Sitting of 12 May 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  ORAL ANSWERS TO QUESTIONS
  Mr. Speaker: First, I remind hon. Members that those who are called for supplementary questions should ask only one question. Ministers need not feel obliged to answer more than one. Secondly, it is quite unfair for an hon. Member to try to argue a case put forward as a supplementary question, because that changes the whole character of Question Time.
  ORAL ANSWERS TO QUESTIONS

    USSR
    Mr. Greville Jannerasked the Secretary of State for Trade, what is the United Kingdom's likely balance of trade with the Union of Soviet Socialist Republics over the next 12 months.
    The Minister for Trade (Mr. Cecil Parkinson): In the 12 months ended March 1980, the crude deficit on trade with the Soviet Union was £418 million. The development of trade over the next 12 months depends on commercial and other factors which I am not in a position to forecast.
    Mr. Janner: When the Minister referred to "other factors" was he referring to the treatment of minorities by the Soviet Union, and to cases such as the awful tragedy of the Swedish diplomat, Raoul Wallenberg, who disappeared? For the last 17 years the Soviets have refused to speak about him or reveal his whereabouts.
    Mr. Parkinson: The hon. and learned Member has earned himself the reputation of being "the scourge of the Soviets". On this occasion I join him in deploring
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    this appalling incident. As long as the Russians continue to persecute their minorities, as they have, they will continue to have criticism heaped upon them which they deserve.
    Mr. J. Enoch Powell: Does the pound sterling float against the rouble? If not, how is its value determined?
    Mr. Parkinson: I would have welcomed notice of that question. If the right hon. Gentleman puts it on the Order Paper I shall make arrangements to answer it.
    Mr. Chapman: Will my hon. Friend confirm that the imbalance of trade between this country and Russia has been consistently to the advantage of the Russians? Are there not good political and economic reasons why that imbalance should be reduced, if not eliminated?
    Mr. Parkinson: The crude trade figures are a little misleading. About 80 per cent. of our imports from the Soviet Union are of raw materials and a substantial proportion of those are subsequently re-exported by us at a profit. It would probably damage us more than the Soviet Union if we were to act as my hon. Friend suggests.
    Mr. Snape: Would it not help our trade deficit, crude and otherwise, if manufactured goods from the Soviet Union bore the clear mark of their country of origin? Is the Minister aware that I have recently written to his right hon. Friends the Prime Minister and the Minister for Consumer Affairs drawing attention to Russian-produced greeting and Christmas cards which are dumped in this country to the severe disadvantage of a firm in my constituency?
    Mr. Parkinson: We are helping the printing industry to mount an anti-dumping action in this case In fact a couple of weeks ago I wrote to the industry and urged it to get a move on and produce evidence. I offered the services of the Government. We are also looking at the question of origin marking of those cards.

    USSR

      Safety of Life at Sea Convention
      Sir Bernard Braineasked the Secretary of State for Trade when he expects the requirements of the Safety of Life at Sea Convention to come into force.
      The Under-Secretary of State for Trade (Mr. Norman Tebbit): The International Convention for the Safety of Life at Sea 1974 will enter into force on 25 May, and represents an important step forward in our continuing endeavours, nationally and internationally, to promote maritime safety.
      Sir B. Braine: Is my hon. Friend aware of the risks which communities such as Canvey Island, with its heavy concentration of high risk industry on the waterfront, face from unsafe vessels carrying hazardous cargoes and from bad navigation practices? Is he aware of our anxiety about delays in fully implementing conventions of this kind? By what date can we be completely assured of the banning of tankers, not fitted with inert gas systems, from ports such as London?
      Mr. Tebbit: I could hardly be unaware of the anxieties about Canvey Island while my hon. Friend is a Member of this House. He constantly brings them to my attention. I said on 24 April that we will introduce the convention on inert gas system requirements for foreign ships earlier than would be required by the 1974 convention. I assure him that we are taking a lead in introducing requirements for the special qualification for the masters and officers of such vessels because of the very dangers to which he draws our attention.
      Mr. Clinton Davis: Is the hon. Gentleman aware that his answers on both counts are satisfactory to the Opposition? Is he also aware that about one-third of total losses relate to ships that are less than 10 years old? Can he give us some indication of the timetable that he envisages for the ratification and coming into effect of the convention on training, certification and watch-keeping? There is deep concern about inadequate international standards of management and crewing.
      Mr. Tebbit: That will not be an easy matter, but, in line with the conventions, the United Kingdom will be introducing new certification requirements in 1981 and I hope that other countries will rapidly follow our example. I am encouraged by the fact that these measures have the support of both sides of the House.

      Iran
      Mr. Spriggsasked the Secretary of State for Trade how many United Kingdom firms have won contracts with Iran in fair and open competition with firms in all parts of the world; how many of those firms would be affected if Her Majesty's Government decided to apply econnomic sanctions against Iran; and how many workers he estimates would lose their jobs as a result of such sanctions being implemented.
      Mr. Parkinson: The effort of sanctions would depend on their precise scope and on the extent to which exports to Iran can be diverted to other markets.
      Mr. Spriggs: Is the Minister aware that President Carter has lifted the ban on the export of United States-produced wheat to the Soviet Union? Is he also aware that if we apply sanctions against Iran it is possible that American firms will be waiting to jump in and capture our markets?
      Mr. Parkinson: The hon. Gentleman's concern is unnecessary, because we shall be moving in concert with the Americans on sanctions against Iran. Any trade banned to us will certainly be banned to them.
      Mr. Thompson: My hon. Friend is well aware that we are taking sanctions to help the United States—
      Mr. Speaker: Order. The hon. Gentleman must put his remarks in the form of a question.
      Mr. Thompson: Is my hon. Friend aware that we are taking sanctions to help the United States and that today the Americans have said that they intend to impose sanctions against 30 British products? Will those products be excluded from our list of products on which the sanctions against Iran are to be imposed?
      Mr. Parkinson: I think that my hon. Friend is confusing two separate issues. One is the American retaliation as a result of our action against their synthetic fibres. The other is the question of possible sanctions against Iran. The House has to discuss later today the enabling measure for sanctions and perhaps that will be a more sensible occasion on which to deal with such details.
      Mr. Donald Stewart: Does not the Minister thing it a piece of effrontery on the part of the Government to introduce sanctions, since those who carried on illegal trading with Rhodesia were not only not prosecuted but were relieved of all fears that they would ever be prosecuted? In view of that, are not the proposed sanctions on Iran a complete charade?
      Mr. Parkinson: I never thought that I would live to see the day when the right hon. Gentleman became a mere echo of the hon. Member for West Lothian (Mr. Dalyell), who raised that point in the House last week.

      Air Traffic Control Radar Systems
      Mr. Onslowasked the Secretary of State for Trade whether a decision has been made on the acquisition of a new radar for the Civil Aviation Authority; and if he will make a statement.
      Mr. Stoddartasked the Secretary of State for Trade when he now expects the Civil Aviation Authority to come to a decision on the purchase of a new radar system for air traffic control.
      Mr. Tebbit: The Civil Aviation Authority announced its decision on 2 May 1980. The CAA radar replacement scheme is expected to cost some £24·5 million and Cossor Marconi from Britain, and HSA of the Netherlands have won significant electronic contracts whilst AEG Telefunken will provide aerials and turning gear. More than half of the value of the whole project will be spent in the United Kingdom, including, I expect, half of the HSA contract.
      Mr. Onslow: Can my hon. Friend confirm that the American firm Westinghouse which was, at one time, boasting that it had the contract sewn up, was eliminated from the competition because its offer was found to be seriously misleading? If that is so, will he make sure that those facts are known to every other British authority that may be contemplating a purchase from that company?
      Mr. Tebbit: My hon. Friend is right to say that Westinghouse appeared at one time to be the front runner for the contract, but on closer examination it was found that the capabilities of the equipment on offer fell far
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      short of the claims of the company's salesmen and produced a lower performance than the equipment offered by HSA, which was also offered at a lower price. I am sure that the lesson will be learnt by other prospective customers.
      Mr. Stoddart: Is the hon. Gentleman aware that the CAA decision will cause much disappointment to the Marconi-Plessey group? Can he confirm that the price quoted by that group was competitive against that of Hollandse Signaal and that the group's specification for the equipment was just what the CAA required?
      Mr. Tebbit: I should prefer not to go into the details of pricing and specifications, not least because it would not be in the best interests of any of the contenders concerned. The prime reason why the contract went abroad was that the CAA was not able to convince itself that British equipment could be delivered on time. I hope that those who are engaged in supporting the buffoonery in industry that is proposed for Wednesday will remember that such idiocy can only damage the chances of British industry.
      Mr. Robert Atkins: Does my hon. Friend not find it rather sad that no British company can strike a deal with the CAA on the radar replacement? Does not that perhaps call for an overhaul of the working arrangements between the CAA and industry?
      Mr. Tebbit: I am sure that the arrangements can be improved, but it is not true to say that the CAA has not been able to buy from British industry. Cossor and Marconi are extensive suppliers. Equally, if one were a Dutchman, one might think it a pity that Marconi gets the contracts for communications equipment for the Dutch Navy and that Ferranti gets the contracts for their airborne radar.
      Mr. Clinton Davis: Is not the hon. Gentleman's suggestion that the workers involved in British industry carry the responsibility for the fact that the contract did not go to a British company entirely disgraceful? Is not the idiocv of the Government in dismantling British industry and putting more and more people out of work the cardinal sin being committed in this country?
      Mr. Tebbit: I am not blaming the loss of the contract with the CAA on events that have not yet taken place, but at a time when the prime criticism of our exports is that they are not delivered on time, I regard it as a combination of Luddism, idiocy and buffoonery further to delay British industry in support of an idiotic political gesture on Wednesday.
      Mr. Douglas: Will the Minister have a care in his remarks, because he indicated in the body of his main reply that a substantial amount of the equipment and labour concerned will be provided from the United Kingdom and, in particular, from my constituency?
      Mr. Tebbit: I am delighted that that is so and I hope that the hon. Gentleman will advise the workers in his constituency that it is in their best interests to keep at work and to make sure that the equipment is delivered on time.

      Japan
      Mr. Strawasked the Secretary of State for Trade if he will take action to ensure that in practice United Kingdom exports to Japan are treated no less favourably than Japanese exports to the United Kingdom.
      Mr. Parkinson: We will continue to press, directly and through the European Commission, for removal of obstacles which concern British exporters and for the further opening up of the Japanese market to United Kingdom exports.
      Mr. Straw: Since the trade gap between Britain and Japan continues to widen, so that the Japanese are exporting to us more than £2 of goods for every £1 worth that we send to them, and since exhortation of the sort that the Secretary of State tried in Tokyo in January appears no longer to be working, is it not time for the Government to get tough with the Japanese and to impose countervailing duties and non-tariff barriers until the Japanese start to play fair in world trade markets?
      Mr. Parkinson: I cannot agree with the hon. Gentleman's diagnosis of the situation. Our exports to Japan are not growing as quickly as we should like, though they amount to more than £600 million and are not to be written off
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      lightly. In addition to exhortation, we have arrangements which, in one way or another, already control more than one-third of Japan's exports to this country.
      Mr. Sims: Will my hon. Friend confirm that the Japanese car industry voluntarily limited exports of cars to this country and that those who took advantage were Continental manufacturers rather than British manufacturers? Will he confirm that many of the restrictions and regulations applying to goods imported into Japan apply equally to domestically produced goods?
      Mr. Parkinson: I agree with the first and second parts of my hon. Friend's question. He is right. In the last three months of 1978, when the Japanese sent in no cars, the net result was that the British share of the market remained absolutely static and that German, French and Italian cars took up the strain. If that happened, Opposition Members would immediately start complaining about the increase in our deficit with the EEC.

      Monopolies Commission (Referrals Policy)
      Mr. Neil Thorneasked the Secretary of State for Trade whether he will make a statement of policy guidelines for referral of bids to the Monopolies Commission; and if he is satisfied with the manner and timing in which these referrals are announced.
      The Minister for Consumer Affairs (Mrs. Sally Oppenheim): My right hon. Friend refers a bid where, in the light of the Director General's advice, he considers that the public interest issues involved are sufficient to merit doing so. His decision is published as early as practicable in the course of the bid, and he has no plans at present to alter this procedure.
      Mr. Thorne: I am disappointed with my right hon. Friends reply in view of the long delay that took place in the Armitage Shanks—Blue Circle bid earlier this year. This resulted in over a month's delay in opportunities to take the matter further and, therefore, a long, protracted period of uncertainty for management, workers and investors. Does not my right hon. Friend agree that the matter should be speeded up in the interests of everyone concerned?
      Mrs. Oppenheim: I am sorry that my hon. Friend is disappointed. As he will be aware, my right hon. Friend is required by the Act to make a determination as soon as practicable. His usual aim is to announce a decision before the first closing date of the final bid offer, as this is a reasonable target which has wide support in the financial community. However, fresh developments may arise during a period when the offer is open. In such cases, it is not normally practicable to reach a final decision any earlier, as in the case of Blue Circle-Armitage Shanks. Both the Department and the Office of Fair Trading make every effort to announce decisions on a merger by the first closing date.

      Anti-Dumping Procedures
      Mr. Cryerasked the Secretary of State for Trade whether he will take new initiatives on anti-dumping.
      Mr. Parkinson: The existing antidumping procedures provide an adequate framework for dealing with well-founded complaints of dumping. The European Commission is well aware of my concern that speedy and effective action must be taken to protect industry when dumping is causing injury. The Department of Trade retains an anti-dumping unit to help British industry in preparing complaints.
      Mr. Cryer: Does the Minister recall that the balance of trade deficit in textile goods for 1979 was nearly £700 million and that it is currently running at a higher rate? This is caused partly through dumping of cheap imports and is also a contributory factor to the massive number of jobs being lost in the textile industry. Is not the hon. Gentleman standing truth on its head when he says that the position is satisfactory? Is not the truth that the EEC is slow and unwieldy, and it appears to be totally indifferent to the needs of the British textile industry?
      Mr. Parkinson: I am afraid that I cannot accept what the hon. Gentleman says. The procedures exist. They are there to be used. The industry is often much better at making allegations than establishing them with facts. We retain the anti-dumping unit precisely to help British industry prepare its cases. Where there is a well-founded case, we get action.
      Mr. David Price: Is my hon. Friend satisfied that procedures are working adequately with regard to alleged dumping from behind the Iron Curtain? It is difficult to get evidence of the genuine cost structure of the home market within those countries.
      Mr. Parkinson: I agree with my hon. Friend. That is why there is a wide range of goods subject to quota and control in trade with Iron Curtain countries. In those agreements, there is a price clause—aptly named considering who asked the supplementary question—that allows us to take action on grounds other than dumping grounds. We have, therefore, two opportunities. We have dumping and the price clause mechanism. We have used the price clause, for example, on Romanian suits.
      Mr. Woolmer: Following the imposition by this country of generous quotas on United States exports of yarn to this country a few weeks ago, will the Minister confirm that the United States Government are threatening to impose further restrictions on exports of woollen textile products from this country to that country? As the West Yorkshire wool textile industry sees virtually no benefit from the quotas on yarn imports, will the Minister assure the wool textile industry that he will reject totally such measures? Will he have consultations with the industry urgently with a view to presenting a full case?
      Mr. Parkinson: I do not know whether the hon. Gentleman saw the reported remark by an American official, who described American action on wool textiles, were it to be taken, as the equivalent of shooting oneself in the foot. In other words, we think that action on wool textiles would be a totally futile gesture. There are negotiations going on between the EEC and the Americans about compensation for our action under article 19 on polyester filament yarn. We shall do what we can to make sure that this does not apply to wool textiles.
      Mr. Archie Hamilton: Is my hon. Friend aware that the protectionism advocated by Opposition Members, which goes well beyond anti-dumping restrictions will lead to much higher prices for the consumer in this country—a matter to which Opposition Members do not often refer?
      Mr. Parkinson: That point is not made as often as it ought to be made. It is interesting that the Consumers Association and the Retail Consortium have started forcefully to make this point. It should be taken into account in discussion on import controls.

    USSR
    Mr. Chapmanasked the Secretary of State for Trade if he will make a further statement on trade with the Union of Soviet Socialist Republics in response to the Russian invasion of Afghanistan, and with particular reference to the continuing massive imbalance between British exports to and imports from the Union of Soviet Socialist Republics.
    Mr. Parkinson: The Government's view remains that trade with the Soviet Union should continue to be pursued on the basis of mutual advantage. As my hon. Friend will know, a very large proportion of our imports consists of raw materials valuable to our economy and of goods which are subsequently re-exported at a profit to the United Kingdom.
    Mr. Chapman: While thanking my hon. Friend for that reply, may I ask whether he is aware that so long as the trade imbalance stands at about the £480 million figure he has given, many people in this country will find it highly offensive that such an imbalance continues in the light of recent political events, not least the Russian invasion of Afghanistan? Will the Government take fresh initiatives to reduce substantially, if not eliminate, that imbalance?
    Mr. Parkinson: I pointed out earlier to my hon. Friend that a very substantial part of our imports—more than 40 per cent.—are diamonds. Those diamonds are the basis of the London diamond market. A substantial number are re-exported at a good profit for Britain. By doing what my hon. Friend suggests, we would probably be damaging ourselves more than we would be damaging the Soviet Union. I suggest to my hon. Friend that this would not be sensible.
    Mr. Maclennan: In the light of the Government's attempts to co-ordinate their trade policy in some areas of the world with the United States, have the Government sought an explanation of
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    why the United States is proposing to lift the ban on the export of wheat to the Soviet Union?
    Mr. Parkinson: It is not true to say that we co-ordinate entirely our actions with those of the Americans. The Americans deal substantially in some products to an extent that we do not. To say that we should try to co-ordinate our trade policy on all fronts, not only Iran, is not sensible. It would produce no gain for us.
    Mr. Hill: While realising the need to export, is my hon. Friend aware of the impact of his statement on the Olympic and Afghanistan situations, when he praised the GKN contract for a factory in Russia producing heavy lorry bodies that can be used for war purposes?
    Mr. Parkinson: I am sorry to have to tell my hon. Friend that his facts are not right. The contract was in East Germany for the production of lorries that will be re-exported to third markets other than this one.
    Mr. Arthur Lewis: Will not the Minister take credit for the truly magnificent way in which the Government took action immediately following the Afghanistan invasion? In answer to a question that I tabled, it was revealed that the Government had stopped importing £1,100 worth of vodka for the Government hospitality fund. Did that not take great courage?
    Mr. Parkinson: Dutch courage, I would suggest.

    USSR

      Exchange Rate
      Mr. Knoxasked the Secretary of State for Trade how many individuals, and how many bodies, have made representations to him about the effect of the exchange rate on trade.
      The Under-Secretary of State for Trade (Mr. Reginald Eyre): About two dozen representations have concentrated on the effect the exchange rate has on trade.
      Mr. Knox: Does my hon. Friend agree that the current unrealistically high level of the exchange rate is pricing some British manufacturers out of export markets? Does he not think that the Government should do something to bring about a decrease in the exchange rate?

      821
      Does he agree that if that does not happen there is a danger that the demand for import controls will become irresistible?
      Mr. Eyre: I fully understand my hon. Friend's anxieties, but inflation remains the main threat to our economic success, and the strength of sterling has advantages in helping to contain inflation.
      Mr. J. Enoch Powell: Have any of these representations referred to the sterling-rouble rate?
      Mr. Eyre: No, Sir.
      Mr. Anthony Grant: I appreciate the overriding need to contain inflation, but is my hon. Friend aware that the present exchange rate and interest rates are increasingly oppressing a great number of exporters? Will he and his Department, since they are responsible for exports, be urging the Treasury not to be dogmatic but to seek lower interest rates at the earliest possible moment?
      Mr. Eyre: The Government want interest rates to come down as soon as possible, but not if that means sabotaging our economic policy.
      Mr. John Fraser: To what extent is the high exchange rate due to the high level of interest rates? Do not the two high rates impose a double penalty? Is it not implicit in the Minister's reply that the only reason why he is not to act upon the exchange rate is that he has made such a mess of inflation?
      Mr. Eyre: Interest rates have a bearing on the level of sterling, but to reduce interest rates before the money supply and the rate of inflation are properly under control would simply be a short-term palliative which would subsequently give a further boost to inflation?

      Airports Policy
      Mr. John Huntasked the Secretary of State for Trade if he will update those sanctions of the 1978 White Paper on airports policy dealing with general aviation requirements in the South-East in view of the subsequent changes in the pattern of road and airport developments in the area.
      Mr. Tebbit: No, Sir. I do not think that there have been sufficient changes
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      to justify another study of the situation being made at the present time.
      Mr. Hunt: Is my hon. Friend aware of the apprehension felt by the Bromley residents federation and by a number of my constituents at the proposed intensification of business flying at Biggin Hill? As the M25 has been constructed in the two years since the White Paper—one of several new factors—would it not make sense to think increasingly in terms of West Mailing as an alternative airport for at least some of these business jets?
      Mr. Tebbit: My hon. Friend keeps me well aware of the anxiety of his constituents. I met members of the Bromley residents federation in mid-March. Although the M25 has progressed since 1978, its completion was envisaged then. There is nothing new about that. In my opinion, there are substantial environmental advantages for residents in the area around Biggin Hill in having a well-managed business airfield rather than leisure and club flying taking place at its present level.
      Mr. Stanbrook: Will my hon. Friend confirm that he is not casting covetous eyes on Biggin Hill airport and that he will not allow the British Airports Authority to do so either? Will he support the continued retention of the airport by Bromley council?
      Mr. Tebbit: I will be the last man under your eyes, Mr. Speaker, to confess to the sin of covetousness. I certainly do not covet Biggin Hill; and neither does the British Airports Authority. I am very happy with the way in which the borough is going about the business of managing it.
      Mr. Wilkinson: Is my hon. Friend aware that there are insufficient facilities for business aviation in the London area? Is he further aware that of the London airports only Gatwick and Stansted have all-weather 24-hour facilities? Will he try to ensure that even more services are made available for business flying in London?
      Mr. Tebbit: Yes, it would be my objective to ensure that there is a major all-weather business aviation terminal on the north and south sides of London to serve the city.

      Saudi Arabia
      Mr. David Priceasked the Secretary of State for Trade what is his latest view of the prospects for British trade in Saudi Arabia.
      Mr. Parkinson: I hope that our close trading links with Saudi Arabia, which is one of our most important markets, will not be harmed as the result of the recent television film.
      Mr. Price: How many jobs does my hon. Friend think will have been lost in British industry as a result of the showing of the film "Death of a Princess"? Will my hon. Friend arrange an early meeting between the directors of ATV and those finding themselves unemployed so that those directors can explain their action to the people made redundant?
      Mr. Parkinson: It is far too early to say what effects the showing of that film will have, but I hope that those in the media who make such films will in future, before they show them, reflect on the fact that they could damage British interests by showing them. I hope that they will reflect on the fact that there are 30,000 British people in Saudi Arabia whose jobs are less secure as a result of that film.
      Mr. Hill: Is my hon. Friend aware of the anxiety in the British aerospace industry that over £1,000 million of exports will be lost as a result of the showing of that film in this country?
      Mr. Parkinson: My hon. Friend very properly underlines the importance to us of Saudi Arabia as a market. It is our biggest market outside Europe and America and our exports to it last year totalled nearly £1,000 million.

      Regional Water Authorities (Monopoly Situation)
      Mr. John Pattenasked the Secretary of State for Trade if he has any plans to refer any of the regional water authorities to the Monopolies and Mergers Commission under section 11 of the Competition Act.
      Mrs. Sally Oppenheim: Yes, Sir. Because there is widespread consumer concern about the charges levied by water authorities it would, I believe, be appropriate for the Monopolies and Mergers Commission to examine their costs and
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      efficiency. I therefore made an announcement on 29 April that the Severn-Trent water authority will be among future references to the Commission.
      Mr. Patten: I welcome my right hon. Friend's announcement. Is she aware that the commonest complaint about water authorities is that their charges are related to the rateable value of a property, not to the amount of water used in it? Is she further aware that that is grossly unfair to people living alone, to pensioners and to those with small families?
      Mrs. Oppenheim: My hon. Friend has raised a point of great importance to consumers. I am extremely pleased to tell him that I learnt that after my announcement that a reference would be made of the Severn-Trent water authority, resolutions appeared calling for that authority to adopt a water metering option for its consumers. I know that a great many consumers believe that it is most unfair that their water rates should be assessed on the basis of the rateable values of their homes. I hope, therefore, that in reaching its decision, the Severn-Trent water authority will take full account of that.
      Mr. Robert C. Brown: What does the Minister hope to achieve by a reference to the Monopolies Commission? Does she not accept that she stands there naked of any powers of price control after the abolition of the Price Commission?
      Mrs. Oppenheim: Any reference under section 11 of the Competition Act implies, as is correct in this case, that a monopoly exists and that therefore consumers need special protection. The purposes of these references, which vary from reference to reference, is to ensure that there are no elements of cost which are passed on in higher prices which may represent inefficiency or overmanning or are passed on in higher prices because of an abuse of a monopoly.
      Mr. Hordern: I am grateful to my right hon. Friend for announcing this reference, but did she not make a mistake in announcing that the reference was of the Severn water authority? Should it not have been the Southern water authority which has increased its rates by just under 30 per cent. in a year? Will

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      my right hon. Friend think about that again?
      Mrs. Oppenheim: I can understand the concern of my hon. Friend. The Severn-Trent water authority was chosen for reference because it is the second largest water authority in the country. It therefore seemed appropriate for reference. Naturally I shall bear in mind the remarks of my hon. Friend about the Southern water authority when we consider future references.
      Mr. John Fraser: If concern for the consumer is to be one of the criteria for references, when will the right hon. Lady make a reference from the private sector? Let us take, for example, the price of bread, bank profits and oil profits. When will she use that part of the Competition Act?
      Mrs. Oppenheim: The question refers to references under section 11 of the Competition Act. The kind of references referred to by the hon. Gentleman are not apposite in relation to this question.

      European Community (Competition Policy)
      Mr. Bowen Wellsasked the Secretary of State for Trade what is the policy of Her Majesty's Government regarding the development of European Economic Community competition policy so as to reduce the number and extent of inter-Community non-tariff barriers to trade.
      Mrs. Sally Oppenheim: The Government actively support and encourage work within the Community to eliminate non-tariff barriers to trade. Our aim is the removal of all barriers which adversely affect our exporters. We seize every opportunity to press the Commission, which has primary responsibility for administering the competition rules of the Treaty, to this end.
      Mr. Wells: Is my right hon. Friend aware that there are many ways in which the export of British products to the Community can be discriminated against? In my constituency alone I can name two products—Tapchangers and Lamp Standards—both of which our EEC partners successfully export to this country. Will my right hon. Friend list products which are successfully imported into this country to discover whether there
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      are any non-tariff barriers to our trading similar to those of our EEC partners?
      Mrs. Oppenheim: My hon. Friend will no doubt be pleased to learn that, far from being regarded as—dare I say it—"Wet" in our attitude to unfair competition from abroad, we are regarded by other countries—which sometimes complain of it—as being particularly tough in defence of British industry if it appears to be threatened by unfair competition. My Department is at present vigorously pursuing a number of cases—some of them successfully. If my hon. Friend has specific information which he would like to pass to my Department we will be pleased to receive it and act on it where appropriate.
      Mr. Ioan Evans: How does EEC competition policy apply to the common agricultural policy where we are giving £1,000 million to Europe primarily because of the CAP? That means dearer foodstuffs for housewives because we must buy from Europe instead of from elsewhere.
      Mrs. Oppenheim: I do not see how that could be represented as a non-tariff barrier.
      Mr. Straw: If the Government have been tough, how does the right hon. Lady explain that the balance of trade in manufactured goods between this country and the EEC has changed from a £300 million balance in our favour in 1970 to a £2½ billion deficit—which is getting much worse—in 1978? Does not the right hon. Lady agree that that points to the disaster of our membership of the Common Market in relation not only to agriculture but to manufacturing industry?
      Mrs. Oppenheim: What that points to is that British industry in the main—there will be exceptions—is not sufficiently competitive in relation to our EEC partners. Where there are non-tariff barriers and where there is unfair competition, it is right and proper for the Government to intervene. It is not in the interests of competition, of consumers or of our efforts to strengthen British industry for the Government to intervene where there is fair competition.

      United Kingdom-USSR (Air Services)
      Mr. Robert Atkinsasked the Secretary of State for Trade whether he will

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      take action to bring about a better balance in commercial air services between the United Kingdom and the Union of Soviet Socialist Republics.
      Mr. Tebbit: Yes Sir. United Kingdom officials went to Moscow last month to negotiate new air service arrangements with the objective of securing a better balance. A second round is contemplated in the next few months.
      Mr. Atkins: I am grateful for that answer. Is it not true that Aeroflot has sales offices in Britain but that British Airways cannot have sales offices in Russia?
      Mr. Tebbit: My hon. Friend is right, and that is one of the contributory factors to the imbalance. Aeroflot has offices here and is being allowed to open more offices in the United Kingdom. British Airways is not allowed to open offices for the sale of its tickets in Russia.

      Refusal-to-Supply
      Mr. Campbell-Savoursasked the Secretary of State for Trade when he intends to meet the Director General of Fair Trading to discuss refusal-to-supply activities.
      Mrs. Sally Oppenheim: It is for the Director General to decide whether refusal-to-supply constitutes a breach of the Resale Prices Act warranting action on behalf of the Crown in the courts. It would be improper for me to seek to influence his decision in individual cases.
      Mr. Campbell-Savours: When the Minister next meets the Director General of Fair Trading, will she raise with him the refusal to supply by major hi-fi and white goods manufacturers to Tesco and Argos and ask the Director General when he intends to take action to resolve that problem?
      Mrs. Oppenheim: I am glad to tell the hon. Gentleman that I meet the Director General of Fair Trading frequently. Although we may discuss individual cases, I do not seek, as I pointed out in my earlier reply, to influence the Director General in individual cases. There are a number of ways in which action can be taken in such instances—on the part of the individuals concerned in civil proceedings, under the Resale Prices Act—which again would be a
      828
      matter for the Director General of Fair Trading—or under the new, swifter and more flexible powers in the Competition Act which complement existing powers. No doubt the hon. Gentleman will welcome these new powers which will make it more difficult for the practices to which he has referred to prevail in future.
      Mr. Gummer: Is my right hon. Friend aware that refusal to supply is being used by newspaper wholesalers in London who are attempting to make themselves into monopolies in particular areas? Will my right hon. Friend ensure that this particular technique, which is totally against the interests of the consumer and the retailer, is brought to the attention of the Director General of Fair Trading who has said nothing about this matter up to now?
      Mrs. Oppenheim: My hon. Friend has raised a matter about which I know there is considerable concern on both sides of the House. There is a registered agreement under the Restrictive Trade Practices Act in relation to the supply of newspapers which makes it impossible for certain people to obtain a supply of these newspapers if it is refused by the wholesaler. I, along with my hon. Friend, am not satisfied with this situation; and I shall discuss it with the Director General of Fair Trading.

      Consumer Education
      Mr. Rhodes Jamesasked the Secretary of State for Trade what plans he has for consumer education.
      Mrs. Sally Oppenheim: Consumer education is important if consumers are to be properly equipped to wield their own considerable influence in the market place. Indeed, I recently announced my plan to compile a consumer education teaching pack for distribution to local education authorities.
      Mr. Rhodes James: I thank my right hon. Friend for that reply, but does she recognise that it is most important that consumers are fully informed of their rights? Will my right hon. Friend say when the education pack to which she has referred will be distributed?
      Mrs. Oppenheim: I hope that it will be ready for distribution some time next year. The purpose of this pack is to enable a new generation of consumers to

      829
      emerge from school with some idea of their rights and obligations. As a result of this they can become as effective and powerful in the market place as they should be. They will need less recourse to advice from other sources.
      Mr. Cryer: Is it not a fact that the Government have cut consumer services in the high street in collaboration with Tory-controlled county councils? Is it not the reality that consumers need speedy, if not immediate, access where false information is provided by traders or if they need to obtain further information? Should not the Government come clean and state clearly that they are not interested in the consumer and admit that they have been attacking consumer protection services nationwide?
      Mrs. Oppenheim: I can come completely clean by telling the hon. Gentleman that my main concern is for consumers. I am satisfied that the kind of advice to which he referred is available to consumers through the CABs and through local trading standards offices. The greater the number of consumers who emerge from school with some idea of their rights and obligations, the fewer consumers will need to go to centres to ask for help upon matters which they have never pursued with the companies themselves in the first place.
      Mr. Waller: Is my right hon. Friend aware of the considerable increase in the number of inquiries received by CABs since that function was dropped by the county councils? Is my right hon. Friend further aware of the effective way in which CABs have met their new responsibilities? Will she give sufficient support to the CABs to enable them to continue that function?
      Mrs. Oppenheim: I am very grateful for the way in which the CABs have responded. I am not surprised that they have done so because the quality of the service they have provided in the past is renowned. I have given a great deal of support by doubling the grant to their national unit.
      Mr. John Fraser: Is not the right hon. Lady talking nonsense if she says she believes that an education pack for schools is any substitute for detailed advice about problems faced by consumers every day? Is it not a fact that the
      830
      CAB movement opposed her wholesale slaughter of consumer advice centres?
      Mrs. Oppenheim: I am surprised that the hon. Gentleman is opposed to the education pack and that he says that it is not a substitute. He introduced a safety pack for schools which did not replace anything whatsoever. The consumer education pack is not meant to be a replacement. It is a more constructive and consistent way of ensuring that consumers are armed with the necessary information in the market place.
      Mr. Anthony Grant: Is my right hon. Friend aware that her activities in this direction are far more valuable than setting up a whole new plethora of consumer quangos which only confuse people and provide jobs for the boys?
      Mrs. Oppenheim: I agree.

      Stansted Airport
      Mr. Haselhurstasked the Secretary of State for Trade what progress has been made in planning the enlargement of Stansted airport; and if he will make a statement.
      Mr. Tebbit: Planning the development of Stansted airport is a matter for the British Airports Authority, not my Department. On 22 April, the authority announced the boundaries of the proposed development and the measures which it is to take to relieve blight. The Department of the Environment has now initiated discussions with the BAA and the local planning authorities on the procedures to be adopted.
      Mr. Haselhurst: Does my hon. Friend think that it is fair and reasonable that the British Airports Authority, with the power of the public purse behind it, should distribute to every home in my constituency a publication called "Development of Stansted Airport" which presents a one-sided version of events? Will he provide assistance to the organisations which have a different view so that they can circulate households in a similar fashion?
      Mr. Tebbit: The Secretary of State has come to a conclusion which he announced to the House on the recommendations which we should make. It would seem distinctly odd if we were to

      831
      give our help and support to undermining those proposals. What is more, I invite my hon. Friend to consider what our colleagues who represent constituencies near other potential sites would say if the Government reversed their position.

    OVERSEAS DEVELOPMENT

      Aid Programme
      Mr. McElhoneasked the Lord Privy Seal if, in the light of the Brandt report, he will review his decision to make substantial cuts in the aid programme.
      The Minister for Overseas Development (Mr. Neil Marten): No, Sir.
      Mr. McElhone: Is it not somewhat hypocritical for Ministers to pay tribute to the Brandt report while at the same time sabotaging its chances of success by making a 14 per cent. cut in real terms in the aid programme for the next four years? Is it not hypocritical for the Lord Chancellor, at the Scottish Tory Party conference on Saturday, to question the morality of trade unionists when the Government are guilty of immorality in cutting the aid programme in order to give tax hand-outs to rich taxpayers? Finally—[HON. MEMBERS: "Too long."] Does the Minister accept that the Government can do something to restore their tattered image in the Third world by using a small percentage of the £4,000 million they will receive this year from North Sea oil to save the lives of some of the 8 million people who are living and dying in poverty?
      Mr. Speaker: Order. Those who were here at the beginning of Question Time will know that I asked hon. Members to ask one supplementary question and not to try to argue a case, because that prevents other questions from being called.
      Mr. Marten: The Government have already paid tribute to the Brandt report. They are considering the proposals, but consideration is not yet complete. The Government hope to publish their views before the Venice summit on 22 June. If I might answer a second supplementary question—the cuts are due to the appalling economic state which the Government inherited.
      Mr. Onslow: Apart from the Opposition and my right hon. Friend the Member for Sidcup (Mr. Heath), how many people does my hon. Friend know who want to pay more in tax so that the money can be given to the underdeveloped countries to produce goods which threaten the jobs of British workers? Does it not make more sense to use overseas aid money to increase the effectiveness and efficiency of British industry?
      Mr. Marten: As my hon. Friend excluded the Opposition, the answer is "None."
      Mr. Armstrong: In relation to the Lord Chancellor's pontification about morality, is the Minister aware of the growing concern, particularly in the British Council of Churches, at the fact that the Government have turned their backs on the obligation and responsibility that we have for the Third world? Does he agree, not only that money spent on overseas aid is a moral obligation, but that it is in our interests to spend in that way instead of pursuing the costly arms race?
      Mr. Marten: With great respect, that is absolute nonsense. If the right hon. Gentleman could inform the Churches of that, I should be grateful.
      Mr. Dorrell: Can my hon. Friend confirm that the Brandt report said that two of the greatest contributions that Britain can make to Third world development are the promotion of overseas investment and the expansion of manufactured imports—policies which are rigorously opposed by the Opposition?
      Mr. Marten: That is correct. They would be of great help to developing countries. The specific recommendations of the Brandt report must be balanced against the economic realities facing the country. Proposals for increasing aid or accelerating the transfer of resources raise obvious difficulties.

      Commonwealth Development Corporation
      Mr. Bowen Wellsasked the Lord Privy Seal when he will be able to report the results of his review of the Commonwealth Development Corporation; and if he will make a statement.
      Mr. Neil Marten: We are undertaking a review of the activities of the Commonwealth Development Corporation in the light of the statement on aid policy which I made to the House on 20 February. Officials of the corporation are participating fully in the work being done. I am not yet able to say when it is likely to be completed.
      Mr. Wells: I thank my hon. Friend for that reply. When does he expect the review to be completed? Is he aware that urgent decisions must be taken in relation to the Commonwealth Development Corporation investment programme and manning, and the chairmanship of the corporation, within the next few months.
      Mr. Marten: I recognise the need for urgency in completing the review. I cannot say precisely at this stage when that will be. Whenever it is, the House will be informed of the conclusions reached by Ministers. Any change of policy in relation to the CDC as a result of the review will be the subject of a statement to the House.
      Mr. Deakins: Can the Minister confirm that the CDC has a future under the Government's new aid policies?
      Mr. Marten: I rather think so, but that is what the aid review is always about.
      Mr. Hooley: Is the Minister aware that the CDC is doing a brilliant job in developing countries by carrying out projects which are fully commercially viable and which, at the same time, make important contributions to the economies of the countries in which they are operating?
      Mr. Marten: That is true. There has been no review of the CDC since 1975 and it is time for another.

      Overseas Aid Policy
      Mr. Paul Deanasked the Lord Privy Seal whether, when considering payments of overseas aid, he will take into account losses caused to British companies owing to the failure of foreign governments to honour guarantees.
      Mr. Neil Marten: All relevant factors are taken into account when considering allocations of overseas aid.
      Mr. Dean: Is my hon. Friend aware of the correspondence that I have had with him and other Ministers about the failure of the Government of Nepal to ensure that a debt owed to a British company is paid? Does my hon. Friend accept that in such circumstances British companies are entitled to look for support from the British Government and that our aid programme should take account of any failure to honour obligations?
      Mr. Marten: My hon. Friend should recognise that the British Government have given the firm all support that they can through diplomatic channels. It is doubtful whether the proposal to cut off aid would help because aid improves the economy and makes it more possible for Governments to settle commercial claims. One of the problems is that the firm obtained a guarantee from the Nepal Government for the repayment of capital but failed to get it for the repayment of interest. It is that which is outstanding.
      Mr. Renton: As it is a subject close to my hon. Friend's heart, can he say whether any progress is being made in developing European Community credit guarantees to cover mineral developments in the Third world? If they can be developed, would not that be of great assistance to the Third world and to mining companies in Britain?
      Mr. Marten: I am afraid that that does not arise out of this question.

      Zimbabwe
      Mr. Spearingasked the Lord Privy Seal if he will make a statement concerning his plans for assistance to Zimbabwe.
      Mr. Canavanasked the Lord Privy Seal whether he will increase the amount of aid available to Zimbabwe.
      Mr. Neil Marten: I refer the hon. members to the statement which my right hon. Friend made on 15 April. The amount of British aid available to Zimbabwe remains as stated then.
      Mr. Spearing: Does the Minister agree that, although there were different views about the amount, there was general comment on the tardiness of response? Does he not agree that this country has a specific responsibility for the former tribal trust areas, where there was no infrastructure of administration for some

      835
      time? Will we be able to help if requests are made in that area?
      Mr. Marten: The requests for help will come from the Zimbabwe Government. They will discuss those requests with us, and we shall allocate the aid that we have promised already according to the joint wishes of the Zimbabwe Government and ourselves.
      Mr. Canavan: Although there was a general welcome for the decision to grant £75 million over three years, is the Minister aware that some assessments indicate that Zimbabwe may need up to 10 times that amount? Will the hon. Gentleman be a little more forthcoming and give some indication of the possibility of further aid from Britain, and also from some of the richer member States of the Common Market, which have benefited for so long from the excessive generosity of Britain towards the Common Market, budget?
      Mr. Marten: I shall communicate the latter point to my right hon. Friend the Prime Minister, who will be dealing with the matter at the Council of Ministers. In our figure of £75 million we have allocated all that we can for the moment. It is for the other countries—and many are already pledging sums—to fill the balance of the amount that Zimbabwe will need. We are still pressing many countries to help Zimbabwe.
      Mr. W. Benyon: As the first step in that process, will the Government transfer aid that is at present allocated to
      836
      Tanzania to Zimbabwe, as the former country does nothing but kick Britain in the teeth?
      Mr. Marten: While taking the point made by my hon. Friend, I am afraid that the aid for Tanzania is committed already, and has been for some time. We cannot go back on Government commitments.
      Mr. Speaker: Mr. Younger.
      Dame Judith Hart: On a point of order, Mr. Speaker. I have been trying to catch your eye.
      Mr. Speaker: I am sorry. I did not realise that the right hon. Lady had tried to catch my eye.
      Dame Judith Hart: I apologise to you, Mr. Speaker. I wish to ask a short, but double, supplementary. What did Mr. Mugabe have to say to the Prime Minister on Friday about his need for increased aid, especially increased technological assistance? Why is the aid mission still not going to Zimbabwe two months after independence? What proportion of the £7 million reconstruction aid is expected to be spent during the next few months?
      Mr. Marten: On the latter part of the right hon. Lady's question, I expect that quite a lot of the £7 million will be spent this year. It is a question of its being ready, available, and they can spend it.
      I have not yet heard about the contents of conversations which took place between the Prime Minister and Mr. Mugabe.

HAMPDEN PARK, GLASGOW (DISTURBANCE)
The Secretary of State for Scotland (Mr. George Younger): With permission, Mr. Speaker, I should like to make a statement about the serious outbreak of violence that marred the Scottish Cup Final between Glasgow Rangers and Celtic at Hampden Park, Glasgow, on Saturday 10 May.
A crowd of about 70,300 attended the match, segregrated in the usual way, with Celtic supporters at one end of the ground and Rangers supporters at the other. During the game itself there were no major outbreaks of missile throwing or fighting on the terracings, and although 73 arrests were made inside and outside the stadium before and during the game, these mainly involved charges of breach of the peace and disorderly behaviour. The number of arrests at that stage was not unusual for such an occasion.
When the game ended, after extra time, a number of Celtic players ran towards the Celtic end of the ground and went on to the track to wave to their supporters. Supporters climbed over the protective perimeter fence to congratulate the players, and some hundreds of supporters ran on to the field. In turn, several hundreds of the Rangers supporters climbed over the fence and ran forward, until the two factions met on the field. Fighting broke out and a series of charges and counter-charges took place. During the invasion of the field many bottles, cans and other missiles were thrown.
In the light of experience gained in policing previous matches, about 400 officers were on duty within the ground during the game and over 100 more were deployed in the vicinity outside. As the game appeared to be ending without disorder, the police, as is normal practice, began to withdraw some officers in order to cope with the departing supporters outside. As the game ended, about 200 police remained in the ground. In response to the situation that developed, a number of those—including both mounted and foot officers—who were by then outside the ground were redeployed to assist those inside. By their prompt and vigorous action the police were success-
838
ful in completely restoring order within 15 minutes from the start of the disturbance.
A total of 179 arrests were made directly related to the match, both inside and outside the stadium, and a number of those arrested were detained in custody. Twenty-nine people were treated by ambulancemen, but that included fainting cases. The exact number of those injured it not known. Four police officers, including one special constable, received slight injuries, but none was taken to hospital.
I am sure that the House will join me in deploring the disgraceful scenes of violence that took place, and in congratulating Strathclyde police on their firm and effective response. Had it not been for their prompt action, a much uglier situation might have developed.
This outbreak of football hooliganism at its worst underlines the need for legislative action to curb such behaviour. It is significant that after the match the terracings were littered with thousands of bottles and cans, indicating the amount of alcohol that had been consumed. In this connection, the Criminal Justice (Scotland) Bill at present before Parliament contains provisions designed to reduce and, if possible, eliminate the alcohol problem at matches of this kind. Moreover, by prohibiting the carrying into football grounds of bottles, cans and other containers, whether they hold alcohol or any other beverage, the Bill will prevent their later use as missiles or weapons. What happened on Saturday clearly indicates the need for these provisions.
In addition, it seems clear that the perimeter fence, which is intended to keep the crowd off the pitch, proved inadequate. I understand that the chief constable intends to discuss this aspect with the football authorities. Hampden Park is, of course, licensed under the Safety of Sports Grounds Act 1975, and I understand that Strathclyde regional council, which is responsible for licensing grounds in the area, proposes to examine the conditions attached to the licence and to consider whether these conditions require alteration. Inevitably, too, it will be necessary to consider whether stricter limitations should be placed on the numbers of spectators permitted to attend

839
events of this kind, and I propose to consider this in consultation with the interested bodies. Plainly, we cannot permit such scenes to recur if football is to survive as a spectator sport. But the main responsibility rests with the football clubs and authorities themselves, and I have no doubt that they will be closely examining to what extent it was the actions of players at the end of the game that caused the disorder.
Mr. Millan: The House will be grateful to the Secretary of State for making a statement today. The scenes at the end of the match on Saturday were utterly appalling—worse than I have ever seen. If anything, they were rather understated in the Secretary of State's statement. He attributed the blame to one incident. I think that that is, perhaps, rather unfortunate, because I believe that what happened on Saturday was rather more complicated than the Secretary of State indicated in his statement.
I wish to ask a number of questions. First, it is obvious that the barriers were completely inadequate to prevent spectators entering the field. Can we be assured that something will be done quickly about that and, especially, that the matter will be dealt with in the design for the new Hampden Park football stadium? Secondly, are not some of the figures given today for police numbers rather different from those that appeared in reports over the weekend?
There has been much difficulty in understanding exactly what happened. Quite apart from police deployment, which is the responsibility of the chief constable, the total numbers are the responsibility of the football authorities, because they pay for them. I would be grateful if the Secretary of State would comment on that. Undoubtedly, there was a period on Saturday when the police were not able to handle the position because they were not there in sufficient numbers. I do not think that it was just a question of deployment.
Thirdly, we accept what the right hon. Gentleman said about the Criminal Justice (Scotland) Bill, and we hope that those powers will be implemented vigorously when it reaches the statute book. However, it is a little ironic that we should be attributing—in my view, perfectly rightly—so much of the trouble on Sat-
840
urday to drink, when that game—like most of the other major football events in Scotland over the last year—was sponsored by one of the drinks interests. On Saturday, the game was sponsored by Younger's beer. I say that perfectly seriously. It is not much good our talking about the unfortunate influence of drink in these incidents when the whole of the football ground is plastered with advertisements for drink. The Scottish Football Association, the clubs and the supporters' associations must look at that question.
Will the Secretary of State confirm, as I hope is the case, that the Lord Advocate has given instructions—as the Lord Advocate in the previous Government did—that anyone charged with offences arising from Saturday's events should be prosecuted not in the district courts but in the sheriff courts? I hope that we can have an assurance about that.
Mr. Younger: I am grateful to the right hon. Gentleman. I entirely share his expression of horror at the scenes that took place. I agree with his description. As he will, I am sure, realise, the barriers have been there for some years, but were not a requirement for the licensing of the ground. In fact, I understand that they were erected to fulfil the conditions for a UEFA match. Therefore, they were constructed for that reason and were not part of the requirements governing the licensing. There are differing views about whether or not there should be barriers, and whether it is an advantage to have the crowd completely segregated, because it means that the police are less able to get into the terracing if trouble breaks out.
As the right hon. Gentleman said, it is the responsibility of the owners of the ground and the promoters of the match to make sure that there is an adequate police presence. They are required by their licence to provide an adequate police presence and to do it in consultation with the chief constable. In this case, that procedure was carried out. I can confirm that the police numbers that I gave today are correct and that earlier reports in some newspapers, which gave different numbers, were incorrect.
I note what the right hon. Gentleman said about the Criminal Justice (Scotland) Bill. I can assure him that that Bill's provisions, if and when they are enacted,

841
will be fully implemented so far as I am able to ensure.
I agree that sponsorship is something that will have to be considered carefully by those promoting such matches as this. There is a contradiction in that regard, and I have no doubt that they will think carefully about it. I shall certainly draw the attention of my right hon. and learned Friend the Lord Advocate to what the right hon. Gentleman said about prosecutions.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that another statement is to follow and that the debate on Private Members' motions can continue only until 7 o'clock. Threfore, I shall call four hon. Members from either side and we shall then move on.
Mr. McQuarrie: I am sure that the House will congratulate the chief constable of Strathclyde and his officers, particularly the mounted officers and the woman in that mounted section, who so gallantly went into the charge and cleared the field within 15 minutes. Is my right hon. Friend satisfied that the protective barriers, which were erected for the UEFA match, were satisfactory for Saturday's match, when for so many years there has been trouble between those two clubs at every major game in which they have taken part? When one looks at photographs of Wembley stadium and the type of barrier that is constructed there as a protection against rowdyism, does not one see—I am sure that my right hon. Friend agrees—that Scotland can do equally well for matches at our wonderful Hampden stadium, which has been put to shame by the dreadful exhibition by the supporters of both teams on Saturday?
Mr. Younger: I am grateful to my hon. Friend. I am sure the whole House echoes what he said in congratulating the police who were on the spot for the courageous action that they took. It was a nasty situation, and they deserve great credit.
My hon. Friend is quite correct in stating that the barrier is one of the problems that will have to be considered carefully. However, it is by no means accepted that in all circumstances barriers are the best thing. Those barriers have been in use for two years, and this is the first
842
time there has been any trouble regarding them.
Mr. Maxton: My constituents suffer worst from this drunken and unseemly violence, because Hampden Park is in my constituency. Does the Secretary of State agree that much of the violence is due to religious bigotry and that the clubs themselves set a bad example? Will he put the strongest pressure on the clubs to ensure that they carry out policies that do not continue that bigotry? Does not he also agree that Hampden stadium itself is in need of renovation, not only in terms of barriers but with regard to a total overhaul of seating accommodation, which would lessen the violence? Will he now make a statement to the effect that the Government will provide sufficient money to carry out that redevelopment as quickly as possible?
Mr. Younger: I sympathise very much with the sentiments expressed by the hon. Gentleman about the feelings of his constituents. I am sure that every hon. Member thoroughly agrees with him. I also agree strongly with what he said about bigotry playing its part. I shall do all that I can to encourage all concerned to remove any causes of such bigotry. However, that and the effect of alcohol cannot be ignored.
Mr. Ancram: I welcome my right hon. Friend's announcement that the question of the barrier will be looked at. Will that be done as a matter of urgency? I am sure that my right hon. Friend will appreciate the concern of most people in Scotland at how easy it was for those animal hooligans to get on to the field. Can he assure the House that steps will be taken to prevent that at the forthcoming Scotland-England game?
Mr. Younger: I agree with my hon. Friend that this matter will have to be looked into quickly. We shall have to take into account the question of discouraging or preventing people getting on to the field and to bear in mind the safety of those who remain on the terraces. This matter will have to be looked at with both those aspects in mind.
Mr. Freud: While the Secretary of State rightly and predictably praises the police, blames the demon drink and condemns the inadequacy of the barriers,

843
does not he accept that it is wrong that the football clubs and the Scottish Football Association should make any money while the innocent taxpayer pays for the ambulances and the hospital back-up services? Is it not time to consider withholding substantial sums of money against the sort of eventuality that occurred at Hampden on Saturday?
Mr. Younger: I sympathise with the hon. Gentleman's feelings. I think that there are difficult and practical problems involved in charging for all those services, and it is difficult to say where the line should be drawn. Of course, it is already the case that the cost of the police is borne by the promoters of the matches, and we can certainly look at extending that principle.
Mr. Bill Walker: Does not my right hon. Friend agree that the activities of the hooligans on Saturday should now give himself and the Government cause to rethink the funding of the new Hampden? As Glasgow district council has reneged on its commitment, would not it be wise to see that in future all major games are played in rotation round the Scottish cities rather than remaining in one place where we know violence occurs.
Mr. Younger: I am not sure whether my hon. Friend is making an offer that the next match should be held in Perth. Nevertheless, I realise that he makes a serious point. I do not think that the tragic events that took place on Saturday have a direct relevance to the decision about the future of the rebuilding of Hampden Park. As the House knows, I am already discussing with Hampden Park Limited whether and on what terms I should confirm the provisional offer of grant that has already been made. I also regret the fact that Glasgow district council withdrew its contribution, and I very much hope that it will be persuaded to reinstate it.
Mr. Gordon Wilson: Does the Secretary of State agree that the scenes that we witnessed on television on Saturday were not only deplorable but frightening, in terms of the way in which people came to blows and the damage and harm that could be done? Will he comment on the fact that the problems arising the case of Rangers and Celtic football matches
844
have existed for a number of years? Is not it surprising that nothing was done to ensure that the barriers were adequate for incidents that have occurred time after time? Can the right hon. Gentleman say when his inquiries will be completed, and whether he will publish the outcome?
Mr. Younger: I share the hon. Gentleman's sentiments about the frightening nature of what we saw on television. Indeed, my hon. Friend the Minister who is responsible for industry and education was there in person, and gave me a personal report of what he saw. I do not think that it is quite fair to say that nothing has been done over many years. A great deal of work has been done, notably by the hon. Member for Glasgow, Queen's Park (Mr. McElhone) and his committee, which looked into this matter. We are proceeding to carry out many of the recommendations that that committee put forward. Therefore, it is not true to say that nothing has been done.
In addition, we are trying to marry the legitimate desires of the many thousands of people who enjoy a harmless sport in a free country with the safety of those who may get caught up when something goes badly wrong. It is not easy to carry on such activities and to maintain absolute safety in a free country without cutting into that freedom. However, we shall try to reach the best possible solution.
Mr. Henderson: Although I accept what my right hon. Friend said about the disgraceful scenes at the end of the match, is it not just as appalling that it is considered normal and reasonable for 73 arrests to be made during and before the match? Does he accept that although the passing of the Criminal Justice (Scotland) Bill might help, law and order depend ultimately on the people themselves?
Mr. Younger: I agree that when I received the first report on the events that took place I was struck most forcibly by the fact that there had been 73 arrests during a perfectly normal match, and before those deplorable events took place. That should be taken very seriously. I entirely agree that if ordinary individuals are to enjoy football, people will have to be better behaved. We must help them to do that.
Mr. Dalyell: In terms of the last sentence of his statement, on what precise ground does the Secretary of State suggest that the players were to blame?
Mr. Younger: It is not my view that that was the case. I have not yet had a report.
Mr. Dalyell: Why put it in a statement?
Mr. Younger: As I said, it is not my view that that took place. Until I have had a full report, I cannot say whether the players were to blame.
Mr. Dalyell: It is in the statement.
Mr. Younger: The police view is quite clear, namely, that had the Celtic players not acted as they did an invasion of the pitch might not have occurred. I am only recording the view of the police. The police may be right or wrong, but that appears to be their view.

