Sitting of 10 November 1981

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

    STANDING ORDERS
    Amendments made:
    Standing Order 4, in line 21, after 'state' insert `(a)' In line 25, at end insert:
    `(b) the time within which objection may be made by deposit of a petition in the Office of the Clerk of the Parliaments or the Private Bill Office of the House of Commons; and
    (c) that information regarding the deposit of such petitions may be obtained from either of those Offices or from the agents for the promoters.'
    Standing Order 11, in line 8, leave out sub-paragraph (b) and insert:
    `(b) the time within which objection may be made by deposit of a petition in the Office of the Clerk of the Parliaments or the Private Bill Office of the House of Commons and that information regarding the deposit of such petitions may be obtained from either of those Offices or from the agents for the promoters.'
    Standing Order 39, leave out line 31 and insert:
    'Ministry of Agriculture, Fisheries and Food'.—[The First Deputy Chairman of Ways and Means.]

Oral Answers to Questions
  DEFENCE

    Cruise Missiles
    Mr. Home Robertsonasked the Secretary of State for Defence if he will arrange for copies of his Department's brochure on cruise missiles to be distributed to all households in the United Kingdom.
    The Minister of State for the Armed Forces (Mr. Peter Blaker): My Department produces a number of publications, including at present two on cruise missiles. I believe it useful that they should be circulated widely and we already send them to all the organisations and individuals who ask for them.
    Mr. Home Robertson: In view of the Government's obsession with referendums, would it not be useful if the ludicrous document that provides answers to questions such as "Are nuclear weapons safe?" could be given as wide a circulation as possible? Would it not also be useful if people were enabled to express an opinion whether General Haig should be given the opportunity to start a demonstrative Third World War by firing one of those missiles from British soil?
    Mr. Blaker: That document answers many of the questions that we find are of concern to those who write
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    to the Ministry of Defence. The question "Are nuclear weapons safe?" is one of the questions that have been put to us.
    Mr. Home Robertson: Are they?
    Mr. Blaker: It would be useful to circulate to every household in the kingdom the letter written by the hon. Member for Pontypridd (Mr. John), and his fellow spokesmen on defence on the Opposition Front Bench, in which he said to the trade union leaders that a policy of unilateral nuclear disarmament and the other policies adopted by the Labour Party would threaten the prospects of general disarmament and endanger jobs in Britain's defence industry.
    Mr. Trippier: Will my hon. Friend reaffirm the clear message in that document that more widespread deployment of nuclear weapons, and theatre nuclear weapons in particular, does not signal a change in attitude towards their use? Will he confirm that they will still exist as a deterrent, to be used not as a first line of defence or in aggression, but as weapons of last resort?
    Mr. Blaker: My hon. Friend is absolutely right. There have been many misunderstandings, which have been to some extent fed by the CND. The cruise missile is in no sense and could not be a first strike weapon. It is a defensive weapon, as are our nuclear weapons.
    Mr. Frank Allaun: Is it not a fact that Holland, Norway, Denmark, Canada and other countries will not deploy those missiles in any circumstances? What would happen if the Government went ahead and tried to deploy those weapons in Britain and West Germany, despite the demonstrations throughout Europe? What resistance does the Minister expect?
    Mr. Blaker: For once the hon. Gentleman is wrong in his premise. Holland and Denmark have not refused to accept those weapons. A decision has not been made. Italy has decided where they are to go, and the Germans have accepted them in principle.

    Training (Correspondence Courses)
    Mr. John Browneasked the Secretary of State for Defence whether he will count as Territorial Army and Volunteer Reserve training periods any time spent by specialists of the RAPC and REME upon necessary training correspondence courses, which may not be carried out in a drill hall or as part of a normal Territorial Army exercise or weekend's training.
    The Under-Secretary of State for the Armed Forces (Mr. Jerry Wiggin): I have asked for a study to be made examining the implications of that idea, which I view favourably.
    Mr. Browne: I sincerely thank my hon. Friend for that reply. I assure him that it will be welcome in the Reserve Forces. But can he assure the House that he will press his Department and those in authority in the Reserve Forces to take a flexible attitude towards training and physical presence for training parades that befits a modern Reserve Army?
    Mr. Wiggin: The Territorial Army, together with the other Reserve Forces, seeks to use modern means of communication and education. I take on board my hon. Friend's point, and I shall see whether we can meet him on it.
    Mr. Pawsey: Will my hon. Friend give details of what advice has been given to the TA so that it may co-operate with the civil power in the event of a nuclear emergency?
    Mr. Wiggin: That question falls so far outside the original question that I would wish further notice of it.

    USSR (Nuclear Installations)
    Mr. Norman Atkinsonasked the Secretary of State for Defence if he will set out in detail the increased numbers of nuclear weapons installed by the Union of Soviet Socialist Republics since acknowledgement of a nuclear parity between the Warsaw Pact and North Atlantic Treaty Organisation alliances at the conclusion of the SALT II talks.
    The Secretary of State for Defence (Mr. John Nott): The SALT II talks were concerned only with strategic nuclear weapons, and it is only at this level that broad parity was acknowledged as existing. Since the conclusion of the SALT II talks the number of United States warheads has remained approximately the same. The Soviet Union, on the other hand, has greatly modernised and increased the accuracy of its strategic systems by the deployment of new types of ICBM up to the full SALT II limits, increasing its total number of warheads by almost 1,000.
    At the theatre level there is a considerable disparity in favour of the Warsaw Pact, and it has widened greatly. The United States has unilaterally removed 1,000 nuclear warheads from the European stockpile. There has been no similar response by the Soviet Union, which has already deployed 750 SS20 warheads and Backfire bombers, and is now introducing new SS21 and SS22 missiles, while still keeping in service its older aircraft and missiles.
    Mr. Atkinson: If the Government are unwilling to join any nuclear disarmament talks until such time as they can proceed on the basis of parity between the Warsaw Pact countries and NATO, are not the implications of the Minister's answer quite horrifying from the point of view of the Western world? Are not the Government thus saying that they are not prepared to negotiate ever? If the escalation is now in step, side by side, there will never be parity, so are not the Government in effect saying that they do not foresee any time when they will enter into meaningful talks with the Soviet Union about nuclear disarmament?
    Mr. Nott: It is certainly very serious to find that the number of strategic warheads deployed by the Soviet Union has increased by about 1,000 and that its modernisation programme for long-range theatre nuclear weapons has gone ahead in the way that I have described. The hon. Gentleman did not ask me about disarmament talks. The Government fully support and have taken part in the preparations for the theatre nuclear disarmament talks that open on 30 November. We have played a leading part in that and we have discussed with the United States and our other NATO Allies what the opening bid should be, in an attempt to achieve arms reductions. We are determined to achieve a reduction in arms.
    Mr. Wilkinson: Does my right hon. Friend agree that one of the most awesome and fearsome aspects of Soviet preponderance is the extra megatonnage, the superiority in throw weight, power and destructiveness of the Soviet warheads compared with those of NATO?
    Mr. Nott: My hon. Friend is right. Since SALT II the United States has more or less stood still, while the Soviet Union has increased the number, accuracy and throw weight of its warheads.
    Dr. David Clark: Does not the Minister's answer about the build-up of strategic nuclear stockpiles on both sides highlight the need for disarmament talks now that SALT is in abeyance? Would it not be sensible for Britain to take the initiative and announce the postponement or cancellation of the Trident programme, which is just one more escalation?
    Mr. Nott: The Trident programme has nothing whatever to do with the talks that are to open on 30 November. The talks concern long-range theatre nuclear weapons, while Trident is a strategic system. The Trident programme represents the absolute minimum force required for an independent deterrent. I hope that the strategic arms reduction talks between the United States and the Soviet Union will open next year. We are playing a major role in trying to get those talks going and to make them successful.
    Mr. Bill Walker: Does my right hon. Friend agree that while the West—in particular the United States—has been meaningfully involved in detente, the Soviet Union has been building up its theatre capacity to an alarming level?
    Mr. Nott: Taking capability as a guide, I estimate that in theatre nuclear weapons the Soviet systems currently outnumber ours by about four to one.
    Mr. Duffy: Is not the most important aspect that the Secretary of State has not so far brought out the fact that, despite non-ratification of the treaty, neither side has undertaken any developments that would contravene SALT II? Does he agree that it is therefore vital that the Soviet Union and the United States should avoid any irreversible action and, preferably, take early steps to consolidate this regime?
    Mr. Nott: The hon. Gentleman is right. So far as one can judge, neither side has breached SALT II. I agree, too, that we must get SALT started again. The talks have to be between the United States and the Soviet Union, but we shall do our best to encourage the United States to open the negotiations as soon as it is ready to do so.

    Trident (Submarine Orders)
    Dr. Brayasked the Secretary of State for Defence whether the submarine reactor and bow and stern sections ordered or to be ordered for the Trident programme will be usable for hunter-killer submarines in the event of the cancellation of Trident.
    Mr. Nott: The great majority of the structural steel and the contents of the bow and stern sections for the new Trident submarines, including the reactor, could be used in a hunter-killer nuclear submarine with relatively little modification.
    Dr. Bray: Can the Secretary of State confirm that that is so for both the C4 and D5 systems? Does this also mean that there is considerable flexibility in the date of cancellation for the Trident programme, in that great losses would not be involved if it were cancelled at a later stage?
    Mr. Nott: We still have not finally settled the size and shape of the submarine. In answer to later questions I shall

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    explain to the House that I hope to make a statement about this in due course. It is primarily the centre section of the ballistic missile submarine that is broadly irrelevant to a hunter-killer role. The bow and stern sections and most of the sonar and electronics would be relevant to an SSN programme. Clearly, the further the Trident programme goes down the line, the more difficult it will be to draw back or to change it.

    Marconi Radar Systems Ltd.
    Mr. Greville Jannerasked the Secretary of State for Defence when he expects to make a decision on those contracts for defence equipment which may involve production at Marconi Radar Systems Ltd.
    The Under-Secretary of State for Defence Procurement (Mr. Geoffrey Pattie): Several defence equipment decisions are impending which could bear on production work at Marconi Radar Systems Ltd. They will be taken as early as is practical in each case. The situation of this company has been fully represented to Ministers, and I was very glad that the hon. and learned Gentleman and my hon. Friend the Member for Melton (Mr. Latham) were able to bring a delegation to see me.
    Mr. Janner: I thank the Minister for his courtesy and his efforts in this matter. Does he recognise the crucial importance of maintaining employment and scientific knowledge in those two plants in my constituency? Does he appreciate the dreadful effect that the uncertainty is having upon both management and workers there? When will he be able to give a decision on any of the pending contracts?
    Mr. Pattie: I assure the hon. and learned Gentleman that the factors that he mentioned form a major part of the considerations. With regard to the heavyweight torpedo and type 909 radars in Sea Dart, decisions will be made when current discussions with the company are satisfactorily concluded.
    As I said in a previous reply to the hon. and learned Gentleman, we expect the decision on the tracker radar for the improved Sea Wolf to be made in the next few months. There is, as yet, no endorsed staff requirement for the surveillance radar for type 23 frigates, nor for the lightweight Sea Dart.
    Mr. Latham: Is my hon. Friend aware that his constructive meeting with representatives of the company and Members of Parliament was much appreciated? Does he agree that the company's extremely skilled workers have served the Armed Forces and the Crown very well over many years and that that service deserves recognition by the Government?
    'Mr. Pattie: I certainly agree with what my hon. Friend has said. I agree also that that recognition has been accorded in the past. We now have to take account of the best way to proceed with these alternative systems.

    Cruise Missiles
    Sir William van Straubenzeeasked the Secretary of State for Defence what recent consultations he has had with the United States Administration regarding the siting of cruise missiles in the United Kingdom.
    Mr. Blaker: My right hon. Friend discussed this subject with the United States Secretary for Defence and other NATO Defence Ministers at Gleneagles on 20 and 21 October.
    Sir William van Straubenzee: As a number of these missiles are likely to be sited in the county of Berkshire, part of which I represent, will my hon. Friend, without further consultation, inform the United States Administration that the vast majority of the people there, while warmly supporting constant diplomatic efforts to find ways to achieve multilateral disarmament, believe that the siting of these defensive weapons in their county strengthens the Government's hand in that resolve?
    Mr. Blaker: I am grateful to my hon. Friend for his remarks, and he is absoluely right. As my right hon. Friend said, we are vigorously dedicated to the support of multilateral as opposed to unilateral disarmament.
    Mr. R. C. Mitchell: Does the Minister agree that if Britain and the West take unilateral decisions on the cruise missile there will be no incentive whatever for the Russians to reduce the number of SS20s?
    Mr. Blaker: The hon. Gentleman is absolutely right, and what he has said is becoming increasingly recognised in the country.
    Mr. Stoddart: As these weapons are mobile, should not the views of the people of Berkshire perhaps be taken with a pinch of salt? [HON. MEMBERS: "What about Swindon?"] Swindon is far too near to Greenham Common for my liking. As the previous Secretary of State for Defence said, no one is safe in a nuclear attack, particularly if cruise missiles are sited in Britain, because, as they are mobile, they will make the whole of the United Kingdom a target.
    Mr. Blaker: I would not dream of taking the opinions of the people of Berkshire with a pinch of salt. The hon. Gentleman's latter remarks are precisely the reason why our efforts are dedicated to preventing war. We are not, as some people allege, planning to fight and win a nuclear war, because we do not believe that there would be any winners. Even if we were to adopt the suggestions of the unilateral disarmers, the United Kingdom would still be a target in any future war because of its industrial and political importance as well as its geographical location.

    Naval Dockyards (Hunter-Killer Submarine Fleet)
    Mr. Moateasked the Secretary of State for Defence if, in the light of the annual report of the Devonport dockyard, he remains satisfied that the proposed closure of the Chatham dockyard can be carried out without serious risk to the strength of the nuclear hunter-killer submarine fleet.
    Mr. Blaker: Yes, Sir.
    Mr. Moate: Do not the Devonport report and my hon. Friend's parliamentary answers confirm that the first nuclear refit and refuelling to be undertaken by Devonport will have taken nearly four years—on HMS "Swiftsure"—which is twice as long as it should have taken, compared with Chatham, which has carried out seven nuclear refits and other nuclear work besides? Does my hon. Friend accept that the Chatham nuclear facility is essential if we are to maintain the SSN fleet, which he

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    and my right hon. Friend say is essential to the Royal Navy? If so, will he at least consider retaining the Chatham nuclear facility with a much reduced work force, perhaps under private management, rather than recruiting equal numbers of people at Devonport and Rosyth?
    Mr. Blaker: I am sorry, but I cannot accept my hon. Friend's proposal. I have discussed this matter carefully with him, and he knows that I have investigated it with great care. I am satisfied about the capability of the yards at Devonport and Rosyth to cope with our refitting burden. The refit of the SSN currently at Devonport has taken a long time, but my hon. Friend knows that the start was delayed for more than a year by an industrial dispute and that there has been another industrial dispute this year. But that latest industrial dispute affected all the yards, not only Devonport.
    Mr. Jay: Can the Minister confirm reports in today's press that the Government are discussing with the United States Government possible modifications in the naval cuts announced by the Secretary of State during the summer?
    Mr. Blaker: I cannot confirm those reports. Our position is expressed in the White Paper issued in the summer.
    Mr. George Robertson: I appreciate the Minister's embarrassment at the continual barrage of attacks upon him and his colleagues about their decision to close the dockyards. Does he not recognise that all the evidence about the future refit capacity of the Royal dockyards indicates that they are likely to undermine the credibility of a policy based on hunter-killer nuclear submarines? Is it not about time that the Government listened to advice—even the advice of Conservative Members—to reconsider a policy that makes no sense in relation to the future of the fleet?
    Mr. Blaker: The hon. Gentleman referred to a barrage of attacks, but, as he knows, it is not only members of the Government Front Bench who are sometimes questioned about their policies. I have looked into this matter with great care. I have recently visited Rosyth, and I shall soon be visiting Devonport. The more I learn about the subject, the more I am satisfied that we shall have adequate capacity for the refitting of our nuclear submarines.

    Procurement Executive
    Mr. Colvinasked the Secretary of State for Defence if he has considered placing a mandatory obligation on the Procurement Executive to include small firms in the list of those asked to tender for Ministry of Defence contracts.
    Mr. Pattie: Small firms are always included in Ministry of Defence invitations to tender for contracts appropriate to their capacities and lines of business.
    Mr. Colvin: Is my hon. Friend aware that in the United States about 20 per cent. of Department of Defence procurement comes from smaller firms, arising mainly from the fact that these contracts are set aside especially for that sector of business? Will he consider a similar form of positive discrimination in favour of small businesses so that they might receive a fairer share of Government business?
    Mr. Pattie: I am interested to hear my hon. Friend's views on United States practice in this regard. We shall
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    certainly look at what is done there to see whether we can learn anything from it. However, the Government believe that it would be as wrong to discriminate in favour of small firms as it would be to discriminate against them. That view is shared by the CBI in relation to the access of smaller firms to Government contracts.
    Mr. Dempsey: In pursuing this procurement policy, will the Minister use his good offices to ensure that Scottish industry gets the maximum opportunity to tender for this work in view of the inordinately high level of unemployment in Scotland at the present time?
    Mr. Pattie: Yes.
    Mr. Peter Fraser: Even if my hon. Friend will not accept the suggestion of a mandatory obligation on the Ministry of Defence, will he reconsider the circumstances in which small businesses that seek to be subcontractors to the major defence contractors can obtain defence standard 05–24, as that would enhance their prospects of obtaining vital subcontract work?
    Mr. Pattie: Quality assurance approval is a complicated matter. Perhaps I can write to my hon. Friend on this question and place a copy of the letter in the Library.
    Mr. Park: Will the Minister comment on the reported placing of a contract for submarine sonar equipment with a French firm when British companies say that they can do the job equally well and cheaper?
    Mr. Pattie: I am sure the hon. Gentleman will accept that that issue is important enough to merit prior notice. Now that he has raised it with me, I shall be glad to look into it.

    Trident Missiles
    Mr. Beithasked the Secretary of State for Defence what is his latest estimate of the cost of the Trident missile project.
    Mr. Stoddartasked the Secretary of State for Defence what is his latest estimate of the cost of Trident.
    Mr. Newensasked the Secretary of State for Defence if there has been any increase in the anticipated cost of Trident since the decision to go ahead with this missile system was taken; and if he will make a statement.
    Mr. Hooleyasked the Secretary of State for Defence what is his latest estimate of the cost of the Trident programme in the light of the decision to make use of a more advanced design of missile.
    Mr. Nott: As I have already made clear to the House, we are still studying the final configuration of the United Kingdom Trident force. I shall announce our decisions, and their cost implications, in due course.
    Mr. Beith: Which estimate will be nearer—the £5 billion given by the Secretary of State in July 1980 or the £8 billion forecast by the Liberals when we debated this subject? Does the right hon. Gentleman not see this massive diversion from conventional equipment for our Forces as being likely to lower the nuclear threshold and pose the danger of the suicide option of nuclear first use referred to by General Haig?
    Mr. Nott: When I am ready to make a statement, the hon. Gentleman will have an answer to the first part of his question. The Trident force will represent approximately

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    3 per cent. of the total defence budget over the 15 years that we are planning to build it. I cannot believe that that represents a sharp, adverse impact on our conventional programme.
    Several Hon. Members rose—
    Mr. Speaker: Order. I propose to call first those hon. Members whose questions are being answered.
    Mr. Stoddart: Is it not a fact that various estimates, up to £8 billion, are now being predicted for the cost of this project? Is there no limit to its expense? If there is, will the Secretary of State tell us and also say why this project should not be subject to cash limits when projects of local authorities, health services, and other desirable enterprises are being held back by the Treasury?
    Mr. Nott: There is a limit to its cost—
    Mr. William Hamilton: What is it?
    Mr. Nott: It is subject to cash limits in the same way as every other project. I cannot remember the third part of the hon. Gentleman's question.
    Mr. Newens: Does not the fact that President Reagan has now decided to go ahead with the Trident II missile scheme mean that if we go ahead with our present insane policy Britain will also have to purchase Trident II? Will the right hon. Gentleman say whether that is his view and, if so, how much that will add to the original estimate?
    Mr. Nott: The reason why we are looking at the matter now is due to President Reagan's decision on D5. As I made clear when I appeared before the House of Commons Select Committee on Defence, the capital costs of D5 will be higher than those of C4. It is by no means certain that the through-life costs of the D5 system will be more than those of the C4. In due course, I shall be able to enlighten the hon. Gentleman.
    The latest poll in The Observer, which I am sure the hon. Gentleman read with interest, showed that 56 per cent. of the Labour Party are in favour of the retention of an independent nuclear deterrent, and that 67 per cent. of the British people as a whole also favour it. I am sure that that will not encourage the hon. Gentleman.
    Mr. Hooley: As unemployment in the United Kingdom climbs towards 4 million, and in the United States towards 10 million, does the Secretary of State seriously think that the public on either side of the Atlantic will tolerate this nuclear megalomania?
    Mr. Nott: No one is tolerating any such thing. We are trying to maintain peace.
    Mr. Hal Miller: Can my right hon. Friend confirm that the American decision to make Trident missiles available, and the cost at which they were made available, was dependent upon an undertaking on our part not to diminish our conventional forces, particularly our naval watch in the Atlantic? Will he therefore now tell us whether our American allies are satisfied that we are carrying out our part of the bargain and whether any reconsideration has been given to maintaining our anti-submarine carrier force and escort forces in the Atlantic?
    Mr. Nott: The United States Administration are keen that we should modernise our independent strategic nuclear deterrent because they believe that its possession by us is an added guarantee for the maintenance of peace. With regard to cost, the additional resources that the
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    Government have already agreed to put into defence—namely 3 per cent. extra in the next few years—more than absorbs the cost of Trident over the next few years. Therefore, with the increased defence spending that we have agreed, there is no reason for our conventional forces to be adversely affected thereby.
    Mr. John: Does the Secretary of State accept, and will he confirm what is being widely reported that the British missiles will cost up to £5 million each more than their American counterparts?
    Mr. Nott: I have never seen that report, and it sounds to me another bit of nonsense.
    Mr. Trippier: As it has been calculated that the cost of Trident is approximately 2p per day per head of population, is not that an insurance worth paying? Does my right hon. Friend agree that even though some people may think that Trident is expensive, it is nowhere near as expensive as the war that it will help to prevent?
    Mr. Nott: My hon Friend is entirely correct, although I am afraid that I cannot verify his arithmetical calculations.
    Dr. Bray: Does the Secretary of State agree that the political likelihood of the cancellation of Trident before the programme is anywhere near completion in itself makes a strong case for a reconsideration of the programme?
    Mr. Nott: I am confident that the Trident programme will be seen through to completion. It is the policy of this Government, and therefore it will go forward under us. If, by some grievous misfortune for the country, another party were to form the Government during the next 15 years, I have not the slightest doubt that, as in the past, that party when it gained that power would confirm the independent strategic nuclear deterrent, as the Labour Party has always done in the past.

    Nuclear Weapons
    Mr. Marlowasked the Secretary of State for Defence whether the United Kingdom will have a physical veto on the use of any United States nuclear weapons stationed, planned to be stationed or projected to be stationed on United Kingdom soil.
    Mr. Blaker: In the case of the United States forces already based in the United Kingdom, it has been made clear to the House many times that the use in an emergency of the bases concerned would be a matter for joint decision between the Governments of the United Kingdom and the United States, in the light of the circumstances at the time. Those arrangements have been regarded as entirely satisfactory by successive Governments. They will also apply to the ground-launched cruise missile force to be based here starting in 1983.
    Mr. Marlow: I am afraid that my hon. Friend has not properly understood the question that I tabled. I want to know whether we in this country have a physical control over whether those missiles are used. Is my hon. Friend aware that if we do not have that control—if we do not have a finger on the trigger—future Soviet perceptions might result in the annihilation of the United Kingdom?
    Mr. Blaker: I think that my hon. Friend is talking about a finger on the safety catch, not on the trigger. If he

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    is asking whether the two-key system applies to the missiles, it does not. That was our decision, taken in the interests of saving costs.
    Mr. Cryer: Is it not true that the formula that Ministers keep trotting out was agreed between Attlee and Truman in 1951? Nuclear weapons were not envisaged under the agreement. Is it not also true that, because there is no physical veto by the United Kingdom Government, the United States could use a cruise missile in a demonstration nuclear explosion, as was explained by the former NATO Supreme Allied Commander Europe, General Haig?
    Mr. Blaker: The hon. Gentleman is right in saying that the arrangements for a joint decision were first agreed between Mr. Attlee and Mr. Truman. They were reconfirmed by Mr. Churchill and Mr. Truman, and they have been regarded as satisfactory by every Government since then.
    Mr. Wilkinson: Does my hon. Friend agree that the cruise missiles, like the B47s, the B52s, and the F111s, are the symbol of the indissoluble bond between the free peoples of North America and ourselves, and are evidence of the determination of our ally, the United States, to put our joint security at a high level of priority?
    Mr. Blaker: My hon. Friend is absolutely right. I would only add that it is proposed to install cruise and Pershing missiles in other countries in Europe as well as in the United Kingdom, at the request of the Europeans.
    Mr. Snape: Why does not the Minister answer the supplementary question put to him by his hon. Friend the Member for Northampton, North (Mr. Marlow)? Is it not a fact that what is concerning millions of people in Western Europe at present is the contradictions in United States policy, as enunciated by President Reagan, General Haig and Mr. Caspar Weinberger? Is the Minister aware that the people of Western Europe do not share the Government's complacency about these matters?
    Mr. Blaker: I am not at all complacent about these matters. The arrangements have been regarded as satisfactory by successive Governments. President Reagan's remarks were entirely consistent with the NATO strategy of flexible response, which aims to deter Soviet aggression by making it clear that NATO has a credible response to any attack, whatever its level. That is where the relevance of cruise missiles comes in.

    Royal Navy
    Mr. Richard Wainwrightasked the Secretary of State for Defence what was the total expenditure on the Royal Navy in 1979–80; and what is the projected outturn for 1981–82.
    Mr. Blaker: Accounting is now by defence-wide Votes rather than by Service, but the Estimates attribution of expenditure on the Royal Navy, including those services provided by the Royal Navy for the Army and Royal Air Force, was £2,354 million in 1979–80 and £3,622 million for 1981–82.
    Mr. Wainwright: Can the hon. Gentleman reassure the House that that level of expenditure will begin to provide a more adequate defence against mines than is currently provided by just one hovercraft, one support ship, three Hunt class minesweepers and 29 TON class vessels with an average age of more than 25 years?
    Mr. Blaker: If the hon. Gentleman looks at the White Paper published in the summer and the subsequent debates he will be reassured about our intention to improve our mine hunting and mine sweeping capability.
    Mr. Churchill: Bearing in mind the massive deployment of Soviet submarine forces in the North Atlantic and the relentless build-up of Russia's Backfire nuclear strike bombers in a maritime role, how do the Government justify on military grounds their decision prematurely to retire from service 34 ships of the Royal Navy?
    Mr. Blaker: Time does not allow me to go over the debates that we had on that subject in the summer, but my hon. Friend will recall that we stated our intention to keep 50 destroyers and frigates in service in the years up to 1986.

    Defence Expenditure
    Mr. Ioan Evansasked the Secretary of State for Defence what is the current expenditure for defence and the proposed expenditure for future years.
    Mr. Nott: Planned expenditure this year and for 1982–83 and 1983–4 was set out in the Government's public expenditure White Paper in March and it was announced in June that the Government had taken a firm decision to plan for 3 per cent. real growth for a further two years.
    Mr. Evans: As the Government are cutting back on social services and aids to manufacturing industry and are compelling local authorities to hold referendums if they want to increase local rates to deal with the problems of the homeless and the disabled, does the right hon. Gentleman consider that the Government should have a referendum before increasing defence expenditure still further?
    Mr. Nott: The opening sentence of the White Paper published in the summer made it clear that the first duty of any British Government is to safeguard our people in peace and freedom. That is why we are devoting extra resources to defence.
    Sir Nicholas Bonsor: In the light of that reply, can my right hon. Friend assure the House that there will be no further cuts in defence expenditure during the lifetime of the Government?
    Mr. Nott: We have already published our plans for the future in the public expenditure White Paper, and they stand.

    Service Widows (Pension)
    Mr. Viggersasked the Secretary of State for Defence what is the current level of pension paid ex-gratia to pre-1950 Service widows.
    Mr. Wiggin: The current rates vary according to rank from £25·05 a month for the widows of corporal or below to £44·87 for widows of warrant officer class I. In accordance with the announcement made to the House by my right hon. Friend the then Secretary of State for Social Services on 11 March, the rates will rise by 9·06 per cent. on 23 November.
    Mr. Viggers: Is my hon. Friend aware that more than 13,000 elderly and deserving widows are deeply grateful

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    to the Government for granting them pensions—a task which the previous Government said was administratively impossible?
    Mr. Wiggin: I entirely endorse my hon. Friend's remarks, except that I am advised that about 17,000 widows have benefited from our having carried out that electoral promise.
    Sir John Biggs-Davison: Will my hon. and sympathetic Friend give fresh consideration to the representation of war widows at the Cenotaph on Remembrance Day?
    Mr. Wiggin: That is a matter for my right hon. Friend the Home Secretary, but I am sure that he will see what my hon. Friend has said.

    Nuclear Weapons
    Mr. GwilymRoberts asked the Secretary of State for Defence how many representations he has received opposing the siting of cruise missiles in the United Kingdom, the Trident missile programme, and the siting of the neutron bomb in Europe; if he will list these representations in the Official Report; and if he will make a statement.
    Mr. Blaker: Since my right hon. Friend took up his present appointment he has received about 350 letters and eight petitions concerning cruise missiles; about 200 letters and seven petitions concerning the Trident missile programme; and about 50 letters concerning enhanced radiation warheads. These came from individuals and representatives of various groups; it would require disproportionate time and effort to prepare a full list.
    Mr. Roberts: Does the hon. Gentleman agree that recent mass demonstrations reflect the growing fear of millions of people all over the world about the growth of nuclear weapons? Will he reconsider his previous answers and realise that if Britain were prepared to abandon these weapons and to persuade some of our allies to do so, there would be every economic incentive for Russia to follow suit?
    Mr. Blaker: I repeat that the objective of the defence policies of NATO is to prevent war. I recognise that there is increased anxiety on the part of some people about the growth of nuclear weapons. That is why we are dedicated to supporting multilateral, as opposed to unilateral, disarmament. However, I must add that some of the fears that have been generated are entirely without foundation. The CND has not helped the situation by publishing a leaflet, which I have here, containing no fewer than five major mis-statements of fact, all of which are inclined to increase people's fears without good reason.

  PRIME MINISTER

    Engagements
    Mr. Greville Jannerasked the Prime Minister if she will list her official engagements for Tuesday 10 November.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I held meetings with ministerial colleagues and others. In addition to my duties in the House, I shall
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    be having further meetings later today, including one with President Burnham of Guyana. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Janner: Will the Prime Minister have the opportunity today to consider the survey that has just been published by the Association of Directors of Social Services, which states that, contrary to Government statements, the services for Britain's most vulnerable groups—the disabled, the poor and the elderly—are deteriorating? If not, will the right hon. Lady undertake to study that survey and, if it is correct, try to lift some of the burden of our present economic miseries from those least able to bear them?
    The Prime Minister: There are many, many things on which the Government and local government wish to spend extra money. We have to decide on the priorities, and it is for local government to decide its priorities. I am sure that many local authorities would include the services to which the hon. and learned Gentleman referred among their priorities.
    Mr. Greenway: Is my right hon. Friend aware that many cheap electrical goods are being imported, at political prices, from Eastern Europe, which is damaging to the home industry and particularly to the Hoover factory at Perivale in my constituency, where many people are being put out of work? Will the Government do something about that, because there are no reciprocal arrangements with the countries concerned?
    The Prime Minister: As my hon. Friend knows, the European Commission can take anti-dumping action if evidence is placed before the Community. I am sure that if my hon. Friend has evidence he will place it before the Community. At the moment, the Commission is inquiring into two matters—imports of domestic refrigerators and cylinder vacuum cleaners. I hope that the reports will be published soon.
    Mr. Foot: On the question of the extremely damaging cuts referred to by my hon. and learned Friend the Member for Leicester, West (Mr. Janner), has the Prime Minister had a chance to consider the statement made by the spokesman for the vice-chancellors of our universities, who say that the cuts proposed by the Government could maim, cripple and butcher our university system? Will she undertake to review all the proposals for such cuts?
    The Prime Minister: I believe that this year's grant to the University Grants Committee is about £900 million. It is, and always has been, for the committee to decide how that shall be allocated. It has been a matter of pride among all Governments that they do not interfere with the allocation of the money. If the right hon. Gentleman is saying that a future Government will interfere with the allocation of money to the universities, he is taking a retrograde step.
    With regard to cuts, the right hon. Gentleman is aware that we are spending more public money this year than last year and he should also be aware of the crippling effect of high rates and taxes on private business, which provides jobs.
    Mr. Foot: Will the right hon. Lady note that the spokesman for the vice-chancellors says that the present cuts will mean a reduction of 10,000 in the number of

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    students coming to our universities each year? Does she not think that that, in the circumstances of heavy youth unemployment, is an act of barbarism?
    The Prime Minister: The right hon. Gentleman neglects to observe that extra money has in the end to come from private sector industry or from people who are making a profit, and that the more we take away from them the less they are able to have capital available for expansion. It is that sector that will provide the extra jobs in the future.
    Mr. Latham: What steps does my right hon. Friend intend to take to try to bring about a closer and more harmonious relationship in policy towards the Middle East and Israel between ourselves and the American Government?
    The Prime Minister: It is the constant object of our efforts to work for a comprehensive peace settlement that will recognise the right of Israel to live in peace behind secure borders, and the right of the Palestinian people. That was the object of the Venice declaration. We are now hoping, with the United States, to find grounds upon which we can agree to participate in the Sinai force, to try to ensure that that part of the agreement between Egypt and Israel is implemented in accordance with its terms.
    Mr. Beith: Will the Prime Minister try to find time today to reflect further on the Long spying case? Is not one of the lessons of that case that if Ministers do not have to answer to Parliament for particular matters, they are likely to be told less about them? Is it not, therefore, important that we devise secure mechanisms by which Parliament can make Ministers answerable on these matters?
    The Prime Minister: If the hon. Gentleman will look at the speech that I made on the Blunt debate, at the extensive statement I made on the Hollis debate, and at the long answers that I have given to questions, he will find that most of the answers to his questions to which it is reasonable to give answers are there.
    I want to make one thing absolutely clear, in view of some of the reports. It is said that Ministers, Prime Ministers and Home Secretaries today are not informed. Either in a previous debate or in a very lengthy reply—I cannot remember which it was—I made it very clear that at least for the last decade Prime Ministers and Home Secretaries have been informed, and nothing that has been said recently has come as a surprise to me in any way.
    Mr. Canavan: The right hon. Lady knew all along.
    Mr. Newensasked the Prime Minister if she will list her official engagements for Tuesday 10 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I have just given.
    Mr. Newens: Does the right hon. Lady accept the possibility of the super Powers settling their differences in a nuclear war confined to Europe? If she does not, will she take this opportunity of making that clear, so that Mr. Reagan may understand the facts, since he has recently made statements on this issue?
    The Prime Minister: As my right hon. Friend the Secretary of State for Defence said a few moments ago, we regard it as our first duty to see to the defence of Britain, in accord with our NATO Allies. I think that the hon. Gentleman is referring to some remarks which might
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    have been made across the Atlantic about NATO's options. It would be irresponsible if NATO had not many options for many circumstances. What they are I am not prepared to say.
    Mr. John Hunt: Has my right hon. Friend had time today to study the judgment that has been given in respect of the GLC supplementary rate? Will she commend the initiative of Bromley council, which alone among the London boroughs has stood up against the rapacious demands of the GLC, and will she lend her support to its continuing efforts on behalf of London's hard-pressed ratepayers?
    The Prime Minister: I join my hon. Friend in congratulating Bromley council on its initiative. I saw the judgment, which will have been greeted with great relief by many people. Whether it will be a matter for appeal I do not know, but it will now be for the GLC to consider what action it will take in the light of that judgment.
    Mr. Alexander W. Lyon: Does the Prime Minister recognise the danger of the judges arrogating to themselves political decisions? Although it may be one thing to say that the council has exceeded its statutory power, it is quite another to say that, even if it had the statutory power, it acted unreasonably in balancing the interest of ratepayers and fare-paying passengers? In such circumstances, the judges were making political decisions and not judicial decisions.
    The Prime Minister: I wholly reject what the hon. Gentleman has said. Judges give decisions on the law and the evidence before them. They do so totally impartially.
    Sir William Clark: As it is the official Opposition's policy—as, indeed, it is the opinion of Mrs. Shirley Williams of the Social Democratic Party—that private education should be abolished, will my right hon. Friend today take the opportunity to remind the taxpayer that that policy would cost the British taxpayer about £2,000 million?
    The Prime Minister: I do not believe that it is possible to abolish private education and still keep a free society. The sum that my hon. Friend mentions is roughly the capital cost that would fall upon the taxpayer. In addition to that, there would be a substantial revenue cost of about £400 million a year.
    Mr. Canavanasked the Prime Minister what are her official engagements for 10 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Canavan: How does the Prime Minister reconcile her whitewash reply to me yesterday with the fact that The Sunday Times has the names of two more traitors who may be revealed this coming weekend, one of whom apparently expressed surprise at not being prosecuted after confessing to MI5? How many other members of the old boy network of spies and traitors must the media reveal before the Prime Minister comes clean and accedes to my demand for a full-scale public inquiry into this Establishment cover-up?
    The Prime Minister: These matters, all concerning the same group of people, have been investigated time and again, and I have been very forthcoming in the amount of information that I have tried to give to the House, while still retaining the interests of security.

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    I have made it clear in my replies—I believe that most hon. Members would agree with me—that we should never use parliamentary privilege to imply guilt by association or by accusation, nor should we use it to name people, knowing that we nave not sufficient evidence to mount a prosecution. That, I believe, is the right view to take, and it is the view that I shall continue to take.
    Mr. Proctor: While I welcome the Prime Minister's full and frank statement yesterday, may I ask her to confirm whether investigations were made about Mr. Leo Long's activities between 1946 and 1952, when he held important and more senior positions in intelligence and had access to more sensitive information than he had prior to 1945? Or are we relying on his own words as a self-confessed Soviet spy?
    The Prime Minister: I gave a very full reply about Mr. Long and I would not wish to add to it without further very careful notice of a specific question.
    Mr. Leadbitter: Although the Prime Minister has gone a considerable way in these matters, will she accept that the official statements and events in the period of the
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    Philby and Blunt exposures, and now the Long exposure, have caused increasing public concern? The various cover-ups, the non-prosecution of treachery, the continuation of people in office, and the special privilege for special persons, are matters that should not have been tolerated. Will she therefore agree;—I go no further than this because it is an important matter that should not be dealt with loosely—that importance must be attached to the nondisclosure concerning other persons who have committed offences or who are security risks? Will she agree that: this applies to those of the Blunt and Long school who may be in office?
    The Prime Minister: I believe that most of what the hon. Gentleman has said would be covered by the reply that I gave previously. I have tried to be as frank as I possibly can with the House, but it would be totally wrong for me to name names of people knowing that we could not mount a prosecution against them, or that their confessions had been obtained in a way which would render those confessions inadmissible. That is the honourable course to take, and I believe that it is the right one to continue to take.

Anglo-Irish Bilateral Talks
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I should like to make a statement—
Rev. Ian Paisley: On behalf of the people of Ulster—[Interruption.]
Mr. Speaker: Order. I think that the kindest thing for us to do is to continue.
The Prime Minister: With permission, Mr. Speaker, I should like to make a statement—
Mr. Peter Robinson: On behalf of the people of Ulster—[Interruption.]
The Prime Minister: —about the meeting which I had with the Taoiseach, Dr. Garret FitzGerald, in London on 6 November.
This meeting was one in a regular series. It was held on a similar basis to those which take place with other Heads of State and of Government of the European Community. However, it was—[Interruption.]
Mr. Speaker: Order. The Prime Minister should be heard.
The Prime Minister: However, it was exceptional in that on this occasion the Taoiseach and I received the joint studies commissioned at my meeting with the then Taoiseach in Dublin on 8 December 1980.
The House will recall my undertaking to place before it the recommendations on matters of policy arising out of the studies. The studies, other than that on security matters, will be laid before the House tomorrow. They deal with possible new institutional structures, citizenship rights, economic co-operation and measures to encourage mutual understanding. I have already placed in the Library of the House copies of the joint report of senior officials on the studies and of the communiqué which the Taoiseach and I issued on Friday.
At our meeting the Taoiseach and I affirmed our agreement on a number of points which are fundamental to relations between the United Kingdom and the Irish Republic.
We were agreed on the benefits of close relations between our two countries. We are determined to work for a deepening and strengthening of those relations.
We were agreed on the need to find ways to reduce the tensions between and to reconcile the peoples of the two parts of Ireland.
We were agreed on the need to intensify economic co-operation between both countries and in particular between Northern Ireland and the Republic. Such co-operation should assist the economies of both countries as well as encouraging further co-operation in other fields.
We were agreed in our resolute opposition to violence and terrorism. We are determined to maintain the very high level of co-operation between the security forces of both countries. As the communiqué states, we noted with approval the efforts being made to ensure that those who commit crimes in one country should not be able to escape prosecution and conviction by seeking refuge in the other.
We were agreed, finally, that any change in the constitutional status of Northern Ireland would require the consent of a majority of the people of Northern Ireland. This is a fact which both the present Taoiseach and his two predecessors have publicly accepted.
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It is against this background that the joint studies must be seen. Many of the suggestions in the joint studies are for further consideration, but the Taoiseach and I agreed that an Anglo-Irish Intergovernmental Council should be established. It will provide a framework which will facilitate more regular and more frequent contacts between Ministers and officials. It involves no change whatever in the constitutional position as regards relations between the United Kingdom and the Republic.
In the same context, there was agreement to work towards the establishment of an advisory committee on economic, social and cultural co-operation. Closer cooperation and friendship are not matters for Governments only. I hope that this committee will have a wide membership, representative of a broad cross-section of ordinary people and organisations with interests in this country and in the Republic of Ireland.
The suggestion was made in the studies that an Anglo-Irish interparliamentary body might be established at an appropriate time. It was envisaged that the members of such a body would be drawn from the British and Irish Parliaments, the European Parliament and any elected assembly that may be established for Northern Ireland. The Taoiseach and I agreed that this would be a matter for the two Parliaments themselves to pursue.
This was a friendly and constructive meeting. It has helped to consolidate the relationship between the United Kingdom and the Republic of Ireland. The Government's objective is to create a situation in which meetings between the British Prime Minister and the Taoiseach are seen to be routine. We took a significant step in that direction on Friday.
Mr. Michael Foot: The Opposition agree that there should be continuous and close meetings and discussions between the Government of this country and the Government in Dublin. Therefore, we greatly welcome these discussions, as well as those which have preceded them. Our criticism previously was that the results of discussions were not made public to the House. We are glad that there has been a change of feeling on that subject and that full reports are now to be made to the House.
We ask that the new Anglo-Irish Council should report persistently to the House on any discussions it may have.
We especially welcome the statement to which the right hon. Lady drew attention—that any change in the constitutional status of Northern Ireland would require the consent of a majority of the people of Northern Ireland. We accept that principle of consent, and we wish the whole future of our two countries to be based upon it. The Opposition have put forward proposals for advancing towards a united Ireland. We believe that that is the right course that we should travel. There can be fruitful discussions about that. That view is one that is generally in accordance with that of the present Taoiseach in Dublin. He takes much the same view. But I emphasise again that we believe that his emphasis on the process of consent is of great importance.
In view of the major matters that have arisen in these discussions and are presented to the House and the country by them, may the House have an early debate on the matter?
Another matter has arisen today, on a similar subject. Representations were made this morning by many of my hon. Friends in respect of the breakdown of the arrangements about the Belfast-Liverpool ferry. This

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matter is of great concern to people in Northern Ireland. Many people's jobs are involved. Does the right hon. Lady not consider it wise, particularly in these circumstances, to take special action on this matter, which could assist the general atmosphere in Ireland and the general approach to fresh arrangements for Ireland generally?
The Prime Minister: First, I thank the right hon. Gentleman for his welcome for the meeting and for the statement.
Secondly, the joint studies will be published in full tomorrow. I hope that they will give rise to discussion and debate. Perhaps the right hon. Gentleman will pursue the matter of a debate at some appropriate time with my right hon. Friend the Leader of the House.
Thirdly, the constitutional position of Northern Ireland is set out in the Northern Ireland Constitution Act 1973, under which Northern Ireland remains part of the United Kingdom unless the majority of the people of Northern Ireland wish otherwise, as shown by a poll conducted in a way set out in that Act. That guarantee is enshrined in our law and totally remains and will remain.
With regard to P & O, my right hon. Friend the Secretary of State for Northern Ireland saw a group of people about the matter this morning. I must, however, tell the right hon. Gentleman that it is not the Government's intention to provide a subsidy or to intervene in the dispute.
Mr. James Kilfedder: Regardless of what the Prime Minister has said, the cold reality is that the terms of the communiqué and the consequential events that will flow from it represent a significant first step by a Tory Government towards easing Northern Ireland out of the United Kingdom with the consequent betrayal of the birthright of Ulster Loyalists.
Does the Prime Minister now realise, following the further sickening, cowardly murders of Protestants in Northern Ireland by the vile sectarian Provisional IRA, that her talks with the Dublin Prime Minister will not stop the Republican atrocities in Northern Ireland, particularly as the Dublin Government refuse to extradite the terrorists who seek sancturary in the Republic and especially as Cardinal O'Fiaich, shedding crocodile tears over the victims of these atrocious thugs, refuses to excommunicate the terrorists?
The Prime Minister: The hon. Gentleman will not be surprised that I disagree with much of what he says. The reality is that the guarantee to Northern Ireland remains. It is a part of the United Kingdom and will stay a part of the United Kingdom unless its people both wish and consent to do otherwise.
With regard to security and the combating of terrorism and crime, our security forces—the Army, the police and the Ulster Defence Regiment—do a superlative job that I am sure the hon. Gentleman would wish to acknowledge. I might also remind him that we are receiving wonderful co-operation across the border concerned with catching terrorists wherever they commit their offences and trying them either in the North or in the South. That co-operation is very valuable in enabling us to combat terrorism.
Mr. James MolyneauxCan the Prime Minister not begin to understand the feelings of ordinary people in Northern Ireland who are experiencing a sense of betrayal that no amount of explanation or denial can remove?
The Prime Minister: I try all the time to understand the feelings of the people in Northern Ireland. I remind the hon. Gentleman that this Taoiseach and the two previous Taoiseachs have both accepted publicly that any change could come about only with the consent of the people of Northern Ireland. That in itself is a great advance on the position that used to be taken up.[Interruption.] The right hon. Member for Down, South (Mr. Powell), sitting next to the hon. Gentleman, says, "No, no." In the meantime, the guarantee that Northern Ireland remains part of the United Kingdom is enshrined in the 1973 Act, and it remains.
Mr. Stephen Ross: Is the right hon. Lady aware that we on the Liberal Benches assure her of our support for these tangible signs of closer co-operation between the United Kingdom and the Dublin Government? May we impress on the right hon. Lady the fact that she should not be put off, in her determination to pursue the talks, by noises on or off the stage in this Parliament? Was any further progress made during the talks on extradition and also on the subject of the inter-parliamentary grouping that has been suggested? How will that proceed from now on? What talks will take place on that subject?
The Prime Minister:With regard to the hon. Gentleman's first question, it seems to me reasonable to try to have friendly relations with an adjacent State. I am sure that this is the right policy to pursue and that it is in the interests of the people of the United Kingdom, including Northern Ireland, and also in the interests of the people of the Republic.
As the hon. Gentleman knows, we in this country abide by the extradition treaties. We extradite people even to the Republic should the circumstances warrant it. The hon. Gentleman is right in his assertion that the Republic does not have extradition. I doubt very much whether we shall succeed in persuading the Republic to have extradition, but the matter is pursued with it from time to time. Inter-parliamentary proceedings are a matter for this House and for the similar House in the Republic of Ireland. I would not wish to interfere. Now that the idea has been put up, I hope that it will be discussed in the appropriate forum here.
Mr. Michael McNair-Wilson: In consideration of parliamentary or possible parliamentary representation on the Anglo-Irish intergovernmental council, has my right hon. Friend given thought to the possibility that it could change the constitutional relationship between two friendly nations? Has she also given thought in particular to the possibility that if she goes ahead with such a proposal some of the parliamentary representation might come from Northern Ireland?
The Prime Minister:There must be a slight misunderstanding. It is not expected that there would be any parliamentary representation on the intergovernmental council except in so far as Ministers are themselves Members of Parliament. There is co-operation al three levels—first, at the level of Government and officials, all of whom are associated with Government. That is the intergovernmental council. Secondly, it is for consideration whether Members of Parliament of this House and Members of Parliament of the House in the Republic of Ireland should think it right to have co-operation between

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themselves. That would be co-operation at the parliamentary level. The third level would be at advisory committee level where people who are neither members of Governments nor Members of Parliament wish to take part in closer relations. There are three distinct levels.
Mr. Gerard Fitt: Will the Prime Minister accept that the vast majority of people in the island of Ireland and in this island will welcome these talks for what they are—an attempt to cement friendly relations? Is she aware that the secrecy that surrounded the talks with the previous Taoiseach has left one party to the talks in the position where a debate is taking place today in the Irish Parliament with the intention of sabotaging the talks that took place between the right hon. Lady and the Taoiseach last week?
Will she also appreciate that there needs to be a sense of urgency about the creation of the parliamentary forum as agreed at the Downing Street talks? Will she accept that there would be very few objections from the Opposition side of the House to the setting up of that parliamentary forum? There might even be a number of supporters on her own Benches.
The Prime Minister: I thank the hon. Gentleman for what he says. With regard to the parliamentary aspect, I believe that there is an Anglo-Irish all-party group, which could perhaps consider these matters further. A sense of urgency would have to come from hon. Members on both sides of the House. I do not think it is necessarily right that the Government themselves should interfere in these things.
Sir John Biggs-Davison: Have not these exchanges shown how important it is to carry Ulster Unionists with the Government's endeavours and to show them that they will not be abandoned to the embraces of so-called loyalist extremists and exhibitionists?
The Prime Minister: I agree totally with my hon. Friend about this matter. That is why we have always stressed the importance and the significance of the guarantee. We hope thereby to retain the confidence of our Ulster Unionist friends.
Mr. J. Enoch Powell: Does the Prime Minister not recognise that a nation cannot secure its own peace and security by entering into arrangements which its own people rightly regard as a conspiracy against them with their enemies?
The Prime Minister: The people I represent are all the people of the United Kingdom. I do not think that they would take the view that the right hon. Gentleman takes.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call three more hon. Members from either side before moving onto the next business.
Mr. Nicholas Winterton: Although one appreciates the frankness of my right hon. Friend's statement, how can she explain the fact that so many IRA confirmations of their involvement in atrocities come from Dublin if we are getting so much co-operation from the Dublin Government? Will she confirm that the party that we both represent still remains the Conservative and Unionist Party?
The Prime Minister: Yes, indeed. That is one reason why the guarantee was enshrined in an Act of Parliament. That guarantee wholly remains. With regard to the IRA and activities south of the border, the Government of the Republic are very active indeed in trying to trace all people who commit acts of terrorism or crime. They recognise that those people are enemies of democracy and are a menace to the Government of the Republic as well as to the Government and the people of the United Kingdom.
Mr. Neville Sandelson: I welcome the initiatives that have been taken by the Government, which will have our firm support, but what consideration has been given by the right hon. Lady and Dr. FitzGerald to the introduction of a wider dimension as an aid to further progress? Is it not possible that the European Community and its agencies can be of great practical assistance, and that an international solution, universally accepted as disinterested, is more likely to succeed than is a purely British solution?
The Prime Minister: The future of Northern Ireland is a matter for the United Kingdom, because Northern Ireland is a part of the United Kingdom. That is a matter wholly for the United Kingdom, for the people of Northern Ireland and for this Parliament. In answer to what the hon. Member for Hayes and Harlington (Mr. Sandelson) said about the wider dimension, the talks take place against the background of bilateral discussions that we have with our partners in the EEC. That is precisely how this set of bilateral discussions started.
Mr. Ivor Stanbrook: Will my right hon. Friend confirm that it is not the Government's policy to encourage the concept of a united Ireland, even in the long term?
The Prime Minister: It is not for me to say what the people of Northern Ireland may wish to do. I take the view that Northern Ireland is part of the United Kingdom. It is accepted that it is part of the union. It will remain so unless they wish to the contrary.
Mr. Kevin McNamara: The right hon. Lady will recall that the Labour Party conference voted in favour of a united Ireland and to campaign vigorously for that by consent. Will the intergovernmental council which is to be established be statutory or conventional? Will it publish agendas? How often will it meet? What are the topics on the agenda likely to be? Can the right hon. Lady confirm or deny the rumours that there will be certain appeasement to Unionists, by giving powers to local authorities, and in particular, will she deny the canard that it is intended to give planning powers back to local authorities in Northern Ireland?
The Prime Minister: The intergovernmental council is an informal organisation which will not publish agendas. It is a framework against which many ministerial meetings and meetings of officials will take place. Some of those meetings already take place. Now they will perhaps take place more often against that general framework. Secondly, on the question of any future devolvement of government in Northern Ireland or greater powers for local authorities, my right hon. Friend the Secretary of State is constantly seeking a way to return more responsibility for the affairs of Northern Ireland to

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the people of Northern Ireland. That search will continue. Thirdly, planning powers would also be part of that process.
Mr. Christopher Murphy: Will my right hon. Friend confirm that she is satisfied with the rate of progress in the Republic towards reciprocal arrangements for voting in its general elections for British citizens?
The Prime Minister: I understand from the Taoiseach that he is likely to bring forward a measure to his own Parliament shortly.
Mr. Harold McCusker: In view of the Prime Minister's studied neutrality at her press conference on the matter of Irish unification, of which we have heard some echoes here today, can she repeat with the same sense of personal conviction as she did in Belfast three years ago that she still stands rock firm for the Union?
The Prime Minister: I find it difficult to understand the precise point of the hon. Gentleman's question. Northern Ireland is part of the United Kingdom—as much as my constituency is.
Mr. Robert Parry: On a point of order, Mr. Speaker.
Mr. Speaker: Before the hon. Gentleman puts his point of order, may I make it clear that I shall take a very dim view of it if it is not a point of order but only a question that would have been asked if I had called any hon. Member.
Mr. Parry: My point of order, Mr. Speaker, is that the Prime Minister, in an earlier reply to my right hon. Friend the Leader of the Opposition, said that her right hon. Friend the Secretary of State this morning met a group of people to discuss the P & O ferry closure. In fact, the right hon. Gentleman met seven right hon. and hon. Members of the House—
Mr. Speaker: Order. That cannot be a point of order for me. I cannot rule on it.
Mr. Michael English: On a point of order, Mr. Speaker. I wish to raise a point of order which was not the question that I intended to ask. Do you think that only one Labour Back Bencher is a disproportionately small number to call?
Mr. Speaker: No I do not, or I should have done otherwise.
Mr. A. E. P. Duffy: On a point of order, Mr. Speaker. In view of the constitutional aspect of the Prime Minister's statement and the fact that it occupied less than 30 minutes, I hope that you will look at the list of speakers that you have called, in which case you might think that it is not as balanced as usual. You might at least have called those hon. Members who were on their feet. That would have occupied only another five minutes.
Mr. Speaker: Order. I understand—
Mr. Fitt rose—
Mr. Speaker: Very well.
Mr. Fitt: On a point of order, Mr. Speaker. When the Prime Minister rose this afternoon to make her statement, you will no doubt have heard the voice of Ulster from the Side Gallery. It happened to be two Members the House. Can I ask whether you will take any sanction against those two Members, who are Members of this House, who interrupted from the Gallery?
Mr. Speaker: Order. Obviously, the hon. Gentleman is under a misapprehension. Any hon. Member is entitled to call his question from the Side Galleries. It is a long-established custom, and it has been done, but not before during my Speakership. I have not named people for interrupting, or I should have been kept very busy.
Mr. Foot: On a point of order, Mr. Speaker. I understand the reply that you made a moment ago, and I do not question your ruling, but I invite you to look afresh at the number of Labour Members who were called from the Back Benches. If you do so, you may think that it will help the House to make a further statement. It is an extremely important matter, and one on which we have not had debates in the House in the past. Surely it would not exceed normal time to have half an hour on a statement of such significance. I hope, therefore, that you will look at the matter afresh and perhaps make a further statement.[Interruption.]
Mr. Speaker: Order. I shall answer the Leader of the Opposition. I regret to say that I do not think that I ought to give further consideration to the matter, having dealt with it before the whole House this afternoon. It is unfair that any Speaker should be subjected to such pressure.
Mr. Norman Atkinson rose—
Mr. Speaker: I shall listen if it is a genuine point of order.
Mr. Atkinson: On a point of order, Mr. Speaker. In a reply just now, the Prime Minister stated that Northern Ireland is as much an integral part of the United Kingdom as her own constituency. If that is so, how is it that people can be repatriated to Northern Ireland, which happens at the moment—
Mr. Speaker: Order. With every respect, that is not a point of order. It is a point of debate in reply to what the Prime Minister said.

Statutory Instruments, &c.
Mr. Speaker: By leave of the House I shall put together the three Questions on the motions relating to Statutory Instruments.
Ordered,
That the C. K. Marr Educational Trust Scheme 1981 (S.I., 1981, No. 857) be referred to a Standing Committee on Statutory Instruments, &c.
That the Rating (Repayment Procedures etc.) (Scotland) Regulations 1981 (S.I., 1981. No. 1045) be referred to a Standing Committee on Statutory Instruments, &c.
That the Rating (Timetable and Procedures) (Scotland) Amendment Regulations 1981 (S.I., 1981, No. 1046) be referred to a Standing Committee on Statutory Instruments, &c —[Mr. Pym.]

Orders of the Day

  Debate on the Address
  [FIFTH DAY]
  Order read for resuming adjourned debate on Question [4 November]
  That an humble Address be presented to Her Majesty, as follows:
  Most Gracious Sovereign,
  We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament. —[Mr. Michael Shaw.]
  Question again proposed.

  Nationalised Industries
  Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.
  3.59 pm
  Mr. Merlyn Rees: I beg to move, at the end of the Question, to add:
  But humbly regret that the Gracious Speech contains proposals which, in putting private profit before the public interest, strip the nation's North Sea gas and oil assets, create great uncertainty in the coal industry's future and wreck any prospect of an overall energy policy.
  In the past two years we have seen the Government operate in a way that amounts to a landmark in Conservative attitudes to economic affairs. They are doctrinaire and believe in a single approach to the economic affairs of the nation. They believe in monetarism, not as one arm of a policy to be reviewed in the light of a changing economic climate, but as a policy to be followed relentlessly. They are a Government who believe in ideology, and we can all see the results of their policy.
  The new Secretary of State for Energy is an arch supporter of that policy. He believes in free market forces, as others believe in the State. I wish to make it clear that I believe in neither. There is a growing role for the State and, in certain circumstances, there is a role for free market forces, but they must be justified, in each case, on their merits. In natural resources, the State's role must be paramount.
  A corollary to the Government's economic policy is their worship of the graven image of the public sector borrowing requirement. Much of their policy in the public sector is motivated by the aim to reduce it by selling capital assets. I refer to energy assets that could generate income in the future. We will be selling—perhaps at too low a price—our birthright. Above all, the Government and their supporters are motivated by a feeling against the public sector that can be described as vindictive as well as doctrinaire. That feeling ignores the different types of public ownership. The reasons for nationalising coal, oil or gas are different from the reasons that may apply to other types of industry and to different types of nationalisation and public ownership.
  A Tory Government took Rolls-Royce into public ownership. They were right not to nationalise it, but they were also right, in the circumstances of the engineering
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  industry, to take it into public ownership. Whatever the reasons for public ownership, or the different types of public ownership, the Government take every opportunity to denigrate such activities, and in that the Prime Minister takes the lead. In the foreseeable future there will be a large public sector and we should constantly consider how best it can be organised. I accept that we should consider the role of private capital in some public sector industries. However, the Government's attitude to the public sector represents a negation of the responsibility of the Government, or at least of a Government who seek to govern on behalf of all the community.
  In the public sector, the Government's policy is to treat all parts in the same way. They are fundamentally wrong about oil and gas. Oil and gas are natural resources. In the last century there were grave arguments in the House about land. In the same way, to use the political terminology of that century, the natural resources of oil and gas are "God given". They belong to the people and are not to be wasted by a wanton belief in free market forces. By their very nature free market forces are short-run, and decisions on oil and gas need long-term vision.
  Mr. Peter Rost: Can the right hon. Gentleman explain why he and the previous Labour Government sold a large chunk of British Petroleum?
  Mr. Rees: Yes. I have a note in front of me to the effect that an hon. Member would interrupt at that point. British Petroleum is a different organisation from the British National Oil Corporation. It was set up in 1914 for different purposes. It may well be that there should be a change in the organisation of BP. All aspects of energy policy should be looked at time and again. The company was set up for a different purpose and the BNOC is not BP.[Interruption.] If the Minister thinks that BP is run as a State organisation and is under the control of the Secretary of State for Energy, he has something to learn. It is not run in that way. British Petroleum is a different type of organisation from BNOC.
  We shall have to wait and see the legislation on oil to discover whether one or two Bills are involved. However, I shall refer to an oil Bill. We shall have an opportunity to deal with the Bill when it comes before the House in the new year. I have no desire—and I do not know whether it would be in order—to turn this into a pre-Second Reading debate. However, as the Secretary of State made a pre-Gracious Speech type of statement two weeks ago, I assume that I should not be creating a precedent.
  I shall ask the Secretary of State for information on oil, gas and coal in order to illuminate the hazy words of the Gracious Speech and, in some respects, the even hazier words of the Secretary of State's apparent statement of clarification.
  If a major need of Government policy is to reduce the public sector borrowing requirement, why not deal with the convention of the public sector borrowing requirement? It is not true that capital expenditure is treated in the same way for all the 100 per cent.-owned firms. Why does a holding of less than 50 per cent. not count in relation to the public sector borrowing requirement, given that substantial sums of money could be involved in a very large firm? Is that the only reason—we do not yet know the precise figure—for a figure of less than 50 per cent. being struck for the BNOC?

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  In the BNOC the Government are privatising not a monopoly but an equity based company that is different in kind from the National Coal Board and the Gas Corporation. It is not like BP. If the hon. Member for Derbyshire, South-East (Mr. Rost) had visited BP, he would know how many times it had been controlled by the Government. I refer, for example, to the Iranian crisis. Indeed, I was in Northern Ireland during the Ulster workers' strike, and BP did what it liked about petrol supplies for Northern Ireland. It was not under my control or that of the Government.
  The Under-Secretary of State for Energy (Mr. David Mellor): It was all the better for that.
  Mr. Rees: I am arguing that that is not the case for the BNOC. The Under-Secretary has recently been appointed to the Department of Energy, but I had hoped that he had learnt that elementary point. The assets of the BNOC will rise as the oil price rises with the long-term world energy shortage and we shall lose the added value. The BNOC is a successful firm and has played a major part in developing our North Sea assets in the last five years. Its achievements since 1975 are remarkable. It is one of our most successful organisations. It is an operator in three fields, and it is a venture partner in seven more. That was before the seventh round, when changes were made in that respect. The company moved quickly into profitability, with a profit of £88 million in 1980. Whatever else may be said, no Conservative Member can poke fun at the BNOC in the way that they can at some parts of the public sector, where it is almost impossible to make profits in the normal sense of the term.
  The British National Oil Corporation is an extremely successful organisation. It is highly regarded by the foreign companies that deal with it, and by British firms. The Government cannot say that they are dealing with the BNOC because it has failed the nation. Alone among European countries, Britain is self-sufficient in oil. To take advantage of that position we must control investment in the North Sea, its development and the trading pattern. All of that will be put at risk by the policies that have been announced in the Gracious Speech.
  With the proposed change of structure, the Treaty of Rome may—it is the Government's job to make an assessment—prevent us from restricting sales to EEC countries once the division has been made between a private producing company and a trading company that is 100 per cent. owned. Public ownership means that we receive 100 per cent. of the revenue. Private ownership will reduce that proportion and also the tax take.
  Private ownership will encourage refining abroad. If I do not deal with this subject at length, we will have to find an opportunity to do so. The decline in Britain's refining capacity in recent months is an important issue. What will happen to refineries, such as that on the Isle of Grain, with the new BNOC? It would be helpful if we knew in advance of the Bill being drawn up. Will we be shown the articles of association of the new joint stock firm before the Second Reading debate?
  From my investigations, I know that articles of association in a firm where less than 50 per cent. of shares, or whatever the proportion is to be, is in the hands of the private sector are most important. Will we see the articles of association in advance of the Bill, because I presume that the articles of association will prevent certain things
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  from happening about which I and my hon. Friends are concerned. How will the sale of shares be undertaken? Will they be sold all at once, once the Bill is passed, whatever the price on the market? That may be an undervaluation of a precious asset. Alternatively, will they be dribbled on to the market?
  What steps will be taken in the sale to protect the national interest? Left with a Government minority holding, control could pass to a foreign multinational or group of foreign multinationals. One of them, as an aside in a newspaper the other day, said as a light-hearted joke that whatever happened in the first instance one could purchase the shares on the Stock Exchange afterwards, and end up—[Interruption.] One of the firms said that as a joke. I do not regard it as a joke. We should examine that situation.
  Does the Secretary of State intend to state in the articles of association, or in the Bill itself, that the interests of the British National Oil Corporation and what is done in the North Sea will be protected in the articles of association, by legislation, or by way of order, which ever is the more appropriate? Even if those three ways are not appropriate, my question still stands. Will the Secretary of State protect, under this legislation, British North Sea oil from a takeover by foreign national interests?
  Surely the Government have made an estimate of the time taken to unravel the contracts in each field. I am referring not to trading, but to production in the North Sea. The problem arises in the transfer of British oil producing assets to the new company. They are held by the British National Oil Corporation in common with other firms and will alter the balance of some of the consortia involved. I have no wish to play House of Commons games, but the Secretary of State must have a view on this. The Government will have to negotiate agreements with all the interests involved. My right hon. Friend the Member fir Greenock and Port Glasgow (Dr. Mabon) was involved in setting up earlier consortia, and the rules laid down lead almost automatically to hybridity. What is the Secretary of State's view on that? It took five years, I am advised, to build up the agreements. —[Interruption.] Hon. Gentlemen may sneer, but it took five years. Do hon. Gentlemen disagree with that?
  Mr. Archie Hamilton: Will the right hon. Gentleman give way?
  Mr. Rees: No, it was the hon. Member for Bedford (Mr. Skeet) who disagreed. He laughed at that.
  Mr. T. H. H. Skeet: I shall laugh if I like.
  Mr. Hamilton rose—
  Mr. Speaker: Order. The right hon. Gentleman can decide whether he gives way.
  Mr. Hamilton: It took that time to tie up the arrangements so that they could not be unravelled later.
  Mr. Rees: If the arrangements cannot be unravelled, the Secretary of State is in a funny position. If the hon. Gentleman is right, we have a game of hybridity before the House. I presume that the hon. Gentleman is wrong and that they can be unravelled. I hope that we are not to have a clause in the Bill to give power to the Secretary of State to do what he likes in this respect. If there is to be an unravelling, will the Secretary of State tell us what is to be done about the 49 per cent., 34 per cent. or whatever it might be?

