IRAN (TRADING SANCTIONS) ORDER 1980

HL Deb 09 June 1980 vol 410 cc136-56

8.59 p.m.

Lord TREFGARNE

My Lords, I beg to move that the Iran (Trading Sanctions) Order 1980, laid before the House on 29th May, be approved. With your Lordships' permission I propose to speak at the same time to the second Motion on the Order Paper in my name, relating to the Export of Goods (Control) (Iran Sanctions) Order 1980.

My Lords, may I first remind your Lordships why we are seeking approval of these two orders to implement sanctions against Iran. On 22nd April at Luxembourg the Community Foreign Ministers agreed to proceed with economic sanctions in conformity with the draft UN Security Council resolution vetoed by the Soviet Union on 13th January, if there was no decisive progress on the release of the hostages by 17th May. They decided in the meantime to take any necessary powers to implement the sanctions.

In accordance with this commitment the Government secured passage of the Iran (Temporary Powers) Act 1980 to supplement the powers we already have under the Import, Export and Customs Powers (Defence) Act 1939. At Naples on 18th May the Foreign Ministers of the Nine decided to make the necessary orders to implement the sanctions. I need not recite in detail the reactions expressed to the Naples decision, except to recall Parliament's clearly expressed view against any retrospective effect.

The Government recognised these very strong views and, as my right honourable friend the Lord Privy Seal announced on 20th May, decided to ensure that the orders would not apply to the export of goods under arrangements made before the date of the orders. My right honourable friend also explained that it was our intention to act broadly in line with our Community partners. Our partners in the Community all took action on 22nd May, by means of decrees or other regulations in accordance with their own legislation. Japan and some other countries have also taken action. We ourselves decided to implement our sanctions with effect from 30th May, the earliest practicable date under our parliamentary and statutory procedures. We have now come to seek the approval of Parliament.

I am thus asking the House to approve two orders: first, the Iran (Trading Sanctions) Order 1980, is an Order in Council made on 29th May 1980 under Section 1 of the Iran (Temporary Powers) Act 1980, which prohibits the making or performance of contracts for the sale, supply or transport of embargoed goods to Iran. Under Section 1(6) of the 1980 Act this order will lapse after 28 days unless it is approved by Resolution in each House of Parliament. Second, the Export of Goods (Control) (Iran Sanctions) Order 1980 made by the Secretary of State for Trade on 29th May 1980 under Section 1 of the Import, Export and Customs Powers (Defence) Act 1939, which prohibits the export of embargoed goods to Iran. We have given an assurance that this order will be brought before Parliament in the same way as the other order, although formal approval is not a requirement of the 1939 Act. This order will, however, be revoked if not so approved. We have also promised that the House will be given an equal opportunity to debate this order. The Motion on the Order Paper therefore seeks specific approval of the House for this order.

The two orders complement each other in various ways; they use a number of the same definitions and criteria. It is right, therefore, that we should debate both orders together. I should explain why orders need to be made under both the 1980 and 1939 Acts. The 1939 Act gives powers to control the export of goods—the main sanction called for under the resolution vetoed on 13th January. The 1980 Act enables us to take additional measures in accordance with that resolution. Let me give an example. The order under the 1980 Act, as I shall explain, applies to contracts for the supply of goods to persons in Iran. But it would not prevent a person buying goods in the United Kingdom and subsequently exporting them to Iran for his own use, because the 1980 Act provides powers only in relation to contracts related to or connected with Iran, and not sales to persons in this country. Under the 1939 Act we can prevent goods sold in this way from going to Iran.

Both orders contain a number of definitions of which two are particularly important. One is the definition of "embargoed goods". All goods are to be embargoed, except the foodstuffs and medical products specified in Part I of Schedule I to the order and the other products, specified in Part II of that schedule, if, and only if, sold or supplied for medical or surgical purposes. These same lists have been adopted by the other Community countries for this purpose.

