Lords Sitting of 15 May 1980

Preamble
The House met at three of the clock [Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Peterborough]:
The LORD CHANCELLOR on the Woolsack.

ZIMBABWE: MESSAGE TO PRESIDENT OF SENATE
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I have to inform your Lordships that Mr. Nollan Makombe has been elected President of the Senate of Zimbabwe.
As Speaker of the House of Lords, I should very much like to send the President a telegram of congratulations on behalf of the House. Under Standing Order 16 I may not do anything as the mouth of the House without the consent of the Lords first had. I therefore seek the agreement of your Lordships to my sending a telegram to the President of the Senate of Zimbabwe on behalf of the House.
May I take it as the wish of the House that I should do so?
Noble Lords: Hear, hear!

OIL FROM COAL: DEVELOPMENT PROGRAMME
3.2 p.m.
The Earl of KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the current development programme for extracting oil from coal, and how soon it is anticipated that this development will prove viable.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, the National Coal Board, with financial assistance from the Government, is in the final stages
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of design studies for two 25 tonne-day pilot plants to develop further the liquid solvent extraction and supercritical gas extraction processes upon which the board has been working since the early 1970s. Legal formalities are expected to be completed soon for support from the Commission of the European Communities under the EEC Alternative Energy Demonstration Programme and British Petroleum. A decision whether or not to construct the pilot plants is expected later this year. On present projections, the Department of Energy view is that liquefaction of United Kingdom coal is unlikely to be economic much before the turn of the century, and the time-scale for developing the NCB technology is consistent with this view.
The Earl of KINNOULL: My Lords, while thanking my noble friend for that informative Answer, may I ask him to tell us what is the likely funding programme that the Government might reinvest from the revenues of the North Sea oil in this important alternative energy?
The Earl of GOWRIE: My Lords, your Lordships will often have heard from Ministers of the Treasury horror at what could be called hypothecated revenue or earmarked revenue, but obviously all funding of our research programmes does come out of public expenditure and public expenditure is, in these difficult times, aided by North Sea oil.
Lord HARMAR-NICHOLLS: My Lords, in view of the criticism directed at us over the past few months, that we have not used the facilities of the European funds because we have not applied in time for grants, have we in this particular case made all necessary applications to make certain that in regard to this extra supply of energy from which all will benefit, the European funds that are available have been applied for?
The Earl of GOWRIE: Yes, my Lords, we are well ahead in that regard.
Lord STRABOLGI: My Lords, acknowledging the great work done by the National Coal Board's research station at Stoke Orchard, and remembering that very little research work of this kind was done by the individual

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private colliery companies, would the Government not recognise that this is one further justification for the nationalisation of our great coal industry?
The Earl of GOWRIE: My Lords, I have never ceased to marvel at the ingenuity with which on every single coal issue the noble Lord succeeds in bringing out that point.
Lord CAMPBELL of CROY: My Lords, does not this subject very largely depend upon world prices of crude oil, which have been increasing alarmingly, and may it not before too long be cheaper to extract oil from coal than to extract oil from OPEC?
The Earl of GOWRIE: Yes, my Lordshappily, we are still able to extract oil from our own resources, but I take my noble friend's point.
Lord SHIN WELL: My Lords, would it not be advisable for the Government, before deciding on a pilot scheme, to delve into the history of this process? Is the noble Earl aware that the first pilot scheme was adopted at the end of the First World War at the Metropolitan Gasworks, now abandoned? Hundreds of processes came before the Ministry of Mines, when I happened to be the Minister there, and before the Ministry of Fuel and Power was set up. Is the noble Lord aware that it is impossible to make an industry of this kind viable because it cannot compete with ordinarily extracted oil or with coal itself? Before indulging in expenditure on a pilot scheme, just examine the history of the hundreds of projects and see exactly where you are going.
The Earl of GOWRIE: My Lords, I am well aware that the history of the Coal Board and these schemes is not unconnected with the noble Lord's own very distinguished career. I perhaps can answer him, and amplify an answer that I should have given to my noble friend Lord Kinnoull about the general level of Government support, by saying that the agreement signed in February 1979 between the department and the Coal Board provided for Government support of up to £;·8 million for design studies, estimated to cost £1·2 million, and
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participation by others would of course reduce the Government contribution.
The Earl of HALSBURY: My Lords, will the Government be ever mindful that the finest way of securing unemployment among heavy engineering firms in perpetuity is to postpone making a beginning on the installation of full-scale plants until everybody else is doing it and has the experience, so that we then have to buy abroad?
The Earl of GOWRIE: My Lords, I appreciate the noble Earl's point, and note the support it has in the House. I would say, however, that all energy issues are about mixed systemswe are running a mixed economy where energy is concerned, and that means obviously that some priorities will have to be taken before others.
Baroness WOOTTON of ABINGER: My Lords, I was about to ask the question asked by the noble Lord, Lord Campbell of Croy, but I wanted to put in addition the question whether it is not a fact that this process is utilised on quite a considerable scale in South Africa?
The Earl of GOWRIE: My Lords, that is the case. My advice is that the particular technology utilised in South Africa, called the Sasol technology of gasification synthesis, is expected to have a substantial cost and efficiency disadvantage compared with the direct liquefaction processes we are now developing in this country.
Lord BLYTON: My Lords, is the Minister aware that as far back as 1919 Sankey's inquiry recommended that the greatest by-product of coal would be oil and that we should spend money on research? Research has taken place only in the last 25 years. Does he not think that if we spent more money on research to produce oil from coal economically it would do this country a world of good?
The Earl of GOWRIE: My Lords, as I hope my answers have made clear, we are spending a considerable amount of money on energy research. In this regard we are spending nearly £;1 million this year.
Lord RITCHIE-CALDER: My Lords, will the noble Earl agree that this process

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which we are now discussing has been discussed to my certain knowledge for 50 years—more than that—and the fact is that we are talking about something which is real. Is the noble Earl aware—he is if he has been listening to me over the past 12 years—that the German military machine ran for 12 months on oil from coal?
The Earl of GOWRIE: My Lords, I am indeed aware of that, and I do not want any of my answers to give an air of scepticism about this processI am not sceptical about this. The fact is that things have to be cost effective, and at the moment this would be very expensive to push further. As the price of oil goes up, however, so market forces will enable this process to become more cost effective.
Lord DAVIES of LEEK: My Lords, with reference to the noble Earl's important Question, and having listened to some constructive answers from the noble Earl opposite, as noted in the Domestic Coal Consumers Annual Report, why in the name of Heaven above was the Energy Commission disbanded in the euphoria of winning the election? That report says that it could have helped in research and other work. For Heaven's sake reestablish the Energy Commission!
The Earl of GOWRIE: My Lords, one can make sensible decisions without commissions.

RHODESIAN MONITORING FORCE: AWARDS
3.10 p.m.
Earl FORTESCUE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have decided to award a special medal to members of the monitoring force in Rhodesia in recognition of the tasks they carried out both before and after the recent elections.
The MINISTER of STATE, MINISTRY of DEFENCE (Lord Strathcona and Mount Royal): My Lords, I can assure the noble Lord that the possibility of an
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award for service in Southern Rhodesia is under very serious consideration.
Earl FORTESCUE: My Lords, while thanking my noble friend for that reply, may I ask whether he agrees that the monitoring force made a major contribution towards the great success achieved by the Leader of the House in his capacity as Governor?
Lord STRATHCONA and MOUNT ROYAL: My Lords, in the presence of the Leader of the House, I am, of course, happy to confirm what my noble friend has said. One cannot pay too high an honour to both the Leader and to the force which backed him up. However, lest it be thought that the Government are taking refuge in some kind of bureaucratic "bumbledom" in delaying this matter, I point out to my noble friend that it is a little more complicated than it first sounds. In the first place, it is not solely a matter for the Ministry of Defence. For example, the question arises as to whether civilians—and I can think of one civilian in particular who might be eligible—should be eligible and whether members of the Commonwealth should be eligible, and if they were, of course, the consultations would have to go quite wide.

CONCORDE: LONDON-MELBOURNE SERVICE
3.13 p.m.
Lord ORR-EWING: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what date the objections to British Airways' flying Concorde on the London-Melbourne route were finally clearedand how soon the service will start.
Lord TREFGARNE: My Lords, the Australian Government stated in May 1976 that they had given approval for Concorde to begin regular services to Australia. It is for British Airways to determine when such services should begin, but certain supersonic overflight clearances would be required.
Lord ORR-EWING: My Lords, is it not a fact that the overflying clearances have now been acquired and, if not, could they be applied for? Moreover, will my noble friend remember that the judgment of British Airways is not always perfect about the popularity of aircraft, as it was with the VC10, which it more or less condemned but which was highly profitable? Is he aware that Concorde is now making an operating profit because it is so popular with executive travellers and the like? Ought we not to run the present Concorde trial service—Bahrein to Singapore—on to Australia to see whether it is popular with the travelling public?
Lord TREFGARNE: My Lords, it is not the case that all the necessary overflight permissions are available. Indeed, there are good reasons why one should not necessarily seek those sort of rights long in advance of when they might be required. While it is true to say that Concorde is operating very satsifactorily on the North Atlantic, I understand that the commercial results on the Singapore route are, so far, not quite so good.
The Earl of KIMBERLEY: My Lords, can my noble friend confirm that one of the overflight countries is Saudi Arabia, which has now refused permission as a result of that unfortunate television film?
Lord TREFGARNE: My Lords, there are discussions going on with Saudi Arabians on that point at the moment. I hope that my noble friend will not press me.
Lord GORONWY-ROBERTS: My Lords, I do not know whether the noble Lord is able to answer this question now or perhaps later. However, can he tell us anything about the progress of negotiations on supersonic overflight clearances between us and Malaysia and India? Are those negotiations progressing, or are they at a standstill?
Lord TREFGARNE: My Lords, we have overflight permission as regards Malaysia and, indeed, we are operating through Malaysian airspace into Singapore at present. We do not have supersonic overflying rights as regards India and the aircraft, therefore, routes round the South
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of the Indian peninsular on its way to Singapore.
Lord GORONWY-ROBERTS: My Lords, I am most grateful to the noble Lord, and with the indulgence of the House may I ask whether the rather difficult point of difference between Malaysia and Singapore has now been resolved?
Lord TREFGARNE: My Lords, obviously I cannot speak for relations between Singapore and Malaysia, but I would assume so from that.
Lord BALFOUR of INCHRYE: My Lords, do the Government anticipate any trouble in getting what are termed "third" freedom rights from Singapore to Australia? If they have trouble in getting them, will they make it clear when the Australian service starts that such rights do not exist but we wish that they did exist?
Lord TREFGARNE: My Lords, I think that my noble friend is referring to what are called "fifth" freedom rights in this context. Fifth freedom rights would not be essential for the operation of this service, but they would clearly be highly desirable.
Lord PAGET of NORTHAMPTON: My Lords, can the noble Lord tell us how the operating profits, of which the noble Lord has told us, compare with the commercial losses which the company tell us they suffer from operating Concorde?
Lord TREFGARNE: My Lords, I am advised that the losses made between January 1976 and March 1979 totalled rather more than £;30 million, after making appropriate provision for depreciation. However, we do not yet have the results for 1979–80.
The Earl of KINNOULL: My Lords, can my noble friend tell me whether it is British Airways which has to apply for the overflight agreements or whether, in fact, Her Majesty's Government negotiate?
Lord TREFGARNE: My Lords, the negotiation of overflight rights would be a matter for Her Majesty's Government.

WATER SUPPLY: DOMESTIC METERS
3.17 p.m.
Baroness VICKERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many water authorities have provided water meters in domestic houses and how many are contemplating doing so in the future.
Lord MOWBRAY and STOURTON: My Lords, domestic consumers in the Malvern area already have water meters in their homes, and elsewhere there are some domestic consumers, who for special reasons, receive a measured water supply.
This year, the Anglian and Welsh Water Authorities are extending their optional metering scheme for non-domestic consumers to domestic consumers on the same terms. From 1st April 1981, the Welsh Water Authority propose to introduce a specific metering scheme for their domestic consumers. Severn-Trent Water Authority may introduce a scheme in April 1983.
Baroness VICKERS: My Lords, I thank my noble friend for that reply. Does he not think it much fairer to have meters, because there are some houses which have a washing machine, a dishwashing machine and five bathrooms, whereas a neighbour's house may have just one bathroom, and yet the occupants are charged the same water rates? Furthermore, I know of a case of a small shop in Pewsey which has no water at all but a standpipe outside which is not even fitted, and yet the owners have to pay water rates.
Lord MOWBRAY and STOURTON: My Lords, I take my noble friend's point. Water rates are calculated at the moment on a rateable value basis and, of course, that basically hurts the owners of higher rated buildings. I agree that it is hard on people who do not have a water supply. Nevertheless, having said all that, as I have on previous occasions, water and the removal of sewage is still one of the cheapest services in the country.
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The average household still pays only £1 a week.
Baroness BIRK: My Lords, following on the last remark of the noble Lord about the service being cheap, I wonder whether he can give me—if not now, perhaps later—an estimate of the cost of installing meters, and also the cost of the meter reading service, and, having regard to the Government's pledges to cut down public expenditure, tell me how many extra officials would be involved? As water is a highly capital intensive industry, would he not agree that the high interest rates are keeping the costs even higher? If this proposal is followed through, with separate meters in separate houses, would he not also agree that it could be a tax on low-income, large families and, in fact, be a disincentive to using water which is important for public health reasons?
Lord MOWBRAY and STOURTON: My Lords, in the context of high interest rates, I am not quite clear what the noble Baroness is talking about.
Baroness BIRK: My Lords, perhaps I could explain. As the cost of providing reservoirs and anything to do with water is extremely expensive, the high interest rates which we have at the moment make those costs even higher. The point I was trying to make is that the Government would be better advised to reduce interest rates than to put meters in every home, which will prove outrageously expensive.
Lord MOWBRAY and STOURTON: My Lords, as the noble Baroness knows, the Government are dedicated to reducing the high rates of interesteventually they will come down when inflation comes down. To turn to the more immediate point of the cost of meters, the exercise of assessing the cost of metering everybody was last done in 1976 and the cost then was between £650 million and £950 million. That figure is now out of date. The Anglian and Welsh Water Authorities, which are giving people the option of having meters in the near future, propose to charge approximately £70 per household to instal a meter. There is no suggestion of compulsion as regards the metering schemeit will be an optional scheme, if people think that they are being charged too much.
Lord DAVIES of PENRHYS: My Lords, will the noble Lord not agree that as a result of those people who can afford £70 having a meter installed and who will presumably reduce their use of water, those who cannot afford a meter will have to pay a higher water rate?
Lord MOWBRAY and STOURTON: My Lords, no, I am not sure that that follows. Let me take the example of a large building with a very high rateable value. The building might have few people living in itit might have just the odd washbasins and lavatories for shoppers, passers-by or what have you, but that would not reflect in the rateable value. The cost of a £70 meter and a standing charge would be of much better value to the owner of that place than if he were to retain the present system. The object is to give people a choice of whichever system they think will suit them best.
The Earl of ONSLOW: My Lords, is my noble friend aware that when metered water charges were introduced in the United States there was a saving of up to 40 per cent. of water use? But even assuming that in this country there would be a saving of up to 15 per cent. of water use—as is shown in the experiments that have been carried out, including the one at Malvern—that will not have enormous capital costs and high interest rates incurred in building new reservoirs.
Lord MOWBRAY and STOURTON: My Lords, we are an ever-increasing consumer of water. It is not good enough to pretend that by saving 15 per cent., all parts of the country will not need new reservoirs. I take the noble Earl's point. Obviously, when one has to pay for something, one looks rather more closely at whether the tap is running or the lawn needs watering. But each water authority is its own master in these matters and it has to pay its costs itself. We do not subsidise it. Each water authority can make its own charges.
Lord INGLEWOOD: My Lords, is the noble Lord aware that water authorities are becoming increasingly arrogant and powerful, and that we could save a great deal of water in this country if the Government encouraged re-cycling policies?
Lord MOWBRAY and STOURTON: My Lords, the water authorities are there to supply water to us, the public. If we waste water, we are the naughty ones. The water authorities cannot be blamed for the public wasting water.

BUSINESS OF THE HOUSE
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order No. 43 (No two Stages of a Bill to be taken on one day) be dispensed with for the purpose of taking the Iran (Temporary Powers) Bill through its Second Reading and remaining stages this day.—(Lord Soames.)
On Question, Motion agreed to.

COMMITTEE OF SELECTION
3.25 p.m.
The CHAIRMAN of COMMITTEES (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, on behalf of the Committee of Selection, That the Lord McNair be added to the Select Committee on the European Communities in the place of the Baroness Robson of Kiddington, resigned.—(Lord Aberdare.)
On Question, Motion agreed to.

MAGISTRATES' COURTS BILL [H.L.]
The Lord CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. As your Lordships will see, this is a substantial Bill of 155 clauses and 9 schedules consolidating the law relating to the jurisdiction of, and the practice and procedure before, magistrates' courts and to the function of magistrates' clerks. The consolidation is effected with certain amendments which are the subject of a report by the Law Commission (Cmnd. 7887). Save for these amendments, the Bill is pure consolidation and makes no changes in the existing law. If read a second time by your Lordships,

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it will be referred in the usual way to the Joint Committee on Consolidation Bills. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
Lord ELWYN-JONES: My Lords, I am sure that the magistracy throughout the country will welcome this consolidations, because the multiplicity of legislation relating to the magistrates' court makes it a little difficult for a busy court to see its way through it.
The LORD CHANCELLOR: My Lords, I am very grateful to the noble and learned Lord, Lord Elwyn-Jones, for his support.
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

OVERSEAS DEVELOPMENT AND CO-OPERATION BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. The Bill is a consolidation of a considerable body of law relating to the terms and conditions on which aid and assistance may be granted to overseas territories. It makes possible the repeal of no less than 17 complete Acts of Parliament and parts of 12 others, and therefore makes a useful contribution to the tidying up of the statute book. Apart from repealing as unnecessary Section 16 (1) and (2) of the West Indies Act 1967, it makes no changes in existing law. If your Lordships allow this Bill a Second Reading, it will be referred in the same way as the last Bill to the Joint Committee for its consideration. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

IMPORT OF LIVE FISH (ENGLAND AND WALES) BILL
Read 3a, and passed.