ANGLO-LIBYAN RELATIONS
The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): With your permission, Mr. Speaker, I will make a statement about Anglo-Libyan relations.
Her Majesty's Government have for some time been concerned about statements and activities by Libyan Government officials, which amount to political intimidation of Libyans resident in this country. Within recent weeks there have been a series of crimes involving Libyans.
My right hon. Friend the Prime Minister therefore decided to send a senior Foreign and Commonwealth Office official, Sir Antony Acland, to Tripoli on 27 April, with a personal message for Colonel Gaddafi. This was followed up by meetings in both Tripoli and London between Libyan and British officials.
These contacts have led to positive developments over the last few days. The Libyan authorities have agreed, at our request, to withdraw four Libyans connected with their mission in London, who have been involved in activities which are incompatible with their functions. Three of those Libyans are at present in the United Kingdom. We are emphasising that we expect them to leave within the next few days.
One complication has been the status of the Libyan people's bureau, which has taken over the functions of the Libyan embassy. It is not for us to say how the Libyans should organise their mission, but it must be established that the people's bureau will be fulfilling the functions of a diplomatic mission under the Vienna convention on diplomatic relations. We are holding discussions with the Libyan authorities which we hope will resolve this question.
Our objective throughout has been to show that we wish to maintain good relations with Libya but that harassment of Libyan expatriates here must stop. The Libyan Government have informed us that they wish to see an improvement in our relations and that they desire closer co-operation, particularly in the commercial and economic fields. We share this desire, but our relations cannot improve unless the campaign of harassment ends immediately. The action which we have taken is designed to make that clear.
Mr. Shore: The House will be glad that the Minister has made a statement, and it will deplore the events that have made it necessary. The murder of two distinguished Libyans in London during the past four weeks, followed by Colonel Gaddafi's brazen threat to kill others unless they return forthwith to Libya, is a challenge that no Government could fail to meet.
We welcome the agreement with the Libyan authorities to withdraw four of their nationals, attached to the mission in London. What assurances can the Minister give about the behaviour of other Libyans in England, including those who, in this era of air transport, may so easily be sent here? I note what the Minister said about the status of the Libyan embassy, or people's bureau as it is now termed. May we take it that whatever is the upshot of the discussions our law will allow the prompt expulsion of those involved in the business of murder?
What consultations have the Government had with other countries in which these hit squads are active? Is this not a matter for invoking international as well as national law?
Mr. Hurd: The right hon. Gentleman referred quite reasonably to the two murders that have taken place in the United Kingdom. As the House knows, three people are in police custody and the case is now sub judice. However, in case there is any misunderstanding, I should make clear that there is no evidence that the four Libyans to be withdrawn were directly implicated in those murders. We shall enforce the principle laid down by the Home Secretary when he said:
"We shall ensure that our law is respected by all those who remain here."—[Official Report, 8 May 1980; Vol. 984, c. 523.]
That point has been made clear to the Libyans.
As regards entry into the United Kingdom, there is a visa regime. Any Libyan who wishes to come here needs a visa. Obviously the statements and activities to which I have referred have made necessary a more rigorous control.
The right hon. Gentleman's last point was certainly correct. We are in close touch with Governments who have been similarly afflicted, particularly those of Italy, the United States of America and
848
Germany. It may well be that further consultation and, if necessary, further action in common will be needed.
Mr. Grimond: Is the Minister aware that the public are incensed because the police are put in danger and removed from their proper duties in order to deal with vendettas between foreigners that take place on British soil and that have nothing to do with this country?
Will the hon. Gentleman elaborate in more detail how thugs get into this country in considerable numbers, while those on legitimate business often face great difficulties? Is it not time to look not only at the position of the Libyan people's bureau but at the whole question of diplomatic immunity and the conduct of embassies? Will the Minister read Rebecca West's article in the Sunday Telegraph?
Mr. Hurd: I am sure that what the right hon. Gentleman said in his first question was right. People are angry about the situation. We are determined that London should not become a battle ground for Middle Eastern factions. The action taken at the Prince's Gate seige is evidence of that. This action is another piece of evidence. We hope that these pieces of evidence will, as they accumulate, have a punitive effect.
Immigration control concerns my right hon. Friend the Home Secretary. No system of control, however exact or meticulous, can produce a 100 per cent. assurance that the wrong people will not get in. As I have said, recent statements and activities have made more rigorous control necessary. Our immigration officers are well aware of that.
Mr. Emery: Although I welcome my hon. Friend's statement, if the Foreign Office has any doubts about whether the diplomatic bag is being used for the importation of firearms, will he ensure the diplomatic bag is X-rayed? If there is proof that firearms are being imported, will he give an assurance that the bag will be rejected and that positive action will be taken against the embassy involved?
Mr. Hurd: My hon. Friend has raised an important point. In a further reinforced circular to the Diplomatic Corps, we have recently made clear that we shall take seriously any hard evidence that any

849
mission is using the bag to import weapons covertly, or that any mission handing them to untitled persons. The Vienna convention is a fairly modern instrument, and it is quite specific on these issues. If it were properly observed, many of these problems would not arise. Our concern is not, therefore, so much to change the convention as to make sure that its terms are observed.
Several Hon. members rose—
Mr. Speaker: Order. In order to be fair to the debate on the Private Member's motion, I shall follow the same practice on this occasion and call four hon. Members from either side of the House.
Sir Frederic Bennett: The Minister made it clear that in his view the four people who are to go were not directly implicated in the murders concerned. Will he tell us, therefore, what status these individuals possess? Do the Libyans claim that they are diplomats? If so, do we accept it? Are we asking for them to go because they are persona non grata, or are we seeking merely an agreement by which they should be deported without trouble? I think that the public will appreciate the assurance that these individuals are not those who would be subject to criminal charges if they were not diplomats, and therefore there would be no reason why they should not have the same justice meted out to them as to anyone else.
Mr. Hurd: The legal position is confused, as my hon. Friend knows, because a few months ago the Libyans said that their embassy was no longer to be regarded as an embassy but as a people's bureau. We are trying to sort that out, but in this particular situation we thought that it was not right to wait until that had been sorted out. We therefore cut through the legal tangle and asked the Libyan Government to withdraw these four people. Two of them are members of the people's bureau. One of them, I understand, is part-time, and another has less direct connection. But they are connected in one way or another with the people's bureau. That is why we asked the Libyan Government to withdraw them.
Several Hon. Members rose—
Mr. Speaker: Order. I believe that I called in succession two hon. Members from the Government Benches. I shall therefore call five from the Opposition Benches instead of four.
Mr. Donald Stewart: Since the Libyan Government, of their own volition, reduced the status of the representation, were they informed that the diplomatic immunity and all the other rights of an embassy would cease to exist, and, if not, why not?
Mr. Hurd: No. The Libyans' view is that the people involved in the people's bureau are not diplomats. This does not affect the principle with which we are involved in this House and in this decision. The principle is that people living and working in this country, whatever their status, should obey British law. If they are diplomats, there is one way of getting rid of them. If they break British law, if they are not diplomats, there is another way. But in either case there is a way.
Mr. Eldon Griffiths: Did Sir Antony Acland, on his visit, get any inkling of Colonel Gaddafi's threat that oil supplies would be cut off if Britain, America and others failed to compensate for damage done during the Second World War?
On the specific issue of the protection of embassies, is my hon. Friend aware that there are over 1,000 Metropolitan Police officers engaged on this business? Will he, therefore, consider limiting the number of people who come to missions, because they cause an insuperable problem?
Mr. Hurd: I have much sympathy with the last point. On the first point, the threat about oil, which I have read about in the newspapers, was not implied to Sir Antony Acland and it has played no part in shaping our policy.
Mr. Faulds: Will the Foreign Office try to learn that it speaks for Britain and not refer to Anglo-Libyan relations or Anglo-any other country's relations, because that is quite incorrect? I make the point simply because the right hon. Member for Western Isles (Mr. Stewart) forgot to make it.
The hon. Gentleman may have gathered that I am somewhat pro-Arab in my Views. Will he accept, however, that I

851
very strongly deplore the external activities of such people as these Libyan activists, whose work does not enhance the Arab image throughout the world and who make the work of people such as myself, who are Arab proponents, much less easy?
Mr. Hurd: I entirely agree with what the hon. Gentleman has said. I hope that all those right hon. and hon. Members who are friends of the Arab cause will take the opportunity to make the same point.
Mr. W. Benyon: Further to the question put by my hon. Friend the Member for Honiton (Mr. Emery), will my hon. Friend the Minister accept that many of us will not be satisfied with his answer in view of the wide suspicions that not only weapons but drugs are coming in through diplomatic immunity and the diplomatic bag? Has not the time come for us to have a completely new look at the whole question of diplomatic immunity generally?
Mr. Hurd: We try to look at this matter all the time. What we need in order to justify the approach that my hon. Friend suggests is hard evidence. That is one reason why it is important to keep in touch with other Governments, as has been suggested.
Mr. Arthur Lewis: Further to the point made by the right hon. Member for Orkney and Shetland (Mr. Grimond), will the Minister also look at the article in the Daily Mail which gives chapter and verse of where these phoney colleagues are being set up for these people to come here allegedly to take English courses, but in fact come here and take jobs? This has happened not only recently; it has been going on for years. The previous Government did nothing about it. Now we have a docker coming to England from Arabia when our own docks are being shut down, dockers are unemployed, and we are giving them £15,000 in redundancy pay. We are having here dockers from Arabian countries. Is this not farcical?
Mr. Hurd: The question of who is and who is not allowed to come into this country is a matter for my right hon.
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Friend the Home Secretary, but I note what the hon. Gentleman has said.
Mr. Peter Bottomley: Will my hon. Friend accept that the Government's measured response is the right one rather than whipping up anti-Libyan or anti-anyone else feeling? Will he give an assurance that the Government will continue to act in dealing with diplomats or pseudo diplomats whether they are spies or are stirring up murder on London's streets?
Mr. Hurd: I agree with my hon. Friend. It is not just a question of our diplomatic relations with Libya; it is a question of the whole of our dealing" with that country, including the fact that there are nearly 6,000 British people working there, and a flourishing trade. It is essential that the law of this country should be obeyed by everyone who works here, but if this can be achieved by discussion, so much the better for our own national interest.
Mr. Greville Janner: The Minister said that he was waiting for hard evidence. Quite apart from the Libyan murders and violence to which he has referred, surely the Iranian siege, as compared with the holding of American hostages in Tehran, is the clearest possible evidence that the whole area of diplomatic immunity, law and practice needs urgent review.
Mr. Hurd: I would dissent from that. What is clear from the Iranian siege is that the whole system of immunity and diplomatic practice was in that case ignored and trampled on, just as it has been in Tehran, as we shall be discussing later this evening. It is not so much a matter of tearing up a relatively modern convention as of ensuring by decisions such as we have announced that that convention is observed.
Mr. Alexander W. Lyon: Is the Minister aware that two wrongs do not make a right and that, merely because we are all incensed at the harassment of innocent people in this country, we should not immediately go over to the harassing of innocent Libyan students who come here for proper purposes of study? The idea that we should use immigration control as a tool for a stronger deterrent against the Libyan Government means that we

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shall probably create as much injustice for innocent students.
Mr. Arthur Lewis: Send them to your areas, not to my docks.
Mr. Hurd: Immigration control is rightly used as a means of deciding in the public interest who enters this country and who does not, but we are not in the harassment business. Our concern is that those who come here obey the law of this land.

ANGLO-LIBYAN RELATIONS

  STATUTORY INSTRUMENTS, & C.
  Motion made, and Question put,
  That the draft Upholstered Furniture (Safety) Regulations 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas.]
  Not less than 20 Members having risen in their places and signified their objection thereto, Mr. SPEAKER declared that the Noes had it, pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c).
  Motion made, and Question put,
  That the Import and Export (Plant Health) (Great Britain) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas.]
  Not less than 20 Members having risen in their places and signified their objection thereto, Mr. SPEAKER declared that the Noes had it, pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c).

FUEL PRICES
4.10 pm
Mr. John Cartwright: I beg to move,
That this House, concerned by the impact of ever rising fuel prices, by the growing level of disconnections for fuel debt and by the number of households left without gas or electricity for periods of more than one month, calls on the Government to end wasteful energy consumption and to ensure that every household can afford adequate warmth.
I am acutely conscious of the fact that a sunny May afternoon is not, perhaps, a suitable occasion on which to ask the House to consider the position of those who cannot afford adequate heating in their homes. Nevertheless, this morning's announcement of a second electricity price rise in four months underlines the fact that none of us can shelter from the inexorable increase in fuel prices, even in summer months. It will be too late to discuss these issues in the winter, when our constituents will discover that their fuel bills will be around 30 per cent. higher than those that they struggled to pay last winter.
The motion refers to the impact of ever-rising fuel prices. No hon. Member can argue about the significance of those price rises. Department of Energy figures show that between 1973 and 1979 solid fuel prices rose by 131 per cent., gas prices by 85 per cent., and electricity prices by a staggering 183 per cent. As we know, the prospects for the immediate future are a great deal worse. The Government are requiring that domestic gas prices shall rise by 10 per cent. above the rate of inflation, not only this year but for the succeeding two years. There was a 17 per cent. rise in April, and there will now be a further 10 per cent. rise in October. Paraffin, which was decontrolled by the Government in July 1979, has risen in price by about 60 per cent. since then—from 53p per gallon before it was decontrolled to between 80p and 85p a gallon today. Paraffin is very much the fuel of the needy, the poor, and particularly the elderly.
The most frightening figures are those for electricity. The Government have required that electricity prices shall rise by 5 per cent. over and above the industry's costs this year, and for the two succeeding years. There was an announcement of a 17 per cent. increase in April, and

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today there was an announcement that the October increase of 10 per cent. is to be brought forward to August. It is worth recalling the increases in electricity prices during the past two years. On 1 June 1979 there was an increase of 8·6 per cent.; on 1 September 1979 there was an increase of 8 per cent.; and on 1 April 1980 there was an increase of 17 per cent.
That means that the price for the average domestic user will be between 30 and 40 per cent. higher than a year ago, and that is before taking into account the most recent increase of 10 per cent., announced today. It is no wonder, with a record such as that, that the Government have decided that the industry's costs and efficiency should be referred to the Monopolies Commission. I welcome that decision, but I doubt whether it will have much impact on the bills that my constituents will have to pay next winter.
The Electricity Council has produced figures that show that the price per unit for the average domestic user, including the standing charge, has risen from 1·03p per unit in January 1974 to 3·97p per unit in April 1979. The price has almost quadrupled in that period of five years. It is a staggering price rise. The result of the second increase of 10 per cent., announced today, means that electricity prices this year will rise almost as much as gas prices. That undermines one of the reasons that we were given for the rise in gas prices earlier this year. They had to be jacked up in order to make gas less attractive, as compared with electricity. Gas and electricity prices now seem to be chasing each other, with the consumer struggling hard to keep up.
In 1978 the previous Administration estimated that fuel prices in real terms would double by the end of the century. It seems as though that prediction is out of date. At the present rate, fuel prices must surely treble, if not quadruple, by the end of the century. We all feel the impact of this sort of price rise, but its impact on the poor should worry us.
Low-income households tend to have above-average fuel consumption. Single-parent families, families with children under 5, the retired, the sick and the unemployed all spend long periods of the day at home, when they need heating.
856
Also, they tend to live in worse housing conditions—property with no insulation—and often they are locked into the most expensive systems of heating.
The Supplementary Benefits Commission showed that in 1977 37 per cent. of all households receiving supplementary benefit had all-electric systems of heating A single mother with a child under 5 receives the princely sum of £23·50 in supplementary benefit, with a 90p additional heating supplement, which is shortly to rise to £1·40. Set against that, her winter quarter's fuel bill could easily be £100 for electricity, and could be as high as £150—a payment of about £10 a week. Faced with that sort of expenditure, people have to make a conscious decision between paying for their fuel and spending adequately on clothes and food.
In the winter of 1978–79 a group of enterprising pensioners in my constituency carried out a survey of high-rise flats with all-electric heating systems. Most were one or two-bedroomed properties. They found that where the under-floor heating system was in use, the average bill was £118·63. Where under-floor heating was not used, the average bill was £80. The London borough of Greenwich published the results of an expert council survey on the problems, in those flats. It showed that electricity costs between 1970—when the flats were first occupied—and 1979 had increased fivefold. It showed that, to be used properly, the electrical systems in a typical one-bed-roomed flat would cost £556 a year—£10·69 a week. The London Electricity Board produced a sample showing that none of the flats in those blocks was adequately using the under-floor heating system,
"no doubt because of the high cost"
It was also discovered in a survey, and confirmed by the borough council, that many of the flat owners who attempted to use the under-floor heating found that the heating was lost into neighbouring flats. I suggest that that happens in blocks of flats in many parts of the country.
It is clear that rising prices are putting people at risk. The Office of Population Censuses and Surveys, in the "Monitor" published on 15 April 1980, reveals a significant rise in deaths directly due to hypothermia in the March quarter of 1979. There were 153 deaths during the

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same period in 1978, and 292—almost double—in the March quarter of 1979. The "Monitor" comments:
"It is, of course, very likely that the increased number of deaths were due to the very cold winter in 1978–79, particularly in early January 1979."
Apart from the deaths that are directly attributed to hypothermia, lack of warmth contributes to many other deaths. If we examine the figures for deaths over the past 10 years, for example, we find that the death rate for infants aged between four weeks and 12 months is 40 per cent. higher in the period from October to March than in the period from April to September. That means that an average of 550 more babies die in winter than in summer. The same is true for pensioners. The death rate for the over-eighties is 25 per cent. higher in winter than in summer—20,000 more deaths—and there are 25 per cent. more deaths among the over-sixties in winter than in summer.
I do not suggest that lack of warmth is the only factor in those deaths, but it is a contributory factor in a great many of them. Many elderly people are afraid to heat their homes adequately because they are worried about the fuel bills. That was confirmed by a national Citizens Advice Bureau survey in September 1979. It stated that:
"There is evidence that the elderly do not keep warm in winter through fear of incurring high fuel bills."
The Supplementary Benefits Inspectorate estimated that 60 per cent. of pensioners on supplementary benefit underheat their homes.
The high cost of fuel aggravates another problem—that of condensation, particularly in council flats. It is an increasing worry for many councils. Many people have had the unpleasant experience of going into council flats and smelling the dampness and seeing the fungus and black mould growing on the walls, and the contamination of carpets and cloths. Usually, the problem occurs in bedrooms because tenants cannot afford to heat them. The advice that they are always given is no doubt technically excellent. They are told to put on the heating and to open the windows. That is totally unrealistic advice for a substantial number of council tenants. One might as well tell them to burn pound notes to keep warm.
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The problem of condensation ruins the quality of life for a great many people, especially for children who are forced to live and sleep in homes whose walls are wringing wet. It also has an impact on the condition of the housing stock in many council estates.
The motion refers to the growing number of disconnections. The December 1979 electricity disconnections were 21,145—the highest since December 1976. The annual rolling figure in December was 88,846, the highest since June 1978. I accept that the rate of disconnection appears to be low—namely, 0·5 per cent.—but one consumer in every 200 is cut off at some period during the year.
I am told that we should not get so excited about disconnections, as consumers are disconnected for comparatively short periods. Those of us who have taken some interest in the problem have had considerable difficulty in obtaining the figures. The information that is now available indicates that in 1978–79 no fewer than 16,370 electricity consumers were cut off for one month or more. That is about one-fifth of all disconnections.
The figures vary much from region to region. The North-Eastern electricity board area is the worst, where 30 per cent. of disconnections were for longer than one month. The Yorkshire board is the next worst, with 29 per cent., while South Wales comes third, with 25 per cent. It may be said that the code of practice should take account of these problems. The code was introduced as a result of unacceptably high rates of disconnection. It slowed down the rate and eased the problem for a period. However, I suggest that it is no real solution for those who cannot afford to pay for their heating.
The code was very much a public relations exercise rather than real help for those in need. That is demonstrated by the number who were allegedly protected by the code who have found themselves disconnected. The national Citizens Advice Bureau survey indicated that 45 per cent of surveyed clients who were disconnected were on supplementary benefit, family income supplement, or unemployment benefit. The survey showed that 66 per cent. of them had dependent

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children and that one-quarter of these were single-parent families. That is evidence that the code is clearly failing to help many of those whom it was designed to protect.
In many instances, consumers who are covered by the code have found that they cannot maintain the weekly payments that are required from them by the fuel boards. In 1979, in the South-Eastern board area, 38 per cent. of disconnections were in the homes of those covered by the code of practice who were unable to maintain their weekly payments. In the London electricity board area, in 1978–79 that applied to 44 per cent. of disconnections. If that is reflected nationally, it means that about 35,000 of the 88,000 disconnections were clear hardship cases, which the code of practice was designed to protect.
That indicates that in many instances the repayments expected of consumers were far too high. All of us who have had experience of these problems know only too well of cases where the Department of Health and Social Security has said that the weekly repayment demanded by the fuel board is too high for the client to suffer when account is taken of the benefit that he is receiving. The result is that those in hardship are forced either to become disconnected or to continue to be disconnected.
One of the difficulties lies in the interpretation of the code of practice. The deputy chairman of the Electricity Council in a letter to the director of the Child Poverty Action Group on 14 December 1979, stated:
"although there is one code of practice there are 12 area boards which all have many districts, and the day to day interpretation of the code in respect of individual cases is carried out a long way from me."
We find that the ground rules vary very much from one district to another. It is difficult for those who seek to advise consumers who are in difficulty, because they often find themselves on shifting ground and do not know what the policy of the board will turn out to be.
There is also ample evidence of a profound lack of public knowledge of the code. Research sponsored by the Electricity Consumers' Council indicated that only 30 per cent of consumers had ever heard of the code. Of those, only one
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in five had read the leaflet. Those practical criticisms underline the importance of the independent review of the code that is being sponsored by the industries and by consumer councils. The review was announced by the then Under-Secretary of State for Energy as long ago as 1 August 1978. It was confirmed in a written answer on 13 December 1978, when the then Under-Secretary of State said that the review
"will start shortly",
and added:
"The aim is to complete it in as short a time as possible"—[Official Report, 13 December 1978; Vol 960, c. 199.]
I hope that when the Minister replies to the debate he will tell us what has been delaying the review of the code, and when the results are expected.
It is difficult for many hon. Members to understand the impact of disconnection on ordinary people. They are deprived of heat, light and often cooking facilities. They lose all the facilities of modern living that most of us take for granted. They are condemned to exist by using candles, paraffin and calor gas, and the dangers are obvious. There have been instances in various areas of deaths through fires that resulted directly from the fact that those concerned had been disconnected and were using those fuels. That applies especially to electricity disconnections.
The punishment of disconnection is far worse than any fine could ever be. It is far worse than a suspended prison sentence. However, the victim has no right to have his side of the case heard. He has no right of access to a lawyer. He has no right of appeal against the decision. That decision is often taken in secret by a fairly low-level official, who takes no account of the rules of evidence or natural justice. Worst of all, the disconnection can be carried out in the absence of the accused person. It is a barbaric punishment which is much more akin to Dickensian debtors' prisons than to a twentieth century caring society.
What are the alternatives? It is argued by many that debts should be collected through the courts in the same way as other debts. The Electricity Council claims that that would cost between £45 million and £65 million. It has produced no details to indicate how those figures

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are arrived at. The South-Eastern electricity board prepared calculations for its electricity consumers' council in July 1978. It stated that using the courts would cost it up to £500,000. That would mean a national figure of about £6 million. The National Consumer Council produced a detailed calculation which suggested that collecting debts through the courts would cost the industry nationally about £12 million.
If that is set against the £2,200 million of domestic electricity sales, we find that the highest estimate of the cost of using the courts is that it would add about 3 per cent. to domestic electricity costs. The lowest estimate is about 0·3 per cent. It is not surprising that a number of bodies, including the National Consumer Council, the national Citizens Advice Bureau and even the Department of Energy's ministerial inquiry have all come out against allowing the fuel boards to retain the arbitrary right of disconnection.
In April 1976 the Select Committee on nationalised industries stated:
"The hardships of disconnections are such that if the incidence cannot be very considerably reduced we believe that the powers of the electricity and gas authorities may need to be circumscribed."
That is equally true today.
The motion also refers to conservation. The programme that the Government inherited was inadequate, but it has now been cut to ribbons. We hear that in September 1979 the Department of Energy scrapped plans for 14 regional home energy saving advice centres which would have advised householders on all aspects of conservation in the home. The cost would have been about £500,000. We hear that in January 1980 the Department of the Environment produced a consultation document on higher thermal insulation standards for new homes which, sadly, included a standard for loft insulation lower that that recommended by the Department of Energy.
We find that the worst cuts are in the Government's own direct insulation programme. There were useful schemes being undertaken by the Manpower Services Commission to provide insulation for the homes of the elderly under the special temporary employment programme, but the budget was halved in 1979 and many of the programmes have been scrapped.
862
I accept that Ministers have indicated that they will urgently be reviewing the possibility of restarting the scheme, but it would have been very much better if it had not been closed down in the first place.
The Government are most vulnerable when it comes to the scandal of home insulation. The allocation for local authorities for home insulation in 1978–79 provided for about 250,000 homes to be insulated at a cost of £12½ million. In 1979–80 the figures rose to about 500,000 homes at £25 million. However, in 1980–81 there is no separate allocation for local authority home insulation. It is merely included in the block housing investment allocation for local authorities. That allocation has been cut substantially, and local councils are having to close down their home loan schemes and stop improvement programmes and new building. It is therefore unlikely that insulation will be a high priority in their budgets.
Under the Homes Insulation Act, grants for loft insulation have been made available to council and housing association tenants, in addition to owner-occupiers. That means that a larger number of households are eligible, but the cash provided under the scheme has been cut. In 1979–80 it was £25 million, which would insulate about 500,000 homes. For the current year the figure has been cut by half. It is now £12½ million, which is sufficient for only about 250,000 homes.
The scope for energy saving through loft insulation is gigantic. On the Government's estimates of the number of dwellings with acceptable loft insulation, only 12 per cent. of local authority homes, 28 per cent. of owner-occupied homes and 11 per cent. of housing association and private rented homes have acceptable standards.
The industry is already saying that the cutback has caused it considerable difficulty. Eurisol-UK, the Association of British Manufacturers of Mineral Insulating Fibres, warned this year that the cutback would cause considerable difficulties. It says that its worst fears have been realised. Member companies have declared redundancies of between 10 and 20 per cent.
The insulating industry was encouraged by successive Governments to put down

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new productive capacity to meet the growing demand for insulation. It has invested over £80 million in the past two years to combat the problem last year of a shortage of loft insulation material, when the extension of local authority schemes increased the market by 25 per cent. The industry now finds that the local authority market this year will be almost non-existent. It feels that the homes insulation scheme cannot fill the gap because the available cash has been halved, although the potential take-up has been extended.
The industry believes that demand for its products will be cut back by 25 per cent.—the percentage by which it was expanded last year. As the trade association says in its letter to hon. Members:
"No industry can cope sensibly with the effects of switching on and off this kind of percentage of its total market."
That is one of the most frightening indictments of the Government's insulation policy.
That comment was confirmed by an article in the New Scientist on 27 March, which quoted from an apparently secret memorandum from a senior official in the Department of Energy to the Secretary of State. Having surveyed the various departures from the Government's original conservation policy, the memorandum sums it up:
"All this represents a sharp and visible contraction of the government's conservation programme and is, I fear, likely to attract increasingly adverse criticism."
The memorandum goes on to say that, in comparison with other countries" energy saving programmes, Britain's is now slipping fast.
It is hard to understand why, in a period of public sector cuts, the Department of Energy does not seem able to persuade its colleagues in the Government that money spent on conservation and insulation is not money down the drain, but is investment in the future that will produce savings of precious money and the conservation of even more precious energy. It should be protected from public sector cuts.
The Government appear to be relying on pricing policy as their main tool for conservation. Pricing has a role to play, but its impact on many consumers is serious and many simply cannot react
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to higher prices. Those locked into inefficient and expensive local authority heating systems have no way in which to find alternative heating. The Secretary of State has accepted that pricing is not enough. In a speech to the RIBA in October 1979 he said
"To rely totally on the price mechanism and people's response to it, without sensible and sensitive Government intervention, would be an unbalanced energy conservation programme."
The Government's limited intervention is neither sensible nor particularly sensitive.
I deal finally with fuel assistance schemes. The Secretary of State for Social Services, on 27 March, referred to the scheme that the Government had launched to provide help for the needy with their fuel bills. He claimed that the scheme was absorbing £200 million of Government spending, which looks like a large figure, but closer examination shows that it is less impressive. The normal heating additions under supplementary benefit account for £100 million of that spending, the extra schemes introduced last winter account for £20 million more and normal uprating would have added a further £20 million. The new money available, as set out in the Government's most recent statement, is only £65 million. About £9 million of that is in relation to the extension for the 70 to 74-year-olds, and £56 million as a result of the large increase in heating additions.
The scheme is welcome, but of 460,000 70 to 74-year-olds on supplementary benefit, only 122,000 have no heating addition. The remainder receive heating additions now, and will get no extra help. Providing the automatic heating addition for supplementary benefit families with children under 5 years old will cause difficulties. The Social Security (No. 2) Bill provides that from 24 November there will be a single rate of benefit of £7.30 for children up to the age of 10. When the youngest child, in a supplementary benefit family-, passes, the, age of 5, there will be an automatic reduction of £1.40 in the family's benefit.
What about pensioners under 70? What about those not on supplementary benefit; for example, those on rent and rate rebate? Do they not feel the cold? What about the estimated 900,000 believed to qualify for supplementary benefit who never claim it?. What about

865
those with small occupational pensions that take them just above supplementary benefit, level? They may have exactly the same cash, income as the family next-door on supplementary benefit, but they can claim no extra help with their heating bills.
The Government scheme falls far short of what is needed. I hope that the Minister will not tell us that cash is not available for extra help. Many of my constituents will not understand why hundreds of thousands of needy people should be sentenced to shiver when the gas industry is expected to make a profit of £600 million this year.
Ideas for practical schemes exist. In its 1977 report the Supplementary Benefits Commission called for a comprehensive fuel rebate or bonus scheme. That call was repeated in its 1978 report, published in October 1979, which said:
"Fuel costs have risen dramatically since 1973 and are likely to go on rising in real terms till the end of the century … a confusion, of benefits has grown up to help poorer households … we have argued that these arrangements should be replaced by a single, comprehensive scheme of fuel rebates or bonuses".
The Commission believes that that would be fairer, easier to understand, more acceptable to the public and less likely than present arrangements to deter people from returning to work. Other suggestions have been made. The Electricity Consumers' Council contributed ideas on how such a scheme could work. Such schemes are worthy of serious debate.
When I have raised these problems with Ministers, of both Administrations, I have usually been told that the problem of fuel poverty—the fact that a great many people cannot afford adequate warmth in their homes—is new. However, it has been with us for five years and is not likely to go away. There are no, ideal solutions, but we should argue for an end' to arbitrary disconnections. We want an imaginative insulation and conservation programme and genuine help for all the needy, not merely selected groups.
I believe that we cannot go on jacking up fuel prices every few months and finding a few bits of sticking plaster to bandage up the casualties. I put down this motion in the hope that the House would give the matter serious consideration, which is long overdue.
4.40 pm
Mr. T. H. H. Skeet: The hon. Member for Woolwich, East (Mr. Cartwright) is to be congratulated on raising this matter today. Obviously it is a subject which should be ventilated in the House. I wish to take up two points that he mentioned.
The first concerns disconnections. It is difficult for any of the nationalised corporations to get some of their bills paid. They would like to collect debts by way of the county court, but unfortunately the best course is to disconnect the supply if a person is not prepared to pay over a period. If a person has not paid over a number of months or years the corporations have no alternative. However, I suggest that the hon. Member should tell his constituents to go along to him, as a sympathetic Member of Parliament, and raise these matters so that he can take them up with the local electricity authority which will exercise discretion and compassion in such cases. I have done this with a great deal of success in Bedford.
Another matter that I wish to pursue is that of conservation and home insulation. One of the big difficulties about having grants—and this was the experience in the United States when grants were used in a big way—is that the grant gets annexed to the price, and the price of insulation accordingly rises. That is not necessarily to the benefit of the consumer. On the other hand, if the product is good and it provides an incentive to the consumer in that his bill will be reduced substantially, he will put the money aside or borrow it in order to insulate his property. In other words, a good product will sell itself.
The hon. Member for Woolwich, East mentioned Eurisol-UK. In this case a grant of £25 million was available but only about £12·5 million was taken up. Therefore, the market did not really require it or the public had not been educated to use it. The company built a new plant which has considerable unused capacity. The hon. Member mentioned a figure of £80 million, and he told the House that, when a building was put up and assurances had been given, there was a moral obligation for a grant to follow. I do not accept that at all. It is entirely up to the market and the board of directors. If they go ahead with a speculative

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process hoping to make a bonanza, they may well do so, but if their judgment is wrong difficulties can follow.
I listened to the hon. Members' speech with considerable interest, but I found it defective in this way. Although he went into the end results, he did not examine some of the causes and it is the causes with which I am concerned. I can do no better than to begin with one or two of the axioms of the fuel business. One is that the nation cannot have cheap electricity on expensive coal. If the public are concerned about exaggerating the implications of nuclear power, high electricity costs for consumers will prove inevitable.
The miners have already indicated today in The Times that they want £10,000 a year. Also, the electricity industry is concerned about the recent increase in coal prices. Perhaps I can use this formula to illustrate the burdens that the electricity industry must take account of in its fuel supply and in the wages and salaries paid. A 3 per cent. increase in coal prices means 1 per cent. on electricity prices, and 6 per cent. on miners' wages means 1 per cent. on electricity prices. Therefore, it is no good complaining about the electricity industry pushing up its prices; one must go back a step further and find the basic cause. Mr. McGahey calls for very much higher wages—and the miners deserve every penny they get, although I do not accept that the same should apply to those who work on the surface—but that is one way of ensuring that the public will have to pay more.
Another axiom of the fuel industry is that coal prices are not immune to market forces but tend to align themselves closely to oil prices. There was a wide price differential between coal and oil in 1973 in favour of coal, but that had virtually disappeared by the end of the decade as coal moved forward to close the gap. I must stress that every NUM wage demand increases the price of coal to the consumer. It is not the miner who pays but the consumer, whether he burns his coal in his grate or uses it in the form of electricity.
I turn to the question of oil. OPEC sets the world oil price and it is not possible for the United Kingdom to be insu-
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lated against economic realities. The EEC competition rules say that indigenous oil cannot be sold on the local market at preferential rates which are not made available to other members of the Community. I stress that, although the hon. Member for Woolwich East, complains about the increase in fuel prices, all the industries involved, with the exception of oil, are run by State corporations. Over the course of the years the exact results have been forecast. Those industries tend not to be competitive in the market place and they tend to push up their prices.
I turn now to the subject of gas. British gas prices for domestic consumers are the cheapest in Western Europe. They were bound to rise in order to prevent extravagant use of the product and to enable the distributor—the British Gas Corporation—to meet the higher North Sea prices based on oil-gas parity ratings. The industry is faced with insatiable demand and it has inadequate supplies. The position would have been different if, in the past, the British Gas Corporation had paid a reasonable price for gas rather than deterring companies from either looking for it or working what they had already discovered.
This is a question of supply, not merely of demand. In 1979 the United Kingdom flared about 14 per cent. of the total available. About 38 billion cubic metres of gas was disposed of by the British Gas Corporation. The gas flared totalled about 6·6 billion cubic metres. People may say that it is quite wrong to let this occur, but unless one builds a pipeline and that pipeline is economic, there is no alternative. I emphasise that the construction of the projected North Sea natural gas pipline is essential to bring in to the system anything between 12 and 20 trillion cubic feet of natural gas. This should be accompanied by the modification of the British Gas Corporation's monopoly which was established under the 1972 and 1976 Acts, in order to permit private initiatives, and freedom should be given to decontrol the chemical feedstock supplies. At present, permission of the British Gas Corporation must be given in certain cases.
I admit that the recent price increases were severe and many people throughout the country suffered. I agree with the hon. Member for Woolwich, East that people over 80 years of age who are not

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on national insurance should receive a fuel allowance. They should not have to indicate to their local departments whether they have earnings in order to qualify. They have a right to reasonable warmth.
When the Secretary of State made his statement on gas price increases in the middle of January, four elements should have accompanied it—the increase in gas prices, the provision to be made for the disadvantaged, including old-age pensioners, the investment provision by the British Gas Corporation, and a windfall profits tax.
It is instructive to see how those announcements appeared. In mid-January came the initial statement of the notification of the price rise. Provision for the disadvantaged was not indicated to the House until my right hon. Friend the Secretary of State for Social Services made a statement on 27 March. The investment provision by the BGC has not been adequately canvassed in any parliamentary questions, though it has been referred to in the Financial Times on 14 January, 11 March and 10 May.
On the important question of a windfall profits tax, in answer to a question that I tabled, my right hon. and learned Friend the Chancellor of the Exchequer indicated through one of his Treasury Ministers that he was looking into that matter. I tabled another question three weeks ago but received the answer only today stating that the Government had accepted that point in principle. The overall result has been that an essential move has been stymied to a certain extent by the fact that the separate provisions were announced at different times.
One of the facts of economic life is that the price of natural gas in the market is related to the oil price. The distinguished chairman of the BGC, who should know a lot about this subject, wrote on 2 August last year:
"In the industrial sector most of our firm gas supplies are sold on individually negotiated contracts at prices related to the price of the nearest alternative premium fuel, which is usually gas oil. At the present time this product is being sold to industry in the UK at net prices in excess of 28p per therm. Interruptable gas is sold into non-premium uses and the price is related to the price of heavy fuel oil which is currently just below 20p per therm."
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I must stress that that fact is acceptable to OPEC and is becoming progressively more acceptable internationally. In fact, it was stated at the time when the Labour Party would have accepted the point that all nationalised corporations must charge economic prices. Private companies have also endorsed that view.
BP has used the oil-related price for the disposal of ULA Norwegian gas to Gelsenberg AG of the Federal Republic of Germany. We have become used to the fact that oil and gas are increasingly being priced at a parity rating.
In the United Kingdom the domestic price of gas for a London semi-detached three-bedroomed house with central heating works out at about 23p per therm. The gas oil price for a 500 gallon delivery works out at 39·5p per therm, or 65·1p per gallon. Thus the domestic price of 23p is about 58 per cent. of the prevailing gas oil price. The differential between those prices is unduly large and is likely to close, with gas maintaining a distinctly competitive advantage.
The Government are right to do what they are doing. Their action would have to be advocated by a Labour Government if they were in power. It was the policy of the previous Labour Government.
On the industrial front, new firm contract prices—I stress that they are limited in number—are between 37p and 40·5p per therm, bearing a much closer relationship to the nearest equivalent fuel—a tanker load of gas oil approximates at 38·9p per therm. For interruptable contracts linked to the heavy fuel oil price, 22·5p per therm compares with 29·2p per therm, or 47·87p per gallon for oil products.
It is significant that, while industry has been called upon to bear a heavy burden and take on an oil-related price for gas, that has not been the case with the domestic consumer. The Government are ensuring, as would any Government in a situation of tight supply, that the burden is spread more evenly between industry and domestic consumers. Industry is important because it provides the jobs.
The British Ceramic Manufacturers Federation wrote recently:
"Evidence that our competitors in Continental Europe enjoy and benefit from prices as

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much as 8p/therm less than those imposed by the Gas Council monopoly in the UK must argue for an urgent review of Government policy in this area."
Cannot we see that if Continental gas prices for manufacturers are very much lower than those in the United Kingdom it will result in our industry growing less competitive and its position becoming more difficult? However, if some of the burden is shared with those in the domestic market, a much better response will be secured. Those who are disadvantaged can be assisted by my right hon. Friend the Secretary of State for Social Services who looks after the old and the infirm.
Over the years we have noticed a decline in the real price of gas. Many of those who complain to me say how badly they are doing in respect of the gas appliances that they have bought, but when I compare them with my appliance, which is not gas, I see that those people are living in a dream world and are doing remarkably well.
During the years 1970–79, taking the index base in 1970 as 100, the gas price has been deflated by the retail price index to a figure of about 69. In real terms, domestic consumers are paying less for their gas now than they did in 1970. Even if we add the recent price increases announced by the Secretary of State for April and October, the figure will rise to only 75.
That figure has been regressive. The indexed figures from 1970 to October 1979 indicate that under both Conservative and Labour Governments the real cost has been coming down and the domestic consumer has been receiving an ever better deal. That situation must be rectified. Starting with 100 in 1970, the successive annual figures have been 100, 98, 91, 82, 76, 80, 81, 77 and 69. Recent increases restore that figure to 75. There will be an obvious desire to perpetuate the advantage that gas consumers have enjoyed, but as gas is currently oversold that situation is not likely to occur.
For years, Britsh gas has traditionally been the cheapest in Europe, being marginally below even that in Rotterdam. The European range for domestic consumers of 1,200 therms a year, according to January 1978 figures, is 43p a therm in Copenhagen, 33·5p in Düsseldorf and
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17·3p in London. The British price is not subject to VAT. VAT works out at 17·6 per cent. in France, 13 per cent. in the Federal Republic of Germany and 18 per cent. for the Netherlands. Those figures are for 1979.
I am convinced that if the British Gas Corporation had paid a reasonable price in earlier days, when the House passed the Continental Shelf Act 1964, more gas would have been located in the southern sector of the North Sea and companies would have utilised the resources available to them. This has not been the case. The price paid to companies has risen from the old figure of £l·87p per therm to about 6p now for the southern fields. Frigg gas is purchased now for about 12½p a therm, athough I understand that the price currently on offer for other supplies will exceed 20p.
The hon. Member for Woolwich, East is right to outline the consequences that we face in the House. The hon. Gentleman tries to portray people in this country as being fed up with increased oil, gas and coal prices. That may be the effect, but the hon. Gentleman should examine the causes.
Coal prices depend on the miners and the Government's programme for capital investment. If the public want more coal mined through methods that have been laid down—by expensive schemes—they must be prepared to pay a higher price for the coal. The electricity industry depends on coal. Seventy per cent. of the fuel used by the CEGB in its power stations is coal. The price of electricity, therefore, depends on the price of coal.
OPEC decides how high the oil price is pitched. If the price is pitched high, we have to face reality. The only way out of the impasse, over the years, is for Britain to act as wisely as France and switch much more to nuclear power. Then prices would not rise as steeply as in recent years. I hope that the picture presented by the hon. Member for Woolwich, East will be corrected by other hon. Members. I hope that they will deal with cause and effect and not try to hoodwink the public.
I hope that Opposition Members will not say that if they had the opportunity of governing prices would come down at a stroke. That is not possible. Their

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approach was to say that economic pricing was essential in order to look after the nationalised industries. This Government cannot be blamed if they pursue exactly the same policy.
5.3 pm
Mr. David Winnick: I listened with great interest to the hon. Member for Bedford (Mr. Skeet), who specialises in energy matters. I congratulate my hon. Friend the Member for Woolwich, East (Mr. Cartwright) on choosing this topic for debate. I agree with his comments on home insulation, and disconnections—they are all valid points. I intend to concentrate my remarks on the last part of the motion.
I welcome the additional help that people on supplementary benefit and family income supplement will receive from November to help pay their fuel bills. However, a large number of people on limited incomes who are not in receipt of supplementary benefit or FIS will not receive an extra penny to help pay the bills. The Secretary of State for Social Services announced that only one group would receive additional help. That group consists of pensioners, aged 70 and over, receiving supplementary benefit who, like pensioners over 75 years of age, will receive an additional heating increase that comes into effect in November. My hon. Friend the Member for Woolwich, East made the point that a sizeable number of pensioners on supplementary benefit will already have been receiving the heating addition and, although they will receive a little more, it must be stated that the Government have not made much of a concession towards fuel poverty in the United Kingdom.
The increases in electricity prices have been staggering. From the beginning of 1974 to the end of the current year electricity prices will have gone up by about 240 per cent. That is far in excess of price rises generally or increases in pensions and supplementary benefits. The hon. Member for Bedford argued that Opposition Members should not give the impression that if we were in office we could stop large increases. I have to concede that a substantial increase in electricity prices took place under a Labour Government for reasons that the hon. Member for Bedford described.
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Gas prices are more the responsibility of the present Government. I do not know whether a Labour Administration would have acted differently, but this year gas is to go up in price by about 30 per cent. and will rise by 10 per cent. above the inflation rate at least in 1981 and 1982. One can imagine the hardship that will be caused to people who were previously safeguarded because they were not using electricity. They now find this sharp and substantial increase in gas prices. It is understandable that many people should be puzzled that electricity is apparently to go up in price because of falling demand while gas is to go up in order to ensure that it is not used to excess and for reasons of conservation.
I do not want to argue the rights and wrongs of substantial increases in fuel prices. The hon. Member for Bedford may be right in stating that there is no alternative to substantial increases in gas and electricity prices. If, however, such increases are to occur, real and effective help must be given to those in the community who cannot afford to pay.
As some hon. Members know, I proposed recently a Ten-Minute Bill to provide fuel rebates for people on low incomes. As a result of my efforts to bring about such legislation, I received a number of letters. I would appreciate the patience of the House in order to quote from one or two letters, mainly from elderly people. One lady living in East Yorkshire wrote:
"I could weep when the cold weather comes because I feel it so intensely. Last year, we did have a little help but this year we have been obliged to put off the heat, because of the cost, very frequently. We do not claim supplementary pension, although we have very little in the bank. But, please, a little help is very much appreciated as we found out last year."
A second letter stated:
"I am a widow. My net income from the State pension and a small pension from my late husband's office is £31·27 per week. Because of my late husband's pension, I cannot get supplementary benefit. The only help I get is a rate rebate. So the Government must help us with fuel bills. Good luck and success to your campaign."
The final letter I shall read came from someone in a neighbouring constituency. It states:
"My husband must be one of thousands of men who are in receipt of a tiny, now index-linked company pension which means that apart from a small rate rebate we cannot apply

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for any of the supplementary grants which are already available—degrading prospect anyway when we have never applied to the State for assistance."
The person who wrote that letter said that she had received a leaflet from the Department of Energy explaining various ways of paying her fuel bills. She writes:
"I know how to pay the bills, Mr. Winnick, it is the lack of the means to pay them that gives me nightmares."
That is a fair and valid point.
Ever since fuel prices rose substantially—particularly the price of electricity—I have argued that a comprehensive fuel allowance or rebate scheme should be introduced to help people on limited incomes. If it is right—there is no longer any controversy about the matter—to have rebates for rents and rates and assistance for rents in the private sector by way of a rent allowance, surely it is equally right to have fuel rebates or allowances for people on limited incomes.
Fuel is vital and if there are people in any controversy about the matter—to the community—I know that there are many—who are not on supplementary benefit and do not receive family income supplement and who cannot afford to pay staggering increases in the prices of electricity and gas, they need effective help and it is our duty and responsibility as Members of Parliament to see that they receive it.
Clearly it would be foolish at this stage to harbour any illusions that the Government intend this year to provide the sort of assistance in this area that so many of us would like to see provided. However, the next logical step for the Government, if they are serious about wanting to help people in need, is to ensure that those already receiving rebates on rates and rent and receiving rent allowances should be eligible for assistance to pay their fuel bills.
The Labour Government's electricity discount scheme was harshly criticised by the Conservatives. However, it provided help for many people, particularly, in its second year, to those receiving rebates. This Government can criticise the last Administration's discount scheme because certain aspects justified criticism, but instead of abolishing it they should have built it up.
This problem clearly will not go away. I was interested to see a copy of a letter
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sent to the Secretary of State for Social Services. Another copy has apparently been sent to the Secretary of State for Energy. It is from the three chairmen of the nationalised energy industry consumers' councils. Their letter, dated 3 April, was written as a result of the announcement by the Secretary of State for Social Services on 27 March. It reads:
"In your statement on 22 October 1979, you indicated that you would continue to keep under review the range of help available to assist poor consumers with their fuel bills. We hope that this review is continuing and is a long-term one. We would be interested to know whether this is the case, since we feel that the package of fuel bill assistance announced last week still falls a long way short of the comprehensive fuel allowance scheme for which we have been asking. The limited categories that are eligible for the help you have announced will certainly be better off as a result of the statement you have made."
But they make this important point:
"However, there will be many elderly people and families with children who will not qualify and who will be left—literally—out in the cold."
That letter sums up the situation as well as any speech in this House could do.
When there is a clear case of injustice, this House tends to put sufficient pressure on the Government of the day to ensure that that injustice is removed. At the moment there is a clear case of injustice. The hon. Member for Bedford argued the case for substantial increases in fuel prices. When the Minister replies, I am sure that he will tell us that there was no alternative to those increases. However, the injustice remains. The Government have not yet provided the assistance necessary to make sure that those who cannot afford to pay these increases are helped. I hope that there will be sufficient pressure from both sides of the House to see that this injustice is cleared up as soon as possible.
5.15 pm
Mr. Jocelyn Cadbury: I am grateful to the hon. Member for Woolwich, East (Mr. Cartwright) for initiating a debate on this important topic. I agreed with many of his points. It is most unpleasant to have one's electricity cut off. Many of my constituents who live in blocks of flats would agree with the hon. Member that nothing is more infuriating than being told to turn on one's heating and open one's windows. I get letters about that.

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The motion, however, is concerned with two different objectives. It calls on the Government to end wasteful energy consumption. Secondly, it calls on the Government to ensure that every household can afford adequate warmth. Those are admirable objectives, but there is a certain contradiction in them. The central issue in this debate is how to solve that contradiction. We certainly shall not solve it by artificially holding down energy prices. If the costs were held down below the true market level, that might achieve the second objective in the very short term. However, it would guarantee the absolute failure of the first aim of an energy efficient economy.
A policy of subsidising energy is bound to work against effective energy conservation. We must allow energy prices to rise so that they reflect the true cost of energy as a scarce resource. But we must devise social policies to insulate the most vulnerable sections of the community from effects of the high costs of fuel. That is the path that the Government have already embarked upon with considerable courage and I support what they are doing.
I wish to comment on the relationship between the demand for energy and its price and then to refute some of the criticisms made of specific aspects of the Government's energy policy. Those of us on both sides who argue that market forces should be allowed to determine the cost of energy must demonstrate that the demand for it is strongly influenced by cost. We must demonstrate that demand is elastic. There is a great deal of evidence for that. Recent studies have shown that in the years up to 1973, when the price of energy was falling in real terms, energy consumption in the Western industrialised countries tended to rise in line with or ahead of the growth in gross domestic product.
However, after 1973, when the Arabs dramatically raised the price of oil, the relationship changed. Once those Western countries had recovered from the shock of 1973, their economies began to grow, but their consumption of energy no longer kept pace. There was a significant reduction in the use of energy per unit of GDP. Surely that is the outcome one would have expected. Energy is no different from any other resource. If the price mechanism is allowed to operate it
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will send out signals to the consumer and the supplier. It will tell managers to look for less wasteful industrial processes, and it will motivate householders to insulate their homes.
Those arguments are not just the propositions of the Friedmanites. It is significant that Mr. Michael Posner, a former adviser to Labour Governments, favoured the Conservative Government's decision to raise gas prices. He wrote a letter to the Financial Times this year saying:
"The risks of preparing for too high an energy price in the next decade are much less than the risks incurred by hoping—mistakenly—that somehow energy will become cheap again.
On this basis the domestic gas price has become markedly out of line."
That is the view of a former adviser to the Labour Government.
It must have been a temptation, when the Government first came to office, to subsidise British industry by holding down the price of North Sea oil and gas. On the surface that was an attractive idea. After all, we are struggling to sell our exports and we are at the same time suffering high prices because of the high value of the pound. We face the problem of achieving our basic objective, namely, the control of inflation, and subsidies would have been an attractive option.
The Government were, and are, right not to give way to that temptation. The shortage of energy is a world-wide phenomenon that will get worse. We must remember not only the extreme vulnerability of the West's overseas oil supplies and the chaos that would ensue if there were a left-wing coup in Saudi Arabia, but the enormous increase in the consumption of energy by the developing countries.
We should realise that when India and China take off economically there will be a dramatic increase in their demand for energy. We cannot expect the people of Asia to rely on burning cow dung for ever. We would be arrogant to assume that they should. Therefore, we have to allow market forces in this country to condition consumers of energy to its true value.
If Britain's brief period of self-sufficiency in energy is used to hold down fuel

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prices we shall be left, in 20 years' time, with British industry totally ill equipped for an energy-hungry world. Neither industry nor domestic energy consumers can adapt overnight. We must make use of the next 10 to 20 years to transform Britain into an energy-efficient economy and the price mechanism must be the prime mover in that transformation.
In some respects Government policy has been wrongly criticised. The principal arguments for the proposed increase in the price of gas have been well rehearsed in the House. My hon. Friend the Member for Bedford (Mr. Skeet) has underlined them. I wish to emphasise one reason why it is necessary to raise the price of gas by more than the general rate of inflation over the next three years.
Governments in the past have seen a differential opening up between the domestic and the industrial market. In the first quarter of 1979 industrial customers were paying 27p per therm for firm supplies of gas while domestic consumers were paying only 19p per therm. The subsidising of domestic gas consumers by industry has exacerbated the stampede by householders to convert to gas heating and gas appliances. Yet domestic consumers are much more expensive to supply than industry.
Whereas industrial demand for gas is relatively constant throughout the year, demand in the domestic market—because variations in the weather create greater fluctuations in demand—means that it is necessary to instal expensive storage systems.
By contrast, not only are industrialists paying oil-related prices for gas. There are 4,000 potential industrial customers who cannot get gas supplies at all. Many of those potential customers are not within 25 yards of a gas main. Therefore, the prospect of their premises being connected to the gas supply is bleak. Furthermore, many of the companies using gas are on interruptable supply contracts. In the extremely cold winter of 1978–79 they were subject to serious interruptions. That was highly damaging because the substitute for gas is liquefied petroleum gas which is expensive and difficult to obtain.
It is nonsensical that industry should not only be subsidising the domestic mar-
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ket but that in so doing it should be depriving itself of the gas that it badly needs. The Government's decision to raise the price of domestic gas over the next three years will go a long way to eliminating that absurdity.
There is a way of preventing this situation from occurring again. We must break the monopoly of the British Gas Corporation both as a purchaser and a distributor of gas. If private companies were allowed to compete with the British Gas Corporation for North Sea gas and if they were permitted to distribute it the price to the consumer would be determined by market forces. That would remove from future Governments the embarrassment of having to intervene. I ask my right hon. and learned Friends in the Government to look seriously at that option.
There has been some criticism of the Government's conservation policies. The hon. Member for Woolwich, East maintained that, apart from using their pricing policy, the Government were not doing sufficient to promote conservation. I believe that the Government have made strides in the right direction. First, they have maintained the level of grant to local authorities for insulation at last year's take-up point, which was £12½ million. Therefore, it is not true to say that the Government have cut the grant. The Government have also increased spending on information to educate the public about conservation.
That spending has been increased from £2·2 million to £3·2 million. That is important. If people know that the opportunities are there to enable them to insulate their houses, they are more likely to do something about it. Pensioners on supplementary benefit will now receive a 90 per cent. grant for home insulation. I believe that the Government are moving in the right direction, though I would like to see more being done.
I think that the nationalised industries should be encouraged to sell the idea of conservation. For example, the British Gas Corporation has the expertise to carry out energy audits in the homes of its customers. Its staff could visit the homes of consumers, carry out audits and make recommendations as to how the consumer could best use gas appliances and reduce heat loss.

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I believe that building regulations for new houses must be modified in order to incorporate the highest insulation standards. It is absurd to build houses which will leak like sieves. We must change that.
I began by saying that two apparently conflicting objectives were expressed in this motion. How can we achieve the second objective, which is to ensure that every household enjoys adequate warmth? I am certain that the most wasteful method of assisting those hardest hit by high fuel prices is to hold prices down.
If fuel prices are subsidised, the people who will gain most are the better off because they use most energy. We must ration the nation as a whole by price and at the same time implement social policies that will help those who are hardest hit. The Government's package of assistance to poor domestic consumers does precisely that. It is hardly reasonable to accuse the Government of oppressing the poor by imposing high fuel prices when they have recently introduced a scheme to give help worth £104 million to 2 million people.
The present Conservative Government have beyond doubt done far more in this respect than the last Labour Government whose equivalent scheme was worth £38 million only. Even if that were uprated, to account for inflation, to £50 million, this Government are being more generous. I welcome in particular the extension of the automatic heating addition of £1·40 a week for householders over 70 years of age who are on supplementary benefit. That follows the giving of automatic entitlement last year to pensioners over the age of 75.
The hon. Member for Woolwich, East spoke of disconnections, and I agree with him that this is a most unpleasant phenomenon. We have a duty to try to reduce the number of disconnections. However, it is important to keep a sense of proportion about them. When we investigate electricity disconnections, we discover that the vast majority of them are for periods of a few days only. The number of disconnections which lasted for more than a month—as the hon. Member for Woolwich, East said—during 1978–79 was 16,370.
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If we compare that figure with the total of 18 million domestic consumers, it is not very high. There has been a steady fall in the number of electricity disconnections since 1975–76. In that year the figure was 125,000. While it is true that the figures for 1979–80 show that this downward trend has been reversed, the overall figures are still well below those for 1976. We must reduce the number of disconnections, and the Government's social policy will help us to achieve that.
The two objectives in the motion will not be achieved by sacrificing sound economics in energy pricing in a misguided attempt to protect the public from the reality of the world energy shortage. In 20 years the people will not thank the Government if they allow a cheap fuel policy to leave Britain defenceless in an energy-starved world. The Government are right to allow energy prices to rise, just as they are right to shield the people who are least able to bear the consequences.
5.30 pm
Mr. David Penhaligon: Several hon. Members have referred to the gas price increases. All hon. Members will have been asked about that issue. It is still bubbling in the political forum.
I do not accept the arguments of the hon. Member for Bedford (Mr. Skeet). He pointed out the anomaly between the price of gas and other fuels. He is correct and it needed to be rectified. However, if the Government had announced that the profits from increased gas prices were to be used for a massive scheme of cross-subsidy in fuel, for a subsidy to the disadvantaged or for a massive insulation scheme, I could have better swallowed the hon. Gentleman's arguments.
Mr. Skeet: The Government have declared that they accept in principle a windfall profits tax. The excess money will be paid by the British Gas Corporation into the Consolidated Fund and it will be available for general distribution to help industry and people in need.
Mr. Penhaligon: I hope that the banks are included in the provision, because we should then have even more money to throw in that direction. The Government have put up the price of gas, but

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they have rejected two of the schemes which I have suggested and they have taken the minimum action on the third suggestion.
In spite of the international situation and fuel shortages, the Government probably make more money out of North Sea oil and gas than anything that anybody can think of. The Government are making a "bomb" out of fuel, yet we must tell our constituents that for their long-term benefit they must accept a rise in fuel prices. It is a difficult argument to support and it is not helped by other Government actions in the last few months.
I am not a great enthusiast of a nuclear power economy. The day after the Government announced a reduction in the insulation programme from £25 million to £12 million a year they announced the building of 10 pressurised water reactors at an estimated cost of £10,000 million. Such large figures mean nothing. The £10,000 million represents £500 for every house in our great nation. The insulation programme costs £1 a house. Such a situation is not rational.
If we do not do better at guessing what will be required in the next 20 years than we have done in the last 20 years, I wonder what mess we shall be in the year 2000. In the last 20 years we have installed electrical systems which people cannot control and do not understand. I still meet elderly people who genuinely believe that the only way to control a night storage heater is to open the windows. When constituents sometimes tell me about the size of their electricity bills I scratch my head in disbelief. It is impossible to work out how anybody can spend such large sums on such small properties. I have visited elderly constituents whose main problem is caused because a system has been imposed upon them and they do not understand it. Some of them heat rooms to a level which they would never have dreamt of when they used coal and had control. Vast quantities of their precious money is wasted by the ludicrous system.
Perhaps I am lucky in my region, but usually when a constituent comes to me on the question of being disconnected I contact the local electricity board which deals with the matter reasonably. That does not mean that there are not discon-
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nections because some constituents do not believe that they should have to pay for fuel.
Mr. Cartwright: When I raise cases with the electricity board it deals with them sympathetically. I am worried about the many people who do not understand about bringing cases to their Member of Parliament.
Mr. Penhaligon: That worries me on a whole paraphernalia of subjects. I often wonder how the hundreds of people in difficulty who do not come to us fare.
The age allowances for the over-eighties was introduced in 1971. Do the Government think that the 25p age allowance should be scrapped, or do they agree with me that it should be uprated to a meaningful sum? In 1971 25p might have been useful, but today it is an insult. The simplest way to help the elderly is to uprate the age allowance to a more realistic level and also to give it to the younger elderly.
If we want to help the single parent mother, especially if she works, we must pay child benefit. It was a disaster that the Government, when examining how to save a few pennies to justify tax reductions for the well off, penny pinched on child benefit. It is a tragedy that single parents who often have low incomes because of their family responsibilities should have to pay for tax reductions. I know the Government's view about child benefit, so we must agree to disagree. However, the age allowance could be extended and could make a useful contribution to helping the elderly who are affected by the technology that we have imposed upon them and the price increases on which we are insisting.
I emphasise how much money we are making out of fuel while imposing such agony on the people. Whether it is oil or gas, enormous sums of money are involved. It is only right and proper that people should look to the Government to put some of that money into reducing the impact of fuel bills, even if it is done on the basis of cross-subsidy, for the long-term good and sensible development of energy supplies.
5.41 pm
Mr. Nigel Forman: It is always a pleasure to speak after the hon. Member for Truro (Mr. Penhaligon),

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because I feel that I am listening to the authentic tones of "Poldark". I have had that experience on a number of occasions, and it improves each time.
The House is grateful to the hon. Member for Woolwich, East (Mr. Cart-wright) for introducing this important and wide-ranging motion, which enables us to discuss a number of related aspects, not all of which I intend to touch upon this evening. I wish to concentrate my remarks on two aspects of the motion—namely, the need to end wasteful energy consumption in so far as that is possible, and the need to ensure—again in so far as it is possible—that every household can afford adequate warmth. As my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) said, those are probably the two key aspects of the motion.
Taking energy conservation first, it seems that the motion should lead Ministers to encourage, more energetically than they are at present, better insulation in all of the domestic housing sector. That is one of the most important points, which has been mentioned already by my hon. Friend the Member for Northfield. Similarly, I think that the use of the price mechanism has encouraged and will continue to encourage industry and commerce towards greater efficiency in their energy use. That should not be underestimated as a technique for ensuring greater efficiency and, hence, more conservation.
In considering the transport sector and the impact of the price mechanism there, some figures that I was kindly sent by my hon. Friend the Under-Secretary of State relating to the price of petrol should make interesting reading to the House and should command the necessary conclusions from both sides. Taking 1960 as 100, the figures show the price of petrol in 1980 as 549·4 whereas the retail price index was a little less, at 513·4. If the Government, or any Government, are serious about using the price mechanism in an important and sensitive area such as petrol, the disparity between the rate at which the price of petrol rises in real terms, as compared with the rate at which the retail price index rises, should widen. It is as well for the House and the country to recognise that.
In so far as the motion applies to conservation, it implies more active dis-
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couragrment of electric space heating than the Government have shown themselves willing to give. I remember once hearing Lord Flowers describe electric space heating as tantamount to a crime, and I am inclined to agree with him. I know that it is difficult to tear up investment that is already made, and probably it would be imprudent to do so, but I think that in future firm guidance should be given by the Department of Energy to the fuel industries to discourage electric space heating, because of its energy inefficiency.
Several hon. Members, including my hon. Friend the Member for Northfield, have said that the Government's policy relies on the price mechanism as the main means to bring about conservation. That is obviously right and it has my full support, as I am sure it has the support of my hon. Friends and, secretly, of some Opposition Members. There is a supplementary role for regulation, mandatory standards, incentives and tax allowances on top of the price mechanism. I am encouraged by the growing number of statements that I have been able to secure from Ministers—from my right hon. Friend the Prime Minister downwards—showing that the Government are now moving along those other lines as well. I stress the phrase "as well."
I wish to cite to the House a number of interesting points, of which hon. Members will not be aware because they were first raised in correspondence with myself. In one case my hon. Friend the Under-Secretary of State for Energy said, in a letter to me on 8 February:
"I would agree that in the short term, and probably in the medium term too, potential for energy saving as the result of individual actions by consumers is likely to be greater than the potential for increasing supply, as many energy conservation measures can be implemented quite quickly."
I pay credit to my hon. Friend for that statement of the obvious. It is good to have it on record.
Equally, it was heartening to learn from my right hon. Friend the Prime Minister, as I did in a letter on 22 April:
"All my colleagues in the Government are, I know, already well aware of my strong views on the urgent need for increased efficiency and the elimination of waste throughout the economy. This applies with as great force to energy as to any other resource."

