HL Deb 21 May 1974 vol 351 cc1333-9

3.33 p.m.

LORD SHEPHERD

My Lords, with your Lordships' permission I will now repeat a Statement that has just been made in another place by my right honourable friend the Prime Minister. The Statement is as follows:

"With permission, Mr. Speaker, I should like to inform the House of further decisions regarding the supply of arms to Chile and South Africa.

"The Government have now completed their review of the contracts covering the overhaul of aero-engines and the supply of engine spares by Rolls-Royce (1971) Limited to the Chilean Air Force and have been in touch with Rolls-Royce. So far as overhaul is concerned, the contract between the company and the Chileans provides for termination on three months' notice. Rolls-Royce will exercise this contractual right at the Government's request. The policy on spares for these aircraft and their engines should obviously be consistent with the policy on overhaul, and contractual obligations to supply spares will also therefore have to come to an end.

"In the case of South Africa the Government have decided that the export licence for one Westland Wasp helicopter, delivery of which was outstanding when we came to office, is to be revoked."

My Lords, that concludes the Statement.

LORD STRATHCONA AND MOUNT ROYAL

My Lords, I can thank the noble Lord the Leader of the House for repeating that Statement. I think that is about the only good thing I can say about it. This side cannot but regret the Statement, and I must ask the noble Lord a rather large number of questions which seem to me to arise out of it. First of all, can the Government say why this request to Rolls-Royce was made? Secondly, in this context what is the difference between a request and an instruction? Would I be right in inferring from the Statement that Rolls-Royce did not themselves wish to terminate the contract? What will be the direct effect on the revenue and employment in the Derby area as a result of this particular decision? What effects do the Government imagine this will have on future contracts?

On the Westland point, does this mean that the Government are no longer willing to supply arms to South Africa for the defence of the Cape trade routes? Does it further mean that Westland's have been compelled by the Government to break a contract, and will Westland's be indemnified by the Government as a result of breaking a contract? Finally, in more general terms, does the Statement mean that the Government have now changed from the traditional policy, followed in the past by both political Parties, of selling arms to any nation which does not pose a threat to the security of this country?

LORD SHEPHERD

My Lords, the noble Lord said that the only good thing that he could say in regard to this Statement was in gratitude to me for repeating it. But one good thing that arises from this Statement is that we are going to honour our obligations to the United Nations Security Council resolution. With regard to Westland's and the question of being indemnified, of course under the contract Westland's would be indemnified if an export licence had been revoked. Therefore, Westland's will not bear the cost of this decision. As to arms policy generally towards South Africa, this is still subject to review. The statement regarding the Wasp helicopter has been made to-day because this particular aircraft was for delivery in the middle of next month.

As to Chile, here I think we were fulfilling what would be the general wish in most quarters of this country—showing a repugnance to the political régime in Chile. The noble Lord asked me what would be the employment consequences of this decision. My understanding is that there are some 16 men employed, not at Derby but at East Kilbride, and that the financial consequences are relatively small to Rolls-Royce. In regard to whether it was "request or instruction", clearly Rolls-Royce were under a contractual arrangement, one that they could break by giving three months' notice, and at the request of Her Majesty's Government they have informed the Chileans that they do not intend to continue the contract after that period of notice; that is, three months.

LORD STRATHCONA AND MOUNT ROYAL

My Lords, the noble Lord is really only repeating his previous Statement by saying they were requested. The question I asked him was: Did they refuse to accede to that request, or were their arms twisted?

LORD SHEPHERD

My Lords, they have not refused to accede. They have received a request from Her Majesty's Government and are complying with it. In regard to future contracts with Chile, of course this is not possible unless there is a change of régime in Chile, which I am sure, again, most quarters of this House, and I believe throughout the country, would wish to see.

LORD SHINWELL

My Lords, in the matter of the statement that Her Majesty's Government are honouring their obligations to the United Nations, can my noble friend say whether this applies to every other member of the United Nations?

LORD SHEPHERD

My Lords, there are some countries which, as we know—and not only on this issue—do not comply with United Nations resolutions. This Government feel that they have a duty towards the United Nations, and they will seek to comply with the decisions of the Security Council.

LORD FRASER OF LONSDALE

My Lords, am I right in thinking that I heard the noble Lord say that the question of the supply of arms to South Africa is still under consideration? I think I heard those words. If so, may I ask the noble Lord to bear in mind the fact that Her Majesty's Government wish to reduce Defence expenditure? Would there not be some advantage to Her Majesty's Government in getting the supervision and reconnaissance of the Cape route and the Indian Ocean done free of charge by another friendly nation, without the burden having to fall on the British taxpayer? That would be of some advantage to Her Majesty's Government. Moreover, is it not essential that we have some representation for Defence purposes in the Southern oceans, and is it not true that this can be provided only if we are friendly with South Africa and encourage her to co-operate with us?

LORD SHEPHERD

My Lords, the contracts which exist for the supply of arms to South Africa are being reviewed, and it is a question of understanding the circumstances of them. In regard to the importance of Simonstown, we have always recognised that it is useful but not essential. We also believe—and I think the noble Lord, who has long experience in business in Africa as a whole, will recognise the truth of this—that to-day our trade with Africa as a whole has as much importance as our trade with South Africa.