IRAN (TEMPORARY POWERS) BILL
3.29 p.m.
Lord SOAMES: My Lords, I beg to move that the Bill be now read a second time. It is now six and a half months since the deplorable events in which members of the United States Embassy in Tehran were taken hostage. During those months a sustained and strenuous effort has been made by the United States, supported by many Western countries, to secure their release by diplomatic pressure, and so far—alas!—that has come to naught. It is in this context this afternoon that I introduce for its Second Reading a short Bill which represents the Government's response to a plea by the United States—a plea which has been similarly made to our other allies in the European Community, in the alliance, and more widely—to take further steps of concrete support for the United States, including the imposition of economic sanctions.
I should like first to remind your Lordships of the sequence of events which has brought us to this not agreeable position. Nobody pretends that it is agreeable. Following the seizure of the American hostages on 4th November, the United States made a sustained attempt to secure their release by a wide-ranging use of the means available to it under international law. It presented its case to the International Court of Justice, which, on 15th December last, made an interim order urging the release of the hostages. At the same time the United States brought its case before the United Nations, and the Security Council resolution on the 4th December called unanimously for the immediate release of the hostages.
This was succeeded by a further resolution on 31st December, followed by a visit by the United Nations Secretary-General to Tehran at the beginning of this year in an unsuccessful attempt to see the hostages and secure their release. None of this activity in the UN produced any concrete result. On 13th January the Security Council considered a further draft resolution to impose a wide range of economic sanctions against Iran if it did not immediately free the hostages. The resolution attracted overwhelming support, but, as noble Lords will remember,

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it was vetoed by the Soviet Union. But the patience of the United States in trying to secure a peaceful solution to this problem, in spite of the failure of all the efforts it had made, did not stop there. A UN Commission of Enquiry visited Iran between 23rd February and the middle of March, but this again did not succeed in securing any real progress.
The patience and forbearance shown by the United States Government and people have, as I feel the sequence of events shows, been remarkable. I believe we need only consider the position we should have thought ourselves in, and the attitude in your Lordships' House and another place, had the same sort of events happened to our diplomats.
It was only on 7th April of this year—that is, some five months after the hostages had been taken—that the United States broke off diplomatic relations with Iran and imposed a range of economic sanctions similar to those provided for in the draft Security Council resolution which had been vetoed. It was also during this time that the United States asked its allies, including Britain, to take a series of steps in its support that would bring home to the Iranian authorities in a concrete way the determination of the Free World not to tolerate the continued and unacceptable violation of international law which the holding of these hostages represents.
Both Britain and its allies in the European Community have condemned the seizure of the hostages from the outset. When my right honourable friend the Prime Minister visited Washington on 17th December, she pledged publicly "nothing less than our full support to the Americans". Both we and the European Community have been constantly using our best endeavours, both in Tehran and internationally, to urge on Iran the importance of securing the immediate release of these innocent and unfortunate diplomats.
Our aim has always been to see whether we could not help in some way to achieve a peaceful solution to this problem as soon as possible. I shall not trouble the House with the details of these diplomatic endeavours, but, following the call of the United States for its allies to take concrete
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steps, the Foreign Ministers of the Nine, when they met in Luxembourg on 22nd April, issued a statement committing the Community to a wide range of political and economic measures against Iran.
These measures were to be in two parts. The first was the taking of immediate political steps—the introduction of visas, the reduction in Embassy staffs, a formal embargo on the sale of arms—and the commitment to a second stage of measures; namely, the range of economic sanctions as set out in the draft resolution put to the Security Council in January, which was vetoed. The statement also committed member states to take the necessary powers to implement such economic sanctions by the next meeting of Foreign Ministers in Naples on 17th May—that is, in two days' time.
The first stage measures we are already taking, and this Bill is concerned with the second part. The essence of this joint statement at Luxembourg lay in the complete unanimity with which the Community wished to demonstrate its determination to provide to the United States its real and practical support in the pursuit of a peaceful solution. Of course, neither the abortive American rescue operation on 25th April nor the recent seige of the Iranian Embassy in London change our own commitment to a peaceful solution, or the need to take a decisive stance. This therefore is the context within which we are today considering the Iran (Temporary Powers) Bill now before this House for its Second Reading.
I am well aware that in seeking the approval of noble Lords for a Bill of this kind we have to consider particularly carefully the question of what support the United States is going to be given by others by our partners and our competitors. It is obvious that, if sanctions are to have any effect at all and if we are to ensure that by taking steps to suspend our own trade we do not allow our competitors merely, as it were, to step into our shoes and take our trade from us, we must ensure that such steps are taken equally by others.
So far as the European Community is concerned I think I can assure noble Lords that at every stage we have maintained the closest consultation with our partners of the Nine over these measures.

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It is obviously essential that the Nine as a whole collectively agree on the detailed application of the sanctions that they may take against Iran. The machinery for continuing these consultations is already in existence and will be used to the full at every stage in the future. We have also approached other members of the OECD. In particular Japan, Canada, and Australia are taking very similar steps to those announced by the European Community. We are all conscious that only in this way will any action of this kind taken by the West in support of the United States have the impact which we all hope for and intend.
But why, it may be asked, do we need a Bill of this kind? We are committed, as I have said, to taking the powers necessary to enable us to impose against Iran on 17th May the economic sanctions which were put to the Security Council and were vetoed by the USSR. The exact nature of such sanctions will not be decided before that date, when the Foreign Ministers will be weighing carefully the situation in Iran and the appropriateness of imposing sanctions, and considering what sort of sanctions they should be in the light of the situation.
But to have available the necessary powers to enable us to implement the range, or part of the range, of economic sanctions covered by the vetoed draft resolution of the Security Council, we have no choice but to supplement our existing legislation. We have of course no powers to act under the 1946 United Nations Act because that is for a Security Council resolution which is passed, whereas this one was not. We have some powers—and considerable powers indeed—under the 1939 Import, Export and Customs Powers (Defence) Act, which gives the Secretary of State for Trade powers to prohibit or regulate the import or export of any kind of goods to and from the United Kingdom.
Powers under the 1939 Act can be brought into effect by a simple order. By statute, this does not require parliamentary discussion, but I wish to assure noble Lords that if the Government need to bring into effect powers under that Act for the purpose of sanctions against Iran, they will ensure that Parliament is given a fair opportunity to express its views. In other words, we will not take
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the 1939 Act tout court, and take the advantage of it which it enables Governments to take, because we appreicate that this is a very particular case and Parliament will want to watch every move as we progress, and hopefully we shall not have to progress too far along the line.
The 1939 Act does not, however, cover all the provisions of the draft sanctions resolution of the UN. It does not provide, for instance, for the prevention of future service contracts in support of industrial projects; it does not prohibit the use of British ships or aircraft to take goods from third countries to Iran; it makes no mention of the signature of contracts—as opposed to the physical export of goods—to supply goods to Iran. Hence, the need for an enabling Bill of this kind—and this is but an enabling Bill—to provide the Government with those additional powers required to implement the range of sanctions to which we are committed; and that is what this Bill is about.
I will, with permission, now canter through the Bill at a steady pace. Most importantly, of course, it is an enabling measure; of itself it does not impose specific sanctions but simply provides the Government with the necessary power to implement such sanctions if and when they so desire. Secondly, the Bill is very specific. Its powers are related entirely to the continued detention of the United States hostages in Iran. This is made clear in Clause 1, which takes the general powers necessary to impose sanctions in relation to contracts related to or connected with Iran in consequence of breaches of international law. The measures taken under such powers must relate to contracts connected with Iran. There are no powers under the Bill to control the export of goods as such in any way, because that comes under the 1939 Act.
Subsection (2) of Clause 1 sets out two important exceptions to the contracts which may be thus affected. No order under this Bill can apply to existing contracts or to any made before the date of any relevant order. Nor does the Bill provide for orders related to contracts for the provision of banking or other financial services. I should explain why this is, given that Section 2c of the draft resolution considered by the Security

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Council in January was concerned with the limitation of new credits or loans, the availability of deposit facilities and related matters. As noble Lords may be aware, restrictions in these areas from this country have been in force since the end of last year on the basis of guidance provided to major British banks. These arrangements have, happily, been working satisfactorily and in the circumstances we see no merit in contemplating legislative provision. In addition, the resolution considered by the Security Council did not contemplate the freezing of financial assets, which is just as well, and I can assure noble Lords therefore that this is not in any way in question, for it would run counter to ail banking ethics.
The Government are well aware of the concern that noble Lords will attach to the question of existing contracts. As I have said, the Bill gives no new powers over such contracts. However, no decision has been taken to use that power, and no decision would be taken unless it were absolutely clear—this is for new contracts—that all members of the European Community wished to do so. If we did so decide, an order under the 1939 Act would be submitted to noble Lords in exactly the same way as would any orders under this enabling Bill.
I shall conclude by considering the two issues related to the Bill which will no doubt be uppermost in the minds of noble Lords: what effect do we think the taking of sanctions will have, and why is it considered so important to take these steps following the request of the United States? I think that is the gist of the matter. The proposed economic measures for which the Government wish to take power are a very different exercise from those which once applied, happily no longer, to Rhodesia. We do not in this case consider the Iranian regime to be illegal, nor do we wish to seal its frontiers. Nor would this be possible even if we wished to attempt so to do. Nor are the sanctions designed to demonstrate a desire to have nothing further to do with Iran. On the contrary, we want good relations with Iran in as many fields as we can.
But the continued detention of the United States diplomats as hostages means that such relations are at present
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impossible. The purpose of the economic sanctions which we and the Nine have announced is to show the Iranian authorities and people that they cannot expect reasonable and fruitful relations with the West while they continue to show, by the holding of United States diplomats, the most flagrant disrespect for their fundamental international obligations.
There have been criticisms that to take such steps will both harden opinion in Iran and drive the country into the arms of the Soviet Union, while having no effect on the economy of Iran itself. To the first point I would answer that he would be a brave man who said what effect anything was going to have on the present Government in Iran and what reactions would come from them. The political situation in that country is, to say the least, confused, and the exercise of political power and judgment, we would think, unpredictable. Nor do I believe that the taking of sanctions by the West will have a negligible effect on the Iranian economy. During the last few months it has been evident that Iran's trade with the West has once more been rising. This demonstrates the fact that Iran needs, and wants, economic relations with the West. Indeed, its economy has for many years been geared overwhelmingly to rely on the West for its supplies. To deny those now would, if it were done, have, we believe, a noticeable effect.
It can be argued—can it not?—that Iran will simply turn to the Soviet Union and to communist countries to fill the gap; and certainly there is already evidence that Eastern European countries are trying to take advantage of Iran's increasing economic isolation. There has been news of economic talks between Iran and the Soviet Union, and of possible oil supply contracts with Romania and other countries. But it would be mistaken to suppose that Iran could ever, by forging close links with the Soviet Union or any of its satellites, enjoy the economic dynamism to which it has become accustomed through its trade with the West. Nor, above all, should we ignore the fundamental ideological differences which exist between those now in power in Iran and communism in general.
Obviously these factors have been taken and most carefully considered.

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Some of them can perhaps be argued either way. But any doubt that may exist in people's minds on these questions must, I think, be seen in the light of the one overriding reason for our determination and that of our allies to take such steps. The United States is our closest and most important ally. It is in trouble over its attempts to find a peaceful solution to the continued holding of its diplomats. It has asked for our help in increasing the pressure on Iran in such a way that a peaceful solution will, it is hoped, prove possible; and we see it as our duty—and we believe that noble Lords in general in the House will agree with this—as the allies of the United States to respond to that appeal for help.
Solidarity within the alliance—that is what this is about. The worst possible effect would result from the West showing the world that, on an occasion when it needs to act together with determination, it does not have the will to do so.
Lastly, my Lords, our ability to respond positively to these requests by the American Government will, I believe, provide us with the commitment to this problem, and with the moral advantage that goes with that commitment, to be able to ensure that our views on this issue and others akin to it are not only made known to the American Government, but are listened to in the future.
As regards Iran, this is of particular concern in relation to the possible use of military force to solve this problem. Noble Lords will recall that my noble friend the Secretary of State visited Washington between 3rd and 6th May. The danger of military action in this situation, to which the Prime Minister has frequently referred, inevitably arose in discussions. I can assure noble Lords that in the light of my noble friend's meeting with President Carter and his other discussions in Washington, the Government are satisfied that the Americans are well aware of the concern of their allies about the need for consultation over any future military action, and we are confident that the United States Government will take proper account of this.
This enabling Bill therefore represents three points. It represents our commitment with our allies in the European
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Community to a peaceful and, we hope, quick solution of the hostages' problem. Secondly, it represents the necessity to drive home to the Iranian authorities the fact that the continued violation of a most fundamental principle of international relations will not be tolerated by the West, and that it will act effectively to demonstrate its abhorrence.
Thirdly, the Bill represents our answer to the plea which our ally, the United States, has made for our assistance. By adopting the powers to take economic sanctions—and that is all we are doing: adopting the powers—we do not of course rule out the possibility of other parallel diplomatic moves towards a solution. Far from it. In our view these remain of very great importance. Indeed, our hopes are that it will be these moves that will eventually turn the key. Therein must lie our hope. The taking of the power to impose sanctions is intended to supplement such initiatives and to underline our commitment to their success. Therefore, I greatly hope that your Lordships will support the Bill. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord Soames.)
3.53 p.m.
Lord GORONWY-ROBERTS: My Lords, I shall certainly vote for the Bill—and with even greater confidence after hearing the speech delivered by the noble Lord the Leader of the House. He has gone very far indeed to make good the damage done by the previous presentation of the Bill in another place. If I raise one or two points of reservation they will equally be points of suggestion, designed to make the Bill more effective, if possible, and more apposite to the real objectives of the action that the Government are asking us to support.
First, I wish to refer to the motivation behind the Bill. What are the objects of the Bill? When it was introduced in the other place the Government stressed the need to maintain the health of the alliance, almost to the exclusion of any other reason for embarking upon this course of action. Vital as the alliance is to the defence of democracy in the West—I do not think that anyone in this House would minimise its importance—

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nevertheless there must be, and there must be proclaimed, a motive for this Bill and for the action that flows from it, if such proves necessary, which transcends even the importance of the alliance, and even the poignant importance of the hostages.
As the noble Lord himself has said, that motive is the need to assert the absolute duty of all countries to respect international law and codes of behaviour. If that is ever to be in serious doubt—and recent events in more than one country have cast doubt on the willingness of all to observe this basic code—then we shall be on the slide to anarchy. Everything else goes. Every country is its own judge as to how far, and in what respect, it will observe the basics of international behaviour.
The Iranian detention of the American hostages is but an outstanding example of an increasing number of incidents which endanger what I would call the civilised minimum in international relations, which over centuries all countries have very painfully evolved. There are other incidents quite as disturbing in their danger to the basics that we have gradually put together over so long a period. What has happened, and continues to happen, in Iran needs action which is sufficiently substantial and sufficiently intelligently applied—and I shall come in a moment to the question of the implementation of these provisions—so as to free the hostages, certainly, but in so doing to assert the paramountcy of what international law we have.
The Iranians and others must really understand that to defy the unanimous judgment of the International Court of Justice and to flout the unanimous demand of the United Nations last December as well as the almost unanimous decision of the Security Council in favour of sanctions to enforce the December demand, is intolerable to the rest of the world. While we may have apprehension about the effects on us of action taken to ensure that objective, nevertheless it is of overriding importance.
It was a tragedy that the Soviet Union vetoed the resolution to apply sanctions to Iran in this case. It was, and is still, in their interests, as much as in the interests of the United States and every other
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member state of the United Nations, that this dangerous business should be corrected without delay. It may well be that another attempt to obtain what should have been granted in January in the Security Council—unanimous action—may succeed; and the House will have noticed from the Marshalled List that my noble friend Lord Underhill proposes, with support from this Bench, to move an amendment in Committee designed to promote that possibility. That attempt certainly should be made.
The Bill is acceptable to me and to a number of my noble friends in terms of the way in which it has been presented this afternoon. The motivation behind it has been put clearly and with conviction; and that is important. The motivation is not merely a gesture of amity or even of solidarity with our principal friend and ally. It is that, but it is something even much more; and this I believe came out in the speech to which we have all listened. I certainly make a major point of it myself. Unless we maintain the minimum, we can never aspire to the maximum, and the minimum is now in danger from actions such as those taken in Tehran last November.
I have dealt with the dangerous deficiency in the presentation of the Bill in the other place. There are also shortcomings in its provisions and in their proposed application. Clause 1 (2) provides that no order under the Bill shall apply to existing contracts, or to any contracts made before the date on which an order under the Bill is made. Let me put this point, which has already been put repetitively and understandably in the other place. What is the position when there is implicit in an existing contract the possibility—indeed, the obligation—of renewal or extension? You sell a car and, of course, agree to provide the spare parts—but not now, under this Bill, but later.
My Lords, these are not debating points. These are points which are of immense and immediate importance to the employment of our people. As we heard in the other place, or at least have read in Hansard (or have we read in Hansard recently? At least, we have divined in various ways what the other place has been saying), they have made a strong and understandable point about