The other important definition is that of a "contract made before the date on which this order comes into operation". This is contained in Article 2(2) of the Trade Sanctions Order and Article 1(3) of the Export of Goods Order. It is provided in Article 3(2) of the first order and Article 3(1)(e) of the second order that sanctions are not to apply to contracts for the sale or supply of goods entered into before the orders came into effect. This follows the announcement on 20th May that, in view of the clearly expressed view of Parliament, sanctions were not to be applied retrospectively.

Article 2(2) defines what is a "contract made before the date on which this order comes into operation" for the purposes of this exemption. First, a contract made before the date of the order continues to be exempt if it is modified, amended or extended after that date. The reason for this is that, quite frequently, both parties to a contract agree to minor changes to the terms of a contract—for example, to delivery dates or prices. We would not wish an otherwise exempt contract to be frustrated by sanctions because of the sort of everyday changes which businessmen make. However, modifications must not be so substantial that a contract becomes, in effect, a new contract. If that happens, it cannot escape sanctions on the grounds that it has only been modified.

Both orders also provide that the exemption for goods sold or supplied under existing contract shall apply to sales made under new contracts which are made in continuation of an established course of business dealing. To qualify under this exemption, new contracts will have to be made between the same parties. They must relate to goods of the same or a similar class, and be in continuation of a course of business dealing which existed immediately before the date on which the order came into operation, namely, 30th May 1980. Some exports to Iran are made under commercial arrangements which, although they may not amount to legally enforceable contracts, reflect longstanding and regular business commitments. It would be inequitable to draw a distinction between this sort of longstanding arrangement and formal, longterm supply contracts, and we have therefore excluded such arrangements from the retrospective effect of sanctions. This provision also reflects the clearly expressed view of Parliament that there should be no such retrospection.

Your Lordships will have seen the comments of the Joint Committee on Statutory Instruments in their 31st Report. The Government have, of course, studied their comments with great care. We naturally attach the highest importance to the views of the Committee. It is therefore right that I should say something by way of comment on the main matters which the committee have raised.

The committee expressed the view that the penalty provisions in the Trading Sanctions Order constitute an unexpected use of the powers conferred by the Act under which the order is made, namely the Iran (Temporary Powers) Act 1980. This criticism relates to Article 5 of the order. The committee point out, correctly, that the effect of this provision is that the maximum penalty applicable on summary conviction for an offence against the order may be varied by an order of the Secretary of State under Section 61 of the Criminal Law Act 1977, and that whereas amendments to the Trading Sanctions Order would normally have to be made by the procedure laid down in the 1980 Act—that is, the amending order will be subject to Affirmative Resolution of both Houses—orders under the 1977 Act are subject only to Negative Resolution of either House.

The object of framing the provision in this way was not to get round the procedural requirements of the 1980 Act, but merely to follow the procedure which Parliament had laid down in the 1977 Act for raising maximum penalities by order so that their real value can be maintained. This provision has been used in Section 33 of the Estate Agents Act 1979 and in Section 171 of the Customs and Excise Management Act 1979. It is not therefore novel. I can assure your Lordships that there is no prospect of an order under the 1977 Act being made for some time. Hopefully, by then, these orders will have long since been revoked.

The committee also thought that both orders require elucidation as regards the expression a contract made in continuation of an established course of business dealing, between the same parties relating to goods of the same or a similar class". I have already said that the view was taken that it would be unfair to discriminate against such persons who, but for the absence of a formal contract dating from before the orders, were in no different position from others who can point to such contracts. The criteria for this exception are in fact sufficiently clear for most exporters to be able to decide, if necessary with legal advice, where they stand. These criteria are: (a) established trading links; (b) the same two parties; (c) the same or a similar class of goods. accept that there may still be cases where exporters are in doubt. The only sure way of avoiding this would have been to introduce a system of export licences. The Government rejected this as an unjustifiable interruption to trade where exports under existing contracts would be clearly exempted but where exporters would require a licence, with all the verification by the authorities that this would involve, before they could ship the goods.

