Sitting of 22 December 1982

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

  Royal Assent
  Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

  1. Commonwealth Development Corporation Act 1982.

  2. National Insurance Surcharge Act 1982.

  3. Electricity (Financial Provisions) (Scotland) Act 1982.

  4. Lands Valuation Amendment (Scotland) Act 1982

  5. Writers to the Signet Dependants' Annuity Fund Order Confirmation Act 1982.

  6. Highland Region (Banavie Level Crossing) Order Confirmation Act 1982.

  7. Lerwick Harbour Order Confirmation Act 1982.

  8. Western Isles Islands Council (Omnibus Services) Order Confirmation Act 1982.

PRIVATE BUSINESS
  ULLAPOOL PIER (WORKS) ORDER CONFIRMATION BILL
  Read the Third time, and passed.
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Angola
    Mr. Ginsburgasked the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to visit Angola.
    The Minister of State, Foreign and Commonwealth Office (Mr. Cranley Onslow): Not at present, Sir.
    Mr. Ginsburg: Is the Minister aware that my constituent, Colin Evans, has already served a seven-year sentence there and so have the constituents of a number of hon. Members? Is he further aware that they have another 18 years to serve and that they could very easily become forgotten men? Will the Foreign Secretary consider doing what was successfully done by one of his predecessors, the right hon. Member for Cardiff, South-East (Mr. Callaghan) when he visited Uganda, or will he at least try some other positive initiative to bring these men home?
    Mr. Onslow: I hope that the hon. Gentleman is not seeking to draw a parallel between the present Angolan Government and the Government of General Amin. While
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    I fully appreciate his concern for his constituent, I can assure him we are in touch with the Angolan Government at the highest levels. At the same time, I hope that neither he nor the House will want me to say anything that might jeopardise the chances of the prisoners' release. We should also remember what the Angolan people have suffered, and continue to suffer, since 1976 and understand that an act of clemency which is a decision entirely for the Angolan Government, may still be far from easy in such circumstances.
    Mr. Proctor: My hon. Friend will be aware that one of my constituents, Mr. Malcolm Wright, is also imprisoned in Angola. Is one of the considerations that the Angolan Government will take into account whether there is any current or likely British mercenary activity in that area? Can my hon. Friend shed some light on that, which might reassure the Angola Government so as to enable them to act on a clemency appeal?
    Mr. Onslow: I appreciate my hon. Friend's concern for his constituent. With regard to his point about mercenaries, I have no evidence to suggest that any British mercenaries may have been or are likely to be recruited for any purpose against the Angola Government. If my hon. Friend or anyone else has any information to that effect I hope that they will let me know so that we can take appropriate legal action against those involved.
    Mr. Hooley: Will the Minister assure the Angolan Government that no pressure will be brought to bear on them to dispense with military support from Cuba until and unless there has been a complete withdrawal of South African forces, both from Angolan territory, where they are unlawfully operating, and from Namibia?
    Mr. Onslow: I hope that the hon. Gentleman understands that our anxiety in this matter as a member of the Contact Group of Five is to promote a settlement. We shall do everything we possibly can to achieve that end.
    Sir John Biggs-Davison: With regard to mercenaries, are not the Cubans now the mercenaries in Angola? Is not their withdrawal the key to an easement of the conflict which affects Angola, Namibia and South Africa? Will Her Majesty's Government do all that they can to bring that about? Perhaps Mr. Andropov might be asked to use his influence?
    Mr. Onslow: I do not know what influence Mr. Andropov may have over the Cubans at this moment. I think that my hon. Friend is right to suggest that the presence of Cubans in any part of Africa is an unhelpful influence, but we must recall that they are in Angola at the invitation of the Angolan Government. Whether they withdraw is a matter for that Government.
    Mr. Clinton Davis: Does the Minister appreciate that his reply is regarded by the Opposition as extremely helpful? Is it not a fact that the concept of linkage or parallelism was not conceived in the debates and discussions that took place within the United Nations and among the contact States until very recently, although Cuban forces had been in Angola for some considerable time even then? Will the hon. Gentleman make it abundantly plain that the Government dissociate themselves entirely from the concept of linkage or parallelism?
    Mr. Onslow: I do not think that it would be helpful for me to respond to the hon. Gentleman's last request.

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    However, it must be an objective to resolve the problem altogether and comprehensively. If the Namibia question offers an opportunity for the wider resolution of problems in Southern Africa, it will be a great mistake to ignore the opportunity.

    Hong Kong
    Mr. Brocklebank-Fowlerasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in the discussions in Peking about the future of Hong Kong; and if he will make a statement.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Francis Pym): Following the visit by my right hon. Friend the Prime Minister to China in September, meetings to discuss the future of Hong Kong have begun through diplomatic channels in Peking and are continuing. For reasons that will be obvious to hon. Members, the content of these meetings must remain confidential. Their agreed aim is the maintenance of the stability and prosperity of Hong Kong.
    Mr. Brocklebank-Fowler: I thank the right hon. Gentleman for that reply. Will he confirm that an urgent objective in the talks must be the restoration of international confidence in Hong Kong and in its currency?
    Mr. Pym: We wish to maintain confidence in Hong Kong and prepare the way for maintaining it beyond 1997 when the lease of the New Territories ends.
    Mr. Hal Miller: Does my right hon. Friend understand the sense of insecurity felt in Hong Kong because it is not possible to divulge anything so far about the process of the discussions? In that context, has consideration yet been given to the arrangements for consulting the people of Hong Kong on the outcome of the discussions?
    Mr. Pym: International negotiations are not normally brought to a successful conclusion unless they have been conducted in confidentiality. I think that the people of Hong Kong understand that. We are aware of their anxiety about the future. What matters is that our talks with the Chinese should be brought to a successful conclusion. We are closely in touch with the Government and other important figures in Hong Kong, and I wish to make it clear that the views of the people of Hong Kong will be taken fully into account in our talks with the Chinese.
    Mr. Adley: Does my right hon. Friend agree that some of the uncertainty in Hong Kong is caused by the people of the colony who have deluded themselves into believing that there will be a quick and easy answer to the problem? We all hope and intend to do our best to ensure that a solution is arrived at as quickly as possible, but will my right hon. Friend give an assurance that nothing will be done that will be detrimental or harmful to our relations with the People's Republic, which in the long run are more important to the House and the country than our relations with Hong Kong?
    Mr. Pym: We are seeking to achieve the continuation of the prosperity and stability of Hong Kong, which is important to the people of Hong Kong and to China. It is important also that the talks in which we are engaged should produce a successful result, and Her Majesty's Government are doing everything possible to that end.

    North Atlantic Council
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs whether nuclear weapons were discussed at the meeting of the North Atlantic Council on 9 and 10 December which he attended.
    Mr. Pym: Yes. Nuclear arms control was a major subject of discussion at the North Atlantic Council, as I explained in the debate on 15 December.
    Mr. Allaun: What is wrong with Mr. Andropov's offer that Soviet missiles in Europe should not exceed those of Britain and France as at present deployed? Secondly, does today's refusal even to negotiate that offer mean that cruise missiles are bound to come and that the nuclear arms race will finally get out of control, or will it need a change of Government in Westminster to stop that?
    Mr. Pym: The understanding between the United States and the Soviet Union on the INF talks is that of parity between the United States and the Soviet Union. The hon. Gentleman referred to Mr. Andropov's speech yesterday, which is the first public statement of the Soviet Union's position. Full details of it are not yet available, but I have no doubt that they will be when negotiations resume in Geneva at the end of January. The difference between the Soviet Union and the West—between the Soviet Union and the United States—is in the equation and nature of the nuclear balance. It seems vital that the parties concerned agree upon the facts before they can make progress.
    The answer to the hon. Gentleman's second question is "No". It is not certain or inevitable that the missiles will come to Europe at the end of the coming year. If arms control negotiations succeed, and if it is possible for the two sides to negotiate an arrangement that is verifiable and balanced, and if the armament is reduced on both sides even-handedly, we shall have to review the decisions that we took.
    Mr. Cyril D. Townsend: Does my right hon. Friend agree that Mr. Andropov' proposals come close to inviting Britain to trade his apple for our orchard? Will he insist on the British Government rejecting all ideas of unilateral disarmament when Mr. Andropov himself has entirely ruled out such an absurd policy for his own country?
    Mr. Pym: We have always rejected the notion of unilateral disarmament precisely because it would throw away our defences and bring arms control no nearer. The only reason why the Russians are at the negotiating table is the decision that we took in NATO three years ago. That is why they are there discussing the possibilities of a reduction. My hon. Friend has referred to some of the obvious weaknesses in the plan that has been put forward. However, it is for the negotiators to come to their conclusions when the next round begins.
    Mr. Healey: Is the Foreign Secretary aware that many of us welcomed his recognition that Mr. Andropov's proposals were a step forward? His readiness to negotiate on them is a welcome contrast to the complete rejection of the proposals by President Reagan, which many of us deeply deplore. As the right hon. Gentleman said on television last night that the West must examine Mr. Andropov's proposals as part of what he called the "overall balance of security", how can he refuse to take account of French and British nuclear forces as part of the overall

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    balance of security? Is he not aware that the planned Trident force, which he supports, would have the same destructive power as the entire Soviet SS20 force? Does he really expect the Soviet Union to ignore it? If he expects the Soviet Union to ignore our forces, why is he planning to spend £10,000 million on them with the aim of influencing Soviet policy?
    Finally, may I tell him that the Opposition are sick and tired of the bargain basement Boadicea barging in yet again with an off-the-cuff dismissal of Mr. Adropov's proposals when she admitted yesterday that she had not even read the atm? Will he last—[Interruption.]
    Mr. Speaker: Order. This is a very long question. There are certain constraints on occupants of the Front Benches, even at Christmas time.
    Mr. Healey: It may be a long question, Mr. Speaker, but it is extremely apposite. The reception that it has had has shown that it is meaningful to both sides of the House.
    Does the right hon. Gentleman not recognise it as his duty and his right to work for peace against a one-woman walking disaster area who attempts to sabotage all his initiatives?
    Mr. Pym: I hope that the Christmas spirit descends on the right hon. Gentleman in the near future. I said to Mr. Brunson yesterday that if the suggestion that had been made by Mr. Andropov meant that in principle the Soviet Union was prepared to reduce SS20s, that would seem to be a small step in the right direction. As for my readiness to negotiate, I made it clear in last week's debate that the ideas that had been floated were only informal at this stage. Mr. Andropov spoke publicly of them yesterday. When negotiations recommence at the end of January, full details will be available. However, from what we know already there are shortcomings in the proposals. It is right to point them out. I have already said that we must examine them with the greatest care.
    The right hon. Gentleman confused the issue and added to the confusion about the British system that he complained of last week. The Russian request to include, the British system is an attempt to divert attention from the real power imbalance which is at the heart of the problem. Moreover, the right hon. Gentleman knows perfectly well that the arrangement of the negotiations between the two superpowers is for land-based and not submarine-launched missiles.
    Mr. Cryer: Oh, come on.
    Mr. Pym: Submarine-launched missiles are excluded by both sides. It is no use the hon. Member for Keighley (Mr. Cryer) shouting about it. The other point is that the negotiations are about parity between the United States and the Soviet Union. In any case, our Polaris nuclear force is essentially strategic. For all those reasons, the British system is not part of the negotiations. The right hon. Gentleman knows that perfectly well.

    Zimbabwe (Detained Persons)
    Mr. Russell Johnstonasked the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the Government of Zimbabwe about the detained air force officers and the tourists who were abducted.
    Mr. Onslow: As my noble Friend explained in another place on 18 November, the detained air force men are all
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    Zimbabwean citizens and so Her Majesty's Government are not entitled to make formal representations on their behalf. We have, however, repeatedly expressed our concern to the Zimbabwean authorities about the reports that some of the detained men have been ill treated. We have continued to urge that they be brought to trial soon.
    With regard to the kidnapped tourists, we have maintained close and regular contact with the Zimbabwean authorities since the abduction took place. We are satisfied that they are doing all that they can to secure the release of the tourists.
    Mr. Johnston: Can the Minister say nothing about where the tourists may be or whether we have been asked to help in any way to discover where they are? Is he aware, for example, that they are alleged to be in a deserted part of Botswana? With regard to the air force officers, in view of the good relations with Zimbabwe to which he referred, is it possible categorically to deny that torture took place and to say when they may be brought to trial?
    Mr. Onslow: With regard to the hon. Gentleman's second point, I hope that he will understand that I can make no such categorical denial, but I have no reason to suppose that, if the air force officers were ill treated, it was an act of policy carried out on behalf of the Zimbabwean Government. I have no knowledge of the tourists' whereabouts. I do not think that there is anything that I can usefully add to what I have said except that I am quite sure that the Zimbabwean authorities are approaching methodically and systematically the task of locating them.
    Mr. John Townend: Has my hon. Friend instructed our high commissioner in Zimbabwe to be in contact with Mr. Ian Smith since his recent loss of passport and the seizure of his papers? Has my hon. Friend any comment to make?
    Mr. Onslow: There is no need for our high commissioner to be instructed to contact Mr. Ian Smith, and I have no further comment to make.

    Anatoly Shcharansky
    Mr. Bendallasked the Secretary of State for Foreign and Commonwealth Affairs if he will make further representations to the Soviet leadership urging them to grant an amnesty to Anatoly Shcharansky and to enable him to join his wife in Israel.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): My right hon. Friend and I have both raised Mr. Shcharansky's plight with the Soviet ambassador recently and my right hon. Friend also took it up personally with the Soviet Foreign Minister in New York at the end of September. The United Kingdom delegation to the CSCE review meeting at Madrid has also raised Mr. Shcharansky's case several times.
    Mr. Bendall: Although I am grateful for the Minister's reply and the Government's involvement in trying to help thisunfortunate man, I assume that my hon. Friend is aware that Mr. Shcharansky has now been on hunger strike for several months and that basic human rights are being denied to his family with regard to knowing of his condition and his whereabouts? Can further representations be made, on the ground, that basic human rights are being denied?
    Mr. Rifkind: It is true that Mr. Shcharansky has been on hunger strike since 27 September because of the Soviet authorities' refusal to allow him to have any contact with his family. That shows the severe way in which the Soviet authorities are treating him and the urgent need for everyone to do all that they can to impress on the Soviet Union that progress at Madrid and elsewhere depends on respecting basic human rights.
    Mr. Greville Janner: Is the Minister aware that the all-party parliamentary committee for the release of Soviet Jewry has awarded its annual Henry Moore award this year to Mr. Shcharansky? Is he aware that representations have constantly been made on his behalf and that they have fallen on utterly deaf ears in the Soviet Union? Will the Minister please renew his representations on behalf of us all?
    Mr. Rifkind: Unfortunately, Mr. Shcharansky's case is only one of many thousands in the Soviet Union. The number of Soviet Jews being permitted to leave the Soviet Union this year is likely to be fewer than 3,000. That represents a substantial change of policy by the Soviet Government.
    Mr. Marlow: Will my hon. Friend also urge Mr. Begin and Mr. Sharon to release some thousands of Palestinians and Lebanese from—
    Mr. Speaker: Order. That is a question for the Order Paper. It does not arise on this question, which relates to the Soviet Union.
    Mr. Marlow: With regard to Mr. Shcharansky—
    Mr. Speaker: Order. I think that the hon. Gentleman could not have heard what I said. His question was not related to the one on the Order Paper.
    Mr. Marlow: May I relate my question to Mr. Shcharansky, Mr. Speaker? If he is to go to Israel, will my hon. Friend bear in mind that there are many Palestinians who would also like to go there?
    Mr. Rifkind: The important thing at this stage is to try to do whatever we can to allow Mr. Shcharansky to go to whichever country he chooses to live in.
    Mr. George Robertson: Is the Minister aware that we welcome his assurance that constant representations are being made on behalf of Mr. Scharansky and that we hope they will bear fruit? When those representations are being made, will he bear in mind the Prime Minister's offer of asylum for the Vashchenco and Chmyknalov families in the American embassy in Moscow? Will he ensure that the British delegation at the CSCE review meeting at Madrid also bears their case in mind?
    Mr. Rifkind: Our delegation in Madrid is raising a substantial number of cases. They all point to the Soviet Union's refusal to honour its obligations under the original Helsinki agreement. I accept the hon. Gentleman's point.

    Middle East
    Mr. Cunliffeasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the prospect for peace in the Middle East.
    Mr. Mikardoasked the Secretary of State for Foreign and Commonwealth Affairs what effect on Her
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    Majesty's Government's policy in the Middle East the rejection by the Palestine Liberation Organisation of President Reagan's plan will have.
    Mr. Pym: Recent political initiatives, particularly the proposals put forward by President Reagan, have created a critically important opportunity for progress towards a comprehensive Arab-Israel settlement. We believe it is vital that this opportunity is seized. We are continuing to urge all the parties concerned, including the PLO, to act accordingly and begin the peacekeeping process in a realistic and constructive spirit. The statement from the Palestine Central Council meeting in Damascus did not amount to a rejection by the PLO of President Reagan's initiative. In Lebananon we are striving to achieve the early withdrawal of all foreign forces.
    Mr. Cunliffe: In pursuance of the peace process in the Middle East, can the Foreign Secretary reconcile his promise to the House in his statement of 20 October, when he said that the Middle East should become a demilitarised zone, with the Government's intention to send a floating arms exhibition into the area in 1983?
    Mr. Pym: Every country is entitled to its security. The exhibition is going to the Gulf, where there are many anxieties arising out of the Iran-Iraq war, to mention just one example. Naturally there is interest in purchasing weapons. In many cases the interest is in British weapons.
    Mr. Mikardo: Does the right hon. Gentleman recall the Venice declaration, which was engineered by his predecessor, Lord Carrington, which called for the PLO to be included in the peace negotiations? Does he recall also that the PLO immediately rejected that proposal on the ground that it felt that its problems could be solved not by negotiation but by warfare? Allying that with a recent statement of the Palestine Central Council, does the right hon. Gentleman agree that we are getting into a silly circumstance when the whole world, except the PLO itself, is calling for the PLO to be brought into negotiations?
    Mr. Pym: We want everyone to come into the negotiations, including Israel, which, at the moment, is not prepared to negotiate on the basis of the Reagan plan. We hope Israel will change its mind. On the whole, Arab countries have shown a more cohesive attitude to the plan since the Fez summit. I hope that they are prepared to take part in such negotiations. We have taken a view of the PLO's attitude to terrorism and to Israel, but we have said that it must be associated with the negotiations. That has been made clear through our membership of the Ten in Europe and through our ordinary contact with the PLO direct. With regard to the Arab League delegation, I hope that that visit will take place later.
    Mr. Aitken: Is my right hon. Friend aware that when he visits the Middle East early in January the Arab leaders may be asking him some anxious questions about this country's commitment to the peacemaking process in the light of our postponement so far of the Arab League delegation visit? Is he aware that many people will think that there is an inconsistency in our attitude towards the delegation because it contains a PLO member? We understand that my right hon. Friend himself and other Foreign Office Ministers are willing to receive the PLO spokesman, while other parts of the Government are not.
    Mr. Pym: There is no country in the Middle East or the world that does not know that Her Majesty's Government are extremely keen to get the peacemaking process going on the basis of the Reagan plan. No one is in the slightest doubt about that. We regret very much that following an understanding that the Arab League delegation would not include a PLO representative, the representative was included at the last minute. I am sorry that, for that reason, the visit did not take place when planned. We are, however, in touch with all the member countries and hope that the visit will be reinstated in due course.
    Mr. Moyle: How can the right hon. Gentleman say that he wants the PLO to adopt a constructive attitude towards peace negotiations when, as a result of the bungling and incompetent interference of the Prime Minister in the process, he is not allowed to talk to an Arab League delegation that includes a representative of the PLO? This is despite the fact that some of his Ministers have met PLO representatives in the past and also the fact that President Mitterrand, a leading supporter of the Israeli State, has met the same delegation, including a PLO representative? Are we not holding up the peacemaking process by this stupid attitude? When will the right hon. Gentleman invite the delegation? Will he impose any conditions on that delegation? If so, what are those conditions?
    Mr. Pym: There is much merit in consistency. In our attitude to the PLO we have been consistent. I referred to this in a previous answer. There is some sign that the PLO is moving in the direction that we have constantly urged. We hope that it will pursue its aspirations in future by political and peaceful means. Far from being inconsistent, our position is entirely logical. Every member country knows of our enthusiasm for the peacemaking process. There is much sense in the Government sticking to their attitude on the matter. We want to see the negotiations start. I regret that there has been such a long delay before that has happened.
    Mr. Walters: Has my right hon. Friend noted the substantial progress made in talks between King Hussein and Mr. Arafat? Will he now try to reassure the Palestinians about their understandable anxieties regarding the fate of their compatriots in Lebanon? Has my right hon. Friend also noted that the only outright rejection of the Reagan proposals comes from Mr. Begin and the Israeli Government? What does he propose to do to bring pressure to bear to try to change this inflexible and provocative attitude?
    Mr. Pym: We have made representations direct to Israel. Representations have been made on behalf of the Ten by the President, who visited Tel Aviv a few weeks ago. I have also made our view plain to Mr. Schultz on a number of occasions. It is very probable that the United States is putting, and will put, pressure on Israel. We have also done everything possible to encourage the Arab countries to take part in the negotiations.

    BBC Overseas Service
    Sir Brandon Rhys Williamsasked the Secretary of State for Foreign and Commonwealth Affairs if he will take steps to enable the BBC overseas service to broadcast on television and to make the programmes capable of reception in the United Kingdom.
    Mr. Rifkind: At present the costs of expanding the BBC external services into the television field would be prohibitive and the technical difficulties formidable. It is not the purpose of the external services to broadcast to the United Kingdom.
    Sir Brandon Rhys Williams: Does my hon. Friend agree that the overseas service of the BBC is something of which we can be proud? Is he aware that its influence in the world is enormous in relation to its small cost? Is he further aware that, with the coming of satellite television, its audiences will inevitably diminish unless the news and current affairs services at least are also provided on television? Will my hon. Friend reconsider his attitude and make the necessary funds available from his Department?
    Mr. Rifkind: I agree with my hon. Friend that the BBC overseas service is of high quality, but he must appreciate that any attempt to transmit such services through television as well as radio would require a substantial increase on top of the £70 million at present provided for the service. Such funds are not available, but even if they were there would be a good argument for using them to extend the radio service rather than seek to introduce television.
    Mr. McNally: I think that the Minister has just answered my question, but I should nevertheless like to ask him whether he is aware that many areas of the world are no longer obtaining the good reception of BBC world service broadcasts that was formerly the case? Is he further aware that a great deal of investment is still required to get the radio service right? Will he use his good offices within the Foreign Office to make sure that such investment goes ahead quickly?
    Mr. Rifkind: We are constantly seeking to improve reception of the world service. A new transmitter was introduced in September, which has ensured far better clarity of reception throughout Western Europe.

    Uruguay
    Mr. Hardyasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Anglo-Uruguayan relations.
    Mr. Onslow: I am glad to say that we enjoy good relations with Uruguay.
    Mr. Hardy: Is the Minister aware of the story published in The Economist in June, and included in reports recently approved by the Western European Union Assembly, that Uruguay offered to evacuate the civilians from the Falkland Islands before the Argentine invasion? Is it not now, or may it not potentially be, a matter of embarrassment for Uruguay if the Foreign Office continues to refuse to offer adequate comment? Will the Minister make it clear that while the Foreign Office may continue to refrain from offering comment or explanation, it would have no objection if Uruguay offered to do so?
    Mr. Onslow: It is for the Uruguayan Government to make their own decisions. I have to repeat to the hon. Gentleman what I have already stated in my letter. This matter falls within the terms of reference of the review being conducted by the Franks committee.
    Mr. Dalyell: Apart from the possibility of widows and relatives visiting graves, is it not a fact that there is no

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    chance of any Uruguayan Government in the foreseeable future providing landing rights for a continuous relationship between Britain and the Falklands?
    Mr. Onslow: I believe that the House welcomes the announcement that has been made about the visit by next of kin. I do not think that the House regards the hon. Gentleman as a spokesman for the Uruguayan Government, present or future.

    Lebanon
    Miss Richardsonasked the Secretary of State for Foreign and Commonwealth Affairs what contribution Her Majesty's Government hope to make towards helping the Lebanese Government regain its sovereignty over the whole of Lebanon.
    The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): As the House knows, we have decided to contribute to the multinational force in Lebanon an armoured reconnaissance unit of about 80 men for three months.
    Miss Richardson: Will the Minister say whether he welcomes recent reports that the Israeli and Lebanese Governments are prepared to discuss a peace package? What efforts are the Government making to ensure that Syrian and Palestinian forces withdraw from the area at the same time as Israeli forces?
    Mr. Hurd: I welcome such reports. It is not clear yet what exactly they mean or what they portend. If they are verified, that will be a helpful step. We have recently been in touch with the Government of Syria and with the PLO about the need, as we see it, for all foreign forces to withdraw from Lebanon.
    Mr. Cyril D. Townsend: Is my right hon. Friend aware that many of us will give a cautious welcome to the decision to dispatch a British contingent to Lebanon? Will he say under whose command the contingent will come? What will be the orders for opening fire? Is it still the intention of the Government to try to change the multinational force into a proper United Nations force?
    Mr. Hurd: The British contingent will be under its own British commander. He will work alongside the other commanders of the multinational force in a committee under the auspices of the Lebanese Government. The rules of engagement have not yet been worked out. They will have to ensure that our forces are effectively able to defend themselves. As my hon. Friend knows, the UNIFIL force continues to exist in South Lebanon. We have been persuaded, after discussions with the United States and Lebanese Governments in particular, that it would be sensible if we made a British contribution to the job that the multinational force is doing in the Beirut area. It has certainly helped to restore calm and reassurance.
    Mr. Moyle: Is the right hon. Gentleman aware that the Opposition believe that the world should support the Lebanese Government's attempt to restore their sovereignty over the whole of Lebanese territory? We welcome the decision of the Government to make a contribution to the international peacekeeping force. We also believe that by sending a small operational unit, rather than a training team, the Government have found the best solution to the problem. Will the right hon. Gentleman say
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    whether it is the intention to withdraw the British unit at the end of three months? Or is there an option to renew the arrangement?
    Mr. Hurd: We discussed this with the Lebanese Foreign Minister on his recent successful visit to this country. Our offer, which is for three months, is welcomed by, and acceptable to, the Lebanese Government.

    China
    Mr. Hal Millerasked the Secretary of State for Foreign and Commonwealth Affairs whether, for the purpose of discussions with the Government of the People's Republic of China, he has made any assessment of the contribution Hong Kong makes to the economy of the People's Republic.
    Mr. Pym: Hong Kong's contribution to the economy of the People's Republic of China is a significant factor in discussions about its future arrangements. It is difficult to make a full and precise assessment of this contribution, but Chinese leaders have themselves frequently acknowledged Hong Kong's importance to their "four modernisations" programme.
    Mr. Miller: Does my right hon. Friend agree that it is essential to the successful outcome of the discussions that the Government of the People's Republic should clearly understand not only that the benefits which they receive from Hong Kong in markets, foreign exchange, and so on, far outweigh any benefit to this country, but that the continuance of Hong Kong and of those benefits depends crucially on maintaining the status of the Hong Kong dollar?
    Mr. Pym: I agree with my hon. Friend on both points. I believe that the people of Hong Kong very much want the arrangement to continue as before. We are doing our best to bring home to the Chinese the importance of the points made by my hon. Friend. Indeed, they are the very elements of the success and prosperity of Hong Kong.

  EUROPEAN COMMUNITY

    Community Budget
    Mr. Arnoldasked the Secretary of State for Foreign and Commonwealth Affairs what further progress he has made towards finding a permanent solution to the European Economic Community budget problem in 1983 and beyond.
    Mr. Pym: As instructed by the Foreign Affairs Council on 22 November, the Committee of Permanent Representatives has begun work on the Commission paper on the budget solution. The Council will discuss this again in January.
    Mr. Arnold: What timetable does my right hon. Friend propose to set himself for the successful completion of the negotiations?
    Mr. Pym: There is no set timetable. I shall make the best progress that I can. If a conclusion has not been reached by March the matter is likely to appear on the agenda of the European Council, but I hope that we shall make reasonable progress.
    Mr. Ioan Evans: The right hon. Gentleman talks about a settlement of the 1983 budget, but the 1982 budget has

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    not yet been settled. If we succeed in obtaining the £500 million refund, will he insist that we are not dictated to on how we should spend it?
    Mr. Pym: The hon. Gentleman raises an important point. The Commission has given an absolute assurance about the arrangements agreed at the end of October and we are content to rest on that.
    Mr. Teddy Taylor: As we have now been waiting 10 years for a permanent budget solution to be found, not to mention reform of the common agricultural policy, will the Government set out in a White Paper the ways in which they believe these difficult objectives may best be achieved?
    Mr. Pym: The initiatives that we take in the Council are well known and much commented on in the press. We shall do our best to make progress with them.
    Mr. Jay: May we be assured that the £500 million owing to us will be handed over not later than the end of March next year?
    Mr. Pym: The Commission has given undertakings to that effect. It has given assurances that the United Kingdom will in no way be worsted as a result of what occurred and will ensure adherence to the agreement reached at the end of October.

    Japan
    Sir David Priceasked the Secretary of State for Foreign and Commonwealth Affairs what decisions have been taken at the Foreign Affairs Council of the European Community on ways and means of improving commercial relations between Japan and the Community.
    Mr. Hurd: The Foreign Affairs Council stressed the urgent need for effective action by the Japanese Government. A number of decisions were taken, including a move to the second stage of the GATT dispute settlement procedure, an extension of import surveillance and a demand for effective and clearly defined restraint of Japanese exports in sensitive sectors. The Commission affirmed its willingness to begin safeguard action for sensitive products in accordance with the appropriate regulation. The full text of the Council's conclusions is available in the Library.
    Sir David Price: Is my right hon. Friend aware that there is a growing feeling throughout Europe that trade between European countries and Japan is too much a one-way business? Is he further aware that any and every action that the Council of Ministers can take will have the full support of the British people?
    Mr. Hurd: I agree with my hon. Friend about that feeling. I believe that the Foreign Affairs Council made progress—not before time—in getting the European act together, so as to bring effective pressure to bear on the Japanese.
    Mr. Cryer: Are the Japanese exercising effective voluntary restraint over the export of motor vehicles to this country? Does the Minister agree that restraint should also be exercised with regard to the import of Common Market vehicles into this country and that the real cause for concern is our massive deficit in manufactured and semi-manufactured goods with the Common Market? What does he intend to do about that?
    Mr. Hurd: One-quarter of our total imports from Japan, including cars, are now covered by inter-industry understandings, and I understand that those agreements are respected. As the hon. Gentleman well knows, the position with regard to imports from our EC partners is entirely different. I do not understand how he expects us to restrict British customers buying from our partners while expecting our partners to go on buying British.
    Mr. John Townend: In view of the astronomical balance of payments deficit between this country and Japan, does my right hon. Friend agree that a time limit should be set for the opening of the Japanese market to British goods and services, and that if Japan has not acted within that time we should take retaliatory action, as the French have done?
    Mr. Hurd: I am not sure that the French action will prove particularly effective. My hon. Friend is entirely right, however, in saying that one of the prongs of our policy must be to ensure a proper opening of the Japanese market with the shortest possible delay so that Japan plays a fair part in the international system to which it belongs.
    Mr. McNally: Is the Minister aware that his statement resembles many made to the House in the past decade? Before such a time limit is imposed, as many Members on both sides believe that it must be, will he arrange a meeting with the Japanese, at the highest level, to impress upon them that time is running out for them in their trading and that the operations now being suggested will lead to a spiral of protectionism? Does he agree that top level talks on trade are now urgently necessary?
    Mr. Hurd: Certainly there in urgency. Such high level talks have taken place in the past, and no doubt there will be others in 1983.

    Reform
    Mr. Teddy Taylorasked the Secretary of State for Foreign and Commonwealth Affairs within what time scale he expects substantial progress on the initiative for reform of the institutions and policies of the European Economic Community he outlined on 24 November,Official Report, c. 848–49.
    Mr. Leightonasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in reforming the European Economic Community.
    Mr. Pym: As I told the House on 24 November, I continue to take the initiative in the Council to press for constructive reform and development. I referred, by way of example, to the development of new policies of benefit to Britain and the Community, in particular coal policy, improvements in the operation of the common agricultural policy, and a fair solution to the budget problem. The reforms that we are seeking will take time to achieve, but some progress is being made.
    Mr. Taylor: As Ministers have repeatedly said that a fundamental reform of the CAP is needed, would it not be helpful to have some outline or explanation of how they believe this can be achieved? Now that EC prices are, on average, more than double world prices and the taxpayers of Europe are spending more than £7 million per day to ensure that Third world countries have food at prices cheaper than our own, does my right hon. Friend agree that

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    it is desperately urgent that the House of Commons should have a rough idea of how the Government believe the CAP should be reformed?
    Mr. Pym: There have been a number of debates over the years about the ways in which the CAP could be reformed, and the Government's position is well known. Clearly, the problem is that there are nine other member States, all with their own different views.
    I hope that my hon. Friend will not mislead the House about food prices. Although there is an element of truth in what he says, without the CAP there would have to be some other means for the Exchequer to support the agriculture industry, which would also prove very expensive, so one must compare the present situation with the alternatives.
    Mr. Spearing: With regard to developing institutions, has the right hon. Gentleman seen press reports that the German Government intend, during their Presidency in the next six months, to put the Genscher-Colombo proposals for European union high on their list of priorities? As there is no mandate from the House for European political unity, will he tell the German Government that the proposals are not on for the United Kingdom?
    Mr. Pym: We know that the German Government hope to make progress with that plan, which has been debated in the House. A number of paragraphs and chapters still have to be agreed, and I assure the hon. Gentleman that before any such agreement is reached the Government will have to be satisfied that our needs are met.
    Mr. Russell Johnston: What is the Government's justification these days for still not joining the European monetary system?
    Mr. Pym: Because my right hon. and learned Friend the Chancellor of the Exchequer has not judged the time ripe.
    Sir Anthony Meyer: Did my right hon. Friend note the welcome from all parts of the House yesterday, except from the professional anti-Europeans, to the manner in which our right hon. and learned Friend the Chancellor of the Exchequer has handled the incident in the European Parliament? Will he build on this as evidence of the willingness of one European institution to forward the fundamental reform of the workings of the Community?
    Mr. Pym: Yes, Sir.
    Mr. Ioan Evans: With regard to the operation of the CAP, has the Secretary of State seen the growing evidence of the tremendous waste and destruction of dairy products, vegetables and fruit, some of which was shown in The Sunday Times Magazine recently? What action will he take to prevent payment for this destruction by the British taxpayer, at the expense of the British consumer?
    Mr. Pym: The creation of agricultural surpluses in the European Community is one of the problems of the CAP. We have made a number of constructive proposals to try to rectify that and we have been one of the foremost in resisting excessive price increases, as the hon. Gentleman knows. This is an important matter on which we are negotiating all the time to try to achieve the change that will prevent these surpluses being created.

    Community Tactics (International Organisations)
    Sir Anthony Meyerasked the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied with progress towards the adoption of common tactics by European Economic Community Governments in international organisations.
    Mr. Hurd: Broadly, yes, but we are always looking at ways to improve co-ordination among the Ten. On issues which fall within Community competence the Commission already negotiates on behalf of the European Community as a whole, in accordance with a mandate agreed by the Council of Ministers. On other issues we usually try to co-ordinate among the Ten and with other like-minded countries.
    Sir Anthony Meyer: May I invite my right hon. Friend, as I invited the Chancellor of the Exchequer yesterday, to consider the powerful offer by Mr. Donald Regan, the Secretary to the American Treasury, the other day, that the United States would adopt a more open attitude in its dealings with Europe and the rest of the world? Does my right hon. Friend recall the initiative taken by Ernest Bevin in response to a similar, rather vague offer by General Marshall back in 1947? Will he seize this opportunity to act on behalf of the Community to develop a new programme of expansion of the world economy?
    Mr. Hurd: I heard my hon. Friend's question yesterday and the reply of my right hon. and learned Friend. My hon. Friend will have found that reasonably encouraging, and I cannot add to it today.
    Dr. M. S. Miller: What is the point in trying to adopt common tactics when the whole strategy is wrong?
    Mr. Hurd: That supplementary question is so vague that it is impossible to give a satisfactory answer.

    Council of Ministers
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs what subjects will be discussed at the next European Economic Community Council of Ministers meeting.
    Mr. Hurd: The usual written forecast of Council business for the month of January is being deposited in the Library of the House. I am arranging for a full statement, elaborating on the forecast, to be published in the Official Report.
    The next meeting of the Council of Ministers is likely to be the meeting of Agriculture Ministers, scheduled for 17 and 18 January. The Foreign Affairs Council is due to meet on 24 and 25 January, when the main items for discussion are expected to be European Community-Japan relations, the solution to the budget problem for 1983 and later, the European Community-Spain 1970 agreement and the European Parliament's proposals for a common electoral system.
    Mr. Deakins: No doubt unemployment will also figure somewhere on the agenda. If it does, will the right hon. Gentleman bear in mind that during the years in which Britain has been a member of the Common Market the number of people employed in British manufacturing industry has fallen by 2 million? How does that square with the slogan that dominated the referendum campaign in 1975—"Jobs for the boys"?
    Mr. Hurd: The question that the hon. Gentleman and those who like him will have to answer is how unemployment, which is severe and tragic, would be helped by putting at risk the markets on which 43 per cent. of our exports depend.
    Mr. Marlow: With regard to the budget issue, will my right hon. Friend undertake to tell our partners in Europe that next year a rebate will not be acceptable and that there is only one forseeable solution—a permanent solution to this probolem, which has been dragging on for years, even if that means force majeure being exerted by the British Government? There are so many vested interests that we may not achieve it otherwise.
    Mr. Hurd: I am glad that my hon. Friend agrees with the European Parliament on this issue. The difficulty about the stand that he and the European Parliament take is that it is not realistic to suppose that a long-term settlement would have been achieved at the end of this year in time to make unnecessary the refunds that have been discussed during the last few days. My hon. Friend is right in saying that our objective, and that of the House, is a long-term solution to the problem that will take the place of the reasonably satisfactory three-year agreement, which is now coming to an end.
    Mr. Jay: Meanwhile, has the Minister noticed that the recent restriction on the export of EC butter to the Soviet Union has caused great disappointment and distress to the French Communist millionaire who usually makes large profits out of these transactions?
    Mr. Hurd: I note the right hon. Gentleman's point.
    Following is the forecast:
    EUROPEAN COMMUNITIES COUNCIL OF MINISTERS MEETINGS FORTHCOMING BUSINESS FOR JANUARY 1983
    Three meetings of the Council of Ministers are planned for January. A fourth is currently under discussion.
    The Agriculture Council is expected to meet on 17–18 January. It is likely to consider common agricultural policy pricefixing—first examination—battery hens and certain other veterinary items, including proposals on animal diseases and on personnel responsible for carrying out health inspections.
    It is possible that there will be a meeting of the Economic and Finance Council on 17 January. The agenda has not yet been fixed.
    The Foreign Affairs Council is due to meet on 24–25 January, when it is expected to discuss the solution to the budget problem for 1983 and later, relations with Japan, the new regional development fund regulation, in particular the question of national quota shares, and ways of reinforcing the Community's steel anti-crisis measures. There will also be further discussion of the EC-Spain 1970 agreement in the light of Commission contacts with the Spaniards. The Council will continue its consideration of the European Parliament's proposals for a common electoral system and may also consider its position in preparation for the planned special EC-ACP joint council on STABEX, and further draft declarations on the accession negotiations for presentation to the Spaniards and to the Portuguese.
    Ministers may discuss proposals for progress on the three initial priority areas for completion of the internal market which they endorsed at the December Council. There may also be further discussions of the Genscher-Colombo proposals and of the Community aspects of the various studies on East-West economic relations which are now under consideration in other forums.
    The Fisheries Council is expected to meet on 25 January to discuss developments on the common fisheries policy in the light of the 21 December Fisheries Council.

    Common Fisheries Policy
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the responsibilities of his Department concerning the application of article 100, relating to fisheries, of the Treaty of Accession of the United Kingdom to the European Economic Community.
    Mr. Pym: I have overall responsibility for policy towards the European Community, but matters specifically relating to the common fisheries policy are the responsibility of my right hon. Friend the Minister for Agriculture, Fisheries and Food.
    Mr. Spearing: I thank the right hon. Gentleman for that reply, but may I remind him of his hope, expressed on Monday to the Select Committee on Foreign Affairs, that the Danes would yesterday agree to the fishing arrangements? As they have not, does he agree that article 100 of the Treaty of Accession, for which he is responsible, makes it clear that if no agreement has been reached—and it has not—regulation 2141 of October 1970 applies, and that that gives the right to the Danes to fish up to the beaches of the United Kingdom?
    Mr. Pym: Perhaps the hon. Gentleman will be good enough to await the statement to be made by my right hon. Friend.
    Mr. Teddy Taylor: As this is a desperately important issue affecting the whole future of the British fishing industry, can my right hon. Friend say precisely what the position will be if the Danes go to the European Court and establish this right, which appears to exist in the Treaty? Will the Government make it clear that in no circumstances will they allow fishing up to our beaches?
    Mr. Pym: I agree with my hon. Friend that this is an extremely important matter, but the sensible thing is to ask my hon. Friend to await the statement to be made shortly by my right hon. Friend.

    Community Budget
    Mr. Ioan Evansasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the European Economic Community budget problem.
    Mr. Hurd: I have nothing to add to the statement made yesterday by my right hon. and learned Friend the Chancellor of the Exchequer.
    Mr. Evans: If the right hon. Gentleman has read that statement, does he not realise that many questions were left unanswered by the Chancellor yesterday? As the sum was not approved by the Assembly—by a large majority—does the Assembly have the final say in the matter? Can it determine the way in which United Kingdom refunds are spent here, and can the Assembly, if it agrees to make the payment, ask for control over United Kingdom refunds? In particular, is the financing of individual projects to be determined by the Assembly?
    Mr. Hurd: The Treaty gives the directly elected Parliament powers in relation to Community budgets, including the power to reject the budget when there are important reasons for so doing and to ask the Commission to submit a new draft.

    Gibraltar
    Mr. McNallyasked the Secretary of State for Foreign and Commonwealth Affairs what proposals he has for talks with the new Government of Spain concerning the future of Gibraltar.
    Mr. Pym: I met the Spainish Foreign Minister in Brussels on 10 December and discussed with him the implementation of the 1980 Lisbon agreement. This provides for the lifting of Spanish restrictions on Gibraltar and, at the same time, the start of negotiations aimed at overcoming all the differences between Britain and Spain on Gibraltar. We agreed that officials should meet to consider details with a view to implementation of the agreement in the spring.
    Mr. McNally: Does the right hon. Gentleman agree that the opening of the border by the new Government in Spain needs a response from Britain and some new imaginative ideas, perhaps on economic co-operation, trade and tourism, which show that we are thinking about Gibraltar's long-term future, perhaps involving in the negotiations representatives of the Gibraltarian people themselves?
    Mr. Pym: No, Sir. The partial opening of the border between Spain and Gibraltar was a gesture by the incoming Spanish Government. When we met we agreed that there was nothing further to be said about the matter at this stage, but that we would undertake preliminary discussions with a view to implementing the Lisbon agreement next year. That covers the point made by the hon. Gentleman.
    Mr. Home Robertson: Is the Foreign Secretary aware how much we welcome the decision by the new Socialist Government in Spain and the new Prime Minister, Felipe Gonzalez, to reopen the frontier, even partially? Is he further aware that the statement this morning by the Prime Minister of Spain implies a more relaxed attitude on the vexed issue of sovereignty? Will the Government endeavour to build on these constructive and apparently conciliatory attitudes displayed by the Spanish Government?
    Mr. Pym: That is exactly what we are doing.
    Mr. English: I am sure that the Foreign Secretary will agree that Spain is more likely to achieve its objective by encouraging the transit of Spanish and British citizens between Spain and Gibraltar. Will the right hon. Gentleman also help by setting up tripartite discussions between Spain, Britain and Morocco, as, clearly, the position of Ceuta is similar to that of Gibraltar? Spain has about as much right in Morocco as we probably have in Gibraltar.
    Mr. Pym: On the first point, it is in the long-term interests of the people in Gibraltar and Spain that they should grow in friendship and work together. When the frontier is opened in due course, that should open the way to that process. With regard to the hon. Gentleman's second point, I have no intention of opening such tripartite talks at present. We shall take one step at a time.
    Sir John Biggs-Davison: Are we still bipartisan on Gibraltar, or did the right hon. Member for Bristol, South-East (Mr. Benn) speak for his party when he said that Spain should reoccupy Gibraltar?
    Mr. Pym: The right hon. Gentleman did not speak for Her Majesty's Government.
    Mr. Chapman: On a point of order, Mr. Speaker. I am sorry to detain the House. This is my maiden point of order. A fortnight ago I tabled a question for answer by the Secretary of State for Foreign and Commonwealth Affairs—
    Mr. Speaker: Order. Because this is the hon. Gentleman's maiden point of order, he is probably not aware that I take points of order of that character after any application under Standing Order No. 9.
    Sir Anthony Meyer: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I take points of order after applications under Standing Order No. 9.

Council of Fisheries Ministers
3.30 pm
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): With permission, Mr. Speaker, I should like to make a statement on the meeting of the Council of Fisheries Ministers yesterday in Brussels. I represented the United Kingdom, together with my right hon. Friends the Secretary of State for Scotland and the Minister of State.
The nine member States were agreed on a package of measures for a revised common fisheries policy. No changes to this package were proposed or discussed. The Commission had clarified to Denmark some of the administrative measures involved in the package and had also arranged for a possible allocation of mackerel in the North Sea, which would become available from Norway and the Faroes. The Danish Government decided to refer this package to the relevant committee of their Parliament with the Government's strong recommendation for acceptance.
To the bitter disappointment of the entire Community, the minority Danish Government were at yesterday's meeting unable to gain the agreement of that committee. The Danish Government have undertaken to continue to seek to persuade the committee to accept the agreement, and the Council has affirmed that it remains open to Denmark to signify before 30 December that the package is acceptable.
The Council then proceeded to consider what national measures would be needed in the event of the Danish Government failing to accept the agreement before 30 December. The Commission made a declaration as to the manner in which it would authorise national measures, following notification by member States in order to protect stocks in accordance with provisions based upon the latest formal Commission proposals.
The Commission made an unequivocal statement as to the right and obligation of all member States, in the unique circumstances of fisheries, to protect this vital resource, and the Commissioner stated that this would apply to all of the proposals on conservation, access and quotas. Hon. Members may have heard the President of the Commission, Mr. Thorn, confirm this morning that these measures would be effective and legal.
As far as the United Kingdom is concerned, I signed this morning orders which will make these proposals part of our national law, and I have notified the Commission. They will be laid before the House so that they will come into effect if necessary on 1 January. Agreement was reached on an interim package of structural measures, which I know will be welcomed by our industry.
I can only express the hope that Denmark will approve this agreement before the end of the year and will take note of the warning given to them by their Prime Minister that their failure to agree will leave the Danish fishing industry in a worse, and not better, position.
Mr. Bruce Millan: I repeat what has been said before from the Opposition Benches. We consider that the package that has been agreed by the Minister to be completely unacceptable. We shall want to debate early in the new year the debacle of the negotiations in the past three and a half years. I hope that the right hon. Gentleman can assure us that that debate will take place, this time in Government time.
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Is the Minister aware that his repeated protestations that the fishermen in the United Kingdom were satisfied with the agreement now look even more hollow, given some of the developments over the past few weeks? For example, the Scottish Fishing Federation has almost broken up. It is in almost total disarray. There have been repeated statements by fishermen's representatives in different parts of the United Kingdom that they are extremely unhappy with the agreement that the right hon. Gentleman has reached.
Is it not a fact that the fishermen were willing to accept the agreement for the want of anything better and because they believed that at least it would produce an element of certainty as from 1 January 1983? However, whatever has happened, there will be no certainty as from 1 January 1983, as the Secretary of State for Scotland was frank enough to acknowledge in a statement reported in one of today's newspapers.
Is the Minister aware that we cannot make a judgment about the national measures until the details are available? I understand that the orders will not be laid until tommorrow. Despite what he has said about the legality of the measures, there must still be some doubt about them until they are tested, if they are tested in the European Court. I give the right hon. Gentleman the assurance that we shall support any measures that are aken by him to protect our fishing stocks. I hope that when the measures come into operation they will be stringently enforced. Will the right hon. Gentleman give the assurance that the enforcement will be exclusively a matter for the United Kingdom Government, because there is a suggestion in at least one newspaper report this morning that the enforcement may be shared between the United Kingdom Government and other Governments? That should be clarified.
There are three other matters that I hope the right hon. Gentleman will clarify. First, despite promises that no further concessions would be made to Denmark, concessions have been made over the past few weeks. Will the right hon. Gentleman give us an assurance that those concessions will be withdrawn and will not be renewed? Secondly, what will happen to the third country agreements, particularly with Norway and the Faroes, given that there is not a completely agreed common fisheries policy? Thirdly, what will happen to the EC restructuring package in those circumstances? In his statement the right hon. Gentleman referred to interim measures, but we want to know what the overall position will be.
Despite his continued blusterings at the Dispatch Box, the right hon. Gentleman has produced for the end of the year a sorry mess and he has completely failed to bring about an assured future for our fishing industry.
Mr. Walker: As usual, the Opposition spokesman is deeply distressed that there is an agreement that all the leaders of the fishing industry require. His phrases were rather pathetic. I hope that his remarks about the Scottish Fishing Federation will be examined by Scottish fishermen, including those in disagreement. If he has any knowledge of that disagreement, he will know that it is not even remotely connected with what has been agreed between the nine member States. It is rather sad that the right hon. Gentleman has to use that argument to try to produce a pathetic illustration of the state of the fishing industry. That shows his ignorance of the fishing industry.

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With regard to the legality of the situation, it is the view of the Commission and of nine member States that the national measures are legal. As far as I know, the Danish Government have not disputed the legality of the national measures that we are taking. It is significant that at yesterday's meeting there was no view from the Danish Government that any of the measures that were being discussed contained any element of illegality. The only statements that were quoted in the press this morning were from certain Danish fishermen, who gave their interpretation. If they seek the advice of their Government and Minister they will get a different view.
No concessions of any description will be made by the United Kingdom Government that affect the United Kingdom fishing industry. The concessions discussed come primarily from agreements with Norway and elsewhere. They will all be left out of the proposed national measures. That is why the Danish Prime Minister strongly advised the Danish fishing industry and the Danish Parliament that it is in the interests of Denmark to accede to the agreement that is on offer now rather than to one based on what was proposed on 30 October and imposed by national measures.
Restructuring will be discussed in the new year. There is a great deal of work to be done. The proposals agreed yesterday apply to 1983. The ideal basis of restructuring is an agreed common fisheries policy. I hope that that will be agreed before the end of the year. Whether there will be a debate is not a matter for me. I gather that there will be a debate, which I shall welcome warmly, soon after we return from the recess.
Sir Michael Shaw: Is my right hon. Friend aware that, contrary to what has been said, the industry appreciates fully what he and his colleagues have done to protect the vital interests and future of the fishing industry? Confidence in the future was being built up by the forthcoming agreement. Can my right hon. Friend confirm that there is no reason for a lack of confidence due to any delay that there may be in reaching a final agreement that will, I am sure, be to the advantage of every member of the Community?
Mr. Walker: Yes, Sir. Plainly the leaders of the fishing industry were with me yesterday and shared my disappointment that no agreement was reached. It is unique that 10 Governments in Europe are agreed on a package and one Opposition party in one member State is preventing it from taking place. I hope that that will be swiftly altered and then the fishing industry can be confident of the future.
Mr. J. Enoch Powell: Is it not disgraceful to the House of Commons that it has fallen to Denmark and the Danish Parliament to set us an example of how to defend in the Common Market the interests of their own people?
Mr. Walker: The right hon. Gentleman should recall that the Danish Government, including the Prime Minister, are recommending that the agreement is in the interests of the Danish people and fishing industry. The right hon. Gentleman will find that his only allies are the Danish Socialist party.
Mr. J. Grimond: Is the Minister aware that I regret the dispute with Denmark, a
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country of which my constituency, for a long and distinguished period in its history, was a part? Whatever we may think of the agreement, we are glad that the Minister has stuck to his guns. We hope that he has sufficient guns to stick to, and that there will be an adequate number of fishery cruisers to enforce the agreement.
Will the Secretary of State reiterate that any trouble with Denmark will not hold up undertakings given by the Secretary of State for Scotland and himself that they are ready to discuss management schemes with the various fishing associations in Scotland?
Mr. Walker: Yes, Sir. I confirm that the undertakings given by my right hon. Friend will continue and that those discussions will take place. I also would regret any friction in the extremely good relationship with Denmark. The Danish Government are completely in line with European policy.
There has been some mention of guns and gunboats in the press. I do not believe that there is, and I certainly would not like to see, any friction between the United Kingdom and Denmark. To be fair to the Danish Fisheries Minister, he made it clear at the Council of Ministers meeting yesterday that he would deplore any act by Danish fishermen that violated the traditional fishing rights of other countries of the Community, and he would strongly advise any Danish fishermen not to embark upon any such course. He did not question the legality of the national measures that we were discussing yesterday.
Mr. John Townend: Is my right hon. Friend aware that there will be relief in fishing ports such as Bridlington at his determination and that of his colleagues to enforce national measures? Can he reassure the industry that if Danish boats endeavour to fish within the 12-mile limit the orders that he is placing before the House and the means of protection will be adequate to enable us to arrest and prosecute the trawlers?
Mr. Walker: Yes, Sir.
Mr. Douglas Jay: Should it not also be made clear that the main responsibility for the position rests with the right hon. Member for Sidcup (Mr. Heath) and the right hon. and learned Member for Hexham (Mr. Rippon) who in 1972—
Mr. Nigel Spearing: Where are they?
Mr. Jay: —signed a Treaty of Accession which gave other EC members the right to fish up to the beaches of this country after 31 December 1982?
Mr. Walker: I remind the right hon. Gentleman that he was a supporter of a Government who decided to renegotiate the terms of membership of the Common Market, and in deciding the basis of that renegotiation they decided not to include fishing.
Mr. Robert Maclennan: Does the Minister accept that one of the most disturbing aspects of the failure to reach a unanimous decision is that it means that the national measures depend upon national policing and are not under-pinned by Community policing? I disagree wholly with what the right hon. Member for Glasgow, Craigton (Mr. Millan) said about that matter. What steps is the Minister prepared to take to deal with the national measures? Will the Commission

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statement that all members were obliged to protect the resources apply to the Danes with regard to landings in Denmark?
Mr. Walker: Yes, Sir. Further, one of the good features is that the enforcement regulation was agreed earlier in the year by Denmark and comes into operation on 1 January. Therefore, all the rights of Commission officers to inspect documents and board boats to ensure compliance will take place in respect of Denmark from 1 January next year.
Mr. Robert Hughes: Does the Secretary of State realise that the reason why we are in this mess today is that he failed to heed our warnings earlier in the year about the length of time between fishery meetings and the way in which he was being fobbed off? How does he intend to patrol the coastline to carry out conservation measures? How can Denmark, having refused to sign the agreement, have any control over its fishermen's actions?
Mr. Walker: There was no lack of frequency of fisheries meetings. Agreement was reached by nine member countries earlier in the year. There has been no delay in having fisheries meetings to try to persuade the other member country to agree. Yesterday we succeeded in persuading the other member Government to agree to the package. I hope that between now and the end of the year the Opposition will use any influence they may have with the Social Democrats in Denmark.
Plainly I cannot speak for the Danish Government about Danish enforcement measures. As the Danish Minister made it clear that he would deplore any illegal action by his fishermen, there is no reason why he should not take the same national measures as other member countries.
Sir Anthony Meyer: Is my right hon. Friend aware that it is precisely because of the great skill that he showed in negotiating that we have an agreed fisheries policy which will be supported by everyone? If he has now to resort to national measures, he will have the support not merely of the whole House but of international opinion generally. Will he bear in mind that the object of the operation is to enable a friendly Danish Government to apply an agreement that they would like to apply? Will he do what he can to stop the dirty end of Fleet Street from indulging in its favourite sport of whipping up ill will against our friends and allies?
Mr. Walker: The Danish Government have agreed to the package. The main Opposition party in the Danish Parliament will not agree at the moment. I hope that, after considering further the disadvantages to the Danish industry of not doing so, it will agree before the end of the year.
Mr. Spearing: The Minister of Agriculture, Fisheries and Food will know that article 100 of the Treaty of Accession of this country and Denmark to the EC states that, unless there is agreement before 31 December, regulation 2141 of October 1970 and article 2, which give rights to fish up to the beach, come into force. The Minister has referred to other regulations, but he did not
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state the number. Do those later regulations supersede regulation 2141? If so, will he give the number of the regulation?
Mr. Walker: Knowing the fascinating, intellectual interest that the hon. Gentleman takes in this subject, I am sure that he will be well aware that we secured agreement on 30 May 1980 that article 103 of the Treaty of Accession—which allows for access limitation to follow those set out in articles 100 and 101—would be applied consistently, and particularly with annex 7 of The Hague agreements, which speak of the need to regulate fishing activity in a coastal belt. The theoretical possibility of equal access from 1 January 1983 has therefore been overtaken by the agreement of the Council to take action to protect coastal fisheries from that date.
Mr. Teddy Taylor: Despite the Minister's previous splendid endeavours, quotas and bans on certain types of fish, such as herring, were flagrantly broken not only by the Danes but by other member States. Will my right hon. Friend give an assurance that sufficient additional policing will be available after 1 January to ensure that they are not broken? Will he also give us a clear assurance that, irrespective of any decision taken by the European Court, the Government will stand by their national agreements and prevent foreign vessels from fishing up to our beaches?
Mr. Walker: We have always given the assurance that there will be no fishing up to our beaches. In addition, we shall certainly guarantee proper enforcement.
Mr. Mark Hughes: Will the right hon. Gentleman accept that neither an unequivocal statement from the Commission nor a statement in the press or on the radio by Mr. Gaston Thorn has legal validity? Will he therefore confirm that there are legal doubts about the ability of the Danish Government, and/or a Danish fisherman to prosecute a British fishery protection vessel in the European Court if an arrest is made?
Will the right hon. Gentleman accept that his views about the disarray of the Scottish Fishing Federation are totally unfounded? Will he also accept that when the Opposition pray against the orders we shall do so not because we disagree with the need for national measures, but to ensure that they are adequately debated in the House? Will the right hon. Gentleman make arrangements with the Leader of the House for a debate on the whole package at the earliest possible opportunity?
Mr. Walker: I am very much in favour of a debate at the earliest opportunity. I should warmly welcome it and, indeed, pray for it.
In response to the hon. Gentleman's remarks about the Scottish Fishing Federation, I repeat that it is a monstrous suggestion that any divisiveness has been caused by the agreement. I followed closely the disagreements and the reasons given by several members for quitting the federation. It is monstrous that Opposition Members should try to whip up feeling. It is extraordinary that the Labour Party should presumably wish to encourage Danish fishermen by constantly suggesting that there is some legal doubt. I accept the legal view of nine member Governments and of the Commission.