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the impact of whatever sanctions are applied to Iran on our own people, our own industries, in this country, and it is our duty to put this point as to how far the renewal of contracts and the follow-up of contracts is affected by this provision.
Secondly, the United Nations resolution on which this Bill is based exempted food and medicine from the operation of sanctions. There is no mention of this exception in the Bill, although in Clause 1 (2) (b) it explicitly says:
"An Order in Council under subsection (1) —…;shall not apply to any contract with a bank or other financial institution for the provision of banking or other financial services ".
That is included as an exception, as it were, in a kind of schedule to the Bill, but food and medicine are not.
It could be that existing guidelines operating since, I think, last December are effective. My Lords, precisely what are these guidelines? How are they operated, and in what way are they effective? Government spokesmen have been somewhat reticent on this point. I think that this afternoon the noble Lord has been more forthcoming but, if I may say so with great respect, even he has not been able to paint a full enough picture of the guidelines—what they are intended to do, what they are doing and how effective they are—so as to remove the persistent suspicion in some quarters (I do not share it; I repeat that, I do not share this suspicion, but I am bound to mention it) that somehow the financial interests in this country are being treated rather more tenderly in this matter than are the industrial interests. I repeat that I do not believe that that is the case, but I think it would be well for the Government to be a bit more explicit as to these guidelines and how they work, even to the extent of running the risk, perhaps, of encroaching on what might be called confidentiality. It is urgently necessary that people should understand that this prescriptive exemption of certain financial transactions does not mean that somehow they are being cosseted when in fact manufacturers and trade unions are being given cause for anxiety.
I pass now quickly to the question of the implementation of the Bill. The Government will proceed by Order in Council to be approved by both Houses. This applies both to this Bill and to the
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1939 Act, if those are used, of course; and we welcome very much the forthright assurance given by the noble Lord the Leader of the House that Parliament will be consulted in this way. I wonder whether the Minister who is to reply will be a little more explicit and assure us—I think he can—that each order, as it becomes necessary, will be placed before Parliament before action envisaged by the Bill or proposed by the order is in fact taken.
I make this point, not only because it is a good parliamentary point that Parliament really should not be asked to approve retrospectively anything done by a Government or an Executive, but also because it is relevant to the justifiable concern of employers and trade union leaders about the impact of whatever action we take on the employment position in various industries in parts of this country. Parliament really needs to see beforehand what is proposed, so that it can comment on behalf of the people of this country on exactly how this matter will hit them, as well as Iran. We are not engaged in this operation to harm our own people more than we pressurise the Iranians, and the only way we can avoid doing that is to have a very good look at whatever proposals are put forward in the form of orders, not in an attempt to delay action but in order to be able all the more strongly to approve action.
The Government, in agreement with other countries, will, I hope, apply sanctions gradually. I think the noble Lord indicated this; and it is quite right that they have adopted a gradualist approach. There have been two phases, which we have supported from this side of the House. Phase I was what I will call diplomatic sanctions, relating to visas, and attached to them, of course, was the stoppage of arms sales. That was stage 1, to be followed if necessary—we all understood this—by stage 2, which would be economic sanctions; and here we are, we are contemplating stage 2. But just as the two stages represented a gradualist approach, so stage 2 itself, the application of economic sanctions, should be gradualist. It will not be easy, but, of course, nothing in this field is easy, and the fact that it is difficult should not deter us from doing it and perfecting it as we go along. I see no reason at all

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why whatever sanctions as are proved to be necessary should not be applied as the situation develops, so that we are not placed in the position of having taken a total attitude to the export of goods to Iran or their import into this country, but rather that we should proceed from order to order in a gradualist way, so that we see where we are going, tightening the screw, if you like, and, hopefully, untightening it as the situation develops.
My Lords, I said just now "in agreement with other countries", and, of course, this is vital. Whatever we do we must do it pari passu with other like-minded countries. I do not blame the Government for not being able to propose sanctions as a global operation under the imprimatur of the United Nations. That was shot down, of course, by the Soviet Union. Let us be perfectly clear about this: but for their veto, we would not be facing the difficulties of applying non-military pressure on Iran in a patchy, regional sort of way, doing our best.
What a tragedy it is that they did not recognise that their own interests, as well as the interests of the whole of the world, would have been better served by their enthusiastic co-operation with the other members of the Security Council, and did not say, "This must be put right; and in the international authority, which the Security Council represents in matters of this kind, we, the Soviet Union, indeed take the lead ". How much more that would have served the prestige and, indeed, the security of the Soviet Union; because unless this kind of action is tackled effectively in one country it may need to be tackled in one way or another in some other country. Nobody is immune from this kind of attack, not even the super-powers. Indeed, certainly not a super-power, because the latest example of this kind of thing affects a super-power, the United States
This takes me to another point of anxiety which the noble Lord has spoken very clearly about: that, even within the EEC, implementation of sanctions may prove to be uneven among the member states. It is rather fashionable for Ministers to deny the possibility of competitive opportunism among friends in a situation of this sort. One is accused of being
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cynical if one mentions it. But facts are facts and, in agreeing in the EEC to engage in these sanctions, which will certainly not be inexpensive for us, we are entitled to insist upon an effective monitoring system which will see to it that what one country does—what the United Kingdom does in good faith (as in the case of the Rhodesia sanctions) —is done equally by other members of the Community—and not only the Community. Here one is conscious of the fact that this is not a global move. We are doing our best; the Community, as I understand it, has been discussing these matters with other countries—as I think I urged from this Box some weeks ago when this possibility was mentioned—and, particularly, I believe, Japan, vital in this connection, Australia, New Zealand and Canada.
May I ask what other efforts are being made to expand the base of the operation? The ideal is the whole world; but the veto has taken care of that. We should not rest entirely or even mainly upon Western Europe; we should not rest on Western Europe plus a number of like-minded countries. There are others. May I ask if contact is being made, or recruiting to join this operation conducted with countries like the Philippines, South Korea and Singapore? I mention a number of countries which, economically and otherwise, are perhaps most apposite to the part of the world that we are dealing with. In fact, are the Government contacting all those countries who voted for the December resolution in the United Nations?—because they, having expressed their view in that unanimous resolution—and the Russians took part in that unanimity—clearly should be approached with a view to their joining in on this in an equal basis dictated by equal obligations.
My Lords, the third point, and almost the final one, is this. Have the Government any ideas about preventing supplies reaching Iran through third countries? This is a special difficulty when participation is not global. It was difficult enough in regard to Rhodesia; here, it will be extremely difficult because, as the noble Lord has said, it is not part of the intention to close frontiers. The longest frontier of all is that between Iran and the Soviet Union—a frontier which could not be closed. Country A, which is a participant in this, exports to country B, which is not, and country B will presu-

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mably be free to export goods to Iran. I am not saying that this is easy to handle. The fact that we may not solve this should not deter us from continuing, with our supporters and upholders of the world authority—the United Nations' Charter—persisting in and perfecting the techniques; but it is a point which no doubt the Government and like-minded governments will be looking at.
May I draw the attention of the House to the amendment standing in the name of my noble friend, Lord Underhill, without in any way discussing its merits but so as to indicate that that bears very much upon the points that I have made respecting the United Nations? Many of us are willing to let the Government have this Bill, if, having got it, they make further efforts in the United Nations, as well as bilaterally in Tehran, to resolve the problem of the hostages and to restore proper respect for international law before implementing sanctions. It is perfectly possible to do this, I think. If the Government decide that there is no use going to the Security Council because of the possibility of repeated vetoes, there is the possibility of going to the General Assembly under the Unity for Peace procedure for which a two-thirds majority will suffice. Nor will the Government be in any difficulty about the powers they seek because, as I read in the report of the proceedings in another place, the Minister of State, Mr. Parkinson, has said:
"At Foreign Minister and Heads-of-Government level, Members of the EEC have pledged themselves by 17th May to have the powers to enforce economic sanctions envisaged by the veto to the Security Council Resolution of January ".
That is to say that what those countries who are to join in this action are required to do by 17th May is to place themselves in possession (or, depending on their procedures, in clearly imminent possession) of the powers of which they may at a future date avail themselves in concert. May 17th is not the time when sanctions begin; it is the deadline by which countries which have responded to the call of the United States should have put themselves in a position to act in that sense. Therefore, one hopes that on Saturday this country will ask—indeed, will require—that everybody is able to report that it has put itself in this position but also will urge strongly that before the next step is taken—namely, using these enablements
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to act on the economic front—a new approach is made diplomatically through the United Nations.
My Lords, it may failbut there are some indications that give one hope. There is the report from Tass about the Soviet desire, so they say, for a new departure, for more talks with the United States about Afghanistan, and there is the imminent meeting of the new Secretary of State, Senator Muskie, and Mr. Gromyko—and this looks like taking place in a reasonably friendly atmosphere. I shall not go through the indications of revived co-operation possibilities; but, all in all, it seems to me a good time to ensure that our friends and allies have taken the same steps as we have under this Bill and also to say that now we have the powers, or are about to get them, we should make one tremendous effort at the international level as well as at bilateral levels to resolve the question in a peaceful way which rules out not only the use of force but even, hopefully, the use of economic sanctions.
4.20 p.m.
Lord GLADWYN: My Lords, it is difficult to say anything very relevant on this sad affair which has not already been said at very great length just the other day in another place. Hardly anybody believes—judging from the debate there—that the economic action which we will now take against Iran will result in the immediate release of the American hostages, which is presumably the object of the exercise. Moreover, when we decided, together with our partners in the EEC, to take economic sanctions on 17th May on the broad lines of the vetoed United Nations resolution of last January, it was on the implied assumption that, if we agreed to this, the American Government, for their part, would not resort to forceful measures—an assumption which was unjustified in the event and has, to say the least, complicated the issue to a very considerable extent.
All our experience of economic sanctions has, of course, conclusively demonstrated that they do not work. They did not work against Italy in 1935–36, as I know because I was a minor official engaged in trying to apply those sanctions. They did not work against Rhodesia from 1967 to 1979. It is very difficult to quote any

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instance in which economic sanctions have ever been successful. In order to make them effective, you have to take the equivalent of military measures, such as a total blockade; and, in the case of Iran, even that might not work given now the unfortunate possibility of evading it by trade across the Soviet and even the Turkish borders. In any case, military measures are something which, for obvious reasons—I assume I am right in thinking this—we must be dead against since they can only be counter-productive, and could be very dangerous.
The fact is that whatever we do in this unfortunate affair has grave disadvantages. If we were to apply sanctions to the full extent, which on the face of it, was proposed in the vetoed United Nations resolution of last January, it would presumably mean so far as we are concerned, and among other things, cancelling existing contracts, such as the great contract for Talbot cars, with ensuing unemployment in this country. The Italians would be even more seriously damaged. Nor, I repeat, is there any reason to suppose that such action on the part of the Community—which I understand is excluded under the terms of the present Bill—would result in the liberation of the hostages. On the contrary, it might be very much more difficult to liberate them in those circumstances, as they might encourage Iranian extremists and drive Iran nearer and nearer to the Soviet Union.
Milder sanctions applying more especially to new contracts and existing services, as contemplated by the Government in their present Bill, could therefore exercise slow pressure which might eventually favour the evident desire of the moderates in Iran to free the hostages and resume relations with the West in the light of the very indifferent success enjoyed by the Mullahs in the last election.
On the other hand, a decision to exert what may be only very moderate economic pressure may be resented by American public opinion, which has been increasingly exasperated, and might even induce the American Administration to take military action, which would no doubt take the form of a naval blockade of all Iranian ports, including mining, in order to enforce it.
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So there is a real dilemma. But we on these Benches feel that on the whole the Government must be allowed to exercise their discretion to a very large extent at this very critical time. The first objective must be, by one means or another, to dissuade the Americans from taking unilateral military action of the type that I have already referred to. This could well disrupt the whole alliance and have fearful results. One cannot say what the results would be. The bad economic effects on this country of even fairly far-reaching economic sanctions would fade into insignificance compared with that.
Therefore, on the whole, the Foreign Secretary should not be in any way restricted in his operations of a very delicate character, either by a direct obligation to put off the operation of United Kingdom sanctions until the Security Council has deliberated further—though that might be desirable if our American friends agree to it—or by any obligation not to apply any sanctions until all our partners in the Community have agreed on exactly the same sort of operation. It would clearly be unfortunate if one important member was enjoying the benefits of trade when the others were deprived of it.
I doubt whether we need to have complete unanimity in the Community as to the exact nature of the sanctions to be applied, provided that they all apply more or less the same sort of sanctions. Getting complete unanimity would take time. In a word, it would be a pity if the Community were divided at all on this issue, but it would hardly be described as disastrous.
I confess I do not feel very deeply about the amendments which the Labour Opposition intend to move. Our attitude will be outlined by my noble friend Lord Banks, since I cannot stay to the end of the debate owing to a previous engagement. In any case, it is binding on the Government to lay before Parliament any order taken by virtue of this Bill, which will lapse after some days unless it is approved positively by both Houses of Parliament. On this point, I do not agree with the noble Lord, Lord Goronwy-Roberts. I think that it is a reasonable provision and I do not think that we for our part should object to it. Having said all this, I need hardly add that we naturaly will not oppose the Bill. Indeed, we approve of

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it and we agree with the sentiments expressed so well in his introduction by the noble Lord the Leader of the House.
4.29 p.m.
Lord BROCKWAY: My Lords, before this debate began, we had the advantage of reading the statements of the noble Lord, Lord Carrington, the Secretary of State for Foreign Affairs, in Washington and in Brussels. We have also had the advantage of reading the report of the discussions in another place and the statement there from the Government Benches. Yesterday there was the discussion at Brussels. Still more information, not only of the attitude of the British Government but of European Governments, can be gained from that.
The total impression that I have received is that this Bill is being introduced not with confidence in the ability of sanctions to bring about the result desired, but because a gesture of friendship to the United States is necessary. This Bill may fail even in that. It is very limited. It does not include banking, financial services, all trade existing under present contracts and even trade until the moment when sanctions are imposed. It is a very limited Bill. But yesterday in Brussels Mr. Edmund Muskie, speaking for the United States, said that he would be disappointed if the EEC did not impose—and I quote—
"full trade and economic sanctions on Iran ".
Officials accompanying him said that the United Nations resolution—vetoed by the Soviet Union—to which the rest are committeed, included existing trade. Therefore, the Bill now before us is not likely to satisfy even the United States Government. In addition, I want to draw attention to the statement of Mr. Pym, the Secretary of State for Defence, at Brussels yesterday. He pointed out that even the limited action envisaged by Britain and the European countries would be—
"more expensive to Europe and Britain than the full embargo would be on America ".
Therefore we are asked, even with these limited proposals, to carry the can in pursuit of a policy of the imposition of sanctions which few people believe can be effective.
I submit four reasons why we should not support this Bill—and may I also just say that in this House we have been given a
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free vote. While we shall not divide on the Second Reading, because the elected House of Commons yesterday endorsed it, on the Third Reading those of us who are opposed to this Bill will divide the House. I return to the four points. First, economic sanctions, even of the limited character outlined in this Bill, will place the hostages in Iran in greater danger than they are in now. No one believes that economic sanctions will be effective, but there is no doubt that they will cause intense resentment within Iran itself. Even if the recently elected Parliament in Iran had it in mind to release the hostages, it will now face overwhelming pressure from the people because of the threat of sanctions. I fear there is little doubt that it will reach a decision to maintain the hostages in detention until a trial has taken place. The Bill will be ineffective in bringing about a release of the hostages.
Secondly, it will drive an unwilling Iran to turn towards the Soviet Union for economic co-operation. The noble Lord, Lord Soames, says that the economic co-operation the Soviet Union might give would not be as full as Iran received from Western Europe; but it would be enough. Every experience in history of the imposition of sanctions has shown that the people involved were prepared to undergo sacrifices for what they believed to be in the interests of their own country.
This Bill, as I have said, will drive an unwilling Iran to turn towards the Soviet Union. The Islamic state of Iran and the communist state of the Soviet Union are not natural allies. The Islamic state is a theocratic state; the Soviet Union claims to be a Marxist state. But because sanctions will drive Iran into Soviet arms, both metaphorically and literally, it will also have the serious effect of increasing the antagonism between the West and the Soviet Union, and so prejudice the renewal of detente.
The third reason which I urge is that this Bill will rally the Islamic states behind Iran. We have not yet realised the significance of the emergence of the Islamic state in the world. The world used to consist of capitalist states, communist states and social democratic states. Now there has emerged the new Islamic state, which denies ordinary human civil liberties and which particularly denies