LORD GRIMSTON OF WESTBURY

My Lords, has any estimate been made of the consequential loss of jobs and export orders which will follow from these decisions? Many countries will begin to think that it is better to order elsewhere, in case the same sort of thing should happen to their contracts.

LORD SHEPHERD

My Lords, clearly this is a matter which must be taken into account. But I believe that nearly every country would support Her Majesty's Government in its attitude towards the régime in Chile and the Government in South Africa.

LORD WIGG

My Lords, is the noble Lord aware that the Government's decision to cancel the supply of Wasps is clearly a gesture which all right-minded persons ought to back up, because these helicopters are much more useful for internal security purposes than for any connection they might have with the security of the Cape route, in even the wildest stretches of the imagination?

LORD SHEPHERD

My Lords, this is one of the considerations which were in the mind of Her Majesty's Government.

LORD GORE-BOOTH

My Lords, may I ask the Minister whether the Government realise the political implications of what they are doing? While all of us disapprove of any kind of dictatorship, does the Minister realise—for instance, from that admirably objective B.B.C. "Panorama" film of Chile—that the previous Government had bent the Constitution, had incited people to steal each other's property, had imported arms for use in civil war and came to an end which we equally regret? Is not the implication of what they are doing that they prefer one dictatorship to another, and is that really the policy of the Government?

LORD SHEPHERD

My Lords, we took into account all the political implications. We were conscious that the previous régime, with all its failings, had been a duly elected Government. The present régime overthrew the democratically elected régime by military force, and we all know of the terrible atrocities which have been committed since that régime took office.

LORD BALFOUR OF INCHRYE

My Lords, may I ask the noble Lord the Leader of the House if, as I understood him to say, repugnance at the internal régime of a country is to be the yardstick by which we measure our relations, whether he is aware that he has opened this debate very much wider than Chile only? May I ask him, as Leader of the House, whether there can be an opportunity for us to debate this whole question which is of increasing importance to industry and to our political life?

LORD SHEPHERD

My Lords, it is for the noble Lord to consult with his noble friend the Opposition Chief Whip, who, no doubt through the usual channels, will see whether a debate can be arranged. However, let us be frank. This is an issue which, as we all know, divides noble Lords on both sides of the House, and we have had debates on previous occasions. But, certainly, if noble Lords wish to have a debate on this decision I shall be very happy for that to be done.

LORD DAVIES OF LEEK

My Lords, is my noble friend aware, since the Government are being asked whether they are aware of what they are doing politically, that there was a time at a dark moment in the history of Britain when Winston Churchill had to choose between one dictatorship and another? He then chose to fight side by side with Russia, and the 25 million dead at that period helped to save the democracy which we are now trying to build up in Britain and elsewhere?

LORD SHEPHERD

My Lords, that is a factor, but I suggest that it belongs to the past. We are now dealing with present realities and present issues.

LORD DAVIES OF LEEK

That was a great reality then.

EARL FERRERS

My Lords, while we may all, Governments and individuals, have our own views of either approval or disapproval of other Governments, will the noble Lord agree that if we are to have a home armaments industry it depends upon exports, and that, in the long term, the summary cancellation of orders for exports can only affect that industry to our detriment? Will he further agree that we shall be the losers, because our competitors will fill the space which we have given them?

LORD SHEPHERD

My Lords, of course this is a matter which we should all take into consideration. But trade is not solely of arms and when considering our relations with South Africa one has to take into account the importance of our trade with Africa generally. We know of all the strains which are at present being imposed.

LORD STRATHCLYDE

My Lords, has the noble Lord considered the importance of our trade with other countries in the East, such as India and Malaysia? This trade has to pass around the Cape.

LORD SHEPHERD

Certainly, my Lords. As one who lived out there for quite a number of years, I have done so.

LORD CLIFFORD OF CHUDLEIGH

My Lords, can the noble Lord tell us what arrangements have been made to safeguard our supplies of copper?

LORD SHEPHERD

My Lords, the noble Lord is clearly referring to Chile. I see no difficulty at this stage.

LORD WIGG

My Lords, will my noble friend consider making arrangements for a visit by Members of this House to Simonstown, so that they can realise on the spot just what utter nonsense is being talked about Simonstown having any military importance? It is just about the equal of Southsea, except of course for the boarding houses along the front which are marked "Rhodesia-by-the-Sea".

BARONESS EMMET OF AMBERLEY

My Lords, can the Minister explain why it is repugnant to sell something to Chile, while he is perfectly willing to buy copper from Chile?

LORD SHEPHERD

My Lords, we conduct trade with many countries with which we disagree. But there are a number of countries with which we do not agree and which conduct their affairs internally in such a way as to make us feel that it would be wrong to supply arms which could be used for internal security. We have been discussing this point for sixteen minutes. This is one of the problems of a Leader of the House who must try to get things going, but who is also involved in questions. However, since the noble Lord, Lord Balfour of Inchrye, has suggested the possibility of a debate, we might move to the next Statement and then have an opportunity of debate if noble Lords so wish.