Finally the Joint Committee point out, correctly, that the last article of both orders gives the Secretary of State, (or the governor of a scheduled territory) an unfettered power to modify or revoke licences granted under the order, with no provision for any appeal against any such modification or revocation. They go on to point out that the effect of this is that, except in rare circumstances, there would be no right of appeal to the courts. This is correct and is equally the case for all export licences issued under the 1939 Act. The power to revoke and modify licences has been taken because, while it is not contemplated that many licences will be issued under the orders, a case could arise where it was necessary to revoke or modify a licence which had been issued—for example, if the licence had been obtained by fraud. Although it is true that it would he difficult to challenge a modification or revocation in the courts, the Secretary of State would be answerable to Parliament and the Ombudsman if he acted in an oppressive manner.

Finally, a word on administration of the orders. We are against setting up an export licensing system for Iranian sanctions. Not only would such a system mean more bureaucracy, it would also seriously interrupt trade under existing contracts while contracts were examined and licences were issued.

Sanctions will instead be operated on the basis of declarations by exporters that the goods involved are not prohibited exports under either of the two orders. Firms will be required to enter details of their exports with Customs, together with a declaration, before any goods are shipped. They will then be able to export their goods. However, we will be checking on declarations and firms may be required by the Department of Trade to furnish adequate documentary evidence to support their declarations, for example copies of existing contracts. The only exports for which this declaration will not be required are foodstuffs and medical products falling into Part I of Schedule 1 to each order. These are not embargoed goods and can be exported in the normal way.

We believe that the United Kingdom sanctions are likely to be broadly similar in effect to those adopted by other Community countries and by Japan. They have by decree, or other regulation, introduced systems of licensing for exports to Iran. The procedures adopted in each country naturally vary. It has been announced that exports under contracts signed since 4th November 1979 will not be licensed. Thus it is not possible to generalise about the likely effects of sanctions simply by comparing the regulations which each country has made. Community countries will be keeping in close touch with each other about the application of their measures. Machinery has been set up in Brussels for this purpose.

Finally, I wish to remind your Lordships that by these orders we are implementing sanctions against Iran in accordance with decisions taken by the Foreign Ministers of the Nine on 22nd April and 18th May. The additional necessary powers were granted by Parliament under the Iran (Temporary Powers) Act. The various exemptions from the effects of the sanctions meet, in the Government's view, the wishes of Parliament that sanctions should not be applied retrospectively. Our Community partners and some other countries have already introduced sanctions against Iran. It is therefore necessary that the United Kingdom should play its part.

It is not the Government's argument that these sanctions will bring Iran to its knees. This would not be possible without parallel action by the world community. It is, however, a form of action which Community Governments and those of other OECD countries have decided they should take in order to demonstrate to Iran the strength of their feelings about the continued detention of the hostages. I do not claim that they will lead directly to the release of the hostages. But I do know that the many other diplomatic and political solutions that have been attempted have not to date achieved any progress. Further such efforts are being made. I hope very much that they will succeed. However, the United States and its allies have decided that they must act together by means of economic sanctions with the aim of exerting pressure on the Iranian Government. It is for this reason that I ask the House to approve both orders. I now beg to move the first Motion standing in my name in the Order Paper.

Moved, That the order laid before the House on 29th May be approved.—(Lord Trefgarne.)

9.16 p.m.

Lord GORONWY-ROBERTS

My Lords, the Minister knows, of course, that these orders have been very heavily criticised by the Joint Committee on Statutory Instruments and in another place, but one would hardly think so from listening to the speech with which the noble Lord introduced the orders. In another place the Government have admitted that these orders are difficult to defend. In fact, they are indefensible. They are shot through with weaknesses, as their spokesman in another place has had to admit. One is bound to ask: If so, why are they being proposed at all? The simple answer, as has already been given by the Government, is because they think that something must be done to placate our American friends and allies. But, of course, the orders will do nothing of the sort.

Not only have the Government opted out of backdating their application to 14th November, as originally agreed with our Community friends, but the provisions themselves—especially concerning the exemption of contracts—are so confused and unworkable that the Government have already lost heavily in respect and credibility, not only in the United States, but also in the Community and not least in Iran itself.

