts W)

  Page, Sir John (Harrow W)

  Jopling, Rt Hon Michael

  Page, Richard (Herts SW)

  Joseph, Rt Hon Sir Keith

  Parkinson, Rt Hon Cecil

  Kellett-Bowman, Mrs Elaine

  Parris, Matthew

  Key, Robert

  Patten, Christopher (Bath)

  King, Roger (B'ham N'field)

  Patten, J. (Oxf W & Abdgn)

  King, Rt Hon Tom

  Pattie, Geoffrey

  Knight, Greg (Derby N)

  Pawsey, James

  Knight, Dame Jill (Edgbaston)

  Peacock, Mrs Elizabeth

  Knowles, Michael

  Pollock, Alexander

  Knox, David

  Porter, Barry

  Lamont, Norman

  Portillo, Michael

  Lang, Ian

  Powell, William (Corby)

  Latham, Michael

  Powley, John

  Lawler, Geoffrey

  Prentice, Rt Hon Reg

  Lawrence, Ivan

  Price, Sir David

  Lawson, Rt Hon Nigel

  Prior, Rt Hon James

  Lee, John (Pendle)

  Proctor, K. Harvey

  Leigh, Edward (Gainsbor'gh)

  Pym, Rt Hon Francis

  Lennox-Boyd, Hon Mark

  Raffan, Keith

  Lester, Jim

  Raison, Rt Hon Timothy

  Lewis, Sir Kenneth (Stamf'd)

  Rathbone, Tim

  Lightbown, David

  Renton, Tim

  Lilley, Peter

  Rhodes James, Robert

  Lloyd, Ian (Havant)

  Rhys Williams, Sir Brandon

  Lloyd, Peter, (Fareham)

  Ridley, Rt Hon Nicholas

  Lord, Michael

  Ridsdale, Sir Julian

  Luce, Rt Hon Richard

  Rifkind, Rt Hon Malcolm

  Lyell, Nicholas

  Roberts, Wyn (Conwy)

  McCrindle, Robert

  Robinson, Mark (N'port W)

  McCurley, Mrs Anna

  Roe, Mrs Marion

  Macfarlane, Neil

  Rossi, Sir Hugh

  MacGregor, Rt Hon John

  Rost, Peter

  MacKay, Andrew (Berkshire)

  Rowe, Andrew

  MacKay, John (Argyll & Bute)

  Rumbold, Mrs Angela

  Maclean, David John

  Ryder, Richard

  McNair-Wilson, P. (New F'st)

  Sackville, Hon Thomas

  McQuarrie, Albert

  Sainsbury, Hon Timothy

  Madel, David

  St. John-Stevas, Rt Hon N.

  Major, John

  Sayeed, Jonathan

  Malins, Humfrey

  Shaw, Giles (Pudsey)

  Malone, Gerald

  Shaw, Sir Michael (Scarb')

  Maples, John

  Shelton, William (Streatham)

  Marland, Paul

  Shepherd, Colin (Hereford)

  Marlow, Antony

  Shepherd, Richard (Aldridge)

  Marshall, Michael (Arundel)

  Shersby, Michael

  Mates, Michael

  Silvester, Fred

  Maude, Hon Francis

  Sims, Roger

  Mawhinney, Dr Brian

  Skeet, Sir Trevor

  Maxwell-Hyslop, Robin

  Smith, Sir Dudley (Warwick)

  Mayhew, Sir Patrick

  Smith, Tim (Beaconsfield)

  Mellor, David

  Soames, Hon Nicholas

  Merchant, Piers

  Speed, Keith

  Meyer, Sir Anthony

  Speller, Tony

  Miller, Hal (B'grove)

  Spence, John

  Mills, Iain (Meriden)

  Spencer, Derek

  Miscampbell, Norman

  Spicer, Jim (Dorset W)

  Mitchell, David (Hants NW)

  Spicer, Michael (S Worcs)

  Moate, Roger

  Squire, Robin

  Monro, Sir Hector

  Stanbrook, Ivor

  Montgomery, Sir Fergus

  Stanley, John

  Moore, Rt Hon John

  Steen, Anthony

  Morrison, Hon C. (Devizes)

  Stern, Michael

  Morrison, Hon P. (Chester)

  Stevens, Lewis (Nuneaton)

  Moynihan, Hon C.

  Stewart, Allan (Eastwood)

  Mudd, David

  Stewart, Andrew (Sherwood)

  Murphy, Christopher

  Stewart, Ian (Hertf'dshire N)

  Neale, Gerrard

  Stokes, John

  1172

  Stradling Thomas, Sir John

  Walker, Bill (T'side N)

  Sumberg, David

  Walker, Rt Hon P. (W'cester)

  Tapsell, Sir Peter

  Waller, Gary

  Taylor, John (Solihull)

  Walters, Dennis

  Taylor, Teddy (S'end E)

  Ward, John

  Temple-Morris, Peter

  Wardle, C. (Bexhill)

  Terlezki, Stefan

  Warren, Kenneth

  Thatcher, Rt Hon Mrs M.

  Watson, John

  Thomas, Rt Hon Peter

  Watts, John

  Thompson, Donald (Calder V)

  Wells, Bowen (Hertford)

  Thompson, Patrick (N'ich N)

  Wells, Sir John (Maidstone)

  Thorne, Neil (Ilford S)

  Wheeler, John

  Thornton, Malcolm

  Whitfield, John

  Thurnham, Peter

  Whitney, Raymond

  Townend, John (Bridlington)

  Wiggin, Jerry

  Townsend, Cyril D. (B'heath)

  Wilkinson, John

  Tracey, Richard

  Winterton, Mrs Ann

  Trippier, David

  Wolfson, Mark

  Trotter, Neville

  Wood, Timothy

  Twinn, Dr Ian

  Woodcock, Michael

  van Straubenzee, Sir W.

  Yeo, Tim

  Vaughan, Sir Gerard

  Young, Sir George (Acton)

  Viggers, Peter

  Younger, Rt Hon George

  Waddington, David

  Wakeham, Rt Hon John

  Tellers for the Ayes:

  Waldegrave, Hon William

  Mr. Carol Mather and

  Walden, George

  Mr. Robert Boscawen.