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Once again, all power to the elbow of Ministers at the Department of Energy who are trying to bring home that message, not only within their own Departments but, more crucially, within other Departments in Whitehall. I know that they face some tough and difficult negotiations. I wonder whether the Government are doing enough about conservation in that way. The record so far has been reasonable, but I should like to see more done in a number of spheres.
I wish to give a few brief examples. If he were here this evening my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) would tell us about the great benefits of combined heat and power and co-generation. We should never lose sight of the enormous contribution that could be made by the energy industries towards the overall goal of energy conservation and efficiency. The House will be aware that the energy industries, as a sector, are the largest consumers of energy on a fuel input basis. Therefore, the potential for saving is great. I hope that when he replies—or on some other appropriate occasion—my hon. Friend the Minister will tell the House of the positive progress that we are making towards a demonstration project for a district heating and/or combined heat and power.
It is not simply a matter of our own experience; we need to consider also what is being suggested elsewhere in the world. I know that my right hon. Friend the Secretary of State is keen on a recent report of the Ford Foundation study entitled "Energy: The Next Twenty Years", in which there are five clear recommendations on energy conservation. As the report comes from the home of free enterprise, I wish to know whether my hon. Friend will be able to say anything to reassure me that some of the ideas mentioned in the study are being seriously considered, and even acted upon, by the Government.
The report said:
"The most important thing energy policy can do to stimulate efficient development of the conservation 'source', is to let the prices of other energy forms rise to reflect their real economic value."
I am sure that my hon. Friend will give me an assurance, because it is precisely the Government's policy, as I understand it.
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Secondly, the report recommends that
"the government subsidise conservation investments until other sources are efficiently priced".
That would be a prudent investment for the future. I hope that that recommendation is being followed. Thirdly, the report suggests:
"Valuable legislative direction now exists for encouraging government agencies to use life-cycle-costing techniques in purchases. This legislation should be administered so that government provides a market for energy-conserving technology."
Again, that shows that the role of public procurement can be valuable in Government policy.
Fourthly, the report talks about increasing what it calls " Nonhardware conservation research", and states:
"Much of energy conservation is not a matter of inventing a new gadget but rather of discovering ways to remove barriers or provide incentives, so that people will be able to make choices of less energy-intensive methods of benefit to them and the nation."
Again, that coincides with the Government's policy, and I should like to see an even stronger commitment to that. Fifthly, it recommends that
"federal, state and local governments should aggressively 'market' conservation information, especially to households, consumers and small commercial establishments".
It gives as examples:
"Appliance and product labelling, hot lines for advice, mandatory disclosure of energy use of buildings, energy consumption 'extension' services, and other actions that focus attention on energy use".
Those recommendations come from the font of the free enterprise culture. They should be distinctly arid as opposed to "wet" in their prominence, and I very much hope that the Government will endorse them and set about ways of putting them into effect.
The second aspect of the motion is the politically more sensitive one of ensuring that every household can afford adequate warmth. That aspect of the motion underlines the importance of the rather generous fuel discount scheme announced by my right hon. Friend the Secretary of State for Social Services on 27 March. In my view, any scheme that, when totalled up, enables £200 million a year to be spent on special help for those who are least able to cope with rising fuel costs, cannot be all bad. I urge the Govern-

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ment, as and when resources become available, to build on that.
I also think that that should imply the need to encourage, or even to require, the British Gas Corporation and other fuel industries to get more involved in energy conservation, as my hon. Friend the Member for Northfield pointed out. In that connection, some change in the statutory requirements for those industries may have to be considered. One does not have to reform those industries in toto in order to do that; one can perhaps merely make some modification to their statutory requirements in order to build the conservation objective into all their activities.
I shall not weary the House by quoting it, but there was an interesting article on that subject by Mr. John Davis, of the Intermediate Technology Development Group, in The Guardian on 7 May, and I commend it to Ministers and their officials. I believe that a great deal more can be done in that direction. The Government may even have to consider such things as inverted tariffs, more prepayment meters, and the wider provision of payment on easy terms for electricity and gas consumers.
However, as my hon. Friend the Member for Northfield has already pointed out, the reality is that at the end of the day no responsible Government should shelter everyone from every price increase. That is just not the path of responsibility. We must rely on effective and selective help. In the long run, if we are concerned with fuel poverty, as with many other kinds of poverty, we should be dusting off our manifesto's proposal for a tax credit scheme. There is no doubt that, within the right framework, real help for "fuel-poor" people could be included. Therefore, I commend the Government for what they are doing on conservation, I urge them to do more, and I pay tribute to the hon. Gentleman for introducing such an interesting debate.
5.54 pm
Mr. Frank Dobson: I begin by paying tribute to my hon. Friend the Member for Woolwich, East (Mr. Cartwright) for giving us the opportunity to debate matters connected with fuel. I shall not concentrate on the consumption end, as a
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number of hon. Members have done, but, rather, on the supply end, because, in some circumstances, it is the cost of the supply of fuel which is one of the major sources of the trouble. That certainly applies in the case of electricity.
There are certain costs which the electricity industry must bear. It must bear the cost of the basic fuels that it uses as well as the cost of providing decent wages for those who work in the industry. However, there are two costs that the electricity industry, and the manufacturing companies that build power stations, have imposed on us that were avoidable, and ought to be avoided in future, and whose imposition on the rest of us has been quite scandalous. The costs and delays in the construction of power stations have been a national scandal for some time, and the gross overestimation of the likely demand for electricity has meant that the electricity industry now has a stupendous spare capacity, which is producing nothing and for which we must pay while it is standing idle.
There is no worse example—or, in a sense, no better example—of what has gone wrong in the electricity industry than the record of the advanced gas-cooled reactor programme—the AGR programme.
I find it slightly amusing that on 29 May last year the Under-Secretary of State, when quoting the costs of supplying units of electricity from various types of power station, added, almost as an afterthought, that because of limited experience of AGR nuclear stations their costs were not included. That is quite right. There was very limited experience. But if the projections made by the CEGB, and its suppliers, of the time that it would take to build nuclear power stations had been correct, four nuclear power stations would have been operating for a minimum of five years, which by my reckoning would have meant at least 20 years' experience of running AGR stations. According to the record, the CEGB's contractors commenced building Dungeness B in May 1965. They then estimated that it would produce electricity in May 1970, but unless there is a late wire from the course in the middle of this debate it still has not produced one watt of electricity.
Hartlepool was commenced in August 1968. It was supposed to have produced electricity by September 1973, but it, too,

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has produced no electricity to date. Hey-sham A was commenced in October 1969. It was supposed to produce electricity in September 1975, but it has still not produced a watt. Hinkley Point B, the triumph of the AGR. programme in England, was started in April 1966. It was supposed to have produced electricity in April 1972, and miraculously it has managed to produce some electricity, but only since September 1976. It has done so intermittently since then, because to say that the CEGB has had considerable trouble in achieving its rated output would be an understatement, and, as you know, Mr. Deputy Speaker, I am not given to understatement.
I should also point out that those delays have had gigantic financial consequences, which have driven up electricity bills. Dungeness B should have cost £89 million, but the latest cost from the CEGB is £410 million. Hartlepool should have cost £92 million, whereas the latest figure is £381 million. Heysham A should have cost £142 million, but that has now risen to £396 million. Hinkley Point B should have cost £95 million, but that cost "only" £162 million. I emphasise that the figures for the uncompleted stations will increase substantially by the time they produce electricity, but even discounting that, the original estimated cost of the four stations that I have mentioned was just over £400 million, whereas it is safe to say that it is now approaching £1,400 million.
That is a disgrace to the industry, to the private manufacturers and contractors who have failed to build the plant, and to those who committed the country to such a programme. It has become clear that that programme was a non-starter.
According to figures supplied by the CEGB, the cost of generating electricity in other power stations—resulting from delays in the completion of AGRs—has been estimated at £1,200 million. That takes us to a total of £3,000 million. Electricity users had to pay that amount because scandalous delays were involved in building four nuclear power stations.
However, every cloud has a silver lining. In some senses benefits have arisen from the fact that these stations, and others that the CEGB is having built for it, have not been completed.
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Although the CEGB intends the surplus of plant over the system's maximum demand to be 28 per cent., it is now about 33 per cent. If the plant that was supposed to have been built by 1979 had been built, surplus capacity would have reached 50 per cent. Indeed, it has exceeded that amount in Scotland. Every electricity user is paying for that surplus capacity.
What should be the country's policy on nuclear power? Given the figures that I have quoted, all hon. Members should consider with a jaundiced eye any predictions made by the electricity supply industry or manufacturers, or under the imprimatur of the Department of Energy. The Department of Energy has been involved in all the calculations that have gone wrong, and there is nothing to suggest that it is likely to make any better calculations. The hon. Member for Truro (Mr. Penhaligon) pointed out that if we get our guesses as badly wrong in the next 20 years as we have done in the past 20 years we shall not be able to spend our money on anything else, because we shall be using it to keep ourselves warm and to keep our factory wheels turning.
The Government are said to be committing themselves to a nuclear programme that will cost £10,000 million. The figures that I quoted earlier are readily available to the public. On the basis of those figures, one would expect to find a mysterious reason for the Government's decision to go ahead with the programme. Indeed, it is being propounded by the same people who made a mess of the programme that is still shambling along.
By some freak, I received an article through the post. I do not know whether it is out of order to quote from it, Mr. Speaker. I hope that it is not. It purports to be the minutes of a Cabinet committee. The minutes relate to a discussion of nuclear power policy and the nuclear industry. The document refers to the minutes of a meeting that was held on 25 October 1979. There seems to be no cogent reason that would justify going ahead with a massive nuclear power programme—on the lines suggested by the Government—with the exception of one sentence. Some explanation for that sentence may be found in

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the Government's anti-trade union obsession. It states:
"But a nuclear programme would have the advantage of removing a substantial portion of electricity production from the dangers of disruption by industrial action by coal miners or transport workers."
That appears to be the Government's justification of their amazing commitment to nuclear power.
Mr. Geoffrey Johnson Smith: Is not the hon. Gentleman being less than fair to the Government? Surely he will agree that it would be very stupid to base an energy policy entirely on coal. Given the best of good will from the present mining force, there is no guarantee that it can reach targets capable of sustaining coal production to the level required by an expanding British industry.
Mr. Dobson: I accept that there are doubts about the capacity of the mining industry to produce all the coal that we may need. However, the figures demonstrate a lack of progress in the AGR programme. They suggest that only a madman or mad woman would put his or her faith in the capacity of the nuclear industry to produce power at anything like the cost, or within the time span, that it estimates.
The Government should tell the nuclear industry and the CEGB to get working on the stations promised for 1970 and 1975. They should point out that that must be done, before an extra penny is committed to a new nuclear power programme. That would be a justifiable approach. It would also be a safe approach. We shall not run out of electricity, because there is an enormous plant margin. The Government have been penny wise and pound foolish. They have roughly halved the amount of money being put into house insulation. They have cut the amount of money given by £12 million or £13 million. That is pennies in terms of Government expenditure. The Government have been wise and careful about that. On the other hand, they plan to squander £10,000 million on a nuclear programme, despite the fact that its completion cannot be guaranteed.
Not all faults can be attributed to the management of the CEGB. Before the country launches itself into a massive programme of expenditure there should be a
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thoroughgoing investigation into what has gone wrong with the nuclear programme. I do not seek an investigation so that people can be vilified. We should be able to identify the causes of failures, so that some effort can be made to put things right before the same ramshackle outfits are expected to build the next generation of nuclear power stations.
Unless it can be proved that those outfits were right, people will become doubtful about spending any money. If those who have committed money find that they cannot get the stations to work, people's doubts about the safety of the nuclear power programme will increase. If a station cannot even be built, the capacity to build one safely will be brought further into doubt.
I hope that the Government will commit themselves to a careful look at the input side of fuel prices. They should ensure that unnecessary prices are not built in. At present, the people of Britain are having to chip in about £3,000 million in order to pay for a programme that has produced practically no electricity.
6.9 pm
Mr. Peter Bottomley: It seems that two and a half debates are taking place tonight. The first debate was introduced by the hon. Member for Woolwich, East (Mr. Cartwright). The second debate has taken place about a general rise in fuel prices. The half debate has been introduced by the hon. Member for Holborn and St. Paneras, South (Mr. Dobson). When he spoke about the problems of the nuclear fuel industry, I was surprised that he did not find time to mention the £500 million that has been spent on an oil-fired station. It has not been completed because of 27 laggers. However, I understand that a rise in the cost of oil has had something to do with the final decision.
Before coming on to the debate introduced by the hon. Member for Woolwich, East, it is worth noting that during the last 10 to 15 years a number of things have happened to most of the primary fuels. The coal industry has gone through its difficulties. One can argue that one of the advantages of nuclear power it that it does not suddenly get switched off, as coal was in

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1972 and 1974. One might argue that the change in the price of gas over the last 10 years was unpredicted. Although Government encouragement to stop the real price of gas from falling, at least for domestic customers, is right, the relative movement in the price of gas has consequences that are not always considered when decisions are taken. We all know what has happened to the price of oil.
Returning to the first debate, I must say that I always start thinking of blocks of flats in Nightingale Vale, between the hon. Gentleman's constituency and my own, which are stuck with all-electric heating. It is the kind of heating that people cannot afford to keep going, in the kind of housing that is normally occupied by those who cannot afford to move. This problem needs to be dealt with on its merits.
I do not believe that we shall be able to find a solution that will apply to all forms of heating in all forms of housing tenure and all forms of housing construction, and which will meet the particular needs of the disasters, in heating terms and poverty terms, of industrialised building, followed by Ronan Point, which have left these people with all-electric heating.
I believe that it would be right for local authorities, in their associations, to discuss with the Government and representatives of the tenants concerned—let us remember that in the main we are talking about tenants rather than owner-occupiers of such homes—how this problem can be dealt with. No solution will deal with their needs unless it is a scheme tailor-made for them. I do not believe that it will be a scheme that can be dealt with by the Department of Health and Social Security. I think that it will have to be taken into account and dealt with by local authorities.
I should like to make a general point on what I might call the economics of poverty. I think that it would be wrong not to accept that there is a growing problem of fuel poverty. I think that it would be right to accept that the level of disconnections and the type of disconnection need to be analysed on a regular basis, preferably in the early half of the year, so that whatever remedial action
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is decided as appropriate can be taken before the next winter comes in. I recognise that because of the fairly mild winter that we had in 1979–80, perhaps we shall not learn this year as many lessons as we would have learnt had that been a severe winter. The problem of disconnections needs to be raised in this House each year, because I have no doubt that we shall evolve better codes of practice with the fuel boards, and it is a matter with which the House should be concerned.
Having said that, however, if we are to move to a special form of additional finance for poor families—and clearly the cure to poverty is money rather than services, in most cases—and if we are to start looking for additional sources of finance for fuel and water service charges—as I believe we shall as the impact of rising water rates makes itself more and more apparent; again, an example of a charge rising faster than the old-age pension—we shall end up with a rather odd society in 20 years' time.
It will be a society in which, first, we shall have increased the pensions of those who have retired and we shall, I hope, have increased the level of child benefit to deal with those children who are also at risk through hypothermia and lack of effective heating. We shall have brought in both higher benefits as of right for these people, and we shall have got some kind of fuel assistance, and perhaps water rate assistance.
We shall, therefore, have a generally rising standard of living, with extra help for necessities and essentials, and in effect we shall be saying to people "Use your increased spending power on candy floss. Move on from the black and white television to a colour set, to Teletext, to Viewdata and whatever", but we shall still be left in the illogical position of allowing every group that is arguing for some necessity to come forward and say "We need a special scheme." Whatever action the Government take, this year or in future years, they should make sure that we do not end up in that kind of situation.
Finally, on the whole question of insulation, what is important is not what the Government spend on insulation, but what is spent on insulation. Here again

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it seems to me that the Government's job is to make sure that sufficient research and analysis is going on. If it turns out that more Government action is required to encourage others to spend their money on insulation, that will be fine. If it turns out that it is necessary for the Government to spend our money on insulation, that again will be fine. The important issue is not whether the Government spend £15 million or £30 million, or even £7½ million, on insulation measures. What is vital is that we all spend our money on insulation, because it is in our interest to do that, and, having done it for ourselves, I think that we are far more likely to provide the help that is needed for those who are not able to organise it for themselves or to pay for it themselves.
6.16 pm
Mr. Allen McKay: Following the remarks of the hon. Member for Woolwich, West (Mr. Botomley) on home insulation, I believe that this is an adequate measure, which should be carried out. Therefore, it was with some regret that we saw that the Government had cut grants for home insulation by half. The City of Sheffield, and Barnsley—my old authority—were achieving very good progress on home insulation, but because of Government policy on various matters that programme has now had to be cut out.
Local authorities need help in other ways as well, because they have a problem in relation to condensation. This problem is not confined to any particular area; it stretches from one end of the country to the other. The remedy for condensation suggested by the Department is that one should turn up one's heating and open one's windows. That is what the planners, the architects and the departmental information services are suggesting. Turning up one's heating and opening one's windows constitute a contradiction of sorts, but if that is the only way in which some people can get rid of condensation, they are having to do so.
Many of my constituents are hit by rising fuel prices—none more so than the elderly. They cannot understand why the Government have raised gas prices by far more than the Gas Corporation wanted. If we are to run into a market situation, for heaven's sake let us have that market situation and let us not have
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one created from Government sources by doing exactly what the Government have done and putting the price of gas out of the reach of many old-age pensioners.
Before North Sea gas started to come on stream, people were told that it would lower gas prices. It was said that it would make gas the cheapest fuel of all. Therefore, we do not believe the Government when they start talking about cheap prices arising from nuclear energy.
Local authorities need help when going into a building programme. If double glazing and extra fitments are to be put in, the price of a house will increase. Already people cannot afford their houses, anyway. They cannot afford the rents, so one has to look after that aspect as well.
I come finally to the points made about the coal industry. It has been said in this debate that the industry could not produce the necessary coal. In fact, we can produce the coal if we know exactly what is wanted. Let the Government say what the National Coal Board must produce and the NCB will produce the miners who will produce the coal and satisfy any coal requirement of this country. The coal is there. The miners are there. I closed about 20 collieries while working for the NCB and I watched experienced miners drift away from the industry. If that is the type of policy to be carried out we shall not have the coal, but if that type of policy is reversed, and if coal is exploited to the full, the mining industry can provide as much coal as the nation needs.
Following on that point and on building, if the coal is produced let us have houses in which to burn the coal. In future every house should be built with a chimney, because with a chimney it has an alternative means of heating, by whatever fuel is the cheapest.
6.19 pm
Mr. Joseph Ashton: I am sure that all right hon. and hon. Members are deeply grateful to the hon. Member for Woolwich, East (Mr. Cartwright) for tabling this motion. Fortuitously, it is being discussed on a day when it has been announced that the increase in electricity charges will now take effect from August, rather than October. I understand that the Government intend to refer

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the matter to the Monopolies Commission. I do not know what the Monopolies Commission is expected to say or do to stop the increase, because the cash limits of the Government have pushed up the prices. There should be some interesting investigations.
During the past year there has been a totally inconsistent energy policy, which almost defies description. First, there was a massive advertising campaign, asking people to "Switch off" and "Save it". Then, gas prices were increased by 29 per cent. because gas was being used too quickly, and the Government wanted to bring the price of it in line with that of electricity. Then the price of electricity was raised because people were not using enough. What sort of paradox is that? We shall soon reach the stage where the Government will be telling the pensioners to keep warm by buying a jar of Fiery Jack ointment, rubbing it in well, and running on the spot, singing "There's a hole in my bucket, dear Liza".
We are now taking a Monty Python attitude to pricing of electricity. The Government believe in a free market economy and Milton Friedman monetarism, except in energy. When gas can be sold cheaply, at great benefit to consumers, the price is lifted in order to conserve it. That in itself is not too bad a policy, if it is only part of the policy. If it were backed up by vigorous insulation and protection policy for the poor we might go along with it. But it is not being backed up by either. We have a Catch-22 situation. If we use too much gas the price goes up. That is a policy that defies belief.
As the hon. Member for Truro (Mr. Penhaligon) said, massive profits are being made from energy. North Sea oil and gas are both bringing in massive profits. As my hon. Friend the Member for St. Paneras, North (Mr. Stallard) said, the electricity industry could have made massive profits if it had completed its building programme on time. Every one is making money and enjoying it, except the pensioner. Old-age pensioners were promised a 16½ per cent. increase in the Budget, supposedly to keep in line with the rate of inflation. There was an announcement today that inflation is likely to top 21 per cent., so the old-age pen-
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sioners are 5 per cent. worse off. Gas prices are to rise by 29 per cent. So, the poor get poorer under the Conservative Government and there is a massive redistribution of wealth from the poor to the rich.
Instead of the poor enjoying the benefits and profits of North Sea gas and oil, those profits are going straight to the Treasury. The Chancellor simply says "Thank you very much", and says that he will use them to reduce the public sector borrowing requirement. In effect, they will be used to finance the tax cuts for the rich. Under the Conservative Government in 1970–73 there was a policy of keeping down nationalised industry prices to reduce inflation, but this Conservative Government have a policy of milking nationalised industries to produce the maximum profits so that the money can be given away in tax cuts.
Mr. Forman: The hon. Gentleman would be wise to bear in mind what was said publicly by his hon. Friend the Member for Birkenhead (Mr. Field), before he became an hon. Member, about the record of the Labour Government during 1966–70, which he documented when he was in charge of the Child Poverty Action Group. The then Labour Government's policies left the poor worse off, by a long chalk.
Mr. Ashton: I do not wish to go back 14 years, to a date before North Sea oil extraction. We are now talking about the massive profits of North Sea oil and gas, which were not there during 1966–70. They are so embarrassing that the Government are now having to bring in an excess profits tax to ensure that the money goes to the Exchequer. It is a tragedy that they did not bring in legislation to help the poor and to provide them with some cheap gas. The cash is there. The Gas Corporation's profits have doubled from £300 million to £600 million.
The Government have put forward a social security solution of paying £1·45 a week in fuel allowances. That is a flat rate benefit. I do not accept that it is anywhere near as good as the electricity discount scheme introduced by the previous Labour Government. No matter what the size of the house, only £1·45 is allowed. Some old ladies—many of them Conservatives—may be living in

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large four and five-bedroomed houses, which cost more to heat than a bedsitter of a one-bedroomed flat. There are many examples of that.
Some of the facts produced by the National Right to Fuel Campaign are illuminating. They give as an example a lady who is receiving the £1·45 a week benefit. She lives in an all-electric house with her 2½-year-oId son who has pneumonia. Last year, a quarter of her electricity bill—£85—was paid. She received that in addition to the fuel allowance. Now she receives nothing.
Another example is that of a lady with two children, aged 6 and 10. Last year her electricity bill was £64. She received £16 back under the electricity discount scheme, but as her youngest child is over 5 she is not entitled to the extra £1·45 that the Government allow. She is therefore £16 worse off. The allowances given by the Government apply only to couples over the age of 75 and families on low incomes where the youngest child is under 5. There are literally millions of people who would have benefited from the electricity discount scheme, but who do not now benefit under the fuel allowance scheme. Large families and the elderly are mainly affected. Large families need to burn more fuel because children are at home, and the elderly feel the cold more. Families with children have to keep them warm and have to cook for them. Their comparative costs are much higher, and they need the cash, but they do not get it.
Mr. Peter Bottomley rose—
Mr. Ashton: I am sorry; I shall not give way now. I shall sit down in about 10 minutes.
About 15,000 households have their electricity supply disconnected for more than a month, because they are too poor to pay the bill. The costs of electricity have risen far higher over the last few years than have supplementary benefits or pensions. When the proposals in the Budget are analysed in terms of what has been granted—the electricity discount scheme cost about £130 million last year—and that is updated in line with the cost of fuel, it will be seen that the Government will not have given a single penny in extra allowances from the profits that have been made to keep the poor warm.
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Their policy on insulation is equally appalling. We should be starting a crash scheme of insulation, particularly for our council houses. I do not need to repeat the statistics that have already been mentioned. There have been cuts all the way along the line. There have been cuts in the allowance for people who wanted to carry out their own insulation schemes from £25 million to £12 million, and there have been cuts in insulation schemes that could have been carried out by the local councils, and that have been swallowed up in block grants. When a Labour Government were in power and were prepared to give grants for insulation, the Tory councils would not take them up. Now a Tory Government is in power, and the Labour councils are willing to take up such schemes, but the money has vanished into the block grants. That is crazy. The Tory councils who would not take up the grants previously have now given an excuse to the Tory Government to cut them. To start cutting back on insulation grants is a pretty poor conservation policy.
Now that North Sea oil and gas are making profits, we need a total reappraisal of domestic fuel consumption and needs. In February 1976 a White Paper was produced, entitled "Energy Tariffs and the Poor". It contained many good recommendations on inverted tariffs, which are worthy of reconsideration. It suggested that instead of starting with expensive units that become cheaper as the consumer uses more electricity, we should start with lower-priced units and introduce heavier charges per unit as consumption increases. That would mean that someone living in a six-bedroomed house who wanted to keep every room at 75 degrees would have to pay much more than a poor pensioner living in one room. We must use profits—I think that everybody accepts this—to provide greater benefits for the poor.
I thought that we might hear something from the Government Benches about the use of slot meters. Coin-in-the-slot meters for the poor are acceptable. I am ashamed at the way in which electricity boards have dragged their heels and made various excuses for not installing such meters in new properties. They say that they do not want to collect the cash, because they are scared that their collectors will be under threat of having it stolen. They

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think that such meters tempt some families to break them open. They claim that it is difficult to measure the supply and that the system costs about 10 per cent. more to operate.
All those who come to my surgery— I am sure that this applies to all hon. Members—who have an energy problem say "Yes" when I ask them whether they would like a coin-in-the-slot meter. They ask me to assist them in getting one installed. A Member of Parliament can always arrange for installation. However, many consumers have often applied for coin-in-the-slot meters and have been fobbed off with various excuses. Such a meter is one of the best aids that a poor family has. The family is able to pay as it goes. It knows how much the electricity supply is costing. If the house is warm and the electric fire goes off at II pm, the family will go to bed rather than put another 50p in the slot so that they may stay up and keep warm until midnight.
The scheme was available many years ago. How did suppliers sell electricity at the turn of the century, when people were very poor? The answer is that they sold it through slot meters. The cost of electricity and gas has now reached such a level, and has become such a major part of a family's budget, that it is ridiculous to expect ordinary people to run up a bill for three months and then to face them with a demand for £150 or £100. The electricity boards show no inclination to install slot meters. There is a need for legislation so that the consumer will have the right to demand slot meters for gas and electricity.
Thirdly, we must have a fuel rebate system. We have had a rate rebate system for many years. The scheme was introduced by a Conservative Government. We have had rent rebate systems. These have not been flat rate allowances. We do not give a flat rate allowance. Rent and rate rebates depend on the size of the property and on an individual's needs. We must adopt the same approach with a fuel rebate system.
The electricity discount scheme of a previous Labour Government had its merits. That Government kept gas reasonably cheap to help the poor consumer. Those who lived in all-electric
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high-rise flats received a good discount. However, it did not do a lot for the old lady who was living alone in a large house—the family having grown up and left—and who had a gas fire in one room, a paraffin stove in the hall, an electric fire in the bedroom and a coal fire in the kitchen. However, if that old lady were given a fuel rebate stamp it would be acceptable.
We have talked to the heads of the industries and they would be prepared to accept stamps. Bus tokens or free bus passes are acceptable to pensioners. They do not regard them as charity, or handouts. They know that they have, in effect, paid for them all their lives and that they are entitled to them. The cheap television licence is acceptable to pensioners. They complain only when they cannot get it, not because it is available.
That is the sort of scheme that must be produced, and if a Labour Government are returned following the next general election they will produce one. We shall take some of the profits from North Sea oil and gas and use the money to help the poor, who are entitled to keep warm in the 1980s. That has not been done by the Government.
6.35 pm
The Under-Secretary of State for Energy (Mr. Norman Lamont): When my hon. Friend the Member for Woolwich, West (Mr. Bottomley) said that the debate had been divided into two separate debates, I think that he was being rather optimistic. One of the great difficulties about replying to the debate is that it has been so wide-ranging and has covered so many different aspects. I should like to take up the remarks of the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) about the nuclear industry, but alas, I fear that time does not permit that today. That will have to await another occasion.
I shall ensure that some of the comments of the hon. Member for Truro (Mr. Penhaligon) are passed on to my right hon. and hon. Friends in the Department of Health and Social Security. A number of matters that have been raised in the debate are appropriate to refer to that Department, and I shall ensure that that is done.
I join the House in congratulating the hon. Member for Woolwich, East (Mr. Cartwright) on choosing the subject and

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on the way in which he introduced the debate. The hon. Gentleman made a formidable speech, which was full of detail. He highlighted many important matters and I want to try to reply to a number of them. I cannot cover them all, but I assure the hon. Gentleman that we shall carefully study his speech, which was extremely valuable.
The Government's approach to energy policy can be characterised as both realistic and responsible. Some of the criticisms that are sometimes made, not least from the Opposition Benches, could best be described as both irresponsible and unrealistic. It would be pleasant to pretend that we live in a world in which energy is cheap and abundant; a world in which nothing had been heard of OPEC. However, as a responsible Goverment we must face the realities of the world. The garage forecourts have been blazing the news for some time, but it has not always sunk in that this is a world of rising energy prices, insecure energy supplies and increasingly scarce energy.
Energy, like peace, is indivisible. Rising fuel prices, to which the motion draws attention, are a worldwide phenomenon. Over the past decade the price of crude oil has risen twentyfold in money terms. Between December 1978 and April 1979 the cost of crude oil to United Kingdom refiners rose by the sky-scraping figure of 130 per cent.
The United Kingdom is relatively well placed with its substantial resources of oil, coal and gas, but we are neither insulated nor isolated from worldwide trends. Britain is not the Persian Gulf. We do not have hundreds of years of supplies of oil and gas, and we must adopt pricing policies that prolong our period of self-sufficiency and enable us to conserve our resources.
Against that background, there is no point in trying to delude ourselves that the days of superabundant fossil fuel can return. They cannot, and we must not be irresponsible and pretend that they can. My hon. Friends the Members for Birmingham, Northfield (Mr. Cadbury) and for Bedford (Mr. Skeet) both put extremely well the case for economic pricing.
We must bear in mind that the cost of gas to the British Gas Corporation
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is rising rapidly. New gas supplies are many times more costly than the cheap southern basin gas that is available under old contracts. Demand for gas far exceeds supply. It is far better to use pricing to improve the balance between supply and demand than to rely upon rationing.
Mr. Skeet: What is the British Gas Corporation prepared to pay on its Norwegian contracts to secure the contracts from European competition?
Mr. Lamont: I am sure that, on reflection, my hon. Friend will understand when I say that it would not be prudent for me publicly to give him that information.
The third point about gas pricing is that, because the real price of gas to the domestic consumer has been falling for several years, last year sales to the domestic sector only broke even. The British Gas Corporation would make a loss on domestic sales if price increases were not allowed. The corporation, buying gas from the North Sea, is a monopoly purchaser, buying sometimes on historic contracts, which adds to its profits. The hon. Member for Bassetlaw (Mr. Ashton) and others have referred to the large profits of the energy industries and how they create a bonanza, which the hon. Gentleman can use for all sorts of purposes. However, the large profits of the energy industries cannot be isolated from our national finances and our large debts. We cannot pretend that we have one and not the other.
With electricity, the effect of rising energy costs is felt even more directly than with gas. Fuel costs account for over half the final price of electricity. While the industry must make every effort further to improve its efficiency, that must not be used as an excuse to shield consumers artificially from developments that have led to a real increase in the cost of producing electricity.
It was announced in January that area electricity boards would introduce in two stages the electricity price increases needed this year. The first stage, averaging 17 per cent., took effect from 1 April. Area electricity boards are now considering increases in August, against a background of somewhat higher increases in

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costs than anticipated. Tariffs are a matter for the industry, but the council has announced today that, although the tariff increases will vary from board to board, on a national average they will be about 10 per cent. Those increases stem largely from increased fuel costs, which, as I say, now account for over half of the industry's total costs.
There have been further increases in fuel oil prices this year. The largest fuel cost is coal. A price increase of roughly 3 per cent. on coal adds 1 per cent. to electricity prices. With the electricity industry's coal bill well in excess of £2,000 million per annum, even small increases in the price of coal, if unmatched by tariff increases, have a deleterious effect on its finances.
In assessing fuel costs the industry has to take account of a number of factors, including the recent coal price increase and the alteration in settlement dates for wages claims in the coal industry. In addition to fuel costs, other costs, such as capital charges, salaries and purchases, have risen in spite of real economy efforts. It is vital that everything should be done by the electricity industry to absorb costs, and the Government have stressed that fact to the corporation.
The House will recall that the Government have taken powers under the Competition Act to refer, amongst other things, the costs and efficiency of the nationalised industries to the Monopolies and Mergers Commission. My right hon. Friend the Minister of State for Consumer Affairs today announced that the CEGB's costs and efficiency are being referred to the Commission for investigation to establish whether everything possible is being done by the board to absorb costs and increase efficiency in order to keep prices as low as possible. The terms of the reference will be announced shortly.
It is sometimes alleged that economic pricing for fuels is an eccentric aberration pursued by this Government alone in Europe. That is not the case. Other Governments in Europe have indicated that they are moving to economic pricing for fuels. If we look at the position in neighbouring countries, we see that British prices—certainly domestic prices—are by no means excessive. The latest available EEC Commission data indicate
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that domestic prices in Britain are among the lowest in Europe. Even if the prices are adjusted to take account of higher wage levels in Europe, United Kingdom prices are still well below the EEC average.
The Government accept that economic pricing and social policy must go hand in hand. We recognise, as my hon. Friend the Member for Woolwich, West argued in his admirable speech, that large and sudden fuel price rises can pose problems for the old and the poor. Fuel poverty can trap people into a cycle of debt. There is the danger that, if elderly people cannot go without heat, they will go without some other necessities. If the poor run into rent arrears too, they may be prevented from moving to housing that is more economically heated. Several hon. Members have referred to the problem of economic heating, particularly in housing heated by electricity. My colleagues in the Department of the Environment are making detailed technical advice available not only on insulation but on property design. It is a problem, and local authorities can be helped with advice.
The elderly and the poor tend to devote more of their total expenditure to fuel and other necessities than does the average family. Fuel price increases can therefore have a disproportionate impact on those vulnerable groups. That does not necessarily mean that their overall cost of living increases faster than that of the average household. Different indices for different groups over a longer period move remarkably in parallel. However, that may not be so in future, and the Government must watch that closely. Nevertheless, given the impact that fuel prices can have on the budgets of low-income households, the problem of adjustment can be acute. For that reason, next winter, in addition to the normal uprating of pensions and long-term benefits, we are extending entitlement to the extra heating additions under the supplementary benefit scheme and increasingly by large amounts the sums that would have been available.
Although the hon. Member for Walsall, North (Mr. Winnick) was generous enough to welcome the scheme, he implied that the amounts would have been adjusted anyway. However, they are being adjusted by even more. The Government's package of measures for next

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winter is generous at a time when public expenditure is under pressure. We are spending £205 million, compared with £125 million spent on aid with heating costs under the previous Government. A substantial amount of that is new money. We are increasing help with fuel costs in real terms over and above the rise in fuel costs. It has been made clear that in future those amounts will be adjusted by reference to fuel price increases. A permanent uplift has been given.
Mr. David Ennals: I welcomed the move when it was announced by the Secretary of State, but does the hon. Gentleman accept that it is much more than paid for by making a 54-week year for pensioners? By losing two weeks of uprating, pensioners will pay for the benefits that they will get for their heating allowance.
Mr. Lamont: Although I am doubtful about the right hon. Gentleman's comment, I shall draw it to the attention of my right hon. Friend the Secretary of State for Social Services.
It cannot be denied that £85 million of that money is new money, over and above the money allocated by the previous Administration. Our help is more effective. The previous Government's discount scheme was spread so widely that the help was given on an insignificant basis to large numbers of people—about £7·50 per beneficiary—whereas under our scheme some people will benefit by as much as £176·80. Also, about 2 million poor consumers will benefit.
Mr. Arthur Lewis: I know that the Minister is a compassionate man and that he is doing his best in the present difficult economic situation—[Interruption.]—Hon. Members should not laugh at me for taking my shoe off. I happen to have a bad foot, and it is no laughing matter. Is the Minister aware that many old-age pensioners and sick and disabled people just cannot afford to meet the costs? Before the electricity or gas industry cuts off the supplies of these people, for whatever reason, will the Minister have a word with the appropriate Department and ask it to contact the Department of Health and Social Security in that area in order to ascertain the facts? I do not want to help those who can smoke or drink themselves to death and dodge their
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fuel bills, but I believe that the electricity and gas industries should contact the DHSS to see whether people about to be disconnected need special help and whether it can be given.
Mr. Lamont: I shall come to the question of the code of practice and disconnections, but before I do so I wish to comment about the pay-as-you-go methods. These are no substitute for financial help, but they have a role to play in combating this problem. About 20 per cent. of electricity consumers use some sort of pay-as-you-go method.
A number of hon. Members have expressed an interest in the extension of the gas and electricity savings stamp schemes. We have had discussions with the industries about making their stamps more widely available. Negotiations have been in progress with the National Federation of Sub-Postmasters about the possibilities of the stamps being sold in the offices of the federation's members. Those negotiations have been successful, and I am happy to announce that agreement has been reached on the terms under which the industries' stamps may be sold at sub-post offices. The industries hope to implement this arrangement from 2 June. I stress that this is optional on the sub-post offices, but I hope that a large number will agree to the scheme. There are 19,000 such sub-post offices, and this should add considerably to the availability of the stamps. Another matter is the interchangeability of the stamps. I hope that agreement will be reached on that. The Government are keen to see that happen, and negotiations are proceeding.
A number of hon. Members have mentioned prepayment meters. The number of these meters has declined. That is not necessarily because of the attitude of the boards. These meters are not always suitable for many people and they pose some risks for the boards as well. However, the boards have dropped the hardship category that was necessary for prepayment meters. I share the views expressed by some hon. Members about the need for them, and I am sure that the boards will do everything possible to make more meters available.
The hon. Member for Woolwich, East also referred to the problem of disconnections. It is important to put the figures

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into perspective. While the figures for 1979–80 showed a small increase, they were nothing like as high as those of some earlier years. The majority of those disconnected are reconnected in a short period and are only a small proportion of domestic consumers. The overall figures for disconnection do not necessarily indicate the amount of hardship being caused. Although some people are in hardship, others are feckless and allow their debts to run up. The London Electricity Board has had much criticism—I have even had letters from Members of Parliament complaining about their electricity being cut off. However, as a result of action? taken by that board, it has managed to reduce its debts by £28 million. That is a substantial achievement and a substantial advantage to all other consumers who would have had to carry the debt.
I agree that other considerations arise on the longer-term disconnections. Very little is known about these cases. I shall study the figures that the hon. Member for Woolwich, East quoted, but little is known about the cause and the hardship effects. The industries and the consumers' councils share a desire to probe the problem further. For that reason the Policy Studies Institute, which has carried out an independent review of the code of conduct, has been asked specifically to examine the problem of people who are disconnected for periods of more than one month.
The hon. Member for Woolwich, East also asked why the PSI study was taking so long. I have been asking that question myself. I am informed that as a result of the pressure that the Government have been exerting—the review is the responsibility of the sponsors, that is, the industry and the consultative councils—some preliminary results will be made available in time for the coming winter.
The hon. Member also referred to the possibility of pursuing debts through the courts rather than disconnecting people. That argument might have more validity if there were not an obligation on the industries to supply. If they do not have
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the right to cut off, debts will continue to pile up and it will be more and more difficult for them to recover the money.
The motion calls on the Government to end wasteful consumption. If the motion referred simply to the Government setting an example in the use of energy, we could accept it. I very much agree with those of my hon. Friends who have criticised the approach that energy conservation should be a matter of the Government spending more and more. My hon. Friend the Member for Birmingham, Northfield pointed out that the money spent on conservation was not just money that was spent by Governments. A total of £200 million was spent by individuals installing insulation in their homes. The money spent by private industry may amount to thousands of millions of pounds. That is a figure that one should compare with the investment in nuclear power to which some hon. Members have objected. There is a role for the Government, and the proper role is to set an example on information, education and advertising. We are increasing spending in real terms by 30 per cent.
Lastly, the responsibility of the Government is to help the needy. That is why we are expanding the help that we give to the elderly and pensioners for insulation. We are giving more help than ever before.
While sympathising with the intentions of the hon. Member for Woolwich, East, I have some reservations about the wording of his motion. A responsible Government does not mean one who are responsible for everything and who take away all responsibility from the individual to manage his own affairs and to make his own decisions. Rising real prices are a problem, but they are a problem for us all. The Government recognise their obligations, but they must also, through pricing, hammer home the message that energy is scarce and—
It being Seven o'clock, the proceedings on the motion lapsed, pursuant to Standing Order No. 6 (Precedence of Government business).

ORDERS OF THE DAY

  IRAN (TEMPORARY POWERS) BILL
  Order for Second Reading read.
  7 pm
  The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): I beg to move, That the Bill be now read a Second time.
  This is not a cheerful Bill and it is certainly not one which the Government would have wished to introduce, but after much thought we have been driven to the conclusion that it is necessary for the good health of the Alliance on which our national security depends to a large extent. It is mainly on that ground that I commend it to the House.
  The House will be familiar with the background and I need not go into it in detail. It is just over six months since the American hostages were taken and confined in the embassy in Tehran. For five of those six months, the United States has relied on legal and diplomatic means to secure their release. That has been remarkable, given the dismay and anger that Americans have clearly felt and expressed throughout that period. Is it not fair to say that probably no other major Power at any period of history would have shown such patience and restraint in response to such events?
  Continuing the story of the diplomatic and legal measures that were taken in an attempt to secure the release of the hostages, on 4 December the United Nations Security Council passed a resolution without opposition calling for the immediate release of the hostages. On 15 December, the International Court of Justice made an interim decision, which I understand is binding under international law, ordering the release of the hostages. That underlines the fact that this is not just a quarrel between the United States and Iran in which the rest of us are essentially spectators. What has happened in Tehran has been, as the International Court of Justice underlined, an affront to a part of international law in which all our interests are involved.
  In January, the Secretary-General of the United Nations visited Tehran. In
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  the same month, a further Security Council resolution was vetoed by the Soviet Union. In February and March, there was an unsuccessful visit to Tehran by the United Nations commission of inquiry. All those diplomatic and legal efforts were fully supported by Britain and the other allies of the United States.
  It was only on 8 April that we were asked by the President to enlarge that diplomatic and public support to economic measures. As the House knows, on 22 April, EEC Foreign Ministers decided
  "to request their national parliaments immediately to take any necessary measures to impose sanctions against Iran in accordance with the Security Council resolution of 10 January which was vetoed and in accordance with the rules of international law."
  They further decided that, if possible, such powers should be taken by 17 May, which is the date on which the Foreign Ministers next meet. They said:
  "If by that time there has not been any decisive progress"—
  I underline that phrase—
  "leading to the release of the hostages they will-jointly implement sanctions."
  That is the background to the Bill.
  Since that meeting on 22 April, there have been two dramatic happenings—the unsuccessful rescue attempt by the United States and the siege of the Iranian embassy in London which was ended successfully with the freeing of 19 hostages. Neither event has changed the underlying situation. The rescue attempt led to the dispersal of the hostages to, as far as we know, several Iranian cities. That makes it hard to imagine that such an attempt could be repeated. After the siege of Prince's Gate, we all hoped—as the Prime Minister said in the House—that a new window would have been opened for diplomatic efforts. That may still be so.
  We asked Sir John Graham, our ambassador to Tehran, who was of great help to us here during the siege by keeping in touch by telephone with the Iranian President, to go back to Tehran. He has since seen the President and the diplomatic efforts of Britain and the Nine will continue. The House will understand that they have most chance of success if they are continued fairly privately.
  Mr. Tam Dalyell: It is not immediately obvious how, if we are to keep open what the hon. Gentleman

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  refers to as the new window, it is sensible to start talking about sanctions. If we are serious about the new window we should not have the Bill.
  Mr. Hurd: There have been windows in the past and it is right to pursue every opportunity. But so many opportunities have come and gone without marked progress that we do not believe that we would be justified in turning down the American President's request and going back on our agreement because of the point that the hon. Gentleman has made. I shall develop later the question of how we see the likely consequences in Iran of the measures proposed in the Bill, though I doubt whether the hon. Member will agree with my analysis.
  We have decided today, in accordance with what was proposed at Luxembourg on 22 April, to give one week's notice to the Iranian authorities of the suspension of the visa abolition agreement. That means that within a week any Iranians wishing to visit this country and any Britons wishing to visit Iran will require visas.
  Mr. John Page: I am sure that it is childish of me to suggest that one hopes that during the coming week extra special care will be taken with anyone who comes in from Iran.
  Mr. Hurd: Yes. The agreement requires one week's notice, but the point made by my hon. Friend is well in the minds of those concerned.
  Mrs. Elaine Kellett-Bowman: What will be the effect on an Iranian national who is married to a British woman? Will he still be allowed to come in to see her?
  Mr. Hurd: My hon. Friend should write to me, or more properly to the Home Secretary, about any particular case arising from the institution of a visa regime.
  Mr. Robert Hughes: The hon. Gentleman cannot simply say that in one week's time there will be a change in the visa regulations and, in reply to an intervention, suggest that in the intervening period international treaty obligations will not be properly dealt with.
  Mr. Hurd: I made no such suggestion.
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  Specific questions about the visa regime are, of course, a matter for the Home Office.
  My noble Friend the Foreign Secretary took stock of this whole position in Washington when he went there last week and had the opportunity to discuss it with the President, with the new Secretary of State, Senator Muskie, before his confirmation, and many other American authorities. It is important that the House should know that he was asked, in the most urgent terms, to carry through the agreement that had been reached at Luxembourg. Meanwhile, we have been working on how we would translate this agreement into national terms. It was agreed that we should each take national measures. This is not a question of Community legislation.
  Mr. Ron Leighton: Will the hon. Gentleman confirm the report in The Times last week that the nine EEC diplomats had had a meeting and had unanimously said that economic sanctions would be counterproductive?
  Mr. Hurd: I cannot confirm that because it is not so. I hope that hon. Members will permit me to continue with my speech before asking me to give way again.
  We have been working on how to translate this agreement into national measures. We have received representations from many hon. Members in different parts of the House on specific points and, also, representations from British firms. We have spent a lot of time—this may be what the hon. Gentleman refers to, although the report he has seen is wrong—working on details with our European partners and other Governments, particularly the Government of Japan. An important point has to be made. Some letters I have received chide us for not acting alone and at once to support the United States. There has been quite a volume of correspondence to this effect. In our view, it is right, in principle, to act, whenever we can, in concert with our partners, and it is also, in this case, a matter of plain common sense. We do not intend either to lag behind or to jump ahead of our other main competitors. We do not intend to take measures that have the effect of delivering trade into the hands of our competitors.

  917
  The legal position is different in different countries. That will not come as a bombshell of surprise. Nor will those who study the matter be surprised to know that Continental Governments tend to have wider powers under existing legislation and tend to operate more by statutory instrument or decree than this country does. We are trying to iron out these differences in order to reach, in practice, a similar result. It is not enough to concert in advance what measures should be taken. We have to concert throughout on how they are applied. Machinery exists among the Nine. We are in close touch with the Japanese, the Australians, and the Canadians and others. We intend to use this machinery to the full at every stage.
  Mr. Donald Anderson: On proportionality, is the aim to obtain similar effects on the trading relationships of each of the Nine with Iran? If, as is rumoured, foodstuffs will be exempt, this will have a relatively less harmful effect on France's trade with Iran.
  Mr. Hurd: I think I am right in saying that several of the countries to which I have referred have a more substantial trade than ourselves in industrial goods. Food is not covered. It was not covered in the draft Security Council resolution. Sanctions against food are not applied by the United States. The hon. Gentleman is wrong. If he looks at the figures, he will find that French and Italian trade in other goods is substantial.
  Another point that I am sure will arise in the debate—it inspires a good deal of the opposition to the Bill—is the parallel with Rhodesia. I am sure that we shall hear in this debate echoes of those endless and unhappy debates that have taken place over 15 years on Rhodesian sanctions. I would try to argue, not perhaps with an enormous hope of success, that the position is entirely different. The problem is different, the objective is different. We are not attempting in the Bill, or in any orders made under the Bill, to change a regime. We are attempting to bring a regime back to some legality from the past. We are not claiming to seal frontiers or to bring anyone to
  Corrigendum
  In fourth line from foot of column, after "We are", insert "not".
  their knees. We are not talking in terms of weeks or months.
  I hope that the House will not find in our mouths the kind of overblown rhetoric that was familiar, at any rate, in the initial years, of sanctions against Rhodesia. The position is entirely different. The objective is more modest. In Iran, we are faced with a thoroughly confused and shifting political situation, with different groups jostling for power and now one, now another, appearing to have its nose in front. I do not think it would be wise in that situation for anyone, not even the hon. Member for West Lothian (Mr. Dalyell), to be dogmatic either way in advance about the effects of the measures that might be taken under the Bill.
  We are dealing with a country closely geared by the past to the economies of the West. Plenty of people in Iran know that whatever paper agreements are signed—I expect that we may see some paper agreements—it is not possible, except with a lot of disruption, to switch the emphasis and the gearing of the Iranian economy to Eastern Europe. Plenty of people in Iran know how disastrous the effects would be if they tried. One has only to consider the plight of and the comments now made by those who rule Mozambique or those now trying to get out of Cuba after several years of seeing their country hitched to the Soviet Union, and one has only to study a little experience across the world, to know that there is no prosperity for Iran in hitching its economy to that of the East.
  We are trying to give a signal to the people who know the facts of the world that they cannot expect to enjoy prosperity in association with the West if they seek to humiliate the United States and break international law in this flagrant way. With these thoughts in mind, we have looked at the powers that the Government already possess to see whether they might be sufficient for the purpose that we have in mind. The United Nations Act 1946 would have been the right instrument if the Security Council had passed its resolution on 15 January without a Soviet veto. The resolution could have been put into our national legislation by means of the United Nations Act 1946. It would have been mandatory. That is no good because of the Soviet veto.
  We looked at the Import, Export and Customs Powers (Defence) Act 1939. Many hon. Members will have studied that Act. They will know that it is something of a blockbuster within the field that it covers. The 1939 Act enables the Secretary of State for Trade to prohibit or regulate the import or export of goods of any kind. There is no limitation of circumstances or extent. It gives that power to the Secretary of State without any further parliamentary procedure. Those are powers that the Government already possess. The 1939 Act is still in effect.
  There is an assurance that I am authorised to give to the House which, if I had not given, the House would have insisted upon. If the context of Iran it were decided, at any future time, by the Government to make use of their powers under the 1939 Act, the House would be given an opportunity to pronounce on that exercise of powers, even though there is no such requirement in the Act. We came to the conclusion that the 1939 Act was not sufficient for our purposes because, although it is a blockbuster, its scope is too narrow.
  That Act is concerned with the shipment of goods. It does not cover a number of matters included in the draft Security Council resolution which we wished to cover. It does not cover service contracts or the use of British ships or British aircraft to carry goods from third countries to Iran. It does not cover the triangular arrangement by which a British business man in London could contract to supply to Iran goods from a third country.
  We therefore came to the conclusion, reluctantly and after a good deal of thought, that a new Bill was needed to be read in conjunction with the powers which we already possess. There will be opportunities tomorrow to go through the Bill in detail and I do not need to do so now. I will, however, give the main headings.
  Under clause 1 the Government take powers to impose sanctions in relation to the contracts with Iran. That clause, like the whole Bill, is clearly linked with the detention of hostages. Then follow two important clarifications. Subsection (2) provides that no order under the Bill
  920
  can apply to existing contracts or to any contracts made before the date on which an order under the Bill is made.
  Mr. Jack Straw: The Minister will know of the case I raised with him concerning a firm in my constituency which is worried about the operation of clause 1. The clause is clear, but is the Minister saying that as a matter of policy the Government do not intend to use their other powers so as retrospectively to affect contracts already made?
  Mr. Hurd: I shall deal with that point in a moment. The hon. Member raises the kind of constituency point that has been very much in our minds.
  Subsection 2(2)(b) excludes contracts with banks or other financial institutions for the provision of banking or other financial services. Restrictions already operate in this area and have been in force since the end of last year, as my right hon. Friend the Prime Minister has made clear in the House. The restrictions have been in force on the basis of guidance to major British institutions. They have worked satisfactorily and it does not seem sensible to legislate where an existing arrangement is working quite well.
  Mr. Kevin McNamara: What does the Minister mean by "guidance"? Is it legislative power, a word in the ear or a bit of arm-twisting?
  Mr. Hurd: No; guidance in this context is guidance. The arrangements have been working satisfactorily. As Mr. Byrd, a current American politician, is in the habit of saying "If it ain't broke, don't fix it."
  One of my hon. Friends asked about medical supplies. They are excluded from the draft Security Council resolution which was vetoed. We do not intend to cover them by any order made under the Bill if it becomes an Act.
  Dr. Brian Mawhinney: Will my hon. Friend clarify the position of British branches of American banks? We are introducing this Bill in support of our American allies. The President has frozen financial transactions between American banks and Iran. However, this Bill leaves banks in this country free. Are the branches of American banks liable under the Bill? What is their position?
  Mr. Hurd: My hon. Friend probably knows that this whole question trenches on a very old argument between ourselves and the Americans about the extent of their jurisdiction. I hope that my hon. Friend will permit me to leave this point to be dealt with by my hon. Friend the Minister for Trade, who is to reply to the debate. This is an extremely sensitive matter of jurisdiction which I should not want to pronounce upon off the cuff. I shall ensure, however, that my hon. Friend receives a reply before the debate finishes.
  The hon. Member for Blackburn (Mr. Straw) asked about existing trade under existing contracts. This Bill gives the Government no power over existing contracts. Powers exist under the 1939 Act not over contracts but as regards the shipment of goods. No decision has been taken to use those powers. No decision would be taken unless it were clear that our main competitors were doing the same. If any such proposal were made, it would have to be submitted to this House for approval.
  Mr. Phillip Whitehead: A number of contracts with Iran have existed over a period and have an option in them for renewal. If such a renewal came up, would that be treated as a new contract or as an existing contract?
  Mr. Hurd: We would have power under the 1939 Act to deal with that situation, but as regards shipment, not contracts. However, no decision has been taken to use such powers. No such decision would be taken unless others were doing the same, and any such decision would have to be submitted to this House.
  Mr. Ioan Evans: One of the failures of sanctions against Rhodesia was that, although British companies were presumed not to be dealing with the illegal regime, they were acting through subsidiary companies in South Africa and elsewhere. Will the Bill cover contracts drawn up by British companies through subsidiaries abroad? Will any guidelines be issued to the banks not to provide financial arrangements for such subsidiary companies dealing with Iran?
  Mr. Hurd: The Bill is clear about the scope of its jurisdiction. It would extend to areas within the jurisdiction of Her
  922
  Majesty's Government and to British nationals. This again trenches on the issue of jurisdiction raised by my hon. Friend the Member for Peterborough (Dr. Mawhinney).
  Mr. Peter Shore: May I raise a point on clause 1(2)(0), which reads:
  "shall not apply to any contract with a bank or other financial institution for the provision of banking or other financial services"?
  Surely the Exchange Control Act is in force, and surely that control would apply to all relevant financial matters in the case of Iran.
  Mr. Hurd: That is certainly true. I should have mentioned that of course the Exchange Control Act 1947 gives the Government powers in this area. At present, however, we are operating on the basis of the guidance that I have mentioned.
  The central issue is that the case for the Bill rests on the need to preserve as best we can the health of the Alliance to which we belong. I know that that is not of compelling interest to some Labour Members below the Gangway who favour our breaking away from the Alliance, of pulling out of Europe and of running down our defences—
  Mr. Robert Hughes: No.
  Mr. McNamara: Come off it.
  Mr. Hurd: That is a perfectly coherent and logical point of view—
  Mr. John Bruce-Gardyne: Before my hon. Friend reaches the general argument, there is an important point on the detail. For those of us who basically regard the proposition as nonsense, the argument must be that the Bill is only permissive and that the Government will have to place orders before the House before any action can be taken under its provisions. However, will not the orders come into effect before the House has a chance to debate them? Therefore, will not the decision that we are taking tonight determine what in practice will happen before the House could debate it?
  Mr. Hurd: I hope that the Bill is clear on that point. The undertaking I gave a few minutes ago brings the 1939 Act, as

  923
  it were, into line with the provisions of this Bill. The Bill provides:
  "An Order in Council under this section shall be laid before Parliament after being made and shall expire at the end of the period of twenty-eight days beginning with the day on which it was made unless during that period it is approved by resolution of each House of Parliament."
  I think, therefore, that the misgivings of my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) are not well founded because, though an order under this Bill, if it becomes an Act, could take immediate effect it would wither and die after 28 days unless it had by then been approved by both Houses of Parliament. I should have thought that in the circumstances that was a reasonable way of resolving the problem.
  Mr. David Ennals: Will the hon. Gentleman give way?
  Mr. Hurd: No; I must get on. I was trying to make the point—not in any offensive way—that hon. Members, in any part of the House, who do not believe in the Atlantic Alliance will, of course, be opposed to this Bill.
  Mr. Ennals rose—
  Mr. Hurd: The case for this Bill rests on the need to keep the Alliance in good health. Many right hon. and hon. Members in all parts of the House attach importance to the Alliance and wish to see it kept in good repair. They have experience—
  Mr. Ennals: Will the hon. Gentleman give way?
  Mr. Hurd: Perhaps I may be allowed to develop my argument. I shall not give way; I intend to develop this argument—[Interruption].
  Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The Minister has told the right hon. Member for Norwich, North (Mr. Ennals) that he is not giving way. The Minister has given way on many occasions.
  Mr. Hurd: Many of those right hon. and hon. Members understand from experience how the Alliance works and what is needed to keep it in good repair. The right hon. Members for Leeds, East (Mr. Healey) and for Stepney and Poplar (Mr. Shore) understand that. They understand
  924
  the nature of the Alliance and how it functions, prospers and suffers day by day. That is at the heart of the matter and it is that matter to which I request the House to turn its mind.
  It is understood that this is not an alliance between a master and a team of slaves. On the contrary, it is an alliance in which the members are continually seeking to advise and influence each other, particularly in moments of drama and of tension.
  Mr. Bob Cryer: Will the hon. Gentleman give way?
  Mr. Hurd: No; I intend to develop this point if the House will allow me.
  That was an important part of the purpose of the visit of my noble Friend to Washington the other day. It was precisely to exercise, on behalf of Britain, the influence we possess in the Alliance. My noble Friend took that opportunity to urge strongly that the United States Administration should not be so preoccupied with, and so caught up in, the issue of the hostages in Iran, dramatic and personal though it is in the United States, that it ignored the wider realities and the other dangers in the world which, in the long run, may prove much more serious.
  My noble Friend also took the opportunity to express our anxieties about the possible use of force on the simple ground that the Middle East is already in a state of such substantial turmoil that to add further to that turmoil by the use of force would be most unwise.
  The Foreign Secretary further took the opportunity to stress the absolute need for consultation in these matters. I now choose my words with some care for reasons that the House will understand. The Foreign Secretary came back from that visit satisfied that the Americans are well aware of the concern of their allies about the need for consultation over any future military action and confident that the Americans will take full account of that concern.
  It is certainly the job of a British Government in an alliance such as I have described—an alliance of free States—to seek to influence its partners and in particular perhaps the United States. But how are we to make that influence effective? What kind of influence is effective in such an alliance? Influence is

  925
  exercised by those who make an effort. Influence is not available to those who do not make an effort, particularly in times of difficulty. Without effort there is no influence.
  I believe that that is the essential case for this Bill. The United States—I am not sure that I blame it—does not have much use for the sort of weary sophistication into which Europeans are sometimes tempted. The United States is not likely to take advice when it comes from the depths of an armchair.
  I cite a parallel here because I think it illustrates my point. When Mr. Attlee, as Prime Minister, went to Washington at a critical moment in 1951 he was able, as I understand it, to influence quite substantially the tactical, and some of the strategic, decisions of the United States about Korea. That visit has gone down in history as a success. Why? The visit was a success in part, no doubt, because of Mr. Attlee's powers of persuasion but also because at that time Britain had troops in Korea and was making an effort. I believe that it was the fact that we were making that effort that entitled Mr. Attlee to a voice which proved influential and decisive.
  The circumstances in this case are different but I believe that the principle is the same. If this Bill is passed my noble Friend will be able to go to the meeting of European Foreign Ministers next weekend and say that we have carried out the obligations that we proposed for our part. The other Ministers will certainly proceed gradually. They will weigh whether there has been decisive progress and put all possible weight on diplomatic effort. Any sanctions they decide to recommend will be embodied, so far as Britain is concerned, in detailed orders giving details of the penalties which will have to be submitted for the approval of this House.
  Mr. David Winnick: Will the hon. Gentleman give way?
  Mr. Hard: No; I am coming to the end of my speech.
  This, I believe, is a cautious approach matched to the needs of the situation. It is sensitive to the authority of this House, and I believe that the Bill provides the Foreign Secretary with the
  926
  assurance and undertaking that he needs. To sum up—
  Mr. Cryer: I am grateful to the Minister for giving way. Earlier he explained how he divided people into two groups—those who supported the Alliance, and therefore his Bill, and those who did not. Will he explain how he differentiates between the banks which will not be subject to the legislation and presumably support the Alliance and the rest of trade and industry which the Minister presumably regards as opponents of the Alliance because they need to be legislated for? Is that due to the unhappy experiences of the sanctions against Rhodesia?
  Mr. Hurd: I have tried to answer that point three times. Perhaps the hon. Member was not present at the time. The reason is that the banks and financial institutions are already operating, and have been operating for several months, under the guidance that they have received. Since that system is working satisfactorily, why should we tamper with it?
  Mr. Tony Marlow: I am grateful to my hon. Friend for giving way. As a matter of information, will he tell us whether the Japanese, who have just signed a contract for petroleum supplies from Iran, propose to introduce a similar policy? Can he say in one word whether he believes that this Bill will bring forward by one minute of one hour of one day the release of the hostages?
  Mr. Hurd: I have tried to deal with the second point and I am now trying to deal with the main case for the Bill which concerns the cohesion of the Alliance. In reply to the question of my hon. Friend about the Japanese, may I say that this Bill does not deal with oil; nor does the draft Security Council resolution on which it is based. The oil issue lies outside the ambit of this Bill. We are working closely with the Japanese on oil and other matters and the measures which the Japanese are prepared to take on exports are quite substantial.
  The case for the Bill is clear. After five months of patience and five months of using diplomatic and legal procedures without success, the President of the United States approached us for help with the backing of the United States

