Foreign Affairs and Defence

HC Deb 17 November 1994 vol 250 cc133-228

3.1 pm

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd)

The range of British interests in the world is so wide that the holder of my office has a rather hard choice on occasions such as this. He can either scamper hurriedly from subject to subject, country to country, and try to go around the world in 40 minutes, or he can select—and this year I shall select. So I shall not mention, for example, Kashmir, Cyprus, Gibraltar or the Falkland Islands.

Mr. Dennis Skinner (Bolsover)

Pergau.

Mr. Hurd

I might mention that towards the end.

All the subjects I mentioned take up much time in the Foreign Office. They are all important. If hon. Members raise those subjects, my right hon. and learned Friend the Secretary of State for Defence will do his best to cover them when he replies to the debate. I know that my right hon. and learned Friend will speak specifically about the peace process in the middle east; he has just returned from that region.

I start with a subject that is very much in the news today. The House will have heard the news from Dublin that the Taoiseach resigned this morning. I think that it is right to thank Mr. Reynolds for his work in the past three years, and my right hon. Friend the Prime Minister has written to him today. Under his leadership, the Irish Government have established support for the peace process throughout the political spectrum in Ireland.

We have no doubt that the peace process will continue. It does not depend on any one person, and it has the overwhelming support, not only of both sides of the House, but of the people of Great Britain and of Northern Ireland and those of the Irish Republic. Therefore, we shall press ahead. My right hon. and learned Friend the Secretary of State for Northern Ireland and my right hon. Friend the Prime Minister will press ahead and, as we have already announced, we shall begin exploratory talks with Sinn Fein and loyalist political representatives before the end of the year.

Bosnia takes up a great deal of the time and emotions of Ministers, the House and many people in many countries. It is reasonable to ask first: what is the British interest in Bosnia? It has three parts. Stability in Europe is essential for our security, so we want to do what we can to bring the war to an end and to prevent it from spreading. Secondly, we want to end suffering and save lives. Thirdly—I emphasise this to the House today—we must not allow the strains created by Bosnia to disrupt the transatlantic partnership. The danger is there for all to see and I shall work with all my energy to prevent such disruption.

The realities of Bosnia remain as they have been throughout, with one important exception. It remains true—as it has always been true—that the international community will not impose a solution by force. It follows that the fighting will stop when, and not before, the parties fighting are persuaded to stop. What has changed in recent months is the willingness of President Milosevic in Belgrade to accept the plan prepared by the international community and to put pressure on the Bosnian Serbs to do the same. That is an important change, as the House will recognise, and we must put that change to good effect. We must use the machinery at our disposal as effectively as we can. That means using aid, using the United Nations' force to mitigate the suffering and using the contact group of Russia, America, Britain, France and Germany to promote a solution.

It is still hard to be optimistic about that. The latest outbreaks of fighting have been destructive rather than decisive. The Bosnian Government have attacked, Bosnian Serbs have counter-attacked, and villages have changed hands and been destroyed. There are more blackened ruins and there is more hunger as the third winter of the war approaches. There are more corpses, but there is no outcome. No one has gained and no one will gain a decisive military victory.

That setback follows a period during which some signs of normal life returned to Bosnia. A year ago, every day 1,500 shells rained down on Sarajevo and every day civilians were killed by snipers. For most of this year, people in Sarajevo have known days on end when there have been no shells and no sniper casualties. Schools have reopened in many parts of Bosnia and more than 90 per cent. of aid convoys now get through—before the ceasefire barely half did so. All that is at risk and now lies in an uneasy balance between peace and war.

Our aid workers and troops remain hard at work. Our aid workers have used the lull in fighting to restore gas supplies, reconnect 71,000 people to mains water and electricity, and restart medical services. Our troops have rebuilt bridges, reopened roads and defused dozens of small local crises that never reach the newspapers. The aid workers and the soldiers of UNPROFOR perform deeds of quiet heroism every day. They cannot impose peace, but where a fragile peace exists they can soften the suffering. That is why I say that General Rose and all his troops deserve our strongest support. We share his concern about the recent upsurge in fighting. Our troops can stay there doing their job of building peace and saving lives only if they can do so without unacceptable risk—that is a crucial "if" as we have all made clear, repeatedly, to those involved.

UNPROFOR and our aid workers work to keep people alive and to maintain a fragile peace on the ground. In the contact group we have to work to keep the prospect of peace alive. Only the Bosnian Serbs now block that way to peace as they constitute the only party involved to have rejected our plan. We cannot simply turn off the engines and wait. We have to find additional routes to a settlement, new ways and a wider solution. Tomorrow I shall be discussing with the Russian and French Foreign Ministers how to keep pressing forward. Soon after that I shall talk to the American Secretary of State and the German Foreign Minister. I am sure that only a united effort by the contact group will succeed.

Meanwhile, we must continue the arms embargo in the Adriatic. There has been much publicity about that operation, which must now adjust to the change in the American role announced last week. But it should remain effective. My right hon. and learned Friend the Minister of State and I listened in Holland on Monday to a careful analysis of this by the new Secretary General of NATO. Having heard that, I am confident that the NATO action can remain effective. We must not inflate what is certainly a difficulty into a disaster for NATO, and we should avoid giving the problem a political weight that it does not deserve.

Mr. Mike Gapes (Ilford, South)

Has the Foreign Secretary seen reports in today's The European to the effect that United States military and intelligence personnel are giving assistance to the Bosnian Muslim side in the conflict, at the same time as the Americans are withdrawing intelligence co-operation from Britain and France in the enforcement of the arms embargo in the Adriatic? Will the right hon. Gentleman take this opportunity to condemn that intervention and to make it clear to the American Government that we do not take kindly to the fact that they are making the task of our troops in Bosnia much more dangerous?

Mr. Hurd

The hon. Gentleman is inadvertently doing precisely what I was warning against. He is taking the fact that two American ships in the Adriatic have had their orders changed and is pushing it forward, quoting reports to which I do not give credence and raising the whole question of future American reliability. That is not justified by what has occurred. If at any time we feel that the risks to our troops become unacceptable, they must be withdrawn; but we do not believe that that is the effect of the change in the instructions to the American ships.

Mr. Patrick Cormack (Staffordshire, South)

Will my right hon. Friend repudiate what the hon. Gentleman has just said? He talked about the Bosnian Muslim side. Will my right hon. Friend make it quite plain that we are talking about the legitimately recognised Government of Bosnia, which is not purely Muslim, and that there would be no fighting now had the Serbs accepted, as the Bosnian Government reluctantly did, the contact group proposals?

Mr. Hurd

That is right on both points, but I want to return to the general point that I am trying to make, which is fundamental.

It is the firm belief of the Government—and, I think, of the Opposition—that the Atlantic alliance remains the foundation of our defence and that the presence of the United States in Europe must not be discounted or thrown away. I say that because some commentators, here and even more elsewhere—in Paris, for example—have rushed to rash judgments on this point in the past few days. I do not believe that we should revise those fundamental judgments, which lie at the heart of our foreign policy, because two American ships have altered their duties in the Adriatic. In an age of uncertainty there are still some welcome certainties. One of those is the strength of the NATO alliance, and we must keep it that way.

Some reference has been made to intelligence and to the role of American officers in headquarters jobs at NATO—for instance, the admiral in charge of this operation. It has been made entirely clear that Admiral Smith will continue to conduct the NATO operation in exactly the same way as before.

In this context I should like to commend to the House the interesting speech and proposals made by my right hon. and learned Friend the Secretary of State for Defence the night before last, when he spoke to the Pilgrims about forging an Atlantic community.

There is no contradiction between our commitment to the Atlantic alliance and the new relationship that we are building with Russia. Russia has joined NATO in one of the most important Partnership for Peace projects. In parallel, the partnership and co-operation agreement between Russia and the European Union was signed last June. We consult, in the same spirit, with Russia at the Security Council, the contact group and the G7 summit, and our British relationship with Russia exhibits a new breadth, openness and warmth. We saw that when President Yeltsin was with the Prime Minister at Chequers in September, and I saw it when Her Majesty the Queen visited Moscow and St Petersburg last month, when the Royal Standard dramatically flew over the Kremlin.

Mr. Christopher Gill (Ludlow)

Has my right hon. Friend seen the report by the Frankfurt-based Institute of Soviet Affairs which shows that the institute believes that Russia has 4.8 million men under arms? That is twice the officially recognised number of 2.3 million and even more than the number of men that Russia had under arms at the beginning of the reduction of armed forces in Europe in the late 1980s.

Mr. Hurd

I have not seen that report, but I shall check it. My hon. Friend's question leads me straight into what I was about to say—that we should not delude ourselves that the new dialogue and openness about which I have spoken will be easy or that Russia's interests will always coincide with ours. We cannot be naive but must be hard-headed about that. When we now meet we do so in the hope of agreeing on solutions and not just, as in the past, as a way of expressing disagreement and accepting it as inevitable.

Earlier this year I suggested to President Yeltsin in Moscow that underlying our new relationship was the principle of "no vetoes, no surprises". He agreed, and that is how we should continue to operate. One area on which our perceptions have certainly differed is Iraq. When President Saddam Hussein's troops moved south again last month, we sent two naval ships and a battalion of Royal Marines and doubled our deployment of Tornado aircraft in that region. As a result of that and the American action, the threat was again seen off. But it reminded us that we need to be vigilant, to be prepared to deploy troops in the field and to use our influence and authority in the Security Council.

There is a route for Iraq to return to normality, and it is clearly set out in the Security Council's resolutions. The recognition of Kuwait, which Iraq has just announced, is a step forward, but it is long overdue. However, it is not the only step that is required before sanctions can be lifted. Saddam Hussein, alone in his sumptuous palaces, bears responsibility for the suffering of the Iraqi people. The Security Council has made it quite clear in resolutions 706 and 712 how Saddam Hussein can obtain funds to relieve the suffering of his people through the sale of oil. He has repeatedly refused that help.

A general point goes to the heart of any sane idea of world order. Under chapter seven of its charter the UN Security Council has the power to pass mandatory resolutions binding all member states. That power should be used sparingly, perhaps more sparingly than in the past. Such resolutions, especially those that apply sanctions and put on embargoes, inevitably cause inconvenience and loss and are unpopular with some member states. That is why they should be a last resort.

I have mentioned the sanctions against Serbia-Montenegro, which are thoroughly disliked in the Russian Duma. An arms embargo applies to all parties in the former Yugoslavia and, as it applies to the Bosnian Government, it is deeply disliked by most members of the United States Congress. Equally, there are mandatory sanctions against Iraq which Russia and perhaps others would like to see lifted before long. All those matters are for legitimate debate and review. At present I think that those mandatory resolutions continue to be observed by the major powers. However, if member states, and particularly permanent members of the Security Council were to ignore or contravene those mandatory resolutions, others would quickly follow suit. The authority of the Security Council and the United Nations would quickly unravel and our hope for a more orderly world would begin to dissolve. We are all aware of the temptations and pressures not to comply, but it is essential that those temptations and pressures be firmly resisted.

Mr. Tim Sainsbury (Hove)

While my right hon. Friend is dealing with issues in the middle east, will he confirm that we also need to be vigilant against international terrorism? Will he also confirm that we will do all that we can, including the use of the mandatory sanctions to which he has referred, to bring pressure to bear on all parties that support international terrorism?

Mr. Hurd

I gladly confirm that. As I have said in the past, we are particularly concerned about the policies of Iran, and my right hon. Friend knows what we have been trying to do to focus world attention on terrorism. He will not find us lacking in that regard.

Let me turn to a subject that the House has discussed endlessly, but rightly. The future of Europe is always high on our agenda and there are ups and downs. Some people rejoice in the ups and some in the downs, but we are making progress on the things that matter for Europe and for the entire world open trading system.

The GATT agreement was a great success. We now need to ratify the agreement and make sure that the World Trade Organisation gets going as a vigorous decision-making body, keeping up the pace of trade liberalisation. I welcome the decision by the European Court of Justice earlier this week, underlining the role of member states in carrying out the GATT agreement. I commend that judgment to those who tend to believe that the European Court always makes its judgments in a centralising direction. Now the European Parliament—and all of us—can get on with ratifying the agreement and so, I hope, will the United States Congress.

It has been a good year for enlargement—another of our objectives. The people of Austria, Finland and Sweden have cast their votes and we now hope the Norwegians will vote to walk through the door that is open for them. The door should stay open; we should not behave like nightclub bouncers letting a privileged few slip in and slamming the door on others outside.

Our association agreements with six central European countries set a course for further expansion and we are encouraging those countries to prepare themselves for membership. We are now beginning to negotiate association agreements with the Baltic states, as they have their place in the European family.

As expansion to the east and to the south takes place, as my right hon. Friend the Prime Minister pointed out, the European Union must continue to encourage greater flexibility to match the greater diversity of its members. It is not a question of dilution. We need and believe in a strong, confident union which demands adherence to legal obligations, but the European Union must be more sensitive to its internal differences. It is already happening to some extent; we can see it in the principle of subsidiarity that is beginning to take root and increasingly in what some of our partners say. I read the speech by my French colleague Monsieur Juppeé in the French Assembly this week. He said that he was no enthusiast for the concept of the European super-state, however dressed up in federalism.

I was in the European Parliament in Strasbourg on Tuesday and I was struck by the way in which leaders of both left and right volunteered that there was no real appetite, even there, for an extension of the competencies of the Commission. There will be plenty of argument about the powers of the Parliament, but the idea which used to be orthodox in those circles that the Commission should steadily extend its competencies into areas not now covered by the treaty has reached the high water mark. We have to bring our own ideas and we shall do so.

Mr. Nigel Spearing (Newham, South)

The Foreign Secretary mentioned the treaty and what was outside the treaty—presumably he was referring to the treaty of Rome. Does he agree that title I of the Maastricht treaty gives powers to the Commission to generally supervise and be in a supervisory capacity over both the treaty on European Union and the treaty of Rome?

Mr. Hurd

The hon. Gentleman knows what actually happens under the second and third pillars and we can go into more detail another time, but it certainly is not supervision by the Commission. They are intergovernmental arrangements. The Commission is present, but it does not have the same powers it has in the Community itself—the first pillar.

We are working out and will bring forward our own ideas and energy to the work of preparing for the 1996 conference. The House will have many occasions to discuss that. We have a more immediate problem that was raised by my hon. Friend the Member for Twickenham (Mr. Jessel) during the business statement. We need a clear and effective strategy to root out fraud against the Community budget.

This week the Court of Auditors published a report which highlighted the scale of the problem. It was using for the first time the greater authority which we, the British, insisted it should have and which was put into the Maastricht treaty.

It is for the Commission and the European Parliament to tackle fraud effectively. It should be at the top of their agenda, not in some half-baked postscript. Europe can never be healthy, robust or successful if that cancer is not adequately treated. That is why my right hon. and learned Friend the Chancellor of the Exchequer is pressing for better financial procedures, more rigorously applied. It is also why my right hon. and learned Friend the Home Secretary, through the new intergovernmental system, has launched an initiative to ensure that fraud is treated as seriously in other member states as it is in Britain.

I repeat what I said this week at the European Parliament. I believe that the newly elected Parliament and Commission have the opportunity to prove their energy and clear-sightedness. They should gain a reputation for themselves by cleaning out the stables and insisting that member states do the same.

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

I remember an occasion in 1981 when my hon. Friend the Member for Blackburn (Mr. Straw), who was then a junior Treasury spokesman, replied to a debate on that very issue. Ministers assured the House that they would deal with the problem of fraud in the Community. That was 13 years ago, and every year since then Ministers have given assurances to Parliament and to the country that something would be done.

Even people like me—a committed European for more than 35 years—are beginning to question their loyalties because the Government have repeatedly refused to act. Why cannot some changes be introduced in the Community now, so that some form of international police force is given access to each member state to root out fraud in the way the Parliament and the people of this country expect?

Mr. Hurd

It was precisely in response to the sort of feeling that the hon. Gentleman has expressed that during the Maastricht negotiations the British Government insisted on new powers. That is why we have a report. The treaty came into force last November and it is now for the Commission, the European Parliament and the Finance Ministers to push ahead with implementing that. My right hon. and learned Friend the Home Secretary has tabled a proposal for joint action. The Commission has tabled a proposal for action by itself, which we shall consider sympathetically.

The hon. Member for Workington (Mr. Campbell-Savours) is right to say that the matter has dragged on for far too long. Now, thanks to this country, there is an opportunity to deal with it effectively, not just through declarations— [Interruption.] The hon. Gentleman and I will exchange further views on this matter in a year's time and then we can see how we are getting on. However, I assure him that we are on his side.

Sir Ivan Lawrence (Burton)

Before my right hon. Friend leaves the question of fraud, I remind him that yesterday my right hon. Friend the Prime Minister said, in an otherwise brilliant speech, that we should give greater powers to the Court of Auditors to investigate fraud in the United Kingdom. Is it the Government's policy to allow international investigators to come here and investigate our frauds? Or will that investigation be carried out by our police and our Serious Fraud Office, in the usual, accepted way?

Mr. Hurd

My hon. and learned Friend asks an important question. To some extent, the responsibility lies with the Commission. It must put its house in order. It has tabled a proposal, which we are studying, that would provide greater efficiency in that process. Of course, the responsibility also lies with member states as 80 per cent. of spending is by them. That is why my right hon. and learned Friend the Home Secretary has tabled a proposal for member states to be compelled to carry out their responsibilities more effectively. Both sides of the issue are important.

Mr. Skinner

I listened carefully to what the right hon. Gentleman said about the British Government having pushed for the new powers. He said that the system would be cleaned up. Why, then, did the Chancellor of the Exchequer go to an intergovernmental meeting a few weeks ago and vote to write off more than £500 million that the Italians had swindled from the rest of the nation states? The Foreign Secretary talks about a massive clean-up campaign, but the Chancellor of the Exchequer went along with other member states and voted to write off that £500 million, which means that the British taxpayer has to pick up the bill.

Mr. Hurd

The hon. Gentleman has that example entirely wrong. Let me explain it to him. Everyone recognised that the Italians and the Spaniards had, to put it mildly, over-benefited from the milk quotas. The Commission proposed a fine of 2 billion ecu for the two countries. We thought that that was not enough and we took the matter to court. The compromise that my right hon. and learned Friend accepted means that Italy and Spain will be paying a fine of not 2 billion ecu but 3 billion ecu—1 billion ecu more entirely as a result of the action taken by the British Government. That is not bad. [Interruption.] I hope that when the hon. Gentleman, who is not doing a great deal of listening this afternoon, has studied the figures he will recognise that he was wrong and pay the appropriate compliments to my right hon. and learned Friend on a good success.

I want now to move on and say just a word about another part of UN work which has not been really noticed since the disasters in Rwanda faded from the television screens. Rwanda has tested the UN system almost to destruction. I do not think that any of us, looking back, can be satisfied with the way in which the international community responded. Action, not hand-wringing, is now needed. We have made our contribution and we continue to do so.

Our cargo planes were the first to land back in April. Our aid specialists were there on the ground when the refugees started to arrive. Since August, 600 British troops—this has gone almost unnoticed—have been with the UN force in Rwanda. They will be coming home this weekend. I pay tribute to the excellent work that they have done. The media have hardly done them justice. Our soldiers have literally kept the aid effort on the road, carrying out more than 800 repairs on UN vehicles, rebuilding bridges and treating 125,000 people in the field hospital.

There are lessons to be learnt from that, and we are trying to learn them. We need to be better equipped to prevent such conflicts. When we cannot do that, we must be better equipped to respond quickly. I put forward some ideas on that to the UN General Assembly in September. We want to work with other members in developing a coherent structure for conflict prevention in Africa. We are following up those ideas with the Organisation of African Unity and we hope to have a meeting in Africa to carry them further fairly soon.

Mr. Chris Mullin (Sunderland, South)

Will the right hon. Gentleman give way?

Mr. Hurd

I shall give way to the hon. Gentleman, but I shall not give way again until towards the end of my speech.

Mr. Mullin

Is not one of the lessons to be learnt that we should not keep selling arms to those tinpot regimes?

Mr. Hurd

I shall come to that later. I pass over, as Cicero used to say, the hon. Gentleman, one of the most progressive Members of the House, and the way in which, when it suits him, he describes third-world countries as tinpot regimes. Such a patronising attitude causes immense irritation in the countries that used to belong to colonial empires.

I come now to our own last remaining large colonial territory. Hong Kong will cease to be British in 1997. But the value to the region of Hong Kong's amazing dynamism must continue—and will continue if the transition runs smoothly. There is a huge British stake in the territory—3.5 million British passport holders, 1,000 British companies and investment worth more than £90 billion sterling. But there is more to our responsibility than that. There is the duty to 6 million people in the territory to hand over Hong Kong in a way that preserves their confidence—everyone's confidence—in their territory. We have a duty to the world and to ourselves to achieve the transition in good order.

The Hong Kong Legislative Council has accepted our view of the right constitutional arrangements for the territory. We now want to turn that page and tackle and resolve the many outstanding questions. We have just had the welcome agreement on financing the new Hong Kong airport, which I have seen being built. It is on time and it is the biggest single engineering project now going ahead in the world. That is an important step. In the months ahead we shall be working for similar progress in other areas. With China, we need to put aside the sensitivities and suspicions of the past and press ahead with practical co-operation.

I will refer next to the recent High Court decision on the Pergau dam project—which, understandably and rightly, has aroused a certain amount of comment. I will not go over the whole background. [HON. MEMBERS: "Oh."] I am willing to do so, but that would take time, and I would be repeating the evidence that I gave to the Foreign Affairs Committee, by which I stand. The Committee's inquiries, made under the chairmanship of the right hon. Member for Bethnal Green and Stepney (Mr. Shore), went wider than the court judgment. It examined the events of 1988 and the political and commercial background, and the court did none of that.

The court was not asked to enter and did not enter into the question of arms sales. I understand that the court had nothing to say on that point. My understanding—and I will explain why it is only an understanding—is that the court has for the first time interpreted the Overseas Development and Co-operation Act 1980 under which the aid programme was given and decided that the Pergau project falls outside it. The court has not yet produced its written judgment. When it does, I shall study it and decide whether to appeal.

We must decide whether the Overseas Development Administration can live within the new judgment and yet continue to run an aid programme of benefit to this country as well as to the recipients of aid. I am thinking particularly of the aid and trade provision designed by a Labour Government in 1977, to benefit British industry as well as the recipient country. We shall study that point as soon as I receive the court's written judgment. Subject to any appeal—and we can decide on that only when we receive the judgment—we must of course fully comply with the court's judgment. Meanwhile, I have asked the ODA carefully to review all the projects and activities that it funds, to see whether any others approved under our previous understanding of the 1980 Act fall outside the interpretation of that legislation, which was given for the first time last week. I have read newspaper reports of that interpretation and have a transcript, but I do not yet have the full judgment. In a matter of this importance, clearly I need the full judgment before taking a decision.

Mr. Peter Shore (Bethnal Green and Stepney)

I understand the Foreign Secretary's difficulties in making too bold a pronouncement at the moment, because he has yet to see the High Court judgment and to decide whether to appeal. However, will the right hon. Gentleman give the House an assurance now that if he accepts that judgment, or if he appeals and loses, any funds already paid to the Pergau project from the ODA's budget will be restored to the ODA, and that any future sums to be credited for the Pergau darn against future ODA budgets will be disallowed and that the ODA will be able to spend as though no commitment to Pergau had been made?

Mr. Hurd

I will deal with that point in a moment. I may not entirely satisfy the right hon. Gentleman, but I will go as far as I can today. I would prefer to deal with these matters in sequence. I do not intend to evade the right hon. Gentleman's point because it has been made in many places.

Mr. Ian Bruce (South Dorset)

Was Malaysia a signatory to the Rio accord? I believe that the court specifically said that it felt that the way that Malaysia generates electricity is uneconomic, in that it decided to go for hydro-electricity rather than burn fossil fuel. Surely it is strange when a court starts telling countries that they should burn fossil fuel rather than choose clean hydro-electricity.

Mr. Hurd

My hon. Friend illustrates my difficulty, because I do not think that the court said that. None of the reports that I have read touch on that matter. Judging by some comments, the court commented on arms sales, and on this or that. I must have the considered judgment of the two judges in writing before I can weigh those matters and decide how best to respond.

The judgment, in any case, clearly does not lessen British involvement in the Pergau project. The dam is now 75 per cent. complete and it involves some 200 British companies. We have contractual obligations toward the banks financing the project.

Mr. Harry Greenway (Ealing, North)

Will my right hon. Friend give way?

Mr. Hurd

No. I shall make progress, as I have said. What the judgment would mean, if we decided not to appeal, is that the project should not—could not—henceforth be financed from funds voted under the 1980 Act.

I now come to the point of the right hon. Member for Bethnal Green and Stepney. Until we have received and studied the written judgment and decided for or against an appeal, we cannot decide on the implications for the aid programme of the money already spent on the Pergau project or the funds likely to be required—the right hon. Gentleman's point—from this year to 2006. Again contrary to some press reports, no decision at all has been taken or indeed could be taken on those points, and the House will be informed of a decision when it is taken.

I shall give the figures, because some reports go well astray. The total cost of support pledged for the project will amount, on the latest calculation, to £216 million; £24 million has been spent in previous financial years, and £11 million has been spent so far this year. A further £11 million is due to be spent before the end of the financial year, but no payments need to be made in the next few weeks. The remainder, which is £170 million, will be spread over the next nine years, with a peak payment of £26 million next year—that is the most in any one year—and the year after. Until the judgment, those were financed out of the aid and trade provision which I have already mentioned. At present, the aid and trade provision runs at £100 million a year, which is between 5 per cent. and 6 per cent. of the total aid budget. It is useful to have those figures on the record, because it puts those large sums in the right perspective.

There has been some attempt, to which the hon. Member for Livingston (Mr. Cook) has lent his mind and his tongue, to prove a link between aid and defence sales to several countries. I would like to make one point clear. During my time as Foreign and Commonwealth Secretary, I have at no time authorised or been aware of any link between British aid and British defence sales to any country anywhere in the world. I hope that the hon. Gentleman and the House will accept that assurance.

Of our 10 biggest aid recipients, all are low-income countries, seven in sub-Saharan Africa, and three in Asia. Nearly 80 per cent. of our bilateral British aid to developing countries goes to the poorest among them. Indeed, the OECD, as the hon. Member for Cynon Valley (Mrs. Clwyd) will know, in the recent review of our aid programme, recognised how British aid focuses on the poorest countries—it wishes that there were more of it, but it recognises that what we spend is focused, as it has always been, on the poorest countries. That picture is far removed from the suggestion that our aid flows are determined by prospects of arms sales. It is absurd to maintain that we should not provide aid to poor countries because they buy our arms, or that we should not pursue defence sales in countries where we give aid.

There is a certain unreality about some of the discussion. How many employees of British Aerospace, GEC, Rolls-Royce, Racal and other defence exporters would accept losing their jobs for such a specious policy? I wonder what redress those employees would have and what court they would go to for redress for lost employment if the Labour party's policies prevailed in this matter.

Miss Joan Lestor (Eccles)

I do not want the right hon. Gentleman to lose the point on the Pergau dam. I would like him to be a little more explicit in his answer to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). The question is very simple. Whether or not the Foreign and Commonwealth Secretary decides to appeal—according to one newspaper report, he said that his instincts are not to appeal, but that is a matter for him—if it is shown that the money was unlawfully used, all that we need to know is that it will go back into the aid budget and that the aid budget will not suffer as a result. Surely the answer can be yes or no.

Mr. Hurd

No, because the question is hypothetical. No Minister would answer a question of that kind. I have said that there will be no decisions on any of those points, either on past or future spending. We shall have to lake that decision if I decide not to appeal. As soon as that decision is taken, the House will be informed. I shall give way to my hon. Friend the Member for Ealing, North (Mr. Greenway), but I will not give way again.

Mr. Harry Greenway

Is my right hon. Friend aware that Ultra Electronics in my constituency is typical of many companies in other constituencies which are responsible for selling arms? It sells sonar buoys to many parts of the world. Many of the people employed there are not impressed by people in the Labour party and elsewhere who say that their jobs should be given up. They know that other countries will take over—[HON. MEMBERS: "How?"] By cancellation of arms sales for whatever reasons. Sonar buoys are as much a form of arms as anything else and Opposition Members ought to know that.

Mr. Hurd

My hon. Friend, not for the first time, puts a note of reality into the debate. Opposition Members are a little silent on the matter. They know that it is not only, or even mainly, Conservative Members of Parliament who represent industrial constituencies who write to us saying, "You must give an export licence to this project because jobs depend on it." There are plenty of examples of that in the files. Nor is it just Labour Members who write in. Westland is an important export contractor. That is why it is necessary for not only the Government but the House as a whole to get the balance right. I shall now explain in the last few minutes of my speech how we seek to get the balance right.

Mr. Jeremy Corbyn (Islington, North)

Will the Secretary of State give way?

Mr. Hurd

I will not give way any further. The whole House will accept that a balance is needed. We recognise, as the United Nations charter recognises, that countries have a right to self-defence. If a country wishes to defend itself it needs good equipment. A great many British companies supply high-quality defence products. That is the chain of reasoning and it is hard to resist. We need to ensure that when those products are exported, they are sold responsibly. We need to take careful account of the use to which the equipment may be put.