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the equality and freedom of women. That is a new society in the world.
It is not limited to Iran. Over most of the Middle East there are Muslim states. I do not want to pursue a discussion on that interesting problem now, but immediately Islamic solidarity with Iran is likely to have disastrous results in three ways. United opposition by the Middle East states, with their Muslim populations, would have a deadly effect on the reliability of oil supplies from the Middle East. I need not emphasise the importance of that. It would also destroy the hope of a Middle East settlement between the Arab states and Israel. It would kill any possibility of Israeli-Egyptian agreement on the future of the Palestinian territories. It would greatly increase the likelihood of an explosion in the Middle East, leading to world war. Fourthly, sanctions will increase rather than decrease the danger of military intervention in Iran.
I recognise the influence which the noble Lord, Lord Carrington, has had in Washington to discourage President Carter from using military methods. The President has recently refrained from threatening military action; but he has not withdrawn the threat, and naval and military presence in the Indian Ocean has greatly increased. I recognise, too, that Europe and Britain support sanctions, because they hope that they may avert military intervention; but, in my view, economic sanctions will fail, and then there will be an overwhelming, irresistible pressure in America for military intervention again.
Military action may begin in Iran, but it will be impossible to contain it. It will spread and, unwillingly, we shall be drawn in, because of our support of America, reserved as it is. I am sure that the only hope for the hostages in Iran is patient, persistent diplomacy. It would help if both America and Britain acknowledged that they were wrong in supporting the infamous regime of the Shah, which preceded the Islamic state.
In conclusion, I want to say one word about the nature of friendship. We are asked to pass this Bill because of our alliance with America. Friendship should not mean acquiescence and even support
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when we believe that an action is wrong, especially when it may have the disastrous consequences which I have described. Friendship means frankness. America has not not refrained from dissociating itself from Britain when it believed that we were wrong.
I recall two occasions. The first was in 1951 when a Labour Government, rather illogically, opposed the nationalisation of the British oilfields in what was then known as Persia. Herbert Morrison, our Foreign Secretary, threatened to take by force the oilfields which had been British. It was in Washington that Clem Attlee, the Prime Minister, had the American advice not to take that action and, as a result of America's influence and frankness in friendship to us, that disastrous plan was stopped. That was good advice from a friend.
The second occasion—more recently, in 1956—was the British invasion of the Suez Canal. America did not refrain then from expressing dissent, and world pressure was so great that the British forces were withdrawn. Instead of even the token support expressed in this Bill, we should now tell the Americans, in all friendliness, that even for the sake of the hostages their policy is wrong. To be silent, even to make a gesture of support, is a betrayal of real friendship. We shall not divide the House on the Second Reading, but when it comes to the Third Reading those of us who are opposed to this Bill will go into the Division Lobbies.
4.45 p.m.
The EARL of ONSLOW: My Lords, for me two points seem to arise from the speech of the noble Lord, Lord Brockway. First, I could not help noticing the difference of his views on the effectiveness of sanctions on Iran, from what he said not very long ago on the effectiveness of sanctions on Rhodesia. But the important part, on which I totally agree with him, is the danger of the cumulative effect of these sanctions upon the rest of the Islamic world. There is a danger in that.
I should like to start with two quotations. One is a very well-known one, and known well to all of your Lordships; the other is, I think, a fairly obscure one. The first is "render unto Caesar", and the second is from an old man in Kufa, to Ubaidullah iben Zayyad in the year 680. He said:

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"Stop playing with that head with your sword, for, by God, I have seen the lips of the Apostle of God pressed in kisses on those lips ",
That was after the execution by the Umaiyid Governor of what was Persia and Iraq of the grandson of the prophet Mohammed, which started the split between Shia and Sunni.
"Shia" means party, while "Sunni" means orthodoxy, and at one stage Arab historians were talking about the Shia of Yezeed, who was the Umaiyid caliph in Damascus, to whom Ubaidullah owed loyalty, and the other was the Shia of Husain, Husain being the grandson of the Prophet. You frequently see among Shia Muslims now, who are the followers of Ali or the followers of Husain, the name Abdul Husain, which means slave of Husain. This split between Shia and Sunni soon developed into an Iraqi-Persian eastern bloc split against the more orthodox Byzantine Arab Umaiyid, and has bedevilled the Arab world from the days of the great Umaiyid-Abbasid empires right through till now.
Part of the problem in Iran at the moment is that the last Shah tried to force Western orthodoxies on an intrinsically conservative Shia Immamate. It is not very well-known that when Reza Shah, as colonel of cavalry, carried out the coup in Persia in the 1920s, he wanted to imitate Kemal Attaturk. But the Shia Ayatollahs at Qum forced him to become Shah, because they were terrified of the new blood—call it the Kemal Attaturk, Nasser, Neguib strain of people—who would force Western, and bourgeois Western nationalist ideas upon an essentially very conservative Persian society.
Because the Shia Muslims are particularly prone to martyrdom there are great processions of people flogging themselves with scourges and whips throughout the Shia Muslim world, to show regret for the tragedy and the ghastliness of the result of the killing of Husain and his 72 companions in that obscure battle in the year 680. This is the historical background—the fact that Iran is split between Turkomans, Kurds, Baluchis and Muslims not only of the Shiite faith but also of the more orthodox Sunni faith. I do not know whether your Lordships are aware that the word "Azerbaijani" is derived, as a name, from one of the Greek generals of Alexander the Great. All these mix-
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tures are now in complete and utter turmoil.
I come back to my first quotation: "Render unto Ceasar …". This was the great easiness for European Christian civilisations. We could make the difference. We could argue about where the difference was but it was possible to make the difference between one's duty to one's God and one's loyalty to one's King. Ever since the great Muslim empires have been in existence and since their collapse, this easy dividing line has not been present. This is where we come back to what was said by the noble Lord, Lord Brockway, on the subject of piling the pressure on to the Islamic world and putting more difficulties into the Islamic world.
Surely what we have got in Iran at the moment is no Government at all. The only thing which is holding that Government together are these poor 50 American hostages. Somehow they have got to be got out. At present, we have got Left-wing guerrillas. We have got Turkomans and these ghastly ayatollahs. That man with the American corpses on television was absolutely repellent. It went against all the tenets of decent Muslim behaviour—as also the taking and keeping of foreign ambassadors. That goes completely against the grain of the Muslim traditions of hospitality and tolerance.
It is worth while saying, having got this Bill which obviously we shall pass, that the gap round Persia is so enormous. As the noble Lord, Lord Goronwy-Roberts, said, the net is so wide. The agents and the settled people in the Gulf States have been making their money as middlemen for donkeys' years. There is going to be some small state in the middle of nowhere—let us take Buraimi as an example—which will want to buy a nuclear power station for four acres of desert. They will happily flog it to Buraimi and it will be transshipped. I do not say that that will definitely happen—perhaps that is an exaggeration—but one can see it coming.
Turkey is under terrific economic pressure to do business because such a large percentage of its import bill is spent on oil. The possibility of gaps is so enormous as almost to make these sanctions very difficult. East Germany bought all the Rhodesian hides. Every single hide from the slaughterhouses in Rhodesia went by

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air straight to Leipzig. If we have these loose sanctions I do not think that they are going to work. All they are going to do is to provide a rallying point and a unifying point for the Government.
Having said that, noble Lords may think that I am going to say that I do not want the Government to have their Bill; but it seems to me that it is desperately important that we should keep in with the Americans so as to try to help them and give them advice. I genuinely think that they will not take that advice, or listen to it, if we do not have this Bill on the statute book. I hope that what we can do is to get the Bill on to the statute book and that then we can use diplomatic and other methods—it is very hard to suggest what they should be—to get this into the heads of the Americans without our country ever having to use sanctions. The Bill seems to have been promoted by Her Majesty's Government with just about as much enthusiasm as it was supported by the noble Lord, Lord Gladwyn. I am not making a disparaging statement; I am just saying that I think this is the case.
May I ask the Government two very small questions. Do "financial institutions" include insurance? Secondly, I know that the freezing of assets in United States subsidiary banks is sub judice, but can we have a bit of a statement on that, even though it is sub judice? The reason I produced those two quotations was because I have a strong suspicion that these subtleties are not realised in the United States State Department. I think it is absolutely essential that we understand and that our most important allies understand what is going on. I do not think that they do.
On my way here today I listened to a programme on the wireless about the American armed services. They quoted a bit from CBS news, and at the end they said, "This is the end of the CBS news on the 187th day of the captivity of the United States hostages". There are 50 hostages there. It is a heinous crime that they are there. There is no doubt that it is also making the conduct of a decent foreign policy vis-à-vis the Soviet Union very difficult indeed. I think that the President did not listen when the embassy,
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warned him that it would be stormed if the Shah went to the United States.
Perhaps one should say that we all crawled to the Shah when he was in power We certainly did. It is certainly arguable that his regime was mildly social-democratic compared with the thuggery that is going on there now. But the facts are that the United States Government are not being so subtle or intelligent as they should be. Unfortunately, they are in a election year and their eye is permanently being taken off the ball, if noble Lords will excuse the mixed metaphor, by the ghastly taking of these hostages.
With a heavy heart, I will vote for the Bill, if it comes to a Division. I will support my noble friend. However, I hope that some of these rather obscure remarks will be taken to heart.
4.58 p.m.
Lord HATCH of LUSBY: My Lords, this Bill is part of a desperately dangerous world crisis in which we are all participating at this moment. I am sure that all Members of the House would agree that since the end of the Second World War there have been two great world powers in contention, and that at those points at which these two world powers clash there is a massive danger of world conflagration which might well see the end of the human race.
In the case that we are discussing this afternoon, we can see these two superpowers stumbling about in a most sensitive but very unstable area, and that is surely a prescription for world tragedy. That situation if further compounded by the fact that this is the United States' election year in which rational policies are not necessarily followed if they may lead to electoral unpopularity in the United States. Unfortunately, in this year, or during the past six months or so, we have had the combination of the Iranian crisis and the Afghanistan crisis. These have to be considered together because they both interlock, and they escalate, by their contact with each other, the danger to world peace.
I think it would be widely accepted on all sides of this House and in the other place, and indeed in the country, that different conclusions are drawn about the wisdom of applying sanctions at this

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moment or giving the Government power to apply sanctions, and different conclusions are drawn from the same set of facts. This afternoon I was glad to hear the noble Lord, Lord Soames, putting a little more weight in the Government's case than was put in the other place, but to the world the noble Lord the Foreign Secretary has already publicly described the application of sanctions as "a gesture". It may be recalled that on Monday night of this week the noble Lord, Lord Goronwy-Roberts, and I were both arguing about the significance of sanctions in the solution of world problems, and we both agreed that sanctions were one alternative—perhaps the only alternative—to warfare. But, my Lords, sanctions as a gesture are certainly not an alternative to warfare, and it is debasing the whole significance and importance of sanctions either to describe them as a gesture or to use them as a gesture.
The noble Lord, Lord Soames, gave us a brief account of the previous events leading up to the present situation, but certain of those events he omitted and I want to remind the House that before the Russian veto against sanctions in the Security Council last January there had been a unanimous Security Council resolution in favour of the release of the hostages: a unanimous Security Council resolution which showed that the detention of those hostages was not only repugnant to the world but was recognised as a danger to all states in the world, whatever their political ideology. I would suggest on those grounds that it would have been far better, despite the veto on sanctions in January, for the United States to have pursued that line through the United Nations by using the method mentioned by my noble friend Lord Goronwy-Roberts, of taking the issue of sanctions to the General Assembly under the Uniting for Peace regulation.
I would also remind the House that the question of the hostages was again unanimously endorsed by the International Court, so that so far as the hostages are concerned virtually the whole of the international community has shown publicly its agreement in condemning their detention and in demanding that they be released. This is international unanimity, and it is only international unanimity that can make sanctions either effective or a successful weapon as an
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alternative to war. We do not have international unanimity in the actions of Her Majesty's Government in introducing this Bill.
If sanctions are to be thought of in these terms, as an alternative to military action, then we must pay attention to the fact that we are now being asked to endorse the sanctions Bill, not as an alternative to military action but as the successor to military action, and that is a very different case. Unfortunately, the United States has already resorted to military action, without consultation with her allies and, so far as we know, without our knowledge.
The Earl of ONSLOW: My Lords, will the noble Lord just make this distinction: what the United States was there doing was trying—admittedly it failed—to rescue its hostagesit was not attacking Iran, and one should make that distinction very clearly indeed.
Lord HATCH of LUSBY: My Lords, I did not say that the United States was attacking Iran; what I said was that the United States had taken military action. If you land military aircraft on foreign territory, that is taking military action. I am passing no judgment on whether the United States was correct or incorrect in trying to rescue its hostages; I am simply saying that to ask this House to support sanctions as an alternative to military action, before military action is taken, is quite different from asking the House to support sanctions after military action has been taken, because if economic sanctions are applied after military action has already been taken, those sanctions are thereby debased.
I should like to ask the noble Lord, Lord Trefgarne, who is to reply to this debate, one specific point about the military action which the United States took because, as I understand it, that action involved the use of the joint base on Diego Garcia; and as I understand it, also that base was only to be used with the approval of both the United States and the United Kingdom. I ask the Minister, was the United Kingdom Government consulted before that base was used by the United States forces? I ask this because some of us expressed the view at the time that that base was a danger to

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us, the British, if we did not have full sovereignty over its use as a military base.
As my noble friend Lord Brockway has pointed out, there is a further danger in the application of sanctions in the manner in which we are being asked to endorse them this afternoon, and that is that the sanctions are limited. I must here disagree with my noble friend Lord Goronwy-Robertssurely we learned during the experience with Rhodesia that limited and gradual sanctions are almost certain to fail. Unless sanctions are universal—or as universal as they can be made—and total, then the probability is that the escape routes will widen, and widen until they are seen to be completely ineffective. I believe that the partial application of sanctions does a disservice to the weapon of sanctions themselves as the alternative to military action and, as has been pointed out several times this afternoon, the probability is that because the sanctions are being misused in this way they will almost certainly fail in their objective.
If they fail, then what is the alternative? Surely the danger is that because sanctions have been attempted and have been seen to fail there will then be irresistible pressure in the United States for further military action. So I am afraid I see the danger that this Bill—and no one suggests it is going to assist in the release of the hostages—far from minimising the tension, dispersing the tension, or becoming an alternative to military action, is likely, because the economic sanctions are almost certain to fail, to provoke further military action from the United States.
Let me remind the House that those who have argued that we have to support this Bill in order to promote our influence with the United States have already been proved wrong. When they recall that the United States Secretary of State himself was assuring the European nations that there was no question of the use of military force and then had to resign when he found himself either overruled or deceived, the resignation of Cyrus Vance is surely a crucial issue in our consideration of the effect that this Bill is likely to have on relations between the European states and the United States.
Again, as my noble friend Lord Brock-way has pointed out, and indeed as the
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noble Earl, Lord Onslow, pointed out (I am not suggesting that anyone has the total answer to this) there is the very great danger that the application of sanctions, particularly only selective and partial sanctions, is likely to lead to a consolidation of anti-Western feeling within Iran. We are all agreed that there is no stable government in Iran, that there are a number of disparate forces striving for power. But if they feel, as they will feel if sanctions are used against them, that they are being threatened or bullied or coerced from the outside, surely we know that the lesson of the history of the nation state is that the inhabitants of Iran will unite behind those forces who put themselves up as the leaders of Iranian nationalism and sovereignty against the rest of the world.
Nor should we forget that in Iran it is well known that the Americans and the British and the rest of the Western Europeans assisted the return of the Shah in 1953, just as it is recognised in Afghanistan that the period before the invasion of the Soviet forces was hardly a period of democracy, of freedom, of prosperity. What did we do in Afghanistan before the Soviet influence became so strong? Surely once again this is a lesson of the failure to support one of our poorer potential allies, one of the poorer countries of the world, leaving a vacuum for the Soviets to fill. So, my Lords, my submission is that sanctions will be debased; the organism of sanctions will be debased by their partial use in these circumstances. They will be counter-productive by consolidating the inhabitants of Iran against the West, and in a way which will unite the whole of the Muslim world against Western Europe.
Finally, my Lords, let us look at the role that Europe as a whole can play in this world divided between the two superpowers. Europe is no longer a military power in the same league as the United States or the USSR. That does not mean to say that Europe has no influence, that Europe is no use as a mediator. I would suggest that our role today is the role of bridging the gaps where they appear between the United States and the USSR, of defusing those dangerous situations about which I spoke earlier, of associating ourselves with and bringing into consultation those intermediate states like Yugoslavia and Austria and Scandinavia,

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and above all perhaps the non-aligned states, who are so important in the determination of the future of world peace.
I would suggest specifically that we, with our long association with Islamic peoples in Malaysia and in Nigeria, have a vital role to play in this terribly dangerous situation which has arisen between the two super-powers in the Middle East, including both Iran and Afghanistan. There are joint interests between the East and the West. We have to build upon them; we have to seek them out; we have to give a lead in fostering them. Above all, I think, we have to do so through the one international organisation which is genuinely-international, namely the United Nations.
I have had my difference with the noble Lord the Foreign Secretary. I have criticised certain of his policies and will go on criticising them. I have admired particularly his coralling of his Prime Minister twelve months ago, before Lusaka, which led to the great success in Zimbabwe. Despite all these criticisms, I believe that the present Foreign Secretary, Lord Carrington, is the best man in Western Europe to hold back the hawks within the Government—and we know that the Government are divided on this; and, far more important than that, in a far wider field than that of Britain, Lord Carrington is the best representative of Western Europe to seek to lead a policy of mediation, a policy of standing between the two great super-powers, of persuading, of influencing both Moscow and Washington, of collecting around him those many states, some of which I have mentioned, which can play this immensely crucial role in saving the world from the clash of the two major powers. I believe that that role he can play, but I believe that this Bill will make it more difficult for him to play it, because this Bill will raise antagonisms which need not be raised but which should be supplanted by diplomacy and political action.
Baroness GAITSKELL: My Lords, before my noble friend sits down, I should like to point out that many of us have reservations about applying sanctions, as he said the other day. But does he not realise that there is another issue which must be taken into account and which disturbs us; namely, sympathy and friendship for the United States of America?
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Never mind their elections and never mind all the hanky-panky that goes on with those elections, are we not friends of the United States?
Lord HATCH of LUSBY: My Lords, my answer to my noble friend's question was, in fact, given by my other noble friend Lord Brockway when he—I thought very persuasively—argued that friends, indeed good friends, must be frank friends. Many people have talked about racial harmony and being able to get on with the blacks. One test that many black people will say they apply to the genuineness of their white friends, is whether a white man can say to a black man, "You are a bloody fool!", without it being offensive. In this case I would suggest to my noble friend Lady Gaitskell that if we believe, as I have argued, that sanctions are opposed to the interests of the United States as well as the interests of the United Kingdom and as well as the interests of Europe and world peace, then it is our task to say so, and if there is genuine friendship that will be accepted as frank and honest advice.
5.22 p.m.
Lord NOEL-BAKER: My Lords, in a long life devoted largely to the study of international disputes, I believe the present imbroglio in Iran to be one of the most complex and most difficult that the nations have ever faced. How did it begin?—with the fall and the exile of the Shah. Why did he fall? Why was he exiled? It is my profound conviction—and I have known people who knew him well, as I have not—that he transformed himself from a mildly reforming monarch into a rather dangerous, despotic tyrant.
The Times newspapers published details of individual cases of people who had been tortured by the Shah because they were his political opponents. But how did he come to develop his tyranny? How did he earn the hostility of his people?—very greatly by his grotesquely extravagant purchase of arms, arms supplied to him under the encouragement, indeed the pressure, of the West. There were hundreds of millions of dollars worth of arms; 900 British Chieftain tanks, more than the British Army itself possessed; missiles; aircraft; tanks; all kinds of military equipment; artillery; and small arms; everything came from the

