THE FALKLAND ISLANDS

HL Deb 20 April 1977 vol 382 cc222-66

7.21 p.m.

Viscount BOYD of MERTON rose to ask Her Majesty's Government when they propose to implement the recommendations in the Shackleton Report dated July 1976 and entitled Economic Survey of the Falkland Islands and, in particular, its recommendations concerning the permanent airfield; and whether they will ensure that, in accordance with the wishes of the inhabitants, any discussion with the Argentine Government should not put at risk British sovereignty over those Islands. The noble Viscount said: My Lords, I rise to ask the Question standing in my name on the Order Paper. In July last year, the noble Lord, Lord Shackleton, as Chairman of the Economic Survey of the Falkland Islands, presented his report to the Secretary of State, and we are all very grateful to the noble Lord and to his admirably chosen and highly competent team. It must have been a very moving moment for the noble Lord, Lord Shackleton, to visit Grytviken in South Georgia, the dependency, and see the grave where his father was buried in 1922 "Under", as his biographer wrote, "the shadow of the mountains he has been the first to cross". I doubt whether ever before any Member of your Lordships' House has had the same experience and then come back to our very different world and written a report to remind us of our responsibilities to a territory with which we are so closely linked.

There have been some 20 or so reports on the Islands in the last decade. Indeed, the noble Lord himself referred to the definition of an "island" as, "a piece of land entirely surrounded by advice". But expert as many of these reports have been, there has been nothing before on this scale about the Falklands. A good many of the recommendations of previous reports have not been followed up. It will be a tragedy and a shameful abandonment of our responsibilities if the same fate should befall the major recommendations of this report.

Twice before in the lifetime of many Members of this House events, or a fear of events, in the Falkland Islands have affected our national security. In December 1914, as a result of our naval victory in the battle of the Falkland Islands, German cruiser warfare collapsed and our country held outside the narrow seas undisputed control of the ocean trade routes of the world. Then, a generation later in 1941, as recorded in the Diaries of Lord Alanbrooke: One fear against which Brooke had to guard that winter was a Japanese descent on the Falkland Islands, where an enemy base would have had disastrous effects on the South Atlantic convoys and the supply of the Middle East and India.

I am sad, and somewhat ashamed, that during my long spell at the Colonial Office I did not visit the Islands, though met Falkland Islands company officers and islanders from time to time. I know that the islands and the islanders have made a great impression on the present Minister of State at the Foreign and Commonwealth Office; and, indeed, he himself has made a very good impression on the islanders. It is clear that he has the islanders' interests very much at heart.

All of us are very glad of the great interest being shown these days, both here and in another place, in the welfare and security of the islanders; for it would be a sad thing if our interest arose only when, as in two World Wars, our own security was at risk. For the Falkland Islands have been a British colony for 150 years and the culture, language, history and traditions of the people are all British. I remember the words of one of my illustrious predecessors as Colonial Secretary, Lord Milner, who, when speaking to our fellow countrymen who went to live in the colonies, said: You can feel at home wherever you are—serving directly or indirectly the interests of Great Britain. You will not cease to be ours because you have been transplanted. Our horizon must widen. That is all.

The Shackleton inquiry, as noble Lords know, was conducted on the assumption that the political status of the Islands and their dependencies would remain the same as during the last century and a half, and this is what the islanders passionately desire for the future. The report stresses what it calls, "a striking vigour of feeling about sovereignty". Of course, as the report points out: Regional co-operation between different nations is as relevant to this part of the world as to other areas". But I was somewhat surprised to read in February some words said by the late Foreign Secretary, whose death grieved us all, and was a great loss to our country. He said that it was: … implicit in many of the things Lord Shackleton says about tourism, fisheries, airport enlargement and so on, that in practice they can go ahead only in the framework of a wider economic co-operation in the South-West Atlantic." [Official Report, Commons, 2/2/77; col. 558.]

But that is not really what the report said. I refreshed my memory. It said: It is logical that in any major new development of the Islands' economy, especially those relating to the exploitation of the off-shore resources, co-operation with Argentine, even participation, should if possible be secured". There is a lot of difference between offshore and onshore development and if we want—and I shall refer to this briefly later on—to develop, for example, the largest concentration of seaweed (kelp) resources in the world, we can go ahead with the islanders with the infrastructure needed, and with the continuing development, without the consent of the Argentine.

As I have said, the islanders are resolved to remain under British sovereignty. I was in Canada at the time when the report was first being studied by British Ministers. There I was charmed to read in the Alberta, the newspaper in Calgary, some words on self-determination. The heading was, "Falkland Islanders cling to Britain", and it went on: Somewhere in the Third World there must be hidden away the secret rules about who is entitled to self-determination. One suspects that they consist of just one rule and one exception. The rule seems to be that any colonial territory, however minuscule, is not only entitled to independence but obliged to demand it. The exception simply states that European populated territories are different". It must be for this House and for Parliament to see that they are not different in the Falkland Islands.

Of course, we welcome the assurances given by Ministers, notably the Minister of State, on the question of sovereignty and in the most recent, on 30th March last, he stated that the Government will not bring proposals to the House if they are not acceptable to the islanders. But, welcome as it is, this by itself is not enough. Some weeks ago, The Times newspaper stated: The islanders fear that the Shackleton report may be ignored. Unless something is done quickly, they believe that the noose is being tightened economically, so that they will be forced into accepting an unwanted solution with the Argentine. So assurances that nothing will be done behind their backs are not, by themselves, good enough, for if consent to the transfer of sovereignty is ever forthcoming it must not have been brought about by disillusion with us, or despair caused by our failure to carry out our responsibilities.

While talking about assurances to the islanders, may I ask the noble Lord, Lord Goronwy-Roberts, who I am delighted is answering today, this question? Two years ago, he was asked in the House by the late Lord Cowley: Will the noble Lord ensure that the islanders, or representatives of the islanders, are included in all British delegations in their substantive talks with the Agentine Government? The noble Lord replied: Yes, my Lords. It has always been our policy that representatives of the islanders should be present at all substantive talks, and this will continue to be our unchanging policy." [Official Report, 10/4/75; col. 181.]

The question that I should like to ask the noble Lord is whether this is still the policy of Her Majesty's Government. And as no representatives of the islanders have been present at any talks, does this mean that there have been no substantive talks with the Argentine? I note that the noble Lord is nodding and I think he is nodding his agreement. However, I shall be very glad if he will change his nod into an explicit statement when he replies to the debate. Incidentally, if the islanders have confidence in us, pressures from the Argentine will not unduly concern them.

How, then, can we show them that confidence? It seems to me, and to many others, that the most impressive, effective and tangible action we can take is to ensure that the Shackleton Report recommendation on the length of the airstrip is carried out. The report urges the extension of the planned runway of 1,250 metres by a further 950 metres to accommodate short-medium haul jets and part-loaded long haul jets on the final leg of international flights. This is the most tangible evidence we can give of our solidarity with our fellow citizens in the Islands and the best possible encouragement to investment and development; for, as the report makes out quite clearly, without this extension there is a strong doubt whether the diversifying suggestions which have been made in the report can be realised to any significant degree. I am assured that, if the airstrip stays at its present planned level, the islanders will still be dependent on the Argentine for essential goods for development to be flown in, and the white card of entry demanded by the Argentine will remain. But if the airstrip is enlarged by another 950 metres, the white card can be a thing of the past, the islanders can be independent of the Argentine and development materials can flow in. The contractors are still on the site and only a word from Her Majesty's Government is necessary for what all regard as essential for development to proceed.

The Minister of State, on the last Commons sitting day before the Recess, said about this extension that it is a serious and important project, but he said: … it seems to us that on present evidence it would be hard to justify it". He went on to say: We have not closed the door to the project but we need more convincing that it is viable". He added that it could bear very heavily on the current revenue problems of the Islands. However, the Islanders remember certain observations on revenue matters in the Shackleton Report. This report highlights the fact that between 1951 and 1973 revenue from taxes on profits transferred from the Islands to Great Britain was twice the amount of aid from Britain to the Islands. The report says: Over the life of the colony the United Kingdom Exchequer benefit from tax on funds transferred to the United Kingdom has almost certainly exceeded the value of United Kingdom Government aid". Surely considerations of justice and wisdom, and of trusteeship, should compel us to listen to their advice.

The report examines many ways of improving the economic prospects of the Islands: improvement perhaps as much as 10 per cent. in the nutritional value of the grass on which the present sheep-based economy depends. We are all delighted at the efforts which the Falkland Island Company is making to find new wool markets in East Europe, France, Switzerland and North America. Another suggestion is to increase the yield of blue whiting on an enormous scale—possibly equal to the current United Kingdom total fish landings. There is krill in the area—perhaps the largest untapped source of protein in the world—and I am very glad to read of the intention of the British Antarctic Survey to increase its research work into this and other resources in Antarctica. There are also strong possibilities of a healthy tourist trade and, in the long run, of oil development.

