HL Deb 06 December 1983 vol 445 cc995-1061

3.1 p.m.

Lord Buxton of Alsa rose to call attention to the importance of the Falkland Islands and other British islands in the South Atlantic; and in particular to the need to review the progress of economic and social development in the Falkland Islands following the Argentine aggression of 1982; and to move for Papers.

The noble Lord said: My Lords, I am very grateful that as a result of my good fortune this debate is taking place today. It could hardly be more timely. The vote in the United Nations has already taken place and, taking the very long view, it did not go too badly. The new, democratically elected Government takes over on Saturday of this week. It is therefore an ideal opportunity for us to hear from the Government, through my noble friend Lady Young, what Government policy is. It is also an ideal opportunity for so many noble Lords, who have different views and great expertise on this subject, to express their views. In order to avoid duplication, I am going to deal only with the first part of the Motion—that is, the strategic importance of British islands, which includes not only the Falklands but several other British islands as well.

First, let me welcome the election victory of Dr. Alfonsin and the coming of democratic Government to Argentina. We must surely welcome this new dawn in Argentina after nearly 40 years of darkness, oppression and fear. I feel that we should do all we can to help democracy become firmly established in the long run. However, it would be folly to assume too soon that all is over bar the shouting, and that there is not a long and hazardous way to go. We must not ignore the possibility of further military coups, but let us hope for the best. Although a reported statement on the Falklands by the future Foreign Minister was very discouraging, the passage of time will surely help. Patience and firmness on our side provide the best chance of ultimate co-existence.

The plain fact is that we have reached an impasse over sovereignty, and in my view it really is better to accept that fact for some years to come. There is of course so much that Britain and Argentina could do together—in co-operation over ocean mineral exploration, the joint allocation of fishing rights, conservation, mutual defence and security and so forth—that it seems politically bankrupt if Dr. Alfonsin's Government, like the junta, pursues the military line that there can be no co-operation over anything at all until sovereignty has been ceded. I think better of Dr. Alfonsin than that, and I feel sure that democratic Government will want to be more constructive.

For 134 years there were close and cordial relations between our two countries because there was no ambiguity on our side. It was ambiguity that caused the Falklands war. We know that there were conflicting claims before 1833, but 150 years of effective and peaceful occupation anywhere in the world are more than enough to validate sovereignty. If 150 years of peaceful occupation are not enough to make sovereignty valid, then can one imagine the consequences of the reshuffling that might have to be put into effect all round the globe? The prospect is beyond a farce; it would threaten the survival of humanity.

The war in the Falklands was actually caused in March 1967. We now notice from the Foreign Affairs Committee report that: The United Kingdom Government"— this was in March 1967— indicated to Argentina that Britain would in the end be prepared to cede sovereignty under certain conditions". That was the signal—the first and irreversible signal—for the invasion 15 years later, in 1982. Parliament or public, as far as I am aware, never approved that fatal commitment at the time. Ambiguity had become the theme.

That disastrous concession was what in the end caused the war. It was not the natural aggressiveness of the Argentine junta. They never attacked anybody if they thought they might be opposed; their own unarmed citizens were more to their taste. It was because—unknown to Parliament and public here—the pass had been sold and the junta was positive that we wanted to he rid of the Falklands. The final proof that we would not defend them was the decision to axe HMS "Endurance".

Of one thing we can he sure. Dr. Alfonsin and a democratic Government would never have countenanced such outlandish aggression in the midst of honourable diplomatic negotiations going on in New York. Looking to the future, we must now face up to the long haul of restoring Argentine-British relations. We must gradually persuade Dr. Alfonsin and his colleagues that there is everything to be gained by getting back to the harmonious days which lasted for 134 years, until 1967. We must all want to help Dr. Alfonsin, and it is certain that the only way to do so is to be unambiguous. Being two-faced—I have to use that word—as we have been since 1967, led to the ultimate catastrophe and to serious misunderstandings in the United Nations.

According to the Foreign Affairs Committee report, Latin Americans and others at the United Nations in particular are entertaining misapprehensions already, which could lead to more misunderstanding in the future. I quote again from the Foreign Affairs Committee report, that it is considered in the United Nations that because of cost and distance, the United Kingdom will be hound to surrender sovereignty in due course". In the light of long visits to the Falklands over a considerable period, I feel entitled to claim yet again, as I have before, that once the present rehabilitation, recovery and planning period is over, the cost of defending the Falklands should be minimal. Three things were lacking before April 1982:first, adequate intelligence from Argentina; secondly, sophisticated early warning systems in the Falklands; thirdly, a good civilian airport which provides immediate access. Given those three factors—and all will now be made available, we hope—it is not my view that we shall need many more men down there in the long term than the handful of marines which we had before.

I have to confess that I have considerable reservations about the cost figures of the so-called fortress Falklands policy which have been and are being bandied about. I am unable to dispel the evil suspicion from my mind that they are being inflated and loosely bandied about in order to justify past policy from 1967 to 1982, on the lines of, "I told you so. How can we possibly afford it?"

Perhaps I may keep this cost aspect for another day and spare my noble friend the Minister any direct question on it today. I will only mention one or two points in passing in connection with these costs. Nobody could possibly know accurately what defending the Falklands is going to cost, because long-term requirements and policy have not yet shaken down sufficiently to assess them. Secondly, it is conceivable—I am not an accountant, although it sometimes helps—that the figures have been wrongly accounted in any case. In the light of what I am going on to say, these costs, especially on the airport, are excellent investments and are not costs at all. In the case of HMS "Endurance", for example, which accounts to some extent for my suspicion of accountancy figures, the figure of £4 million per annum was mentioned in many debates here, in the press and in public. For once, I really got down to it and obtained all the information I wanted. The figure was much more like £l½ million. At present, I am tending to apply that factor to the costs of fortress Falklands.

These factors and figures are also relevant to the future of the Antarctic. Britain cannot let go of her position and opportunities in the Antarctic, when all other countries are moving the other way. At a time when some of us were fighting to prevent the British Antarctic Survey being run down in 1980 and 1981, even India was putting down a marker in the Antarctic. In February 1982, referring to a previous visit to the Antarctic by Indian scientists, Mrs. Gandhi herself said that the expedition was proof, if such be needed, that Indian scientists and technologists have the capability to undertake the most hazardous and complex tasks. In undertaking this advanced work. India has now joined a select band of countries". The internationally acknowledged leader of that select band, which includes both super powers, is Britain. All other countries are moving towards the Antarctic, not backwards, as was the United Kingdom before April 1982. In addition to India, Brazil has acceded to the Antarctic Treaty, and now, in 1983, Spain and China. Britain, as the leader, cannot be the only country going backwards by risking its vital lines of communication.

The work of the British Antarctic Survey leads the Antarctic school of research, and its finances were finally put right by the Prime Minister in May 1982. But the British Antarctic Survey bases in Antarctica cannot be sustained in hazardous or dangerous times without British South Atlantic islands. In passing, one aspect should be noted which has not yet been mentioned. It is certain that had we failed to retake the Falklands, all British scientific bases—the leading scientific bases in the Antarctic—would have been seized by the junta, their vital work would have been pillaged and their British scientists would have been removed.

If a democratic Argentina tones down and moderates the attitudes of the dictators, as I feel sure it will, there is no reason why, in the long run, Antarctic research and exploration should not be another area where friendly co-operation between us could conceivably be possible in due course. There is also the notion in the United Nations that the Falklands are of marginal strategic value to NATO. That, in my view, is probably the most dangerous misconception of all. I shall come to that point in a moment. I found during visits to New York that ignorance of United Nations members and even of Latin Americans about the South Atlantic area was alarming. All seem to have the notion that the Falklands Islands dependencies are part of the same cluster of islands. Argentina's claim to South Georgia and South Sandwich, to he friendly and fair to the "new" Argentina, is a dictator's outrage and has absolutely no substance or the remotest relevance to any previous history whatever. Frankly, I find it difficult to believe that a democratically elected Government will find it respectable or to their advantage and prestige to pursue such preposterous aggressiveness.

It is important to get the perspective right. South Georgia is as far from Argentina as Britain is from Greenland; and the South Sandwich Islands are as far from Argentina as Ireland is from Canada. One really wonders who those military tyrants thought they were, brazenly rewriting their history books and drawing new maps after the war. What did the United Nations think it was doing, condoning those additional demands? And what did we think we were doing since March 1967 in reacting to such tyrannical postures and accepting since 1976 the actual occupation by the Argentine junta of one of the South Sandwich Islands?

Even the Falkland Islands are as far from Argentina as Iceland is from Greenland. When, without even the remotest substance of any historical record, the dictatorships claimed South Georgia and the South Sandwich Islands, in my view the United Nations should hang its head in shame at having condoned such outlandish Hitlerism—because that is what it was. That does damage to the United Nations' credibility and authority.

I feel confident that Dr. Alfonsin and democratic institutions in Argentina will one day bring reality, maturity and common sense to bear. We must strive patiently to get closer to them and hope that the spirit of co-operation which prospered for 134 years will soon revive. It is my belief that the Argentines will never again invade the Falklands. As I have said, the direct cause of the misapprehension on the part of the junta was the British initiative at official level in 1967; and from that day onwards successive Governments and their ministers have been floundering in impossible negotiations—and one could only sympathise with them, because it could not possibly be their fault—because the pass had already been sold.

But it was effrontery for the Argentine military dictators to refer to the Falkland islanders as "basically a temporary population" when those islanders have been there far longer than the Argentines themselves have been in more than half their own country. Dr. Alfonsin has stated already that his new Government will not resort to force; but, of course, they cannot easily give up their claim until they are convinced that sovereignty cannot simply be transferred, just as Argentine Governments were convinced previously for 134 years, when relations were warm and cordial.

There is a problem about ocean islands all over the world which are of strategic or economic importance to various countries. But it is a world problem, and not one that relates just to the Falklands. Would the French give up the Kerquelen Islands and all her other islands in the South Atlantic and the southern Indian Ocean? Would Norway give up the Bouvet Islands in the South Atlantic? Would Russia give up the Kuril Islands, which she took only since the war? Would the United States of America give up Hawaii? One does not just give up islands because a bullying regime says, "I want them—they are mine".

In referring to the strategic implications I must repeat what I said briefly in the Grenada debate. The world is becoming obsessed, it seems, with the possibility of nuclear war, as if it were the only sort of war that could occur. But since both East and West would suffer almost total destruction and the paralysis of civilisation, we have to hope and pray that it will never happen. People thought about poison gas rather in the same way before the Second World War, but because both sides were matched it never got used.

Preoccupation with nuclear warfare tends to focus everyone's mind on what used to be called the "Western Front", as if a confrontation between East and West in the northern hemisphere is the only situation we have to worry about. But there is some sort of analogy here between the nuclear confrontation syndrome and the Maginot Line. People supposed that the Maginot Line was a "stop" to all warfare in Europe, whereas in fact it proved virtually useless; conventional warfare just went on all around it.

In a slightly different way, people think that either we will or will not have a nuclear war, and that provided we do not we shall have peace. But there is no peace now; conventional forces are engaged around the world in the same old way. The Third World War, far from being a dreaded nuclear possibility in the future, as depicted in literature and the media, is in my view clearly already going on. Forces and influences stimulated by Russia are fermenting strife and disturbance in almost every quarter of the globe. If we fail to appreciate that because of our preoccupation with the nuclear possibility, freedom and democracy will lose out time and again.

If we set aside for the moment the unlikely contingency of nuclear buttons being pressed, Soviet inspired bushfires will continue to smoulder or catch alight in all parts of the world. Unless the West has firm and stable strong points, held strategically around the globe, we could suddenly find that our security and vital maritime lines of communication—without which we and Europe cannot continue to exist—could be threatened, without our having realised how it came about.

In the Grenada debate I referred briefly to the undeniable fact that the Suez Canal might be blocked—undeniable because it has been blocked once already; and I am sorry to say that this morning it could hardly look more possible to happen again. If it were blocked again, all our supplies and maritime communications would have to take the long route around the Cape. Incidentally, that led last time to the unfortunate phenomenon of super tankers, which have caused so much catastrophic damage to the natural environment.

Apartheid and racial discrimination—and this is all part of the same area—are abhorrent to us all, but one has to recognise that those distasteful features occur in reverse and in different ways in numerous countries. Whatever one's feelings may be, it is prudent to recognise that we in the West, as well as those in the East, are doing our best to destabilise Southern Africa; and that if South Africa followed the calamitous course of some other African states, there could be a desperate situation for the free world.

As I have explained before, Russian bases in the Antarctic are not sited, like everyone else's, at the most convenient points, as we are, for easy access or economical approach, but are strategically ringed around the Antarctic continent. One is certainly nearly opposite the Cape in South Africa, and I leave your Lordships to judge the implications if there was ever a hostile Marxist regime in South Africa controlling our former naval bases at Simonstown and at Cape Town.

This brings me to St. Helena, very briefly. Without St. Helena, not Britain but the entire free world could be in jeopardy. St. Helena and Ascension Island safeguard the sea lanes to the Cape. St. Helena (still usually thought of merely as Napoleon's place of detention) is much more important for the maritime security of Britain and the free world. It has a population of 5,000, and the situation today is the mirror image of the Falklands before April 1982. It is on the decline, it is comparatively ignored, it is virtually undefended, and it is even without any form of deterrence, such as HMS "Endurance".

There were no indigenous people there, and the population's ancestors were established by the East India Company, and then by 19th century British Governments, to safeguard and service the sailing trade routes round both southern Capes. If I may say so, the East India Company and those earlier Governments comprehended a great deal more about these critical issues than our departments seem to do today. It is, I am afraid, the same old story in St. Helena: fanatically loyal, desperate for our interest and friendship, feeling a bit lost and unloved. But we in the free world may need them one day far more than they will ever need us.

Government aid to St. Helena runs to £6 million a year, little more than the cost of one mile of motorway. Yet the United Kingdom could exist for ever, if necessary, without one mile or even 200 miles of motorway, but the entire security of our supplies and therefore of our survival could possibly hinge on St. Helena. St. Helena's economic dependence on the United Kingdom dates from 1955, when Whitehall caused the total collapse of its flax industry by a sudden decision, without reference to anybody, I believe, that the Government should use synthetic string. That was the end of that. Incidentally, there has been no ministerial visit to St. Helena, according to my information, since the last war, and I believe that a request has been refused. I must ask my one question of my noble friend the noble Baroness: whether she can give us an assurance that a ministerial visit will be arranged to St. Helena at the earliest possible date.

I now turn to the other similar threat in the South Atlantic. It is paramount that the Falklands, South Georgia and the South Sandwich Islands are firm bases for the free world. I believe this also to be in the best interests of democratic government in Argentina, if they are given time to reflect. There should one day be some form of mutual co-operation about security. If Suez can be blocked, so can the Panama Canal; and the situation in Central America today must surely give rise to apprehension in that respect. That, incidentally, was the significance of Grenada.

If Panama was ever blocked, the entire shipping of the free world would have to plough round the old clipper course of 15,000 extra miles round Cape Horn, and if the nightmare prospect of a Castro-type regime at the tip of South America ever materialised Soviet Russia could then straddle the narrow seas known as Drake Passage, round the Horn. I have seen Russia's Antarctic base in the South Shetlands, immediately opposite Cape Horn, and I must urge this House to grasp the reality. If Suez and Panama were blocked at the same time, and if Soviet Russia had allies at the Cape and at Cape Horn, and if we were virtually at war, they could have us by the gullet and the free world would be throttled. And the question of the nuclear button would turn out to be totally irrelevant.

In this connection, we must not be obsessed about the Middle East as the primary source of oil. Nobody can predict today the pattern for future generations. There is talk of substantial oil resources in the Sea of China. If that proved to be the case—I have no idea if it is—supplies would have to reach Europe round Cape Horn, certainly if the Panama Canal was closed, and even if tankers were too large for the canal.

To sum up, Ascension Island is vital in order to sustain St. Helena; and St. Helena is vital in order to safeguard the trade routes round the Cape. On the other axis, Ascension Island is vital to sustain the Falkland Islands, and the Falkland Islands are vital to safeguard the trade routes round the Horn. Nor must we forget that the Falkland Islands are the gateway to the Antarctic.

In the centre, Tristan da Cunha, another British island with long established citizens, is vital as a link between these two diverging axes. To learn the lesson about retaining options, could I suggest to your Lordships that if I had started a debate two years ago to this very day about Ascension Island most of your Lordships would not have known where it was; you would have said, "Oh, he is introducing a Motion about some bird sanctuary to preserve some flightless cormorant"; and a number of your Lordships would not have turned up. But look at the situation today. Ascension Island proved the absolute key to our recovery of the Falklands, and it is now one of the busiest and most important Piccadilly Circuses in any ocean, for sea and air, not only for ourselves but for the whole of the West. Who can possibly predict that any island that I have mentioned in the South Atlantic may not prove, in some circumstances we cannot foresee, absolutely crucial to our security? We have no right to put our descendants at risk.

So the only course for this country now is a long and patient and sympathetic effort to get on side with a democratic authority in Argentina, with no further ambiguity about islands whatever at any time in the future—ambiguity having proved catastrophic in cost to both our countries. I beg to move for Papers.

3.28 p.m.

Lord Cledwyn of Penrhos

My Lords, we are greatly indebted to the noble Lord, Lord Buxton, for initiating this debate and for his wide-ranging speech. The House is very fortunate to have in the noble Lord—and indeed in my noble friend Lord Shackleton—two Members who are so knowledgeable about the Antarctic. The noble Lord, Lord Buxton, and his family have made a contribution in this field which we both value and admire.

The noble Lord referred a few moments ago to the importance of St. Helena. I had the good fortune or otherwise to spend six weeks on St. Helena. It goes without saying that I was allowed to return to Wales in due course. But, as he said, the island is one of great strategic importance, with a population of charming people who regard themselves as totally British. It is certainly an island which should never be neglected by this country; but that would be the subject of another full debate, and I look forward to the occasion when this House may have one on St. Helena.

The noble Lord in his Motion has referred to the Falklands and the other islands in the South Atlantic and their strategic importance. The debate therefore gives us the opportunity to look at the Falklands in the wider context of the Antarctic, and it reminds us of the importance of the Antarctic Treaty, which was signed on 1st December 1959; 12 nations signed it, and they were all carrying out scientific research in the Antarctic at that time, which was designated International Geophysical Year, as your Lordships will recall. The treaty has a life of 30 years and therefore comes up for renegotiation in a few years' time. I hope that it will be renegotiated in the same spirit of goodwill which animated the present signatories, and that the same objectives will be laid down and sustained for a further period.

I remind the House what those objectives are so that we may bear them in mind. The signatories agreed to establish free use of the Antarctic continent for peaceful scientific purposes; to freeze all territorial claims and disputes in Antarctica; to ban all military activities in the Antarctic, and to set up a mutual inspection system for this purpose—the world's first international inspection system, covering an area of over 5 million square miles. In my view it was an imaginative treaty and it has, on the whole, worked well and to general international advantage. It was a recognition that —and I quote from the preamble to the treaty— it is in the interest of all mankind that Antarctica shall continue forever to be used exclusively for peaceful purposes and shall not become the scene or object of international discord". That is the base upon which we and other countries should regard the region. Among the signatories were the United States and the Soviet Union, as well as Argentina and Italy.

However, it should be borne in mind when we look at the treaty that the signatory countries made clear in Article IV that the claims were frozen but not renounced. There is room, therefore, for argument and disagreement when renegotiation takes place. However, the case for peaceful co-operation on the continent is so overwhelming and so much in the interests of all the parties that it is inconceivable that the treaty will not be extended in broadly similar terms. I hope that in the years between now and the negotiation of the treaty Her Majesty's Government will work carefully and consistently to achieve that end. As one reflects against that great background, the Falklands dispute and conflict culminating in the invasion are shown to have been even more tragic and unnecessary than they were.