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United States—machinery of war which the untutored soldiery of Iran were quite unequipped to use, with the result that the United States sent no fewer than 75, 000 troops to Iran to instruct the Iranian soldiery how this complicated, modern equipment should be used. Those 75, 000 troops took their families with them, and Iran paid.
The sales of arms were dangerous in themselves, for Iran was building up an arms race against Iraq which was all too likely to terminate in a disastrous war in which it would be at least possible that the Soviet Union and the United States would be involved. It was a dangerous policy. But, to the Iranians, made hostile by the Shah's acts of tyranny, the presence of the American troops was like an occupation by a foreign power to keep in office a monarch against whom their mind had turned. Let us remember not only the domestic tyrannies of the Shah, but his export of enormous amounts of Iranian taxation which were placed in his own personal name in private banks in Western countries—acts which the Iranian people regarded as the personal theft of their national resources by a monarch whom they had come to detest.
I submit to your Lordships that that gives the whole dispute two sides. On one side there are the arguments which the West has so far not adequately recognised. The Iranians feel a sense of injustice that we have not properly listened to, or recognised, their claims against the Shah, their arguments which offset and which, indeed, caused the capture and the imprisonment of the hostages which the whole world has so unanimously condemned.
The situation is complicated by the fact that, owing to the circumstances of the Shah's departure, there is today no firmly established constitutional Government in Iran—a basic fact which we must constantly bear in mind. Indeed, the President was elected by a great majority and a popular vote. He has shown that he is a man of moderation and common sense. It is my conviction—and I wish to do him no harm as regards his own people—that if he could, he would free the hostages tomorrow. However, his will does not yet prevail everywhere in Iran. There are
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other influences: the students, Khomeini and the Communist Party.
Let us reflect for one moment on the great error of our arms sales to the Shah. If, instead of making those arms sales, the Shah had built schools, hospitals and housesif he had improved the living standards of his peopleand if he had pursued much further the tentative measures of land reform which he began, then Iran would be today a bulwark of stability against communist subversion or aggression. We sought to strengthen the West against the Soviet Union by filling that country with arms. In fact, we have created a situation in which it is at least possible that a Communist Government might come to power and in which it is quite likely that the major Western interests in the country—our supplies of Iranian oil—might be very gravely endangered in an early future.
However, the President of the country is endeavouring to establish a constitutional system, and I very warmly welcome the news on the radio this morning that he has offered peace and some measure of autonomy to his Kurdish subjects. I remember the Kurdish struggle—if my memory serves me rightly with Britain involved—from League of Nations days in 1924. Certainly for very long there has been spasmodic fighting between Kurds and Iranians. If the President can succeed, by what seems to me to be generous and far-sighted proposals, in getting peace with the Kurds, that will be one long step towards the achievement of a stable Government in the country. It will release the armed forces for their proper task of maintaining order in the land. I hope that if we have any influence in the matter, we shall endeavour to ensure that these new proposals to the Kurds will succeed. It will certainly help—and perhaps in no small degree—towards the settlement of the dispute about the hostages, with which this afternoon we are primarily concerned.
I am very grateful to the noble Lord the Foreign Secretary for having explained so clearly and with such force in Washington that, in the view of Europe, warlike acts against Iran would not achieve the purposes which the United States Government have in view. What would be the most probable result of warlike actions against Iran? First, it would be a grave

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danger to the hostages. It would be almost a miracle if the three men whom the Iranians claim are proved, by United States Embassy documents, to be members of the CIA who were planted as diplomats in the Embassy in Tehran, did not lose their lives. If they did, what would happen in the United States?
But what is the other almost certain result of warlike action? It is that the oil installations, on which we depend, would be very gravely damaged. Indeed, I heard a radio account of plans being made by aircraft pilots on United States aircraft carriers in the region about the oil refineries which they would knock out as their first step. We should defeat our major purposes if war occurred.
As has been said with such great force and with such logic and eloquence by my noble friend Lord Goronwy-Roberts, sanctions are the real alternatives to war. I confess that I should feel happier if the sanctions were being imposed by the Security Council or by the Assembly of the United Nations. I shall most certainly support the amendment to be moved by my noble friend Lord Underhill in Committee. I would certainly support the suggestion made by my noble friend Lord Goronwy-Roberts that if the Soviets still persisted in a veto in the Security Council—I do not think that certain, especially in the light of news from Afghanistan this morning, news which I hope the West will not treat lightly or with scorn—we should go to the Assembly and rely on the "uniting-for-peace" resolution procedure to ensure a great majority of the Assembly in favour of imposing sanctions. I say more. I feel doubt about the validity in international law of sanctions imposed by individual countries. Are we supposed to be applying the Charter without doing it through the action of the United Nations? I do not know. I feel doubtful about the legal validity in international law of these sanctions unless they are imposed by the UN itself.
However, can we be sure that the sanctions will produce a change of heart among the rulers and the people of Iran? Will outside pressure and economic hardship force them into surrender? It is possible, and it is possible that it is right. It is possible that it is the only course. But I return to what I said a little earlier. I believe that in the quarrel between the
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United States and the Iranian people there are two sides to the argument, both of which should be heard and should be properly considered.
I shall not vote against this Bill. If the sanctions go forward as planned, the Bill will have my doubting, but provisional, support. But I say frankly that I believe there is another course which would more probably produce a real settlement and bring real peace to this area of the world, which is of such great importance to us, to Europe and to the United States. That course would be a return to dialogue through the United Nations. I welcome the sending of the tribunal from the UN to inquire into the deeds of the Shah in Persia. But I do not think that it was really adequate to the present situation, and I should like to see a wholly new initiative on a far more ambitious basis.
I should like to see the appointment of a commission of inquiry of the highest possible international standing, composed of three, four or five statesmen of different nations, including one from Islam, one from the non-aligned nations and other impartial people, certainly with adequate representation of Western views: a body of three, four or five international statesmen of prime ministerial or presidential standing—men not in office, but with the great prestige which earlier office has given them. I should like them to start a new dialogue both with Iran and with the United States. I should like to make them report to the Security Council, upon which I think it quite likely agreement with concessions to both sides could be found.
But how could such a commission be set up?—only by statesmen in the Security Council who themselves hold top government responsibility. I should like to urge on the Government that our Secretary of State, having achieved a magnificent success in Zimbabwe, should now become a leading figure in the United Nations; that he should go himself, in accordance with the provisions of the Charter, and sit in the Security Council as spokesman for Britain; that he should propose the kind of new commission of inquiry that I have suggested; that he should help to draw up terms of reference which would give confidence both to the United States and to the President and the people of

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Iran; that he should sit there as long as may be required; not a flying visit to make a speech and return to London the same night, and not a day or two, but weeks if need be.
This is the peace of the world. Do not let us forget, if I may digress, that a great American Ambassador, Mr. George Kennan, the authentic inventor of the policy of containing Russia, said in January that his nation was very greatly overreacting to the threats that were made against them in Iran and Afghanistan. He used remarkable language, quoted in The Times. He said:
"Never since 1945 have thought and discourse in Washington been so militarised as they are today ".
He went on to warn his nation against the danger of war hysteria.
I have lived through war hysteria in the years before the first and second world wars. It is a terribly dangerous frame of mind. If it should happen that the three members of the CIA should lose their lives in Iran, owing to some mistake on our side, no one can say what the reaction of the American people might not be. I believe that our Secretary of State should take this matter in hand himself; that he should go to the Security Council; that he should propose the kind of commission of inquiry I have suggested; help to draw up the terms of reference; receive the report from the commission when it comes, and seek in public debate to secure its acceptance.
Some people say that you get no results in public, only private nudges help you. I have lived through it. I remember the great days in the League of Nations when Aristide Briande sat as Foreign Minister for France, Stresseman for Germany, Austen Chamberlain and then Arthur Henderson for Britain, and I remember how dispute after dispute which proved insoluble in private was in fact brought to peaceful agreement by public debate.
I would end by making an urgent plea to the Government that the Secretary of State should act as I propose and that, above all, they should bear in mind, as my noble friend Lord Goronwy-Roberts said, that our fundamental interests in all this question is not the Gulf oil; nothing to do with power politics, it is the rule of
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law; it is the sanctity of the charter; it is peace by agreement which leaves no nation with grievances that will fester into future wars.
5.45 p.m.
Lord TREFGARNE: My Lords, I wish to begin by echoing the words of almost every noble Lord this afternoon who has referred to the seriousness and gravity of the problem before us. I do not need to recite again in detail the sequence of events which have led us to this position today, but we should I think remember (as my noble friend has said) that in November last year a group of terrorists—for they are no other—calling themselves students invaded the Embassy of the United States, seized or destroyed documents and other property and then took a number of diplomats hostage. Today, more than six months later, the Embassy remains in unlawful hands and most of all the hostages are still incarcerated. Of course the worst aspect is the position of the Iranian Government, who have at least acquiesced in these flagrant breaches of international law.
In the face of this appalling situation the United States Government have shown exemplary patience. They have tried again and again to secure the release of the hostages by peaceful means. But the various initiatives of the United Nations and the International Court of Justice, not to mention the numerous discreet approaches through third parties, have all come to nothing.
The British Government view with great regret the failure of these two United Nations' initiatives. In particular we deplore the discourtesy and obstruction afforded to Dr. Waldheim when he visited Tehran in January, and we also much regret that the subsequent Commission of Inquiry were not able to make significant progress. The British Government also view with alarm the willingness of the Iranians to ignore the ruling of the International Court of Justice.
We and our European partners have played a full and active role in all these moves. It was only when diplomacy had failed that the United States turned to its allies for help of a more practical and direct kind. Without a shadow of doubt the United States are absolutely entitled to

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the support of their friends in this matter, and accordingly we now bring forward this measure for your Lordships' approval
This Bill therefore flows directly from the events in Tehran, but also from the determination of the European members of the alliance to stand four square behind our American friends at this moment when they need us most.
In this Bill, the Government are asking for the powers to adopt economic sanctions against Iran when and if we and our European colleagues so decide. The Foreign Ministers of the Nine who will be meeting on 17th May, will be considering very carefully the current situation in Iran before deciding how best to proceed in this matter. We shall also continue to keep in the closest touch with our major allies outside the European Community and, in particular, with the Government of Japan. We are very conscious that only if there is the widest implementation of similar measures by our friends will they have the impact that is required.
It has been said that the sanctions which we may take will have no effect and that the Iranians will be able to ignore them by switching their economy to a new and closer relationship with the Soviet bloc. I would however remind your Lordships of our object in imposing economic sanctions. First, we wish to show the Iranian authorities that they cannot expect to have reasonable and fruitful relations with the West while they continue to hold the Americans hostage. Secondly, we do not believe, as some have maintained, that sanctions will have no more than a negligible effect. As my noble friend has already explained, there have in recent months been signs of increasing trade between Iran and the West. Iran needs and wants economic relations with us. It will find it very difficult to replace satisfactorily the trade that it now stands to lose by seeking to establish a closer relationship with the countries of Eastern Europe.
It has also been suggested that sanctions will simply harden political opinions in Iran and make solution of the hostages problem even more difficult. But we cannot predict with any certainty how Iran will react. The political situation in that country, as many noble Lords have said, is intensely confused. Opinion is
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divided. We hope that the people of Iran will understand from our actions that the penalties for continuing to hold the American diplomats are very serious indeed.
I should like to insert in parenthesis that, whatever they may think, the Government of Iran continues to be wholly responsible for the safety and wellbeing of the hostages. As your Lordships will have heard, they have now been dispersed to a number of different locations and this has no doubt made their protection more difficult, but the Iranian Government should be aware that their responsibilities in this matter remain as binding as ever and that if anything were to befall even one of the hostages the present crisis would at once become deeper and more grave. The dispersal followed the rescue mission on 25th April which, in the Government's view, was an entirely justified humanitarian operation, and we greatly regret that it did not succeed. It was of course in no way aimed at the Iranian people themselves. It would clearly assist if regular and comprehensive visits could be arranged through the Red Cross or other organisations. We hope that the Iranian Government will arrange these forthwith.
I come to some of the points raised during the debate. First, the noble Lord, Lord Goronwy-Roberts, asked for some assurances about the opportunity we propose to allow Parliament to consider our proposals, particularly under the 1939 Act, which do not in the strictest sense of the word require formal parliamentary approval. While the Government are sympathetic to Parliament's wish for an affirmative method of control of the substance of orders to implement sanctions against Iran, we see serious difficulties in providing, in legislation or otherwise, that orders cannot be made until a draft order has been approved by a Resolution of each House of Parliament. This could mean that, if it were the general wish of our European partners to proceed swiftly to the application of sanctions, we would require to hold up the entire operation for several weeks while drafts of the necessary orders were debated by both Houses. This would clearly be unacceptable, having regard to our undertaking to have ready legislative powers which can be used quickly in the

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event of a collective decision. Moreover, it has been found that serious delays could be caused where it is desired to legislate when Parliament is not in session, and this therefore makes the proposal impracticable.
Lord GORONWY-ROBERTS: My Lords, I hope the noble Lord will take that back and look at it again. It need not take anything like weeks. We would co-operate swiftly and expeditiously to give attention to any order that was immediately necessary. My personal view is that possibly we may be quicker off the mark than some at least of our partners in the Community in this matter.
Lord TREFGARNE: I will certainly consider what the noble Lord has said, my Lords, but we are still left with the difficulty, even having regard to the probability of maximum Opposition cooperation in this matter, of what to do when Parliament is not in session, for example, in the Summer Recess which might go on for several weeks, even months.
The noble Lord, Lord Goronwy-Roberts, also asked about the renewal of contracts which might otherwise be precluded when and if these orders come into force. The Government intend to be flexible on the question of renewals or extensions of existing contracts. We recognise that frequently a new contract is required for purely technical reasons—to set a slightly increased price in view of inflation or to extend a delivery date which cannot be met—and that kind of case, where in substance it is the same contract, we shall regard as a contract made before the date on which the order is made and therefore excluded from the powers of the Bill.
Where, on the other hand, there is a major change in the terms of the contract, or a contract which has come to an end is renewed, we propose to regard that as a new contract covered by the powers in the Bill. This will inevitably leave some room for administrative discretion but should enable the problem to be approached on a fair and sensible basis. The Government have however not reached final conclusions on how the problem of distinguishing between existing and new contracts should be dealt with and final
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decisions will not be made until an Order in Council is drafted.
The noble Lord, Lord Goronwy-Roberts, also asked about expanding the base of our discussions in connection with those nations which might decide to take sanctions. We have, as my noble friend said, been endeavouring to secure as wide support as possible for sanctions. Naturally, these have tended to concentrate on Iran's major trading partners. It is of course not possible to ensure that all countries follow suit, but we are confident that the leading members of OECD, and in particular Japan, as I said, will be taking similar steps to ourselves, and I can assure the noble Lord that these consultations will continue. The noble Lord may also be assured that our major competitors in the supply of sophisticated goods to Iran which are necessary to its economic wellbeing will be acting in concert with us. The noble Lord listed a number of countries, a good many of which come from what is generally known as the non-aligned movement. That movement tend to plough a furrow of their own, but we hope they will see the dangers of the present situation to themselves and act accordingly.
My noble friend Lord Onslow asked, first of all, about insurance. Although financial institutions will probably cover insurance companies and financial services cover insurance contracts, there was nothing actually in the Security Council resolution on insurance, so I am afraid this is something of an academic point at the moment.
The Earl of ONSLOW: My Lords, I forgot, when I asked that question, to declare an interest. I am an underwriter at Lloyd's and I should have said so at the time. I apologise to the House.
Lord TREFGARNE: My Lords, I am sure your Lordships will accept that. Perhaps my noble friend will allow me to write to him on the question of insurance companies because it is a rather complex and involved matter which might unduly detain your Lordships now. As for the question of the subsidiary branches of United States banks, which my noble friend also raised, the matter is sub judice, as my noble friend mentioned, but in the meantime the assets are blocked apparently pending the outcome of the litigation.