  927
  Congress and the United States people. All the major allies of the United States are ready to act in response. We believe that if we are to exercise substantial influence in the Alliance it is necessary that we, too, should be ready to act in response. If we were to say "No" to the President, if we were to say that our experience of Rhodesia was miserable and that we did not believe that such action would have the desired effect, however able our arguments, we would be administering a major rebuff on the most sensitive point of our major ally.
  Anybody who believes that, having done that, we could pursue the argument for restraint against military action, for consultation, for fresh thinking about the Middle East and Arab-Israel, for examining the issue in the context of Soviet expansionism and for a sensible strategic approach and still have a substantial voice in Washington in expressing those arguments—which are soundly based—does not understand the present situation or the nature of the Alliance.
  We are not the least of the United States' friends nor in the past have we been the last to show courage in upholding the Alliance. It is unthinkable that in this crisis we should be the first to hold back.
  7.42 pm
  Mr. Peter Shore: It would be foolish to disguise the fact that there are serious doubts and misgivings about the Bill on both sides of the House and inside the Government. That came through plainly in the Minister's speech. We should be as frank with ourselves and to each other as we can. Only after a serious discussion of the hostage problem and a possible solution can we hope to make a worthwhile contribution to their release.
  The doubt in all our minds is whether, in existing circumstances, sanctions will help to achieve the purpose that we all share—the early and safe release of the hostages. I shall seek to explore that question and give my answer to it later in my speech. If there is doubt—and there is—about the means to achieve that end, let there be no doubt where our judgment lies and where our sympathies lie on the issue and the dispute.
  928
  The sequence of events began last November, when President Carter made available the facilities of a New York hospital for the deposed and desperately ill former ruler of Iran. That was sufficient, given the volatile passions in Iran, to provoke the students to their dangerous and fateful action of seizing the American embassy, to hold captive the 60 or so—now 53—residents, and to threaten them with public trials and summary execution.
  That situation was one of great gravity, but its seriousness was enhanced when the students' actions received the open support of the most powerful man in post-revolutionary Iran, the Ayatollah Khomeini. The rule—almost the only rule—that is universally accepted in international conduct is the duty of States to guarantee the inviolability of foreign embassies and their personnel. Diplomats can be reviled, rebuffed and expelled, but their persons, hitherto, have been secure. That is the clear duty of the host Government. That is a duty that we performed in London for the benefit of Iran only a week ago.
  Our century has experienced two world wars and many ferocious regional wars. It has seen tyrannical regimes of the most odious kind. It has witnessed revolution and counter-revolution. Yet, until in Iran last year, no Government—not even Hitler's on the outbreak of the Second World War, or the Governments of Amin and Bokassa in their lunatic excesses, or revolutionary regimes as diverse as the Bolsheviks in 1917, the Chinese in 1950, Franco's in 1939 or Pinochet's in 1974—have committed this offence.
  This rule of international behaviour, the guarantee of the personal safety of foreign diplomats, has been the lowest common denominator in international relations. It is easy to see why. Without it there cannot even be discourse between States, let alone the resolution of their differences.
  The American response from 6 November until 27 April in the face of this unprecedented violation of international conduct is difficult to fault. The Americans sent their politicians to the Security Council and their jurists to the International Court. On 4 December the

  929
  Security Council unanimously resolved to call on the Government of Iran
  "to release immediately the peronnel of the Embassy of the United States of America, to provide them protection, and to allow them to leave the country."
  On 15 December the International Court of Justice gave its unanimous verdict. It was:
  "The Government of the Islamic Republic of Iran should ensure the immediate release, without any exception, of all persons of United States nationality, who are or have been held in the Embassy of the United States … And afford full protection to all such persons in accordance with the Treaties in force between the two States and with general international law."
  The Iranian response to these high authorities was exactly nil. On 17 January the Security Council met again to vote on economic sanctions. Meanwhile, Afghanistan had intervened and the Soviet Union, supported by the German Democratic Republic, used its veto. Britain and France, together with Jamaica, Niger, Tunisia, Norway and Portugal, had no difficulty in casting their supporting votes.
  The Secretary-General of the United Nations then went to Tehran. Shortly afterwards a mission of jurists from neutral countries reinforced his efforts there by opening the way for an inqiury into the Iranian allegations against the conduct of the Shah's regime and the United States' involvement in it. That was to no avail. They were permitted to see neither the hostages nor the Ayatollah.
  The United States waited while the election of the Iranian president took place and then negotiated with him what might have been the first stage of the hostages' freedom—their transfer from the custody of the so-called students to the Government of Iran. President BaniSadr, elected by 75 per cent. of the popular vote, commanded the students to hand over their captives. However, he, too, was rebuffed and the Ayatollah backed the students.
  Whatever may be said about past United States policy in Iran and about the crimes committed by the Shah's regime, there is a great irony in the events. The first American president for decades who was ready for a major change in policy towards Iran, who not only encouraged the Shah to bow before
  930
  the winds of change but refused to bolster his regime, either with covert operations or with external force, was President Carter himself. The House may ponder how his predecessors might have responded. Yet in Qom and Tehran the most basically understanding president of post-war America is considered and described as a very satan of evil and imperialism.
  That background seems to be essential for today's debate and for the consideration of the sanctions Bill. For 150 days, with the full backing of the International Court and the unanimous support of the Security Council, the United States waited patiently and explored every possibility of diplomatic action, without success. It was then, after the beginning of April, that the United States decided to increase the pressure by breaking off diplomatic relations with Iran, whose own embassy in Washington had remained protected and active throughout the whole period and, at the same time, to mobilise support among other countries to implement the economic measures that, but for the Soviet Union veto, would have been approved as long ago as 17 January.
  The Foreign Ministers of the EEC met on 8 April and agreed to a two-stage approach—a joint diplomatic demarche in Tehran, to be followed by the imposition of economic sanctions on 17 May. I pause at this point because, in my view, that initiative was not the best way to proceed. The United States would have done better to return to the Security Council, in the light of the failure of the United Nations' further initiative, and to seek once more Security Council authority for economic measures.
  If that had been vetoed for a second time, the United States could have turned to the General Assembly of the United Nations and sought the two-thirds majority that is required to activate the uniting-for-peace resolution. In returning to the Security Council, and through private diplomacy, it should have sought to involve the Soviet Union, in spite of all the difficulties, in the release of the hostages. The Soviet Union voted on 4 December for their immediate release, and the Government of the USSR know very well not only the dangers for others, including themselves, that this precedent could set, but that they would themselves not have

  931
  tolerated for a moment similar treatment of their diplomats.
  Mr. Eldon Griffiths: I follow what the right hon. Gentleman has said. However, will he explain a little more carefully precisely how—in the light of Afghanistan—President Carter could have expected the Soviet Union effectively to help the United States?
  Mr. Shore: I do not wish to be diverted too far into that matter, but I believe—it is an important point for the House to consider—that in spite of the changes and the darkening of the international scene, it is vital for us all to remember that there are a number of issues in which East and West have a joint strong interest. We would be foolish indeed not to explore and not to make progress on those issues. We are still committed to the revival of detente. I believe that, in its own different way, that spirit is by no means dead in the Soviet Union.
  The American Government did not take that course. I think that President Carter made a serious mistake in addressing a specific and limited appeal to a few West European Governments. It was a mistake, because the basic issue involved is not one that concerns uniquely the Western Alliance; it genuinely concerns the whole international community. To make a selective approach to allies was to push the issue into the old divisions between East and West and, therefore, to make less likely diplomatic co-operation from the Soviet Union.
  Nevertheless, until three weeks ago I felt clearly that the balance of advantage lay with economic measures. As I told the House on 23 April, when the Minister reported to us, our view was that
  "the international community should join in diplomatic, political and economic, but not military measures to bring about their early release".—[Official Report, 23 April 1980; Vol. 983, c. 466.]
  I went on to make three points: first, that the diplomatic initiatives should be increased; secondly, that the OECD and not the EEC was the right forum if sanctions were to have any serious effect; thirdly, that the United States should return to the Security Council and seek the help of the Soviet Union in its release effort.
  932
  Two days after that statement came the abortive and tragic rescue operation, and the resignation of Secretary Vance. Those two events inevitably affect our approach to the hostage problem. I do not censure the American administration for attempting to release the hostages, nor do I class that action, with its strictly limited release objective, as a military sanction against Iran itself, but its timing was deplorable in relation to other political initiatives then proceeding.
  Both the failure of the mission and the fear, to which it at once gave rise, that it was only a precursor to other military actions inevitably brought about the opposition of most of the Muslim world and a widespread loss of support for and confidence in the United States in both non-aligned and friendly countries.
  Those events called for a reappraisal of both tactics and timing. Unfortunately, the European Nine were already committed to a certain date—17 May—and that was reaffirmed, apparently without any great discussion, at the summit in Luxembourg last week. That is why we have the Bill before us today. We now need a cool appraisal. We must think especially about the mix of measures that could best assist the continued objective of the early and safe release of the hostages.
  I do not accept the argument that support for the Americans in the form of economic sanctions should be given simply because Britain is their friend and ally. That was the underlying argument and theme of the Minister's speech. Indeed, he barely concealed his scepticism for the measures that he invited the House to approve. The fundamental lack of seriousness on the part of the Government was underlined by both the timing and the content of the Southern Rhodesia (Sanctions) (Amnesty) Order 1980, which the Government pushed through the House last Wednesday, the day before they published the Iran (Temporary Powers) Bill.
  If we think that the Americans are wrong about Iran, either on the substance of the issue or on the proposed actions, we should say so. We owe it to ourselves to state clearly when we think that they are wrong. We should have done that in the past over such issues as Vietnam and Cambodia. Far from weakening the Alliance by doing so, we would have strengthened it. Nor do I

  933
  accept the argument that the Alliance itself is so fragile that we must rush to agree, against our better judgment, in order to preserve it. To do otherwise than that is basically demeaning; worse, it is the old cold war approach. It is an approach based on such fear of the Soviet Union that all judgments must be subordinated to the overriding importance of agreement with our strongest ally. That would be the wrong reason to support the Bill. Equally, it would be the wrong reason to oppose it.
  The main argument of many who oppose sanctions is precisely their overriding concern that action against Iran would alienate sympathy from the West and push Iran into the arms of the Soviet Union. I think that that is extremely unlikely but, once again, it is an approach that subordinates the judgment of the issue itself to the crude calculations of the old cold war.
  Of course, it would be silly not to recognise that what has happened, and what may happen, in Iran, has implications for East-West relations, but short-term expediency and the belief that all issues must be judged against the touchstone of East-West power relationships is, in the longer-term perspective, the one thing that will surely weaken us in the real contest in which we are engaged.
  My approach is a simpler one than that of the Government. I believe strongly in maintaining the fundamental rules of international conduct. The seizure of hostages by Governments is an offence that we cannot condone or accept. I would take the same view if it were 53 Chinese or 53 Russian hostages who were similarly incarcerated. I would certainly take that view if 53 British diplomats were involved. Not only that; I would expect and demand wholehearted support, in efforts to obtain their release, not only from friends and allies but from the whole international community.
  I have an uneasy feeling that the Tehran hostages may not be a one-off case. There are other notoriously volatile regimes which may well be tempted to take similar action against diplomats or nationals who happen to be within their territory or within their power.
  Mr. Bruce-Gardyne: The right hon. Gentleman has made a powerful argument, to which we have listened with
  934
  great care. However, surely the whole history of economic sanctions, wherever they have been applied, shows that invariably they have been counter-productive. On that basis, does the right hon. Gentleman really think that the application of sanctions in this instance is likely to convince others that they should not behave in the way in which the Iranians have?
  Mr. Shore: In the last part of my speech, which I am just about to reach, I shall engage precisely that particularly difficult question. What I was really arguing was that I do not believe that we should do the right thing for the wrong reasons.
  Now I turn to the question whether we are doing the right thing at all. I wish to make it plain that for me the Bill raises no question of principle. The doubt that remains is precisely the problem that the hon. Member for Knutsford (Mr. Bruce-Gardyne) raised—that is, how effective can such action be? In themselves economic sanctions, unless they are applied by the great majority of the international community, will not be decisive. Sanctions applied by only some countries, although they include Iran's major suppliers in terms of the Nine, America and Japan, will, of course, have less effect. More weighty still is the consideration, to which a number of hon. Members have already referred, that in Iran we are dealing with such a confusion of authority, and such irrational forces—forces that many of us feel we do not even yet understand—that their response to measures that we take is bound to be unpredictable.
  I have thought hard about these factors, all the more so because those views are held by many right hon. and hon. Members whose judgment I respect, but I believe that on balance their arguments are outweighed by other considerations. First, if we are to rule out military action—and we must—and if Security Council resolutions and International Court judgments are to have any meaning at all, we can use only diplomatic, political and economic pressures to see that they are abided by.
  Secondly, they can, if judiciously used, have some influence on Iranian behaviour. There are different opinions and different forces operating in Tehran, and I believe that the more rational and civilised

  935
  element will find their position strengthened by the knowledge that the illegal behaviour of the students and their sponsors is actively and seriously condemned by the international community.
  Thirdly, I believe that these measures will help to cool the passions that have also been aroused in the United States. It is important that American opinion should know that in our judgment this is a matter for international concern and action, and not simply a United States-Iran private dispute.
  I am influenced, too, by the fact that this is an enabling Bill and that we shall have the opportunity for further and full debate on the context and timing of any order that is made under it, or, as the Minister has promised, any action that is taken under the 1939 Act as well.
  Therefore, I shall not oppose the Bill; indeed, I shall support it. But my strong view is that we should scrap the 17 May deadline, which was proposed against a background of very different events—before the release operation and before the resignation of Mr. Vance. To adhere to the old timetable, when Iranian xenophobia is still boiling in the wake of the helicopter debacle, would be counterproductive. Further, although we have made plain from the start our strong opposition to military action, we need the strongest assurance from the United States on this crucial point, and the assurance that even if the circumstances were radically to change there would be real consultation between the United States and its allies.
  We should use the period immediately ahead for new diplomatic and political initiatives. In the next few weeks we shall have the formation of a new Government in Tehran—this may help—the further judgment of the International Court of Justice, the Venice summit meeting of the Seven and most important, the first meeting of the new Secretary of State, Mr. Muskie, with the Soviet Minister for Foreign Affairs, Mr. Gromyko.
  The "frank and honest dialogue" with the United States, which Tass this morning called for, should indeed include Iran as well as Afghanistan. No one can say at this stage what the outcome will be of these many but relevant events, but I am strongly of the view that it
  936
  would be unwise to use economic sanctions until these further diplomatic and political initiatives have been explored. That is the message that I hope the Government will take to the meeting of the Council of Ministers on 17 May.
  8.6 pm
  Mr. Anthony Grant: The right hon. Member for Stepney and Poplar (Mr. Shore) made a robust and powerful speech. I found myself very much in agreement with the early part of it but I rather feared that he would suggest doing nothing. However, the whole House should take careful note that he will support the Bill. On this issue it is extremely important to demonstrate, so far as possible, to the rest of the world a bi-partisan approach, perhaps along the lines that the right hon. Gentleman mentioned. For that reason, I hope that many of his hon. Friends will follow what I thought was wise advice in all the circumstances.
  It is sad that we should be considering this Bill at all. One might have hoped that the brave and brilliant activities of our troops in releasing the Iranian hostages in London would have created a response from Tehran that would have made the Bill and the debate unnecessary. However, that is not to be and we must look at the situation as it is.
  All of us have anxieties about this measure. I know that my hon. Friend the Minister for Trade, who will reply to the debate, has great anxieties, because recently he has spent much of his time touring the world and encouraging trade with all nations. I pay tribute to him for that, but we must all look at our trading activities in the light of rather more serious matters.
  Sanctions rarely work, and often they are counter-productive. They did not work against Germany in the 1920s, immediately after the 1914–18 War. Indeed, it could be argued that they contributed to the emergence of Hitler. They did not work against Mussolini's Italy in the 1930s over Abyssinia. In that case the gesture was important, given the circumstances of the time, and had it not been for Daladier's France ratting, sanctions might have been more effective. As we all know, sanctions were largely ineffective against Ian Smith's Rhodesia, but they were not wholly so.

  937
  Sanctions can sometimes cause more difficulty to those who impose them than to those upon whom they are imposed. Different consequences result for different nations. Whatever the Government do, the House will want to be assured that the burden of these sanctions will be shared reasonably equally between our various partners. For example, I am sure that the House will not want our friends in France to use this as an occasion on which to take commercial advantage under the umbrella of the sanctions arrangements.
  There will be many opportunities to cheat. There is no question about that. Goods will undoubtedly slide through from certain Middle Eastern nations, via Dubai. There will be many loopholes. It is unthinkable that sanctions could be 100 per cent. watertight. However, the fact that sanctions may not be 100 per cent. watertight is not a reason for not embarking upon them or for saying that they will be totally ineffective.
  Great concern has been expressed by the right hon. Member for Stepney and Poplar and others lest this action should drive Iran into the arms of Russia. It is feared that such action might enable the Soviets to meddle, in pursuit of their imperialist ambitions. Like the right hon. Member for Stepney and Poplar, I doubt whether that will happen. The fanatical Islamic revival is unlikely to embrace the bear, after events in Afghanistan. If we are frightened that that might happen, we shall be frightened of almost anything.
  Although I know that many hon. Members are anxious about this matter, we should consider the context in which the Bill has been brought before us. The seizure and incarceration of accredited diplomats for more than six months, solely for the evil purpose of taking political revenge on a former ruler, represents an outrage of the worst order. As the right hon. Member for Stepney and Poplar said, that action is an affront to civilised behaviour everywhere.
  I sometimes wonder why the media persist in saying that students have done this. I do not know what they are studying, but they will not pass many exams. It is high time that it was recognised that they are terrorists of the worst type. One has only to talk to the ordinary man or woman in the streets of America—as I
  938
  did this year during two visits there—to appreciate the deep sense of shock and fury that is felt at such monstrous treatment of innocent fellow citizens. We sit here comfortably, yet we should ask ourselves how we would feel if our diplomats had been taken hostage in Tehran. How would we react? Would we like to be completely isolated? Would we want the Senate to say that it was difficult and that it was sorry to say that it was up to us, because it was too difficult for the Senate to attend to? We would rightly expect the Senate to put our friendship and Alliance first, regardless of details, of party interest, of who was Prime Minister, of which Government were in power or of who was President of the United States.
  Mr. Ioan Evans: Cannot an historic example be found in Suez? As a nation, we acted wrongly. America believed that we had acted wrongly and told us to get out. If we were to behave as a good friend of America, would we not tell the American Government to watch it and to cool it—if we saw them acting wrongly—just as Secretary Vance did?
  Mr. Grant: I shall not say who was right or who was wrong about Suez. I had been about to refer to Suez and to suggest that, whatever the rights or wrongs of the issue, we should set Suez aside and consider the situation today. Mere words are not enough. It is not enough merely to utter words deploring such action, without making any response.
  The military solution has rightly been rejected. However, if one rejects a military solution, one is left with economic action. The right hon. Member for Stepney and Poplar suggested that we might wait for the United Nations to respond. One might also deal with it on the more narrow basis of Europe. Whatever economic measures are taken, the fact remains that some alternative action must be taken if one is to demonstrate one's condemnation. If it is decided that sanctions should be taken, they should be taken no matter how crude they are or how many loopholes exist.
  There is a deeper significance to be realised. Are we not prepared to sustain the Western Alliance, even with a gesture? Whether or not that gesture is wholly watertight or effective, should we not be prepared to make it? Are we not

  939
  prepared to support a friend and ally who shares the same belief in freedom, in a time of need? Let people criticise America. Let them disagree with the United States of America. Let them argue and make the American Government see a different point of view. However, at the end of the day, are we not prepared to help the United States of America when it asks us to do so? It is unthinkable to spurn it in this way.
  Mr. Anderson: In what possible sense can it be said that we are assisting America if this action fails to achieve an earlier release of the hostages?
  Mr. Grant: We do not know whether this action will have that effect. The hostages might be released if we did nothing. However, I do not take that view. Like the Americans, I believe that the hostages are more likely to be released and that peace is more likely to be preserved if there is solidarity between allies and friends. The House should set aside its past differences and irritations about what the Americans did or, did not do about Suez. It should set aside present discontent about some of the trading activities of the United States of America that have caused considerable irritation.
  Europe is fond of prattling about democracy. In the Council of Europe one is always hearing about democracy. Let us and our European partners remember that there are 500,000 American graves in Europe. They demonstrate the price of the democracy that they enjoy. Let us remember that our defences have been protected since the war by the defence umbrella of the United States of America. We have been content that that should be so. In that context, the Bill is a very small price to pay in exchange.
  The central issue concerns freedom. The late Somerset Maugham, who has recently been the subject of another scurrilous biography, made a wise comment in 1940. He lived in France, and he advised the British Government of the time of its decadence. To no avail he warned that it would collapse. He said:
  "If a nation values anything more than its freedom it will lose that freedom; and the irony is that if it values comfort and money more than freedom it will lose those too."
  940
  Given the doubts and misgivings, I still believe that we should look at a broader picture. If we wish to set an example to our friends in Europe, and if we value freedom above all else, the House will pass the Bill.
  8.17 pm
  Mr. J. Enoch Powell: The Bill was commended to the House in a remarkable speech. I doubt if there are many parallels to be found of a Minister being so evidently miserable at opening a Second Reading debate. Ministers have opened Second Reading debates with greater and lesser amounts of enthusiasm, but they can rarely have done so much with such manifest distaste. It is to be hoped that the Minister's speech was not listened to, and that it will not be read, by either of the two groups to whom he claims it was directed. He refuted the argument that the Bill would influence the Iranians; and the Americans would have been ashamed and angry to hear how the measure was commended as a means of influencing the United States.
  The speech of the right hon. Member for Stepney and Poplar (Mr. Shore) was very different. The right hon. Gentleman traversed both bivalves of the Minister's argument with great force. He then arrived at the opposite conclusion to that to which his argument had led. Had his speech been handed down from antiquity in manuscript form, textual critics would have unhesitatingly distinguished Isaiah A in the first two-thirds of the speech from Isaiah B, a quite different person, who was responsible for the remainder.
  In introducing the Bill, the Minister made no effort to justify it on the ground that sanctions would produce a specific and foreseeable effect. Indeed, his opening words, which were as remarkable as anything in his speech, were that this Bill was a Bill "for the good health of the Alliance". Nevertheless, as the House is being invited to place upon the statute book part of a framework—for some of the framework is apparently already there—under which sanctions can be imposed in connection with the taking of the hostages, it is not unreasonable to spend at least part of our time considering whether the economic sanctions which are—perhaps—to be levied under the Bill will conduce to that result.
  I do not think that there is disagreement in any quarter of the House as to the

  941
  general experience of economic sanctions as a means for altering the behaviour of the Government of the country against which they are levied. By now, all of us realise that even the apparent exception of Rhodesia proves the rule, since sanctions there, if effective at all, were effective only when, after the collapse of the Portuguese empire, military force and infiltration had filled the scene.
  If that is true in general, if that is true of sanctions levied against Governments coldly pursuing a pre-determined course of action, how much more must it be so in the case of the Iranian Government, and of those varied groups who appear to exercise power in Iran. What is likely to be the effect upon those whose enthusiasms and beliefs have produced the revolution in Iran of hearing that a number of Western countries, linked perhaps with Japan, have decided to attempt, not indeed to starve them, but in some way to choke them by cutting off trade with them? I should have thought that, apart from anger and ridicule, the almost inevitable and foreseeable result would be to promote greater determination and greater pertinacity.
  But then, we are not dealing with a single, collective, organised form of Government. As the right hon. Member for Stepney and Poplar said with great accuracy and force, we are dealing with a shifting scene, where one group after another appears to exercise power. What foundation can there be in those circumstances for thinking that we can select a particular group—there was the phrase used by the Minister introducing the Bill, "Give a signal" he said "to the sort of people who understand the realities of the outside world"—or for making the extraordinary supposition that we can identify a "sort of people" in Iran, and then target or beam this measure upon them, so as not only to persuade them but to give them the means of prevailing over the other forces at work in that country?
  Mr. Dalyell: Has the right hon. Gentleman noted that the Ayatollah Khomeini has specifically said that he welcomes the inevitable austerity that trade sanctions would bring?
  Mr. Powell: I am not at all surprised, because without being either Ayatollahs or mostly Muslims, I would imagine that, if the roles were reversed, that would be
  942
  likely to be our reaction. Of course, we are not in the same position, we do not imagine ourselves in the same position; but if by any chance we heard that sanctions of this kind were being levied against this country, I think that might very well be the mood which would be stimulated and strengthened.
  However, I will waste—for it is almost wasted—no more time upon traversing the effectiveness and practicability of sanctions, since indeed it is not upon that basis that we are asked to pass the Bill. We are asked to pass the Bill—I repeat the phrase—"for the good health of the Alliance". The argument has been produced in two phases by the Government. The first and more general aspect of it is that as we are allies and friends of the United States we should do whatever the United States wishes and asks us to do, even if we believe it to be unwise, futile and counter-productive.
  First I want to ask, what is this Alliance? Our Alliance with the United States is in the framework of the North Atlantic Treaty. Now, it is no mere pedantry—though it is not a bad thing to be pedantic about the obligations and implications of an alliance—to point out that all these matters lie outside the scope of the North Atlantic Treaty. No territory involved in or covered by the North Atlantic Treaty is concerned in what we are discussing. So it is in only the very vaguest terms and in a different context that we are allies, and in a general sense that we are friends of the United States and are urged as such to take this measure because they want it.
  It seems to me a poor and unacceptable argument to say that it can be the implication of alliance and friendship-even in that broadest sense—that one should do an unwise thing at the behest of one's friend and ally.
  Mr. Frank Hooley: It is not "behest".
  Mr. Powell: I think that "request" has passed into "behest" at a good many stages. But I am quite content, since the hon. Gentleman prefers it, to substitute "request".
  Mr. McNamarra: Guidance? Guidelines?
  Mr. Powell: The vocabulary that I am being offered is already too luxuriant. The

  943
  main point is this: do friendship and alliance oblige one to do an inherently unwise and counter-productive act because the friend and ally wishes it? I see nothing at all in the behaviour of the United States which would lead us to suppose that that is its interpretation of the meaning of friendship and alliance. Perhaps we ought to be grateful to them; but one can remember countless instances when we should have been very glad—indeed, there is a case in point at this day where this country is faced with considerable difficulties in its own territory—to receive support and assistance, both practical and vocal, from the United States. The United States does not, however, on its part consider that to be implicit in alliance and friendship.
  Still, I thought the Minister felt the weakness and untenability of that interpretation. For his main case, if there was one, was that it was our duty to the Americans to dissuade them from unwise courses. Political, diplomatic and even economic action was advisable, while military action was profoundly inadvisable, both in the narrow and in the broad context. Therefore, we should dissuade them from any such thoughts by showing how ready we are to go along with them, even unhopefully, in the field of economic pressure.
  That argument could have been put forward and listened to with some patience, though perhaps incredulity, a few weeks ago. But it was after the Government had already undertaken these measures, and after there had been a common agreement among the States of Western Europe to undertake them, that the United States, without consultation, without even offering information, engaged upon what is described as a resuce attempt.
  Here I make a brief deviation to deprecate the application of inaccurate terminology to what the right hon. Member for Stepney and Poplar called the "rescue attempt". We are told that this was not a military action, that it was not a hostile operation, that it was simply a rescue operation. Of course to land helicopters and aircraft with troops in the middle of the territory of another country is a military and hostile act. I hope that no words or bowdlerisation of ours will result in anyone else think-
  944
  ing that we would regard it as other than a hostile act if troops, aircraft and helicopters were landed in our territory. That is what we are talking about. But to return from that excursus, I say that that event completely destroyed whatever argument there was for this measure as a means to give us the power of influence, advice and persuasion over the United States. That event proved that no such influence—indeed, not even the normal courtesies of consultation and information—were to be obtained by our engaging in these measures
  The Minister brought us the tidings of the right hon. and noble Lord the Foreign Secretary from Washington. Do the Government believe the Americans are such fools that they will attribute influence, power and persuasion to us because we are drawing the outlines of kid-glove measures which we openly say we do not believe are likely to be effective or to conduce to the release of the hostages? The analogy which the Minister drew with Korea was profoundly misleading. We are in the opposite circumstances today, and nothing that we do through this Bill will change them.
  There is only one course that we can take which will in any way help the United States or the American victims of the revolution in Iran. That is for this House to be seen to abstain from measures which cannot produce the advertised result, which will be interpreted as acts of hostility by those to whom they are directed, and which will do nothing whatsoever to influence our allies against any course upon which, wisely or unwisely, they may decide to engage. I believe that the House should not pass this Bill.
  8.34 pm
  Mr. Hugh Fraser: I do not propose to follow the right hon. Member for Down, South (Mr. Powell) into speculations as to the situation inside Iran and the effect that the Bill might have. I agree with the right hon. Member for Stepney and Poplar (Mr. Shore) that at this time it is proper that certain steps should be taken against violations of international law. For that reason I shall support the Government, whatever my doubts about the effect of sanctions, and whatever the failure of sanctions in the past.

  945
  There is good argument in the view that to support the United States' request at this stage has merit. The right hon. Member for Down, South said that all had been changed by the American military adventure in Iran. I agree with him that to call this a rescue operation is a misuse of precise language. This is a question not of a Suez, but rather of a Navarino, when the Duke of Wellington used the famous phrase "this untoward event."
  That untoward event consisted of the British fleet allied to the French under Admiral Codrington blowing the Turkish fleet to smithereens. In the King's speech of that day the Duke of Wellington got His Majesty to announce that, despite this untoward and regretted event, he trusted that the interests of those persons who had suffered would fundamentally and swiftly be reconciled. If there be a political message in history—not that I wish to add knobs to the coronet of the Foreign Secretary—it is that the Duke's advice at that point would be wise advice today.
  Mr. Bruce-Gardyne: It did not work.
  Mr. Fraser: It did work. They got independence within a few years—remarkably quickly.
  My hon. Friend the Minister of State made the point that there is influence which can be used and which I think the Foreign Secretary in his mission to Washington did use. I recall what our main objectives must be. Of course we should try to ensure that international law is preserved, but we should also recall to the President of the United States his first and proper reaction to the Russian invasion of Afghanistan. The question which was paramount to Western interests was the preservation of safety in the Gulf and the free flow of oil. I believe that that is what we should still above all else pursue.
  I assume that what we are passing today will be relevant only if it is agreed by the other eight members of the Community. This is an enabling Bill from which will follow, one hopes, some common action by the Nine. For that reason, I believe that this is right. But I draw the attention of the Government and, indeed, of the whole House, to the immense dangers which now exist in the Persian Gulf.
  If there should be an outbreak of hostilities between Russia and Iran, and
  946
  if there should be an invasion of Oman by South Yemen, all these things would be different. But I foresee a continuing era of tension, in which untoward event, acts of terrorism, or other things not foreseen could result in a total stoppage of supply. That, as far as the West is concerned, is by far the most serious consideration, and I believe that we have some part to play here.
  When the Nine have acted, as I suspect and hope they will act in defence of the general principle, they should also make it clear to the American Government at this stage any blockade or mining of Iranian ports would be counter-productive to the main object of Western policy, which is the free flow of oil from the Persian Gulf. Such moves would be not only counter-productive but unacceptable.
  I believe too, that it is important that at future meetings the Foreign Secretary—the passage of the Bill tonight will give him some leverage in these matters—should move even further forward on the immediate problem of the protection and policing of the Straits of Hormuz. In this area one or two mines could block the whole of the West's oil supply and destroy the future of the West. It is for the moment—it will continue to be—under the sovereignty of the Sultan of Oman It is a channel two and a half miles wide. It is being policed by six patrol boats belonging to the Oman Government. There is no proper radar arrangement and no proper control of the area.
  The Foreign Secretary has advanced the concept that there could be a neutralisation of Afghanistan. I think that the time has come to put forward a similar proposal for the establishment of a zone of peace, a cordon sanitaire, or an area of international control at the mouth of the Persian Gulf. It is difficult, but not unrealistic, to think in these terms. If anything were to go wrong in the area, the Western world as we know it would come to a grinding halt.
  Mr. McNamara rose—
  Mr. Fraser: No. I have been speaking for only a short time.
  My proposal would mean discussions with the Iranians, if there be an Iranian Government with whom we can discuss anything. To revert to the doctrine of

  947
  Navarino, the one thing that we want to indulge in with the Iranians is some form of meaningful discussion. These issues could be kept at two separate levels—first, the total abuse of international conditions of normal diplomatic representation, and, secondly, the interests of all those in the area concerned.
  Little though I personally believe in the effect of sanctions, I believe that they will have some effect on those who direct affairs in Iran. I believe that the Bill will provide a sound position for our pursuit of the general interests of the West in following the main policies laid down by President Carter—namely, to ensure that the flow of oil from the Gulf shall not be interrupted.
  8.43 pm
  Mr. Stephen Ross: I do not intend to keep the House long. I listened to the speech of the right hon. Member for Stepney and Poplar (Mr. Shore) and I agreed with almost every word that he said, save for one conclusion, to which I shall refer.
  Despite all the recent events, including the abortive attempt to release the hostages, I think that we should show unanimity with the United States. That is one of the sounder reasons for supporting the Bill.
  The Minister will know that my hon. Friend the Member for Inverness (Mr. Johnston), who usually speaks on these matters, cannot be with us tonight. He wrote to the Foreign Secretary in November 1979 to say that he felt strongly at that time that the seizure of the American embassy in Tehran was a single barbarous act that broke the
  "basic principle of international relations built up over hundreds of years."
  He asked the Foreign Secretary
  "urgently to initiate a common approach, in the first instance by the countries of the European Communities and later at the United Nations."
  He also felt that the Ayatollah
  "should be told clearly that if he continues to undermine the whole basis of civilised conduct between countries, Britain will withdraw her diplomatic representatives and call upon all other countries to do likewise."
  That was last November. With hindsight, I believe that it is a pity that we did not take that initiative then. I am
  948
  aware of the reasons why no initiative was taken. The Government wished to keep their attitude open. However, with the benefit of hindsight perhaps we should have reacted more spontaneously. The USSR was supporting the Americans at that time, so had we taken an initiative the result might have been more conclusive.
  The right hon. Member for Stepney and Poplar called for meaningful talks with the Soviet Union, and I support him in that. I welcome the forthcoming meeting between Mr. Muskie and Mr. Gromyko—although perhaps the talks should have been at an even higher level. Despite everything that has happened in Afghanistan, those talks should go on. They should not be allowed to break down when the world is in a perilous situation. There is great need for meaningful discussions.
  I recognise that sanctions are no more likely to work here than elsewhere. Such action may well concentrate the Islamic nations behind Iran. The sanctions are unlikely to affect those holding the hostages. However, they may have some influence on the recently elected members of the Iranian Parliament and its diplomats, who have some recognition of world order. It is also possible that sanctions will make the task of those moderates more difficult. We do not know.
  However, when our true friends ask for help, we should respond. The feeling has been building up in America that the West is not doing all that it should and has been hedging its bets. That feeling prevailed before the abortive attempt to free the hostages. Now, more than ever, is the time to show understanding of the American position. We should demonstrate that we realise what the Americans are trying to do. They have made every effort to reach a satisfactory solution through diplomatic means. They could possibly try again, but that is asking a lot. The situation has continued for a long time. It is an outrageous act to continue to hold the hostages.
  The measure will be of some assistance in this respect, although I hope that the Bill's implementation can be postponed. But we must show that we understand the American position and are prepared to back America, even though we doubt the effectiveness of sanctions. We should not forget the debt that we owe the

  949
  United States in two world wars, the Marshall Plan and the NATO shield that we have lived under for the past 30 years. We should not forget American help and generosity. With all our reservations, the least that we can do is show our resolve to stand with the Americans now. I therefore support the Bill.
  8.48 pm
  Mr. Charles Morrison: All hon. Members must have great sympathy with the Americans in their predicament. Here is the most powerful nation in the world having a snook cocked at it, perhaps by a country but more particularly by a group of so-called students.
  In spite of the backing of the International Court, the United Nations and the vast majority of countries, the Americans have so far been unable to achieve their objective of obtaining the release of the diplomatic hostages. Against that background, one cannot fail to have great sympathy with their sense of frustration.
  Nevertheless, as my hon. Friend the Minister of State said in almost his first sentence, this is not a cheerful Bill. We must all have doubts and misgivings about the effectiveness of what it proposes. The long title of the Bill refers to the fact that it enables
  "provision to be made in consequence of breaches of international law by Iran in connection with or arising out of the detention of members of the embassy of the United States of America."
  I believe that in practice we must draw a distinction between the Iranian Government and the so-called students. Legally, Iran is undoubtedly in the wrong, but in practice the Iranian Government are not in control of the situation in their own country. Therefore, in practice a distinction must be drawn between reality and the Government's ability to control it.
  Against that background, one must ask whether sanctions would have any effect and whether they are appropriate. In principle, I am not opposed to sanctions. Sometimes they help to achieve an objective. In Rhodesia, the application of sanctions assisted in bringing about a solution, but it took 14 years and if sanctions had been the sole pressure put on that country no solution would have been found by now. It was sanctions, together with the oil price increases and the war,
  950
  which led to the miraculously peaceful situation in Rhodesia today.
  Only a few weeks ago the House supported a type of sanction by voting for a boycott by the British Olympic team of the Olympic Games in Moscow. If that is not a sanction I do not know what is. This House decided that it would be in the interests of this country and the free world to apply that boycott with the intention of persuading the Russians to reconsider their Afghanistan policy.
  Mr. Dalyell: That was not a very effective sanction. Some of us were delighted to hear that the Strathclyde council has given £10,000 to the British Olympic Committee to help send athletes to Moscow. Therefore, the sanction was hardly very effective.
  Mr. Morrison: That may well be so, but I suspect that everyone in the Strathclyde area will not be so happy about that decision. Whatever has been done by the Strathclyde council, the House decided by an overwhelming majority that this sanction should be applied to Russia.
  In certain circumstances, sanctions of one sort or another may be acceptable and may produce results. Nevertheless, I doubt whether they are appropriate in this instance as a means of advancing the interests of the American hostages. One must ask whether they will have a direct effect on the Iranian people. It seems unlikely that many of them will know of the existence of sanctions. Even if they do, we should not forget that the resurgence of Islam is coupled with a desire to return to a simpler form of life and sanctions will advance that desire if they are effective.
  Will sanctions have an effect on the Iranian Government and strengthen those who wish to help with the release of the hostages? It seems more likely that sanctions will undermine those who wish to assist. What is more, by imposing sanctions on one Islamic country, it is not beyond the bounds of possibility that other such countries will feel that they must support their friend in need.
  Of course, there is a danger that sanctions may push Iran further towards the Russians. I agree with my hon. Friend the Member for Harrow, Central (Mr. Grant) that that is unlikely, but it is not

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  impossible, particularly against a background of the political shambles within Iran. Furthermore, I cannot help recalling that before the Iranian revolution we were concerned with strengthening Iran as another bulwark against Soviet aggression. The revolution initially weakened Iran as an ally and we are apparently considering trying to weaken her further. We have to ask whether that is wise. I doubt whether it is.
  However, in spite of all my reservations, it seems right that we should support our American friends in need, both in order to help them to uphold international law and to assist them in securing the release of the hostages. As has been said so often, we owe the Americans a tremendous debt, which we cannot properly repay. Perhaps more important, if we do not pass the Bill we shall rule ourselves out of court with the American Government and people. If we do that, we shall remove any chance of our influencing the course of discussions about Iran and about the application of sanctions.
  Therefore, in spite of all the misgivings and doubts that I and so many others share, I believe that we should give the Bill a Second Reading.
  8.57 pm
  Mr. Eric Deakins: There can surely have been few debates in which so many speeches have been full of good analysis of the problems facing us and yet have come to conclusions that are contradictory to that analysis. The speech of the hon. Member for Devizes (Mr. Morrison) was a good example.
  I listened with care to the Minister of State for some sign of the objectives that the Government hope to achieve. Surely it must be recognised that there are at least two important objectives of British policy—to secure the release of the hostages and to restrain the United States from further military action that might endanger the peace of that part of the world, if not of the whole world. I found it disturbing that neither objective figured in the Minister's speech as a reason for the Bill.
  The Minister did not say that the Bill would help to secure the release of the hostages and he certainly did not say that
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  it would help to restrain the United States from further military adventures.
  How does the Bill measure up to those two objectives, which should be important aims of British foreign policy? I do not think that any hon. Member who takes part in the debate will deny that sanctions by a few countries against another will be almost completely ineffective in practical terms, whatever their psychological impact.
  Sanctions are likely to be opposed by a number of States in the area. As a member of the Foreign Affairs Select Committee, I have just returned from that part of the world. We were discussing the Russian invasion of Afghanistan, but we naturally took the opportunity to discuss with politicians, officials and business men the possibility of sanctions against Iran and a possible blockade of that country.
  It is clear from talking to people on the spot that there is no way in which sanctions themselves can possibly have any real influence on securing the release of the hostages. Sanctions by themselves will soon be seen to be ineffective. There will then be a strong temptation for the United States to indulge in a sea blockade of Iran. That will require very little further action by us or the United States. The United States already has a large naval presence in the area. It will be easy to mount a sea blockade.
  Even sanctions, reinforced by a sea blockade, are not likely to be effective. As has been stated during the debate, a great deal of smuggling already takes place across the Gulf from Dubai into Iran, even before sanctions are introduced, merely because the regime in Iran is letting the economy run down. There is still a great deal of money around. That money is being used to obtain consumer goods that are easily evading customs regulations. The Gulf has a long history of smuggling over the centuries. Sanctions and a blockade will help create a few more millionaires in an area already over-populated by millionaires.
  A blockade will be needed quickly to reinforce sanctions if they are introduced. It is clear that such a blockade will be extremely difficult to operate. Under the terms of the Bill, only goods that are sent to Iran in pursuance of a new contract can be blockaded, whereas

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  goods sent to Iran in pursuance of an old contract, if I may use the expression, will be allowed through. One can imagine the confusion and the difficulties that will arise.
  Sanctions, reinforced by a sea blockade, are likely to be counter productive, not merely in terms in which hon. Members have already spoken, but in terms of strengthening the revolutionary and the nationalistic feelings of the population of Iran and reinforcing the strength of the central Government, which some people might think would be no bad thing. On the other hand, it might well make Iran a much stronger and more determined opponent of the release of the hostages. Furthermore, sanctions, reinforced by a blockade, will be extremely dangerous. I am disappointed that a Foreign Office Minister should not have dwelt on this possibility in the course of his speech.
  There is obviously the risk of some form of armed conflict, since sanctions will be taking place in an area where Iran has fairly strong naval forces. One recalls the Bay of Tonking incident, some years ago in Vietnam, which led to further United States intervention in that unhappy land, with results that are well known. If sanctions are followed by a blockade, there is also a serious risk of disruption of oil supplies to the West. It ought to be a major objective of British and Western foreign policy to ensure that these are not interrupted or disrupted.
  Last, but by no means least, sanctions, followed by a blockade, will introduce a further destabilising factor into an area that has already been seriously destabilised by the Russian invasion of Afghanistan, by the events in Iran and by the various border disputes, particularly between Iraq and Iran. The only nation that will gain any advantage from such further destabilisation will be the Soviet Union, and not Britain or the Western Alliance.
  Mr. Hurd: Does the hon. Gentleman accept that the pressures on the United States Administration for some kind of military action, the disadvantages of which he has been putting lucidly, will be very much greater and arise very much more quickly if we rebuff the request incorporated in the Bill?
  Mr. Deakins: I thank the Minister for that intervention, because it coincides with the next point that I wish to make. The second objective of British foreign policy should be to restrain the United States from further military adventures. I take the hon. Gentleman's point. How do we restrain the Americans? Had the abortive rescue attempt not taken place when it did—here I take the point made by the right hon. Member for Down, South (Mr. Powell) about its appalling timing immediately after the EEC countries had agreed to sanctions—one would have been prepared to look at a Bill on sanctions, preferably under United Nations auspices, as a means of restraining the United States. The United States has already shown that it was not restrained from making the abortive rescue attempt by the fact that there had already been agreement among the EEC countries to help by supporting sanctions.
  Surely sanctions, if they go through, will be seen as a half-hearted, meaningless charade. Is that not likely to strengthen the feelings of frustration and impotence in the United States and lead to an explosion of feeling to be expressed, perhaps, in the form of further unforeseen military adventures? Surely the time to say "No" is at the top of the slippery slope, not half-way down it.
  In the brief 10-year period during which I have been a Member of this House I cannot recall a more ludicrous proposition being put forward by a Government of any party. The Government are seriously embarrassed by having to bring the Bill forward. We can help them and save them from further embarrassment by rejecting it in the Lobbies tonight.
  9.7 pm
  Mr. Peter Temple-Morris: The hon. Member for Waltham Forest (Mr. Deakins) delivered an interesting and enjoyable speech. He outlined two factors in the main divisions of his speech which are central to what we are discussing, namely, the fear of military action—my hon. Friend the Minister of State dealt with that—and the need to restrain the United States. As I understood my hon. Friend's speech, it was a plea—at times almost a desperate plea—to this House on somewhat weak ground, not of the Government's choosing, to remain in a position where we can influence—he used that

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  word repeatedly—the United States of America.
  There is no question at the moment of military action, and the Government's position has been made very clear. There is a feeling, probably on both sides of the House—although no one is in complete agreement and we are all in the Isaiah A and Isaiah B situation—that the strength of public pressure in the United States is such that if that country is let down by its Western Allies when someone is cocking a snook at it, the most powerful nation in the world, that could lead to extreme action. I therefore fundamentally disagree with the conclusion reached by the hon. Member for Waltham Forest, on the ground that my hon. Friend the Minister of State pointed out to him. This is a vital and central point, and is one of the reasons why I support the Bill, although when I get to Isaiah B I may very well say a lot about it with which the hon. Member for Waltham Forest will agree.
  I support the Bill on the ground of Western Alliance solidarity—nothing more, nothing less. It is important that we have a certain sympathy for the Government here, because this position is not of their making. The House should be sophisticated enough to grasp that. This is not a cheerful occasion or a cheerful Bill, and when we talk about continuity I suggest to the hon. Member for Waltham Forest that this is perhaps the best way in which we can get the Americans off the sort of hook that he feels will lead them into military action. That is another substantial reason why I support this measure, although I dislike it as much as many other hon. Members do.
  I reiterate, in dealing with the solidarity argument that feeling in America is extremely intense. As we sit or stand here making our contributions, we must surely feel for them in their time of trial. The feeling that I have spoken of is expressed through the whole range of American society, from students to pensioners. The United States—a nation that has gone through the traumas of Vietnam—is now, suddenly, more potentially aggressive than it has been for many years. We should take note of that. There is the added fact that if we ignore the Americans at this time—quite apart from influencing them—they may
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  well say "Europe can look after itself. We are not interested. We will look after ourselves." We should realise how utterly dependent we have been upon the United States since the Second World War.
  It is no use finessing the situation with luxurious arguments such as those put forward by the right hon. Member for Down, South (Mr. Powell) about police pistols in Northern Ireland, lamentable though the electoral conduct of the Americans has been over that issue. We are in a different league here.
  Having dealt with the possibility of more violent action resulting from the present situation, there is another point that we should bear in mind when we decide how we proceed with this measure and when we consider the solidarity argument and the Americans. We must bear in mind that the status of America in the world is not riding high at the moment. That is a large measure of the trouble in which we find ourselves, though we are not responsible for America's status. America's status is its own problem.
  However, at the end of the day we will suffer if America is dragged down. America will become the laughing stock of every bazaar in Iran and the Middle East—particularly in the developing world—if it cannot, to a reasonable extent, bring its Western Allies with it on this issue. If its Western Allies were not to go along with America, that would diminish its power to a tremendous extent. It is all very well for hon. Members below the Gangway to laugh. They are as dependent upon the protection of that power as is any Conservative Member.
  Having dealt with my reasons for supporting the Bill and the price of that support—since nothing in politics is without price—I think that there should, at least, be some further indication from the Government of where we are going in relation to Iran and South-West Asia. There has been some indication from my hon. Friend.
  The West in general—and I include the United Kingdom—has been stumbling into situations, with the result that lamentable and not particularly cheerful measures such as this become necessary and where people like myself have to

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  stand up and justify such measures. I do not relish having to do that. It would, therefore, be encouraging if we knew that the seriousness of the overall situation was appreciated. Perhaps the Government Front Bench could furnish that information and perhaps an acknowledgement that we have not got it right up to now. Perhaps we can demonstrate a determination—which the Americans will agree with as much as anyone else—that we intend to get it right in future.
  We are now getting the worst of all worlds in relation to Iran. This Bill is an example of that. We have spent the time since the Iranian revolution—in particular since the taking of the hostages at the beginning of November—in supporting the moderate elements in Iran. That has been the whole purport of Western policy, and as I understand it, it has been our policy to encourage the Americans in a moderate course.
  We do not need to discuss the sequence again but suddenly, almost in a flash at Easter, that whole policy was undermined as we went through the gamut of sanctions, involving Europe in support of those sanctions, the rescue bid and now this Bill.
  Having said that we are getting the worst of all worlds, having lost the opportunity and proper timing for strong action, and just when the moderate course—I did not always support that course—was yielding dividends, we are immediately plunged into measures of the sort that have brought us here today.
  I turn to the effect of sanctions. There is a view, which is subscribed to by the Government—the giving of a signal—and it is the prevailing American view, that somehow the moderates, who are weak enough, will be able to point out the realities to the clerics and the more extreme elements in Iran. The view is that sanctions will allow them to argue that because they cannot obtain a particular part for a jeep they must do what the Americans want them to do. The two sanctions that would hurt them most are excluded. I refer to food and medical supplies. The sanctions planned by Europe, if this Bill is an indication, will give the Iranians enough avenues for them to exist without undue worry and trouble in spite of full American sanctions. I say that deliberately and I mean it.
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  The long-term effect is also important. Sanctions will widen the considerable gulf between the Iranian revolution and the United States of America. Western Europe is involved in that gulf. They will weaken the moderates and the road to a final solution. If sanctions become successful they will hasten the day of the final Iranian revolution.
  I do not believe that sanctions will be successful. That is one of the reasons why I feel able, on solidarity grounds, to support this measure. It is not as simple as saying that the Iranians will be pushed into the Soviet Union's arms and that there might be great military action. If the revolution is allowed to continue as it is, it will automatically take Iran towards the Soviet sphere of influence without the Russians doing anything. One of the regrettable aspects of the measure is that it shows that there is no overall policy to prevent that happening. That is the seriousness behind the remarks that I address to the Front Bench.
  Mr. Marlow: My hon. Friend is an expert on that part of the world. Does he believe that it would be better for Western influence if it were felt that the attitudes of the United States and Europe were the same? Alternatively, would it be better if there were a distinct view that European policy was different from American policy?
  Mr. Temple-Morris: I appreciate my hon. Friend's question. Ironic as it might sound, underneath there is a desperate call from Washington for Europe to do more in the Middle East and the world at large. Ministers will know that to be so. It is part of the dissatisfaction that is growing because we have sheltered under the American umbrella for a long time. The stage is set for Europe to play an independent and separate role, but within the Western Alliance. That is the only difference between my hon. Friend the Member for Northampton, North (Mr. Marlow) and myself on the issue, and it is a difference of inference.
  It is important that, in solidarity, we not only back the United States but become a more positive influence on the United States. The conduct that brought us here is the subject of much criticism. Europe can perform a real role. It is important that British influence leads to that role and that it is

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  exercised within the Alliance. If we kick America when it has need of us there will be no Alliance in the end. Europe and the Western Alliance without America is as nothing.
  9.20 pm
  Mr. L. R. Fletcher: I find myself in an odd position. I am asked to vote for a Bill which, I am assured by many of its supporters, will not do any damage because it cannot work but will have a restraining influence upon the military proclivities of our major ally in the Western Alliance.
  Quite frankly, such a Bill is in no sense a Bill at all: it is a declaration. Had the Government presented to us a motion declaring our contempt for the political organisation—they are not students, as the Minister well knows—which kidnapped the hostages and still holds them, stating that we condemn that sort of actions and that we as a House support all the attempts, through diplomatic and other means, to bring about their release. I should vote for the Bill. But I might, in return, expect from the great Power that I am told has been protecting me for so many years a resolution passed through both Houses of Congress condemning the terrorists who are tormenting the citizens of a certain part of the United Kingdom, namely, Northern Ireland. Let us have a little tit-for-tat in the Alliance if it is to remain an alliance.
  We have heard a good deal of waffle about how grateful we should be for what the Americans did during the war and what they have done since. In politics, gratitude is an emotion to be encouraged upon occasions. But if I were to allow my actions to be dictated entirely by gratitude, I should have to vote Communist at the next election because 20 million Soviet soldiers died to destroy Nazi Germany. We should not conduct our political discussions in the House in that way and in those terms.
  Why do I call the Bill, as I do contemptuously, a scrap of paper? Because the Minister himself knows quite well that sanctions invariably produce the opposite effects to those intended. We could go through history and pick one or two examples such as the rigid sanctions imposed upon Napoleonic Europe, backed by the most effective naval blockade in
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  history—the wooden walls that guarded every French port. What happened in Napoleonic Europe as a result of that form of sanctions and blockade? Did scientific progress cease? Did the population drop? I expect that it dropped a little after battles. Did the economy collapse? Above all, did the power and authority of Emperor Napoleon diminish by one iota? It did not.
  It is tragic that we continually find soldiers talking more sense than politicians. Sir John Glubb, creator and leader of the Arab Legion, wrote in The Times recently that, when we make war against revolutions, instead of calming them we make them more revolutionary. It happened in Russia in 1917. That could have been a Menshevik revolution. Lenin himself anticipated no more than a bourgeois revolution and had no conception of a leap forward into Communism or Socialism. Outside intervention did its work and produced the State with which we now have to live.
  There are other examples of the denial to people of the means of life, by however small a degree, intensifying the feelings that prompted them to make the revolution in the first place.
  I happen to know a little about Iran. I have not been there recently, but I was there during certain interesting negotiations which were being conducted between the Shah and the leaders of the Soviet Union, to which I shall refer briefly later. However, in Iran we have so confused a revolution that possibly the most intelligent intelligence officer in our employment cannot yet decipher its outlines or predict its outcome. Part of it is revolutionary in the Western sense of the term and talks of Socialism and taking over property and the oil wells, and part of it wants to go back to the thirteenth century and the purity of Islam as it was assumed to be in the thirteenth century. Mullah is against mullah, ayatollah is against ayatollah, party is against party and the last election produced an absolute goulash of a result which will make it impossible for any kind of firm government to operate for a time in Iran.
  But nature abhors a vacuum. Someone must get the tramways running. Someone must keep the sewage moving through the pipes. The apparatus of ordinary life must be maintained. Therefore, public

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  order must inevitably prevail, because it is as much a necessity as food and drink.
  Although I say it with certain reservations—I am inclined to believe that assemblies such as our own, with all the good will in the world, may muck up this process—I expect that revolution gradually to lose its fierce, fanatical Islamic character and simmer down into something like a normal kind of revolution—not very pretty, not manned or staffed by people with whom one would care to go to dinner, but nevertheless running a country in a revolutionary way which is different from the way of the Shah.
  Then we may get a government, and with such a government we may be able to negotiate. When I use the collective pronoun, I do not refer simply to ourselves and the United States, and still less to those who will be voting in the next primary election—with which I do not doubt the Bill has a little to do. I am talking about the world community. I am talking about those States which belong to the United Nations—those international organisations which were listed by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore). They can have something to say and they will be able to get the hostages out.
  That may take a long time. Other American hostages have been held in the Far East. It took a long time to get them out, but in the end they were got out by negotiation with people who were red in tooth and claw, if Conservative Members like that kind of description. If these sanctions were to be applied, if the Bill were to become a reality, and if as a result the Iranians felt "The whole world is against us. Once it was only the Americans, but now it is the whole Western world, and we have done business with them", what do they do? They may say that we supported the Shah. But, even though the Shah was not the worst of all despots, he was certainly no democrat. The Shah might appear to make a good gesture if he sent back some of the money as a first instalment towards the release of the hostages.
  The average Iranian thinks that the whole world is against him. However, he will hear a voice from the North, from comrade Brezhnev. Mr. Brezhnev
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  might even learn the language in order to tell the Iranians that the whole world is not against them and that Russia has never been against them. He might point out that agreements were concluded with the previous Government, in the belief that the Shah had been introducing modernisation and the use of progressive methods.
  I do not wish to be accused of romancing. I have an article that has been written by an Iranian who is deputy to the director of the International Institute for Strategic Studies. The pamphlet deals with the Soviet Union and the Persian Gulf. It lists other trade agreements, and demonstrates that differences of ideology and of religion never interfered with business between the Shah and leaders of the Soviet Union. He pointed out that the Soviet Union had an agreement to pipe Iranian gas which was flaring uselessly into the atmosphere into the Soviet Union and Comecon countries. As some hon. Members may know, there are few better bargainers than hardened Communists.
  In 1975 Iran reached an agreement with West Germany, France, Austria, Czechoslovakia and the Soviet Union to embark on an ambitious project. It was agreed that 13·5 billion cubic metres of Iranian gas should be piped through the Soviet Union into West Germany and other Western countries at less than world prices. It was a great deal. The first stage involved $3 billion. An installation was constructed at Ispahan. No doubt this information is in the Library. It is extremely instructive and shows that the Soviet Union was ready to collaborate with the Shah. It shows that the Soviet Union is ready to collaborate with the Ayatollah if he and his followers are driven to near desperation by the imposition of sanctions.
  Have we not come to a pretty pass if we enact a Bill in the hope that we shall be able to restrain an ally from engaging in military action which may start a chain reaction engulfing the whole world? This legislation is meaningless. We are discussing sanctions that can have no effect. They cannot be applied without a blockade. We are discussing measures that will have the opposite result to that intended. We are talking about words which will not release a single hostage from a cell. Finally, we

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  are talking not about solidarity with our strongest ally but of restraining our strongest ally from military action. Are we in the House of Commons or are we in a lunatic asylum? I sometimes wonder.
  9.35 pm
  Mr. John Biggs-Davison: I think that the whole House has listened with attention to the informed and interesting speech of the hon. Member for Ilkeston (Mr. Fletcher), with whom, some years ago, I travelled in part of the Middle East. Early in his speech, the hon. Gentleman laid it down as a principle that sanctions always produce the opposite effect to that which was intended by those who applied them. I am not quite sure, but I do not think that the hon. Gentleman voted against sanctions against Rhodesia. I did.
  I have not been conspicuously enamoured of economic sanctions. I expressed my opposition to sanctions against Rhodesia even before they were imposed—I am on record—and I was consistent in that point of view, not to my advantage. However, as my hon. Friend the Member of State observed, Iran today offers no comparison with Rhodesia.
  Modern times afford no parallel—perhaps no times in history afford one—for so outrageous and callous a breach of the rules of international law as the seizure and holding captive of the American hostages. As was said so well from the Opposition Front Bench by the right hon. Member for Stepney and Poplar (Mr. Shore), peaceful diplomacy rests on reverence at least for the persons of ambassadors and respect for the missions of foreign States, and the Western Powers—but not only the Western Powers—should stand together to register their repugnance at the flouting of the Vienna convention, which regulates diplomatic relations in this act of international banditry.
  I rather agree with the hon. Member for Ilkeston who said that this is not so much a Bill as a declaration. It is an enabling Bill. By passing it tonight, we shall not be taking any measures of sanctions, but if it is enacted, the Bill will enable Her Majesty's Government to act in concert with Her Majesty's allies, and I hope with other countries as well, in
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  accord with what was decided by the European Foreign Ministers in Brussels on 22 April. I stress the European commitment and European solidarity in the course of action proposed.
  Of course, my hon. Friend the Member for Harrow, Central (Mr. Grant) was quite right when he said that there must be no taking advantage of partners if Orders in Council are laid under the Act—if the Bill becomes an Act.
  Mr. Bruce-Gardyne: My hon. Friend talks about the importance of European solidarity. I think that he will recall that our partners in the Community were equally honour-bound in terms of the observance of sanctions against Rhodesia, but it did not seem to work out that way.
  Mr. Biggs-Davison: The cases are different, as I have said. I hope that there will be European solidarity in this matter.
  It is said that we ought to be chary of supporting the United States because on this side of the Atlantic we stand to lose more by sanctions than would the Americans. In the last decade, Iran became one of the United Kingdom's biggest markets—I think the largest in Asia. I hope that the Minister of State will say something about that in his reply. He may be able to confirm that our trade with Iran has recently been reviving. Now we are being asked to place it in jeopardy, and even to cut it off.
  We on this side of the Atlantic stand to lose more by sanctions. On the other hand, it may be thought strange that 35 years after the end of the Second World War we are still relying on the United States to provide the military protection both of Western Europe—or that part of Europe that is still free—and of interests in the Gulf and the Third world that are more important to Europeans than to Americans. Here I answer the pedantry, the expression of the right hon. Member for Down, South (Mr. Powell), who laid great stress on the narrow boundaries of the North Atlantic Alliance.
  It is an anomaly that we should rely so heavily on American military protection. Why do we do so? We in Western Europe are more productive than the Soviets; we are more advanced in science and technology than the Soviets; and we outnumber them. Nevertheless, we have

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  been readier to will the end of a greater independence within the Alliance than to will the means. The means are rearmament and the sacrifices that that will impose.
  This Bill is required—no one has made any secret of it—by the volatile and emotional state of United States opinion. This Bill is required by the indispensable Alliance, but an alliance runs more than one way. I am glad that the hon. Member for Ilkeston referred to Northern Ireland. The Minister of State, Foreign Office expressed the hope that this measure would gain us influence in Washington. But let him, let the Foreign Office, press for a redress of inequities in our relations. Let them be corrected. Let the Royal Ulster Constabulary be provided with the hand guns that it requires to protect itself and its fellow citizens. Terrorism is terrorism, whether it takes place in an American embassy or in Northern Ireland.
  I repeat that this is an enabling Bill, and I hope that it will not have to be followed by the laying of orders that are harmful to mutual commerce. We are in a moving situation. British soldiers, police, firemen and others have earned the admiration of the House and the world by risking their lives to save Iranian hostages. Tehran should be prepared to listen to London.
  My right hon. Friend the Member for Stafford and Stone (Mr. Fraser) mentioned the Straits of Hormuz. I was there recently, and flew by helicopter quite close to the Soviet warship that always lies in anchor on the edge of the waters of the Sultanate of Oman, to which my right hon. Friend also referred. It may or may not be of comfort to hon. Members to know that the guns in the Soviet ship that I saw were covered up, and that half the ship's company were sunbathing and the other half were playing volleyball. The Straits of Hormuz—the North bank of which is Iranian, of course—are of great importance.
  I certainly commend to the House what was said by my right hon. Friend the Member for Stafford and Stone. A President of the United States, more distinguished than some since, believed in speaking softly and carrying a big stick. Equilibrium in this important region calls for Western maritime and military forces,
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  to which the British and other European navies should contribute. If that be a thick stick, it is no more than is required by the balance of power, and, indeed, the integrity of Iran, which is in danger of disintegration stimulated from the Soviet Union.
  Reverting to the homely adage of President Theodore Roosevelt, I hope that the soft speaking will be left to European and Muslim Governments. I trust that private diplomacy is at work as we debate the Bill this evening and that Her Majesty's Government are enlisting help from friendly Muslim States. Most of them have been appalled by the taking of hostages in Iran. I am not surprised at that.
  I think that I am the only hon. Member in the House who has served an independent Muslim Government. Admittedly, Pakistan is a predominantly sunni rather than shi'a country.
  We have heard a number of generalisations about Islam. It is dangerous to generalise about any of the great religions. Christianity has a Pope. Christianity has the hon. Member for Antrim, North (Rev. Ian Paisley). Similarly, Islam is divided. The hon. Member for Ilkeston correctly spoke of the quarrels in Iran between rival religious leaders.
  Perhaps I could quote a few words by King Hussein:
  "I am deeply disturbed when I see actions in the Muslim and Arab worlds that are totally alien to its teachings. We are taught to protect foreigners and their property, even in a state of war. Foreign emissaries have always been respected and protected. It is the sacred duty of the state and society to do so. I cannot help but conclude that we have been penetrated by alien forces, acting under the guise of Islam. These forces seek to destroy Islam and the strength it gives Muslims to survive against foreign ideologies."
  I have a suspicion that the so-called students in this crime are more amenable to the small but disciplined Tudeh Party, and therefore to Moscow, than to Tehran or even to Qom.
  The USSR, supported by the GDR, vetoed the United Nations Security Council resolution that would have given practical effect to the world organisation's condemnation of the outrage in Tehran. I wonder whether that was wise. Soviet missions abroad would have no special immunity from crimes such as that with which the Bill is intended to deal.