Perhaps we can be told by the noble Baroness, when she speaks, the latest position of the budget of the British Antarctic Survey to which the noble Lord, Lord Buxton of Alsa, referred. It totalled £8.3 million in 1981–82 and has. I believe, been increased since then. As the noble Lord said, the Falkland Islands war has affected some of the research which was going on at the time and it will be interesting to know the state of research now. Is it back to normal?

As to the Falkland Islands, I am sure that the noble Baroness will give an up-to-date account of developments there. It is on that aspect that I hope to devote most of my time in what I hope will be a short speech. I suppose that the developments can be roughly divided into two parts: namely, civil and military. On the civil side the Government broadly accepted the recommendations made by my noble friend Lord Shackleton in his report of September last year. As the House will recall, he advised the building of the new runway. Perhaps we can be told how this is proceeding. Can the noble Baroness say, for example, what are the contents of the contract? Will local people in the Falkland Islands who are out of work be employed? How many workers will be imported? If too many are taken to the islands to work that will create bad feeling, especially if there is unemployment in the area. That is a small but important point which needs looking at.

My noble friend also recommended a £35 million investment in the islands' development; £40 million in the exploitation of fishing off the Falklands and South Georgia with wider exploration: the transfer of farms from main landowning companies to farmers, and the setting up of a development agency. I believe my noble friend laid particular stress on making farms available to individual residents and potential settlers. A substantial measure of land reform seems to he essential. It was a key recommendation in my noble friend's report and it is difficult to understand why more progress has not been made since the report was published.

I have received some details and I should like confirmation from the noble Baroness on their accuracy. They are as follows. First, only 20 per cent., of the land area can be considered to be owner-occupied or tenanted. Second. 80 per cent., or 2,400,000 acres, is owned by absentee—mainly company—landlords. Third, about one-half of the islands' farming population live in tied houses which are controlled and owned by the Falkland Islands Company, which exercises monopolies and has enormous power in the islands. Incidentally, paragraph 100 of the Defence Committee's report in another place makes plain that this company is as tightfisted and money-grabbing a firm as is to be found in any of the novels of Charles Dickens. If those figures, or anything near them, are true the case for land reform is absolutely overwhelming. As I understand it—I hope I may say this to the noble Baroness—there is some suspicion that her department, the Foreign and Commonwealth Office, is not as enthusiastic about land reform in the Falkland Islands as it should he. It would be helpful. Therefore, if she can confirm that there is a real willingness to drive forward with a measure of land reform in the Falkland Islands.

It should perhaps be recalled that the Falkland Islands were never a burden on the Exchequer. They paid their way, and given the opportunity perhaps they can do so again. However, the presence of farmers with a stake in the future of the islands seems to me to be one essential factor. We frequently hear from the party opposite about the importance of owner-occupation. We are constantly exhorted to support it in such measures. Indeed, we are prepared to support it in a measure for owner-occupation by British people in the Falkland Islands. We hope that the Government will respond courageously and quickly to the need for more owner-occupation in the islands.

Further, can we be told what future the Government see for fisheries in the area? The report envisaged substantial developments and recommended an exploratory fishing project. What has happened? We read in the press that anything up to 100 foreign trawlers are fishing regularly off the Falkland Islands. On 23rd November the Daily Mail reported that a Polish fishing fleet was operating there, and that this did nothing for the islands' economy. It asked why the recommendation for a 200-mile fishing limit has not been implemented. Is this to be done? That is one of the most fundamental recommendations in the report. Is it not possible that some revenue might be obtained through a system of licensing? These are distant fishing grounds, but Europeans and Japanese are now using them extensively. It would be interesting to be told why our own deep-sea fishermen, having lost their traditional fishing grounds in the North Atlantic, are not among those who are now using these very substantial fishing areas, perhaps the greatest expanse of untapped fishing resources in the whole world.

We are also glad that the new chief executive has been appointed, although it has taken rather a long time to make the appointment. I understand that he is very well qualified and experienced. We wish him all success in his most important post. The prosperity of the islands will depend a great deal upon his leadership and upon the willingness of the Government to back him up. We hope that he will grapple with the development programme. Perhaps the noble Baroness will tell us about progress in getting this programme under way.

I have already dealt with land reform but reinvestment in agriculture is not mentioned in the programme thus far. Investment is needed in the farms, in stock management, sheep breeding, drainage schemes, and so on. One of the graver charges made is that the money—I think £31 million—allocated to develop the islands is being used for stop-gap measures or to provide services to the garrison. On the other hand, agriculture and fisheries, which are of primary importance to the Falkland Islands, are alleged to be badly neglected. These are charges which must he dealt with by the Government. It would certainly appear right that expenditure on the needs of the garrison, on the one hand, and expenditure on the islands' development programme, on the other, should be kept apart and shown separately for accounting purposes. These are matters that it is important for the new Chief Executive to consider very carefully at the start of his tenure of office.

There are a number of other points under this heading but no doubt they will be covered by later speeches. For example, we have heard a great deal about minerals and oil in the area, but I understand that these are not immediate prospects, especially in the waters around the Falkland Islands themselves.

The military costs are of course another matter and they are again of great concern to everyone. The new airfield may be regarded as part of these, but it also has a civilian and a scientific value. In the longer term it will save money. I think that a figure of £25 million to £30 million a year was mentioned by the Ministry of Defence to the All-Party Defence Committee. It is well to remember that the committee describes the present permanent garrison as a "major burden" on Britain's defence resources. I think that this is sufficiently important for me to give the House some figures. The extra military costs over the years 1982 to 1986 are put at £2.6 billion, plus the basic costs in pay and equipment of £690 million over 1983 to 1986. The committee foresees additional costs running at between £175 million and £200 million a year, plus a further £200 million in naval capital costs. The committee did not compute the price of extra aeroplanes and ships, which obviously wear out faster in the climate of the South Atlantic. We are therefore talking about an expenditure of a little under £l billion a year between 1982 and 1986. The likely bill over a 10-year period looks like being between £6 billion and £7 billion. It is a fearful bill to pay, especially given our other commitments. This fact is made very clear in paragraphs 2 and 16 of the Defence Committee report.

This leads me to my last point, which is the need for a longer-term political solution. I was glad to note that the Government's recognition of this was implicit in the reply of the noble Baroness, Lady Young, to questions on 28th November. Like her, we warmly welcome the new Government in the Argentine and wish it well. I endorse the welcome extended by the noble Lord, Lord Buxton of Alsa, in his speech. The new president, Dr. Alfonsin, is a man of great distinction and unquestioned integrity. Our fervent hope is that he will establish a stable and successful democratic Government. So great is the desire of people everywhere for free and democratic societies that there was a feeling of hope and of a new beginning when the news came that Dr. Alfonsin's party had been elected in Argentina.

What is important—indeed, what is vital—is that the United Kingdom should at the right moment (and certaintly not too late) respond to this new Government. We must work for good relations. There is much that we can do to help Argentina, although the Falklands conflict is still very much in people's minds both here and in the Argentine. An early step must be taken to re-establish normal diplomatic relations and to resume trade and financial co-operation, and later a new approach must be taken to the Falklands problems, which certainly will not fade away. In other words, we must proceed step by step.

In this, I know that we shall be helped by sensible elements in the United Nations and specifically by Senor Perez de Cuellar. The United Nations, as the House knows, has been fairly active in its discussions about the Falklands in recent months—in the Decolonisation Committee in September and the General Assembly last month. The Decolonisation Committee is not a particularly helpful agency when it comes to finding a solution, partly because of its composition and partly because the Falkland Islands are not a colony in the normal sense. A more realistic approach is therefore called for.

Unfortunately, Britain will not be represented at the inauguration of the new Argentine President, but the United States is to send a strong delegation, headed by Vice-President Bush; other Western representatives will also be there. The question of the lifting of the United States arms embargo is also important to us, although I cannot believe that the United States will provide supplies for a new invasion of the Falklands. Mr. Geoffrey Smith in The Times on 24th November said: it will be essentially symbolic and a further gesture of friendliness towards the new democratic regime". Let us hope that that is so. I also hope that the United States will use the occasion to counsel an early and friendly approach to the United Kingdom. The one essential and overdue measure is a declaration by the Argentine Government that hostilities are at an end. That would, we all hope, open a new and more constructive chapter in our relationship.

The noble Lord, Lord Buxton of Alsa, dealt at some length with the problem of sovereignty. I do not propose to follow him in any great detail because I am concerned at this time to move gradually towards better relations. Against a background of good relations, we might at some stage show a willingness to achieve a peaceful and lawful resolution of outstanding difficulties between us: but it would be difficult to go further than that at this stage.

Much depends on the new Government and especially on the new President, Dr. Alfonsin. We wish them every success. A great deal also depends upon the sensitivity with which the British Government deal with them and the expedition with which our Government show themselves willing to treat with them. Much also depends on public statements made especially by the Prime Minister but also by other Ministers concerned with foreign affairs. I believe that at last there is an opportunity to mend the fences between our two countries. Let us take advantage of it.

3.46 p.m.

Lord Gladwyn

My Lords, in spite of the powerful argument developed by the noble Lord, Lord Buxton of Alsa—to whom we are all very grateful for introducing this subject for debate this afternoon—speaking for the Benches behind me I should like to put forward what might be called the counter-thesis to the general argument developed by the noble Lord. In our view the time is now, or at any rate very shortly, to reconsider our whole policy towards the Falkland Islands. At the moment, the attitude of the Government appears to be—the noble Baroness, Lady Young, who is to follow me, will no doubt correct me if I am wrong—as follows.

First, until such time as the new and democratic Argentine Government declare that a state of war no longer exists, no talks of any kind with that Government can be considered. I think that is obvious. Secondly, even if such an admission is forthcoming, it must (before there is any resumption of diplomatic relations, I suppose) he accompanied by a further declaration that the Argentine Government have no intention of having recourse to force in order to settle the long-standing dispute over the ownership of the islands. Thirdly, although not using the word "never", the Government cannot, however, agree that these talks should in any case cover the question of sovereignty. If talks should take place in the foreseeable future, therefore, they must deal merely with a normalisation of relations.

Fourthly, on the almost certain assumption that no Argentine Government, however democratic, is going to renounce its formal claim to sovereignty—and I think that we can take that for granted—it is consequently necessary for us to maintain (apparently for an indefinite future) a very considerable garrison on the islands, with appropriate naval and air support, at a present cost of at least £750 million annually. I think that that is a minimum estimate, as the noble Lord, Lord Cledwyn of Penrhos, said. To this end we must seemingly also construct a large airfield at a further cost of £250 million.

Fifthly, if the Argentine Government should rearm to any notable extent (and I can assure your Lordships that they are at the moment building up a really powerful modernised force on sea and in the air), these defences may well have to be greatly strengthened, resulting in additional demands on our own exiguous resources. No doubt fairly shortly the cost will amount to at least 1 billion a year. I think that that can hardly he disputed, in spite of what the noble Lord, Lord Buxton of Alsa, said.

Whatever view may be taken of this policy—and of course the Government have reasons for supporting it—one aspect of it can hardly be denied by any reasonable person, I should have thought. It will not only place a dreadful burden on our already strained finances: it will also seriously weaken the defence of our own islands against any conceivable assault by the Soviet Union and thus undermine the very structure of NATO, on the maintenance of which the security of the whole free or Western world undoubtedly depends.

Not only that, my Lords. Given the not unnatural desire of the United States Government, in the event of trouble in Europe, to have a friendly Argentine Government, no doubt in possession of American arms, who are both willing and able to take part in securing the trade routes around the Horn—and I suggest to the noble Lord, Lord Buxton, that that would be the function not of our own far-flung frigates, but of a sensible and well-disposed Argentine Government provided with American arms—a continuation of the dispute is therefore likely to cloud our relations with our chief protector, on whose goodwill we necessarily rely.

As I say, for myself I should regard such conclusions, however unpalatable—and they are unpalatable —as something which no reasonable or unprejudiced person could possibly rebut. Perhaps in the course of today's debate they will be rebutted, but that remains my own personal view.

So I suggest that we have got ourselves into an almost untenable position which, in the national interest, cannot be allowed to continue. In other words, we must, if humanly possible—and I repeat, if humanly possible—quickly end our quarrel with the Argentine by reasonable and peaceful means. The advent to power of what, on the face of it, seems to be a reasonable and peaceful democratic regime in Buenos Aires makes it possible for this process at least to begin. What are the difficulties if it does?

Let us first take the chief one, the main stumbling block—sovereignty. I believe that even now in the country there might at least be general agreement that our failure at the beginning of 1980 to settle for a formula which could have resulted in successful negotiations for a peaceful settlement was a major misfortune; I repeat, a major misfortune. Whatever may have been the arguments against some kind of leaseback arrangement on sovereignty—and, after all, there is no doubt that the Government over which Mrs. Thatcher herself presided thought that, in principle, it should not be rejected; that is a point that we must consider—there was, and. as I see it, there still is, reason to suppose that some variant of it which might conceivably include a long-term agreement on local autonomy for the Falkland islanders could have formed, and may still form, the basis of a long-term settlement, no doubt as a result of long discussions.

Naturally, if that had been achieved in 1980, many lives would have been saved and honour satisfied, and an intolerable and dangerous burden on this country could have been successfully avoided. That things did not work out in that way is therefore something for which we must surely ourselves bear some responsibility. For years the Foreign Office had warned us that short of some such agreement, we should either have to face humiliation, or he involved in hostilities, with quite unpredictable, but almost certainly unfortunate, long-term results. For anyone who doubts that we missed opportunity after opportunity of coming to terms with the Argentine, William Wallace's article on the Franks Report is, I suggest, required reading.

The second misfortune, as I see it, lay in the refusal of the Argentine junta—whose action in occupying the islands can in no way be excused—to accept the so-called "Peruvian" formula for negotiations after the task force had sailed but before it had actually engaged in warlike action. Let me remind the House of the terms of the formula. I shall read them out; they are very brief. The formula proposed was:

  1. "1. Immediate ceasefire.
  2. 2. Mutual withdrawal of forces.
  3. 3. Involvement of third parties on a temporary basis in the administration of the islands.
  4. 4. Acceptance by both parties of the fact that a dispute over sovereignty exists.
  5. 5. Acknowledgment of the fact that the views and interests of the islanders must he taken into account in reaching a definitive settlement.
  6. 6. Formation of a contact group compromising Brazil, Peru, West Germany and the United States.
  7. 7. The conclusion by April 30th 1983 of a definitive settlement for the working out of which the contact group would be responsible".
After rejection by the junta of those proposals—which I think there is no doubt Mr. Pym and the Government would have found very difficult to turn down—the brilliant operation that resulted in our reoccupying the Falklands became inevitable. Here, therefore, the blame lay entirely with the Argentines, who had already temporarily put themselves quite out of court by reason of their resort to simple aggression.

But that does not mean that there was never anything to be said for the Argentine claim to sovereignty. That claim, and our own claim, should years ago have been amicably settled by some kind of compromise; and despite what has happened, it still should be settled in that way.

Incidentally, I note that Dr. David Owen—I think that I may call him my right honourable ally—though he does not himself think that leaseback is a good solution, at least did not exclude it in the powerful and imaginative speech that he made in another place just before the task force began its operations, any more than, while preferring other solutions, such as, I believe, a kind of condominium, he did not entirely exclude it during his broadcast of 20th November, in which he also came down strongly in favour of our at any rate discussing the sovereignty issue.

No, we are told, all that is quite unacceptable. I think that that is the noble Baroness's view. Blood has been spilled; an impudent aggressor has been humbled; British subjects have been freed from alien domination; the Falkland Islands are as British as the Isle of Wight, and unless the inhabitants decide otherwise, must remain so for ever, come what may. To negotiate now over sovereignty in any way would be to betray those who died so gallantly in defence of their compatriots, and would imply that the enormous and successful effort to eject an invader and reestablish British sovereignty had been made in vain. Is that really the present mood of the country? It may he, but if it is, I still venture to make the following remarks.

Whatever the political future of the islands, those who died in the Falklands did not die in vain. They died to make it plain that military action taken against a peaceful population who had no wish to be taken over by an alien army, against all the principles of the United Nations, should not be allowed to succeed. By their death they also demonstrated that, far from being finished, our country was in an emergency capable of extraordinary efforts—something of which any future foe would do well to take note. Finally, the whole effort, wonderfully successful as it was, was of great use in demonstrating what were the weak points in our defences, and how best to set them right. Yes, my Lords, those who died at Goose Green and elsewhere, on our ships and in our aircraft, were heroes indeed. We can confidently hope that our race will produce similar heroes if it should ever come to a conflict very much nearer to our shores.

Nor would it be to betray them to try to reach a solution designed to avoid war, and at the same time to ensure a reasonable future for the islands' inhabitants: of course it would not. There have been many suggestions for formulae which, always supposing that we are to reach some compromise on the sovereignty issue, might achieve this end. Apart from some form of leaseback, possibly combined, as I say, with local autonomy—in my own view much the most hopeful possibility—or the establishment of some kind of condominium, as recommended by Dr. Owen, at least over some defined areas, perhaps to be effected within the framework of existing treaties on Antarctica, there are ideas regarding trusteeship, periodical referendums, some federation of islands in the southern Atlantic, some arrangement with the Organisation of American States, and some way of freezing the sovereignty issue—to mention only a few. No doubt, some of them, after professional inspection, will prove more practical or generally acceptable than others. We do not know. But all should certainly be discussed, provided only, at least as I see it, that we agree that the question of sovereignty should not be excluded from the negotiations. That is really the crux.

The argument that none of these possible solutions can ever be considered because of the behaviour of the former junta or the ensuing regrettable war is, frankly, emotional and not reasonable. Given the clearly unfortunate results of merely staying put, any refusal now to negotiate in what all Argentines, irrespective of party, would regard as good faith is not a policy that should be pursued by any Government here conscious of what, after all, are its own country's vital interests.

Such a policy would in any case hardly be compatible with good relations with our principal ally. Certainly, it would not be considered by a very large majority of nations at any rate to be compatible with our obligations, for what they are worth, under the charter of the United Nations. After all, the Security Council's famous Resolution No. 502 coupled the evacuation of the islands by the Argentine with renewed negotiations for a durable settlement. The Falklands have now for 18 months been free of Argentine troops. What has happened to the second part of the resolution?

I naturally accepted the dispatch of the task force. It was my hope and belief that its dispatch would compel the Argentine Government to seek a settlement based on the withdrawal from the islands of its invading army, thus publicly acknowledging that aggression did not pay. As I have said, this hope was dashed when the junta turned down the Peruvian proposals for a settlement. I quite agree that we had no alternative but to eject the aggressors by force of arms. No one is more appreciative of the splendid action then taken by our forces than I. No one more regrets the subsequent loss of so many gallant men.

But that does not mean that we should now refuse to consider a long-term settlement which, on the assumption that a democratic Argentine Government endures, might be both acceptable to that Government and at least thought by the Westminster Parliament here to be in the best interests of the islanders. Indeed, it may be taken for granted that, unless we are disposed to consider such a settlement, the future of the present democratic regime in Buenos Aires is at least precarious. If it should collapse, there is little doubt that the existing state of war and all that that entails will persist for an indefinite future.

There has been much discussion in the past and there is still a division of opinion. I believe, on whether, in the last resort, it should be the "views" of the islanders or their "interests", as finally decided by the Westminster Parliament, which should prevail. Here again, I myself would entirely agree with David Owen, who feels strongly that, while every regard should be had to their views, the islanders cannot be given the right to decide by a majority whether some agreement, arrived at in negotiations, is acceptable or not. In other words, they should not have a right of veto. For to give such a right on a matter that evidently could vitally affect the security of the United Kingdom would be, to say the least, not a reasonable thing to do. In saying all this, I need scarcely add that, as he himself recently made clear in a speech, I am reflecting the views of my leader, David Steel, and, I hope, the entire Liberal Party.

