Sitting of 9 July 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

DUNDEE PORT AUTHORITY ORDER CONFIRMATION BILL
Orders for consideration read.
To be considered tomorrow.

ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Grant-aided Schools
    Mr. Alexander Fletcherasked the Secretary of State for Scotland what steps have been taken to alleviate hardship following the closure and reorganisation of grant-aided schools; and if he will make a statement.
    Lord James Douglas-Hamiltonasked the Secretary of State for Scotland if he will make an up-to-date statement on the outcome of his negotiations with the grant-aided schools in Edinburgh and the rest of Scotland.
    The Under-Secretary of State for Scotland (Mr. Robert Hughes): Before I answer, I should inform the House that my right hon. Friend the Secretary of State is heavily engaged today in Scotland with the State visit of the King of Sweden. I am sure that the House will appreciate why he is not here.
    The answer to the Questions is as follows. In the light of the discussions which have taken place between the Depart-
    504
    ment and representatives of the grant-aided schools, my right hon. Friend has decided that grant to the schools that elect not to join the public system will be phased out over six years beginning in 1976–77. Amending regulations for this purpose will be laid before the House in due course. Discussions between the schools and the education authorities concerned are now in hand and the schools will shortly be asked to make known their intentions for the future.
    For schools not joining the public sector, a six-year phase-out of grant should give protection to existing pupils at least until they have completed their primary or secondary courses. As before, it will be open to the managers of the schools to use the grant to alleviate any serious financial hardship.
    Mr. Fletcher: It is helpful that the Under-Secretary has given us some idea of the phasing out of the grants to these schools. Is he aware, however, that many parents are deeply concerned about the shortage of school places for their children due to the reorganisation? Will he tell the House why, in these serious times of financial stringency, schools such as John Watson's in my constituency have been put out of business and closed down as a direct result of the Government's policy?
    Mr. Hughes: What happens to children who are unable to continue in the grant-aided schools is of concern to all of us. Discussions of a detailed nature on how many children will come into the public sector and the amount of resources that are needed are taking place at local level. In times of financial stress there is no justification for continuing a selective system of education which is subsidised from State funds.
    Lord James Douglas-Hamilton: Will the Minister give an undertaking that the general phasing out of the grant will take place over at least a six-year period in order to give plenty of opportunity to the children at these schools to stay on and complete their education?
    Mr. Hughes: I thought I made it perfectly clear in my original answer that the grant was to be phased out over a six-year period beginning 1976–77.
    Mr. MacCormick: Does the Minister appreciate that his answer is very close

    505
    to a motion tabled a few months ago by the hon. Member for Glasgow, Cathcart (Mr. Taylor)? Does he appreciate that we expect to hear the Conservative benches congratulate him on what he has just said?
    Mr. Hughes: I shall be surprised if anything that the Government do receives the congratulations of the hon. Member for Cathcart.
    Mr. Teddy Taylor: Does the Minister agree that what he has announced has nothing at all to do with what we propose, namely, the maintaining of the real value of grants? Does he agree that what he proposes will involve enormous hardship to the parents concerned because of inflation eroding these grants? Will he also agree that the acute financial problems facing local authorities are a reason for abandoning his plans, bearing in mind that to transfer a substantial number of children to the public sector will not only disrupt the life of those children and their education but will put a further burden on the ratepayers of the cities concerned?
    Mr. Hughes: The hon. Gentleman is always very quick to leap to the defence of people who expect educational privilege at public expense.—[Interruption.] Yes, we shall be saving money. However, it is not being done for that reason. It is an educational policy that we are pursuing to get much better education in Scotland. We believe that this policy will work and we see no reason why there should be immense financial hardship because it is within the resources of the schools to take care of it themselves.

    Assembly
    Mr. Reidasked the Secretary of State for Scotland what progress his Department has made in its work on the Scottish Assembly.
    The Under-Secretary of State for Scotland (Mr. Harry Ewing): My Department, in conjunction with the Cabinet Office Constitution Unit, is urgently pressing ahead with its consideration of the many complex issues involved in establishing the Scottish Assembly. As was announced last month, the Government intend to publish a White Paper on devolution in the autumn.
    Mr. Reid: I am grateful to the Minister for that reply. Will he confirm that it is his intention to press ahead with the publication of the Assembly Bill as soon as the White Paper is published? Will he further confirm that he will have no truck with the absurd delays and prevarications suggested this week by members of the Conservative Party?
    Mr. Ewing: I confirm the first point. It will be the Government's intention, as soon as possible after publication of the White Paper, to press ahead with publication of the Assembly Bill. In relation to the other point raised by the hon. Gentleman I expressed some surprise during the weekend. I thought that the road to Dundee, in which town the Conservative Party Conference was held, had nothing on the road to Damascus when it came to conversions, but I understand that the position has again been reversed.
    Mr. Sproat: Is the hon. Gentleman aware of the very great and growing concern in Scotland, especially in the light of local government reorganisation, about the huge extra financial burdens and huge extra bureaucracy which some concepts of a Scottish Assembly could impose? Is he aware of the fears in Scotland that Scotland might become the most over-rated, over-taxed and over-governed country in the world?
    Mr. Ewing: The hon. Member really surprises me—although I ought not to be surprised. The hon. Member, representing as he does the Conservative Party, ought not to assume that the views of the Conservative Party represent the views of the people a Scotland. That is where the great mistake is being made.

    Economic Policy
    Mr. Teddy Taylorasked the Secretary of State for Scotland if he will make a further statement on the outlook for the Scottish economy.
    Mr. Hendersonasked the Secretary of State for Scotland what proposals he has for further industrial development in Scotland to counter rising unemployment.
    Mr. Campbellasked the Secretary of State for Scotland if he will make a statement on the outlook for the Scottish economy, with particular reference to oil-related industry.
    The Minister of State, Scottish Office (Mr. Bruce Millan): While the current level of unemployment in Scotland must be a matter for concern, the Government's vigorous regional development policies and the new jobs created as a result of North Sea oil continue to make the Scottish situation more resilient to today's wider difficulties than the rest of Britain or many other industrial nations.
    We shall continue to take initiatives of special benefit to Scotland. As my right hon. Friend announced on 30th June—[Vol. 894, c. 326]—a further 200,000 sq. ft. of advance factory space is to be provided, while our decision to set up the Scottish Development Agency will be a major factor in creating new investment and employment.
    Mr. Taylor: Does the Minister agree that the outlook for school leavers is very bleak at present? Can he give any idea whatsoever of his estimate of the figure which unemployment will reach during 1976?
    Mr. Millan: No. I think the hon. Gentleman knows that it has been the practice of successive Governments not to make forecasts of unemployment. On the first point, I recognise that this is a serious problem and we are doing a number of things, through the Training Services Agency and in other ways, to encourage employers to take on school leavers when the summer holidays start.
    Mr. Henderson: Does the Minister accept that in view of the mounting level of unemployment it would be extremely valuable if the Government were to insist that oil companies and oil-related companies bought at least 50 per cent. of their goods from firms domiciled in Scotland?
    Mr. Millan: We have already gone a very long way towards that. The proportion of oil-related equipment which is bought in the United Kingdom—and, of course, most of that is bought in Scotland—has risen in the last year quite substantially. However, I agree that there is a lot more to be done in this field. That is why we have moved the Offshore Supplies Office to Glasgow and why we strengthened it to get more of these jobs for Scotland.
    Mr. Campbell: While being heartened by the Minister's last remark, may I ask
    508
    him whether he is aware that there is the greatest worry about the future of oil-related industries in Scotland, so much so that there is a delegation from the north of Scotland in the House at this moment to discuss this very matter with hon. Members? In my constituency there is a module building site at which, if no further orders are forthcoming in the near future, there will be substantial redundancies. Will the Minister be prepared to speak to his colleagues in the Department of Energy to try to ensure that there is more work related to the United Kingdom in our oil-related industries than there is at present?
    Mr. Millan: On the latter point, I have already done that. As I have said, we are very anxious to get the maximum amount of oil-related work for Scotland, and particularly from West-Central Scotland to provide a better regional balance within Scotland. On the first point, I have already arranged to meet the delegation tomorrow.

    Electricity Reconnections (Payment)
    Mr. Dempseyasked the Secretary of State for Scotland what studies his Department has made of the consequences for needy consumers of the practice of the electricity authority in demanding advance payments, because of belated payment of accounts, before reconnecting the electricity supply; and if he will make a statement.
    Mr. Millan: Following a study in 1972–73 by my Department together with the gas and electricity boards, the Association of Directors of Social Work and the Department of Health and Social Security, a memorandum of guidance on dealing with fuel debts was circulated to their respective local officials with the object of increasing co-operation between them in dealing with bad debt cases. The electricity boards have a statutory right to demand security deposits.
    Mr. Dempsey: Is my right hon. Friend aware that I have nothing but appreciation for the electricity board officials in my constituency in their effort to recover arrears from defaulting consumers? However, is it necessary to ask, for example, for the payment of a debt and

    509
    a quarter's advance payment, in the region of £40, from persons who are sick or are unemployed? That is not a very suitable solution. Has my right hon. Friend considered the installation of burglar-proof meters, so that we know that consumers will pay before they have electricity supplies?
    Mr. Millan: In appropriate cases prepayment meters can be installed. There is a distinction to be drawn here between the had payer, who is a bad payer simply as that, and people who have fallen into arrears for perfectly legitimate reasons of illness and so on. In the latter cases, of course, an approach to the social work department can normally provide some kind of solution to this problem. That is what the earlier consultations I have mentioned were meant to provide. However, I am very willing, with new local authorities having come into operation, to remind local authorities now, in view of my hon. Friend's Question, of the necessity to get the kind of local co-operation which will deal with legitimate cases of people falling into arrear through no real fault of their own.
    Mr. David Steel: Is the right hon. Gentleman aware that the last part of his reply will be warmly welcomed? Many of us feel that in the light of local government reorganisation there is a need to update the advice. The new social work authority in the Border area has already expressed concern to me about the practice of the electricity board in regard to demanding large deposits and in declining part payment of debts, which seems a sensible thing to accept and something that it ought to be doing.
    Mr. Millan: I shall certainly look into the latter point. However, the real answer is to have proper local consultation and co-operation. It will not solve all the problems but it will help considerably. Bad debts are a serious problem for the electricity boards. In so far as they arise through people just not being willing to face responsibilities even when they can, they fall on other consumers.
    Mr. Henderson: Does the Minister accept that there are many people on low incomes, particularly old people, who find it extremely difficult to run their electricity supplies with account meters? Why are the electricity boards set so strongly
    510
    against some form of prepayment meters, perhaps with the use of tokens instead of coins?
    Mr. Millan: As I say, in appropriate cases prepayment meters can be installed, but they have security problems. The South of Scotland Electricity Board is hoping soon to introduce two-monthly rather than quarterly bills, and perhaps monthly billing. There are various schemes, such as buying stamps and so on, which help consumers to save up, as it were, and not be faced with a bill all at once. A lot of work has been done on this problem, but it is a serious one for people on low incomes at a time of inflation.
    Mr. Rifkind: While agreeing with the Minister's distinction between bad debtors and those who fall into arrear through no fault of their own and cannot pay their bills, may I ask whether he accepts that there is no justification for the boards demanding advance payments from the latter category, irrespective of whether the person concerned has thought of approaching or been able to approach his social work department?
    Mr. Millan: If there are cases in which an electricity board has been unreasonable in demanding this deposit—which the boards are entitled to demand—I would hope to hear about them. I think that in most cases the social work department can help to clear up the matter.

    Forth Road Bridge
    Mr. Gourlayasked the Secretary of State for Scotland whether there was an increase or decrease in the number of cars using the Forth Road Bridge in March 1975 as compared with March 1974.
    Mr. Millan: The number of cars and commercial vehicles under 30 cwt, which are counted as a single category, rose from 536,000 in March 1974 to 589,000 in March 1975.
    Mr. Gourlay: Those figures are to some extent a little more encouraging than those indicated some weeks ago. Is the Minister aware, however, that on the Severn Bridge, where the toll charge for a car is 12p, one can purchase a book of 50 tickets with a 10 per cent. reduction and on the Tamar Bridge, where the

    511
    toll charge is 10p for a car, one can purchase a book of 20 tickets at half price? Therefore, as a first step towards the abolition of toll charges, will my right hon. Friend encourage the Forth Road Bridge authority to introduce some concessions of either 10 per cent. or 15 per cent. for regular users purchasing books of 40 tickets, which are available at present, which would produce an increase in local traffic and thus help local commuters between Fife and Edinburgh?
    Mr. Millan: I think that any proposals of that sort would have to come from the Forth Road Bridge Joint Board in the first instance. If the board were to put such proposals to me, I would consider them.
    Sir John Gilmour: Does the Minister agree that if season tickets or concessionary tickets for regular users were allowed, the other traffic would be able to make the crossing more quickly? I happen to know that a distinguished visitor who was going to Fife last weekend was held up for a long time before crossing the bridge.
    Mr. Millan: I dare say that it would speed up the traffic, but it would also reduce the revenue and that must be taken into account.
    Mr. Gordon Wilson: Does the right hon. Gentleman accept that the imposition of tolls on road bridges may have an adverse effect on the Government's energy-saving measures, as the tolls might well discourage the use of bridges by cars and lead to the use of additional petrol? Will he get rid of tolls on bridges, as I think the Labour Government said they would do in 1964?
    Mr. Millan: I have already made clear on previous occasions that I see no prospect at the moment of abolishing tolls altogether. The fact is that even with the tolls it is less expensive to use the bridges than to go the long way round.
    Mr. Fairbairn: Will the right hon. Gentleman explain why at vast expense the number of tolls has been increased by six and the number of people mantling them has remained the same, so that a majority of the tolls are normally shut, apparently regardless of the volume of traffic such as it to be found at the Royal Highland Show at Ingleston?
    Mr. Millan: I think that the hon. and learned Gentleman has raised this question with me before. I think the answer was that it was his Government who did it. However, if we are responsible in any way, I shall look into the matter.

    Rate Support Grant
    Mr. Monroasked the Secretary of State for Scotland what consultations he has had with the regional councils concerning the distribution formula for rate support grant; and if he will make a statement.
    Mr. Millan: For the 1975–76 settlement the usual consultations took place through the Local Government Finance (Scotland) Working Party. It has never been the practice to consult local authorities individually.
    Mr. Monro: Does the right hon. Gentleman realise that Dumfries and Galloway have lost over £2 million in rate support grant on account of the new distribution formula, which has pushed up the rates so that there has been a 150 per cent. increase? Will he say why rates in Scotland have not been cushioned in the same way as they were cushioned in England last year? Is it not time to take action, bearing in mind the anger of the ratepayers?
    Mr. Millan: It is true that the new distribution formula has meant that the Dumfries and Galloway region has had a comparative reduction in the rate support grant. That was a deliberate action because it was felt by the working party that Dumfries and Galloway had done rather well in the past. Even with these changes, the level of rates in the hon. Gentleman's area is still substantially less than in Scotland as a whole.

    National Front Meeting (Glasgow)
    Mr. Canavanasked the Secretary of State for Scotland whether he will call for a report on complaints about the conduct of the police at the National Front meeting in Glasgow on 24th May; and if he will make a statement.
    Mr. Harry Ewing: I have studied carefully the report on the incident of 24th May which I received on 29th May from the Chief Constable of Strathclyde. The investigation of the complaints that have

    513
    been made is, under present arrangements, a matter for the chief constable, subject to reference to the procurator fiscal in relation to those that involve criminal charges.
    Mr. Canavan: I recognise that in general the great majority of the police on the great majority of occasions provide a first-class public service and that they do so very often in difficult circumstances, but does my hon. Friend realise that on this occasion allegations of police misconduct were supported by many responsible members of the public and the Press? Would it not be fairer to the public, to the complainants and to the police if complaints of this nature were made the subject of a public inquiry instead of putting the police in the rather invidious position of having to act as judge and jury in cases of complaint against themselves?
    Mr. Ewing: I think that we should keep this matter in proper perspective. The approaches to my Department from the people to whom my hon. Friend has referred total only 19. The House will appreciate that there are many charges still pending and that these matters will be dealt with in the courts in the full view of public opinion.
    As regards the position of investigation into complaints against the police, the House will appreciate that in England and Wales my right hon. Friend the Secretary of State for the Home Department is at present conducting discussions with the police authorities. We have an undertaking with the police representatives in Scotland that if we move in that direction we shall consult them on the matter of complaints against the police. There is to an extent an independent element in the Scottish investigation in that in any prosecutions that arise the procurator fiscal is the deciding factor.
    Mr. Crawford: Is the Minister aware that one of those who took part in this disgraceful affair was a former Conservative candidate, and that the Conservative Party has done nothing to disown him?
    Mr. Ewing: When I look at the SNP bench, I note that former Conservative candidates find themselves in the strangest places.
    Miss Harvie Anderson: Is it not the primary duty of the police to protect people? Did they not do so very successfully on this occasion? Is it not a fact that the majority of people in Glasgow and the surrounding district are grateful for the way in which the police behaved on this difficult occasion?
    Mr. Ewing: I do not want to be seen to be taking sides in the matter in view of the fact that court proceedings are pending, but the appreciation of the people of Glasgow, and the people of Scotland as a whole, as regards the way in which our police in Scotland go about their duties in preserving law and order must be placed on record. We have a duty to uphold that situation.
    Mr. Buchan: Does not my hon. Friend agree that it is precisely because so many people accept that the police have been extremely good in the handling of public demonstrations in Glasgow—and many of the people who would admit that would be the demonstrators who were involved on the occasion in question—that something appears to have gone so wrong on this occasion, and that it would be in the interests of the police if there were to be a public inquiry?
    Mr. Ewing: The Chief Constable of Strathclyde appointed the deputy chief constable of another police force to investigate the complaints that were made. These matters will be discussed in public when the trials that are pending come before the courts, probably in September.
    Mr. Teddy Taylor: In view of the charges that are pending and in view of the disgraceful and uncalled-for sniping at the police today, will the Minister give us the simple figures and statistics, bearing in mind the allegations of police brutality? How many of the police received hospital and medical treatment after the event and how many of the demonstrators received such treatment? Does not the Minister think that it would help to give a proper indication of what happened if he would give us these figures which he knows and which are available?
    Mr. Ewing: I do not think that the hon. Gentleman should get over-excited about this matter. There is no indication in any of the questions that have been asked from either side of the House that

    515
    allegations are being made against the police. As regards the hon. Gentleman's point about statistics, I could not answer that question without notice. It is not fair to ask such detailed questions without giving a Minister notice of the statistics that are required. I give the hon. Gentleman the assurance that I shall write to him and give him the statistics if they are available.
    Mr. James White: Bearing in mind the colossal job that the Glasgow police undertake and what they did on this particular Saturday night, does my hon. Friend understand that as a Glasgow Member I resent the fact that policemen who are normally on duty in my constituent were tied up at Kingston Hall in taking care of 13 members of the National Front?
    Mr. Ewing: It has to be said that the use of police manpower is a matter for the chief constable and that the way in which he deploys his force is entirely up to him. Deployment should not be the subject of Government direction or intervention.

    Trustees' Accounts
    Sir David Rentonasked the Secretary of State for Scotland whether he is aware that trustees' accounts of charge and discharge, statements of intromissions and other documents prepared by or for trustees in Scotland are more elaborate than those required to be kept by or for trustees in England and Wales; and whether he will take steps to simplify and cheapen the Scottish system of keeping trustees' accounts.
    Mr. Harry Ewing: I am not aware of any general dissatisfaction with the present arrangements.
    Sir David Renton: Is the Minister aware that, although the Scottish legal system has many advantages over the English legal system, the English system makes it easier and much cheaper for trusts to be administered? I speak with experience as a trustee on each side of the border.
    Mr. Ewing: Yes, I accept that matters such as the accounts and the affairs of trustees are made much more elaborate under the Scottish legal system. However, we are not aware of any particular
    516
    difficulties. If the right hon. and learned Gentleman has any particular case in mind and if he cares to write to me, I shall consider the matter and help him all I can.

    The Borders
    Mr. David Steelasked the Secretary of State for Scotland if he will pay an official visit to the Borders.
    Mr. Millan: My right hon. Friend has no immediate plans to do so.
    Mr. Steel: That answer will be received with regret by my constituents, who were hoping to have an opportunity to ask the Secretary of State about the savage increases in rates in the Borders area and to hear his explanation.
    Mr. Millan: Of course, there have been increases in rates in the Borders and elsewhere, but some of the increases are a direct result of evening up the situation in one area compared with another. In some border areas the rate poundage was only 20p or 30p in the pound. In those circumstances I would have been astonished if there had not been a substantial increase in rates this year.
    Mr. Monro: Will the Minister accept that there are serious problems in the textile industry on the borders of South-West Scotland? Is he aware that many representations have been made to the Secretary of State for Trade about the use of Scottish names for overseas goods imported into the United Kingdom? This is an increasing problem and we are gravely concerned about the situation.
    Mr. Millan: Representations to that effect have been made to my right hon. Friend the Secretary of State for Trade and I have seen reports of that meeting. We in the Scottish Office obviously take an interest in the matter, and I shall pursue the point.

    Housing Developments (School Facilities)
    Miss Harvie Andersonasked the Secretary of State for Scotland, what is the estimated number of new houses which would have to be built in a catchment area where the existing primary school is full before a new school is built.
    Mr. Robert Hughes: The number of new school places required as a result of

    517
    new housing development varies according to circumstances and is affected, for example, both by geographical location and by the type of housing.
    Miss Anderson: That is a somewhat disappointing reply. Is not the Minister aware that one housing development is being refused on the ground that no school places are available and that unless a new school is built in the area progress will come to a standstill? Is not this a highly unsatisfactory position?
    Mr. Hughes: There are indicators of planning provision for schools. In the first instance it is a matter for local authorities when drawing up plans for an area with housing schemes, whether public or private, to put up for discussion subjects such as school provision. If the right hon. Lady has a problem in her constituency which she would like to raise with me, I shall be glad to discuss the matter or to correspond with her about it.

    Dundee
    Mr. Gordon Wilsonasked the Secretary of State for Scotland if he will pay an official visit to the industrial estates in Dundee.
    Mr. Doigasked the Secretary of State for Scotland what plans he has for increasing employment prospects in Dundee.
    Mr. Millan: I visited Dundee on 23rd June, when I had wide-ranging discussions on the unemployment situation with deputations from the district council and other local organisations. On 30th June, in answer to the hon. Member for Dundee, West (Mr. Doig), my right hon. Friend was pleased to announce the allocation of a 20,000 sq. ft. advance factory for Dundee.—[Vol. 894, c. 326.]
    Mr. Wilson: I am grateful for that information most of which is already known to me and to others. Will the right hon. Gentleman take it from me that in the period since his visit to Dundee there have been continuing redundancies and the threatened redundancies at NCR have now taken place? Will he now state when the proposed Civil Service jobs within the estimated figure of 80 to 100 will be announced in detail and when they will take effect in the form of employment? Is he also
    518
    aware that the helpful suggestion by the Government to deal with redundancies represents a drop in the ocean compared with the loss of industrial jobs affecting the constituency?
    Mr. Millan: I do not disagree with the proposition that the comparatively small number of Civil Service jobs falls far short of any solution to Dundee's problem. I have never pretended that it provided a solution. I hope that details will be announced within the next week or two and that jobs will be taken to Dundee as rapidly as possible thereafter. The situation in Dundee is worrying and a good deal of it is reflected in the general state of the economy. That is why I had to make clear in Dundee, as I do now, that the answer to the problem is to improve the general health of the economy. That is what the Government are attempting to do.
    Mr. Doig: Does my right hon. Friend agree that what is necessary above all else is to grant special area status to Dundee to allow it to compete on equal terms with other areas throughout the country in order to attract sufficient jobs to replace the large number of jobs which are being lost in the city of Dundee?
    Mr. Millan: I have already said that I shall pursue that proposal. I am bound to say that given the comparatively small margin between special development area incentives and ordinary development area incentives, which dates from the Industry Act 1972, I do not think my hon. Friend's suggestion would make a substantial difference to the situation. I shall pursue the point.

    Educational Deprivation Areas
    Mrs Bainasked the Secretary of State for Scotland if he will undertake a survey to determine which of the areas of multiple deprivation, as defined in the Department of Environment report "Census Indicators of Urban Deprivation" are also areas of educational deprivation, taking into account such factors as staffing shortages, part-time education and temporary accommodation.
    Mr. Robert Hughes: I do not propose to undertake a survey for this purpose. I keep a close watch on the problems of staff shortages, part-time education and

    519
    temporary accommodaion and am aware of the areas in which they occur.
    Mrs. Bain: Does the Minister agree, however, that there is an urgent need to define areas of educational deprivation since recent reports have shown that there is a close correlation between environmental deprivation and educational deprivation? Such a survey would readily identify those areas and point to remedial action which could be taken by the Government. Does the hon. Gentleman also agree that in face of existing evidence the Government's cut-back in expenditure on the school building programme and in other educational spheres shows up in a very bad light indeed?
    Mr. Hughes: I accept that there is a relationship between urban deprivation and educational deprivation, but the hon. Lady misunderstands the problem if she thinks that we do not know the areas of educational deprivation or have no understanding of them. There is no instant remedy for the problems in those areas, and it would be wrong to suggest otherwise. The Government are still spending more on education in the current financial year than has been spent in previous years. We shall do all we can to see that what money is available is used to remedy deprivation.
    Dr. Bray: Is my hon. Friend aware that one of the areas that is well known for educational deprivation is North Forgewood, Motherwell? Will he consider in such areas making money available for special proposals to improve relations between schools and local communities, which is often a source of difficulty?
    Mr. Hughes: That is an interesting suggestion, but we must accept that there are dangerous teacher shortages in areas of educational deprivation. It is a problem which has bedevilled the Scottish education system for a decade. Every effort has been made to try to get teachers to go to areas where there is a shortage of staff. The additional sum of £1¼ million made available by the Government to attract teachers into areas suffering staff shortages is still available, as is other money, if the teachers will get down to negotiating a system of incentive payments to help transfer teachers to those areas.
    Mr. Rifkind: Does the Minister realise that all Conservative Members wish to dissociate themselves from the disgraceful suggestion made by the hon. Member for Dumbartonshire, East (Mrs. Bain) last week that the Labour Party wish to keep poverty and deprivation in West-Central Scotland? Will he say what response the Government intend to make to requests by local authorities in West-Central Scotland for help to be given in those deprived areas?
    Mr. Hughes: I am disappointed that the hon. Gentleman should repeat the suggestion made by the hon. Member for Dumbartonshire, East. It is not worth repeating.
    In regard to special measures, we are in the process of allocating financial resources to areas of greatest need. This means that some areas will not be able to expand as fast as they would have liked to expand in order to ensure that areas which are experiencing difficulties will obtain the means to carry out a determined attack on educational deprivation.

    Fishing Industry
    Mr. Sproatasked the Secretary of State for Scotland what recent discussions he has had with representatives of the Scottish fishing industry.
    The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): I have nothing to add to my right hon. Friend's reply on 11th June, and mine on 18th June to the hon. Member.—[Vol. 893, c. 187–8 Vol. 893, c. 442.]
    Mr. Sproat: Although the fishing industry is grateful for the attitude shown by the Minister, may I ask whether he is aware that the situation in the industry is becoming desperate? Does he appreciate that the average prices were down by 10 per cent. on last year, that costs are still rising and that 25 per cent. of the STF is now tied up or has been switched to oil activities? Will he say something about the extension of the subsidy? Will he persuade the Department to pay out as soon as possible the subsidy to smaller owners, who are experiencing severe cash flow problems?
    Mr. Brown: I assure the hon. Member that there will be no delay in the actual payment. Obviously we shall have to

    521
    wait until the end of July before the claims can be paid. Against the background of the general state of the industry and the economic situation, we are urgently studying applications from the industry. As my hon. Friend said on 30th June, we hope to make an announcement about this as soon as possible. We also look with some degree of, perhaps, hope to the recent decision on producers' associations. That may make some marginal but perhaps helpful contribution to the prices that might be expected in the various fish markets.
    Mr. Campbell: In the overall context of the fishing industry, is my hon. Friend still receiving complaints about illegal trawling in the waters of the Clyde and off the West Coast of Scotland? Is he satisfied that the transfer of the fishery protection vessel "Jura" to oil-protection duties in the North Sea will not cause a further deterioration in the situation off the West Coast of Scotland?
    Mr. Brown: I have not received any recent representations about the Clyde. However, I point out that the fishery protection vessel, which will be performing other duties, was never intended for use in the Clyde. Therefore, there is no change in or limitation upon the existing facilities in the Fishery Protection Service.
    Mr. Watt: Has the Minister given further thought to the introduction of a scrapping subsidy, which would enable the sections of the fishing industry which want to get out to do so without too much loss of income?
    Mr. Brown: Strange as it may seem, I am always willing to give further thought to anything that the hon. Member for Banff (Mr. Watt) says. [Interruption.] That is possibly because he does not come up with many good ideas. However, it is far too soon to talk about a scrapping subsidy when there is a long-term future for the industry. I do not think that the use of such exaggerated phrases is helpful when we must sit down and look at the possibilities for the future of the industry.

    Rates (Rural Areas)
    Mr. Fairbairnasked the Secretary of State for Scotland if he will make a statement on the effect of regionalisation on the domestic rates in rural areas in Scotland.
    Mr. Millan: The effect of regionalisation generally is to reduce disparities in rate poundages between one area and another.
    Mr. Fairbairn: Does the Minister appreciate that in many towns and villages in rural Scotland, such as Cried in my constituency, the increase in the rates after regionalisation was between 75 per cent. and 100 per cent.? Is he aware that these are areas which have practically no public services? Does he appreciate that the Socialist concept that we should, in his own words, even everything out merely punishes those who have the smallest income and the fewest services and distributes an equal share of the misery?
    Mr. Millan: This position arose from the Conservative Government's Local Government (Scotland) Act 1973. I am not sure whether that was a Socialist concept. Last year Crieff had a rate as low as 59p in the pound and Kinross County had a rate of only 38p in the pound. Naturally, with regionalisation some of these areas are bearing disproportionate increases. All of this was anticipated and, indeed, inevitable in local government reorganisation. It was the Government of the hon. and learned Gentlemen's party who introduced this.
    Mr. Buchan: Will my right hon. Friend at least show some sympathy to the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) and do something to alleviate the level of rates for those living in castles?
    Mr. Millan: I should think that they are probably already derated.
    Mr. Teddy Taylor: Does the Minister agree that when a similar emergency arose last year in England and Wales at the time of local government reorganisation, the Government introduced a special scheme to help ratepayers suffering increases of over 20 per cent.? Because it was an English emergency, only a small part of the cash came to Scotland. Why has the Minister failed the ratepayers in Dumfries and elsewhere who are facing savage rises? Why will he not fight and obtain a similar scheme for them this year?
    Mr. Millan: I have already explained this in the Scottish Grand Committee last week. Even after the introduction of the

    523
    scheme, which applied to Scotland as well as England, the increase in rates for the domestic ratepayer in England was 17 per cent. compared with 14·9 per cent. in Scotland. The rate support grant settlement this year in Scotland, which was unprecedentedly high—the gap between Scotland and England has again been widened to 8½ per cent.—was meant to produce for Scotland the same overall rate increase as in England, namely 25 per cent. In those circumstances I have made it clear that it is not the Government's intention to introduce any further relief. I have said this to the local authorities and they have accepted it.
    Mr. MacCormick: Does the Minister appreciate the incredible hypocrisy of the Conservative Party in raising this question when they were guilty of the heinous shameful crime of overturning the Wheatley Report and placing Argyll in the Strathclyde Region?
    Mr. Millan: The hypocrisy of the Conservative Party never astonishes or surprises me.
    Mr. Galbraith: is not the Minister's reply a typical example of double talk? Does it not mean that the rates have gone up? Can he tell us whether the reorganisation of local government—producing, as it has done, increased rates—means that when the government of the country is reorganised and an assembly is set up the taxpayer will find that he has to pay additional taxes?
    Mr. Millan: Of course rates have gone up. If the hon. Gentleman had attended the Scottish Grand Committee last week, he would have heard the matter debated at great length. I see that he is indicating that he did attend. He was unnaturally quiet if he did so.

    School Leaving Date
    Mr. Lambieasked the Secretary of State for Scotland if he is now able to announce his decision on the representations made to him on the question of allowing pupils to leave school on their sixteenth birthday in Scotland; and if he will make a statement.
    Mr. Robert Hughes: The review of school leaving date arrangements which my right hon. Friend announced on 14th January is not confined to the question of
    524
    allowing pupils to leave school on their sixteenth birthday. The implications of different courses of action suggested to me are at present under consideration.
    Mr. Lambie: Is my hon. Friend aware that his right hon. Friend the Secretary of State for Education stated on 24th June and confirmed yesterday that it is the Government's intention to introduce a mini-Education Bill in the autumn which will include a clause to allow pupils to leave school on their sixteenth birthday? Will my hon. Friend confirm that this policy will apply to Scotland?
    Mr. Hughes: I am aware of my right hon. Friend's decision about a mini Education Bill. I understand that the summer leaving date will be brought forward to Easter. This does not affect the question of allowing children to leave school on their sixteenth birthday. The policy of bringing forward the summer leaving date does not apply to Scotland because we are having a much more fundamental review. A number of different options have been canvassed. We shall study those options and come to a conclusion as soon as possible.
    Mr. David Steel: Is the Minister aware that there is great disappointment that consideration of allowing pupils to leave school on their sixteenth birthday was not completed in time for the summer holidays, when a large number of pupils will be affected? Is he aware that parents in my constituency have pointed out to me that if they register their sons and daughters with relatives on the other side of the border for a week in June, some of these children can leave school because of the discrepancy over the autumn starting date between the two areas? Is it not time this nonsense was ended?
    Mr. Hughes: It does not only apply if people register their children on the other side of the border. If children are registered in schools in different education authorities, there are different dates. The position in Scotland is different from that in England. At present the local authorities also set the leaving date. There is a lot of controversy about whether children should be allowed to leave at 16. When I say 16 I mean their sixteenth birthday. Among the things that have been suggested is that there should be more than two leaving dates to spread the anomalies.

    525
    I am sure the hon. Gentleman understands that the anomalies existed when the school leaving age was 15. The fact that it is 16 has made it no worse, except, of course, that some children want to leave early because it is the school leaving age.
    Mr. Selby: Is the Minister aware that an anomaly arose in my constituency last year? A constituent of mine informed me that his son's birthday fell the day after the school recommenced. The boy had a job but could not take it because his birthday was one day late. Why should people have to wait? Why cannot we say that when someone is 16 years of age and if he has a job he can go ahead and take it?
    Mr. Hughes: Because we believe that there is educational advantage in rounding off children's education. There will always be anomalies with a fixed leaving age whether it is 15 years of age or 16. There is a tendency to get this matter out of perspective. It leads to the suggestion that the school leaving age should be lowered to 15, because children can get a job at 15. If we reduce it to 15 we shall have the same anomalies and people will ask "Why bother with the school leaving age at all?" There are very great educational advantages in children staying at school. To solve the problem by saying "Let them leave whenever they can" would simply not be facing up to the realities of the situation.

    List D Schools
    Mr. Buchananasked the Secretary of State for Scotland what is the waiting time for admission to senior, intermediate and junior List D schools; how many pupils are on the waiting lists for each category; and what are his plans for extending the service.
    Mr. Robert Hughes: The period is usually between two and five months for senior and intermediate schools and from one to three months for junior schools. On the waiting lists at 22nd June were 207 children for senior schools, 156 for intermediate schools and 93 for junior schools. Extension schemes due to be completed this autumn at existing schools will provide 69 additional places.
    Mr. Buchanan: Is my hon. Friend aware that I am grateful for that reply, which gives some indication of the seriousness of the problem? Will he seek to introduce into the service a system of flexible intermediate treatment centres to receive youngsters whose sole crime is playing truant? Is he aware that social work panels send these children to approved schools, which cannot always take them because others are committed there for more serious misdemeanours? Is he further aware that these children continue to play truant and eventually qualify for these approved schools by committing a misdemeanour? Is it not possible to set up these centres quickly?
    Mr. Hughes: I am glad that my hon. Friend has drawn attention to the desirability of intermediate treatment centres. I have had discussions with a number of local authorities, managers of List D schools and directors of social work about this. I believe that there is now a much greater awareness of the desirability of operating these centres. As my hon. Friend will know, Springboig St. John is at present making an application to the Department in this connection. I commend those who have brought forward this imaginative proposal.
    Mr. Teddy Taylor: Does the Under-Secretary agree that the figures he has given underestimate the problem because there are many cases when social work panels have not referred children to these schools because they know that they are full and that there is a waiting list? Would he not agree that the work of the social work panels is being substantially undermined in view of the acute shortage of places in List D schools?
    Mr. Hughes: I do not think that the hon. Gentleman can state with such certainty that panels are refusing to put people on the waiting list for List D schools because of the difficulty in getting a place. What we have done is to make a thorough review of the waiting list situation. The present list of 456 has been reduced to that figure from the figure of 726 at which it stood in March. It was discovered that a number of applications had been left on the list when other measures had been taken. We now have a true list. There is, of course, pressure on the List D school system,

    527
    but I do not accept that we are anywhere near breakdown point or that the situation is anything like as serious as the hon. Gentleman suggests.
    Mr. Gordon Wilson: Does the Minister admit that, despite the improvement in the figures, the severe shortage of accommodation must be undermining the whole system of the juvenile panels and that the system is coming under attack from members of the public, whereas the real problem is the shortage of facilities available to the panels to which the children can be sent when circumstances so demand?
    Mr. Hughes: It is a question of where the circumstances so demand. It is quite wrong to assume that the only treatment desirable or needed for a youngster in trouble is placement in a List D school. If we take a youngster for a limited period out of the community in which he lives and then send him back into that environment, he has to face the difficulties of readjustment. If we can deal with youngsters in trouble by giving intermediate treatment, which means trying to find a solution within the environment and the community from which they come, that is a far better solution. I accept, however, that there are children for whom a List D school place is the only answer. We are increasing the number of places, but I do not think we can say that List D school places are the only answer to the problems of juvenile delinquency.

    LAW REFORM
    Mr. Gordon Wilsonasked the Lord Advocate if he will draw up a comprehensive programme for law reform for presentation to the Scottish Assembly.
    The Lord Advocate (Mr. Ronald King Murray): There would seem little point in drawing up a detailed programme of work until the precise extent of the Scottish Assembly's responsibility is determined and its constitution agreed. The Government, however, remain alert to any opportunity that offers for the introduction of law reform measures, whether by this or any other means.
    Mr. Wilson: Does the Lord Advocate accept that there will be some disappointment over that answer because there has been a clamant need for parlia-
    528
    mentary time to debate Scots law reform over the past few years? Is he aware that there is a good deal of discontent in the country and in the legal profession because of these delays? Will he further accept that failure to find time has resulted in an inability to get the Divorce Law Reform (Scotland) Bill through the House? Does he agree that a Scottish Assembly will provide the opportunity to deal with law reform in a more general way and also give us time to deal with the much-needed reform of the registration of title system?
    The Lord Advocate: There can be little doubt that a reasonable devolution arrangement should give greater time for Scottish law reform. This would be generally welcomed in Scotland. I would have thought that the people of Scotland understand very well that if we are to have a proper and workable system of devolution which will be stable and lasting and of benefit to them, we do not want to go chasing after detailed programmes in advance, seeking to do for the Assembly what it ought to do for itself.
    Mr. Gourlay: Does my right hon. and learned Friend agree that any suggestion for reforming Scots law coming from the Scottish National Party is a gross impertinence since it was the hon. Member for the Western Isles (Mr. Stewart) who first prevented the Divorce Law Reform (Scotland) Bill from making progress in this House? Will the Lord Advocate facilitate the passage of a similar Bill which is likely to arrive in this House from another place this week?
    The Lord Advocate: My hon. Friend is right to say that obstruction by individual Members has prevented further progress in this area.
    Mr. David Steel: Can the right hon. and learned Gentleman confirm the principle that law reform will become a matter for the Scottish Asesmbly?
    The Lord Advocate: I cannot confirm any such principle at the moment. Obviously, at present all aspects of future legislation with which the Scottish Assembly may deal are under consideration. The Government hope to publish a White Paper in the autumn setting out their proposals. The hon. Member can take

    529
    it that this matter has been of concern to me and other members of the Government and that its importance will not be overlooked. There is a certain sense in which it is obvious that the setting up of a Scottish Assembly will give greater time for Scottish law reform proceedings.

    RAPE
    Mr. Fairbairnasked the Lord Advocate if he is satisfied with the law of rape in Scotland and the penalties applicable to those convicted of rape.
    The Lord Advocate: Yes. My deputes who have prosecuted such cases recently do not report any problems.
    The maximum penalty for rape is life imprisonment. No such penalty has been imposed this year. The penalties imposed range from four years' imprisonment to 10 years' imprisonment. One accused was committed to the State Hospital in terms of the Mental Health (Scotland) Act 1960 and in another case the accused was sentenced to two years' probation. Clearly the judges discriminate according to the circumstances of each particular case.
    Mr. Fairbairn: In view of the appalling difficulties which the English appear to have in dealing with this comparatively simple crime and the great ease with which, as the Minister has told us, we in Scotland deal with it, may I ask whether the right hon. and learned Gentleman could fit into his busy portfolio a word with the Attorney-General to advise the English how to administer justice with regard to rape without these difficulties, so that the people of Scotland can be spared having to pay their taxes to meet the cost of absurd inquiries before Mrs. Justice Heilbron or whoever is to conduct such an inquiry?
    The Lord Advocate: The hon. and learned Member's observation will no doubt be read by the Attorney-General. If it is necessary to make any further representations to him, I shall be happy to do so. I certainly agree that in this area the law of Scotland appears to have a point of view which is understood by the people and is of a commonsense nature. I believe that this area of the law, among others, is not assisted by artificiality and over-elaboration.
    Mr. Crawford: When will the right hon. and learned Gentleman tighten up
    530
    the law of rape, particularly as it affects the rape of Scotland's oil? Does he not agree—
    Mr. Speaker: Order. I do not think that that point arises out of this Question.
    Mr. Rifkind: Does the Lord Advocate agree that the independence of our judiciary has to be maintained at all costs? Can he gives the House an assurance that if any controversy arises in Scotland similar to that which arose south of the border with regard to sentencing for rape or any other crime, he will strongly resist any suggestion to interfere with the security of tenure of members of the judiciary which may come from Members of Parliament or other individuals who happen to disagree with the sentence imposed?
    The Lord Advocate: I agree that the independence of the judiciary is a basic constitutional principle of the greatest importance which must be upheld if we are to continue to be a constitutional democracy. On the other hand, it is also a facet of constitutional democracy that just criticism should be made by the public when they are outraged.

    VIOLENT DEATH (PRE-TRIAL INVESTIGATION)
    Mr. Monroasked the Lord Advocate if he is satisfied with the Scottish system of pre-trial investigation of the cause of violent death.
    The Lord Advocate: Yes, Sir.
    Mr. Monro: May I congratulate the right hon. and learned Gentleman on his first satisfactory answer today? May I also suggest that he should have a meeting with the Lord Chancellor and impress upon him the fact that we have a satisfactory system in Scotland which does not involve the public allocation of blame upon persons yet to be charged with an offience?
    The Lord Advocate: I think that I can again answer "Yes" to that question.

    VIOLENT DEATH (PRE-TRIAL INVESTIGATION)

      STATUTORY INSTRUMENTS
      Ordered,
      That the draft Assistance for House Purchase and Improvement (Increase of Subsidy) Order 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. James Hamilton.]

PARLIAMENTARY ELECTIONS ACT 1695 (AMENDMENT)
3.33 p.m.
Mr. Greville Janner: I beg to move,
That leave be given to bring in a Bill to amend the Parliamentary Elections Act 1695.
The purpose of the Bill is to permit people under the age of 21 but over the age of 18 to stand for Parliament and, if fortunate enough to be elected, to represent those who have seen fit to elect them.
The Act is now some 300 years old, it does not reflect the current state of the law in other respects, nor the feelings of the vast majority of people, nor, indeed, the views of the majority of the Speaker's Conference which recommended that the law be changed in this respect.
A person who is 18 has now nearly all the rights and responsibilities of any other adult. He may make contracts, he may engage in business, he may be called up for military service and fight and be killed in the service of his country, he may vote, and he may sit on juries. He has full responsibilities, but he may not stand for election to this House.
Where a person takes a full part in the life of the country in which he pays his taxes, works, and is treated as an adult in almost every other respect, it is totally illogical, wrong and out of date that he should be prevented from serving in this House if he is elected thereto.
If this very modest Bill were passed—producing, as it would, a one-sentence amendment to an Act which is printed in such a form that one can scarcely read it—it would not have any disastrous effect. People at the age of 21 have the right to sit in this House, but I see about me very few Members who come within striking distance of that age. We have very few who are under 30. There is possibly only one who is under 25. There is one hon. Member on the Liberal benches who was under 25 when elected but is now ageing, along with his party. Now that there is a right to sit at 21, we are now starting to get people at 25, and more often at 30. If the age is reduced
532
to 18, people will then be able to join in the parliamentary battle at that age, but it does not mean that they will be elected to this House, or that they will find any party likely to put them forward as a candidate for any seat which could be regarded as safe in anyone's wildest dreams.
What is likely to happen is that there will be a greater involvement of younger people. There will be some who will be adopted to fight seats, and there is a possibility that some day one or two, or possibly three, might be elected, which would hardly produce catastrophe for the House. It would certainly introduce an element of youth, and perhaps we could do with that.
Even if this Bill were to succeed in getting through the House in this Session, or a future Bill in a future Session, it would, in effect, do nothing more than what was proposed as a result of the Speaker's Conference. That conference was announced in August 1972, it began work in March 1973, and it reported in July 1973, by the vast majority of 10 to eight, that the minimum age of candidature for parliamentary elections should be lowered from 21 years to 18 years. That recommendation was buried along with that Parliament, and has returned to the archives, along with the incredible Act of 1695 which I am having the temerity to seek to amend.
I believe it is right that young people of 18 should have the entitlement to sit in this House if they are elected, and that it is wrong that they should be prevented from so doing.
Question put and agreed to.
Bill ordered to be brought in by Mr. Greville Janner, Mr. Richard Crawshaw, Mr. Geraint Howells, Mr. Giles Radice and Mr. Anthony Steen.

PARLIAMENTARY ELECTIONS ACT 1695 (AMENDMENT)
  PARLIAMENTARY ELECTIONS ACT 1695
  Mr. Greville Janner accordingly presented a Bill to amend the Parliamentary Elections Act 1695: and the same was read the First time; and ordered to be read a Second time upon Friday next and to be printed. [Bill 203.]
ORDERS OF THE DAY

  SUPPLY
  [25TH ALLOTTED DAY]—considered.
  Motion made, and Question proposed, That this House do now adjourn.—[Miss Margaret Jackson.]

ROYAL NAVY
3.37 p.m.
Mr. George Younger: We come to the fourth and last, for the moment, of our debates following the introduction of the Government's White Paper some months ago. This is the last of the three Service debates. We have already covered the Army and the Air Force, and in those debates the Opposition produced strong criticisms of the cuts which the Government have proposed. Today the House is being asked to approve the Navy Estimates, as a result of the White Paper, which the Opposition can only ask the House to look at with very great disapproval indeed.
These Estimates, in the face of the facts and figures spelled out so clearly in the White Paper, propose to cut by one-seventh the strength of the frigates and the mine counter-measure vessels, by a quarter the conventional submarines, and by a staggering one-third the fleet support vessels. The Opposition resist these cuts, and I propose to spell out as briefly as I can why we do so.
Many of my hon. Friends wish to speak in this debate. I cannot attempt myself to cover the whole field and the many interesting things shown in the Navy Estimates, but I want to concentrate on where I believe the real threat lies to the future defence of this country.
The cuts proposed for the Navy are by a long way the most damaging in the White Paper, and they are being proposed in the face of every piece of evidence that has been produced and spelled out in the White Paper, everything that has been produced by naval and military opinion since, and by all our NATO allies without exception. They contain in them the most clear and specific warnings to this country.
The history of military affairs has been scattered with warnings right through the centuries—warnings heeded and warnings
534
unheeded. We need not look back any further than the memories of our fathers of the warnings which were given before the attack on Pearl Harbour, and of the copious warnings given to Stalin in 1941 that he was likely to face an attack from the Germans, to which he totally refused to pay attention.
If some more up-to-date evidence is required, there was a television programme a few weeks ago, in which Lord Chalfont took part, and in that programme if was shown rather graphically that the Israel Government now clearly recognise, as their Prime Minister has said, that in 1973 they, too, had the clearest warnings of the attack that was coming and failed to take note of them.
It would be easy for the House of Commons and this country to ignore the warnings before us now, but if these warnings are ignored it will not be the fault of this Opposition. We wish to spell this out as clearly as we can.
It seems to me that it would be fair to approach this debate against the Government's own background. The Government have said that it is our top priority in defence to make our proper contribution to NATO. I accept that entirely for this argument, and I propose to demonstrate and, I hope, prove to the House that it is on the Government's own chosen ground that the proposals to cut the Royal Navy fall so far short of what the Government themselves say is necessary.
I do not suggest that we should go back to some pre-war or Imperial rôle. I do not suggest that we can any longer expect the Royal Navy to police the seas of the world, and I hope that we shall hear none of that from Government supporters, because that is not what I am suggesting.
When we consider what we need in naval defence, whether it is NATO or the United Kingdom, we have to give some account of the nature of the conflict that we might be called upon to face. In this, there is always uncertainty. No war is ever like the previous war. No enemy lets us know before hand what means he will employ to attack us. Therefore, in any sensible scheme an allowance to cope with the unexpected is essential.
It could be that a future conflict—which is a horrifying thought in any event

535
—took the form of a very short and sharp exchange of the most terrifying weapons available. We hope and pray that that will never happen, and obviously we shall do all that we can to avoid it. But that is the sort of conflict which could happen. However, we cannot rely on that, and that alone, being the only military problem that we have to face. We have to allow for the fact that many potential enemies may shrink from such a conflict, as we should ourselves. Therefore, we have to provide for a lesser level of interference or attack upon us. We have to provide for some element of reply to a normal conventional attack, possibly on a small scale, but possibly on a larger scale more difficult to cope with.
Although I am glad that the Government have carried on our Polaris submarine force and our co-operation with the Americans in providing that deterrent, that is not and cannot be the main and only leg upon which our defence rests. Therefore, we have to address ourselves to the problems that this country would face if we had a conflict which was longer than a few hours or a few days.
It seems to me to stand out clearly that, here, it is the maritime side of our defences which are not only important from the point of view of Britain but are the most natural and useful contribution that we can make to the NATO Alliance, which is the only forum in which we can hope to defend ourselves against any major attack. If nothing else, is clear that we in this country depend every bit as much today as we ever did in the past on the keeping open of our sea routes which our trading ships use and over which the raw materials which keep us going are brought in.
In any conflict, even on a small scale, which lasted more than a few weeks or even possibly a few days, we should have to allow for the fact that we needed forces to keep open our sea routes. Some people say that this is now out of date. They imply that no longer do we depend, as in the past, on sea routes being kept open. But I ask anyone who says that to produce evidence to suggest that we are less dependent today on our sea routes than in the past. Is there any evidence that we are less reliant on shipping for bringing in our imports and taking out our exports? Do we rely less today than
536
we did in the past on raw materials? Of course not. We rely on them as much as we did in the past.
Every 24 hours, there are 120 oceangoing ships arriving at North-West European ports with vital materials. They bring into North-Western Europe a staggering 700 million tons annually of vital supplies of one sort or another. Two-thirds of that is oil, which itself provides more than half the energy of North-Western Europe, and there is no country in Western Europe at present which has more than two to three months of stockpiles of oil, and for practical and tactical reasons it is very difficult to envisage this being raised by any substantial amount by means of increased storage capacity.
In case this is thought fanciful, we saw in 1973 what happened to the economy and to the jobs of people in this country when vital supplies of oil were interrupted. Within two to three weeks of the interruption, there was rationing of oil for industry, and factories had to think of methods of going on short time to deal with the shortages which arose.
It is fanciful to imagine that we can ignore these facts and provide defence arrangements which do not allow for the adequate defence of our sea routes. It is not only in matters such as oil. There are vital supplies of metals, iron ore, foodstuffs, timber and all sorts of other commodities without which our economy would fall by the wayside.
What is more, it is not only a question of trade, because in any possible international tension where NATO might be preparing to do battle with an aggressor, we have to remember that the whole NATO strategy is based upon the principle that, within the last few days or weeks when tension is building up, there is a massive reinforcement of the forces at present in Central Europe from this country and from across the Atlantic. Here again, the need for sea routes is clear and vital.
What is the threat to this which is posed today? It is all in the White Paper. The Secretary of State has spelt it out in all its clear detail in the White Paper. For those who do not wish to know the details, there is a chart or plan on page 6 of the White Paper to show the disparity.

537
Perhaps I can make it clearer by concentrating for a moment on the naval side alone. The new factor in the last five years is that the Russian Navy, from being a comparatively small and inward-looking naval force able to look after Russian interests, has become a powerful, aggressive, ocean-going, outward-looking force. It is a large and powerful force. It has very modern equipment, weapons and ships, and it is scattering itself all over the world. If we are in doubt about that, we have only to see the bases which the Russians are building in all the oceans to ensure that if they go forth from the normal waters round their homeland, they have supplies to keep them going.
It is this powerful new element, clearly designed for aggressive intent against anyone—we do not know with any clarity against whom—which NATO cannot ignore.
I could go into some detail about many of the sea routes with which we have to deal. I cannot do that because of the time available. But I must mention the longer-distance routes outside our home waters. We still depend massively upon oil imported from the Middle East. There is no sense in pretending that that is not so. At the moment and at every moment there are 200 tankers at sea in the Indian Ocean bringing oil from the Middle East to Western Europe. In the face of that, the blindness of the Government in disregarding and breaking the Simonstown Agreement without taking the trouble to make alternative arrangements for this vital trade route seems incredible. If I had been in the shoes of the Secretary of State at this stage, I should never have done anything like that. But we have to face the fact the right hon. Gentleman and his Government have done it and that there is no going back on it. We cannot recreate an agreement broken in this way.
Therefore, it is all the more essential that the British Government should now take a lead in persuading our NATO allies to take a positive view of planning and of taking notice of the vital interests of NATO in keeping open these sea routes south of the Tropic of Cancer. I hope that the Government will take a lead in trying to get their NATO allies to take this step.
538
The southern flank of NATO is causing much concern to our allies, yet the Government have announced the withdrawal of our permanent naval force from the Mediterranean. I hope that the Secretary of State will understand that it is not the physical presence of particular ships that is so important; it is the political importance of a British naval presence which makes it so much easier for our allies, who provide the main body of the naval force there and always will provide it. The Secretary of State has said, under pressure from our NATO allies, that he will arrange for British ships to take part in exercises in the Mediterranean. I hope that he will do that and that the navy will play a full and enthusiastic part in any further exercises there.
But it is the northern flank of NATO which is by far the most important from our point of view and it is here that the disparity is greatest. We have all read or heard of the submarine battles in the last war that nearly succeeded in bringing our economy and our defence effort to a halt. At the height of the Germans' submarine power, they had a maximum of 200 submarines to deploy against us and we had 400 anti-submarine escort vessels to deal with the threat. We know how near we came to failing to counter that threat. It is agreed by all naval experts that even today a superiority of six to one between anti-submarine vessels and submarines is necessary to be sure of being able to cope with any threat.
The Soviet submarine fleet, which is by far the largest the world has ever known, totals more than 385—excluding those fitted with inter-continental ballistic missiles. Let us suppose that only half of them—and that is quite a supposition—were pitted against us and the northern flank of NATO. What anti-submarine vessels do we have in NATO to deal with that? There are 58 in the United Kingdom, 24 in the Netherlands, perhaps half the French fleet, which would total 21, seven from Norway and two from Denmark—a total of 112 anti-submarine vessels to deal with, at a conservative estimate, 200 submarines.
Against that background and military opinion that a superiority of six to one is needed to cope with a submarine threat, any Government ought to think

539
hard about allowing such a situation to continue. I have not even mentioned the fact that the whole North Sea area has assumed a new importance because, in a year or two, we shall be largely dependent on it for half our supplies of oil.
I do not have the time to talk about the drastic reduction of about half in our amphibious force, disapproval of which has been clearly stated by our NATO allies, and also no time to talk about the effects on our construction yards of the cuts in the naval building programme which must follow the severe reduction in the number of our ships at sea.
I hope that these facts, and the rapid survey which I have carried out of the disparity between the forces at our command and the forces likely to be put against us in the vital business of keeping open our sea routes, will be enough to make any Government think twice. I hope that the Government will agree that the military case which I have made is reasonable. They may then ask where the money is to come from to avoid these cuts.
It is not a question, even under this Government, of no money being available. The Government wish to spend it on other things and they must defend their actions in so doing. It is a question of priorities. The Community Land Bill, which is going through Parliament, is expected to cost between £300 million and £400 million in its first year of operation. Does the Secretary of State think that that Bill is more important than having a Navy which can keep open our sea routes? That is the question which he must answer. The White Paper states that the savings in 1975–76 will be about £300 million. Contrast that with the proposal to spend £300 million or £400 million on a Bill that at least half the country, probably more, does not even want.
In the following year, savings are expected to be about £270 million. We are spending £530 million a year on food subsidies. Is it more important to spend this amount on food subsidies than to have an adequate Navy to keep open our trade routes? I would find it very strange
540
if the Secretary of State made a statement that it was.
It is not a question whether the Government have the money. The Government do have the money, but they are spending it fast on many other things. The Navy Estimates are the result of a review by the Government which took more than a year. It is not a question of it being a rush job or of the Government not having time properly to carry out the review. These Estimates are the product of all the careful assessments of which the Government are capable. It is an assessment which the Opposition considers to be fatally misconceived.
The White Paper proves that the threat facing NATO is strong and increasing every week. It emphasises that Britain's main rôle in defence is our contribution to NATO and that our defence must be seen as part of the defence of Western Europe by NATO. The White Paper flies in the face of its own logic and responds to this situation by announcing major cuts in our naval contribution.
All this has been condemned in polite but devastating terms by all our NATO allies, by virtually all expert military opinion and by a vast majority of Press and public opinion. The ink was not even dry on the White Paper when the Government without rhyme or reason, coolly announced further cuts of £110 million. We still do not know the precise details of these cuts.
It would be easy for the Opposition in the face of the truly dreadful economic mess into which the Government have plunged us to let these Estimates pass as an inevitable result of an incompetent Socialist Government that is running out of money, but we cannot ignore what every one of our allies in Western Europe recognises. Unless NATO and its member nations wake up to the threat that is now so glaringly obvious, we may lose our ability to defend our nation from a slow death by the strangulation of the nation's trade.
This is a question of priorities. We Conservatives put our national defence at a much higher priority than does the Labour Party. It is appropriate to leave that old protagonist of mine, the hon. Member for Fife, Central (Mr. Hamilton),

541
to put his finger, as he so often does, right on the spot. He said last month,
"It is my view and the view of most people that the health service is as important to the defence of this country as is the Army, the Navy or the Air Force."—[Official Report, 17th June 1975; Vol. 893, c. 1249.]
Perhaps the best answer to this can be given in the words of Somerset Maugham when he said
"When a nation values anything more than freedom it will lose its freedom—and the irony of it is that, if it is comfort or money that it values more, it will lose them too."
I therefore ask my hon. Friends this evening to vote against these estimates in which the Government are weakening the vital defence of this country.
4.2 p.m.
The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): It is always a pleasure to follow a speech by the hon. Member for Ayr (Mr. Younger) because, in spite of the illogicalities and imperfections in his case, nobody could question his sincerity and his commitment to the nation's wellbeing. We may differ deeply on how we can best serve that well-being, but his sincerity is not in doubt. I shall develop my answers to the points he has made in the course of my speech, but I must make a couple of observations before his words disappear into the ether.
I begin by accusing the hon. Member of being guilty of that old game of the Opposition—humbug. I have listened carefully to the suggestions which he has made for cuts in public expenditure, and even if I were to accept that his suggestions were candidates for cuts—which I do not—the total of the sums he mentioned was only £930 million at the outside. The right hon. and learned Member for Surrey, East (Sir G. Howe) has gone on record as saying that the nation's difficulties can be solved only if we make cuts in public expenditure at the level of £4,500 million. The Government would like to know, and have never been told by the Opposition, precisely how the gap between the £930 million and the £4,500 million would be bridged.
In substantiating my claim of humbug it is worth pointing out that the Conservatives were still in office in 1973 shortly before the General Election and faced economic difficulties which were not so severe as those confronting the
542
country when the full pressure of the oil crisis was upon us. Even so, they initiated cuts of £291 million at 1974 prices. Is the right hon. Gentleman really asking us to believe that the Conservatives, if they had been returned to office, would not, confronted with the kind of crisis we had to face of maintaining essential oil supplies, have continued in defence terms along the road of cuts that they had already begun?
Mr. Younger: Surely the Under-Secretary will agree that the previous Government provided three and a half years of stability in defence expenditure which was of great value to the forces. There is a great difference between a cut at the end of three and a half years and drastic cuts such as the Government are making.
The Minister's mathematics are not all that good in adding up the figures I gave. I believe he is confusing totals with yearly totals, and I hope that when he reads Hansard he will look more carefuly at the suggestions I have made.
Mr. Judd: I am delighted that we are going to have a debate about mathematics. The hon. Member has still failed to tell us how he will meet the sums stipulated by the right hon. and learned Member for Surrey, East. His intervention has only served to underline my observations about humbug.
I have one other general observation to make. It is extraordinary that the Opposition, who are committed to the principle of the membership of NATO and a defence strategy within the context of NATO, still talk about our problems as though we would be operating on our own. The whole point of the Government's defence policy is that there must be a sensible division of responsibility within the NATO alliance.
The hon. Member underlined the issue of the southern flank and the Mediterranean. It is interesting that since we have announced our new policy towards the southern flank and the Mediterranean, the Italians have come forward with the most substantial expansion for years in their contribution to the maritime strategies of the NATO alliance. This makes the point about how we cannot be expected in our financial situation to carry the burden of the whole alliance and how other allies must be prepared to do their fair share. The indications

543
are that when we make a stand they are willing to take a fair share of the burden, and they have already begun to do so.
In view of what the hon. Member for Ayr said, it seems wise briefly to remind the House of our principal reductions in the Royal Navy following the defence review.
There will be a reduction in our amphibious forces involving premature disposal of HMS "Bulwark" and her helicopter squadron, and 41 Commando of the Royal Marines will be phased out as we prepare to leave Malta at the end of the present agreement in 1979. We shall not be proceeding with the construction of two new purpose-built commando ships.
As a result of the decision no longer to earmark ships for assignment to NATO in the Mediterranean in war and to withdraw our forces stationed in Singapore, there will be reductions in the planned numbers of destroyers, frigates and mine counter measure vessels. These reductions will involve premature disposal of some existing ships. The number of conventional submarines will also be reduced because of our decision to specialise increasingly in nuclear-powered vessels.
There will be a consequential slimming in afloat support. We plan the premature disposal of three Royal Fleet Auxiliary tankers and five other vessels. There will also be deletions from certain planned future orders.
The House will remember that the defence review set a target of reduced manpower strength in the Navy amounting to some 5,000. The defence White Paper published in March stated that the consequent redundancies amongst the United Kingdom Royal Naval and Royal Marine personnel would be fewer than 1,000 officers and men. Total strength would be reduced from 79,000 to 74,000. Since then we have undertaken a thorough analysis of the Navy's manpower requirements up to 1979 and of the most appropriate means of achieving the target for reduction.
I am pleased to be able to say that redundancies are now expected to be even smaller than originally predicted. By cutting back on entries and by reductions in the extensions of service, estimates based on current plans are that it will
544
not be necessary to make any junior officers or United Kingdom ratings of other ranks redundant. As far as more senior officers are concerned, a small redundancy programme will be necessary, probably involving fewer than 50 officers of the rank of commander and above. In the first instance it is envisaged that some 12 officers will be made redundant by the end of 1977. All those in the specialisations and age bands involved will be approached on a personal basis to seek their attitude towards voluntary redundancy. Whenever possible, those selected for redundancy will be volunteers, but some non-volunteers may have to be included in the programme. All will receive the redundancy terms set out in the defence White Paper.
I recognise that a number of hon. and right hon. Gentleman opposite, even if the hon. Member for Ayr does not include himself in their number, are deeply anxious about the statistics which I have just underlined, but in their—in many cases—nostalgic preoccupations they should not overlook the very positive benefits derived from the defence review. It has given the Government, Parliament and the nation an opportunity to think through our British defence rôle, analysing what we can do and how best to do it. This was an exercise long overdue.
We have had too many White Papers which have amounted to little more than an inventory of the inherited patchwork of capabilities and responsibilities, at best outlining certain limited adjustments. The reality is that we are no longer the centre of a great empire with all the consequent implications for defence and foreign policy of that position. Nor are we a dominating economic world Power in the sense in which we once were.
As we all recognise—whatever our position on the recent referendum—our future will inevitably be far more orientated towards the Continent of Europe than in the past. We can no longer afford to police large areas of the world alone, as the hon. Gentleman was gracious enough to observe. We have, therefore, to establish what are the fundamental priorities in defence terms and, having decided, determine to fulfil those priorities convincingly. In this context we believe that the only sane strategy for Britain lies within the overall NATO defence structure.