Anderson Strathclyde and Charter Consolidated (Report)
3.53 pm
The Minister for Trade (Mr. Peter Rees): With permission, Mr. Speaker, I should like to make a statement on the report of the Monopolies and Mergers Commission on the proposed merger between Anderson Strathclyde and Charter Consolidated and my decision not to prevent Charter Consolidated from renewing its bid for Anderson Strathclyde, if it decides to do so.
The MMC submitted its report on 1 December. Since my right hon. and noble Friend the Secretary of State for Trade had a shareholding interest in one of the parties to this merger, he considered that he ought not to take the decision on the report.
The MMC report was a divided one. The commission concluded by a majority of 4 to 2 against the proposed merger. It recommended that it should not be allowed. Where the commission find against a merger, Parliament has left it as a matter of discretion whether a report against a merger should be followed or whether the merger should be allowed.
I have considered carefully both the majority report and the dissenting report of the minority. The dissenting report was no ordinary note of disagreement. On the contrary, it voiced the opinions of the chairman of the commission, and one other member, and represented a root and branch disagreement with the conclusions of the majority.
In considering the majority and minority views, I have also taken account, as I am obliged to do under the Fair Trading Act, of the views of the Director General of Fair Trading. He recommended strongly against preventing the merger. It is common ground that this merger would not lead to any restriction of competition. The sole question therefore was whether the merger would have harmed other aspects of the public interest. While sensitive to arguments based on possible industrial implications in Scotland, I found that the argument that the merger would harm the public interest was too speculative. I therefore decided that it would not be right in all the circumstances of this case to stop the merger. But in leaving Charter free to renew its bid I sought an assurance from it that Anderson Strathclyde would remain a Scottish company with its registered office in Scotland. This assurance has been given me by the company.
Mr. Bruce Millan: If the House was not rising tomorrow, we would ask for an immediate debate on this matter. Indeed, we want a debate to be held immediately after the recess.
As regards the position of the Secretary of State for Trade, we still question whether what has happened is legally sound. We certainly do not consider it proper. At the very least, there has been a serious error of judgment on the Secretary of State's part. Is not the Minister aware that there has been a complete lack of candour about this issue? It was only by chance that the circumstances were disclosed yesterday. Why did not the Government come clean at the very beginning and explain the circumstances to the House?
However, the merits of the issue are much more important than the Secretary of State's position. Is it not unique that a decision of the Monopolies and Mergers Commission should have been overturned in this way?
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What is the point of the commission spending six months exhaustively considering the matter if, at the end of the day and for purely arbitrary reasons, the Government overturn its conclusions?
Is it not a fact that the Minister made that decision because he has been got at by City interests, who were extremely upset about what happened over the Royal Bank of Scotland report by the Monopolies and Mergers Commission? Is it not a reaction to that? Is not Anderson Strathclyde being made the sacrificial victim? Is it not true that the decision was taken not on objective considerations but because of spite and political considerations? Is the Minister aware that everyone connected with Anderson Strathclyde—from the Chairman of the company, whom I met today, down to the work force—is opposed to the takeover by Charter Consolidated? They do not want the takeover and they will oppose it. Indeed, the whole of Scottish opinion is on their side.
Is it not a fact that Anderson Strathclyde is a highly profitable company, whose profits in the last financial year increased by no less than 75 per cent. and whose profits increased in the half year to 30 September by a significant percentage? Is it not a fact that the company is technologically advanced, has a good export record, and has excellent management and industrial relations which the majority of the Monopolies and Mergers Commission believed would be prejudiced by the takeover? Is it not a fact that Charter Consolidated can do nothing for Anderson Strathclyde that it cannot do for itself?
Is the Minister aware that the criticism in the minority report concerning technological advance has been categorically repudiated by the company and is factually inaccurate? In addition, yesterday the Prime Minister said that finance was a primary consideration, but Anderson Strathclyde's financial advisers confirmed today that adequate finance was available to the company in the foreseeable future. The assurance that the company will remain a Scottish company registered in Scotland is not worth the paper that it is written on, and the Minister knows it.
An excellent Scottish company is being taken over by outside interests that have no interest in the economic prosperity of Scotland. This is another example of a Scottish company—although there are parallels in other United Kingdom regions—being taken over by a multinational conglomerate whose financial record has not been nearly as good in recent years as that of Anderson Strathclyde. The conglomerate is controlled from abroad, and is ultimately controlled from South Africa. The Minister has made an appalling and disgraceful decision, which we shall fight to the best of our ability. When the House returns after the recess, we shall debate the issue and vote on it. In the meantime, Charter Consolidated would be well advised not to go ahead with a revised bid.
Mr. Rees: The right hon. Member for Glasgow, Craigton (Mr. Millan) has launched a tirade but has raised few questions that deserve serious answer.
As to whether my right hon. and noble Friend was entitled to delegate responsibility in this case, the right hon. Gentleman need only turn to his right hon. and learned Friend the Member for Warley, West (Mr. Archer), who was a Law Officer in the previous Administration, to be informed about the significance of

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the Cartona case and the case of the Queen v Skinner, which demonstrates that it is a perfectly legally sound matter.
The right hon. Gentleman said that there was lack of candour in this matter. I cannot think of a more candid statement of the Government's case than that put out recording the decision. That is the practice that has been followed in all cases until now, including cases in which the Labour Administration were involved. It is true that this is the first time that a Minister at the Department of Trade has not followed the view of a majority of the Monopolies and Mergers Commission. However, it is clear as a matter of law and practice that a Minister is entitled to exercise his judgment, except when the Commission decides that the merger should go through. The right hon. Gentleman, who is an accountant by training, should know that. If it is the first time that a Governmnt of the day has not chosen to follow the majority report, that is because it is the first time that there has been such a powerful dissenting minority opinion.
Dr. Jeremy Bray: Rubbish.
Mr. Rees: The hon. Gentleman may well catch your eye, Mr. Speaker, but to shout "Rubbish" when it is quite clear that there was a powerful dissenting minority—
Dr. Bray: Rubbish.
Mr. Speaker: Order. It is absurd not to listen to the argument that is being advanced. I hope that the Minister can now complete his answer.
Mr. Rees: The minority included the extremely experienced chairman of the Monopolies and Mergers Commission.
The suggestion that I was got at by City interests is a cheap sneer that may be characteristic of the right hon. Gentleman, but I hope not. As to his suggestion that we acted through spite, that may have characterised some of the activities of the right hon. Gentleman's Government but it does not characterise this Government's activities.
I am not here either to praise or to blame the two companies involved. I am concerned simply to determine whether a decision to allow the merger to go ahead would adversely affect the national interest. That is my role, and I have decided that it would not. On that basis, I decided that the merger should be allowed to proceed.
Mr. Anthony Grant: Is my hon. and learned Friend aware that Conservative Members consider that my right hon. and noble Friend the Secretary of State for Trade behaved with absolute and total propriety in this matter? Is he further aware that majority decisions of the Monopolies and Mergers Commission are not holy writ and need not be followed slavishly as though it was the repository of all wisdom?
On the merits of the matter, is it not a fact that the strong financial position of Charter Consolidated will enable Anderson Strathclyde to develop, especially in providing coal mining equipment to overseas markets, so that it can create new jobs, which one would have thought would be welcomed by Opposition Members who are continually whining about unemployment?
Mr. Rees: It is not for me to forecast whether the merger would be advantageous. I must consider only whether it would adversely affect the national interest. It is perfectly true that a comparison of the two balance sheets suggests that Charter Consolidated might be in a
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position to inject capital and to expand Anderson Strathclyde's operations, and so job prospects in Scotland. However, it is not for me to decide that, nor can I make that point to the House.
Mr. Jack Straw: Is the Minister aware that when the House was given a statement on private interests of Ministers of the Crown, following revelations about Mr. Ernest Marples' firm of Marples Ridgway, when it obtained contracts from the Crown, Mr. "Rab" Butler said:
"There may also be exceptional cases where, even though no controlling interest is involved, the actual holding of particular shares in concerns closely associated with a Minister's own Department may create the danger of a conflict of interest. Where a Minister considers this to be the case, he should divest himself of the holding."—[Official Report, 28 January 1960; Vol. 616, c. 373.]
Is it not as plain as a pikestaff that in this case there was a direct connection between the shareholding and the Minister, who should have divested himself of the shareholding although it might be only a minority shareholding?
Mr. Rees: The hon. Gentleman's point is entirely spurious. My right hon. and noble Friend behaved with perfect propriety, because once it became apparent that he might have to take a decision on the commission's report on a company in which he had a tiny interest he immediately distanced himself from both the report and the decision. I did not consult my right hon. and noble Friend about my decision. He did not try to influence me in any way and he was not concerned with the outcome of the commission's report. Therefore, I repeat that my right hon. and noble Friend has behaved with scrupulous propriety throughout.
Mr. Russell Johnston: In dealing with the several points made by the right hon. Member for Glasgow, Craigton, (Mr. Millan), the Minister inadvertently omitted to deal with his assertion that the assurance given to the Minister that Anderson Strathclyde would remain a Scottish company was not worth the paper on which it was written. Perhaps the Minister could comment on that and tell the House what guarantee he has obtained.
Mr. Rees: The undertaking is in very precise terms and it was given to me in writing. I have no reason to believe that it will be broken.
Mr. Tony Marlow: Is not the low truth behind this totally synthetic issue the fact that the Labour Party has a consistent vendetta against South Africa? Is not the whole thing motivated by spite and nothing else?
Mr. Rees: I note what my hon. Friend says, but I cannot speculate on the motives of Opposition. Members. However, a matter of fact that is recorded in the report is that Charter Consolidated carries out a considerable amount of business in black Africa.
Mr. Tony Benn: To revert to the point made by my hon. Friend the Member for Blackburn (Mr. Straw), was the Minister of State's attention drawn to the procedure for Ministers issued by the Prime Minister and published in the House on 20 March 1980, in which the rules laid down by Mr. Butler that have been quoted were reaffirmed for present Ministers? It states:
"Where … the actual holding of particular shares in concerns closely associated with a Minister's own Department

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may create the danger of a conflict of interest: where a Minister considers this to be the case, he should divest himself of the holding".—[Official Report, 20 March 1980; Vol. 981, c. 293.]
There is no reference to asking another Minister to do the job for him. Why did the Minister and the Secretary of State disregard the Prime Minister's procedure for Ministers that he should have received on his appointment?
Mr. Rees: I did not need to have that passage drawn to my attention, and it does not bear the absurd and strained conclusion that the right hon. Gentleman is trying to put on it. Carried to its logical conclusion, it would mean that Ministers in most Departments, because most Departments come in contact with quoted companies, would, before taking office, have to divest themselves of all quoted shares in case at any time in the future their Department might affect the conduct of that company. That is an absurd proposition that I am perfectly confident has never characterised the actions of Labour Ministers or of Conservative Ministers.
Mr. Teddy Taylor: As reports of the proceedings in the House will undoubtedly cause much concern and anxiety among working people in Scotland, will the Minister make it clear that, apart from all the political exchanges, Charter Consolidated wishes to buy the firm to make it prosper, grow and succeed, not to ruin it?
Mr. Rees: That can be inferred from the evidence given to the commission, which is contained in its report. My hon. Friend's point is perfectly sound. I know of very few cases where a company takes over another in order to destroy it or its job opportunities.
Mr. George Foulkes: Will the Minister concede that most of the representations to the commission were against the merger? He has admitted that this is the first time that a recommendation of the commission has been overturned. Does he think that we believe that he is doing anything other than his master's bidding and looking after the interests of the Secretary of State? A junior Minister must be aware that he must live and work with the Secretary of State.
Mr. Rees: It is true to say that numerically the weight of representations was against the merger, but I must consider the broader issues. I am not bound to accept that evidence. I entirely reject the absurd proposal that I do anyone's bidding when exercising this discretion.
Mr. Neil Thorne: Can my hon. and learned Friend confirm that our right hon. and noble Friend did precisely what the Prime Minister wished and divested himself of responsibility in the shares? Therefore, he does not have any direct interest in the shares.
Mr. Rees: I understand that to be the case. More importantly, I reiterate that at no point did my right hon. and noble Friend concern himself with the conclusion or the decision that I have taken.
Mr. William Hamilton: Can the Minister name any political party or any other organisation throughout Scotland which supports the decision that he has announced today? Is he aware that Anderson Strathclyde has a major factory in my constituency? Both management and men have an excellent record in
960
industrial relations and in every other way. There will be nothing but despair and incomprehension at this decision, and as has been said by others in other contexts, it will be seen as the unacceptable face of capitalism.
Mr. Rees: I did not concern myself, and am not concerned, with party political considerations in this decision. I am unmoved by the political rhetoric of other parties in this matter. It is not my concern to denigrate the excellent labour relations at Anderson Strathclyde. I hope that they will persist if Charter Consolidated takes over the company. The hon. Gentleman is quite right when he says that its operations are predominantly in Scotland, but three of its factories are south of the border.
Dr. M. S. Miller: Is the hon. and learned Gentleman aware that it is quite evident the Conservative Party has written Scotland off politically? The Scottish public will see this matter not in the way that he portrayed it this afternoon, because nothing he said has allayed the fears of Labour Members. In addition to the way in which the decision has been taken, we fear that Charter Consolidated will suck the Scottish company dry and toss it aside in the same way as other multinationals have done in Scotland.
Mr. Rees: Neither I nor my right hon. Friends have written off Scotland or Anderson Strathclyde. The Opposition rhetoric will not benefit Anderson Strathclyde. The assertion that Charter Consolidated is a multinational that would suck the Scottish company dry and discard it is pure speculation dreamt up by the fevered brain of the hon. Gentleman.
Mr. Bill Walker: Does my hon. and learned Friend agree that many Scottish companies have acquired interests when taking control of companies outside Scotland with the objective of improving the performance of those companies? It is nonsense to suggest that someone from outside will take over a company simply to destroy it.
Mr. Rees: My hon. Friend speaks with authority, and I confirm what he says. I am staggered by the lack of confidence in Scottish prospects, and the prospects of Scottish companies, shown by Labour Members.
Dr. Bray: I apologise if my outrage earlier at the remarks of the Minister of State moved me to expostulate in the way I did.
Is the Minister of State aware that the capricious behaviour in the Department of Trade has led the Department to refuse to refer three cases to the Monopolies and Mergers Commission which it was recommended to do by the Office of Fair Trading? It has referred one case against the advice of the Office of Fair Trading. It has now refused to act on a report by the Monopolies and Mergers Commission. Does this not make absolute nonsense of any coherence of policy on the part of the Government? Is the Minister aware of the suggestion that industrial relations in Anderson Strathclyde are gravely damaged by a South African company? The suggestion that that is merely a possibility is utterly naive. I invite the hon. and learned Gentleman to meet the Anderson Strathclyde shop stewards to be informed of the facts of life.
Did the Minister of State know which company the Secretary of State had an interest in? Why was there no declaration of interest? What approaches were made to the Minister of State and his officials by lobbyists or others by

961
or on behalf of Charter Consolidated? Does he expect this House to have confidence in the judgment of Ministers on the merits of the bid when they have lacked judgment on the handling of the declaration of interest?
Mr. Rees: Each case is decided on its merits, and that is the way it should be.
I am at a loss to understand at what point a declaration should have been made. It was made clear at the time of the press statement that announced the decision why my right hon. and noble Friend had distanced himself from the report on the decision.
I assure the House that I was lobbied by no one on the decision I took.
Mr. Joseph Dean: Is the Minister aware that, as reported in Hansard on 8 April, c. 1086, I questioned the Prime Minister about the desirability of appointing a noble Lord from another place to the sensitive post of Secretary of State for Trade, bearing in mind the debacle that had just occurred by the Foreign Minister not being answerable to this place but being answerable to the other place? I questioned whether the Secretary of State for Trade ought to be in another place and not answerable to this Chamber. Have not subsequent events proved me right?
Mr. Rees: My right hon. and noble Friend is a dedicated, scrupulous and intelligent member of the Government. No doubt Opposition Members would have made the same bogus points had he been a member of this House.
Mr. Bob Cryer: Do not the rules governing ministerial appointments apply precisely to give the public confidence that there will not be any conflict of interest? Do not those rules require a divestment of interest? Does not the legislation under which the Minister operates refer to the Secretary of State? Is not the Minister of State always operating on behalf of the Secretary of State? Do not the rules governing the appointment of Ministers also make it absolutely clear that junior Ministers act with the authority and under the guidance or control of Secretaries of State? Would not the conduct that has recently been revealed in the Department of Trade be outlawed in local authorities, and why should we have lower standards than them?
Mr. Rees: The hon. Gentleman may have lower standards, but I am not conscious that there are lower standards on the Conservative Benches. I may have been acting under authority, but I was not acting under the guidance or control of my right hon. and noble Friend in this case. There was no conflict of interest because the decision was taken by me and I had no shareholding or other interest in the two companies.
Mr. Michael English: On a point of order. Does that answer the reason why the Government rejected the Expenditure Committee and Treasury proposals—
Mr. Speaker: Order. I am not answering for the Minister.
Mr. English: On a point of order—
Mr. Speaker: Order. The hon. Gentleman does not have a point of order.
Mr. English: I do, Sir.
Mr. Speaker: Mr. Tom McNally.
Mr. Tom McNally: Is the Minister aware of the concern in Scotland? Is he also aware that the points raised by the hon. Member for Blackburn (Mr. Straw) and the right hon. Member for Bristol, South-East (Mr. Benn) are of genuine public concern? In the light of what has happened, will the hon. and learned Gentleman guarantee that the Prime Minister will redefine the Butler guidelines to Ministers? Unless she does, the public concern will remain.
Mr. Rees: The hon. Gentleman should not be so arrogant as to assume that he articulates public concern. My right hon. Friend the Prime Minister will no doubt judge how spurious the points are and will take her own course of action.
Mr. Peter Archer: The hon. and learned Gentleman was kind enough to refer to me in relation to the lawfulness and propriety of the Secretary of State's delegation of the duties imposed on him by the Act. Does he appreciate that the words of Lord Greene in the Carltona case do not confer a blanket authority on the Secretary of State to delegate every decision, whatever its importance, nor do they affect the propriety of doing so without declaring publicly at the outset the reasons that led to the delegation? Were the Law Officers consulted before the delegation? For some reason the Secretary of State decided not to delegate the decision either to the Minister for Consumer Affairs, who normally deals with these matters, or, perhaps more appropriately, to the Secretary of State for Scotland. Was that because they were both lobbied by Charter?
Mr. Rees: It is perfectly proper in this kind of situation for any Secretary of State to delegate authority within his Department. For the right hon. and learned Gentleman, with his experience of these matters, to suggest that a category of decisions cannot be delegated is a total misreading of the law. As far as I am aware, the Law Officers were not consulted—[HON. MEMBERS: "Oh".] If I am wrong, I shall write to the right hon. and learned Gentleman. In this situation I do not believe that the Secretary of State for Scotland, warm though my regard is for his abilities, would have been the proper person to whom this decision should have been delegated—[HON. MEMBERS: "Why?"] Because it was clearly within the responsibilities of the Department of Trade. As I have said, my hon. Friend the Minister for Consumer Affairs chose to distance himself because he felt that there had been certain lobbying.
Mr. English rose—
Mr. Speaker: Order. If the hon. Gentleman still feels that he has a point of order, I shall take it after hearing the application under Standing Order No. 9.

Department of Health and Social Security Offices
4.22 pm
Mr. Alan Williams: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the risk of a strike throughout DHSS offices".
The urgency arises from the fact that the House goes into recess tomorrow until 17 January, which is the envisaged date for the beginning of an all-out strike at social security benefit offices. Therefore, Mr. Speaker, unless you allow an emergency debate, the House could return to find a strike under way. I was reluctant to make this application because I had hoped that the Minister would have volunteered a statement on the matter before the recess.
It is self-evident that this is important because, as the Prime Minister pointed out only yesterday, more than 6 million people depend on the benefits disbursed by the DHSS. Therefore, if the strike takes place, it will have immediate effects on new claimants and on claimants who receive their benefits through a weekly Girocheque, and it will have an accumulative effect on the remainder of those 6 million people as benefit books gradually expire.
It is ominous that during the recent one-day strike, 360 benefit offices were closed. One must doubt the ability of the emergency services to cope if faced with an all-out strike at such short notice.
The House should realise that this risk of hardship is avoidable. It need never have arisen. The dispute is not over pay but over severe staff shortages. In fact, last year the DHSS had a £59 million underspend on its staff budget. The staff rundown has been faster than planned by the Treasury. Before the Birmingham strike even started, the region had 1,100 fewer staff in establishment than had been allocated. In the last 12 months the work load has increased by 22 per cent. in respect of supplementary benefit and 35 per cent. in respect of claims from the unemployed, this at a time when the staff level has been reduced by 2½ per cent. The Government have merely offered to put in post for three months 45 temporary staff, although it takes 13 weeks to train them.
As I have said, this is an avoidable strike. It could have a disastrous effect on thousands of families. The House should debate the matter before the strike occurs. If that is not possible, and I well understand that at this stage in the session it may not be so, I hope that the Leader of the House will ensure that we have a ministerial statement tomorrow.
Mr. Speaker: The right hon. Gentleman gave me notice before 12 o'clock midday that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the risk of a strike throughout DHSS offices".
As the House knows, under Standing Order No. 9, I am directed to take into account the several factors set out in the order but to give no reasons for my decision. I have given careful consideration to the right hon. Gentleman's representations, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Questions to Ministers
4.25 pm
Mr. Sydney Chapman: On a point of order, Mr. Speaker. I apologise for jumping the gun, but a fortnight ago I tabled a question for oral answer by the Secretary of State for Foreign and Commonwealth Affairs in the hope that today I would have had the opportunity of asking a supplementary question. That question related to an important speech that the Foreign Secretary made to the Royal Commonwealth Society earlier this month. The question was accepted by the Table Office, but subsequently it was transferred to my right hon. Friend the Minister for Overseas Development, presumably because the speech was entirely devoted to overseas aid.
I seek your guidance on this point, Mr. Speaker, because I believe that it affects the rights and opportunities of all hon. Members. Should not an hon. Member have the opportunity of questioning a Secretary of State, who is head of a Department, about a subject for which he has overall responsibility, especially when the question relates to a speech that the Secretary of State made?
Mr. Speaker: The hon. Gentleman will be aware that questions on overseas aid are addressed to the Secretary of State, but it has always been up to the Government to decide which Minister will answer. I cannot decide from the Chair who will answer a given question. I am sorry that I cannot give the hon. Gentleman a more helpful reply.

Conduct of Ministers
4.26 pm
Mr. Michael English: I think, Mr. Speaker, you will agree that it is a matter of order whether the truth is told to the House. If it is not, it becomes a contempt of the House, and such a proposition on a totally different issue may come before us shortly.
Possibly through inadvertence—I do not accuse him of lying—the Minister of Trade may not have been entirely aware that in this Parliament the Cabinet considered the very issue involved in a general sense. The Expenditure Committee in the last Parliament and the Treasury and Civil Service Committee in this Parliament have both suggested that we should adopt United States law. If I may digress for a moment—[HON. MEMBERS: "No".]—
Mr. Speaker: Order. I am wondering when the hon. Gentleman will raise a point of order on which I can rule. His disagreement over the substance of a reply is not my concern. However, if he wishes to raise a point of order relating to our Standing Orders, I shall gladly try to rule on it.
Mr. English: I accept your point, Mr. Speaker. The point at issue is that in the United States it is a criminal offence for any person to have personal dealings—which I accept that the Secretary of State did not do in this case—or to—
Mr. Speaker: Order. It is quite clear that the hon. Gentleman is pursuing an argument. He was not called for a question to the Minister and he must not pursue it through a point of order. Unless he can demonstrate within his opening sentence that it is a point of order on which I can rule, I should ask him to resume his seat.
Mr. English: Why did not the Cabinet Minister advise the Minister that he should have pointed out—
Mr. Speaker: Order. It is quite clear that this is not a point of order for me.
Mr. Tony Benn: On a point of order, Mr. Speaker. I rise to seek your guidance and help on a matter of which I have given you prior notice, relating to the matter that has been before the House, but not on the decision specifically relating to Charter Consolidated and Anderson Strathclyde.
The issue that I wish to put to you is as follows. Yesterday in the House, the Prime Minister said that the Secretary of State behaved quite properly in handing his responsibility to the Minister of State. That is a matter of record. But on 20 March 1980, the Prime Minister, in a written answer to my right hon. Friend the Member for Battersea, North (Mr. Jay), quoted the rules of procedure for Ministers, which I and my hon. Friend the Member for Blackburn (Mr. Straw) quoted, to the effect that where there is a conflict of interest the Minister should divest himself of his holding, even if it is a minority holding.
In giving the answer on 20 March 1980, the Prime Minister referred to Sir John Hunt's memorandum in March 1975 to the Royal Commission on standards of conduct in public life, and those same words appeared in that document. They are also the same words that are in the rules of procedure for Ministers, which are issued to every Government by the Prime Minister of the day, and of which, as a member of the Labour Government, I received a copy. The words are identical in that case, but
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the rules cover matters well beyond private shareholdings. They also cover the requirement that the Law Officers should be consulted in any matters of doubt.
The point that I wish to raise is to allow the House to be fully acquainted with the rules of procedure for Ministers. I sought an opportunity today to lay those rules of procedure before the House, because they are matters of considerable public interest and follow from one Government to another. The learned Clerk quite properly told me that only Ministers are allowed to table papers, and that Back-Bench Members are not allowed to do so.
I then went to the Library of the House, and I was told by the Librarian that the House of Commons Library manual states that Mr. Speaker has ruled that papers may be deposited in the Library only by a Minister of the Crown. So the position is that this very important document, which bears directly on the matter that we are discussing, although in the possession of an hon. Member, cannot be either placed on the Table of the House or deposited in the Library.
This situation involves an important matter of public interest. Therefore, I ask you, Mr. Speaker—not immediately, because this is a major question—to allow me to place the procedure document in the Library of the House; to allow all hon. Members to use the Library to acquaint their fellow Members of documents of relevance of the same kind; and also to ask the Prime Minister to table the full procedure for Ministers, in that on 20 March 1980 she published a part but not the whole of a document. In those circumstances, the Minister should place the entire document on the Table of the House, in accordance with "Erskine May".
Mr. Tom McNally: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order, I shall answer the point of order.
Mr. McNally rose—
Mr. Speaker: Order. I am quite sure that the hon. Member for Stockport, South (Mr. McNally) will not be able to help me very much.
The question raised by the right hon. Member for Bristol, South-East (Mr. Benn) is one that I can rule on today. I need not take time, because I have had a chance of knowing what the right hon. Gentleman said to the Clerk's Department. He gave the Clerk's Department notice, and that Department told me that he was likely to raise a point of order this afternoon.
The rules which govern the holding of shares and directorships by Ministers as such, in so far as they differ from our rules here that the House has laid down about our interests as Members of this House, are a matter for the Government, not for me. They may well differ from Government to Government. It is not for me to rule what rules a Prime Minister may lay down for members of the Administration. I have no power to rule upon them, nor have I any desire to rule upon them, nor have I any power to direct the Government to produce any information that they may not already have produced.
Mr. Benn: I appreciate, Mr. Speaker, your being ready to give an immediate answer, but may I put it to you that the matter is rather more complex than was implied by the advice that you received, in this sense? It has long been an established principle of the House, set out in successive volumes of "Erskine May", that if a Minister cites a part

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of a document, the whole document should be tabled. It has been established without question that on 20 March 1980 the Prime Minister cited a part of a document known as the rules of procedure for Ministers, but not the whole document. In those circumstances, "Erskine May" is quite clear that the whole document is to be tabled.
The second point is that you did not deal with the request that I made that the full document relating to a previous Administration—the two are the same—should be able to be deposited in the Library of the House. I cannot see why Ministers should have special access to the House of Commons Library, which belongs to the House as a whole.
Mr. Speaker: That rule has endured for a very long time, long before I became Speaker of this House, and I have changed nothing in that regard. Secondly—
Mr. McNally rose—
Mr. Speaker: Order. I am on my feet. Is the hon. Gentleman blind? He knows the rules of the House.
If the Prime Minister referred to a document in 1980, it is not for me to rule at the end of 1982 that that document should be placed on the Table of the House. I can rule now that that request should have been made a long time ago, on the day when the reference was made to it, or certainly on the following day. I should not be asked, nearly three years afterwards, to rule that because of a remark in Hansard, after all that time, I should change the rules, or that I should call on the Prime Minister to lay the document.
Mr. McNally: On a point of order, Mr. Speaker—this is like a ball of wool that will run along unravelling—would it not be better if you were to use your wise counsel to suggest to the Prime Minister that she comes to the House and makes a statement?
Mr. Speaker: It is not for me to make any such suggestion.
Mr. Jack Straw: Further to the point of order raised by my right hon. Friend the Member for Bristol South-East (Mr. Benn), Mr. Speaker. May I, with respect, say that the fact that a rule has been in existence for a very long time is often a good reason for changing it, as opposed to sticking to it. An important issue has been raised by my right hon. Friend, whether the Government should be forced to table a document, and, separately, whether right hon. and hon. Members of this House who have documents should themselves be able to make them available for inspection by other hon. Members by depositing them in the Library, which is the Library of this House and not of the Government. I respectfully ask you to consider this matter further, and to make a further statement either tomorrow or when we resume after Christmas.
Mr. Bob Cryer: Further to that point of order, Mr. Speaker. I should like to raise an additional point about the ruling that you have just made, which I hope will not be regarded as a hard and fast ruling for all time—to the effect that if some information is given that is part of a document, the whole of the document must be requested either the same day or within a few days. In this case, as you will be well aware, the document is not a published document. Therefore it can be some
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considerable time before the extent of the document becomes known, and thus a request can be made. The pressure of circumstances may give rise to right hon. and hon. Members other than the recipient of a written answer seeking out the further information and realising that the answer is only part of a document. Therefore, it would be helpful to the House which you represent, Mr. Speaker—as opposed to the Government, who are only a part of the House—if you could re-examine your remarks to allow much greater latitude when it is requested that documents be placed on the Table of the House.
Mr. Benn: May I now seek your guidance on the general question, Mr. Speaker? I have in my possession, as has every Minister and former Minister, a copy of the rules of procedure issued by successive Prime Ministers to successive Governments. Those rules of procedure are specific. They develop from one Government to another and include many paragraphs dealing with this and other matters. It is highly relevant to the immediate matter about the rules governing ministerial conduct that the House will be discussing in the new year.
The purpose of my request, Mr. Speaker, is to ask you whether you can help me as to how I can put the document, to which I have referred, in the hands of the House. If the ruling about the Library was not yours, it may very well have been in relation to different matters of Members wishing to leave papers for general circulation. I am dealing with a specific matter of specific public interest. I ask you, Mr. Speaker, please not to rule on that now but to consider the matter more carefully and allow private representations to be made upon the matter.
Mr. English: Further to that point of order, Mr. Speaker. My point was simple. There are many precedents showing that Cabinet Minister's statements to the House are treated in a different way from those of junior Ministers. I do not need to tell you, Mr. Speaker, that there are many precedents in that regard and I ask you to consider whether this question can be answered by anyone less than a Cabinet Minister.
Sir Anthony Meyer: On a point of order, Mr. Speaker. You will have listened for 20 minutes, as will the rest of the House, to the EC questions and heard how flat, weary, stale and unprofitable the discussions were. I know that this is not a matter on which you can rule, but as there are Government business managers present, may I once again put in a plea that that slot should be abolished?
Mr. Speaker: I have listened carefully to the point of order raised by the right hon. Member for Bristol, South-East (Mr. Benn) and other hon. Members. I gave a great deal of thought to the matter before I came into the House. Only if I found that I were wrong—I do not think that I shall—would I consider it necessary to make any further statement to the House. That is extremely unlikely in view of the research that I have already done.
With regard to the point of order on EC questions raised by the hon. Member for Flint, West (Sir A. Meyer), he will realise that that is not a matter for me.
Several Hon. Members rose—
Mr. Speaker: I shall hear one more hon. Member and then I hope that we shall be able to proceed with the business of the day.
Dr. M. S. Miller: Further to the point of order, Mr. Speaker, about which you said that nearly three years had elapsed since the original submission of part of a paper to the Library, may I ask what difference two and a half, or three, years make? If the decision was right then, is it not right now?
Mr. Speaker: I have nothing to add to what I have already said.

Standing Charges of Public Utilities to Pensioners (Regulation)
4.43 pm
Mr. John Spellar: I beg to move,
That leave be given to bring in a Bill to regulate the standing charges to pensioners of public utilities.
It is appropriate that we are discussing this Bill on the shortest day of the year at the start of the coldest period of winter when most of Britain is already shrouded in a considerable amount of snow. The problems of fuel costs and standing charges have exercised the House considerably over the past few years, even as recently as an Adjournment debate on 13 December.
The background to that concern is simply that, while the retail price index between May 1979 and September 1982 increased by 49 per cent., gas charges increased by 94 per cent., and electricity charges by 82 per cent. We are also aware that while fuel costs have exceeded the average increase in the retail price index, standing charges have increased even more quickly than fuel costs generally.
When my hon. Friend the Member for St. Pancras, North (Mr. Stallard) introduced his Bill earlier in the year, a member of the public wrote to my hon. Friend describing the increased bills that that person had had since 1980—not even since 1979. The cost of electricity increased from £3·20 in February 1980 to £7·28 in August 1982—an increase of 127 per cent. The cost of gas increased from £2·16 in March 1980 to £8·00 in March 1982—an increase of 270 per cent. His telephone quarterly rental charge had increased from £6·12 in January 1980 to £14·50 in May 1982—an increase of 137 per cent. It is significant that the gas increase is far and away the greatest. Hon. Members from all areas of Britain will know that that has been a uniform increase which has been much resisted in many areas as far apart as Scotland and the South-West.
It is often said that we have always had standing charges, so why should there be such a fuss at this time. The principle of standing charges has been accepted over a long period. The reason for the present widespread public outcry is the dramatic increase in standing charges in the major utilities—a major shift in the burden of fuel and telephone bills from the usage charge to the standing charge. Those fixed charges, as we are all aware, bear most heavily on the poorest sections of the community, and, regrettably, a considerable section of that poorest group are pensioners.
For the electricity industry the standing charge is effectively a meter tax because nearly every household in Britain is supplied with electricity and, unlike the other utilities, there is an obligation on the electricity authority to provide supply. In that sense there is a difference between the various bodies. Given the almost universal use of electricity, we are effectively dealing with a meter tax for the supply of that fuel. It is a deliberate act of policy by the Department of Energy through the utility authorities to move towards the fixed charge as opposed to the variable charge. The main effect of that is to raise the profitability of supply to domestic consumers compared with industrial and commercial consumers. Government

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reports have shown that they are concerned about the profit differential between those two sectors. If it is the Department of Energy's intention to adjust the balance of profitability between domestic consumers and industry, it should say so openly rather than argue about the theoretical justification for standing charges—the need to provide plant and supply. As I have said, that is particularly the case in the electricity supply industry.
One of the major inequities of the increase in standing charges has been drawn to the attention of the House only recently. It seems that we are on our way to achieving a resolution of that despite the rather roundabout announcement and the unclear signals coming from the Government—the 50–50 solution with regard to the gas and electricity industries. That will obviously be extremely welcome because about half a million gas consumers and 375,000 electricity consumers are pensioners whose standing charges are currently more than 50 per cent. of their bill. However, we must enter a couple of caveats.
The university of York's social policy research unit has made some inquiries on the impact of the 50–50 proposal and has estimated that in winter months the change would have modest general consequences and that only 12 per cent. of pensioners on supplementary benefit would gain. Therefore, while there will be an improvement in the summer months and benefit to some pensioners during the winter months, we should give a cautious welcome to this proposal.
If the proposal is adopted by the electricity boards—I hope they will follow the recommendation of the Electricity Council—the units of electricity used by pensioners, who are watching every last penny, in the early stages will cost them double the usual price. We all know of pensioners who come to our advice bureaus for help. Very often we see people who represent pensioners who are ashamed to come to our advice bureaus. They say that one of their relatives is in severe difficulty because he is always watching how the gas and electricity meters are going. If every extra unit costs double under this system, that tendency will increase. We should be concerned about that.
We should welcome any change that benefits those pensioners who have a small company pension and are therefore rendered ineligible for a wide range of other benefits. They have major problems. I am glad that the proposal will be of general application.
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While attention in other debates has concentrated mainly on fuel, my Bill deals with public utilities generally. I should like briefly to refer to telephone bills. The standing charge on telephone bills is substantial. Because of social changes the telephone is far more of a vital link for many old people than perhaps it was before. As a result of widespread movement of families, often because of transfers to housing estates some distance away, and regrettable social changes, many old people are afraid to go out at night. In recent times two hon. Members have been attacked late at night. We know of the dangers in our streets. Therefore the telephone is very much a lifeline for many old people for keeping in contact with the world and their families. Even if they are only receiving telephone calls, they experience the problem of the major standing charge.
I do not have time to deal also with the rapid increase in standing charges for water which, being based on the rateable value of the property, have also increased dramatically for many pensioners over the past few years. Many hon. Members have drawn attention to the matter. The solution of metering, given the initial installation cost, is not applicable for them.
With that background it is no wonder that earlier this year 1 million signatories argued for the abolition of standing charges. Fixed charges always bear most heavily on the poorest sections of the community which means that many millions of pensioners are in that category. Fixed charges become a major issue of policy because of the deliberate policy of the Department of Energy to reflect the cost of energy in this manner. What the Government and the Department of Energy have done through the boards, they can undo. The Bill is one means of doing it. The full support of the House for the Bill would be a welcome Christmas present for the countless pensioners who are worried about their bills this winter.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Spellar, Mr. Thomas Cox, Mr. David Stoddart, Mr. A. W. Stallard, Mr. Andrew F. Bennett, Mr. Frank Dobson, Mr. George Foulkes, Mr. Frank Haynes, Mr. Derek Foster, Mr. Frank R. White and Mrs. Ann Taylor.

Standing Charges of Public Utilities to Pensioners (Regulation)
  STANDING CHARGES OF PUBLIC UTILITIES TO PENSIONERS (REGULATION)
  Mr. John Spellar accordingly presented a Bill to regulate the standing charges to pensioners of public utilities; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 4 February and to be printed. [Bill 51.]

Privilege
Mr. Terry Davis: I beg to move,
That the matter of the complaint be referred to the Committee of Privileges.
The purpose of my motion is to call attention to the conduct of witnesses before the Select Committee on the Abortion (Amendment) Bill.
In view of the ruling given by Mr. Speaker yesterday granting precedence to the motion, I hope that the House will be prepared to agree to it without a debate so that we may await the findings of the Committee of Privileges. We can then pursue the matter further.
Question put and agreed to.

STATUTORY INSTRUMENTS, &c.
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committees on Statutory Instruments, &c.)
STATUTORY INSTRUMENTS, &c.
  AGRICULTURE
  That the draft Hill Livestock (Compensatory Allowances) (Amendment) Regulations 1982, which were laid before this House on 23rd November, be approved.
  INTERNATIONAL IMMUNITIES AND PRIVILEGES
  That the draft Commonwealth Foundation (Immunities and Privileges) Order 1982, which was laid before this House on 26th November, be approved.
  INDUSTRIAL TRAINING
  That the draft Industrial Training Levy (Construction Board) Order 1982, which was laid before this House on 2nd December, be approved.
  TAXES
  That the draft Oil Taxation (Gas Banking Schemes) (No. 2) Regulations 1982, which were laid before this House on 1st December, be approved.
  TERMS AND CONDITIONS OF EMPLOYMENT
  That the draft Unfair Dismissal (Increase of Compensation Limit) (No. 2) Order 1982, which was laid before this House on 3rd December, be approved.
  TERMS AND CONDITIONS OF EMPLOYMENT
  That the draft Employment Protection (Variation of Limits) (No. 2) Order 1982, which was laid before this House on 3rd December, be approved.

  MONOPOLIES AND MERGERS
  That the draft Monopolies and Mergers Commission (Membership of Groups for Newspaper Merger References) Order 1982, which was laid before this House on 22nd November, be approved.—[Mr. Gummer]
  Question agreed to.

Falkland Islands (Shackleton Report)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gummer.]
4.54 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Cranley Onslow): I should like to open the debate on the Shackleton report and connected matters by echoing the thanks that my right hon. Friend the Foreign Secretary paid to Lord Shackleton and his team in his statement to the House on 8 December.
Hon. Members will recall that at the end of May, even before the full repossession of the Falkland Islands was completed, the Prime Minister asked Lord Shackleton whether he would be prepared to update his original economic survey of the islands, which was published in 1976. He was asked to revise the conclusions and recommendations made in that original study, examining—and this is a particularly important point—social as well as purely economic aspects, and to report back as quickly as possible. Lord Shackleton agreed, and his updated report was completed in less than two months, as his introduction records—a considerable achievement. Most hon. Members will have read the report for themselves and will, I am sure, wish to join me in expressing both admiration and gratitude for the speed and thoroughness with which Lord Shackleton and his team carried out their commission. I should like to add that we intend to remain in close touch with Lord Shackleton and the members of his team over the implementation and, where necessary, further consideration of his recommendations, and I am confident that their advice will continue to be of value as we push ahead with the economic development of the Falkland Islands.
I should also like, at this point, to endorse what was said by the Civil Commissioner, Sir Rex Hunt, to the Legislative Council in Port Stanley on 16 December in which he paid tribute to the efforts of all those involved with the rehabilitation of the islands and expressed the Council's grateful thanks to Her Majesty's Government for the development programme we have approved.
Before I comment in detail, but not, I hope, at inordinate length, on the various elements in the development programme, and on some of our reasons for making the decisions that have so far been taken, I must say a few words about the progress of the reconstruction and rehabilitation programme, since any economic development requires a sound infrastructure.
Even before the Argentines had finally surrendered, we were starting to organise our plans for getting life on the islands functioning normally again as soon as possible. Our first task, obviously, was to re-establish the administration: we had to get the Civil Commissioner and some of the Councillors back, as well as the Chief Secretary and many of our overseas aid staff who had been removed after the invasion. The next priority was to get the schools running again, to ensure that the children's education suffered as little as possible from the hiatus of the occupation. We then had to set about the major tasks of rehabilitation.
The physical problems that faced us in Port Stanley on 14 June were not as severe as we had at some stages feared they might be. In Stanley itself most of the houses and other buildings had survived the fighting intact. The difficulties were still daunting. Seven houses had been

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wholly destroyed, 20 were completely uninhabitable and a further 167 had suffered varying degrees of damage. The problems of maintaining food and fuel supplies, essential services, medical treatment and internal telecommunications, were very real. At the same time we had to undertake the task of clearing up the filthy mess that the Argentines had left behind in the town. This was made all the more pressing and difficult by the severe winter conditions then prevailing. Machinery to co-ordinate and direct the task of rehabilitation was immediately established both in Stanley and in London. In the islands, following the return of Sir Rex Hunt on 25 June, the military and civilian authorities set up a joint committee to oversee co-operation in rehabilitation tasks. In London, similar machinery was established, based on my Department, but calling as necessary on the expertise and assistance of the Overseas Development Administration, the Minister of Defence, the Department of Trade and the Crown Agents. I convened the first meeting of this interdepartmental committee to coordinate rehabilitation work on 11 June, when victory on the Falklands was already in sight: and this committee has continued to meet at regular intervals ever since.
We drew up a first list of requirements in July in consultation with Falkland Islands Government and the decision was taken to make an initial allocation of £10 million towards the rehabilitation programme. We went ahead at once with orders for large quantities of building materials, fuel, equipment, tools, vehicles and other supplies to assist rehabilitation, and to replace stores and equipment destroyed during the conflict. We also ordered replacement aircraft for the Falkland Islands Government air service, whose entire fleet had been destroyed. All this new equipment and supplies had to be complemented with civilian personnel to run the rehabilitation programme.
In a matter of weeks the Overseas Development Administration selected and recruited 34 new personnel for the Falkland Islands Government. They were needed for a wide range of tasks: there were policemen and nurses; electricians, plumbers and mechanics for the public works department, with various supervisory staff; teachers, administrators and such senior Government officers as the Attorney-General, the Registrar-General and the development officer. They are all now established in Stanley, working in difficult conditions with considerable energy and enthusiasm. Some will be required for only about six months while others are on contracts ranging up to three years.
Meanwhile, many of the islanders had their own repairs to do, to make good the damage to their property. As soon as possible we set up a compensation scheme in the islands operated by my Department and drawing on the expertise of the Ministry of Defence claims assessment staff to provide prompt and adequate repayment to all civilians who had suffered damage, loss or injury. About 400 claims have now been settled and around £2 million has so far been paid out under this scheme. It will still be some time before the final claims are met, since these largely relate to long-term agricultural losses which are difficult to quantify. However, I think we can justly claim that this compensation scheme has proved a swift and effective means of making good the material damage and losses caused by the conflict.
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In the islands, much of the early rehabilitation was, of course, undertaken by the Services. They really did a magnificent job. They performed with considerable ingenuity in patching up housing, filling in slit trenches, reinstating essential services like the water supply and the power station; and in clearing the deadly threat of booby traps and mines and other abandoned ordnance in the immediate area of the town. I know the islanders would like me to stress their awareness of the debt of gratitude that they owe to the Services, not only for their liberation but for the enormous amount of work that has been undertaken on their behalf since the end of the Argentine occupation. I was able to see for myself the good work done by the Queen's Own Highlanders and other units while I was there. The Civil Commissioner said in the address of 16 December to which I have already referred:
"We have all seen how hard the Armed Forces have worked, around the clock and seven days a week, often in atrocious weather and appalling conditions. They have accomplished more in six months than I would have believed possible even in the United Kingdom, let alone 8,000 miles from their bases and in a place lacking such basic facilities as a deep-water jetty".
I should also stress the contribution that has been made by the staff of the Falkland Islands Public Works Department. It would be wrong, too, to forget the extent to which private landowners have also been active in the rehabilitation process. I know, for example, that the Falkland Islands Company went ahead with buying and shipping equipment to a value of £500,000 to repair and replace its losses without waiting for the settlement of its compensation claims.
When I visited Stanley in October, early in the Falklands spring, the town was beginning to look reasonably normal. It was obvious that a great deal had been achieved, through the combined efforts of all involved. I think that the House should recognise the very real efforts the islanders have made and are continuing to make under Sir Rex Hunt's leadership to ensure the success of the rehabilitation programme. However, it was clear then, in the nature of things, that the work that had been done on essential services was very much a first-aid operation to patch up already over-stressed plant and equipment so that these could continue to provide emergency services to meet immediate needs.
As a result of that, two weeks ago my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs announced our intention to provide a further £5 million over the next two or three financial years to enable the Falkland Islands Government to tackle a number of longer-term rehabilitation tasks. These will largely involve the more permanent reconditioning of essential services, and in particular the roads in Stanley, which have suffered both during the conflict and from the enormously increased traffic since the liberation, the water supply, the power system and the internal telecommunications system. We have concluded that major remedial work on the roads in Stanley and the road to the airport must be tackled before the onset of the next winter, and we are taking urgent action to engage a United Kingdom contractor for these works.
The medical and education services in Stanley have also come under strain. The House will know that the King Edward VII Memorial hospital in Port Stanley is now serving both military and civilian needs. This arrangement provides some benefits to the civilian population. The range of drugs available to the hospital is now extended, and the presence of Army medical teams means that there

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is no longer any need to evacuate most surgical cases. However, the number of civilian beds available in the hospital is now severely reduced. This has caused particular problems in geriatric care.
The medical staff, both military and civilian, are under severe presure. In the short term, I am considering whether we can relieve some of this pressure by providing additional administrative support to the doctors there. In the longer term, we shall have to work out the most effective way of handling both civilian and military needs, and this may well require the building of a larger hospital to cover both requirements.
The education service has also been badly hit. Most secondary education is conducted in Port Stanley itself. For several years, a new boarding hostel for children from the camp has been under construction. This building should have been finished some months ago, but there were problems over its construction, and it was then occupied by the Argentine forces. It is now serving as the headquarters of the British forces on the islands.
I am glad to tell the House that, in order to provide boarding hostel facilities for the 1983 academic year, the Falkland Islands Government have made arrangements to rent Stanley House from the Falkland Islands Company. Accommodation will be expanded by the use of either Portakabins or mobile homes in the grounds. Once these arrangements have been put in hand, we will turn our attention to the best way of providing permanent facilities for the future. At primary school level, education is divided between a school in Stanley and the system of education centred on the various settlements. At present, there is an acute shortage of the travelling teachers who are an essential part of the education system in the camp. I hope that it will be possible to find new staff to ensure that the service is fully operational for 1983: we shall be going ahead with recruitment as soon as possible.
Mr. Michael Shersby rose—
Mr. Onslow: I should much rather not give way to my hon. Friend. I have quite a lot to say and I do not want to take up too much time. With the leave of the House, I shall be closing the debate. I shall be able to answer any questions that my hon. Friend raises when I reply.
I hope that the House will not mind my having dwelt at some length and in some detail on all this rehabilitation work. It is the indispensable preliminary to the further economic development of the islands. Lord Shackleton's report contains the assumption that the status quo will be restored. Although something remains to be done, work can now go forward hand in hand with the economic development programmes that were outlined to the House on 8 December, to which I will now turn.
In his statement my right hon. Friend the Foreign Secretary outlined some of the main purposes to which we expect to see the proposed new aid programme devoted. It may be helpful if I explain in a little more detail how we expect to proceed. My right hon. Friend's statement covered areas of work in which Her Majesty's Government are ready to support the Falkland Islands Government, taking account of the priorities that they had outlined to us.
As my hon. Friend the Under-Secretary of State for Defence Procurement confirmed in the House yesterday, we fully accept the need to provide a better airfield on the islands. Studies are in progress aimed at identifying the
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best site and the likely cost. The Ministry of Defence is taking the lead on this, but the Government will be taking full account of civil as well as military needs. I would add, however, that the question of air links with the mainland must be seen in the correct perspective.
They are highly desirable but, with due respect to Lord Shackleton, they are not absolutely crucial for our plans for the future development of the islands. The established way of moving goods to and from the Falklands has always been by sea. Indeed, Port Stanley now enjoys a much more frequent shipping service than before the conflict. This will continue, for the moment, to be the channel for normal supplies and for materials for rehabilitation and development, and the means of access by families and by routine travellers. It will, of course, still be helpful to establish sea and air links with the mainland at an early stage and we are continuing to pursue the possibilities. In due course, I believe, we shall see such links develop. Meanwhile, as I found the RAF air bridge is an effective means of meeting the needs of essential passengers.
Another central recommendation in Lord Shackleton's report was that a Falkland Islands development agency should be established. To bring this about, local legislation will be required and the island's newly appointed Attorney General is already working on the draft of it. We expect to be in close consultation with the Falkland Islands Government about this as the new development agency will depend, at least in the initial stages, on funds voted for overseas aid by this House. The agency will be accountable, through the Falkland Islands Government, to Her Majesty's Government and to Parliament.
Mr. Clinton Davis: I apologise for intervening now. I know that the hon. Gentleman has much to say. Nevertheless, some ambiguity has arisen with regard to the Overseas Aid Vote. Perhaps the Minister would be kind enough to clear the matter up now as it is of considerable importance.
On 8 December, in answer to my right hon. Friend the Member for Lanark (Dame Judith Hart), the Foreign Secretary said that
"new aid for the Falklands will be financed mainly from additional funds. No existing commitments will be cut to pay for it."—[Official Report, 8 December 1982; Vol. 33, c 864.]
Yesterday, in answer to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), the Minister for Overseas Development said that:
"The £31 million programme for the economic and social development of the Falkland Islands will be charged to the Overseas Aid Vote"—[Official Report, 21 December 1982; Vol. 34, c. 424.]
Will the overall Vote be cut, in that the £31 million will be taken from it to pay for development?
Mr. Onslow: If there is any ambiguity, I am anxious that it should be dealt with. Perhaps the hon. Gentleman will allow me to deal with that question specifically when I reply to the debate.
The function of the Falkland Islands development agency will be to manage revenue-earning projects within the new development programme, and to provide grants and loans for suitable projects. It will also have powers to buy and sell land. I shall touch on that subject again later.
The newly appointed development officer has recently taken up his post within the Falkland Islands Government. He is already examining projects that will eventually come under the Falkland Islands development agency. We shall be ready to support them directly, through the Falkland

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Islands Government, in the interim. Meanwhile, there are further proposals for the appointment of an agricultural officer and, later, a farm management officer.
The agency will have a budget for small development projects. For example, the fostering of the cottage industry skills that are recommended in Lord Shackleton's report will be financed from this source. The agency will also be responsible for work on expanding tourism, including the upgrading of existing tourist accommodation. I hope that it will be able to manage the proposed programme of grants and subsidies for agriculture. it will also handle negotiations with commercial interests who wish to invest in the islands. There may be some scope for joint venture activity.
I referred a moment ago to the purchase of land. As my right hon. Friend said in his statement, we have concluded that a gradual approach to land transfer will be best suited to the islands' present capacity. I know that Lord Shackleton's team gave a lot of thought to the best way to ensure that agricultural profits were re-invested in the islands. Their conclusion was that this could best be achieved by ensuring that the bulk of the land owned by absentees is transferred to local ownership and broken up into smaller units.
That is not necessarily either the best or the only way of dealing with the problem as Lord Shackleton identified it. It should, for instance, be possible to achieve the same objective by fiscal means. I also know from my own discussions on the islands that many of those who are involved in farming have real doubts about the proposals. The question is whether the islands include enough people who are ready to farm on their own to cope with a large-scale programme of land purchase and sub-division at this stage. Sub-division itself is not necessarily easy, as the quality of the land varies. Whereas it may be easy to find someone who would be happy to take on the best one-third of a large estate, that still leaves the problem of who will take on the worst two-thirds. The reason for not trying an experiment of that type is that one can see in advance that it is unlikely to succeed. [Interruption.] Of course, the experience of the right hon. Member for Battersea, North (Mr. Jay) was always different.
Mr. George Foulkes: Will the Minister give way?
Mr. Onslow: No, I shall not.
I was also told that there are some people who are ready to take up the challenge. Indeed, those who bought sub-divided plots from the earlier experiments at Green Patch and Roy Cove are, by all accounts, making a go of it, despite the recent difficulties. I was glad that my hon. Friend the Member for Dumfries (Sir H. Monro) was able to see that for himself. Nevertheless, it is too early to be sure about the success of those experiments. It is also too early to be sure how many people will wish to emigrate to the islands to try their hand at farming smaller units.
Meanwhile, there is evidence that many farm employees are apprehensive about the prospect of wholesale sub-division. It would drastically reduce the scope for the employment of wage earners in farming. Moreover, many of the present farm managers and employees also fear that sub-division would ruin the social benefits of the present pattern of settlement. It must also
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be recognised that some, and I stress some, of the absentee-owned farms—those of the Falkland Islands Company for example—are among the most efficient and productive on the islands.
Against that background, we have concluded that we should approach the issue by enabling the Falkland Islands Government to purchase land that may become available on the open market. The new development agency will be empowered to carry out that work, but if a suitable property becomes available before the agency is set up, and if we can agree on an acceptable price, it will of course be possible to go ahead forthwith.
Mr. Eric Ogden: What land is available now?
Mr. Onslow: The hon. Gentleman is not telling me anything that I do not know. Land-holding is only one aspect of Lord Shackleton's proposals for improvement in agriculture. He also recommends—we have accepted the recommendation—the introduction of a system of agricultural grants and subsidies. They should be geared both to helping farmers who may take on sub-divided units that become available and to encouraging existing farmers to improve their land, whether it be by reseeding, the introduction of electric fencing, shelter belts, improving breeding stock, or investing in new machinery or buildings.
The appointment of an agricultural officer is a priority so that he can get to work—helped, as necessary, by the expert staff of the grassland trials unit. The report also proposes a major expansion of the work of that unit. The name is somewhat misleading and we are discussing a more accurate title with the Falkland Islands Government and the members of the Shackleton team. The unit is essentially a research station that covers all aspects of Falklands agriculture. Steps are now in hand to recruit more specialist staff and to replace and expand the unit's equipment. We shall discuss with the Falkland Islands Government how best to provide more land for experimental work.
I shall now deal with fisheries. Discussions with the European investment bank about funding the next stage of work on the prospects for salmon ranching are now at an advanced stage. I expect further work to take place in the islands before the end of the Falkland summer season. I hope that commercial interests will examine the possibility of participating in that work as it develops. My right hon. Friend's announcement also covered the need for a survey of the prospects of development of shellfish and other inshore resources. We are ready to fund a practical study.
The Shackleton report also recommends that Government funds should be allocated for offshore trial fishing projects. We have taken the view that if these fisheries are worth developing, commercial companies will come forward with proposals. Foreign freezer-trawlers have fished from time to time in the waters around the Falklands and continue to do so. But hitherto there has been no concerted effort to develop fishery resources for the benefit of the islanders. I am pleased to say that we have now had approaches from a number of British and foreign firms interested in exploiting the offshore waters, which include self-financing proposals for trial fishing. Realistically, proper development of these resources can only be achieved when protected fisheries are exploited under licence, and the Shackleton report advocates the establishment of a 200-mile fisheries limit to achieve this.