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  Her Majesty's Government have to deal with more legitimate authorities in Iran than those that are being manipulated in Soviet interests. We note the gratitude that has been expressed by President Bani-Sadr to my right hon. Friend the Prime Minister and this country. I trust that dialogue is in process.
  Finally, Britain is no enemy of the Islamic revival. Britain once ruled or protected millions of Muslims. In the post-imperial phase, she should not be too insular to study the good that is in Islam.
  The Christian West should acknowledge part, at least, of the Islamic criticism of Western civilisation. The Christian West understands, as does Islam, that the answer to Marxism is not more materialism. Whatever the House decides tonight, for Iran the consequence of Soviet imperial patronage is apparent in the Horn of Africa, South Yemen and Afghanistan.
  9.50 pm
  Mr. Les Huckfield: I hope that the hon. Member for Epping Forest (Mr. Biggs-Davison) will forgive me if I do not take up his remarks. I shall refrain from doing so to save the time of the House.
  I shall speak briefly on what has not been referred to in great depth so far, namely, the effects of the Bill. I speak from a constituency point of view because I have many constituents who may be grievously affected by the Bill.
  The Minister of State expressed sympathy with the plight of the hostages. I echo those sentiments, and I know that many of my colleagues do so. However, many of us are also concerned about the peace of the world, because we see the policies of President Carter being increasingly pursued and hard-pressed by the policies of Ronald Reagan. The Bill should also be seen in those terms.
  I hope that when the Minister replies he will make it clear that tonight is the night when we decide the issue. The Minister of State referred to various Orders in Council. He carefully concealed the fact that we can debate such orders only after they have been implemented. In other words, once the Bill is enacted the Government have their enabling power. It is only to continue the
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  sanctions and to keep them in force that we need have a debate in the House. I hope that Ministers will make it crystal clear that this is where the debate must take place.
  The Minister for Trade (Mr. Cecil Parkinson): My hon. Friend the Minister of State said that orders will have to be laid before the House before the orders can translate themselves into specific action against specific products. It is extremely difficult to give notice that specific action is to be taken without undermining the whole policy. The, House has the power within 28 days of rejecting the order. It will have the power to have the last word on the order, but it will not be able to have advance notice of the order for the obvious administrative reasons that I have given.
  Mr. Huckfield: The hon. Gentleman is confirming what I feared. If the Bill is enacted, we shall have given the Government their enabling powers. It is only after the Bill's enactment that we shall know what the Government intend to do with it. I hope that the hon. Gentleman will not try to mislead the House on that score. The other thing—[Interruption.] I hope that the hon. Gentleman will not continue with personal references. We are dealing with a serious issue.
  The Minister of State referred to the need by 17 May to make decisive progress on the release of the hostages. I only hope that all our other trading partners who become parties to the agreement are hurrying legislation through their respective Chambers to make similar provision for sanctions to operate in their countries.
  It has been said that it is not the Government's deliberate intention to let trade be delivered into the hands of our trading partners. Many of my hon. Friends fear that we could be caught in that way. It is well known that many of our trading partners, as we have seen from events elsewhere, are expert sanction breakers. I hope that the Government will realise that, although they may want to play fair and may want to get a Bill on the statute book and to implement sanctions, that may not be, and certainly has not been, the attitude of many of our major trading partners.
  If the real issue is the need to secure the release of the hostages, why do

  969
  Ministers spend so much time emphasising that we have to exercise substantial influence in the Alliance? Is that what it is all about? Is it about exercising substantial influence in the Alliance, or is it about the release of the hostages? Many of my hon. Friends feel that the introduction of a Bill of this sort at this moment will have precisely the opposite effect and that it could provide a stimulating rallying call, once the sanctions are applied, for those who are in power in Iran.
  Hon. Members may ask, if the Bill deals only with future contracts, why so many Labour Members are concerned. However, even present contracts have to be renewed. The Government did not mention renewal of contracts. The Minister said that he would deal with the matter but then carefully avoided it. We fear that, even if the Bill is not brought fully into operation, the French will still use it as an excuse to switch a valuable contract from this country to France. That is why we find it difficult to support the Bill.
  The company that I am concerned about was previously called Chrysler and is now called Talbot. Last year's United Kingdom trade with Iran totalled approximately £340 million. The revenue from the Talbot contract with Iran was £150 million. That one contract represents half the United Kingdom trade in Iran, and many of us, particularly in the Coventry area, are concerned about that significant contract.
  The Minister of State perhaps gave the impression that sanctions would take a little time to work through and their effect on industry may be leisurely. That is not so. Immediately sanctions are declared, at least 1,600 workers in the Talbot works at Stoke will be told that their jobs are in jeopardy and will probably have to go. At least 2,000 workers in the Coventry area will suffer the same fate. I recognise that we are dealing with a future contract situation, but if sanctions are made to apply to other contracts that could be the immediate effect.
  Mr. Roy Hughes: Will my hon. Friend also bear in mind that the cars sent to Iran from Coventry go via Newport docks? The Bill could have a
  970
  devastating effect on the future of an area already under major attack as a result of steel closures.
  Mr. Huckfield: My hon. Friend makes an apposite point. His constituents are also involved. When other hon Members study the effects of sanctions, they will realise that their constituents will be similarly affected.
  The Minister will doubtless say that we have only to worry about future contracts, but I am worried about the renewal of present contracts. We have not heard anything about that. The hon. Gentleman said that there is provision in other legislation to introduce the sanctions that we fear. The immediate effect of introducing such sanctions will be that the jobs of 4,000 workers in Coventry are immediately threatened.
  I do not want to deal with all ramifications for this company of sanctions, save to say that 25 per cent. of the revenue of Talbot United Kingdom comes from that contract. It is well known that the French, who almost totally own the company, have said that they will not continue to bale out its losses.
  Mr. Marlow: Does the hon. Gentleman realise that Talbot has sent letters to its suppliers saying that, if its contract with Iran is interfered with, it will stop taking supplies forthwith? The matter is therefore of great concern to other hon. Members.
  Mr. Huckfield: I am grateful to the hon. Gentleman for that helpful information. About 350 suppliers will be immediately at risk, because that is the number of suppliers for the Talbot Stoke engine power train complex. If that means that the French parent company has to consider its attitude to reinvesting in Linwood and the further supplies of cars through Ryton, we might be talking about the possibility, not of 4,000 jobs being in jeopardy but of some 19,000 in the whole of Talbot United Kingdom. On top of that, there are all the other consequent jobs in component and engineering supplies—
  It being Ten o'clock, the debate stood adjourned.
  Motion made, and Question put:—
  That, at this day's sitting, the Iran (Temporary Powers) Bill may be proceeded with,
  though opposed, until Twelve o'clock.—[Lord James Douglas-Hamilton.]
  The House divided: Ayes 197, Noes 36.

  Division No. 289]

  AYES

  [10 p.m.

  Aitken, Jonathan

  Grant, Anthony (Harrow C)

  Page, Richard (SW Hertfordshire)

  Alexander, Richard

  Gray, Hamish

  Parkinson, Cecil

  Aspinwall, Jack

  Greenway, Harry

  Parris, Matthew

  Baker, Nicholas (North Dorset)

  Griffiths, Peter (Portsmouth N)

  Patten, Christopher (Bath)

  Bennett, Sir Frederic (Torbay)

  Grylls, Michael

  Pawsey, James

  Benyon, Thomas (Abingdon)

  Gummer, John Selwyn

  Percival, Sir Ian

  Berry, Hon Anthony

  Hamilton, Hon Archie (Eps'm&Ew'il)

  Price, David (Eastleigh)

  Best, Keith

  Hamilton, Michael (Salisbury)

  Rathbone, Tim

  Bevan, David Gilroy

  Hampson, Dr Keith

  Renton, Tim

  Biggs-Davison, John

  Hannam, John

  Rhodes James, Robert

  Blackburn, John

  Havers, Rt Hon Sir Michael

  Rhys Williams, Sir Brandon

  Blaker, Peter

  Hawksley, Warren

  Rifkind, Malcolm

  Body, Richard

  Heddle, John

  Rippon, Rt Hon Geoffrey

  Bottomley, Peter (Woolwich West)

  Henderson, Barry

  Ross, Stephen (Isle of Wight)

  Bright, Graham

  Higgins, Rt Hon Terence L.

  Rossi, Hugh

  Brinton, Tim

  Hill, James

  Royle, Sir Anthony

  Brittan, Leon

  Hogg, Hon Douglas (Grantham)

  Sainsbury, Hon Timothy

  Brocklebank-Fowler, Christopher

  Holland, Philip (Carlton)

  Shaw, Michael (Scarborough)

  Brooke, Hon Peter

  Hooson, Tom

  Shelton, William (Streatham)

  Brotherton, Michael

  Hordern, Peter

  Shersby, Michael

  Browne, John (Winchester)

  Howells, Geraint

  Silvester, Fred

  Bruce-Gardyne, John

  Hunt, David (Wirral)

  Sims, Roger

  Buchanan-Smith, Hon Alick

  Hunt, John (Ravensbourne)

  Skeet, T. H. H.

  Buck, Antony

  Hurd, Hon Douglas

  Speller, Tony

  Budgen, Nick

  Jenkin, Rt Hon Patrick

  Spicer, Jim (West Dorset)

  Bulmer, Esmond

  Jessel, Toby

  Spicer, Michael (S Worcestershire)

  Butcher, John

  Johnson Smith, Geoffrey

  Squire, Robin

  Canavan, Dennis

  Jopling, Rt Hon Michael

  Stainton, Keith

  Carlisle, John (Luton West)

  Kellett-Bowman, Mrs Elaine

  Stanbrook, Ivor

  Carlisle, Kenneth (Lincoln)

  Lamont, Norman

  Stanley, John

  Carlisle, Rt Hon Mark (Runcorn)

  Latham, Michael

  Steen, Anthony

  Chalker, Mrs. Lynda

  Lawrence, Ivan

  Stevens, Martin

  Chapman, Sydney

  Lee, John

  Stewart, Rt Hon Donald (W Isles)

  Clark, Hon Alan (Plymouth, Sutton)

  Lennox-Boyd, Hon Mark

  Stewart, John (East Renfrewshire)

  Clark, Sir William (Croydon South)

  Lester, Jim (Beeston)

  Stradling Thomas, J.

  Cockeram, Eric

  Lloyd, Ian (Havant & Waterloo)

  Tebbit, Norman

  Colvin, Michael

  Lloyd, Peter (Fareham)

  Temple-Morris, Peter

  Costain, A. P.

  Lyell, Nicholas

  Thatcher, Rt Hon Mrs Margaret

  Cranborne, Viscount

  McCrindle, Robert

  Thomas, Rt Hon Peter (Hendon S)

  Crouch, David

  Macfarlane, Neil

  Thompson, Donald

  Cryer, Bob

  MacGregor, John

  Thorne, Neil (llford South)

  Dean, Paul (North Somerset)

  McQuarrie, Albert

  Townend, John (Bridlington)

  Dorrell, Stephen

  Madel, David

  Trippier, David

  Douglas-Hamilton, Lord James

  Major, John

  van Straubenzee, W. R.

  Dover, Denshore

  Marland, Paul

  Viggers, Peter

  Dunn, Robert (Dartford)

  Marlow, Tony

  Waddington, David

  Dunnett, Jack

  Marten, Neil (Banbury)

  Wakeham, John

  Durant, Tony

  Mather, Carol

  Waldegrave, Hon William

  Eggar, Timothy

  Mawhinney, Dr Brian

  Walker, Rt Hon Peter (Worcester)

  Elliott, Sir William

  Mellor, David

  Walker, Bill (Perth & E Perthshire)

  Eyre, Reginald

  Miller, Hal (Bromsgrove & Redditch)

  Walker-Smith, Rt Hon Sir Derek

  Fairbairn, Nicholas

  Mills, lain (Meriden)

  Waller, Gary

  Fairgrieve, Russell

  Mitchell, David (Basingstoke)

  Ward, John

  Faith, Mrs Sheila

  Moate, Roger

  Warren, Kenneth

  Fenner, Mrs Peggy

  Montgomery, Fergus

  Watson, John

  Finsberg, Geoffrey

  Morrison, Hon Charles (Devizes)

  Wells, Bowen (Hert'rd & Stev'nage)

  Fletcher, Alexander (Edinburgh N)

  Morrison, Hon Peter (City of Chester)

  Wheeler, John

  Fletcher-Cooke, Charles

  Mudd, David

  Wickenden, Keith

  Fookes, Miss Janet

  Murphy, Christopher

  Williams, Delwyn (Montgomery)

  Forman, Nigel

  Myles, David

  Wilson, Gordon (Dundee East)

  Fowler, Rt Hon Norman

  Needham, Richard

  Winterton, Nicholas

  Fox, Marcus

  Neubert, Michael

  Wolfson, Mark

  Gardiner, George (Reigate)

  Newton, Tony

  Garel-Jones, Tristan

  Normanton, Tom

  Goodhew, Victor

  Onslow, Cranley

  TELLERS FOR THE AYES:

  Goodlad, Alastair

  Page, John (Harrow, West)

  Mr. Robert Boscawen and

  Gorst, John

  Page, Rt Hon Sir R. Graham

  Mr. John Cope.

  Gow, Ian

  NOES

  Anderson, Donald

  Dobson, Frank

  Heffer, Eric S.

  Atkinson, Norman (H'gey, Tott'ham)

  Evans, Ioan (Aberdare)

  Huckfield, Les

  Benn, Rt Hon Anthony Wedgwood

  Fletcher, L. R. (Ilkeston)

  Hughes, Roy (Newport)

  Campbell-Savours, Dale

  Golding, John

  Lamond, James

  Crowther, J. S.

  Haynes, Frank

  Leighton, Ronald

  McElhone, Frank

  Rooker, J. W

  Wilson, William (Coventry SE)

  McKay, Allen (Penistone)

  Skinner, Dennis

  Winnick, David

  McNamara, Kevin

  Springs, Leslie

  Woodall, Alec

  Marshall, Dr Edmund (Goole)

  Stallard, A. W.

  Young, David (Bolton East)

  Marshall, Jim (Leicester South)

  Stoddart, David

  Meacher, Michael

  Taylor, Mrs Ann (Bolton West)

  TELLERS FOR THE NOES:

  Miller, Dr M. S. (East Kilbride)

  Tilley, John

  Mr. Andrew F. Bennett and

  Park, George

  Wainwright, Edwin (Dearne Valley)

  Mr. Stan Thorne.

  Penhaligon, David

  Question accordingly agreed to.

IRAN (TEMPORARY POWERS) BILL
Question again proposed, That the Bill be now read a Second time.
Mr. Huckfield: I was trying to convey to the House the sense of urgency and the belief, as I am sure the Minister will agree, that the distinction between present contracts and future contracts is not clear. The impression has been given that many of my constituents need have no worry. Until the legal situation is clarified about what constitutes a breach of contract, I believe that my constituents have every reason to be worried. The House is talking about the possible threat ultimately to 19,000 jobs in the whole of Talbot United Kingdom. We could be talking about the ultimate threat to about 100,000 jobs in component suppliers and distribution. It is a figure of that magnitude.
There is nothing in the Bill about compensation for those affected. I hope that the Minister will refer to the matter.
Mr. Dalyell: Does my hon. Friend accept that much of what he says about Talbot also goes for Leyland vehicles, which has a major factory at Bathgate, and also for Massey-Ferguson?
Mr. Huckfield: My hon. Friend is right. Massey-Ferguson is affected. It also affects my constituents in Coventry. Leyland vehicles is affected. That affects
974
both his constituents and mine, and many others. The more one studies the implications of the Bill, the more worried one becomes.
Mr. Bowen Wells rose—
Mr. Huckfield: I shall not give way to the hon. Gentleman. He does not have a constituency interest, unlike many of my hon. Friends, who are desperately trying to catch your eye, Mr. Deputy Speaker.
This is a serious international situation that calls for a long, cool, in-depth appraisal. It does not call for the kind of hasty reaction implicit in the Bill. The national executive of the Labour Party has already taken the position of opposition to economic sanctions and military intervention. It is the position I take. While there is any risk to the jobs of my constituents I cannot support the Bill. My right hon. Friend the Member for Stepney and Poplar (Mr. Shore) made a genuine and sincere speech and I am sorry that, for the reasons I have outlined, I cannot follow him into his Lobby. Anything that puts the jobs of my constituents at risk, as this Bill does, must attract my opposition as it should attract the opposition of any hon. Member in similar circumstances. My constituents fear the loss of 19,000 jobs without one hostage having been released. That is why I shall oppose the Bill.
10.16 pm
Mr. Mark Lennox-Boyd: I hope that the hon. Member for Nuneaton (Mr. Huckfield) will forgive me if I do not pursue the points that he raised, but we are even shorter of time now than when he commenced his speech, and not entirely through his fault.
I wish to address myself to one or two aspects that have not been considered so far. I accept the need for these sanctions. I have followed all the arguments that have been put and I do not seek to repeat them. But how are we to take the matter a stage further and present the case to the Iranian people and their Government? On the face of the matter there are grounds for serious misgivings. Clearly, sanctions would be against our economic and commercial interests. As the hon. Member for West Lothian (Mr. Dalyell), among other hon. Members, observed, any austerity that might arise for the Iranian people as a result of the imposition of sanctions will be welcomed by the Ayatollah and his followers.
Further, the economic effect of sanctions will have very little weight politically. How, therefore, in the face of these factors, should we seek to present the effect of sanctions to the Iranian Government and people? It is important to answer that question, because it may help us address our minds to the issue as we present it to the people of this country.
As my hon. Friend the Member for Epping Forest (Mr. Biggs-Davison) said, it is wrong to generalise about other religions and other people, but it is a clear and manifest fact, which can be accepted as a valid generalisation, that people in the Middle East generally—I know quite a few—and Iran in particular attach a great deal of importance to loss of face. They more than understand the humiliating loss of face that the American people and Government have suffered as a result of the taking of the hostages, and they will more than understand—whether they respect it is a different matter—the need for allies such as ourselves to stand by our friends in the United States to prevent that humiliating loss of face from going further.
In a sense, in the Bill we are supporting a gesture of defiance—one designed
976
not to bring a regime to its knees but to demonstrate precisely where we stand in a situation such as this. The people of the Middle East and Iran are past-masters at the art of defiance and of biting off their noses to spite their faces. We are practising what they preach, doing precisely what they are capable of doing. When it seems strange to us that we do it, we must not forget that it may not seem so strange to them. In a sense, we are making out not a moral but a material case for sanctions—a case for demonstrating precisely where we stand.
The right hon. Member for Stepney and Poplar (Mr. Shore) touched upon this in his closing remarks when he suggested that we wished to appeal to those of better instinct in Iran. We seek to demonstrate that there are times when all decent people, from all over the world, oppressed by a sense of such deep outrage at events, are persuaded to do things that on the face of it are contrary to their economic immediate self-interests. They are not prepared, and we are not prepared at this time and in these circumstances, to do further business with a people who have offended our sense of what is correct and necessary in diplomatic relations.
We are not seeking to bring down a Government by some commercial weapon. What we seek to do is to extend the art of diplomacy and to give right hon. and hon. Friends in the Foreign Office—and those ambassadors and diplomats who represent us—a case to present in argument with the Iranian Government. It is for that reason that any parallel that has been drawn with the Rhodesian sanctions is inappropriate, because they were, of course, presented on the basis that they were designed to bring down a Government.
Whether sanctions will be effective or not I cannot say, but I believe that they will be much better understood by the Iranians and their Government than we care to think. I also believe that they will be considerably understood by other Governments in the Middle East, particularly by the Saudi Arabian Government. The Saudis fully understand the need to make a moral stand when one feels angry about a specific situation.
Therefore, I welcome the Bill and invite my hon. Friend the Minister of State to consider my points. I ask him

977
to indicate how diplomatic representations, as a result of any sanctions that we impose, will be made and how we will explain our situation. I ask him to bear in mind that when one is dealing with people in a country that at present is in an irrational state, and with a people in turmoil, it is often the unusual argument that may appeal.
10.21 pm
Miss Joan Lestor: I wish to make it perfectly clear, because I disagree profoundly with my hon. Friend the Member for Nuneaton (Mr. Huck-field), that I believe in sanctions in certain circumstances. I supported them all along in relation to Rhodesia, and I shall continue to advocate them in relation to South Africa. I would defend my stand in my constituency, even though I felt that that stand might undermine some of its economic interests.
Having said that, I must also say that what we are dealing with tonight is a new and unusual situation. It may well be, as time progresses, that if we handle it wrongly the situation will not be unique as it perhaps now is in relation to the hostages. For that reason, I believe that it is important that nobody should be too dogmatic. We should weigh up carefully what we are doing.
I listened to the Minister's opening speech. Were I an Iranian, I would not be convinced that we were particularly serious about what we were doing. Were I an American, I would not be convinced that our great Alliance and the fellow feeling that we have for America were particularly strong. I thought that the Minister's speech was rather weak in both respects.
I listened also to the Foreign Secretary on the radio at the weekend. He spoke about the Bill being a political gesture. Gestures are dangerous weapons in politics and should be avoided.
I also believe that despite our outrage and indignation—I fully share the sense of indignation and outrage at the holding of the hostages, which is frightening and horrific—we cannot begin to understand the situation if we start the argument simply from that point. No matter what horror and outrage we and the Americans feel about the taking of the hostages, we cannot begin the argument by saying, as the Americans seem to be
978
saying "We have been grossly and gravely wronged and, therefore, we will do A, B and C in order to redress the balance."
We must look for the beginnings of the problem and, more importantly than anything else, decide that any action that we may take tonight, or in the future, must be calculated to free the hostages. That is what the argument must be about. The issue is not one of getting our own back on Iran or of placating the feelings of America, however outraged those feelings may be. The issue is securing the release of the hostages, if possible without military action and without the shedding of blood. That should be the guide.
I do not have time to trace the history of events in Iran. However, perhaps we should try to explain why Iran has behaved as it has. I do not try to excuse or justify that behaviour. Perhaps if it were said that America and Britain were wrong about Iran it might help us to see through the light and perhaps to eat a little humble pie.
I want to avoid bloodshed, I want the hostages to be free and I want the possibility of such a weapon to be removed from future use. I ask myself what the forces in Iran want. They want the return of the Shah and of some of the assets that left the country with the Shah. Above all, they want recognition of past responsibilities and an acceptance of the role that America has played in Iran's sad history. We should conduct the argument in the context of what has happened in the last 20 years—the involvement of America in putting the Shah back in control and undermining a more democratic Government. If there were an acceptance of the role played by America and, to some extent, by Britain and the way in which we dismissed the horrors that took place there for our own economic interests, it should be possible to talk to Iran and to have some effect.
The way in which we are approaching the problem will convince no one that we are serious. Our approach will not persuade the forces in control in Iran to change their tactics. It is likely to make them feel more outraged and want to dig their heels in. Those in control will probably say "We shall stand alone and you do what you can to us." If we recognise the role of America and Britain in Iran in the past 15 or 20 years, we

979
may unearth the sense of outrage and indignation that the forces in Iran feel towards America and Britain.
When the Government said that they would introduce a Bill to provide sanctions, we were told, in good faith, that it would be necessary if diplomatic measures failed. We were told that the Government wanted no part of military action and that President Carter was anxious for us to join him in his policy. Yet President Carter was planning a rescue attempt. There is a thin line between that and military action. I put it no stronger.
The Lord Privy Seal said that we knew only of the possibility of a rescue attempt. We had no idea of the timing. I accept what he said. However, President Carter knew. To him, sanctions were not an alternative to a rescue attempt.
I am particularly interested and sensitive to the issue because I was a Minister in the Foreign Office when the Diego Garcia base was under discussion. There is now a block on the question whether that base was used in the rescue attempt. That worries me because, as I understand it, the permission of both allies must be forthcoming before the base can be used. If our permission was given, the Government have not been frank with the House. If it was not given and America used the base without asking our permission, that has sad and worrying implications for the use of any other bases that may be jointly shared in this country or in any other part of the world.
If the base was not used—and the report has been neither confirmed nor denied—it would have been more sensible for the Government to tell the House that it was not used and to clear up that area of doubt, which has ugly and dangerous implications for us all until we know the answer.
As I have said, I do not believe that the Bill, if it is intended that the sanctions should work, is strong enough to make an impression. I do not believe that it is serious. Perhaps the Government in America should discuss the possibility, along the lines that I have sketched, of accepting at least some responsibility for the feelings of the Iranians at this time, in such a delicate position. They should involve another Government who are
980
friendly but neutral—possibly Switzerland—who could begin to negotiate along diplomatic lines for the release of the hostages. Without bringing in some other dimension in that way, we are stuck in the present position. I do not see the Bill making any change in that position.
10.32 pm
Mr. William Shelton: I have no doubt that we must support the Bill this evening, for two important reasons—first, the impact of the Bill within Iran and, secondly, the impact of the Bill upon our relations with the United States. On the question of Iran, I am influenced by my personal experiences last year. When the revolution ended in January last year, I was running a company that was owed a considerable amount of money by an Iranian Government organisation. I visited Iran frequently—I was there in June and July of last year The organisation listened to me, but I received no money at all. It was not until I took the sanction of legal action that I received the money, within two or three weeks.
I followed with great interest the remarks of my hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd). I thought that his speech was admirable both in content and in duration, and I agree entirely with what he said about the moral aspect, but I do not think that the House should underestimate the importance of the prospect of economic sanctions against Iran. We accept that sanctions take time to work, if they work at all. Nevertheless—I know them as other hon. Members know them—the Iranians will believe that sanctions will have an impact on them as time goes on, provided that all the Western countries work in unison. Consequently, I believe that sanctions are more likely to help than to hinder in the release of the hostages.
We understand that the foreign Minister, Mr. Qotbzadeh, is a moderate man who wished to have the hostages released and who probably still wishes them to be released. We know also that they will be released if the Ayatollah says that they should be released.
Many hon. Members said that the position in Iran was chaotic, and it is by our standards, but I suspect that if one went to Iran today, although I have not been

981
there for some months, one would find that life was continuing more or less as normal for most people. I suspect that the Sheraton is still open, although probably only on four floors instead of 12. We know that power resides with the Ayatollah Khomeini. Hon. Members may laugh but if the luxury hotels are running probably the Government are running also. That is my experience of that country. There is no doubt that if the Ayatollah Khomeini says that the hostages should be released, they will be released.
Why should Iran be concerned about the prospect of the impact of sanctions? I should like to remind the House of something that I have heard in almost every speech—the fact that Iran has things of considerably more moment on its mind. I refer to the problems associated with Iraq. I remind the House that the Deputy Premier of Iraq, Mr. Tarek Aziz, survived an assassination attempt by an Iranian in April and that the Iranians did not deny that they had been involved. There has also been, more recently, the attempted assassination of Mr. Qotbzadeh in Dubai. Again the Iraqis did not deny that they were involved.
We do not know whether Iraqis were involved in the siege at Princes Gate. We think that they probably were. The Iranians certainly think that they were. I would also point out that Mr. Qotbzadeh, when in the Middle East, stated that all the Arab lands were originally Iranian. Six months ago, I would have said that war between those two countries was extremely unlikely. Today, I think that it is drawing far closer than I would have thought possible. If there is war between those countries, I suppose one would expect the Iraqis to go for Khuzistan. However, The Economist, for what that is worth, thinks that they will go for the islands in the Straits of Hormuz. Either way, I am quite certain that the unity of Iran weighs far more strongly with the Government of Iran—and there is a Government and authority there—than the maintenance of the hostages in the houses, wherever they may be. There is no doubt about that in my mind.
If there is war with Iraq, there will be problems with the Kurds, the Baluchis and the Turkomans, who, I believe, are
982
Sunni Muslims and not Shia Muslims. Therefore, how can one think that the prospect of half a dozen Western Governments imposing sanctions on Iran will not weigh with those whose first priority must be the maintenance of their country?
The second aspect of deep importance is our relationship with the United States. Many of my hon. Friends have said how much we owe to the Alliance. I believe that to be true. I have not been to America recently, but friends who have tell me that it is not just a matter of the politicians in Washington feeling deeply; it is a matter of the people in the streets—in the Mid-West, the South and the far West—feeling deeply. I am quite convinced that if this House rejects the Bill it will cause a wave of isolationism throughout the United States, which may have no major impact but which nevertheless could well be damaging to us. It must be remembered that we rely on the United States for our protection, and have done so for the last 20 or 30 years. We cannot burke that fact. I wish it were not so, but it is.
I quote The Times leader of today, which said:
"The time is ripe for a radical review of strategy within the Alliance. But for that to be possible we have to show that the Alliance still exists".
Therefore, we must pass this legislation.
10.39 pm
Mr. Roy Hughes: Every hon. Member certainly wishes for the early release of the hostages. I am sure that those feelings are manifested throughout the country at the present time. Certainly, I was one of the original signatories to the letter that my hon. Friend the Member for Harlow (Mr. Newens) sent to the Iranian President calling for the release of the hostages. Nevertheless, I profoundly disagree with the provisions in the Bill.
I feel that fresh diplomatic initiatives are needed. Perhaps a group of Muslim countries could agree to intercede and prevail upon the Iranian authorities to achieve a breakthrough in order to secure the release of the hostages. As has been mentioned, the procedures at the United Nations have not yet been exhausted.
One has to face the fact that in Iran America has had its fingers burnt. My right hon. Friend the Member for Stepney

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and Poplar (Mr. Shore) pointed out that this chapter began with the accommodation of the deposed Shah in an American hospital, but the story goes back to much earlier than that—to the time when the Mossadeq regime was ousted by the CIA and, after a military coup, the Shah was eventually restored to power. That is the basic background to the situation.
As The Observer pointed out in a very revealing article yesterday, America already has its hostages in the $8 billion of frozen assets that it holds in American banks, presumably money belonging to the Iranian people.
As has been said many times in this debate, the reality of the situation is that sanctions very rarely work. Imposing sanctions is like cutting off one's nose to spite one's face. That is particularly so when one is dealing with a country such as Iran, which has so much oil and, therefore, so much bargaining power. One thinks of the words of the late Mr. Khrushchev, the Russian leader, who once said that Iran was a rotten apple that would fall into the Soviet Union's lap. Sanctions could do just that job for the Eastern bloc countries. Sanctions could throw Iran economically and politically in that direction.
In his opening remarks, the Minister said that he did not share that point of view, but one notes already how busy are Eastern bloc countries, such as Poland and Romania, in signing oil contracts with Iran and taking advantage of the present predicament of the West.
I turn briefly to our domestic economy. I make no apologies for doing this, because until the intervention of my hon. Friend the Member for Nuneaton (Mr. Huckfield) the debate seemed to have some unreality about it. At present we need all the overseas trade that we can possibly get. Many of the Middle East oil producers need our products and our technology. What is more, they have the money to pay for those essential goods and services. If there is any doubt about that, I refer the House to Hansard and the answer to a question last Tuesday, 6 May, tabled by my hon. Friend the Member for Bury and Radcliffe (Mr. White), which illustrates quite clearly the massive extent of the trade between this country and Middle Eastern oil-producing countries.
Mr. Ivan Lawrence: How does that argument differ from the argument that says that it is very much in our economic interests to trade with South Africa? On what side is the hon. Gentleman in that argument?
Mr. Hughes: We feel that apartheid is essentially a most evil regime. That would be my attitude to South Africa. But we are not debating South Africa tonight, and we know the United Nations attitude towards South Africa in that respect.
This debate is essentially about Iran. One notices that our trade there in 1979 was less than one-third of what it was in 1978. We have a vested interest in restoring stability to that country, and the Bill will do little to help in that respect. Diplomatic initiative is needed at the present time, not trade sanctions.
Unemployment in this country is now over 1½ million and rising. My area in South Wales is pretty devastated at this time. There are 6,000 steel redundancies pending in the Newport area. I said earlier, in my intervention during the speech of my hon. Friend the Member for Nuneaton that Newport docks relied substantially on the car trade with Iran. It is an important financial factor. If that trade were taken away, the effect would be devastating. I ask the Minister what is likely to be the future for this sort of trade if the Bill is passed, and I certainly hope that it will not be passed.
If that sort of trade is allowed to continue and a certain amount of trade—one might say "old trade"—goes ahead and new trade is forbidden, we are still dealing with the Ayatollah Khomeini, and, whatever his merits or demerits, all the world now realises that he is a very determined and stubborn old man. If we start dillydallying in this way under the provisions of the Bill, he could say "Out altogether." That is my forecast of what he is likely to say.
I draw attention to the editorial in The Times this morning. That newspaper is almost always friendly to the Government, but it was pointed out that sanctions will certainly not work quickly. It quoted Dr. Henry Kissinger as saying that he knows no Europeans who believe that sanctions will work. I believe that economic considerations cannot be put to one side. Labour Members must remember that our people essentially will be put out of work.

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I was not impressed by the words of the Minister of State in his opening speech. The veil was lifted on Government policy and there was not very much underneath. I understand the gesture of friendship to the Americans, but we must appreciate that American foreign policy is very erratic at present, particularly because of the forthcoming presidential election. We, as a country, should have the courage to tell the Americans that these sanctions will not work. For those reasons and many others, I cannot support the Bill.
10.50 pm
Mr. Eldon Griffiths: This is a miserable little Bill. I do not like it one bit. But I shall support it for two reasons. First, I can see no other way open to the House of registering our abhorrence at the treatment by the Iranians of the American hostages. We have a duty to take such steps as are open to us to make clear beyond peradventure in Iran and elsewhere that what Iran has done to the American hostages is totally unacceptable. I shall support the Bill, miserable though it is, for that reason.
Secondly, I shall support the Bill, in common with the right hon. Member for Stepney and Poplar (Mr. Shore) and my hon. Friend the Minister of State, because I believe that we owe to the United States this gesture of solidarity. The first speech that I made in the House 16 years ago was on our special relationship. I have never deviated from my belief that there is no security and no prosperity for this nation, or, indeed, for Europe, unless the great republic is committed to our defence and support. I believe that the late Sir Winston Churchill's greatest achievement was not the Battle of Britain but bringing in America to help us to survive. Since that time the American people, in their own interests, perhaps, have remained loyal to the Western Alliance. For that reason above all else, I believe that it is necessary for the House not to slap in the face the American Administration and public in their hour of need.
I believe that our support for the United States should be unmistakable, but it cannot be uncritical or unqualified, and it must be reciprocated. It cannot be unqualified, because many Americans have grave doubt about the policies of
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their own Administration. Indeed, before long that Administration may be changed.
Secondly, I cannot provide unqualified support because the recent track record of the Carter White House and State Department has not led me to believe that their judgment—
Mr. J. Enoch Powell: On a point of order, Mr. Speaker. Is it not out of order for an hon. Member to appear in the House wearing decorations?
Mr. Speaker: It is certainly against all our customs.
Mr. Raymond Whitney: I apologise to the House, Mr. Speaker.
Mr. Speaker: It is against our tradition to sit in the Chamber in that way, but I regret to say that I have seen other hon. Members come in in different styles of dress as well. It is against our custom, and it is a long tradition.
Mr. Griffiths: They do things differently in the American Congress.
I was saying that our support cannot be unqualified, first, because many Americans have reservations about the conduct of foreign policy by the present Administration and may yet change it and, secondly, because the recent track record of that Administration has demonstrated a number of failures of assessment of world affairs which I find lamentable. One need mention only Angola, the Horn of Africa or, indeed, some of the activities of Mr. Brzezinski following the invasion of Afghanistan to conclude that by no means all wisdom is to be found in the State Department or the White House in the judgment of world affairs. That being so, our support cannot be unqualified.
Secondly, I believe that our support cannot go all the way in all circumstances. I should indicate one or two possible limits where our support would have to be withheld.
We could not conduct sanctions against Iran if the cost to this country were greater than it was to Iran. We could not conduct such sanctions if the only result, as my hon. Friend fairly said, was that some of our trade with Iran went to our allies. I look forward to the Government's reply demonstrating that there

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will be a degree of solidarity within the European Community on this matter.
Above all, the United States owes us a measure of reciprocity. It will not be possible to explain to the British people that we should continue to support the United States in this matter if, for example, the United States continues to deny to the Royal Ulster Constabulary the pistols that it needs to carry out its duties in Northern Ireland. On that issue we can look to the United States for a measure of reciprocity. However, I believe that we owe it to the Americans to support them in their hour of need.
I ask my hon. Friend two questions about the diplomatic scene. Is he able to give an assurance that in conveying to the Government of Mr. Bani-Sadr the decision of the Government and of the House of Commons when the Bill is enacted, the British Ambassador will do his utmost to pursue the many diplomatic and unofficial overtures that have been opened between the West and the Government of Mr. Bani-Sadr in recent weeks? I do not ask my hon. Friend to speak in detail. As he rightly said, it is best that these avenues be pursued in private. However, the House is entitled to ask, as the price of passing the Bill, for an assurance that the diplomatic channels that have recently been opened, through Britain and through various persons, both official and others, in the United States are being pursued with the greatest determination.
Secondly, is my hon. Friend able to give the assurance—he came close to it in what he said about the visit to Washington of the Secretary of State for Foreign and Commonwealth Affaire—that he is now confident that between the British Government and the United States there is a ready consultative mechanism that will ensure that we are not taken by surprise should the United States undertake some further vigorous action, be it diplomatic, economic or military? It is not the price of the Alliance that we are informed in advance in detail, because in operational circumstances that may be impossible. However, the House is entitled to an assurance, as the price of the Bill, that the consultative mechanism between Washington and London is now extremely close.
10.57 pm
Mr. David Winnick: I think that the hon. Member for Streatham (Mr. Shelton) should be congratulated, because so far he has been the only hon. Member to show any enthusiasm for the Bill. The hon. Member for Bury St. Edmunds (Mr. Griffiths) described it as a miserable measure. A number of hon. Members on both sides of the Chamber said that they will support the Bill with reluctance. Clearly, they do so without much conviction.
The Minister of State introduced the Bill without conviction. We are told that he is a rising star in the Administration. He has been rehabilitated from his former employment, and I am sure that at No. 10 no mention is made of the person for whom the hon. Gentleman used to work. Although he did his duty, he did not seem able to convince the House that he really believed that it was necessary to introduce this measure.
Like everyone else in the House, I strongly deplore the holding of the hostages. They should be released. The action is wrong. As my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) said, it is certainly wrong in international law. As someone who is pleased that the Shah's regime has been abolished, I take the view that those responsible for holding the hostages have committed a serious error of judgment. They believed that it was necessary to take such action to focus attention on the evils that occurred under the Shah's regime. They wanted to bring world opinion to understand the crimes and the tortures that were carried on under the previous regime in Iran.
Understandable though, all the attention has been focused on the hostages. Nothing could do more to help the present situation and to remove much of the tension in the Middle East than ensuring the hostages' release. I hope that it is clear what I, like my hon. Friends who oppose the Bill, think about the holding of the hostages.
I am opposed to the Bill. I shall vote against it. I hope that many hon. Members on both sides of the House will do so. It is generally accepted that it is a gesture, but it is futile and will do nothing to secure the release of one single

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hostage. It is also harmful. My hon. Friend the Member for Nuneaton (Mr. Huckfield) pointed out the consequences for trade. Many of our constituents will be harmed.
I agree entirely with my hon. Friend the Member for Eton and Slough (Miss Lestor). I do not pretend that I am against sanctions in all circumstances. I supported sanctions against Rhodesia and I support sanctions against South Africa. However, it depends on the circumstances. Sanctions rarely work, but there are special circumstances in which they are justified. They are not justified with regard to Iran.
The Government appear to argue that it is necessary to introduce sanctions in due course, together with our EEC partners, otherwise the United States will resort to military action. It seems likely that sanctions will not work. Will the Americans then say that we have done our best but have been unsuccessful and that they have no alternative left but to use military force?
The Government's clear duty is to warn the American Administration of the dangerous and disastrous consequences if they resort to military action. The Middle East situation is difficult and delicate. However much we deplore the holding of the hostages, there is no justification for the Americans resorting to military force.
We should not lose sight of the fact that much injustice has occurred in Iran. The Government do not say much about what happened in Iran in the past 25 to 27 years. It is important for us to remember that the United States played a most dubious role in that country. Many Iranians wonder why there is so much concern over the hostages when Western Governments expressed no concern during the Shah's regime when crimes and tortures occurred. The regime was supported to the hilt by the United States.
We know that warring factions exist in Iran. There is no love lost among the Left and Right and the various religious factions. However, Iranians are united in believing that the United States played the principal role in making it possible for the Shah to return to power in 1953. Two years before that, when there was hysteria in this country over the nationalisation of oil, there was a great anti-Iranian feeling. That, too, has not been forgotten by the Iranians.
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Many Iranians feel a burning sense of injustice at the wrongs done to them by the United States and many Western countries. What would be the reaction if sanctions were to bite? I agree with the right hon. Member for Down, South (Mr. Powell). If sanctions were effective, the Iranians would become more resilient in their attitude. If sanctions were to be effective, the Iranians, far from giving in, surrendering and releasing the hostages, would be far more likely to take the opposite view and become even more determined to resist the West and hold on to the hostages.
There is no alternative to diplomacy. I know how difficult it has been so far. I understand the frustration of the American Administration in using diplomacy to secure the release of the hostages, but military action will not secure their release. Sanctions will not secure their release. There is no alternative to continued diplomatic efforts at the United Nations, involving the Soviet Union, despite Afghanistan. There is no alternative to doing everything through diplomatic channels, using neutral and Muslim countries and leading Muslim personalities. At the end of the day, only diplomacy will secure the release of the hostages.
11.7 p.m.
Mr. John Bruce-Gardyne: I wish to preface my remarks with something that is almost certainly out of order, Mr. Speaker. We crossed swords on the last occasion on which I was on my feet and you were in the Chair. In retrospect, I believe that whatever the merits of the argument I was wrong in my actions and I wish to apologise to you.
Mr. Speaker: I am much obliged to the hon. Member.
Mr. Bruce-Gardyne: I must congratulate the hon. Member for Walsall, North (Mr. Winnick). I do not think that I have ever heard him make a speech in this House which has not fully convinced me of the wisdom of voting in the opposite direction. But there must be an exception to every rule. I confess that tonight is that one exception.
I have listened carefully and with fascination to right hon. and hon. Members opposite who have expressed deep

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doubts about the effectiveness and good sense of sanctions. Yet these are the same right hon. and hon. Members who trooped through the Lobbies year after year in support of sanctions against Rhodesia. I always opposed sanctions against Rhodesia on two grounds—I believed that they were unenforceable and counter-productive. If that was true of Rhodesia, it is infinitely more true of Persia.
I join with other hon. Members who have expressed abhorrence of the way in which the American hostages have been held captive. That sort of treatment makes any form of international relations impossible and it is right that the international community should denounce and oppose such an action in every sensible way. But the question to which we must address ourselves tonight is whether the propositions involved in the Bill are sensible in the circumstances. No one has suggested that sanctions would automatically spring the hostages; that is a proposition that does not bear a moment's consideration.
I listened with great care to the Minister's arguments. Perhaps his heart was not entirely in his job, and I commend him for that. He argued that we must make an effort or forfeit all influence in the United States. The right hon. Member for Stepney and Poplar (Mr. Shore), in his effective speech, seemed to argue that we should approve the Bill because we must demonstrate our support for the law of nations.
Our friends deserve our counsel and not just our agreement to whatever they propose. If my friend suffers from toothache, tells me that he is minded to blow off his foot in order to cure the pain and says that he expects me to do likewise or else he will jump off a cliff, my taking a pistol and blowing off my foot is not necessarily the course of friendship or the right way to urge counsel upon him.
As for the proposition that we should maintain an influence, we must consider the events of the past few weeks. I believe that the United States was justified in the military action which it attempted, but we have the word of former Secretary of State Vance that at that time he was telling allied Governments that the
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American Government were not minded to indulge in military action and that, therefore, those Governments should proceed with sanctions. Thus we cannot seriously argue that the application of sanctions will guarantee us the benefit of the ear of the United States Government in all circumstances.
I have to ask the right hon. Member for Stepney and Poplar whether it is likely that the application of sanctions will reinforce respect and support for the law of nations. Will that respect and support be reinforced by the sight of some nations, such as ours, honouring sanctions in the letter and the spirit and others honouring them in the breach or by acrimony building up between allies over who is applying proper sanctions and who is not? I doubt it.
There have been many references to the Bill being a gesture, but we have a tradition of enforcing the laws that we pass. Other countries may treat their laws like gestures, but we do not. I fear that if we pass the Bill we shall find that those who trade from this country will be treated with a severity that applies to no others. That would not be conducive to furthering respect for the law of nations.
What will be the effect on the rest of the Muslim world of the imposition of sanctions against Iran? The Muslim world is deeply alarmed and disturbed at what has happened to the American hostages in Tehran and is not remotely sympathetic to that action, but, if the nations of Western Europe invoke trade sanctions against a country which glories in being the centre of Muslim revolution, that is not likely to be conducive to constructive support for the West in the Muslim world.
It has been suggested that we ought to give the Bill a clear passage because it is only an enabling measure.
If we vote for the Bill tonight, we shall miss the last opportunity to express our view in the House of Commons before the chopper of sanctions descends. The right hon. Member for Stepney and Poplar shakes his head, but the fact, as he knows and as the debate has confirmed, is that the order that the Government will be empowered to make will be subject only to retrospective approval in the House. If imposed when the House was in recess,

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it might be months before the House was given an opportunity to debate the matter.
On those grounds, I find myself, with great regret, bound to come to the conclusion that the Bill should not be given a Second Reading.
Mr. Speaker: Mrs. Gwyneth Dun-woody.
Mr. Dalyell: On a point of order, Mr. Speaker. I make not the slightest complaint that some hon. Members were not called, but I put to you that, as a number of hon. Members on both sides wished to speak, you and the Chairman of Ways and Means might see fit to allow a generous selection of amendments, particularly No. 7.
Mr. Speaker: The hon. Gentleman is one of the most ingenious people, not only in this House but in the world. I have nothing to do with the selection of amendments for the Committee stage.
11.17 pm
Mrs. Gwyneth Dunwoody: A number of strains common to all hon. Members have run through the debate. One of the most important, expressed strongly, has been total abhorrence of what has been going on in Iran in relation to the American hostages.
It is helpful to put on record that as a form of political persuasion the incarceration of embassy officials, fulfilling their normal duties, is a method sadly lacking in finesse. It turns against the Iranian nation the justifiable anger of America and encourages the rest of the world to look askance at a Government who do not respect even the minimum international conventions. Until the situation is resolved peaceably, it is impossible to discuss the real problem of the Iranian people and the development of their revolution. The Iranian Government must, and should, be aware, as a result of this debate, that we are concerned that the situation should be ended. They should do everything possible to resolve the situation rapidly.
One equally strong strain running through the debate has been deep unease. The Minister of State, in introducing the Bill, did it little service. He aroused in us considerable qualms about what the Government were trying to do. He said, as far as one could gather, that it was his view, whatever the lacuna and the diffi-
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culties in the Bill, that the real intention was to make a gesture. I must say to him frankly, as my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) stated, that this is the worst possible reason for putting forward a Bill on sanctions. It has been made clear time and again that the House of Commons is not prepared to accept such an argument.
The Bill is an enabling measure, and if the Minister gets the power to bring in orders he must do so because he believes genuinely that sanctions will work. Unlike some of my hon. Friends, I believe that, when one is seeking to apply pressure in a situation such as that which exists in Iran, one must make clear that in no circumstances will one resort to any form of force. The Opposition have made clear that we are opposed totally to any kind of military action. We want to make that clear to our American friends.
If one is to look to a form of pressure that will have some effect, one must look to economic, political or diplomatic pressure. It is vital that during the period of diplomatic talks—I hope that they will take place and that the Americans will seek to return to the Security Council, even at the risk of having their motion vetoed yet again—we shall be doing everything that we can to persuade the Iranians that they do themselves little good and very great harm in not allowing the American diplomats to leave the country. The Iranians must understand that the American diplomats were fulfilling a properly accredited role and that they should be allowed to leave a country in which they are no longer welcome.
The Government obviously have not been prepared to bring forward a proper piece of legislation. The Minister of State was cavalier in his description of the contents of the Bill. He said that clause 1(2) (a) covered future, not existing, contracts. We have an interest in this matter and we want to know what will happen when the renewal of contracts falls due. I hops that the Minister who is to reply will make it clear that he is aware of the implications of this part of the Bill.
The worrying aspect for me was that the Minister of State said, in a light and insouciant way, that subsection (2) (b) would exempt any contract with a bank or other financial institution. He gave a facile reason for that. "We are," he said, "operating existing guidelines." He did

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not seem prepared to make clear what those guidelines were and he gave no justification for the fact that, while some industries will suffer from sanctions, some financial institutions will escape their effect. It would be one of the most bizarre of ironies if the car workers of Coventry had to pay the price of a sanctions order while bankers with heavy involvements in Iran were to escape. I therefore ask the Government to make their intentions clear.
There has been a lot of discussion about the fact that because this is an enabling measure the House would have the right to debate individual sanctions as they arose. Unless some of the amendments that the Opposition will be moving in Committee are accepted, we shall have considerable doubts on that score because, as the Bill stands, some of the sanctions could go through without being fully debated. In the final analysis, that would serve no useful purpose.
The real difficulty about the Bill is that it seems to have been cobbled together in great haste. The implications about the visas for Iranian citizens were brushed aside by the Minister of State as being the responsibility of the Home Secretary. It seems strange to some of us that people coming here to fulfil useful roles—they are frequently members of the Commonwealth coming to work in nursing or teaching or other areas—should find it extraordinarily difficult to get permission to reside in the United Kingdom while people of other nationalities have encountered very few difficulties. We shall want to examine that closely in Committee.
If we are to entertain the idea of putting pressure of any kind on to the Iranian Government, we have the right to discuss the implications with our American colleagues. One of the difficulties foreseen by many hon. Members on both sides of the House in this situation is that when the nine Foreign Ministers came to an agreement to apply economic sanctions there was at that time a clear understanding that this would be their method of offering positive support to the Americans because it was not just an American situation. The incarceration of diplomats is something that should, and must, concern every nation. We cannot carry on inter-
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national affairs if we are no longer able to deal through accredited representatives. Therefore, it was not just a matter that concerned the American nation.
Nevertheless, one has to say that, after that agreement had been reached and before the sanctions Bill was brought before the House of Commons, there was the abortive attempt at rescuing the hostages. I do not criticise those who, under considerable pressure, decided that an attempt of that sort should at least be tried. I think that if we were in a similar situation we should be looking very hard at all sorts of action. I hope that we would resist any such attempt, because I believe that in this situation force is the opposite of the course of action which we would expect to produce practical results.
Mr. Leslie Spriggs (St. Helens): Is my hon. Friend saying, regardless of the consequences for jobs and in the face of the growing unemployment figures, that even if sanctions mean increasing unemployment in this country we should support those sanctions?
Mrs. Dunwoody: I know of my hon. Friend's real concern for his constituency. I hope that he will accept that my concern is equally strong. I have made it clear that that was not what I was saying. I have said that I believe that any sanctions orders which is brought forward that will affect individual industries must be brought under a positive resolution of the House of Commons to allow us to debate it and its effect.
I return to the point that if the Americans find themselves, as they believe, at the end of the road of diplomatic persuasion they must not imagine that they can expect the same sort of support from the British if they move towards any kind of military action.
My hon. Friend the Member for Waltham Forest (Mr. Deakins) said that if we applied sanctions we would have to follow them up with a blockade. I do not believe that that is so. I believe that we must make it clear that international condemnation, diplomatic pressure and continuing talks will produce the results.
I should like to see the newly elected Iranian Parliament given the chance to consider how it would like to handle the

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question. I also believe that if the President of Iran was given the backing of the Ayatollah we could expect to see a far more sensible and practical approach to this delicate and thorny question.
However, we come back to the point that at present the Americans, it seems to me, are not prepared to go back to the United Nations. I would ask them seriously to consider returning to the Security Council. It may be that the Russians at this moment are prepared to think again, because I believe that they understand that their own citizens would not escape the same kind of attack if it were spread throughout the diplomatic community. It may be that the Russians would be prepared to support a new initiative.
Mr. Whitney: Will the hon. Lady give way?
Mrs. Dunwoody: The hon. Member for Wycombe (Mr. Whitney) was not here for the debate. I am sure that he will forgive me. I am cutting into the Minister's time and I think that it would be helpful if we gave the Minister as much time as possible to set out the Government's view. We have not heard it so far in this debate.
Mr. Whitney: Let us hear the hon. Lady's position.
Mrs. Dunwoody: If the hon. Gentleman has any doubts about that, let me put it to him in simple words which I hope he will understand—perhaps in words of one syllable.
I do not believe in military action. I believe that economic and diplomatic pressures should be applied to Iran. If the enabling Bill is given a Second Reading, the Government should accept the responsibility of coming back to the House to debate each order so that it is clear to us all which industries will suffer, why there is no financial bar and why existing contracts will escape the difficulties. I hope that that simple statement of my position will be understood even by the hon. Member for Wycombe.
We have already made it clear that the Bill should be improved by the amendments in the names of the Leader of the Opposition and my right hon. and hon. Friends. Some of the difficult aspects of the Bill need to be clarified. Some of the
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implications must be spelt out. The amendments would do that job for the Government. It is in the interests of all civilised nations to protect the normal intercourse between diplomats and Governments. That must be as true of the Russian Government as it is of any other, The Security Council has an important role and should be brought back into the discussions before too many irrevocable decisions are taken.
The EEC Foreign Ministers must be seen to stand together when they agree to take joint action. I understand that Britain is one of the few nations that has had to introduce specific legislation. Many of our European partners are able to act under existing powers. It would be wrong if we took action which appeared to put us in an isolated position vis-a-vis our colleagues.
The problem involves an unusual and frightening development. The Iranian people are wrong not to be prepared to release the hostages, even if they believe that they have a case because of the difficulties that they encountered under the Shah. They would have a more sympathetic hearing if they took that action immediately. There is no understanding in democratic countries of the view that by taking violent action against people who have no personal responsibility one can gain support for a political position.
The frustrated anger of a powerful nation such as America is only too understandable. It can become dangerous. Whatever can be done to resolve the problem must be done peacefully and preferably as quickly as possible. We shall expect from the Government not the cynical and uneasy pragmatism that we have heard in speeches this evening but a clear commitment that they will do everything that they can reasonably do to secure the release of the unfortunate victims of this nasty little incident.
Any order that relates to subsidiary legislation must be brought to the House before being put into operation. We shall not accept the Government using the powers in the Bill to take decisions in some spheres without full consultation. That is the implication of the widely drawn clauses. We should like the Government to accept our amendments. Our intention is that the powers in the Bill should be used only when the full consent of the Commons has

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been gained and when the House is clear about all the implications so that there is no misunderstanding. A good friend is one who, from time to time, speaks plainly and from a trustworthy affection. Let us make clear our failures—
Mr. Eric S. Heffer: I am sorry to intervene at this stage, but I wish to know what my hon. Friend is advising my hon. Friends to do. Is she saying that we should support the Bill?
Mrs. Dunwoody: I am sorry that my hon. Friend finds the matter so difficult to understand. I shall support the Bill because my right hon. Friend the Member for Stepney and Poplar set out very plainly why—and I am being honest about it—he believed that, even with all the difficulties, he had to fulfil a positive role. If we do not believe in taking military action, and if we do not wish for the sort of difficulties in which we could become involved by an apparent show of force, we must back that with a straightforward application of some form of diplomatic pressure.
The Bill is inadequate, it is badly drafted, and there are many reservations about it, but I shall support it.
11.36 pm
The Minister for Trade (Mr. Cecil Parkinson): I wish to begin my remarks by dealing with one or two of the specific points and questions that have been raised during the course of the debate.
My hon. Friend the Member for Peterborough (Dr. Mawhinney) asked what would be the position of the branches of United States banks in the United Kingdom. Under United Kingdom law, the law could apply to banks, but in practice it would have virtually no application because contracts for banking and financial services are excluded. Under United States law, the law has attempted to require United States banks in the United Kingdom to freeze Iranian assets. That is not covered in the Bill. Iran has brought numerous actions in the courts to have its assets released, and the question is at present sub judice.
The hon. Member for Aberdare (Mr. Evans) asked whether United Kingdom companies with subsidiaries in other countries would be affected by the Bill.
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Broadly speaking, the answer is that it can apply to overseas subsidiaries of United Kingdom companies, but there are limitations on criminal offences.
Dr. Mawhinney: I am grateful to my hon. Friend for his answer. Will he say whether the matter is sub judice in the courts of Britain or in the courts of the United States?
Mr. Parkinson: As I understand the matter, it is sub judice in the courts of Britain. If that is not correct, I shall write to my hon. Friend.
The hon. Member for Swansea, East (Mr. Anderson) was concerned that various member countries of the EEC might have considerable agricultural exports which would not be caught by the Bill. EEC exports to Iran last year totalled only 3 per cent. of EEC exports. Therefore, there should not be any huge exporter of food who would be likely to steal a march on any other member of the EEC.
My hon. Friend the Member for Leominster (Mr. Temple-Morris) said that he supported the Bill but that he had various reservations. He hoped that we would not allow our preoccupation with the hostages to distract us from the need for the West to have a strategy about Russian incursions into various parts of the world. It was for precisely that reason that my right hon. and noble Friend the Foreign Secretary went to Washington. We shall follow up in the NATO councils and in the EEC ministerial meetings our attempts not to allow our strategy to be lost in the detail of this situation.
Various hon. Members asked whether the Japanese Government would be a party to the various agreements. The Japanese Government have been working closely with the Governments of the EEC and are committed to taking parallel steps and parallel measures.
Mr. Dalyell: The Japanese Government have said that only the six major firms in Japan are affected and that the lesser firms are not affected. Therefore, 20 per cent. are not affected. We know perfectly well that the 80 per cent. represented by the six major firms could operate through the lesser firms.
Mr. Parkinson: As I understand it, the Japanese Government have associated themselves very clearly with the decisions

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announced by the EEC Foreign Ministers on 22 April, including those concerning economic sanctions.
My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) said that he hoped that the Bill would not become a substitute for diplomatic action and that diplomatic action would continue. I assure him that diplomatic action in a variety of ways is continuing, even during the course of these discussions.
Various hon. Friends have raised the question of a possible blockade of the Straits of Hormuz. I remind them that when my right hon. Friend the Prime Minister reported to the House on the results of the meetings of Heads of Government in Luxembourg she made it quite clear that in her opinion the use of force, including any attempt to blockade the Straits of Hormuz, would be an extremely grave step and one that should not be taken until all other attempts to solve the problem had failed.
Mr. Julian Amery: I can quite appreciate that none of us wishes to see any military measure adopted except as a last resort, but we really would be pulling the rug out from under the sanctions proposal and the diplomatic machinery if at the end of the day we made it clear that we were not, in the last resort, prepared to use force as well.
Mr. Parkinson: I note what my right hon. Friend has said, but I am sure that he would not expect me to comment on that in discussion of a Bill which enables the Government to take the power to impose economic sanctions. We regard this as a major step, and we would regard any extension of this step as a very grave matter indeed, as my right hon. Friend the Prime Minister made clear on 27 April.
In opening the debate, my hon. Friend the Minister of State, Foreign and Commonwealth Office described the steps which our American allies have taken following the seizure of the hostages more than six months ago, on 4 November. Wherever they have argued their case, they have won the argument. The International Court of Justice at The Hague ordered the release of the hostages. In the Security Council two resolutions condemning the Iranian action and calling for the release of the hostages were passed in December, and a third, which
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would have imposed sanctions, was defeated in January only by the Russian use of the veto.
The truth is that, in seizing the American embassy and the hostages, the Iranian Government have breached the Vienna convention on diplomatic relations, and far from protecting the United States diplomats on their territory, as they were bound to do, they have connived at their seizure and their subsequent detention. The justice of the American case was best underlined by President Bani-Sadr, of all people, during the recent seizure of the Iranian embassy in London, when he reminded us of our obligations to the London hostages and pointed out very forcefully to Her Majesty's Government they were under exactly the same duty as his Government were choosing to ignore. His own reaction was further evidence of the seriousness of the offence which has been committed against the United States and its citizens.
I think that from all quarters of the House tonight we have had confirmation of the fact that, whatever else we disagree about, we are united in deploring this appalling and regrettable seizure. It is indefensible. There is no argument, therefore, either at the International Court or within the international Community, or, indeed, in the House of Commons, that a serious offence has been committed and that prolonged diplomatic efforts over a period of months have failed to produce an answer.
In her statement to the House of 14 April, my right hon. Friend the Prime Minister said:
"The Americans have asked us to consider a wide range of measures. These include applying the economic sanctions that the Russians vetoed at the United Nations in January."—[Official Report, 14 April 1980; Vol. 982, c. 791.]
A similar request was made to all the United States' major allies.
It was against that background, therefore, that the Foreign Ministers of the EEC met on 22 April in Luxembourg and decided on a course of action, to be taken in two stages. First, there was to be immediate political action such as the introduction of visas, the reducing of Iranian embassy staff and an embargo on arms sales. Those were the first immediate political steps to be taken. The Iranians were warned that unless they

1003
changed their ways a further step would be taken. A commitment was made to economic sanctions based on the vetoed Security Council resolution of 13 January. All the countries of the Community committed themselves to taking the necessary powers by 17 May. I stress that that decision was unanimous.
I should like to deal immediately with the rather cynical suggestions which have emerged from various quarters of the House that our allies are not to be trusted in taking this decision. There are no grounds for making that assertion. The Government, in concert with their allies, have committed themselves to taking the powers to impose sanctions. Other Governments have confirmed that they will do the same. A unanimous decision was taken by the Foreign Ministers. The commitment was confirmed in the communique following the meeting of European Heads of Government, attended by our own Prime Minister. Again, the decision on that occasion was unanimous. Therefore, at Foreign Minister and Heads of Government level, members of the EEC have pledged themselves by 17 May to have the power to enforce the economic sanctions envisaged by the vetoed Security Council resolution of January.
Mr. Spriggs: Can the hon. Gentleman say whether the President of the United States consulted the Government prior to lifting the ban on the export of wheat to the Soviet Union because of what happened in Afghanistan?
Mr. Parkinson: I think it is true to say that the Government were informed before that decision was taken.
I was saying that this commitment was made originally on behalf of the British Government by the Foreign Secretary and that it was confirmed by the Prime Minister and the other European Heads of Government. It is to meet that commitment, undertaken by our representatives, that the Government have introduced the Bill. In all this we have been acting in unison with our partners in the Community, and we intend to ensure that that remains the case. We are also in close touch with Japan, Canada, Australia and New Zealand, which are taking similar steps.
My hon. Friend the Member for Epping Forest (Mr. Biggs-Davison) asked
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about the value of our exports to Iran. In 1979, our exports amounted to £232 million. In the first three months of this year, they were just in excess of £80 million. I might add that other members of the Community are far more dependent on trade with Iran than we are. Virtually no members of the Community are less dependent on Iran for petroleum and petroleum products than we are. Therefore, the commitment which has been made by the other member States is perhaps a more difficult one for some of them than it is for us, even though it is difficult for us.
My hon. Friend pointed out that the Government already had the powers to introduce a ban on the export of goods to Iran. Those powers exist under the Import, Export and Customs Powers (Defence) Act 1939. But there are gaps in the provisions of that Act which the Bill seeks to fill. For instance, that Act does not deal with future service contracts in support of industrial projects or the signature of contracts to supply goods, as distinct from the physical export of goods. The main features of the Bill were outlined by my hon. Friend, but there are three particularly distinctive features. The powers are very specific and are related only to the Iranian crisis. The Government are taking powers to deal with problems that arise from this crisis alone. The Bill deals only with future contracts. It excludes financial contracts.
Mr. Straw: The Minister has correctly said that the Bill deals only with future contracts. Does he not accept that the power that exists in the 1939 Act could be used to thwart the execution of existing contracts? While under the Bill firms would be able to continue to produce goods in this country, they could subsequently be banned from exporting those goods to Iran. Does the Minister accept that it is creating unnecessary uncertainty for the Government to hold out the possibility that they might use the powers under the 1939 Act to ban the shipment of goods under existing contracts?
Mr. Parkinson: In my remarks I hope to make clear to the House the distinction between the powers under the Bill, and the way in which they will be implemented, and the powers under the 1939 Act. I hope that the hon. Gentleman will be patient until I do so.