To sum up, all that is wanted in order for some acceptable settlement to come into sight is (a) a statement by the new Argentine Government that in their view hostilities have ceased and that they have no intention of seeking to gain possession of the Falklands by force of arms, and (b) a simultaneous statement by Her Majesty's Government that they are in that case willing to resume negotiations for a long-term arrangement from which the question of sovereignty will not be excluded. The point is that (b) should somehow, I feel, be conveyed, in the next few months, perhaps, in draft, to the Argentine Government in order to induce them to agree to (a). I can only trust that, whatever the emotional resistance to such a policy may be, the Government will, if not now, then quite soon, have the courage to admit that it represents the way of peace and the path of wisdom.

4.5 p.m.

The Minister of State, Foreign and Commonwealth Office (Baroness Young)

My Lords, we are all especially grateful to the noble Lord, Lord Buxton, for introducing this important debate today. There are many ways in which one might approach the question of the, importance of the Falkland Islands and other British islands in the South Atlantic. Some may emphasise the significance of the geographical location of the Falkland Islands, South Georgia and the South Sandwich Islands. They may be seen as stepping stones to Antarctica, as indeed they are, although there are others, including the South American mainland.

Others, recalling the exploits of Her Majesty's ships using Falklands harbours in both world wars, will point to the islands' continuing significance if, in circumstances that are awful to contemplate, it becomes necessary to ensure security of passage for the defence of freedom. Advocates of this view must recognise the substantial changes in many aspects of naval warfare since the Falklands last served this purpose. Others may see these territories as important in the possible exploitation of what may be prolific resources around them, some of which have been the subject of expert comment by the noble Lord, Lord Shackleton.

None of these themes is to be under-estimated, still less discounted. But I commend to noble Lords the words of my right honourable friend the Prime Minister in another place. She said on 26th January that it is obviously premature for either the islanders or ourselves to speculate…about specific policies for the long-term future".—[Official Report, Commons, 26/1/83, col. 989.] This remains true, and means that discussion now of future policies based on, for example, international energy ventures in the area will be far into the realms of hypothesis and distract us from our main purpose today. This includes a review of our programmes of rehabilitation and development in the islands; and I shall say something on this later. We have meanwhile witnessed, and welcomed, the restoration of democratic rule to Argentina.

Let me first set out what I believe to be the islands' special importance to the Government and people of Great Britain. Successive British Governments recognised the basic geo-political reality of the distance of these islands from Britain, and the need for the islanders to have good relationships with countries of the mainland of South America. Distinguished Falkland islanders who have recently visited me in the Foreign and Commonwealth Office have acknowledged the desirability for all of us of re-establishing a rational working relationship with Argentina.

In the light of these factors, successive British Governments over the past 20 years made sincere attempts to reach agreement with Argentina. Three courses were open to them. They could have handed over the Falkland Islands to Argentina on a basis unacceptable to the islanders. This is not an honourable course. We, in this Parliament, have the final responsibility for taking decisions about these territories. We are fully aware of the commitment of successive British Governments to take the fullest account of the wishes of the people of the Falkland Islands.

The second course is the acceptance of the commitment to defend the islands against the threat from Argentina, accepting the cost in resource and financial terms; and not having any dealings with Argentina concerning sovereignty over the islands. The third course was to try to negotiate a settlement taking account of Argentina's deeply-held claim to sovereignty and, at the same time, of our own position and of the wishes and interests' of the islanders, and to meet the requirements of both. We were pursuing this course when the negotiations were brutally interrupted by the Argentine invasion of 2nd April 1982.

Our first basic task now must be to ensure that there can be no repeat of the invasion. We have been forced to pursue the second of the policies that I have outlined. Some have given this the misleading and emotive title of, "Fortress Falklands". Whatever one calls it, it is not a policy of our choosing. We also have the commitment to ensure that the Falkland islanders enjoy a worthwhile life. This work goes hand in hand with the obligation to guarantee the security of the islands until such time as we can be confident that there are peaceful relationships between them and all the countries of the mainland.

In the past 18 months, the Falkland Islands have had forced upon them an importance which is unique. The British Government, Parliament and people, and the Falkland islanders, have shown exceptional determination to apply and protect the values of the free world. This has earned a special place in the history of Britain, of the islands, and of democracy itself. Between April and June of 1982 British forces fought for principles which we hold deeply, including the right of the peoples of small territories to live unmolested by their larger neighbours, and the right of all peoples to live under a Government of their own choosing. These principles were upheld by us in battles for South Georgia and for the Falklands. We uphold them now in our defence and development of the islands.

Let us now turn to the present. Her Majesty's Government welcome the election of a democratic Government in Argentina. We wish President-elect Alfonsin and his colleagues well. But especially while the Argentines refuse to declare a cessation of hostilities and renounce the use of force to pursue their claim, we must continue to apply the necessary resources to the task of defending the Falklands. Let me reiterate again that our military dispositions in the Falklands are solely for the purpose of ensuring that the tragic events of 1982 do not recur. Allegations of a strategic base are manifest nonsense. Our garrison in the islands is of the minimum size we deem necessary to ensure the effective defence of these territories. There is a 150-mile protection zone around the islands. I emphasise its size and title, which are frequently misrepresented. With its centre point in Falkland Sound, its perimeter is in some places a bare 80 nautical miles from the shores of the islands—a very short distance when we consider the speed and range of modern combat aircraft. It must also be self-evident that we have no interest in threatening Argentina with nuclear weapons. At the time of the conflict in the South Atlantic last year we made it quite clear that there was no question at all of nuclear weapons being used. This remains the position. Our deployments are those necessary to defend the Falkland Islands from aggression, and no more.

Work has begun on the construction of a new airfield at Mount Pleasant. This airfield will facilitate the rapid reinforcement of our garrison should the islands once again come under active threat. We hope that its existence will enhance the credibility of the deterrence there. But let us hope that this role will be for the short term only. Construction of the airfield also meets a most important recommendation for the economic development of the Falklands made by the noble Lord, Lord Shackleton, in both of his reports. We all acknowledge that frequent air journeys to the islands by large groups of civilians are a rather distant prospect. But civilian traffic will increase with every step taken towards the stimulation and diversification of economic activity in the Falklands. The airfield's civilian functions will we hope soon become its primary purpose; it is important to take due account of this essential aspect of its construction.

Relations between the civilian and military populations are strikingly harmonious. Our troops and their commanding officers have shown a fine appreciation of the need to pay every due regard to the concerns of the local population, whom they outnumber. And I know that the islanders are appreciative of the work done for them by the British forces. Outstanding is their work on mine clearance which, tragically, has claimed the life and limb of some of those soldiers engaged in the task. The clearance of battlefield debris continues. But some minefields remain and we do not yet have certain means of detecting the types of mines which lie in them. A programme of research into methods of detecting and clearing such mines is virtually complete and its results are being evaluated.

It is taking time for the tragic damage of the war to be repaired and for psychological wounds inflicted on the islanders to be healed. Moreover, the British Government have a right to insist on a measured approach. The United Nations General Assembly adopted on 16th November a resolution recommending that we should enter into negotiations with Argentina over the sovereignty of the Falkland Islands. As many as 62 countries showed their understanding of our position by declining to support the resolution. The number voting with Argentina fell from 90 to 87. The negotiations envisaged in the resolution, in the eyes of Argentina and her supporters, can mean only one thing; the transfer of sovereignty to them. We naturally rejected the recommendation that we should enter into such negotiations. The adoption of the resolution makes no difference to our commitment to the people of the Falkland Islands.

On the islands themselves, we shall persevere in our work to enable the islanders to resume, as far as possible, the pattern of life which drew them and their ancestors to that remote territory. To this end, we are considering with them the future structure of their internal Government and electoral system. This work does not address the question of the islanders' future relationship with this country; this must be for later.

This work to ensure that the islanders have a worthwhile life includes the economic and social development of the islands. Already the Government have made a total of £46 million available for this purpose. A grant of £10 million was announced in July 1982 for urgent rehabilitation and repair work following the cessation of hostilities, and the Government subsequently agreed to make a further grant of £5 million available for this purpose last December.

At the same time the Government also announced that £31 million would be made available over the next six years for longer-term economic development. This was in response to the report produced in September 1982, at the Government's request, by the noble Lord. Lord Shackleton, up-dating his 1976 study on the economy of the Falkland Islands. We are very grateful to the noble Lord and his team for this work and acknowledge his deep and continuing interest in the efforts both here and in Port Stanley to establish a sound economic future for the islands.

At the outset, the British Government concentrated on rehabilitation and reconstruction. In consultation with the Falkland Islands Government, we identified a variety of urgent needs. Principal among these were the repair and replacement of damaged housing in Port Stanley: the repair of roads in the capital and the road to the airport; and the restoration of the Falkland Islands Government air service which had been totally destroyed.

I am pleased to report that the Government air service was re-equipped with three aircraft and has been fully operational for some time. Road repair work is progressing satisfactorily. The construction of 54 furnished prefabricated houses is also in hand and should be completed early in the New Year. The British Government have also provided fuel, plant, tools, building materials and equipment for the public works department as well as 20 mobile houses to provide temporary accommodation. A wide variety of items from Government department inventories, either damaged or destroyed during hostilities, are also being replaced. Of the £15 million for rehabilitation, some £12 million has been spent to date and the greater part of the remaining £3 million is likely to be disbursed before the end of the current financial year.

The future economic development of the islands must he tackled in a more deliberate and structured manner. The report by the noble Lord, Lord Shackleton, provided a framework within which to consider that development. It was first discussed with the Civil Commissioner, with the islands' councillors, among the islanders themselves and with other interested parties. Their views were fully taken into account by the British Government when considering the report's recommendations.

The Government agreed with the broad conclusions of Lord Shackleton's report. We announced that a grant of £31 million would be made available over the next six years in support of the Falkland Islands Government in a number of major areas identified in the report. Perhaps at this stage I might answer the point raised by the noble Lord, Lord Cledwyn, and assure him that the £31 million is not being used for services to the garrison; it is being devoted exclusively to the future economic development of the islands. These areas include the establishment of a Falkland Islands Development Corporation, expansion of the islands' agricultural research centre and a feasibility study on an improved harbour complex, including a new deep water jetty. It was also agreed that a pilot scheme for salmon ranching and a survey of shellfish resources should be established, and that encouragement be given to the development of cottage industry skills.

Although not specifically covered in the noble Lord's report, the Falkland Islands Government identified urgent action to he taken to improve water and power supplies as well as telecommunications. Both Governments considered that further study was necessary on proposals in the report to undertake exploratory offshore fishing and to establish a 200-mile fisheries limit; and on the expansion of tourism. They also believed that a gradual approach to land distribution was more appropriate than the wholesale transfer and sub-division of absentee-owned farms, as recommended in the report. This approach is also right in terms of realistic estimates for immigration.

Since these events in December, there has been regular consultation between the Falkland Islands Government and ourselves, including visits by Ministers, officials and professional experts. These have all contributed to the identification by the islands Government, within the broad areas I have indicated, of projects which they would wish to see financed from the development grant of £31 million. I should like to inform the House of what action has been, and is being, taken to implement a development programme in the islands.

Last week the new Chief Executive to the Falkland Islands Government flew to Port Stanley. He is Mr. David Taylor, formerly of Booker McConnell plc, and he is taking up an appointment first recommended by the noble Lord, Lord Shackleton, in 1976. As Chief Executive, Mr. Taylor's duties will combine those of chief officer to the Falkland Islands Government and executive vice-chairman of the new Falkland Islands Development Corporation, also recommended by the noble Lord. Mr. Taylor will therefore be responsible to the Civil Commissioner for running the administration as well as for implementing the range of development projects. In this respect his role is central to the future economic development of the islands.

One of his early tasks will be to consider, with local advice, the scope of the new development corporation's activities as well as the sort of support staff it will require to become fully operational. The corporation will have powers to make loans and grants to encourage small-scale development projects as well as to provide loans for agricultural improvements. It will also provide the on-going after-care, advice and encouragement that will be essential if such ventures are to succeed. This will be especially important in the agricultural sector, where the British Government made available to the Falkland Islands Government earlier this year £450,000 for the purchase of a large farm on West Falklands. This farm has been subdivided for sale or lease to those islanders interested in farming their own land.

There is the possibility of further land being made available for sub-division on the open market, and this is entirely consistent with a gradual approach to land redistribution on a willing buyer-willing seller basis. An agricultural mission, under the auspices of the ODA, is currently in the islands to evaluate the results of farming on land sub-divided before last year's hostilities. This will lead. I am sure, to an invaluable exchange of advice and experience on future developments in this sector.

The agricultural mission is also putting the final touches to the proposal to expand the Grassland Trial Unit, now known as the Falkland Islands Agricultural Research and Development Centre, as recommended by the noble Lord, Lord Shackleton. This project has been in existence for a number of years, and if the proposal to expand it is found satisfactory will continue with the primary objective to identify, research, develop and refine methods for the greater production of wool by developing new sheep farming systems.

The British Government also financed a visit by a forestry consultant, and his report is now being studied by the Falkland Islands Government. Approval has now been given for a loan to be made to establish a wool mill at Fox Bay East on West Falklands. This project has been worked up by two individuals in the islands, Mr. and Mrs. Richard Cockwell, who recently completed training, funded from the aid programme, at the Scottish College of Textiles. The project is designed to produce machine knitting yarn from the locally grown island wool clip. Some of the yarn will he sold to local and United Kingdom home knitters and to United Kingdom garment manufacturers. The remainder will be knitted at Fox Bay East into garments for sale locally and by mail order overseas.

There has been much speculation recently about the prospect for fishing around the islands. The noble Lord recommended that a 200-mile exclusive fishery zone be established, not least for reasons of conservation, and that exploratory fishing be undertaken. The implications of a 200-mile fisheries limit are under consideration. Meanwhile, the Falkland Islands Government are considering commercial proposals for exploratory offshore fishing as well as proposals for similar work inshore. These are matters in which I expect the new Chief Executive to become involved shortly. Some financial assistance from the development grant is being sought in each case. A final report from consultants recommending the establishment of a pilot plant for salmon ranching is also on its way to the islands.

I now turn to infrastructure. At the request of the Falkland Islands Government, the British Government have provided consultants who have now completed their studies of future power and water requirements for Port Stanley, and on town planning. The various recommendations are being studied in London and in Port Stanley!, and are presently the subject of exchanges between the Falkland Islands Government and ourselves. Implementation will depend initially on the Falkland Islands Government's reaction and on the British Government approving the finance. A study for a new deep water jetty is also in progress, prior to a visit to the islands by the consultants.

Finance is being provided from the development grant to establish a small-scale industrial estate in Port Stanley. This will provide units for potential entrepreneurs in the islands who have expressed a wish to set up such ventures as garage and electrical repair workshops. Arrangements are also well advanced to establish permanent boarding school facilities for secondary school children in Port Stanley.

At the request of the Falkland Islands Government, we have provided, through visits to the Falklands, advice and guidance on ways in which the Falkland Islands Government might wish to develop their educational and medical sectors. We continue, under the aid programme, to provide a broad level of support, involving over 50 expatriate officers in such fields as agriculture, education, public works, medicine and civil administration.

The administration of the programme and the provision of manpower, equipment and materials are affected by the vast distances involved and the difficulty of covering them. They must also fit in with other developments on the islands not directly related to civil development. We do not under-estimate the difficulties which these factors impose, nor the feelings of frustration which they can engender that progress is, at times, slow. But, given the circumstances, I hope noble Lords will agree that good progress is being made. If benefits are to be obtained, it is important that whatever is implemented is firmly based and effectively managed. The implications—financial, social, economic and environmental—for the islands, the islanders and their way of life must he taken into account. This is being done and will continue. But any changes will be the subject of continuing consultation and agreement between Her Majesty's Government and the Government of the Falkland Islands.

In conclusion, I think it right, with the inauguration of the new Argentine Government only four days away, to look ahead at our future relationship with them. Rather than to pursue sterile debates about sovereignty, we ask the Argentines, under their new Government, to take a realistic view. The brutal attack on the islands ordered by the former military regime caused a fundamental and very sad rupture of the good relations that had existed between our two countries. Dr. Alfonsin and his Government had no part in the decision from which these consequences flowed, but they cannot escape inheriting these consequences. We look to them to work with us in recreating the good relations that had been traditional.

They must realise that, here again, much time will be needed: the work must start at the level of the most basic foundations. But we are keen to get it under way. My right honourable friend the Prime Minister has expressed in another place her hope that Argentina, having returned to democratic ways, will be prepared to consider better commercial and economic relations with Britain. She has also said that her message to the new Government of Argentina was simple: I am willing to enter into talks. We want good commercial relations, diplomatic relations. We want normal relations. But I am not entering into talks about sovereignty". Repeatedly, through the European Community and its Presidency, we have sought the reciprocal lifting of the commercial and economic sanctions imposed at the time of the conflict. The military rulers of Argentina have failed to respond at all positively to these representations. This is particularly regrettable because we believe that addressing the question of the reciprocal removal of trade restrictions would permit exchanges with the Government of Argentina on the subject which offers the most realistic prospect of early progress. Such progress could then lead to the development of confidence between our two nations. Commercial exchanges would also lead to the renewal of many of the traditional contacts between Britons and Argentines which are now so sadly in suspense.

I do not rule out exchanges in other fields, such as cultural relations; but it is in the sphere of trade that progress at governmental level can be achieved most readily. Our efforts to achieve normal relations in other areas also include participation by the Government through the International Monetary Fund, and directly by British commercial banks in international rescue operations to forestall the danger of Argentina defaulting on her debts. We remain ready in principle to accept a suitably-prepared visit to the islands by Argentine next-of-kin. Dr. Alfonsin's views at the time of the invasion of the Falklands were known to be contrary to those of the Argentine military. I hope that, in his consideration of our proposals for the improvement of relations between our two countries, his position will be in equally marked contrast to that of the junta.

If the new Argentine Government can respond in the way we hope, they will be making their contribution to the gradual re-establishment of mutual confidence that is so necessary. We had to go to war with another Christian nation with whom we had traditionally warm relations. The consequences of that tragic conflict are such that co-operation in laying foundations for our future relationship is no easy task. But there are areas where we could move forward and which we have identified. It is the hope of the Government that we can build on these.

4.33 p.m.

Lord Shackleton

My Lords, first of all, I should like to express my appreciation to the noble Lord, Lord Buxton—and not only to him but to his family. They have given a lot to the Falklands, and they have given a lot to wider areas. I have in mind his daughter. Cindy Buxton; and I couple with her Annie Price and, in particular, that lovely lady the late Lady Maria Buxton. I shall treasure the picture of Lord Buxton and Maria wearing those rather strange survival suits on South Georgia which make you look rather like a Michelin man. He has brought a devotion, as has his family, to an area in which his own interest is in conservation. Through the whole problem of the Falklands runs the problem of conservation.

I have not thought it my duty as the author of two reports—when I say author, most of my team did the work—of great length to pursue in public the implementation of those reports. However, I am grateful both to my noble friend Lord Cledwyn for his exposition, and to the noble Baroness for her response. Although I have certain criticisms, I doubt whether any author of a report has had so much of that report actually implemented by a Government. I am grateful for that.

It is important to realise that in implementing a report which was essentially a framework written in little more than a month—although confirmed by my colleague Bob Storey, from the Highlands and Islands Development Board, when we visited there—it is not necessarily right to carry it out in every detail. I have, however, one major criticism which I must make and one problem which, at the moment, I do not see being solved.

I am grateful for the figures that have been given, which are very large and ought to be acknowledged as such, and the degree of energy, despite the apparent delays. The ODA will always be attacked for delays, but I happen to have talked to many of their officials and there has been a commitment. However, there is one area where I believe the Government have a blind spot, and that is with regard to the ownership of the farms.