When we started on this operation, many of us who believe in sanctions as a substitute for bloodshed expected that the genuine article would be produced. Within the limits of constructive consensus, we did our best to help in this matter. What do we have? We have this, which has lowered our prestige in America, in Europe and in the Far East. The House knows that I do not subscribe to the view that sanctions anyway should not be attempted. I believe exactly the opposite; that they are our last hope of substituting something effective for the arms race and for war. And they can be effective—in my view they must be—if we are all to survive. But not this kind of hypocritical bagatelle.

As they have emerged these orders and the Explanatory Notes for U.K. exporters are even less convincing than the parent Act as it was presented to Parliament by the Government. Heaven knows, that was the most unconvincing case ever made by any Front Bench in any Parliament. The result is that those of us who believe that there must be constant attempts to substitute bloodless pressure for the grim arbitrament of war in international affairs are saddled with this.

Although I cannot oppose these orders, I must protest at the way in which even the attenuated attempts which the Government took under the parent Act have been further reduced in the fact of these orders. As the hour is late, I must content myself with two or three major points, in the hope that even now the Government may attempt to redress the position. First, the provisions in regard to conditions of exemption of contracts are so confused as to be unworkable and are bound to be very unfair to exporters. I should like to quote from the Explanatory Notes for United Kingdom exporters. The first paragraph reads:

"WARNING"—

to the exporters—

These notes are intended for the guidance of exporters; they do not claim to be an authoritative statement of the law". Where is that statement? It is certainly not in these orders. It goes on: Exporters should obtain copies of the orders from [Her Majesty's Stationery Office] and if in doubt should seek legal advice". That is, they are to take their legal lives in their hands, hoping that they will not be caught out in their interpretation of what is permissible. There is not an exporter in this country, if he is aware of the provisions and the modus of these orders, who is not already quaking.

Presumably the technique will be this. If they fall foul of the random check of declarations which will be conducted by Customs—I see that the Minister is subject to random advice already—I think the phrase is "from time to time" (a Damoclean sword of prosecution hanging over the heads of all exporters) they will be taken to court on criminal charges. I think their only hope then, judging from these documents, is that the prosecution and the courts will be equally confused and uncertain as to precisely what infringement has taken place—as confused and uncertain as the delinquent exporter himself. As we have heard, the penalties are subject to the application of the Criminal Law Act 1977, and can be varied by the Secretary of State.

I wish there were time to go into this question of licences. Unfortunately, there is not. This vital debate has been pushed to the end of a very busy day; I will not say deliberately. We made our point earlier today about the timing. On this question of licences, the Government say—we have just heard it—that they are against a general system because it is bureaucratic, wasteful of time, expensive and the rest of it. Well, whether that system will be wasteful of the time, expense, and indeed liberty of exporters is a matter that we shall find out. Light bureaucracy and heavy sentences. We save on bureaucracy, and then we make up for it in the courts.

Secondly, there is no reference in the orders to future service contracts. The reason of course is that our partners, in their sanctionary zeal, decided that they have too much invested in service contracts; therefore, they should be taken out, and out they come. We have heard so much about the need to bind the 1939 Act on to all this. It is not in. Shall we, with our Community partners, be looking at the question of service contracts later, if necessary, or is that totally out? Is this the common form of Community agreement, that whatever is inconvenient to the rest of the Community we have to defer to? That service contracts, like CAP, are sacrosanct? Perhaps the Minister will reply to that.

Thirdly, am I right in assuming from all this—it is difficult to be certain—that goods made in the United Kingdom and exported to a third country, say Eire, can be picked up by British carriers, regardless of the second order, and taken to Iran? For instance, if we produce in Birmingham, British carriers may pick up in Cork and deliver in Iran. Is that the position?

Fourthly, having referred to the absence of a general licensing system, I should like to know where is the point of sanction, the point of power, and who is to exercise the supervision leading to the sanctionary application of all this. Is it Customs? I am not being ironical now and I am not unconnected with exporters who are already worried about this matter. Does it work in the following way? An exporter tries to make some sense of this and carries on. He becomes subject to scrutiny under this random check by, I believe, Customs, and perhaps he is picked up as one who has infringed, unwittingly, because he has not been able to understand this very ill-defined definition of what constitutes an exempted contract under the order, even though he has, in doubt, sought legal advice, at some expense. Having been picked up, he is prosecuted.