  NOES

  Abse, Leo

  Cunliffe, Lawrence

  Adams, Allen (Paisley N)

  Cunningham, Dr John

  Alton, David

  Dalyell, Tam

  Anderson, Donald

  Davies, Rt Hon Denzil (L'lli)

  Archer, Rt Hon Peter

  Davis, Terry (B'ham, H'ge H'l)

  Ashdown, Paddy

  Deakins, Eric

  Ashley, Rt Hon Jack

  Dewar, Donald

  Ashton, Joe

  Dixon, Donald

  Atkinson, N. (Tottenham)

  Dobson, Frank

  Bagier, Gordon A. T.

  Dormand, Jack

  Banks, Tony (Newham NW)

  Douglas, Dick

  Barnett, Guy

  Dubs, Alfred

  Barron, Kevin

  Dunwoody, Hon Mrs G.

  Beith, A. J.

  Eadie, Alex

  Bell, Stuart

  Eastham, Ken

  Benn, Rt Hon Tony

  Edwards, Bob (W'h'mpt'n SE)

  Bennett, A. (Dent'n & Red'sh)

  Ellis, Raymond

  Bermingham, Gerald

  Evans, John (St. Helens N)

  Bidwell, Sydney

  Ewing, Harry

  Blair, Anthony

  Fatchett, Derek

  Boyes, Roland

  Faulds, Andrew

  Bray, Dr Jeremy

  Field, Frank (Birkenhead)

  Brown, Gordon (D'f'mline E)

  Fields, T. (L'pool Broad Gn)

  Brown, N. (N'c'tle-u-Tyne E)

  Flannery, Martin

  Brown, R. (N'c'tle-u-Tyne N)

  Foot, Rt Hon Michael

  Brown, Ron (E'burgh, Leith)

  Forrester, John

  Bruce, Malcolm

  Foster, Derek

  Buchan, Norman

  Foulkes, George

  Caborn, Richard

  Fraser, J. (Norwood)

  Callaghan, Rt Hon J.

  Freeson, Rt Hon Reginald

  Callaghan, Jim (Heyw'd & M)

  Freud, Clement

  Campbell-Savours, Dale

  Garrett, W. E.

  Canavan, Dennis

  George, Bruce

  Carlile, Alexander (Montg'y)

  Gilbert, Rt Hon Dr John

  Cartwright, John

  Godman, Dr Norman

  Clark, Dr David (S Shields)

  Golding, John

  Clarke, Thomas

  Gould, Bryan

  Clay, Robert

  Gourlay, Harry

  Clelland, David Gordon

  Hamilton, James (M'well N)

  Clwyd, Mrs Ann

  Hamilton, W. W. (Fife Central)

  Cocks, Rt Hon M. (Bristol S.)

  Hancock, Mr. Michael

  Cohen, Harry

  Hardy, Peter

  Coleman, Donald

  Harman, Ms Harriet

  Concannon, Rt Hon J. D.

  Harrison, Rt Hon Walter

  Conlan, Bernard

  Hart, Rt Hon Dame Judith

  Cook, Frank (Stockton North)

  Hattersley, Rt Hon Roy

  Cook, Robin F. (Livingston)

  Haynes, Frank

  Corbett, Robin

  Healey, Rt Hon Denis

  Cox, Thomas (Tooting)

  Heffer, Eric S.

  Craigen, J. M.

  Hogg, N. (C'nauld & Kilsyth)

  Crowther, Stan

  Holland, Stuart (Vauxhall)

  1173

  Home Robertson, John

  Martin, Michael

  Howell, Rt Hon D. (S'heath)

  Mason, Rt Hon Roy

  Hoyle, Douglas

  Maxton, John

  Hughes, Robert (Aberdeen N)

  Maynard, Miss Joan

  Hughes, Roy (Newport East)

  Meacher, Michael

  Hughes, Sean (Knowsley S)

  Meadowcroft, Michael

  Hughes, Simon (Southwark)

  Michie, William

  Janner, Hon Greville

  Mikardo, Ian

  Jenkins, Rt Hon Roy (Hillh'd)

  Millan, Rt Hon Bruce

  John, Brynmor

  Miller, Dr M. S. (E Kilbride)

  Johnston, Sir Russell

  Mitchell, Austin (G't Grimsby)

  Jones, Barry (Alyn & Deeside)

  Morris, Rt Hon A. (W'shawe)

  Kaufman, Rt Hon Gerald

  Morris, Rt Hon J. (Aberavon)

  Kennedy, Charles

  Nellist, David

  Kilroy-Silk, Robert

  Oakes, Rt Hon Gordon

  Kinnock, Rt Hon Neil

  O'Brien, William

  Kirkwood, Archy

  O'Neill, Martin

  Lambie, David

  Orme, Rt Hon Stanley

  Lamond, James

  Park, George

  Leadbitter, Ted

  Parry, Robert

  Leighton, Ronald

  Patchett, Terry

  Lewis, Ron (Carlisle)

  Pendry, Tom

  Lewis, Terence (Worsley)

  Penhaligon, David

  Litherland, Robert

  Pike, Peter

  Livsey, Richard

  Powell, Raymond (Ogmore)

  Lloyd, Tony (Stretford)

  Prescott, John

  Lofthouse, Geoffrey

  Radice, Giles

  Loyden, Edward

  Randall, Stuart

  McCartney, Hugh

  Redmond, M.

  McDonald, Dr Oonagh

  Rees, Rt Hon M. (Leeds S)

  McGuire, Michael

  Richardson, Ms Jo

  McKay, Allen (Penistone)

  Roberts, Allan (Bootle)

  MacKenzie, Rt Hon Gregor

  Roberts, Ernest (Hackney N)

  Maclennan, Robert

  Robertson, George

  McNamara, Kevin

  Robinson, G. (Coventry NW)

  McTaggart, Robert

  Rogers, Allan

  McWilliam, John

  Rooker, J. W.

  Madden, Max

  Ross, Stephen (Isle of Wight)

  Marek, Dr John

  Rowlands, Ted

  Marshall, David (Shettleston)

  Ryman, John

  1174

  Sedgemore, Brian

  Thorne, Stan (Preston)

  Sheerman, Barry

  Torney, Tom

  Sheldon, Rt Hon R.

  Wallace, James

  Shore, Rt Hon Peter

  Wardell, Gareth (Gower)

  Short, Ms Clare (Ladywood)

  Wareing, Robert

  Silkin, Rt Hon J.