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Several noble Lords raised the question of the General Assembly and the possibility of using the voting for peace procedure. The difficulty with that procedure is that the resolutions that might flow from the General Assembly are not in general binding and do not have the same effect as a Security Council resolution under Article 41, so I think there would be considerable shortcomings in proceeding along the lines noble Lords have proposed.
We must not forget the other major issue at stake in this present crisis, for if we do, we are ignoring the wide-ranging international implications of the hostage problem. It is vital for the West that in demonstrating its determination to stand up against the taking of hostages in Iran, it demonstrates also its central concern to respond to a request for assistance that has been made by its major and most important ally. But quite apart from the need to support the United States, we also desire to promote a peaceful solution to this problem.
The use of military force would be an extremely grave step. My noble friend the Secretary of State has already made our concern on this point very clear to the United States Government. In responding to the call for assistance which the Americans have made, we shall be helping to ensure that our future advice counts for something, and that we are listened to because we are prepared to offer real support to our friends in time of need and trouble. The Bill before your Lordships therefore reflects in a concrete form these important issues. But most important of all it reflects the need to take positive steps to assist our American friends. What sort of an ally would we be if we were to fail them now? My Lords, I beg to move.
Lord HATCH of LUSBY: My Lords, may I remind the noble Lord that he has not answered the specific question that I asked him concerning Diego Garcia?
Lord TREFGARNE: My Lords, I have nothing to add to what my right honourable friend the Prime Minister said in the other place on 1st May.
Lord MISHCON: My Lords, before the noble Lord sits down, I wonder whether I am under a misapprehension, and, if I am, would he please forgive me for this
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intervention? I understood the noble Lord to say in answer to the question of my noble friend Lord Goronwy-Roberts as to Parliament having the opportunity of pronouncing before there was an exercise of powers under the 1939 Act, that that might not be possible because of lack of time and also because the matter might be dealt with during Recess. If I understood the noble Lord correctly, would he therefore permit me to quote what his honourable friend Mr. Hurd said on the Second Reading of the Bill, as reported at column 919 of Hansard of 12th May:
"If [in] the context of Iran it were decided, at any future time, by the Government to make use of their powers under the 1939 Act, the House would be given an opportunity to pronounce on that exercise of powers, even though there is no such requirement in the Act ".
Lord TREFGARNE: Yes, my Lords; that is entirely right. What I have not been prepared to undertake is that that pronouncement should be made before the powers came into force.
On Question, Bill read 2a and committed to a Committee of the Whole House.
Then, Standing Order No. 43 having been dispensed with, pursuant to Resolution:
6.2 p.m.
Lord TREFGARNE: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Trefgarne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord JACQUES in the Chair.]
Clause 1 [Powers with respect to certain contracts relating to or connected with Iran]:
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 1:
Page 1, line 12, at end insert—
(" () No Order in Council shall be made under this section until the Security Council of the United Nations has after the passing of this Act discussed the breaches of international law as set out in subsection (1) of this section.").
The noble Lord said: Obviously there is complete agreement in your Lordships' Committee as regards condemnation of

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the acts perpetrated in Iran—the breaches of international law. It is this question of international law which has prompted the amendment. This concern is shared by those of my noble friends who have given their support to the amendment. I must make it clear that I have not discussed with my noble friends the terms in which I shall propose the amendment. No doubt if they disagree with what I say, they will say so. I am very grateful to my noble friend Lord Goronwy-Roberts for what appeared to be sympathy with the terms of the amendment which I am proposing, and other noble friends appeared to indicate similar support.
Who can fail to be impressed by the logic and wisdom of my noble friend Lord Noel-Baker, as displayed in his eloquent and moving speech? In fact it would almost be satisfactory to leave the amendment as if he had moved it; but it is my aim, perhaps in a most inadequate way, to put forward the reasons for it. First, there is the question of international law, to which I have referred. Secondly, there is the question of the effect on our already strained economy of an inadequate, hasty and perhaps ill-conceived sanctions policy. Thirdly, an injudicious or military move could severely worsen the situation, as was made clear by the noble Lord, Lord Soames, in his opening speech. This last aspect of the matter requires no elaboration from me.
With regard to the question of the possible effect of an inadequate sanctions policy on our own economy, I have read the report of the Committee stage of the Bill in the other place, and we simply cannot ignore the points made from many quarters about the likely effect on our economy arising from possible actions by other nations who may not follow a sanctions policy. I was pleased to note that that point, too, was emphasised by the noble Lord, Lord Soames. This is just one reason why action must be concerted and fully international, applied through the United Nations.
However, the primary concern of the amendment relates to the first of my three points—that relating to international law. If this issue is not resolved, and if the tragic and, yes, brutal events in Iran are repeated elsewhere, international law would be placed in grave danger generally. What has taken place represents a funda-
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mental challenge to international law. It is absolutely vital that the inviolability of diplomatic personnel is assured. I know that your Lordships will agree that without that normal diplomatic relations, which are so essential for the conduct of international law, would become virtually impossible. Every nation that has diplomatic representation—that is, all the member states of the United Nations—are involved. Therefore, all nations must somehow be made to act in concert on this issue. It is in the interests of all nations, including the Soviet Union, as has been said by my noble friend, that this matter should be clarified and cleared up.
No matter how understandable may be the objectives, it is not sufficient for the United States to act alone; it is not sufficient for the United States and Britain to act alone; nor is it sufficient for the United States and the nine members of the EEC to act alone. Action must be through the United Nations. All nations are bound up in this issue—I emphasise "all nations"—if diplomatic custom and usage, and international relations and international law, are to be safeguarded.
It may be argued, and it has already been mentioned, that the Security Council failed to adopt the draft resolution in January owing to the negative vote of the Soviet Union. That is no justification for any nations, whoever they may be, believing that they can settle this issue themselves. A false move could worsen matters. As my noble friend Lord Hatch of Lusby mentioned, there was an international consensus in the Security Council in December when a resolution on the actions by Iran was adopted unanimously. That international consensus must be re-established.
I should have preferred this problem and the question of a sanctions policy to be referred to a special emergency session of the General Assembly of the United Nations. However, I am advised that in the circumstances this would not be practicable, and that is why the amendment refers to the Security Council. In any event it is possible to convene a meeting of the Security Council very quickly—in a matter of hours, I believe. Therefore, there is no question of possible delay being put forward as an excuse or a justification for not supporting the amend-

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ment. There cannot be a sensible and effective sanctions policy without a full and meaningful United Nations action. If anarchy is to be avoided, there must be real international action. That can only be action through the United Nations, and that is the purpose behind this amendment.
On a personal note, may I say that under no circumstances will I vote against this Bill. I do not believe it is the job of any one of your Lordships to oppose a democratic decision of the elected House. But if the amendment which I have moved is carried, then despite some of the imperfections I can see in the Bill I would be prepared to vote for the Government's Bill—but only if it is attached to the United Nations amendment, which I beg to move.
Lord MISHCON: In order to prove the complete liberty which, on matters of this kind, is cast upon the Benches on which I have the honour to sit, may I immediately rise to say that, great as is my respect for my noble friend Lord Underhill, I rise to oppose his amendment. I do so with the history of this matter in mind; and, your Lordships having heard recounted this afternoon, yet once again, the events that have led to this tragic episode, may I merely remind your Lordships of precisely what has occurred already at the United Nations and at the International Court of Justice, and indeed the dates on which these things occurred.
It was, indeed, on 4th December that the Security Council unanimously resolved to call on the Government of Iran—and I repeat the words—
"to release immediately the personnel of the Embassy of the United States of America; to provide them protection, and to allow them to leave the country ".
On 15th December, the International Court of Justice, also unanimously, said this:
"The Government of the Islamic Republic of Iran should ensure the immediate release, without any exception, of all persons of United States nationality who are or have been held in the Embassy of the United States, and afford full protection to all such persons in accordance with the treaties in force between the two States, and with general international law ".
Six months have expired since then. All the efforts of America and her friends—diplomatic, patient—have failed to achieve the carrying out of a solemn resolution of
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the Security Council and of the International Court of Justice.
We well know what happened when the matter of economic sanctions came before the Security Council. Unfortunately, that matter came before the Security Council after the unhappy episode of the United States' endeavour to free their hostages by an action which has been called a military action in this Chamber this afternoon—a phrase from which I disassociate myself, if I may humbly do so. What unanimous praise there would have been for the heroism, the initiative and the courage with which the world had been released of a problem, if only that exercise, unhappy in its result, had been successful! The lauding of our ally and the support that it would have been given would have been tremendous. In a moment of sad failure let us not forget that the ally did its best, but, unfortunately, the expedition was unsuccessful—and again I do not call it a military expedition.
But we have now reached the stage when either something has got to be done or there is no alternative to military action—action which everyone in this Committee and, one would have thought, every serious American citizen, would abhor. What are we to do? If this matter goes back to the Security Council, after that unhappy event and in the present situation, can anyone doubt the result, in spite of the optimism expressed by that Peer in our midst whose voice seems to strike an organ note whenever he speaks? I refer to my noble friend Lord Noel-Baker, who had an optimism which, quite frankly, with my knowledge, which is so inferior to his, I cannot share.
I do not think that the Soviet Union would suddenly decide, at this moment, to reverse a veto that it had previously exercised; and if the matter then goes on to the General Assembly under the procedure which was outlined this afternoon, as it could do on a second veto, with the failure of that effort of the United States and with the Islamic vote—and we know what it would be—does anybody really think that it would achieve a two-thirds majority? And if it failed to achieve a two-thirds majority, what does this Committee recommend it should do then? If sanctions have been ruled out by a General Assembly vote, what alternative has been left, by those who move this

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resolution, but military action or no action at all? This is the danger, as I see it, of this amendment.
The tragic thing is to have to look back, as I said, on a unanimous Security Council resolution passed six months ago, and a verdict of the International Court of Justice given six months ago, and find the United Nations powerless to enforce either its own Security Council decision or the verdict of the International Court of Justice. The United Nations is an old lady, one may think, that one cannot do without. It is an old lady who, like many old ladies, has to talk an awful lot and from time to time is told by members of her family how fond they are of her. But, like some unfortunate old ladies, it has no teeth. This is the tragedy that befalls the world at this moment. Where is the police force, internationally recognised, that can enforce the resolutions of the Security Council and the verdicts of the International Court of Justice? If only that machinery were there—and I am not talking of military force; I am talking of a police force—if only that stage had been reached, we would not have been troubled with this Bill today, and certainly we would not have been debating this amendment, which I oppose for the reasons I have given.
Lord BANKS: We on these Benches are fully aware of the importance of basing the Western case on international law; we are fully conscious of the need to work through the United Nations wherever that is possible; and we accept that it is important to mobilise international opinion through the United Nations. For those reasons, this amendment has a superficial attraction for me, but I must confess that on thinking about it further I share the misgivings which were expressed by my noble friend Lord Gladwyn. The noble Lord, Lord Mishcon, has just emphasised the fact that we have been to the Security Council, that these proposals have been discussed in the Security Council, and that there they were vetoed. Will it really help to go again and secure another veto? It has been suggested that there might possibly be a use of the Unity for Peace procedure through the General Assembly of the United Nations. The noble Lord, Lord Mishcon, has pointed out drawbacks in connection with
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that and the noble Lord, Lord Underhill, has expressed doubts whether procedure of that kind would be possible. In any event, it would seem likely to cause considerable delay. The measures which it is proposed to take have been discussed in the Security Council and secured wide support.
While I understand the importance of continuing as may be appropriate to keep this matter before the United Nations, nevertheless I cannot see what advantage there is in insisting in the statute—and that is really the crux of the matter—on repeating the process of going to the Security Council to which we have been already. I am afraid that if we include this amendment in the Bill and our partners in the Community do not do so, it could create divisions in the EEC ranks, and that would be unfortunate.
6.32 p.m.
Lord WIGODER: I hope that your Lordships will forgive me if I add a technical point to the substantive argument about this amendment. I must confess that I find it difficult to understand what the effect would be if this amendment were passed and incorporated in the Bill. I am troubled particularly by the expression
"…until the Security Council of the United Nations has …discussed the breaches of international law …".
I can see a dispute taking place about whether the Security Council has discussed the breaches or not. I can see other issues being raised in which some discussion incidentally takes place on these breaches of international law. Who is to decide in the circumstances whether there has been a discussion by the Security Council of the United Nations or not? It is difficult to see how this point could ever be resolved.
I should be grateful if the noble Lord, Lord Underhill, would help me about another matter. What would be the effect if the Government made an Order-in-Council, although it was decided by some tribunal (I do not know which) that the Security Council had not discussed the breaches of international law? Would not the Order-in-Council still be valid, nevertheless?
Lord TREGFARNE: I want to say at the outset that, although I must resist this amendment, I appreciated the words of the noble Lord, Lord Underhill, when he moved it about the breaches of international law which have brought us to this sorry pass. Also, of course, I appreciated the words of the noble Lord, Lord Mishcon, who opposed the amendment. The inclusion of a restriction limiting the application of the Bill until the Security Council has again discussed the detention of the hostages would be contrary to our commitment to our European partners to have enabling powers in place by 17th May and ready to be implemented as soon as a decision is taken by the Ministers of Foreign Affairs. We have repeatedly assured our European partners that we shall seek legislative powers which will enable us to act as quickly as possible after a further decision by the Ministers.
If, by the time the legislation was on to the statute book, a debate in the Security Council seemed imminent, then I can assure noble Lords that we would not implement sanctions until the outcome of the deliberations of the Security Council was known. That matter is not now on the agenda of the Security Council and there is no reason to suppose that the outcome of its deliberations would be any different from the outcome in January. In any event, it would be unprecedented that we should limit our statutory powers to the occurrence of something as vague as a discussion. I am echoing the views of the noble Lord, Lord Wigoder. Would a mere reference in a Security Council debate on some other matter be sufficient? Would the discussion have to be a formal one or would exchanges between members of the Council be enough?
While I am sympathetic to the view of the noble Lord that it is deplorable that the Security Council, because of the veto by the Soviet Union in January, has not been able to exercise its proper responsibility in this matter, I am not convinced that to put a fetter on our statutory powers by reference to a discussion in the Security Council would do anything to enable the Security Council to consider the situation properly. What is important is not that the Security Council should discuss the breaches of international law but that there should be a practcial result from
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their actions. That is the consideration which the Government have very much in mind; and I hope that, on the strength of the assurances I have given, the noble Lord will feel able to withdraw his amendment.
Lord UNDERHILL: The question has been raised of the position of our partners in the EEC. I must ask another question. What are the relative values of a greater commitment to our European partners on a policy—a policy on which there has been no evidence at all advanced this afternoon that it will be adequate and no denial that it may be even harmful to our own economic position—to the steps that we ought to take as adherents to the Charter of the United Nations? I may be old-fashioned, and I hope not, but I believe that if we fail to take every opportunity to use the channel of the United Nations, this country is helping to move towards international anarchy—no matter what might be the sound objectives at which we are aiming.
I do not know what will be the result if it went to the Security Council; but I echo what has been said by others including some of my noble friends: that I am certain that the noble Lord, Lord Carrington, would be up to dealing with this situation. Somehow we must put over to the whole world, to all nations, that they are in this together. Merely the United States and the Nine in the EEC will not solve the situation of diplomatic representation being at risk. That, I believe, is the crucial point which we must face. Therefore, although I understand the appeal and I do not want to embarrass any moves which the Government feel that they ought to take, as far as I am concerned the principle of the United Nations, of the Charter, of our adherence to international law is such that even if the matter does not go to a Division I cannot withdraw my amendment.
On Question, amendment negatived.
6.27 p.m.
Lord ELWYN-JONES Lord ELWYN-JONES moved Amendment No. 2:
Page 1, line 12, at end insert—
(" () No Order in Council under this section shall be made unless the Secretary of State has given an assurance to each House of Parliament that each of the State members of the European

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Economic Community has made or is in process of making legislative or other provision to the like effect as that made in the Order in Council.")
The noble and learned Lord said: While the Bill that we have been discussing deals solely with the question of economic sanctions, it is clear that the main message that has emerged from the speeches today, including that of the Leader of the House who opened our discussion, is that primarily importance is attached to the use of diplomatic means in order to promote the effort to secure the release of the American hostages. To that effort, I think that everyone in your Lordships' House has indicated his full support. As my noble friend Lord Underhill has emphasised, the detention of the hostages outrages the universally accepted rule in international behaviour that it is the duty of all states to guarantee and protect the inviolability of foreign embassies and their staffs. It is by a strange irony of fate that we risked valuable British lives last week to maintain that rule for the benefit of the staff of the Iranian Embassy in London. I hope that that message will be well and truly rubbed home in Iran.
During the discussions on this Bill in another place, the Minister of State at the Foreign Office said:
"…it is right, in principle, to act, whenever we can, in concert with our partners, and it is also, in this case, a matter of plain commonsense. We do not intend either to lag behind or to jump ahead of our other main competitors. We do not intend to take measures that have the effect of delivering trade into the hands of our competitors ".
That was from Hansard of the other place at column 916 for 12th May.
It is to ensure that the intentions set out in that statement are fulfilled that my noble friends and I have put down the amendment which I now move. It is common ground that if the imposition of sanctions against Iran is to be embarked upon, if it has any hopes of being effective, it must be jointly implemented sanctions. This emerges from the decision of the EEC Foreign Ministers on 22nd April: namely,
"To request their national Parliaments immediately to take any necessary measures to impose sanctions against Iran in accordance with the Security Council resolution of 10th January which was vetoed and in accordance with the rules of international law".
They further decided that, if possible, such powers should be taken by 17th May. They added:
"If by that time there has not been any decisive progress leading to the release of hostages they will jointly implement sanctions ".
Joint implementation is the key. I think that Parliament is entitled to know what steps have been taken or are being taken by the other member states of the EEC through their Parliaments or by whatever alternative constitutional means is available to them to give effect to the decision of their Foreign Ministers.
The need for assurance that member states have taken their own steps to enable them to take part in sanctions is important. As my noble friend Lord Noel-Baker said, the proposed sanctions will not have the backing of a mandatory resolution of the Security Council. They will need the authority of national laws in each country taking part in them before those countries can apply them. In some, an Act of Parliament may be necessary—it is conceded to be necessary here. There may be alternative constitutional arrangements in some other countries, which is why in our amendment we have inserted the words "or other provision" after "legislation". The noble Lord, Lord Carrington, has stated that the Dutch and the Germans have their legislation ready but the French have not. What steps have been or are being taken in France?
Before sanctions orders are made, as we submit, the Government should give each House of Parliament the assurance which is set out in the amendment I am moving, in whatever form an assurance can most convincingly be given, so that Parliament can know what other states are doing. I do not think that this is an unreasonable request, particularly as the Bill which is before the Committee docs not require Orders-in-Council made under it to be made by Affirmative Resolution of both Houses. If the orders are introduced they will take immediate effect after they are laid and only expire after 28 days, unless during that period they are approved by resolution of each House. We will be taking very important steps by the introduction of the orders.
If the orders are made, they could have a serious effect upon the economic life of this country, as my noble friend Lord Brockway emphasised in his speech. The