At that point two things may happen to him. There is a reference to a licence being revoked or modified. Which licence is that? There is no general system of licensing, so perhaps the Minister will explain what he means by a licence being revoked or modified in the case of an infringement. He is very heavily fined; in fact, for the first time since 1977, although inflation has been raging apace for most of the time since 1977, I gather it is now that the provisions of the 1977 Act are to be called in aid to enable the Secretary of State to "up" the £1,000 which is the accepted fine in these cases.

Lord TREFGARNE

That is not quite correct, my Lords. I said quite clearly in my speech that there was no immediate prospect of the 1977 Act being used.

Lord GORONWY-ROBERTS

Here is the confusion, my Lords. We take powers, and then what?

Lord TREFGARNE

I explained, my Lords.

Lord GORONWY-ROBERTS

My Lords, the present Government Front Bench must learn to take it as well as dish it out. There has been a very marked increase in the kind of adolescent sensitivity to the merest breath of criticism in the last few weeks and months, something which has been commented on not only in this House but outside. If the 1977 Act is called in aid to enable the Secretary of State to vary the amount of penalty on a delinquent exporter—

Lord TREFGARNE

That is not what I said, my Lords.

Lord GORONWY-ROBERTS

Then I have it wrong, my Lords. In that case, what is the purpose of that section of the orders which says that? Would the Minister care to explain now or later? If he says it will never be needed, why put it in?

Lord TREFGARNE

My Lords, I explained that in my speech quite clearly.

Lord GORONWY-ROBERTS

My Lords, I assumed it was put in because it might be needed. Nothing is put in because one is certain it will never be needed—that is, unless one engages in the serious operation of sanctions simply as a cosmetic and gesture operation.

There are a number of other criticism of both the orders and the explanatory notes which one would feel obliged to make. However, I shall not oppose these orders. Profoundly disappointed and alarmed though I am and others are at the way in which this has come out and the response to genuine attempts to support a consensus of constructive action in regard to the Iranian enormity, I shall not oppose the orders, although I cannot speak for every one of my noble friends. But I protest most strongly against what is turning out to be a dangerous charade, a charade because it has no real meaning and clearly was never meant to have any. It is dangerous because a weapon which ought to be used and developed as a substitute for bloodletting has been deliberately mishandled in a frivolous and cynical manner.

I feel like voting against the two orders, but my convictions despite these constant disappointments, and especially this dis- appointment, on the need to build up an effective alternative to the arms race and the nuclear holocaust that threatens mankind will enable me at least to withhold my opposition to them formally in the Lobby.

9.31 p.m.

Lord GLADWYN

My Lords, my approach to this very difficult problem—I might almost call it a dilemma—which now faces this country differs rather from that of the noble Lord who has just spoken, for various reasons that I shall attempt to give. For a very long time—in fact since 1936; that is to say, almost half a century ago—I have held the view that economic sanctions cannot work unless there is a will ultimately to employ force against the country which has offended against the international community, or a substantial part of it. As the Charter of the United Nations contemplates, there will certainly be cases in which the use of force against a country which has offended in this way is justified; nobody denies that. However, I think that most people would consider that in the present case the action of the Persian Government, however reprehensible and horrible, is not such as can possibly be rectified by the use of force. It does not in itself represent a threat to international peace and security in accordance with the words of the Charter, and if force were applied to rectify this enormity, it would in any case be entirely counter-productive because it would immediately result in the murder of the hostages, which presumably is the one thing that we find best to avoid.

My reasons for doubting the efficacity of economic sanctions in the absence of any will to use force date from a time when I was a minor official on one of the sub-committees of the League of Nations considering the application of sanctions against Mussolini's Italy, at the beginning of 1936. One of the knotty problems by which we were then confronted was whether goldfish grown in the Lombard Plain and then exported to Switzerland, where they were fed on ants' eggs and therefore fattened, and then re-exported from Switzerland, were to be considered to be Italian goldfish within the meaning of the sanctions Act, or, alternatively, owing to the Swiss addition, considered to be Swiss goldfish.