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  The Secretary of State should tell us about parliamentary accountability. I understand from the media that the right hon. Gentleman has made profound changes to the Bill that was published last year. He has taken control. In my office we called the first Bill published last year the "East German Bill" because it gave so much power to the Secretary of State for Energy that he could do what he liked, whenever he liked, without coming to the House of Commons. I am sure that the right hon. Gentleman, with his regard for the House of Commons, would not approve of that.
  In June of this year the trading company ran into a deficit. I am not saying that it ran into trouble, but the trading arm of the BNOC ran into deficit because of a pricing crisis. With the new company—the State-owned company, the trading company—will losses be funded by the Government? Will it affect the public sector borrowing requirement? Has an assessment been made of what the PSBR could be as a result? Will the Government set targets for the trading company? Will it be an equity company? Will it be a type of nationalised industry?
  It is important that we know what type of company it will be, because, much as we disagree with what is being done in one section of the company, we should know the nature of the trading company. There could be trouble with the EEC in relation to the trading company. Will the trading company be able to act as the BNOC did during the Iranian crisis? We used it then in the national interest. Will the company be able to do that in future oil crises, because we are likely to have a number of oil crises?
  What type of person will be appointed to the board of the company? For instance, will they be political appointees? Will they be appointed by the Secretary of State? What nature of people will be appointed to the trading company? A number of BNOC directors, particularly the non-executive directors, have knowledge of the private sector oil trade. Will the new appointees be civil servants? Will they be there to do as they are told? Perhaps the Secretary of State regards that as important. Will the appointees exercise their commercial judgment? Will they exercise the judgment that they have garnered over the years?
  The BNOC acts on behalf of the Government. It handles the strategic reserves of oil. Who will handle the strategic reserves of oil under the new set-up? Will it be the trading company or the production company? It is important to clear up one matter in relation to that question. The story is that the Government are selling off a large chunk of the strategic reserve of oil. Is that true? It is important to know. A judgment about strategic reserves on the basis of free market forces will not get the Secretary of State far.
  A long political battle lies ahead over the disposal of a large part of a successful firm. I have a question to ask about the BNOC and its board. Does the Secretary of State's policy have the approval of the BNOC board? I do not say that it should have that approval. I accept that the Secretary of State, who is responsible to the House, decides on policy. That is right, but does the Secretary of State's policy have the board's approval?
  That is an important question, because in the last nine or 10 months in which I have been involved in the subject I have been impressed by the calibre of person on the BNOC board. Members of the board are not there for the
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  fun of it. They are not there for the money. They are putting at the Government's service their knowledge of oil. It was right when the BNOC was set up that such people should be put on the board. However, are they allowed to express their views? Will they be able to give their views while the Bill is going through the House? If they could, it would be advantageous. I do not set myself up as an expert on the oil industry. I presume that the Secretary of State is in the same position. He has a Back-Bench Member to assist him. It would be advantageous if those on the board could help us to make a collective decision—as much as we disagree with the fundamental policy—on what should be done. Many members of the board have considerable knowledge.
  I come now to the British Gas Corporation and the Government's proposals about its monopsony. I propose to work from a statement issued by the British Gas Corporation, about which the Secretary of State knows. It is a long, detailed statement raising some pertinent points about the British Gas Corporation's side of the matter. Many officers of the corporation have been involved in the gas industry for a long time. They have raised some questions which I will advance.
  The statement says, first, that the corporation believes that the integrated structure of the industry provides a first-class all-round gas service to consumers and has helped maximise the benefit to the nation of the North Sea gas discoveries.
  Mr. Skeet: And oil discoveries.
  Mr. Rees: Yes. If the hon. Gentleman wishes to raise the question of oil, he can do so. Some workers from Wytch Farm visited me last week to inquire about their prospects. However, time does not allow us to deal with all matters.
  The statement says that the corporation sees no business or economic reason for breaking that integrated structure. That was not just the chairman speaking; it was the board and all the members not committed to any one political party. However, some of them are committed to the Conservative Party.
  As to buying rights, the corporation believes that its existing rights for natural gas, which have their foundation in the Petroleum (Production) Act 1934, have been fundamental to the rapid but carefully managed development of the North Sea gas finds since the 1960s. Gas sales to domestic users have quadrupled, and to industrial consumers have increased almost sevenfold. However, the wasteful use of large volumes of gas in crude-heat applications—which is now being abandoned in Europe and which has led to a scarcity of natural gas in the United States—has been avoided in Britain. That is a result of the policy of the British Gas Corporation.
  Mr. Skeet rose—
  Mr. Rees: The hon. Member for Bedford may disapprove of that. I do not wish to give way to the hon. Gentleman, who believes that he only has to stand up in a debate about gas and everyone will give way.
  The statement goes on to say that, at the same time, gas in Britain has been consistently cheaper than other fuels. That remains the case today. The statement then deals with marketing policy. It says that the marketing policy of concentrating on the premium or high value markets has been endorsed by successive Governments and is wholly

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  consistent with a conservationist approach to energy utilisation and the corresponding long-term depreciation of the nation's offshore resources.
  I understand that British Gas has had no information from the Government that that policy should be abandoned. If it is not the Government's intention to abandon that policy, how can it be implemented under the new legislation? Must we follow the American and European policies, which have been changed in recent months? Because of energy price increases, those countries' gas policies have proved to be wrong.
  The statement then refers to the Secretary of State, who said that gas was the only fuel of which there was a shortage in Britain and implied that the shortage stemmed from the corporation's buying rights slowing down exploration. There was a shortage of gas, not because of lack of availability in the North Sea, but because of the flight from oil by British fuel users after the Iranian revolution and the oil shortages and price rises that followed. Large numbers of oil users wished to switch to gas, and that could not be done overnight.
  In the industrial market the corporation became committed in a number of weeks to supply gas that it was planning to sell over a number of years. The avalanche of demand could not have been anticipated. It was a fundamental increase in the demand curve and not a movement along it.
  Mr. Arthur Palmer: Will my hon. Friend explain that the legislation that has brought in the integrated structure was Conservative legislation in the 1970s?
  Mr. Rees: That is correct, and it stemmed from a report of the Public Accounts Committee.
  The Secretary of State is changing the structure. How are the principles to be carried out in the new structure? Only a proportion of the avalanche can be met without seriously endangering the industry's obligation to meet peak demand from existing customers. The statement goes on to deal with the additional problem of the availability of Brent gas. In terms of a success story, despite the flight from oil, the corporation has not only satisfied virtually all the outstanding demands from those industrial customers to whom a gas supply is essential for their processes, but has supplied an additional half a million domestic customers during that time. The British Gas Corporation has done well.
  The statement goes on to say that the overwhelming proportion of unsatisfied demand from industry is from those who could just as readily have used oil or perhaps coal. There are implications for the coal industry in the change of policy about the monopsony powers of the gas industry.
  Mr. Peter Viggers: Can the right hon. Gentleman strengthen his argument by quoting any examples of monopolies that have recommended their own abolition? If he cannot, are we not entitled to remember the words of Miss Mandy Rice-Davies, who, when she was told of something that had been said by a gentleman, said "He would, wouldn't he?"
  Mr. Rees: I doubt whether she would have known the difference between monopsony and monopoly.
  The injection of free market forces will increase the price of gas, endanger the policy of conservation and the use of gas at its premium or high market value.
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  I wish to raise the matter of the corporation's buying powers and the first refusal position. Producers must offer gas for fuel use to the corporation first at a reasonable price. The Secretary of State will be the arbiter of a reasonable price. A Secretary of State has never had to intervene in that matter. The corporation has not played it badly in that respect. Since the negotiations began in the mid-1960s, Secretaries of State from both parties could have been involved. My point is that they have not been. If something had gone wrong, they would have had the right to intervene.
  The corporation makes it clear that the prices that it pays are not only reasonable but earn high returns on the original investment. The corporation's pricing policies have been to the benefit of British gas users, both industrial and domestic. The corporation has repaid all its borrowing and has not been a burden on the public sector borrowing requirement. It is 100 per cent. self-financing. The Government imposed a gas levy on the corporation, but when gas prices went up because of the levy the first person to complain was the Prime Minister, whose Government imposed a levy of £1,250 million.
  The Government's proposals will give producers a licence to auction gas. It will go to the highest bidder. The only result of the ending of monopsony powers will be to force up prices. Auctioning will lead to a more rapid depletion of stocks. The bulk fuel users will buy and burn more gas. The corporation says that the bulk users do not properly consider the way that they burn their gas but that the small users do.
  Are the contracts of the BNOC part-time executive directors of the board to be renewed? The newspapers claim that Sir Denis Rooke has been reprimanded—if not court martialled—under sections 4 to 44 of the Army Act for conduct prejudicial to good order and discipline. Recent statements from the Department of Energy have new vigour and verve. The involvement of the Secretary of State is clear from the use of the words "huffing and puffing". Is Sir Denis to be sacked? The press claim that that is on the cards. He was appointed only a few months ago, but he dared to stand up and express the unanimous view of the board.
  What will be the role of the directors under the new legislation? I know that I am questioning the Secretary of State in a challenging, House of Commons style. One hon. Member asked about the role of the BP governors. Will it be different from the role of the governors of the new trading bodies? I agree that the Secretary of State must take decisions. However, if he or any other Secretary of State takes people out of industry to serve on boards, he must give them the right to speak out and add to the knowledge of the body politic. Their views are vital to a proper consideration of oil and gas legislation.
  The Government's proposals will affect the coal industry. I am not sure that I clearly understand the shorthand of the Queen's Speech, which says:
  "Measures will be introduced to amend the financial arrangements of the National Coal Board."
  The NCB's external financing limit set by the Secretary of State's predecessor turned out to be wrong, because it was not sufficient. In February the Government had to produce a different figure. At that time questions were asked on the Floor of the House about imports. We were told that the EFL was nothing to do with imports. However, something positive was said about investment in the Plan for Coal. Figures about pit closures were

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  bandied about. There was talk of the EFL not being sufficient in the face of the position being taken by the NCB. There was great consternation, and the Government changed their mind and back-tracked. They produced a new package in June.
  What is the position now? In last week's debate on the Queen's Speech the Prime Minister revealed her colours when she spoke about the coal industry. She said that the NCB had a deficit of £1·1 million—
  Mr. Skeet: Get the figure right—it was £1·1 billion.
  Mr. Rees: It was £1·1 billion. But the Prime Minister was wrong. I am glad that the hon. Member for Bedford thinks that the Prime Minister should get her figures right. —[Interruption.] The Prime Minister got it wrong. The EFL was raised to £1·1 billion—an increase of £231 million. Grants and subsidies rose from £300 million to £550 million. That is the figure to be quoted if one wishes to use the word "deficit".
  The Conservative Party has an instinctive desire to knock the nationalised industries whenever possible, because it thinks they are a drag on the nation. If that is true, why not nationalise the NCB? Perhaps that is the meaning behind the words
  "Measures will be introduced to amend the financial arrangements of the National Coal Board."
  Do the Government intend to stick by the Plan for Coal? It is important to know the answer to that question. Will the Secretary of State continue the tripartite agreements? Will he stick to the procedures for closing pits and restructuring imports? Will the Government stick to the principles that have been agreed by both sides of the House?
  Mr. Tim Eggar: The right hon. Gentleman is always careful to ask the Government if they will stick to the Plan for Coal. Is it not reasonable for Conservative Members to ask the right hon. Gentleman whether he will ensure that the National Union of Mineworkers also sticks by the Plan for Coal—especially the provision that calls for the closing of obsolescent and old pits?
  Mr. Rees: I am the son of a mine worker. I learnt as a child that no one can answer for the NUM. The hon. Gentleman should not ask me to do so. I do not control the NUM or the Yorkshire area.
  Mr. Peter Hardy: During the past six or nine months a number of collieries have been closed, including one in my constituency, which was the subject of great concern. The miners have stuck to the Plan for Coal. We expect the Government to stick to their bargain and rapidly ensure that the Belvoir coalfield goes ahead.
  Mr. Rees: I shall come to the question of the plans for the Belvoir coalfield in a moment. A large number of collieries have been shut down since the plethora that were shut down in the 1960s. The NUM objects to the closures, but they are carried out through the proper procedures and with the proper use of geologists and mining engineers. —[Interruption.] Of course pits will close down. However, under the Plan for Coal new collieries should open. The two go together. I want to hear what the Secretary of State has to say about that.
  All countries are switching to the use of coal. I am worried that the new scheme for oil will affect the Plan for
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  Coal. It pays to use coal. The building of a new colliery and new facilities can take as long as 10 or 12 years. It is not Marks and Spencer or United Biscuits, where the supply curve can be altered rapidly. The Government's objective should be made clear. There is an assured future for coal, which one day will be used for liquefaction. We shall wait and see the role of the Department of Energy.
  The NCB is a successful organisation that deals in a different area from the BNOC, because of its older collieries. The NCB is different from the transport industries. Too often the coal industry is knocked and not given credit for the incredible technical developments that have taken place in recent years.
  There is the question of free market forces. I hope that the EFL, which will be struck, will not force the NCB to shut down its collieries on the North-East Coast of Scotland and Wales. Although there are problems in those areas, there are large supplies of coal there and new collieries ought to go to those areas as well.
  The Secretary of State for Energy knows that the Opposition will fight this Bill. Our energy resources must be owned by the community. In the extraction of oil the private sector must play a vital part, as in Norway. Under the BNOC there is room for both, but the control should be under the Government and the BNOC.
  I firmly oppose the policy. Future Labour Governments will reverse the present Government's policy, and certainly a future BNOC will be 100 per cent. publicly owned. As the Shadow Cabinet recently said, we wish to make public and plain to any outside interests contemplating the purchase of these shares our firm resolve to restore the assets to public ownership on terms that will ensure that no private speculative gains are made at the nation's expense. We will fight the Government on that at each stage because we believe that they are wrong.
  4.43 pm
  The Secretary of State for Energy (Mr. Nigel Lawson): The right hon. Member for Leeds, South (Mr. Rees) said that he thought that it might be inappropriate to make a Second Reading speech on the forthcoming legislation envisaged in the Queen's Speech. Instead, he made a Committee stage speech. I hope that he will forgive me if I do not answer the many questions he asked. However, they will all be answered in the course of the debate. I shall attempt to answer his main points.
  It might be appropriate for me to begin where the right hon. Gentleman left off, and to deal with the coal industry. The right hon. Gentleman's fears about the Government's plans for the coal industry are wholly unfounded. I have no doubt that the British coal industry has a golden future within its grasp. However, that future can be assured only if the coal board is successful in moving towards a sound and viable financial footing. That is, first and foremost, a challenge for the board and for all who work in the industry. I accept that the Government have an important role to play, and they are playing it. My predecessor firmly committed the Government in this context and—this answers the right hon. Gentleman's main point. I stand foursquare behind my right hon. Friend's commitment. These are not mere words; they are backed by hard cash. The Government have given the coal board an external financing limit this year of over ·1 billion—£1,117 million, to be precise—the highest EFL for any nationalised industry and more than the EFL for British Steel and British Telecom combined. The Government

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  have also approved a massive capital investment programme for the modernisation of the coal industry which this year alone will total over £800 million.
  No less than half of the vast external financing limit of over £1 billion takes the form not of loans but of outright grants at the taxpayers' expense, equivalent to a contribution of £27 from every household. That level of financial support represents, by anyone's standards, a substantial commitment by the Government and the taxpayer. It is so great that support on this scale cannot be accommodated within the existing statutory limits.
  Mr. Alex EadieWhat the Secretary of State for Energy has said is very interesting. He has said that the Government and the Department of which he is the Secretary of State are giving a financial commitment to coal. The Opposition welcome that. Is he saying that borrowing and the payment of interest on it constitute a subsidy to the National Coal Board? He must clear that up. The Opposition are extremely angry that the Prime Minister stated that the mining industry received £1,100 million in subsidy. That is untrue. The board borrows and it has to pay interest on its borrowings.
  Mr. Lawson: That point was made by the right hon. Member for Leeds, South in a slightly calmer way. However, it is true, as I said, that the grants and subsidies amount to a little over £550 million during the current year. I do not want to go too far down this route, but it must also be said that if the Government had not stood behind the coal board it would not have been able to borrow on the terms that it has.
  Mr. Eadie: Is that a subsidy?
  Mr. Lawson: The Government have announced in the Gracious Speech their intention to introduce legislation to increase the present statutory limit on the coal board's borrowing and to allow continuing grant support for its operations and revenues. That legislation will be introduced in the near future, and debates on the Bill will provide the best opportunity to debate the detail that the hon. Gentleman wishes to debate.
  I have spoken of the challenge that the board must meet if it is to realise, as I am sure that the whole House wishes it to, the opportunities that the future holds. That is a formidable challenge, and I believe that this is recognised by both sides of the industry with which I have had discussions in recent weeks.
  The coal industry has certainly been hard hit by the recession, with sales last year well down on the year before. However, that was by no means the only factor which contributed to the industry's problems and to the rise in its costs which was well above the general level of inflation. I am glad to say that in recent months the industry has shown a new determination to tackle these problems. After several years of very disappointing productivity, overall productivity so far this year has been running 4 per cent. above its level in the same period last year. Both sides of the industry must continue to pull together to improve efficiency and further improve productivity and reduce losses. The Government for their part have clearly demonstrated their commitment to help the board to achieve its goals of financial viability and genuine competitiveness.
  I turn to the question of oil and gas. The right hon. Member for Leeds, South has complained on a number of
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  occasions—it was implicit in his remarks today—that hon. Members have had difficulty in discovering what the Government are up to. That has not prevented him and his right hon. and hon. Friends from jumping up and down ever since I made my announcement on 19 October. For the life of me, I cannot see what all the fuss is about. As far back as last February, my predecessor, the present Secretary of State for Transport, introduced and published a Bill providing for the privatisation of the British National Oil Corporation and setting out the route that the Government proposed to take.
  The Government subsequently made it clear—indeed, it was my right hon. Friend the Leader of the House who made it clear—that their intention was to reintroduce the proposals this Session, and to carry them through to the statute book. So the Opposition have had plenty of time to discover what we are up to—not that that has prevented them from launching an extraordinary campaign of misrepresentation and emotional poppycock.
  Before I explain the Government's specific proposals and deal with the Opposition's somewhat hysterical campaign against them, it is important to be clear about the context. The Conservative Party has never believed that the business of government is the government of business. That philosophy has been amply vindicated in the hard school of practical experience.
  We have now had over 30 years' experience of Morrisonian nationalised industries. Together they account for over a tenth of national output and over a sixth of total fixed investment. For some industries they are the only domestic customers; for some consumers they are the only suppliers. By any standard, these industries occupy a commanding position in the economy. Yet no Government of either party have found a satisfactory basis for running them. That is not for want of trying. The stream of White Papers, studies and reports of various sorts has been unending. Yet the problems have remained as acute as ever. Indeed, they have become more acute.
  Five years ago the previous Labour Government, of whom the right hon. Member for Leeds, South was a distinguished ornament, asked the National Economic Development Office to undertake a special inquiry. The conclusion of the inquiry was unequivocal. It stated:
  "Our inquiry has left us in no doubt that the existing framework of relationships developed under governments of both main political parties is unsatisfactory and in need of radical change".
  Particularly where—as so often—these industries are to a greater or lesser extent monopolies, we have created industrial fiefdoms accountable to no one: neither to market forces, nor to shareholders, nor to Parliament.
  In theory they are accountable to Government. Yet even this, as the NEDO report found, is thoroughly blurred and marked by the most profound confusion about respective roles. As a result, no one is satisfied: neither those who manage the industries, who chafe at Government interference and constraints; nor Governments, who cannot even ensure that the industries operate efficiently; nor the consumer and taxpayer, who are left to foot the bill at the end of the day. To pretend otherwise really is the triumph of dogma over practical experience. My God, we have had plenty of that experience.

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  The conclusion is inescapable. No industry should remain under State ownership unless there is a positive and overwhelming case for it so doing. Inertia is not enough. As a nation, we simply cannot afford it.
  One industry where no serious case whatever has been made out for State ownership is North Sea oil production. Indeed, how could it be when ever since the birth of this relatively new and highly successful industry and throughout the period of the previous Labour Government—including the period when the right hon. Member for Bristol, South-East (Mr. Benn) was Secretary of State for Energy—the overwhelming bulk of North Sea oil has been produced by private sector companies.
  The oil-producing business of BNOC—which, as I shall explain later, is not the whole of BNOC by a long chalk—accounts for 7 per cent. of total North Sea oil production. The offshore oil interests of the British Gas Corporation account for a further 1 per cent. By no stretch of the most fertile or fevered imagination can it be argued that there is anything special about this particular 8 per cent. of North Sea oil output.
  Perhaps it will help the House if I put the figures in perspective. In 1977, when the right hon. Member for Bristol, South-East was Secretary of State for Energy, the then Labour Government sold a substantial block of shares in BP representing—among many other assets—9 per cent. of total North Sea oil output at the time. Of course, the right hon. Gentleman has changed his tune since he was Secretary of State for Energy. He is now concerned not with the 8 per cent. of North Sea oil output at present owned by the State but with the other 92 per cent.
  What the right hon. Member for Bristol, South-East is calling for is simple. It is a coherent policy, although I disagree with it. He is saying "Nationalise the lot". But is that really the policy of the official Opposition? The right hon. Member for Leeds, South indicates that it is not but we are given to understand that the Opposition spokesman who is to reply at a later stage holds a diametrically opposite view. In the light of that, what is the Opposition's policy? What is the policy of the right hon. Member for Leeds, South? The House is entitled to know.
  Do Labour Members really believe that the future development of our offshore resources is best tackled by a single State corporation? Will the right hon. Gentleman confirm on behalf of the Opposition—if he wishes to do so, I shall gladly give way to him—that the successful development of these resources depends on the expertise and initiative of the private sector, which no Government in their senses would jeopardise by wholesale confiscation and nationalisation?
  Mr. Merlyn Rees: I have already said that we shall return to the position which now obtains, which was built up by my right hon. and hon. Friends. That is the Opposition's policy. I accept the right hon. Gentleman's contention that we must always be examining the public sector to ascertain whether changes should be made. It may be that the Labour Party when in Government will not return precisely to the position as it was originally established. For my part, I see no reason why BNOC should not move into the downstream sector, but that is my view. I am speaking on behalf of the Opposition when I say that what the Government are doing is wrong.
  Mr. Lawson: The right hon. Gentleman may speak on behalf of the Opposition, but I understand that the Opposition spokesman who is to reply holds a totally different policy. The House was in the dark before the right hon. Gentleman intervened and it remains so.
  The right hon. Member for Leeds, South referred to asset stripping. That charge contains not one grain of truth. Let me make it clear once again that we are not planning to break up BNOC's oil-producing business and sell off the assets one by one to foreign multinationals. The business will, quite simply, be floated intact on the Stock Exchange as an independent British oil company in which the people of Britain—including in particular BNOC's own employees—will be for the first time able to acquire a genuine stake.
  Mr. Douglas Jay: Will there be any safeguard in the right hon. Gentleman's proposals to prevent the shares falling into the hands of non-British owners?
  Mr. Lawson: I shall come to that.
  Mr. Dick DouglasThe right hon. Gentleman does not know the answer.
  Mr. Lawson: The answer is "Yes". I shall come to that issue later. I wish to make my speech in my own way. I have spoken about BNOC's oil producing business. The same argument applies to the offshore oil interests of the British Gas Corporation. There is no reason why they should be State owned, still less through the agency of a public gas utility. Indeed, the manifest anomaly is such that even the previous Labour Government in their Petroleum and Submarine Pipe-lines Act 1975 included powers to require the gas corporation to divest itself of these assets, although characteristically exclusively to BNOC. Even the Labour Government recognised that there was something odd about oil assets being held by a gas utility.
  Understandably a great deal of concern has been expressed—the right hon. Member for Battersea, North (Mr. Jay)expressed this concern in his intervention—about a possible loss of British control over North Sea oil. In part, this reflects the simple and seemingly perennial Socialist confusion between the nation and the State. The MCC, for example, is not owned by the State, but it is nothing if not British.
  I realise, of course, the genuine concern that control of the oil-producing business of BNOC, once privatised, might pass out of British hands altogether, although a substantial Government minority holding with the remainder of the shares very widely spread which is our intention would make that unlikely. But, beyond that, we shall ensure that written into the articles of association of the new company—this is what the right hon. Member for Leeds, South rightly suspected—will be effective safeguards against any undesirable change of control.
  But what really matters to the preservation of the national interest in North Sea oil, which we all have at heart, is not the ownership of a company responsible for 7 per cent. of total North Sea oil output. What matters is the control we have over the industry as a whole. That control, which is far reaching and crucial, is wholly unaffected by the privatisation of the oil-producing business of BNOC.
  Mr. Jay rose—
  Mr. Lawson: I have given way once to the right hon. Gentleman. He has had an innings.
  I mentioned earlier that there was another side of BNOC which will remain 100 per cent. State owned after the offshore business has been floated off.
  Mr. Merlyn Rees: Will we see the articles of association before the Bill is published, because they are germane to our discussions?
  Mr. Lawson: I cannot give an absolute undertaking that they will be available before the Bill is published. I do not know the date when the Bill will be published. However, the House will have a full opportunity to see and discuss them.
  Mr. Douglas rose—
  Mr. Lawson: I must move on as many hon. Members wish to speak.
  The other part of the BNOC to which I was referring is the oil trading business, the heart of which is its unassailable right, via the system of participation agreements, to up to 51 per cent.—not 7 per cent.—of all United Kingdom North Sea oil whoever has produced it and brought it ashore. That is what matters. Again that is not the only way in which the national interest is protected.
  There is the lax regime which at the margin may claim for the public coffers as against private profit—to use the words of the right hon. Member for Leeds, South—up to 90 per cent. or more of the oil revenues from individual fields. Incidentally, that is significantly more than when Labour were in office.
  On top of the participation agreements and the tax regime there is a host of regulatory controls of one kind or another. These, too, are wholly untouched by privatisation of BNOC or BGC's oil assets. I shall not weary the House with a full catalogue, but if we are to have a sensible debate—which I know is the right hon. Gentleman's intention, even if it is not the intention of some other hon. Members—the myth of an abdication of national control must be nailed once and for all.
  Mr. Edward Rowlands: I am trying to follow the Secretary of State on the issue of participation agreements. In the fifth and sixth rounds, the 51 per cent. participation agreements were in the form of equity—that is, BNOC owns 51 per cent. of the equity of the licences. How will the Secretary of State handle that in defending the participation arrangements?
  Mr. Lawson: BNOC's offshore equity interests will be treated in the same way as the oil producing interests of any other oil company. It will be an independent British oil company treated on all fours with all the rest of the North Sea oil producers. The Government have regulatory powers and I am responsible for exercising them. They are substantial powers.
  Dr. J. Dickson Mabon: I am following up the point made by my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands). [Hon. Members: "Is the hon. Gentleman the right hon. Gentleman's hon. Friend?"] I have friends on both sides of the House. Those agreements, of which there were about 16, were negotiated by three parties. They are complex. I understood from the Minister's initial remarks that most of them would not need to be renegotiatiable.
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  However, the ones mentioned by my hon. Friend, if they are to be split into a new part of BNOC, will require to be renegotiable. Is there not a great danger in that?
  Mr. Lawson: The participation agreements are with BNOC. They will remain with BNOC. They will not be a part of the new offshore oil company which is to be privatised.
  Mr. Rowlands rose—
  Mr. Lawson: I cannot go on. There will be ample opportunities for hon. Members to speak, and I have made the position clear. I have great affection for the right hon. Gentleman, but he must calm down. I was about to remind the House—
  Mr. Rowlands: Will the Secretary of State give way?
  Mr. Lawson: No, I will not give way. I have made the position clear.
  I was about to inform the House—so that the right hon. Gentleman can form a proper judgment on whether our national assets are in jeopardy—of some of the powers that I have as Secretary of State for Energy for the control of North Sea oil. I have powers to ensure that all developments are carried out in accordance with good oilfield practice, that recovery of oil and gas is maximised and that wasteful or inefficient development is avoided. I can set production limits for oil and gas in accordance with the national interest.
  No submarine pipelines may be laid in United Kingdom territorial waters or designated areas without my authorisation. No drilling of exploration or development wells can take place without my approval. No development work may be carried out and no petroleum may be produced except with my consent or in accordance with a development programme approved by me. All petroleum produced from offshore fields must be landed in the United Kingdom unless I permit otherwise.
  There can be no gas flaring without my consent. I address that point to the right hon. Member for Bristol. South-East, who said in a radio or television interview that privatisation of BNOC would result in all the gas being flared and wasted. That is absolute poppycock, and he should know that. He was Secretary of State for Energy, much to the nation's misfortune, for longer than anyone else. He should know that the gas flaring power under legislation resides with the Secretary of State for Energy and with the Department. It is interesting to know that since the Government came to office gas flaring has been roughly halved—that is, since the right hon. Gentleman was Secretary of State for Energy.
  Mr. Hardy: Will the Secretary of State accept that in the first three months of the Conservative Government gas flaring in the North Sea was running at the highest level ever and was equivalent to 21 per cent. of the nation's total inland gas consumption?
  Mr. Lawson: It took a little time to clear up the mess that was left by the Labour Government. What I have listed today are merely some of the routine, everyday powers vested in me as Secretary of State for Energy. In an emergency, still further powers are available to protect the national interest.

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  In short, the existing North Sea oil regime, a regime which is wholly independent of the ownership of the oil-producing business of BNOC, far from being inadequate, is, if anything, more than adequate to protect our vital national and strategic interest.
  As one distinguished former oil man put it, when asked by the BBC's "The World Tonight" programme whether my announcement on 19 October marked a black day for Britain,
  "No, in no sense. I would say that with the tax regime as it is, with the political control as it is, with the participation agreements remaining in being, I think it'll go a long way to get the whole North Sea development given a new lease of life"—
  [Interruption.] The hon. Member for Merthyr Tydfil (Mr. Rowlands) scoffs, but the speaker was Lord Kearton, the first chairman of BNOC appointed by the right hon. Member for Bristol, South-East when he was Secretary of State for Energy. He was repeatedly praised by the right hon. Gentleman as being the ideal man for the job.
  In the same interview Lord Kearton was also asked whether he felt that the Government plan to break the BGC's statutory monopoly of the supply of gas to industry and other large consumers was
  "a severely damaging blow at nationalised industry."
  Opposition Members wish to protect nationalised industry. I shall save them from many further quotations by Lord Kearton, as I do not want to embarrass them too much, but it is worth giving this one. He replied:
  "No, I think that the nationalised control of gas was essential in the early days, and I think it's been brilliantly successful and I think the Gas Corporation has been brilliantly led, not only by Sir Denis Rooke but by his predecessors, but I do think the time has now arrived where the control of complete monopoly buying, monopoly distribution and monopoly pricing, is, in fact bad both for the industry, both for the country and for the development of the North Sea. So I think to break up the Gas Corporation monopoly is extremely sensible".
  The proposals have been welcomed by the Chemical Industry Association and throughout British industry. I am not surprised that the idea of competition in place of monopoly is anathema to the Labour Party. It always has been. However, it will be interesting to see on both that issue and on the equally clear issue of private enterprise versus State ownership how the SDP and their Liberal bedfellows vote in the Lobby tonight.
  The right hon. Member for Leeds, South mentioned that the chairman of the BGC had proposed his rival plan. He suggests that the whole corporation, with its oil assets and its statutory monopoly intact, might be privatised. As hon. Members know, I am always grateful for helpful suggestions. But this one really will not do. A privately-owned national statutory monopoly would be nothing less than a licence to print money—a licence of the most grotesque and irresponsible kind.
  It is true, of course, that in some countries—the United States in particular—privately-owned gas utilities exist. For them to be workable, however, two conditions must be satisfied. First, there must be not one national utility, but a number of regional utilities—a fragmentation going far further than anything that I have so far proposed. Secondly, there must be a massive regulatory apparatus of a kind of which we have no experience in this country and which would take years to set up. Indeed, the regulatory framework which we shall be setting up to enable BGC's pipeline system to be used as a common carrier under the proposals that I have already announced is, I believe, enough to be going on with in this direction.
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  The truth is that Labour Members have a wholly irrational attachment to the public sector and to nationalised industries which ignores experience and defies analysis. They bandy words like "patriotic" and "birthright", but it is not patriotic to expand a sector of the economy which still suffers from so many intractable difficulties despite so many attempts over so many years to solve them. The birthright of this country does not lie in monopoly, inefficiency and State control. Nor, I remind the Opposition, are nationalised industries the nation.
  Our proposals are in the interests of the consumer, the taxpayer and industry, and we are determined to press ahead with them this Session. I ask the House to reject the Opposition amendment.
  5.11 pm
  Mr. William Pitt: I am grateful to you, Mr. Speaker, for allowing me to catch your eye and to make my maiden speech at this important time in the life of this Parliament and in the political life of our Kingdom.
  First, I pay tribute to my predecessor, Robert Taylor, whose untimely death led to the by-election which brought me here. He was, by all assessments, a good constituency man who worked diligently in the service of the people of Croydon, North-West and was widely respected throughout the constituency for so doing. Although our political views might best be described as "poles apart", our personal relations were cordial. Bob Taylor was a friendly man, liked and respected by his constituents and by his political opponents as an honourable man whose views came not from prejudice but from conviction. He served our constituency well as a Member of Parliament for 11 years and he left a legacy of contact with the people of Croydon, North-West of which I am the inheritor. He will be greatly missed by colleagues and opponents alike.
  I gather that it is the form on these occasions to say something about one's constituency. First, I hope that if other hon. Members come to Croydon, North-West they will not trip over too many cracked paving stones. I cannot claim birth in my constituency—that doubtful honour falls to Brixton—but I can claim lifelong residence and knowledge of those among whom I live and whom I represent.
  Croydon, North-West, like most South London constituencies, is largely a commuter constituency which carries its fair share of the burdens placed by our ailing suburban railway system upon those whose work requires them to travel to London daily. Twice a day, they are obliged to travel in rickety trains more suited to cattle than to human beings. They are tired when they reach their offices in the morning, and tireder still when they return home. Their plight is neither unique nor of recent origin. For far too long, British Rail has been underinvested and its vital commuter services in London strained to breaking point. Commuters in Croydon, North-West look forward to a commitment by the Government to reinvest in the railways and to relief from their daily torment.
  In addition, through the spine of the constituency runs the A23. We therefore suffer daily from the dangers and the anti-social habits of juggernaut lorries carrying oranges from Spain to Nine Elms, where once stood one of the largest engine sheds of the Southern Railway. One wishes that that link had remained. Our children would be safer and our homes less prey to damage from vibrating diesel engines.

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  In my constituency, we have an increasing number of old-age pensioners whose incomes can little withstand the pressures of the present economic plight, and for whom such phrases as "the quality of life" have a hollow ring and little meaning. Pensioners in Croydon, North—West would have welcomed a commitment in the Gracious Speech to reverse their plight. As a nation, we are growing older, but we are providing fewer and fewer resources for our future old-age pensioners.
  I apologise to the House for telling a tale of gloom, but sadly, for many Croydonians—and those in my constituency take their share—life is a gloomy prospect. The number of unemployed in this previously prosperous suburb rose steadily during the 1970s, but since 1979 it has shot up by more than 150 per cent., which is greater than the national average. That figure includes far too many young people whose work and training now represent the future of our country.
  Moreover, the plight of our young people is not confined to the dole queue. To comply with Government policy on local government expenditure, Croydon council intends to close seven secondary schools in the north of the borough, three of them in my constituency, thus reducing choice in a vital part of children's education and forcing parents to bus their kids to other parts of the borough on an already overworked and unreliable system.
  Members of the Asian and Afro-Caribbean communities in Croydon, North-West, where they form some 11 per cent. of the population, will be pleased and grateful for the Government's pledge in the Gracious Speech that all will have equal rights regardless of colour, race or creed. We live in a multiracial society and I heartily endorse all efforts towards its maintenance. I am a little saddened, however, that the Gracious Speech contains no specific proposals to reinforce that commitment. There is no reference to the measures required to promote racial equality in the aftermath of the British Nationality Bill and the summer riots. One would have expected the Gracious Speech to reaffirm the Government's commitment at a time when reassurances are necessary.
  There is especially a need to counterbalance the harmful psychological effects of the British Nationality Bill. Lord Scarman is likely to recommend positive action and I hope that the Government will act promptly on that. Reforms are still required and positive action is needed to ensure equal opportunity for all citizens of our nation. Reform is needed, for instance, of section 11 of the Local Government Act 1972. We need a code of practice for public contractors. There is also the need to rebuild confidence in the police to deal with racialist attacks.
  On the subject of this debate, the people of Croydon, North-West will watch with interest the progress of the Government's proposal to privatise the British National Oil Corporation. I understand that the Government intend, by encouraging private investment in BNOC, to sell off one of our most important national assets, the revenue from which could be used for further investment in jobs. It cannot be by way of encouraging competition, as in the oil business there is none—the prices are fixed by OPEC. The BNOC is a national asset and, as such, should remain in the hands of the nation. As we understand the proposal, it is unlikely that Liberals will support the Government in this move. It appears that in reality the sale is being made to pay for unemployment benefit and to keep down the
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  public sector borrowing requirement, which is so high because there are now nearly 3 million people unemployed.
  Finally, I bring a heartfelt plea from the people of Croydon, North-West to end the class war and political bickering, to end artificial differences between management and labour and to create a climate in our country in which voices of sense and consensus are heard loudly above the clamour of dogma and doctrine.
  5.18 pm
  Mr. John Hannam: First, I congratulate the hon. Member for Croydon, North-West (Mr. Pitt) on a most effective maiden speech. During his election campaign, he experienced a rather fuller blaze of publicity than most of us encounter at general elections. At least, however, coming to the House after a by-election, the hon. Gentleman has avoided the very long delay before making his maiden speech which many others, including myself, experienced when we were elected at general elections.
  The hon. Gentleman follows a much liked Member of Parliament whom we all miss and to whom he paid due tribute, for which we are grateful. Having listened to the hon. Gentleman's first speech in the House, I am sure that he will enjoy his time here and will make many worthwhile contributions to our debates.
  Today's debate, although in the context of energy matters, is also part of the general debate on the forthcoming programme of legislation. Therefore, although I wish to devote most of my speech to my right hon. Friend's very welcome proposals for de-monopolising British Gas and introducing real public investment into BNOC, I wish initially to comment on the general economic situation and also to describe how the Government could assist the disabled in a particular way.
  As someone who has spent most of his life as a small business man, running a service industry and creating more than 100 jobs from scratch, I have long campaigned for a new approach to employment. Throughout the 1960s, we talked of a switch from manufacturing to service industries but did very little about it. Our education system dropped further behind our European rivals in providing vocational training, skills and apprenticeship schemes that did not follow outdated lines at a time in the 1970s when there were ominous signs of the effect of the second industrial revolution on unemployment, which doubled and doubled again under both political parties.
  Little has happened in our employment strategies to counteract that dramatic change in the nature of employment. To give him credit, the hon. Member for Truro (Mr. Penhaligon) was alone among members of the "soft option" party to speak out against the belief that there was an easy answer to our present unemployment problems. At the Liberal Party conference, the hon. Gentleman outlined the problems that we all face in trying to overcome these difficulties.
  But at a time in the last decade when we needed a coordinated approach to the new economic and industrial future, we had the same old resistance to change from the Labour Party and its allies, the trade unions. Restrictive practices, militant shop floor wage demands, employment protection measures taken to the absolute limit and opposition to the breaking of cumbersome State monopolies have all combined to land us in a position where even without a world recession strong measures

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  were needed to make Britain's trading and manufacturing position comparable with our competitors in the wide world outside.
  Of course, the recession has made the task of industrial reconstruction even more difficult. I well understand the worries of those who feel that because of the recession we should perhaps shelve any attempts to restructure our economy and that we should increase still further our overspending and subsequent borrowing. I have thought deeply about that and have come to the conclusion that we must follow the strategy adopted by the OECD, the IMF, the EEC and all the main international economic organisations. In other words, if the recession is to be overcome, inflation must be defeated by reductions in national spending budgets and by a lowering of wage demands and financial expectations. That strategy must be followed if we are not to see the whole world economy collapse.
  Governments are now experiencing deep unpopularity as they struggle to achieve success against inflation and recession. It is interesting to note that in recent times no Government have survived a general election. Be they of the Right or Left, Governments in the United States, France, Greece and Norway have fallen in the wake of electoral unpopularity. If an election were now to be held in West Germany, Britain or any other country at this stage of the recession, I believe that the people would vote not for any alternative—I have yet to hear of one—but against the pain and unpleasantness of the illness and the medicine prescribed for it.
  Having said that, it does not follow that Governments should forsake their responsibilities in the long-term national interest for short-term electoral gain. I therefore support the brave and determined fight being pursued by the Government. I believe that Britain will emerge from the recession in a better position on the world trade ladder than before.
  France and Germany are experiencing all the difficulties that we have undergone, and only their higher productivity and lower levels of State spending have enabled them to achieve lower levels of unemployment. While we can all take issue with individual tactics pursued by various Government Departments in the overall approach to the battle against inflation, I cannot see a great deal of scope for substantial changes of course.
  I now turn to more specific matters, one of which is an item of Treasury policy with which I beg to differ and which I believe needs adjustment. I am, of course, referring to VAT charges on charities. I wear my disablement hat to show that I take this matter seriously. In fact, during the Conservative Party conference in Blackpool I spoke at a fringe meeting on this subject. It was not one of those notorious fringe meetings that monopolised the media. It was organised by the Spastics Society and took place at the same time as that famous fringe meeting addressed by my right hon. Friend the Member for Sidcup (Mr. Heath).
  Despite the fact that delegates had to walk three quarters of a mile along the seafront to find the hotel, and regardless of the fact that it took place at the same time as other widely-publicised fringe meetings, the room was packed with nearly 100 people. That shows that Conservative Party delegates considered this an important subject.
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  I put my views on the record and hope that they will be taken into account in the next Budget. The philosophy of the Government and my party is to help voluntary social service agencies so that they can work with the State bodies in providing maximum care services for the handicapped and disabled in our community. Much is being done in this regard, but it is being nullified by the effect of unrecoverable VAT at 15 per cent. A tremendous financial burden is crippling those very charities that we are asking to take up the extra burden during the recession.
  I could go into great detail about the effects and anomalies of VAT on the fund-raising efforts of our voluntary organisations. If I merely say that during the last year our eight major disablement charities paid more than £1½ million in unrecoverable VAT—money that had been hard earned—and recouped only £ ½ million through the concessions announced in the last Budget, it is easy to understand why those vitally important organisations are facing grave financial difficulties. They have been caused not by the recession but by a counter-productive tax levy on services which, if provided by local authorities or health authorities, escape that 15 per cent. VAT levy.
  This should not be regarded as a "wet" call for increased expenditure. This is another of those areas where, if such a service is not provided by a voluntary organisation, the cost of provision by the State will be much greater. On behalf of the many hundreds of thousands who give up their time and the millions who give up their money, I register this call for some alleviation of this tax impost, which was surely never meant to be applied in this way.
  I turn to the proposals in the Gracious Speech for the raising of the NCB's borrowing limits and the changes in the financial structures of the British Gas Corporation and the British National Oil Corporation.
  I congratulate the Minister on his realistic approach to the question of coal, which is a vital energy industry. The raising of the cash limit in June and the increased borrowing limits, in my view and that of my hon. Friend the Member for New Forest (Mr. McNair-Wilson), were inevitable, bearing in mind the impact of the recession upon coal demand and prices. Having sat on all the Committees throughout the 1970s that considered coal legislation, I can verify the Conservative Party's commitment to a competitive and thriving coal industry. That was reiterated today by my right hon. Friend the Secretary of State.
  Capital investment has increased year by year and has now reached £800 million a year. New coalfields, and the continuing closure of old uneconomic pits, are resulting in substantial improvements in productivity. I for one wholeheartedly congratulate the industry and the miners on their achievements. But with 40 million tonnes of coal now lying on the surface, it must be obvious to the miners—even to Messrs. Scargill and McGahey—that if imports of cheaper coal are to be restrained and the large surpluses of coal stocks sold, wage demands in return must be in line with those in other industries.
  Mr. Lawrence Cunliffe: I concede that huge coal stocks now exist. Is not the primary and cardinal reason the fact that the gravest recession that we have experienced for the last century is now upon us simply because of the Government's suicidal economic policies?
  Mr. Hannam: Not at all. The NCB does not make that point. It refers to falling demand throughout the Western

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  world and to the fact that coal can be produced in other countries at much lower cost. The pressures have been building up for years, due to the overpricing of coal and huge wage demands. I am trying to make a sensible and constructive suggestion for overcoming this real problem. I should like to see the NCB offer those large stocks to the CEGB at reduced prices so that the electricity consumer could benefit. In addition, it would reduce the high cost—about £6 per tonne—of stockpiling that coal. We must look carefully at any proposal that will result in the reduction of these large stocks, as most other industries will be reflecting the pressures of the recession by reducing their prices in order to reduce their stockpiles and levels of stock.
  The bureaucratic nationalised industries are slow to respond to these pressures. I should like to see a response from the National Coal Board to what I believe is becoming a major problem.
  Mr. George Grant: Is the hon. Gentleman aware that an agreement already exists between the National Coal Board and the Central Electricity Generating Board that restricts increases in the price of coal? The agreement is that the price of coal will not exceed the rate of inflation, and it has worked well. However, while it is true that there are 42 million tonnes of coal stocked on the ground, the Government could do a lot more. What are they doing about the refurbishing of coal-fired power stations? They have announced the setting up of new coal-fired power stations, but if the statement of the EEC Ministers in Venice is true that coal will be important in the future that stock of 42 million tonnes should be a good insurance for the future, and it should be developed. We want decisions from the Government on new coal-fired power stations and on the refurbishing of the old stations.
  Mr. Hannam: The hon. Gentleman has made an interesting point. However, he must bear in mind the fact that 80 per cent. of our electricity is generated from the burning of coal. He cannot, therefore, expect an increase at this stage in the percentage of coalburn. We must adopt a system of reality in the industry to the pricing of coal and the disposal of surplus stocks. The hon. Gentleman, with his great experience of the industry, will no doubt wish to speak on the matter during the passage of the Coal Bill.
  We must consider this as a major problem. The Government are playing their part in helping to reduce imports and in retaining the level of investment in the industry. We should like to see some reciprocation by members of the coal industry.
  I come now to the two other controversial proposals in the Gracious Speech. I support the sale of BNOC's upstream business to the private sector, and it is right that the Government should retain a substantial minority interest. With the trading operation of BNOC's 51 per cent. oil participation in North Sea remaining under State control, the full control of this vital resource remains in the Government's hands. My right hon. Friend the Secretary of State outlined the various measures that lie at his disposal for maintaining full control over British oil.
  The right hon. Member for Bristol, South-East (Mr. Benn), who so often accuses the oil industry of crying wolf over tax changes, is himself guilty of that in his smear campaign against any relaxation of the State sector stranglehold on the energy industries. As usual, he bends
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  arguments to suit his own purposes. How can we be selling our North Sea birthright when BNOC holds only 17 per cent. of the currently licensed acreage? The North Sea has been developed to Britain's gain by the risk-taking private enterprise firms, not by bureaucratic State monopolies.
  The selling of 51 per cent. of BNOC's exploration and development activity has lifted uncertainty in that company, and will now allow it to be free of Treasury spending controls. The chairman has welcomed those steps.
  Mr. William Hamilton: He is a party hack.
  Mr. Hannam: Opposition Members quote one chairman in aid of their argument, and I am quoting another chairman in aid of ours. Of course, a previous Labour Minister, Lord Kearton, has been quoted as being in favour of our argument, which puts us two to one up.
  I come now to British Gas and to my right hon. Friend's proposals to take British Gas out of the offshore oil business and to open up the supply and purchase of gas to private sector companies. I fully support those proposals.
  The delay—or the shelving—of the gas showrooms sale is no surprise to me. I expressed reservations about its implementation when we debated the matter earlier in the summer. I would rather see British Gas turned stage by stage into a major private investment company with full powers to compete in the market, whether in retailing, servicing or any other branch.
  I shall welcome the day when my right hon. Friend announces a 51 per cent. disposal of shares to British Gas employees and to the public. However, I recognise that before that day arrives we must take all the necessary steps to break the monopoly that exists both in the buying and selling of gas. Of course, the present chairman of British Gas resists those changes. I should not expect him to do otherwise, being the "capitalist monopolist" that he is. He is in a very comfortable position. We can all be capitalist monopolists—as Sir Arnold Weinstock has been known to be in the past.
  The chairman of British Gas can dictate the price that he pays to the oil companies, and no one can doubt that he has paid below the market price during the past decade. Consequently, therefore, we have been constantly threatened by a shortage of supply of gas to British industry. Those shortages would not exist if all available gas resources were developed and a proper price offered. The chairman can also dictate the selling price of gas, and although it can be of short-term advantage to the domestic consumer, eventually it creates over-demand in that sector as real energy prices rise steadily around gas.
  The Chemical Industries Association issued a statement last week about the Government's proposals. In that statement, its director-general, Martin Trowbridge, said:
  "In recent months a number of chemical firms have requested and have been refused additional or new supplies of gas even in cases where greatly improved energy efficiency would have been achieved. Thus we have a thoroughly unsatisfactory situation where additional or new industrial gas supplies are not available to companies despite a 10 per cent. fall in industrial gas sales due to the recession. We are told that new supplies will not be available until 1984/85. There is no doubt that the best way forward is to permit wider freedom of access to gas supplies. It is misleading to argue that a monopoly to purchase supplies ensures the best price and availability to the final industrial gas user, even though the position may be comfortable for the operator of the monopoly. World evidence does not support such an opinion. We need the fresh breeze of competition to keep the

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  supply industry on its toes and to ensure that energy is available to industry at an internationally competitive price as the world market for our products recovers."
  Those are the people who are on the receiving end of gas supplies—the industrial users who have been going short because of the policies pursued by the industry. The days of low-priced, unprofitable energy are gone. There is no reason, therefore, why State control should continue to exist in these industries.
  The chairman of British Gas and Opposition Members usually resent the mention of profitability in private firms, but they now quote the profit levels of British Gas as a bull point in favour of retaining the existing State industry's structure, together with its monopsony powers.
  The figures in the 1980–81 annual report show a return on capital at "current cost retained" of 1·6 per cent. I recognise that it is nearly impossible to find accurate comparisons with other similar gas industries either here or elsewhere in the world. That is the problem with State monopolies. However, given the present level of energy prices, I believe that with competition and private equity introduced into the gas industry we would have higher output, lower costs, and a higher rate of return than the present 1·6 per cent. levels. I have looked at the figures from Germany and other European countries and there is evidence that a much higher return on capital can be achieved where there is some competition.
  I support the imaginative proposals contained in the Gracious Speech. I deplore the stereotype pro-nationalisation arguments from the Labour Party and even from some of the soft option parties. We live in a rapidly changing world where new ideas are needed. New approaches will never be achieved through the mechanism of large State-controlled bureaucracies. If we are to provide new jobs and new technologies for the school leavers of the future, we must grapple with these outdated legacies of post-war Britain. The Gracious Speech shows that the Government are determined to face up to those changes, and I give it my full support.
  5.39 pm
  Mr. Dick Douglas: My first responsibility is to congratulate the hon. Member for Croydon, North-West (Mr. Pitt) on his maiden speech. I knew his predecessor, Bob Taylor, as a fellow member of the Public Accounts Committee and the hon. Gentleman paid a gracious tribute to him. We welcome the hon. Gentleman's participation in our debates. He will find the House a rough but warm place and we appreciate the way he put the case of his constituents.
  I declare an interest in what the hon. Member for Exeter (Mr. Hannam) was saying about the Spastics Society. I welcome his comments because I have a young daughter at Beaumont College, Lancaster, who is a spastic. I know what the hon. Gentleman and others have been trying to do for spastics and other groups and I welcome his exhortation to the Government.
  I welcome the opportunity to take part in the debate, but I believe that the proposals in the Queen's Speech are little more than camouflage dressed up as pageantry. The Speech is little more than a device to hide the poverty of the Government's thinking and action to deal with the plight of the economy as a whole. Most of the proposed measures are the price to be paid for doctrinaire Tories and have nothing to do with our real economic ills.
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  On the specific proposals that we are discussing, the Tories' dislike of the public sector and public enterprise is all too clear. They hate public corporations when they are loss makers and detest them when they make a surplus. That is the flexibility displayed by the Tories and it was evident in the Secretary of State's speech.
  Time does not permit me to go into the history of the creation of the BNOC and our North Sea operations, but I suggest that they are a good example of a successful partnership between private and public enterprise. I was out of the House between 1974 and 1979 and was engaged in private industry, much of it associated with offshore oil. I have considerable respect for the technical ability of oil companies in their risk-taking efforts, but I recognise that the interests of the multinational oil companies are in harmony with the national interest only by accident and not by design.
  Let us go back to the actions of a Tory Minister in 1914. Winston Churchill argued the case, in the national interest, for acquiring shares in the Anglo-Persian Oil Company. He proposed to do that, not only because the Government wanted to become the largest shareholder and predominant partner in the concern, but because they wanted to be the principal and most regular customer. So much for arm's-length market dealing. Winston Churchill saw the national interest clearly and went boldly to acquire a predominant stake in the enterprise.
  The Public Accounts Committee report into North Sea oil and gas in 1973 showed clearly how the national interest was likely to be treated by the major oil companies. They were getting away with murder and Governments of both colours realised that. A Labour Government acted to secure that the fruits of the North Sea would be available to the people of this nation.
  The views of various chairmen have been quoted and I should like to quote the chairman of BNOC. He said in a lecture to the Stock Exchange that the events of 1973
  "put into the mind of the then Conservative Prime Minister the idea that we must have a national oil company to deal with the North Sea."
  It is not a foul Socialist plot. The chairman states clearly that it was in the mind of the Conservative Government in 1973.
  BNOC took off in technical terms because of the failure of private enterprise, particulary Burmah. I regret that Burmah failed, but it was a failure of private enterprise and BNOC and the Government had to step in and save the day.
  Apart from political and economic considerations, four main factors make a national oil company essential. The first is the need for a proper appraisal of our oil and gas reserves. The second is the need accurately to assess the capital and current cost of field development. The third is the need to assess the profitability of various ventures for taxation purposes and the fourth is the need for a detailed view of depletion policy.
  The Secretary of State outlined his armoury of powers, but all his powers—we gave him most of them in the Petroleum and Submarine Pipe-lines Act 1979—are considerably assisted by the existence of a direct national oil company. There is no gainsaying that. The stronger the national oil companies, the better for the British people.
  I concede that some of the tasks to which I have referred could be performed by a regulatory commission, but I repeat that the major need is for a respected and integrated

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  oil company. I know that it is not integrated at present, but I stress that the more that BNOC is respected by other oil companies, the better.
  We have seen BNOC grow under Lord Kearton, develop under Mr. Utiger and develop further under Mr. Shelbourne. Behind that, the BNOC has built up major technical expertise, which should be enhanced by the Government and not diminished by the sale of assets in an attempt to reduce the public sector borrowing requirement.
  Another reason for a national oil company different from BP or Shell that other nations have their own national oil companies and will wish to deal with intra-national oil companies. That is an important consideration. Hon. Members should consider how we would deal with the oil companies developing in Venezuela or the Middle East. We have seen how multinational companies have treated the resources of nations such as the OPEC members. Those nations naturally desire to put the oil companies aside and to deal with national oil companies that are similar to those created by the nations concerned.
  Mr. Skeet: Most of the State oil companies have been set up by OPEC countries and we have not found oil prices being lowered because the State oil companies are operating together. In addition, we may have considered that the North Sea gas-gathering pipeline was a good idea, but Statoil, a State company, was no help there.
  Mr. Douglas: I shall deal with the gas-gathering system later. There are lessons to be learnt from that—and unhappily they have to be learnt at the nation's expense. Nothing that the hon. Member has said detracts from my major point. The OPEC cartel operates in a political-economic way which we may not like, but we have to come to terms with it. If we had a growing national oil company we would be in a better "honest broker" position than we shall be if we destroy or undermine BNOC.
  I should like to consider the arguments relating to the abandonment of the monopoly powers of British Gas and I start by quoting what Mr. Shelbourne has said about Sir Denis Rooke:
  "He is a great engineer; he is a great planner, and I think it is fair to say he is a great negotiator. He in his own lifetime has seen the gas industry, largely under his leadership, come from an early 19th Century outfit to an industry which is now right at the front of technology in the 20th Century."
  Ministers may disagree with the tough chairmen of nationalised industries, but they are showing the entrepreneurial skills and the adherence to the development of their organisations that Conservative Members admire so much in the captains of private industry. If public corporations are to be worth their salt, they must have men of that calibre leading them.
  At the kernal of the argument for the destruction of the monopsonistic powers is the Secretary of State's argument that there will be much more gas. But where is that gas to come from? The hon. Member for Exeter spoke of the complaints of the Chemical Industries Association about the shortage of gas.
  What is the shortage? Is it a shortage of methane, ethane, propane of butane? The industries would not be allowed to use methane in the processes to raise steam, and other types of gas are not at the moment available. There is nothing in the Secretary of State's proposals that will make any of these gases available for another five or ten years. Therefore, he is deluding the House because of his doctrinaire attitude.
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  If however, the argument is in relation to the price of gas—my right hon. Friend the Member for Leeds, South (Mr. Rees) dealt with this—a much better argument would be that the Secretary of State should not use his powers to intervene in the contracts. It is not an argument for breaking the monopsonistic powers, for if the powers are broken and BGC becomes a common carrier there will be huge technological details arising in regard to safety. There will be public inquiries about the type of gas running through the lines. Those matters will have to be examined carefully.
  Mr. Geoffrey Dickens: Would you accept that, under the last Labour Government the British Gas Corporation, and the Government, were encouraging people and companies to switch to cheap North Sea gas? However, you are now saying that this gas is not available. Why did you falsely advertise that it was available when you were in power?
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. I have nothing to do with those matters.
  Mr. Douglas: I do not wish to become involved in a technical argument. A variety of gases may be needed, particularly by the chemical industry, and many are not available. Methane might be available but it would be wrong to allow methane to be used at the moment for raising steam. That is my argument. It is perhaps a little technical but I am sure that if the hon. Member for Huddersfield, West (Mr. Dickens) reads what I have said, he will grasp it. I do not mean that with any disrespect.
  What a monstrous procedure we went through to bring about the gas-gathering pipeline. The Minister, hand on heart, Ross and Cromarty in his mind, said that we must have it—Mobil, British Gas, BP, all agreed that it was essential—that the ethane would come ashore, that the facilities at St. Fergus would be available, and that the banks would agree. Then suddenly, because we could not write a guarantee that would not appear in the public sector borrowing requirement, it was undermined.
  We are told that all the gas will now come ashore through the private industries. We shall have to monitor them carefully, because we are dealing with a very scarce resource. I hope that the Minister of State will give us assurances that by some mystical process the national interest will be as well protected by the various consortia as it would have been if the British Gas Corporation had taken the lead and produced a transmission system and a wholesaling system which would have been to the national advantage.
  Mr. Eggar rose—
  Mr. Douglas: We are seeing doctrinaire Toryism at work. As one of the least doctrinaire people present on the Labour Benches, I emphasise to the Minister that one of the reasons why we have been able to calm the fears of the people of Scotland in particular is that they saw clearly that the public corporations, particularly BNOC, and the tax regime were working for the benefit of the nation. The Tory Government are now tearing down and undermining that bulwark. When the time comes, this House ought to oppose the Government's action.
  5.56 pm
  Mr. Michael Ancram: I shall come eventually to some of the points made by the hon. Member for Dunfermline (Mr. Douglas), but I should like

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  to start by saying how remarkable it is that this House can hold a debate on energy with not one Scottish National Party Member present. I recall the days when the Benches were full of Scottish National Party Members crying out about Scotland's oil. It would seem that that argument has been won in this House, and I hope that the people of Scotland will take note of the absence from the debate of any SNP Members.
  I have been amazed at some of the arguments of Labour Members. I refer particularly to the last few flowery sentences of the hon. Member for Dunfermline, who seems to suggest, in the absence of any other arguments, that it is a matter of patriotism and that those who seek to denationalise are in some way acting unpatriotically.
  Mr. William Hamilton: Hear, hear.
  Mr. Ancram: The hon. Member for Fife, Central (Mr. Hamilton) says "Hear, hear". That exemplifies—if it needs to be exemplified—the absence of any substance in the arguments of Labour Members against the Government's proposals. If ever proof were needed of the desperation with which they are now looking around for any argument with which to oppose the Government, surely the speeches that we have heard from them so far have given us that proof.
  Perhaps the right hon. Member for Leeds, South (Mr. Rees), who opened the debate, was merely the cellophane on the package. I am sure that we shall hear the real Labour Party policy when the right hon. Member for Bristol, South-East (Mr. Benn) winds up tonight.
  But it is not with the content of the opposition to the measures that I want to deal, for in a way we are going over familiar ground, and familiarity, as ever, breeds contempt. It is the hidden cynicism behind the attack that is being made that must be exposed.
  To hear Labour Members, one would imagine that the Government were deliberately setting out to destroy great benefits presently accruing to the British people. Indeed, the right hon. Member for Leeds, South referred to these assets as being owned by the community—a ringing phrase. I wonder how many of the right hon. Member's constituents, or the constituents of any Labour Members, can claim to have received, or to have seen themselves as receiving, any direct benefit from the present status of BNOC or BGC. In my constituency, the feeling is the opposite. The two corporations, for better or for worse, are regarded as remote, and the BGC is regarded as monopolistic. This may be somewhat unfair to the BNOC, but it is true nevertheless.
  The real hidden cynicism of the Opposition's attack lies in their refusal to admit that what the Government are proposing will increase the participation of oil and gas in the economic life of the nation and that by freeing them from the admittedly different restrictions that they face at present we will allow them to play a greater role in the economy and to provide a greater number of jobs. As a Scottish Member of Parliament I have a special interest in this matter, because any development in these two fields is ultimately good for Scotland and for Scottish jobs.
  The hon. Member for Dunfermline made much of the Government's decision on the gas-gathering pipeline. I remind him and other hon. Members that when the sad and probably inevitable decision on the gas-gathering pipeline was taken, one of the main contributors to that decision
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  was the price of gas set monopsonistically by the British Gas Corporation. To suggest that it was anything other than the price setting by British Gas which eventually caused this scheme to fail would be to mislead the House.
  It is worth asking ourselves how many other job-creating developments in gas and chemicals have been delayed or have never been started for the same reasons, and how much more gas Britain could have had if this monopsonistic powers had been removed earlier.
  In Scotland we have never sought to claim these natural resources as our own. We have, however, rightly expected, from our geographical position, to benefit in terms of employment from the proper commercial exploitation of those resources. The BGC's monopsony has for too long stood in the way of this aspiration. I believe that people in Scotland will welcome its breaking and, together with the oil companies, will seek to ensure that gas will be exploited to the best advantage of all concerned in terms of a return on investment and the development of new jobs.
  Indeed, it is arguable that if the private companies go ahead with gas gathering, this may ultimately provide more jobs in Scotland than the gas-gathering pipeline would have done in the first place. Those who oppose us should explain to the people of Scotland and the rest of the United Kingdom why they wish to stand in the way of this development. None of them has done so today.
  As for BNOC, the same challenge applies. The Opposition know full well that BNOC—the chairman has said this in the past—has felt restricted in its operations by the financial constraints necessarily imposed on it by its public status. Indeed, Opposition Members know that the Clyde field development was delayed for two years because money for investment was not available. They know that BNOC believes that it is capable of faster expansion and development, given a freer hand in its investment decisions. They also know in their heart of hearts that this can create jobs in an industry which has already shown such benefit to Scotland.
  Mr. Tam Dalyell: Perhaps this is more properly a question for the Secretary of State rather than the hon. Gentleman. It will be understood that there is considerable concern about the future of the Glasgow office if the Bill becomes an Act. Perhaps there could be some statement in the winding-up speech about the future of those who work there.
  Mr. Ancram: The hon. Gentleman is quite right. That is a matter for the winding-up speech. The Minister of State has heard the hon. Gentleman's question.
  When Opposition Members talk about asset stripping, which is mentioned in their amendment, they are suggesting that in some way the Government's proposals will financially do down the taxpayer. That is the most extraordinary argument of the lot. Considering what the Government are trying to do, it seems to me that they are trying to sell off the income-yielding sections of this company.
  At present, taking an average week such as last week, the yield on the five largest companies in Scotland was 6·12 per cent. In order to finance that, the Government are having to borrow money, under the PSBR, at 15 per cent. I do not believe that any Opposition Members can argue that that makes anything other than economic nonsense.

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  Again, it takes the biscuit to argue that what the Government are doing is in some way doing down the taxpayer in the future.
  Of course there must be controls on foreign ownership and on rates. I was grateful to hear my right hon. Friend give assurances on those matters. But in the oil context we are at a vital moment when future exploration and exploitation must be encouraged if we are to maximise our oil resources.
  Perhaps I may digress from the main argument to make a brief point to my right hon. Friend. I agree that the Treasury, by all means, must take its share of the oil revenue for the British taxpayer. I do not believe the oil companies, particularly when they tell me that the present rates of taxation are the biggest disincentive that they face. However, I believe that there is a disincentive in the way in which the fiscal regime has been chopped and changed over the last few years.
  In an industry in which long lead times between first exploration and final exploitation require careful forward planning and assessment, a lack of stability in the fiscal regime can and does act as a disincentive. I hope that my right hon. Friend will remind his Treasury colleagues that it is the uncertainty caused by an ever-altering fiscal regime that is the greatest disincentive, and that some assured stability will bring renewed confidence to the industry at this critical time in its history.
  If this is done and if a new boost to exploration can be encouraged, BNOC must be ready to play its part. The Government's proposals will allow it to do so in a way that it could not do today. I believe that Scotland will benefit.
  I hope that Scottish finance, among others, will put its money where its mouth has been when it can do so under the forthcoming Bill, and that in this way Scotland will see a direct return which it has hitherto not been able to see.
  I welcome the Government's proposals. I believe that Scotland welcomes them, too, because Scots people are too canny, by and large, to be duped by the Opposition's arguments—or, I suspect, by the arguments, when we hear them, of any of the Opposition parties. Scots people know that there is no virtue in publicly owning assets which cannot be utilised to create the best returns in jobs and profits. They will not accept the Benn-in-the-manger attitudes of the right hon. Member for Bristol, South-East and his friends, for they will see them for the empty mouthings that they are.
  These proposals are good for Scotland and good for Britain. They deserve our support.
  6.8 pm
  Mr. Geoffrey Lofthouse: I shall limit my contribution by referring only to what I believe will be the effect on the gas industry of the Secretary of State's statement on 19 October of this year. Whatever Lord Kearton may believe, it was a black day for the British gas industry when the Secretary of State made that statement, but at least it alerted us, before the Gracious Speech, to what we could expect in the forthcoming Session.
  Earlier today the Secretary of State said that he could not understand what all the fuss was about. Does he not realise the serious implications for British Gas? The present gas buying rights go hand in glove with the corporation's duty under the Gas Act 1972 to develop and maintain a co-ordinated, economic and efficient supply of gas for Great Britain, and any modification of its rights
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  will make more difficult the planning of gas supplies and the direction of gas preferentially to the premium domestic market.
  The level of competitive activity in the industrial energy market, taken as a whole, is more likely to be reduced than increased by the abolition of British Gas buying rights. Oil companies are already responsible for most of the production in the North Sea and for a substantial proportion of energy sales to non-domestic users in the United Kingdom. If the corporation's buying rights are abolished, the competition between gas and oil will be reduced, as the same companies will in many cases be responsible for both gas and oil sales. Gas prices to industry are currently well below market-related levels. One would not expect the oil companies to stick to those prices in competition with their own oil supplies.
  If the abolition of the buying rights of British Gas leads effectively to an auction of gas at the beach, all the benefits of United Kingdom gas will flow to the producer, to the detriment of the gas consumer. Overall, the most likely result is that industrial gas customers will face significant price increases for firm supplies of gas. Nor will the domestic market emerge unscathed. Apart from the question of the price at which supplies will become available to British Gas, the sale of the corporation's oil assets will reduce cash flows and profit levels significantly.
  When one considers that in 1980–81 British Gas added 250,000 more customers, sold more gas to domestic users than ever before, made a profit and lent money to the Government, laid the major part of a new pipeline through Scotland and supplied more than half the energy consumed in British homes, one wonders why a successful industry is being attacked and destroyed.
  When the report of the Monopolies and Mergers Commission into the appliance retailing activities of British Gas appeared in July 1980, it suggested either that British Gas should withdraw entirely from retailing or that artificial constraints should be imposed. British Gas has achieved its leading role in gas appliance retailing by competing hard with other fuels and with anyone else who wanted to sell gas appliances. It would be a serious blow to British Gas if it were forced to withdraw from retailing. It would also be against the interests of employees, consumers and suppliers. Without British Gas, British appliance manufacturers would be threatened, standards of safety could drop, and the availability of gas appliances would, I believe, be reduced. Without its retailing activities, British Gas would be unable to maintain its network of showrooms. I am sure that British Gas welcomes fair competition and will continue to oppose attempts to curtail its freedom to compete.
  British Gas has always met its financial targets and external financing limits set by the Government. In addition, it has been able to lend the Government £100 million, which will be used in future years to pay for the investment that is needed if the industry is to grow and thrive. As the House is aware, the Government imposed the gas levy—a new cost that took £129 million from the corporation in this financial year. This will escalate sharply in the next two years to represent an additional burden of about £1,300 million over the next three years.
  This is the first of the three years covered by the Government's financial target period during which domestic gas tariffs are expected to rise by 10 per cent. more than the rate of inflation each year. In line with this

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  pricing policy, domestic tariffs were increased by an average of 17 per cent. from 1 April 1980 and by 10 per cent. from 1 October.The succession of price increases has helped to create the misconception among some customers that gas is no longer a competitive domestic fuel.
  In 1980–81 British Gas had to pay a new cost, the gas levy, for the first time. It had to pay the Government £129 million, and the amount of the levy is forecast to rise still further over the next two years. The levy is imposed on gas purchased from fields in the United Kingdom part of the North Sea under contracts not subject to petroleum revenue tax. In 1980–81 the levy was 1p a therm. In the following two years it rises to 3p and then 5p a therm. The way in which the levy is calculated may seem complicated. More simply, and more importantly, it means that over three years from April 1980 to March 1983 British Gas is expected to pay the Government £1,300 million. That sum would be enough to cover half of the cost of the gas-gathering system.
  British Gas is Britain's ninth biggest company in terms of its assets. With 106,000 employees, it is also a major employer. An organisation of this size providing a service to nearly 15 million homes makes a major contribution to Britain's prosperity. As the House is aware, I think, in 1980–81 there was a pre-tax profit of £381 million. For the previous year the figure was £423 million. Figures of that nature, which the Government have always been happy and glad to cream off, point to a successful industry.
  British Gas became a net receiver of interest in 1980–81 instead of a net payer as in previous years. It also lent the Government £100 million—almost enough to cover the whole of Government spending during the year on maintaining Britain's trunk roads and motorways, amounting to £102 million at 1980 prices.
  Over the last few years British Gas has reaped the benefits of its investment in the natural gas supply system. It has been able to repay all the money that it borrowed from the Government and to build up its reserves to the level that a business of its size needs. The £100 million lent to the Government in 1980–81 brings the total deposits in the national loans fund to £300 million.
  I come, back to my first question: Why destroy a successful industry? There must be a reason. One hopes that the Minister will be able to answer the question. There is a belief throughout the country that this newly formed word "privatisation", so popular with the Secretary of State, is merely an attempt to cream off the profit for loot for the boys. It is not beyond the bounds of possibility that some of the loot may find its way into Conservative Party funds.
  Mr. Skeet: That is absurd.
  Mr. Lofthouse: I have listened to a sufficient number of debates in the House to form the opinion that when some truth is uttered across the Floor one hears the sort of noise that has just been evident.
  It will be noticed that I have spoken from a brief during my remarks relating to the gas industry. For the remarks that I intend to make about the coalmining industry, I do not need to rely so much on a brief. [Interruption.] I did not catch the remark of the Secretary of State. I shall treat it with the scorn that it deserves.
  The mining industry finds itself in a difficult situation. I welcome the clarification supplied by my hon. Friend the
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  Member for Midlothian (Mr. Eadie) following the impression given by the Secretary of State—I do not think that it was deliberate—that a sum in excess of £1 million authorised this year for the National Coal Board was something of a subsidy. I am glad that my hon. Friend made it clear that these were borrowing rights, on which interest was payable by the National Coal Board.
  At the end of the day following the 1980 Coal Industry Act, the Government had to climb down over the pit closure programme because of pressure from the miners. Because of the cash limits—whatever the figure is—the National Coal Board finds itself in a position where it has had to cut back by 30 per cent. its orders for mining machinery needed to maintain the every-day running of pit production.
  Most of the available finance, certainly in the part of Yorkshire that I represent, is used for capital schemes. I support this policy, for the sake of the future of the industry. We shall, however, find ourselves in a situation, brought about deliberately or not, in which the pits will become uneconomic because machinery has not been maintained and replaced as it should have been. Some people might want that to happen so that there can be another purge to close what the Government call uneconomic pits, even though it was done as an act of deliberate policy.
  My final point, which perhaps the Secretary of State or one of his Ministers will clarify in winding up the debate, concerns the report in The Sun of 20 October. It said that the Ministers responsible for the mining industry were to instruct—or had already instructed—the Monopolies and Mergers Commission to consider the privatisation, or denationalisation, of the mines. I warn the Secretary of State and his Ministers—and, indeed, the Prime Minister and the Government—that if there is any attempt deliberately to run down pits to make them uneconomic and then sell off the profitable parts of the industry that will be resisted by the mining industry.
  Mr. Skeet: Why?
  Mr. Lofthouse: It will be resisted because the mining industry is successful and hard-working and is needed by this country.
  I shall refer briefly to the figure of 14 million tonnes that has been mentioned. I think that it was the Secretary of State—and probably the hon. Member for Exeter (Mr. Hannam)—who said that some of this was brought about by excessive wage demands. I want to put the record straight. Today, thousands of men work in the industry for a basic wage of less than £100 a week. How would hon. Members enjoy scrambling about in the bowels of the earth, in some cases for as many as seven days a week, for seven or eight hours a day, for less than a basic wage of £100 a week, with no chance to enjoy it? I spent 20 years at a coalface.
  Miners are not being overpaid. Their demands for wages are not excessive. So I hope that there will be no attempt to denationalise or privatise the mining industry. If that is tried, it will be resisted.
  6.22 pm
  Mr. T. H. H. Skeet: The hon. Member for Pontefract and Castleford (Mr. Lofthouse) always makes an interesting speech. A moment ago he said that the aid

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  that is given to the coal industry is insufficient. He threatened that if there were any privatisation of the mines it would be the last thing for the miners.
  I have worked out the figures. Between 1971 and 1982—the last decade—operational and other grants, including write-offs, and so on, totalled £1,736 million; the figures for social grants was £591 million, making a total of £2,328 million. The Conservatives have poured money into the mines. We have been losing millions of pounds, and the pits which are losing that money are those which have been worked out and are uneconomic, and which the National Union of Mineworkers will not allow to be closed. That is the money that has been poured in.
  The hon. Member for Morpeth (Mr. Grant) said that stocks were high—42 million tonnes. I accept that they are high, but that is because of the recession, which is international. Let us consider the figures for the past two years: coal stocking, £26 million from the Government; coking coal, £9 million; grants to promote the sale of coal to electricity boards and deficit grants £293 million, making a total of £347 million.
  Hon. Members should realise that the mines have been picking up money right, left and centre. Of course we are glad to give it, because we all realise that the coal industry has a great future—but not at any price. It cannot be run on the assumption that one can go on idefinitely pouring billions of pounds into the industry and hope to survive.
  The hon. Member for Pontefract and Castleford made one or two excursions into the subject of gas. He talked about the implications for the gas industry. I shall couple his remarks with those of the right hon. Member for Leeds, South (Mr. Rees), who talked about the break-up of the integrated structure. He talked about destruction.
  What does my right hon. Friend propose to do? First, there is the sale of oil assets. Gas is not oil in the true sense of the word. The gas industry's job is to buy and sell natural gas. Oil is at its periphery. It is only a few years ago that we sheared off the North Sea assests of the National Coal Board, and it is probably the right sequence of events to shear off the oil assets of the gas industry.
  The next proposal is to divest the British Gas Corporation of its showrooms. We have already had a report in which it is stated very clearly—it is there for all to read—that the corporation has been abusing its monoply position.
  When it comes to the crunch, I can see no breach in the integrated structure of the British Gas Corporation. Its right to purchase gas will be taken from it. It sells to industry about £1,103 million worth of gas per year. If the gas industry is to compete in this sector with other interests it will have no more than about £220 million at risk. That is a small fraction of its complete sales of £4,295 million. So when we hear the magic term "It is the break-up of an industry", we know that it is utter nonsense.
  The hon. Member for Dunfermline (Mr. Douglas), who I am sorry is not present, talked about the need for a national oil company. The many things that he said are applicable to the private sector, too. But one needs only to look at the United States. It is one of the greatest producers and consumers of natural gas, but it has no State oil company. Moreover, it imports about 6½ million barrels of oil a clay. It can negotiate with Aramco in Saudi Arabia, the Emirates in the Middle East and elsewhere, but it has no nationalised oil company to do it. It manages perfectly successfully.
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  What my right hon. Friend is doing is comparable to the Alberta Energy Company, where 50 per cent. belongs to the people of Alberta, or the people of Canada, and 50 per cent. to the provincial state.
  In 1975, I moved an amendment to provide that a company registered with limited liability under the Companies Act should be brought into being. The Minister of State said then:
  "we believe that the participation which the Government desire for it should be seen to be among the people of this country. There is no way in which this can better be achieved than by having the company quoted on the Stock Exchange and having shares made available to those who care to participate".
  He continued:
  "If I were the Under-Secretary at present, I should accept the amendment."—[Official Report, Standing Committee D, 22 May 1975; c. 196–97.]
  That was proposed as long ago as 1975. In 1981 the proposal has been accepted. Regrettably, BNOC will not be disposed of. In a minor way it will be affected. The production and exploration assets alone will be hived off, and BNOC's trading arm will remain in 100 per cent. State ownership. As has been asked, what will be the relationship between the exploration and production interests on the one hand and the BNOC parent body and its major subsidiary, the trading arm, on the other? At some stage in the proceedings it will be important to know the exact position.
  Curiously, in 1981 the arguments have come hack to roost. It may be possible for everyone to buy shares in the enterprise now that it is proposed that they should be given the opportunity to do so.
  Dr. Mabon: The hon. Gentleman is always careful about his facts. Was his reference to the proposed trading company as a "BNOC subsidiary" a slip of the tongue or is he privy to something that we do not know about?
  Mr. Skeet: The right hon. Gentleman should read the Petroleum and Continental Shelf Bill, which has been before the House for more than a year. The right hon. Gentleman may have seen the answer to the question that I tabled to the Secretary of State. It rather confirms that the same Bill will be introduced, probably with some modifications. If the terms are closely examined, it will be seen that attention will be confined to the proposals. There is no doubt that the consideration is being given to that part of the undertaking that is concerned with the search for and getting of petroleum—Clause 1(4). I do not refer to the section concerned with trading.
  Today, the Secretary of State indicated that BNOC' s trading arm will remain in the hands of the State. I was surprised by the remarks made by the right hon. Member for Leeds, South about the participating arrangements. If he had spoken to his colleague he would have discovered that many of the participation agreements will not require amending, because BNOC's trading arm will remain in the hands of the State. The agreements that need to be modified could be covered by provisions to be included in a measure that will probably be seen soon, or early in the new year. In the same way the Labour Party retrospectively dealt with provisions in the Petroleum and Submarine Pipe-lines Act 1975.
  If my memory serves me correctly, sections 17 and 18 deal with the matter. The Labour Government wrote in certain provisions that we regarded as retrospective. If anything is required to be done through the participation arrangements, it can be done by means of such provisions.
  Mr. Rowlands: What?
  Mr. Skeet: Obviously the hon. Gentleman did not quite understand what I said. If we had to, we could use the same provisions as were used in the 1975 Act and read into agreements the same type of provisions as were included then.
  Mr. Rowlands: That brings me to a point that I made when I intervened in the Secretary of State's speech. In the fifth and sixth rounds the 51 per cent. participation arrangements involve not buying oil, but equity interests in every one of the licences. If we sell that equity interest, what will happen to control over the 51 per cent. of the oil that is derived from those licences?
  Mr. Skeet: That is an entirely different point. There are at least 65 participation agreements, and many of them will not require modification. We may have to examine the draft of the Bill and there may be some modifications to it, but we have not seen the exact terms of the Bill yet. The agreements that require modification can be dealt with by reading provisions into all the agreements by means of an Act of Parliament.
  The right hon. Member for Leeds, South said that the buying rights of the British Gas Corporation were fundamental to the development of natural gas sales. However, the British Gas Corporation ran down the supply of natural gas coming from the continental shelf. It did not pay the oil companies enough money to fetch it. Those companies found such activities unprofitable. Initially, the British Gas Corporation paid the oil companies 2·87p per therm. As a result of inflation and escalation clauses, the amount was raised to about 4p to 6p per therm. It is now said that the amount is between 10p and 11p per therm. However, the BGC is making the public pay some 29p per therm and industry is paying 29·3p per therm on firm contract. Industries on interruptible contracts are paying 25·5p per therm. If it is possible to get a new supply of gas, the cost is as much as 46p per therm.
  Therefore, the BGC has been fleecing the public, and it knows it. That is why the previous Secretary of State intervened with a levy. The British Gas Corporation was not paying petroleum revenue tax—[Interruption.] The House knows that my remarks are correct. We shall be able to debate any difficulties at length when the Bills come before the House.
  The "Plan for Coal", which was brought out in 1974, contained a provision whereby Governments of the day would place considerable investment in the collieries. All hon. Members will agree that such investment was necessary. There was an agreement with the National Union of Mineworkers and other unions that pit closures would go ahead. They recognised that such pits were crippling the whole structure of the industry. The NUM has not complied.
  Mr. George Grant: Nonsense.
  Mr. Skeet: The hon. Gentleman should contain himself. Only recently 23 pits were proposed for closure. Given the circumstances, the Prime Minister decided to withdraw the list. The hon. Gentleman will probably know that closures are taking place. When there is no glare of publicity, closures go ahead by agreement. Over the years, the closures necessary to turn the NCB round have not taken place. Therefore, it has proved impossible to achieve the all-essential viability.
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  We should recognise the problems that the NCB faces. Production stands at 126 million tonnes, but the market stands at 117 million tonnes. Therefore, the industry is over-producing. The electricity industry is the largest consumer of coal, and that industry consumes 83 million tonnes. The electricity industry is followed by the steel industry, other industries, domestic consumers and exports. They are small consumers and with electricity the consumption totals 118·6 million tonnes. Although it is anticipated that exports will increase considerably to about 9 million to 10 million tonnes this year, most coal is being sold at a loss. Therefore, the NCB is not getting richer.
  The hon. Member for Morpeth (Mr. Grant) mentioned a scheme in the Budget involving £50 million. What has been the take-up? Twenty applications have been made involving not £50 million but £750,000. That is pitiful. Therefore industry has not been interested. It is cheaper to buy an oil plant and to keep it than to buy a coal plant, because a significant capital sum is required.
  One of the NCB's problems is that its production is too great for demand and the market. There is unlikely to be an immediate improvement. A long lead time is involved and it is important to cover that time in the production of coal. The mining industry receives huge sums in grants from the Government, loans from the National Loans Fund and the EEC. Bearing all that in mind, it is right that a Bill should be put before the House to deal with the NCB's finances and borrowings.
  A coal Bill is essential. At long last the Secretary of State has begun on the proposals to sell part of the BNOC. I am sorry that he does not intend to go further, but that can be discussed in Committee. Such a Bill will not impair the BNOC. It will strengthen it. It will return to the people that which they should hold rather than put it into the State's hands.
  The British Gas Corporation is not being dismantled. Only a corner of it will be affected. The proposals will improve the corporation's structure, and the chairman knows that.
  6.40 pm
  Dr. J. Dickson Mahon: I join the hon. Member for Dunfermline (Mr. Douglas) and the hon. Member for Exeter (Mr. Hannam) in their congratulations to the hon. Member for Croydon, North-West (Mr. Pitt). I have no doubt that many more maiden speeches will be made from these Benches. Perhaps the speech on 1 December will not be a maiden speech, but will be made by a wonderful lady.
  The hon. Member for Bedford (Mr. Skeet) referred to the British National Oil Corporation. The hon. Member for Dunfermline referred to that amply. Let us stand the argument on its head. Every oil-producing country has a national oil company. There must be a reason for that. The only exception is the United States. That is because virtually every national oil company exists because of the United States. The United States is the world's major oil explorer and producer. It has so generated national antagonisms in other countries that national oil companies have had to be formed. Free enterprise Canada is no exception. Petrocan has had to try to hold off what it regards as the ravages of the American multinationals. I do not say that the American multinationals are that bad, but the five American sisters dominate the petroleum world.