  Weetch, Ken

  Skinner, Dennis

  Welsh, Michael

  Smith, C. (Isl'ton S & F'bury)

  White, James

  Smith, Rt Hon J. (M'ds e)

  Wigley, Dafydd

  Snape, Peter

  Williams, Rt Hon A.

  Soley, Clive

  Wilson, Gordon

  Spearing, Nigel

  Winnick, David

  Steel, Rt Hon David

  Woodall, Alec

  Stewart, Rt Hon D. (W Isles)

  Wrigglesworth, Ian

  Stott, Roger

  Young, David (Bolton SE)

  Strang, Gavin

  Straw, Jack

  Tellers for the Noes:

  Thomas, Dafydd (Merioneth)

  Mr. Mark Fisher and

  Thomas, Dr R. (Carmarthen)

  Mr. Ron Davies.

  Thompson, J. (Wansbeck)

  Question accordingly agreed to.
  Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House endorses the Government's consistent objective of supporting Westland plc in its efforts to achieve a financial reconstruction, of supporting United Kingdom participation in collaboration with North Atlantic Treaty Organisation allies and of safeguarding the interests of the company, its employees and its shareholders, recognises the efforts of the Government to ensure that the Westland Board had more than one option to secure that objective; affirms that it will be for the company to determine its future course of action; and further recognises the competence of departmental Select Committees of the House of Commons to consider the issues raised by these developments.

Statutory Sick Pay
10.28 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): I beg to move,
That the draft Statutory Sick Pay Up-rating Order 1985, which was laid before this House on 17th December, be approved.
The purpose of the order is to increase the rates of statutory sick pay and the bands of earnings which determine the rate payable. My right hon. Friend the Secretary of State has carried out his annual review of those amounts as he is required to do by the Social Security and Housing Benefits Acts 1982. The uprating of the bands, and consequently the rates, is reviewed in relation to changes in the general level of prices which, in the 12 months to October 1985, rose by 5–4 per cent. as measured by the index of retail prices. The draft order accordingly provides for an equivalent increase in the SSP rates and earnings levels to apply from 6 April 1986.
As hon. Members will know, there are three rates of SSP. As usual, in working out the new rates we have followed established practice and rounded them to the nearest 5p. The new upper and middle thresholds have been rounded down to the next 50p. Rounding down in that fashion is beneficial to employees as it enables more to qualify for the higher and middle rates of SSP than would otherwise be the case. The lower earnings threshold—below which no SSP is payable—is not subject to uprating by the order. That is set automatically by the Act at the lower earnings limit for class 1 contributions, which will be £38 from 6 April 1986.
The result of these calculations is that from next April employees with average earnings of £74·50 or more per week will qualify for SSP at the new standard weekly rate of £46·75. Those who earn between £55·50 and £74·49 will be entitled to the new middle rate of £39·20. And those who earn between £38 and £55·49 will receive the new lower rate of £31·60. These new rates represent increases of £2·40, £2 and £1·60 per week respectively.
The draft order makes the usual transitional provision for those employees who have current entitlement to SSP at the time the uprating takes effect. Whichever level of SSP an employee is receiving at the time the uprating takes place, whether standard, middle or lower, he will, from 6 April receive the new amount of SSP relevant to that level for as long as his period of entitlement lasts. This is so even if his average earnings—which are, of course, calculated at the start of his sickness—would put him in a different earnings band. Without this beneficial provision some employees could face a significant reduction in the SSP payable to them at the uprating date and I am sure hon. Members will welcome the fact that this will not occur. [HON. MEMBERS: "Hear, hear."] I acknowledge support from whatever quarter it comes.
April 1986, will, of course, see other changes in SSP that lie outside the main provisions of the order. The House will recall that under legislation passed in the Social Security Act 1985, an employer's maximum liability for paying his employees SSP when sick will increase from eight weeks to 28 weeks. Full reimbursement of the costs of this extended period will continue to be available with employers deducting their costs from their national
1176
insurance liability. Some other changes in the present rules and procedures will also take place consequent on the increased maximum duration. These were developed following consultation and discussion with employers and others earlier last year. I am pleased to say that a completely revised employer's guide to statutory sick pay, incorporating these changes, was issued to all employers last October to enable them to make the necessary preparation for these changes. The new rates covered in the order before us will thus be the first ones to apply to the extended scheme.
It remains the Government's intention to review SSP rates and earnings bands annually, with increases taking effect from the following April. By 1987 social security benefits will also have moved to an April uprating date, We intend, therefore, that in future the Secretary of State will review SSP rates at the same time as other social security benefit rates.
Details of the new SSP rates and earnings bands will be notified to employers shortly in a leaflet issued with the new national insurance contribution rate tables, which will also come into operation in April. The new SSP rates will also be publicised in leaflets available generally from the Department of Health and Social Security.
Finally, I should perhaps remind the House that the rates of SSP are statutory minima. Many employees—in fact, the great majority—receive occupational sick pay from their employers and a number continue to get full pay when sick. We have no evidence to suggest that the current rates of SSP have resulted in hardship or difficulties for employees. Indeed there are clear indications that most employees prefer SSP to the sickness benefit it replaces because it is so much simpler for them to receive their money when sick from the same source as when working. Neither is there evidence to suggest that the rates have affected employers' and employees' flexibility for negotiating levels of occupational sick pay.
The draft order provides for the SSP rates to keep pace with the rise in the general level of prices. I commend it to the House.
10.33 pm
Mr. Michael Meacher: First let me make it clear that the uprating principle underlying the order is not in contention, but I wish briefly to use the debate to highlight two main issues where the Opposition remain distinctly critical. One is the experience of statutory sick pay as it has developed, especially in the light of its extension to 28 weeks from 6 April next, and the other is the proposed privatisation of other benefits where the example of statutory sick pay is being used as a model.
Our main objection is that the extension of statutory sick pay represents not only the abolition of state sickness benefit but the prolongation over a much longer period of all the disadvantages clearly manifest in this act of privatisation.
First, unlike sickness benefit—and we take a view of it different from the over-generous picture for employees given by the Minister—statutory sick pay is taxable and subject to deductions for national insurance contributions. Therefore, for many employees, especially those on low earnings, SSP means less money when they are unable to work because of sickness or disability. Indeed, for those on very low incomes, about £50 a week, the loss can be as hefty as £14 or £15 a week.