A very similar case concerned cheeses. Cheeses grown in Lombardy have also traditionally been exported to Switzerland and placed in damp cellars there, in order to become increasingly mouldy and therefore more palatable. When these cheeses were exported from Switzerland, were they to be considered to be Italian cheeses, or, by virtue of the additional bacilli, to be considered Swiss cheeses within the meaning of the sanctions Act? I quote these instances only to show the absurdity in many respects of economic sanctions as such. I find this is the kind of absurdity to which they must lead if there is any real intention to apply them.

Sanctions against Iran will surely give rise to similar problems, such as (as I think was mentioned in another place) whether advice on the propagation of sugar beet seed, which I believe is legitimate under existing contracts, could be extended to, for instance, carrots and turnips on the grounds that they are roots and therefore food, and are consequently exempt under the order. And, for that matter, what about the possible construction of sugar refineries—a matter, it could be, of many millions of pounds —on the grounds that they concern food, and, therefore, also are exempt? That is the sort of question which will arise. These and a host of other problems of the same nature will come up, and I can only hope that the courts, to which many of these cases will undoubtedly be referred, as the noble Lord, Lord GoronwyRoberts, said, will deal with possible offenders in a fairly lenient manner.

My Lords, I need hardly add that, as has also been pointed out at great length in another place, it will be extremely difficult to prevent the export through third countries of sanctionable goods; to determine whether existing contracts have only been renewed, which of course will be legitimate under these orders, or whether they are in effect new contracts: to decide on what exactly are existing "arrangements", because I believe commercial arrangements are also permitted under the orders; how best to provide for licences for alleged humanitarian exports, which can also be granted in accordance with the orders, and so on. In a word, my Lords, the loopholes are legion, and the difficulty for the Government in applying the orders will really be terrible. I understand that they feel that they are not likely to be in operation for very long, and I am sure that they hope so, as indeed we all do.

In respect of another aspect of the problem I do not think there is much reason to suppose that the actions taken by ourselves and the countries associated with us will have any very positive effect. They may exert a certain pressure on the Iranian Government, but not very much. On the contrary, I think, the Iranian Government are likely to become even more recalcitrant in regard to the release of the hostages. The orders may have some unpleasant results for the Iranian Government, but as long as the present fanatical regime is in power sanctions will not make it any more forthcoming from our point of view. In other words, scarcely anybody believes that they will achieve their declared objective, at least for a very considerable period of time and failing the emergence of some other regime in Tehran.

There might, I think, have been slightly more reason to suppose the contrary if the noble Lord, Lord Carrington, had been successful in getting the agreement of the Government to the arrangements he made in Naples for retrospective sanctions. That would have made them slightly more credible in my view; and I imagine that the noble Lord thought that he was only carrying out the original policy of the Government, which was, as I understand it, to be as nice to President Carter as possible and to back him up to every possible extent. Nevertheless, it was not approved, as I believe regrettably.

To conclude, I think the only reason for passing these orders is that it would be well to make it apparent to America, and indeed to President Carter, who is going through a difficult political period, that we are essentially doing what we can. It may not be much, but we are helping as much as possible. After all, we voted, along with our friends in the United Nations, for the resolution of last January, and if we now went back on that decision it would surely be a sign to the Ayatollah and to other extremists in Iran that the West was now divided and that the Europeans, at any rate, did not want to continue to express their extreme displeasure, to say the least, at what we all hold to be the barbarous conduct of the Iranian Government. So I agree that these are overriding arguments—and I hope that I am speaking for my noble friends when I say that for this reason, if no other, if the House divides tonight we shall vote in favour of the approval of the two orders.

9.40 p.m.