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  There is even a move in the United States Congress to establish a national oil company in the United States to protect the American people from the depredations of Big Oil. Let us not say that there is something wrong with a national oil company. Indeed, our new extraordinary Right-wing Minister at the Department of Energy concedes that a national oil company must exist, even if it is weak and helpless and reduced to a miserable 49 per cent. holding—perhaps not even that. We shall see when the Bill is published.
  I thought that the Secretary of State criticised the BNOC unfairly when he said that it was of no significance being involved in only 7 per cent. of production. I remind the Minister of the long lead time involved in a company discovering a field in the North Sea and producing. In the Forties field it took seven or eight years to produce. The BNOC began its operations in 1976, only five years ago. By statute it had inherited previous interest from the NCB and the British Gas Corporation. There is nothing wrong with that. It is sensible. We argued in the Wytch Farm debate that if the British Gas Corporation should not be in oil, but accidentally became involved in it, and if for administrative reasons it should not deal with oil, it would be logical to sell Wytch Farm to the BNOC. The Government could not concede that the Gas Corporation should sell it to the BNOC, because of the public sector borrowing requirement—that devil that constantly impedes the prospects of the commercial public sector.
  The same applies to gas gathering. The hon. Member for Ross and Cromarty (Mr. Gray) has proved to be an excellent Minister. He was dedicated to a publicly owned and operated gas-gathering system. I shall not embarass him and his predecessors, but I know that they were defeated in the argument within their own Government. I have no doubt that the present Secretary of State did a hatchet job as expertly as usual. The failure to go ahead with the gas-gathering system represents the most serious reverse in energy policy for three years. A grave error has been committed and the country will regret it.
  An accusation about excessive flaring has been made. The Gulf will be as nothing compared with the North Sea if we are obliged to flare the untransported gas. One of the consequences of licensing and restricting flaring is that oil production is reduced or stopped. If one wants to reduce the volume of gas from a field because one does not wish to flare it, one reduces the volume of production. That crisis will face the Government—perhaps not this Government, but the next one—when companies fail to be able to deliver the gas and have no choice but to flare it or reduce production drastically.
  I am sorry that the hon. Member for Edinburgh, South (Mr. Ancram) has left the Chamber, because even if I were the most laissez-faire of Tories I could not believe that in some haphazard, accidental way, by a miracle almost, companies will get together and produce more jobs in a new private fragmented gas-gathering system or take ashore as much, if not more, gas than a common carrier.
  The Minister of State, Department of Energy, (Mr. Hamish Gray): The right hon. Gentleman knows a great deal about this subject, because he did my job before I did. He will realise that before an annexe B is granted to a company certain requirements must be met. The Government will refuse to grant annexe Bs to companies
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  that wish to develop oilfields unless provision is made for getting the gas ashore. That takes care of the right hon. Gentleman's argument.
  Dr. Mabon: That might be true in a comprehensive way, but it is not so in day-to-day, or more correctly in quarter-to-quarter, affairs. The Minister has enough experience to know how often companies, with the best will in world, complain that their production is inhibited by restrictions on flaring. I once had the unpleasant task, with Shell in particular and BP to a lesser extent, of saying "No. You must not continue flaring as you are". Gas pressurisation machines and other equipment that were subsequently installed are proof that we have prevented the companies from destroying the gas.
  There is a natural bent in the oil industry in favour of disposing of the gas somehow or other. It is a damned nuisance. It is regarded as such, not only for economic reasons, but because of transportation and disposition. There is such a bias. I warn the Secretary of State not to be misled by the companies. He should be a stickler on flaring, even though he might put himself in a difficult position by not having a gas-gathering line guaranteed by the Treasury. He will regret that decision bitterly so long as he remains Secretary of State.
  I return to the general argument about the public sector borrowing requirement. I am sorry that the right hon. Member for Bristol, South-East (Mr. Benn) is not here, because I remember that during the IMF crisis we had to find a way of financing the beginning of the BNOC's budget. There was a little money from Parliament. Lord Kearton had the good idea, which was successful, in the very month of the crisis, September 1976, of raising $800 million on Wall Street on the collateral of the oil that would be ours in three or four years' time. By that I mean BNOC oil. That was done. Then, to our astonishment, it was argued that that money had to be counted in the PSBR. I could not understand why. The right hon. Gentleman who was then the Secretary of State did not understand that either.
  We fought very hard when in Government, not as a matter of doctrinaire conviction but as a matter of common sense, to prevent that. How could it be part of the public sector borrowing requirement when the money did not come from anyone in Britain? However, we were told by the Treasury that the money must be counted in the public sector borrowing requirement.
  One of the revolutions that we must achieve in Britain—perhaps under a Social Democratic-Liberal Government or under a coalition with one or other of the traditional parties—is to divide the public sector borrowing requirement in the Treasury's mind. First, there should be the genuine public sector borrowing, which finances public services such as hospitals, schools and social services, and which does not and cannot make a profit. We should call it the public service section of that borrowing requirement. Secondly, we should leave alone industries that can finance themselves and call them part of the commercial public sector requirement. We would then not have to choose between a new coal mine or a new series of hospitals.
  I was in Government for eight or nine years, and I have seen that sort of nonsense—in Cabinet committees and elsewhere—whereby we have to choose between the unchooseable. Yet the discipline continues. Old Nick himself, transferred from the Treasury, is now in charge

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  of Energy. He has a coal mining industry that is beginning to flourish. Given a continuous reasonably good level of investment, the coal industry could move into surplus and pay off its debts by the end of the century. It could be a great credit to the country and be self-financing.
  The oil industry returns money to the Treasury handsomely. About 83 or 84 per cent. of all profits in the North Sea go to the Treasury. For what more could we ask? That is the position now. We should leave the BNOC alone to make money and add to the 83 per cent. that is returnable to the State.
  No one in the debate has said even in the most grudging way that the British Gas Corporation is not a highly successful industry. We must concede that it makes a lot of money. The Government tax it to death with a gas levy, and still it makes money.
  Mr. Skeet: I agree that the corporation makes money, but even a fool could make money if he paid so little for the raw gas and charged so much for the end product.
  Dr. Mabon: Perhaps the hon. Gentleman is offering himself as chairman of the British Gas Corporation at some time. His remark is not true. If the neatly negotiated prices of the corporation's gas extending over long contracts—the oil companies were not forced to sign the contracts—prove good for the corporation, they also prove good for the consumer. If there is a free price negotiating structure between the corporation and the gas supplier, in the end the consumer will pay. Then all the pleas of Conservative Members for subsidised energy for industry will boomerang in their faces. The Secretary of State said that if gas becomes too expensive market forces will work and industries can choose other fuels. What other fuels?
  I concede that if the Government want to privatise they can take up the invitation of the chairman of the British Gas Corporation to leave the integrated system alone. It is then perhaps logical to offer shares in the corporation. The Government's original intention with the BNOC was to issue granny bonds and not to get into an argument about dismantling the corporation. I hope that the Minister of State will do his best, if not tonight, on the Second Reading of the proposed oil and gas Bill, to answer questions about the proposals advanced by the Secretary of State.
  My colleagues and I do not share the doctrinaire prejudices held by others in the House. We prefer to look at the position as it is—a market economy as it should be and a fair division between the public and the private sectors. We believe that steps should be taken on the ground of obvious common sense. It is not common sense to dismantle the BNOC and the British Gas Corporation in the way suggested by the Government. We shall support the Opposition amendment, although it does not spell out their own particular present policy. I shall return to that matter.
  The British National Oil Corporation has had three chairmen under the Conservative Government. Two were converted into pro-BNOC men and opposed any change in the structure, apart from granny bonds. The present chairman is a tame one, who says exactly what the Government expect him to.
  The Secretary of State said that he would publish the articles of association of the proposed new BNOC. One of his colleagues said on the radio this morning that there
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  would be some circumscription whereby 15 per cent. of the 51 per cent. block of shares would perhaps be allowed into the hands of foreign nationals. We are all concerned about that, and the five sisters are lurking—[Hon. MEMBERS: "Seven."] No, Shell and BP would not do such a dastardly thing. The five American sisters are lurking to see how much they can pick up. What restrictions will there be on the purchase and sale of shares by individuals? Is it not to be a freely tradeable stock? It is important that we see how that can be achieved in the articles of association.
  There is another argument on the legal status of the United Kingdom in regard to the continental shelf if we dispose substantially of the corporation stock.
  Mr. Eggar: That is a Foreign Office argument.
  Dr. Mabon: Yes, but there is nothing wrong with the Foreign Office on occasions. There is a genuine concern about our legal status on the United Kingdom continental shelf.
  Another argument that has been advanced is about participation. We have not yet had answers to the questions about the fifth and sixth rounds. I should have to take legal advice if I were the Minister, but I believe that the earlier participation agreements need not be altered. Tripartite agreements were signed by either the then Secretary of State or myself on behalf of the Labour Government. They were also signed by all the companies—in some cases as many as nine or 10—and by the BNOC. Therefore, if any of the signatories were to challenge us, it could land us in all sorts of legal complications and trouble.
  Those were the easy agreements. There were others where a condition of the licence was that 51 per cent. of the equity of the consortia should be held by the BNOC. Will that 51 per cent. be sold back to the consortia so that the new shareholders will never get the advantage of many good prospects, as we have seen in the fifth and sixth rounds, or will we keep them? If so, all those agreements will have to be renegotiated. I spent three years negotiating 68 agreements, most of which were difficult. I do not know how many agreements there were under the fifth and sixth rounds, but it will not be an easy matter. The Secretary of State is entering a lion's den of complications and concerns.
  As always, I was pleased with the speech of the right hon. Member for Leeds, South (Mr. Rees). When challenged, he said what would happen to the Bill, if it is passed, when a Labour Government took office. He said that the position would be restored. He used a better formula of words about compensation than has been used previously. He avoided saying that compensation would be on the basis of proven need. That is a little dubious. I doubt whether it is even legal under the international conventions that we have signed.
  Mr. Skeet: The right hon. Gentleman belongs to another party. Will he give the House and the country a clear view of his party's policy? He said that he sympathises with the Opposition's intention to repeal the Bill. Would the right hon. Gentleman pay compensation to those who buy shares?
  Dr. Mabon: I hope that it does not embarrass the right hon. Member for Leeds, South if I praise him for using words that the Social Democratic Party would use about

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  seeking to redress the position if it were in Government, or if it were asked to support a Government. The argument put forward by the hon. Member for Dunfermline about the BNOC and foreign Governments is true. As the Minister knows, when I held office under the previous Labour Administration I had to deal with foreign Governments with national oil companies with which we wanted a formal trading arrangement. They did not want arrangements with British Petroleum, only with the BNOC. Certain countries with one-party Governments, collectivist Governments or Socialist Governments would not allow any drilling for exploration or production by the seven sisters or their allies, only by such State companies as the BNOC or Petrobras of Brazil. There is a role for a national oil corporation to deal with other oil-producing countries that take a different view of the economy and politics from that of the Conservative Party. I found it useful to wheel in the BNOC if BP were refused.
  The Labour Party is tinkering with the idea of nationalising BP if it returns to office. BP has oil stakes in Alaska, which would be discriminated against if it were 100 per cent. State-owned. It might not even be granted licences. Only the British could accidently fall into our present desirable position. The existence of two companies—a 100 per cent.-owned BNOC and a 50 per cent.-owned BP—gives us two abilities that are denied to most other petroleum-interested nations. We should not proceed any further. I am not saying that the regime left by the previous Labour Administration was perfect. However, it was a good concept of a marriage between enterprise and a proper return to the people for what is justly theirs.
  The oil in the North Sea belongs not to the companies but to the British people. It was nationalised in 1964 by a Conservative-dominated House of Commons. I hope that it will remain that way. The argument should be about that. The official Opposition have a tendency to go too far. They want to nationalise everything in the North Sea. That would cost five years' revenue in compensation, which would take away the profits from the North Sea. It would also end the technological expertise of companies. It would slow the advancement of petroleum production. Many hard-working people in Britain are involved in that. Their future employment depends upon continuing developments in the North Sea.
  We do not want to have to choose between the doctrinaire prejudices of the present day Labour Party and the doctrinaire foolishness of the Conservative Party. The lesson is obvious.
  7.5 pm
  Mr. Tim Eggar: The cat is out of the bag. The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) has produced the oil policy of the Social Democratic Party. What is it? It is simply a repetition of the same old-fangled, disastrous lines that he followed when he was under the control of the right hon. Member for Bristol, South-East (Mr. Benn).
  The right hon. Member for Leeds, South (Mr. Rees) spent a great deal of time asking questions of the Secretary of State, yet he took only half a minute to explain the Labour Party's policies on the future of BNOC. He was looking nervously over his shoulder wondering where the right hon. Member for Bristol, South-East was. Indeed, where has he been for the past two hours? He has not been sitting on the Opposition Front Bench. He has probably
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  been running between at least half of the Tribune Group at one end of the Corridor and the Leader of the Opposition at the other end, desperately working out what he should say. Should he put forward the proposals of the Labour Party conference? Are there any proposals covering this area? Should he put forward the proposals of the NEC? What does the Shadow Cabinet think?
  The right hon. Gentleman is in a difficult position. We must sympathise with him as he tries to fight through the myriad of different strands of Labour Party and Social Democratic Party policy. He is in a difficult position not only because of what he has been saying publicly since he left office, but because of what he did when he was in office. He permitted his Government to sell a large share of BP. He introduced a Bill that forced the NCB to sell to BNOC for £50,000 oil assets valued at £100 million. He will have to defend his record this afternoon.
  The Gracious Speech was a relief to many Conservative Members. Since entering office we have looked forward to the time when BNOC would be denationalised and privatised. We congratulate my right hon. Friend the Secretary of State on the speed with which he has built on the foundation left by his predecessor, now the Secretary of State for Transport. However, it is unfortunate that we shall not sell shares in BNOC until the Government have been in office for three and a half years. It is unfortunate that the measure announced in the Gracious Speech did not form part of the first Gracious Speech and was not legislated for during the first Session of Parliament.
  I hope that my right hon. Friend is giving careful consideration to the selling of shares. It is important that share ownership of BNOC should be spread as widely as possible among the people. I wish to see shares given to the people, but I recognise that that may not be possible at this stage. Perhaps we should investigate the possibility of making shares available at discount prices through the Post Office network. There are a number of economic and political advantages in having share ownership spread as widely as possible throughout the country.
  Before passing on to British Gas, I wish to say something about the National Coal Board. I am worried about our policy in that area. I recognise that we must put investment into the NCB and that that should be part of a long-term commitment. Nevertheless, I and my hon. Friends will study the Bill with some care once it has been published. The Government appear slightly to lack a longterm strategy on exactly where they are going to take the National Coal Board, which is presently producing too much coal too expensively. We cannot add indefinitely to the stockpile which stands at about 42 million tonnes
  The Government should do two things. First, they should say quite clearly to the National Union of Mineworkers that it has not stood by its part in "Plan for Coal" while the Government have stood by their part of the bargain. There have not been the pit closures implicitly promised by the NUM in "Plan for Coal". [Interruption.] There is no point Labour Members muttering—that simply has not happened. They must face that and be honest with themselves and the NUM.
  Mr. Allen McKay: Will the hon. Gentleman tell me who has promised the pit closures?
  Mr. Eggar: If the hon. Gentleman turns to "Plan for Coal" he will see provision for annual closures that would result in a reduced output of about 4 million tonnes over

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  the relevant period. That has not happened and the figures are nothing like that. Quoting from memory, I believe that, in the years up to the end of 1978–79 the total closures amounted to a reduced output of 4 million tonnes capacity whereas, in that period, there should have been a reduction of about 12 to 15 million tonnes. That is the order of magnitude.
  There is another matter that I hope my right hon. Friend the Secretary of State for Energy will examine carefully. It seems absurd to me—when we have some great mining houses and a major commitment by British Petroleum to coal development in Australia and Canada—that they should be effectively debarred from investment in the British coal industry.
  I do not believe that it is feasible to sell off parts of the National Coal Board's existing facilities and pits. I agree with Labour Members on that score. However, we should be examining the feasibility of private companies, if necessary in conjunction with the NCB and, at least, with the attempted compliance of the NUM, with a view to developing some interesting prospects. I have the Vale of Belvoir in mind. I throw out that suggestion as something to which we should be looking and working. I hope that Labour Members will not reject that option out of hand.
  I shall confine the rest of my remarks to the gas industry. The decision of my right hon. Friend to sell off the British Gas Corporation's oil interests is clearly justifiable and desirable. I have a preference that the oil interests of the British Gas Corporation should be formed into a separate company and that that company should be floated on the Stock Exchange. I am not clear whether that is what my right hon. Friend has in mind, but I dare say he will clarify that issue when the Bill is discussed. That course seems desirable to me if at all possible.
  I share Sir Denis Rooke's view that the most important aspect of my right hon. Friend's announcement is the decision to end the monopoly purchase powers of the British Gas Corporation. I believe that it is the monopoly purchase power and the monopoly distribution power that have led over a period to the present absurd pricing structure for gas, to the lack of an available gas supply and, in particular, to the inability of this country to secure the large supplies of Norwegian gas which should be rightly coming into the United Kingdom.
  I was delighted by the speed with which my right hon. Friend responded to the statement released by the British Gas Corporation following the Gracious Speech. Although I have had many reservations since I entered the House about the way in which the British Gas Corporation has been managed, I have never had anything but respect for Sir Denis Rooke, the British Gas Corporation's chairman. He is a formidable, extremely competent and able manager. I never shared the view that was expressed by my hon. Friend the Member for Knutsford (Mr. BruceGardyne), the Minister of State, Treasury, that Sir Denis should not have been reappointed by the present Secretary of State for Transport.
  I hope that my right hon. Friend the Secretary of State made it quite clear to Sir Denis that while he should be able to put forward his views and the views of his board—it would be wrong for anybody to try to stop that—any attempt by the corporation to obstruct the will of the House, as shown in the Lobbies, would be met with instant dismissal whatever the consequences, compensation or
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  public outcry. The House cannot have the chairman of a nationalised industry dictating to Government actions that govern a particular industry.
  The statement issued by the British Gas Corporation to which I have referred claims that the shortage of gas was due not to the British Gas Corporation's policy but to the rise in the price of oil. The British Gas Corporation controls the supply of gas and statute gives it considerable control over the demand for gas. In relation to industry, the gas corporation simply abuses its monopoly by deciding who in industry would get gas. The gas corporation's press release claims that its policy has been consistently to direct industrial gas selectively to industrial applications where its intrinsic qualities as a fuel are highly valued and can best be applied.
  The corporation is suspending the law of supply and demand. It says that supply is what it has available and demand is what it thinks its customers should use. In other words, hang the fact that a particular company wants to use gas—if British Gas, in its wisdom, decides that a company should not use gas, it will not use it.
  The belief that the British Gas Corporation can suspend the law of supply and demand has arisen only through years and years of arrogant misuse of its monopoly position. That is the insidious and serious damage that British Gas, using its statutory position, has done to the country and economy over a period. The damage that the corporation has done in that area has had an effect on the availability of supply to industry and on the form of the supply of gas to the industry. That is because British Gas has always recognised that it is expensive for it to provide gas storage facilities.
  Of course it is too expensive—it has to meet peak demand. What does the BGC do? It has the bright idea that industry will provide the equivalent of the storage to meet peak demand. Industry would be forced to take interruptible supply contracts so that when British Gas was unable to supply enough gas, industry would simply switch to oil. That would be very nice for the corporation. It would benefit from the capital investment that is so necessary and such an integral part of a proper gas storage system to meet peak supply.
  It is crazy that our industry is paying roughly the same for industrial gas as industries on the Continent while consumers are paying roughly half the tariff that consumers are paying on the Continent. Why has this happened? The Governments of 1970–74 and 1974–79 were prepared to buy reductions in the retail price index in exchange for the development of an energy pricing system for gas that made no economic sense. Both sides of the House must recognise that and take some responsibility for it. The British Gas Corporation encouraged us to take that view. It was aware that artificially low gas prices for domestic consumers would give it political leverage over whichever Government were in power.
  There is one paragraph in the British Gas Corporation's statement that I welcome unreservedly. In the final paragraph Sir Denis said that he would welcome privatisation into British Gas. I admit that he said that he would welcome that in the context of the corporation in its present form. If he accepts the principle of privatisation and private ownership, he can have no objection if private equity in a new form is introduced into the corporation. At least we have jumped the hurdle of principle that I thought

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  Sir Denis would rule out completely. I thought that he would rule out any private ownership in the corporation at any time.
  Slightly over a year ago my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) and I produced a pamphlet entitled "British Gas: A Prospectus". The pamphlet contained 10 recommendations. I am delighted that the Government have moved at least some way on eight of the recommendations. I look forward to some movement on the two outstanding recommendations between now and the Bill's Second Reading.
  First, I hope that my right hon. Friend will ensure that he has some control over the way in which tariffs are charged on any common carrier pipeline that is operated by the corporation. I am delighted to see him nodding in assent. Secondly, I can only assume that independent companies will have a right to build their own pipelines if they so wish. Thirdly, I hope that the Government will make clear that should companies wish to build pipelines that connect the United Kingdom and the Continent that development will be encouraged.
  I accept that it would be wrong for Britain to accept a net export of gas from the British sector of the North Sea to the Continent over a long period. However, it would be possible to reach arrangements with Continental purchasers whereby gas delivered to them now would be repaid over a period by the gas that they deliver to us. Such a system would ensure that any reserves that we deplete now to benefit those on the Continent would be the subject of compensation in future. That is a common arrangement in the United States and Canada and we could enter into similar arrangements.
  I hope that my right hon. Friend will make it clear that he will encourage companies to negotiate with the Norwegians to ensure that Norwegian gas comes through the United Kingdom to the Continent. The cheapest way of transporting northern Norwegian gas to the Continent is not, as is presently planned, by taking it twice over the Norwegian trench or down the median line. The cheapest way is to pipe it into the United Kingdom and thereafter to take it across land to a short cross-Channel pipeline. I hope that the Government will give impetus to such a scheme. I am convinced that we lost the Norwegian gas from Statfjord, Heindahl and East Frigg because of the high-handed attitude that was adopted by the British Gas Corporation during the negotiations. That happened this time round and it happened on the previous occasion when we were successful in getting Frigg gas.
  As my right hon. Friend is familiar with oil taxation, I do not wish to dwell too much on the encouragement of gas fields from the point of view of taxation. I am concerned about the way in which petroleum revenue tax hits the marginal pure gas fields and not the associated fields. Secondly, I am concerned that the Inland Revenue is reported to be thinking about charging PRT on companies that are using pipelines provided by other companies. The PRT complications could make tariff costs prohibitively high for third party carriers. I am delighted to see that my right hon. Friend is nodding to indicate that he denies that that will happen.
  Mr. Lawson: No. I was talking to my hon. Friend the Under-Secretary of State.
  Mr. Eggar: It seems that that is still a possibility. I hope that my right hon Friend will use his best endeavours with the Treasury as only he knows how.
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  I am concerned about the future share ownership of the British Gas Corporation. My right hon. Friend has said that it is not intended to introduce private share capital into the British Gas Corporation. I urge him to think again. It is desirable that the proposed legislation should contain powers for the Secretary of State to sell shares in the corporation. I would go further than that. I would like to see shares in the corporation given away to the public—it was done successfully in British Columbia—on the lines sketched out in the Financial Times by Mr. Sam Brittan, who was directing his attention to the British National Oil Corporation.
  I remind my right hon. and hon. Friends of a phrase that appeared in "The Right Approach to the Economy", a document to which the Conservative Party should pay rather more attention while in Government than it has so far. Part of that document stated:
  "Ownership by the State is not the same as ownership by the people."
  That is especially true when we consider whether to sell shares to those in the corporation or to give them away.
  The forthcoming Bill will provide a golden opportunity for which many of us feel we have been waiting too long. I hope that my right hon. Friend will seize the opportunities that the Bill will give him in the future ownership of the corporation and in the way in which distribution rights and the distribution of gas is controlled both by him and by the introduction of the private sector. We cannot afford not to proceed to the fullest extent possible and we cannot afford to make mistakes.
  7.29 pm
  Mr. Peter Hardy: I hope that the hon. Member for Enfield, North (Mr. Eggar) will forgive me if I do not pursue his arguments. It is interesting to hear his confession that he serves as a sort of mini-Rasputin of Conservative Party energy policy. I do not wish to make a long speech, but, in view of the Secretary of State's comments about flaring, it might be useful to set the record straight.
  The hon. Member for Ross and Cromarty (Mr. Gray) perhaps would agree that the situation in summer 1970 changed with the development of the Brent field. There was a scandalous flaring of gas in that field and others. There was a public outcry. The Minister will recall questions asked in the House and concern expressed by hon. Members on both sides. In autumn 1979 the Minister acted by reducing the pace of extraction of oil in Brent to reduce the scandalous flaring that had taken place. It was unfortunate that the Secretary of State should seek to make a partisan and ill-founded comment on that. Perhaps the Minister will comment on it to clear the record.
  I am concerned about flaring, but also about the fact that the absence of the gas-gathering pipeline will sterilise substantial quantities of gas which will either have to stay in the ground or be flared. It might be gas of substantial value which could pay for some of the things that we in Britain need.
  I shall trespass from energy for one moment because of a serious threat to the quality of life that is now developing in my constituency. My parish councils are receiving letters demanding, or suggesting, that they make substantial payments towards the retention of public telephone kiosks. The Minister is not responsible for that, but he may recognise that in the thinly-populated areas of

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  Britain which are supposed to be represented by Conservative Members that threat to the public telephone kiosk is alarming and frightening.
  Mr. Deputy Speaker: I remind the hon. Gentleman that we are discussing the amendment. This is not a general debate on the Queen's Speech.
  Mr. Hardy: I am illustrating the point by saying what some of the revenues could be used for if the Opposition's view prevailed, Mr. Deputy Speaker. The quality of life in many parts of England will be affected simply because the Government have no sense of the sensible priorities. If they used some of our offshore resources, we could have such decency. However, all we are likely to have are enormous profits which continue to flow out of Britain.
  It is said that every time an office block or a block of super flats comes on the market in Europe or North America, British investment buys it. Perhaps profits from our offshore fields provide the vehicle for such an acquisition. The people who are responsible for the economy there are happy to let us finance their commercial and property speculation while they develop the industries which, in fact, are declining rapidly.
  It is all very well Conservative Members complaining about the level of coal stocks. They are high because the level of industrial activity is low. The problem will remain severe and become worse until we have an entirely different approach to that matter. Perhaps it would be relevant if the gas-gathering pipeline were to proceed and thus avoided wasteful flaring and sterilisation and created 35,000 jobs in British Steel and the engineering industry. The Minister may know that the smaller and less adequate pipeline system which will develop as a consequence of the decision will cost the Treasury as much as the sensible and progressive decision that we should have.
  Conservative Members, who know nothing about the mining industry, imagine that pits have not closed. Only six months ago there was a considerable hoo-ha about the collieries in the North of England which were supposed to close. They have closed. Orgreave in my constituency
  closed. Although the National Coal Board had been saying for a long time that there was little coal there, later boring suggested that there was still some coal which could be mined from a drift development. Orgreave, the oldest pit in my constituency, was sunk in 1868 and is now closed.
  However, at the same time Maltby will become a super £2 million pit. There will be an enormous capital programme. I pay tribute to the Minister who approved it. Perhaps the decision took a few months longer than it should have. It is sad that the moment that decision was announced the media engaged in ballyhoo and the lives of the management, the branch secretary and other union officials at the pit were made wretched because it was announced on television that there were to be 600 new jobs immediately at Maltby colliery. It will take about eight years for the jobs to materialise. We need more jobs than that now, not in eight years' time.
  I suggest to the Minister that the public alarm that changed the Government's attitude on flaring and on gas showrooms should be applied to some of the proposals in the impending legislation. The hon. Member for Sheffield, Hallam (Mr. Osborn) may know of this event. A public meeting was held in my constituency during the recess to
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  consider the closure of gas showrooms and the dreadful, unfeeling attitude of the Government to the Wytch Farm oil field. I set off to Rawmarsh leisure centre in my constituency expecting to find about 40 or 50 people. When I arrived, I could find nowhere to park my car in the car park. There were 800 people there. They were united in anger and enthusiasm, and protested strongly about the Government's policies. It was the biggest public meeting that we have had in Rother Valley for a long time.
  I suggested that such action should be emulated and that we should give everyone the opportunity to express their indignation. The Government's antennae appear to have been operating. It has probably not been necessary to repeat how large that meeting was. It was entirely and astonishingly spontaneous. Perhaps many of the people were there to express their support for the chairman of British Gas. I do not like some of the attitudes of Conservative Members who criticise a splendid, first-class public servant. The chairmen of such organisations should not be appointed just because they will do anything a Minister tells them. That appears to be the suggestion which some Conservative Members are making.
  There is one other reason why it is so important to support Sir Denis Rooke. He is not a lawyer, an accountant, a merchant banker or a salesman. He is an engineer. Unlike engineers in most of our competing countries, the British engineer has too low a regard. It is perhaps useful to have someone such as Sir Denis Rooke to illustrate that at least there is hope of advancement for people in the engineering profession.
  The Government should attend to one or two other things before messing about and wasting the time of the country and the House in the way that they propose. During the recess I made a large number of visits in my enormous constituency. I went to both private and public sector steel and engineering establishments. It is clear that there are grounds for two areas of enormous concern to which the Government should begin to respond.
  The first is energy prices. I noticed during the recess, as during the previous recess, that the public and private sectors of the steel industry in South Yorkshire were once more sent a detailed case on energy prices. The last one did not have enough effect. It is now essential that greater attention should be paid to energy prices, particularly in steel, chemicals, glass and paper. Perhaps the Government should say to British Gas that it should not continue to make payments to the Treasury, which the Treasury seems to want. We should take urgent action to ensure that British industry is not priced out of markets by subsidised foreign competition. The argument advanced by the Minister's predecessor, that because of French nuclear policy French electricity prices are justifiably lower, will not wash. There is no adequate justification for that.
  The second item which gives concern is the frightening situation which is developing in connection with our supply of offshore equipment. About a year ago I made representations to the Government about a company in my constituency which had been priced out of a contract in the North Sea by foreign competition. It was obvious that the price that the foreign competitor was asking was negligible and perhaps below the cost of the steel of which the equipment was composed. The British firm lost that contract. The Government may feel that justice was done. The foreign competitor did not supply on time. We are always hearing about British industry's failures but we did not hear about that. The Government may say that a

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  penalty clause was imposed. Nevertheless, that was work which could have been done by the skilled people of Britain.
  I am not sure that the figures relating to our input into North Sea activity are as accurate as some people seem to imagine. I suggest that the Government look should at this urgently to ensure that British industry is used to service and prepare for the offshore oil and gas extraction that we need.
  Today's debate illustrates what a dreadful Government we have. They are a disgrace. They are concerned about profits rather than people. It is essential that they be replaced by the only sensible and radical alternative. I see that there are no members of the Alliance parties present, although, morally, perhaps a few of them should be here. I hope that in winding up the debate my right hon. Friend the Member for Bristol, South-East (Mr. Benn) will spell out how we intend to command the public support which the Labour movement must command if we are to replace the present Government and give Britain a chance.
  7.41 pm
  Mr. John H. Osborn: First, I welcome the assurances and the explanation given by my right hon. Friend the Secretary of State for Energy. I note that he is not in his place now, but I recognise that he has to leave the Chamber occasionally. I wish him well and I congratulate him on the sound stand that he took not just today but in the statement of 19 October.
  I was indeed invited to the constituency of the hon. Member for Rother Valley (Mr. Hardy), but the warning came too late on that occasion. I still maintain, however, that there are ways of servicing and handling consumer equipment, whether it be gas, electricity or other domestic equipment, other than through a State system. I therefore hope that my right hon. Friend the Secretary of State for Energy and my right hon. Friend the Minister for Consumer Affairs will go ahead as promised in due course, because ultimately the consumer would benefit.
  I have listened to a very interesting and well-informed debate so far today about the Government's proposals to deal with a real problem. Industry in Sheffield and South Yorkshire, for instance, is still concerned at the high price that it has to pay for energy, whether it be electricity, gas or other forms of energy. As the hon. Member for Rother Valley said, in the South Yorkshire and Sheffield area many firms that have been high energy users—not so much in the total sum involved as in the proportion of energy costs, often 20 to 25 per cent., to their total costs represented by energy bills—are finding it difficult to stay in business.
  I recognise that there have been many closures and further redundancies and unemployment in my area. There are various reasons for that, but one is certainly the high price of energy. I have attended many meetings on this subject. We are dependent for our energy upon State monopolies run by successive Governments—over the past 15 years mainly Labour Governments—who have perhaps been too inflexible to realise that it is the market place that establishes where demand lies.
  I am aware that the NEDC is looking into this matter. I asked some questions two weeks ago, and I welcome the fact that we have a report from the Commission of the EEC. One of the hard factors, however, is that industry in Sheffield—particularly electrical steel making—is heavily dependent upon electricity. I have made this point many
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  times. In this country, 80 per cent. of our electricity comes from coal-fired power stations. We recognise that the annual rate of grants is about £550 million. My hon. Friend the Member for Bedford (Mr. Skeet) substantiated further subsidies to the coal industry, and my right hon. Friend the Prime Minister has stated the annual figure as a £1,100 million subsidy. Whatever the figure, a heavy subsidy has gone into coal. Yet coal for electricity in this country is still expensive.
  Those in charge of all of our State industries—and I have never thought that Governments of whatever complexion were particularly good at this—must provide competitive energy as quickly as possible if our industries are to survive. In due time, the clause 4 Labour Party doctrine that Hugh Gaitskell tried to keep out has become part of its national executive's policy. The sacred cow of the right hon. Member for Bristol, South-East (Mr. Benn) has proved to be an albatross in energy matters. I therefore welcome the fact that steps are now being taken to privatise or unscramble one catastrophe perhaps arising from the amnesia of 1974—the ill-conceived BNOC—although, like my hon. Friend the Member for Enfield, North (Mr. Eggar), I wish that the Government had gone further.
  In my early industrial days, when I was mainly supplying the coal industry, I found that a monopoly buyer was very difficult for private enterprise to supply. My experience was in the provision of pit tub wheels, pedestals and buffers to the National Coal Board for its underground equipment before conveyor belts were introduced. The power of a big buyer, let alone of a big State buyer, is a matter of concern to small and medium-sized businesses, and that has always been the case.
  When I entered the House and made my maiden speech on the subject of gas, the ball game was entirely different from the situation today. In 1963, when Sir Alec Douglas-Home became Prime Minister, I visited the United States and chose as my theme "Capitalism at the crossroads: can East and West co-exist? Britain: a case history". I put forward a case for nationalisation—and particularly in relation to gas—as a means of rationalising the many small gas works and the basis for a grid.
  That was then the subject of what we call the North Sea Act, introduced by Lord Erroll when he had ministerial responsibility for this matter. Because I understood the role of the State intervention at that time, I left the economic club of Detroit as the pinkest Conservative that they had ever seen. They were visited a month later by the then right hon. Member for Belper, now Lord George Brown, who left the same club as the bluest Labour Member of Parliament that they had ever seen.
  The large industrial organisation, private or public, if it is not careful, may lack flexibility. It may become insensitive to the needs of the customer. In a private sector activity, however, if it continues to show inflexibility, there will be no customers and those in charge have to take drastic action. The firm may even sell some assets to satisfy cash flow needs. There are examples of this every day in this and other countries. It may also acquire the art of subcontracting work to others who may be better fitted to deal with it.
  That brings me back to the role of gas showrooms and the fitting of gas equipment, although the principle applies equally to electricity. That work is perhaps better given to the private business man as a subcontractor working to standards than forming part of the big organisation. That

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  is why I hope that the proposals of my right hon. Friend the Minister for Consumer Affairs will not be dropped. A public sector company in that position is really a bloodsucker of taxpayers' money. It does not have to react when those circumstances arise. I suggest that that might have been our difficulty with regard to North Sea oil had action not been taken, and it is certainly becoming our difficulty in relation to gas.
  The North Sea has been a huge absorber of capital investment—£20 billion so far, with another £60 billion over the next 20 years or so. Investment is running at more than £2 billion a year, although that may fall off if the other criteria are not acceptable.
  In the 1970s the Government and state of the country were such that Scottish nationalism was very strong. North Sea oil was referred to as "Scottish oil", rather than British oil. To some extent the same can be said about gas. It was considered that those resources belonged to our shores and should be used by all of us. During the mid-1970s I attended energy committees in Brussels as a member of the European Parliament. The political leadership at that time, particularly when there was a British President in office as is the case at present, was such that the oil and gas were always referred to as British. As a result, other European countries looked for other sources of energy, whereas they should have been considered as potential customers of Great Britain.
  Mr. Dalyell: I hope that the Government and Conservative Members realise that by dismantling the BNOC they will give a breath of life to the Scottish National Party. If that is what they want, very well, but they had better be clear that that is what they will do.
  Mr. Osborn: I think that the hon. Gentleman attended the meeting of the energy committee that was addressed by the right hon. Member for Bristol, South-East. He gave the impression that that asset was ours and that Great Britain would decide how to use it. To be fair, my right hon. Friend the Member for Bridgwater (Mr. King), the Minister for Local Government and Environmental Services, who was then shadow energy spokesman, also took that view. Therefore, the chairman of British Gas, Sir Denis Rooke, did not take seriously the idea of a gas pipeline across the Channel to buy and sell gas. In recent years he has concentrated on his statutory obligation to supply Britain's domestic needs.
  One feature of North Sea oil and gas has been the costs of extraction and the capital investment per cubic foot or cubic metre of gas or barrel of oil. It has been said that investment in the North Sea is 10 to 15 times that of similar operations in the Middle East. That is immaterial if world market prices cover that differential. But if the differential between North Sea costs and the world market price were eroded by various forms of petrol tax, such as PRT, operators might well move away from the North Sea. I am sure that the Treasury, like many of us, has received representations from the operators that the North Sea should remain profitable to encourage them to stay.
  The Norwegian situation has been referred to. I was in Norway 18 months ago, and I have attended all-party meetings in the House at which representatives of Statoil have been present. I have kept in close touch with some Norwegian parliamentary colleagues, through the Council of Europe. There is no doubt, even with a new
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  Government, that the Norwegians will go ahead with a new gas line from Bergen to Emden in order to have an alternative option to dealing with British Gas.
  That brings me to the security of energy supply, be it gas or North Sea oil. I have raised this in previous debates. Five or 10 years ago Britain could have promoted the concept of security of supply. We could have persuaded other Community countries that using British gas and oil to a greater extent could help that security. But people in other EEC countries and the rest of Europe have looked to other alternatives. Obviously, it makes sense for them to obtain their supplies from Norway. One project that I have discussed with Soviet representatives and European colleagues is the concept of the Siberian pipeline in respect of which British firms will be subcontractors. Another possibility is to bring natural gas from North Africa to the Mediterranean.
  I shall not touch on the nuclear argument, except to say that energy is cheaper to our European competitors when there is a large hydro and nuclear content in electrcity generation.
  I come back to the concept of self-sufficiency in gas. Great Britain has security of supply, but at an increasing cost. Marginal fields will be operated only if prices of between 30p to 46p per therm are offered. There is, therfore, a certain amount of unease. On the one hand, the Government may have taken too much of the margin, and, on the other, the incentive to extract gas from marginal fields may be too low.
  There has been discussion about the flaring of gas. My information—perhaps the Minister can confirm it—is that flaring is now at a low level and that gas is pumped back. However, there is still the saga of the gas-gathering pipeline. I genuinely thought that the Government would be able to go ahead with this concept with good will from all parties concerned. However, there was the problem of Government guarantees and the possibility that it would involve the PSBR.
  Mr. Tony Benn: A lot is made of the PSBR, but the House must know that this is entirely within the discretion of the Treasury. British Nuclear Fuels, which is 100 per cent. Government-owned, has never borrowed within the PSBR. Therefore, the theory that there is some absolute limit on public investment for essential purposes is a Treasury notion that we accept all too uncritically. I say that in case it helps the hon. Gentleman to stiffen his support for the gas-gathering pipeline and the investment necessary for it.
  Mr. Osborn: I was expressing regret that it did not go ahead at the time, and I said that I understood the problem. My hope and belief is that the industry will sort out its own method of collecting the gas. There is no doubt that the proposed Bill will give it greater encouragement, particularly if British Gas is used as a common carrier.
  Oil industry spokesmen whom I have met feel that British Gas is a monopoly buyer. To bring in the funds with a monopoly buyer that could not give them enough guarantee was an obstacle that I believe drove my right hon. Friend to proceed with the proposed Bill, which I welcome.
  The right hon. Member for Leeds, South (Mr. Rees) spoke about monopsony. I have attended many conferences, and the general feeling is that gas prices should be related to international oil prices. My own view

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  is that perhaps we could circulate oil in Britain at preferential prices. However, everywhere I go I find an acceptance that oil from the North Sea must be bought and sold, and that upstream activities should be subject to international pricing. I accept that the pace is obviously set by OPEC. But, whatever happens, unless the prices and margins are adequate, there is a danger that operators will be driven away from the North Sea.
  Sheffield industrialists have asked me whether we would be able to buy Siberian or North African natural gas it it were to become available to EEC countries. I regret that Britain is not part of a much wider grid, so that when prices are favourable outside the North Sea there is a chance to buy some of that gas, which is probably shortlived—and risky in the case of Siberia. Business operators in this country are seeking every option to get energy at competitive prices.
  Obviously, we are concerned about the coal industry. I mentioned the fact that electricity is 80 per cent. dependent—not the 64 per cent. that I used to quote—on coal from our own resources. Coal-fired electricity is, however, proving expensive, and I therefore hope that we can move into nuclear energy and go ahead with the programme that has already been outlined, so that industry and the domestic consumer can look forward to cheaper supplies.
  My hon. Friend the Member for Enfield, North regretted that there was not room in the newer coal mining areas for private sector activity. He has also mentioned the matter during Question Time. Many of our mining companies and some of the big oil companies are involved in open-cast extraction all over the world and in the deep mining of coal, and have become energy companies. I therefore hope that Opposition Members will not close their minds to the possibility—perhaps with open-cast mining as a start—of this being a free enterprise operation with greater marketability and flexibility than has been shown during the last 35 years.
  I welcome this step, even though it is but a tentative one in the right direction. It must be pushed forward with responsibility, and I look forward to reading the Bills on the matter in due course when the Secretary of State publishes them.
  8.3 pm
  Mr. Lawrence Cunliffe: I always relish the opportunity to participate in debates of this character, especially when they concern energy. I declare an interest as a mining engineer with 30 years' experience in the industry, an ex-NUM official and, currently, a part-time adviser to the National Union of Mineworkers.
  My first duty is obviously to set the record straight and to try to dot the i's and cross the t's on some of the astonishing comments that have been made in reference to the relevance of the Government's financial assistance to the mining industry. First, I wish to deal with the challenge that the National Union of Mineworkers has been disloyal to the nation in its dealings with the Administration and that certain undertakings and obligations were given that were not fulfilled by the employees. I totally refute that.
  Anyone who has experience of negotiating in the mining industry knows that there has always been a set procedure for colliery closures. There has always been an agreement where all parties involved in an industry—from the executives to the junior members of the industry—fulfil their role within the consolidated
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  machinery and participate in it. It is not 100 per cent. perfect. It needs to be altered, and will be altered within the industrial democratic framework when we have the opportunity to do so.
  There is at present a planned, progressive procedure for colliery closures in my area in the North-West of England. The NUM undertook to carry out that exercise. It has its own mining engineers who, together with the board representatives, go down the mines and examine the potential in terms of resources of coal, cost viability and manpower requirements, and an honest and commercial assessment is made by NUM engineers.
  It was stated today that 21 pits would close. but an agreement had already been reached that 10 of those pits would close because no resources would have been available within the next two to five years. The National Union of Mineworkers, and, I am pleased to say, the board, which stood up to the Government when the challenge was made, said that the pits would have to be closed in a humane and compassionate way. They said that the collieries could be carried until a breathing space was found to produce job opportunities or alternative jobs, the transfer of men to more modern and fruitful pits. and so on. That is the normal procedure that the two parties adopt.
  It is wrong to make accusations of the sort that have been made. Examples of progressive pit closures were quoted by my hon. Friend the Member for Rother Valley (Mr. Hardy). A pit in my constituency and another in North Lancashire, in the Harpton Valley, were closed progressively and half the manpower was transferred to other collieries.
  Some hon. Members asked what will be done with the 42 million tonnes of coal on the ground. When the Government set out their financial objectives, whose fulfilment would require greater effort from everyone in the industry, there was a recognition—tantamount to an admission—that they were partly responsible for the recession in the industry and that they would accept their responsibility. It was clearly stated that the £300 million increase in grants—from £250 million in 1980–81 to £550 million in 1981–82—would go a long way to help the NCB offset the effects of the recession. Under pressure from the National Union of Mineworkers, the Government accepted that they had an obligation.
  I should like to know whether the hon. Member for Bedford (Mr. Skeet) accepts the responsibilities, as did the Secretary of State today. I welcome the Secretary of State's comments. It would be helpful if, during the delicate negotiations that are taking place between the National Union of Mineworkers and the board on a future wage increase the Secretary of State could reassure the miners that he stands four square behind "Plan for Coal" and future investment in this long-life industry.
  Do Conservative Members accept the remarks of their Secretary of State today on that issue? If we were to get rid of some of the coal stocks and if the Government accept the principle that they acknowledged under pressure, they should set an example and substitute more British coal. for imports. That is the way to reduce coal stocks.
  The team spirit in the mining industry is better than it has been for many years. The board intends, with the co- operation of the NUM, to try to increase exports from 4½ million tonnes last year to 9 million tonnes by 1982 and to 15 million tonnes by 1985.
  It is worth considering the achievements of British miners and the mining industry over the past decade. The

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  Secretary of State accepted, albeit grudgingly, that there had been an improvement in productivity norms, though he added that they had been disappointing for several years. The truth is that since the strikes of 1972 and 1974 productivity in the industry has risen every year and there will be further increases this year of 5 per cent. in collieries generally and 6 per cent. at the coal face. If the same sort of productivity increases had taken place in private industry the public sector borrowing problems would not have arisen.
  However, because of the Government's crazy monetarist policies we have seen the recession spread like a cancer throughout British industry. I shall suggest later what we should do about the anxiety that is shared by many organisations, from the CBI to local gas consumer councils.
  The Opposition's amendment has been framed in the light of certain elements in the Queen's Speech, including the proposals on the financing of the NCB, the hiving off of our oil assets and the placing of the gas industry in a straitjacket. Those proposals are the usual Tory menu—a mixed grill of monetarist measures which will prove to be another recipe for disaster.
  The Secretary of State asked what all the fuss was about. I will tell him. I thought that even in the energy industries it would be reasonable to predict that it might be possible to make monetarism work. The opportunity presented itself with the £2·7 billion plan for a pipeline to bring gas ashore. That would have provided 3,000 jobs in the steel industry. The project was abandoned in September because of the lack of Government support. The figures can be challenged, but the information available to some of us connected with the energy industries is clear. Natural gas worth £1 million is being burnt off every day in the North Sea. That is a scandal.
  The pipeline, which would have been financed by a mix of private investors, British Gas and the Government, fell through because the Government refused to give the assurances required by the private firms. The reason for the Government's withdrawal seems to have been the Treasury's fears about the scheme's impact on the public sector borrowing requirement. In energy terms that decision is incomprehensible. The British people certainly do not understand it. Letters from our constituents are piling up. They are expressing concern about the assets that belong exclusively to the British people.
  It is estimated that in terms of return on investment the gas pipeline would have proved to be eight to 12 times more cost effective than the Government's proposed nuclear power programme, which will cost up to £20 billion over a 10-year period. It called for boldness, imagination and an entrepreneurial spirit by the Government. They had a glorious opportunity. Instead of paying lip service to the PSBR, and the arguments about inflation and spending more than we earn, they could have invested in the industry to produce the goods. But they have adopted a philosophical approach and we have finished up with the sale of the century. The arch strippers and manipulators are out to get rid of our national assets. It is the same old story.
  The amendment is part of our warning to the Government and those who want to invest in the British people's oil assets. It is becoming clear that when gas supplies go to private operators they will barter and
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  bargain and will be able to sell gas cheaper than the State is able to sell it. In addition, they will be allowed to use the British Gas pipleline in order to do so.
  It is inevitable that at some stage industrial consumers will get cheaper energy and domestic consumers, who have already been hit by the 17 per cent. price increase in April, will have to face massive and soaring price increases. I received a letter recently from a 70-year-old pensioner in my constituency who has given great service to the nation. I sent the letter to the new Secretary of State three days after he had been appointed. I have received an acknowledgement, but no detailed reply. My constituent writes:
  "I am writing to you on behalf of myself and many more people like me. As a single pensioner on the Basic Rate of £27·15p and some interest from savings, but no secondary pension or Social Security, could you please speak up for us in the House of Commons to the Minister of Energy? We find these constant increases in standing charges for Gas and Electricity almost unbearable, plus Telephone accounts."
  She asks why, since two of the industries make profits, one person living alone should have to pay such heavy charges and adds:
  "It is not the Gas Corporation who is to blame, but the Government."
  My constituent goes on to say that as a result of housing subsidies being transferred from the Government to tenants she has had to pay a much higher rent. She adds:
  "I am 70 years of age, and this is my first home. I do get a rent rebate and for that I am thankful. All my life I have been a Conservative, delivered pamphlets, etc., but not any more. This Government has clobbered us more than any other, during the past year, and I say enough is enough. So this winter I will wear two coats instead of one, I do not intend to spend my hard-earned savings in paying more than I need to in gas bills to pour into the coffers of the Government."
  She gave me permission to read the letter. She says that she has worked for the Conservative Party for 46 years.
  The Minister has had the letter for two and a half weeks. I am sure that he will have the common courtesy to deal with it sooner or later and write to me.
  Mr. Don Dixon: My hon. Friend has told us that that old-age pensioner is receiving a pension of £27·15 a week. Does he realise that two years ago the spending power of her pension was £29·50, and that she is now £2·35 per week worse off than she was then?
  Mr. Cunliffe: I agree with my hon. Friend. It shows the plight of the pensioner. Had the Government indexed average earnings to pensions, she might not have suffered in the way that I have shown.
  The issue of gas showrooms has been an extremely controversial one. I understand that many Conservative Back Benchers have expressed deep concern about it to the appropriate Ministers. It is remarkable that Mr. Woodrow Wyatt, a former Member of this House, wrote an article in the Sunday Mirror saying that he could not understand what all the fuss was about. I understand that the Secretary of State has made the same comment. But I can think of 30,000 good reasons for retaining the gas showrooms, because there will be 30,000 jobs at stake if the gas showrooms and the retail services are hived off by the Government as they get even more reckless and desperate in their desire to meet their financial commitments.
  Mr. Rost: The hon. Gentleman appears to be arguing that 30,000 gas showroom employees will be made redundant if the showrooms change hands. Is he

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  suggesting that there is overmanning to the extent of 30,000 jobs, or is he assuming that no one will supply gas appliances or install them in the future?
  Mr. Cunliffe: The gas showrooms have given outstanding service in terms of expertise and safety and have given the most honourable commitment that any service industry could give to its customers. If the Government go ahead with their plan, 30,000 people will be uncertain of their jobs. Knowing how private enterprise functions, I would expect at least two thirds of them to have to join the dole queue.
  Not only the showroom staff are involved. There are the people in the stores where the appliances are kept, the people who deliver them, and the service engineers who install them. There are the people who check the materials, the quality control people, the supervisors, the administrative staff, and so on. With their insatiable appetite, the Government are adding more people to the ever-increasing dole queues. There is no doubt that the British Gas employees all do a specific job within a most successful, modern and efficient industry.
  Many hon. Members will remember when the service side of the industry was a dying industry. The small companies had proved to be inefficient. They were selling what would be regarded today as old-fashioned and out-of-date appliances. The modernisation of the service industry is a wonderful example of what can be done if adequate resources are made available. The industry has had impeccable industrial relations—better than in many private industries. It is no use suggesting that anyone can invest in this kind of service industry and be able to guarantee that everything will be correct in terms of service and safety standards.
  I hope that, for the reasons I have given, the Government will abandon their plan, because it will not find favour with the British people.
  The Government have stated that their main policy is to conquer inflation. It is in the Conservative Party manifesto. It comes out in public statements from the Prime Minister down to the messenger boys at Downing Street. The Government say that they want to conquer inflation and create jobs that will produce the goods that the British nation needs. But the people will judge those promises for themselves. We should be moving towards a position where the North Sea oil revenues are providing the necessary financial aid to stimulate and rejuvenate the British economy. That was the principal objective. Keeping control of resources of this kind is the only way in which we can guarantee that investment will be pumped into the right places at the right times to create the right jobs.
  Our economy is going through a critical period. If further permanent damage is to be avoided, we should take steps immediately to increase public investment in transport, sewers, hospitals, telecommunications, industrial estates and so on. That will stimulate public demand in the private sector and it will bring much needed jobs. We can create real jobs if there is a will and determination on the part of the Government to do that.
  Furthermore, we would be getting a return in the form of increased production, lower unit costs and increased productivity. We could reduce Government expenditure on unemployment benefits, temporary job provision and support for industry. If we have the will to do so, we can
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  strengthen the industrial and social infrastructure that is so imperative to building up a new economy for a new Britain.
  If the Government show some boldness and imagination, and if they accept the exhortations of Opposition Members, we can surely help to renew the confidence and hope of the sorely pressed people of the North-West, whence I come, and the British people as a whole.
  The selling off of essential assets of this sort will be a gross betrayal of the British people, and it will be an act of criminal folly—as in the past—if the Government carry on with this sale of the century.
  I hope that in his winding-up speech my right hon. Friend the Member for Bristol, South-East (Mr. Benn) will say clearly that we shall take back the oil assets that are to be sold off and replace the present policy with a bolder and more imaginative scheme of public investment that can flow forward to create jobs.
  8.31 pm
  Mr. Peter Rost: If the hon. Member for Leigh (Mr. Cunliffe) and some of his colleagues were really concerned about the problems of consumers and of pensioners facing ever-rising fuel bills and struggling to pay them, they would be more sympathetic to the Government's tentative and perhaps rather timid move towards improving the efficiency of the nationalised industries. However, from what we have heard 'from Opposition Members, they are not interested in that. They are far more concerned, as no doubt the right hon. Member for Bristol, South-East (Mr. Benn) will remind us shortly, with airing their blind passion for the virtues of the nationalised monopolies and exercising their obsessive prejudice against private enterprise. So far the oil industry has been the only energy industry that has delivered the goods.
  The hon. Member for Leigh, for example, referred to flaring and told us what a scandal it was. I agree about that. That is why the present Government have cut the amount of gas that has been allowed to be flared in the North Sea. In the context of flaring, the hon. Member told us what a tragedy it was that the proposal to construct the joint gas-gathering pipeline fell through. He blamed the present Government for that, saying that they were not prepared to back it. If it were such a profitable worthwhile venture, private enterprise would have been only too ready to back it. After all, private enterprise is investing more than £2 billion a year in the North Sea, including investment in the construction of pipelines. Private enterprise would have been quite happy to have built that North Sea joint gas-gathering pipeline years ago, and British industry and the consumer would have had the benefit of the gas.
  Why did that not happen? It was because of the British Gas monopoly. British Gas was not prepared to guarantee to offer a fair price to the North Sea oil companies for the gas once it was landed. Moreover, because British Gas had its monopoly powers to buy and to market all gas, there was nothing that the private oil industry could do about it—except to make a plea to the Government, which is what it has done, in the interests of the consumer.
  That is why we are now, at long last, somewhere near to getting legislation that will deal with the monopoly powers of British Gas to buy gas and its exclusive powers to distribute and sell it. I thoroughly support that. I am not happy, however, about the rest of the Government's

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  contribution towards dealing with the nationalised energy industries. We are not yet getting near to the real problems. There is still apparently no intention to change the nationalised energy monopoly that exists in coal and in electricity. Until those two industries are dealt with structurally, we shall not get better prices for the consumer through greater competition and greater efficiency.
  The long-suffering consumer is not only paying higher world energy prices but is also paying more than is necessary because we have nationalised energy monopolies. This burden on industry has made it difficult for us to remain competitive. It has also lowered the standard of life for millions of our people. It is a scandal that we should be the only country in Europe where millions of citizens cannot afford enough heat for comfort. That does not happen in Europe where there has been a more competitive development of energy industries. There, 3,000 combined heat and power district schemes provide heat to the consumer, heat that in this country is thrown away from our CEGB nationalised industry power stations, warming the rivers and polluting the atmosphere.
  On the Continent, there has been the development of independent utility systems that provide some yardstick of competition. The same happens in the United States. Until the electricity industry is at least developed into autonomous regional authorities so that one region's performance can be judged against another's and its efficiency assessed, no form of commercial or competitive disciplines will be introduced to that industry.
  It is a nonsense that the coal industry today should still be a 100 per cent. nationalised monopoly. Few hon. Members would argue that there was not full justification on political, social and even economic grounds for nationalising the coal industry in 1946. Those arguments no longer stand up to investigation. It is nonsense that companies like BP should have to buy coal reserves and assets in the United States and Australia in order to use their expertise to mine coal, and that they should be prohibited from doing so in this country. It is nonsense that companies like ICI that might want to be major consumers of coal are priced out of the coal market because the National Coal Board, as monopoly supplier, is not prepared or able to supply large potential customers at reasonable prices. It has to subsidise the low-cost coalfields with their uneconomic pits in order to average up the price, which means that it is higher than the price at which our competitors can obtain coal. The result is that the market for coal is not expanding as it should.
  There has been mention during the debate of the coal stocks that exist in this country. This is not an argument for reducing the production of coal. It is an argument for reducing the price of coal. If the price of coal was reduced through allowing more competition, we would get greater efficiency and higher productivity. The economy as a whole would benefit. Anyone who disputes that argument will also no doubt dispute that competition in airway tickets has produced lower air fares. It is unacceptable today that the National Coal Board should have a stranglehold over the mining and marketing of coal. That is not in the interests of miners, although they may think that it is. They may have been indoctrinated by Left-wing politicians into believing so. It is no more in their interests than it was in the interests of people working for the BBC
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  to believe that the BBC monopoly was in their interests. They now know better, because they have an alternative independent employer to go to.
  The same argument applies to the whole range of our economic activity. Where there is a monopoly there is a monopoly employer, too. That is not in the best interests of the employees. Some of our new coal reserves should at least be allowed to be explored in the same way as oil companies can explore for oil reserves in the North Sea. They could then be licensed and developed by those mining companies which have world-wide expertise and believe that they can do a good job and perhaps produce the coal more cheaply than the National Coal Board—possibly paying the miners a higher wage than the coal board can because of its high overheads and, to put it politely, its slightly bureaucratic structure.
  What applies to the National Coal Board also applies to the electricity industry and British Gas. Until we tackle these nationalised monopolies, instead of just selling off a little bit of the British National Oil Corporation's oil interests and just taking away the oil from British Gas, and until we tackle the fundamental structures and restore genuine commercial disciplines through competition, we shall not give the consumer competitive energy prices, and our industry will continue to be penalised compared with other countries which have adopted a more radical approach to the problem.
  Although many of my colleagues have spoken about some of the problems of British Gas, it has probably not been realised that those of us who believe that breaking the monopoly powers will benefit the consumer are assaulted from the Opposition Benches with the argument that all it will mean is a higher price for gas. That is absolute nonsense. The price that the consumer is paying for gas is higher now than is necessary. If British Gas had not had such a monopoly power to buy, there would have been an incentive to develop more gas in the North sea. What happened? British Gas was not prepared to pay a fair price to stimulate that investment. The fields have been discovered, and there are masses of the stuff, but no one wants to invest in bringing it ashore because British Gas has not been prepared to pay the price.
  Now there is a shortage of gas. Industry is being rationed on a very selective basis, and we are importing one-third of our gas from Norway. We are not getting that gas cheaply. We are having to pay the world price for it. It is costing us many hundreds of millions of pounds.
  Meanwhile, we could have developed gas more cheaply in our own North Sea sector, and the consumer would have benefited. There would have been more competition because alternative sources of supply would have been opened up. In my view, that would have been to the advantage of the consumer and of the North Sea oil and gas development industry as a whole.
  The Government should consider again the alternative proposal that was suggested by Sir Denis Rooke. We understand why he wants to preserve his monopoly, but that monopoly must not be allowed to buy exclusively. Once British Gas trades in a competitive and commercial climate, which could happen if the monopoly were broken, there is an argument for saying that British Gas should be allowed to make its own commercial decisions about whether it wants to sell assets, whether those assets are to be the showrooms, and whether it wants to keep some of its oil interests or trade them off for gasfields.

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  If part of the equity of British Gas were sold to the public in the same way as half of British Aerospace and half of Cable and Wireless have been sold—and as we shall sell half of BNOC—the management of the BGC would be forced by commercial considerations to use its assets to the best advantage. If 900 showrooms did not produce a good return, shareholders would soon demand that some of them were sold. Shareholders would ask whether it would not be more profitable to sell the oil interests in the North Sea and buy more gasfields. As a result of the profit motive, shareholders and management together would decide how best to maximise the efficiency of the operation.
  No doubt the right hon. Member for Bristol, South-East will tell us that that will benefit only a minority of asset strippers. However, it would benefit the consumer and the public. In addition, it would benefit those who could buy shares in British Gas, including its employees and many hundreds of thousands of people in Britain. The taxpayer would also benefit because, as a commercial operation, the BGC would pay a proper share of taxation, just as the oil companies do. The Government would benefit because, as a 50 per cent. shareholder, they would receive not only their share of taxation but their share of dividend as a proportion of profit.
  I hope that the Secretary of State will reconsider that solution, even at some later stage. I hope that we shall privatise the British Gas Corporation as we shall privatise other companies. Unless we tackle the other nationalised energy monopolies—coal and electricity—we shall be only starting on the problem of providing our energy at a competitive price and of securing adequate supplies through fair commercial disciplines and proper competition. Unless we do that, the economy, consumers and industry will be penalised through energy prices that are higher than necessary. Goodness knows, our competitive position has enough handicaps without landing ourselves with the additional unnecessary handicap of higher energy prices than our competitors merely because we refuse to face up to the structural changes needed in those energy monopolies.
  8.47 pm
  Mr. Frank Haynes: At the beginning of the day the Secretary of State wanted to know what all the fuss was about. From this side of the House the message has gone out loud and clear. There is no doubt that the Government are suggesting the privatisation of certain energy industries. It is obvious that the Secretary of State will not come clean tonight. He says that we shall have to wait until the Committee stage to find out the details.
  I am a little incensed at some of the things that Conservative Members have said, particularly about the mining industry. Many Conservative Members contribute to every energy debate and talk about the mining industry, but they do not have a clue what they are talking about. If they had used a shovel for a year or two they might understand what pit work was all about. I shall give Conservative Members an opportunity if they want to chuck a stint on. I shall work alongside and show them how to do it.
  The Bill will rape the British people. The Government are once again selling off the assets of the British people. Yes, they are asset-stripping. Does the privatisation of oil mean that if the Russians make the highest bid they will get it? That would take the smiles off the faces of
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  Conservative Members. We must be sensible about this. I do not believe that the Government are being sensible about it. The profit motive always operates when a Conservative Administration are in office. They are raping the British people in the interests of a few and lining their own pockets.
  Mr. George Foulkes: Is my hon. Friend aware that the hon. Member for Gosport (Mr. Viggers), who asked the question on 19 October, and to whom the Secretary of State announced his sell-off., is a director of an oil company and therefore has a vested interest? Is that not typical of Conservative hon. Members?
  Mr. Haynes: I agree with my hon. Friend, although he has gone further than I wanted to go. There are a number of oil barons on the Government side. We have talked about the oil barons for a long time in the mining industry, and in my constituency. They are raping the British people. One has only to look at petrol prices to see the profits that the oil companies make, but prices continue to rise.
  The argument about energy prices put forward by the Government Front Bench is a fallacy. I met representatives this week from a firm in my constituency which Is in serious difficulty because of energy prices—not oil or coal prices, but gas prices. The Government have been responsible for shoving up those prices every year that they have been in office, and that will continue until we get rid of them.