1177
Nor is it any defence to say, as Ministers do—although the Minister did not do so tonight—that the low level of SSP is compensated for by supplementary benefit. Recent figures show that one third of sick or disabled people do not claim the supplementary benefit to which they are entitled. Perhaps that is the best indication of the inadequacy of SSP. Means-tested supplementary benefit should never be regarded as a satisfactory substitute for an adequate benefit as of right when people cannot work.
Ministers also like to evade the unsatisfactory nature of SSP by referring—as the Minister did tonight—to the number of occupational sick pay schemes. Of course, a few do exist, but many employees are not covered by them because they are generally run on a discretionary basis. In particular, part-time workers and others in low-paid jobs are frequently excluded.
A sign of the amount of loss of benefit from the extension of SSP is provided by the Government's estimate of the so-called savings that will accrue in the next financial year—of the order of £200 million. Those savings are being made purely at the expense of the sick and disabled who are already having to cope with the extra costs of disability. It is surely wrong and unfair that employees will be paying out more in tax and national insurance contributions because of the extension of SSP, while employers will not be expected to pay any national insurance contribution for SSP payments.
Another matter for concern is that—
The Minister for Social Security (Mr. Tony Newton): The hon. Gentleman plainly has not understood the financial basis of SSP. The saving of £200 million is a saving to public expenditure, but it is almost precisely counterbalanced by the revenue forgone from the national insurance fund in compensation for the payments by employers to employees. The notion that either the original introduction of SSP or its extension entail losses to beneficiaries of the sort suggested by the hon. Gentleman is, quite simply, wrong.
Mr. Meacher: The figures are not so very different from what I have suggested. The Minister is right to say that there is an offset, and I wholly accept that. But there are substantial disadvantages to employees. The figure that I am quoting is the public expenditure figure that appears in the Government's public expenditure papers.
Does the Minister deny that, if employees are to pay substantially more in tax and national insurance contributions, there will be a significant disadvantage for them? Does he deny that as a result of the scheme, many on the lowest levels of income—about £40, £50 or £60 a week—are suffering substantial losses that can be as much as £14 or £15 a week?
Another matter for concern is that the rate of unemployment is already higher among the disabled than among the work force as a whole. An extension of SSP, with the additional administrative burden on employers, is all too likely to lead to discrimination against workers with poor health records.
Indeed, there are other disadvantages to SSP. It has involved a much harsher linking than that applying to sickness benefit, although that is now to be changed.
Moreover, because it is administered by employers—that is not to be changed—and not by the DHSS, there are no powers, short of taking the employer to court, to
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enforce payment of statutory sick pay by employers. If an adjudication officer, social security appeal tribunal or a social security commissioner issues a formal decision that a person is entitled to statutory sick pay, the DHSS cannot force a recalcitrant employer to pay the correct amount to the employee. Employees in unorganised workplaces, particularly part-time workers or those in low-paid jobs, are vulnerable to harassment by employers in relation to absence through sickness, given the leeway that the DHSS has now given to employers.
There is no protection for employees who are dismissed by their employers so that the latter can avoid paying them statutory sick pay. Extending statutory sick pay in April will increase the employee's exposure to unscrupulous manoeuvres by some employers.
For those reasons, we contend that statutory sick pay, which was introduced almost without warning and with perfunctory consultation, has worked to the detriment of employees in a variety of ways.
There are good grounds for the fear that the introduction of statutory sick pay will be used as a wedge in the door of further moves to hive off state responsibility for social security benefits. Evidence of further intended privatisation by the Government emerged on 19 December when the DHSS issued a consultation paper on statutory maternity allowance. That proposed that responsibility for paying maternity allowance—
Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman is straying wide of the order. I have given him a lot of rope, but he must not discuss maternity pay.
Mr. Meacher: I am not seeking to introduce a debate on maternity allowance, but I am making the valid point that the introduction of statutory sick pay is being used as a model for further extending the privatisation of social security benefits. I wish to make one or two other brief comments related to that, but I do not seek to discuss that argument in depth because it is to be discussed in another place.
Mr. Deputy Speaker: That can be left to another place because the order is about uprating statutory sick pay, not the principle, which the House has already decided.
Mr. Meacher: I accept that, but it is important that this is being used as a model for further privatisation. It suggests that statutory maternity allowance should be paid at the lowest rate of statutory sick pay—£31·60 a week in April 1986 terms—regardless of earnings. Statutory maternity allowance and statutory sick pay should not in general link to the same period of interruption in work. A further act of privatisation is now to be carried out on the model of statutory sick pay, despite all its drawbacks, but in this case it will be on even meaner terms with only one level of benefit instead of three, and that will be the lowest statutory sick pay level.
We do not dispute the uprating basis in the order, but we want to place firmly on record our strong condemnation, not only of the principle of the privatisation of social security benefits, but of the manifest disadvantages for the employee that this has been shown to involve. We oppose the extension of the principle, with its disadvantages to other benefits such as statutory maternity allowance.