Lord HATCH of LUSBY

My Lords, my noble friend Lord Goronwy-Roberts has devastatingly exposed the technical nonsense of these orders. It will be recalled by the House that on 15th May my noble friend Lord Brockway and I spoke against the Iran (Temporary Powers) Bill, and also divided the House against it on Third Reading. I should not like it to be thought that, because it is inappropriate tonight to divide the House against these orders, they have the unanimous approval of Parliament. Indeed, what has happened since we had the debate on the Bill has only borne out the arguments that my noble friend Lord Brockway and I put on that occasion and in the interim period between the debate on the Bill and the tabling of the orders events have shown exactly what we exposed as our fears. May I say, first, that if either my noble friend Lord Brockway—and I know that I can speak for him on this—or I believed that these sanctions orders would lead to the release of the hostages in a reasonable period, we should both support them.

But that is not the issue. The issue, as we saw it, was, first, that we did not believe that the way in which these sanctions powers had been taken could lead to the release of the hostages; and, because they could not lead to the release of the hostages, we believed that they were thereby debasing the use of sanctions itself—sanctions as an instrument, as my noble friend pointed out, as an alternative, to military force. It was in that belief that we condemned the Bill that was put before the House.

On what has happened since, may I quote the noble Lord the Minister who has moved these orders tonight. In his speech on Committee on 15th May (in col. 426 if the Official Report) he said: …it is the firm intention of this Government that there should be the fullest co-ordination between member states, not only on the implementation of sanctions as a general matter, but on the detail of individual measures to be applied". He goes on: There has been continual consultation between officials of the Nine in Brussels since the decision of 22nd April in order to discuss in detail the measures under consideration, and to harmonise the way in which they will interpret the terms of and extent to which they will aply the measures in the vetoed Security Council resolution. These consultations will doubtless continue, and we are fully conscious of the need to co-ordinate both content and timing in this exercise". Of course, the noble Lord was perfectly honest in that statement; but, in practice, this is not what has been carried out because, when his noble friend the Foreign Secretary went to Naples, he was apparently of the understanding that he was going to Naples in order to carry out an agreed policy, a policy agreed by the Government here, presumably, and agreed between himself and the Nine. When he came back here he found that he did not get the support of the Government. I would suggest to the noble Lord the Minister that when he says that he found he did not get parliamentary approval, this is rather stretching the case.

When has this ever been put to Parliament? When has Parliament ever had the opportunity, been allowed the opportunity, by the Government of voting on whether or not the sanctions should be retrospective? Where was this decision taken that the Government should change their mind and repudiate the agreement which the Foreign Secretary had made? Was it in Parliament? In Downing Street? In the Conservative Central Office or some cabal of Conservative Back-Benchers? It certainly was not to my knowledge made in Parliament. To the best of my knowledge, no decision has been taken and Parliament has never had the opportunity to express its view on the agreement which the Foreign Secretary made in Naples.

The point of my raising this issue is that my noble friend Lord Brockway and I were concerned on 15th May that sanctions would be debased because they were only to be partial, because the Government were asking for powers only for partial sanctions, and we quoted the experience we had had with Rhodesian sanctions. Partial sanctions always fail, whether they are partial by intent or stealth, and both cases applied to sanctions in Rhodesia. Partial sanctions can never succeed. Only total international sanc- tions can give weight to the instrument of sanctions as a valid alternative to military force.

What has happened since 15th May has not only borne out our fears but has increased them, because the sanctions that are now to be applied under these orders are more partial than the powers that were given to the Government through that Bill on 15th May. The second reason we opposed the Bill was, as I said openly to the noble Lord, Lord Trefgarne, on that evening, that I believed that our present Foreign Secretary, the noble Lord, Lord Carrington, was the best man in the western world to lead that policy of mediation as distinct from our historical experience of the use of military power from the West in between the two great super powers, and that this was one particular in which he could lead the western powers in the policy of mediation, of diplomacy, of persuasion, of associating with other countries in different parts of the world with closer ties with the present Iranian regime than our own.