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Hon. Members have expressed doubts about or have questioned the existence in the Bill of subsection (2)(b) of clause 1, as compared with the resolution which was considered by the Security Council in January. That resolution was concerned with the limitation of new credits or loans, the availability of deposit facilities and related matters. As hon. Members may be aware, restrictions in these areas have been in force since the end of last year on the basis of guidance provided to major British banks. Those arrangements have been working satisfactorily, and in the circumstances we see no merit in contemplating legislative provision. The resolution considered by the Security Council did not contemplate the freezing of financial assets. That is not in question in any way.
Mr. John Parker rose—
Mr. Parkinson: If I may, I wish to get on. I have quite a lot to say.
If the House approves the Bill, the Foreign Secretary will attend the meeting of the EEC Foreign Ministers on 17 May with the Government having the full powers they need to implement the Security Council decision. The decision on the extent to which those powers are used will be taken at that meeting and subsequently translated into action by orders made under the two Acts.
A number of hon. Members asked about the procedure for obtaining parliamentary approval of any orders made by the Government. I should like to tell the House how this will be done. Under the Bill, an order will be laid before the House. Unless it is approved within 28 days, it will lapse. There is no need for the Government to ask the House for approval under the 1939 Act, but the Government intend to do so. The Government will follow a procedure as far as possible parallel to that envisaged by the Bill. The House will have the power to discuss and to decide on any Government proposals or measures taken under either of these two Acts.
The hon. Member for Nuneaton (Mr. Huckfield) spoke about the application of the Bill to the Talbot contract. The Bill applies to future contracts. The Talbot contract is an existing one which would be affected, if at all, by the 1939
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Act. The Government are fully aware of the importance of the contract to the future of the Talbot company and its suppliers. Other member States have similar problems and other Governments are anxious to avoid similar consequences. That is why the Bill puts the emphasis on future contracts. Whether future supplies are under an existing contract or a new contract will depend upon the facts in each case.
Mr. Les Huckfield: Will the hon. Gentleman give way?
Mr. Parkinson: No, I have not time.
The objections to our proposals have fallen into three general categories. First—
Mr. Huckfield: On a point of order, Mr. Speaker. The House has been told by two Ministers that we would have a specific answer—
Mr. Speaker: Order. The hon. Gentleman is making a debating point.
Mr. Parkinson: I have given the hon. Gentleman the answer, but, as he showed earlier, he is not capable of understanding answers when he gets them.
The objections that have been made to our proposals have fallen into three major categories. The first is that they will not work and are a charade. I remind the House that Iranian imports in 1979 were only 30 per cent. of those in 1978. As the Iranian economy has begun to pick up, even slightly, so has the demand for imports from the West. I suggest that to be cut off from supplies under future contracts from the world's major trading countries when one's economy is already operating at a very low level and when a slight increase in demand has shown an increased need for Western exports would be very damaging to the Iranian economy.
I believe that pressure will be noticed and felt. The House underestimates the power of these measures if Iran, as a result of steps taken under the Bill and in concert with our allies, is denied access in future to meet its needs to our market, to Japan, to Canada and to the other countries which I mentioned. The Iranian economy is geared to Western technology and the effect will be serious and will be felt, as the right hon. Member for Stepney and Poplar (Mr. Shore) indicated that he believed.

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Secondly, there was the argument that we should be driving Iran into the arms of the Russians. Again, a number of speakers have doubted that, and so do I. Not only is there a fundamental clash between Communism and Islam, but the Russians and their satellites could not meet Iranian needs. They are constantly proving that they have to turn to the West for supplies and technology. They are in no position to replace us in a market which is geared to supplies from us.
Mr. Huckfield: Will the hon. Gentle-Man give way?
Mr. Parkinson: No.
Thirdly—and this argument has been used regularly—it is argued that, as the Americans did not consult us on their rescue attempt, why should they listen to us in future? In my view, my hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) dealt with this point extremely well. Our allies have asked us for help. If we give that help, we should use the moral edge that that will give us to ensure that our views are heeded and taken into account. A refusal to help at this stage would be a way of guaranteeing that our views are not heeded by our American allies. I believe that they need our advice as much as they need our support.
There has been a great deal of talk about reluctance to implement these measures. I spent a great deal of my time last year travelling round the world trying to boost British trade. No one is more reluctant than I am to see us turning our backs on an important market. My Department will have to administer these sanctions. It is not a job to which we are
looking forward.
In my view, there are three compelling reasons why we must give the Bill a Second Reading. We must drive home to the Iranians the consequences of their actions in seizing and holding the hostages. We are not just emphasising a minor point of principle. We considered this principle so important last week that we were prepared to put at risk the lives of the cream of our security forces to rescue Iranian hostages. This is a matter of prime importance.
The second reason is that our most important and faithful ally is in trouble, has asked us for help and has specified how we can help. I believe that we owe it to the Americans to respond to their request.
The third reason is that with our EEC and other partners we have committed ourselves to take these measures—a commitment made by the Foreign Secretary and repeated by the Prime Minister. We must keep our word.
There has been a great deal of talk about futility. There is a central futility in this whole situation—the futility of the Iranian Government in hanging on to the hostages. Let no one in the house be in any doubt that that is the central futility that we all condemn. The Iranian Government have it in their power to bring this situation to an end. They can release the hostages and return to normal relations with their important trading partners. It is in the interests of Iran and the whole of the West that they do just that as soon as possible.
Question put, That the Bill be now read a Second time:—
The House divided: Ayes 230, Noes 85.

Division No. 290]

AYES

[12 midnight

Alexander, Richard

Braine, Sir Bernard

Clarke, Kenneth (Rushcliffe)

Alton, David

Bright, Graham

Cockeram, Eric

Amery, Rt Hon Julian

Brinton, Tim

Cocks, Rt Hon Michael (Bristol S)

Aspinwall, Jack

Brittan, Leon

Colvin, Michael

Atkins, Robert (Preston North)

Brocklebank-Fowler, Christopher

Cope, John

Baker, Nicholas (North Dorset)

Brotherton, Michael

Costain, A. P.

Benyon, Thomas (Abingdon)

Browne, John (Winchester)

Crouch, David

Benyon, W. (Buckingham)

Buck, Antony

Cunningham George (Islington S)

Berry, Hon Anthony

Budgen, Nick

Davis, Clinton (Hackney Central)

Best, Keith

Bulmer, Esmond

Dean, Paul (North Somerset)

Bevan, David Gilroy

Cadbury, Jocelyn

Dorrell, Stephen

Biffen, Rt Hon John

Carlisle, John (Luton West)

Douglas-Hamilton, Lord James

Biggs-Davison, John

Carlisle, Kenneth (Lincoln)

Dover, Denshore

Blackburn, John

Carlisle, Rt Hon Mark (Runcorn)

Dunn, Robert (Dartford)

Blaker, Peter

Chalker, Mrs. Lynda

Dunnett, Jack

Body, Richard

Chapman, Sydney

Dunwoody, Mrs Gwyneth

Boscawen, Hon Robert

Clark, Hon Alan (Plymouth, Sutton)

Durant, Tony

Bottomley, Peter (Woolwich West)

Clark, Sir William (Croydon South)

Dykes, Hugh

Eggar, Timothy

Le Marchant, Spencer

Robertson, George

Elliott, Sir William

Lennox-Boyd, Hon Mark

Rodgers, Rt Hon William

Eyre, Reginald

Lester, Jim (Beeston)

Roper, John

Fairbairn, Nicholas

Lloyd, Ian (Havant & Waterloo)

Ross, Stephen (Isle of Wight)

Fairgrieve, Russell

Lloyd, Peter (Fareham)

Rossi, Hugh

Faith, Mrs Sheila

Lyell, Nicholas

Rowlands, Ted

Fenner, Mrs Peggy

Lyons, Edward (Bradford West)

Sainsbury, Hon Timothy

Finsberg, Geoffrey

McCrindle, Robert

Shaw, Michael (Scarborough)

Fisher, Sir Nigel

Macfarlane, Nell

Shelton, William (Streatham)

Fletcher, Alexander (Edinburgh N)

MacGregor, John

Shersby, Michael

Fletcher-Cooke, Charles

MacKenzie, Rt Hon Gregor

Shore, Rt Hon Peter (Step and Pop)

Fookes, Miss Janet

Maclennan, Robert

Silvester, Fred

Forman, Nigel

McQuarrie, Albert

Sims, Roger

Fowler, Rt Hon Norman

Madel, David

Skeet, T. H. H.

Fraser, Rt Hon H. (Stafford & St)

Major, John

Speed, Keith

Galbraith, Hon T. G. D.

Marks, Kenneth

Speller, Tony

Gardiner, George (Reigate)

Marland, Paul

Spicer, Jim (West Dorset)

Garel-Jones, Tristan

Marten, Nell (Banbury)

Spicer, Michael (S Worcestershire)

George, Bruce

Mates, Michael

Squire, Robin

Gilbert, Rt Hon Dr John

Mather, Carol

Stainton, Keith

Ginsburg, David

Maude, Rt Hon Angus

Stanbrook, Ivor

Goodhew, Victor

Mawby, Ray

Stanley, John

Goodlad, Alastair

Mawhinney, Dr Brian

Steen, Anthony

Gow, Ian

Maxwell-Hyslop, Robin

Stevens, Martin

Grant, Anthony (Harrow C)

Mellor, David

Stewart, John (East Renfrewshire)

Griffiths, Eldon (Bury St Edmunds)

Meyer, Sir Anthony

Stradling Thomas, J.

Griffiths, Peter (Portsmouth N)

Miller, Hal (Bromsgrove & Redditch)

Tebbit, Norman

Grylls, Michael

Mills, lain (Meriden)

Temple-Morris, Peter

Gummer, John Selwyn

Mills, Peter (West Devon)

Thatcher, Rt Hon Mrs Margaret

Hamilton, Hon Archie (Eps'm&Ew'll)

Moate, Roger

Thomas, Rt Hon Peter (Hendon S)

Hamilton, Michael (Salisbury)

Montgomery, Fergus

Thompson, Donald

Morrison, Hon Charles (Devizes)

Hampson, Dr Keith

Morrison, Hon Peter (City of Chester)

Thorne, Neil (llford South)

Hannam, John

Mudd, David

Tinn, James

Harrison, Rt Hon Walter

Murphy, Christopher

Townend, John (Bridlington)

Havers, Rt Hon Sir Michael

Myles, David

van Straubenzee, W. R.

Hawkins, Paul

Needham, Richard

Varley, Rt Hon Eric G.

Hawksley, Warren

Nelson, Anthony

Viggers, Peter

Heddle, John

Neubert, Michael

Wakeham, John

Henderson, Barry

Newton, Tony

Waldegrave, Hon William

Higgins, Rt Hon Terence L.

Normanton, Tom

Walker, Bill (Perth & E Perthshire)

Hill, James

Ogden, Eric

Walker-Smith, Rt Hon Sir Derek

Hogg, Hon Douglas (Grantham)

Onslow, Cranley

Waller, Gary

Holland, Philip (Carlton)

Owen, Rt Hon Dr David

Ward, John

Hooson, Tom

Page, John (Harrow, West)

Warren, Kenneth

Hordern, Peter

Page, Rt Hon Sir R. Graham

Watson, John

Howells, Geraint

Page, Richard (SW Hertfordshire)

Wellbeloved, James

Hunt, David (Wirral)

Parkinson, Cecil

Wells, Bowen (Hert'rd & Stev'nage)

Hunt, John (Ravensbourne)

Parris, Matthew

Wheeler, John

Hurd, Hon Douglas

Patten, Christopher (Bath)

Whitney, Raymond

Jay, Rt Hon Douglas

Pawsey, James

Wickenden, Keith

Jessel, Toby

Penhaligon, David

Williams, Delwyn (Montgomery)

Johnson Smith, Geoffrey

Percival, Sir Ian

Winterton, Nicholas

Jopling, Rt Hon Michael

Price, David (Eastleigh)

Wolfson, Mark

Kellett-Bowman, Mrs Elaine

Rathbone, Tim

Woolmer, Kenneth

Kershaw, Anthony

Rees, fit Hon Merlyn (Leeds, South)

Young, Sir George (Acton)

Knight, Mrs Jill

Rees, Peter (Dover and Deal)

Lamont, Norman

Renton, Tim

TELLERS FOR THE AYES:

Latham, Michael

Rhodes James, Robert

Mr. Peter Brooke and

Lawrence, Ivan

Rhys Williams, Sir Brandon

Mr. David Waddington.

Lee, John

Ridley, Hon Nicholas

NOES

Allaun, Frank

Dubs, Alfred

Lambie, David

Ashton, Joe

Eastham, Ken

Lamond, James

Atkinson, Norman (H'gey, Tott'ham)

Evans, Ioan (Aberdare)

Leighton, Ronald

Barnett, Guy (Greenwich)

Evans, John (Newton)

Lestor, Miss Joan (Eton & Slough)

Benn, Rt Hon Anthony Wedgwood

Faulds, Andrew

McElhone, Frank

Bennett, Andrew (Stockport N)

Foot, Rt Hon Michael

McKay, Allen (Penistone)

Bruce-Gardyne, John

Freeson, Rt Hon Reginald

McKelvey, William

Buchan, Norman

Garrett, John (Norwich S)

McNamara, Kevin

Callaghan, Jim (Middleton & P)

Golding, John

Marshall, Dr Edmund (Goole)

Campbell-Savours, Dale

Graham, Ted

Marshall, Jim (Leicester South)

Canavan, Dennis

Hardy, Peter

Maxton, John

Carter-Jones, Lewis

Hart, Rt Hon Dame Judith

Meacher, Michael

Cook, Robin F.

Hattersley, Rt Hon Roy

Mikardo, Ian

Crowther, J. S.

Haynes, Frank

Mitchell, R. C. (Soton, Itchen)

Cryer, Bob

Healey, Rt Hon Denis

Molyneaux, James

Dalyell, Tam

Heffer, Eric S.

Morton, George

Davis, Terry (B'rm'ham, Stechford)

Hogg, Norman (E Dunbartonshire)

Newens, Stanley

Deakins, Eric

Holland, Stuart (L'beth, Vauxhall)

Orme, Rt Hon Stanley

Dobson, Frank

Hooley, Frank

Palmer, Arthur

Dormand, Jack

Huckfield, Les

Park, George

Douglas-Mann, Bruce

Hughes, Roy (Newport)

Pavitt, Laurie

1010

1011

Pendry, Tom

Silverman, Julius

Taylor, Mrs Ann (Bolton West)

Powell, RI Hon J. Enoch (S Down)

Skinner, Dennis

Thorne, Stan (Preston South)

Race, Reg

Snape, Peter

Tilley, John

Radice, Giles

Soley, Clive

Wilson, William (Coventry SE)

Richardson, Jo

Spearing, Nigel

Roberts, Ernest (Hackney North)

Spriggs, Leslie

TELLERS FOR THE NOES:

Rooker, J. W.

Stallard, A. W.

Mr. David Winnick and

Ross, Ernest (Dundee West)

Stoddart, David

Mr. Philip Whitehead.

Silkin, Rt Hon John (Deptford)

Straw, Jack

Question accordingly agreed to.
Bill read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Newton.]
Committee this day.

POLICE (MANNING, EFFICIENCY AND MORALE)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Newton.]
12.12 am
Mr. Ivor Stanbrook: As everyone who has had experience of police forces overseas well knows, our police are the finest in the world—not only because of the individual character of the average British policeman but because of his sturdiness and honesty, and because of the high professional standards of the force, as exemplified last week in the incident at Princes Gate. Therefore, one might think that their high professional reputation would protect them from mindless and politically motivated hostility. But that is not so.
Whatever the source of the criticism, the press and the broadcasting authorities are only too eager to publish sensational allegations of corruption and misconduct made against the police. They do so knowing the inherent unreliability of such stories and the totally unrepresentative nature of such individual cases that are proved. In seeking to sensationalise such stories, the press and media besmirch the good name of the police generally and undermine public confidence in our system of justice. Relatively little prominence was given to the findings of the jury that Jimmy Kelly died in police custody from natural causes, whereas acres of newsprint over many months were devoted to allegations that he was killed by the police. Also, in the aftermath of the Southall riots the press made much of the fact that one demonstrator died from a blow to the head but very little of the fact that in
1012
the same incident nearly 100 policemen were physically attacked and injured.
The effect of all this is to put the police and the Government constantly on the defensive—to explain and to placate criticism, almost to apologise for the fact that the police have to do their duty when, in fact, the Government should be seeking to make law enforcement more effective. They defend the existence of the special patrol group when they should seek to form mobile reserve groups in every city. They create a huge bureaucratic apparatus for the investigation of complaints when they should be getting more men out on the beat. I want to focus attention on those aspects of the police that are more important for their quality and efficiency and more deserving of urgent attention than the comparatively trivial matters that are taken up by the press.
The biggest scandal in police affairs is the pathetic inadequacy of the numbers presently employed. We raise our hands in horror at the appalling increase in the figures of crimes, especially violent crimes, yet we do virtually nothing to increase the numbers of police to cope with it. Since 1960, the total strength of the police in this country has increased by half, but the number of reported indictable—that is, serious—offences has trebled in that time.
For London, where the problem is greatest and where indictable offences have risen astronomically, the figures are appalling. The strength of the Metropolitan Police has remained below 23,000 for the past 50 years. We had 21,020 in 1921 and the number was still only 22,408 in 1977. Yet during that period the total strength of the police outside London rose from 38,498 to 97,560. We have the ridiculous position that the police force whose size has remained virtually static for the past 50 years is also the force for which the Government are directly responsible.
The setting of a figure for the establishment of individual police forces is

1013
pure fantasy. The figure for the establishment in London is particularly unreal. Apart from the fact that it has not been seriously reviewed for 50 years—it stands today at 26,628—it takes no account of the special demands made on London police which are not made on the same scale, or at all, on provincial forces. Public order, race relations, terrorism, hooliganism, Notting Hill carnivals, road and air traffic and tourism make demands on London policemen far greater than those experienced elsewhere, while protection of royalty and visiting Heads of State and VIPs, diplomatic protection and security of Government and parliamentary personnel and buildings are special to London.
It is no wonder, in view of all that, that there are no policemen to go on the beat, yet there is no greater deterrent to crime, no better conciliator of local disputes and no better promoter of race relations than the "bobby" on the beat. We do ourselves great injury by failing to provide for him.
So much for the inherent problem of manpower shortage. What of its effect on the efficiency of the police as a whole? It is not merely because the level of crimes has increased that we are compelled to examine the present force establishments. It is because policing a modern, civilised, highly sophisticated society makes special demands on police manpower which make it impossible to maintain an adequate level in the streets and in the routine role of law enforcement.
The need for an adequate mobile reserve of police officers to deal with sudden demands on police manpower is manifest. Call it a special patrol group or what you will, Mr. Deputy Speaker, the need was made manifest by the Bristol riots. There was in Bristol the most appalling breakdown of law and order seen in this country for many years. As the magazine Police said at the time:
"The long term consequences of those six hours of unbridled lawlessness go far beyond the hundreds of thousands of pounds of damage to property, the stoning and the looting. The issues have ominous significance for all major cities with inner areas like St. Paul's and large concentrations of alienated young blacks. In particular, what happened there is of direct concern to every police force in the country."
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The most significant fact to emerge from what we already know about the Bristol incident is that the original 40 police officers deployed for the raid on the cafe had grown to no more than 70 before the withdrawal took place more than two hours later. Apparently it took four hours after that to get reinforcements.
Fortunately, London is better prepared, but what other police forces have a contingency plan to cope with serious public disorder and a mobile force that they can call upon?
I turn to the effect of shortages of both men and money on the morale of the police. Police morale is not simply a matter of pay. Since the implementation of the excellent Lord Edmund-Davies report, the level of pay of the police is satisfactory. A higher rate would not necessarily fill the vacancies. Morale depends on many things besides pay. There is the question of time off for overtime duty. In some forces, the constraints on expenditure have imposed unreasonable restrictions on the amount of overtime that may be worked. Yet the alternative—time off in lieu of overtime worked—is not available because of the insufficiency of manpower available to cover proper manning levels. The result is that a high proportion of offences goes uninvestigated. In London especially, the burden of responsibility on the police to maintain and enforce the law and to investigate and prosecute crime is beyond their present capacity to sustain. The case load on the CID is enormous and well beyond its present resources.
The evidence exists for all to see—the limit on permissible overtime and the rationing of fuel for patrol cars. Some provincial forces limit their patrol cars to absurdly small distances per day. There axe only small numbers of typists and typewriters available in police stations to cope with mountains of paper work. Police are absent from whole areas of London on occasions on special duty. Everyone knows that it is hard to find a "bobby" on the beat. It is left to retired police officers, such as Sir Robert Mark, to tell the truth, namely, that police numbers are wholly insufficient to cope with all the demands made upon them.
What is the effect of the Government's defence attitude towards the police on police efficiency and morale? I have spoken of the unwillingness of the Government to be positively enthusiastic about

1015
police and to seek ways of promoting their efficiency and welfare. I believe that the Government should seek to amend the law to improve police methods of investigation. For too long, our criminal law and our law of evidence have been slanted in favour of the accused when it should be neutral. This attitude stems from the days of capital punishment. Now that there is no capital punishment, we should set about revising the law to put it in its proper position and balance. There is no need for the so-called right to silence. Juries should be allowed to draw the commonsense inference from an accused's silence. There is no longer any need for the police to abide by the strict terms of the Bankers Books Evidence Act. It should be possible to get access to a bank account, before a prosecution is started and while inquiries are proceeding, on an application to a magistrate without going through the formalities required by the Act.
On the other hand, there are many current attempts to weaken the power of the police. I can refer to at least one—the investigation into the so-called "sus" law that has aroused the concern of many intelligent people who should know better. It is a law that applies nowadays to the petty thief, the pickpocket and the wretched individual who steals from parked cars, handbags or whenever he thinks that no one is looking. It serves a useful purpose. I hope that, whatever the Government decide to do about the "sus" law, the police will retain the right to arrest people reasonably suspected of being about to commit an offence.
Naturally, in a force of more than 100,000 men and women there are bound to be some who spoil the record. There are comparatively few dishonest and unsuitable policemen who should be dealt with strictly. But the scale of the bureaucratic machine, costing £3 million a year and involving 184 officers, that looks into complaints is not justified; nor is the immense palaver that is aroused when an inquiry into corruption or other misconduct is in progress. I ask my hon. and learned Friend the Minister of State to bring Operation Countryman to an early end. Leading counsel should be put on to it, if necessary, the whole time, but the agony should not be prolonged, a moment longer than necessary. It has simply be-
1016
come a vehicle for grievances against the Metropolitan Police and is doing great harm to all police morale.
On the whole, we have a splendid police force that deserves the praise given recently. The Government should support it wholeheartedly in its great battle against crime, violence and lawlessness.
12.25 am
Mr. Eldon Griffiths: I intervene briefly to congratulate my hon. Friend the Member for Orpington (Mr. Stanbrook) on his choice of subject and on the admirable and comprehensive way in which he has dealt with it. I am sure that the Minister will want seriously to consider the many important points that my hon. Friend has raised. I wish to raise just two.
Like my hon. Friend, I believe that we are in the presence of a concerted campaign on the fringes of politics, in the media and occasionally in this House, to denigrate the police service. There have been attempts to depict the police as brutal beaters-up and even killers of persons in custody, as Cossacks deployed by the Government to beat back honest trade unions, as racialists, as corrupters and as Fascists. No organ of opinion in this country has done more to disseminate and endorse these mendacities than the BBC. I want to put it on record that the police resent this mischief from the broadcasting authorities and that the police record in purging themselves of biased and dishonourable police officers is vastly better than the purging conducted by the broadcasting authorities.
This campaign has recently surfaced in some quite specific demands. I list some of them. One is the abolition of the special patrol group. Nearly 100 hon. Members put their signatures to a motion suggesting something like that. Others are to repeal the anti-terrorist Act, clip the wings of MI5, reduce and cut the Special Branch and disband the SAS. All those demands have been made in recent months, and we have recently seen in Princes Gate that if any one of them had been carried through it would have been impossible to have conducted the relief of that siege as effectively and as famously as was done.
Secondly, it is now the fashion to say let us get back to community policing and, of course, we all want that. But with the sheer volume of crime, with the arrival

1017
in our midst of other people's problems that spill over into terror, with the massive demonstrations and occasional racial clashes that happen, it is, regrettably, impossible any longer to keep the peace solely by community policing. There needs to be an availability of mobile forces and of specialists, whether the Fraud Squad or the Diplomatic Protection Squad.
While I totally endorse the proposition that as far as possible we should get officers back on the beat so that they are in close, initimate contact with the citizen and, therefore, able to benefit from his intelligence and his support, I believe that there is no longer any effective way of managing public order and crime without effective, mobile, well-trained and professional squads of police officers, available to be deployed when they are needed.
12.28 am
The Minister of State, Home Office (Mr. Leon Brittan): I welcome, and I am sure that the police service will welcome, the words of support which my hon. Friends the Members for Orpington (Mr. Stanbrook) and Bury St. Edmunds (Mr. Griffiths) have expressed for the way in which the police are responding to the challenge they face. The support given to them in this House is amply deserved and fully justified.
We expect a great deal of our police-We look to them to preserve good order in our society, to prevent crime and detect offenders, to respond to the emergencies and disasters which may be visited on us, and to give aid to those in distress. For all the material progress of society, the burdens on the police have increased, not diminished.
This is an opportunity for me on behalf of the Government to say something of what has been done to make the police service strong enough to meet the increased demands on it. It is, after all, one of our prime responsibilities to ensure the efficiency of the police service. But is is well to emphasise at the outset that good policing, whether it is community policing or not, depends on the community as a whole. The police service is not the Government's police service. It is the people's police service. We have an obligation to the community to maintain the strength and efficiency of the service, but without the support and co-operation of the community, however the manner of
1018
policing is determined, it could not be as effective as it ought to be.
My hon. Friend the Member for Orpington referred to the numerical strength of the police. At the end of March, the total strength of the police service in England and Wales was 114,543. There were 5,342 vacancies, 4·5 per cent. of the total establishment of 119,885. The partial implementation of the Edmund-Davies report on police pay in July 1978 by the previous Administration, the full implementation by the Government when they came to power in May 1979 and the upgrading of the Edmund-Davies scales in September 1979 have completely transformed the police manpower situation.
Although my hon. Friend feels—and I can understand his feeling—that we still do not have enough police, I believe that it is important to put on record the change that has taken place. There was a net gain of 3,714 from July 1978 to April 1979, 1,192 from April 1979 to August 1979 and 1,858 from August 1979 to March 1980—a total net gain since the report of 6,764.
The report had three main effects. It stimulated recruitment, it brought forward more candidates of higher quality so that many forces have been able to raise their standards of entry and reduce losses during the first few months of service, and it encouraged experienced officers to stay on, to qualify for pension and often to the age limit. Before the report, the police service had been losing too many experienced officers who are essential to effective policing. Those that remained now have a valuable contribution to make in training the large numbers of new officers to the standards that we expect of our police.
It is correct to say that vacancies still exist, and they are not evenly distributed. Of the 43 forces, only eight outside London have deficiencies greater than 4 per cent., and of these three have recently had establishment increases. They have not yet had time to recruit the extra police they can now take on. They include some of the major conurbations, like West Midlands and West Yorkshire, but all eight are making progress towards reaching the establishment level. If, as we hope, the present favourable situation continues, all forces outside

1019
London should reach existing establishments within the next 12 months or so.
My hon. Friend rightly pointed out that reaching existing establishment levels is not the end of the matter by any means. In this regard, as in others, we have to pay attention to the need to restrain public expenditure. Therefore, when talking about increasing establishments, we must do so to the extent that is necessary to maintain an acceptable standard of policing. Having said that, it is right to point out that increases of just over 900 were authorised up to March 1980 and further modest but essential increases can be expected in the current financial year.
My hon. Friend specially drew attention to the Metropolitan Police. The Edmund-Davies report made special provision for the London forces and this has considerably helped the Metropolitan Police, which has gained 1,173 men since the report was published. The strength now stands at 22,804. But there are still 3,785 vacancies. Recruitment is now at its highest level ever, and the training school at Hendon is working to full capacity, but it is undoubtedly the case that it will be some time yet before the force reaches its present establishment. That ought to be our first target, and it is certainly one that we very much have in mind.
When examining the effectiveness of the force, one must also examine its size and organisation. With only limited additional resources available, existing resources must be used to best advantage. It is impossible to lay down a standard pattern. Each chief constable, in consultation with his police authority, must work out the best arrangement for the area. Change might be needed in the territorial organisation of the force or in its methods of working. That balance between different types of unit must be considered. The underlying objective is to ensure that police officers are available to serve the community where they are needed and where they can best use their expertise and powers.
The need for the best use of limited resources is perhaps most pressing in the metropolis simply because it is in London that shortage of manpower remains most acute. With my right hon. Friend's support, the Commissioner of
1020
Police of the Metropolis is taking steps to restructure his force to release police officers, where possible, from administrative duties. He has recently completed a review of local policing arrangements, designed largely to make officers available for operational street duty. I am glad to say that in this way the Commissioner expects that in due course as many as 1,200 officers will be redeployed Substantial progress towards this target has already been made. That is an encouraging development, which the House will welcome.
My hon. Friend referred to the situation that arose in Bristol at the time of the serious disturbances there. I agree that it is important to ensure that police forces can rapidly call upon sufficient trained officers to deal with such situations. For that reason, my right hon. Friend announced on 28 April that he was asking senior Home Office officials and Her Majesty's Chief Inspector of Constabulary, in conjunction with the Commissioner of Police of the Metropolis and the Association of Chief Police Officers to examine thoroughly and urgently the arrangements for handling spontaneous public disorder. My right hon. Friend added that he would publish the results of that review. That shows the Government's serious and urgent concern for the points that arise from that aspect of the Bristol disturbances.
My hon. Friend referred to various matters relating to the powers of the police and evidential matters concerned with the trial of criminal cases. Many if not most, fall within the ambit of the Royal Commission on criminal procedure and we shall take those points seriously in our consideration of the Royal Commission's report.
My hon. Friend referred to the criticism of the "sus" law. The use and value attached to that law vary throughout the country. Before a view is taken about the merits of the present law, it is important to have the benefit of inquiries and the report of the Law Commission on the law of attempt. The extent to which the law of attempt can be changed to take account of an act which cannot be the subject of prosecution for attempt is a factor which we shall wish to consider when deciding what changes, if any, should be made to the "sus" law.

1021
Operation Countryman was also mentioned. I accept that an investigation into allegations conducted in that way and on that scale is of concern. I agree that the appropriate course is for it to be concluded as rapidly as possible. I accept the need to take whatever steps are necessary to bring that about, but it is a complicated investigation, and if justice is to be done to the police officers under examination as much as anyone else it would be wrong to seek to bring it to a precipitate end in a way which did not allow a full investigation to proceed in the right way.
I take note of the comments about complaints against the police. It would be surprising if the morale of officers against whom complaints were made was
1022
not affected when the complaint was trivial, malicious or politically motivated. One must also take into account that the investigation of some complaints involves a lengthy process, and it is discouraging for an officer if he or his colleagues are subject to such investigation, especially if suspension is necessary. The police recognise—
The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at eighteen minutes to One o'clock.

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

TURNHOUSE AERODROME: CAR PARK
Lord KILMANY: 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 it is intended to build a covered car park for the use of passengers embarking at Turnhouse aerodrome Edinburgh either free of charge or on payment of a charge.
Lord TREFGARNE: My Lords, this is a matter for the British Airports Authority. I will draw the noble Lord's Question to their attention.
Lord KILMANY: My Lords, I thank my noble friend for his rather cautious reply. Is it not the fact that Her Majesty's Government still have influence in these affairs? Would he himself not agree that
2
such a car park would be very much welcomed by passengers on the aerodrome, especially in wet weather, and, indeed, more so when there is snow forecast, and that many of these passengers would be perfectly prepared to pay a substantial sum for that convenience?
Lord TREFGARNE: My Lords, the Government's influence in this matter, as my noble friend described it, is very strictly limited, because Parliament has put responsibility for these matters upon the British Airports Authority. They will wish to proceed with the proposal which my noble friend described only when they can see it earning a proper return, and I must tell my noble friend that I think that is unlikely. But I certainly agree that it would be desirable from the point of view that my noble friend described.

DR. UGARTE'S VISIT
2.38 p.m.
Lord MERRIVALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement about the recent official visit to this country of Dr. Delfin Ugarte Centurion, Minister of Industry and Commerce of the Republic of Paraguay.
Lord TREFGARNE: My Lords, Dr. Ugarte visited the United Kingdom at the invitation of the British Overseas Trade Board. His visit was in the nature of a normal ministerial exchange on commercial relations. In addition to calls on Ministers in the Departments of Trade and Industry, Dr. Ugarte met several United Kingdom companies, banks and institutions interested in trade with Paraguay.
Lord MERRIVALE: My Lords, I thank my noble friend the Minister for that reply. Would he not agree that Paraguay, a friendly Latin American country with a stable and representative democracy, and with increasing economic and social development, deserves special attention on the part of Her Majesty's Government and of British industry? Would he not agree, too, that the ECGD should extend very favourable terms to business people here who trade with that country?
Lord TREFGARNE: My Lords, I certainly agree with almost everything that my noble friend has said. The visit of Dr. Ugarte was a most helpful one and we certainly hope that British companies will take advantage of the opportunities now offering.

"THE DAY OF PROTEST"
2.40 p.m.
Baroness SHARPLES: 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 steps they are taking to encourage voluntary effort to minimise the inconvenience that will be caused to the public on 14th May.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, the President of the Confederation of British Industry has urged firms to make clear that they will keep premises open for work as usual on 14th May, make alternative transport arrangements where necessary, encourage car sharing and provide car parking at workplaces. I have no doubt that people will use their initiative and common
4
sense. The Government have made clear that all employees who wish to work on 14th May have a right to do so and there are increasing indications that many will, in fact, be working normally.
Baroness SHARPLES: My Lords, I thank my noble friend for that reply. Could he perhaps go a little further, and could Her Majesty's Government actively encourage car sharing on a wide basis?
The Earl of GOWRIE: My Lords, I understand that my right honourable friend the Minister of Transport will be making a Statement later this afternoon. There is, of course, no legal problem about car sharing, provided that car owners and drivers do not seek to make a profit from carrying passengers.
Lord LUCAS of CHILWORTH: My Lords, will Her Majesty's Government consider using their best endeavours to have car parking arrangements— that is, for time and money— suspended during that day, so that those who bring cars into London, or any other cities, with passengers are not put to too much inconvenience or undue expense?
The Earl of GOWRIE: My Lords, special car parks will be opened and arrangements are being made to keep radial routes open. It is not the intention at this stage to lift car parking restrictions, but I take my noble friend's point, and precise arrangements on the day will, as always, be a matter for police discretion.
Lord ORR-EWING: My Lords, would my noble friend give some assurance to certain people who are a little anxious as to whether their insurance covers passengers whom they may pick up as they travel to work? Is this covered in normal practice?
The Earl of GOWRIE: My Lords, that depends on the precise insurance arrangements which individuals have with their own companies. There is no blanket arrangement there, because some individuals are insured only for third party. So everybody should be most careful to check up as to what their precise insurance arrangements are.
Lord LEATHERLAND: My Lords, will the Minister express the view that, in

5
the picking up of pedestrians by motor cars, the principle of sexual equality will be preserved?
The Earl of GOWRIE: My Lords, the Government are anxious to see that men are as well treated as women at all times.
2.42 p.m.
Viscount ST. DAVIDS: 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 the form of political strike being suggested for 14th May is protected by law as a trade dispute; and, if not, whether any firm or individual put to loss or damage by this action may recover damages from individuals or unions concerned.
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, the definition of "trade dispute" is contained in Section 29 of the Trade Union and Labour Relations Act 1974, and its interpretation and application is a matters for the courts. If the proposed action is not in contemplation or furtherance of a trade dispute within the statutory definition, then subject to the statutory immunity conferred by Section 14 of the same Act liability for damages would be determined by reference to the common law.
Viscount ST. DAVIDS: My Lords, I thank the noble and learned Lord for that Answer. I wonder whether he can tell me what remedy a private individual has in a case of this kind? I am thinking in particular of those who lose a day's work or who are forced to take expensive transport and to book expensive hotel rooms, and of those who are otherwise disadvantaged. Since the Trades Union Congress themselves promoted this day of action and set the date for it, can the noble and learned Lord tell me whether they are in the position of being liable and able to be sued?
The LORD CHANCELLOR: My Lords, I would respectfully think that it is undesirable for the Lord Chancellor to give legal advice about matters which might be justiciable in the courts. I would recommend any such private individual
6
to consult a solicitor, with legal advice and assistance under the Act of 1972 if so entitled.

ANGLO-LIBYAN RELATIONS
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend Lord Trefgarne will repeat a Statement being made in another place on Anglo-Libyan relations.

INDUSTRY BILL
2.45 p.m.
Report received.
Clause 1 [Functions of the Board and Agencies]:
Lord ROCHESTER moved Amendment No. 1:
Page 1, line 14, at end insert—
(" (g) in undertakings for which the Board is responsible, promoting the disclosure by management to employee representatives of information aimed at achieving a shared understanding of the relationship between productivity, investment, prices, pay and employment. ")
The noble Lord said: My Lords, I think that I first owe the House an apology for not having given notice at the Committee stage of the Bill of an intention to move an amendment of this kind at Report. What happened was quite simple. To my surprise, an amendment from the Opposition Front Bench to leave out Clause 19 of the Bill, which prescribes that the sections of the 1975 Industry Act relating to planning agreements and disclosure of information by companies should cease to have effect, was not moved. When, immediately afterwards, the Question was put, That the clause stand part of the Bill, I should of course have leapt to my feet and said what I had in mind, but I am afraid that my slow wits grasped what was happening too slowly and I allowed the opportunity to pass. It then seemed that the best thing I could do was to move at Report this amendment standing in the names of my noble friend Lady Seear, who is sorry that she cannot now be present this afternoon, and myself, and to which the noble Lord, Lord Bruce of Donington,

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and the noble Lord, Lord Kilmarnock, have been kind enough to lend their names.
I should make plain that we on these Benches are shedding no tears about the ending of planning agreements. Indeed, I think it is correct to say that not one of these has been implemented since 1975, not even in the case of Chrysler. Moreover, we do not approve of a statutory requirement that certain information should be disclosed exclusively to trade union representatives. But we do think that as much business information as possible should be given by management to representatives of employees generally, and that in eliminating the relevant sections of the 1975 Industry Act and putting nothing at all in their place the Government have missed a glorious opportunity to help to achieve that desirable objective.
I have been looking back to our discussions on this subject when we debated the Industry Bill, as it then was, in 1975, and I have been reminded that at that time members of the party opposite lent their names to an amendment which I moved, aimed at ensuring that certain information relating to the business of particular undertakings should be disclosed to employee representatives. Now there is a Conservative Government, and I should like to see in this Bill some recognition on their part of the need for employee representatives to receive from management information which would give them a clearer understanding at all levels in an undertaking of how the business is run, the alternative uses to which money can be put and, as this amendment has it,
" the relationship between productivity, investment, prices, pay and employment ".
I believe that nothing could contribute more to an improvement in our industrial performance and, incidentally, to the avoidance of occasions such as next Wednesday's "Day of Action" that we have just been hearing about, than the sharing of information of this kind. If the Government feel able to accept this amendment, that will afford welcome evidence of their consistency and their desire to contribute to stability and continuity of policy in this field.
Instead of moving such an amendment, I could of course have sought to replace Clause 19 of the Bill with new clauses, but that would have given rise to a number of difficulties. It would have been necessary to specify the precise categories of information in place of those set out in the 1975 Act which it would be a statutory requirement for employers to disclose. That in itself, it seemed to me, would have been highly controversial. It would also be necessary to define a number of terms, and the clauses would generally have had to be much longer and more complicated than is needed for the National Enterprise Board to exercise what, in my view, is really a very simple function.
The amendment which I moved in Committee relating to the desirability of the increased involvement of employees in the making of decisions affecting them, sought to make it a function of the board to encourage action having that aim in view, and in replying on that occasion the noble Viscount, Lord Trenchard, questioned whether the word "encouraging" should find a place in legislation of this kind. He said it was in that sense that the Government believed the amendment to be unnecessary. Learning from that experience on this occasion, I have substituted for "encouraging", as your Lordships will see, the word "promoting".
The amendment makes plain that the information should be disclosed to employee representatives, and at this point I should like particularly to stress to noble Lords on the Labour Benches that although in this amendment there is no reference to trade unions, where employee representatives are trade union members, or indeed shop stewards, as in many companies they now are, if my amendment were acted upon they would of course be recipients of the information to be disclosed. By using these words the amendment gives expression to what seems to me to be a minimum requirement. I should like, however, to add that in my view, and I think in the view of my noble friends, the communication process should not end with employee representatives but with briefing groups, at which their present relevant business information should, so far as possible, also be given directly by first-line managers to all those whom they manage.
The amendment refers finally to five items— productivity, investment, prices, pay and employment. The words used are deliberately of a general kind, for I think it would defeat the whole object of the exercise to seek to define them more precisely. It is an understanding of the inescapable relationship between these items that it is so vital for management and employees to share, and, as with the amendment which I moved in Committee earlier, I once again emphasise that this is a matter only of communication and of consultation, not of negotiation, although of course it may have enormous effect on collective bargaining subsequently.
I hope that this time it will not be said that the amendment is unnecessary because people of the calibre of Sir Arthur Knight and his board do not need to be told of the importance of the point. For one thing, if what is here sought is likely to happen anyway, that seems to me to remove any possible objection to its inclusion in the Bill. More positively, I believe this matter is of such significance for our future, especially in medium-sized firms, that form such a large part of British industry, that we need to take every opportunity, including that presented by this Bill, to draw attention to the importance which I do not doubt noble Lords in all parts of the House accord to it. I beg to move.
Lord BRUCE of DONINGTON: My Lords, on behalf of this side of the House I wish to say that we are very pleased to give support to the amendment that has been moved by the noble Lord, Lord Rochester. I have no desire to go over the ground that was covered at the Committee stage when we were dealing with an amendment substantially on these lines, but it is true to say that the amendment itself, if I understood the noble Viscount, Lord Trenchard, aright at the Committee stage, more nearly meets the objections which the noble Viscount might have had to a clause of this kind. As I recall, the noble Viscount expressed some sympathy with the views that were then expressed by the noble Lord, Lord Robbins, who himself objected to the use of the word "involved".
In the Committee stage the noble Viscount seemed to give the impression, if he did not state it outright, that although he thought the subject matter of the
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amendment was admirable in itself, he himself considered that this was a matter that would be far better left to the individual companies as distinct from the NEB. I wonder whether the noble Viscount has had an opportunity to reconsider that in the light of the form that the debate took? The various companies involved are, in the main, new companies. They are companies which have not had a tremendous amount of experience in industrial relations. That obviously does not apply in every case, but for the life of me I cannot see why it should not be said that the board should promote the various sentiments that are expressed in the amendment itself.
Even the existence of this particular clause in the Bill would itself have some effect. It would indicate to those concerned that the NEB after all had the final power of promoting all those particular types of activity. It seems to me that the Government could quite easily accept an amendment of this kind that does not do violence to the main principles enshrined in the Bill, and therefore I am hopeful that the noble Viscount, Lord Trenchard, will indicate that he is prepared to accept the amendment.
Lord KILMARNOCK: My Lords, I should like to rise briefly from this politically neutral terrain to support the amendment to which my name is attached along with those of the noble Lord, Lord Rochester, the noble Baroness, Lady Seear and the noble Lord, Lord Bruce of Donington. Some members of your Lordships' Select Committee on Unemployment recently visited the Northwest of England, and I was lucky enough to be among them. I was tremendously struck by the emphasis laid by the managements we talked to on the importance, in their view, of improving industry-education links. They felt that the academic world was not sufficiently sympathetic to the aims and problems of British manufacturing industry. They felt that much more information about how industry actually works should be included in such school courses as economics and geography. If the desirability of improved communication between industry and schools is accepted, as I think it must be, is it not equally important, if not more so, that such communication should be continued and strengthened

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once the school-leaver actually takes the step of entering industry, at whatever level?
This amendment is a very simple and modest one but I think an important one. It lays upon management none of the elaborate obligations to disclose information specified in the Industry Act 1975, Part VI Sections 28 to 34, which the Government seek to repeal in this Bill. It does not specify that employee representatives must be union officials; it simply enjoins on the rump of the National Enterprise Board and the development agencies that they should promote disclosure by management to employees of information aimed at giving the workforce a better understanding of management policies. In fact, it is a simple recipe for a more open form of government in industry. If manufacturing industry in this country is to have any future at all, we simply have to overcome automatic acceptance that there are two sides of industry. I always thought this was an alarming phrase, not to say an incomprehensible one, and it is all the more alarming if we merely accept it as though it were laid down by some divine law. Anything, even such a modest proposal as this amendment embodies, which helps to promote the idea that management and labour should be on the same side is surely to be encouraged. I therefore very much hope that we shall hear from the noble Viscount, Lord Trenchard, who has these matters so much at heart, that the Government will take an opportunity of showing that on this issue their heart is in the right place.
Lord CAMPBELL of CROY: My Lords, in moving this amendment the noble Lord, Lord Rochester, made reference to support that was given to a somewhat similar amendment in July 1975, nearly five years ago, when we were dealing with the Industry Bill 1975 which became the Industry Act 1975. This is very relevant because Clause 19 of the present Bill has the effect of repealing Sections 28 to 34, the whole machinery, on which we spent three days at Committee stage at that time, dealing with disclosure of information. And this was not a procedure applying only to the National Enterprise Board and bodies within its control; it was to cover the whole of manufacturing industry in this country.
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So that is being taken out, and the noble Lord is suggesting that something like this might go in its place.
I do not know what my noble friend the Minister of State is going to say about this amendment because I have not had a chance to talk to him about it, but I should like to put what the noble Lord, Lord Rochester, said in its context. He rightly said that my noble friends and I supported with our voices and with our votes what he was doing, and he supported some of the similar amendments which we were making. But what we were doing almost five years ago was considering Part IV of that Industry Bill, several clauses, and we were not trying to take out that whole Part of the Bill. Of course, we were regarding our role in this second Chamber, as a revising Chamber, as trying to improve this machinery for disclosure of information which the Government of the day were putting forward. We did not regard it as our role in this House to try to vote out about eight clauses of that Bill, the whole of that Part; we were trying to improve it. But we made it quite clear that we did not think it was necessary; we did not like the procedure which was proposed, but we were trying to make changes, and we were, therefore, supporting these kinds of proposals and also putting forward proposals ourselves.
Since then it seems to me that that machinery has been little used, and I would ask my noble friend the Minister of State to tell me, if he can, how much it was used during the nearly four years after the passing of the Bill while the Labour Government were in office. The machinery had to be activated by a Minister; under Clause 28 a Minister was to serve a preliminary notice, as it was called, when he thought that a certain company should start taking action to provide information. Moreover, under subsection (3) of that clause the Government at the same time had to lay a statement before both Houses of Parliament stating that a preliminary notice had been served.
I have not seen any such statement. I should like to ask my noble friend whether in fact any statements were laid before Parliament during that time and whether the machinery was activated. If I am right in thinking that the machinery which we spent so much time dealing with

13
in this House— both in Committee and on Report, long hours into the night; and I see noble Lords here who were present— was not activated, or was activated very little, it goes to show that this kind of thing was not necessary.
We at the time did not think that it was the best way of trying to solve problems or improve unsatisfactory situations. We all agreed that, while some companies are paragons in this field, others leave a great deal to be desired on questions of disclosure; but we did not think that legislating in the kind of way proposed in Part IV of that Bill, which became the Industry Act 1975, was a sensible way of doing it. It seems that we have been proved to be right, because almost nothing has been done under that Part of the Bill.
I think that puts it into its context. I would add that the proposals we were putting forward during the Committee stage in July 1975 were drafted in order to bring in employee representatives, people who were employed by the company, rather than trade union officials who were not employees of the company, and who indeed in some cases would be receiving information from quite a large number of companies. We were also concerned with the question of commercial confidentiality of information and we found agreement on all sides of the House on that; it was a question of how it could be drafted. Otherwise trade union officials, in the best of faith, unwittingly, without realising the sensitivity of the information, might have discussed among themselves information which was highly confidential and would then go to other rival companies.
That was the background to the discussions on the amendments which were moved at that time, and it was in relation to a system applying to the whole of British manufacturing industry, not confined to the National Enterprise Board, as this is. So I look forward with particular interest to hearing how my noble friend the Minister of State will react to this amendment. Having followed the discussions which took place at Committee stage, when I could not be here, I shall listen with great interest to my noble friend's reaction.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, this amendment has been moved in the most calm and reasonable way, with appeals to reason, by the noble Lords, Lord Rochester, Lord Bruce and Lord Kilmarnock. But I have to say that I am afraid I still believe the view I expressed in the case of a similar amendment, though on consultation rather than on providing information, which was moved by the noble Lord, Lord Rochester, and the noble Baroness, Lady Seear, at Committee stage. That is to say, it is one aspect, a very important aspect, of good business practice. On the question of how the NEB sees its role in relation to its subsidiaries and to making sure that they adopt good practice, I find that Sir Arthur Knight in his chairman's statement quotes his predecessors and says, "I cannot improve upon the statement of my predecessor in his report last year". He goes on to explain, quoting his predecessor:
" The NEB cannot and does not seek to involve itself in the day-to-day management of the companies. That would be to duplicate the management skills which are to be found in the companies ".
He goes on to give as a general philosophy the role of the board of the parent company. The phrases that I used at Committee stage were that they would no doubt give company A or company B a prod or a nudge in a particular direction, which might be to do with industrial relations and man management and might be to do with other vitally important areas of good management. I notice that the noble Lord, Lord Rochester, has changed from the word "encourage" to the word "promote"; but to have it singled out that the NEB is required by the statute book to nudge its companies, I do not believe is necessary, as my noble friend Lord Campbell has said. Nor do I believe that it should be singled out.
We are against putting into statutes a lot of words giving the impression that we expect the NEB, or the Government, or Government agencies to be constantly breathing down the neck of important companies. I believe, if I may say it rather rudely, that nothing is to be gained by putting pious, platitudinous declarations in statutes. If they have a use at all, once there, they will probably be misused by being taken out of context and used at just such a time when perhaps

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the NEB did not want to give a prod in that particular direction.
I am grateful to my noble friend Lord Campbell for explaining the attitude of my party back in 1975. I had indeed guessed that as the revising Chamber, he was obviously aiming to avoid wide-ranging compulsory powers for intervention of various orders, and that this part of such a power did not offend to the same degree. I therefore feel that this is not a necessary amendment. There can be no doubt about the NEB, with a chairman like Sir Arthur Knight, with the record of Courtaulds in the area of labour relations and consultation, in an age today when this really is a platitudinous statement which not one single businessman at any conference would contradict— businessmen reaffirm it all the time. To put this in the statute and thus to give it prominence, without any specific powers, is not a sensible thing to do.
I believe that the business experience of the noble Lord, Lord Rochester, must indeed make him fully aware of the truth of what I am saying. I feel that this is the kind of amendment designed to look good politically and to look as though we wanted to encourage all good actions and to discourage sin. I really do not believe that one gets anywhere by that kind of amendment in a statute, and I ask your Lordships to resist it.
Lord CAMPBELL of CROY: My Lords, before my noble friend sits down, may I say that I know that my questions were put at short notice, and I apologise for not having been able to get in touch with him before, but I have flown from home in Inverness this morning and therefore I have had to come in at rather short notice. If he is able to answer the questions about whether the machinery has ever been used, I should be grateful.
Viscount TRENCHARD: My Lords, I apologise to my noble friend. We have an amendment later to leave out Clause 19, which may be moved, and which centres on planning agreements as a whole. I suspect that this subject will come up again then. By then I shall certainly be able to answer the question of whether the machinery that my noble friend Lord Campbell mentioned was activated. What I know now is that only two planning
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agreements were ever made: one with a nationalised industry and one with a company in desperate straits. Both have expired and have not been renewed. What I also know is that the right honourable gentleman the Prime Minister of that time, Sir Harold Wilson, described these planning agreements after giving up the premiership as the ignis fatuus of Labour policy.
Lord CAMPBELL of CROY: My Lords, before the noble Viscount sits down may I thank him. I was aware that there had been only two planning agreements, and I have prepared him for the later amendment. It is not Section 27 or the planning agreements that I was concerned about, but disclosure of information, which is Sections 28 to 34.
Viscount BARRINGTON: My Lords, may I ask in great ignorance about one point that I did not understand in the noble Viscount's very clear speech. I understood him to say that this amendment, which he agreed is suggesting that this should be an aspect of good business practice, is carried out by all companies all the time. But I understood him later to say that it would be a bad thing to put it in the Bill because there might be a moment when the board did not want to put it in. I am not sure how those two statements are reconciled. I can understand that it is unnecessary if they all carry it out all the time, but I find it difficult to believe it is unnecessary if the situation might be otherwise.
Viscount TRENCHARD: My Lords, I do not think I said that they all do it all the time, which was a point we discussed on a similar amendment at Committee stage. What I said was that businessmen would all say that it is a vitally important aspect of business. In this sense it is a platitudinous remark. Some however do essential things, which are known to everybody as desirable to do, better than others. What I did say is that it must be up to the NEB to decide in relation to each of its subsidiaries, in so far as you can interfere with the management of those subsidiaries, which prod in which direction should be given: Is that subsidiary spending too much time with industrial relations and not enough trying to get its design, its quality, its commercial aspects right? There will be different

17
situations which Sir Arthur and his colleagues will judge.
I am saying that if we put this provision in as a function— and in that sense I regard it as a platitudinous function— if it is used at all it will be misused, probably not by the NEB, and even the management of the subsidiary, but by someone who probably has been consulted very fully, saying, "You have not carried out your function, No. X", probably just at a moment when the NEB feel that the nudge should be given in the opposite direction.
3.18 p.m.
Lord LEATHERLAND: My Lords, the noble Viscount said that he did not want to put a pious statement in legislation. All I would piously ask is this: what is wrong with piety? The aim of this proposal which has been moved by the noble Lord, Lord Rochester, is to encourage peace in industry. Surely that is a very worthy objective. Peace can be encouraged by the methods of consultation which are suggested in the proposals the noble Lord, Lord Rochester, has put forward. That method of consultation already operates in many industries and in many firms. It operates very successfully. It brings about a much happier state of affairs than would otherwise be the case.
I was born in Birmingham and lived there until I joined the Army in 1914, which of course is a long time ago. I knew, as everybody in Birmingham knew, about the firm known as Cadbury. They not only make chocolates; they have for years upon end made industrial peace. They are a very worthy example to the rest of the industrial community. One of the things that they learned was how to enter into consultation with their employees. They have a works council— a very effective body. Two of my brothers happened to serve on it, but, of course, they were not directly responsible for its effectiveness. However, that works council, where proposals by the employers to the workers that certain changes were to be made and certain objectives were to be aimed at, was extremely valuable. I suggest that Cadburys is a fine example to the rest of British industry. I sincerely hope that the Minister will have another look at the matter to see whether something
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cannot be done along the lines suggested to bring both sides of industry together, working in harmony.
Baroness SEEAR: My Lords, I do not want to prolong this discussion, but I cannot resist the challenge that this is a "platitudinous" amendment: it is nothing of the kind. If it is platitudinous, it is rather surprising that at present the CBI never loses an opportunity to say to its members that they should develop participatitive practices and give far more information to employees. The CBI knows perfectly well— as the Minister is apparently not prepared to agree— that there are a great many backwoodsmen around who are doing absolutely nothing of the kind.
Viscount TRENCHARD: My Lords, with the leave of the House, I would merely say to the noble Lord, Lord Leatherland, that I, too, with him, am against sin; and to the noble Baroness, Lady Seear, I would say that I really do not believe that the cause which we all support will be furthered by including in a statute for a body like the NEB, one aspect of good management which, because the CBI is chanting it all the time, the NEB knows all about as well.
Lord ROCHESTER: My Lords, I am grateful to all noble Lords who have joined in this discussion and I am particularly grateful to the noble Lord, Lord Bruce of Donington, and to the noble Lord, Lord Kilmarnock, for their support. I was interested, of course, in the observations of the noble Lord, Lord Campbell of Croy, because although I did not name him, he was, as he has acknowledged, one of the Conservative Peers who were involved in the episode to which I referred in 1975. He asked the noble Viscount how far the machinery that was then instituted had been activated. He has not as yet received an answer. But I would like to say that it is not, of course, that machinery that I am seeking in this amendment to activate: it is, as I was seeking to say, something very much more general and more modest. In particular, there is no reference in the amendment, as I also indicated, to any specific items of information which might in themselves have given rise to controversy.