The report covers a wide range of imaginative possibilities and I hope that the noble Lord will be able to give us good news of progress by the Government in their consideration of these ideas. I have just mentioned alginate development, to which the report gives considerable attention. As the report shows and as I have mentioned, large quantities of kelp—giant seaweed—exist around the Falkland coastlines, within the area which it is free for us to develop with the Islanders, which are suitable for the production of alginates. About one-third of the current world supply is manufactured by a British firm, Alginates Industries Limited, in Scotland. Further developments, as the noble Lord, Lord Shackleton, has pointed out, have been frustrated by the world recession and political uncertainty.

The company issued a statement some two months ago in which they said: The overriding question is the political future of the Islands", and they stressed the need for an assurance that British sovereignty will continue. The company has now asked for three assurances before they can reach a decision whether to safeguard future supplies of a raw material, which may be scarce in the long term, by development in the Falkland Islands. They have asked to be assured regarding the continued British sovereignty of the Islands; to be guaranteed an indemnity, should a change of sovereignty take place; and to be promised financial assistance no less valuable than that which is currently available in Scotland. They go on to say, concerning sovereignty, that no assurances regarding this would be credible in the event of the Government deciding not to implement the recommendation of the Shackleton Report on the aerodrome. They make one very helpful comment: At the time of the Shackleton Report it was considered that only the production of dried milled seaweed would be a viable proposition but it is now considered that sodium alginate is worth even more than calcium alginate since it is an end product and is worth around £2,000 a ton". If, given the facilities I have mentioned, they should decide to go ahead, the gathered seaweed would end in sodium alginate in the Islands and then be transported to the United Kingdom by a company which is already earning £10 million a year in foreign exchange and whose development, if possible and encouraged, could cover the cost of enlarging the airstrip in a very few years.

The noble Lord, Lord Goronwy-Roberts, told us in February of this year that by the middle of next year we shall see whether a further enlargement of the airstrip will be cost effective and, indeed, whether it will be desirable. I know of the noble Lord's keen interest in the welfare of those overseas territories for which we are still responsible, and I very much hope that he will be able to give us this afternoon a more encouraging answer about the aerodrome than he felt able to give us two months ago.

7.39 p.m.

Viscount THURSO

My Lords, there will be many in your Lordships' House and many more outside it who will be grateful to the noble Viscount, Lord Boyd of Merton, for giving us this opportunity to ask the Government about their intentions towards the Falkland Islands, to speak about the problems involved and, indeed, to some extent to try to confess the weight which we feel upon our consciences about the way in which these Islands have been left so amazingly under developed by us when they have so much to offer. I share with the noble Viscount an admiration for the report produced by the noble Lord, Lord Shackleton, and his team but I do not share with him his enthusiasm about its composition. I find gaps in the composition of the team which was sent out to look at the Falkland Islands. I think that these gaps in its composition account for certain gaps in the recommendations to which I should like to draw the attention of Her Majesty's Government and which I should like to ask them to look into.

The two gaps which I see most particularly in the composition of the team are these. First, there is the lack of a forester and of an agricultural botanist. The other gap is the lack of anybody with practical experience in agriculture: experience of how to apply systems to the research of grassland researchers and people of this kind, and how to come out with a system that is suitable to the soil and climate as well as to the markets which would be available to this agricultural economy. I will refer to this point later, but at this stage I should like to refer to some of the key conclusions in the Shackleton Report, comment on them and ask certain questions involved in those conclusions—questions about the Government's attitude to those conclusions and what they intend to do about them.

There is no doubt, of course, that the economy of the Falkland Islands is static and that the current development plan is insufficient to reverse that situation. Obviously I agree with that, and I hope the Government also agree with it. The ownership of farms in the Falkland Islands and the absence of institutions such as banks form one of the main reasons why development has not hitherto taken place, particularly agricultural development. That is a valid conclusion to have reached. That is where the Falkland Islands are so very different from those parts of Scotland which they most closely resemble. They most closely resemble the islands of Shetland and Orkney and the County of Caithness where I live and where there is a strong body of independent yeomen farmers; where there is a strong tradition of independent land ownership and farm operation. This is particularly visible, for instance, in Orkney where enormous tracts of land, similar in many ways to the land in the Falkland Islands, have been reclaimed and put to use at an intensity not to be dreamed of by the inhabitants of the Falkland Islands. I feel certain that this kind of energy could be released if people could be got to the Falkland Islands who would like to use the land in that way, or if the people already in the Falkland Islands could be given both the availability of the land and the finance to develop it. I feel that is a key conclusion in the Shackleton Report and one on which I should like to hear the comments of Her Majesty's Government.

This is again supported by the conclusion in the Shackleton Report that the population tends to show a marked degree of dependence on Government and on employers and that there is a low level of confidence and of enterprise. That is a most important thing to overcome. What must be got across to the people in the Falkland Islands is that they have every right to have confidence in the future of their Islands; that they have priceless assets, both on land and in the seas around them; that they can develop by their own hard work and initiative, and that we should give at least that much back to the Islands as will help them to get started upon this road.

The Shackleton Report refers to the pattern of economic activity, the fragmented social structure and the other factors that have slowed the evolution of a distinctive local culture. I do not think the local culture matters so much as the local confidence, the local sense of ability to control their own future. That appears to me to be most lacking, and that is where I should like the assurance from Her Majesty's Government that they are going to give this sense of confidence to the people of the Falklands.

We then come to the conclusion that wool output has been static over the last 10 years and that the Falkland wool crop can be expected to do no more than hold its own in real terms relative to world prices of manufactured goods. I have to confess that I have never had the good fortune to go to the Falkland Islands, but everything I read in the report and everything that I read of the geography and geology leads me to believe that I know similar land and similar country. I live in similar country. The thing that astonishes me about the report is the lack of confidence in the agricultural future of the Islands.

If I may do some mental arithmetic, systems have been developed which have become very popular in the island of Orkney where problems are similar; where there is little growth in the grass crop over the winter months, where there is a high background wind speed and gales of up to 100 miles an hour are not unusual; where the whole top of the sea can blow off and blow across the land, landing on the soil, leaching out the top layer of lime and substituting sodium and making the top layer of the land tacky and nasty. If the sheep are left out in those conditions they poach up and puddle up the surface of the grass and the grass does not come away in the spring.

In order to overcome that the College of Agriculture demonstration farm at Kirkwall has developed a system of sheep husbandry whereby the sheep are taken in and kept on a slatted floor inside from about the turn of the year until after lambing. This has two effects: first, it protects the sheep from the worst effects of the winter and, secondly, it protects the land from the worst effects of having the sheep on the land at a time when the grass is not growing. So when the sheep lamb, the grass is then ready to come away and grow and the sheep can go out to a good growing crop of grass. As a result, areas where before very few sheep were being kept to the acreage of the farm, are going up to stocking rates of about six sheep to the acre on grassland. They are preserving the grass in a silage tower making a good quality silage, feeding the sheep over the short part of the winter and getting a much higher return from the land.

Let us do some quick mental arithmetic on this. There are 3,800,000 acres of land in the Falkland Islands. Let us say that only one-sixth of that (and I do not really believe that that is the limit, but let us say only one-sixth) is capable of improvement, and let us say that on that land we can achieve only a maximum of two-thirds of the standard that can be achieved in the islands of Orkney. Again I do not believe that because the summers are a great deal warmer than the Orkney summers. If that is so, one might then be able to carry a sheep stock of four sheep to the acre on 500,000 acres, which is 2 million sheep, as compared with the present sheep population of 644,000. This would not only produce an enormous increase in wool but would surely produce enough carcases to start up the mutton processing industries which are referred to in the report.

People have said that we cannot run mutton processing industries because they have never been economic. Of course they have not been economic; there has not been enough raw material. One cannot run a whole mutton-packing industry based on a total population of 644,000 sheep. If you can work up to something in the region of 2 or 3 million sheep you then have a chance of backing that production of wool with a very much better chance of running a mutton-processing industry, with, of course, hides and things of this sort as well.

What also struck me, coming from the North of Scotland as I do, was that the native Falklanders are known as "Kelpers". If you say "kelp" to a Highlander you mean fertiliser, because that is what kelp was to the Highlands of Scotland. The arable areas of the Highlands of Scotland were reclaimed by the use of kelp, and the burning of kelp for fertiliser was a major industry of the Highlands at the time of the 'forty-five and afterwards, until the development of artificial fertiliser at a later stage. This would be a very quick source of fertiliser for the areas which one would require to improve, without importing anything from anywhere.

The next thing that struck me about the report was that nobody had referred to shell sand, and yet there was a great deal of talk about crustacea, there was a great deal of talk about mussels and shell fish and things of that kind. Nobody referred to the absence of shell sand, but nobody referred to the presence of shell sand. I would be very surprised if there are not supplies of lime available in the shape of shell sand on the beaches around the islands. This again had been a source of lime to the Highlands of Scotland, particularly to Caithness and Orkney and to many of the seaward farms and island farms of the Highlands of Scotland. I am surprised that nobody looked for it, but I would not expect a vet to look for it necessarily. He would tend to think probably in terms of fertiliser out of a bag rather than in the old traditional sources of lime fertiliser.