I expressed the view on that occasion that I feared the execution of that crucial task could be undermined by an unsuccessful attempted application of sanctions. What happened following the meeting in Naples has made the position of the Foreign Secretary even weaker. It has removed him from the position of being the leading diplomatic figure in western Europe. The use of these orders, which are designed to produce the maximum resentment with the minimum of result, to be willing to wound but afraid to strike—this form of sanctions—is going to increase the already growing support in the Moslem world for the Iranians. It is going to increase the power of the wildest extremists within Iran. It is going to diminish the influence of those who would attempt to modify the policy of the extremists in Iran and who might give us an opportunity, with skilful diplomacy and patience to get the hostages out alive and well, an outcome which we all desire. It is because I believe that these orders will undermine the diplomatic powers of the British Government and the British Foreign Secretary, and that all that has happened since 15th May has borne this out, that I express my total opposition to both the orders which the Minister has laid.

9.50 p.m.

Lord TREFGARNE

My Lords, I am sorry that these orders have not received the universal approbation of your Lordships. I rather thought that the speech of the noble Lord, Lord Hatch of Lusby, referred more to the Act, as it now is, which we discussed some weeks ago than to the orders before your Lordships tonight. The noble Lord complained about coordination within the European Community. As I said to him, machinery is established for this purpose. It is working very well. Of course, it is true to say that the legislative methods by which the different members of the Community apply their sanctions vary. They have different systems from ours, but, as I said, the end effects are broadly speaking the same.

Lord HATCH of LUSBY

My Lords, will the noble Lord give way for a moment? Is he saying that, although the methods differ, each of the Nine countries will apply sanctions in the same way; that we are not going to be different from the other eight in refusing to apply restrospective sanctions?

Lord TREFGARNE

My Lords, I am coming to the point of retrospection; the noble Lord must contain himself. The parliamentary position regarding retrospection became very clear when my right honourable friend the Lord Privy Seal made his first announcement on this matter. I think the noble Lord, Lord Hatch of Lusby, is naive to suggest that the view of the other place at least was not very clearly expressed. Perhaps when the noble Lord has spent a few more years in Parliament he may begin to understand how views are expressed in the other place. It was quite clear that the retrospection which was part of the original proposal could not be achieved, at least in the other place.

The noble Lord, Lord Goronwy-Roberts, seemed to be looking both ways at once. He complained first that the orders were ineffective—that they were so simplified and boiled down that they would have no effect—and then he complained almost in the next breath that the Sword of Damocles was hanging over our exporters and they would be quaking on their way to the courts. I do not think the noble Lord can have it both ways. I shall deal now with some of the detailed points he raised. He referred to random checks. There is no question of random checks. The procedure will be that the Department of Trade will scrutinise these declarations in a general way and will follow up those which it thinks are suspicious in some way or which deserve further investigation.

Lord GORONWY-ROBERTS

My Lords, I am most grateful to the noble Lord for giving way. He said the Department of Trade will scrutinise these declarations in a general way. What does the noble Lord mean? Will the Department of Trade—presumably Customs or a related department—look at every one? What does "in a general way "mean?

Lord TREFGARNE

Yes, of course, my Lords; they will look at every one and will follow up those which in their view deserve further investigation because for some reason or another they are suspicious, or perhaps the declarations do not comply with the precise wording required.

The noble Lord, Lord GoronwyRoberts, also asked me about licences. The purpose of the licence provision and the power to grant licences is in case our embargoes will have effects that we do not require on exports. For example, an occasion might arise where humanitarian goods not covered precisely in the schedule to the order are required to be sent to Iran. For instance, if there was a terrible earthquake there and it was thought necessary to send tents and blankets, these might not be specifically covered—indeed they are not specifically covered by the order—and a licence could then be issued for the purpose of sending such goods to Iran. The power to revoke such a licence, as I have said, is necessary in case that licence were obtained by fraud. As for the new service contracts, most of our European Community partners have not taken action on these and for that reason we have decided not to impose sanctions on them either.

Finally, regarding the remarks of the noble Lord, Lord Gladwyn, I do not think I agree with him when he visualised the effect of the crisis—it is no less—resulting from the taking of the hostages; but perhaps this is not the moment to go into that in detail. Likewise, perhaps the noble Lord would not wish me to follow him regarding the goldfish and the cheese, which was amusing but perhaps not wholly relevant to the matter before us tonight. I regret that your Lordships are not more wholly pleased with these orders. None the less I hope your Lordships will approve them.

On Question, Motion agreed to.