The Falkland Islands: Economic Situation (Hansard, 24 February 1981)

§ Baroness Elles
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne)
My Lords, the decision, which succeeds an earlier decision of 29th June 1976, extends to the dependencies of member states treatment similar to that accorded to the ACP countries under the terms of the second Lomé Convention. While welcome, the benefits accruing from these arrangements are unlikely to have a major impact on the Falklands' economy.

§ Baroness Elles
My Lords, I thank the Minister for that reply. Will he confirm that the way in which the sums are allocated to different dependencies is at the moment based on a per capita division? Would he 978 agree that in view of the political and strategic importance of the Falkland Islands, a different kind of assessment should be made, bearing in mind the urgent economic help that these people need in order to encourage settlers to join them on the islands?

§ Lord Trefgarne
My Lords, the provisions to which I have referred apply to the dependencies of all the member countries of the European Community, and it would be difficult, I think, to apply different criteria to one dependency of one member state as compared with another dependency of another member state. But I can confirm to my noble friend that, broadly speaking, the allocation is dependent upon population and GNP per capita.

§ Baroness Elles
My Lords, could my noble friend say roughly what kind of sum the Falkland Islands will receive, when they are likely to receive it and whether there will be sufficient to meet some of the expense of purchasing the Roy Cove Farm, which I believe is very helpful in getting new settlers to go to the Falkland Islands?

§ Lord Trefgarne
My Lords, I cannot say whether the funds will be used for the specific purpose to which my noble friend refers, but I can say that under the previous decision, in 1976, the sum which the Falkland Islands received was 21,000 currency units, which was then equivalent to about £12,000, and I imagine that the allocation under this latest decision will be of the same order.

§ The Earl of Lauderdale
My Lords, could my noble friend say whether there have been encouraging discoveries of hydro-carbons on the continental shelf around the Falkland Islands and whether that, if it is true, may not have a beneficial effect upon the economy of this dependency?

§ Lord Trefgarne
My Lords, that supplementary question falls slightly wide of the Question on the Order Paper, but certainly my noble friend is correct in saying that if such discoveries have been made—and I know that the auguries are good—then of course that would have a most beneficial effect on the economic position of the Falkland Islands; but it would be difficult to realise and appreciate that advantage, and gain the benefits of it, while the present dispute with the Argentinians continues.

§ Lord Goronwy-Roberts
My Lords, would the Minister, however, look at that answer again in the light of what the noble Earl has suggested to him? The dispute with the Argentine might very well be more quickly solved if there were between us and the Argentine (or, better still, between the Community and the Argentine) a "get-together" under the aegis of this decision of the Council of Ministers, to see what can be done not only in but around the Falkland Islands in view of the undisputed fact that very valuable hydro-carbon deposits, and also sea food, are apparently in plenitude in that area.

§ Lord Trefgarne
My Lords, as the noble Lord will appreciate, the dispute, of course, is one between the 979 United Kingdom Government and the Government of the Argentine over the sovereignty of the Falkland Islands. I can tell the noble Lord that discussions aimed at solving that dispute are in progress this very day in New York—no; to be precise it was yesterday, and I think they are continuing today—when my honourable friend the Minister of State, Mr. Ridley, is having discussions with an Argentinian delegation, at which discussions Falkland Island councillors are also present.

§ Lord Avebury
My Lords, does the Minister not realise that, in the meanwhile, the Argentine Government is purporting to license companies to drill on our side of what would be the median line between the Falkland Islands and Argentina in the Magellane Este Block, and that the noble Lord the Foreign Secretary has already said that if companies take up these licences protests will be made? How can the noble Lord say, therefore, that any benefit will accrue to the economy of the Falkland Islands when we continue to claim only the resources out to the three-mile limit?

§ Lord Trefgarne
My Lords, as I have endeavoured to make clear not only today but on earlier occasions when noble Lords have asked me about these matters, the solutions to the economic problems which beset the Falkland Islands are to be found in an agreement with the Argentinians when the various threats which have been uttered by both sides and, indeed, the islanders themselves are brought to an end, and all the resources around the islands, including the oil resources, if there are any, and of course the fish resources, to which the noble Lord, Lord Shackleton, has drawn attention on several occasions, can be developed and used to the benefit of all concerned.

Lord Morris
My Lords, may I ask my noble friend the Minister whether he can assure your Lordships' House that any potential or current economic benefit in the light of the considerable hydro-carbon discoveries in that particular area will not be eroded in any way by a trade-off with the Argentinian Government?—and when I refer to potential benefits I mean benefits not only to the Falkland Islands but to this country itself.

§ Lord Trefgarne
My Lords, what I cannot do is prejudge the outcome of the negotiations between the United Kingdom Government and the Argentinian Government in this matter, except to say that those negotiations are being conducted with the knowledge and agreement of the Falkland islanders themselves.

§ The Earl of Lauderdale
My Lords, would my noble friend confirm categorically that the United Kingdom Government alone are the licensing authority for that part of the continental shelf around the Falkland Islands which leads up to the median line?

§ Lord Trefgarne
My Lords, I speak without a specific note on that point but as I understand it that is the present position.

§ Baroness Elles
My Lords, would my noble friend please confirm that, unless something is done by this Government and by the Community to assist in improving the economic situation of the Falkland islanders, the future of the present population is at risk?

§ Lord Trefgarne
My Lords, as I have repeatedly said, and as I say again now, the long-term solution to the economic problems of the Falkland islanders is the resolution of the dispute with the Argentinian Government, and that we are working to achieve.

§ Lord Goronwy-Roberts
My Lords, with the indulgence of the House, may I press this point? While the question of the sovereignty of the islands is not a matter of dispute within this country or in the Falkland Islands, nevertheless one of the two working parties which are now negotiating ways and means of cooperation between the Falklands and the Argentine should surely be looking into the possibilities mentioned by the noble Earl, Lord Lauderdale, among which are the distinct possibilities of very big finds in hydro-carbon oils, and also an extensive area of sea food in that general maritime region.

§ Lord Trefgarne
My Lords, that, of course, is correct; what the noble Lord has mentioned are important elements in the equation which we hope will in due course lead to a solution to this matter. But, in the meantime, as I have repeatedly said and as I say again, the position is that a solution must be found to our dispute with the Argentinians if a way forward for the long term is to be found.