Mr. Corbyn

I thank the Foreign Secretary for giving way at last. Can he explain why his Government have consistently sanctioned arms sales to Indonesia, ipso facto supporting the invasion and occupation of East Timor and the genocide of 200,000 people in that country? Does he not think that the blood trade of arms to that country has to be stopped?

Mr. Hurd

The reason why we allow—under certain conditions that I shall come to—export sales to Indonesia is precisely the reason put by the Opposition Front-Bench spokesman for defence, the hon. Member for South Shields (Dr. Clark), who said that he supported the sale of Hawk training aircraft to Indonesia because that country was part of a south Asia security system. The Opposition Front-Bench team, seeking to strike the balance that I am talking about, came down on the same side of that balance as the Government on the point that the hon. Gentleman mentions. They were right to do so.

Administering the balance is the job of our export licensing system. If we believe that an application raises concern that equipment is likely to be used for internal repression, we will refuse it. If we are not satisfied about the impact of a proposed sale on regional security, we will refuse it. We have also withheld licences on sales which we thought unsuitable or unfit for the economic or technical capacity of the buyer. That is not academic. In seeking the balance, we refused, often, I expect, against representations from Members of Parliament, some 300 export licence applications last year, including riot control equipment where we were concerned that it was likely to be used for internal repression.

We will not put unnecessary barriers in the way of British companies which responsibly earn revenue and sustain the jobs of the 400,000 people in this country who work in the defence industry, or the approximately 90,000 of those whose jobs depend upon defence sales overseas. We are highly competitive in this field. It comprises only 2.1 per cent. of our total exports. But we are not prepared to dull the competitive edge of that part of our industry to satisfy people who are well-meaning but ill-informed; people who have no responsibility for the prosperity of the British people or for our ability to earn our living in the world.

As I have tried to show, our outlook on foreign policy is worldwide. That is because the interests that we promote and protect stretch across the world. We rely on exports to supply a quarter of our gross domestic product—more than twice as much proportionately as Japan or the United States. As an investor abroad, we are only just behind those two. As a home for foreign investment, we are second only to the United States. We are a European power with interests that reach far beyond Europe.

Protecting those interests, which is our daily job, is not done through some grand design or idealistic vision. It is done through hard work and, I hope, accurate perceptions—taking the world as we find it, identifying British assets and those things that we are strong at and setting them to work as effectively as we can, in the interests of prosperity and security for our people and inthe interests of a more stable and prosperous world.

3.50 pm

Mr. Robin Cook (Livingston)

There could not be a more appropriate moment for the House to debate foreign affairs than the day after the Gracious Speech, given that they provide most of the text of the speech this year.

We wholeheartedly agree with many of the objectives set out in the Gracious Speech. We welcome the support that is expressed for the development of political democracy and a multi-racial society in South Africa. Many Opposition Members worked to support the struggle to end apartheid and we share with the Government the objective of building on that victory to provide a stable future for the peoples of South Africa.

I would also add our voice to the support in the Gracious Speech for the middle east peace process. I hope that, in the year ahead, there will be surer progress towards that peace.

We shall co-operate, whenever possible, with the Government on developing their agreement with China to secure the long-term future of Hong Kong on the basis of the joint declaration.

On all those matters, the Opposition share much common ground with the Government on the role that Britain should play in the world.

I endorse the Foreign Secretary's observations on General Rose and the troops under his command. We fully support their dedication and commitment and appreciate the dangers that they face in Bosnia. We support the commitment in the Gracious Speech to achieving a peaceful settlement in the former Yugoslavia.

I must enter one word of caution—the terms that may offer the best hope for an immediate ceasefire are not necessarily the best basis for a long-term solution. The conditions under which it may be necessary to obtain a ceasefire may mean the partition of Bosnia. I press the Government to recognise the fact that Britain must observe those United Nations resolutions that call for a long-term solution in Bosnia—a solution that will both recognise refugees' rights to return to the areas from which they have been evicted and respect the integrity of Bosnia's borders. I invite the Government to support any initiative that could restore Bosnia as a multi-ethnic and pluralist society and not to leave it for ever in a European version of apartheid, based on ethnic partition, as we celebrate the decline of apartheid in South Africa.

I concur with what the Foreign Secretary said about the United States's decision on the arms embargo and the North Atlantic Treaty Organisation. I am sure that NATO will be robust enough to withstand that difficulty. I am sorry that the Foreign Secretary did not focus on where that decision leaves the United Nations. There are clear United Nations resolutions on the matter of the arms embargo on all the countries of the former Yugoslavia. The United States has frequently used the United Nations in ways that have been harmonious with its foreign policy. We have the right to tell the United States that the legitimacy of those resolutions that it wishes to get through the United Nations depend on it in turn observing those UN resolutions with which it might not entirely agree.

Each of those issues is very important, but I recognise that the balance of the Gracious Speech, by devoting most of its time and space to the rest of the world and only the minority to Britain, is not a tribute to the importance of world events but an admission that the Government do not have much to offer on domestic issues. It is a further measure of the thinness of the Gracious Speech on domestic issues that what has dominated comment on the Gracious Speech has been the reaction to the European legislation contained within it. Yesterday was our first day back and before we have had a single vote in the new Session, the Prime Minister has named which vote he will regard as a vote of confidence.

The device may well work, and I rather suspect that the rebels will be dragooned into line. I should not be surprised if that happened, because the threat to call a general election is a very potent weapon with which to threaten Back Benchers since, on the present polls, half of them would lose their seats. The Prime Minister has demonstrated that he does not dare let his own Back Benchers vote on the merits of the issue because his own party is too deeply divided over Europe.

I am advised that in foreign affairs a more bipartisan tone is required than is customary. I shall endeavour to rise to that unusual demand. May I therefore congratulate the Foreign Secretary on trying to knock some common sense into his party over Europe at the Conservative party conference? He will recall that, in a speech to that conference, he warned the party that we can get just a little high on xenophobia". We know who the right hon. Gentleman is worried might get a bit too high on xenophobia for their own, and the party's, health. They are the same people whom the Chancellor this week described as fanatical anti-Europeans—people such as the Secretary of State for Employment, whose speech to the conference did not just get high on xenophobia, it positively turned on the booster rockets and entered the stratosphere.

Any of our European partners observing the foot-stomping in Bournemouth which greeted the call of the Secretary of State for Employment to "stop the rot" from Brussels is unlikely—I put it diplomatically, as befits this role—to be more favourably disposed to British interests the next time they are negotiating with the Foreign Secretary and his colleagues in Brussels.

The House will be aware that I come to this brief from the Department of Trade and Industry, and it may therefore be appropriate to put in the context of my experience at the DTI and what I learnt there how I view our relationship to Europe.

The broad landscape of the development of trade and industry around the world shows that, at the turn of the century, the world will be dominated by three industrial blocs—north America, the European Union and the newly emerging industrialised countries of the far east. It will be a very lonely world for any industrial country trying to survive outside one of those blocs. Europe is the only one to which Britain can realistically belong. The issue is not whether we are in Europe, but what kind of Europe we are going to belong to.

The Gracious Speech referred—grudgingly, I thought—to the intergovernmental conference which is coming in 1996. Our view is that we should not approach the IGC as something to be feared, whose advent is to be resisted and whose conclusions are to be obstructed. We believe that the IGC should be embraced as an opportunity to open up the agenda of Europe.

On some of that agenda, we shall have common ground with the Government Front Bench. I am an enthusiastic supporter of the principle of subsidiarity, but I just wish that the Government would practise at home what they preach in Europe. Instead of giving an example of subsidiarity to Europe, Britain provides the example of the most centralised state in Europe. A consistent feature of this Conservative Government has been repeated Bills curbing subsidiarity to local government and, when the Government are resisted, the abolition of some of the powers of local government.

The Foreign Secretary will have our full support in the task of getting priority for enlargement towards the countries of eastern Europe. The historic challenge that is facing Europe is how we respond to the breakdown of the old order in eastern Europe and how we embrace those nations in a community of the democratic nations of Europe. When the history of this period is written 50 or 100 years from now, I suspect that those who write it will be puzzled by the obsession that western Europe has shown with its own institutions, often to the exclusion of the need to open its doors to the countries of the east.

On those points, I think that I am on common ground with the Foreign Secretary, but, in the year ahead, two issues are likely to be contentious. First, we are firmly committed to a social dimension to the European Union. That union cannot be a union that offers only tangible benefits to business without improving the standards of the work force of business. That is why we deplore the Government's opt-out from the social chapter. That opt-out has left the Government so isolated in Europe that the only political party that shares their view on the social chapter is the French National Front.

That opt-out has also left the Government increasingly isolated in Britain. Last week, an event occurred that demonstrated its irrelevance. One of Britain's biggest food companies signed a deal with representatives on behalf of 26,000 members of its work force in eight countries to provide a European works council across Europe. The managing director said: We believe that a workforce that understand the objectives of a business and the pressures are better able to respond appropriately. Under the opt-out, that company could have left out its British workers and avoided creating a works council to embrace them. That same managing director said that the company had not done so because that "would be counterproductive". What was that company? It was United Biscuits, which, since 1979, has given £850,00 in donations to the Tory party. [HON. MEMBERS: "Not enough."] At the current going rate that adds up to 425 parliamentary questions, enough to keep us busy during oral questions until christmas. Even that pillar of the Conservative party has come to the conclusion that the opt-out is counter-productive for its company.

The reality is that major British companies that compete in Europe know that they would not have the slightest difficulty in complying with the terms of the social chapter, because half of them are already observing it punctiliously in their factories across Europe. It is time that those companies' work forces in Britain had the same rights as those enjoyed by their European work forces.

The second subject on which we shall continue to press the Government is serious reform of the CAP. Since 1979, the cost of the CAP has more than doubled and the current budget provides for no reduction in spending on the CAP for the planning period of the Commission. It is not just the cost to the taxpayer that matters but the cost to families who pay higher prices for food and the cost to the environment from turning the countryside into prairies to produce food that we cannot eat. The cost to the standing of the European Union also matters, because most of the stories used by its critics to discredit it come from the CAP. That was demonstrated again in this week's report from the Court of Auditors, which detailed the most spectacular example of £1 billion that we gave to grub up vineyards, only to find, at the end of the period of expenditure, that the output of wine is up one fifth.

Today, the Foreign Secretary welcomed that report, as he did in a speech to the European Parliament on Tuesday. On that occasion, he expressed some satisfaction at the fact that the report had at least revealed the scale of the problem. Unless we are prepared to take action on it, there is not much point in being pleased with a report for that reason.

I would have more respect for the urging that the Foreign Secretary has given the Commission of the European Parliament to root out the problem if, last year, the Government had not proposed a cut of £31 billion from the CAP budget on anti-fraud measures. Moreover, the Government have still failed to take up the great majority of their share of the funds available from the Commission to combat fraud in Britain. I would have more respect for Government statements on waste in Europe if the Government, during the British presidency, had not agreed that the European Parliament should continue to traipse round three separate sites, at enormous extra cost. Against that background, the brow-beating of many Conservative Members about waste and fraud in Europe sometimes seems to spring less from an enthusiasm for rooting out fraud than from an anxiety to preserve it as a stick with which to beat the European Union.

Those of us who want Europe to succeed must recognise that our greatest priority must be to eliminate the fraud and waste that lower support for Europe among public opinion.

Mr. Iain Duncan Smith (Chingford)

We have heard at great length about the CAP, which the hon. Gentleman says is a problem and a disaster. Exactly what different action would the hon. Gentleman take to stop the problem with regard to the CAP?

Mr. Cook

I have two answers: one for the long term and one for the short term. In the long term, we must review the system by which we guarantee the price at which we shall buy any amount of food that is produced. In the short term, I shall give one clear priority that the Commission should take on board: I see no reason whatever why Europe should provide £1 billion to subsidise tobacco production when every Government in Europe are trying to stamp out tobacco smoking. Nor does it help then to say that the tobacco does not matter too much because it is so bad that nobody can smoke it.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Will the hon. Gentleman give way?

Mr. Cook

No, I must proceed with my speech.

The lengthy passage on foreign affairs in the Gracious Speech touched on many parts of the world besides Europe. Given that the subject was on the Foreign Secretary's mind when he was putting the final touches to the draft at the weekend, I was surprised that the Gracious Speech did not mention the Malaysian Pergau dam. However, I welcome the fact that the Foreign Secretary mentioned it in his speech. I must confess that, at one point over the weekend, I was worried that he might follow in the footsteps of his Parliamentary Private Secretary, the hon. Member for Portsmouth, South (Mr. Martin), and disappear before I had had my first debate with him. Indeed, the Foreign Secretary has confided to the BBC that he had thought of resigning when it emerged that payments of aid for the Pergau dam were illegal. But, as is so often the case with the Government these days, he had second thoughts and changed his mind.

I cannot congratulate the Foreign Secretary on that issue. My best efforts to be bipartisan break down at this point. I concede, however, that he should not be in the dock alone. The deal for which he is left taking the rap was set up by Baroness Thatcher. If it assists the Foreign Secretary, I am happy to add Baroness Thatcher to the charge sheet—and to any other charge sheet that he cares to suggest. That does not let the right hon. Gentleman out of his special share of responsibility for the debacle. The defence that his Department advanced in the court case was that the Foreign Secretary gave his personal authority to the payments for Pergau, so the ODA could not be held to have behaved illegally. If that was his Department's defence, he cannot now escape his personal responsibility for having got it wrong.

The Foreign Secretary's reaction to the judgment has been one of pained surprise—it never occurred to him that the payments might be illegal. If, during those actions, nobody stopped to ask whether they were illegal, that makes the whole episode worse, not better. It aggravates rather than mitigates the offence.

Let me rehearse to the House the actions that led to those payments. The Foreign Secretary authorised payments in aid, even after he had been told that the Pergau dam was not a sound economic project. He persisted in those payments after cost overruns in the project greatly increased the degree to which it was unsound. He overrode the views of the ODA accounting officer even when those views were formally recorded. When asked by my predecessor, he was unable to find a single precedent for a Foreign Secretary overriding the formal advice of his accounting officer.

If we are now told that he did all that without once asking whether it was legal to do so, we have an alarming glimpse into the private arrogance of a Government who have been there for so long that they no longer even ask whether there are limits to their personal authority.

In the event, the right hon. Gentleman has resolved not to resign. Very well. If he stays, the least that he can do, in the event that he chooses not to challenge the court judgment, is to put right the injustice that he has created. The first step in doing that would be to give an undertaking that he will pay back to the aid budget the money that was illegally taken from it. The second step would be to ensure that never again do payments of aid become entangled with the sale of arms.

I listened with the greatest of care to what the Foreign Secretary said about arms sales. It might be helpful to the Foreign Secretary if I were to caution him, by reminding him of an event that will occur this year, although it was not mentioned in the Gracious Speech—I well understand that the Government may not be looking forward to it—and that is the publication of the report of the Scott inquiry into arms sales to Iraq. That inquiry was sparked by two discoveries in the wake of the collapse of the trial of the executives of Matrix Churchill. The first was that the Government connived at the sale of British machine tools to Saddam Hussein, in the knowledge that they would be used in building up his armaments industry. The second was that, in 1988, one of the Foreign Secretary's predecessors, Lord Howe, secretly agreed to relax the guidelines on arms exports to Iraq without any statement to Parliament, but, in the same year, made a statement to Parliament in which he publicly and eloquently deplored the use of chemical weapons by the same Iraqi Government to whom we were supplying those machine tools.

As the Foreign Secretary is aware, I attended several of the sessions of the Scott inquiry. I was impressed by the thoroughness with which Lord Justice Scott explored the issues with his witnesses. I think that it is fair to say that many of those witnesses were also impressed by the thoroughness with which they were explored. I am sure that the Foreign Secretary would not want to appear before a Lord Scott inquiry five years from now, explaining current arms sales.

The lesson of the Matrix Churchill affair is that the Government must be honest with the House about the criteria on which they decide to grant exports for licence. That is why, if there are to be major arms contracts with Indonesia, the Foreign Secretary owes it to the House to be open with us about the basis on which they are supplied and about the advice that was tendered by the Foreign Office in the discussions about those licences. For example, is the Foreign Office satisfied with the human rights record of Indonesia, and is he entirely satisfied that none of the weapons that we have supplied have been used to enforce aggression and the continued occupation by Indonesia of East Timor?

Dr. Charles Goodson-Wickes (Wimbledon)

In the light of those remarks, I should be grateful if the hon. Gentleman would comment on the last Labour Government's point of view when, in April 1978, they authorised the sale of Hawk aircraft to Indonesia. Does he think that the position was any different then from what it is now?

Mr. Cook

The hon. Gentleman is correct and, as we have had several exchanges about that during Trade and Industry questions, I am familiar with the ground. The hon. Gentleman was perfectly correct in saying that the initial contract for Hawk aircraft was given by the last Labour Government. They were provided as training aircraft, and they were supplied on the clear understanding that they be used as training aircraft. [Interruption.] With respect, at the time, there was no evidence whatever that Hawk aircraft may have been used in East Timor.

I see the Foreign Secretary shaking his head. If he has any evidence that Hawk aircraft were used in East Timor in the 1970s, when the last Labour Government were in power, he should share it with the House.

Dr. Goodson-Wickes

rose—

Mr. Cook

I have already given way to the hon. Gentleman, and I do not intend to do so again.

The issues now are whether those Hawk aircraft have been used in East Timor, and whether the Foreign Office has any evidence to support that claim. If so, was that reflected in the discussions about the export licences for further contracts?

Mr. Corbyn

I thank my hon. Friend for giving way. Is he aware that, in August and September this year, two Hawk aircraft were used in bombing missions in the eastern part of East Timor which had been authorised by the Indonesian Government? That is yet another reason why there should be an arms embargo against the Indonesian regime, as long as it perpetrates human rights abuses, and as long as it illegally occupies East Timor. [Interruption.]

Mr. Cook

I do not understand how Conservative Members found that amusing. I do not understand what is comic about the suggestion that those Hawk aircraft may have been used against a civilian population in East Timor. If that is indeed the case—the Foreign Office will have better information than that available to any of us—it is not a matter for jest and comedy in the House, but a matter for serious condemnation which should be reflected in our future arms exports.

Sadly, East Timor is only one of 50 areas where there is active conflict. As the Foreign Secretary said, the United Nations is now approaching its 50th year. More demands are now made of it than when it had the energy of youth. In its first 43 years the United Nations mounted 15 peacekeeping operations. In the past six years alone, it has mounted 17 peacekeeping operations—more than in the preceding 43 years. Those 17 peacekeeping operations involve 3,700 British troops in various locations around the world. We salute the courage of those troops and the sacrifices that they are occasionally called on to make.

The expansion of the peacekeeping role is partly because the cold war has gone and we no longer live in a bi-polar world. That presents us with a positive opportunity for a new international security order in which the world community, not the super-powers, claims the right to police, and accepts the responsibility for policing, the observation of peace between nations. I entirely agree with the Foreign Secretary that, if that opportunity is to be grasped, the United Nations needs to look at some fundamental reforms of its structure and efficiency. If we are to respond to international crises, we must do so in a less ad hoc fashion, in a more professional operation. If the United Nations is to become the fire brigade of the world, it should at least be put on a permanent footing so that the fire engine can be updated every time there is a crisis somewhere around the globe.

Mr. Robert Hughes (Aberdeen, North)

My hon. Friend is right to say that we no longer live in a bi-polar world, but many things that are happening in the world derive exactly from that condition—I think especially of the Republic of Angola. Is my hon. Friend aware that truce talks have yet again broken down and that, having agreed to a proper agreement for the umpteenth time, Mr. Savimbi of UNITA has yet again said that he will not sign? That agreement was sponsored and brokered by the United Nations—is it not time that the United Nations acted strongly and compelled Savimbi to accept it?

Mr. Cook

My hon. Friend has put on record a concern that I entirely share. It is a matter of great regret and deep frustration that it looked as though Angola might be achieving a peaceful outcome, but it once again appears that it will be plunged into turmoil. My hon. Friend has been helpful because I had intended to turn now to the tragic events in Rwanda, which illustrate the slowness of the international community to respond—a subject on which the Foreign Secretary touched—and, more importantly, the international community's negligence towards crises in the making.

I acknowledge that Britain has a larger presence in Rwanda than most other countries—a fact in which Britain can take pride—but, as the Foreign Secretary agreed, the response of the international community as a whole is a matter for deep concern. The United Nations has made a commitment that we will deploy 147 human rights monitors in Rwanda—one to each district. That is vital if we are to build confidence among the refugee camps and enable refugees to return in safety. I understand that, as of last week, fewer than 30 human rights monitors were in place. Moreover, those 30 monitors had available to them only six four-by-four vehicles, one of which was donated by Oxfam. I see no reason why the international community should be dependent on charity to carry out a United Nations resolution.

The remarkable fact about the Rwandan crisis is not the poor nature of the response but the wilful negligence that helped to create the conditions of the crisis. Rwanda is one of the poorest nations, and has one of the densest populations, in the world. In the late 1980s, the price of its coffee halved. The reaction of the International Monetary Fund was to impose a structural adjustment programme on Rwanda which produced a major reduction in public spending, introduced charges for health and education, intensified the poverty of local people and reduced the public support available to help them to alleviate that poverty. After all that, the international community need not feign surprise at the fact that the tension and desperation which followed led to communal violence.

Rwanda is not exceptional. It is, unfortunately, only too typical of the pressures on sub-Saharan Africa. Here I come to what I thought was the most breathtaking line in the Queen's Speech—the one that said that Her Majesty's Government will maintain a substantial aid programme. The Foreign Secretary knows that the aid budget proposes no such thing. Certainly, the Government have a commitment to raise it to 0.7 per cent. of gross national product, but instead of moving towards that target they are steaming steadily away from it. The aid budget reached that percentage of GNP in 1979; it is now down to 0.3 per cent. and still falling.

The aid budget is frozen in cash terms, which means that it will not maintain its value in real terms. The final footnote to the tragedy of Rwanda is the fact that the Government are budgeting to cut aid to Africa by £60 million over the next three years. We are spending four times that amount to build a darn and flood a valley in Malaysia—at the same time as planning to spend less on piping clean water to the poorest communities in the world. How is it possible to justify such priorities?

The message from the conflicts born of this poverty is that international security is best built on international solidarity, in which the wealthiest nations help the poorest out of the poverty that breeds conflict. It is in our own interest to do so, because our troops will be called upon to serve to prevent the conflicts.

Mr. Hurd

The hon. Gentleman is being philosophical and is entirely justified in so doing. If he had looked at Africa 20 years ago he could have argued that a great deal of the suffering was due to poverty. Of course, poverty remains; I just do not agree with his analysis now. The recent troubles of Rwanda, Mozambique, Angola, Somalia and Liberia are not primarily the result of poverty. They are the result of communal tensions and of the breakdown of a civil society. I do not believe that that is essentially the result of poverty or of a deterioration in those countries' standards of living over the past 20 years. The real difficulty that the United Nations faced in Rwanda, in what until recently would have been regarded as a purely internal matter, was how the international community could prevent Hutus from slaughtering Tutsis, or the other way round.

Mr. Cook

The right hon. Gentleman correctly said that he and I approach these matters from different political philosophies, but I invite him to ask himself a question. If he believes that the violence and disruption in so many parts of Africa originate only from communal tensions and tribal differences, how come the same tribal differences and tensions existed 20 years ago but without the same degree of violence and disruption across the continent? I would also ask him to reflect on the fact that, during the past decade, the African countries that were poor at the start of it have become even poorer. In most of the countries that he mentioned, child mortality has increased, life expectancy declined and participation in education decreased. The Foreign Secretary may shake his head but those are the facts.

Not surprisingly, given those facts, we find that we are faced with greater violence. Even if there were room for doubt about the causes, surely the wise course for any responsible Government to follow would be to err on the side of that doubt and not risk making the situation worse by cutting our aid programme for Africa.

Mr. Ray Whitney (Wycombe)

Will the hon. Gentleman tell the House by how much a Labour Government, should there ever be one, would increase the overseas aid budget?

Mr. Cook

The hon. Gentleman need not look to the future: he can look to the past for an answer to that. In a situation of grave difficulty, and without a penny from North sea oil, the last Labour Government increased the proportion of our GNP that went on aid. Since then, the Conservatives have drunk the North sea oil revenues but have cut the amount of aid. Our commitment is perfectly plain. We shall seek to resume the work that was being carried out by that previous Labour Government and make progress towards the target of 0.7 per cent., as resources permit.

Mr. Jacques Arnold (Gravesham)

Will the hon. Gentleman give way?

Mr. Cook

No; I have given way for the last time.

I was saying when the Foreign Secretary disagreed with me that international security is best based on international solidarity. Before concluding my speech I should like to put one other thought to the Foreign Secretary, and it is my reason for believing that international solidarity is in our interests. The pressures of poverty are eroding the environment of the third world. Because we share a single globe, that damage threatens the climate on which we depend for our standard of living.

Increasingly, security, trade and the environment are making us all members of an interdependent world community. In the year ahead, we shall judge the Government's foreign policy to see whether it strengthens our ability to put into the world community measures that would establish international security. We shall judge whether it gives expression to the international solidarity that a responsible and still relatively affluent nation owes to the world's weaker members. When the Government's foreign policy passes that test we shall support them during whatever period they manage to stay in office. When their policies fail that test we shall expose and challenge those failings until we manage to put the Government out of office and give Britain a Government who will introduce a Queen's Speech that will be full, decisive and based on our values of social justice at home and our commitment to international security and solidarity abroad.

4.26 pm

Mr. John Patten (Oxford, West and Abingdon)

I should like to examine the Gracious Speech in relation to the two classical Tory themes of continuity and momentum. Queen's Speeches are rather like the trains by which one is threatened at French level crossings where one is informed by notices that another train will be along in a hit. Another Queen's Speech is always being prepared as soon as the Gracious Speech of a new Parliament has been produced. I have listened to 15 such speeches, some of which have added to the momentum of Conservative government while others have added to its consolidation and continuity.

I should like to examine the Gracious Speech in relation to, first, the constitution; secondly, Europe; thirdly, privatisation; and, fourthly, the new civic and community agenda which may dominate British politics for the next 15 years just as surely as privatisation and other issues have dominated it for the past 15 years.

I rejoice at the fact that the Gracious Speech does not mention major constitutional change, to which the Leader of the Opposition has already so wedded his party. If he ever has the opportunity, he will rue the day that he allows a future Labour Administration to become mired in the depths of constitutional reform. The people of this country do not wish to alienate any part of our sovereign territory. As the last general election showed, people do not want major devolution for Scotland or Wales. Certainly, people do not wish to have any of the crackpot schemes for regional government that have been suggested by Labour Front-Bench speakers. Such schemes would be not only costly but would make Britain one of the most over-governed and over-administered countries on earth. Over the past 15 years, I have been pleased to note that no Queen's Speech has referred to major constitutional innovation. I hope that that will continue for the next 15 years of Conservative administration.

The second issue is that of Europe. My right hon. Friend the Foreign Secretary knows that I am pleased when one of Europe's ups, rather than one of its downs, is raised here or in the media. The whole House is aware that I speak from that standpoint. I certainly give my wholehearted support to the European finance measure in the Gracious Speech.

I am concerned, as is the whole House, about fraud. There is no need for me to speak at any great length about the problems presented by mass fraud in the countries of the European Union. They have been discussed quite enough in recent days and they do not need elaboration from me. Action has been taken, much of it encouraged by the Government, and I congratulate them on what they have done. However, I am saddened by the lack of apparent concern shown by the German presidency about fraud.

The German presidency should have reacted very quickly indeed in the past two or three days and promoted the calling of a special council at ministerial level—possibly the highest ministerial level of all—to show the people of Europe that when their money is used for European purposes, it is done in as straightforward and honest a way as possible.

I am sorry that the German presidency has not taken that action and I urge my right hon. Friend the Foreign Secretary to consider applying to the German presidency, under the emergency procedures that are available, for a European ministerial council to be held as quickly as possible to demonstrate that action will be taken over the issue of fraud. We do not need cries of initiatives or new stunts to get Europe off the hook; we need action to show that, at the highest level, European Heads of State—and, if necessary, Heads of Government—are sufficiently concerned about the issue to make it a top priority.

I urge on my right hon. Friend speedy consideration of that possibility. I fear that, as such matters are played back into the new Commission and, as my right hon. Friend said, we all travel carefully and hopefully in respect of the new Commission and the European Parliament, the issue of fraud will get lost in the undergrowth again. It will be there in the shrubbery and, once it leaves media interest, will not receive as close an examination as it should.

Mr. Duncan Smith

Will my right hon. Friend give way?

Mr. Patten

I give way to my hon. Friend, but I remind him that I am just a simple Back Bencher and cannot answer on behalf of the Front Bench.

Mr. Duncan Smith

I am grateful to my right hon. Friend and welcome him to the debate. He is certainly not a simple Back Bencher, although he is a Back Bencher. Does he agree that one of the problems of the German presidency in this context, as he so ably pointed out. Is the current German obsession with further and deeper political union at the cost of all else? Does he agree that that is one of the big problems that has been missed?