I should like to recap briefly the views that my team formed on this crucial issue. In our first report most of my team wanted to propose the taking over of all the farms that were absentee owned. I opposed it on the grounds that it might be thought that because the chairman was a member of the Labour Party it was a piece of doctrinaire politics, although the case was strong on the following ground: so much money was going out of the country that could be reinvested—and ought to have been reinvested—in the farms.

When we came to look at it again five or six years later and found that perhaps merely two farms had been taken over, we recommended the wholesale taking over of those farms. We did not necessarily propose breaking them all up. We were thinking of farms of from about 10,000 to 20,000 acres, which is small on the Falklands, and those that have already been established are working very well. The argument behind this is that until these farms are owned and occupied in the Falklands there will continue to be a drain of profits which will not be reinvested. Even during the period when wool prices were low in 1976 to 1980, £1 million went out of the islands and only half a million pounds was reinvested.

It is no substitute for the Falkland Islands Company to talk about selling off 200-acre plots, which I regard as a rip-off personally—except possibly for one or two when they are close to a road. I have no hesitation in saying that. I hope that the Government will support the views expressed to me by many' islanders that this sort of thing should not be encouraged.

The Government have set aside a generous sum of money. The new head of the Falkland Islands Development Corporation—and we were going to call it "corporation" in my report but we thought that that might frighten the Government, so we altered it to "agency" but they have altered it back to "corporation," and I congratulate them on that—Mr. Taylor, who has just the right background, comes from a good stable, Booker McConnell, and has been a district officer in Africa, will have a difficult task. I ask that he be given support by the people in the Falklands who, like all people, are apt to grumble at times. He has a lot to learn there, and he will be working under difficult conditions without much support.

I hope that his arrival will now speed up the transfer of ownership. I do not believe that the English understand land reform, although the Irish, the Scots and the Welsh do. I gather from her look that perhaps the noble Baroness understands about land reform. It is crucial in these islands, not merely to stop the drain in the future but to provide the opportunities for the young people. Those of us who have talked to many Falkland islanders know that a large number of them say that they would like to own their own farms. Some of them would not be able to do so. But I am sure that enough would be able to do so.

However, it will not be good enough to rely simply, as the Government are doing, on the market. You cannot carry out land reform on a purely market orientation. I beg the noble Baroness (who I know is concerned with this aspect) to consider this argument. This is not a political argument. I asked my team their political views, and I think I am right in saying that there were two Labour, one Liberal with a Scottish Nationalist leaning, and three Conservatives. We were unanimous that some real rapidity must take place in creating the new farms and allowing the people to own their own farms.

I have visited, as has the noble Lord, Lord Buxton, one farm where a house had been pulled seven miles over a 1,000 ft. mountain and re-established. The farmer and his wife were happily settling in. This capacity exists, and my major criticism at the moment is the need for rapidity. I do not now wish to go further into our recommendations, to some of which the noble Baroness referred, because they were all in the report. I want only to focus on certain particular areas. I want to focus on the airport, the fishing and the political position in relation to the Antarctic and the Argentine.

As to the airfield, I am glad that the noble Baroness referred to civilian use. It is a pity if it is called simply a strategic airfield and if this frightens the Argentines. I am grateful also that the noble Baroness has said that it is not going to be used as a nuclear base, any more than is the Antarctic. I think it is important to make clear that its long-term future for the development, not just of the Falklands but of that whole area of the Antarctic in years to come, can be crucial and particularly so in the fisheries field. I urge that the development of the Mount Pleasant Airfield—and Mount Pleasant seems to me to be the right place for it—and the building of the port will be the subject of a degree of planning and alignment with the future economic needs of the Falkland Islands. This is important, and I hope that the ecological survey that has been recommended will be adequate. It is crucial.

I would remind noble Lords—and I shall say something more on the geography of this area—that it is under 700 miles from our main bases in the Antarctic, a little bit further than from the Chilean base in South America but it could be of great importance. Indeed, South Georgia is further away from the Falklands than is the Antarctic peninsula from the Falklands.

I am also interested to read in the papers—and this refers to one not insignificant recommendation of ours—that there is a proposal that a hundred girls should go out to work on the airfield. The problem of the shortage of women is a real one in the islands. I will not repeat it. It is all in my report. Everybody may burst into laughter but it is a serious issue to maintain the right balance and to get the emigration. There are a number of people, including former Falkland islanders, who wish to go back to the Falklands if the opportunity is there. The Falkland Islands Government Office has about 600, and perhaps only 10 per cent. of them are capable of being farmers. But this again is reason for speed in the development of transfer of ownership and the building up of small farms. Again I stress that such a small farm would be a pretty large one in Britain but it is not an area of great fertility—five acres to a sheep rather than five sheep to an acre.

I should like to say something about the fisheries side because it is here that the new airfield will be of great importance in the future. If there is to be the fisheries development and if Britain is to share in it, then a proper airfield up to international standards is necessary. In our report we advised, on good advice, that an airfield 8,500 ft. long would be enough to accommodate wide-bodied jets, even flying from Ascension Island, although we still hope that the communications will in time be opened up with South America; and we do not exclude the Argentine from that. If that figure is not good enough, perhaps the noble Baroness would look at it again. When we recommended in our original report the lengthening of the Stanley runway we calculated, on good advice, that the cost would have been £7 million. Indeed, we were originally given £5 million as opposed to the £240 million that we are now talking about. Good investment at this time will repay in the future.

Let me turn to one other aspect of the recommendations, a difficult one for the Government; namely, the establishment of a 200-mile fishing limit. We did not recommend that strange animal, the 200-mile economic zone. We merely asked for a 200-mile fishing limit. I appreciate that this would come up to the median line where the Argentine is concerned. Of one thing I am certain. If the Argentines had been left in the Falklands, there would now be a 200-mile fishing limit round the Falklands and round South Georgia if they had got that.

It is imperative for two reasons. One is that there is the danger of over-fishing. I have seen calculations. There was a calculation by Mr. Barrett, managing director of Fishing News, a very reasonable individual, and indeed my own fishery adviser, Gordon Eddie, who is the FAO South Oceans Fisheries Adviser, that perhaps £50 million of fish has been taken in a year. I have some estimates on particular catches. The Japanese catch in a period of about 6 months has been estimated as £4 million of squid and hake. The Polish catch of blue whiting—and the Polish fleet has left for the moment—is £1.2 million. There are other figures. The possible revenue to the Falklands could be as much as £l million a year to swell their funds. I must stress that the Falkland Islands have never been granted-aided and have always paid their way. This is of value.

What is equally of value is to introduce some control in these areas. All along the need has been to approach these problems in terms not only of exploitation but of simultaneous conservation. Therefore, despite the difficulties, I would ask the Government to consider this because this could be an area—and I offer this alone as a sop to the noble Lord, Lord Gladwyn—of co-operation with the Argentine.

I should like to say something about the possibility of negotiating with the Argentine at the moment. I do not believe that it has been possible to open discussions on sovereignty hitherto; nor do I believe that any member of the Foreign Office who has been involved has believed that that would be possible. After all, we were attacked, the Falkland Islands were invaded. We recovered them and still the state of war has not been abolished. And we have had such nonsense from Argentine leaders—with Mr. Costa Mendes suggesting that once we started negotiations they would have withdrawn their forces. Is there any likelihood that the junta would have withdrawn their forces? I agree with the Peruvian proposal which could have been a solution and which the junta were unable to accept. But I think that the possibility of a meaningful negotiation at this stage is very slight and it would be very unfortunate to embark upon a negotiation on sovereignty which was not going to yield anything but which would raise hopes.

When Mr. Costa Mendes believed that the British went on because Mrs. Thatcher was influenced by those powerful lobbies, the British Antarctic Survey and the Falkland Islands Company, I can only say that, really, it is very difficult to take that seriously. What I may say about the British Antarctic Survey, who do a marvellous job in the Antarctic, is that their only interest is in preserving the Antarctic as a continent for science. I think that remarks of this sort have not helped. Nor have the opinions which have been collected by a very industrious Argentine academic, over here at the moment, from Argentine leaders, all of whom have said, "Yes, we will negotiate but at the end of the day sovereignty has got to be transferred".

I do not want to go over the old arguments of the international lawyers and of people of the quality of James Fawcett who properly argue that they are British. It is not a question, some people say, of giving the Falkland Islands back to the Argentine; it would be a question of giving it to those who have never had it in the past. I will produce arguments to this effect and no doubt other people will argue.

I look to the future of the Falklands as part of a regional area, and, if I may just bother your Lordships with a small lecture on geography, if I could show a bathometric map your Lordships would see that there is a chain leading out from the Argentine through the Falklands to South Georgia, down through the South Sandwich Islands on to the South Orkneys and on to the Antarctic peninsula. It is dangerous to use geographical concepts in political terms—some of your Lordships may remember that great geographer Mackinder, the danger of whose views, which led to geopolitik and to some extent to Nazism, makes me particularly careful. But we need to look at the geography, and it is also necessary to point out that the Argentine's claim that the islands are all part of the Argentine is unsound. It is really all part of South Africa because it was originally Gondwana Land. The Antarctic was originally tropical and there are marsupial fossils in the Antarctic. It is an area where war, trouble and conflict could break out, where there are overlapping claims between the British, the Chileans and the Argentines. We know that the Argentines have been breaking the Antarctic Treaty. They have been flying their pregnant women down there into the South Antarctic in order to have Antarctic Argentine babies. I have mentioned this argument before. They have made Marambio capital of the Argentine and have flown the entire Cabinet down there. We never had such luck and I am sure the noble Baroness never did.

We need to approach this in a scientific way and I think there is a possibility one day of a solution under the United Nations. I have not given up the hope of a United Nations solution; nor would I reject the idea of some form of titular acknowledgement of Argentine interest in the Falklands. But at the moment I do not believe it is meaningful to negotiate on sovereignty. It may be possible to negotiate our future interests, and sovereignty may come into it, but not on the basis that at the end of the day sovereignty is transferred. I beg noble Lords who think that there is some easy solution as soon as we start talking to the Argentine—and we are all very' pleased that there is a new and promising Government in the Argentine—to remember that there have been new, good and progressive Governments there in the past and we have to take a very long view.

The Antarctic exists at the moment for science but one day it will be exploited, probably not effectively in my lifetime. There are hydrocarbon deposits and there are minerals. It will be a long time before they are properly exploited. But many people are showing interest: and the development of an effective régime, which hopefully will be wiser than the Law of the Sea Conference, is one in which the Argentine, like all other countries, must play a part.

I should like to say one thing about the treaty. It does not come up for renegotiation but only for renewal, and I think there is every prospect of its renewal; but I wonder what would have happened had we not retaken the Falkland Islands. I do not think we should speak with an uncertain voice on this. It was, as the noble Lord said—and this led Sir Peter Scott, Sir Vivian Fuchs, and a number of others to write a letter to The Times—one of the major decisions. The Franks Report referred to it: it was the cancellation of HMS "Endurance", without the knowledge of the British Foreign Ministers, the noble Lord, Lord Carrington, and Mr. Ridley, which encouraged a certain view. Indeed, I was asked this by the Argentine Embassy: did this not mean—this wishful thinking—that we were going to withdraw? I say to the noble Lord, Lord Gladwyn, that it is ridiculous, after we have had this initial expenditure to which we are committed, of £200 to £300 million a year, which is the estimate of the Commons Defence Committee, out of a total defence budget of £16 billion, to say that the cost is seriously likely to damage NATO.

I hope in due course that the Government will start friendly talks with the Argentine but I think it is also necessary to realise—and I have said it to the Argentines—that the British are not going to be a pushover in this. We ought not just to give the Falklands away to the Argentine, ignoring the rights of self-determination, because all Argentines are brought up to believe that they belong to them. We have to be realistic and so has the Argentine. Above all, we must set it in that regional area in an understanding that this is an area where there can be good co-operation between nations and that this can contribute at least something to peaceful relations in that part of the world.

Lord Gladwyn

My Lords, before the noble Lord sits down, may I put this to him? I did not suggest that if there were negotiations we should agree that sovereignty would inevitably pass to the Argentine. I said that if there were negotiations we should not exclude discussion of the question of sovereignty, with the object of arriving at some compromise on that question.

Lord Shackleton

My Lords, I must say I had the greatest difficulty in trying to follow what the noble Lord had to say. I know that he paid titular allegiance to some of his leaders in the different parties, but the first part of the message started like that and ended up with a patriotic cry.

4.56 p.m.

Baroness Vickers

My Lords. I feel rather nervous about contributing to this debate when we have so many experts here with their great knowledge. I should like to thank the noble Lord, Lord Buxton, and in particular his family, for the work they have done over many, many years to put these islands on the map. I should also like to thank the noble Lord, Lord Shackleton, because he has done the same. I think that the Falklands might probably have been unknown if it had not been for their help.

I had the opportunity—and I should like to thank the Falkland islanders who invited me—of attending the 150th celebrations. That gave me the chance to think about the future. I arrived, and I met 45 "kelpers" at one golden wedding straight away. Therefore, I really got an insight through talking to them for over two hours into the different aspects of the different islands and their camp.

I should like to support the noble Lord, Lord Shackleton, in particular over what he said about fishing. I understand that the licences will be paid willingly. I understand also that Spain wants to have a shore base, because they have no factory ship. There might be other countries which would like to have a shore base, too; and that would also help employment.

After what my noble friend the Minister said regarding "the fortress", I hope that after this debate we will leave out those words "Fortress Falklands". It is the life of the islanders that is being disturbed. It is still their homeland; it is not a fortress. It is a homeland for the inhabitants there, including the new immigrants, of whom I understand there are now 29. I should like to suggest that the Falkland Islands should he declared a nuclear-free zone. I think that would help a great deal in relationships with South American countries. I should like also to see the new constitution, if my noble friend can tell me anything about this. I gather it has been sent by the Falkland islanders through Legco and I should like to know what the position is in regard to that.

I do not know whether any of your Lordships saw on Channel 4 TV last night "The Eleventh Hour", described as "Malvinas: a Story of Betrayals". It is the most extraordinary film I have seen for a long time. I do not know whether the noble Lord, Lord Shackleton, saw it, but he was dubbed in it, as were Mr. Tony Benn and the noble and gallant Lord, Lord Hill-Norton. This film was made by Argentines who were exiled in Mexico and it was really not a very pleasant film. It gave a very odd appraisal of the war and made a fierce denunciation of the way it was waged. The film lasted nearly an hour, and my thoughts about it after I had watched it are that if we had not had the war the Argentine would not have turned to democracy as soon as they have done. So the war has done two good things, anyhow, to—shall we say?—protect the islanders and to help Argentina to become democratic again.

The other matter that I should like to discuss is lease-back. I am very much against lease-hack. We know what has happened in Hong Kong, and of course that was under the treaty. But if we have lease-back, then in several years' time, or whenever the lease ends, we shall have that trouble all over again. I am told that the president-elect is reported as having condemned the military adventure. He said it was, "an illegitimate act by an illegal Government" but he added, regrettably, "in a just cause." It is a pity that he said those last four words, because his first words were very adequate and the last were not very happy ones.

I am glad to say that two honourable members of Legco have been visiting the United Nations, the Commonwealth Parliamentary Committees and the Commonwealth Parliamentary Association meeting in Nairobi. This is excellent because it gives people an understanding of their views, and it is very good for them to have the opportunity of mixing with other countries and entering into the life of the Commonwealth again where they can take a real stand.

With regard to housing, I gather that the Brewster scheme is going fairly well, but it is very expensive. We should have liked more houses to be built more quickly, because there is a great demand for them and they will not be able to get any more immigrants out there until they can provide more accommodation.

I am glad that my noble friend mentioned the deep sea water jetty. I understand, too, that the military have one which is being built in Belfast. I should like to know what arrangements are being made for this and whether, if the military have fewer troops there, it will he kept there or taken away as I have heard. With regard to communications, they must be much better organised if we are to keep immigrants in that country. The roads are really shocking and perhaps there could be smaller tracks. I know that this is a little difficult, because the peat is rather slippery, but in some countries I have seen tarmac tracks which are the width of the wheels and you just ride along those. They would be much better than the present roads. If we are to develop the farms and smallholdings, they will need some way of taking their produce to sell.

I understand that the Army will take 38 tons of mutton—there is no mention of beef—and it has to be cured under EEC conditions. It is strange that there is no butcher in the whole of the island and there never has been. People have been used to taking home a whole carcase and cutting it up themselves. As many of them now have fridges, it would be a very good idea and would help with the sale of either beef or mutton if they could have a butchery out there.

I visited the hospital there. It is a very nice one and is extremely well-run; but it will be too small if it is to be used by the military as well as by the civilian population. I understand that there is enough land around to extend it and that is how local people would like it to be done. I know that my questions are very small beer after the speeches we have heard, but may I also ask about Stanley Common? That was the only place in Stanley where people had a chance of exercising their horses, riding and playing. Unfortunately, it was very badly mined. I do not know whether there is any possibility of getting rid of those mines, but if it is impossible to clear them could another piece of land of about the same size be found, which could be allocated to the people of Stanley? They need somewhere to exercise their horses and to put their cattle, and so much of the land around will either be used for an industrial estate or for Portakabins. If some land could be reserved for them, they would be very grateful.

I have put down a number of Questions for Written Answer about the airport. I have received answers to three from the Ministry of Defence and I am hoping to get the other answers soon. But I should like to know whether the make-up of the total cost includes the wages of the people who work in the airport. There has been some disagreement with the local inhabitants about what they can earn. There are large sums of money being paid and I should like to know whether their salaries are to be tax free. I am delighted to know that there will be a satellite connection, because that will help to keep people on the island, particularly the military, in contact with the outside world.

Among other things, I have been studying the availability of fresh fruit. Apparently, it is practically impossible to get any fresh fruit on the island now, because it used to come from South America. There is a system for growing vegetables which I have been studying. It is very cheap and it could provide vegetables during the whole year. This has been produced by Stapley Contracts of Ashford in Kent, and they are willing to supply a manager to start it. A polythene greenhouse is used in which you can grow your tomatoes and other vegetables. They are grown mostly in water, and vegetables can be produced for the whole year.

I have one or two other small points, the first of which is sheltered housing. I discovered that some of the old people had to be left in the hospital, because they had nowhere else to go. There were not many when I was there—I think there were only three—but there have been one or two more since. I discussed the position with Abbeyfield, who are expert in providing this type of housing, and they would he willing to help set it up. I sent out the plans, but nothing has happened to date. I gather that Guernsey has offered £100,000 for sheltered housing, so this could perhaps go ahead in the near future. Finally, there is the question of the sports centre. I gather that Jersey has offered to contribute towards this centre. There is absolutely no occupation for islanders, or for the military, in their spare time. If we are to have further immigrants and new roads, then new places where they can spend their leisure time are urgently needed.

The noble Lord, Lord Shackleton, talked about the future. I have had a great many letters from people about their wishes and I should like to quote one of them: We need an executive officer who goes for an early morning walk and notes who is late at their jobs or rings up departments to see who is there on the dot of time. Now that they have so many personnel there, people apparently feel that they need this.

I am very glad to have been able to say those few words and to thank the people of the island who behaved so splendidly during the invasion, particularly the two clergymen who played their part in helping the population. I am glad to see that they have now been rewarded by Her Majesty the Queen. I should like to thank again the noble Lords, Lord Buxton and Lord Shackleton, for the splendid lead that they have given not only in this debate, but over the years. I am sure that they will keep their interest in the future, and I hope that the noble Lord. Lord Shackleton, will live long enough to see a lot of his wishes fulfilled.

5.9 p.m.