I am also surprised that nobody really went into the possibility of growing trees on the islands, not in order to sell the timber, but if you intend to intensify the agriculture of the islands then you are going to require trees for fencing. If you are going to intensify the life of the islands, you are going to require materials to build houses and bridges, and harbours and jetties. Therefore, some effort to grow trees within the islands would undoubtedly be beneficial, and this is not referred to on any scale within the report. I should like to make mention again of Caithness, where the Forestry Commission are beginning to develop techniques and find varieties of tree which can grow in deep peat. They have discovered that certain varieties of lodgepole pine can in fact put their roots down below the anaerobic layer, below the water table; the roots can go on living. They can do this because they have an air pipe going down the roots and the root is breathing like a diver underneath the level of the water table. These trees are actually capable of drying out peat land, and they are capable of standing up to wind pressure in deep peat. It would have been very helpful, I have no doubt, to Lord Shackle-ton's team to have had somebody there to say whether they thought that this kind of forestry could be pursued within the islands. Forestry within the Falkland Islands could mean a great deal in terms of the ability to carry out any other developments.

Reference has been made to the possibility of fishing. Clearly, there is a most fertile sea around the Falkland Islands and it would seem wrong not to develop this fishery. What we have to remember is that with this fishery should go all the ancillary trades. You will want nets, you will want a net maker, you will want people repairing boats, coopers making barrels and boxes and all kinds of things for dealing with your catch. Again, you will want the freezing capacity for dealing probably with the filleted product, the by-product of the filleting process being either a livestock food or a fertiliser to put back into your expanding agriculture. So here again I have to draw Her Majesty's Government's attention to the enormous possibility of a rolling increase if you can once get a start made. Again, I have to ask them whether they really intend to inject this kind of confidence into the people of the islands so that they will be prepared to take risk in this kind of industry as well.

I do not by any means set aside the possibility of other major industries on the islands. If you can get the farm production of sheep to increase, I see no reason whatever why there should not be a properly vertically integrated wool mill making cloth, tweed, wool, knitting wool and so forth. I know that Hunters of Brora, who run a very good wool mill in the county of Sutherland, would be glad to give Her Majesty's Government any help they wanted in setting up, and advice on how to set up, a vertically integrated wool mill that does everything from taking in the fleece to putting out the finished product. I am quite certain that there could be markets for the quality and type of tweed that could come out of the sheep if there were enough of them.

Finally, there is one thing to which nobody seems to have referred. I notice that the surface of the Falkland Islands is covered with peat. There is water in the Falkland Islands, and if you can get the barley there you can make whisky. I see no reason particularly to call it Scotch whisky; you could call it "Falkland Island Grog". I am sure that it would have a worldwide sale. It should not be too difficult to set up a distilling industry there, and there seems to be a very large demand for the right sort of quality of drink all over the world. You would have to import the barley, but you would get an agricultural by-product in the shape of distillers grains, in the shape of grouts which you could then feed to your livestock, a very valuable feed which would be left after you had made your Falkland Island Grog, or whatever it is. I see no limit to the possibilities once one gets it going.

Therefore, along with the noble Viscount, Lord Boyd, I ask Her Majesty's Government to give us in their reply this feeling of enthusiasm for the job, of real interest in the islands, of intention to support the islanders in grasping their own future. I ask them to give an earnest promise of this by saying that they will in fact set up an air strip of the right length, and perhaps they might even add to that proper sea facilities, so that if the economy grows there will be harbours into which boats can come to take away things by sea and to bring in supplies by sea. I urge Her Majesty's Government to give us a good reply to this Question because a good, warm, vigorous, encouraging reply will give enormous heart to these people on the islands, who deserve our very best, and in regard to whom I at any rate feel a certain sense of shame in that I have stood idly by all the years of my life and done little until now to speak up for their cause.

8 p.m.

Baroness VICKERS

My Lords, I should like to support the Question so ably put forward by my noble friend Lord Boyd of Merton. I have heard him speak very many times in the other place and I realise that when he was Colonial Secretary he had an intense interest in and understanding of many countries. He was given an outstanding nickname; when he dealt with East Africa he was called Bwana Kilimanjaro. I do not think that many Colonial Secretaries who have had the honour of dealing with this kind of work have been given a nice nickname.

Unfortunately I have not been to the Falkland Islands and it seems a great pity that the noble Viscount, Lord Thurso, does not have a magic wand, because as a result of the excellent suggestions that he advanced there might be a complete change. I have taken the opportunity of reading the debates and Questions in the other place, including the Adjournment Debate on 21st January this year. From all these studies, including the excellent report by the noble Lord, Lord Shackleton, it seems impossible to get a clear picture of what will happen in the future. That is why I am so pleased that we are having this debate tonight. There was also the 85th plenary meeting of the United Nations' Assembly on 1st December 1976. This was rather disturbing because one of the resolutions was that the Assembly expresses its gratitude, for the continuous efforts made by the Government of Argentina in accordance with the relevant decisions of the General Assembly"— and these are the words I wish to emphasise— to facilitate the process of decolonisation and to promote the wellbeing of the population of the islands. What about the Charter of Human Rights? The Minister in the other House was asked about the Charter of Human Rights in these terms: In view of the widely authenticated reports on the systematic suppression of human rights in Argentina, which my hon. Friend may have seen —the Amnesty report and others—does he think that this is an appropriate moment to enter into any kind of negotiations with that Government about the possible transfer of sovereignty over the Falkland Islands? The Minister replied: We all deplore abuses of human rights, where-ever they occur. Nevertheless, the welfare interests of the islanders require our discussing these matters with the Argentinian Government." —[Official Report, Commons, 30/3/77; col. 395.] I should like to know why. Welfare is our concern. A headline in the Financial Times of 22nd February this year was: Islanders fear a sell out. That is probably true. It must be remembered that the prospect of Argentinians bringing with them the turbulent and regrettably often bloody political management of their own country is not conducive to the idea of happiness and peace, which the inhabitants have received under British administration since 1833. An article in the Economist of March 1977 states that for the first time Britain has offered to discuss the question of sovereignty with the Argentinians. I gather that there has been no sign—perhaps the Minister will correct me if I am wrong —of the Argentinians modifying their claims. It must be remembered that the Argentine claimed the Islands as a successor to imperial Spain. I should like to remind the House that Spain used the Islands as a convict station and then abandoned them. There is no indigenous population.

Last year's military take-over in Buenos Aires cannot have given any comfort to the Falkland Islanders. Now the prospect of oil, krill and blue whiting, which has been mentioned by noble Lords, is encouraging Argentina to take a greater interest. In opening the debate the noble Viscount mentioned the question of chemicals and seaweed. On this matter the Economist said that a single year's production would bring Britain foreign exchange earnings greater than the cost of the airport extension. I should like to suggest that perhaps some of our very hard-hit fishermen in this country, who find employment difficult, might go there with their families on perhaps a five-year contract to help with this fishing problem. As has been suggested, other facilities could be set up, such as the canning of fish. Undoubtedly it would be quite easy to set up such a factory and I presume that some of the catch could be frozen and exported to this country or elsewhere.

The need for the lengthening of the airport runway has been discussed. I remember when I was working in the Far East—and I dare say that my noble friend Lord Boyd will remember this—metal strips were put down on the runways because there were no proper airports. These metal strips lasted a long time and were able to take the weight of the heavy transport planes. As a semi-permanent measure, until more money is available, perhaps this could be reconsidered.

There is also the example of the island of Grand Bahama in the Bahama group of islands. Only a few years ago it was a barren area and it is now one of the best tourist centres in those islands. Many tourists, especially Americans who like to change the venue of their holidays, might like to get away from the "rat-race" for a while and go to the Falklands. One learns from the report that migration loss is acute owing to the lack of knowledge about the future. Should, however, new land holdings be created, this might help some of those on the Islands. The noble Viscount, Lord Thurso, referred to this. Perhaps in the distant future some of the Rhodesian farmers might like to go there, should they have to leave their homes.

I believe that a new Deputy Governor has been appointed and I should like to know whether this so-called wrangle over the Government's refusal to implement changes in the Constitution is over, and what changes are being made to make the Government more democratic. I should also like to know—perhaps this is a minor point—why the words, "Private—Governor's House" are painted in Spanish on the Governor's house. That does not seem to be very appropriate. Is the Governor personally still seeing copies of the local news bulletins, which I gather have to be submitted to the secretarial staff 24 hours before going on the air? If so, why? Even in this country nothing is vetted that goes out on the air from local radio stations. This matter was raised in the report of the noble Lord, Lord Shackleton. Has a political adviser been appointed, or is there about to be one? Have commercial firms shown any particular interest in the report?

There is the case of the islanders of Tristan da Cunha, although there the circumstances were very different. Those islanders were miserable when brought to this country and preferred to return to the poor conditions prevailing in Tristan da Cunha rather than to stay here. I believe that many of the Falkland Islanders will be disappointed and upset if their life's work and the work of their fathers and grandfathers is not carried on, and that they will never want to settle in this country.