Mr. Patten

My right hon. Friend the Member for Watford (Mr. Garel-Jones), who has come to sit at my feet, muttered sotto voce that it has always been in the treaty of Rome. When one reads such treaties, one finds that we are signed up to all sorts of things that my hon. Friend might not actually like.

I am about to turn to exactly those points which my hon. Friend asked me to address. It is my belief that the European contributions measure will lead to money from British taxpayers funding European matters. I am one of those who is happy when Europe goes through its up, rather than its down, periods. Therefore, part of our contribution will be funding the activities which lead us into intergovernmental conferences in 1996. As I am happy to inform the House, in the first half of the year the Italians will be in the presidential seat and in the second half there will be the Irish, so 1996 will be an interesting year.

Much of the debate on the measure will quite properly flow around preparatory measures and positions being taken by different countries in the run-up to the IGCs. I urge my right hon. Friend the Foreign Secretary and his right hon. Friends to ensure that the British voice is strongly heard in the composition of that agenda.

We are major players in Europe; we are at its heart. We must be major players in proposing the agenda for the intergovernmental conferences in 1996. Above all, we should not allow them to be inward looking and concerned with further and further harmonisation within a Europe that is moving unsteadily in that direction; for example, Europe has the highest non-wage labour costs of any part of the globe.

As anyone who travels in the far east—as I have done on a number of occasions—will know, the killer economies there are moving at such a rate that they are likely to threaten the economic and social stability of the European Union and that of our friends across the north Atlantic before the decade is over. Therefore, it is critical that my right hon. Friend encourages such discussion as there is to be outward, not inward, looking.

My right hon. and learned Friend the Secretary of State for Defence made an interesting speech recently, which was reported on the radio. He called for a warming of the north Atlantic link. I am a great admirer of the North Atlantic Treaty Organisation, but such is the economic threat—I do not use that word idly—from the far east that the European Union may have to consider a much closer relationship with the North American Free Trade Agreement countries. They are the United States and Canada, which have recently been joined by Mexico, and will doubtless be joined by further countries. We all know about NATO and we will need it in future, but we must also properly consider the North Atlantic Economic Organisation, which could well bring together the two powerful trading blocs. We will debate such matters in the House in the run-up to the IGCs.

It is important that we ensure that Europe considers the major constitutional issues within the European Union. My right hon. Friend the Foreign Secretary said that his colleague Mr. Juppé had said that he was lukewarm—or some such phrase—about the possibility of a European super-state. My right hon. Friend suggested, both in the way that he spoke and through his body language—or as much of it as I could observe from behind him—that he was at one with Mr. Juppé. If so, let that be a key constitutional strand in the debates running up to the IGCs.

We need to be clear about the role and relations of the European Union and individual sovereign states. Ideas cannot easily be bucked at this stage. These are difficult questions to ask, but I am the first to admit that they are much more difficult to answer. Nevertheless, we must finally decide what are the role and relations of the sovereign states and the European Union. Is the Commission a government or is it a servant of governments? Those are major issues that, notwithstanding our treaty obligations, we have not dealt with as the Twelve, let alone as a future Sixteen or Twenty-two. We must ensure that we have a European Union working in the way that I profoundly wish it to work.

There are interesting times ahead and I believe that 1996 will be a defining moment in the history of Europe. I also believe that it will be a defining moment in the European issue within the United Kingdom. Therefore, it demands the most careful, cautious and deeply thoughtful approach from those of us who support the Government, as I do, to ensure that the issues are addressed as properly as they can be during the next two years.

I want now to deal with the agenda for privatisation contained in the Gracious Speech. Gracious Speeches come and go and agendas begin. We still have a long way to go with privatisation. I have made inquiries at the Treasury and it appears that we still own 40 or more state industries and corporations. That is wrong. The best people to run businesses are businesses. Government have no business to be in the business of running businesses, although we must run our business as a state in as businesslike a way as possible. As a Conservative party, we should make it a policy aim to ensure that by the end of—let us be generous—1999, the end of the century, we have sold and returned to the private sector all those things that can be sold and returned to the private sector, so that we have a clean slate with which to begin the new century and to tackle the new agendas that are coming to the fore.

Mr. Paul Flynn (Newport, West)

Does the right hon. Gentleman agree that the Government have concluded that some things are unprivatisable? Can he explain why in the Queen's Speech there were no measures to privatise either the Post Office or the Vehicle Inspectorate?

Mr. Patten

As I said earlier, I am just a simple Back Bencher, squire. Those questions will have to be put to those on the Front Bench.

I would wish by 1999 to have cleared the board of everything we own that the Government can usefully get rid of, because ownership can sometimes clutter up Government activities. Again and again, ownership has been proven to be much better in private hands. Just look at the benefits of 15 years of Conservative Government in conveying ownership to council house tenants of their houses or flats, or to those who have bought shares for the first time.

Lastly, the new agenda of British politics in the next 15 years of Conservative Government will be to complete, of course, a number of those things that we have started, such as the privatisation programme, but also to begin a whole process of trying, just as we have given ownership to the British people, to persuade the British people to take more responsibility.

I remember my right hon. Friend the Foreign Secretary, as Home Secretary, coining that excellent phrase "the active citizen", which was all about the taking of greater responsibility by people in our community. We are on the eve of developing a form of civic Conservatism which will begin the process of disseminating power. We have seen only a few footsteps in that direction so far—health service reforms, the giving of power to grant-maintained schools with governors made up of parents, local people, business people and teachers. We have only begun that process.

The Labour party talks a lot about community. We all know what it means by community. It means the reinvention of local government by other means and the giving of power to those people who used to run communities so that they can do so again. On the radio this week, we heard that the Isle of Wight county council, which I guess is Liberal controlled, cannot run its care in the community programme. The immemorial cry of a county council in trouble, one which cannot do its job properly, is that it does not have enough resources—that is, that it does not have enough money.

Why have we not gone a step further than we have in the past? The Queen's Speech does not take us down this path. For many years, we have had housing associations to bring together fruitfully that combination of public and private money and public, private and voluntary sector endeavour, to provide social housing for people in need who need to rent. Why do we not have care associations which take over the provision of care in the community from those county councils that cannot provide it properly? Those are the sort of ideas that are not yet reflected in the further dissemination of power.

Mr. John McWilliam (Blaydon)

Will the right hon. Gentleman give way?

Mr. Patten

I see that I have over-excited the hon. Gentleman, so I had better give way.

Mr. McWilliam

Is the kind of caring Conservative-controlled council that the right hon. Gentleman is thinking of for the future to be more on the model of Westminster city council?

Mr. Patten

I long enjoyed the excellent services of Conservative-controlled Westminster city council at one end of my life, as I have enjoyed the excellent services of Conservative-controlled councils in Oxfordshire at the other end of my life. I am pleased to have given way to the hon. Gentleman and to have endorsed Westminster city council as an excellent council.

Dr. Goodson-Wickes

Will my right hon. Friend give way?

Mr. Patten

I like Wimbledon council, too.

Dr. Goodson-Wickes

I hope that my right hon. Friend does not, because, unfortunately, it is temporarily under Labour control.

My right hon. Friend will remember that he and I joined common cause in the past in promoting the concept of active citizenship. I welcome what he has said today. Linking that with what he said about care in the community, would he welcome opportunities for private sector companies to deliver community care in an efficient and caring manner?

Mr. Patten

Yes, of course. Again and again, the private sector has worked its magic in enhancing provision funded by the state at a higher level than could otherwise have been provided.

It is on that note that I end. Agendas change. There is continuity and change in the Queen's Speech. I hope that there will be continuity and further change in future Conservative Queen's Speeches. In examining why we should not have constitutional legislation, why we should be cautious about what we do in Europe, why we should drive on with privatisation and why we should think of new frontiers in order to transfer responsibility, as well as ownership, back to our citizens through the concept of a more civic Conservatism, I have tried to consider how those changes can carry us through the next 15 years. Above all else, it is critical to set out clearly each of the strands of Conservative thought and to show that the plan is there for the next 15 years, just as there was a plan which has carried us so successfully through the past: 15 years. My right hon. and hon. Friends have my strongest support.

4.46 pm

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

We do not often have the chance in the House to debate foreign affairs, so I hope that the right hon. Member for Oxford, West and Abingdon (Mr. Patten) will forgive me if I do not follow him down the interesting highways and byways of a simple Back Bencher.

I want to return to the main theme of the debate, which is the broad sweep of world affairs and, faced with the same problems that everyone else faces of a miscellaneous ragbag of points, I want to try to set what I have to say about one or two particular instances of our relations in the general context of the plea that the Government have made from time to time, but not strongly enough, for the spread of good governance.

I define good governance as having four component parts. First, we should encourage the promotion of free and fair elections, for the simple and obvious reason that one can search the human history book in vain to find any example of where two democracies have gone to war. There is no greater assurance of the promotion of peace than the promotion of genuine democratic traditions, in countries around the world.

Secondly, another cornerstone of good governance is accountable and transparent government. At a time when we are talking about corruption, whether it be in the European Community, where we call it fraud, or whether it be the misuse of some of our aid programmes, the only way to root out corruption is to establish accountable and transparent government.

I came across one example on my travels during the summer recess when I was astonished to be shown the new palace in Lilongwe which was built by Dr. Banda before he was removed from office and which cost $70 million. The scale and extravagance of that would have been horrendous in any country, but in one as poor as Malawi it was a scandal. It was robbery of Dr. Banda's own people and it makes doubtful some of the United Kingdom aid programmes to Malawi when such gross misuse of funds was going on. It is a great tribute to the new democratically elected president of Malawi, President Muluzi, that he has declined to take up residence in such an absurd place.

Thirdly, in the quadrangle that creates good governance there is freedom of expression and association, including freedom of the press and, fourthly, independence of the judiciary and access to a genuine legal system. Those are the values that we should be attempting to promote as part of our foreign policy.

In particular, I welcome the speech on that theme made by Baroness Chalker at Chatham house in July when she talked about putting policy into practice. My only criticism of Government foreign policy is that that high priority has not been reflected right across the board—not just in the Foreign Office but in the Department of Trade and Industry, the Ministry of Defence and aid programmes. I add to the pleas made during the Foreign Secretary's speech. Regardless of his consideration of the legal judgment in the Pergau dam case—I am concerned not so much about the legalities as about the political mistakes that were made in that instance—I hope that the £216 million earmarked for that project will be reinstated in the aid programme.

It has sometimes been said in the House and elsewhere that the standards that I outlined are western standards and that we cannot expect people in Asia or Africa to aspire to them. That is a racist approach to international politics—and when it is said by people who are themselves Asian or African politicians, it is positively insulting. If, as the Gracious Speech repeats, we are committed to upholding human rights, we must accept that torture hurts just as badly whether one's skin is white, black, brown or yellow. We should not accept in any part of the world any departure from aiming at high standards.

I pay tribute to the work done in that sphere by the Westminster Foundation—a new and small organisation which is inadequately funded compared with the munificence of German political foundations or the American Endowment for Democracy. Nevertheless, the foundation has made a good start. One sees from its annual report that, even with a small budget, it is playing a part in promoting good governance. I only make a plea in the direction of the Treasury that its work should continue to be enhanced.

I am a little concerned that the Gracious Speech refers to celebrating the 50th anniversary of the United Nations. I hope that we shall do more than simply wave flags or hold meetings or church services. The UN's 50th anniversary is a time to pursue some of the ideas proposed by the Foreign Secretary in the past, and to adopt the proposals made by the UN Secretary-General in his document "Agenda for Peace". We should recognise that a UN charter drafted in the circumstances of 1945 is not really appropriate in the circumstances of 1995. We want the charter revised, more relevant structures and a more streamlined organisation.

I join hon. Members who referred to the UN's peacekeeping role and to the way in which, sadly, we are often too late on the scene. I saw that for myself graphically in Rwanda in July, when I found myself sitting in the limited office then available in Kigali to Ambassador Khan and to General Dallaire. It was sad to note the length of time taken to provide the 5,000 troops promised by the Security Council. A chart on the wall showed each of the countries from which the contingents were to come. When I was there, the number arriving was 900 out of 5,000 promised. I asked the general when he needed the troops, to which he gave the political response, "Yesterday." As we know, the tragedy unfolded and the troops were late in arriving.

I add to the tributes already paid to the British forces in Rwanda, who in July had just arrived and were settling in. It is a magnificent operation, but it is sad that it was so late. Will the Government support the initiative taken by the Dutch Government in the Security Council, to press for a standing rapid deployment force? It is not suggested that armed troops should be on standby in Geneva or New York, but there is a realistic proposal to have forces assigned by member nations ready to be moved as a fire-fighting expedition as and when required.

I am concerned that, with the end of the bi-polar world to which reference has been made, there has been a tendency recently in Washington to regard the interests of the UN and of the United States as one and the same. In Somalia and in the recent decision concerning arms for Bosnia, we have seen the continued erratic nature of United States foreign policy, which may get worse with the recent reverses in the American elections. It will be even more difficult to achieve a coherent United States foreign policy when the Government no longer carry a majority in Congress.

British foreign policy should be directed more through the European Union, as foreshadowed in a recent speech by the Foreign Secretary and in the Maastricht treaty. We look forward to much greater cohesion in defence and foreign policy in the European Union.

One area of further development in the UN is the recently created UN register of the arms trade. At present, it is only a register and not fully effective, but it has been established only two or three years. I hope that in future it will become an instrument of international arms control.

Although people complain with some justification about the degree of bureaucracy in various UN agencies, it is as well to remind ourselves that the UN's annual running budget is only one quarter that of the debt that Mr. Robert Maxwell left behind when he died, which gives a sense of perspective. It is money well spent if we can make the United Nations a much more effective instrument of international policy than at present.

Dr. Robert Spink (Castle Point)

Does the right hon. Gentleman believe that now that UNESCO has cleaned up its act administratively, we should rejoin it? If so, should we do so before America rejoins or after?

Sir David Steel

Yes, I hope that we rejoin UNESCO.

The Government recently received formal proposals from the Swedish Government for the creation of an international institute for democracy and electoral assistance, which has the UN's blessing but will not be another UN international agency. It will be established by international treaty next year. Although officials from the Overseas Development Administration have been engaged in preparatory discussions, the Government have yet to make a commitment. I believe that that useful proposal will help us in spreading the mechanics of democracy around the world.

In the context of the wider view of foreign policy that Britain should be pursuing, I must mention our relations with one or two specific countries. I start, as did the Foreign Secretary, with the current state of affairs in Iraq. I visited that country in the summer with the Bishop of Leicester, at the request of some Iraqi citizens living in this country, to assess the present scale of suffering of the Iraqi people as a result of the protracted dispute following the Gulf war and the impact of sanctions.

I believe that we would not have made the progress that we have made with Iraq had it not been for international pressure. I am not suggesting that international pressure should have been any less. However, the Americans in particular are in danger of obfuscating two entirely separate issues in the UN Security Council resolutions. The first dealt with the oil embargo and related specifically to weapons of mass destruction and efforts made by the United Nations commission under Rolf Ekeus to establish monitoring machinery in Iraq.

Slowly and painfully, progress has been made. The commission has reported that all verification procedures are now in place, but we must wait some time to see if they work. That issue should be treated separately from the wider question of sanctions, which relates to issues such as recognition of Kuwait compensation and missing persons. I am glad that there has been progress with those issues too, even within the last couple of days. The Iraqi Government—admittedly, four years after the end of the Gulf war—have recognised the state of Kuwait, its boundaries and territorial integrity. It is necessary to recognise that, because of the effect of the Saddam regime in Iraq, there is real human suffering in that territory. We did not just go on a Cook's tour organised by the Government. We made our own inquiries, met the aid agencies and went to places without the Government's foreknowledge. The scale of human suffering in terms of the lack of medicines and food is very genuine.

The Foreign and Commonwealth Secretary cited the text of the resolution which enables Iraq to sell some oil, but it is necessary not to stick by all the detailed regulations which were contained in the final proposal of the United Nations Security Council, because there is no doubt that the bureaucracy involved is a clear transgression of national sovereignty. We should enter into dialogue with the Iraqi Government to make sure that the people of that country do not continue to suffer.

I have suggested, for example, that, on the issue of the Kuwaiti missing persons, if the Iraqi Government really believe what they say—that they have no Kuwaiti prisoners still in their prisons—they should open the prisons to inspection by the International Committee of the Red Cross. Such positive suggestions could be pushed forward, but it is difficult to do so while we have no diplomatic representation in Iraq. Fundamentally, I am arguing for a bit of carrot as well as a bit of stick in dealing with the Saddam regime, in the interests of the people there.

I now refer briefly to Hong Kong. The Foreign and Commonwealth Secretary mentioned that we were about to undertake a most extraordinary step—the transfer of 6 million people for whom we have been responsible into the hands of what is fundamentally a very autocratic regime which certainly does not meet any of the standard that I have set out. So be it; that will happen. We used to have an annual debate on Hong Kong, yet we have not even got around to debating the Select Committee on Foreign Affairs report on Hong Kong now that we have reached this delicate stage. We should have a debate on Hong Kong very soon.

It is undoubtedly the case—it is the Governor's own view—that we were very late in paying attention to the development of democracy in Hong Kong, but, now that we have done it, it is regrettable that we have shackled Hong Kong with the commitment in the basic law not to have political ties with the outside world. If we are really to have two systems in one country—one democratic and one in accordance with the wishes of the People's Republic of China—it is right that people in Hong Kong should be free to associate with international political movements, be they Socialist International, Christian Democrat International, or Liberal International in our case.

In the meantime, while we are still responsible for the government of Hong Kong, I make one plea: we should devote as much attention as we can during our remaining tenure of Hong Kong to improving the environment. I remember when I first went there back in 1965 or 1966 as a very new Member of Parliament. I was rather shaken by the poor standard of the housing that we were building in our own colony. It has improved over the years, but it is undeniable that, over the decades, we have been rather negligent as a colonial administration in dealing with the problems of the environment and of pollution. The problem is now becoming very serious in Hong Kong, and not just aesthetically; it is beginning to pollute marine life, to the possible danger of the human beings who consume it. That issue should receive much greater attention as we come to the end of our period of tenure.

Let me refer next to Kenya. I do so because President Moi is visiting this country. If we consider the four standards that I have set out, we must say that, at the moment, Kenya is not adhering to any normal standard of good governance. The Kenyan human rights commission has documented nearly 300 cases of police torture this year. The election commission itself is not independent; it is appointed by the Government, something that we would not tolerate with the Boundary Commission in this country. Judges still receive instructions from the Government. Newspapers—either individual journalists or publications—are threatened. Members of Parliament need permits in order to hold public meetings in their constituencies, and 36 of the 85 opposition Members of Parliament were gaoled for lesser or greater times during 1993. The Bank of England, too, has failed to pursue the banks in this country which were involved in the Goldenberg scandal.

All those matters can be legitimately criticised. When people ask, "Why do you pick out Kenya?", the answer is that Kenya is a great friend of this country and that one is entitled to be more candid with friends than with enemies. The Prime Minister has raised one human rights issue with the President, but I hope that we will do more to make it clear that a new governor of the Bank of Kenya and a new Finance Minister do not constitute a return to good governance. More than two years ago, the Kenyan Attorney-General promised that there would be reviews of the constitution, and in particular some of the colonial legislation which is still in place. That has not happened yet. The opposition parties have not always been entirely helpful in the process, but we must say to the Kenyan Government that a lot more needs to be done.

I could say the same—in the interests of time, I will not—on the subject of Nigeria, another friend of this country which at the moment is seriously in default of the standards of good government.

I now refer to the arms trade. I take a rather different view from that of the Foreign and Commonwealth Secretary. I do not regard it as just a British issue. Regional conflicts around the world have been fuelled by the arms trade, from Bosnia to Angola. Just the other day, the Croatian Defence Minister said: What I need, I get. The arms market is saturated, so saturated you would pay three times the price if you got things legally. It is reported that Mr. Susak described buying arms in countries including Poland, Bulgaria and Russia as 'an open market' and said Croatia was now providing the army of the Muslim-dominated Bosnian Government with anti-tank weapons and ammunition for mortars, cannons and machine guns. An analyst of Jane's Defence Weekly has also pointed out: They have obtained Russian-made rocket-propelled grenades from the former East Germany, Chinese anti-tank weapons from Pakistan and ammunition from Iran. I am not talking purely about a British phenomenon. The arms trade is one of the perils of the world today. There are new entrants—sadly, among them is South Africa. There is evidence that the South Africans were supplying both sides in the Rwandan civil war right up until last year. We must take a grip on the arms trade as a subject on its own.

I know the counter-argument—the Foreign and Commonwealth Secretary almost hinted at it—that we must sell because, if we do not, somebody else will. That is, of course, the argument for a coherent European policy. Rather than having, as do some countries in the European Community, an arms embargo on Indonesia while we do not, an embargo on the sale of land mines while we do not, or other embargoes on Rwanda while we did not, there is a need for a coherent approach in the European Union on the issue if we are to have any hope of creating a common defence or foreign policy in future.

If we are to protect jobs at home—I hope that it is not suggested that the economy is in such a parlous state after 15 years of Conservative rule that we desperately need to keep the arms industry flourishing—we must be realistic and accept that the end of the cold war surely means a diminution in the demand for arms. Therefore, we should, as the Clinton Administration have done in the United States, do much more to encourage our own arms industries to diversify into other sectors.

A new Indonesian human rights commission was appointed by the Indonesian Government, and I met its members only two weeks ago. It is a good step forward, but it is a terrible regime. The Amnesty International report included some disturbing quotations in its 126 pages. After the massacre of 270 people in East Timor in November 1991, it quotes General Mantiri as saying: We don't regret anything. What happened was quite proper … They were opposing us, demonstrating, even yelling things against the government. To me that is identical with rebellion, so that is why we took firm action … I don't think there's anything strange in that. Are we saying that we are so hard up that we have to sell arms to a country which takes that view of its own population?

When we sell arms to capricious regimes, we find that they come back to haunt us. We had the recent case of Dr. Mahathir of Malaysia who suddenly announced one morning, because he did not like a report in The Sunday Times, that he would not do any future business with Britain. Far more worrying are the commitments that we have entered into in the past through our export credits guarantee provisions.

In 1993, Britain was the fourth-largest seller of arms. The World Development Movement, which I congratulate on having raised the court case on the Pergau dam, has revealed that arms sales receive more Government support than other export sectors. Almost 80 per cent. of British arms sales go to third-world countries. The Government have increasingly boosted defence exports in the past decade. In 1980–81, the year after the Conservatives came to office, defence exports took 6.5 per cent. of all export credits. That has risen to 48 per cent. last year. That is an extraordinary expansion.

When things break down, as in the case of Iraq, what happens? Since the Gulf war, British taxpayers have had to bail out the banks and the companies who were involved in arms sales to Iraq to the tune of £652 million because the Iraqi Government have defaulted on paying debts; so the taxpayer has a right to question the sense of relying too much on the arms industry as part of our economic activity.

Mr. Alan Clark said on the radio the other day that we should not worry about the nature of regimes and that selling arms was good business for Britain. It was all the old argument: "If we do not do it, someone else will." The Minister for Export Trade followed him on the programme and described him as a relic of empire. But at least Mr. Clark's view is refreshing, open and honest. I find that the Government's policy on the arms trade is wholly confused and sometimes duplicitous.

We welcome the references in the Gracious Speech to progress in the containment of nuclear weaponry, but it is a sobering thought that, since the end of the cold war, no one has been killed by nuclear weapons but hundreds of thousands of people have been killed or maimed around the world by conventional weaponry of one type or another, including landmines.

I believe that good governance, like charity, begins at home. I hope that during the rest of his time in office—however long that might be—the Foreign Secretary, who enjoys a considerable reputation not only in Britain but around the world, will use his efforts and Britain's unique position as a member of the Commonwealth, of the European Union and NATO to promote good governance as a major part of British foreign policy.

5.12 pm

Mr. David Howell (Guildford)

I am glad to follow the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel). His interesting remarks, particularly on weapons proliferation, reinforce my view that the Foreign Affairs Select Committee is right to invest a great deal of time and effort in a study of weapons of mass destruction and their proliferation. It hopes to report to the House and contribute to the debate on which the right hon. Gentleman commented.

Although the hon. Member for Livingston (Mr. Cook) is not here, I welcome his arrival in foreign affairs debates. He has a very sharp mind and possibly a sharp tongue, too. I hope that we shall hear more comments from him. I enjoyed a certain amount of what he said, although I differ from him on some of the points that he made in opening. I know that it is early days for him in foreign affairs, but he seems to think that the world is divided into blocs. I beg him to get rid of that illusion. Of course, the politicians like to talk about the blocs of the European Union, the North American Free Trade Agreement, Asia and so on, but the hon. Gentleman will find as he travels round that all the forces of international finance, trade and investment are working immensely rapidly the other way.

The fine constructions of politicians about different blocs and how they will line up and trade with each other are being increasingly marginalised by the enormous interpenetration of trade, investment and, above all, capital. That makes nonsense of a regional concept and even of a regional financial concept of Europe. I shall come to that in a moment. The hon. Gentleman will learn that and see that globalisation has happened far faster than the bloc-makers and bloc-analysts imagine. That is yesterday's analysis of the world, not tomorrow's.

I am glad that foreign affairs has been promoted to Thursday in the debates on the Address. It used to be a Friday subject. That is good news. I hope that it is a recognition of the fact that foreign policy is not a separate, slightly eccentric category which ill-informed opinion pollsters put at the bottom of their list. When they find that they get fewer ticks for it, they conclude that foreign policy is of little interest compared with health, education, welfare and domestic issues. That does not reflect the reality, which perhaps the promotion of today's debate and certainly the Gracious Speech reflect, that the foreign policy context is beginning to condition everything. It conditions the most intimate domestic aspects of our lives, jobs and financial affairs. That needs to be taken into account by political leaders when they explain how they intend to face the problems of the future.

I listened yesterday to the new leader of the Labour party. He began with a good speech. For those of us who have been here a long time, it contained one or two distinctly Wilsonian phrases. It brought back memories of the Wilsonian generalities about what the Labour party would do in this situation or that. There was a lot of stuff about the need for safe communities, good schools, lower crime rates and the rest. Join the club. We all want those things. They make fine additions to the peroration of a speech, but they are not policy and they do not take account of the wider international context which the new Labour party leader must begin to bring into his thinking and his speeches.

Yesterday the Leader of the Opposition talked about a burst of growth. I should say perhaps more robustly than it has been said so far that that is not so this time. Much of the debate has not recognised what is happening to the British economy now. I am not all that proud of what is happening, in the sense that it should have happened before. For 30 years politicians, some of whom are in the Chamber at this moment, have made speeches in which they wished for sustained, inflation-free, export-led, investment-led growth in the British economy, the emergence of the pound as a strong currency, lower unemployment, higher productivity and so on. All those things are now occurring.

I have to pinch myself when I hear some of the spotlessly non-partisan analyses that come from objective quarters. The performance of the British economy is described as a sustained, not a transient performance and one that is delivering remarkable results and a perky export performance. Apparently even the Government's deficit is now falling.

Many of the gurus are writing reports in which the word "surprised" occurs a great deal. That means that they forecast different things more along the lines of the forecasts of the hon. Members who speak for the Opposition. They said that it would all be low growth, high inflation, bad exports and rising unemployment. The gurus are all surprised that it has turned out the other way.

We are now delivering an economic performance that I wish we had achieved in the 1960s and 1970s. We had some export growth at times after various devaluations, but it all rotted away and evaporated in higher costs, lower productivity, strikes and all sorts of social difficulties. This time that is not happening. We have a highly responsible trade union movement. We have virtually no strikes. There are occasionally one or two, but they are very few.

Productivity is soaring and investment is pouring into the country to the point at which, as my right hon. Friend the Prime Minister said yesterday, we are taking 40 per cent. or possibly closer to 50 per cent. of the entire inward investment into Europe from countries in Asia and the United States. That is the reality of the international scene and the way in which the international economy is treating the British economy. That must be taken into account. One cannot simply ignore it and rant away about how terrible everything is, say that we must have more social spending here, there and everywhere and ask why the Government do not do it. That is an unrealistic stance. I hope that a little more realism will appear in the speeches of the Leader of the Opposition as he develops his style.

Mr. William Ross (Londonderry, East)

The right hon. Gentleman described a very happy view of the British economy. To what aspects of Government policy, especially financial and economic policy, does he ascribe that happy turn of events?

Mr. Howell

The hon. Gentleman is tempting me. I shall certainly not pretend that Government policy in one country is totally responsible for all sorts of conditions, which as I explained are influenced by the global context. Nevertheless, the Government's present management of public finances is extremely prudent. They are creating the right monetary climate. We would all like short-term interest rates to be lower, but they are being managed with great skill, prudence and concern for the right monetary climate. The Government's deficit is falling and we are beginning to reap the benefits—years afterwards, as they always come much too slowly—of some of the labour market and social policy reforms of the past decade.

Mercifully, we have not become entangled in the outdated, overcentralised and uniform social overheads that are making investment in continental Europe extremely unattractive. We have taken a much more modern stance and we have not centralised our social provision in the way that the Opposition Front Bench team wants, for some reason that I do not understand.