  The Government thrash the mining industry at every opportunity. I worked in that industry for many years. When I joined, it had a work force of 1¼ million. The miners have always made their contribution when the nation has called upon them, and they will continue to do so. It is wrong to stand up in the House and criticise the mining industry after the marvellous efforts made by the people in it. They will not like it when they read about it. It is unfair to criticise them when we should be giving them all the encouragement in the world to produce more coal. They do that anyway, although numbers in the industry continue to fall. Despite that, productivity increases. It has increased twofold, and more coal is being produced with less manpower.
  Nobody mentions the restrictions on finance for the National Coal Board. During the recess I visited a pit in my constituency. On the day of my visit no coal was produced from the coal face because of restrictions forced on the management by a lack of spare parts. A machine was broken and there were no spares to enable it to be put right. The management had to go to another pit to find the necessary spare parts. The parts had to be transported to the face before the conveyor could be restarted.
  We are not fair to the mining industry. I hope to serve on the Committee when the Bill goes upstairs—although I am not making a bid for that. The Secretary of State will probably not be there. He will leave that task to the Under-Secretary of State for Energy, the hon. Member for Croydon, Central (Mr. Moore). The hon. Gentleman has a real understanding of energy. He has a particular understanding of the mining industry. He makes it his job to find out what that industry is about. I know from what he has said to me that he understands. I have no doubt that he will have the responsibility in Committee.
  We want some answers. We have been told that we shall not have those answers tonight. Because of what has

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  been said today I have an awful feeling that privatisation of the mining industry will occur. If that is so, I give fair warning to the Secretary of State that he must look out. Members of the British Association of Colliery Management and the National Association of Colliery Overmen, Deputies and Shotfirers will stand four-square with the National Union of Mineworkers to beat the Government in their proposals for privatisation. The message is loud and clear to the people in the industry. The message is "Watch what is going on and at the appropriate time the Government will have to change their mind."
  Today's debate has been good. The Opposition Front Bench has the opportunity tonight to tell the. Government in no uncertain terms what we mean to do about the situation. Let the Government make no mistake. We shall fight tooth and nail to beat the Government in Committee.
  8.56 pm
  Mr. Michael Morris: I have listened to many useful contributions by hon. Members with a deep knowledge of the industry. I shall make three points in the few minutes available. I come from industry and I view energy policy in relation to how it affects British industry. Like it or not, in his energy policy the Secretary of State has to create a price level for British industry which leaves it competitive with the rest of the world. I do not mind which way my right hon. Friend achieves that. He has a responsibility to ensure longevity in the use of our natural resources. If we are to price ourselves in relation to world markets my right hon. Friend must find a reduction in taxation to ensure that heavy users of energy can buy their energy at a price which is competitive with prices charged to their competitors in the Western world. In that context, I hope that the Secretary of State will not forget the examples of Germany, France and Italy where incentives are given to industries which save energy. It would be a welcome change if some incentive were given to industry which saves energy here.
  The multinationals serve a useful purpose. They are a dynamic element in our society. What they do is of great benefit to the capitalist world. They look for a consistency of policy and a clear strategy from Government. The Secretary of State's proposals represent the beginnings of a consistent and clear policy. I commend them wholeheartedly to the House and the multinationals. I speak as a representative of an East Midlands industrial town and I believe that the British Gas Corporation has not served well the major industries in my constituency. British Gas has failed to supply those industries with gas at a price that they believe is competitive with their other units in Western Europe. In that context, the comment of the right hon. Member for Leeds, South (Mr. Rees) that privatisation of gas supplies will put prices up is unrealistic. No industrialist believes that that will be future policy.
  The Secretary of State should go forward with his policies. Those policies, provided they give us competitively priced energy, are the sort of policies that British industries want. I give him my fullest support.
  9.1 pm
  Mr. Tony Benn: I congratulate the hon. Member for Croydon, North-West (Mr. Pitt) on his maiden speech, which was well received by the House.
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  It was clear from what he said about unemployment and the problems of the area that he represents that his main interest, like the interest of the official Opposition, is to use the revenues to try to restore full employment in our public services.
  I wish to make one point clear at the outset, lest the debate leave it out of account. The Government's proposals to sell key parts of the nation's precious oil and gas reserves and any proposals they may have for the mining industry will be bitterly resisted by the Labour Party and the trade union movement, both inside and outside Parliament. The General and Municipal Workers Union made that clear about the proposed sale of the gas showrooms. The Cabinet's plans pose a grave threat to the national interest, and to Britain's long-term industrial and economic future.
  The Secretary of State asked what all the fuss was about. I can answer that by trying to compensate for one of the thinnest speeches I have ever heard from a senior Minister on a major subject.
  I begin by setting the argument in its proper historical context. I do not know what the Secretary of State has been doing during the past few years, but has he not noticed that the energy crisis has dominated world politics for 25 years since Abadan, Suez, the Six-Day War and the OPEC price increases which introduced great economic instability? There is an enormous American build-up in the Middle East because they need Saudi Arabian oil. We read today that Mrs. Gandhi has been driven to the International Monetary Fund by the high price of imported energy. Does the Secretary of State not understand that the British saw and see in North Sea oil and gas a hope for Britain's security, for supplies at a favourable price and for the enjoyment of the benefits of those revenues? That is what lies behind the Opposition's amendment. I shall come to the right hon. Gentleman's speech in so far as it merits an answer.
  Britain is in a unique position in that it is the only country in the Western world—not just in Europe—that is self-sufficient in coal, oil and gas, and has unrivalled skill in the deployment of those resources. For 70 years successive Governments of different political persuasions have gradually developed a consistent energy policy.
  That policy did not begin with the Labour Party conference. It began in the House of Commons on 17 June 1914, when Winston Churchill brought the Anglo-Persian oil company into public ownership. He was then a member of the Liberal Party. I shall tell the new hon. Member for Croydon, North-West what Winston Churchill said on that occasion. He was talking about oil. At that time Britain had no oil, but there were oil concessions in Persia. He said:
  "We recognise in it"—
  that is, the concessions—
  "the best source from which we could obtain the best kind of oil. We knew that it was in constant danger of being absorbed by some other combination and welded into an ever-widening price ring. We knew that by our contract we should confer upon the Anglo-Persian Company an immense advantage which, added to their concession, would enormously strengthen the company and increase the value of their property. If this consequence arose from the necessary action of the State, why should not the State share in the advantage which we created? If, in any case, we had to go so far, why should we not go a step further? Was it not wiser, was it not more profitable on every ground, naval, financial, and indeed equitable, to acquire control of an

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  enterprise which we were bound to help and bound to enrich, which we alone could sustain, and on which, to a large extent, we must rely?"—[Official Report, 17 June 1914; Vol. LXIII, c. 1140.]
  That is the case for the public ownership of our resources. Every Government, whether Labour or Conservative, have followed that line and brought into public ownership electricity, gas, and coal. Conservative Members talk about private enterprise. The atomic energy industry would not have built a single power station in Britain if it had to rely on the profitability of its investments. There has been a progressive expansion of national ownership in gas and oil. There have been huge investment programmes and the necessary legislation.
  I turn to the three industries whose futures we are discussing. First, I shall deal with the coal industry—the foundation of the first industrial revolution. There are 300 years of coal reserves at our present rate of consumption and with existing technology. There is a possibility of 1,000 years of reserves with further developments. We need coal for the new technologies of fluidised bed combustion, for conversion to electricity, gas and oil, and for feed stock.
  I hear Conservative Members speak, without anyone gainsaying them, about nationalised industries. I shall give the House the latest figures. The cost of production of coal in the nationalised British pits is £35 per tonne. It is £44 in the private pits of West Germany, £45 in the private pits of France and £61 in the private pits of Belgium.—[Interruption.] Let me develop my argument. Belgium pays a subsidy of £27 per tonne, France £15 per tonne, West Germany £12 per tonne and Great Britain £1·40 per tonne. We have the most efficient mining industry in Europe. Our productivity has been rising consistently. As my hon. Friends the Members for Leigh (Mr. Cunliffe) and Ashfield (Mr. Haynes) said, the anxiety of the mining industry is that there will be a desire to privatise the open-cast coal mining. That would be resisted by the whole of the mining industry, and rightly so.
  The reason that there is a great deal of coal on the ground is that the Government have solved the energy crisis by mass unemployment. If there is no demand for energy, there will be an accumulation of unused coal on the ground. It is absolutely essential to maintain a strong and powerful mining industry.
  I turn to the gas industry. The British Gas Corporation was established not by a Labour Government, but by the Conservative Government headed by the right hon. Member for Sidcup (Mr. Heath). The BGC converted Britain to natural gas from town gas. Pipelines were built and contracts that were highly favourable to our consumers were signed with oil companies. We have heard much talk of monopsony in the debate. During the past 10 years world gas prices have risen 300 per cent. in real terms. The 550,000 British industrial consumers have had a price increase of 25 per cent.—not 300 per cent. The 15 million domestic consumers have had a 25 per cent. reduction in real gas prices simply because British Gas has been able to buy all the gas from the oil companies.
  The introduction of oil and gas for premium purposes was phased to correspond with supply. There has been a careful depletion policy for the security of supplies. There has been successful exploration as a North Sea partner and on-shore at Wytch Farm, which is now to be sold. British
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  Gas is highly profitable to the Revenue in an age when the Government say money is supposed to be so important. The BGC has immense skill and expertise.
  I wish to show the safety record of British Gas in the installation of gas equipment. The published figures for domestic installations reveal that if consumers choose private contractors to install their gas appliances the risk of accidents is 15 times greater for gas fires, 30 times as great for water heaters and 36 times as great from faulty workmanship. The Government are perfectly happy to sell off to private "cowboys" and to disregard the safety factors which make British Gas so highly regarded.
  If the assets are sold as a forced sale with a value of £300 million to £500 million, they will appreciate substantially as gas prices rise. The oil companies are now demanding from British Gas a 36 per cent. increase. Once they have the right to hold the British consumer to ransom, they can impose that 36 per cent. increase and further rapidly deplete the fields. There will also be increased exports of gas for short-term gain and a loss of revenue abroad. The problem of shared pipelines poses serious problems for the British Gas Corporation.
  When the previous Conservative Government were in power they handed over enormous blocks of North Sea oil. That damaged our chances of developing the supplies fully. The Government granted 46-year licences without capacity to recall them for renegotiation. They introduced such poor petroleum revenue tax provisions that the Public Accounts Committee estimated that £1 billion was lost.
  The last Labour Government set up—it was started by my right hon. Friend the Member for Chesterfield (Mr. Varley) and continued by myself—BNOC. We uprated the petroleum revenue tax, developed the participation oil scheme and arranged for BNOC to advise us in our conduct of relations with the multinationals, which are powerful organisations. BNOC now controls two-thirds of oil disposal and 70 per cent. of oil is delivered while only 40 per cent. in general goes to refineries. The BNOC is a partner in 45 per cent. of the operations. Its profits are over £300 million this year and are due to rise to £500 million.
  Enormous revenues will accrue to the State as a result of the oil policy of the previous Labour Government. Let us not think that to have private capital it is necessary to have private ownership. BNOC floated the most successful Britoil issue as part of a 100 per cent. company. Do not tell us that the PSBR requires that ownership because BNFL, which is 100 per cent. State owned, has never been within the PSBR. It would be perfectly possible for BNOC to be exempted.
  BNOC is now to be split. Its advisory role has gone and its exploration side, which used to be the most profitable, is to be made a private majority holding. The trading side, which is most uncertain, is to remain within the State area. I warn the House of the value of the assets that we are being invited to alienate. I invite the House to consider what has happened to the price of oil over the past 10 or 11 years. In 1970 oil was $1·80 a barrel and today it is $32·50. In real terms, allowing for inflation, the real price of oil has increased 613 per cent. in 11 years.
  The recession has slowed down the growth in the oil price. However, does any hon. Member, when looking at the Middle East and considering the consequences in Saudi Arabia should one prince die, appreciate the effect on the supply of oil? Can anyone be sure that the oil assets to be sold next year will not appreciate by the same percentage

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  in the next 10 years, with all the speculative gain to be handed over to those who buy them? That is why we are against this policy. We have a responsiblity to ensure that we do not deplete the oil too rapidly.
  The forecast consumption of oil in the 1980s is about 90 million tonnes a year. Production could rise to 150 million tonnes a year. If we deplete rapidly, there will be enormous profits for the oil companies but the oil will run out in 30 years instead of 50 years. Any OPEC oil Minister will say that the oil that is left in the ground will form the true future assets that will be developed later and used for industrial development.
  The Secretary of State talked about wasteful flaring in 1979. He knows—if he does not, perhaps his office will tell him—why flaring increased in 1979. With the disappearance of Iranian oil it was necessary to go for maximum North Sea production. The right hon. Gentleman was badly briefed or he poorly understood the brief that was given to him.
  Mr. Lawson: It is the right hon. Gentleman who is poorly briefed. He said on some radio or television programme, I am not quite sure which—[Interruption.] I am not sure whether it is being alleged that he tells one story on one programme and another on another programme. He said to the British people—this was untrue and he knew it so to be—that the sale of BNOC would remove controls on flaring. He made absurd suggestions to the effect that the situation would be rather like that which prevails in Iran if we were to sell BNOC. He knows that the control of flaring had nothing to do with the ownership of BNOC.
  Mr. Benn: The right hon. Gentleman has been caught out and he does not put it right by misquoting me on radio or television. The purpose of setting up the gas-gathering pipeline committee was to collect and to use the gas that would otherwise be flared. When I warned that by cancelling the gas-gathering pipeline we would burn gas that we needed—
  Mr. Eggar rose—
  Mr. Benn: No. I have already given way on several occasions and I have many more issues to raise.
  The right hon. Gentleman has never told us who he thinks will buy the oil and gas. The idea is floated that grannies will go to post offices and trade in their pensions for a few oil-linked bonds. I will tell the right hon. Gentleman who will buy what he is about to sell. Our oil will be bought by American multinationals. They will want to buy because they cannot rely on Saudi Arabian supplies given the uncertainty in the Middle East. Secondly, the oil will be bought by Common Market countries which have little oil of their own. They will invest heavily in the North Sea. Thirdly, the Arabs, with billions of petrodollars at their disposal, will buy the North Sea for themselves.
  The right hon. Gentleman has misled the House. He has read an article that appeared in the Financial Times by Sam Brittan and he seems to think that if he gives away or sells oil-linked bonds the oil will be ours. The oil will be bought by those who need it and who have the resources to buy it. They will then be able to control a great deal of the disposal of the oil.
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  Our oil refineries will be further threatened. We have seen the closure of the Isle of Grain refinery and the closure of Ellesmere Port. Only 40 per cent. of the oil is refined in the United Kingdom. We are importing refined products already. We need downstream development. More refining should be done in the United Kingdom. We want the jobs that would go with it as we need the jobs associated with the gas-gathering pipeline.
  The right hon. Gentleman should tell the House more candidly the true nature of the multinationals' role. Winston Churchill was ahead of OPEC in his purchase of an oil company. Why is it that the OPEC countries—for example, Saudie Arabia, Iran, Iraq, Qatar, Nigeria, Mexico, Norway, Denmark and France—have State oil companies? They know what the right hon. Gentleman will not admit, that security of supply is of critical importance to every modern industrial country.
  When I heard the right hon. Gentleman reciting his statutory powers and asking us to believe that no oil could be found, dug up, landed and exported without his permission, he reminded me of King Canute with the Royal Charter, sitting by the Channel and saying that he could control it, although allegedly in the story he said that he could not do it. The statutory powers of the Secretary of State for Energy mean absolutely nothing if he does not have a powerful public sector to advise and defend him.
  The right hon. Gentleman never mentioned the role of the Common Market. Under the Treaty of Rome, as he must know well, he will have no powers to prevent the sale of those assets to any Common Market country. When I was Secretary of State for Energy three years ago, the Commission challenged under the Treaty the landing right for oil that we insisted on and that the right hon. Gentleman said he would maintain. Viscount Davignon challenged the right of British Gas to have a monopoly of gas operations here. The Common Market tried to force refinery closures. The plain truth is that the right hon. Gentleman is putting our oil on the market. It will be bought primarily by Common Market countries which do not have their own oil.
  Before I come to my proposals, I shall summarise what the right hon. Gentleman is doing. He is threatening our supplies, pushing up the price, undermining our depletion policy, costing us jobs, losing us revenue and threatening the money that we need for reindustrialisation. The reason why he is doing it is evident. The other part of the policy is to sell our assets for private profit, including the National Freight Company, British Airways, British Aerospace and Cable and Wireless. On what will the Government spend the money? If they raise £2 billion, that will pay only one fifth of their Trident nuclear programme. That is where the money that they raise may go.
  As a major energy producer, this country needs a long-term, integrated national energy policy to safeguard—[Laughter.] The hon. Member for Enfield, North (Mr. Eggar) laughs, but there is not an oil producer in the world which has not already worked out such a policy. We need to safeguard and develop our reserves, harmonise investment and use the revenues to build up manufacturing industry so that, when the oil runs out, there will be an industry to sustain our living standards. We should re-establish the Energy Commission, provide the necessary statutory powers, reacquire without compensation all the assets to be alienated by the Government—
  Mr. Eggar rose—
  Mr. Skeet rose—
  Mr. Benn: I shall not give way.
  Several hon. Members rose—
  Mr. Speaker: Order. It is clear that the right hon. Gentleman wants to continue his speech without giving way.
  Mr. Eggar: On a point of order, Mr. Speaker.
  Mr. Speaker: It can hardly be a point of order at this stage.
  Mr. Benn: That is the policy of the Labour Party on the question of the reacquisition of the assets. Both at the TUC congress and the Labour Party conference last year, when the right hon. Member for Plymouth, Devonport (Dr. Owen) was our energy spokesman, we—[Interruption.] The right hon. Member has move, to what he thinks are richer fields, but at any rate as recently as last year he warmly welcomed what he called the new and exciting policies contained in the document that called for the reacquisition of public assets without compensation. That is the policy of the Labour Party.
  I further add, as the right hon. Gentleman properly raised the matter in his speech, that it is the long-term policy of the Labour Party to bring all oil into public ownership, including BP. That is the commitment that I accepted as Secretary of State for Energy. Many of the OPEC countries converted the oil companies from being concessionaires to being contractors. As a result, they own the reserves, have the oil supplies and can guarantee that they will be used.
  Mr. Skeet rose—
  Mr. Benn: The hon. Gentleman will forgive me if I do not give way. I am anxious to respond to the remarks of the hon. Member for Leigh and others. I wish to present the alternative view that we support, and particularly to deal with a maiden speech in which a clear appeal was made by a new Member for a return to full employment and the development of our services.
  We shall establish an investment fund, built up from North Sea revenues, money from the financial institutions and defence savings. It will be devoted to energy investment, to downstream investment in petrochemicals and manufacture, to the development of public investment with public accountability and appropriate public ownership, and to the development of essential services in housing, schools and hospitals.
  Anyone who talks about full employment, knowing that we shall inherit a total of 5 million people out of work, without contemplating the enormity of the investment required to return to full employment is simply misleading the public. As our strategy has made clear, this will be buttressed by price controls, exchange controls, the planning of our trade, and withdrawal from the Common Market which is a threat to the development of those strategies.
  Mr. Lawson: The right hon. Gentleman has made a number of very important statements. As I understand it, he has committed his party to renationalisation without compensation of all assets that are privatised and to the total nationalisation of the oil companies and a number of other things. Is that the position of the Opposition? Is that the policy of his right hon. Friends on the Opposition Front Bench?
  Mr. Benn: The right hon. Gentleman asked me to tell the House in winding up the debate what is the policy of the Labour Party on these matters. Every one of the policies that I have cited today is a published statement of the Labour Party to which I as a Member of Parliament subscribe and which I support.
  Finally, I believe that the Government proposals are a massive betrayal of our national interest, against which the activities of Burgess, Maclean, Philby and Blunt are very minor matters. That is the strength of our feeling on this matter. I hope that those who have seen in North Sea oil a chance to escape from the recession and the tragedy of our destroyed manufacturing industry will help us to protect the nation's future. It is no source of pride to any Member of the House that in the past week British Leyland workers have been blackmailed into accepting a wage cut while in the City of London shares in Cable and Wireless, which was built up by public money, were being sold at a premium of 37p.
  I do not believe that the hon. Member for Enfield, North is in any way doctrinaire. He would not understand a doctrine if it were shown to him. If he were shown the Ten Commandments, he would close five of them. We are witnessing from the Government class politics of a kind not seen in Britain for 50 years. We shall fight that policy. We shall campaign on the alternative that I have described and we shall reverse the Government's policy in favour of constructive policies for our people.
  The people of Britain, the oldest industrial country in the world, deserve better than they are getting from the present Cabinet. We shall ensure that they get a system of control of their assets that allows us to develop our country for the benefit of ourselves and our children.
  9.30 pm
  The Minister of State, Department of Energy (Mr. Hamish Gray): I join the right hon. Member for Bristol, South-East (Mr. Benn) and others who have offered congratulations to the hon. Member for Croydon, North-West (Mr. Pitt) on his maiden speech. The hon. Gentleman is indeed acceptable to the House. However, having listened to the debate I am sure that he will find it extremely difficult to go into the Lobby with the right hon. Gentleman. We are, however, in some difficulty. For example, for whom does the right hon. Gentleman speak? Is he speaking for himself, the Labour Party, the national executive of the Labour Party or is he just having a general kick-around?
  I congratulate the right hon. Member for Bristol, SouthEast—I get my priorities right—on overcoming the serious illness that laid him low earlier this year. I suggest that we also welcome his return to the Opposition Front Bench.—[HON. MEMBERS: "Hear, hear."] I am sure, Mr. Speaker, that you will agree that the right hon. Gentleman has lost none of his eloquence or charm, but he said nothing that any other member of the Shadow Cabinet could not have said.
  Why is the right hon. Gentleman there? We all know that the Leader of the Opposition has had a rough week. My goodness, opinion polls and flag poles have not been his best moment. But we can understand his problems. It is not flattering for a Leader of the Opposition to trail a miserable third in the opinion polls. That hardly suggests that there is any great enthusiasm in the country either for

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  his policies or his generalship. Perhaps I should not call him a general, becuase with the current rate of desertions from his party, who would want to be be a general?
  Mr. Michael English rose—
  Mr. Gray: At least I am being more flattering to the right hon. Gentleman than some of his hon. Friends have been. Obviously, he does not think much of his Front Bench support when he decides to recall the right hon. Member for Bristol, South-East.
  It is good and right that the right hon. Gentleman is there. It is right that the country should know exactly what the Oppostion Front Bench thinks and says. Whatever criticism we may make of the right hon. Member for Bristol, South-East, we can never accuse him of being anything other than frank. He has certainly been frank tonight. His former threats to nationalise North Sea resources are as real today as they ever were. It is little wonder that so many of his erstwhile friends have decided to join another party.
  Mr. English rose—
  Mr. Gray: The right hon. Gentleman was rightly concerned about the "Britishness" of the new BNOC exploration company. Our aim is to establish a dynamic new British exploration company in which the British public will have a real share. We shall ensure that the new company's articles of association contain such safeguards as are necessary to prevent a takeover bid that would not be in the national interest.
  The right hon. Member for Leeds, South (Mr. Rees) and the hon. Member for Dunfermline (Mr. Douglas) raised several points. The right hon. Member for Bristol, South-East was a member of a Labour Government who sold no less than 17·3 per cent. of BP shares in 1977, and he was also a member of an earlier Labour Government who reduced their holding in BP to 48 per cent.—a holding below the 51 per cent. that has been so close to the right hon. Gentleman's heart. We must assume that that was one of those occasions on which he found that collective responsibility was acceptable.
  My right hon. Friend the Secretary of State has described the Government's plans for the North Sea oil interests of the BNOC and the BGC. He has set out the facts—facts that answer many of the criticisms levelled against our proposals. It is unfortunate that Labour Members have chosen to ignore those facts, and have persisted in pursuing ill-founded arguments.
  Much discussion has centred on the BNOC, so let me begin there. The legislation that we shall introduce has straightforward objectives. It will allow the introduction of private capital into the corporation's oil-producing business, the transfer of that business from the public to the private sector and the creation of a new, independent oil company based on the North Sea. Our purpose is to fulfil the pledge given to the British people that they should have the chance to share directly in the oil wealth of the country. My hon. Friend the Member for Enfield, North (Mr. Eggar) rightly suggested that there should be the widest possible distribution. Of course we agree with what he said. By doing that we shall remove another large area of unnecessary State involvement in the economy.
  My hon. Friend the Member for Exeter (Mr. Hannam) supports reliance on private capital rather than on the
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  Treasury. The defenders of State intervention and State monopoly would like the Government to have a finger in every pie. They wish to preserve and expand the public sector, with its stifling influence and inevitable inefficiencies. An industry that is successful—as is the BNOC—is thought to vindicate all those that are not.
  We disagree. There is no room for State ownership in industries that are already doing a good job. The oil industry is a classic example. It was private enterprise—the right hon. Member for Bristol, South-East should realise it, because he was Secretary of State during much of the time when the first oil came ashore, and thereafter—that discovered the potential of the North Sea, and it was private capital that brought the oil ashore. The private sector oil companies have invested billions of pounds in the United Kingdom, both offshore and onshore. They have created many thousands of jobs—there are at present more than 100,000 jobs connected with the North Sea—and they have paid fair wages and fair taxes in support of the public sector. Above all, they have made this country self-sufficient in oil, working in one of the most hostile environments in the world. Yet we are supposed to believe—if we listen to the right hon. Gentleman—that all this time the private sector has been working against the national interest.
  The private sector continues to be the decisive factor in the North Sea. Indeed, it virtually is the North Sea. [Interruption.] Opposition Members would laugh on the other side of their faces if the jobs in their constituencies were not there—jobs that are provided by the private sector. It provides 90 per cent. of current oil production and holds nearly 80 per cent. of licensed exploration acreage. It is by far the major source of our oil wealth.
  My hon. Friend the Member for Bedford (Mr. Skeet) reminded the House of his participation in the Petroleum and Submarine Pipe-lines Bill 1975. Although the amendment to which he referred was not accepted at the time, he will be delighted that we are now going some way towards doing what he wished.
  Mr. Skeet: As private enterprise has been so successful, why does my hon. Friend not follow the French experiment—CFP and Elf Aquitaine both have private investment—and allow private investment in the parent company, the BNOC?
  Mr. Gray: I remind my hon. Friend that the object of the parent company is to ensure our security of supply and to act as the trading arm. I shall say more about that later.
  The BNOC's equity share of our oil resources is relatively small, representing no more than the production of one medium-sized oilfield. Considering that we have 17 fields in production, it is nonsense to talk of selling the North Sea, let alone the nation's birthright.
  We see no reason why the BNOC's oil-producing business should remain in the public sector. On the contrary, there are good reasons why it should be trasferred to the private sector. The corporation has been in existence for nearly six years. In that time many teething problems have been overcome and it is now an established oil company, with skills and potential. I, too, pay tribute to the corporation and its staff. It has had three distinguished chairmen, Lord Kearton, Mr. Utiger and Mr. Shelbourne. Each in his own way has made a vital contribution. I know the high esteem in which the right hon. Member for Bristol, South-East holds Lord Kearton,

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  and it is significant that Lord Kearton feels that the steps that we are taking are right and are the best way of furthering our interests in the North Sea.
  After a period of consolidation, the corporation is rightly looking to expand. In common with any other oil company in the same position, it wants to build on success and to see its potential fully realised. That calls for investment and the freedom to seize opportunities when they arise.
  Mr. Dalyell: The Minister rightly paid tribute to the staff of the BNOC, and we have come to admire their expertise. But the hon. Gentleman was asked for an assurance about the future of those who have made their homes in Glasgow. Can he give that assurance?
  Mr. Gray: I am coming to that. There is no reason why the future of those people should not be extremely rosy. The new company will have a great future and will have all the enthusiasm of the private sector. The hon. Gentleman needs only to look around Scotland to see the jobs that have already been created by the private sector. Those jobs will be added to by the new company.
  While the BNOC remains in the public sector its financing requirements must compete with other demands on the public purse. Not all those demands can be satisfied. There are inevitable financial constraints, as well as the statutory framework imposed on the corporation by the previous Government, that cut across its commercial freedom. Clear of the public sector, the new company will be backed by individual investors and be able to borrow freely and fulfil its prospects.
  I regret that the Opposition have not welcomed our intention to remove the British Gas Corporation's statutory purchasing privileges and to curtail its monopoly of supply. That is a highly beneficial step in many ways, but I shall mention just two of the benefits. First, we shall encourage both exploration for, and development of, our gas reserves. For too long the positive and vigorous activity in the search for oil has contrasted pitifully with the air of stagnation surrounding gas.
  Licensees have shown no great interest in exploring for gas. Where they have found gas there has often been no development. There can be no doubt that a major factor in this negative attitude has been the existence of an effective monopoly in the purchase of gas. Licensees often take the view that the price offered by British Gas is too low. We shall remove that inhibition, because British Gas will henceforth be bidding in a competitive market, and licensees dissatisfied with the British Gas price will be free to explore the alternative of marketing their gas direct. Sometimes, it is suggested, British Gas has not wished to offer a price, preferring to take other gas first and forcing the licensees to postpone development. That, too, will change. British Gas will no longer be in a position to hold back developments, because if the corporation does not wish to purchase the gas there will be the opportunity to find others who do. Indeed, gas that might have been left undeveloped may now be produced as a result of our proposals.
  Mr. English: It is important that the hon. Gentleman should state his view of the Government's policy. He will recall that both gas and electricity have been directed to increase their prices to consumers by more than the rate of inflation year by year.
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  The Minister will agree that the implicit corollary of Lord Denning's judgment that prices cannot be reduced for political reasons is that prices cannot be increased for political reasons. Will he therefore reduce the price of gas and electricity to the consumer?
  Mr. Gray: No, I will not. [HON. MEMBERS: "Why not?"] "Secondly, by opening up the gas market we shall give firms the chance to obtain the gas that they require. At present, a number of would-be gas consumers cannot get supplies from the BGC, and they have nowhere else to turn. We shall be giving them the opportunity to obtain private supplies of gas. Industry has been concerned that the prices charged by the BGC have been too high. Henceforth, prices will be set in a competitive environment, and a firm that thinks the BGC price excessive will be free to look elsewhere.
  Sometimes it is suggested that this freeing of the market will lead to gas being used in applications that do not realise the full value of gas. On the contrary, it is where there is a monopoly that the danger of misallocation arises, because market forces are unable to operate. It is because of the monopoly that British Gas has had to operate a policy of attempting to select the uses best suited for gas. We shall free industry to signal to the market place the value that it ascribes to gas. This will ensure that gas flows to the markets where it has the highest value. At present, British Gas has to guess how the market would have operated given the chance. We shall be much more confident that we are making the best use of our gas if we stop guessing and let the market work.
  Mr. Douglas: If the Minister is arguing that we should stop guessing about the future supply of gas—presumably that from the southern basin—can he give a time scale by which he expects such gas to come on the market?
  Mr. Gray: The hon. Gentleman knows perfectly well that in a debate of this kind it is impossible to give an estimate of a time scale. One can never win. There is little doubt that there is gas in the southern basin which will certainly be searched for and, we hope, found and won. This would not have happened under monopolistic and monopsonistic conditions.
  Allowing competition in the gas market is, therefore, our primary aim in breaking the BGC's purchasing monopoly and allowing private supplies to industrial consumers. This will ensure that the gas industry, both onshore and offshore, is structured to a much greater extent than at present by market forces. It will also allow freedom of choice for the industrial consumer, and, most important of all, it will ensure that our valuable heritage of North Sea gas is used to the greatest possible benefit of the nation.
  My hon. Friend the Mernber for Edingburgh, South (Mr. Ancram), the hon. Member for Dunfermline, the hon. Member for Rother Valley (Mr. Hardy), and the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) all mentioned the gas-gathering pipeline, and all, in their own little ways, had a dig at me. I shall not duck the question. What they all failed to point out was that there was no indication at any time that the Government were prepared to finance the operation by more than the 30 per cent. equity holding that we envisaged for the British Gas Corporation. When we were unable to interest the private companies in coming in, it meant that we would be faced with a possible underwriting of £2·7 billion. The

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  Government felt that that was not justified, in view of the fact that the vast majority of the gas would be brought ashore in the same way as oil had been brought ashore.
  The Government have reaffirmed today our commitments on major aspects of coal policy. We shall be introducing in the near future a coal industry Bill that will increase the existing statutory limit on the board's borrowing and enable continuing grant support for its operations and revenues.
  In this context I remind the House, and especially Labour Members, of the support that the Conservative Opposition gave to the Labour Government, when they were in office, in their measures to provide continuing support for the coal industry. In that regard, I pay tribute to the hon. Member for Midlothian (Mr. Eadie) for the work that he has done for the industry over the years. I am sure that he will readily acknowledge the support that he received from the Conservative Opposition.
  Mr. Eadie: I am grateful to the Minister for his comments. As his right hon. Friend the Secretary of State for Energy is sitting beside him, perhaps he will get him to understand that the Government are not giving the coal mining industry a subsidy of £1,100 million. Borrowings from the Public Works Loan Board are made at a certain rate of interest. Will the Minister make it clear to the House that, by however much the Government claim to be supporting the mining industry, his right hon. Friend is wrong and misled the House in saying that the coal industry has received £1,100 million by way of subsidy?
  Mr. Gray: I think that my right hon. Friend dealt very effectively with that question this afternoon. But I can confirm to the hon. Gentleman that the external financing limit for 1981–82 has risen from £886 million to £1,117 million, and that grant payments to support the board's revenue position have risen from £250 million to £550 million. My right hon. Friend made that clear this afternoon.
  The industry faces real problems, but we are encouraged that those involved in the coal industry are demonstrating their determination to tackle them. The need to continue to progress is clear—to sustain recent productivity gains, to improve efficiency further, to reduce losses and to move towards greater competitiveness.
  There are real opportunities for the industry to take. Industrial and commercial markets in particular provide new openings provided that the coal industry is reliable and competitive. Coal will maintain its vital role in the economic and industrial life of the nation only if the industry can produce the coal that we need efficiently and at competitive prices. Whether present customers and potential new customers choose to burn coal will depend almost entirely on pricing signals and on confidence in the industry's reliability and in its long-term ability to produce coal efficiently and competitively.
  I very much hope that the industry will be able to put itself in a position to make the most of these opportunities. An efficient, competitive, financially sound coal industry can also be a successful and prosperous one, with good employment opportunities. Our aim is to see the development of a successful coal industry that will be able to provide those good employment opportunities, as well as supporting the competitive position of British industry.
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  Sometimes we may forget that when the 1945 Labour Government embarked on their programme of nationalisation they did so not just for doctrinal reasons but to help to rescue many of these industries from the ravages of war. Little did they think that in doing so they would create, for themselves and their successors, great monsters, super-powerful against all but the most courageous Governments, accountable only in a most superficial way and certainly not comparable in terms of accountability with the average private sector company, which must withstand the scrutiny of its shareholders regularly The dangers of an inbuilt inefficiency are immense.
  I should be surprised if even the right hon. Member for Bristol, South-East was satisfied that the nationalised industries for which he was accountable, and others, were as accountable as he would have wished. This afternoon my right hon. Friend referred to some of those problems. So now we are putting into practice our philosophy, which is that the State should disengage from areas in which there is scope for the private sector to provide the investment.
  It is our belief that the BNOC is now at a stage in its development at which not to release it from the strictures of Government control would be a serious error. The distinguished former chairman of the board, Lord Kearton, believes that our proposals will go a long way, as my right hon. Friend said, to give the North Sea a new lease of life. He should know what he is talking about, because he has had to put up with the meddling of the right hon. Gentleman from time to time.
  The Opposition's amendment is confused and misconceived. Private profit is certainly not being put before national interest. Indeed, private profit is an essential part of the national interest. We have only to look back over the last decade to see that it was from the private sector that we, the nation, reaped the reward of the private investment that it made in the North Sea. We reaped that through the normal tax system. If Lord Kearton has one criticism of the right hon. Gentleman, it is that his Government undertaxed the oil industry. It took a Conservative Government—for whom it was much more difficult to do—to tax the oil industry as perhaps it had never been taxed before.
  A Government who are proposing to support the coal industry to the tune of £550 million and to extend its external financing limit to £1,117 million can hardly be accused of creating great uncertainty in that industry, and the suggestion that our proposals wreck any prospect of having an overall energy policy makes the feeble attempts of our predecessors to have any energy policy look even more pathetic.
  Let us look for a moment at the inheritance that was handed to us by the former Secretary of State for Energy. It was a nuclear industry weak-kneed and crumbling because of the neglect of the right hon. Gentleman, and we had to start from scratch to rebuild morale. It is now regenerated by the tonic of an assured ordering programme. It was a coal industry for which we had strived to give constructive help during our years in Opposition, but where again major problems had been left over.
  It was a North Sea oil industry where companies' spending plans were being held back and some reassessed altogether for fear of what the right hon. Gentleman and his right hon. Friends might do if they were re-elected in 1979. Development expenditure was increased by £160 million between 1976 and 1979, whereas in 1979–80 the

  507
  increase was more than doubled, to £330 million. Happily, these figures have risen now. We have had 44 starts in new exploration wells in 1980, and 54 in 1981—a 20 per cent. increase year on year. The Opposition left behind a shambles of an energy policy, which we have tried to build upon and which now, we hope, we shall see succeed. I ask my right hon. and hon. Friends to oppose the amendment vigorously.
  Question put, That the amendment be made:
  The House divided: Ayes 249, Noes 298.

  Division No. 1]

  [10.00 pm

  AYES

  Abse, Leo

  Dunwoody, Hon Mrs G.

  Adams, Allen

  Eadie, Alex

  Allaun, Frank

  Edwards, R. (W'hampt'n S E)

  Anderson, Donald

  Ellis, R. (NED'bysh're)

  Archer, Rt Hon Peter

  Ellis, Tom (Wrexham)

  Ashley, Rt Hon Jack

  English, Michael

  Ashton, Joe

  Ennals, Rt Hon David

  Atkinson, N. (H'gey,)

  Evans, Ioan (Aberdare)

  Bagier, Gordon A.T.

  Evans, John (Newton)

  Barnett, Guy (Greenwich)

  Ewing, Harry

  Barnett, Rt Hon Joel (H'wd)

  Faulds, Andrew

  Benn, Rt Hon Tony

  Field, Frank

  Bennett, Andrew(St'kp'tN)

  Fitch, Alan

  Bidwell, Sydney

  Fitt, Gerard

  Booth, Rt Hon Albert

  Flannery, Martin

  Boothroyd, MissBetty

  Fletcher, L. R. (Ilkeston)

  Bottomley, Rt HonA.(M'b'ro)

  Fletcher, Ted (Darlington)

  Bradley, Tom

  Foot, Rt Hon Michael

  Bray, Dr Jeremy

  Ford, Ben

  Brown, Hugh D. (Provan)

  Forrester,John

  Brown, R. C. (N'castle W)

  Foulkes, George

  Brown, Ronald W. (H'ckn'y S)

  Fraser, J. (Lamb'th, N'w'd)

  Brown, Ron (E'burgh, Leith)

  Freeson, Rt Hon Reginald

  Buchan, Norman

  Garrett, John (Norwich S)

  Callaghan, Rt Hon J.

  Garrett, W. E. (Wallsend)

  Callaghan, Jim (Midd't'n&P)

  George, Bruce

  Campbell,Ian

  Gilbert, Rt Hon Dr John

  Campbell-Savours, Dale

  Golding,John

  Canavan, Dennis

  Grant, George(Morpeth)

  Cant, R. B.

  Grant, John (Islington C)

  Carmichael, Neil

  Hamilton, W. W. (C'tral Fife)

  Carter-Jones, Lewis

  Hardy, Peter

  Clark, Dr David (S Shields)

  Harrison, Rt Hon Walter

  Cocks, Rt Hon M. (B'stol S)

  Hart, Rt Hon Dame Judith

  Cohen, Stanley

  Hattersley, Rt Hon Roy

  Concannon, Rt Hon J. D.

  Healey, Rt Hon Denis

  Conlan, Bernard

  Heffer, Eric S.

  Cook, Robin F.

  Hogg, N. (E Dunb't'nshire)

  Cowans, Harry

  HomeRobertson, John

  Cox, T. (W'dsw'th, Toot'g)

  Homewood, William

  Craigen, J. M. (G'gow, M'hill)

  Hooley, Frank

  Crawshaw, Richard

  Hoyle, Douglas

  Crowther, Stan

  Huckfield, Les

  Cryer, Bob

  Hughes, Mark(Durham)

  Cunliffe, Lawrence

  Hughes, Robert (Aberdeen N)

  Cunningham, G. (Islington S)

  Hughes, Roy(Newport)

  Cunningham, Dr J. (W'h'n)

  Janner, Hon Greville

  Dalyell, Tam

  Jay, Rt Hon Douglas

  Davidson, Arthur

  John, Brynmor

  Davies, Rt Hon Denzil (L'lli)

  Johnson, James (Hull West)

  Davies, Ifor (Gower)

  Johnson, Walter (Derby S)

  Davis, Clinton (Hackney C)

  Jones, Rt Hon Alec (Rh'dda)

  Davis, T. (B'ham, Stechf'd)

  Jones, Barry (East Flint)

  Deakins, Eric

  Jones, Dan (Burnley)

  Dean, Joseph (Leeds West)

  Kaufman, Rt Hon Gerald

  Dempsey, James

  Kerr, Russell

  Dewar, Donald

  Kilfedder, James A.

  Dixon, Donald

  Kilroy-Silk, Robert

  Dobson, Frank

  Lambie, David

  Dormand, Jack

  Lamborn, Harry

  Douglas, Dick

  Lamond,James

  Douglas-Mann, Bruce

  Leadbitter, Ted

  Dubs, Alfred

  Leighton, Ronald

  Duffy, A. E. P.

  Lestor, Miss Joan

  Dunnett, Jack

  Lewis, Arthur (N'ham NW)

  508

  Lewis, Ron (Carlisle)

  Robertson, George

  Lofthouse, Geoffrey

  Robinson, G. (Coventry NW)

  Lyon, Alexander(York)

  Rodgers, Rt Hon William

  Lyons, Edward (Bradf'dW)

  Rooker, J. W.

  Mabon, Rt Hon Dr J. Dickson

  Roper, John

  McCartney, Hugh

  Ross, Ernest (Dundee West)

  McDonald, DrOonagh

  Rowlands, Ted

  McElhone, Frank

  Ryman, John

  McGuire, Michael(Ince)

  Sandelson, Neville

  McKay, Allen(Penistone)

  Sever, John

  McKelvey, William

  Sheerman, Barry

  MacKenzie, RtHon Gregor

  Sheldon, Rt Hon R.

  Maclennan, Robert

  Shore, Rt Hon Peter

  McMahon, Andrew

  Short, Mrs Renée

  McNally, Thomas

  Silkin, Rt Hon J. (Deptford)

  McNamara, Kevin

  Silkin, Rt Hon S. C. (Dulwich)

  McTaggart, Robert

  Silverman, Julius

  McWilliam, John

  Skinner, Dennis

  Magee, Bryan

  Smith, Rt Hon J. (N Lanark)

  Marks, Kenneth

  Snape, Peter

  Marshall, D(G'gowS'ton)

  Soley, Clive

  Marshall, DrEdmund (Goole)

  Spearing, Nigel

  Marshall, Jim (Leicester S)

  Spriggs, Leslie

  Martin, M(G'gowS'burn)

  Stewart, Rt Hon D. (W Isles)

  Mason, Rt Hon Roy

  Stoddart, David

  Maxton, John

  Stott, Roger

  Maynard, Miss Joan

  Strang, Gavin

  Meacher, Michael

  Straw, Jack

  Mellish, Rt Hon Robert

  Summerskill, HonDrShirley

  Mikardo,Ian

  Taylor, Mrs Ann (Bolton W)

  Millan, Rt Hon Bruce

  Thomas, Dafydd (Merioneth)

  Miller, Dr M. S. (E Kilbride)

  Thomas, Jeffrey(Abertillery)

  Mitchell, R.C. (Soton Itchen)

  Thomas, DrR. (Carmarthen)

  Morris, Rt Hon A. (W'shawe)

  Thorne, Stan (Preston South)

  Morris, Rt Hon C. (O'shaw)

  Tilley, John

  Morris, Rt Hon J. (Aberavon)

  Tinn, James

  Moyle, Rt Hon Roland

  Torney, Tom

  Mulley, Rt Hon Frederick

  Varley, Rt Hon Eric G.

  Newens, Stanley

  Wainwright, E. (Dearne V)

  Oakes, Rt Hon Gordon

  Watkins, David

  Ogden, Eric

  Weetch, Ken

  O'Halloran, Michael

  Wellbeloved, James

  O'Neill, Martin

  Welsh, Michael

  Orme, Rt Hon Stanley

  White, J. (G'gow Pollok)

  Owen, Rt Hon Dr David

  Whitehead, Phillip

  Palmer, Arthur

  Whitlock, William

  Park, George

  Wigley, Dafydd

  Parker, John

  Willey, Rt Hon Frederick

  Parry, Robert

  Williams, Rt Hon A. (S'sea W)

  Pavitt, Laurie

  Wilson, Gordon (Dundee E)

  Pendry, Tom

  Wilson, William (C'try SE)

  Powell,Raymond(Ogmore)

  Winnick, David

  Prescott, John

  Woodall, Alec

  Price, C. (Lewisham W)

  Woolmer, Kenneth

  Race, Reg

  Wrigglesworth,Ian

  Radice, Giles

  Wright, Sheila

  Rees, Rt Hon M (Leeds S)

  Young, David (Bolton E)

  Richardson,Jo

  Roberts,Albert(Normanton)

  Tellers for the Ayes:

  Roberts, Allan (Bootle)

  Mr. George Morton and Mr. Frank Haynes.

  Roberts, Ernest (Hackney N)

  Roberts, Gwilym (Cannock)

  NOES

  Adley, Robert

  Benyon, W.(Buckingham)

  Aitken, Jonathan

  Best, Keith

  Alexander, Richard

  Bevan, David Gilroy

  Alison, Rt Hon Michael

  Biggs-Davison, Sir John

  Amery, Rt Hon Julian

  Blackburn,John

  Ancram, Michael

  Blaker, Peter

  Arnold, Tom

  Body, Richard

  Aspinwall, Jack

  Bonsor, SirNicholas

  Atkins,Robert(PrestonN)

  Boscawen, HonRobert

  Baker, Kenneth(St. M'bone)

  Bottomley, Peter(W'wichW)

  Baker, Nicholas (N Dorset)

  Bowden, Andrew

  Banks, Robert

  Boyson, Dr Rhodes

  Beaumont-Dark, Anthony

  Braine, SirBernard

  Bell, SirRonald

  Bright, Graham

  Bennett, SirFrederic(T'bay)

  Brinton, Tim

  Benyon, Thomas(A'don)

  Brittan, Rt.Hon.Leon

  509

  Brooke, Hon Peter

  Gray, Hamish

  Brotherton, Michael

  Greenway, Harry

  Brown, Michael(Brigg&Sc'n)

  Griffiths, E. (B'ySt. Edm'ds)

  Browne, John(Winchester)

  Griffiths, Peter Portsm'th N)

  Bruce-Gardyne, John

  Grist, Ian

  Bryan, Sir Paul

  Grylls, Michael

  Buchanan-Smith, Rt. Hon. A.

  Gummer,JohnSelwyn

  Buck, Antony

  Hamilton, HonA.

  Budgen, Nick

  Hamilton, Michael (Salisbury)

  Bulmer, Esmond

  Hampson, Dr Keith

  Burden, SirFrederick

  Hannam, John

  Butcher, John

  Haselhurst, Alan

  Cadbury,Jocelyn

  Hastings, Stephen

  Carlisle, Kenneth(Lincoln)

  Hawkins, Paul

  Carlisle, Rt Hon M. (R'c'n)

  Hawksley, Warren

  Chalker, Mrs.Lynda

  Hayhoe, Barney

  Channon, Rt. Hon. Paul

  Heath, Rt Hon Edward

  Chapman, Sydney

  Heddle,John

  Churchill, W.S.

  Henderson, Barry

  Clark, Hon A. (Plym'th, S'n)

  Heseltine, Rt Hon Michael

  Clark, Sir W. (Croydon S)

  Higgins, Rt Hon Terence L.

  Clarke, Kenneth (Rushcliffe)

  Hill,james

  Clegg, Sir Walter

  Hogg, Hon Douglas(Gr'th'm)

  Cockeram, Eric

  Holland, Philip(Carlton)

  Colvin, Michael

  Hooson, Tom

  Cope, John

  Hordern, Peter

  Cormack, Patrick

  Howe, Rt Hon Sir Geoffrey

  Corrie, John

  Howell, Rt Hon D. (G'ldf'd)

  Costain, Sir Albert

  Howell, Ralph (N Norfolk)

  Cranborne, Viscount

  Hunt, David (Wirral)

  Critchley,Julian

  Hunt, John(Ravensbourne)

  Crouch, David

  Hurd, Hon Douglas

  Dean, Paul (North Somerset)

  Irving, Charles(Cheltenham)

  Dickens, Geoffrey

  Jenkin, Rt Hon Patrick

  Dorrell, Stephen

  Jessel, Toby

  Dover, Denshore

  JohnsonSmith, Geoffrey

  du Cann, Rt Hon Edward

  Jopling, Rt Hon Michael

  Dunn, Robert (Dartford)

  Joseph, Rt Hon Sir Keith

  Durant, Tony

  Kaberry, SirDonald

  Dykes, Hugh

  Kellett-Bowman, MrsElaine

  Eden, Rt Hon Sir John

  Kimball, SirMarcus

  Edwards, Rt Hon N. (P'broke)

  King, Rt Hon Tom

  Eggar, Tim

  Kitson, Sir Timothy

  Elliott, SirWilliam

  Knight, Mrs Jill

  Emery, Peter

  Knox, David

  Eyre, Reginald

  Lamont, Norman

  Fairbairn, Nicholas

  Lang,Ian

  Fairgrieve, SirRussell

  Latham, Michael

  Faith, Mrs Sheila

  Lawrence, Ivan

  Farr, John

  Lawson, Rt Hon Nigel

  Fell, Anthony

  Lee, John

  Fenner, Mrs Peggy

  LeMarchant,Spencer

  Fisher, Sir Nigel

  Lennox-Boyd, Hon Mark

  Fletcher, A. (Ed'nb'gh N)

  Lewis, Kenneth(Rutland)

  Fletcher-Cooke, SirCharles

  Lloyd, Ian (Havant & W'loo)

  Fookes, Miss Janet

  Loveridge, John

  Forman, Nigel

  Luce, Richard

  Fowler, Rt Hon Norman

  Lyell, Nicholas

  Fox, Marcus

  Macfarlane, Neil

  Fraser, Rt Hon Sir Hugh

  MacGregor,John

  Fraser, Peter (South Angus)

  MacKay, John (Argyll)

  Fry, Peter

  Macmillan, Rt Hon M.

  Gardiner, George(Reigate)

  McNair-Wilson, M. (N'bury)

  Gardner, Edward (S Fylde)

  McNair-Wilson, P. (NewF'st)

  Garel-Jones, Tristan

  Madel, David

  Gilmour, Rt Hon Sir Ian

  Major, John

  Glyn, Dr Alan

  Marland, Paul

  Goodhart, SirPhilip

  Marlow, Antony

  Goodhew, Victor

  Marshall, Michael(Arundel)

  Goodlad, Alastair

  Mates, Michael

  Gorst, John

  Maude, Rt Hon Sir Angus

  Gow, Ian

  Mawby, Ray

  Gower, SirRaymond

  Mawhinney, DrBrian

  Grant, Anthony (Harrow C)

  Maxwell-Hyslop, Robin

  510

  Mayhew, Patrick

  Shepherd, Richard

  Mellor, David

  Shersby, Michael

  Meyer, Sir Anthony

  Silvester, Fred

  Miller, Hal(B'grove)

  Sims, Roger

  Mills, Iain(Meriden)

  Skeet, T. H. H.

  Mills, Peter (West Devon)

  Speed, Keith

  Miscampbell, Norman

  Speller,Tony

  Moate, Roger

  Spence, John

  Monro, Sir Hector

  Spicer, Jim (West Dorset)

  Montgomery, Fergus

  Spicer, Michael (S Worcs)

  Moore, John

  Sproat,Iain

  Morgan, Geraint

  Squire, Robin

  Morris, M. (N'hampton S)

  Stanbrook, Ivor

  Morrison, Hon C. (Devizes)

  Stanley, John

  Morrison, Hon P. (Chester)

  Steen, Anthony

  Mudd, David

  Stevens, Martin

  Murphy, Christopher

  Stewart, Ian (Hitchin)

  Myles, David

  Stewart, A. (ERenfrewshire)

  Neale, Gerrard

  Stokes,John

  Nelson, Anthony

  Stradling Thomas, J.

  Neubert, Michael

  Tapsell, Peter

  Newton, Tony

  Taylor, Teddy (S'end E)

  Nott, Rt Hon John

  Temple-Morris, Peter

  Onslow, Cranley

  Thatcher, Rt Hon Mrs M.

  Oppenheim, Rt Hon Mrs S.

  Thomas, Rt Hon Peter

  Osborn, John

  Thompson, Donald

  Page, John (Harrow, West)

  Thorne, Neil(IlfordSouth)

  Page, Richard (SW Herts)

  Townend, John(Bridlington)

  Parkinson, Rt Hon Cecil

  Townsend, CyrilD, (B'heath)

  Parris, Matthew

  Trippier, David

  Patten, Christopher(Bath)

  Trotter, Neville

  Patten,John(Oxford)

  van Straubenzee, Sir W.

  Pattie, Geoffrey

  Viggers, Peter

  Pawsey, James

  Waddington, David

  Pink, R. Bonner

  Wakeham, John

  Pollock, Alexander

  Waldegrave, HonWilliam

  Porter, Barry

  Walker, Rt Hon P. (W'cester)

  Prentice, Rt Hon Reg

  Walker, B. (Perth)

  Price, SirDavid (Eastleigh)

  Walker-Smith, Rt Hon Sir D.

  Proctor, K. Harvey

  Wall, SirPatrick

  Pym, Rt Hon Francis

  Walters, Dennis

  Raison, Timothy

  Ward, John

  Rathbone, Tim

  Warren, Kenneth

  Rees, Peter (Dover and Deal)

  Watson, John

  Rees-Davies, W. R.

  Wells, John(Maidstone)

  Renton, Tim

  Wells, Bowen

  Rhodes James, Robert

  Wheeler,john

  RhysWilliams, SirBrandon

  Whitelaw, Rt Hon William

  Ridley, Hon Nicholas

  Whitney, Raymond

  Rifkind, Malcolm

  Wickenden, Keith

  Roberts, M. (Cardiff NW)

  Wiggin, Jerry

  Roberts, Wyn (Conway)

  Wilkinson,john

  Rossi, Hugh

  Williams, D.(Montgomery)

  Rost, Peter

  Winterton, Nicholas

  Royle, SirAnthony

  Wolfson, Mark

  Sainsbury, Hon Timothy

  Young, SirGeorge(Acton)

  St. John-Stevas, Rt Hon N.

  Younger, Rt Hon George

  Shaw, Giles (Pudsey)

  Shaw, Michael (Scarborough)

  Tellers for the Noes:

  Shelton, William(Streatham)

  Mr. Anthony Berry and Mr. Carol Mather.

  Shepherd, Colin(Hereford)

  Question accordingly negatived.
  It being after Ten o'clock, the debate stood adjourned.
  Debate to be resumed tomorrow.

  HOUSING (AMENDMENT) (SCOTLAND) BILL
  Order for Second Reading read.
  Ordered,
  That the Housing (Amendment) (Scotland) Bill be referred to the Scottish Grand Committee.—[Mr. David Hunt.]

  Statutory Residential Homes (Northern Ireland)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
  10.15 pm
  Mr. Robert J. Bradford: I wish to speak about the charging and assessment procedures for the admission of old people to statutory residential homes in Northern Ireland. I have three points to make. However, first I should like to thank you, Mr. Speaker, for allowing me to change the subject of tonight's Adjournment debate. Originally another subject was submitted.
  I acknowledge the tremendous work done in statutory residential homes by the staff. I do not wish to detract from their commitment to duty. On behalf of my constituents who are concerned about the assessment and charging procedures, I wish to state how much they appreciate the work of the staff.
  I shall describe the history of the problem. In the past eight or nine months a number of constituents have approached me about the high charges levied in respect of their parents and loved ones who have been admitted to the homes. The charges vary from a small amount to the exceedingly high sum of £95 a week. The charges average about £75 a week.
  My constituents are also worried about the lack of information available to the old person who is admitted. The Minister has said in correspondence that care is taken to acquaint old people with the charges. However, some constituents are willing to confirm—and I believe them—that old people have been taken into homes without the level of charging being made clear to them or to their relatives.
  Old people are faced with charges which can be as high as £95 a week. They cannot afford to meet such charges unless they sell their home. A person's sole home is disregarded for the purposes of assessing supplementary benefit. That is not the case with admission to statutory homes. Therefore, there is an area of unfairness and a need to ensure that old people who have to be taken into full-time care are not treated in a less generous tay than whose who apply for supplementary benefit and continue to live in their own homes.
  In many cases the children of old people have sustained them by direct contribution, not only financially but by bringing them into their own homes from time to time. They have enabled the elderly to maintain their investment—that is, their own small residential homes. When the old person hopes to return that generosity and care by leaving the home to the loved ones, if he is taken into a statutory residential home and cannot meet the charges—which range up to £95 a week—the area boards deprive him of his ability to do so.
  The Minister said in his letter that no one in statutory old people's homes had been taken to court to enforce payment of such a debt. I do not disagree with that. However, although the area boards have not enforced the sale through the courts, they have occasioned the sale of some of those homes. I can cite two examples of that from the voluminous correspondence I have received.
  Some people in statutory homes pay a relatively small amount. Another person, who has perhaps been careful with a small amount of money and acquired a dwelling
  512
  worth about £7,000 to £9,000—which is not a great deal of money—is forced to sell that home to meet a higher charge because the value of the home has been included for assessment purposes. That is manifestly unfair.
  While pursuing the matter during the past eight or nine months I have corresponded not only with the Northern Ireland Office but with the relevant Department. The Minister in a letter dated 5 October gave a small glimmer of hope when he said:
  "A joint central and local government working group on personal social services charging policies, which reported in 1980, considered fully the treatment of the family home in the assessment of charges. Amongst other things, they suggested that some of the difficulties might be overcome by increasing the capital disregard"—
  which is a good idea—
  "and by disregarding the capital value of the former home and assessing only any income it produces."
  I believe that that is an excellent idea.
  The letter continues:
  "These options are still under consideration and decisions on them will be reflected in new regulations on charges for local authority residential accommodation which are being prepared."
  The Minister came to this slightly disappointing conclusion:
  "Generally, however, it is unlikely that we should wish to depart from the discretionary elements of charging arrangements lo the extent of debarring authorities from taking into account the value of property when they consider the circumstances appropriate."
  Some discretionary powers are at the disposal of local authorities and they are clearly outlined in the memorandum of guidance. However, none of the paragraphs in the memorandum of guidance meets the problem with which I am trying to grapple. The law on assessment charging should be brought into line with the supplementary benefit legislation, which precludes any consideration of a sole residential home.
  I have a number of questions to ask the Minister. When he has time, perhaps he will reply in writing. How many elderly persons' sole homes are being included for assessment in the Province? I believe that there are enough to warrant concern but not enough to inhibit the Government, on grounds of expenditure, from taking action. How many elderly persons have been informed that their properties must be sold to meet past costs incurred during their stay throughout the years? That figure would help us to convince the Government that changes are needed.
  What time factor would render the board's claims on properties invalid because an elderly person had already signed over the house to a loved one or left it to that person in a will? I have read the document carefully and paragraph 26 appears to deal with that question but imprecisely. It says that, if one deprives oneself deliberately of an asset, one will be assessed as if the asset were still available. I do not believe that the boards would wish to be as crass and cruel as that. There must be a cutoff point before which, if a house was assigned, willed or put in trust, there would be no claim on that property. Does such an attitude prevail or such a facility exist?
  Will the Minister comment on the Government's attitude to the 1980 report referred to in the letter of 5 October? I hope that we are not too late in having the debate. I hope that the Government are still open to suggestions. While it would be helpful to raise the disregard level, justice would be done to elderly people entering homes only if the sole residential property were disregarded. The only exception should be where income

  513
  is earned from the letting of that property. I accept that that should be taken into account but not the value of the property.

  I should be grateful if the Minister would say whether there is still time for him to add his weight to the argument and discussion about this important issue that may still be taking place in Cabinet.
  10.29 pm
  The Under-Secretary of State for Northern Ireland (Mr. John Patten): I am glad that the hon. Member for Belfast, South (Mr. Bradford) has raised this important topic. I thank him for his kind words about the staff in old people's homes throughout the Province. They work hard on behalf of us all. I was rather sad when the original motion for tonight's Adjournment debate, which concerned staffing levels at the Purdysburn hospital, Belfast, was withdrawn. It would have given the hon. Gentleman the opportunity to praise the DHSS in Northern Ireland for the vigorous way in which it has approached staffing problems within that hospital. Staffing levels have been increased in recent months to 720, which has brought overall staffing to 63 nurses per 100 beds. That is considerably better than the ratio which obtains in Scotland, which has long been recognised to be the leader.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I am genuinely sorry to interrupt the Minister. He must reply to the debate, which does not involve hospitals.
  Mr. Patten: I apologise, Mr. Deputy Speaker. I was led astray by myself. I shall direct myself to the eventual subject of tonight's Adjournment debate—namely, the admission and charging policy for statutory residential homes in Northern Ireland. That will not prevent me on another occasion from returning to the interesting subject that the hon. Gentleman was kind enough to raise earlier.
  The hon. Gentleman has taken the opportunity to add to some suggestions that he made earlier this year about the way charging and admission policy in the Province in old people's homes works against the interests of certain well-defined sectors of the community. He gave an interesting radio interview this morning on the issue that occasioned this debate. I am grateful to the hon. Gentleman for giving that interview, as he has enabled me to be better prepared than otherwise I would have been to answer the debate.
  I must set the hon. Gentleman's suggestions in the overall context in the Province of the expenditure that we make every year in providing places for old people in residential homes. The cost of providing such a place in Northern Ireland is about £100 a week. That is broadly similar to the cost of similar provision on this side of the water. The total annual cost of running residential homes in the Province is about £16 million. Our social welfare system was introduced in 1948 and it has never been said that the costs should be met only by the State and not by contributions from residents. We receive about £4 million in charges that are met by those who are paying for their residence in the homes.
  If we accept that the charges should be waived entirely—I am sure that the hon. Gentleman is not arguing that that should be done—we must accept that the level of provision in the Province must be greatly reduced. I am sure that the hon. Gentleman shares the pleasure that I
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  derive from the fact that over the past eight years the number of places in old people's homes in Northern Ireland has increased by about 50 per cent.—that is, by about 1,100 places. That represents a major improvement. It is a fine achievement. I am sure that the hon. Gentleman will agree with that.
  The economic cost of providing a place in these homes may be about £100 a week, but the majority of residents pay substantially less than that. The average charge throughout the Province is about £25 a week, About half the residents pay the statutory minimum. That is a uniform sum that is applied throughout the United Kingdom of about four-fifths of an old person's pension. The remainder goes to the individual residents so that they may have some money of their own. It is sometimes referred to as pocket money. I do not like that term. It is money of their own that they may spend as they want. We should not think of it as pocket money.
  A few facts and figures may help us to examine the hon. Gentleman's very well presented and well argued case rather more closely. About 10 per cent. of the residents in these homes pay the full standard charge. As I have said, about half pay the statutory minimum charge. It is probably among the remaining 40 per cent., who pay on a sliding scale between the statutory minimum and maximum, that some of the problems to which the hon. Gentleman drew attention occur.
  As I understand it, the hon. Gentleman is particularly concerned about the method of determining the charges to be met by residents, especially when it concerns occupation of a house which the resident owned prior to entering the home. In the Province, as here, most people tend to enter these homes permanently or for fairly long stays. If they have previously lived in a house of their own, they must vacate it on entering an old persons' home.
  As the hon. Gentleman will be aware, the method of computing a person's income in this situation is very similar to the manner in which it would be assessed under the supplementary benefit scheme which is standard for the whole of the United Kingdom. The situation in Northern Ireland is exactly the same as that which obtains in England, Scotland and Wales. There is nothing peculiar about the system which operates in the Province.
  There will, of course, be cases in which individual residents realise when they enter the home that they will spend the rest of their lives there. This does not apply to all of them, as some old peoples' homes provide a valuable short-stay respite, perhaps for a year or so, while domestic problems are sorted out by individual pensioners' families. Nevertheless, the majority tend to go into the home for the rest of their lives. When they do so, many of them decide to realise the value of their property and to help to meet the weekly charge from the interest received on the proceeds of the sale.
  I put it to the hon. Gentleman that in Northern Ireland, as on this side of the water, when people decide to sell their houses to produce that kind of income, this is very little different in true logic from the situation in which a person moving into the home of a son or daughter or other relative decides by exactly the same token to sell a house and invest the proceeds in order to help the son or daughter who, after all, has accepted responsibility for the care and well-being of the old person. It is a theoretical argument, but I think that in true logic there is little difference between the two situations.
  Mr. Bradford: The subtle distinction is that the son or daughter would not insist that the parents part from their money. It would still be available for the old person in the family home. That is not so in a statutory home. The Minister has forgotten that under the Ministry of Social Security Act 1966 and the relevant supplementary benefit orders a statutory home is not assessable. That is the difference and the difficulty.
  Mr. Patten: I am grateful for that intervention as it allows me to point to the fact that in reaching decisions of this kind families doubtless sometimes have to take rather hard decisions, just as individuals must. I do not believe that the decisions which families sometimes have to take are at all different from the State-provided institutional framework within which individual old people have to decide whether to sell their homes.
  On this subject, there is little that I can add to what I wrote to the hon. Gentleman on 6 July. There has been a fair amount of quoting from letters, but it is worth reminding the hon. Gentleman of what I said. I wrote as follows:
  "If the applicant for Supplementary Benefit is living in his own house its value is disregarded but the value of other property is taken into account. The resident in an Old People's Home has, however, ceased to live in his former house"—
  that is the difference—
  "and the Board will take its value into account in the assessment of resources. In cases where he is unlikely to return to the house and no dependant is living in it the Board may advise its sale to realise income for personal use. If the Board's advice is not accepted a debt is likely to build up. I have, however, had inquiries made over the last five years and … not one person in a statutory old people's home has been taken to court to enforce payment of a debt of this kind."
  Nor would one expect such an event to happen in the humane and excellent administration of old people's homes in the Province.
  As the hon. Gentleman pointed out, the whole question of charging is at present subject to a review by a working group in England, and the Department for which I have
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  ministerial responsibility in Northern Ireland has been keeping in close touch with developments. Any changes that are recommended will be closely examined by the Department of Health and Social Services in Northern Ireland, because there is parity of provision between regulations throughout the United Kingdom.
  The hon. Gentleman's comments tonight will not be ignored. He correctly said that it would be better for me to reply in writing to the four questions that he posed. I shall do that, but before writing I should like to impress on him that the health and social services boards in the Province make every effort to be humane and understanding in their dealings with such cases. The general policy is—I look forward to evidence on this from the hon. Gentleman—that no pressure is put on anyone to dispose of his property. If the evidence is there, let it be forthcoming; let it be produced in writing. If a legitimate debt accumulates it would become a charge against the person's estate and would be eventually discharged when the estate is wound up after the person's death.
  I shall write to the hon. Gentleman in detail on the four points that he raised. I hope that he will not take it as a back-handed compliment, but I congratulate him on the constructive way in which he put forward his argument in detail. It contrasted very well with statements that he made in the Province earlier this year. For example, on 12 June 1981, it is reported in the press that he said:
  "I accuse the Government of State theft in depriving the elderly who enter old people's homes of their property by making them sell their houses to pay for their stay in State care."
  That sort of comment raises totally unnecessary and unfounded fears in the minds of old people and contrasts poorly with the constructive way in which the hon. Gentleman put forward his views tonight, for which I am grateful.
  Question put and agreed to.
  Adjourned accordingly at eighteen minutes to Eleven o'clock.

NATIONAL FINANCE
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SOCIAL SERVICES
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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 Carlisle.

ECGD Claims: Iran
Lord Bruce of Donington: 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 state, in respect of claims paid during the years ended 31st March 1978, 1979 and 1980 under ECGD external trade guarantee policies, the total amount of such claims which arose from the "special case" of Iran during those years.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, it has been the policy of successive Administrations not to disclose details of the ECGD's experience in relation to particular markets. However, I can affirm that, of the total of claims paid under the department's external trade facilities for the three years in question, the proportion which related to Iran was less than 1½ per cent.
Lord Bruce of Donington: My Lords, I thank the noble Lord for that reply. Will he bear in mind that, according to the Answer to the Question that I put to him a few weeks back, there are some £660 million by way of reserves and provisions as at 31st March 1980? That is on the basis of his own Answer. In the interests of exporters generally, would it not have been far better to draw modestly upon the reserves that have accumulated over the years rather than have this very drastic increase in the rate of premiums for these particular types of policies, which has made it very difficult—and increasingly difficult—for the exporters and for the confirming houses? Is there not some other, better way of taking one year against another, rather than slavishly following the somewhat ambiguous form of accounting practice that appears to have been adopted so far?
Lord Trefgarne: My Lords, the noble Lord will recall from my previous answers that the performance of the ECGD generally in these matters—not only in regard to this particular type of policy to which the noble Lord refers, but also to the other types which it writes—has been less than satisfactory. But, in regard to this type of policy which is the subject of the Question, it might be worthwhile my pointing out that of 68p worth of premiums that it took on an actuarial basis, it paid out no less than £1·39p in claims of one kind or another and, clearly, disparities of that sort had to be corrected.
Lord Hawke: My Lords, is it not a fact that, owing to the rise in the price of oil, dozens of countries all over the world are virtually bankrupt, and if we are to continue to trade with those countries the rates of the ECGD will have to go up a great deal as, otherwise, those reserves will vanish very quickly indeed?
Lord Trefgarne: My Lords, my noble friend puts his finger on the nub of the problem; that is, that it is the world recession which is the principal cause of the difficulties in which the ECGD has found itself. But it is not the only cause. One of the other causes has been the disparity between premium rates and claims performance, and it is that latter disparity which we sought to correct with the recent rate adjustment.
Lord Bruce of Donington: My Lords, is the noble Lord aware that there is a view in export circles that the degree of investigation of the credit-worthiness of overseas clients for, or on behalf of, the ECGD has some shortcomings? There is a feeling that if the investigations were carried out a good deal more thoroughly, country by country, risk by risk, the claims that were ultimately liable to be paid would probably be significantly less. Will the noble Lord confirm that an amount not exceeding £1 million, out of the total expenditure of the ECGD, is spent on investigation which seems to be a remarkably small sum?
Lord Trefgarne: My Lords, I do not have in front of me the precise figure of what is spent upon investigations. I shall ascertain that figure if I can and write to the noble Lord with it. But, of course, the ECGD's general policy in these matters must be related to its claims experience.
Lord Glenkinglas: My Lords, will my noble friend bear in mind that during the period when I was responsible for the ECGD exactly the opposite to what the noble Lord, Lord Bruce, suggested happened. A very large number of companies complained that the ECGD was much too strict in making investigations in countries, and in refusing credit to countries with which they wanted to do business.
Lord Trefgarne: My Lords, I venture to suggest that the conduct of the affairs of the ECGD under my noble friend was particularly exemplary.

Northern Ireland: EEC Housing Grant
2.42 p.m.
Baroness Ewart-Biggs: 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 recent reported statement of the European Council of Finance Ministers in Luxembourg represents Government policy in so far as the special funds totalling 30 million European units of account for housing in Northern Ireland will be additional funding to existing programmes.
The Minister of State, Treasury (Lord Cockfield): My Lords, there is as yet no Community instrument to provide the legal authority for the Commission to make the proposed grant. But, as my right honourable friend the Secretary of State for Northern Ireland explained in another place, Her Majesty's Government are co-operating fully with the Commission as it prepares the necessary regulation. If the proposed grant is made available, expenditure on housing in Northern Ireland will be higher than it could otherwise have been.
Baroness Ewart-Biggs: My Lords, I should like to thank the Minister for the Answer, but is he aware that it is only within the European framework that the Northern Irish political leaders have ever really found agreement? Would he not agree that it would be really beneficial to allow EEC funds to be additional to Treasury funds, so as to strengthen the framework of the European Community, in order for it to be used for other means of finding agreement between these leaders?
Lord Cockfield: My Lords, I hope the noble Baroness will forgive me if as a Treasury Minister I do not follow her into the wider issues of policy relating to Northern Ireland. So far as the actual grant from the EEC is concerned, of course we very much appreciate the helpful attitude of all the organisations of the Community towards this very difficult problem indeed. My right honourable friend the Secretary of State has made it very clear that if the grant is made, available expenditure on housing in Northern Ireland will be higher than it could otherwise have been.
Lord Donaldson of Kingsbridge: My Lords, is the noble Lord really telling us that it will not be as high as the amount received? Because that is the implication of his answer.
Lord Cockfield: My Lords, I do not think that the noble Lord could read into what I have said anything of the kind. The total expenditure on housing in Northern Ireland this year is £207 million. The amount of the grant which is at present under consideration by the EEC amounts to 30 million units of account, equal to approximately £16 million.

Stationing of Weapons in Outer Space
2.45 p.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their attitude to the Treaty on the Prohibition of the Stationing of Weapons of Any Kind in Outer Space submitted to the General Assembly of the United Nations by Mr. Gromyko for the Soviet Union, and whether discussions have taken place about the treaty with Western allies and the USA and, if so, what has been their attitude.
Lord Trefgarne: My Lords, the Government are anxious to prevent an arms race in outer space and are examining the Soviet proposal to see whether it will contribute to that end. We are discussing the matter with our partners and allies to see what progress can be made.
Lord Brockway: My Lords, I welcome that Answer, so far as it goes. Is the Minister aware that the report to the recent meeting of the North Atlantic Assembly said that 60 per cent. of the 1,500 satellite launchers are now for military purposes? Will he confirm that the treaty of 1967 declared outer space a zone of peace but that it only prohibited nuclear and mass destructive weapons? Why should it not be extended? If the Minister will forgive me, may I ask a particular question about the shuttle? Is it the case that the Soviet Union proposed as an article to SALT II that the shuttle should not be used for military purposes and that the United States stated that it would only be used for peaceful purposes? Is it the case that plans are now made for the shuttle to provide information to bombers, to submarines, the Trident, to missile systems, the cruise, to ground vehicles—
Several noble Lords: Reading!
Lord Brockway:—and to barracks? If this is so, is it not a new reason why we should prohibit military activities in outer space?
Lord Trefgarne: My Lords, the noble Lord rightly pointed out that the 1967 treaty extended only to weapons of so-called mass destruction, and he went on to ask why that treaty should not be extended to cover other weapons. It may be that the 1967 treaty should be extended as the noble Lord suggests, but we shall need to be sure that if it is so extended it will not unduly affect our strategic position. As to the question of the shuttle to which the noble Lord went on to refer, I have no knowledge or indication that the shuttle is intended for anything other than peaceful purposes, but it would be covered, I think, by the present proposals in the document which the Soviets have put forward.
Lord Shinwell: My Lords, in order to avoid any possibility of misunderstanding, may I ask the noble Lord whether there is any constitutional or parliamentary control over outer space and whether or not it is possible for any person of any sex, provided that person has the requisite facilities, to enter outer space and not be inhibited from so doing?
Lord Trefgarne: My Lords, although, so far as I know, there is no inhibition upon states to enter outer space, as the noble Lord says, there is some disagreement as to precisely what is meant by the words "outer space"—that is, how far from the surface of the earth it commences. But clearly there is no difficulty over nations agreeing among themselves not to use outer space for particular purposes.
Lord Mayhew: My Lords, bearing in mind that the Government are proposing to deploy Trident missiles

103
in the early 1990s, what assurance can the noble Lord give that the Soviet Union will not be deploying space-based laser weapons by then, or perhaps a few years later?
Lord Trefgarne: My Lords, if the noble Lord is referring to the recent television programme about the use of laser weapons in outer space, I would say that they represent a technology which is not yet with us. As to the question of the Trident, the Government are satisfied that the Trident system provides an excellent margin of insurance against future anti-ballistic missile developments.
The Earl of Onslow: My Lords, will my noble friend ascertain from the Swedish Government their view on the reliability of the Soviet Union in keeping its nuclear weapons out of other people's waters? And can they be trusted, if they do enter into a treaty to ban them from outer space, not to go into neutral harbours with them?
Lord Trefgarne: My Lords, we hardly need to consult with the Swedes to reach a view on that matter.
Lord Wynne-Jones: My Lords, is the noble Lord aware that the uses of the shuttle are very largely military and that indeed the funding of the shuttle has now been taken over to a very large extent by the defence budget of the United States, and a guarantee has been given by NASA that at least half the number of shuttles built will be used purely for military purposes and not for civilian purposes? Does he not therefore think that, despite the uncertainty of my noble friend Lord Shinwell as to the meaning of "outer space", it is actually pretty accurately defined and the fact that there is at the present time an agreement means that we ought to extend that agreement and make certain that outer space is not used at all for military purposes?
Lord Trefgarne: My Lords, when I said in answer to the noble Lord, Lord Shinwell, that the meaning of the expression "outer space" was not precisely clear I meant of course that it is not described precisely in the 1967 treaty to which the noble Lord, Lord Brockway, referred. As to the uses of the shuttle, that is really a matter for the United States Government and I would not want to discuss the budgetary dispositions of that Government to which the noble Lord referred, but clearly the essential uses of that vehicle are peaceful.
Viscount St. Davids: My Lords, is the noble Lord aware that the shuttle is designed and is intended to be a vehicle to be used for commercial purposes, that there is a very long queue of commercial users all waiting to use it, and that if the military in fact enter that queue it will not make the shuttle into a military vehicle, it will merely make for more people in the queue?
Lord Trefgarne: My Lords, I am certain that the noble Viscount has some element of truth in what he says.
Lord Mayhew: My Lords, may I ask the noble Lord further why the Government are so confident that the Soviet Union cannot deploy space based laser weapons by the mid-1990s?
Lord Trefgarne: My Lords, I never said that.
Lord Brockway: My Lords, arising from the question asked by my noble friend Lord Wynne-Jones, may I ask this: are the Government aware that in the Soviet Union control of all launches has been taken over by the armed forces and that in the United States now there is a similar proposal that all launches in outer space should pass under the management of the armed forces? Is this not an illustration of the danger of an outer space war?
Lord Trefgarne: My Lords, the military flavour of Soviet space operations is of course well known, but that is a matter for them.
Lord Whaddon: My Lords, is the noble Lord able to confirm the reports in the evidence given to the North Atlantic Assembly that, of 11 American launches during 1980, 10 were conducted by the Department of Defense and only one by a civilian authority, and can he give any corresponding figures for earlier years?
Lord Trefgarne: My Lords, I am afraid I cannot. However, it is not necessarily the case that all the launches effected by the Department of Defense in the United States are for military purposes.
Lord Underhill: My Lords, will the noble Lord agree that the supplementary questions and answers on this matter show how seriously this should be one of the items to be considered by the Government in any proposals to be put before the second United Nations Special Assembly on Disarmament next year, and have the Government any plans to put such proposals forward?
Lord Trefgarne: My Lords, I certainly agree that this is an important matter. I fancy that the best way forward, following the recent Soviet proposals, would be by means of bilateral discussions between the United States and the Soviet Union, although the United Kingdom will naturally be ready to play its part, if appropriate.