545
Of course, it may be tempting to wish that we could still shepherd our merchant ships around the seas all over the world, but, in all honesty, this is just no longer a practical proposition, and the sooner we understand this the better. Nothing could be more foolish and irresponsible in defence terms than posturing in attitudes and situations which cannot be sustained. We would deceive nobody but ourselves.
Rear-Admiral Morgan-Giles: Is the hon. Gentleman telling the House and this country that for the first time in centuries this Government have altogether abrogated any attempt to be able to defend our overseas trade?
Mr. Judd: The hon. and gallant Gentleman's impatience on defence matters is well recognised in this House and is in many senses respected. If he can bear with me a little longer, I hope to deal in some depth with the kind of anxieties he has in his mind.
Having said this, nobody in my position could for one moment overlook the dramatic story since 1962 of rapidly growing Soviet maritime strength way beyond any level dictated by a purely defensive preoccupation. This story of Soviet naval expansion has been impressive in terms of both the quantity and the quality of its equipment. The fact that it is on average launching one new nuclear-powered submarine a month is a daunting prospect by any standard. The recent world-wide Russian naval exercise—OKEAN 75—held in April was the biggest in its naval history. The significance and scope of its deployments in that exercise are, indeed, a sobering matter for reflection.
The Soviet Minister of Defence, Marshal Grechko, has himself summarised this growth in Russian naval capability as follows:
"The Russian Navy has undergone a qualitative change and its rôle in the defence of the country has been changed. Its basis is nuclear submarines, naval missile-carrying and anti-submarine aircraft and various kinds of missile and anti-submarine surface ships. Our navy has left coastal waters and land-locked seas for the expanses of the world's oceans."
Should the pressure ever be exerted, we shall have to concentrate on the most essential priorities, and the House should be in no doubt that it will be within the NATO area that our most basic
546
interests lie. It is, therefore, to this area that we have primarily dedicated ourselves in defence terms.
It is against this background that we should assess the future rôle of the Royal Navy. The defence review concluded that we should concentrate British effort in those areas where we could make the most significant contribution to collective defence. For the Navy this must mean the Eastern Atlantic, the Channel, the North Sea and our other home waters, as well as custodianship of Polaris as part of the NATO nuclear deterrent.
It is not always completely understood that the maritime element is not a separate compartment of defence policy. On the contrary, it is part of the basic foundation—a cornerstone—of the whole of NATO's strategy. It has to be recognised that without the maritime task of keeping open the supply routes from the United States to Europe in any time of developing tension, the strategy on land would prove little more than a hollow facade.
Furthermore, the maritime environment provides for any potential enemy an excellent opportunity to deploy political pressure without the same degree of risk of self-defeating escalation to a nuclear holocaust which would be present in any military confrontation on land.
The House will forgive me if I turn to the thoughts of the architect of Soviet naval expansion, Admiral Gorshkov. He has said—again I quote:—
"While representing a formidable force in war"
a navy
"has always been an instrument of policy of the imperialist states as an important support for diplomacy in peacetime, owing to its inherent qualities which permit it to a greater degree than other branches of the armed forces to exert pressure on potential enemies without the direct employment of weaponry."
This quotation suggests to me that this lesson has not been lost on the Russians when one considers the vast and rapid expansion of the Russian Navy.
Mr. Younger: I do not want to interrupt the hon. Gentleman more than is necessary, but is he about to add, after that spine-chilling quotation, that therefore we must reduce our own NATO naval contribution very substantially?
Mr. Judd: The hon. Gentleman is asking me to set a standard which he did

547
not set himself by giving way, but he would do well to sit patiently, as we did to hear what he was endeavouring to say.
The credibility of NATO's policy of deterrence lies in the capability to deploy sufficient forces so as to meet and contain aggression at whatever level. It depends upon the concept of flexibility, generating uncertainty in the mind of potential aggressors about the precise manner in which the alliance would respond, and the precise timing and circumstances in which the alliance might escalate conflict to a higher level. The Royal Navy and Royal Air Force play a vital part in this flexibility. In the Eastern Atlantic they provide the bulk of NATO's ready maritime forces, demonstrating to both the Warsaw Pact countries and our NATO allies alike that the Soviets could not count on a quick victory on land by isolating Europe from America in a time of tension or war. If the Warsaw Pact possessed an unchallenged capability—which it does not at present—to dominate the Atlantic and cut these vital lines of communication, the effect on allied confidence—even if no shots were ever fired—would be profound, as would be the effect on the Russians' calculation of the outcome of any act of aggression which they might be tempted to commit.
When we came to office we discovered that the series of arbitrary cuts imposed by the Conservative Government on defence had inevitably created an atmosphere of uncertainty. Nowhere was this better illustrated than by the vast question-mark overhanging the future of naval aviation. I am delighted to see on the Conservative Front Bench the hon. Member for Haltemprice (Mr. Wall), who used to urge his own Government to overcome their timid indecisiveness about naval aviation.
For years a decision had been anxiously awaited on the maritime Harrier. The House will have noticed that within days of announcing the final form of our defence review we were able to make a positive statement about the future of this versatile aircraft with the Fleet. This illustrates my point. What was needed above all was a thorough review of commitments and capabilities. This we have completed, and, as this example illustrates, we are now involved in the task
548
of moulding a modern Navy matched to future and present needs as well as to available resources, a Navy well aware of the task expected of it.
The shape of the Fleet will be that required to play the part which NATO expects of us in the forward sea areas of the Eastern Atlantic and Channel. Here the main threat is the formidable Soviet submarine force, which—in fairness, the hon. Member for Ayr said this—already outnumbers that of NATO by over two to one, and which is backed by a very powerful anti-surface ship missile capability residing in surface ships and aircraft, as well as in the submarines themselves.
We have, therefore, decided to put our main emphasis on anti-submarine warfare and are going ahead with the anti-submarine cruiser programme. The effect of these ships will be maximised by our decision to develop the maritime Harrier. The air cover which these aircraft will provide—primarily in intercepting the reconnaissance and target-indicating aircraft on which the Soviet long-range missile forces depend—will enable these ships to operate further afield than would otherwise have been possible.
We also plan to counter the Soviet missile threat by continuing the programme of new destroyers and frigates, including the Type 42 destroyer with the Sea Dart missile able to provide air defence cover for groups of ships, and the Type 22 frigate armed with the Sea Wolf anti-missile system and with Exocet.
Our other main naval anti-submarine weapon system is the nuclear-powered submarine. We shall continue to give high priority to this programme, and we are planning to arm our submarines with a missile which will also give them a much more formidable anit-surface ship capability.
We also must recognise the substantial mining threat. In this context we have placed the order for the first dual rôle hunter/sweeper/mine countermeasure vessel. In addition, we have in prospect new missiles and other weapons systems and we are studying whether hydrofoils and hovercraft have a place in our defence plans.
At this point I should like to turn to the Royal Marines. The House does not

549
need to be reminded of the profound impression which their proficiency and commitment have made upon me as their Service Minister. I make no apology for repeating what I have previously said in this House. They are in every sense an élite corps. We shall be retaining the Royal Marines brigade headquarters and 3 Commandos with their associated Wessex helicopters. All these are, of course, declared to NATO. One of the commando groups which I was able to see for myself in training in the Arctic Circle last winter is specially equipped for arctic warfare. They are constantly available for deployment to Northern Norway. The Royal Marines as a whole have undertaken other major duties during the past year, including their work in Northern Ireland and their service with the United Nations Forces in Cyprus.
I was speaking of our fleet developments to meet our NATO tasks. But we also have our new important national priorities in the protection of our interests in the North Sea. With the greatly increased significance of the resources of the sea and the seabed—not least the prospect of self-sufficiency in oil supplies from the North Sea—the Navy, together with the Royal Air Force, clearly has a significant part to play on what has become known as offshore tapestry.
In some ways closely related to this offshore tapestry responsibility is the work of the Royal Naval Hydrographic Service. It is certainly no exaggeration to say that in this sphere during its distinguished history it has set perhaps the highest standards in the world. This service is still of immense importance for the Navy, but it has increasing civilian significance as well, particularly in the context of the use of resources of the sea and seabed. As I have already reported to the House, a special hydrographic study group has completed its work. Its report is under careful consideration by the Government, and I hope to be in a position to make a statement before very long.
Mr. Arthur Palmer: Is the Department paying attention to the practical suggestions made by the Select Committee on Science and Technology in this respect?
Mr. Judd: I assure my hon. Friend that we have always paid the closest attention to the observations of Select Committees.
550
We find it constructive in the best sense and stimulating of more thought on how we can best do our job.
What must, however, in the meantime be appreciated is that, whatever civil contribution this Service makes, the defence budget on its new limited basis can cover only that part of the hydrographic task which is relevant to military priorities.
So far I have been concentrating on the main responsibilities of the Navy, but there are, of course, still some wider commitments which have been spelt out in the defence review. For example, there is the Gibraltar guard ship, the contingent of Royal Marines in the Falkland Islands, and the small naval force at Hong Kong. In the case of the last, we are, as the House knows, considering, together with the Hong Kong administration, its appropriate future size.
The United States Government are now in the process of steering through the legislation proceedings for their future in Diego Garcia, and a new formal agreement is to be signed in due course. The expanded facilities there will offer useful support for refuelling, re-supply and minor maintenance of British naval ships as well as those of the United States.
However, we do not believe that this modest expansion, which, with the evidence of Russian military and naval developments in Somalia, is fully justified, will undermine the objective and the search for realistic arms limitation agreements. I emphasise that we share the desire of the littoral States for peace and stability in the Indian Ocean and we fully support the proposal by the Australian Government for mutual restraint by the United States and the Soviet Union. We, therefore, deeply regret that, despite our representations, the Russian Government have proceeded with their decision to build up a military presence at Berbera.
As far as CENTO, SEATO and the Five-Power defence arrangements are concerned, we shall, of course, remain members and continue with our respective consultative commitments.
As the House knows, after careful objective consideration, my right hon. Friend the Foreign and Commonwealth Secretary and my right hon. Friend the Minister of State for Defence have explained that the disadvantages of continuing to subscribe to the Simonstown

551
Agreement by far outweigh any positive advantages. The agreement has, therefore, been terminated, and we have no continuing special relationship with the South African navy. But the facilities at Simonstown will remain available to us—as they are to other navies—on a customer basis if we should ever need to use them. The termination of this agreement in no way prevents the Royal Navy operating in the Indian Ocean, where facilities in a number of other places are available.
The Royal Navy will also benefit from the increased flexibility of deployment provided by the reopening of the Suez Canal. We hope that the first Royal Naval group consisting of five frigates and supporting Royal Fleet auxiliaries led by the destroyer HMS "Glamorgan" will pass through the canal next month on its way to the Indian Ocean and the Far East.
The Royal Navy, with its special conditions of service involving such extended periods of time away at sea and consequent separation, has special welfare problems. I am, therefore, delighted to inform the House that we are making good progress with the establishment of the Naval Social Service envisaged in the Seebohm Report. The head of the service, Miss Baker, has already prepared her first report, which is being studied within the Department. Our first social work students are already undertaking courses in social administration at various centres of higher education, and I hope that it may prove possible to proceed to the appointment of regional heads of the service before the end of the year.
A special tribute should be paid to the existing staff of the former Naval Welfare Services who are making an important contribution towards the success of the new service. We have also recognised the special housing problems for Service men, and have introduced improvements in our home purchase arrangements.
As the House knows, the Department of the Environment has also recently issued a revised guidance circular drawing the attention of local authorities to the special problems which face Service men and their families in finding accommodation when they leave the Services. This is a welcme move, to which we
552
hope local authorities all over the country will respond by recognising their collective responsibility towards those who have manned our national defence Services.
The WRNS continues to make an indispensable contribution to the efficient work of the Navy. Its rôle and organisation have recently been thoroughly reviewed. It has been decided that it should in future be more closely integrated into the naval Service, so sharing both the greater opportunities and the fuller obligations of such Service. We are actively considering what new jobs it could undertake, and we shall lay before Parliament proposals to bring it and the Queen Alexandra's Royal Naval Nursing Service—with all its fine traditions—within the ambit of the Naval Discipline Act. I believe this to be a logical and timely step which will bring the WRNS into line with the women of the two other Services.
We have also considered the future rôle and structure of the Volunteer Naval Reserves. The decisions which we have made about their future, which we are promulgating to the Fleet and the Reserves this afternoon, will involve reductions in ships and manpower but will ensure that they are tailored to meet their war-time task and are more integrated with the mainstream of the Royal Navy as a whole. The Reserves will continue to have a vital sea-going rôle primarily in the field of mine countermeasures warfare, and they will operate the new, more sophisticated mine counter-measures vessel which will be allocated to them in due course. There will also be changes in the command and control arrangements. We are convinced that these measures will result in a taut, effective structure for the Volunteer Reserves, providing a worth while and rewarding experience for all concerned.
No fighting Service can be effective without efficient support, but cuts in the front line inevitably bring reductions in the demands upon the support organisation. Studies are, therefore, being undertaken into the future needs, including the management review of headquarters and rationalisation studies.
All four naval dockyards are being retained and will continue to be fully committed. Their work, as always, remains indispensable to the deployment

553
of the Fleet. It is intended that any future marginal capacity that may become available should be used to undertake work for United Kingdom warship builders, foreign Governments and appropriate civil customers. Always remembering the industrial and employment consideration elsewhere, we would also hope to take back into the yards work which in the past we have been forced to put out to contract. New machinery has been established at the headquarters in Bath for handling dockyard assistance to other Government Departments and outside industry. It is worth noting that the value of such repayment work in the current financial year is estimated at £5 million.
The Royal Dockyard Policy Board has continued to give invaluable advice on the operation of the dockyards. We have recently taken a look at its terms of reference and have redefined these to bring it still closer into contact with the operation of the individual yards as well as the dockyard headquarters at Bath. During the past year the board has been joined by Lord Feather and John Garnett, Director of the Industrial Society. Richard O'Brien has also continued his highly valued service on the board. After several years of outstanding work on the board, Sir Henry Benson has left it, and I would like to take this opportunity of expressing my deep personal appreciation for the tremendous assistance which he has given.
During the past year a great deal has been done to introduce new management and accounting procedures into the dockyards. Next year we shall be introducing a separate Vote for the yards, which will certainly assist in establishing clear accountability to Parliament and in providing an added stimulus to efficiency. The presentation of these accounts will allow for comparison of performance between individual yards. In the light of experience of the working of this Vote, it will in due course be decided whether or not to proceed to a trading fund. In the meantime, alongside these management changes a great deal of time and effort is being put into the improvement of industrial relations within the yards, in the Royal Naval supply and transport service and elsewhere.
The recent industrial Civil Service pay settlement has obviously covered the civilian workers in many naval establish-
554
ments. It has included the principle of equal pay for women and special arrangements for participation in efficiency bonus schemes by employees not currently covered by existing schemes.
At Chatham dockyard we have initiated an experiment for a trial year of tidying up the complex structure of various incentive schemes and, we hope, improving efficiency and job satisfaction by the introduction of a new wages structure. If this proves successful it will be extended to all four dockyards.
During the 16 months since I took over this ministerial post from my predecessor, the hon. and learned Member for Colchester (Mr. Buck) who made a distinguished and important contribution as Minister—I am glad to see him in the House today—I have made it my business to see as much of the sharp end of our activities as possible.
If one thing has impressed me more than any other in the visits I have been able to make, it is the calibre, professionalism and loyalty of the men and women, both Service and civilian, upon whom we count for the effective implementation of our naval policy.
We should never be tempted in an age of, at times, almost literally incredible technology and sophistication to believe that this panoply of scientific achievement can somehow be a substitute for human qualities; it can never be better than the standards, motivation and application of the men and women behind it.
I therefore pay the warmest possible tribute, in which I know hon. Members on all sides of the House will wish to join, to all the Service men and women of the Royal Navy, Royal Marines, WRNS and nursing service, remembering, apart from their continuing regular service and vigilance, their part in operations like the evacuation of Cyprus last year, the courageous acts of heroism in search and rescue at sea, demanding patrols day after day, night after night in the streets and waters of Northern Ireland and the clearing of the Suez Canal. I should also like to put on record the Government's appreciation for the steadily reliable service given by the Naval and Marine Reserves.
In the Navy Department we have traditionally a particularly large number of

555
civilians in the essential support services, and again I know that hon. Members in all parts of the House will wish to record their gratitude to the Royal Navy Supply and Transport Service in its 10th anniversary year, to the ships' companies of the Royal Fleet Auxiliaries with their outstandingly high level of competence, to the thousands of civilians in our naval dockyards, naval aircraft yards, other fleet establishments and, not least, all headquarters staff.
This whole debate takes place against the backcloth of the grave economic difficulties with which the country is confronted. In these circumstances it would be absurd to dismiss the genuine anxieties about defence expenditure of a number of hon. Members on this side of the House. But I put two points to some of my hon. Friends with all the seriousness at my command.
First, I always have had, and continue to have, great respect for the genuine pacifist position, but those of us who have forgone that position face an entirely different situation. We forgo the pacifist position because we believe there is a threat which we must meet. This means that we must not shirk the task of analysing exactly the character of that threat and of ensuring that, together with our allies, we are in a position to meet it. We cannot afford to spend more on defence than is absolutely essential, but, equally, it would be criminally wasteful of public resources to spend a great deal of national wealth on providing a defence system which was insufficient to meet the challenge.
My second point is that, as our party has repeatedly made plain in its election manifestos, we see the NATO alliance as an instrument of détente as much as of defence. It is because I believe that we must achieve a greater level of understanding between East and West and because I believe that we cannot look our children in the face if we ever slacken in our commitment to achieving genuine disarmament that I believe fragmentation or disintegration within the alliance would at this juncture prove disastrous. The devastation which could be brought about in the holocaust of modern warfare is so horrific and grave that we must discipline ourselves into avoiding the temptations of negotiations by gesture.
556
The road to a sane world will be hard, demanding the most painstaking and intellectually testing negotiations. We owe it to future generations that any agreements made will be unequivocal and guaranteed. This means that we must be able to negotiate in confidence within the framework of credible collective strength. The Navy stands ready to play its part within that essential framework.
4.38 p.m.
Mr. Robert Banks: The question posed in this debate is whether the judgment is right in the cuts now being made in the Royal Navy and to what extent they alter or weaken our defensive position.
A logical and cool assessment of the kind of threat which we face must take into account a number of factors. The first factor is obvious—the strength of a possible aggressor, his tactics and his strategy. As we heard this afternoon, the Russian navy has been vastly expanded. It is interesting to see the areas in which the expansion has taken place in the past five years. First, there has been an increase of 150 per cent. in its ballistic submarine fleet. There has been an increase of 35 per cent. in its nuclear powered submarine fleet. The number of Soviet frigates has gone up by 125 per cent., its amphibious vessels by 40 per cent. and its aircraft by 20 per cent. This is not a flag waving fleet. It is a fleet which means business. It is a fleet which tips the balance of power.
The second factor which we must work into our assessment is the strength of the Western, or NATO, alliance. We should not underestimate our rôle in NATO, the importance of NATO to us and our importance to NATO. Our counsel and our decisions are a vitally important influence on the work and strength of NATO. We cannot afford to sit back, cut our forces and expect other countries in NATO not to take account of that and not to consider their position and whether they can afford to make the same cuts. We cannot forget that inflation has eaten into the budgets of our partners in NATO just as much as it has into ours. Alas, in our case it is somewhat worse.
A third factor in our assessment has to be considered, namely, that of political changes on the international and European scene and, more especially, within

557
NATO. If we take into account the upheaval and changes in Portugal, and the difficulties between Turkey and Greece, our job becomes all the more important in ensuring that we, with NATO, have sufficient forces to exclude a Russian presence from areas where we would face a great danger. In this respect I single out Portugal as one of our partners which is closest to us. We should find ourselves in a different position from that which we are in today if Portugal left NATO or changed its political allegiance. This all forms part of the inescapable assessment.
It is extraordinary that the Minister can stand at the Dispatch Box and, on the one hand, talk about the build-up and growth of Russian forces and the threat that that poses to this country and, on the other hand, talk about the cuts which are being made. It is humbug to talk in those terms.
It is a hard fact that, however difficult our economic problems are, our priority must be to maintain the safety catch on the balance of military forces. The question that arises in today's debate is whether the cuts that are being made in the Navy take that balance to breaking point. I believe that we are at that breaking point. When we consider our strength it is important to examine the long-term effects of these cuts. For example, of the number of frigates that we have in service, 27 came into service between 1956 and 1963, 13 came into service between 1964 and 1970 and seven have come into service since 1970. Happily, there are three more Type 21s due in service this year. As can be deduced from these figures, the over riding majority of frigates in our Fleet are in the age bracket of 15 to 20 years. Of our 10 guided-missile destroyers, four are more than 12 years old but we have five under construction, which will help to reduce the ageing effect in the number of guided-missile destroyers.
However, the situation that the review will bring about, due to the number of destroyers and frigates being reduced by nine in this 10-year period, becomes all the more serious if we take into account the age of the ships that we have at present.
The Russians are building a new Navy. We are watching our Navy get
558
older and more decrepit. In the unhappy possibility of a conventional war occurring, the important need is for us to detect that threat at the earliest opportunity. Our detection must be centred—and the Minister is in agreement with this—against a surprise submarine underwater attack. The emphasise should be on early detection and the quick kill, and then we must have the protection methods at our disposal.
The Minister was extraordinarily wise to hold on to the building programme of HMS "Invincible" and to the through-deck cruiser programme. He was even wiser when he placed the order for the Maritime Harrier. This is a most remarkable aircraft and will be of the greatest benefit in enabling us to land on small through-deck cruisers in the future. The Harrier can take off from a small area of deck and also land on a similar size of deck and, therefore, we can use our depot and maintenance ships in the rearguard in order to keep the number of ships at our disposal above the maximum that the through-deck cruiser can accommodate. The rôle of repair and maintenance ships in the fleet's disposition, with which the through-deck cruiser presents us, is worthy of the deepest examination.
In a period of inflation such as the present the aim is to get the best value for money. The obvious answer is standardisation. Much lip service is paid to standardisation. However, a great deal of work has to be done on it. It is important that this work is carried out. We spend nearly £500 million on research and development, and much of this could be offset if we agreed with some of our NATO partners on research and development programmes which we could jointly undertake. Of course, such joint programmes have been undertaken—for example, MRCA—but a great deal more has to be done in the near future. It is not the time to talk about standardisation without achieving concrete results.
One of the cries in the Royal Navy is always about the burden of paperwork that falls on the officers and staff who man the ships. I hope that in the management review of the Ministry of Defence—which is being carried out in conjunction with the Civil Service and which is aimed at adjusting the size and shape of the departments—a serious

559
effort will be made to cut out unnecessary paperwork within the Fleet where-ever possible. If the Minister has the figures available this afternoon, I hope that he will tell us the proportion of people working in the Ministry to the proportion of people in service in the Fleet.
One of the best values that money can give as an insurance for our protection in the event of a conventional war is in the rôle which the Royal Naval Reserve can play. There is a note in the Defence Estimates on this subject and I should like to draw attention to the aim as defined in the review. It is to achieve a reserve which will provide trained volunteers
"for manning and supporting minesweeping forces, for manning maritime headquarters and for linguists".
I speak as one who has served in the Royal Naval Reserve. Only recently much to my dismay I had to give up that service. The attraction of the Royal Naval Reserve is to give those people who are members on opportunity of going to sea in the Fleet. The problem that I have found with the reserve in the past 10 years has been the change of emphasis towards keeping the reserves in their divisions in this country without an interchange of reserves going into the Fleet to see the latest ideas and ways in which the Fleet is operating. The possibility of reservists doing their training commitment within the Fleet is one of the attractions which draws people into the Royal Naval Reserve.
This is an area which should be expanded. The figures have been reasonably consistent, but the costs of running the reserve are so small in relation to the men and women who will be available in time of war that the expenditure is well worth while. There are only 2,600 officers in the Royal Naval Reserve and 4,400 men. The ratio is wrong. There should be more men and fewer officers. I very much hope that the Minister will look at ways in which the Royal Naval Reserve can be made more attractive and also give it more publicity. In this current year only £14,000 is being provided for advertising the reserves.
The important element is mine-sweeping, but I would extend that to watch, keeping administration and supply duties,
560
and navigation, which can be undertaken within the Fleet. The argument has always been that the Navy is becoming a technological Navy and that the machinery is becoming too complicated for the reserves to be able to master in the short period of training which they have every year. But the simple fact is that many of the computers, machines and equipment now incorporated in our ships make the task of the watch-keeper of the gun-layer, or whoever it is, very much easier and simpler. Therefore, we can afford to have our reserves ready to go into the Fleet if a war situation arises.
Mr. Antony Buck: Does my hon. Friend agree that there is also a definite place for the Royal Naval Reserve to deploy its activities relative to the offshire oil rigs, where they could be particularly useful?
Mr. Banks: I am grateful to my hon. and learned Friend. I was coming to that point. Patrol vessels is the one area in which the RNR can be of immense value, and never more so than in the areas of the oil rigs.
People are very pleased to do this. They want to join and to have the opportunity of going to sea and doing a worthwhile job. That is the key. They must be given the chance of doing a worthwhile job.
In all this debate the simple question comes down to whether we shall be up to the challenge when it may come. I believe that we shall look back on this period and say that we were blind to the obvious factors of the growth of the Russian Fleet and the declining strength of NATO that has begun in the cuts we are making. We shall have to come to the inevitable conclusion that this review lost us the peace for which we fought.
4.53 p.m.
Miss Jo Richardson: I start from a different standpoint to the majority of hon. Members present today because I start from the principle that I do not believe that the cuts are sufficient. I and many of my hon. Friends have made our position clear over a long period since we have been Members of this House. In this debate I do not want to go over that ground. I want to concentrate my brief remarks on one particular facet of the Defence Estimates, and that concerns the question of Polaris.

561
In his closing words my hon. Friend the Minister talked about Britain having a "credibility". I agree with him. We must have a credibility. That is why I want to put some questions to him about Polaris.
The Defence White Paper is not particularly specific on the matter. Indeed, one could say that the references in the White Paper to Polaris are rather sketchy, to say the least. Considering that the White Paper says that Polaris
"provides a unique European contribution to NATO's strategic nuclear capability out of all proportion to the small fraction of our defence budget which it costs to maintain",
I should have thought that Polaris would have rated more than a total of 28 lines in the whole defence review.
It is true that the amount of money which is to be spent in 1975–76, according to the Estimates, to maintain Polaris is low—if one can call £58 million low. It is low in comparison with some other projects. However, it is certainly the most important single weapons system in the Armed Forces. That being so, I believe that we ought to have more information about it, and certainly at least some more justification of its value to British security.
Considering that Polaris is far and away the best known weapons system to the general public, and considering that it has produced all sorts of emotions and demonstrations, I should have thought that the Government would have considered that this weapons system would have rated a great deal more explanation than it has. I hope that the Minister will forgive me, therefore, if I put a few questions to him.
At Chapter I, paragraph 25(d), the White Paper says of Polaris
"We shall maintain its effectiveness."
That, I presume, means normal maintenance and a commitment to complete the long refit which is due next year, I believe, for the first submarine. But it could probably also mean work on the warhead. In the debate on 7th May the Secretary of State for Defence took great care not to rule out further nuclear tests. But these would be necessary only if there is work going ahead on the warheads, either to "MIRV" them or to miniaturise the present multiple re-entry vehicles. I can find no mention of such work in
562
Chapter VII of the White Paper, which deals with research and development. Therefore, I should like to know whether there is any clear costing of research and development, and, if so, what it is and why it is not in the White Paper.
In referring back to what the Secretary of State said about nuclear tests, perhaps I may say in passing that although he did not rule out the possibility that there may be another, which I would deplore, I only hope that there has been none in between—because it took Chapman Pincher to inform the country that we had had one which we might not have known about. However, that is a more general point.
My second question relates to Chapter I of the White Paper, paragraph 25(d), which says categorically that
"We do not intend to move to a new generation of strategic nuclear weapons."
On the face of it, that should mean that "MIRVing" the Polaris missiles or buying Poseidon missiles and developing British MIRV warheads for them are options which the Secretary of State has totally ruled out. But I should like to hear from the Minister whether that is, in fact, so or whether the Government have a different concept or a different definition of the words "a new generation".
I hope that the Minister will be able to assure the House that the Government are against the multiple independently targetable re-entry vehicles— if one can get one's mouth around these long words—and I should like to hear his view about them.
That same statement, saying
"We do not intend to move to a new generation of strategic nuclear weapons"
means, if it means anything, that there will be no developments of a completely new strategic weapons system. The defence review covers a 10-year period, so this non-development commitment presumably goes for the same period.
The original estimate of the life of a Polaris submarine was 20 to 25 years. Varying periods have been given, but it is roughly that. In other words, the earliest date necessary for replacement is 1986, and the latest is 1995. I take those dates from the Twelfth Report of the Expenditure Committee for 1972–73. On that basis the Defence and External

563
Affairs Sub-Committee recommended that a decision on a replacement for Polaris would have to come by 1977 to allow for the eight to 12 years which apparently is necessary for the development of major new weapon systems.
My third question is whether it is true that the Government have now revised their estimate of the life of the four submarines. If so, on what is that revision based? Have some improvements been made? If not, is the Secretary of State's Department proposing or planning improvements? If improvements have been made, when were they made, and why have we not been told about them? Most important, what is the cost?
Those are the questions which I should like my hon. Friend to answer when he replies. I believe that the House is entitled to those answers. That is why I return to my original point. The references in the White Paper to Polaris are so skimpy as to cause suspicion in the minds of hon. Members and in the minds of the public. That lack of information, which I hope the Minister will remedy, gives rise to the view that perhaps the Government are wrong about Polaris or are consciously planning not to have a replacement. If the latter posssibility is correct, it seems that we shall do the opposite of what the Government seem to want to do and slip out of the membership of the nuclear club without taking advantage of having been a member of it in the first place. If that is what we are doing, either through having come to the wrong conclusions or through having conciously planned not to have replacements, in my opinion we are not being very clever.
A decision to give up nuclear weapons could help to prevent nuclear proliferation or could aid the process of détente, to which the Minister has referred and in which he has said NATO plays a particular rôle. In his opening statement, the Minister, when speaking about general defence expenditure and the rôle of defence in the present-day world, may have been speaking to me or to certain of my hon. Friends. Let me make it clear that I am not a pacifist. I have never been a Pacifist.
564
I happen to believe that Britain's possession of nuclear weapons, with all the understandable anxiety which arises from having possession of deadly weapons which are also possessed by other countries, and notably the Soviet Union, bearing in mind our geographical position and our size, sets us on a suicide course. If we did not have nuclear weapons not only would we be in a much safer position but we would be enabled to make a better contribution to the cause of world peace. I believe that there are many things in this world that are worth defending even by fighting for them. I do not happen to believe that the possession of nuclear weapons helps in that way. That is why I and some of my hon. Friends take a certain position.
Mr. Judd: My hon. Friend has said that one feature of the Polaris missile is the relative cheapness of maintaining it. I understand that my hon. Friend and certain of her hon. Friends are committed to substantial cuts in defence expenditure. That seems to be a totally different point.
Miss Richardson: I do not quite understand what my hon. Friend means. I said at the beginning of my remarks—in fact, I was quoting from the White Paper—that the Polaris missile is a relatively cheap missile. What I am trying to say is that relatively cheap it may be but inefficient it may also be, and, therefore, a waste of money. As regards the position which I and my hon. Friends take on cuts, our position on the size of the cuts does not rest merely with Polaris.
I return to my final point. I am not a pacifist and I do not take the pacifist's attitude. However, I would prefer out defences, if we have to have them, not to be based on a nuclear strategy, which I happen to believe makes us a target. When we talk about the grave economic situation in which we find ourselves, when we hear the Opposition begging for cuts in public expenditure and when we hear the hon. Member for Ayr (Mr. Younger) asking why we have to have defence expenditure reduced when we could be using the money which the Community Land Bill will cost and which subsidies already cost, I know well what

565
is in the minds of Conservative Members—namely, cuts in education, social expenditure, housing and so on.
That is expenditure for life but we are talking about expenditure for death. That is why I believe we should concentrate our cuts on the weapons of death rather than the expenditure for life.
5.7 p.m.
Mr. Julian Amery: I think that it would be inappropriate for me to intervene between the questions that the hon. Member for Barking (Miss Richardson) has asked and the answers that she will no doubt receive from the Minister. All I would say is that we must realise that in the world in which we are living proliferation of nuclear weapons is already taking place on an increasing scale. For Britain to believe that in abandoning such weapons we would have any influence on the course of events today beyond making us more liable to death and destruction than we are—protected as we now are by our own nuclear weapon—is an illusion.
The Minister's speech filled me with foreboding about the general direction in which our defence thinking is going. The hon. Gentleman gave what my hon. Friend the Member for Ayr (Mr. Younger) rightly called a spine-chilling account of the growth of the Soviet Navy. He gave an account not only of its growth but of the purposes for which it might be used, as suggested by such a high authority as Admiral Gorshkov—namely, a kind of modern gunboat diplomacy for exercising power and influence throughout the world.
But the conclusions which the Minister drew from his analysis were entirely opposite to those which I would have expected. If the hon. Gentleman had said, "In the light of what we know about the growth of the Russian Navy or the views expressed by its leaders, we must make a bigger effort than we have planned, or even a bigger effort than the Conservative Party made", I would have applauded him. If he had said "We cannot for financial reasons make a bigger effort but we shall try to mobilise our allies to join with us in resisting this development, and we shall at least maintain and preserve the assets that we have in, for example, Singapore, Gan and Simonstown, and our Mediterranean
566
presence", I would have supported him wholeheartedly. However, the hon. Gentleman's response seems to be to look at the danger and to run away from it, to retreat into a limited area without making any effort to strengthen our defences or the will-power of those with whom we work.
One of the retreats that we are undertaking is the abrogation of the Simonstown Agreement. It is to that matter that I wish to devote my remarks. A few years ago the abrogation of the Simonstown Agreement would have led to at least a complete day's debate in the House. But as our concern with our overseas interests has shrunk so far below their continuing importance, debates such as this provide the only opportunity to discuss these matters.
The Western Alliance is essentially an oceanic alliance. It is an alliance on the one side between the United States and Europe and on the other side between the United States and Japan. The United States and Europe are linked together by the Atlantic Ocean in terms of defence and trade. The United States and Japan are linked by the Pacific Ocean. But all three industrial power centres—Japan, United States and Europe—depend for their livelihood on access to raw materials and to the market, where they can pay for what they buy. Many of these raw materials are purchased from a great range of countries which lie around the Indian Ocean—New Zealand, Australia, South-East Asia, the Indian subcontinent, the Persian Gulf and the East Coast of Africa down to South Africa. If we were denied access to those sources of raw materials and to those markets, our economies would be in mortal danger.
We are all conscious of the importance of oil, and, indeed, in the last 18 months we have hardly spoken of much else. However, it is not only oil that is at stake. We must also remember the importance of copper, gold, uranium and a whole variety of metals that are essential to our metallurgical processes and that they stem largely from these areas. Access to those items is vital to all our economies and, above all, to the hard-pressed British economy. The blow that would be struck at us if we were cut off from those materials, or if their price were

567
to be greatly increased, would far outweigh any economies that the Government may make in defence.
In talking of the importance of these matters to all Western countries, particularly to Britain, we must remember that in regard to access to the Indian Ocean, and thereby to raw materials, the Cape route is vital. It is true that the reopening of the Suez Canal means that a good proportion of the trade which has gone round the Cape will now be able to go through the canal. But the Minister misled the House—I am sure unintentionally—by suggesting that the Cape route was no longer essential and that the Suez Canal was an alternative. It is not for me to pronounce on the views of future Governments in Egypt, but we know that the southward openings of the Red Sea are in the hands of countries dominated by the Soviet Union. I refer to Aden—South Yemen—and the Republic of Somalia. The passage of the Suez Canal is itself of only slight importance, as all British Imperial strategists of the last century knew well, if the openings to the Red Sea are in the hands of the other side.
Apart from the precariousness of the Suez Canal-Red Sea route, the large tankers will have to go on using the Cape route, as will a great deal of other shipping concerned with Australia or the East Coast of Africa. Therefore, the Simonstown Agreement remains the key to the security of the Cape route and to much of our trade in the Indian Ocean area—and to all of it if the canal or Red Sea route should be closed again. We are concerned not just with the particular place known as Simonstown but with all the South African ports, with our co-operation with the South African Navy, with the communications centre and with the repair facilities. They provide the essential facilities—and, indeed, the only facilities—between Britain and Singapore on which, to the best of my knowledge, we can rely. I am sure that the Minister on reflection will agree that he misled the House when he said that there are alternatives. There are no clear alternatives.
Mr. Judd: The right hon. Gentleman put his view moderately, but I totally disagree with his conclusions. Is he aware
568
that recently one of the biggest groups which we have deployed for years to the Far East returned round the Cape without having to call at Simonstown at all?
Mr. Amery: I do not think that in any way proves the hon. Gentleman's point. It was able to go that way round the Cape because the Cape route was in safe hands. Secondly, had there been any problems, all the facilities were at its disposal. They may be at its disposal in future on commercial terms or they may not. Who can be sure? What is more, under the Simonstown Agreement those facilities were available to us for use as back-up even in a dispute in which the South African Republic was not itself involved.
Ten years ago the Indian Ocean was still a British lake. Today the Soviet fleet predominates in the Indian Ocean. With the opening of the canal and our withdrawal from Singapore, Gan and Simonstown, this predominance will become a Soviet paramountcy dwarfing the two United States frigates based at Bahrein or the modest improvement in the faciliites at Diego Garcia, even if they are approved by the Senate and Congress.
As we sit here in this House this afternoon, our access to the raw materials and markets of the Indian Ocean is already at the mercy of the Red Fleet. Some may say, "What is the threat? What am I worried about? Is there really cause for concern?". I thought that the Minister gave a good deal of cause for concern in his own analysis. There is concern about Soviet gunboat diplomacy. Admiral Gorshkov referred to this matter in a recent article in the Morski Zbornik, the Red Fleet's newspaper, when he spoke of the increasingly important peace-time rôle of the Soviet Navy and of the political influence it can exercise by a tacit demonstration of superior force. That is gunboat diplomacy in the old Victorian style. It means that the newly-fledged, weak independent countries around the Indian Ocean could be influenced in their policies by the arrival of the Red Fleet. It may even determine the character of their regimes and, therefore, their relations with Britain and with the Western Alliance as a whole. We must not think in purely national

569
terms but in terms of the Alliance of which we are a part.
We know from repeated pronouncements from Moscow that it is a basic strategy of the Soviet Union to deny us access to raw materials and markets as a way to destroying what they call imperialism. There are other threats, too—for example, the possibility of a blockade by proxy. We know that the Soviets are generous in providing arms to potential allies. We have seen lavish supplies of Soviet arms go to Egypt, Syria and Somalia. We might find such arms being sent to the People's Republic of Mozambique. It is not altogether fanciful to believe that they might make available some of the older submarines which, although still fully effective, are surplus to Soviet requirements. We could find in local conflicts between, say, Somalia and Kenya, or Mozambique and South Africa, those submarines being deployed to intercept our shipping with those countries and setting up a blockade.
This type of thing has happened before. Older Members will remember that during the Spanish Civil War, when Franco had no submarines, British ships trading with the Spanish Republic were frequently sunk by submarines alleged to be Franco's submarines but which in fact were Mussolini's submarines. This could be done again. The Russians could provide submarines ostensibly to some African country in conflict with another.
However, much the most important threat is the essence of naval power itself as a means of exerting political pressure. Perhaps the best way that I can illustrate this point is by drawing attention to what the White Paper says about the threat in central Europe. There is a very eloquent passage in the White Paper which explains how the preponderance of Soviet forces in central Europe—tanks, troops, aircraft and so on—while they do not necessarily presage open aggression, could be used as a means of political blackmail in a crisis.
The same is true of the sea. All of us agree that we must maintain adequate forces—comparable forces if possible—in central Europe so as to have a measure of flexible response to a Soviet threat.
We do not like the trip-wire conception which gives us no choice between capitulation or catastrophe. At present we are not even adopting a trip-wire
570
philosophy in the Indian Ocean. We are leaving nothing to protect our shipping routes and our trade supplies—not only Britain's but those of Europe, America and Japan—against an increasing Soviet presence.
The Secretary of State has said, and the Minister reiterated this afternoon, that we must concentrate our defence effort on NATO, on Europe and on the North Atlantic. Unfortunately, we cannot so concentrate on our economic effort. I wish we could. With the advent of North Sea oil it will be easier, but we cannot do so at present. Indeed, we shall never be able to do so wholly, nor will America, Europe or Japan. We shall always be dependent on the supplies that come from around the Indian Ocean. Who will protect those supplies? The Americans? It would be marvellous if they would. There was a time when the Americans thought that they could undertake everything outside NATO by themselves. Since Vietnam they think very differently.
It is just possible that if we, the French, the Dutch and the South Africans were to maintain some sort of presence in the Indian Ocean, necessarily based upon Simonstown and Singapore, because there is nowhere else, the Americans would join us and contribute to the common effort and produce a force comparable to the Soviet. But unless we do so my bet is that they will not.
We must face the fact that the NATO Alliance is not in itself enough. We can no longer go on with a Western Alliance limited by the Tropic of Cancer. We need a global alliance of the free nations, the main pillars of which will have to be the European Community, the United States and Japan. For this alliance the Simonstown Agreement and the facilities at the Cape are vital. This Government have not sold them down the river—they have thrown them away. No price has been paid to us in exchange. No alternative facility has been offered at Dar-es-Salaam or Mombasa. I cannot see the reason for doing it. There is no saving in manpower or money that can be even measured within the margin of error. There was no pressure from the African countries. Only a few weeks ago my hon. Friend the Member for Haltemprice (Mr. Wall) asked the Foreign Secretary what representations had been made to him by African countries to

571
withdraw from Simonstown. My hon. Friend received the answer "None".
There is no good will to be gained from this operation—absolutely none. Our presence has been known since the end of the 18th century. It was unobtrusive and the reasons for it were well understood. This withdrawal has been done for one reason, and one reason only, namely, to appease the opinion of certain sections of the Government party below the Gangway who have pressed for this withdrawal when the African States have not. Those sections of the Labour Party have pressed for it and, consciously or unconsciously, they have done so at the behest of Soviet inspirations.
The Soviets know what they are doing, because they are not concerned about the welfare of the African population. They are concerned with denying us raw materials and the strategic positions which we have had in the South Atlantic for so long. It will be very difficult to re-create something which existed and which was no problem. It is much harder to create than to destroy. I can only hope that the West will face up to the danger in time and in some form repair and regain the use of an asset which this Government have so incontinently thrown away.
5.25 p.m.
Mr. Harry Selby: I come from an area which has built many famed battleships. It ill becomes me to say that I should like to see no more battleships built in the Clyde. I say that because we can build other kinds of ships of much greater value than warships of any kind.
I have listened to various speeches and wondered whether I should speak. The hon. Member for Harrogate (Mr. Banks) talked about sea lanes. When I think of sea lanes I think of the Victorian era. The hon. Gentleman spoke about defending ourselves against attacks. Who in these days will attack sea lanes?
We have heard talk of conventional wars. There has never been a conventional war. Have we ever known a war to start and finish with the same type of weapon? When one reads the history of the last war, one discovers that Germany was experimenting with a
572
weapon called the V4 during the 1930s. It ultimately became the VI and then the V2. There was nothing conventional about it. While we were still playing around with the traditional methods of defence, the Germans were proceeding quite differently.
Have we examined our NATO allies? We have discussed the Army and the Air Force and we are now discussing the Navy. What does NATO mean in terms of politics today? We have two major powers: the USA, which has encircled the whole of the USSR with devices, and the USSR, which has en-circled the whole of the USA with devices. Those devices are not there for fun. Does anyone believe that if war breaks out the forces that we have in Europe and any big ships or sophisticated submarines fitted with the most modern and up-to-date missiles—I have seen some of them—will be able to stop war breaking out? In my view, the whole of the NATO strategy is completely futile.
Moreover, who says that the waters south of the Mediterranean, south of Simonstown or near Australia belong to anyone? The fact that we were in those waters first does not make them ours. I am not pro-Soviet. If we are entitled to have battleships, submarines and other vessels of war there so too is every other country.
When I hear debates like this, I go back to before 1914 and think of some people who ultimately became known as "Jingoists". They developed the slogan:
"We want eight—we won't wait."
In other words, if the Russians have 1,000 Polaris submarines we must have parity, if not superiority. I sometimes wonder whether we are living in 1975 or 1905.
If war breaks out, can it possibly be a conventional war? It might start as a conventional war. We are living during a time of liberation movements, revolutions and struggles for independence. This is an era of revolution. Time will not stand still just because we want it to do so. It is time we took cognisance of the fact that we have invented weapons of war which will be used.
When President Kennedy said to Mr. Khrushchev "You will remove those

573
missiles from Cuba or else," he may or may not have been bluffing. Perhaps he would have used his weapons. We know that once atomic weapons of any kind are used there is holacaust. Who knows who would survive? Possibly the only people who would survive would be those in Holy Loch. They are well protected.
The Minister is proposing to reduce the Estimates. I wish that he would reduce them even more. In all seriousness, I wish that we could entirely eliminate all weapons of war. We in Govan could still build ships that could carry the goods of the earth to every part of the earth.
5.33 p.m.
Mr. Michael Brotherton: I am sure that the hon. Member for Glasgow, Govan (Mr. Selby) will forgive me if I do not follow too closely his interesting historical and contemporary analysis of the strategy of war. I can assure him that there will be no more battleships built in Govan.
It is right that the third of our debates on the three Armed Forces should take place this week, when the Chancellor is to announce his measures to try to combat inflation. There may be cuts, freezes or squeezes, but we should recall that a Government have only two primary tasks in a free country. Those tasks are to defend and to feed the people. If a Government cannot provide the conditions under which the people can feed and defend themselves, anything else is quite useless. Houses, hospitals, schools, roads and social security benefits are all as nothing if we cannot perform those two primary tasks.
I am delighted to be able to start by congratulating the Government upon not one facet but three facets of their naval policy. I would like to say how delighted I was when, last month, they followed a suggestion I made in my maiden speech last November to the effect that the Beira Patrol should cease to operate. The patrol has wasted millions of pounds and man hours. It has meant that tens of thousands of men in the Royal Navy have been bored to death as they patrolled up and down a useless patrol line. We all know that goods were got into Rhodesia by other means. I congratulate the Government on making this sensible decision. I congratulate them, at long last, in heeding the calls that we made
574
and that other people made to the former Conservative Government to proceed with the maritime Harrier.
Mr. F. A. Burden: Is it not an extraordinary fact that the very Labour Members who dominated the action against Rhodesia and supported the Beira Patrol are the same people who are now saying that we must reduce our defence spending to nothing?
Mr. Brotherton: I am grateful to my hon. Friend for pointing out how inconsistent the Labour Party is in its inconsistencies.
The decision to proceed with the maritime Harrier means that we are opening up the possibility of an enormous export market. There are numerous nations who wish to buy this most advanced aircraft. We are at the same stage with vertical-take-off aircraft as our aviation industry reached with the Comet before the Elba disaster. It would have been a criminal shame had we decided not to proceed with the project. The decision also means that fixed-wing flying will continue in the Royal Navy.
Thirdly, I congratulate the Government on their continuing decision to retain the Polaris fleet. Ever since the 1964 election the Labour Party has managed to be consistent in going against its manifesto pledge, not renegotiating any agreement and keeping the Polaris fleet. My only regret is that we have not built a fifth Polaris vessel. That would have meant that we would have made the deterrent completely credible and watertight because there would always have been two vessels on station and not one, as occasionally happens.
Having congratulated the Government on those points I must now refer, as did my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery), to the question of Simonstown. The Soviet maritime threat throughout the world grows month by month. The Soviets are now moving into fixed-wing flying. They are commissioning their first aircraft carrier. The more we cut back our maritime forces, the more the Russians develop theirs. Now we have thrown away the Simonstown Agreement.
I am reminded of what happened in the 1930s when the Government of Neville Chamberlain abrogated the

575
arrangement whereby we could use the ports of Southern Ireland. We know how many tens of thousands of British lives were lost during the 1939–45 war because we had cast away that agreement for no good reason. The Minister says that there are alternative arrangements to Simonstown. I would like to know where they are. Can they be in Beira, controlled by the Marxist Frelimo? Let us proceed north in our steamer. Do we go into Somalia or do we cross to Aden and ask the Government of the Southern Yemen whether we may use the facilities of that port?
We have already heard that the Singapore arrangements are being brought to a close. What about something in that country? I refer to paragraph 38, Chapter I of the White Paper, which says:
"We plan to withdraw from the staging post on Gan by April 1976 and from the naval communications station on Mauritius. If there is any requirement for facilities in the Indian Ocean area in the future, we shall be able to use Diego Garcia where we have agreed to a modest expansion of facilities by the USA."
In effect the Minister is saying that, apart from Simonstown, there is nothing. Charges of humbug come well from the Minister, who has demonstrated, by the fact that there are no alternative arrangements, that he is an expert on the question of humbug.
Let us move further north to the southern flank of NATO. For the first time for hundreds of years we are to withdraw our forces in the Mediterranean. This is at a time when Greece and Turkey are at loggerheads, virtually fighting one another over the issue of Cyprus. It is at that point that we say we shall not contribute anything more to what NATO can provide in the Mediterranean.
The "Hermes" went to Cyprus at the time of the disturbances. It was only because we had a ship in the area that we were able to evacuate a large number of British families in the northern area of Cyprus. The "Hermes" is part of our amphibious fleet. What is to happen to that? "Bulwark" is to be withdrawn from service next year. "Hermes" is to be primarily an antisubmarine carrier. Of "Fearless" and "Intrepid", only one is to remain in service at any particular time. The Royal Marine Commandos are to be reduced
576
by 25 per cent. Yet the Minister says that we are allocating amphibious forces to NATO.
What is the amphibious force? It has been decimated and emasculated by the policy of the Government. The Government must realise that one of the great things required by any fleet if it is to be credible in size. We cannot reduce the number of our anti-submarine frigates dramatically and at the same time say that we recognise the gravity of the threat posed by the Soviet submarine fleet.
Does not the Minister realise that frigates and patrol boats can indulge in other activities in time of peace? I refer particuarly, from a constituency point of view, to fishery protection. The fishery industry is at the moment being shamefully neglected by the Ministry of Agriculture, Fisheries and Food, and now it would seem that the number of ships available to help look after our fishermen is also to be reduced.
Anti-submarine vessels and other small ships of this kind, if they are available, can help defend the oil rigs. We must concentrate on defending the offshore oil. It is no good right hon. and hon. Gentlemen opposite telling us that ail will be well because in 1980 the oilman cometh when, first, they are mortgaging the oil to the extent that there will be little or no money left and, secondly, if they succeed in keeping any of it there is no method of defending the oil.
Finally, we have a Government who have failed not only in their duty to the nation but also in their duty to NATO. Grave concern has been expressed by many senior NATO officers about the running down of our forces and the cutting back of our Navy.
I remind the House of the words first written in the reign of Charles II, and now the preamble to the Articles of War:
"It is upon the navy … that the safety, honour and welfare of this realm do chiefly attend."
Times change and circumstances change, but the philosophy behind that statement is as true today as it was in the reign of Charles II. It is because of the shameful way in which the Government and the Minister have betrayed the country and the Navy that I shall vote against them tonight.
5.42 p.m.
Mr. Ted Fletcher: I have sat through many defence debates during the last 10 years but this is the first occasion when I have made a contribution to the deliberations of the House. I do not claim to be a specialist on the subject of defence, but having listened to many debates I think there is a common sense point of view that should be put to the House against the points of view of those who claim to have some knowledge of military matters.
Many of us on the Government side are reinforced by resolutions passed at Labour Party conferences and by the TUC in particular asking us to close the Polaris bases and to get rid of the Americans who are using those bases. Therefore, I want to concentrate my contribution on this particular subject and to reinforce some of the remarks made by my hon. Friend the Member for Barking (Miss Richardson).
It is in this context that I want to discuss the 1975 White Paper, which I think is quite evasive when it discusses the future of Polaris. I hope that when the Secretary of State replies he will go into some detail concerning the future of our Polaris submarines. The White Paper says that the Government will maintain the effectiveness of Polaris without moving to a new generation of strategic nuclear weapons. In other words, it seems to many of us on the Government side that the Government are prepared to allow these weapons to go into obsolescence, to rust and to wear themselves out, although on a past occasion the Secretary of State has said that these weapons would be credible right into the 1990s. If that is the attitude of the Government, and if they are not to evolve a new generation of weapons, it would be politically advisable for them to make a statement here and now—the sooner the better—that it is their intention to scrap the Polaris missile.
We have some obligations under the non-proliferation treaty under Article 6 of that treaty we have agreed that it will be our objective to phase out our nuclear weapons. It seems to me that there is no reason why the Government should not, instead of waiting for a few years until this weapon becomes obsolete, take a political initiative—and an economic initiative, in our present economic crisis,
578
because we should save money—to help in particular the discussions now beng held to outlaw nuclear weapons.
It seems to me that we always discuss the subject of defence on the basis of theories that have emerged since the previous war—in fact, from many wars previously, if one listens to the right hon. Member for Brighton, Pavilion (Mr. Amery). His speech might well have been made in the days of Palmerston when he talked about a global strategy and how to deploy our warships in the Indian Ocean, in the Mediterranean and throughout the world. Those days have gone, and in fact the generals have often been accused of fighting the next war with the theories of the last. It would seem that some of the admirals fight their wars with the theories of the war before last.
Mr. Alan Clark: The point that the hon. Member makes about the lessons of earlier wars is perfectly valid, but as long as this island remains a nation of 55 million people dependent on the outside world for its food and its industrial supplies it is necessary to protect the routes by which those resources come into the country. Surely no lessons from previous wars are required in order to hammer this home.
Mr. Fletcher: I quite agree with the hon. Gentleman that it is necessary to defend our country and to protect our ability to get food to this country. This is a problem that every country in the world has to solve, and it is certainly not unique to this country. I imagine that most countries would face very serious economic difficulties if they could not import raw materials from abroad. This is a global problem. It is not a peculiarly British problem. If every country in the world said that in order to solve this problem it needed to deploy its naval strength throughout the oceans of the world, there would be some tremendous complications.
We can no longer act as we did in the imperialist past by sending battleships to areas of the world to put down the natives. We have to think of what the nature of a future war is likely to be. Everyone agrees that it will be a nuclear war. The Soviet Union is now capable of sending a rocket to the moon and of aiming that rocket to reach the moon within a square mile of the target. With

579
that technique the Soviet Union can from its own land surface blow out of the water any surface ship in the world. It is quite easy to find out where these ships are by means of photographs taken from outer space. Techniques exist today for this to happen. This is why Polaris submarines have been developed. Under the surface of the sea they are not as vulnerable as surface ships. But the generals and the admirals do not seem to have accepted this conception of what a future war might be like.
Mr. Burden: Does not the hon. Gentleman realise that his philosophy that there must inevitably be a nuclear war, with nuclear weapons used, is as false as was the philosophy that gas was bound to be used in the last war? It was not used because of the retaliatory measures that would have been taken. The same thing could happen with nuclear weapons. There is a great danger that there would be war with traditional weapons as we know them rather than with the nuclear weapons to which the hon. Gentleman refers.
Mr. Fletcher: I am very glad that the hon. Gentleman has raised that point. As he rightly says, the nuclear weapon has been shown by those people who agree with it to be a great deterrent. It was argued that if countries had a nuclear weapon no one would dare use it and that countries have said "We do not intend to use this weapon unless we are attacked with the weapon by another country". This was a deterrent. As a consequence, there may have been substance in the argument that it would never be used.
But there have been subsequent developments, and the hon. Gentleman, with his great interest in military matters, has probably heard of the Schlesinger theory which says that not all limited nuclear engagements reach holocaust level. He suggests that nuclear weapons should be used at battlefield level and that they should be deployed in what is regarded as conventional warfare. But no one knows how limited a nuclear engagement is. The Russians might take a different view of what is a limited engagement.
We have got away from the old belief that the nuclear weapon is a deterrent
580
which will stop others attacking this country. The theory now being put abroad is that the nuclear weapon is a conventional weapon which can be used at battlefield level.
In reply to a Question a week ago, my right hon. Friend the Prime Minister said that it was not our intention to accept that theory and that we still regarded the nuclear weapon as a deterrent. I ask my right hon. Friends, however, whether any talks have been held at NATO level. Our forces are pledged to NATO. Have there been talks about this new method of using nuclear bombs? I think it is time that the Government considered seriously the position in which they might find themselves.
My only purpose in intervening in the debate is to suggest that defence is a political question and that the solutions can be found only on a political level. It is not a matter of saying that the world can be divided into goodies and baddies and that, if the baddies are rearming, our only answer is to arm ourselves to an even greater extent than they are. We have to find political solutions, and they are being found, slowly but surely. Détente is the order of the day. In a few days' time American and Russian astronauts will be shaking hands in outer space. We are making some progress on the non-proliferation treaty. We have the strategic arms limitation talks. We are now considering seriously the fact that it is economic suicide in the world today that we should spend $100,000 million a year on armaments when half the world is starving. People are coming to their senses. They are putting the military strategists in their place and telling them to get back in the queue.
I am not a pacifist. I want to see the country defended. But it must be done in the context of the larger political problems. I suggest that the Government could make a contribution to a political solution. Backed by the realisation that the Polaris submarines are now obsolete and are being phased out, if the Government were to take a political initiative and say "We intend to abolish the Polaris weapon as our contribution to non-proliferation", I believe that this would evoke a response, especially in countries poorer than ours, such as India or even China, where a great proportion of the national wealth is devoted to

581
nuclear research and to manufacturing the bomb.
It is time for someone to break the vicious circle and to take an initiative by saying "We are taking a tentative step, anyway, to get rid of the nuclear weapon." I hope that my right hon. and hon. Friends will take this very seriously. We have been given a pledge—at least, I take it that it is a pledge—that they do not intend to produce more sophisticated nuclear weapons or to update our present nuclear weapons. If that is the situation, let them take the next step. Let them pledge themselves to abolish the Polaris missiles so that people in Scotland can sleep a little safer in their beds. If the Government do this, I believe that they will have the backing not only of their colleagues in the Labour Party and the trade unions but of the overwhelming mass of the people.
5.55 p.m.
Mr. Richard Luce: I share with the hon. Member for Darlington (Mr. Fletcher) one of the views that he expressed. It is the concern which I am sure every right hon. and hon. Member has about the increasing levels of expenditure which countries incur on arms. We all want to see a reduction in arms expenditure. However, when I hear the views of people such as the hon. Member for Darlington and some of his colleagues I find it extraordinary that they do not appear to have learned the lessons of history about the balance of power.
We should know by now that if we do not secure a balance of power against our potential enemies, we endanger and imperil our freedom. I wonder when the day will come when a certain section of the Labour Party learns the lessons of generations, if not centuries, of history about the balance of power.
The facts are that it is not just Great Britain but the Western European nations which are lulling themselves into a false sense of security. As my hon. Friend the Member for Louth (Mr. Brotherton) said in an extremely powerful speech, the primary duty of any British Government is to secure our own defences and to ensure that we are defended adequately against our potential enemies.
As I see it, the purpose of today's debate is to discuss one major peril
582
threatening not only us but the Western world. It is the growing strength of the Soviet navy. There is no need for me to recite all the figures. They are set out adequately in the White Paper. They have been recited adequately by the Secretary of State for Defence and his junior Ministers in successive debates. They have been recited adequately by my right hon. and hon. Friends. We see the increase in submarines, the increase in frigates, the increase in amphibious forces and the increase in Soviet aircraft. Now we see the construction of Soviet aircraft carriers. There is no need for me to recite all the figures.
The extraordinary feature which my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) brought out so well is that the Government are brilliant at analysing the threat but rotten at finding the right prescription. We see the Soviet navy spreading its tentacles throughout the oceans of the world—not just in the East Atlantic but in the South Atlantic, the Mediterranean and the Indian Ocean. We hear the instruction of Admiral Gorshkov to his navy, "Go out to sea and stay there." We hear other statements by the admiral, such as "All the modern great Powers are maritime States." Those are the words of a naval leader in an imperialist nation. For that reason, we should ask ourselves what are the Soviet objectives in this dramatic expansion, especially bearing in mind that the Soviet Union does not need a vast Red fleet to protect its own supply lines.
I suppose that it could be argued that one of the objectives is a defensive one, because the Russians wish to counter the strategic delivery system of the Western sea Powers. That is a not unreasonable argument. However, anyone looking at the size of the Soviet navy could argue forcefully that it is an arm of Soviet foreign policy. Its objective is a political one. It is to influence, to exert pressure, to exercise threats and to intimidate in various parts of the globe.
It would be reasonable to assume that the Soviet navy is not just defensive. It has the ability to strangle the supply lines of Britain and Western Europe, and so must be assumed to have an offensive capability.
Sometimes I wonder whether some Labour Members realise the facts of life for Britain and Western Europe. The size

583
of the sea mass of the Western world has not changed, nor has Britain's dependence on the oceans for our trade. Ports in Western Europe handle 50 per cent. by value and 30 per cent. by volume of the world's international trade. Oil is the biggest single commodity moved by sea. In terms of tonnage carried by merchant ships, Britain and Western Europe are far larger than Russia, Japan and other great Powers. A total of 32 per cent. of our gross national product is involved in maritime trade. For the United States, the figure is only 8 per cent. We must ask, against the background of these facts, what the Government are doing about the growing threat of the Soviet navy. The Government are cutting by one-seventh the number of destroyers and frigates, by one-quarter the planned number of conventional submarines, by one-quarter the amphibious force, which will weaken the northern flank, and by one-quarter the Nimrod force, which has an essential role to play in surveillance.
It would be churlish not to congratulate the Government on the order for maritime Harriers and on deciding to go ahead with the through-deck cruiser. This has justified the stand taken by naval chiefs in the early part of 1966, when they insisted that there was a need to continue the carrier force or to have a substitute for it.
The northern flank has been badly weakened by Government decisions. The Mediterranean, with serious problems in the Middle East, Italy and Portugal and between Greece and Turkey, is the most politically unstable area of NATO, yet the Government have decided to withdraw from the area. The Soviet navy is exercising a pincer and encircling move on Scandinavia and threatening to throttle the world trade routes and our supply lines. It is in a position to control, block or interrupt our military and civilian supplies which come by sea.
How can we respond? The Government have been keen to talk about cuts in public expenditure. We want to see these cuts, and we should be looking for ways of economising in defence services. The obvious ways to make savings are in arms procurement and standardisation. The NATO navies have a hundred different types of ships of destroyer size or
584
larger. Mr. Schlesinger said in January this year:
"Within NATO, the combat effectiveness of existing forces could be improved by one-third, with no increase in forces, if we were able to obtain greater standardisation."
So we could economise by a common attack within NATO on procurement and standardisation.
We must also get a common view within NATO on the right way of interpreting statistics about defence budgets. We should not be talking about proportions of gross national product. We should be considering the per capita contribution, and the absolute contribution of each nation, and, above all, we should be considering the strength of our potential enemies. That is our most important criteria.
As a maritime Power, we should be taking a lead in ensuring the stability of the northern flank of NATO and the Mediterranean. We are the largest Navy in the European part of NATO, and we should be taking the lead in its maritime strategy. I would go some way in agreeing with the Under-Secretary that there is an argument for specialisation between different countries—one nation may be better able to play a particular role in defence rather than another—although there are dangers in taking this argument too far until we have a really united Europe. We are strong and experienced on the naval side, and if we lose that strength NATO loses a vital aspect of its defence. It is essential that we should ensure that NATO has an adequate naval strength to counteract any Soviet political or military threat.
When one realises the reliance of NATO Powers on the trade routes of the South Atlantic and Indian Ocean, it seems wrong that their area of responsibility should stop at the Tropic of Cancer. For many generations Britain has been carrying the burden of maritime defence for many other Western European nations. It is time that NATO became more outward-looking and adopted a proper maritime strategy. Look at the Gulf and the Soviet position in Somalia and West Africa. It is essential that NATO should become more outward-looking, and Britain is the only nation that can take a lead in this development.
6.8 p.m.
Mr. Arthur Palmer: I do not often speak in defence debates but I have followed the subject from a distance for some years. Recently the Select Committee on Science and Technology, of which I have the privilege to be Chairman, has been looking, perhaps rather obliquely, at an aspect of defence—some of the strategic problems posed by the North Sea oil installations.
My interest in defence has been brought up to date recently. With colleagues of the Labour defence group, I spent an interesting day at NATO. In the short time I was there I found a genuine understanding of Britain's economic problems. Our friends on the Continent have too much good sense to be compassionate about Britain—they know we would resent it—but they understand that there is a direct link between defence commitment and economic capacity. That is true of all industrial societies.
If a country takes its defence effort beyond its industrial capacity to sustain its commitments, this could easily be disastrous, as has been demonstrated in the last 100 years in the history of European wars. Nevertheless—and here I differ in approach from some of my hon. Friends—the United Kingdom cannot expect to shelter under the protection of the NATO umbrella without at the same time making a fair and effective contribution to collective defence.
British naval strength is of the greatest importance, for we have a long naval tradition and vast sea experience. Present circumstances dictate that we must commit that naval capacity to northern waters and to what are generally known as the Atlantic approaches. I have always opposed my grander party colleagues, even those in the leadership, who thought that the Royal Navy should be used as a kind of world police force to put out "bush fires". I can remember an eminent leader of my party using that description of the Navy's role. I think that is a certain prescription for our getting involved unnecessarily in every petty war that is going. My instincts were against it, and I am glad that the Labour Party has now seen sense in that respect.
It was absolutely right in my view for us to withdraw from our Far East com-
586
mitments, including Singapore, and leave the Pacific to the Americans, the Australians and their new Pacific allies. I agree with quite a lot of what was said by the right hon. Member for Brighton, Pavilion (Mr. Amery) about the problem of the Indian Ocean, but I do not believe that the United Kingdom can do it alone or should attempt to do so. It is no good saying that if we begin, others will follow. That is the kind of thing one says when trying to fill a gap in one's thoughts, but it does not represent objective reality.
However, there is a stronger case for a kind of extra NATO where that alliance would take on a wider collective global rôle to fill in the gaps which the Americans are incapable of filling and should not be expected to fill. There is in the United States the same public concern about overstretching national economic resources for defence as exists in this country. With our obligation, then, to concentrate on Europe and the Atlantic approaches, the fast expansion of the Soviet Navy is to us of the greatest importance and interest.
The hon. Member for Shoreham (Mr. Luce) said that the objectives of the Soviets were political. Of course they are. That is true of all countries. War is a continuation of politics by other means. That was the saying of a great German military strategist, and it is a fact of life. War and politics are inescapably linked, so one must not complain if the Soviets see naval expansion as a way of extending their political influence. It is our business to note it and react correctly to it; to do less would be to neglect our duty.
If I were to attempt to give an explanation for this new Russian interest in naval strength I would put it under three heads. The first is historical. The Russians have a great sense of inferiority about their past naval achievement. It has not been outstanding, unlike their great history and glory as a military power on land. I need not dwell on their experiences at the beginning of this century with the Japanese or their disastrous failure in the First World War. They made hardly any naval contribution during the Second World War. Therefore, their leaders and their admirals—who, like all admirals, are ambitious men—wish to further their reputation and

587
their careers and to make up for their country in the present what it failed to do in the past.
The second reason is the power relationship. I think the Soviets resent—and it is understandable—the way in which the Americans have come from the other side of the world to fill the vacuum in naval strength, particularly in the Mediterranean and the Middle East, which has been left by the withdrawal of the French and the British. I think that the Soviets expected to fill that vacuum as the Czar would have expected to do so before them.
Thirdly, I think the nature of Soviet society is stern, and we in the Labour Party, particularly, have to face that fact. In many ways Communist Russia is a modern Sparta where the military virtues are greatly extolled. I was in Portugal last summer and had some political conversations. I do not think that it is any accident that there is a curious alliance between many military, naval and air force personnel in Portugal and the Portuguese Communiss. A Communist society offers many opportunities for promotion of military men.
Mr. Neville Trotter: Is it not in that respect greatly similar to a Fascist society?
Mr. Palmer: I do no know about that, but would say that Soviet society has one obvious advantage in history over Fascist societies in that it tends militarily to be more efficient because it organises the masses. We should, therefore, not be surprised about Russian naval ambitions. That would be idle. Our business in life is to protect our own country and its allies. The pace and freedom of the world depends on the free nations reacting correctly and objectively to that situation now we have recognised it.
I am a Social Democrat, and I do not use the term in the way that The Times uses it, as a kind of Liberal who has strayed out of true. I use it in the Socialist historical sense, which is certainly well understood on the Continent if not in Printing House Square. As a Social Democrat I had hoped that the Soviet Union, without losing the Socialist economic character of its society, would develop in a more pluralist way and give more individual freedom to its people.
588
So far my hope has been disappointed. Nevertheless, we must strive for disarmament by mutual agreement, and this Government, like their predecessors, are striving in that direction. Discussions have been going on for months in Geneva and Vienna in an attempt to get controlled and agreed disarmament. We must continue with that and never stop trying, for the burden of arms weighs us all down.
I come finally to the extent of defence. Frankly, I believe that the percentage-cut approach is absurd. We really cannot do it in that way. We need effective defence in relation to commitments—no more, no less. That is largely a technical question and hard to judge. I am afraid that effective defence must include nuclear weapons, because they are, regrettably, the way the science of war has gone. Mass death and destruction is always horrible whether caused by nuclear weapons or by weapons of any other kind.
I respect my hon. Friends who have spoken for their doubts and worries, and certainly I do not ignore what my party has said in conference on these matters, either. But if, as my hon. Friend the Member for Barking (Miss Richardson) and others have said, they are not pacifists—and I accept it—I believe the logic of their argument is really neutralism and that Britain should withdraw from NATO, although that is not said as often today as it was in the past. We shall perhaps then become a Sweden or a Switzerland, and there is nothing dishonourable about that. But if we were to do so it would not help to save money on defence, because the percentage of public money committed to defence in Sweden and Switzerland is greater than in this country or generally in Western Europe, for the obvious reason that if a country has to defend itself individually it will cost more than doing it collectively with allies.
The defence cuts that have been made so far were financially inevitable. Had the Conservative Party continued in office, probably it would have reached roughly the same financial conclusions as the Government have reached. That is my own objective view. I do not mind the Conservatives arguing or criticising, for that is the business of an Opposition,