Finally, is it not time to set up all-Party Select Committees to look into these matters? The other countries of the EEC have them. We could quite easily ask people, not only from these Islands but from other countries, for their views when there is need for inquiries. It is much easier for many of us to put forward ideas and questions and see how they are received by those concerned than simply to have a report, although I am in no way criticising this excellent report. Personal contacts give better personal communications. I hope that after this debate some real action can be taken to reassure the Islanders about their future.

8.9 p.m.

Lord SOMERLEYTON

My Lords, I should like to thank the noble Viscount, Lord Boyd of Merton, for bringing this vitally important Question before the House. I speak as a member of a tourist expedition to the Falkland Islands and the Antarctic Circle led by Sir Peter Scott in February 1968. Our stay in the Falklands was brief; we had time only to visit Port Stanley and two or three sheep farms, as well as West Point and Carcass Islands to see an abundance of wild life, including several breeds of penguins, the black-browed albatross and large populations of seals and sea elephants. Noble Lords will probably have realised that the object of this expedition was to study the conservation of wild life in this remote part of the world. But the overriding feeling of the "kelpers", the population of the Falklands, as it was in 1968 is unchanged today. They are truly British and their simple wish is to remain British. They have said recently that they do not wish the future sovereignty of the Falkland Islands discussed—and little wonder, when one sees the state of the Argentine Government.

Your Lordships will know that the Falkland Islands are British by right and in law. They do not want independence, they do not want a change of sovereignty, so there is no real comparison to be made with former colonies where a majority of the population favoured independence from Great Britain. Neither is there any racial problem. My Lords, this is the overriding factor. I was asked by a member of the Falkland Islands Committee at that time in 1968, "Did you notice any mortal thing here remotely suggestive of South America and the Argentine in particular? Don't you agree that it would be shameful to hand us over under any conditions? "I am quite sure that the same person and the same people would say that again today. Of course, I agree that the country, as a lot of you know, is very like the West Coast of Scotland, and the people in it are very like the people who live in the West Coast of Scotland.

I feel sure that that feeling is as strong now as it was then. These islanders are more British in origin and in culture than the British themselves. But, my Lords, since 1968 the population has been steadily decreasing and this is happening for obvious reasons. The first reason, of course, is uncertainty of the future. Whenever the question of "change of sovereignty" rears its ugly head more uncertainty follows. I understand that there are considerably more men than women in the Islands at present, which makes population increase difficult, to say the least. I further understand that in 1974 no fewer than 12 Falkland Island ladies were married to Her Majesty's Royal Marines, and they have naturally come back to the United Kingdom at the end of their tour of duty.

Education, as your Lordships will be aware, is also a grave problem. I understand that many parents in the Falkland Islands do not wish to send their children to school in Argentina because they do not like the political climate in that country. But if the young people do go away to be educated, there are very few jobs to come back to and therefore the young people are forced to move from the islands. It is also abundantly clear that the Falkland Islanders cannot afford to send their children back to this country for their education. Your Lordships will know that the school leaving age in the Falkland Islands is 15, and this does not include the "O" level stage, although correspondence courses are done, I believe, by a few. This all means a continual drain on an already small population.

My Lords, in my humble opinion to put these matters right communications must be improved to the United Kingdom and the outside world, as has already been mentioned by the noble Viscount, Lord Boyd. Did you know that every Falkland Islander has to have a white card to travel to or from the Islands, and that journey has to be made via the Argentine or Uruguay?

I earnestly hope that the Government will find means of stalling the decrease in population by the building of a bigger landing strip which will be capable of taking large passenger and freight carrying aircraft, as suggested in the Shackleton Report. Surely the spending of approximately £5 million—I believe that that is the amount—on such a project would be well within the Government's intentions for developing a purely British colony which has such enormous potential resources.

This will immediately bring more employment and there will be a firm base on which to build a sound economy, with a thriving fishing industry and probably a thriving oil producing industry, as well as an economy built entirely on wool as at present. My Lords, let us make it possible for the Falkland Islanders, or "Kelpers" as they are affectionately known, to have a say in determining their own future.

8. 16 p.m.

Lord GARNER

My Lords, I too am grateful to the noble Viscount, Lord Boyd of Merton, for giving us the opportunity to debate this subject this evening. I am particularly grateful to him, and so I think will noble Lords also be, in that he has made some of the points that I was hoping to touch on. I can therefore be extremely brief. I shall say nothing about the economic side because he has covered it so fully, and I shall content myself with a few observations on some of the political difficulties that lie surrounding this problem.

The debate has shown that there is a good deal of common ground between all of us. Nevertheless, it is understandable that the problem should be seen differently in the Falkland Islands and in Whitehall. The Islanders are naturally disturbed about the stagnating economy, and anxious to see an immediate improvement in the livelihood for the younger people coming up. They are particularly nervous of any talk of a political change. The British Government have other responsibilities. They see the problem in terms of the reality of the 20th century. They feel that the long-term future of the Islands can be assured only if there is at least a degree of understanding with Argentina, and they put the emphasis on trying to reach some sensible arrangement so that economic progress can go ahead on an assured and long-term basis.

We ought to face frankly the issue of sovereignty. For my part, I think that I accept that with all the appropriate reservations that certainly should be called for, the topic should not be taboo in any later discussions with the Argentine, because clearly if that were so there will be no discussions, and this is something to which one wants to work in the long run. I gather from the nod which the noble Lord, Lord Goronwy-Roberts, gave earlier that substantive discussions have not yet begun. That is something about which one need not feel any regret, because it seems to me that the present time may be a rather puzzling one in which to initiate long-term discussions of this kind with the Argentine regime in its present shape, as symbolised by the fact that we do not at present have an Ambassador there.

All this seems to me to emphasise the extreme delicacy of the diplomacy on which the British Government will have to engage. My own thought would be that, when any substantive discussions take place, they should embrace both the political and the economic. There should be no question of going cap in hand and offering some political concessions. Rather we should speak from a position of strength, showing what prospects may flow from economic development, so that it can be seen to be something of mutual advantage.

The Government deserve credit for the way they have handled the tactics of the matter so far. Reference has already been made to Mr. Rowland's visit to the Falkland Islands—incidentally I think the first by a Minister for some nine years—and the impression he created there, and the impression he has also created by the consultations he has had with representatives of the Falkland Islanders in this country. Perhaps I should say that I got a feeling a little time ago that the relationship between my old Department, and some of the people in this country interested in the Falkland Islands, was not as close as I would have hoped it might be and I hope that it will again become. From my own experience, I can say that it seems to me extremely important for an overseas Department to have close and friendly relations with any organised body representing the interests of the particular territory with which we are concerned. I am thinking of my experience, for example, with the India-Pakistan-Burma Association, the West African Committee and a number of bodies which are extremely valuable and it seems to me important that that sort of relationship should be established in regard to the Falkland Islands.

I promised to be brief. I end by saying that the Falkland Islands should not be regarded as an historical anachronism or geographical inconvenience. The Falkland Islands represent people, perhaps not a large number of people, but they are British people and I believe that, given a fair chance, given help, they have the prospect of continuing to make a contribution to the development of their islands, to the development of that part of the world and to the advancement of British interests. They are a sturdy and hard-working people who deserve our understanding, guidance and support.

8.21 p.m.

Viscount MASSEREENE and FERRARD

My Lords, I, too, thank my noble friend Lord Boyd of Merton for bringing this question of the Falkland Islands to the attention of the House. My interest in the Falklands arises only because two shepherds of mine came from there, one named McCaskell, who is no longer with me, and another named Howard Duncan. They told me much about the Falkland Islands and I therefore feel very sympathetic to that part of the world.

I agree with the noble Viscount, Lord Thurso, that an agricultural advisor should have been on the Shackleton Inquiry, but I could not agree with him that a forester would have done much good. From my slight experience of the Orkneys, it is quite impossible to grow trees there, and as the noble Viscount said that the Orkneys were very like the Falklands, I cannot see any point in sending out a forester. However, I will not waste the time of the House by going into matters of that kind because I intend to be brief; my speech will be short and sweet, like a donkey's gallop.

I cannot understand why the Government are hedging, as they appear to be, on this issue. After all, only a very small amount of aid, £5.1 million over five years, is involved, and I would call that chicken feed compared with the vast amount of aid we give to the various developing countries. Although the overall sum has been reduced, it is running at about £230 million, and most of those countries have far fewer ties with the mother country than the Falkland Islanders. Perhaps I am wrong and the Government will give the aid that has been requested, but I cannot understand why they should even be considering not giving it. Apart from any feelings of patriotism or sympathy with the people of the Falkland Islands, such expenditure would appear to be commercially wise.

I understand that 94 per cent. of the Falkland Islanders are of British stock and that about three-quarters of them were born there. The two shepherds who came to my place in the Inner Hebrides said that they left the Falkland Islands mainly because of the question of communications. They objected most strongly to having to apply for a visa to the Argentinian Foreign Office if they wished to leave the Islands. They also felt rather out on a limb and forgotten by the mother country. So far as I can recall, those were the only reasons why they left. I implore the Government very seriously to consider providing this £5.1 million, because I understand that £3.3 million of it will be spent on extending the airfield. If the airfield is not extended to take big aircraft, no company will invest in the Islands.