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If the Government do not take note of our objections, I give notice that when we come to power we shall deal with them rapidly.
10.44 pm
Mr. Charles Kennedy: The speech of the hon. Member for Oldham, West (Mr. Meacher) was reasonably credible, and I agreed with much of what he said until his closing sentiments—perhaps that does not surprise him. It will certainly not surprise those sitting on the Treasury Bench. A return of the Labour party to power would greatly surprise the British people.
My hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and I welcome the fact that, on this occasion, the DHSS is staying within and upholding the law of the land, and will uprate accordingly. We have no argument with that. It was sensible of the DHSS to bring the uprating procedure into line as from 1987. My noble Friend Lord Banks and others have argued for that, and we welcome it.
My basic point on the uprating order relates to the impact that statutory sick pay has on small businesses. The Minister will recall that my hon. Friend and I have moved amendments and made speeches, in Committee and in the House, on the effect of the statutory sick pay scheme in this respect. That is why we welcome the reference in the explanatory details that accompanied the order to the DHSS consultation paper on the reduction of burdens on business. It would be helpful if the Minister would say briefly how matters are progressing in that respect—by which I mean the suggestion that employers should be allowed to opt out of SSP, provided that they pay wages to their sick employees at least as good as their SSP entitlement.
The Government will recall that the announcement of an extension of the SSP scheme was met with horror by, among others, the National Federation of Self Employed and Small Businesses. I agree with the hon. Member for Oldham, West that the bureaucracy of the SSP scheme and the extension which has been announced would discriminate against the employment potential of small businesses, and encourage more part-time employment rather than full-time employment. The Government said during SSP debates that they were conscious of the difficulty, and made some concessions in terms of bridging the gap.
You have been tolerant of my similarly lateral interpretation of the order, Mr. Deputy Speaker. May I end by saying that we welcome the fact that the uprating will go ahead, and especially the fact that the SSP uprating will be brought into line with other benefits. Any comments which the Minister can make on these broader points, based on the principle that we are debating this evening, would be helpful to my hon. Friend and myself.
10.48 pm
Mr. Major: This has been a modest debate—[Interruption.] I make no complaint about that. As is often the case on such occasions, the debate has ranged rather more widely than the strict terms of the order. The hon. Member for Oldham, West (Mr. Meacher) went substantially more widely, and the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) greatly tested your
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traditional good nature and patience, Mr. Deputy Speaker. Being a more timorous soul, I have no intention of tempting your good nature to that extent.
I am grateful to the hon. Member for Oldham, West for welcoming the principle of the uprating, although I was a little alarmed that he seemed to see plots and difficulties where none exists.
The hon. Gentleman also spoke a little scornfully of what he described as the privatisation of social security benefits. That seems an odd way to put it. The introduction and subsequent extension of the SSP principle leads to a closer and better relationship between employers and employees. I believe that the ability to make SSP payments in the way that now obtains makes for a sound basis for relationships between employers and employees. It has generally been welcomed, it has proved fairly successful and I am sorry that the hon. Gentleman made that rather ideological point.
The hon. Gentleman also touched in passing on occupational sick pay schemes. The two issues are not unrelated. A very substantial number of employees now benefit from such schemes. Precise up-to-date figures are not available, but the latest firm information is that about 80 per cent. of employees are covered. That figure is based on a survey in 1977 and, although I cannot state this as a firm fact, there is every reason to believe that the number of employees so covered has continued to grow since then. In my view, that makes out the case for the rationalisation of SSP in the way in which it has been introduced in recent years. I hope that in due course the hon. Member for Oldham, West will entirely welcome the changes that have been made.
The hon. Gentleman referred also to the forthcoming extension of SSP liability from eight to 28 weeks. In terms of the number of weeks that is a considerable extension, but on further examination it proves not to be so great a change as it might appear at first glance. Under the existing eight week scheme employers already deal with the bulk of short sickness spells. Only about 10 per cent. of sickness spells last longer than eight weeks and of those about half last no longer than 13 weeks. We estimate, therefore, that under the current eight-week scheme employers deal with about 5 million spells of sickness per year. The extension will mean that 700,000 of those cases will not be transferred to state sickness benefit but will continue to be paid SSP by employers until the sickness ends or there is a transfer to invalidity benefit at the commencement of the 29th week.
We all know that my hon. Friend the Minister for Social Security is one of the most tolerant Members to represent any party in the House in recent years, but even his traditional tolerance started to snap—I felt him quiver at my side like a greyhound ready to leave the trap—when the hon. Member for Oldham, West referred to the saving of £200 million on the extension of SSP as a loss to sick employees. My hon. Friend intervened to make it quite clear that that is not so. The £200 million saving in public expenditure certainly represents sickness benefit that is not paid out, but it is replaced by £285 million paid out in statutory sick pay and recovered by the employer from the national insurance fund through deductions from the national insurance contributions that would otherwise be paid into the fund. Therefore, although I understand the hon. Gentleman's point, I think that it had no substance and that in view of the clear comments of my hon. Friend the Minister I need not labour the matter any further.
Mr. Meacher: Perhaps I may press the matter a little further. It is true that contribution income to the national insurance fund will be reduced by £285 million in a full year as a result of the Government's decision to relieve employers of paying national insurance contributions on employees' SSP, but that is offset to some extent by increases in revenue from tax and national insurance contributions from employees on their statutory sick pay. There is a reversal in the burden of payment which is very much in favour of employers and against employees. The Minister must take that firmly on board.
Mr. Major: I understand the hon. Gentleman's point. He should bear in mind, in the context of the state's capacity to pay, the fact that this change has meant a substantial saving as so few sickness benefit claims are now made through the normal social security system. I do not have the figures here, but that substantial administrative cost saving has meant funds are available for other uses in the social security system. We must consider the broad principle. The scheme has been successful and, with the exception of some of the unharmonious comments of the hon. Member for Oldham, West, it has been broadly welcomed.
Mr. Meacher: The Minister tries to make something out of the savings on administrative costs. He says that he does not have the figures, but I understood the savings to be only £3 million to £4 million. It in no way derogates from my main point.
Mr. Major: I did not find the hon. Gentleman's main point very attractive. Nor do I think that it weighs heavily in the scales against the convenience, principally to the employee, of receiving statutory sick pay in lieu of state sickness benefit from the same source as he receives his salary. It is an administrative convenience of some significance to him, too. I know that the hon. Gentleman is anxious about the beneficiaries of any type of social security benefit. I should have thought that he would regard this as a significant advance. That is our view and I believe that it would be shared by most beneficiaries.
In the midst of his other comments, the hon. Member gave the impression that the extension of statutory sick pay would lead to discrimination against the chronically sick and disabled. I hope that he does not believe that. We have no evidence to that effect. There is no reason to suppose that the scheme will have that effect. In general, disabled people do not have bad attendance records. Indeed, they tend to be very good. Successive Governments have tried to increase awareness that a disabled employee is a good employee whose attendance record, on the evidence available to us, is likely to be better than average.
Some employers might try to avoid employing people likely to have poor attendance records, but I do not believe that statutory sick pay has aggravated that. Employers are more likely to be worried about problems with production
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and with the employment of temporary staff which frequent absences of their regular employees can result in. As employers are fully compensated for the statutory sick pay that they pay out and, as the hon. Gentleman said, the cost of making that payment, there is no realistic reason for fearing that the extension of the scheme will mean additional discrimination against the chronically sick and disabled. That is the thrust of much that we have tried to do and will do in the Bill that will shortly be presented to the House to ensure that the sick and disabled are treated as well as possible. That is an important priority.
The hon. Gentleman considered other matters beyond the scope of the order. I hope that he will understand that, in your presence, Mr. Deputy Speaker, I have no intention of pursuing them. The hon. Member for Ross, Cromarty and Skye made several interesting points. I am grateful to him for welcoming the alignment of uprating and the support that he offered. It is a logical extension and, in the absence of the hon. Member for Oldham. West mentioning it, we can conclude that we have his support on that count.
The hon. Member for Ross, Cromarty and Skye asked about the "Burden on Business" consultation document issued by my hon. Friend the Parliamentary Under-Secretary of State for Health and Social Security. The consultation period has ended. We are considering the responses. I hope that we shall soon be in a position to reach conclusions on that matter. It was a useful exercise to have the consultation. We have had a number of worthwhile responses.
The hon. Member for Oldham, West welcomed the general principle. Despite some of his comments, the statutory sick pay scheme has been running smoothly and successfully. I should like to take the opportunity to congratulate employers on the way in which they have taken the scheme on board. When it was mooted I think they had reason to be concerned, and many of them expressed concern. Their experience in running the scheme has shown that their concerns were largely unrealised. I am confident that they will equally take in their stride the extension of the period from eight to 28 weeks, not least because it will not lead to anything like a proportionate increase in payments, as might be supposed.
The order proposes an increase in the rates of statutory sick pay so as to keep them in line with the general rise in prices since the rates were last reviewed. Despite some equivocation, I detect no opposition to the order. I hope that the House will feel inclined to approve it without dissent.
Question put and agreed to.
Resolved,
That the draft Statutory Sick Pay Up-rating Order 1985, which was laid before this House on 17th December, be approved.

