HL Deb 20 February 1979 vol 398 cc1716-26

3.48 p.m.


My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows:

" With permission, Mr. Speaker, I wish to make a Statement about the current situation in Iran and the surrounding region. The people of Iran are determining their own future, and we will respect their right to do so. Iran is a country with a long history, real political and strategical significance and considerable economic potential. By our recognition we made plain our wish to have good, close relations with the new Government.

"As to our commercial relations, the events of the past few weeks have brought Iran's economy near to standstill. This is bound to have its effect on our exports, as well as on employment within the affected industries in this country. It may be some months before we see the full consequences. Nevertheless I believe our trading relations should survive the present difficulties. The greater part involves civilian goods and services of a kind Iran will continue to need once their oil production and economic activity revives.

"So far as defence equipment is concerned, the Iranian authorities indicated some weeks ago that they wanted to cancel some contracts and amend others. All the implications of this are now being examined and we will keep the House informed as to the results.

"The implications of the Iranian situation in the world energy market are potentially serious. The loss of 5 million barrels a day of Iranian crude has only been partially compensated by increased production elsewhere and so stocks everywhere are being reduced.

"We hope that the problems that have arisen will be only temporary. Meanwhile we are discussing with both our industrialised partners and with the oil-producing countries ways of mitigating their effects.

"I had valuable discussions on events in Iran during Her Majesty the Queen's very successful visits to Kuwait, Bahrain and Saudi Arabia. The Gulf States and Saudi Arabia are already adapting to the new situation and I assured them of our continuing full support.

"The new Iranian Government will wish to determine for itself the future pattern of its security arrangements and I hope they will do so in consultation with their closest neighbours.

"I am glad to say that the British community has not suffered physical harm during recent events. There are now only about 800 British citizens left in Iran. The Royal Air Force has flown out over 600 of our nationals during the past four days and others have left by sea. I am most grateful to the Royal Air Force and to the Royal Navy for their help with this difficult operation.

"Mr. Speaker, the situation is too uncertain for us to be able to make confident predictions about future developments in Iran and in the region. But it will clearly be even more important than hitherto to reach a comprehensive settlement of the Arab/Israeli dispute.

"Finally, Mr. Speaker, these last few months have seen a dramatic change in a country of pivotal importance. We will best maintain our interests and influence by being seen to respect the judgment of peoples of the region and by working with them as they shape their own destiny."

My Lords, that concludes the Statement.


My Lords, the House will wish to thank The noble Lord, Lord Goronwy-Roberts, for having repeated that Statement. I think there will be general agreement in this House that the Government had no option but to recognise the new régime. After all, it is the recognition of a fact. We must hope that the new government acquires a stability which it has not yet shown and also the capacity to prevent a take-over by the extreme Left. We in this country and in the West must do everything in our power to help the government to resist that particular fate. I should associate myself with The noble Lord in his tribute to the Royal Air Force and the Royal Navy. As is so often the case in so many circumstances, it is, in the end, the Armed Services that bail us out of our difficulties.

This area of the Middle East is absolutely vital to the West, and the consequences to us all of further instability and change in the neighbouring countries would be very grave indeed. I think that the Western powers must make it abundantly plain to all those concerned that, so important are these interests of the West and of the free world, the consequences of overt aggression or of subversion by neighbouring powers would not be tolerated or accepted by the free world. We must also analyse very carefully the reasons for the events of the past few months in Iran and make sure that our friends and allies in the neighbouring countries understand them and learn the lessons.


My Lords, we, too, should like to thank the Minister for repeating this important Statement. It is obvious that we must make every effort to get on good terms with the new government, if we can; and we can only hope that it endures and does not dissolve in anarchy or, still less, be replaced by some Communist government in close association with the Soviet Union. The Ayatollah is pretty ancient and, I believe, is not in very good health; so that anything may happen. The loss of our defence contracts which was mentioned in the Statement must be very unfortunate to us economically. We must now make every effort to turn our swords into ploughshares, as it were, and try to negotiate new contracts for such things as agricultural machinery, with technical assistance, to enable the country to develop peacefully on new lines, or whatever may be the most hopeful way of approach.

The loss of oil is grave for the Western world as a whole, even if, as is hoped, it may be partially restored within the fairly near future. But it may not be so; and therefore I trust that the Government are taking provisional precautions behind the scenes for action in the case of real emergency. For instance, some kind of petrol rationing in this country might be necessary.

I should like to know whether the Government are satisfied with the measures taken to protect our new Ambassador and his staff. One hears ugly rumours of armed bands out of control, roaming the streets of Teheran. We must therefore make a point of pressing that government at least to put effective guards on the Ambassador and the Embassy buildings.

3.57 p.m.