We have heard of the great possibilities for the Falkland Islands, with fishing, seaweed, making calcium and sodium alginate. This process goes on in my part of the world in the West of Scotland with seaweed, making alginate; it is actually calcium and not sodium alginate. I understand that if the Falkland Islands had a factory there to carry out this process, within 10 years there could be an export trade worth about £40 million, which would help the balance of payments of this country to the tune of perhaps £20 million.

As for wool, which now and always has been the chief, almost the only, product of the Falkland Islands, I understand that last year it grossed £2.6 million. However, I believe that the Islands have increased their gross national product by the staggering figure of 80 per cent.; if this country can increase our GNP by 2½ per cent. we think we are very fortunate. I will not delay noble Lords much longer because everything that ought to be said has been said. Again, I urge the Government seriously to consider the request that has been made. I appreciate that the Argentinian Government is a military Government, and for all I know it may be a very good one, although it is not in our tradition. I agree that we must be tactful with the Argentinians, but we have had a long connection with them, with tremendous British investment there. I am sure that if this matter is handled tactfully they will raise no objection to the Falkland Islands remaining completely British, remembering that 94 per cent. of the Islanders are from British stock.

I understood that Her Majesty's Government had agreed not to consider any change in sovereignty without the consent of the people of the Falkland Islands, but I gather that some people there are not too happy about that assurance. I urge the Government to make it clear in the strongest terms that there will be no question of the people of the Falkland Islands losing their British sovereignty unless they wish to do so.

I do not think that I can say any more because it has all been said, but I just repeat my comment that this small amount of money is really chicken-feed when we think of the vast sums that this country wastes. Here is something from which the British Government will really get a return and which will help a very patriotic people. I conclude by emphasising something which came up in the debate: we take in taxation twice what we give back in grant aid. If that is so, we should be very much ashamed of ourselves. I was surprised to hear that. I would repeat that I implore the Government not to quibble about this. Having said that, I shall sit down and hope for the best.

8.31 p.m.

Viscount MONTGOMERY of ALAMEIN

My Lords, my thanks are also due to the noble Viscount, Lord Boyd of Merton, for initiating this Question, as they are to the noble Lord, Lord Shackle-ton, for his splendid report. At the outset, I should say that, when not in this Chamber—which is most of the time —I spend my professional life as a consultant in trade with Latin America and I travel extensively in that continent. For various reasons, I had not been in Argentina for some years, but I was there during the last week of March, which was most fortunate and which gives rise to my intervention this evening.

Unfortunately and unwittingly, I find myself at variance with my noble friends on this issue, because I believe that the issue of the Falkland Islands is much wider than that of island sovereignty alone. I feel that we must cut through some of the confusion surrounding the issue. In doing so, we must consider what are the real interests of the islanders in the future, which even some of the islanders themselves may not have recognised. Economic development is the key to the future. Following the promulgation of the law of the sea with the extensions to 200 miles and so on, the territorial dispute now includes a vast area of the sea and the seabed. While Britain and Argentina fail to agree on this matter, the ocean surrounding this area, which is full of riches, is being "hoovered" clean by fleets from third party countries. Neither Britain nor Argentina can do anything about this alone, but together we could do something.

As has already been said by various noble Lords, the Falkland Islands are 7,000 miles away. They are outside NATO and they are just off the Argentine mainland. Whatever may be the historical reasons for our colonisation and whatever may be the flimsiness of the Argentine claim, the fact of the matter is that the future of the islands must now be the subject of joint discussion with Argentina. Obviously, this must include representation by the islanders at all stages. It has already been said by various noble Lords that the population of the islands is now down to under 2,000 and that it is declining. It is also alleged that the islanders do not like Argentina, but I am not sure that that is correct. The fact of the matter is that there are in Argentina some 30,000 Britishers and Anglo-Argentines who all seem very happy with their lot. I believe that Argentina is our friend and I would take issue with my noble friend Lady Vickers and ask her not necessarily to accept all that she reads in the newspapers on this subject.

Argentina has undergone a spectacular economic recovery in the last year and there will be many opportunities for trade in the next few years. We currently have an imbalance of trade with Argentina, in that we import more than we export. We need to have no impediment in order to take advantage of these favourable circumstances. The recent visit by the Minister of State, Mr. Rowlands, paved the way for discussions to start. I hope that the noble Lord, Lord Gornwy-Roberts, will be able to say that discussions on the Falklands Islands will start shortly and that full diplomatic representation at ambassadorial level in both directions will be established in the near future.

8.37 p.m.

Lord MORRIS

My Lords, I intend to delay your Lordships only a short while and I am most hesitant to speak after the distinguished contributions that have gone before. I feel that the importance of the Statement made in the other place by the then Secretary of State for Foreign and Commonwealth Affairs, Mr. Anthony Crosland, cannot be too strongly stressed. He stated in February this year: I must make certain things absolutely clear. Firstly, any such discussions, which would inevitably raise financial questions in the relationship between the islands, Britain and Argentina, would take place under the sovereignty umbrella; that is, Her Majesty's Government would wholly reserve their position on the issue of sovereignty which in no way would be prejudiced. By that, I understand that the Government are of the opinion that the sovereignty of the Falkland Islands, on the basis of history, equity and international law, is not a matter of dispute but a matter of fact and should not form a basis for discussion with the Argentine Government.

In the words of Professor J.C.J. Mitford: The Argentinians' claim is founded on emotion and recurrent irredendist fever. Yet in the same Statement that I have quoted, the Secretary of State quoted his right honourable friend the Prime Minister, who said in another place in January 1976: Given good will on both sides, Britain and Agentina should be able to transform the area of dispute concerning the sovereignty over the islands into a factor making for co-operation between the two countries which would be consonant with the wishes and interests of the Falkland Islanders. The problem which that Statement raises is that it could well be inferred from it that the disputant has grounds for dispute. It thus incalcates into the hearts and minds of the islanders the fear that the United Kingdom will negotiate behind their backs—an area which they feel should not even be the subject of discussion.

The islanders are right: there is no case to answer. The United Kingdom's case for sovereignty is irrefutable. I feel sure that your Lordships would welcome a firm statement from the noble Lord, Lord Goronwy-Roberts, that the United Kingdom's claim to sovereignty is irrefutable and in accordance with the principles of international law and that Her Majesty's Government intend seeking international corroboration of the British case should the need arise. Furthermore, may I respectfully ask the noble Lord, Lord Goronwy-Roberts, whether he can state that the sovereignty of the islands would never be transferred without the consent of both Houses of Parliament and the islanders themselves in accordance with the spirit of the reply by Mr. Ted Rowlands in another place on 30th March, when he said: As I have told the House over and over again, we certainly shall not bring forward any proposals which are not acceptable to the islanders and they must obviously receive the consent of this House".—[Official Report (Commons), 30/3/77; col. 394.] Your Lordships' House has once more shown its concern for the interests of the weak and the small and can be seen to have joined itself with the islanders in their national motto: "Desire the right".

8.39 p.m.

Lord SHACKLETON

My Lords, I do not conceive it as my duty, as the Chairman of the survey which produced the report that we are discussing, to lead the campaign for the implementation of our recommendations. However, I could not resist intervening in this debate and I am most grateful to the noble Viscount, Lord Boyd, both for his personal remarks and from my own family's point of view. I am also grateful for the remarks of other noble Lords and for the very kind reception that has been given to our report. I was particularly interested—if I may refer to certain of the points that have been made, for practically every point of significance has been made—in the remarks of the noble Viscount, Lord Thurso. I was very glad that he seized on the point about the dependent situation and the difference between the independent-minded crofter and the really rather splendid but dependent people in the Falkland Islands.

Of course we owed a great deal to the members of our team and I pride myself on the fact that, although we did not include everybody whom the noble Lord would have wished, we did take Bob Storey who is the former development officer from Shetland and who is now the development officer of the Highlands and Islands Board, because I realised at a very early stage that it would be useful to find an analogue, and the obvious analogue was in fact Shetland. If I may say so to the noble Viscount, not much progress has been made in growing trees in Shetland. It was because of the absence of trees that I thought that it was relevant, and I do not believe that the addition of a forester, in the short time that we were there, would have solved the problem, which is dependent on many issues, including the problem of a much lower soil temperature and a continuous wind. Of course there are trees, and there is one splendid two acre forest, which is a great joy to find, at Hill Cove, in the West island.

It was a great problem for us to attempt to cover such a vast subject when only three months were set aside, and if I have a criticism of our Report it is of its over-voluminous length, 140,000 words, based on about three to four months' work only, of which only one month was spent in the Falklands. I think that I should stress to noble Lords, and again particularly to the noble Lord on the Liberal Benches, that much of the information on which we relied had already been published. If anyone cares to turn to the appendix he will see reference to the various reports, and I will not list the names of all the distinguished people who reported. This situation was particularly true on the agricultural side. We had two Welshmen and two Scotsmen. We had Williams the Sheep and Williams the Fiscal, and then we had two Scotsmen. What impressed me most was the ability of animal husbandry expert Huw Williams to grasp the vast amount of information that was available and update it with complicated statistics against a fairly narrow base. If we are to be condemned it is on the point that we have published too much information, rather than not enough.