Lord Stewart of Fulham

My Lords, I listened with great interest to the remarks which the noble Baroness has just made, when she quoted the views of one of the islanders on these matters, because she is the first speaker in this debate to have quoted the views of an islander. For example, I noticed when the noble Baroness, Lady Young, was speaking to us that she referred very frequently to discussions with the Falkland Islands Government, or officials of it. We did not have at any time any account of what elected representatives of the Falkland islanders might be thinking about all this. Perhaps there is not at this stage anything very much to say, or she may have something to tell us at the end of the debate —

Baroness Young

My Lords, I am sorry to interrupt the noble Lord, Lord Stewart, but early on in my remarks I referred to the Falkland islanders who had visited me at the Foreign Office, and I indicated what they had said.

Lord Stewart of Fulham

My Lords. I apologise. I overlooked that fact. As a result of the form of Government established in the Falkland Islands in the future, I hope that we in this country will be able to be a little better informed about what the ordinary Falkland islander thinks about it all, because it is he who is in issue. The United Nations rule is that the interests of the inhabitants of any disputed territory are to be paramount. In my judgment, unless you have very good reason indeed to suppose the contrary you can reasonably equate the interests of the Falkland islanders with their wishes. I have no reason to believe that the Falkland islanders are not capable of knowing what are their own interests.

Like other speakers, I wish to express thanks to the noble Lord, Lord Buxton of Alsa, for opening the debate, but I must begin by disagreeing with him on a purely historical point. I am sorry that the noble Lord is no longer here. The noble Lord is wrong in assuming that there was a long train of events of ambiguity, as he put it, from 1967 until the outbreak of the war in 1982. I mention this particularly because when I took up responsibility, for the second time, at the Foreign Office in 1968 the first thing on my plate was the Falkland Islands. With the support of my colleagues in the Cabinet I made it quite clear, both in conversations with the Argentine and in statements in Parliament, that Britain had no intention whatsoever of parting with the sovereignty of the Falkland Islands unless—and this was a very unlikely "unless"—we had the agreement of the Falkland Islanders themselves to it. If after that the Argentinians were in any ambiguity about the matter, they were deceiving themselves. If later on they became ambiguous, or began to think that Britain was likely to give up the islands, they got that idea from some other Government and at some other time.

Lord Home of the Hirsel

My Lords, if, by referring to "some other Government and at some other time" the noble Lord is thinking of the Government which followed the Government of which the noble Lord was a member, that Government did exactly the same as his.

Lord Stewart of Fulham

My Lords, in that case we are left in doubt as to where the Argentines got the idea from that Britain might give up sovereignty.

Lord Shackleton

My Lords, I confirm what the noble Lord has said, because I was in the Cabinet with him; but, of course, there was the HMS "Endurance" episode.

Lord Stewart of Fulham

Yes, indeed, because there was a later Government than that referred to by the noble Lord, Lord Home of the Hirsel. Certainly the Argentines may have got the idea of a lack of will on Britain's part from what was done about HMS "Endurance".

We are now in the situation in which the Argentines are saying that they do not even regard the hostilities as over. I do not believe that anyone will dispute that we cannot enter into conversations while the Argentines maintain that point of view. If they are prepared to retreat from that position and to regard the hostilities as over, I hope that it will then be possible to enter again into conversations.

For my own part, my view of sovereignty is now very, close indeed to that of my noble friend Lord Shackleton: that any answer to it lies some distance in the future and is bound up with the Antarctic and other territories in the South Atlantic. With the renewal of the Antarctic Treaty it may be possible that Britain, Argentina and other Latin American countries will he able to reach a general agreement that will be to the benefit of the Falklands and lead to the development of the whole area, an agreement in which what is said about sovereignty may be something that none of us at this time can exactly predict. We ought not to shut the door to every possible answer in that direction.

But let us remember that what matters is the kind of life that the people of the Falkland Islands can lead. It was significant, though people may regard it as a small point, that the first two things the Argentine invaders did was to tell the islanders that in future they must drive on the right instead of on the left, and that their children must be instructed in Spanish in the schools. The second order was extremely serious. It meant there was no question of the islanders ever being allowed to have their own way of life. So long as we are quite certain that they will have their own way of life we might one day be able to argue something out about flags or sovereignty which makes sense and which might be the object of agreement. I would not put it higher than that. But as matters now stand, there can be no question of talking about any immediate change of sovereignty, even though the nature of the present Argentine Government is very different from General Galtieri's Government.

I was gratified, in a way, to see that they propose to put General Galtieri on trial; that is, if they can first catch the hare. But I was sorry to find that they are charging him, not with having begun the war but with having lost it. That does not. I am afraid, lead us to take too hopeful a view of their attitude. We must be firm but not provocative, and in the meantime we must ensure that the islands are worth living in. We shall he in a ridiculous position if we go on resolutely defending the independence of a territory in which life for the inhabitants is getting progressively harder, more difficult and, in the end, less possible. That is not an impossible development.

It is in the report of my noble friend Lord Shackleton that we can find the remedy against it. I agree very strongly indeed with what he said about land reform. This seems to me to he one of the major recommendations of his report. Whereas, in general, I thought the noble Baroness gave us a very encouraging report of the way the Government are handling development in the Falklands, this matter of land reform is disappointing—as also, to echo again my noble friend Lord Shackleton, is the fact that we have not had a definite statement about the fishing limit. I should very much like there to be much more rapid progress on land reform and the assertion of the 200-mile fishing limit. If we carry out the programme of development which is set out in Lord Shackleton's report—and I lay stress particularly on those two items—we shall be able to make the islands more attractive to their inhabitants and more capable of bearing the economic burden which we and they must bear together if they are to be adequately defended. It is going to an expensive business, though not (and here I do not agree with the noble Lord, Lord Gladwyn) an impossibly expensive business, to defend them. To enable us to defend them, we must ensure that it is as viable and as prosperous a community as possible. The way to do that has been set out for us in Lord Shackleton's report. It is our job to go ahead with it.

Lord Buxton of Alsa

My Lords, before my noble friend Lord Kimberley begins his speech, could I say that I apologise for being out of the Chamber for a couple of minutes when I believe the noble Lord, Lord Stewart of Fulham, and my noble friend Lord Home of the Hirsel explained their position when they were Foreign Secretary. Whatever they said. I absolutely accept it.

Lord Stewart of Fulham

I am much obliged, my Lords.

5.18 p.m.

The Earl of Kimberley

My Lords, I should like to echo in every way the words of the noble Lord, Lord Shackleton, about my noble friend Lord Buxton. Most of us know that the Falklands are extremely important to us in two ways—economically and strategically. That has been stated with great clarity this afternoon. I suppose it is possible that there are some noble Lords who disagree with one or both of those statements, but let me very briefly consider the economic side. A great deal has been said about fish. Food from fish must be very high on the list. Since the war, as the noble Lord, Lord Cledwyn of Penrhos, said, the fishing fleet has increased to between 100 and 120 vessels. They come from as far apart as Poland, Japan, West Germany, Italy and Spain. It is an area where I am certain that our own poverty stricken fishing fleet might think of going and improving itself. No doubt the sheep farming exercise could be considerably improved and increased—not only just for meat but perhaps also for wool, although I am not very knowledgeable on sheep farming matters. Then one could consider the rest of agriculture. There are trees which will grow in areas such as the Falklands with modern methods of aboriculture, and I am sure that is worth pursuing.

Last but not least, we have the penguins—and I am sure that they must be a very valuable asset in tourism. To go further afield, there is the geological and the mineral wealth of the whole of Antarctica which, if it is going to be exploited, needs to have a base. Where is that base to be? It is perfectly obvious where it should be.

Speaking strategically now, one noble Lord told us this afternoon that the islands proved a great boon to us in the first two wars, and that is so true. If by chance the Panama Canal was sabotaged, blown up or blocked by a Central American conflict or because of Cuba getting difficult, then the Falklands would be invaluable not only to us but also to the West and in particular to our American allies—who should, in my opinion, be a little more robust to our own way of thinking today over the Falklands.

That leads me to the importance of the new airport at Mount Pleasant. It has to he essential and it has to be beneficial. I am sure that the islands can become economically valuable assets when the airport is completed, as it will provide access, communication, tourism, trade and safety for the islands. The Falklands are valuable and worthy of the protection which the airport will help to provide.

I have emphasised the need for military protection as since the cessation of hostilities, as we know, Argentina has not yet renounced the use of force. She has not only made bellicose statements but has also re-stated her claim to the sovereignty of the islands. After hearing evidence on the future defence of the Falklands, in the 1982–83 Session the Defence Committee in another place indicated that there was, no mutually acceptable basis to be found for serious negotiations between Her Majesty's Government and the Argentinian Government about the status of the Falkland Islands for some time to come". That conclusion was reached on the basis of evidence provided by two experts in the field of political science. When queried as to the likelihood of negotiations with the civilian Government, if one were to come into being (which has now happened), an Argentinian academic expert expressed the opinion that while a formal end to the fighting was possible, that could only come to pass if meaningful negotiations were to occur and not the "footdragging" as between 1965 and 1982. However, that opinion was countered by Dr. Calvert, who is an expert from the University of Southampton, who made the following telling statement: It is widely believed and asserted in this country that a civilian Government is likely to be easier to deal with than the military Government. It is an incorrect assumption and we should be careful not to take that on board. Many of the problems of the past have been provocations which have occurred during the period of civilian Government. We can expect that any future civilian Government foreseeably in power in Argentina will he under considerable and close scrutiny from the forces, who will endeavour to retain their traditional control over it and will intervene to stall any development of which they disapprove.". Following the cessation of hostilities, what did the Argentinians do? They started refurbishing and replacing equipment damaged or lost during the conflict. Argentina also started moving military equipment from the North to the South of the country. So what is the true military threat from Argentina?

When this matter was discussed in the Defence Committee in another place, it was concluded that presently Argentina could only harass Her Majesty's forces. However, I must remind your Lordships of Argentina's political ambitions and aspirations which have been mentioned so often this afternoon. It is true that while the transfer to civilian rule has occurred, the present Government, in my opinion, have not been in place long enough for us accurately to gauge their intentions, capabilities or the pressures they may either bring or be able to withstand.

Clearly we must maintain a garrison large enough to ensure the protection of the Falklands from possible renewed Argentinian aggression. Let us not forget the lessons of the past, nor let them fade too quickly from our minds. Let not the lesson of HMS "Endurance" be blocked out of our memories. When HMS "Endurance" was withdrawn after 27 years' service in the area, we sent the wrong signal to Argentina. The noble Lord, Lord Shackleton, warned us of imminent danger. But in the end, when the weighty decisions of defence budgeting were upon us, we removed HMS "Endurance" from service. Ostensibly we saved £4 million, but in reality the cost in lives and in fighting the war far exceeded those savings.

It is vital that we do not send out the wrong signals again, nor forget the lessons of the past, which must remain fresh in our minds. We must maintain the garrison; and the new airport is vital to the maintenance of that garrison. The temporary runway at Stanley, although it has been extended, will not last for ever—perhaps for only another three years, or possibly five years at best.

But this is not, as some noble Lords might argue with me, the final act which illustrates the Government's intentions to maintain a large permanent garrison on the island with no intention of negotiating or showing a willingness to negotiate with Argentina a formal end to hostilities. But if we do not maintain the garrison, it will appear to the Argentinians that once again we are not ready to protect the Falklands in the future and to stand by our dependancies. If the Argentinians believe we have no long-term plans to deter aggression, they will see no need to negotiate with us but will wait, building up their forces until they feel that we are vulnerable and no longer interested in the islands.

Negotiations with Argentina are in the interests of the United Kingdom as the air services could then be routed through Argentina and the hydrocarbon and geological searches in the area could be much more easily carried out. Also, perhaps the fishing limits could be renegotiated. Additionally, our interests in the military sphere would be served, as we could substantially reduce our garrison. But as the evidence of the Defence Committee in another place clearly demonstrates, all that is far into the future. Nonetheless, negotiations are less likely to come about if the airport is not constructed. We must not allow out actions to he misconstrued so as to appear as though the Falklands garrison will be used as a base for outright intervention in Latin American affairs.

The defence of the garrison and its ability to act as a deterrent are based on three major areas: early warning, the ability to keep the garrison constantly supplied quickly and efficiently, and the ability to reinforce it quickly. The essence of the garrison's deterrent is its air power. However, an examination of the islands themselves, aside from their military value, reveals that they have a potential to be thriving assets. I go back to what was said by my noble friend Lord Shackleton as early as 1976 when he asked for a new airfield and noted that without one, any substantial new development would be greatly handicapped. However, that suggestion was not implemented after the 1976 report was issued. In the 1982 report, he urged us to consider the critical conditions of the Falklands economy, noting that the resource development potential of the Falklands would not come to fruition immediately but rather would pay off over a longer period of time. If this potential is ever to be explored it is essential that the funds be spent and the plans be implemented now.

Air transportation is the new lifeblood of the islands and the Government have wisely recognised this fact. While the possibility of extending the airport at Stanley itself was taken into consideration, as perhaps the implications of construction would have had a lower diplomatic profile, the benefits of building the new airport at Mount Pleasant were substantial because they were less expensive due to topographical and geographical reasons. Thus, the runway could be constructed more quickly, resulting in lower manpower costs, and additionally it could be extended more easily at a later date, which, as Lord Shackleton said, would enable civilian wide-bodied jets to take off fully laden.

The cost of peace is always seemingly expensive, but it is in the long run much less expensive than the cost of aggression, not only in monetary terms but in terms of lives. The cost of the airport in June 1983, as quoted by the Secretary of State for Defence, was £190 million, including sub-contracting and shipping, with additional costs for the Stanley to Mount Pleasant Road and a separate contract for the installation of Government furnished communication and navigational aids, resulting in a final estimate of £215 million. As this cost is already included in the defence budget under "Additional provisions for the Falklands", it will not require any type of additional public expenditure and will not necessitate off-setting reductions in defence expenditure elsewhere, which is what the noble Lord, Lord Gladwyn, seemed to think.

Thus, the airport will represent substantial savings in manpower and equipment costs, in that the garrison will be able to be reinforced quickly so that only a permanent smaller force will be necessary; at present the garrison is only 75 per cent. cost-effective as in a four-month tour of duty one month is wasted in transport.

To conclude, the Falkland Islands are valuable assets, economically and strategically, in both the short and the long term, but they cannot be this unless we inject some capital into them. If the Falklands war has made us realise what an asset these islands and their surroundings are, not only to us but to the whole of the free world, our efforts will not have been wasted, and will, hopefully, prove in the years to come to be a gilt-edged investment. Lastly, let us always remember that the Falkland Islands are British.

5.34 p.m.

Lord Kennet

My Lords, we have, Britain has, achieved a double victory over Argentina. Our first victory was the victory in war, and our second victory has been an indirect political one. It is shown in the fact that Argentina has returned to democratic government. Can anybody imagine that, if Galtieri had been left undisturbed in possession of the Falkland Islands, democracy would have come about in Argentina? I think not. That is clearly at least in part due to the resolve of this country. We are therefore in a position to welcome in the most whole-hearted manner Argentina's umpteenth shot at political freedom. We shall be able, when the time comes, to talk to them as equals, and we shall no longer have to conceal the contempt and abhorrence which we felt when we had had to talk to them in recent years.

Therefore, what it is right for us to give, let us give. But let us first look at what it is right that we should give. Although the air is full of hope for a new Argentina, Lord Shackleton was right to remind the House that it was by no means the first time we had welcomed the birth of a new democratic Argentina in the last century and a half. There are clouds on the horizon still; there is above all the Argentine nuclear programme. It is painful to dwell on it, hut it must be dwelt on because messages have come from Dr. Alfonsin that there is to be no change.

Let us look where that stands. Argentina is among those few countries which could make nuclear weapons and have not signed the non-proliferation treaty. Dr. Alfonsin has sent the message that he will not sign it. Argentina is a Latin American country and is one of the few which have not signed the treaty of Tlatelolgo declaring South America to be a nuclear weapons-free zone. They have, in fact, recently disclosed the existence of a uranium enrichment plant in Patagonia. This completes the nuclear fuel and weapons cycle, the nuclear fuel cycle certainly and the nuclear weapons cycle potential. They have uranium mines; they can dig their own; they can refine uranium from those mines and they can reprocess spent uranium into plutonium. Moreover, the United States last year decided that they would sell to Argentina a computer for use on a heavy water plant which forms an essential part of that cycle, and this summer, only two or three months ago, a year after the war, the United States have decided to sell them also 143 tonnes of the heavy water itself.

Argentina has a ten-year nuclear co-operation agreement with—wait for it, my Lords—Libya. And when the new director of the International Atomic Energy Agency, the Vienna Agency, which is charged with doing what can be done on behalf of mankind to prevent more countries obtaining nuclear weapons, Dr. Hans Mix, visited Buenos Aires recently, he failed to get the assurances he sought that Argentina would sign the relevant treaties which I have just mentioned.

For all that, we must, of course, devote greater energy, than we have to removing the paranoid delusion from the Argentine mind that we want a British or NATO nuclear weapons base on the Falklands. We have to think of some means of persuading them of this truth, which is so obvious to us but apparently remains so difficult for them to grasp. I think the way to do it, and indeed the way forward in all our contacts with Argentina, is to get out of the tunnel. Both countries at the moment, Britain perhaps even more than Argentina, are suffering from a bad case of tunnel vision. We apply our eyeball to the tunnel and what do we see at the other end?—an Argentinian eyeball. Eyeball to eyeball relations, antler to antler relations, between two countries which have just finished a small but horrible war cannot be expected to yield good results. We have to go wider.

At present even in the United Nations we get merely a magnified play back of the antler stuff; we get our own Sir John Thompson speaking with admirable forthrightness and courage and saying that the resolution which was passed the other day, last month's resolution in the United Nations, showed an unacceptable contempt for the wishes of the people concerned, meaning the islanders. So it did. But if we could engage more of the nations of the world in the task of finding a solution, I think it could not hinder us but could only help us.

That resolution displayed an extraordinary ignorance of the realities so obvious to all of us. The noble Baroness gave the figures in her opening speech: 87 countries voted for the resolution, which declared that Britain should sit down and discuss the question of sovereignty with Argentina; 54 abstained, and nine voted against, including, of course, us. It is remarkable that among the abstentions was the entire European Community, and that among those who voted in favour of the Argentine resolution was the United States.

I come now to the solution. The Prime Minister has been quoted as saying: I am not entering into talks about sovereignty". I want in a moment to go further into those three words "talks about sovereignty", because they cover a multiplicity of possible meanings. Let us start with lease-back, which was so ably revived by my noble ally Lord Gladwyn. We have these messages carried to the British public and, for all I know, to the British Government by Guillermo Makin on behalf of Dr. Alfonsin and those who are to be his Ministers. They say that Argentina would consider paying reparations, not only to the families of the Falkland islanders who died and not only to the families of British soldiers who died, but possibly also to Britain as such: they can be read that way. Dr. Alfonsin speaks of the maintenance of British civil law and the common law system for 100 years, and he speaks of a lease-back period of up to 17 years. How forward-looking and how generous it all sounds. But the drawback about leaseback is that the way one begins a lease-back period, whether of 17, 15 or 12 years, is by ceding sovereignty. It is only when one has ceded sovereignty that the other side has something to lease hack. That is the drawback to that possible solution.

There is a second solution now in the air. Once again, my noble ally mentioned the so-called Peruvian solution, which is also that advanced by the Peruvian Secretary-General of the United Nations just before the war, and even during it. This was for a group of countries in some way to take over the administration of the islands for a while and let things cool down between Britain and Argentina. It might be that we should consider variations of the group. I think there is much to be said for a group consisting of Canada as the North American state which has in fact done most to help the development of the Falkland Islands and so many other Atlantic and Caribbean islands; of Peru itself as a close friend of Argentina, of Germany perhaps as a close friend of ours and. of course, of Argentina and ourselves.