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noble Lord, Lord Carrington, said on 23rd April that the effect of the proposed sanctions will be quite serious for us,
"because we have a number of contracts with Iran and it will mean a sacrifice on our part".
I must confess that for my part I was not wholly reassured with what the noble Lord, Lord Trefgarne, said about the contracts situation.
In terms of the comparative state of our economy, sanctions could well impose a heavier burden on this country than they may on any other member of the EEC or even on the United States itself. This was spelled out in detail in the debates in another place this week, for the result of the imposition of sanctions could well affect not only our trade and commerce but also our industrial prosperity. At a time of high unemployment, when every job is important, to add to the unemployment as a result of sanctions would be very serious. I am not saying this in order to indicate opposition to the concept of the imposition of sanctions, but we are at the very least as a Parliament entitled to know before we go down this road what actions have been taken in the other member states of the EEC since 23rd April to give effect to the decisions which were decided upon by the nine Foreign Secretaries.
I have unhappy memories over what happened in the case of the Rhodesian sanctions, when I fear that more than one of our competitors in the EEC paid little or no regard to the sanctions resolutions of the United Nations, and it fell to this country to suffer more than any of our competitors from our faithful adherence to the sanctions resolutions. This should not be allowed to happen again.
I hope that it may not be thought that my attitude is a dog in the manger attitude about this. If sanctions are to be imposed or to be effective, they must be the result of combined harmonious action on the part particularly of the nine members of the EEC, and I think that what is proposed in the amendment is wholly reasonable in the circumstances. I beg to move.
6.37 p.m.
Lord TREFGARNE: I can assure your Lordships that the Government
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have no intention of acting except pursuant to a further decision by the Foreign Ministers of the Nine that we should proceed to implement sanctions by means of individual national measures. As I have already said, the Foreign Ministers are meeting this weekend, in accordance with their earlier decision, to review the situation and determine whether any substantial progress has been made towards the release of the hostages. If they decide that no perceptible progress has been made, then in accordance with their earlier decision they will proceed to implement sanctions. But 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.
There has been continual consultation between the 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 apply 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.
May I mention here the position of France, which the noble and learned Lord raised. We understand that France will not need to place primary legislation before the Assemblée Nationale unless sanctions eventually agreed are to cover the full range of existing contracts. If the measures do not cover the full range of existing contracts they could be implemented by a set of decrees under the authority of the Conseil de Ministère which should be promulgated in the Official Journal. To revert precisely to this amendment, it would not be desirable to write into this Bill a requirement in effect that we should be the last to act. If other states followed such a precedent, then no action by member states of the Community would take place at all. Each state would be jostling for the last position. There could be endless time-wasting argument as to whether a particular state was in the process of "making legislative or other provision", as the amendment says.

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When does this process begin and how could we find out whether it had begun? Must there be a published draft of the legislation? If a Minister in another European capital assures us that the process has begun and that officials are discussing a draft, would that be sufficient? This amendment would bring into our enabling Bill an element of uncertainty and indeed of mistrust regarding our European partners. I can assure your Lordships that consultation and co-ordination will take place so far as is practicable and appropriate. With that assurance, I hope the noble and learned Lord will feel able to withdraw his amendment.
Lord ELWYN-JONES: As apparently the noble Lord has given an assurance that the necessary legislative or other provisions already exist in the arrangements of the other eight Member States, that goes a good deal of the way towards reassuring me. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
The remaining clause agreed to.
House resumed: Bill reported without amendment; Report received.
6.45 p.m.
Lord TREFGARNE: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Lord Trefgarne.)
Lord BROCK WAY: My Lords, as I indicated when I spoke earlier, a number of us will be dividing the House on the Third Reading of this Bill.
Lord HALE: My Lords, on the Question of Whether this Bill should be read a third time, I desire to make one or two observations, partly because I refrained from intervening at all on the Second Reading and partly because I did not absolutely clearly hear the statement of the noble Lord, Lord Trefgarne, in concluding his main speech a few moments ago on the question whether Britain would in any event be committed to follow with military action if the Government
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came to the conclusion that sanctions had failed, and whether Britain had entered into any commitment at all. On that, I must say that my noble friend's reference to the use of Diego Garcia, and my own recollection of the part that I, he and my noble friend Lord Brockway took in the discussions on Diego Garcia, seem to suggest that every word we said was a prophecy of what might happen in certain circumstances in the guise of joint military action with the United States, from a territory which was British and which was being re-christened or re-adopted for the purpose. I find unsatisfactory the attitude which is applied to my noble friend's question when it is said, "I would refer him to what the Prime Minister said on 1st May." I do not know what the Prime Minister said on 1st May. I do not know what the Prime Minister said yesterday, and I am still more worried about the fact that I do not know what she is going to say tomorrow. These are serious matters.
So far as the question of international law is concerned, there was never any question about the imprisonment of members of an embassy, the imprisonment of diplomatically accredited people, the imprisonment even of people who get diplomatic privileges under all sorts of guises when they work at an embassy. These people are and should be protected and respected. That is an action that is incumbent on the whole world, and that is an action that should have been taken at once. By "at once" I do not mean by telegram. It is the duty of every nation.
We are told: "Go to the United Nations, and the Soviet Union veto it." I can understand the Soviet Union finding themselves in something of a dilemma. I can understand that they probably applied this veto without a very great deal of consideration. They have interests themselves, in both Iran and Afghanistan, and I do not for a moment suggest that a great Marxist Government like the Soviet Union does not have an inbred cynicism in these matters which makes us view their decisions with dismay. But thanks are due for the initiative of the noble Lord, Lord Carrington—and, if the House will forgive me, for one moment I should like to mention Afghanisatan, which is not under discussion but which clearly has a relation to the action we have now taken.

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It was the noble Lord, Lord Carrington, who first suggested that an effort should be made to estbalish something in the nature of dual régime, something of the nature of a common interest in Afghanistan, which would have brought most of these things to a settlement.
I refer to what I said to begin with. I am not making the point that because action was not taken at once it should not be taken now. Clearly it is a breach of every rule of international behaviour to imprison diplomatic representatives. As a matter of fact, it was shortly after returning from the Middle East that, as a member of the Committee on the Diplomatic Privileges Bill, I made what I hope was a very strong speech about this, expressing the view that the necessity of letting people park their cars all over London is the position of embassies in some of the nations of the Middle East. We are already being subjected to a good deal of hostile action and a good deal of very embarrassing treatment. There is no question about that.
The point was made very strongly by the noble Earl, Lord Onslow. I must not quote him because I might quote him inaccurately, but he made an extremely able and informative speech. He said basically that here is a very great country, here is a country to which, unfortunately, in this debate we have hardly done justice. Here is a country which has passed through a Gethsemane of its kind, and none of us has paused to pay tribute to Iran as a country with which we had long and friendly ties; a country with a very great history indeed; a country which was a nation before we were. I think the noble and learned Lord the Lord Chancellor said the other day that British history starts from William the Conqueror, with which I do not agree.
We should say that we are taking this action with deep reluctance—and we have rather indicated that—because of our great respect for so large a proportion of the people of Iran, who have suffered many great difficulties and who, at this moment, have no Government. There is no point in international law ignoring that. The people who are responsible are the people who act as governors. But I am not making that kind of point. I am saying that it is well that we should
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say that other methods could have been taken and should have been taken. In passing this measure, it is well that we should say that the last thing we seek to do is to try to do any permanent harm to the future of the people of Iran.
I venture to suggest that the Soviet Government have recently been giving certain indications; and, certainly, there was a news flash on the wireless in the middle of the night. New proposals are coming forward from the Soviet Government and I think that they could easily be persuaded now to enter into new discussions about detente. The moment is right for it and it is to the credit of the Foreign Secretary—
Lord DENHAM: Order! The noble Lord is making a very interesting speech and I hesitate to interrupt him. But we have a Second Reading debate and I think what he is making is a Second Reading speech, whereas this is the Third Reading. I wonder if he could possibly consider whether too much on Third Reading, after a long Second Reading speech, would be a little counterproductive.
Lord HALE: My Lords, the noble Lord is always very courteous and very considerate to me, and he could not have put his point better. But is he right? Are there such rules in the Lords? I was assured that this is precisely the rule that one acts on in the Commons, but that it does not apply to the Lords. Indeed, I was told that I could get up on the next Question, which is That the Bill do now pass, and say almost as much as that.
On the other hand—and I have respect for the noble Lord—I am saying something which I passionately want to say. I want to add that I believe one can see at this very moment, and it is very largely to the credit of our own Foreign Secretary, a break in the clouds, which might make it possible not to have to pursue this matter very hard.
I have come to my own personal dilemma, which is no concern of the House, and the Question that has been put is: do we give a Third Reading to the Bill? My two noble friends Lord Brockway and Lord Hatch—I do not know about my noble friend Lord Noel-Baker—said that they will vote against the Third Reading. My noble friend

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Lord Hatch said that he has the utmost admiration for the policy of the noble Lord, Lord Carrington, that he has a great deal of sympathy with the Government in this matter, but that he feels it his duty to vote against the Third Reading.
I am by no means sure that that is right, because it seems to me that my two noble friends are virtually saying that they would not vote against it if they were not sure that it would get a Third Reading, and I question seriously whether in a debate of this magnitude, on an issue of war, one should take that line. On the other hand, the point of voting against the Third Reading is that at least it shows that a great majority of the British people care. There are some who are desperately concerned and feel that they ought to

CONTENTS

Allen of Abbeydale, L.

Gisborough, L.

Orkney, E.

Alport, L.

Glasgow, E.

Peart, L.

Ardwick, L.

Glenkinglas, L.

Rawlinson of Ewell, L.

Auckland, L.

Goronwy-Roberts, L.

Redmayne, L.

Banks, L.

Gowrie, E.

Ross of Marnock, L.

Bellwin, L.

Harris of Greenwich, L.

St. Aldwyn, E.

Belstead, L.

Holderness, L.

Sandford, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Sandys, L. [Teller.]

Brougham and Vaux, L.

Hylton-Foster, B.

Seear, B.

Cathcart, E.

Janner, L.

Selkirk, E.

Cockfield, L.

Keyes, L.

Sharpies, B.

Colwyn, L.

Kinross, L.

Soames, L. (L. President.)

Craigavon, L.

Lindsey and Abingdon, E.

Spens, L.

Crathorne, L.

Long, V.

Stamp, L.

Croft, L.

Lyell, L.

Stedman, B.

Cullen of Ashbourne, L.

Macleod of Borve, B.

Strabolgi, L.

Daventry, V.

McNair, L.

Strathclyde, L.

Davidson, V.

Mancroft, L.

Stratmore and Kinghorne, E.

de Clifford, L.

Margadale, L.

Strathspey, L.

De La Warr, E.

Marley, L.

Swinton, E.

Denham, L. [Teller.]

Merrivale, L.

Trefgarne, L.

Drumalbyn, L.

Mishcon, L.

Trenchard, V.

Elliot of Harwood, B.

Monson, L.

Tweeddale, M.

Elwyn-Jones, L.

Mowbray and Stourton, L.

Wade, L.

Ferrers, E.

Netherthorpe, L.

Wells-Pestell, L.

Ferrier, L.

O'Brien of Lothbury, L.

Wigoder, L.

Galpern, L.

Onslow, E.

Young, B.

Garner, L.

NOT-CONTENTS

Brockway, L. [Teller.]

Hale. L.

Hatch of Lusby, L. [Teller.]

Davies of Penrhys, L.

Resolved in the affirmative; Bill read 3a accordingly, and passed.

GAS BILL
Brought from the Commons; read 1a, and to be printed.
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exercise their view. In the circumstances, with great reluctance, with much hesitation and, on the whole, still wishing that I could persuade my noble friends not to do so, if they vote against the Third Reading I shall follow them into the Lobby.
Lord TREFGARNE: My Lords, there is not too much that I can add to what I have already said on this Bill. I do not really want to be dragged into answering all the points put by the noble Lord.
6.57 p.m.
On Question, Whether the Bill be now read 3a?
Their Lordships divided: Contents, 82Not-Contents, 4.

SEA FISH INDUSTRY BILL
Brought from the Commons; read 1a, and to be printed.

SOCIAL SECURITY BILL
7.6 p.m.
Read 3a, with the amendments.
Clause 4 [Miscellaneous amendments]:
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young)The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young) moved Amendment No. 1:
Page 8, line 34, leave out ("made") and insert (" prescribed ").
The noble Baroness said: My Lords, I beg to move this amendment, which is entirely technical. It corrects a minor error of wording and it does not affect the substance of the Bill.
Schedule 2 [Amendments of Supplementary Benefits Act 1976]:
Baroness YOUNG Baroness YOUNG moved Amendment No. 2:
Page 37, line 36, leave out second ("to") and insert ("with").
The noble Baroness said: My Lords, I beg to move. This is another purely drafting amendment.
7.8 p.m.
Baroness YOUNG: My Lords, I beg to move that this Bill do now pass. When I moved the Second Reading of the Bill on 1st April I said that it was one of the most wide-ranging and complex social security measures of recent years. Its scope has been very evident from the amendments which noble Lords have felt able to put down in Committee and on Report, ranging from entitlement to invalid care allowance to the possible extention of the option mortgage scheme. However, as your Lordships will be aware, Clause 1 provides that the basic retirement pension and other long-term benefits should be up-rated according to the estimated movement of prices rather than the better of prices or earnings, as at present. The clause gives statutory form to the Government's commitment to protect pensioners against inflation. This is one of the most important guarantees for them and the Government have made it quite clear to pensioners that they regard this guarantee only as a minimum. As and when the economy improves, pensioners and others will share in the rising prosperity.
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But the heart of the Bill is the reform of the supplementary benefit scheme. The keynote is simplification. I should today like to re-emphasise the extent to which we are consciously modelling the adjudication system of the reformed supplementary benefit scheme on the national insurance and industrial injuries schemes. We are convinced that this offers the best hope for both present and future recipients of supplementary benefit of a fair, just and open system of income support in which payment will be made as of right for benefits which are publicly and clearly defined. When supplementary benefit replaced national assistance in 1966, we heard much of the emphasis that was to be placed on entitlement to benefit, but I suggest that only now is that objective likely to be realised. With this Bill, and the reforms being made under it, we are finally establishing clear legal rights to benefit for the people who are in need.
If I may turn now to the advice to be given to the Secretary of State, your Lordships are well aware that the Bill creates a new advisory body, the Social Security Advisory Committee, to replace the Supplementary Benefit Commissions for Great Britain and Northern Ireland in their advisory roles and the National Insurance Advisory Committee. This is in line with the Government's overall aim to reduce the number of advisory bodies. We believe it will provide a more effective channel for advice because the new body will span the whole range of social security benefits, contributory and non-contributory, with the exception of industrial injuries benefits which will remain within the purview of the Industrial Injuries Advisory Council. Child benefit and family income supplement will come within the new body's remit—the first time that they have been entrusted to an advisory body.
Finally, I should like to say a word about equal treatment. Our proposals are, as noble Lords will know, primarily designed to implement the EEC Directive on Equal Treatment for Men and Women in Social Security, although they do go further than the directive requires in several respects. The Government fully support the principle of equal treatment, but because of the cost involved we have been unable to act as quickly or to do as much as we might have liked. The

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directive requires us to implement the changes by December 1984. We plan to do so in two stages, in November 1983 and November 1984. As regards contributory benefits, in the first stage married women will be able to claim increases of benefits for their children, and increases of short-term benefits for their husbands, if the husband's earnings are less than the standard rate of the increase of benefit for an adult dependant. In the second stage, married women will be able to claim for their children, irrespective of their husband's earnings. These provisions will fulfil our commitment under the directive but we have gone further by allowing a married woman who is an invalidity pensioner to claim an increase for her husband provided that the husband is not earning more than the amount of the increase.
As regards supplementary benefit, regulations to be made under the Bill will enable a woman as well as a man to claim for the couple. These changes will be introduced in November 1983, when equal treatment will also be introduced into the family income supplement scheme. This is another area in which we have gone beyond the strict limits of the directive since the family income supplement scheme is not within its scope.
There are besides a number of minor and technical changes. However, the complexity of the Bill should not blind us to the simplicity of its aims. On this side of the House we are grateful for the guarded yet nevertheless welcome words of the noble Lord, Lord Wells-Pestell, when he said on Second Reading that it was" not wholly unacceptable "and that,
"There are many things in it of which one would approve".—[Official Report, 1/4/80col. 1276.]
We never expected that the Bill would gain all-party support, but we are convinced of its importance and particularly of the urgent need to reform the supplementary benefit scheme. For these reasons, I commend the Bill to the House. I beg to move.
Moved, That the Bill do now pass.—(Baroness Young.)
7.14 p.m.
Lord WELLS-PESTELL: My Lords, almost exactly three and a half years ago
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the Third Reading of the Health Services Bill was taken in your Lordships' House and at this particular stage in the Bill no fewer than 13 Members of your Lordships' House, eight of them from the party opposite, moved on the Motion, That the Bill do now pass, and made, if I may say so, Second Reading speeches. There were three or four also from the Cross-Benches and one from the Liberal Bench. They took two hours and 24 minutes to express their view of the then Government's Health Services Bill. I am not proposing to take quite that long tonight, but I want to make it perfectly clear that we feel just as strongly about this Bill as noble Lords opposite felt about the Health Services Bill, and we could say—but perhaps this is not the time to say it—a good deal about the Bill.
On 18th November 1976 in vol. 377, col. 1470 of Hansard, the noble Baroness, Lady Young, said of the Health Services Bill's proposals:
"they have appeared like a religious tract from which no one can move at all, and in which every single word must be enacted, …precisely as the document was drawn up".
Perhaps the noble Baroness will allow me to say precisely the same thing about this Bill.
While we may appear to be a little cheerful about this, I should like to remind the Government that at the Committee stage we tabled 76 amendments and divided the Committee on 10 occasions. At the Report stage we tabled 23 amendments and divided the House on three occasions, a total of 99 amendments, to which must be added those tabled by the noble Lord, Lord Banks, and his friends on the Liberal Benches, who tabled 14 amendments at the Committee stage and divided the Committee on four occasions, and three amendments at Report stage and divided the House on two occasions. It made a total of 116 amendments, but not a single amendment was accepted by the Government.
The Bill has caused us on this side of the House many misgivings. I do not want to give too many instances of those misgivings, other than to say that we feel that the Government might have given a little more sympathetic attention to the amendments which we tabled and which we moved (as I think noble Lords opposite would agree) in some considerable detail.