I should like to stress one or two points on which I believe there are misconceptions. I have heard it said by certain people who ought to have known better that there is no real future in the land of the Falkland Islands. Nothing could be less true, and the potential for development and the already high quality (not the moderate quality, as has been suggested) is very great.

But of course more needs to be done, and it has mystified us, as it mystified the noble Viscount, Lord Boyd of Merton, why some of the many recommendations in the past, with which we very largely agreed and which we reflected, have not been carried out. Overhanging everything is, first, the cost and, secondly, political uncertainty, and before sitting down I should like to say a few words on the latter point. It is true that there is enormous wealth in the sea; that the krill beyond the Antarctic convergence and a long, long way from the Argentine, is beginning to be harvested by Germans and Russians and Japanese—and I am sorry to say that the British are not present. This is greatly to be lamented, because it is the largest untapped source of protein in the world. There is the equivalent of perhaps once or twice the total world fish catch waiting to be found.

Again, much of the off-shore development will call for international co-operation. I passionately desire to seek cooperation with the Argentine in these areas, but I must say that politics in the Argentine do not make this very easy. I should say to those who think that there is a short cut to viability through oil, that we made it very clear that it is in co-operation with the Argentine, with British expertise now in the matter of off-shore oil, that we can hope to see a useful development, both political and in terms of wealth.

But while we have stressed the fact that there are areas in which development will proceed much faster with co-operation, we have also indicated, as the noble Viscount, Lord Boyd of Merton, made clear, that though that development could be faster, it is possible for development to proceed, with or without Argentine development, provided there is the will in this country. One has only to look at the prospects in regard to alginates, in regard to tourism, to see that the Falkland Islands themselves could generate much of the wealth.

This brings me to the point about the proposals and the cost of the proposals. I hope that the noble Lord, Lord Goronwy-Roberts, will confirm that the Government were somewhat disingenuous in expounding the details that we gave in regard to cost. They added up a number of items and said that we had proposed a total recommended expenditure of up to £13 million to £14 million. This is rather misleading. As the noble Lord said, the position must be put on the record. What we actually recommended was £5.4 million over the next five years, with an exploratory fishing programme adding another £1.15 million; in other words, a total of something under £7 million. We are well aware that we cannot on the one hand ask the Government to cut public expenditure, and at the same time ask them to increase the expenditure. But we took this very much into account when we said that a further expenditure of £6 million might well take place, but not necessarily in the next five years.

I believe that it is important to get this clear, because it has been suggested by people that we have made extremely extravagant proposals, and these suggestions must have been made by people who had not studied the proposals in any detail. In fact, if one leaves out the airfield—and I want to say something about that—the actual expenditure is relatively small. Again, it has not been sufficiently appreciated that over the last 30 years the outflow of funds to the United Kingdom, largely in the form of company dividends and undistributed profits, has greatly exceeded the inflow made up of United Kingdom aid and Falkland Islands Government income from their United Kingdom investments.

Successive United Kingdom Chancellors of the Exchequer, of all Governments, have gained substantial amounts from taxes on this outflow, particularly on dividends and profits. It is estimated very approximately that between 1951 and 1973 the United Kingdom direct tax take was about £1.9 million on dividends and profits—twice the amount given as United Kingdom aid to the Falklands. There are those people who think that, somehow, the Falklands have been living off the British: it is, in fact, the United Kingdom which has been living off the Falklands. Even if only a small proportion of the kind of aid which has very properly gone into the Highlands and Islands Boards and other bodies to help outlying communities in the Highlands and Islands area had gone to the Falklands, it would have made an enormous difference. Unfortunately, the Falklands, instead of being 70 miles from Scotland, are 7,000 miles from Scotland. But, of course, the analogy with Scotland is very apparent. It was very apparent when we consulted the Highlands and Islands Board. I wish, in a way, that the Highlands and Islands Board could he concerned with the administration, because they would understand it in a way which I regret to say I do not believe the Department of Overseas Development begin to understand it. It is a problem of a very special kind. These are people who are wholly British. They are not even Scots, I may say: they are indistinguishable from the kind of people you meet anywhere around, either in England or in Scotland.

My Lords, may I, at this point, turn very briefly to the subject of the airfield? We spent many anxious times considering whether or not we could justify the extension of the airfield to take larger aircraft. It is very difficult; and any one of your Lordships who has been concerned with cost-benefit studies will know the limitations in a cost-benefit study. We attempted it, but we were not entirely satisfied with it. One thing we were certain of, however, was that the prospects of success in development, particularly in tourism, in alginates, in fisheries and, indeed, in other activities, would be diminished very considerably without the expenditure on the extension of this airfield. This was not a decision to which my admirable team came lightly. It was a matter which we debated long and carefully, but we were unanimous that if there was any single expenditure which it was necessary for us to recommend immediately it was on the airfield: and I am deeply concerned that the Government will not adopt this recommendation. I stress this because we were so strongly convinced of it that we put in a recommendation ahead of the main report in order that it might be considered.

My Lords, there are many other areas into which it would be desirable to go, but I should like to say two more things. An important part of the report which has not been discussed as much as perhaps it might concerns the restructuring of government. It is not just a question of improving the democratic content, although we have proposals with regard to that and we regretted that the Stanley Town Council had been abolished. There is a need for more of these sort of Highland community councils. But what is needed is a different style of government. One needs the determined ability that one found, if I may say so, in the county clerk, the chief executive officer, of Shetland: in fact, someone who will be able to support and encourage the development of industry while at the same time ensuring that British traditions of law, rule and justice are maintained. Again, those sections of this report are yet to be reported on.

The other point I wanted to make was that, whereas it is for the Government to give the lead, it is also for the people of the Falkland Islands and the companies themselves to respond. I believe they will. I believe there is a will in the Falkland Islands Company, in the other companies and among the sheep-owners and sheep managers to encourage the kind of development to which the noble Viscount, Lord Thurso, referred. The most striking thing to us was the absence of what can only he called private enterprise in the ordinary sense. I am bound to say that, speaking as someone who still firmly sits on these Benches, it was a striking example of the dangers of the absence of scope for individual enterprise, whether it is in a Socialist society or a company society: and the need to provide that sort of opportunity to some of the younger and energetic people of the Falkland Islands is very necessary.

I should like to make two points in conclusion. First, I should like to express my deep gratitude to the people of the Falkland Islands. It was a most exciting and enjoyable experience. They are a hospitable, friendly people—the young man who had come out from England to get away from it all and thought it better to work on a farm, at much lower pay but still at a good standard of living, rather than on an assembly line in Coventry. The second point is that I would really make a personal appeal to the Argentine Government. My family have had long associations with the Argentine; and, after all, the Argentine itself has great traditions. It was conceived in freedom, and has great traditions of democracy. I think it is important to recognise that the Argentine claim is a very long-standing one. It has been the subject of contention, and there is no doubt that many people in the Argentine are convinced that the Malvinas are Argentine. Yet the simple fact is that the people who live there are British, and are more British than you could find in any other colonial territory in the world.

I would appeal to the Argentine, although they were not very nice to me. They prolonged our stay and they called me rude names like Drake and Dampier, which actually was rather encouraging; and when they tried to arrest HMS "Endurance" they found they were shooting at our research ship "Shackle-ton". None the less, I met so many Argentines who understand the problems of the Falklands, and realise that it is not right at this moment to pursue, ultimately by some form of duress, possessing lands where the inhabitants do not wish to join. It may be that, if friendship developed over a period of 30 or 40 years, you might get the sort of development in co-operation that I hope we shall see in Europe, but at the moment I hope the Government will continue to stand firm. I say this because I believe the will is there in the Falklands, and I hope the will is here in the United Kingdom and in Whitehall.

8.58 p.m.

Lord STRATHCONA and MOUNT ROYAL

My Lords, it is almost superfluous to add anything further after listening to Lord Shackleton, and one can understand why the Report is so full of good sense. I, like my noble friend Lord Massereene, have always felt a certain affinity towards the Falkland Islands, having spent my life on an island off the West Coast of Scotland near his. I am bound to say to Lord Thurso that, if the climate of his part of Scotland is anything like that of my part of Scotland, I am surprised that he can claim that the Falkland Islands are anywhere near as warm. They certainly were not when I was there.

My other claim to be interested in this subject is that I can say that I am a living proof of the wool-growing capability of the islands, since I grew my beard there in 1970. I may say that the salvage operation on which we were engaged was seriously impeded by the kelp, and so far as I am concerned the alginates are welcome to it. None of these things makes me an expert; but, luckily, all the important points have already been raised this evening, I think. We owe a debt of gratitude to Lord Boyd, an ex-Colonial Secretary, for having given us an opportunity to discuss this excellent report and to seek from the Government the reassurance which I think is needed to answer the justifiable uncertainty and the doubts of the Islanders. I shall come later to some of the reasons why I believe these doubts exist.