A third solution would be one arranged by the Organisation of American States. Why not? If we say that the OAS should take over, it does not necessarily mean that all of them—the 20 or 30 countries—should take over, but just a selection of them; those that are most likely to be useful. Obviously it would include Peru as a trusted friend of Argentina, historically; obviously Canada because of its connections, and a number of other neutrals. It should not escape our attention that there are many Commonwealth countries in the Americas, besides Canada, whose presence could be extremely helpful in such an operation.

A fourth solution, which is favoured by the SDP—it is, in a way, our hallmark—is United Nations trusteeship. It overlaps with the "Peruvian Solution". In a rare moment of lucidity mankind foresaw occasions when the sovereignty of certain places would he intensely disputed, and would give rise to wars. It foresaw occasions when the state concerned would be quite small and where it could he put up to international administration by and through the United Nations. That was in 1944. It has been done quite a number of times, most having turned out badly, but not all. One is still happening: the United States has an obscure trusteeship among the Pacific Islands. United Nations trusteeship is not a discredited form of life.

The Charter has these rather precise provisions. It says trusteeship is there to further international peace and security. What could be more appropriate for what we are thinking about? It is there to promote the political, economic, social and educational advancement of the inhabitants and development towards self-government or independence as may be appropriate in the particular circumstances of each territory and its peoples, and to the freely expressed wishes of the peoples concerned. What could be more appropriate to the Falklands? It is there to encourage respect for human rights. What could be more appropriate? It is there to ensure equal treatment in all social, economic and commercial matters for all members of the United Nations and their nationals. Those very phrases totally preclude the favoured Argentine idea of simply passing the place from being a British colony peopled with British people to becoming an Argentinian colony peopled with British people. The idea of United Nations trusteeship would prevent that as long as it lasted. It would be a multilateral solution which would, for a few years, freeze the sovereignty question and at the same time make it safe to demilitarise the islands.

What do I mean by "freeze" the sovereignty question? The freezing of claims to sovereignty does not mean that anyone is renouncing their claim. It does not mean that anyone continues to insist in an active way on their claim, It does not mean that anyone acknowledges the validity of anyone else's claim. It simply acknowledges the existence of conflicting claims. We are not in any position to deny the existence of an Argentine claim. It acknowledges the existence of the claim and says nothing about the validity: and there is an agreement among the parties that nothing will be said about the claim in any direction for the duration of the trusteeship arrangement.

It might he a good idea, although I am not sure, on the belt and braces principle, to see whether the Antarctic treaty could not be modified in some way to provide additional help in a temporary multilateral solution for the Falkland Islands. It has a good deal going for it; not only the good things that the noble Lord. Lord Shackleton, outlined; not only the matters outlined in the rather neutral account of it given by the noble Lord, Lord Cledwyn of Penrhos—who did not say whether he thought we should make use of it, but merely said it was there. We should make use of it if only because throughout the Falklands war the Council or Commission (whatever it is called) of that treaty had been meeting regularly, and Argentina and Britain have been co-operating readily in the meetings of that Council, even during the fighting in the islands. That is an unbroken link between the two countries and should be built upon if it can he. Its applicability to South Georgia is more obvious than its applicability to the Falkland Islands—the latter being inhabited and the former not. Now is the time for the Government to begin to open out relations with Argentina.

Lord Shackleton

My Lords, may I interrupt the noble Lord. I am sorry I missed the first part of his speech. I followed with great interest his points on the Antarctic treaty which, as he knows, I also had mooted earlier. I am somewhat doubtful now whether the machinery of the Antarctic treaty might not be damaged by this, although I think it is a subject worth bearing in mind and I know it is putting forward options. I think one would find the Antarctic treaty powers and those concerned to keep the Antarctic out of politics rather hostile to the idea. I think one should approach the idea with caution.

Lord Kennet

My Lords, I know the argument that the Antarctic treaty is working very well, that it is taking considerable political strain with perhaps surprising efficacy, and that it would be rash to increase the political strain on it. It is a risk that would have to be balanced against the desirability of taking that risk if one thinks that the safety of that safety net is something that would accept the strain of further duties. I do not profess to know the answer, but the Government should look at it. It would only be in a very secondary capacity to United Nations trusteeship. That is the important thing to look at.

If any of these options were chosen, it would require a period of intense diplomatic activity to get the rest of the world thinking along these lines. As far as I know, Britain has not been doing any of that. We have been standing fast and staring down the periscope at the other eyeball. I believe we should begin now. Now is the moment because of the new hope in Argentina, and because time is passing and something has to happen soon. If we do not prepare the world for what we want, we may get something that we do not want from the world.

5.50 p.m.

Lord Mottistone

My Lords, as have other noble Lords, I should like to thank my noble friend Lord Buxton of Alsa very much for introducing this important subject at this particular time. It has been a great help to us all. It is not always a pleasure to follow the noble Lord, Lord Kennet, but on this occasion I find that it is. A lot of what he had to say was thoughtful and helpful. The only point on which I take issue with him is that I do not agree that this is the moment to start talks. It is probably the moment to start thinking about talks, but not actually to start them. I believe the most important lesson from the Falklands operation was that it is unacceptable in modern terms to take territories without any regard to the wishes of the inhabitants. Even the Russians, on going into Afghanistan, took the trouble to put up a puppet Government and instruct them to ask them to come in. The Argentines did not even do that. It is unacceptable.

It is equally important that it should be made clear to all other countries, and not just the Argentines, that there can be no question of immediately letting bygones be bygones. Like other noble Lords, I welcome the new democratic Government in Argentina, although I agree with the noble Lord, Lord Kennet, that they probably would not have come into power without the Falklands operation and the defeat of the Argentine forces. But whatever sort of Government they have, there must be clear evidence for the rest of the world to see that the Argentines understand and admit that they committed a crime in terms of world behaviour. Just punishing Galtieri and his colleagues for having guessed wrongly and lost the war will not in itself be evidence of such an admission.

As my noble friend Lord Buxton of Alsa said in his conclusion, there must be no further ambiguity in our attitude as seen by the rest of the world. Indeed, my noble friend Lord Kimberley said much the same. One necessary way to show that there is no ambiguity is to make it clear that, as well as ensuring that our armed forces can provide the necessary share for NATO, we also ensure that those forces are of sufficient shape and size to deter attacks on any territories for which we have continued to accept responsibility, such as St. Helena and the other Atlantic islands referred to by my noble friend Lord Buxton of Alsa.

In that respect, I was very glad recently to see that this principle was recognised by my honourable friend Mr. John Stanley, the Minister of State for the Armed Forces, in a debate in another place on 28th November. He mentioned the specific need for continued responsibility for dependent territories. He quoted 12 as being those which we should consider. I do not press the point at this stage as I am not quite sure whether he has a clear idea of the necessary forces to do that; but that is another matter. The important thing is that the Government have publicly recognised the need for this deterrent effect to prevent something similar happening again.

On the same theme of showing no ambiguity in our attitude, I believe that it would be irresponsible for us, for some time to come, to start any discussions with Argentina of the sort which could be interpreted by that country, or by the rest of the world, as condoning its behaviour in 1982. I do not know for how long that should be; it will depend greatly on the understanding of the world and of Argentina of how gross an error and how wicked a crime Argentina committed. At the present rate of going, and from what one has heard from other noble Lords, it looks like the end of the century rather than sooner. I hope very much it will not be that long. In the meantime, I believe that we should take advantage of the situation to push on with all speed to implement the recommendations of the noble Lord, Lord Shackleton—initially with those that can effectively be implemented by us alone. It was splendid to hear my noble friend the Minister make a series of statements to show that the Government were doing just that. I hope that they will continue to do so.

To take a couple of points, I would particularly suggest that encouragement be given to the British long-range fishermen, now deprived of Icelandic and similar waters, to use their expertise and energies around the Falklands and the other British South Atlantic territories. Two or more years ago, before this nasty event took place, I talked to representatives of the fishing industry. I was extremely disappointed to find that their attitude was negative—"It is too far away", "We do not have the money". It sounded so unlike the fishermen I remember dealing with 20 or 30 years ago. Their response was very disappointing. Perhaps a push or two in the extra encouragement that the Government are giving might get their expertise down there.

The other area to be encouraged must be oil and minerals. The more that we can find out by exploration at this stage the better. On a third point, I must confess that, although I speak from these Benches, I agree with the noble Lords, Lord Cledwyn of Penrhos and Lord Shackleton, about encouraging owner-occupation of the farms. From all that one has read in history about how things have developed, not just in England but in all this country, I believe that this needs to be encouraged. After all, absentee landlordism was in some respects the cause of the troubles in Ireland, and it even contributed to the American revolution.

Going on from these commercial beginnings, as I see it, not immediately but certainly long before the main discussions that I have warned against we could begin commercial discussions with Argentina—as indeed my noble friend Lord Buxton of Alsa suggested—and, I would suggest, with the other South American countries, like Uruguay. We need to reestablish with all of them trading relations similar to those of 50 years ago. I have a feeling that for all sorts of reasons we never really rebuilt our relationship after the Second World War. We need to work back as swiftly as we may to the relationships that we had in the 1930s.

To conclude, I believe that the major lesson of the Falklands operations of 1982 is that Argentina committed a nigh unpardonable international sin. This will not be seen as such by the Argentines or by other potential land-grabbers unless they have to suffer a clear penalty of no sovereignty discussions for many years to come.

Lord Lloyd

My Lords, before the noble Lord sits down, while I do not disagree with most of what he has said, may I ask him how he would propose to finance the operation to the end of the century?

Lord Mottistone

My Lords, I do not know whether that will in fact be the problem. What I said was that, at the present rate of going, it looks like being the end of the century. I very much hope that it will be a considerably shorter period of time; and that I stand by.

6 p.m.

Lord Annan

My Lords, a large number of cogent and sapient points have been made, which no doubt make a very great deal of sense here in London tonight. That is perfectly understandable, if from our own standpoint we look at the whole business of the Falkland Islands, bearing in mind of course the losses that we suffered when we were brutally attacked in a war to regain territory. Nevertheless, I should like to try to put the matter in another perspective; namely, the perspective of our foreign policy since 1945. Since that time we have been divesting ourselves of what was called the British Empire, and the British have done that with a very great deal of skill—much more so than have other countries with empires. Of course, every so often our rulers were overtaken by dreams of the good old days, and they began making commitments east of Suez, or in Africa, which Britain no longer had the resources to carry out.

This question of resources is really crucial. The reason why time and again there are clashes between the Treasury and the Ministry of Defence is that we have barely sufficient resources to fulfil our obligations to NATO, on which our defence and procurement policy is based. We shall have even less resources if we go on trying to garrison the Falklands and maintain a task force which can go off at a moment's notice trouble-shooting in any part of the world. Foreign policy is determined by power, and we no longer have the power to do that.

Foreign policy is determined also by the defence of our vital interests. Where do our vital interests lie? They lie in Europe, of course, and in the North Atlantic. But they do not lie in the South Atlantic, still less in Antarctica. The Falklands are not the channel ports. We live by trade, and of course naturally we hope that all trade routes will be free from danger. But by no stretch of the imagination are the trade routes round Cape Horn vital to our survival. We are not living in pre-1914 days; nor can we go it alone in Antarctica, as Captain Scott so bravely did years ago.

If I may, I should like to break a lance with the noble Lord, Lord Buxton of Alsa, to whom we are so indebted for opening out the subject. He said that we would be going back from Antarctica, unlike every other nation which would be going into Antarctica at the present time, were we to surrender any jot or tittle of what at the moment we own in relation to the Falkland Islands. I ask myself in what way are we different from other countries which have bases there? It would not be going back from Antarctica. We have our bases there, and no doubt we would continue to support those bases and to reinforce them.

I also found myself in some disagreement with the noble Lord on the question of ambiguity over our foreign policy. This is a difficult matter. What happens if one says to a partner in a negotiation that, yes, we are prepared to talk and negotiate, and we think that as a start we might in this case adopt on our side the basis of saying that we can discuss the transfer, or the modification, of sovereignty, provided that the interests of the Falkland islanders are always met? If one says that that produces an ambiguous situation, and one then thereby condemns those who try to negotiate such a policy for showing weakness, thus inviting the Argentinians to attack—if one pursues the argument in that way, one finds oneself arguing in an extreme Left-wing fashion, as has been done by the historian Mr. A. J. P. Taylor regarding the origins of the Second World War. In that regard he strongly maintains that the ambiguity of the British Government in the 1930s towards Hitler and Nazi Germany so encouraged Hitler that it was the British who were responsible for the Second World War, and not that evil adventurer. To say that simply to negotiate and to be willing to be flexibile in negotiation must be a sign of weakness, which would thus invite an aggressor to declare war, does not seem to me to be a really cogent argument.

I hold no particular brief for the Foreign Office. Like any other department of state, it can be wrong. But on the whole the record of diplomats in guiding foreign affairs is much more impressive than that of Prime Ministers running them. My generation remembers with bitterness Chamberlain and Halifax overruling the Foreign Office's professional judgment of Hitler. I think that the noble Lord, Lord Carrington, was right in 1980 in supporting the initiative taken by Mr. Ridley in attempting to secure a settlement with Argentina; and let us not forget, too, the initiative taken by the noble Lord, Lord Stewart, when he was Foreign Secretary. The Ridley initiative was scuppered by the Falklands lobby, by, if I may say so, those in the Conservative Party who attack anyone, be he Lord Mountbatten in India, lain Macleod in Africa, or the noble Lord, Lord Carrington, himself in Rhodesia for, as I would put it, facing the realities of power and our national capabilities.

The initiative was also scuppered by those in the Labour Party who stood on a particular principle, which they hold very dear: that never at any time should this country treat with military dictators. But as I said in a debate quite recently, principles are things to which in foreign policy it is unwise to pay undue attention. What matters are the realities of power and the vital interests of one's country. What in effect —

Lord Kennet

My Lords, I wonder whether I may intervene. I am following with great interest the series of footnotes which the noble Lord is advancing about who scuppered the Ridley lease-back initiative. But, in point of fact, the reality of power was such that it was the House of Commons which scuppered it. Is that not the case?

Lord Annan

My Lords, I entirely agree with the noble Lord, Lord Kennet. Of course, it was in another place where that debate took place. All I was drawing attention to was my belief that in that House there was widespread support from Back-Benchers, including a Member of that House who is now a member of the Social Democratic Party, as well as of course Mr. Shore of the Labour Party, and many Conservative Back-Benchers, who attacked the settlement that was proposed, as I understand it, with the authority of the Foreign Secretary.

However, it seems to me that what the Foreign Office was then in effect saying was, "We cannot guarantee the security of the Falklands, and so we should come to an agreement with Argentina, provided that it is an honourable agreement, which safeguards the vital interests of the islanders". When those in another place refused to take that line, there was nothing left to negotiate about; and we all know what was the result.

It has tonight been said that there is now a democratically elected Government in Argentina, and that this is the time to start negotiating again. We must all be glad that that is the case, but no one should suppose that in that volatile country with, incidentally, a ruined economy, the Government will necessarily always remain to our liking. We must be honest with ourselves. Anyone who talks about negotiations has to realise that the Government can easily change and not change in the way that we would prefer. But, as the noble Lord, Lord Gladwyn, said, there is no surer way of getting a change unfavourable to ourselves than to appear totally intransigent in terms of negotiation.

Here again, I should like to try to put this in a wider setting and not so much in the setting of London. We should think about what our allies consider on this matter. There is little doubt what the Americans feel about it. To them, the Falklands are a major irritation in their relations with South America as a whole. We must bear in mind, too, not merely their vote in the United Nations but also the fact that when they took action which, in my view, was entirely justifiable in Grenada, they did not get the response that we got from them over the Falkland Islands where they supported us absolutely without stint.

We should remember what our European allies feel. Of course, they supported us on the issue of aggression. But they regard our obsession with the issue of the Falklands as another non-European, mad, British frolic. We should not hide this from ourselves. Our colleagues in the European Community naturally do not speak out in very' strong terms about this. But to them, it is still an example of our non-commitment totally to Europe

Lord Buxton

My Lords, may I remind the noble Lord that France, Norway, America and, I think, other European countries all have islands down at the bottom near the Antarctic?

Lord Annan

My Lords, I accept this absolutely, but they treat the particular issue with which we are now concerned in a very different way. I know that the noble Lord will correct me, from his much greater knowledge, ill am wrong, hut, so far as I know, no one has laid claim to the sovereignty of the islands of those countries he has mentioned.

I was sad to hear the noble Baroness, Lady Young, say at Question Time that the interests of the islanders were paramount and that this was absolutely the last word on the matter when the question of sovereignty was being discussed. Of course, the islanders must always be in the forefront of our minds. It was said immediately after the war that they, too, must learn to live with a new situation. What I wish to urge is that it is not only the interests of the Falkland islanders that are at stake. The interests of all British subjects who live in these islands and in other islands are also at stake. If you really assess the place where we need to invest millions of pounds, is it really in the Falklands? It is inevitable that we shall have to make some investment there; but I sometimes ask myself, when I hear the sums mentioned, whether these sums, had they been spent in the Highlands and the Western Islands of our own archipelago, would not have been better spent?

I conclude with an apologia for taking this line. It is clearly not popular in the House tonight. I do so because if we will only think of this issue in the larger context of the way foreign policy has been going over the past 40 years in this country and also in the context of the resources that we have available—the Foreign Office has always understood that with limited resources you must limit your commitments—I believe that, in the years ahead of us, when surely some dialogue will begin with Argentina, we will be better off.

6.15 p.m.

Viscount Montgomery of Alamein

My Lords, I am glad to be able to follow the noble Lord. Lord Annan, because I find myself in such a large measure of agreement with what he said. I wish, however, to follow a slightly different line. My thanks, like those of others, are due to the noble Lord, Lord Buxton, who presented such a comprehensive survey. I welcomed his cautious optimism but thought that he might have been unduly harsh on Argentina. I should like to concentrate my few remarks on that aspect. In this context, I want to pick up something that the noble Lord, Lord Kennet, said, and take a look from the other end of the tunnel.

The situation in Argentina has changed very radically. That is not intended purely to be a pun. Next weekend, a new wholly legitimate democratic Government will take office, the first in 40 years. The ghost of Peron has been laid to rest, hopefully on a permanent basis. But this is a new experience for at least one, if not two, generations of Argentines. That country therefore needs assistance and support, especially from friends, which should include the United Kingdom in view of our long historic association.

It may well be difficult for us to make the first move in talking to Argentina again. It may he that Her Majesty's Government feel inhibited about this in view of what has taken place in the past two years. I believe therefore, like some other noble Lords, that we should use the United Nations for this purpose. At the General Assembly in 1982, the Secretary-General was required to make a report which he did briefly at this General Assembly. The last paragraph is very significant in that it says: While it is clear that negotiations cannot begin unless both parties agree, it is my belief that a resumption of dialogue, coupled with the adoption of confidence building measures, can contribute to a normalisation of the situation in the South Atlantic and open the way towards a lasting solution of the problem. For my part, I stand ready to assist both parties in this process". The Secretary-General called for dialogue, not negotiations. I think, like some others, that it is too early to talk about sovereignty: and, anyway, Argentina also considers that sovereignty is not negotiable—for completely different reasons, obviously, to those of the United Kingdom. But we cannot consider the development of the Falkland Islands in a vacuum. Any attempt to do so, as several noble Lords have suggested, will be fruitless. The Argentine claim to ultimate sovereignty has not gone away and will not go away. The claim of course is really about the Falkland Islands and not about the dependencies which, as the noble Lord, Lord Buxton, pointed out, is a totally separate issue.

In this context, I agree with the noble Lord, Lord Buxton, that military aggression will not be repeated, and that the claim will be pursued peacefully. But it will be—and, indeed, is—widely supported by all Latin American nations. If the claim is to be pursued peacefully, one wonders whether a declaration of cessation of hostilities may be irrelevant, because there have been many conflicts in various parts of the world since the end of World War II, but few of those have had formal beginnings or endings. Indeed, a state of war was never declared as regards the conflict that began in April 1982. That is something which we must remember in the pursuit of the dialogue.