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Even before the Argentine invasion, and leaving aside the problem of sovereignty claims over offshore waters, the major constraint on declaring such a limit was the high cost of establishing an effective policing arrangement, such as we have in British waters, when viewed against the level of potential benefits from licensing and conservation. The problem is obviously more difficult, given the current Argentine posture. Our forces in Falkland waters, while well able to carry out their military tasks within the 150-mile protection zone, are not suitable for conventional fisheries policing and protection duties because these would require the stationing of a large number of offshore patrol vessels with a boarding capability. To do this would deflect from the primary role of the frigates and destroyers deployed.
We shall therefore need to look carefully at other ways in which the need for fisheries surveillance and protection can be met to provide a commercially acceptable proposition before we contemplate the establishment of a fisheries limit, whether of 200 miles or 150 miles. I can assure the House that we shall continue to study this question and I hope that it will not be too long before we can come to some conclusions.
Lord Shackleton's team considered some aspects of the islands' infrastructure which are in need of urgent attention. I shall deal first with port facilities. Those who have visited the islands—I see some of them here today—will know that only one of the Port Stanley jetties is even adequately serviceable. There is clearly a requirement for a new multi-purpose jetty. The precise location and design needs to be based on a professional survey, and we are ready to engage consultants for this. I hope that they will be able to undertake the field work within the first three months of next year. Their studies can embrace the wider prospects for improving harbour facilities so that blueprints will exist should further commercial development seem justified. In the shorter term, I am confident that it will prove possible to proceed with a new jetty, and I hope that the construction phase can commence in the 1983–84 summer. We have estimated that this might cost up to £7 million.
Mr. Robert Banks: Will my hon. Friend give way?
Mr. Onslow: I am sorry. [Interruption.] I hope that my hon. Friend will not expect me to make an exception in his case, however many times he chants "Krill" from behind me. I apologise. I have taken over half an hour already. I still have a lot to say. I am sure that my hon. Friend, in his turn, will be able to put his point of view.
Mr. Foulkes: On a point of order, Mr. Deputy Speaker. Is it in accordance with the normal practice of the House for a Minister to read through a prepared text and to accept no points from hon. Members on either side? Is not that totally against the standard practice described in "Erskine May"? Although the Minister would have us believe that he knows a great deal more about the Falklands than Shackleton, does not the fact that he has to stick so carefully to the prepared text indicate otherwise?
Mr. Deputy Speaker (Mr Paul Dean): The House knows, I think, that any hon. Member can use copious notes. It is for the hon. Member who has the floor to decide whether or not he gives way. I suggest to the hon. Gentleman that he does not push his luck.
Mr. Onslow: Until you said that, Mr. Deputy Speaker, I was about to say that the House looks forward to hearing the hon. Gentleman. I am not now sure whether he is likely to catch your eye to make the speech that he has written himself, or in which he will be quoting someone else. I wish to continue to give the information that I believe the House has a right to expect and in a fairly precise form. It seems to me unreasonable to expect Ministers to come to the House and to improvise on the basis of their knowledge when the House wants, needs, and will have, as a record, a reasoned, clear and coherent statement. I hope that I have tried to give the House just that.
The Shackleton team also envisaged work on an improved road network. I have spoken earlier about remedial work around Stanley. Beyond that, we expect the islands' public works department to continue work on the partially constructed road from Stanley to Darwin. In the light of progress, we shall be prepared to consider engaging a contractor to complete it. Otherwise, we are not convinced that the case for a much more elaborate road network is yet made. There seems little prospect of enough traffic to justify the investment, while maintenance costs would be a heavy burden on the Falkland Islands Government. I am sure that some hon. Members have seen for themselves the state to which the existing stretch of the Darwin-Stanley road has been reduced by the severe traffic on it. Before there is any commitment to expenditure on additional roads, there needs to be more work on the other possibilities for communications between the main settlements by sea and in particular by air.
The programme outlined by my right hon. Friend provides for work on public utilities, including the water supply, power supplies and sewage system in Port Stanley and the telephone system across the islands. These were not specifically in Lord Shackleton's recommendations, although he did press for further work on alternative sources of energy. We need to consider the islands' needs for the next 15 years or so taking account of decisions on the location of the garrison and the new airfield, both of which may be customers for facilities developed by the Falkland Islands Government. Both are matters primarily for decision by the Ministry of Defence.
As a result; of this development programme and the impact of the garrison on the island economy there will obviously be a need for more skilled and enterprising men and women on the islands to respond to a wide variety of opportunities. At present, practical considerations, in particular the severe shortage of accommodation in Stanley, impose an inevitable constraint on immigration. As the new housing becomes available for occupation, it will be allocated by the Falkland Islands Government according to the priorities they are drawing up. Meanwhile, a large number of applications for immigration have been received.
All the applicants have been asked to complete a detailed questionnaire. More than 280 of these have so far been returned. The Falkland Islands Government are responsible for immigration into the islands. They hope to establish an office in London early next year and this will have as a first priority the task of identifying suitable settlers from among the many who have applied.
My right hon. Friend chose his words carefully on 8 December when he said that the Government were ready to support action by the Falklands Government in specific fields. The future of the Falkland Islands depends not only on the commitment of Her Majesty's Government to their

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economic development, and their physical security, of which there can be no doubt. It depends, too, upon the commitment of existing businesses, such as the Falkland Islands Company, and new enterprises, such as the Standard Chartered Bank. Here, I would say that I have no doubt of the extent to which the management of the Falkland Islands Company is committed to playing a constructive role in the development of the islands' economy.
But money is not all. The success of our plans depends, above all, on the commitment of the islanders themselves, in their Government and at large, in Port Stanley and in the Camp, to join in building a secure future for themselves and their children. I need hardly remind the House what resolve the islanders have shown in the past. There may be occasional disagreements about priorities, or differences of opinion about individual ideas in the years ahead. I believe, however, that we are all agreed about the aim we share. Even if there is much hard work still to be done, I am confident that, together, we can achieve it.
5.28 pm
Mr. Clinton Davis: The whole House will appreciate the Minister's wide-ranging speech. It is regrettable, however, that the hon. Gentleman did not give way during his remarks to anyone other than myself. There are a number of points that trouble hon. Members, some of whom may be fortunate enough to catch your eye, Mr. Deputy Speaker, and others who may not. In a debate of this kind, some interrogation of the Minister can be helpful. I do not wish to be too uncharitable at the beginning of the debate. The Minister did the House a service in ranging over many points. He has emphasised the work of rehabilitation undertaken since the fighting. All hon. Members will wish to pay tribute to those concerned in that work—the Services, various arms of Government here, and not least the islanders themselves. All have undertaken these tasks with great determination and dedication, and deserve the congratulations of the House.
I join the Minister in his tribute to Lord Shackleton and his colleagues for their unanimous report, a work of great scholarship which presents many clear, positive and imaginative proposals. The Government have been inclined to accept only some of those proposals, and I will say something about them later on.
After their failures, blunders and inconsistencies during the past year, which contributed substantially to the crisis from which we have emerged, it is clear that the Government must play a significant role in building a better future for the Falkland Islanders. That will require a fresh and radical approach, and in that respect the Government have to a substantial extent been found wanting.
The House will have been concerned to note that the Minister has reserved for his winding-up speech my point about the funding of the programme, because an apparent inconsistency needs to be cleared up. On 8 December, replying to my right hon. Friend the Member for Lanark (Dame Judith Hart), the Foreign Secretary said:
"the new aid for the Falklands will be financed mainly from additional funds. No existing commitments will be cut to pay for it."—[Official Report, 8 December 1982; Vol. 33, c. 864.]
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However, when my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) asked the Minister for Overseas Development to which Vote the £31 million reconstruction programme would be charged, the right hon. Gentleman replied:
"The £31 million programme for the economic and social development of the Falklands Islands will be charged to the Overseas Aid Vote".—[Official Report, 21 December 1982; Vol. 34, c. 424.]
I sense that my hon. Friend would have liked to question the Minister further about that.
It is not entirely satisfactory that a point of such fundamentally important principle should be left to the end of the debate. The Minister will probably have about a quarter of an hour in which to wind up. He may find it very difficult to give way then, and he may find it very convenient not to give way in order to answer a point which will undoubtedly trouble many of my hon. Friends.
Mr. Onslow: I shall explain the situation to the hon. Gentleman in precise terms. The new aid for the Falklands will be financed in the main from additional funds to be added to the public expenditure allocation for the aid programme, with the balance found from the unallocated portion of the aid programme. As my right hon. Friend made clear on 8 December, no existing commitments will be cut to pay for the aid. Estimates placed before the House for the Overseas Aid Vote for future years will reflect these plans, and, if necessary, supplementary provision will be sought for the present year.
Mr. Davis: That explanation is better than nothing, but it will worry many of my hon. Friends. The funds for the overseas aid programme are meagre enough; we wonder about those "unallocated" funds. I hope that the relevant Select Committee will want to investigate this matter further. I am not entirely satisfied with the Minister's explanation, although in fairness one must reflect upon what he has said.
Mr. Frank Hooley: The Minister's reply is not consistent with what the Secretary of State said. The Secretary of State spoke of additional funds. The "unallocated" funds to which the Minister of State referred are not additional to the aid programme. They are funds within the aid programme that happen not to have been apportioned to any particular project, so there is a clear contradiction between the assurance given by the Secretary of State and the words of the Minister of State today.
Mr. Davis: My hon. Friend is absolutely right. The Minister will have to be rather more categorical in winding up than he was just now to clear up the continuing ambiguities. The Minister's speech was largely—and significantly—lacking in any general survey of the Falklands in wider international terms. The problems of the Falkland Islands cannot be considered in a vacuum.
As I perceived on my recent visit to Central America with the hon. Member for Sevenoaks (Mr. Wolfson), throughout Latin and Central America there is considerable support in principle for the Argentine case for sovereignty, although it is tempered by disapproval of the Argentine Government, the stupidity of their actions and their resort to force. There is also far deeper resentment of the United States' actions than of our own. Most Latin Americans regard it as perfidious in the extreme for the United States to have sided with us against Argentina and

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hence, they feel, against Latin America. The recent and often clumsy attempts by the United States to mend its fences in this respect, although they have certainly upset the Prime Minister, should not, therefore, have been unexpected.
A further direct consequence of the Falklands war which cannot be ignored is the dangerous arms race that has ensued since the war ended, with its inevitable importance in its effect on the proposals outlined by the Minister. In part, although it is by no means the whole story, this may be based on the belief of some Latin American countries that what happened to Argentina must not happen to them. It was cogently put to me yesterday by my hon. Friend the Member for Newham, South (Mr. Spearing), who has had many discussions on this at the United Nations and elsewhere, that there are simply too many avid buyers of arms and too many avid purveyors of arms in the area.
When one considers the scale of deprivation that blights the lives of so many people in that subcontinent, who desperately yearn for clean water supplies, decent housing, protection from disease and help in their desperate struggle against hunger, the arms race becomes even more obscene. I believe that the Government should—a Labour Government certainly would—use every possible sinew to stop this. Although the likelihood of an imminent invasion of the Falklands by Argentina is remote, Argentina's efforts to restock its depleted supplies and the corresponding threat to and continuing harassment of the Falklands can undoubtedly impair the efforts that we all wish to see made to bring new hope to the islanders.
Accordingly, I believe that it is incumbent on the Government to do their best to defuse the tension and to be seen to be prepared to examine political solutions capable of bringing the islanders far greater security than we can ever offer in isolation—a security backed by international acceptance, perhaps through some new form of United Nations trusteeship. I do not wish to spell that out now, but the Government must remain open to new ideas to reduce the continuing tension.
If we are thought to be too rigid and unyielding, I fear that we shall continue to lose support from our friends who, during the crisis, portrayed remarkable solidarity with us. There is a real danger, as we saw following the debate on 9 December in the General Assembly of the United Nations, that some of our friends are losing patience with us. Perhaps it is because they have felt that the Government seem to be adopting too rigid a posture, which is unacceptable to them, and in the long term bad advice for us.
There is a need for the Government to consider one of the solutions that Lord Shackleton has adumbrated. I do no more than mention it in passing today, not out of disrespect to the proposal but because I, like the Minister, wish to deal with some of the specifics. Lord Shackleton has been at pains for many years to say that there is a need for the British Government to look for wider solutions, perhaps along the lines of internationalisation of the Antarctic, where there is already an international regime. That is the one place in which the cold war, as he put it, is not intruding.
Another problem is the schizophrenia of the Government, which has been reflected particularly in the past few days. During the crisis, the Prime Minister vigorously and rightly, albeit somewhat tardily, denounced the arbitrary arrests, disappearances, torture and
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murders in Argentina. The hon. Member for Essex, South-East (Sir B. Braine) has played a notable part in denouncing these over the years, and I have paid tribute to him before. Many of my hon. Friends had been denouncing that tyranny for rather a long time.
Now, in a desperate search for friends, the Prime Minister seeks an accommodation with Chile, where the record of arbitrary arrests, disappearances, torture and murders is at least as bad as and probably worse than that in Argentina. She should explain this schizophrenic approach.
A few weeks ago the Prime Minister was shrill in her denunciation of the French for resuming Exocet sales to Argentina. However, last Monday she was prepared to accept, no doubt for the best of pragmatic reasons, British banking support for Argentina. She asserted, somewhat naively:
"These loans are not for arms purchase, but are to help Argentina to continue paying its debts".—[Official Report, 20 December 1982; Vol. 34, c. 352.]—
as though an economically strengthened Argentina is not much better able to increase its supplies of weapons. That also requires some explanation from the Minister. All this does not help to sustain the credibility of this country in its search for a lasting peace.
From that background I turn to the specific conclusions of the Shackleton report and the proposals that it offers. One of the most significant conclusions reached by Lord Shackleton is that, since the period when the information was garnered for the first report, the economy of the Falkland Islands has seriously declined. It is appreciated that there has been a world recession that has made a serious impact on the Falkland Islands, as on virtually every other country. This has contributed to the fall in the price of wool and to the fall in wool output, but that is not the whole story either.
There has been continuing depopulation of the Falklands and there is a grave danger that within five years there could be an economic collapse. An important assumption on which the report is based can be seen in paragraph 4.1 of section 2, which says:
"we presume that as a planning objective, a Falklands community with 1,000 or less, defended by a garrison of 3,000 or more, surviving economically principally because of income from stamps, is unacceptable."
In part, and only in part, have the Government grasped the reality of that statement. The purpose of Shackleton is to produce positive recommendations to exclude that gloomy prospect.
The Minister disputed the assertion in the report that regular civil air communications are an absolute priority. There are great difficulties in establishing any long-term civil air communications, particularly when one has regard to the need to avoid Argentine air space and Argentine air traffic control. However, I cannot understand how the Minister can dispute that proposition for the long term.
Civil air communications, to be viable, must have a link with the mainland. We want to know what the Government's long-term thinking is, what are the possibilities and who is likely to grant these links. Will they be with Montevideo, Rio de Janeiro, Punta Arenas? What overtures, if any, have been made by the Government and what has been the response? It is not enough simply to say that air communications are not necessary and are something we can do without because we have good

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shipping links. That is not the answer, because the survival of the Falkland Islands depends substantially on effective communications.
The Minister adopted a very tentative view about the problem of land reform. It is particularly regrettable that the Government's response has been, at the very least, to side-step the most critical of the recommendations in the Shackleton report—or are they simply ignoring it? The point was made by the Shackleton report over and over again—this is a unanimous conclusion and one that has been accepted by the Falkland Islands Council—that the very survival of the islands depends upon tackling the problem, yet the Government seek to avert it.
My hon. Friend the Member for Hamilton (Mr. Robertson) and I have had the advantage of seeing a submission that has been made to Sir Rex Hunt by Mr. Colin Smith, who is a shareholder of two and a director of two more medium-sized firms on the islands. He is a marketing agent for all the independent farms and has a lifetime's experience in sheep farming.
Mr. Smith has pointed out very cogently how the problem of a declining and ageing population, especially in the Camp, has led to a crisis on many large farms, with a labour force retiring and not being replaced by young people in similar numbers. It is a problem aggravated by the need for more labour to repair the war damage about which the Minister was talking, and by the drift of people into providing services for the garrison and other developments on the islands.
All this represents the single greatest reason for land reform. There is no alternative to subdividing the land. Lord Shackleton expressed that point of view very clearly when he was cross-examined by the Select Committee. In his view, there is no alternative. It is necessary to provide far greater incentives for people to stay, buy and husband land and also to attract newcomers than the Minister has begun to adumbrate to the House today.
The conclusion reached by Lord Shackleton, supported by Colin Smith, is that, to halt and reverse the decline of population, it is essential that there should be created a large number of family farm units owned freehold or by tenancies by families who are committed to the land that they own and the future of the islands in which they live. The Government reject that. It is odd, because I always thought that they were in favour of that sort of thing for council housing in this country. They will have to explain that inconsistency, too.
Lord Shackleton recognises that there is an urgent need to attract young skilled people from the United Kingdom, Australia and New Zealand who with financial help can respond effectively to the new challenges presented in the Falkland Islands. However, the Government shirk this challenge. It requires a radical approach to deal with the almost feudal system that prevails in the Falkland Islands. There can be little doubt that the profit system as undertaken by the Falkland Islands Company has been pretty unprofitable to most people other than the Falkland Islands Company. Lord Shackleton is absolutely right on this matter. After all, he has considered the matter in two reports. He has not found it necessary to budge from the initial conclusions that he reached in the first report. He believes that the ubiquitous and pervasive influence of the Falkland Islands Company has to be tackled urgently and decisively.
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The reasons that have been cogently and explicitly stated in the report can be summed up as follows. Although the company over the years has played a significant role in developing the economy of the Falkland Islands, what are the basic facts? The company owns 43 per cent. of the land—an excessive concentration of ownership by any standards. It employs one-third of the work force. It owns about half of the 600,000 sheep on the islands. It provides all the shipping to the Falkland Islands. It owns the main retail outlet. It is a monopoly that would offend, at least until today, virtually every tenet of the Monopolies and Mergers Commission in the United Kingdom, although any recommendation might be overturned by the Minister for Trade. In addition, the company imposes grotesquely antiquated conditions of employment. The Guardian of 22 July referred to some aspects of that. It stated:
"islanders who have accepted the FIC's average salary of £3,300 per annum have signed a contract in which they pledged themselves to be placed 'under the orders of the company's general or Stanley managers or their deputies for the time being and to faithfully and diligently perform whatever duties during whatever hours as shall be assigned to them.'"
That is standard stuff in the draft of leases or service contracts. Now I come to the reality. The Guardian reports:
"Further, the FIC employee has also agreed that '… if his wife or any member of his family shall be guilty of any act which shall be prejudicial to the interests of the company …' he shall be sacked. And to complete the picture the probability is that the employee, especially if he works on camp … will have to shop at a store which is owned by the FIC and whose shelves are stocked by the ship which visits the Falklands four times a year and is chartered—inevitably—by the FIC."
Mr. Onslow: The hon. Gentleman refers to the malign influence of the FIC, but I wonder how he reconciles it with the figures on page 122 of the Shackleton report. They show that the total number of farm employees in the islands as a whole decreased by 8 per cent. from 1975 to 1981. During the same period, the total number of employees on the FIC's farms increased by 8 per cent.
Mr. Davis: The Minister is being unduly naive. One of the great things about the FIC is that it has good selectors of land, and it acquires it. Coupled with that there have been few incentives to the smaller farmers to cultivate the land and husband it. That is part of the explanation of the Minister's question.
Why does not the Minister, while he is on that point, quote something about the repatriation of profits? Undoubtedly the FIC has taken more from the islands than it has put in. Private landlords invested only £700,000 and repatriated profits of £1·1 million, as is cited in the report. Of course, it must be more attractive to repatriate money for absentee landlords and overseas disinterested investors than to invest in the precarious business of farming in the Falkland Islands. I remember something that was said in the bank rate tribunal, that it may not necessarily be patriotic—
Mr. Denis Healey: "It may be derogatory to sterling, but it makes good sense to me."
Mr. Davis: My right hon. Friend's memory is more effective than mine.
The serious point about this matter is that there is a terrible drain on the small population. It is unacceptable that in the new Falklands that position should be allowed to endure and the FIC should be permitted to benefit

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unduly from the enhanced land values that will flow from the improved infrastructure on the islands, which the Government are providing with public money.
As was reported in The Observer not long ago, one of the only islanders to be expelled by the invaders, Mr. Bill Luxton, who owns 150,000 acres of sheep grazing and is happy to adopt the Shackleton proposals, has said:
"The end was in sight for the old life anyway."
That must be true. New opportunities need to be created. Shackleton calls for the subdivision of land—not for the break-up of all the big farms, but for the break-up of those held by the FIC.
There is evidence, which the Minister only grudgingly accepted, that subdivision leads to a substantial increase in production and productivity. We would dispute most strongly the assertions by the Minister that such policies would not be consonant with the wishes of the populace. There is ample evidence from the findings of Lord Shackleton. The Shackleton team saw many people. That matter was discussed with many people on the islands.
Mr. Onslow: When was that?
Mr. Davis: In the period leading up to the report. I am happy to say that I can quote from the evidence that Lord Shackleton gave on Monday 6 December to the Select Committee on Foreign Affairs. He said:
"We talked to a lot of people, a lot of shepherds and others, and said, 'Would you like to run your own farm? Do you think you could?' We got surprisingly positive answers. But the extent to which they are able, or will be able, to branch out on their own, if I may say so, brings up the whole question of the ownership of the farms and the speed with which it is done, the education system, the training and these sorts of things. We were confident enough to make a recommendation."
That is the evidence of Lord Shackleton. I happen to prefer it in that respect to that of the Minister. There is evidence not only from Lord Shackleton. Mr. Gavin Young carried out intensive investigations for The Observer. He said:
"I also found young and middle-aged farmworkers in favour of land reform—many want to buy and farm their own land. So are people in Stanley in favour of it. So is Sir Rex Hunt, the Civil Commissioner."
I would have quoted Mr. Terry Peck in The Guardian on 22 July if I had remembered to bring the quotation with me.
The Opposition believe that those are correct assessments of the situation. We believe that the company's cosmetic proposals to lease some of its small islands or to share in the farming of some of the poorest and least manageable areas while remaining in a position of dominance of the agriculture and economy in the Falklands are unacceptable. The Government's timidity is unacceptable. Their attitude towards the Falkland Islands Company reminds me of a telling phrase of Nye Bevan about another Government when he said that their approach was like that of an old man approaching a young bride—fascinated, sluggish and apprehensive. On this issue it might be said that the Government seem to have lost the will to be apathetic.
Do the Government believe that the company's activities represent an incentive to the present population? Does it provide sufficient inducement for skilled workers from overseas? Are the meagre measures which are postulated by the Government likely to stem the population loss and solve the islands' economic problems? Unfortunately, I believe that the answer is likely to be in the negative. The truth, I suspect, is that the Tory
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Government are ideologically incapable of taking the radical action required. it was well summed up in The Times of 14 September:
"Men died in their hundreds, ships were sunk, and aircraft lost, not to protect a company dividend, but to rescue the way of life of a community which had been violated to the depths of its spirit."
That response was the right one rather than the one that we heard from the Minister today.
6.1 pm
Mr. Julian Amery: Lord Shackleton and I were lucky enough to represent the ancient and famous borough of Preston together for many years. Despite obvious party differences, I came to have the greatest respect for his integirity, wisdom and common sense.
Mr. Foulkes: Here comes the Exocet.
Mr. Amery: I read Lord Shackleton' s first and second reports with great respect. I shall elaborate on them later.
There is one point only of the speech of the hon. Member for Hackney, Central (Mr. Davis) that I want to take up. He spoke of his visit to Latin America and the need to improve our relations with those countries. Almost in the same breath, he talked about Chile's disregard for human rights. We want to improve air communications with the mainland of South America, and the Argentines are still reluctant on that point. Chile is the only other country that it is possible to consider in this respect and we had better make up our minds whether the economic or the human rights consideration is to take the upper hand.
I want to congratulate the hon. Member for Hackney, Central for not speaking against the cost of the Shackleton proposals, unlike a large number of newspapers stretching from The Guardian to The Financial Times. The House has to face their widespread criticism, although the hon. Gentleman was careful not to give expression to it. Bernard Shaw said:
"How incapable must one be of learning from experience."
By God, he was right. The basic lesson to be learnt from the Falkland crisis is the cost of not implementing the Shackleton proposals mark 1. If we had built the airfield that he recommended, which would have cost about £9 million in those days, I do not believe that there would have been an invasion. If we had implemented other parts of his plan, private enterprise would have had confidence in the future of the Falkland Islands.
The hon. Gentleman rightly raised the subject of land reform. I am attracted by the idea, but one of the reasons why the Falkland Islands company repatriated so great a proportion of its profits was that successive British Governments, both Labour and Conservative, left the future sovereignty of the islands, and thus the status of the company, in doubt. If one wants the company to re-invest in the island it must be confident that the existing status will continue. The same is true of new investors.
A long time ago, when I was at the Foreign Office, Lord Greenwood of Rossendale—Tony Greenwood, a friend of many of us—came to see me on behalf of an oil company of which he was a director. He wanted a licence to prospect. He was deterred by the uncertainty of the Foreign Office as to the islands' future status. Although I encouraged him to go ahead it was understandable that his co-directors did not want to.
If we had implemented Shackleton mark 1, the effect upon the Argentines could have been decisive. If they had

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seen that we were determined to develop this little archipelago I believe that they would have hesitated to attack us. It emerges clearly from General Galtieri's interview with the Italian lady, Miss Orlanda Forlucci, that he did not believe that we would try to take the islands back. The expenditure proposed in Shackleton mark 1 would have been about 1 or 2 per cent. of what we had to spend to take the islands back. That is the lesson that should be learnt by both sides of the House.
It is extraordinary how we could forget that a failure to spend money on defence led us into the First and Second World Wars. Both parties tripped up, but a little more expenditure on defence before 1914 and 1939 could have prevented the disasters that came later.
Some of the critics of the Shackleton mark 2 proposals, notably in the Financial Times but in other journals as well, have asked whether it is worth spending that amount of money on these little islands. That is an eighteenth century old colonialistic view. Do we judge the amount of money we spend on a bit of British territory by what we get out of it? That is not the line we take with the Outer Hebrides or other adjuncts of the British Isles. The Falklands are British islands. They may be 8,000 miles away, but it is a rather flat-earth philosophy to say that because of that we must regard them as foreign. They are not. They are stocked by British people. They have been British for a long time. Why should we look on them as foreign in an age when the world has shrunk? Eight thousand miles is not so important, as the Ministry of Defence was able to show.
Mr. Tam Dalyell: The right hon. Gentleman mentioned the Outer Hebrides. Does he recollect that the Labour candidate in the Outer Hebrides, Brian Wilson, sent the Prime Minister a telegram when they heard of the resources that were being made available to the Falkland Islands saying "Send Shackleton here"? There are many areas in Scotland, the north of England, Wales and elsewhere where people are desperate for resources of one-tenth of this order.
Mr. Clinton Davis: Hackney and Hamilton.
Mr. Dalyell: Yes, Hackney and Hamilton, too. People are desperate for some kind of investment when we have such unemployment. It a ludicrous position.
Mr. Amery: Lord Shackleton is no longer in the Gallery, but I am sure that the point will not be lost upon him.
When we talk about whether it is worth spending that kind of money on the islands, we must remember that we are under an obligation to do so because they are British islands.
I was partly responsible for them as Under-Secretary of State for the Colonies and later at the Foreign Office. I believe that we owe them a debt of reparation because we failed to defend them, for various reasons that will no doubt appear in the Franks report. Because of our failure to defend them, we are under a greater obligation to repair the neglect. Of course we fought to liberate the Falkland Islands but that does not mean that we should return to the previous state of affairs. I hope that we have it in our hearts to make the Falkland Islands a better place to live in.
Self-interest also plays a part. There is great wealth to be developed in the South Atlantic. In addition to fishing,
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there may be oil and minerals in the sea bed. We should seize the opportunity, particularly during a world recession, and try to create new wealth in that part of the world. The Shackleton plan mark 2 would give the private investor the confidence—as long as the Government find it possible to accept the proposed infrastructure—to develop those resources. That would show Argentina that it may be worth while co-operating with us. However, we should make it clear that we are there to stay.
I should like to look beyond the interests of the islands alone. I do not believe much in handing over our responsibilities to the United Nations. It is not a responsible body for that purpose. However, to be realistic, the Falkland Islands could be the gateway to the Antarctic, just as Aberdeen is the gateway to the North Sea. Brandfield, Ross, Scott and, of course, Lord Shackleton's father were among the pioneers of the first generation. The "Discovery" team then carried out investigations. Today, the British Antarctic Survey is there. We have extensive territorial claims to the Antarctic continent, which have been marked out since 1907 or 1908. We do not know exactly what the resources are, but they may be great. Like the Soviet oil under the permafrost, they will be difficult to exploit. However, in an age in which people talk about colonising space and men land on the moon, we should not shrink from that challenge, although it would be expensive.
If multinational companies are to invest capital in trying to exploit the Antarctic's resources they must be sure that they have a good title to any concessions. In the summer, a conference took place in New Zealand on the future of the Antarctic treaty, which could expire after 1991. It is important to avoid the errors made in the treaty about the law of the sea and about the mineral resources of the sea bed. I am not offering a blueprint for action, but I can see an opportunity, and the Falkland Islands could be the hinge to it.
In my experience of diplomacy, a conflict can be settled in two ways. It is possible to concede the other side's point. Indeed, that is what my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley)—now Financial Secretary to the Treasury—tried to do in his ill-fated initiative over the Falklands in 1980. Alternatively, one can try to envelop the dispute within a wider framework. That is what has happened with the EC. We no longer hear about German claims to Alsace-Lorraine or about Italian claims to Corsica, Savoy and Nice. Those countries are both members of the same Community and Europe has enveloped or reconciled the claims within that wider framework.
Would that be possible in the South Atlantic? I cannot see why our interests and the claims of Argentina and Chile could not be reconciled in the following way. We have staked out claims in the Antarctic, and so have Chile and Argentina. The claims overlap each other. Could we not foresee a joint development based on our territorial claims, and welcome other countries to participate in the exploitation of the resources of the Antarctic? We would guarantee their legal rights. That applies in particular to the riparian countries on either side of the Atlantic and extends to Uruguay, Brazil, South Africa and, perhaps, Australia and New Zealand, which also have extensive claims in the Antarctic. Could we not all co-operate to ensure the security of the sea and air routes in the region?
Instead of harking back, as so many Opposition Members do, to trying to settle the sovereignty of the

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Falkland Islands, should we not look towards a broader horizon and think bigger? Our presence in the South Atlantic derives not only from the Falkland Islands, and their dependencies, and our claims in the Antarctic, but from St. Helena, Tristan da Cunha and Ascension Island. Surely we should establish that we have an important stake there. If we have rights, then we also have duties and responsibilities. Perhaps we could be the catalyst in the creation of a new dispensation. I do not say a new NATO, but I suggest a South Atlantic or an Antarctic community including all those with interests in the area. But the first step must be to implement a development plan for the Falklands. That is the launching point, the Aberdeen of the North Sea. Perhaps we are on our way to doing that. I pay a warm tribute to Lord Shackleton for his two reports and to the Government, because they are the first to try to do something serious about the problem.
6.18 pm
Mr. George Foulkes: I am glad that I have caught your eye, Mr. Deputy Speaker, just as I was glad to catch Mr. Speaker's eye in the debate on 3 April 1982, when I spoke against sending the task force. I do not regret anything that I said then, although perhaps I could have put my view more forcefully and convinced more hon. Members of the lack of wisdom behind that decision.
Although many people were interested in, or to use the Prime Minister's words, "thrilled" by, the experience of war, few people, including hon. Members, the press, and particularly the newspaper that "backed our boys" seem concerned now about the future of the islanders. Fewer people seem able and willing to discuss the matter.
It is disappointing to see such a lukewarm and pathetic response by the Government to Lord Shackleton's excellent report. The Minister paid tribute to Lord Shackleton and said that he had done a good job, and then proceeded to reject the two most important parts of the report. As my hon. Friend the Member for Hackney, Central (Mr. Davis) said, the two key recommendations of the report that are essential to the future prosperity of the Falkland Islanders are the provision of a civil air route and the transfer of land ownership. Lord Shackleton confirmed the importance of those recommendations when he gave some helpful evidence to the Select Committee on Foreign Affairs. In relation to a civil air link, Lord Shackleton said:
"I do not see it in the immediate future but if there is no prospect"
of a civil air link
"we take a very gloomy view indeed"
of the future prosperity of the Falkland Islands.
The Minister, having paid great compliments to Lord Shackleton, then dismissed one of his key recommendations—the civil air link—and said that it is not so important after all because some ships are going. Lord Shackleton and his team conducted two careful investigations. With all their knowledge and experience, they said that the establishment of a civil air link was an "absolute priority". One could hardly express a recommendation more strongly. It is no use the Minister saying that his wisdom is far greater than that of the Shackleton Committee and its advisers. That does not convince me or many other hon. Members.
Lord Shackleton was in no doubt about the importance of his recommendation of the transfer of land. He told the Select Committee:
"It certainly is a key recommendation."
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About the Government, Lord Shackleton said:
"Unless they can produce some other recommendations which will have the same effect, then I would regard it as axiomatic … that the prospects of the Falklands would be a good deal less favourable than if they adopt these."
Lord Shackleton made it clear several times to the Select Committee that the transfer of land ownership was essential. Again, the Minister dismissed the recommendation and said that there was no need to consider it. Just like the Minister for Trade, he overrules the experts who have taken the evidence, done the work and considered the matter and says that the recommendation is not important.
The sale of council houses, where a different principle applies, was mentioned earlier in the debate. One wonders whether political dogma causes the Minister to liken the Falkland Islands Development Agency to the Highlands and Islands Development Board, which was described by a former Conservative Secretary of State as "pure Socialism". Is it not political dogma that causes the Government to reject the recommendations? It will be a very sad prospect for the islanders' prosperity if the recommendations are not accepted.
Mr. Nigel Spearing: Does my hon. Friend agree that one factor that has not yet been mentioned is the distinction between vesting and the break-up of larger farms into smaller units? Lord Shackleton's report was concerned about the effects of the transfer of profits; therefore, vesting is of crucial importance. Lord Shackleton advocated the break-up of farms not necessarily into very small units, but into matched units to meet the natural conditions and the abilities of those concerned.
Mr. Foulkes: As usual, my hon. Friend is quite right and I need not elaborate on what he said. Only four of the 36 farms on the islands are owner-occupied. Lord Shackleton put forward a good plan for the setting up of an agency to purchase the land and to transfer it to private ownership. The Minister should not regard that as "pure Socialism". If we give the islanders ownership of the land it will give them a stake in the future of the islands. I plead with the Government to reconsider their rejection of Lord Shackleton's second key recommendation.
My hon. Friend the Member for Hackney, Central also mentioned the outflow of money from the islands. That was one reason why Lord Shackleton suggested the transfer of ownership. A memorandum that we received in the Select Committee stated that, between 1970 and 1973, the farming companies returned 59 per cent. of after-tax profits to absentee shareholders in the United Kingdom. Eighty-six per cent. of the money retained was invested in United Kingdom and United States shares. Lord Shackleton said in evidence that he saw the transfer of ownership of land as vital and that unless the Government could come up with an alternative he saw a gloomy future for the islands.
The Minister said that the alternatives were fiscal methods, but he did not give us the details of those fiscal methods. I hope that he will do so when he replies. For example, is he considering the possibility of the Falklands Islands Government freezing all assets on the islands, refusing to authorise the transfer of funds out and forcing companies to reinvest in the islands? That would be possible. At present, the Falkland Islands treasury and the Falkland Islands Company act as bankers and transfer funds by cable. Is the Minister suggesting a lump sum tax

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on global profits in the Falklands Islands? Before the war, the profits of the Coalite Group in the year up to September 1982 were £25 million. If that substantial sum were reinvested in the islands, it would greatly help to build a secure future.
Mr. Ogden: I am no spokesman for Coalite, but there is a difference between Coalite's profits and the profits of the Falklands Islands Company, which are certainly not £25 million.
Mr. Foulkes: I accept that correction, but a substantial amount of money—
Sir Bernard Braine: Where will it come from?
Mr. Foulkes: The Minister read from a prepared text, while I have only a few notes. The Minister had plenty of notice to answer the question about the origin of the money, so the hon. Member for Essex, South-East (Sir B. Braine) cannot expect me to answer that off the top of my head. I shall come to the hon. Gentleman in a moment.
The right hon. Member for Brighton, Pavilion (Mr. Amery) has gone now, but he talked in glowing terms about the future economic prospects of the Falkland Islands. If he reads the Shackleton report carefully, he will find that there is not as much optimism as he seems to imagine. The prospect of krill fishing is still very speculative. The Minister has already said that he is waiting for commercial fishermen to come forward, but why did they not come forward before? Will they come forward when there is still doubt about the future political stability of that area?
As to deep sea fishing, the Polish boats in the area do not need to land on the Falkland Islands. They are long-distance fishing boats and can return to their home ports. Alginate was mentioned in the report but was dismissed as not being a great possibility. The right hon. Member for Pavilion mentioned oil. My hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) and others on the Select Committee will recall the dramatic evidence about the great difficulties in prospecting for oil in the South Atlantic because of icebergs and other natural hazards, and because of the political instability in the area. There is no sign of any real interest by oil companies in the area. There is a small amount of tourism ranging from a limited number of naturalists to the development of philately. The important area is agriculture.
Mr. Shersby: I thought I heard the hon. Gentleman say that there is no evidence of interest by oil companies in exploring the area. I draw his attention to the fact that before the conflict took place, the Argentine Government advertised oil concessions straddling the median line between Argentina and the Falkland Islands. Those oil concessions were of considerable interest to the oil companies, but were not taken up because of the protests by the British Government.
Mr. Foulkes: That was not the information given to the Committee, which was told that although the shelf around the mainland had been exploited, there was no great interest in the area around the islands because of natural hazards. In addition, political instability continues.
Mr. Dalyell: There is the small problem of icebergs.
Mr. Foulkes: I did mention icebergs. The main area of development is agriculture, which again depends on the transfer of ownership. However, the Minister has rejected the recommendations.
I have dealt with the economic future of the islands. I want to deal with their political future. It is necessary to explore this in detail. The Government should begin to swallow their pride and start discussions, either directly or through a third party, with Argentina. We make major loans to Argentina and supply Rolls Royce engines for West German ships that are sold to Argentina. It is crazy that we cannot discuss directly with Argentina the future of the islands to establish political stability in the area, thereby ensuring a secure future. That is by far the most important matter.
The hon. Member for Essex, South-East has a stubbornness and determination that is commendable on many occasions, but such stubbornness and determination in refusing to accept any kind of discussion, or any alternative to the proposition that the islands remain British in perpetuity, while meant to be helpful to the islanders, does them a great deal of harm. He led them to believe that Britain could for ever more continue to garrison, defend, look after, support and nurture these islands. That is not a realistic possibility. It never has been and never will be. We must come to that conclusion.
Mr. Amery rose—
Mr. Foulkes: I mentioned the right hon. Member earlier, but he was not present. I have given way rather a lot and I would rather try to come to a conclusion.
We must take account of the islanders' views. There must not be a veto. The islanders cannot have an unlimited demand on the money of United Kingdom taxpayers in perpetuity. That is not possible. I am keen to discover what the islanders think. The Foreign Office said that it was relying on a questionnaire circulated by the Falkland Islands Council. I have a copy of that questionnaire, which among other things says:
"Should the Falklands be split into constituencies? Should candidates live in their constituencies? Should junior civil servants be allowed to stand? How much should full-time members be paid? How often should public meetings of Council be held?"
That is very interesting, but the Foreign Office is not addressing itself to the fundamental political problem of the future of the islands.
We must ask the islanders: "If the present United Kingdom Government, or a future one, are not prepared to pay hundreds of millions of pounds a year to maintain a fortress Falklands in perpetuity, what alternative are you willing to consider?" If we do not start talking to them along those lines, we shall lead them up the garden path up which the hon. Member for Essex, South-East and others have led them again and again.
I make two positive suggestions. We should ask the Government to use the good offices of some South American Governments who have sway with Argentina and with whom we have good relations, such as Peru, Mexico, Brazil and Venezuela, to try to begin exploratory discussions. We should re-examine parts of the Peruvian plan, which were accepted by many people but were rejected summarily by the Government during the discussions. It is inevitable that discussions will take place at some time, and better sooner than later.
My second suggestion, which I hope is constructive, is that a study should be undertaken by the Foreign Office,

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not just of United Nations trusteeships but of the agreement in 1921 by the League of Nations, governing the Aaland Islands in the Baltic. That agreement stated:
"The convention based on a decision by the Council of the League of Nations provided also that the Aalanders, who had in two plebiscites voted overwhelmingly in favour of Swedish sovereignty over the islands, should have far reaching internal autonomy and be exempt from Finnish military service".
These Finnish islands have Swedish-speaking people living there. They are similar in many ways to the Falkland Islands. The people are farmers and have a great deal of internal autonomy. Some agreement along those lines could provide a possible solution for the future.
Conservative Members shake their heads. Unless we address our minds to these matters, the islanders will face a constant threat and be under a constant claim of sovereignty by Argentina. There is no future prospect of prosperity for anyone on those islands while that threat remains.
6.38 pm
Sir Nigel Fisher: I hope that the hon. Member for South Ayrshire (Mr. Foulkes) will forgive me for not following the points he has made, because I want to be very brief. I know that many hon. Members on both sides of the House wish to take part in the debate, which started very late this afternoon.
The updated Shackleton report is so thorough and so comprehensive in its scope that any attempt to cover all or even many of its recommendations would entail a very long speech. Therefore, I shall confine my own remarks to the immediate as opposed to the long-term needs of the islanders.
In any event, the much wider matters, such as the potential of the offshore fisheries or of krill in the South Georgia area, or the even longer term oil prospects, are all dependent on reaching an arrangement with Argentina which, of course, must eventually be made but which is not feasible at the present time.
There are, however, some things which can be and should be undertaken as soon as possible in the interests of the islanders. The most expensive is the construction of a permanent and longer runway for better air communications. This is needed for civilian as well as military use. It will cost a lot of money, about £30 million, but it should be put in hand soon, if only because the life of the present shorter runway is only about three years.
I remind my hon. Friend the Minister of State that many of us have for many years begged successive Governments to construct a longer runway. It would have been much cheaper had it been done then rather than now.
Housing for the garrison is an even more immediate problem. The 1,800 islanders feel swamped and overwhelmed by the number of troops. That could lead to friction, especially if the lack of garrison accommodation is not remedied at an early date. About 500 Service men at present live on a ship anchored in Port Stanley harbour, but that can only be an interim arrangement. More permanent housing is urgently needed, but, so far as I know, no new building has yet been started.
Has a site yet been chosen? If not, why not? There is a good site near the airport, about 2½ miles outside Port Stanley, and construction work should be started very soon. Meanwhile, have prefabricated units been sent from England? If so, where and when will they be erected?
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There is also a shortage of amenities, such as public houses and other buildings, where social life can be enjoyed, because most of the suitable buildings are at present in use as sleeping accommodation for the garrison.
Sewage is another serious problem in Port Stanley. I was glad that my right hon. Friend the Secretary of Slate for Foreign and Commonwealth Affairs referred to this in his statement on 8 December, though it is not specifically referred to in the Shackleton report. It is obvious that what was adequate for 900 civilians is quite inadequate for the 3,000 or more people now living in the area.
A new jetty in Port Stanley harbour is another urgent requirement. The present jetty can take only one ship at a time, and there is an immediate need for much better facilities for ocean-going ships. The building materials for housing the garrison are arriving very slowly because of the lack of proper jetty facilities. When I last heard, no fewer than 26 Merchant Navy vessels were waiting to unload, yet in his statement on 8 December my right hon. Friend could only say that the Government were carrying out a feasibility study. That implies a long delay. More urgent action is needed than the Minister implied in his speech.
Lord Shackleton estimated that the cost of the new jetty would be between £3 million and £3½ million, but its use would not be confined to military requirements. It will have a continuing value if the economy of the islands is to develop in the future, so this would be money well spent in the long term, quite apart from the fact that a new jetty is much needed in the short term.
Lord Shackleton also stresses the social problems. As all hon. Members are well aware, there is a serious shortage of young women in the islands. Lord Shackleton reports that in 1980 there were only 26 unmarried girls between the ages of 20 and 30 in the islands. The disparity has obviously increased due to the presence of the troops, and after a time that will almost certainly lead to friction between the military and civilian male population, however popular it may be with the girls.
There is a real need for female personnel in the garrison and for married male personnel to be accompanied by their wives. I appreciate that this would involve extra costs in moving and accommodating wives and other dependants and it underlines the housing requirements to which I referred earlier. Without more attention to these matters, there is bound to be continuing and increasing friction. I therefore ask the Government to give this a high priority in their planning for the future.
May I make one comment not directly related to the Shackleton report, but nevertheless relevant to this debate? It has just come to my knowledge that the special BBC transmissions to the Falklands are to be cut from three broadcasts of 45 minutes each a week to two broadcasts of 30 minutes each a week. Perhaps the Minister will comment on the reason and justification for that.
Lastly, it would be ungracious of me not to refer to my right hon. Friend's announcement that £31 million is to be spent on implementing part of Lord Shackleton's recommendations. That is greatly appreciated by the islanders. However, I hope that I shall not be thought ungrateful if I add that that money is very much overdue. The basic infrastructure has been neglected by successive Governments—no doubt because the population of the islands is so small—compared with what has been done in other colonial and ex-colonial territories. As a result, we

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shall now have to spend much more than would have been the case had we developed the Falklands, as we should have done, many years ago.
There is much to be done, and I am sure that it will be done. But its value will be doubled if it is carried out quickly and if the practical matters to which I have referred are given a priority place in the Government's plans.
6.48 pm
Mr. Russell Johnston: I shall touch on a number of matters raised by the hon. Member for Surbiton (Sir N. Fisher). However, like all hon. Members, I compliment Lord Shackleton on the careful work that he has done. I also congratulate the two staff members of the Highlands and Islands Development Board on the part that they contributed to that work.
Before coming to the main burden of my speech, I should like to refer briefly to two brief aspects of the report. Everyone agrees that communication is vital. It was therefore disappointing that the Minister felt unable to say that the Government have been able to match the rapidity with which Lord Shackleton completed his report in arriving at a decision on what to do about communication. Unless the islanders can have an assured method of communication that does not depend on an unstable and possibly temporarily friendly country, I do not think that we shall achieve a permanent solution.
It is also regrettable that the Minister gave such a hesitant response to Shackleton's proposals for land distribution, in respect of which I register my support.
Many hon. Members have said that the report is not new, that we had a report in 1976, and that this latest one merely updates it. But, of course, nothing was done in 1976.
During the conflict there was a long article in The Observer. It drew attention to the questioning of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), the Financial Secretary to the Treasury, after his statement to the House on 2 December 1980. This matter was referred to obliquely by the hon. Member for South Ayrshire (Mr. Foulkes), in the remarks that he addressed to the hon. Member for Essex, South-East (Sir B. Braine). The Observer suggested that the criticisms to which the Minister was subjected on that occasion torpedoed an agreement and therefore contributed enormously to the final conflict.
I want to rebut that and to state firmly that, two years on, I take back none of the basic questions that I asked on that day. I shall quote them so that the matter may be quite clear. The questions were echoed by hon. Members on both sides. I asked:
"Is the Minister aware that … there is no support at all in the Falkland Islands or in this House for the shameful schemes for getting rid of these islands which have been festering in the Foreign Office for years? Will he take this opportunity to end speculation once and for all by declaring quite clearly that he disowns these schemes and that he will work to improve the economic and political links between the United Kingdom and the Falkland Islands? Surely that is the way to end the emigration about which he talked earlier."—[Official Report, 2 December 1980; Vol. 995, c. 130.]
Sir Bernard Braine: The hon. Gentleman will recall that on that occasion the Minister was questioned by no fewer than 18 hon. Members from both sides of the House,
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each of whom was hostile to the proposal that the Minister put to the House—as, indeed, the Falkland Islanders themselves proved to be.
Mr. Johnston: I thank the hon. Gentleman for confirming that.
The view that we took was perfectly proper. Successive Governments had failed to give the Falklanders the political and economic support that would create a confident climate, both for the inhabitants and for the development of the islands. It was also proper to argue that the then Government should proceed actively to correct that failure, and that is what we were doing.
Hon. Members on both sides felt that while the number of people who lived on the islands—this matter has been referred to often, both in the House and outside—was relatively small, many of them came from families who had lived there for a long time and who, irrespective of the territorial dispute with Argentina—after all, that country had been unwilling to submit to the international court at The Hague—clearly had established rights to live there in peace, and that Her Majesty's Government, who, as the Shackleton report of 1976 showed, had derived a tax benefit from the Falkland Islands of around £1 million, therefore had both a moral and an established economic responsibility to take some action.
What we said on that occasion was based on the assumption that the situation of the islanders would not be disrupted by force. Incidentally, I must say to the hon. Member for South Ayrshire, for whom I have great respect—I suppose that the same applies to the hon. Member for West Lothian (Mr. Dalyell), who has just come into the Chamber—that I supported the sending of the task force. I thought we had no alternative but to respond to the invasion in the way that we did. I did not want it, but I saw no way round it.
There is no doubt that the fact that the Falkland Islands have been invaded, and might be invaded again, creates a new and an unquestionably difficult situation. We cannot baulk that. That is particularly true for people like myself, who supported the Falklanders both before and during the conflict. Certainly it is a sad reflection on successive Governments that a development programme for the Falklands required a costly and, it could be argued, an unnecessary war to bring it about. However, it is no longer simply a question of how much we are prepared to spend on the development of the islands, as was said by the right hon. Member for Brighton, Pavilion (Mr. Amery), but how much we are prepared to spend over and above that to defend the development against capricious attack.
The attack by Argentina on the Falklands was, in my opinion, an atavistic action. However, the general support that it aroused in Latin America—I say, in particular to the hon. Member for West Lothian, a support that I, as a democratic politician, regard as an anachronistic but nevertheless real reaction, and a fact with which one has to deal—does not rule out the possibility of a repetition of the invasion. The Government need to guard against that, particularly if they are to proceed with their development programme. Such an open-ended commitment will not come cheaply, and therefore cannot be entered into blindly.
I make it quite clear that, in my view, we have an absolute responsibility to the Falkland Islanders. That responsibility compels me to say that a time could come when I would have to say to Her Majesty's Government

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that the cost is so great, is increasing so much, with no evident end, that one might have to offer the Falklanders a choice of staying, whatever the risks and problems that that might bring, or being generously assisted somewhere else.
Mr. Dalyell: The sooner the better.
Mr. Johnston: The hon. Member for West Lothian says "The sooner the better". It is certainly not a course of action that I advocate, or I should not have supported the sending of the task force in the first place. My position is as consistent as that of the hon. Members for West Lothian and South Ayrshire. It is not a course that I would willingly see undertaken. Nevertheless, we are foolish not to look the question squarely in the face.
It is true that we have time. I accept that it is impossible for the Government at this moment to treat directly with the Argentine Government. Even if their claims were legally sustained, they have shown themselves unfit to adminster, and by the violence that they have imposed they have breached all accepted international rules of conduct.
Mr. Hooley: Is it not somewhat ironic that apparently we cannot treat with the Argentines on general political matters, but when it is a question of the profits of the banking community in this country it is perfectly easy to come to an arrangement?
Mr. Johnston: I agree with the hon. Member. I had not proposed to raise that issue, but I agree that it was most extraordinary. The point has been made by other hon. Members, and there is no need for me to go over it. What we are talking about in this case, however, would inevitably be an arrangement whereby sovereignty was shared or administration was shared, and I do not think that that is on with the present Government in Argentina. They engaged in almost stone-age tactics. In that way, they buried the idea of any form of shared sovereignty until such time as Argentina proves its internal democratic stability and its sense of international responsibility over a period.
However, that does not mean that we must bury the search for a stable, secure background to development. On the contrary, it impels us to do so. It was disappointing in the extreme that the Minister—who perhaps will now be called the Minister who does not want to be interrupted—failed to say anything about that. He said hardly anything about the security background to the Shackleton report and that is fundamental to whether we do or do not.
Let me make three brief points. First, the Government should continue to act with vigour within the United Nations to see whether any agreed arrangements can secure the islanders from interference in their established way of life. It makes no sense to abandon the examination of the trusteeship solutions and the like because they were put forward in good faith by the Government previously and I do not see why they should be abandoned now. It is not in the interests of the islanders or ourselves that we should ignore those realistic propositions, which should be looked at carefully.
Secondly, this is a good opportunity for the Government to take some initiative at the United Nations to see whether at long last some type of United Nations force could be created which might move into such areas
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of dispute. The Minister screws up his face slightly. I regret that it is a habit of many Conservative Members to decry the impotence of the United Nations. However, that is not an argument for doing nothing to make it more effective. One way to make it more effective would be to establish a force which could move into areas where there were territorial disputes, such as Belize and Guyana, and perhaps at least create some sort of barrier or cordon sanitaire to reduce the possibility of an ultimate invasion.
Thirdly, we would be most foolish not to work with the United States. The Minister did not mention the United States, but we should work closely with it. I hope that when the Minister replies he will be able to say that the Government are in close touch with the United States about the strategic and defence aspects of the Falklands, as well as the political implications, which are clearly of enormous importance to the United States, as we have seen from its actions since the war ended.
I have spent a long time on those matters and I know that many hon. Members wish to speak. Apart from what I said at the beginning, I do not think it would be valuable to analyse the Shackleton report clause by clause. I have raised those questions because we must face up to them and have some reasonable confidence of our capacity to resolve them. Unless we do, the Shackleton report will be more a documentation of our bad conscience than a practical programme for development.
7.2 pm
Mr. Peter Viggers: I feel particularly privileged to follow the hon. Member for Inverness (Mr. Johnston) because I wish to comment on the general gist of his points. Faced with an idea which is immoral, illegal or fattening one can either say "Not yet" or "Perhaps no" or one can say "No" firmly and clearly. For the British Government or this Parliament to say that we might well consider United Nations' trusteeship or other ideas for the sovereignty of the Falkland Islands, either now or fairly soon, is tantamount to saying that we are prepared to compromise on the islands' sovereignty. Having sent the task force to the islands and having fought for them and having won, I am sure that the only posture that we can now take is to defend wholly the islands' sovereignty. On that basis we can perhaps discuss with other countries possibilities for trade and even other arrangements which might develop from trade. However, for us to equivocate at this point would be disastrous and would undo so much of the work that was done by the task force when it went to the South Atlantic. Our posture must remain one of unequivocal sovereignty. On that basis we may he able to develop trade relations and other arrangements with other countries but in no other way can we see the way forward from where we are now.
I am able to contribute to this brief debate as a result of my recent visit to the Falkland Islands. The updated Shackleton report was not based on a more recent visit to the islands and the war has changed the position there in three ways. First, on a temporary basis, through the presence of mines and ammunition which pose a hazard. In addition, there is war damage, which can be repaired. The second change of which the Shackleton report could not take proper cognisance is the presence of the troops. They place a substantial pressure on resources. That will in due course diminish but at the moment it is a major problem.

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The third change is that the islanders now feel a new sense of certainty. Where previously they were not sure where successive Governments stood in relation to the islands' sovereignty and future, they now feel that the Government are committed to the islands, and have more confidence now than before.
Mines pose a major problem, as does the clearance of ammunition. As one walks or flies around the islands one sees piles of ammunition everywhere particularly near the Argentine positions, and ammunition is still being found and played with by children. I saw ammunition in the sea opposite the Uplands Goose hotel in Port Stanley, as yet uncleared, perhaps unnoticed. The problem caused by the excessive crowding of troops in civilian accommodation is being greatly diminished by the building of Portakabins and the movement of a coastal unit to Port Stanley. We should pay tribute to the military authorities who recognise the danger of swamping the civilian population. At considerable inconvenience to themselves troops are moving out of civilian accommodation such as the community centres into tented accommodation to provide social centres for the different settlements on the Camp. That is an important feature which is greatly appreciated by the local community. The temporary problems I have described will be overcome.
On longer-term issues it is important to remember that we are dealing with between 1,700 and 1,800 people. While the whole attention of this Chamber is focused on those islands we must remember that the number of people concerned is small, and that we are dealing with small problems. To think in terms of a major international airport and the massive development of tourist facilities is wrong. It is inappropriate because we are dealing with a small number of people. If Britain tries to impose a blueprint for major development we shall be wrong. The best ideas in the Falkland Islands will develop from within. We must always remember that a war does not turn a shepherd into an entrepreneur. The character of the people remains one of quiet living, with little ambition for change.
The islanders see their problems as external and internal communication, and education. My hon. Friend the Minister of State dealt with education in his opening speech and I am glad that resources have been made available for the continuation of secondary education. Primary education is broadly carried on in the Camp areas. If we show ourselves uncertain, vague and unclear in our intentions on external communications, it will be difficult for us to develop the connections that we need with some South American nations. They will wait to see which way we shall jump and which way Argentina will jump. If we show complete resolution and determination it will improve the chances of arranging air communications through other South American countries. With regard to internal communications, it is important that we should help the infrastructure of the islands to develop so that the people can then develop within that improved infrastructure in their own way.
The hon. Members for South Ayrshire (Mr. Foulkes) and for Hackney, Central (Mr. Davis), who opened the debate for the Opposition, made substantial points about land ownership. I read the updated Shackleton report before I went to the Falkland Islands. I was convinced that it would be difficult to see any advance without a major
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change in land ownership. That was my conclusion from the report. Having been to the islands and spoken to individuals and to farm managers, I now believe that, although a change in land tenure on a longer-term basis might indeed give advantages, nevertheless, to impose a change or to have rapid change at this time, would be a mistake. The managers—the people who work on the farms and the estates—do not necessarily have the entrepreneurial skills to own the farms as well as run them, nor do they have the financial resources to withstand a year or two of bad agricultural produce or one or two years of bad wool markets. It may appear from Britain to be a good idea to break up some of the estates and to arrange for the individuals who are currently managing the estates to own them, but I believe that, rather than a stabilising feature, it might be an unstabilising feature, if it is done too soon.
Mr. Foulkes: Does the hon. Gentleman agree that part of the proposal for the Falkland Islands development agency was that it should have funds to be able to assist the farmers in setting up farms on their own? Does that not answer his latter point?
Mr. Viggers: I do not claim a specialist knowledge of farming in the Falkland Islands. I know that my hon. Friend the Member for Dumfries (Sir H. Monro) has made a special study of the subject. I very much hope that he will be able to catch Mr. Speaker's eye because I am anxious to hear his contribution. But I do believe, on the basis of my own conversations, that the proposal in the Shackleton report would be too extreme and would lead to a lack of stability. I should like to see a more gradual move. I should like to see individuals being given the opportunity to develop their own entrepreneurial skills and to acquire land in due course, but to impose an overall blueprint for the break-up of large estates and for their transfer to individuals would be a mistake and would be an unstabilising feature.
I strongly support the concept of uprating the grasslands trials unit. It is a remarkable experience to visit the islands and to see that there are no trees. There is indeed a need to improve the soil and the agricultural skills. I recognise, having seen the islands again, that to build the Port Stanley-Darwin road might be helpful, but to think in terms of developing a road structure outside that area is unrealistic. The number of people is so small that there is no need for the roads. The maintenance costs would be great.
I hope that fishing, salmon ranching, and tourism can be developed. I hope that one day krill can be developed and the search for oil can be carried out. It is too early to decide these matters. We are more likely to have a breakthrough in those areas if we show resolution over the sovereignty of the islands than if we show equivocation.
My summary would be—let the development grow from within the islands—do not impose a blueprint from Britain.
With regard to the longer-term military presence and its implications, there may well be scope for the use of part of the West Falklands as a military training area. I should like to see a development not only of the British military training use of part of the West Falklands but for it to be given, should it be possible, a NATO dimension. That would be helpful to the longer-term economy of the islands.
The principles of the longer-term military presence are being laid down now by the military and civil

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commissioners. There is to be a healthy degree of separation between the troops and the civilians. I am concerned about the rest and recreation facilities for personnel in the Falkland Islands. Until now they have worked seven days a week, and flat out, in a remarkable way. No praise is too great for all the Service personnel we met in the islands. But of course no one can work seven days a week indefinitely.
The military commissioner has now reduced the working week to six and a half days. There are some facilities for rest and recreation [Interruption] The hon. member for Liverpool, West Derby (Mr. Ogden) is laughing. The reduction to six and a half days a week imposes its own problems because of the lack of any form of rest and recreation during the spare time given to the men. There are 80 video sets on the islands. There is some fishing when the weather is suitable. There is always adventure training. The islands are an officers' paradise for planning adventure training. There is some sailing, and social centres are being built in the Portakabins centres and there will be social centres in the coastels. Nevertheless, a problem remains and we must face, as a Government, the issue of whether it is possible to maintain the tour of duty in the Falkland Islands at six months for all the troops or whether more of the troops should serve a shorter period of four months. In the case of the Royal Air Force personnel manning the Rapier systems the figure is two months. It may be necessary for economic reasons to maintain a tour of six months but we should consider the matter.
The troops provide the islanders with 10,000 tourists a year. More should be done to encourage the islanders to grasp the opportunities rather than for the Government to create and plan the development of the islands.
Mr. Spearing: What does that mean?
Mr. Viggers: The presence of 4,000 to 5,000 troops in the islands and their six-month period of service means that 10,000 people a year wearing uniform will be going to the Falklands. They are tourists. They are capable of spending money in the way that any tourist can spend money. They need certain facilities and I shall give some examples. Mutton produced on the islands is currently not thought to be suitable for military use. Research is being carried out to ensure that the islanders can provide the food that the Service men need. Agricultural produce can also be provided for these working tourists. There is no bakery on the island other than the one operated by the Army. Surely the indigenous population could provide bakery facilities. There are no dry cleaning facilities on the islands. The hon. Member for West Lothian (Mr. Dalyell) knows very well that such facilities were provided from Argentina before the war. Most people who comment on this general area mention that anyone operating a mobile fish and chip shop would make a fortune, but no one has yet got round to operating one. There is a dearth of souvenirs on the islands, There are no civilian sporting facilities. There is no bowling alley and no one is thinking of putting one there. There are no shops for books, sporting gear, films and so on. If I appear to be putting the case in microcosm, I am, because it is a small problem. A small number of jobs and a small amount of money would have a massive gearing effect on the islands. I hope the islanders themselves will grasp the opportunities.
One of the happiest sights on the Falkland Islands is the aircrew of the incoming aircraft arriving with their fishing
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rods. They have been there before, they know what the islands can offer and they are taking advantage of the facilities. Let us hope that more of our troops will have the opportunity to do the same.
We must improve the infrastructure. Transport is the key to the islands. The Falkland Islands Government Air Service cannot currently operate because the aircraft were destroyed during the war. Two aircraft are on their way. A helicopter—a Bell Huey—is, I hope, shortly to be licensed. My hon. Friend the Minister of State knows the problem and I hope that it has been possible to overcome it so that the Falkland Islands Government Air Service can operate the helicopter and the two aircraft.
I gather that before the war FIGAS operated on the basis of a taxi service. That meant that someone from one of the Camp settlements who wanted aircraft transportation would telephone, or use citizens band radio, to ask for the air service to call at that particular settlement the following day. It should be possible to set up a scheduled air service. After all, there are only seven large settlements—a large settlement in the Falkland Islands means a settlement of more than 35 people.
There are only 13 medium-sized settlements—that means settlements of 16 to 35 persons. Should it be possible to have a scheduled service, the psychological approach to it would be different from that to the taxi service, when an individual has to call up the service whenever he or she wishes to use it. A scheduled service would be helpful.
I have been disappointed by the content of the mail that I have been receiving recently on the South Atlantic fund. Some press comment has been critical of the fund. Criticism has been expressed of the delay in distributing the fund and of the decision of the managers of the fund about providing free telephone calls for the troops in the South Atlantic. This is a mean and grudging approach to a spontaneous outpouring of generosity. Can we not be more constructive in our response to the fund? It is new money that would not have been available but for the generosity of the benefactors. It is extra money to be used for the next-of-kin and for those wounded or deprived in the South Atlantic. The benefactors gave the money in the hope that it would be helpful and used constructively. We should move away from some of the carping criticism of the fund that has recently been seen in the press. I have been greatly impressed by the care and concern of those handling the fund and I hope that there will be less criticism in future.
In many instances the Falkland Islanders have suffered considerably. I visited the parents of one of my constituents. I believe that they are the oldest married couple on the islands. Their dearest wish is that their daughter, who is one of my constituents, should be able to visit them on the Falkland Islands. There seems to be no facility for the Government to assist those who want to secure such passages. The cost is prohibitive otherwise, and in the instance to which I have referred it is not possible for the islanders, because of their age, to travel to the United Kingdom. It is the wish of some people in the United Kingdom to travel to see their relatives on the Falkland Islands. The Minister knows the names concerned and I shall not mention them now. If it is possible to assist those who have close family reasons for wishing to visit the Falkland Islands, I hope that something can be done. I know that such assistance will be greatly appreciated.
7.23 pm
Mr. David Young: I believe that had the first Shackleton report been implemented the events of April need not have taken place. However, they took place and our reason for sending the task force was to give sovereignty to 1,800 people on the islands. It seems that we are in danger of considering every aspect of the problem except our wish to support the 1,800. The population of the entire island is 1,800. I represent 60,000 constituents and one of the wards within it contains 12,000. That puts the situation into perspective.
What do the islanders require? First, they require a halting of the decline of the population. Secondly, they require the right population mix. Thirdly, we must give the islanders some stake in their own islands. We tend to forget the need to give them a stake in their islands when we talk so glibly about not redistributing the farms. Many of the large farms are owned by absentee landlords. If we continue to maintain a feudal society for the Falklanders, we shall not encourage new generations of Falklanders to remain on the islands. If they do not remain on them, we are likely to end up with an island full of soldiers and experts but with none of the islanders whom we went to defend. That would produce a ludicrous imbalance.
When the parliamentary delegation visited the islands there were no tensions between the civil populations and the forces, but everyone recognised that they would develop in time. This is why there has to be a separation of troops from the civil population. If we continue to pack in troops or experts on the islands, we shall have sooner or later a clash between the islanders and the visitors.
Until I visited the islands I was not aware of the high dependence of the islanders on Argentina. They bake their own bread but additional bread was imported. The islanders went to Argentina to do their shopping. Their dry cleaning was sent to Argentina. I should be sad to see the dependence of the islanders on Argentina replaced by dependence on the Army. There is a real need to ensure the economic survival of the islanders. There is a need for them to acquire expertise and to participate. If that does not happen, we shall not have the basis on which to develp the islands into a viable economic proposition. It is to that objective that we should be bending our minds.
I was concerned when I heard the Under-Secretary of State talk about the education system. The solution that he propounded was that of visiting teachers, but that is not sufficient for "settlement" education. Many hon. Members may not be aware that in many of the settlements primary education is provided by a storekeeper doubling as a teacher. There is a great difference between the standard of education in the settlements and the standard in Port Stanley. If we want to give the 1,800 the necessary expertise to ensure that the islands become a viable proposition, we must recognise that the people themselves are the basis on which we must build. A primary requirement is a good education system.
Not much will be achieved by providing a good education system if those who take higher education, and in so doing leave the islands, are not encouraged to return to their homeland thereafter. I ask for an assurance from the Minister that islanders who leave the islands to train as doctors, teachers, chemists, agriculturists or anything else will on their return receive as good a salary, if not a better one, than an expatriate. Only by that means will we
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encourage native expertise. I should sooner see money spent on securing that then on abortive schemes to provide airports.
The main source of employment is agriculture, and we must give the population a stake in the country that we went to defend. When I listened to the Minister, I was concerned because it was not clear whether he wanted to give the population a stake in agriculture or whether he was defending the absentee landlords. If the islanders are given a stake in their community, the feudal society that has been outlined in statements from the Government Front Bench will come to an end.
Much has been said about the airport. Those of us who had the privilege of seeing the difficulties on site were left extremely worried about the proposal. To us, unlike the Minister, air communications seemed to be a key factor. The only problem is that the original airstrip was 4,000 ft long. It has now been extended to 6,000 ft. But to take a wide-bodied jet, apart from the weight-bearing difficulties, it must be extended to 8,000 ft and the engineers on site told me that it cannot go beyond 6,000 ft.
Sir Hector Monro: That is wrong.
Mr. Young: We shall get an answer from the Minister, shall we not?
Mr. Ogden: Not necessarily.
Mr. Young: If the airstrip is strengthened, the defence capability in that period will be reduced. The military on the island were not prepared to countenance that. That means that an additional airport must be built. Where will it be built? How much will it cost? I should like to be given an estimate of the cost. I have heard that it may cost anything from £30 million to £300 million. If we build a new airport, will it be for civil use or for use by the military as well? Whatever may be the advantages of having an airstrip at Stanley, it is the worst location with regard to weather conditions for aircraft.
We must ask questions such as those if we are not to face with a series of long-lasting commitments. Perhaps the Minister will confirm whether the existing airport can yet take a Nimrod aircraft. If it cannot, there is little chance of its taking a wide-bodied jet.
I left the islands with two impressions. The first was that any development required air communication of some kind. The second was that communication had to be with the mainland in some form or another. Is it not time that we considered some form of international trusteeship? At the moment, if we proceed independently, there will be great difficulty in making those arrangements. Any suggestion that we advance for the development of the islands must essentially depend on markets abroad and communications. If we do not bear those two factors in mind, we are not facing the realities.
We must recognise that if we do not take that type of decision now, we may find that we have landed ourselves with a commitment that will not, in the long term, aid the islanders. Moreover, it will put the British taxpayer in an open-ended commitment that rivals or surpasses Ulster.
I noted when I talked to the islanders and the council that they realise that if we do not recognise that the financial commitment to the islands must be kept in check there will eventually be a backlash from the British taxpayer. They were eager to avoid that. Therefore, I beg that, when we examine these schemes, we bear in mind