589
but I feel that we have now reached the limit and that that is the opinion held by the British public, in spite of our economic difficulties and irrespective of party.
There are many millions of our fellow citizens who have lived through two world wars. I am one of them, though I was very young—in my early childhood —in the first world war. Like so many others, I lived through those wars and all the trials and tribulations that went with them. There are many millions in this country who have that memory, and in view of those experiences, I do not think they would lightly forgive any British Government who might be tempted to neglect the effective defence of Britain. I do not believe that we have such a Government. I have every confidence that my right hon. and hon. Friends will care for the effective defence of their country and will do so with prudence and economy.
6.14 p.m.
Mr. Antony Buck: It had always been my resolve to start my speech on a harmonious and uncontroversial note. That resolve has been made easier by the speech we have just heard from the hon. Member for Bristol, North-East (Mr. Palmer). I do not think there was a word he said with which I disagree. I agree with almost everything he said, just as I profoundly disagree with almost every word of the speeches we have heard from the hon. Members for Barking (Miss Richardson), Glasgow, Govan (Mr. Selby) and Darlington (Mr. Fletcher) and probably shall disagree with the speech we shall hear from the hon. Member for Edinburgh, Central (Mr. Cook) if he is fortunate enough to catch your eye, Mr. Deputy Speaker.
Mr. Robin F. Cook: I hope the hon. and learned Gentleman will bear in mind that I may be in the position of following him in this debate, and I hope that he will allow me to make the same pleasant opening to my speech as he himself has made to his.
Mr. Buck: I doubt very much whether the hon. Gentleman will be able to say that he agrees with everything that I shall say unless he has a profound conversion "on the road to Damascus" within the next few moments. One can only hope for the best.
590
The speech of the hon. Member for Bristol, North-East was a distinguished one. I will continue on a harmonious note by offering to the Minister who opened the debate my wholehearted congratulations about one matter relative to defence, the decision by the Government to order the maritime Harrier. It may well be known that during the time I had the privilege of being Minister for the Royal Navy I strove hard to get a decision made on those lines. I was not successful. Treasury Ministers are very powerful in any administration, as everybody in the House knows, and a decision was deferred, and was deferred again. At least we did not make the decision not to go for it. Had we done so, I would have resigned.
My resolution relative to the Harrier that we should eventually have the Government arriving at a right decision was made the stronger after I had made a flight in this revolutionary aircraft. Through the courtesy of Hawker Siddeley I flew in it, and shall always retain the memory of doing so; and I would like to repeat the performance. We took off vertically, and then accelerated almost as though the aircraft was being ejected from the barrel of a gun. It was a wholly remarkable experience. I was very grateful to Mr. John Farley the test pilot, who took me up in the aircraft.
I saw on the horizon what looked like a warship and spoke over the intercom asking whether it was. The reply was "You are the Minister, so we will find out." We zoomed down, and stopped in mid-air as near to the captain on the bridge of H.M.S. "Torquay" as I am to you Mr. Deputy Speaker. He was a little surprised, in the middle of a navigation exercise 200 miles off the coast, at finding his Minister peering at him as he stood on the bridge. When I got back to the office now occupied by the Minister who opened the debate I made haste to dispatch a fleet signal sending greetings to H.M.S. "Torquay" before we could receive a fleet signal from that ship complaining about being "mobbed up" by a Hawker Siddeley Harrier
It is indeed a truly remarkable aircraft. The fact that there are more than 100 of them flying in the United States, with the American Marines, clearly establishes it as a remarkable aircraft that can jump

591
everything, including national barriers and national prejudices. The Government are wholly right to go for the maritime version with its extended range, more powerful radar and all-weather capacity. It will make H.M.S. "Invincible" and the ships that follow of the same class much more powerful weapons in the hands of the Royal Navy.
I have no doubt that the decision to go for this aircraft will be justified also on the ground of the exports that we shall be able to achieve, a very important matter. Many navies will be interested in acquiring this aircraft, navies which would not have taken the plunge of purchasing an aircraft of this character from this country had it not first been ordered for the Royal Navy. I congratulate Hawker Siddeley on this fantastic development, and I have little doubt that there will be considerable overseas sales arising in the future.
I only hope and pray that the great firm of Hawker Siddeley will be spared nationalisation. From now on it will be necessary for me to become less harmonious in what I have to say. The Minister was asking my hon. Friend the Member for Ayr (Mr. Younger) to indicate what further savings we should seek. Here is a saving which springs to mind at once, a saving which could be effective. Let Hawker Siddeley continue to operate efficiently and well under its present management and save the money that it would cost to nationalise it.
Precisely the same applies to the savings which could be effected by dropping plans to nationalise our warship building firms. It would cost the taxpayer many millions if the great firm of Vickers were nationalised. The same applies to the highly efficient firm Vospers, which does so magnificently in the export market, and the Scottish firm of Yarrow. Sir Eric Yarrow has done supremely well in establishing a place in export markets and building ships for navies throughout the world. We can suggest straight away savings of many millions simply by not nationalising those firms.
From the gloom, mist and chaos created by the Government relative to defence matters, there is, then, one ray of light, which is the good decision to go for the maritime Harrier. The general
592
position, however, is that, first, we had the so-called long-term review. This took a long time in preparation, and I do not quarrel with that. I know how hard the Department was working in preparing the review. That review was designed to set the pattern, so we were told, for at least 10 years or so. The ink was hardly dry—I cannot say on the print because the review was not printed at first because there was a strike. The typescript was hardly smooth on the paper before there was another £110 million cut.
It was said to be not an "arbitrary" defence review, but, of course, it was arbitrary. The instruction laid down was that there should be a review which would effect a cut in defence expenditure to bring us into line with our less defence-conscious allies in the proportion of GNP spent on defence. Indeed, the White Paper so indicates. Almost at once a further cut of £110 million was announced. We have not yet heard how this further £110 million cut in expenditure will affect the Royal Navy, and I hope that the Minister will take the opportunity of telling us tonight.
Perhaps the Minister will assure us also that the White Paper to be produced by the Chancellor of the Exchequer erelong will not contain yet further defence cuts. The White Paper is not like a Budget, so perhaps there might be a little leak and the Minister might assure us that the White Paper will not include yet another defence cut. Perhaps the Minister will be able to assure his constituents in the dockyard that they will not be affected by what the Chancellor of the Exchequer announces in his White Paper.
That is the situation of the so-called long-term review, from which another £110 million was cut, and we understand that things are yet again in the melting pot.
One of the most serious effects of the review was to cut back the shipbuilding programme so that some 14 planned ships are not to be part of the Navy. What a conclusion to draw after what has happened in maritime affairs, as the Minister pointed out. Ever since Cuba there has been a truly massive maritime build-up by the Russians under Admiral Gorshkov, who has been able to sell the whole idea of maritime strategy to the Politburo so that forces have been

593
built up at a fantastic rate. Yet the Government decided on one substantial cut which was followed by another cut. I only hope that there is not to be a yet further cut.
Mr. Burden: Is it not extraordinary that the Government always pronounce on the Russian threat but, having pronounced on it and said how great it is, they cut expenditure right down until we have no defences left?
Mr. Buck: I agree with my hon. Friend. A substantial element of schizophrenia is shown by the Labour Government in relation to this matter. One has the brilliant deployment of the maritime threat, which is nearly as good as the "Know your Navy" team in action —it is probably written by the same people—followed by the answer that we must have a unilateral cut. It ties in with the theme put forward by Government supporters that the cuts are an instrument for détente. Again the same sort of schizophrenia comes through—we are all dedicated to force reductions, but we want them to be balanced force reductions. To say that we are assisting détente by a unilateral cut involves an element of intellectual gymnasticism bordering on the schizophrenic. The conclusion of all that is that I agree with what my hon. Friend the Member for Gillingham (Mr. Burden) said in his intervention.
One of the most distressing aspects of the White Paper concerns the withdrawal of our presence on a permanent basis from the Mediterranean. What has happened to that sea over the last year and more surely illustrates how important it is that we should play our part in maintaining stability there. When our NATO allies are in semi-conflict, or in actual conflict as were Greece and Turkey, when other nations close to the Mediterranean—Portugal and Spain—are showing signs of instability, it is a great shame that we should withdraw our NATO presence, particularly as we were one of the leaders in setting up the Standing Force for the Mediterranean.
I take no particular satisfaction from the fact that the Italians have decided to increase their contribution to replace us. I am delighted that they are increasing
594
their contribution. But I had hoped that those forces would have been deployed side by side with the modest British presence in the Mediterranean. All the political events show the need for that deployment, and the withdrawal is particularly ill-advised, as, indeed, is the cutting down of the shipbuilding programme. When there is a submarine threat so vast as is the Russian threat, to decide to cut down the number of frigates and destroyers to be built is totally wrong.
The Minister and I share a devotion to the Royal Marine commandos. He and I paid a visit to HMS "Bulwark". We both enjoyed that visit immensely, and it increased the admiration we share for the Royal Marines. It is an odd way of showing one's admiration to cut out one whole marine commando unit. They are superb troops with a maritime tradition and with the tremendously useful capacity of amphibiosity—just the sort of capability we need—especially when one sees what the Russians are doing with the Alligator class ships, which are capable of a very big lift of amphibian-borne troops. The Russians are building up and we are cutting down, and I am very sorry to see that gap growing.
I bitterly regret these cuts, the more particularly because they follow cuts which the Conservative Government had reluctantly made. The fact that we made cuts renders the cuts made by the Labour Government less defensible, not more so. Of course, from time to time we have to make defence cuts—the sky is not the limit—but the fact that we made cuts makes these further cuts, which go into the flesh and muscle of our forces, less easy to defend.
I tabled a Question to the Secretary of State with a view to suggesting one way of helping the defence budget; that is, by extending the amount of assistance we give to foreign nations relative to training over here but charging for it. There are no fewer than 71 nations, which are listed in yesterday's Official Report for my benefit, which have forces training over here. I suspect that we are not charging those nations an economic rate for the job. The Government should carry out an exercise to discover whether money is being made from this. If there is any liability, that sum should

595
not come out of the defence Vote. Otherwise there would be further artificiality in the GNP argument.
The previous administration set up an investigation into the rôle of the Royal Naval Reserves. The Government have received its report. The Minister referred to the reserves in opening. Will lie publish the results of the study group which was set up by the Conservative administration? At least, will he issue what might be described in security terms as a "sanitised" version of it, so that we can know what is the departmental thinking about the reserves. The Royal Naval Reserves have a considerable rôle to play in the defence of off-shore oil rigs. Here is a duty which the Royal Navy Reserves can perform and on which they should concentrate. They would be willing to do so. I made sure that this consideration was inserted in the terms of reference of the investigation.
I had a splendid time as Minister with responsibility for the Navy. I know that the Minister is enjoying himself immensely. He values the naval tradition. The fact that he has a dockyard constituency perhaps has nothing to do with that. He inherited as Minister the finest Navy in the world. It is still that. It is also the third most powerful Navy in the world. I hope that the Government cuts will not force it to cease to be the third most powerful Navy. I trust that the Government will allocate sufficient funds so that our Navy remains the best Navy in the world, although inevitably not the biggest.
6.42 p.m.
Mr. R. Bonner Pink: I am happy to follow my hon. and learned Friend the Member for Colchester (Mr. Buck), as I agree with so much of what he said.
I join in my hon. and learned Friend's references to the hon. Member for Bristol, North-East (Mr. Palmer). I agree with much that he said. For instance, he said that NATO must fill the gap left by the Americans. I agree. The Western world must fill that gap. That supports the opinion of the Opposition that we need larger, not
596
smaller, defence forces. I agree that defence expenditure must not exceed our capacity to pay. It is not a question of whether we can afford the money which is spent on defence; it is a matter of how we spend it. The Opposition have already indicated how, by stopping the nationalisation plans, money can be found to increase our expenditure on defence. The effective defence of the United Kingdom must depend not on the money supply situation. It must depend on our commitments. I am sorry that more Government supporters do not appreciate that. It is a sad reflection to see how few Government supporters are present for this important debate.
I join the tribute paid by the Under-Secretary of State to the Navy, to the men and women who man the ships and establishments, for their highly professional attitude, their great efficiency and their great heart. I pay my tribute to the people who man our Fleet.
However, I join issue with the Minister when he says that we are moulding a Navy matched to modern needs. My hon. Friend the Member for Ayr (Mr. Younger) referred to the Minister's spine-chilling recitation of the build up of the Russian fleet. How can that build-up be matched by the reductions proposed by the Government. The Minister said it was essential that we should maintain the Atlantic link. He said that we are capable of maintaining that link now. The Russians are building one nuclear submarine every month. We must bear in mind the situation with which we were faced at the beginning of both world wars, when the enemy had only a handful of submarines. Bearing those facts in mind, how can he say that our Atlantic link is safe when even one year's production of Russian nuclear submarines could shatter it.
It was said that we are putting our main effort into anti-submarine capability. Why are the cuts to affect the Nimrods? If we are to destroy enemy submarines we must first find them. The Nimrod is the finest instrument for finding submarines. Why is the number of frigates to be cut? We cannot say that our effort is being put into anti-submarine capability when cuts are being made in our vital resources.

597
Hong Kong was mentioned. I hope that the Government will consider changing the type of ship stationed there. The Government have decided to withdraw from Simonstown, from Gan and from Singapore. Hong Kong is, therefore, left out on a limb. That is a vulnerable situation for any major warship. I suggest that we employ a small, fast patrol boat, strongly armed with missiles. I refer to the type of small patrol boat which Vosper has built successfully for so many foreign navies.
I add my annual plea for one more Polaris submarine. This matter has already been referred to. An addition of one Polaris submarine to our fleet of four would double the effective strength of that force at sea. Every year it becomes more important that we should build an extra Polaris submarine as a future replacement for our ageing fleet of submarines.
The Minister glossed over the comparatively new commitment of the Navy to look after the North Sea oil rigs. We were told that our needs will be met from North Sea oil by 1980. As our dependence on North Sea oil becomes greater, so the need to protect those wells increases. Those installations are vulnerable. They could easily be damaged by collision, hostile action and sabotage. They are difficult to protect. Their numbers are growing and they are widely dispersed. The Daily Telegraph of 3rd July reported that the Navy had ordered five off-shore patrol vessels, each vessel being 200 ft. long and of about 1,250 tons displacement. Will the Minister give us more details about these vessels, such as their speed, their endurance and how they will be manned, whether they will be armed, and whether they will be manned by the Navy, or—following the practice of the United States coastguards —by Royal Naval Fleet Auxiliaries?
I should like to have more information about those vessels and also information on what other steps the Government are taking to protect the oil rigs. Are the oil rigs to have, for example, helicopter coverage? Are they to have radar protection—the modern equivalent to the anti-submarine loop? I know that the Russians would like to know these things, as we would, because I understand that their radar trawlers have been snooping
598
around for a long time, and that a cruiser had a look at the oil rigs not long ago.
There could well be a case for comparatively small, fast patrol boats of long endurance—in other words, boats similar to the weather ships stationed in the North Atlantic—that can stay at sea for a comparatively long time, and for a back-up of major warships at strategic positions.
This is probably the most vital issue which we have to examine in the immediate future. We have only between four and five years in which to obtain an effective defence for these oil rigs, without which all our planning—the Government's planning, and economic planning—which depends on our need for oil being met from the North Sea, will disappear.
I hope that the Minister will inform us of his plans. Obviously, he cannot give us much detailed information, but how is he proposing effectively to protect the North Sea oil rigs?
6.51 p.m.
Mr. Robin F. Cook: I apologise to the House for having missed half an hour of the debate earlier in the evening, but, unfortunately, I was recalled to the Committee on the Community Land Bill where the usual channels had not made their calculations with their customary precision. As I am a member of that Committee it would be unusual if I were to go into the gravamen of my argument without commenting on the quite extraordinary remarks made by the hon. Member for Ayr (Mr. Younger) in relation to the Community Land Bill.
In passing I should like to place on record my extreme surprise at the fact that an Opposition Front Bench spokesman should not have been prepared to allow at least one intervention during his speech from the Dispatch Box. I hope that that will not become a precedent.
The hon. Member for Ayr said that the Community Land Bill in a full year will cost the nation £300 million. It would be dishonest of him to let it go at that and not admit, as I am sure he would if he were present, that the very sentence from which he lifted that remark in the Explanatory and Financial Memorandum on the Bill goes on to say that in the same full year disposal of land will come to £800 million or £900 million and

599
that the net effect of the Community Land Bill will be a saving to the Exchequer and to local authorities of some £550 million in a full year. It is quite remarkable to criticise the Government for wishing to spend public money by referring to one of the Bills they have introduced with the purpose of saving money to the public authorities, both local and central.
Moreover—and this is another point which we must get fixed in our minds if we are to make sense of this debate and the general argument on defence cuts—it is confusing the issue to relate expenditure of public funds for purchase of ownership such as land, with expenditure of public funds on, for example, defence, which not only is a burden on public expenditure but also has a real resource cost to the economy. This is why many Labour Members wish expenditure to be kept as low as is reasonably possible so that the burden of the resource cost to the economy is kept as low as possible.
Mr. Trotter: Will the hon. Gentleman not accept that the running losses of one nationalised industry after another are a very heavy burden on the economy? Is he so hopeful as to imagine that profits might be earned in future by the nationalised industries?
Mr. Cook: The hon. Gentleman has taken me into a much wider area than the present debate. He will be aware that the reason why nationalised industries make losses on returns on accountants' losses at the end of the year is that successive Governments of both colours—I do not wish to make party points—held down the prices below that which the market could bear and that which was needed to cover investments.
I should like to take up the point made by a number of Conservative Members about the Russian navy. I did not intend to do so but points have been raised to which I should like to attempt a reply. All Conservative Members who have spoken have referred to a massive and modern Russian naval build-up. I recognise that their remarks reflect quite a number of Press reports which, over the past two years, have dealt with precisely this subject.
However, it is remarkable, when one starts to study this area, how very little authoritative study has been given to the
600
alleged claim that there has been a massive Soviet naval build-up. The most recent authoritative report is the one that was published by the Brookings Institution 18 months ago. I assure hon. Members that the Tribune Group has no share or financial interest in the Brookings Institution. Indeed, we do not normally find much comfort in its publications.
In its publication 18 months ago on the Soviet naval strength it came to the interesting conclusion that between 1958 and 1973 there was no increase in the number of surface vessels in the Soviet navy. It stated that the number of persons employed in the Soviet navy over that same period declined from 750,000 to 500,000 and that the period of conscription in the Soviet navy was reduced from four years to three years. This meant that not only did the Russians have fewer men but those men spent less of their time on operations. Moreover, there was little evidence that a higher proportion of ships had been built in recent times. In 1958, three-quarters of the Soviet surface fleet had been built within the previous eight years. In 1973 only one-quarter had been built in the preceding eight years.
I appreciate that these figures are two years old. I am only a layman and I have access only to published information. It is possible that the Minister has carried out more recent and deeper research into this subject and he may have other figures available. If so, I hope he will take the opportunity, when he replies to the debate, to make these figures available to the House. It is extraordinary, if we continue to postulate an increasing and accelerating Soviet build-up, that the figures are not available. In so far as information is published, it would not appear to support the quite wide and extraordinary allegations that have been made.
The difference is that the Soviet navy is being deployed in a way that it was not in 1958.
Mr. Patrick Wall: I think the hon. Gentleman will find the answer if he studies "Jane's Fighting Ships". He will find that in fact the number of Soviet ships has increased. What is more important is that where a conventional submarine has been

601
scrapped it has been replaced by a nuclear submarine; where a Soviet destroyer has been scrapped it has been replaced by a Kara class cruiser, which is probably the most powerful warship in the world.
Mr. Cook: The hon. Gentleman is correct. I would not attempt to disagree that the Soviets are going in for nuclear-powered submarines. At present the nuclear-powered submarines available to the NATO forces greatly exceed those of the Soviet fleet.
Mr. Wall: No. That is absolutely wrong.
Mr. Cook: We can take up the actual figures later. I am sure that the hon. Gentleman and I can clarify this matter behind Mr. Speaker's Chair.
On the matter of deployment, the right hon. Member for Brighton, Pavilion (Mr. Amery) dealt at length with the Indian Ocean. He referred to the specific Russian fleet as having a predominance in that ocean. I have with me the statements that were made to the Senate hearing only last month by the American Chief of Staff. General George Brown, Chairman of the Joint Chiefs of Staff, said that the Russian presence in the Indian Ocean had hardened into a cruiser, two destroyer escorts, two minesweepers, two amphibious ships and a submarine. The Secretary of State for the Defence Department, Mr. Schlesinger, said that the American presence in the Indian Ocean consisted of a carrier command ship and two destroyers. We are aware, of course, that it is American naval practice to have a nuclear-powered submarine in attendance on a carrier. Therefore, the difference is not so striking. It is not such as to give the Russian presence a predominance.
However, to the American presence must be added the further observations made by Mr. Schlesinger that over the past 18 months there have been seven deployments in the area in augmentation of their permanent presence including five visits by a carrier, again with two destroyers and a submarine. This accounts for over one-third of that 18 months. In other words, for a third of the previous 18 months the American presence in the Indian Ocean had been greater than that of the Russian.
602
Of course, if one is a Russian and sitting in the Kremlin looking at the map and worried about the question of balance, one looks not simply at the American and Russian presence but also at the fleets of France and Britain. If one looks at the Indian Ocean balance and the ships present there, one finds that in March 1974—again I apologise because these figures are necessarily a year old; I can rely only on published information, and I should be grateful if the Minister would correct me later if that is necessary—the surface combat vessels of Britain, France and the United States in the Indian Ocean totalled 16. In the same month there were only eight surface combat vessels of the Russian navy present in the Indian Ocean.
That hardly indicates the kind of predominance which the right hon. Member for Brighton, Pavilion would have us believe was occurring in the Indian Ocean. Certainly this deployment by the Russian Navy is new and serious, and it is certanly regrettable, but it is not the convincing argument for a British naval build-up which some Opposition Members are asking us to entertain.
Particularly, it is not a convincing argument for expansion of the base at Diego Garcia. When my hon. Friend the Under-Secretary referred to the expansion of the base at Diego Garcia, I could not help noticing that there were murmurs of general approval from the Opposition. When he referred to the Russian expansion of the base at Berbera there were also murmurs, but of disapproval and contempt.
However, I ask the Minister to say how he sees these two developments as being so very different. Looking again at the statements to the Senate hearings only last month I notice that Mr. Schlesinger says that the Russians at Berbera are building a runway of three miles. Therefore, we at Diego Garcia must have a modest expansion of the runway to 12,000 ft. If my calculations are right, there is certainly a difference between three miles and 12,000 ft.—but a difference of about 25 per cent., a moderate difference, and certainly not the difference between a threatening and damaging military expansion and a merely modest expansion on that island.

603
It is a fact that the Americans are proposing to spend over $100 million in expanding Diego Garcia and that their Chief of Air Staffs has said that they will from time to time station F111 bombers on the island. I am deeply disturbed by what appears to be known about Diego Garcia expansion. I am particularly saddened when I remember that at the Senate hearings last year, 1974, William Colby, the Director of the CIA—again, not a card-carrying member of the Tribune Group—said that if there were an expansion of the American naval presence in the Indian Ocean it would be matched by an expansion of the Soviet naval presence. That is exactly what we have seen happen over the past 12 months. This saddens me. I remember also last year that Senator Henry Jackson —again, no, member of the Tribune group—said:
"From time to time opportunities for regional restraint present themselves; and in my judgment the region is the Indian Ocean and the opportunity is now."
I am afraid that the events of last year have been that we on the Western side have sacrificed that opportunity and that there now is little opportunity for restraint in that area.
I ask the House to consider this question. What is really our self-interest in this area? The Minister said that we respect the views of the littoral States around the Indian Ocean, but he will be aware that many of them have expressed grave disquiet over the expansion and development at Diego Garcia. I should have thought that even those who are worried about the trade routes, their protection and their strategic importance, must recognise that it cannot be in our interest to affront the good will and the stated intention and desires of the littoral States that surround those trade routes. I find it deeply patronising that we seem to think that we can protect our trade routes in areas of the world far distant from our shores only by having our own naval or military presence there.
The right hon. Member for Brighton, Pavilion said that once upon a time the Indian Ocean was a British lake, but that it now no longer is. Of course not—rightly and properly so. The idea of the Indian Ocean being a British lake was a patronising affront to those States that
604
surround that ocean. I do not find it much of an improvement—nor would their Governments probably—to try to turn that ocean into a European or Anglo-American lake, or, indeed, even, with the Soviets, a Caucasian lake. Obviously, the littoral States want us to avoid an arms race in that area, and it would be to our advantage to assist in that objective and thus, by protecting the good will of those States, to protect our trade routes.
Lastly, I am seriously concerned about the very large number of references in this debate to the need to get south of the Tropic of Cancer. Over the last two or three months the significance of the Tropic of Cancer has taken on the same importance in strategic debates as east of Suez did in the 1960s. I find this a rather serious development. Diego Garcia is part of the drive to get NATO to commit itself south of the Tropic of Cancer.
I rather fear that our termination of the formal agreement with South Africa over Simonstown may mask a growing involvement in that area. It is extraordinary that, at a time when we are ostensibly cancelling that agreement, the South Africans are spending 10 million rand on expanding the harbour facilities. I should have thought it unlikely that they would do that if they were sure that there would be any less usage of the port by foreign States.
I am also gravely disturbed by some information that has come to light over the last few months regarding the communications falicitics at Silvermine, immediately adjacent to the port of Simonstown. We are all aware of the Press reports showing that these facilities were built with equipment purchased using NATO codes on NATO forms. It has been claimed that this is standard commercial practice, and that it merely assisted South Africa in obtaining the commercial contract which it otherwise would not have obtained. What has not received the same Press attention and is much more disturbing has been the suggestion, particularly from Denmark and Holland, that NATO is getting information based on these communications facilities and that we are giving them our IFF codes for cancelling out British and NATO ships and aeroplanes and are, in return, receiving information about other

605
ship movements in the area. This is very serious and disturbing.
I am worried that we are seeing a drift south of the Tropic of Cancer, but not one being done openly on the basis of open debate, but covertly, behind closed doors. If there is a compulsion to move south of the Tropic of Cancer let us debate it openly. But I can see, against it all the weighty arguments used against the British presence east of Suez. I remind hon. Members that this takes us back to the general question of Britain's rôle at the end of the Twentieth century. That rôle must be related to our economic stature, and our position in the league of nations.
I should like to refer to one or two remarks made by hon. Members on the relative lack of presence on the Government side of the Chamber. I ask hon. Members to appreciate, as I am sure they do, that there are many other demands on the time of Members. However, I remind them that last night I and my hon. Friend the Member for Hornchurch (Mr. Williams) were here for a debate on arms sales on a motion put down by the official Opposition, and indeed, we found the position reversed. There were fewer speakers on the Opposition side then than there are now, but the Government side was able to maintain its presence to the end.
The point made repeatedly in that debate, which links in with the general concern as to the defence review in this debate, was that by going in for arms sales Britain is being enabled to keep up a military pretension and an arms industry which it could not otherwise afford. The tragedy of tonight's debate has been that it has shown us how many Opposition Members have still failed to realise that we are carrying on military commitments beyond our shores which we do not have the capacity to fulfil. I should very must regret it if, as this lesson is being learned by more and more members of the public though not by hon. Members, we were to go in for a maritime strategy far ranging and far beyond those shores.
7.10 p.m.
Colonel Sir Harwood Harrison: First, I answer two of the points that have been made by the hon. Member for Edinburgh, Central (Mr. Cook). If the hon. Gentleman reads Hansard tomorrow
606
he will see that his figures were a little out as regards the American runway on Diego Garcia. The American runway will be shorter than that built by the Russians. Of course, the Americans are part of NATO and are our allies; the Russians are not.
Secondly, it is always easy to cast aspersions on how many Members are present on one side of the House or the other. However, I think it will generally be agreed that today the Liberals have been conspicuously absent. I have been sitting behind their empty bench throughout the debate.
I did not try to speak, as I normally do, on the Army Estimates or on the Air Estimates because I knew that I had been invited to a naval conference in Annapolis by the Supreme Commander of SEALANT. I was accompanied by my hon. Friend the Member for Haltemprice (Mr. Wall). I am sad to see that my hon. Friend has deserted the back benches, but I congratulate him today on occupying our Front Bench. We were not able to run too wild at the conference because we were accompanied by the Under-Secretary of State. We are glad that the hon. Gentleman was present as well as one of his Government colleagues.
The value of such conferences does not lie only in the formal speeches that are made, excellent though they always are. There is also much value to be gained from the talks that one has with, for example, admirals of the other NATO countries and with the politicians. It gave me much satisfaction to talk to admirals from Denmark, Norway, West Germany and other countries and to get their points of view. It is in those personal talks that we gain so much.
In the White Paper the Secretary of State said that we would not weaken the central front in Germany. I appreciate that I am turning to Army matters, but when I was in Germany it was clear that that policy had been carried out with the exception of the movement of spare parts. The position of the Royal Navy is not clear. Perhaps it has been left out of matters too much owing to its tradition as the Silent Service, although the Minister has been speaking for it today.
It seems that we have been allocated the task of defending the Eastern Atlantic. In those terms we think of the Channel,

607
the North Sea and the outlet off the Shetlands Isles. It may be that if war breaks out—no one wants war, but by talking about it I am sure that we are more likely to keep the peace—we shall be quickly engaged on the naval side in dealing with the Russian submarines. I am sure that that will happen more quickly than action on the land involving the Army. It is the Navy which safeguards the Channel and ensures that reserves and supplies reach the Army.
I was a little alarmed by what the Minister said about the Navy Reserves. We are an island race and we have been sea-loving people throughout the ages. Young boys enter the reserve as naval cadets although they may be unable to join the Royal Navy for certain personal reasons. However, the love of the sea is in them, and that love is answered by being a member of the reserve. Is the Minister to publish a paper on the Naval Reserves? I understand that there is to be a reduction in the number of men in the reserve at the end of the day. It may be that we cannot maintain training centres and that a reduction will produce a more efficient force, but I would like to see a paper published on the subject. Any reductions that are made cannot be because of lack of money. The reserves provide the cheapest form of capable and disciplined manpower in the event of hostilities.
I welcome the confirmation that the three through-deck cruisers are planned with a Harrier package. This matter particularly interests me as it has been studied by my Defence Committee. As I have said, I believe that in the event of hostilities one of the main threats will be the Russian submarines. The through-deck cruisers, with their capacity for helicopters, will provide the main attack on the submarines. They might well be vital. Will they be on time or shall we have to use the services of HMS "Blake" and HMS "Tiger"? I have been on board HMS "Blake", and it is not ideal. Both vessels are due to be phased out altogether. It seems that this is a crucial rôle, and it is clear that we shall have to move quickly if there is an opening of hostilities.
As I understand it, the Russians would be capable of laying a large number of mines. We know what mines can do.
608
They can be laid by air, by surface ships or by submarines. That is an area in which the naval reserves could play their part. I hope that we shall be adequately protected in that respect.
Next, I turn to discuss the dockyards. My Committee and I have always striven to ensure that matters which do not relate to defence do not appear as defence costs. Clearly, there are now fewer ships, and fewer refits are required. We have a good dockyard at Gibraltar. Is it essential that all dockyards in this country are kept open from a defence point of view? The fact that there are large work forces engaged at the yards should not be the main consideration. You may say that each dockyard specialises and that they must all be kept open. I think you said that you were going out to get other work—
Mr. Speaker: Order. The hon. and gallant Member must address the Chair.
Sir H. Harrison: I am sorry, Mr. Speaker; I beg your pardon very much.
Is the Minister satisfied that he will receive payment for certain works that he has said will be carried out? Will these works be properly costed? Whenever I have visited the dockyards I have been anxious to see the accountancy systems. So far I have not managed to understand them. I have always asked how many ex-chartered and cost accountants are engaged upon the accountancy. Only in one dockyard—it is a yard in the area which the Minister represents—did I find a man who said of his own volition that he had obtained qualifications as a cost accountant. It may be that the Navy keeps its records in a special way, but a civilian qualification in accountancy cannot be to the detriment of any man.
I should like to say a few words about Sea Dart and Sea Wolf, which have had development difficulties. When I was on a private visit to Gibraltar in January, the admiral took me round the dockyard and showed me a target at which they had fired Exocet. That target had been smashed up good and proper. A vessel hit by a missile of that nature would have been put out of action, if not at the bottom of the sea. The dockyard team which had to repair the target ready for another exercise was pretty browned off at the amount of work it had to do because the weapon had caused a

609
tremendous amount of damage. The Exocet project contains a good deal of French expertise and British equipment, and the United Kingdom Service personnel take a great interest in Exocet. So far as I could see, it was a most excellent missile.
I visited Turkey some months ago and met some of our personnel there, and also personnel from other NATO countries, particularly those stationed at Izmir. That visit brought home to me what was meant by the withdrawal of the British presence in the Mediterranean. This is a political matter rather than a point dealing with strengths and weaknesses of various navies, but we must remember that Britain has always had a presence in the Mediterranean. We have had great successes in the Mediterranean area, as can be judged from history. I welcomed the Minister's comments about the exercises which are to take place in that area so that it cannot be said that our presence is being entirely removed from that sphere of influence.
We are most dependent on our sea routes for our oil supplies and for all the goods we need in time of war. NATO is responsible for the Atlantic and will do a great deal to ensure that goods are properly convoyed across the Atlantic.
I appreciate that there are one or two small naval vessels engaged in work connected with oil rigs. Protection of that nature is aimed more at countering possible hijackers than at gaining war-time experience. We all know that oil rigs suffer in rough sea conditions and accidents happen, but in war time the rigs will become possible targets for destruction. The enemy could inflict a great deal of damage on their shore installations. These installations will be important to us in times of war, and we should consider them in our main defence strategy.
At present I have got the message from conversations with Service personel that we can contain the Russians, although the balance may be tilted a little their way. We can contain them and, we hope, defeat them, but the Russians in respect of both their navy and their army are continuing to rearm, and obviously this affects the balance. If the democratic nations do not do more to keep up their hardware and to give well-trained professional troops the means to keep up their level of com-
610
bat-readiness, we shall fall back. That is where the threat may lie. It appears that the Russians are striving not to reach parity with our forces but to obtain vast superiority. This is what the democracies must seek to avoid.
I do not know who are the right people to sound these warnings. Is it the job of Service personnel or of politicians? Who is to warn our nation that we must keep up our arms strength if we are to survive? It is our job to protect our people. These things must be said. I do not know whether these things are better said by the admirals, the generals, or the air marshals, and perhaps it should be the retired Service men who should be giving these warnings throughout the country. If I speak, Labour constituents will not believe me and vice versa.
I hope the Minister will reassure the House that the United Kingdom is not dropping behind in the battle. Unfortunately, today it is those who shout loudest who seem to get away with it. We have a great tradition in our Navy, and I am sure that the Minister will see that that tradition is maintained in the future.
7.26 p.m.
Mr. Bruce George: Most of the speakers in the debate so far are regular contributors to naval discussions in this House. It is the first time I have spoken on defence matters, and I warn the House in advance that this will not be an original contribution to strategic theory or a speech of Clausewitzian proportions.
It cannot be said that I have any constituency interest in this debate. It is well known that Walsall is land-locked, and its Members of Parliament have not traditionally expressed any great interest in naval matters, although in the past one or two have travelled and, indeed, gone to sea. We have no industry that is directly related to armaments. I was fortunate not to have been called up, and I have no vivid memories of the Second World War. At time goes on, increasingly more and more Members of Parliament will have a perspective of war that differs from the view that many other hon. Members may take because of the age factor.
I wish to take part in the debate on this vital subject because I seek information on the rôle to be played by our

611
Navy in the thermo-nuclear age. I also wish to discuss the ships that are best suited to discharge this new rôle.
The Minister has an unenviable task today, as other Labour Defence Ministers in the past have done. On one side of the fence he is faced by those who claim that our defence review has left Britain's defences denuded and who believe that if there are any further cuts in defence expenditure, Admiral Gorshkov will be landing at Westminster Pier in a few months' time. On the other hand, the Minister is faced by those who argue that if we spend more and more on defence, other vital areas of expenditure will have to suffer. They say that a balance must be struck.
Against these arguments the defence review has analysed our commitments and needs over the next 10 years and our capacity to fulfil those needs. I believe that we can provide an efficient and well-equipped military presence with the new level of expenditure, but I believe that expenditure on defence is now swiftly reaching a position at which any further large cuts would be totally undesirable.
I suggest, to those who are committed Europeans, that if Europe is aspiring to great things politically, European nations should make a more significant contribution to Western defence than they are doing at present. I believe that in the past our expenditure on defence has been too high. We have now reached what I consider to be an adequate level, but any further cuts would be militarily disastrous.
Economic circumstances have forced us to make a reappraisal of our military role, in the same way as our departure east of Suez was precipitated less by ideological considerations than by economic considerations. We have been forced by circumstances to re-examine our military rôle.
I should like to re-emphasise that, although the Governments of all Western nations are experiencing great pressures from within their communities to cut expenditure, we are aware that pressures are not all that apparent on the Governments of Eastern European nations. However, with the demands by Eastern European nations for a greater range of consumer products, the time is swiftly coming
612
when the Soviet Union will be obliged to re-assess the balance between its defence and other expenditures.
Despite the pressure for cuts in expenditure, all Western Governments are still experiencing an international arms race that shows few signs of abating. We have heard a great deal about the continuing pressure on, and increasing expenditure of, Eastern European nations, but there are many examples of Western countries where expenditure is rising.
Although there has been some progress towards disarmament, regrettably far too much time has been spent on talking. There is far too little evidence of any action being taken by various Governments to reduce their defence expenditure. Hope for disarmament appears to be progressing slowly. Most people who urge disarmament, or at least a reduction in armament, are regarded as being Utopian.
The history of disarmament has shown almost total lack of success. We have had advice from various sources. I remember vividly a quotation from the Old Testament. Isaiah expressed the hope that people would:
"beat their swords into ploughshares, and their spears into pruninghooks".
So far his advice has gone unheeded, and this further advice:
"nation shall not lift up sword against nation"
has remained unfulfilled.
I should like more evidence of real progress before I am prepared to accept that history is repeating itself and that disarmament negotiations are nothing more than a sham or a public relations exercise for one's own domestic public. Otherwise, disarmament on a large scale will be impossible.
I welcome the commencement of the SALT negotiations, and I understand that some limited progress has been made. However, I believe that more progress must be made to stop people believing that those negotiations are nothing more than a charade.
One must welcome not only attempts to talk about arms control and disarmament, but also the improved relationships between the East and the West. One welcomes détente, but, as has been said on previous occasions, one of the successes of détente surely has been some

613
sort of balance of forces. One should not be lulled into any sense of complacency. There are many people who say that as there has been no major confrontation for decades, we should minimise our guard. One of the successes of the nation has been to minimise the risk of war. I hope that the public do not become too complacent and too insistent that defence expenditure—in which it is difficult to see any immediate advantage—should be cut further.
We have heard talk about arms races. I express concern at arms races taking place in naval spheres. Earlier speakers have spoken of the arms race that preceded the First World War. I believe that we are witnessing in many parts of the world—not just in the advanced areas and certainly in the Middle East, naval build-ups which would make the previous arms races in the naval sphere insignificant.
A new awareness of the potentiality of the sea for military purposes has developed. After the Second World War it was probably only America that emerged with any degree of superiority in naval strength. Its supremacy was short-lived and reminds me of the couplet of Hilaire Belloc, who, describing the superiority of the white armies over the natives, said ultimately,
"Whatever happens, we have got
The Gatling gun and they have not."
Certainly the technological superiority enjoyed over the USSR by America after the Second World War was short-lived as more and more political and military leaders realised the importance of the sea in a thermo-nuclear age.
If we examine the 1957 Defence White Paper, even then there was some ambivalence or confusion about the future of the Navy. It says:
"The rôle of naval forces in war is some-what uncertain."
Events since 1957 have resulted in people having a clear review of the rôle of modern infantry in contemporary strategic thinking.
We have heard a great deal about the build-up of Soviet forces. Unless prompt steps are taken to defuse this naval buildup, clearly confrontation must be anticipated. I recently read a book on gunboat diplomacy. Perhaps one of the reasons why the amount of gunboat diplomacy
614
has not been excessive vis-à-vis America and the Soviet Union has been the inability, so far, of the Soviet Union to match the United States. However, now the enormous superiority of the Americans has subsided. Now the Soviet Union has increased its naval presence to such a level that, I am sure, many Americans consider that their supremacy is about to be overtaken. Because the gap is being narrowed there is every indication that confrontation should, or will, take place. I hope that some sanity can be restored to this situation and that the enormous expenditure on naval armaments, and armaments in general, can be brought under some degree of control.
It may be Utopian to assume that arms will be laid down, but we can hope that there will be some degree of parity, and, as a result of this parity, that some readjustment downwards will be brought into being.
I shall not dwell any longer on naval armaments or armaments in general. I shall briefly discuss the British response to these changed circumstances. Many Labour Members have readjusted to Britain's changed rôle in the world. We are finally abandoning any pretence we might have had to being able to project our military power into far-off lands or shores. It was inevitable that a post-Imperial Britain, suffering from acute economic difficulties, would throw off any vestiges of Imperial pretensions.
If we believe that we have any great world-wide rôle, logically our naval rôle will be devised accordingly. At present we are concentrating our defence on Europe and on the NATO area, and, quite clearly, the rôle of the Navy must be thus adjusted. Anyone who believes that we should maintain a level of naval armament most appropriate to the previous era is, in my view deluding himself.
Professor Martin, a specialist on naval matters, said not too long ago:
"We are stuck with a Navy which has grown up out of an obsolete concept of what navies ought to do."
As a result of this defence review, brought about by a situation forced on the Government, we have been obliged to examine the rôle of our Navy and devise a policy which is more appropriate to our current economic situation.

615
We were told a few moments ago, with great pride, that Britain is the third nation in the world in naval terms. There are only four nations whose navies perform a world rôle. Ours is about fourth in that category. If we are the third naval power, I do not know what our position is in the industrial league. It seems paradoxical that we should occupy such a high position in the naval league, yet such a low position in the industrial league.
Mr. Wall: Would the hon. Gentleman not agree that our industrial power depends on our imports? We have to import 50 per cent. of our food and most of our raw materials. Those imports must be protected in times of threat. That is why we need naval power in conjunction with NATO.
Mr. George: Obviously, our naval power must be seen in the context of NATO. I do not believe that at this stage, with our severe economic difficulties, we can be expected to patrol and control the sea lanes of the world. We do not have the capacity. The hon. Gentleman and I are not completely at variance. I do not see myself as someone who wishes to see the total elimination of our Navy. As we are committed to NATO, we must play our rôle within its overall framework.
Ideally, and speaking with a limited knowledge of strategic matters, I would have thought that NATO should divide its responsibilities equitably. We should see NATO as an interdependent entity, where one nation because of its economic strength and geographic location performs a specific function. It is rather silly to assume that each of the nations within this defence organisation should have an all-purpose navy. This cannot be done.
We are wedded to NATO and will be for some time in the future. Ultimately, I hope that such military alliances will be rendered superfluous. Until then we are linked to NATO, and I hope that NATO can organise itself in such a way as to produce a greater military presence with perhaps a diminished military expenditure. It is being said that one of NATO's problems lies in the difficulties of standardisation. We belong to NATO and have our allotted responsibilities. I would like to think that greater thought
616
had been given at NATO level to an allocation of responsibilities based on geography and an ability to sustain this military and naval presence.
Coming even more into our own backyard than I have done so far, I repeat what has been said earlier about the defence of our oil. I understand that a Conference on the Sea has outlined proposals for the future and that we are to have a 12-mile limit with a further 200-mile limit, which will be called an exclusive economic zone. We must give a great deal of thought to this problem of policing our oil installations. Some thought has been given to it, but not enough.
I can remember the débâcle at the time of the cod war. One of the lessons to be learned from that was that our naval resources were not adequate, even to deal with that limited situation. If we now face a situation in which the Navy must perform this constabulary role more effectively, I wonder whether we have the resources. One academic has calculated that adequately to police this 200-mile limit and to maintain a credible defence of our oil resources would mean an enormous increase in a certain type of naval vessel. The Minister has spoken of the thought being given to the use of the hydrofoil so that we can speed to a troubled area.
We are witnessing a difficult period in strategic and military thought. We are being forced to look at our defence commitments in view of our rapidly declining economic fortunes. This has forced us into a situation which we ought to have reached previously. We are now no longer a first-rate Power. We need to fight hard to remain a second-rate Power. We need to have strong defences, and they can be found at this stage only within NATO. I continue to support NATO. I hope that the Government will continue to review our defence commitments so that ultimately we shall move towards a situation when there is an integrated NATO defence policy in keeping with our limited financial resources.
7.46 p.m.
Mr. Cyril D. Townsend: I take to heart a comment by one of your distinguished predecessors, Mr. Deputy Speaker, that speeches, to be immortal, need not be eternal. It gives

617
me pleasure to follow the hon. Member for Walsall, South (Mr. George). I am glad he managed to take time off from dealing with the correspondence of no fewer than two constituencies. I believe that he deserves the pay of two Members of Parliament! I was particularly pleased to hear the hon. Member, since he in turn followed his hon. Friend the Member for Edinburgh, Central (Mr. Cook), whose contribution was rather cold and sinister.
I do not claim that I go along with all that the hon. Member for Wallsall, South has said, but I very much preferred his approach to the problems of defence to that of his hon. Friend. How right the hon. Member for Walsall, South was to say that we should continuously re-examine the deployment of our forces. It was once said that the Empress Catherine put a sentry over a snowdrop and 200 years later there was still a guard posted at that site. Listening to recent defence debates, we are forced to ask whether Britain has forgotten the lesson of the events that led to the Second World War.
Slowly but surely mankind's inherent foolishness appears to be taking us round again to the attitudes of the 1930s. Then, as now, because the outside threat to peace and freedom was not blindingly obvious, many shades of political opinion were in favour of massive defence cuts and big reduction in Service manpower.
Admiral Gorshkov has made crystal-clear the importance to Russia of sea power, not only to fight wars but also to achieve political aims in peace time. The Soviet Union has recently produced maritime forces that give the appearance of being designed to deny use of the sea to others rather than to preserve that use for Russia. The emphasis on submarines and missiles—armed units of all kinds—is marked. The Russians' sudden enthusiasm for attack-carriers is highly significant. After all, for 20 years they took no interest in this naval weapon. Why are they suddenly going in for it now?
In Britain, an island nation, with interests at sea proportionally much greater than any of its allies, we announce reductions in the number of destroyers, frigates and MCMVs and reductions in the strength of our amphibious forces, along with all the other cuts we have
618
discussed. Do we ignore NATO's acute shortage of anti-submarine and mine warfare ships? Do we turn a blind eye to the obvious vulnerability of NATO's northern flank?
I do not wish to retrace all the ground that I marked out in the Adjournment debate on 23rd May on the subject of defending our North Sea oil and gas installations. I will summarise what I feel the Government should be doing. The problem must be seen in a NATO context. A serious threat by the Russians to our economic resources in the North Sea would require an American carrier force to move into the area. I think that NATO has been slow to consider all the present and planned installations bordering the North Sea. Flag Officer Scotland should be given overall responsibility for the security of our own installations. By chance, they fit neatly into the boundaries of his command and are covered by his NATO obligations. A senior police officer should serve alongside him and a joint operations room should be set up. I remind the House that a number of chief constables at present share responsibility towards these installations.
This command centre should take on responsibility for such matters in the area as fishery protection, the co-ordination of search and air-sea rescue, navigation and pollution threats. It would pay particular attention to the risk of accidental damage to installations by drifting vessels or by storms.
Many of the problems that would arise would be passed on to the civilian organisations, but this command centre would be able to supply the necessary control, communications and, above all, a 24-hour service, which does not happen at present.
Without doubt, naval helicopters should operate in the area. I was pleased that the Minister said that a review was being undertaken of the potential of the hydrofoil, and I hope it may have a particular rôle in this area. I should like to see a small helicopter-borne force of Royal Marine commandos ready to fly out to deal with any major incident. There is at present, I understand, a commando unit in Scotland which could easily be given the task of finding this force.
I accept that terrorist attacks are unlikely, but the growth of international

619
terrorism should not allow the Under-Secretary to be too complacent. After all, we have a very well equipped terrorist organisation in the British Isles at the present time. Just imagine the propaganda effect of a tiny incident involving the IRA and a North Sea platform!
It is not too late for this buffeted and bewildered Government to come forward with more realistic proposals on the lines I have suggested. By any reckoning, the protection of our offshore energy resources must be given top priority.
Turning to warmer waters, a number of speakers from both sides have emphasised the growing Soviet sea power in the Indian Ocean and the importance to Western Europe of the Cape route—one of the seven focal points of maritime activity in the world. For historical reasons, the United Kingdom has a higher stake in this part of the world than her allies.
I am convinced that the West must maintain a naval presence in the Indian Ocean, whereas the Soviet Navy has no need to—unless it wishes to threaten the vital seaborne trade of other countries. Bearing in mind the political complexions of many of the northern NATO countries, I am well aware that NATO will not be quickly persuaded, as a first step, to carry out major maritime exercises in the Indian Ocean, but they must be pressed by the British Government.
Much military planning and money went into the construction of the Maginot Line. Much military planning and money goes today towards the close defence of Western Europe. Flanks are frequently more vulnerable than the centre itself.
Concerning the Government's decision to tear up the Simonstown Agreement. Simonstown is useful in peace time as a place of rest and repair. The dry dock has an obvious important importance. However, the Government tell us now that Britain can use these facilities on a straight commercial basis. I hope the Minister will confirm that he will allow British sailors ashore for rest and recreation when their ships pass the Cape.
What we have clearly lost for NATO is the naval surveillance and military intelligence that existed through Anglo-South African co-operation. I supported
620
the Simonstown Agreement, but I am bound to say that to some of us the balance of the arguments had become extremely close. Britain and South Africa could not police the Cape sea routes in times of trouble. To pretend otherwise is extremely dangerous. Britain's naval force in the Indian Ocean is down to the odd frigate. Gone are the days when we had carrier forces off Singapore.
South Africa is increasing her defence forces, but in today's terms they are small. Her navy has only two destroyers, six frigates and two submarines. She will become increasingly vulnerable to external sanctions, especially with regard to aircraft, heavy armour and warships. She will become more and more concerned with the threat of conventional or guerrilla activity on her northern borders. At present at least 80 per cent. of her defence programme is allocated to the landward threat. It would be a mistake for Britain to regard her as a sound and secure ally, however well she has performed in the past.
In addition, we must squarely face the fact that our military links with South Africa have been misunderstood and resented in the United Nations and particularly in the Third World. They have tended to diminish our influence with Black Africa, whose friendship and natural resources are becoming increasingly important to Europe. There is no basic disagreement between Europe, America and the African countries on the nature of the South African régime. There has been a danger that Britain might lose out in diplomatic terms without gaining a compensating military advantage.
After a cool appraisal of the likely political and military trends in South Africa, I personally accept that a good case could be made out for ending Britain's formal military links with South Africa, but I regret that the Government have been so hasty. Would they not have been wiser to wait until NATO could have been persuaded to show more interest in the Indian Ocean? Would they not have been wiser to wait until the European Community had reached a common position on the sale of arms to South Africa? Would they not have been wiser to wait until more North Sea oil was coming ashore? Would they not have been wiser first to get Iran, which has a

621
strong and growing navy, to take more interest in the area?
In conclusion, I come back to the main theme of our debate. Western European ports handle 50 per cent. by value and 30 per cent. by volume of all the world's international trade. Oil is by far the biggest single commodity moved by sea. Britain's merchant tonnage is 30 million, NATO Europe's over 100 million, and the Soviet Union's 17 million. Faced with the historic expansion of the Soviet navy and its new interest in the Indian Ocean, the Government reply with their phoney White Paper telling our forces yet again that they must squeeze more out of less.
Over the centuries Britain has excelled in the use of sea power. We should be the first to appreciate the danger of overwhelming sea power in the hands of others. Over the centuries the Royal Navy has proved to be our particular and appropriate champion and defender. That remains true in the nuclear age. Indeed, it is truer than ever before in the nuclear age. There is a saying that only those deserve freedom who are prepared to defend it.
Mr. Deputy Speaker (Sir Myer Galpern): The hon. Member for Bexley-heath (Mr. Townsend) recalled the saying of a previous occupant of the Chair that a speech, to be immortal, need not be eternal. I remind hon. Members that the most famous speech of all was made at Gettysburg and lasted only six minutes. There are still six speakers anxious to contribute to the debate in the hour that remains before the winding-up speeches. If the speakers were to limit themselves to four minutes longer than the Gettysburg speech I could accommodate all those who are anxious to take part.
8.0 p.m.
Mr. Alan Lee Williams: I did not intend to speak in this debate, and I shall bear in mind your strictures from the Chair, Mr. Deputy Speaker, but, rather like Oscar Wilde in a very different context, I cannot resist the temptation to say a few words.
When he opened the debate my hon. Friend the Under-Secretary of State for Defence for the Royal Navy gave a very good account of himself. He has my con-
622
fidence. I think that he is running the Royal Navy very well, and I see from the fact that so many of my right hon. and hon. Friends are not present that they, too, must be entirely satisfied with his stewardship.
My hon. Friend began his speech in a very serious-minded mood, and that has been matched in the speeches that we have heard from both sides of the House. However, a number of my hon. Friends are rather puzzled to know why the Opposition intend to divide the House tonight. The reason has not emerged very clearly in the course of the debate so far. They divided the House against the Defence White Paper, and it became clear as our debates wore on, Service by Service, that an argument would be erected substantial enough to justify a Division on a matter of this magnitude. But it is no light matter to divide the House on naval affairs. It is likely to be widely misunderstood and, in some quarters, resented. I hope that the hon. Member for Haltemprice (Mr. Wall) will make crystal clear the reason why the Opposition are dividing the House in this matter.
The two main arguments used by the Opposition so far have centred round the Polaris weapon and the Harrier jump jet. In the case of the Harrier, most hon. Members have been content to congratulate the Government, and rightly so, because, although the Conservative Government, perhaps, were not contemplating not going ahead with it, they did not reach a decision in favour of it.
Mr. Younger: I can understand why the the hon. Gentleman does not appreciaet our reason for dividing the House tonight. He has heard only a small part of the debate if he believes that the Opposition have concentrated mainly on the Polaris and the Harrier. He appears to have missed about 90 per cent. of the arguments that we have advanced. I hope that he will address himself to those arguments.
Mr. Williams: The hon. Gentleman is mistaken if he thinks that I have missed 90 per cent. of the debate. I admit that I missed his own contribution, which, I understand, was a very poor one, but I listened to the remainder of the debate with great attention.

623
It is not so puzzling that there should be this difference between the two sides of the House, however, because Opposition Members have been keen to point out that the Government's analysis of the situation in respect of the Russian naval build-up has not been followed by some action. That is the burden of the Opposition's attack. However, it is as well to get the analysis right, because that is an essential part of reaching the right decisions. I welcome the analysis made by my hon. Friend the Under-Secretary. It is as well to know that the Russians are building up in the way that they are, but it follows that we should analyse why they are doing that and what response is appropriate in the circumstances. Again, I should welcome contributions from the Opposition in that respect.
Most people will agree, I think, that this is a relatively new problem. Following the disastrous events of 1962 as a result of the Cuban missile crisis, when Khrushchev had to write a couple of humiliating letters to President Kennedy, the Russians were determined that they would never be put in that position again. They felt that the only way of avoiding it was to have some kind of maritime presence.
The hon. Member for Bexleyheath (Mr. Townsend) and one or two of his hon. Friends used the word "maritime". It is important to be clear about whether we are discussing a naval presence or a maritime presence. There is a very serious difference. It seems to me that the Russians first decided to go for a naval presence but that they are now broadening that to a maritime presence. The implication is that they wish to provide themselves with bases because they realise that, having extended themselves into so-called warm waters, they are very vulnerable from the air. It does not follow from that that they have completely closed their minds to the possibility of building up allies and having permanent bases, but they are making the first tentative moves towards a policy of that kind, and, if that is true, it is most serious.
The argument which attracts many of my hon. Friends—and I do not dismiss it lightly—is that the Russians are doing this principally for political purposes. If
624
that is so, all that they require is a naval presence rather than a maritime one. It can show the flag when a situation develops and which can exert political pressure when it counts. However, we are seeing the Soviet Union behaving like a traditional great Power believing that it has rights and interests to protect. As a result, it is building up a maritime presence.
As we all know, the only answer—and it is this that brings an element of hypocrisy into the debate on the part of the Opposition—is a NATO response—
Mr. Younger: We have been saying that.
Mr. Williams: If the Opposition have been saying that they have said it so softly that it has missed most people outside this House, but, if that is so, I should like to hear more about the studies which NATO is conducting into the possibility of a naval presence south of the Tropic of Cancer.
This can be done, although, perhaps, not in a formal NATO framework. There are difficulties about that, but it can be done outside NATO by getting those Powers which share the concern to build up some kind of marking naval presence. I think that that is a reasonable proposition to debate. It did not require the Opposition to divide the House tonight and to blame my right hon. Friend for the present state of affairs. They themselves carry a heavy share of the responsibility. For that reason I should have preferred the Opposition to take this debate out of this narrow context of petty party advantage and to debate it in the broad context which the subject rightly demands.
8.7 p.m.
Mr. Alan Clark: I feel, and I hope that I can say it without disrespect to the House, that the defence debates which we have with such commendable frequency have a singularly repetitive character. Sitting below the Gangway on the Government side of the House there are a number of hon. Members who argue, with a greater or lesser degree of articulacy, that we should have virtually no defences, that they are a provocation and that we should dismantle them as an inducement to detente. That is an argument that, as

625
a traditionalist, I anticipate hearing with pleasure but not uncertainty from the hon. Member for Keighley (Mr. Cryer), who, I see, has just come into the Chamber. From the Opposition benches, we have my hon. Friend the Member for Ayr (Mr. Younger) emphasising—and being echoed by the Treasury Bench—the very serious perils to which we are open because of the decline in the relative strength and standing of our forces compared with those of the Soviet Union. The net result of the virtual consensus of rational agreement is nil.
We have these debates at two-monthly or three-monthly intervals, and we see no change in the posture of the Government, their attitude to our forces and the expenditure on them—with one exception. That exception is the adoption of the maritime Harrier. I should like to think that that was due to the reasoned arguments put forward in this House, but I fear that a factor which influenced the Government considerably was all those delegates and shop stewards from Hawker Siddeley to whom we spoke in the Lobby.
The Under-Secretary said the defence review was a careful thinking through of our strategic posture for the next 10 years. I suggest it was a careful thinking through of how any credible defence structure could he retained in the light of the Draconian cuts imposed by the Treasury. This thinking through was faulty in relation to the strategic reality of the situation.
The most significant fault was the failure to appreciate the cosmic alteration in the strategic balance at sea. It has been a feature of the last two or three years and is likely to accelerate in momentum over the next 10 years. This alteration demands a change in our spending, deployment, and balance between different types of vessels, and also, for the long term, changes in naval architecture. These changes will need years to take effect and they should have been started years ago. I am sure my hon. Friends would compel any new Government to put these into effect. and it would be greatly to the credit of the present Government if they took action now.
We know that Admiral Gorshkov is a disciple of Mahan, the great philosopher-historian who wrote the guiding thesis on
626
naval power, "The Influence of Sea Power on the French Revolution and Empire". The tenor of his argument was that the France of Napoleon, an immensely powerful land power, should have been able to dominate the world, but was prevented from doing so by Britain's sea power, economically, but critically, exercised at certain key points. It is clear that Admiral Gorshkov has absorbed this idea and has convinced the Kremlin that it is useless for a nation to be a land power unless it has complementary sea power as well. Through the exercise of sea power one can apply pressure and derive strategic advantage with a greater degree of economy and lesser degree of risk.
I do not recommend a return to gunboat diplomacy, much as a certain part of my make-up may wish for it, but the United Kingdom and NATO should be in a position to resist gunboat diplomacy. If our present naval inferiority in numbers and quality persists it is only too likely that we shall find ourselves vulnerable to gunboat diplomacy and face the greatest difficulty in resisting it. We have already had a foretaste of this in the cod war, and I do not think the Admiralty would sanction a powerful response to pressures of this kind in the Indian Ocean any more than, in 1938, it was keen on resisting the Italian submarines that were torpedoing vessels going to Spain. There is a very serious risk that, unless we upgrade in quality and numbers the naval strength of ourselves and NATO and extend the boundaries of NATO we shall be faced with a position where gunboat diplomacy is applied and our capacity to respond is so impeded that we are restrained by various political considerations from properly responding to this pressure, and our economic and military posture may be very seriously threatened.
We need a different emphasis on expenditure between the three Services. I do not agree with the Under-Secretary who said the Services were relatively indivisible in terms of expenditure. The strategic situation has so altered that expenditure on the Navy should be given priority over spending on the other two Services.
There is, effectively, a kind of stalemate in Central Europe where, although we are outnumbered, the effect of a military

627
action would be so gross and dangerous that it is unlikely ever to occur, and we are most likely to face economic pressure, which would not directly affect civilians or large cities, but our sea trading routes. This is where we should be most diligent and be prepared, even if it involves sacrifices elsewhere, to increase expenditure and alter the bias of naval strength.
We need an increased convoy capability, a taskforce flexibility, an independent nuclear-powered submarine force and an airborne capability which, I am glad to say, we seem to be getting. We also need changes in naval architecture and cheaper, faster, more flexible vessels. We shall need vessels with a dual-purpose function to match in missile and hitting capability the ships of the Soviet navy.
In looking at naval architecture, we must consider whether the crew facilities and the dimensions of ships, which were, perhaps, dictated by recruiting considerations in the 1950s, are now obsolete. I know from constituents in the Navy that they would prefer, in visiting foreign ports, to be in really impressive vessels, well armed, up-to-date and competitive with vessels of other foreign Powers. After enjoying themselves on shore leave, they would rather return to a fierce ship with real teeth than to a vessel with squash courts and shower baths but deficient in missile and gun hitting power.
There is a change in the naval situation comparable only with that when the Kaiser was rebuilding the Imperial German navy before the First World War. The hon. Member for Glasgow, Govan (Mr. Selby) quoted that famous slogan
"We want eight and we won't wait".
That was the cry of the lobby campaigning for an increase in the number of dreadnoughts. The hon. Member quoted the slogan with derision, but if that lobby had not been successful we would have lost the Battle of Jutland.
The Government should not be guided by the popular mood. Responsible, thoughtful Ministers should be able to see far enough ahead to realise that changes in strategic methods are occurring. The situation of the Navy and NATO's maritime strength is comparable to that of Fighter Command in 1936. Fortunately, we realised then what was
628
happening, and expanded Fighter Command. We were just in time. Today we are looking at this in a stilted, conventional manner, in which we feel that cuts have to be made in all three Services in more or less a degree of uniformity, and the Ministers and their advisers have totally failed to see this altered strategic emphasis.
There are three possibilities the Minister could announce. He could tell us that he will leave things as they are, which would be unsatisfactory and would lead us ultimately into serious difficulties necessitating urgent and drastic changes. He could say, as many of my friends are dreading, that there may be yet further cuts. Or he could give us some indication, some possible ray of hope, to believe that he sees the corollary of all the data he has laid before the House of Soviet strength and intentions, that he sees the altered situation, and the necessity for changing the emphasis on the maritime sector and the Royal Navy. In so doing he would earn the respect of the House and, in future, the gratitude of the country.
8.22 p.m.
Mr. Neville Trotter: At this late hour in the debate most of the points have been made and I shall try to be brief
If we concentrate too much on the central front in Europe there is a danger that we shall be adopting the Maginot Line philosophy which was such a disaster in 1939. We cannot win and survive without the ability to control the sea lines of communication. Without this ability all is lost. Yet there is real doubt whether at present our strength is enough to ensure that we can control those lines of communication.
There has been a dramatic change in the naval balance over the last few years. Twenty years ago NATO dominated the seas, but that is no longer the case. Nor can we rely on the comfortable assumption that we can leave it all to the United States. The United States found itself a few years ago with an enormous, though old, fleet. It has since scrapped half its ships but, in spite of this, the average age of the rest is still about 18 years. The only way in which it could afford to modernise was to cut down its numbers by half.