Anglo-Irish Bilateral Meeting
Lord Denham: My Lords, it has been agreed through the usual channels that, in view of the length of today's list of speakers and the importance of the debate, the Statement which is to be made in another place by my right honourable friend the Prime Minister on the Anglo-Irish bilateral meeting will not be repeated in your Lordships' House.
I will however arrange for the text of the Statement to appear in the Official Report.
The Statement read as follows:
"With permission, Mr. Speaker, I should like to make a statement about the meeting which I had with the Taoiseach, Dr. Garret FitzGerald, in London on 6th November.
"This meeting was one in a regular series. It was held on a similar basis to those which take place with other Heads of State and of Government of the European Community. However, it was exceptional in that on this occasion the Taoiseach and I received the Joint Studies commissioned at my meeting with the then Taoiseach in Dublin on 8th December 1980.
"The House will recall my undertaking to place before it the recommendations on matters of policy arising out of the Studies. The Studies, other than that on security matters, will be laid before the House tomorrow. They deal with possible new institutional structures, citizenship rights, economic co-operation and measures to encourage mutual understanding. I have already placed in the Library of the House copies of the Joint Report of Senior Officials on the Studies and of the Communique which the Taoiseach and I issued on Friday.
"At our meeting the Taoiseach and I affirmed our agreement on a number of points which are fundamental to relations between the United Kingdom and the Irish Republic.
"We were agreed on the benefits of close relations between our two countries. We are determined to work for a deepening and strengthening of those relations.
"We were agreed on the need to find ways to reduce the tensions between and to reconcile the peoples of the two parts of Ireland.
"We were agreed on the need to intensify economic cooperation between both countries and in particular between Northern Ireland and the Republic. Such co-operation should assist the economies of both countries as well as encouraging further co-operation in other fields.
"We were agreed in our resolute opposition to violence and terrorism. We are determined to maintain the very high level of co-operation between the security forces of both countries. As the Communique states, we noted with approval the efforts being made to ensure that those who commit crimes in one country should not be able to escape prosecution and conviction by seeking refuge in the other.
"We were agreed, finally, that 'any change in the constitutional status of Northern Ireland would require the consent of a majority of the people of Northern Ireland'. This is a fact which both the present Taoiseach and his two predecessors have publicly accepted.
"It is against this background that the Joint Studies must be seen. Many of the suggestions in the Joint Studies are for further consideration. But the Taoiseach and I agreed that an Anglo-Irish Inter-governmental Council should be established. It will provide a framework which will facilitate more regular and more frequent contacts between Ministers and officials. It involves no change whatever in the constitutional position as regards relations between the United Kingdom and the Republic.
"In the same context, there was agreement to work towards the establishment of an advisory committee on economic, social and cultural co-operation. Closer co-operation and friendship are not matters for Governments only. I hope that this committee will have a wide membership, representative of a broad cross-section of ordinary people and organisations with interests in this country and in the Republic of Ireland.
"The suggestion was made in the Studies that an Anglo-Irish inter-parliamentary body might be established at an appropriate time. It was envisaged that the members of such a body would be drawn from the British and Irish Parliaments, the European Parliament and any elected assembly that may be established for Northern Ireland. The Taoiseach and I agreed that this would be a matter for the two Parliaments to pursue.
"This, Mr. Speaker, was a friendly and constructive meeting. It has helped to consolidate the relationship between the United Kingdom and the Republic of Ireland. The Government's objective is to create a situation in which meetings between the British Prime Minister and the Taoiseach are seen to be routine. We took a significant step in that direction on Friday."

Civil Jurisdiction and Judgments Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to introduce a Bill to make further provision about the jurisdiction of courts and tribunals in the United Kingdom and certain other territories and about the recognition and enforcement
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of judgments given in the United Kingdom or else-where; to provide for the modification of certain provisions relating to legal aid; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

Mental Health (Amendment) Bill [H.L.]
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton): My Lords, I beg to introduce a Bill to amend the Mental Health Act 1959; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a—(Lord Elton.)
On Question, Bill read 1a, and to be printed.

Harbours (Scotland) Bill [H.L.]
Lord Lyell: My Lords, on behalf of my noble friend Lord Mansfield I beg to introduce a Bill to make provision for Scotland, for establishing harbour trusts to hold, manage and maintain harbours and for the transfer of harbours held and maintained by the Secretary of State to such trusts; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Lyell.)
On Question, Bill read 1a, and to be printed.

Pet Animals Act 1951 (Amendment) Bill [H.L.]
Lord Houghton of Sowerby: My Lords, I beg to introduce a Bill to amend the Pet Animals Act 1951 regulating the sale of pet animals. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a—(Lord Houghton of Sowerby.)
On Question, Bill read 1a, and to be printed.

Shops Bill [H.L.]
Baroness Trumpington: My Lords, I beg to introduce a Bill to give freedom to shops to open at such time as they think fit by repealing certain parts of the Shops Act 1950; and for purposes connected therewith. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a—(Baroness Trumpington.)
On Question, Bill read 1a, and to be printed.

The Queen's Speech
ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
Debate resumed on the Motion moved on Wednesday last by the Lord Bethell—namely, That a humble Address be presented to Her Majesty as follows:
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".
2.58 p.m.
The Secretary of State for Foreign and Commonwealth Affairs (Lord Carrington): My Lords, in a sense I feel as though I am being read a first time because I think I should apologise to your Lordships for my infrequent attendances in this House. I can only say in defence that in recent months, partly because of the British presidency of the Community and partly because of a very large number of international conferences, I have been almost continually abroad. To those of your Lordships who have been rather more static—and rather more fortunate—and who mistakenly have envied my journeyings, I would only say that it is very agreeable to come back home. I would just make one further apology, and that is that a very long time ago the visit to this country of the Indian Foreign Minister was fixed and I am afraid I shall not be able to stay later on this evening for the end of the debate, but I will stay as long as I can.
My Lords, the events of recent months have reminded us, if we needed reminding, that life—and foreign affairs—is complicated and sometimes dangerous. All of us want Britain to be able to contribute to the utmost to making the world safer, fairer and more prosperous. But we certainly cannot achieve nearly enough by ourselves. The problems are too many and too great. That is why we devote so much effort to co-operation with other countries—above all with our allies in the North Atlantic Alliance, our partners in the European Community and our friends in the Commonwealth. We have made efforts, and I believe successful ones, to improve the methods of consultation among the NATO allies and among the 10 members of the European Community. Progress may at times seem painfully slow, and your Lordships will know from bitter experience that committees are not always the quickest way to reach a decision, or the best way to design a horse.
But co-operation remains the only realistic approach to the great majority of our foreign policy objectives. This is particularly true in the areas that I should like to concentrate on this afternoon. A speech of a general kind in a debate like this should not cover all the world; with your Lordships' permission, I will not, and I will be as brief as I can in the light of the very large number of speakers in the debate this afternoon.
The Community is central not just to our wider political and economic interests but to all of us in our daily lives. This fact is reflected in the Government's priorities in foreign policy. It is also borne
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out by a large number of ordinary British people—businessmen, bankers, farmers, consumers, trade unionists and members of the professions—who have seen at first hand the benefits which Community membership brings us and the potential which it offers.
For the first time since we joined the Community we had last year a surplus on visible trade with the other members. The tariff-free market of 300 million people, represented by the Community and its European associates, now takes 60 per cent. of our exports and is crucial to the welfare of the British people. The increasing American, Japanese and other investment attracted here by access to that market is helping to expand our industry and provide employment.
What a pity, I think, that the Labour Party did not stop to think of this before opting to withdraw from the Community. Because, my Lords, make no mistake about it, wanting to leave the Community is a sort of national death wish. We must get on with the essential job of developing and improving the Community, a job which all our partners agree is vital, because our future economic strength and prosperity depend upon its successful completion.
As your Lordships know, Britain at the present time holds the presidency. That does not, of course, mean that we can bring about dramatic changes. But it does give us an opportunity, and a duty, to try to move things forward. My right honourable friend the Lord Privy Seal has recently reported in detail in another place on the course, under the British presidency, of the negotiations on the review of the Community's policies and budgetary arrangements agreed on 30th May 1980. We are determined to reach a genuine and lasting solution.
We would like to make decisive progress at the European Council later this month. Whether we succeed depends on others as well as ourselves. But it is not in anyone's interest that the necessary decision should be delayed. We shall also, as the gracious Speech makes clear, press hard for improvements in other areas of Community activity. We have made it absolutely clear that we mean to reach agreement as soon as possible on a new common fisheries policy; to strengthen the internal market by removing non-tariff barriers to trade and by liberalising the service industries such as insurance and air transport; and to bring the negotiations for the accession of Spain and Portugal to a successful conclusion.
The increasing strength of the voice of the 10 members of the Community in international affairs is a further demonstration of the weight that can be brought to bear by partners and allies acting together. We have tried, during the British presidency, to get this co-operation better organised. A new report was agreed here in London last month, which consolidates past progress and makes a significant step forward.
First, it strengthens the commitment of the ten partners to work for joint views and joint action in their foreign policies. It confirms formally that political aspects of security matters—as distinct from the military questions of defence itself—will continue to be discussed in political co-operation. Thirdly, the London report reinforces the procedures and machinery of political co-operation, in line with the suggestions I made in a speech in Hamburg about a

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year ago. I am confident that what has been decided will strengthen the ability of the Ten to work together, as they have already with considerable success in the meetings on Security and Co-operation in Europe, and on other important matters such as the Middle East and Afghanistan.
For nearly two years now the Soviet occupation of Afghanistan has cast a blight not only upon that unhappy country, but even more importantly on the entire relationship between East and West. The Soviet Union seems to hope that the world will forget. That is an illusion, as resolutions of the General Assembly of the United Nations have shown twice already, and will show a third time, I do not doubt, when the vote is taken in New York later this month. The problem of Afghanistan is one of those where the members of the European Community are trying jointly to promote peace.
To end the occupation and continuous killing, the flattened villages, the 2½ million or more refugees, the anti-personnel mines which strew the hillsides and blow the feet off women and children as they try to escape from the fighting—to end all this, the Ten have suggested a two-stage conference which would enable Afghanistan to resume its independence and nonalignment—two-stage, in order to get over the difficult problems of representation while ensuring that no decisions are made behind the back of the Afghan people. These proposals, despite the chilly Soviet reaction, remain firmly on the table. Progress on this subject would both offer the Afghan people the prospect of an end to their nightmare and do immeasurable good to East-West relations.
There is, of course, another small Asian country which has been invaded by a far stronger neighbour: Cambodia, now occupied by Vietnam. The Foreign Ministers of the European Community and of the ASEAN countries agreed, when they met recently in London, on the need for the Vietnamese forces to withdraw and the people of Cambodia to be able freely to elect a Government of their own choice.
The fact that these problems exist, as I have often said, does not remove the need for lines of communication between the East and West. This is not my view alone. The American Secretary of State and the Soviet Foreign Minister met twice in New York in September and are to meet again in Geneva early in the New Year. We hope that the dialogue will have good results. There is scope for progress if the Soviet Union is ready, as the West is, to show restraint in its international activities.
That brings me to the important events that have been taking place in Poland. The situation there is a complex one, with political change and economic crisis occurring at the same time. At the specific request of the Polish Government, Britain, in cooperation once again with its Western and European partners, is providing food and other economic assistance. We are glad that the Polish Government and Solidarity, and also the Roman Catholic Church in Poland, are continuing to pursue agreement through negotiations. We wish them well. The most important requirement, now and since the crisis began, is that Poland's internal arrangements and the solutions to its economic problems must be decided by the Polish people themselves, without external interference of
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any kind.
But in East/West relations the question of arms control and disarmament remains at the centre. It is there, above all, that we would like to see some real progress—both because practical steps, even if small at first, could be of value in themselves, and because they could help build the confidence that will be necessary to the larger steps which we hope will follow.
One result of the meetings between Mr. Haig and Mr. Gromyko in September was agreement that negotiations on theatre nuclear forces should begin on 30th November between the United States and the Soviet Union. Britain is co-operating actively with its allies in the consultations which are taking place in NATO in preparation for that time. We hope that the Soviet Union is doing the same.
The seriousness of the problem is obvious: the negotiations must be no less serious. This will require an objective approach to the question of which types of equipment on either side should he included in the negotiations. It will require an approach based on balance; it is not good enough for the Soviet Union to call for a moratorium which, coming into force after several years of Soviet deployment and before NATO has begun to modernise its theatre nuclear forces, would merely perpetuate the present imbalance.
NATO is willing to accept equal ceilings at the lowest possible level. We are ready to look again at our deployment plans in the light of progress in negotiating Soviet reductions. The ideal outcome would be a zero level on both sides. This would involve the Soviet Union dismantling and destroying all its relevant long-range theatre nuclear missiles, so that NATO could agree not to proceed with its new deployment. Whether this ideal objective is achieved, or whether the two sides may have to settle for something less ambitious, at least at the outset, will depend entirely on how far the Soviet Union is prepared to go.
These forthcoming talks to set limitations on theatre nuclear forces are not the only positive prospect in the field of arms control. In their two recent meetings, Mr. Haig and Mr. Gromyko also discussed the Strategic Arms Limitation Talks. As your Lordships know, the British Government have always supported the SALT process. I hope that negotiations about reductions will get going early next year. There will then be two major nuclear arms control negotiations taking place in parallel—about theatre nuclear forces and about strategic systems.
Lord Molloy: My Lords, I hope that the noble Lord will allow me to intervene. I am most grateful to the noble Lord because he has made a very important point in mentioning the SALT agreements—I think that that is vital. I also believe that what he has said about the Soviets reconsidering is absolutely correct. But is it not a possibility that, if the Americans should also show some initiative to recommence the vitally important SALT talks—as has the noble Lord—that, too, could make a contribution to returning to sanity in this troubled world?
Lord Carrington: My Lords, actually, that is precisely what I said. I have said that Mr. Haig and Mr. Gromyko did meet and have decided to do precisely

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that. I think that it is extremely encouraging and that all of us should wish these talks well. They must inevitably take place between the United States and the Soviet Union because they are the possessors of these weapons.
The third area of arms control where I hope for progress is that of confidence-building measures in Europe. This is one of the security matters on which the Ten are co-operating very closely. The CSCE review conference resumed recently in Madrid. The British delegation, working jointly with those of our partners and allies, will make every effort to reach agreement on holding a conference about new measures to build confidence and security in Europe. But such measures should satisfy four basic criteria, otherwise I doubt whether they are of all that much value. They must be mandatory; they must be verifiable; they must be militarily significant; and they must be applicable to the whole of Europe up to the Urals. If they meet those criteria, such measures can do a great deal for confidence in Europe. By increasing their knowledge of military activities undertaken by the other, each side can reduce the risk of miscalculation and surprise. So there are very real openings in negotiations about multilateral arms control, and the West is determined to exploit them.
I can well understand those people in this country and elsewhere in western Europe who are worried about nuclear weapons. I welcome the renewed debate on the subject. But unilateral disarmament, as I argued in a speech in Luxembourg last month, would not only reduce the incentive for others to negotiate but would also reduce the risks facing a potential aggressor, and I think that that would make war more likely.
It would be tragic to undermine the peace which we in Europe, despite our political divisions, have enjoyed for over 36 years. We all want to maintain and strengthen peace. The question is how best to do it. My answer I hope comes not just from the heart but from the head as well: we should continue to deter aggression and should work untiringly for balanced, verified and multilateral arms control.
The year 1981 has produced little good news from the Middle East. We have seen the tragic death of that great and courageous man, President Sadat. There has been fighting in the Lebanon, and continuing conflict between Iraq and Iran. And all the time the Arab/Israeli dispute has continued to fester, a constant threat to stability.
The Ten are committed to co-operate actively in the search for a settlement through negotiation in the Middle East. Their policy, set out in the Venice Declaration last year, insists on guarantees for the security of the State of Israel; and it places equal emphasis on justice for the Palestinian people and their right to self-determination. The Ten have also taken a close interest in the eight points proposed recently by Crown Prince Fahd of Saudi Arabia; the presentation of these points by a leading Arab country represents an important and constructive step.
Acting on behalf of the ten members of the Community, I visited Riyadh last week to explore with the Crown Prince and his colleagues the common ground between the Venice principles and the eight points. I
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was encouraged by those discussions.
Britain and her partners in the Community have expressed their firm support for the Egyptian Government and people and their belief in the need for continuity and stability in Egypt. They also welcome the Egypt/Israel treaty and the agreement on the withdrawal of Israeli forces from Sinai. We believe that it is in the interests of all parties in the Middle East that this agreement should be implemented smoothly and effectively, and that there should be no renewal of tension in Sinai. We are therefore exploring the possibility of participating in the Sinai Multinational Force in a manner consistent with the established policies of the Ten.
When I addressed your Lordships in the debate on the Address a year ago, the negotiations on Namibia appeared to be approaching their culmination. The hopes which I expressed on that occasion were subsequently disappointed. Indeed, I need not remind your Lordships that there have been times during the past year when the prospects for a negotiated settlement have seemed bleak. In saying once again this afternoon that the outlook seems more encouraging, I therefore speak with even more caution than usual.
We are dealing with a tense and delicate situation. The mission from the five western Governments, which has just visited Africa, has made an encouraging start to our renewed efforts to secure the implementation of a settlement based on Security Council Resolution 435. But the way ahead is fraught with difficulties, and we must all hope that no further upsets occur to throw the negotiations off course.
In September the Foreign Ministers of the five contact group nations met in New York to try to give new impetus to the Namibian negotiations, following exploratory contacts which were carried out in Africa by the United States Government. We formulated proposals for a set of constitutional principles as suggested guidelines for the Constituent Assembly in Namibia. During the past fortnight these proposals have been presented to African Governments by officials of the Five.
Although we have yet to hear their considered views, I am encouraged that the parties and Governments concerned have received these proposals in a positive spirit; and the Five hope to complete this phase of negotiations before the end of the current year, and then to move on to the second phase, in which we shall tackle other difficult issues which have hitherto obstructed agreement to the implementation of the United Nations plan. By this procedure we hope to build up in stages the confidence needed for all concerned to give their agreement.
The path towards a negotiated settlement is never a very easy one, either for the Governments of the front line states and Nigeria, or of South Africa. The former have shown great patience and moderation, and it would be a mistake to underrate the problems which the negotiations pose for South Africa.
I have spoken today of the importance of co-operation between nations. Close and harmonious cooperation among the Five has made a very valuable and vital contribution thus far to the search for a settlement. Close co-operation between the Five and the front line states and South Africa is no less vital. We

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shall continue to take the very fullest account of the real and understandable concerns of all these Governments. With continued flexibility and statesmanship of the kind which has opened the way for renewed negotiations, it should be possible to begin implementation of the settlement plan in the coming year.
If I have dwelt this afternoon on a limited range of subjects, I have done so because of the large list of speakers. There is no lack of other topics on which I might have expanded had time been no object. I might, for example—and I shall for a very short time—have talked about relations between the developed and the developing countries. Indeed, I might have made it a major theme. I have been much concerned recently with this subject.
I accompanied my right honourable friend the Prime Minister to three Summit meetings in recent months: the Summit of the seven industrialised countries in Ottawa, the Commonwealth Heads of Government Meeting in Melbourne, where Zimbabwe, Belize and Vanuatu were welcomed as new members of the Commonwealth; and, most recently, the Summit of certain developed and developing countries at Cancun in Mexico.
These meetings have helped to clarify the very difficult problems concerning the economies of the developing countries. There was movement towards a meeting of minds. The search for solutions will, I hope, have been stimulated. I certainly welcome the consensus reached at Cancun on renewed efforts to launch global negotiations in circumstances offering the prospect of worthwhile progress.
We all hope that the cordial—and it was cordial—and constructive—and it was constructive—atmosphere at Cancun will set the tone for the future. We shall continue to work for this, bilaterally through our aid programme and in co-operation with our partners in the Commonwealth and in the Community.
Noble Lords will, I think, have noticed how the thread of co-operative effort has run through the various subjects on which I have touched this afternoon. From the Tower of Babel to the present day cooperation has not been very easy. In many fields the effects of economic recession make it more difficult than ever. But the rewards of success and the penalties of failure have never looked greater. There is an old Cornish story of a rich and powerful city which was swallowed by the sea because its inhabitants grew idle and complacent, and neglected the dykes which held back the sea. The story goes that on a clear day at sea you can still hear its bells.
I think that we, too, would be foolish to forget that it is by co-operation, above all with our allies in NATO and our partners in Europe, that we must work to keep Britain safe and prosperous. We shall work for a strong Europe, acting in close partnership with a strong America. While we can achieve this, I can see no reason to fear that the bells will toll for us.
3.26 p.m.
Baroness Liewelyn-Davies of Hastoe: My Lords, this debate on the gracious Speech is taking place against the most sombre background that we have seen for many years. With his usual clarity and forthrightness, the noble Lord the Foreign Secretary has presented your Lordships with a very complicated picture
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indeed. We very much welcome his reference to cooperation and agree with him in knowing how difficult it is to achieve. I do not propose to follow the noble Lord down the primrose path of discussing the Labour Party's attitude to the EEC, though perhaps I may say that I think the whole House considers that his own presidency of the Council of Ministers reflects great credit on this country.
Although we on this side of the House do not accept the noble Lord's approach to world problems in all its aspects by any means, we feel real sympathy for him when he talks about co-operation, confronted as he is by a row of implacable bodies of people with whom he has to deal: the PLO on the one hand, the Israelis on the other; the moderate Arabs and the Fundamentalists; the extraordinarily conflicting views of his American colleagues, from the President, through General Haig to Mr. Weinberger, and many others. He must also have some rather implacable bodies within the Cabinet, when he has time to attend it. To crown it all, the Daily Telegraph last Saturday accused the noble Lord of "trying to be too clever" and of "straddling it both ways". So we feel for him.
However, the truth is that the fundamental dilemma of the noble Lord and the Government in planning their foreign policy is that at the moment there is a bigger gulf between this country and the United States than there has been at any time since the Suez disaster. The Government have somehow to synthesise the conflicting views on the Middle East and, at the same time, to allay the terrible anxieties created by the absurdly conflicting American statements about NATO's policy on nuclear warfare.
We, on this side of the House, also believe that the Government will have to try to persuade our American friends to follow policies in Central and Latin America, in parts of Africa and in their whole approach to the third world which will ease the way to social justice and peace, instead of, as so tragically often happens, exacerbating an already dangerously explosive situation. For instance, the tragedy of El Salvador, where more than 30,000 men, women and children have been killed by security forces in the last months, cannot be allowed to go on. The whole situation there is adding to the pressures on Nicaragua and Grenada, even Guatemala and Honduras. We cannot be indifferent to the records of countries' attitudes to human rights. In this country, together with our allies, we have committed ourselves to concern over human rights in Eastern Europe under the Helsinki agreeemnt. We can at least now welcome with pleasure the appointment in America last Friday of an Assistant Secretary of State for Human Rights, and we very much hope that this new appointment will improve their approach, especially in Central and Latin America.
Like the noble Lord the Foreign Secretary, I have tried not to make what our late lamented colleague Ernest Bevin used to call a tour d'horizon. I have tried to concentrate on the essential issues. There is not time today to discuss our relations with, for instance, the Argentine, or Chile, but we on this side of the House have profound anxieties about the Government's attitude towards those countries and the sale of armaments to them. The immensely important question of the North-South dialogue, our attitude

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to the Brandt Commission, and the appalling and increasing poverty of the third world are fundamental to our whole approach to world problems. Like the Foreign Secretary, one could have talked endlessly about that tonight, but my noble friend Lord Oram, who is so deeply knowledgeable on these subjects, is speaking later, and I shall not take up the time of the House myself.
We welcomed the cautious optimism of the Foreign Secretary on the question of Namibia. Again, one could discuss that almost endlessly, but we are very much encouraged that the Governments of Nigeria and Angola seem encouraged by the new discussions that are taking place. So for the moment we wish them well, and we do not discuss them in detail. For myself, I should have very much liked to bring before your Lordships in some depth the fascinating subject of China. It is extraordinary that neither in the gracious Speech nor in another place has there been a reference to one of the largest countries in the world with I billion inhabitants. However, whatever happens in our present world situation, China will inevitably play a crucial role. Today I cannot do more than urge the Government to continue to extend building links, economic, political and social, with the people of China, and to use the marvellously inventive, stoical and original Chinese contribution to the world as a whole.
We welcome very much the practical and immediate help that the Government have given to Poland, and we hope that they will continue with Government assistance. Poland is a nation to which we owe much and which suffered perhaps more than any other in Europe through the last war. We salute the gallantry of the Poles. But, as I have said, there is such a full list of speakers that I want to concentrate on what I think is the most urgent need of the day, and that is the Anglo-United States relationship and its approach to the problems. I do so without being in any sense anti-American.
The world desperately needs America. We need her skills, her resources, her spontaneous generosity, her vitality, and that is one reason why we have to consider our approach to the Middle Eastern problem now. As with the noble Lord, of course the whole House deeply deplores the tragic assassination of the brave and indomitable President Sadat. Whatever may be the situation now, Camp David was one of the most hopeful developments there had been for a decade, and it is to the great credit of Israel as well as of Egypt.
The noble Lord the Foreign Secretary has said that he considers that the Fahd plan really marks a departure in Arab thinking and shows a will to negotiate a peace settlement, and that is of immense importance. He also said that he believes that the later statement by Prince Fahd on point 3 of the plan shows a willingness to recognise the existence of the State of Israel. He said that not in the House today but on television on Sunday. My Lords, it is absolutely essential for the peace not only of the Middle East but also of the world in general that we should somehow achieve a basis of negotiation which will be acceptable both to Israel and to the Arab world. But, my Lords, this will be very difficult, and, as the noble Lord himself said, it will take a long time.
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The whole House will, I am sure, welcome the assurance that he also gave on Sunday that he will meet Yasser Arafat only if that meeting ensures ultimately the acceptance by the PLO that Israel will exist in safety. The Israelis could not embark on negotiations without that ultimate guarantee. I shall not weary the House—
Lord Molloy: My Lords, would my noble friend allow me just on that point—
Several noble Lords: Order!
Baroness Llewelyn-Davies of Hastoe: I think, my Lords, that the House would perhaps prefer that I should continue my argument. I shall give way a bit later. I do not want to go through the whole Fahd plan point by point. Many of those points will not be acceptable in their present form to your Lordships, as they are clearly not acceptable to President Reagan. I cannot myself see Israel ever accepting Jerusalem as the capital of an Arab Palestine, nor can I see them giving up the strategic Heights of Golan, nor can any of us approve any plan which leaves a limited Israeli State menaced from all sides by missiles provided by the Russians, often through Colonel Gadaffi, which could destroy all the main cities of Israel.
One of the difficulties in dealing with the PLO is that no one knows which PLO we are dealing with. The umbrella organisation which contains politicians like Mr. Arafat is also the international terrorist organisation which has committed many terrible, brutal crimes. It is essential to try for a solution, but we must understand that President Reagan and the world must have cast-iron guarantees about Israel's future safety from a responsible representative of the PLO backed by the Arab nations.
The Foreign Secretary, as President of the Council of Ministers of the EEC, who wish to further the new moderate Arab approach, can only, it seems to us, act through co-operation, as he said himself, with the United States. If, as we have heard, the Saudis may table a resolution at the United Nations embodying their Fahd plan, we believe this could only invite a U.S. veto which would help no one, and would put the Western Alliance gravely at risk, and we hope that the Government's advice will be very much against such a course. Like this country, Israel has had good Governments and some which have been less attractive, but that does not detract from their right to exist as a nation. I am sure that all parts of the House agree that we shall never get a solution to the Middle East problem—a problem which is now threatening world peace—which is not based on that premise.
My noble friend Lord Peart will of course be dealing with the defence aspects of this debate, but our whole future foreign policy is affected by these uncertainties. The whole House will know that Russia is actively afraid of a global nuclear war which no nation can win, and when people are afraid they tend to act desperately and irrationally. No one on this side of the House excuses for one moment the Russian aggression in Afghanistan—or now the latest incident of the nuclear armed submarine in Swedish waters—but we must realise that the Russians as well as the Europeans are deeply worried by the increasing belligerency of

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American pronouncements and their lack of a coherent foreign policy. This is highly dangerous. Those of us who lived through the experience of two world wars and the policies that went before know that thinking and acting as if nuclear war is inevitable could well make it so, and that is what we must avoid.
That is the seriousness of General Haig's "demonstration" nuclear strike argument. Mr. Weinberger of course contradicted it immediately, but we have all heard on the radio and television and seen in the press the argument that it was just an old point for discussion among the NATO cognoscenti and that General Haig's mistake was in introducing it to the unsophisticated public. Your Lordships are an exceptionally well-informed body of legislators, but I doubt if many of us had previously fully grasped the implications which escaped from those remarks. Yet on Friday, in spite of Mr. Weinberger's denial, the Minister of State at the Foreign Office said in another place that if conventional means of stopping aggression seemed likely to fail, NATO "would be obliged" to consider recourse to nuclear weapons. "It is an essential part of our strategy", he said.
The Government have for months been desperately trying to convince the people of this country that we are hopelessly outnumbered by Russian theatre nuclear weapons and must therefore agree to Trident, cruise and the rest. But if we are so outnumbered, it must be madness to make a nuclear "demonstration" which inevitably could only start a nuclear exchange which no one could survive, least of all Europe. The Foreign Secretary referred to the coming discussions on theatre nuclear weapons and forces generally. Part of the problem, to put it starkly, is that, to an American, theatre nuclear weapons mean nuclear missiles that, if fired from Russia, cannot reach the United States. But to Europe, theatre nuclear weapons may well be strategic ones. We must resolve these contradictions urgently.
The whole House welcomes the Foreign Secretary's mention of the disarmament discussions between Russia and America. We hope very much that they will be successful, but I think the House also feels very strong anxiety that NATO is not to be represented there. A leader in International Herald Tribune on 27th October stated:
"There is an inherent imbalance in the nuclear relationship between the United States and its European allies. The European governments do not sit at the table at which the United States and the Soviet Union negotiate over strategic weapons, yet the Europeans know that they are as much at hazard as the Americans or the Russians. The Reagan administration has been addressing the Russians in the aggressive idiom of the American conservatives, without much concern for another very attentive audience in Western Europe".
That is very true, and I think the whole House will agree that one of the great tragedies of this decade was the failure of the SALT II treaty. Our great hope now must lie in a real attempt, as the noble Lord said, at world disarmament. We do not have to be rigid militarists, multilateralists, unilateralists or to belong to any one particular category. Our essential need is to find a coherent policy on how the world is to survive, and the first essential is to have real nonproliferation treaties followed by real disarmament.
I have tried to be brief in view of the great number
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of speakers to come, and I conclude with this thought: this marvellous twentieth century world has made stupendous advances in communications, satellites, fabulous photographs of outer space and, thank God! life-enhancing advances in medicine. International co-operation in medicine has eradicated smallpox, one of the great scourges of man since earliest times. We must now, at what may be nearly the eleventh hour, try to control our social, economic and strategic resources so as to move towards eradicating war, particularly local wars which can and will so easily escalate into the ultimate disastrous nuclear confrontation.
3.46 p.m.
Lord Gladwyn: My Lords, the general direction of our foreign policy must clearly be conditioned to a large extent by the behaviour of our principal and acknowledged adversary, the Soviet Union. I have always thought that the objective of the Russians—while seeking such outposts as they can acquire without risking any general hostilities, and safeguarding of course, if they can, their glacis, as it might be called, in Europe—is not to overwhelm the anti-communist West by military means (because any kind of general war, even if it were a non-nuclear war, would probably be counter-productive) but, rather, to undermine our free societies from within and, if possible, to produce a situation in which a discouraged United States would withdraw her troops from Europe and then make, if they can, suitable arrangements with pro-Soviet régimes in western Europe resulting, of course, in Soviet hegemony over the Continent.
That is not to say the Societ Union is unprepared for war, even a nuclear war if it should come. In all kinds of nuclear weaponry they are admittedly at least the equal of the West, and on the conventional side they have at the moment a considerable preponderance. I do not think, for instance, that the recent manoevres in the Southern Baltic were solely concerned with Poland but were, maybe, rather designed to show with what ease the Soviet Union might be expected to occupy Denmark and unblock the Skagerrack. Maybe the stranded Soviet submarine off Karlskrone had something to do with this also, though what this ancient and thin-skinned vessel was doing there with several Hiroshima-type nuclear torpedoes or mines on board, no one may ever know; but it was clearly up to no good.
Anyhow, somehow or other I have always thought that we—that is, the West—must consequently reduce this general preponderance if we are to have any success in arms limitation. During any efforts to increase our relative strength, at least in the conventional field, which I believe is essential, there is admittedly a danger that the Soviet Union may seek to force the issue, though, as I have said, I very much doubt if it will. We must therefore have contingency plans to cope with such a threat, and it must be admitted that totally contradictory statements by American leaders on such vital matters, to put it mildly, do not help. What our own policy should be in the circumstances I leave, however, to our new spokesman on defence, my noble colleague Lord Mayhew, merely adding that unless we can shortly emerge from the world recession, the chances that the Soviet Union may be able to divide the West and consequently

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win the third world war without fighting it will be so much the greater.
Whatever we may think of Soviet intentions there is, however, one area in which a clash between the super powers may take place whether or not they want it to happen, and that, of course, is the Middle East. We must surely applaud the efforts of our Foreign Secretary to prepare the grounds on which some general negotiations must eventually start between Israel and her Arab neighbours. I have heard it said that the European Economic Community should not seek to intervene in any way in this fatal quarrel; that only America has the power actually to operate the area. The Europeans, so it is said, even though they might contribute a frigate or two to some rapidly mobilisable force, or a few platoons to act as observers in Sinai, should leave the actual handling of these desperately difficult issues to our friend, and indeed our great protector, the United States.
Well, I can of course understand the irritation of the Israelis, but I believe that such feelings on the part of the American Administration, if they exist—and there is, I am afraid, some evidence that they do exist—are misguided. I think that the American Administration should recognise that on a matter in which they are rather heavily committed to one side the services of a body which is perhaps less committed may be valuable. Whatever your Lordships may think of the Fahd plan, to which, as we know, the Israelis object on various counts, but notably because it fails to mention specifically Israel, it will certainly be regarded by many as an advance on previous Arab attitudes. If the noble Lord, Lord Carrington, is ever able to extract from Yasser Arafat some assurance that he does not regard Israel as a blank space on the map, which should eventually be occupied by Arabs, but on the contrary comething which exists and must be reckoned with, he will undoubtedly have been of the greatest use to the United States.
In any case, more and more, and not least I believe in America, in a general way the feeling is growing that, very broadly speaking, there must be some solution based on self-determination for the Palestinians in Gaza and on the West Bank involving close economic relations with Israel; that the resulting entity should be placed under international supervision, at least for an interim period—as indeed most people would think should the Holy Places; and that the frontiers of Israel itself should be absolutely guaranteed, if possible by all the major powers. I hope that the pursuit of what I believe is an eminently desirable goal, which, as the noble Baroness, Lady Llewelyn-Davies of Hastoe, has said, will probably take a very long time, will not be held up by differences of opinion on whether it should come about in a general way in the context of Camp David, or possibly represent some new initiative. After all, Camp David is still in operation—as such Camp David was a very good thing—and presumably will be until such time as the evacuation of Sinai is completed. Moreover, as I understand it, individual talks on a Palestine settlement are still in progress between the Egyptians and the Israelis.
Of course there are great obstacles to progress in the general direction that I have indicated, one no doubt being the feeling that once the evacuation of Sinai is
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completed in April next, the Egyptians may press for what, for the Israelis, might be unacceptable concessions. Here I believe that we can only rely on the ability of the Americans to induce their friends not to go back on a signed and ratified agreement, whatever their fears, which, if they did, most people would regard as a fatal error.
Whether the Community should take part, apparently along with some members of the Commonwealth, in a supervisory or observation force in Sinai is something on which I should not like to dwell at present. It is a very delicate matter, and I do not believe that the Foreign Secretary could possibly go further than he has gone this afternoon. I believe—unless I am wrong—that the matter is to be taken up shortly by the Minister of State in Washington. We can only hope for the best.
In a quarter of an hour one can refer only briefly and quite inadequately to vast problems, but in this period of British chairmanship of the Council of Foreign Ministers, one of these must certainly be the future of the European Economic Community. I know that here—as I think the noble Lord said—the principal objective of Her Majesty's Government is to try to secure some definite settlement of the vexed question of our contribution to the budget (which, incidentally, this year seems to have shrunk to very manageable proportions) and, even more importantly, to arrange, if possible, for the beginning of some reform of the common agricultural policy. We wish them well in both those efforts which, unlike the official Opposition, I am sure that they would not wish to prejudice by vague hints of withdrawal if they do not get their way. It may be, for instance, that the lady who is now French Minister of Agriculture will take the view that there is "no alternative" to the present common agricultural policy, but I trust that, no doubt with the support of some other members, a satisfactory compromise will eventually emerge, as it really must, after all, shortly emerge on the fishing question.
But to my mind, at any rate, one thing now stands out a mile—as it has always stood out—and this is the chief point that I should like to make. Little real progress will be made in the direction of closer unity among the members of the Community, if that is what is desired—and in this phrase I include political unity, dear to the heart of the Foreign Secretary—until, and unless, there is a more general acceptance by all the parties concerned of what might be called supranational rules, or at least supranational conventions.
I do not know whether the Foreign Secretary has read the recent report of the Commission on this subject, which presumably reflects the views also of our own two commissioners, Messrs. Tugendhat and Richards, who in no way can be said to be impracticable people with their heads in the air. Among other things, the report recommends a much more extensive use of qualified majority voting in the Council of Ministers; considerably greater powers for the Parliament; and a reversion in some respects of the Commission to the position that it occupied before its reduction in 1962 to a largely advisory body, on the initiative of General de Gaulle.
Those are not revolutionary proposals. They could be adopted without pain by the member states. If they were adopted, there is no doubt that the Com

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munity would be enormously strengthened and the standard of living of all of us, but more especially of course the poorer members of the Community, would be substantially increased. So would the weight which the Community would acquire in the great game of international politics. Instead of about 1 per cent., I think, of the collective GNP, the European budget could then represent perhaps 4 or 5 per cent. of the collective GNP, and common industrial, transport, regional and social policies would become living realities. Britain would naturally also be a member of a European monetary fund and, incidentally, more and more experts are beginning to wonder why on earth Britain is not already a member of the European Monetary System.
In brief, under such a reinvigorated Community there would be possible all kinds of useful developments which are now impossible under the present system, in which harassed national Ministers, backed up by a host of eager national officials, all intent on getting the better of their foreign colleagues, spend months and years trying to arrive at compromises, which they can then represent in their national Parliaments as victories. It is not a very rational system on which to run a Community.
In what, as the noble Baroness said, Mr. Bevin used to call his "Tourdorizon", I have not even mentioned such grave matters as Afghanistan, Cambodia, Poland, China, Greece, Namibia, Madrid, Cancun, or United States policy in the third world, notably central America. On all those problems, save perhaps the last two, the Government are no doubt doing what they can in association with their 10 colleagues in the Community. On Cancun, we Liberals tend to side rather more with the previous, than with the present Leader of the Tory Party. On the last matter, that of United States policy in central, and indeed Latin, America, while recognising the great difficulty of criticising our great ally in yet another field—and there are quite enough fields of contention already where we are not seeing eye to eye with America—we nevertheless admire the way in which M. Mitterand has made clear his own policy as regards, for instance, the situation in El Salvador and Latin America generally.
In conclusion, and though I know that there will be a discussion of it on an unstarred PQ on 25th November, I cannot refrain from alluding briefly to the sad and mingy compromise on the budget of the Overseas Service of the BBC, which was recently reluctantly approved, on Government insistence, in another place, without the opportunity of a debate in this House, where it might well have been defeated. As we know, the Spanish and Italian services are to be suppressed, and the French service to Europe reduced by half, to say nothing of the disappearance of the broadcasts in Portuguese to the great market of Brazil. The transcription service will still have to be paid for, though it seems at a reduced rate, which is something. All this, my Lords, in order to save £1½ million revenue! The Government's claim that they are actually assisting the BBC in all this because a comparatively large sum is going to be spent over the next 10 years on increasing audibility is, to be frank, absurd, since unless the BBC is to become inaudible such sums will have to be expended anyhow.
My Lords, there is perhaps a means of saving something
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from the wreck. If the Government will put all their weight behind the proposals of the Commonwealth Consultative Group on Student Mobility, which were approved at the recent Commonwealth Conference in Melbourne, they might enable the BBC, more particularly by developing its system of "study tapes", to play an important part in the effort to counter to some extent the dire effects of the recent huge increases in the fees payable in this country by overseas students, and notably overseas students from poorer countries. These proposals indeed represent an initiative that deserves encouragement, and I hope that the Minister who is to wind up this debate will give us some assurance in regard to it.
All I would say finally is that we live in an increasingly dangerous age in which almost anything may happen, and we ought, therefore, above all things, to have a foreign policy which as a nation we can all hold to and believe in. The preservation of our free society, which is bound up, after all, with other free societies, must presumably be our principal aim, and however much its signatories differ on some issues, and however much we may differ on some issues from our great ally, there is no doubt that our membership of the North Atlantic Alliance is essential for this purpose. It is desperately sad, therefore, that the Labour Party has now formally adopted a policy manifestly inconsistent with the maintenance of the alliance. That may be denied, but I am sure it is a fact. We can thus only pray that Providence will somehow provide that the Labour Party will never be in a position to put such a policy into effect.
4.2 p.m.
The Lord Bishop of Durham: My Lords, I should like to start by expressing warm appreciation of the speech by the noble Lord, Lord Carrington, and also much appreciation of his recent work in the Middle East. With great temerity I want to enter into the realm of Middle East politics because during September I had the great privilege of being a member of a small British Council of Churches delegation which spent three weeks in Lebanon, Syria, Jordan, Israel and Egypt. During that time we had an opportunity to meet political leaders in all the countries, as well as religious leaders; and many people in many walks of life, including a midnight assignment with Mr. Yasser Arafat. We also visited four camps for Palestinian refugees, two in Lebanon, one in the West Bank and one in Gaza.
I would entirely endorse the honesty of recognising that there can be no peace in the Middle East until the Palestinian issue has been settled, but during the course of our journey we gained the distinct impression that a very modest settlement would suffice. The Palestinians want some land, but there is no question of all the Palestinian refugees going into it. It seemed to us that the main reason why they want some land is that it will give them an identity, and this is what they desperately need.
We believe also that, given sufficient guarantees, they are not really interested in being a military presence in the area. In fact, Mr. Arafat went so far as to say to us at this private meeting that he would look forward with perfect equanimity to a West Bank state

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being a demilitarised zone for some 10 to 15 years provided there were United Nations guarantees of its security against Israel.
We also felt that the threats, frequently bandied about, of Soviet domination in a West Bank state were unreal, because they are not really in accordance with the character of the Palestinian people, who are primarily business people like entrepreneurs. In fact, a symbol of Palestinian initiative was in a refugee camp in downtown Beirut—a shop selling (believe it or not) chromium-plated hat-stands. I do not therefore believe that the creation of a Palestinian state need necessarily be incompatible with Israel's very real security needs. Indeed, I believe one ought to throw back at Israel the question: Can Israel's long-term security needs be met without a generally acceptable solution to the Palestinian issue?
The noble Lord, Lord Carrington, has referred to the PLO as being a necessary part of any negotiations, and here I believe that, again, he is on indisputable ground. As I said, we met many Palestinians and many Palestinian sympathisers of all ages. We were guarded on a terrifying car journey across Beirut to meet Yasser Arafat by young Palestinians armed to the teeth. In another context, we were guarded by an aged Palestinian, 75, also armed to the teeth and a former member of the Eighth Army. They come in all shapes and sizes. We met members of the PLO who were distinguished professors in universities, and we met many ordinary people. But we met none anywhere who believed that anybody apart from the PLO could at present represent Palestinian aspirations.
We believe that there is responsible and intelligent leadership, some of it in startling contrast to the rather swashbuckling image presented by Yasser Arafat himself. Of course, he is playing a part. This is perfectly obvious when one meets him; and one realises that he has to face enormous problems. He is dependent upon Syria. He has got to contain his own extremists, and therefore he has to make extremist noises from time to time. At the same time he is also trying to project a more responsible image, and this, of course, is an image which one finds vigorously denied by Israel, who believes that naïve visitors like ourselves are hoodwinked when we meet the Palestinians. But certainly to us Arafat gave the impression of being a realist who knows the weakness of his own position and yet, in the end, relies on long-term Palestinian determination to survive and win.
Much play has been made in diplomatic circles of the one card that Mr. Arafat holds—namely, his refusal at present to recognise Israel—and, of course, he has good grounds for believing that when that card is played such Arab unity as there is supporting him will begin to disintegrate. Yet it is even more clear that nothing is going to persuade the Israelis to negotiate with the PLO unless the first move towards recognition comes from the PLO itself, and even then the main effect of such recognition is likely in the first instance to be on the United States rather than on Israel. So the question we met again and again, and I am sure the question which goes round and round in the Foreign Office, is: How can one break this stalemate and what pressures can be brought to bear on either side to take the first steps towards negotiation?
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Israel will act only if it can be put under moral and political pressure to respond to some gesture from the PLO; and I suspect the PLO will act only if it is assured, first of all, that it is not going to be abandoned by the international community and if, secondly, its leaders feel that the value of its one card is diminishing. That, I believe, is what is already happening, because whatever Arabs say publicly there is, I believe, a de facto recognition that Israel is here to stay; and when we pressed Yasser Arafat about whether it might be possible to change the clauses in the PLO charter which give such offence to Israel, he replied, very reasonably, that an organisation cannot change its charter at the drop of a hat, but that there were plenty of hints in statements made by him and others in the organisation that at least there was the possibility of recognising Israel there.
For example, there is the 1974 statement from the PLO about forming a Palestinian state in some part of Israel—which implicitly, at least, recognises that Israel is there and is going to stay. When we discussed with him the Saudi plan, he observed that it had "interesting possibilities". There has been a tendency to play down the importance of hints of this kind and to look for copper-bottomed guarantees of the kind which alone will satisfy Israel; but I believe that the tendency to play down these hints has the effect of boosting the value of Yasser Arafat's one card, the card of formal recognition. Supposing that, instead, our policy was to take these hints seriously, to draw out their implications, to emphasise the de facto recognition of Israel, might this not force Mr. Arafat to play his card before it became worthless? I realise that there are many subtelties in this sort of thing which such a suggestion ignores. I am an ignoramus, really, in foreign affairs but I offer this suggestion for what it is worth and wish the Foreign Secretary every success in his endeavours.
Before I sit down may I add a few words on another major issue, the issue of nuclear disarmament, first welcoming the noble Lord's expressions of urgency in this matter. I feel that some comment on this issue might be appropriate from these Benches in view of the many Christian voices which are raised on it and the fairly large level of Christian participation in bodies like the CND and other organisations overseas. In a fortnight's time I have the daunting task of acting as chairman of an international hearing to be held in Amsterdam under the auspices of the World Council of Churches. This will enable 18 leading Christians from every part of the world to cross-examine experts from the political sphere, from the defence and military spheres, from the scientific sphere and also the theologians, on the whole issue of nuclear warfare. As in most World Council of Churches' conferences and hearings there is much participation from members of the third world—the World Council of Churches spans East and West—and on the panel sitting beside me will be a Russian archbishop, a Hungarian bishop and the leader of the Baptists in the Soviet Union; and we shall be cross-examining experts from the Soviet defence department.
I mention this merely to illustrate the deep concern about this whole field that exists within the Christian Churches. My hope is that this hearing may help inform Christian thinking at a high level of technical

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expertise and may help to develop Christian attitudes on a world-wide basis at this very crucial stage. I want to assure Members of your Lordships' House that we shall be attempting to he genuinely open. This is not a propaganda exercise; but anyone who attempts to plan something of this sort immediately becomes aware of the enormous pressures being brought to bear from almost every part of the world. I fully appreciate the nervousness expressed by Her Majesty's Government about any sort of movement which might imply a weakening of resolve by the Western powers, but I have to say that from a world perspective this just looks like an unwillingness of the nuclear powers to consider anything which might actually begin to put the arms race into reverse.
So would it not be possible, instead of concentrating on the threat of such popular movements—a threat which is real enough—to see the present tide of opinion as also providing us with an opportunity for slightly more courageous political action than has been seen in the past? It would be a tragedy if the debate on nuclear weapons were to become too polarised between the intransigent disarmers on one side and the equally intransigent defenders of the status quo on the other. There are many reasons for the expressions of deep concern now being broadcast, but I believe that one of them is the growing disbelief that negotiation can produce any worthwhile reduction in nuclear weapons. Looking back to the moral debates which took place on this subject in the 1960s, there gradually came to he among many Christian people an acceptance that for a time one could live with these weapons in the belief that we were moving towards a gradual reduction and eventual removal of them. But what we have seen is that time has only created more problems and more dangers and will go on doing so. That is why it is imperative to demonstrate now that negotiation can be effective.
That is why I welcome what the noble Lord has said about the negotiations beginning at the end of this month and the others later on. I would throw in one question and ask what has happened to the trilateral negotiations for a comprehensive test ban treaty which seemed to be going so well in the summer of last year but now have virtually disappeared from sight. Why has there been no progress? Is it true, as I was told only last night, that one reason for the lack of progress is Britain's intransigence over the precise numbers of detection devices? If so, it seems to me to be a tragic absurdity that one should hold up a really hopeful treaty over a numerical matter of this kind. If it is possible to restore the credibility of the multilateral disarmament process, then I believe that much of the tide of emotion that we are now witnessing could be harnessed to this process; but that without some visible results soon I fear that frustration will simply grow.
4.19 p.m.
Lord Chalfont: My Lords, perhaps it is appropriate that I should follow the right reverend Prelate in this debate because I want mainly to talk about the subject to which he referred in the second part of his speech and I want to approach it from perhaps a different angle. In the precious time at my disposal in this important debate I want to comment on what seems to me a dangerous phenomenon in the thinking about these matters in the West and to reflect a little on the impact
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which that thinking is having not only upon our relations with our major ally, the United States of America, but also on the cohesion and resolution of the Western Alliance as a whole. I have returned only this morning from a visit to the United States, where I was able to speak with a great spectrum of people in the Administration, and I have to report that there is very considerable concern in the United States about this problem and about the health of the alliance and that it is not, in spite of certain things said in your Lordships' House today, entirely or principally a matter of the Middle East.
I listened with interest and sympathy to the remarks of the noble Baroness on this subject; but there seems to me to be in the United States more of a feeling of disenchantment, of irritation and confusion about the defence policies of western Europe than about some of their other foreign policies. I would ask the House to understand that the confusion about western policies is not all in western Europe. There is great feeling of confusion and unease in the United States as well. One of the reasons for this is that we are witnessing at the moment in western Europe the growth of a movement called a peace movement and subscribed to by a great number of sincere people whose openly declared aim is the dismantling of certain elements of the defences of the military establishments of the west. In doing so they are creating—whether knowingly or unknowingly—feelings of suspicion and unease about the United States of America. Indeed, to hear some of the speeches made in the course of this campaign, one might be led to believe that it was the United States that was the major threat to world peace and not, as I believe, the Soviet Union.
All over western Europe this phenomenon is beginning to have its impact: in Belgium and Holland; and perhaps most in West Germany where the Government are under constant stress from this kind of pressure. In this country—with which we must be directly concerned—the movement has already led one of the major political parties into a policy of unilateral disarmament with, as has already been said in the House today, overtones of mutualism and anti-Americanism.
Nor does it help if every policy decision, comment and remark by any American leader is dissected, distorted and misrepresented, because in that way propaganda is made for those who wish to further this process of the dissolution of a partnership and an alliance. Let us be in no doubt that this entire effort is being ruthlessly and indeed predictably exploited by the Soviet Union and other foreign powers as well.
The Soviet Union is waging a massive and expensive propaganda campaign of which the peace movement, whether it knows it or not and whether it likes it or not, is an extremely powerful instrument. It is clearly necessary in my view for the Governments of the West and this Government in particular to meet this problem head on. It is no good compromising with it or hoping that it will go away. I believe that there are a certain number of things that we in the free world should do. First, we must ensure that the peace movements, and those who gather around them, are constantly and relentlessly exposed to public examination. These movements are not entirely idealistic and benign; nor, with great respect to the right reverend Prelate, are they always based upon

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Christian ethics and upon Christian motives.
I believe that whatever their motives may be, it is possible to argue very powerfully that, so far as our safety and our survival are concerned, they are dangerous movements. They may not accept that characterisation. Indeed, that may not in all cases be their motive. Nevertheless, the end result of their policies will be one of great danger for the West. Let us allow of no deception in these terms "unilateralism" and "multilaterism". One hears nowadays in much of the propaganda of the peace movements a blurring of this distinction. One has even heard the curious phrase "unilateral multilateralism", or "multilateral unilateralism". We should not allow this to blind us to the fact that unilateral nuclear disarmament—and it is one of the tenets of the policy of the campaign for nuclear disarmament and many of the other peace movements—means only one thing: it means unilateral action by this country and the West without necessarily any immediate concessions from the Soviet Union.
Lord Jenkins of Putney: My Lords, I am most grateful to the noble Lord for giving way. I must tell the noble Lord that what he has just said is quite untrue. It is not the case that "unilateral disarmament" means what he says it means. I shall hope to say later to the House what it does mean.
Lord Chalfont: My Lords, I shall go from this House today enormously encouraged if the leader of the British section of the Campaign for Nuclear Disarmament will assure us that he does not support unilateral nuclear disarmament by the United Kingdom. If he will do that in the course of his own speech—to which I shall listen with great care—I shall go away much reassured.
My Lords, I would add one other point about the way in which I believe this threat—because I believe it to be that—should be met. This Government and the Government of the United States have fully documented evidence of the extent to which alien political influences are exploiting the peace movements in western Europe and, more recently, in the United States of America. I believe that Governments which are responsible for the safety and security of the West should not be mealy-mouthed or over-fastidious about this. If—as I am led to believe—they have that evidence, then they should release it. This is a war—and it is a war—of information and communication. The Governments of the West must win it.
The second point that I believe we must take seriously—and here I come closer to the right reverend Prelate and the noble Baroness—is that we must now restore the credibility of multilateral arms control negotiations. We must not let people believe that the only way, or indeed the best way, towards disarmament is unilateralism. Nor must we, as the right reverend Prelate said, polarise. That is not a battle between unilateralists and pacifists on the one hand, and power-mad military hawks on the other. There is a middle course. There is a real need to control the arms race. This is understood by most of us, not just one side of the political spectrum. We must prevent acquisition of unnecessary weapons. We must subsequently reduce military stockpiles to safer and more sensible
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levels. As the noble Lord, Lord Carrington, said in his extremely distinguished opening speech, we must now embark upon serious arms control discussions with the Soviet Union.
There are many areas in which progress can be made. We can make progress on strategic arms limitation; we can make progress on mutual and balanced force reduction and on the reduction of theatre nuclear forces. The noble Lord, Lord Carrington, dealt with that at some length. We can make progress on the permanent demilitarisation of outer space. As the right reverend Prelate said, we can make progress on the comprehensive test ban treaty. I would ask him not to diminish lightly the difficulties faced by a Government when they require these treaties to be verified against a potential enemy who has not proved himself to be notably trustworthy in the past. Any agreement we arrive at must be balanced and it must be verifiable. There must be no unilateral concessions—no concessions of any kind—without real and substantial concessions by the Soviet Union subject to effective verification.
I know that this is not a novel point, but can we really trust a country which, while openly talking about the implementation of nuclear free zones in Scandinavia, nuclear free zones in western Europe and in Europe as a whole, sends a submarine armed with nuclear weapons into the territorial waters of a neutral country? We have had previous examples of unilateral concessions. There was a time when the United States Administration gave up its plans to build the B1 bomber. That was because it hoped that the Soviet Union would respond in kind. It abandoned plans to deploy the neutron bomb—the enhanced radiation warhead—hoping that the Soviet Union would respond in kind. There was no response at all from the Soviet Union, except the daily build-up of its SS.20 missiles targeted on targets throughout western Europe. And now, of course, the concentration of the Soviet Union and of the peace movements is on the cruise missile—the modernisation of our theatre nuclear forces.
I may say that I have had some grave doubts myself about the military and strategic effectiveness of the cruise missile, but many of the arguments advanced by the Campaign for Nuclear Disarmament have convinced me, though not in the way that they would like. I think we shall all recall the unilateral disarmament—for that is what it was—of the 1930s and where that led us; and that is where it will lead us again in the 1980s if we are deceived by the attractions of this kind of pre-emptive surrender.
The third and final point is that we must—and this is almost a truism and certainly will come as no surprise from me—maintain strong and credible defences in the West throughout this period of disarmament and arms control. In our own country I believe that we should even now look again at some of the decisions that have made been in the defence field. One of the things that I have learned in the United States, as a result of the decision of the United States to develop the second generation of Trident missiles—the D.5 instead of the C.4—is that if Her Majesty's Government also decided to acquire that system the cost would be very much greater, substantially greater, than any figure we have yet heard in your Lordships' House. If this were an appropriate place to make

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bets, I would make a bet that, sooner or later, the Government will have to cancel the Trident programme. I only hope that they will do it before we have reduced our conventional forces to such a level that, when we do come to cancel the Trident missile, we shall have neither, in their view, an effective nuclear deterrent, nor, in my view, an effective conventional deterrent. I urge the Government to look once again at this very serious problem.
Much of the confusion that exists in the western alliance, both in the United States and in Western Europe, springs from a defensive strategy which we have held to over the years and which in my view, lacks to a very large extent any military credibility at all. If a defence or deterrent policy is to have full credibility, we must have strong conventional forces as our first line of defence. In this, I think especially of our fleet and the extent to which it has been put in danger by some of the recent Government decisions.
Finally, before I sit down, I wonder whether it would be possible for Her Majesty's Government to impress upon their friends in Washington, and to collaborate with them in declaring a moratorium, if not a permanent self-denying ordinance, on the public discussion of military and strategic options. What we need is a strong, coherent and consistent political strategy to defeat the threat to freedom, not a series of futile pointless arguments about first strike, limited war, demonstration shots et cetera. I want, however, to say in passing, and I hope that the noble Baroness will not mind my saying it in her absence, that I was somewhat surprised to learn—if, indeed, that is what she was saying—that she was not aware that NATO strategy rests upon the possibility that, in certain circumstances, NATO will be the first to use nuclear weapons. That has been at the basis of NATO strategy for 25 years, and if anyone has not realised it then we are in a greater state of confusion than I had presumed. We must now join with our allies in having no public conflict about these strategic options. So long as we are clear in our attitude to the Soviet Union, that we shall resist any aggression with any means at our disposal, that is all that we need to say.
To sum up, I welcome the Government's robust line on defence and foreign policy. I hope they will continue to give the United States Administration their wholehearted support when the present United States Administration is attempting to recover the leadership of the western world which, for a few years, it abdicated. I urge them to reconsider some of their own military strategies and the policy decisions that flow from them. But most of all—and I return to this with no apology—I urge the Government to meet head on this growing movement of appeasement and surrender which is called by its supporters the peace movement. It is not a peace movement. As I have said, it is a movement of appeasement and surrender to a ruthless enemy. It is not yet a large popular movement. There has been a tendency to exaggerate both its size and its influence. It is still a vocal and strident minority. And, indeed, those of your Lordships' House who follow public opinion polls will have noticed a recent important one, in which a large proportion of the people of this country opposed any form of unilateralism and opposed any idea of a withdrawal from NATO. But encouraged and exploited from outside it can grow. It is a move
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ment that thrives upon fear—fear of war, fear of death, destruction and annihilation.
To recognise those fears and to understand them is important. But to exploit them is cruel and irresponsible. I believe that our Government must demonstrate with the other Governments of the West that those worst fears, the very real fears that lie in the hearts of many idealistic and sincere people, especially young people, in the world will be realised only if we surrender to threats, succumb to blackmail and render ourselves defenceless in the face of a determined and ruthless enemy.
Lord Noel-Baker: My Lords, before the noble Lord sits down, may I ask him to consider that, in much of what he has said, he has himself contributed to the false idea which he says the Soviet Union have, that our disarmament movements are unilateral. Will be accept my assurance that the overwhelming majority of the campaign, which is having sweeping success, stands for the general disarmament of the final document of the first special session of the United Nations General Assembly in 1978, which is multilateral disarmament, the disarmament of East and West and the demilitarisation of the world, which is so urgently required?
Lord Chalfont: My Lords, as the remark was put to me, before I sat down, perhaps I may say once again, as I said earlier to the noble Lord, that in so far as any political movement is aimed at multilateral disarmament under effective international control, I am one of its strongest supporters. If, in moving towards that, it wishes, first, to make unilateral concessions by this country or the West, without comparable concessions from the Soviet Union, I am resolutely and violently against it.
4.39 p.m.
Lord Kennet: My Lords, the House listened with the greatest interest and, I think, sympathy to the Foreign Secretary's account of his journey to Riyadh as President of the European Council of Ministers. He is a doer, our Foreign Secretary, and a goer, and that is good. The countries which have been locked in conflict in the Middle East for a generation can only benefit, if they choose to do so, from the proffered assistance of those whose interest in them is justified on historical, political and economic grounds. The chairman of the European Council of Ministers certainly meets all those tests, and we should wish him well in what he is doing.
I am not going to give a tour d'horizon either. I intend today to concentrate on one thing—the current disarray in NATO, and the same subject as the noble Lord, Lord Chalfont, was just speaking about. What is happening is serious, but it is not unprecedented. From time to time, the Atlantic alliance is rocked by a crisis of confidence between the United States on the one hand and the European allies on the other. Thus it was in 1945 when both British and French Governments found cause to embark on their independent nuclear programmes. Thus it was the MLF crisis of 1963, in the events leading up to the French withdrawal from NATO in 1966, in Henry Kissinger's "year of Europe" in the early 1970s. And thus it is again in the

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dual-track crisis of 1981.
This crisis has not arisen out of what some may see as the hair-raising bellicosity of President Reagan, nor out of what others see as the sudden vulnerability of a new generation of West European simpletons to Mephistophelian Soviet propaganda; nor even has it arisen out of what all mayagree is the reckless sensationalism of the press in hailing each slip by still inexperienced politicans as the crack of doom. It arises, on the contrary, out of a gamble by the NATO Governments. They gambled in taking the two-track decision without public or parliamentary debate, and it looks as though they are losing.
We in West Europe face two kinds of Soviet military threat: those which are common to us and to the United States and those which we face alone. Both have many ingredients, but perhaps the most important ingredient of the threat we face alone is the fact that for 20 years we have had 700 or so Russian rockets targeted on us which cannot reach America. Negotiating bodies for various kinds of arms control have come and gone but none has considered the SS4s and the SS5s or their successors, the SS20s.
Our Governments behaved as though it were better not to talk about them: let it be as if they did not exist. Time and again the matter was raised in the House of Commons, in this House, and in the press, 10 years back. It usually went without answer from Governments of both colours. Occasionally it was brushed aside with a, "Later", or a, "It does'nt matter". This seemed ominous then and it seems regrettable now.
After all, nothing more was needed than that some government, or governments, somewhere, should put a simple proposal to the Russians that instead of replacing their obsolescent SS4s and SS5s with the modern SS20s they should come to an agreement with the West to start altogether removing and destroying nuclear weapons and delivery systems in a balanced and verifiable manner. Mr. Brezhnev, it is true, had made a relevant proposal in 1968 but he invaded Czechoslovakia a month later; so it, not unnaturally, fell out of sight. President Carter, it is true, had already made an analogous proposal about the intercontinental missiles in 1977, which he feebly dropped after the Russians attacked it as a "cheap manoeuvre".
That last problem of course was common to the United States and Western Europe. But our own solely European problem remained, and it was never resolved. It was instead aggravated and compounded by the two-track decision of December 1979. This was something to make hearts sink. Instead of asking the Russians to take the SS20s away and destroy them, NATO announced that it would, four years from that time, start building up its own new force to balance them. It would also seek disarmament talks. But the cruise and Pershing II missiles would be deployed anyhow. And that is what "two-track" meant. The decision was made without debate in Parliament, just as the decision to buy Trident was, and it was made without informing the public in advance. Let us remember that for the first time in 20 years it will put Moscow at the mercy of thermonuclear missiles with a four minute flight time and that they will be
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better able than the ICBMs to penetrate the Moscow ABM screen which is permitted by SALT I. The Russians have something to worry about.
Let us also remember that at the time when that decision was taken the present Government were already in power. At first they showed a disposition to claim that the two-track decision was inevitable because the Russians had been asked to take the SS20s away and had refused. But that was a mistake. They had not been asked. In facing us with the SS20s the Russians faced us with a fait accompli. In facing them with the two-track decision we faced them, right back, with another fait accompli. And that is exactly how the arms race began, has continued, is continuing and will continue until disarmament negotiations are resumed.
So it was not surprising that a new generation should take to the streets when they were informed that for the first time American nuclear missiles under sole American control were to be stationed in our country. When it has been pointed out to the Government that this was likely to be the effect of the new policy unless they put the new missiles under the dual key arrangement, as American missiles were put 20 years ago, they have answered that the Americans would charge us for that and we could not afford it.
It has been a chapter of errors—our own, European, errors—and we are paying for them. But the effect has been much increased by the ineptness and confusion of the present American administration. They have their problems. They have to operate a constitution by no means adapted to the rapid world-wide communications which have grown up in the last 200 years. One can sympathise with them, but their apparent ignorance of European feelings and their bickering among themselves may endanger more than the solidarity of the alliance.
Soon, after the full year which it will have taken this American administration to get its act together, we shall face two new sets of talks, as they were outlined by the Foreign Secretary just now. The first will be in Geneva on limiting what NATO circles have, with callous folly, been allowed to call "theatre nuclear weapons". To ordinary Europeans, these are of course strategic nuclear weapons of annihilation. The second set of talks, not until next March, will be the new strategic arms reduction talks, START, which will supersede the old limitation talks, or SALT. The new name is good.
Now, can the American administration do anything useful between March 1982 and July 1983 when their constitution will impose the resumption of electioneering? Will a year and a bit be enough? Again, can they do anything useful in the absence of Britain and France, independent nuclear powers, in the absence of the two Germanies and of Poland and the Low Countries, where immeasurably the greatest concentration of destructive power in the history of the world is now seen? Can they get anywhere without considering chemical, and conventional, arms as well? More and more delivery systems in the West are dual purpose—that is, nuclear and conventional. In the East, there are perhaps two dualities—nuclear and conventional and chemical and conventional.
But there is one place where the hopes of mankind may for the moment reside. That is the Arms Control

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and Disarmament Agency in Washington under its present director, Mr. Eugene Rostow. Mr. Rostow is more experienced than his President, or his Secretary of State, or his Secretary of Defence. He has seen disarmament attempt after disarmament attempt roll by to oblivion and sometimes obloquy, and he has learned. And he is going back, he says, to first principles. Good. The signs are that he may be turning at last to the solution which a careful few have advocated for a quarter of a century and which Lord Mountbatten so ringingly endorsed in his famous Strasbourg speech. In Mountbatten's words:
"To begin with we are most likely to preserve the peace if there is a military balance of strength between East and West. The real need is for both sides to replace the attempts to maintain a balance through ever-increasing and ever more costly nuclear armaments by a balance based on mutual restraint. Better still, by reduction of nuclear armaments. I believe it should be possible to achieve greater security at a lower level of military confrontation".
If this approach, minimum deterrence, is what emerges from the forthcoming super-power talks, then we can be grateful to the Reagan administration for something which far outweighs all the bickering and incoherence of recent months. If it does not, then I suggest that we shall have to face up to the daunting contention that a disarmament to make the whole world safer can only be obtained through negotiations in which the whole world is involved. So far, we have been too lazy to face that. But I cannot believe that mankind will, for another generation, remain intellectually too lazy to avert its own extinction. The two-track decision and the fears it has generated have had a very dramatic effect on politics in this country, in West Germany, in Italy and in the Low Countries; I mean last month's enormous demonstrations.
Your Lordships know those towns, mainly new towns in England, whose civic pride is such that they put up signposts only to their own achievements. "Industrial Estate East", "Municipal Car Park", "Industrial Estate West", and so on are shown, but meanwhile the long-distance traveller is peering vainly for places altogether further afield and altogether more interesting. However, the signposts to those places have been superseded by municipal self-congratulation. CND is like that. "To a British initiative", they proclaim; "To the expulsion of American nuclear bases from Britain"; "To a nuclear-free zone, if not in Europe then, lo! at least in Manchester". But we must drive further; we are looking for the signposts to a world initiative, to a world nuclear-safe zone (since nuclear-free is not the same as nuclear-safe), to minimum deterrents, to chemical disarmament and to conventional disarmament.
Yet I do not blame CND. It is not the marchers in the street who are lazy. The continuing outrage against human kindness, against the will to peace, against the use of human and natural resources for good, against our very hope of continuation, is colossal. CND's short-range signposts are certainly a natural reaction. I do not believe that more than one in a thousand of the half million who demonstrated last month want to give the Soviet Union an advantage, let alone want to live under its system. The rest just want to be freed from the threat of nuclear war. The initials "CND" stand for "Campaign for Nuclear Disarmament" and that is what it was, at first. I
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remember this vividly because I went on the first Aldermaston March and I edited the first two issues of CND's newsletter. Only later, at the first national conference of the campaign, was a resolution adopted—it came from the grandly named "London Region", which the noble Lord, Lord Soper, will remember—which introduced the qualification of unilateral disarmament. So then, of course, many of us had to leave, just as 20 years later we had to leave the Labour Party when it adopted the same myopic panacea.
What separates CND from the rest of mankind? We all—well, almost all—desire disarmament. We all agree that the arrival of nuclear weapons makes it more urgent than ever before. But most of us want to go straight towards the desired goal, to a disarmament not only, or unconditionally, or unilaterally by this one or that of the six or seven nuclear powers in the world, but by all, and that other countries should renounce. Only the CND and its counterparts in other Western countries insist on the capricious preliminary detour called "unilateral disarmament".
Would it not be possible for CND to drop those words "unilateral" and "unconditional" and so on, which form no part of its name? If it were possible, what a great release of political energy there would be for real disarmament. There cannot be unconditional disarmament in one country; that is against the essence of the nation state. But agreed disarmament among many countries, that there can be. The first requirement is political will and any political will which is siphoned off for partial or unrealistic solutions reduces the will for real disarmament.
I started by mentioning a number of crises which had afflicted the Atlantic alliance in the last 30 years. I pointed out that we are in the middle of one now. But, as one picks one's way out of each crisis of confidence, one must be careful not to sow the seeds of the next. Is there by chance another one already in the offing? I fear that there is and I have already hinted at it. It was raised by Mr. McNair-Wilson in the House of Commons last week and again by my honourable friend Mr. MacLennan and was handled gingerly, but in a way that spoke volumes, by the Foreign Office Minister who answered the debate, Mr. Douglas Hurd. It is quite simply this: why do we West Europeans allow the Americans to negotiate over our heads about the removal, or not, of weapons which stand (or will stand) in our countries?
Some say we must allow them to do this because the Russians would never allow the Poles and East Germans to sit with them on their side of the table if we sat with the Americans on ours. But is that really a problem? Do we have to disfranchise ourselves for fear of embarrassing the Russians? I cannot believe it. The soil is ours; the risk is ours; the remedy must be ours, too; our Parliaments and peoples must this time be allowed to know what is proposed before decisions are taken and must approve those decisions. There is no need to elaborate further: clearly the sad procession of crises could only too easily be succeeded by yet another, as public opinion latches on to what is happening, or is going to happen.
My Lords, I have spoken often about disarmament in this House. It is not mere blinkered persistence on my part which makes me do so again—and from this