Southend Hospital (Radiotherapy Unit)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]
11.1 pm
Dr. Michael Clark: I wish to discuss an issue of great importance to south-east Essex. I start by expressing appreciation to the local press, which has shown a great interest in the matter, and to the senior surgeon of Southend hospital, who has done the same.
Southend health authority includes Rochford in my constituency and is under North-East Thames regional health authority, as is Oldchurch, the hospital that my hon. Friend the Member for Hornchurch (Mr. Squire) talked about on Monday evening. So far during 1986 two thirds of the Adjournment debates have been on this one subject. It is significant that North-East Thames regional health authority has come under so much criticism.
At the beginning of my speech I should like to thank my hon. Friend the Member for Southend, East (Mr. Taylor) for his support this evening. I know I speak for him in many of the things I have to say. Southend health authority is gravely underfunded to the tune of about £6 million a year. Yet it is in a region that is overfunded. That is causing much concern in Southend. How can we manage when we are £6 million short per annum?
To give a little background to the North-East Thames regional health authority, it has five medical schools, more than any other region. Because of boundary changes in 1974 and 1982, the Middlesex hospital, University College hospital and the Royal Free came into that health region. As a result, we have nine radiotherapy units and we have had many staffing problems with senior registrars. It is the London end of the region, not the Essex end and not Southend in particular, that needs sorting out. It is totally wrong that, through an accident of history and boundary changes, Essex should suffer and London should not be sorted out. Essex comprises half the population of the North-East Thames health authority and south-east Essex comprises half the population of Essex.
I referred earlier to the underfunding at Southend. That is due to the region's inability to tackle the problems in London. It is now ironic in the extreme that the region, in trying to rationalise, rather than closing hospitals in London, is proposing to remove the radiotherapy unit from Southend. I know that my right hon. Friend the Member for Southend, West (Mr. Channon), the Minister for Trade, will agree with my comments. I am delighted that he is present this evening. I realise fully that his ministerial office precludes him from speaking on the issue this evening. However, I believe that I shall be saying many of the things that he would wish to say.
With nine centres for radiotherapy treatment, six of them lie in a four-mile radius on the western edge of the region. The two that lie to the east are Southend and Colchester. It is clear that these locations are not ideal, but the North-East Thames regional health authority proposes to keep four out of six of the London radiotherapy centres and to close both the Essex centres. It is proposed to open a new one at Broomfield near Chelmsford. Perhaps we need to have a radiotherapy centre in the middle of Essex, and perhaps at Broomfield, but not at the expense of Southend.
The four units that will be left in London provide treatment for patients in the North-East Thames region and
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for patients in the three other Thames regions that join with it. I understand that 75 per cent. of the Middlesex hospital's patients come from outside the region. Perhaps it would be fair to conclude that the underfunding that the Southend health authority has to endure is caused to a large extent by the fact that on the western edge of the region we are treating patients from other regions and not receiving any recompense for so doing.
What is the solution to the problem? I believe that it is to have a full cancer treatment unit at Southend. However, it appears from the report that the Southend option has not been evaluated fully, despite the fact that the team points out that the least expensive option would be to maintain and improve a centre outside London.
The centres that it is recommended should remain open are the ones which involve patients having to travel a long way to receive their treatment. Patients have to travel 61 minutes on average to receive treatment at the Middlesex hospital. The average travelling times for patients receiving treatment at the London hospital, St. Bartholomew's and the Royal Free are 55 minutes, 47 minutes and 37 minutes respectively. Yet the North Middlesex hospital, where the patients in the catchment area have to travel only 33 minutes, will be closed. At the Southend hospital, with patient travelling time of only 35 minutes, the radiotherapy centre is also proposed for closure.
It is proposed in the report that the patients from Southend should be transferred to Broomfield or to London. It is acknowledged that such transfers will involve long journeys because it is proposed in the report that hostels should be provided for those who have to travel these long distances.
It is also mentioned in the report that if the centre were at Southend it would be difficult for half the people in the catchment area to reach the hospital. The converse is that half of those in the catchment area find it very convenient to travel to the Southend hospital. The proposals will merely reverse the two halves of the catchment area.
The report has been described by the medical consultants at the Southend hospital as a waste of £80,000 of public money. It is riddled with errors. There are pages of errata and I can still find some factual and numerical errors that are not listed. It is said that the exercise is not a cost-saving one. If it is not, goodness only knows what its advantages are.
When the team set about reviewing therapy treatment in the North-East Thames region, no consultant surgeons were on the review team, nor a consultant haematologist, despite the fact that both groups of medical experts provide a considerable proportion of the cancer treatment in Southend and elsewhere. It is not surprising that the report was rejected unanimously by the medical staff at Southend hospital.
There has been no consideration given, as it appears in the report, to cancer treatment overall in London. As I have said, in London four regional health authorities come together. It would surely be sensible to consider the London provision in total rather than a quarter at a time. Yet we learn that the same team from Coopers and Lybrand will be undertaking another survey for North-West Thames, again in grand isolation. One performance index that is used in the report is the number of radiotherapy courses that each hospital provides, and conclusions are drawn from that. However, no account is taken of the fact that each hospital has a different number