629
We must ask why the Soviet Union is building up its naval strength. Its geography and history make it a land Power. It is self-sufficient in food and raw materials, and it has not vital sea lines of communication to protect. Unlike us, it does not need to be able to control the sea routes. I can understand that it wishes to impress people round the world by the visits of its warships, but the submarine fleet, which is the most sinister aspect of the build-up, is not impressive to the Third World countries. Its nuclear submarines do not go visiting with large red flags flying from their conning towers. Instead, they lie sinisterly below the surface of the sea. They pose a most serious threat, and their aim is to cut our very life lines. If we are not careful, the situation can arise in which the Russians will be able decisively to affect the future of this country.
It is possible to see a situation in which by use of naval power they can win and avoid the Armageddon which would come as a result of operations in central Europe, where it can be expected that all-out nuclear war would result should the tanks start rolling. But at sea they could have their way and exert their will over us without a single tank having to roll.
It is accepted that in general on land the odds tend to favour the defenders, but that is not the case at sea. We can accept numerical inferiority on land, but that is not so at sea. Much larger forces are needed for the control of the sea routes than they are for denial of the sea routes. That fact presents a great difficulty for NATO and Britain to overcome.
Admiral Gorshkov has been quoted frequently in the debate, but I shall quote from Admiral Zumwalt. until a year ago the Chief of Staff of the United States navy. His net assessment based on fleet exercises and the judgment of his admirals is that today the odds are that they would be unable to succeed in keeping open the sea lines of communication, and he added that
"if we were to fail we would lose Central Europe".
That is a terrifying assessment from a man who is in a position to arrive at a fairly accurate idea of what could happen.
630
There is no room for complacency, therefore, about the strength of the Royal Navy.
The Government have told us in the past that they were working on the assumption that there will be no conflict. Let us hope that they are right. Nevertheless, the Soviet navy has the capability, and we cannot rely on it not being used. Instability and change are the hallmarks of the international scene these days. Those who fail to see the danger are naïve and those who see it but ignore it can only be reckless or wrongly motivated.
Over the last 10 years the Soviet navy has expanded by 10 times the number of ships it has at sea outside its own waters. It has reached the situation where it has been able to exercise more ships simultaneously in the North-East Atlantic than has NATO. During the recent Arab-Israeli war no fewer than 96 Russian ships were present in the Mediterranean, including 24 submarines. In spite of that, we are to withdraw the Nimrod squadron from Malta at a saving of just over £4 million a year. That squadron is of vital concern to NATO's southern flank. It has been responsible for spotting and identifying a substantial proportion of all the Russian submarines operating in the Mediterranean. While this Russian build-up has been going on, the strength of the Royal Navy has been whittled away, first in the Healey review, then subsequently in the Mason review and now presumably under the proposed £110 million cut, although here the Government still refuse to say what they will cut.
I must, however, congratulate the Minister on the fact that he was able to persuade the Treasury to go ahead with the naval Harrier. I should also like to take the opportunity to congratulate him on the co-operation he and his Department have shown to hon. Members who are interested in the Navy, even if in my case that interest has been expressed in the form of a large number of Parliamentary Questions. Ten years ago the Royal Navy had 190 major vessels. It is now down to 109, and that number is falling fast.
I should like to ask the Minister—
Rear-Admiral Morgan-Giles: There is no Minister here.
The Under-Secretary of State for Defence for the Army (Mr. Robert C. Brown): I resent that.
Mr. Trotter: I am sorry that the Minister who is standing in appears to be so lonely on the Government Front Bench. I hope that he will point out to his hon. Friend the Under-Secretary that he failed in his very well-deserved praise for the Royal Marines to say how on earth they are going to get ashore in future operations without any amphibious ships. I suggest that the Army Minister might ask his hon. Friend the Navy Minister whether he has up his sleeve yet another superannuated tug of the kind he keeps pulling out to solve all kinds of problems.
Like many other Members, I was disquieted to hear so little said about the Royal Naval Reserve. From what the Minister mentioned, it seemed that it, too, was for the "chop"—that in future it was not to be in the same form, or presumably in the same strength in terms of ships as it is today. I hope that if that is not correct the Minister will put me right when he comes to wind up.
The Under-Secretary seemed to be offering as justification for his cuts the very curious excuse that they could be justified in that they would encourage our allies to do more. That is a very strange form of encouragement. There are plenty of other "normal" excuses; for example, that the quality of our new equipment is better than the old. That is true, but so also is the quality of Russian equipment. The Russians have quantity as well, and in the very important field of surface-to-surface missiles they have established a technological lead with which the allies have not yet caught up.
Secondly, there is the argument that our European allies do not have large navies. This is true; but they are predominantly land-based and have much larger armies than us, while we are traditionally a sea power. I very much agree with my learned Friend the Member for Plymouth, Sutton (Mr. Clark), that it is in this direction that we should concentrate as much as possible for the future. The main excuse, however, is always that we cannot afford a large Navy to defend
632
ourselves. Yet we are spending a lower percentage of the national income on defence than at any time since before the last war. In 1954 of every £1 of public spending in this country 24p went on defence. Now it is down to 10p in the pound. What a contrast with the situation in the Soviet Union, where the percentage of public spending on defence is rising all the time! The fact is that this Government are cutting our essential defences so that we as a country can live beyond our means.
May I remind hon. Members opposite that if we cannot control the sea lines of communication there will be no food to be subsidised? There is no point in subsidies if the food cannot be landed in this country. The task for the Navy has never been more important. The threat at sea has never been greater, and at the same time the strength of the Navy has never been weaker. I do not know whether the Navy Minister appreciates the fact but my research reveals that he proposes to reduce the manpower of the Navy to its lowest level for nearly a century. The year 1895, as far as I can see, was the last year when the Royal Navy was at the level to which this Government intend to reduce it.
This is the time to be building up the strength of the Royal Navy. Through no fault of their own shipyards are short of civil orders and they should now be used to build more vessels for the Royal Navy. I hope that yards like Swan Hunter and Scott Lithgow, which for the time being have been phased out of the Navy ordering programme, will be allowed to come in again in the not too distant future. Surely, money is better spent building more destroyers and frigates than subsidising losses in those yards after taking them into State ownership.
Britain still has the strength to defend herself. I believe that the British people have the common sense to accept the need for that defence, and to accept that this calls for sacrifice. They accept that it is a price worth paying to maintain our peace and freedom. The trouble is not lack of strength or lack of public common sense but lack of Government will. It is for that reason that we are, quite rightly, to divide the House tonight.
Mr. Deputy Speaker: If we can have seven-minute speeches, every hon. Member who wishes to take part in the debate can be accommodated.
8.32 p.m.
Miss Janet Fookes: The hon. Member for Hornchurch (Mr. Williams), who, unfortunately, seems to have left the Chamber, inquired somewhat peevishly why we felt it necessary to divide the House tonight. I hesitate to speak for my own Front Bench as a very inexpert back bencher on these matters, but, as far as I am concerned personally, the reason we are dividing the House is that fundamentally we disapprove of the Defence White Paper. We believe it is making cuts which are dangerous to our security. We want no part of it, and dividing the House is the only way we can effectively show our disapproval.
We see in the White Paper and the Minister's speech this afternoon a most frightening analysis of the build-up of Soviet power, and yet there is a complete "ducking" and escaping from the implications of that. It springs in large measure from a fundamental misconception in the White Paper itself that we should base expenditure on a comparison with the percentage of gross national product spent by our allies. If we are to use this kind of mathematical formula, surely it would be infinitely more sensible to look at the gross national product spent by our potential enemies, not by our friends and allies.
I believe this approach is sheer folly and leads us to all kinds of wrong conclusions. I, for one, want no part of the approach that has been put forward by the Government. What is more, there are further weaknesses in this approach which are not apparent at first sight. It fails to recognise that our gross national product is very much smaller than that of many of our allies, and they may still he spending more than we are in total.
Furthermore, the difference in computation as to what constitutes defence expenditure can completely distort our view. If the Government would be prepared to undertake it, I should like to see a comparison of like with like. I suspect that that would give a very different and much truer result. I do not think that the Government will be
634
keen to pursue that idea, because I doubt whether the result would support their arguments. It is worth repeating that the Second Report of the Expenditure Committee for 1974–75 stated that an unqualified comparison of this kind was misleading. That should be noted tonight in no uncertain terms.
The great dread of the Opposition is that, these cuts having been made—cuts which we consider are too great—further cuts may be in the pipeline. I sincerely hope that that is not so, but I would not like to rule it out.
We have put forward various suggestions for cuts in other areas of public expenditure. I notice that they did not seem very popular with the Government side but I hope that they will be carefully considered. The expenditure saved by halving the food subsidies would make a sizeable contribution. What is more, we could successfully cut out nationalisation plans, whether they be those envisaged in the Community Land Bill, for North Sea oil or for any other projects which the National Enterprise Board might undertake. Those are examples of worthwhile cuts, without going for defence expenditure.
There are those on the Government side of the House who would like to make even greater cuts. Indeed, I get the impression that they would be happiest if there was no defence expenditure whatsoever. I find the arguments put forward by this group to be so muddled and so inconsistent that they are impossible to understand. The only conclusion that can be drawn is that, unlike the Opposition, those hon. Members do not see Soviet strength as a potential threat but rather regard Russia as a potential ally. Only in that light do their arguments become comprehensible.
The Opposition are apprehensive about Soviet intentions. Russia has a long imperialist tradition going right back to the eighteenth century. My hon. Friend the Member for Bexleyheath (Mr. Townsend) referred to the Tzarina of Russia, the Empress Catherine. At that time the Russians had naval pretensions. One of the features of their foreign policy was to try to get across to the Mediterranean. So far as I can see, their motives have not changed, whatever may have been the changes in their political activities. There is no possible defensive reason for

635
the build-up of their strength. It is horrifying to realise that their submarines have been increased by 30 per cent., their frigates by about 175 per cent. and their amphibious craft by about 60 per cent.
In the face of that, the Government are proposing the cuts set out in the defence White Paper. What is more, many Russian fishing trawlers bristle with equipment which no fishing trawler could possibly want. I understand that the fishing trawler crews are completely interchangeable with Soviet naval personnel.
I accept that our main effort must be concentrated on the northern flank of NATO, but even there I strongly suspect that we are underestimating the strength of the Soviet navy which is operating in these waters, and that we might find it difficult in an emergency to make certain that our merchant ships could come through without hindrance.
That is to leave aside the problem of our oil rigs. When we consider the hopes built around the development of our oil industry, it is frightening that there should be comparatively little effective attention paid to the defence of the oil rigs. My hon. Friend the Member for Bexleyheath put forward a number of interesting proposals for strengthening our defences there. I hope that his suggestions will be answered and that the Government will produce practical ideas for the defence of the oil rigs, which at present are highly vulnerable.
It is not only the northern flank of NATO which is important. I emphasise the fact that we rely heavily on food, raw materials and, above all, oil from other parts of the world. It is not a scrap of use saying that as we no longer have an empire we no longer have a world commitment. As long as merchant ships and tankers bring food, raw materials and oil from the furthermost parts of the world, we have a vital world interest. It is no use making sure that the northern flank of NATO is well within our control if the ships never get through from distant parts of the world.
I understand that about 80 per cent. of our oil at present goes round the Cape. Yet we allow the build up of the Soviet presence in the Indian Ocean apparently without the Government batting an eyelid. I believe that the Minister said that
636
we cannot hope to shepherd our merchant ships around the world. However, I suggest that we must do that, especially as we must use the Cape route and the Suez Canal. However, I cannot see that many super-tankers will pass through the Suez Canal. They must perforce use the Cape route.
There was one ray of hope in what the Minister said. I refer to the decision to order maritime Harriers. My hon. Friend the Member for Plymouth, Sutton (Mr. Clark) suggested that it was not the cogent reasoning expressed by Members of Parliament but that it was the pressure of trade unionists which brought that about. I strongly suspect that we must thank the Shah of Persia. It was unlikely that the Shah would have made any purchases if he had not seen the Government making purchases first. I warmly welcome this project. I visited the Royal Navy engineering college on the day that the decision was announced. There was a noticeable improvement in morale.
Mr. Robert C. Brown: That was because the hon. Lady was there.
Miss Fookes: The hon. Gentleman is kind. I suspect that their morale was boosted not by my presence but by the possibility of this excellent addition to our Naval services.
One point was not developed in the debate. I refer to the effect on morale of continuous cuts. I do not see how we can expect the best from the Services or from our recruitment drives if there is constant chopping and changing over our defence policy. We can never be certain how long we shall continue to play an effective role. However, as we rely on a comparatively small number of men and women, who are professionals and not conscripts, it is of the utmost importance that they should be assured of a secure future so that they feel that they are usefully playing a role in the defence of their country. My great fear is that, as a result of these cuts and the threats of further cuts, morale will be dangerously undermined.
8.45 p.m.
Mr. Deputy Speaker: We have 15 minutes for three speeches—all from the Opposition benches.
Mr. John Farr: I shall be brief because most of the arguments

637
I wish to make have already been deployed, mainly from the Conservative benches and some from the Labour benches.
Basically, the theme I wish to pursue, and would have pursued at greater length had the time, is that the White Paper and these Estimates for the Royal Navy are just not good enough and are placing the country's defences in jeopardy. I shall give two or three examples to illustrate what I have in mind in the short time I have available to me.
In the White Paper it is stated that there are plans for us to withdraw our naval presence entirely from the Mediterranean in 1976. This announcement has been made in a year when the Suez Canal has been opened after being closed for many years and in a year when there has been the conflict between the Turks and Greeks over Cyprus, of whose constitution we are guarantors. It makes one wonder what further foolishness the Government can enter into.
Further on in the White Paper we read of the Government's plan to withdraw the Royal Navy from the West Indies. However, the West Indies and islands adjacent to them have in many cases placed upon this country the responsibility for defence. It would be difficult to indicate that we intended to do something about their defence if the presence of the Royal Navy were withdrawn entirely from the area.
Later in the document we read the same dreary story about Britain withdrawing from Mauritius and closing down HMS "Mauritius" in the Indian Ocean. I was in Mauritius about a year ago and I visited the signal station in HMS "Mauritius". I was most impressed, not only by the effective communications work being done by the Navy there, but also by the attachment, the affection and the respect in which the station and Royal Navy personnel were held by the Mauritian Government and people. When the Minister replies, will he tell the House how this heavy and vital signal traffic will be handled in the future if the plans go ahead and HMS "Mauritius" is closed down, together with the Gan staging post?
In this disappointing and dreary document there is a reference to the Royal Naval Reserve. I share the concern
638
which has already been expressed by many Conservative Members about the future of the Royal Naval Reserve and the Royal Naval Volunteer Reserve. I confess that I have an interest here in as much as I am still training with RNVR. I hope that the Minister takes careful account of the excellent suggestions put forward by Conservative Members that the reserve should be involved a little more in the defence of our North Sea oil installations quite apart from the essential work which, as the Minister knows, the reserve already does, especially in merchant shipping deployments in the event of an emergency.
What is almost entirely lacking in this White Paper, as it was in the last one, is any mention of hovercraft. Certainly there is a line which says that the possibility of hovercraft detachment and their operations within the Fleet in the future are still under consideration. Does the Minister not recognise that it is about time that this consideration blossomed into action? Does he realise that, for instance, the French are now engaged on the construction of a new generation of hovercraft which will carry 400 passengers? It is twice as big as anything we have. Although plans have been on the drawing board at the British Hovercraft Corporation at Southampton for nine months we still do not have the Government's authority and backing to go ahead. There is a great future, in a defence use, of hovercraft. Other world navies have already found it of vital help. I do hope that the Minister will at least interest himself in the situation of British hovercraft, where plans exist but are held up simply because of the lack, which has been made apparent, of Government financial backing.
8.50 p.m.
Mr. Peter Blaker: The theory is that the Government's defence policy is based on deterrence—deterrence of an outright attack, deterrence of any military adventures, deterrence of efforts to put pressure on other countries, ourselves or our allies, for political changes by the use of Soviet military forces, but there is a danger—I have in mind especially the Government's naval cuts—that it is ceasing to be a policy of deterrence and is becoming a policy of provocation—provocation by weakness and by continuous cuts.

639
By the demonstration of lack of political will to maintain our military defences we may be getting into a situation in which the Soviet Union may be tempted to chance its arm in the hope of a quick gain. I believe that the greatest danger to peace in the world at present lies in the weakness of the West and the failure of the West as a whole—I am thinking particularly of our present Government —to show the necessary political will. Both matter equally.
It is valuable to ask ourselves from time to time how we must look to the Soviet Union. I believe that if the Soviet Ambassador were reporting to Mr. Gromyko he would make three points relevant to our defence posture. First he would make the point that Britain is led by a Prime Minister who is unable to take any other course than to seek the soft option. The ambassador could cite the right hon. Gentleman's behaviour in 1969, when he abandoned his policies in the face of trade union and Left-wing pressure; his behaviour over the Common Market; his change of policy over the referendum; and his surrender to the pressure from the Left wing in connection with the percentage of our gross national product that we spend on military purposes—the arguments from the Left wing which is plainly fatuous to anyone who has studied what happened in the 1930s.
The second point that the ambassador would make would be that it is very difficult indeed to find any thread of consistency in our defence policy. We have a defence review which is meant to be definitive for 10 years. We follow it a few weeks later with £110 million of further cuts. We acquire an asset in the North Sea of immense value, the oil rigs and so on, for which we fail to provide any adequate defence.
At a time when the Soviet Union is making vast increases in its naval strength we are cutting our naval strength. When the Soviet Union is establishing shore facilities in Conakry, Somalia and Aden and is extending its Indian Ocean fleet, we are giving up Gan, Mauritius and Simonstown. We are making no effort to extend NATO cooperation to the South Atlantic or the Indian Ocean. At a time when things in the Mediterranean are looking extremely good from a point of view of
640
the Soviet Union, Britain is pulling out of the Mediterranean itself.
The third point that the ambassador would make would be that although our present Government call themselves Socialists they show no sign that they are aware or take account of Soviet long-term aims. They show no sign that they have studied what Lenin said about the importance, from the point of view of the Soviet Union, of depriving the West of its sources of raw materials. The ambassador would say that we had forgotten that Khrushchev said that the Russians were going to bury us, and that we appeared to be entirely deceived by what the Soviet Union means by détente. He would say that astonishingly, we failed to pay any attention to what Solzhenitsyn has said about the motives of the Soviet Union and the success which the Soviet Union has already achieved.
I think that he would wind up with these recommendations to Mr. Gromyko on future Soviet action. First, he would say "Comrade Gromyko, continue to talk loudly about détente because as it is now practised it is a sleeping draught for the West".
Secondly, he would say "As Britain is one of our softest targets, step up your efforts within the British trade union movement. As I have continually pointed out to you, the trade unions control the Labour Party. Intensify your contacts with the Left-wing of the Labour Party, which have borne such tremendous fruit so far. Resist any effort to make progress with the MBFR talks. You do not need to make any progress. Britain is disarming itself unilaterally. Let us stall and preserve our strength. Let us continue at full speed to build up our naval forces. Very soon it will be true, if it is not true already, that the West will not be able to defend its merchant shipping. When we arrive at that situation many options will be open to us. For example, in the northern part of the Indian Ocean it will be possible to block the progress of oil tankers carrying oil to the West. We shall be able to say that we shall let the tankers travel through only if the West will make concessions to us in Berlin. If the Labour Party is in power in Britain at that time it will be interesting to see its reaction. My guess"—and I am speaking as the Russian Ambassador—"is that a Labour

641
Government would be inclined to make concessions."
I believe that is a fair analysis of what the Soviet Ambassador would report to his Government at present. If the Minister disagrees, I hope he will explain why.
8.57 p.m.
Mr. Peter Viggers: The debate has been on the Royal Navy and its deployment and strategy, but in the minute or two remaining I wish to say a word or two about the men of the Navy and their families.
The Seebohm Report referred to separation and housing difficulties as being the distinctive problems of the Royal Navy. It is clear that separation goes automatically with the job, but housing can be tackled. Housing presents a problem which the Minister will understand. I trust that he is assiduous a reader of the local papers as I am, and that he will have seen the Rowner Estate described as "HMS 'Heartbreak', the problem town". The estate contains 3,000 houses in the town of Gosport. I am aware that the Navy is concerned about the particular difficulties of having such a large estate, but I would like to be assured that the lessons of building such large estates have been learnt.
I suggest that it would be helpful to have a dialogue on naval housing between those who are concerned with the problem in the Ministry of Defence on the one hand, and, on the other the local authorities and Members of Parliament who have learnt by their various experiences of the nature of the problem. It is right that people with experience in the Royal Navy, whose tradition has been one of service in the Navy, should be tight-lipped about certain problems, but I believe that their lips could be allowed to relax slightly to talk about housing. It is not a military problem and presents no security problems.
My second point is a specific and difficult matter which I have raised before in the House—namely, the housing of ex-Service families. The background is that families in the Services have no residential qualifications in any local authority area. Some people in the Services are able to make provision for themselves, but not all can do so. That applies particularly to ex-Service fami-
642
lies where there has been a divorce, where a wife has been deserted or where a husband has been invalided out or has had to leave the Service prematurely.
When Service families cannot obtain accommodation—and the situation is made more difficult by the fact that privately rented accommodation has disappeared from the market—they stay put. I mentioned the large estate at Rowner. There is a total of 4,000 naval accommodation units in Gosport. There are difficulties in my constituency for ex-Service families, but this is a problem which is experienced generally in garrison towns. When families cannot obtain accommodation in the towns from which they come, they sit tight where they are. If it is a naval hiring, eventually the Ministry of Defence is forced to serve an eviction order on the family. That family then becomes homeless and that creates a problem for the local authority in whose area they are then living. This means that the garrison towns face immense problems in dealing with large numbers of people who seek accommodation.
We have for a long time been awaiting publication of a Department of the Environment circular on housing for ex-Service men. It has at last come to light. It is Circular No. 54/75, dated 9th June 1975, and it has been greeted with dismay. It gives no firm guidance to the local authority but leaves matters in the air. In brief, the circular states that Service men should be given consideration, by their local authority origin, but the result is that, although they are given sympathy, they are not usually accorded housing accommodation.
Most authorities are sympathetic. I have had conversations and have entered into correspondence with a number of authorities outside my constituency. They are helpful once they have seen the problem, but surely the Minister can use some of his charm on his colleagues in the Department of the Environment to make sure that firmer guidance is given. The situation cannot be left as it is.
9.3 p.m.
Rear-Admiral Morgan-Giles: When one has spent thirty years in the Services it concentrates the mind wonderfully to be told that one has three minutes in which to make one's contribution to a debate. However, I am

643
grateful to my hon. Friend the Member for Haltemprice (Mr. Wall), who is to speak for the Opposition, for giving me this opportunity.
I hope the House will acquit me of wishing to speak with a single-Service voice when I say that priority needs to be given by Britain within NATO to a maritime strategy. The one aspect of this strategy to which I wish to refer is that of anti-submarine warfare. The Minister pointed to the importance of anti-submarine warfare, but he appears to be unable to provide the wherewithal.
On the subject of anti-submarine warfare, comparisons with previous world wars are invalid. The advent of nuclear propulsion creates an entirely new dimension. No country has revealed how fast its nuclear propelled submarines can go, but it is a well-known fact that they can far outstrip any Service escort vessel. The only way to hold and track a nuclear submarine is to use a helicopter. I say with great satisfaction that Britain is in the forefront in all the techniques of anti-submarine warfare, and particularly in our possession of Sea King.
There is not much on which to congratulate the Under-Secretary of State for Defence for the Royal Navy but I certainly wish to congratulate him on keeping the through-deck cruisers, which will be able to deploy the Sea King. In anti-submarine matters, it is vital that there is full co-operation between sea and air defences.
Our biggest contribution to NATO is to develop and continue the lead which we have emphasised in our maritime strategy rather than to keep our large standing army in Europe. We understand the political importance of BAOR, but we must seek to build up our task forces at sea to meet this vital anti-submarine problem.
9.05 p.m.
Mr. Patrick Wall: This is the last of the current series of debates on Her Majesty's Forces, and many Opposition Members feel that in some respects it is the most important. The reasons for this view are given in a leading article in today's Daily Telegraph, where it is pointed out that there is no longer cer-
644
tainty that we can protect convoys across the Atlantic in time of war. That is quite apart from the question of protecting oil.
The article says that:
"There is now no longer reasonable certainty that NATO could keep the sea-lanes, and especially the crucial Atlantic life-line, open".
It goes on to say that:
"The NATO countries have the resources to meet it if only they have the will."
That is the stick with which we will beat the Government. We believe that they could have the resources if only they had the will to provide them.
There are certain fundamental differences between the two parties. I hope that if anything has been gained by this series of debates on defence, it is that the Secretary of State will now realise what these fundamental differences are. First, there is the question of priority. Secondly, there is the assessment of the threat and how we should react to it.
I shall deal first with the question of priority. My hon. Friend the Member for Louth (Mr. Brotherton), in a powerful and welt-directed speech, pointed out that it is any Government's first duty to protect the security of the State. We agree that any defence budget must be linked with the strength of the country's economy. I remind hon. Members who always put forward the argument that if we spend more money on defence we have got to cut education, health or whatever, that there would be no health service and no education facilities if we were beaten or had to surrender in war. There is no freedom under Marxism.
The Conservatives, when in office, have cut defence expenditure, but when the economy has recovered we have expanded our defence forces. The Government can claim to be spending more money on defence, but they are certainly not expanding—they are cutting our defence forces.
Conservatives believe that, unfortunately, defence has been, and still is today, the Aunt Sally of the Socialist Party. I must advance some facts supporting those allegations. I shall not go back to the 1930s and the continual voting by he Labour Party against rearmament, but I shall come to modern times.

645
Between 1964 and 1966 there was a defence review which was 18 months in gestation. It was the review to end all reviews. It was to set the pattern and target for the Services for the next 10 years. When it emerged it led to the cancellation of all the advanced aircraft projects of the RAF. It ended fixed-wing flying in the Fleet Air Arm. It led to our withdrawal from Aden. It was followed in July 1966 by a further cut of £100 million. In February of the following year the withdrawal from Malta was announced. In July there was the withdrawal from South-East Asia. In November there was a cut of £100 million. In January 1968 there was the withdrawal from the Persian Gulf, followed by another cut of £100 million. That is what I mean when I say that defence is the Aunt Sally of the Labour Party. Conservatives believe that defence should be given a much higher priority.
I turn to the threat. Provided NATO keeps up its guard, I believe that there is little danger of war in Central Europe. Why? Because major war would escalate almost inevitably into a nuclear confrontation. Thus we have the policy of détente which is based in essence on the nuclear stalemate that exists at present in Central Europe.
I shall in my speech endeavour to show why we believe that the real danger at present lies not in Central Europe but in the flanks. I accept that the Government are facing the historic difficulty faced by all Governments in this country for centuries, namely, that of getting the correct balance between a continental and a maritime strategy. We believe that the Government have not got the correct balance. Perhaps it is not important for me to stand at this Dispatch Box and say that. I therefore quote, not an admiral but a general—General Steinhoff, the late Chairman of the NATO Military Committee, who said only last year:
"The growing Soviet strength at sea is probably the most important military-political development of the second half of this century."
Yet the Government are maintaining the position in the centre and cutting back on the flanks. Why? I suggest that there are at least two reasons for this.
The first is that they are bound by the Brussels Treaty to keep a certain number
646
of forces in Central Europe. They know that if they cut those forces they will have a major political row with their allies. The Brussels Treaty did not cover the flanks, and, therefore, there will be no row with the allies if the Government cut forces on the flanks. Second, such a move lessens the prospects of a row, notably with the Tribune Group and the Left wing of the Labour Party, who seem to us to be out to destroy our defence forces.
Hence we have this White Paper, in which, again, there are cuts and a withdrawal, this time, as pointed out by the hon. Member for Colchester (Mr. Buck), from the Mediterranean. This White Paper was to set the course of the Forces for the next generation and had been "carefully thought through" as the Minister said today. It was nearly a year in gestation. Yet it was followed only a few days later by more cuts, with probably even more to come.
We believe that this system of arbitrarily cutting defence forces is highly dangerous to the security of the State and to the morale of the Forces. I was glad to hear the hon. Members for Bristol, North-East (Mr. Palmer) and Walsall, South (Mr. George) from the Labour Benches agree that this approach of defence by cuts was wrong. I think that the hon. Member for Bristol, North-East said that we had now reached the limit in defence cuts that would be tolerated by the British public. I hope the Chancellor will beat that in mind during the next few days or hours.
There is one other point the House should note on this question of the White Paper, and that is that, as in 1964–68, these cuts are to take place on the flanks of NATO where we believe the major threat lies. On the central front NATO is outnumbered, especially in tanks and aircraft by about 2½:1. The position can be held thanks to the nuclear deterrent. There is stalemate. There is no danger of immediate war because there is the policy of détente.
We should remember that the MBFR talks are concentrating wholly on the central front of NATO and do not affect the flanks. That is significant. The Soviets have taken the obvious course of exploiting the flanks by maritime power, which has been referred to by every Conservative speaker.

647
I turn now to the flanks. The northern flank has been ably dealt with by my hon. Friend the Member for Ayr (Mr. Younger). The disparity in land forces in Northern Norway is in the region of four Soviet divisions with four in reserve against one NATO brigade group. Due to the policy of the Norwegian and Danish Governments in refusing to have foreign troops on their soil or tactical nuclear weapons in times of peace, the need is for rapid reinforcement.
For rapid reinforcement we need commandos, amphibious shipping, and aircraft carriers for close support. Yet the Government have cut the commandos, our amphibious forces and our carriers. The danger lies largely on the southern front because of the political setbacks suffered by NATO in recent months. There is the quarrel between Greece and Turkey over Cyprus and the position of Yugoslavia when Marshal Tito dies. There is the problem of the large Communist Party in Italy and the future of Portugal. On the other side of the Mediterranean lies North Africa, from which the soft underbelly of the Axis was assaulted in the last war. Then it was wholly on our side. Now, at best, it is neutral, at the worst possibly hostile. I know that Soviet aircraft have been withdrawn from Egypt but there is still a Soviet naval base in Alexandria and at Mersa Matruh.
I understand that a new treaty is being signed with Libya, where there are already 400 Russian technicians. It may well be that Soviet aircraft will have the right to operate from Libyan bases, which would give them command of the central and western Mediterranean, where they cannot operate at present. My hon. Friend the Member for Bexleyheath (Mr. Townsend) pointed out that for the first time the Russians are building assault aircraft carriers. The first one, "Kiev" is likely soon to come through the Dardanelles from the Black Sea and is unlikely to be stopped by the terms of the Montreux Convention. Also the Suez Canal is now open and the Soviet Union can switch its Black Sea fleet to the Mediterranean or to the Indian Ocean at will.
Concerning the Mediterranean and the proposal to withdraw, it should be remembered that 75 per cent. of all Italy's requirements have to be imported by sea
648
and that in time of war Italy, Greece and Turkey need to be re-supplied after 30 days. What, therefore, is the need? It is for anti-submarine ships, maritime aircraft and an amphibious lift to reinforce the flanks. These are exactly the components of the Forces that the Government are now cutting.
To sum up my remarks on the Southern Flank, I quote from Admiral Johnson, Commander Allied Forces South, who is responsible for NATO in the whole region. Talking recently about the British defence cuts, he said:
"The United Kingdom's current proposal would greatly reduce her traditional rôle as a Mediterranean power. Further, it would seriously lessen our already limited conventional capabilities, our vital external reinforcements and our technical nuclear operations. I believe the results would far exceed those of her earlier withdrawals from East of Suez and would ultimately deal a heavy blow to our deterrent posture as well as eliminating an important stabilising influence in the region."
In other words, the withdrawal of the Royal Navy from the Mediterranean, after many centuries, is making nuclear war more rather than less likely. But, of course, it is to the wider oceans that we really should be directing our thoughts, and that has been done by almost every speaker on the Opposition side, particularly my hon. and gallant Friend the Member for Eye (Sir H. Harrison), with his great experience.
I believe that the table on page 6 of the White Paper gives a false or at least a totally inadequate picture. It shows the relationship between surface ship and surface ship, between submarine and submarine, and between combat aircraft and combat aircraft. The Minister knows very well that the key problem in the Atlantic is not the relationship between surface ship and surface ship but the relationship between submarines and antisubmarine vessels, and the relationship between the Soviet submarine fleet and the merchant ships required by Western Europe.
As pointed out by my hon. Friend the Member for Shoreham (Mr. Luce) and by my hon. Friend the Member for Tyne-mouth (Mr. Trotter), 90 per cent. of the world's trade is still carried by sea. On any one day there are well over 3,350 ships in the Atlantic, 100 ships in the Mediterranean, 600 ships in port in the

649
United States and Canada, and well over 1,800 in port in Europe. That is a total of well over 5,000 ships, and this explains why the Russians are spending so much money on their maritime expansion. It is because they realise that this country has twice been brought to its knees by submarine warfare. Now the target is not this country but the whole of the NATO alliance and the West. By 1980 the Soviet navy will have 275 modern submarines, including 170 nuclear-powered submarines—a figure far larger than the combined NATO fleets.
Mr. Robin F. Cook: The hon. Gentleman went over this when I was addressing the House and referred to "Jane's Fighting Ships". I have since consulted "Jane's" and find that the figures are the following. The Soviet Union at present has 84 nuclear-powered submarines, the United States 102, the United Kingdom 14 and France five. On those figures the West has an advantage of 50 per cent. over the Soviet Union. Those are the figures in "Jane's".
Mr. Wall: The hon. Member must have looked at a different copy of "Jane's", because the figures I have given are those that have been quoted at the various NATO conferences I have attended. It has been quite clear that the Soviet nuclear submarines outnumber those of the combined NATO fleets. It is possible that we are at cross-purposes. I am talking about ballistic missile nuclear submarines and the hon. Gentleman is probably talking about purely nuclear-propelled hunter-killer submarines. I should have thought that the ballistic missile submarines were the main offensive vessels with which we ought to be much concerned.
I also remind the House and the hon. Gentleman that the Soviet Union will have over 20 of her new D class submarines, with missile ranges of 4,200 miles, in service before the first American equivalent, the Trident submarine, is even built. This shows the immense tonnage and power of the Soviet navy.
I think that the Minister will agree that the important issue is the balance of submarine to anti-submarine forces. In World War I it was one German submarine to 5·9—say, six—allied antisubmarine vessels. NATO has now just under 500 anti-submarine vessels built
650
or building, and the balance of Soviet submarines to NATO anti-submarine vessels, therefore, is of the order of 1 to 2.
But it is even worse, because NATO, as a defensive organisation, has to spread its anti-submarine vessels all over the seas of the world to protect its trade. What is more, as my hon. and gallant Friend the Member for Winchester (Rear-Admiral Morgan-Giles) said, we are now dealing with true submarines and not the conventional ones which had to surface at night to recharge their batteries. Yet this is exactly where the Government are cutting. They are cutting our anti-submarine forces, and this we find inexcusable. They are cutting them by one-seventh, and they are cutting our maritime aircraft, which complement them, by no less than a quarter.
Will the hon. Gentleman confirm that the cuts announced in the White Paper mean that two Type 42 destroyers, four Type 22 frigates and six mine countermeasures vessels which were planned to be built are not now to be built? That is a major slice of our modern anti-submarine forces.
I have not mentioned the Indian Ocean. It has to be mentioned because something like 60 per cent. of our oil supplies passes through the Indian Ocean and will continue to do so until the North Sea is fully productive in seven, eight or perhaps 10 years' time. What is more, 25 per cent. of our food and 15 per cent. of our mineral requirements pass the Cape of Good Hope. It is estimated that there are 200 tankers at sea at any one time in the Indian Ocean and about 100 other ships carrying food and essential minerals.
We heard a Soviet apologia from the hon. Member for Edinburgh, Central (Mr. Cook), but we must remember that Soviet warships and auxiliaries in the Indian Ocean have increased threefold in the past three years, and that their presence in the Indian Ocean is permanent. The American presence is only temporary. The permanent American presence there consists of two destroyers based at Bahrein.
How are these 200 tankers and 100 other ships to be protected? Perhaps by air. But now the Government are withdrawing from Gan, from Mauritius and from Singapore, with the result that there

651
will be few airfields left from which aircraft can operate.
The Government have also renounced the Simonstown Agreement. My right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) made a powerful speech about the value of the Simonstown Agreement and the Government's stupidity in renouncing it. It was also referred to by others of my hon. Friends, including my hon. Friend the Member for Plymouth, Drake (Miss Fookes).
Of all the agreements that the British Government ever signed, the Simonstown Agreement was the most one-sided. It gave us all the advantages. All that we had to do was to re-equip the South African navy 10 to 15 years ago. We had port facilities in Simonstown. We had the use of all South African ports in time of war even if South Africa was not involved in the war. We had command and control of the area, and the cost to us was precisely nil.
Not long ago I asked the Foreign Secretary how many African countries had objected to our maintaining the Simonstown Agreement. The answer was that none had. We know that this was a party political manoeuvre and that the Government renounced the Simonstown Agreement to please the Tribune Group and to try to heal some of the divides in the Labour Party.
It is no good anyone saying that we have an alternative in Diego Garcia. Simonstown, Durban and the use of South African ports mean something in war because any base needs an industrial hinterland. An island like Diego Garcia could be eliminated by a nuclear bomb. It is not a base. It is merely an anchorage and an airfield. I heard the Minister use this argument about Malta. The same applies to Diego Garcia.
We believe—and I am glad that it was repeated by the hon. Member for Bristol, North East, my hon. Friend the Member for Shoreham and others—that NATO must take some responsibility for the South Atlantic and the Indian Ocean, because 57 per cent. of the ships passing through both waters belong to NATO nations. There is no possibility of changing the southern boundary of NATO. That would be politically impossible at present. But I believe that SACLANT should be authorised to plan in this area
652
and that the deep-water nations, if I may so describe them, which are members of the alliance should provide the communications, training and exercise which would make this contingency planning effective. Furthermore, we in this country should give the lead.
As I see it, the danger is that the balance in maritime strategy has shifted so far in peace time that one day we shall wake up to find that we cannot protect our shipping and that we are then faced with the choice between surrender or starvation. That could happen sooner than most people think.
We on this side are always accused of wanting to spend more money on defence, it is our policy to give a higher priority to defence than do the present Government, but I can make two suggestions for saving money. The key lies in standardisation. NATO as was pointed out by my hon. Friend the Member for Harrogate (Mr. Banks) has 100 different types of ships of destroyer size and above, 36 types of radar, 20 types of surface-to-surface and surface-to-air missiles and 40 types of guns of 30 mm and above. We must make a positive start, and I think we should begin with naval missiles. There is less vested interest in this modern technology than in tanks or airframes.
The Committee of National Armament Directors has agreed to harmonise requirements for the next generation of surface-to-surface missiles, but at the moment that is just a pious hope. Having visited most of the firms in Europe that produce missiles, I believe the real problem is the definition of operational requirement and the basic design studies. We shall not get standardisation as long as studies are done by the various nations. They must be done by an international organisation, and what better organisation than NATO?
NATO needs funding for the production of basic design studies for missiles, and I would suggest that every member State should give say two per cent. of its research and development funds to NATO for this purpose. This would be a most cost-effective course of action. There is a precedent in the NATO infrastructure programme, which has been an immense success, and owed its birth to my noble Friend Lord Carrington, who did so much for the defence forces.

653
The second suggestion is that we should also attach more importance to the use of missiles in small craft. I have been struck by the effectiveness of many surface-to-surface missiles of the present generation, including some which will continue into the next generation. They include Exocet, MM40 and Otomat.
Before the Second World War, we led the world in the production of fast patrol boats. Unfortunately, our Navy does not now favour them and we have only five, three unarmed and two in reserve. I believe these craft are needed and could be used for the protection of fishery limits, particularly when they are extended to 200 miles, the protection of North Sea oil rigs—a subject on which I have not time to dwell but received the suggestions made by my hon. Friend the Member for Bexleyheath—and in air-sea rescue, as well as for a number of other peace-time purposes. They could become a valuable weapon for the Navy in a war, and could carry two or four of the missiles I have mentioned.
There is only one anti-missile missile which can deal with these missiles—the British Sea Wolf—and I hope the Government will do all they can to see that this world-beating weapon has a real export potential.
The hon. Member for Edinburgh, Central, speaking on behalf of the Tribune Group, suggested that there was no real threat. To answer him, I can do no better than quote Pravda, the official organ of the Soviet Union, which said recently:
"Peaceful co-existence does not spell an end to the struggle between the two world social systems. The struggle will continue between the proletariat and the bourgeousie, between world socialism and imperialism, up to the complete and final victory of Communism on a world scale".
That is the threat we face. I believe the Secretary of State and the Under-Secretary realise this, and I believe they had done their very best to combat it. Their winning of the long-fought battle for the naval Harrier is an illustration of what I mean. It is not them I am getting at, but I fear that they have failed to persuade their Cabinet colleagues to give defence the correct priority. We believe that the Left wing will always exert a major influence on defence policy with a Labour Government. The Government's previous record has shown that they were
654
prepared to sacrifice security for party political purposes. We believe that they are continuing this policy, and in so doing they have physically weakened the NATO alliance and psychologically dealt it severe blows where NATO is weakest—on its sea flanks.
For all those reasons we cannot trust the Government's defence policy, which in the past led us to the beaches of Dunkirk, and which since then has continuously neglected our maritime forces. We shall, therefore, vote against these Estimates in order to show the country and our allies that we on this side of the House are prepared as a party to pay the price needed to achieve any Government's major duty, namely, to provide an adequate defence for the security of the realm.
9.32 p.m.
Mr. Judd: With the leave of the House I shall speak again. I am sure that I speak for a lot of people when I welcome the lion. Member for Haltemprice (Mr. Wall) to the Opposition Front Bench. He has a great deal of knowledge and energy to contribute to defence debates. However, his history is a little shaky and he should reflect on who it was who lead this country to the beaches of Dunkirk.
This has been a good debate and there has been a lot of interesting comment. With the co-operation of hon. Members on both sides of the House I hope to deal with as many points as possible. If I do not do justice to what Members have said I hope to write to them more fully within the next few weeks.
Conservative Members seem to have been complaining this afternoon about our concentration on NATO commitments at the expense of other areas outside the alliance. Sooner rather than later they must choose. This country can no longer afford to spend such vast amounts of money on defence that they demand in Opposition but could not live up to in Government. The last Conservative Government were beginning to realise this when they lost the General Election. They imposed arbitrary short-term defence cuts of more than £290 million at 1974 prices. Their foreign defence policies had been overtaken by economic realities. I am at a loss to understand how, against this background, even they are prepared to divide the House tonight.

655
We therefore had to sort out the muddle and uncertainty they left behind. They had no clear idea about what Britain with the Royal Navy could realistically contribute to NATO's maritime strategy. The mere fact that they keep harping on about protecting our trade interests everywhere without regard to the realities of the situation indicates that their defence thinking continues to be based on outdated precepts which, when it came to the crunch, could not be sustained. The hon. Members for Plymouth, Sutton (Mr. Clark), Plymouth, Drake (Miss Fookes) and Blackpool, South (Mr. Blaker) should appreciate that the people of this country and our allies recognise that we in Government have the courage, which the Opposition when in office lacked, to recognise that we can no longer hope to be everywhere at once. We at least have faced up to this fact. Our most basic and vital interests in any future conflict would inevitably be in the NATO area. We do not intend as an administration to undermine this by overextending ourselves in a sentimental and positively dangerous way.
The hon. and learned Member for Colchester (Mr. Buck) and others asked about the additional cuts of £110 million. It is too early to say how the Navy will be affected by this reduction, but I am prepared to say that the cuts will be made in a way that will do least damage to the defence programme as a whole. We are determined to make these savings without jeopardising our defence capabilities, and it is likely that the bulk of them will be found from deferments in the equipment and works programmes.
As to further cuts in later years, to which some hon. Members have referred, including the hon. and learned Member for Colchester, and my hon. Friend the Member for Bristol, North-East (Mr. Palmer) in a most interesting and reflective speech, I cannot comment or speculate about any reduction in public expenditure. Obviously, no public expenditure programme can be guaranteed irrespective of the state of the economy; but I can assure the House that our plans continue to be based firmly on the broad level of capability decided on in the defence review.
The hon. Member for Ayr (Mr. Younger) and others suggested that we
656
should persuade NATO to take a more positive view in keeping open the sea routes outside the immediate NATO region. NATO's responsibilities do not, of course, extend beyond the immediate NATO region, but this is not to say NATO members do not share a common interest in protecting their shipping in time of war outside the NATO area. Of course, the security of oil and other supplies is a collective interest, which we share with our Allies and we shall be able to play our part. The Royal Navy will retain its ability to deploy world wide. SACLANT is studying the problems involved.
The hon. Member for Louth (Mr. Brotherton) and the right hon. Member for Brighton, Pavilion (Mr. Amery) seemed doubtful of our ability to make use of naval facilities to support deployments in the Indian Ocean following the termination of the Simonstown Agreement; and my hon. Friend the Member for Hornchurch (Mr. Williams) asked for more information about deployment south of the Tropic of Cancer. We would expect to be allowed to use ports in a number of Indian Ocean countries on a commercial basis. Facilities exist in Singapore under the Five Power defence arrangements; and facilities exist and will exist at Diego Garcia; and we are confident that in appropriate circumstances Australia and New Zealand would help.
Apart from the wider political considerations which are not to be ignored it is clear that the strategic importance of Simonstown, a port at one extremity of the Indian Ocean, has been over-estimated by some hon. Gentlemen, but those in this House who over-estimate it should bring themselves up to date with the most recent professional thinking. My hon. Friend the Member for Edinburgh, Central (Mr. Cook) said the proposal to extend Diego Garcia would result in an increased Soviet build-up in the area. The Soviets have already built up their forces there. The Soviet naval presence in the Indian Ocean has increased steadily in quantity and quality over the last five years and is larger than that of Western countries. The modest expansion of the facilities at Diego Garcia is fully justified by the United States, British and Western interest in the security of the vital oil supply shipping routes in the area.

657
We do not believe that this expansion would hamper progress towards the search for realistic arms limitation arrangements in the area. Such arrangements would depend for their success on the co-operation of both super Powers, and we for our part are determined to go on pressing for this as hard as ever.
I would like to thank the hon. Member for Louth for what he said on the decision to discontinue the Beira Patrol which, for more than nine years, has been successful in preventing the pumping of oil to the pipeline from Beira to Southern Rhodesia; and I congratulate hon. Gentlemen opposite on the full maintenance by the Conservative Government of that patrol. Having visited it myself in tough conditions I would like to pay tribute to the many men of the Royal Navy for maintaining that patrol, against sometimes very uncomfortable personal conditions. We are happy that with the independence of Mozambique such patrolling is, of course, no longer necessary to achieve that purpose.
The hon. Member for Louth also mentioned Greece and Turkey. Obviously, this dispute is a worrying one for NATO. We very much hope that a reconciliation can be achieved. We also naturally regret the Greek decision to withdraw from NATO's integrated military structure. There are obviously a number of detailed problems to be discussed, and these discussions cannot be rushed. We hope that the outcome will be to retain as much Greek co-operation as possible within NATO.
While on the question of the Mediterranean I would remind the House, and particularly the hon. and learned Member for Colchester, that, following consultations with our allies, we shall be participating in maritime exercises in the Mediterranean and in the NATO naval on-call force in the Mediterranean and continuing reinforcement operations for the southern region. The hon. and gallant Member for Eye (Sir H. Harrison) and the hon. Member for Haltemprice will, no doubt, be pleased to know that an important NATO exercise is planned in the Mediterranean this autumn in which United Kingdom forces, including the Royal Marines, will play a full part.
My hon. Friends the Members for Darlington (Mr. Fletcher) and Barking
658
(Miss Richardson) asked several questions about our Polaris missiles. Whilst I cannot, as we have explained in the past, make known the research and the development costs of our nuclear programme or state explicitly how we intend to maintain the effectiveness of our deterrent, since disclosure of this information would not be in the interests of national security, I assure my hon. Friend the Member for Barking that when we said that we had no intention of MIRVing Polaris or moving to a new generation of strategic nuclear missiles we meant precisely what we said.
As my right hon. Friend the Prime Minister said on 24th June 1974 we look forward to the day when these obscene weapons will disappear. Till that day, towards which we work by multi-national negotiation and agreement, we do not consider that a unilateral gesture would influence any country's decision. That is why, although I sympathise with the objective behind the proposal of my hon. Friends the Members for Darlington and Barking, they should not advocate measures that would diminish Western European security without enhancing that of the world.
I listened with great interest to the thesis put forward by my hon. Friends the Members for Glasgow, Govan (Mr. Selby) and Darlington that any future war would inevitably involve the use of nuclear weapons. I agree with my hon. Friend the Member for Darlington that the answer to war is a political one, that our basic aim should be détente, but I remind him that the whole purpose of having a mixture of capabilities, including adequate conventional forces, is to make clear that NATO would respond in an effective but unpredictable way. The aim here is to deter aggression at any level, but if an adversary were to attempt a military adventure we should also have the means to contain the situation while a political solution is found.
The hon. Member for Harrogate (Mr. Banks) referred to the development of the Soviet navy over the past five years and the importance of keeping down the age of our own destroyer-frigate force. The reduction in planned numbers of destroyers and frigates as a result of the defence review will be achieved by balanced reductions in both older ships and new orders, and the average age of

659
the force will not be significantly affected. The average age of the force may indeed fall in the short term with the earlier disposal of older ships, The new construction programme will be maintained, and further orders will be placed to add to the 13 ships of the Type 21, Type 22 and Type 42 classes already under construction. The first ships of the new Type 21 and Type 42 classes have, of course, recently entered service.
Many hon. Members, including the hon. Member for Portsmouth, South (Mr. Pink) and the hon. and gallant Member for Winchester (Rear-Admiral Morgan-Giles) without whose presence no defence debate would be a defence debate, expressed concern about the reductions in our anti-submarine warfare forces.
Hon. Members referred especially to frigates and Nimrods. In general, the reductions we have had to make have been designed not to affect our anti-submarine contribution in the priority area of the Eastern Atlantic and Channel. In considering this hon. Members must remember, too, that our total anti-submarine warfare capability is provided by a number of complementary capabilities. Thus, our frigates and Nimrods, important as these are, are only part of our planned package of capability. They will operate with the new anti-submarine cruisers and our growing force of nuclear submarines. We decided in the defence review to maintain these two programmes precisely because we recognised the central importance of dealing with the submarine threat.
I am, of course, deeply grateful to all the Opposition Members who have expressed pleasure at the Goverment's decision to go ahead with the maritime Harrier. May I particularly thank the hon. and learned Member for Colchester—although I disagree with everything he said on the subject of nationalisation—for his vivid description of the aircraft's performance from his personal experience? Having heard that, I am glad that we were able to make his decision for him.
The hon. Member for Shoreham (Mr. Luce) referred to standardisation. Collaboration already exists—for example in the Lynx helicopter and in marine gas turbines which are being adopted by a number of European navies, but I would
660
not claim that more should not be done in this field, and we are actively working to this end. The Eurogroup, under the current chairmanship of the Secretary of State, is already doing some very promising work on tactical doctrines and concepts. Agreement here—and there is agreement already in some areas—should make it easier to align operational requirements and should greatly facilitate co-operation.
The hon. Member for Louth referred to the number of different types of destroyers and frigates in service and the need for standardisation in ship designs. I do not pretend that early progress is likely here. In the case of destroyers and frigates we and other NATO navies are already committed to designs to meet our requirements in the next decade or so. But for all requirements beyond that period we have been exploring, and will continue to explore, the possibilities for standardisation with our alliance partners.
I noted that the hon. Member for Louth also referred to reductions in our amphibious forces. HMS "Hermes" is in future to be deployed primarily in the antisubmarine rôle, reflecting the importance which we, no less than the Opposition, attach to countering the Soviet submarine threat. But she will retain a secondary rôle as a commando ship. The two LPDs will also remain in service for a number of years to come.
We are considering the most appropriate means of transporting the Royal Marines in the longer term. Flexibility in that respect is vital. I think that these measures hardly justify the hon. Member's assertion that the force—is to be emasculated—
Mr. Brotherton rose—
Mr. Judd: I cannot give way as I wish to do justice to the other hon. Members who have spoken in the debate.
The hon. Member for Louth, the hon. and gallant Member for Eye, the hon. Member for Bexleyheath (Mr. Townsend) and the hon. Member for Portsmouth, South asked questions about offshore tapestry. In defining the rôle of the Armed Services in offshore tapestry it is essential to distinguish between threats from external aggression and peace-time threats from malicious or accidental damage. External aggression is the res-

661
ponsibility of NATO, and the maritime planning of the alliance fully takes that into account.
The rôle the Navy plays in its peacetime tasks is a completely different matter. Here the Royal Navy is acting to provide aid to the civil power and assistance of various kinds to the civil authorities. The civil authorities concerned in offshore matters include the Department of Trade, the Fisheries Departments, the Department of Energy and the Department of the Environment.
As the Prime Minister announced on 6th November 1974, the Government are giving the highest priority to the coordination of activity in the North Sea area. The Lord Privy Seal has special responsibility for overall supervision. Arrangements have been made for liaison between Departments, the police, oil companies and the Ministry of Defence, and for Ministers to take control of the more serious incidents. All that machinery is constantly being reviewed with the objective of improving techniques.
I assure the House that there is never any complacency in this sphere. The function of the defence services is the ability to respond dynamically and flexibly to whatever situation may arise. That is why we have earmarked the combined resources of the Royal Navy, Royal Marines and Royal Air Force to make whatever contribution is necessary. Obviously, exercises are an essential feature of testing this responsive capability. The House will be interested to learn that one such valuable exercise has recently been completed. We are analysing the lessons to be learnt from it for the future.
But prevention—as I am sure that hon. Members on both sides of the House will agree—is always better than cure. That precept has led to the creation of what I have described as our "panda car" patrol force in the North Sea. There will be five specially built vessels available for this and other patrol work and four Royal Air Force aircraft are to be adapted to join them. The Minister of State has been into this in some detail in recent months. In the meantime HMS "Jura" and HMS "Reward" are already on patrol. The Royal Navy and the Royal Air Force also regularly send warships and aircraft to the area. I must
662
emphasise again that these measures relate to peace-time tasks. The Armed Services as a whole are there to deal with overall defence from external attacks by a major world Power.
The hon. Member for Bexleyheath, and the hon. Member for Haltemprice, in winding up and the hon. Member for Portsmouth, South asked about less conventional craft. Close interest is taken in the possible advantages of introducing unconventional craft into the future fleet mixes—hovercraft, hydrofoils and fast patrol boats. Our approach in evaluating these craft is to take fully into account the dangers both of complacency and of sticking to tried solutions because they are familiar, and of change for change's sake. The test that we are applying is whether these craft are relevant to our concept of operations in the Eastern Atlantic, the Channel areas and home waters, and whether they can do the job more cost-effectively than existing solutions. Our studies on these lines will take time, and I make no apology for this. It is better to examine the options properly than to take precipitate decisions which may give the Royal Navy the wrong ships and waste money.
The hon. and gallant Member for Eye asked about the justification for maintaining four Royal dockyards. It is true that there will be some reduction in requirements for refitting surface ships and conventional submarines and that this will release some marginal capacity mainly from 1977–78 onwards. However, the proportion of dockyard capacity occupied by nuclear refitting work will be increasing progressively as more nuclear Fleet submarines enter service. Overall, the dockyard's load of warship refitting and repair work will not be greatly reduced. What is certain is that the reduction will not begin to approach the level at which the Royal Navy could do without any of the United Kingdom dockyards. The use of Gibraltar Dockyard will also continue.
It is intended, as I have said, that any spare capacity which should arise will be put to other productive use on defence work or other national priorities.
Mr. Burden rose—
Mr. Judd: I am sorry but I cannot give way.

663
The hon. and learned Member for Colchester raised the question of charges for foreign training in this country. I confirm that the level of charges is regularly reviewed and that adjustments are made as necessary. Much of this training, as he will appreciate, is connected with the sale of defence equipment in which the training forms part of the contractual arrangements.
The hon. Member for Gosport (Mr. Viggers), while talking about personnel matters, suggested a meeting of the Members of Parliament primarily concerned and Ministers to discuss Service housing problems. I am sure that we shall willingly examine this suggestion.
Several hon. Members, including the hon. and gallant Member for Eye, the hon. Member for Tynemouth (Mr. Trotter) and the hon. Member for Harborough (Mr. Farr), have mentioned and asked about the Naval Reserves. I explained to the House this afternoon that the rôle and structure of the Volunteer Naval Reserves had been reviewed. The decisions that we have made about their future have been reached in the light of a stringent search for economies in all areas of the naval Service following the defence review.
The Government value most highly the enthusiasm, unselfishness and professionalism which are associated with the Naval Reserves. Their future rôle will be tailored to what we see as the wartime tasks of the Reserves. In this way we shall combine cost-effectiveness with an important and clearly defined objective for all the men and women involved. We shall move toward greater integration of the Reserves with the Royal Navy as a whole.
The reserves will continue, as I have already said, to have a sea-going rôle primarily in the sphere of mine countermeasures warfare. We are confident that they will rise to the challenge of proving that they can operate the new, more complicated mine countermeasures vessel which they will be allocated in due course. The number of mine countermeasure vessels allocated to the reserves will be reduced by the end of 1976 to six, to be shared between 11 divisions. The overall size of the sea-going Reserves will be reduced to a level appropriate for providing 18 mine countermeasure
664
vessel crews—two crews for each of their own vessels and six crews to back up the main Royal Navy crews, plus a proportion of officers and ratings required to man ships taken up from trade.
The hon. Member for Harrogate and the hon. and learned Member for Colchester asked about offshore tasks for the reserves. The Royal Naval Reserve already provides valuable assistance to the Royal Navy in various offshore tasks; for example, in the surveillance of Soviet warships, traffic separation schemes and patrols, including those of offshore installations. The possibility of increasing the RNR's involvement in offshore tasks is currently and actively being studied. All this will entail reducing the numbers in the sea training centres.
The rôle of the Reserves and the Royal Naval Auxiliary Service in supplementing the war and peace organisation offshore headquarters remains basically unchanged. However, communication training centres which cannot recruit and retrain sufficient numbers will be closed. A number of Royal Naval Auxiliary Service craft—
An Hon. Member: It is a shame.
Mr. Judd: It is a shame in many ways.
A number of Royal naval auxiliary craft will be paid off early and a study has been set in hand with a view to reducing the manning bill for port headquarters.
The admiral commanding Reserves and the reserve forces will come under the command and control of the Commander-in-Chief Naval Home Command by mid-1976. The area flag officers will then assume more responsibility for the Reserves, and in due course it is planned to transfer to the Commander-in-Chief and his staff the functions carried out at present by the Admiral Commanding Reserves.—[Interruption.] I heard an hon. Member of the Opposition, from a sedentary position, say "Disgraceful."
Mr. Farr rose—
Mr. Judd: However, I was most impressed this afternoon by a contribution from an hon. Member, not in a sedentary position, who said that in his Royal Naval Reserve experience what was important was to integrate more closely the

665
work of the Reserves and the work of the mainstructure of the Royal Navy.
Mr. Farr: Will the hon. Gentleman give way?
Mr. Judd: The Royal Marine Reserve will retain its challenging war and peacetime rôle as at present, but its future strength is currently under study.
My hon. Friend the Member for Walsall, South (Mr. George) expressed his disappointment at the progress so far achieved in negotiations aimed at détente. It is true that progress at the MBFR talks has so far been slow, but the atmosphere has been constructive and businesslike, and we remain confident that, given good will on both sides, a successful outcome can be achieved. Nevertheless, the negotiations are complex and likely to be protracted.
We and our allies have made various suggestions designed to meet Warsaw Pact concerns. We believe these offer a basis for progress, and we hope that they will be carefully considered.
On the Conference on Security and Co-operation in Europe, I am happy to say that substantial progress has recently been made in Geneva. The indications are that it will soon be possible to settle all outstanding points at the second stage so that the final stage of the conference can be held soon at summit level.
None of us in the House this evening—or, more importantly perhaps, those who do not come to defence debates and do not interest themselves in defence—should be deluded into thinking that defence is a matter which can best be left to the professionals, the military, the academics or even the specialist politicians. In a changing, open society, the quality of external defence is inevitability
interwoven with the quality of the internal social and political structure. It is therefore, something which directly concerns every one of us in Britain. In my view, therefore, the more public debate that is stimulated on this subject, the better.
Any weakening or compromise in our respect for the basic principles of freedom, justice and democracy, so clearly spelt out as the aim of the North Atlantic Treaty, any unjustifiable marriage of convenience anywhere in the world conveniently sweeping these principles under the carpet, will in the end militate against the effectiveness of widespread public understanding of our defence objectives.
In brief, we constantly have to ask ourselves whether or not we still stand by the purposes of the North Atlantic Treaty itself, so clearly spelt out, without prevarication, in the preamble to the articles of that treaty. I should like to quote from the treaty. As I do so, let us remember the conditions in which the treaty was formed. It was signed, I am proud to say, largely by a Labour Government deeply committed to defending what they believed was valid in Western society:
"The Parties of this Treaty reaffirm their faith in the purposes and principles of the Charter of the United Nations and their desire to live in peace with all peoples and all governments. They are determined to safeguard the freedom, common heritage and civilisation of their peoples, founded on the principles of democracy, individual liberty and the rule of law."
It is, in the end, by the degree to which we stand by those principles that the effectiveness of the alliance will stand or fall in the long run.
Question put, That this House do now adjourn:—
The House divided: Ayes 117, Noes 165.

Division No. 281.]

AYES

[10.00 p.m.

Arnold, Tom

Clegg, Walter

Goodhew, Victor

Atkins, Rt Hon H. (Spelthorne)

Cockcroft, John

Gow, Ian (Eastbourne)

Awdry, Daniel

Cope, John

Gower, Sir Raymond (Barry)

Banks, Robert

Cordle, John H.

Gray, Hamish

Benyon,W.

Costain, A. P.

Grist, Ian

Biggs-Davison, John

Crowder, F. P.

Hamilton, Michael (Salisbury)

Boscawen, Hon Robert

Dean, Paul (N Somerset)

Hampson, Dr Keith

Bottomley, Peter

Dodsworth, Geoffrey

Hannam, John

Brotherton, Michael

Emery, Peter

Harrison, Col Sir Harwood (Eye)

Brown, Sir Edward (Bath)

Fairgrieve, Russell

Harvie Anderson, Rt Hon Miss

Buck, Antony

Farr, John

Havers, Sir Michael

Budgen, Nick

Fisher, Sir Nigel

Hawkins, Paul

Carlisle, Mark

Fletcher-Cooke, Charles

Heseltine, Michael

Chalker, Mrs Lynda

Fookes, Miss Janet

Higgins, Terence L.

Clark, Alan (Plymouth, Sutton)

Gilmour, Sir John (East Fife)

Holland, Philip

Clarke, Kenneth (Rushcliffe)

Goodhart, Philip

Howe, Rt Hon Sir Geoffrey

Hurd, Douglas

Moate, Roger

Sinclair, Sir George

Hutchison, Michael Clark

Monro, Hector

Skeet, T. H. H.

Irvine, Bryant Godman (Rye)

Montgomery, Fergus

Sproat, Iain

James, David

Morgan, Geraint

Stainton, Keith

Knight, Mrs Jill

Morgan-Giles, Rear-Admiral

Stanbrook, Ivor

Knox, David

Morris, Michael (Northampton S)

Stanley, John

Lane, David

Morrison, Hon Peter (Chester)

Stewart, Ian (Hitchin)

Langford-Holt, Sir John

Newton, Tony

Stradling Thomas, J.

Latham, Michael (Melton)

Page, Rt Hon R. Graham (Crosby)

Tapsell, Peter

Lawrence, Ivan

Parkinson, Cecil

Taylor, Teddy (Cathcart)

Lawson, Nigel

Pattie, Geoffrey

Temple-Morris, Peter

Lester, Jim (Beeston)

Pink, R. Bonner

Thomas, Rt Hon P. (Hendon S)

McAdden, Sir Stephen

Prior, Rt Hon James

Townsend, Cyril D.

McCrindle, Robert

Rathbone, Tim

Trotter, Neville

Macmillan, Rt Hon M. (Farnham)

Rees-Davies, W. R.

Viggers, Peter

McNair-Wilson, M. (Newbury)

Renton, Tim (Mid-Sussex)

Wall, Patrick

Madel, David

Ridsdale, Julian

Wiggin, Jerry

Marten, Neil

Roberts, Michael (Cardiff NW)

Winterton, Nicholas

Mates, Michael

Roberts, Wyn (Conway)

Young, Sir G. (Ealing, Acton)

Mather, Carol

Rodgers, Sir John (Sevenoaks)

Younger, Hon George

Maudling, Rt Hon Reginald

Rossi, Hugh (Hornsey)

Maxwell-Hyslop, Robin

Shaw, Giles (Pudsey)

TELLERS FOR THE AYES:

Meyer, Sir Anthony

Shepherd, Colin

Mr. Spencer Le Marchant and

Miscampbell, Norman

Silvester, Fred

Mr. Richard Luce.

Mitchell, David (Basingstoke)

Sims, Roger

NOES

Allaun, Frank

George, Bruce

Noble, Mike

Archer, Peter

Gould, Bryan

Oakes, Gordon

Armstrong, Ernest

Grant, George (Morpeth)

Ogden, Eric

Atkins, Ronald (Preston N)

Grant, John (Islington C)

O'Malley, Rt Hon Brian

Atkinson, Norman

Grocott, Bruce

Orme, Rt Hon Stanley

Barnett, Rt Hon Joel (Heywood)

Hardy, Peter

Ovenden, John

Bates, Alf

Harrison, Walter (Wakefield)

Pardoe, John

Bean, R. E.

Hatton, Frank

Park, George

Beith, A. J.

Hayman, Mrs Helene

Parker, John

Blenkinsop, Arthur

Heffer, Eric S.

Pavitt, Laurie

Boardman, H.

Hooley, Frank

Peart, Rt Hon Fred

Booth, Albert

Hooson, Emlyn

Pendry, Tom

Brown, Hugh D. (Provan)

Howells, Geraint (Cardigan)

Penhaligon, David

Brown, Robert C. (Newcastle W)

Huckfield, Les

Phipps, Dr Colin

Buchanan, Richard

Hughes, Robert (Aberdeen N)

Prentice, Rt Hon Reg

Butler, Mrs Joyce (Wood Green)

Irvine, Rt Hon Sir A. (Edge Hill)

Price, C. (Lewisham W)

Callaghan, Jim (Middleton & P)

Jackson, Miss Margaret (Lincoln)

Richardson, Miss Jo

Campbell, Ian

Janner, Greville

Rodgers, George (Chorley)

Cartwright, John

Jay, Rt Hon Douglas

Rodgers, William (Stockton)

Clemitson, Ivor

Johnson, James (Hull West)

Rooker, J. W.

Cocks, Michael (Bristol S)

Johnson, Walter (Derby S)

Roper, John

Cohen, Stanley

Jones, Alec (Rhondda)

Ross, Stephen (Isle of Wight)

Coleman, Donald

Jones, Dan (Burnley)

Sandelson, Neville

Conlan, Bernard

Judd, Frank

Sedgemore, Brian

Cook, Robin F. (Edin C)

Kaufman, Gerald

Selby, Harry

Corbett, Robin

Kerr, Russell

Shaw, Arnold (Ilford South)

Cox, Thomas (Tooting)

Kilroy-Silk, Robert

Sillars, James

Crawshaw, Richard

Leadbitter, Ted

Silverman, Julius

Cryer, Bob

Lee, John

Skinner, Dennis

Davis, Clinton (Hackney C)

Lestor, Miss Joan (Eton & Slough)

Small, William

Deakins, Eric

Lewis, Ron (Carlisle)

Smith, Cyril (Rochdale)

Dean, Joseph (Leeds West)

Lipton, Marcus

Smith, John (N Lanarkshire)

Delargy, Hugh

Mabon, Dr J. Dickson

Snape, Peter

Dell, Rt Hon Edmund

McElhone, Frank

Spearing, Nigel

Doig, Peter

MacFarquhar, Roderick

Spriggs, Leslie

Dormand, J. D.

Mackintosh, John P.

Stallard, A. W.

Douglas-Mann, Bruce

McMillan, Tom (Glasgow C)

Stoddart, David

Duffy, A. E. P.

McNamara, Kevin

Stott, Roger

Edge, Geoff

Madden, Max

Taylor, Mrs Ann (Bolton W)

Ellis, John (Brigg & Scun)

Marks, Kenneth

Thomas, Ron (Bristol NW)

Evans, Gwynfor (Carmarthen)

Marshall, Dr Edmund (Goole)

Thorne, Stan (Preston South)

Evans, Ioan (Aberdare)

Marshall, Jim (Leicester S)

Tierney, Sydney

Ewing, Harry (Stirling)

Mason, Rt Hon Roy

Torney, Tom

Faulds, Andrew

Maynard, Miss Joan

Tuck, Raphael

Fernyhough, Rt Hon E.

Mendelson, John

Varley, Rt Hon Eric G.

Flannery, Martin

Mikardo, Ian

Wainwright, Edwin (Dearne V)

Fletcher, Raymond (Ilkeston)

Millan, Bruce

Wainwright, Richard (Colne V)

Fletcher, Ted (Darlington)

Miller, Dr M. S. (E Kilbride)

Walden, Brian (B'ham, L'dyw'd)

Foot, Rt Hon Michael

Molloy, William

Walker, Harold (Doncaster)

Fowler, Gerald (The Wrekin)

Moon man, Eric

Walker, Terry (Kingswood)

Garrett, W. E. (Wallsend)

Newens, Stanley

Ward, Michael

668

669

Watkins, David

Williams, Alan (Swansea W)

Young, David (Bolton E)

Watkinson, John

Wilson, William (Coventry SE)

Wellbeloved, James

Wise, Mrs Audrey

TELLERS FOR THE NOES

White, Frank R. (Bury)

Woof, Robert

Mr. James Hamilton and

White, James (Pollok)

Wrigglesworth, Ian

Mr. Joseph Harper.

Whitehead, Phillip

Question accordingly negatived.

ALFRED HERBERT LIMITED
10.10 p.m.
The Secretary of State for Industry (Mr. Eric G. Varley): I beg to move,
That this House authorises the Secretary of State to pay or undertake to pay sums by way of financial assistance under section 8 of the Industry Act 1972 in respect of a guarantee or guarantees to be given to the bankers of Alfred Herbert Limited covering borrowing facilities made available by the bankers to that company, insofar as the amount paid or undertaken to be paid under the guarantee or guarantees is in excess of £5 million but does not exceed £15 million
The House will recall that on 29th October 1974 my predecessor announced the Government's intention to give guarantees for an increase in the company's overdraft to enable it to carry on business while proposals for its long-term future were worked out. These guarantees have been give under Section 8 of the Industry Act 1972 and amount at present to £5 million.
I was able earlier today to outline the broad shape of the long-term arrangements envisaged by the Government to secure the company's future in my reply to the Question by my hon. Friend the Member for Coventry, North-East (Mr. Park). It will, however, take some months to negotiate the details and put the arrangements into effect, and meanwhile the company needs further working capital to enable it to continue business.
I am therefore inviting the House, in accordance with Section 8(8) of the Industry Act 1972, to authorise me to increasing the guarantees of borrowing by the company as necessary beyond £5 million up to a total figure of £15 million.
The House will not need reminding that Alfred Herbert is one of the largest United Kingdom machine tool manufacturers and one of the largest in Europe. It is one of the industry's biggest exporters, and employs about 6,000 people. It is not confined to the machine tool industry. It is a substantial manufacturer of small tools and instruments. Indeed, its business is wide-ranging in another sense. While Alfred Herbert is inevitably associated with Coventry and the West Midlands, its nine manufacturing plants range from Rotherham
672
in the North to Falmouth in the South-West.
These considerations were very much in our minds when we intervened to keep the company in business last October. They are no less relevant today.
The health and strength of our engineering industry, which is so important to our export performance, is vitally dependent on an efficient home machine tool industry. In helping to put Alfred Herbert on the way to a profitable future we shall be demonstrating the importance we attach to machine tool manufacture as a fundamental part of our engineering industry. We shall also be expressing confidence in the company's potential for the future.
Since the House was informed of the Government's decision that this company should be kept going, a thorough examination has been undertaken of its problems and prospects, with the help of consultants appointed for the purpose and through a tripartite consultative committee. The executive directors of the company, representatives of the employees from each of the nine sites and officials of my Department served on this.
I have now considered the consultants' recommendations and the proposals of the consultative committee. These have been taken very fully into account by the Government in reaching their decision. It has become clear that the company has suffered from a long period of financial stringency which has seriously inhibited its ability to maintain and modernise its own equipment and to develop new designs and products. Its difficulties have been compounded by its high overheads, its heavy burden of short-term debt and its inability to generate an adequate cash flow.
The Government have, therefore, concluded that Alfred Herbert's continuance will require a radical reconstruction of its capital and the injection of up to £25 million of public money under the Industry Act, primarily in the form of equity under the provisions of the Industry Bill which has recently had its Third Reading in the House. The Government's equity will in due course be vested in the National Enterprise Board when it is set up under the prospective new legislation.