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Bench. It is the fact that, once again, it is the burning issue of defence and foreign affairs. The SDP will do what is in its power to obtain real disarmament in the world and in the meantime to ensure that our weapons procurements and our defence policy in general are such as befit a country of our size and one in our position. We must never be provocative nor ever less than firm in the protection of our interests, while we work as best we can to achieve the improved security at a lower level of cost and risk which only real and mutual disarmament can bring us.
Lord Kaldor: My Lords, before the noble Lord sits down may I ask for one point of clarification? Would he extend the strictures which he made concerning unilateral nuclear disarmament also to the renunciation of the first use of nuclear weapons—not the possession of nuclear weapons but the first use'?—because I think that is a very important distinction and it is important to know where people stand on this issue.
Lord Kennet: My Lords, if I understand the noble Lord aright, in answer to him I would say, no, I would not join with him in denouncing a strategy which involves, in certain circumstances, the first use of nuclear weapons, unless and until he and I are able to get the countries of Western Europe to raise enough conventional troops and weapons to do without it.
4.58 p.m.
Earl Cathcart: My Lords, today's debate in response to the gracious Speech has been allocated to foreign affairs and defence, and it is only right that pride of place should be given to the many international problems which confront us and that defence must naturally be—and hopefully will remain—a subordinate part; but so far in today's debate every speaker has concentrated on this vital subject of disarmament. That, and also the number of men and women who parade in the streets in support of the CND, show the grave anxiety which exists in this country today and, as the right reverend Prelate the Bishop of Durham has said, we need to get some success in the field of disarmament, which we can all understand, at a very early date. May I also say that the right reverend Prelate's experience in Amsterdam will be quite fascinating and we shall watch what might come out of it with great interest. The problems of defence are giving rise to urgent discussions and many of the cornerstones of our defence policy are being subjected to doubts and anxieties, often, as the noble Lord. Lord Chalfont, has said, amid much confusion of thought and misappreciation. Therefore, because this subject has already been covered fairly widely in the debate so far, I propose to speak only very briefly. I am not going to attempt to discuss the many new aspects announced by the Minister of Defence in his still recent Defence Review. But in saying that I must make the point that in my opinion we need to hold a purely defence debate in your Lordships' House in the near future, if not to discuss defence matters as a whole, then surely on some of the more important problems thrown up by that Defence Review, such as, for example, security and defence of these islands or the protection of our vital sea routes.
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The gracious Speech referred strongly to the importance attached to the preservation of peace and, as we have heard this afternoon, that is agreed by everybody; but where some of us differ is as to the way to achieve a sound and lasting peace. Nobody doubts the sincerity of those who strive for peace by whatever means, but one must doubt the soundness of the method proposed by some. I firmly believe that a long-term satisfactory peace can only be achieved across the negotiating table with agreements properly supported by safeguards on both sides. As my noble friend Lord Carrington said in his Churchill Memorial lecture, a part of which he has repeated again today, unilateral disarmament will remove the Soviet incentive to negotiate seriously.
A very large group of men and women, to whom the last weekend truly belonged, are our ex-servicemen and women and their families, who know at first hand the horrors of war. I was privileged on Saturday night to attend the Royal British Legion's Festival of Remembrance at the Albert Hall. Outside the main entrance to the hall as we assembled there was a demonstration with banners which read "Action for Peace and the implication was that the very large number of ex-servicemen and their families who filled the Albert Hall were there to glorify war. In fact, of course, the exact opposite is the case. The ex-servicemen are there to remember the countless thousands of their comrades who were killed or maimed in the struggle to preserve peace and decency, and who strove to provide the chance to establish a better world. Their Festival of Remembrance was a reminder that we must all endeavour to ensure that this sacrifice was not in vain. The Festival of Remembrance in the Albert Hall is just as much action for peace as the presence of demos on the pavement outside. Thus, both are sincerely striving for the same objective, but neither group can easily follow the other's method.
The gracious Speech referred to several disarmament negotiations which are either currently taking place or are scheduled to begin shortly. Success in these negotiations cannot, and indeed must not, depend solely on the skill of the various negotiating teams, but rather success can only be achieved if the leaders of the national Governments concerned have the will to negotiate and the confidence to negotiate with all the countries present at that negotiation. But this sense of mutual confidence is far easier to prescribe than it is to achieve. In a recent Starred Question at the end of the last Session the noble Lord, Lord Brockway, suggested that Her Majesty's Government should, by taking an initiative, break the deadlock at the mutual balanced force reduction negotiations in Vienna. Certainly progress in these negotiations has been slow. They have been conducted for eight years, so far with very little to show. Perhaps these particular negotiations which deal with conventional forces, are waiting for some movement in the nuclear disarmament field before they can proceed.
Earlier this year I had the privilege of attending a very short and formal session of the MBFR negotiation in Vienna. The forum which I observed has without doubt all the ingredients of success, since each country in both NATO and Warsaw Pact alliance is represented by skilful negotiating diplomatic teams. What is lacking so far is the will and direction from all the Governments concerned to achieve the perma-

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nent success hoped for. As the noble Lord, Lord Trefgarne, told us in his reply to that Question, the main stumbling block in these negotiations has been the data problem, that is, the problem of agreeing on the strength of existing force levels to the satisfaction of all parties involved before discussions begin on equitable force reductions. That is typical of the sort of problems that arise in these disarmament situations.
There is also the problem that confidence in these reductions cannot be achieved until adequate measures of verification can be established. But even while these talks have been going on the Warsaw Pact has dramatically increased its preponderance in tanks and aircraft and, on the sea, in submarines. This has been clearly outlined in every successive annual Statement on Defence produced by both major parties during the past eight years or more. It is for that reason that I agree with the Government that at this stage we cannot take action which weakens the current defence posture of NATO, and that we must maintain our policy of deterrence.
There is currently much discussion about the use of nuclear weapons and the decision to opt out of their use. We certainly all wish that this awesome weapon had never been invented. But it has been invented, and the ability to make it and to deploy nuclear weapons is now possessed by several nations and is no longer a monopoly of the few. We must accept this fact. And the discussion is aggravated by the highly complicated theories on the strategic and tactical use of this frightful weapon and the political implications of how and where it may he deployed. These problems are bedevilled by such theories as flexible response and General Haig's warning shot over the bows. The fact remains that the weapon exists, and as long as both sides have it the threat to use nuclear weapons must remain an essential part of NATO's deterrent until a sound and accepted disarmament treaty has outdated it. I must repeat again what the right reverend Prelate the Bishop of Durham said. We must have a success in these important nuclear disarmament negotiations in the fairly near future because the people in all countries are getting extremely anxious about the situation.
Finally, on a purely defence aspect, the gracious Speech referred to increased expenditure on defence which would be put to the most economic and cost-effective use. Does this represent an upward adjustment to the recent Statement on Defence? Will it be allocated to any particular aspect of defence or any particular weapons system? I very much hope that my noble friend the Minister, when he replies to this debate, will feel able to expand on this aspect of the gracious Speech.
5.8 p.m.
Lord Stewart of Fulham: My Lords, I think we all have reason to be grateful today both to the noble Lord the Foreign Secretary and to my noble friend Lady Llewelyn-Davies for the distinguished and impressive speeches with which they began this debate, setting out, though from different viewpoints, the major issues that we have to weigh up when we debate foreign affairs. I noticed that my noble friend Lady Llewelyn-Davies laid special stress on the problem of proper relations and understanding between this country and
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the United States, and the various misunderstandings that have sprung up of late.
Some of those have been concerned with the Middle East. It appears to be the view in some quarters in the United States that the Foreign Secretary was perhaps over-zealous in his championing of the Saudi peace plan. I would say this myself about the Saudi peace plan. I think it does to some extent represent an advance on previous Arab pronouncements. But it is still true, if one reads through the proposals, that everything which is of a kind to reassure and encourage the Palestinians is stated in the most firm and unambiguous terms. Everything that might possibly encourage the Israelis is guarded, implicit at most, uncertain and of a nature to which no country could possibly pledge its security.
I hope, therefore, that the Foreign Secretary will bear this in mind in his future handling of the matter and remember that the anxieties which Israel feels about this whole question are not merely the product of obstinacy. Critics can, I think rightly, attack a number of positions taken up by the present Prime Minister of that country. But even when one has made all those criticisms it still remains true that in the argument between Israel and her Arab neighbours, Israel, if things go wrong, stands to lose everything: that is not true of any of the Arab states. Israel's need for reassurance, therefore, is greater than anyone else's.
I think it is fair to say that this matter is perhaps a little better understood at present by the United States Government than by the British Government or by the European countries. I hope that they will make every endeavour in the further handling of this matter to keep in step with the United States, because although I do not write off what Europe can do in the Middle East, it is quite certain that unless we work in harmony and understanding with the United States we cannot produce any result there.
The other areas in which there have been misunderstandings between ourselves and the United States recently have been over defence and in what circumstances certain weapons might be used. I think that part of the trouble arises from the fact that, whereas this country is a Crown Republic, America is a constitutional monarchy and the relations of Ministers, one to another, as one can see from Mr. Kissinger's account, do not represent the ordered and firmly understood relations of one Minister to another: they represent the manoeuvrings of courtiers to get greatest influence with the monarch. That is why occasionally the remarks of first one American Minister and then another are a little difficult to add up. We must be patient and wait until something clear and definite emerges, as I am quite sure in the end it will.
A good deal of the misunderstanding has been due to the fact that people will make what seem to me totally unnecessary predictions about the possible nature of a future conflict. For example, is it possible for there to be a nuclear conflict in Europe that does not spread to the rest of the world? If there is a nuclear conflict, will it destroy the whole of mankind or only some of us? Is it, therefore, necessary or desirable to have any methods of defence against nuclear attack? I say that those kinds of predictions are largely unnecessary

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because I do not believe that anyone knows the real answer.
However, one or two factors do stand out quite clearly. First, a nuclear conflict between the countries of NATO and the Warsaw Pact would be an appalling disaster. How appalling, it is quite idle to argue. It is quite clearly something which we must avoid if we possibly can. Secondly, such a conflict is not in the least necessary in the nature of things. Mankind has not tied itself into the type of knot in which it had tied itself by 1938 where conflict was inevitable. I do not believe that we have done that or anything like it. I believe that it can be averted provided it is clearly understood that there is not to be aggression in the plain and simple sense of the invasion of the territory of one country by the forces of another. We have managed to make that quite clear with regard to NATO countries. The Soviet Union understands very well that she cannot with impunity invade a NATO country. She finds, however, that she can with impunity invade certain other countries, and unfortunately has done so. It is very important, therefore, for the preservation of peace that NATO remains united, strong and coherent and it is perfectly clear that aggression cannot be committed against her.
Let us consider what has happened in the years since the war. There have, I am sorry to say, been several occasions on which communist forces have invaded the territories of neighbouring countries: South Korea, South Vietnam, Laos, Cambodia and various parts of Africa. There has been no instance where a communist country has had its territories invaded by communist forces, except where the aggressor was the Soviet Union itself against its own allies. It may not be considered tactful, with disarmament negotiations looming up, to mention this matter, but I am quite sure that what I have said is true and that it is important, and that in the last resort it is actually reassuring.
If we continue to make clear to the Soviet Union that we ourselves are capable of resisting aggression, that aggression will not occur. That will give us the time and opportunity to create gradually a surer basis for world peace than the one which rests on the balance of terror and the balance of power at the present time. However, upset that balance and we cannot be at all sure about what will happen.
The Soviet Government sometimes invites the West to give an undertaking that if there is a conflict with conventional weapons it will not use nuclear weapons. Why should we be put in that situation? We have no intention of starting a conflict. If a conflict occurs at all it will occur because there is aggression from the East. If there is aggression from the East I know of no rule that says that the aggressor is entitled to lay down in advance what weapons may or may not be used against it. If we do not want nuclear conflict, let us all refrain from aggression. We in the West have done that and can continue to do it. It is important that the Soviet Union should understand that. I think that if it is said plainly enough, and if we act in a way that shows that we mean what we say, then the aggression will not occur. That is why I think in the end that what I have been pointing out is reassuring—the possibilities of keeping the peace are there.
It is true, of course, that beyond the prevention of an
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immediate outbreak there are the long-term problems of resolving the basic causes of dispute and unrest in the world. But it is only if we can keep ourselves free from immediate attack that we shall have the time to get down to those longer-term problems. We have now approaching an opportunity for effective talks on multilateral disarmament. I do not think that we should talk as if all the efforts on multilateral disarmament have been failures or that, if they have, it is our fault: it is not. I remember very well that one of the principal things that I was engaged in when Foreign Secretary was the building up of the nonproliferation treaty—a temporary measure, but one of great value in its day and, of course, the platform on which the SALT talks were built, because it contained an undertaking by the great nuclear powers to get together to endeavour to reduce their nuclear armaments. We sweated away and got that treaty signed, and the part played by Great Britain as a country in between the great nuclear giants and the non-nuclear countries, was crucial. But no sooner had we got that than we had the invasion of Czechoslovakia. We had attempts, genuine heroic attempts, by President Carter to get a bit further along the line, and then everything was put back again by the invasion of Afghanistan.
It really cannot be suggested that if there has been failure, the balance lies equally on both sides. I stress this because a good deal of the propaganda for unilateral nuclear disarmament rests on the assumption that really it is six of one and half a dozen of the other between East and West. It is not so when there is made every possible criticism of NATO. It is true that we have striven farther and more consistently to get peace and disarmament than the Soviet Union, and we do not help the process of disarmament by pretending that the facts are other than they are. We now have this chance of real multilateral disarmament negotiations.
Having carefully considered what the right reverend Prelate the Bishop of Durham said, it still seems to me to be an unavoidable conclusion that anyone who, at the present time, encourages the Soviet Government to believe that they have only to wait and the West will disarm unilaterally is damaging the prospects of genuine disarmament in the forthcoming negotiations. I do not think that one can get away from that. It is not a question of what their motives are; none of us is particularly fitted to judge the other's motives. I am talking about the plain result of their actions. There is no doubt at all that propaganda for unilateral disarmament is the actual enemy of genuine multilateral disarmament.
I have suggested—I think more than once in what I have said—that beyond this immediate problem, great as it is, there is the problem of trying to make the world generally a more peaceful place, and that, of course, means making it a more just place. In a few weeks there is to be performed in London at the National Theatre a performance that occurs only very rarely—a performance of the whole great trilogy of the Oresteia which was first played to a human audience in the year 458 BC, and is liable to come on in this country about once every 10 or 15 years. I have therefore decided that I had better go to this performance because I am not sure whether I shall be in a position to do so when it happens again.

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What is one of the morals of that gigantic story? It is that where injustice is committed, injustice becomes almost a personified force, like the avengers of blood, crying out for the injustice to be put right; and that this will go on and on until the concept of the rule of law and justice is substituted for vengence and blood feuds. We live in a world which is full of inherited blood feuds. One of them is racialism, and the theatre of that is South Africa. The existence there of this 100 per cent. racial tyranny is a constant threat to the peace of the world. In the longer term, there is a different kind of injustice, an injustice that nobody deliberately wills but which exists none the less—the injustice of the unequal division of the world's wealth between what is commonly called North and South. There also lies one of the great threats to world peace.
Therefore, we must apply ourselves, first, to an active, concerted policy, through the United Nations, not against South Africa but against apartheid—an attempt to make it clear to South Africa that there is still a chance for her to join the comity of civilised nations, but if she does not do so the result will be disaster. When I first began to talk about this subject I thought that that might be something that would occur midway through the next century at the earliest. I see now that disaster in South Africa is a great deal nearer than that. That is one thing that not only us but all the European powers and the United States have to try to understand, and come together against.
The last point I wish to make is that, of course, we must turn the discussions at Cancun on the North-South problem into something which has more body in it. The noble Lord the Foreign Secretary said that the discussions were "cordial and constructive". I am quite willing to believe that they were "cordial"; it is not so difficult to be cordial, particularly in that kind of climate. On the evidence, I could not honestly accept the noble Lord's word "constructive", but I am very willing to believe that he may be right and that more may come of this. We must earnestly hope that it does.
5.25 p.m.
Lord Carver: My Lords, I welcome the statement in the gracious Speech that the Government will increase the resources devoted to defence, and make the most efficient use of them; and that they will continue to work for better East-West relations, for an early and successful conclusion to the Madrid meeting, and for specific, equitable and verifiable measures of arms control. Both these important groups of objectives are affected by NATO's and the Government's policy regarding nuclear weapons. There are aspects of these policies which I believe work against their stated objectives, both that of the most efficient use of defence resources and also that of better East-West relations and arms control.
On a previous occasion in your Lordships' House I urged the noble Viscount who is replying to the debate to persuade his right honourable friend the Defence Secretary to apply the same incisive logic as he applied to his defence cash problem, to NATO's nuclear strategy. It is perhaps too much to hope that he will reconsider the Government's attachment to Britain's independent strategic nuclear strike force, and I shall not weary your Lordships with a repetition of all the
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arguments that I have produced in the past against that. I would only express my surprise at the remarks that the Defence Secretary was reported to have made, first, in Hong Kong about the advantages for Britain of going for the more modern Trident system, and then those that he made at the nuclear planning group meeting at Gleneagles about the relevance of President Reagan's rather confused statement about the justification for Britain's independent force. From both those it would appear that he has joined the "more the merrier" nuclear weapons school, but I hope that I am mistaken.
The two aspects of NATO's nuclear strategy to which I hope he will persuade his NATO colleagues to apply more logic and a deeper consideration are, first, the arguments for insisting on a balance of nuclear weapons stationed on land in Europe. I would draw his attention to Professor Michael Howard's letter in The Times on 2nd November. His own Defence White Paper admitted that the cruise missile is not a military counter to the SS20 in the sense that it can knock it out or counter its effects in any way. As Professor Howard pointed out, one must take into account in this matter the ballistic missile submarines, both American and British, which are earmarked for the support of the Supreme Allied Commander Europe and whose function, as I see it, is exactly that which was described in a letter by a previous Chief of the Defence Staff in yesterday's Times, which he described as being the purpose of the modernised theatre nuclear weapons.
I would welcome the statement by the noble Lord the Foreign Secretary that the approach towards the conference at the end of November will be objective, and I believe that, if it concentrates a bit on what these weapons systems are actually designed to do rather than on merely talking about certain figures which are snatched out of the air, it has more hope of success. Therefore, I hope that he will persuade the Americans not to take such a rigid position over this that there is no hope of success at that conference.
Like the noble Baroness, Lady Llewelyn-Davies, and the noble Lord, Lord Kennet, I find it strange that we are not attending that conference ourselves. Apart from the fact, that, like all other European NATO nations, we are potential targets of the Soviet Union's systems, for quite a long time we have ourselves provided, in the RAF Vulcan force and in our own ballistic missile submarines, when they are given the role of supporting SACEUR—as they always are in Government statements—these theatre nuclear weapons systems; and I think it shows how hollow is the claim that having an independent nuclear force gets you a place at the top table when these matters are concerned, that we shall be back in the nursery with the others.
The second, and, in my opinion, the most urgent one for review is NATO's reliance on the concept that it threatens to use, and might in the event actually use, nuclear weapons of some kind—battlefield, long-range theatre or even strategic—in an attempt to stave off defeat in operations which, up to that point, had been carried out by conventional forces only; in other words, to consider nuclear weapons as compensating for inadequacy in conventional forces and to train and accustom its forces to the idea that we would in those circumstances initiate a nuclear war which we hoped would be limited.

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As I have said many times before, that is an irrational and suicidal strategy. Even if one could rely on limiting nuclear war—and an impressive list of knowledgeable people think that is very unlikely, including the previous US Defence Secretary—whatever limits one might be able to hold it to, on the assumption that the other side would reply in kind, we should inevitably finish worse off than the enemy—and all of us, of course, including the enemy would be very much worse off, if indeed we were there at all, than if we had never fired one. That results from the facts of geography and the relative strengths of our forces. It remains true, even if you apply it to the absurd concept of a demonstrative one-off shot which Mr. Haig mentioned the other day. He should not be blamed; he did not invent that theory. It was one of the silly ideas running around NATO in the time when the noble Lord the Foreign Secretary was Defence Secretary and I was Chief of Defence staff, and if my memory serves me right he thought it was as absurd as I did. One must assume that the other side would answer back in kind, even with a demonstrative shot, and it would not necessarily be in such a limited fashion, and it would be criminally irresponsible to make any other assumption.
In an interview on BBC Radio 4 on 22nd October, Mr. Caspar Weinberger, the American Defence Secretary, said:
"We've never contemplated first use. It is widely known and we have said that we do not ever engage in first strikes; that our forces and our whole strategy, our whole basis for constructing all of these things, is simply to have enough of a retaliatory response"—
a retaliatory response, my Lords—
"to deter the Soviets from ever starting".
His subsequent firm repudiation of the absurd idea of a demonstration shot seems to show that he at least has thought through his position. The question I would ask the Government is: Do they agree with his repudiation of a first strike and would they be prepared to make the same categorical statement? If so, what would then be the objection to accepting the Russian suggestion for a formal, "no first strike" agreement? That would greatly help forward arms control and significantly improve East-West relations.
But just dropping that concept by itself is not enough. NATO must accept the logic that its conventional forces must be improved. It must take this problem seriously and not just talk of marginal improvements to its existing forces. I am not suggesting massive increases in the standing forces—that would not be practical for both financial and manpower reasons. Nor do I suggest that the sort of cheap solutions being bandied about by some of the nuclear disarmers under the title of alternative strategies would be effective as deterrents to war; to contain a military adventure if the deterrent failed, or to defeat a major conventional attack. But there is something in what they suggest. The type of forces they envisage, formed from reserve manpower, would be a very valuable addition to standing forces to the type that NATO now provides; but the respective roles of standing and reserve forces, particularly of the continental countries, need to be completely re-thought, and the organisation of the
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reserves in particular redesigned. Just increasing the money to be devoted to NATO's forces as they are organised today will not make the most efficient use of resources. The gracious Speech said that the Government will continue to play an active role within the North Atlantic Alliance. I hope that that active role will be to initiate a major review of both its nuclear and its conventional strategy, tactics and organisation.
There are two other points on which I seek assurances from the Government. First, that the Defence Secretary will not be diverted from the resolution he expressed in his paper, The War Forward, by pressure from those two rather strange bedfellows, the naval lobby and the civil service unions. The second that, in discussions in Madrid and elsewhere about confidence building and similar measures which are intended to apply to Europe from the Atlantic to the Urals, there will be no attempt to exclude the United Kingdom and its surrounding waters. We are in Europe, and can only be defended as an integral part of Europe. If progress is to he made in this field, as I fervently hope it will, we must ourselves accept its application to us and to United States forces stationed here. I hope we may have assurances on those two points.
Lord Beloff: My Lords, if I do not follow immediately upon the powerful argument of the noble and gallant Lord, Lord Carver, it is simply because I feel there would be something vaguely indecent in a former private soldier in the Royal Corps of Signals challenging a Field Marshal on a matter of defence. I therefore propose to return to the main theme of this debate, which is foreign affairs, because that, as is well known, is the province of the amateur. The Foreign Secretary, the noble Lord, Lord Carrington, rightly claimed credit for himself and his colleagues for the very considerable improvements that have been made in consultation between Britain and her European allies, and rightly pointed out that such consultation and co-operation was an essential part of moving towards a more peaceful world. Unfortunately, as he admitted, and as the noble Lord, Lord Chalfont, emphasised, we cannot at the moment see quite the same closeness of view and intimacy of co-operation with our major ally the United States, and the reason is not merely that it is easier to hop to Brussels than, even with Concorde, to hop to Washington.
I am rather closer to what I believe to be the core of the Foreign Secretary's view of the Middle Eastern crisis than many of my friends in Israel. I profoundly believe that, unless there is a solution of the Palestinian problem, there can be no peace in that area, and for that reason Israel is itself under threat so long as that problem continues. On the other hand, I think it vain—and I am sure most noble Lords would think it vain—to imagine that a peace settlement of any kind in the Middle East can be reached without the cooperation of the United States of America, which has the greatest influence with all the major countries in the region with which the West has any serious contact at all. Therefore, we are obviously in something of a dilemma. This of course is increased, as the noble Lord, Lord Stewart, from his experience reminded us, by the difficulties inherent in the nature of the

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American governmental system in reaching agreements and in holding to them.
But it seems to me possible—and I say this with great deference to the Foreign Secretary—that we may be a little too surprised too frequently to find ourselves out of step with the United States, and this suggests that our ability to follow the way in which thinking and policy-making in that country are directed is a little less than perfect, and it is, I think, no reflection on the devoted and talented group of diplomats who at present staff our embassy in Washington. We have recently been able—those of us who have leisure—to read the volume of some 600 or 700 pages which contain the remarkable despatches from wartime Washington written by Sir Isaiah Berlin for submission by the then Ambassador, Lord Halifax. There one can see that at a moment of great importance and crisis, the most critical period ever in Anglo-American relations, we not only had a Cabinet Minister on the spot as our negotiator but also he was able to employ the services of Sir Isaiah and some colleagues who were able to make contacts with the deep currents in American opinion more easily than is possible for those who are confined to the diplomatic round. I would, with all humility, suggest to the Foreign Secretary that if there are more surprises, if we find our relations still frayed, something of that kind might possibly enter into the Government's thinking.
I accent this American alliance because I think it has been shown in the course of this debate on both sides of the House that we attach, not merely in relation to the Middle East but also in relation to our own defence and the defence of Europe, enormous importance to the way in which we can work out agreed policy, over defence if you like or disarmament negotiations, as the noble and gallant Lord, Lord Carver, suggested, with the United States. I would emphasise therefore—while largely following the line which the noble Lord, Lord Chalfont, took in his analysis of the peace movement, the Campaign for Nuclear Disarmament—a point which comes home very much to one if one reads, as I have been reading, the comments in the Soviet press and hears those on Soviet radio about the progress of this movement and sees what it is that is accented. We there find none of the talk which has been echoed, perfectly understandably, by the right reverend Prelate the Bishop of Durham, and is frequently echoed from CND platforms, about nuclear weapons being the death of all mankind, and no appeal to the superior interests of humanity. We find a consistent and persistent attempt to denigrate the United States in the eyes of its European allies.
I do not, partly for reasons where I follow the noble and gallant Lord, Lord Carver, believe that the cruise and Pershing missiles would be an important major additional deterrent or threat to the Soviet Union. But I also do not believe that getting rid of those missiles or preventing them being deployed is the primary purpose of the peace campaign. Its primary purpose is to dissolve the alliance, and that has been—and understandably if one thinks of the Soviet Union's history and the weakness of its ramshackle empire—throughout the post-war period the primary aim of Soviet policy. We find, for instance—and I owe these quotations to the BBC; I often feel that what the BBC listens to is much more interesting than what it actually says—
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on Soviet radio that:
"Protests are growing in Britain against attempts to dictate to Britain from across the Atlantic".
We find a few days later that those statements, possibly ambiguous, by American leaders become Washington's proclaimed intention, to turn Europe into the scene of a nuclear war. And here I cannot follow the right reverend Prelate the Bishop of Durham in his compliments to the sincerity of that campaign. I find myself, after studying it more closely, very close to the position which was outlined by the noble Lord, Lord Chalfont; it seems to me that it is disingenuous because it claims to be pushing forward a universal solution to a universal horror but in fact is always balanced against the immediate and direct interests of this country and its allies.
I find as an historian that dates are sometimes useful. I would recall noble Lords to Question Time in this House on 27th October when the noble Lord, Lord Brockway, asked the Government about their attitude to the proposed Nordic nuclear-free zone. On the same day, the Soviet Commentary on Foreign Affairs devoted itself to the alleged pressure of western Governments on the Nordic countries, and on Sweden in particular, to form part of the nuclear North Atlantic defence programme, and the broadcast concluded:
"Today there are no nuclear weapons in the region, but what about tomorrow?"
"Tommorrow" was 28th October, when a Soviet nuclear-armed submarine appeared in Swedish waters. Rarely can a rhetorical question—and I assume it was a rhetorical question—have met with such a swift, conclusive and convincing answer.
The last time the noble and gallant Lord, Lord Carver, and I met was yesterday when we both listened to a remarkable lecture, which I hope noble Lords will have the opportunity of reading in print, by Professor Michael Howard, entitled, "The Causes of War". That is an important topic which has largely been overlooked in our discussions about the admitted burdens and horrors of nuclear arms. I think Professor Howard satisfied a highly critical audience of historians that wars have very rarely—hardly ever, perhaps never—resulted either from accident or competition between weapons systems. They have arisen because one power, fearful of the growing power of another, has decided that its interests are better served by going to war than by remaining at peace. On the whole, as Professor Howard showed, even those statesmen in history who have not come down to us as tremendously balanced or as pacifically-minded, have hesitated, and often hesitated for good, before plunging their countries into war, and that long before the invention of what we euphemistically call weapons of mass destruction.
I profoundly believe that the same logic operates in the case of the leaders of the Soviet Union. I do not share the view that we are in danger of a nuclear attack, either pre-emptive or as a result of earlier actions by ourselves, and as the noble Lord, Lord Stewart, made clear, if it needed to be made clear, we are certainly unlikely to be the aggressors. What we have to fear—the only thing we have to fear, and this is why I agree with the noble Lord, Lord Stewart, and not with the Field Marshal, about not saying

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anything about the first use or any use of any weapon—is that the Soviet Union might consider that the alliance split, the countries having given up methods of retaliation, it was possible for them by pressure, by diplomacy, by the twisting of arms, to get their way, and suddenly finding that they faced an obstacle, to go to the last resort of war. That is why I, like the noble Lord, Lord Chalfont, and I believe other noble Lords who have spoken, do not regard the greatest danager of war today as being in the SS20s. Indeed, the noble Lord said how expensive the propaganda campaign in Europe was; one SS20 costs between 10 and 20 million dollars, and one can do a lot of propaganda for that sort of money. Therefore, I think that we have to come to this kind of agreement; that the danger that exists will be a danger only if we are ourselves apparently divided and disarmed; and the danger comes not from the Soviet Union, it comes from within.
5.50 p.m.
Lord Soper: My Lords, in considering the various topics set out in the Queen's Speech, I would commend to your Lordships that there is no debate in this House that the issues involved in defence are incomparably more important and ultimate than any other considerations to which we might give our attention, and already have done. Here is a matter of life and death. Here is a matter, in the opinion of many, which involves a terminal condition, possibly, for the human species—and I say that carefully, not on my own authority, which is marginal, but on the authority of people who seem to know a very great deal about it. Indeed this is an apocryphal debate, and if matters of life and death are involved, and if apocrypha are introduced, then in one sense I am entitled, or at least under some compulsion, to speak as a would-be Christian. It is on that theme that I would intervene in this debate at this time.
I am sure that the House will agree that it is not sufficient for the Christian Church, or the Christian country, so called, on Armistice Day to sing,
"O God, our help in ages past",
which contains the lines,
"Sufficient is Thine Arm alone,
And our defence is sure",
and then to endeavour to support the divine arm by the panoply and multiplication from our own human armoury. Here is, in my judgment, an issue which burkes no final compromise. I do not believe that it is compatible with the claims and beliefs of the Christian faith to embark upon programmes or intentions which involve the deterrents of terror and all the accompaniments, beastly and terrible, of modern war.
That has been a problem which has for long since been resolved in my own mind, I hope not inadequately. I claim no infallibility in these matters, not from a study of various documents in what we call the Bible, not in the so-called scientific evaluation of history as presented by the Marxist, not even in the authority vested in the Vatican. What I believe, however, is that it is high time that, in the light of the evidence which is available, whatever other compromises and issues are still sub judice, we no longer delay making up our minds as would-be Christians
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as to the fact of war and its total incompatibility with the profession of the Christian faith. I do not want to break even a gentle lance with my Lord Prelate of Durham, but I should have thought that we have had enough conferences already, and that if we have not yet made up our minds, it is high time we did, and perhaps we have not much time left.
It is no sufficient answer to do what the Marxists sneer at, and quite properly sneer at: our attempt to garland the fetters under which we suffer, and to pour holy water on activities—baptism even by hosepipe— which of themselves are immediately and fundamentally contradicted by the spirit and teaching of Jesus. That is why I try to be a pacifist, and that is why I would approach the question of defence in the light of what I am compelled to believe as a cardinal principle of the Christian Church. Though I am very much unworthy to profess it, and to recognise the many differences that exist among decent-minded Christians as to the proposition, I feel it only proper, if I can do it humbly, to present in your Lordships' House an answer other than those which have hitherto been proffered.
There are two areas in which to obey the Christian gospel can be envisaged, and they are very different. In many respects it is possible personally to follow out the teachings of Christ by his grace. If you lie, you can tell the truth. If you are a thief, you can stop thieving. It is therefore within the personal ambit of people very largely to follow out the teachings of their faith. But the moment that we envisage the world in which we live and become parts of it, as inevitably we are, then a very different set of circumstances prevails. This is the world of inevitable compromise. This is the world in which our own intentions are necessarily involved in the practices of others. It is in that world that the Government are endeavouring to pursue a policy, and I note in many respects sincerely endeavouring to pursue it, which is complicated and difficult, and one in which it would be impertinent for anybody to say that the clear injunction of, say, the Sermon on the Mount can immediately be carried out in the Councils of Europe and in the affairs of the world in general. It cannot so be.
But there are two areas in which I believe this particular dilemma can at least be faced and, in large measure, can be resolved. To my astonishment I noticed that the word "disarmament" does not appear in the Queen's Speech, but I believe that the issue of disarmament is the way in which a practising Christian can in fact fulfil what he believes to be his honest duty and at the same time recognise that he lives within a context which prevents a hundred per cent fulfilment of that duty. Therefore I would attach what I have to say now to three areas in which I believe that disarmament has to be envisaged, two of which I consider are ineffective, while the third that I profess is the pacifist one, which I would seek to argue as cogently as can in a very short time.
I do not believe that multilateral disarmament is a policy. It is an ambition. It might be an achievement; of course I hope that it will be. But psychologically (if I may use that word) I am quite sure that multilateral actions are the fruit of unilateral initiatives. I am sure that this is true. To wait for some bright morning, when automatically, inevitably and simul-

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taneously, everybody hitherto in contention will say that they have had a vision in the night and that they would like to agree on propositions to which they were totally opposed, say, last evening, is not the way that it happens. The sorry story of the multilateral attempts over the last 20 years has not produced the proximity of peace. In fact I should have thought that the condition at this moment is far more serious and deadly and terminal than it has ever been—
Lord Kennet: My Lords, I wonder whether the noble Lord will allow me to intervene?
Lord Soper: Yes, of course.
Lord Kennet: My Lords, I should like to ask the noble Lord whether he can name a multilateral disarmament negotiation which has taken place in the last 20 years?
Lord Soper: Yes, I can, my Lords. For instance, I can indicate the programme that was offered by the Soviet Union for inspection and reduction of armaments. That was in, I think, 1957—
Lord Kennet: In the last 20 years.
Lord Soper: Well, in the last 20 years, No, I am not in any position to give the noble Lord a particular answer, but I should have thought that this is by no means a denigration of the argument. What I am saying is that in principle what has happened is that every attempt that has been made has in fact produced only a more serious condition than that which preceded it.
Lord Kennet: Surely the noble Lord will admit that his inability to answer is due not to his ignorance, but to the fact that there have been no multilateral disarmament negotiations in the last 20 years.
Several noble Lords: SALT I and SALT II.
Lord Kennet: I used the word "disarmament". There is no disarmament in SALT I or in SALT II.
Lord Soper: My Lords, I think that we are becoming semantically rather confused. I am talking about attempts which have been made consistently on both sides to arrange for meetings, as a result of which programmes of disarmament could be envisaged and could in fact be undertaken; and I am perfectly sure that that has happened over and over again.
What I would continue to say is that just as I am satisfied that multilateral disarmament must be preceded by some unilateral act, so I find myself increasingly troubled by the prospect of unilateral nuclear disarmament. I walked around, sat down and got temporarily arrested in CND years ago, and any reduction in the fearsome weapons from which we suffer or are about to suffer today is entirely agreeable to me; in fact, it is my earnest desire to see these things happen. But what bothers me is that you do not necessarily create that kind of moral fervour and dynamic when your sttitude to war is very largely compounded of a fear of the terrible results of the
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nuclear threat without at the same time generating a moral sense of abhorrence of the whole process of war itself.
I do not share the general attitude of the noble Lord, Lord Chalfont, to Russia. I think he is playing cowboys and Indians, as some other people seem to be doing, saying that there are the "goodies" and the "baddies". May I interpose a comment on that? When I visited Leningrad some time ago I was taken into a great hall. On one wall of that hall was a huge ceramic map of the world. I looked at it—it was a very fine piece of ceramics—and then I suddenly discovered that there was something wrong with it. These rascals had put Russia in the middle of the world, whereas I knew very well that Great Britain is in the middle of the world with Russia on one side and America on the other! But it looked much neater that way, and it gave a good deal of support to the proposition, which might appeal to many a Russian today, that he is surrounded. It looks much more like a surrounded empire from that standpoint.
Furthermore, may I interpose one other comment? I wonder whether your Lordships know that the Russian Orthodox Church now issues a magazine in English. Up to about four years ago it was issued only in Russian and therefore I could not read it, I could just look at the pictures; but now I can read it. Alongside the strictures, with which I do not necessarily disagree, I think there is an increasing number (there must be from the articles I read in that publication) of ordinary people in Russia who would earnestly desire the very things that we desire and which we believe they are prevented even from understanding. I believe the bamboo and iron curtains would be impenetrable so long as disarmament in the West were nothing more (excellent as that would be as a process) than the elimination of certain forms of horrific warfare. They might indeed stimulate further experiments in bacteriological and other kinds of warfare—who knows? In any case, nobody tells the truth about arms; it is an impossible thing.
Therefore, alongside the faith which I venture to profess I would also add my conviction that the pacifist argument is the only one which can in fact generate such moral response among the millions of people today throughout the world who are anxious and yearning for the opportunity to put an end to the fear which now haunts them. If this is an impossible solution, then I believe that the Christian faith has been a delusion. I cannot believe that, and, therefore, whatever the risks involved, I must make my testimony, as I do again today, to the value, to the necessity, of the renunciation of the use of violence as a means of social change. I believe it could evoke a response hitherto unknown among the peoples of this world who are now in the suffering and agony of the prospect or experience of warfare and its dreadful consequences, which, as I say, in the opinion of many people who seem to know, has now reached a terminal stage even for the human species itself.
6.4 p.m.
The Marquess of Salisbury: My Lords, I do not feel qualified to follow the noble Lord, Lord Soper, on the moral issues involved in pacifism and armaments races, but I must say that I would feel much

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happier about his argument if we had not seen this massive build-up of Soviet arms over the past few years. If he is right in saying that if we disarm others will do so, I would have thought that we would have had some response from the Soviet Union before now. Meanwhile, I would have thought that if we followed his proposals we should be subjecting ourselves to the possibility of being taken over by the Soviets and of the Christians in this country being subjected to the same pressures that they receive within the Soviet boundaries.
I do not know what Christian church he was referring to in the Soviet Union, but I understand there is an official church, which is frowned upon in some areas, as well as an unofficial, perhaps underground, church which is still persecuted. It seems to me that if we followed his argument the same might happen here. I much prefer to stand up and fight for the Christian principles such as I have been brought up to believe in. I know that even in our Church the words "church militant" are no longer popular, and have been omitted from the more recent editions of the Prayer Book, but I still believe there is a great deal to be said for standing up and fighting for what you believe in.
I had not been intending to speak about that side, and I wish to confine the rest of my remarks entirely to the position of the black African states in Southern Africa and to their relationship with the Commonwealth and the United Nations, in the context (in spite of what the noble Lord, Lord Soper, said) of what I regard as Soviet expansionism. To my mind the Soviet aims in Africa are twofold: first, to cut off the communications of the West; and, secondly, to make inaccessible or more difficult essential raw materials. In both cases this involves removing the white presence, or at least the control of the whites, in South Africa itself. So far as the second consideration is concerned, if we cannot get essential raw materials the whole of the industrial West will be brought to its knees. If we can get them at an increased price, we have only to consider the position in which we found ourselves as a result of the recent massive rises in oil prices. If you coupled that with further increases in the price of raw materials, our economic positions would be parlous indeed. So it is in relation to that that I should like to look at the position of the black states.
The Russian presence, either directly or indirectly, has increased in Africa quite considerably over the past years, and obviously at the same time the white influence has been eroded. We now have a position in which we have Cuban mercenaries in Angola and in Mozambique, and I now understand that there are said to be several hundreds more in Zimbabwe. I wonder whether the noble Viscount who is to reply can give us any further information on this. Clearly this is establishing a frontline base for the Soviet bloc, and it does not very much matter what happens behind because they are able to impose their influence as a result. So the line attacking the West, as I see it, has moved steadily southwards.
The final objective is South Africa itself. The ostensible reason for attacking South Africa is the existence of apartheid. Whatever view one has about apartheid—and we all have very strong reservations about it—I think it is only right that we should consider
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what the alternative is as it has developed in other states where white influence has been minimised, and should ask ourselves whether this will not happen in South Africa as well. I think I am right in saying that in every case where black Governments have taken over the standard of living has been reduced for the general run of the inhabitants. The services—education and the medical services—have all deteriorated; and, worst of all, the maintenance of law and order has become very weak indeed. So much so that very serious troubles have arisen.
In spite, in many cases, of grants in aid, it has been impossible for these countries to make any progress, or even to feed themselves, although in colonial days they were able to do so. I am forced to the conclusion that they were better off under our Government than they are under their own today. If we look at what is happening, we shall have to try to work out how best to help these people. They are always asking us for money, but the money does not seem to go very far. We have been pressed and threatened to give more and more, yet I think that all we do is to stave off starvation. What we ought to be going is ensuring that the money is spent on capital investment to improve the general economy. But there is at the moment, as I see it, no sign of this happening and at the same time as all this goes on the condition of the people continues to deteriorate. Is it right that this should continue? I would submit that we ought to be giving aid but ensuring that it is properly spent—and that involves supervision of the expenditure and supervision of the work being carried out on the spot. To my mind this means inevitably that there must be white participation in some form. I do not think that it is unreasonable to suggest that we should see that our own money is being spent properly rather than see it go down the drain and being constantly asked for more in a never-ending run.
I have said that these Governments have not been very successful. We also ought to consider the competence of their leaders. Perhaps I could give two or three examples. Let us take Zambia. When President Kaunda was anxious to restore order in a certain village where there was a sect led by a woman called Anna, he found the simplest way was to round up the whole village, put them behind a fence and set fire to the lot. This is not a very equitable way of behaving. In Tanzania there were massive murders some years ago under the leadership of President Nyerere. This was his method of dealing with opposition. More recently we have had the record of events in Uganda—first, the deplorable régimeme of Amin, which was replaced, with the aid of Tanzanian troops, by the present régimeme of President Obote. I am told that conditions there are terrible and the behaviour of the Tanzanian troops unbelievable. President Obote's oppression, if not worse than, rivals that of his predecessor. A friend and neighbour of mine, who was out there on a mercy mission, told me that the general cry is: "We would rather have Amin back".
My Lords, this is not a happy state of affairs but this is what has come out of the granting of freedom to these states. It seems to me that we ought to take a much firmer line. As I understand it, Her Majesty's Government—and this goes for whichever party is in power—have consistently said that we must do nothing

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to exacerbate the situation. But by doing nothing we let things drift and all that happens is that we are asked for more and more money to support these rather unsatisfactory régimes. I would suggest that we should attach strings to the money that we give and have a return for it. The reaction of the blacks politically, and perhaps fiscally, comes through the Organisation of African Unity and is to go on bullying and cajoling the West to provide more money and threatening to go over to the Soviet bloc if they do not get it—not that they get very much out of it; for the noble Lord, Lord Carrington, said in Moscow that this country alone supplies more in the way of aid for the third world countries than the whole of the Soviet bloc put together.
It seems to me that we ought to stand firm and insist that if they want the money, we have a right to see that it is properly spent, that they behave themselves and look after their subjects in a way that we will find acceptable. The numbers of complaints in the press here when there is some small incident affecting the blacks in South Africa is unbelievable; but nothing is ever said about far worse things which happen further north in that continent.
This brings me to a consideration of their relationship within the Commonwealth. The Commonwealth Conference seems to he an opportunity for banging the big drum and asking for more and more from this country coupled with abuse of our behaviour. Surely the time has come for this to stop. We must ask whether the Commonwealth in its present form is a worthwhile institution, whether, so far as we are concerned, it has any merit at all, and whether it would not be better for us in this country to bring it to an end. We have a similar problem with the United Nations where of course we are dealing with a bigger organisation. There we have an amalgamation normally of the black and red blocs who band together to attack the whites; and anything that they can do to do then down will be, they think, to their advantage. This is very different from the concept under which the United Nations was originally constituted. Its aim then was to maintain peace; the aim of the bulk of the members now seems to be: "What can we get out of it? What can we think of next to ask for?" They do not bother at all about whether there is peace or not.
We alone cannot deal with the Soviet bloc—we can take part with the West in standing firm together and resisting unreasonable demands—hut we are in a position to do something about the African bloc. I would suggest that the time has come to reverse the policy that we have pursued to date; to take a firmer stand and to see how much more pressure we can exert in return, rather than waiting to be hit ourselves. I hope that we shall see a much firmer attitude in the future.
6.17 p.m.
Lord Shinwell: My Lords, will the noble Marquess forgive me if I fail to follow him on a subject in which he is a notable specialist? For myself, I am just a novice, perhaps an interested spectator. I would rather refer to a habit I formed many years ago from which I am reluctant to depart. It is that when I respect a person, and particularly a colleague, who is subject to harsh criticism, then, even if I disagree with him, I am inclined to rally to his support—and I refer, as I suppose
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colleagues will anticipate—to our distinguished Foreign Secretary. I hope that he will not be unduly embarrassed by my observations. After all, I have known many Foreign Secretaries in my time. Although I have had respect for many of them and was intimate with some of them, politically, of course, nevertheless have been fully aware of the complications of an international character in which they were involved. A Foreign Secretary is not unlike a Minister of Defence. He is full of anticipation, particularly at his starting point. All he discovers are the intricacies, and the complications and that problems exist.
In the case of a Minister of Defence, he is always unpopular for the simple reason that the British character, although occasionally aggressive, is on the whole compassionate and there is no desire to enter into confrontation with the people of any other nation. If they can remain outside the conflict, they would prefer it to going inside, even if this means facing the consequences. The Foreign Secretary has been exceedingly industrious since he occupied his distinguished post. There have been many ramifications, negotiations, discussions and, if I may dare say so, a great deal of wishful thinking; of hoping for the best, of expectations. But he must never make the fatal mistake of allowing himself to succumb to the blandishments of the senior people in other countries who are seeking to use him to their own advantage. A Foreign Secretary must be like an ambassador: as dishonest and cautious as it is possible to be in the interests of his own country.
I have a complaint to make—I make no bones about it. We are having a debate on the twin subject—they are correlated or course—of foreign affairs and defence. It is bound to lead to something in the nature of a dialectical jungle. There are variations in opinion; alternative suggestions about strategy and the use of weapons. We are familiar with this kind of situation. It would have been far better to have allocated two days, one on foreign affairs dealing with our commitments, obligations, hopes and expectations, concerning ourselves in relation to every other country on earth, and another day when we could discuss defence.
Here I venture to ask a question. I was about to say "at the end of this debate", but I would rather use the term "of our deliberations" because there have been excellent speeches but sometimes no debate, no argument one way or the other. At the end of our deliberations the question may appropriately be asked What contribution have we made to the security of the United Kingdom? That, I maintain, is the primary consideration. We can be as friendly as we like or as we are able to be. We may seek consensus through negotiations with other countries. But primarily, and indeed deliberately and emphatically—and one ought not to be afraid to say it—we are concerned about the interests of the United Kingdom, the security of our people and our country.
What contribution have we made in that direction? There have been suggestions about the alternative use of weapons, of strategy in war, or conventional war, to which I venture to make this observation. From such study of history as I have made—no doubt it is similar to that of many of my colleagues in your Lordships' House—of the Boer War, the First World

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War and the Second World War, I have discovered that the right course of action in war, if one is seeking security, is to use every kind of weapon available and to use every possible friend and ally at the same time.
I hope that is clearly understood. I have said it not to be pointless but to direct attention to what surely is obvious to all my colleagues: namely, if we were faced at any time with aggression by the Soviet Union or any other country—whether conventional or nuclear—we would require all the vehicles, facilities and weapons at our command and every friend. Why do I mention that? It is because one aspect that we cannot afford to regard is the strength, resources and friendship of the United States of America.
I would say to our distinguished Foreign Secretary that if he has to make a choice some day or other—and it may come soon—either as regards the world situation, the Arabian situation or the Middle East situation, or the possibility of Russian aggression, he must, above all, consider for how long it will be possible to maintain the strength of loyalty of the United States of America.
I am well aware that there is a considerable resentment about some of the activities to which the noble Lord, Lord Chalfont, referred, and so did other colleagues, going on in the United States, probably on the Irish situation. One can understand that. Anybody who has read Irish history, who has read about absentee landlords, or the persecution, evictions and all the rest of it, must realise that the bitterness that was created in the past still remains. After all, we forced thousands of the Irish to emigrate to America. They recall the events associated if not with themselves, with their forebears. The bitterness is there.
I would disregard it. Why, my Lords? In the interests of our alliance that must remain. Irrespective of differences of opinion, resentment or bitterness, that must remain but we must associate that sentiment with a situation which confronts us in relation to other countries. I would say this to our distinguished Foreign Secretary: Despite all his efforts since he occupied this distinguished position, he has not—and I do not blame him—been an unqualified success. Certainly not in the Middle East; certainly not as regards Afghanistan; certainly not regarding any other part of the world in which he has been associated. He has tried, he has endeavoured and he has done his very best, but he has not been an unqualified success. That, my Lords, is why we have to return to the subject of defence. If we cannot succeed by consensus, if we cannot succeed by negotiations, if we cannot succeed by convincing those generally opposed to us to become more friendly, then we must have regard to our defence situation and strategy.
I will not enter into alternative weapons that may be used in the event of war, aggression, as so many others have entered into this aspect. I am sorry to have to say this in the presence of my colleague, my noble friend, Lord Soper. I have the highest respect for him. Not for a moment would I doubt his integrity and sincerity, but I disagree with him completely. I set aside any possibility of acceptance of the concept of unilateral disarmament. I do it for this reason—I have said it before and I repeat what I have said—that we must
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first come to some conclusion about the proper definition of "unilateral disarmament" and how it is to be carried into effect. That has never been seriously considered. When people talk about unilateral disarmament, they simply say, "We will abolish our weapons and that will set aside our potential enemies." It would do nothing of the sort, even if we could abolish our weapons; and the idea of abolishing those nuclear weapons that have been created at enormous expense is just futile. When it came to the crunch, we would reject the idea at once, in spite of demonstrations.
Here I would venture to interrupt myself, having mentioned demonstrations. Reference has been made to these and it has been said—I think by the noble Lord, Lord Chalfont, and others—that we are afraid of these demonstrations, of people gathering in great numbers, protesting about the use of nuclear weapons and about the horrific consequences, as if we are not well aware that if those weapons were ever to be used we should be destroyed. That is acceptable. When I say that it is acceptable, I mean that we cannot avoid it and we will take what comes to us.
I remember the First World War, and I also remember this. Before the First World War, there were demonstrations all over the country. Mr. Asquith had to endure them. Lloyd-George had to put up with them, and so did the first Liberal Cabinet and those in authority. Not only did we have demonstrations; we had industrial strife, and that is something more. The International Socialist movement, consisting of the United Kingdom, Germany, France and a few other countries in Europe, decided unanimously that if war came there would be a general strike. But the war came and there was no strike; nor were there any more demonstrations. I would advise that we disregard efforts of that kind. We can understand them, but to allow us to be sublimated by demonstrations and manoeuvres of that kind, however sincere they may be, would he a blunder and that must not happen in this country.
I want to put a few questions on the subject of defence to the Minister who is to reply. First, there must be no unilateral disarmament. Multilateral disarmament, Yes. We have had it before. We had the 1957 White Paper, for which the noble Lord, Lord Duncan-Sandys, was responsible, when we departed from conventional strategy and decided to accept the nuclear weapon. We have now come back to both conventional and nuclear, as the case may be, depending on the circumstances.
Is the Minister satisfied—I may not be here later tonight to listen to his reply, but I hope to read it tomorrow—that our strength in the West is satisfactory? Is he satisfied that, in the event of any aggression by Russia, or by any of its satellites—it may well be that if there is conflict it will emerge from the satellites, rather than from the Soviet Union itself—we are in a position to contend with it, to handle it and to defeat it?
What about the position of our Navy? There has been talk recently of some change of attitude about the Chatham dockyard and, maybe, the Portsmouth dockyard. These may be only press rumours, but we ought to know. I said in the last defence debate that we would have various reviews before we come to any definite conclusion. I gather from what I read, and

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from what I sometimes hear, that there is some reviewing going on at the present time. Indeed, the position can never be conclusive. We ought to be always reviewing, to try to understand our strength and to improve upon the position. That is essential.
Moreover, I should like to know something about the strength, training, prestige and loyalty of our territorial forces, because if we are faced with aggression we shall have to rely upon our territorial forces. We do not have adequate manpower outside the territorial forces, if we require it.
We ought to know what is the position. We ought to know a little more about training. Is it effective enough? Are the exercises that we have recently read about effective? These are the kind of questions that ought to be asked in a defence debate. These are the kind of questions which, if effectively and properly answered, may satisfy us that we have taken the right direction.
Finally, I want to deal with the Russian situation. I am by no means opposed to negotiations with the Russians to continue the SALT discussions, except that I do not trust them; that, even if they verified every incident, I would still distrust them. But what I do believe is that if the Soviet Union is concerned, and unduly concerned, and disturbed by the economic situation, with the shortage of foodstuffs in agriculture and the like, and if it is, in any way, affected by underground movements—not necessarily in Moscow or Leningrad, but in the country as a whole—and is worried by what is happening in Poland at the present time and what the consequences may be, there is no reason why we should not take advantage of the situation and enter into discussions with it. Whether we should succeed, I am not able to say and neither is anybody else. But we should make the effort.
In short, our policy was, and should continue to remain, to build up our military strength with all the facilities and resources at our command. That is the primary consideration. We should enter into negotiations with every other country or nation or body of people who are ready to negotiate. That is the second point. In other words, use our strength for the purpose of deterrence. I know that there has been a lot of humour used about the word "deterrence". We are told that it will have no effect at all. But it has had an excellent effect over the past 35 years and it should continue to be used.
Therefore, although I would not regard our deliberations today as making any effective contribution to our security and to the defence of the United Kingdom or our allies, or to making our allies more friendly with us than they appear to have been recently, as long as we rely on the defence aspects—and I agree that we have to discuss foreign policy and do the best we can in the way of consensus rather than confrontation, wherever the opportunity presents itself—and continue to emphasise the fundamental necessity of creating a defence organisation which can promote some measure of security for our country, then our debates are worthwhile.
6.39 p.m.
Lord Weidenfeld: My Lords, I concur with those noble Lords who consider that perhaps the gravest and most pressing issue before us right now is the creeping crisis of confidence within the western alliance—
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the relations between Europe and America in which we play such an important part. This relationship is now endangered at several points—defence, crisis management of troubled areas, North-South dialogue and world trade; endangered not so much by fundamental differences, but rather by the mounting misunderstandings and mutal misreadings of moods and thoughts which, when brought into the open, now find their expression in shrill tones ranging from petulance to passion. At the very root of this problem lies the simultaneous ambivalence of Europe's attitude towards American leadership and America's bafflement at Europe's apparent volatility.
It is clear to the regular visitor to Washington or New York that Americans—Government, media, public—feel that they can never do right by their European allies. When America is inward looking, as she was in the aftermath of Vietnam and Watergate, she is accused of sluggish indecision and urged for signs of military assurance. When a new Administration, pledged to reassert American power, tries to catch up and modernise defences and deterrents, it is suspected of bullying, haste and militance.
Of course it may be true that the Reagan Administration is taking longer than some of its predecessors to assemble a functioning team and formulate new policies, but then those who are most censorious do not themselves seem to have conclusive views or a record of determined leadership. In all contentious spheres, America has, we must admit it, most at stake as the main paymaster and provider, and possibly the most effective mediator. To an unjaundiced eye today—now—the American Government are actually moving slowly but surely towards a centrist position in defence, where its two-track policy of rearmament and negotiation is clear and sincere in human rights and towards an increasingly even-handed approach in most areas of the world.
Of course it is understandable that in those areas closest to its backyard the United States should be a bit more sensitive than elsewhere. But are we not, too? When our press and politicians find fault with United States policy in the Caribbean or El Salvador—justified criticism—we tend to forget how much we resent it when American commentators, from the pundits of the Washington Post to the drawing room anarchists of New York's Village Voice, berate us, with a minimum of hard fact and a maximum of sentiment, for our nefarious policies in Ireland.
What vex Europeans so much are the discordant voices from Washington on what theatre nuclear weapons deployed in Europe might achieve, what gruesome scenarios might ensue. What embitters Americans is that from this side of the Atlantic hostile critics should dive, like eager frogmen, into a sea of printer's ink and serve up time-worn concepts as new, menacing thoughts. Much of what Secretaries Weinberger and Haig, or President Reagan, have said, or are supposed to have said, are in fact restatements of 15-year-old NATO notions of graduated deterrents and flexible response. Claims that America is reckless in its bellicosity are particularly wounding to those who realise that there is perhaps no other democratic Government in the West, our own included, which has so many built-in constitutional safeguards curbing the executive's power to rearm.

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If we are to understand the Reagan Administration's stress on pace and intensity of military spending, we must realise that in the seven lean years after Vietnam, from 1973 to 1980, Congress severely slashed practically all requests for defence spending. In 1973, the Senate cut some of the Navy's plans by 73 per cent., the Air Forces' spending plans by 22 per cent. In 1974, Congress halved requests for AWACs and cut ballistic missiles by 30 per cent. In 1975 and 1976, it slashed most areas of defence by half and even the urgent MX and naval missile programmes were cut by over 40 per cent. Yet in the same period the Soviet Union added vastly to its conventional forces and to its nuclear armoury, not to mention the whole area of civil defence.
A more subtle and serious danger represents the state of mind and morale among many Europeans who are distancing themselves from the American defence position. The first degree of alienation is the notion of equidistance. "Brezhnev equals Reagan" said a huge placard at a Bonn demonstration. "USA equals USSR. Both mean war" was the echo in Amsterdam. When Mr. Denis Healey came back with Mr. Foot from seeing the Soviet leader he bracketed together in a television interview the invasion of Afghanistan and the pressure on Poland with American policies in El Salvador and Angola. This is injurious, insulting as well as inexact. Responsible and highly articulate public men who are only too well aware of the complex nuances must not make crude comparisions.
There is much more space given in our press to what American leaders may have said in an on-or off-the-record context than the corresponding utterances from on high in Soviet Russia. For instance, I have not noticed many references to remarks made last July by the Soviet chief of staff, General Ogarkaw, and other Soviet military experts to the effect that the Soviets pursue a war-winning and not a purely defensive strategic doctrine in the nuclear field. Nor have I seen recently any extensive comments on President Brezhnev's recent interview with the editors of Der Spiegel in which he said, among other things:
"To eliminate mobile rockets we would have to resort to massive strikes against all those areas in which we assume these rockets are placed".
The peace movement in Europe has come as a sudden shock to the Americans. I think there is some distinction between those pacifists who conscientiously object, who are unconditional in their secular faith and sectarian fervour, and those who construct a rational case anchored in erroneous facts and figures, those to whom the United States is an equal or greater menace than the Soviet Union and who brandish specious statistics which show that America's nuclear armour already exceeds that of her opponent. I think it is to those people that we in Europe, and in the United States, must prove by word and deed that they are mistaken, that the cause of multilateral disarmament, with our policies of simultaneous re-adjustments of our defence and purposeful negotiation, is a just one. I agree with the noble Lord, Lord Chalfont, that European Governments and political parties who hold this view should give the task of political enlightenment and information top priority. They must prove to the young that the multilateralist case
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is no less sincerely peaceful, no less idealistic, than the creeds of unilateralism and the campaign of nuclear disarmament but perhaps in the end more positive because it is more likely to lead to arms control disarmament and the maintenance of peace.
I have no doubt that at the very root of the peace movement lies spontaneity and passionate sincerity, but I have equally no doubt that this movement which now spreads through Europe and beyond into the United States is also fuelled by the Soviets who obviously derive the most priceless benefits. The Soviet peace offensive is gathering momentum in Europe, but nowhere more forcefully than in Germany. President Brezhnev will soon make his third state visit to Bonn in an unconventionally short time. I think Herr Schmidt deserves the fullest support of all his allies, not only in a battle of wits with the Soviets but in a struggle for the soul of those young Germans who, born after the Marshall Plan, which ensured their parents' material recovery, and after the Berlin airlift, which reinsured their political liberty, now seems to lack badly a sense of historical perspective. It must have been a black day for the alliance when surging crowds of young Germans hurled abuse and other missives at an American Secretary of State within shouting distance of the Berlin Wall.
Let there be no mistake. There is a great deal to criticise in America's policy, and we in Europe, and especially in Britain, have the right to criticise. We make our views strongly felt, but only within the family circle and in the role of unshakable and reliable friends of our American partner. There is probably no troubled area in the world where the need for a meeting of minds and concerted action is greater than in the Middle East, and especially the Arab-Israeli conflict. There the peril of lingering resentment and disharmony between America and Europe loom large.
Noble Lords have paid tribute to President Sadat. Alive or dead, he is a symbol of courage and risk-taking for the sake of peace. Camp David was a turning point and an historical achievement. It could still outlive him if both the protagonists and those standing in the sidelines so wish it. Camp David is neither dead nor moribund but is gravely endangered. The United States, Egypt and Israel still abide by it. I think historians may disagree over whether it could have been more successful sooner had the moderate Arabs been really moderate and the even-handed Europeans been really even-handed at the very outset.
To graft the Venice Declaration, as the noble Lord, Lord Carrington, proposes, on to Camp David requires almost superhuman skill. I fear the Saudi peace plan is the kind of heart transplant that defies all human ingenuity—and that regrettably includes his own. The eight-point plan as it stands asks one party to make sweeping and fundamental concessions which are explicit in exchange for one implicit reference to its right to survival. I shall not dwell on the various commentaries, the interpretations or the abusive references in the postscript to the plan—of criticism of American aid to the Jewish State, Israeli arrogance and the dogmatic insistence on Palestinian primacy among the problems of the Middle East. Of course, to an optimist the implicit Saudi avowal of Israel's right to exist is in itself a great step forward from the rhetoric of Jihad, the Holy War, which was only quite

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recently loudly re-proclaimed by the Saudis, or from the dismissive tag of Israel as being "the Zionist entity". But it is still light years behind UN resolutions 242 and 338 or even the Rogers' plan, all of which allowed for flexibility in negotiation.
The Saudi plan has the imprimatur of Price Fahd but with some of the tone and voice and style of Yasser Arafat. It may be a landmark in the history of Arab intransigence—and I do not wish to belittle it—but it is a long way from the basis of a proper working document for peace and I do not think it is a substitute for Camp David, which, given pressure on all parties concerned, could still lead to a gradual but ultimately lasting solution of the conflict. I really do not think we need to be too reverential in our response to Saudi statecraft. I admit that the Saudis have made some positive contributions in the past, not least in helping America to arrange a ceasefire in Lebanon, but quite frankly the Saudis, under their mantle of moderation, have often concealed confusion, bigotry and fear—fear that made them often the paymasters of dark destructive forces and enemies of peace and promise.
Nobody, neither the Europeans nor the Saudis, has brought the PLO to accept unequivocally Israel's right to exist. Time and again—and only the other day—Yasser Arafat reversed his attitude with a vengeance within hours of making a conciliatory gesture in Tokyo. It is one thing to regard the PLO as one of the parties eligible to participate provided they abjure terrorism and back down from their destructive covenant; it is quite another thing to declare that they are the sole legitimate representatives of all Palestinians with a claim to an independent state wedged between Jordan and Israel. Autonomy, independence, self-government, even sovereignty must be made compatible with the security of the region as a whole and I belong to those who still believe that the ultimate hope lies in a territorial compromise in the West Bank and Gaza and a confederation with the rest of historic Palestine, which is the Kingdom of Jordan.
The Americans have not basically changed their stance on the PLO, nor I am glad to see has the right honourable lady the Prime Minister, who stressed the PLO's link with terrorism at a press conference in Kuwait. If the noble Lord, Lord Carrington, wants to crown the last few weeks of his European chairmanship with a notable success he should seek to redress the rather bad relations between this country and the state of Israel; relations which in the opinions of many there and here are at their lowest ebb since Mr. Heath was Prime Minister in 1973 and are not much better than in the aftermath of Israeli independence in 1948.
I will not go into the reasons for this at great length; there is no time for detail, except to say that often the tone and style of policy is almost as important as its substance. Fortunately for the improvement of Europe's relations with Jerusalem, the arrival of President Mitterand in France may have created new and hopeful opportunities. With their customary sense of style the French have made it clear that they want to redress relations with Israel without substantively departing from a policy of friendship with the Arab world. On the morrow of his victory President Mitterand sent one of his closest political advisers to Jerusalem to lay the groundwork for a visit by his foreign minister and his own presidential visit early
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next year. To the funeral of General Dayan they sent their most highly ranking Cabinet member, Gaston Deferres, thus honouring a comrade in arms who lost his eye fighting in the ranks of the British Commonwealth forces. The French have been careful to avoid slamming the door on Camp David and they have conveyed a greater impression of Israel's security interests than others. They were the first Europeans to offer to take part in the peace-keeping forces in the Sinai within the framework of Camp David.
This brief, this frame of reference for such peacekeeping forces, has been carefully laid down in the Camp David accord. If we are to take part surely we must do it within the letter and the spirit of this brief? We must realise that this brief and these procedures are part and parcel of a negotiated agreement of compromise which resulted in the return of two-thirds of Sinai and the balance of the rest. If we are unwilling to accept this brief and these premises and the spirit of the agreement, surely we cannot begrudge Israel her right of veto?
The noble Lord the Foreign Secretary has striven very hard throughout his presidency—and indeed throughout his tenure as Foreign Secretary—to turn stagnation into flux, but I think he would only succeed if he could restore a true even-handedness and perhaps distance himself from prejudiced counsellors, those still living in the past for whom the primer for the Middle East is the White Paper of 1939 and the unchanging image of Israel, that Crusader Kingdom in the Middle Ages, washed away by history within three generations.
The Foreign Secretary has a grave personal responsibility just because he stands out as an experienced statesman in this phase of the story of Middle East peacemaking; just because he stands out as one of the most forceful of the European policy makers. It is not too late—he can do much to stop the process of denigration of Camp David, to halt the drift of our relations with Washington. American disenchantment must never become American disengagement. I urge the Foreign Secretary to do his best to influence Europeans not to deny Egypt, Israel and the United States a chance to regain the momentum of the Camp David peace process. By so doing he would not only further the cause of peace but cement relations between Europe and America and strengthen the western alliance.
6.58 p.m.
The Lord Bishop of Derby: My Lords, the gracious Speech contained this reference to an essential part of foreign affairs:
"My Government attach great importance to the Commonwealth and the United Nations and will continue to play an active part in both organisations. They will join with other countries and responsible international organisations in efforts to resolve the economic difficulties of both developing and developed countries."
We have an illustration of this in the Melbourne Declaration issued after the Commonwealth Prime Ministers Conference in September of this year, which commits us to a common approach in our battles of the 1980s with world poverty and hunger with the member nations of the Commonwealth. Let me quote briefly from its final communiqué:
"We, the heads of Governments, drawn from five continents, representing a quarter of the world's entire population, having in mind the gross inequality of wealth and opportunity currently

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existing in the world and the unbroken circle of poverty in which the lives of millions in developing countries are confined, assert our unanimous conviction that there must be a determined and dedicated action at national and international levels to reduce that inequality and to break that circle".
I hope that involves a rejection of the point of view expressed by the noble Marquess, Lord Salisbury, both about the conference and about aid. We all know something of the distress of Uganda and other African countries, but freedom to make our own mistakes as we govern ourselves is a precious possession of all men, both black and white. There is of course, no caricature without facts, but caricature is far from being the whole truth. Very many people concerned with world development welcome the initiative taken by our Prime Minister and the noble Lord, Lord Carrington, at the recent Mexico Summit Conference, which set about tackling this task of reducing starvation and proverty in two important directions. It is most understandable that in his splendid review the noble Lord was able to mention this subject only in passing.
The first important direction is in the support given to the proposal made by the host nation of the conference and two of our EEC partners for an energy affiliate to be set up with the World Bank. We know that a Commonwealth oil importing country like India is at present having to spend up to 40 per cent. of her total export earnings of foreign currency on buying the oil supplies she needs for her energy requirements. It is most urgent that she should be able to borrow funds to pay this rapidly escalating bill which is starving her own economy of the investment funds it needs. It is vital that financial resources should be made available to increase research and development not only into new sources of oil but into alternative sources of energy and fuel. Possibly the Foreign Secretary raised this vital initiative for an energy affiliate in his talks in Saudi Arabia last week. The Prime Minister supported it at the Mexico summit, assuming, as she said, such a policy would attract additional funds which would not otherwise go to the World Bank, particularly from the oil surplus countries.
The second important dicretion that many people welcome is the support the Prime Minister gave for urgent action over global negotiations on matters of trade and food policies. But there is already an opportunity, an immediate opportunity, for the Government to act on their declared conviction that trade is essential to the developing nations' strategy for overcoming their poverty. The opportunity is in the Multi-Fibre Agreement which must be renegotiated by the end of next month. The EEC Council of Ministers will meet next week to determine their policy. Under the current agreement textile imports from the poorest developing countries declined in real terms over the last four years, while imports into the United Kingdom from Japan and the United States and other industrialised countries rose by 37 per cent. It cannot be said, therefore, as is often alleged, that the loss of jobs in the British textile industry is due to cheap imports from the third world. The EEC and our own Government therefore must stand up in some way to the United States and Japan and urge them, first, to moderate their exports to the
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EEC of synthetic fibres, and, secondly to lower their own tariffs on imported textiles to the same level as that of the EEC.
We are aware that the EEC has declared itself in favour of a policy of differentiation in imports from developing countries. There is need for urgent support of the claims of India and Pakistan for preferential treatment for their imports into the EEC. In a report to the Commission on the Multi-Fibre Agreement the Conservative European M.P. for Lancashire, Mr. Michael Welsh, urged it to take a political initiative for the flow of trade in textile and clothing products without passively accepting the actions of the multinational concerns. In using their power with their EEC partners to take important initiatives on the multi-fibre negotiations, Her Majesty's Government would give a clear and encouraging sign of their determination to make their actions harmonise with their statements in support of trade with the developing countries. If they were to take urgent action at the present time, the result might be quite encouraging.
In conclusion, there are four questions that I should like to put briefly to the Government, and the answers could meet the very different concerns of both the noble Marquess, Lord Salisbury, and the noble Lord, Lord Stewart. First, I have referred to the Prime Minister's support for global negotiations on matters of trade and food policy. Twenty-one out of the 22 countries at the Mexico summit gave their support; only the United States of America stood out. Is it possible for the Government, with their own pledged commitment, to do something to open the eyes of Mr. Reagan's Government to the necessity of changing its mind for the world's sake?
The second question is: At the Summit the Austrian Government made a proposal, which was not even discussed, but it remains a vital one. It is that 1,000 million dollars should be spent on helping the developing countries to plan for action to make themselves sufficient in energy and food. Is there some initiative that the Government can take to secure that this proposal is discussed, or can they produce a better one?
The third question: We have an aid budget of around —1,000 million; —180 million of this has been given to help British firms secure contracts in Mexico and in India. The Brandt Report made a very important point about mutual self-interest. But is there a policy here to enable third world firms to secure business contracts, so that people there can benefit directly?
The fourth question is a more general one. Could the Government do something to help people here, in the Commonwealth, and the EEC to grasp the desperate nature of this world problem? It is pinpointed in the present time in Africa. The President of Nigeria told Cancun that the average African today is in the unenviable position of getting along with 50 per cent. less food than 10 years ago. Average food rations have fallen below the vital minimum. That is parallelled elsewhere. How hollow complaints sound in this country about falling standards of living.
I should like to conclude by quoting a sentence from a distinguished American theologian, Reinhold Niebuhr. He was not the kind of sentimentalist which the noble Lord, Lord Chalfont, rightly implied that some Christian teachers are. He wrote:

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"Not infrequently, the source of unity in a national community, the root of its collective self-consciousness, is provided by the experience of facing a common foe. Every national community has a common foe at the present time in poverty and starvation".
That was part of the message of the Brandt Report. Here is a source of world unity as we come to face it together, and some dynamic is required behind our facing it; and it is vital that the Church militant, to which the noble Marquess, Lord Salisbury, referred, should seek it and help the nation and the Government in it to seek it.
7.9 p.m.
Baroness Jeger: My Lords, I intervene briefly to refer to one aspect of foreign policy which is especially a matter of concern and responsibility to the British Government. We may not have as much clout as we would wish in Afghanistan or El Salvador. Certainly alone we cannot be effective in solving the drastic problems of the Middle East. But I refer to the question of Cyprus, without apology, because this is a matter of foreign policy which is especially the concern of Her Majesty's Government.
I was present at the celebrations when Cyprus became independent, and I remember with great pleasure how the noble Lord, Lord Caradon, then Sir Hugh Foot, presided over those proceedings. I must admit that the hopes of many of us were clouded with some doubts, but I do not think that any of us foresaw that there would be such a tragic and dishonourable outcome. The treaty of independence was signed by Greece, Turkey and the United Kingdom guaranteeing the independence and territorial sovereignty of the new country and providing for two British sovereign bases to be established there.
I shall not take up your Lordships' time with history. My concern is for the future. I want to ask the noble Lord the Foreign Secretary what action he is taking to resolve this tragic and dishonourable question. I say "dishonourable" because all three guarantor powers broke their undertakings: the colonels' Greece; Labour Britain; and Ecevit's Turkey and it is a bitter irony that tonight Ecevit himself is in prison for criticising the Turkish Government, and suffering a fate to which he condemned many people when he was prime minister of Turkey.
I say that it is tragic because of the human misery caused to the people of this sad island—people of all communities, old people who fear that they will never see their homes again and that they will never see again the olive trees that their ancestors planted or the cottages which they built. There is another very serious aspect. Anyone who has spent as much time as I have done on this sad island, will realise that there is growing up a generation of young men and women who are totally cynical as they see the continued occupation of their country and the meaninglessness of international law. They feel that there is no reality in the United Nations' decisions or resolutions; and no significance in the guarantees of other powers, sadly including the guarantees given by this country.
However, I should like to express a word of gratitude and appreciation to the work that the United Nations forces are doing in Cyprus in conditions of considerable difficulty. Their humanitarian work and
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their contribution to keeping comparative peace in that island is really beyond praise. However, one often gets the impression—and I know that the people of Cyprus get this impression—that the United Nations and the guarantor powers, including ourselves, just seem to hope that this question will go away. The favourite alibi, and we have heard it often in this House and in another place, is that the Greek and Turkish Cypriot communities must work out this problem between them and resolve their differences with the United Nations holding the ring. But I submit that that is not the reality of politics. It is certainly not the reality of the situation in Cyprus.
The arguments are not between the communities in Cyprus; they are between Nicosia and Ankara. We are dealing with a problem of invasion and occupation. There are not many Turkish Cypriots brought up in the comparatively democratic régimeme of the British even in colonial days, who are sympathetic to the totalitarian régime at present in Turkey. Not many of them welcome the Anatolian settlers who have been exported to them and they certainly do not welcome the Turkish soldiers who harass their daughters.
I take your Lordships' time briefly today because I believe that the moment is right for a new initiative. This is not—and I emphasise this point because we have been deluding ourselves for a long time—a parochial, communal problem: it is an item on the international agenda. There are two reasons why I think that we should take a new initiative. The first reason is the new Government in Greece which I am sure your Lordships will not be surprised to know that I welcome warmly. Mr. Papandreou has pledged himself to work for an independent and demilitarised Cyprus with the return of the refugees to their homes. I am glad that he has promised to open the Cyprus files and to reveal the responsibility for the 1974 tragedy.
When I was a member of the Select Committee of the House of Commons which went to investigate the question of the invasion of Cyprus, it was too soon after the downfall of the colonels for those files to be opened, so we were not able to see the full complicity of the fascist régimeme in Greece with the invasion. We were not even allowed, though a Select Committee of an honourable House, to go to Ankara at all. Therefore, there is a great deal more which must be revealed and I am glad that we seem to be getting nearer to a point where we can get the full facts for history.
Cyprus has been littered with disappointments and darkened by many false dawns. Every time a window has been opened it has been shut before there was any useful result and the dialogue has been allowed to run into the ground. Dr. Waldheim said on 12th September:
"A settlement is long overdue. I and my special representative may find it necessary to make special efforts and present some new ideas to sustain the momentum of the negotiating process".
I must ask: What part is the United Kingdom playing in these new ideas, in these special efforts, or have the United Kingdom Government washed their hands of this whole question?
The second reason why I think that this is the right time for us to take some initiative is, as the noble Lord the Foreign Secretary reminded us this afternoon, the British presidency of the Community. The noble

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Lord the Foreign Secretary said that one of the intentions and possibilities was to improve negotiations between NATO and the EEC, to increase the strength of co-operation and to work together for joint views on foreign policy. What joint views regarding Cyprus are being worked out? What actions are being taken? What conversations are being held with the present Turkish Government about their continuing occupation of Cyprus?
It seems to me impossible to sustain a situation where Turkey, Greece and Cyprus are all, to some degree, members of the EEC. It cannot be possible that fellow members of the EEC can suffer the occupation of one territory by the troops of another. Maybe the EEC should be spending more time on this problem because maybe this is a soluble problem; certainly it is a problem which concerns all its members.
Moreover, I think that if the EEC were to take some constructive initiative as regards this problem it might have some effect on the decision of the present Greek Government to pull out of the EEC. A large influence on this thinking among the socialist party in Greece about the uselessness of the EEC has been its total failure to deal with the Turkish invasion of a fellow member—the invasion of Cyprus.
The Earl of Onslow: My Lords, I hope that the noble Baroness will give way. Turkey is not a member of the European Community.
Baroness Jeger: My Lords, Turkey is in the process of doing so. I said "to some degree or other"; that is because I realise that there are negotiations about association going on. However, I think that the question of the EEC must come at the top of the agenda. I appreciate the concern that the noble Lord the Foreign Secretary has shown and the discussions which he has been having about the general question of tension in the Middle East. But, of course, Cyprus is part of that question. It is the Middle Eastern policies of the great powers that has made a football of Cyprus throughout history, even before Richard I used it as a victualling post on the way to the Crusades. The people of Cyprus have never been left alone to work out their own future.
But if we are to try to work out, and use these few hours today to think about, aspects of British foreign policy, it would not be a bad thing for us to concentrate just for a little while on that particular question of foreign policy which is more within our hands than some of the other larger questions which we have discussed. That is why I do not apologise to your Lordships for raising this particular point.
It might well be asked, why one should take your Lordships' time talking about a little country, half the size of Wales. But I do so because it is a symbol—not only to us here, not only to the people of Cyprus, but to the people beyond the island itself—of good faith or of lack of good faith, of the viability or of the failure of the United Nations, of the authority of NATO, of the credibility of the EEC and of the reality or otherwise of international law. If we could get this question sorted out honourably, I think that we should have taken a big step forward towards ensuring that in one small
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part of the world at least the principles of international good faith have been fulfilled.
7.22 p.m.
Lord Murton of Lindisfarne: My Lords, I wish to address my remarks to the political problems which we face in the Antartic and the sub-Antarctic, and the decision which has been taken to withdraw from active use in 1982 the ice patrol ship HMS "Endurance". I am aware that these matters were covered fully in an excellent debate initiated in June this year by my noble friend Lord Buxton. Nevertheless, it would be unfortunate if interest in something which is happening 8,000 miles away at the other end of the globe should be overlooked because of other considerations nearer home, however important and even grave the latter may be.
Inevitably, any discussion of this subject must begin with the Falkland Islands. Historically, Great Britain has been in continuous occupation since 1833, and her sovereignty from that time has remained undisputed, with the single exception of Argentina, who bases her claim to the islands on the dubious premise that she is the lineal successor of the Spanish Empire. In fact, it is doubtful whether the Spaniards ever settled those islands at all. Over the years the Falklands have had considerable strategic value for Great Britain, and in both the First and Second World Wars the Royal Navy used both harbour and base for the replenishment of fuel and other supplies. If one likes to think back, in December 1914 Admiral Sturdee with his battle cruisers demolished the squadron of Admiral von Spee off the Falkland Islands. That was 67 years ago and I suppose to most people nowadays it is just a memory in the shadows of the past. But it has probably been forgotten that in the Second World War, in 1942, naval operation Tabarin was mounted to deny a possible German occupation of the Graham Land Peninsula. Moreover, after the Battle of the River Plate in the last war the hospital at Port Stanley received British wounded seamen and our warships repaired to that base for replenishment and restocking.
In my view, it would be foolish indeed to dismiss this part of the world as now having no strategic importance. We are, after all, still a great maritime nation, and should we not be able, if necessary—and I pray it may never happen—to counter any perceived Soviet threat in the South Atlantic? After the last war interest was renewed in the sub-Antartic regions and in the Antarctic itself. In the beginning this was chiefly concerned with scientific studies and with conservation. This somewhat abstract and altruistic approach to the one remaining area of the globe which had continued virtually untouched by man was not to last for long. By the early 1950s both Chile and Argentina began to lay claim to parts of the British section of Antarctica, and it was found necessary to warn off those countries by sending Royal Naval vessels to patrol the area.
A treaty signed in 1961 by 12 nations brought some political stability to this area of increasing importance. The problem is that the emphasis in this region has shifted from the claims of little more than national prestige to that of hard economic fact. The interest lies in the product of the surrounding seas and also what lies under those seas.