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of linear accelerators. If we consider the number of courses per linear accelerator, we find that Colchester, which is to be closed, is top of the list. Southend is third or fourth. St. Bartholomew's and Middlesex, which are to be kept open, are at the very bottom. St. Bartholomew's has a usage of its linear accelerator of only 37 per cent. of the usage of all the other hospitals, when averaged out. It is clearly the wrong decision to keep these four London units open and to close Southend.
It is also assumed that we can have a regional cancer unit only where there is a CT scanner and so Broomfield is chosen, but that CT scanner is fully loaded and a new one will be needed soon. By the time the transfer takes place in 1991, it is thought that the CT scanner will be obsolete and that nuclearmagnetic resonance scanners will be used instead. So why can Southend not make a bid for one of those and keep the unit at Southend?
The report also assumes that 97 per cent. of Southend's patients will go to Broomfield and that 3 per cent. will travel to London, and yet all the communications in Essex are east-west, or from mid-Essex are radial into London. It is not practical to have communications between Chelmsford and Southend. For example, at present only 4·5 per cent. of patients from mid-Essex come into the Southend area for treatment.
The report ignores the fact that withdrawal of radiotherapy from Southend will have a detrimental effect on acute services at Southend hospital, indeed rendering some of them non-viable. Those of us who take an interest in Southend hospital are very worried that a loss of centres of excellence will mean that Southend hospital will no longer attract top consultants, not only in radiotherapy but in other medical specialties too.
There are no plans in this report to have gynaecology or ear, nose and throat units at Broomfield, but the report does say that the impetus which the regional cancer unit will provide should lead to fresh evaluation of these plans, meaning, presumably, that gynaecology and ear, nose and throat units will be provided at Broomfield in due course, again, perhaps, at the expense of Southend.
The report also says that the unit to be established at Broomfield will be of such a size that it will be twice as big as the units established in London. The Broomfield unit will, in fact, be as large as St. Bartholomew's and the Royal Free put together—far too large and impersonal.
So what conclusions do we reach? What should we do? I am certain that we should have a unit at Southend. We should obtain this by perhaps closing the radiotherapy unit at St. Bartholomew's or at the Middlesex hospital. By all means let us have a radiotherapy unit at Broomfield, but let it be the same size as the units that will exist in London: in other words, half the size proposed in the report. We can then retain the radiotherapy unit at Southend where we already have ear, nose and throat, gynaecology and haematology specialties.
Paragraph 33 of the report draws together criteria on which the location of the cancer treatment unit should be based. It says that there should be
"sufficient patient throughput";
"an adequate range of services including radiotherapy and medical oncology";
"modern machinery";
it should be on the site of a district general hospital; it should
"avoid excessive travel for patients";
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it should be on a site where clinical trials, teaching and training go on. Southend meets every one of these criteria. The report is not acceptable, and should not be accepted.
I would like to read a few extracts from a letter that I received only yesterday. I have received many letters on this subject, as have, I am sure, my hon. Friend the Member for Southend, East and my right hon. Friend the Member for Southend, West. Many have come from old people; many have come from those who have assisted others to travel for radiotherapy treatment but this letter is from a young mother of 31. I shall quote extracts from the letter of this cancer sufferer who attends Southend general hospital. She says:
"I am 31 years old and have two children … The proposed move of the Southend Radiotherapy Department to Broomfield has just added to the stress and anxiety that I and fellow patients have had to endure. I live five miles from the hospital and am fortunate to be able to drive myself to and from daily treatment. The total travel time is approximately thirty minutes which is endurable. I could never have coped with the ninety minute journey to Broomfield each day. I also have to arrange for my children to be cared for in my absence. I can only manage this with the kindness and goodwill of friends, as I have no relations living nearby."
She implies that, if she were away from home longer, she might not be able to find people to look after her children.
She says:
"I have received excellent service at Southend General from a very caring team of professionals … To have to stay in a hostel, as is proposed for Broomfield, away from those I needed most, would have considerably increased the anguish and distress I suffered … The travelling time for already very ill and distressed patients would be increased, bringing misery and hardship. I feel that the level of patient care would fall dramatically due to the size of the new unit. This will surely outweigh any financial benefits that a centralised unit would offset … I have not read one press report or spoken to any individual to date who is in favour of the scheme of moving cancer treatment miles away from the most heavily populated area of Essex."
Neither have I. I have not come across a constituent,
medical specialist, Member of Parliament, press reporter or anyone else who thinks that this is a good idea. I call upon my hon. Friend the Under-Secretary of State to reject the report, to think again, to leave the unit at Southend and to boost it.
11.16 pm
Mr. Teddy Taylor rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Member needs the, consent of the hon. Member for Rochford (Dr. Clark) and the Under-Secretary of State to intervene. If it is given, the hon. Member may proceed.
Mr. Taylor: I congratulate my hon. Friend the Member for Rochford (Dr. Clark) on raising this important issue. I assure the House that all hon. Members who are covered by the Southend health authority agree absolutely with everthing said by my hon. Friend.
I appreciate that this is a matter for the region. I am sure, however, that the region will bear very much in mind the views of my hon. Friend the Under-Secretary of State. I hope that he will confirm that the Government believe that health care is an exercise not just in accountancy but in the care of people. I hope also that my hon. Friend the Under-Secretary of State is aware of the profound resentment over many years about underfunding. That resentment will increase if this proposal is accepted.
I thank my hon. Friend the Under-Secretary of State for giving me a minute to say those words.
11.17 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): I am happy to have the opportunity to reply to the powerful points put by my hon. Friend the Member for Rochford (Dr. Clark) and the effective points graciously and briefly put by my hon. Friend the Member for Southend, East (Mr. Taylor). I am grateful to my right hon. Friend the Member for Southend, West (Mr. Channon) for being here tonight. I recognise the vows of silence and virtues that his position requires of him.
My hon. Friend the Member for Rochford pointed out that two thirds of the Adjournment debates so far this year have focused on the backwash of the review of cancer treatment services that has been commissioned by the north-east Thames region. Had I not been aware of that concern before, I certainly would be by now. I ask my right hon. and hon. Friends to pass on my assurance to their constituents that their concern is recognised and to pass on also my points about the situation, as I understand it, on the basis of a review called for by the region. I should like to correct a number of misconceptions.
It is important to understand why this review was put in hand. My hon. Friend the Member for Southend, East in his succinct remarks made reference to the financial issues. I hope it is accepted that the idea that the review was instigated simply to save money is not correct. The basis for the review was to look at the way in which the services, including radiotherapy, for people suffering from cancer are currently provided within the region's area, and to see whether those services could be improved. I take the point made by both my hon. Friends about the quality of service to their constituents being the point at issue. This is why the review was launched, and the review and then the region must achieve the best solution.
At this stage it is not for me to say whether the report has got it right. I am well aware that some people hold the view that the report has not got it right. I am bound to say I am not too impressed by the fact that my hon. Friend the Member for Rochford suggested that one or one or two press reporters said the review had got it wrong. I am not impressed by their opinion, but I am impressed by the worries expressed by my hon. Friends and their constituents and it is important for that to be taken into account.
Dr. Michael Clark: And the medical profession.
Mr. Whitney: I will certainly come to that: that must be taken into account. I have no doubt that our proceedings tonight and on Monday will be taken into account by the regional health authority. The need for a review of the service was clearly set out in the regional strategic plan published in July 1984. I hope my hon. Friends will agree that this approach as a principle must be right.
We are looking for a continually improving Health Service and that is why we continue, in real terms, to put more of the nation's resources into the Health Service. Since 1979, 20 per cent. more in real terms has been devoted to the Health Service, and the projection for the next financial year is that our increase will probably be 2 per cent. above the rate of inflation. Our commitment to devoting an increasing amount of resources to the Health Service is clear, but we must also look at the way those resources are used, or the service will stagnate. This often means that changes are required and, of course, changes
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are unsettling and sometimes difficult. I hope that none of us will feel that the Health Service has no right to debate such issues. That must be what a sensible service is about. This review was to look at exactly the sort of service that is needed.
The report argues the medical case for concentrating the specialised cancer services. I suggest to my hon. Friends that it is important to accept that concentration of specialised services, including radiotherapy, into specialised centres. The report believes that would improve the quality of care and the service to patients. That is the first issue to be debated: is the report right about that?
It may be that some of my hon. Friend's medical consultants and specialists in Southend did not agree with the conclusions. I would certainly not say they are wrong, but it is fair to recognise that the medical chairman of the review team, Professor Whitehouse, is a distinguished specialist in the field. He is the professor of medical oncology at Southampton university. His conclusion and the conclusion of his team was that there should be five specialised centres, compared with the existing nine radiotherapy units. Should there be five? I am not saying whether there should be or not, but if so, where should they be?
That leads us to yet another difficult issue. There are special cases which have the problems of accessibility to which my hon. Friend the Member for Rochford referred tonight and to which my hon. Friend the Member for Hornchurch (Mr. Squire) referred on Monday night. That matter will be taken into account when the regional health authority considers the results of its working party.
Many of the services needed by cancer patients can and should be provided in every district. The report is clear about that. My hon. Friend the Member for Rochford read a letter from his lady constituent. I do not know the details of her case, but to reassure her I ask him to tell her that this is not a matter of the elimination of a service.
We are talking about specialised services, and by definition, they cannot be everywhere. It is not a matter of resources. It makes no more medical than economic sense to provide the degree of specialisation about which we are talking. Services such as radiotherapy must be established to serve a relatively large population to attract sufficient patients to enable clinicians to sustain and develop their expertise. Too wide a dispersal of facilities and staff, and such expertise is not developed and the increasingly high standard of patient care for which we are looking is not achieved. That is one of the problems that must be tackled by the RHA. It is one with which the review team sought to deal, but clearly not to everyone's satisfaction.
I hope that my hon. Friends accept that a valid exercise was conducted. A balance must be struck between poorer access with greater travel problems and a better service. This is not merely a matter of finance.
It is not for me or my right hon. Friend to make a judgment on this case. My hon. Friends will recognise the process. The report was put out to public consultation in September 1985 and the period for comments finished at the end of the year. The health authority's working party has been established and the health authority will consider its findings in the spring.
If the RHA agrees to changes—those recommended or others arising from the full consultation and the debate, of which this is part—then in the usual way there will