Those improvements are to the credit of the Government, business men and others. On this island and in Northern Ireland, they are beginning to deliver an economic performance that politicians have been waffling on about for 30 years but have never managed to turn into a reality. Now it is happening.

Mr. Budgen

I entirely agree with my right hon. Friend, who has listed a persuasive catalogue of the Government's triumphs, all of which are true. Does he not think that he should mention 16 September 1992?

Mr. Howell

I did not mention the date, but I mentioned the event. Perhaps my hon. Friend did not hear. I mentioned devaluations, or at any rate adjustments to the exchange rate, which have played their part. I do not dispute that for a moment. The asperity of his question is a little unjustified. I am well aware of all those things. Perhaps that one incident had some effect, but it is not the entire reason why our present position is so very good.

A much wider issue is overshadowing the European Union debate. It lies behind whether we should subscribe to the social chapter and whether we should be able to deliver rising consumption, higher living standards and so forth in Europe. As my right hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten) said in an excellent speech—I agreed with about 95 per cent. of it—that issue is the rising power and competitiveness of the dynamic Asian economies. They are proceeding at such a pace that those people who think that we have dealt with the Japanese challenge and that they are over the hill anyway are living in cloud cuckoo land. We are about to be confronted by a rising economic and competitive power—a power based on high technology and quality—and, what is more, a rising political power, which is already reflected in international institutions and will make anything that has gone before look mild. Far from arguing about which benefits should be enhanced, which social standards improved and which areas of consumption increased, policy makers in London and the rest of the Union should be preparing people for the fact that the name of the game is not benefits and improvement, but survival. Europe is confronting a problem that it has never before faced. It is a challenge to the lifestyle, values and intellectual hegemony of western European philosophical superiority, which we have never confronted before and for which most European electorates and most political debates, including this one, are completely unprepared.

Mr. Patten

I agree with my right hon. Friend's analysis, which was more elegant than my attempt to portray the threat presented by the tiger economies of the far east. Does he agree that it is because those economies want low non-labour costs that they are becoming so productive? It is because they are jumping over our technology to new technologies in a way that we could not have imagined. Most of all, it is because they are not obsessed with internal harmonisation mechanisms. For example, there is no search for a single currency in south-east Asia. They are looking outwards and progressively towards the realities of the economic world.

Mr. Howell

Asia is not a bloc. When those countries come together, as they did outside Jakarta recently, it is to call for free trade and not for blocism of any kind. Some of the other qualities that they are developing sound suspiciously like those qualities that we thought were a European monopoly—civic values, which my right hon. Friend mentioned, hard work, loyalty to the family, commitment to high savings, a total commitment to children's education both day and night and all the other values that one associates with the Protestant ethic, as well as a reluctance to move towards greater consumption. They have those values and they are beginning to deliver fantastic economic performances.

Let us consider some of the facts. By 2025, the gross national product of the east Asian powers will be the same as that of the European Union and the North Atlantic trade bloc combined. Throughout the recession, the national products of countries in eastern, central and parts of western. Asia have been growing at more than 6 per cent. The export opportunities are vast. A fairly small economy such as Malaysia already imports more from the United States than the whole of eastern Europe and Russia. That is just the beginning. There will be a vast range of import potential for those countries. The Asian countries will not merely make products for export to us with their lower labour costs. They will provide vast import potential—huge new markets that we must be agile enough to grasp.

The challenge will require a total change in our attitude to what is attainable and where we put our resources. When I visited Bombay recently I was impressed when major entrepreneurs told me that they intended to develop the highest quality steel products and steel alloys for export to world markets. They will do so at a cost that will be 25 per cent., at the most, of that of the cheapest equivalent steels produced in the European Union.

I do not know how we will cope with that competition and I do not think that anyone is prepared for it. We talk as if our steel industry were fine, but it is not. It is about to be challenged by competition of a type that we will have the greatest difficulty in meeting.

One must judge the debate and the Gracious Speech against that background —the new realism about our needs in Europe and how on earth we can maintain or increase our competitiveness, rather than pile more benefits and costs upon ourselves. The speech by the Leader of the Opposition came out as yesterday's message. His concern was a centralised standard of social provision that would not even be laid down at national level but in Brussels. On such sensitive issues one would think that one would argue that social care and rules should be crafted as closely as possible to the shop floor and the people concerned. The idea that they should be crafted in Brussels and their support ever-enlarged seems totally inappropriate. It does not fit into the new context that candid political leaders should be explaining to their supporters.

The real European debate is how to increase our competitiveness, take the best from other cultures and see what we can learn from them. I mean the Confucian and Islamic cultures—especially the former, which is part of the culture that is providing the framework for some of the most successful economies on earth. I am not saying that we need to copy the Chinese or Indonesians on human rights; that would be crazy. But we need to take some of their values, just as the Japanese a century or more ago decided not to copy the west, but to take the best of our values and techniques and apply them and graft them on to their own culture. We need to do the reverse with equal vigour. If we go on in the mean time preaching our own European superiority and reacting to threats by putting up more protectionist barriers, we are all doomed. There will be constant failure and a decline in our living standards.

I would apply the same strictures about irrelevance to my hon. Friends who are getting worked up again about the increased contributions to the European budget. The position is different from that which prevailed at the time of the Maastricht treaty debate. I must confess—this may be a shock and a horror to some—that I felt that the cause of the Maastricht rebels in questioning the rush to political and monetary union which was embodied in the Maastricht treaty had some very commendable parts to it. I did not follow it myself, and I voted with the Government. But there was, and remains, an extremely valid argument that elements of that treaty were, in the words of my hon. Friend the Member for Worcestershire, South (Mr. Spicer) in his excellent book, "A Treaty Too Far".

But to use the same sort of language and thought in saying that the additional expenditure on the European Union budget requires the same degree of indignation is getting things badly out of proportion. If the anti-Maastrichteers want to concentrate on doing some useful unravelling of the bad side of Maastricht or halting federalist impulses, they should look at other aspects of the Edinburgh package. For instance, they could look at the fact that, unfortunately, we allowed half our aid programme to slide into the hands of international and multilateral funds; about 40 per cent. of the aid programme has gone to the European Community. That needs a certain amount of examination and I am glad that the Foreign Affairs Committee is about to put before the House a detailed analysis of some of the consequences of that. There is a cause for those concerned to fight.

Let us turn our minds, as others have suggested, to the agenda for the 1996 IGC. Let us make sure that we make an effective input to the so-called reflection group which began in the summer. We should propose arrangements for reforming the Commission and the Court of Justice, and for making subsidiarity a real political process. That means bringing political decisions to the House of Commons about what the Commission may be brewing up and turning into regulations before those things are dumped on our heads.

Let us develop the links with the European Parliament—which we are always talking about vaguely—into specific links which would enable the House to learn much earlier about the policy seeds and bulbs which will grow into the directives and regulations that cause so much dismay later. We are always saying that the European Parliament does not tell us. We scrutinise the legislation, but by then it is too late. We must get into these matters much earlier. That would be a far more useful diversion of energy for some of the much-vaunted rebels than rushing to the media every five minutes, telling them of the terrible things they are going to do.

I apply the same strictures to another line of thought that has developed in the European debate—that it is all hopeless and that we have been defeated before we start. The view is, of course, shared by extreme enthusiasts of a federal Europe, who say that there will be a German-French axis and a federal fix, and if we do not join immediately, we are doomed; and the extreme anti-Europeans, who are certain that there will be a Franco-German axis, that we are out of it and defeated, that we are not winning the argument and that we should cut our losses and get out of it altogether. There is a diagnostic alliance between the two wings which I believe to be completely wrong and defeatist.

We would do much better to develop confidently—now that we are Europe's most successful economy—our view of how the European agenda should unfold after 1996. If we do that, we will find that we have a wide range of allies in all the other countries of the European Union; including new members such as the former European Free Trade Area counties, the would-be members from the Visegrad countries and others. That requires vigour and confidence in the development of our view of Europe. I am glad that my right hon. Friend the Prime Minister has shown that, and I would like other Government Members and everyone concerned with the development of our policy in Europe to show it as well.

By the same tokens, and against the background of my recognition of the power of Asia, some of the ideas which right hon. and hon. Members are floating about beefing up the Atlantic community—my right hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten) mentioned that—are, if I may say so, a little out of date. If one sits in Washington, or west of Washington, one is halfway into the Asian world, and one can recognise the enormous, dominating and increasing power of Asian investment, trade, standards, quality and design in 1,001 ways. I am not just talking about Japan, but about the old and new tigers as well.

The Atlantic community is of interest in developing NATO and I am glad to see that the United States is beginning to talk about expanding NATO and is not just sitting on its thumbs on the matter. My right hon. and learned Friend the Secretary of State for Defence, who will reply to the debate tonight, will no doubt have something to say on that, and there are ways in which we can strengthen, rather than weaken, transatlantic security arrangements. Interpreting the misunderstandings over Bosnia as a great rift between America and Europe is an absurd exaggeration, and I am sure that the matter can be carried forward.

The idea that there is an Atlantic community beyond security is too narrow, and we must concentrate on what we must do to develop further, as this country is doing with great success, our links with the great Asian economies which will dominate during the next 20, 30 or 40 years. It is a matter of great pride to me that this country is carving out a unique foreign policy with Japan. We have built a closeness of identity and understanding in all sorts of areas. Those areas may not appear in the script. They may not fit in with the view of blocs, or with the view of the right hon. Member for Tweeddale, Ettrick and Lauderdale that we must give priority to Europe, or with the idea of an Atlantic community. They happen to fit into the reality, and they are of vast benefit to this country, as well as to Japan.

The reality which we all face is not the marginal one of European budget contributions or whether we have a social charter. The reality is that the Asian challenge of competitiveness will overshadow everything. Our choice is either to give up and go for protection—Sir James Goldsmith is inclined to do that, and certain policy makers of influence in Europe are longing to put up the protectionist shutters—or to embrace the challenge and learn from the best of different cultures which, hitherto, we regarded with some patronage and a smiling superiority. We now see to our surprise that they can deliver up economic and industrial success, technology, learning and quality on a scale which we never dreamed about.

We had better get our skates on and understand how those cultures work and what we can take from them to prepare ourselves for the years of struggle ahead to remain competitive and to maintain even what we have in the way of a standard of living.

5.37 pm

Mr. Robert N. Wareing (Liverpool, West Derby)

I agree with the right hon. Member for Guildford (Mr. Howell) that we should not look at the world in terms of blocks. May I remind him that my hon. Friend the Member for Livingston (Mr. Cook) emphasised the fact that the future of Britain cannot be outside Europe and the European Community?

Some of us held views contrary to that in the past. Many of us have changed our views in the intervening 20 years, and particularly in the past 15 years, because much of Britain's manufacturing base has been decimated despite the fact that resources are there. North sea oil revenues—£124 billion of them—were available for investment, but they have been allowed to be whittled away by the Tory Government since their election in 1979. We might ask ourselves what the Germans or French would have done with those revenues. Whereas, 20 years ago, it was just conceivable that Britain might be the offshore Japan of Europe and go it alone, those days are long gone. We must accept that we must make our way in the world as part of the European Union.

That does not mean, of course, that we should accept every institution of which Britain is a member, for example NATO. It was a child of the cold war. At that time many of us looked forward to the day when the Warsaw pact and NATO folded because it was no longer necessary to maintain those warring alliances. The Warsaw pact has gone, but the Gracious Speech still refers to NATO playing a wider role in protecting stability throughout Europe. I must warn that I believe that NATO could be a source of instability in Europe if we seek to enlarge it in line with an enlarged European Union. We want that union to be enlarged by eventual membership of Scandinavian and eastern European countries, and even the Baltic states. If we were to propagate the view, however, that we wanted eastern European countries such as Hungary, Poland and Czechoslovakia—and perhaps Finland—to be members of NATO, that would be met with a swift reaction from Russia. We might then find ourselves back in the days of the cold war. For that reason it is important to develop the role of the Conference on Security and Co-operation in Europe. The summit at Budapest should be used to give the CSCE more power and influence in international relations. At least Russia is party to the CSCE; similarly its participation in Partnership for Peace is extremely welcome.

With the end of the cold war relationships have changed. The United States, for example, recently decided to defy a United Nations resolution by lifting its arms embargo against the warring factions in Bosnia. Although the Foreign Secretary does not want us to depart from the pan-Atlantic relationship within which we have worked since the second world war, I advise caution.

In common with many of my hon. Friends, I welcomed the election of President Clinton, but I must confess that now I am not so sure. I saw the wonderful work done by the American forces who were sent in to Somalia by President Bush. They saved people in Baidoua, Belet Yuen and other townships from starvation by getting food to them. Those troops carried out a highly successful operation in most dangerous circumstances, but then President Clinton decided that helicopter gunships were the answer to President Aidid. I look to Europe and not to those across the Atlantic to determine future British foreign policy.

One of the greatest dangers that lies ahead of us is the rise of Muslim fundamentalism, which is already apparent in Egypt and Algeria. In a decade from now, middle eastern countries, should they be ruled by rogue leaders, could launch missiles against this country, if they so wished. For that good reason it is important that we should achieve a common foreign and security policy not only with our present partners in the European Union but with those other countries that we hope will join it. We must also work with Russia, which is vital to the future of European security.

Security is not built on military alliances. We must ask ourselves why we have wars in places such as Rwanda. They are caused by poverty, disease and strife within communities. We must, similarly, guard against a rise of nationalist forces in Russia and eastern European countries. How do such forces become powerful? They are created by the divisions that arise in societies which throw their all behind the god of the market.

Whenever I meet visitors from Russia and eastern Europe, or go to those countries, I always warn people against a mad rush from the extremes of highly centralised, planned economies, such as that which existed under bureaucratic control in the former Soviet Union, to extreme Thatcherite market economies. I know that Conservative Members would not agree with my advice, but I always say to those people, "For God's sake, don't throw the baby out with the bath water." I remind them that not everything that existed in the former Soviet Union was a disaster. In 1956, for example, a White Paper was published—it prompted some discussion in the House—which showed that adult further education and university education was available to far more people in the Soviet Union and in the United States than in Britain.

Because of the loss of welfare provision and mass unemployment in east Germany, the recent elections in Germany were not only marked by gains made by the SPD—I was pleased about that—but by gains made by the PDS in the eastern Lander. For the same reason, parties which consist of former members of the Communist parties are coming into office in Lithuania, Poland and Hungary. I hope that those former Communist members have learnt from their mistakes, just as I hope that Conservative Members have learnt from the mistakes that they made during the Thatcherite period—a period that some of us still doubt has come to an end.

The Foreign Secretary referred to the Baltic states and their eventual membership of the European Union. I hope that that day is not far away, but we must remember that that will mean that Russians will live inside the European Union. It is therefore important to insist that when those countries apply for membership, their record on human rights for minorities in their countries should be absolutely without blemish. The Latvian Government, for example, must be told not to discriminate against the large Russian minority within their country. For example, a person who speaks Latvian fluently and who considers himself Latvian, not Russian, is still discriminated against and is denied certain rights because he served at one time in the Soviet army. It is that type of problem that leads to conflict, just as it did in the former Yugoslavia. 'The fact that we recognised Croatia, which was discriminating against its large Serb population not just in Krajina or the borderlands but in Zagreb itself, is the reason why there is now a war in Bosnia.

Although ethnic cleansing has by no means been all one-sided, our media should consider taking a more even-handed approach to the former Yugoslavia. A fortnight or so ago, the news was full of the offensive launched by the Muslim forces in Bosnia-Herzegovina, central Bosnia and around Bihac. It went almost without comment or criticism in the western media, which simply said that the Muslims were trying to get by military means what the Bosnian Serbs had refused to give them by not signing the contact group's plan. But the United Nations' resolution does not call for military action to reinforce the contact group's plan. Today, however, reports have appeared in our newspapers on the Serb counter offensive around Bihac, and President Izetbegovic who, a few weeks ago, was launching his offensive and gloating about how he occupied more territory inside Bosnia, is calling on the UN to take action. We should tell him that there will be no military action.

The Government have been right—I hope that no deals will be done in the future—to maintain their opposition to lifting the arms embargo, as the Americans have. For God's sake, let them not be persuaded, as they were by Herr Genscher on the recognition of Croatia, to lift the arms embargo. The humanitarian effort would undoubtedly come to a standstill if there were a large-scale influx of heavy armoury, as has been suggested, for the Muslim effort in Bosnia-Herzegovina. The Government have made it clear, and they should maintain their position clearly in the future, that our contingent in UNPROFOR will be withdrawn if the arms embargo is completely lifted.

I welcome the fact that some sanctions have been lifted against Yugoslavia—that is to say, Serbian Montenegro—because it must be recognised that there are more than 200,000 refugees from Bosnia and Croatia, and they are not all Serbs. Anyone who visits refugee camps, as I have, in former Yugoslavia will see Muslims being tended by Serbs. It is not true to say that, in the Serbian-controlled part of Bosnia, there are no Muslims, and that Muslims are not living easily with their fellow Serbs. A degree of civilisation exists within an otherwise uncivilised part of the world.

Human rights is the most important issue in terms of our international policies. The rights of minorities, wherever they may be, should be put at the forefront. I agree entirely with the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) on the arms trade. It is no use the Foreign Secretary telling the House that if we do not supply arms, somebody else will. It is no use him saying that the Opposition do not want to maintain the jobs of the workers whom we represent. Of course we do, but those workers would agree that that does not justify putting arms into the hands of murderous dictators. After all, the same argument could have been used in the early 1930s, when the Foreign Secretary of the day might have said that Herr Hitler was trying to build up the German economy and that Germany had suffered many disadvantages after the treaty of Versailles, so we shall provide him with some of our machine tools to get his factories going. There is no justification for selling arms to regimes such as those in Indonesia. There was no justification for selling arms to the Iraqi regime, which later used them against our constituents who were there with our military forces.

The whole of our foreign policy should be aimed at creating a better spirit of humanity so that, when somebody is tortured in Pinochet's Chile, and when whole families are murdered in Suharto's East Timor, it affects us equally. It is sometimes said that man is not an island—

Mr. Phil Gallie (Ayr)

I am interested in the hon. Gentleman's words when he looks back with sound knowledge at regimes such as those in Iraq and Indonesia and makes judgments on the sale of arms. Will he look forward and name the regimes—perhaps Saudi Arabia and others—to which we should not sell arms in the future? It is easy to make retrospective judgments, but when the Government are making decisions, they must consider jobs and look at current events rather than at what happened in the past.

Mr. Wareing

What the hon. Gentleman has in mind is the fact that Saudi Arabia is the source of our oil supplies, which should make a difference. I am sorry, but that should make no difference.

Mr. Gallie

No, that was not what I had in mind. May I explain to the hon. Gentleman? It is all right to look back and say that we should not have supplied arms to those regimes. Will the hon. Gentleman look into the future and, given different democratic processes and change in Governments, try to determine which regimes should not be sold arms in the future?

Mr. Wareing

I hope that any British Government worth their salt would try to persuade even our "commercial friends" that democracy is the right way forward. I do not excuse the rule by sheikdorns in the middle east. Those countries, too, should come under pressure. It is all very well to say that they produce important raw materials for our industries, but they need customers. If collective action were taken through the United Nations, as the right hon. Member for Tweeddale, Ettrick and Lauderdale suggested, no customers would be willing to trade with dictatorial, autocratic regimes that torture their populations and threaten the lives of people in other countries. That is the criterion on which we should proceed.

Someone said to my hon. Friend the Member for Livingston (Mr. Cook) earlier, "Ah, but a Labour Government did so." May I say at the outset that I do not excuse any former Labour Government for their mistakes. Before I came to the House in the 1960s, there was an argument about whether we should maintain a naval base at Simonstown and supply aircraft to the South African regime. We should not have done. We were wrong to do so. Sometimes parties must admit that, yes, they made mistakes. When Labour Governments sold arms to South Africa or to any other dictatorial regime, it was a mistake, and it must not happen again. I am sure that, after the next general election, when a Labour Government will further a progressive socialist foreign policy, in the European Community, that will be one of the mistakes that will not be repeated.

5.59 pm

Mr. Cyril D. Townsend (Bexleyheath)

It is a pleasure to follow the hon. Member for Liverpool, West Derby (Mr. Wareing), especially when he speaks about the former Yugoslavia, because the House appreciates his considerable knowledge of the scene there: he has visited the country frequently, and he has many interesting things to tell us.

I was not quite so happy to hear the hon. Gentleman's opinions about the arms trade, but I shall not take that one up. He asked where the proceeds of North sea oil have gone, and it is worth reminding him of the large chunks of the United States that are now in the hands of English companies, partly as a result of North sea oil.

It is also a privilege to be allowed to take part in this debate on the Gracious Speech about foreign affairs and defence, and one has to start with a self-denying ordinance. There are a hundred and one fascinating topics to pursue. I want to say something about the United Nations, and something—you will not be surprised to hear, Madam Deputy Speaker—about the middle east. However, I shall begin with Europe, because currently the media spotlight is on our European future, partly as a result of the great rebellion—which I think is now dissipated.

I am delighted that the new Minister for Europe, my hon. Friend the Member for Boothferry (Mr. Davis), is here to hear my brief words on the topic. I hope that the Government will help to popularise the European Union, because I believe that the lack of public support for what the Government are trying to achieve puts the brakes on to some extent.

The European Union can help. We are scandalised by the fraud that has been disclosed. I welcome the suggestion that a country that has grossly abused the system should be cut off from European Union aid. I wonder what the Government's position on that proposal may be.

Mr. Budgen

Will my hon. Friend give way?

Mr. Townsend

May I proceed?

Secondly, the European Union obviously must avoid some of the nonsenses that the media delight in picking up, be they bent bananas or harmonising the noise of lawn mowers. They drive our constituents nuts—quite rightly. My hon. Friend will not be surprised to learn that, in the urban constituency of Bexleyheath—we got rid of our last cow just before I arrived on the scene—my constituents are maddened by the huge subsidies that go into the agricultural system in this country and many others.

The tabloid newspapers look at Europe through the wrong end of the telescope. I am described in one of the parliamentary reference books as a Euro-idealist, whatever that may mean, but, yes, there is an element of idealism in the concept of the Community that we are trying to build up.

Let me put it this way. My grandfather was in the Navy for four years during the first world war; my father was in the Army for five years during the second world war. Both those wars began in Europe, and they came about as a result of the great antagonism between France and Germany. Now we have France and Germany inside the Union, haggling away about the minutiae of European Union daily detail, and that is splendid. Let no one minimise or misjudge the magnitude of what Europeans have been able to achieve in western Europe. It is a success story.

The problem is that too many countries are trying to join too soon, before they are ready. That makes life difficult. We shall have to change the structures of the Community at the next intergovernmental conference, and I welcome the proposal that we should drop one of our Commissioners. We shall react to change the structure of the Community to deal with the genuine problems of success.

I hope that the Secretary of State has a moment to listen, although I confess that he has heard my opinions in private many times. I support the ideas that Sir Leon Brittan and Lord Carrington have put forward over the years. We simply cannot continue to draw a line between defence and the European Union. Times are moving on. We must build up a European dimension to our defence policy.

At the moment, the Foreign Secretary can talk about European security, but he is not allowed to talk about European defence. How can one have a rational policy for European industries if one totally excludes the defence industries, which are an important part of the whole?

I should like the Government to be more positive about involving the European Union in defence. One of the by-products of the recent, very unfortunate, move by the United States in relation to Bosnia may be that it will draw attention to that argument.

I shall now briefly discuss the United Nations. I happen to be the Conservative representative on the committee that is trying to decide how we should celebrate the 50th anniversary of the United Nations. I assure the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel), who, incidentally, I welcomed to Hong Kong in 1965 as a Government official in Hong Kong, that that committee is determined not to be complacent, not simply to sit back and say, "How well we have done". On the contrary, we are only too well aware that the United Nations must advance to tackle the new problems that were mentioned earlier.

One aspect, curiously, has not been mentioned—the increase in the number of the permanent members of the Security Council of the United Nations, the P5. I am proud of the fact that it was Britain that called a special summit meeting a few years ago, to consider the future of the United Nations, just after Dr. Boutros Boutros-Ghali had been appointed, and following, thank God, the end of the cold war, which had paralysed the United Nations.

When the Prime Minister made a statement in the House after that successful summit, he said, in reply to a question by me, that he saw no reason to change the number of members who had permanent seats on the Security Council. While we have been away for the summer, the Foreign Secretary has said that the United Kingdom now would welcome Japan and Germany as permanent members of the Security Council.

I am not criticising the Government. What has changed is that Germany has now sorted out its constitutional problems and, I hope, will start helping UN peacekeeping operations around the world—that help is sorely needed—and Japan has committed troops, first in Cambodia on a small scale, and secondly, more recently, in Rwanda.

The Germans are right to resist the call to put their troops into Bosnia. I am sure that the hon. Member for West Derby is only too well aware of how they treated the Serbs in the last world war. However, it would be good to have some German aeroplanes to take part in enforcing the no-fly zone over former Yugoslavia.

Mr. Wareing

rose—

Mr. McWilliam

rose—

Mr. Townsend

I give way to the hon. Member for Blaydon (Mr. McWilliam).

Mr. McWilliam

German aircrew and aircraft are policing the no-fly zone in E3 sentry aircraft.

Mr. Townsend

I am informed that they have not yet committed any of their fighters, but no doubt the experts can put us right about that.

I hope also that the Germans might play a part in Macedonia, and relieve some of the United States troops there.

Mr. Wareing

Will the hon. Gentleman give way?

Mr. Townsend

May I continue, if the hon. Gentleman does not mind?

Mr. Wareing

I simply wish to make it clear that there are German aircraft in the former Yugoslavia, but they are providing essential supplies, flying from Zagreb to Sarajevo.

Mr. Townsend

I am specifically referring to the shortage of fighter aircraft to enforce the no-fly zone over Bosnia.

I hope that the Germans will play a big role in UN peacekeeping. However, I think that there is a danger that, if the P5 turn into P6, P7, P8 or whatever, the Security Council may become unwieldy and unmanageable. God knows, it is hard enough for the Foreign Secretary to obtain agreement over Iraq or Bosnia at present.

We all enormously welcome the cautious progress being made in the middle east. I gather that the Secretary of State, who has recently been there, will make further comments on that this evening. I particularly welcome the comparatively recent move between Israel and Jordan—about time, too.

There is an appalling tendency for our newspapers to suggest that all is now well, and we can turn our gaze elsewhere. That is quite untrue. The Syrian front will be a difficult one for the Israeli Government. Yitzhak Rabin encouraged the settlers to move there, and now he must try to persuade them that Israel is to abandon the entire Golan heights. I hope that the Secretary of State will make it absolutely clear that no halfway measures will be acceptable to the United Kingdom.

The other day I came across a wonderful quote—it must be 20 years old now—by the late Lord Caradon: To imagine that security comes from repression, grabbing and holding territory, from creeping colonisation in Arab lands or from a concrete encirclement in Jerusalem, from domination by forts and outposts, is a most dangerous deception. He continued: every schoolboy knows that forts in enemy territory are not a guarantee of security, they are a guarantee of insecurity, an invitation to resistance, harassment and attack. I have two observations to make about south Lebanon. I find it distasteful that, within a few days of Yitzhak Rabin and Chairman Arafat being awarded the Nobel peace prize, certain Shi'a villages in southern Lebanon should be shelled in retaliation against the activities of Hamas in the occupied territories and Israel. Those shells killed innocent Lebanese civilians. The chances of tinting a member of Hezbollah are few and far between.

I wish to draw attention to the horrors of a detention centre camp called Khiam in Israeli-occupied Lebanon. I am told that, since 1985, that camp has held 230 Lebanese Shi'a citizens. There is a dispute between the south Lebanese army—the Israeli surrogate force in that part of the world—and the Israeli defence force over who is responsible for that camp.

Believe it or not, the individuals in that camp are not allowed visits from relatives and the International Red Cross or Red Crescent are not allowed to see them. That is scandalous—I am told that a Foreign Office Minister has raised the matter with the Israeli authorities. When he winds up today's debate, will my right hon. and learned Friend the Secretary of State for Defence give an assurance that the British Government will not allow that matter to rest?

Gaza should concern us all. Support for Hamas is on the increase. We must remember that it was the Israelis who helped to build up Hamas as a means of countering the influence of the Palestine Liberation Organisation. As long as we ignore the Palestinian problem, or put it on the back burner as Yitzhak Rabin has been trying to do, the more support will flow towards Hamas.

The British Government are playing a useful role and supporting the Palestine police. But Chairman Arafat—who has unfortunately adopted an all too autocratic style in Gaza—needs the help of the international community now. It does not take much imagination to see how desperately wrong things could go if jobs are not created in Gaza and the occupied territories. Individual Palestinians who dream about a Palestinian state must be able to see that the sewerage system is beginning to work, jobs are coming and there is some prosperity.

I am a strong supporter of British foreign policy. We are in a unique position as a member of the North Atlantic Treaty Organisation, the European Union, the Western European Union, the Commonwealth and the G7 countries. But that means that we must have an active and constructive foreign policy. We normally do, but this is no moment to sit back on our laurels.