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First, I deal with the product of the seas in the form of fish. Last December there were 170 Russian and East European trawlers in the Scotia Sea between the Falklands and the British dependency of South Georgia. The Russian fishing fleet is known to have taken 240,000 tons of fish in one season around this British island. I wonder what the catch was elsewhere among the island dependencies, which lie in an are some 1,500 miles long.
Apart from fish there is the harvesting of krill, a minute crustacean in swarming myriads, once the food of whales which, alas!, are almost gone. Krill is an extremely valuable source of protein and it would be possible to harvest up to 100 million tons of it each year. What a boon that would be to the underdeveloped countries.
Another exploitable product of the sea is alginate, a seaweed-based chemical for use in food processing; and I make the same comment again—how useful this would be to the undeveloped countries. The greatest attraction, however, is the possibility of oil. Traces, in the form of gas, have already been found in the Ross Sea, and the Antarctic continental shelf in both the Ross and Weddell Seas is thought to be the most promising area for exploitation.
The interest of the world at large in the Antarctic is indicated by the fact that a further nine nations have signed the original 1961 treaty during recent years, making 21 in all. Meanwhile, Argentina continues to press her claims to the Falkland Islands. The recent argument put forward is that they form part of the Argentinian continental shelf. That proposition would appear difficult to accept, bearing in mind that the Falklands lie some 350 miles from the Patagonian coast. The argument, no doubt, is coloured by the thought of oil. For good measure, Argentina has now extended her claim of sovereignty to include two parts of the Falkland dependencies; namely, South Georgia, which is 800 miles south-east of the Falkland Islands, and, to the south, Sandwich Islands, which are still further to the south-east and even more remote from Argentina herself.
What is a more difficult diplomatic situation is that within the chain of islands which comprise South Sandwich an Argentinian military mission is now sitting on Southern Thule Island without the permission or the consent of the British Government, and has been so doing for some considerable time.
Meanwhile it has been reported in The Times of 23rd February this year that Argentina has announced her biggest offshore oil strike near the Patagonian coast, and that Argentina's latest concessionary licensing block for oil exploration, termed Magalenes Este, covers an area which extends to within 96 miles of the Falkland Islands themselves. Proposed drilling in this area would straddle the assumed international median line between Argentina and the Falklands. The Times of 18th May this year stated that the Foreign and Commonwealth Office has taken the unprecedented step of publishing a notice, in the form of an advertisement in the International Herald Tribune newspaper, warning oil companies with threats of legal action if the latter take up Argentinian tenders in disputed waters. Apparently the Foreign and Commonwealth Office confirmed this most unusual step, adding that it was believed that this was the first time that the press had
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ever been used to advertise a diplomatic démarche. I suggest that this action can be likened to a form of latter-day Agadir. Using an advertisement rather than the presence of troops and guns.
Against the general background of uncertainty in the region it seems improvident of the Ministry of Defence—one presumes with the tacit acceptance of the Foreign and Commonwealth Office—to withdraw the Royal Naval Ice Patrol Ship HMS "Endurance" from Antarctica in 1982 as part of the wider decision to reduce the size of the active fleet. The Admiralty bought this 2,600-ton vessel from a Danish shipping company in 1967. She was originally the "Anita Dan" built in 1956 for use in the Baltic sea. Strengthened for operating in ice she was converted in 1968 by Harland and Wolff at an original cost of £1.8 million and sent to southern waters as a guard vessel with duties also for undertaking hydrographic and oceanographic surveys and to act as required as support ship for the British Antarctic survey.
HMS "Endurance" carries two helicopters and is armed with two 20 mm guns. She has a complement of 13 officers and 106 men, including a small Royal Marine detachment. There is also accommodation for 12 scientists. Her commanding officer acts as adviser on defence matters to the Governor of the Falkland Islands, and this little warship provides a naval presence in southern waters for six months in every year. Her last refit was as recent as 1978—in Chatham, incidentally. It has been estimated that the withdrawal of HMS "Endurance" would save between £3.5 million and £4 million annually. As two distinguished experts have writted in a recent letter to The Times, this seems a remarkably high figure. They point out that the British Antarctic survey runs two ships (one nearly twice the size of "Endurance") besides two aircraft, five Antarctic stations, and a large headquarters in Britain for about £3.25 million.
I am not in a position to know the real costs of maintaining HMS "Endurance", but what I do believe is that this is a most unfortunate decision. "Endurance" is our only polar naval vessel, and no soft-skinned warship of whatever size or power could go where she goes, nor carry out the detailed charting and other work which she undertakes in those perilous seas. Is it wise psychology, with increasing diplomatic pressure by Argentina over its claim to British territory, that we should withdraw our guardship at this present time? Will this not be a severe blow to the morale of the Falkland Islanders? Is it sensible, with the increasing commercial exploitation of these southern seas, to have no naval presence to protect British interests?
Could this decision not be interpreted by all other involved nations as a sign of declining interest in the Antarctic by Great Britain? Obviously there call be no such intention. But the best and most obvious way to prove it, in my view, is to reverse the decision to scrap HMS "Endurance". Failure to keep this little ship in being as part of the active fleet may prove in the long run to be a mistake much more costly than the sum of its annual maintenance.
7.33 p.m.
Lord Chitnis: My Lords, like every noble Lord who has gone before I shall be as brief as I can because

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when your Lordships debate defence and foreign affairs at the same time it makes for a long day. At the start I would like to say how much I support those of your Lordships who have suggested that on similar occasions in future years we should have separate days for the two subjects. But it is interesting when the two subjects are mixed together to see the difference between those who look at the world longitudinally and those who look at it latitudinally. People who look at the world in terms of East and West seem to me, on the basis of today's debate, to have enormously difficult problems to solve, but on the other hand do seem to have the luxury of starting from a rather simple set of certainties.
For example, the United States is, roughly speaking, good, and the Soviet Union is, roughly speaking, bad. Those who look at the world in terms of North and South find that it really is to them somewhat more complicated than that, and that such certainties, at least in the case of the United States, can be questioned. I found this when I again visited Central America this summer, an area mentioned by both Front Bench spokesmen from the Opposition in today's debate but not in fact by the noble Lord the Foreign Secretary when he made his rather selective selection of subjects which he wished to mention today. I can only assume that he did not mention the area because he was leaving it to the noble Viscount, Lord Trenchard, to justify in detail and at length the Government's policy in that part of the world.
I went there because of what the noble Lord, Lord Trefgarne, said in reply to an Unstarred Question of mine earlier this year. I was so surprised at what he said, particularly about Nicaragua, which was so much at variance with what others outside this House were saying about the situation in Central America, that I thought I should go and see for myself. I do not think that the cause of Nicaragua is best served by those who say that the Sandinista régime there has established heaven on earth. But those who appear to think, as some sections of the Foreign Office do, that the Nicaraguan Government is irredeemably Marxist are equally wrong. Our allies in the EEC—West Germany, France, Holland and Belgium—certainly do not think so. As far as I can make out from recent editions of newspapers I cannot believe that our Foreign Office is that much more skilled at spotting communists than people in those countries.
What one finds in Nicaragua is an honest attempt by well-intentioned people to improve the lot of a nation which has spent a generation under a very nasty tyranny. A lot of what they do is good—for example, the literacy campaign organised by a Catholic priest, the improvement in the distribution of wealth which is supervised by a Minister who is a member of the Liberal Party, and the establishment of medical attention for all. Some things one can argue about with the Government there, as I did with the Conservative or Christian Democrat member of the three-man Junta there, such as the precise balance between the public and private sectors. There are some things done which no Member of this House would want to defend, such as the way that the Opposition sometimes finds itself subject to harassment and even worse by
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the authorities. But three things struck me forcefully as a result of my visit there.
First, what the Nicaraguans are trying to do is under continuous threat because the United States cannot reconcile itself to the fall of its great ally President Somoza, and insists on penalising that country for trying to escape from the over-close links with America which Somoza represented. I notice in the Queen's Speech that it is said that the Government will give active support to enable Afghanistan to resume her independence and non-aligned status. My Lords, that is all that Nicaragua wants. In so far as Nicaraguan circles are full of rumours about American or American supported military intervention in their country, I do not develop that argument today in this House because I know perfectly well that were the Americans so to behave the reaction from the Government in this country would be exactly as it was to the action of the Russians in Afghanistan.
Secondly, while there are some things done in Nicaragua which no one would defend, anyone who equates such incidents of human rights violations as there are, such as the closing down of Opposition newspapers, with the situation elsewhere in the region where thousands are being tortured and murdered—and this the noble Lord, Lord Trefgarne, seemed to do in his speech in April—is being advised by those who lack any sense of proportion, and indeed any moral judgment.
Thirdly, if the Government do not believe what I say about what is going on in that part of the world, then I can only appeal for them to reopen our embassy in Managua, or establish some kind of British presence there, so that our evidence can be based on first-hand information rather than second-hand information laundered through Washington. After all, if the impoverished Nicaraguans can afford to have an embassy here, surely we can afford some kind of resident diplomatic presence there.
But also I want to talk on this occasion again about the problem of El Salvador, which I visited at the same time. It is, I am afraid, worse than ever, and anyone who goes out in the early morning, as I did, to hunt for the bodies of those murdered overnight, or who has seen the conditions under which some refugees live, or who has thumbed through the photographs of dead bodies kept by the Archbishop's human rights office, will support that view. The usual line of the Government here has been to deplore the violence on both sides and express general hopes that the problem can be resolved without themselves volunteering to do anything specific about it.
Three things occur to me about this. First, at the very time that I was in Central America the newly-appointed French Foreign Minister found time to be there too, and it was then that he and the Mexican Government issued a declaration about the situation in El Salvador. The declaration recognised the representative capacity of the FMLN/FDR alliance, called for it and the Salvadorean Government to negotiate together, and made other constructive suggestions.
Secondly, at the outset of the debate the noble Lord, Lord Bethell, rightly made a considerable point of the fact that the noble Lord, Lord Carrington, was currently President of the Foreign Ministers of the Ten,

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and the Foreign Secretary himself referred to that fact and said that in that capacity it was his job, his duty, to "move things forward". In that capacity one wonders whether he could do something in leading a European initiative about the situation in El Salvador. If he were prepared to do that, there is one recent development on which he could build, namely, that the Frente have declared their willingness to enter into negotiations with the Salvadorean Government. This is important, as it represents something of a shift in the Frente's position and gives mediators an opportunity which should be grasped.
Thirdly, I guess that being even-handed in the condemnation of the violence in El Salvador, which clearly the Government would like to be, is no longer an option there. The scale of the killings, mutilations and torture conducted by the Government of El Salvador and their agents is not denied by anyone in that country, least of all by the American Ambassador, Mr. Deane Hinton, who received me and was able to update my already considerable figure of Government-tolerated assassinations. However, that did not mean that Mr. Hinton was any less a supporter of President Duarte's Government, which he clearly thought it was the job of American advisers and arms to maintain.
Bluntly, therefore, I think it is necessary for the countries of the Ten to be prepared to act in Central America independently of the United States. I do not think it will do, as the Government said it did in a Written Answer to a Question last month, to go along with the scheme, invented by President Duarte and supported by the Americans, for elections to be held in El Salvador in March next year, whether or not there is a ceasefire. This Government, with their Zimbabwe experience, know that better than most. To hold elections without a ceasefire would be to produce, literally, a bloody farce.
It may be that the noble Viscount, Lord Trenchard, is thinking, at least departmentally, that this is nothing to do with him. But the situation in Central America does have some implications for British defence policy. I suggest he should recognise that at least some of the unilateralists who are marching over western Europe are doing so because they have become uncertain whether our nuclear arms are there to defend our free Western society against the drab totalitarianism of Communism, or whether they are there to preserve the freedom of America to behave like an interfering bully whenever it feels it has a divine right to do so, just like the Russians. It is to avoid joining in that debasement of what I consider to be western ideals of freedom and democracy that I hope the Government will take an opportunity to reassess their policy in Central America.
7.43 p.m.
Baroness Ewart-Biggs: My Lords, I wish to say a few words about Ireland. There has been not only the reference in the Queen's Speech to close relations being maintained between the Governments of the United Kingdom and the Republic of Ireland, but also last week an important meeting took place between the Prime Minister and the Irish Taoiseach. That meeting was followed by a communiqué and summary of the joint studies, and I understand that a full account of those documents will be published tomorrow in London and Dublin. I know I speak for many
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members of your Lordships' House when I say how pleased and relieved I am that the secrecy concerning the joint studies is now over and that the anxieties arising from that secrecy will therefore come to an end.
First, I wish to say how happy I am that the initiative conceived by Mr. Haughy to create a new framework in which to build closer relations between the two islands has now been truly consolidated, for surely it must be right that when there is so much at stake in the way of lives, property and happiness in Northern Ireland, the two sovereign countries immediately concerned should strive to create such a structure, a structure in which to replace the confrontations and misunderstandings of the past with consultation and renewed understanding. I feel sure that the foundations for this have now been laid and that the building work will proceed at a pace acceptable to the people of Northern Ireland. I was in Dublin last week and the people I spoke to there seemed well aware of the necessity of keeping progress to a level which would not unleash undue repercussions in the Province. They seemed satisfied with the content and general tenor of the meeting, but of course anxious that further ground should be covered as soon as possible.
I wish briefly to make a few comments about the issues that were under discussion. First, I very much welcome the setting up of the Anglo-Irish Intergovernmental Council and the planned programme for which it will be responsible; but I hope very much, indeed, that the work of this council will be conducted in the open and will be subject to parliamentary scrutiny because, as I said, discussions carried out in secret about Northern Ireland's future cause real panic and consternation to the people of Northern Ireland. I further welcome the proposed plan that, at an appropriate time, an inter-parliamentary body will be formed, drawn from both Parliaments and encompassing members of any newly-elected Assembly which might be established in the North, thus involving Northern Irish political representatives when the time is right.
Secondly, I should like to comment on the proposal for an all-Ireland court. I think it would be generally agreed that security co-operation between North and South is as good as it ever can be, given the present circumstances. But there is far less satisfaction here in Britain about the legal remedy available to deal with fugitive offenders. As is well known, when terrorists escape across the Border into the South, the only legal weapon open to the authorities on either side of the Border is the unwieldy and largely unworkable Criminal Law Jurisdiction Act. The arguments used by the Irish Government for rejecting extradition—a system which, from the British point of view, could clearly solve the problem—are of course complicated by political and constitutional considerations. So this creates renewed interest in the proposal for an all-Ireland court, which would mean the setting up of a single court system to try offences, irrespective of the part, of the island in which they were committed. This arrangement would, I understand, have the agreement of both parties in the Irish Dail, and I very much hope that in the months to come progress may be made towards such an end.
Thirdly, with reference to cross-Border co-operation, I very much welcomed the commitment to renewed initiatives being taken in the economic sphere. Sadly,

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the experience of the North-South electricity inter-connector blown up in 1975 represents a rather discouraging precedent for the establishment of the so much needed energy pipeline bringing Kinsale gas across the Border. However, concern will again be focussed on the desperate need—from the Northern Irish consumers' point of view—for installing both gas and electricity links between North and South. On the subject of the Border, the communiqué also spoke of a commitment to reinforcing and building on the work already done under EEC auspices in cross-Border studies and co-operation.
Fourthly, I find it very encouraging that, on the citizenship issue, arrangements for granting voting rights at parliamentary elections to British citizens resident in the Republic are well advanced and that the necessary legislation will be introduced soon. This would seem to clear up that astounding anomaly where Irish citizens resident in Britain have the right to vote in British elections whereas Britons resident in Ireland do not have a reciprocal right.
So, my Lords, a start has been made to change old attitudes and build a framework for future co-operation, a framework to give Anglo-Irish relations a forward look. Each Government have contributed something; the Government in Westminster have acknowledged that the future of Northern Ireland is not only a United Kingdom concern but an Irish one too—the Prime Minister declaring her Government ready to join in promoting arrangements which might help to reduce tension between, and reconcile the peoples of, the two parts of Ireland. For his part, Dr. Garret FitzGerald is fighting a veritable crusade to reform his own country's restrictive practices in order both to modernise Southern Irish society and make the South a more agreeable partner for the North, a place which they need no longer find both alien and alienating. As we all know, Dr. FitzGerald is trying to bring about this radical change without the comfort and support of a solid parliamentary majority, and in doing so he is indeed putting his head on the block. We can but admire his courage.
So far as the two communities in the North are concerned, I hope the SDLP may use this new departure to help them re-establish their position with the Northern Catholics, an electorate who are showing alarming signs of moving their allegiance to the Provisional Sinn Fein, a party whose way of showing its respect for the democratic process is to offer a ballot paper with one hand while brandishing a gun with the other.
As for the Protestant community, I know that am speaking for all of us when I say how much I hope, and indeed pray, that this community, the great majority of which is made up of moderate and reasonable people, will not heed the prejudice and bigoted response of some of their leaders, but that instead they will see this new initiative as a means of understanding, and that they will add their contribution to the changing of attitudes to which the Republic and Britain are now committed. Surely, my Lords, they owe us this; for it must be true to say that nowhere else in the Queen's realm would one political group be allowed to impede the restoration of law and order because they are determined permanently to exclude another
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political group from participation in the running of that state. Furthermore, what material benefit can this union with Britain, to which they so passionately cling, continue to bring them? The economic plight of Northern Ireland is very grave—a situation which is undoubtedly aggravated by the absence of political institutions and the dangerous security position.
As I have said, direct rule is a system imposed by the wishes of the majority community, a system which, as I see it, has as its major justification the point that it should be effective, that it should succeed in containing the security situation and administering the Province within the guidelines of wisdom, justice and humanity.
But with the insuperable obstacles being put in the way of direct rule we wonder how long it can continue to provide this effective and justifiable system of government. It is for that reason that I most earnestly hope that the work of the new Ango-Irish Council will be constructive and positive, and that the loyalists will in effect try to safeguard their rightful place in Ireland by giving the new initiative a chance, by giving the politicians a chance to take over from the gunmen; for otherwise I feel most sincerely that time is beginning to run out.
7.52 p.m.
Baroness Airey of Abingdon: My Lords, I venture to speak this evening on the subject of Poland, which was briefly mentioned earlier this afternoon by the noble Lord the Foreign Secretary, and which I think could come under the headings of both defence and foreign affairs. Some of your Lordships might have had friends, comrades in arms, during the war, and you might feel pity for the plight of their country at the moment. I speak on two accounts from a personal point of view, and I shall not keep your Lordships long on this matter.
My husband, Airey Neave, was imprisoned in the north of Poland in a very unpleasant prison camp in a place called Thorn, and with a friend of his he made what was perhaps a bad choice, to try to get across the border into Russia, where we still had an ambassador Sir Stafford Cripps. They believed that they only had to get into Russia to be safe. They had a very difficult journey through Poland, and my husband often told me of the tremendous bravery and gallantry of those people who helped them. In a state of total exhaustion they knocked at the door of a little cottage and found a woman with a newly-born baby. The woman offered them part of her meagre supper. My husband told me of that woman and of those others who did not betray them. He told me of their bravery, and he felt much indebted to those poor people who helped him on his way. He was caught again, which was, I think one of the luckiest things, and although he was interrogated by the Gestapo, he managed to prove that he was a British officer and so get back for punishment in his own camp.
I should also like to tell your Lordships that I worked for the exiled Polish Government at the time of the Warsaw uprising in 1944, when the city was massacred by the Germans, while the Russian army stood back and did not go to the help of he people.
It would be very tempting for me to make an impassioned request, but tonight I am asking only for

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the most prudent help. Negotiations of the greatest urgency are about to take place between the communist Government, the Church, and the leaders of Solidarity. I believe that the greatest advantage would be achieved if a settlement could be arrived at among those three. At the same time I believe that it is our duty to give moral support. It would not be for the first time that Soviet leaders have been sensitive to world opinion.
Practical help is also needed in a time of great hardship. We have already given considerable help in food and loans, as we were told in detail in answer to a Question from the noble Lord, Lord Caccia, who was speaking on behalf of the noble Lord, Lord Chelwood, in October of this year. But yesterday's meal is no consolation for tomorrow's hunger. This morning I read that the Polish Government are to apply for membership of the IMF. I do not believe that the IMF could reject Poland, since Romania and China are already members, and last week Hungary applied for membership. If the application were successful there would be considerable conditions, and perhaps disciplines, but I believe that it would be to the advantage of Poland's economy. At the same time I hope that Her Majesty's Government can hold out the hand of friendship with encouragement and all possible practical help, so that Poland might have a chance to work out her future for herself.
7.56 p.m.
The Lord Bishop of London: My Lords, I am grateful to the noble Baroness, Lady Llewelyn-Davies of Hastoe, for emphasising our responsibility for the preservation of human rights. The matter that I wish to raise might seem small compared with some of the great issues that have been debated today, but it is not small for those who are directly concerned. I wish to speak about one aspect of the proposed patriation of the British North America Act 1867; namely; the effect that it would have upon the aboriginal peoples of Canada. I appreciate that the matter was the subject of an Unstarred Question in 1979 in this House, but the Answer, that was then given by the noble Lord, Lord Trefgarne, did not seem to me to give the reasons for the interpretation of the law which is maintained by the Government. On my own account I feel justified in raising the matter again, and I am encouraged to do so by the Anglican Church of Canada.
Before I develop my point may I make it clear that neither I, nor the Church here, nor in Canada, has any desire to hinder or delay the achievement of a constitutional settlement satisfactory to all the peoples of Canada. However, we feel that we have a moral obligation to draw attention to the concerns of the indigenous peoples of Canada, whose representatives have consistently relied upon reasoned argument in presenting their claims. Their three organisations represent 1,325,000 people. The National Indian Brotherhood represents 300,000 status Indians. The Inuit Committee on National Issues represents 25,000 Unuits, who are Eskimos, and the Native Council of Canada represents a million Metis and non-status Indians.
From 1763 onwards, until 1876, the affairs of these people were the subject of a series of solemn treaties with the British Sovereign, which gave them certain
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rights, including that of self-government. The real point at issue is what effect the British North America Act of 1867 had upon those treaties? In 1979 the noble Lord, Lord Trefgarne, said that the Act:
"transferred to the Government of Canada, with their Sovereign I should say, all the principal effects of government in Canada, including, most importantly, the administration of the treaties…"
and for that reason, the Minister said, that the Government could not decline to act in response to a request from the Canadian Government to approve legislation in the form in which it is presented.
My Lords, those who have given legal advice to the organisations representing the native peoples question this view. They draw attention to a considerable number of treaties negotiated with the Indian nations both before and after confederation in 1867, most recently in 1956. They say that prior to the Statute of Westminster in 1931 the Canadian Government had no inherent treaty-making powers, and that, in negotiating these treaties, it was acting on behalf of the Imperial Crown—not, that is, on behalf of the Crown in Canada. Although the Statute of Westminster of 1931 conferred treaty-making powers, it made no reference to the Royal Proclamation by George III in 1763 or to subsequent Indian treaties, and these, indeed, continued to be negotiated as hitherto.
The advice relied upon by the Indian people's organisations points to the fact that Westminster retained obligations and responsibilities in respect of Canada after 1931, which the Canadian Government are only now proposing to "patriate". They draw attention to the fact that the purpose and effect of Section 91(24) of the British North America Act 1867 was to prevent the transfer of Indian affairs to the Provinces without the prior consent of the British Parliament. They maintain that such a transfer would have effectively defeated the trust because the Crown would thereby have been prevented from exercising any residual matters affecting Indian welfare.
They point out that no such restraint was placed upon the legislative powers of the Canadian Parliament in respect of any other section of the population, that that restraint was restricted to provisions for the Indians, and they maintain that such exceptions can be explained only by the continued fiduciary role of the British Crown. The legal advice their organisations have received draws attention to the fact that the Indians enjoy a privileged status under the existing constitution. Section 91(24)
"certainly imposes no obligation on the Federal Government to recognise Indian claims to self-determination: but it does provide some safeguard in that it prevents their assimilation by the provinces, a process which would probably sound the death knell for Indian culture".
The representatives of the aboriginal peoples draw attention to the almost total absence of recognition and protection of the rights of aboriginal nations in the proposed constitution. The indigenous people of Canada are asking that their aboriginal treaty and self-government rights might be entrenched in the proposed Canada Act; that they be accorded full status as delegates at constitutional talks; and that amendments of those sections of the constitution dealing with their rights be made only with their agreement. It is clear from early documents, such as the 1837 Report of the Select Committee of another place on the Aborigines of the British Settlements,

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that Britain did accept her role as protector of the rights of aboriginal nations from encroachment by the settler Government.
It is because of this special relationship that the Indian and Inuit peoples are appealing directly to Britain for support; and I am glad to say that we in the diocese of London have been happy to arrange accommodation for some of their delegates who are here now. The Federal Government has said that the position of the native peoples will be a matter for discussion once the new constitution is in force. As, however, the constitution elsewhere provides that federal proposals may be subject to veto by any two provincial governments, the Indians and Inuits fear that the limited protection they enjoy at present will quickly disappear when proposals to implement general intention are put forward.
The question, my Lords, is, therefore, whether Britain has a residual fiduciary role—or, rather, whether the British Crown has. The Government have simply stated that it does not, but I believe that as a matter of justice the argument put forward, temperately and reasonably, by the organisations should be answered. If it can be shown that such a role continues to exist, then it cannot be argued that to concern ourselves with the rights of the native peoples would be contrary to the Second Statute of Westminister of 1932. As I say, the Indian people have pressed points with temperance and reasonableness, but that should not lead us to underestimate their feelings.
Apart from their concern for the preservation of their way of life and culture, which they have sought to maintain in the face of very considerable difficulties, for the Indians a treaty is a most solemn matter. It is sacred. It is made by a person to a person, and carries with it personal obligations; or, in the words incorporated into the treaties themselves, it is to last,
"as long as the sun rises, the grasses grow and the rivers flow".
I would suggest that, generally speaking, the world today has something to learn from the obligation which an Indian sees he is bound to by a treaty.
My Lords, I conclude by saying that, whatever the legal position may be, I believe that we must demonstrate by fuller consideration and by a fuller answer that we have the interests of the Indians, the Metis and the Inuits at heart, and it is for this reason that I raise the matter again. I ask your Lordships to accept that we have a moral obligation to do so.
Lord Mottistone: My Lords, before the right reverend Prelate sits down, would he possibly consider whether the North American Indians, whose interests he clearly has closely at heart, have consulted with the Maoris of New Zealand, who seem to have sorted out their problems a great deal better and whose original position, perhaps I might suggest, was very similar?
The Lord Bishop of London: My Lords, I am afraid I cannot answer the noble Lord's question but I will endeavour to find the answer as soon as I can and, if the answer is in the negative, try to see that it becomes the affirmative.
8.8 p.m.
Lord Houghton of Sowerby: My Lords, I am unable to follow the right reverend Prelate in the important matter that he has just raised. My own impression, after seeing the Indian reservations both in Canada and in the United States, was that they had both been treated rather shamefully in the past, and I fear that nearly all colonisation has ridden roughshod over the rights of indigenous peoples who were there before the Europeans arrived. So I sincerely hope that this matter will be more adequately dealt with when, as seems likely, we come to consider the "repatriation" of the 1867 Act.
I entered the list for the debate today in case something was said from these Benches with which I might disagree. I did this in no perverse spirit, but I thought that since within the ambit of this debate there is the Common Market and nuclear disarmament, those were two issues at least which might excite a little controversy on these Benches. But it has not happened that way. It has been a most comfortable afternoon, and I think we are all grateful to noble Lords who have contributed such well-informed and excellent speeches to a wide-ranging debate.
Of course, the Common Market was referred to by the Foreign Secretary almost within minutes of his opening speech, and he gave a good deal of information to confirm our belief that Britain should remain in the European Community. I am very saddened indeed at what is happening in the Labour Party on this issue. Some of the voices that have been heard in the past strongly advocating membership and strongly defending our position there are no longer heard inside the Labour Party; they have gone elsewhere, in despair.
I welcome what the Foreign Secretary said when reaffirming the Government's conviction about adherence to the European Economic Community. It has not always been that way. I recall that 10 years ago Mr. Heath when he was Prime Minister had to rely upon over 60 dissident votes in the Labour Party to get his Motion through the House of Commons. When Mr. Heath said that he wanted a free vote from a free Parliament, he got a free vote on his own side but it was a little too free for him and he had to rely on those of us on the Opposition Benches who defied a three-line whip in order to carry the Motion for the completion of negotiations on the Treaty of Rome.
I had hoped that our membership of the EEC was now a stable feature of our politics in the world and of our association with other European countries. Those who are talking about withdrawing from the EEC within the first year of the next Labour Government probably do not realise what they will be undoing and what the consequences of that will be. What has been built up, and is being built up still in Europe, has taken 20 years of patient negotiations, sometimes impatient negotiations, to achieve a basis upon which this valuable co-operation should take place. I believe that it will be a bad day for this country if this issue is going to return to the field of controversial politics with a possible danger that Britain might wish to undo what was done during that time. On that subject, I offer only one suggestion to the Government. Cannot they do more to ensure that the work and significance of the European Economic Community

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are more widely publicised and that better information services are given on this subject? If they cannot do any better, then why not give more money to the European Movement who can conduct this kind of information service from very long experience?
The Foreign Secretary referred to the fact that we had kept the peace for 36 years. If we can keep it for another four, that will make it 40 and that will mean 40 years of no major European war—the longest period of peace in Europe for 200 years. That is something, I think, to be satisfied about. We know from history that to talk about peace-loving nations is all nonsense. They are not at all peace-loving nations; they are warlike nations. History is strewn with bloodshed, with war, aggression, cruelty and devastation. If we can preserve peace in Europe for 40 years, it is an historic achievement and the Foreign Secretary was quite right to refer to it.
The problem today, the only problem, I think, in terms of world peace, is the problem of Russian intentions. This is really the basic disturbance in the mind of the world today. We have little confidence in what they say; we feel that we have to go by what they do; and what they do deepens our concern about their purposes in the world. I know that it seems unbelievable that the two major powers, the only two with the capability for total nuclear war, should both firmly protest their innocent intentions and yet appear to he unable to convince each other of their sincerity. Not only do they fail to convince each other but they fail to convince the world that the two super powers are bent on keeping the peace. I think that a great deal of the failure to get an understanding in the world today is due to the fact that, whereas in the West the debate is open and free, in Russia it is not. The Russians can listen to all that we are saying to ourselves and to others about our policies, exposing our weaknesses, to our casting doubt on the intentions of other political figures in our public life. They can intervene and distort what they hear; hut we cannot get behind the shield of silence which is imposed on the Russian people.
The noble Lords, Lord Chalfont and Lord Weidenfeld, referred to the way in which the Russians have a close interest at the present time in the unilateral nuclear disarmament peace campaign. There is no peace campaign that we know of going on in Russia today. The peace campaign that was permitted in East Germany alongside the demonstration in West Germany was a campaign for the nuclear disarmament of the United States. It was turned against the United States and not against nuclear arms generally. I felt a great deal of sympathy with the noble Lord, Lord Chalfont, when he said that many people found the discussion on the technical side of nuclear war and strategy extremely confusing and probably the simple elements of the conversation were lost sight of in consequence.
I feel that if you have allies you must stick to them, because a country like ours is badly in need of them whenever we are in trouble. Whatever the differences which arise between the United States and ourselves, they should be capable of discussion and of settlement within the alliance and should not be allowed on either side of the Atlantic to begin to question the validity of
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the alliance itself. That is most important. Neutrality, to this country, would be equivalent to laying down our arms. A nation of our size and history cannot go neutral without the surrender of its position in the world and of its position in relation to our allies. But with all the disturbance that there is in our minds about this, we should be mistaken if we concentrated unduly upon our fate in case of war—and certainly if we neglected attempting to remove the causes of war. There are things which are quite near to hand for us today which I think would lessen tension and probably lay the foundations of peace later on if not in the immediate future.
I suppose it would be in a spirit of levity that I might suggest that international sport probably is one candidate to he looked at as a possible source of discord and of international conflict, but I mention that in passing only to lighten an otherwise rather dull discourse. The main thing is the question of population pressure and poverty.
I am sorry that the noble Lord, Lord Carrington, did not leave himself more time to deal with the recent conference in Cancun. I agree with my noble friend Lord Stewart of Fulham that the Foreign Secretary's account of the conference, I thought, seemed to he more satisfying than the reports that we have had from elsewhere. We were told that it was a disappointment; we were told that nothing much had come out of it; that it had been a gathering of heads of state but so little coming out of it. However, something has to come out of some of these conferences before very long if we are to avert the biggest disaster in the world to come, which is the growing pressure of population on resources and all that that may mean in political pressures and sources of conflict. I sincerely hope that more attention will be given to this.
The population explosion is more dangerous than the nuclear bomb. It is more inevitable, and the extent of it is likely to be far more devastating. My noble friend Lord Stewart of Fulham said that if there was a nuclear war it would be idle to discuss whether there would he any survivors, who would be left, and whether it would destroy the whole of mankind. Of course there would be survivors. But one cannot say who will survive the mass starvation and deprivation that is likely to come as a result of continued poverty and deprivation due to the population explosion.
More must be done to relieve the so-called third world of the despair which confronts it at the present time. That is one of the positive measures which Her Majesty's Government could take and which we can all feel offers some hope for the future. It is rather more exciting than dwelling too heavily upon the fate of mankind from nuclear war. It may never come. I do not believe that it will. The stakes are too high. But nevertheless one has to be on guard against untoward happenings in a world in which the human factor is as fallible as it ever was and can make the same mistakes in the future as in the past. The whole of the course of humanity can be changed if the West would only surrender some of the luxuries in life that it has in order to ensure a minimum standard of living for the millions elsewhere who, after all, are human beings like ourselves.
8.23 p.m.
Lord Gore-Booth: My Lords, some time ago in your Lordships' House it used to be a pleasant coincidence that I seemed constantly to be talking immediately after the noble Lord, Lord Houghton of Sowerby. This pleasure I have missed for some time. I am so delighted to resume this relationship of succession. Note the deferential touch, my Lords.
I should first like to say just a few words—and I hope I am only going to say a few words—about the progress and the background of the European Community. I do this because there have been a considerable amount of rather snide attacks on the Community from various sections and it is perhaps useful to underline one particular aspect of the Community which is not often noticed. By that I mean the political point of the existence and work of the Community. When the meetings to establish the Community were being conducted in Paris, there was one point which was constantly emphasised which has rather fallen out of fashion. I hope to re-create it slightly.
From the point of view of many of our European friends—and indeed from our own when we were discussing the formation of the Community—there was expressed the view that one must never forget the political strength and importance of the Community. It came into being just at the end of World War II and there was a great emphasis by our European friends that one of the main purposes in establishing an economic Community was the political importance which such an institution would have.
The argument—and I am sure that it was absolutely right—was that if you are going to set up a Community at all, and if you want it to last, it is extremely important that it should have a proper organisational framework. You cannot do that easily and expect it to survive unless you give it an expressly political importance, title, and body. This will give it, as it were, some form and substance whereas if you simply take an economic action and then leave it at that you will not succeed because that operation will pass away with the completion of some economic or commercial matter or whatever may be the task.
If you insist that your new body must have a constitution with rules and something that can be seen to exist and then does good work, then you will guarantee to it a life which will get past the very difficult early stages and will become an institution and something which will go on, one hopes, indefinitely. That indeed—and I can assure your Lordships that this is right because I was present on the occasion—was the spirit behind this idea of the nature of the Community as an important political as well as economic body. That was something that would guarantee its long and—let us hope-unending future.
So I hope that all those who may come in contact with the Community and be interested in the history of it, or the purpose of it, should know the situation. That is why I proclaim it again today. This was the view of the founders of the Community. They were right in both respects of the idea and form of the Community. It remains with us now and, to my mind, grows in importance, in impressiveness and experience. For that reason, I have always since the earliest days supported the Community and tried to persuade people who were against it as some kind of sinister
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capitalist offensive that it really is something of a bequest by the founders of it to the future. It seems in these days to be coming more and more generally accepted as not only an important but highly constructive and acceptable international body. I hope so much that this feeling for the Community, which has been growing slowly, is now fully established and that there is no more effort to say that it is something that should be got rid of. I am sure that that is almost perversely wrong. In spite of the idea that the Community should be dispensed with—given all the benefits that we get from it, as well as the payments that we have to make to it—it is, none the less, something which is very much of a positive nature constructed in our century.
The other subject on which I propose to talk for a moment—again, following the noble Lord's example—is the Soviet Union which, naturally, has also been discussed very much this afternoon. When the Soviet Union attacked the small, impecunious state of Afghanistan, there was an immediate revulsion against this piece of imperialism. If, again, one follows the historical precedent and then the following events, one is immensely struck, first, by the sheer lack of necessity for any such attack at all, and the Russians killed by order of their Government in Afghanistan have died for nothing. The purpose was a purely destructive one.
The Russians have settled down rather miserably in Afghanistan, disliked by the people, unable or unwilling to accomplish very much and so we get this deadlocked position in what is, as I have said, a small country up in the mountains where the Russians, as they found at once, have nothing to gain and a dislocation of the community has been caused. The Russians lose money, the Afghans have lost lives and a destabilised situation has been created in that part of the world. All the news that comes in—and there is not very much of it—indicates that there has been a destabilisation of a cold-blooded nature created in that part of the world.
I hope that most of your Lordships will agree with this analysis—there will be few who will not—because what was done by the Soviet forces was, in fact, a piece of destruction to apparently no purpose, and not even a very useful military purpose, for the Soviet Union. It is easy to say that amount. The question then is what the rest of what I will firmly call the free world can do about the situation. The free countries of this world did what they could, short of doing what they could not do, which would have meant an old-fashioned outbreak of hostilities.
The question which it would be perfectly right for your Lordships to ask now is this. All right. There is no disagreement with that. But what do you suggest that we do? On that, I have no concrete suggestion, except that all the free world must go on insisting that the Russians go away. It is not a promising prospect in one way, but no nation, however obstinate in temperament, likes being nearly ostracised by the free world. It is a wearing experience. It means that all kinds of privileges which the Soviet Union, by its sheer size and status in the world, could acquire and enjoy if it was prepared to behave in a civilised manner, are denied to it.
Practically the only thing we can do, and we should be very persistent in doing it, is to make the Soviet authorities—and, after all, it cannot be the Russian

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people, whatever anybody says—aware that while they are not quite the only Government and country out of step, they are pretty nearly so, and that in all kinds of ways this deprives them not simply of material things, but of all kinds of amenities and facilities in the world. We must show them that what they have done is to put themselves not into isolation—because that would be exaggerating matters—but on to a position in which a great country should not be put.
After all, bringing the matter down to a very human level, all of us who have met Russians, who have read Russian literature and who have had anything to do with Russian civilisation, know that their Government, in earlier years, was a cruel one which could not last for ever, but that the people of that country are marvellous human beings and the one thing they would really like is to be in the great world again. I do not say that this is a practical programme which we can achieve, but I believe that the only way to make any kind of dent on the Russian consciousness, and to keep hope going among the people who would like a somewhat different kind of beautiful country than the one that they are issued with at the moment, is to make this part of a conscious process. I shall not take up your Lordships' time by suggesting how, partly because this can be worked out only by experience. But I think that anybody who has lived for some time in this world has a feeling deep down that one of the things the Russians would like is to get back again into a world in which liberated Russians—and I mean liberated socially, not militarily—and all the rest of us can live together in peace and security.
8.39 p.m.
Lord Jenkins of Putney: My Lords, the noble Lord, Lord Gore-Booth, will forgive me if I do not follow him down the interesting paths which he has been outlining to us. My reason for not doing so is not that I should not like to do it, but that I have a lot to say about nuclear disarmament, a matter which has been raised several times, and a number of points which I should like to make. Since I do not want to take up too much of your Lordships' time, I had better not get diverted on to anything other than that.
However, I should like to say that the gracious Speech asserts the Government's intention of continuing to play an active role within NATO. One could wish that it was a less expensive role. As the Parliamentary Select Committee on Foreign Affairs has pointed out, the high percentage of NATO's budget borne by the United Kingdom is neither just nor reasonable. Meanwhile, we must welcome the pledge to work for a successful conclusion of the Madrid meeting on the Helsinki Final Act. There are points in the gracious Speech which I believe that noble Lords on all sides of the House will welcome with enthusiasm. The enthusiasm may be more hopeful in some cases than in others. Nevertheless, let us not put aside any point on which we can be in agreement. The Times said on 28th October that the Government had decided some time before:
"to engage the nuclear disarmers in serious debate".
The Times went on:
"The movement is a growing force in the country. It is no longer on the fringe. Nor is it the creature of one political party. It contains a wide range of serious and worried people who feel a
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fundamentally honourable desire to protest against the arms race. In it there are churchmen for whom the appalling moral problems of nuclear deterrence are paramount. There are pragmatists who believe that political and military problems could be handled differently. There are young people who simply cannot understand the world in which they find themselves and there are also of course those with political causes to promote, including communism".
I can hear a "Hear, hear!" to that from some quarters of the House, if not to the rest of what The Times has to say.
I have taken the liberty of quoting it at some length—I hope your Lordships will forgive me for doing so—because, as has been said, I am chairman of the Campaign for Nuclear Disarmament and I wanted to clarify some of the issues which have been touched on during the course of this interesting debate. It may be that the Foreign Office decided to conduct the debate at a serious level, as The Times said, but this has not been generally true. The Secretary of State for Defence has unleashed from his department a series of attacks on CND, not for its policies but on its credibility. In this he has followed a pattern which the noble Lord, Lord Chalfont, has also explored. Another member of the Government, Mr. Nicholas Ridley, wrote to a constituent recently as follows:
"I was horrified to infer from your letter of the 21st that you support the Peace Movement. This is, as you know, organised and financed by Russia. I must make it clear that I will have no part in this".
That is not really the way to deal with this serious subject.
The noble Lord, Lord Soames, said in this Chamber that CND and its supporters are "wittingly or unwittingly playing the Russian game". This is more or less what the noble Lord, Lord Chalfont—he will correct me if I am wrong—said to us this afternoon. That would only be true if the Russian game is peace, and of course that is what we want to put to the test here in Europe. The noble Lord, Lord Carrington, has always treated nuclear war with the seriousness that it deserves.
I am glad to say that the day before yesterday, on Sunday, Mr. Peter Blaker, the Minister of State for Defence, did something to rescue his department from the rather low level contribution it has made to this matter so far and tried to fulfil The Times promise to treat the matter seriously in a debate which took place at the Bristol University Union on Sunday evening. Replying to the motion "That this house would unilaterally abandon the nuclear deterrent" he attacked CND, and me, vigorously but not unfairly. He apparently rejected the smear material, which was available to him from his own department which has circulated such material, and he attacked a CND pamphlet for alleged inaccuracies. That was entirely proper. If errors are proven we shall correct them. But the speech of the evening was given by Colonel Jonathan Alford of the International Institute of Strategic Studies who also opposed the motion. I think he made a considerable impression and was responsible for the fact that the motion was only narrowly carried.
But perhaps the important revelation on this occasion was the amount of common ground which now exists between nuclear disarmers and more traditional opponents of Government policy. Colonel Alford gave the authority of the Institute of Strategic

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Studies to the view that nuclear war cannot be limited or controlled. The technical reasons for this belief have been spelled out with authority in a booklet by Dr. Desmond Ball, just published by the institute. Dr. Ball writes the impenetrable prose which seems to come naturally to defence experts, but his conclusion is clear enough. He says this:
"Rather than devoting further resources to pursuing the chimera of controlled nuclear war, relatively more attention might be accorded to another means of satisfying the objectives that limited nuclear options are intended to meet. This is likely, in practice, to mean greater attention to the conditions of conventional deterrence".
The message that both the late and sadly lamented Admiral Lord Mountbatten and Field Marshal Lord Carver have been trying in vain to put over for years—I make no party point on this—is precisely this point which now has the authority of the Institute of Strategic Studies: that there is in fact no such thing as a limited nuclear war; a flexible response is nonsense. The Labour Party, as I said, was similarly deaf to appeals on this point in the past, but my party has since grown wiser. I was very glad to have the support of my noble friend Lady Llewelyn-Davies of Hastoe from our own Front Bench earlier this afternoon. I look forward to further support when my noble friend Lord Peart comes to speak later in the debate.
Is nuclear war likely? Lord Mountbatten thought that it was. And if that was so a couple of years ago, then perhaps today it is even more likely. Lord Mountbatten said, and I quote:
"The world now stands on the brink of the final abyss."
Today we are even nearer the edge. It really is four minutes to midnight. I have suggested that a quotation from the Strasbourg speech should be inscribed on the plinth of the statue which it is proposed to raise to the memory of Lord Mountbatten. I proposed this quotation:
"In the event of nuclear war there will be no chances, there will be no survivors—all will be obliterated".
In this Chamber the noble Lord, Lord Boyd-Carpenter—I am sorry he is not here this evening—suggested that a more appropriate inscription would be the Latin tag:
"Si vis pacem, para bellum".
But Lord Boyd-Carpenter had not done his homework, because in the same speech Lord Mountbatten condemned this very quotation. He said, and I quote:
'There are powerful voices round the world who still give credence to the old Roman precept: if you desire peace prepare for war. This is absolute nuclear nonsense and I repeat—it is a disastrous misconception to believe that by increasing the total of uncertainty one increases one's own certainty".
The Government claim to believe that nuclear war is unlikely, though some of their actions seem to belie that belief. Why spend a fortune on Trident? Why house cruise missiles? "Oh", say the Government "this will make war even less likely".
"Si vis pacem, para bellum".
"Nuclear nonsense", says Mountbatten. And Field Marshal Lord Carver, although less immediately alarmed than was Lord Mountbatten, strongly shares his other belief that tactical or theatre weapons cannot be used without triggering off "an all-out nuclear exchange, leading to the final holocaust". That was Lord Mountbatten. Now here is, if he will
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forgive me for quoting him in his presence, the noble Lord, Lord Carver:
"To initiate nuclear war would not redress or restore the situation. It would be an act of unredeemable folly".
The noble Lord said as much to us again this afternoon.
In other words, the noble and gallant Lord rejects totally the strategy that the West has been relying on for 20 years; readiness to be the first to use nuclear weapons against a conventional attack. He rejects it as thoroughly, if less alarmingly, than did Mountbatten—although the words are softer, the meaning is the same. If we use this weapon in any form we are finished. It is not a weapon of war in any sensible use of the word; it is an instrument for the annihilation of civilisation and perhaps even humanity itself. The noble Lords, Lord Kaldor, Lord Gladwyn and Lord Zuckerman, reached similar conclusions and now we have the authority of the International Strategic Institute.
The idea of a limited war makes the holocaust more likely and President Reagan's recent statement has brought us closer to the brink. There is therefore a growing opinion that nuclear war is likely and that a limited nuclear war is impossible. Unfortunately the people with the power—the American and British Governments—believe the opposite; that nuclear war is unlikely and that a limited nuclear exchange is possible. Or do they? Whether they do or not, their actions say that they do and that is what counts. We are in grave peril. Unless we change course, war by accident or design or by proliferation or by miscalculation is bound to happen. The growing disarray of the American Government is the opposite of reassurance.
None of the authorities I have referred to was or is a unilateralist. I never tire of saying this but people seem to be curiously deaf because whenever I say it somebody always gets up and says that I have not said it. But I say again that none of the people I have quoted in support of the preliminary case that have argued here this evening is a unilateralist. In other words we are pretty well agreed about our diagnosis, but we have no common prescription. Neither, for that matter has the CND itself when it comes to detail. What we in CND share is a conviction that the escalation will not cease unless some act of de-escalation is taken and we believe our own country is well placed to take that action. That is what we mean by unilateral nuclear disarmament; we mean the precipitation of multilateral discussions by an act of reduction or by a first act of refusal to escalate.
Take Trident—our first unilateral action would be a refusal to replace Polaris. On that we are all agreed. Our second, a refusal to house the Cruise missiles on our soil. Simultaneously we should be extending the nuclear-free zones in Europe, for the rejection of the nuclear weapon is not a British phenomenon—it is a European one. The conviction is widespread in Europe that we are the theatre in which the destruction of our species will be the subject of a pilot experiment.
Lord Chalfont: My Lords, will the noble Lord give way for one moment? When I was making my speech he intervened to say that he was going to say something about the policies of CND, and indeed he has

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done so. I have listened very carefully to what he has said, but I am still in need of enlightenment. I have in my hand a pamphlet published only a few months ago by the CND and written by a member of its national council and I should like to ask the noble Lord whether he agrees that these quotations represent the policy of the CND. The first is:
"CND's immediate policy is for Britain to abandon nuclear weapons and to refuse to house the nuclear weapons of foreign powers based on our soil and in our waters".
The second quotation—and perhaps this is the one to which I should like the noble Lord to address his reply—is:
"CND supporters have a job to do to see that the arguments for British unilateral nuclear disarmament are carried into every party and trade union branch and on to every shop floor".
Lord Sandys: My Lords, I think it is the custom of the House that the question should not add at any length to the speech concerned. I quite appreciate that the noble Lord is asking a question embodying quite substantial quotations, but he should not make it over long.
Lord Chalfont: My Lords, I intend to make it no longer. I have made the quotations which seem to me to speak for themselves and I ask the noble Lord whether this pamphlet represents the official policy of the Campaign for Nuclear Disarmament?
Lord Jenkins of Putney: My Lords, so far as 1 could judge from the quotations which the noble Lord made I could not offhand see anything to disagree with in the first quotation. In regard to the second, I am not quite so sure because it was rather interrupted. So far as I heard it 1 agree, but I should like to qualify that by saying that I would rather read it in the morning. So far as I could tell I did not see anything to disagree with in what the noble Lord said. But I do not know that any statement by a particular member on a certain occasion is necessarily to be regarded as the policy of an organisation. We have things like annual general meetings, we have documents which set out our policies formally, and I feel sure that noble Lords on both sides of the House will agree with me that if one takes a statement of any member of the Conservative Party or of the Labour Party and asks whether that represents the policy of his party one might find oneself in some difficulty in replying offhand.
If I may return to what I was saying, the nuclear-free zone is not a new concept. It is one which stems from Hugh Gaitskell and the Rapacki Plan way back in the 'fifties. It is not a way-out concept of a mad professor but the considered proposal of a Labour Leader who was thought to be rather on the right of the party. A Nordic nuclear-free zone is under way; a Balkan nuclear-free zone is planned. The rebellion against nuclear suicide has been heard in Bonn and Brussels and elsewhere as well as in Hyde Park and, if I had time, I could quote President Brezhnev on the same point and I hope on some other occasion to be able to do so.
Those who oppose unilateral nuclear disarmament assume that it means immediate one-sided nuclear nudity of the West, including the United States, coupled with instant withdrawal from NATO by Britain. It
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must be admitted that CND in the past has contributed to this misunderstanding. Like the Tory Party and the Labour Party, the Peace Movement is a "broad church". Like the political parties, we know what our aims are but we have different ideas about how to achieve them. We still have in the ranks of CND—and I hope we shall have them as long as the movement exists—complete pacifists who oppose not only nuclear weapons but all weapons. The noble Lord, Lord Soper, is an impressive speaker for this point of view.
I was going to say something about the nature of nuclear war but I think I have taken up enough of your Lordships' time.
Noble Lords: Hear, hear!
Lord Jenkins of Putney: My Lords, I hear some enthusiasm for that part of my speech, if for no other, but I think noble Lords will admit that I did have rather a lot to reply to and I hope therefore you will bear with me for another few minutes.
Lord Gladwyn: My Lords, is it not a fact that if the policy of the CND movement is as described by the noble Lord, Lord Chalfont, it cannot he reconciled with a desire to stay in NATO?
Lord Jenkins of Putney: My Lords, I was going to deal with that at some length as a matter of fact because the next item on my notes is the question, should we secede from NATO, and, the noble Lord having encouraged me to do so, I will spend just a few minutes on that point. Personally, I think not. There are some people who think that we should, but in my own view our membership of the nuclear-free nations in NATO—and there are now quite a number of them—would give us the collective right to take part in discussions with the Warsaw Pact countries, designed to bring about a lowering of the number of weapons and the achievement first of a balance at the lower level, as Lord Mountbatten put it, and finally of a nuclear-free Europe.
I will not trespass further on your Lordships' patience this evening. Above all, we say that the nuclear weapon is a moral outrage and that to use it or to threaten its use is barbarism. Not only for the sake of survival but for the standing of humanity. A creature deploying the nuclear weapon is not entitled to call himself homo sapiens.
Lord Zuckerman: My Lords, before the noble Lord sits down may I put one question. I understood the noble Lord to say that it was the policy of the United States Government and of the British Government that there could be field warfare in which nuclear weapons are used. Knowing full well that there are many people who say that could be, I would like to know—and I am sure your Lordships would like to know—whether any Government has stated that policy as explicitly as has been implied in the noble Lord's statement.
Lord Jenkins of Putney: My Lords, we must take Government's statements at their face value. We have the position at the moment in which as far as our own Government are concerned, as Lord Carver has

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pointed out, for 20 years our policy has been based upon the proposition that we should be the first to use the nuclear weapon, that we should respond to a conventional attack with nuclear weapons. What has happened recently is that Mr. Haig has been excessively honest and has blown the gaff". This is what has set the cat among the pigeons. Therefore, we are in the position that both the American and the British Governments are committed to a flexible response policy, which many people, I believe including the noble Lord himself, view with great suspicion.
9.2 p.m.
The Marquess of Ailsa: My Lords, I hope the noble Lord, Lord Jenkins, will forgive me if I do not follow him in the realms of nuclear disarmament. Recently I had occasion to visit the Horn of Africa, Somalia in particular. I would like to say at the outset how very much I welcome Her Majesty's Government's decision to continue the BBC external broadcasts in the Somali language. During my stay in that country I had very great evidence brought to me of the respect and regard in which this service was held and the great concern being caused by the thought that it might have to cease. I am delighted that this is not to be the case.
This service, I think, is of importance, as in that part of Africa there is at the present moment a great deal of unease. This unease has been brought about by the alliance between Libya, Ethiopia and South Yemen. The border war between Ethiopia and Somalia continues. Great concern is caused as apparently there are 2,500 South Yemeni military technicians including at least 25 trained pilots on loan to the Ethiopian Government. The Somalia Government are anxious to get new supplies of tanks, antiaircraft equipment and other sorts of equipment for the purposes of defending their borders. They do not wish to attack anybody. They feel certain that there is a deliberate policy to try and destablilise that part of Africa. Again this is where the importance of our external services come in. They are subjected currently to very strongly Moscow orientated radio broadcasting; this works trying to stir up insurrection and armed resistance within the country.
There is a great desire in Somalia for closer and stronger links with this country, diplomatic and commercial links. They feel that we in Britain have a better understanding of their situation than other people do. They had a very unpleasant experience with the Russians, whom they expelled in 1976. This experience has made them somewhat wary of the Americans, with whom they have agreements regarding the use of the harbour at Berber and the runway at the same town. I understand this is the longest runway in Africa. But they feel that we—if I may use the words "we British"—have a fuller understanding of their problems and their desires for independence.
They are a small country and do need help. I understand that now the relations between Somalia and Kenya have been resolved amicably, and I wonder is there any other reason why further friendship and relations should not be forthcoming from this country? Finally, I must say how impressed I was by the effort made by our embassy staff in Mogadishu to put on an
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excellent show at the International Trade Fair carried out in that city last month. With a very small budget our embassy put on a very creditable and praiseworthy stand, small but exceedingly good, and certainly far better than those put on by other western countries.
9.6 p.m.
Lord Oram: My Lords, it is, I think, understandable that when it is decided in your Lordships' House to discuss these interrelated subjects of foreign affairs and defence the main thrust of many of the speeches should be the East-West confrontation, because of course the pre-eminent danger at the present stage of world history is that the relationship between the two separate worlds, the communist East and the capitalist West, should be so mismanaged as to lead to a nuclear catastrophe.
But while it is understandable that our debate should deal largely with the hostility of those two worlds, it is all too easy to forget that the third world and the international management of its affairs can be as crucial as is the direct confrontation between the other two worlds. I have a lurking fear that, just as the First World War began not on the frontier between the western allies and the German empire but in remote Sarajevo, and just as the flashpoint for the Second World War was the Polish Corridor and not the Western Front, so it could be that the Third World War could begin, shall we say, in Central America, or in Southern Africa, in the oilfields of Iraq or as a result of some miscalculation among the warring factions in South East Asia. The whole of the third world, has, in recent time, since the Second World War, emerged from its political colonial status. It is now struggling to emerge from its economic colonial status and this second struggle is no less difficult and no less important for the future peace of the world than was that earlier struggle for political independence.
If we are to avoid dangerous eruptions in any of a hundred danger spots throughout the third world, much attention has yet to be given and many resources have yet to be provided to ensure a greater measure of stablility in the poor countries of the world. It is on that subject that I wish to make a few observations this evening.
We have just had at Cancun in Mexico a summit meeting purporting to deal with this mind boggling task. Various estimates have been made in the debate today by the noble Lord the Foreign Secretary, by my noble friend Lord Stewart of Fulham and by my noble friend Lord Houghton of Sowerby about the effectiveness or otherwise of that summit. I have no doubt that Cancun was a failure. It was wrongly conceived and it was bound to fail in view of its mere two days of discussion and the impossibility of it reaching any conclusions. Indeed, I would go so far as to say that it did more harm than good since it dashed the high hopes aroused by the Brandt Commission's Report and negated a great deal of the constructive public discussion to which that report had given rise. I say all this, let me confess, with the benefit of hindsight because as we approached Cancun, I, too, had high hopes that it might achieve something, but I believe that it is better to learn from mistakes than to pretend that they were not made.
I believe that in the Brandt Report there is not only a brilliant analysis of the world's economic ills, but

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also many wise recommendations which unfortunately have not yet been acted upon. But I now say that the recommendation that there should be a summit conference was, in my judgment, a mistake. Indeed, I am beginning to wonder whether we have not had a surfeit of summitry in respect of third world problems. Have we not had too much consultation and too little action?
Let us consider what has been happening since the summer of this year. We had the Ottawa Conference in July—a meeting of representatives of the seven richest nations of the world; we had the Paris talks on aid to the poorest countries; then the leading statesmen of the Commonwealth countries went off to Melbourne and we had the Melbourne Declaration; and finally we had Cancun itself, the most expensive and least productive of the lot. In less than six months we have had a great deal of top level flurry and top level wise words, but one cannot but ask: What practical action will result? Will one child be saved from death by malnutrition as a result of summitry? Will one unwanted birth be prevented? Will one more school place be provided or will one more home be built? Those are the areas where action is required and surely we must assess our conferences in terms of the action which results.
The basic trouble, as it seems to me, is that when the leading statesmen of the world meet together, as they have constantly done in recent months, then the supreme diplomatic necessity is that all should be seen to agree. There must be a communiqué at the end of the week, noble in its sentiment, diplomatic in its phrasing and all too often soporific in its effect. This means that the participants spend much time in working out the lowest common denominator of their respective positions, and we find at the end of the day that the world has decided to move forward at the pace of the slowest and the most reluctant participant.
From our British point of view the sad thing in these recent conferences is that it was the British delegation, or sometimes the British-American delegations, which have been seen to be the most reluctant, least progressive, most selfish and least imaginative, and I suggest it is time that we begin to change all this. In some articles that I have read it has been suggested that at least the whole Brandt exercise has been good from an educational point of view, and that public realisation of the needs of the third world has now been heightened. I myself believe that to be true.
It is suggested too—and there is some slight evidence for this—that there are signs of a softening of the attitude of the British Government since the time when they issued that cold, dismal and complacent White Paper as their first reaction to the Brandt Report. It may even be that attendance at Cancun had some beneficial effect on the Prime Minister's mind. For instance, I have seen it reported that after a talk with Mrs. Gandhi at Cancun Mrs. Thatcher was heard to say that she now realised that India's problems were much, much worse than our own. What a great discovery for her to make! Desirable though it is that the Prime Minister should have reached this new level of understanding, I cannot but think that attendance at Cancun must have been a most expensive method of her enlightenment.
My plea, therefore, is for more action about third
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world problems and less high level discussion. We know the problems; we know the facts. They have been analysed a hundred times. The Brandt Report was but an amalgam of other analyses which have been made over recent decades. The question is, when will we take action that the facts and the analyses clearly show to be necessary? Can we not take action according to the dictates of reason rather than in desperation when we reach the brink?
Two years ago the Brandt Report clearly stated the urgency of the problem facing developing countries like India as a result of the oil crisis. No action was taken, until we hear on the radio this morning, two years later, that the crisis has become desperate and that the IMF is now taking unprecedented action which will be very much more costly than it would have been two years ago. How many times have warnings been given, as again they were given in the Brandt Report, about the growing indebtedness of developing countries, and how a default by one of them could set a chain reaction going throughout the financial world?
Now we read, as I read in The Times of yesterday, of the difficulties facing the Export Credits Guarantee Department in its operations in the Sudan. This morning we hear on the radio that that country is facing a desperate economic crisis, leading to the dismissal of all its Ministers. Can we not realise that the world's unpreparednesss to meet these economic disasters is as much a folly as being unprepared to meet a military attack? Mass malnutrition and disease are surely as much a threat to the world's stability as would be a Soviet invasion of a neighbouring country. Is not apartheid, as my noble friend Lord Stewart said, or, as my noble friend Lord Houghton said, is not the population problem potentially as explosive as a hydrogen bomb? Is not mass famine as potentially catastrophic as a situation of hypertension in the Middle East? The difficulty is that all these massive problems are endemic and relentless. They go on and on, day by day, killing thousands here and thousands there, not by the explosion of a bomb but by the slow death of deprivation. Only occasionally, when these problems are at their dramatic worst, is the public imagination seized and action taken by statesmen.
One such occasion we shall all recall was when the boat people of Vietnam were at the peak of their dramatic difficulties. Then it was that we were proud of the action which our own Foreign Secretary took. Then it was that our TV screens revealed his compassion in the face of that crisis. He went there, he saw, and he acted. The message I should like to leave with the Foreign Secretary, through the Minister who will conclude this debate, is that I hope he will be seen to realise that the crisis which became so vivid in the case of the boat people is but part of a crisis which is with us every day, even though it is not on our TV screens every day.
Then thousands of boat people died, thousands were made homeless, thousands were without food and water, and that was an enormous tragedy. But in the third world at large it is not thousands: millions are suffering unnecessary deaths; millions are homeless or living in hovels; millions are hungry and starving, and millions are without proper water supply. Just as we welcomed the Foreign Secretary's initiative with the boat people, we need his well-known compassion and

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well-known statesmanship on a really major scale. I suggest that he is in a position to give the lead, both as British Foreign Secretary and particularly through his presidency of the European Council of Ministers. We know that there in Europe he will find some powerful allies in this cause.
It is my hope and belief that he is big enough to meet that challenge. But if he is to accept that challenge there is no mistaking the fact that he will face a number of very difficult tasks. He will need to persuade his own Government that the aid programme should be increased rather than decreased. The Government's present proposal is that official aid as a proportion of GNP should decline from the 0·4 per cent. that it was in 1978–79 down to 0·33 per cent. in 1983–84. I suggest that that trend must not only be halted; it must be reversed.
Moreover, the Foreign Secretary, if he is to make this cause his own, faces a battle about the nature of aid. He will need to resist the advice which recently led to one-fifth of the whole aid programme being devoted to one single steel works in India, and he will need to listen to the contrary advice which believe he also received to the effect that that kind of aid is not what India needs. India needs rather the means of developing her rural economy with a vast proliferation of small-scale projects capable of alleviating the lot of the poor.
It was disturbing, too, that after Cancun, the Prime Minister put her signature to a similar mistaken project in Mexico, justifying it as a continuation of well-established tied aid principles. It is the development needs of the third world countries which must have priority, and I hope the Foreign Secretary will fight hard to ensure that our aid programme is administered by those criteria and not the new ones which are creeping in.
Finally, the Foreign Secretary will have to listen, I suggest, to the advice of his colleague at Brussels, Mr. Gaston Thorn, the President of the European Commission. On the eve of Cancun, Mr. Thorn spoke out in forthright terms against President Reagan's wrong-headed approach to third world problems. President Reagan had suggested that the best way to help the third world was to build a strong domestic economy in the industrial countries. I cannot do better to end my contribution to the debate than to quote the words of Gaston Thorn and commend them to the Foreign Secretary:
"It does not take a lot of thought and argument to realise that the poor countries are going to die before we see the last of the crisis, and that their death is going to mean ours. Who in this day and age can believe that one-half of the world will flourish while ignoring proverty, hunger and death in the other?"
I can but echo Gaston Thorn's question: Who indeed?
9.26 p.m.
The Marquess of Headfort: My Lords, I wish to speak about Hong Kong and, in particular, its relationship with the United Kingdom. Hong Kong's stability rests on what have been called three legs of a tripod: its relationship with the United Kingdom, its relationship with China and the will of its own people to survive and prosper. During his maiden speech in this House on 20th October, the noble Lord, Lord Kadoorie, spoke most clearly of the excellent relationship
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between Hong Kong and China and of Hong Kong's position to benefit from the merging of China's interests with those of the West.
Of the will of the Hong Kong people to survive there can be no question. Hong Kong's people are famed for their industriousness, entrepreneurs and their adaptability and skill. Together they have created a prosperous, healthy and stable society on a barren rock with no natural resources other than themselves, the country's people. The relationship with Britain is well-founded in constitutional and emotional terms. Nevertheless, recently, from a Hong Kong point of view, it has been seen to be perhaps a little more fragile than the other legs of the tripod. In Hong Kong, the strength of Her Majesty's Government commitment to the territory has been called into question, despite Ministers' reaffirmations of it. That is because a number of United Kingdom policies which are reasonable and understandable from a United Kingdom point of view, are seen from Hong Kong to be directed against the territory. The clearest example in recent months has obviously been the British Nationality Act. This is not surprising, in view of the fact that an Act of Parliament which takes away from citizens of the dependencies one form of citizenship and gives them another is bound to raise questions about the motivation of Government, however well-meaning that may be.
Hong Kong values its connection with Britain not because its people wish to settle in the United Kingdom, but because the very stability of the tripod depends upon it. The amendment moved by the noble Lord, Lord Geddes, on Third Reading of the British Nationality Bill in your Lordships' House, to stress the Britishness in the title "British dependent territories' citizens helped to allay fears in Hong Kong that Britain wished to loosen its ties with Hong Kong. It is a pity that the earlier amendment of the noble Lord, Lord Geddes, at the Report stage, to give British dependent territories' citizens the status of British nationals, and which would have emphasised the Britishness of Hong Kong so much more strongly, was narrowly defeated.
Similarly, Hong Kong people are watching with interest the negotiations over the Multi-Fibre Arrangement. Naturally, Hong Kong manufacturers are aware of the political pressures in European countries for greater protectionism, but that does not mean to say that they condone it. They firmly believe that the main hope of developed countries for true growth and prosperity lies in the ability to expand their own overseas trade, particularly in the third world and among developing countries, but it is possible for trade to grow only if the exporting potential of these countries is in turn allowed to develop.
Hong Kong is a market of great potential for the United Kingdom. Other than its people, it has no resources of its own and must import all that it consumes. In 1980 British exports to Hong Kong were valued at £559 million. Its 5 million people, many educated in the British tradition, with increasing prosperity and an expanding free market economy, will form an even more ready market for British goods than they have in the past. Important though Hong Kong is as a market in its own right, it is even more important because of its connection with China. There