My Lords, I think it would be difficult to disagree with anything which The noble Lord, Lord Carrington, has said in commenting upon the Secretary of State's Statement. I agree with him that the vital interests of the West coincide with those of Iran and the immediate region. We certainly will be giving careful thought to the task of reassurance and of reinforcing stability in the immediate region. This takes me to the point made by The noble Lord, Lord Gladwyn, about one vital interest, the maintenance of oil supplies. The position is that the emergency sharing arrangements in the IEA are automatically triggered to a 7 per cent. fall in the level of supplies. That has not yet been reached. It is not yet within sight; I understand that it is well short of that. But we should beware of thinking that because a full-scale emergency has not yet been triggered there are no problems. There are real problems internationally and, it may be, nationally for a high-consuming country like ourselves; and there are others who are even higher in their consumption. This is well in hand.

As to the safety of our subjects and of our Ambassador in Teheran, I am glad to be able substantially to reassure the House that no physical harm that we know of has befallen British citizens. They have been reduced in number to about 800 but this may be a temporary fall. In due course, perhaps fairly quickly, many of them who have duties, and particularly skilled duties, to perform again in Iran may be able to go back to the country whose development, in the past 20 or 30 years in particular, depended very much upon British expertise. We have been glad to co-operate before and we shall be glad to co-operate with the new government in exactly the same kind of work in the future. On the point about the Ambassador, we have this very much in view. Perhaps it would be reassuring if I told the House that our Ambassador has already been received by the new Prime Minister and by the new Foreign Minister and that very useful and amicable talks have proceeded between him and them both.


My Lords, may I diffidently ask The noble Lord a question which I realise he may not be in a position to answer? My inquiry is not frivolous. In the course of the Statement that he read, he referred to arrangements which were being made by other oil-producing countries to adapt themselves to the new situation. I ask whether The noble Lord is in a position to amplify that ambiguous statement. Are the arrangements contemplated such as to involve an increased output of oil from those certain parts? Are the arrangements such as to affect the existing level of OPEC prices? If I may add this as a footnote to this main question, will The noble Lord inform us that all steps are being taken by Her Majesty's Government, in conjunction with our European and American allies, to meet a situation which in many respects is certainly as dangerous as any situation in the field of oil politics which we have ever confronted?


My Lords, of course discussions, not only with our European partners but with others, proceed through IEA. I touched on that in my reply to The noble Lord, Lord Gladwyn. The point is well taken, if I may say so. We are studying this very carefully. As to the ways in which other oil producing countries in that region can adjust and adapt themselves, I certainly can say—and no doubt my right honourable friend will give a more detailed statement later—that these matters came up in discussion during his talks with Ministers of the countries concerned when he was Minister in attendance to Her Majesty last week in that area. He was not there of course just to talk about oil, but rather to review the whole range of issues of common interest with countries with which we have a long, close and constructive relationship, a relationship which has survived political adaptation and which today, economically and otherwise, is as strong as ever. Certainly oil was one of the subjects discussed. I understand that he said that any contribution they felt they could make to offsetting the shortfall in world production arising from the cessation of supplies from Iran would be very welcome. Of course, he was not in a position to do more than suggest ways in which they could assist. I am quite sure that his point of view was taken. As to prices, I shall not go into this question at the moment. It is a continuing matter; there have been certain discussions and decisions lately, but I do not think that we have finalised that point yet.


My Lords, may I ask the Minister a very short question? While I thank him for the Statement—a rather reassuring Statement—all the same, is the situation in Iran really, bad as it is, a temporary position? Are the difficulties temporary when every day we have statements from other countries and other bodies telling us how badly they are treated and in what a dangerous situation they are?


My Lords, one of course cannot prophesy the course of events, especially immediately after an upheaval of this kind—an upheaval of historic significance and proportions. However, it seems that the new Government are perhaps more in accord with the broad wishes and desires of the Iranian population and will develop into a stable Government. That is all the more reason therefore why we and our friends in the West should recognise such a Government as a matter of fact, as The noble Lord said, promptly and seek to co-operate with them. By co-operation we always mean not only economic and other exchanges, but also friendly exchanges as to what we expect any régime in any part of the world to do in regard to the treatment of minorities and to maintain a basic system of tolerance and fairness.

I take the point raised by The noble Baroness. It is perhaps a little early to be definitive on the situation, but the House can be assured that we shall seek to have with the new Government of Iran the closest possible and friendliest possible relations with a view not only to trade and commerce, but also to exchanges of views and mutually helpful advice on a wide range of topics.


My Lords, The noble Lord in his opening statement said that the Iranian authorities had considered amending or cutting arms orders. Would he bear in mind that the Royal Ordnance factory at Leeds has been equipped with very modern machine tools which have been paid for by Iran? They are now producing a greatly improved Chieftain tank and the orders are very considerable indeed. Would The noble Lord first consider the desirability of not forcing skilled people into the unemployment queue? Secondly—and much more important—will he allow this order to go forward, even if Iran does not want these tanks? The tanks are badly needed, some of them by the British Army; and those not needed by the British Army could be very usefully used by our allies. It would be a shame to cut an order of such tremendous importance to this country and to the safety of the Free World.