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The noble Lord, Lord Campbell of Croy, also said that what was sought in 1975 was to be applied to industry generally rather than merely to the National Enterprise Board. That, I suggest, is a further indication of how modest the proposals of this little amendment really are. I am sorry that the noble Viscount, Lord Trenchard, has taken the view that he has taken. He has said that Sir Arthur Knight, as chairman of the National Enterprise Board, has made it plain that he does not seek to interfere in the day-today management of the companies for which the Board is responsible. The noble Viscount used some fairly strong words, but it amounted to breathing down those companies' necks. He questioned whether, with my business experience, I did not know that the terms of this amendment were really simply platitudinous— "they looked good politically" was, I think, a phrase which the noble Viscount employed. I ask him to believe that if I had thought that nothing needed to be done I certainly would not have put down this amendment.
I think that the action of the party opposite in 1975 was, to put it bluntly, rather different from that just described by the noble Lord, Lord Campbell of Croy. In 1975 they did, as he said, support an amendment couched in somewhat similar terms to this, but perhaps they then found the Liberal Party a rather convenient nanny— if I may put it that way— to whose apron strings they might attach themselves. Perhaps they remembered the moral of the story of poor little Jim who, your Lordships will recall, had the misfortune to be eaten by a lion—
" … be sure to keep a hold of nurse for fear of finding something worse "!
I am sorry that the noble Viscount, Lord Trenchard, has not been able to give an inch on this matter. I believe that it would be a sign not of weakness but of strength if, just occasionally, the Conservative Government in this House with their inbuilt and unelected majority, showed themselves willing, after informed debate of this kind, to concede a point or two. As the noble Lord, Lord Bruce of Donington, has said, this does not ask for very much; it does not seek to make great inroads into the Bill, but it would go some
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little way to demonstrate their support for a principle that they claim to uphold.
My noble friend Lady Seear has already referred to the attitude of the CBI towards this matter. It certainly thinks that something is necessary. I suggest also that the Secretary of State for Employment is very well aware of the need to take every opportunity to do something about this. It was, after all, in his Granada television lecture only last Wednesday that he said that management in industry must now be prepared to disclose information and to take employees into its confidence. That is really all that this small, modest amendment seeks to encourage. I do not feel that I can let the matter go at that. I think that the amendment has enjoyed support— for which, let me say again, I am most grateful— from other parts of the House besides these Benches. It is a modest proposal which deserves the support of the House and I propose to press it to a Division.
Lord ROBBINS: My Lords, am I out of order—
Viscount LONG: My Lords, I am afraid that the noble Lord is not in order.
Lord ROCHESTER: My Lords, with the leave of the House would it be helpful to the noble Lord, Lord Robbins, if I sought to suggest to him— as we value so much his contributions— that he phrase what he has to say in the form of a question to me before I sit down. Is that of help to the noble Lord?
Lord ROBBINS: My Lords, before the noble Lord sits down, is he aware that his present amendment meets entirely the strictures which I passed on the original amendment at the Committee stage?
Lord ROCHESTER: My Lords, I am most grateful to the noble Lord.
Viscount TRENCHARD: My Lords, I do not know whether I am out of order in answering the factual question of my noble friend Lord Campbell of Croy? It is only two lines. The machinery of the information powers in the Industry Act 1975, about which he asked have never been used, and I understand that there has never been any formal requests that they should be employed.
3.29 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
3.36 p.m.
Lord LEE of NEWTON Lord LEE of NEWTON moved Amendment No. 2:
Leave out Clause 1.
The noble Lord said: My Lords, during the various stages of the Bill the content of a great deal of Clause 1 has
Their Lordships divided: Contents, 70; Not-Contents, 76.

CONTENTS

Airedale, L.

Gladwyn, L.

McNair, L.

Amherst, E.

Gordon-Walker, L.

Paget of Northampton, L.

Ampthill, L.

Goronwy-Roberts, L.

Peart, L.

Amulree, L.

Grey, E.

Porritt, L.

Ardwick, L.

Hale, L.

Robbins, L.

Aylestone, L.

Halsbury, E.

Rochester, L. [Teller.]

Banks, L.

Hatch of Lusby, L.

Sainsbury, L.

Barrington, V.

Henderson, L.

St. Davids, V.

Birk, B.

Hood, V.

Seear, B.

Blease, L.

Howie of Troon, L.

Shinwell, L.

Boston of Faversham, L.

Hughes, L.

Somers, L.

Brockway, L.

Hylton-Foster, B.

Spens, L.

Brooks of Tremorfa, L.

Jacques, L.

Stedman, B.

Bruce of Donington, L.

Janner, L.

Stewart of Alvechurch, B.

Buckinghamshire, E.

Kilbracken, L.

Stone, L.

Burton of Coventry, B.

Kilmarnock, L.

Strabolgi, L.

Byers, L.

Kinloss, Ly.

Strauss, L.

Cledwyn of Penrhos, L.

Leatherland, L.

Taylor of Mansfield, L.

Cooper of Stockton Heath, L.

Lee of Newton, L.

Underhill, L.

David, B. [Teller.]

Listowel, E.

Wallace of Coslany, L.

Davies of Penrhys, L.

Llewelyn-Davies of Hastoe, B.

Wedderburn of Charlton, L.

Elwyn-Jones, L.

Lloyd of Hampstead, L.

Wells-Pestell, L.

Fisher of Rednal, B.

McCarthy, L.

Wynne-Jones, L.

Gaitskell, B.

NOT-CONTENTS

Alexander of Tunis, E.

Emmet of Amberley, B.

Netherthorpe, L.

Allen of Abbeydale, L.

Energlyn, L.

Northchurch, B.

Avon, E.

Erne, E.

Nugent of Guildford, L.

Bellwin, L.

Exeter, M.

Onslow, E.

Belstead, L.

Gowrie, E.

Orkney, E.

Boothby, L.

Gridley, L.

Redmayne, L.

Brentford, V.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Reigate, L.

Campbell of Croy, L.

Romney, E.

Chesham, L.

Harvey of Prestbury, L.

Sandford, L.

Clancarty, E.

Henley, L.

Sandys, L. [Teller.]

Clitheroe, L.

Hornsby-Smith, B.

Selkirk, E.

Clwyd, L.

Inchyra, L.

Sharpies, B.

Colville of Culross, V.

Kimberley, E.

Soames, L. (L. President.)

Cottesloe, L.

Lindsey of Abingdon, E.

Strathcarron, L.

Cullen of Ashbourne, L.

Long, V.

Strathspey, L.

Daventry, V.

Lucas of Chilworth, L.

Swinton, E.

Davidson, V.

Lyell, L.

Torphichen, L.

De Freyne, L.

McAlpine of Moffat, L.

Trefgarne, L.

De La Warr, E.

McFadzean, L.

Trenchard, V.

Denham, L. [Teller.]

Mackay of Clashfern, L.

Vaizey, L.

Derwent, L.

Macleod of Borve, B.

Vaux of Harrowden, L.

Drumalbyn, L.

Mansfield, E.

Vickers, B.

Ebbisham, L.

Marley, L.

Vivian, L.

Effingham, E.

Merrivale, L.

Willoughby de Broke, L.

Ellenborough, L.

Morris, L.

Young, B.

Elliot of Harwood, B.

Mowbray and Stourton, L.

Resolved in the negative, and amendment disagreed to accordingly.

been examined and, indeed, has been subject to various amendments. This was so both in this House and in another place, and on each occasion the Government have rejected the amendments.
Our central objection to Clause 1 is that it completely changes the function of the NEB, so that it becomes a mere vehicle for expanding the private sector, irrespective of the state of recovery of

23
those firms which have been rescued from probable bankruptcy by the work of the board. We are not objecting in the least to the fact that, after many of these firms have been almost recreated they then go to the private sector. That is not our objection. The objection is that this is the predominant issue within Clause 1 itself. There is no question of when a firm is in a position to revert to private enterprise. Indeed, if one looks at the wording of paragraph (f) in paragraph (b) of Clause 1 (1) one sees that it says:
" promoting the private ownership of interests in industrial undertakings by the disposal of securities and other property held by the Board or any of their subsidiaries ".
Those words are repeated three times in the clause as they refer not only to the NEB, but to the Scottish Development Agency and to the Welsh Development Agency. As I have said, the disposal of such assets at a time when the NEB considers such action appropriate has always been a very important part of its function, but it has always been able to take into consideration the degree of recovery which firms have achieved. It has also been able to determine the price obtainable and, indeed, the desirability or otherwise of the people who wish to take the companies over.
As a result of an imposed instruction from the Government to dispose of its companies in order to assist in reducing the public sector borrowing requirement, the NEB will now be completely unable to exercise its judgment on the timing of such disposals. Indeed, the Government's original instruction was to make sufficient money from sales of NEB firms in order that they could contribute £ 100 million towards the public sector borrowing requirement in the last financial year. Fortunately, wiser counsels prevailed and the order was withdrawn, but that move did not mean any change in the purpose of Clause 1. There is now bound to be confusion as to the relationship of the new board to the NEB, and indeed to the Government, and the relationship between the board and the companies it controls.
Consider the case of Fairey. We have recently learned that Fairey has now been sold to Doulton, which is part of the S. Pearson Group, for £ 24 million.
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There was an original offer of £ 19–5 million by Hambros, and my impression is that had the Government demand for an NEB contribution of £ 100 million been persisted in, that sale at that figure would have gone ahead, more particularly as the board of Fairey approved of it. I submit that that illustrates the fact that a time limit within which the NEB has to work removes the concept of a willing seller and a willing purchaser. That is one case which illustrates the point I have been making.
What about the future of Ferranti? In the last financial year Ferranti made a profit of about £ 10 million. When introducing the NEB's annual report the other day, Sir John King, deputy chairman of the new board, commented:
" Ferranti belongs in the market place. It is restored to health and we will take a decision on the options available for it by the end of June ".
It sounded as though he had almost picked up a brief belonging to the Secretary of State for Industry, who uses that kind of language. He may be right and perhaps the members of the previous board would have come to the same conclusion, but with the content of the present Clause 1 as a guide, even before it becomes law, I doubt it very much.
Indeed, it makes one wonder what is to be the future of the 60-odd firms which are still within the purview of the NEB, and perhaps the Minister would say. Is the NEB now compelled within the time limit to sell off those companies irrespective of the state of recovery for which the NEB has been responsible? One could ask the same question about the Welsh Development Agency and the Scottish Development Agency. Both those parts of the country are in dire unemployment straits and it seems desperately foolish to force the NEB, or the Welsh and Scottish Development Agencies— unless they themselves are convinced that they have brought those firms to a stage of recovery at which the public can get the maximum returns for them— into a position where they must get rid of them.
I have asked on a previous occasion, more than once I think, for information for the House on the financing of INMOS. Up to now we have had no reply. On Second Reading the Minister said that as for firms dealing with advanced

25
technology, the NEB would not at this stage be forced to put them in the marketplace. INMOS covers that position exactly; it is dealing with the most advanced kind of technology, including the silicon chip, about which some of us are very concerned over our position vis-à vis the Americans, Germans and others. The last Government allocated certain funds to INMOS, some of which have not yet been granted to them. I hope the Minister can now tell us whether there is some hiatus so far as INMOS is concerned. There are, or have been, some negotiations going on, but if the position is that certain private firms are negotiating to take it over and the Government are refusing to find the finances for it to be able to go ahead with its research and development, we shall lag behind deplorably. Thus, the time is overdue for the Minister to say precisely what the position is.
To take another illustration, in hot pursuit of his intention to enlarge the private sector at the expense of the public one, which the Secretary of State has told us on many occasions is the real basis of Clause 1, may we now be told what is to be the position of Rolls-Royce? We know that after discussions with the chairman of Rolls-Royce it was decided that the Secretary of State would transfer responsibility for it from the NEB to himself. We now have the information that Rolls-Royce has managed to make a loss of £ 58 million, and perhaps the Minister will tell us if there is any truth in the rumour that the Secretary of State would now like the NEB to take it back, plus the £ 58 million loss which he has inherited. Perhaps he could now argue that, as he has always said he wishes to divorce this Government from industry and that, as he has himself agreed, he is incompetent to run industry, it would be a good thing if the NEB would graciously agree to relieve the right honourable gentleman of his responsibilities in this respect.
None of us favours the work of the insider who uses inside information to get great profits, but the Secretary of State has no need to prove his virtue by grabbing all the losses; it really gets to something when we reach that kind of position. Is it still the intention of the Government to attempt to sell Rolls-Royce shares to the public? If so, then against the background of the £ 58
26
million they have now declared, what will be the effect on the timing of that transaction?
It seems to me that the whole objective of Clause 1 is now being shown to be quite ridiculous, not by anything which people in another place or in this House have been saying, but by the facts of life; by the fact that Fairey themselves would have been sold for a much smaller price than was eventually obtained if the Government had had their way and forced a £ 100 million contribution; that Ferranti are now in a position where none of us know whether they are still being forced into the market at a price less than could be obtained if they held it for a while; and that Rolls-Royce itself almost makes a laughing-stock of what the Bill attempts to do. Indeed, the nation is now entitled to know whether the whole objective of seeking to expand the private sector with no consideration to the effects on the public purse is to be the case as laid down in Clause 1. It seems to me that the case has now almost gone by default. I beg to move.
3.50 p.m.
Lord CLEDWYN of PENRHOS: My Lords, as my noble friend Lord Lee of Newton has just said, we had a fairly full debate on this clause during the Committee stage, but I am bound to say that I am still not quite clear what are its full implications for the Welsh Development Agency. The Minister, when he spoke in Committee, gave me a clear impression that the functions of the Welsh Development Agency will remain more or less unimpaired as a result of the Bill, and I should like him to confirm that statement today. If this be the case, then part of my apprehension is removed, although my noble friend Lord Lee has again created some fairly grave doubts in my mind.
The noble Viscount the Minister of State dealt with some of the points that I raised in Committee on 28th April. My concern then— and it is not entirely allayed— was that whatever be the position with regard to the powers and the functions of the board, the resources available to the Welsh Development Agency will be severely curtailed as a result of Government policies and will largely neutralise the £ 48 million which the Secretary of

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State for Wales, Mr. Nicholas Edwards, has promised over the next two years.
If I may, I should like to read an extract from the letter which the noble Viscount was so courteous as to send me following the debate on 28th April. I quote from his letter:
" As you know, the level of Regional Development Grant is maintained at 22 per cent. in Special Development Areas and reduced to 15 per cent. from 20 per cent. in Development Areas. It will not be paid in Intermediate Areas. These changes apply to assets provided after 31st July 1980. Minimum levels of expenditure eligible for grant were increased on 18th July last from £ 100 for plant and machinery and £ 1, 000 for buildings to £ 500 and £ 5, 000 respectively in respect of expenditure defrayed on or after 18th July last year ".
The noble Viscount continued:
" Because of the transitional provisions and the two years during which applications for grant can be made, we do not expect the full effect of the changes to be felt until 1982–83. The estimate of £ 35 million to which you referred in the debate on the Industry Bill is the estimated reduction in payments of Regional Development Grants in Wales in that year ".
The noble Viscount said that this is not intended to be a precise figure. Let me read more of his letter, and indicate what he said:
" It was made in the middle of 1979 and was based on the changes in the status of Welsh Assisted Areas, in the rates of grant and in the minimum values, and assumed that in future Assisted Areas the rate of investment would approximate to that of the recent past. An assessment of changes in the investment pattern could not be arrived at without a disproportionate amount of time and effort ".
I understand the position of Ministers and civil servants in relation to work of that kind and production of statistics, but the position of Wales is grave enough to justify a little disproportionate time and effort in these circumstances. We are to lose £ 35 million in one year, and the loss will affect a wide area; that is to say, it will affect the whole of the development area in Wales. But the £ 48 million will be used to build factories in those areas affected by BSC plans. That is the object of the £ 48 million; at least that is what Mr. Nicholas Edwards says. I ask the noble Viscount whether he would be good enough to confirm that. Does this relate to advance factories? Is that what the £ 48 million is for? Perhaps the Minister will enlarge upon that. Will the £ 48 million be handled exclusively by the
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Welsh Development Agency? Can it be used for a purpose other than in connection with factories? We need much more clarification about the £ 48 million than we have had in either of the two Houses thus far.
My chief criticism— and I think it a valid one— is as follows. The Government are to give the £ 48 million over two years to a limited part of Wales affected by steel closures; and of course I welcome this. However, on the other hand, the Government are taking £ 35 million a year at least from a much wider area of Wales— that is the whole of the development area— from 1982 onwards. There is there a very severe disparity which has not been made clear to Parliament or to the people of Wales, and I am very anxious that this point should go home today before we agree to the Bill going through on Report and Third Reading. These are the bare bones of Government action, and they are not an attractive sight. I am bound to say that the prospect for Wales is at present daunting.

ANGLO-LIBYAN RELATIONS
3.56 p.m.
Lord TREFGARNE: My Lords, with your Lordships' permission, I shall intervene to repeat a Statement being made in another place by my honourable friend Mr. Hurd on Anglo-Libyan relations. The Statement is as follows:
"Her Majesty's Government have for some time been concerned about statements and activities by Libyan Government officials which amount to political intimidation of Libyans resident in this country. Within recent weeks there have been a series of crimes involving Libyans.
"My right honourable friend the Prime Minister therefore decided to send a senior Foreign and Commonwealth Office official, Sir Antony Acland, to Tripoli on the 27th April with a personal message for Colonel Qadhafi. This was followed up by meetings in both Tripoli and London between Libyan and British officials.
"These contacts have led to positive developments over the last few days. The Libyan authorities have agreed,

29
at our request, to withdraw four Libyans connected with their mission in London who have been involved in activities which are incompatible with their functions. Three of these Libyans are at present in the United Kingdom We are emphasising that we expect them to leave within the next few days.
"One complication has been the status of the Libyan People's Bureau, which has taken over the functions of the Libyan Embassy. It is not for us to say how the Libyans should organise their mission, but it must be established that the People's Bureau will be fulfilling the functions of a diplomatic mission under the Vienna Convention in Diplomatic Relations. We are holding discussions with the Libyan authorities which, we hope, will resolve this question.
" Our objective throughout has been to show that we wish to maintain good relations with Libya but that harassment of Libyan expatriates here must stop. The Libyan Government have informed us that they wish to see an improvement in our relations and for closer co-operation, particularly in the commercial and economic fields. We share this desire but our relations cannot improve unless the campaign of harassment ends immediately. The action which we have taken is designed to make this clear. "
My Lords, that ends the Statement.
3.58 p.m.
Lord GORONWY-ROBERTS: My Lords, the House will be grateful to the noble Lord for repeating that Statement in this Chamber. There has indeed been general and mounting concern about harassment of Libyan nationals— harassment and worse— in this country, and this feeling is shared by other countries, for the same reasons. We very much welcome the discussions so far with the Libyan Government, and we hope that something concrete will result from them. We should like to be clear regarding the action taken, in agreement with the Libyan Government, in clearing out of the so-called People's Bureau, these three Libyans whose activities, to quote the Statement," are incompatible with their functions ". That is a rather euphemistic way of putting it, I would suggest. We
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should like to be clear that this figure of three, rather than four, exhausts the immediate possibilities of clearance in this area. Are there any more about whom we are in negotiation with the Libyan Government? Perhaps the noble Lord can tell us about that.
The second point I should like to make is that we take note of the penultimate paragraph of the Statement, which refers to
" how the Libyans should organise their mission … "
Surely it is for the host Government, under the various conventions and protocols, to agree to the number and, indeed, the identity of all accredited to an accepted mission. Can we be assured that, despite the negotiations now proceeding, we shall exercise the full rights of the host country to decide both number and identity?
My Lords, the next point I think we should make is that we whole-heartedly welcome the statement that this country wishes to reinforce good relations with the Libyan Government, and that the Libyan Government (to quote the Statement) have in turn informed us
" that they wish to see an improvement in our relations and for closer co-operation, particularly in the commercial and economic fields ".
We hope that real results will derive from these discussions. The Government will certainly be supported by both Opposition parties, I am sure, in any constructive step they take to this end in discussion with the Libyan Government. But we should like to be assured that such steps as are now being taken to deal with a local situation in London, and which may be taken similarly in other capitals for similar reasons, are also the subject of consultation and concerted action among countries, not only in Western Europe but also in North America and further afield.
It is one thing to get an agreement, perhaps lasting, with the Libyan Government about the situation in London, but surely there is a deeper, more profound issue to be settled. While we may obtain a momentary solution of a local difficulty, is it not time that this country and like-minded countries should go to the United Nations and seek a restatement of the terms and obligations of the Vienna Convention? This is a time, not only when these Libyan activities are calling

31
into question the very fabric of international diplomatic relationship but also when, as in Iran, there are other incidents which threaten the fundamentals of international intercourse. For that reason, will the Government bear in mind— I ask for no answer on this at the moment— that the continued incidence of these happenings, and their spread, may well call for a new appraisal and a new reinforcement of international obligations through the various conventions and protocols by the United Nations itself?
Lord GLADWYN: My Lords, I, too, should like to thank the noble Lord for repeating this Statement, and to associate myself, on behalf of my noble friends on these Benches, with everything that the noble Lord, Lord Goronwy-Roberts, has said. We quite agree that our relations with Libya can hardly improve unless it is clear that what seems to have been the declared Libyan policy of murdering Libyan dissidents resident abroad has been abandoned. Unless it is made clear that they have abandoned their policy, our relations can hardly improve. Indeed, unless this is clear surely our relations can only deteriorate, even to the extent, I fear, of eventual ruptured relations, whatever the effect of this might be on British trade and on British residents in Libya.
Furthermore, my Lords, while we are having discussions with the Libyan authorities in this matter, as we apparently are, might it not be in order at least to raise the question of the supply of arms by the Libyan Government to the IRA, for which there appears, over the years, to have been very considerable evidence?
Lord TREFGARNE: My Lords, I am obliged to both noble Lords for what they have said in response to this Statement. May I deal first, briefly, with the points raised by the noble Lord, Lord Goronwy-Roberts? The personnel who are being withdrawn at our request are exhaustive, so far as we know. The position is, of course, that we require every diplomat in London, accredited or otherwise, to obey the law, and when their activities seem to us to depart from that precept then we seek their withdrawal. As for agreeing to the personnel of the Libyan mission here in London, the present position is rather complicated owing to the fact, as we said
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in the Statement, that the status of the mission was changed by the Libyans here in September last, when they announced that their embassy was to become a people's bureau. For the moment, we accept the accreditation of those who were in the Libyan Embassy here in London prior to 1st September last. The position of those who have arrived since then is the subject of current discussions, and we hope to be able to resolve that matter shortly.
The noble Lord, Lord Goronwy-Roberts, also asked me about international consultations. We are in close touch with the various countries principally concerned, in particular, of course, the United States, and also our European Community partners, although we are not at present planning to raise the matter in the United Nations. But, of course, in a general way we would keep that under review, as the noble Lord suggested. The noble Lord, Lord Gladwyn, asked me about supplies of arms to the IRA. I can say quite firmly, however, that we have no present evidence that this is happening.
The Earl of KIMBERLEY: My Lords, could my noble friend give your Lordships any assurance, or further information, about the Kingsley School in Chelsea, recently purchased by the Libyan Government? Could he further give an assurance that there is no possible chance of this school being used as a cover-up for educating clandestine Libyan "hit men"?
Lord TREFGARNE: My Lords, there is clearly no difficulty in the school's being used for proper educational purposes, as the Libyans are apparently at present proposing. Of course, the precise use of the premises is a planning matter, and that comes within the compass of the local authority, and not Her Majesty's Government.
Lord ELWYN-JONES: My Lords, while we welcome what the noble Lord has said in response to my noble friend's stressing of the importance of international co-ordination of action in this field, is not the Statement that the noble Lord read out putting the matter rather too mildly? It spoke of "political intimidation". Have there not been incitements to murder; and, indeed, have murders of Libyans

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living abroad not taken place in circumstances pointing at least in a very significant way to their following these acts of incitement? This is a programme of organised international murder. It cannot be taken lightly; and I should have thought that it was worthy of being taken up at the highest quarters of international diplomacy, which at the end of the day is the United Nations itself.
Lord TREFGARNE: My Lords, there is no evidence that any of the four persons referred to in the Statement was directly implicated in the recent murders. They were involved, however, in the harassment of Libyans resident in the United Kingdom. This apparently included attempted kidnapping and a subsequent attempt to pervert the course of justice; but I can further add that there are three other people currently helping the police with their inquiries in respect of the murders to which the noble and learned Lord referred.
Lord HARVEY of PRESTBURY: My Lords, has my noble friend received assurances concerning the safety and the welfare of the 5, 000 British subjects working in Libya?
Lord TREFGARNE: My Lords, we have no reason to believe that there is any threat to the safety of our citizens in Libya.

INDUSTRY BILL
4.10 p.m.
Report stage resumed.
Lord BRUCE of DONINGTON: My Lords, your Lordships will recall that when we were discussing this particular clause, Clause 1, in Committee, I urged upon the Government that they should not close the door on the possibility of their having to extend public ownership into certain areas of manufacturing industry. I said that I thought it would be unwise if they were to deny themselves that power. It will be within the recollection of the House that I urged on the noble Viscount to retain the flexibility, afforded them by the existing Industry Act 1975, of being able to give the board directions in certain specific ways if they
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thought the board was going to do something the Government did not want it to do. We were talking of the Committee stage and, as your Lordships will recall, the remarks that I made were in the context of the Government's own projections of the future as put out in the White Paper and in the Budget Statement. These were bad enough; and what I said on that occasion was that the Government would be unwise, in view even of their own projected developments in the next four years (whether they were forecasts or whether they were assumptions), to deny themselves that power and have to come back for legislation.
At that time we were talking within the context of the Government's own statement. But we are now talking in a different circumstance because, since the Committee stage, the Select Committee of another place dealing with Treasury and Civil Service matters has had an opportunity not only of examining the forecasts (or assumptions) to which I then referred but of producing an opinion which states authoritatively that the position is likely to be much worse than that which was thought to exist at the time we were holding the Committee stage on this particular clause of the Bill. If I may, I will refer your Lordships to the findings of this all-party Select Committee in another place, a Select Committee comprising a majority from the Government's own party. It says this:
" The prospects for manufacturing industry arc particularly depressing. It was stated in evidence to the Committee that manufacturing output was estimated to decline by 4½ per cent. in 1980, which, with an average fall of J per cent. a year over the next three years, would imply that manufacturing production might be over 6 per cent. lower in 1983 than in 1979 ".
Are the Government still saying that, in the light of the blight that they themselves originally forecast as settling over the industrial life of this country, they want to forfeit their right, if need be, to invest public money either in saving industries or in promoting new ones? Only two days ago, it was announced that in that free enterprise country, the USA, the US Government were advancing 750 million dollars to save Chrysler. There is not the slightest disinclination by the American Administration when things are going badly to put in public money. Are the Government saying that they wish to tie

35
their hands behind their backs in this particular respect? In the light of all these developments, and in the light of the far worse projections by the Select Committee in another place, and within the context of the American action to which I have referred, are they saying that they are still going to let the weakest go to the wall and the devil take the hindmost— all for the sake of maintaining in its pristine purity the ideological piety of Sir Keith Joseph? Are they still saying that in no circumstances would they be prepared to take the same action as was taken by the Heath Government in relation to Rolls-Royce?
If they are saying this, then they are revealing that they arc quite insensitive to what happens to the industrial structure of this country. I should have thought that prudence would have dictated to the Government that in all the circumstances it would be wise to retain the power contained in Section 2 (2) (c) and/or for that matter Section 2 (2) (b) of the Industry Act 1975.
There is a further question to be taken into account. It will be recalled that the Government paper, the Budget Statement, the White Paper that followed, assumed that unemployment would rise to 1–8 million in 1981–82 and then remain at that level until 1983–84. If I could refer the noble Viscount to the Second Report of the Select Committee from another place, he will find this verdict on that assumption:
" Our advisers estimated that registered unemployed could lie between 2–2 million and 2–5 million by 1983. Higher unemployment means higher expenditure on social security benefits and whether this is financed through higher national insurance contributions or through general taxation, the scope for tax reductions in future years will be significantly tower … ".
So that it is not only a question of industrial activity; it is a question of unemployment. What is noteworthy is that the Select Committee of another place, composed as it is of all parties, went some way towards the conclusions reached by Mr. Wynne Godley which appeared only a month earlier and which were immediately denounced as fantastically pessimistic by the Government spokesman of that time.
Far be it from us on these Benches to add to the doom and gloom that these figures portend, but, certainly, if the noble
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Viscount, on the basis of his own figures, was not prepared to retain that degree of flexibility, surely the substantial worsening of the prospects which was come to in the opinion of the Select Committee in another place ought to give the Government, and the Minister himself, cause for reflection. That is the reason why we have once again on Report suggested to the Government that they would be well advised, without prejudice to their powers under the Industry Act 1975, to leave the original section of the Industry Act as it stood.
There is no virtue in being inflexible when the fires are gathering all the time; when the storms are blowing with ever-increasing intensity; and when the horizons, wherever one looks in the economic and industrial field, grow progressively darker. Surely, it would be far better for the Government to maintain this degree of flexibility. It does nothing to take away their powers. In certain circumstances flexibility might be an advantage, a lifeline for them— and not only a lifeline for them, but for the benefit of the country as a whole.
4.20 p.m.
Lord HATCH of LUSBY: My Lords, at the Committee stage the noble Viscount agreed that this clause was the philosophical core of the whole Bill. My noble friends Lord Lee and Lord Bruce have made the central issues so far as that core is concerned. I want to confine myself simply to one complementary point: that which I mentioned in particular during the Committee stage. This will take away from the NEB and the agencies mentioned the function of promoting industrial reorganisation.
At the Committee stage, we had a discussion about this. I raise it again simply because I do not believe that the noble Viscount answered the arguments from this side with any degree of satisfaction. The noble Viscount professed not to be dogmatic. He claimed that he was not acting with regard to this Bill on the principle of dogma. I am sure he has read the Hansard of the Committee stage and he will see why some of us on this side are dubious about that claim. At the Committe stage, on 28th April, in column 1048 of Hansard, the noble Viscount had this to say:
"We believe that the health of the private sector of industry, which has in the past created

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the wealth for this and other nations to a greater extent than the public sector, has been debilitated".
That, I suggest, is his starting point in dogma. If it had not been, if he had been making a reasoned argument, then surely he would have gone on from that assertion to show that the nationalised industries had been less efficient, had provided less wealth than those of private industry and that was why he was introducing this Bill: in order to promote the industrial health of this country through private enterprise rather than through public enterprise. He did not do so.
I should like to hear him argue that case, for example, in the coal industry. Would he like to tell us this afternoon that the coal industry was better organised and produced more wealth for the country under private ownership than it has done under public ownership? What we are really arguing about is whether in the declining industrial age in which this country is living the Government should have the means of intervention in order to stimulate a new industrial age and halt the decline that we all have to accept as characteristic of our age; or whether this can best be done, as the noble Lord has been arguing, through the aegis of the market place. Later in the same Committee stage the noble Viscount had this to say:
" I said the market system would cause reorganisation "—
that was at column 1051 of Hansard.
I pointed out to the noble Viscount in that Committee stage that he had some historical precedent to go on. He has not answered— nor has anyone from the Government answered— why they believe that the system which they are now employing through this Bill and other Acts will be any more successful than was the almost identical system used between the years 1970 and 1972. We know that during those years, because of lack of investment in British industry, because of declining investment in British industry, because of the loss of investment to overseas companies— which again I mentioned at the Committee stage— the then Conservative Government had to reverse their policies in order to escape from complete collapse.
This has not been answered and it is not enough for the noble Viscount to say that the £ 1,000 million which I mentioned
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had been lost within two months of the removal of exchange controls, had not been completely lost. I did not use the word "completely". I am suggesting that this Bill, for the removal of the power of the Government to use the NEB to revitalise industry, combined with such measures as the removal of exchange control, will have the same effect in this country today as occurred in the years 1970 to 1972. I should like the noble Viscount to answer that question, as nobody that I have challenged from the Government Front Bench has done so.
In removing these powers of industrial reorganisation from the NEB, may I ask the noble Viscount another question— a very pertinent and timely question— taken from a matter which he referred to in public only last week. That is the question of research and development which is an essential part of industrial reorganisation. I understand that the Government are resisting increasing State aid towards research and development in industry. Indeed, according to the OECD, Britain is the only major industrial country where research and development has decreased in absolute terms over the past 10 years. I am sure that the noble Viscount has read the Finniston Report, which shows that of the money spent in research and development in industry in this country 90 per cent. is accounted for by 100 companies. Over 50 per cent. is accounted for by no more than 10 firms. These 10 firms are exclusively within the aerospace, electronics and chemicals industries. Yet only last week the Minister himself was at least suggesting in his words that this Government are resisting the need for increased State aid.
When we come to a crucial organisation for the future industrial development of this country, the micro-electronics industrial support programme, we find, as I understand it, that that has actually been cut. Please correct me if I am wrong. This programme has been cut from £ 70 million to £ 55 million over a five-year period. So I would say to the Minister: What is there that activates the Government in producing this Bill and depriving themselves of the organisation of the National Enterprise Board, with its power to stimulate private as well as public industry in this country, to lead the way in research and development, to assist in the stimulation of new industrial ventures

39
in this country, and to participate in the reorganisation of industry? What is it that activates the Government, other than dogma?
4.31 p.m.
Lord ROSS of MARNOCK: My Lords, I hope the noble Viscount will think again about some of the things which are implied in this clause. I have an interest in it, and particularly regarding subsection (2), where he deals with the Scottish Development Agency Act. As he knows, I was Secretary of State at the time when that Act was passed. It is interesting nowadays, when there is a problem with any industry in Scotland, how the Secretary of State rushes to the press and says, "It's all right: we are going to get the Scottish Development Agency on to the scene and see what they can do". They were not all that helpful when it came to the passing of the Act and the creation of the agency, and indeed it looked at one time as though they were going to get rid of it. There were times when they spoke in this way about the NEB and the Welsh Development Agency as well, and then they probably suddenly realised that they had better have some tools in their locker if they were even to keep up a pretence of dealing with the rising tide of unemployment.
The tide is rising; it is rising very heavily in Scotland. Over the whole of Scotland it is more than 8 per cent., and when you take particular areas it really is a desperate plight. These particular areas are in the old industrial areas of Glasgow and the West of Scotland— not just the Clyde Banks and not the places where you expect to get a great rise in unemployment with the decline of shipbuilding and other heavy industry, but a place like Kilmarnock, which I had the privilege of representing for 33 years.
We have seen all the forces at work there— an American coming in to Glenfield and Kennedy which had been there for over 100 years, milking it and walking out. It was the efforts and the new powers of the Scottish Office, with the help of the Scottish Development Agency, that, by intervention there and by maximum state aid, saved something of it. We have another firm there at the present time which is building up, and it is a
40
credit to our development area policies that they have been able to do it, but it was intervention. If the Government had stood on the sidelines, Glenfield and Kennedy would have gone. There is another one called Massey-Ferguson. It is a well known name, even in racing these days; there is a Massey-Ferguson cup. I should like to tell your Lordships, in case you do not realise it, that there is not a single combine tractor now built in the whole of Britain. They used to be built in Kilmarnock, but they decided to reorganise. There was no difficulty about their re-organising. And where do they concentrate combine harvester production?— in France; and in what part of France?— a non-development area. It makes nonsense of all the Common Market proclamations about strong areas helping the weak. It has nothing to do with bad workmanship or strikes in the factory, or anything else: just a decision by a private company to reorganise to the detriment of an area that was once one of the most popular areas in Scotland.
At the present time— and let us give credit where it is due— with a certain amount of help and know-how from Massey-Ferguson, there is a company which, with the help of the Scottish Agency and the Scottish Office, is struggling for survival, not creating tractors but using their engineering skills that are endemic to Kilmarnock and trying to create a new industry. What I am concerned about is: What will be the effect of this Bill, and in particular Clause 1? It is all very well for the Minister to get up and say, "Ah, but have you read paragraph (a)? "which refers to,
"… the provision, maintenance or safeguarding of employment".
Of course I have read it, but I have also seen the activities of the Scottish Office and their message to industry is obviously: "Sink if you cannot swim. We are not going to give a great deal of help." In fact the complaint is that we tried to help too may people. It is far easier to maintain industry than it is to be able to provide industry. Firm after firm in Scotland is going out at the present time.
What is the outlook for the building industry and the housing projects the Government have got ahead of us? As to the capital cuts, are they going to help private industry by getting the Scottish

41
Development Agency, the NEB and the Welsh Development Agency to sell off what private interests they may have? I can tell you that private industry is more concerned about the contracts that have been put out by public industry. Go and ask Babcock and Wilcox how much they are dependent on the energy industry. Ask some of the other construction agencies and find out how much they are depending, waiting for development. They see no bright news in respect of this, and I am afraid that there is a little bit of whistling in the very dark days so far as paragraph (a) is concerned.
However, when we look at the negative aspect of paragraph (b) it may be possible to help, with the agreement of another industry, by the Government taking a share in it. In fact some people think— and I am one of them— that if we are on to something that may be profitable the Government should have a direct share in it. There is nothing wrong in that. We are not saying they must, but that they have the right to do it; it is the best way the workers can see a measure of control over their own destiny and get an immediate return for the country on what has been put in. But here comes paragraph (b) , permitting the private sector to come in:
" … by the disposal of securities and other property … ".
They will only be able to dispose of those securities if it is a profitable industry. That is where the dogma lies, on that Front Bench; and it is going to be no help to Scotland at all.
Then we have paragraph (c) which deals with "reorganisation". I have heard a lot since I came into this House about small industry. In many ways, one of the curses of Scotland is small industry. There are family businesses in which it is easier just to let the thing go rather than to invest. "It will do my lifetime"— that is the sort of outlook which you get in some of the smaller businesses. Is it not worth while having an agency coming in there and trying to get some reorganisation going and a bit of security for the workers as well as the lifetime of security for the present owners? It really does not say very much for the Government, with all their problems, that they have to pass a Bill like this which is so negative. They do not have very much confidence in their own ability properly to use the
42
tools under the old Industry Act, most of which were theirs, by the way. We could only help Rolls-Royce and all these other people by using the Industry Act 1972; the development agencies for Wales and Scotland were logical additional steps that were acclaimed and welcomed in Scotland.
Now let us not have anything about mandates. The Government have no mandate in Scotland to do anything at all, and if they did not believe me the last time, I hope they will notice the results of the local elections; and if they try to explain that away, I hope they looked at the opinion poll in the Glasgow Herald for today, where the Tories are down again, and we see a one point jump ahead for the Nationalists. The Tories create nationalism by their ill-treatment of Scotland. I sincerely hope the Government— I despair of it— if they had any sense, at the present time with the present unemployment and the employment situation in Scotland, will be strengthening the Scottish Development Agency, not weakening it as they do in this particular clause. I hope my noble friend will press this amendment to a Division.
4.43 p.m.
Viscount TRENCHARD: My Lords, we debated at Second Reading Clause 1 and its purpose as the key to this Industry Bill and at length on more than one occasion at Committee stage. Much as I should like to accept the challenge to do it again, in the interests of time I am not going to answer in almost precisely similar terms noble Lords who have raised points which have been raised and answered many times before, here and in the other place.
In a nutshell, we do not see the NEB or the particular functions of the agencies in relation to general reorganisation; we do not see these bodies as panaceas to deal right across the board. The noble Lord, Lord Bruce, suggested that things had changed since the Committee stage, in that there were various bodies estimating even lower industrial activity situations, and that this might mean that the Government should retain powers via the NEB to take what action they might consider necessary.
I am not going to discuss the general economy and the terrible situation it

43
was in when we took over, nor the length of time that it will take before we begin to get forward movement. But the idea that chosen panacea agencies can cover all the ills that have been created is one that we still reject. In so far as particular company situations are concerned— and the noble Lord, Lord Bruce, mentioned Chrysler in the US— in this Bill we are not, nor have we any such intention, revising any further the powers under Section 7 in the assisted areas and Section 8 nationally to give assistance when it is likely to benefit the economy of the United Kingdom or any part thereof. We retain those powers. Short of Government powers, which on the whole we do not favour in either specific or general situations, there are examples which are constantly occurring, and will occur more in the atmosphere created for private finance where consortia will, I hope, decide that in certain areas help should be given. Noble Lords have barely mentioned the changes in the tax and control policies which played such a part in debilitating industry in the past.
The NEB, in its annual report, clearly accepts the role given to it and obviously considers it to be an important and big one. It states that the Government have accepted the need for a continuing NEB; and that is true and answers a part of the noble Lord, Lord Lee's, suggestions. The broad purposes for which the NEB was set up and which were stated in the Industry Act 1975 remain unchanged; but its functions are to change. Public ownership for the sake of public ownership is no longer a function, and instead the NEB is to have the function of disposing of assets in order to increase the private sector involvement wherever possible. The notion that the NEB could be a major instrument of industrial reorganisation and rationalisation has also gone. It goes on to accept the need to concentrate its efforts in huge areas where they are very badly needed.
The noble Lord, Lord Lee, suggested that it had no flexibility in carrying out its new function of, wherever possible, returning companies to private ownership. What we expect the NEB to do, in the words of my right honourable friend the Secretary of State, is to sell its shareholdings as soon as it is commercially practicable, having regard to the interests
44
of the company and the taxpayer, together with such other special considerations, for example, United Kingdom defence interests, as the Government may identify. The flexibility was indeed shown in terms of the overall economics which faced the Chancellor of the Exchequer when he lowered the priority for the early contribution from the NEB to the need to deliver cash and the £ 100 million target in the financial year was removed. Sales will continue, and continue on a sound and practical basis, as and when that is in the interests of the country, the shareholders and the company concerned.
The noble Lord, Lord Cledwyn of Penrhos, raised the problems of Wales again. I really think I must decline his invitation to a further Welsh debate— we have had one— or even to a full debate on regional policy, at least under this clause, because we are talking of Clause 1 which does not affect it. I have indeed written to him setting out in full the position in relation to the £ 48 million extra, and out of courtesy but not in relation to this clause at all, the £ 48 million in question will be largely spent by the Welsh Development Agency, although a small amount will go to the Cwmbran Development Corporation. It will provide 1½ million square feet of advance factory space and 500 acres of identified sites, together with the reclamation of 300 acres for industrial use.
Lord CLEDWYN of PENRHOS: Would the noble Viscount please answer the latter part of my question, namely, whether the £ 48 million is intended to be directed to those areas which are affected by steel closures in Wales, and not to the rest of the development area which is to lose £ 35 million a year from 1982 onwards?
Viscount TRENCHARD: My Lords, in the main the purpose of this will be to relieve the effects of the steel closures. The regional policy changes have been discussed previously and I am more than prepared to debate them at any time in the future because, as I mentioned last time, I was happy to discover a fairly large amount of waste in the previous regional policy.' I believe we have an overall effective regional policy, in which— to say that Wales gets the largest share is wrong— Wales constitutes the biggest percentage of assisted areas of any of the

45
main areas of need in England, Scotland and Wales.
The noble Lord, Lord Cledwyn of Penrhos, quoted me as saying that the Welsh agency powers would not be altered. I never said that in relation to Clause 1 and the powers of general reorganisation. His concern has always been in relation to regional policy, and I said it in relation both to regional policy and to other functions which the agencies have but which the NEB does not have.
May I quickly answer the question in relation to INMOS, which the noble Lord, Lord Lee, raised? The Government regret the delay in taking the decisions both on the second tranche of £ 25 million for the company and on the location, which is a very important question. But I do not believe that the Government or the NEB could responsibly have refused to discuss, consider and negotiate in relation to certain offers and proposals which have been raised. I believe these to be potentially sufficient in the interests of all concerned, including all whose primary concern is the acceleration of technology in this country, for those discussions to proceed, and to proceed as fast as possible. So I assure the noble Lord— I cannot give him a date— that we are very conscious of the need to come to decisions at the earliest possible moment.
The noble Lord raised the question of Rolls-Royce once more, and of British Leyland. He will no doubt, having looked at the NEB's annual report, have seen that the board believe that they have no conceivable part to play in relation to either of those two huge companies, although on the second one the Government have still not yet taken their decision. In a nutshell, it all comes to this question of whether, if you have an industry whose profitability has been depleted very badly over the years by ill-tretament— by more than one Government and more than one party— by controls and by disincentives until its profit is at a low level, it is then
sensible to pick upon certain chosen agencies and expect them to put it all right.
With no disrespect to the previous board, let alone to this board, even in relation to those tasks which the NEB has taken on in the past— and we believe there is a need to concentrate on a narrower front— your Lordships will have seen in the annual report that after leaving out £ 17.2 million of special once-only costs the results are, on an historical account basis for the year 1979, 4.8 per cent. return on capital historical. I am not criticising. I am merely saying that it is no good noble Lords thinking that chosen agencies are the way to put right all that has gone wrong.
I hope that I can ask noble Lords opposite to consider whether all this stems from the ill-treatment of the wealth-creating section of industry, both private and public, by disincentive at a personal level, which affects both sectors, and by control and intervention, and whether it is a more sensible and more humble approach to limit the amount that you expect of any one centrally appointed agency and to get it to concentrate on essential functions. I just hope that the reason behind that question will go home.
Noble Lords opposite have placed emphasis on the immense problems in the economy and the appalling industrial situation that we have. I do not accept that a decline of industry is a characteristic of our age. In the main, it is a self-inflicted wound and it will take time for industry to recover from the many self-inflicted wounds of past years. It will not be done by giving huge, wide-ranging reorganisation powers to selected Government-appointed agencies.
4.55 p.m.
Their Lordships divided: Contents, 61; Not-Contents, 92.

CONTENTS

Ardwick, L.

Boston of Faversham, L.

Collison, L.

Aylestone, L.

Brockway, L.

Cooper of Stockton Heath, L.

Birk, B.

Bruce of Donington, L.

Crowther-Hunt, L.

Blease, L.

Chitnis, L.

David, B. [Teller.]

Blyton, L.

Cledwyn of Penrhos, L.

Davies of Penrhys, L.

Donaldson of Kingsbridge, L.

Janner, L.

Ross of Marnock, L.

Elwyn-Jones, L.

Kaldor, L.

Shinwell, L.

Fisher of Rednal, B.

Kilbracken, L.

Snow, L.

Gaitskell, B.

Leatherland, L.

Stedman, B.

Galpern, L.

Lee of Newton, L.

Stewart of Alvechurch, B.

Gordon-Walker, L.

Listowel, E.

Stone, L.

Goronwy-Roberts. L.

Llewelyn-Davies of Hastoe, B.

Strauss, L.

Gosford, E.

Lloyd of Hampstcad, L.

Taylor of Mansfield, L.

Greenwood of Rossendale, L.

McCarthy, L.

Underhill, L.

Gregson, L.

Maelor, L.

Wallace of Coslany, L.

Hale, L.

Northfield, L.

Wedderburn of Charlton, L.

Hatch of Lusby, L.

Oram, L.

Wells-Pestell, L. [Teller.]

Henderson, L.

Paget of Northampton, L.

Whaddon, L.

Houghton of Sowerby, L.

Peart, L.

Wynne-Jones, L.

Hughes, L.

Phillips, B.

Jacques, L.

Plant, L.

NOT-CONTENTS

Alexander of Tunis, E.

Gainford, L.

Netherthorpe, L.

Ampthill, L.

Glenkinglas, L.

Nugent of Guildford, L.

Armstrong, L.

Gowrie, E.

Onslow, E.

Avon, E.

Gridley, L.

Orkney, E.

Bellwin, L.

Grimston of Westbury, L.

Pender, L.

Belstead, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Piercy, L.

Bessborough, E.

Porritt, L.

Boothby, L.

Halsbury, E.

Redmayne, L.

Bridgeman, V.

Henley, L.

Reigate, L.

Caccia, L.

Holderness, L.

Robbins, L.

Cairns, E.

Hood, V.

Romney, E.

Chesham, L.

Hornsby-Smith, B.

St. Davids, V.

Cholmondeley, M.

Hylton-Foster, B.

Sandys, L. [Teller.]

Clitheroe, L.

Inchyra, L.

Shannon, E.

Colville of Culross, V.

Keyes, L.

Sharpies, B.

Craigavon, V.

Kimberley, E.

Simon of Glaisdale, L.

Craigton, L.

Kinloss, Ly.

Soames, L. (L. President.)

Cullen of Ashbourne, L.

Long, V.

Somers, L.

Daventry, V.

Lothian, M.

Strathcarron, L.

Davidson, V.

Lucas of Chilworth, L.

Strathspey, L.

de Clifford, L.

Lyell, L.

Swinton, E.

De Freyne, L.

McFadzean, L.

Torphichen, L.

Denham, L. [Teller.]

Mackay of Clashfern, L.

Trefgarne, L.

Derwent, L.

Macleod of Borve, B.

Trenchard, V.

Drumalbyn, L.

Mancroft, L.

Trumpington, B.

Ebbisham, L.

Mansfield, E.

Vaux of Harrowden, L.

Ellenborough, L.

Margadale, L.

Vickers, B.

Elliot of Harwood, B.

Marley, L.

Vivian, L.

Emmet of Amberley, B.

Merrivale, L.

Westbury, L.

Exeter, M.

Morris, L.

Willoughby de Broke, L.

Fortescue, E.

Mowbray and Stourton, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.4 p.m.
Clause 2 [Transfer of property to Secretary of State]:
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendment No. 3:
Leave out Clause 2.
The noble Lord said: My Lords, this is another matter which was discussed by the Committee at some length. It deals with the right of the Secretary of State to direct that certain enterprises are handed over either to himself or to his nominee from the National Enterprise Board.
The reason that I have renewed the discussion on this matter today arises from a report that appeared in The Times on 6th May last from which, with the permission of the House, I will read a short extract. It says:
" Uncertainty over the future relationship between the National Enterprise Board and British Leyland is expected to be resolved shortly, with the Department of Industry taking over responsibility for monitoring BL's performance ".
It continues:
" Although Sir Keith Joseph, Secretary of State for Industry, has not yet decided how to resolve the continuing uncertainty, he is widely expected to use the powers contained in the Industry Bill now before Parliament and scheduled to be enacted at the end of this month. Under the new Act he can formally transfer BL from the NEB to the Department of Industry ".
I will not disguise from the House the fact that I am completely appalled by this terrible prospect. Sir Keith Joseph himself has assured us, repetitively, over the years that politicians are not the people to interfere in industry— indeed, that it is not their function and that this whole business is far better left to private enterprise individuals, with wide experience in industry and commerce and capable of being enthused by the perpetual motivation induced by lower direct taxation and all the benefits which are supposed to flow therefrom. I repeat: I am appalled at the prospect of the Department of Industry taking over BL from the NEB.
The noble Viscount has been good enough to quote from the annual report and accounts of the National Enterprise Board for 1979, which unfortunately were not to hand at the Committee stage. So perhaps it would be better if I were to illustrate the kind of difficulty in which we on this side of the House find ourselves when we read of the observations of the NEB, some of which were referred to by my noble friend Lord Lee of Newton and by other noble Lords on this side of the House in regard to INMOS. I quote from the chairman's statement:
" At the time of writing, three months after our decisions, we await a decision by Government both as to the consent for our investment and as to the company's application for an industrial development certificate. This is a worrying delay to a project where success depends on bringing satisfactory products to the market at the right time in the face of strong foreign competition ".
Are we now supposed to consent to a situation in which the same kind of delays in the making of decisions are to be in Sir Keith Joseph's hands vis-à-vis the future of British Leyland? Are they going to be paralysed by the kind of indecision to which the noble Viscount himself alluded somewhat obliquely by way of excuse? If so, the transfer of British Leyland to the tender mercies of Sir Keith Joseph will be a national disaster.
With the indulgence of the House, I should like to quote from a further section of the NEB report which has some bearing on this subject. Sir Arthur Knight, who, I believe, stands very well in Government circles, said:
"In all that we do there are inherent tensions. We must act commercially but in situations which the private sector alone is unwilling to tackle. Our criteria for investment are therefore special and we are in constant danger of being regarded
50
as 'a soft touch'. There can be nothing in our attitudes or behaviour which diverges from the best commercial practice. A second source of tension arises from the fact that we are spending public money. Pressures may be exerted which can easily lead to uncommercial behaviour or, at best, to delays which can be competitively damaging".
It is quite clear on any reading of the chairman's statement— or those parts of it that I have read— that he is referring to the Department of Industry. There can be no doubt whatsoever of that. Therefore do we wish the same type of tensions on top of their existing troubles to be transmitted further down the line to British Leyland? It is said— and I believe it to be true— that Sir Arthur Knight does not feel that the board at the moment can play any useful part in relation to BL. That may well be so; that may well be because Sir Arthur Knight has complete confidence in the existing management of British Leyland. Can the Government therefore indicate what kind of policies they intend to carry out if they use this clause to transfer British Leyland to the Minister? Have they any clue what they are going to do about it? Have they any clue what directions they are going to get? Of course it may well be that the report in The Times, which is usually very well informed on these subjects, is incorrect, and that the Government do not intend to use the powers under this Bill to transfer British Leyland direct to Sir Keith Joseph. If the noble Viscount can give us that assurance we may take a very different view of the whole matter. I therefore invite him to say whether The Times report has the substance of accuracy in it, or whether it is not the intention of the Government to do anything of the kind. I beg to move.
5.13 p.m.
Viscount TRENCHARD: My Lords, we explored very fully the purposes of Clause 2, both technical and substance, at the Committee stage and I resist the amendment for the same reasons as we adumbrated at Committee stage. The noble Lord, Lord Bruce of Donington, has raised two issues which I suppose by a thread could be attached to Clause 2 of the Bill and I think it necessary for me briefly to comment on them.
I have already made reference to INMOS in speaking to the last amendment and I have said that the Government

51
recognises that the delay in these two important decisions is unfortunate and will be kept to a minimum; and I have also said, in relation to almost the only critical quotation from the NEB report of the Government, that I do not believe cither Government or NEB could responsibly have refused to encourage discussions in relation to the possible future and whether it would be a beneficial future for INMOS and for micro-chip technology.
In relation to British Leyland, the noble Lord, Lord Bruce, did not quote the important reference in the NEB report to Rolls-Royce and British Leyland. This says:
" The Government has decided to relieve the NEB of responsibility for Rolls-Royce and at the time of writing is still considering whether to take similar action in regard to BL. My board and I made it plain on our appointment that we welcomed the opportunity to serve an NEB which would no longer be involved in either of these major companies. The magnitude of BL, its problems and its financial requirements, means that the Government must inevitably be closely involved in its major decisions, thus leaving for the NEB only a relatively minor intermediary role. We would gain nothing of substance by having this illusory responsibility ".
On previous occasions I have argued the case, which I support vigorously from my own industrial background, regarding putting a board of eminent gentlemen on top of a board of eminent gentlemen in the case of either Rolls-Royce or British Leyland and before you get a Government which cannot divorce itself from its responsibilities in relation to the shareholder and in relation to overall finance provided by the Government. This in no way contradicts the oft repeated remarks by my right honourable friend the Secretary of State that we have no intention of intervening in the management; but we are dealing with Government money, Government finance in huge operations, and to have an intermediary board in my opinion is not a sensible thing.
In the case of Rolls-Royce the arguments have been concluded and the decision taken. In the case of British Leyland we arc still considering that matter and will be discussing it further with British Ley-land, but I believe that certainly some of the same arguments (not quite all) apply to British Leyland as apply to Rolls-Royce. There is no question of either my right honourable friend, myself or the civil servants in the Department of Industry managing either of these two great companies. I resent the references made by the noble Lord, Lord Bruce, to my right honourable friend the Secretary of State. It is not his current role to manage these industries; and he is clearer of that and of the limitations of Ministers and civil servants in managing industry than noble Lords opposite seem to be.
In regard to the second quotation made by the noble Lord, Lord Bruce, from the NEB report, in my opinion the majority of that quotation refers to the relationship of NEB and subsidiaries or potential subsidiaries. The tensions that Sir Arthur Knight speaks of and of its being a "soft touch" are a soft touch for companies, and his emphasis that it must act really commercially in order to avoid the soft touch is one that I would entirely echo and I so indicated as the noble Lord was speaking. In the main he is speaking there of tensions in the market place. He makes some recommendations in his report where he believes (not surprisingly) that in a wide area the Government should consider things slightly differently; but in the main he and his eminent board are clearly content with their very major roles in which we wish them well. I wish to resist this amendment.
5.19 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 63; Not-Contents, 87.

CONTENTS

Ardwick, L.

Bruce of Donington, L.

David, B. [Teller.]

Aylestone, L.

Byers, L.

Davies of Penrhys, L.

Bernstein, L.

Chitnis, L.

Donaldson of Kingsbridge, L.

Birk, B.

Cledwyn of Penrhos, L.

Elwyn-Jones, L.

Blyton, L.

Collison, L.

Fisher of Rednal, B.

Boston of Faversham, L.

Cooper of Stockton Heat

Gaitskell, B.

Brockway, L.

Crowther-Hunt, L.

Gordon-Walker, L.

Goronwy-Roberts, L.

Leatherland, L.

Shinwell, L.

Gosford, E.

Lee of Newton, L.