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lies a market of not 5 million, but 1,000 million people, keen to learn from the West and to do so through Hong Kong. The potential for the export of British expertise, services and goods is enormous. Against that background Hong Kong is most concerned that the British Government are not seen to take the lead in the Multi-Fibre Arrangement negotiations, or elsewhere as an arch exponent of protectionism, the very doctrine which could do so much to damage the economy of territories such as Hong Kong.
I have said that policies developed in the United Kingdom as a result of internal circumstances here can have a dramatic and, I am sure, unintended effect upon the dependent territories and our friends abroad. A clear example is student fees. Few would argue that there was no need to change the policy whereby foreign students paid a more realistic level of fee for their university education in this country, particularly as many could well afford to do so. But caught up in this net are many others in places such as Hong Kong, who have traditionally, over the years, sought to maintain their links with the United Kingdom by coming here for secondary and tertiary education. The figures speak for themselves. From January to September 1979, 4,067 students arrived here from Hong Kong. For the same months in 1981 the figure has been cut by more than half, to 1,942. Over the same period the numbers going to the United States of America and Canada have increased from 4,186 to 5,571.
If the trend continues, there is no doubt that the regular flow of Hong Kong students to this country will be reduced to a trickle, and the result of this in both political and business terms could be most damaging. The fact is that Her Majesty's Government still have prime responsibility for the welfare of our dependent territories, and the political link, as I have explained, is an important factor.
The fact that this link has not been recognised in the execution of policy on student fees is something which Hong Kong students find it hard to understand. Furthermore, as they seek their education elsewhere it is natural that when they enter business on their return to Hong Kong, as many of them will, their education in other countries and the familiarity they will have acquired with other countries' practices and goods will have a substantial effect on the pattern of trade which develops over the future decades.
What Hong Kong parents and students are looking for is some recognition of Britain's responsibility in this respect. We are not talking about a large sum of money, and any contribution in terms of scholarships, loans or grants for the dependent territories would help demonstrate Britain's continuing concern. The Government of Hong Kong has already instituted a loan scheme to help students coming to Britain to meet the high fees they face here. Surely it would be possible for Her Majesty's Government to enter into some agreement with the Government of Hong Kong for a joint contribution towards a scholarship fund which would stem the flow of students away from this country.
One of Hong Kong's problems is that it is now, in international terms, seen to be a very successful place, and that there are undoubtedly many other places more deserving of direct assistance from the United Kingdom. But the arguments I have put forward
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are about something less tangible. They concern the sensitivity of people in Hong Kong about the British commitment in the long and short term. Small gestures such as the one I have suggested over student fees would do more than any number of ministerial assurances to put their minds at ease, and it is in such areas as this that I believe Her Majesty's Government should be more sensitive to the needs of dependent territories.
My Lords, if I may refer once again to the outstanding maiden speech of the noble Lord, Lord Kadoorie, in your Lordships' House on 20th October, I should like to conclude by asking, with him: Why alienate the goose that has the potential to lay so many golden eggs?
9.38 p.m.
The Earl of Onslow: My Lords, in foreign affairs debates it is not always possible to stay in one part of the world, and I think i should like to concentrate my few remarks on an area nearer to home than Hong Kong. The Middle East during the last few days has seen certain movements forward, and, as is usual in the affairs of men, this forward movement has been counter-balanced by moments of confusion and muddle. The right reverend Prelate the Bishop of Durham, making what, with respect, was one of the best speeches I have heard on the Middle East, showed how the Palestine Liberation Organisation has matured and altered since the irresponsible days of Ahmed Shukeiri, George Habash and even the earlier era of Yasser Arafat himself.
This maturity has been matched and overshadowed by Prince Saud al Feisal, and here I quote what I think is probably one of the most important quotations to come out of the Middle East in the last weeks, months or even years. The quotation is:
"There would not be any negotiations between Palestine and Israel unless they mutually recognised each other and that is the important fact".
My noble friend Lord Beloff also pointed out that he acknowledged the importance of recognising the Palestinians, and, with his contacts in Israel, this is a very important thing to have happened.
My noble friend Lord Carrington made a statement last Sunday on "The World at One" I think it was, in which he said:
"It is no good ignoring reality just because you do not happen to like some aspects of the PLO. It is not going to go away".
That, my Lords, is pure realism. Now let us look at some of the sideways shuffling and backwards steps—
Lord Paget of Northampton: My Lords, would the noble Earl allow me to intervene? When he says that one should look at the PLO and realise what they are, I agree with him. They are a society of assassins and they have not ceased in their assassinations. They carried out 12 in Europe last year as well as training, in their training camps, the would-be assassin of the Pope. Why did the noble Earl say they had changed?
The Earl of Onslow: My Lords, they probably learned their assassination from Menachem Begin, who was hanging British sergeants while his colleagues were liberating concentration camps. They have changed in a responsible way, as was demonstrated by the speech

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of the right reverend Prelate the Bishop of Durham.
Let us now look at the sideways shuffling steps— "Cool it. Mr. Carrington should be more circumspect in his adjectival pronouncements". General Alexander Haig's manners in this case seem to be lacking, but that I do not think matters. But lack of understanding of the world; that is the dangerous part. It is very dangerous for an American Secretary of State not to understand. Another extraordinary American quote made to a Guardian reporter by an insouciant Pentagon official commenting on an Israeli spy plane over a Saudi military base: "They operate there a lot of the time".
President Reagan and General Haig first showed some interest in the Saudi plan, but one can only assume that Mr. Begin and the Israeli lobby got on the telephone and ruled it out of court with such soothing statements by people like Mr. Sharon as, "In reply to eight points, eight new settlements". In other words, eight new sets of expropriation—which is another word for eight new thefts. Thank goodness that the European Ministers understand, as do the major oil producer (and probably the Gulf States as well) that settlement depends on mutual recognition of past wrongs and future rights. It is very depressing to hear the noble Baroness, Lady Llewelyn-Davies of Hastoe, say nothing on the PLO other than the hackneyed Zionist propaganda on its terrorist origin. I need not repeat about Mr. Begin. It has been said before.
To go back to the statement by the noble Lord, Lord Carrington, at the weekend, we do not have to like things to acknowledge that they exist. Of course, the PLO has done some horrible things. Of course, the Israelis have done some horrible things. The Israeli Air Force the other day killed several hundred civilians in Beirut. All of these are horrible things. What one is asking for is the recognition that both sides have a strong case because of injustices done to them to try to make sure this can be settled by negotiation and by peaceful means. Camp David might not have had to be replaced by something new and even President Sadat might not have been assassinated if he had been able to persuade the Israelis not only to evacuate the Sinai but also to put meaning into the autonomy talks. Egyptian and Israeli Ministers flying between Cairo and Jerusalem discussing whether or not the Palestinians can have street-cleaning or mosquito-swatting powers without the participation of those Palestinians is a cynical waste of time and money.
Until both the Americans and the Israelis recognise the strength of Palestinian feeling, Israel will only survive as a client state of the USA. That description, "client state of the USA" is not mine; it is by the diplomatic editor of the Jerusalem Post on the BBC the other day. That is an unhealthy and unsafe method of survival. Israel's long-term safety must rest on consent; and until that client relationship is ended the Arab-Western relationship can never be really healthy.
We are all frightened—and justifiably so—of Russia. I have recently been reading the biographies of both Peter the Great and Catherine the Great. Their cynical aggression was no different from that of Brezhnev in Afghanistan: and the behaviour of Peter the Great to Charles XII of Sweden was very similar
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to that of the Russian submarine which went with nuclear weapons up to Karlskrona. Catherine the Great's action on the Polish Constitution will be totally and utterly familiar to the situation of General Jaruzelski and Mr. Walesa. President Reagan is right, therefore, that we must not let Russia have the opportunity of meddling and stirring which the present Arab-Israeli dispute provides them with.
The noble Lord, Lord Oram, pointed out that wars start on peripheries. That is so valid. This particular area is the most volatile of all the peripheries. Islam and communism are real enemies but this Arab Israeli dispute tends to push them together. The Americans can put them asunder by putting real pressure on Israel to make generous but secure peace with the Palestinians. Israel must not be allowed to go on getting away with norms of behaviour as shown by her bombing of Beirut and the Iraq nuclear power station. No one else does. What would happen if we went and sent the RAF to knock everything out of a power station in Dundalk? The world would be up in arms at our irresponsible behaviour, and quite rightly so.
The U.S. Administration would be advised to think the whole Palestine problem through. If my noble friend can hot things up rather than cooling them down, and if he can get the message across he will have really deserved our thanks. Then perhaps the Americans might think of a better response to the events in the Middle East than chucking arms at Egypt and Saudi Arabia and sending its air force on a 12,000 to 15,000 mile round trip to drop bombs in the sand.
Mr. Secretary Haig has got to understand as well that the Middle East is nearer to Europe than the United States and that it concerns Europe just as much as, if not more than, the United States. Above all, the danger of misunderstanding leading to war is very great at the moment. Therefore, the European view, as expressed at Venice, is utterly vital. It is very necessary that the American Administration listen to it.
9.47 p.m.
Lord Ardwick: My Lords, I do not intend to follow the noble Earl's speech, which is just as well as I take a sharply different view of the PLO from that which he expressed, having met them two or three years ago in Syria and the Lebanon. However, I am quite sure that what the noble Earl said will be dealt with adequately by my noble friend Lord Paget of Northampton who is to speak next but one.
A few days ago one of my noble friends suggested to me in a moment of morbid self-doubt that the problems of nuclear war should be left to the younger generations, and that those of us who have already achieved the allotted span face an earlier and more certain fate than nuclear destruction. The argument would have some strength if it was only our individual lives that were under threat from nuclear war. However, there is much more endangered than that. The civilisation that we and our ancestors have built over many generations is at risk. So, too, are the lives of our children and our children's children. Thus, the moral and emotional concern of even the older generations about the nuclear threat remains profound.

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I was reminded that two of my noble friends, who even by the liberal standards of this House are getting on a bit, remain almost ardent crusaders for disarmament. I refer, of course, to the noble Lords, Lord Brockway and Lord Noel-Baker. On more than one occasion I have seen them deeply move the Labour Party Conference which normally does not show an excessive veneration for age. I should not forget that the noble Lord, Lord Shinwell, who is their senior, and has a rather different approach, showed again today that he still has a zealous interest in the problems of deterrence and defence. I shall say more about the first two noble Lords in a minute or two.
One must ask why the young people of Europe are showing such passionate concern now about the nuclear threat under which they have lived all their lives; why the unilateral movement, which flourished in Britain as nowhere else in the late 50s and the early 60s has been reborn and, to the dismay of many people, including myself, has been accepted by the Labour Party Conference, though I must point out that the Labour Party is still in favour of NATO.
There are many reasons for the current wave of protest. It began, I think, in a generalised fear of civilian nuclear power as a source of deadly pollution and as an example of the risk which western man is taking with his environment. Then came the realisation that the world was becoming an increasingly violent and dangerous place; that the Middle East, already unstable and the scene of more than one local conflict, might drag the super powers into a war which could be fought in Europe, and perhaps in Europe alone, and could develop into a nuclear war.
There was an increasing realisation, too, that the hopes of halting the nuclear build-up were not being realised and there was danger of a new wave of nuclear competition. To that add the confused and hawkish rhetoric of American politicians; add, also, the great economic depression and the despair of so many young people about the prospects of a career and a family life. There has been, too, the decline in hope for a future life; the realisation, believed by more and more young people, that all the life we shall have is this one and it could be bleak, brutish and brief.
So we must be patient, understanding and tolerant of this movement, not only out of charity, but also for reasons of expediency, for its very idealism, especially if harnessed by the unscrupulous, could contain dangers for us all. I was glad to see that the Foreign Secretary did bring patience and reason to the nuclear protest, acting, as he was acting, not only as our Foreign Secretary, but also on behalf of the European Community over which he presently presides.
Just over 20 years ago, I was deeply concerned with the nuclear problem. I had become editor of the Daily Herald, then Labour's own paper, and the Labour Party was torn apart by this controversy. I decided, rightly or wrongly, that the paper must back Hugh Gaitskell 100 per cent. He fought and fought against unilateralism and the policy was reversed. Yet Gaitskell's powerful logic, coming up against the deep emotions of the pacifists and humanitarians in the party, made very few converts. What it did was to rally the majority who then shared our multilateral views. Those humanitarian emotions, those pacifist emotions,
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were later channelled into protest about Vietnam. Now the nuclear fear and the nuclear protests are bubbling up in the children of the Aldermaston marchers and their counterparts across the Channel.
What are we to do? We cannot leave the case for NATO and the case for the deterrent all to reason. The logic of deterrence is an extremely difficult subject. Look, my Lords, at the correspondence that is now taking place in The Times between a professor and an Air Marshal. The weaponry and the delivery systems require formidable study and the diplomacy on the control of arms is no easier.
I should at this spot like to say a kind word for the pamphlet which the noble Lord, Lord Kennet, has written on the subject of disarmament, which is a very good effort not at a popular explanation, but at a general explanation for well-educated people. It is something of that kind which is required at various levels. I do not think this is at all a party matter. That is why I take the opportunity of saying a kind word to one who, regrettably, is no longer in our party.
There is a further difficulty, as we have heard quoted tonight. The case for the deterrent is a flawed case. It has contradictions which the unilateralist intellectuals are not slow to point out. Indeed, they have been pointed out by one of my noble friends tonight. We must recognise, I think, that a belief in NATO does not imply that it is perfect. Indeed, there has been criticism here tonight of NATO strategy by people who are fervent believers in NATO. So those of us who are driven by logic to accept the deterrent must admit the imperfections of our case in order to show that nevertheless that case rests on a very solid base.
The base is that the possession of the deterrent leaves us not secure but far less insecure than we should be if we renounced it. There is no such thing as security in the world today, and there never will be, so let us stop pretending that there is. Our aim must be the lowest degree of insecurity which is attainable. The high intellectual arguments of what Aneurin Bevan rightly classified as a constantly developing problem, the discussion of weaponry and of nuclear and conventional diplomacy, are not enough.
Many people who are deeply concerned about the existence, the development and the growth of nuclear weapons are not by any means unilateralists, but they have until recently only been able to register their concern by joining movements for unilateral or for European nuclear disarmament. What is needed, I think, is a world-wide movement for disarmament, a movement that expresses disgust with the waste of resources on defence and horror at the prospect of war while recognising that no one nation and neither of the great military camps will take the risk of unilateral disarmament.
That brings me back to Lord Noel-Baker and Lord Brockway who were joined by Lord Bruce of Donington in a letter to The Times on 5th November. This letter I thought was extremely interesting. It criticised those, and I quote:
"… who pretend that everyone who advocates disarmament is ready to leave the West defenceless against the ravening zealots of the Kremlin. Ih reality the great movements of anti-arms race protest are organised by people who want to demilitarise the whole of world society, East and West alike".
The letter gave a noble objective, but if this body,

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the World Disarmament Campaign, is to be politically effective, surely it needs not just to focus on the next Geneva conference or on anything so large as world disarmament. It needs some narrower and immediate political objectives, the kind of objectives that were detailed by the noble Lord, Lord Chalfont, in his speech: objectives such as SALT, mutual force reduction, comprehensive test bans and the demilitarisation of outer space. I should have thought that a serious disarmament campaign would be very much concerned about those immediate objectives.
Now the campaign, Lord Brockway assures me, has the support of the churches in Britain. It has had considerable success in Europe, so he says, and I was as surprised as was the noble Lord, Lord Chalfont, to learn from Lord Brockway that the European movement
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is not a unilateral movement but is a world disarmament movement. I had got quite a different impression. So, apparently, had the noble Lord. But I must accept the assurances of the noble Lord, Lord Brockway, who knows more about these things than I do. It is just beginning in France, he says, and the United States.
This campaign I think must take very great care not to weaken Western will and Western diplomacy and thus hinder the disarmament which is its own very aim. If it is going to have its intended effect, it must inspire not perhaps a movement but the same kind of feelings in eastern Europe. It may seem impossible at the moment, a ridiculous dream. Nevertheless, only a few years ago who would have predicted that the Solidarity movement would have the strength and endurance that it is now manifesting?
9.59 p.m.
Lord Morris: My Lords, I believe the English have an enviable reputation for magnanimity in victory; for being quick to forgive their enemies. Unhappily, they also have the reputation for being even quicker to forget their friends. That is the burden of my brief observations. I wish to speak on two subjects only: first, the BBC External Services and, secondly, the Canadian constitutional question. I in no way wish to pre-empt the admirable Motion tabled by the noble Lord, Lord Byers, for the 25th November, save only to say one thing and to ask one question of Her Majesty's Government, of which I have given (albeit rather short) notice.
My noble friend the Secretary of State for Foreign and Commonwealth Affairs only this afternoon stressed most strongly in the context of the European Economic Community, that,
"partners and allies must be seen to be working together",
and yet in the face of this principle there is thrown by the Foreign Office or the Treasury—I know not which —the edict eliminating the Spanish and Italian services; services which your Lordships well know are mightily respected and will be much missed in those countries. My question is this: Did Her Majesty's Government discuss with the BBC their revised plans prior to their recent announcement of such plans, and in doing so give the BBC the opportunity of saving the sums involved in other ways?
Turning to the Canadian constitutional question, again I have no intention of pre-empting the substantive issue which almost certainly will arise in the United Kingdom in a fairly short time. However, I respectfully suggest that all noble Lords can only welcome the considerable measure of agreement that the Prime Minister of Canada has managed to achieve. Notwithstanding that, I believe that there is in the agreement the seeds of terrible divisions within Canada in the future, for two reasons. First, any constitutional agreement in Canada that does not have the agreement of Quebec must surely give comfort and encouragement to the separatist movement in Quebec. In other words, I suggest that Prime Minister Trudeau is in danger of doing for M. Lévesque, the Premier of Quebec, precisely what M. Lévesque has been unable to do on his own, namely, take Quebec out of the Confederation of Canada. This is no groundless fear; it is a fear held by many who know and love and who care for Canada.
Secondly, I come to the question of the first nations of Canada, and in so doing may I say that I agree in its entirety with the wise words of the right reverend Prelate the Bishop of London. I beseech your Lordships to consider carefully the point which will be made more than once again in the future, that there remains to this day what I must call a passionate reality, namely, in the lights of the North American Indians, a most sacred residual responsibility to them, residing, not only in the people of the United Kingdom but in the person of the Crown as well.
My Lords, this is the wrong time to develop that theme. There will be other opportunities. However, I am ashamed and am provoked to point out to your
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Lordships that the Canadian Indian delegations have enjoyed the most courteous hearings only recently at the highest official levels in France, in Germany, and even today, in Holland. Yet in this country from the Foreign Office the delegates of the Indian nations, some of our oldest allies, have received nothing other than a Whitehall two-step and run around. I cannot believe that the day has come when good manners in our foreign relations have to be learned from our neighbours across the English Channel.
I ask my noble friend Lord Trenchard this final question, of which again I have given notice: Can Her Majesty's Government demonstrate when and in what way the duties and obligations arising by virtue of the treaties signed by this country with the Canadian Indians were assigned to Canada, and whether the consent of both parties to the treaties was sought and obtained at the time of the assignment?
10.6 p.m.
Lord Paget of Northampton: My Lords, I will not attempt to follow the noble Lord. Indeed, at this late hour I shall confine myself to one single subject, assassination. It is one that we have suffered from much in these last years. Assassination is political murder. It is a phenomenon connected with, and probably indeed an aspect of, absolutism. The Moslem system is absolutist. The prophet and his successors hold absolute authority temporal and spiritual, but it is modified; it is modified by the proposition that the order must not be sinful. "Sinful" is not defined. In the words of the Koran,
"No obedience must be given to a creature against the Creator".
In practice the alternative to obedience in the Moslem world has been assassination. Of the four righteous caliphs who have succeeded the prophet, three were murdered, two by Moslems with the approval of Moslems. The Moslem dispensation is and always has been absolutism tempered by assassination, and unless we understand that we do not understand what the Middle Eastern problem is.
Of course political murder is not new. It did not come with the Moslems. The Assassins did not invent it, they merely gave it their name. They also laid down the principles, which are still followed by the assassination states: form gangs of trained and dedicated assassins, small, determined; win a territorial base; then blackmail the kings, the ministers and the prelates from whom you desire to levy your tribute.
For 300 years the names of the assassins are recorded in the Role of Saints in the Assassin castle of Alamot. In Persia and Syria the Assassins for 300 years obeyed their Imams and held the Middle East to ransom. The Crusaders knew them. Saladin paid them tribute. The Franks refused, and Conrad of Montserrat, the King of Jerusalem, was murdered, Richard narrowly escaped, but it is recorded that Richard said then, "It is contrary to the honour of a knight to negotiate with assassins". And I would say to the noble Lord, Lord Carrington, that I feel that it was also contrary to the honour of a Peer of the Realm, a Secretary of State

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of Her Majesty, to deal or negotiate with assassins. That group of assassins were finally destroyed by the Mongols who understood the situation; they summoned them to a conference and assassinated the lot. That is the only method that has ever worked. Since then throughout the history of the Moslem world, in India, Africa and Persia, assassin states have arisen and it has never been possible to negotiate or appease. They have had to be destroyed. We destroyed one part of the Stern. Nobody ever dealt with them successfully. Now there are two, one of which is Libya.
Libya is a kind of aberrant sport. Libya ought never to have been a state. It exists only because of the irresponsibility of the United Nations. It is a tribal base of an eccentric millionaire assassin who employs assassins internally, externally and imperially. His latest victim has been that very great man, Sadat. I do not believe that this state should be allowed to continue to exist. It ought to be destroyed and we shall not have peace until it is destroyed. It ought to be joined on to Egypt which is the nearest area capable of administering it.
The PLO on the other hand is a far more typical assassin state or assassin organisation. It is quite remarkable how it has followed the rules laid down by Alamot: first, the formation of the gangs dedicated to kill; secondly, the territorial base formed in Lebanon and now being sought in Israel; thirdly, their castles, in their modern form refugee camps, fortified and levying tribute on UNRWA. That has been the set-up.
Lebanon was tolerant, charming, liberal and civilised. It has been destroyed because it admitted the assassins. During 12 years—this is the latest record—there have been 281 assassinations in Europe carried out by the PLO; 85 per cent. of their victims have not been Jews: they have been people whom the PLO wanted to terrorise and punish. In Israel they have killed 750 and wounded another 3,500. They have consistently and continuously trained terrorists for outside terrorist bodies including the Irish, including—and in his confession he has given an elaborate account of it— Agca, the attempted murderer of the Pope. There is an example of a PLO trained assassin within the last two years.
I do not know what on earth the noble Earl, Lord Onslow, was thinking about when he said that there are signs that they had changed. I see no sign of it. There has been no departure from their consistent role as an assassin state of a type which we have known for 2,000 years and which has been continually recurring in the Moslem world. Now the noble Lord, Lord Carrington, wants to inject this assassin state into Israel. I am not so impressed by the iniquity of this proposal, although I do regard it as iniquitous, as I am by its sheer ineptitude.
The noble Lord went to Riyadh as president of the Common Market seeking—he said today—peace on behalf of the Ten, and I think that elsewhere he has said, "this European contribution to the peace of the Middle East". It reminds me very much or my old friend Dick Crossman when he set out to discover a
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third force—Europe—which was to have a policy of its own between East and West. The trouble was that Europe was not a force; it was not a unit that could defend itself; it had to be defended by the Americans. Now it is not NATO. It is the Common Market; it is not an army, it is not a unity; it does not have the unity of a farmers' co-operative.
As the president of Europe the noble Lord proceeds to have a foreign policy for the Middle East. It is a sort of naive folie de grandeur. There at Riyadh, he discovers the Fahd plan. It is not a new plan; there is not a new thing in it. It has been rejected, and very obviously rejected, by Israel. It does not want an assassin state within its borders. Consider what happened to the Lebanon. Israel does not want it to happen to them; Israel is not a Rhodesia. Israel is not going to surrender its nationhood to please the noble Lord. The plan has been rejected by Egypt, who does not want an assassin state on both its borders and who is already terribly injured by the loss of perhaps the greatest man of our generation. It has been rejected by the United States of America because it cuts clean across Camp David. It has been accepted only by the noble Lord.
What is the effect of this performance? Israel is outraged, not just Mr. Begin. There is not a single party or organisation which would look at this nonsense. The result is that the noble Lord may well have sunk Camp David. Sinai has not yet been surrendered to Egypt, and Mr. Begin, frightened by this performance, and a good many of the Right-Wing in Egypt may be having very many second thoughts as to whether they dare surrender Sinai in face of this new threat. It has certainly disqualified Britain as a force to see fair play in the Sinai evacuation, because no one in Israel will believe in Britain again.
The noble Lord has irritated Egypt. Egypt went to Camp David because Sadat realised that the Fahd policy was entirely impracticable and must be rejected. He has infuriated the United States of America. Reagan had worked enormously hard for the solution; by an astonishing effort he succeeded in getting permission from the Senate to supply aeroplanes to Saudi. At this point the noble Lord the Secretary of State—no, the president of the Common Market for the year— without consultation produces a European plan which he cannot possibly deliver, and which cuts clean across all that American policy has been working for. Of course, the Americans were furious. It was not unforeseeable that they would be. The dressing down that Secretary Haig gave "Mr. Carrington", as he described him, was singularly well deserved, and wants saying. Not since Suez have relations been as bad with America as have been produced by our Secretary of State's efforts.
Let me return to my quite single point. You cannot deal with assassins. That is the experience with one assassin state after another in 2,000 years. You cannot appease assassins. They must be exterminated. Until one develops that kind of will, there is no peace in the Middle East.
Lord Morris: My Lords, before the noble Lord sits down, he suggested in his remarks that it was below the

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dignity of my noble friend Lord Carrington, as a Peer of the Realm and as Her Majesty's Secretary of State for Foreign and Commonwealth Affairs, to treat with assassins. May I ask him how he reconciles this view with the fact that a far greater man even than my noble friend, some 2,000 years ago in Palestine, had no difficulty whatsoever in treating with murderers, thieves and adulterers?
Lord Paget of Northampton: My Lords, the remarkable man, or perhaps God, to whom the noble Lord refers had one great advantage which the noble Lord, Lord Carrington, has not: He was not responsible for government.
10.22 p.m.
Lord Vernon: My Lords, it is always stimulating to listen to the noble Lord, Lord Paget. I shall not follow him on the subject of political assassination but instead devote my remarks, as some other noble Lords have done, to the North-South dialogue and to the implications of the recent Mexico Summit. In view of the lateness of the hour I propose to omit what I was going to say in general terms about the Summit and to concentrate on two particular aspects which the world leaders discussed and one aspect which they did not discuss but which they should have done.
The first concerns the world food supply. The seriousness of the present situation is not fully appreciated. During the 1960s and 1970s, due largely to the green revolution, world food supply grew by an average of 2½ per cent. and was therefore able, by a small margin, to keep ahead of population growth. It is perhaps significant that peak production of food was reached in the early 1970s, and in the five-year period 1975 to 1980 the rate of growth had fallen to 2.1 per cent.
Moreover, although in the world as a whole there was during the 1970s this modest margin, it did not occur in Africa. Food production in Africa has been growing at the rate of 2 per cent. while population has been growing at 2.9 per cent. As the population explosion in Africa really gets under way—and it has only just begun to do so—this gap between indigenous supply and demand will become far greater. For instance, it has been estimated that cereal imports to the Continent which were 7.3 million tonnes in 1975 will rise to 16 million tonnes in 1990 and 30 million tonnes in the year 2000. I say "will rise", but of course the African countries do not have the foreign exchange to pay for such imports. Moreover, it is not just a matter of availability. In a country such as Tanzania, which hovers on the verge of famine, there are no adequate storage facilities and the system of distribution is almost non-existent. There is in fact a complete breakdown in the whole administrative machine, and what goes for Tanzania goes for a number of other African countries as well.
Of course, we should encourage these countries to be more self-sufficient, as the Prime Minister and others have said, and of course Africa can grow more food given the necessary inputs and irrigation. But let us be under no illusion. Time is getting short and massive capital and human resources will be required if a catastrophe is to be averted. Even in Asia, where the green revolution has had its greatest effect, only a
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temporary reprieve has been won; and green revolutions do not happen every decade.
The second of the themes discussed at the Mexico Summit concerned energy. Energy has many connotations but I shall be considering only that source of energy provided by timber. At present, the forests of the third world are being cut down at a prodigous rate. It is happening in India and Nepal, Brazil, South East Asia and Africa. Part of the reason for the destruction is the wish to cultivate the land cleared in order to grow cash crops, a self-defeating object when the ecological balance is upset in the process. But the principal reason for deforestation is the need for cooking fuel. Indeed, with the exception of dung, there is no other fuel available for cooking in most of these countries.
When I was in central India earlier this year, I drove about 30 miles from the local capital city of Jabalpur to visit some very poor and backward villages. What struck me most forcefully on the way there and back was that the only traffic I encountered was an endless stream of bullock carts carrying wood from the forest to the town. Every day the carts penetrate more deeply and every day, because there is no adequate replanting programme, the reserves of forest are further depleted. According to an article in the Guardian on 15th October, forest cover in the upper catchment territories of the Ganges in India and Nepal has been reduced by 40 per cent. in the past 25 years. In the result, the Ganges flow has declined by 18 per cent., soil erosion has increased alarmingly and the silting up of the river bed has aggravated the risk of monsoon damage which already causes hundreds of millions of pounds worth of damage every year.
Surely this is an area where not only should the third world countries help themselves by massive programmes of replanting, but we in the wealthier countries can do much with our expertise in forestry management to help them. We could do so at a relatively low cost.
Many people do not seem to realise that trees are like babies. It is not enough just to plant them or to bring them into the world. You have to look after them and care for them until they are old enough to stand on their own feet. I should like to ask the Minister to state, when he replies, or perhaps at a later stage—he will have so many questions to answer—whether any of Britain's annual expenditure on overseas aid is directed specifically to forestry projects, and whether the Government will not consider whether more could be done in this field.
Finally, the most important action of all which these countries can take to make the living conditions of their people more tolerable is to curb their rate of population growth. This point has already been referred to by both the noble Lords, Lord Houghton of Sowerby and Lord Oram. I have previously made speeches in your Lordships' House about population and I shall not inflict another one on your Lordships at this hour of the evening. I shall say only this. The present world population of 4.5 billion will reach 6 billion in the next 18 years and will thereafter climb to 12 billion early in the next century unless something dramatic is done to stop it; and nearly all of this growth is taking place in the third world.
Every single problem which these countries face, whether social or economic, whether it concerns housing

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or employment, or food, or energy, is intensified a hundredfold by the relentless pressure of population on resources. It is as if we in this country, with a population of 60 million, were told that within the next 18 years we would have 90 million people to look after. That is the measure of the problem.
It is not a hopeless situation. China, Sri Lanka and other countries have already shown what can be done to keep population growth within manageable proportions, given the necessary determination. But, generally speaking, the seriousness of the crisis does not appear to be appreciated by world leaders, as evidenced by the fact that the subject was not even discussed at the Mexico Summit. Can the Minister tell the House the reason for that omission—bearing in mind the attention that was drawn to it both in the Brandt Report and at the Ottawa meeting in July?
In a speech to the World Fertility Survey in July, 1980, Mr. Patrick Jenkin, Secretary of State for the Social Services, as he then was, said this:
"When one ponders the daunting problems of north and south, of rich and poor, so clearly delineated by the Brandt Commission, I am driven to the view that control over the rate of world population growth is the most crucial need of all. It is the key to the future of mankind".
Those were prophetic words. If I felt that Mr. Jenkin's views were shared by the Prime Minister and by the other world leaders, I would have more confidence in the future of mankind in the 21st century than in fact I have.
10.34 p.m.
Lord Brockway: My Lords, my first words must be to express appreciation to the Chief Whip and his colleagues for the compliment that they have paid to me in asking me to conclude the debate today, following 34 other Back-Benchers. During the day a number of my noble friends have come to me and have expressed regret that a man of my age should have had to sit through the debate today and make his speech at this late hour. That is rubbish. I am a young man, and I appreciate the compliment that the Chief Whip has paid to me in thinking that I could speak last.
My Lords, I think this debate has indicated one thing quite clearly: that there ought not to be a single day for discussing both foreign affairs and defence. Indeed, even in foreign affairs we have covered Afghanistan, human rights in the Soviet Union and in other countries, Namibia, Cyprus, the Middle East and hunger in the third world, and each of those subjects deserves a different discussion. And when to them is added the intricate problems of defence, inevitably we have the confused debate which has taken place today. Do not misunderstand me: nearly every speech today has been of value extraordinarily detailed in information. I have been most deeply moved by the speeches of my noble friend Lord Oram and my noble friend Lord Vernon about hunger in the third world; but the Minister would have an impossible task in seeking to deal with all the problems which have been raised in this complicated debate. I should have liked to discuss so many of those issues. I make reference to only one, and that is the Middle East, to pay my tribute to the contribution which the noble Lord, Lord Carrington, has made towards a
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solution of that problem.
My Lords, I have given notice to the Government that tonight I intended to put a question on an issue which is likely to become of urgent importance within the next few days. That issue is the reviewed strategy of the United States Government in Central America and in the Caribbean. With the Minister's permission, in view of the late hour I will not put that question to him tonight, but perhaps he would be willing to write to me in answer to it; or perhaps the Government will make a public statement on a question of which we have little knowledge now but which, in the next few days, will become one of the most important issues in the world. I do not know whether the Minister would consent to my withdrawing the question tonight under those circumstances? He indicates that he would. I thank the noble Viscount very much.
I want to recognise the sincerity of members of the Government when they say that they are just as deeply concerned about the danger of nuclear war in the world as we are. I accept that, but I believe their view as to deterrence by arms strength is deeply and tragically wrong. It is quite true that since the Second World War—36 years—there has not been a world war. It is perfectly true that that fact may be partly due to a realisation by both sides of what a nuclear war would mean. But, on the other hand, during these 36 years armaments have mounted and mounted, becoming more and more destructive and, at the end of it, the danger of a world war is today greater than at the beginning of that process; and one rejects entirely the view that deterrence by arms strength can bring peace to the world. What is the situation at the end of it over the fear of a nuclear war? A recent poll showed that 57 per cent. of the population of this country think that a nuclear war will take place during their lifetime; and they have reason for that view.
I have drawn attention previously in this House to the report of the experts committee on nuclear weapons which was presented to the United Nations General Assembly a fortnight ago. What did that report say? It stated that there are now over 1 million weapons in the world carrying nuclear warheads. It stated that a nuclear weapon has now been devised 4,000 times as destructive as the bomb which fell on Hiroshima. That bomb killed 65,000 people immediately and 200,000 later on. Now there is a bomb 4,000 times as destructive as that. The report of the experts also said that the explosives with nuclear weapons are now so great that three tonnes could fall on every man, woman and child on earth. When these are the facts about the new armaments that are available, is it any wonder that people in this country, people over the whole of western Europe, people in far distant Australia and New Zealand, are now coming to the conclusion that man cannot live with the nuclear weapon? The General Assembly of the United Nations has asked every Government to distribute the facts which the 12 international experts have reached regarding nuclear weapons. When I put a Question in this House as to whether the Government would do it, the answer was that they will consider a summary in the newsletter about arms control. How many people read it? A few hundred, a few thousand, perhaps? But these facts ought to be known because these facts will determine the whole future of mankind.

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I go on to say this. I do not believe that the ending of nuclear weapons is enough. In the last war, 50 million people died by conventional weapons. Therefore, our campaign today must not only be a campaign against nuclear weapons; it must be a campaign for world disarmament.
The people of this country are still ignorant of the great opportunity there is today for world disarmament. Three years ago the General Assembly of the United Nations on Disarmament made four major recommendations. The first was ending nuclear weapons and weapons of mass destruction. The second was the phased abolition even of conventional weapons over a period of years. The third was that that should lead to general and complete disarmament in the world except for what was needed for internal security and as a contribution to United Nations peace-keeping forces. They made a fourth recommendation which will appeal to my noble friends Lord Oram and Lord Vernon: that the expenditure on military equipment should be used instead to end poverty in the world.
Those were the four recommendations. Our Government were committed to it, as were the American Government, the Soviet Union, everyone. They have appointed a committee in Geneva to seek to implement those recommendations. I am deeply disappointed by the proceedings at Geneva. I find it very difficult to find consistency between what is said from the Front Bench opposite about disarmament and the action of British representatives on that Geneva Committee. They have even opposed any working committee to consider nuclear arms. They have actually said that until 1990 the present discussions, bilateral and multilateral, between the super powers should be allowed to go on. They are rejecting entirely the recommendations which were made by the United Nations Assembly three years ago. Fortunately, on that committee the unaligned nations have a majority of one. They formed their committee of 21 and have accepted the principles of the treaty which the World Disarmament Campaign has proposed to the Geneva Committee to carry out the recommendations of the United Nations General Assembly, to submit to the renewed United Nations General Assembly on Disarmament next year.
The issue of disarmament in the world will then become the greatest political issue on the world scene. Everyone will be discussing it. We are not relying on the super powers who in the Security Council would have the final word of endorsing what the General Assembly will say. But we are creating in the world today a movement of which the media and politicians have at this moment no understanding, a movement in this country, a movement all over western Europe, a movement extending to Japan and Australasia. Beginning now are negotiations with the peace committees in the communist countries. I am confident that in the next decade we may be able to create in the world such a movement that the words of General Eisenhower will be fulfilled. He said:
"Some day the demand for disarmament by hundreds of millions will become so universal and so insistent that no man, no nation, can withstand it".
We are now seeking to create that kind of movement in the world. We are succeeding in doing it. I am 93, but I expect to live to see the foundations of that
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new world order, ending poverty, ending arms and giving the opportunity to every child on earth to live to the full fulfillment—physical, mental and spiritual—of which they are capable.
10.50 p.m.
Lord Mayhew: My Lords, I am sure that we are all grateful to the Chief Whip for his wisdom in inviting the noble Lord, Lord Brockway, to wind-up this debate from the Back Benches. It is plain that the later the hour, the greater the vigour and passion with which the noble Lord speaks. We are all extremely appreciative that he could give us his speech tonight, no doubt shortly before moving on after this debate to some other disarmament discussion in some other place. He is indefatigable. May I say, as a former very old colleague of his, how delighted I am to follow him in this debate, and how deeply all of us admire his amazing vigour and sincerity after so many years of campaigning.
On the other hand, there are one or two things that we might disagree with in what he said. The fact that the nature of war is now so far more appalling than it was 36 years ago, the appalling lunacy of the arms race, the unthinkable nature of nuclear war if it should take place, does not automatically mean that the danger of war breaking out is greater than it was 36 years ago. For instance, there are those of us who had to live through the time of the Berlin blockade. I really believe that if my former honourable friend, the noble Lord, considered carefully the relations between East and West immediately after the war, he might come to the conclusion, as I do, that, in theory, though war has become infinitely more horrible today, it has also become somewhat less likely than it was just after the war.
How glad I was that the noble Lord, like other noble Lords before him, criticised the idea of holding a single debate on foreign affairs and defence. The number of different countries and different subjects that have been referred to in speeches that, frankly, bore no relation to each other has been most remarkable. And yet there were one or two general trends in the debate. I believe there was a great consensus, among those with different views on nuclear strategy, that it would be in the interests of peace if NATO could close the gap in its conventional strength in Europe today. This was mentioned by a number of speakers.
I must say that I have always found it strange that we accept so easily the assumption that there must be some gap, some inferiority, in the conventional forces of NATO, compared with those of the Warsaw Pact countries in Europe. This lies at the heart of our nuclear dilemma. It lies at the heart of the problem as to whether one should renounce the first use of nuclear weapons, because it is impossible to imagine NATO contemplating the use of nuclear weapons, except in the event of impending defeat by conventional Soviet attack.
Why, then, do we assume so readily that we cannot create conventional forces able to deter and, if necessary, to defeat a Soviet attack? Since we would be on the defensive, we would not have to match the Soviet Union man for man, or tank for tank. The Soviet

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Union is handicapped by a number of extremely dangerous factors from her point of view. She has to deploy a great proportion of her conventional strength in the East against China; her lines of communication through Poland and other Eastern European countries are extremely vulnerable; she has severe economic problems and food shortage. Why then, in Heaven's name, can the NATO countries with their greater population, with their more advanced technology, with their stronger industrial base, not match the Soviet Union in conventional arms in Europe? A great deal could be accomplished if we could do that.
The answer, of course, is that I believe that we have not had in the past the political will; we have not had the political leadership; we have looked to get security on the cheap through nuclear weapons; and we have had an excessive reliance on the credibility of nuclear weapons which is beginning to erode. It is not really a matter that NATO has not spent a lot of money and is not now spending a lot of money. On the contrary, the United States, I read this week, is about, over the next eight years, to spend £100,000 million on nuclear weapons: £100,000 million on nuclear weapons over the next eight years. I find it hard to believe that Europe's security would not be improved if some part of this incredible sum were to be spent on giving the NATO troops in Europe the anti-tank, anit-submarine, anti-aircraft weapons of the latest pattern that they require: hardening the airfields, hardening supply depots, doing all the other things which are needed to close the gap in conventional power between NATO and the Warsaw Pact countries.
And what about the European allies in NATO? They might begin by spending the same proportion of their gross national product on conventional weapons as we do in this country. As for ourselves, we should be spending a bigger proportion of our defence budget on conventional as against nuclear weapons. It is an extraordinary misjudgment of the Government, it is a grotesque misjudgment, that in fact they are doing exactly the opposite—that their policy is, on the contrary, to spend a greater proportion of their budget on nuclear weapons compared with conventional weapons. They build Trident and at the same time they cut the planned frigate and submarine fleet and close Chatham—and even withdraw our guard ship from the Antarctic, which the noble Lord, Lord Murton of Lindisfarne, very reasonably complained about. In this way the Government reduce our capacity to sustain conventional war in Europe and they cut NATO's reinforcement capacity in such a way that NATO is pushed into a commitment to use nuclear weapons if the reinforcement capacity is not there. After the five days in which a reinforcement capacity becomes obligatory, NATO gets pushed into a commitment to the use of nuclear weapons. Perhaps I should not press the Government too hard on Trident. The gossip is that they are going to scrap it.
Viscount Trenchard: The noble Lord has got the wrong man!
Lord Mayhew: Perhaps not yet, but I hope the noble Viscount has studied very carefully the Financial Times'
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financial assessment of the Trident project. Perhaps he could say when he replies whether that financial analysis of the Trident project which was published in the Financial Times last week corresponds with the Ministry's figures; namely, that you have got to put another billion pounds on to the £5 billion because of the new Trident which the Americans have gone for and which we shall be obliged to go for—Trident 2—plus another £3 billion for inflation and the rise in the pound, making, according to the Financial Times, £7 billion. Perhaps the Minister would comment on these figures when he comes to reply. My judgment is that the Government will not hold course on this because of the spiralling cost and also because of the technological point which I raised briefly and a little clumsily with the noble Lord, Lord Trefgarne, at Question Time. Perhaps we could have an answer on this one, too.
Both the United States and the Russians are busily building a capacity to put into space laser weapons. Everyone agrees that if this becomes practicable it is revolutionary. The Secretary of State for Defence—the only comment I have seen him make on this—says that this is not likely before the end of the century, but I put it to the noble Viscount that if we do not get Trident until, say, 1993 or 1994, if this weapon is deployed by the end of the century it will have exactly six years of life. Perhaps he will comment on this. What is the Ministry's view about the deployment of space-based laser weapons? It must have a view, and if it goes ahead with Trident the view must be that it is not on; but let him say so. We know that the Americans and the Russians are working on it very hard.
Of course, my noble friends and I are opposed to the Trident project and have been from the start, even when it was £5 billion only. We know the Government argument very well, that the Russians might be deterred in certain circumstances by the possibility that Britain might decide to go it alone: that it might launch a strategic nuclear weapon against the Russians without the support of the Americans—indeed, in face of the strongest opposition from the Americans, because that would be the case. It is a very far-fetched scenario and much too far-fetched, in the opinion of my noble friends and myself, to be worth the vast cost and to justify the diversion of effort from the conventional forces of this country.
Of course, a much better way of getting a conventional balance in Europe would be to persuade the Russians at Vienna to agree to mutual and balanced force reductions. That is the best way of doing it, but meanwhile I warmly agree with those noble Lords who say that, to raise the nuclear threshold in Europe and to lessen the likelihood of Soviet aggression, we must try to narrow the gap in conventional forces in Europe.
There was consensus on one or two other things that I think I have no time to go into, except that I was very much impressed by those noble Lords who attacked the growing habit of equating the Soviet Union and the United States as creators of tension in world affairs. This technique of force equivalent is a well-known communist propaganda technique. In the old days one used to say, "Well, the Russians have got the KGB", whereupon some bright Leftist lad would

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reply, "Ah, but we have MI5", and that was considered a good argument. Today I am not sure whether we have got MI5, or had at that time; it may be that the Russians had MI5 at the time. The noble Lord, Lord Weidenfeld, made a most trenchant attack on this and of course it is ridiculous. The United States is well open to criticism in El Salvador, but to equate that in any way with Afghanistan is of course a load of rubbish.
More helpful still in trying to lower the chances of nuclear war in Europe would be success in the forthcoming bilateral disarmament talks. I agree with the many noble Lords who raised the question as to why they are bilateral. It is surely extremely anomalous and unsatisfactory when these discussions are primarily about the deployment of nuclear weapons in Europe that none of the countries of Eastern or Western Europe should be participants in the discussions. That cannot be right. It is not that the Americans are providing the weapons at all. As one noble Lord said, we provide the bombers and the Polaris submarines are attached to a European role. We are entitled to he in these discussions, and when we recall to mind the somewhat erratic record so far of the United States Administration in foreign and defence policy, it is hard to believe that in negotiations about the deployment of nuclear weapons in their own countries the West Europeans could not speak with at least as much wisdom as their American allies; and it is equally difficult to believe that they have not got the right to do so.
I suspect that the noble Viscount will reply, "Well, there is the NATO consultative council". Of course there is, and it is important and has done an important job. But could we be told what the role of the NATO consultative council will be in the later stages of the negotiations? We can be sure, I regret, that the Soviet and American military advisers during these negotiations, heavily armed with technological arguments, will be warning their political chiefs of the disastrous consequences of agreeing to proposals of the other side.
Suppose the Americans do appear during these negotiations to the Europeans to be temporising or to he pitching their demands too high. What right of intervention have the Europeans got? Do the Americans have the right to break off these negotiations without the agreement of their European allies? It seems to me that a decision to break off negotiations ought to be a collective NATO decision and not an American decision taken alone. May I express the warm hope that the Americans and the Russians will bear in mind, which has not always been borne in mind in past disarmament discussions, that an agreement between East and West could be in the interests of both sides even if at the margin it suited one side better than the other.
I believe this is the spirit in which both sides should go into these discussions because what is at stake in these talks is not just the deployment or non-deployment of cruise missiles and SS20s, and it is not just the overall count of warheads on each side; what is at stake is the whole concept of disarmament by agreement. The talks could be an historic turning point and we want the Government to do everything in their power to make them succeed.
11.7 p.m.
Lord Peart: My Lords, I read the Queen's Speech most carefully and I have listened with great interest to this debate, but I am still uncertain as to one fundamental point: How can the Government hope to achieve the objectives stated in Her Majesty's Speech by the pursuit of those policies which we have heard outlined today?
We are all in agreement on the vital importance of the search for peace. In the Bronowski Memorial Lecture given on 23rd October Nicholas Humphrey cited opinion polls carried out in the past year which show that nearly half the adult populations expect a nuclear war within their lifetime and that fewer than one in ten believe that they and their families will not be killed. I believe these are appalling statistics.
Already within its European theatre NATO as well as the Warsaw Pact has the capacity for overkill. Excluding short range battlefield weapons and intercontinental systems, the Warsaw Pact is estimated to have 2,004 warheads available for delivery on Europe, and NATO 1,168. Of course, President Reagan may believe that it would be possible to have a nuclear war limited to Europe, but many are less sanguine, including the International Institute for Strategic Studies, and indeed also Mr. Brezhnev. The theory of flexible response which unfortunately holds sway among NATO strategists is, in my opinion, deeply flawed. Not only does it invoke the spectre of a preemptive strike but it has also undermined the hitherto fundamental assumption that nuclear war is unthinkable. In a letter to The Times on the 3rd of this month Professor Michael Howard wrote:
"The belief that the Russians can only be deterred from attacking us by the installation of precisely matching systems—ground launched missiles must be matched by ground launched missiles—is politically naive, I think to the point of absurdity".
Yet when my right honourable friend Mr. Foot returned from a visit to Moscow, where President Brezhnev reaffirmed his readiness to negotiate on reducing the number of SS20 missiles in Europe, he was greeted with scorn and derision.
I can only reiterate the call made by Mr. Heath recently for a genuine determined attempt to reach agreement on arms limitation with the Soviet Union. This echoes the statement made to Mr. Foot by the head of the CPSU delegation in Moscow that:
"it is necessary to start serious international negotiations promptly. Not mere preparations for negotiations and not negotiations about negotiations but serious negotiations directed to eliminating the danger of war and to reducing armaments".
Mr. Heath also suggested that the resources saved by such a reduction in the level of armaments should be diverted to development. We on this side of the House would like to give our unequivocal support to this proposal. After all, there are 500 million severely undernourished people in the world—how could we do otherwise?
I believe that Britain ought to be using her influence in the NATO alliance to a much greater degree than in the past towards the opening of SALT III negotiations to include European nuclear weapons. But we cannot hope to make progress on limiting European strategic systems if, at the same time, we are expanding the British system from 96 Polaris warheads to 300 Trident warheads—the noble Lord who

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spoke for the Liberal Party mentioned this and I agree with him in what he said—as well as welcoming 160 cruise missiles on to British soil.
Trident, we were originally told, would cost around ·5 billion; a frightening figure in itself given the state of the economy and the cuts that will have to be made in other areas to compensate. For example, the defence budget as outlined would keep 23,000 German civilians in jobs while causing the closure of British shipyards. It is rather ironical. Now we are being asked to countenance the expenditure of anything up to ·9 billion on Trident II which is more accurate and more destructive than the C4 system. It will have up to 14 warheads compared with eight in the C4 and three in Polaris. Let us be quite clear about this: Trident II is a first-strike weapon, unlike Polaris which was designed only to be used in the last resort. I think that the purchase of Trident II is not only economic madness, but would also result in our becoming a direct threat to the Soviet Union which would surely create the very situation we are trying to avoid. I ask the Government: is this really "an efficient use" of resources?
Our allies are unhappy about the reduction in our conventional forces that will follow from our commitment to Trident. At a time when many NATO countries are beset with doubts about the basing of cruise and Pershing missiles in Europe—in West Germany, for example, Chancellor Schmidt's pledge to allow 96 cruise missiles on German soil could conceivably affect him politically in an adverse way, while in Holland and Belgium there is serious risk that the 48 missiles destined for each country will never be deployed—Britain's insistence on an independent deterrent is threatening to undermine the alliance. There is uncertainty among our allies about the entire British doctrine of nuclear independence. A Dutch source was quoted in the Guardian on 20th May as saying:
"it does rather suggest that the British do not believe in the long term reliability of the Americans in the question of nuclear deterrence".
In this situation our unqualified acceptance of cruise must appear somewhat contradictory.
We can only proceed with Trident at the expense of our conventional forces, but it is the disparity between East and West in conventional armaments which is, in my opinion, the most worrying aspect of the existing military balance. I believe that it is ridiculous to suppose that the Soviet Union believe that they could launch even a limited nuclear attack on Europe without suffering instant and devastating retaliation; but a massive conventional attack from that quarter is, I fear, a less remote possibility. Britain's contribution to NATO's naval forces and maritime air effort, particularly in the eastern Atlantic, has been unique, and yet it is the Navy that is to bear the brunt of the Government's cuts, despite the fact that the Americans have said that it is unlikely that they will be able to fill the resultant gaps in NATO's forces much before 1990. Indeed, Mr. Weinburger, the American Defence Secretary, was highly critical of Mr. Nott's plans when they were announced in the summer, fearing that the Royal Navy would be incapable of independent action
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and even more reliant on American support beyond coastal waters.
I am not a unilateralist. I cannot help but heed the warning of Dr. Andrei Sakharov who has stated that the "massive one-sided campaign", as he has called it, in the West against the deployment of nuclear weapons in Europe is in danger of giving the impression that totalitarian strategists would be able to capture the West with their bare hands. But I have every sympathy with those who can see no other way out of the horrific situation we are in. It is policies, such as those adopted by this Government and by President Reagan—whose decision to go ahead with the production of the neutron bomb has brought us one step closer to the unthinkable—and the way in which those policies are presented to the public, which are swelling the ranks of the unilateralists. Could any other cause have produced a turnout such as that which we saw at the CND rally? I do not agree with them, but I admire them for their views and their ability to convey their views to a wide public. I fear that this Government are turning what should have been a rational debate on the defence of this country and of Europe —whether by nuclear or other means—into an emotional battleground from which we shall all emerge as losers.
Therefore, I hope that this debate will be a milestone, because I believe that many of the speeches that I have heard today have been of an exceptionally high standard. The only fault about the debate is that we have had two debates in one. We should have had a debate on defence and the other debate separate. I think that that would have been better. I am sorry that the Government have treated the House in this way.
11.17 p.m.
The Minister of State for Defence Procurement (Viscount Trenchard): My Lords, a number of noble Lords have made the point that foreign affairs and defence encompass a very wide area and that one day's debate of 37 speakers does neither justice to the debate —indeed, the noble Lord, Lord Shinwell, suggested that it should be called a deliberation or a series of deliberations—nor, as some sympathetic noble Lords opposite have pointed out, does it give the Minister answering the debate any real possibility of answering the many very important and very interesting contributions.
However, I would draw your Lordships' attention to the fact that, first, it is the practice of this House to allot only the one week for the debates on the Queen's Speech; and, secondly, to the fact that there are separate occasions, both in the foreign affairs field and in the defence field—and there have been several of them this year, and I am sure that there will be more in the defence field—to debate all these questions in more detail, and separately.
Faced with the 35 contributions, I shall try to ensure that where specific questions have been asked which I do not answer—and this will be the majority—letters will follow. I have already nodded to the noble Lord, Lord Brockway, in relation to one specific question. I shall also draw my noble friend's attention to all the important speeches in the foreign affairs area that have

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been made since he had to leave the debate. Therefore, I must start by apologising for not having time—and it would be a mistake to hurry—nor perhaps the credentials to go into such vitally important subjects as the North-South problems, raised by the noble Lord, Lord Oram, and by the right reverend Prelate the Bishop of Derby, except to say that we believe that there were more positive results in the sidelines of the Cancun conference if not in the main conference itself, and that initiatives of various kinds are likely to be launched, and we shall certainly support them. Nor will I have time to comment on the difficult position of Cyprus, where again in letters we shall make clear that we believe there is more hope than the noble Baroness, Lady Jeger, suggested.
A quick word in passing to my noble friend who raised the position of Poland again and paid tribute to the magnificent qualities of the Polish people, to whom we owe so much in our struggles in the last war, and I certainly endorse what he said. I was in contact with the Poles when they were fighting in our armies, and I endorse her sentiments completely. In so far as I am qualified to say so, I think their problems in the economic field may well benefit from joining the IMF, if indeed that organisation is prepared for them to do so. I think even other economies, including our own, may have benefited at points in time. But, as my noble friend said earlier, what we believe about Poland is that its future must be left to the people of Poland to decide.
I may, or may not, have time at the end to go into more specific answers which I have here. In the meanwhile I should like merely to say on the foreign affairs aspects that I believe there was a considerable degree of support, and on the whole very little criticism notwithstanding the speech of the noble Lord, Lord Paget, for the many important endeavours of my noble friend the Foreign Secretary. I particularly noted the contribution of the noble Lord, Lord Houghton, who was, as we are, so insistent that we place immense importance for the future development of this country and of peace, and of everything else, on making the EEC work. Therefore, I believe that there is no need for me to underline any further the masterly review that my noble friend engaged in when he opened this debate.
I believe we should not underline the small differences of emphasis—some very fairly stated by the noble Baroness, Lady Llewelyn-Davies, as opposed to, in my view, badly overstated by the noble Lord, Lord Paget—which the press allege to exist between us and our allies in areas like the Middle East. The USA and Europe both desperately need peace in the Middle East, as the Middle East itself needs it. It would be impertinent for me to add anything to what my noble friend has already said, and of course he is well aware of the need to work in close co-operation with the USA. In President Reagan's words, Prince Fahd's proposals, I would say to the noble Lord, Lord Paget, were welcome as a beginning point for negotiations in due course.
The noble Baroness, Lady Llewelyn-Davies, referred to China. I just wanted to say to her that my noble friend said to me as she spoke of that great country which he had not mentioned as such, that he very much agreed with the points she made. Although there are major differences between the systems that exist in China and those in the free democracies of the western
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world we are pushing forward with all points of contact wherever possible in the hope that those differences may become smaller as the years go on.
I think it would make the best use of my remaining time to concentrate on disarmament and defence, as they fall more within my area, and as to cover all areas would be an impossible task. That, I am afraid, means that I have to return to the most oft-repeated subject during the day, namely, the main division between the major power blocs of the USSR and her main allies and the NATO pact forces. Plenty of reference has already been made to the situation in Afghanistan, Vietnam, Cambodia, past events in Hungary and Czechoslovakia, and I would add just a reminder of the Berlin wall. These matters have merely underlined again that, while there may be differences of view between our allies in NATO about the situation in some parts of the world, there is no room for doubt about the big divide between those two main blocs. There is a broad divide between our systems, our aims and our practices. My noble friend reminded the House that we have now reached the astonishing figure of over 2½ million Afghanistan refugees in Pakistan and Iran, to which we must add the boat people of Vietnam and all the other results of aggression around the world.
The noble Baroness, Lady Llewelyn-Davies, suggested that the Soviet Union had been very much afraid of the West for a long time. I can only reply that with the armaments they have—and they know what they have and what we have—they really have no need to fear whatever. And it can only be a total misunderstanding of democracies, and the restraints of democracies on any rulers with aggressive ideas, if they fear anything from the West. While democracy has its problems, it ensures that rulers cannot be potential aggressors on a grand scale, or at least it makes it extremely difficult.
I have felt it necessary to stress this great basic difference again not in any way to suggest that progress cannot be made on disarmament, because the Government believe very strongly that progress can and almost certainly will be made, for reasons to which shortly I will draw the attention of the right reverend Prelate the Bishop of Durham. It is not for that reason that we want to stress the basic difference. It is to stress the absolute practical need to consider the balance of armaments—and the underlining words are "the balance of armaments"—and the need for the broad equality of deployment of armaments of the nuclear kind. If we were dealing with two power blocs with equal aims and practices and free democracy at one end of the world and the other, then perhaps the case for a lead example to be shown, as the unilateralists ask us, might be at least a fair request. Even then, in a human world it would be human prudence for the leading party to seek reciprocal measures pretty quickly.
But we do not start with two equal blocs, as the noble Lord, Lord Stewart of Fulham, spelt out so very clearly, and which the noble Lord, Lord Beloff, mentioned from a historical point of view. We start with different aims and different practices, and the Government are therefore certain that peace and freedom for the time being, and at the present, must continue to be based on deterrence, and that deter

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rence requires not an exact balance, which we have never advocated, in each and every form of armament, but an adequate degree of balance. I believe that credit has to be given to the judgment of the military and civilian experts in the defence sphere in the free world, as to what is actually a safe degree of imbalance in any area. In the short period that I have been at the Ministry of Defence I am entirely satisfied that it is everyone's aim to achieve only the broad degree of balance required, and to achieve it at the lowest possible level.
I shall not have time this evening to go into the question of laser weapons raised by the noble Lord, Lord Mayhew, but of course these have been studied from every possible angle, including, if satellites of the required size one day can be floated in space, just how vulnerable those satellites would be. Give some credit to our very conscientious and peace-loving experts and to the advice that they give.
The Government believe in the urgent need for multilateral, practical and broadly verifiable arms control and disarmament. I think that when I was not in the Chamber the noble Lord, Lord Soper, made reference to the Queen's Speech not using the word "disarmament". I shall check that in Hansard. But of course a reference to the Queen's Speech shows that, apart from the immense priority with which
"my Government regard the security of the nation and the preservation of peace"
the next paragraph goes into the various places where East-West negotiations and relations are going on, and specifically states our determination to follow those up, notwithstanding the invasion of Afghanistan. Indeed, my noble friend made that quite clear in his opening address.
It is the balance of deployment that must be studied, and there can be no doubt that in recent years the balance of deployment, particularly within Europe, has moved heavily in favour of the Soviet Union by the massive deployment of missiles targetted on Europe, which cannot reach the United States of America, but which can reach the whole of Europe, even when they are withdrawn from Western Russia and stationed behind the Urals.
This is often called the theatre nuclear area, a term I do not like. I prefer the medium-range area as a better title. My noble friend in introducing this debate has made clear that we are now on the threshold of the start of negotiations to bring this whole area under a greater degree of control, and he has further made clear that we are aiming high, and that the zero option as the ideal long-term aim is within our sights. I must say this to the noble Lord, Lord Mayhew, and to another noble Lord who raised the point. I do not believe that the ageing, nearly obsolete and almost out-of-service Vulcan should give us a direct right to discuss the details of the disarmament moves with the United States of America. The United States will be increasingly providing the replacement for their own bombers and our Vulcans, and must enter into detailed discussions with the other power which now has these huge numbers of modern medium-ranged weapons; namely, the Soviet Union. The idea that this is being done without reference to a Europe that is grumbling
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is once again an exaggeration of the free press that we have in the democracies of the western world.
There are two groups and committees where these matters are discussed, and very recently the Nuclear Planning Group issued a communiqué endorsing the plan for the modernisation of the theatre nuclear weapons. There is no possibility that the United States of America, within NATO, can disregard the views of its allies; nor has it ever shown any intention so to do. I think this is perhaps the point at which to say that this is often suggested in relation to the situation after the cruise missiles may have been sited in up to five countries within the NATO Alliance. This also is not a realistic outlook. Apart from the fact that I have answered in this House, as my right honourable friends have often answered, that the use of bases in this country is the subject of joint decision in a time of crisis, this must be pretty obvious in relation to bases stationed in the middle of this country and surrounded by the RAF Regiment.
I do not for one moment believe that the United States of America will cease to be what it is at the moment—the main pillar of our defence and of the alliance—and that it will not act in liaison and extremely responsibly. But if noble Lords believe that at some future date it might not, then I ask them to consider the reality of the situation rather than to continue to harp on the idea that the United States of America can act, or will act, entirely unilaterally.
Lord Kennet: My Lords, will the noble Viscount be so good as to give way? The point is not that anybody suspects the United States of America of not consulting the British Government about these matters; the point is not that anybody suspects the British Government of not consulting the RAF Regiment about these matters; the point is the suspicion that the British Government do not consult the British Parliament about these matters. Can the noble Viscount give us any hope that in the forthcoming negotiations Parliament will be consulted and the public will be informed before the decisions are taken over our heads?
Viscount Trenchard: My Lords, I am not clear as to what decision the noble Lord is referring. The decision that NATO has taken and both Parliaments have discussed, and have had plenty of opportunities to debate, is the modernisation of the theatre nuclear forces, and I will deal at this juncture with the point raised by the noble Lord who has just intervened in relation to the arrangement in 1979, because I think he tended to suggest that it had only recently become a policy of the alliance that either we should go for equality of deployment of theatre weapons or even phase them out and reduce the SS20s. It was made clear in 1979 by NATO when they took the decision that they would have to modernise their theatre forces if the USSR, who by then had been placing SS20s for two years, were not prepared to stop and remove them. The disarmament talks, as part of the 1979 initiative, were always an integral part of this decision.
Lord Kennet: My Lords, perhaps the noble Viscount will allow me one more bite at the cherry. He has said that the British Parliament has had plenty of opportunities to discuss the 1979 two-track decision.

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So it has after it was taken; but it did not have the opportunity to do so before it was taken. Will the Government give Parliament the opportunity to discuss the next important round of decisions on disarmament and on deployment before they are taken?
Viscount Trenchard: My Lords, in a democracy, no Government can continue if they take decisions which they cannot get ratified by Parliament. I will not give the noble Lord a promise that we will not negotiate either in principle, or in certain areas, in military detail which will probably never be released until full and detailed explanations have been given in Parliament. But there is no risk here—no flouting of parliamentary control. Governments have to measure the opinion of their Parliaments and of their countries and they have to act. They cannot discuss everything and every possible plan in Parliament before moving it.
If I may move on—and I am conscious that I am already in trouble on time—perhaps I may say to the noble Lord, Lord Brockway, that Answers to Parliamentary Questions have often made clear that we take a full part in the work at Geneva of the committee on disarmament. However, we do not believe that the committee could make any progress without prior agreement among the nuclear weapon states. That enables me to say to the noble Lord that there is a distinction between apparent moves—sometimes they are real—made in public at many-nation negotiations and real moves, very often, as I have just said to the noble Lord, Lord Kennet, explored in smaller gatherings between those concerned before they reach the main formal theatre of negotiations.
The Government feel that the opportunities for control and reduction of armament are perhaps better—and I want to say this to the right reverend Prelate—than they have been for a considerable time. The economic pressures on both sides to reduce are a powerful aid to this movement. The resolve of NATO and of our American allies, in particular, to continue to defend freedom and to ensure that the balance is not tipped dangerously against us has produced a veritable flood of proposals from the USSR. Many of them, including that which I have already mentioned, in relation to the withdrawal of the SS20 to positions where it could still strike Europe, must come under the heading of propaganda. Nevertheless, we believe that NATO firmness, NATO agreement—contrary to what the noble Lord, Lord Peart, said—and the economic pressures, together with the natural instincts of mankind (we are all on the side of peace) which have been echoed in the debate today, lead to a better opportunity to make perhaps gradual but real progress than has existed for a long time.
I have to return for a moment to deterrence. I think I have already said that the noble Lord, Lord Stewart, and my noble friend Lord Beloff, from quite different points of view have clearly put the totally different position of the potential aggressor compared with the potential defender. In these arguments, of which there were quite a lot today, on the question whether in any circumstances the allies might be the first to use a nuclear weapon, I think my noble friend Lord Beloff put it clearly when he said that the aggressor need have no worry provided he does not aggress.
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There has been too much selective quoting—and it has been selective—of certain comparatively minor differences between our free societies, where statesmen are questioned by Parliament and speak off the record. There has been too much emphasis on small differences in off-the-cuff answers. Perhaps for the purpose of deterence and uncertainty this may be no bad thing. But there is little real difference. I listened very carefully to Lord Carver's quotation of Mr. Weinberger on the BBC. Different words were used for "possible first use" against "first strike". No one is planning a "first strike"; that is technical jargon for a preemptive strike.
I suspect that, in off-the-cuff remarks, Secretary of State Haig might wish he had not said the word "plans" and had talked of "possibilities" in some very unlikely circumstances. The possibility of first use, as many noble Lords have said, is there and has always been there. The existence of this possibility is an extra reason why an aggressor will not aggress and why there will be no war and no first use. The aggressor will calculate the situation at any stage before starting and I hope that he never will start, and he will not if he does not doubt our will and our strength. But if he were to start, he will still calculate at every stage. For that reason we do not fully agree that, while there are great dangers, excalation would be automatic. Should an aggressor miscalculate or believe that he could blackmail or occupy Europe with conventional forces or de-couple the USA from Europe at a fast rate, should we say that in no circumstances we would use a nuclear weapon first? I think a number of noble Lords have answered this question clearly in the debate today.
I must continue quickly with the clock showing I have been speaking for half an hour, but there have been two interruptions. I must choose as the only other points that I have time to raise those raised by the noble Lords, Lord Chalfont and Lord Mayhew, which cover the Trident costs and also Lord Mayhew's question: "Why do you not increase the conventional armaments?" I am not going to go into the detail of the Financial Times articles but our cost estimates for Trident at 1980 prices—if you add inflation you get different ones as you go on—amount to around 3 per cent. of our total budget over the 15-year period. This is barely any different from Polaris costs or indeed from our earlier strategic deterents.
Although costs will alter, and the D5 option will open up other possibilities, it will remain a much smaller part of the defence budget than the Tornado programme, where we do not have to cost any new airfields in with the weaponry. I have said in this House before that if we were to double our conventional forces, and the support that would be necessary for them, and expect the whole of NATO to do the same, this would not achieve parity. It would also greatly exceed 5 per cent. of GDP, even if other nations did the same. And may I remind the noble Lord, Lord Mayhew, that the USSR is coming up to 14 per cent, of their GDP. Notwithstanding all that he said about the forces that the USSR may feel it necessary to keep in the East. even if we were to double the size of our conventional effort we would still be at a disadvantage, and while the cost would not be double the defence budgets of the allies, it would involve

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about a 60 per cent. increase. But by doing that you do not enable yourself to get rid of nuclear weapons. You are still vulnerable to nuclear blackmail.
Although the overkill may be thought in many quarters to be very large indeed, as has been said today, if you listen to the detail of the future methods of antiballistic missiles, and of the vulnerability of bases, you find that the plans that we are making today, both in the strategic and in the theatre areas, are no more than are necessary to maintain the same degree of deterrence at the turn of the century as we have today.
I must end this hopeless task of winding-up at this stage. We agree with the Marshal of the Royal Air Force Sir Neil Cameron to a much greater extent on cruise missiles than either the noble and gallant Lord, Lord Carver, or, in this context, Professor Howard. The noble and gallant Lord, Lord Carver, remains the odd man out of the defence chiefs in relation to the extra value of our independent deterrent. Let me just quickly say this, in order to remove any misunderstanding. The gracious Speech, in talking of increased defence expenditure, refers to a 3 per cent. increase. It is not a new figure. We are not about to propose a greater percentage: it is the same percentage. It shows how careful one must be in writing gracious Speeches. I apologise, my Lords. One of these days I will sum up in a more adequate time. There are so many things and so many answers that I wanted to give to all your Lordships. I shall simply have to resort to letter writing and I shall do that as soon as I possibly can.
Lord Sandys: My Lords, I beg to move that the debate be now adjourned until tomorrow.
Moved, That the debate be now adjourned until tomorrow.—(Lord Sandys.)
On Question, Motion agreed to, and debate adjourned accordingly.

Cumbria Bill [H.L.]
The Chairman of Committees acquainted the House that (pursuant to the resolution of 22nd October last) the Bill had been deposited in the Private Bill Office, together with the declaration of the agent; the Bill was presented, read a first time, and then read a second time pro forma reported from the Select Committee on unopposed provisions with amendments and recommitted to a Select Committee.
County of Avon Bill [H.L.]
The Chairman of Committees acquainted the House that (pursuant to the resolution of 27th July last) the Bill had been deposited in the Private Bill Office, together with the declaration of the agent; the Bill was presented, read a first time, and then read a second time pro forma and reported from the Select Committee on unopposed provisions with amendments.
Derbyshire Bill [H.L.]
The Chairman of Committees acquainted the House that (pursuant to the resolution of 27th July last) the Bill had been deposited in the Private Bill Office, together with the declaration of the agent; the Bill was presented, read a first time, and then read a second time pro forma and reported from the Select Committee on opposed and unopposed provisions with amendments.
British Railways (No. 2 Bill)
The petition against the Bill from the Luton Town Football and Athletic Co. Limited was withdrawn.
  CIVIL DEFENCE: INFORMATION
  CIVIL DEFENCE: INFORMATION