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and the islanders recognise that, in the end, the United Kingdom has commitments not only to the Falkland Islanders but to people here, Gibraltar and elsewhere. On balance, we must bear in mind the totality of the bill and recognise the hard decisions that we must take now.
7.34 pm
Sir Bernard Braine: This has been a most interesting and thoughtful debate. I broadly agree with a great deal of what has been said by hon. Members on both sides of the House.
I especially agreed with my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) when he said that if we had implemented Lord Shackleton's first report—an admirable and practical document—British interest and confidence in the Falkland Islands would have been clearly demonstrated at a crucial time and a clear signal would have been sent to Buenos Aires that Britain stood by the islanders and would guarantee their future.
It is not fanciful to argue the reverse. The failure to implement Lord Shackleton's first report sent a clear signal to Buenos Aires, perhaps unwittingly I concede, that we did not intend to stand by the Falkland Islanders.
Perhaps it would be well to suspend judgment about the causes of the Falklands war until we have the Franks report. I have little doubt, however, that although our Armed Forces' achievement was superb—tributes have rightly been paid to them, especially yesterday—that conflict would never have arisen if successive British Governments had had a clearer perception of the problem and had taken a firmer stand. In short, it is a mistake to believe that the Argentine invasion of 2 April was prompted solely by events that took place immediately before. The roots of the trouble go back, as many hon. Members who have been in the House for a long time know, to the mid-1960s, to British irresolution, to duplicity as far as the hapless Falkland Islanders were concerned, and to a persistent failure to understand how Argentine Fascist generals, indeed the Argentine nation as a whole, perceived our actions over a long period.
On that, and especially in the light of the ill-informed and intemperate attack on me by the hon. Member for South Ayrshire (Mr. Foulkes) I wish to make four points. First, having regard to the Falkland Islanders' undoubted right to self-determination—in the United Nations Charter—there never was a case for entering into negotiations on sovereignty. The United Nations resolution was not mandatory; it was an invitation to two parties in a dispute to come together. If we were to have regard to the wishes of the Falkland islanders on the subject, there never was a case for entering into negotiations solely on the subject of sovereignty. On other matters I have never opposed trying to get agreement with Argentina in respect of better communications, trade and common interests such as the joint exploitation of resources. The suggestion that I have resolutely opposed any kind of negotiation is a lie. It is simply not true. However, I have consistently opposed discussion of sovereignty and I shall explain why.
I have here the minutes of a meeting of the Falkland Islands Legislative Council held on 20 May 1968 when we had a Labour Government here. Lord Stewart of Fulham was then Foreign Secretary. The motion before the council was carried unanimously. It read:
"Concerning the future of the sovereignty of these Islands this Council welcomes that portion of the statement made by Her
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Majesty's Principal Secretary of State for Foreign Affairs in the House of Commons on 1 April 1968, when he said that the wishes of the islanders are an absolute condition. And this Council, with the full support of the Falkland Islands electorate, recently demonstrated in the Colony's general election, re-states the desire of the Falkland Islanders to remain British, under the British Crown and ever closely linked to the homeland of the United Kingdom".
The attitude of the Falkland Islanders and their elected representatives has never changed from that day to this. British Governments should have understood and respected that attitude. They should have honoured the pledges clearly made. They should not have sent signals that could be, and were, continually misread in Buenos Aires. Not all the fault lies with the Argentines. The confusion started here in Whitehall.
Mr. Hooley: Will the hon. Gentleman decide who is conducting the foreign policy of the United Kingdom? Is it this Government and this Parliament or the Falkland Islanders?
Sir Bernard Braine: The hon. Gentleman, for whom I have great respect, evidently did not hear the words of the resolution that I read out. They referred to a decision taken by the Government of this country and to a policy statement made in this House by the then Foreign Secretary. It is not for me to explain why pledges made to this House and believed by the Falkland Islanders were not carried out.
Secondly, if the economy and the population of the Falkland Islands started to run down in the early 1970s, as Lord Shackleton made plain in his first report and to which reference has been made in the debate, it was no fault of the islanders. The fall in wool prices was a contributory factor, but a great deal was owed to British Government policy that progressively undermined confidence in the future of the islands. Some of us foresaw that with the winding-up of the Commonwealth Relations Office and the Colonial Office, and their merger with the Foreign Office, the transfer of the Falkland Islands from people who understood their problems to the Latin American desk of the Foreign Office meant that a weakening of their position would follow.
I choose my words carefully. It was shameful that a small but democratic British community that was a net contributor to the British balance of payments 15 to 20 years ago, completely debt-free and enjoying a standard of living higher than most people in Latin America, should become a pawn in the Whitehall game of trying to placate a South American State whose Governments were patently unfit to govern their own people.
Thirdly, when the first Shackleton report was published in 1976—I join in the tributes paid to Lord Shackleton for an admirably written report—it showed clearly for the first time what might be done to restore the islands' economy. The report was, of course, limited to economic prospects. It did not venture into any political considerations. It was none the worse for being radical in its approach. It was realistic. It argued for economic co-operation with Argentina if this was possible but if it should prove impossible it set out what should be done to give the Falkland Islanders a viable economic future.
The most crucial of the recommendations was the extension of the Port Stanley airfield. That was the heart of the matter. But the proposal was never implemented.
My fourth point is this. It is incredible that in this House, dedicated to free speech and founded in the

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struggle for liberty, there has been little reference to it. Only the hon. Member for Hackney, Central (Mr. Davis) has mentioned it but then the hon. Gentleman and I share strong feelings on the issue. From 1976, Argentina passed into the hands of a cruel and corrupt military dictatorship. It should have been clear to the policy makers in Whitehall as it was to many Back Benchers on both sides, including the hon. Member for Hackney, Central and myself, that it was morally wrong and politically inept to discuss a possible transfer of sovereignty over British subjects to such a regime. What was not revealed by the then Government or by their successors was that among the many thousands of Argentines and nationals of 29 other countries who found themselves in the junta's prisons and torture chambers, and who are now presumed to be dead, were British subjects and Anglo-Argentines, the sort of people the Falkland Islanders would have become if we had succeeded in transferring sovereignty.
To enter into such negotiations was a disgrace. It was one more signal among the many sent to Buenos Aires that Whitehall did not really care about the Falkland Islanders. I have given detailed evidence on this to the Franks committee. I shall not pursue the issue further at this stage. If we are now to exclude, at least for some time ahead, the option of transfer of sovereignty, at least until Argentina becomes—as we must all pray—a stable democracy that respects fundamental human rights, we must do two things. We must guard against a further piratical venture, and we must restore, so far as we can, the Falklands' economy.
Lord Shackleton's second report is as realistic and practical as his first. I repeat that we are very much in the debt of this distinguished man and his team. I was pleased to hear my right hon. Friend the Foreign and Commonwealth Secretary agree on 8 December with the report's broad conclusions, especially the idea of establishing a development agency. That seems to me very sensible. I shall not quibble about reservations made by my right hon. Friend over certain detailed proposals, although having spent half a lifetime tracking development in Third world countries and having been Chairman of two Select Committees on Overseas Aid and Development, I am not happy about the manner in which Lord Shackleton's proposals for smaller farm units have been brushed aside.
For the moment, however, I accept the reservations. After all, what matters at the end of the day is what the Falkland Islanders themselves really think about these proposals. The Government have promised that their views will be taken into account. If confidence is to be created permanently, and if the population is to be increased, I should have thought that the need was to increase the number of people with a stake in the land. I suspend judgment, however, until I hear how the islanders themselves react.
The real test will be the extent to which, and the speed with which, schemes are implemented for resource development, for giving real incentive to the islanders and encouraging young people to go out to join them and start a new life. There has to be an improved all-weather airfield. I shall not even argue whether it should be located in a new place. I am prepared to wait and see what emerges from the present study. I hope, however, that an announcement will be made soon.
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The Minister of State has rightly stated today that the importance of sea communications should not be forgotten. Of course. What is now blindingly obvious, however, was not always recognised before the Falklands invasion. I was delighted to see that Lord Shackleton saw merit in linking the islands with the excellent St. Helena and Ascension shipping service. I can perhaps reveal to the House for the first time that this was a major recommendation in a report that I made on St. Helena and Ascension following a visit I made there at the invitation of the governor and the Legislative Council in 1980.
In that report, which dealt with the neglect of St. Helena and its enforced dependence because of that neglect, I remarked that, to the Foreign and Commonwealth Office, Ascension, St. Helena and the Falklands, all dependencies in the South Atlantic, might just as well have been in three different oceans. Yet without Ascension we could not have mounted the Falklands rescue operation, and without St. Helenian labour we could not maintain Ascension.
St. Helena has a surplus of skilled and reliable labour, and we have been told this afternoon that the Falklands are short of tradesmen and skilled people. What happened then in 1980 when advertisements were published in St. Helena asking St. Helenians to go to the Falkland Islands and several hundred responded? Did that project founder on the question of return passages? Here we have a surplus of labour in one part of the region and a shortage in another, yet nobody in the Foreign and Commonwealth Office had the wit or imagination to see that the problem might be dealt with on a regional basis. What happened to the idea of finding an outlet in the Falklands for the loyal people of St. Helena?
Then again a joint shipping service is crucial to the survival of all three territories. Until the day dawns when it is possible to hold out the hand of friendship to a democratic Argentina, we have a duty to ensure not only air but adequate sea communications for all our dependencies in the South Atlantic.
I believe that there will be a great reckoning in Argentina. If the hon. Member for West Lothian (Mr. Dalyell) were here, I would address these remarks directly to him. Argentina's long-suffering people may well get rid of their corrupt and rotten Fascist military dictatorship quite soon and bring to justice those who have murdered and tortured thousands of their own people. Once a democratic regime has been established, capable of guaranteeing basic human rights, we may feel confident enough to discuss improvements in communications, joint development of resources and collaboration in Antarctica.
My right hon. Friend the Member for Pavilion made an admirable speech. I think that the whole House agreed with his view that the horizon should be widened and the problem of the Falklands seen in terms of the development of the resources of the South Atlantic and Antarctica as a whole. Those were wise words. The world is too small to perpetuate quarrels between peoples.
In the meantime, however, we must be realistic. We have a solemn duty both to make reparation for our past neglect of the loyal and democratic people of the Falklands and to give them hope of a viable economic future. In this way we shall restore our honour in the international community and our standing as a defender of freedom.
Mr. Deputy Speaker (Mr. Bernard Weatherill): I understand that the Opposition Front Bench spokesman

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wishes to speak at 9.10 pm. Eight hon. Members are waiting to speak in this important debate. If they can tailor their speeches to rather less than 10 minutes each, I shall be able to call them all.
7.53 pm
Mr. Frank Hooley: I shall endeavour to follow your advice, Mr. Deputy Speaker. Having listened to extensive speeches from my colleagues, however, I shall try to make all the points that I wish to make.
The hon. Member for Essex, South-East (Sir B. Braine) was right to say that the first Shackleton report was not concerned with sovereignty. Indeed, Lord Shackleton stated in the preface:
"the terms of reference exclude any matters relating to the political future of the Falkland Islands and their dependencies".
In other words, the survey was conducted on the assumption that the political status of the islands would remain the same as in the previous century and a half. Lord Shackleton continues, however:
"The sovereignty issue overhangs our report as it does the Falklands and the absence of a settlement could well inhibit the full development of the islands".
It is no use trying to run away from the sovereignty problem as it has been a dominant factor in all the discussions and is as relevant to the Shackleton report as to the political problem.
The full cost of the Falklands disaster is now becoming apparent—2,000 dead, thousands crippled and disabled, and the ugly prospect of an expensive and unnecessary military garrison 8,000 miles away in the South Atlantic. Indeed, some have estimated that the total bill will reach £3 billion in the next few years.
The only semi-bright light in all this is that the Falklands disaster may cause people and Governments of this country to rethink their colonial policy in relation to territories such as the Falklands, Gibraltar, Hong Kong, and the Turks and Caicos Islands. That rethink must come and the Falklands tragedy may force it more urgently upon Governments than has been the case so far.
Lord Shackleton's verdict on British stewardship of the Falkland Islands can be summed up in four words—private exploitation and public neglect. With regard to private exploitation, today's debate has focused on the problem of abstentee landlords and the outflow of funds from the islands due to absentee ownership of the land. Reading the report and listening to the debate, one might almost think that we were talking about nineteenth century Ireland rather than twentieth century Falkland Islands. The Shackleton report is devastating on this point. The 1982 report states on pages 6 and 7 that before 1976 the outflow greatly exceeded the inflow and since 1976 dividends out have been £1·1 million but investment in has been only £600,000. Not only has there been a net outflow of private capital, but
"Investment has not been sufficient on many farms even to maintain existing assets".
In other words, the private entrepreneurs had such a rotten economic policy that they were not prepared to put in sufficient money even to maintain the value of the farms and other property that they owned. Worse than that, since 1976 the deficit on the Falklands account—the lack of funding—has had to be made up by the British taxpayer who has put in the money through the aid programme. The taxpayer has had to make up for the results of squalid private enterprise exploitation.
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There has also been public neglect of the islands over a long period. For example, Shackleton says that we now should spend £10 million to £15 million to provide a decent road network. Moreover, for an island community dependent on shipping, the report states on page 15:
"The state of repair of the Falkland Islands jetties is generally poor".
A major recommendation of the report is:
"A new main all-purpose jetty will be required in Port Stanley … costing £3–£3·5 million".
On air communication, a central feature of the Shackleton recommedations is the need for a major 8,500 ft runway and the establishment of regular civil air communication capable of taking modern medium-haul airliners and costing £30 million. International air traffic has existed for 50 or 60 years, yet in 1982 a report on a British dependency finds that there is still a need for a reasonable civil airport capable of taking not world transit liners but medium-haul jets to provide reasonable civil air communication.
The report is damning about the capacity of the Falkland Islands Government to carry out any development at all and proposes the appointment of no less than £3½ million worth of new officials and staff to provide that Government with the capacity to handle the development programme suggested in the report. This is not new—this was said in 1976, and nothing effective was done about it.
The energy crisis hit the world in 1973, 10 years ago, and yet we have had to wait for the Shackleton report in 1982 to suggest that perhaps there should be wind generators producing electricity, or perhaps a thermal power station burning the local peat, instead of the importation of highly expensive oil, to keep the islands' economy going. It does not seem to have occurred to the Falkland Islands Government, or whatever section of the Foreign Office that is responsible for these matters, that alternative energy sources might have been useful or important when the oil crisis hit the world economy.
One of the most astonishing sentences in Shackleton's report—it certainly startled me—is about schools. Here we have an island whose economy is based on agricultural activity—farming, looking after sheep, grassland and so forth. However, in 1982, Shackleton recommends
"the introduction of rural science in the school syllabus "
This suggests that, in a schooling system in a farming community it has apparently never occurred to anybody that the study of rural activities should be somewhere in the syllabus.
That is the record of public neglect of these islands by successive British Administrations. We have to ask ourselves why this exploitation by the private sector—and it has been a squalid and ruthless exploitation of which the chairman and directors of companies such as Coalite should be ashamed and publicly pilloried—was allowed. It is disgraceful.
Why was this exploitation allowed to continue, and why have we neglected these islands when we have been governing them for 150 years? Even if one discounts the pre-Second World War period, we have had 40-odd years in which to make up for that neglect. The answer is fairly clear from the Shackleton reports. The clear implication is that there can be no sensible, viable, economic development plan except in terms of a healthy relationship with the mainland of South America, and that means a reasonable arrangement—politically, economically, and

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so forth—with Argentina. A political settlement is imperative if there is to be any sensible economic development in the Falkland Islands.
This fact was recognised by Shackleton, and I am glad that the hon. Member for Essex, South-East drew my attention to it, because I particularly looked up the introduction to the 1976 report. Shackleton makes the point that the sovereignty issue overhangs the whole economy of the Falklands and that without a settlement there there is no way forward.
This is borne out by Shackleton's specific recommendations. On air communication, he says clearly that any successful arrangement would have to be either through Punta Arenas or with Montevideo. Even if the communications are through Montevideo, that is subject to Argentine agreement because it involves flying through Argentine air space.
With regard to fishing, Lord Shackleton makes an interesting statement on page 19 when he says:
"The recommendations relating to off-shore Patagonian Shelf and Southern Ocean fishing should be viewed in a wider and longer-term context than that simply of the development of the Falkland Islands."
We cannot talk in terms of development of fisheries and so forth in that area without taking into account the general political context and economic situation.
I was therefore startled when I read that Shackleton recommends the creation of a 200-mile economic zone around the Falklands and around South Georgia. It would be an outrage to international opinion if this country solemnly set out to lay a claim to 260,000 square miles of the South Atlantic as an economic zone for the United Kingdom 8,000 miles away, particularly at a time when we have conceded half our fishing rights to Brussels in the area around our coasts. It would be an astonishing claim, if we claimed 260,000 square miles of the ocean and its economic resources.
We have already dealt extensively with absentee landlordism, but it is clear that private investment on any sensible basis—that is to say private investment, not private exploitation—will not occur in the absence of a political settlement. The same is true of hydrocarbons. What has been said about the problem of icebergs and other things is right, but the biggest iceberg is the lack of any political settlement with Argentina.
The Shackleton bill for the economic recovery of the Falkland Islands amounts to £35 million for general infrastructure, £35 million for the airport, £20 million for the exploratory fishing, and £18 million for land reforms over a period of five years. The Government's response is £31 million over six years for general development, no land reform, a somewhat ambiguous attitude to the airport—no statement about how much money they are prepared to put in—and a rejection of the 200-mile zone idea, a rejection with which I agree as the proposal is out of court.
Shackleton is rightly apprehensive about the impact of the relatively massive garrison on a population of 1,800 people. The Government are unduly dismissive of those problems, but the garrison will seriously inhibit, as Shackleton claims, any proper economic development.
The rationale for the occupation and retention of this nineteenth century colony was, until the First World War and probably even until the Second World War, its use as
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a naval base and as a coaling station for the British Navy at a time when the Navy was the dominant naval force in the world. Today, our possession of this territory is a colonial anachronism. The clear message of Shackleton is that the economic future cannot be built on this kind of anachronism and can come about only in the context of a political settlement with Argentina.
I am aware of the difficulties, in the present mood, of arriving at such a settlement, but we should explore some sort of interim arrangement, perhaps for five years, a decade or even longer, with the international community. We should make use of the undoubted and considerable diplomatic abilities of the Secretary General of the United Nations, Mr. Perez de Cuella, who has been entrusted by the General Assembly with a mediatory role between Argentina and the United Kingdom.
There was a reference earlier to the men who had died in the fighting in the Falklands war. My belief is that the only enduring worthy monument to the men who died is not for us to cling to a nineteenth century colony but to ensure, by a political settlement with Argentina, that no man has to die in the future.
8.8 pm
Mr. John Browne: I offer my tribute to Lord Shackleton for his 1982 report, and for his previous report. I agree with many hon. Members that if only we had implemented the bulk of his recommendations in the past, we should not have had to repossess the islands and suffer the humiliation, the loss of casualties and now the huge costs. The background leading to how and why we were tricked and humiliated in the first place by the Argentine invasion is the subject of the Franks report and is not a subject for this debate.
However, we all know that the hostilities have not yet officially ended. Defence is vital to the security and therefore to the long-term economic viability of the Falkland Islands. In looking to the future, we must face some of the clear lessons of the immediate past. Some of these lessons include such things as, first, that the threat that we all face in defence terms is global. Second, defence, it appears—yes just appears as opposed to is—weak, it will be tested—by someone. Third, the United Nations, while it can play an important role in preventing conflict, has illustrated in several instances in the recent past that it has little teeth in taking much effective action once war has started. Therefore, in the final analysis, we must look to ourselves for our defence. The fourth lesson is that diplomatic support is a vital factor. We should remember our friends in the United Nations, in the EC and in the British Commonwealth, who stood by us in our cause of defending freedom against unprovoked, armed aggression. But we should also note those who failed to stand by that principle, and especially those who deserted us in midstream.
Our Armed Forces, as many hon. Members have said, have performed outstandingly. They have shown to the House and the country their value and we must continue to support them strongly. They showed efficiency, flexibility and determination. I shall quote from R. S. Grant, a young subaltern in the Royal Marines, who was at Malvern, the same school as me and you, Mr. Deputy Speaker. He said:
"The difference came in the calibre of men. Our forces lived rougher, moved faster, carried more and made do with less but still managed a smile and a joke."

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Yesterday's debate brought out this most important factor of the man on the spot, despite all the weapon systems of modern armed forces.
Our Armed Forces and civilian volunteers have received much well-deserved praise in the past, but no great enterprise is achieved without great leadership. It is clear to me that without the honest, clear and decisive leadership of the Prime Minister we would not have freed the people of the Falkland Islands. The whole thing would have failed dismally. We would still have been merely talking. Armed aggression would have been seen to pay and would have had a dramatic effect upon the total defence status of the free democracies of the world. I for one am glad that in looking to the future of the islands we still have this outstanding leadership and proven ability.
I welcome the commitment of my hon. Friend the Minister to the Falkland Islands Development Agency. It is absolutely correct. I also welcome his drive to gain support at the European Investment Bank for the fishing industry in the Falkland Islands. That is the correct use of that institution.
I also welcome my hon. Friend's tribute to the role of the Armed Forces in the rehabilitation of the islands. It is a dreadful task. The forces there include one regiment from my constituency, the Royal Hampshire regiment, and elements of the 1 Infantry brigade, which is located in my constituency and in which I still have the privilege to serve as a territorial. We must pay a great deal of attention, as my hon. Friend the Member for Surbiton (Sir N. Fisher) said, to the short-term amenities of the garrison, particularly looking ahead to the next winter. My hon. Friend made an important contribution to the debate. I was going to mention the matter in more detail, but now that would be merely repetition.
With regard to mine clearance, what action are the Government taking over the outrageous actions perpetrated by the Argentines in laying plastic mines indiscriminately and in unmarked areas? Are we following the matter in Geneva, the United Nations and so on?
This Government have now done and propose to do more than any other Government to help to build a future for the Falkland Islands. However, I ask the Government to put more pressure on the International Monetary Fund. It is making vast loans to the Argentine Government. Some of the funds are being used to purchase armaments. I agree with Opposition Members and my hon. Friends who expressed consternation at that.
I realise that it is difficult to enforce the use of loan clauses by one sovereign nation on another sovereign nation, especially in this situation. However, through the IMF we can exert considerable influence on the Argentine Government on the use of proceeds of its new loans. Spending those moneys on armaments is not only reducing Argentina's creditworthiness in the international lending market but is diverting vast sums from its citizens and creating more poverty at home. We can and should do more to exert a correcting influence through the IMF.
With regard to land reform, many Opposition Members have urged more positive action in breaking down large farms and creating smaller farms. Lord Shackleton referred to that in his report. I am still uncertain whether that would have any long-term beneficial effects on the islands. I have yet to see the evidence that that would create more employment. By that I mean more viable employment in the islands. This is my only major
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disagreement with the Shackleton report. I see his argument, but I do not see the evidence that if we implement his suggestion it will create a better economy.
We could have a major impact on preventing the repatriation of earnings by doing two things—first, by restoring confidence in the islands and, second by means of taxation. Also, with regard to land reform, we must make sure that the Falkland Islands Company does not withdraw without a proven viable alternative.
In looking to the future, we must ensure that we restore confidence, for confidence is the key to the future economic viability of the islands. Confidence is the oil that will allow the economy to move forward. If we truly want future economic viability, we must restore confidence. If we want confidence we must show no willingness to discuss the handover of sovereignty to Argentina. It is utterly wrong to talk about negotiating sovereignty at this stage, particularly as the hostilities have not officially been closed.
With the future in mind, I shall submit two ideas for consideration. The first is the establishment of a forward NATO facility, and the second is the establishment of a tax haven.
I have put forward the idea of a NATO facility before. It has fallen on stony soil. Many people argue that the islands are far outside the NATO area. Of course they are. There are other areas of vital interest to NATO which lie outside the NATO area such as the Arabian Gulf. However, unlike the Arabian Gulf, NATO would be welcome in the Falkland Islands. If we allowed NATO to use naval facilities and air and army training areas in the Falklands, large earnings would inevitably be generated for the local community.
Mr. Dalyell: What other NATO country would be daft enough to get involved in an antagonistic position with South America?
Mr. Browne: I agree with the hon. Gentleman that it would be difficult to persuade our NATO allies to join us there and hinder their immediate relationships with South America. However, I believe that we must persuade them that the South Atlantic is the true southern flank of NATO. It was politic but strategically ridiculous to draw a mere map line along one of the tropics and say that it was NATO's southern flank. I hope that the hon. Gentleman will agree that if we create a major airfield in that area it will become an airfield of major strategic importance. It will inevitably influence NATO in its global thinking and our allies and friends in the southern cone of South America.
Finally, will the Minister consider whether it would be feasible to establish a tax haven or an offshore international centre similar to the Channel Islands, the Cayman Islands or even the New Hebrides? Many offshore tax havens are in remote areas and they derive significant income from the international services that they provide. Obviously, to allow the evolution of an offshore tax haven would require a vast investment in improved communications—radio, telex, telephone and of course air. They would affect not just the tax haven but also the islands' general viability.
It is our clear duty to defend the islands. The key to that is the restoration of a confidence which will ensure the viable economic future of the islands. We have now part 2 of Lord Shackleton's report. Past Governments failed

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woefully to implement the recommendations contained in part 1 and we are all now paying the price. The House must ensure that the Government do not fail, as past Governments have done, to implement the bulk of Lord Shackleton' s report.
8.21 pm
Mr. Eric Ogden: The hon. Member for Winchester (Mr. Browne) is one of the few hon. Members who knew anything about the Falkland Islands before 1 or 2 April. If, at the time of the first report, in 1976, we had had available the information we now have, the Government would have done much more, because there would have been great pressure from the House. The course of history might have been changed.
I might disagree with the hon. Member for Winchester about where the southern flank of NATO should be, but I do not think it is right for the hon. Member for Hamilton, (Mr. Robertson) to cackle at him. Some Opposition Members discovered where the Falkland Islands were only after April 1982.
Mr. George Robertson: We do not need to know where the Falkland Islands are to know that they are not, by any stretch of the imagination, the southern flank of the NATO area.
Mr. Ogden: I might agree with the hon. Gentleman, but it was perhaps ill-mannered of him to cackle at what was being said rather than to listen to see whether there might be something in what the hon. Member for Winchester was saying.
We all know that the economic development of the Falkland Islands cannot be isolated from its geography and history, or from its economic links with other countries in the area. To those who say that we should be looking for a British political or defence initiative, I say, please try to leave well alone at present and let the status quo be a little static.
Whereas what hon. Members say in the House is understood by us in the way that it is meant—and I say this to Opposition rather than Conservative Members—the way that their words are interpreted in the Argentine and South America, not just by our temporary enemies but by those who hope to be our friends, results in the opposite impression to what those who are putting forward the proposals intend.
I want to speak about the future economic development of the Falkland Islands. The costs of defence and development have been mentioned. We sent the task force to the Falkland Islands to liberate the Falkland Islanders. Our first thought was for them, but we also had to take that action in our own interest.
The economic future of the Falkland Islands is just as much in our interest as it is in the interest of the Falkland Islanders. However, I do not mean that in the narrow sense. The hon. Member for Uxbridge (Mr. Shersby) and I were on farms in the Falkland Islands 15 months ago and the tractors and equipment were wholly British. The ratio of British equipment and machinery in Stanley is greater than in many parts of Liverpool or Birmingham or other parts of the United Kingdom. Therefore, we have direct and indirect interests in the development of the Falkland Islands.
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I am critical of the strictures uttered by the hon. Member for Hackney, Central (Mr. Davis) concerning the Falkland Islands Company. It is not enough for the hon. Member to be well briefed, although the hon. Gentleman is obviously well briefed and has his collection of newspaper cuttings. When he puts them all together, he can make a case, but a collection of cuttings and letters do not make a policy. He should try to put himself in the position of any company operating in that society and economic climate. He might then accept that his strictures were exaggerated. The Falkland Islands Company is neither the best nor the worst of the companies operating in that area. The FIC has operated in its own time, in its own way and in its own environment. We should not expect that company to be the same as a company working against competition in England. Therefore, I defend the Falkland Islands Company against unfair criticism.
The hon. Member for South Ayrshire (Mr. Foulkes) said that Coalite had made a profit of £25 million. He let us assume that the profits of the FIC were £25 million when they are much much less than that sum. The assumption was that some of that money should have gone to the islands. I agree with the hon. Member for Hackney, Central about the need for more investment, but hon. Members should bear in mind the economic climate of the Falkland Islands. We might then make some progress.
I welcome the report of Lord Shackleton and his colleagues, and the Government's response, so far, to its recommendations. I thank the Minister for the further information that he gave the House today. I think that he will accept that I am being rather more generous to him than he was to me earlier today. I strongly stress that we should make it possible for the Falkland Islanders to take their own decisions about their own economic development, instead of continuing the practice of 150 years in which Parliament or London companies decided what would happen and the islanders either liked it or lumped it, but made no decisions of their own.
My plea is that we should provide the Falkland Islanders with the means and finances to take their own decisions about their economic development at their own pace. They know the situation best. The Minister cited two examples earlier. There is a hostel that might have been ideal in the Bahamas, but which was far from ideal in Stanley and the 12-mile of the Darwin road. The islanders said that a ditch was needed on either side of the road, but the people in the Overseas Development Administration said "Nonsense, you can do very well with one." Long before the invasion, the state of the road showed that two ditches were needed. Just as my hon. Friend from Scotland know best what sort of roads and other developments should take place in Scotland, the islanders can best decide on their own development.
That is a change of emphasis, because the islanders have grown accustomed to the idea of others making decisions for them. Such a rut can be a very comfortable one to be in at times. While the rut is not exciting, there are no responsibilities. The more we can return the decision-making process to the islanders, the better it will be both for them and for us.
At some time, there will be a need for a new Government of the Falkland Islands Bill to bring forward a much more democratic and effective system of government in the Falkland Islands. That time is not now

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although perhaps next year would be appropriate. Trade union legislation, employment protection and other provisions should be included in the Bill.
When the hon. Member for Uxbridge and I returned from the Falkland Islands 15 months ago, we reported to the Foreign Office, to the then Minister of State, the hon. Member for Shoreham (Mr. Luce). The Foreign Office staff took careful note of what was said, as they always seem to do when I visit it. The first point that we stressed was the need for the Falkland Islands to have their own voice in London—what we called the Falkland Islands Government Office. The Independent Falkland Islands Committee has done valiant work during the past 12 months and before then. The Committee is an honourable creation but it is part of an independent pressure lobby like any other lobby. However, it does not represent all the people of the Falkland Islands. The best way for that to be achieved is for the Falkland Islands Government and people to have their own office in London. The office could speak for all of them. The Falkland Islands all-party group can support them, but they would be independent of the Foreign Office, of charity and of the House of Commons.
I understand that such an office was to have been set up in November. A stalwart gentleman called Adrian Monk was to have been commissioner of the Falkland Islands Government Office in London. He was once referred to as the only real politician in the Falkland Islands, and credited, or discredited, as the man who shot down in flames the lease-back proposals.
That proposal was timed for November, but is not yet established. The Minister now speaks of it being established in the new year. In the meantime, the Falkland Islands Association, the Falkland Islands Committee and the Falkland Islands Office have virtually stood down. They say "We wish to let the Falkland islanders have their own voice. We shall pull out, but give support". There is a vacuum of information. I should appreciate information from the Minister. The key issue affecting the future of the Falkland Islands is the Falkland Islands development agency. The Minister knows that I treat him with great respect, matched only by a great suspicion from time to time about some of the things that he does. Why the wording "Falkland Islands development agency"?
Lord Shackleton and his colleagues recommended that this body should be modelled on either the Highlands and Islands Development Board, the Merseyside development corporation or the London Docklands development corporation. Those who recommended the establishment of such a body to Lord Shackleton and ourselves never used the word "agency". That word assumes—perhaps "subsumes" is a better word—that the body is acting on behalf of someone else. I wish it to have the independence that Lord Shackleton describes in his report.
What finances will be available? No one suggests that the agency should have funds similar to the London Docklands development corporation or the Merseyside development corporation. Roll-over investment could be considered, where the funds are invested and returned to be reinvested. The lack of development in the Falkland Islands has been caused by lack of finance. Falkland Islanders who want money to invest go to the Government. They cannot go to other financial institutions that are available in the United Kingdom. A development agency that would control development and investment in the
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Falkland Islands and that would be based in the Falkland Islands is essential, although it could be supported by expert help from the United Kingdom.
The Minister said that that proposal would require Falkland Islands Government legislation. Will it require United Kingdom legislation similar to that provided for the Merseyside development corporation or the London Docklands development corporation? I do not ask the Government to nationalise the Falkland Islands. Lloyd George rightly said that the land should belong to the people. I see nothing wrong in the report, which states that the Government should take over the freeholds and then let the land to the islanders over a period. The Minister is always careful with his words. He said that if land or farms become available, there is no reason why the Falkland Islands Government should not buy it, either themselves or through the agency that has not yet been set up. I tried to intervene at that point in his speech to explain, as he may already know, that Fox Bay East farm is available now. Why should the Minister say "if land becomes available" when he knows that that farm is available? The Minister can confirm that both Green Patch and Roy Cove have been eminently successful.
Mr. Onslow: I said not only "if land should become available", but "if an acceptable price can be agreed". We should not forget our obligations to the British taxpayer and the duties of the Public Accounts Committee, as scrutineers of expenditure. It is essential that any bargain is fair to both sides and justifiable as a transaction with public money. It cannot be an unconditional commitment.
Mr. Ogden: I would not wish it to be unconditional. My experience of shopping in the Falkland Islands is that the shopkeepers drive a very hard bargain.
The road system must be improved by providing a ring and spur road on East Falkland, both north and south, and a ferry to West Falkland. Reference is made from time to time—both the hon. Member for Bolton, East (Mr. Young) and the hon. Member for West Lothian (Mr. Dalyell) mentioned it—to the "islanders' economic dependence on Argentina". The hon. Member for Bolton, East would appear to believe that every aeroplane that flew in and out of Port Stanley and Comodoro Rivadavia was full of either bread, or people going to shop at Harrods in Buenos Aires or the islanders' dry cleaning. We know that it was not like that and I hope that other people realise it.
Our priority should be to provide the facility for the islanders to have their own voice in London and their own development agency that we can fund to begin with as a pump-primer. That will be best for peace and security and will be the best way to ensure that the islanders have the opportunity to make their own decisions. It is also the best way to ensure that their future is more prosperous and more safe than their past.
8.37 pm
Sir Hector Monro: It is always a pleasure to speak after the hon. Member for Liverpool, West Derby (Mr. Ogden), who has been a long-term enthusiast and is extremely knowledgeable about the Falkland Islands.
Yesterday was the day to debate the military aspects of the episode, but I have two sentences to say about that. After visiting the Falkland Islands last month, seeing the battlefields and appreciating the immense distance from Britain and the difficult terrain in the islands, I was full

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of pride for the bravery and brilliance of our Service men. We should be extremely grateful to the Commonwealth War Graves Commission for making the war cemetery at San Carlos into a place of great beauty. It was moving to stand there surrounded by the graves of our fallen men, as it was to see the Parachute Regiment monument at Goose Green to Colonel H. Jones and his colleagues and the Guards' memorial at Fitzroy.
Lord Shackleton' s entire report is important, but the most important aspect is his recommendations on farming. We should consider those proposals and the Government's response. No one could be an expert after only 12 days on the islands, but as I am a farmer with some experience of hills, and as I had the opportunity to visit the settlements, especially the new small farms, and to have listened to the farmers, I came to certain reasonable conclusions that are not dissimilar to those announced by my right hon. Friend the Secretary of State on 8 December and again by my hon. Friend the Minister of State today.
We must concentrate on the short and mid-term development of farming. That is the only way in which we can make a major impact on the islands' economy in the next few years. Another important aspect of the Shackleton report concerns the deep-water jetty.
The substantial improvement to the income of the islands must come from wool. However, the price of that wool will be relative to world prices which, sadly, have been falling. We must not look solely at that aspect, but also to the future. The quality of Falklands wool will enable it to be pitched at a relatively high level in the market scale.
Lord Shackleton calls for an early transfer of the large farms to island ownership and suggests that they be reduced in size. This radical proposal also includes compulsory purchase. From studying the report, I am not sure that the Shackleton team was confident in making that recommendation.
Three significant extracts can be taken from the report. On page 11 it says that there is no sustained evidence that smaller farms will increase agricultural productivity, and will certainly lower the tax revenue of the Falkland Islands Government.
Page 17 states:
"The pace and extent of small-farm creation will depend not only on the numbers of suitable owner-occupiers who can be found"
but also on the provision of the necessary infrastructure.
Thirdly, and more importantly, page 58 states that
"It is too early to draw any firm conclusions"
on small farm policy.
Shackleton is making major recommendations without evidence. Perhaps he is thinking of a steady evolution after an assessment of current developments. That is not far removed from the present position of the Government. As hon. Members have said, relative to this policy, it will be interesting to hear the views of the islanders.
With the help of Sir Rex Hunt and General David Thorne I was able to go with Mr. Bill Goss, who is well known to some hon. Members, to visit the two large farms that were split into six small ones at Green Patch, and on West Falkland at Roy cove. I was very impressed. The Green Patch farm was reduced in size only in 1980. Allowing for the problems of war damage, the six farmers
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were confident that they would be financially viable in the future, thereby repaying the loans that they had received at favourable terms from the Government.
Naturally, there are difficulties—I think they can be overcome—in respect of the jetty, the shearing shed and so on. It is important in this context to accept that as small farmers move out of the large settlement, we are denuding that settlement of work hands. It makes the education of the young children more difficult. The small-farm policy may well provide less employment in agriculture than at present.
The small farms of 12,000 to 15,000 acres with 3,000 to 4,000 head are viable. I was favourably impressed. I found this view reinforced when I went to Roy cove on West Falkland. The six farms have been operating for 13 months, from October 1981. It is important to realise that there were very few more than the six firm applicants for those six farms, and that only two applicants were from outside the island.
A year ago there was great concern about the political future of the islands. A large number of islanders did not come forward to apply for the farms. We must bear that in mind in the future. The feeling was one of confidence, provided the price of wool could be maintained. I went with Bill Goss to see Bill Luxton of Chartres who is one of the most successful large farmers in the islands and talked to him about the policy.
I also looked at Fox bay, which is the key issue. If we can purchase that farm at a fair price and convert it into six or seven smaller farms, we shall make substantial progress towards implementing the ideals of Shackleton. By doing so, we shall over three years have created 18 or 19 new small farms, and will have increased the number of farms in the islands by about 50 per cent. We must have time to digest this proposal, and give both the Falkland Islands Government and the British Government time to consider how this development has changed farming practice on the islands. An early purchase of Fox bay at a reasonable price is important to show that this is our policy. I should also like to see Fox bay developed as a settlement.
I wholly support FIDA as an executive agency with an advisory board. It is important to give financial assistance to the grasslands trials unit. Along with Mr. Tom Davies and Mr. Steve Whitley, the vet, I talked with their colleagues about the unit. I saw the trial plots on the far side of the bay, that were, mercifully, unmined, and I was impressed by how the new seed mixtures were settling down. If we can improve the pasture land in the camp, we shall be able to increase the stocking rate, which is important in the production of wool.
We must concentrate on wool. As Shackleton rightly says, mutton will not have a viable future and nor will beef. However, in the short term we must explore the possibility of developing a market for beef and mutton for the Service men, either through the slaughterhouse or via a slaughter ship that can visit the settlements, pick up livestock and transport it back to Stanley.
The grassland trials unit is a key factor. However, the unfairly maligned Falkland Islands Company improved 2,000 acres of grassland, even though there was a lack of fertiliser and lime. We cannot continue apace with re-seeding without assimilating each step at a time.
In developing the grassland trials unit in conjunction with the agricultural officer, it is important to have in the latter post a man of real substance who can lead the

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farmers towards greater productivity. It will not be easy. There will be all possible help from Sir Rex Hunt and his team, but in terms of farming we need someone with knowledge and strength of character. I hope that that will be borne in mind by the authorities in making the appointment. All in all, I was impressed with the grassland trials unit and wish it well in the future. I could talk at greater length about farming, but I do not have time.
As to an aerodrome, I personally believe that we must develop the airport at Stanley. The possibility of going elsewhere, either to March Ridge or further afield, is wholly impracticable and out of the question in financial terms. I think that I was only one of two hon. Members who looked at the east end of Stanley runway, and I am quite convinced that we can extend it by another 2,000 or 3,000 ft. without too much difficulty. The only difficulty is reconstructing the airport while at the same time keeping it operational for the defence of the islands. That is not beyond the bounds of possibility. We must widen, strengthen and lengthen it. That will be infinitely less expensive than starting elsewhere, where there might be no noticeable improvement in the weather, and we would have all the problems of access by road and sea. Therefore, we should think only in terms of an important development at Stanley.
The steps that the Government announced are right. My hon. Friend broadened the story today in his valuable speech. We are putting an enormous sum into the islands, and in my view that is right. However, it is also important to go step by step, along with the Legislative Council and the Islands Council, taking the islanders with us and encouraging them to take all the initiatives that they can. Then the economic prosperity of the islands will improve month by month. The spirit is willing, but we need as much leadership and drive as we can get. I am confident that the Government have made a valuable start. They have shown their determination that the future of the Falklands will be sound and profitable.
8.50 pm
Mr. Tam Dalyell: I am in the position of the bad fairy in this debate, because, in my view, Lord Shackleton's political judgment is as appalling as he himself is charming. Fifteen years ago we quarrelled east of Suez. I thought that he was a disastrous influence on the first and second Wilson Governments as a Defence Minister. It was east of Suez then; it is the South Atlantic now. His report is basically ill conceived. It commits us to a Fortress Falklands, when we should recognise that the facts of geography are against us. We should indulge no longer in what is a preposterous national escapade.
In particular, I am concerned about our relations with the United States. The vote of the United Nations, far from being what the Prime Minister called an aberration, was in keeping with the long-term interests of the Americans. They will resent more and more our bitching their relations with their southern neighbours. Indelicate though it may be, I recall that on 4 April Alexander Haig said that the Falklands were
"a pimple on the arse of history which had to be squeezed."
I believe that that was the general American view.
I also take the view, unpopular though it is, that in this matter the officials of the Foreign Office, who have been greatly maligned throughout the argument, have been sensible, and many of them courageous, in recognising reality. I deeply resent the Prime Minister's attitude of
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throwing her handbag at the Foreign Office officials at every possible opportunity. It is bad to have not only a second Foreign Office in the form of Robin O'Neil and others in the Cabinet Office, but a third Foreign Office with Sir Anthony Parsons and his staff. I go on record as saying that in the past 17 years the Foreign Office has behaved over the Falklands in keeping with the best interests of Britain and the reality of the modern world.
We are talking about a village. I tell my Scottish colleagues that Reggie Elliott, who was chairman of the Conservative Party of Salin in Fife, resigned from his post on this issue. He has an Argentine wife, and knows something about the matter, but he makes it clear that we are talking about something smaller than the village of Salin in Fife.
Now we are talking about a newly appointed Attorney-General for 1,800 people. Of course the issues are grave, but if we go on as we are we shall be putting in jeopardy, among other things, the world banking system.
As I too must talk in shorthand, I should like to record my total support for the Treasury and the governor of the Bank of England in insisting that we should be part of the international package to do something to help the Argentine economy. The reverse of that coin is the same as has happened in Mexico and Brazil, which will mean that we shall have great problems—and for what?
I ask the Minister a direct question. How much private capital will go into the Falklands? I am told by Ralph Emery in the City and others who negotiate with the Bank of England that there is jolly little private capital going in, for the obvious reason that it will not be invested in the Falklands before there is some prospect of that being done in conjunction with the good will of South America. That is a fact of life.
The Minister says that we shall push ahead with the economic development of the Falklands. That cannot be done without the co-operation of their neighbours. The hon. Member for Gosport (Mr. Viggers) talks about military training in West Falkland. I cannot imagine a redder flag to the South American bull than that. The Minister says that life on the islands will return to normal. One of the results of what we have done is to bust up the Falklanders' fragile way of life. I might be in agreement with the hon. Member for Liverpool, West Derby (Mr. Ogden) on that. The fragile way of life of the Falklanders has been completely wrecked. If we are to return to anything like normal conditions, I am afraid that must brutally say that that will mean Argentine sovereignty on the same basis as their relationship with the Welsh communities in southern Patagonia, who continue to speak Welsh if they wish and certainly continue to play rugby.
One can say, "What about those Falklanders who above all want to be British?" If above all they want to be British, they can come to the Thames valley. I get the impression, and have done ever since the mid-1970s, that those who have made most noise from the Falklands have in fact spent a great deal of their time in Britain. Many of the genuine kelpers sent their children to Buenos Aires for their secondary education. If it is said that it is a great imposition to learn Spanish, I say that if one is to have a medical operation it might be quite a good thing to have a smattering of the language that one's doctor talks.
Mr. Ogden: To suggest that sending some kelpers' children to private schools in Buenos Aires implies a

1027
dependence on Argentina is rather like saying that Liverpool's education facilities depend on our ability to send Liverpool children to Eton.
Mr. Dalyell: We have not been told what will be done about secondary education. We have heard about primary education—all those schools and travelling teachers for 1,800 people. For primary education in Hamilton, West Lothian or elsewhere, one school would be sufficient.
There is a growing resentment, which I share, that all this money should be spent when we have the most appalling problems in our constituencies. This Christmas 12 miners will spend Christmas down the Kinneil pit. I do not fancy the idea of a sit-in down a colliery for the first time in Britain. It is a delicate issue on which I talked to Mr. Scargill and Mr. McGahey and many others. The National Coal Board has had to do it because the Secretary of State—
Mr. Deputy Speaker: Order. The hon. Gentleman must relate his remarks to the Shackleton report.
Mr. Dalyell: If that is not the right comparison, what about help to others areas of the Third world? The same money would be much better spent by the British Council. I ask the Minister how much the compensation claims amount to. What are the sums involved in these major roads? United Kingdom contractors might be a small mercy since many of the housing contractors went to Sweden. How much will the hospital, geriatric care, and so on cost 8,000 miles away?
I also understood Shackleton to say that air links were crucial. When I asked him about this he said "90 per cent. right". How big an airport is needed? My hon. Friends have asked some pertinent questions about this issue. Will it cost £30 million or £300 million. What will be the cost of a shipping service?
I am worried about the "Uganda" plying between Ascension Island and the Falklands. Unlike the hon. Member for Inverness (Mr. Johnston), I do not believe that there may be a capricious attack, but he may be right in using the word "capricious" in terms of a revenge strike. What will happen if, albeit irrationally, it is decided by someone in Buenos Aires that because of the way things are going an attack will be made against the "Uganda"? Cover is needed both for shipping and for the perilous refuelling of the Hercules—
Mr. Deputy Speaker: Order. I am reluctant to interrupt the hon. Gentleman, but we dealt with that matter yesterday. He must relate his remarks today to the Shackleton report.
Mr. Dalyell: Links are absolutely crucial. Shackleton said that air links are crucial and I am asking about refuelling and the cost of the conversion of Tristars. It may be fine for Marshalls of Cambridge but the rest of us will have to pay for it. We shall have to pay in many ways. I should like to draw attention to one way. A headline in the Daily Express of 21 December read "Snubbed Brazilians axe England game". After all the questions I have asked at Question Time, I do not blame Ministers for being rude to me, but I should like to ask a serious question. When will we ever get landing rights in South America?
We have heard about the recruitment of suitable settlers. Who has applied? This appears to be like the colonisation of Algeria.
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If there is to be defence and a lasting presence, will nuclear weapons be involved? The Stockholm International Peace Research Institute has said:
"There seems no doubt that, if any nuclear weapons were on board any of the British ships engaged off the Falkland Islands, the United Kingdom was in breach of its obligations under Protocol I of the Treaty of Tlatelolco, which it signed on 20 December 1967, and ratified on 11 December 1969."
I should like a Foreign Office comment on this matter. SIPRI continues:
"Under article 1 of that Protocol, the United Kingdom undertook to apply the statute of denuclearization in respect of warlike purposes as defined in articles 1,3, 5 and 13 of the Treaty for the Prohibition of Nuclear Weapons in Latin America in territories for which, de jure or de facto, it is internationally responsible and which lie within the limits of the geographical zone established in that Treaty.
The Falklands lie within the limits of the geographical zone established in that Treaty.
Article 1 of the Treaty, referred to in Protocol I, clearly requires the total absence of nuclear weapons, by prohibiting, inter alia, the receipt, storage, installation, deployment and any form of possession of any nuclear weapons, directly or indirectly, by the parties themselves, by anyone on their behalf or in any other way. (The definition of nuclear weapons given in article 5 of the Treaty is broad enough"—
Mr. Deputy Speaker: Order. I am sure that the hon. Gentleman wishes to be fair. We must not deal with such matters in a debate on the future development of the islands.
Mr. Dalyell: One cannot develop the islands unless one defends them. What is the Foreign Office view on SIPRI's view of the Treaty of Tlatelolco?
9.3 pm
Mr. Michael Shersby: Unlike the hon. Member for West Lothian (Mr. Dalyell), I should like to add my congratulations to Lord Shackleton and his team on producing a very good mark 2 report. My view is based on my own experience of visiting the Falkland Islands in September 1981 together with the hon. Member for Liverpool, West Derby (Mr. Ogden). At that time, I spent two and a half weeks visiting settlements in the islands before the conflict broke out. I had the opportunity of having useful and prolonged discussions with the islanders about their future. I am pleased that my right hon. Friend the Foreign Secretary was able to announce on 8 December the broad acceptance of some of the important recommendations in the report. I am glad that my hon. Friend the Minister of State has been able to amplify them today.
The setting up of the Falkland Islands Development Agency is the right course of action in the circumstances. I hope that the agency, which I understand is to report to the Falkland Islands Government, which in turn will report to the Government of the United Kingdom, will be able to operate in an independent manner. I hope also that it will not be hampered or restricted in its activities by unnecessary references to Whitehall. During my visit to the islands, I found that sometimes the most elementary decisions had to be referred to Whitehall. Sometimes even weeks would pass before some of the more difficult decisions were taken. I hope that the agency will be able to achieve speed of action.
I am glad that the agency will have funds to buy land on the open market and to divide it into smaller holdings. I agree that there is a need to get land at a price that is fair to the British taxpayer, and I am pleased that my hon.

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Friend the Under-Secretary of State has that in mind. I am one of those who welcome the gradualist approach that was announced by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs on 8 December. From the discussions that I have had with the islanders, both when I was there and since, I am convinced that they could not cope with wholesale and immediate land redistribution. Consequently, timing is an essential element.
I support fully the wise words of my hon. Friend the Member for Dumfries (Sir H. Monro) in his admirable speech in which he brought his great knowledge of farming to bear on the problem. He observed that when farms came on to the market in Roy cove—they were being advertised for sale while I was there—only a limited number of buyers came forward. I think that only four prospective buyers came from the islands. The redistribution of farms into smaller units and resale to new owners is not a process that can be rushed. This is clear from the sales of farms which took place prior to hostilities.
If more of the islanders are to own their farms, funds must be made available by the new agency, and perhaps it should also provide advice and even farm management training. It may not be possible to achieve a major redistribution of the land in the shorter term, even with the benefit of the funds that are available from the agency and even if absentee owners are willing to sell. The population is small and not every islander wants to own his or her farm or is capable of managing a farm. It is clear that migrants are needed from the United Kingdom who are willing to make their lives on the islands and who have the necessary training and experience to be successful farmers. I am glad that my hon. Friend the Minister of State said in his opening speech that the agency will be given a specific role to encourage migration from Britain and to help those whose training and experience would enable them to make a useful contribution to the economy.
If that is to be possible, there must be a vigorous housing programme. There is nowhere on the islands for migrants to live in any numbers. I know that this is very much in my hon. Friend's mind and I hope that he will say more about housing when he replies to the debate. I hope also that we shall hear more about the widening of land ownership, to which he referred earlier. He talked about financial means and I shall be grateful if he will enlarge upon that.
I was pleased that on 8 December my right hon. Friend the Foreign Secretary talked about the expansion of the harbour complex. Will this include the possibility of improving facilities for the offloading of oil by pipeline instead of by drums as at present? Do those proposals include any changes in oil storage arrangements? When I was there, I was quite surprised to find that there is a rather primitive way of unloading oil from the tankers that then brought it from Argentina. It is clear that a more modern system is essential.
I shall now deal with Lord Shackleton's recommendation that the road network in the Camp should be expanded once the Stanley to Goose Green road has been completed. I am pleased that the Government have decided to complete the road. I make a strong plea to my hon. Friend the Minister that a good job should be made of it. A proper tarmacadam surface, rather than the rough gravelled one that is now provided, is needed. A proper road would facilitate rapid overland transit and enable the development of Darwin as a second town of reasonable size as the
1030
economy of the islands expands. It would also give access to the great plain of Lafonia. A proper tarmacadamed surface would also permit proper drainage and it would be more durable.
Presumably the Falkland Islands Government will have to bear the recurrent cost of repairing the road. We must therefore ensure that they have both the materials and the equipment to keep that and other roads in a decent state of repair. I am sure that my hon. Friend the Minister has travelled on that road. I hope that he will agree that a gravel surface simply will not do. Can he also say what the Government mean by the statement that the existing network of tracks is to be improved? Some islanders told me that the Stanley to Darwin road will not serve enough of the settlements in the Camp to justify the expense. Will the improvement of the tracks help to meet that complaint? How will the improvement of the tracks meet the infrastructure needs of the small farms in the Camp? It seems that another major road is not planned. I wonder whether we are perhaps proceeding a little too slowly.
I was interested to hear earlier about the hospital and the possibility of building a new one. I pay tribute to the people who work in that fine hospital in Port Stanley. I must tell my colleagues who have not been there that it is an excellent hospital. It is beautifully situated and has first-rate staff. When one visits the hospital, one notices the number of elderly people who are cared for there because they can no longer live in the settlements in the Camp. Obviously my hon. Friend the Minister has in mind the need to provide special accommodation, perhaps sheltered accommodation, for those people. That would release much needed facilities in the hospital.
My hon. Friend also referred to the school hostel in Port Stanley. Of all the structures that I have seen in Britain and elsewhere, it is one of the most extraordinary, not only in its appearance but in its design and in the materials used in its construction. I would almost go so far as to say that the way in which it has been handled in the past few years is little short of a public scandal. It has never been occupied by the children for whom it was intended. The hon. Member for West Derby and I thought that it was downright unsafe.
I should like to hear more about secondary education for children in the Falkland Islands. I recall that arrangements have been made in the past for youngsters who have taken their O-level course to go on to a school in Rye in Sussex. I do not know whether that arrangement still exists or whether alternative ones are being made.
I am glad that the Government will explore the possibilities for offshore fishing. The hon. Member for West Derby and I studied the subject while we were there. We went aboard the Polish factory ship and watched them turning fish into fish meal. Apparently, that is profitable activity for the Poles. They also caught substantial quantities of squid for prompt export to Spain and Italy. The next time you enjoy calamares romana, Mr. Deputy Speaker, you may in fact be eating calamares Port Stanley. Perhaps we can learn from the Poles with regard to fishing. I hope that we shall be able to come to some arrangement with the Polish fishing fleet over a base in South Georgia.
I should like briefly to mention air communications. This is one of the most important recommendations in the Shackleton report. Sea communications with the Falkland Islands have in the past been one of the major means of transporting heavy equipment, goods and materials to the islands. It is clear that these will have to be continued. I

1031
believe, however, that the Government should, and will eventually, be able to reach some agreement with Chile for a commercial air service via Punta Arenas.
I was told in the islands that it would be possible for an aircraft of the BAC 111 type with longer wings and a shorter fuselage to use the existing runway at Port Stanley. If the runway is extended, that will certainly be possible. I should have thought that this development, together with a possible link with Punta Arenas some time in the future, would provide the air service that was needed. There is, after all, a regular twice weekly service from Paris to Santiago.
There are regular air links by Lan Chile or Cadeco Linea between Santiago and Punta Arenas. That is obviously the airport for which we should go. It is only 470 miles from Port Stanley and a much shorter distance than that involved in the original air service between Comodoro Rivadavia in Patagonia and Port Stanley. I hope that my hon. Friend the Minister will not be discouraged by those hon. Members who have reservations about the Chilean Government and their policies. I am sure that most hon. Members have reservations about every country in South America. We have to make our friends as best we can.
I hope that relations can be developed with Chile in the same way that I hope that it will be possible, in the fulness of time when the scars of this conflict have healed, to develop our friendships with the many people in Argentina who admire our country and who dislike and distrust their Government as much as we do.
I welcome the Government's response to Lord Shackleton's report. I urge the Minister to press ahead with all speed in the knowledge that many hon. Members will give him the strongest possible support.
9.17 pm
Mr. George Robertson: This has been an interesting and thorough debate. As one of the few hon. Members who have sat through practically all the Falklands debates, starting with the high drama of the debate on the invasion, I am aware of the great displays of emotion that have characterised the whole episode. It is interesting that hon. Members have kept today's debate at a consistently low emotional level. The affairs now under discussion were bound to be the business of the House once hostilities had ceased. The matters involved are of some importance.
I wish to join those hon. Members who have congratulated Lord Shackleton and his team on their report. I was born in the islands of Scotland. I wish especially to thank the Highlands and Islands Development Board, which provided two senior staff members to bring the report up to date. Their invaluable assistance should be recorded. We have an authoritative and comprehensive report on the circumstances applying in the Falkland Islands today. Its publication brings up to date the report of 1976 which was, in its own way, thorough.
The report enables hon. Members to look to the future in the aftermath of the conflict that cost so much and for which so many people made the supreme sacrifice. I wish to pay my tribute, as the Minister did, to the troops who, since the retaking of the Falklands, have done so much to bring the islands and the conditions of the islanders back to normality.
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The report not only exhaustively examines the present circumstances in the islands but gives a scenario for all the diversification there could conceivably be in the future. It exhaustively considers even the marginal options that might have been suggested before and during the conflict. I can find only one comment from any outside source which the report failed to consider. The Secretary of the Clydesdale Horse Society, Mr. John Fraser, suggested that there might be a use for the rugged Clydesdale horse in the terrain of the Falkland Islands. Apart from that, I believe that the report has come to a fair conclusion about the alternatives open to us and to the islanders.
Any consideration of the future of the Falkland Islands must start with an objective, and the objective can be defined only by a combination of Parliament and the islanders themselves. As my hon. Friend the Member for Hackney, Central (Mr. Davis) pointed out, the Shackleton report makes it clear that the objective of a community of fewer than 1,000 people defended by a garrison of 3,000 or more, with an economy surviving principally on the income from stamps, is unacceptable. So, too is what The Guardian recently described as
"a fortified welfare office in the South Atlantic."
Those options should not form the basis for our consideration of the future of the islands. There must be a viable society. The people whom we went to defend and whose rights we went to reinforce must have their own roots, their own lifestyle and their own sense of independence. That is the objective in the light of which we must consider the Government's attitude to the Shackleton report's recommendations. It is a prerequisite of any long-term political framework which might be established for the Falkland Islands in the future.
The future of the islands cannot be dealt with in a vacuum, as though external circumstances did not exist. Our eventual aim must be international acceptance, which is the only real security for the Falkland Islanders. In the meantime, it is crucial that the islanders should have a real stake in their own future. That is why the kernel of the recommendations about sub-division of the farms is so important and why the Government's failure to accept those proposals is so disappointing.
The report's analysis of the economy does not present a bright picture. However much we may want a bright future for the Falkland Islands, the report points out that the economy of the islands has an underlying tendency to decline. If no radical action is taken now, that decline and the accompanying depopulation will continue. The report rightly underlines the fragility of the social structure of the islands, which could easily be endangered, accelerating the decline, if the existing balance were artificially disturbed. As my hon. Friends the Members for Bolton, East (Mr. Young) and West Lothian (Mr. Dalyell) have pointed out, we are concerned not with a gigantic international community but with a tiny community of 1,800 people—about as many as attend the largest secondary school in my constituency. The fragile social balance on the islands could easily be disturbed by well-meaning people from outside and especially by the effect of the garrison.
The report rightly stresses the importance of isolating the effects of the garrison as much as possible from the social structure of the islands so that the previous pattern of dependence—on Argentina, on the one large company in the islands and on the United Kingdom—cannot easily be transferred to the garrison. Experts from the Highlands

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and Islands Development Board area have compared this with the development of Sullom Voe in isolation from the social fabric of the Shetland Islands. Ministers should bear that important example in mind.
The report also emphasises the importance of retaining profits on the islands and increasing self-generated investment there. It points out that the structure of ownership, the lack of financial institutions and the failure of recent controls have led to a disgraceful drain of investment funds from the islands. In the past five years £1·1 million was lost from the islands—more than the total investment over the same period.
The report calls for radical solutions to reverse the decline endemic in the economy of the islands, to build identification and to break down the attitude of dependency that existed previously. It also stresses the need to give young people in the islands—and young people from the islands who are perhaps no longer there—a stake in their own future, to build a spirit of initiative and independence. One would have thought that that would appeal to the Prime Minister and the Government, so it is sad to see the Government abandoning the principal mechanism that the Shackleton team believed would achieve that spirit.
A number of hon. Members have referred to the ownership of land. As a Falkland farmer said to me this week, this is the teeth of the report. Despite the ambivalence of certain sections of the report, to which the hon. Member for Dumfries (Sir H. Monro) referred, the report is clear about land reform. Paragraph 2.5.1. states:
"We are of the opinion that a radical solution is required to stem the flow of funds from the Islands and to encourage reinvestment of profits. We reach this conclusion because of the combination of facts and circumstances relating to the existing absentee-owned farming operations in the Falkland Islands, which are likely to render other non-structural attempts to deal with the problem largely ineffective."
The following paragraph adds that
"without a concomitant change in ownership pattern the danger is that a principle medium-term effect of such allowances and grants might be simply to raise all the levels of undistributed profit remittance to the UK."
The teeth of the report are in the land reform aspect of the recommendations. Why, therefore, has the radical nature of the proposal been so pre-emptively cast aside by the Government in considering the sub-division of disproportionately large land holdings in a series of islands where the present system has been clearly proved to be against the interests of economic viability?
The Minister's opening speech cast doubt on the state of opinion in the islands. In his speech welcoming the original Shackleton report, the Foreign Secretary said:
"Islander opinion, which has been consulted on the important matter of land redistribution, is unpersuaded of the advantages of wholesale sub-division in the way proposed in the Shackleton report … We shall start on a small scale and then see what develops."
Members of the Shackleton team have repeatedly told me this week that they made no proposals for wholesale sub-division, so hon. Members who have continued to make that accusation today misconstrue the recommendation. The proposal is for a radical sub-division of the farms. The timing and phasing of it will depend on the circumstances prevailing in the islands. There is a clear difference between the idea of wholesale nationalisation, which some Conservative Members have been promoting as being
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what Lord Shackelton said, and the reality of the proposals, which are for a long-term phased programme of breaking down the existing holdings.
The Foreign Secretary was to go on further in his replies and say:
"The Government do not believe that to be the best approach, nor is it the general wish of the islanders."—[Official Report, 8 December 1982; Vol. 33, c. 860–862.]
The Minister who visited the islands apparently spoke to some people out there and, in an on-the-record briefing when he returned, was heard to make the same comments that he has repeated this evening.
My hon. Friend the Member for Hackney, Central dealt at some length with islanders' opinion as it has manifested itself in the United Kingdom. He quoted a farmer who owns farms in the Falklands and who has spoken in the past few weeks during the period when the Minister was on the island. He disagrees violently with the Minister's interpretation of local opinion. The elected representatives of the Falklands in the Council came to the conclusion that the Shackleton report should be accepted and were vociferous in their support.
Mr. Gavin Young's article in The Observer, apart from the ideas quoted by my hon. Friend, said:
"Many islanders see Mrs. Thatcher's silence on this point as a dismal sign that, because of doctrinal Tory opposition to Government takeovers, she cannot and will not act on this recommendation, one that is most dear to Falkland hearts and minds. It is on this point that resentment could flourish."
There is a considerable body of opinion that suggests that the Minister misunderstood some of the reservations that the islanders had about the recommendation on land redistribution and the sub-division of the farms. There are certainly those on the islands who do not wish to see an immediate changeover, and who think that any limbo that might occur could lead to a rundown of profits and a lack of cultivation of the holdings. However, as that was never part of Shackleton's recommendations, that was an unfounded misapprehension, and the Minister has misunderstood the nature of the reservations that the islanders hold.
It is also important to pick up some of the points made about the success or the failure of the existing sub-divisions. It is a fair point to make that there was difficulty in letting the last two farms that were sub-divided, but the circumstances are clearly different now from the circumstances when the farms were sub-divided. Those who know the islands and island opinion believe that if there were proper training and encouragement there are people, both on the islands and who have left them, willing and able to go back to farm the sub-divided areas.
I put my next point to the hon. Member for Dumfries because he is more knowledgeable about these matters than I. He said that the success of the experiments was not clear-cut enough—he did not go as far as the Minister, who seemed to deny any success—and quoted the Green Patch example. That is also quoted in the report as one of the examples of the sub-divided areas where some quantification has been made of success since the subdivision took place.
I have, as I am sure the Minister has, information about the latest position in Green Patch. The latest figures show that in the past year, which is not covered in the statistics in the report, there was an increase of 17 per cent. in the clip figure for 1982 over 1981. On this new sub-divided