673
In the meantime, it is of the utmost importance that the company, under its recently appointed acting Chairman, Mr. John Buckley, should apply itself, as I am sure it will, to the urgent task of strengthening its management organisation. It also needs to work out a long-term strategy for the future, with the help that it will be able to derive from the reports and recommendations received from the consultants and from the management and employees themselves.
I am sure that Mr. Buckley and his colleagues will share my determination that this company, which has a potentiality for success in the future, should set as its goal the restoration of its profitability as quickly as possible, so that it can once again prosper and find a place among the successes of this essential industry which supplies so much of the basic tools of production of British and world industry.
It would be wrong for me to lay down the particular policies that the company should pursue. There will be difficult decisions for the company to take. I am confident that it will apply itself to its many problems with the determination to set the company on the road to a prosperous future.
This will call for a very high degree of dedication from all who work in the company and for the utmost co-operation at all levels. I am greatly encouraged by the processes of discussion, of exchanges of information and consultation, which have been developed so far in the past months. These are testimony to the great good will which already exists in the company. I hope that they will be built on in the even more difficult times ahead.
It is, I am sure, essential that the decisions that have to be taken will have the ready and willing assistance of all concerned and that everyone in the company will accept the responsibility of working for the company's future. In the present situation the Industrial Development Advisory Board attached particular importance to the need for the ablest management which at the same time will be free to respond to market and commercial demands. The board considered that the consultations and the understanding reached with the work force had established a welcome recogni-
674
tion of the major steps that would have to be taken.
I have accordingly informed Mr. Buckley that, while the Government may provide the financial resources that they think are needed for the company to revive, it is for the company itself—and that means everyone from management to shop floor—to ensure that these resources are put to effective use.
Mr. John Stanley: Will the right hon. Gentleman confirm that the view of the Industrial Development Advisory Board was that the company should go into receivership?
Mr. Varley: Yes, I can confirm that. The hon. Gentleman will know that he put a Question to my right hon. Friend the Secretary of State for Energy on 30th January, when my right hon. Friend confirmed that. But the Government did not take that view. That was made plain at the time.
Alfred Herbert has much ground to make up. It will have difficult decisions to take and changes to make if it is to prosper in the tough world of international competition. Only good management and a committed work force can do this.
My Department and, when it is established, the National Enterprise Board will be concerned to see that resources put into the company are efficiently employed. The additional interim assistance which I am proposing tonight will enable Alfred Herbert to continue while the financial reconstruction is being negotiated and implemented. I invite the House to approve the motion.
10.20 p.m.
Mr. Michael Heseltine: It would be difficult to say to the right hon. Member anything other than that in his speech he has made about as inadequate a case for the expenditure of the sums of money that we are asked to approve tonight as I have ever heard. It would not be difficult to make that speech about virtually any company, no matter how inadequate its management, no matter how bad its industrial relations, no matter how totally unsaleable its products. It could have been made in defence of any expenditure in almost any conceivable circumstances.

675
After hearing what the Secretary of State has said about spending £25 million, I must say that there is a growing anxiety in this country about the total inability of the Government to understand that every time they seek to expend sums of this sort, for the kind of reason the Minister has given us tonight, in a totally inadequate way, the credibility of the Government is a little further damaged.
It can be no coincidence that on this particular evening we should just have heard that the Post Office has lost £300 million, which the Department sponsoring it did not know about until a matter of weeks ago. The one question about which we can generalise is that the ability of Governments to monitor and oversee industry in this country is totally inadequate.
The lack of any factual backing for the assertions of the Secretary of State for Industry in what he has said will have provoked the greatest doubts and anxieties on the part of almost all those who have listened to him.
Perhaps I can indicate to the House why I believe that the right hon. Gentleman's speech is inadequate, not just for what he said but for the things he did not say. First, I want to make it quite clear that this is a company that in the most material ways has failed, and the responsibility for that must lie very substantially upon the management. A very substantial responsibilty for allowing the position to deteriorate must lie upon the owners and the shareholders of that company, who did so little over so long a period of time to intervene and to act as shareholders should have done in their best interests.
Let us be quite clear that there is no joy for anyone in the failure of Albert Herbert. It was a great British company, and it has gone into a sad decline. The question the House is asked to consider tonight is whether, on that track record in the markets in which it operates, and with the management and the work force it has, it is likely to have within itself the basis upon which to become the profitable company about which the Minister has spoken.
I believe that we are entitled to ask two questions about the case the right hon.
676
Gentleman has put forward. First, what is the underlying nature of the investment opportunity that he is putting to this House? Is there any real reason to suppose that this company, in its own pattern of trading, has within itself the ability to turn from the losses which are its recent record to the profitability which he envisages at some unspecified period in the future?
The second question is whether, assuming that the Minister is to spend £25 million in support of industry, he is right to spend it on this company, as opposed to supporting other more successful companies which may not even be in the machine tool industry. He made no attempt to indicate whether the Government have made a careful decision about the best way to invest £25 million. Is it best to invest it in Alfred Herbert, or elsewhere in the machine tool industry, or in some other direction? Those are the two fundamental questions which the Minister should answer.
Is there, then, any justification in investing this money specifically in Alfred Herbert?
There are four areas in which the Minister has access to information which would enable him to make a judgment and to put before the House the basis upon which that judgment was made. First, he has the accountants' report. Secondly, he has the recommendations of the tripartite discussions. Thirdly, he has the views of the Industrial Development Advisory Board. Fourthly, he has the views of the management of the company itself.
The reality is that the right hon. Gentleman did not seek in anything that he said to give any indication of what any of those four methods of trying to reach a judgment was. There was no indication in his speech of how profitability was to be achieved, whether there would be any return on the investment committed to the company, or whether the company's products were likely to be more successful in the future than they had been in the past. He gave no indication whether any of these matters had been decided upon for any reason, one way or the other.
I should find it interesting to know how it is that I can read in a national newspaper detailed quotations from the accountants' report. I cite as an example

677
Victor Keegan's article in The Guardian giving chapter and verse of the report's contents. This House, which has to give the money, is given no insight into the contents of the report and the basis on which the Minister has made his judgment.
I have no idea what the tripartite recommendations of the trade unions, the management and the civil servants were. No indication has been given to this House. However, because one of my hon. Friends happened to ask the right question earlier today, we know that the IDAB recommended against the proposals but that the Secretary of State apparently was more concerned to choose the one favourable quotation from the IDAB report than with informing the House that the conclusion of the report was that the money should not be forthcoming in the way that the Government proposed.
The fourth area which intrigues me most is the Minister's own judgment, because he said that the company would determine the strategy whereby it earned profits. I welcome that. It is in conflict with what the Government did in the case of British Leyland, where the Ryder team determined the strategy and laid it down for the management to follow, which was a crazy way to go about anything of this kind. It is far better to say to a management "You will have to carry out the strategy, so you had better devise it and put your conviction behind it."
However, if I were investing my own money, I should prefer to see the strategy before committing the money. It is clear from the question answered earlier today that the company has not yet produced the strategy and, therefore, that the management could not yet know, and has not been able to satisfy the Minister, how profits are to be forthcoming. I say that not one penny of my money would go to backing a management which had not worked out its strategy to bring the company to profitability. However, the Minister has said clearly that for the future the company will be expected to work out such a strategy.
If I praise the rectitude of the Minister's judgment in recognising that it is the management which has to make this judgment and that it is its responsibility, the one question which follows from that
678
concerns the amount of equity that the Government intend to take. The Secretary of State did not explain this to us. We have heard figures of the order of £25 million. I have no idea whether the right hon. Gentleman intends to take 5 per cent. or 95 per cent. of the equity. But, if there is to be a substantial element of equity in the Government's hands, the concept which the right hon. Gentleman advanced at Question Time suggesting that it would be for the company determine and carry out the strategy at least asks us to accept that there is to be a break with tradition of a kind that I find totally unbelievable. It is that a largely nationalised company will be given the freedom to determine its own strategy.
There has never been such a position in a case where the Government owned a significant shareholding. There is no precedent for civil servants not being in such close proximity to the workings of the company that every significant decision taken has to be cleared with Ministers before it is taken.
I do not believe that the management of the company will be given the freedom which the Secretary of State says that he intends that it should have. I believe we shall find that £25 million will have been poured into this company but without the dramatic steps necessary to move towards a more viable basis having been taken. The company will be perpetuated in a framework that is more comfortable for it to operate in at the moment. Pressure for change will be diminished by the Government's action today, particularly because there is no clear agreement on what the nature of the change should be.
The House should consider where this £25 million might have been better used. Could it have been better used in machine tool companies that are profitable and viable or sections of Alfred Herbert that could have been profitable and viable if they had not been held back within an unprofitable company?
We must look at what has happened to resources deployed out of Alfred Herbert in the past four years. Between 3,000 and 4,000 people who worked for the firm in 1971 no longer work for it. Eight factories that were in the group in 1971 have been sold. It is not possible to make a meaningful judgment of

679
whether the company's existing operations ought to be perpetuated unless one considers what has happened to those people and factories since 1971. If, far from being subsidised by the taxpayer, the people are in profitable and viable jobs in the West Midlands and the rest of the country where the company formerly traded, the Secretary of State has misled the people who are to continue working for the company. It would have been better for him to tell them to look at their colleagues who had left and sought profitable, well-paid and more secure jobs elsewhere. It might have been better to concentrate this £25 million on helping profitable companies to take over some of Alfred Herbert's present factories where the company is not capable of making a success.
These questions have not been answered because, politically, they are unanswerable. They are based on the assumption that the status quo will not be perpetuated and that people will be asked to make decisions based on what the real world is all about—that, unless we can sell our products, we shall have to continue the degree of subsidy inherent in present industry at considerable cost to people whose taxes have to finance it.
Mr. Leslie Huckfield: Is the hon. Gentleman saying that we should use the National Enterprise Board to take over profitable companies?
Mr. Heseltine: If the hon. Gentleman thinks I said that, then, to make it quite clear, I will tell him that I did not say that. I did not mean that, and I do not think that would be a good idea. This debate is much more significant than trying to see whether a particular sentence or phrase can be interpreted in a way I would never have dreamt of meaning it. It is a waste of time to get involved in a semantic discussion of this sort.
The real question we should face is whether this money could give a greater sense of security and return to the country if we redeployed the assets and work force of Alfred Herbert rather than perpetuated them in the existing framework which is economically unjustifiable.
So we end up, as is increasingly the case with decisions by the Government on industrial policy, with the worst of
680
all possible worlds. No plans have been put before the House for bringing the company into profitability. That is not to say that plans do not exist, but the House has no knowledge of any such plans and is, therefore, entitled to assume that there is none.
We do not know whether the Government intend to monitor the flow of funds to the company. Whereas in the Ryder report on British Leyland there were very clear guidelines for an insistence on modernisation and redeployment before funds would be allowed to continue to flow, there are no such safeguards in the proposals now before us. Although the £25 million is going to this company, there is no attempt at determining whether the money would be better going to other companies inside or outside the machine tool industry.
Once again the Government have failed to read the message which has faced the company since the IRC intervened in 1968. There are no grounds for assuming that profits will flow from what the Government are seeking to do. The one certainty is that a very large sum of scarce resources has been committed to what will be seen as a political solution, not an industrial solution, of Alfred Herbert's problems.
10.33 p.m.
Mr. George Park: Unlike the speech by the hon. Member for Henley (Mr. Heseltine), my right hon. Friend's statement will be widely welcomed not only in my constituency but throughout Coventry. The hon. Member for Henley posed plenty of questions but provided no answers, except to advise the people employed in this company to get out of it as fast as possible. No doubt they will take note of what he said. It is worth bearing in mind that unemployment in the city is now close to the national average and is a matter of very great concern.
In proposing these guarantees, can the Minister say to what extent they take account of past debts incurred by the company and its future restructuring. Which of the options set out in the report submitted by the consultants, management and the trade unions are to he taken up. I have in mind particularly the proposal to close the Red Lane works in Coventry. This is the only works where

681
roll grinders are manufactured in this country for the British Steel Corporation, and if the works were to close the BSC would presumably have to import this equipment.
Do the Government intend to take a majority share in the company in order to ensure accountability for the guarantee money and, possibly, future longer-term finance? What provisions are to he made for the work force, through its elected representatives, to take part in the company's future decision making?
The difficulties at the company are a reflection of the difficulties of the whole machine tool trade. In Coventry companies like A. C. Wickman are considering a three-day working week and others are building for stock. This arises from the fact that in the last five-year cycle in this trade there were two and a half years down and only 18 months up on the sales curve. In this situation it is vital that as much as possible of the retooling order for British Leyland is placed with the British machine tool trade. Ensuring that this happens might be a suitable exercise for the little "Neddy" on machine tools, or, if that were not considered suitable, perhaps a Standing Committee could be set up for this purpose, to monitor and give advance notice of machine tools required.
The company having been assisted by guarantees or by the influencing of orders, there still remains the problem, even at a time of rising unemployment, of a shortage of skilled labour. The Chancellor of the Exchequer recognised that in his Budget by allocating more money for training, but that is an area which would repay further examination.
I realise that some of these matters do not come within the responsibility of my right hon. Friend, but they are all part of the effort needed to secure a resurgence in British industry, which must start in the machine tool trade.
10.41 p.m.
Mr. Ian Stewart: I welcome the opportunity to make a brief contribution to the debate because a company called Herbert Controls and Instruments operates from Letchworth in my constituency. It has a work force of about 300 and manufactures ancillary gauging equipment for the machine tool and related industries. The company's imme-
682
diate future depends largely on the orders which will come in within the next six months or year. To some extent it is well placed because more than 60 per cent. of its output is sold abroad.
The company, which is admittedly only one part of the Herbert Group, has the will, the capacity and the potential to survive. It has excellent industrial relations, which have been, perhaps, paradoxically, improved by the difficulties of the last nine months. Everyone who works there, whether in management or in the work force, is fully aware that there can be no viability over any acceptable time scale for a company such as this without profits. Therefore, I very much welcome the statement made by the Secretary of State that the aim will be to ensure a profitable future.
The difficulty which I, the hon. Member for Coventry, North (Mr. Park) and others have is that on the basis of what we have been told this evening there is inadequate information for us to make a judgment on the provision of funds of this magnitude to a specific company. The problems of Alfred Herbert over the last 10 years are typical of the problems of the machine tool industry, and in a wider sense they are typical of the problems of British industry as a whole.
The country has suffered from an excessive preoccupation with the preservation of jobs in the near term, and with that goes the support of declining industries beyond their natural life. That has meant expansion without adequate profitability, which has led to chronic under-investment in the activities of this company, in which there are greater opportunities for a profitable future.
If, as the Secretary of State says, the company is to concentrate in future on profitable activities, there remains the question of the structure, and after 45 minutes' discussion we are little wiser how that will be achieved. As my hon. Friend the Member for Henley (Mr. Heseltine) so forcefully said, there is no adequate basis on which we can make decisions on investment or on other forms of assistance on this scale. If there is to be, as promised, a radical reconstruction of the company's capital, we should also be told about the radical reconstruction of the company's activities which must accompany it. The House is

683
put in an impossible position to take far-reaching decisions if it does not have adequate information on which to base them. In the long-run there can be no benefit to the work force, no incentives to management, no returns for shareholders, who are now to include the taxpayers through the National Enterprise Board, no returns in the longer and wider sense to the community as a whole, and no solution to the problems of employment and the on-going future of British industry unless these matters are properly settled.
I believe that it is a wholly inadequate procedure for us to debate orders of this kind with so little notice of what the Government's intentions are. Very little information is given to us on the Order Paper, although it has been supplemented by a Written Answer which appeared only this afternoon. Is this an adequate basis for proper parliamentary discussion of matters of such far-reaching importance and concern?
10.46 p.m.
Mr. W. E. Garrett: First, I should like to congratulate the Minister on his opening remarks in which he emphasised the importance of the machine tool industry to this nation. Secondly, I should declare an interest, and when the register of Members' interests is published within the near future, hon. Members will see what it is.
I am troubled by the abysmal ignorance of the hon. Member for Henley (Mr. Heseltine) on the machine tool industry. I know that he is concerned with many problems and that he cannot be an expert on everything. Has he ever visited the major works of Alfred Herbet, and has he ever discussed with the senior members of the present Alfred Herbert management the nature of the problem facing that company? Had he done so, on balance he and the hon. Member for Hitchin (Mr. Stewart) would not be so obsessed with immediate profitability. There are other problems that the associated with this company apart from mere profitability at this stage.
Therefore, on reflection it is important to look at the strategic importance of this industry. This has been considerably overlooked by successive Governments. I am not being critical of this
684
Government or of previous Governments of any colour. However, had it not been for the determined efforts by those in the machine tool industry, we should not have been as prepared as we were towards the latter stages of the 1914–18 war and we should certainly never have made up the leeway in the 1939–45 war.
The curse of Alfred Herbert was the fact that the man who virtually owned the company held office for a long time—for far too long. As a result, some of the more enterprising members of that vast organisation moved—very success fully—into other machine tool companies within the United Kingdom. This was not only in their interests but in the interests of the machine tool industry and the nation. They have helped those companies and have done very well themselves.
We should also recognise the importance of giving some hope and recognition—and, certainly, there should be some direct vocal acknowledgment by Conservative Members—to the efforts that these men will make to rescue this company from a bad management policy that has lasted for many years. Those hon. Members who know anything about the management of the industry should learn some lessons from the troubles that started at Alfred Herbert.
A great deal has been said about the British Leyland project. My hon. Friend the Member for Coventry, North-East (Mr. Park) will recognise that we cannot re-equip British Leyland unless, first, we give the incentive to re-equip British machine tool industry. Therefore, we must adopt an expansionist mood, not merely towards Alfred Herbert. We should financially expand other companies which are not only profitable but could be infinitely more profitable. This would help not only our home market but help us to fight against intense competition from West Germany, which is a highly industrialised nation, and certainly America, which is another highly industrialised nation.
Many lessons can be learned from this short debate. The first is how we can encourage this industry, help the skilled craftsmen who are working in it, and encourage the junior echelons of management to recognise their work and the chief executives to increase the exports of this

685
vital industry. When the economy starts to improve, the first sign will be orders for machine tools. When orders for machine tools increase, everyone can feel happier about the future of this nation.
10.51 p.m.
Mr. John Stanley: I must add to what was said about the wholly unsatisfactory way in which hon. Members on both sides of the House were able to prepare for this debate. It must have been evident that if there was to be a reasoned and informed debate on this important matter involving considerable public expenditure, hon. Members should have had at least summaries of the Peat Marwick report, which went to the Government, and the joint recommendations of the management and employees in Alfred Herbert.
I regret that the Secretary of State neither before this debate nor when introducing it gave us any indication of the recommendations in those two important documents. In addition, back-bench Members' only means of knowing that an extremely important Written Answer was given this afternoon was by means of what appeared on the tape at about 4.30 p.m. If we had not seen the tape we would not have known of the important statement made by the Financial Secretary about this company, which related to this order.
Mr. Heseltine: This is an important point. I must make it clear that Front Bench Members were in no more privileged position than back-bench Members.
Mr. Stanley: I hoped that the Opposition Front Bench spokesman had at least been given a copy of the Written Answer.
I do not believe that the Secretary of State, in opening, drew out the real implications of the Government's proposals regarding Alfred Herbert. I shall make two points arising from the financial position of the company and from what the Secretary of State said.
First, hon. Members on both sides of the House with constituency interests—I do not include myself in that category—will wish to be aware of the financial position. The overwhelming proportion of the £25 million envisaged for this company will not contribute to providing greater job security for those working at Alfred Herbert. The overwhelming proportion
686
will go towards reducing the bank overdrafts and indebtedness of the company. Second, there seems to be no prospect in the foreseeable future of providing any return on the £25 million of taxpayers' funds which will be used.
Alfred Herbert has substantial indebtedness. We can see that from the last published annual accounts of the company and what has occurred since. There is a company debenture of £2·4 million. There is an FCI loan of £6 million, all of which has to be repaid over the next two to five years in four annual tranches. There was a bank overdraft on 31st October 1974 of £7·9 million. Since October of last year a further £5 million of public guarantees of overdraft finance have been offered in addition. Tonight we are being asked to approve an order which provides a further public guarantee to another £10 million of bank overdraft finance.
When the full expenditure as envisaged by the motion has been incurred, Alfred Herbert will have total debts of £31·3 million. How much debt can Alfred Herbert carry? We know that a company can normally expect to carry a ratio of debt to equity of about 1:1·50. Alfred Herbert has very little in the way of equity funds. Its equity funds in October last year were £17·5 million. We were told this afternoon in the Secretary of State's Written Answer that the amount of equity in the company's balance sheet will be written down. The normal practice would be to write this down by the amount of loss which, as the directors of the company have already made public, in the current financial year will be a further £4 million. So there will be a write-down of shareholders' funds which must bring shareholders' funds down to about £11 million or £12 million.
That being the case, it must be evident that £20 million-plus of the £25 million will actually be used to repay the indebtedness which has been assumed by the company.
The Secretary of State said today that of the balance of funds that will remain after the indebtedness had been paid off, some had to be provided for working capital. I am sure that that is correct. That being so, it is self-evident, it would appear, that there can be very little left

687
over for genuine capital investment in Alfred Herbert, which is the only thing that will secure the long-term employment and security of those employed there.
I do not believe that it is those who have a constituency interest who should be particularly happy about this solution. The people who should be happy tonight are the creditors of Alfred Herbert, who are the bankers. They are the people who will really benefit from the announcement made today.
I turn to my second point. I do not believe that there will be any significant return on this £25 million of taxpayers' money that is to be put in. To get a return by way of dividend on these funds would require a dividend payment of about £1½, million a year. The House should consider whether that is at all probable from a company which has made a loss in each and every one of the last five years and whose total losses over the last five years will now, in aggregate, by October of this year, have amounted to £18 million. Indeed, as we believe from the Peat Marwick report, none of the options which Peat Marwick could foresee for the company envisages any profit until 1977 at the very earliest.
Therefore, I believe that to all intents and purposes, from what the Secretary of State has said tonight, the £25 million of taxpayers' money that is to be made available will be made available effectively on a grant basis, because there is no possibility of any return on it.
We have to return to the question which my hon. Friend the Member for Henley (Mr. Heseltine) rightly posed—whether this is the best way of using £25 million, even if it is thought right to use it in this particular industry. I return to the Answer which the Secretary of State's predecessor, now the Secretary of State for Energy, gave me on 30th January, when I asked him what was the difference of view between the IDAB and the Government as to how Alfred Herbert should be handled. The then Secretary of State said,
"The board and I recognised that the business should be placed on a sound and continuing basis."
Therefore, there was no difference of objective between the Government and
688
the IDAB. The right hon. Gentleman went on to say,
"The board recommended that this was best achieved through allowing the company to go into receivership. I took the view that this was not the best course."—[Official Report, 30th January 1975; Vol. 885, c. 319.]
It was the IDAB's view that receivership was the best way of putting the business on "a sound and continuing basis"—to use the phraseology of the Answer.
Mr. Bob Cryer: I have been following the hon. Gentleman's argument. He has been very critical, but he does not pose any solutions. Does he feel that Alfred Herbert should go into liquidation or receivership with the loss of the 7,000 jobs, or does he feel that more money should be made available for complete State ownership?
Mr. Stanley: If the hon. Gentleman's right hon. Friend would publish the Peat Marwick report and the proposals put to him by the management and employees, there would be an opportunity for all hon. Members to form a view on that matter. All that I and my colleagues can rest on is the IDAB report. Of course, the board is composed of a number of people who have enormous experience between them. I would have thought that a recommendation from the IDAB would carry considerable weight.
If it is right to use public funds in this industry surely we should consider how best they can be used. In Germany, for example, in the early part of this year, Government funds were provided for soft loan finance for counter-cyclical purchases by German industry of German manufactured machine tools. That is a far more rational use of public funds. If public funds are to be used, they should be used in a way that will allow the profitable parts of industry to grow and expand.
The way in which the Government are proceeding is to use taxpayers' money in the most wasteful way, and basically to pay off creditors. I do not believe that there is any possibility of the £25 million representing the ceiling of the commitment. The way in which funds are being used will not ensure the longterm security and prosperity of the employees of the company.
11.2 p.m.
Mr. Leslie Huckfield: I say one thing for the hon. Member for Tonbridge and Mailing (Mr. Stanley): he does his homework unlike some of his hon. Friends. However, he does his homework only on the economic and financial sectors. He never does his homework on some of the human and social problems that are involved. Ever since I heard the hon. Gentleman first making speeches on issues of this sort I do not think I have heard him mention jobs or employees once.
Mr. Stanley: Will the hon. Gentleman tell the House how people can be given secure jobs except by being paid out of genuine profits?
Mr. Huckfield: I thought that was the purpose of the motion before the House.
I welcome the motion that my right hon. Friend has introduced because I represent many constituents in Nuneaton and Bedworth who work at Alfred Herbert's various plants in Coventry. I am grateful for what my right hon. Friend has said, because in representing Bedworth I represent an area which is fast approaching the highest unemployment percentage in the whole of the West Midlands. I recognise the contribution which my right hon. Friend's guarantee will make towards the furtherance of Alfred Herbert's future efforts.
I am glad that we have an opportunity of discussing this matter. With reference to the hon. Member for Henley (Mr. Heseltine), and given the kind of pronouncements that he has been making. Since the Government have been in power, it is clear that by now there would be no car industry, no motor cycle industry and, by the sound of things, no machine tool industry either. Every application for industrial support that we have adopted since we have been in office the hon. Gentleman has opposed. Let the hon. Gentleman remember that these grants for financial assistance have all been given under the legislation that was enacted by his Government—namely, the Industry Act, 1972. He should remember that we are using that Act tonight. That is the Act that his own Government introduced. When the hon. Gentleman and some of his hon. Friends are critical of what my right hon. Friend proposes, I wish to goodness they had
690
voiced their criticisms before passing that legislation.
Mr. Heseltine: I am not in any way criticising the Act. It was essentially an Act which gave great power to the Minister to use as he saw fit. It so happens that in a growing number of cases it has been used wrongly. That does not make it a bad Act, but it makes Ministers' judgments bad judgments.
Mr. Huckfield: Some of the hon. Gentleman's hon. Friends criticised the Act on its introduction, but the hon. Gentleman was all in favour of it at that time. I recognise the logical consistency of the arguments advanced by the right hon. Member for Down, South (Mr. Powell) and others who are not here tonight, such as the hon. Members for Oswestry (Mr. Biffen) and Cirencester and Tewkesbury (Mr. Ridley). They recognised the possibilities and they have been true to their principles. But we have seen how the hon. Member for Henley has changed when it suits his book.
I support the financial assistance that is to be given because of the contribution made by Alfred Herbert—a contribution which I hope it will continue to make in the future—in respect of not only its companies based in this country but the subsidiary companies which it has overseas and which so help our export performance.
My hon. Friend the Member for Coventry, North-East (Mr. Park) was right to say that if we are to re-equip British Leyland, we stand committed to inject £3,000 million fixed and working capital into that corporation by 1982. Is he suggesting that the bulk of that capital should be spent on imported machine tools? That is the corollary of some of the Opposition arguments which we have heard tonight.
We recognise that there must be a fundamental re-equipment of British Leyland if we are to match some of the opposition we get from Datsun, Fiat, Volkswagen and other continental producers. I believe that the motion will go a long way to make re-equipment possible for Alfred Herbert and, indeed, for the whole machine tool industry.
I understand that a fairly prominent person in the Machine Tool Trade Association suggested that we could not

691
supply British Leyland and attend to exports at the same time because there was not the capacity in the machine tool industry. I understand that that gentleman was rebuked for his remarks.
My researches indicate that with the right amount of support, both strategic and tactical, at the right time the industry—and, of course, Alfred Herbert—can supply British Leyland and make a significant contribution to exports and our balance of payments.
I hope that the Secretary of State for Industry will be able to give a little more information about the consultative and participatory processes by which workers in future will be able to share decision-making. We are undergoing yet another experiment in industrial democracy which the Secretary of State for Energy has initiated. It is an important experiment. We do not have many occasions where workers are enabled to share in future strategy decision making in companies.
I hope my right hon. Friend will say more about machine tool imports. I have tabled a number of Questions asking the Government to give grants to that industry to enable them to meet the competition of foreign-produced machine tools. I hope that my right hon. Friend will be able to say something about the prospects of Government grants for British firms and perhaps suggest how they should be spent. It is no good putting large sums of money into a company like Alfred Herbert and giving it guarantees if the grants which the Government give out are to be spent on imported machine tools. I hope that the Minister will say something about that and about the policy options he intends recommending following the Peat Marwick study and the joint union-management proposals.
I hope, too, that we shall hear something about Red Lane. It is difficult to ask about Alfred Herbert in Coventry without constituents asking, "What is going to happen to Red Lane?" It is an important factory, as my hon. Friend the Member for Coventry, North-East has said. That, too, has important balance of payments and import repercussions. I endorse everything my hon. Friend has said. We both have constituents working at Alfred Herbert.
692
If the figures produced by the hon. Member for Tonbridge and Mailing are accurate, they seem to make not just a good case for an injection of public money but a cast-iron case for a complete takeover. If we are really having to pay these sums of money into a company like this, I would like to see not just partial public accountability but complete public accountability—nationalisation. I hope that the House will support this motion and give all possible encouragement to my right hon. Friend to keep alive the British machine tool industry.
11.12 p.m.
Mr. Richard Wainwright: Constituency interests or the lack of them have been fairly freely revealed tonight. While I have no constituency interest in any of the Alfred Herbert factories or former factories, I have a constituency interest in well-staffed, well-managed and highly efficient and profitable engineering works of various kinds that rely on a regular supply of up-to-date machine tools. Part of their efficiency is due to the fact that the policy of almost all of them is to equip themselves with the best bargains they can find from any part of the world—a policy which, for what it is worth, I try to encourage.
When my colleagues asked me earlier this evening at our party meeting whether I had any advice to offer as to how they should vote later tonight—[Interruption.] They are votes on which right hon. and hon. Members of the Labour Party have occasionally relied. [Interruption.] The idea of a democratically run party must come as a surprise to some groups of Labour Members. I told my colleagues that I preferred to wait for the opening speech of the Minister before offering any advice.
I now realise what a sucker I was to suppose that I could get a grain of information from a threadbare utterance which would have disgraced the president of the smallest banana republic in the world. I profoundly hope that no one from the International Monetary Fund or the other bodies to which the begging bowl will soon pass was in the Gallery to see to what depths our affairs have fallen. Every elementary question which an A-level student in these matters would have jotted down for an essay on these

693
affairs was neglected or deliberately passed over.
We have referred to the fact that the right hon. Gentleman has suddenly taken on a heavy new burden, but we are entitled to some continuity in the conduct of our affairs. I would have hoped that this massive organisation down Victoria Street, which you, Mr. Deputy Speaker, and I pass several times a day, would have been able to furnish something a little more credible than we have had tonight. There is no excuse on this occasion. It cannot be said that suddenly a tidal wave of economic disaster has overcome a great British firm and the House of Commons must act quickly without too much investigation. For four years there has been a loss on the audited accounts of the company. Ever since 1967 the return on capital from Alfred Herbert has been derisory. Governments of both complexions, if they cared about this company—and I am not particularly suggesting that they should—ought to have looked at it long ago. There again, I wonder what this great apparatus of Government has been doing during these wasted years.
My own view is that the Government were confidently relying on the fact that the major Opposition party in size has a guilt complex about the Act which it so unwisely passed, and which my hon. Friends resolutely opposed, and that the usual half-hearted official Opposition vote would be all the Government had to meet tonight. But I believe that public opinion is now thoroughly roused about the way in which the weak, the inefficient and the feather-bedded succeed in getting money out of the Government, while the smaller, well-managed firms—there are dozens of machine tool makers in places like Halifax who know how to run their businesses—have to go crawling to their bank managers when some temporary trouble affects them.
Unless in the closing minutes of this debate the Minister or his colleague can seriously address themselves to questions like whether this is fair to the efficient competitors in this country of Alfred Herbert, whether the money will be used to promote a counter-cyclical policy in the machine tool industry, which has been badly needed for years, whether this will assist British Leyland or whether it will
694
simply be a cover for British Leyland to indulge in an expensive and unjustified "Buy British" policy at all costs—unless, indeed, we have further and better particulars—I am bound to advise my colleagues that this proposal should be opposed.
Mr. Deputy Speaker (Mr. George Thomas): Before I call the next hon. Gentleman may I say that I should be grateful if he would limit himself to five minutes.
11.16 p.m.
Mr. J. W. Rooker: I shall certainly do that. Mr. Deputy Speaker.
One point that I should like to follow up concerns the opinion of IDAB, an experienced bunch of people. I should like to see the same question as was asked in January or February asked again today, because in the meantime we have done something about changing the position of IDAB to give it some more experience. It is unlikely that it would take the same view today as in the past.
The hon. Member for Henley (Mr. Heseltine) put the blame foursquare on the management of Alfred Herbert, and in many ways he may be right, but really the blame lies on British industry. Way back in 1969 the CBI was doling out prizes to companies for their foresight in investing in new equipment and plant. They selected their top 10 pacemakers of the year, and in 1969 Alfred Herbert received a plaque from the CBI. This award was made, it was said, to Alfred Herbert for the most impressive plant built in this country since the war.
No one can argue that the management at Alfred Herbert was not then trying to do something about investing. But after 1969 we had four years of the Tory Government, with a complete and catastrophic fall-off in investment in industry right across the board, decreasing the need for machine tools. That is why we are here tonight, not because of the failure of one particular company.
I should like to think that we are here to help just one lame duck. I assume that we have a strategy, under the Industry Bill 1975, truly to regenerate British industry. It is no good going on about regenerating British industry if we are then told that we have not the

695
capacity to produce the machine tools. Factories in Birmingham are full of equipment from East Germany, West Germany and Russia, all brought in under very shady deals in terms of the financial arrangements. It is extremely difficult to prove these matters or to get even our own Government—which we hope would want to do so—to take action.
We are told that the NEB will be involved in the shareholding. It is already going to have shares in one other machine tool company, Kearney and Trecker Marwin Ltd. Why cannot it co-ordinate the effort being put into British Leyland?
We are talking of investing over £2,000 million, and Opposition Members criticise an investment of £25 million. The new machine tool orders required by British Leyland can only be glimpsed from the Ryder Report. What we are told is that, unlike most of the rest of the world's industry, British Leyland's equipment is clapped out and twice as old as the average for the rest of the world, and that there is a vast new market there.
It is no good if the NEB does not do its job. Rather than sitting issuing directives, pleading and cajoling, it must get in and do something, even sending people into companies to ensure that the money is spent properly, so that we do not find British Leyland going abroad for new machine tools when we have been asked to keep going a large sector of the productive capacity of the British machine tool industry.
I hope that my right hon. Friend will enlarge on that, because it is of crucial importance bearing in mind the problems of our motor industry.
11.20 p.m.
Mr. Cecil Parkinson: I hope that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) will forgive me if I do not comment on his remarks. In the brief time available to me, I want to take up some of the remarks of the hon. Member for Nuneaton (Mr. Huckfield), which in their own way represented a classic exposition of their kind.
696
The hon. Gentleman's arguments were drearily familiar: "We shall take a major share in British Leyland. Therefore, we must have another company making machine tools, which this company will need. The Opposition have never had any sympathy for people who will be out of work. In opposing this measure, they are opposing employment. They are damaging people's employment prospects. They do not care about them, and we do."
It is precisely because the Opposition are interested in people having employment in viable industries with long-term prospects that we oppose measures like this which pump money into companies simply because they exist and are in trouble.
All that has been said about Alfred Herbert is that it employs a lot of people, it is in trouble, and, therefore, we must give it money. No one has said that we have reason to believe that Alfred Herbert can pull itself round if we make the money available. The Secretary of State spoke vaguely of a united effort by management and labour and said that, with additional money, the whole thing would come right. He almost added "God willing", but not quite.
Again and again we hear arguments of this kind. We hear that, because a company is in difficulties, that is the principal reason why we must preserve it. The House never asks why the company is in difficulties and whether the money being made available will help it get out of its difficulties.
We heard earlier in the debate that most of the money would go to pay off existing debts. It will not be available to create new machines. It will be used simply to keep the company alive. I have no doubt that three months from now the Secretary of State will say "Three months ago we voted £25 million to keep the company alive. It is alive, but barely, and it needs another £25 million to keep it going. Having put in £25 million, we dare not do other than put in the rest, otherwise we shall lose the money that we have already put into it."
However, it is even worse, because in effect the Secretary of State will use the money to undermine the commercial chances of the company. The word will get about that Alfred Herbert is owned

697
by the Government and that it can be given extended credit and treated on a non-commercial basis because the Government are involved.
We are taking part tonight in a further chapter in probably the most dreary story ever written about this country. The Government overspend. Because of that, they over-tax. The result of its over-spending is inflation, and, therefore, we must have price controls. Because we have price controls, companies get in difficulty. Because companies get in difficulty, we must have Industry Acts. So we end up putting money into companies which are in difficulty mainly because of the Government's own activities.
We seem to spend half our time making difficulties for companies and taking money from companies. We spend the other half of it handing it back to them in order to bail them out of the difficulties into which the Government's policies have put them.
Tonight is just a further chapter in a very boring Alfred Herbert history. The Secretary of State will be back again to explain that he listened, as very few people do, but those who have listened have always found themselves in difficulties. The hon. Member for Nuneaton, with his seductive stories about protecting families and jobs, has sought to prop up another company which is a drain on the nation. He has done nothing to preserve employment in the Midlands or to help the future of British industry. I shall vote enthusiastically against this proposal.
11.26 p.m.
Mr. Tom King: We now come to the end of the debate. I should like to say that we now understand what it is all about, but we do not. Some hon. Gentlemen opposite had the gall to ridicule the hon. Member for Colne Valley (Mr. Wainwright) who said that he came into the Chamber to make up his mind and then to advise his colleagues in the Liberal Party on how they should vote, hoping that he would have some information from the Secretary of State.
I do not think that I have ever heard a more inadequate argument put forward by the Secretary of State. My hon. Friend the Member for Hertfordshire, South (Mr.
698
Parkinson) was a little unfair, because the Secretary of State gave three reasons for this investment and my hon. Friend cited only two. One reason was that a lot of people and jobs were involved. My hon. Friend begged the question whether jobs could be more effectively preserved in other ways than giving £25 million. However, I leave that point aside. The second reason was that the company was in trouble. The third reason, which my hon. Friend left out, was that the company was a major manufacturer of machine tools. That was about the sum total of what the Secretary of State put before us.
The Secretary of State—I say this in no personal sense, because the right hon. Gentleman is normally a very effective performer at the Dispatch Box—did not seem to understand what he was talking about. It was certainly his least effective performance. I do not know whether he had a chance to read his brief before coming into the Chamber. He certainly did not seem to feel at home. The House did not find his performance convincing.
In the absence of any speech, we must turn to the Secretary of State's Press release, which nobody in the House received until quite late today. No attempt was made by the Library to make it available to hon. Members, although it was produced this afternoon.
Obviously this is a minor matter. We are giving only £25 million. The House is deciding, in an hour and a half, whether £25 million should be made available to Alfred Herbert Ltd.
So we look to the Press release, in which we get words of great wisdom which give us the whole justification for this investment. We are deciding to spend £25 million. My hon. Friend the Member for Henley (Mr. Heseltine) also made this point. If anybody was making any investment for any purpose at all, whether in industry, in business or in private life, would he not first decide what he wanted to do? Would he not first consider whether the expenditure was justified, and then decide whether he could get the money for it? Yet in this incredible situation, which is making an absolute farce of Parliament, we are asked to approve the expenditure of £25

699
million without any information or justification. We merely have a Press release from the Secretary of State:
"It will be for the company to determine the strategy and the consequent pattern of production to give effect to this purpose."
The safeguard, in the final sentence of that paragraph, is:
"The aim will be to ensure that Alfred Herbert Ltd. will achieve a profitable future in the coming years."
Is there any company in this country which, whatever its situation, does not have as its aim a profitable future?
The sum of the wisdom that we get from the Secretary of State in his Press release is that, because the company wants to be profitable, we should give it £25 million.
The hon. Member for Perry Barr, somewhat plaintively, said that he hoped there was a strategy. Surely this must be part—
Mr. Leslie Huckfield: Will the hon. Gentleman give way?
Mr. King: No. I must sit down shortly.
Surely this must be part of the great strategy for the regeneration of industry. I suspect that the hon. Gentleman knows that there is no such strategy. A problem has arisen, and the Government have met it in the only way that they understand.
There is not a limitless supply of funds that we can give to anybody who asks. Money is being denied to, for example, the textile industry. Labour Members who complain about the state of that industry should realise that this £25 million is going to a company which has no official strategy or published plan of what it is going to do with it. Other industries will suffer.
The hon. Member for Nuneaton (Mr. Huckfield) has the nerve to say that his constituency has above average unemployment in the West Midlands. How am I supposed to feel with the male employment rate in my constituency of 6·9 per cent. when I see how glibly money will be given to Alfred Herbert without proper examination by the Department of Industry or Ministers?
Ministers seem to have no understanding of the subject with which they are dealing. They offer grossly insulting ex-
700
planations to the House. Until we have a proper justification and an examination of whether there are better ways of spending this money, the House has no right to approve the Motion.
11.32 p.m.
Mr. Varley: The Opposition are in a schizophrenic mood about this matter. They have not yet made up their minds about whether they wish to see a strong and viable machine tool industry. They are reacting to the new mood within the Conservative Party. They feel they must go back to Selsdon as quickly as possible and forget the past.
I asked the hon. Member for Henley (Mr. Heseltine) during the Third Reading of the Industry Bill last week whether the Opposition, if they had been in Government, would have supported the cases we have supported. I failed to get a straight answer from him. I suspect they do not know. The argument is still going on within the party, and they are fudging this issue as they are fudging most others at the moment.
I have been criticised for not providing the House with enough information. No one would think I was bringing forward this motion under the Conservatives' Industry Act 1972. One would assume it was some other measure put on the statute book by a Labour administration. The Opposition have a guilt complex here.
This motion is put before the House in exactly the same way as Mr. Christopher Chataway put forward the proposals for NVT.
Mr. Tom King: Apart from the fact that six times as much money is involved in this case, would the Secretary of State study the way in which the case was set out by Mr. Chataway and compare it with the pitifully weak presentation he gave us tonight?
Mr. Varley: I know the hon. Gentleman was Mr. Chataway's PPS and has to show loyalty to him. The assistance given to NVT was done in exactly the same way as I am doing it tonight, though with a little more explanation, and I hope to have the opportunity of giving more information. Does the hon. Gentleman think it was right or wrong to give that assistance?
Mr. King: The motion has been laid in the same way, but the House is entitled to a full explanation of the reasons and basis on which it was put forward.
Mr. Varley: We did not debate NVT in the way we are debating Alfred Herbert, but it is not profitable to pursue this course. The hon. Gentleman is on the defensive, and I will not embarrass him further by putting more questions to him.
The hon. Member for Henley asked a great many questions, and he criticised Alfred Herbert's management. That criticism was also shared by my hon. Friend the Member for Wallsend (Mr. Garrett). Clearly, the management in Alfred Herbert will have to be strengthened—
Mr. W. E. Garrett: I must make clear that I was referring to the previous management, not the present one.
Mr. Varley: I agree. Mr. Buckley has done a fine job, and he will assemble around him men who can help the company a great deal.
The criticism was made that IDAB did not take the same view as the Government in December and January. I can assure hon. Members that IDAB feels that the Government are adopting the right strategy and course with Alfred Herbert. The hon. Member asked whether we were proposing to take a majority stake in the company. One of the defects of the 1972 Industry Act is revealed in this respect. I wish to take the opportunity here of correcting what was said by the hon. Member for Colne Valley (Mr. Wainwright) about his party vigorously opposing the Act when it was before the House at that time. I wound up the debate for the Opposition on that occasion, and I can tell hon. Members that the Liberals abstained.
Mr. Richard Wainwright: Is the Secretary of State claiming for a moment that that is an accurate report of the Liberal part of the proceedings in Committee and on Report?
Mr. Varley: Again the hon. Member is hedging. I can assure him that on
702
the Second Reading of that Bill his then hon. Friends—just about as many were then present as are now in the Chamber—did not oppose the Act.
One of the defects of that Act is that we cannot move to a majority stake in Alfred Herbert, and that is one reason why the holding will be vested in the National Enterprise Board. We intend to take that majority stake.
I was also asked what strategy would be adopted by Alfred Herbert. I want the management and work force to decide what strategy they want to adopt. I do not want to get involved in that strategy, because the management and work force can come up with the right solutions. My hon. Friend the Member for Coventry, North-East (Mr. Park) asked about provisions for the work force taking part in decision taking. One of the functions of the NEB will be to develop industrial democracy, and that is one of the provisions of the Industry Bill which is now before Parliament. I hope that it will be developed successfully.
The hon. Member for Tonbridge and Malling (Mr. Stanley) suggested that we should publish the Peat Marwick report and the other report. We are following precisely the same procedure as was followed by his Government when they gave assistance under the terms of the 1972 Act. Consultants' reports were never presented to the House in such circumstances by the Conservatives.
It is absolutely crucial that Alfred Herbert should be supported. I could give export figures for the company to show that there is no doubt that the company has a crucial rôle to play in the machine tool industry. If there was a loss of capacity, as some hon. Members are prepared to contemplate, if the company went into receivership, it would be disastrous for the British machine tool industry. The Government are supported by IDAB on that score. The company had a production level in 1974 of under £20 million with a work force of only 6,000—
It being one and a half hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the

703
Question pursuant to Standing Order No. 3 (Exempted business).
Question accordingly agreed to.
Resolved,
That this House authorises the Secretary of State to pay or undertake to pay sums by way of financial assistance under section 8 of the Industry Act 1972 in respect of a guarantee
Question put:—
The House divided: Ayes 110, Noes 74.

Division No. 282.]

AYES

[11.40 p.m.

Allaun, Frank

Grocott, Bruce

Rodgers, George (Chorley)

Archer, Peter

Hamilton, James (Bothwell)

Rooker, J. W.

Armstrong, Ernest

Harper, Joseph

Roper, John

Atkins, Ronald (Preston N)

Harrison, Walter (Wakefield)

Sandelson, Neville

Atkinson, Norman

Kooley, Frank

Sedgemore, Brian

Bates, Alf

Huckfield, Les

Shaw, Arnold (Ilford South)

Blenkinsop, Arthur

Hughes, Robert (Aberdeen N)

Sillars, James

Boardman, H.

Jackson, Miss Margaret (Lincoln)

Skinner, Dennis

Booth, Albert

Janner, Greville

Small, William

Brown, Hugh D. (Provan)

Johnson, James (Hull West)

Smith, John (N Lanarkshire)

Callaghan, Jim (Middleton & P)

Jones, Alec (Rhondda)

Snape, Peter

Clemitson, Ivor

Jones, Dan (Burnley)

Spearing, Nigel

Cocks, Michael (Bristol S)

Kaufman, Gerald

Spriggs, Leslie

Cohen, Stanley

Kerr, Russell

Stallard, A. W.

Coleman, Donald

Kilroy-Silk, Robert

Stott, Roger

Conlan, Bernard

Leadbitter, Ted

Taylor, Mrs Ann (Bolton W)

Cook, Robin F. (Edin C)

Lestor, Miss Joan (Eton & Slough)

Thomas, Ron (Bristol NW)

Cox, Thomas (Tooting)

Lewis, Ron (Carlisle)

Tierney, Sydney

Crawshaw, Richard

Mabon, Dr J. Dickson

Torney, Tom

Cryer, Bob

McElhone, Frank

Varley, Rt Hon Eric G.

Davis, Clinton (Hackney C)

MacFarquhar, Roderick

Wainwright, Edwin (Dearne V)

Deakins, Eric

McNamara, Kevin

Walden, Brian (B'ham, L'dyw'd)

Dean, Joseph (Leeds West)

Madden, Max

Walker, Terry (Kingswood)

Dell, Rt Hon Edmund

Marks, Kenneth

Ward, Michael

Dormand, J. D.

Marshall, Dr Edmund (Goole)

Watkins, David

Douglas-Mann, Bruce

Marshall, Jim (Leicester S)

Watkinson, John

Duffy, A. E. P.

Maynard, Miss Joan

Watt, Hamish

Edge, Geoff

Millan, Bruce

Wellbeloved, James

Evans, Ioan (Aberdare)

Miller, Dr M. S. (E Kilbride)

White, Frank R. (Bury)

Ewing, Harry (Stirling)

Newens, Stanley

Williams, Alan (Swansea W)

Fernyhough, Rt Hon E.

Noble, Mike

Wilson, William (Coventry SE)

Flannery, Martin

Oakes, Gordon

Wise, Mrs Audrey

Fletcher, Raymond (Ilkeston)

Park, George

Woof, Robert

Fletcher, Ted (Darlington)

Pavitt, Laurie

Young, David (Bolton E)

Fowler, Gerald (The Wrekin)

Peart, Rt Hon Fred

Garrett, W. E. (Wallsend)

Pendry, Tom

TELLERS FOR THE AYES:

George, Bruce

Prentice, Rt Hon Reg

Mr. David Stoddart and

Grant, George (Morpeth)

Price, C. (Lewisham W)

Mr. John Ellis.

NOES

Atkins, Rt Hon H. (Spelthorne)

Holland, Philip

Powell, Rt Hon J. Enoch

Banks, Robert

Hooson, Emlyn

Rathbone, Tim

Beith, A. J.

Hurd, Douglas

Rees-Davies, W. R.

Benyon,W.

King, Tom (Bridgwater)

Ross, Stephen (Isle of Wight)

Boscawen, Hon Robert

Knight, Mrs Jill

Shaw, Giles (Pudsey)

Bottomley, Peter

Knox, David

Shepherd, Colin

Brotherton, Michael

Lane, David

Silvester, Fred

Carlisle, Mark

Langford-Holt, Sir John

Sims, Roger

Chalker, Mrs Lynda

Latham, Michael (Melton)

Smith, Cyril (Rochdale)

Clark, Alan (Plymouth, Sutton)

Lawrence, Ivan

Sproat, Iain

Clarke, Kenneth (Rushcliffe)

Lester, Jim (Beeston)

Stanbrook, Ivor

Clegg, Waiter

Luce, Richard

Stanley, John

Cope, John

Macmillan, Rt Hon M. (Farnham)

Steel, David (Roxburgh)

Cordle, John H.

McNair-Wilson, M. (Newbury)

Stradling Thomas, J.

Crowder, F. P.

Maxwell-Hyslop, Robin

Temple-Morris, Peter

Dodsworth, Geoffrey

Miscampbell, Norman

Thomas, Rt Hon P. (Hendon S)

Emery, Peter

Mitchell, David (Basingstoke)

Trotter, Neville

Fisher, Sir Nigel

Molyneaux, James

Viggers, Peter

Fletcher-Cooke, Charles

Montgomery, Fergus

Wainwright, Richard (Colne V)

Gilmour, Sir John (East Fife)

Morgan, Geraint

Wall, Patrick

Gower, Sir Raymond (Barry)

Morgan-Giles, Rear-Admiral

Winterton, Nicholas

Hampson, Dr Keith

Morrison, Hon Peter (Chester)

Younger, Hon George

Hannam, John

Page, Rt Hon R. Graham (Crosby)

Harrison, Col Sir Harwood (Eye)

Parkinson, Cecil

TELLERS FOR THE NOES:

Heseltine, Michael

Pattie, Geoffrey

Mr. Russell Fairgrieve and

Higgins, Terence L.

Penhaligon, David

Mr. Spencer Le Marchant.

or guarantees to be given to the bankers of Alfred Herbert Limited covering borrowing facilities made available by the bankers to that company, in so far as the amount paid or undertaken to be paid under the guarantee or guarantees is in excess of £5 million but does not exceed £15 million.

ALFRED HERBERT LIMITED
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pendry.]

MANCHESTER (OVERSPILL ESTATES)
11.51 p.m.
Mr. Jim Callaghan (Middleton and Prestwich)rose—
Mr. Deputy Speaker (Mr. George Thomas): Has the hon. Member reached agreement with the Department for a Minister to be present?
Mr. Callaghan: The Minister is here.
I thank you, Mr. Deputy Speaker, for allowing me to take over the Adjournment debate at such short notice. May I also thank the Minister for coming here at short notice.
I should like to raise the problem of overspill estates throughout the country, especially the Langley and Hillock estates, which lie within my constituency boundaries. Repeated requests to the Manchester Metropolitan District Council, which owns these estates, to discuss the transfer of the overspill estates owned by Manchester have not in recent years met with a favourable reply. In fact the reply which we received from the Manchester authority was
"Manchester is unable at this stage in the development of its housing policy to consider any changes in the ownership of its overspill estates".
I will explain the reasons given for the reply. They were first, that Manchester would lose some of its housing stock and be left with a preponderance of older flats and deck access dwellings; secondly, that Manchester would not be able to continue with its slum clearance programme or to rehouse people on its long waiting list, as to do both they are dependent on the relets which are available from their many overspill estates; and thirdly, that Manchester council would not be able to justify to the ratepayers of Manchester the continued expense of building high cost council housing if at the same time it gave away low cost housing already in its ownership.
It is accepted by the receiving authorities that the overspill housing was built
706
to enable Manchester to accomplish its slum clearance programme and that the overspill housing must continue to serve this primary purpose as long as Manchester has a slum clearance problem. I am pleased to note that in a relatively few years all slums in Manchester will have been abolished.
However, in the light of my experience as a local councillor in the Middleton borough, I would argue in favour of the transfer of the overspill estates on the grounds that the tenants of estates such as Langley, Downhill, Hillock and others are less favourably placed than the tenants of normal council housing in that, first, the Manchester housing authority is more remote from them, and second, that their elected representatives are powerless to raise their complaints or to cater for their needs in any elected assembly.
Taking the Langley Estate as one example, we note that the estate was built 20 years ago, consists of 4,728 dwellings and caters for a population of 25,000. The rest of Middleton, in which it is situated, has a population of 33,000.
It is my contention that Langley has in fact become a huge transit camp, which militates against its becoming a stable community. The reason for this is that relets on the estate do not go to the young married couples from the estate itself. A local Langley clergyman has stated that when he shakes hands with a newly married couple from the estate he is in fact saying goodbye to that couple. The Rev. Jack Nicholls of the All Saints and Martyrs Church, Wood Street, Langley, who officiates at about 90 weddings a year at Langley, has said that he knows of no couple whom he had married who now live on the estate.
Thus the estate is seen as a transit camp unrelated to its neighbouring communities and remote from the main authority in Manchester. The problems of Langley thus become more intense as the years go by.
Any examination of the referrals to the social services department in the borough of Middleton shows that 50 per cent. of the referrals come from the Langley Estate, and that generally speaking, 75 per cent. of the referrals on child care and family problems come from Langley. For example, in 1974, of the families

707
moved to Langley from elsewhere, 25 per cent. had been referred to the social services department by January 1975.
Of the total of 1,422 cases referred to the social services department, about 25 per cent. were designated as child care problems—that is, reception into care, designated as family problems—that is, behavioural problems, court reports, and so on—and about 23 per cent. were financial, accommodation and matrimonial problems.
The reasons for these problems were given at a recent meeting of professional people and volunteers working on Langley. There was a feeling that the annual 200 relets available to Manchester have been taken up mainly by families, including large families and one-parent families, from slum clearance areas in Manchester urgently requiring housing, but that no priority is given to the children of these families once they are rehoused.
If we can draw correct conclusions from this, there is a constant influx of new families from the most deprived areas of Manchester, from areas in which the EPA schools are now operating. However, the play areas and facilities on the Langley estate are limited. A properly equipped and staffed adventure playground is needed and should attract high priority. Resources for youth work are also inadequate and insufficient. Such resources as there are appear to be well supported financially, but the potential has not been fully developed. Youth work is carried out under great difficulties and requires greater financial support from the local authority than it appears to get, though there are hopes of building a new youth club on the estate.
Langley is an area of social deprivation with a need for community assistance from central Government funds. However the provision of amenities for the estate is more difficult to achieve whilst the authority owning the overspill estate—namely, Manchester—is not the same as the authority which exercises other local government functions. The sites for amenities are often in the ownership of Manchester. Transfer to the receiving authorities would ease these problems.
From the point of view of Langley and Hillock—Hillock is another overspill
708
estate within the boundaries of my constituency which, again, is owned by Manchester—the total approach to welfare advocated by the Seebohm Report, by having housing and social service functions in the same authority, is hampered by the separate ownership of overspill housing. The relation between housing problems and welfare problems is too well known to need amplifying, but I give as an example rent arrears.
Today the overspill areas are now in areas where the local authority is a housing, social services, education and planning authority all in one. This gives the opportunity for the first time for one authority to undertake a total approach to the needs of the residents of such estates as Langley and Hillock—and that authority is the receiving authority.
Manchester's objections to the transfer of overspill estates to the receiving authority could now be met, and most of the needs of the tenants and receiving councils could be met, by suitable carefully drafted agency agreements, by which the metropolitan district councils could become the agents of the Manchester Metropolitan District Council under the powers contained in Section 101 of the Local Government Act 1972.
Perhaps such an agreement can eventually be made, for earlier this year a statement of intent was issued by the Manchester City Council, and the hon. Member for Rochdale (Mr. Smith will probably know that it was agreed to by the Rochdale Borough Council). It is hoped that that statement will form the basis for the draft agency agreement for the management of the Langley estate. I believe that a similar offer was made by Manchester to the Bury authority for the Hillock estate.
The councils intend to provide a system for the continued operation of the Langley and Hillock estates which will have the effect of putting the overspill estates on the same footing, in all respects, as that of the receiving borough's tenants on its estates.
The borough accepts that for the time being Manchester will retain ownership of the estates, but the city in return acknowledges the borough's wish to retain ownership. Accordingly, the city is willing at any time to consider whether the transfer would then be appropriate

709
upon a request from the borough and it will in any case raise the issue as soon as it becomes clear that its present commitments arising from undertakings given by the Secretary of State for the Environment under Section 42 of the Housing Act 1957 have been met, or can reasonably be so, from the city's other housing resources, apart from the overspill estates.
The principal objective in any such agency agreement must be the creation of working arrangements which will ensure that the Langley and Hillock tenants have the same recourse to the borough as do other residents of its area and are treated in the same way as are tenants who come under the borough. Undoubtedly, the best future for any overspill estates must lie in their full integration into the receiving communities.
12.6 a.m.
The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): My hon. Friend has raised an important issue, and there is no doubt that his previous experience in local government and his knowledge of the area concerned gives us the key to the solution of the problem which he raised.
Overspill has caused a number of difficulties and presents problems. The area which he mentions is one in which the tenants feel remote from the town hall and the housing authority seems a long way away. My hon. Friend referred to difficulties peculiar to the area. My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) raised a similar matter with the previous administration. The presence of the hon. Member for Rochdale (Mr. Smith) is an indication that those of us who have experience in local government—and I was a member of a housing committee in the North-East—recognise the existence of a housing problem. Indeed, that problem is the greatest social issue facing the country. We must always remember that we are talking not about statistics but about families and the raising of children. We must seek to give families a sense of community if they are to become the mature adults we need in present society.
I have not been long in my post in the Department, but I have read a great number of reports pointing to the problems which face our people in terms of
710
accommodation. I repeat that we are dealing with people rather than with mere figures. The other day at a meeting I was confronted by a whole series of figures which suggested that I had a deprived upbringing. Although I lived in a house which by modern standards was overcrowded, we gained as a family in our sense of community. I lived in a small mining village, but we felt we belonged there. Unfortunately, in overspill estates that atmosphere is impossible to create.
Although we sometimes deal with these matters in respect of the share of GNP spent on housing and spell out the tremendous increase in the allocation of resources in respect of new homes or the improvement of houses built 40 or 50 years ago, we are conscious of the fact that the injection of resources cannot equal that sense of community which existed in past years. Tenants must feel that they can participate in the management of their estates. I assure my hon. Friend that this is being given the closest attention by my Department.
My hon. Friend will not expect me to go into the details of the case he has raised since he brought the matter up so recently. I will study carefully what he has said when I am able to read it in Hansard and will write to him. It is not the Department's policy to lay down rules and regulations governing the management of estates or to instruct local authorities one way or another. I would not wish to comment on the merits of the case my hon. Friend has raised.
It is a matter for local people who understand the area to come together and discuss how best they can serve the interests of the families living on these overspill estates. We shall draw to the attention of the relevant authorities the concern expressed by my hon. Friend and by the tenants. It is our desire to bring in more people so that they can discuss what is best for the people living on the estates, rather than pretending that the people in Marsham Street know best. The latter is not my approach to the housing problem.
This is a difficult problem. My approach is to explore every opportunity for involving tenants in the running of the estates, enabling them to accept responsibility for the efficient operation of their housing areas. We shall use our good

711
offices and do all we can to help. Tenants should have the opportunity to express their views to the men and women in public life who understand them. In that sense I respond to my hon. Friend's case. I will study what he has said with care
712
and see whether we cannot improve matters for the folk living on the estate to which he has referred.
Question put and agreed to.
Adjourned accordingly at thirteen minutes past Twelve o'clock.

INDUSTRY
  Alfred Herbert Ltd.
  Alfred Herbert Ltd.
  Cornwall
  Cornwall
  European Regional Fund
  European Regional Fund
  Terotechnology
  Terotechnology
  HS146 Aircraft
  HS146 Aircraft
  Post Office
  Post Office
SCOTLAND
  Oil Industry Developments (Social Infrastructure)
  Oil Industry Developments (Social Infrastructure)
  Soil and Crop Analysis (Charges)
  Soil and Crop Analysis (Charges)
  Housing (Mid-Argyll)
  Housing (Mid-Argyll)
  Directorate of Overseas Surveys
  Directorate of Overseas Surveys
  Blood Products
  Blood Products
  Fish Landings
  Fish Landings
  Housing Activity
  Housing Activity
  Fish Quotas and Restrictions
  Fish Quotas and Restrictions
  Sugar Beet
  Sugar Beet
  School Examinations (Committees' Inquiries)
  School Examinations (Committees' Inquiries)
  Schools Code 1956
  Schools Code 1956
  Housing Expenditure
  Housing Expenditure
  Forestry Workers
  Forestry Workers
  Crofters (Land Ownership)
  Crofters (Land Ownership)
  Rent Rebates and Reductions
  Rent Rebates and Reductions
  Local Government (Pay)
  Local Government (Pay)
  Fishery Protection Squadron
  Fishery Protection Squadron
  Harbours and Jetties (Western Isles)
  Harbours and Jetties (Western Isles)
ENVIRONMENT
  Local Government (Chief Officials)
  Local Government (Chief Officials)
  Housing (Demolition Damage)
  Housing (Demolition Damage)
  Ministerial Appointments
  Ministerial Appointments
  Railways
  Railways
  M27
  M27
  Edinburgh (Royal Visit)
  Edinburgh (Royal Visit)
  Water Improvement Schemes
  Water Improvement Schemes
  Dungeness-Weybridge Power Line
  Dungeness-Weybridge Power Line
OVERSEAS DEVELOPMENT
  Mozambique
  Mozambique
  English Language Book Society
  English Language Book Society
  Zairians' Scholarships
  Zairians' Scholarships
AGRICULTURE, FISHERIES AND FOOD
  Tied Cottages
  Tied Cottages
  Hay (Stockpiling)
  Hay (Stockpiling)
  Beer Brewing Costs
  Beer Brewing Costs
  Ewe Flocks (Income Statistics)
  Ewe Flocks (Income Statistics)
  Northern Ireland
  Northern Ireland
  Capital Taxation (Report)
  Capital Taxation (Report)
  Exports
  Exports
CIVIL SERVICE
  Government Hospitality Fund
  Government Hospitality Fund
  Post Office Services (Government Departments)
  Post Office Services (Government Departments)
  Public Boards (Part-time Members)
  Public Boards (Part-time Members)
  CROWN SERVANTS (APPOINTMENTS)
  CROWN SERVANTS (APPOINTMENTS)
DEFENCE
  Underwater Technology
  Underwater Technology
  United States Polaris Bases
  United States Polaris Bases
HOME DEPARTMENT
  Television Reception (Northumberland)
  Television Reception (Northumberland)
  Drunkenness Offences
  Drunkenness Offences
  Chileans
  Chileans
HOUSE OF COMMONS
  Noise Nuisance
  Noise Nuisance
  LAW COMMISSION
  LAW COMMISSION
NORTHERN IRELAND
  Civil Servants
  Civil Servants
EMPLOYMENT
  School Leavers (Scotland)
  School Leavers (Scotland)
  Firearms Certificates
  Firearms Certificates
  Disputes (Scotland)
  Disputes (Scotland)
  Strikes
  Strikes
  Birmingham
  Birmingham
  Staffordshire
  Staffordshire
  Macclesfield
  Macclesfield
  Fishing Ports (Scotland)
  Fishing Ports (Scotland)
  Hull
  Hull
  Cornwall
  Cornwall
  Earnings
  Earnings
  Disabled Persons
  Disabled Persons
  Moray and Nairn
  Moray and Nairn
  Training
  Training
  South-West England
  South-West England
  Redundancy Payments
  Redundancy Payments
  Ceredigion
  Ceredigion
  School Leavers (Wales)
  School Leavers (Wales)
  Teachers
  Teachers
  "Celtic Surveyor"
  "Celtic Surveyor"
FOREIGN AND COMMONWEALTH AFFAIRS
  Rhodesia
  Rhodesia
EDUCATION AND SCIENCE
  Ugandans
  Ugandans
  Teachers (Wales)
  Teachers (Wales)
ENERGY
  Coal (Transportation)
  Coal (Transportation)
  Floodlighting
  Floodlighting
WALES
  Water and Sewerage Charges
  Water and Sewerage Charges
  Factories (Ceredigion)
  Factories (Ceredigion)
NATIONAL FINANCE
  Income tax
  Income tax
  Taxation Rates
  Taxation Rates
  Public Sector Borrowing
  Public Sector Borrowing
  Pay Settlements (Taxation)
  Pay Settlements (Taxation)
  Wines
  Wines
  Beer
  Beer
  Whisky
  Whisky
  Brandy
  Brandy
  Manufacturing Investment
  Manufacturing Investment
  Value Added Tax
  Value Added Tax
  Pay Increases
  Pay Increases
  Scientific Research
  Scientific Research
  Defence, Education and Social Services
  Defence, Education and Social Services
  Regional Aid
  Regional Aid
SOCIAL SERVICES
  Benefits Unclaimed
  Benefits Unclaimed
  St. Wulstan's Hospital, Malvern
  St. Wulstan's Hospital, Malvern
  Low-Income Families
  Low-Income Families
  Electricity and Gas Disconnections
  Electricity and Gas Disconnections
  Benefits (Recipients)
  Benefits (Recipients)
  Supplementary Benefit (Seasonal Workers)
  Supplementary Benefit (Seasonal Workers)
  Christmas Bonus
  Christmas Bonus
  Family Income Supplement
  Family Income Supplement
  Skin Camouflage
  Skin Camouflage
  National Health Service Staffs
  National Health Service Staffs
  Elizabeth Garrett Anderson Hospital
  Elizabeth Garrett Anderson Hospital
  Gynaecologists
  Gynaecologists
  Pneumoconiosis
  Pneumoconiosis
  Medical Services (Birmingham)
  Medical Services (Birmingham)
  Health Centres
  Health Centres
  Household Expenditure (Rates)
  Household Expenditure (Rates)
TRADE
  Footwear
  Footwear

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Portsmouth.