We are privileged to be served by probably the best diplomatic service in the world—a phrase given to me by a United States diplomat in London. He said, "I cannot understand how it is that I read in your papers, day after day, scandalous references to your diplomats, when we are all jealous of their linguistic abilities, traditions and skills." We are lucky that our diplomatic Rolls-Royce is driven by the Foreign Secretary, whose reputation is growing ever greater in the international community.

6.15 pm

Mr. John McWilliam (Blaydon)

I am privileged to participate in the debate and to follow the hon. Member for Bexleyheath (Mr. Townsend), with whom I had the honour of sharing a desk room many years ago—they were happy days.

I wish to take up the comments of my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) about former Yugoslavia. He was right to say that, if the then Federal Republic of Germany had not dashed in desperately to recognise Croatia long before any countries in former Yugoslavia should have been afforded recognition, we would not be in the sorry state that we are now.

But the fact that we are in our current state leads me to the remarks of the hon. Member for Bexleyheath, who suggested that Germany should play a more active peacekeeping role around the world. It should, but it is not practical to employ in a peacekeeping role German soldiers or Luftwaffe aircraft in an area which they once occupied and in which they had 40 divisions.

I, too, have travelled to Yugoslavia, and I know how local people feel. I know that such action would do more harm than good. The Luftwaffe is doing a sterling job in flying transport aircraft and E3 Sentry aircraft that help us to police the no-fly zone. It picks up those aircraft that are breaking through the no-fly zone and directs the fighters to them.

I take issue with the Foreign Secretary when he tries to dismiss the American change of policy in Bosnia as merely changing the orders of two ships. That is to misstate what has happened. Once again, for domestic political reasons, America has decided to break with the rest of us. The snag is that we have British soldiers on the ground, up front in Yugoslavia. Those soldiers would be at risk if the change of policy provoked any escalation in the fighting.

Our troops are carrying out a splendid job for one reason only—to ensure that relief reaches the civilian population in the forward areas in Bosnia. That is their only task; they are not trying to police the area or to impose a truce. They are performing their task supremely well. They would be unable to do so were it not for the superb work of the Royal Engineers in opening up tracks and emergency roads to allow the convoys to get through. I am fortunate enough to have travelled to those regions and to have seen at first hand what is happening.

I wish that people would not be so off-hand in their use of the phrase "ethnic cleansing", which happens on all sides. The phrase does not mean ethnic cleansing: it means that a thug knocks on a door in the middle of the night and tells the inhabitants of the house that they are the wrong religion, and that if they do not move out in the morning, he will burn down their house. If they do not leave, he burns down the house around the people in it. That is not ethnic cleansing; it is xenophobic thuggery, and it should not be tolerated anywhere.

We need to remind America that it is our soldiers who are at risk in Bosnia. Much the same happened during the Gulf war, when, for domestic political reasons, the Americans could not bear to take action against the Iraqi looters and terrorists on the Basra road, so they stopped us going after the Republican Guards armoured battalion.

Had we been able to go after that battalion, 45 Commando might not be sitting on the border guarding Kuwait now. I hope that the Secretary of State for Defence will be able to tell me tonight that my friends in 45 Commando can look forward to spending Christmas at home. It would be tragic if they had to be away, as they are not long back from Northern Ireland.

I am delighted that peace is progressing in Northern Ireland, and delighted too to hear the Secretary of State for Defence say that, if the process continues and we can withdraw troops, we will not consequently reduce infantry numbers, because the infantry are already overstretched. I have a two-week-old niece in Northern Ireland, and some nephews, and I want those children to grow up there with the same freedom and chances that I had. I do not want them to have to put up with what my wife had to face when she was young—the problems that drove her away from Northern Ireland. The only good result of that was that it enabled me to meet her.

We often say that we should not sell arms to tinpot regimes or repressive dictators, but we forget that our defence manufacturing industry is actually part of our defence capability. Without that industry, our capability would be significantly diminished. Incidentally, our defence manufacturers use a great deal of steel to make the things that our soldiers, sailors and airmen need. During the second world war, Lord Haw-Haw said that the Luftwaffe was going to destroy the Derwenthaugh cokeworks which was so essential to our steel industry. In the end, the Luftwaffe never managed it; it took 14 years of Conservative Government to flatten those cokeworks.

I must also condemn the Government for their short-sighted forward ordering policies, which have resulted in the Swan Hunter shipyard being virtually destroyed. It was a shipyard with a proud tradition of building great naval vessels on time and to price—and without defect. All that is lost now.

The same appeared to happen with the FH70 ammunition saga. We decided to give the order for that ammunition to the Germans and the Italians. The Germans discovered that they could not produce it, and passed the order to the Belgians, with the result that, during the Gulf war, we could not obtain 155 mm ammunition from the Belgians, because they were not too sure about the Gulf conflict. That was appalling, but we are in grave danger of making the same mistakes again.

Gordon Foxley, director of munitions procurement at the MOD, has just been convicted of bribery. The Government are trying to recover some money from him. Victor Temple QC, prosecuting, said that the Government were keen to recover the balance of corrupt moneys. The judge, however, said that there was no evidence that the MOD had lost by being supplied with ineffective fuses and ammunition. He said that there was no evidence that Mr. Foxley directed work away from the Royal Ordnance factory—that was one reason why he gave Mr. Foxley a reduced sentence.

The facts do not support that contention. The only reason why the judge had no evidence was that the MOD, for reasons of its own, chose not to present any. The facts of the matter are that the Jurgens fuses that Mr. Foxley persuaded the MOD to purchase instead of Royal Ordnance fuses cost £14.40. The Royal Ordnance fuses cost only £6. The episode meant the loss of a factory at Blackburn and more than 1,000 jobs lost in Royal Ordnance factories, including at mine, Birtley—not to mention the loss of £24 million of taxpayers' money.

The fuses made by Borletti, the other company that bribed Foxley, did not work in rain and were useless in battlefield conditions. The MOD presented no evidence, because it would have been politically uncomfortable to present any. The Government have wittered on at us about the need to introduce foreign competition. There is such a need, but there is no need to do it in this way, by giving in to bribes from foreign companies.

We have lost British jobs and British defence manufacturing capability, simply because of a combination of a corrupt civil servant—fortunately there are very few of them—and a Government policy that found it inconvenient to produce evidence that suggested that British jobs were being lost.

I agree with the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) and with my hon. Friend the Member for Livingston (Mr. Cook) about the need to be careful when we sell arms—we should not just sell them to anyone. We must also be careful to distinguish between commission-influenced peddling and bribes. A healthy defence manufacturing industry cannot be based on either.

There have been some long speeches today, and I do not intend to make one myself. I want to end with a plea which I hope the Defence Secretary will pass on to his right hon. Friend the Foreign Secretary.

I refer to a tragedy that occurred on 19 September 1989, when a UTA airliner went down over the Tenere desert, just north of Chad. On board was a friend of mine, David Middleton. I spoke to his wife just the other night. I have written to the Foreign Office and taken deputations there on behalf of Mrs. Middleton, but since 1989 neither she nor other British dependants have received compensation for their loss.

Mrs. Middleton has not even received her husband's belongings. They were sent on to someone in Canada, and she was tersely told that if she wanted them back she would have to get them herself. She is in Paris tonight. She should have been at a hearing today, but it was cancelled because UTA wanted more information—copies of her marriage certificate and her children's birth certificates. The airline seemed quite happy to recognise who she was several years ago when it sent her husband's remains back for her to dispose of; now the airline is not happy to bring the matter to a conclusion.

I do not think that the Foreign Office is doing enough to help Mrs. Middleton and other British victims of the disaster to obtain their rights. The same applies to other British victims of terrorism. I therefore ask the right hon. and learned Gentleman to press the Foreign Secretary to stop this injustice, to stop the bureaucratic wrangling and to use all his influence with the French Government to say that enough is enough. Why have French victims been compensated while British victims have not?

6.28 pm

Mr. Nicholas Budgen (Wolverhampton, South-West)

It is a pleasure to take part in this debate and to follow the hon. Member for Blaydon (Mr. McWilliam), whose references to Northern Ireland I particularly welcomed. It is little short of scandalous that so few right hon. and hon. Members take a detailed interest in Northern Ireland.

It is interesting to observe that the Labour party has changed its Front-Bench spokesman on Northern Ireand, and is moving away from its aggressively nationalist posture. It is perhaps too much to hope that one of the great parties in the House will openly support the Union, but it is certain that the Labour party is moving towards a more friendly attitude to it. I have no doubt that the Unionists, who were once our allies but who often now are unfortunately our enemies, will have noted the important change in the Labour party's view of Northern Ireland.

The Government gave a frank exposition to those of us who might have doubts about the European Communities (Finance) Bill. I have not made up my mind about that Bill. I was aware that, at least in year one, not a great deal of money was involved. Arguably, it was only £75 million, and it seemed necessary and reasonable to listen to the Government's arguments about the matter.

I am grateful to the Prime Minister for raising yesterday the issue of a general election in such a clear way. The last time that issue was raised was at the end of proceedings on the Maastricht legislation. Those of us who had the misfortune to disagree with the Government on the treaty did not have much time to consider the position, and there was no great opportunity for the nation, the newspapers and commentators to consider the grave constitutional issues that were raised by the threat of a general election.

At that time, there was no great certainty that the monarch would have allowed the prorogation of Parliament and a general election. Therefore, we did not really know, and the threat was never really tested. 'The Government are to be congratulated on succeeding in their threat, because everybody knows that threats in respect of Maastricht were justified, and that any threat that comes off is to be applauded, for winners always deserve applause and are always supported in the Conservative party.

There is now a new and helpful situation, in that a threat has been made not just overnight but at an early stage, which gives the Government and commentators an opportunity to investigate the position. Until yesterday, I had not made up my mind about the Bill, but it did not help to be threatened quite so crudely.

The first question that we must consider is whether the monarch has consented to prorogue Parliament if the Bill is not passed. Of course, it is now customary for the Government to give the impression that they are responsible not to the House but for the House. Many of the Prime Minister's observations at the Mansion House gave the impression that he was responsible for the House of Commons. However, an older view—and perhaps, in our unwritten constitution this old view is out of date—is that the Government are responsible to the legislature.

There is now a quite extraordinary new constitutional theory, to the effect that, when the Government have entered into some form of foreign obligation which the House of Commons does not support, a general election must be called. In relation to Maastricht, it was at least arguable that the issue had been raised before a general election. When I tried to raise it in my constituency, I was regarded by the media as an oddity and an eccentric. I understand that it was not generally raised during the general election campaign. However, I shall let that small point pass.

No one can argue that the outcome of the Edinburgh summit has been submitted to the nation. The only place to which an agreement with a foreign organisation can be submitted is this House. When the House is told, "If you disagree with the expenditure of £75 million, there must be a general election," it makes those of us who are Conservatives and Government supporters but who have the misfortune to disagree with extra expenditure in Europe ask, "What is our purpose in this place, and what is the purpose of this place?"

Surely, in the last resort, the House has always been able to say, "We are sorry, but you cannot have the money." That is what Parliament said to Stuart monarchs, and surely we are entitled to say that to the Government. If we say that, surely we cannot be told that it will precipitate an immediate general election.

For example, I agree with my right hon. Friend the Member for Guildford (Mr. Howells) about the current movement of economic policy. Since 16 September 1992, economic policy has been good. We could argue about the odd detail here or there, the small points, but in general the policy has been good, and in the next couple of years that will be recognised. It is infinitely superior to any of the interventionist and high-spending policies of the Opposition.

I do not want to precipitate a general election, but as a Member of Parliament I want to be able to say that I do not wish to see money wasted and spent in Europe. It is disgraceful to threaten the House of Commons in this way so as to deprive us of our rights and emasculate us in our most important role. We argued about the role of the European Community during proceedings on the Maastricht legislation. If, for the sake of argument, we say that we should not have an interventionist industrial policy or whatever, in the last resort the only way to check the extension of federalism is to say that we will not pay for it.

It is said that the alternative to paying the money is to check fraud in Europe. There is nothing new in the reports from the Court of Auditors. Such highly critical reports have been appearing year in and year out for the past 10 years, and every rising junior Minister comes to the Dispatch Box and says, "This is disgraceful. We must do something about it. The Government will be unrelenting in stopping this."

That reads very well and gives great pleasure to the speaker of the words. It is noted by the chaps from the Whips Office, and it goes down very well. But, of course, nothing happens. Not only that, but nothing can happen, because Europe is a half-formed federal structure. As the Prime Minister acknowledged in his exchange with my hon. Friend the Member for Northampton, North (Mr. Marlow), if it became a fully federal structure, we would be even more angry about it.

Let us look at the present structure. The European Community has some limited control over Governments, but no control over individuals. We all know that the Italian Government are certainly shaky. Without being offensive, I can say that, from time to time, they are suspected of being corrupt. It has now been proved in the European Court that the Italian Government made no attempt whatever to enforce the system of milk quotas. The fine imposed upon the Italian Government by the European court was £700 million.

It is a federal structure that we ought to be supporting. Along went the Chancellor of the Exchequer, who, with admirable frankness—I understand his language entirely, because I share both his educational and professional background—shrugged his shoulders and said, "When I was appearing in the Birmingham county court, I always knew that it was better from time to time to take half of what you could get rather than go for the lot." That is all very well in the Birmingham county court when one is appearing for a plaintiff against a bankrupt defendant, but we were dealing with the most appalling example of fraud and evasion of Community rules by a democratically elected Government who we regarded as a suitable ally and partner within the European Community. It is all very well junior Ministers saying that we are going to do this, that and the other, but when the time came for collecting a bit of money and ensuring that a fraud was stopped, the Chancellor of the Exchequer let them off the hook.

There is no control over fraudulent individuals in the Community—nor can there be. Those of us who farm—[HON. MEMBERS: "Oh."] The House may consider me particularly awkward about the Community, so let us assume that there are farmers who love the Community and believe it is the best thing in the world. However, if an Italian Euro-inspector of the ewe subsidy came along and said, "Hey Jock, have you got the right number of ewes?" they would resent it very much indeed. It would be a manifestation of an Euro police force. Of course, that will not happen.

Let us consider the Euro-control of countries. We are not in the same position as the northern states were in relation to the southern states in America. We are not about to send the Army into Milan and say, "Right, you pay the £700 million and don't mess around." It is, I repeat, a half-formed federal structure. The fight against Euro-fraud will always fail. It will always be a very useful subject for rising Ministers to grit their teeth, stick out their chins and look purposeful at the Dispatch Box, while nothing happens.

The only mechanism for preventing expenditure in Europe of which we disapprove is to allow the House of Commons from time to time to say to the Executive, "We are sorry, but we will not pay up." That is surely what an unemasculated House of Commons should be able to do.

I suppose that clever people who think that the House of Commons should be no more than a recruiting ground for the Government and have no powers at all, will be proud and pleased at the way in which we have been so successfully threatened, but it will be a sad day for the Government.

I end with a reminder. I watch with interest what Lady Thatcher says about the European Union, and I can conclude from her publicly stated remarks only that she now regrets that she was responsible for the Single European Act. If she regrets it, it is mainly her own fault, because, contrary to the best traditions of the House, she bashed it through with a guillotine and did not listen to any of the arguments that might have persuaded her that, by her own standards, she was making a serious mistake.

If we emasculate the House because we think it clever to shut up 10 or 15 people who have a different view about funding the Community by threatening them, we should recall that we may see—I hope we do not—a further interventionist move in Europe. We may see a Labour Government who support it, and we may be bound by the constitutional argument that was put forward yesterday, to the effect that a British Government who have entered into an unwise agreement with foreign bodies cannot have that foreign agreement prevented other than at the cost of a general election.

This is an unwise attack upon the House of Commons; it is an unwise attack upon our constitutional rights; and I hope that there is good and sufficient discussion of it over the next weeks, so that the Government may realise what a grave mistake they have made.

6.45 pm

Mr. Tony Worthington (Clydebank and Milngavie)

I shall not follow the same road as the hon. Member for Wolverhampton, South-West (Mr. Budgen) as I want to talk about United Nations peacekeeping forces. We have often been told that there is no place for a UN peacekeeping force in a civil war and that is what we are hearing from the Conservative party.

As we debate the matter tonight, the UN operation in Somalia is being run down in a spirit of failure—as something that has gone badly wrong. That is serious not just for Somalia but for the whole world.

Let us go back two years when, because of the background of clan differences, the United Nations passed a resolution agreeing to military intervention, and then failed to do so until seven months later when 500 lightly armed Pakistani troops landed and were immediately captured. In the new year, we had the CNN-filmed invasion of Somalia by the United States, when 20,000 troops went in. We then saw 20,000 troops being withdrawn with their tails between their legs as the United States discovered that it was rather more difficult than they had expected.

At the moment another 20,000 troops, mainly from the Indian sub-continent, are being withdrawn at great risk to themselves and to the aid workers who are there. There is every sign that the shambles in Somalia will start up again and that there will be warfare between the clans. That need not have occurred. There were better ways to deal with the unrest, but what was needed was prompt and efficient intervention, backed by political will.

The Foreign Secretary mentioned Rwanda as a example of something which had tested the UN to the limits. He was disappointing in that he gave no sign of what he had learnt from Rwanda. Britain was utterly determined not to be involved, yet today the Foreign Secretary boasted about British involvement because, ultimately, 600 British troops became involved. They did a superb job, but are now being withdrawn. Something must have gone wrong when we were seeking not to be involved, but then became involved and boasted about our involvement.

Following the killing of the Rwandan President and Belgian peacekeepers in April, the Security Council cut back the UN presence to 271 troops. We backed that decision, but the world was appalled at the withdrawal from Rwanda and the failure of the UN to operate effectively there. We have witnessed appalling spectacles in a country of 7.2 million people, half of whom have been killed, made refugees or displaced.

On 13 May, the UN Security Council decided that 5,500 troops should be deployed in Rwanda. It is now six months later. On 7 July, Baroness Chalker wrote to Members of Parliament—two months after the decision—saying that it would be a further 10 weeks before those troops would be fully deployed. I was appalled to think that it would take four months to deploy 5,500 troops when thousands upon thousands of people were dying.

Baroness Chalker's extra 10 weeks would have taken the deployment date to 10 September, but it is now 17 November. What has happened to the promised deployment of those 5,500 troops? It is still two battalions short. After six months, an Indian battalion and a Zambian battalion are still to be deployed in Rwanda, yet apparently our troops are being withdrawn. In the strange way of UN peacekeeping forces, a contract between the United Nations and the Brown and Root company to provide logistical support has not yet been finalised.

The problem is not troops—troops are available in the world for peacekeeping operations—but political will and logistical support and command. The Foreign Secretary said nothing about how we would improve that. 'There can never be an effective UN operation anywhere in the world unless that logistical support is provided. Today, the right hon. Gentleman boasted that 565 British troops were deployed in Rwanda. When we last debated the issue in July, our commitment to Rwanda was 50 trucks.

What fills me with apprehension is that the defeated Rwandan army is now reorganising in Zaire and will resurface. It is disturbing that the UN seems to learn nothing from these operations. The French, rightly or wrongly, proved how quickly they could deploy their forces in Rwanda. They said, "We are going in" and they went in within days. In the Gulf over the summer, Saddam Hussein stirred again and there was no problem about logistics. The UN must be equipped to react. We must stop talking about UN reaction unless we mean it. The problem of logistical support must be solved.

Almost three years ago, the UN Secretary-General Boutros Boutros-Ghali highlighted the problem and said that the UN had no stock of logistical equipment. It must place orders with manufacturers so that it can get its army moving. He said that Governments should commit themselves to keeping certain equipment on immediate standby and agree to make airlift and sealift capacity immediately available to the UN.

We must go beyond that to what was called, in "Agenda for Peace", peace enforcement units, which should be immediately available for the UN to deploy. The United Kingdom has to agree that such facilities are available. However, we must go even further beyond that to a UN standing force of people who are recruited to serve the UN and to be available for the UN to deal with issues as they arise. We cannot continue to commit people to peacekeeping forces when it takes seven or eight months for them to be deployed in a constantly deteriorating situation. Over the summer, the Foreign Secretary said that he had put forward some ideas to achieve that. I do not think that he has. The Government have proposed nothing to show how the matter could be dealt with more effectively.

I was disappointed by the right hon. Gentleman's remarks about arms sales. There was no serious tackling of the issue. He often appears to be Olympian and statesmanlike, but on this issue he descended into run-of-the-mill politics, such as saying that we must think about the workers in the British arms factories. If every statesman in the world took the same approach, no progress would be made. It is a serious problem. Unfortunately, Britain has too great an economic dependence on arms sales. The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) referred to figures that show an enormous concentration of export credit guarantee facilities for the expansion of arms sales.

The Foreign Secretary is not credible in his protestations that there are no links between arms sales and British aid. His defence appears to be that he was surprised by the Pergau dam affair—that he would not have made the decision that was made, but that he had to honour commitments given by people before him. He suggested that there was but a brief entanglement of arms sales and aid. I caution the right hon. Gentleman that no one outside the Government is convinced on the Indonesia issue. It is transparent that there has been an expansion of aid to Indonesia at a time when, in all logic, it should have been falling.

I say that because, first, the number of exceedingly poor people in Indonesia has fallen gratifyingly over the past quarter of a century; secondly, Indonesia's access to international private finance markets is not a problem; and thirdly, according to Government policy, good governance should be a consideration—no one could say that the Indonesian Government are anything other than foul in their dealings with East Timor. What other country or part of the world could anyone name where there is a suspicion that a third of the population has been killed during the past 20 years?

Mr. Gallie

I accept some of the hon. Gentleman's comments. However, is he really suggesting that no one outside the Government would accept trade in arms with Indonesia? Is he aware of pressure from British Aerospace, which has a factory in my constituency, and which makes no bones of the fact that the arms trade with Indonesia is important to that company both within the United Kingdom and at Prestwick?

Mr. Worthington

I accept the hon. Gentleman's point, which was made by the Foreign Secretary. What is the logic of the hon. Gentleman's position? It is that he has no moral stance on the sale of arms anywhere in the world. That is not acceptable to the Opposition. The hon. Gentleman would sell arms anywhere, to anyone, at any time. That is not good enough.

The Secretary of State for Defence (Mr. Malcolm Rifkind)

The hon. Gentleman had better be careful when he makes such a claim. Is he aware that the shadow Defence spokesman has publicly supported the sale of arms to Indonesia?

Mr. Worthington

Yes, I have been here throughout the debate and I heard that point being made earlier. I am surprised that the Secretary of State needs to repeat it.

We must consider the issue of arms and aid. It is bad enough selling arms, but to link that with sweeteners and aid is even worse. According to the Secretary of State's own figures, of about 15 major long-term bilateral aid projects funded by the Overseas Development Administration and costing more than £20 million, not one goes to sub-Saharan Africa, not one goes to Africa apart from one to Egypt, but four go to Indonesia. Those are real soft-term loans. Nothing is paid back for a seven-year grace period and the rate is 3.5 per cent. after that. That is a direct linking of arms sales and aid.

The Foreign Secretary has been visibly bruised by Pergau. He is a man with some decency and honour. It is interesting how much he stands out as a light on the Conservative Benches. He has been bruised by, and feels ashamed about, Pergau. The Foreign Secretary should have another quick look and open all eyes about Indonesia and all other countries. It is not possible to say that arms and aid are not linked.

We often get into crises and then ask what we can do. The right hon. Member for Tweeddale, Ettrick and Lauderdale mentioned Kenya, with which we have the closest of links. Some ask what are our links with Rwanda, Somalia or Indonesia, but there can be no doubt that we have strong links with Kenya, not only in terms of exports but much more so in terms of traditional links with people.

The Foreign Secretary has talked about preventive diplomacy. I particularly want to mention Kenya today because President Moi is in the country and I want to express my intense concern about the condition of that country. There is no doubt that President Moi has no commitment to multi-party democracy—rather, it was forced on him by the donors. That has often been admitted. We should be exercising preventive diplomacy in Kenya. Do hon. Members know that about five years ago Britain received 50 applications for refugee status from Kenya, but in the first month of this year we received 800 applications for refugee status? The warning signs are there.

Baroness Thatcher—not Baroness Thatcher, she is a moment or two down the road—Baroness Chalker referred to the importance of good governance.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

That would not be Thatcher.

Mr. Worthington

I promise my hon. Friend that I am about to mention Baroness Thatcher as well. A fortnight ago in Kenya President Moi opened the £9 million Margaret Thatcher library at Moi university, fulfilling a pledge that she gave in 1987. Beware pledges given by Baroness Thatcher because they come back to haunt one. How many pledges did she give? President Moi opened the Thatcher library—

Mr. Ernie Ross (Dundee, West)

One book.

Mr. Worthington

It is funny that my hon. Friend should say that. President Moi immediately launched a nationwide appeal for books because there were none. There has been a collapse of services within Kenya. Should our aid budget be going into major capital projects in the university sector when it is generally agreed that places such as Kenya desperately need primary and secondary education? Those services are collapsing and the ordinary people of Kenya can no longer afford school fees.

More important than that, our aid budget says that it is in favour of good governance, but last year university staff in Kenya went on strike for 10 months because they were not allowed to form a staff union. There is no academic freedom in Kenya. No research can be conducted in Kenya without the approval of the President's office. All senior appointments are made by the Government. Academic standards are falling as funding ceases. The average class size is 500 and there is enormous corruption in that section of the economy. The Government control what is taught and who teaches it.

As the right hon. Member for Tweeddale, Ettrick and Lauderdale said, there is no academic freedom, just as there is no separation of the judicial system from the state system. There is no freedom of association and expression. I was also amazed to find that in Kenya an Opposition Member of Parliament has to have permission to hold any kind of meeting. Such meetings can be stopped by a state functionary. One quote reads: We can no longer meet as academics. When we try to do so we are dispersed by armed police even in the privacy of senior common rooms. What demands are we putting on Kenya with regard to human rights? What does the opening of the Margaret Thatcher library at Moi university by President Moi say about the way in which Britain is propping up a regime that we should not be propping up, when what we should be doing is emphasising academic freedom alongside all the other freedoms that we should be encouraging in Kenya and elsewhere?

It is about time that we got our aid budget on-side with regard to human rights. There is too much going round at the moment about our aid budget being linked with arms sales and repressive regimes. Rather than what it is promoting at the moment, it is about time that we used our aid budget to promote the good and noble in the world.

7.7 pm

Dr. Robert Spink (Castle Point)

I count it a privilege to be able to contribute to the debate on the Loyal Address. It is also a privilege to follow the hon. Member for Clydebank and Milngavie (Mr. Worthington), who spoke with great force on the UN peacekeeping operations and on wider issues. However, I could not say with honesty that I agree with everything that he said.

I shall, with permission, review three areas—first, Northern Ireland from the viewpoint of defence; secondly, the European Union from the viewpoint of foreign policy; thirdly, from the viewpoint of defence and foreign policy, a particular and pressing point of conflict in the world which is important to Britain—Cyprus.

First, on a general note, I congratulate the Government on an excellent Queen's Speech, which could not in any way be called uncontroversial. It outlines a dynamic and ambitious legislative programme, which will build on past successes in the economy, industrial relations, foreign and defence policy, health care and the environment.

The programme will achieve two important objectives. First, it will continue the improvement of the economy's supply side; secondly, it will build on the far-reaching and successful Conservative social reforms in areas such as pensions, removing discrimination against disabled people and caring for the sick and mentally ill and for genuinely vulnerable people. We live in historic times. Who would have thought that Gerry Adams would be here today, in the mother of Parliaments?

The solution to the Northern Ireland problem has eluded all Prime Ministers this century, except, I hope, one. When my right hon. Friend the Prime Minister declared last year that Northern Ireland was to be his top priority, I thought that he had stuck his neck out a little too far. Do not get me wrong: I thought that he was absolutely right, but that he was rather brave. We know that the charge of great bravery is one that politicians do not seek when setting policy.

My right hon. Friend the Prime Minister has made tremendous and historic progress and great credit must go to him personally, above all others. That is not to belittle the important contributions of the hon. Member for Foyle (Mr. Hume), Albert Reynolds and others.

The Downing street declaration, based firmly on principles of democracy and consent, led directly to the IRA ceasefire on 31 August and to the cessation of loyalist paramilitary operations on 13 October. It promises eventually full-blown peace, notwithstanding the current political crisis in Dublin and the Irish Prime Minister's resignation.

One key issue to be resolved in Northern Ireland is the future of paramilitary weapons. I urge the Government to continue to pursue a co-ordinated approach with whoever takes power in Dublin in future, to achieve the removal and decommissioning of guns and explosives. I welcome the proposals to pursue a Northern Ireland Assembly and to produce a joint framework document to promote clear and soundly based relationships between the two peoples and Governments. Most of all, I welcome the fact that the constitutional guarantee remains, and will remain, rock solid.

As my right hon. Friend the Prime Minister told the House yesterday, there are formidable tasks ahead, but each day without violence is another small victory for Northern Ireland. The benefits of peace for the people of Northern Ireland are overwhelming. Right hon. and hon. Members in all parts of the House must wish my right hon. Friend the Prime Minister well in his historic and brave endeavours. All should recognise that his personal strength, quiet determination and foresight have brought about a unique opportunity for lasting peace in Northern Ireland.