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be local consultation on any changes to local services or closures. Again, in the usual way, if any of the proposals are opposed by any of the relevant community health councils then the matter will be referred, via the RHA, to my right hon. Friend the Secretary of State for a decision. In those circumstances, I am sure that my hon. Friends understand that it would not be appropriate for me to comment in detail on the proposals at this stage.
It must be right that regions can launch reviews and examine better ways of producing a higher standard of specialised patient care in any faculty.
My hon. Friends the Members for Rochford and for Southend, East referred specifically to Southend's financial position. In resource allocation working party terms, Southend is an underfunded district in an overfunded region. My hon. Friend the Member for Rochford referred to £6 million. I understand that that figure is the amount by which it is estimated that Southend is below its target. In other words, it is 17 per cent. below its target. The latest revision shows that Southend is about 5 per cent. below its target, or £2 million below it on an
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allocation of £40 million. Be that as it may, the region is firmly committed to the policy of securing a fairer distribution of resources between its districts. I understand that in the financial year 1985–86 the region has allocated extra funds—about £500,000—to Southend. I hope that that is accepted.
My hon. Friend the Member for Rochford referred to London needing to be sorted out. Perhaps it does need that. The movement of RAWP towards ensuring that there will be greater equality in terms of services and provision is recognised and accepted, but it has to be brought about at a measured and tolerable pace, otherwise the consequences, even within an expanding budget, given the increase in the number of doctors and nurses and the increase in pay levels, in real terms, that we are achieving—
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-nine minutes to Twelve o'clock.