UNITED NATIONS: MEMBERS' CONTRIBUTIONS
Lord BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what instructions have been given to the United Kingdom representative to the United Nations to deal with the situation created by the reported deficit of 87·5 million dollars to some extent due to the default of 72 Member countries in respect of their contributions to the United Nations.
The PARLIAMENTARY UNDER-SECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the United Kingdom representative to the United Nations is instructed to support any practical measures to liquidate the United Nations debt, to reduce the present high rate of increase in the United Nations budget and to press for an effective agreement on the budget and on expenditure on future peacekeeping operations.
Of the short term deficit of 87·5 million U.S. dollars, 57·9 million U.S. dollars represents contributions to the regular budget withheld by Member-States. The remainder relates to peacekeeping operations. Her Majesty's Government support the principle of collective responsibility and do not accept that such shortfalls should be made up by additional assessed contributions from other Members.
Lord BARNBY: My Lords, arising out of that agreeably informative reply, in view of the fact that a regular contribution of 14 million dollars is made by this country, exemplary to a good many others, could the Minister indicate
774
what is the period of grace allowed to the non-payers before any action is taken to withdraw the right to vote?
Lord GORONWY-ROBERTS: My Lords, Article 19 of the Charter provides that where a Member-State falls short by the equivalent of two years' subscription of membership its position shall be considered with a view to withdrawing its right to vote. It is not always easy to decide that there are not special circumstances why a country withholds part of its contribution. For instance, some of the best payers may overshoot the financial year and, on paper at least, be in default in the ensuing year. So Article 19 has not so far been called into operation.
Lord JANNER: My Lords, may I ask my noble friend whether it is a fact that the main nations which have not contributed or are in debt are those nations which have been advocating the violation of the Charter and have been involved in such bare-faced violation, against Israel, for example? Is it not a fact that some of the civilised nations are withholding their payments because of that type of action on the part of these other Members? Can something be done at long last to try to put the United Nations on a proper, decent footing instead of the miserable state into which it has brought itself in consequence of these actions?
Lord GORONWY-ROBERTS: My Lords, I do not think we would equate promptness of payment with purity of ideology, at least not in this case. On the other points raised by my noble friend, I can only say that generally we are in sympathy. We are constantly pressing for a better system of financing the United Nations, and any suggestions will be gratefully received, as, no doubt, will all contributions, large or small.
The Earl of LAUDERDALE: My Lords, can the noble Lord say what practical measures the United Kingdom delegate is invited to support? The noble Lord referred to "practical measures". Has he any in mind?
Lord GORONWY-ROBERTS: My Lords, there are a number of suggestions now being canvassed, among them the possibility of cutting down on the United Nations regular budget, particularly in

775
regard to the work of the Fourth Committee. That is an example of the kind of practical proposal I think the noble Earl has in mind.
Lord BLYTON: My Lords, does not the Minister consider that these deficiencies are chicken-feed compared to the losses, on the balance of payments, we are having to face in the Common Market, of nearly £3,000 million a year?
Lord GORONWY-ROBERTS: My Lords, we are all entitled to our own mathematics as we are to our own ideologies.
Lord JANNER: My Lords, may I follow up the answer that my noble friend gave me. Is this not a question of ideology? Is not the United Nations itself supposed to be based on the ideology of a civilised institution? In consequence of the fact that it is not carrying out that particular function and is dealing wrongly with Members of its own organisation, is it not essential, if one really wants to get the funds to support it, to see that it carries out its legal duties?
Lord GORONWY-ROBERTS: My Lords, I would have said that the United Nations has an ideal bedeviled by ideologies.
Lord LEATHERLAND: My Lords, is my noble friend aware that France has been heavily in default on several occasions in recent years? Can he tell us whether France is still in default?
Lord GORONWY-ROBERTS: My Lords, the latest figures given to me indicate that this is so. I would not, however, wish to comment on the performances of individual Member-States in this field.
Lord BARNBY: My Lords, since the Minister made reference to the special peacekeeping forces, can he give this information to the House: Are the military aspects of peacekeeping expenses lumped in with the general budget, or are they kept in a separate category and financed through separate sources?
Lord GORONWY-ROBERTS: My Lords, I appreciate the point raised by the noble Lord. The figures I gave
776
included something like 30 million US dollars accumulated deficit on the cost of peacekeeping operations, particularly those in 1957, on UNEF, and the 1960 Congo operation. It is true that, at least at that time, those expenses were borne on the regular budgets. I could not give the noble Lord the information as to whether the later peacekeeping operations were borne on the regular budget. I believe that they were, but if he will allow me to go into that particular point, I shall do so.
Lord GORE-BOOTH: My Lords, would the Minister agree that often when this subject is considered there is a great temptation to cut down on the peacekeeping budget, and that Governments should hesitate long before agreeing to that course since this is a quite basic object of the United Nations?
Lord GORONWY-ROBERTS: My Lords, it is a basic and a primary objective to keep the peace.

BRITISH AIRWAYS: OVERBOOKING
2.44 p.m.
Baroness BURTON of COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what grounds they consider that the figure of 141,000 passengers who cancelled their bookings and received their money back justifies the failure to provide seats to 274 people when they attempted to travel on flights for which they had booked; and how many of the 274 people had paid for their flights.
Lord JACQUES: My Lords, the circumstances quoted in my supplementary reply to the noble Baroness's Question on 26th June merely illustrates that the off-loading of passengers and the cancellation of bookings are two sides of the same coin. A specific study of the question is being carried out by the Civil Aviation Authority which is the competent body to advise the Government on matters affecting the interests of air travellers. I understand that the Authority is expected to make known the results

777
of this study to the Airline Users' Committee within a few months. The Government will await the results of this work before forming a view. So far as the latter part of the noble Baroness's Question is concerned, I understand from British Airways that there is no reason to suppose that the passengers referred to in my supplementary reply of 26th June had not paid for their tickets.
Baroness BURTON of COVENTRY: My Lords, taking the last part first, the House assumes from this that the passengers had paid for their tickets. Can I ask the Minister, who has some knowledge of consumer affairs, whether he can think of any other merchandise which people order, pay for and receive—in this case the flight ticket—which is subsequently removed from their possession?
Lord JACQUES: My Lords, at the moment I cannot think of any such merchandise or service.
Baroness BURTON of COVENTRY: My Lords, may I then ask the Minister whether he is aware that the report from the Civil Aviation Authority is not likely to be available in the near future, and that it is not likely to reach a conclusion? May I ask him about one other matter. Does he not feel anything on the ethical side of this? Do the Government really feel that people who have paid for goods should have them removed from their possession, and the Government be unable to form a view on this until some committee has reported on their own opinion?
Lord JACQUES: My Lords, may I try to help the House by summing up the position showing the differences between the noble Baroness and the Government? I think all of us feel strongly when we hear that a passenger who has booked on an airline has not been able to get on that airline because of overbooking. It generates strong feeling because we know that it is an experience that we should not like, and we are disturbed that other people should have it. So there, I think, we have a point of agreement.
But the record shows that there are two points of disagreement between the noble Baroness and the Government. The
778
first is this: the Government say that there are two sides to this coin; first, there is the cancellation, which is in excess of 10 per cent.; and, secondly, there is the off-loading, which is certainly below 0·02 per cent. So far as the Government are concerned, they are two sides of the same coin. The noble Baroness, by the record, shows that she can see only one side of the coin, and on that point we shall have to disagree. The second point of disagreement is this. The noble Baroness is insisting upon immediate action—
Several Noble Lords: Speech!
Lord JACQUES: My Lords, please let me finish. The noble Baroness is insisting upon immediate action; so far as the Government are concerned, they see danger in this. There are certain remedies which could be applied but would undermine the competitive power of our airlines and increase the fares to our airline passengers. The Government therefore say that the Authority which has been appointed by Parliament to deal with this matter should report before the Government come to a view.
Lord GEORGE-BROWN: My Lords, with respect, that really will not do. There are not two sides to the coin.
Baroness LLEWELYN-DAVIES of HASTOE: Question!
Lord GEORGE-BROWN: My Lords, I am sorry, I did not hear what the noble Baroness said.
Several Noble Lords: Question!
Lord GEORGE-BROWN: My Lords, my question now starts, and I am obliged to the noble Baroness, who has been so long in public affairs, for reminding me. If I am the chairman of a company, as I am, and people cry off, having invited my services, there is nothing I can do about that; but when people have bought my services and paid for them, if I do not deliver could I ask the noble Lord whether I am not at risk of prosecution for trading fraudulently? Will he please tell me what is the difference between the law applied to my company and the law applied to his airline? They are trading fraudulently if they do not—
Several Noble Lords: Speech!
Lord GEORGE-BROWN: My Lords,
I am asking whether they are not trading fraudulently if, having taken the money, they do not deliver the services? We have a law—
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, the noble Lord is probably asking a question, concealed. Could he ask a short question?
Lord GEORGE-BROWN: Yes, my Lords—
Several Noble Lords: Hear, hear!
Lord GEORGE-BROWN: —and I seem to be particularly popular at the moment with Members of the Front Bench opposite. I will make my question very short. Would the Minister please tell me whether his airlines are trading fraudulently?
Lord JACQUES: My Lords, the answer is, No.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, on a point of order, is there not, in fact, a Petition for leave to appeal on this very point now pending before your Lordships' House?
Lord JACQUES: There is, my Lords.
Baroness BURTON of COVENTRY: My Lords, is the application for leave to appeal not being heard tomorrow, and is it not a fact that until it has been heard it cannot be granted and that until it has been granted it cannot be sub judice, so that it is therefore open for discussion today?
Viscount HANWORTH: My Lords, while regretting this practice as much as does the noble Baroness, may I try to put it in perspective by asking two questions? First, if this were done away with and there was not overbooking, by what percentage is it likely that fares would have to rise? Secondly, what is the number or percentage of passengers who do not get on those flights on which they are booked because of other causes, such as aircraft unserviceability, strikes and so on?
Lord JACQUES: My Lords, the answer to the first part of that supplementary question is that, as there are 10 per cent. or more cancellations, fares
780
could have to be increased by up to 10 per cent. I regret that I do not have the information sought in the second part.
Lord ELTON: My Lords, may I ask the Minister if the 274 people referred to in the latter part of the original Question got back their money, and how long it took for them to get it back? Did they receive compensation, first, for inconvenience and, secondly, for consequential loss owing to the change of their arrangements?
Lord JACQUES: My Lords, in the majority of cases they went on the next available flight and there was no loss. In so far as there was a loss, they were paid expenses up to £20. Anybody who did not fly got back the whole of the money.
Lord LEATHERLAND: My Lords, would it not be possible to refuse to allow people to cancel bookings and get back their money? That would ensure that while 141,000 would suffer, the 274 would be sure of getting their seats.
Lord JACQUES: My Lords, that is one superficial answer to this question. The position is that there have been several attempts to reach an international agreement on a penalty for cancellation. Those attempts have failed and if our airlines inflicted a penalty and the others did not, that would undermine our competitive position.
The Earl of ONSLOW: My Lords. what was the value of those 274 tickets which had to be refunded? How much extra cost did this bear in relation to the total ticket turnover of British Airways?
Lord JACQUES: My Lords, I do not have my calculator with me today.

AID TO SOUTHERN AFRICA
Earl COWLEY: My Lords, I beg, leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government—

(a) the total amount of British aid being given to nationalist movements in Southern Africa;

(b) which nationalist movements are in receipt of this aid; and

781

(c) what categories of aid are involved.

Lord GORONWY-ROBERTS: My Lords, in furtherance of our policy in giving support to liberation movements for peaceful purposes, we have made available £20,000 to the United Nations Save the Children Fund for help through liberation movements to women and children refugees from Namibia. We have also told SWAPO that scholarships and other educational assistance up to a total of £35,000 will be made available to Namibians. Apart from the liberation movements as such, we have made a contribution of £70.000 to the United Nations educational training programme for Southern Africa, by which Namibians and others can benefit. We have given £10,000 for the United Nations Fund for Namibia, again for training for independence responsibilities, and £5,000 to a special United Nations fund to be used for the establishment of the Institute of Namibia.
Earl COWLEY: My Lords, while thanking the noble Lord for that extremely full Answer, may I ask him to say what steps the Government take to ensure that these funds are used for humanitarian and peaceful purposes? Does he not recognise that the giving of such funds also releases other funds which can be used for non-peaceful and non-humanitarian purposes?
Lord GORONWY-ROBERTS: My Lords, to answer the second part of that supplementary question first, no doubt that is always possible, but we take very great care to impress on recipients that these grants are always for peaceful, educational and training purposes. On the first point, the noble Earl rightly asks whether we are taking every possible step to see that the purposes for which these grants are made are in fact the only ones. I can assure him that this is so. The grants are made through the agency of the Ministry of Overseas Development, through, in practically every instance, recognised United Nations organisations; and we do so in response to resolutions at the United Nations to which we are party.
Earl COWLEY: My Lords, is the noble Lord aware that the House cannot know whether the Government are taking all possible steps, unless we know what
782
those steps are? Will he therefore say what they are?
Lord GORONWY-ROBERTS: Of course, my Lords; it is by constant consultation with the organisations to which these monies are paid, in the vast majority of cases United Nations organisations, on which of course we have representatives. That, I think, is a reasonably satisfactory way of checking the direction and disbursement of these monies.
Lord WADE: My Lords, will the noble Lord agree that in all these cases these are humanitarian causes that are being helped? Furthermore, will he agree that in cases of this type the persons in need in these areas of the world would very often not be helped at all, if it were not for movements and bodies such as those to which this Government have contributed?
Lord GORONWY-ROBERTS: My Lords, the answer must be Yes to both points.
Lord BROCKWAY: My Lords, is the Minister aware that many of us deeply welcome the statement he has made? Is it not quite clear from that statement, first, that these grants are made through United Nations organisations which have that responsibility; and, secondly, that the only instance when they are made to a political Party is for educational and technical assistance which would not take place unless these grants were made, and therefore could not be at the cost of extending their expenditure for military purposes?
Lord GORONWY-ROBERTS: My Lords, my noble friend refers to the one grant which is made to such a political organisation, which is SWAPO, and that is a grant of £35,000 for scholarships and other educational assistance. We should, of course, prefer to direct that grant to a Government, but at the moment there is no such Government in Namibia. We hope that there will be one, but in the meantime SWAPO is the recognised central organisation representing the Namibian people.
Lord SEGAL: My Lords, may I ask the noble Lord to say whether the Government receive regular reports on how these moneys are being spent and, if so, from what source they come?
Lord BARNBY: My Lords, as the Minister emphasised the assurance that these gifts were made only when it was certain that they would be used for peaceful purposes, but later admitted that it would be difficult to survey them—I use the word "survey" as "police" is disliked—may I ask him to indicate whether the amount to be given to Mozambique, which is admittedly a Marxist State and a foreign country, as was admitted in reply to a Question by the noble Earl, Lord Cowley, would fall under one of the categories he has just described, when put through the United Nations?
Lord GORONWY-ROBERTS: My Lords, I do not think that the noble Lord quite caught the phrase I used. It is always possible, when we make grants for humanitarian purposes, that there may be misuse. To put it higher than that would be to tempt fate. But we take every possible step to check that this is not so, and we are pretty well satisfied that the measures which we take are effective. That brings me to the point made by my noble friend Lord Segal, which I very much take on board. I entirely agree with him. Perhaps we can have a word about this after Question Time. On the question of Mozambique, prior to independence we made a contribution of £300,000 to the United Nations High Commissioner for Refugees for the resettlement of refugees in Mozambique. We have not yet concluded an aid programme with the new Mozambique Government, but we shall presumably discuss that with them as soon as they have settled down after independence. The same applies to Angola, though a little further in the future.
Lord SEGAL: My Lords, I must apologise to the noble Lord, Lord Barnby. I was not looking in his direction when I rose. May I ask my noble friend whether regular reports are received as to how these monies are being spent, and whether these reports come from the United Nations or from the organisations concerned?
Lord GORONWY-ROBERTS: My Lords, I had it in mind to go into some detail with my noble friend afterwards, instead of dealing with all the steps and processes involved during Question Time. Briefly, it is through the United
784
Nations organisations concerned that we get reports, partly directly from our own representatives on those organisations, and partly from the published records and papers of the United Nations itself.
Lord DERWENT: My Lords, have we broken a record today? The first three Questions took 19 minutes yesterday, and today they have taken nearly 23 minutes.

STEVEN MEURS: ADMINISTRATIVE REVIEW
3.4 p.m.
Lord ELTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, following the findings in the case of Steven Meurs and the facts brought to light therein, they will set up a board of inquiry to establish the factors common to this and other cases of non-accidental injury to children and to make urgent recommendations for the improvement of procedures within and communications between the welfare and other public services concerned.
Lord WELLS-PESTELL: My Lords, I shall attempt to answer briefly. My right honourable friend the Secretary of State for Social Services shares the concern which is felt, I am sure, by all Members of your Lordship's House and all who have heard of the case of Steven Meurs. She welcomes the announcement by the Norfolk County Council and by the Norfolk Area Health Authority that they are to set up an independent review body to inquire fully into the matter. The Department will consider the report to see whether any particular guidance can and should be given.
Lord ELTON: My Lords, may I thank the noble Lord for that Answer and ask whether he is aware that he will have the support of the whole House, and, I believe, of all people of good will throughout the country if his Department will get together the results of the various committees of inquiry operating locally up and down the country on analagous cases? Does he not agree that it is beginning to appear that there are common contributory factors in these cases, and

785
that these could be alleviated if the Department or some other agency could correlate the reports? Does he not further feel that, from this correlation, administrative directives could go out which, without legislation, would begin to remove this appalling stain from our consciences.
Lord WELLS-PESTELL: My Lords, I am in complete agreement with what the noble Lord has said, as I am sure is the Department. This is a matter we must look at in the light of what has happened, but it would be wrong to assume that no directives have been sent out in the past. These matters continue and therefore they must be looked at afresh.
Lord LEATHERLAND: My Lords, does my noble friend feel that the last Government made a mistake in their reorganisation of local government when they abolished the self-contained children's departments and merged them into the much greater social welfare departments?
Lord WELLS-PESTELL: My Lords, if the question is directed to me personally, I am of the opinion that the last Government made a number of mistakes.
Lord KINNAIRD: My Lords, is the Minister aware that all Governments make a number of mistakes?

STATUTORY CORPORATIONS (FINANCIAL PROVISIONS) BILL
Brought from the Commons; read 13, and to be printed.

BRITAIN'S EXPORT PERFORMANCE
3.7 p.m.
The Earl of LIMERICK The Earl of LIMERICK rose to call attention to the vital need for sustaining and improving Britain's export performance; and to move for Papers. The noble Earl said: My Lords, in contemplating this vast subject, I am encouraged by the number of speakers who are to follow me who will be able to draw on specialist knowledge based on years of experience in a wide variety of exporting industries, from the invisible to the largest and most solid. It is one of the strengths of this House that such experience can be brought to bear upon topics of national
786
importance. Consequently and by a self-denying ordinance, I shall be saying almost nothing on my favourite subject of the Middle East because I know that my noble friend Lord Denman will be plugging that gap later on.
I count it an achievement to have persuaded my noble friend Lord Pritchard, who made such an outstanding contribution to the British National Export Council, to be tempted to make his maiden speech in this debate. I look forward very much to these and other specialist contributions and, in the meanwhile, I shall try to set an example of what I venture to urge on others by resisting the twin temptations of seeking to cover the whole waterfront and of turning this into a general economic debate. However, there is much to say and few chances to say it, so I do not promise brevity, though if shall endeavour to remain relevant.
Clearly, it rests with me, having had the temerity to raise the subject, to set the scene. My qualifications for doing so, such as they are, will serve also as a declaration of interest. Since 1958, I have been employed by one of our major international merchant banks, working largely on finance for overseas trade and currently much engaged in export construction projects. From the mid-1960s I have been concerned with overseas work of the London Chamber of Commerce, of which I am a Member of Council. Also, since last year, I have been President of the Association of British Chambers of Commerce, whose interests I have represented since January on the British Overseas Trade Board. Since 1968, I have been deputy chairman of the Committee for Middle East Trade, which was then an area committee of the BNEC and now fulfills the same function in relation to the Overseas Trade Board. During the past eight years, I have been privileged, in various capacities, to lead trade missions to nine different countries. There was an interlude from April 1972 until March 1974 during which period I was perhaps even more directly concerned as Parliamentary Under-Secretary of State for Trade. I then tried the patience of my noble friend Lord St. Aldwyn unusually high by visiting 23 countries in 23 months on trade promotional visits.
I shall divide my remarks this afternoon into four broad areas. These will be, what we sell, whom we sell it to, the terms on which we are paid and, perhaps most topically, the methods employed to promote or encourage further exports. First, however, it is necessary to say something about the very difficult climate in which our exporters are operating today. Mindful of my own warning about straying into general economic debate, I shall make only two preliminary points, starting with what must be acknowledged to be the vital one. It concerns the impact of the inflation which bedevils our whole industrial effort, specifically upon exports.
Speaking on 26th June at the inaugural meeting of the British Overseas Trade Advisory Council, Mr. Peter Shore pointed out that in the past year our rate of domestic inflation had far outstripped that of our industrial competitors and was still increasing while others had succeeded in lowering their rates. He ended with this warning:
"This is a situation which we just cannot allow to continue. If we did, it would kill our chances of export-led growth stone dead. More than that, we should price ourselves out of world markets with disastrous consequences for lobs and wellbeing in this country."
Those of us who for months have been preaching this message—not, may I say, of doom, but of the necessity to avoid doom—must rejoice that it is receiving such powerful endorsement. The fundamental point which eclipses all others—and I reiterate this with all the force that I can command—is that unless we can rapidly control our domestic inflation we shall cease in many overseas markets to be price-competitive. Sales which might have been ours will go to ever eager foreign competitors, and markets once lost are never easily regained.
My only other preliminary point is this. Evidently, a trade imbalance may be improved either by increasing exports or by reducing imports. Voluntary import saving is a worthy objective in many cases and fuel is an obvious example. But when it is urged—sometimes by those who should know better—that arbitrary import controls, basically designed to protect uncompetitive British industry, will at least help to solve our problems, then comes the time for some protests. There is no time to develop
788
the case in full—it was put, unanswerably in my view, by Sir Frederick Catherwood, the new Chairman of the British Overseas Trade Board, in an address to the Institute of Export on 13th May—but essentially it rests on our unique vulnerability to retaliation both by importers of our goods and by foreign lenders, on the unsatisfactory nature of any mechanism, at least so far proposed, on the inhibition to exports implicit on bureaucratic control over import components; and not least on the negative reversal of the benefits of international specialisation and the denial of consumer choice. I hope that this afternoon no one will advocate such self-defeating policies.
Let me now turn to the first broad topic of what we sell, and the undoubted need to sell more of it. The Prime Minister has urged us to give more credit for recent export performance. I have cheered with the best, but I can give only two cheers, having four qualifications which inhibit the third. First, although export values have risen, the volume has not—it actually fell by 2 per cent. in the three months to May, and as already recognised there is a strict competitive limit to our ability to offset static or falling volumes by higher prices. Secondly, the recent improvement in the visible trade balance is accounted for substantially by lower imports of fuel and industrial raw materials, upon which future exports themselves will depend. Thirdly, a survey published last week by the Birmingham Chamber of Industry showed that, by comparison with the previous quarter, almost one exporter in three reported export sales down. Even more seriously, these exporters said that export orders had declined even more sharply. They considered that only the depreciation of the pound kept them competitive, and over half of them believed that their profitability would not only decline, but decline faster than their level of turnover.
This leads squarely into my fourth and most serious reservation; namely, about the level of investment. These Birmingham exporters—and one hears the same story across the country—now express unwillingness to invest in capital projects in anticipation of the expected upturn in world trade in 1976–77. We know that there is considerable under-used capacity, in pockets, to exploit in the short term,

789
but we badly need more long term strategic investment in export industries. Are we likely to get it?
As a country, we are currently exporting 24 per cent. of our national product—I believe that last year the figure was even higher at 26 per cent.—to pay for our necessary imports. Incidentally, this percentage is matched by West Germany—Belgium has a higher percentage—but it is nevertheless double the percentage of national product traded overseas by Japan, and four times that of the United States. Therefore, it is to us of fundamental importance to get the balance right. During the boom of 1973 we faced the problem, perhaps for the first time since the war, of finding the capacity to make what we suddenly found the competitive value of the pound was enabling us to sell abroad, rather than struggling to sell what we made. The Government then urged in 1973as they are now urging in more difficult days in 1975, when our price advantage has disappeared—that export manufacturers should invest substantially. This is needed in order both to increase capacity and to secure some lasting benefit from the anticipated world trade revival, and to reduce unit costs by means of more efficient production.
I believe that the manufacturers' answer to this is quite clear and consistent. They will willingly invest when they see a reasonable prospect of doing so at a reasonable level of profit. However, expectations of profit have taken some substantial knocks in recent months—first over oil prices and escalating commodity prices; followed by controls over domestic selling prices, by increased stock and financing costs, and especially by wage inflation. For a healthy export industry, upon which a healthy economy substantially depends, it is essential that the private sector should be able to achieve a satisfactory return on invested capital. Apart from the obvious question of profits retained for reinvestment, if the level is too low there is no security for bank borrowing and no hope of raising fresh equity or loan capital from the market on terms which are not unduly onerous.
Whatever we seek to sell abroad, it must be at a competitive unit cost. This is the measure of productivity. And on this vital issue of industrial productivity one
790
must feel deeply concerned for the future. We rely almost entirely on imports of raw materials for our industry, but latterly the decline in our relative efficiency as converters and adders of value has been revealed by the large increase in imports of finished goods. The stock answer is that we should devote more resources to products of the higher forms of technology. The problem here is that the development costs and the risks of commercial failure are enormous, while success demands larger markets than we can readily command; witness, my Lords, the post-war history of our civil airframe and aero-engine manufacturers, most recently Concorde and the RB.211 engine. Unless my eyes deceive me, the noble Lord, Lord Beswick, is today wearing his Concorde tie; I might have thought to wear mine.
Our alternative is the indirect one of the export of the technology itself which, in some sense, is equivalent to selling the seed corn over the hedge. Lacking, as we do, both natural resources and the ability to generate sufficient capital to exploit our own skills of invention and conversion, we shall, unless we increase our productivity very substantially, be forced back increasingly into the role of intermediaries. The continuing contribution made to both national and international welfare by the City of London is the best example that this role is neither unworthy nor unprofitable, but it is hardly enough to provide a rising standard of living for almost 60 million people.
It is now time for me to take a look at invisible exports—the sale of services to overseas customers. Again, this is a subject dear to my heart, but I shall say very little about it because others, I know, will contribute later, and also because, happily, the record is one of steady success. We must recognise that invisible exporters benefit most from sterling devaluation, both because there is a negligible import content in what they sell—so their sterling prices gain in competitiveness—and also because such of their earnings as are payable in foreign currency become worth more in sterling terms. My sole points, therefore, are of caution. Net invisible exports are currently worth to the balance of payments £130 million a month, in excess of £1,500 million a year. It is vital that

791
these earnings be sustained, and indeed increased, and the 1974 report of the Committee on Invisible Exports—published, coincidentally, today, and recommended as the most cheerful reading on the economic scene—highlights the remarkable success of the City of London and other invisible exporters in retaining confidence during that difficult period.
Let me point to just one fact which I see the Financial Times has already picked up. According to Bank of England statistics, about half of the surplus of the oil countries for 1974—which amounted to between 50 and 60 billion dollars—was invested short-term in New York, London and a few other major centres. Of these deposits, London received four times as much as New York, mainly in Euro-currencies. This is a measure of what we would lose if the City of London declined as the world's main financial centre, which brings me to my caution.
London is a centre not only for our own financial institutions, but for branches and associates of international financial institutions across the world. Without them it cannot continue its success. There are more American banks represented in London than in New York City. Last year, the rateable value of premises within the GLC area increased by a factor of 2·5 per cent. Yet within this average the rateable value in the City of London increased no less than 4·7 times. I am not talking only of the obviously devastating effects on the profitability on domestic business but that there is nothing to stop international institutions from moving their European operations to Paris, Frankfurt, and Zurich and, faced with such penal increases, several are talking of doing so. It would be madness for the policy of the Department of the Environment—and it is their policy and not that of the City Corporation or the GLC—to drive these institutions out because the Treasury will be the chief mourner if they go. If the golden goose is too hard pressed, she will fly away and lay her eggs on the Continent.
Before leaving the topic of what we sell, one should ask where the scope for increase lies. Obviously, we should reinforce success by selling more of what
792
we currently sell into existing markets. It is a matter of record that 64 per cent. of our visible exports are accounted for by the 200 largest export companies and no less than 55 per cent. by only 100 companies representing an enormous variety as well as enormous volume of goods. A good deal of this volume is in areas where the competition is fiercest—major construction contracts, machine tools, automotive equipment, arms sales and so on. These are handled by specialists with generally sophisticated sales staff who have been in the game for a long time and whose success is likely to depend more on price competitiveness, the capability of their factories to give favourable deliveries and the ability to quote favourable credit rather than it is upon identification of new buyers. Thus, while the volume of these exports is naturally vulnerable to general economic conditions, there is relatively little that is new to be said about them.
Often, though, it is difficult for these established exporters, whose voices are naturally most often heard in trade promotion circles, to appreciate how daunting it is to get into the export business for the first time. I believe that there is considerable scope for initiating the sale overseas of products which hitherto have been sold only domestically—and I am not talking only of the small firms. It is interesting to note that large and small firms have a similar overall percentage of export to domestic sales; so that the potential exists throughout British industry. But to get into exporting demands positive commitment. Half-heartedness, or withdrawal after a few months, is damaging to Britain's overall reputation as a trading nation.
There is an almost infinite number of first-rate products whose manufacturers have never tried to sell them overseas for a variety of reasons; most commonly perhaps from the feeling that they lack knowledge of export procedures. Such potential exporters can be enormously helped by local chambers of commerce and export clubs as well as by regional exports officers of the Overseas Trade Board and by the central mechanism of Export House, once they take the plunge and get in touch. Nor should the scope be overlooked for selling through the medium of established export trading houses which have an overseas turnover

793
of some £2,000 million per annum and to whom the intricacies of export documentation are a matter of daily routine.
Once the plunge is taken, the water overseas often turns out to be more agreeable than expected. Firms wishing to expand their exports can also profit from overseas selling missions organised by chambers of commerce, trade associations, export clubs and the like. They benefit in three ways: by travelling and exchanging ideas with experienced exporters; through the aid of our overseas trade representatives in organising a programme which has their products in mind and, in approved cases, by receipt of a subsidy on their travelling costs. I should add a word of caution that it is increasingly felt that the days of the horizontal or general selling mission are over, except in exploring territories into which Britain sells relatively little. Greater impact now is made by specialised missions concentrating on areas known to fit the buying programme of the country concerned. This formula also enables local commercial staff to arrange a far more effective programme.
Naturally, we supply the highest percentage of the import needs of these countries with which we have the closest past associations where the bonds of language, education and sentiment give us a natural selling advantage. Conversely, we find the going is harder in areas such as in Francophone Africa where these advantages are enjoyed by others. Increasingly the destination of orders is governed purely by commercial criteria sometimes reinforced by a positive desire to diversify away from overdependence on a single national source of supply. There are many success stories of British products penetrating unlikely territories against the trends, given a good product and an enterprising sales approach. There are some lovely stories.
Your Lordships may have seen a few weeks ago the announcement of the incredible export award for 1974. Selling sand to Arabia is old hat. The 1974 award went to a firm who is selling tom-toms to West Africa and maraccas to Caraccas. In the same vein, in March I was asked to give the awards to the smaller exporters and there were some beautiful instances of what I mean. Chatting afterwards to the entrepreneur behind one of these companies I asked what was
794
the total of his staff and he said: "Including the driver and the gardener, there are seven; and they are all in it."
My Lords, I wish to make two quick points under this heading. The first is that the more unfamiliar the territory the greater must be the initial reliance of the British exporter on official information and guidance, especially on the ground, from commercial officers. The need for such services is in some way inverse to the past British success. Secondly, there is no need to have a sales organisation covering the world in order to export successfully. Many success stories have arisen from specialisation, from building really good outlets in only one or two territories. This theme of concentration of sales effort was recently highlighted in a detailed report for the BETRO Trust suggesting that in many cases total sales overseas would benefit from coverage of few markets in greater depth.
Of course, the relative attraction of different markets changes. Currently, the major new potential lies with the oil-producing countries and in triangular deals matching their surplus funds with British technology and knowledge of third markets. To the OPEC countries, Britain's exports increased, 1974 over 1973, by 46 per cent. During that same year, the USA was up by 86 per cent., Japan by 100 per cent. and Germany by 79 per cent. Our main rivals were forging ahead faster than we. Japan and the USA were already well ahead. We were overtaken last year by France and Germany; and Italy is closing the gap. But I want to bring this up to date and to pay tribute to efforts subsequently; because if we compare the first quarter of 1975 with the first quarter of 1974, the picture is this. British exports to OPEC countries are up by 120 per cent. which—although exceeded by 131 per cent. for Japan—is now fully abreast with and, indeed, overtakes the 104 per cent. for USA and the 105 per cent. for Germany.
My Lords, so far I have looked at questions of commercial opportunity and judgment. As soon as we turn to questions of payment terms, however, we tend to find that Government policy is increasingly important. The first and obvious area is export credit. I should here like to say roundly that, however much it may be criticised when it fails to

795
meet the full expectation of exporters, undoubtedly we have in the Export Credit Guarantee Department the best credit agency in the world. Certainly this is the view of those of our foreign competitors who should know something about the competition. For almost 50 years it has built up an armoury of new instruments, after leading the field, and has maintained its commercial underwriting integrity.
We have to remember that export credit cover beyond providing insurance against default in payment by the foreign buyer, is the key to special medium-term financing arrangements from banks. These credits are provided at a fixed rate of interest. Nowadays it is also a subsidised interest rate. The importance of this mechanism is of course that the Government control the rate at which banks may make medium-term export finance available under ECGD guarantee. The Government thus are also in a position, through restriction or withdrawal of credit insurance on political rather than commercial underwriting grounds, to control the availability of such credit even though there is no export/import bank which provides the funds direct. It is of fundamental importance that both exporters and our foreign customers should retain confidence that cover will not be restricted on political grounds.
Hitherto, those arranging to use export credit have not had to concern themselves unduly with the quality of their credit. "How much can I have?" "For how lone?" "At what price?". These have been the basic questions. The question of quality now has a new meaning. The buyer is concerned about the currency in which he is being asked to pay. It is a sad fact that, "You can pay in sterling", is currently one of our major selling points where substantial credit periods are involved, and many of us have a lingering suspicion that for the past ten years, during which our export interest rates have been relatively low, we have often been selling credit as much as selling goods. It is evident from a national point of view that to offer credit for five years and more at a subsidised rate in terms of currency likely to depreciate relative to that of the buyer represents a massive discount on a cash selling price before even considering any
796
further subsidy implicit in an indemnity for cost escalation. As one who has been engaged in assisting British exports by arranging such credits, I am naturally reluctant to suggest a restriction when competition demands that we match fully the terms offered by our rivals, but obviously there is a limit to what nationally we can afford to do. May I draw attention to another option, which is that of invoicing sales in the buyer's currency rather than in sterling. In the case of strong currencies, for which a forward exchange market exists, it can assure the exporter of a fixed benefit.
I turn finally to export promotion and the methods which may be employed to promote or encourage further exports. Let me say at once that I am making no demand for complicated, costly or contorted new Government services. Indeed, I have some concern, despite the current British inflationary problem in securing longer-term business in the face of fixed price competition, that we have already gone too far, especially in devising that subsidy to major foreign buyers which is politely described as "cost escalation insurance". Before I am accused of disloyalty or worse, may I make it clear that the advice given to and accepted by the Government to adopt this scheme was formulated before I joined the Trade Board, and I have never disguised my personal dislike of the scheme on two grounds. The first is that just as one can subsidise the price of bread and then declare that the rising cost of living matters less, so one can subsidise exports, and having also removed the discipline of a fixed parity by floating the currency, can then be persuaded that there is less urgency in dealing with the fundamental problem of an inflation rate higher than that of competing countries. It cannot be too strongly stated that such a form of export promotion is merely a palliative, whereas if the inflationary disease were cured the need for the subsidy would disappear as exporters pursued their profitable opportunities unassisted.
Secondly, I am uneasy because, for the first time since the introduction of this scheme, along with other recent proposals for insuring pre-shipment finance and also recourse liabilities on major contracts, ECGD is being asked to administer policies written other than on sound underwriting criteria and its commercial

797
independence is thereby diminished. Difficult times demand stern measures, so I shall say no more on that; but we must beware of going too far. I am glad to learn at least that it is proposed to keep the accounting for these new schemes quite separate from ECGD's traditional commercial underwriting.
Before I sit down I must say something about the function of the work of the British Overseas Trade Board. It is, I believe, winning more friends, but it still has critics. The first group consists of those who gave their time to the predecessor body, the British National Export Council, who disliked the fact and the manner of its demise, and who find it hard to think well of the successor body. Being myself an old BNEC man, as are many others on the BOTB, I sympathise but can only affirm that now the new regime has settled down we find our new involvement equally worth while.
The second group criticises the Board for sitting somewhere between Whitehall and private industry, yet belonging to neither. In so far as it may still be failing to relate effectively to either, then the criticism must be accepted. But the very concept of the Board is to operate as the link between the two and the criticism betrays a misunderstanding. The BNEC gave advice to Government on matters needing action by Government. The BOTB can give advice no less forthright, but based on direct Whitehall briefing as to facts and options. And unlike BNEC, the Board is an executive body concerned with making the best use of budgeted Government spending of £13·4 million on direct export services, which rises to over £38 million a year if all related salaries are included. BNEC never claimed perfection, but it was very good, thanks largely to those like my noble friend Lord Pritchard, who devoted so much time and effort to it and made it work so well. The Trade Board is different and may arguably be more effective in today's conditions. At least it is now attracting comparable support.
The last group of critics considers the Board to be simply irrelevant to exporting. I suspect that few of them are aware of what it does. This in itself is valid criticism and I can now confess my own misgivings about the original "low profile". The Board is now raising its profile consciously and considerably,
798
being determined (and eschewing exhortation) to make its many and varied services better known. Its own membership has been strengthened, and a primary purpose of the creation of the British Overseas Trade Advisory Council, which held its initial meeting a fortnight ago, is to strengthen links with the Board's own area advisory committees and with other representative bodies themselves active in the export field, such as the Institute of Export.
Here is a challenge. At the other end of this bridge of communication about export services and export opportunities lie the companies, substantially private but public sector also, which must win and execute the export orders. I believe that all of us with responsibility for industrial management or the provision of export services have a duty to explain much more clearly than hitherto to all concerned—and I mean all, including shop floor packers, typists and documentary clerks, any of whom can frustrate promising business—just what is involved, personally for them as well as for the country, when export business is secured. And perhaps even more, to explain what is involved if it is consistently lost. We need a much broader commitment to succeed. This could be the foundation for confidence to make vital investment.
I am reinforced in this comment by the knowledge that my noble friend Lord Redmayne, had he not been obliged to withdraw from the debate for very topical reasons, would have stressed it also. Some firms already send shop stewards on visits to their export markets. It is the intention of the Trade Board to seek substantial shop-floor involvement in its forthcoming regional export conferences. And at the national level, bodies like the Overseas Trade Board (whose new chairman Sir Fred Catherwood has self-evident credentials) and the Association of British Chambers of Commerce could and should contribute to longer-term constructive planning through membership of NEDC.
I have one final question, my Lords. What innovations could or should the Government undertake to bring about export growth? Organically, some would advocate an Export-Import Bank rather on the lines of the United States model. Personally, I am unconvinced that Government involvement in the provision of

799
export credit would offer any new benefit and perhaps the implications for public borrowing are unlikely to be appealing just now. Then there are advocates of sweeping change in Ministerial responsibility for export, particularly for the creation of a Ministry of International Trade, as in Japan. The noble Lord, Lord Kissin, has been kind enough to write to me putting a detailed case about this, and, lacking time to do it justice, I should like to send the letter to the noble Lord, Lord Beswick, for his consideration. This is an option which should clearly be kept in mind, but my own verdict currently would be "not proven".
What Government alone can initiate—and I make no apology for stressing this—and what Government must do urgently, with the broadest possible support from all responsible groups, is to push through the tough measures necessary to control inflation and create confidence associated with a steadily, albeit slowly, expanding economy so that exports become self-promoting. No task is more important today. My Lords, I beg to move for Papers.
3.41 p.m.
Lord BESWICK: My Lords, the noble Earl was good enough to remind us of his exceptionally wide experience in the export business, and his knowledge puts us additionally in his debt. He made some most useful and constructive suggestions in the course of his speech. They certainly must be considered by the Department, and I imagine that they could be profitably studied by potential exporters. I am grateful to the noble Earl for moving this Motion, because it gives me an opportunity of paying tribute to British exporters for the contribution they are making to the national economy. The noble Earl at the outset was, I thought, inclined to be a little gloomy, but the exporters have helped us to achieve a major and welcome improvement in the current account deficit.
The noble Earl was concerned to put the story, as he said, in perspective, and since it is an encouraging story in perspective perhaps I may start a little earlier. In 1974, in the aftermath of the three-day week and the burden imposed by the rise in oil prices, the visible trade deficit soared to over £5 billion. Nearly half this deficit was the direct result of the
800
deterioration in the oil trade deficit, but rather more than half was a deficit on trade in other goods. The 1974 deficit resulted from a 17 per cent. worsening in the terms of trade, only partly offset by a 7 per cent. rise in export volume, as compared with a 1 per cent. rise in import volume. But during 1974 there was a marked slow-down in the rates of increase in import prices as the growth in world commodity prices abated, and a lower level of domestic activity resulted in a gradual decline in the volume of deliveries. Export prices, on the other hand, continued to surge ahead, leading to an improvement in the terms of trade from around the middle of the year.
In 1975 the picture has further improved. In the three months to May, the lower oil deficit and a much improved position in non-oil products helped cut the overall deficit on visible trade to £424 million, less than half the deficit in the previous three months and well under a third of the deficit in the final quarter of 1974. This trend in the volume of exports has held relatively level, despite the general recession in world demand, while the volume of imports has fallen away rapidly. Coupled with this has been an improvement in the terms of trade: export prices have risen by 4½ per cent. against an increase of only 1½ per cent. in import prices.
As the noble Earl said, our export trading pattern in recent months has been marked by the lack of growth in deliveries to the developed countries. This reflects not a lessening of effort on our part but a depression in most of those markets. But a turn-round has been achieved in our trade with the oil exporting countries where, in the first five months of this year, our exports covered nearly two-thirds of our imports. This has been partly due to a fall in oil imports but also to a very welcome rise in the value of exports of more than 120 per cent., as compared with a year earlier. I think the noble Earl said that the Germans had done even better, but if we take the quarter upon quarter position he will see that in the first quarter this year we have just surged ahead of the Germans in percentage growth.
I cannot conclude a review of export performance without paying my tribute to our invisible exporters. As the noble

801
Earl said, it is a record of steady success. In 1974 there was a surplus on invisibles of nearly £1,500 million, as compared with the £1,200 million in 1973. Despite difficult trading conditions, the surplus this year is estimated to be running at around £120 million a month. These efforts, in which the noble Earl has himself taken part, deserve to be recognised and applauded.
The trend, therefore, is satisfactory. Last year our current account deficit was nearly £3,800 million and in the last quarter of the year it was just over £1,000 million. In the first five months of 1975, the deficit was just over £400 million—less than a quarter of the total for the same months of 1974. This is a substantial achievement, but I absolutely agree with the noble Earl that whatever satisfaction we might get from this recent achievement, we cannot afford complacency about the future. In the period ahead, the growth of our exports will turn critically on the recovery in world trade. Given the scale of the reflationary measures taken in the United States, the recovery there should shortly be under way. The expansionary measures taken in West Germany. France and Japan, though fairly modest, should also help.
Lord HARMAR-NICHOLLS: My Lords, may I intervene to make a point regarding our export potential. The noble Lord has just paid a very deserving public tribute to the invisible income in terms of our earnings. Could he use the influence of his Department to try to persuade the Treasury not to put so many obstacles in the way of what they call "unearned incomers"?—because it is they who provide the invisible exports to which we are now paying tribute.
Lord BESWICK: My Lords, I shall certainly note what the noble Lord says. I was going on to say that there is reason to expect that the growth in world trade, in our view, will begin to be rapid after about the turn of the year. There is no doubt about the potential capacity of manufacturing countries, but we can also expect the imports of the oil producing countries to remain the fastest growing element in world trade for some time yet. Our ability to take advantage of these opportunities will depend, as ever, on the design production and marketing of competitive goods and ser-
802
vices. There will be a particular need to adjust further to the substantial shift in the pattern of world trade, though this must not involve a lessening of effort in major traditional markets, including the rest of the European Community. All will agree with the noble Earl that there is much to be done at home before we can be properly equipped to meet this challenge ahead.
I agree with the noble Earl unreservedly that the overriding need is to curb inflation. This is central to all our economic problems. It undermines business confidence, affects investment and employment, has a direct and damaging impact on our competitiveness, and constitutes the most important single threat to our export business. Our customers have no wish to import inflation and generally have the remedy of buying from alternative sources. There are limits to the possibilities of offsetting the effects of inflation by escalation insurance schemes which, welcome as they may be to some, are, as the noble Earl said, essentially palliatives.
Even continued depreciation of sterling, were it tolerable on other grounds, is not a satisfactory answer for exports. It adds to the uncertainty about forward prospects and directly increases the cost of many essential materials and components. We all have a duty to support and share in the fight against inflation. Accepting the inescapable need to stem inflation, what more has to be done? If we are to exploit the trade recovery, we must also ensure that the necessary physical capacity is available to deliver the goods quickly. We have not done this in the past. Now is the time to make selective investment if future opportunities are to be used to the full.
Our case for the Industry Bill, for which I shall invite a Second Reading tomorrow, is that the National Enterprise Board and the operation of planning agreements will help get our industrial effort on to a more competitive base.
Lord HAWKE: My Lords, may I ask the noble Lord one question? The noble Lord is anticipating a trade boom in a year or so. In previous trade booms we have always been caught napping, because the raw materials were not in this country; they were abroad, and as the boom progressed we had to pay higher

803
and higher prices for our raw materials. Is there any method of anticipating the trade boom by buying the raw materials which are now at rather low prices?
Lord BESWICK: My Lords, I know there are companies in the country which are not unaware of the difficulty to which the noble Lord refers. I was going to say what I thought ought to be done, but I am bound to tell him that I do not have a special note of that. It is a useful point and I will see that it is considered.
In the meantime, the Chancellor has recognised the difficulties facing companies and has taken practical measures to alleviate them. In part, this is an answer to the point put to me by the noble Lord, Lord Hawke. For example, the stock appreciation relief scheme, which will involve total transfers to industry of about £3·8 billion, of which £1·3 billion will be available in this financial year, will be helpful. In his April Budget, the Chancellor also announced that £100 million would be made available for selected industrial investment projects and this measure should generate additional investment by industry of some £500 million to £600 million. But as well as the volume of investment, higher additional output for each increment of resources devoted to manufacturing investment is both possible and necessary. I hope to say something more about that when we consider the Industry Bill tomorrow.
Another requirement is that output should not again be limited in vital industries by shortages of skilled labour. This is a point to which my attention has been drawn more than once as I have travelled about the country. There is a tendency for firms to reduce training levels during a recession, and in his April Budget the Chancellor therefore allocated an additional £20 million in 1975–76 and r30 million in 1976–77 to the Manpower Services Commission, for the purpose of accelerating the growth of the training programmes of industry and of the Training Services Agency. Overall the best form of assistance to exporters is the creation of a healthy industrial and commercial sector, but there is a valuable contribution to be had from Government sponsored export promotion services. In certain markets, as I think the noble
804
Earl recognised, including the oil producing countries, official assistance to exporters has become particularly important.
The British Overseas Trade Board, of which the noble Earl is a member, directs a very wide range of services and overseas promotions for exporters provided by the Department of Trade. It ensures that in the development and management of its services, officials of that Department, whose task it is to administer the services, have the backing of an experienced body of businessmen. It is able, too, to draw on the experience of a large number of other businessmen who serve on the Board's area advisory groups which cover virtually all the markets in the world where Britain trades. Much store is set by the two-way traffic of information and ideas between Government and industry.
The Secretary of State for Trade has recently extended this area of consultation and discussion by the creation of an Advisory Council, which consists not only of members of the Board and the Chairmen of its area advisory groups, but also representatives of various other bodies concerned with our export performance. The TUC, the CBI, the ABCC, export clubs and a number of other national and regional bodies are among those represented on the Council. In addition to holding regular meetings, members of the council will be available to the Department of Trade and the Board to give advice on a day-to-day basis and to take part in various export promotion activities from time to time.
In the current financial year, the BOTB's direct budget will total just over £14 million, over 85 per cent. of which is on support for industry in overseas promotions. Last year, the Board's staff were in contact with some 15,000 British exporters and answered over a quarter of a million inquiries about overseas marketing conditions. This year demand has risen strongly, and is running at some 50 per cent. above the level of a year ago. This appears to confirm what the noble Earl said and is convincing evidence that industry attaches value to BOTB services, and of industry's current determination to seek and obtain additional export business.
The Export Credits Guarantee Department's support to exporters is equally

805
well known and valued. It remains Gov ernment policy that the general package of facilities available from the ECGD should stand comparison with that avail able to exporters in our competitor countries from their credit insurers. The ECGD currently provides credit insur ance for some 36 per cent, of United Kingdom exports. During 1974–75, the ECGD insured exports to a total value of £6,535 million. This was an increase of 36 per cent, over the level of exports insured in the previous financial year. More satisfactory still was the 42 per cent, increase in insured exports on cash or short credit terms.
It remains our intention that the sup port offered by the ECGD should be flexible and that, where this can sensibly be done, it should be adapted to reflect changes in the competitive world of exporting. In the last few months, the ECGD has introduced two new facilities; first, a form of protection against the effects of high and unpredictable cost escalation; and, secondly, cover to support performance bonds for cash or near cash contracts. While accepting what the noble Earl said, that these schemes are no substitute for con trolling inflation, they provide a welcome form of assistance to exporters. This has been amply shown by the demand from exporters for these facilities. Both schemes will be kept under review and the contract value guideline for ECGD support for performance bonds was re cently reduced from £20 million to £2 million.
The introduction of these schemes has especial relevance to major overseas con tracts in oil producing countries. Much of this business is under Government control or influence and inter-govern mental co-operation is of the utmost importance to the business effort. The Secretary of State for Trade has him self travelled widely in these markets to inform himself at first hand of the range of opportunities and the scope for Government help. We have also regarded as a priority the strengthening of inter governmental relationships. In appropriate cases we have set up joint com mission arrangements, on the lines of those which have operated successfully in recent years with the USSR and Eastern Europe, with Iran and Egypt,
806
and we are negotiating similar instruments with a number of other countries. By close relations with other Governments and joint working between our own Government and industry, we aim to identify and create new opportunities for British industry and to monitor closely the progress of projects in hand or which we hope to develop.
Changes have also been made at home. A new division specifically for the Middle East has been created in the Department of Trade to co-ordinate the official effort. Changes have also been made to the organisation of the overseas project group of the BOTB which should give it more impetus and enable it to work more closely with industry, particularly on the increasing number of projects where the overseas customer is looking for a single British bid. We are also seeking to harness more effectively the experience and expertise in the public sector. We see an extended role for these organisations in assisting, or even leading in certain cases, the British effort to win major contracts.
To summarise, we can look back with some satisfaction to the recent achievements of our exporting firms. They have given us a base from which we can do more, both to seize the immediate opportunities in the OPEC markets and to meet the challenge of the revival of world trade. There are formidable, but by no means insuperable, problems to be over come, but with co-operation at home and abroad between employers, employees and Government we can solve them. Above all, we shall need to solve the problem of inflation. But, given confidence that we are moving towards a stable currency and given the full utilisation of our national skills, we can more certainly assume the improvement for which the noble Earl asks in his Motion.
4.3 p.m.
Lord CARRINGTON: My Lords, the Motion of my noble friend is welcome. Doubly welcome, I think, is the well-informed speech with which he introduced it. The noble Lord speaks from great experience of these matters and had a number of constructive suggestions to make which I hope the Government will take into account in the future when thinking about and reading this debate. Welcome, too, is the decision of the noble Lord, Lord Pritchard, to take part in this

807
debate. He has had, and is having, a very distinguished industrial career. In addition, he has made a particular speciality of exports and of being concerned in them. The House is very lucky to have in my noble friend a new recruit who is so well qualified to take part in this debate.
The whole House appreciates and accepts the need for increased exports if this country is to survive in an increasingly competitive world. Indeed, there is nothing new about us accepting that. In earlier Elizabethan times Lord Burghley once said,
"Nothing robbeth the wealth of England but when more merchandise is brought into the Realm than is carried forth".
And so say all of us! The difficulty, however, about such a Motion as that of my noble friend is that, when one is asked to discuss anything so self-evident, the debate is inclined to deteriorate into a declaration by all concerned of a belief in goodness, beauty and truth. We are all against sin. I am not at all sure that there is a very great deal more that the Government in their own right can do to help in the matter of exports. They can put a number of obstacles in the way of exporters, but the positive steps which they can take are fairly limited. All Governments, therefore, should beware of taking upon themselves the credit for increased exports. That is not to say that we as a country have reason to be totally dissatisfied with our export record since the war. Compared with many of our neighbours, I should not have thought that our performance has been bad. On the contrary, in some fields it has been very good. The difficulty is that we need to be better—and much better—than most of our friends if we are to increase our standard of life.
I said that there are certain areas in which the Government could actually impede exports; and there is no doubt whatever—as, indeed, we have all said—that the most important factor at the present time is the incidence of inflation upon our competitiveness. This is not the occasion for an economic debate, but the recent good export figures which are due in part to the fall in the cost of raw materials will undoubtedly fall away as the inflationary pressures in this country—notably labour costs—take effect and
808
price us out of the market. Everybody so far has said that, and no doubt everybody will say it in this debate.
It would not be too much to say that our economic future depends upon the success of the Government's measures, which I understand will be announced later this week. If they fail to curb inflation, if they fail to reduce the percentage increase in wages, then no exporter, however able, however competent, can be expected to compete. The Government must also have some regard, although the balance is obviously difficult, to the maintenance of a sufficiently buoyant home market, both to enable investment for the future and to encourage exporters. There can be very few companies which can live by exporting alone, although there can be very few which, if given the right climate, cannot export more.
It is right to comment here upon one area of our exporting record. When one examines the figures it is very significant that one sees that credits on invisible account rose faster between 1964 and 1974 than exports of goods. For example, in the last quarter of 1974 invisible trade credits—which includes interest, dividends and profits—amounted to 63 per cent. of the total value of our goods. Too frequently, I think, action to improve the export of goods is inclined to act adversely on invisible earnings in which Britain still retains a comparative advantage, and because they are invisible people seem to forget about them. Certainly, credit is not given sufficiently to those activities which make up our invisibles. For example, last year invisibles were responsible for £2,700 million of our exports, and of this over £700 million was due to the City.
I believe that there is one way in which possibly the Government could help rather than hinder. For example, the Government could help by not introducing Bills like the Policyholders Protection Bill, which in its original form would have had serious disadvantages to the insurance industry. Incidentally, thank goodness for the House of Lords! But on the positive side there might be something to be said for bringing the overall sponsorship of invisibles under the aegis of one Minister; at the moment there are, I think, at least two. The Committee for Invisible Exports made

809
this suggestion, but I do not think that there has been any response to it.
Generally speaking, however, the Government are inhibited from taking positive action to help exporters by the various international agreements to which we are party—GATT, the European Economic Community and so on—and it would not be right for us to circumvent the obligations into which we have entered. Perhaps it is not entirely irrevelant to suggest that there are others who seem to be a good deal less delicate than we are in their approach to their obligations. I know that this is difficult to prove but I have a deep-seated suspicion that there are countries which, if not actually contravening their obligations, are certainly going very near the bone. It is always galling to be the good boy when a number of others seem to be the bad boys. The sanctions policy in Rhodesia seems to be a related point.
One thing we could ask the Government to do is to examine very closely those classes of imports from those countries which we suspect. Motor cars and textiles are two possibilities. We have a right to an assurance from the Government that they take this matter seriously, and however difficult it may be to prove these allegations they should inquire very carefully into them if there is any suspicion of contravention. If, as I think probable, our export performance slips during the latter part of this year, partly because of inflation and partly because recently our good balance of trade has been helped by destocking, by the mild winter and by the fall in imports due to the recession in this country, there is an even greater need than usual to encourage exporters.
I remember nearly 20 years ago when I was High Commissioner in Australia, there were far too many cases of British businessmen relying upon the traditional market and descending, as it were, from above with an attitude, if not of condescension, certainly of "take it or leave it", and that was, of course, an attitude which derived from our imperial past. Until 25 years ago we did indeed have a captive market in countries which, if not obliged to buy from us, were at any rate in some difficulty in doing anything else. Of course that was very agreeable. A captive market is splendid; not
810
only do you not have to worry too much about the quality of your goods but you have an assurance of production which makes life easier for all concerned. But that era ended a long time ago and I do not believe that the sort of attitude which I encountered from time to time in Australia now exists. There has been a considerable shift in attitude.
Harold Macmillan once said that exporting was fun and that was one of the few remarks he has made with which I profoundly disagree. Exporting is not fun. In some cases it is very hard work and, in some cases, it is not as profitable as selling in the home market. But the fact remains that over the years, due to successive Governments, public opinion and industry generally have come to realise the need to export. But despite this realisation I sometimes wonder whether British firms are as aware of the need for high-class representatives abroad as are our competitors, or are prepared to send their representatives for sufficiently long periods to countries where contracts might be available to make the necessary contacts and to familiarise themselves with the problems of that country.
I remember on a recent trip abroad one British Ambassador told me that, in the country in which he was, only one British company—and I will name it, since let us give credit where credit is due and I am not in any way connected with it; it was Guest, Keen and Nettlefold—had sent men of sufficient standing for long enough periods to ensure the winning of contracts. The Ambassador went on to say that in too many cases British companies sent representatives for a very short period who were not of the seniority required to deal with Government Ministers or the functionaries who play such a large part in the placing of contracts in so many countries abroad.
When talking the other day to the export director of a company of which I am a director, he told me, naturally, that he placed the very highest priority on sending exports sales managers out into the world market to generate business and he said that he never expected to see more than 20 per cent, of his export managers team at their desks in London on any one day. He went on rather ruefully to say that this was an extremely expensive

811
business and that there was one thing the Government might consider doing. I will ask the noble Lord who is to reply whether he will be good enough to pass on this idea. He understood the purpose of outward missions which are, I think, sponsored by the Department of Industry for those who are eager to establish themselves in export markets, but for those who are already established in export markets he thought it would be much more useful that there should be some sort of Government travel assistance which would reimburse companies, say, half the annual expense which is incurred in the effort to seek a higher level of export sales. I think it would be generally agreed that it would be wrong if the cost of travel for the export management team were to be the inhibiting factor because of the depressing effect of profit margins which now exists in British companies. Better quality men, more frequent and longer visits are, it seems to me, an essential element in our export drive.
I read a very convincing pamphlet the other day in which it was argued that investment in several hundred export salesmen would, in fact, be more effective than a 12 per cent. devaluation, and of course with none of the adverse effects that devaluation brings. To some of us who travel a good deal, either on politics or on business, it is sometimes a puzzle—and the noble Lord, Lord Beswick touched on this—that there are products from Britain which it is almost impossible to obtain abroad. Of course one knows about strikes and about difficulties in regard to delivery, and all that is greatly to be deplored, but may I take one example of a company which has recently been in the news, British Leyland. Land Rovers, Range Rovers, Jaguars, could be sold in very large numbers, if they were available, almost everywhere in the world and yet people cannot get them. I cannot believe that the reason why they are unobtainable is not, at any rate, in part due to the lack of investment in production facilities and a lack of foresight. In this country for whatever reason, whether it be lack of cash or lack of confidence, it is sad to see opportunities of this kind wasted when we have products unrivalled in the rest of the world, and I am afraid I must tell the noble Lord, Lord Beswick, that I am yet to be converted to the idea
812
that the Industry Bill and the NEB will help in this respect.
But if one looks at exports commodity by commodity it is noticeable in this field of transport industries that they have done comparatively badly; for example, if you look at the figures for them and for the chemical industry. It is equally true, as has been said, that exports to the Middle East, though showing a considerable percentage rise are nothing like so dramatically increased as those of Japan, the USA and Germany. I was glad that both my noble friend Lord Limerick and the noble Lord, Lord Beswick, referred to this. I hope the Government might look particularly at this area and that there might be something to be said for a programme of trade promotion in this area.
But, my Lords, in the end the success or failure of our export trade will depend on the Government's actions in this next week or so. We have talked about the pressing need to reduce inflation: if we do not reduce it, we are sunk. The Government will have to go very carefully about price control. Although it may appear to be an attractive political weapon (if one may use the phrase), if the Government impose even stricter price controls there will be greater pressures to squeeze increasing profits out of exports, and that would be disastrous since our competitors operating without our appalling rate of inflation will exploit their ability to offer equal quality for a lower price.
Finally, my Lords, let us consider for one brief moment the consequences of the downward drift in sterling. Those who say that exports are encouraged by the higher profit margins which sterling devaluation might allow ignore the influences which I think are becoming increasingly important of quality, of design, of service, of salesmanship and, above all, of delivery dates and reliability. As the pound falls our imports of raw materials rise and cost us more in real terms. There must be some end to this and we await the package to be produced by the Government upon which the success or failure of our export policy must in the last resort, depend. But, my Lords, whatever that may be let us be resolved, on whichever side of the House we sit, to do what we can to ease the burdens of the exporter.
4.20 p.m.
Lord PRITCHARD: My Lords, as your Lordships can imagine, I rise in great humility on this first occasion of my speaking in your Lordships' House; and I crave your Lordships' indulgence. If I may, I should like to begin by thanking very much the noble Lord, Lord Carrington, for what he said about my humble efforts in exports. His remarks were undeserved by me. I was lucky enough to lead a great team and to follow a great founder in the noble Lord, Lord McFadzean, who more than myself contributed to this important area of British economy. I wish to apologise to the noble Earl, Lord Limerick, because I missed just a few of his opening remarks. However, I got the gist of the argument earlier this morning when I was unsuccessfuly battling with my own humble contribution.
With the leave of your Lordships, I would make three points. First of all, as the noble Earl said, there is no room for complacency in our export efforts. Indeed, it is a non-political, purely British operation to which everyone in the country, whoever he may be, whatever are his ideas, should give his greatest possible efforts, because on this our livelihood depends. There is a great need for action not only in all the export markets of the world, but also in our own home market, because saving imports is just as valuable in many ways as exporting. As the noble Lord, Lord Carrington, was saying, it is essential that people both here and overseas should be able to buy equipment such as Range Rovers, Jaguars and other things which are in short supply, for reasons that I hope the Government, in their very difficult period ahead, will be able to overcome.
My Lords, the noble Earl also drew the attention of your Lordships to the fact that, while imports have fallen recently both in value and volume, a substantial part of our imports is basic materials, which indicates to some extent a destocking by industry. This is serious. This is due to a number of reasons, not the least being the shortage of finance needed during the period of processing those raw materials, and building up stocks against the time of market demand. An upturn in world trade is reliably forecast to start next year, but will British industry have the stocks ready to take
814
full advantage of this? It is vital that this preparation is done now. There could be a case for Her Majesty's Government exploring the need to improve facilities for financing short-term exports and preshipment problems due to liquidity difficulties which industry is experiencing at the present moment in both large and small companies.
As the noble Earl, Lord Limerick, said, the Export Credits Guarantee Department is one of the great successes of Governments and provides a tremendous service to industry, but this area before the goods reach the docks is naturally and rightly outside its scope. There may be need for some investigation to see whether industrialists who are tight for cash have an opportunity of at least obtaining what they need on as favourable terms as some of our competitors. One of the things British exporters have lacked for quite a long time is a national shop window in which to show and sell their goods to overseas buyers. We should thank Her Majesty's Government and the noble Lord, Lord Beswick, and, indeed, the former Government, for the new National Exhibition Centre which I understand is to be opened in Birmingham next February. This will be a very great strength and a very great help to exporters, both present and potential. It will give some of the smaller firms the opportunity of dipping a toe in the water.
My Lords, I strongly support what was said by the noble Earl, Lord Limerick, that it is no good anyone going halfheartedly into exporting. As we used to say in the Army, reconnaissance is never wasted. It is in support of that that we should have such a centre. But the only real form of salesmanship is to get out into the market places of the world and to see for yourself. By "yourself", I mean the person who can make decisions in the company, not a junior. One should see what is wanted, at what price, in what quantities, and what is the method of distribution. One should then come back and make what the customer wants to buy, not what we necessarily think he ought to buy.
That, my Lords, brings me to my second point. I myself spend about half my working time on the Continent and abroad, so I constantly see British goods through the eyes of the consumer. Our greatest weakness is still our lateness in

815
delivery, our falling down on our promises. Second only to this perhaps, particularly in capital goods, are our attempts during negotiation of a contract, and sometimes afterwards, to alter the terms to suit ourselves, which naturally does not go down well with our customers. We do not always face up to the fact, as we should, that the world is a buyers' market. We may place the blame for breaking our delivery dates on industrial or shipping disputes; we may excuse our unwillingness to tie ourselves down even to short-term contracts on our rate of inflation, but as your Lordships will know better than I, the world does not owe us a living. If we cannot match what our competitors can offer, we will lose business. The sooner this fact is learned and understood by management, by Government, by the shop floor, by the public, the better it will be for the nation.
If I may make a quick aside, it is as well for exporters who let down their customers, or feel that they are going to, with regard to deliveries, to telephone the customer, wherever he may be, and especially if he is in Australia. It is as well if the exporter can explain to the customer the reason for the delay and to give him as much notice as possible. This is much better than either a cold cable or a tardy letter. It softens the blow; helps the customer to delay other production, to come in line with our own supplies, or make other arrangements. At the least we hold his good will.
My Lords, thirdly and lastly, may I congratulate the Government on the prompt way in which they have implemented the Montagu Report by the setting up of the British Overseas Trade Board Advisory Council under the chairmanship of the Secretary of State for Trade. More has been clone to restore confidence, to close the gap between industry and the Government than has happened for a long time. It is not that industry is against co-operating with the Government, but just that they do not always understand. To my mind, the measures recently taken will make a very big difference in that connection.
The remarks of the noble Earl, Lord Limerick, about the British National Export Council were kind. I can assure the noble Earl, and the Secretary of State
816
for Trade, and also Her Majesty's Government, that every member of the BNEC in the past, and every member of industry in the present, has nothing but admiration and support for the British Export Board. We wish it every success in what we know is a very difficult role.
There is one final point I would add, and this is something that helped us tremendously in those old BNEC days. We were lucky enough to have as sponsors four distinct sectors of industry: the Government, industry, the City of London, and, most important of all in my humble opinion, the Trades Union Congress. I believe that today it is vital that we involve the workers on the shop floor and in the offices in the whole of our export efforts, that they not only are given lip service but that they are taken into our confidence, enjoined in our plans; that they come overseas with us, whether it is an individual company mission or a Government sponsored mission; that they see at first hand the problems we face, the need for urgent deliveries, the importance of not breaking our word, so that they can then come home, and whether it be in the office or in the factory, they can convey the same enthusiasm to all their colleagues not only to meet exports but to win the battle for Britain.
4.31 p.m.
Lord AUCKLAND: My Lords, it is a very special personal privilege for me to be the first to congratulate the noble Lord, Lord Pritchard, on a particularly distinguished maiden speech. Over the years in the field of both visible and invisible exports the noble Lord has contributed an enormous amount, in the brewery industry, in the insurance industry and elsewhere; and his record in both peace and war is one which is the envy of many of us. In these particularly difficult times, with the problems of inflation and otherwise which this nation faces at the present time, it is particularly delectable that we should have somebody of the noble Lord's experience joining this House and contributing such a very distinguished maiden speech. I know it would be the wish of noble Lords on all sides of the House to hear the noble Lord's wise and practicable words again before very long.
My Lords, my noble friend Lord Limerick has performed a most useful

817
service in initiating this debate today. As my noble friend Lord Carrington mentioned, the expression "Exporting is fun" will be taken rather cynically by those who have been actively engaged in this field. I have had, and indeed still have, business connections in two fields where export is concerned: one is insurance and the other is management consultancy. It is a rather traumatic thought that at the present time, certainly in the management consultancy organisation with which I am concerned, practically all our contracts are overseas, there is very little demand in this country. Indeed, one of my colleagues returned recently from a successful visit to Brazil, and we are currently negotiating with Finland, where I have had some experience and to which I should like to refer again in a moment.
The field of invisible exports is certainly not one to have received the share of credit to which it is entitled. I know it has been fashionable over the years to attack the City of London. As one who has worked in the City of London since 1948 I am bound to say that part of that is the City's own fault. Its image, if I may use that very over-used word, has not always been projected in the most practicable, or perhaps even the most discreet manner. If, for example, one takes the insurance industry, in 1973 invisible earnings from that industry, much of it from Lloyd's of London, were nearly £400 million. I go back to the mid-1960s, when I was a working member of Lloyd's. Then, as I know to my own cost—and other Lords will be in a similar position—due to certain catastrophic disasters through hurricanes, the insurance industry, and particularly Lloyd's and those connected with Lloyd's, suffered some grievous losses. The then chairman of Lloyd's, to his eternal credit, did not merely sit in the boardroom and weep, as he was fully entitled to do; he went out to attract new business. He went to America, he went to Australia, and he went elsewhere. Gradually, since then, Lloyd's has pulled itself round and is now contributing most valuably to the invisible export industry. Last year the chairman of Lloyd's went with a strong team to Scandinavia, a part of the world where I believe there is enormous potential still to be tapped in the export field, because this country and Scandi-
818
navia over the years have had enormous rapport. They went to Oslo, to Copenhagen and to Helsinki, a city of which we hear all too little. The visit brought very favourable results.
My Lords, what then are the problems facing exporters? I suppose it is always easier to talk about problems than about a fait accompli. Only the other day, in preparation for this debate, I was talking to the director of an international bank, and he was particularly keen that I should raise some of these problems before Her Majesty's Government. He mentioned that not sufficient pressure is brought to bear through diplomatic channels when contractual obligations are not met by overseas customers or suppliers. I think there is strength in this complaint; but I should like to make it quite clear that I am certainly not criticising our commercial counsellors overseas—very much the contrary. At such times as I have travelled abroad I have found our commercial counsellors to be unfailingly co-operative. As has been pointed out to me, what is absolutely essential is that people who are going out on exporting missions, whether with a chamber of commerce, in a small party or as individuals, should give as much notice as possible to the Embassy concerned and as detailed an account as possible as to what they want, who they want to meet, and what is their general purpose.
Another criticism made was that there are no tax advantages for firms willing to take the added risks of exporting. This may be a bad time to ask for too many concessions there, but of course if we are really seriously to increase our potential in the export market—and I think particularly of invisible exports, which do not, in my submission, get quite the same perks as the visible ones—the Government should at least look sympathetically at this point.
The other point is that there are no foreign exchange guarantees or incentives. Anyone who has had, or has tried to have, any dealings with the COMECON countries knows the problem there, particularly with a country like Rumania which is consistently asking to do more business with us even though the terms of trade are heavily in their favour at present. The

819
problem of exchange controls is a real one.
Then a pretty voluble criticism was made to me by a director of one of our leading breweries—I may say not the one with which the noble Lord, Lord Pritchard, has had a distinguished association. It was a very scathing criticism of some of our Embassies and the difficulty of getting en rapport with them. I make this point purely because the person concerned has had a lot of experience of travelling overseas. I must say, speaking purely for myself, that I have not come up against this problem, but it arises at times.
One of the directors of the company with which I am associated went recently to Teheran. Such was the difficulty of telephonic communication there that he could not fix the appointment for which he had hoped, although he received a courteous communication from our Embassy and has, I believe, had quite a successful mission. It is obviously vital that rapport between our Embassies and our exporters should be of the highest order.
A word about delivery dates. I suppose most of us who travel get this one thrown at us. I have had it thrown at me several times. The most recent occasion was a few days ago from a friend of mine who is shortly going back to New Zealand. The New Zealand Apple and Pear Marketing Board contracted for some tinfoil from this country, and due either to an industrial dispute or another reason this tinfoil arrived at a time when the apples were not in the kind of condition when this particular commodity could be used. Further supplies of tinfoil had to be imported from Japan. Many such incidents are taking place. This has been a problem for successive Governments. One cannot necessarily blame any one stratum of society in business or industry for it, but, now that there are clearly going to be close negotiations and talks between the CBI and TUC and other bodies. I would hope that this question of delivery dates could somehow or other be raised, because, particularly with visible exports, it is a matter of such vital importance.
I mentioned Finland just now. So far in 1975 our exports to Finland have gone up in the first five months to £100
820
million, whereas imports have increased by only £58 million. However, there is a danger here that if the wood pulp industry in Scandinavia gets into a more buoyant state than it is now, substantially more paper and wood pulp may come into the country. Clearly, with countries such as Finland, we have to increase our exports, and there is enormous potential for this. There are problems on the invisible side, but I think rather fewer on the visible side.
This debate has served a particularly useful purpose. It has given an opportunity to raise problems at a time when exporting will be more and more vital. I believe that there are good opportunities now for the invisibles to receive more attention, and indeed more publicity. One very good move is made when the Lord Mayor of London goes on his annual overseas tour. The noble Lord, Lord Mais, who is to speak shortly, will know about that. The present Lord Mayor is due to visit Australia and New Zealand at the end of this month. I cannot imagine two more delectable countries to go to at this time, because I believe there is still a very strong potential market to attack there. This kind of matter gets all too little publicity. It should get more because it shows in a practical way what the City of London does in this vital battle for our survival, because I think that the subject matter of this debate may well be an extremely important one in the context of our survival as a. trading nation.
4.48 p.m.
Lord SELSDON: My Lords, in what one might call these twilight hours of our economic history, there are some of us who do not know whether it is night or dawn which will follow. If it is night we will see the longest, most horrific night this country has ever endured. I find myself at a crossroads in my own life. I do not know whether to back my own country. which I have tried to do throughout my working life, or to leave it and look after my family's interests and move abroad where I could afford a better standard of life. I am an international person I suppose; completely British at heart. I have been involved in exports, export promotion, projects overseas, and all my life I have worked for a British group, and I would never work for a foreign company. But I have

821
now reached a stage where I am not sure whether my country has an economic future, and I have said this in your Lordships' House before.
The reasons for this are, first, inflation and secondly, leading from that, exports. It is not the role of Government to export, and no amount of exhortation from your Lordships' House or another place, or from outside in the country, will improve our exports. Government have done a lot. It is fair to say with pride that through our Foreign Office, the BOTB, the DTI and numerous other organisa tions we have perhaps the strongest poten tial base for Government co-operation of any country in the world. I made some inquiries the other day out of personal interest to find out how many different agencies there are within the Government which are willing to help, and I discovered that there are so many that it is impossible to define how they all fit together; yet many of them, when one speaks to them, ask, "Why isn't industry approaching us?" There is, on the one hand, the Overseas Projects Group, which can allocate sums up to £50,000 to help companies in their expansion abroad on overseas projects, and the Inward Mission Scheme, on the other. They are all there, yet there is no co-operation.
There is a danger here, because it is the duty of Government to create the climate in which companies export and wish to export, and the one thing that the present Government have done is to create a climate in which companies not only do not wish to export but are actively seeking to divest themselves of their United Kingdom interests and to move overseas. We make a mistake in this country, unlike the French, of thinking and living in the past. When one listens to noble Lords speaking on the Front Bench opposite, or reads reports of debates in another place, it is always said, "We did this in 1950 or 1960" or, "We took this step or that step." One hears very little about forecasts of what is likely to come.
On the other hand, when one goes to Paris one finds the French thinking entirely in the future, of what will happen and how best to adjust their country and their industry to take advantage of the opportunities which will arise. It horrifies me to learn with what conviction
822
people say, "There will be an upturn in world trade." That upturn will come too soon; this country is not ready for it. It cannot, as we know and have heard, deliver now and it will be in an even worse position to deliver abroad when the upturn in trade comes, because, after all, there is no shortage of export opportunities now.
I suppose that I should declare an interest in that I work with a group which is an invisible exporter of about £170 million a year, and I am currently involved in overseas projects and in promoting the exports of many British companies. It is not, as we have heard, a question of price. I should clarify that; it is not a question of a price written on a piece of paper, but a question of the inflation price. We have had Questions in your Lordships' House about how competitive British industry is; abroad and there was a comment by the noble Lord, Lord Jacques, recently that we are 9 per cent, more competitive than anyone else. I accept that comment, but when I ask the companies with which I work, "Can you quote for jobs and tenders abroad?", they say, "We dare not, because we cannot gamble with the ability of this Government to control inflation. Do we, in our calculations and tenders, quote with a 25 per cent, margin for this year when it is a three-year con tract? Do we double the price, because the size of some of the things we are involved in are so great that if we go for them and gamble wrongly against inflation we go bust?"
I would not criticise the efforts which the Government and Departments make to encourage companies to export, but the Government are going the wrong way to create the right climate. One cannot, as a marketing man knows, have a successful export market in the long term unless one has a good home market. One will never export unless one can get the right people, as the noble Lord, Lord Carrington, pointed out, to lead one's export drive abroad. I am talking about people of calibre. Exporting is not fun. It is not fun going off to countries with temperatures of 127 degrees in the shade, unable to ring one's wife and family, trying to get on a plane to get back only to find it has been double booked so that one has to spend two weekends abroad, obliged to miss such things as children's sports days.