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unit the comparison with the 1978–80 figure shows an increase in clip yield of 30 per cent., one of the most significantly successful operations in the islands.
It should be noted that this was a sub-division of a Falkland Islands Company farm. One of the features of the company is that it has never been willing to sub-divide most of the good farms. Green Patch was not regarded as one of the better farms, but sub-division has clearly proved itself to be good in the interests of this farm. There is no reason to suggest that it would not be good in the interests of others.
I am glad that the Minister announced today that the development agency that will be established in the islands will have the power to take over land and farms that come on the market. That at least is a healthy development since the statement was originally made by the Foreign Secretary.
Mr. Onslow: There has been no change.
Mr. Robertson: I welcome the signs of success. The Minister says that there has been no change, but at least this is a positive encouragement, suggesting that the Government are not as doctrinal as they recently appeared to be in the press and the House.
The power to buy land and then either to lease or sell it to new farmers is contingent on resources being available to the agency. It has to have the resources to make a meaningful contribution. The proposals in the Shackleton report are so radical that the resources must be made available. We are talking about something that is so crucial and pivotal to the future of the islands that we deserve an answer about the amount of resources that will be available to the agency to make sure that that function is carried out.
To those in this country who say perversely that we must protect the State from the aggrandisement of the landowners who may place too high a price on the land, I say let us export, along with an Attorney-General, a district valuer. That might be a good idea if the public purse has to be protected. We have an ideal system for protecting the community against those who wish to place over-high prices on land. The district valuer system is there. It would be the ideal protection.
My hon. Friend the Member for Hackney, Central dealt at length, rightly and properly, with the role of the Falkland Islands Company in the islands. The report highlights the role of the company. There is no doubt that the monopolistic role of the Falkland Islands Company is unlikely to be tolerated by islanders in future. It is too large. It is all-pervading. By necessity its role must be diminished.
Half of the road that the Minister is having constructed between Stanley and Darwin will pass through Falkland Islands Company property. If there was ever need of an argument for sub-dividing the farms along that route, it is that public funds will be used to drive a road between two communities—between Stanley and Darwin, which is largely owned by the Falkland Islands Company.
The House would do well to contrast the objections of the Falkland Islands Company to sub-division of the larger, better units on the islands with the private enterprise of two individuals connected with the company. Mr. Needham, who was the chief executive of Coalite, the parent company of the Falkland Islands Company, is
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proposing 50-acre plots at Fitzroy at land prices that are considerably above what the Shackleton report would consider reasonable and which the Minister would find difficult to swallow. Those are uneconomic plots and are inappropriate for the area. He is being countered by Mr. Camm, who was a consultant to Coalite, and who has now bought Douglas Station. He is marketing 50-acre plots at Douglas Station and asking that 1,000 people should come from Britain to take up those grotesquely uneconomic units. The chance for an opportunist killing has not been lost on some of the people who were previously associated with the islands.
It would be wrong if grant aid in the form that we are talking about were just to be a way of increasing the repatriated profits for the largest employer in the islands. Lest it should be suggested that I, an outsider, am suggesting something that is not believed by people on the islands, I shall quote Mr. Colin Smith, the owner of two farms on the islands, who said in a letter to Sir Rex Hunt:
"the Falkland Islands Company has now become a positive bar to change, and if the islands Council fears grasping this nettle, then the Islands will stagnate from now to Kingdom Come …The Council should ensure that the majority of subdivision takes place within the 43 per cent. of land owned by the Falkland Islands Company, if it fails to do this, it will have ensured the perpetuation, of the status quo and the stagnation and eventual depopulation and loss of the Falkland Islands".
That was said by someone with a stake and background in the Falkland Islands.
Two weeks ago I stood at the graveside of a young constituent of mine, a paratrooper who was killed in action at Goose Green. Therefore, to some extent I can understand the immediate feelings of those who, like the hon. Member for Gosport (Mr. Viggers), say that the Falklands are and will always remain British.
Perhaps the people of this country will not accept a different outcome at the moment, but the Shackleton report contains a stark warning. In the light of that warning we had better realise that the British people will not find it acceptable, after the sacrifices of life, limb and money, to have expensive military might protecting a bunch of barren rocks with a dwindling population and a disappearing economic base 8,000 miles away. To allow that possibility to exist by avoiding the radical proposals in the report, as the Government are in danger of doing, would be to abandon the islands not by design or defeat but by default.
That outcome would be a disgrace and betrayal of those who gave their lives to provide a chance for those islanders. I urge the Government to read again the wise advice of Lord Shackleton's team and guarantee a firm future for those people, in whatever political framework they eventually live. The Government must recognise the challenge and the only possible remedies. That is the only way in which we can live up to the sacrifices of those who gave so much.
9.41 pm
Mr. Onslow: I agree with the hon. Member for Hamilton (Mr. Robertson) that this has been an interesting debate and that a great deal of ground has been covered fairly thoroughly. I hope that the House will allow me to deal with as many of the points that have been raised as possible. I am sorry that my hon. Friend for Perth and East Perthshire (Mr. Walker) and the hon. Member for

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Newham, South (Mr. Spearing) were not able to speak, because I know that they were anxious to contribute and sat throughout the proceedings.
It was time that we had a debate because there are many things to be said about the Shackleton report. I do not want there to be any ambiguity in the minds of the hon. Members for Hackney, Central (Mr. Davis) and Sheffield, Heeley (Mr. Hooley) about the statements which have been made about the source of aid funds. I can only repeat what my right hon. Friend the Foreign Secretary said on 8 December about the source of funds for the programme that we are discussing. The new aid will be financed mainly from additional funds. I believe that the hon. Member for Heeley missed the word "mainly". My right hon. Friend the Foreign Secretary was of course talking about the handling of this within the public expenditure survey.
My right hon. Friend the Minister for Overseas Development, in a written reply to the hon. Member for Heeley yesterday, said that Supply will be sought through the overseas aid Vote on the basis of the plans mentioned on 8 December. There is no inconsistency. No existing projects will suffer because of the funds that are being devoted to development on the islands.
I hope that the hon. Member for West Lothian (Mr. Dalyell) will forgive me if I do not dwell at length on his speech. The treaty of Tlatelolco is something about which I am sure he will put down many questions to me. I ask that he does not abuse the priority written question system by putting them down on a Thursday for answer on Monday. If he does, I may not be able to answer them as quickly as he thinks I should. I have no doubt that he will come back to me on any other points that he wants clarified.
I hope that hon. Members will understand that some of the points they have put to me are more properly for my right hon. Friend the Secretary of State for Defence. Military considerations inevitably take precedence in such matters as the location, precise type and timing of work on a new airfield and on other matters as well.
Mr. Bill Walker: A military airfield would be different from a civilian airfield. The military require a runway, and all the navigational and traffic control aids, but they do not need the facilities that are normally found at civilian airports. Therefore a military airfield will be just that—a military airfield.
Mr. Onslow: With his experience of such matters, I am sure that my hon. Friend will know that it is possible to provide an airfield that is suitable for both military and civil uses. We shall want to ensure that the civil uses are not overlooked. I hope that a team from the Civil Aviation Authority can be involved in the planning.
My hon. Friend the Member for Surbiton (Sir N. Fisher) asked me some questions about garrison accommodation, but they are principally a matter for the Secretary of State for Defence. As I have said, we cannot make permanent arrangements until decisions about the airfield site are finalised. However, I hope that it will help to know that we are making interim arrangements to improve accommodation for the garrison on the islands. Portakabins are being set up round the settlements outside Port Stanley and I understand that a Coastel is being positioned in Stanley harbour which will relieve much of the pressure on civilian accommodation in the town.
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I have never heard of 25 ships having to wait in the harbour to unload. I understand that at one point there were 15 ships in the queue, but only one vessel has faced a prolonged delay in offloading. That is a great tribute to the efficiency of the harbour masters and others involved in running the port.
Sir Bernard Braine: One of them is a good man. His mother is a constituent of mine.
Mr. Onslow: I am delighted to hear that.
I agree about the importance of the new jetty. I hope that the value of the decision that I have announced has not been underestimated. We are allocating about £7 million to the construction of the jetty, which is more than seems to have been thought by some.
BBC broadcasts have been mentioned. As my right hon. Friend the Prime Minister told the hon. Member for Liverpool, West Derby (Mr. Ogden) in a written answer on 9 December, the present temporary pattern of three "Calling the Falklands" broadcasts per week will be replaced next year by a permanent pattern of two broadcasts a week. Before the crisis, there was only one such broadcast a week. The Falkland Islanders have been consulted about the reduction to two broadcasts per week and are broadly content with that.
I was sorry not to hear the speech made by my hon. Friend the Member for Essex, South-East, although I have heard an account of it. I particularly want to take up his point about immigration from St. Helena as a possible solution to the labour problem on the Falkland Islands. Of course, one problem is the lack of accommodation. Therefore, it is difficult, if not impossible, to think of bringing in much labour. As he probably knows, immigration into the Falkland Islands is essentially a matter for the Falkland Islands Government, which must be allowed to take decisions on that. However, if people on St. Helena have the necessary skills and apply to go to the Falkland Islands, I am sure that the Falkland Islands Government will consider the applications carefully. The increasing employment opportunities on Ascension Island have, however, done something to take up the labour surplus on St. Helena.
My hon. Friend the Member for Gosport (Mr. Viggers) made several interesting points. He referred to 10,000 tourists. Of course, the troops and others on the islands may not recognise that description. If my hon. Friend had said 10,000 potential purchasers of souvenirs, they would probably recognise themselves at once. When I was there, I told those who modestly supply the islands' souvenir trade that they should understand that they had suddenly got a cash flow injection of another £1 million per year into their businesses. Any military tourist there is likely to spend at least £100 on some things for his wife or girl friend. That represents an opportunity to which there must be some response, other than bringing in pottery from Stoke-on-Trent and selling it in the Upland Goose. Someone must go for that.
My hon. Friend referred to the Government air service. We now have one Beaver plane equipped with floats in Port Stanley. It was bought in Canada, dismantled and shipped out. It should be reassembled shortly and be in service before the end of next month. Two Brittan Norman Islanders will be shipped from the United Kingdom next month. They will be reassembled on the Falkland Islands by a specialist team from the manufacturer. I expect them

1039
to be in service in March. My hon. Friend the Member for Gosport may wonder why we break them down and ship them in crates. However, it does not seem to make much sense to try to do some sort of Biggles operation to fly them in clandestinely. It is far better to ensure that they arrive there safely so that they can be used. The Bell Huey helicopter caused me some work during the past few weeks. It was repainted in Falkland Islands Government air service colours and great expectations were aroused when it was flown. We then had to find a way to insure the passengers since I could not agree to uninsured civilians being flown in the helicopter.
We solved that problem. We then had to find a helicopter pilot from the Army Air Corps who was type certificated and we had to ensure that the aircraft was airworthy. The helicopter mechanic, a Falkland Islander employed in Britain by the helicopter company, was sent out to the islands. He found that the helicopter had suffered a heavy landing and it was therefore impossible to certify it as safe. It will be shipped back to Britain for repair, but we are considering looking for another helicopter to be used for running a regular service. The costs and consequences of such an operation must, however, be examined.
The major issue of land reform was raised by many hon. Members. It was refreshing to hear a farmer talk about farming. My hon. Friend the Member for Dumfries (Sir H. Monro) obviously knew what he was talking about. He has been to the islands and he carried more conviction simply because he had more first-hand knowledge than is available from either the Shackleton report or from the speeches that we heard today. [Interruption.] All farmers are gentlemen. The hon. Member for South Ayrshire (Mr. Foulkes) would do well to remember that.
It is worth examining why Lord Shackleton keeps returning to the land reform recommendation in his report. Page 8, paragraph 2.4.1.(a), of the report states:
"the continuing high drain on resources from the Islands in the form of remittance undistributed profits and dividends must be stemmed."
The report's radical solution to the problem is
"to stem the flow of funds from the Islands and to encourage reinvestment of profits."
But if the ill is as described, the remedy must be appropriate. Paragraph 3.3.5. of the report on page 32 states that the Falkland Islands company has
"a somewhat better recent investment record than the other five companies examined and has made good the depreciation of its assets by reinvestment."
On that basis, there seems no good reason for singling out the Falkland Islands Company for land nationalisation, as Opposition Members appear to wish. If the remittance of profits is the ill that we must remedy, why can it not be cured by fiscal means? Fiscal means are in many ways appropriate. The Falkland Islands Government have powers that entitle them to use fiscal means if they wish.
As to what is supposed to be wrong with the farming economy of the islands despite what the hon. Member for Hamilton said, it has still not been established that small farms are likely to be more profitable. They are certainly not likely to employ more people. A farm that employs a man, his wife and son is not necessarily that much better an enterprise than a farm that employs a farmer and two wage-earning staff. Full-time employment of the farmer's
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wife does not necessarily represent an increase in the collective standard of living, but that is a matter of opinion.
The hon. Member for Bolton, East (Mr. Young) raised the issue of giving the islanders a stake in the islands. I hope that the hon. Member for Hamilton will not get this matter out of proportion. Much of the evidence that Lord Shackleton quoted was garnered before 1976. The hon. Member for Hamilton will find, if he goes to the islands, that there are many other ways of helping islanders to obtain stake in the islands. If he goes to West Falkland, he will find that an individual who is not an estate proprietor cannot own property there. If he wishes to retire there, he cannot buy a house. There are no smallholdings for sale anywhere on the islands at the moment.
The Falkland Islands Company's idea of bringing forward such properties is a sensible response to a perceived need. There are many different ways of obtaining a stake other than through the ownership of a small farm. The problem must be seen in the round.
We have heard quotations from Mr. Colin Smith and Mr. Bill Luxton, whom I met and to whom I took a great liking. In the article by Gavin Young in The Observer, Mr. Smith is quoted as saying:
"This farm is too big for us. I'd like 8,000 sheep here on 25,000 acres."
If I am right and he owns the property, what is there to stop him taking the initiative to break up his farm? The Government need not move in. If what Mr. Smith says is true, why cannot he find some means of putting small units on the market from the farms that he controls?
Apart from the fact that there is little evidence of the proper state of current demands, what is the future of the islanders? The hon. Member for Hamilton made much play of Mr. Gavin Young's article. It is true that Mr. Young stayed with Sir Rex Hunt in Port Stanley and, therefore, one would think that he was in a good position to report accurately upon what happens. But, unfortunately, the article from which the hon. Gentleman and others quoted was written before the meeting of the Legislative Council on 16 December that endorsed the proposed gradual approach to land transfer that is embodied in the Government's decisions. [Interruption] The hon. Member for Hamilton cannot quibble about that. The Falkland Islands Council did not endorse the wholesale purchase and sub-division of land. It decided that the gradual approach that we proposed, but with which the hon. Gentleman finds fault, was the path down which it wished to go. That is the latest, the best and the most accurate test of island opinion that we can quote. The evidence is on the side of the Government and not on the side of the hon. Gentleman.
Mr. Clinton Davis: Are we to conclude, therefore, that the Minister is satisfied with the operations of the Falkland Islands Company in almost every material respect? How does he justify that in the light of the criticisms that I was able to adduce in my opening speech, based on firm evidence?
Mr. Onslow: I do not believe that they were based on firm evidence and I was not impresed by what the hon. Gentleman said. That is shown by the fact that I have not changed my mind. I am sorry, but that is how debates go.
It is worth quoting to the House what Lord Shackleton says about air communications in paragraph 2.7.1 of the report:

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"The establishment of regular civil air communication with the Islands is an absolute priority. Without it, little or no development would take place, the economy would decline further, and the sense of isolation would probably be unacceptable to the majority of Falkland Islanders".
The Falkland Islanders must express their opinion about that and they have not come to the conclusion that Lord Shackleton tries to put into their minds. They are not unused to isolation. Their fragile way of life has an isolated quality about it. They will not be put off developing their islands simply because there is not an established air service to the South American mainland. We should not be put off helping them to develop their economy because there is no such link. If we show resolution and fairness, such links will emerge in the natural course of events.
Hon. Members who whinge away are doing their utmost to make it impossible for the Falkland Islanders to succeed. Had this been a football field, many own goals would have been scored by some of the bitter and twisted speeches from the Opposition. The Falkland Islanders will not recognise that as a spirit embodied in themselves or represented by the Service men in their midst, who show what we feel about their prospects. [Interruption.] Although I sometimes fall out with the hon. Member for West Derby, he need not interrupt me. He made many points, including the important point that we should let the Falkland Islanders set the pace. We shall not run their lives for them. We wish to give them the opportunity to run their lives themselves, to give them security and to give them the opportunity to develop greater confidence and greater independence in their own time and way. The one matter that represents the collective will of the House is that we are not in the business of telling the Falkland Islanders what they should do. We are not running their country for them. We are standing guard to enable them to live their lives in their own way.
Mr. Tristan Garel-Jones: I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

PETITION

  Royal Marsden Hospital (Breast Cancer Screening Unit)
  10 pm
  Miss Joan Lestor: I wish to present a petition signed by 20,000 people to the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, which showeth:
  That the breast cancer screening unit at the Royal Marsden Hospital is the only one of its kind in London.
  That some 10,000 women each year make use of this facility.
  Wherefore your Petitioners pray that your Honourable House will urge the Government to make sufficient funds available to keep open the breast cancer screening unit at the Royal Marsden Hospital.
  And your Petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

Lancashire (Education)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]
10.1 pm
Mr. Stan Thorne: I am indebted to Mr. Speaker for the opportunity to ventilate the subject of Lancashire's educational needs and Government funding for 1983–84.
Lancashire must make cuts in expenditure next year in the order of 2½ per cent. if penalties are to be avoided. Building maintenance was reduced over several years until the 1982–83 Budget. A sum of £35 million will be needed to bring premises up to a reasonable state of repair. Thereafter, about £12 million per annum would maintain acceptable standards.
Recently, the chairman of Lancashire county council Mrs. Louise Ellman, at a special meeting, approved a massive crash maintenance and repair programme for county buildings with a target of £4 million. There will necessarily be a need for exemption from penalties if Lancashire education authority spends £35 million in 1983–84. It is not—I make this clear to the Minister—asking for more money but for an exemption from penalties.
Every year buildings deteriorate further. The review of surplus school places identifies not only new buildings and improvements but repairs as well.
Lancashire's unemployment is at a very high level—nearly 20 per cent. in some parts of the county—and public expenditure is thus transferred from building, maintenance and new projects into supplementary benefits, unemployment benefits and so on. This year, approximately 13,800 young people in Lancashire left schools and colleges. Job vacancies numbered 111. This immediately raises the question of training opportunities and further education, to which I shall return later. Statistics show that Lancashire is either on or below average in terms of provision in almost all areas of education. The chairman of the education committee, Councillor Josephine Farrington, has been battling bravely with this problem. Administration is now below average, and staff increases are needed to deal with school choice appeals, post-16 careers, and in-service needs to meet new demands for a thorough review of surplus places. For example, population trends and educational and social needs have been exacerbated by many old buildings that date back as far as Waterloo. Some schools are not in the right place, and changes since the Industrial Revolution have made the problem much more complex.
Welfare benefits are another factor, as a high percentage of pupils require free school meals because of unemployment and low incomes. Last year saw the first improvement in uniform clothing grants for many years, during which inflation had been ignored, but £27·50 for a secondary pupil is totally inadequate to meet real costs today. The maximum maintenance allowance for 16-plus pupils in schools and colleges is now £375. As a result, there is pressure on able youngsters to leave full-time study because of near poverty subsistence. Adults seeking further education are unable to live on their allocation, yet are very much in need of new skills.
In the primary school sector, there is a problem about the age of the buildings. In Lancashire, 231 schools,
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providing 40,000 places, date back to 1903. In addition, there are 23 split sites, 115 schools with no hall, 24 with all the toilets outdoors and 61 with some toilets outdoors.
Temporary accommodation in Lancashire primary schools represents less than 5 per cent. of total places compared with 10 per cent. nationally, thus making it more difficult to take surplus places out of use. Population movements mean that primary schools are sometimes in the wrong location. Despite overall falling pupil rolls, additional primary school places are still required in growth areas such as the central Lancashire new town areas.
Capital receipts from the sale of surplus education buildings and land are relatively modest because property values in Lancashire are low compared with other parts of the country such as London and the Home Counties.
Reviews of primary schools show that it is sometimes necessary to provide a new school to replace existing schools, thereby getting rid of surplus places; to enlarge one building in order to take other premises out of use; and to upgrade the premises of retained schools so that changes in the pattern of primary schools in an area are reasonably acceptable to local people.
The pupil-teacher ratio in Lancashire is 23:3. The average among all local education authorities is 22:3. However, among LEAs displaying similar additional educational needs of Lancashire, the ratio is 21:6. The unit cost in Lancashire of teaching staff is only £411, whereas the average for all LEAs is £448. Among LEAs displaying similar additional educational needs of Lancashire, the figure is £457. Therefore, high cost is not the problem.
Deficiencies in the pupil-teacher ratio in the primary sector lead either to less remedial help, larger classes, classes covering a wider age range, or all three. Inadequate capitation widens the gap between affluent and poor area schools, thereby placing a greater reliance on local fundraising in certain areas.
Books in primary schools are a major factor in the search for good education practice. Out-of-date books may hamper the work, for instance, in multicultural education. Reading books become so precious that pupils may be prevented from taking them home. We need to increase expenditure on books.
In the secondary sector, capitation is below average. Children are sharing examination books. The syllabus includes home study, but how can that be done? Here again, the pupil-teacher ratio militates against adequate remedial provision, which becomes more necessary because of the deprivation at primary level, which I have already mentioned.
There are many pressures on the service in adult education, including social factors and language problems. In Lancashire, we have large ethnic groups in Blackburn, Preston, Burnley, and elsewhere. There is also the problem of the older unemployed and retraining for new jobs in technology. One wonders why it is taking so much longer to get Home Office approval under section II.
I shall say a word about the youth service. If we compare Lancashire with other shire authorities, of which there are 39, Lancashire spends 13·15 per cent. less than the average expenditure of the 39 non-metropolitan authorities. There are six other large authorities, including Hampshire and Cheshire. Lancashire spends 8·7 per cent. less than they do.

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The DES analysis carried out in July 1982 on the needs of authorities, using several socio-economic criteria—for instance, the number of children taking school dinners—drew attention to the authorities that wish to spend more. Clearly, Lancashire is one of those. It should be spending more, because 31 of the 39 shires need less than Lancashire. Youth unemployment has meant greater demands on the youth service.
It is interesting to note that the Lancashire Council for Voluntary Youth Services held a conference recently on the Thompson report. I shall not quote it at length, because I want to give the Minister an opportunity to reply to my speech, but it said:
"We are in agreement that Social Education is the main task of the Youth Service and welcome the reference to the balance of relationships which has led to work with specialist groups. Every effort is needed to encourage and facilitate the involvement of young people in society at relevant levels. We endorse the need for further legislation … In Lancashire, of course, we have made progress on these lines and the foundation has been laid to extend the opportunities … The needs set out in this report"
that is, the Thompson report
"make great and overwhelming demands on the Youth Service at all levels."
Again, we are talking about resources and whether they will be provided to underline the Thompson report recommendations.
Slight improvements have been made in the psychological services in 1982–83 through the employment of eight more educational psychologists. However, special needs are not met at the right time, and that can result in more expense later. Again, it is a question of finding the resources to extend the service.
On further education, we do not know what percentage of students in Lancashire will need what provision, under which mode, or at what cost to the LEA. However, we do know that training provision from Easter 1983 has to be planned for by the education authority. Perhaps the Minister can tell me what happens to students at the end of the first year.
My last point relates to the Preston polytechnic. I shall give the Minister a few facts, and then put my final question.
The number of higher education places per head of population in Lancashire is well below the average, making Lancashire a net exporter of higher education. The polytechnic serves Lancashire and Cumbria well in that it has developed strong links with local industry, commerce and community services. It provides education for a large number of part-time students. In fact, only a few other polytechnics teach more part-time students.
Preston polytechnic is a relatively new institution which is now consolidating its position within Lancashire and Cumbria and needs to continue with its building programme in order to fully serve the local community. The polytechnic staff recognise that there is a great need to provide education for adults who are turning to higher education for the first time and also for those who are returning to higher education because of changing circumstances. The simple profit and loss approach to education is unacceptable in this area. The needs of those people cannot be fully met if one is concerned only with the number of students per staff member.
My final question to the Minister is set in the context of the overall problems of Lancashire's education policy. What action can he take—perhaps in pressurising the
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Treasury to make funds available—to meet the needs of education in Lancashire? I await his comments with interest.
10.15 pm
The Under-Secretary of State for Education and Science (Mr. William Shelton): I am grateful to the hon. Member for Preston, South (Mr. Thorne) for giving the House an opportunity to debate this subject. I note hat he is a former deputy chairman of the Liverpool education committee and I well recognise his interest in this matter. Lancashire is one of the largest local authorities in Britain in terms of its population, size and budget. For 1982–83 Lancashire's total budget is well in excess of £400 million, and for 1983–84 its expenditure target is about £465 million. Education accounts for some 60 per cent. of the authority's expenditure. Therefore, I recognise the importance of the matter that the hon. Gentleman has raised and I shall do my best to answer, if not all, as many as I can of his questions.
The Government are concerned about the education needs of the people of Lancashire. The Government's expenditure plans take careful account of those needs, as I hope to show. I do not hide the fact that the authority, like other authorities, faces difficult decisions. However, in devising their plans the Government are not blind to the problems faced by authorities such as Lancashire.
First, I shall say a word about the public expenditure plans. Details of the rate support grant settlement for 1983–84 were announced by my right hon. Friend the Secretary of State for the Environment last week. My right hon. Friend described the national plans for current expenditure on education underlying the settlement on 8 November.
As is the habit nowadays, the plans are expressed in cash, and the level of services that can be provided will depend on the extent to which local authorities can contain their cost increases and, in particular, on the level of pay settlements for local authority employees in the months ahead. That is of crucial importance. For example, if pay settlements are of the order of 3 ½ per cent. next year, some further improvement in national pupil-teacher ratios will be possible. Britain's pupil-teacher ratios on average are now at record levels. They have never been better in Britain's education history. I understand, as the hon. Gentleman said, that pupil-teacher ratios in Lancashire are below the average for the shire counties. However, that is a matter for decision by the authority itself. The authority must decide on the expenditure balance between education and the other services which it provides for its community.
If authorities are able to restrain their cost increases to about 4 per cent., overall provision per pupil nationally on new books and equipment—which the hon. Gentleman mentioned—could also be improved, and the level of repairs and maintenance restored. In non-advanced further education the plans allow for a further increase nationally in demand for full-time and sandwich courses from 16 to 19-year-olds. Whatever the reason, we are glad that more youngsters are staying on after the age of 16 both in schools and in further education.
As the hon. Gentleman knows, the grant-related expenditure assessments seek to determine the level of spending necessary for each authority to provide a common level of service, bearing in mind the special needs and circumstances of the authority. The total GRE

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is derived from the Government's national expenditure plans, and is distributed among individual authorities on the basis of their relative needs.
The GRE assessments for education are based upon the number of pupils and students for whom each authority must provide. There are also a number of other factors of which the hon. Gentleman is aware. It includes, for instance, an allowance for unemployment among young people. Provision has been made in the Government's plans for expenditure of £70 million by local education authorities in 1983–84 to encourage young people who might otherwise be unemployed to remain in full-time education. We recognise that the increased numbers staying on in full-time education represents a cost for the authorities. This sum has been distributed among local education authorities by reference to their numbers of young unemployed.
In 1981–82 and 1982–83 Lancashire contained its total expenditure within the Government guidelines. We must recognise that. Consequently, its expenditure target for 1983–84 represents an increase of 4 per cent.—some £18 million in cash—from its budget for 1982–83. This reflects the Government's policy to seek greater financial restraint from those local authorities which, unlike Lancashire, have in the past ignored our guidelines and continued to spend at levels above that which we believe the country can afford.
Falling rolls and pupil places is an issue of great importance, especially in Lancashire. It would be wrong to infer from this talk of expenditure that the level of expenditure alone determines the quality of an authority's education service. People are recognising that within limits there is no inexorable or automatic bond between more expenditure and better quality. An authority's ability to respond fully to the needs of its population depends also on the effectiveness with which it deploys its expenditure. Effective management is particularly important at present, when local authorities are faced with falling pupil numbers and the need to take surplus school places out of use.
We are not saying that every last surplus place should be removed. The empty places, just like the country's population, are not evenly spread. We recognise that in a new town, for instance, there may be increasing rather than diminishing pressure.
That is why as a general, national, target we are asking local education authorities to take out of use only two out of every five surplus places. This leaves a good deal of scope for schools to use accommodation not needed for classrooms in different ways—for example, as parent rooms. It leaves local education authorities considerable scope to act in accordance with their circumstances. We do not expect large counties with many rural areas to be able to take out surplus places at the same rate as closely populated urban authorities.
We would not expect Lancashire, for example, to remove 40 per cent. of its 46,000 spare places. What we ask is that local education authorities should study the circumstances of each of their areas and consider what could and should be done. I know that Lancashire has been doing that on the secondary front and I am glad that now a similar effort is taking place to bring primary schools into better line with pupil numbers. We welcome that.
The hon. Gentleman mentioned meals. In the same way, an authority's ability to respond to the educational
1048
needs of its population within the resources available will depend upon its readiness to make savings in its expenditure on, for instance, school meals. A number of education authorities have responded to this challenge by reorganising their service. I know that Lancashire has introduced the cash cafeteria system which, experience shows, is likely to encourage pupils to continue to take a meal at school.
However, the proportion of Lancashire secondary pupils who were taking a school meal in October 1981–53 per cent.—was higher than in the country as a whole—44 per cent.—and was higher, indeed, than the proportion in the country as a whole in 1979. Clearly it is not necessarily straightforward to achieve savings. I recognise that. However, the experience of some authorities in finding cheaper and more efficient ways of providing meals shows perhaps what can be done.
The hon. Gentleman asked about provision for capital allocations. The total provision for LEA capital spending on schools and further education in 1983–84 was £273 million. This means that the provision of capital for school improvements and the removal of surplus places has been maintained. Further LEAs have been able to make a small increase in their spending on further education equipment.
Individual LEAs were informed of their allocations from this total by letter last week. As ever, total LEA bids for education capital allocations far exceeded the total available, so we had to weigh each authority's needs carefully. In Lancashire's case, the need to rationalise primary schools to remove some of the 46,000 surplus places obviously represents a substantial capital cost, especially since certain of the schools are old or defective in some way or other.
These points have been made to us by hon. Members with Lancashire constituencies from both sides of the House, including my hon. Friends the Members for North Fylde (Sir W. Clegg) and Preston, North (Mr. Atkins). The sum of nearly £12 million that has been made available for country and voluntary projects in schools and further education should enable Lancashire to meet its main requirements. Having weighed its needs and special circumstances, we think that the county should find this sum sufficient to take forward existing commitments and to begin to meet other pressing needs.
Furthermore, I should like to draw attention to the flexibility that is available to local authorities to make up any shortfalls in particular programmes by virement between services, between authorities and between years. The Local Government, Planning and Land Act 1980 allows for this, and the extent of overall underspending suggests that the education service as the full spender should, where possible, be topped up from other services. I hope that Lancashire and other authorities will keep this flexibility in mind.
The fact that the education service is ready and able to make use of this flexibility was proved recently by the Lancashire education authority's response to the criteria of my right hon. Friend the Secretary of State for the Environment to make up the underspend on capital accounts in 1983–84. The Lancashire LEA's bid for additional capital spending on education of nearly £1·5 million was agreed to. In the meantime, the authority is seeking additional loan sanction for about £3 million to carry out repairs and maintenance to education buildings. This is now under consideration by the Department of the Environment.

1049
The hon. Gentleman spoke of youth training in Lancashire and the amount of youth unemployment, which we recognise. The MSC has built up its YOP programme in Lancashire from negligible levels to about 20,000 places a year. In 1981–82 and 1982–83. The training that is offered aims to help young people to develop maturity, confidence and independance. For slightly older people TOPS courses are available.
In early 1983 we shall have a massive marketing operation for the new youth training scheme. It will provide a one-year programme of education and training. We think that it will be of great importance.
Mr. Stan Thorne: What will happen to the young people after the one year of training?
Mr. Shelton: I should be unhappy if the fact that a job might not be automatically available at the end of a year's training made a youngster wish not to undertake the training. There is no doubt that this sort of training will increase the likelihood of a young person obtaining a job. Secondly, when, fairly soon, the recession ends, a bottleneck—it is one that always occurs in such circumstances—could arise because of a lack of skilled manpower. It is clear from looking through the newspapers that there are places for skilled people. There are shortages of skilled people. Unemployment is mainly among the manually unskilled. Even though there is no guarantee of a job—I wish that there were—there is no doubt in my mind that it is very much to the advantage of young people to get this training.
1050
Unfortunately, time does not permit me to say much about adult education. If the hon. Gentleman would like to talk to me after the debate or to write to me, I shall be delighted to answer his questions. I hope that I have said something to reassure him of our concern for educational needs.
I agree that Lancashire has been a relatively low spender on education compared with its expenditure on other services. That is a matter for the councillors of Lancashire. Its expenditure per pupil in primary and secondary schools is well below the average for shire counties in the current year. It should now be assessing its relative levels of expenditure on individual services in the light of the relative needs for expenditure on education and other services. The authority rightly carries the final decision about expenditure on education in 1983–84.
My right hon. Friend the Secretary of State for Education and Science is looking forward to visiting Lancashire in the new year. I am sure that the authority will take that opportunity to acquaint him of its needs and the problems that it faces. The hon. Gentleman has asked many questions. I have answered as many as I can in the time available, but if I leave—
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-nine minutes to Eleven o'clock.

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Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Reverend the Lord Sandford.

Royal Assent
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Commonwealth Development Corporation Act,

National Insurance Surcharge Act,

Electricity (Financial Provisions) (Scotland) Act,

Lands Valuation Amendment (Scotland) Act,

Writers to the Signet Dependants' Annuity Fund Order Confirmation Act,

Highland Region (Banavie Level Crossing) Order Confirmation Act,

Lerwick Harbour Order Confirmation Act,

Western Isles Islands Council (Omnibus Services) Order Confirmation Act.

European Assembly Elections: Postal Vote
11.6 a.m.
Lord Harris of Greenwich: 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 when they propose to introduce legislation to give a postal vote to United Kingdom citizens residing in other European Community countries for elections to the European Assembly.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, the Council of Ministers of the European Community is currently considering the European Parliament's proposals for a uniform electoral system under which nationals of member states would be able to vote in elections to the Parliament, irrespective of their place of residence in the Community. The Government do not propose to introduce legislation, changing the franchise at European Parliament elections, before the council has reached agreement on this issue. It is still not clear when this will happen.
Lord Harris of Greenwich: My Lords, in thanking the Minister for that reply, may I ask whether it means that if in fact the Council of Ministers does not reach
1064
agreement in good time for the next European Assembly election, up to 300,000 British citizens will be disfranchised at the election?
Lord Elton: My Lords, since they are not now enfranchised, they will not be disfranchised. But in answer to the substance of the noble Lord's supplementary question, I would say that we would not intend to legislate before agreement is reached.
Baroness White: My Lords, is the noble Lord not aware that six of our fellow member states in the European Community have been able to make arrangements for their citizens living in other parts of the Community to vote? Why should British citizens be at such a great civic disadvantage? Cannot the Government find a way, even if subsequent legislation might have to modify it, to enable these persons to vote in the forthcoming election, in 1984?
Lord Elton: My Lords, as I have been at pains to explain, it is not our intention to legislate ahead of agreement reached in the Council of Ministers on this matter. To do so would in the end prove nugatory.
Baroness White: But, my Lords, six other member states have not waited for the council; they took action several years ago.
Lord Elton: My Lords, the variety of provisions within Europe is considerable. Different countries have different arrangements, and the question is: Which is the best arrangement? It is the best arrangement to which we wish to subscribe. That will be the arrangement that is agreed by the Council of Ministers.
Lord Underhill: My Lords, may I ask the Minister whether there are not three important considerations that must be kept in mind? First, the proposal in the Question of the noble Lord, Lord Harris of Greenwich, for absent voting, extends facilities for persons overseas far beyond those given to British citizens overseas for parliamentary elections. Secondly, if there is to be no national list system, would not the question of allocation to a parliamentary constituency be a very important matter in registration? Thirdly, if there was to be registration in a constituency, should there be a maximum period for overseas residents beyond which they would not qualify? Otherwise, persons who had been away for 30 or 40 years could qualify in a European constituency in this country.
Lord Elton: My Lords, the noble Lord is quite right; there are many important and difficult considerations, all of which are at present with the European Council and which Her Majesty's Government will have to consider when the matter comes to us.
Lord Paget of Northampton: My Lords, can the noble Lord give us an assurance that nothing will be done to increase the already gross expenses to which we are put to elect this absurd assembly?
Lord Elton: My Lords, I would not join the noble Lord in any such description of the assembly, but I would endorse the point that Her Majesty's Government are always sensitive to issues of economy.
Lord Harris of Greenwich: My Lords, may I ask the noble Lord what has changed since his honourable and right honourable friends in another place tried to amend the Act relating to the European Assembly, when they advocated precisely the change that I am suggesting in this Question? Secondly, may I ask the noble Lord whether he is aware of a sense of burning injustice felt by many hundreds of thousands of our fellow citizens who are not getting the vote in these elections? Could not the noble Lord at least ask his right honourable friend the Home Secretary to pass on the views of these people? As I have indicated, they do not understand why, when in many cases they are doing urgent work, promoting British trade, they do not get the vote in these elections.
Lord Elton: My Lords, as to the sense of burning injustice, my right honourable friend is aware of all the representations that have been made, and I shall draw his attention to the representation that the noble Lord has made. As for the rest of the noble Lord's supplementary question, I can only revert to my original Answer: that it is our view that it would be untimely to legislate in advance of a decision that might render entirely out of context and improper the legislation that we passed.

Nuclear Disarmament Negotiations
11.11 a.m.
Earl Alexander of Tunis: 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, in view of the new Soviet leader Mr. Andropov's reported comment,
"Let no one expect unilateral disarmament from us, we are not a naive people".
they will make a Statement on East/West disarmament negotiations.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, it has long been the British Government's view that unilateral, or onesided, disarmament would be naive in the extreme. The route to successful arms control is through multilateral negotiations, the objective of which is to preserve or, if possible, enhance our security through balanced and verifiable reductions of armaments on both sides. To this end we support the allied position in the talks on conventional forces in Vienna, and the two negotiations in Geneva on intermediate range and strategic nuclear weapons, at which the United States have, with allied support, proposed radical cuts in the levels of nuclear weapons. We should like to see the Soviet Union respond constructively to these proposals.
Earl Alexander of Tunis: My Lords, while I thank my noble friend for his reply, would he not agree that those in this country who campaign for unilateral disarmament, show a dangerous lack of judgment? Should not Her Majesty's Government do more to persuade the British public that there can be peace only through strength, and that the siting of cruise missiles in this country, for example, demonstrates our resolve to protect ourselves?
Lord Belstead: My Lords, I agree with my noble friend's assessment and also I agree with my noble friend that, provided we remain firm in the intentions which we have stated, that is the way that we will be most likely to get an arms control agreement which is both balanced and verifiable.
Lord Brockway: My Lords, is it not possible for the Government to adopt a more negotiating attitude? Is it the case that Mr. Andropov yesterday offered to reduce by more than two-thirds the medium missiles in Europe; and does this not follow an offer to cut the SS2s by 20, to withdraw missiles from central Europe and to propose that nuclear weapons should not be used first? In view of all these offers, rather than mere rejection, is it not possible to take negotiations when they are made?
Lord Belstead: My Lords, the Andropov offer is bogus. It endeavours to equate intermediate-range land-based nuclear missiles (which only the Russians hold) targeted at every single country in Western Europe with strategic weapons which both France and the United Kingdom hold. That is not equating like with like. If, for the first time, the Russians now accept the principle that their SS20s must be reduced before there can be greater security, that, I would agree with the noble Lord, is a step in the right direction. But to demand a substantial and continuing Soviet monopoly of longer-range, land-based missiles in Europe while insisting that NATO alone should implement the zero option, is not a serious negotiating position.
Lord Nugent of Guildford: My Lords, while any offer to reduce Russian arms is welcome, can my noble friend confirm the impression that the Russian offer would have the effect of reducing their medium-range missiles to some extent but of removing ours altogether?
Lord Belstead: My Lords, perhaps, for the record, the way I should reply is that my understanding is that Mr. Andropov's offer would be to remove all the old Russian SS4s and SS5s and to reduce the very modern SS20 Russian rockets to the equivalents of the British and French independent strategic missile forces, while allowing no deployment at all of the American intermediate-range cruise and Pershing missiles. My understanding of that, as a conclusion, is it would mean that there would therefore be a monopoly—and I am agreeing with my noble friend—of Russian intermediate-range weapons in Europe still targeted upon every single country in Western Europe.
Lord Hale: My Lords, may I ask the noble Lord whether he really is answering the Question on the Order Paper or is he referring to a later Statement which is not on the Order Paper; and can he add whether the Question on the Order Paper refers to a statement made, or alleged by the Daily Express or Pravda, to have been made by Mr. Andropov, in Russian or in English, and to what extent we may henceforward put down on the Order Paper observations of persons of almost any nationality?
Lord Belstead: My Lords, the supplementary question which the noble Lord, Lord Brockway, asked me about Mr. Andropov's offer, arises from one of the disarmament negotiations which are going on at the moment between East and West—which is what the original Question was about.
The Earl of Kimberley: My Lords, would my noble friend not agree that the time has come to regard some of the organisers of the so-called Peace Movements as being openly hostile to our own country as well as to the whole of the Western Alliance?
Lord Belstead: My Lords, I think that all your Lordships would well understand the distaste, indeed the dismay, of many people at the thought of nuclear war; but, in Her Majesty's Government's view and in the view of the Western Alliance, it is only by steadiness and determination that we shall reach the goal of an agreed, balanced and verifiable disarmament.
Lord Taylor of Gryfe: My Lords, has the noble Lord read the interesting article in today's Financial Times on the offer by Mr. Andropov, an article which concludes that, although the detail of the offer is contentious and the bargaining road ahead is hard, at least both sides are talking the same language? Does this not encourage the noble Lord to take a more positive attitude to keep the dialogue going on this important subject—particularly at Christmas?
Lord Belstead: My Lords, certainly it is the intention of the West to see that the dialogue is kept going in the INF and at the START talks in Geneva and also in the MBFR talks in Vienna.
Lord Jenkins of Putney: My Lords, is it not the case that to keep the dialogue going the best way is not to describe Mr. Andropov's offer as "bogus"? Is the noble Lord aware that the Russians regard President Reagan's zero option as equally bogus; and that if one merely trades insults, that is not the best way of getting serious talks going?
Lord Belstead: My Lords, the offer is bogus because it deliberately mixes the two sets of negotiations which are going on in Geneva at the present time. An offer to reduce Russian intermediate-range land-based missiles, of which at the moment the Soviet Union has a monopoly, by a trade-off against strategic systems held by the British and the French, is a bogus offer. It would end, as pointed out by my noble friend Lord Nugent of Guildford, in the unwelcome result of maintaining a monopoly for Russia in land-based
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missiles of the intermediate range sort, targeted on every country in Western Europe.
Lord Kennet: My Lords, would the noble Lord recall the complete quotation from Mr. Andropov, of which the Question of the noble Earl, Lord Alexander, quoted only a part? The quotation was as follows:
"Let no-one expect unilateral disarmament from us: we are not a naive people."
Then it continues:
"Nor do we expect unilateral disarmament from the West."
Lord Belstead: My Lords, I am grateful to the noble Lord, Lord Kennet, for that timely question.
Baroness Wootton of Abinger: My Lords, is it not rather a strange use of language to call an offer of that kind "bogus"? A bogus offer, as I understand it, is one which the party making it does not intend to carry out. It would be perfectly legitimate to call this an "unacceptable" offer, but I think it is somewhat provocative to introduce the word "bogus".
Lord Belstead: My Lords, a bogus offer is an offer which is deliberately misleading. Perhaps it would be better if I repeated my final words when talking of Mr. Andropov's offer when I said that the offer is not "a serious negotiating position."
Viscount St. Davids: My Lords, will the noble Lord comment on a rather simple idea in dealing with this question of unilateral disarmament? Should we not give the Russians a permanent three-to-one advantage, on the basis that for every 30,000 nuclear disarmers we allow to run free round our bases they will allow 10,000 to run freely round theirs? Perhaps we could send the noble Lord, Lord Brockway, and his friends to put this proposition and, if they did not wish to do so or if the Russians turned it down, would we then understand how rubbishy it was?
Lord Belstead: My Lords, of course it is a fact that the ability to express views about the perils of nuclear warfare is open to people in the free countries of the West but not to those in the Soviet Union.
Lord Mackie of Benshie: My Lords—
The Lord Privy Seal (Baroness Young): My Lords, I think we have had a very long run on this Question. Perhaps I may suggest that we take the one question from the noble Lord, Lord Mackie, and then move on.
Lord Mackie of Benshie: My Lords, while I agree entirely with the Minister's basic attitude, is it not a fact that we are losing the propaganda war? If we make announcements at the wrong time and the Russians are being much more skilful at propaganda, perhaps we should think a little more about the effect of announcements such as, for example, that about the "dense pack" at a time when a great many people who are foolish in their final answer, in my view, are very worried by the whole thing? In other words, does the Minister not think that our propaganda posture could be improved?
Lord Belstead: My Lords, I entirely take the point of the noble Lord, Lord Mackie, that it is essential to make it clear to people generally that the West wishes to hold out the hand of friendship. Therefore, may I seize the opportunity to remind the House that in the INF talks, the offer from the West is for no land-based missiles at all to threaten the people of Europe, both on the Russian side of the European border and on the Western side of the European border. The offer from the West in the START negotiations is for deep cuts in these terrible inter-continental ballistic missiles. The offer from the West in the MBFR talks in Vienna, which have been going on for eight long years, is for very substantial reductions in conventional forces on the central front in Europe. The West is holding out the hand of friendship and does want to find a way to get verifiable but balanced reductions in forces.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Earl Ferrers will, with the leave of the House, repeat a Statement to be made in another place on the Fisheries Council held on 21st December.
My noble friend Lord Trefgarne will, again with the leave of the House, repeat a Statement on the Monopolies and Mergers Commission report on the proposed merger between Charter Consolidated and Anderson Strathclyde.

Local Government (Choice of Electoral Systems) Bill [H.L.]
Lord Harris of Greenwich: My Lords, I beg to introduce a Bill to enable certain local government elections in England and Wales to be held by that system which entitles each elector to a single transferable vote. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.——(Lord Harris of Greenwich.)
On Question, Bill read a first time, and to be printed.

Representation of the People Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Legal Aid (Scotland) (Exclusion of Proceedings) Regulations 1982
11.27 a.m.
Lord Lyell Lord Lyell rose to move, That the regulations laid before the House on 1st December 1982 be approved.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. The regulations provide that legal aid will not be available
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for divorce proceedings which are or could be initiated under what has come to be known as the Cowie procedure. Legal advice and assistance will be available instead, if sought by the parties involved in divorce proceedings. The Cowie procedure will be introduced into the Court of Session on 11th January 1983 by the Act of Sederunt (Rules of Court Amendment No. 6) (Simplified Divorce Procedure) 1982 and will apply to those undefended divorce actions on the grounds of non-cohabitation for two or five years, where there are no children of the marriage under 16 years of age, where no order for financial provision is sought and neither party suffers from mental disorder.
The new procedure is intended to be simple enough to be genuinely "do it yourself so that individuals will be able to seek a divorce without necessarily needing the professional advice of a lawyer. Nevertheless, should there be any uncertainty about the operation of the new procedure, or doubt about the questions to be answered on the various forms, a solicitor may be consulted under the Legal Advice and Assistance Scheme.
The removal of legal aid from actions in the Cowie category will have among its principal benefits the elimination of the need for an often time-consuming and costly assessment of the applicant's financial means by the Department of Health and Social Security. The Scottish Association of Citizens' Advice Bureaux has been involved in the preparation of an explanatory leaflet on the procedure. Both the leaflet and application forms will be widely available through sheriff courts and citizens' advice bureaux as well as in the Court of Session. Legal aid will, of course, continue to be available for all other categories of divorce actions in the usual way. It is not thought necessary to prescribe a higher limit for advice and assistance in connection with Cowie divorce. This possibility was given careful consideration. However, after consulting the Legal Aid Central Committee of the Law Society of Scotland, we decided against such a course. The committee considered that such a provision was unnecessary, and was indeed likely to lead to confusion, administrative problems and needless expense to the legal aid fund. It is, however, intended to monitor the position and if it appears administratively desirable to prescribe a higher limit, further regulations will be made.
The regulations before your Lordships represent a sensible measure to complement the Act of Sederunt so that the savings which the new procedure will bring to divorcing couples may also benefit the Legal Aid Fund. My Lords, I beg to commend these regulations and to move the Motion in my name.
Moved, That the regulations laid before the House on 1st December 1982 be approved.—(Lord Lyell.)
11.30 a.m.
Lord Mishcon: My Lords, I am sure that the House will be indebted to the noble Lord, Lord Lyell, for his explanation of these regulations and for the familiar way in which he uttered the names that apply to Scots law and which are not so familiar to many of your Lordships. He showed a familiarity with them which is

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to be praised, although I wonder whether it really lends towards the memory of any individual that his name should be attached to a divorce. I wonder whether Scotland will have second thoughts about the idea of a Cowie divorce, which means that one Scots lady will presumably say to another: "Did you obtain a Cowie divorce or a non-Cowie divorce?"
Speaking generally, it obviously is sensible that the Scottish legal aid regulations coincide in regard to simple divorce matters with those that are applicable in the rest of the United Kingdom. The only observation that one would make—I think generally not only in regard to legal aid regulations in Scotland, but throughout the United Kingdom—is that there does not seem to be enough provision made for a conciliation procedure where legal aid might be applicable. This is essential. This is something which I think is a defect in Scotland as well as in the rest of the United Kingdom. Many lawyers who are skilled in the art of advising people on a human basis, as well as on a legal basis, would like to have the opportunity of seeing whether on given facts there is a chance of reconciliation—mainly, as your Lordships know, for the benefit of the children as well as obviously for the parties concerned.
So I wonder whether thought can be given in the future—it obviously cannot be incorporated in these regulations, but it is an opportunity for mentioning this point—to have another look at the whole way in which our family law is dealt with in the divorce courts to consider proposals that I know that the noble and learned Lord the Lord Chancellor has for one court to deal with these matters in the United Kingdom. Scotland I think will also want to look at this. Also, can there be thoughts as to whether there could be, with legal aid applicable, an informal conciliation procedure where parties can go and have informal talks to see whether a reconciliation is not, in all the circumstances, sensible and a divorce can be avoided? Apart from this, I have nothing more to say in regard to these specific regulations.
Lord Lyell: My Lords, we are very grateful for the kindly comments from the noble Lord, Lord Mishcon, on the somewhat complicated name of the Act of Sederunt. We hope that the name of Cowie will not be attached in any unpleasant way to the thoughts of divorcing couples. The name of Cowie might well attach itself to the thoughts of compassion and possible reconciliation, which the noble Lord mentioned in his typical fashion. We are, after all, discussing rather sad events should they occur in the lives of any of us—possible divorce.
The noble Lord mentioned the possibility of reconciliation. He also drew attention to the possible position of children in divorce procedures. The noble Lord no doubt will have noticed in the regulations that a schedule is attached which is called Form 19A. It refers to "Part I" and "Part I continued"—it is rather like one of these hideous application forms that we have to fill in for passports, driving licences, and so on. Some of the clearer aspects in this form are concerned with reconciliation. It asks quite clearly in paragraph (6) of Part I of this form, which will under the Cowie
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procedures be explained, if necessary, to the parties by a solicitor, as follows:
"Is there any reasonable prospect of reconciliation with your husband or wife?"
One is asked to strike out, "Yes" or, "No".
In the second part of paragraph 6 it is asked:
"Do you consider that the marriage has broken down irretrievably? Answer, 'Yes' or, 'No' ".
I understand that this has to be completed by both prospective partners or ex-partners, so at least we have gone part of the way, we hope, to meet the possibility of reconciliation and not bring in too hasty action in divorces of this nature.
Also in paragraph 9 of Part I we find another question which is simple enough:
"Are there any children of the marriage under the age of 16?"
One is asked to reply, "Yes" or. "No". I stressed in the four main points which would have to be met in order to obtain a simplified divorce under this procedure which I have outlined that, first of all, there has to be non-cohabitation for two or possibly five years. Secondly—and I am sure that the noble Lord, Lord Mishcon, will accept this—there must be no children of the marriage under 16 years of age. If there are children then the Cowie procedures would not necessarily apply. They might do so but, as I understand it, if there are children under 16 years of age, I do not believe that these procedures would necessarily be adopted. If I am wrong, I shall inform the noble Lord. He will appreciate that with the Christmas and New Year break it may be a little while before I am able to reply, if that is necessary.
I have further information on why there is no provision for conciliation as opposed to reconciliation which I was mentioning in paragraph 6. The noble Lord will be interested to know—and I am sure that your Lordships will be interested to know, if I may set this out briefly—that a working party which was set up by the noble and learned Lord the Lord Chancellor is indeed considering the role that conciliation might be given in future court procedures. As your Lordships will appreciate, Scotland will be closely interested in the recommendations of this working party. A conciliation scheme is to be set up shortly in Edinburgh with financial assistance from the Government. I hope that will go some way towards satisfying what I believe are very justified fears which have been raised by the noble Lord, Lord Mishcon. We are very grateful to him for the care and the courtesy which he has extended to us in considering the sometimes rather complicated regulations today.
On Question, Motion agreed to.

Films (Suspension of Quota Requirements) Order 1982
11.39 a.m.
Lord Lyell Lord Lyell rose to move, That the draft order laid before the House on 7th July be approved.
The noble Lord said: My Lords, I beg to move that the House approves this order. The draft order has been considered by the Joint Committee on Statutory

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Instruments. I am given to understand that they have made no comments on it whatever. I hope that your Lordships will bear with me if I explain first what the quota applies to. Secondly, may I briefly refer to something of its history; and, thirdly, to the way that it works at present.
Lord Hale: My Lords, may I ask whether we have reached the pneumoconiosis order? I wish to say a few words on that.
Lord Lyell: My Lords, if the noble Lord, Lord Hale, will bear with us, he may have a little while to wait. I have to deal with another order after this one, and then I think my noble friend also has an order. Therefore, it will be a little while before the pneumoconiosis regulations are before the House.
Lord Hale: My Lords, I am anxious to ask a question on the pneumoconiosis regulations.
Lord Lyell: My Lords, we are discussing the Films (Suspension of Quota Requirements) Order. That is what I am attempting to explain to your Lordships. Your Lordships may wish me to give a dissertation on pneumoconiosis, but I would rather leave that to the specialists and, above all, to my noble friend who will be with us ere long. If the noble Lord, Lord Hale, will bear with us, we might consider what goes on in the film world and even go back to 1927.
Since 1927, and subject to various provisions for exemption and relief, cinema operators in the United Kingdom showing standard 35mm film have been required to show British films for a percentage of their total playing time. For first feature films, the percentage relates to the number of days on which films are exhibited in each cinema; for supporting films the percentage relates to the showing time of such films. The provisions were extended to include Community films when the United Kingdom entered the European Community in 1973.
There are, not surprisingly, conflicting and strongly held views on the effectiveness of the system; but possibly there is less doubt about the administrative burden placed on already hard-pressed cinemas. For the system to operate, it is necessary for every cinema in the country to keep a quota record book in which full details of films shown are entered week by week, including (your Lordships will be pleased to hear) playing time of the films. At the end of the year, these books, duly certified, are forwarded to my department where they are checked for accuracy and quota achievement.
The relevant statute provides for penalties to be imposed on exhibitors who do not meet the percentages, or who fail to make returns; but there is a system for examination of quota failures by the Cinematograph Films Council. Despite the extensive number of failures, there has, in fact, been no prosecution since 1956. In 1981, for instance, about 24 per cent. of cinemas failed to achieve quota without any action being taken. The Films Act 1960 provides that it shall be a satisfactory defence of failure to achieve quota if the exhibitor can show that it was not
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commercially practicable to comply with the requirements, and it is now considered highly unlikely that any prosecution for failure to achieve quota could succeed.
There has been wide variation over the years in the level at which quota has been set. For first feature films, the level was 12½ per cent. in 1938; in the early 1940s it was 15 per cent. and in 1948 it was raised to 45 per cent. In 1949 it came down to 40 per cent., and then in 1950 to 30 per cent. For this year it was reduced to 15 per cent. The order now before the House would suspend these quota requirements, and cinemas would be entirely free to make their own decisions.
I hope your Lordships will bear with me if I put these figures into their relevant context. It is thought that at the end of the 1940s, 1½ billion people—and, for this purpose, I am using the American style of 1,000 million people—went to the cinema each year. This year, cinemas will, as things are going, be lucky to get 65 million attending. The position on the number of films made is no better. In the late 1940s American film production reached around 250 a year, and films made in the United Kingdom were 80 or 90 a year. This year American production could be less than 100 and United Kingdom film production could be as low as 25. I would remind your Lordships that there are nine days to go, and these are not final figures for completions. However, we believe that these figures will be in the right direction.
It is against this background, and, above all, the continuing collapse in cinema audiences, that the Government have decided that it would be wrong just to wait until the end of the year before reviewing the question of quota. Consequently, we have considered carefully the arguments for and against quota and have consulted the Cinematograph Films Council. We have, as a result, concluded that the economic position of the cinema is so poor that immediate action to remove the administrative burden of quota is essential.
It is not, however, expected that cinemas' behaviour with regard to the showing of British films will change dramatically. In fact, the very low number of films likely to be available overall will, inevitably, give a strong position to British films. The very favourable tax regime for British films over the next two years should increase the proportion of such films in the lower overall number, making the position even more favourable. While I appreciate the arguments of those who support the continuation of screen quota at a high level, I think that the film industry must have the courage to make a break with what we call the psychological props of the past, and seek a new direction.
No one would pretend that video, cable and satellite will provide a magical overnight solution to the problems of the film industry, but—and this is hypothesis—if piracy can be controlled and a suitable regulatory structure devised they could present a very real opportunity to the film industry in the medium-term. Equally, one cannot simply ignore the plight of the cinemas and, above all, those who work in them. Everybody who works in the film industry deserves help as well, and suspension of quota represents a small step in the right direction. My Lords, I commend this order to the House.
Moved, That the draft order laid before the House on 7th July be approved.—(Lord Lyell.)
11.47 a.m.
Lord Ponsonby of Shulbrede: My Lords, I thank the noble Lord, Lord Lyell, for explaining this order. It was about 18 months ago that he came to your Lordships' House and pleaded for an order to reduce the amount of the quota from 30 to 15 per cent. I agree with his movement of this order today more in sorrow than in anger. The fact that exhibitors have had continuing difficulty in achieving even the reduced quota of 15 per cent., and the fact that there have been no prosecutions since the previous order was laid, underline the difficulty which exists because of the present state of the British film industry.
But one should look upon the laying of this order as an action of despair, rather than as a positive action to help the British film industry. I do not think—and the noble Lord did not produce any evidence to this effect—that the existence of a 15 per cent. quota was in any way damaging the industry. It was a target to which exhibitors could work. The fact that there had not been any prosecutions did not invalidate the fact that there should be a target for exhibitors to work towards in the showing of British films. Futhermore, a target brings to their notice the fact that they should try to show that percentage of British films.
I consider the laying of this order premature at this time, while there is a major ministerial review of the film industry under way. This review could involve—and, indeed, one hopes that it might involve—an extension of the Eady levy system to cover television films and films shown by cable. Alternatively, the review might suggest that the Eady levy should be done away with. It is a regrettable fact that, allied to decreasing cinema audiences, a decreasing amount of Eady levy has been available to the industry. If the Government were concerned about the vitality of the industry, I am sure they would be looking in the direction of extending the areas to which the Eady levy applies rather than to abolishing it. The review will no doubt cover the question of the role of the National Film Finance Corporation. The review could suggest an enhanced role for the National Film Finance Corporation, or it could suggest that the corporation should be abolished.
I wonder whether the noble Lord, Lord Lyell, could say anything about the Government's intentions concerning the vitality of the British film industry as a whole. It seems to me that in moving this order today the noble Lord is adopting a piecemeal approach to the problems of the British film industry, and that it would have been better to wait until the results of the review were known and until one could see whether or not this is an appropriate part of the package. I regret that this order has been laid today.
Lord Beaumont of Whitley: My Lords, the most that anybody can find to say about the order is regret, and even that in a not tremendously convincing tone. It was notable that although the spokesman for the Labour Party in another place went through the motions of regret, none of his colleagues who spoke
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greeted it as anything other than an absolutely inevitable result of the situation which has occurred in the film industry over a large number of years. There are cases to be made for not doing away at the moment with the quota. The case which the noble Lord, Lord Ponsonby of Shulbrede, made—that we are in the middle of a review of the film industry—seems to me to be a very good one, but it would possibly have more force if any of us had much hope that anything much will come out of that review. That point was made by my honourable friend Mr. Clement Freud, who said that in the intervals while waiting for the real successes in the film industry—the blockbusters—to come along, we might as well have British rather than American mediocrity to fill those intervals. There is a case for that, too. But one way or another, no one will very much mourn the quota, not least because one point upon which we on these Benches agree with the Government is that, if there is a bit of needless form filling to be done away with, we would rather that it was done away with.
The really unfortunate thing behind the order today is the disregard which the film industry has suffered ever since the war. The real core of the problem, as we in the Liberal Party have identified it—and I think it is widely accepted by a large number of people—is that the film industry is under the Board of Trade and not under a Minister for the Arts. It has to do with a large amount of money. It has to do with exports and imports. One sees the reason why it was at one time put under the Board of Trade, but the decisions which have to be made about investment in the film industry have much more to do with the arts than they have to do with the straightforward decisions of merchants. Whether you are dealing with small and successful films like "Kes" or with the great big blockbusters like "ET", the fact is that they are very much dependent upon a certain vision of the film-makers: a vision which the organisations and departments which are set up to forward commercial ventures in generality are not really able to apply. I do not believe that we shall have a flourishing film industry again until films are transferred to a Ministry for the Arts, or whatever it may be called.
The film industry has got into a very sad state. In a way, we have suffered from some of our advantages. One of the great advantages that we in this country have in all matters of culture is the English language. The fact that we share it with the Americans means that it now spreads all over the globe and that it is the governing language in a great many places where art of all kinds is shown. Particularly when art depends upon the spoken word, as is predominently the case in the film industry, that should be an advantage. Alas! it is not. It enables us to sell off our film industry, which is basically what we have done over the last few years, to the Americans, because it is transferable in a way which is not open to the French and the Germans. They have been able to keep their film industries going at a much more reasonable level because they are dealing with a single language situation.
We should have been able to resist the disadvantage of the common language. We should have been able to keep our film industry going. We are still capable of producing wonderful films. In the last couple of years we have produced at least two or three which prove

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what our film makers can do. But the dead hand of commerce is on the industry, particularly the dead hand of the Board of Trade. I do not lay this in any way at the door of any particluar Government. It has gone on in the same way ever since the war. But the fact remains that if the film business could be taken away from the Board of Trade and moved to a Ministry for the Arts it would stand a far better chance of flourishing, which I am sure we all hope it will do.
Lord Drumalbyn: My Lords, may I ask my noble friend two simple questions? First, while the Ministerial study is taking place, will records be kept of what the cinemas are showing? Will each cinema have to show how many British films it shows, how many American films it shows and how many films from other countries it shows? Secondly, what exactly is meant by "a British film"? I am afraid I am a little out of date because it is some years since I have had to deal with the subject, but there were co-production agreements. Does a film which is produced in conjunction with another country—say, France or Italy—rank as a British film for the purposes of the records kept, or are records to be kept separately for different countries? It would certainly make the planning and consideration of the whole future of the film industry very much easier from the governmental point of view if records were to be kept and, if necessary, slightly amended to make them more meaningful.
Lord Jenkins of Putney: My Lords, I must apologise to the noble Lord for having missed the first minute or two of his opening statement. As a result, I am not quite clear about the position relating to the Cinematograph Films Council. As I understood the noble Lord, he said that the council had been consulted but he did not say what its response was or whether it had agreed to the abolition of the quota as an immediate step. If there was no immediate agreement to the abolition of the quota, this would add weight to the view of my noble friend Lord Ponsonby of Shulbrede that this measure may be premature and will best be dealt with as part of a general review of the film industry and film industry legislation—something which one presumes is almost ready to be brought before both Houses of Parliament.
One is sad about the abolition of this quota—not that one is in favour of restrictive legislation in principle, but the British film industry has survived a very difficult situation. The quota has given an element of protection to our home industry and, in a difficult time, the industry has continued to produce products of high international repute. Even in our present plight the British film industry ranks high in the world and has recently received the highest possible acclaim in the United States of America. It is rather sad that the film which achieved that distinction, "Chariots of Fire", was financed almost entirely with American money and that very little British money went into this essentially British film, which will give a very good return.
It seems very sad that the City cannot be persuaded to take a chance on the film industry. It is a chancy industry and a good deal of money has been lost in it in the past; but the Americans were prepared to take a chance on "Chariots of Fire" and they have profited
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as a result of their enterprise. It is rather sad that British financiers appear to have cold feet in this respect.
All this adds point to a proposal I put forward some time ago. As the noble Lord, Lord Beaumont of Whitley said, the British Film Institute has become responsible for an increasing proportion of the activity in the industry. Unfortunately this is due to the decline of the commercial element, but there is no doubt that, relatively speaking, that part of the British film industry which is already under the aegis of the Minister for the Arts is becoming more significant. Not only is it active in its own art films area, as it is called, but it has also created a great deal of spin-off in both the commercial film and television areas as well.
There is increasing pressure for the transfer of ministerial responsibility and for the whole of the film industry to be under the aegis of one Minister. We are now moving into the situation where the film industry can no longer survive on a purely commercial basis. That seems to me to be the point at which the Minister for the Arts ought to step in if we are to maintain a film industry which is capable of surviving because we cannot maintain an effective commercial film industry unless the industry as a whole survives. Having said all that, I do understand that the case for the quota is by no means as strong as it used to be. At one time there was an undoubted case to be made for the proposition that the exhibition and production sectors of the industry depended upon the existence of a quota. With the decline of the entire industry and particularly the British element of the industry, the necessity for that quota is much less apparent.
But as my noble friend has said. I feel that this abolition is rather premature. As the noble Lord, Lord Beaumont of Whitley, has said, there is a certain lack of indignation about the place. We are not furious but we are upset. We are sorry about it.
I can only hope that, as a result of the more general approach which the Government are going to bring to this matter, we shall be able to put the British film industry on its feet not only in respect of production and distribution but also in the exhibition area as well. It has gone through a bad time. It is an industry which has earned us very considerable repute abroad. The Government owe it to the industry to do what they can to ensure that the British film industry survives in the future.
12.05 p.m.
Lord Lyell: My Lords, we are all very grateful for the interested and vivid response we have had from all parts of your Lordships' House. The noble Lord, Lord Ponsonby of Shulbrede, mentioned that there had been no prosecutions going back for quite a while. This was just one of the factors which entered our minds in considering whether the continual administrative burden of keeping up these film quota books should really be laid upon the cinema owners or not.
The noble Lord, Lord Ponsonby of Shulbrede, made several other points. First, I should stress to him the low number of films which become available for distribution each year. I mentioned 100 films as an approximate figure for the United States' industry and around 25 for the United Kingdom's film industry.