As to foreign policy, I ask my right hon. and learned Friend the Secretary of State for Defence to estimate, when he winds up, the impact on the important Anglo-American alliance of the recent US elections. The people of America voted overwhelmingly for conservatism, less government, lower taxes and less state dependency—for individuals to take greater responsibility for themselves and their families. In a nutshell, America voted for greater freedom and for conservatism. I suspect that that will have a significant impact on America's foreign and defence policy and on the Atlantic alliance.

I rely on the old adage that what comes to pass in America one year often comes to pass in Britain a year or two later. Britain commands great influence in the world far beyond that which we might expect, given our country's size, industrial prowess or even military might—although man for man, our armed services are the best in world. We exert that influence because of our unique culture, traditions, history, language, and worldwide recognition of the quality and value of our national institutions.

Britain's special position was not secured and maintained by chance but results from consistent, sound Conservative policy through the 1980s and 1990s, when Labour would have squandered the country's position through nuclear disarmament and other short-sighted and mistaken policies. Labour would have destroyed, or at least threatened, Britain's position as one of the Security Council's five permanent members, through the party's defence, European and international policies.

Britain's special position is good for the world order. It is a positive international force for stability, democracy and the development of free markets which will lead the world from tyranny and poverty. I despair when Britain's position and status in the world are threatened and continually eroded by a short-sighted and self-indulgent media, often led by one of our greatest institutions—the BBC.

The media have done great damage to all our major institutions—the monarchy, Church, judiciary, industry and even Parliament. It is truly among the least corrupt Parliaments in the world, but it is derided and denounced by the media as thoroughly corrupt, which it is not. Right hon. and hon. Members in all parts of the House are honourable, even if some are occasionally foolish and forgetful.

Mr. Peter L. Pike (Burnley)

Despite the hon. Gentleman's remarks about the BBC, does he not agree that the BBC World Service has the finest reputation of any broadcasting service in the world? The hon. Gentleman does the BBC an injustice.

Dr. Spink

I am indebted to the hon. Gentleman, because I entirely agree that the BBC World Service is one element in Britain's special world status—something which we should cherish but which we often undervalue.

By damaging Britain's world standing, the media undermine our foreign policy. They are often led by a Labour party that surpasses other political parties only in its ability to denigrate our nation and institutions. That is one reason why socialists remain unsuitable for government.

At this point, I will cross party political lines and call on the Government to enhance Britain's position and status in the so-called new world order, by taking an early decision to rejoin UNESCO, which would do so much to help world development. The Government should make that positive move, and before the American Government. I ask my right hon. and learned Friend to describe Government policy on UNESCO when he winds up.

As to Britain's position in the European Union, I am pro the European Economic Community. I voted for it. Unlike Mr. Blair and many Opposition Members, I have been consistent.

Mr. Deputy Speaker (Mr. Michael Morris)

Order. The hon. Gentleman should know the rules of the House by now.

Dr. Spink

I am grateful for your advice, Mr. Deputy Speaker. Unlike the right hon. Member for Sedgefield (Mr. Blair) and other Opposition Members, I have been consistent in my view of Europe, which focuses on two fundamental benefits. I do not apologise for restating the fundamentals, because they can become lost in the trivia and minutiae. They are worth restating.

The first great benefit is that Europe has delivered and continues to deliver peace, stability and democracy where they did not exist previously. I would sacrifice almost everything in life before I would sacrifice my three boys on the battlefields of Europe.

The promotion of peace, stability and democracy are benefits of the European Union that are too little explained, understood, celebrated and valued by right hon. and hon. Members.

The second benefit is economic. It is measured in terms not of cost alone but of the cost benefits of our membership of the club of Europe, of improved living standards for all people in society—the poor and the better off, young and old alike—and of jobs for workers.

Our membership of the European Union and our membership fee help to create a more stable Europe which can be a model for, and can influence positively, the stability and development of the wider world. I want that, so I will vote for the European Communities (Finance) Bill. I see relieved expressions among my right hon. Friends on the Government Front Bench. I am sure that my loyalty was never in doubt.

As for the future development of Europe, I seek an enlarged, deregulated, free-trading economic community—one in which rules are applied equally and fairly in each member nation, and in which fraud is policed equally toughly in all.

British Conservatives have played a major and positive role in the development of Europe in recent years. It was our Government who introduced budgetary discipline and fraud policing in the first place. We introduced the common agricultural policy reforms, which must go much further. We introduced the single market and enlargement. Those were British Conservative initiatives of which we can be proud.

My right hon. Friend the Prime Minister rightly recognises that Britain is irrevocably part of Europe and that it should be at the heart of Europe, but it must be a Europe that works, and works well, not a Europe based on the elusive sands of liberal or socialist dogma and ideology. Britain has taken a leading role in setting the European agenda, often saying things that other countries know are right. Quietly, they welcome what we say, but all too often they remain silent and allow us to do the hard work for them. That is as it may be.

We must look now to the 1996 intergovermental conference, to what we can contribute to that conference and to how we can continue our positive contribution to the development of Europe. My right hon. Friend the Prime Minister must focus on key issues, such as how to establish a fairer voting system, how to develop simpler and more transparent legislative procedures, how the Council can exercise more control over the Commission, how to reduce the unwieldy number of Commissioners, particularly as Europe enlarges, and how to pursue budgetary reform, CAP reform and, indeed, the policing of fraud.

I now refer to the vexed matter of Cyprus. I restate Britain's special position as a guarantor of the independence of Cyprus. We are one of the guarantor nations. We also have a special position of one of the five permanent members of the United Nations Security Council.

Mr. Clerides, President of the Republic of Cyprus, held a round of five informal talks with Mr. Denktash, the leader of the Turkish Cypriot community in the northern third of the island of Cyprus. Those talks established beyond doubt two facts: first, that Mr. Denktas espouses and is driven by Turkish policy, not his own; and, secondly, that neither Mr. Denktash nor Turkey currently has the political will required to obtain a solution to the problem of Cyprus. I say "currently", because I hope that the situation will change.

The facts today are plain: both Mr. Denktash and Turkey reject all the Security Council's resolutions, including paragraph 2 of resolution 939, calling for a solution based on a bi-communal, bi-zonal federation with a single indivisible sovereignty. They are adamant in their demand for recognition of separate sovereignties for each federated component unit, and for recognition of a separate sovereignty for the federal state as well. Those are unrealistic goals. They are without international precedents; they are simply delaying tactics—they cannot succeed. Moreover, Turkey and Mr. Denktash are against Cyprus becoming a member of the European Union.

The United Nations Secretary-General's definition of political equality has also been rejected by Turkey and Mr. Denktash, as have the treaties of guarantee and alliance as they concern the guarantors and the unilateral right of intervention. They also reject demilitarisation. Responsibility for the failure to make progress, therefore, lies with Turkey and with the Turkish Cypriot leader, Mr. Denktash. The Security Council should now take specific and pragmatic measures against the side that flouts its resolutions and frustrates the proper and equitable solution of the problem of Cyprus.

Progress can be made only if there is a change of attitude by Turkey on the key issues, in particular on sovereignty, demilitarisation, and the accession of Cyprus to the European Union. Therefore, I end by asking the Government now to consider promoting an international conference to move the issue forward. I ask Her Majesty's Government to do everything possible in the fast-coming talks to establish a timetable for Cyprus's accession to the European Union.

7.26 pm

Mr. William Ross (Londonderry, East)

The hon. Member for Wolverhampton, South-West (Mr. Budgen) made an interesting speech, which was quite in keeping with the views that he and the former hon. Member for his constituency, Mr. Enoch Powell, have often expressed. Whenever I listen to the hon. Member for Wolverhampton, South-West, I think that there must be something in the air in his constituency, of which I fully approve in general terms.

The hon. Member for Wolverhampton, South-West and the hon. Member for Castle Point (Dr. Spink) referred briefly to the situation in the Irish Republic. Of course, that is the only country with which we have a land frontier, so perhaps the House will expect me to speak about the situation there. However, what is happening there is a private grief which those involved should sort out; it is not the business of Members of the House of Commons. We should sympathise and hope that they shortly find a way out of their problems. Perhaps some folk in the Irish Republic now think that the Act of Union was not a totally bad idea. One hopes that, one day, the foolishness of the teens and twenties of this century will be reversed.

The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) and other hon. Members said that we should try to pre-empt violence, and he referred in particular to places such as Rwanda. Although on the surface that seems a good idea, we need to decide whether armed intervention—that is what has been talked about—is needed, how it would be implemented and by whom, whether armed forces should wait until they are invited in, or whether they will have to fight their way in. When one considers the dangers involved in that, one realises that the matter is not as easy, simple or swift as some folk seem to think. Like many good ideas, it founders on the rock of reality.

The hon. Member for Livingston (Mr. Cook) talked about three major trading blocs dominating the world over the next few years. He was corrected to some extent by the right hon. Member for Guildford (Mr. Howell), who drew attention to the various forces which are moving toward international trade, and therefore to far freer associations of trading nations rather than three large fixed blocs. If they ever came into being, they would be mutually antagonistic and would pose grave dangers to world peace. I support those who seek a steadily expanding volume of trade across the board. The general agreement on tariffs and trade is a large step in that direction.

I found the rest of the speech of the right hon. Member for Guildford somewhat depressing. He talked about the great eastern economies which would dominate the world for the next 20 to 30 years. He betrayed a pessimism about his nation which no hon. Member should exhibit. We should encourage our people and do what we can in this place to create a framework that will enable us to flourish and restore our position as far as humanly possible in the world.

In the Gracious Speech, the Government restated, among other things, their objective of a balanced budget. I hope that that will shortly occur, and that we will then move beyond that happy position and once more be able to repay debt, not least that which is piling up from previous years and the current year, and that which will pile up in the next two or three years.

I also listened with care when the right hon. Member for Guildford explained how well the United Kingdom was doing. Regrettably, when I asked him the reasons, he did not seem able to give them. The answer was supplied by the hon. Member for Wolverhampton, South-West, when he referred to the happy events of 16 September 1992. That was the day on which the Government and the Treasury had to come to terms with the reality of fixed exchange rates.

Although there was much breast-beating, and sackcloth and ashes were much in evidence, we have seen the benefits of abandoning fixed exchange rates ever since. The Government were driven by the events of that day to go back to a floating pound. Indeed, the former Chancellor of the Exchequer had to re-create his policy on that day.

From that day to this, there has been a steady move to the happier position which the right hon. Member for Guildford described. He seemed unable to bring himself to say that the desertion of fixed exchange rates and the evils that flow from them led to the present position. Unless and until the House, and especially the Treasury team, understands that, we are in danger of getting back into the difficulties that led to 16 September. Perhaps the Government are moving in that direction.

The economy is steadily improving in a very fine way, as the right hon. Member for Guildford said today, and the Prime Minister said yesterday. In the light of that, the blunt statement that the Government will continue to pursue their firm financial policies is welcome. If we really care about the future of our country, we should all support the Government in those firm policies. However, such firm policies imply a measure of pain from time to time. As we are a member of the European Union, firm financial policies must be applied somewhat more widely than in the United Kingdom alone.

We are told that, out of the total spend of the European Community, anything up to £6 billion disappears in fraudulent exercises. That is a fantastic sum of money. It is a maximum of some 10 per cent. of the total—no one really knows the exact figure. If no one knows what is being lost in fraud, it tells us an awful lot of nasty things about the systems of book-keeping that are being used.

We must improve either the systems of book-keeping or the system by which the cash is dispensed in the first place. Budgetary discipline and elimination of fraud are a vital component of our membership of the EU. Budgetary discipline has been evident only in the sense that it has been so evidently missing.

There was a debate on fraud in the other place on 31 October. Those who have not read it should cast their eye over it. They will find an appalling litany of fraud and corruption and sleazy deals. Some of those sleazy deals reached the point at which the British Government were blackmailed by other members of the Community. For example, the milk quotas of Italy and Spain were increased. Yet Britain is short of milk quota. Our farmers are crying out for more quota. Instead of receiving more, our quota seems to go steadily down. That is a matter to which the Government could profitably direct their attention.

As one speaker in the debate in another place put it bluntly, there appears to be gross negligence in the way in which EC grants are handled. It is more than gross negligence. The system is so complex that it is almost impossible for anyone to understand it even if they want to. Many of the people who benefit from the fraud are not too anxious to find out what is going wrong. The system is complex, because so many different state systems are involved.

The Government spokesman in another place said: The responsibility for detecting and prosecuting fraud remains, nevertheless, with the member states."—[Official Report, House of Lords, 31 October 1994; Vol.558, c. 746.] That may well be so, but I draw it to the attention of the House—if that is necessary—that most of those states are net beneficiaries of EC funds. Who has heard of any Government being hard on their people for plundering a pork barrel that was constantly filled by someone else—in this case, Britain and one or two other nations? Such a system does not lend itself to easy reform. If the facts are as stated in the reports given to the nation in the debate in the other place, the idea that the EU can be corrected by good housekeeping is wide of the mark.

It is a matter of fact and of interest that the same Minister I quoted in another place praised United Kingdom Ministry of Agriculture officials for their work. It is also noteworthy that Britain has a fairly high detection rate. Of course, that may mean that there is a lot of fraud here, but it is more likely to mean that a much higher percentage of fraud was detected in the United Kingdom than in other countries because our systems are efficient. I believe that another reason is that Britain is a net contributor to the pork barrel, so our Government were rather more anxious than others to ensure that fraud was diminished as much as possible.

It is also a fact of life that the same officials and their predecessors have always policed the United Kingdom agricultural schemes. I should have thought that that had a great deal to do with their success. The fraud detection system in Europe has been bad, and it is getting worse. It will deteriorate further as more nations join. Therefore, it is essential that all systems should be improved. Tinkering will not cure the problem. Everyone who has touched on that subject today and in the other place has said exactly the same. If we are to deal with it, we must create a system which devolves more responsibility to national Governments. Perhaps subsidiarity is the buzz word.

National Government would not be tied to economic, bureaucratic EC rules. A block grant system might be used. Spending would he better looked after, as Governments would be spending their own money. If the money did not go to those to whom the economic union had designated it, the internal democratic system in the various states would ensure that it did, so there would be far less fraud.

A harvest is there to be reaped between now and the fulfilment of the Government's commitment to own resources. That change needs to be carried into effect to ensure that this and future Governments of whatever party—that depends on the will of the electorate—are not severely embarrassed over the size of our commitment in the next few years.

7.39 pm

Mr. Christopher Gill (Ludlow)

It is a pleasure to follow such a respected Member of the House as the hon. Member for Londonderry, East (Mr. Ross), who was kind enough to refer in glowing terms to my home town. I was born and bred in Wolverhampton. The hon. Gentleman also referred to my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) and to Enoch Powell. It might interest the hon. Gentleman to know that Wolverhampton's motto is, "Out of darkness cometh light." That might help to explain why he has heard such good sense from my hon. Friend the Member for Wolverhampton, South-West and his predecessor, the right hon. Enoch Powell, on so many occasions.

Dr. Goodson-Wickes

And from you.

Mr. Gill

How kind.

In June, I visited Stockholm and had the opportunity to talk to members of the Swedish Parliament. I asked one for his view of the prospect of Sweden entering the European Union. Without a moment's hesitation he told me, "The political classes are all in favour." That was an exceptionally arrogant remark, as it seemed to leave out of the reckoning the people who elected that man to Parliament.

My hon. Friend the Member for Wolverhampton, South-West spoke well tonight. His was an incisive and challenging speech, which reminded us of an important question that all hon. Members should be asking themselves. He said that we were in great danger of turning the House into a rubber stamp to do the bidding of the Executive. I agree that it seems that no amount of reason, argument, debate or common sense will persuade the Government to allow those considerations to weigh most heavily.

My hon. Friend the Member for Wolverhampton, South-West instanced how the Single European Act and the Maastricht treaty were rammed through the House, in the first instance on a guillotine motion and on the second as a result of a vote of confidence. It is a very bad time for democracy when a measure that does not command the people's wholehearted support is put through the House in such a manner.

I remind hon. Members that, not merely in Sweden but in the other countries that held referendums on the subject, the margin in favour of joining the Union was very slender. Many of us regret the fact that although Ministers support referendums for African countries—now they even support one in part of the United Kingdom—they do not support a national referendum on the most important constitutional issue of my lifetime, and I am old enough to remember the war. It is unfortunate, to say the least, that politicians are prepared to treat the electorate with such apparent indifference.

I think that many of my colleagues privately realise, as I do, that that great endeavour can never be completely successful unless we take the people with us. I am reminded of what the former Member for Wolverhampton, South-West told me a few weeks ago: never forget that in the end the people will win. That is timely advice for my party and the Government. They may feel that so many of the things that they want to do to progress the European adventure can be pushed through the House on a guillotine or a vote of confidence and that there will be no reaction. There will be a reaction. Ultimately, the electorate will have the last laugh.

I hope that the leaders of the Conservative party have seriously calculated the effect on our electoral prospects of pushing the European Communities (Finance) Bill through the House on a vote of confidence, in the same way as they pushed through the Maastricht treaty and the Single European Act.

On the financial implications of the Bill, the Gracious Speech states: Legislation will be introduced to give force to the changes in the European Communities' system of own resources". Barely five lines later, we read: Fiscal policy will continue to be set to bring the budget deficit back towards balance". There appears to be a contradiction in terms. If the priority is to bring the budget into balance, surely one must consider carefully before committing oneself to additional expenditure.

My hon. Friend the Member for Wolverhampton, South-West said that perhaps hon. Members did not think that £75 million was a huge sum. It seems that when it involves something that the Government want to do, it is never a huge sum; when it involves something that our constituents or we Back Benchers want, it is always a huge sum.

Surely we must ask ourselves whether we can afford that Bill. Estimates of how much it will cost vary and I shall quote only one figure. At present, the British taxpayer is paying the equivalent of 3.4p on income tax to Europe. By 1999, it will have risen to 5.4p in the pound. That may be fine for some of our constituents, but I represent Ludlow in the county of Shropshire, which ranks 11th lowest in the country for male wages and second lowest for female wages. When we talk of spending another £75 million on the European budget, I am mindful of the fact that that money will have to be found from our constituents. Everyone pays. There is no way for any of our constituents to avoid paying. Perhaps some of them avoid paying income tax because of their low earnings, but everyone will pay because no one can avoid indirect taxation. The fact remains that everyone in the land will have to contribute in one form or another to that extra sum of money for the European budget.

The benefits are advertised by those who are in favour of European political and monetary union. I hear people from our own country saying how wonderful it is that European money is going to pay for good things in their constituencies. I am always at pains to remind those people that those good things in their constituencies are not being paid for by anybody other than themselves.

In point of fact, were that money not sent to Brussels in the first place, there would be more money in the pot in the United Kingdom to pay for those good things. As that money progresses from Whitehall to Brussels—and as we then go cap in hand to bring it back again—it has become a smaller sum because of the administration and the bureaucracy.

Dr. Spink

Is not my hon. Friend making an over-simplistic argument? Is not our general prosperity dependent on our membership of the European Union? Are not there wider benefits to be derived from our membership?

Mr. Gill

That is an old canard. People who wish to oppose my point of view portray me as being against Europe. I am not against it; I am favour of the Common Market as are the majority of my constituents. When they voted in 1975, the majority of my constituents and, I submit, the majority of the constituents of my hon. Friend the Member for Castle Point (Dr. Spink) voted in favour of the Common Market. But they did not vote for—and they were told at the time that they would not get—political and monetary union. That is what I, and some colleagues, find difficult to forget.

Dr. Spink

rose—

Mr. Gill

I know that my hon. Friend is tempting me to engage in further arguments, and I should like to give him that opportunity.

Mr. Budgen

rose—

Mr. Gill

I see that another of my hon. Friends wishes to intervene.

Mr. Budgen

Will my hon. Friend comment on the humiliating position of Hong Kong in relation to China and the surrounding countries? I am sure that he would agree that it is plain that Hong Kong is about to become bankrupt. It is not part of a political union with surrounding countries, it does not have monetary union and it does not have its laws made by surrounding countries. Is not it plain that disaster is about to descend on Hong Kong?

Mr. Gill

My hon. Friend tempts me to talk about the highly successful economies around the world which have no affiliation with any other country and which are not in federal structures. Those include stand-alone economies such as Japan and, as my hon. Friend mentioned, Hong Kong and many others.

I meet industrialists from this country who say, "Just give us the tools and we will do the job." They say that they do not need to be in a political or monetary union with other countries in Europe, and that they just want to get on with earning a living in the world, which they are capable of doing.

Of course, it is an historical fact that we have earned more of our wealth in other parts of the world than in Europe. People who are opposed to my view say that we do 60 per cent. of our business in Europe. That may be true, but we are only doing that business with 6 per cent. of the world's population. I do not know of any business man who would think that that was a satisfactory customer profile. Any business man worth his salt would think, "If I am only doing 60 per cent. of my business with 6 per cent. of the world's population, have I spread my risk far enough or cast my net wide enough? Are there not other markets which I could attack?" He would be absolutely right to say that.

My hon. Friend's intervention reminds me that he—more than anybody in the House—knows what I previously did for a living. While I am talking about the financing of the European Community and questioning whether we can afford it, I shall tell the House about something of which I became aware only a few weeks ago. It is a project funded by the European Union to investigate ham automated monitoring systems, and to carry out this HAMS project, as it is called, the European Community will finance the university of the West of England to the tune of £500,000.

Four generations of my family have made ham in Wolverhampton. My father and I were quite content to produce hams to the best of our abilities by using skills which were handed down from generation to generation. If a ham was substandard, it would be returned by the customer and we accepted that we might offend or lose that customer. That is what I still believe in, and it is what my son is still practising. I do not think that it is any part of the European taxpayer's duty or responsibility to give £500,000 of taxpayers' money to the university of the West of England to do something that is purely and exclusively a function of the commercial sector.

Mr. Budgen

My hon. Friend and I are old men, and we are among the last of the people who did national service—my hon. Friend served in the Navy. To help many Conservative Members, will he explain how it is that we are preventing a third European war by giving subsidies to undercut him in the ham trade?

Mr. Gill

My hon. Friend poses a challenging question, and I shall do my best to answer him in a moment.

Mr. Deputy Speaker

Order. When the hon. Gentleman does answer, I hope that he will relate it to the Gracious Speech.

Mr. Gill

My remarks are in relation to that part of the Gracious Speech which refers to the European Communities (Finance) Bill, which is to be considered by the House a week on Monday.

My hon. Friend the Member for Wolverhampton, South-West made an incisive and challenging speech. I know, as he knows, that many of the challenges which he laid down in that speech will never be answered, not least because there are no answers which the Government can honestly provide to some of the questions he asked.

That, I am afraid, has been a feature of our debates on Europe. My hon. Friend and others have made the arguments and we have won the arguments, but unfortunately we have too often lost the vote. My hon. Friend and I would be only too pleased to have a vigorous and lively debate, and then conclude that debate by voting on whether the arguments which we advanced were compelling and whether the House accepted them, but that is not to be. We will not decide the matter on the balance or the strengths of the arguments deployed by the likes of my hon. Friend. The argument will be decided by a vote of confidence put forward by the Government, and I regret that very much.

My hon. Friend asked in his intervention how war would be prevented by spending £500,000 on investigating how better to cure hams. My answer is that that £500,000 has been diverted to the university of the West of England for the HAMS project at the expense of the defence budget. I am pleased to see my right hon. and learned Friend the Secretary of State for Defence on the Treasury Bench. He has had the doubtful distinction of having to tell the House about regiments having to be disbanded, about aircraft of the Royal Air Force having to be grounded and about the acceleration of the programme for the disposal of ships.

That is the reality. We are prepared to spend a lot of money for no tangible return, but we are expected to buy the vital defence insurance policy that our country needs to maintain with a smaller and smaller premium each year. I agree with my hon. Friend that that is absurd.

Will all the partners ever be equal in the great endeavour that we are trying to create in Europe? I put it to the House that it is highly unlikely that the partnership will ever be an equal one. There may 12, 16 or even 20 partners, but there will always be a pecking order and inequality among the partners. The reality, whether we care to accept it or not, will be that the country to dominate in the Community will be that which has the biggest stick or the deepest pocket. On present performance, that country, sadly, will not be the United Kingdom. That is why we saw the recent humiliation of our own Commissioner, Sir Leon Brittan, who wanted a high-profile office, but who was severely disappointed because the Germans decided that they would rather give that office to their friends and neighbours, the Dutch.

That decision was quite understandable. The Dutch want to keep on the right side of the Germans, not least because they do a lot of business with Germany, which is the immediate neighbour of their small country. The Dutch consider that the potential that their economy has to offer will be far greater if they keep within the slipstream of the German economy than if they stay outside of it. Therefore, Germany looked after the Dutch and did not look after Britain, thus disappointing Sir Leon.

I worry when I see my country going around almost cap in hand to the Commission and the Council of Ministers to get whatever crumbs it can from their tables. That brings me back to the intervention of my hon. Friend the Member for Wolverhampton, South-West. I agree with him that this country could stand on its own if it wanted to. It is resourceful, inventive and industrious. We have always looked to the world, where we have created so much of our wealth and made so much of our history. We ignore that at our peril.

8.2 pm

Mr. Ernie Ross (Dundee, West)

If the hon. Member for Ludlow (Mr. Gill) does not mind, I will leave Europe for other colleagues to discuss. I am sure that my hon. Friend the Member for Ilford, South (Mr. Gapes) will correct the misconceptions that the hon. Gentleman put forward, should he catch your eye, Mr. Deputy Speaker.

The area that concerns me most is the middle east. The Gracious Speech referred to the Government's continued support for the middle east peace process. Everyone involved in that process is to be congratulated on the success achieved so far. I say "so far", but we have already not only had the initial Madrid conference and the active participation of the Norwegians behind the scenes to bring the Palestinians and the Israelis—they always have been the core of the middle eastern problem—together, but the successful declaration of principles and the signing of an initial peace deal between the Israelis and the Palestinians a year ago in September, on the lawn of the White House.

Since that declaration, we have had further declarations of principles in Cairo and in Washington. It is now time to review the middle east peace process to see exactly where it has reached. Success has been achieved, but on some issues there has been no meeting of minds and on others apparent success has proved false on the ground.

The most recent agreement between Israel and Jordan is welcome. If the Israelis were able to participate in this debate, they would be the first to admit that it was the easiest peace agreement for their country to sign. It involved no major difficulties concerning land, borders or refugees, but nevertheless it is a welcome agreement. We wish everyone who participated in it good will and we hope to play our part in maintaining the agreement.

The outstanding countries with which the Israeli Government must have direct, bilateral agreements are Syria and Lebanon. Anyone who understands the middle east will appreciate that an agreement with Lebanon is unlikely unless and until there is an agreement between Israel and Syria. Judging from the statements made by people on both sides, there appears to be little between Israel and Syria, but no peace deal has been signed. It is worth hon. Members considering why that is so, because the principles involved are similar to those that govern events in other areas that have been discussed today.

President Assad of Syria has made it quite clear that he would offer Israel full peace for full withdrawal. The Israeli Government responded by saying that the depth of the peace would be equal to the depth of the withdrawal. It seems that the two sides are saying the same thing, but there is still a gulf between them. As yet, no hands have been shaken and no accord has been signed. I have sought to discover from both sides the difficulties that lie behind the failure to reach an agreement.

It seems that one of the major problems facing a possible Syrian-Israeli peace agreement is the role of Saddam Hussein and Iraq. Part of the depth of the peace being equal to the depth of the withdrawal relates to the desire of the Israeli Government not only to have a peace deal through which people will meet, but one which leads to a substantial reduction in Syrian military personnel and military equipment. Equally, although Syria wants a peace deal with Israel and wants the Golan Heights back, it is concerned about what Israel may want in return. The Syrians know that when the Israelis talk about the depth of the peace being equal to the depth of the withdrawal, they mean the size of the forces that Syria will need to maintain within its borders.

One need only look at the role of Saddam Hussein in Iraq to understand Syria's problem. Although Saddam Hussein suffered defeats during the Gulf war, he was still able to threaten Kuwait recently. That led to the United Kingdom, the United States and others having to assemble their military forces in Kuwait quickly. That was aimed at deterring Saddam Hussein from taking further action because that would have resulted in action on our part in response, or, if he had not withdrawn, perhaps before he made any further moves. That gives some idea of the Syrians' concerns about the activities of the war machiine that Saddam Hussein still maintains.

Those hon. Members who argue that the sanctions against Iraq should be eased have not taken on board the fact that not only does Saddam Hussein need to meet all the requirements of UN Security Council resolutions and decisions, but he has to make it clear that, despite the huge military forces with which, despite defeats, he is still able to threaten another Arab state, he is willing to enter into dialogue about the future use of his military forces. If we can concentrate on that issue, it might help the Syrians and Israelis to get together and make real peace in that area.

Like the hon. Member for Bexleyheath (Mr. Townsend), I wish to discuss the role of the middle east peace process in relation to the Israeli-Palestine question. Clearly, everyone is happy to see progress towards resolving the bitter conflict in the middle east. But there comes a time when we must step back and consider what has been achieved so far and whether the process has met all the aims and aspirations that both sides and the world community intended and hoped from it.