823
It is not fun having to spend money without knowing that one will get a return. It now costs £65 a day minimum to operate abroad—£20 for one's hotel—and one may need to take someone out to dinner, or one may be taken out to lunch. The costs are horrendous, often when it is speculative, and the people at home cannot afford the burden that is placed upon one by declining currencies. When one's own currency starts to decline against even the Egyptian pound, it is not an easy business exporting, and more and more people are realising that the effort may not be justified. It is no good saying, "Your country needs your exports", because this does not help industry, and when industry feels that earnings generated by extra effort are not really justified then we have a real problem.
That is perhaps an emotional start and I will try if I can to be practical, because our potential is greater than that of any other country in the world. We have without doubt some of the best political links with the new expanding export markets, including the Middle East, of any other country. We have in Britain more know-how and experience in the developing and designing of products or services than any other country in Western Europe, and we can certainly compete with the United States as we have seen with new developments of which we are capable. We have the middle management, the people who can cut their way through bureaucracy and use one sheet of paper instead of 10, people who are willing to make decisions on their own account without needing the consensus opinion of a board or committee.
Let us not forget that almost half of the most powerful companies in Western Europe are British, and that we have people in those companies who are patriotic, who wish to live and build their businesses in the United Kingdom and who are willing and waiting to invest here when the Government can create the right climate. The Government should bear in mind, as I know they do, that exports depend not on nationalised industries but on the private sector. They depend not on a bulk of hundreds and thousands of companies in the United
824
Kingdom, but on the efforts of a minority of perhaps 100 companies. It is right to encourage every company to export, but it can be dangerous to encourage small companies to devote too much of their time and cost in travelling and developing markets overseas, without a secure and solid base at home.
This is the worry and it is not to do with export credits and so on; it is to do with the climate that is created for British industry now, and that climate is disastrous. I go further and say that one of the biggest handicaps I have found in trying to promote these activities abroad has been the attitude towards Her Majesty's Government—the fear that the Government may do something irrational, something which could condemn or hurt the company which is seeking to develop a project in a certain market. I do not know whether the Government are aware of this. I do not know either whether, when they send Ministers abroad to promote trade in certain markets, they are aware that if they send a Minister who is anti-private sector and anti-capitalism to a country which is pro-capitalism and pro the private sector, or send a man who is anti-EEC to a country which is pro-EEC, this does not create a feeling of good will and support.
In the developed markets of the world where we are seeing a recession there is not so much need for Government support; these are sophisticated markets that know companies know countries and know products. They do not need or seek Government interference. But in the new rapidly emerging export markets of the Third World one has a combination of three factors; government, technology and finance. It is this package that gets exports off the ground. There are many countries which suddenly decide that they wish to buy from a particular country. This decision is not necessarily based on a selective judgment on products, but can be a political decision—a sudden decision to switch away from the Soviet Union or away from the United States and towards Western Europe, and more often than not towards the United Kingdom which they have known in one way or another for many years.
These factors are critical and when the noble Lord, Lord Pritchard, points out the third factor—there is the company,

825
the industry and the work force—I recall that when I have been involved with companies there has often been a certain amount of pride that it is possible by good relations to get men to work overtime or long hours or to give up their weekends, so that one can stamp on a crate "Abu Dhabi" or some other place and be sure that it will get there and catch the flight abroad. I would far rather do that than mark it "Glasgow" or "Birmingham". There is a feeling when one is doing this and selling abroad, and it is a feeling that one should encourage. It is really a question of education, and within all our companies—and it is right that one can sometimes criticise export people—too much priority is often given to the home market. The home sales manager almost always takes priority over the export sales manager, because he is in touch on a day to day basis and he is selling a greater part of the company's products, but when there is a recession people suddenly start to turn to exports, often too late.
These are three areas of exports which we should look at. The first is the visibles. The Socialist Government have always concentrated too much upon visibles, as we know. Perhaps one might recall a rhyme which I learnt when I was trying to learn Latin:
"Abstract nouns in 'io' call
Feminine are one and all;
Masculine will only be
Things that you can touch or see"
The potential of the United Kingdom lies in many things we cannot touch or see. One of those is, as we know, the invisible export. I shall say no more about that, as your Lordships' House has heard a lot about it from me, but the outside world knows the potential for invisibles, and it would be wrong to assume that the French are not trying with all their power to divert and take away the potential for invisible earnings from the United Kingdom to Paris.
Paris is becoming more and more a centre for Third World development. Also, more and more of the up-and-coming entrepreneurs of this country are leaving it, because they see no reason for staying here. They are moving and working abroad and using their diligence and efforts to earn money and to promote from abroad companies which are often of non-British origin. We also have that
826
invisible export which has caused a lot of problems on many occasions which is the amount of private capital which will continue to find its way out of the United Kingdom, and the amount of know-how and resources that will go abroad in the current climate. It is not just the invisible side. The technology side has almost as much potential as anything. Here, one uses that word, "know-how", which is the traditional magic word for converting common sense into cash.
There are certain areas where one can pay tribute to Government Departments and to State industries. One, in particular, which may not be widely known is the electricity supply industry. Because they happen to have the right people who have the true enterpreneurial spirit, they formed a consultancy division which set out to sell abroad British know-how in the electricity supply industry and, leading from that, British products in other industries around the world. In the Third World they are welcome, because they are British and, in a way, they represent the British Government. People trust the British. Electricity is important. The amount of work and the growth in their business has been very considerable and they need support. I hope they will not be hidebound with bureaucracy. We are faced, too, with the question of British consulting engineers who, again, lead Western Europe. In a way, they have the power to specify British products.
All these areas give room for hope and encouragement. When we come to visibles, I am pessimistic. We never have been a manufacturing nation which has been successful in exporting. It is no good pretending we are. The noble Lords, Lord Carrington and Lord Pritchard, spoke about British Leyland. I could sell £1,000 million worth of British Leyland products abroad during the next year if they were available now. I have no doubt about that at all. But what does one do with a company like that which has the highest unit cost of labour per car, the highest warranty cost, 246 bargaining points instead of one and delivery dates that run out to goodness knows when? One could sell their products. The only cars one can sell in the world at the moment are British cars. People in the Third World are buying and paying premiums for second-hand Land

827
Rovers that would make a Rolls-Royce Camargue look cheap. Here is the car industry. Here is what the Government are trying to help. It is one production area. Personally, I believe that if we cannot resolve its problems we should give up making cars and go back to making other things. It is not a question of the over-manning, but it is one industry which has it.
Let us go to another nationalised industry. I could, within the next year, sell 5 million tons of coal. I have written to the National Coal Board saying just as a beginning that I will buy a million tons of coal. It is for foreigners who want to buy coal. We have it in the ground. It was even suggested by some of my French friends that they should bring people from their own country to dig it out or that they should buy a coalmine. They are even trying to buy the slag heaps because people need coal. They read in Le Monde that the British have enough coal under the ground to look after the whole of Europe for generations to come. We have strikes all the time and there is no coal. We must exercise force majeure. We cannot export or sell it.
My Lords, one can go through the companies listed in Compass or Fortune or any similar list, and can look at the individual products. One can go to the companies and ask for kilometres of barbed wire to be delivered. The answer will be, "Oh, no!" All this is a production malaise. But it is not just an investment malaise; it is a social malaise. It is not, as I said at the beginning, the Government's responsibility to export; it is industry's responsibility. But the Government have not created the climate in which industry will be encouraged to export. They have done the reverse. It is a dangerous state of affairs. I would willingly cross the Floor of this House and sit on the Benches opposite if I felt that the Government would take the right steps, but they are not doing so.
They may not be aware of all that is at stake. I know that they take advice from different people, but when one is involved in countries abroad and is in the Middle East or wherever it may be three days a week, as I am, and when one sees the new markets and new potential in countries such as the Sudan, which has the greatest potential for the production
828
of food of any country of the world that I know of, other than Brazil and which, with the right amount of tripartite cooperation with the Arab world, could become a major market for British exports, one is depressed. The pioneering spirit which the British used to have has been dampened by interference and legislation, and by the Government taking away the willingness of the entrepreneur to grow and expand. My Lords, the fault and the future lie not in exhortations, but in the Government creating the right climate for industry to expand and export.
5.8 p.m.
Lord MAIS: My Lords, may I begin by adding my congratulations to those already expressed to my noble friend Lord Pritchard. I have known him for many years and it gives me great pleasure to see him in your Lordships' House today. I express the hope that we shall hear similar words of wisdom from him on many occasions in the future. It is but a few weeks ago that we had a most interesting debate in this House on the economic and political situation. Here we are today debating exports. I feel that we shall find it difficult to divorce one from the other and I sincerely hope that we may not cover the same ground twice over. I shall endeavour not to do so. I should also like to say that some of us may find it difficult to believe what is said by those who consider themselves to be experts and who forecast that there will be a strong recovery in world trade next year. I for one hope that this will be so, but I must confess that I have my doubts. However, let us assume for the purposes of this debate that we shall have an improved world trade in 1976. If so, it is vital that the country should take a long hard look at its own export procedures and at its record in the past, if we are to obtain a fair share of that forecast increase in trade.
It would be as well to look for a moment at the incredible change in the pattern of our export position over the past years, for I believe that we are, to some extent, suffering from our past and from our history. We live in a country which was responsible for the industrial revolution and which was the birth place of sophisticated modern commerce and trade. In the glorious Victorian times—though some of us, looking at them in

829
retrospect, may not be quite so sure that they were as glorious as reported—and for several decades thereafter, we delivered manufactured goods to an Empire. We received Empire produce and raw materials in return. It was a "tied" market and this became even simpler when, in the twentieth century, we added Imperial Preference; preferential trade, conducted in sterling, in the English language, with British weights and measures and shipped predominantly in British ships. Frankly, with all respect to those who set out on the trade routes of the world in those days, it would have been difficult to go too far wrong, because the markets were there ready-made and so were the raw materials.
Today, we live in changed times. Fifty per cent. of our visible exports which, for example, went to the Sterling Area in 1950, 25 years later go to Europe. But in those 25 years our share of the world trade of manufactured goods has dropped considerably, although I am happy to say that it is reported that there has been a slight indication of an improvement. I do not think that many of us engaged in the export market would exactly hang out the flags or utter a cheer about that, other than to say that at least the swing may have stopped, but the improvement has not been all that marked for us to relax in any way at all.
When I spoke in the debate on the economy I gave certain figures. I shall not repeat them now, nor waste your Lordships' time. But I wish to remind your Lordships that I then said that firms generally were more pessimistic about future orders than they were four to six months ago, and that this particularly applied to export prospects over the next 12 months. I also said on that occasion that there was a danger of our pricing ourselves out of the export markets of the world, and that the rate of inflation in this country was tending to make us uncompetitive in world markets, due to our rising production costs. Therefore it is with some anxiety that we await the Government's measures which they propose to introduce, because, my Lords, it is one thing to introduce measures but another thing to see that they are carried out. I was brought up on the old adage that it is no good giving an order if you cannot see that it is obeyed,
830
and I sincerely hope that, whatever the measures Her Majesty's Government will produce for us in the next few days, they will at least ensure that production can proceed without delays arising from shortage of materials and from industrial disputes and, above all, that we shall have a stable incomes policy.
Without these we are sending our army of exporters out to do battle in world markets utterly and completely unarmed. Clearly we cannot go on increasing the value of our exports simply by putting up our prices. Our customers have no wish and no reason to import inflation from us. They have the obvious remedy. They will buy elsewhere. It is necessary to consider whether we have the capacity to produce more goods for export. It is natural that in a period of economic downturn—and this was being referred to by other noble Lords—one could expect a fall in the stocks held by companies both in their works and in their stores and, also, a fall in the import of industrial materials. If these two go hand in hand with substantial reductions in industrial investment in industry, there will be a danger that as world trade recovers and expands we shall find ourselves unable to take advantage of these markets due to a shortage of materials, a shortage of new equipment, plant and production capacity.
I gain some comfort this afternoon from the words of my noble friend Lord Beswick, and I was glad that it appeared obvious that Her Majesty's Government are conscious of this problem. This is where I believe they could be of inestimable help to industry in ensuring when the time comes that we are not short of raw materials or of stock and, above all, where possible that our plant and equipment is in a state ready to meet the challenge of growing world markets.
In a recent study more than half of the firms interviewed found that exports were more profitable than selling in this country. That is rather strange and it contradicts what one or two other noble Lords have said. But this is what was said in the survey, and the fact also remains that those firms had a much lower ratio of salesmen engaged on export than they had in the home market. First, you have to persuade the firms and then you have to persuade the men themselves to go, and with the present system

831
of taxation this is a very difficult problem. How can you reward a hard-working man who is probably married and who has to be absent from his home and family for months on end, probably living out of a suitcase for an equal length of time frequently suffering from what is known as "jet lag", and no sooner does he recover than he is pushed off again on another trip?
I do not doubt that such men do it and get a certain amount of thrill out of the competitiveness of the export market, but it is an exhausting business and, as the noble Lord, Lord Selsdon said, it is not enjoyable. It is a tough, hard world and a very exhausting one. How can you make it advantageous to a man—or a woman—to undertake this when at the end of the day the net income will probably not be all that much more than if he or she stayed at home and caught the 9.30 up and the 5 o'clock back, always supposing that they were running? The Government must look at this problem. I know that it is very difficult to have one law for one and another law for another, and this is a problem. We must give not only firms but the individuals who work for them an incentive to operate overseas.
Over a period of time our failure in some cases to re-equip and modernise British industry has meant that very often we are producing the wrong sort of product for export, or where we have the right type of product we are not producing it in sufficient quantities. It is here that the Government could make a considerable contribution towards helping industry. One problem in any discussion on export is the confusion which exists between export generation and export promotion. The fundamental issue of the former is: do we produce the right goods, in the right quantities, at the right price, for the right market? If I may offer a personal opinion, it is that if the National Export Development Council is to be re-organised it should have a role in export planning. We cannot talk about exports without talking about overall production capacity. One comforting thought is that there are more firms today showing an interest in export than perhaps we have ever seen before, firms which can see that it is in the overseas market—possibly in the overseas market
832
alone—that they will be able to sustain their profit levels over the next few years.
If I may declare an interest by mentioning the London chamber of commerce—the noble Earl has already mentioned the body one above it—I would draw your Lordships' attention to the fact that it was that chamber which largely pioneered the British trade links with Eastern Europe and, for that matter, Western trade generally with the Eastern bloc countries. These markets are now developing very rapidly and, while there are some welcome signs—such as a large tractor order from Poland, and the Prime Minister's visit to Moscow—the fact remains that Britain is falling behind again in Eastern Europe. In the 1950s we were the leading Western supplier to the Eastern bloc, but now we are fifth behind West Germany, France, Italy and Japan.
I also wish to refer to the rather considerable change in the pattern of trade. Here I refer, in particular, to the large projects which have now been drawn up. I think that Mr. Peter Shore referred to them as "jumbo projects". I do not know about them in general, but I know something about them so far as engineering and construction are concerned, of which I have some little knowledge. Today one is frequently asked to bid for the design of, say, a hospital, to build it, to equip it, to man it for the first few years and, during that period, to train local people either in this country or in other countries so that gradually they will take over. To bid for a project of that nature is a very costly business; and over a period of many years the risk that the consortium would run is considerable.
I do not see how we shall be able to compete in that type of market—which is a growing one, particularly in Middle East countries—unless we receive every possible support from the Government. While I appreciate that there is an overseas project group attached to the British Overseas Trade Board, I would with some temerity suggest that it needs reinforcing. That is not in any way a reflection on their ability, which I know to be good; but I believe that they are undermanned and that we need all the strength we can get.
Lastly, but by no means least, it is essential that we so organise our affairs

833
in this country that when we give dates to deliver goods abroad, we keep to those dates. One can blame industrial disputes; but when one inquires one finds that these are only one of many causes. The fact remains that we not only are late with our deliveries but fail to back up with spares. There are many instances. Britain's image as a reliable supplier has become tarnished in recent years for the very reasons I have just mentioned. Late deliveries; shortage of spares; no adequate or efficient back-up. If we are to regain our reputation, every person concerned with meeting delivery dates will have to make a personal effort. The general public, and particularly a company's operatives—and by that I mean everybody from the boardroom to the shopfloor—must be enthusiastic about our export trade and, above all, about the export problems of their company. I wish we could get the same enthusiasm into a company, and into this country for that matter, about the position of our country in the export league as they show in the position of their local football team or their international team. I was going to say that it is more profitable and, also, there are fewer fouls, but having spent many years in export markets I would say that there is as much need sometimes for a referee in that game as in an international football match.
My Lords, I would associate myself with those noble Lords who have referred to the scope for greater improvement in the relationship and connection between the shopfloor trade unions and the export market. If you want to get the maximum out of your operatives, I believe it is essential that they must have an interest in the end product and where it is going. I should like to see shop stewards—trade union representatives—included on trade missions which are sent overseas. I should like to see them when potential customers visit your works; let them meet the trade union representatives and let them really know what it means to that company and this country if they get that order and what it will mean to them if they default on deliveries or quality. I think we have not scratched the surface of this aspect yet I believe that in it could lie the solution to many of our problems. I agree with the noble Lord, Lord Selsdon; this country has the greatest potential of any. We started a long time
834
before most as an exporting country and it is for us to exploit that potential and not to destroy it by lack of understanding and lack of unity.
My Lords, may I end by thanking the noble Earl, Lord Limerick, for introducing this debate and giving us the opportunity to discuss this subject, particularly at the moment; for never was there a greater or more important opportunity for this country than exists at the moment. We are at the crossroads. We can go down one road and up over a hill to a very bright future or we can take the wrong turning and face disaster.
5.25 p.m.
Lord GLENKINGLAS: My Lords, for almost all of the last five years, wearing one hat or another, I have been directly involved in the export market. In thanking my noble friend Lord Limerick for introducing this subject today, I should say that he asked me whether I would deal specifically with the agricultural side of exports, as Chairman of the British Agricultural Export Council. So that although a little of what I say may in some degree, overlap what other noble Lords have so ably said, I hope not too much will do so, and I also hope not to delay your Lordships for too long.
Many people do not realise that last year the agriculture industry as a whole exported £850-million worth of goods overseas, excluding anything for the "invisibles" and excluding processed human foods like whisky and biscuits. This is a considerable success story and most people hearing those figures would assume that this was all tractors and machinery and such like. It is not, in fact, quite as simple as that, because engineering and equipment are roughly half the total. There were £300-million worth of exports in livestock, poultry, wool, meat, milk products, vegetables, potatoes and so on and £130-million worth of chemicals and animal feeding-stuffs. As my noble friend Lord Selsdon has said, the chemicals industry has done particularly well over the last few years, particularly in the plant protection field. The first quarter of this year, I am glad to say, is still showing a good strong upward trend. We did just over £300-million worth of trade in the first quarter, against £191 million for the same period

835
last year, so we are still, I believe, going a little ahead of the normal inflation rate; but there is a vast amount that can still be done.
My Lords, there have been two rather remarkable changes in the last few years—perhaps I should say that one is a change and the other is something brought forcibly to our notice. The first has been in the Middle East, in the oil producing countries. They are suddenly aware of the fact that the oil reserves may not last for ever and that they had better use some of their enormous sums of money for developing something of real value in those countries, and they have chosen, among other things, the development of their land. This is an enormous, exceedingly difficult and expensive, task. The second change is that suddenly very large numbers of people in the world have woken up to the fact that with the day-to-day increase of population the danger of the world running out of food is very great. This should not be so, because we certainly have ample supplies of land to produce all the food the world needs.
My noble friend Lord Selsdon referred to Sudan and Brazil as two countries in which there is an enormous potential for developing food. But, as your Lordships know, the problem is not just how to produce the food but how to distribute it, how to sell it and how to get it to the countries you want to have it. With these potentials in front of us, with the market for developing the countries that need to be developed (and that are willing to pay large sums of money to have their agriculture developed) there is in the field I have chosen to speak about a really remarkable potential. How are we facing up to it? The British Overseas Trade Board, of which much has already been said, have been given no extra money this year to spend on the vitally important promotion of exports. I do not mean they may not have had a few extra pounds, but in relation to real terms they have been given no increased budget. I wonder whether the Government have their priorities right when they spend large sums of money on the other side of the Ministry of Industry. I believe they are not giving enough to the promotion of our exports without which the country will fail.
836
My own export council is perhaps lucky in being the only export council to which the Government allocate any money at all, and every few years the Treasury decides this must now stop. This year we get from the Government the handsome sum of £25,000, plus of course some help in other ways, which other people get too. If you compare that with my opposite number in France, who gets something like £5 million, or my opposite number in Germany, who gets £3 million or £4 million, and my opposite number in America—there are several of them who get millions and millions of dollars—you will see that, if I am not entirely successful, I am slightly handicapped compared with some people to whom reference has been made, who have done better than us in certain markets.
I have a hard-working staff of two, with four girls to cover the entire world and promote exports therein, and we do our best without having to admit often that exporting is fun. Over and above that, the bulk of our competitors in the developed world have a large number of entirely commercial agricultural attaches. The Americans have 80, the French have 40, and there are other countries on that scale. We did not have any. We are now, I believe for the first time, putting one into Teheran—and about time too!
In agricultural terms as a country we produce more per man and more per acre than any country in the world. How often has any ambassador sold that story to any country to which he was assigned? I have never heard of that happening and I have visited most countries. How many of our Embassies—and here I am not wanting to be unkind; they are extremely courteous and generally enormously helpful—have a single person on their staff who knows anything about agriculture at all? This is not their fault; farmers do not tend to go into the Civil Service. If one or two slip in, they tend immediately to be picked up by the Ministry of Agriculture. It is the rarest thing—and I have been connected with both Ministries from time to time—to find anybody in either the Foreign Office or the Department of Trade who knows anything at all about agriculture. Therefore this enormous potential field, of which I am trying to speak for a few minutes, is not easily promoted by the people who are, in many other respects,

837
doing an excellent job of work in their own field.
If that is so, there are many things we ought to do, and in a minute or so I will come to one or two minor recommendations. In this field we have one or two possibilities where, in the form of production, we do not have quite the same difficulties as have some of the others which have been spoken about earlier in this debate. This is because we have the potential of selling know-how—and noble Lord, Lord Selsdon, had a good expression for it—in the agricultural field, simply because we have greater skill than any other country in the world. We have the ability to sell knowledge about training. To those of your Lordships who have visited the Middle East and seen the terrain that they want to develop and the people who will have to run these enormously large herds of dairy cattle, sheep and huge farms that they talk about, it is absolutely clear that without basic training often at quite a low level, these schemes are bound to collapse. We in Britain can help in this situation, and I hope we will be paid for our help, because training is absolutely vital to the success of these schemes. We can also do a great deal to help in the whole process of marketing, packaging, storage, and so on, of the goods produced. These are all items highly saleable in the Middle East at the moment, yet not needing the enormous production techniques which have been mentioned concerning some forms of equipment.
I must say a word about Land Rovers. I have travelled the world extensively over the past 10 or 12 years, and in every country I have visited I have been asked why there are not more Land Rovers. I suppose I have a love/hate relationship with Donald Stokes about it. I have written to him so often, and I have never had an answer. I do not believe any other big company in the world could have had such a continuously high demand for a product and so totally failed to meet it. My advice, if I dare give it to an engineering industry, which, by and large, is doing a tremendous amount of skilful work, is not just to watch delivery dates and spare parts—we are not much worse than most of our competitors on this, if we are worse at all—but not to over-sell. I find it disstressing, arriving in a country, to be
838
told, "We like your tractors very much. Your firms promised us 300 last year but they delivered 20. This year they have promised 250. Do you think we will get 10?". This is not late delivery, this is sheer straight over-selling. I believe that in the long run it does more damage than good.
Now if I may refer quickly to one or two points where I believe we, as an industry, have a special contribution to make, and where, to some extent, the Government can help us. In selling livestock—I am thinking particularly of big farms in the Middle East—I believe that it is essential for us to produce a really effective after-sales service. This is something no other country is yet doing. I believe it would create a great deal of good will if we were to say, "We will sell you 1,000 dairy cows, and not only give you the management for them, but have somebody come out two or three times a year thereafter in order to check that everything is going right".
Lord DAVIES of LEEK: My Lords, would the noble Lord give way after that interesting point in which I concur? Does he not agree this shows the need for more research into climatology? In the Philippine Islands, where I had the pleasure of seeing British stock being reared, management can be followed up with climatology. There is much more potential export if we follow up with climatology and management help after we sell.
Lord GLENKINGLAS: Certainly. My Lords, in Baghdad ten days ago I was interested to hear that they wanted 50 meteorological stations in order to provide the information that the noble Lord mentioned to improve the management of their crops and stock.
If I may now come to my second point, it is vital that we get early intelligence in the case of these huge agribusiness concerns. I have not been to one country in the past two years where I have not, merely by talking to the right people, discovered one or more large projects of which our Embassies were totally, absolutely and completely in ignorance. This shows that visits are the key operation. I hope in the thinking of the British Overseas Trade Board they will, with the limited money I know they have, be more generous than they

839
have in the past to what I might call the research operation rather than the full mission. Equally, at the other end of the scale, it is vital, if we are to get a higher proportion of these big orders that are floating around, to invite the right decision makers to this country on inward missions and give them really slap-up treatment. I know this is what our French, German and American rivals do. They do it very successfully, and it is an important part of what is needed.
My next quick point is that, if the Government will accept what I said earlier about the people in the Embassies being a little limited in their agricultural knowledge, I believe we should make a deliberate policy of training in agricultural matters at least one person in each Embassy when they return to this country. This is something which could be done and my organisation, and indeed many others, would be happy to do it.
I do not entirely agree with what the noble Lord, Lord Selsdon, said about the visits of Government Ministers. I find it quite possible to have extremely good relations with Communist countries, whose political views I do not entirely share; but as regards agricultural exports I think it is extremely important that we get the Department of Trade, the Ministry of Agriculture and the Department of Overseas Development closely coordinated, and that we use our Ministers regularly for visiting the countries that matter.
My Lords, I have spoken for longer than I meant to, for which I apologise. I also must apologise to the noble Lord who is winding up the debate, and say to him that if in fact I am not here for his winding-up it is because I have waiting a group of Brazilians who are busy buying in this country, and I want to give them a decent dinner.
5.42 p.m.
Viscount SLIM: My Lords, may I, too, join in the congratulations to the noble Lord, Lord Pritchard. It was a great pleasur6 to find myself sitting beside him, because in the past he knew my father and has done me a number of kindnesses, and finally, because he is a good man. Perhaps I should also apologise for not being in your Lordships'
840
House as often as I should be. The reason is simply that I am an export salesman. Most of my life is spent abroad and I travel, obviously hotly, in the Middle East at the moment, and also in COMECON, mainland China, Asia and Africa. I work for an industrial group, and in case some of your Lordships may think I have never got my hands dirty, perhaps I should say that I have worked in a factory and have run a factory.
I have some fairly strong views about British industry. I may sound impertinent, because I have not been in it for as long as several other noble Lords in this House, but British industry is slack and it is idle. Some of the criticism of management is well taken by us in management, and some of the criticism about trade union leadership is well-made and well-deserved. There are today a number of young managers and young trade union leaders in our country who have not had to fight for survival; they have not had to fight a war. They have taken what a Welfare State gives, and have put little back.
In my company we have a different philosophy. We have small groupings, and we know one another. We are not perfect, but there are seventy of us in, the international trading company which I am working with at the moment, and whose running I have something to do with, and we probably speak just over 22 languages between us. There are seldom more than 25 or 30 people in that office at any one time. We are everywhere; and, if I may follow the noble Lord, Lord Carrington, there is nothing glamorous or "fun" about exports today. In fact, I would go so far as to say that it is a very hazardous and dangerous occupation, especially if you were in Beirut last week as one or two of us were. We are no longer paid to fight—at least, I am not, though I was for many years—and I certainly found it rather difficult to reach Beirut airport in time. That is just a very small hazard; but there are bigger ones.
Make no mistake, my Lords—if I may bring this debate down to the ground, as did the noble Lord, Lord Selsdon, as regards the business of selling—if you are a salesman, it is not easy today to get an order for Britain. It is not easy, because the ills—the rot, I would almost say—lie

841
not in overseas countries where the opportunities are, but in our own country, in our own industry, in our own City and in our own general political make-up today. We British today make many excuses. We talk a lot, and we talk pretty well. We were a nation of shopkeepers, but perhaps we are not even being allowed to be that today, with some of the doctrinal governmental stuff that is being pushed at us.
For many reasons, I do not share the optimism voiced by the noble Lord, Lord Beswick, about exports. Certainly it looks good; we can all make figures speak. But the situation is dangerous and in my experience there is—and I am only talking for myself and my company—a very definite falling off in parts of the world where we think business is. We can blame a number of outside factors, if that is what we feel inclined to do, but our weakness as an industrial nation is the lack of productivity. I believe it is as simple as that. And even our excuse—from management, from employers or from any trade union leader you like—about failure to invest, cannot continue to be used as an excuse or as a handicap for not producing and performing on time.
When we go out to sell we do not have much in our quiver. We are not necessarily very competitive, particularly in comparison with our two major European rivals, and we are not necessarily as well covered in the rear as they are. Because of our inflation, which has been mentioned already, and the fact that somehow we have to make a profit because of the very heavy tax burden a company is lumbered with today, we find we are over the top of other quotations. You can pare it down a bit and bring the price down a bit, but you are in very grave competition, and you start off with quite a number of points to your disadvantage. Behind that, you have this British performance, this British service which is not up to par and not up to scratch.
Then you have the British salesman—because we are not all good and we are not all perfect—who flips in and out of a place, hangs around for two days, then gets up and goes and is never seen again. I could quote the experience of many countries in this respect. I was
842
in Algeria for a fortnight not too long ago, and time and time again I was asked, "Why don't you come and see us and stay for a bit? Why don't you send someone who can speak French? Why don't you write to us in French? We might answer some of your letters then. We don't speak English in Algeria." There is also another point which I feel I must mention, because it made me very cross at the time. too, got "a left and a right" on behalf of the noble Lord, Lord Stokes—his Land Rovers and his trucks—from a number of Ministers and a number of technical people down below. I, too—because I will not have people being rude about our country when I am overseas—took this on the chin and wrote to Lord Stokes, and I have never heard from him since.
If I may, I should now like to talk about export salesmen in a little more depth, because although the noble Lord, Lord Carrington, is correct in saying that Governments can do only so much, I believe there is much that this Government, or any group of people aspiring to be a Government, could do for the export market. There are the unsocial hours and the dangers which I have mentioned. May I suggest to noble Lords that they try six weeks in COMECON, in the Middle East, or go to South Korea for three weeks on the trot. You are living a life that no trade union leader would allow his people to suffer, and you get nothing for it.
However clever we are in management about making an incentive scheme for the chap who works, however hard we try to look after him, when he comes along to get his bonus half of it goes immediately in income tax, and when he gets home and opens another envelope he finds the other half has gone in surtax. It is very little recommendation for getting out on the road today. I merely highlight that point, because I would ask the noble Lord, Lord Beswick, to see whether there is some way to give relief, perhaps, as mentioned by the noble Lord, Lord Carrington, on travel costs. Our travel costs have gone up 34 to 44 per cent., and we do not travel first-class in 1974/75. I would ask the noble Lord whether he could see some way of alleviating the burden, and rewarding the work of the export executive and the technical man who goes with him.

843
There is one point on which I should be happy if the noble Lord would correct me or perhaps add a few figures. In my study of the number of people from industry and manufacturing who physically go overseas and sell, I can find only 3,000. We have a population of 55 million, we have a large workforce, and I do not think 3,000 is enough. We are also very aware, as the noble Lord, Lord Carrington, suggested, that the calibre of the man who goes to sell may not be good enough. Like the noble Lord, Lord Selsdon, I am always finding that when we come out of an office door in Teheran, Shanghai or somewhere like that, that there are four or five Frenchmen, three or four Germans and half a dozen Japanese waiting outside. They come with a package, they come with a plan and a purpose. They have worked out how it will be paid for, how to get extra credit and easy terms.
We go in alone. There always seem to be three or four lone Englishmen, and we meet in almost every capital in the world. We bounce in and out and do our best. My company has partnerships with many other groups and companies in the country, and we have tried hard to go along in reasonable numbers of three or four to offer a package, a complete requirement, and not only to offer it but to know, having done the research, what a developing country wants. So often people flip in and the country concerned does not know what it requires and they have to guide it diplomatically.
Lord WIGG: My Lords, is it not a fact that the British Government have set their face steadfastly against putting Government resources at the service of industries, in order to facilitate package deals? I think the noble Viscount is aware of my interest in Algeria. I had cause to have correspondence first with the Prime Minister and then with Mr. Peter Shore, and as long ago as June last year I was promised that the matter would be referred to an advisory committee, but I have not had an answer from that day to this.
Viscount SLIM: My Lords, I cannot answer for the noble Lord, Lord Beswick, and I do not know what correspondence the noble Lord, Lord Wigg, has had. The noble Lord and I have certainly discussed
844
Algeria together, and he was very kind in helping me to get there. I cannot say of my own group that we have been blocked by the British Government or anything like that, but I would go so far as to say that, in my view, the failure is in this business of the package deal on which we seem to agree. There is no leader to give financial management and co-ordination in order to run this package deal—not from industry, and we are guilty, no volunteers from the City, and certainly not from some of the Government bodies which we have heard discussed today.
Lord SELSDON: My Lords, there is a volunteer here. I know the names of 30 or 40 who are very interested in package deals. If the noble Viscount would care to talk to me about it afterwards, I feel that I could reassure him.
Viscount SLIM: I thank the noble Lord very much.
Lord BESWICK: My Lords, as the noble Viscount is being so gloomy, may I say that I was connected with a company which did package deals and had orders of nine figures and seemed to be doing them very well.
Viscount SLIM: My Lords, maybe that company's incentive scheme works, I do not know. In this debate I am trying to highlight the problems and difficulties of the salesman. There is a lot of smooth talk in Government circles and other places which gives the feeling that everything is all right. I should like to make it clear that my view is that we are in a very dangerous position.
I wonder whether the noble Lord would let me make a point or two about loans; he has much more experience than I have. I should be the first to congratulate him on this extremely good loan and the arrangements made with Egypt, a country with which I am familiar as I have been asked to lead delegations and missions in the past. When we wander around trying to sell, we get the impression that loans are given rather easily overseas and are practically impossible to get in this country. We also feel that we do not tie our loans down as tightly or as well as the French or the Germans. I should not like to bore the House, but there are instances where we

845
have given loans to people and the money has been immediately used to buy other than British goods. If we, hard up as we are, are kind enough to give loans I should like to see them tied in a more positive way than they have been in the past, to buying British goods.
My views have been rather lengthily expressed. I have tried to show your Lordships' House what it is like to sell today. I come back always not with anger but to face the challenge because, unlike the noble Lord, Lord Selsdon, however attractive the proposition, I feel that it is not right to go away. There are many overseas propositions which are more attractive than working from this country. I feel we should face that fact. There is one thought which I should like to leave with your Lordships today. If you look at the world today through the eyes of some of our friends on the Continent—and here, if I may have a quick aside. I have been told in Asia, Africa and the Middle East that if only German goods were sold by British salesmen how happy they would be—there is a much more warlike, aggressive posture for survival. This is the economic battle, the economic war, and they are determined to win it.
I feel that the question of exports is at the very essence of British survival. Without exports we shall not win; we shall not survive. I believe that our export performance to date is not good enough. Even at the present rate, with the graph going slightly up as people prophesy, although I am not too sure about it, we are still not in a strong enough position to win through. I would merely say to your Lordships' House that it is time we knuckled down to a hard day's work. There are many people who are willing to tell employers where to go and what to do, but there are not many today who are willing to tell people, whoever they are, that it is time they did a job. If we want to survive and win, we must retune the whole of our export thinking; we have to revitalise and galvanise the whole of our industry. Lastly, I beg anybody who is forced to cut his overheads today—as we all are—to remember that the one area in which he will not be able to make cuts is the export force that he is busy trying to train and build up.
6.2 p.m.
Lord DENMAN: My Lords, I wish to take up your Lordships' time for a few minutes on the Middle East. Before doing so, I should like to congratulate my noble friend Lord Pritchard, who spoke so movingly. I hope that on many future occasions we shall hear his wise words. It is a great pleasure to me to congratulate the noble Lord because I have to declare an interest as chairman of COMET. I was a member of COMET when the noble Lord, Lord Pritchard, was a member of the National Export Council, and later its chairman. Therefore, I regard him as a friend and colleague of many years' standing. Also I should declare certain interests. When one joins boards one has business interests; mine extend over 25 years and include trading and banking. I am now also a member of the BOTB Advisory Council which was referred to by the noble Lord, Lord Beswick; and COMET is one of the advisory groups which he mentioned.
First may I say that I am conscious—as we all are as a result of what has been said this afternoon—of the immense effort which is being devoted to the Middle East. This is right. It is the area of central importance to our economy. May I say also that there are very many people, both in Government and in the Civil Service, who give great service to what we are trying to achieve. Mention was made of the new Middle East Division in the Department of Trade which is staffed by very able and devoted people. On Monday of next week there will be a seminar in London to which we have asked about 200 of the decision-makers in industry. The Prime Minister has agreed to address this seminar, and the Secretary of State at the Department of Trade will also make a speech. This is a measure of the interest and enthusiasm of the Government, and I should not like to do anything but praise it.
May I add that I believe that all of us are pushing at a wide open door. There is no area in the world that is more ready to receive British culture, British people, British machinery, British ideas. It is against this background that I report with sorrow that although the noble Earl, Lord Limerick, told the

847
House about the percentage of increase in our trade, if you look at the actual figures of United Kingdom trade in the first part of this year they are still well under half those of America and about half those of Japan—and Germany's trade is nearly half as much again as our own. This is in an area where we have all these advantages besides those of historic association; and it is the measure of our incapacity to walk through this wide open door that I wish to stress.
May I give your Lordships one or two thoughts on why I believe this to be. All the way through this debate emphasis has been placed on the problem of inflation. This problem is paramount. Until we resolve it we have no hope of restoring the confidence which will gain the business that is available to us. We are no longer believed to be credible exporters. It is a very serious point to state, but I believe it to be the fact.
My next point has been emphasised by many speakers. Over the past two years I do not believe that individual British companies have devoted anything like the effort that they should have done to matching the opportunity. I believe that this is because they have been operating in a period of acute personal insecurity—personal within their businesses, personal to their ambitions, personal to their staffs. I have talked to countless people who have given me the impression that their fight has been for the survival of their companies and of their workforces. In no way is this a base line which is conducive to any kind of export effort and promotion. How can you devote your own personal efforts and those of your staff to exports if you are not sure of your home base?
I should like now to touch on a very difficult issue. Today we have talked a great deal about co-operation between Government and industry. I pay full tribute to the efforts that are being made, but I believe that there is still a great gap to be filled, in that the Governments of the Middle East expect a major British order in some sense to be backed by the British Government. They believe that in certain circumstances the British Government may impose some restriction which will cause the order not to be fulfilled. Certainly this arises out of activities that have taken place in the
848
arms industry field where, for purely political reasons, spare parts have been withheld. This has created a climate of unsureness and insecurity about the attitude of the British Government. We have talked about visits of Ministers, and indeed we have had very great help; but I do not believe that we have yet achieved the situation in which we can convince our friends in the Middle East that British industry and the British Government are pulling as one team to achieve our export successes and the economic relationships which they want and we need.
May I congratulate the noble Lord, Lord Selsdon, on his most moving speech. On the matter we are debating he seemed to me to speak with a sincerity and a dedication that has been unmatched this afternoon. I believe that he has touched the heart of this matter—that we can do everything that is right to achieve the right formalities, the export documentation and everything else, but unless we have the spirit to create confidence and the right relationships we shall never achieve our aim. This is an extremely difficult concept to put over. That spirit comes only from people. It is not done by Government decree or by the direct spending of money; it is done by individuals creating the right opinion. I believe that few people have been able to speak with the kind of confidence that is necessary to overcome the difficulties and to create confidence in the minds of the Middle East buyers—the Middle East Governments.
I would add a word to what has been said by the noble Lord, Lord Glenkinglas. He and I have been working on the agricultural problems in the Middle East to which he so generously referred. I believe that the Vote which he receives is totally inadequate. I compare it with a figure of over £½million which I believe is being devoted annually to the development of the trade centre in Japan. In the development of agriculture we have in this country a situation where we have to overcome enormous problems of organisation—or the lack of it. There is a handful of firms which are what I describe as being in the agri-business. By "agri-business" I mean that they have the manpower, the financial muscle and the experience to manage on a long-term basis, which is what the Middle East

849
countries want. They want major agricultural ventures. It is going to take a great deal of effort by the noble Lord's committee and by other people—and, I believe, a great many resources—to develop the techniques, the companies and the organisations that will match the opportunities. Unless we do this, we shall fail not only in the opportunities that are before us but we may do very serious damage to our reputation in a field where rightly we hold our heads high throughout the world.
May I also add one further word to what was said by the noble Lord, Lord Beswick. He gave an interesting catalogue of the resources available from the Department of Trade, and he mentioned at length the various facilities offered by GCDE. Unless I failed to hear him rightly he made no reference to the investment guarantees which have been in operation for the last two years. These are on an entirely different basis: they are not ensuring credit, they are ensuring investment that is made in an underdeveloped country. It is my experience that the key to many situations is to get an investment from a British company to back up its management skills and its technological know-how in order to provide a firm base for the expansion of high technology industry. If that investment—it may be 10 per cent., it may be 20 per cent.—in the equity of a company is not there, the order will not come to this country. This facility is available and I believe it is working very well; but I believe it is known, and the failure to mention it may be part of the problem—that we are not letting industry know sufficiently of this facility.
In conclusion, may I say that the Middle East is an area of enormous opportunity. I believe many people here think of it as an area that was rich three years ago and today is five times as rich. That is true. What I do not think is appreciated is that these great riches have created a totally new climate of opinion. It is a climate of opinion which we must come to understand if we are to develop successful associations with it. I think the genuine intention to spend their money in support first of their own underdeveloped countries in the Arab world, and then to take the lead in trying, in their eyes, to obtain a fairer share of the world's cake for the primary
850
producers of the world, is creating a totally new world force which in itself has enormous opportunities for us. But I believe it is important for people to go to this area and to understand its rapidly developing new feeling, if they are going to get a grasp of the opportunities that are before us. I hope that the seminar to which I have referred will give impetus to this greater understanding.
6.13 p.m.
Lord WINTERBOTTOM: My Lords, it is a convention in this House to congratulate and thank the noble Lord who introduces a topic for discussion on Wednesdays. May I say that my congratulations and thanks to the noble Earl, Lord Limerick, are far more sincere because I believe that the topic he has raised is of absolutely fundamental importance to everything else we are trying to do. If we can get our foreign trade balance right, if we can get a strong, successful export policy, then it is comparatively easy for us to solve our problems at home. If we cannot get this basic problem solved we shall have to struggle and suffer in all the other things that we are trying to do. So from my own experience I thank him most sincerely.
Having expressed my thanks to the noble Earl, may I also express my congratulations to the noble Lord, Lord Pritchard, who made his maiden speech today. He spoke from great knowledge. He was chairman of the British National Export Council, and of course his experience of industry goes far wider than that. I am not paying false compliments when I say that we are all waiting impatiently for him to speak again. Perhaps noble Lords who spoke first will forgive me if I turn straight away to two points made by the noble Lord, Lord Pritchard, as they struck a chord in my mind.
The first point the noble Lord made and which I felt was profoundly true, and it is something that I have been saying for the last 20 years to a number of people, is that the world does not owe us a living. We have to go out and win that right to live, and live prosperously. He made a point with which I agree; that it is not a question of directors or export managers, but one of the whole organisation of industry understanding what it is all about. The noble

851
Lord mentioned that we ought to get the trade unions involved. Indeed, he may have seen that it is now the intention of the Department of Trade to do just that. It is the intention that should a Minister go abroad on some mission he should take with him, as the French have done, not only business men but also trade unionists. This is of prime importance and is something that in my own commercial career I have always followed: If there was an inward mission from some foreign country one of the very first people they met was the convener of the shop stewards and other shop stewards. I was never able to get people to agree to take them abroad, but I think now it is the policy that the actual representatives of the work people on the shop floor should go out with the directors and the export managers to see exactly what is required, and in fact to get excited by what they see.
In spite of the fact that Mr. Harold Macmillan said it was, I would disagree with the general attitude expressed that exporting is not fun. I do not merely think it is fun; I think it is absolutely absorbing. I admit that one may meet an overflowing earth closet at four in the morning and suffer from an excess of twika. But on the other hand, you can stand on the site of Nineveh; you can see Nimrod; you can have enormous intellectual stimulus in getting to know a new country and this, I know from the experience of people that I have sent into strange parts of the world, is for them terribly exciting. It is a new experience. So I think we must work towards involving everybody in every organisation in the sense of purpose, and often the excitement, and occasionally the pleasure, that comes from major exporting operations.
The second point that the noble Lord made, and which I think is of great importance, concerns pre-shipment finance. In this time of ever-growing contracts this produces major problems wich I think we must consider, although I must say quite frankly that we have not yet quite solved them. May I just tell your Lordships the present state of play on pre-shipment finance, in his Budget Statement on 15th April, the Chancellor of the Exchequer made the following announcement:
852
"I have also decided to introduce a series of measures to encourage the shift of resources into the balance of payments. To facilitate the provision of working capital for exports ECGD will provide facilities to guarantee loans for pre-shipment finance on large export projects. The details are to be announced in the next few days."
That is a statement of intent. But although discussions have continued with the banks over the details of a pre-shipment finance scheme, these have not been finalised, mainly due to the difficulties which the banks feel are produced by a scheme which will by definition involve them in being asked almost to provide or support lending over and above their existing lending limits or the maximum which they consider acceptable for an exporter. I know of cases where firms are trading most successfully, but at the same time are becoming, in the view of the bank, a risk because they are over-trading. They are suffering the penalties of their success. I think your Lordships should bear in mind when considering the problems facing industry those elements of industry which are willing to tackle the great opportunities that now face us.
May I now turn to the opening remarks of the noble Earl, Lord Limerick. I thought his speech was excellent, rational, down to earth and just what was needed. One thing he said was of very great importance indeed, and I should like again to underline this in my speech. Quite rightly, the noble Earl stressed the importance of our invisible exports. The noble Lord, Lord Selsdon, said that if you export something physical, people know you have produced and exported something, but if you export and sell a service, all that happens is that an invisible transaction takes place across the exchanges, but no one sees it. Nevertheless, if we look at history and at the figures for the balance of trade since the middle of the last century, this country has seldom been in positive balance on its visible figures. We have always balanced our accounts on our invisibles, and these are of great importance.
The importance is recognised, but may I recommend your Lordships to read the report by Sir Cyril Kleinwort, the chairman of the Committee on Invisible Exports, which came out last night, and which, therefore, will not have been on your Lordships' tables this morning. I

853
think it is a report written clearly, one which raises issues of great importance. I should like to quote one or two sentences from the first paragraph on page 11, because I consider this to be of fundamental importance. Sir Cyril is talking about the capital transfer tax in relation to invisible exports. He says:
"We are now giving every support to members' representations with regard to the proposed wealth tax and the higher incomes reference which is being considered by the Royal Commission on the distribution of income and wealth. My Committee believe it is of vital importance that the City's financial pre-eminence in Europe, and its contribuition to the balance of payments should not be imperilled by inability to provide incomes sufficient to keep good people in London against all pressures of foreign competition."
What we are talking about is the simple fact that people working in the professions, people who provide our invisible exports, can go anywhere. Thank goodness we are not a closed society! Anyone can go anywhere in the world and earn his bread. For this reason it is essential that a climate should be created in the City where all those various elements which help us to produce these quite extraordinary results in the sphere of invisibles are able to continue to remain and to operate. Egalitarian policy is one that I have always supported, but there is a limit. People with specialised skills are in demand all over the world, particularly in the Middle East, as was indicated by the noble Lord, Lord Denman.
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord, Lord Winterbottom, aware that he is taking precisely the same stand as did the noble Lord, Lord Beswick? He is saying things which must be accepted because they are true. He is paying tribute in areas which deserve tribute, but the whole policy of the Government and their representatives on that Front Bench is to do the exact opposite of what they say is desirable. The discouragement far people to go and do things, whether by tax or the bureacracy, or the separating of unearned income and putting the extra impost upon it, is doing the exast opposite of what the noble Lords, Lord Beswick and Lord Winterbottom, have said is essential for the good of the country. It is a paradox which leaves me quite amazed.
Lord WINTERBOTTOM: My Lords. I am sorry that the noble Lord, Lord Harmar-Nicholls, is amazed. He must realise we are living in changing times, and I am quoting what the Government are doing in fact. There is an element of paradox but nevertheless, the Government are aware of it, and studies are taking place. May I now turn to another point made by the noble Earl, Lord Limerick. This was a point also touched upon by my noble friend Lord Mais. The noble Earl, Lord Limerick, touched upon the possibility of creating a Ministry of Overseas Trade on the lines of the Japanese MITI. I was also impressed by the very important maiden speech made by the noble Lord, Lord Kissin, the other day in which he made just this proposal. The noble Earl cast some doubt upon the possibility, but I would have said that we must realise that, in this country, we are not putting enough resources behind the whole area of exports. The noble Lord, Lord Glenkinglas, mentioned a figure of £20,000 a year as against £5 million. One has only to study what the MITI are doing in Japan to see the sort of competition that we are facing. While there is an element of overkill in all this payment, we must face the fact that many of our competitors are devoting resources to exports which we ourselves as yet are not matching. I am not saying we are doing nothing. The speech of my noble friend has shown the wide range of services we are providing, but we are not making a political issue of this area of study.
My Lords, it would be possible to say that the noble Lords, Lord Carrington and Lord Beswick, could have exchanged their speeches. Both could have said very similar things and we would hardly have noticed the fact that the speeches had been exchanged. Nevertheless, I am sure the whole House supports the noble Earl when he says that we must realise the competition we are facing and the resources we should be devoting to it. I come now to the speech of the noble Lord, Lord Carrington. There were three points in his speech that struck me as being important. Perhaps the most important was the need for high-class representation in the people we send abroad. This is a truism, perhaps, but one that is often ignored. The proposal of the British

855
Overseas Trade Board for special training for export representatives is of the first importance. We should train our export representatives as professionals in their own special skills—in languages, techniques of finance, techniques of approach and so on. The best British firms are as good as any, but we are now talking about the average firm which is feeling its way into the export market. We cannot spend too much time or money on training representatives who we send abroad.
The noble Lord, Lord Carrington, also mentioned the possibility of certain tax concessions on the cost of travel. One has a very great deal of sympathy with this, because if we are now starting to shuttle between this country and, for instance, Caracas or Rio, we are spending vast quantities of money in just getting there. In addition, one stays there in an expensive hotel for a long time. This was a point made by my noble friend Lord Mais. If you are going out to tender for a major contract, you can spend £100,000 as easily as kiss your hand. Whereas it lies within the power of the Overseas Projects Group to pay half the costs of tendering, I believe, first of all, we should realise that at the moment there is only £½ million available to the Overseas Project Group for its export work, which is excellent, and carried out by devoted people. Nevertheless, if we are to send people all over the world to tender for major export contracts, we must be prepared to provide finance for the firms which may not be rich or large, but which have a very good chance of getting contracts if they once get their best men out to these countries, and then let them stay there long enough. How one would manage a general policy of paying for travel for exports I am not sure, but I will bring it to the notice of my right honourable friend the Secretary of State.
My Lords, finally I go back to the point made by the noble Lord, Lord Carrington, in relation to my remarks with regard to the noble Earl, Lord Limerick. The noble Lord, Lord Carrington, mentioned that it might be advisable if invisibles were placed under one Minister. It might be advisable if they were put under a Ministry of Export Trade, the British Overseas Trade Board,
856
for instance, of the 'thirties. It is something that might be considered.
Nevertheless I believe these are soluble problems and we are discussing them in a rational manner, not as a matter of Party policy, merely with a professional view of how we can best compete in a world which is becoming extremely competitive. People have mentioned the success of France and Germany in the Middle East; the noble Lord, Lord Denman, mentioned this. Of course, they are willing to fight according to their own rules. We may be playing soccer, but they are often playing rugby football in these matters. One of the good things that I think we have done with this new power which has been given to ECGD, is to match the credit mix, which is a French concept; it is a mix of normal commercial business with grants in aid. The only problem we are facing is that we have to prove that they do it. If any noble Lord gets any information about other countries—I am not saying France specifically—where credit mix is being used, I am certain that the ECGD would be very glad to hear of it.
Lord GLENKINGLAS: My Lords, I am grateful to the noble Lord for allowing me to intervene. As he knows, I have had a good deal to do with ECGD. I do not know of a single case where matching has got the contract. I know it sounds good, but once you get to the stage where somebody else has the contract fixed, the fact that you can match it never wins it.
Lord WINTERBOTTOM: My Lords, I think this is very true, but it is helpful if information can be fed back, with no publicity, to the Government Departments trying to help us in this difficult area. May I turn now to the points made by the noble Lord, Lord Glenkinglas. I found them extremely interesting because I have some agricultural yearnings even if I am not an agriculturalist myself. Those of us who have seen the desert blossom like a rose will realise the exciting potential of these desert areas. Supply them with water and a certain amount of black soil and at once things begin to grow. Even Riyadh, which is a rather dry town, is now becoming quite green because of the water that is available to the trees and plants and so on.