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Even if these numbers are completed, it depends on the commercial success of, perhaps, a very small number of these films as to whether or not the cinema industry, first, and the British film industry, secondly, will enjoy a healthier financial climate than they have in years past.
We do not have the figures for the achievement of the quota relating to the 15 per cent. level, which is the level we are hoping to abolish from today. The figures quoted for 1981 related to the level of 30 per cent. I would stress again the low overall level of the supply of films. Indeed, the statutory defence available to exhibitors is that it reduces very markedly indeed the effect of the quota and the administrative burden still remains.
Several of your Lordships asked me about the review of policy. I am sure that Members will have read some of the rather dramatic press reports on the subject of the Eady Levy, which suggested that my honourable friend the Parliamentary Under-Secretary of State had decided to abolish it. I should stress that that was just one of a wide range of options which have been put to him—including the option of extending the levy to television films and video films. I am sure that my honourable friend will be happy to receive representations on this matter from those who have expertise and, above all, the benefit of professional experience to impart to him. I know that he hopes to reach some conclusions by the spring of next year—including a decision on the whole question of the levy as well as the role of the National Film Finance Corporation.
I should like to stress also the financial benefits which are achieved by the film industry. The exports of the British film industry for 1981 amounted to £30 million. We believe that that compares very favourably with the export of British television material, which was valued at one-third of that figure, in the region of £10 million. The noble Lords, Lord Jenkins of Putney and Lord Beaumont of Whitley, raised the question of ministerial responsibility. Indeed the noble Lord, Lord Beaumont of Whitley, called it in his very colourful way the "dead hand" of the Department of Trade. For as long as I am in that department there will be no "dead hand" there—least of all belonging to my noble friend the Secretary of State, or indeed the other Ministers, or the people who work there. The noble Lord and your Lordships will be aware that the very success of the British film industry is tied up as well with finance and practical considerations as much as the artistic content of films.
So far as ministerial responsibilities for the British film industry are concerned, the allocation of these is entirely the prerogative of my right honourable friend the Prime Minister. We would see the force of some of the arguments, especially from the noble Lord, Lord Jenkins, who has considerable expertise in this area. I would think that more to the point would be action to make sure that the Government ceases to interfere quite so much with the film industry, which we regard as grossly over-regulated by any standards.
My noble friend Lord Drumalbyn asked me about the 1982 records. These will be completed and analysed, but I would stress that they will not be so collected for 1983.
Lord Beaumont of Whitley: My Lords, before the noble Lord the Minister moves on, he has said that he and his colleagues regard the film industry as being grossly over-regulated by any standards. Would he care to give some examples? Now having done away with this particular quota, what else is there in the film industry which is ripe to come under the pruning hook? Presumably he has not made such a wide statement without being able to produce some other candidates.
Lord Lyell: My Lords, I will reply to the noble Lord, Lord Beaumont, but not yet. May I find some fruitful examples and let him have them in writing? I was attempting to reply, in tennis terms, to his first service. He was trying to drive me deeply to the back court, and I will send him a high lob which may take some time to arrive; it may come by cable, video, pigeon post or ministerial post. I will attempt to find some interesting examples of how the Government believe that we do interfere, possibly a little too much, in the film industry. We have attempted with this order to relieve one of the pinpricks and administrative burdens. I shall certainly endeavour to discover any more of the more esoteric burdens and duly inform the noble Lord.
Lord Ponsonby of Shulbrede: My Lords, before the noble Lord leaves that point, is he trying to anticipate the results of the review and will the review in fact produce the answers to the question the noble Lord, Lord Beaumont, has asked?
Lord Lyell: My Lords, I fear that the noble Lord, Lord Ponsonby, is possibly anticipating not only the review but what I might have to say. I certainly would not be anticipating the review. Your Lordships know me as a Scot, maybe not a canny one; I would never bet on a hypothesis as to what is in the minds of the review body, nor indeed of my right honourable and noble colleagues. I think that, if we may allow the review to continue, we shall no doubt be fascinated to see what conclusions it comes up with.
If I may continue to answer, the second point raised by my noble friend Lord Drumalbyn was the question of British films. When we consider the quota for the cinema screen, my noble friend is quite right, we should keep in mind just what the word "British" means in this context. Broadly, we believe it means that films made here are British if they provide substantial benefit to our industry. These films do not have to be financed here, nor do they have to be films reflecting possibly British life and manners. I would enlighten your Lordships—the noble Lord, Lord Jenkins, may know this, but certainly I did not—by saying that "The Empire Strikes Back", which I have had the pleasure of taking some of my younger relatives to see, and "Superman", which I have not yet seen—it is not shown daily in your Lordships' House—are two British films.
The quota for British films has also to include European films, of which, I am sure your Lordships would agree, some are of merit and some not; indeed my note says, many not. One noble Lord's poison is another noble Lord's or Baroness's meat. But in the context in which my noble friend was asking the

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question, "British" does not mean what many might wish it to mean. The quota records distinguish between British and other Community films and indeed foreign films. Registration records will show for 1983 the number of films registered, but not necessarily analysed according to to whom and where they were shown.
The problem of consultation with the Cinematograph Films Council was raised. I am sure your Lordships will agree that we have to recognise that on this subject different parts of the film industry would wish to see different solutions. The council itself is composed of representatives of different parts of the industry, and on issues such as the one we are discussing the members tend to vote in accordance with the view of their parent organisations. Also the discussion and the vote tend to vary widely according to who may or may not be present. In this instance the members discussed the proposal to suspend the quota, and the conclusion was reported along with the views of two members who were not able to be present. We are satisfied that we have had the views of all the major interests represented on the council.
Lord Jenkins of Putney: My Lords, can the noble Lord clarify that? Is he really telling us that the Cinematograph Films Council was not unanimously in favour of this proposal? Is that what he is saying?
Lord Lyell: My Lords, I do not know whether a vote was taken or exactly what the views were. I stressed that we have taken these views into account. I shall endeavour to find such information as I can as to what their views were. I do not know that we, in the popular parlance, "bugged" the room or the negotiations, but I shall endeavour to find out what the views were and communicate with the noble Lord briefly.
I have possibly wearied your Lordships with somewhat lengthy explanations of this fairly simple order. I would ask your Lordships' indulgence. 'We have strayed over "Superman", and "The Empire Strikes Back", and other things, but I am sure your Lordships with your traditional indulgence will accord me a little licence in such matters. Indeed, regular attenders among your Lordships are very rarely able to leave your Lordships' House to see the fruits of the work of the great British film industry, but possibly we might be able to do so over the next two or three weeks. I hope I have answered most of the questions raised. If I have missed any, may I write to the noble Lords who raised them, in addition to the two noble Lords to whom I have already promised to write?
On Question, Motion agreed to.

Monopolies and Mergers Commission (Membership of Groups for Newspaper Merger References) Order 1982
12.20 p.m.
Lord Lyell: My Lords, I beg to move that the Monopolies and Mergers Commission Order, the draft of which we have before us, be approved. Your
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Lordships will be interested to know that we hope that this order will improve the workings of the Monopolies and Mergers Commission in the case of newspaper mergers, by making two quite small changes in the content of the group which carries out the inquiry.
I hope that I may briefly explain the present position. I see the noble Lord waiting to spring to his feet, but I shall not be very long and we must wait to hear his expertise. Your Lordships will be aware that newspaper mergers involve similar economic issues as in general mergers, but they also involve some special issues—for example, expression of opinion and, above all, the accuracy of reporting. For this reason special arrangements were set out in the Fair Trading Act 1973. The group of members investigating a newspaper merger may have its members—I stress "may"—drawn from two different sources in order to cover the different issues which have to be examined: regular commission members selected by the chairman of the commission and a number of additional members, who may be appointed by the Secretary of State and are drawn from a special merger newspaper panel. The present position is that at least five members must come from the commission and three, four or five additional members may come from the newspaper panel. In practical terms this leads to a fairly large and what we regard as a somewhat unwieldy group of at least eight members.
The order that we have before us today makes two changes. First, while leaving the total number of the group at a minimum of five, it would allow the five members to be made up of a combination of regular and special members. The second small change that the order makes is to allow the number of special members appointed to be one, two or three instead of the three, four or five as at present. The combined effect of these two changes is that the overall minimum for a newspaper merger inquiry is reduced to the same number as that for other merger references, and that is a minimum of five. It can contain a combination of regular and additional members as would seem appropriate. There is no doubt that this more flexible arrangement will help the commission to execute its task more effectively without in any way altering the principles which govern the investigation of newspaper mergers. With that brief explanation I commend the order to your Lordships' House. My Lords, I beg to move.
Moved, That the draft Monopolies and Mergers Commission (Membership of Group for Newspaper Merger References) Order laid before the House on 22nd November 1982 be approved—(Lord Lyell.)
Lord Ponsonby of Shulbrede: My Lords, I rise briefly to thank the noble Lord, Lord Lyell, for explaining this order. The noble Lord did not appear to mention that the order had been considered by the Joint Committee on Statutory Instruments and in its fourth report had no comment to make on this particular order. As the noble Lord so eloquently explained, the purpose of the order is to vary whether the members of a merger panel are regular or additional members. It allows more flexibililty in the composition of the panel and reduces in total the number of members of the panel to five, but it does not alter any principle relating to the consideration of

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mergers in the newspaper industry. Therefore, this is an order to which we do not object.
On Question, Motion agreed to.

Industrial Training Levy (Construction Board) Order 1982
Lord Glenarthur Lord Glenarthur rose to move, That the draft order laid before the House on 2nd December 1982 be approved.
The noble Lord said: My Lords, this levy order requires parliamentary approval because part of it involves a levy of 2 per cent. on payments made by employers in the construction industry for labour-only sub-contracting. In many respects the order is similar to that of last year. For most of the construction industry there is an occupational levy. This is a set amount for each occupation employed, but is subject to an overall limit of 1 per cent. of the wage bill.
All firms pay the levy except for the very small ones—that is, those with a wage bill of less than £15,000. For the labour-only sub-contractors' payments, the proposed levy is 2 per cent. Last year it was also set at this level, but it was then subject to an overall restriction of the whole levy to 1 per cent. The difference is that this year, for the first time, the 2 per cent. levy is not in any way restricted. This 2 per cent. levy will be applied to the payments made by firms who employ labour-only sub-contractors. For their other employed staff a firm will pay the usual occupational levy, but this element alone will be restricted to 1 per cent. of the pay bill.
Perhaps I should explain that the Construction Industry Training Board has no exemption from levy in respect of an individual firm's training performance, although this is possible under the 1982 Act. With the support of the industry it has chosen to levy all firms except those of small size, and this has been its policy for a number of years. The board estimates that the levy will raise about £38.6 million which will be used to finance training necessary to the industry.
The proposals outlined in the order have received detailed consideration and consultation. They have been unanimously approved by the Construction Industry Training Board and the Manpower Services Commission. Furthermore, the principal employers' associations in the construction industry have indicated their agreement with the 2 per cent. levy.
There may be those who are in some doubt about the necessity for a 2 per cent. levy. The reason is that very little training is done by labour-only subcontractors. There are, of course, inherent difficulties in organising training for a mobile and somewhat fluctuating workforce which, for the most part, is engaged in work at temporary sites, and the board is anxious to correct this previously unsatisfactory situation. As I have said, the proposals contained in the order have the agreement of the board, employers and the trades unions. I therefore commend the order to your Lordships. I beg to move.
Moved, That the draft Industrial Training Levy (Construction Board) Order laid before the House on
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2nd December 1982 be approved.—(Lord Glenarthur.)
Lord McCarthy: My Lords, I support the Motion that this order should be agreed. Indeed, there is very little I want to say about it. I have only two points to make. First, as I have said, we argue that such a levy is essential if there is to be any training in what is undoubtedly a key industry. If the Government ever wake up and generate some work for the construction industry we shall immediately run into the shortage of craftsmen that we have run into in previous times when there has been an upsurge of work in construction. Therefore, there must be training, and that training will not be done on a voluntary basis by the industry. Consequently, we are very glad to see that the industry has retained its training board and is now proposing to raise a levy worth £38.6 million a year.
My second point concerns the balance between a 1 per cent. levy for people who are on employment contracts and a 2 per cent. levy for labour only subcontracting. I note what the noble Lord said and I gave him some notice that I would be asking him a question about this. I note that he has given us quite a bit of information on why there is the 2 per cent. It is the balance between 1 per cent. and 2 per cent. that I am not quite able to follow. The noble Lord appeared to be saying at one stage that there were expected to be particular benefits to the labour-only sub-contractors. I suppose, as he says, that is because they do not do any training. If that is the case. I do not know whether we are convinced that a 2 per cent. levy will in fact force them to do the right amount of training. I do not know why 2 per cent. is considered the necessary figure to force them to do this training or to have the money available to give them when they do that training.
The noble Lord did not suggest, although he may be doing so, that perhaps the increase of 2 per cent. against 1 per cent. is because we expect a certain amount of evasion of the levy. I thought he was saying at some stage that, because it was very difficult for sub-contractors to do training—or perhaps one might say that because it was very difficult to see whether sub-contractors do training or not—maybe those who can be persuaded to do training have to do a lot of training to make up for those who do not do training. Is it really evasion that brings about the increased levy for sub-contracting? Is the increase in the levy for sub-contracting, as against the levy for non-subcontracting, to be taken as some indication—as I think we on this side of the House would say—that there is something rather unsatisfactory about the whole notion of sub-contracting in the construction industry?
12.31 p.m.
Lord Kilmarnock: My Lords, I must apologise to the noble Lord, Lord Glenarthur, that I came into the House when he had already risen to his feet and had started his speech. I wished to ask him about the limit of the levy to businesses employing more than a certain number of employees—I think the noble Lord mentioned a wage bill of £15,000. Perhaps the noble Lord can confirm that? Is this to be done on the basis of a wage bill or on the basis of the number of employees?

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I should like to raise one other point, although I realise it is not strictly connected with the construction industry. However, I do not think it was debated during the debate on the report of your Lordships' Select Committee on Unemployment in which it was pointed out that in the Employment and Training Act 1981 the Government reduced the number of ITBs from 24 to seven. Your Lordships' Committee made a strong recommendation in paragraphs 11.62 and 11.63 urging that the MSC be asked to produce a study of the feasibility of an across the board remissible training levy. It was suggested in the report that the product of the 1 per cent. pay roll tax across the board—that is to say, public and private sectors—would produce something in the region of £1.37 billion for training. In paragraph 11.63 the report urged the MSC to adopt the principles set out in paragraph 11.62. As this is the last opportunity this year to speak on matters of this type, I should like to ask the noble Lord whether he will give the House an assurance that the attention of the MSC will be drawn to paragraphs 11.62 and 11.63, and that they should be encouraged to produce a feasibility report on a scheme of this nature.
Lord Glenarthur: My Lords, I am grateful to the noble Lord, Lord McCarthy, and to the noble Lord, Lord Kilmarnock, for their welcome to this order. As regards the imbalance—if that is the right word—between 2 per cent. and 1 per cent., to which the noble Lord, Lord McCarthy referred, I point out that 2 per cent. is the figure recommended as desirable by all sides of the industry for the coming year. Last year the figure was 1.5 per cent. subject to the overall limit of a 1 per cent. levy on the pay roll.
Labour-only sub-contracting is, by itself, not undesirable, but it is widely recognised that little training is done by labour-only sub-contractors. The purpose of the 2 per cent. levy is to try to ensure that labour-only sub-contractors make their contributions to the training needs of the industry and do not avoid it—if that is the right word—and thereby end up in a position where they can pay people more and so pinch people from elsewhere in the industry. I hope that that answers the noble Lord's point.
The noble Lord, Lord Kilmarnock, raised a question on the limit of £15,000. Smaller firms will not be subject to the levy. If the figure is £15,000 or below, they do not have to be levied. As regards his later question about the Manpower Services Commission, I am afraid that I am not able to give him an answer to that now, but perhaps I may talk to him afterwards or even write to him.
On Question, Motion agreed to.

Pneumoconiosis etc. (Workers' Compensation) (Payment of Claims) (Amendment) Regulations
12.35 p.m.
Lord Glenarthur Lord Glenarthur rose to move, That the draft regulations laid before the House on 16th November 1982 be approved.
The noble Lord said: My Lords, I beg to move that the Pneumoconiosis etc. (Workers' Compensation)
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(Payment of Claims) (Amendment) Regulations 1982 be agreed to. These regulations are simple and uncontroversial, and are to be made under the Pneumoconiosis etc. (Workers' Compensation) Act 1979. They will have the sole effect of increasing, by 40 per cent., each of the payments made under the Act to sufferers, and the dependants of deceased sufferers, who first become entitled to a payment on or after 1st January 1983.
Before I go on to talk about the regulations, I think that perhaps I ought to say that I know that some of your Lordships take a considerable interest in compensation for victims of dust diseases, and may want to raise issues which go well beyond the scope of what we are discussing today. Of course, these are important areas, and I do not want to deflect your Lordships' attention from them; but I hope that today we might impose some sort of a self-denying ordinance and concentrate merely on the regulations which are before us.
What do the regulations mean? Perhaps I can start by listing the three main conditions of entitlement for sufferers which are set out in the Act. These are, first, that the applicant is being paid disablement benefit because of one of the diseases the Act covers; secondly, that every relevant employer of his has ceased to carry on business—and I shall come back to that later—and, thirdly, that he has not brought any action, or compromised any claim, for damages. For example, let us take someone who meets the last two conditions and is awarded disablement benefit in January next year. He would be entitled to compensation at the new rates. Another example would be a person who is receiving disablement benefit now but who has a relevant employer left who goes out of business on or after 1st January but within the 12 months normally allowed for application after the date when disablement benefit first becomes payable to him. He, too, would be paid at the higher rate.
To date there have been over 5,500 applications for compensation under the Act. Some 1,200 applications were rejected for failing to satisfy all the entitlement conditions prescribed in the Act. The majority of those which failed did so because there was still a relevant employer in business. The Act explains that a relevant employer is any person by whom the disabled person was employed at any time while he was developing the disease and against whom he might have or might have had a claim for damages in respect of his disablement. It also means the whole firm, and not just an individual mill or plant.
The people who will continue to be paid at the current rates are those already qualified or who qualify this year, but do not get around to applying until next year. What matters is when someone in fact qualifies, and not when he or she applies. The current rates were laid down in the Pneumoconiosis (Workers' Compensation) (Payment of Claims) Regulations 1979. These were debated by your Lordships' House on 18th December 1979, and came into operation on 1st January 1980. The 40 per cent. increase is intended to restore the payments to the value they had when the original rates were determined.
Being anxious to be as fair as possible when interpreting this condition, my right honourable friend

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the Secretary of State took legal and medical advice on what should be regarded as a relevant employer still in business. My right honourable friend was also advised that a disabled person might not have a claim against a former employer where the employment in question did not appear to have made a material contribution to the development of his disease. Following this advice a payment was made to about 500 applicants whose applications had previously been rejected.
Perhaps I should also say something about the time limit for making applications. Normally this is 12 months after disablement benefit first becomes payable to them. Sometimes it happens that someone applies promptly after he or she learns the sad news, only to be turned down because there is still a relevant employer in existence. However, to make sure that people do not lose out by applying quickly, rejected cases are reviewed at the end of the 12 months during which those people could have applied. If they qualify within the 12 months, they are paid. The Determination of Claims Regulations made under the Act also give the Secretary of State discretion to accept late applications, and this direction is used fairly generously so that if someone would have been entitled to a payment had he or she applied in time then the claim is generally allowed.
Some might say that the payments are low when compared with what can be awarded by the courts to those able to bring a claim. But it should be remembered that claimants under the Act do not have to demonstrate that their employers have been in breach of either a statutory or common law duty. This is an important difference which I believe should be reflected in the size of the payments made.
The rates of payment will be kept under review in the light of further changes in the value of money. I am sure that these proposals offer a fair rate of compensation for the immediate future. Whatever the size of the payment, it will never truly compensate individuals and families for the pain, the distress, the suffering and the loss that they suffer. At least we shall have done something to alleviate the dreadful effects of these diseases for those most intimately affected. Therefore, I commend the regulations to your Lordships.
Moved, That the draft regulations laid before the House on 16th November 1982 be approved.—(Lord Glenarthur.)
Lord McCarthy: My Lords, I have pleasure in agreeing to this Motion on behalf of my side of the House. We have no intention of going into the provisions of this Act, as the noble Lord, Lord Glenarthur, suggested we might, although I understand that my noble friend Lord Davies of Leek wants to say something about those matters after I sit down.
All I want to do is to thank the noble Lord for what I take to be the principle behind the increase, because it seems to me that in very broad terms we have here an increase at roughly the level of the RPI. As the noble Lord said, he wants to compensate those who fall victim of this awful disease at the rate that was available when, indeed, the Act was introduced by the
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previous Government. He wants to restore that rate. Therefore, although one might have said earlier—and I think that someone on the Liberal Benches in fact said it—that there might be a dead hand at the Department of Trade, in the Department of Employment this Christmas there is not quite a dead heart. It is right that we should try to do this.
My question is as follows. Does it mean, in broad terms, that the Government, at this late stage, have in fact accepted the principle of compensation for matters of this kind at the level of the RPI—that is, at the level of the rate of increase? That is my first and major question. My second question—and I apologise for not giving the noble Lord any notice of this, but it has only just occurred to me—is this. If that is accepted, and even if it is not generally accepted, for pneumoconiosis, would it not be better if we did not wait from 1979 to 1982 before we compensated? Because anybody who was subject to this Act and went for compensation under this Act some time between 1980 and 1983 presumably did not get compensated for movements in the RPI.
Therefore, would it not be much better—and could the noble Lord give us some indication of the Government's thinking on this—if the Government were to accept not simply compensation at the level of the RPI three or four years later, but in fact a process of annual indexation of this sum to keep it in line with the RPI?
Lord Hale: My Lords, I do not propose to waste time, as has been done previously, by explaining that I shall be very brief. I would prefer to carry on with my speech without any unnecessary trimmings. I personally want to congratulate the Government on this measure: on the way in which it has been handled, and on the way in which it has been presented. Originally, it was a joint Bill presented by both the great parties when it came before us in 1979, at the very moment when the trumpeters were cleaning their trumpets to blow the glad tidings of a general election. I believe that it was the very last act of the previous dying Government, and it was passed with the support of all parties.
The noble Lord, Lord Glenarthur, has been good enough to explain with great clarity and brevity the extraordinary problems which confronted the Government—problems that have never been confronted before in the whole tortuous history of workmen's compensation, industrial injury benefit, and so on. This was an attempt—a successful attempt—to deal with a very serious anomaly.
Because of decisions postponing the grant, the man suffering from byssinosis had to establish that he had worked in a given part of the industry for 10 years. Applicants could not make claims for benefit in time because of the limitation on claims. In many cases—particularly in fluctuating industries, such as textiles and so on—firms had gone out of business before the claims could be presented. So this Act attempted a legislative achievement and got it through by the interesting device of putting a non-existent word in the Title. So the word "etc." now governs these pensions as opposed to any other pensions.
With respect to my noble friend on the Front Bench, who referred to this disease, a number of diseases are

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covered by this—and I doubt whether even the noble Lord, Lord Glenarthur, could read them out offhand—because the word "etc." was designed to permit the Government to include diseases which had never before been scheduled and which had been popping up as genuine dust diseases in obscure little industries, where people were being caused suffering.
On the whole, this is a very successful measure indeed, although in another place it was subject to such criticisms as the short amount of time made available to discuss it. I understand that this measure is due to come into force on 1st January, and, therefore, may be submitted for a very early Royal Assent indeed. No doubt the measure has been considered by Her Majesty in its present form, because there may not be enough time for the Assent to be signalled.
I am obliged to the noble Lord, Lord Glenarthur. The result is, in the main, a 40 per cent. increase in the actual payment being made, and it gives a second chance in a large number of circumstances to many people who deserve a second chance. In those circumstances, I do not think that it is a good idea to quibble about a word, but one should express one's wholehearted thanks for something that closes a chapter in one's life.
In fact, it does not close it; there are other things to come. But those of us who have been interested in industrial diseases for over 50 years regard this as a moment to celebrate. I am sorry if I interrupted the noble Lord, Lord Lyell, who is normally very courteous, but I think that the noble Lord, Lord Glenarthur, set a proper practice by mentioning which order he was going to discuss before he started to discuss it.
12.50 p.m.
Lord Davies of Leek: My Lords, as somebody in the Department of Health and Social Security who had the privilege at the Front Bench in the other place some years ago to introduce for the first time a method of compensation for miners with pneumoconiosis, and known as old cases, and as someone who remembers well the pioneering work done with his skill in law towards improving pneumoconiosis compensation by the noble Lord, Lord Hale—and I suffered bullets from him myself when I was on the Front Bench dealing with this—may I say that both of us are delighted with this step forward. We are grateful for this 40 per cent. increase. It would be churlish of me today, in a brief three-minute speech, to try to find points and holes in this move forward.
Whatever anybody may say about the period when it was introduced, we are grateful that people who suffer will benefit as a result. However, there are three small points I should like to raise. There will always be danger, so long as people are running down the corridors of time, in hewing coal. As somebody who comes from farmers and miners and has witnessed the greatest explosion in the history of world mining at Senghenydd as a small boy in 1913, I know the human price paid by all types of men. This is a day to pay tribute to the medical profession, the mining industry, leaders in mining, and those lawyers and others who have helped us to understand how to compensate. I am watching the clock, so do not worry.
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I have recently been reading The Lancet and other information. There is no doubt that we have to make more progress in studying the problems of dust in the mining industry. I am glad that "et cetera" was placed there because, unknown to millions of people, workers in the tube train industry known as "fluflers"—those people who, while we are sleeping, work on the tracks of the tube trains of London, where there is asbestos wrapping and 10 times more dust than on the streets of London; a fact that is not well known—and people like that are coming into the compensation grades. This is not the place to develop it, but en passant I mention it so that at some time when we get the time attention will be given to that problem. Recent medical studies of an erudite nature in The Lancet which I read the other day are now declaring that, because of quartz in mining, the incidence of pneumoconiosis is more rapid. The quartz content is higher than previously thought, said The Lancet on 15th December 1981.
The last point, you will be pleased to know, is that prevention is being developed more than ever in the mining industry. The air stream air purifying helmet is a new device that we hope to encourage for the use of miners. As somebody who knows what hard work is with a helmet on, I know that the tendency is not to wear any device because of the difficulties of breathing. Having made my three-minute speech, and for once being able to congratulate the Government, I shall sit down.
Lord Energlyn: My Lords, it is appropriate that the noble Lord, Lord Glenarthur, is presenting these regulations this afternoon. Among his many talents and interests are geology and mineralogy, and pneumoconiosis is a mineralogical disease. Touching on the points made by the noble Lord, Lord Davies of Leek, it is not the cloud of dust that you see that is dangerous, it is those particles in the dust which are invisible which are the treacherous elements which lead to pneumoconiosis in all its varieties.
My first task on entering this field was to devise a method for identifying these invisible particles, such as the quartz referred to by the noble Lord, Lord Davies. I joined a distinguished group of workers in the early 1950s, and we led the world in our understanding of this disease, and in fact produced the proof which enabled the Government to replace the variety of names with the umbrella title of "pneumoconiosis". Here we are today aware of the variety of mechanical and pathogenic results which can emerge from the inhalation of particles.
Not all particles can enter the bronchioles and ultimately the alveoli of the lung and cause mechanical and subsequent pathogenic malformations and disease. Some are too large to enter and some are too small to remain within the body of the lung, and so we present the scientists and the medical men with a difficult problem of diagnosis of a hazardous atmosphere. We should therefore bear in mind the difficulties in the administration of a compensation scheme in which often it is a matter of opinion as to whether the atmosphere is hazardous or not.
Therefore, I welcome these tables, particularly because they recognise the fact that we could not prove in the early days that which we knew would emerge,

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that there would be a delayed action from inhaling dust in one occupation and the disease not showing itself until that person entered another occupation. We have had some outstanding cases of this kind. I should like to put on record my appreciation of the tolerant attitude of the National Coal Board to us scientists, who have been pointing this out to them. They have been tolerant, helpful, and so on. Embodied in this I see the equal tolerance as expressed by the noble Lord, Lord Glenarthur, on behalf of Her Majesty's Government, and sympathy that they have for these unfortunate victims of disease. Also, what I like about these tables is the clarification of the compensation that their relatives will receive. I congratulate the Government on this major advance in compensation under the umbrella title of pneumoconiosis.
Lord Edmund-Davies: My Lords, to one who spent a long part of his life both at the Bar and on the Bench dealing with the legal complexities arising from the assault of dust diseases, the regulations now under consideration come as a most welcome addition to the provisions which were belatedly made to deal with the horrible consequences of the various dust diseases. I warmly commend these regulations to the approval of the whole House.
12.58 p.m.
Lord Glenarthur: My Lords, I am grateful for the unanimous welcome that these regulations have received. That they come just before Christmas is perhaps fortuitous, but nevertheless I am most grateful to all noble Lords for their kind remarks. The noble Lord, Lord McCarthy—I think I got him right—asked about the relativity of the 40 per cent. to the increase in RPI over the period that the Act has been in force. The current rates of compensation came into operation on 1st January 1980. As I said, the new rates represent an increase of 40 per cent. and will restore the value of these payments to what they were when first calculated. It might be helpful if I pointed out to the noble Lord that the retail price index, for example, rose 32·9 per cent. between January 1980, when the present rates came into operation, and November 1982, so the 40 per cent. represents something over the increase in RPI in that period.
The noble Lord also asked me if I can summarise him correctly, why, it has taken so long to get the whole problem sorted out. The reason for that really—and I think it has been illustrated by what the noble Lord, Lord Energlyn, said just now—is that it is a highly complicated process. Not only is the Act itself complicated, but there is so much scientific work being carried out on the whole subject of dust-related diseases that unfortunately it has not proved practicable to introduce this compensatory legislation at this time. But it is being looked at the whole time. I cannot say that the review of the compensation will be fixed in any particular period—that it will be annual, for example—but it is a matter which my right honourable friend the Secretary of State will look at closely and regularly, and I hope that will give confidence to those who suffer from the disease.
I was pleased that the noble Lord, Lord Hale, was able to speak on this matter. He brings a great deal of
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personal experience to the subject, as does the noble Lord, Lord Davies of Leek. I shall not rise to Lord Hale's challenge and try to pronounce the names of the relevant diseases that come under it, because he is right to say that they are very complicated. As for the interesting words of Lord Davies of Leek on "fluffers", the subject of quartz and the purifying helmet, these matters will be studied seriously by all those involved in compensation, not only in the Department of Employment but in health and social security and all other aspects involved with injuries sustained in this way.
I was grateful for the remarks of the noble Lord, Lord Energlyn, about geology. I cannot claim to be in the same league as he, with his wide knowledge of the subject, but I, too, would welcome any help given by any industry towards trying to solve the problem. I know they are all greatly concerned, and of course it is not productive to them if their workforce is laid off because they suffer from these diseases, which are universally regarded as dreadful. I am grateful to the noble Lord for his helpful remarks.
On Question, Motion agreed to.

Employment Protection (Variation of Limits) (No. 2) Order 1982
1.2 p.m.
Lord Glenarthur Lord Glenarthur rose to move, That the draft order laid before the House on 6th December be approved.
The noble Lord said: My Lords, with permission, I will speak at the same time to the draft Unfair Dismissal (Increase of Compensation Limit) (No. 2) Order 1982. The draft Employment Protection (Variation of Limits) (No. 2) Order 1982 has been laid before your Lordships in accordance with Section 148 of the Employment Protection (Consolidation) Act 1978, which requires the Secretary of State for Employment to carry out each year a review of the limits relating to certain payments made under that Act. The limits are the weekly earnings limit laid down for the purpose of calculating redundancy payments, the basic and additional unfair dismissal awards and certain debts in relation to the insolvency provisions of the Act, and the daily limit on guarantee payments to workers on short time and temporary lay-off.
There are three factors which the Secretary of State for Employment has by law to take into account in carrying out this review and in reaching a decision. They are, first, the general level of earnings obtaining in Great Britain at the time of the review; secondly, the national economic situation as a whole; and, thirdly, such other matters as he thinks relevant. If the Secretary of State considers, as a result of the review, that any of the limits should be changed, he must lay before each House the draft of an order giving effect to his decisions; and where he decides that a limit should not be varied, he must lay before each House simultaneously with the order a report giving his reasons for not varying those limits.
As part of the autumn 1982 review, the Government consulted a wide range of organisations for their views of what changes, if any, should be made to the limits. In the light of these consultations the Govern-

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ment have decided that all the monetary limits covered by the review—that is, the limits of payments for redundancy, for basic and additional awards for unfair dismissal, for certain debts payable under the insolvency provisions of the Act and for guarantee pay—should be increased. The proposed changes, which I shall later refer to in more detail, are set out in the draft order. If the order is approved in both Houses, the changes to the limits will come into effect on 1st February 1983.
I mentioned the three factors which the Secretary of State must take into account in reaching decisions on the limits. One of these factors is the general level of earnings obtaining in Great Britain at the time of the review. The August 1982 figure for average earnings, which was the latest figure available at the time of the review, showed an increase of 7·8 per cent. over the previous 12 months. The figure for September 1982 is 6·8 per cent., and the figure for October is 7·3 per cent. If the level of earnings was the only factor to be considered, this would suggest that the limits should be increased by about 7 per cent. The Secretary of State, however, also has to take into account the national economic situation as a whole. Although the Government recognise the need to protect employees, they are also aware of the need, on the other hand, to keep within tolerable bounds the burdens which the employment protection legislation imposes on employers. The Government have therefore decided that increases in the limits of about 3·75 per cent. are the maximum increases which can be justified in the present economic circumstances.
The current weekly earnings limit for calculating certain payments under the Act is £135. The Government therefore propose that this limit should now be increased to £140. For redundancy payments, this means that the new maximum redundancy payment under the statutory provisions will be £4,200—that is, 30 weeks at £140—which will be the amount due to a man of 61 or over who has served 20 years and is entitled to 1½ weeks' pay for each year of service. The increased weekly earnings limit of £ 140 will also apply to certain payments made to employees under the insolvency provisions of the Act. The additional cost to the Redundancy Fund, from which such payments are made, is expected to be marginal for the year 1983–84.
Another of the payments subject to a weekly earnings limit is the basic award of compensation for unfair dismissal. I would remind your Lordships that this part of an unfair dismissal award is intended to reflect broadly the amount of redundancy payment which would have been received by an employee if he had been made redundant instead of being unfairly dismissed. For this reason, the Government consider that the limit for calculating the basic award should remain in line with the redundancy payments earnings limit. The new maximum in the basic award, therefore, remains exactly the same as the maximum redundancy payment of £4,200. The additional award which an industrial tribunal may award where an employer has refused to comply with an order to reinstate or re-engage a dismissed employee is also currently subject to a £135 weekly earnings limit, and this, too, is increased to £140.
Finally, I turn to the daily limit on guarantee pay. The Government propose to increase this limit from £9·15 to £9·50. Guarantee pay is payable for five days in a quarter, and the Government have decided that these limits should not be varied. The reason for this decision—that they still seem to strike a fair balance between the employers' obligations and the employees' rights—is given in the report which was laid before your Lordships at the same time as the draft order. To sum up, the increases take some account of the increases in average earnings, but are inevitably strongly influenced by economic and employment considerations.
I should now like to turn to the other order for which I seek approval, the draft Unfair Dismissal (Increase of Compensation Limit) (No. 2) Order 1982. This has been laid before your Lordships in accordance with Section 75(2) of the principal Act. It revokes the Unfair Dismissal (Increase of Compensation Limit) Order 1982, which set the limit on the compensatory award for unfair dismissal at £7,000, with effect from 1st February 1982. This limit is not subject to annual review under the principal Act, but it may be reviewed from time to time. Perhaps I ought to mention that, as in previous years, those consulted on the limits covered by the statutory review were also asked for their views on this limit. The Government propose that the upper limit on the compensatory award should be raised from £7,000 to £7,500 (an increase of about 7 per cent.) from 1st February 1983.
My right honourable friend the Secretary of State considered it appropriate that some account should be taken of the effects of inflation during the year. Furthermore, it is important to note that, whereas the weekly limit is used for the calculation of a basic award for unfair dismissal, the compensatory award is more closely related to the actual loss of the dismissed employee, and is therefore a truer measure of compensation.
In conclusion, I think that I should mention that the limit of £7,500 will apply not only to unfair dismissal compensatory awards, but to compensation which may be awarded by industrial tribunals in cases where complaints of discrimination under the Sex Discrimination Act or the Race Relations Act have been upheld. It is also relevant to compensation payable in cases involving unreasonable expulsion or exclusion from a trade union. I commend this increase and the order to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 6th December be approved.—(Lord Glenarthur.)
1.11 p.m.
Lord McCarthy: My Lords, I am glad that I intimated to the noble Lord, Lord Glenarthur, some of the questions that I wanted to put to him, because at least he has given us a great deal of argument about why these particular increases in both of these orders are what they are. It is much better for the House and for us that we should have had that kind of answer than—I say this with respect—the kind of answer that we had when the noble Lord, Lord Lyell, was here and was asked a question that he could not answer. He took the view, well, if caught out, use a tennis analogy. At lease we have some figures, at least we have some

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arguments, but I have to say that they do not add up, they do not fit, and they do not convince.
Setting aside the complexity of some of the arguments put forward by the noble Lord, Lord Glenarthur, the situation is simple enough. We have here two orders, and the first order, which affects basically weekly earnings limits on short time, insolvency, redundancy, and so on, does not in fact give us the same percentage increase in each case. In fact, the percentage increases vary from a little above 3 per cent. to a little above 4 per cent. So if the same factors apply throughout these series of cases, why do we not get the same percentage? However, much more important than that is the point that, whether the percentage is 3·2, 3·75, or 4·21, it is very much less than the RPI. Yet we have recently had through this House an order, which we welcomed, in which the Government, admittedly three years late, have decided to increase a payment under an Act of Parliament by the full extent of the RPI; I refer to the pneumoconiosis order. We have another order here today, the second one, which relates to the maximum for unfair dismissal compensation, where once again, in very broad terms, for the period under review I calculate that the 7 per cent. increase which is being proposed is roughly in line with the RPI.
So that is the mystery, and no amount of argument about the economic state of the nation and the other factors can explain why each one of the proposals has a slightly different percentage increase and in fact the unfair dismissal proposal is covering the RPI while all the others are no more than 50 per cent. of the increase in the RPI over the period.
I suppose that the only argument that might have been put forward is that it cannot be afforded, either by industry or by, for example, the redundancy payments fund. But of course we know that many of the increases do not come fully from the employer concerned, and in any case so far as the overall effect of employment protection goes, in the Employment Act 1980 the Government removed altogether very large numbers of people from protection in the case of unfair dismissal.
So I do not feel that we can accept an argument that somehow there is a situation of national economic crisis, which means, I think for the second or third year running, that we cannot fully index weekly earnings limits and things of that kind, but we can index unfair dismissal compensation. Perhaps there might be another reason, which came right at the end of the remarks of the noble Lord, Lord Glenarthur, when he said that the maximum for unfair dismissal compensation affects unfair dismissal on grounds on non-unionism. Well, of course anything that has an effect on grounds of non-unionism must be made as high as possible!
Lord Kilmarnock: My Lords, I, too, should like to thank the noble Lord, Lord Glenarthur, for his very frank exposition of the basis of the Government's calculations. Having said that, I should simply like to add my voice to that of the noble Lord, Lord McCarthy, and to ask why the Government in effect adopted a double standard of indexation? The increase
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under the unfair dismissals order is just over 7 per cent., according to my calculation, whereas, as the noble Lord, Lord Glenarthur, has himself confessed, the increase under the redundancy order, under Section 148 of the Act of 1978, is only in the region of 3·75 per cent. Surely there cannot be any justification for the application of a double standard in those upratings. Finally, in view of what I think is an increase of just over 7 per cent. on the unfair dismissal compensation amount, I should like to ask the noble Lord whether in fact that constitutes the Government's forecast of the rate of inflation during 1983.
1.17 p.m.
Lord Glenarthur: My Lords, the noble Lord, Lord McCarthy, argues that the increases that are being made by the orders are not in line with inflation, and that anyhow the two are completely separate. Perhaps I ought to point out that, so far as the second order is concerned, the 7 per cent. does in fact broadly reflect inflation—the increase in the RPI, anyway—over the last 12 months. I can give him the figures, which I am sure he already knows, relating to the last 12 months. In October the figure was plus 6·8 per cent. and in November it was plus 6·3 per cent. So 7 per cent. is rather more than that. The answer to the question of the noble Lord, Lord Kilmarnock, about whether that reflects what inflation will do over the next year, is that inflation is going to be lower than that.
The two reviews that I have dealt with are completely separate, and there is no reason for the increases to be the same. The increase of 7 per cent. was thought appropriate, having regard to the effects of inflation on the type of loss to which this particular limit applies. The 7 per cent. increase in the upper limit on the compensatory award is higher because this award relates to actual loss, and not to average earnings. As I explained when I spoke to the first order, my right honourable friend the Secretary of State has to take account of the economic situation generally. Despite what the noble Lord, Lord McCarthy, might feel about it, it is essential that he does so, and this is what he does. I fear that the noble Lord may not feel that the awards are quite as generous as the awards made for pneumoconiosis. I do not think that for one minute he will deny that it is absolutely no one's fault, but rather just extreme misfortune that those who work in particular industries suffer from the dreadful disease of pneumoconiosis.
I hope that in the light of all the circumstances, and in the light of the need for my right honourable friend to take account of all the economic factors which make up the present situation, the noble Lord will accept that these are the best increases that could be made under these awards.
Lord McCarthy: Before the noble Lord sits down would it be fair for me to summarise what he is saying in this way: that the Government's view is that where you compensate for redundancy and insolvency you take into account the economic situation, but otherwise not?
Lord Glenarthur: My Lords, I think it would be a mistake to go back to discuss pneumoconiosis. We have, in fact, closed the book on that.
Lord McCarthy: I did not say that.
Lord Glenarthur: My Lords, that is the implication of what the noble Lord has said. The answer is that I have made it perfectly plain that the Secretary of State had to take into account various factors before making these awards, and these are the best that can be produced in the circumstances which pertain at the present time.
On Question, Motion agreed to.

Unfair Dismissal (Increase of Compensation Limit) (No. 2) Order 1982
Lord Glenarthur: My Lords, I beg to move this Motion formally.
Moved, That the draft order laid before the House on 6th December be approved.—(Lord Glenarthur.)
On Question, Motion agreed to.

Juries (Amendment) Bill [H.L.]
1.22 p.m.
Lord Wigoder: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Wigoder.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD OF NUGENT GUILDFORD in the Chair.]
Clause 1, [Disqualification of certain convicted persons for jury service.]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Campbell of Alloway: At this stage it is not my wish to detain your Lordships with any debate on formal amendments to curtail the extended disability envisaged by this Bill, but, assuredly, at some stage this question warrants your Lordships' attention because on Second Reading some noble Lords wished to curtail the extent of disability envisaged by this Bill. In particular, I refer to the observations of the noble and learned Lord, Lord Elwyn-Jones, at column 602 of the Official Report for 17th November; but other noble Lords wished to extend it very substantially indeed. As an example, I refer to my noble friend Lord Elton at column 619.
A formal amendment would require some words of limitation to be inserted after the word "offence" in Clause 1, line 6, and possibly a schedule of exclusion. Would it not be more convenient if this question could be discussed at some later stage, preferably when the Government have formulated their own proposals and when one hopes, perhaps, that the noble and learned Lord, Lord Elwyn-Jones, may have crystallised some of his concepts for the assistance of some of your Lordships? Surely it would be wrong to rush such an important measure as this without full discussion on the extent of disability and all administrative aspects of its implementation in practice.
Lord Mishcon: The noble and learned Lord whose name has just been referred to is engaged at this moment upon other affairs, and apologises that he is not able to be with your Lordships. He is one of the more fortunate Members of your Lordships' House who has not therefore been detained until this moment and likely to be detained hereafter.
The noble Lord, Lord Campbell of Alloway, has quite correctly referred to the difficulties that are inherent in this matter. The Bill seeks to deal with a problem. Most of us feel there is some problem, and most of us feel that we have not reached the right formula and have not yet "crystallised" (to use the noble and learned Lord's word) our feelings, thoughts and philosophies on this matter. I find the view of the noble Lord, Lord Campbell, most acceptable in this sense: that at some stage or other very deep consideration has got to be given to the arguments for and against, if any formula can improve on the existing law. From that point of view I therefore agree with what the noble Lord, Lord Campbell of Alloway, has said.
Lord Elton: I think it might be useful if I were to use this opportunity to explain to the Committee the position of the Government on the Bill. I will not detain your Lordships for long. The siren calls not only for my noble friend's Second Reading but for the debate on the Unstarred Question set down by the noble Lord, Lord Mayhew; and, indeed, the Christmas Recess would make that perilous. As I made clear at Second Reading, there is very little between us and the noble Lord, Lord Wigoder, as to ends: each wishes to ensure that those who have shown their rejection of the essential values of our criminal justice system by their own way of life should be disqualified from jury service. We agree about ends, but we differ about means. The Government do not believe that the proposals in this Bill go wide enough. My noble friend was kind enough to point that out. Our own preferred approach would be to exclude from jury service anyone convicted of an imprisonable offence in the last ten years.
As some noble Lords may be aware, a Member in another place has introduced a Bill there to achieve this purpose. The Member concerned has drawn a low position in the ballot, but we shall clearly want to give him all the assistance we can. I do recognise, however, that the noble Lord, Lord Wigoder, will wish to proceed with his Bill, and, given our agreement on aims, the Government will not oppose it in its remaining stages in your Lordships' House. We are not now in a position to put forward substantive amendments of our own to the Bill, but we would not oppose any amendments that might be moved at later stages which were consistent with our own proposals, provided they were satisfactory and workable.
We shall also be pleased to make available to the noble and learned Lord, Lord Wigoder, the detailed drafting proposals for the Bill in another place as soon as they are available. In addition, I have drawn the noble Lord's attention to a detailed technical point in the Bill, which I gather he proposes to deal with later.
Lord Wigoder: I am grateful to the noble Lords who have spoken on this matter. It is very difficult to distinguish, I think, between a debate at Committee

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stage on "Clause stand part", where the clause is the only clause in the Bill, and a debate on Second Reading. Perhaps much of what has been said today could equally have been said—and, indeed, was said—when we had the debate on Second Reading.
I am grateful particularly to the noble Lord, Lord Elton, for indicating the view which the Government take. They still appear to adhere to their view that the proper course might be to seek to disqualify from jury service anybody who, within the last ten years, has been convicted of an imprisonable offence. It is the view of the noble Lord, Lord Harris of Greenwich, and myself, and many other people who have become involved in this matter, that this is far too wide an exception; that it is totally unacceptable to many of us who are deeply concerned about this matter; and if the Government propose to seek to proceed in that way, those of us who want something to be done will be forced into the position of resisting, and, in due course, opposing, the Government proposal.
I want to make that clear now because as your Lordships will know there is a Member in another place who has indicated that at the end of February he proposes to introduce a Bill on this subject. If that Bill proceeds on the lines the Government have indicated today, then that Bill is quite clearly doomed to total failure because under the procedures in another place it will obviously arouse opposition not merely from those who are disposed not to alter the present position at all but from those who, like Lord Harris of Greenwich and myself, are disposed and anxious to alter the present position but in a reasonable and moderate way. For that reason, I am grateful to the noble Lord for indicating his view.
Equally, it gives me a chance to suggest to the Government that the way to proceed to get something on the statute book (about which so many of us are agreed) is to take a moderate formula of the kind envisaged in the Bill, which will meet with very wide support. It will not arouse the vehement opposition of those who quite rightly will say that the Government's proposal will be a totally unwarranted interference with civil liberties and will exclude far too many people—all those who have on one occasion succumbed to sudden temptation in what may be a very minor matter—from jury service.
I ask the Government therefore to consider whether the way ahead is not to allow a Bill of this nature to go through as being a compromise solution which would have the effect of restricting jury service in the sense that it would exclude those who in ordinary parlance would be called criminals from serving on juries. It would mean that it would exclude, therefore, some people who otherwise it could be assumed would inevitably approach jury service with deep-seated and quite improper prejudices; and it would exclude from juries many of those who were so obviously susceptible to jury nobbling.
If we can exclude those people by some formula of this sort, I venture to think that the precise formula is not very important. Whenever we seek to draw the line in this matter—and I accept the point of the noble Lord, Lord Campbell of Alloway—there will be those
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who say it is a little too far one way and those who say it is a little too far the other way.
The important point is to proceed to draw a line in order to deal with an abuse that has now been so widely accepted and recognised. In those circumstances, I hope that your Lordships will agree that this clause should stand part of the Bill. I hope that in due course the Government will accept the argument for finding time in the other place for a Bill of this nature in order to get on to the statute book something of the sort that we all want to see achieved in the very near future.
Clause 1 agreed to.
Remaining clause agreed to.
House resumed: Bill reported without amendment. Report received.

Trade Marks Act 1938 (Amendment) Bill [H.L.]
1.34 p.m.
Lord Campbell of Alloway: My Lords, I beg to move that this Bill be now read a second time. As is apparent to your Lordships from the short Explanatory Memorandum, the intendment of this Bill is limited to the implementation of the recommendations which the Mathys Committee in 1974 made in paragraph 70 of their report. This committee included among its members eminent industrialists and lawyers having specialist expertise in all aspects of industrial property. If I may remind your Lordships, paragraph 70 of the report contains this recommendation:

(i) "That provision should be made in the Trade Marks Act for the registration of marks used or proposed to be used for distinguishing services offered in the course of trade or business.

(ii) That the provisions relating to marks for goods in the Trade Marks Act should apply so far as is feasible to marks for services.

(iii) That the prohibition of registration of identical and nearly resembling marks for services should apply in the case of closely related services.

(iv) That there should be provision for the refusal of marks for services which conflict with the same or nearly resembling marks already registered for closely related goods and vice versa."