The promising and necessary economic revival has yet to start in Gaza. The "economic dividend" of peace and human rights has yet to be demonstrated to the Palestinian Gazans. There have certainly been no human rights dividends. Israel continues to expand its settlements in and around Jerusalem and the west bank. It maintains settlements in Gaza, continues to imprison and torture Palestinians, and still carries out summary executions on the streets of the west bank. Those actions and delays at every stage do little to build confidence. The latest delay is on the calling of elections for a Palestine national authority.

Those who visit the west bank and Gaza see a sapping of the Palestine population's morale. They witness a weariness and a draining away of optimism. We have a responsibility to rebuild optimism and show the people concerned that the peace process is important to the Palestinians.

In this debate tonight, we can make it clear that, as high contracting parties to the fourth Geneva convention, we stand foursquare behind our obligations on human rights and international law. The last time the Security Council voted on that subject was on Security Council resolution No. 904, tabled in response to the Hebron massacre. At that time, the United States abstained on the paragraph that referred to the applicability of the fourth Geneva convention and the need to consider measures of international protection throughout the territories occupied by Israel.

It is now reported that the United States is actively pursuing a programme of action, supported by Israel at the General Assembly, in an effort to eliminate contentious resolutions. It is not rational to imagine that undermining an international legal consensus by seeking to remove all mention of those rights from a forum where they should be mentioned under the terms of the UN charter would build confidence in the peace process. Nor does it build confidence when the impression is given that the states that are meant to guarantee those rights, which includes Britain, will step quietly aside and allow them to be overridden, leaving only the balance of power—the old "might is right" rule instead of the rule of law and international principle—to decide matters between the Palestinians and Israelis. It does not build confidence when the impression is given that, ultimately, the peace process in which the Palestinians are now asked to place their trust holds no guarantees that they will realise rights which the international community has for so long and so firmly affirmed.

That is why I am anxious for a reassurance from the Government that Britain, along with its European partners, will continue to uphold the applicability of the fourth Geneva convention to the occupied territories and that Britain will, neither by implication nor omission, give the impression that we are withdrawing support from that long-held position. As everyone in the House knows, if we did so the Palestinians' ability to negotiate successfully in pursuit of their self-determination would be critically undermined.

The BBC World Service broadcast, "Monitor", on 16 November translated a report from the Voice of Palestine radio in Jericho, which said: In accordance with the agreement that was reached during the Palestinian-Israeli higher liaison committee meeting in Cairo at the end of last month, 400 international observers will be deployed in the Gaza Strip in the next few days. Those international observers are a direct result of Security Council resolution No. 904. They are supposed to monitor the activities of the Palestinians and Israelis in the period leading up to the elections in Gaza, Jericho and the west bank. The agreement was signed by Dr. Nabil Sha'th, Minister of Planning and International Co-operation, and Shimon Peres, the Israel Minister of Foreign Affairs. The report continued: the international protection force in the Gaza Strip will be responsible for monitoring the situation and submitting reports to the parties on any violations by the Israeli or Palestinian sides. This force will also work to enhance dialogue in the region. At the last Foreign Affairs Question Time, I specifically asked whether the Foreign and Commonwealth Office would consider carefully European Union participation in any temporary international presence in the west bank and Gaza, if those elections took place. The Palestinians and the international community could only be disappointed in the outcome of the temporary international presence in Hebron, which ended up being protected by the Palestinian people rather than monitoring the Israelis' activities. It became a standing joke that, whenever trouble started, the Palestinians' main job was to protect the temporary international presence.

Although the Israelis and Palestinians have agreed on the presence of those 400 international observers, no discussion has yet taken place with the European Union on our participation, although some members of the European Union are liable to take part. Although a formal invitation has not yet arrived, I hope that an emergency middle east working group will be set up within the European Union so that we can seek to input into those discussions a European Union commitment to support an effective operational mandate for the temporary international presence, including reporting and applying the standards of international humanitarian and human rights law. I hope that the Foreign Office is prepared to take that on board.

I shall not say too much more on the middle east peace process except that it is at a delicate and critical stage. The Minister of State said that he wanted the elections to be successful and take place as quickly as possible. So do the Palestinians, and it is important that the elections take place quickly, if only to give democratic legitimacy to the Palestinian authority on the west bank and in Gaza and Jericho. I hope that the Palestinian elections will take place in an atmosphere that conforms to what we would expect in normal parliamentary elections. People from all parts of the Palestinian community should be allowed to promote their ideas, argue for their manifestos, whatever those might be, and be allowed free movement during the elections. I hope that the elections themselves are successful.

I shall now refer to one or two matters that were mentioned by my hon. and right hon. Friends, and comment on some of the proposals that were made by other hon. Members.

Several right hon. and hon. Members on both sides of the House referred to Indonesia. It is important that we continue to make it clear that, in spite of international condemnation, the Indonesians continue brutally to occupy East Timor. In spite of all the assurances that we have had, everyone else, including Amnesty International, seems to believe that the British Government have got it wrong—the Indonesian authorities are using the British-made Hawk aircraft in attacks against the Timorese people.

It is important that we make it clear to the Government, and to hon. Members who are obviously worried about the impact that the sale of defence equipment might have on their constituents, that we need to separate the legitimate right of a Government to arm themselves to protect themselves, and our right to sell them those arms to be used for the legitimate protection of that country and its borders, from the use of that equipment—if we sell it to them—by that Government against people who are unable to defend themselves, and who are arguing only for self-determination, which was taken away from them by the Indonesians without any discussion with the international community.

If the hon. Member for Ayr (Mr. Gallie) is about to jump up to defend his constituents, may I say to him that I would prefer the workers in Ayr to sell more Jetstream 41 aircraft, and he will certainly have my support in campaigning for, and pushing, that good aircraft as a means of helping people to communicate and move around their countries, rather than the use of equipment that can bring death and destruction to innocent people in different parts of the world.

I shall briefly discuss another country that I mentioned in the previous foreign affairs debate—Cuba. I pay a compliment to the Government. During the United Nations General Assembly's discussion of the US economic embargo, to which the UN General Assembly recently affirmed its opposition, a United Kingdom Minister was due to go to Cuba. We all know the pressure that was put on the Government for that visit not to go ahead, and it is to the credit of the Foreign Secretary, his colleagues and the President of the Board of Trade that that visit went ahead. By all accounts, it was successful, and it is to be hoped that trade will come to this country as a result.

I am worried about the determination of the United States to maintain the embargo against Cuba. It is just plain daft. It is time for the Americans to bury the Bay of Pigs and the missile crisis, which are in the past, and to understand that there is increasing evidence of internal change in Cuba. There is movement towards an internal market and private ownership. There is increased trade with Europe and the far east. The discovery of oil is leading to exploration contracts with Canada. Tourism is increasing.

We should say to the Americans that they should accept that it is time to let Cuba into the real world and that all those things are in the past, and that, if we think that they are wrong, we are more likely to convince the Cubans that they should change policies by trade, tourism and cultural exchanges. The United States should at least consider opening up the democratic processes in Cuba.

I know that you are anxious to make progress, Mr. Deputy Speaker, but I wish to make one last comment, about Turkey. It is important. I know that one of my hon. Friends would have mentioned Turkey, had he managed to catch your eye, but it would be wrong if we did not mention Turkey tonight. The hon. Member for Ludlow (Mr. Gill) referred to the role of Turkey in Cyprus; Turkey continues to cause serious alarm elsewhere in the region.

The arrest and trial of leading political figures from Turkish Kurdistan accused of treason and sponsoring acts of terrorism has done little to improve Turkey's image in the world. Undoubtedly, there is a genuine campaign of terror by separatist Kurds in southern Turkey. However, the response of the Government in imprisoning democratically elected representatives seeking to defend minority rights in Parliament can only create increased tension in the region and international criticism by human rights campaigners.

We should make it clear tonight that we are not prepared to have any form of relationship with a country that is prepared to lock up democratically elected members of Parliament who are simply arguing for the minority rights that they were elected to Parliament to support.

8.25 pm

Dr. Charles Goodson-Wickes (Wimbledon)

I shall follow some of the arguments made by the hon. Member for Dundee, West (Mr. Ross) in my remarks, which will broadly concentrate on those parts of the Gracious Speech that refer to foreign affairs matters.

I doubt that anyone in the House could have expected to witness three remarkable events in the past five years; first, the collapse of the Berlin wall and the Soviet empire, secondly, the disintegration of apartheid followed by democratic elections in South Africa; and, thirdly, major progress in the middle east peace process. What a remarkable trio of events.

The previous situations represented much misery in the aftermath of the second world war, and I hope that they can give us hope, notwithstanding tragic regions of instability around the world.

I welcome, in the Gracious Speech, recognition of the need for the United Nations to enhance its peacekeeping and preventative diplomacy capabilities, but it is difficult to envisage that happening in the absence of a proper military command structure—the North Atlantic Treaty Organisation has often had to do the United Nations' work for it—and in the context of member nations who do not see fit to pay their dues to the UN. I suggest to the House that the best celebration of the 50th anniversary of the United Nations would be for the member nations to take a more positive attitude in those matters, which is a theme that I shall develop on other occasions.

South Africa is a country that I know well, and have visited often. I have lived and worked in hospitals there, and I applaud the courage and personal standing of two remarkable men who made peace possible in that region. President Mandela has received well-deserved praise for an extraordinary life. Perhaps former President de Klerk has not received the recognition that he deserves. I know the verkrampte Afrikaner population well, and know how difficult it was for him to deliver the return of civilisation to South Africa.

I hope that history will also record the United Kingdcm Government's role in influencing change in the years when the Republic was outside the Commonwealth, often in the face of British companies leaving South Africa—I think to their moral shame, because I believe that many of those British companies were a force for good in the region, but they decided that it was a sinking ship and they had better leave it pretty quickly.

During those years, the continuing presence of the Union Flag on the South African flag symbolised this country's continuing moral obligations to that country. I believe that there were several distinguished British diplomats, and I hope that it is not improper to name Sir Robin Renwick as one of those who played an important part in bringing about change for good.

I now turn to Hong Kong. Obviously, the Government have done much to protect the people in that territory until 1997. There has been reference in the debate to a boom at a rate that it is difficult to comprehend in this part of the world. Any loss of confidence could still prejudice that.

I have always doubted the wisdom of tweaking the tail of the Chinese tiger in the interim period as it must be for the ultimate good, both of Hong Kong and China, especially in the era that will follow the death of Mr. Deng, for the two countries to work together. It is all very well to bring about moves to entrench and expand democracy in Hong Kong, but that is all too often misinterpreted by China. I hope that my right hon. Friend the Minister of State and his colleagues will ensure that such misunderstandings do not get out of all proportion in future relationships between Hong Kong and China.

The middle east has been well served by statesmanship after decades of strife. It is hardly surprising that this country should harbour reservations about the past activities of Begin and Arafat. As with Rabin and Sadat in their different eras, peace has finally prevailed. Once again the United Kingdom Government have played their part. To echo the remarks of the hon. Member for Dundee, West (Mr. Ross), I am sure that everyone in the House hopes that Syria will soon come to the table. We know the sensitivity surrounding the Golan Heights. I have an uneasy feeling that it will need American forces to police that area during any transitional peace settlement. It would be much more appropriate if United Nation forces fulfilled that role.

Having welcomed the overdue lifting of the arms embargo on Israel, I lead on to the subject of Indonesia, which has caused a fair amount of friction in the Chamber today. I recognise the moral, legal and practical issues involved in the subject of arms sales. My right hon. Friend the Foreign Secretary touched on that issue earlier today. While it is obviously ludicrous to sell arms to one's enemies, it must be sensible to sell arms to well-established democratic allies and to neutral powers with a genuinely sound democratic and human rights record. There will always be grey areas and I think that Indonesia fits into that category. I should like to declare my interest: I visited that country for three weeks during the summer recess. I was sponsored by the Indonesian Government, but had the blessing of the Foreign and Commonwealth Office.

Indonesia is a strange country. It is not widely known that it is the largest Muslim country in the world. It practises marked religious tolerance and there is virtually no fundamentalist Muslim feeling in the country. It is also the fifth-largest country in the world, with a wider east-west span than the United States. The economy is booming and the standard of living rising in that exciting region of the world, whose influence is ever-increasing.

I accept that I am beginning to sound like an apologist for Indonesia but I shall now say that its human rights record leaves much to be desired—

Mr. Ernie Ross

Hear, hear.

Dr. Goodson-Wickes

I hear someone saying "Hear, hear"—it comes ill from the Opposition to criticise in that way when we have established today that the last Labour Government sold Hawk aircraft to the Indonesian Government barely three years after the annexation of East Timor. I have no idea whether there were signs on the sides of the aircraft stating that they were to be used everywhere except East Timor. The Opposition should think clearly and examine their consciences before criticising the Government 16 years later.

There seems to be a clear recognition, from President Suharto downwards, that mistakes have been made in the past, and positive efforts are being made to improve matters. That impression was reinforced by interviews that we held with numerous non-governmental organisations, the National Commission on Human Rights and outside organisations including the International Red Cross. The delegation accepted the invitation on the condition that it would visit East Timor and would be able to talk freely to representatives of various interests in that territory. Having listened to some of the comments of Opposition Members today, I wonder whether we are talking about the same place.

The island has the most extraordinary history. It was colonised at its western end by the Dutch and at its eastern end by the Portuguese, who were there for four and a half centuries. I have no wish to be offensive about our oldest allies, the Portuguese, but I have some knowledge of their other colonies. I have been to Angola and Mozambique. The precipitate departure of Portugal from those two colonies did not result in a happy outcome. I have been to Angola during the civil war and have seen the hostilities. We have heard today that, once again, the so-called peace treaty has broken down.

At the vaguest hint of civil disturbance in East Timor in 1974, the Portuguese governor could not be seen for dust—he got into his boat and departed. Some 20 years later the Portuguese are apparently lecturing the world on a moral issue and saying that they have a role to play. It seems that they failed their colony at the time when they were most needed. Who is getting all the blame? Indonesia. It is the most extraordinary chain of events.

The journalist Bernard Levin wrote what was perhaps one of the most vitriolic and unbalanced articles that I have ever read in The Times newspaper. It led me to the conclusion that Mr. Bernard Levin never moves from his axis between London W1 and Bayreuth to listen to Wagner. I do not believe that he has ever been anywhere near Indonesia in his life and he has certainly been nowhere near East Timor.

When one wanders round East Timor it is extraordinary to see that, after four and a half centuries of colonisation, there is no evidence of anything left behind by the Portuguese. At least in Angola and Mozambique there was some sort of infrastructure and education system, but in East Timor the Portuguese left a literacy rate of 8 per cent. and no infrastructure—electricity did not arrive until 1962. It is clearly a poor territory.

One hon. Member today questioned whether we should give aid to Indonesia now. If there is any place in Indonesia that needs aid, it is East Timor. Other territories in Indonesia are jealous of the funds being pushed into East Timor to lift it out of poverty—a good and legitimate use of our aid if we ensure that we have the influence to direct it to those parts where it is most needed .

The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) said that the military governor of East Timor had justified what had happened at Dili. The right hon. Gentleman quoted an article by Amnesty International. With respect to the right hon. Gentleman, I think that he is out of date as the general who is commanding there is, I think, General Adang, who makes no effort to defend what happened at that incident. He said that he had disciplined his troops and was looking to the future while bearing in mind the mistakes of the past.

I will not dwell on this subject any more, except to say that whatever he may have said subsequently in newspapers, Bishop Belo told me that he supported special status for the territory and that he was delighted that human rights were improving, that there was more investment and that education had improved markedly.

I should like to end on a slightly more general point. We have heard from the Opposition today outbursts of moral purity about arms sales, so I took the trouble to look at the Labour Government's record. We have already discussed the sale in 1978 of Hawk aircraft to Indonesia. I remind the House that the Labour Government that year also authorised the export of Sea Dart SAM and Blowpipe missiles to Argentina when it was under a military Government widely accused of human rights abuses. Where are the great moral standards there? In 1979 the Labour Government sold tanks to Iran, regardless of what they may have thought about the Iranian regime.

With the benefit of hindsight one can always sound pompous, but at the time one has to make a judgment, bearing in mind the interests of the defence industries in places such as Ayr and my constituency, in which Racal and many other distinguished defence companies are located. They do a marvellous exporting job for this country.

I welcome my right hon. Friend's typically robust, sensible policies as set out in the Gracious Speech. They will ensure that this country continues to be a force for peace in the world.

8.41 pm

Mr. Neil Gerrard (Walthamstow)

I shall confine my remarks to the middle east peace process, to which several hon. Members have already referred. I very much agreed with what was said by my hon. Friend the Member for Dundee, West (Mr. Ross) and by the hon. Member for Bexleyheath (Mr. Townsend). I look forward to hearing what the Minister has to say about the middle east.

I want to discuss Gaza, Jericho, the occupied territories, and the need for our Government and other European Governments to take a more positive line on a number of matters. I refer first to the elections to the Palestinian authority. The Government have said that they want free and fair elections to be called—no one could disagree with that—but what is meant by free and fair elections? It is not just a question of who will be elected and how; it is also a question of what body is to be elected. The problem is that the Israelis say they want a single, small council with both executive and legislative power. The PLO has made it clear that it wants a division: a larger legislative council exercising some oversight of the Executive.

If we are interested in promoting democracy and pluralism, we should be sending a clear message to the Israelis, to the effect that we believe there should be a split—a legislative body which has oversight of the Executive. We should couple that with a message about the need for redeployment of the Israeli forces in the west bank so that the elections can take place.

The other major issue is the financial aid that has been promised and supplied by Britain and other European countries. The money is rightly being channelled to the Palestinian National Authority, but it is obvious that it is still getting through slowly. There were reports yesterday that, of the £450 million promised for this year, only £140 million is likely to get through by the end of the year. Such delays are often explained by demands that there should be accountability and transparency when the aid money is spent. No one would argue against the need for accountability and transparency; clearly aid should be used for the purposes it was intended for. But how far are the demands being made reasonable, and how quickly is it reasonable to expect them to be met?

I was interested to read in The Guardian yesterday the remarks of a senior official of the Israeli Foreign Ministry, Uri Savir, who said that donors should drop their insistence on the creation of a Palestinian tax system and finance immediate projects to clean up the area—refening here to Gaza—and create work. He made the point that if that was not done there was a danger of an erosion of the peace process.

Besides the delays in the money coming through, there are all sorts of other financial pressures. There is chronic unemployment in Gaza, for instance. It is hard to see how Israel believes that that will be alleviated by imposing restrictions on workers from Gaza going to work in Israel. The Israelis have taken the decision to import foreign labour from Thailand in place of workers from Gaza. That hardly sits comfortably with declarations of their desire for economic growth. And without such growth the peace process will certainly be damaged.

A further difficulty is the withdrawal of European and other funds from the non-governmental organisations that have hitherto provided many of the services in the area. Because of the history of the past 27 years of occupation, many key services such as education and health—and agricultural development—have depended on NGOs. About 60 per cent. of primary health care and 50 per cent. of secondary and tertiary health care has depended on NGOs; and they have provided 100 per cent. of pre-school programmes, not to mention a significant number of schools. These are important services, important not only for themselves but for the signals that they send about the values of a society. The NGOs have also been concerned with human rights and many other grass roots organisations in which local people have been involved during the occupation.

There will be enormous difficulties for any Palestinian authority that attempts, quickly and easily, to take over responsibility for all these services. Money will be the biggest problem, given that there is no structure into which to fit such services, and there will not be much time to develop the necessary structure. Moreover, some of the services that the NGOs provide will not necessarily be seen as a focus for Government activity—services for women, human rights organisations and so on.

I believe that restricting and impeding the activities of some of these NGOs could have a detrimental effect on the population. There is evidence that funding is being withdrawn because of the promise of European Union and other money to the PNA. A recent example drawn to my attention concerns the Union of Palestinian Medical Relief Committees. In 1994, 8 million ecu originally destined for NGOs was diverted by the EU to the funding of the Palestinian police. The relief committees were told not to apply directly to the EU—there would be no money forthcoming this year or next. As a result, three health clinics that they run have already been shut and five more are under threat of closure. The clinics are often sited in some of the most disadvantaged and inaccessible areas. The Early Childhood Resource Centre based in Jerusalem is another organisation that has had to cut services. A day care centre in Hebron has closed and 20 per cent. of the staff have gone. It seems that international organisations are interested in funding infrastructures and building institutions, but not so interested in providing operating costs. They also make it clear that NGOs are low on the priority list.

I am not arguing that support for the PNA is not essential: it is, and it is important to build the structures and institutions of government and authority and to make them function. Money to the PNA should not be reduced: quite the contrary, because two things are happening simultaneously. On the surface, responsibility is being transferred to the Palestinian authority and at the same time there are cuts in services such as health and education. Although one is not the cause of the other, they will become associated in people's minds.

In opening the debate on the Gracious Speech, the Prime Minister said that the benefits of peace that people in Northern Ireland are now witnessing would be a powerful disincentive to renewed violence. That comment could apply equally to the middle east peace process. People must see benefits, and if a vacuum is allowed to develop those who step in will be the people who want the peace process to fail.

There is a delicate line to tread and it is not for us to dictate to the Palestinian authority what its policies should be. Perhaps the functions of some NGOs should be taken over, or perhaps some of them will cease to have a useful role. No one argues that there should not be change, but we should be careful not to lose the dynamism, flexibility and creativity that have been developed through some of the NGOs during the years of occupation. Funds through the ODA or the European Union should not be cut before considering the effects and without helping the PNA to assume its responsibilities. Extra money should go to the PNA and it should not be money that has been taken from other organisations.

We support the Palestinian authorities and want them to develop, take on functions, assume responsibilities and determine service delivery and policies. But we must also acknowledge and be prepared to support the independent role of Palestinian human rights groups and Palestinian NGOs. It is not good enough to hand over responsibility on paper to the Palestinian authority, to demand pluralism, accountability and transparency from it and to hold back the means to achieve those ends. If we do not provide the PNA with the means to develop we shall contribute to the foundering of the peace process.

8.52 pm

Mr. Phil Gallie (Ayr)

One of the benefits of being called late is that one has had a chance to hear expert contributions by other hon. Members. At the start of the debate I missed a large part of my right hon. Friend's speech. However, I was fortunate enough to hear his positive and authoritative comments on Northern Ireland and Bosnia. Northern Ireland has been mentioned in the debate and in the media. I have been disappointed by the use of the word ceasefire. I understood that the Downing street agreement sought the abandonment of the bomb and the bullet by terrorists in Northern Ireland. We should not talk to terrorists merely on the basis of a ceasefire, but only if they are totally committed to political dialogue and negotiation on the future of Northern Ireland.

I missed my right hon. Friend's comments on overseas aid and in particular his remarks about Malaysia. This year I was fortunate enough to visit Malaysia with members of the Commonwealth Parliamentary Association. I had last been there some 30 years ago and there has been tremendous development since that time. The changes in Malaysia are almost beyond the comprehension of people who visited that country many years ago.

In recent times the issue of the Pergau dam has come to the fore. It seems that The Sunday Times picked up an old issue and began to replay an old story. Sadly, Opposition Members latched on to it, putting political interests ahead of the national interest. In our discussions in Malaysia we met the Prime Minister, the Foreign Secretary and many others and there was deep resentment about the comments in Britain about the Pergau dam.

When countries such as Malaysia become independent and develop we must allow them to get on with their business in their own way. The Malaysian economy has developed at a rate of some 78 per cent. gross over the past seven or eight years and the country is moving away from third-world status towards developed-world status. That is to be admired, and it must be what overseas aid budgets are about—to allow third-world countries to develop.

Mr. Eric Martlew (Carlisle)

From what the hon. Gentleman says Malaysia has reached such a state of economic development that it does not need aid from this country. Many poor countries should get that aid.

Mr. Gallie

When I went to Malaysia 30 years ago it was certainly a poor country, but over the years it has received assistance and is developing. Perhaps it is now moving out of development status because of its own efforts and the way that it has used overseas aid to help its people and make changes. The time will come when it will be appropriate to cut the aid, but that time was not when the Pergau dam was suggested.

Malaysia recognised that it needed power and that it certainly needed the dam. I recall discussing this matter with the hon. Member for Clydebank and Milngavie (Mr. Worthington), who suggested that Malaysia needed gas turbines. That is an expensive way to provide power. Water power is provided by a renewable resource and it can be projected into the future at low cost. It is the kind of power that countries such as Malaysia need to lift them into developed-world status. I fully approve of the assistance that was given for that project, although by saying that I may be unfashionable.

There is another prospective project in that area, the Bacun project in Sarawak. It is similar to the Pergau project and is high-tech. It will be a 700 or 800-mile undersea cable between Sarawak and mainland Malaysia, and the project will be financed by private capital and will not require overseas aid. It will be to the credit of the Malaysians if they can take that project forward.

Some hon. Members spoke about interference in Kenya through educational involvement. The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) suggested that we should pre-empt happenings in other countries. We cannot encourage the expansion of democracy and freedom in other countries and then pre-empt them and sit on top of them. That was a surprising development in today's debate.

When we discuss overseas aid projects and speak of lack of concern, perhaps we should have some concern for the jobs in Britain that could be affected by overseas aid. I draw the attention of the House to recent developments in my constituency where the hon. Members for Carrick, Cumnock and Doon Valley (Mr. Foulkes), for Cunninghame, North (Mr. Wilson), for Cunninghame, South (Mr. Donohoe), for Kilmarnock and Loudoun (Mr. McKelvey) and I expressed concern to the Foreign Office about the way in which the feedback of overseas aid to Brazil was against the interests of those in my constituency through state assistance to the Brazilian aircraft industry.

When Ministers operate our overseas aid programmes, they should have regard to jobs and benefits for our industries at home while considering the needs of those countries that we wish to develop.

Turning to wider issues in the Gracious Speech, little has been said today about defence. I welcome the top priority given to national security which has been demonstrated amply over 15 years despite the pressures that my right hon. and learned Friend now has in his budget. Unlike previous Secretaries of State for Defence in recent times, it has to be recognised that financial limitations are being applied to defence issues. That has been demonstrated in the excellent paper "Front Line First", where reality has been applied to ensure that our defence systems meet future needs.

I was delighted to hear in the Gracious Speech that the United Kingdom is still intent on maintaining its nuclear deterrent. Whatever we do in this country, nuclear weapons cannot be uninvented. We can, however, stop further development and proliferation and that was an important commitment in the Gracious Speech.

The United Kingdom nuclear deterrent and the resolve shown by previous Conservative Governments and the Government of the USA brought about the fall of the Berlin wall and the collapse of repressive socialist systems in eastern Europe. The nuclear deterrent maintained peace between the major powers for almost 30 years, so we should be grateful that that element was built into the Queen's Speech.

I am delighted that the Labour party appears to be signing on to the principles of retaining our nuclear deterrent, but I look to its party conference and the problems that the new Labour party leader had with the grass roots of the party in dealing with the issue. Had that happened at a Tory party conference and had my right hon. Friend the Prime Minister been threatened and lost votes in conference, the media would have had a field day and would have totally written him off. We had no such problems and I am sure that our Prime Minister will be here for many elections to come, fighting the good fight.

I turn to the Scottish dimension and the situation at Rosyth, where I was pleased to come together on a cross-party basis with hon. Members who wished the Government to retain past commitments to Rosyth dockyard. In part we lost that argument, but we had strange bedfellows in that we lined up with people from nuclear-free authorities who were fighting to contain nuclear submarines at Rosyth. But we won a commitment to Rosyth dockyard continuing surface fleet maintenance. As we look to the coming Session of Parliament, I believe that when the Government consider the defence programme, they will stick to their pledges on that issue and I welcome that.

When we look at "Front Line First", we must also consider services, support and procurement. I have to register some concern at the GEC bid for VSEL. If the Government were to allow GEC to take over VSEL as well as owning Yarrow, they would be putting all their eggs in one basket in respect of warship construction.

There is a suggestion that GEC could put up separate tenders for each of the yards, but I do not believe that any company with ownership of two yards such as these would do so in a competitive way. On that basis, such a move would undermine the Government's commitment to ensuring competition in all aspects of its business and allowing market forces to operate in the defence industry while ensuring that there are options for delivery of such important items as warships from UK yards.

There is a difference between the warship and the aircraft industries. With warships, we rightly have a tendency to buy British. That is both wise and necessary. Therefore, it is important to have more than one warship construction yard in the United Kingdom.

There are other aspects of Britain's future defence requirements, and I think especially of the future large aircraft and the current thinking on the provision of transport aircraft for the military. I accept that the Hercules has done a good job over the past 25 years, but it was designed 30 or 40 years ago and a revamped version would not be the right aircraft to go forward into the next century.

There are other options. I would like to find an aircraft that increases volume both in capacity and weight and which offers greater fuel efficiency and flying range. That is what I would expect of an aircraft going into the year 2000. The European industry should have the opportunity to provide the future large aircraft for the RAF and other military forces throughout the world.