857
As the noble Lord says, this country is in fact in the forefront of agricultural theory and practice. He made one point with which I agree completely, and it does not only apply to agriculture but to every operation we are undertaking in that part of the world; that is, that it is no good sending livestock and high-grade specialists there. You have to have the chaps underneath who can do the technical work; the technician is as important as the expert in this area. This also, of course, is what he means by after-sales service. It is really to make certain that, having delivered your flocks, herds, seeds, machinery, there are men there who will make certain that the things you have sold are satisfactory and a success. This is true, of course, of almost every other operation, hospitals, desalination plants and the rest.
May I now turn to the points made by the noble Lord, Lord Denman, and I am speaking having made my first trip to the part of the world in which he is so expert. I would agree completely that we are moving into a new world there. Something has happened. An explosion has happened in the Middle East which is breaking the moulds of our thought and way of life throughout the rest of the world. At the end of the day, uncomfortable though it is at the moment, it will be to our good. We will have to adapt to it. But, if this explosion of power—monetary power and real power—arising from the OPEC policy on oil prices had not come about, we would have talked ad infinitum about the needs of the developing countries et cetera. Now we have really to take their needs seriously, because the whole of the balance of power in the world is changing.
I find this encouraging and exciting. It is a challenge which has to be met. It is a new world force. Let us hope that the people who wield it will wield it wisely. I think it is really a question of education. The noble Lord has mentioned the seminar next Monday. The whole business of teaching people what is happening in the world is a continuing process. I believe, at the end of the day, the opportunities are very great, and if the Government can find the resources—and I am certain the determination exists to do so—then we will be able to gather to ourselves the benefits that will come
858
from this great interchange of ideas and potential between ourselves and this new world that is opening up in the Middle I East.
At the moment we are in difficulties, but I believe that our standing there is good. If we can recapture our credibility as reliable exporters—and I know we can, given the effort—I am certain the future that lies there for us is very bright indeed. May I turn finally to one of the remarks made by my noble friend Lord Mais; that we have reached a crossroads. I believe it is true to say that the "picturegram" in Chinese that represents "crisis" is disaster or opportunity. We in this country do not accept disaster, but I think we are willing to grasp opportunity, and this is what I think the present situation will enable us to do.
Lord HARMAR-NICHOLLS: My Lords, I am rather surprised that the noble Lord did not make any comment on the speech of the noble Viscount, Lord Slim. I thought it was down to earth, realistic and worthy of comment. I was wondering why it was omitted from what was otherwise a very detailed answer to the debate.
Lord WINTERBOTTOM: My Lords, I try to speak within limits of time. I have spoken for 25 minutes and I think that is probably long enough. I would have liked to comment at length on many speeches, but there is a time limit.
6.38 p.m.
The Earl of LIMERICK: My Lords, the House will certainly not wish me to speak more than a few moments, least of all the noble Lord, Lord Brockway, waiting patiently in the wings, and especially after the most helpful summing up by the noble Lord, Lord Winterbottom. My task, anyway, is easy, because we have had a remarkable coalition of Benches and all the speeches following mine were wholly admirable; they were eloquent, well-informed and constructive. So my thanks to those who have so carefully thought out their contributions and given their time to attend are both deep and sincere. I am not sure what is the male equivalent of Susanna among the Elders, but whatever it is I feel that I am it. I have sat succesively in various trade promotion

859
bodies at the feet of the noble Lords, Lord Pritchard, Lord Denman and Lord Glenkinglas.
In general, I was struck by the number of speakers who picked up the point of the necessity of shop floor involvement, the point I made myself, and commitment to exporting. I hope this message will go out loud and clear. I see that the noble Lord, Lord Feather, is here, and perhaps we might enlist his advice on how to proceed. The other message which was astonishingly general was the fact that we had all had some experience over the years with Land Rovers. Perhaps that also will go out from this debate. I was delighted that the noble Lord, Lord Beswick, underlined so strongly the message about inflation and the fact that the best service to exporters lies in the creation of a healthy manufacturing sector. He touched on the shortage of skilled labour, and, of course, this is a constraint. But it was the Chancellor of the Exchequer who said recently that to make full use of our present unused capacity would have more impact in the short term than a decade of investment. I think this is a point that we need to have strongly in mind. My noble friend Lord Carrington pointed out that the Government can hinder, but perhaps not help very much. I think this was a little bit inverted in the summing-up Certainly one must agree that the attitudes of salesmen have changed, and one can share frustration at the failure to invest in success, and again we think of the Land Rover.
The maiden speech of my noble friend Lord Pritchard was one on which he has been widely congratulated. It is most indicative that, though he is sitting in the middle of this House, he is referred to as everybody's "noble friend". He has this great experience, and has reinforced the message about de-stocking. I was grateful to him for his mention of the National Exhibition Centre, which I visited yesterday. We had a meeting of the British Overseas Trade Board in Birmingham. It will be an enormous asset to our British exporters, and I endorse most strongly the commendation of all the initiative that has gone into that. It is proceeding on time and, as he said, should be open for business in February. Again, my noble friend was so right about
860
this question of reconnaissance. I was charmed that he felt able to put his benediction on the Overseas Trade Board, and he left us with the same point about the involvement of the shop floor.
The noble Lord, Lord Auckland, is always listened to with much attention when he speaks on the insurance industry. I am grateful to my noble friend Lord Selsdon. He made two points which I had no time to make, particularly about the co-operation of the Government and the private sector in opening up certain markets where the Union Jack can and should be planted as a matter of Government will. Secondly, I strongly endorse his reference to the role of the nationalised industries, flowing both from their procurement programme and also their role in the consultative field. I should like to see it done even more, specifically in airports.
The noble Lord, Lord Mais, pointed out that many manufacturers now find exporting more profitable, partly at least because there is no formal price restraint in the form of a Price Code, but the price limit is now being imposed by competition, as he recognised. He made the most valuable distinction between export generation and export promotion, and I would echo his tribute to the work of the London Chamber in promoting East/West trade. One of the missions to which I referred earlier, and which I was privileged to lead, was a London Chamber mission to Rumania. My noble friend Lord Glenkinglas helped me to survive my first weeks in the Department of Trade and Industry. He filled a yawning gap in our debate on agriculture. His mention of joint ventures and inward missions was most apposite. People have to come to Britain to realise how it is that 2·8 per cent. of our population can produce 3 per cent. of the national product, and 50 per cent. of our food needs. Finally, on after-sales service. I hope that all the after-sales service in his agricultural field will be provided by pedigree British bulls.
The noble Viscount, Lord Slim, among a wealth of valuable and earthy information about weeks in the life of a travelling salesman, made a very valid point about the desirability of promoting more package deals. That was taken up by the noble Lord, Lord Denman. I should not like to leave the noble Lord, Lord

861
Selsdon, with a monopoly in his offer to help with the promotion of such ventures. I, too, would be personally interested to hear about them. My noble friend Lord Denman expressed admiration for the Government's services in relation to the Middle East. This I echo, and I strongly reinforce his points about joint working of the Government and private sectors, both in agriculture and industry.
The noble Lord, Lord Winterbottom, pointed to the invisibles. I think I am right in saying that there has been a positive balance of trade only five times since 1800, and, strangely enough, two of those years have been within the last five, so that is the foundation of a great deal. He must have second sight, because the point he made on invisibles and taxation was one that was in my speech. I omitted it only because I thought I was going on much too long, and I was delighted to hear it from that Dispatch Box. On the Ministry of International Trade, I merely said that there was no time to deploy the case. I regarded it as not proven. But I am delighted to hear that he is looking seriously at it. It remains only for me to renew my thanks to all those who have participated and have stayed to the bitter end. I ask leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

CONFERENCE ON SECURITY AND CO-OPERATION
6.45 p.m.
Lord BROCKWAY Lord BROCKWAY rose to ask Her Majesty's Government what achievements they foresee at the third stage of the European Conference on Security and Co-operation. The noble Lord said: My Lords, it is the hope of many of us that in a few weeks—the date is uncertain, it may be in a few months—the representatives of 35 nations will meet to consider the most far-reaching proposals for peace and co-operation that have been made since the Second World War. The composition of the meeting is quite extraordinary. It will include representatives of NATO and of the Warsaw Pact Alliance—among them, on the NATO side, the United States of America and Canada. It will include all the Governments of Western Europe, the neutral
862
Governments as well as those which are part of NATO. It will include from Eastern Europe, Yugoslavia, which is not part of the Warsaw Pact Alliance. It will even include the Mediterranean countries, Spain, Malta, Cyprus, Greece and Turkey. This is a really remarkable occasion of the comprehensive representation of all the Governments which are concerned in Europe.
I mentioned just now that the date is uncertain. The hope is that the Conference will be held in Helsinki on 28th July, and even at this late hour it is the fervent hope of many of us that it may take place. If that does not happen at the end of this month, it will take place in October. The Question refers to the third stage. The first stage was two years ago at Helsinki, when representatives of all these Governments met and decided to set up first in Vienna a meeting of representatives of East and West to seek to balance their military arms. Secondly, they set up commissions in Geneva, which were to seek agreement on almost every aspect of co-operation between East and West. One has to acknowledge that the Vienna meeting, seeking some mutual military reduction, has been disappointing, though in recent weeks it has gone further towards agreement. This only emphasises the conclusion, to which I am becoming more and more drawn, that disarmament in the world is likely to take place not as a result of two sides seeking military agreement, but by greater political, social and economic co-operation between the peoples of the two sides.
The commissions which have been meeting at Geneva have had quite extraordinary success. For some technical reason they are not called commissions. I am amused to find that they are called "baskets"; a proposal made by the French Government. There has been the most amazing agreement on political principles, and economic, social and cultural co-operation at these gatherings in Geneva. I acknowledge that I am in some difficulty in that those agreements have not yet been published and I have to rely on unofficial information which I have received, but which I am convinced is reliable. I acknowledge that the Minister who will reply is in some difficulty; no doubt he is aware of the agreements which have been reached, but because they are not yet public he will be unable

863
to comment on what I say. I can only say I very much hope that what I report will represent the actual achievements at Geneva.
First, I recognise that most of the political agreements are platitudinous; they are all accepted in the Charter of the United Nations and in the Declaration of Human Rights—the recognition of existing frontiers unless they are changed by agreement, and so on—but there is one principle which has been accepted by East and West which seems to be extraordinarily significant. It is that all the Governments concerned
"… respect human rights and fundamental freedoms including freedom of thought, conscience, religion or belief for all without distinction of race, sex, language or religion".
That is a quite extraordinary acceptance of human rights by some of the Governments who have signed it, not only the Communist countries but, for example, Spain and Turkey, and I will later suggest ways in which it will be possible not only to accept these principles but to urge their implementation.
I turn from the political agreements to the extraordinary comprehensiveness of the agreements reached at Geneva by the commission, or "basket", which was dealing with economic affairs. That commission has agreed on co-operation, first, in large-scale projects relating to energy and raw materials; second, in electrical power; third, in the peaceful use of economic energy; fourth, in road networks across frontiers; fifth, in unified systems for shipping on rivers crossing frontiers; sixth, in the protection of the environment; seventh, in the development of economic ties; eighth, in scientific and technical co-operation; ninth, in transport; tenth, in tourism; and eleventh, in the training of personnel in economic activities. There was until yesterday still some disagreement regarding the "most favourable treatment" arrangements between countries. This astonishing area of agreement in the economic sphere indicates that we are now approaching a situation in which the new economic pattern for Europe can be established unitedly, both East and West.
The most difficult subject discussed at the commissions in Geneva was the
864
freedom of movement, information and ideas. The West stood for the principle of these freedoms and I welcome that fact. Those of us who are libertarians feel that we are citizens not only of this country but of the new groupings of nations—citizens of the world—and we want to see the freedom of movement of all peoples, and the freedom of information and ideas across frontiers. However, your Lordships will forgive me if I say that the West was a little illogical in making that stand for those principles. Western countries also have their limitations on the movement of peoples. We have our immigration laws and the West also has its limitation on freedom of ideas and association; for example, many countries, including Western Germany, make the Communist Party illegal. The Communist representatives at Geneva declined to accept the principle of absolute freedom, but they made considerable concessions. According to my information, these included the reunification of families across frontiers, intermarriage across frontiers, access to private information including newspapers and journals across frontiers, cooperation in the provision of the study of foreign languages and free access to and exchange of arts and cultures. As a libertarian, I should have desired much more, but we must be realistic. The extension of freedom as some of us would desire will take place only as trust and confidence between East and West develop by the implementation of the decisions which have been reached.
This summit meeting of the Heads of State at Helsinki will take place with this extraordinary volume of agreement in recommendations. How will they be implemented? What are the means of implementation? They are not to be legally binding. I make this suggestion for consideration by the Government. Even if they are not legally binding, it would be possible for conventions to be established which would subsequently be recognised by Government for ratification. Secondly, as to the means of implementation, if this extraordinary sphere of agreement—social, economic and cultural—is to be implemented, there must be permanent commissions, representing East and West, to plan. There must he experts in continuous session, with the right to call representatives of industry involved to work out the success of the

865
proposed co-operation. It may be necessary for those commissions to bring pressure for co-operation through the national Governments. The acceptance of the agreements on the movement of peoples, information and ideas, should be open to continuous surveillance by these commissions.
It has been suggested that annual review conferences would be enough, but they would not. They should take place every year to hear the reports from the continuing commissions, and to consider further proposals as they are made. For example, at this moment, the island of Malta is suggesting that the Mediterranean should be made a "lake of peace", and that both the American and Soviet navies should be withdrawn from the area. That is too much to hope for now, but I believe that this conference could be made the great breakthrough for peace in the world. NATO and the Warsaw Pact Alliance are the main instruments of confrontation between East and West. When this proposal was first made, it was suggested that their military aspects should be ended. That is too much to hope at this third stage of the renewed conference at Helsinki. It is not too much to hope at the fourth, fifth or sixth stages, if we accept this great opportunity for peace in the world. My Lords, I ask this Question and I hope that, from other Members of this House and from the Minister, we may have encouragement that this hope of destiny may be fulfilled by the co-operation of the Parties here and of the Government.
7.7 p.m.
Earl COWLEY: My Lords, I feel that the whole House must be grateful to the noble Lord, Lord Brockway, for asking this Unstarred Question. As the noble Lord has said, the first two stages of the European Conference on Security and Co-operation have taken nearly two years and, with the likelihood of the third stage taking place at the end of the month in Helsinki, this is an extremely appropriate time for the House to discuss the issues involved. When Mr. Wilson goes to the Heads of Government meeting, he will at least have heard the views of one of the Houses of Parliament.
We on this side of the House are in favour of improving relations with the
866
Soviet Union and the Communist bloc countries. However, our support for detente is dependent on the proper maintenance of the security of Britain and of the West. It is noticeable how the Russian defence policy seems to operate independently of any moves by the Soviet Union towards détente with the West. Thus, irrespective of any developments at the CSCE talks in Geneva, the Warsaw Pact countries continue to expand their armed forces. We now have a situation in which the balance of power between NATO and the Warsaw Pact countries is vastly in the latter's favour. One has only to look at the Government's own White Paper on defence to see that, and the military balance of NATO's central front is one to two in the Soviet Union's favour. Thus, while Britain is cutting its own defence forces, the Communists are expanding theirs.
While we want a successful conclusion to the Conference, it would be wrong for the moves towards détente to be used as a reason for further savage defence cuts by the British Government. I hope that the noble Lord, Lord Goronwy-Roberts, when he answers this Unstarred Question, will give the House the Government's assurance that détente will not be used as an excuse for further reducing the security of the country, and that they will resist any possible pressure from the Labour Left Wing to take the country down that path in the name of détente. Although I recognise that military and defence questions are the concern of the mutual and balanced force reduction talks in Vienna, and that only peripheral questions are now being discussed by the CSCE, to divorce the two would be the height of folly. One can properly judge relations between East and West only by looking at the whole picture, not at just one part of it.
I believe that my noble friend Lord Home of the Hirsel struck the right note during his debate on 30th April this year, when he said on the subject of the Conference on European Security and Co-operation:
"… we should not concede any point of substance unless it is matched by a concession of equal weight; we should not allow any treaty that we have signed or intend to sign to be broken without bringing the breach immediately to the public notice and releasing ourselves from the obligations assumed unless that breach is rectified at once. The price in terms of security of turning a blind eye

867
to Communist deception is too high."—[Official Report, 30/4/75; col. 1260.]
I believe that the contents of Basket 3 which, as the noble Lord, Lord Brockway, said, concerns improved human contacts and the freer and wider dissemination of information, are the most important from the point of view of this country and the West. While the reunification of families, the increased meetings of their members across frontiers, and marriages between citizens of different States in the East and West are excellent objectives, none of them is subject to any form of guarantee on the part of the Soviet Union. Each is preceded by a nebulous preamble; for example, such phrases as to give "favourable consideration" to, or to consider in a "positive and humanitarian way". Improved access for Western newspapers into the Communist bloc is an advantage to us, and so is the greater freedom to Western journalists. But of course this is entirely one-sided, since Soviet newspapers are already being sold in this country and journalists from the Eastern bloc countries can operate with comparative freedom here. But whereas we in this country think of security in terms of freedom of access and movement, the Soviet Union thinks of it in terms of control and non-interference in its sphere of influence.
Consequently it is Basket 1, with its declaration of principles and its military confidence-building measures, that appears so attractive and important to the Communist bloc. Of course it is necessary to remember that any agreed CSCE documents, which are signed by the Heads of Government, are only of political, and are not of legal, status. However, the Soviet Union still appears to hope to set the final seal upon its European conquests of the last war, and to gain the recognition and acceptance by the West of its declaration of principles, which include the non-interference in the affairs of one State by another, the inviolability of frontiers, and the preservation of quadripartite rights in Germany.
My Lords, I trust that the CSCE documents will not produce this result, and I hope that the noble Lord, Lord Goronwy-Roberts, will confirm this point when he speaks. It is perfectly obvious that the declaration of principles is in complete contradiction to the Brezhnev
868
doctrine. The rejection by the Soviet Union of the tough Rumanian proposal to prevent the USSR doing a "Czechoslovakia 1968" on them, or on any other country for that matter, proves that when the cards are down it is the Brezhnev doctrine that counts. Thus I am certain that despite the Conference and any decisions that are taken there, the Prime Minister will have another opportunity to forgive and to forget with alacrity.
I feel that one should be realistic when considering the military confidence-building measures and the exchange of observers and prior notification of manoeuvres. The Warsaw Pact countries can invade Western Europe whenever they want, and thus these provisions can only be of real benefit to us, because I believe it would be highly unlikely for Western European countries to invade Eastern Europe. It is interesting to note that where it suits the Soviet Union they are willing to overlook ideological considerations. At the moment they urgently need Western technology, and therefore ideology takes second place. The involvement of the European Commission in the discussion on the commercial and the industrial exchanges is of vital importance, since its involvement, and the possible agreements in this area, could provide a future framework for Pan-European trade. I agree with what the noble Lord, Lord Brockway, said on this point.
I strongly urge the Government to tread with very great care when they come to consider any follow-up to the Conference. I believe that any permanent secretariat—as I believe the noble Lord, Lord Brockway, was advocating, if not in detail, then in spirit—if set up immediately, could provide a very useful propaganda platform for the Soviet Union against a Western Europe that appears to be split and divided. I feel that a better course would be to wait and see how matters develop over the next couple of years, then look to see to what extent tile Communist bloc countries have fulfilled the terms of any agreement that is reached, and consider then what course to follow there. This is the only realistic approach to take.
It should never be forgotten that in seeking detente the aims of the Soviet Union and its allies are not the same as I those of the West. To the Communist

869
bloc peaceful co-existence means the continuation of the revolutionary struggle by all means short of war. On Moscow radio on 14th October last year it was said:
"In conditions of peaceful co-existence the ideological struggle between the two worlds and between the two ideologies not only does not cease, but, on the contrary, intensifies. The forms and methods of this struggle change, but the struggle between the ideology of scientific Communism and the ideology of the capitalist system of exploitation cannot cease until the complete liberation of labour on our planet."
This bears out an earlier statement by Mr. Brezhnev himself, who said:
"While pressing for the assertion of the principle of peaceful co-existence, we realise that successes in this important matter in no way signify the possibility of weakening the ideological struggle. On the contrary, we should be prepared for the intensification of this struggle and for it becoming an increasingly more acute form of struggle between the two social systems. We have no doubt as to the outcome of the struggle, because the truth of history and the objective laws of social development are on our side."
Thus, we on this side of the House believe that détente, although very worth while and something of which we are in favour, is no substitute for defence. On balance we are properly in favour of the results of the CSCE, but without the documents mentioned by the noble Lord, Lord Brockway, we must reserve our position until we have seen them.
In the long run it is not a signed piece of paper that will matter, but the extent to which its terms are implemented by the parties to it. The peace of Europe has in the past been broken not because there has been a lack of treaties of nonaggression or statements of good will and friendship, but because countries have refused to respect them. A practical approach must be maintained. Any lack of fulfilment in one sector would no doubt affect the others. If there are rotten apples in one basket., then the other apples in the other baskets will become affected. It will be on the results, rather than the intentions that the CSCE will be judged. As for myself and my noble friends, we are in favour of détente, but it must be in the form of realism.
7.19 p.m.
Lord SOPER: My Lords, first, I wish to thank most heartily my noble friend Lord Brockway for his introduction of this theme and for the pressing of the
870
Question to which it is hoped the Government will give a reply that will be creative and that will move towards the type of change which the noble Lord so eloquently described in the penultimate part of his speech. I must confess myself bitterly disappointed with what the noble Earl said. May I say to him professionally that where you are dealing with two bunches of sinners, it is always the worst of tactics, and is liable to the most lamentable of mistakes, to assume that all the evil lies on one side and by judicious selection of the delinquencies of one side, one can give the impression that the other side has been whitewashed into purity. This is not so. It would have been possible to have arranged and deployed arguments that would have proclaimed the same kind of delinquency on the part of the Western Powers as has been advocated and, at least, deployed by the noble Earl. May I remind him that there is an elementary mistake in saying that if you have two baskets of apples and one of them contains bad apples, the other basket will be liable to the bad apple infection as well. Not at all! If you have the kind of situation in which you are prepared to recognise the competing and complementary conditions that prevail in both sorts of apple baskets, then I believe you have the opportunity of the kind of inquiry to which we are invited to attend at this moment.
Earl COWLEY: My Lords, whether one basket could be contaminated by the other depends upon how close they are together and how much one is dependent upon the other.
Lord SOPER: My Lords, I was going on to say that as a matter of fact it would seem that the contents of my noble friend's speech is almost totally unknown to the majority of people who ought to be concerned about it. This is lamentable and, in my judgment, a matter of urgent trouble. I believe that there is widespread complacency with regard to the military situation and the nuclear threat that now confronts us all. I believe that that complacency is to some extent due to the attitude of the Press, but I think also due to a widespread prejudice in favour of the idea that at the moment the mutual terror of the nuclear threat neutralises the situation and provides for the kind of freedom from the likelihood

871
of war to such an extent that it can postpone its possibility. This is "Cloud Cuckoo-land" logic; rather like the man who falls over a cliff and comforts himself halfway down with the thought that so far he is getting on very well. The fact that the calamity has not happened is not due to the assurance that it will not; but to the size or the height of the cliff. We are already and continuously in a position of ever-increasing urgency and ever-increasing danger.
I would respectfully ask the House to consider one or two aspects of it. I remember clearly—and it sends still a shiver down my spine as I reflect on it—something that my noble friend, Lord Snow, said about the proliferation of nuclear weapons: that even if these weapons are not intentionally fired, the probability of an accident and a chain reaction to that accident becomes more cumulative as the number of those weapons increases. This constantly haunts me because there is a proliferation of nuclear weapons. There are far more triggers and far more fingers on the triggers. Twelve countries now, in addition to those already in possession of the know-how can, within a short time, provide themselves with nuclear weapons. We have already ten times the overkill and the results of the SALT talks were not to reduce the power of the nuclear threat but to add a great deal of power to the multiple warheads on both sides of the Atlantic.
Furthermore, the Clausewicz doctrine that a particular war is the inevitable consequence of the policy of which it is a continuation is illustrated not only by the problem of Cuba—in which the outstanding historical fact was not that Khruschev was deterred but that Kennedy was prepared and probably was within half an hour of using the threat of war and deploying instruments of perhaps nuclear war—but that only on Monday of this week Mr. Schlesinger, the Secretary for Defence in the American Government, made a declaration which is ominous, repetitive and supremely dangerous. It is that the Ford Government has no intention of changing the attitude hitherto preserved by the United States of being ready for a first-strike nuclear threat and not a retaliatory one; and, that that threat of using nuclear power as a first strike would not be limited to the one
872
or two occasions which in the past have been advertised as qualifying for that atrocity.
These are matters which, for me, make the question of security far more important even than the question of cooperation; although I agree with my noble friend that one of the best ways of creating détente is to provide in the economic sphere and the social sphere opportunities for such co-operation as will reduce the fear and the distrust which prevails in the military sphere. But it is noteworthy that in this matter there has been considerable and outstanding success in the economic and social spheres and prospects of even greater success. This stands in stark contrast to the lack of success in the military sphere.
The inquiry should be made by all concerned as to why this has happened. I suggest that two of the reasons are obvious. One is that where fear is dominant, rational thought is at a discount. Where war is concerned, or preparation for war, nothing is more true than the observation of Sir Winston Churchill that lying in wartime is an indispensable ally. I do not know what actual conditions prevail in Western Europe. I read—and if I were not standing in this tribune I might advertise the document from which I derive this information—that what has been going on in the calculations in Europe as to the relative strengths of conventional forces may not be true and in many cases is obviously false. Nevertheless, I would not wish to disagree with the proposition that conventionally the weapons of the Eastern bloc are superior in number and perhaps in efficiency to those of the Western bloc.
Therefore, whereas with economic and social matters, reasonable thinking and the quiet atmosphere of conference may provide the right opportunity (as hitherto it has begun to do with the kind of changes for the better which have been succinctly represented by my noble friend), yet fear and lack of information and distrust prevail in the military sphere—and here I would disagree with the noble Lord, that there is a great deal to be done in allaying the kind of suspicions and rebutting and repudiating many of the extravagent claims made on both sides and not a few in your Lordships' House in the debate a few days

873
ago. Therefore, I hope the Government will press for certain realisable unilateral decisions in the light of the kind of situation which will not respond, however much we hope it might, to the administration of conference and the opportunities of close reasoning.
My Lords, for that reason, I would make three observations. First, I hope that Her Majesty's Government will try to do something to restrain the iniquitous and increasing wickedness of the arms trade which has grown enormously over the last few years. In many cases the only way to get oil—at least for some countries—is to sell arms, obsolete, outdated or, even, the most sophisticated. This is a wicked and dreadful business. I hope the Government will present at the convening of this Conference their declaration on this matter and make constructive proposals. Then I hope the Government will foresee the opportunity of a further reduction in armaments; but when I say "reduction in armaments", I am aware that hitherto the deterrent of the nuclear power has operated until people have realised that a conventional, more gentle bomb that is not nuclear nevertheless has a lethal effect. We may be in the position where the nuclear threat is not so dominant as the conventional one. Therefore, I do not believe partial disarmament is really much good, and I ask the House to bear with me for a moment in considering this matter. It may sound somewhat strange to people to think this is a practical suggestion.
I have lived long enough to come to the conclusion that there is something crazy about the attitude of the crossing-keeper who opens one of his two gates when he is half persuaded that there is a train coming. I do not believe that in the issue of disarmament there is anything which stands between a total commitment to full armament and total rejection of the whole instrumentality of violence. This is a pacifist position, and I make no apology for advertising and advocating that in your Lordships' House. I know it is universally repudiated in the high quarters of Government; I know it is regarded as jejune.
I reflect that CND is a long time ago. Where have all the flowers of its enthusiasm gone? I would not pretend
874
that only I am left—and certainly they do not seek my life to take it away. There are others in your Lordships' House this evening who marched in the wet and the rain and were very close to a victory. We now realise that as we marched our Achilles heel was that we sang, "We shall overcome some day". Time was not on our side, and I would claim from this House that the situation is just as urgent and imperative now as ever it was. You will halt this iniquitous and dreadful business of nuclear power not when a conference will agree multilaterally to do so, but when one country is prepared to take the unilateral risk of encouraging the others by its overt act to do that.
There are 12 countries in the process of getting their own nuclear weapons. I believe a country like the one in which I live could have a moral effect which far outdistanced the practical arguments which could be advanced against it, if it were to say, "We will unilaterally give up the nuclear threat, nuclear arms, and invite others to do the same." I know the arguments. I stand in open spaces and defend this position from time to time. I know there are all kinds of arguments which can be proposed against it. We are in an absolutely critical condition, and I wonder whether we have much more time. I entirely and heartily subscribe to what my noble friend said about the need for recognition of and welcome to the prospects that lie within the economic and social opportunities of this renewed Conference, and I believe it is worth while to continue to talk with those with whom we profoundly disagree and, in many cases, accept what they say.
But, above all, the time is still right, still apposite, for taking that final step of saying that we have argued, some have prayed, we have thought about it and it is not happening; we are in a world of absolute crisis, and it needs another kind of attitude. The CND was right. I hope that the Government take their courage in both hands and offer this Conference a CND, a campaign for nuclear disarmament, and take the initiative by saying, "We will be the first to put it into practice."
7.34 p.m.
Lord BANKS: My Lords, I should like to join in expressing gratitude to the

875
noble Lord, Lord Brockway, for initiating this debate today through this Question, so enabling us to discuss the Conference, and also to hear the Answer which is to be given by the noble Lord, Lord Goronwy-Roberts. When the Conference on Security and Co-operation in Europe began in July, 1973, it was widely felt that the Russians were looking merely for a means of securing ratification of the status quo in Europe, a freezing of the present division in Europe. The West were thought to be taking part in the Conference more for appearance sake than from any hope of anything practical coming out of it. It was described as a Conference about the cosmetics rather than the practicalities. It seemed that the discussions about the real problems of European security would take place outside that Conference in the SALT talks, the talks about a balanced mutual force reduction, and in the normal meetings of Heads of Government and other Ministers which are constantly taking place. The Conference, too, in these past two years has been taking place against the background of the increasing preponderance in conventional military power of the Warsaw Pact countries. This very fact is bound to put Western countries on their guard, and I think that they are entitled to ask: If détente is the genuine aim of the Russian Government, why is this preponderance in forces required?
We all agree in this House that Russia does not want a major war. But what does Russia mean by "peaceful co-existence"? Does it mean the acceptance of the maxim, "live and let live", or does the Russian Government wish to extend its dominion wherever it can do so without danger to itself? So far as Russia is concerned, is it just an obsession with the fear of attack from the West and East, or possibly both, with the Warsaw Pact countries in the West regarded as essential buffer space against such a contingency? Or is there a design to turn the flanks of NATO, to outstrip NATO in military power, so as to bring Bonn, Paris and London as much under the shadow of Moscow as Helsinki is today or, ultimately, as much under the domination of Moscow as Prague and Budapest? The fact is we cannot be sure and, faced with the conundrum of Russian intentions, although we may sincerely desire
876
détente, we cannot abandon entirely a hard-headed vigilence.
In the light of this fact and position, how should we judge the likely achievements of the Conference on Security and Co-operation? It has been divided, as the noble Lord, Lord Brockway, told us, into three different sections: political cooperation, economic and scientific cooperation, and freedom of movement and information. I shall be interested to hear how the noble Lord, Lord Goronwy-Roberts, feels that the political co-operation section has advanced. There cannot be anything against re-stating a belief in the peaceful settlement of disputes without the use of force. But, as the noble Lord, Lord Brockway, pointed out, the nations participating in the Conference are already committed to that course under the Charter of the United Nations. While it may be encouraging to have it stated again, it does not take us very much further forward. Then there is the endorsement of the sovereignty of nation States. Everything depends on how that is interpreted in practice, and one cannot help bearing in mind the fate of Czechoslovakia and Hungary.
Then we come to more specific details such as the warning which is to be given where manoeuvres of troops exceeding a certain size are taking place and within a certain distance of frontiers. That is of course to be warmly welcomed; but so far as the main security problems of Europe are concerned, it is peripheral. The same is true of observers attending manoeuvres from different sides of the Iron Curtain—something else to be welcomed, but not in itself something which goes to the heart of European security problems. It seems to me that agreements on this section are in danger either of being platitudinous, depending entirely on the test of practice, or else though welcome, to be peripheral to the problems of European security.
Lord BROCKWAY: My Lords, may I interrupt? Is the noble Lord aware that only yesterday agreement was reached between the Communist countries and the West on this issue of manoeuvres? The area from the frontier was agreed and the strength of the arms was agreed. This gives another indication of the quite surprising agreement which has been reached in these discussions.
Lord BANKS: My Lords, I am grateful to the noble Lord for his explanation of the position. I was aware of that and welcome it. But I do not think it alters my interpretation, which is that it does not go to the heart of the European security problems, although it is an indication of relaxation of tension and, as such, is warmly to be welcomed. I am not trying in any way to belittle these achievements, but am merely trying to put them into perspective. If they are not put into perspective, there is this danger of platitude on the one hand, and useful, but not fundamental, improvements on the other, which we must welcome as far as they go.
In the economic and scientific section, I believe there has been good progress, although there were the difficulties to which the noble Lord, Lord Brockway, has referred concerning "most favoured nation treatment", reciprocity and so on. However, this is a sphere in which, as I believe the noble Earl, Lord Cowley, has already pointed out, the Russians need help and assistance. All that can be achieved under this heading must clearly help to improve good relations; but I think it has a limited, though not negligible, impact upon the problems of political security.
When we come to the section on freedom of movement, we should congratulate the NATO and EEC nations on the way they have been able to act together in putting their proposals before the Conference. I know that the noble Lord, Lord Goronwy-Roberts, has paid tribute to that in your Lordships' House on a previous occasion. Here, again, there seems to have been some useful progress and one must welcome the reunification of families and intermarriage across frontiers, and so on. I should like some further information, if the noble Lord can give it when he replies, about access to information and exactly how far agreement has gone under that head. Cultural exchanges, again, are always to be welcomed, but they are one of the easiest areas in which to come to some agreement.
It seems to me, trying to get an overall picture, that there is an exposition of good intention, together with a number of useful points of agreement; but one wonders whether this really justifies the title
878
of the Conference. Is it not difficult to believe that European security will indeed rest on these decisions, welcome though they may be and important in some respects though they may also be? I should like to ask whether the noble Lord feels there has now been sufficient agreement and achievement to justify the calling of a summit meeting and, if so, when such a meeting is likely to be held.
Finally, there is the question of follow-up. The question of joint institutions between East and West has been mentioned. I wonder whether the Government have absolutely set their faces against that. It is one of the aims of the Russians in their negotiations to secure that, but it seems to me there may be a case for some form of experiment in this direction. An all-European body to guard the inviolability of national sovereignty, for example, might well be worth while. It would be in some ways a safeguard against the Brezhnev doctrine, but the basic conundrum of long-term Russian intentions, which I mentioned at the beginning, is left unresolved. The military imbalance remains. I greatly welcome any progress towards détente and indications of progress towards it in this Conference. I hope that when the Minister replies he will be able to encourage us regarding the extent to which progress has been achieved in this Conference. But I am sure he will agree that the price of liberty for the West continues to be political and military vigilance.
7.45 p.m.
Lord HALE: My Lords, this is for some of us almost an emotional occasion, because my noble friend Lord Brockway has opened a discussion which is very up to date and very à propos, and which advocates those ethical principles with which his name has been associated for 70 years. If there is anything in my own life of which I am particularly proud, it is that I have been in intimate association with him in many spheres and in connection with many political projects. Always there have been the same ethics since his re-election to Westminster, after an interval in 1950. It was with the noble Lord, Lord Brockway, that in Paris shortly after that I had the privilege of making the acquaintance of the noble Lord, Lord Ritchie-Calder, who will be speaking later tonight.

879
It may be that we were almost a pamphlet factory, most of us boasting the proud approval of the noble Lord, Lord Soper, with whom, on terrestrial ethical matters, I have never found myself in any disagreement at all except a week or two ago over the Common Market, which is perhaps not quite as ethical as that and about which I could understand a certain special interest. 'Throughout, the noble Lord, Lord Davies of Leek, was with us. Of course, I would not for a moment attempt to involve a representative of the Foreign Office and a very distinguished and courteous Member of Her Majesty's Government who is about to reply, but for his own voluntary revelations as recently as last Monday when he said on British Guiana, "quorum pars parva fui". Indeed I will not attempt to commit the opinions of my noble friend on the Front Bench, except to say that I am quite sure there was much more with which he was in sympathy.
The noble Earl, Lord Cowley, who for a moment has just left the Chamber, always speaks with learning, grace, civility and charm, and I would not wish to introduce a particularly controversial note. But the views he expressed on the Union of Soviet Socialist Republics was very much the opinion of Mr. Foster Dulles. Of course, they have done things with which we disagree. In point of fact, we disagree with a great deal of their philosophy. I have always said that had I been born in British Guiana or in Kenya I should have been a Communist. They were offering hope. The noble Lord who has spoken from the Liberal Benches referred to Czechoslovakia, which was indeed one of the great tragedies of Europe. None of us in this Chamber mourned the death of Jan Masaryk more than those who had some acquaintance with him. It was not the first rape of Czechoslovakia. The gravest rape of Czechoslovakia was in 1938 and 1939, when we were refusing the offers of friendship from the Russian Government.
I was at the Red Square in 1938 and saw the Russian Forces march by, and then had to come back here and read articles about cardboard tanks! One of my first essays in politics was to move a resolution that we should ask
880
Sir Stafford Cripps, and offer to pay his expenses—though as a rich man he probably would have refused that offer—to go to Russia on his own, representing the Haldane Society, the Association of Left Wing Lawyers, to try to establish the basis of an agreement to bring back and present to the British people. All these matters seem a little far away from some of the idealism which we desire to express.
I call myself a pacifist, but I have to call myself a pragmatic pacifist because cannot agree to British soldiers going into war unless they are adequately armed. But for that I agree entirely with the noble Lord, Lord Soper. I do not know how you manage the transitional period. It is difficult, and certainly as I have always said I agree that the presence of Polaris missiles on Holy Loch is a menace to the safety of Britain. I did not see the remark of Mr. Schlesinger—I take it from the speakers—but if we are still in a world in which the decision is taken there will be a great temptation in Moscow, if the button is to be pushed there before it is pushed in Washington, for them to say, "As a last resort, to show our determination, and to show that this has reached a pass in which the world may disappear, we will fire our first shots at some large ally of America who has nuclear arms posed against us." It may well be that Britain and the extermination of Britain could be the last effort to prevent a major conflict of the two great Powers.
My Lords, it is to the noble Lord, Lord Ritchie-Calder, that I was indebted some weeks ago for hearing of a rather odd person whom I call Henry Adams who belonged to the Adams Presidential family. In 1906 he produced a theory of history in which he attempted to demonstrate that historic change took place in a form of a retrograde algebraical progression, so that each period of historic change was faster than the next and much briefer than the next. He predicted that around the year 2000 we should have approached a state of chaos, which of course is one of the predictions of the laws of thermodynamics. That political chaos would mean that law had ceased to function, that terrorism and individual violence was rampant, that the religion of mercy and of justice and sympathy had given way to a religion of violence, that justice could not be administered and that

881
government had broken down. I admit that the reasons which induced him to make this prophecy—except that he wrote at a time when the speed of transport, invention and, obviously, the speed of change was increasing—escape me. I thought it was rather a cranky book.
But if we look at the world around us now we look at a world in which we have got to agree, a world in which the only hope for mankind is agreement. We are looking at a world in which we must not say any longer, "Can we trust them to carry out their agreement?" We look at a world—and I am perhaps rather more cynical than my noble friend, which may be due to a duodenal ulcer rather than to any diminution in my idealism—in which we have to be idealists and take whatever risks are inherent in that progress.
It is very odd that there is this newspaper attack on Communism, this newspaper misrepresentation of the political Left, which has never been as Left as all that and often not as Left as I would have wanted it. Almost as a tribute to my noble friend Lord Brockway I glanced today through many of the propositions which we embodied in our pamphlets. I thought, "How many mistakes shall we find? How many youthful errors?" I found that the first pamphlet on which my name appeared, The Keep Left pamphlet made its main point on summoning at once a conference of oil producers and oil consumers to arrange for the establishment of commodity prices. The subject of commodity prices is essentially a matter for international agreement, and has been a pregnant cause of economic insufficiency. I found that we advocated a united Europe and the taking of every step towards uniting Europe.
I am not surprised that we advocated an intensive expansion of Commonwealth relations. Perhaps having just visited Canada and being shortly to visit Australia, I had leather more to do with that than most. In Canada I was concerned that here was a great people with immense affection for Britain, with an immense desire for information, yet not a single British magazine or newspaper was being circulated among them. They got no information; they did not know what was happening; they were uninformed about British political views.
882
It is one of the oddities of history that a few years later a comparatively unknown Canadian came popping over to Edinburgh and took over the Scotsman and then The Times—indeed, a bunch of papers that spreads all over the world. He was supplemented a little later by the arrival of an Australian editor who took over a chunk of the rest. There are some odd things about politics.
I conclude by repeating my own personal gratitude to my noble friend Lord Brockway—indefatigable, always at the public service; a man who has never served his own ends, who has happily accepted relative poverty throughout his life to devote himself to public service—for this further distinctive contribution to the cause of international understanding.
8.0 p.m.
Baroness GAITSKELL: My Lords, one of the most endearing attributes of my noble friend Lord Brockway is his daily affirmation that hope springs eternal in the human breast. As for my noble friend Lord Soper, I agree with him on one point—that we are all sinners now and for ever more, and that we live in a mad world which has been made madder through science and advanced technology. As I am not a pacifist, I do not wish that to come between us.
We are very grateful to my noble friend Lord Brockway for asking this Unstarred Question, but having listened to him today and having read his pamphlet called A Great Hope for Peace. I am left with mixed emotions. His catalogue of good and bad signs in the world today, which he claims herald a new era of peace, seem to me to cancel each other out. I wish I could look at the international scene through rose tinted spectacles and share the faith of my noble friend which he expresses in the results of the conferences that have taken place in the last few years. I wish I were bewitched and felt the magic in words like "détente" and "co-operation". I remain sceptical about international summitry, although I am all for our getting together in every kind of international jamboree. Usually, I enjoy them enormously: there is social confrontation when these jamborees take place which is the healthiest thing that we can have at the moment.
Despite my noble friend's insistence that his proposals are practical and not

883
unrealistic, I remain unconvinced that, though the original aim of European security and co-operation was the dismantling of both NATO and the Warsaw Alliance, this is not the answer to our prayers today. I simply do not accept that proposition. All my experience at the United Nations refutes the solution that both of these bodies have to be dismantled. Let us look at the proposal made at the Helsinki meeting in 1973 to set up three commissions to deal with political, economic and scientific co-operation, the freedom of movement and the freedom of information. My noble friend admits that the discussions on the reduction of forces did not go so well. This is hardly surprising. Can anybody believe that the Soviet Union is really in favour of a relaxation of power over the East European countries in her empire?
I will quote a few words from the pamphlet of my noble friend. He writes:
"Critics of the Soviet Union will welcome the acceptance of respect for human rights and basic freedoms by each State."
He says that this is what the Soviet Union is putting forward. I find this kind of platitudinous declaration absolutely meaningless. Last year I took part in a human rights seminar in Yugoslavia. The Soviet participant kept a very low profile, but when he spoke he flatly denied that there were any abuses of human rights in the Soviet Union. As for freedom in other countries, although Britain has suspended certain human rights in Northern Ireland because of the emergency, we "came clean"; we talked about it. But the Soviet Union does not talk about these matters.
As for freedom of movement and information, I was on the United Nations Human Rights Committee for five years, and we know that the Soviet Union do not allow this. We know that there is no freedom of movement—certainly not out of the Soviet Union, nor into it. My noble friend says that the Russians are not ready for limitless liberty—a charming phrase, my Lords. But it is really a sick joke when we have plenty of evidence that people who do not agree with the Soviet Government's politics are diagnosed as psychotics and treated with painful drugs which make them ill. Therefore, when Mr. Brezhnev speaks of
884
"positive trends towards peace and cooperation in Europe", my noble friend regards these words as an important concession to freedom, but the evidence is very slim. Perhaps the most surprising statement in my noble friend's speech was his confession that the conflict between NATO and the Warsaw Alliance will be met not so much by disarmament conferences between military opposites as by actual co-operation between opposing blocs. Here we are back again in the "never-never-land" of wishful thinking. For my part, I would rather put my money on a system of controlled disarmament—agreed arms control.
My noble friend tells us in his pamphlet that our present expenditure on arms in NATO costs a British family of four £5 a week. I should dearly like to know how much the Soviet Union spends on armaments and what it costs a family of four in the Soviet Union. But where I part company with my noble friend is on his proposal to dismantle NATO. I noticed that he did not say this in his speech. He wrote it in his pamphlet. As for dismantling NATO, I think that this would be a most irresponsible and dangerous thing to do at this time. The referendum has just sealed our participation in Europe. The Labour Party is now represented there and by its representatives has added to the democratic Socialists from other countries.
It is vital that we should be part of the Atlantic Alliance. We need the help of America for our security, although I notice that nobody has mentioned this point so far. This does not exclude exchanges of all kinds—economic, cultural and social—with the East European countries which I know my noble friend favours.
To which country can the Western European countries look for their security? Has it ever crossed the mind of my noble friend Lord Brockway that without the help of the United States after 1945 we might now be part of the Soviet Empire? At present, the whole world is going through a turbulent crisis and change. Although still strong, the United States has suffered from the effects of Vietnam and Watergate, but because it can rely on its own raw materials, agriculture and food the chances of the United States overcoming its difficulties are good.

885
It has always been a generous country which has been ready to help other countries, although it has done some very dreadful things, too, in its time. This is not the same in Europe where we have been exploiting the products and raw materials of the developing countries to maintain a very high standard of living. The developing countries are putting a stop to this by their new international economic order. So, my Lords, this is not the time for dismantling NATO and quitting the Atlantic Alliance. It is a time for the European democratic countries to be united and stand together in defence of all their freedoms. They must continue with maximum aid to the developing countries, even if this affects their own high standard of living. Never has it been so imperative for the European democratic countries to exercise the greatest wisdom, and to set an example to the whole world in defence of all their traditional freedoms, and I believe it is on them that the responsibility for peace in the world mainly rests.
As I have said, let us get together, East and West Europe and the United States of America. Social confrontation is a desirable and enjoyable activity. Let us both try to learn from the Governments which we do not wish to emulate. We do not wish to emulate their kind of government, they do not wish to emulate ours, but each of us can learn from each other.
8.11 p.m.
Lord RITCHIE-CALDER: My Lords, I am grateful to my noble friend Lord Brockway for lighting candles in our darkness and sharing with us that irrepressible optimism by which he still maintains that reason and compassion will prevail. As a professor of international relations I describe myself as a paid optimist. I would not call Fenner Brockway a paid optimist; I think his optimism is entirely unpaid. It was—and is—my job to look for hopeful ways ahead. When situations look hopeless and the world seems to be passing through the tail of the comet—whether it is Henry Adams' comet or another comet—which blinds men of affairs to the obvious (and I think that is what we have been suffering from for the past 25 years) and bemuses their judgment, which I think is manifest at the present moment, I clutch at Lord Brockway and his faith in reason.
886
After that rehearsal for doomsday, the Cuban missile crisis, when the nuclear super-Powers were horn-locked on the edge of a precipice and disengaged at the 11th hour and 59th minute, a statement was made:
"People asked who won; people asked who lost. I say reason won, mankind won."
I used to ask my students who made that statement and invariably the guess was President Kennedy. It was not President Kennedy, it was Chairman Khrushchev. It did not do him personally much good because the hawks in the Kremlin dispossessed him, but I believe that his sentiment was right and that, in its essence, the situation itself was the turning point in the Cold War which put us on the road to the European security Summit we are hopefully discussing tonight.
We look around the world and we find little to comfort us: unreason and man's inhumanity to man prevails in the Middle East, in Northern Ireland, in Africa and considerably in Latin America. Events in India become the more ominous because it, too, is in a state of crisis at the moment and has a capacity to develop and use a nuclear bomb. We have the cleavage in what Dulles (as was pointed out earlier) quite mistakenly regarded as monolithic Communism and the confrontation of the Soviet Union with the People's Republic of China, and if that gives the ghost of Mr. Dulles any satisfaction I should not like to join him where he is.
There is, however, no doubt that the focal point is Europe and the attitude and the example which is set there in the immediate future. In this context, more important than the spelling out of it will be the attitudes because they will reflect what we hope is to generate into a force for the changing of other things beyond Europe. This conference, for good or ill, determines the course of world events. I share the hopes of the noble Lord. Lord Brockway, which derive from the work of the commissions or the baskets and the encouraging accommodations which have been made by all parties. I must say that what I know about Geneva confirms at least what he has said and conforms to the substance of what he has said.
I do not regard the findings of the commission, as was, indeed, suggested

887
by the noble Earl, Lord Cowley, as rhetoric or cynical semantics: I regard it as the language of conference. I believe that economic relations, cultural relations, improved communications and a frank—and I repeat, frank—discussion of human rights, and an interpretation of them and how to safeguard them, will extend the meaningful dialogue and produce enduring results. It is a slow process. I know from bitter experience of dozens of international conferences to which the delegates come with deep suspicions of each other's motives and with stereotyped ideas of each other's intentions, very much in the spirit which was reflected by the attitude of the noble Earl, Lord Cowley, to this conference. They find that, whatever their state of mind when they come, they have somehow to synchronise the facts. Sometimes they run away from them, but in the end they also have to rethink their preconceptions. This is a slow process and, as has been said, and I say it again with misgiving, time is not on our side. We have a long educational process, and this one is more impressive than most of the educational processes I have been in for the last five years.
Nevertheless, my Lords, the paramount question is still that of military disposition. I do not think that the SALT talks can ever be more than a coy, tantalising striptease until a European Summit gives the necessary resolution—a resolution in both senses of the word—to military disengagement. I am not going to take issue with my noble friend Lady Gaitskell on what, in fact, is the nature of the object of ultimate security, except to say that we always believed, and thought the purpose of European security talks was eventually—not now, not tomorrow, not the next day—to see to the wasting away of NATO and its mirror image, the Warsaw Pact. That I should hope will be and must be the consummation of an European security resolution.
However, I want to remind your Lordships of some of the frightening facts which are buried behind the words and the attitudes—such frightening facts which by mute acceptance we have contrived to overlook. We talk now, rather as my noble friend has done, with a good deal of confidence—I hope confidence but at least with hope and, some of us, with substantial hope—about what might be
888
resolved in areas other than those I am to talk about. Europe at this moment is a nuclear minefield. Apart from the massive retaliation of the strategical bomb, there are 7,500 US tactical nuclear weapons, about 3,500 Soviet tactical nuclear weapons and a limited number of French nuclear weapons.
The first US tactical nuclear weapons were introduced into Europe in 1954, three years before those of the Soviet Union. The object was to offset the numerically superior Soviet ground forces in the European theatre. To deliver tactical and nuclear missiles, the United States and its NATO allies have 2,250 aircraft, missile launchers and nuclear cannons. These weapons carry a combined explosive capability of 460 million tons of TNT, roughly 35,000 times greater than the nuclear weapon which destroyed Hiroshima. That is the American stockpile of nuclear missiles in Europe.
These nuclear weapons are all in NATO States, with the exception of Norway, Denmark and Luxembourg. The heaviest concentration is in West Germany. United States nuclear weapons include four different kinds of surface missiles, and two sizes of artillery shells, 150 millimetre and 203 millimetre. The largest tactical nuclear missile is over 400,000 tons of TNT equivalent or, in one missile, over 30 Hiroshimas. As Senator Stuart Symington said in the Senate last year—and I do not quote the Americans unfairly because I have been living and working with them on these issues for three years, so I quote not in disparagement or in any other sense, but because they at least communicate information and are allowed to—
"The significance of our nuclear weapons stockpiled in Europe alone becomes all too apparent when one realises that the destructive force in TNT equivalent of the nuclear weapons we have currently stockpiled is more than 20 times that of the combined total firepower expended in World War II, in the Korean War and in the Vietnam War".
The doctrine of tactical nuclear weapons is whimsical. The United States Secretary of Defence, Mr. James Schlesinger, whose statement was quoted yesterday—and this underscores what he said then, because it shows his attitude of mind—gave his definition of the doctrine of tactical nuclear strategy as, first, to deter Soviet use of tactical nuclear

889
weapons and Warsaw Pact attacks; and, secondly, to provide a nuclear option short of all out-war should deterrence fail and all our conventional forces collapse. That was the doctrine of Mr. Schlesinger. Mr. Morton Halperin, a former Deputy Assistant Secretary of Defence in the United States, put it more sardonically, when he said:
"The NATO doctrine is that we will fight with conventional forces until we are losing; then we will fight with tactical nuclear weapons until we are losing, and then we will blow up the world."
What is a tactical nuclear weapon? I remember at the time of the introduction of tactical nuclear weapons into Europe, having a debate in Canada with a noble and gallant Member of your Lordships' House, whom I will not mention in his absence but who was rather critical in the scene at that time. I asked him that question, and its corollary which is: when does "tactical" become "strategical" and invoke massive retaliation? He replied that it depended on the rules of the game, and said, "You must understand that we are jousting with nuclear weapons". He said that it depends on the rules of the game. If each side was trying to avoid an all-out nuclear war, they would accept certain constraints confined to military targets.
He agreed with me that it was a macabre form of tennis. If the ball was kept within the military lines, that would be tactical; if it went outside, that would be strategical. He agreed that as we went on trying to avoid massive retaliation, which would be total nuclear war, the lines of that particular tennis court would have to be made of elastic. But who would be the accommodating linesman, or the referee? There is no demarcation between tactical and strategical nuclear weapons. Indeed, in my opinion, tactical weapons can be manifestly more dangerous than strategical.
My Lords, we all know about the strategy of massive retaliation with its gobbledy-gook of pre-emptive strike which is not retaliation at all, but aggression—which is what Schlesinger was talking about yesterday. We know that the ultimate decision on the delivery of an atom bomb rests with the Commanderin-Chief of the United States Forces—that is to say, with the President of the United States—or with his opposite num-
890
ber in the Kremlin. Whoever he is, and on whichever side he is, he has 15 minutes in which to make up his mind to press the button of the black box which we saw with President Nixon on his visit to the Forbidden City, Peking, and which he took with him when he went to tea with Her Majesty and Mr. Heath at Chequers.
In those fifteen minutes, he has to decide that the enemy has indeed launched salvoes of intercontinental ballistic missiles, and that a counterattack is needed to put the enemy's bases out of action. We know the evidence can be wrong. There have been many conspicuous instances, such as when the early warning system identified a salvo of Soviet rockets heading for the heartlands of the United States. The United States bombers were aimed at Moscow and were recalled just before fail-safe, the point of no return, when it was found that the salvo of missiles was, in fact, a flock of Canada geese. There was another instance when an attack had been launched—it was on its way—before the "missiles" were recognised as the echoes of the radar signals from the distant early warning system itself.
We are now assured that the risks of human error have been removed, and that the whole thing is computerised. We are assured that the President of the United States cannot argue with a computer. The recognition that a mistake—and what a mistake!—can happen is in the existence and maintenance of the "hot line" now routed by communications satellite from Washington to Moscow. In the horrendous ultimate, the "hot line" means that the President or his opposite number phones up and says, "Sorry, old chap, there's a multi-headed missile on its way to vaporise you in 15 minutes. It has no political significance. We did not mean it. It was a technical fault." At least in the theory of the black box there is some recognition of responsibility, but what about tactical nuclear weapons? I remind your Lordships that there are 10,000 or more of these in Europe at this moment. Whatever the business of the double keys and so on, and the meaning of "tactics" in the Schlesinger definition, whatever the drill or discipline, the object of the exercise is to counter enemy moves in the battlefield, however big that may be,

891
and that means delegated authority down to whatever is the nuclear battery level.
I would remind your Lordships of the Nixon alert during the Middle East crisis. We know President Nixon did not consult with, but merely informed, his NATO allies. This was a Stage 3 alert, which does not mean a count down; it was the last stage of the alert, and included nuclear units. Those units were on the alert and, I dread to say, trigger happy. Therefore, we have 10,000 weapons of unimaginable destructive power—I repeat the word "unimaginable", because we could not imagine Hiroshima before it happened, and this is Hiroshima many thousandfold—all stockpiled throughout Europe.
Under what security? We know what urban guerrillas are capable of. What if they penetrated any of the nuclear armouries? What would happen anywhere down the line in that dispersed chain of military command? I am not using these merely as illustrative questions. I mean it, because we do not know, and nobody can tell me that he knows. We know what would happen by deliberate decision. There have been a whole series of war games simulating a nuclear battle in Europe. One operation, "Sagebrush", simulated the use of 275 tactical nuclear weapons that ranged in yield from 2,000 to 40,000 tons. According to the official evaluation of that exercise, the simulated destruction was so great that no such thing as a limited nuclear war is possible in such an area; that is to say, in Central Europe.
The former Assistant Secretary of State for Defence, Alain Enthoven, in testimony before the Senate Foreign Relations Committee, quoted a Defence Department report on all the war games conducted in Europe in the 1960s. It stated:
"Even under the most favourable assumptions about restraints and limitations in yields and targets, between 2 and 20 million Europeans would be killed in nuclear tactical war."
It went on:
"…and a high risk of 100 million dead if it was escalated to attacks on cities."
My Lords, while the SALT talks are horse-trading on quantities of missiles and delivery systems—and, my goodness, if you talk about cynicism at conferences, I think from my study of the SALT ones
892
that they are the most cynical; and I think my friend Mrs. Alva Myrdal, who was the Chairman of the UN Committee on Disarmament would agree with me—the fact is that there is a nuclear minefield spread over Europe at this moment. There is no guarantee that by mishap or by incident an all-out nuclear war might not be triggered off. Something is wrong—it must be—with a doctrine, which I certainly cannot dignify as a strategy, which if implemented would destroy the countries it was designed to defend. While the Heads of State, whose people are the hostages of this doctrine, are discussing détente, economics, culture and the reduction of armed tension, they should have as a priority in their thinking the present and constant danger of the nuclear minefield, and how to defuse those hundreds of millions of tons of TNT equivalent already deployed in Europe.
8.34 p.m.
Lord DAVIES of LEEK: My Lords, we have had a long day. I am tempted to go into the history of this. First, there is a little booklet I wrote on the possibilities of the destruction of millions of people called, Death Stands at Attention. I wrote it 25 years ago, when people thought we were psychiatric cases because we dared question a nuclear strategy. The conspiracy of silence about the evil effect of nucleonics is one of the world's wonders. I was down in the Pacific Ocean near Tahiti not long after the French were exploding their bombs. The arrogance of Western man in exploding his bombs everywhere except in his own territories is astounding. You get people saying there is no danger in the explosion. I saw the Fiji islanders and the islanders of the Pacific moaning about the poisoning of their food. I do not know whether Occidental man knows what he is doing to Oriental man in his arrogant militaristic tendencies. I do not know all the answers to this. I think mankind is going awry. He is the only animal who tells a lie; he is the only animal who fouls his nest. When you ask me what is the solution to the paranoia, the egotism and the pomposity of religious differences in our own territory in Ireland, I cannot answer it, because it is beyond all reason.
I have travelled all over Vietnam. I tried my best to meet Ho Chi Minh to get a peace agreement. When you see

893
children cooked with a napalm bomb, you do not question so much Torquamada. Therefore, we look at these things, some of us, with horror, and it is no good scoffing about it, because mankind is in danger. When the destiny of man depends on a computer being accurate. God help us! Anybody who has had his bank account sent to him wrongly because it is computerised knows the possibilities of mathematical error, and you want only an elementary knowledge of calculus to see how you increase the possibilities. My noble friend Lord Goronwy-Roberts need not get worried, because I am going to speak only about three minutes, and I know he is as much interested in this as we are, and as much for peace.
Lord GORONWY-ROBERTS: My Lords, I would be most delighted if my noble friend took more than three minutes. I know of his long service in the cause of peace. If in any way I indicated the slightest impatience, I ask him to realise that it was most unintended.
Lord DAVIES of LEEK: My Lords, my noble friend is very kind. We have all had a busy day, and I know he has, too. My noble friend Lady Gaitskell and all noble Lords have contributed an essence of truth to this very difficult problem, including the noble Lord on the other side, who I am quite sure, together with the noble Lords sitting opposite, is just as concerned with the problem of mankind and peace as I, happen to be. All I hope is that we can find some answers and that Britain can give a lead. That is why I stayed behind today to support by noble friend Lord Brockway and to thank him for having raised this matter.
May I raise one other small point and then I will sit down, because so much has been covered. I remember Foster Dulles. I remember the beginning of the war in Vietnam. I remember his phrase that we will use "massive retaliation". Sir Winston Churchill and then Sir Anthony Eden—I was over at the Geneva Conference in 1954 after the Battle of Dien Bien Phu, and it was Churchill himself who was frightened of the gasconading nucleonic antics in the speeches of Foster Dulles at this period—steadied the British approach to the whole problem. I consequently hope that at Geneva, with
894
common sense and not giving way to everything, and not agreeing or feeling that everything the Russians do or Eastern Europe does is evil, our leaders will, as I hope they always have—and I have had the pleasure of being with some of them, if it was only a discussion on the "Fearless", a summit talk on Rhodesia—try to bring a constructive approach, in the hope that mankind will solve this problem, which has bewitched it since the beginning of creation, of how to prevent major wars, because nuclear war means the end of civilisation.
8.39 p.m.
Lord GORONWY-ROBERTS: My Lords, I know that we are all very grateful to my noble friend Lord Brockway for raising this important subject at this time. The negotiations at the Conference are almost complete and the third stage is likely to be held within a matter of weeks. This is therefore a particularly good moment to take stock and to reflect on the importance of the meetings in Helsinki. I appreciate my noble friend's reminder to the House that as the texts have not been officially published, although he appears to have his own source of fairly accurate information, he will absolve me from any Parliamentary discourtesy if I do not deal with texts which in due course no doubt we shall be examining in some detail in this Chamber.
In view of the reservation expressed about the utility of this Conference from that Bench and by my noble friend Lady Gaitskell and others, perhaps I might indulge very briefly in a description of the historical origin of the Conference we are discussing. It is some time ago that the Soviet Union proposed such a conference—it is not a new idea—but for a variety of reasons the countries of Western Europe and North America regarded that proposal, in its then form, with a good deal of suspicion. As the noble Lord, Lord Banks, reminded us, many people in the Western democracies thought it looked as if such a conference would be used as a substitute for a genuine peace conference, as a means of legitimising the existing territorial divisions in Europe, of promoting conditions for the creation of a Pan-European system of collective security on strictly Soviet terms and, as it were, to set the status quo in Europe firmly in a bed of concrete.

895
The countries of Western Europe and North America never rejected the idea of a conference as such, but they did set out requirements and ideas of their own about what it should do and what its purposes should he. We did not, for example, want to create the illusion of security based on paper declarations of good intentions, when the underlying tension created by the overwhelmingly powerful forces of the Warsaw Pact countries remained untouched. Nor were we willing to go to a conference from which North America, the United States, the great democracy of the West, would be excluded, thereby making Western Europe more than ever vulnerable to pressures from the East. That would not have served the causes of peace and of disarmament. Finally, we wished to ensure balance in the work of the conference by providing a twofold aim: co-operation between the peoples as well as countries on the one hand, and the search for security on the other. There can be no détente without security, without confidence: hence the title of the conference, the Conference on Security and Co-operation in Europe, the CSCE.
As noble Lords will recall, in the early part of this decade important changes took place in the political climate in Europe. I come here to two of the points raised by the noble Lord from the Front Bench opposite. The conclusion of the Eastern Treaties between the Federal German Government and the Soviet Union and Poland, and the Quadripartite Agreement on Berlin, very much the work of Willy Brandt, removed problems which in retrospect we must remember were mountainous problems which had bedevilled Europe and European diplomacy since the end of the war.
With these out of the way we could begin to raise our eyes to the wider problems of our Continent, and seek to replace the sterility of confrontation with a new realisation of mutual interests. Agreement was reached that preparations for two East-West conferences could begin: the first for the Conference on Security and Co-operation in Helsinki, and the second on Mutual and Balanced Force Reductions in Vienna. Both sets of preparations produced results by the summer of 1973. The agenda for the
896
European Security Conference—the so-called Helsinki Blue Book—is a truly remarkable document. It fully met the Western requirements for a conference of that kind as well as the objectives of the Eastern European countries. The way was therefore clear for the first stage to begin, and at Helsinki in July 1973 the Foreign Ministers of the thirty-five participating States—some Communist, some democracies—met to launch the detailed work which is now reaching its conclusion.
So far so good. But with an agenda covering so many subjects, some of them of acute sensitivity, the discussions could easily have gone the way of so many international discussions over the years. Rigid positions could have been taken up. Some countries might have had second thoughts and might have preferred to stand in the way of agreement rather than content themselves with less than they had hoped to achieve in a partisan way. During the early days of the Conference, when proposals were piling up on the negotiating table from all sides, it was perfectly clear that the gap between the various points of view—national, ideological, special interests, and, above all, deep suspicions and the lack of confidence that anything could be done—would in many cases be extremely hard to bridge. But the negotiations went on, and all concerned were prepared to show, by patience and flexibility, that there was an underlying determination to reach agreement. So progress was made, little by little, spurred on by the knowledge that failure could no longer be accepted. Here I join with my noble friend Lord Ritchie-Calder in the ominous warnings he has uttered once more, as have other Members of the House. This Conference, which does not directly touch the question of thermonuclear disarmament, must prove to be part of the ultimate means of averting from humankind the brooding horror of thermonuclear warfare.
The members of the Conference kept at it. They have been at it for two years, and gradually results have come about. States, large and small, have really had a full and equal voice. I come, therefore, to the first part of my Answer to the Question which the noble Lord, Lord Brockway, has put. The Government see it as an encouraging and hopeful sign

897
that such a Conference should successfully have been held, and that, despite all the difficulties, it has been possible to bring matters to a satisfactory conclusion in a manner which has emphasised the full and equal contribution of every State involved.
It has also been a source of satisfaction for the Government to see the positive contribution which has been made by the countries of the European Economic Community and, more widely, by the Atlantic Alliance, which is a democratic alliance. By working together over a period in daily—indeed, almost hourly—contact, we have managed, together with our partners and allies, to secure our main objectives and to arrive at a result which is compatible with our democratic conception of détente.
Far from interfering, as some originally feared, with the cohesion of Western institutions, I believe that this Conference has given those institutions new strength, and I refer not only to our allies in Europe. The active participation in the Conference of the United States and Canada, which we have greatly welcomed, has made clear the extent to which those great and powerful countries regard the peace and security of Europe as being vital to their own national interests and to the peace of the world. Moreover, the Alliance and the Community have shown that, far from being an obstacle to greater understanding among nations, they are a powerful force for peace and co-operation. Here I wish to say that the British delegation to this Conference has played a major role in finding solutions to the most intractable problems.
We were told a few years ago that this country, having relinquished an empire, had not yet found a rôle. It certainly has a role in international affairs, not least at this Conference, which I repeat is part of the tremendous effort which is now going on to master the awesome problems of our age. The British contribution by our representatives at this Conference, which is recognised and appreciated by all the participants, from the East as well as from the West, should equally be recognised in their own country.
898
It would not be right for me to comment in detail on the documents which have been drawn up at this Conference, partly as a result of British initiative and suggestion. Detailed comment must await their publication and, indeed, their signature and approval at the third stage in. Helsinki. However, I would draw attention to some matters which I believe are of particular importance. First, a declaration of principles has been drawn up which refers, among other things, to the enjoyment of human rights and to cooperation between States and between individuals in terms which correspond fully to our traditional attitude to these matters. Here I agree with my noble friend Lord Ritchie-Calder, that there is value in clear and cogent declarations of principle of this kind. Of course, principle must be converted into practice; but it is useful, indeed vital, for the world to remind itself of the basic principles of human existence and survival.
The declaration will also recognise that, while existing frontiers in Europe are to be regarded as inviolable—and here I approach another set of questions put by the noble Lord, and put in another way by the noble Lord, Lord Banks—they may be changed. It is possible to change them provided such change takes place in accordance with international law, by peaceful means or through agreement. For East and West to agree on that principle—and I still say that it must be converted into practice—and to come together and accept a fundamental principle of peaceful change and, by implication, abdicate the use of force to achieve such political changes, is no mean achievement.
The second point I wish to put to your Lordships is that, with the agreement reached on confidence-building measures, a start will have been made in attacking the causes of mistrust and tension between States. My noble friend Lord Brockway was right to point out that little progress has been made with the force reduction talks at Vienna, but they are continuing in a businesslike way; and here I join with my noble friend Baroness Gaitskell, who put the matter in a nutshell when she said that what we are after is controlled disarmament. One cannot get it in any other way, and it will not stick if one tries to get it in any other way. Controlled

899
disarmament means that everybody joins in to make it a success.
I am not alarmed that progress in Vienna is slow. So long as they keep talking, inch by inch we will get nearer to the process of disarmament, which we all seek, and in that way we will be on the way to the ultimate objective that noble Lords, among them my noble friend Lord Ritchie-Calder, have described as our primary aim, that of nuclear control and disarmament. Nevertheless, although Vienna rather than Helsinki is the locale for force reduction talks, there have been very useful agreements in the military sphere in the CSCE, for example to exchange observers at military manoeuvres and to notify in advance the details and purpose of major military manoeuvres. The Government hope and expect that this factor will go some way to reducing tension and misunderstanding arising from suspicions rather than knowledge of military dispositions—this is certainly something worth getting—and that this will improve the political climate in which the real issues of military security in Europe must now be tackled.
In reply to the substantive question put to me by the noble Earl, Lord Cowley, unless and until there are satisfactory results from the MBFR talks in Vienna, we will not in any way detract from our obligations under the Brussels Treaty. In the economic, commercial, industrial and technological fields a large variety of documents have been drawn up which will provide a basis not only for increased trade, co-operation and exchanges throughout Europe, but also for more effective contact between business representatives in the various countries of Europe, including the Communist States. By establishing common objectives and laying down certain standards of treatment for business representatives, I believe that commercial, industrial and technological exchanges throughout Europe will become for frequent, fruitful and rewarding, and in this way new links, new bonds, not only inter-State but between individuals and organisations, may spread throughout Europe.
My right honourable friend the Prime Minister and his colleagues will in Helsinki be putting their names to a series of documents dealing with the freer circu-
900
lation of ideas and the freer movement of people throughout Europe; and this part of the document may well be without precedent. It will offer, we think, a prospect of real and lasting benefit to individuals in the various countries of Europe derived from the process of détente.
Before coming to the House this afternoon I re-read the remarks made by the noble Lord, Lord Home of Hirsel, when as Secretary of State for Foreign and Commonwealth Affairs at Stage 1 of the Conference in Helsinki in July 1973 he said:
"We should be impatient of restrictions. If we do not improve the life of ordinary people at this Conference, we shall be asked—and with justice—what all our fine words and diplomatic phrases are about and have achieved. The principles are valueless without the practice. In the language of Helsinki, Basket I will be empty unless there are plenty of eggs in Basket III".
That is to say that the declaration of principles will be valueless unless the implementation is a fact. I believe that the noble Lord was right to strike that note at that time.
The same note was struck again this afternoon by my noble friend Lord Brockway. But I do not think he will be disappointed. In the field of human contacts, texts have been drawn up for signature at Helsinki which should make it easier for individual citizens of all European countries to move freely throughout Europe, whether for professional or personal reasons, and whether temporarily or, in certain circumstances such as marriage or family reunification, permanently. And in the field of ideas and information, the participating States will commit themselves, in Helsinki, to ensuring that individual men and women in all the countries of Europe will have progressively freer access to spoken, written and broadcast information of all kinds and from all countries. They will also undertake to give each other's journalists the sort of facilities which will allow them freely to pursue their legitimate activity without official interference.
These and other texts in Basket III, providing for instance for an intensification of exchanges in the cultural and educational fields, set the scene for what I

901
hope will prove to be a qualitative and permanent change in the situation in Europe as it affects ordinary people. Provided that all these good things come to pass, and that the words accepted at Helsinki are given the breath of life once the Conference is over, their importance will be hard to exaggerate. They will not only help to make Europe a safer and saner place for people to live in, but they may help us on the road to the larger and even more urgent objectives of which my noble friend so graphically reminded us.
This brings me to the question of future activities. This is not an easy one. It is easy to prescribe an institution which would preside over the development or implementation of decisions. But we are concerned with 35 countries, many of which still have reservations about many of the things to which they have agreed. I hope we shall not overload the situation at this stage, but shall give the agreement time to gain strength, substance and confidence. I am in no way disagreeing in principle with my noble friend about the need in due course for institutionalised arrangements, and even bodies to supervise, guide, and maybe to enforce. What I am advising—and I speak not only for Her Majesty's Government in this matter but for a great many other Governments which are perhaps not confined to the West—is that we should have a pause after the signature of these extremely important documents, during which Europe should get down to it and should begin to do the deeds as well as to approve the principles, doing them in its own way without the overlay of a presidial body which might daunt some, and between which and some there might be a running argument as to how things were going. We are in favour of a period—as are the majority of countries concerned—during which the work will go on. Then, possibly in 18 months or two years, we can come together again, assess the position in the light of experience, and perhaps set up machinery if that proves to be the right way of doing it!
Let us be flexible about this. The history of attempts to get international agreement and the implementation of international agreements is strewn with
902
the failure d institutionalised provisions. Festina lente—let us hasten slowly and surely, making the 35 countries which will be party to this new and hopeful document feel that they are not under any undue pressure. They are subject to great expectations but they are free to build this up at the pace and in the way that suits them. We are dealing with countries that vary greatly in their experience of the democratic practice. We are dealing with countries both in the West and in the East where there are historical memories and we must not force the psychology of this too fast and too far. However, I repeat that I am not disagreeing in principle with my noble friend that in due course we shall need proper arrangements to see that these arrangements are carried on, strengthened and expanded.
I have spoken too long, but this is a vast subject. I do not want to raise our hopes too high. I and my generation stand at a point when we recall repeated disappointments in this field, when high hopes were entertained and when practice fell so tragically and fatally short of principle. But we must go on trying. That is the essence of the democratic idea. If one is beaten, one must pick oneself up and have another go. I hope that we do not regard the quite extensive and very hopeful measure of agreement that has been achieved in this Conference as in any way an alibi not to concentrate afresh on the terrible dangers of the other dimension that face human kind. I say to noble Lords, particularly to my noble friend who knows so much about the technology of this, that CSCE, MBFR, the United Nations, everything that brings nations together, first in an agreement in principle, secondly in an attempt to convert principle into practice—everything like that—is a movement towards the objective which I know my noble friend and the entire House recognise to be the real objective of all foreign policy and of all diplomacy.

RECESS ELECTIONS BILL [H.L.]
Reported from the Joint Committee on Consolidation Bills with an Amendment, and recommitted to a Committee of the Whole House; Bill to be printed as amended.
  EUROPEAN SOCIAL FUND APPLICATIONS
  EUROPEAN SOCIAL FUND APPLICATIONS