I am therefore going to start by exhorting the Government to be both robust and realistic because I believe that honour and self-interest demand that it should be so. As my noble friend Lord Morris mentioned, there can be no historical doubt of the legal validity of the British sovereignty over the Falkland Islands which the Argentine Government resolutely refuse to test in the international courts. The Islands were uninhabited when the British discovered them and we colonised them in the 1830s. Charles Darwin is supposed to have said when he visited the Islands in the "Beagle" that he thought them eminently suitable to be a penal colony because while they appeared to provide all the necessities of life, there was no way in which they would provide any of the luxuries. I was therefore interested to hear my noble friend Lady Vickers say that the Spaniards used the islands for a penal settlement, something of which I was not aware.

My Lords, the noble Lord, Lord Shackleton, in his report identified considerable economic potential, in addition to the wool and mutton which is already being produced, in the fishing possibilities, the oil possibilities, the seaweed possibilities and the tourist possibilities, to mention a number of the principal items. I think I should also again underline the point that both the noble Lord, Lord Shackleton, and the noble Lord, Lord Boyd, made; that is, that there has been a net inflow of money from the Falkland Islands to this country over the years— and that in spite of this astonishingly elaborate panoply of government which one finds there, with the Governor, the Legislative Council, the Executive Council, the Colonial Secretary and 18 people in the Post Office in 1970, I think—all to administer a population of 2,000 people. So the point is well taken that possibly the system of government would stand some re-examination.

Lord SHACKLETON

My Lords, if I may interrupt the noble Lord, the Post Office is, of course, one of the income earners for the Falklands and the philately side is very important.

Lord STRATHCONA and MOUNT ROYAL

My Lords, one of the custodians in this House was telling me before the debate that he is a passionate collector of Falkland Islands stamps which,I agree, are exceptionally well designed. The report identified these two essential preconditions for economic expansion. These were political confidence and at least adequate or improved communications. As has already been said, Lord Shackleton's Report was anxious that the Argentine workforce which was being used under the 1971 Agreement to construct the temporary airport should secure continuity of work by being allowed to carry on with the major project of building the permanent airfield capable of accepting international aircraft. This is fundamental.

May I digress for a moment to ask the noble Lord about the situation regarding the shipping services to the Islands? Am I right in thinking that under the 1971 Agreement we were responsible for providing a steamer service to succeed the service which was withdrawn in 1972? If that is so, are we not in default of our agreement made at that time?— because it must be right that, however good an air service you eventually establish, there is always going to be a need for some kind of heavy goods carriage which, presumably, must be by some kind of shipping service. I think that the important point—which has been made several times today with the mention of the white cards—is that a fully-fledged air service, free from political interference, is a necessary precondition for any development plan; and there is evidence that such an investment could, in fact, earn a return.

It has even been suggested that history might turn full circle and go back to the old days when the Falklands Islands was a coaling station and conceivably such an airport might be used as a refuelling stop for flights over the Southern Pole to the Antipodes. I have no idea whether what sounds like a rather far-fetched proposal has any validity. The important point is the political implication of the airfield. I would believe that the best chance of achieving an agreement with the Argentine, which is so essential, would be if we were in a position to negotiate from strength. I think this was a point made by the noble Lord, Lord Garner. We are much more likely to get agreement on the logical short-haul service on sensible terms if it is clear that we have the fallback position of direct international flights elsewhere if we need them.

This also leads us on to the crucial point which has been mentioned several times and most effectively by the noble Lord, Lord Shackleton, and by my noble friend, Lord Montgomery, that the Islanders have got to realise that it is in everybody's interest for us to establish a modus vivendi with the Argentine sooner or later. The very fact of the existence of commercial potential surely makes this all the more important. Meantime, my noble friend Lord Montgomery tells us that the Russians and the Japanese—and I think Lord Shackleton suggested, also, the Germans—were busy "hoovering" the oceans. This brings us to another rather worrying circumstance.

Lord SHACKLETON

My Lords, may I interrupt? They have not actually got a Hoover. They are still doing only sample fishing but it is becoming significant with regard to krill.

Lord STRATHCONA and MOUNT ROYAL

My Lords, whether it is happening, or is about to happen, the situation is one that we should be worrying about. I am concerned about whether or not, in the course of paring down our defence forces, we have now got ourselves into a situation where one wonders how we should be in a position to assert our sovereignty in the area and what forces we could deploy if it became necessary to do so. Like the noble Lord, Lord Shackleton, I realise how careful we must be in advo- cating commitment to increases in expenditure at a time when we are urging the Government to economise; but I notice in some of the debates in another place there was mention of the Ministry of Overseas Development undertaking expenditure on some of these projects, anyway. So it seems to me that the first point is that probably some of this expenditure is envisaged as being in the pipeline, anyway.

Secondly, as has already been said, the amounts of money are small. This is always a rather dangerous argument. But more important is the fact that the time scale appears to be relatively long, and that it might be in fact some time before we started incurring expenditure, and I hope that this nation does not have to face an indefinite sentence of abject poverty such as we are going through at the present time. So might there not be a case for giving a commitment to undertake the development of the airfield against possibly an extended time base? I believe nothing would do more to engender confidence in potential investors, and to set at rest some of the doubts of the Islanders on their political future.

Against that background, one might hope that we could explore with the Argentines how best to co-operate in exploiting the resources of the area to the mutual interest of both countries and with due regard to the Argentine sensibilities about the Malvinas. This in turn would open up the re-establishment of proper, sensible diplomatic relations so that we can pursue the revival of the once extensive trade that we used to enjoy in that country, which is a very old-established tradition between our two countries.

Here I have to express some misgivings, because if we examine against these possibilities some of the recent Government Statements I think we are entitled, to ask the Government for a clear reassurance. On 14th January 1976, Mr. Callaghan asserted in another place, to applause, that the inhabitants of the Islands must be free to choose their own destiny. On 27th January, the noble Lord, Lord Goronwy-Roberts, told my noble friend Lady Vickers that there would be no change against the wishes of the Islanders. On 2nd February of this year, the late Mr. Crosland said that any changes must be acceptable to the Islanders. Then in March Dr. Owen was invited to give an assurance that there can be no question of handing over sovereignty without consent, and that consultation involves consent. Dr. Owen specifically refused to give those reassurances, even when pressed several times. That hardly seems consistent with some of the earlier pronouncements that I have mentioned.

In a recent letter from no less a convert, as we had hoped, than Mr. Rowlands, writing to one of his colleagues in the House of Commons (Mr. Brown), he said that there would be full consultation with the Islanders during the course of any negotiations. That is not quite the same as some of the earlier statements which were being made. One does not have to be a graduate in diplomatic studies to suspect that there seems to be a gradual shifting of the ground away from the initial very firm position which the Government were taking.

May I also ask the noble Lord what exactly is meant in this context by words like "consent" and "consultation"? How is consent to be determined? For example, are we going to have a referendum in the Falkland Islands before there is a change of status in the way we have described? Unless we have reassuring answers to some of these questions, it is inevitable that the Government will be suspected of deliberately muddying the waters so that they can subsequently use these muddied waters to wash their hands of what one noble Lord described, in a rather happy phrase, I thought, as a "geographical inconvenience".

I have to ask these questions in what I hope is not an over-contentious manner. Is it the Government's intention to ignore the Shackleton Report? Do they intend to erode our defence capacity to the point where we are manifestly seen to he incapable of asserting our sovereignty, either overland or on the sea? Are they further going to claim that the prospect of continuing poverty precludes any possibility of our ever being able to invest in the colony, and that therefore they are gradually preparing the Islanders for some inevitable deal whereby they will become vassals of the Argentine without their consent? If those are their intentions, then I believe the Government should own up and admit to them. But I sincerely hope that the noble Lord is going to be able to tell us a very different story when he answers this debate.

9.14 p.m.

The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts)

My Lords, we are all very grateful to the noble Viscount, Lord Boyd of Merton, for initiating this debate. His great experience of British overseas territories and his distinguished contribution to their development over the years make it most appropriate that he should have raised the matter of the Falkland Islands. Other noble Lords with experience of, and a deep interest in, the Falkland Islands have made valuable contributions to the debate. I think we were all particularly interested to listen to my noble friend Lord Shackleton, whose wide-ranging, erudite and truly invaluable report your Lordships have been discussing this evening. His contribution to the debate confirmed the impression of great dedication, immense knowledge and balanced recommendation which the report itself presents.

I think it was on 2nd February that I repeated to your Lordships what my late right honourable friend Mr. Anthony Crosland said about the report. His statement made clear that, because of current financial constraints—which I would not describe as abject poverty, and I certainly would agree with the noble Lord, Lord Strathcona, that it is a temporary phase in our history—and the more urgent claims of poorer countries, the Government would not find it possible at the moment to accept the more costly recommendations of the noble Lord, Lord Shackleton.

At this point I should like to join my noble friend in clearing up a misunderstanding relating to the financial statistics which that Statement put forward. I think it is absolutely fair to say that when my late right honourable friend referred to the "total recommended expenditure as being some £13-£14 million, he was endeavouring to indicate in broad terms the overall scale of expenditure which might be necessary in the long term. It was not possible for him to relate that figure to any time scale, as that depends on the degree of co-operation with Argentina that we can establish. But the Government agree that, if this overall expenditure were to be related to time scales, a distinction would have to be made between the figure of £5.4 million recommended for a development programme over the five years, which my noble friend mentioned, and the further expenditure of £6 million, or rather more, which would be related to a further period, which cannot be as closely defined in time as the period to which the £5.4 million clearly would be devoted. I therefore join with my noble friend in clearing up the misunderstanding and I hope that what I have said will be welcomed by him and by the House as a genuine contribution to the clarification of what my late right honourable friend wished to convey to Parliament.