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I would ask the Government whether they can give any further information about the Secretary of State reinforcing staff at local DHSS offices where claimants will be able to get help and advice as to their entitlements. Also, I wonder whether the Government can say anything further about the exploration that they are having with Her Majesty's Stationery Office on the publication of a low-cost single volume of matters relating to the new supplementary benefits scheme; and also my own suggestion, which I made on a previous occasion, of asking a trust or a voluntary organisation whether they would undertake the work of compiling a volume which would be useful to professional social workers who, as I said, spend a disproportionate amount of their time helping people as to their entitlements.
My final observation is in relation to the publication of the chief benefit officers' guide. It was a question which we discussed at some length during Committee stage but did not resolve, and I am wondering whether the guidance that benefit officers will receive from the chief benefit officer will be published. In a letter to me dated 18th April the noble Lord, Lord Cullen of Ashbourne, explained:
"It will be for the chief benefit officer and not for the Secretary of State to consider whether such guidance should be issued ".
Of course, until the Bill receives Royal Assent the chief benefit officer cannot be appointed, so I accept that the question of publication of his guidance cannot be decided at this stage; but I have no doubt that he will take into account what has been said on the subject, both in this House and in another place. Therefore, I want to put on record the fact that we regard this as a matter of fundamental importance.
In a long and—if I may be permitted to say so—a very helpful letter from the noble Baroness, Lady Young, on 29th April she said this about the functions of the chief benefit officer:
"His main function will be to act as a focal point for advice and assistance to benefit officers. He will be concerned to ensure that the decisions of the benefit officers are in strict accord with the law and will act as a point of reference for benefit officers in explaining what the law and case law provide ".
On the subject of publication the noble Baroness the Minister said:
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"I do not envisage that it would aid public knowledge of the scheme to publish such guidance, which is purely internal. This is because all the rules governing the scheme will be published elsewhere, either in the Act itself, in regulations made under it or in relevant decisions of the social security commissioners and all the rules will be explained in non-legal terms in the Supplementary Benefits Handbook ".
Even if the chief officer's guide consisted of no more than an annotated summary of the Act, the regulations and the commissioner's decisions, there would be a strong case, in my view and in the view of my friends, for publishing it. It would obviously be a valuable aid to advocates and advisers in this field, most of whom have had no legal training. Whatever disputes arose as to the interpretation of the law it would be helpful if both sides had access to the guidance on which the officer's decision was based. Indeed many such disputes would be avoided if that guidance were available to both sides.
It is clear that the chief officer's guide will go much further than this. Although we are told that the new regulations will leave much less room for discretionary decisions than the existing regulations, benefit officers will still have some discretion. We had quite a long discussion on the kind of discretion they would have, especially in relation to exceptional and urgent needs payments where it is clear that the regulations cannot possibly cover every eventuality. One of the chief officer's functions must be to ensure that the remaining discretionary powers are used in a fair and, what is even more important, a consistent manner. His guidance on the use of discretion will obviously go beyond what is in the Act and the regulations and the published case law.
Of course, that guidance will not have the force of law, just as the policy guidance issued by the Supplementary Benefits Commission at present does not have the force of law either. But legally binding or not, it will in practice determine the ways in which this discretion is going to be exercised. Whether such guidance should be regarded as part of the rules of the scheme, which the Government have promised will be published in full, is largely, if I may say so, a semantic issue. From the point of view of the individual benefit officers, the chief officer's guide will have the force of the book of rules just as much as the regulations themselves have.

439
Even more important than discretion as such will be the many crucial areas in which benefit officers will have to exercise judgment in applying the law. I will mention, if I may, just two of them. Supplementary benefit payments will include, as they do now, an allowance for rent or mortgage interest. This will be based on the householder's actual weekly rent or mortgage payments up to the amount considered reasonable. What amount is reasonable in a particular case is going to be a matter of judgment and can therefore vary. At present it is the Supplementary Benefits Commission which issues guidance on how that payment should be made, and in future of course it is going to be done by the chief supplementary benefits officer.
My second example concerns the question whether a man or woman is cohabiting, or, in the language of the Bill, an unmarried couple. There is already a limited amount of case law, as we all know, on this question, mostly in the national insurance field, but for the most part it remains a matter of judgment on which detailed guidelines have been issued by the Supplementary Benefits Commission. At Committee stage my noble friend Lord Underhill asked who would issue such guidance in the future, and in reply the noble Baroness the Minister said:
"It seems clear, however, that such guidance can only come from the chief benefit officer in future, and it will be for him, not for Ministers, to decide whether any changes are needed".—[Official Report, 21/4/80col. 584.]
Again there may be room, if I may say so, for argument as to whether that guidance can properly be described as rules. Certainly it will have no legal force, but equally certainly it will determine the way in which benefit officers decide in large numbers of cases whether there is an entitlement to supplementary benefit or not.
Part of the whole problem at the present moment is that professional social workers and other people, as I constantly say, are spending a disproportionate amount of time in trying to advise claimants. It is in this field where I think something needs to be available. If the chief benefit officer when he is appointed decides that his guidelines should not be published, we shall be back in the world of secret rules from which the Government, to their credit, have said that they want to
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escape. Now they have got an opportunity of escaping and doing something about it. This will be helpful to nobody, if they do not escape from itit will breed suspicion and resentment in the future, as the secrecy of the Supplementary Benefits Commission's "A" Code has done in the past. There will be constant demands for publication, and no doubt there will be illicit and inevitably out-of-date copies circulating among the pressure groups and causing further resentment and difficulties for the benefit officers themselves. All these problems will be avoided if on the day of appointment the chief benefit officer announces his intention of publishing his guidance fully and promptly.
I will not take up any more of your Lordships' time. I mentioned this because I believe it to be of supreme importance. I am not asking for any answer tonight. I have touched upon this matter not once but probably twice before. I wanted this to be really my last word on the Bill, a Bill about which we have a good deal of reservation—although not as many reservations as we shall have on the Social Security (No. 2) Bill, which we shall want to examine even more closely, if it is possible, than we have examined the present one. All I ask of the noble Baroness and her colleagues and the Government in particular is to look at this matter again, show some understanding and some charity, and think of the tremendous contribution the Government can make to the understanding of the scope and function of the supplementary benefit officers and the help that can be given to people whose job it is going to be to deal with these cases. Whatever you provide in local DHSS offices, it will probably not lessen the long queues of people—and I do not say this in a dramatic sense—who go to social workers because they cannot understand what they are entitled to.
7.28 p.m.
Lord BANKS: My Lords, I made it clear on Second Reading that we on these Benches did not like this Bill very much. Like the noble Lord, Lord Wells-Pestell, I regret that the Bill has gone through this House virtually unamended—certainly unamended by the Opposition. It was during the Committee stage in this House that it became apparent that the Government did not intend to proceed to redeem

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their election pledge to phase out the earnings rule within the lifetime of the present Parliament. That became apparent when the noble Baroness and the noble Lord opposed an amendment that they themselves had submitted only a little over a year earlier. I regretted that decision on the part of the Government and also the fact that the amendments which were moved from the Labour Benches and from our own Benches were not successful in preventing the erosion which is taking place in the maternity grant and the death grant, neither preventing the erosion which has taken place in the past, nor implementing the proposal to prevent any further erosion in the future. I am quite sure that is a matter which we shall have to come back to again at an early date.
The noble Baroness referred to the new supplementary benefit scheme which this Bill introduces. We shall have to see how that works out in practice, and we shall want to look very carefully at the regulations. However, it seemed to me during all our discussions that what was lacking was any measure which would take a large number of people off supplementary benefit. I do not think that we shall have a satisfactory supplementary benefit scheme until that is achieved.
I regretted the fact that the amendments which I moved, designed to safeguard the position of the disabled, were not accepted. We shall have to see how they are effected in practice by the working-out of the scheme. Then there was the amendment dealing with the mortgage option and its relation to elderly, non-taxpayers seeking to increase their income by raising a mortgage on their property to purchase an annuity. As regards that amendment, I think that the Government had a Pyrrhic victory. The support for that amendment on their own Benches was very considerable and was partly reflected in the vote, but not entirely. I am sure that we shall come back to that and I am sure, too, that we shall see that amendment carried before very long.
I did not think that a case was made out during the course of our discussions on Second Reading and during the Committee stage for the breaking of the link between earnings and long-term benefits. A theoretical argument was presented which had some theoretical validity, but
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on no occasions it seemed to me was any practical evidence brought forward to show that the theoretical argument was working out in practice. Like the No. 2 Bill, this Bill is a Bill designed to reduce expenditure, and all else had really to be subordinated to that. The discussion of the merits of the individual proposals was really secondary, one felt, to the need, as the Government saw it, to reduce expenditure on social security. We now await the No. 2 Bill, and that Bill of course will repeal some of the proposals contained in the Bill that we are just about to pass.
7.33 p.m.
Lord WALLACE of COSLANY: My Lords, I should just like to say a few words, but I am sorry to say not very kind words, about the Bill. The Bill, in the main, deals with a most sensitive area of social security; namely, the poverty trap. But without a word of exaggeration, in my view, and in the view of many other people, it is a most insensitive Bill. The noble Baroness, Lady Young, who certainly did a very good job for a Government on those Benches, not always I suspect lacking sympathy for the amendments moved, said tonight that the keynote of the Bill was simplification. I cannot accept that. How can a Bill bring in a simplified system when we are bringing in a whole series of complicated and lengthy regulations about which, unless we get some guarantee, the general public and those people helping the underprivileged will not have an opportunity of obtaining adequate information unless the Government move quickly to provide the information that my noble friend Lord Wells-Pestell has requested?
I turn to the subject of retirement pensions. In November 1979 they increased by 19·5 per cent., but what is inflation today?—21 per cent. I understand that the increase will be 16·5 per cent. next November, but what will inflation be then? The Government should do justice to the old-age pensioners by giving them at least a pension which takes full account of the inflation rate.
There is another Bill to come and I dread it. It will be far worse and, in particular, it will hit very hard the handicapped and the sick. I know that we have had moments of sympathy from the

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Benches on the other side, and I think that in Members' hearts they have been genuine moments of sympathy, but there has been resolute objection to any amendment. This Bill has received the same treatment as any other Bill we have had so far. We have put forward amendments which have received support from the other side, but the Government Front Bench, no doubt acting under orders—and I do not blame them—just will not accept the amendments because, "Mummy says, no". That is the position, as I understand it.
In a recent debate the noble Baroness said that she has a heart. No one would accuse her of being heartless. She certainly has a heart and sympathy, but—and this is the burden of my reproof—the Government as a whole, committed to a monetary policy, are operating a policy as regards social security which is heartless and insensitive; and that is my verdict on the Bill. I regret it and I certainly regret the coming forward of the No. 2 Bill.
Baroness YOUNG: My Lords, with the leave of the House, I should like to try to answer the various points that have been raised at this stage. First, I should like to say to the noble Lord, Lord Wells-Pestell, how much I appreciated the fact that he had taken the trouble to read my comments during the Third Reading of the Health Services Bill four years ago. I must remember to re-read his comments on a similar occasion; I think it would be very useful for us all.
A number of very important points have been raised and I should like briefly to deal with them. First, the noble Lord, Lord Wells-Pestell, asked me about advice points in local offices. The matter is still under consideration. As regards that and the points that he made about the publication of the chief benefit officer's guidance, I should like to assure him that we shall take full cognisance of all the points that have been made in your Lordships' House this evening, and in another place, on the publication of guidance.
I should now like to turn to the question of the publication of the Yellow Book, to which reference has been made in the course of these debates, particularly by the noble Lord, Lord Wells-Pestell, who
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made the suggestion that we might make available in annual form the law relating to supplementary benefit at a cheaper price than the Yellow Book, which initially retails at £20. We are still not in a position to give a definite answer as to whether or not we can proceed along the lines envisaged in the amendment which the noble Lord moved on Report. This is because detailed discussions between officials of the department and Her Majesty's Stationery Office have not yet been concluded. I am afraid that these matters do take time.
However, we remain committed to the principle that it is essential for interested parties to have access to the published rules of the scheme. The latest estimate we have of the cost of the kind of annual publication which the noble Lord, Lord Wells-Pestell, had in mind, is that it would be at least £6 or £7 a copy. This calculation—which I emphasise is a provisional one—has been made on the reasonable assumption that the demand for such a volume would be more than is currently the case for the Yellow Book. Furthermore, as we do not yet know the full extent of the regulations, this cost has been estimated with regard to the current size of the Yellow Book; and as the new regulations are bound to increase that size, it must be expected that the cost will rise in proportion.
However, I should like to emphasise that we remain convinced of the value of continuing to produce the handbook as the principal guide to the scheme for the informed layman. One further point on this matter, to which I should draw your Lordships' attention, is that the issue of an annual publication may just work against the best interests of the people it is intended to help; that is, claimants and their advisers. This is because, under the new scheme, there will be many more regulations than there have been in the past on supplementary benefit and inevitably it will become necessary to amend the law more frequently.
We cater for amendments in the law at present by issuing supplements to the Yellow Book roughly twice a year so as to keep all purchasers up-to-date. If the need for these supplements were to arise more frequently than that—and I suggest that under the new scheme that could well be the case—it is not difficult to envisage

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a situation where annual publication might be out of date for some months before the next edition was due. Supplements to the Yellow Book presently cost between about £1·50 and £3, and I cannot see that the cost of these could be reduced at all. Given that we certainly do not think that it would be practicable to produce the complete paperback volume, if I may call it that, at shorter intervals than a year, because of both the extra cost and the extra staff time involved we might ultimately be faced with having to operate the same kind of arrangements as we have at present. However, in the absence of more concrete information, we have not yet arrived at a final decision. I should like to assure the noble Lord, Lord Wells-Pestell, that I shall write to him again when we have done so.
I say to the noble Lord, Lord Banks, that the question of the earnings rule will, of course, be a matter for discussion on the No. 2 Bill and that, although he has described this as a Bill to reduce expenditure, I should like to confirm that, in relation to supplementary benefits, there will be no saving. As we have explained, these changes are being introduced at neutral costs with changes which result in costs being offset by others which result in savings.
Finally, I should like to make two points on the remaining discretionary powers. It is the firm intention under the revised scheme that all the points affecting entitlement to benefit should be public knowledge. As we made clear at an earlier stage, such points, including any which are not the subject of regulations, will be published in the handbook. This, and publication of the law, will, we believe, provide ample information for those who advise claimants. On the point of simplication, we acknowledge that regulations will be detailed, and for that reason will appear complex, but the changes made in the supplementary benefit scheme will simplify it, and we shall ensure that the new rules are available in simple language leaflets for all to see.
In conclusion, I should like to thank both my noble friends Lord Cullen of Ashbourne and Lord Sandys for their great help, without which I certainly should not have managed this Bill. To the noble Lords, Lord Wells-Pestell, Lord Wallace of Coslany and Lord Banks, I should like
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to say that we have been grateful for the way in which they have conducted their very difficult task in these complex debates—so agreeably for us all in very difficult circumstances. We may not have agreed, and we do not agree now, but I think that we have conducted the debates in the best traditions of this House, and I should like to pay tribute to all who have taken part.
On Question, Bill passed, and returned to the Commons.

ROYAL ASSENT
7.41 p.m.
The DEPUTY SPEAKER (Lord Alport): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Import of Live Fish (England and Wales) Act,
Iran (Temporary Powers) Act,
Isle of Wight Act.

ALEXANDRA PARK AND PALACE BILL [H.L.]
Reported from the Unopposed Bill Committee (on Re-commitment) with amendments.
BRITISH RAILWAYS (CASTLEFIELD) BILL
Reported from the Unopposed Bill Committee with amendments.