My Lords, I should not care to anticipate the final situation which certain decisions by the previous Government to the present Government in Iran suggest. It is a delicate question and discussions are proceeding. However, I can say that we shall continue to manufacture while we have money in hand. It is of course a matter for my right honourable friend the Minister of Defence to decide whether something will be made available to the United Kingdom Armed Forces or to other forces in countries which are allied or friendly to us.


My Lords, will the Minister not realise that this is another chicken which has come home to roost, and a chicken that did not perch yesterday or any time this year? It has been hovering round for 50 years. Is it not another example of the unbroken line of failures that one can attribute to successive British Governments and certainly to the Foreign Office? Will he not now just take note of what was said by The noble Lord, Lord Carrington, and, as a major British interest, repudiate his statement that we should not tolerate a Government in Iran—


My Lords, I did not say that.

Several noble Lords: He did not say that.


My Lords, he said the West. All right. The West should not tolerate. Will my noble friend be good enough to tell us with what they would not tolerate it? Is it not about time that we recognised here that there is a revolution spreading right the way across the East and South of Asia on which we have, by our successive acts of policy, expressed ourselves and put ourselves in a position which we are powerless to influence and we shall have to sit back and take the consequences?


My Lords, I am not too sure exactly what I and the Foreign Office as a whole are being accused of, unless it is the entire ills of the world. It is a fact of course that movements, thinking and political developments are going on very fast in many parts of the world, not least in the traditional Islamic world. We are not the only ones not to have anticipated fully the pace and nature of these developments. What we are doing is to recognise fact in the form of Governments which appear to have the support of their people and a stability. On that basis, we hope to re-create and reinforce our traditional friendship with that part of the world.


My Lords, may I ask the Minister this question: In view of the long-term interest in restoring normal business relationships with Iran, will the Minister urge the international banking community to take no precipitive action in taking over Iranian assets overseas to cover the immediate debt obligations of Iran, as such action would cause a substantial deterioration in the whole confidence relationship between Iran and the Western World?


My Lords, I certainly take note of what my noble friend has said. Normal life is being restored in Iran itself, which is indicative of what is likely to be the policy in relation to Iran in the circumstances to which he referred. Businesses and banks have re-opened and people are returning to work in gratifying numbers. My noble friend Lady Gaitskell referred to the Statement as being rather reassuring: that is so. I think that on balance the prospects in Iran and our own prospects in relation to Iran, including the points raised by my noble friend Lord Taylor, are perhaps more reassuring than we would have anticipated, say, two or three weeks ago.


My Lords, following on that question, in the event of the new government repudiating contracts on the grounds that they were concluded by the previous imperial government, will my noble friend indicate whether the same facility of repudiation will be open to British banks who have given reciprocal guarantees in respect of the contracts repudiated?


My Lords, I do not think it would be helpful for me to give a hypothetical answer to a set of hypothetical, though very important, questions. The question of repudiation, I think, does not arise under present circumstances. I have indicated what I believe to be the situation: it is a hopeful situation and one in which action of that kind need not be contemplated at the moment.


My Lords, referring to the passage in the Statement which The noble Lord has repeated, that Iran is deciding its own future, taking into account the massive flow of arms and weapons into Iran in recent weeks, coupled with the significantly early arrival in Teheran of the leader of the Palestine Liberation Organisation, may I ask whether Her Majesty's Government are really confident that Iran is deciding its own future? May I ask, secondly, if the instability in Iran, which has created a significant and perhaps decisive shift in the balance of strategic power in the Middle East, should spread to the Gulf States, to Saudi Arabia and perhaps even further into the Middle East, will the policy of Her Majesty's Government be determined as a priority upon the future security and safety of the West?


My Lords, I am sure my right honourable friend would return an affirmative answer to the second point made by my noble friend. As to the genesis of the upheaval, or revolution if you like, in Iran, there will be speculation for some time about that. But it is clear, I think, that it was a popular movement which has created a situation in which the new Government is a fact and appears to be a stable fact. On that basis, as my noble friend knows from his experience as a former Minister in my Department, it is both right and sensible that we should recognise that government, whatever its origins. I am not for the moment agreeing or disagreeing with the implications as to the genesis of the revolution. I simply do not know: I do not think anybody knows just yet. All we know is that there is a new government; it is fairly stable and is substantially in control of the country; it is a government with which we can do business, diplomatic and otherwise; we have recognised it and we will work with it.


My Lords, can the Minister say whether it is proposed to make any form of protest to the new Iranian government regarding the barbaric execution of no fewer than eight generals who were reportedly machine-gunned to death without any fair trial?


My Lords, while I do not think it is a time for protest but one for endeavouring to build bridges as quickly as we can, they are well aware of our views on proceedings of this kind. The noble Lord used the word, "reportedly." This is one of the difficulties of the situation, that is, that while the broad picture is perfectly clear and justifies the action of the Government in recognising the Iranian government, the details, favourable or unfavourable, are not at all clear.