Snow, L.

Greenwood of Rossendale, L.

Llewelyn-Davies of Hastoe, B.

Stedman, B.

Gregson, L.

Lloyd of Hampstead, L.

Stewart of Alvechurch, B.

Hale, L.

Lloyd of Kilgerran, L.

Stone, L.

Hatch of Lusby, L.

McCarthy, L.

Strauss, L.

Henderson, L.

Maelor, L.

Taylor of Mansfield, L.

Houghton of Sowerby, L.

Northfieid, L.

Underhill, L.

Hughes, L.

Oram, L.

Wallace of Coslany, L. [Teller.]

Jacques, L.

Peart, L.

Walston, L.

Janner, L.

Phillips, B.

Wedderburn of Charlton, L.

Kaldor, L.

Robson of Kiddington, B.

Wells-Pestell, L.

Kilbracken, L.

Rochester, L.

Whaddon, L.

Kilmarnock, L.

Ross of Marnock, L.

Wynne-Jones, L.

NOT-CONTENTS

Alexander of Tunis, E.

Gainford, L.

Merrivale, L.

Allen of Abbeydale, L.

Galloway, E.

Morris, L.

Ampthill, L.

Glenkinglas, L.

Mowbray and Stourton, L.

Armstrong, L.

Govvrie, E.

Netherthorpe, L.

Avon, E.

Gridley, L.

Nugent of Guildford, L.

Barnby, L.

Grimston of Westbury, L.

Onslow, E.

Bellwin, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Orkney, E.

Belstead, L.

Redmayne, L.

Bessborough, E.

Halsbury, E.

Reigate, L.

Boothby, L.

Harmar-Nicholls, L.

Robbins, L.

Bridgeman, V.

Henley, L.

Romney, E.

Caccia, L.

Holderness, L.

St. Davids, V.

Charteris of Amisfield, L.

Hood, V.

Sandys, L. [Teller.]

Chesham, L.

Hylton-Foster, B.

Sharpies, B.

Clitheroe, L.

Inchyra, L.

Simon of Glaisdale, L.

Craigavon, V.

Killearn, L.

Soames, L. (I. President.)

Cullen of Ashbourne, L.

Kimberley, E.

Strathcarron, L.

Daventry, V.

Kinloss, Ly.

Strathspey, L.

Davidson, V.

Lauderdale, E.

Swinton, E.

de Clifford, L.

Long, V.

Torphichen, L.

De Freyne, L.

Lothian, M.

Trefgarne, L.

Denham, L. [Teller.]

Lyell, L.

Trenchard, V.

Derwent, L.

McFadzean, L.

Trumpington, B.

Ebbisham, L.

Mackay of Clashfern, L.

Vaux of Harrowden, L.

Ellenborough, L.

Macleod of Borve, B.

Vickers, B.

Elliot of Harwood, B.

Mancroft, L.

Vivian, L.

Emmet of Amberley, B.

Mansfield, E.

Westbury, L.

Exeter, M.

Margadale, L.

Willoughby de Broke, L.

Forester, L.

Marley, L.

Young, B.

Fortescue, E.

Moved accordingly and, on Question, Motion agreed to.

5.27 p.m.
Viscount TRENCHARD Viscount TRENCHARD moved Amendment No. 4:
Page 12, line 5, at end insert—
("(3A) Where, apart from this subsection, the amount of a grant under Part I of the Industry Act 1972 towards expenditure falling within subsection (3B) below would be less than 20 per cent. of the expenditure, the amount shall instead be 20 per cent. of the expenditure.
(3B) The expenditure falling within this subsection is expenditure incurred—

(a) in providing an asset as part of, or on or for use in, qualifying premises in a relevant special development area in such circumstances that, by reason of Article 5 (1) and (4) (d) or Article 5A (2) and (5) (b) of the Assisted Areas Order 1979, any grant under Part I of the Industry Act 1972 towards the expenditure is to be made at
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the rate appropriate to a development area which is not a special development area, or

(b) in providing a building or works at any time as part of or on qualifying premises in a relevant development area in such circumstances that, by reason of Article 5 (2) and (4) (d) of that order, no grant may be made under Part I of that Act towards any expenditure incurred in providing machinery or plant at that time for use in those premises.

(3C) In subsection (3B) above—

(a) "relevant special development area" means an area which became a special development area on the coming into operation of the Assisted Areas Order 1977, the Assisted Areas Order 1979 or the Assisted Areas (Amendment) Order 1979, and

(b) "relevant development area" means an area which became a development area on the coming into operation of the Assisted Areas Order 1977, the Assisted Areas (No. 2) Order 1977 or the Assisted Areas Order 1979.").

The noble Viscount said: My Lords, I move this amendment which I believe to be entirely a technical amendment, — and I hope the noble Lord will not accuse me of calling things technical which are not technical. We discovered, following the changes in the regional policy which were brought in last July and some of which are consolidated in this Bill, that an unanticipated effect of those changes and of the transitional arrangements was taking place. This amendment relates solely to the situation of companies which have negotiated Section 7 aid, which your Lordships will remember is provided to support a project and is not automatic aid on capital like the regional development grant. Companies which have negotiated assistance to a project under Section 7 and whose project is located in an area that has been upgraded will inadvertently get for part of that project, as I shall explain, less than they anticipated. What was intended was to prevent companies in areas that were upgraded from getting a windfall extra regional development grant, over and above that which they anticipated getting at the time when they applied for aid and when aid was negotiated with them to enable the project to go ahead. Thus it is a technical amendment to reverse the unanticipated effect of the transitional provisions in the Assisted Areas Order 1979 and the Assisted Areas (Amendment) Order 1979 which, combined with the effects of the Regional Development Grants (Variation of Prescribed Percentages) Order 1979, would result, as I have said, in some companies in upgraded areas suffering an unintended shortfall of regional aid as a whole on a project.
The amendment has nothing to do with the intended reduction in both RDGs on assets provided after 1st August 1980, nor the consequence of a reduction in the total support for a project under Section 7 and RDGs in either downgraded areas or unchanged areas after the transition period. The companies affected are those who accepted offers of selective assistance of £ 20, 000 or more before the orders came into operation. The transitional provisions allow such companies the option of retaining the selective assistance, as negotiated, and receiving the RDGs during the period of the assisted project as if the areas had not been upgraded, or repaying
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selective assistance so far received and foregoing future assistance under the offer and receiving the new rate of RDG.
As I have said, the intention was to avoid companies who retained their selective assistance from receiving a windfall increase in grant more than had been used as a background figure in the negotiation leading up to the Section 7 grant. What has happened is that because the transition period ends on 1st August and because at that time in development areas the grant goes down from 20 per cent. to 15 per cent. for the residue of any project on assets not provided until after that date— because of that situation, a company under either of the options offered it to avoid a windfall will, in fact, be disadvantaged.
Perhaps I may give an example. In order to make the figures as simple as possible let us suppose that a company negotiated a Section 7 assistance of 10 per cent. of the project as grant and that that company was located in a development area which was upgraded with immediate effect in July last to a special development area. At the time the project was negotiated and the 10 per cent. was awarded, the company was working on the assumption of receiving 20 per cent. RDG. The combined legislation in the orders that I have mentioned was designed to avoid it receiving a windfall extra 2 per cent. and still getting the 10 per cent. which has been negotiated, possibly quite recently, on a different basis. But, in effect, because of the reduction in grant in development areas from 22 per cent. to 15 per cent. on 1st August 1980, the choice before it was either to forego the whole of the 10 per cent. Section 7 grant— in which case the project would only have received 20 per cent. support— or to retain that, but after 1st August 1980 to receive only 15 per cent. RDG on any remaining expenditure in relation to that project, which at times was quite a large amount,
Therefore, on that residue of expenditure it would get 10 per cent. and 15 per cent.; that is, 25 per cent., and not the expected 30 per cent. which it had originally done, the negotiation in order to achieve. This is all related to areas where, because of the greater need of the area— and there are areas where the need has become greater— it had been upgraded and where it was neither intended, nor

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would any company accept, that in an area that was upgraded as regards a project just negotiated it should, in fact, receive less than it had anticipated. Therefore, a rather complicated amendment is before your Lordships which is designed to remedy those effects.
There are 52 projects in the new upgraded special development and development areas which are affected by these transitional provisions with an expected loss of aid estimated at £ 480, 000. The amendment reverses this effect and provides that applicants in the new special development and development areas who opt to retain their selective assistance should continue to receive the 20 per cent. rate of grant during the period of their assisted projects. I must repeat once again that this is quite a separate case from those who have asked us to avoid the effect of part of a project receiving less than anticipated after the 12-months transition period, in both downgraded areas and in areas retaining existing development area status where the rate of grant falls after the transition period. These effects were intended and declared in what we believe was the fairest administratively practical way of bringing about the necessary savings and the concentration of aid on the areas of greatest need. I beg to move.
Lord LEE of NEWTON: My Lords whenever a Minister appears either at the penitent form or the Dispatch Box to tell us in either technical or untechnical language that they have found a need, because of their own shortcomings, to move amendments to their own Bill, my heart goes out to them. I have no more to say.
Clause 19 [Planning agreements and disclosure of information]:
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendment No. 5:
Leave out Clause 19.
The noble Lord said: My Lords, Clause 19 of the Bill which has come from Committee has the effect, among other things, of nullifying the effect of Section 21 planning agreements and it is that to which I specifically desire to refer. In the course
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of the debate in Committee the noble Lord was good enough to point out that the power under that particular section had rarely been invoked and he did mention some observations said to have been made by Sir Harold Wilson after he ceased to be Prime Minister. I must inform the noble Lord that, although I am a very considerable admirer of Sir Harold Wilson and agree thoroughly with the policies that he pursued as Prime Minister, I do not necessarily associate myself with the remarks that he made when he no longer occupied that exalted office.
The reason that I am calling the whole matter of planning agreements into question is one again connected with a very informative article that appeared in The Times on 1st May. It is by Mr. Peter Hill, who is the industrial editor of The Times, and it is quite clear from its whole content that it could have been written only with substantial, unofficial conversations with spokesmen or other officials of his department. That is quite authorised and there is nothing improper about it in any way. It is what he says that concerns us. He says:
"Plans for expanding the level of public sector purchasing by Government departments, agencies and the nationalized industries, which could benefit the private sector by hundreds of millions of pounds, are being prepared by the Department of Industry.
First results of the detailed work now underway in Whitehall should emerge by the autumn. The plan is being supported by Mrs. Thatcher, the Prime Minister and by Sir Keith Joseph, Secretary of State for Industry, against the background of continued gloomy forecasts by the private sector based on high interest rates and the strength of sterling".
The article continues:
" The Department of Industry has been charged with taking the lead in formulating policy on increased public sector purchasing and identifying opportunities ".
I read this with a slightly raised eyebrow because of course "planning" in any form is a dirty word to the Conservative Party. As is well known, we have endeavoured to point out to the Conservative Party that one of the advantages inherent in any nationalised industry is that it enables a planned demand to be made upon private industry for the supplying to publicly-owned industries of a very considerable amount of their requirements. Indeed, the use of the nationalised industries for the purpose of stimulating demand for the supply of goods

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and services from the private sector has for long been regarded on this side of the House as one of the advantages of having industries in public ownership. It enables the Government to use them in some ways as a sensitive instrument to stimulate demand where demand is required in the private sector.
As I say, if this be true— and I have no reason to doubt it from such an illustrious source as The Times — then we welcome the conversion of the Government to this point of view. But quite clearly, if they are going to do it, they must go the whole hog— or at least they would deem it wise to go the whole hog— because quite clearly they cannot formulate plans until they know the extent to which the private sector is able to supply some of the demands of the publicly-owned industries. They cannot know the capability of various sections in the private sector unless they get a good deal of information by it, and, in protection of the taxpayers' money— I emphasise once again the term, "taxpayers money"— I should have thought that it would have been prudent for the Government to make it a condition, for the organisation of their own plans, to conclude some planning agreements with some of the private companies involved; otherwise, perish the thought, they would be subject to political pressure from all sections of private industry that suddenly apprehended that their own turnovers could be increased if only they could influence the Minister to say that the publicly-owned industries should buy from them.
Quite clearly, they would not like public funds to be used in that way. Therefore, if it is to be planned on one side, surely it should be planned on the other. It should not be left to the caprice of private industry, where the public sector is to be required "to take part in the plans" that they have at present in mind. Therefore, it is to elicit some information from the Government as to how seriously we are to take this expressed intention of the Government that we move this amendment; in addition to which there are, of course, other matters in connection with the information that was required under the other sections, which are referred to in Clause 19, on which we require further elucidation. I beg to move.
5.45 p.m.
Viscount TRENCHARD: My Lords, in our view planning agreements do not have a part to play in the kind of way in which we believe the Government can steadily— not all at once, with any magic wand— improve the climate and conditions for the efficiency of British industry. They really were a dead letter from the start. There have been only two planning agreements; one with a company which was being rescued by the Government and the other with a nationalised industry. Both agreements have lapsed and will not be renewed. Therefore, we believe that this power which is certainly fundamentally inconsistent with the Government's approach to their relations with industry, should be removed.
The noble Lord, Lord Bruce of Donington, has mentioned public purchasing, which is a large and very interesting subject which I should love to have the opportunity to debate more fully in public. There have been no conversions of policy. I think that our predecessors underwent a development of policy. My right honourable friend the Prime Minister has announced in the House of Commons the basis of our attitude towards public purchasing. I have asked my advisers in the box for a note as to the date of that announcement; if I do not get it, I shall let the noble Lord, Lord Bruce, have it. But about a month ago the Prime Minister made very clear the policy on public purchasing, and it is in that regard that the Department of Industry is following up her policy exactly as enunciated and as agreed in consultations before she made that statement.
It is not a policy of "Buy British anywhere at any time". It is not a policy— and I know that the noble Lord did not quite say this— of "Throw hundreds of millions here and there", or as the article in The Times suggested. It is a policy of Government customers and potential suppliers getting much more closely together at a much earlier stage so as to give British industry every opportunity to be competitive when the time for quoting comes along. I am afraid that I cannot give the noble Lord that date; my advisers do not have it with them in the box; but I shall send the noble Lord, and anyone else who wishes it, a copy of Hansard of that date. However, there

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are no secrets about it. Responsible journalists are good at writing newsworthy articles. There are no mysteries here at all. There will be a steady evolvement of trying to make sure that wherever possible the combined needs of public authorities to get real value for taxpayers' money and the most frequent success of British suppliers in tendering, will be achieved. It is those two needs that must be put together. Therefore, leaving public purchasing on one side, I should like to resist the amendment on planning agreements for the reason that I previously outlined.
On Question, amendment negatived.
Lord SANDYS: My Lords, I beg to move that the House do adjourn for about 10 minutes until six o'clock, in view of the fact that we have now concluded the Report stage ahead of schedule.
[The Sitting was suspended from 5.50 p.m. until 6 p.m.]

SOUTHERN RHODESIA (SANCTIONS) (AMNESTY) ORDER 1980
Lord TREFGARNE Lord TREFGARNE rose to move, That the order laid before the House on 23rd April be approved. The noble Lord said: My Lords, I wish at the outset to apologise for not being in my place a few moments ago; the speed of the Industry Bill left me speechless.
Lord ELWYN-JONES: And absent.
Lord TREFGARNE: Quite so, my Lords. In moving the first Motion standing in my name on the Order Paper, I will, with your Lordships' permission, speak at the same time to the second Motion standing in my name, but move the latter only formally when we come to it.
The Sanctions Amnesty Order 1980 is made under Section 3 of the Southern Rhodesia Act 1979 by which power was granted to deal with the consequences of the expiry of sanctions provisions. The
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purpose of this order is to provide for an amnesty, and the discontinuance of criminal proceedings, for offences against those measures which provided for the imposition of economic sanctions against Rhodesia. My noble friend the Foreign Secretary gave the background to the Government's decision to grant an amnesty for sanctions offences in his Statement on 15th April. An amnesty in United Kingdom law was granted by the Zimbabwe Act 1979 for political offences in connection with UDI. Subsequently, a comprehensive amnesty was granted by the Governor in Rhodesian law. In these circumstances, the Government judge it inappropriate to initiate further prosecutions arising out of the tragic business of UDI, and this order provides accordingly.
There are no prosecutions for sanctions offences pending and the appeal to which my noble friend referred on 15th April has now been determined. This order does not pardon the actions of past sanctions-breakers, nor does it affect past convictions. However, with the decision of the Director of Public Prosecutions not to proceed over matters arising from the Bingham Report, and in the absence of any pending proceedings, the Government believe a line must now be drawn under the past. This country and British industry in general had a good record in the maintenance of mandatory sanctions against the former illegal regime. No Western country sacrificed more in this cause. There is no evidence to suggest that any major evasion of sanctions by British firms or individuals has taken place which has not already been investigated by the authorities and, where appropriate, dealt with by the courts.
But the era of Rhodesian illegality ended last December. The newly independent Zimbabwe has now taken its rightful place in the world community. His Royal Highness the Prince of Wales, in the presence of very many distinguished world leaders, has handed over the instruments of power to a Government fairly chosen by the people. It cannot surely be right in these circumstances to con-templace new prosecutions for offences which were part of our apparatus of disapproval of an illegal government no longer in power. To do so would serve only to open old wounds to no one's advantage. I do not believe that, in

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this context, the continuance of prosecutions for sanctions offences would be regarded as anything other than an anachronism and a reflection of the past to which the people of Zimbabwe and the world outside are now pledged to forget. I believe your Lordships will agree that a comprehensive amnesty both for political and sanctions offences is an important element in the overall settlement of the Rhodesian problem and that with such an amnesty we can build on the spirit of hope and reconciliation which has transformed Zimbabwe over the past few months.
I turn to the second Motion in my name relating to the Zimbabwe (Independence and Membership of the Commonwealth) (Consequential Provisions) Order 1980. When the Zimbabwe Act was enacted it was uncertain whether Zimbabwe would attain independence as a member of the Commonwealth. The British Government took the view that it would be for the incoming government of Zimbabwe to decided on Commonwealth membership. The Act was therefore drafted on the basis that Zimbabwe would become independent outside the Commonwealth, but a power was included to enable the necessary modifications to be made in the event of a decision in favour of Commonwealth membership. The Zimbabwe Act also contains a power enabling the modification of enactments or instruments in consequence of Zimbabwe's independence. In the event, Mr. Mugabe applied shortly after his election victory for Zimbabwe to become a member of the Commonwealth when it attained independence. It was announced on 9th April that this application had been unanimously accepted by Commonwealth members and that Zimbabwe would come to independence as the 43rd member of the Commonwealth.
The main object of this order, therefore, is to give effect in the law of the United Kingdom to Zimbabwe's Commonwealth membership. It also contains further provision consequential upon Zimbabwe's independence. In brief, the effect of the Articles, taken in order, is as follows. Article 2 (1) restores Zimbabwe to the list of Commonwealth countries from which it was removed by the Zimbabwe Act. Article 2 (2) renews the status of British subject— that is, Commonwealth Citizen— for those who enjoyed the status
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by virtue of their citizenship of Southern Rhodesia before independence and who became citizens of Zimbabwe on independence. Article 3 repeals two transitional provisions now unnecessary concerning applications for citizenship of the United Kingdom and Colonies by persons with a Southern Rhodesian connection. Article 4 repeals that part of the Zimbabwe Act which preserved for a limited period for Zimbabwean citizens the benefits of the status of British subject. This provision is no longer necessary now that Zimbabwe is in the Commonwealth. Articles 5 and 6 make provision in connection with the Government of Zimbabwe assuming responsibility for the stock and debts of the Government of Southern Rhodesia. Mr. Mugabe has stated that his Government will honour pre-UDI debts and talks are taking place in London at the moment with a view to reaching a mutually acceptable arrangement.
Lord ELWYN-JONES: My Lords, in relation to Articles 5 and 6, the Minister mentioned that they deal with stocks and debts of the Government of Southern Rhodesia. I do not see any reference to debts. If they are intended to cover debts, what is the position in regard to debts incurred by the illegal Government of Rhodesia between 1965 and 1980? Presumably Mr. Mugabe's Government are not accepting responsibility for those, so what is the position about those?
Lord TREFGARNE: I have it in mind, my Lords, that I should speak again at the end of this short debate, and perhaps the noble and learned Lord will allow me to deal with that matter in more detail then. As I said, Mr. Mugabe has stated that his Government will honour pre-UDI debts, and talks are taking place in London at the moment with a view to reaching a mutually acceptable arrangement.
The schedule to the order contains a number of technical and consequential provisions concerning diplomatic immunity, evidence, the enforcement of judgments, inter alia fraud prevention, solicitors and double taxation relief. The basic intention is to provide for the application in relation to Zimbabwe of relevant enactments and instruments in these fields. Zimbabwe is also accorded the status of a Commonwealth country in relation

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to the Commonwealth Institute, and to service and visiting forces law.
In all probability, this will be the last legislation concerning the transition of Southern Rhodesia to independence. It is a moment which your Lordships may wish to savour. I therefore beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Order laid before the House on 23rd April be approved.— (Lord Trefgame.)
6.10 p.m.
Lord BROCKWAY: My Lords, all Members of your Lordships' House will welcome the amnesty in Rhodesia for those who committed military offences during the war and for those who committed political offences during UDI. These steps are necessary for reconciliation in Zimbabwe itself. However, I regret the decision of the Director of Public Prosecutions not to proceed in the cases of alleged sanctions breaking by prominent oil companies. I am strengthened in that view by the annex to the Bingham Report— to which little attention has been drawn— headed "Evidence of Criminal Offences". The annex lists all the companies involved, and at great length it also gives the names of the directors of those companies, I regret to say that those directors include a number of Members of this House, including at least one who had close association with the Foreign Office.
The Minister said that he is doubtful whether other companies not yet discovered broke sanctions, and that he has no knowledge of this. I submit to the House that not only oil sanctions were broken; sanctions were broken over a much larger field. Would it really be necessary for the order to be produced if there were not other British firms concerned? The order refers to companies who are alleged to have broken sanctions and who have not yet been exposed. It refers to them only. These would be cases not of activity in Zimbabwe but of breaking British law in this country.
It is difficult to overstate the seriousness of the offence. It amounted to a conspiracy to assist an illegal Administration in rebellion against the Crown. These offences were committed purely for monetary gain. Those guilty placed
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profits for their companies before a sense of patriotism to this country. They were also offences against international decisions which had the effect of international law. The sanctions were authorised on British initiative by the United Nations Security Council.
One must face the fact that sanctions-breaking meant the loss of hundreds of lives in Rhodesia and in the civil war. If the sanctions had been applied with the co-operation of big business, UDI would have ended much earlier and the civil war would have been concluded before it reached its climax of destruction. The sanctions breakers have that on their conscience. I submit that it should be on the conscience of this Government as well, if they now condone the guilt of those who so far have escaped discovery.
We shall be asked this week to endorse sanctions against Iran. I shall oppose those sanctions because I believe that they will endanger the lives of the hostages, rather than save them. But how can those who will vote in favour of sanctions against Iran also vote for this order, which provides an amnesty to sanctions breakers? Will not this order positively invite breaches of sanctions imposed against Iran? Sanctions breakers will feel that this is a precedent allowing them to go scot-free. My Lords, I hope that this House will reject the order.
6.16 p.m.
Lord HALE: My Lords, my very old and noble friend, and my best political friend, has done a considerable service to the House in putting these facts before it. I came here informed, to my surprise, that the Labour Party were proposing to vote against the order. I came to follow the course of a decision that I have taken already, to say that I support the order. I support it fully realising the strength, the power, the sincerity— which is always there— of all that my friend has said. I support it thinking that but for other considerations I might have been tempted otherwise. My first view is this. I shall not start coining a phrase about amnesty being indivisible; but amnesty is a position which if taken up abstains from distinctions.
The spirit which prompted that wonderful organisation which is endeavouring

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to consider the question of the application of human rights all over the world, by men of vastly different religions— the religion of some of them includes hatred as a virtue— is a very complex matter indeed. If we are now to say let us rejoice, and let us give Zimbabwe a chance, let us not muck it up with attempts to bring cases which can never succeed. I doubt whether any practising lawyer will ever tell your Lordships that people should be charged with offences in breach of these regulations— vague, ambulatory and so on— over years that are passed, in times of acute controversy when Ministers themselves were being accused of letting sanctions go by and going to sleep, and when it was being said that the British Navy was deliberately watching the wrong port. Let us not forget these things.
The Bingham Report was a very thorough report, and after that we had to consult ourselves as to whether we should go further and endeavour to embark upon criminal prosecutions when there was clearly evidence that oil companies might say, "We were negotiating with that particular section of ministerial officers which deals with this matter". They have said it. We know that they are going to say it. We know that, even on pragmatic grounds, the intention is to do something; it does not vindicate justice. It expresses a determination to blame somebody for it— not us. I was one of those who were to blame. I have never been to Rhodesia; but I was certainly a Member of Parliament during this period, and I was certainly a Member of the House of Lords at some time during this period. Not many of us really asked ourselves very carefully what was happening, and why cars in Rhodesia were running, with every seat taken, in full sight of men. Many of us, very conveniently, did not ask ourselves what was happening to the chrome of Rhodesia. Every one of us who cared to know knew it was going to America. As to whether or not it was in President Carter's time, I do not think it was, to be fair to him, but we shall have another appeal, as allies, to back America on the question of sanctions.
I take the view that, after all the discussions we have had and after all the praise we have lavished, we should now say, "Call it a day". This is the moment
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when amnesties are granted; a moment when there is something to celebrate; a moment when there is something to be pleased about; a moment when we can say that, just because they happen to be big companies and not individuals— and even big companies, I am afraid, have got to exist— to embark on further bitterness will serve no purpose, and this order as presented is an order that commends itself to the main decencies of most Members of this House.
6.22 p.m.
Lord HATCH of LUSBY: My Lords, it is not often that I disagree with my noble and old friend Lord Hale, but I do so on this occasion, and I take his own words to illustrate my first disagreement. My noble friend said that amnesty means the abolition of discrimination. This amnesty does not mean the abolition of discrimination, because according to this order those in this country who (I put it no higher than this) may be guilty of breaking sanctions in the past are going to be given preference over those companies which have already been convicted and fined for the same offence. So far as discrimination is concerned, therefore, this order introduces discrimination; and I wish that the noble and learned Lord the Lord Chancellor were here, because I should very much like to hear his views on the question of natural law. Does it square with natural law that certain groups of people and certain individuals should be penalised under our law for an offence when we are now asked to grant an amnesty to other people who have been accused of the same offence? I doubt it; and it is for that reason that I disagree with the argument that my noble friend has put forward.
But is it not curious, my Lords, that this order comes from the party that claims to be the party of law and order? All Governments since 1965, Conservative and Labour, have maintained the law imposing sanctions on the illegal regime in Salisbury. We are now being asked to give a blanket amnesty to those companies and those individuals who broke that law, and who broke that law for no other reason than economic gain. I hope that the noble Lord the Minister who introduced this order, when he visited Salisbury for the independence celebra-

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tions, also went round such African townships as Harari, and went out into the countryside, and saw some of the cripples, some of the damage and some of the destruction caused to that country as a result of the war. Without blaming one side or the other, are we not entitled to say that if the sanctions law, as it was imposed by Labour and Conservative Governments alike, was designed to shorten that war, then those who broke that law are themselves responsible for the thousands of deaths and mutilations, and the massive destruction that has continued over the last 15 years? And, if they are— and most of them are large companies, particularly oil companies— should they not now be paying some compensation? Is it not a usual principle in an amnesty to confess one's sins and pay compensation for them? That compensation, surely, is due first to Zimbabweans, but also to Zambians and to Mozambiquans, who have suffered in some ways equally with the people of Zimbabwe as a result of the breaches in sanctions which have bled both their countries.
We have heard of the Bingham Report, and we have been told again that the Director of Public Prosecutions decided not to proceed with those prosecutions. Like my noble friend Lord Brockway I disagreed and thought, as did indeed many legal minds in this country, that the reasons given for the refusal to prosecute were very weak indeed; but, beyond that, there is perhaps one bright spark that comes out of this. We were frequently told, and told particularly in this House, that one of the reasons why there should not be a parliamentary inquiry following the Bingham Report was that those who might be called as witnesses on oath could be incriminating themselves by appearing before such an inquiry. If this order goes through, that excuse has gone. If this order goes through, there will be no further excuse for not holding a parliamentary inquiry on the grounds that witnesses may incriminate themselves. They will already be amnestied; and whether or not this House agrees, I hope there will be a parliamentary inquiry into the affairs that were raised by the Bingham Report, if only because of the phrase used by a member of the party opposite, that this issue raises the whole question of the integrity of Parliament.
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Finally, there is a still bigger issue which is raised by this order— bigger, even, than that of the future of Zimbabwe and of Central Africa. It is the future of sanctions. There are many of us here— and I particularly bow my knee to my noble friend Lord Brockway for his long service, and to my noble friend Lord Noel-Baker— who have argued that the only alternative to war as a means of settling international disputes is economic sanctions. As my noble friend has already mentioned, this week, in another place and in this place, we are going to be asked by the same Government who proposed this order to impose another set of sanctions— this time on Iran. Will the Bill or order (however the Government decide to deal with it) asking for sanctions on Iran contain a provisional clause that there will be an escape route, that those who break that order will be excused?— because if this order is passed, as it will be, and when it is passed, what it is going to do is to weaken the use of sanctions themselves as a means of settling international disputes. Sanctions are one of the few non-violent international means of coercion still at the disposal of the international community. If it is now found that those who break the sanctions laws are going to be legally forgiven and that no penalties are to be exacted, then that means of settling international disputes will be thus much weakened.
I believe that we shall live to regret the means that we are now taking to weaken the international use of sanctions by saying to those who have broken the sanctions laws of this country under Governments of both parties: "Now we wipe the slate clean. We are not going to pursue you as we pursued those who did the same as you have done. We are now going to forget that we passed the law and that you broke it".
6.32 p.m.
Lord GRIDLEY: My Lords, I have listened with the greatest respect to the speeches of the noble Lords, Lord Brockway and Lord Hatch. I should like to support the Government proposition that there should be an amnesty. I should like to put this to both noble Lords. When I went to Rhodesia (or Zimbabwe as it now is) during the Lancaster House conference I found an overwhelming desire by the people of that country,

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both white and black, that the war should be ended and that there should be peace. We now have the chance of a settlement and of good government in Rhodesia under the Prime Minister, Mr. Mugabe. I feel with the utmost sincerity at this time that if we were to proceed with prosecutions— and I do not deny that in certain circumstances sanctions may have been broken and that possibly, in normal circumstances, prosecution might be justified— and possibly long-drawn-out prosecutions against the various individuals and companies who (it is alleged, at this stage) have broken sanctions, this would be the very source of dissatisfaction within Rhodesia itself, possibly setting black Rhodesians and white Rhodesians against one another. For that reason, in all sincerity this evening, I feel that this amnesty should be granted.
I should like to make one point in a final exposition of what I have said. At the end of the last war, I remember the criminal trials in Singapore where, of 12 Japanese brought to trial, six were executed. I would have wished at that particular time that the life of the camp commandant of the prison where I was incarcerated had been spared. I see no point in carrying on an Act to perpetuate something which is now in limbo. In Zimbabwe, the chances are that there will be peace, good government and prosperity. I think that this chapter should be closed on the question of sanctions.
6.35 p.m.
Lord WALSTON: My Lords, I find it very difficult to speak on this occasion because my instincts are entirely on the side of my noble friends Lord Brockway and Lord Hatch. I have always been what is described as a hawk over the matter of Rhodesia. When I was a member of the Government I criticised the Government from the inside, and when I left it— and my resignation was not entirely unconnected with my attitude towards their conduct of the Rhodesian affair— I criticised the then-Labour Government for taking too soft a view about it. I still believe that things would have been better had the "hawks" had the upper hand in that argument. Therefore, my instinct is to go into the Lobby with my two noble friends and others.
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But, my Lords, I come down on the side of my noble friend Lord Hale and, possibly regretfully, on the side of noble Lords opposite. My reason for doing so is basically because our great duty now is to do all that we can to see that the new country of Zimbabwe succeeds. It is going to have a very uphill struggle. It faces enormous problems. It is led, in my view, by a remarkable man whom later generations will describe as one of the great statesmen of Africa— a rash prophecy, but I believe it to be true. He has shown by his actions as well as by his words that he wants to wipe the slate clean; that he wants to start his new country without recriminations and without rancour over what has happened.
One of the most remarkable things that have happened in the Lancaster House proposals, in everything leading up to them and in everything since, is that a man who suffered, as Robert Mugabe suffered, at the hands of Ian Smith and his colleagues, should be prepared to sit down at the table with them, to talk with them and, since his victory, to say the things that he has said. I think it would be wrong indeed for us here, sitting thousands of miles away from the scene of this struggle that is now going to go on— not, thank God! a military struggle but an economic struggle— to rehabilitate a whole country with appalling difficulties facing it, to take a different line from the line which he so courageously is taking there. For that reason above all, I think that, much as I personally should like to pursue those who, as my noble friend Lord Brockway rightly said, prolonged the war, caused the death and suffering of many hundreds, many thousands, of people; much as the vindictive side of my character would like to do that, I still believe that we shall serve the best interests of Zimbabwe by following his example and by agreeing to this order.
6.40 p.m.
The Earl of ONSLOW: My Lords, I should just like to point out one small thing. Some 20, 000 people were killed in the war in Zimbabwe, tens of thousands of people are paraplegic, possibly hundreds of thousands of people were wounded, maimed, hurt, displaced and terrorised. The people who actually wounded, maimed, hurt, displaced or terrorised on either side, be they Selous

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Scouts, ZIPRA or ZANLA, are not being prosecuted. Nobody is being prosecuted. There is a call for amnesty, reconciliation and forgiveness. We all believe it to be right for an amnesty for these people. Of course this is preferential treatment. Some of them were hanged. Some of them suffered actually during the war. For us to contemplate further petty prosecutions of somebody for "flogging" razor blades, oil or whatever it is, would be mean, vindictive and counterproductive. I am totally and completely on the side of Her Majesty's Government. This is a good example of forgive and forget. Of course the sanctions-breakers were wrong; but let us forgive, forget and end it now.
6.41 p.m.
Baroness GAITSKELL: My Lords, I am very worried about this business of enforcing sanctions, either against Zimbabwe or even against Iran. It is a very tricky issue. Sanctions, if applied to Rhodesia, are very unfair— no one can deny that— to the freedom fighters, to the people who fought and who have suffered. There is no doubt about that. I can only say that I would understand it if the Government, instead of enforcing sanctions, would raise their miserable £ 75 million that they have offered to Zimbabwe for the suffering that all those people there have gone through. I cannot support sanctions wholeheartedly for Zimbabwe or even for Iran.
6.42 p.m.
Lord GORONWY-ROBERTS: My Lords, the House has, I hope for the last time, considered an order relating to Rhodesia or Zimbabwe. It has done so with evidence of very deep feeling about the issue of the amnesty proposed in the first of the two orders. So far, at least, it has considered with a remarkable absence of recrimination and rancour this very testing question for all of us. I join my noble friend Lord Walston, who says that our first duty today is not to do or say anything which will in any way imperil the further progress of Zimbabwe on peaceful and democratic lines into independence within the Commonwealth. However, we may differ a little as to our attitudes on these two orders, bearing in mind that major objective. If the House will bear with me for a few minutes, I
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should like to put the position as I see it and as I think the majority of my noble friends on this side of the House see it.
As to the second order, which is consequential upon the acceptance by the Commonwealth of the 43rd Member, there can be nothing but enthusiastic agreement. We are delighted that this has happened on its own volition. I have presided over constitutional discussions and have never asked them: "Would you like to be a member of the Commonwealth?"; they have asked me. In this case one of the most remarkable gestures of statesmanlike goodwill on the part of the new Prime Minister and Government of independent Zimbabwe was that they said: "We wish to apply for membership of the Commonwealth".
This order finalises and formalises in all its consequences the fact of their membership of the Commonwealth. All of us look forward to having the benefit of their contribution to the deliberations of the Commonwealth and of their cooperation in the various agencies— some of them very important indeed— which carry forward the great work of the Commonwealth. So, on the second order, there is no disagreement in this House.
As to the first— that relating to the blanket, retrospective amnesty— we have profound reservations. There are two views on this matter. We have heard both those views put most powerfully this evening. There is the one that says: "Let bygones be bygones. Let us draw a thick line under the past and look to the future". There is the other that says: "Unless you make it absolutely clear that there shall be no expectation of amnesty for the breakers of national— and, ultimately, international— law then the whole efficacy of economic sanctions as a substitute for military action is destroyed ".
My noble friends and I, in all sincerity, will vote against this particular order; but we do so not in recrimination about the past, but in reinforcement of the future. One thing has come out of all these years of discussing sanctions and their application: many have felt that sanctions are ineffective and should be abandoned. That is a dangerous mood for any member of the United Nations and any subscriber to its Charter to take. Once we

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abandon the possibility of non-violent economic pressure on the lawbreaker, we are left with no alternative but war, or indeed surrender. I would ask my friends on both sides of the House to consider very carefully whether they are serving the greater purposes of the peace of the future by denouncing sanctions as such by urging that they should never be part of the armoury of the international authority to guard and preserve the peace.
I believe that non-violent economic sanctions together with peace-keeping and peace-making are of immense importance to the maintenance of international law and order in the future and the preservation of the peace. There are others who say that in any case they are ineffective. But so is war. For centuries we have applied the dread arbitrament of force to international disputes, and have learned very little from it. From this last attempted application of non-violent means of coercion we can learn a lot. It is this to which J hope we shall address ourselves. Certainly I do not wish to stir up sterile recrimination about what has passed; but we have a duty to study very carefully the lessons of the past so that in the future we avoid those past mistakes.
I want to make three points before I invite those who agree with me to make this gesture in the Lobbies tonight. First, we should assert that we regard the instrument of non-violent economic sanctions as part of the armoury of the world to preserve order and to preserve peace. Secondly, we should learn from the imperfect attempts to apply this instrument, for instance in Rhodesia— not completely ineffective but certainly imperfect, as we heard tonight. We should learn from the experience of our admittedly imperfect attempts to apply it as to how constantly to improve this instrument for the future, so that nations whom we saw during the past 15 years were hesitant about throwing themselves wholeheartedly into this international action will in the future have more confidence to co-operate in international J action.
Thirdly, in any proposal we put forward, we must above all avoid either on our own behalf (as may be imminent in the next few days) as a country, or in concert with friends or in the United Nations,
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in the name of the world, creating an implicit precedent that although sanctions are to be engaged in, at the end of the day there will be a general amnesty for those who broke them. That is the point made by the noble Lord, Lord Hatch, with great force, and it is something which concerns us all.
If, as I hope, there is a determined effort made in the United Nations, and severally in individual countries, to learn from the past so as to refine and make more effective the bloodless instrument of economic pressure, then surely to include in any provision for such a pressure any assumption beforehand there will be no sanctions against the sanctions breakers will destroy every hope we have of building up an effective alternative to war as the instrument of settling international disputes.
That is the approach we have to this question. We deeply respect the sincerity of feeling on both sides on this issue; but it goes beyond Rhodesia. It goes to the very heart in the future as to how the nations of the world, through the United Nations, fashion and increasingly perfect and learn from deficiences and experience an alternative to war which will give them confidence as well as security and peace.
It is therefore in no spirit of recrimination or any desire to stir up the old agruments about Rhodesia that I state clearly from this Box that the Opposition will vote against this particular order. Having heard what they have heard this evening and having studied what has been said in the other place with great force and sincerity, particularly by my right honourable friend Mr. Peter Shore, I hope that the Government will take on board that we will not accept proposals even for non-violent action of this kind, if inside them there is an assumption of this sort of retrospective, indiscriminate amnesty for people who, for profit, broke the law of this country and, in doing so, helped not only to hearten the people of Rhodesia but to weaken one of the best hopes of mankind for a really effective alternative to war.
6.53 p.m.
Lord TREFGARNE: My Lords, I confess to being somewhat surprised by the tone adopted by some of your Lordships concerning this order, especially as

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the announcement by my noble friend on the 15th April that there would be a sanctions amnesty drew no reaction whatsoever from your Lordships— and indeed the noble Lord, Lord Hatch, who has waxed so eloquent this evening, was not even in the House on that occasion. In commending this order to your Lordships, I must make one point quite clear. Certain noble Lords, including in particular the noble Lord, Lord Goronwy-Roberts, have referred disapprovingly to the granting of what they call "a blanket amnesty", thus giving the misleading impression that an amnesty is being given to a very large number of people known to have committed offences. My Lords, it is not. As I explained in my introductory speech, this is simply not the background against which the Government are introducing this measure. There-are no prosecutions pending: indeed there are no proceedings pending and no evidence whatsoever to suggest that any major evasion by British firms or individuals has not been the subject of full investigation by the authorities. Furthermore, I believe that a number of your Lordships are attempting, by means of a debate on this order, to revert to the Attorney General's Statement in another place last December on the Bingham Report.
The decision of the Director of Public Prosecutions not to proceed on the matters arising from the Bingham Report was a legal matter. It was not a decision taken by this Government. The DPP had to consider and assess the enormous quantities of oil company documents available in this country. The decision not to proceed with the further inquiries was taken by the DPP totally independently of the Government and was based upon the impartial advice from outside counsel. His decision was based upon the evidential problems involved, and his conclusions as to the chances of successfully mounting prosecutions were that these were remote. I believe his conclusions should be respected.
Can I just touch on some of the other points that have been raised this evening. The noble and learned Lord, Lord Elwyn-Jones, asked me about the debt provisions, which are actually covered by the second order but to which I referred in my opening speech. I am advised that my noble friend— the governor as he then was,
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Lord Soames— validated, with effect from the return to legality, a number of transactions including debts incurred by the Smith and Muzorewa régimes. The "independence" Government of Mr. Mugabe succeeded to these obligations as well as to the pre-UDI debt, but these obligations are not, in any event, affected one way or the other by this order. The noble Lord, Lord Hatch—
Lord ELWYN-JONES: My Lords, may I thank the noble Lord for giving way. Will payment of those debts, incurred by the Smith regime in the period of illegality, by the successor Government of Mr. Mugabe be necessary? Also, will the amount they have to pay come off any grant-in-aid the Government will name in the meantime? If that were the position it would be perfectly appalling, would it not?
Lord TREFGARNE: My Lords, I am sure that is not the position. I think the noble and learned Lord may be referring to the oft-quoted £ 75 million of aid. It is certainly not the case that repayment of debts should come from that aid allocation, but it is the case that the various debts incurred during UDI, which have now been accepted by the new Government, will have to be repaid in due course. But doubtless, like all the other debts which Mr. Mugabe has accepted, the timing and dates of repayment will be negotiated with the creditors, and agreed in due course.
Lord WALSTON: My Lords, will the noble Lord let us know if included in those debts are those which were incurred by the Smith regime for arms imports from South Africa?
Lord TREFGARNE: My Lords, I have not got that information in front of me, but I will find out if I may and write to the noble Lord. I was coming to the remarks of the noble Lord, Lord Hatch, who, I think, once again, if I may say so, has not fully understood the nature and extent of the change which has taken place in Zimbabwe following the Lancaster House agreement and the elections which took place earlier this year. The noble Lord asked me whether those who had sinned should not confess. I am not quite sure who he now says should confess because, as I have said, there are no

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prosecutions pending and we are not aware of anybody who really ought to be prosecuted in this matter.
Lord KILBRACKEN: Why not?
Lord TREFGARNE: My Lords, if the noble Lord had listened to my earlier speech, he would have heard the reasons for that. The noble Lord, Lord Walston, and the noble Earl, Lord Onslow, on different sides of the House were most helpful and I thank them for their contributions. My Lords, finally, to the noble Lord, Lord Goronwy-Roberts, who referred to a blanket and retrospective amnesty, I will say as I said earlier; this is no such thing. I must also refute the allegation.
Lord GORONWY-ROBERTS: My Lords, will the noble Lord forgive my interrupting? If evidence emerged showing gross violation of the law of this country in relation to our obligations and to the various enactments we passed, and if those violations emerged now, would they be covered by this amnesty? If it were reported, with prima facie evidence, that there had been violations of the law at some time in the past few years before independence, surely the effect of this order is to ignore such evidence and to declare that the amnesty covers anything tlat comes to the knowledge of the Government from now on about that period in that particular field.
Lord TREFGARNE: My Lords, the noble Lord, I think, is describing a purely hypothetical situation. The situation we are faced with at present is that there have been a number of prosecutions which will stand. There is no question of a pardon for convictions which have already been made. We are saying we shall not
continue indefinitely the "witch hunt", if those are the right words, of people who may or may not have committed offences under the sanctions legislation. We shall draw the line, now that Zimbabwe has come to independence. The intention behind this measure is to continue the logical process of granting an amnesty to those involved in the sad events of the past 15 years. An amnesty for political offences was granted in the United Kingdom and in Rhodesian law so as to assist the implementation of the Lancaster House Agreement. An amnesty for sanctions offences was not necessary to the functioning of the Governor's administration, but the British Government have always considered it an important element in making a clean break with the past.
I believe that the effect of this order on the development of close Anglo-Zimbabwean commercial and economic relations has been underestimated by some of your Lordships. Some have given the impression that sanctions breaking has only a British connection and that somehow no Zimbabwean citizen might be involved. In my experience, commercial transactions tend to involve more than one party and I believe that this amnesty will help to build confidence among individuals and institutions in Zimbabwe which are now committed to support the new Government there, and work for the reconciliation for which Mr. Mugabe has so eloquently called. This order is an important and logical element in that settlement.
7.3 p.m.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 33.

CONTENTS

Ailesbury, M.

Davidson, V.

Gridley, L.

Alexander of Tunis, E.

de Clifford, L.

Grimston of Westbury, L.

Alport, L.

De La Warr, E.

Halisham of Saint Marylebone, L. (L. Chancellor.)

Ampthill, L.

Denham, L. [Teller.]

Auckland, L.

Drumalbyn, L.

Hale, L.

Avon, E.

Elliot of Harwood, B.

Hall, V.

Barnby, I,.

Exeter, M.

Harvington, L.

Bellwin, L.

Ferrers, E.

Henley, L.

Belstead, L.

Forester, L.

Holderness, L.

Chesham, L.

Fortescue, E.

Hunt of Fawley, L.

Colville of Culross, V.

Fraser of Kilmorack, L.

Inglewood, L.

Craigmyle, L.

Gainford, L.

Kaldor, L.

Cullen of Ashbourne, L.

Galloway, E.

Kilmarnock, L.

Daventry, V.

Gowrie, E.

Kimberley, E.

Long, V.

O'Hagan, L.

Strathspey, L.

Lyell, L.

Onslow, E.

Swinton, E.

McFadzean, L.

Orkney, E.

Teviot, L.

McGregor of Durris, L.

Reigate, L.

Torphichen, L.

Mackay of Clashfern, L.

Romney, E.

Trefgarne, L.

Macleod of Borve, B.

St. Aldwyn, E.

Trenchard, V.

Mancroft, L.

Sandys, L. [Teller.]

Trumpington, B.

Mansfield, E.

Selkirk, E.

Vaux of Harrowden, L.

Margadale, L.

Sharpies, B.

Vickers, B.

Marley, L.

Shepherd, L.

Vivian, L.

Monson, L.

Soames, L. (L. President.)

Walston, L.

Mowbray and Stourton, L.

Stamp, L.

Westbury, L.

Netherthorpe, L.

Stedman, B.

Winterbottom, L,

Nugent of Guildford, L.

Strathcarron, L.

Young, B.

NOT-CONTENTS

Ardwick, L.

Gosford, E.

Noel-Baker, L.

Bernstein, L.

Hatch of Lusby, L.

Oram, L.

Birk, B.

Janner, L.

Peart, L.

Blease, L.

Kilbracken, L.

Phillips, B.

Boston of Faversham, L.

Lee of Newton, L.

Pitt of Hampstead, L.

Brockway, L.

Llewelyn-Davies, L.

Stone, L.

Cledwyn of Penrhos, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Taylor of Mansfield, L.

Collison, L.

Underhill, L.

David, B. [Teller.]

Lovell-Davis, L.

Wallace of Coslany, L.

Elwyn-Jones, L.

McCarthy, L.

Wedderburn of Charlton, L.

Gaitskell, B.

Mischon, L.

Wynne-Jones, L.

Goronwy-Roberts, L.

On Question, Motion agreed to.

Resolved in the affirmative, and Motion agreed to accordingly.

ZIMBABWE (INDEPENDENCE AND MEMBERSHIP OF THE COMMONWEALTH (CONSEQUENTIAL PROVISIONS) ORDER 1980
7.10 p.m.
Lord TREFGARNE: My Lords, I beg to move.
Moved, That the draft order laid before the House on 16th April be approved.— (Lord Trefgarne.)
Lord PITT of HAMPSTEAD: My Lords, I did not take part in the previous debate because I wanted to speak on this Motion, and I wanted to speak in different terms and in a different tone from the way in which the previous debate was taking place. Therefore, with your Lordships' permission, I should like to welcome this order and to say a few things that I want to say, because this is the last time that we shall debate Zimbabwe in this House.
When my wife and I were watching the television presentation of Marshal Tito's funeral, we both expressed our happiness at seeing Mr. Mugabe as one of the Prime Ministers present on that occasion, indicating, as it did, that the people of
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Zimbabwe, through their elected leader, were able to take their place with the other nations. It is that happiness that I wanted to express here tonight, and because I wanted to express that happiness the previous debate did not really suit me.
I want to begin by expressing congratulations, belatedly, because I was not here during the previous debates, to the Foreign Secretary for having successfully walked his tightrope— because, as your Lordships remember, I described what he was walking as a tightrope. He has successfully walked it without falling off and I want to congratulate him. I also want to congratulate the Lord President of the Council on the part he played in bringing Zimbabwe into being.
I want, too, to congratulate the Commonwealth on getting its newest member, and on the part it has played in bringing into being its newest member. It is worth recording that from the beginning, from the time of the declaration of UDI, the Commonwealth has remained faithful to its insistence that there must be majority rule in Zimbabwe. It has, through it all, stuck solidly to that principle; and it was the Commonwealth conference in Lusaka that laid the foundation for the Lancaster House conference, and the eventual elections and the emergence of Zimbabwe and its place now in the Commonwealth.

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I also— although some Members have done it before— want us to look at the inheritance of the present Zimbabwe Government. The question of the debt has already been raised, but I want to point out a few facts which need to be taken into account in thinking about it: the fact that one in three of adult blacks are unemployed, that there is a great deal of malnutrition and that what has been left as a result of what I would call the terribly wasted years is a devastated countryside. To illustrate what I mean when I talk about a devastated countryside, very few rural stores are functioning, most cattle are dead or stolen, rural health and education services are in ruins, large numbers of schoolchildren are without education, there is an absence of doctors in rural areas and, in addition, there are large numbers of refugees still in Zambia, Mozambique and Botswana.
To these must be added the handicap under which the new Government will be working. The alienation of land from the indigenous Africans has always been, and still is, bitterly resented. The new Government promises to concentrate on bringing neglected land into use and to pay compensation to the owners. But to do that it must have the wherewithal, and there is a great deal of expectation among the population which needs to be met. That is instanced to us by the number of strikes that are now taking place.
Therefore, a country in this position cannot be expected to service loans. What it needs is help. So the question of whether or not the new Zimbabwe Government says: "Yes, we will undertake to meet these debts", is not relevant. What is relevant is what will be the attitude of the creditors; and that is where this country comes in. What the country will need is a long enough spell before it has to repay any debts, so that it can develop to its full potential.
What is required from Her Majesty's Government— and this is why I wanted to concentrate on this debate, and not be diverted by debates on sanctions or anything else— is a commitment to provide every help possible to Zimbabwe in overcoming its difficulties. This Government and this country must give the maximum possible help, and also get
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other countries to give the maximum possible help.
If I may instance one, I have mentioned the land. At the time of the Kissinger plan, the Americans committed themselves to provide finance for the resettlement of people on the land. It is necessary for Her Majesty's Government to help the new Government of Zimbabwe to get that help. As to the kind of help that the USA will be giving, the suggestion so far is certainly nothing like what one was led to expect when the commitment was made. Therefore, what I am pleading for is that this Government should undertake to raise with the United States Government, its ally, the whole question of its commitment to helping this new country, and ask it to try to fulfil that commitment and not back down on it.
Here I have to agree with my noble friend Lady Gaitskell, that the Government's own commitment so far in terms of their £ 75 million was not good enough, was not a good enough example. Therefore I hope that we shall hear that it is to be regarded as a first step and that in fact the Government will be thinking, as things improve, of increasing their aid to this country. That is something the Government can commit themselves to doing. I was glad to read that at Nairobi it was agreed that Zimbabwe should be admitted as a signatory to the Lomé Convention. What I should like Her Majesty's Government to do is to use their influence in the EEC to see that there is maximum help from the European Development Fund. These are the sort of things I am talking about.
This order deals with diplomatic immunities. I was glad to see in one of the Commonwealth circulars that the Commonwealth is putting on a training programme in Salisbury for Zimbabwean diplomats. I think that we ought to thank the Commonwealth, congratulate them on the part they have been playing over the last 10 years in providing training for Zimbabweans, and also the part Her Majesty's Government have been playing in providing training for Zimbabweans, and ask that that training be continued, because they will need the help and the training now more than ever. One hopes that one of the ways in which Her Majesty's Government will increase their aid to

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Zimbabwe will be by increasing the extent to which they help with training and technical aid and personnel, where necessary. I know that we are giving military training, but probably we need to do as much in the civilian field as in the military field, and I hope that we shall do so.
While on the subject of the Commonwealth, I want to say something about Zambia because, of the Commonwealth countries, Zambia is the one that has suffered most from UDI. It is a country that has suffered most from what has been taking place in Rhodesia. What is very sad is that in the last period of Rhodesian rule, Britain and Zambia have seemed to be drifting apart. That is sad, but it is also dangerous. I hope Her Majesty's Government will take active steps to bridge that gap and remedy that situation.
Finally, I want to say something about South Africa. South Africa can, by its attitude, have a very definite influence on what happens to Zimbabwe. Because this country still has close and friendly relations with South Africa, I hope that Her Majesty's Government will use their friendship and close relations to persuade the South African Government to accept the result of the Zimbabwe elections— I think they have, actually— and, what is more, to accept the logic of the result of the Zimbabwe elections. By that I mean— I am merely giving an illustration— that if Ian Smith had accepted the logic of the Frelimo conquest of Mozambique, we should not have had to wait all these years for there to take place in Rhodesia the change that is now taking place. In fact, I am fairly certain that the group in Rhodesia that he was trying to help would have done very much better had he accepted the logic of what had happened in Mozambique. Therefore, I hope that the South Africans can be persuaded to accept the logic of what is happening North of the Limpopo, and that they can be made to understand that there can be no way of their being able to settle their problems without some accommodation of the urban blacks.
My own view is that that is the sort of message Her Majesty's Government need to be conveying to them. I do not think that the present Prime Minister needs to do what Harold Macmillan did and go there to tell them about the
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wind of change. I think she could do it without going. But they need to be told, and told in a friendly way, that these changes are essential. The noble Lord, whom I heard in the defence debate, argued that South Africa is one of our strongest and most important allies here. I want to say that, as South Africa now is, she is probably our biggest liability. On the other hand, she could become the kind of ally that the noble Lord was suggesting that she was. But again that would depend on the changes that take place there, and they have got to take place.
I have spoken for long enough. I wanted to convey a certain feeling to your Lordships' House and I hope that I have succeeded in conveying it. What I want to say is that I hope that Zimbabwe-British relations will blossom and bear fruit and that this country will use its influence to see that this situation in Southern Africa is one of stability and that this new nation is developed into a prosperous, progressive, non-racial nation whose influence for good could be infinite.
7.29 p.m.
Lord HATCH of LUSBY: My Lords, I should like to associate myself with everything that my noble friend Lord Pitt of Hampstead has said. It is indeed appropriate that it should be my noble friend Lord Pitt of Hampstead especially who welcomes this new state into the Commonwealth. As the noble Lord the Minister has already said, it will be probably our last opportunity to debate Zimbabwe and its relations to this country.
It would be ungenerous of me not to pay tribute to the work done by the noble Lord, Lord Carrington, the Foreign Secretary, and by the noble Lord, Lord Soames, lately governor of what was then Rhodesia. This I do gladly. I have already, on several occasions, praised the noble Lord, Lord Carrington, with whom I have many differences, for his courage in reasserting British authority over Rhodesia which I believed, over my 30 years of connection with Rhodesia, was the only way to solve the complex problems of that country. Since the declaration of the election, Lord Soames has acted impeccably and his friendship with Robert Mugabe is, I believe, of the utmost importance to the future relation-

87
ship between his country and ours and to the race relations, the colour relations, within Zimbabwe itself.
Secondly, we must not forget the tremendous part played by Robert Mugabe, Joshua Nkomo and their colleagues over the last 20 years: The profound sense of forgiveness that they have shown after their long experience of incarceration, after a decade has been torn out of their lives, has amazed everyone who knows them personally. But above all tonight I want to draw the attention of your Lordships to the tremendous part played by the Commonwealth in the whole of this drama.
There have been times when the Commonwealth has not been very popular or fashionable in the foreign policy of either party in Government. I believe, and always have believed, that that has been a major mistake. The Commonwealth is a unique association which brings together people of all races, all creeds and all colours; which includes nearly a quarter of the world's population; which above all brings together the north and the south, the rich and the poor and which has shown its ability to provide the means of dialogue between them. But on this occasion the Commonwealth has shown that it has a power to solve an internal problem of one of its members. As my noble friend Lord Pitt of Hampstead has said, it was the Commonwealth which always insisted to the British Government and to the rest of its members and the United Nations that nothing less than full adult suffrage could solve the Rhodesian problem. And some of the members of the Commonwealth have gone to the stake on that issue.
It was the Commonwealth which provided the opportunity last summer, as the noble Lord, Lord Soames, pointed out on his return last week. The timing was right, the timing was fortunate and provided the opportunity for the preparations for the Lancaster House Conference. Members of the Commonwealth Secretariat, and particularly its noted Secretary General, played an important part in that Lancaster House Conference. Then, perhaps above all, the Commonwealth observers and the monitoring force made a successful election possible.
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I would ask the noble Lord, as I asked him last week and received a not very gracious answer, to make sure that the report of the Commonwealth observers, which is a report that gives a clear and objective historical account of what happened during that election, is made as fully available as possible— not just to Members of this House, not just to Members of both Houses, but to the British public at large. I would just remind him that the Government found it possible to place in the Printed Paper Office the report of the noble Lord, Lord Boyd, which was a report of the Conservative Party. This is a report of the Commonwealth, with no partisan support or connections, and it should be widely read. Those of us who have played any part and associated in any way with the Commonwealth welcome with open arms this new member. We praise the British Government, we praise the Zimbabwean leaders, we praise the Front Line Leaders for making this joyous occasion possible and we believe that the Commonwealth is now tremendously strengthened by the appearance of its latest member.
Lord TREFGARNE: My Lords, I am much obliged to noble Lords for their interventions. If your Lordships will allow me, I will not attempt to answer all these points in depth or detail now but I will study what has been said and, if there is anything that needs to be taken up, I will correspond with the noble Lords in question.

EAGLE & GLOBE STEEL LIMITED BILL [H.L.]
Reported from the Unopposed Bill Committee with amendments.
BRITISH OLIVETTI LIMITED BILL [FIX.]
Reported from the Unopposed Bill Committee with amendments.
FRIENDS MEETING HOUSE (REIGATE) BTLL [H.L.]
Reported from the Unopposed Bill Committee with amendments.
ALEXANDRA PARK AND PALACE BILL [H.L.]
Re-committed to an Unopposed Bill Committee.
  NORTHERN IRISH SOCIAL AND ECONOMIC PROGRAMME
  NORTHERN IRISH SOCIAL AND ECONOMIC PROGRAMME
  NORTHERN IRELAND HOUSING EXECUTIVE: UNDERSPENDING
  NORTHERN IRELAND HOUSING EXECUTIVE: UNDERSPENDING
  HARMONDSWORTH DETENTION CENTRE: CHILD DETAINEES
  HARMONDSWORTH DETENTION CENTRE: CHILD DETAINEES
  The PARLIAMENTARY UNDERSECRETARY of STATE, HOME
  The PARLIAMENTARY UNDERSECRETARY of STATE, HOME
  ARSON IN WALES
  ARSON IN WALES
  AFRICA: UK AID EXPENDITURE
  AFRICA: UK AID EXPENDITURE
  COMMISSION FOR RACE EQUALITY: APPOINTMENT CONSULTATIONS
  COMMISSION FOR RACE EQUALITY: APPOINTMENT CONSULTATIONS
  COMMUNITY ROOTS AND RESOURCES CENTRE: GRANT AID APPLICATION
  COMMUNITY ROOTS AND RESOURCES CENTRE: GRANT AID APPLICATION
  HANSARD: DELAYS IN PRODUCTION
  HANSARD: DELAYS IN PRODUCTION