When I refer to "the more costly recommendations", I mean such investment as might be needed to build up nontraditional industries such as fishing and tourism. In general, we would expect the capital inputs to come from the private sector. Other recommendations, such as organisational changes and improvement in investment and banking, which were specifically mentioned from the Liberal Benches, are mainly for the Falkland Islands Government to implement. But that leaves a number of proposals—some for technical co-operation and others involving capital expenditure—which I believe my right honourable friend the Minister for Overseas Development is willing to investigate, and to support if on investigation they are found to be justified. There is, as the noble Lord reminded us, an ODM programme which is continuing, and one would hope that on investigation a number of the proposals made in the report, which are within the first category of development proposals, will be found to justify financial support.

My honourable friend the Joint Minister of State who deals with Latin American matters, Mr. Rowlands, said in another place on 1st March that he had found that the Islanders placed great importance on the problems of internal communications; also, on facilities like better schools and small local industries. The Falkland Islands Government have now submitted project applications for a road linking the capital, Stanley, with the large settlement of Darwin; for radio communications between Stanley and the settlements; for an oil landing jetty and for a school hostel. All these projects, if brought to fruition, would certainly improve the quality of life in the Islands, an improvement to which Her Majesty's Government attach the greatest importance, for reasons which we have heard mentioned in this debate tonight.

My right honourable friend Mrs. Hart, the Minister for Overseas Development, is now considering setting up the necessary feasibility studies into all these matters, especially one into the improvement of internal communications, on which the Islands as well as we ourselves place very great store, and this would include a study into the improvement of the vital internal air service. As a first step, my right honourable friend is appointing a fiscal adviser whose prime task will be to look into the possibilities of increasing revenue, so avoiding the burden of extra recurrent costs which all these projects could generate. In the long run, aid funds must be used to help the Islanders develop their own economy so that they will eventually be able to afford from their own resources—which are considerable, as we have heard—better communications, more social amenities and higher standards in the medical and social fields.

A number of speakers have made extremely interesting, and, shall I say tentatively, for the most part constructive, suggestions for the development of the resources of these Islands. I have noted the emphasis placed by a number of speakers on the need for an extension of the airfield and the terms and manner employed by my noble friend in making this point. My honourable friend the Minister of State in the other place has said that the viability of such an extension would depend on a development of the major resources of the area, and the islanders themselves accept that the development of offshore resources depends very much on Argentine co-operation. This is noted. I have no doubt that what has been said in this debate will be taken very carefully into account as our consideration both of the report and, indeed, of our relations with that part of the world develops in the near future.

At this point may I welcome very much a number of speeches which related to what we regard as an essential key to a viable and secure future for the community of these Islands—that is, the replacement of the threat of confrontation by the practice of co-operation between them and the mainland. Two points have been emphasised in this debate: the need for an assured economic future and the need for an assurance as to the constitutional position of the Islands. The one is underlined by their proximity to the mainland and the other by their distance from the homeland. It must be the duty of the British Government to work for the attainment of the one—economic development—and the maintenance of the other; a sense of assurance as to their constitutional position. I will come to that point in a moment.

The right climate of co-operation which we are seeking to promote in the whole region of the South-West Atlantic is, I believe, a key to what we wish to assure for the Falklands. As I said earlier, my honourable friend who visited the Islands found that they were aware that the present deadlock was inhibiting their economic and social development. With this in mind, the Islands' Councillors approved my honourable friend's visit to Buenos Aires to try to work out with the Argentine Government terms of reference for future negotiations aimed at breaking this deadlock. They accepted that it would be unrealistic to exclude the discussion of sovereignty from such negotiations. The question was bound to be raised, at least by one side, and realistically they accepted that it might figure in the discussions. When terms of reference for negotiations have been agreed, my right honourable friend the Foreign and Commonwealth Secretary will wish to inform Parliament. However, the Councillors also accepted the assurances of Her Majesty's Government that any negotiations would be without prejudice to present British sovereignty over the Islands.

This brings me to a point made by a number of noble Lords. From the distinguished speech which initiated this debate right through the discussion, there has been the request that I should confirm —I borrow the phrase of the noble Lord, Lord Morris—that there will be no transfer of sovereignty except as stated (I am using his words) by my honourable friend the Minister of State, Mr. Rowlands, in another place in the terms of the quotation which the noble Lord read from his speech. I have a number of quotations of reassurance which I could give, and perhaps the best thing to do is to set them out in a fair list. I will not bandy them with the noble Lord. He quoted the firm assurances on this point which have been given by the Prime Minister and by myself. There is no need to prompt any of us, least of all me, on this point. However, I will make this point on one quotation of a remark made in a speech given by my right honourable friend the Foreign Secretary when winding up the last Foreign Affairs debate in another place—the question of the word "consent".

We might indeed have a prolonged debate about the respective meanings of "acceptability", "consent" and a great many other words. I have learned to avoid these tautological involvements. What is clear can clearly be said. I believe the phrase quoted by the noble Lord, Lord Morris, from my honourable friend's speech puts it exactly. I do not want to embroider it. What my right honourable friend was stressing was the role of Parliament and the special meaning of "consent" in the Parliamentary sense, because there was nothing between him and my honourable friend in the same debate on our intentions: first, that nothing will be put to Parliament unless it is acceptable to the islanders; secondly, it will be put to Parliament, and I should imagine to both Houses. Certainly as my right honourable friend said, "to this House", referring to the other place, and I would add "and to this House also" referring to your Lordships' House.

There is a certain danger if we over-argue this point of assurance. There is absolutely no doubt in this country in legal or Government circles about where sovereignty lies. It is here, in the United Kingdom. Having made that clear in every discussion we have had with the Argentine, we propose to go on making it clear as and when necessary. Successive Governments have made it clear, and all Ministers in this Government have made it clear that there will be no transfer except in the terms which my honourable friend used in the other place. If we go on too much about this, we may reinforce uncertainties both in the Falkland Islands and possibly on the mainland. I will leave it at that on the record. It is clear enough, and I confirm tonight what my honourable friend said in the debate on foreign affairs when he wound up in the other place.

The noble Viscount raised the question of representation of the Islanders at substantive talks. I confirm two things: there have been no substantive negotiations with the Argentines yet. If and when there are, I now confirm that should the Islanders desire it arrangements will be made to ensure their presence at any substantive talks. The noble Viscount, Lord Massereene and Ferrard, and a number of other speakers asked me to make that point clear. I know of no way of making it clearer than I have put it.

I hasten to cover the more important points. If I omit a point of substance relating to the detail of life on the Islands, I am sure noble Lords will forgive me. A great many details were raised and I shall be ready to make available information on specific points in some other way if time runs on.

Some noble Lords have referred to the question of human rights in Argentina. I must repeat that this country and this Government, successive Governments in this country, of all Parties, deplore the violation of human rights wherever this occurs and we have made this clear on every possible occasion to the Governments concerned. Nevertheless, the welfare and interests of the Islanders require that we discuss with the Argentine Government and authorities economic co-operation and indeed all other matters having a bearing on the future of the Islands.

I was impressed by a number of speeches, that of the noble Viscount, Lord Montgomery, that of my noble friend Lord Garner, as well as that of my noble friend Lord Shackleton, who stressed the need for an understanding for mutual benefit between the Falkland Islanders and the Argentine Government, a tripartite understanding between us, the United Kingdom, the Islands and the mainland. This is quite essential. The noble Lord, Lord Garner, put it like this: it is necessary to have at least a degree of understanding with Argentina; otherwise we cannot move forward to develop the Islands, to give a fuller and more attractive life to the Islanders. They are within 300 miles of the mainland, after all, and they are 7,000 miles away from us geographically. I was grateful to Lord Garner for emphasising the extreme delicacy of the diplomacy needed to move forward on these lines. It is not enough to assert, not today; there is need to concert, to persuade, to attract into consensus. There is every need to be robust on principle and resilient on tactic. So far I think successive Governments have conducted these very difficult negotiations with reasonable success. The noble Viscount, Lord Montgomery, also made a plea for this co-operation, and so did a number of other speakers.

My Lords, I think the debate has been extremely useful in bringing out essential points on which I think this House, and I believe this people, are agreed. Again to quote the winding-up speech in another place—not that all the best speeches are made in another place—first, there will be no sell-out of the Islanders; secondly there will be an attempt to put into practice at least some of the recommendations made in this invaluable report, and there is no rejection of any of the recommendations; it is a matter of pace and of capacity. It is on that note I should like to end, thanking once more the noble Viscount for initiating this debate in a speech to which it was a pleasure to listen and which put the case so cogently and so effectively.

House adjourned at twenty-one minutes before ten o'clock.