Whatever the policy of "Fortress Falklands" may be called, I believe that it must be considered somewhat sterile and certainly expensive. But above all—and this is important—it is perceived by Argentina as a threat, however absurd that may seem to us.

In my view, "dialogue" means an exchange of diplomatic relations in the first instance. I welcome the suggestions which the noble Baroness made about bilateral relations to eliminate trade and other harriers. That is obviously essential so that we can communicate on subjects of mutual interest. Negotiations may follow at a later date. Several noble Lords, including the noble Lord, Lord Gladwyn, and the noble Lord, Lord Kennet, have suggested various alternatives, but all that is in the future. Surely we must proceed by limited objectives. If we do not seek a re-opening of the dialogue, diplomatic and political pressure will mount and we shall be at some disadvantage in international fora. Small changes in the voting pattern of the United Nations really cannot be considered as progress and certainly not as victories.

The arrival of a new government in Argentina provides an opportunity for positive action. Either directly or via the United Nations we should open direct diplomatic relations since representation by third countries, however well disposed, is obviously most unsatisfactory. The people of Argentina are in a mood of hope and expectation for the recovery of their economy which is in disarray. They are in a mood of hope and expectation in the light of the new Government which will take office next week. I, therefore, hope that Her Majesty's Government will be able shortly to send them some message of encouragement which will open the door for the early restoration of normal and harmonious relations.

6.23 p.m.

Viscount Thurso

My Lords, I join with other noble Lords in thanking the noble Lord, Lord Buxton, for initiating this debate in your Lordships' House. In his remarks the noble Lord spoke of 150 years of peaceful occupation of the Falkland Islands. I would prefer to describe those 150 years as 150 years of neglect by a particularly unimaginative absentee landlord. Whatever else we do and whatever line we pursue in seeking a solution to the problem, we cannot and must not avoid immediately starting to put right those 150 years of neglect.

It has been pointed out to us in two excellent, far-reaching and widely acclaimed reports from the noble Lord, Lord Shackleton, that there are things which obviously and clearly can be done and should be done. Our attention has been drawn to some of them during the debate. Sometimes the physical, geographical and climatic difficulties of the Falkland Islands are stressed to such an extent that we are almost led to think that it is a nearly impossible task to develop them at all. But I would like to draw your Lordships' attention to certain parallels in the North Atlantic which show that the Falklands are not nearly as intractable an area as some people would have us think.

For example, it would be fair to compare the Falklands with the Faeroes. The Faeroes are, of course, much worse off, much more remote and much more climatically disadvantaged than the Falklands. That can be demonstrated in the following way. First, the Faeroes are at 62 degrees north, whereas the Falklands are at 52 degrees south. So the Falklands start off some 10 degrees nearer the equator than do the Faeroes. Let us compare the location of the Falklands in the South Atlantic with places in the North Atlantic with which we are familiar. The Falklands are upon a latitude that is more or less equivalent to Ipswich, the Brecon Beacons and County Cork, none of which is a particularly desolate place. One might think of the Brecon Beacons as being desolate, but they are by no means as desolate as some areas in the north of Scotland. We have been told that on these windswept islands it is only possible to keep a sheep to five acres. Yet in the north of Scotland we are prepared to consider that improvements leading to the ability to carry a sheep to 10 acres are noble improvements well worth making on the hill farms of Caithness and Sutherland. So I do not think that we are talking about a desperately intractable terrain. But we are talking about a countryside and a sea which have been terribly neglected.

Let us return to our comparison of the Falklands with the Faeroes. The area of the Falklands is very much greater than the area of the Faeroes—some 12,500 square kilometres as opposed to some 1,398 square kilometres. But the Faeroes are able to carry upon those mere 1,398 square kilometres a population of over 44,000 people. In other words, there is a ratio of 31½ persons to the square kilometre. How are they able to support that population upon those barren, windswept, cold and inhospitable islands? The answer is that they have developed the seas around those islands: they have developed their fisheries; and they have developed their position as a sea-going group of islands. Indeed, they would describe themselves as a sea-going country because they regard themselves as being a country and not merely as being a dependency of Denmark. Denmark, of course, disagrees with them, but they regard themselves as having their own Government and running their own affairs.

Let us consider what they produce out of their seas. The Faeroe Islands produce some 2,450,000 tonnes of fish in a year. The Falklands produce none. There are no fish landed by Falkland fishing boats in the Falklands Islands. There are, as we have already heard in your Lordships' debate, some 100 trawlers operating in the area, but they are mostly Japanese, Russian and other foreign distant-water trawlers. So far as I know, none of them is a Falklands boat, and fishing in the Falkland Islands is carried out merely for the pot.

We have been told by the noble Baroness the Minister that fishing will be greatly improved by the introduction of salmon ranching. This is tinkering with the problem. The measures which have been outlined by the Government Front Bench are mere tinkering. The idea of carrying out a bit of salmon ranching in the South Atlantic, where it is a very doubtful proposition, when you are sitting in the middle of one of the richest undeveloped fisheries in the world seems to me to be ridiculous. I join most heartily with the noble Lords, Lord Cledwyn and Lord Shackleton, in pressing upon the Government that it is most urgent to establish the 200-mile limit around these islands, in order to build up a fishery and to ensure the conservation of this important resource.

That this can be done—and done successfully—has been demonstrated by another Atlantic island, the Island of Iceland, where again the fisheries around that island support a population even greater than that of the Faeroes and where they have not only established their fishery but have demonstrated to the world that they care about their fish stocks, that they know how to conserve their fish stocks and how to set about running a fishery into the future.

I also agree with the noble Lords, Lord Cledwyn and Lord Shackleton, that it is most important to achieve land settlement. This is the other action which can be taken quickly in the Falklands. To compare the sheep numbers, again, in the Faeroes and the Falklands, the Faeroes have some 65,000 or 66,000 sheep, and the Falklands have some 680,000 sheep. If one accepts that it is possible that a figure of perhaps 700 sheep would be a reasonable number for a shepherd to look after, it seems to me that one could develop a population on the Falklands nearly double the present population. although I shall not go into how I arrive at that conclusion. That in itself would help to strengthen the economy of the Falkland Islands and improve the viability of the services, the infrastructure, and so forth, which is needed to make life livable on those islands.

Therefore. there are means of development ready to hand which have been pointed out, which are not being immediately followed up, but which should be immediately followed up, by the Government. I urge the Government to get on with this development and to make it quite clear that we shall not hold back and wait for the matter of sovereignty, and so forth, to be solved first. We owe it to the Falkland islanders to get on with the development which they have been denied over the past 150 years.

All of that is very fine, but at the end of the day there must be a solution to the problem which caused the Falklands war. I go along with the noble Lord, Lord Gladwyn, in saying that we must talk to the Argentine Government about the sovereignty of the Falkland Islands. But we must also talk to the Falkland islanders because we must carry them with us in this. We must help them to understand where their future lies and what they have to do in order to be capable of dealing with their future. I do not think that we can walk out and leave them, which I rather felt was what the noble Lord, Lord Annan, was suggesting—that they are not our vital interest so we should cut and run. I do not think we can do this.

However, I believe that we have the job of persuasion and education, that we must tell the Falkland islanders that we will not desert them or the principles, which we believe justified us going and retaking the islands. However, I believe that the islanders must wish for something better than the noble Baroness described when she said that we should enable the islanders; to resume…the pattern of life which drew them and their ancestors to that remote territory". I do not think that that is an adequate aim. They must wish for something better; they must wish for a future which enables them to come forward into the 20th and 21st centuries. They cannot live a 19th century early-20th century way of life. This will not be possible for them.

However, in leading the Falkland islanders to a new solution, I believe that at an early stage we must talk with the Argentine about the different ways in which this question of sovereignty can be solved. It is not a question that either the Argentine must have sovereignty or we must have sovereignty; the Falkland islanders should have sovereignty over their own lives. They should be put in the way of being able to live their own lives, and we and the Argentine should jointly guarantee that this will be possible. The sooner we start talking with the Argentine about how this can be done, the better not only for us, not only for the Argentine, but the better also for the people who live on the Falkland Islands.

Therefore, I urge the Government not to delay in developing these islands, but to give them the development which they have been so cruelly denied; and immediately and almost simultaneously to start approaches to the Argentine to show that we are willing to move towards a new arrangement which will allow the Falkland Islands to develop properly along these lines.

6.38 p.m.

Lord Morris

My Lords, as with other noble Lords, I should like to thank the noble Lord, Lord Buxton, for giving us this opportunity of speaking on this vitally important subject. In so doing, I should like to thank my noble friend Lady Young for what to me was a very exciting speech. Noble Lords may or may not recall that I have taken an interest in this subject ever since I entered Parliament, and after years of listening to Governments of various colours avoiding this issue as hard as they could, it is extremely gratifying that at last there is a Government of the United Kingdom who have addressed themselves most responsibly and earnestly to this very important subject.

At this late stage I still believe it to be very important to recall the terms of this Motion. It is: To call attention to the importance of the Falkland Islands and other British islands in the South Atlantic…". I found it very interesting that the spokesman for the Liberal Party, the noble Lord, Lord Gladwyn, and also the noble Lord, Lord Annan, showed a totally unacceptable cynicism—and indeed discourtesy—to the mover of this Motion in not addressing themselves to the subject at all. All they did was to use this Motion as a vehicle for stating, in effect, that the Falkland Islands are extremely important to another nation. I do not think that that is either an honourable or the correct way of treating this Motion. However, I shall return to that matter because I think that the points they made show that Her Majesty's Government had no alternative but to handle this whole question in the way in which they did.

I should like to support the noble Lord, Lord Shackleton, with regard to the issue that he and, indeed, many other noble Lords raised as to the 200-mile, or thereabouts, fisheries zone. It is so important that it is worth reading the form of words of a resolution passed unanimously by the Government of the Falkland Islands, who so often in these debates are forgotten. It reads thus, and I think that it should go on the record: That this House request Her Majesty's Government in the United Kingdom to take note, and the earliest action, to implement a Fisheries Protection Zone of 200 miles around the Falkland Islands or such lesser distance to this median line where Falkland waters impinge on other Exclusive Economic Zones to control the unlimited fishing at present taking place and prevent further damage to the fish stocks in these waters. Also to provide revenue which will guarantee a balanced budget in the future and provide funds for the further development of these Islands". This was the point that the noble Lord, Lord Shackleton, so rightly stressed.

The Falkland Islands have never been dependent upon this country. It is critically important, and not just for their self-esteem, that they are not a grant-in-aid colony. I sincerely hope that Her Majesty's Government, although they have assured us that they are looking into this question, will take firm action on it.

I was also interested to hear the noble Lord, Lord Shackleton, say (which I must confess I had not realised) that the Antarctic Treaty was not renegotiable but was renewable. I should like to take this opportunity to ask whether it is possible for my noble friend to tell your Lordships' House what stage Her Majesty's Government have reached with regard to the renewability (if she will forgive the word) of this particular treaty. I happen to know that these talks have been going on for some considerable time.

Lord Shackleton

My Lords, may I interrupt the noble Lord? It may be helpful to those who think it may be renegotiated if I say that, as I understand it, it will automatically be renewed unless Governments choose to withdraw, and they have to give two years' notice. It would be possible for the Argentine to withdraw, which I think is unlikely, but even they would have to give two years' notice. I should have thought that the danger of it not being renewed, providing peace remains there, is slight.

Lord Morris

My Lords, I am grateful to the noble Lord, Lord Shackleton, for that information. I sincerely hope, like all other noble Lords, that it will be renewed in its entirety. I believe, notwithstanding that, that it would be useful for the House to know Her Majesty's Government's position on this.

The noble Lord, Lord Cledwyn of Penrhos, was a little unfair in casting the Falkland Islands Company in the light of some of the worst absentee landlords in Ireland at the beginning of the 19th century. Notwithstanding that, I entirely support the point that he was making, reiterated by the noble Lord, Lord Shackleton, about land reform. In my view it comes strangely from a Conservative Government, who support the fundamental principle that ownership, management and the responsibility of an asset concentrates the mind wonderfully, then not to support the principle of land ownership by those who manage and run farms.

The big problem in the Falkland Islands is that one cannot think in terms of small units. One can only think, by English standards, in terms of very large units indeed. Above all, from the human resource point of view one requires a particular type of person and, indeed, a farmer who not only has knowledge of but has a feel for this highly specialised form of what we would call upland farming. There are few people who have a taste for this type of endeavour. However, it is well worth pursuing this point.

'This brings me to the vitally important point of human resources. The one sure way of ensuring that there is no Anglo-Saxon influence in that part of the world is, either directly or indirectly, wittingly or unwittingly, to discourage people from living in the islands. The point that the noble Lord, Lord Shackleton, made with regard to the social imbalance evidenced by the shortage of nubile females is critically important to the development of the islands. I beg your Lordships not to ask me to try to answer that question, because I know only too well that it would be quite beyond my abilities.

Let me return to the noble Lord, Lord Gladwyn. He immediately sprung to my mind one of Ko-Ko's victims; people who heap praise on every country but their own. He never suggests, for instance, that an honourable line in foreign policy is honour. It is as critically important in this country to have an honourable foreign policy, and for the strong to look after the weak, particularly of our own stock, as any other forms of foreign policy. I found his line totally cynical.

Indeed, I believe that he was trying to suggest—this was the effect of his suggestions—that the Falkland Islands should redesign their motto to read, not, "Desire the right", but "Desire what is expedient to the United Kingdom". I find that that has really blown the whistle on the fact that the Liberals are a party totally devoid of any philosophy whatsoever. In fact, it is the politics of expediency and the morals of Pontius Pilate that they should desire to wipe their hands of the people of the Falkland Islands and our interests down there, which have been evidenced over hundreds of years by our explorers and our scientists. For him to take such a stand on behalf of the Liberal Party throughout the country is not going to do their party any great good.

At this juncture I want to make one last point. I rejoice in the fact that on this particular issue Argentina and the United Kingdom should be in total agreement that sovereignty should not be on the agenda. I rejoice in that fact. I find it a horrible irony that this has always been the position of the islanders: they have always felt that sovereignty should never be on any agenda. Yet it takes a terrible tragedy for both Governments to come round to that position. I believe that just because a country has no political, economic or military muscle, they should not by any chance be denied the most important principle of the United Nations; namely, that of self-determination.

6.48 p.m.

Lord Bishopston

My Lords, like the noble Baroness, Lady Vickers, I had the great pleasure of going to the Falkland Islands on their 150th anniversary with one or two other noble Lords present here tonight. For that, of course, I give thanks to the Foreign Office and also to Her Majesty's forces. There we got to know in a short time something about the problems of the country we were visiting. We also got to know the friendliness of the people we met. I believe that the noble Lord, Lord Buxton, and his family should receive tribute for their interest in that area and for their strengthening of the links between the United Kingdom and the South-West Atlantic, and also for adding in such a pleasant way to our store of knowledge of those otherwise remote areas.

After a debate in which the noble Lord, Lord Buxton, my noble friend Lord Shackleton and, indeed, others have taken part, there is little more for me to say to stress those points which I feel need emphasising. I think we have all been helped by the numerous reports. There were the Shackleton Report, versions 1 and 2; the reports of the various Select Committees on Defence and Foreign Affairs, the reports of those who had visited the Falkland Islands and very much more—and the stream of contact that we have had with the islanders, all of which help us to have a better realisation of the problems and the possibilities which lie before us.

My noble friend Lord Cledwyn has said much that I would have said, and he probably said it much better and with a great degree of sensitivity to the situation to which he made reference. Other noble Lords have made reference to other important aspects. One asks oneself the question of how to compress into a summing-up speech of a few minutes the impressions of an eight-day visit, albeit so far away, to people of the Falklands who are close to us in spirit despite the distance and people who were encouraged in the dark days to keep their heads down and their hearts high, confident that we would restore their freedom. We have done that, of course, with their help; and the fact remains that the post-war period needs as much careful planning as the planning of the campaign itself.

Those are the problems to which we have been addressing ourselves today. The noble Lord, Lord Annan, has done us a service by opening up the perspectives even further, despite the disagreement which has been expressed since. He reminded us of our wider role and of our wider responsibilities—helpful, I thought, in enabling us to see our wider priorities, not least in the South-West Atlantic where, as he said, if we spend money we shall have less to spend elsewhere. I am glad that other noble Lords have stressed our responsibilities and the way in which they can be met in the future.

The noble Lord, Lord Buxton, has stressed the importance of the Falkland Islands and the other islands whose future is so vital to us. He mentioned Ascension Island, a noted staging point, where air and sea facilities afforded a stopping off place on the way to the Falklands and the South-West Atlantic. My noble friend Lord Cledwyn drew attention to other aspects, as did my noble friend Lord Stewart, including the Antarctic Treaty which is due, as my noble friend Lord Shackleton has said, not for renegotiation but for renewal in. I think, the 1990s.

The noble Lord, Lord Buxton, has referred to the impasse with the Argentines and reminded us that there are the economic and other aspects which could do much to unite our mutual interests. I believe also that the reference to the cost of "Falklands Fortress" is relevant at this time. I share the fears—and I have expressed them on a number of occasions—that the Falklands and our other defence commitments, including NATO, and, indeed, our nuclear commitments, may well create an intolerable defence situation. This is one that we have got to watch because we have the four strategic roles within NATO; we have the wider world commitments; and the Falklands is one commitment which we alone have to bear. This needs to be kept in perspective.

The noble Baroness, Lady Vickers, has done us a service by setting the background against which we can proceed. She referred to the very limited facilities for development already there. We need to see the realities of today to assess the development of tomorrow. In Stanley, as we saw in the East Falklands, there are very limited communications, very limited road areas: there is no public transport and nothing less than a large estate wagon will suffice for getting people from place to place. Helicopters seem to be neecessary as a form of travel between East and West Falklands and between the other islands. Shipping is limited too, and this is a feature for the transport of people, sheep and produce.

The lack of facilities is really one which is causing concern. I can envisage the job of the new chief executive in deciding what the priorities are going to be, because in many ways all the problems are very closely linked. There is a lack of shops and services and there is the problem of agriculture and of climate, the lack of trees and so on. I think it was important for those of us who made the visit, for Members of both Houses who went there on Select Committees, that the islanders were seeing people who were interested and who were prepared to listen to their points of view. This is going to be important.

The noble Lord, Lord Gladwyn (who I note is not with us at the moment), made reference to our defence budget, talked about the need for constant review and stressed the importance of United Kingdom-United States relationships in the light of the US-Argentine-Latin America situation. Those are factors which the United States and we ourselves will have to bear in mind as major partners in the defence alliance of NATO. But I do not think that we should dwell too much—as I thought the noble Lord did—on the past. We regained control and, although the Government must take some responsibility for the fact that we lost the islands, we should bear in mind also that to lose and then regain does not restore the status quo but creates a new situation with new problems, not least, in this instance, that of relationships with the new Government of Senor Alfonsin. One wondered, when the noble Lord, Lord Gladwyn, was speaking about his right honourable friend David Owen, who was Foreign Secretary at the time, why some of the things which are so obvious to the Alliance at this moment were not borne in mind at the time when David Owen had the responsibilities and could have carried them out. It is very nice for a party which has not had power, and is not likely to get it, to say what might have been done by those who had it.

I was very glad that the noble Baroness, Lady Young, gave us an assurance of no use of nuclear weapons. Their use, of course, is quite unthinkable but it does show the need for adequate conventional capability in which the maritime role must be very much more evident. The airfield has been discussed—and that is essential—but I believe that we need the wider facilities and access to all parts of the island. If the airfield is going to be laid there for military purposes, we must realise also that it must have a civilian role as well; and that that means more buildings, more access roads and so forth and that one must look at the other facilities which could be available for tourists in the island, apart from looking at the wildlife and other things of that sort. All this, of course, is another aspect which will follow the building of the airfield.