The machinery adopted in this Bill to secure this intendment is to amend the Trade Marks Act 1938 following in substance—but not in form—the Australian precedent. The first draft of this Bill using the Australian precedent was prepared by my learned friend (as we say at the Bar) Mr. John Burrell, QC, who is chairman of the Industrial Property Committee of the Society of Conservative Lawyers. That is a committee that I set up some years ago and on which I still continue to serve as a member. It is right that your Lordships should know that this Bill is not introduced at the instigation of any association or at the behest of any sectional interest. The way it comes before your Lordships' House is the way—perhaps a rather haphazard way—that I have described. There is no political motive whatever. But, since its introduction in this rather curious way, it has, as I shall inform your Lordships, received unsolicited very substantial support.
The scope of this Bill is strictly limited to the intendment, the simple single concept, of

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implementing paragraph 70 of the Mathys Report to which I have referred. In the list of speakers today noble Lords from both branches of the legal profession are to speak on a plane which transcends party political considerations. Other noble Lords with practical experience of industry are also to speak. It would be wrong—and I do not propose to do it—to anticipate such measure of support as this Bill may be given. It is however, as I mentioned before, only right that your Lordships should know that, since its First Reading a short time ago, the Bill has received unqualified support—and I have the documents in my possession if any noble Lord wishes to see them—from the Trade Marks, Patents and Designs Federation, which represents the owners of industrial property in British industry; the Association of British Chambers of Commerce; the Institute of Trade Mark Agents; the Institute of Directors; the CBI and other associations.
Why is this so, my Lords? It is because—as they appreciate—if we delay and wait for the European Community legislation and for the Bill which must follow such legislation, the owners of service marks which are at present not registrable but would be under this Bill will by, say, 1985, 1986 or 1987, have lost priority against other countries in Europe since no prior registration of these marks will exist in the United Kingdom. No doubt, in say, 1985, 1986, 1987, or 1988, the whole system of trade mark law must come under review, leading to some new consolidating Bill to implement the European Community legislation. But this in no way detracts from the case for this Bill: indeed it enhances the case for immediate legislation. Furthermore, as the Trade Mark Registry is now being reorganised under the Rayner studies, there is, in submission, no reason why service marks should not form part of such a reorganisation.
In that context, it is right that your Lordships should know that correspondence with the department, which I have in my possession, shows that although an increase in style would be required in the registry, which could provide perhaps a little employment for some of the unemployed, an all-round increase in fees for goods and services would avoid the need for subsidy on account of any additional expense. That is in an exchange of letters which I have in my possession. This was based on the anticipated 3,000 applications a year for the registration of service marks, as compared with about 17,000 a year for goods.
I informed your Lordships that the scope of this Bill was limited to the intent, as it assuredly is. The scope is limited to ordinary marks. No amendment is contemplated in respect of certification marks, defensive marks and cotton marks. The amendment relates only to registrable trade marks now limited to goods, and in no way affects the criteria of registrability, distinctiveness and so forth, laid down in the master Act.
The case for this Bill is not limited to European Community considerations, which demand the immediate introduction of this type of protection. It also arises quite apart from such considerations. May I deal first of all with the European Community position. As your Lordships know, but with your permission perhaps I may remind you, the majority of
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the industrial countries of the world—Australia, Canada, the United States and 64 other states including the USSR, four member states of the European Community (Denmark, France, Italy and Germany) and Benelux legislation will be in probably by the end of 1983 or January 1984—now provide for registration of service marks in their national legislation.
The absence of such a facility in the United Kingdom not only places the service industries at a disadvantage with manufacturing industry but also is especially detrimental to our interests when the Community trade mark is introduced in the years ahead, for the reasons that I have given. It is of importance to repeat that under the commission's proposals a trader will not be permitted to oppose an application for Community registration unless he has a national registration, which is exactly what this Bill seeks to provide. Thus the creation of a United Kingdom service trade marks register is no less than essential to place British service industries in a position to protect themselves and their goodwill when the Community trade marks system in the years ahead comes into force.
It is perhaps unnecessary to stress to your Lordships the importance of the service industries to our economic survival and revival. It has been mentioned so often in your Lordships' House. Since the Mathys Report in 1974, starting in 1978. representations have been made to the department, all to no avail. In June 1980 the Institute of Trade Mark Agents submitted a memorandum to the department seeking amendment of Section 68(1) of the Act of 1938 to this end (see page 6 of their memorandum)—all to no avail. On 17th November 1981 representations to this effect were made to Sub-Committee "E" on the introduction of legislation on service marks well before any EEC law on European trade marks was to come into force (see paragraph 167 of the transcript of evidence).
On 9th June 1982, with the leave of your Lordships' House, I asked Her Majesty's Government when it was proposed to implement these recommendations of the Mathys Committee concerning the registration of service marks in line with the practice now adopted in other countries, some of which were Commonwealth countries and some of which were Napoleonic code countries, many of which were our competitors. It was accepted on all sides of the House that there was a case of urgency. I refer in particular to the support of the noble Lord, Lord Lloyd of Kilgerran, whose expertise on this subject is again available for the assistance of your Lordships today. I refer also to the support of the noble Lord, Lord Davies of Leek. I see that he is again to assist us in this matter, as is the noble Lord, Lord Spens.
Apart from some perhaps irrelevant exchanges about the export of oil, the views expressed on the subject of the question were clear and unequivocal: the Hansard reference is vol. 431, No. 100, cols. 193–6. It was perfectly plain that the mood of the House sensed the urgency; but all to no avail. My noble friend Lord Cockfield, while not opposing implementation of the Mathys Report in principle, rejected the case of urgency on the grounds that a draft regulation and a draft directive on trade marks had recently been

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published by the European Commission. But, with respect to the noble Lord, it was a total misconception to seek to oppose the mood of this House, as expressed on that occasion, on those grounds.
First, why wait until four other member states had gone ahead and a fifth was to come? Secondly, how long do we need to wait anyway? Thirdly, while we wait our service industries suffer the disadvantage to which I have adverted. Fourthly, the intellectual argument of my noble friend the Minister is simply not understood. Fifthly, what about the matter that I am coming to swiftly in one moment—the case which arises quite apart from European Community considerations?
The case which arises, apart from Community considerations, is simply stated, and is really that those who operate these services should be enabled to have the like facilities as exist in the case of trade marks to protect their industrial property, so that an action would be based on registration and would avoid the complex procedures and evidential criteria necessitated by the more expensive common law action for "passing-off'. Furthermore, many businesses are simply not large enough to justify the expense of Community registration and others will not require such wide territorial scope, because they are essentially local in character—such as hotels and travel agencies. The existing system is wholly anomalous and there is a valid case for the introduction of national registration of service marks, which this Bill would secure, quite apart from Community registration.
In conclusion, I should like very briefly to explain, as is explained in the Explanatory Memorandum, the situation that arises under the Nice agreement. I have the documents here and they will be available for your Lordships to peruse in the Library, if so advised. It will be for the Department of Trade to prescribe the necessary rules, classifications, procedures and so on which are applicable to the registration of service marks. This is provided for by amendment of Section 40 of the Act of 1938. The Department of Trade will have power to make rules, so as to empower it to classify services in accordance with the Nice arrangement of 1957 concerning the international classification of goods and services to which the United Kingdom is a party.
There were 15 signatories to the Nice agreement and these included four of the six who had set up the Common Market, and the United States of America. This agreement was concluded in Nice in June, 1957; it was revised in Stockholm in 1967; it was revised again in Geneva in 1977, and this is the latest state of the international classification. Your Lordships will find Parts I and II of that classification in the Library. The third edition has over 1,250 services. This is the current 1981 edition. The classification is in English and French, both texts having equal authenticity. This will be modified and supplemented from time to time by the Committee of Experts; and the fourth edition is in course of preparation.
Part I of the classification has four columns—column 3, the English; column 4, the French; column 2 giving the serial numbers of the indications in English, and column I giving the key to Part II where
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the lists of services are arranged in class order, each class being arranged in alphabetical order. I hope that I have indicated to your Lordships sufficient of the nature of the situation. All that I have to mention is that the transposition of the Australian first draft, to get it into the form in which it is before your Lordships—in other words, the right way up—involved, first the correction slip which your Lordships have and also a formal amendment with an extra five lines of paragraph 10 to the end of the schedule. My Lords, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Campbell of Alloway.)
1.55 p.m.
Lord Mishcon: My Lords, I think your Lordships will feel that this is a useful little Bill. It is one that is very suitable as a Private Member's Bill and it has been presented to us by the noble Lord, Lord Campbell of Alloway, with his usual clarity and persuasiveness and in the typical tones of Father Christmas. I shall try, as a non-specialist in this field, to use simple language in endeavouring to support the Bill, the object of which is very short and it is this. The Trade Marks Act 1938 covers goods which are used in trade and many people, such as those who are specialists in this field, the professions and other people engaged in services—which, as your Lordships have rightly been reminded, are so vital to our economy, both in regard to foreign currency earnings and to our own home market—have thought for a long time that these services should also be included by way of protection and control in trade marks legislation.
As your Lordships have been told, it is no new proposition. The Mathys Report was issued eight years ago and it made the recommendation in, I believe, paragraph 70 which was quoted by the noble Lord. Therefore, I do not intend to burden your Lordships with a re-quotation of that paragraph. Why is it that we move so slowly in regard to carrying out recommendations which have such universal support among those people who are affected? As I said, the report came out eight years ago and this Bill would be merited, even if there were no question of any draft EEC directive or regulation. Nothing has been done about it and, very regrettably, other countries are in advance of us. Why should they be in advance of us? Why should four other members of the EEC and 60-odd other industrial countries be in advance of us? Why should the United States and even the USSR be in advance of us? Why are we so slow in moving to legislate, even on simple matters like this?
As your Lordships have been told, there is a draft directive and a draft regulation. They have been tossed around and observations have been made, and our own Sub-Committee E of our EEC Committee has dealt with them. We know that the EEC directive and regulation will be laid in the not too distant future, and they will be to the effect that we shall have to legislate in order to deal with various matters relating to trade marks. One of those matters will be the inclusion of services for trade marks protection. Is it sensible to wait until the final EEC directive and regulation come before us?
In support of what the noble Lord, Lord Campbell of Alloway, has said, I suggest that it would be

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senseless and most disadvantageous to wait. The evidence was given clearly to Sub-Committee E. Perhaps I may read a short quotation from the evidence given to Sub-Committee E, who will be reporting very shortly. I am a member of that subcommittee and can tell your Lordships—I do not believe I am saying anything improper—that there will certainly be nothing in the recommendations to suggest that it is not a good idea for a Bill of this kind to be passed by your Lordships' House.
The evidence which was given to the sub-committee was very clear. It was given by the appropriate institutes which govern trade mark agents, the Chartered Institute being one of them. I quote from Question 167:
"We would like to see that legislation come in well before any EEC law for European trade marks, both so that the service marks are in the register as registrations that can be used in opposition, and so on, and also to give the United Kingdom some experience of administering and dealing with service marks generally, especially if the United Kingdom is going to be the home of the European Trade Mark Office".
Those who know about these matters are pleading, even without the recommendation that was made eight years ago in the Mathys Committee and what has been said since, and even with regard to the EEC directive and regulation, that we should get a move on and legislate about this matter; that experience is needed of a national register of trade marks in relation to services; and, much more vital, that when EEC legislation is brought into effect, people want, as holders of registered trade marks, to be able to oppose trade marks relating to services which may exist elsewhere, because if they are not on the register they will be unable to do so. That is what the draft directive and regulation says. When I see the noble Lord, Lord Campbell of Alloway nodding his head in assent, I know that I have said something sensible.
In those circumstances, this is a good Bill to support. When the Government reply, I hope very much that we shall not be fobbed off yet again with a request to wait. I am reminded of the gracious voice—as it was—of the first Viscount Samuel, who sat with such eminence on the Front Bench of the Liberal Party. At a meeting I attended which honoured the centenary of the modern civil service I remember so well that on that occasion the speakers were somewhat lugubrious. Certainly they were very serious. In paying his tribute to the Civil Service for all that they had done to make his career so illustrious, the noble Viscount said that he would always remember them for one thing: that they have a problem for every solution. We can easily find a problem for this solution. The problem is the cost. The noble Lord, Lord Campbell of Alloway, dealt with that. I am not going to repeat what he said. It could easily be dealt with by charges and possibly would give a little extra employment at this time, as the noble Lord said.
It may be asked whether or not we should wait for the EEC directive and regulation to be finalised. I hope that question has been answered by what both the noble Lord, Lord Campbell of Alloway, and I have said. Instead, therefore, of delaying or vague words being spoken this afternoon on behalf of Her Majesty's Government, I very much hope that this Bill will be given a welcome by the Government and that they will see that it has a favourable wind in order to get it on
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to the Statute Book. It will be a valued addition to the Private Member's Bill history of this Parliament.
2.5 p.m.
Lord Lloyd of Kilgerran: My Lords, in warmly supporting the Bill, first may I congratulate the noble Lord, Lord Campbell of Alloway, upon his initiative in introducing it. I am sure that the noble Lord, Lord Cawley, who I am so pleased to see in his place, will join with me in saying how glad we are to welcome into this exotic field of trade mark law so many noble Lords on this, the last day before the Christmas Recess.
The noble Lord, Lord Mishcon, has indicated that this is simple Bill; but it is a very important one. I do not propose to go fully into these matters, in view of the speeches of the noble Lord, Lord Campbell of Alloway, and the noble Lord, Lord Mishcon. The Trade Marks Act 1938 has been a very important tool, and has been of great use to industry. It has its faults, but it has never been amended. That shows what a useful tool it has been. It has been with us for 44 years. But difficulty arose in 1945. It came as a great shock then to practitioners in the trade mark field and to industry when the Judicial Committee of the House of Lords refused to allow the registration of the word or mark "Rysta" because the company claiming registration only repaired stockings of other manufacturers and did not themselves offer, and did not intend to offer, any goods on the market. The decision turned on a very narrow interpretation of the words "use in the course of trade".
If I may mention a personal matter, my late uncle was then the Registrar of Trade Marks. It was his decision to allow the registration of "Rysta" for repairing stockings which was reversed by the House of Lords. He was very perplexed about that narrow decision. He had a dual interest, because he himself played a great part in drafting the 1938 Act. Since 1945, therefore, the wrongful use of a mark or word in association with services could only form the basis of an action for passing off, and actions for passing off are usually very expensive in view of the amount of evidence required to present the case.
From time to time suggestions were put forward to remedy this position. Service marks became the subject of statutory rights in many countries, as your Lordships have been told. We had the Mathys Report and, so far as industry is concerned, the importance of service marks has increased rapidly in the last decade. More and more people are employed in service industries. Many people have forsaken manufacturing industry for service industries, as must be well known to your Lordships. The Government have encouraged this development, particularly in the field of information technology, where the energetic action of the Minister for Industry and Information Technology, Mr. Kenneth Baker, and his deputy John Butcher have done such splendid work.
If any evidence is required of the importance of services in that field and of the fact that increasing employment is arising in the field of information technology, may I draw your Lordships' attention to the publication I hold in my hand, which is the first issue of a new journal on information technology and

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public policy published by the Parliamentary Information Technology Committee—affectionately known as PITCOM—of which I have the honour of being a founder member. This is the first publication issued by any all-party parliamentary committee on a regular basis, as I understand it, and it includes a number of articles based on speeches made to the committee during the last 18 months, which show how important service industries are now becoming. Therefore, it is increasingly important that service marks shall have statutory protection.
While this Bill in its present form is very useful, I should draw the attention of your Lordships to a matter to which the noble Lord, Lord Mishcon, referred and which may be relevant at Committee stage. It is very desirable to form an official register of trade mark agents. The EEC trade mark procedures will require a list of trade mark agents and therefore it is necessary to have a register of trade mark agents of this country. I am very familiar with the high standards of examinations which trade mark agents in this country have to pass. I would also like to see fully qualified trade mark agents allowed to participate before certain courts in the same way that chartered patent agents are now allowed to participate, arising from amendments inserted into the Patents Act 1977.
I will refer briefly to developments in the EEC. The noble Lord, Lord Mishcon, emphasised how vital it is to have statutory protection for service marks in the United Kingdom Act before the EEC trade marks Act is passed. Industry in this country is bound to suffer if the Government decide to postpone action implementing this Bill until the trade marks Act of the EEC comes forward. If that step is not taken by the Government, industry in this country will suffer because of loss of priority in regard to date. It would in those circumstances be quite possible for persons in countries of the EEC to register now some service marks well known in this country—for example, "Telecom"—and thus deprive British industry of the right to use such words, because of their prior registration. It is essential, in the harmonisation of trade marks law which the EEC's draft Act contemplates, that this country should give statutory protection to service marks.
Obviously, after 44 years, the Trade Marks Act 1938 requires certain other amendments in order to bring it up to date. I do not propose raising any further matters in regard to improvements to trade marks law at this stage. The noble Lord, Lord Campbell of Alloway, has indicated that there are other aspects which might be seen to later but not during consideration of this Bill.
2.14 p.m.
Lord Noel-Buxton: My Lords, I rise to support this Bill and to suggest some further amendments which could usefully be made to the Trade Marks Act 1938 at this stage. I might possibly differ very slightly from the noble Lord, Lord Lloyd of Kilgerran, in this respect, but I think he may agree with me that my proposed amendments are of a minor nature and could not and will not overload this Bill.
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English statute law should indeed recognise that it is appropriate and desirable for trade marks to distinguish services as well as goods. I welcome a Bill which seeks to effect this in such a straightforward manner. It seems to me totally unreasonable, indeed absurd, that the protection afforded by the 1938 Act should extend only to marks applying to goods, and then only in the course of trade, as contrasted with business, and not also to service marks.
The number of undertakings offering services must be of the same order as the number of undertakings manufacturing goods. I do not have the figures, but I suspect that the number of service undertakings is far greater. I, too, find it totally unacceptable that so much of British industry is so disadvantaged—for substantially disadvantaged it is. At present, an undertaking using a name, device or other mark to distinguish its services from other services offered in the course of trade or business cannot register that mark. It is not open to the undertaking offering services to pursue an unauthorised user by way of trade mark infringement action; service undertakings can only rely on the common law action of passing off.
Anybody with only a passing acquaintance, even, will confirm the difference between a trade mark infringement action and a passing off action. The former is relatively straightforward, while the latter is onerous and complicated. I remember the noble Lord, Lord Mishcon, making a similar point so eloquently on the Second Reading of the Companies (No. 2) Bill. As the noble Lord confirmed, to create a valid action in passing off places a very heavy onus on the plaintiff, especially if he is in business in a small way.
Many of my foreign clients have expressed surprise when I have had to explain to them, counter to their expectation, that the law in this country does not in effect recognise service marks. The United Kingdom is out of line with other advanced legal systems in this regard. Many countries provide for direct registration of service marks on their trade mark registers. My noble friend Lord Campbell of Alloway gave us a very impressive list. The United Kingdom was—and it should be emphasised again, I think—a party to the 1957 Nice agreement, under which an international classification of goods and services was issued. It is high time that the law of this country recognised service marks and the need for them to be capable of registration essentially in the same way as trade marks relating to goods.
The Trade Marks Act 1938 provides that, subject to its provisions, a trade mark may be registered if used or proposed to be used in the course of trade, and a registered trade mark is infringed by unauthorised use in the course of trade. I see no good reason, however, why the protection afforded should be restricted to activities strictly in the course of trade, as contrasted with the wider concept of business generally. The noble Lord, Lord Lloyd of Kilgerran, gave us a splendid and an early example of the strict interpretation of the Trade Marks Act 1938.
The Explanatory Memorandum relating to the Bill before your Lordships, which follows the recommendation of the Mathys Committee, speaks of a series of amendments to the 1938 Act so as to ensure that the relevant provisions apply equally to service marks

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used in the course of trade or business. I hope that the addition of the words "or business" reflects the intention in this matter. My noble friend is nodding.
Marks, be they service marks or marks used to distinguish goods, should be the proper subject-matter of registration and infringement proceedings if used in the course of trade or business. I would illustrate my point by an example. I know of at least one well-known charity which seeks to use trade marks extensively in its fund-raising activities. It cannot be said to be conducting itself in the course of trade, but it is certainly conducting itself in the course of business. Are such charities and other undertakings conducting themselves not strictly in the course of trade to be denied the protection of trade mark registration effectively on a technicality? The position should be put beyond doubt by the insertion, where appropriate throughout the 1938 Act, of the words "or business" after the word "trade".
Two other amendments could usefully be made to the 1938 Act without overburdening it. They could be added to the schedule to this Bill. First, and again as recommended by the Mathys Committee, Section 68(1) of the 1938 Act should be amended to define "trade mark" in a much more satisfactory manner. "Trade mark" should be defined along the following lines—and these are the words of the Mathys Committee:
"A mark used in relation to goods or services so as to indicate a connection in the course of trade or business between the goods or services and some person having the right to use the mark".
Secondly, the anomaly that the benefit of a trade mark application cannot be assigned should be put right. Section 22 of the 1938 Act should be amended by deleting subsection (7) and inserting a provision whereby an assignee may be substituted as the applicant for the original applicant.
I fully support the Bill in its principal purpose. I hope that with some further amendments and some fine tuning the Bill will reach the statute book. To this end I trust that the Government will in the event see their way open to lending such assistance and support as may be necessary.
2.22 p.m.
The Duke of Portland: My Lords, I wish to draw your Lordships' attention to the advantages which the purchaser of services will derive from the Bill. A service mark will provide an indication that the holder of the service mark is, presumably, reliable and anxious to give a high standard of service in order to maintain the prestige attached to his service mark. Thus, if someone wishes to have his car serviced, he will give preference to the holder of a service mark rather than to some garage of which he has had no experience and which might prove to be excessive in its charges and unreliable in its work.
There is another example. A person wishing to have a bath shower installed may entrust this task to a plumber bearing a service mark, and the work is done satisfactorily. Another person instructs a casual plumber to perform the task, with the result that the bath shower does not function satisfactorily and it is probably the manufacturer who gets the blame.
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Fifty years ago services had not assumed the importance that they have today, when they are described on the BBC as a service industry. This, I believe, is largely due to the fact that machinery of all sorts has become more and more complicated. Fifty years ago I would have felt capable of carrying out minor repairs to my car. Today, the mechanism is so complicated that I can do no more than lift the bonnet. Your Lordships have heard of the advantages of this measure for the purveyor of services, but I submit that it will also help to safeguard the interests of the purchaser.
2.25 p.m.
Lord Davies of Leek: My Lords, I have listened to this debate with great interest. Indeed, I can cut out about 50 per cent. of what I had planned to say because it has already been said, and I would not like to see a repetition of some of the excellent speeches that have been made by knowledgeable noble Lords. However, I want to make a contribution based on the report and to mention that there are other types of services. Also, if we were playing molecular roulette in pharmaceuticals there would be another aspect and that is the need for co-operation with Europe, Japan and those parts of the world that are developing in that field. I would particularly have liked to see a small addition. Incidentally, I am glad to note that we have now got the correct pronunciation of the name "Mr. Mathys". I was rather worried about that.
On page 76 of the report there is the heading:
"Proposals for a Standing Advisory Committee on Trade Mark Law and practice"—
and I would now add,
"and Services".
It is worth getting this on the record. Page 76 continues:
"The Trade Mark Liaison Group should be re-formed as a Standing Advisory Committee on Trade Mark Law and Practice which would be available for consultation by the Government as required.".
I think that the Government need consultation because of the multifarious services that have been developed and the movement in the electronic world as regards new patents and new ideas. Unless we pull up our socks—to use a colloquial expression—we shall be left behind by the Europeans, and also by other parts of the world. There is a need now to get into the lists, and, as has been recommended by the noble Lord who opened this debate, to develop our activities, so that we are there with knowledgeable information when new organisations are established in Europe.
I should like to mention one passing thought and then I shall sit down, because most of what I wanted to say has already been said. The passing thought is this: please let us have some idea how a man can protect himself, either with his service marks or with his trade marks, without colossal expense. If we believe in encouraging the small businessman, then this is an area that is of vital importance to the little man—and I use the phrase "little man" metaphorically. The little man, if he has to go to law as regards the protection of some of his little patents or something else, needs to do it successfully but within a range of finance that he can meet without being bankrupted. What more can I say that has not already been said?—nothing, so I will sit down.
2.28 p.m.
Earl De La Warr: My Lords, like the noble Lord, Lord Davies of Leek, I feel that all the arguments have been adduced, and adduced extremely powerfully, particularly by my noble friend Lord Campbell of Alloway, who I am glad to say has introduced this Bill. The reason that I have taken some interest in it is that for the best part of my life I have been engaged in working in service industries. I was employed for a long time by a very large conglomerate whose name some of your Lordships will know, and about 90 per cent. of whose companies were service companies stretching from passenger transport to entertainments, to Wembley Stadium, to plant hire, to laundries. One could almost say: you name the service, we have it. It is for that reason that I thought that I should take an interest in this Bill. Accordingly, in order to bring myself up to date, I went to discuss the matter with some of my old friends.
It might help your Lordships' consideration of this Bill if I give your Lordships one example from an associated company—namely, Initial Services, which is a textile rental company. The nature of their business is that they rent out towel cabinets and keep them serviced with clean towels every week; they rent out linen garments to girls in factories, which they design themselves, and take them back, wash them and trim them. They are involved in industrial overalls and, to a growing extent, they are in office cleaning. Thirty per cent. of their business is overseas, carried out through subsidiary companies all over Europe, in Australia and the Far East. They have been keenly aware of the need to protect themselves as a service company.
About a year ago they started to see what they could do about it, but, try as they would, they came to the answer that your Lordships will expect, and were told that there was no way that they could register their mark as a service mark, and that they would have to depend upon common law. So they did the only thing they could, which was to register the one piece of machinery which they have, which is the towel cabinet—from which your Lordships will have drawn lengths of towel in order to dry your hands—and thereby accepted that all that was available to them was the trade mark on goods.
However, they did not stop there because they were so anxious to protect themselves in these matters that they began to register service marks in the countries in which they had subsidiaries. They have already registered in France and I believe that it is their intention to register a service mark wherever they trade and wherever the service mark is available. I can only say that their reasoning is exactly the reasoning that we have heard from your Lordships this afternoon, but I thought your Lordships would like to know of a specific example of a company which feels that it needs protection and is worried about what will happen when the Community mark comes along.
We have heard that 64 countries have already done this. It is eight years since the Mathys Report was published. I find it extraordinary that successive Governments have succeeded in putting this important trading matter into their bottom drawers. There have been constant approaches and constant
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excuses as to why they cannot proceed and I daresay that the excuses have varied through the years. Probably the one that we shall get this time is the arrival of the Community mark; but my noble friend Lord Campbell has dealt very adequately with the inadequacies of that.
I should just like to say one more thing and, if I may be so impertinent, I should like to offer the Government a bit of advice and something of a warning. There are many trade associations which understand these affairs; there are a number of intelligent companies which understand them; but it is a fairly esoteric subject. It is not the sort of subject that comes up at board meetings once a month, and up to now a great many service companies have not been aware that there is legislation of this sort that could come on to the statute book to give them protection of this sort.
I want to warn the Government that, as a result of this debate, there will, I am certain, be a volume of pressure which is altogether greater than anything that they have known in the past. For the reasons that have been given, and also, if I may say so, for the reason of their own self-protection, I think that they would be very well advised to take this Bill seriously and not only see it through this House but make sure that it ends up on the statute book.
2.35 p.m.
Lord Cawley: My Lords, I rise to support my noble friend Lord Campbell of Alloway. This is an amending Bill. It amends the Trade Marks Act 1938. Therefore, I thought that it was a suitable moment to say one or two things about that Act. The noble Lord, Lord Lloyd of Kilgerran, has said some somewhat flattering things about that Act, but I think he has been looking at it through rose-tinted spectacles. It is an open scandal that it has not been amended.
When it was quite a young Act in 1940, on 9th May, the important section that deals with infringement came before the Court of Appeal. Lord Justice MacKinnon said this:
"In the course of three days' hearing of this case I have, I suppose, heard Section 4 of the Act of 1938 read, or have read it for myself, dozens if not hundreds of times. Despite this iteration, I must confess that, reading it through once again. I have very little notion of what the section is intended to convey and particularly the sentence of 253 words, as I made them, which constitutes subsection (1). I doubt if the entire Statute Book could be successfully searched for a sentence of equal length which is of more fuliginous obscurity".
For the benefit of your Lordships who do not usually use the word "fuliginous", it means "sooty, or dusky".
The Master of the Rolls said this:
"Nor must the fact that the language used is crabbed and involved deter the Court from endeavouring to discover its meaning. Every Act of Parliament must be approached with the conviction that its language is capable of a reasonable construction when carefully examined".
I make no apology when I tell your Lordships that this is the second time that I have read the learned Lord Justice's remarks in this House, but the first time was so long ago that I think that a majority of the noble Lords who heard them then are dead and a new generation has arisen, so I thought it apposite to mention them today.
The difficulties in interpreting this Act go further, because about 30 years ago I read a paper to the

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Chartered Institute of Patent Agents entitled "Trade Marks wrongly Remaining upon the Register". That dealt with the circumstances in which a trade mark, validly registered, could become invalid in the light of later events. The provisions in the Act are anything but clear, and my paper was full of my own views which might, or might not, agree with the future judicial construction of the Act.
Five years ago next month, I spoke on the Second Reading of the Patents Bill and remarked on the greater necessity for a new Trade Marks Bill since the earlier Patents Act was passed in 1947 whereas the Trade Marks Act had been passed in 1938. I think I may repeat what I said then because I think it is apposite again today. I said on 24th January 1977, at col. 289:
"In a country depending on industry any Bill to reform patent law after 27 years is certainly welcome … I should like to point out that though patents are vital to industry, so are trade marks, and the last Trade Marks Bill was in 1938, which is 39 years ago. Many industrialists think that trade marks are far more important than patents, and I hope that we can have the assurance that in the near future there will be a Trade Marks Bill. I say this not from any partisan standpoint because I think that this side of the House has been equally as remiss as the other side in not dealing with these matters, which are so important to industrialists".
The Lord Chancellor of the time, the noble and learned Lord, Lord Elwyn-Jones, replied:
"The noble Lord, Lord Cawley, raised the point that it was important that there should be a Trade Marks Bill also. I agree that it is important, but I am afraid I can make no promise that such a Bill will be introduced, and I will tell the noble Lord why. Negotiations are now taking place for the establishment of a Community trade mark. I think the noble Lord will probably agree with me that it is important to get that right so that whatever changes we may make will harmonise with Community proposals".
Five years later, I do not agree that further procrastination is acceptable. The Bill before the House today does harmonise with Community proposals. Let us make an important and, to some industrialists, a vital improvement to trade mark law now. Real damage is imminent for some industrialists unless we do this. Any statement that there will be a new comprehensive Trade Marks Bill within the foreseeable future would obviously be somewhat hollow, and, if the present timetable is adhered to, I shall be in my mid-90s when I rise in my place to congratulate a future Government on introducing such a Bill. I urge my noble friend not to withdraw the Bill at this stage.
2.42 p.m.
Lord Lyell: My Lords, I am sure your Lordships will agree that my noble friend Lord Campbell outlined with the traditional clarity of his calling and profession and with real passion and feeling the purpose of his Bill and his reasons for seeking an amendment to the present Trade Marks Act. I wish to stress at the outset that the Government recognise the vital importance of the service industries to the economy of this country and fully understand and appreciate the valid reasons that have led my noble friend to introduce his Bill. He pointed to the fact, as did many other speakers, that service marks cannot be registered in this country, unlike many other countries. However, I stress that, unlike many other countries, we have the benefits of our common law, and service marks are forcefully protected under the common law.
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We would not dispute that it is more convenient for a company involved in trade mark litigation to proceed by way of an infringement action based on a registered mark rather than a passing-off action under common law. But if those industries were hampered by the absence of registration facilities, we should have taken action before now. As it is, we consider that action taken immediately would be premature, for reasons I shall elucidate.
My noble friend drew attention to the report of the Mathys Committee and, as noble Lords will be aware, they recommended, among other things, that provision should be made for the registration of service marks. We are of the opinion that the recommendations have been largely overtaken by Community proposals, which are certain to result in fundamental changes to our law, and that includes, of course, trade mark registration. These Community proposals are, as noble Lords will be aware, already contained in a draft regulation and directive. Under the regulation, a single application to the Community Trade Marks Office would result in a single Community trade mark covering the entire Community. The national systems would co-exist with the Community system, but in order to ensure that they are in step with the Community system, the directive provides that the criteria for registration and validity, as well as the rights conferred by registration, would all be aligned with the Community system.
I am sure that your Lordships will readily appreciate that these proposals inevitably raise serious questions about the future direction of United Kingdom trade mark practice. This particular point has been made in a report by the Select Committee on the European Communities, prepared under the chairmanship of the noble and learned Lord, Lord Scarman, and which, I am given to understand, your Lordships will have the opportunity to debate after the Christmas Recess. I would hope that my noble friend would agree that it would be undesirable to embark on legislation of the kind proposed by this Bill before we determine the future course of British trade mark law.
My noble friend stressed that our service industries would be placed at a disadvantage unless a service mark register was created before the Community system came into force. I am aware that in trade mark circles in this country some anxiety is felt because the draft Community regulation does not provide for opposition to be raised against a Community trade mark application on the basis of an unregistered service mark. Instead a trade mark owner would need to protect his rights by the more complex invalidity procedure provided for in the draft regulation.
However, I would suggest to your Lordships that this problem is not confined to service marks, nor indeed is it confined to the United Kingdom. The Government will not stand idly by and allow our service industries to be at a disadvantage—and I wish to stress that point very strongly this afternoon. The Government have made constructive proposals for meeting this particular problem, and our proposals are receiving a very large measure of support in the discussions which are, as your Lordships are aware, taking place in Brussels. There is now a strong possibility that the draft proposals will be changed to

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meet the problem faced by owners of unregistered rights. Therefore, at this stage we cannot say that registration facilities for service marks must be provided before there is a Community system, because the final form of that Community system is still unclear.
At the next stage we should consider the likely effect of the Bill that is before your Lordships on the trade marks registry itself. It is not simply a question of taking on a few more staff—perhaps 50, or a few more, or a few less—to deal with the extra work. Since the time of the Mathys Report the input has gone up from 17,000 to over 21,000 applications each year. We believe that the addition of service marks would add up to another 5,000 applications each year. I am sure that your Lordships would agree that that would place a very severe burden on the registry at a most crucial time.
Sir Derek Rayner has already made a comprehensive study of the trade marks registry, and he has made a number of recommendations for improving the efficiency of the organisation as it at present exists. Once the changes are implemented, the registry should be in a position to reduce its already considerable backlog of unexamined applications and, above all, should be able to provide existing users with a better service. We are of the opinion that any interference with the reorganisation at this stage could bring about a severe deterioration in the service that is available and, above all, would increase the backlog of work to an intolerable level for all industries.
I am sure that the House will appreciate that even if the number of staff in the registry were increased from the current level of about 200 to around 250 to take on this added workload, the presence of such a high proportion of inexperienced staff would in itself seriously jeopardise the efforts that are now being made. We are very strongly of the opinion that to add to the burdens of the registry just now would not be prudent.
I should like to attempt to cover one or two of the points that have been raised in the very interesting debate that we have had on my noble friend's Bill. My noble friend was kind enough to give me a fairly detailed indication of what he proposed to say. I think he has a fairly clear idea of what I have in mind and of the Government's view. I hope to make absolutely clear the Government's view that we have sympathy with his Bill, and we shall certainly make clear all our views.
I am afraid that we do not agree necessarily with the noble Lord, Lord Mishcon, either on the cost to the trade marks registry, for the reasons which I explained, or, necessarily, on the European Communities aspect of this Bill. But that is I hope not purely a matter of professional opinion; it is the Government's considered opinion that these two arguments are not strong enough to warrant out right support of this Bill.
The noble Lord, Lord Lloyd of Kilgerran, raised (I think he called it) the Rysta case. I shall not follow him down that avenue. It is fascinating, but I would say to the noble Lord that we would not be able to comment on the appearance before various courts of trade mark
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agents or patent agents or barristers or any others who might feel that their professional qualifications enable them to appear with relevance before these courts.
We are grateful for the comments from my noble friend Lord Noel-Buxton and from my noble friend the Duke of Portland, but the noble Lord, Lord Davies of Leek, certainly allied himself, I believe, to my noble friend Lord Cawley. My noble friend mentioned one measure which (I think he said) was both "sooty" and "dusty", and my noble friend went on to point out that much of the language in this field was (I think I quote him correctly) crabbed and involved.
But, my goodness! in the commendably brief, relevant and amusing speech of the noble Lord, Lord Davies of Leek, he mentioned some question of molecular roulette in pharmaceuticals. The noble Lord, with his experience of that industry, could well be right. Indeed, he would agree that it goes a long way to showing that one should not gamble with the relevant trade marks or with other aspects of the pharmaceutical industry as far as trade marks and descriptions are concerned.
My noble friend Lord Cawley raised considerable correspondence and considerable comments on the passage of the famed Patents Bill through your Lordships' House. I hesitate to correct and jerk my noble friend's memory, but it was, as I recall and as I am sure noble Lords recall, just under six years ago, at the end of January 1977, when we set out on that lengthy Bill, to which there were over 600 amendments.
I would stress to my noble friend that, even if trade marks legislation or legislation of the type before us this afternoon is advanced by the Government when my noble friend is at the age that he suggested that he might be, knowing my noble friend's record and the record of service to your Lordships' House of noble Lords all round the House who are of considerably advanced years, we shall look forward to my noble friend's contribution in his 95th year. But I hope that we will have some trade marks legislation before then.
I hope I have covered most of the points that were raised in debate. In conclusion, I would say to my noble friend that we have every sympathy with his proposals to improve the protection available for service marks. We have not found a pressing need on the part of industry; we believe there is no pressing need from the Community; and we believe there is every need to take a balanced view of our trade mark law in the light of Community proposals already before us and, above all, to get the trade marks registry right before we embark on any new course.
Lord Davies of Leek: My Lords, does that nice little speech mean that this valuable document which the committee worked hard to produce under the chairmanship of Mr. Mathys in May 1974—and then, of course, we had some legislation later on—is kept in mind? Do they still keep the valuable work in mind, and do they ever look at the report in relation to the position that we are in today?
Lord Lyell: My Lords, I am sure that the department keep this report before them. As my noble friend pointed out, today's Bill, which has been

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proposed so ably by my noble friend, covers paragraph 70 of the Mathys report. The Mathys report is not gathering soot or dust in the department. It is in my office, and I know that it is in several other Ministers' offices as well.
Lord Mishcon: My Lords, before the noble Lord sits down, may I ask him whether he is aware that paragraph 70 talks about a passing off action being unsatisfactory as compared with a registered service trade mark? Is he further aware that, while he is deeply loved by this House, his speech on behalf of the Government in protection of industry was one of the weakest and most calamitous that I have ever heard?
Lord Lyell: My Lords, I am always very grateful for the kindness shown by your Lordships. I hope that I put the Government's case with my customary clarity. My forth right views may not be totally in accordance with the wishes of your Lordships' House; but, nevertheless, those are the views of the Government. The noble Lord points out that what appears in paragraph 70 of the Mathys report expresses an opinion. I hope I did not say that the Government agreed with that particular paragraph, but merely that my noble friend had selected that paragraph for his Bill. I am grateful to the noble Lord, Lord Mishcon, and reciprocate his comments that we all enjoy hearing his views and clarity on matters of the law. Of course, he is, after all, a professional lawyer; I am not.
2.58 p.m.
Lord Campbell of Alloway: My Lords, I shall be brief. First of all, I wish to thank all noble Lords who have spoken in this debate, not only for their very important contributions—which, for all we know, may shape a new course, as some noble Lords thought might happen—but for the toil spent in the preparation of those important contributions.
As Christmas is coming, I also wish to compliment my noble friend Lord Lyell on his style. I cannot compliment him on much else because, like the noble Lord, Lord Mishcon, I was unable to understand what he was saying. But he was put in to bat at the behest of his captain, the noble Lord, Lord Cockfield. I hope that your Lordships will agree that he defended his wicket as best he could, with flair and tenacity, as a loyal stonewaller.
There is a matter which I am told I have to mention for the record: that the amendment to be carried, which is formal in Committee, is adding paragraph 10 to the schedule. Section 68(1) is amended by inserting in the definition of "trade mark" the words: "or services" after the word "goods" in both places where that word occurs.
But, returning to the matter of substance in this debate, as the views of your Lordships have shown, the whims and fantasies of a department of state are ever subservient to national economic advantage. Those who understand the need for such advantage, as your Lordships on all sides of this House do, as industry does but as her Majesty's Government do not, make it plain that there is massive support for this Bill; and it is the duty of anyone, irrespective of political allegiance, to continue to stand their ground, as I have been encouraged to do in view of the support I have
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received from your Lordships and the support I have received from industry. Saying that, I will always be a loyal Tory, but this is really a bit much, as the case against the Bill (as advanced by the noble Lord, Lord Lyell) is plainly unintelligible.
As to the two points of unintelligibility, I would say to the noble Lord, Lord Mishcon—and I say this with no disrespect to him, as any practising lawyer would know—that this common law argument about passing off, put into the mouth of my noble friend Lord Lyell, is totally risible; and I will detain your Lordships on some future occasion by explaining why, if your Lordships accept that I could so explain. Furthermore, I do not agree with the noble Lord s suggestions as to delay; nor do I accept that the Government, as he says, will not stand idly by when he advances five separate unjustifiable reasons as to why they shall.
In fairness to my noble friend, who is not a lawyer and who has been led into dealing with these matters, I would say that if, when he opened his brief, one detected a musty whiff of departmental condescension, that is not to be laid at his door. The noble Lord is ever courteous, but condescension affords no substitute for reason, especially where the Bill has support from all sides of the House; where industrialists demand this protection; where there are no serious inroads on parliamentary time involved; where there are no undue demands on the time of parliamentary counsel envisaged and where there are no serious financial implications. Also, the question of staff has been dealt with, I hope, by various of your Lordships, and the implementing machinery presents no problems which may not with ease be surmounted. In submission, it would be right and proper to invite any Government to carry this Bill, subject to minor amendment in due course, with reasonable despatch. I therefore beg to move that this Bill be now read a second time.
On Question, Bill read a second time and committed to a Committee of the Whole House.

Nuclear Forces: Geneva Negotiations
3.5 p.m.
Lord Mayhew Lord Mayhew rose to ask Her Majesty's Government what progress has been made in the intermediate-range nuclear forces negotiations at Geneva; and whether they will make a statement.
The noble Lord said: My Lords, I wish to draw attention to the deplorably negative reaction of President Reagan and the Prime Minister to the offer on nuclear disarmament contained in Mr. Andropov's speech yesterday. Naturally, some clarification is needed of the Soviet offer. In particular, what is supposed to happen to the SS20s which would not be deployed in Europe under the offer? Would they be scrapped or would they be redeployed outside Europe? But much has now become clear. First, the Russians are prepared to make significant reductions in their missiles to avoid the deployment of cruise missiles and Pershings. This is encouraging and should have been welcomed. It already vindicates the multilateral approach to disarmament. If Europe's unilateralists had had their way, and if the British, the Germans, the

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Italians and the French had taken the same unhelpful attitude on cruise missiles as the Belgians and the Dutch, this Soviet offer would never have been made. Indeed, the Soviet Union would never, I imagine, have agreed to come to the negotiating table.
The second important feature is that the offer places no restriction on the deployment of American missile submarines in European waters. The Americans already have a powerful fleet under NATO command in European waters, much of it in Holy Loch. It is argued that these submarines are strategic, not intermediate range, but the SS20s have a longer range than the American Poseidon missiles. If the SS20s are intermediate range weapons, so are the Poseidons. Therefore, it is untrue to say that the Soviet offer would leave the Russians with intermediate range missiles in Europe, but not the Americans. Of course, the President and the Prime Minister can argue that submarines are less accurate and have a longer reaction time than land-based missiles. But it is not clear why, in the European context, this makes them ineffective as a deterrent.
Indeed, the whole argument about nuclear balance sometimes becomes quite unrealistic. The President and the Prime Minister seem obsessed with the idea that nuclear missiles must be precisely balanced, one for one and type for type. Why do they take this line? Most of the rest of the world accepts the plain truth that, after a certain level of nuclear capability has been reached on both sides, questions of balance become virtually meaningless, and an agreement to reduce overkill can profit both sides immensely, even if more overkill is abandoned on one side than on the other.
I am sure there will be general agreement that, if the Russians and the Americans could reach agreement in this field—an agreement acceptable to both of them—it would be enormously valuable. It would freeze at lower levels, by mutual consent, the number of nuclear warheads deployed in Europe. It would strengthen confidence in multilateral disarmament and greatly improve the prospects for the START talks. It could be a turning point in East-West relations. And perhaps not the least advantage would be that it would restore the unity and sense of common purpose of the alliance, which is very much lacking at the present time. It would also help to end the bitter internal divisions on defence policy which have occurred in all the member states of the NATO alliance. Yet President Reagan has dismissed the Soviet offer with contempt and other Western leaders have tamely followed suit. Yesterday the United States again stated officially that only the complete elimination of the SS20s would justify forgoing the deployment of cruise missiles and Pershings. This means that after more than a year of negotiation the United States' position has not moved one inch.
The question must be asked: Do the American President and the British Prime Minister seriously want an agreement? It is not a question one would have needed to ask if at the White House there had still been President Truman or President Eisenhower, or President Kennedy, or if Atlee, Eden or Macmillan had still been at No 10. It is a great misfortune that at this critical time the occupants of the White House
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and 10 Downing Street should be two people so strongly drawn by temperament and ideology towards conflict rather than conciliation—people, moreover, who take a dangerously simplistic view of the intentions of their adversaries. To those who have observed their past performance, it is no surprise that they should have dismissed the Soviet offer out of hand, stuck to their original demand and given not the slightest sign that they were ever contemplating any counter proposals.
With anyone else one might presume that this was adopting a tough negotiating position. If so, nobody with any experience of negotiating with the Russians—I myself have had some experience—could possibly object to that. But with President Reagan and the Prime Minister this is not a reasonable assumption. It took much time and much persuasion before President Reagan agreed even to negotiate in this field, and it took more time and more persuasion before he agreed to the zero option. Since then the United States has been negotiating in a remarkably leisurely fashion. There have been long recesses, taken on American initiative, without Soviet support. When I was in Washington earlier this year I asked at the highest level the reason for these recesses and I was told it was because the American team quickly became jaded in these negotiations. This is not a satisfactory reply. I now understand—the Minister can correct me if I am wrong—that when the talks were not in recess the average time that the two principals met together was not more than two hours a week. There is no evidence, either, that the British Prime Minister has seriously pressed President Reagan at any stage to take these negotiations more seriously.
When we recall and analyse the statements and actions of the President and the Prime Minister in matters of defence and disarmament over a long period, the truth is inescapable. Neither of them is seriously hoping or working for a compromise at Geneva. Let us suppose, as seems possible, that the talks fail because the Americans rather than the Russians prove too inflexible. What is the British Government's policy then going to be? I say that in this event there must be no question of the deployment of cruise missiles in Britain. If the British Government attempted to deploy these missiles after the Americans had caused the Geneva talks to fail, they would find Greenham Common ringed not by tens of thousands of unilateralists but by hundreds of thousands of multilaterlists. That would be the effect if this should happen.
What should be the Government's reponse? I submit that first the United States Government and the British Government should welcome Mr. Andropov's offer. His concessions may be limited but, after all, President Reagan, after a year of negotiations, has made no concessions—so really, the West is not in a position to complain. Next, clarification of the Soviet offer must be asked for on a number of points. Then President Reagan, supported and urged on by a British Government, should make constructive and sensible counter proposals to the Soviet offer. The Government's dismissal of the offer is unbelievable folly. If the Government do not change course and do not exert the utmost pressure on the United States to reach an agreement, they will be arousing the

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opposition not of a minority of unilateralists but of millions of people who are committed multilateralists and supporters of the NATO alliance.
3.15 p.m.
Lord Thomas of Swynnerton: My Lords, I must apologise to the House and to the noble Lord, Lord Mayhew, for my inadvertent absence at the beginning of this debate. I insufficiently informed myself as to the time when this debate was likely to start. This is certainly a timely debate and we must be grateful to the noble Lords, Lord Mayhew, and, at an earlier stage, Lord Kennet, for introducing it at this time. I am bound to say that, had I been asked to suggest what would be the most interesting and important matter to discuss this Christmas, it would have been the extraordinary suggestion that a major power was involved in the attempted murder of the Pope. This would have seemed to me to be a more striking subject for us to debate today.
Nevertheless, there is no doubt that this is an important subject. As I said a moment ago, the debate is well timed in view of the proposals made by Mr. Andropov in Moscow and reported in today's press. I must say that the speech made by Mr. Andropov, as it was reported in the Financial Times, began in what I consider to be a very unpromising manner. To say that the war preparations of the United States and NATO have grown to "a record scale" comes rather strangely from one who has been part of a Government which has built up its armed forces in exactly that way over a large number of years. This is particularly so in respect of nuclear weapons but it is true of conventional weapons as well; we have all read of the growth in the strength and menace of the Soviet Navy over the past 20 years. Perhaps, though, this is just a question of a preamble and the proposals involved in Mr. Andropov's speech are more important and more serious.
The question we have first to ask is, was this speech intended only as propaganda? It certainly had in it some element of propaganda; I believe we all accept that, and that the noble Lord, Lord Mayhew, would not disagree. These proposals were launched in a speech and not at the conference; in a speech just after the conference had adjourned for a month. Had it been a proposal intended principally for practical discussion, surely it would have been launched at the conference itself. It is also comprehensible that a dictatorship with no public opinion to worry about very much would be likely to try to influence public opinion in countries where its supposed opponents are for or against a particular line of policy.
We know from other sources, statements and actions that the Soviet Government are particularly interested in trying to divide the United States and Europe, and in trying to prevent deployment of the Pershing missile in West Germany and, to a lesser extent, the establishment of cruise missiles in other countries, including our own. There is no doubt whatever that the speech of Mr. Andropov in the form in which it was presented to us today in the press, certainly suggested that those aims were fulfilled. There may have been other aims but certainly those aims of trying to disturb public opinion over the establishment of Pershing and cruise missiles, and
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trying to divide the United States from Europe, were perfectly served by that speech. That is a preliminary point.
As to the viability or validity of the proposals themselves I think that the noble Lord, Lord Mayhew, would agree that the nuts and bolts of any realistic disarmament programme proposal must depend on the supervision and control powers included in it. Any realistic person who has negotiated with the Russians, as the noble Lord told us he had, could hardly fail to notice that in this proposal put forward by Mr. Andropov yesterday there was not a single reference to how this was to be effectively controlled; we cannot help noticing that. This is a particularly serious omission when we recall that a mobile missile like the SS20 is particularly difficult to control. Even in the age of aerial surveillance that is true. The whole proposal, therefore, seems to me to be a much less attractive one than that put forward a little over a year ago by President Reagan for the so-called zero option, which would have been easier to control, since there would have been no intermediate range missiles allowed at all. It is perfectly obvious, therefore, that it was much simpler to see whether such a proposal was carried out or not.
The second point I thought should be raised was what would happen to these Soviet SS20s if they were going to be withdrawn from Europe. Would they be destroyed? Again, there is no reference to this specifically in the speech made by Mr. Andropov-yesterday. They were going to be withdrawn from Europe. What does "Europe" mean in these terms? We all know what we think of as Europe in terms of the European Community, but it is perfectly plain that it does not mean that. It means Eastern Europe, but are we to suppose that the SS20s will be withdrawn from Western Russia, from European Russia? Again this proposal is quite silent on that point.
I must say that, if these SS20s are to be withdrawn East of the Urals and left intact, that is not a satisfactory proposal, because, in the first instance, they could probably reach—as far as I understand the range of the SS20—almost all of Western Europe except for a thin sliver of Portugal. Secondly, they could in a time of crisis be brought back by lorry into the Western part of the Soviet Union, or even into Eastern Europe, in a matter of hours. That seems to me a very important criticism of this proposal. Once again the President's zero option proposal seems a much more attractive one.
I also think we should consider what would happen if these missiles were actually destroyed, and in some way, too—another very important point—the SS20s which we would assume would be allowed under the proposal to continue to be in Asia were to be neutered, so that we should simply be facing the same amount of nuclear power as we, the British and the French, have in other forms of missile or other forms of nuclear capacity. Surely we would simply be back, if that were to happen, in the state of affairs we were in in 1977, when Chancellor Schmidt first drew our attention publicly, at a lecture at the International Institute of Strategic Studies, to the very serious imbalance so far as intermediate range nuclear weapons were concerned. They were for a short time known by a different title, but, perhaps thanks to the noble Lord,

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Lord Kennet, they changed from that name to their present more satisfactory title of intermediate range nuclear weapons.
Surely we should simply be back in that position, which was recognised by all the Governments at that time, after some persuasion by Chancellor Schmidt, to be a very bad position. After some difficulty, he persuaded President Carter to take that view, he persuaded Mr. Callaghan to take that view and he persuaded President Giscard d'Estaing to take that view. After a great deal of difficulty and persuasion, President Carter agreed that the Pershings and the cruises were to be deployed in order to meet that anxiety which had been well expressed by Chancellor Schmidt. If, in fact, all these proposals do is take us back to a position which Chancellor Schmidt thought was very dangerous, what is the point? Surely once again the zero option proposal is a good deal more attractive.
Let us not forget, too—I do not believe that Mr. Andropov will have forgotten it—that until now we have never thought of the French and the British nuclear weapons as exactly intermediate range missiles. We thought of them as strategic missiles. It may be that they cannot get very far compared with the ICBMs possessed by the two super powers but, nevertheless, we have thought of them as strategic weapons. Furthermore, we all know very well that the French nuclear force is not fully integrated into NATO. For all these reasons, therefore, the American proposals are much more satisfactory. I cannot help reaching that conclusion.
Your Lordships may be thinking that it will be desirable to take into account the other nuclear forces which, of course, should be considered in relation to the proposals. I believe that to be very desirable, because, even were this proposal to be introduced and these cuts made, we should still find ourselves in Western Europe facing an immense number of Soviet weapon systems, many of them with nuclear capacities—in particular, the Backfire bomber to which attention was paid, rightly, in the period 1977–79 to which I am referring.
Your Lordships may be thinking that perhaps I should have dealt in these comments on Mr. Andropov's speech with the other proposals he made in relation to cuts in levels of intercontinental ballistic missiles. I think that it is reasonable to do so, even though that is not the subject of this debate. However, once again it seems to me that President Reagan's proposal for what is, in effect, a 50 per cent. cut in the efficacy of the strategic reach of the Western Alliance is a great deal more attractive than the proposal of a one quarter cut made by Mr. Andropov.
Your Lordships will no doubt be asking, "What of the MX?" I believe that we should remember that the United States has not introduced any new intercontinental ballistic missiles since 1969. Mr. Andropov said in his speech, as I read it, that the American proposal was suggesting that there was some kind of lag in consequence of that failure to introduce a new missile since 1969 and to speak of that as a lag was some kind of deliberate untruth. Those were the words as reported in the Financial Times. I can only
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suppose that that must have been an error of translation because it is obviously the case that the old American ICBMs of 1969—the Minuteman missiles—seem at the present time to be unlikely in the first instance to be able to destroy the newly hardened silos containing the Soviet missiles. Secondly, they would be unlikely effectively to survive a first strike if such a thing were to occur.
Indeed, a combination of the zero option as far as INF is concerned and the President's proposals on the ICBMs seems to be much more reasonable than what was put forward by Mr, Andropov in his speech yesterday.
I confess to a certain sense of surprise that the American proposals are not more widely applauded and better received. I have always thought it odd that the United States, which brought public relations to a fine art in Madison Avenue, has not been able to put over its international proposals for disarmament more effectively to a wider public than is the case.
I confess that in the end I would freely admit to being sceptical about the efficacy of these disarmament negotiations. I admit that. I do not think that is being unduly cynical or pessimistic. I find it difficult to believe that a state whose ideology still impels it towards expansion, particularly military expansion, and a state whose heavy armament programme is concerned as a matter of course with bullying both its own citizens and its neighbours into subservience, is likely to be able to accept a far-reaching disarmament programme, I may be wrong and I shall be delighted if that turns out not to be the case.
The Soviet Union has, on occasion, accepted one or two modest proposals for disarmament such as SALT l or the partial test ban, when it was plainly in its short-term interest to accept such proposals. Some reduction in Soviet arms spending may well be something that any Soviet Government may wish to see at some time in the future. I am sure that the main aim of the proposal put forward yesterday so effectively and so timely (if I may put it like that) by Mr. Andropov was to try to prevent the establishment of the Pershings and the cruise missiles.
I feel that the best advice we may receive this Christmas on this type of subject can be seen in the most recent issue of the New Statesman, in which there is a very important letter from a Czech citizen, Mr. Racik, who writes:
"I would see the task of a non-naive peace movement as that of supporting military force as an instrument of democracy confronting totalitarianism and of restraining that instrument's propensities to subvert the democratic system".
3.32 p.m.
Lord Jenkins of Putney: My Lords, the noble Lord, Lord Thomas of Swynnerton, has told us that he thinks that President Reagan's zero option proposal is reasonable and acceptable; and, of course, so it is from the purely Western point of view which he adopted. But if one wishes to reach an agreement on any subject and on any kind of debate, one has to try and see the proposal as it appears from the point of view of the other side, and not only from the point of view of those who may be regarded as belonging to the West.

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In seeing the matter from the point of view of the Soviet Union—with whom, after all, we are supposed to be seeking an agreement, so it is incumbent on us to try and see it from their point of view—they start from the position that at one time they had no nuclear weapons; that the only nuclear weapon which existed for many years was owned by the West; and that we, the West (and I am regarding the West as a whole for the moment) are the only group of nations which has actually dropped a nuclear weapon in war and have in fact killed people by nuclear weapons.
Therefore, the Soviet Union see themselves in this matter as being initially at a disadvantage; as existing for years in the position of being helpless against a nuclear weapon; as having very strong conventional forces but, in nuclear terms, as being the country which all the time has had to try and catch up. That is precisely what they have been doing. If we look at the record of the development of nuclear weapons over the years, we find that all the initiatives have been taken by the West; all new developments have been made by the West, and on each occasion the Soviet Union has been catching up.
Now, in one single respect, the Soviet Union has gone ahead, and that is in land-based, medium-range missiles in Europe. It is as regards that matter that the United States says, "We are certainly ahead in intercontinental missiles; we are certainly enormously ahead in submarine-launched missiles; we are also probably ahead in battlefield missiles; and on this one point, as far as land-based intermediate range missiles are concerned, we must be ahead there, too". This is the reality of the situation as it is seen from the Soviet Union. It is not only the reality of the situation as it is seen from the Soviet Union; it is the reality of the situation as it is seen by every international organisation, whether it be the Stockholm body SIPRI or the ISSS.
All the international organisations agree that this is the reality. It is not the case, as the Americans are fond of suggesting, that they are behind and are catching up. The reverse is true. It is on this single point of the land-based missile that the Soviet Union has caught up. This has caused the great American sensitivity. To try to deal with this along comes President Reagan with his zero option, which the noble Lord, Lord Thomas, finds so attractive.
In the circumstances which I have described, can noble Lords really be surprised that the Soviet Union do not find this particularly attractive? From their point of view it is not. This is why, when Mr. Andropov comes along with his proposal, I think it is unreasonable to dismiss it out of hand. I think that it would be equally unreasonable to dismiss President Reagan's zero option out of hand. What ought to happen is that both proposals ought to be put on the table and serious discussions ought to take place.
I am inclined to share the view put forward by the noble Lord, Lord Mayhew, who I think has done us a service in raising this matter, that the multilateral discussions which have been taking place for so long have hardly been serious discussions. While they have been taking place throughout the years, the weapons themselves have accumulated. There was an American preponderance, on the whole, about 10
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years ago, at the range of a capacity in both sides to kill everybody else on the other side about twice over. What has happened now is that, with the increase in the totality of nuclear weapons to something of the order of 50,000 or 60,000 spread over the world, each side can kill the other side about 10 times over.
It is in this situation that the apprehensions which have been so clearly put forward by the noble Lord, Lord Mayhew, should be taken seriously. It is because the multilateral discussions which have taken place over these years have achieved nothing that the nuclear weapons all over the world are increasing and that the tensions are increasing. Every international organisation which examines the matter does not say, as the Government sometimes say, "Everything is quiet; everything is peaceful; do not worry; the nuclear weapons have kept the peace". The international organisations say that nuclear weapons are building up, that one of these days they will explode, and that that day will not be too long coming.
I believe that this is why the sensible unilateralists and genuine multilateralists are beginning to come together. The extremists on either side—and I refer to the non-genuine multilaterists, if such people exist, and I would possibly also refer to the excessive unilateralists, if such people exist—take the view, which is often ascribed to them, that unilateral disarmament means total unilateral disarmament by the West. It really has never meant any such thing, and it is now beginning to be appreciated that what those of us who are calling for unilateral action mean is that this country should make the sort of gesture which we are uniquely placed to make in order to try to break down the impasse and create the multilateral discussions which we know can be the only way to peace.
I think we all accept that, ultimately, multilateral discussions and bilateral discussions between the United States and the Soviet Union are the only way in which peace can be achieved. Therefore, the noble Lord, Lord Mayhew, is right to raise this matter. The truth of the matter is that, in the eyes of some noble Lords, the Soviet Union can do no right. This was quite clearly illustrated just now when the noble Lord, Lord Thomas, said: "This cannot be a serious proposal of Mr. Andropov because, if it was, they would have put it forward in the Geneva discussions instead of doing it publicly". Only a couple of hours before the noble Lord, Lord Belstead, said that this cannot be a serious proposal because, in fact, they put it forward privately in the Geneva discussions.
So whatever they do—whether they put it forward privately or publicly—one way or the other, it gets dismissed. It gets dismissed in Geneva by ignoring it and it gets dismissed publicly for a reason that I leave your Lordships to guess. It is beginning to seem to some of us that the West is not interested in having real discussions about getting these armaments down. It is in this circumstance that people in this country and in the United States, too, are becoming increasingly alarmed about the failure of their own Governments to take the situation seriously.
It is incumbent upon all of us to ask the Government not to treat the matter, as they appear to have been doing until now, as something which can go on and on, without ever reaching a conclusion, because

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the conclusion which some of us believe will be reached unless the breakthrough is made is the conclusion which the world is beginning to fear is inevitable, and that is a nuclear holocaust. It is that conclusion which we believe the Government have a paramount duty to seek to avoid, and it is that which we hope to hear from the noble Lord, Lord Belstead, when he replies to this debate.

The Fisheries Council: 21st December Meeting
3.41 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, it might be for the convenience of your Lordships if I were to repeat a Statement which is being made in another place by my right honourable friend the Minister of Agriculture. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on the meeting of the Council of Fisheries Ministers which met yesterday in Brussels. I represented the United Kingdom, together with my right honourable friends the Secretary of State for Scotland and the Minister of State.
"The nine member states were agreed on a package of measures for a revised Common Fisheries Policy. No changes to this package were proposed or discussed.
"The Commission had clarified to Denmark some of the administrative measures involved in the package and had also arranged for a possible allocation of mackerel in the North Sea which would become available from Norway and the Faroes.
"The Danish Government decided to refer this package to the relevant committee of their Parliament with the Government's strong recommendation for acceptance.
"To the bitter disappointment of the entire Community the minority Danish Government was at yesterday's meeting unable to gain the agreement of that committee. The Danish Government have undertaken to continue to seek to persuade the committee to accept the agreement and the Council has affirmed that it remains open to Denmark to signify before 30th December that the package is acceptable.
"The Council then proceeded to consider what national measures would be needed in the event of the Danish Government failing to accept the agreement before the 30th December. The Commission made a declaration as to the manner in which they would authorise national measures, following notification by member states, in order to protect stocks in accordance with provisions based upon the latest formal Commission proposals.
"The Commission made an unequivocal statement as to the right and obligation of all member states, in the unique circumstances of fisheries, to protect this vital resource, and the Commissioner stated that this would apply to all of the proposals on conservation, access and quotas.
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"Honourable members may have heard the President of the Commission, Mr. Thorn, confirm this morning that these measures would be effective and legal.
"As far as the United Kingdom is concerned, I signed this morning orders which will make these proposals part of our national law, and I have notified the Commission. They will be laid before the House so that they will come into effect if necessary on 1st January.
"Agreement was reached on an interim package of structural measures which I know will be welcomed by our industry.
"I can only express the hope that Denmark will approve this agreement before the end of the year and will take note of the warning given to them by their Prime Minister that their failure to agree will leave the Danish fishing industry in a worse and not better position."
My Lords, that concludes the Statement.
Lord John-Mackie: My Lords, we are obliged to the noble Earl for repeating that Statement, a very disappointing one creating an unfortunate situation. It appears that it is more a Danish problem than anything else, although of course it affects all the other members of the EEC. It is certainly unsettling the fishing industry, particularly in Scotland. While I am not too conversant with the situation there, I understand that the Federation is having great difficulty with its members and that some of them are not very happy and are thinking of resigning, if they have not already done so. It is therefore a situation which is upsetting the fishing industry very much indeed.
May I ask the Minister to say what steps the Government are likely to take—I hope he will find it possible to answer this—to stop the Danes? Whatever else we do, I hope the Government will try to avoid any action that might lead to violence: we do not want a repeat of what happened with Iceland a few years, ago. No doubt the orders, which I gather the Minister signed today, indicate more what might be done. I feel it is very important not to close the door. Although the Statement suggests that what the other members will do now is to wait until 30th December, I wonder whether there is any indication that there might be a further meeting—I appreciate that, with Christmas and the New Year, it is not easy to arrange meetings—should the Danes wish to have such a meeting?
It is interesting to note that in the second paragraph of the Statement it is said:
"No changes to this package were proposed or discussed".
And the following paragraph says:
"…also arranged for a possible allocation of mackerel in the North Sea which would become available from Norway and the Faroes".
That seems to be a change, and perhaps the Minister would explain that. Could he also provide some information about what is meant by,
"an interim package of structural measures"?
Whenever I hear the word "structural" I feel it means a reduction in the size of the industry. That applies to most industries the moment the word "structural" is

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used. Perhaps the noble Earl will answer those questions. As I say, we are all very disappointed over what has happened. I like the Danes, I have been to Denmark several times and I used to have a Danish farm manager. I should hate to think that we would ever get to the stage of almost open warfare with them.
Lord Mackie of Benshie: I normally agree entirely with my noble kinsman, my Lords, but on this occasion I must disagree; I think we should stand absolutely firm on the measures proposed and agreed by the other nine nations. I must remind the House that the Danes, by their industrial and fishing policy, are responsible for more of the depletions of stocks in the North Sea than any other single nation. Furthermore, the Shetland fishermen are very restive about the Shetland box and the concessions that have already been made there, and in my view all the concessions that should have been made have been made. It is up to the Danish Government to be sensible and for their committees to follow the advice of their Government, and I hope and trust that our Government will stand totally firm on the very large concessions that have already been made, which affect very largely the livelihood, in particular, of the Shetland fishermen. I agree with my noble kinsman in asking for clarification of the third paragraph of the Statement. May we be given more details of any possible allocations? And as for the paragraph which refers to,
"an interim package of structural measures",
may we be told a little more of what the structural measures are?
Earl Ferrers: My Lords, I am grateful to the two noble Lords for the modest welcome they gave to the Statement. I thought the noble Lord, Lord Mackie of Benshie, was somewhat unfair to his noble kinsman when he said he disagreed with him. I did not know that the noble Lord, Lord John-Mackie, had said there should be any alteration; I thought he was merely asking questions. But, then, Cain did kill Abel and I am not quite certain whether that was happening on this occasion.
However, I agree with the noble Lord, Lord John-Mackie, that in some ways this is a disappointing Statement, because we had all hoped that there would be an agreement. It is one of the curious quirks of democracy, and indeed one of the quirks of the European Community, that in this particular case the parties of a member state which are not in government are in fact in a position to frustrate an agreement to which the Governments of all the member states wish to accede. This is the Danish problem which they have to get over. It was the Danish fisheries minister, and indeed the Danish Prime Minister, who tried to persuade the respective parliamentary committee of the Danish Parliament to accede to the proposal, and it was that parliamentary committee that refused to do so. As the Statement explained, the option has been left open for them to agree up to the 30th December. I agree with the noble Lord, Lord John-Mackie, that the uncertainty is undoubtedly upsetting, and we should wish to see that uncertainty halted as soon as possible.
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The noble Lord asked what was going to happen, and he hoped that there would not be violence. I entirely agree with him in hoping that there will not be violence, and I do not believe that there will be, or that there need be. But I would remind the noble Lord that if in fact national measures come into effect as from 1st January, and if fishing vessels of other countries that are not so entitled, as would then be the case, fish in our national waters, they will be liable to be approached, to be fined £50,000, and to have their gear confiscated.
The noble Lord, quite reasonably, said—and on this his noble kinsman agreed with him, which was encouraging—that he would like to know why in the second paragraph of the Statement it was stated that,
"No changes to this package were proposed or discussed"
while the third paragraph added that:
"The Commission had clarified…some of the administrative measures …and had…arranged for a possible allocation of mackerel…"
I think that that needs explaining. The position is that the package, which the member states were invited to agree, was drawn up on 26th October. That package has not been altered, but there are other arrangements, such as apply in Norway and the Faroes, which are outside the package, are renegotiated every year, can be altered, and on this occasion have been altered.
Both noble Lords also asked what were the "structural measures". The "structural measures" refer to a limited amount of money which the European Commission can give following individual applications from member states. Individual fishing owners, or fleet owners, can apply to the European Commission for help and an advance, and that is outside any grant aid that might be applicable to any member state. It is that to which the "structural measures" refer. Apart from that, I would join both noble Lords in hoping that the situation will shortly be resolved.
Lord Kennet: My Lords, I wish to ask only two questions. Can the Deputy Leader of the House tell us anything about the meaning of the phrase "laid before the House" in the Statement? The Statement said that the national measures,
"will be laid before the House"—
the House of Commons, of course—
"so that they will come into effect if necessary on 1st January".
Must we assume that they will not in effect be laid before this House, since we rise in an hour or two from now, but that the House of Commons will tomorrow have an opportunity to object, if it wishes? What is the parliamentary situation about those national measures? I am taking it for granted that our national measures correspond precisely to what we would have done had the Community regime been able to come into effect. I think that the noble Earl has already said that.
I come to my final question. Is the Deputy Leader of the House in a position to tell us whether the Danish fishing fleets are likely to do what their Government tell them, or what their Opposition tell them?
Earl Ferrers: My Lords, the position with regard to the orders being laid before the House is that in fact

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they will be laid before both Houses of Parliament. They can be laid during the Recess. They will be subject to negative resolution procedure, which means that they can be prayed against within, I think, 40 days. But they will become operative as from 1st January.
With regard to the types of national measures, they will be as near as possible the same as they would had there been a Community régime. For obvious reasons, which I think we need not go into now, because there is not a Community regime there may be individual circumstances which may make it impossible for them to be absolutely identical. With regard to the noble Lord's invitation for me to speculate on what the Danish fishermen may do, whether they will follow the advice of their Government or their Opposition, all I would say to the noble Lord is that fishermen of all nationalities are a fairly individual species of people and I would not like to speculate any more than would the noble Lord on what they would do. What I can do is to tell him that if they did that which they should not do, they will meet with a certain response.
Lord Boothby: While thanking the noble Earl for his reply, may I ask him to bear in mind that British sea power was built up on our fishing industry in the reign of Henry VIII and has been sustained by it ever since. As one who has fought for the fishing industry in both Houses of Parliament for over half a century, may I also thank Her Majesty's Government and, particularly, the Secretaries of State for Agriculture, Fisheries and Food, and for Scotland, for the courage, patience, coolness and skill with which they have conducted these arduous, lengthy and difficult negotiations. It is not our fault that they have broken down.
Finally, may I ask the noble Earl one question. Will he give us an unequivocal assurance that no foreign fishing vessel will be allowed to fish in British waters without the permission of Her Majesty's Government until we reach an agreed settlement; that we have the necessary forces in the air and at sea to ensure that this is so; and that, if necessary, we will not hesitate to use them?
Having said that, of course, we must all join in the fervent hope expressed from both sides that we can still reach agreement with these recalcitrant Danes—of whom I am one, because I am myself of Danish origin—and that they may still come to their senses and agree to these terms before Christmas.
Earl Ferrers: My Lords, I am greatly appreciative of what the noble Lord, Lord Boothby, has said. As he mentioned, he has been involved with the fishing industry for a great many years. I myself have had the privilege of hearing him campaign in Parliament on behalf of the fishing industry. To hear him say that this was a successful agreement and to commend my right honourable friend for (I think his words were) the courage, patience, coolness and skill of his negotiation are praises which I greatly appreciate, and I will see that they are passed on to my right honourable friend. I would only add, in parentheses, that none of them applies to me, because I have not been personally involved in the negotiations.
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The noble Lord said he hoped that no foreign vessel would be seen to fish in British waters. I can tell him that if, in fact, the common fisheries policy as we would hope to see it does not come into operation by January 1st, then there will be national measures. Under those national measures the Danish fishermen may not fish within 12 miles of British shores, and, if they do so, we will see that those waters are appropriately protected.
When the noble Lord referred to the recalcitrant Danes, that is an observation upon which I would not wish to comment other than to say that I think they have their own particular problems. The fisheries minister did say that if this proposition were placed in Parliament over the heads of the Parliamentary Committee, they might well find that their Government might fall; and he said that this is not an issue upon which they are prepared to fall. It is the exercise of democracy in one particular member state which has its unfortunate repercussions in others. That is not a unique phenomenon. It is one which, as members of the Community, we all have to try corporately to overcome.