We must not turn our back on giving our aerospace industry the chance to compete. That will help to provide future Ministers with the opportunity to find deals that fit both our budgetary and military requirements. The hon. Member for Dundee, West (Mr. Ross) said that his preference would be for an aircraft such as the Jetstream 41 to be sold worldwide. I agree with him, but remind him that the investment in that aircraft has come from the success of British Aerospace's defence programme. We cannot ignore that fact.

Jetstream 41 has been greatly successful. At the beginning of this week Jetstream at Prestwick won an order from America for 60 aircraft. That is worth a quarter of a billion pounds. It shows great commitment from the management and work force. It recognises the assistance of the Foreign Office and the Department of Trade and Industry in ensuring that other countries do not use unfair subsidies against British industry. It also recognises some of the assistance given by the DTI and the Scottish Office in support of Jetstream during recent years.

Another opportunity for my constituency provided by "Front Line First" is the involvement of the private industry in training pilots for the RAF. The flying college at Prestwick can now bid for that business. It is also intent on picking up business from South Africa. Following the successful visit of my right hon. Friend the Prime Minister to that country, it was suggested that Britain should use its knowledge and experience to benefit the emerging sectors of society in South Africa. I can see no better way of using our expertise in our flying colleges than to train coloured pilots who were not given such training in South Africa in the past.

Like my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes), I, too, welcome the changes in South Africa. We must be grateful to the Government who, during recent years, have turned their back on imposing on South Africa sanctions which would have been particularly damaging to its emerging nation status now.

I should like to believe that the Government's common-sense, realistic and practical policies in foreign affairs and defence matters which are demonstrated in the Gracious Speech will be continued well into the future.

9.10 pm

Mr. Mike Gapes (Ilford, South)

At this stage of the debate it is tempting to follow all kinds of hares and red herrings, but I shall resist doing so and keep to the main point that I want to make.

Five months ago the United States President, speaking to the French National Assembly in Paris, said: America will remain engaged in Europe. The entire transatlantic alliance benefits when we, Europe and America, are both strong and engaged. Those words obviously have less significance and relevance today, following the American decision unilaterally to disengage from the United Nations embargo on arms going into Bosnia.

I am worried about United States foreign policy. The House and the British people should be far more worried about that than about some hysterical argument inside the Conservative party about £200 million. It would be better if just one tenth of the energy expended today were devoted to considering the serious consequences of the Republican victory in the United States elections. To put Jesse Helms in charge of Senate foreign policy is like putting Attila the Hun in charge of child protection. What does that mean for the future of the Atlantic alliance and European policy in relation to the United States?

The Secretary of State for Defence tried to finesse that issue a few days ago by talking about a European-Atlantic partnership. That will not do. At this stage we must recognise that mere words will not solve the problem. Nor will the justifiable anger that the lives of British men and women could be put at risk by the short-sighted policies of the American Administration solve the problem.

To use an American expression, we should not get mad, we should get even. That means that we should recognise the need to build up the co-operation of the European Union countries with regard to foreign and security policy. We should also recognise—I say this as someone who has strongly supported the continuing NATO alliance—that the Western European Union should take on a growing significance.

The Gracious Speech refers to the Western European Union, to NATO and to security in a wide sense. We must be more realistic. The days of American multilateralism may be coming to an end. We will see more and more examples of global unilateralism from the United States. If Britain is to play a serious part, it must realise that, at this moment, Europe does not have the intelligence-gathering satellites or heavy airlift capabilities necessary to make a contribution in the Security Council or to our own continent's security. We depend too much on the world's only remaining super-power. If its foreign policy is driven by domestic considerations, so that it will invade Haiti but do nothing about Angola; by lobbies and pressure groups; or by the need to gather Cuban American votes in Florida by adopting a ridiculous policy towards Cuba, the rest of the world must develop collective security to make the UN an effective body, sometimes without the United States. That means recognising an irreducible minimum of British defence expenditure.

If Britain is to be an effective member of the Security Council, a serious player in the future defence and security of our continent, and to be able to punch above our weight—to use the words of the Foreign Secretary in another context—Britain must have not just diplomatic but defence and security capability.

Defence and security are much more than a matter of hardware or manpower. It is a question of how we engage politically in international processes. The statements in the Gracious Speech about the non-proliferation and nuclear test ban treaties would have much more significance if backed by Government action to make sure that the NPT review conference in 1995 is indefinitely extended. The big sticking point is the objection by a number of developing and third-world countries to the fact that not all nuclear powers have seriously observed their obligations under article 6 of the NPT. They cite in particular Britain and France, with continuing expansion of their strategic arsenals, and the Chinese nuclear tests, which do not follow the pattern of the United States and Russian reduction programmes. A serious commitment by the British Government to engage in negotiations to reduce our strategic nuclear weapons in the near future would achieve far more to ensure the success of the NPT review conference than much that other countries can do.

UN peacekeeping operations require far more serious consideration by the British Government. Reference to that issue has already been made by my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington), who made a serious point about the role of UN peacekeepers in Somalia. Britain did not engage in that operation, presumably because it did not have the means. If Britain is to be a serious permanent member of the Security Council, it must make a much greater commitment to "Agenda for Peace", the policies of Boutros-Ghali and UN peacekeeping operations worldwide. The future of our defence and security depend on our European security and on our international security through the United Nations. I hope that, during the next few years, a Labour Government will be able to put that process to good effect.

9.19 pm

Dr. David Clark (South Shields)

We welcome the opportunity to debate foreign affairs and security. Often, we debate defence against the narrow background of our national defence or of our industrial base. Of course it is right and proper for us to do that, but it is important, every so often and especially when we debate the Gracious Speech, to set our security policy in the context of our foreign policy. In the changed world in which we now live, defence and security mean something rather different. We need now to think of a wider approach to defence. We can afford to stand back a little and think of defence and security in a more philosophical and reflective manner.

The Foreign and Commonwealth Secretary, who spoke in his normal suave, urbane manner, is indeed the acceptable face of the Conservative party today, but even he stretched the point a little when he described the swindlers and fraudsters of the European Community as people who have "over-benefited". That is a rather new, nice word, and it is a tribute to his diplomatic skills that the right hon. Gentleman can think of such a conjunction.

My hon. Friend the Member for Livingston (Mr. Cook) has made many memorable speeches. Today, he maintained his high standard in his new bipartisan approach. His forensic approach will demand a new definition from the Foreign and Commonwealth Secretary. We look forward to the jousting in the years ahead. It will be interesting to see the right hon. Member for Witney (Mr. Hurd) in his role as shadow Foreign and Commonwealth Secretary opposite my hon. Friend.

Eighteen right hon. and hon. Members have taken part in this wide-ranging debate, and many points have been made. Several trends are apparent, and I shall try to develop some ideas.

We are conscious that we are debating security and foreign affairs in a new world order. In the past five years, we have seen dramatic changes, yet the euphoria of those days has long passed. There is now one super-power and it is necessary to help people in the former communist bloc to improve their standards and quality of life and make the transition from the command economy to the market economy.

We always bemoan uncertainty, but certain things can be seen clearly. The first is that the transformation from communism will be long and complex. Certainly, it is not enough for western Governments and communities merely to pay lip service. We must do more to help those countries to transcend the gap. We need also to try to offer stability to the newly emerging democracies.

Those of us in liberal democracies have to meet certain challenges. The market economy, unbridled, is not a liberal democracy. If one is not careful, one creates underclasses, which negate the concept of free democracies. We must avoid that in our country and we must avoid exporting it to newly emerging democracies. If one goes to some of those newly emerging democracies, one can see that while some people do well in the nascent capitalist system, other people do not. They have lost benefits such as subsidised food and housing and proper health care—the up-side of communism, so to speak. We have to take that message on board.

Faced with that position, the west is lacking in leadership. That comes through time and time again and we have seen it this past week. The United States of America has taken a different line from the NATO allies. That has caused all sorts of difficulties. While the Opposition agree with many of the fine words in the Gracious Speech, we sometimes wonder how certain, is the intent of those words.

We are obviously with the Government 100 per cent. in trying to promote a peaceful settlement in the former Yugoslavia. We join the Government in paying tribute to the men and women serving in our forces there I regret very much the American decision of last week. It is not simply a matter, as the Foreign Secretary said, of two ships. There is the issue of intelligence. As the Foreign Secretary knows, the United Nations has no intelligence-gathering facilities of its own. We in Britain rely considerably on American satellite intelligence.

I have just returned from a defence conference in Washington. The view over there is that the Americans have stopped providing us and the United Nations with intelligence. That may be one of the reasons why the Foreign Secretary shares our view—I am sure that he has expressed it clearly to his American counterparts—that the American decision is wrong and, if pursued, could put at risk the troops serving under the United Nations. That point was also made at the conference in Holland earlier this week. We believe that the Government were right to make that point, but we hope that they are making it clearly to the Americans.

I often hear debate in the west about whether NATO has a role. It is interesting that I hear that question only in the west. I do not hear it in the east because people there are certain that NATO has a future. They know that if it had not been for NATO, we would not be in the position that we are now in. They know the effectiveness of NATO. The great challenge for us in the west is how to change NATO. It has to change, yet it must retain its effectiveness.

The Labour Government were instrumental in the formation of NATO. We have always stood by our commitment to it. We regarded it in the past as the linchpin of our defence strategy. We still regard it as such, but it has to change. It has to move with the world. It is a great pity that Her Majesty's Government have not taken the lead in pressing for changes in NATO. There have been movements in the past two weeks. We welcome late conversions, but I feel that the enthusiasm is not there. Surely we should take much more positive steps to bring some of the former eastern European Warsaw pact countries into NATO.

Partnership for Peace, which was seen by many as a stalling process, has turned out to be what we hoped it would be: a first step. I was greatly encouraged that when President Clinton was in Poland he said that it is a question not of "if" NATO is expanded eastward but of "when". We must take that debate a stage further. 'We already have the cells at Mons and at NATO headquarters. Things are beginning to happen. The Governments of the former eastern European countries are more reassured.

We must take the debate a stage further for the following reason. I mentioned the responsibility that we in the west have for nurturing those democracies. I remember being most impressed by something that the late Secretary-General of NATO, Manfred Wõorner said. He told me that he had been a politician in the German Parliament in the 1960s, when democracy was fragile—in the days before the European Union. He felt that one reason why democracy thrived in what was then West Germany was that it was part of the NATO framework. It was the experience of being part of a partnership with other democratic countries.

What was true for western Germany in the late 1950s and 1960s will be true for Poland, Hungary, the Czech Republic and Slovakia in the near future. We must grasp that nettle and set up meetings with those countries—not merely partnership meetings—to discuss how we can take the process a stage further.

We must also be aware that a move is taking place across the Atlantic. The Brown amendment in Congress gives assistance to the Visegrad countries in particular. That is what we should be doing.

We should be seeking the criteria for NATO's expansion. Those must be based not on purely logistical or technical grounds but on geopolitical and philosophical grounds. We should be talking not about what is necessary and good for our defence but about what is good for the security of the west. That is the sort of approach that we need. I fear that many of the technical and military arguments are often used more for procrastination than genuine argument. We urge the Government to pick up that baton and run with it.

My hon. Friend the Member for Ilford, South (Mr. Gapes) mentioned the second reform of NATO, a development that we hope that the Government will pick up and run with. Last week's events—our experiences with the Americans—together with many others, point to the fact that we in Europe must take a much larger responsibility for the security of Europe. For too long, we have been too dependent on the United States. For too long, Europe has had its defence on the cheap, so to speak, and we have allowed the United States to shoulder a financial burden. It has made it clear that it is no longer prepared to do so.

We must start thinking about the defence architecture of Europe so that we can blend it in with NATO and fulfil our Maastricht commitments. We should not be in the rear, we should be in the van and I hope that the Government will accept that.

I have always been sceptical about the Western European Union and many hon. Members share that view. Having said that, we are in a new ball game. We have a new framework within Maastricht and NATO is changing. It is not beyond the ingenuity of man to reshape WEU and make it a meaningful defence arm for Europe.

I suspect that, before too long, we shall also have to consider another organisation that is much derided here in Britain—Eurocorps. France, Germany, Spain, Belgium are already there and I am certain that Poland will be in before long. We need to be in as well. We must do more lateral thinking regarding the shape of the defence architecture of Europe, and we hope that the Government will see through that part of the Queen's Speech.

There are one or two points that I could perhaps raise with the Secretary of State for Defence. I did not see any reference in the Gracious Speech to a Bill on the British reserve forces. The Secretary of State knows that there is a need to change the regulations affecting our reserve forces. In an answer to my hon. Friend the Member for Carlisle (Mr. Martlew), the then Minister of State for the Armed Forces—now the chairman of the Conservative party—said that it was the intention of the Ministry of Defence to enact a change in the legislation next year."—[Official Report, 12 April 1994; Vol. 241, c. 11.] Do the Government intend to bring forward that Bill?

I can tell the Secretary of State that the Opposition would not be averse to such a Bill—we think that it is needed—as long as he does not intend to create a reserve force of unemployed people. There must be protection for people in employment, or the Bill would not be acceptable. If he can give us that assurance, the Secretary of State will have a fair wind with that Bill.

My hon. Friends have emphasised the need for international co-operation, whether on the arms trade, weapons conventions or whatever. We feel strongly that many of those problems can be tackled only through international action. Again, there are omissions in the Gracious Speech in that area. What about the chemical weapons convention? The Secretary of State has made great play of the fact that we were early signatories, but he knows that the convention cannot come into law until 65 states have ratified it. Why have we not ratified the convention?

I understand that it was the Government's intention to ratify the convention. If it needs legislation, I can assure the Secretary of State that he will not find the Opposition standing in the way of the ratification of that convention. It is important that we press ahead with it, and I hope that the fine words that we have heard in the past will come to be enacted.

Again, we know of the Government's original reluctance about a comprehensive test ban treaty. I have referred ad nauseam to the attitudes and words of various Ministers who were saying that it was unwise. We now have a position where the French, Americans and Russians have stated quite clearly that they want a comprehensive test ban treaty. We are caught up in the situation, and we cannot test because the Americans will not let us. Why do we not grasp the nettle, join the other four countries and try to persuade the Chinese to come in with us? We need a comprehensive test ban treaty, and again I can assure the Secretary of State that he will meet with no difficulty from the Opposition.

It is important that some movement is made on the non-proliferation treaty. If we can show the non-proliferation treaty signatories that we are making efforts to try to limit nuclear proliferation, and that we are also not testing our own weapons, that will be a bonus, and help to get more signatories. The Opposition would support any effort to get the non-proliferation treaty enacted, but again I would urge the Government not to escalate further. The Secretary of State for Defence knows that, with our Trident submarines and multiple warheads, there will be a considerable increase in the number of our nuclear warheads. Why does not the Secretary of State join the Labour party? [HoN. MEMBERS: "Hear, hear."] He would be a very welcome member—but perhaps the party is not quite as broad a church as that. Why does he not accept Labour party policy in this respect? He should say that the Government will not escalate the deployment of our Trident submarines and will keep the number of nuclear warheads at the same level as those commissioned for Polaris. That would be a positive step forward.

We live in times of great change. The Government have said many of the right words in the Queen's Speech, but we are worried that they will be found wanting when it comes to enacting them. We plead with the Government that now is the time, especially with vacillation across the Atlantic—although we must retain our links with the United States—for us to play a much greater part in defence policy making in Europe and also to play a greater part in the leadership of the UN.

9.40 pm

The Secretary of State for Defence (Mr. Malcolm Rifkind)

Although I cannot accept the kind invitation of the hon. Member for South Shields (Dr. Clark) to join the Labour party, I would like to pay tribute to him for returning early from the United States for this debate. I believe that he flew overnight in order to take part, and I am sure that the House would wish to acknowledge that recognition of the importance of the occasion.

The hon. Gentleman asked about our intentions with regard to the reserve forces. We intend to publish a draft Bill on the reserve forces for consultation early in the new year. That will enable much important progress to be made in the next few months. I welcome the hon. Gentleman's indication that the Opposition would wish to join us in giving maximum support to the modernisation of the legislation involving the reserve forces, so that they can play an even fuller part in meeting the requirements that the country expects from them.

The hon. Gentleman also made a passing reference to the arms trade. I was rather sad that he did not use this opportunity to clarify the Opposition's policy, because, in a fairly typical contribution from the hon. Member for Livingston (Mr. Cook), typical of the so-called new Labour party, he sought to sound very disapproving of the arms trade, because of the mutterings from those on the Benches behind him, but, at the same time, did not feel able to condemn it. That would have been inappropriate, given the previous observations of the shadow spokesman on defence, the hon. Member for South Shields.

It is right to remind the House how unequivocal the hon. Member for South Shields has been in his support for the arms trade and for arms sales. Last year, in an interview with New Statesman and Society, the hon. Gentleman was asked his views and the article described how He runs down his mental checklist. Sales to allies: no problem. Sales to friendly Governments such as Saudi Arabia: all right. As for British Aerospace's proposed sale of Hawk…"trainers"…to Indonesia, Clark is in favour. South-east Asia needs a stronger security system, he says, and Indonesia must be a part of it The hon. Gentleman offered no qualifications, nor did he specify that his approval was subject to other factors: he just gave an unqualified endorsement of arms sales to Indonesia, as well as to all the other countries about which he was asked.

Dr. David Clark

The Secretary of State may be aware of a letter, sent on 3 November 1993, from the Foreign Secretary to my right hon. Friend the Member for Copeland (Dr. Cunningham). My right hon. Friend had asked the Government what assurances they had been given from Indonesia regarding the Hawk aircraft,. The Secretary of State replied: We have sold Hawk aircraft to Indonesia in the past, and have no evidence that they have been used against the civilian population of East Timor. That was the very question which my hon. Friend the Member for Livingston (Mr. Cook) asked the Foreign Secretary earlier today. Let me repeat it: have the Government still no evidence that the Hawk aircraft have been used against the East Timorese? We would be willing to accept the Government's reassurance on that.

Mr. Rifkind

I did not notice any qualification of that kind in the answers that the hon. Gentleman gave in his interview in New Statesman and Society. We have no evidence of any use of Hawk trainers in East Timor. I plead with the Opposition Front-Bench spokesmen to stop displaying a holier-than-thou attitude towards the issue. I am talking not about the hon. Member for South Shields, but about the hon. Member for Livingston, who, as usual, tried to play both ends against the middle and ended up disappointing every point of view on the spectrum.

Some important speeches have been made during this debate. My hon. Friend the Member for Bexleyheath (Mr. Townsend) asked about the European dimension of defence. The Government strongly believe that, within the crucial framework of NATO, it is sensible and desirable to develop European co-operation. In the areas of collaboration, we have important projects such as the Eurofighter and the common frigate, but there are limits to the amount of co-operation that is possible, because, unlike the United Kingdom, a number of other western European countries still have state-owned industries, monopolies or subsidies in a way that makes competition, on which we insist, more difficult to achieve. But within that framework, we like to make progress in that way.

The hon. Member for Blaydon (Mr. McWilliam) asked me when 45 Commando could hope to return to the United Kingdom. We intend that, once the current exercise with the Americans in Kuwait is complete, it will return to the UK. That will mean some time in December, so it should be home in time for Christmas.

My hon. Friends the Members for Wolverhampton, South-West (Mr. Budgen) and for Ludlow (Mr. Gill) deplored the fact that the Government had indicated the importance that we attach to the European Communities (Finance) Bill, and suggested that that was inconsistent with parliamentary democracy. I must say with all due humility that any Government are entitled to make it clear that they will not continue in office if they cannot get the support of the House of Commons on a measure to which they attach importance.

Likewise, it is for my hon. Friend the Member for Ludlow to decide for himself how he will vote, in the knowledge that, if the Government are defeated, they will not remain in office. For him to say that that is a denial of democracy or of the rights of Members to vote according to their conscience is not a valid or defensible position. I ask him to reconsider his view.

My hon. Friend the Member for Castle Point (Dr. Spink) was correct to emphasise the fundamental achievement of the European Union, which has helped ensure that war between the states of western Europe has become inconceivable. We hope to see that develop across Europe.

A number of hon. Members on both sides of the House have commented on Bosnia. We have made it clear that we were concerned by the American decision, but, as my right hon. Friend the Foreign Secretary said, it is important to emphasise that the practical consequences of the American announcement are extremely modest. That is not just our view, but that of the Military Committee of NATO, which dealt with that matter and concluded that there was no good reason to doubt that the operation in the Adriatic could continue and be expected to be successful in the coming months.

May I emphasise two additional points with regard to that announcement? First, it has become fashionable for people to argue that the United States is losing interest in Europe and that therefore the NATO alliance will wither and disappear. The recent events in relation to Bosnia can hardly be described as a lack of American interest in Bosnia or Europe as a whole. There may be a difference of view about the appropriate policy to pursue, but that shows that the United States remains very interested in Europe's welfare, which we unreservedly welcome.

It is also worth remembering that the decision announced by the United States not to enforce the embargo in the Adriatic came about as a compromise, because the United States Government had reached the same conclusion as the British and other European Governments—that the lifting of the arms embargo was inappropriate at this stage and would do more harm than good. That was also the Bosnian Government's conclusion.

So it was because the American Government declined to accept the view of those in Congress who wanted the embargo to be swept away that Congress chose to try to enforce that relatively minor change with regard to the operational circumstances.

Mr. David Harris (St. Ives)

Has my right hon. and learned Friend noticed that, although the leader of the Liberal Democrat party made a great fuss about Bosnia, not only is he not present, but not a single Liberal Democrat is in the Chamber for the wind-up of this important debate on defence and foreign affairs, on which the Liberal Democrats pretend to place great importance?

Mr. Rifkind

It is indeed strange that the Leader of the Liberal party should have made no attempt even to be present at any time during this important debate, as far as I am aware. His right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) spoke, and told me that, sadly, he was unable to be here for the reply, but that is obviously a matter for him to explain in those circumstances.

Mr. Gapes

rose—

Mr. Rifkind

If the hon. Gentleman will forgive me, I must continue my remarks.

I hope that, in the weeks and months to come, those people in Congress who feel strongly about Bosnia, and who may wish to advocate the lifting of the embargo, try to find an opportunity to visit Bosnia, to see the work that is being done by the United Nations. I believe that that could have an important impact on the way in which they regard the matter.

Very few Congressmen who have expressed strong opinions on those issues have taken the trouble to go to the country, to meet the members of the United Nations force, to see the way that they have saved thousands of lives and are continuing to save thousands of lives, and to examine at first hand what the practical consequences would be if the embargo were to be lifted and if the United Nations were therefore to withdraw. I believe that that is the least that they owe the international community and the people of Bosnia—to go and see for themselves, and to discover whether they continue to hold the same opinion about the lifting of the embargo.

My hon. Friend the Member for Ayr (Mr. Gallie) was kind enough to make complimentary remarks about the defence costs study. We are at present in the process of consulting on many of the proposals, and involving ourselves in their early implementation.

Some of the changes will involve significant reductions in manpower. As a first step, as many as 80 Army officers of the rank of brigadier and colonel will be surplus to our requirements. We are seeking volunteers, as we would normally do in a situation of that type. It is always sad if we lose people of good quality, but that is an important consequence of the changes in the armed forces—to ensure that the maximum resources can be concentrated where they are most required.

Several hon. Members referred to the remarkable contribution that our forces have made in Rwanda. They will return on Sunday or Monday of next week, and they will do so having completed a remarkable job. About 615 people have been there since August. They have, during that period, been involved in vehicle maintenance, and bridge and road reconstruction. They have, as the Foreign Secretary said, cared for about 125,000 casualties, providing medical help where required, and they have been involved in the transport of supplies that are crucial for the well-being of the people of Rwanda. Not only the House but the country can be proud of what they have done in difficult circumstances, and I know that we shall all wish to pay tribute to them.

The Foreign and Commonwealth Secretary said that I would comment on the middle east, a region in which there has obviously been remarkable progress in the past year. I had vivid evidence of that fact when I was able to fly from Tel Aviv to Amman direct—a 20-minute journey, which would have been inconceivable as recently as a few weeks earlier. That is a mark of the important changes that have occurred.

Gradually the foundations are being laid for a lasting peace settlement, which we hope will be acceptable to all the peoples of the region. We have witnessed the peace treaty between Israel and Jordan; we have witnessed the gradual winding down of the Arab boycott against Israel. We have witnessed progress in the talks between the Israelis and the Palestinians, which have led to the withdrawal from Gaza and Jericho, and there is now the possibility of talks between the Israelis and the Syrians, which could lead to the resolution of one of the most difficult and intractable problems.

The United Kingdom is seeking to make a useful and important contribution to that process. We are working hard to support peace in the middle east, politically and economically. We are giving £75 million to the Palestinians, helping them to build their institutions and create jobs. We have supported the Palestine police by providing £3 million to help pay salaries, and with training courses at Bramshill police college. A safe and secure environment will be vital to the success of those new operations. We are also ready to help set up the Palestine monetary authority. We want to help to add meaning and credibility to Palestinian autonomy.

However, I emphasise that the prospects of peace in the middle east are improved not only by adding strength to those welcome foundations but by showing resolve in deterring those people in the region whose agenda is one not of peace but of conflict. Whether it be through incidents of terrorism or other means, we know that there will be people who will continue to try to destroy the prospects for peace, and therefore the road to peace will be slow and difficult. The leaderships in the middle east, both Israeli and Arab, are determined to make progress and we shall give them our fullest support.

Mr. Sainsbury

My right hon. and learned Friend will be aware that what he has just said, as well as his recent visit, will be widely welcomed. Can he confirm that it is the Government's view that direct talks between Israel and Syria are the best way of furthering the peace process, as has been proved by the talks between Israel and Jordan and on other occasions?

Mr. Rifkind

Yes, that must be desirable, and we very much hope that that will prove possible. We have seen that direct talks, whether between Israel and Egypt or Israel and Jordan, have the best prospect of resolving some of the most difficult problems and of building a climate of trust, without which the progress that we all desire cannot be fully achieved.

My right hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten), and a number of other hon. Members, were kind enough to refer to a speech that I made earlier this week about the relationship between western Europe and north America. Most people in the House and on both sides of the Atlantic realise the continuing importance of the north Atlantic alliance and why, on matters of defence and security, NATO remains crucial to the well-being that we all require.

We are also conscious of the fact that in the post-cold-war world, as long as there is no direct threat to the security of western Europe, it will be increasingly difficult to create the same sense of enthusiasm if the Atlantic relationship is presented as if it is concerned only with defence and security issues. The common interests on both sides of the Atlantic transcend the issues of defence and security.

That is why I have suggested that we should try to create a new framework that incorporates the spectrum of common interests that bind together the peoples of both sides of the Atlantic ocean.

Mr. Patten

Before my right hon. and learned Friend concludes, I should be grateful if he would reflect on one point about foreign affairs that I made during my brief intervention. I requested whether, in the face of the apparently publicly disinterested views of the German presidency towards fraud, my right hon. Friend the Foreign Secretary would consider asking for a special ministerial Council to consider the issue. Is the answer yes, no or maybe?

Mr. Rifkind

I think that my right hon. Friend will appreciate that ECOFIN has the main responsibility in that sphere. Therefore, my right hon. Friend's interesting suggestion should best be directed to my right hon. and learned Friend the Chancellor of the Exchequer—and I am sure that it will be drawn to his attention.

In the few minutes left, I wish to emphasise what I believe is necessary, which is to create a framework that will—[Interruption.] My right hon. Friend the Member for Oxford, West and Abingdon had the answer that I am sure he wanted to hear—[Interruption.] If I may be allowed to continue.

The fundamental interests that bind the two sides of the Atlantic are, in the first instance, the defence and security considerations that we have been discussing. But other factors include the extent to which concepts such as the rule of law are fundamental to north America and western Europe, the economic arrangements, which are a fundamental part of our economic philosophy, and the cultural identity that is crucial to all the countries that follow from the European civilisation.

Increasingly over the next few years, there will be new threats to the western way of life that may not now be as apparent as might otherwise have been expected. 'We know that there is a resurgence of nationalism in parts of eastern Europe. We know that some people are attached to authoritarian ways of life. We know that the economic challenges to western Europe and north America will be profound.

My right hon. Friend the Member for Guildford (Mr. Howell) was right to emphasise the fact that, in the far east, there are countries with remarkable economic prospects. One only has to contemplate what has been achieved in Taiwan, Singapore or Hong Kong to speculate on what the mainland Chinese republic will be able to achieve when it finally puts off the yoke of communism and allows the opportunities that liberal capitalism provides to take forward its economic prospects.

Mr. William McKelvey (Kilmarnock and Loudoun)

Will the Secretary of State comment on the request made by the hon. Member for Ayr (Mr. Gallie) for a reference of the GEC bid to the MMC?

Mr. Rifkind

The hon. Gentleman will be well aware that, when matters of that kind are raised, a proper procedure is followed. The Ministry of Defence expresses its views to the Department of Trade and Industry. The Office of Fair Trading makes its recommendation, and my right hon. Friend the Secretary of State for Trade and Industry announces his conclusions in due course.

I believe that the defence and security of the United Kingdom are in the hands of a Government who, for 15 years, have given the greatest priority to international security—this during a time for most of which the Labour party has been a unilateralist party committed to weakening our defences—

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.