The Government are helping the islanders to restore the pattern of life that they knew, but those of us who spoke to them say that they realise that the life they knew has gone forever. I still think it is important to have in mind the kind of life that they used to know and to ensure that any changes are gradual and, indeed, planned changes ready to fit the environment, with conservation of wildlife and other aspects in mind. I think there is evidence from many of the reports which noble Lords must be getting that there is not the kind of planning which is absolutely essential. To have planning of resources and development of the island, the full power must be in the hands of the Falkland Islands Government. Those of us who know something about the Coalite Company and their Falkland Islands subsidiaries must have some concern that the power is not there.

I think it is important for the Government to keep the need and priorities of the Shackleton Report very much in mind at the present time when they must be realising that there is so much to be done. The noble Baroness, Lady Young, has mentioned the need for better relationships at all levels—cultural, economic, trade and finance—and these are ways in which we can come to a much better relationship with the new government. I think the noble Lord, Lord Annan, was right to remind us that, although we had hopes of the new government, nevertheless in that climate and that position the situation can change very rapidly; so that there is not the kind of continuity that we have a right to expect.

My noble friend Lord Cledwyn referred to the slow progress being made in land reform and in development of fisheries. The noble Baroness in her opening speech did not deal with his criticism but merely said that one large farm is to be split into smaller holdings and that the 200-mile limit is under consideration. I hope, as I am sure others do, that she can go much further in her reply We want to know when there is to be a release of funds to meet the land sitution and when the fisheries limit will be announced or rejected.

I notice that the Falkland Islands Legislative Council adopted a motion at their meeting on the 22nd July, when they requested Her Majesty's Government to take the earliest action to implement the fisheries protection zone of 200 miles around the Falkland Islands or such lesser distance where the Falkland waters impinge on the EEZ.

These are very important sentiments and when you realise how many other countries fish in those waters with no benefit to the Falkland Islands, I think it is about time we declared, with their Government's consent, this limit so that licences can be granted, and with research and development more work can be produced for the benefit of the Falkland islanders and also for their profit.

My noble friend Lord Shackleton in his report and also today has stressed the importance of land reform. This has been accepted by the Falkland Islands Government and indeed by many others. I believe that farms should be owned and occupied by Falkland islanders and the funds which they produce kept there. The sale of small plots with no viability does service to no one, and certainly not to the young who wish to stay there and those who wish to come or to return.

I pay a tribute in passing to the work of the Grasslands Unit, which some of us may have seen, in their efforts to increase the viability of the land with farming and arable areas as well. This work must continue. I believe that it is important to mention some of the factors raised by my noble friend Lord Shackleton in his report. He refers to a radical solution being called for and to the fact that current profitability is too low to generate investment on farms. Sheep farming (and indeed other farming) is a less attractive means of investment than others. He refers to the farmer owner-occupiers likely to plough back profits if they can see the prospects of a long-term future and higher yields. And of course there is the need for a review of the farm structure planning required, with capital grants and allowances.

We should consider most of all the ability of the Falkland Islands Government to bring these things about, despite the fact that much of the land is owned by overseas sources, to which the profits flow, to the disadvantage of the Falkland Islands themselves. We should try to stop that drain on the resources of the Falklands and we should encourage farm investment as well as much more research and development, because productivity is vital in that part of the world. Diversification of the economy is required, with more skills and more outlets. The islanders need a greater stake in their future and also involvement in decision making. It is very important that people should have the right to a say, not only in deciding their future in the South-West Atlantic but in the islands themselves. This will require very careful planning by those who have responsibility from the Civil Commissioner, Sir Rex Hunt, and from the new Chief Executive, and others, because it involves teamwork at all levels in the community.

I should like to sum up by saying that there is much still to be done. I believe that we have all been helped by the debate we have had today upon the initiative of the noble Lord, Lord Buxton. I feel that the debate has enabled many to express their urgent concern, including some with intimate knowledge. We pay tribute not only to those who sacrificed so much to restore the freedom of the people of the islands but also to those who are doing it day by day. Those of us who have been on a Hercules, slogging for 13 hours from Ascension to Port Stanley, will realise the sacrifice that the people are making: people who still endure much over great distances to and from the Falkland Islands, to provide the vital link between peoples who have a common affinity. If the debate helps the Government to decide the right initiatives, and others to be helped in fulfilling them, then I believe that we shall have achieved much.

7.4 p.m.

Baroness Young

My Lords, we have heard a most interesting range of views in our debate today, and once again I want to express our gratitude to my noble friend Lord Buxton for introducing the debate. Among the subjects raised has been the emphasis placed by my noble friend—and indeed by other speakers—on the strategic importance which he perceives these islands to have.

I should like to make some more observations about this aspect of our debate. Happily, the South-West Atlantic is one of the regions of the world at present relatively free from East-West tensions. Long may it remain so. The vulnerability of canals has been discussed, and other circumstances are imaginable in which the Falklands might play a role such as they played in the First World War by reason of their position on the Cape Horn route to the Pacific. But such circumstances would be likely only if serious political reverses occurred in South and Central America and in the African continent or, as the noble Lord, Lord Buxton, suggested, in the area of the Suez Canal.

For the present, as I emphasised in my opening speech, our military dispositions in the Falkland Islands are intended solely for the defence of the islands and are of the minimum size necessary to achieve this priority. They have no wider purpose. We, too, have heard, like my noble friend Lord Montgomery, that the Argentines perceive our dispositions as a threat, and I hope that they will read today's debate and understand what we are saying. Perhaps our friends, such as my noble friend Lord Montgomery, will do what they can to disabuse them of this idea.

I am afraid that a number of absurd claims have been made both by Argentina and her supporters—most recently during the United Nations General Assembly debate on the Falklands—suggesting that we do have wider goals. The Soviet representative to the United Nations even maintained in that debate that the countries of NATO were seeking to strengthen their military position in the South Atlantic through the militarisation of the Falkland Islands. Has he, I wonder, forgotten already that if anybody militarised the islands it was Argentina, in April 1982? Is he serious in suggesting that a defensive alliance, whose very title confirms that its area of application is confined to more northerly regions, is disposed to contemplate concerted military deployments in the South Atlantic?

I now turn to another aspect of our policy which has also been misunderstood: our policy on the Argentine servicemen who lost their lives in the Falklands conflict and who are buried there. There are more than 230 Argentine servicemen buried in the cemetery at Darwin on East Falkland. Those who have seen photographs of the cemetery will, I am sure, share my view that we have provided a fitting and dignified resting-place.

However, from the outset we have made it plain to the Argentine Government that if they wished to take the bodies of these men back to Argentina we would be willing to facilitate this. We shall ensure that the incoming Government are aware that this remains our preference. Failing that, as I said earlier, we are ready in principle to accept a visit from an Argentine party which can establish with the ICRC and ourselves that its purposes are genuinely humanitarian. This offer remains open.

I should like now to turn to various points which were raised by noble Lords. My noble friend Lord Buxton urged us to be unambiguous. I hope that in my earlier remarks I have left your Lordships in no doubt of the clear policy that we are pursuing. As the noble Lord, Lord Buxton, put it, the restoration of our relations with Argentina must be a long haul. In approaching it with realism, we echo another of the noble Lord's own words: that this realism consists of working patiently to recreate a climate of confidence, but not talking about sovereignty as if the events of 1982 had never happened.

The noble Lord, Lord Buxton, spoke of the opportunities in Antarctica. He suggested that Britain, with our record as a leading power in the area, was lagging behind and even moving backwards in terms of commitment of resources and effort. He particularly compared our efforts with those of India and Brazil.

The noble Lord, Lord Gladwyn, also referred to the resources which are being devoted to this area. May I set out the figures. For 1982–83, additional funds have been made available for the British Antarctic Survey for a five-year period. In 1982–83 an extra half a million pounds were allocated. In 1983–84 this will rise to £4 million, and for the last two financial years of the period the extra provision will be £5 million. These extra funds will enable the survey virtually to double its level of activity.

There has also been discussion on the future of the Antarctic Treaty.

Lord Shackleton

My Lords, may I interrupt the noble Baroness before she leaves that point? Can she tell us whether the funding of the station in South Georgia, which was the subject of argument between British Antarctic Surveys and the Civil Commissioner, has been settled? May I add that, of course, British Antarctic Surveys probably produce the highest quality scientific work of anybody in the Antarctic.

Baroness Young

My Lords, perhaps I had better write to the noble Lord on the point about the British Antarctic Surveys and South Georgia, because I do not have that information with me.

On the future of the Antarctic Treaty, it has been suggested that in 1991 the treaty has to be renegotiated. In fact, this is not correct. The treaty is of indefinite duration. However, after 1991 there will be an opportunity to review the operation of the treaty if any of the consultative parties so desires. I hope that this answers the two questions of my noble friend Lord Morris.

The noble Lord, Lord Buxton, drew attention to the importance of Britain's other island territories in the Atlantic—St. Helena and Ascension Island. Besides its own inherent strategic potential, lying across the South Atlantic trade routes, Ascension is a vital link between the United Kingdom and the Falkland Islands. Its airfield at Wideawake is the base from which the Royal Air Force air bridge is mounted. An extensive programme of work is in hand to improve and upgrade the facilities there to cope with the expanded volume of air traffic. St. Helena has no airport and limited harbour facilities, and does not actively figure in the military link between the United Kingdom and the Falkland Islands. St. Helena has, however, been a traditional source of labour for projects on Ascension Island, and I am pleased to say that many Saints, as St. Helenians are known, are employed on the work being undertaken at Wideawake.

The noble Lord, Lord Buxton, also urged that a ministerial visit to St. Helena should take place at the earliest possible date. The Legislative Council of St. Helena has indeed requested that a Minister visit the island. Unfortunately, owing to other commitments my honourable friend the Minister for Overseas Development is unable to do so. He has, however, advised the Legislative Council that Sir Neil Marten, who, as many noble Lords may recall, was my honourable friend's immediate predecessor as Minister for Overseas Development, will visit St. Helena as his personal representative in January next year. The visit by Sir Neil will enable councillors to air their views about the island's future and for Sir Neil to advise the Minister for Overseas Development accordingly.

The noble Lords, Lord Cledwyn and Lord Gladwyn, referred to future costs in the Falkland Islands. Perhaps I could confirm the figures given by my right honourable friend the Secretary of State for Defence on 27th June, that for the three years 1983–84 to 1985–86 the capital and running costs, added to the defence budget, are £424 million, £334 million and £232 million. These figures include the cost of the new airfield, which is about £215 million.

Both the noble Lord, Lord Cledwyn, and the noble Lord. Lord Bishopston, as well as the noble Lord, Lord Shackleton, criticised the Government for their gradual approach to land reform. We wish progress in this field to be sure, and real progress has been made. With assistance from a development grant, the Falkland Islands Government have already acquired the Pack Brothers estate, which has been sub-divided into six farms. I stress that this is no easy task. It is not simply a question of drawing lines on a map. The Falkland Islands Government are determined that each farm should be capable of supporting around 3,000 sheep, but I must tell the House that differences of opinion persist locally as to whether this can really provide an adequate return for a single family.

All this supports a gradual approach, and it is not as gradual as all that: one estate acquired and subdivided; a committee established to consider the optimum size and stock number for sub-divisions of a second, the San Carlos farm; and initial soundings made to acquire a long lease on a third. The Civil Commissioner estimates that this will keep his officials occupied for two years, and is confident that at the end of that period more farms will be coming on to the market. My latest information is that sub-division of the three estates that I have mentioned will more than meet the demand from islanders who are qualified to start farming on their own account. The Falkland Islands Government will then be in a position to make land available to suitable immigrants.

Lord Shackleton

My Lords, I am sorry to interrupt the noble Baroness, but did she say that all support this? I thought I heard her say that all support it.

Baroness Young

No, my Lords. What I said was that there are differences of opinion locally as to whether or not a farm with 3,000 sheep is capable of supporting a family. What I have indicated is that this gradual approach is one which we believe has the support of the Falkland Islands Government, and that is the way in which it is proceeding.

Lord Shackleton

My Lords, I must point out, if I may, that there is great controversy on this subject, and it simply is not good enough for us to be told that this is all very satisfactory. There is a lot of controversy and disagreement, and, indeed, some argument, as to whether the Falkland Islands Executive Council or the Legislative Council agree with this. I can produce any number of arguments to show that there are the people there who want farms.

Baroness Young

My Lords, of course, I note what the noble Lord, Lord Shackleton, has said, and I shall look at this matter in the light of his remarks. I would not wish in any way to mislead the House, but the information that I have been given I believe to be correct.

Lord Cledwyn of Penrhos

My Lords, I am much obliged to the noble Baroness, and I apologise for interrupting her so soon after my noble friend. But would she not agree that the companies to which she has referred are very small companies indeed, and that the large company is the Falkland Islands Company? In my opening speech I gave the statistical information which showed the extent of land which it holds. Has any approach been made to the Falkland Islands Company, and what was the response from it? Is it just as co-operative as the small companies?

Baroness Young

My Lords, I was in fact about to turn to the whole question of the Falkland Islands Company, but perhaps I may just conclude on the question of the division of land. Development funds will be made available by the Falkland Islands Government to the Falkland Islands Development Corporation to administer soft loans for agricultural development—

Lord Shackleton

My Lords, are there any grants? Under the Highlands and Islands Development Board, and elsewhere, 50 per cent. of it comes in grants, not loans.

Baroness Young

My Lords, I understand that this might be a possibility. If I am wrong on that point, I will of course let the noble Lord know.

Turning now to the Falkland Islands Company, several noble Lords have referred to it and I recognise that it is fashionable in some circles to speak rather disparagingly of it. I ask your Lordships to take a broader view. The company, by virtue of its exceptionally strong position in the agriculture and trade of the islands, is well placed to play a valuable role in the economic diversification and development. I would remind your Lordships that in his 1982 report the noble Lord, Lord Shackleton, recognised that the Falkland Islands Company's record in reinvesting its profits in the island was, in fact, better than that of the majority of the expatriate farming companies.

The noble Baroness, Lady Vickers, asked about the position of the constitution. I pointed out to your Lordships that we are considering with the Falkland islanders the future structure of their internal Government and the electoral system. The noble Baroness will appreciate that this work does not address the islanders' future relationship with Britain; that must be for much later. It is relevant to recall again here the point made by my right honourable friend in another place about speculation for the long-term future being premature. However, I am grateful to the noble Baroness, who identified several areas where development is needed. Some of these are already familiar to the British Government and to the Falkland Islands Government, and it is for the Falkland Islands Government to decide the priority of such developments against the many other pressing needs which they have already identified. It is too early yet to say what the future plans may be for the military jetty facility, to which the noble Baroness referred.

Other suggestions were made by the noble Viscount, Lord Thurso. I regret that I was not in my place when he spoke, but I shall read with great care what he said about the 200-mile fishing limit. My noble friend Lady Vickers also referred to the proposal for a nuclear-free zone in the South Atlantic—as did the noble Lord, Lord Kennet. My noble friend Lady Vickers suggested that a nuclear-free zone should be established in the South Atlantic. She will be aware that the treaty for the prohibition of nuclear weapons in Latin America, the Treaty of Tlatelolco, seeks to establish Latin America, the Caribbean and surrounding waters as a nuclear-free zone.

The intended zone of application includes large areas of international waters and covers the Falkland Islands and the Falkland Island dependencies. Until all eligible states—which include Argentina but not the United Kingdom—have ratified the treaty and its two additional protocols, the treaty is in force only for those states which have ratified and waived the universality provision. Argentina has signed but not ratified the treaty, which we should like to see in force in the entire region.

There were a great many suggestions for a multilateral solution to the Falkland Islands. The noble Lord, Lord Kennet, suggested an extension of the Antarctic Treaty area. Whatever the superficial attractions of this solution, it must be borne in mind that the extension of the treaty area to include the Falklands and the Falkland Island dependencies would require the unanimous consent of all 14 consultative parties. It would give not only Argentina but also the Soviet Union and Poland the right to establish scientific stations on sites of their choosing and to man them with military though unarmed personnel. It must also be borne in mind that the Antarctic Treaty is geared to territory where there is no permanent population. Its direct application would not meet the situation of the Falkland Islanders. The treaty was not designed to meet situations such as the Falklands dispute and it would, we believe, be wrong to risk destabilising its régime, which has worked so extraordinarily well.

The other suggestion related to a United Nations trusteeship. The United Nations accepts that Britain is the sole administering authority for the Falklands. As such, and in fulfilment of our responsibilities under Article 73 of the charter, we have made it clear that we shall not allow any constitutional arrangements to be imposed on the islanders against their wishes.

If I may return to the question of land tenure, I can confirm that the Island Legislative Council approved unanimously on 16th December 1982 Sir Rex Hunt's speech commending the gradual approach. They wanted to review the position if the demand for land on the open market exceeded the land available. As I pointed out, it has not. I can see that the noble Lord, Lord Shackleton, wishes to intervene again, perhaps to raise another point with me?

Lord Shackleton

Perhaps the noble Baroness will ask Sir Rex Hunt what happened and what he thinks.

Baroness Young

My Lords, the next time I see Sir Rex Hunt I shall take the opportunity to do so. The noble Lord, Lord Annan, made a great plea for realism about the future. It might be helpful if I quoted again what I said about Parliament; namely, that Parliament has the final responsibility for taking decisions about the future of these territories. This is constitutionally correct and it is realistic. Realism was also referred to by my noble friend Lord Buxton who remarked—I agree with him—that we should approach Dr. Alfonsin in a spirit of co-operation. This is our own view. Realism is especially necessary in determining our first steps. We have publicly expressed willingness to move forward in clearly defined areas and we hope that this will be reciprocated. Indeed, what I have said about our first steps in bilateral relations with the new government in Argentina was confirmed by my noble friend Lord Montgomery of Alamein. Finally, I was pleased that this realistic approach was shared by the noble Lord, Lord Shackleton.

I conclude by thanking again my noble friend Lord Buxton of Alsa for introducing the debate. It has come at a most timely moment. A wide range of views has been expressed. It is not surprising that the Government do not agree with a number of them. Nevertheless, I have listened with great care to all the views which have been expressed and I shall read the whole debate with great interest. It is very interesting to note that in this House we have two experts on the Falkland Islands—my noble friend Lord Buxton, who introduced the debate, and the noble Lord, Lord Shackleton. I was encouraged that both of them agree with the Government that we cannot negotiate sovereignty but that there are positive steps which we could take to improve our bilateral relations. We hope that it will be possible to take those steps with the new Argentine Government.

7.25 p.m.

Lord Buxton of Alsa

My Lords, naturally it is tempting to make a large number of points resulting from this excellent debate, but in view of the wide range of authority and experience of all the speakers I feel that it would be both presumptuous and tedious to extend the debate. May I express my appreciation of the 18 months of arduous work carried out by Sir Rex Hunt and his staff, by Major-General Thorne and General Spacey, and by the Services in the Falkland Islands. We should like them to know that we think they have done a marvellous job. I am also grateful to my noble friend the Minister, because I am sure the people of St. Helena will be enormously comforted and strengthened by the news that next year they are to have an official visit.

The debate leaves me with the impression of a remarkable degree of solidarity on the basic and most important issues. If there have been differences of view they have related more to timing than to policy. As my noble friend said, the timing of this debate has been absolutely superb. It was not planned by me, but it has provided a marvellous occasion for my noble friend to state the Government's position to the rest of the world, especially to South America and Argentina. The debate has also shown that the Government's policy has overwhelming support. Therefore I should like to thank every Member of your Lordships' House who has spoken in the debate. I am grateful that it has been so well supported. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.