Anderson Strathclyde and Charter Consolidated: Proposed Merger
4 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, with your permission, I should like to repeat a Statement that is being made by my honourable friend the Minister for Trade in another place. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on the Monopolies and Mergers Commission report on the proposed merger between Anderson Strathclyde and Charter Consolidated and my decision not to prevent Charter Consolidated from renewing their bid for Anderson Strathclyde, if they decide to do so.
"The MMC submitted their report on 1st December. Since my right honourable and noble friend the Secretary of State for Trade had a shareholding interest in one of the parties to this merger, he considered that he ought not to take the decision on this report.
"The MMC report was a divided one. The commission concluded by a majority of 4:2 against the proposed merger. They recommended that it should not be allowed. Where the commission find against a merger. Parliament has left it a matter of discretion whether a report against a merger should be followed, or whether the merger should be allowed.
"I have considered carefully both the majority report and the dissenting report of the minority. The dissenting report was no ordinary note of disagreement. On the contrary it voiced the opinions of the chairman of the commission, and one other member, and represented a root and branch disagreement with the conclusions of the majority.

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"In considering the majority and minority views, I have also taken account, as I am obliged to do under the Fair Trading Act, of the views of the Director-General of Fair Trading. He recommended strongly against preventing the merger. It is common ground that this merger would not lead to any restriction of competition. The sole question therefore was whether the merger would have harmed other aspects of the public interest. While sensitive to arguments based on possible industrial implications in Scotland, I found that the argument that the merger would harm the public interest was too speculative. I therefore decided that it would not be right in all the circumstances of this case to stop the merger. But in leaving Charter free to renew their bid I sought an assurance from them that Anderson Strathclyde would remain a Scottish company with its registered office in Scotland. This assurance has been given me by the company."
My Lords, that is the Statement.
Lord Underhill: My Lords, the House will be grateful to the noble Lord, Lord Trefgarne, for repeating the Statement. Although it is a short Statement, it involves very serious consequences. I want to deal with the Statement primarily from the point of view of what the Opposition regard as unfortunate policy and economic judgment. I appreciate that because of his personal financial involvement with Charter Consolidated, the Secretary of State—who I am delighted to see is in his seat—passed consideration of the commission's report to the Minister for Trade.
I should like to ask whether the Secretary of State has power to divest himself of the responsibilities given to him under the Fair Trading Act 1973. Moreover, is it desirable that a Secretary of State should divest himself of those responsibilities? Can the Minister reply to a question put to the Prime Minister in the other place yesterday, which was not answered: Is there any precedent for such action by a Secretary of State? Is it not also correct that this is the first time that a Minister has rejected recommendations of the commission concerning a proposed merger?
Is not the decision to reject the recommendation a very serious one, and are not the views of the commission expressed very strongly in paragraph 9.20 of the report, which says:
"We conclude that the proposed merger may be expected to have an adverse effect upon the management effectiveness and labour relations of Anderson Strathclyde and that this would tend to diminish effective competition in the supply of goods, would be contrary to the interests of purchasers of goods in the United Kingdom and would not promote competitive activity by Anderson Strathclyde in markets outside the United Kingdom. We also conclude that both because it would affect employment within Anderson Strathclyde and because it would detract from the dynamism of business in the region, it may be expected to have an adverse effect upon employment in a relatively depressed part of the United Kingdom. These effects may be expected to operate against the public interest unless offset by some advantages."?
My Lords, is it proper to disregard the views of three influential Scottish economic planning bodies?—namely, the Scottish Council (Development and Industry), the Scottish Development Agency and the Scottish Economic Planning Department, all of whom gave evidence in opposition to the proposed takeover. Also, does not the report emphasise that most of the witnesses who sent written views were similarly
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opposed to the proposal? Although emphasis is given in the Statement to the views of the chairman of the commission and to the consultative views of the Director-General of Fair Trading, is that justification for putting on one side the views of the majority, the four members, who had heard all the evidence on this matter?
I have said that I wish to concentrate on the political and economic consequences of this matter, but there are one or two questions I must ask in addition. First, is it justifiable that a Minister should not divest himself of shareholdings during a period of office? I ask this from the standpoint of public confidence. When the proposal was first referred to the commission, would it not have been advisable at that stage for a statement of the Minister's financial holdings to have been made public? Is it not regrettable that this matter was only brought to the attention of the general public arising from a point of order raised at Question Time yesterday in the other place?
Also, is it not correct that the evidence shows that in every way Anderson Strathclyde is an excellent company with good labour relations and is thoroughly opposed to the proposed takeover? Does it not now mean that if the takeover proceeds, a conglomerate with very large South African interests will take over this effective concern? Finally, will steps now be taken to halt any move towards a takeover bid until Parliament has had the fullest opportunity to discuss both the report and the rejection by the Minister of Trade?
Lord Tordoff: My Lords, this Statement, for which we are grateful, clearly comes in two parts and perhaps I may deal first with the part relating to the Secretary of State. It is, of course, very easy in another place to make a lot of political capital out of this situation. I hope that noble Lords in this House will not go down that track. The suggestion that, for a modest shareholding, the whole of the Government's judgment is to be corrupted seems to me to be nonsense; and I am very glad that the Secretary of State is in his place to hear the views from at least these Benches.
On the question of overturning a finding of the Monopolies and Mergers Commission, I think that your Lordships would expect a certain rising of hackles on these Benches. I believe we have a powerful record of wishing to see monopolies on all sides brought to heel. Therefore one's instinct is to say that the Government have done something dastardly and really should not have overturned this finding. But I think that, when we look at this in greater detail, it is not so simple as that.
It seems to me that the Statement does touch on the important parts of this problem. The sentence which deals with the restriction of competition, which, after all, is the important matter when it comes to a question of monopoly, seems to me to answer a very large part of the questions that might be asked. The final sentences, which deal with the situation in Scotland, also answer pretty fully some of the questions that might well have been asked by my noble friends who look after Scottish matters. Provided that the interests of Scottish industry are being looked after properly—this is a serious judgment which the Government must come to in this matter, and they will be judged in retrospect, as to whether they have

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come to a proper conclusion—I think, on the whole, although one's instinct is to attack the Government, it may well be that, bearing in mind the integrity of the chairman of the commission, who is an independent-minded man if ever there was one, the Government have come to the right conclusion on this occasion, and from these Benches we would not wish to push the matter any further.
4.10 p.m.
Lord Trefgarne: My Lords, I am obliged to the noble Lord, Lord Tordoff, for his response to this Statement and, indeed, to the noble Lord, Lord Underhill. First, on the question of assigning responsibility for this decision, which my noble friend chose to do on this occasion, there is very good legal precedent for that. A number of cases have produced decisions in support of that arrangement and, indeed, it has long been the practice that such a thing can be done. I shall be happy to provide the noble Lord with detailed legal references, if he would like to see them. As for my noble friend's personal position in this matter, which the noble Lord, Lord Underhill, chose to question, my noble friend has, of course, acted with complete propriety in this matter right from the very start, and that is why he delegated this decision to my honourable friend Mr. Rees.
As to the merits of the case, which the noble Lord, Lord Underhill, complained of as well, it is a fact that it was necessary to determine where the public interest lay in this matter and it was incumbent upon the MMC to show that the public interest would be damaged if this merger were allowed to go ahead. I think my honourable friend was right to conclude that the evidence adduced in the report, and the conclusions drawn from that evidence, were not sufficiently strong to enable him to draw that conclusion. I am convinced, therefore, that my honourable friend made the right decision.
Lord Harris of Greenwich: My Lords, is the noble Lord aware that, although many of us take the view that it may well be right to question the judgment of the Government in this matter—and one can understand some of the anxieties which have been, and will be, expressed in Scotland on this question—we share his view, and the view of my noble friend Lord Tordoff, that there is something rather squalid in some of the personal attacks which have been made on the Secretary of State in the past 24 hours? Although many of us may differ from the noble Lord on matters of policy, no one could conceivably question his honour.
Lord Kaldor: My Lords, I should like to associate myself——
Lord Trefgarne: My Lords, I think that it would be in order for me to intervene at this moment. I am grateful to the noble Lord, Lord Harris, for that intervention, with which I agree.
Lord Kaldor: My Lords, I should like to associate myself with what the noble Lord, Lord Tordoff, has just said. I consider that the Secretary of State's
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holding of shares in a particular company is a trivial matter, and I am sure there is no question that it has played any role in the decision. But, personally, I very greatly regret that, perhaps out of a misguided sense of propriety, he sought to divest himself from any responsibility for the decision. For, unlike earlier speakers, when we come to the substantive issue, I fear that the Government's decision was a thoroughly bad one, for reasons which I shall proceed to explain. Had he approached the matter with his knowledge of economics and his general views as to favourable and unfavourable factors for the economic development of this country, I am quite sure that the noble Lord, Lord Cockfield, would not have come to the same conclusion as his Minister of State. So it is unfortunate that he did not deal with the matter.
Contrary to what some speakers have said, I find the arguments advanced in the note of dissent against the majority report extraordinarily weak. I should like to quote one or two sentences from the note of dissent:
"Charter, despite its policy of building up or acquiring subsidiary industrial companies, is still to a large extent a financially-orientated investment company. Anderson Strathclyde is a specialised engineering company. We do not dissent from this description of the companies, but we do not consider that any inference is to be drawn from it adverse to the proposed merger".
This is an extraordinary statement. This country, as is well known—I have put forward this view without contradiction on numerous occasions—has suffered for many years from the excessive influence of financial capitalism as against industrial capitalism. It has suffered too much from takeover and merger activities whose sole purpose has been to build up and enlarge financial empires. This has served to dissociate specialised knowledge, loyalty and devotion to a particular sphere of work from the ownership of companies. In the 1970s, and earlier, we had an orgy of takeover bids. It is now generally known—
Several noble Lords: Question!
Lord Kaldor: I apologise. If I may finish the sentence, I shall then proceed to my question. It is generally known that the effect of such takeover bids by financial investment companies is wholly adverse to most industrial relations and to the dynamic and expert management and development of industry. This is a case in question. Is there any reason why a South African multinational conglomerate whose main interests are in gold and diamonds should acquire an industrial engineering company in Scotland? I do not see that the case has been made out. There is every possible argument to the contrary.
Lord Trefgarne: My Lords, I do not see any reason why this company should not acquire Anderson Strathclyde. A number of possible ill effects have been pointed to, but they are all purely speculative. For example, the suggestion that the management of Anderson Strathclyde would suddenly collapse under the new ownership does not seem to me to be a proven assertion. Of course mergers occasionally bring some management difficulties which have to be ironed out, but I see no reason to believe that those difficulties would be any more acute in the case of this company, which is to remain a Scottish company with its registered office in Scotland.
Lord Oram: My Lords, while I agree with those who have said that the noble Lord, Lord Cockfield, has acted perfectly responsibly and honourably in this matter, is there not a procedural point upon which with hindsight, he—the noble Lord, Lord Cockfield—might reflect? When it occurred to him that because of his, I acknowledge quite small, shareholding he was unable to fulfil his ministerial duties under the Fair Trading Act 1973, and decided therefore to pass these matters to his junior colleague, ought he not at least to have come to this House to make a personal statement of his position? This would not have been debatable, but it would at least have been an expression of his responsibility in this House.
Lord Trefgarne: My Lords, all departments of state make a large number of decisions every day of the week—some large, some small. Very many of those decisions are delegated to junior Ministers, and many more are delegated to officials in the department. It has long been established by tradition that this is an appropriate way in which to proceed. Indeed, it has long been established by the courts that this is an appropriate way in which to proceed—and this was the way in which my noble friend chose to proceed on this occasion.
Lord Hatch of Lusby: My Lords, in the Statement repeated by the noble Lord, Lord Trefgarne, mention was made of national interest and, in his replies, the noble Lord has spoken of public interest. May I ask him whether the Government have not considered that the national interest and the public interest will be gravely damaged if the British Government are seen to be facilitating the takeover of a Scottish company by a South African company which inevitably has been giving strength and support to the policy of apartheid and which was known to be supporting the illegal régime of Ian Smith in the then Rhodesia? Is this feeling of shame in this country not likely to be strengthened by the news of the activities of South African agents, revealed in the courts last week, and the invasion of a fellow member of the Commonwealth, Lesotho, at the same time?
Lord Trefgarne: My Lords, the noble Lord, Lord Hatch of Lusby, raises points which are wholly irrelevant. There is nothing to prevent British people from investing in South African companies or in companies which have interests in South Africa. There is no law against that. The shareholders of Anderson Strath-clyde are perfectly entitled to sell their shares where they will, subject only to the provisions of the Fair Trading Act which we are considering today. It was on that basis that my honourable friend took his decision.
Lord Hatch of Lusby: My Lords, with respect to the noble Lord, Lord Trefgarne, that is no answer to my question. I asked whether he had considered, on behalf of the Government, whether the national interest and the public interest would not be damaged by the revelation that the British Government were facilitating the incursion into industry in this country of a South African company.
Lord Trefgarne: My Lords, the answer to that question is. No. The South African element was in any event considered in the report, and I would refer the noble Lord to paragraph 9.13.
Lord Campbell of Alloway: My Lords, is my noble friend aware that public interest as defined by the relevant statute does not embrace the kind of political situation on an international plane to which reference has just been made?
Lord Trefgarne: My Lords, my noble friend is, of course, quite right.

Nuclear Forces: Geneva Negotiations
4.24 p.m.
Debate resumed.
Lord Gladwyn: My Lords, I must start by apologising for having missed the splendid oration of my noble friend Lord Mayhew, although, broadly speaking, I think I knew more or less what he was going to say! I was late because I thought the Statements were not going to be taken when they were. In the 10 minutes available, I shall simply make a series of generalisations, which I fear some of your Lordships may find contentious, but which I myself believe to be relevant.
First, I feel that the Russians are almost as frightened of us as we are of the Russians. Deep in the Russian consciousness lies the fear that Russia may once again be assaulted and almost overwhelmed by the West, as she was in 1912, in 1941 and, as some would say, even in 1918. It is chiefly, therefore, for this instinctive reason that the Russians have built up their nuclear and conventional strength, so as to deter the West and not necessarily, or only, for the accompanying ideological reason—dear to the hearts, no doubt, of some of the leaders of the despotic régime under which the Russian people have groaned since the formation of the Russian State—that Russia is in some way destined to triumph, this time under Soviet leadership, all over the world.
I also feel that even these Russian ideologues, so to speak, cannot actually want to have a war with the West if it can possibly be avoided, for, if the war was nuclear, Russia would be obliterated, and, if it was merely conventional, the Union would at least be cut off" from her external trade, above all grain, and thus would face, even if victorious, a potentially disastrous situation. She might also face an appallingly difficult war with China. What the leaders undoubtedly do want is to promote the collapse of the West if they can, and the best way of avoiding that is to see that our rival economic system works efficiently.
True, the aggression against Afghanistan would seem to support the view that the Soviet Union is now embarking on a regular policy of conquest, but this is by no means certain. We must, after all, remember that we ourselves, for imperial reasons, on more than one occasion invaded Afghanistan in the past, the last time with pretty disastrous results. We must certainly do our best now to see to it that the inexcusable Soviet

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aggression does not pay and that some sort of Afghan independence is eventually restored. And we must back up the Afghan people in their heroic resistance to the limit of our effective power. But I do not think we may expect any very similar exploits on the part of the Russians in existing world conditions. In other words, I hardly think that the Russians are now likely to risk another Afghanistan.
Poland, too, does not really support the suspicion that the Russians are all out for world conquest. Either we accept a kind of Russian hegemony over Eastern Europe or we do not. The brutal suppression of democracy in Hungary and Czechoslovakia was, it must be accepted, at least tolerated, even if unwillingly, by the West, at a time, incidentally, when the West had a great nuclear superiority. Poland, no doubt largely owing to Western pressure, has at least escaped Russian occupation, which is something. But beyond continuing to exercise such pressure I do not think the West can go, unless it has really decided to destroy all Russian authority and influence in Eastern Europe and to take the measures necessary to achieve this end—and that, of course, could mean war.
But maintaining economic and political pressure in order to induce the Government gradually to liberalise, or at least render less intolerable, the conditions in the countries in their zone of influence is one thing. Building up a nuclear superiority in order to compel them to do so is quite another. Certainly, we have to make it clear that we are in a position successfully to defend ourselves, and indeed our own vital interests, by one means or another, anywhere in the world. But that does not mean that we should regard the Soviet Union as enemies of the human race in the same way as we regarded Hitler and the appalling Nazi gangsters. They could be suppressed only by war. So might the Soviet Government be suppressed if one really believed that they were the equivalent of the Nazis. But, owing to the vast extent and indeed the power of the Soviet Empire, it is unfortunately likely that the West would also perish in any such attempt.
So it follows—and this is my main point—that some sort of understanding or truce, if you will, between the super powers, however difficult, is the only sane solution. It is, in fact, a total absurdity for either side to attempt to build up some sort of nuclear "superiority". Given broad nuclear parity, for example, which I believe now more or less exists, all that is really necessary for the purpose of deterring the adversary from using nuclear weapons against oneself is the possession of sufficient indestructible nuclear weapons to devastate one's opponent on a second strike. These might well be chiefly submarine. And clearly in such calculations all nuclear forces at the disposal of the West should be regarded as a whole. Of course they should.
True, broad parity in the so-called conventional field is also necessary. Here again, it is surely unnecessary to build up, as the Russians have certainly endeavoured to do, any vast superiority of power. All that the West wants, in fact, are enough conventional forces, or power, to make it clear that the other side would be unlikely actually to win a non-nuclear war. One does not have to match the Russians tank for tank or even, for that matter, man for man. What we need
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is a new kind of forward defence embracing, in quantity, all the anti-tank and anti-aircraft weapons and devices that are now, or could shortly be, at our disposal.
Such a general strategic concept certainly involves the possibility of a war confined to the Continent and to the oceans. That is why, as we all know, it may be suspect to the Germans. But if it can, broadly speaking, be accepted as valid, there is little reason to suppose that any such war will ever take place. In any case, and pace the Germans, we must all face the fact that, however destructive, such a war would be infinitely preferable to any nuclear exchange, which would almost certainly result in the virtual extinction of the Western European democracies.
I repeat, I believe the Russians are probably now as frightened as we are and I have no doubt that there would be "peace" demonstrations in the Soviet Union if the country were not in the iron grip of the KGB and largely intoxicated, I fear, with anti-Western propaganda. Some Russian generals may possibly be thinking in terms of the eventual conquest of the world, but I very much doubt if such silly dreams dominate the thinking of Mr. Andropov's Politburo.
What should we do? Here, I can only express myself in shorthand. As I see it, we should in the first place abandon Trident, which, from the general point of view of the West, is a waste of money, productive of totally useless overkill. Second, we should abandon "flexible response", which is essentially based on a willingness, in the last resort, to perform national suicide, and proceed with our European allies to strengthen our conventional forces on the Continent. Third, we should revise our latest Falkland-induced worldwide strategic plan on the chief assumption that we simply cannot afford, for long, to deploy at great expense a large task force in the South Atlantic. Fourth, if, but only if, it is clear that the present negotiations are failing owing to Soviet intransigence, we must accept some cruise missiles here, on condition that some sort of "dual key" control system is introduced, based, presumably, on the principle of "no obliteration without authorisation". But, fifth, we must try our best to induce the Americans to conclude some deal involving a compromise on the original "zero option", and at least take Mr. Andropov's latest proposals seriously for a start.
Sixth, we must declare that we ourselves, at any rate, will never authorise the first use in war of any nuclear weapons at our sole or, indeed, at our joint disposal. Seventh, and lastly, we must rally the nation against the CND—which, by imperilling NATO, really might result in our defeat—by popularising the kind of non-nuclear but defensively effective programme which I have outlined.
We must explain that a nation which, at a moment's notice, could repel aggression many thousands of miles away is entirely capable, with her allies, of successfully resisting any non-nuclear assault on these islands. More especially would this be so if our young people can be persuaded to take the defence of democracy seriously and, for instance, take part—as I think was half suggested in the speech of the Secretary of State for Defence in the other place only yesterday—in some scheme for a new kind of home guard or extended territorial army to protect our own

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centres against attack from the air in the event of war, which, if all the measures that I have proposed are taken, will in all probability never occur, the danger of a conflict between the super powers having been finally averted.
4.36 p.m.
Lord Beloff: My Lords, it would keep us here a long time on the day on which we are thankfully "breaking up"—if I may use that analogy—to deal with all the many and interesting points which the noble Lord, Lord Gladwyn, has put forward on the somewhat slender substructure of a Question about a particular set of negotiations on disarmament. But that does not mean that on some future occasion it will be irrelevant to enter into this broader field.
I personally am slightly interested, or puzzled perhaps, by the motives of the noble Lord, Lord Mayhew, in raising this Question at this particular juncture because it seems to me at least possible that his motives are connected—and it is perfectly legitimate that they should be—rather with the internal political situation in this country and the position of his own political party, than with the great issues of international affairs.
I recently received from a gentleman who describes himself as a card-carrying Liberal and also as Treasurer of the Lewes, Sussex, Group of CND, a long letter in which he explains the reasons why that movement is now resorting to various forms of direct as well as political action, and in the course of which he says:
'We have worked at party politics too. We have won over the Labour Party. We have gone a long way towards winning over the Liberal Party.".
It seems to me that today's Question by the noble Lord, Lord Mayhew, represents an attempt to deal with this takeover bid by the CND by trying to find common ground which might exist between the unilateral and the multilateral. It is, therefore, not surprising that he finds himself to some extent allied, rather improbably if one looks at their different philosophies, with the noble Lord, Lord Jenkins of Putney.
Lord Mayhew: My Lords, as the noble Lord has referred to me, would he be good enough to give way? If it were my motivation, as he suggests, to appease the CND elements, surely I was greatly mistaken in attacking the unilateralists with the vigour that I did in my speech?
Lord Beloff: My Lords, I should not have thought that that consequence necessarily follows. There are various ways in which to deal with political movements, some of them more subtle than others. After a long acquaintance, I would associate the noble Lord, Lord Mayhew, with subtlety. But I do not think that, in pursuit of his laudable objective, he has done his cause, or rather the cause of multilateral disarmament—which is his, mine and I hope the cause of the majority of noble Lords—a great deal of good by going on to suggest that the rather lukewarm reply (not total dismissal, as he suggested and as I think the noble Lord, Lord Belstead, will indicate) to Mr. Andropov's latest set of proposals, arises from some failure of temperament or ideology in either the President of the
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United States of America or the Prime Minister of the United Kingdom.
I do not think it is my business or, indeed, the business of any noble Lord to speak up for or explain the position of the President of the United States of America. All one can say is that at the very moment when the noble Lord, Lord Mayhew, says that he attaches such importance to cementing the bonds of our alliance, a personal attack upon the head of state of its leading member is perhaps in this case not a very subtle way of going about achieving that admirable end.
Lord Gladwyn; My Lords, is the noble Lord not aware that a great many Americans do not themselves approve of the policy of their President, and say so most emphatically?
Lord Beloff: My Lords, what is permitted to the citizens of one country to say about their Government takes on a different picture when the same thing is said by politicians in another country. There is quite a gap between an internal domestic debate, in which clearly Americans have every right to criticise their own President, and trying at one and the same time to say: "We wish to cement our alliance with the United States, but we think the President is temperamentally and ideologically unqualified to deal with a serious situation." As I said, I do not regard it as my business to pursue that argument.
What is my business—and here I would like to protest in the strongest terms on behalf of myself and my noble friends—are the remarks about our Prime Minister. There is not a shadow of reason to believe that the Prime Minister is less dedicated to the pursuit of peace through multilateral disarmament than any single one of her predecessors, whether those named by the noble Lord, Lord Mayhew, or whether those not named. It would, indeed, be incredible if anyone who held high office in this country was not primarily concerned to protect us and to protect our peace. To make these remarks rather than to pursue the problems which Mr. Andropov's statement represents, seems to me to be wide of the mark.
In view of references that have been made to recent history, it seems to me fairly obvious, and something which one could almost document, to say that if the three countries concerned—the United States, the United Kingdom and Germany—had still had at their heads President Carter, Mr. Callaghan and Herr Schmidt, the response to Mr. Andropov would not have been significantly different.
I entirely agree—and, again, this makes today a red-letter day—with the remarks made by the noble Lord, Lord Jenkins of Putney, that clearly we cannot examine any proposal for multilateral disarmament, or for any other aspect of our relations with the Soviet Union, unless we do our best to enter into their minds; to some extent the noble Lord, Lord Gladwyn, went down that path as well. But, of course, in order to do this successfully one has to be wholly au fait with the actual situation that exists, both as it exists and as they, in their turn, no doubt see it. I find it difficult to accept the view which the noble Lord, Lord Jenkins, put forward, that there has been no important change in

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the balance of forces in the world over the last decade, except the installation of the SS20 intermediate range nuclear missiles.
It seems to me, if you look at the figures, that there has been a greatly increased vulnerability in the case of the American strategic deterrent—certainly its land-based element; there have been many changes in the last decade, as my noble friend Lord Thomas pointed out, in the Soviet Union's capacities for conventional warfare, whether on land or on sea; and if one looks at the crudest of all measurements, the proportion of national expenditure devoted to defence, one sees that for a decade in almost every year, with one or two exceptions, that has been a great deal higher in the Soviet Union than it has been in the United States.
I do not jump from this to any conclusion about possible aggressive intentions by the Soviet Union. I believe that Mr. Andropov is almost as peace-loving as Mrs. Thatcher, and that is putting it high. I believe that he desires to preserve his régime and the comfortable position for himself and his friends in the KGB at which they have, after strenuous effort, at last arrived. Therefore, I assume that the Soviet Union, in building up this panoply of force, is well aware of the political gains that may be got from it, and equally well aware of the heavy economic pressures that it entails, as on the other side, the pressures which our own and our allies' rearmament entails for our own economies. Therefore, I am inclined to believe that the Soviet Union would genuinely like some kind of reduction in the overall burden.
Therefore—and I believe that the Foreign Secretary said that we must look at this—any proposal that they make must certainly be looked at to see whether it indicates even the remotest possibility of some route to an agreed reduction. It may well be that, when looked at, we shall find that the advantages that the Soviet Union maintains are not sufficiently reduced by these proposals, and that we should need to go something nearer to the original proposals put forward by the United States. But certainly that is a matter open for discussion, and for discussion on the assumption that both sides have a common interest in multilateral reduction.
Where I differ profoundly from the noble Lord, Lord Jenkins of Putney, and I can see how difficult he and his friends have made the position of the noble Lord, Lord Mayhew, is that we cannot disregard the other aspect of this; that is to say, the orchestration, of which this is a part, of protest against the West's own efforts to build up a countervailing force until that agreement is reached. There is something there which it is difficult for the protagonists of unilateral disarmament to argue away, and that is the simple fact that, until the two-track initiative of 1979, in the immediately preceding years, there were years of a serious and important build-up of Soviet nuclear weapons targeted on Western Europe. During that period those who now object so vociferously to our own preparations took no action, made no statement, and issued no denunciations. That is why, although no doubt there are many people who have seriously been brought to believe in the imminence of nuclear war, about which I have total scepticism, it is also the case
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that there is in the Andropov proposal, as the noble Lord, Lord Thomas, pointed out to us, an element of propaganda, and that it will be the business of our negotiators to find out what is serious and what is propaganda.
4.49 p.m.
Lord Kennet: My Lords, may I apologise first to the noble Lord, Lord Mayhew, for having missed his speech. That I did so was due to a misunderstanding about when this debate was likely to begin. The negotiations which are the subject of this Question are now being conducted in public. This means that Mr. Andropov believes that he now has a better case than President Reagan, and that I think is probably the reason why he has taken the step, which is not very common in Moscow, of switching (without, of course, any declaration that he is doing so) from private or secret negotiations to public negotiations.
If the press reports we have are correct—and these days they are not often correct—there are among President Reagan's advisers in Washington those who believe that the European Peace Movement—whatever that means; we all adopt our own definitions of it—was quieted by the announcement of the zero option and the beginning of the IMF negotiations about a year ago. I certainly count myself part of the Peace Movement, and I think that probably even the noble Lord, Lord Beloff, would if it were rightly defined. I was quieted for a little while at the beginning of those negotiations. One could not but applaud the fact that after a year in office the Americans had come to the table, and the Russians had come to the table, too, and that a Western offer had been put down. It was good news, and it was seen by a wide spread of opinion in Europe as being an acceptable opening bid in the negotiations. I do not think it has ever been accepted by anybody, including the American and British Governments, that it was to be both the opening bid and the final offer.
The problem at the moment, and the disquiet in Western European opinion, is due, I believe, to the fear that it may be going to be the American final offer. We are familiar with the strand of American thinking and policy which says, "If the Russians are going to make a useful offer, they will do so at the eleventh hour", meaning just before the cruise missiles become operational in this country and the Pershings and cruise in Germany, and so on. There are even those in Germany who say, "If the Russians are going to make a useful offer, they will do so at the thirteenth hour", that is, after the cruise and Pershing 2 systems in Germany have become operational.
I do not think we can any longer believe that is the case. Within a month of coming to power, Mr. Andropov has made two very public and noticeable proposals. He is not moving at the last moment: he is moving now, and it is up to our Governments to see what we had best do about that. We must listen with exceptional care to what is coming out of Moscow, because of the change of ruler. So much is obvious. Perhaps it is the conventional wisdom in Washington, but, at any rate, many people in Washington, including the Administration's advisers and spokesmen, believe that Mr. Andropov is clearing out Mr. Brezhnev's dead wood and that the new attitudes he

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takes up and the sound of heads about to fall, which is audible, are the fruit of his determination to get rid of all traces of the old régime.
It may be that that strand of opinion is missing the point. It seems obvious that Mr. Andropov's rival is not a dead man; his rival is probably, in my opinion, Marshall Ustinov, the Soviet Defence Minister. Marshall Ustinov has been telling the world that the Western deployment, especially of Pershing 2s, will force the Soviet Union to adopt "launch on warning"; and his utterances are becoming familiar. They are extremely alarming and bellicose. He ignores the fact that we have lived under precisely the same threat, of six-minute or ten-minute flight time of Soviet missiles, since about 1970, with the SS 4s and 5s. We, as the Government rightly state, never threatened to launch on warning when those missiles were first trained against us.
The adoption of such a bellicose line by the Soviet Minister of Defence can only tell us something about what is going on inside the Soviet Union. Marshal Ustinov in effect (if one reads carefully what he says, and it is essential to do that) threatens to breach the hot line agreement and to breach SALT II, which the Soviet Union maintains it is observing, though it is unratified. I will not detain the House by explaining in detail what I mean. It is all there in his speeches.
Mr. Andropov does not do any of that. If we face up to the fact, we are really being offered two Soviet Unions. We are being offered a choice of the Soviet Union with which we want to deal. It is important that the Western Governments should choose the right one, and it is rather easy to see which is the right one. If we talk back to Marshal Ustinov in his own language, we risk making Mr. Andropov his prisoner. Some of us are already talking back to the Soviet Union in "Ustinovite" language; and I do not mean only the right wing in our respective countries. I mean also, curiously enough, the headline writers in some of our most respected newspapers.
We had no copy of The Times today, so I was able to compare the treatment of Andropov's speech yesterday in only the Herald Tribune and the Guardian. In both cases the stories were careful and, so far as I am able to say, mainly accurate, though not entirely. The headlines in both cases were widely misleading, in that, for the second time in 10 days, the Guardian said that the Americans had flatly rejected Andropov's proposals, and the Herald Tribune said that Britain, Germany and France had flatly rejected Andropov's proposals. We may be glad that none of those Governments has done anything of the sort. I believe that if they did, it would be the recipe for tearing NATO apart within about three, or possibly six, months. One thing that we must avoid on this occasion is a flat rejection of anything; and to say that is not to state that we should put forward an immediate acceptance of anything, either.
What do we think the Russians make of NATO? Is it not likely that they think that it is probably rather like the Warsaw Pact, which is something that they know better? To them the only strategic targets are in the United States. To them the long-standing language of theatre and non-theatre nuclear weapons is still in use, though we in the West have, luckily, given it up.
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The Chinese seem to understand all this clearly, but we have to remember that the Russians do not, and try to get it across to them that the two Alliances do not resemble each other.
The main way in which they do not resemble each other is that there is no Polish independent nuclear deterrent and there is no Czech independent nuclear deterrent. In Britain and France there are such things. Other ways are perhaps too obvious to be worth mentioning. It is a fact that the Soviet Union single-handed conducts the affairs of the Warsaw Pact. It is not a fact that the United States single-handed conducts the affairs of NATO. The Russians must never be allowed to forget that difference.
At the risk of a bit of "I told you so", I want today to recall how in the early seventies, again and again, I bored this House by pointing to the arrival of the SS 4s and 5s, by clamouring against the imbalance in intermediate-range ballistic missiles, by saying that they were going to give trouble some day—and, by God!, they are doing now—and by asking why it was that the Governments of the West would not agree to ask the Russians to take them away.
I never suggested that we should meet this new problem by building our own forces to match the old SS4s and 5s. I did ask—and repeatedly—that somebody, somewhere, in some set of negotiations, should take those things into account. Conventional forces were being negotiated about. The SALT talks were going on. But at that time nobody was talking about the Soviet intermediate—range ballistic missiles. Now they have, of course, begun, and we have the dual-track decision and the deployments, about which all the present agitation takes place, in the face of the SS20 deployments on the other side.
There is a bit more "I told you so", and then I shall be finished with it. Again and again, since December 1979, I have bored this House, and perhaps worried the Government on occasion, by asking for a British safety catch on the cruise missiles when they are deployed. I ask for it again today. I go back to the Thor missiles of all those years ago; around 1959 to 1962, they were here. In preparing the British Parliament to receive those American missiles, the distinguished ex-Minister who is now the noble Lord, Lord Duncan-Sandys, promised that there would be "joint positive decision of both Governments", and indeed when they came here the system adopted was that of British ownership and manning with one American permanently present at each weapon with a key to permit the arming of the warhead and to permit the countdown to proceed beyond a certain point. If these American weapons are to be here in American ownership, a proposal which I have never disputed for its own sake, then I think that the least we can ask for is that that system should be applied in reverse; that there should be one British person present with each missile or with each launching console (or whatever modern technology has) who should be physically able to discontinue the countdown at a certain point unless he receives direct orders from his own Prime Minister to continue.
I am fortified in this proposal by believing that we in this country are not even too sure what happens if the President and Vice-President of the United States have

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disappeared. Perhaps the Government could even give us a bit of an answer today. If the President and Vice-President have disappeared in a nuclear exchange and our weapons, the American weapons on British soil, are still here and still intact—a not unthinkable scenario—who gives the order to launch? Unless there can be some clear answer to that, then it is perfectly obvious that there must be a British finger on the safety catch. Indeed, I think it is obvious that Parliament must have the right to decide this question at a moment which is not too late. The American-only trigger on the safety catch, no European finger on the safety catch, emphasises to the Russians the Americanness of the weapons; it gives them a great arguing point, possibly a bargaining point.
This is a perfectly genuine quandary because it is true that the American intermediate-range missiles in Western Europe will have a different effect on the super power balance from the effect exerted upon that balance by the Soviet intermediate-range missiles in the Soviet Union. The American missiles can reach the other super power; the Soviet missiles cannot reach the other super power. Nothing can change that; nothing that the Russians can say about it can make that fact a tainted fact. It is a true fact.
There is one further possibility I want to touch on before concluding—and it is back to this question of relations between Andropov and Ustinov, between, in effect, the KGB and the army in Russia. At certain times in the modern history of the Soviet Union, we in the West have had good reason to believe that the civil arm of government did not always know what the military was doing. During the SALT I negotiations, there was an episode which has become rather famous, when the Soviet military said to the American military in private in the evenings of the negotiation; "Here are some facts which we would like you to know but, please, will you not pass them to your civilian arm because our civilian arm does not know them?"
At moments during the process of Andropov's establishing his supremacy over the army in Moscow—which, I believe, might have been quite a tense process—it has seemed possible that something of the same sort may be happening again. If it were, there might even be a case for the Foreign Secretary in the privacy of his own room to tell his opposite number, the Soviet Foreign Minister, some of the things that he knows about the Soviet military, in case Mr. Gromyko does not.
What we need in my view, as it has always been, is an early and intense relationship between the three sets of negotiations, START, INF and MBFR and, possibly, an amalgamation of all three. I have never seen any objection to that. The Russians, we have to admit, did have an attractive, if specious, point about their offer to reduce their SS-20s to a number equivalent to the number of nuclear missiles now held by Britain and France. It would in no way prejudice our position about the reduction or final elimination of those two European forces if we were now to call for the joining up of START and INF and for the presence of Britain and France in those negotiations.
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Of course there is a lot to be done before we can properly come to that. It appears at the moment that France would not agree and Britain would not agree. There is always hope for widening the field. Progress is subject to widening the field. The negotiations, whether public or private, are at the moment thwarted and set back again and again by the existence of capricious frontiers between one set of weapon systems and another. Every set of weapons systems, every different range of missile, the location of every different type of platform—on the sea, under the sea, in the air and on the land—are all matters which must be related to each other. It is impossible to pick out one and say: "Let us pretend these two things are equivalent without reference to their surroundings and let us negotiate about them".
To continue to insist on doing so at the present moment would be a recipe for continued deadlock in real disarmament negotiations, and such a continued deadlock would risk destroying the very political alliance on which we rest our hopes for the defence of our way of life. This is a way of life which, let us remember, may be destroyed not only by physical means but also by the mere threat of the use of such physical means.
5.7 p.m.
Lord Bishopston: My Lords, this debate is timely because the whole country is concerned about peace. In recent times those who have dared to mention the word "peace" or who have been known as peace lovers, have been, in the minds of some, the objects of ridicule. I think that now, only a few days from Christmas, we should be able to say that many members of the party opposite have been found sending messages concerned not only with expressions of peace but also of goodwill. So we may therefore assume that the word "peace" is acceptable for a few days, at least over Christmas. But very soon in the New Year reality will break through, blest, we hope, with the Christmas message.
If I summarise what I want to say, and what has been said by various noble Lords—including the noble Lord, Lord Mayhew, to whom we are indebted for this debate—it is a matter of saying, "Let us keep our options open and avoid getting into the rigid pockets or groups which tend to fossilise our thinking in a fast changing world situation". We all need to think for ourselves, to think again and to break away from those rigid barriers. The noble Lord, Lord Kennet, was pursuing much the same theme.
This subject is not a seasonal one although it is dealing with peace which is on the lips of many people at this particular time. But we need to keep our perspectives, because, although we are rightly concerned about the threats which face mankind and what we can do to maintain the peace and security of our way of life, other people have other things in mind at the same time. The problem is to make people more aware of the situation in a serious way while recognising their own point of view. At Christmas time the world is a better place. I think that it is better because it is less concerned with missiles and more concerned with mistletoe. Fewer are sensitive about stockpiling and more are toying with ideas for stocking fillers. After Christmas, after the Christmas meals,

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more people will be reaching for detergents than for deterrents. I suspect that even the Prime Minister will be less strident about Trident on Christmas Day—and long may that be the case! We want to make sure that peace is not only on the cards at Christmas but throughout the whole year. That really is the motive behind this debate, because we all have concern for policies which will pursue the path of peace and our way of life, keeping perspectives.
As I say, this debate is relevant this afternoon because of the vital importance of keeping a future with peace and goodwill and of ensuring its reality. I think we should keep our options open and, with the changes that have taken place in the leadership of the Soviet Union and with a President of the United States who seems to want the United States of America not only to be an independent power in matters of defence but, indeed, does not always have the number of consultations with others that some of us would wish, it is opportune that we should be seeking new initiatives from our Government. The fear is that, far from taking new initiatives, the Government are not responding to those which are coming forward in a rapidly changing international situation. They may not come again for some time; and in the meantime there will be nuclear proliferation and indeed new threats to world security and peace. I think the noble Lord, Lord Mayhew, and others were rightto express concern at the attitudes of the United Kingdom, of our own Prime Minister and of the United States President in these matters of closing the options so quickly. When one talks, as the noble Lord, Lord Beloff, did, of the view of the United States people, of course the President has not yet got both Houses of Congress to agree to his MX missile proposals, which deserve a great deal of consideration.
The question we are discussing is whether, to the Government's knowledge, the Soviet Union has proposed in the international nuclear forces reductions negotiations, to renounce half their SS-20s, and whether the Government will comment. That is something we certainly need to have more information about when the noble Lord replies. We know that the two main difficulties about the MBFR discussions are the data problem of getting agreement on the force levels, and verification. Of course it may be very difficult to agree as to whether the Eastern or Western European forces and weaponry are greater and, if so, by what amount. There is merit in ensuring that when reductions are made on either side the aim should be to reach parity on both sides. But in the absence of agreement the fear and the reality is that both sides will go on building up their forces and leading, as I say, to proliferation as an outcome; and provocation is a likelihood as well.
There can hardly be disagreement surely, even by the noble Lord, Lord Beloff, with many of the things I have said so far. That is essential because we should all be looking at proposals put forward by Members on all sides and from all points of view, to see how they affect the situation that we have. The problem of data assessment, as I say, is to decide the relative value in defence terms—the quality and quantity of resources on both sides on defence. As the noble Lord, Lord Mayhew, has said, NATO has a strong submarine-based missile capability, but at the same time the
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USSR have SS-20 missiles which can be sited, as they are, behind the Urals and can still be focused upon the European scene.
It is very difficult in that situation to work out who has what; and I certainly hope, as no doubt do many others, that this will not deter us from new initiatives and new alternatives in the meantime. It would be helpful if the noble Lord, Lord Belstead, when he replies, would be kind enough to give us more information about the Soviet proposals. It would be useful to know when they were made, what detailed discussions there have been about the assessment of the forces on either side and about the problems of verification, and also details of any other alternatives we might have put forward if we could not accept the Soviet proposals—I am not suggesting that we should have accepted the proposals out of hand—and how long those discussions have taken place. Mr. Andropov has been in office for only a fairly short time, but this Government and the United States Government seem to have made up their minds very quickly that they will not accept the offer and that that is the end of the story, when the negotiations on the alternatives should have continued for a little longer.
The House wants to know, and has a right to know, about the Government's thinking on matters of defence which are likely to be relevant in the next few months. We all know that defence matters do not stand still, and it is necessary to know the principles of the Government's defence policy, which may apply not only to the problems but, also, to the opportunities which arise from time to time. As has been said, we are indebted to the New York Times and to the press, in general, for leaks about some of the proposals, including the claim that the Soviet Union's proposals are not acceptable. But whether acceptable or not, there must be room for the Government to follow up other suggestions for détente. I would certainly emphasise the plea made by others for flexibility in our options. In such matters, it is not unreasonable that the United States should have a view, but that does not imply that we should invariably go along with them. We should use the occasion to put forward other ideas, which we should canvas and press with our other NATO allies.
One fear arises from the fact that the President often acts independently. Of course, if he and we claim to have independent nuclear deterrents or weapons, that independence means that we can use them without consulting others, which is a most dangerous state of affairs when we are members of an alliance. One hopes that this so-called independence accepts the need for consultation at all times, because one cannot use nuclear weapons in a situation, without affecting other people and creating the events which will flow from them. So it is vital that we should consult.
I do not think that it helps when, on occasions, the Prime Minister says that the United States President has a rightto do what he likes with MX missiles and other defence projects without consulting us, especially, as we said last night in debate, when the bases from which some of these weapons will operate are of concern to us. I mentioned last night that the Prime Minister was correct in saying that the Falklands issue was one where Britain said: "We are not going to be pushed around". But it is also true in the defence field nearer home, where nuclear weapons

1151
are going to affect far more people than were affected by the Falklands issue, important though that was.
The offer by the Soviet Union with regard to the SS-20 missiles is worth studying, even if it is not acceptable. But it does not follow that, if one proposal is not completely acceptable, nothing should be done and that proliferation and greater problems are the only alternatives. We all know that the SALT and MBFR talks are facing difficulties, but we must use the new situation, with Mr. Andropov coming to leadership of the Soviet Union, the sometimes unpredictable thinking of President Reagan and the fluid position elsewhere, as opportunities for British initiatives. If we lose the chance to break through, another one may not come for a long time and, in the meantime, the situation gets worse.
In future talks on defence, the United Kingdom should press for non-proliferation, which is only one of the alternatives, and we should press for legitimate proposals for reductions. If we refuse to agree to offers from the Soviet Union, then the stockpiles will grow on both sides. I believe that the time has come to recognise the new opportunities and new initiatives which can be made by Governments. As the noble Lord, Lord Beloff, and others have said, one needs to try to understand the point of view of other people and to take that into account. But one thing we want to avoid at all costs is going back to the cold war mentality, which was so ruinous for the world for several decades in the past. Given the calibre of leadership which we have a right to expect from our Government, and with the co-operation of the United States, I believe that in the New Year we ought to press the new leadership of the Soviet Union to recognise the alternatives which are being put forward, and in that way give a new sense of realism and of vision for a more peaceful and secure future.
5.20 p.m.
Lord Belstead: My Lords, the noble Lord, Lord Mayhew, has raised a subject of great importance: the present state of the negotiations in Geneva on intermediate-range nuclear weapons. The majority of these weapons are based in Europe or are targeted upon Western European countries. In his speech the noble Lord, Lord Jenkins of Putney, asked us to look at the problem through Soviet eyes. The noble Lord claimed United States superiority in strategic systems. Such a Soviet claim cannot be upheld. The two superpowers have about the same number of warheads on the strategic ballistic missiles. However, the Soviet Union has some 25 per cent. more strategic systems. Therefore I think my noble friend Lord Beloff was right to make the point that during the 1970s the Soviet Union caught up with the United States at the strategic nuclear level: the inter-continental and sea-based ballistic missiles and the strategic bombers.
Since then the NATO Governments have had to weigh very seriously the prospect that at some stage the Soviet Union might calculate that in a crisis it could afford to gamble on blackmailing Western Europe by the threat of missiles, especially the SS20, which can reach Western Europe but not North America from bases in the Soviet Union. This gamble would be based
1152
on the Soviet premise that in a situation where there was no longer an American strategic nuclear superiority, the United States might hesitate to defend Europe with strategic nuclear systems based in the United States or at sea.
I should like to make it crystal clear that we have every confidence in the United States strategic nuclear guarantee of our security. But whatever the Europeans' faith, the issue turns not on that but on Soviet perception of the matter. The NATO Governments believe—I think rightly so—that the surest route to prevent any such Soviet miscalculation would be to station in Western Europe intermediate-range missiles which could hold at risk targets in the Soviet Union.
This was half of the decision: the so-called twin-track or double decision which was taken in December 1979. These NATO missiles could, so the foreign and defence Ministers of NATO decided, be limited in number: 572 is the total chosen, spread around five European countries, including our own. The Pershing 2 missiles, to be based in West Germany, would not be capable of reaching Moscow, and the ground-launched cruise missiles could not reach the Urals. So a first strike capability forms no part of NATO strategy. Even if the alliance were to wish it, these missiles are not a first strike force. They would instead bind more thoroughly the defence of the alliance as a whole in the face of a threat from the SS20 missiles of Russia, for since the double decision was taken in 1979 the Soviet Union has almost trebled the number of SS20s that it holds.
At the same time, NATO made a serious offer of negotiations with the Soviet Union to limit this class of intermediate-range weapon. A year ago, on the eve of the opening of the INF negotiations in Geneva, the West offered, through the zero option, to eliminate such missiles entirely. It is worth reflecting that it is very possible to verify a zero option, whereas, as my noble friend Lord Thomas of Swynnerton pointed out in his speech, Mr. Andropov was totally silent on the question of verification of his proposals—and, of course, verification lies at the very heart of the whole question of arms control. The West has said that, if the Soviet Union will remove the source of possible blackmail of Western Europe—that is, the SS20s and the earlier generation of SS4s and SS5s about which the noble Lord, Lord Kennet, spoke—then NATO will have no need for its insurance policy against possible blackmail.
Since the INF negotiations opened in Geneva just over a year ago, we have seen three rounds of negotiations, but, it is true, limited progress. The noble Lord, Lord Mayhew, ascribed this lack of progress to reluctance on the part of the United States' negotiators, but I do assure the House that that is not the case. We have not been surprised that the Soviet Government would hold back to see if political doubts in Western Europe would do the job for them by, in effect, scotching the plans of the Governments concerned to deploy cruise and Pershing 2 missiles. But the NATO governments have not changed their minds, simply because the source of potential blackmail has not been removed.
That is the reason for NATO policy and not the reasons which the noble Lord, Lord Mayhew, unjustly

1153
ascribed to my right honourable friend the Prime Minister and the President of the United States. The West, NATO, the Alliance, still believe that the zero option proposal is far and away the best aim for the negotiations, but we will examine carefully other proposals, provided that they are equitable. When announcing on behalf of NATO the zero option proposal, President Reagan said that the negotiators would listen to and consider the serious proposals of their Soviet counterparts. That promise still holds good.
Lord Jenkins of Putney: My Lords, if I may intervene, if the Soviet Union were to accept the so-called zero option, in the opinion of the noble Lord, would the Government be prepared to suggest to President Reagan that in return for that, the West should be prepared to reduce our huge preponderance of submarine ballistic missile launching platforms, which the Soviet Union obviously see as the reason why they need to have the SS20s?
Lord Belstead: My Lords, this is ground which the House has gone over time and time again. The INF and START talks are talks between the two major nuclear powers. We hope, we pray, we believe in and we are working for agreement in those talks by making the realistic proposal from the West of the zero option at the INF talks, and by proposals for deep cuts in the strategic systems held so far as the START talks are concerned. It is necessary to get agreement between the two super powers in those talks. Then will be the right moment to start thinking of other things.
Recently we have seen signs that the Soviet Government maybe realising that demonstrations in Western European countries will not lead to the NATO Governments cancelling their plans for strengthening our ability to deter aggression. Recently there has been the Soviet offer, about which practically all noble Lords have been speaking and which was confirmed by Mr. Andropov yesterday, of some reduction in the number of Russian missiles in Europe. The noble Lord, Lord Bishopston, asked if I would comment on this. If, for the first time, the Russians now accept the principle that their SS20s must be reduced before there can be greater security, this would be a small step in the right direction. But to demand a substantial continuing Soviet monopoly of longer-ranged land based missiles in Europe while insisting that NATO alone should implement the zero option is not a serious position. Even if the Russians reduced SS20 numbers in Europe to the level of about 160, as has been mooted, that would still be twice the size of the force that we faced on the eve of the double decision two years ago. There is thus every reason for us to continue with preparations to deploy the first of NATO's new intermediate-range missiles at the end of next year. I would remind your Lordships that NATO's programme to deploy cruise and Pershing 2 missiles is to be spread over five years and could at any point be amended, stopped or reversed, if agreement in the arms control negotiations warranted it.
I should like to add two points, if I may. The noble Lord, Lord Bishopston, asked for information about: the negotiations concerning the Andropov proposals. I really cannot stress too strongly that members of the
1154
United States Administration have kept us fully informed of all that has taken place in Geneva, including the informal exchanges which prefaced the offer which has now been spelled out by Mr. Andropov. During just the last four weeks, for example, we have received a full briefing in Brussels from the chief American negotiator, Ambassador Nitze. My right honourable friend the Secretary of State for Foreign and Commonwealth Affairs has had private discussions with the ambassador in London. The negotiations have been discussed by NATO Foreign Ministers at the North Atlantic Council. At the same time, NATO's Special Consultative Group, which is charged with monitoring the negotiations, was also meeting in Brussels; and, of course, we have had the advantage of discussing the subject bi-laterally again with Mr. Schultz here in London. So we really do believe that the present arrangements for full consultation within the alliance are working well, and we are confident that when the negotiations resume on 27th January the American delegation will be putting forward, as they have so far, the collective view of the alliance.
The second point I would make, if I may, is the one about British and French independent strategic nuclear forces being excluded from the negotiations—the point which the noble Lord, Lord Jenkins, raised just now. British submarine-launched ballistic missiles, like comparable United States and Soviet missiles, are strategic, and therefore have no place in the INF negotiations at Geneva. These negotiations are bilateral between the Americans and the Russians, and are concerned with the land-based missiles of those two super powers. The British Polaris/Trident force is a strategic nuclear deterrent of last resort, and is already of the minimum size viable for that purpose in the face of the huge number of Soviet strategic as well as sub-strategic nuclear weapons. I hope that makes the situation perfectly clear to the noble Lord, Lord Jenkins.
There is just one point I would pick up, if I may, before I conclude. The noble Lord, Lord Mayhew, mentioned the United States Poseidon submarine which is assigned to the Supreme Allied Commander in Europe. Here, again, these strategic nuclear systems are not the subject of the INF negotiations in Geneva, since they are fully covered in the strategic arms control negotiations in the START talks. Having said that, I must nonetheless reflect that the Question which the noble Lord asks this evening, although it is confined to the area of intermediate-range nuclear forces, cannot really allow us to concentrate only upon that field, if greater security is to be achieved for the whole world.
For that reason it is important that at the START talks in Geneva the United States proposals would cut deep into the number of deployed strategic ballistic missiles and their warheads, and that at the MBFR talks in July the West put forward proposals to reduce conventional forces on the central front by making a commitment to this by all participants in the Vienna negotiations—a factor which the Eastern bloc had always held to be an obstacle to agreement on conventional forces.
We believe we must continue to persevere, for only if both East and West agree that it is in their own

1155
interests to control the arms they hold will the security of the world be increased. It is a snare and a delusion to believe that through a unilateral rejection of responsibility there is some short cut to peace. We must remain firm in our resolve, but ready always to negotiate for agreement on balanced and verifiable reductions in arms. Only in that way can greater security be achieved.
Lord Denham: My Lords, as it all too often falls to my lot to inflict on your Lordships late hours and a heavy burden of work, I should like from this side of the House to express to all other parts of the House a wish for a Happy Christmas and a restful and peaceful recess. I believe I speak for the whole House when I express the same wish to all those in this part of the Palace of Westminster who work to look after us all so well.
Lord Ponsonby of Shulbrede: My Lords, in supporting the noble Lord the Chief Whip, I take this opportunity, I hope not prematurely, of congratulating him on achieving a more even flow of business at the start of this Session. As I said, I hope those are not premature remarks and that we will, in fact, be spared having an intolerable programme of business next summer.
I wholeheartedly join with him in his remarks to the staff, and all those who work at this end of the Palace, for the long hours and devoted service that they have given to the House. I join with the noble Lord in wishing a happy Christmas and a prosperous New Year to all.
Lord Gladwyn: My Lords, I associate these Benches with everything that has been said.
Lord Kennet: My Lords, and I from these Benches.
Lord Denham: My Lords, I am most grateful to the noble Lords. I beg to move that the House do now adjourn.
The House adjourned for the Christmas Recess at twenty-four minutes before six o'clock until Monday, 17th January next.

INFANT MORTALITY: NUMBERS AND RATES FOR LEGITIMATE BRTHS BY SOCIAL CLASS FOR AGGREGIATED METROPOLITAN CONTIES*

Social Class All legitimate*

I

II

III

IV

V

Year

Number

Rate

Number

Rate

Number

Rate

Number

Rate

Number

Rate

Number

Rate

1975–76

3,826

15·1

145

10·0

414

11·0

1,911

14·1

776

17·6

425

24·7

1977–78

3,294

13·5

156

10·1

388

10·6

1,608

12·7

715

16·3

299

18·6

1979

1,704

13·0

70

9·2

205

10·3

865

12·8

344

13·7

185

20·0

Decrease in rate

—

2·1

—

0·8

—

0·7

—

1·3

—

3·9

—

4·7

1979 rate as per cent. 1975–76 rate

—

86

—

92

—

94

—

91

—

78

—

81

*Includes "others" not in I-V.

Rate: per 1,000 live births.

†Greater Manchester

Merseyside

South Yorkshire

Tyne and Wear

West Midlands

West Yorkshire.

1980 figures are not included in the tables because of changes in social class classification.

  NORTHERN IRELAND: ABORTIONS
  NORTHERN IRELAND: ABORTIONS
  PREMATURE BABIES: INTENSIVE CARE FACILITIES
  PREMATURE BABIES: INTENSIVE CARE FACILITIES
  INFANT MORTALITY
  INFANT MORTALITY
  CHILD HEALTH
  CHILD HEALTH
  SOCIAL SECURITY BENEFITS: ABANDONMENT OF ASSETS
  SOCIAL SECURITY BENEFITS: ABANDONMENT OF ASSETS
  CRIMINAL JUSTICE ACT 1982: IMPLEMENTATION
  CRIMINAL JUSTICE ACT 1982: IMPLEMENTATION
  ANIMAL PROTECTION
  ANIMAL PROTECTION
  NORTHERN IRELAND: TRANSFER OF PRISONERS FROM THE UK
  NORTHERN IRELAND: TRANSFER OF PRISONERS FROM THE UK
  NORTHERN IRELAND: TRANSFER TO UK OF BRITISH MILITARY PRISONERS
  NORTHERN IRELAND: TRANSFER TO UK OF BRITISH MILITARY PRISONERS
  NATIONAL HERITAGE MEMORIAL FUND: TRUSTEES' REPORT
  NATIONAL HERITAGE MEMORIAL FUND: TRUSTEES' REPORT
  PRIVATE TREATY SSSI LAND SALES AND TAX RELIEF
  PRIVATE TREATY SSSI LAND SALES AND TAX RELIEF
  NATURE CONSERVANCY COUNCIL: POLICY CRITICISMS
  NATURE CONSERVANCY COUNCIL: POLICY CRITICISMS
  SOMERSET LEVELS: NORTH MOOR PLOUGHING
  SOMERSET LEVELS: NORTH MOOR PLOUGHING
  WEST SEDGEMOOR SSSI
  WEST SEDGEMOOR SSSI
  EEC DIRECTIVE 79/409, ARTICLE 4: SITES FOR PROTECTION
  EEC DIRECTIVE 79/409, ARTICLE 4: SITES FOR PROTECTION
  NATURE CONSERVANCY COUNCIL SSSI NOTIFICATIONS: POLICY DISCUSSIONS
  NATURE CONSERVANCY COUNCIL SSSI NOTIFICATIONS: POLICY DISCUSSIONS
  NATURE CONSERVANCY COUNCIL: MARINE NATURE RESERVES FUNDING
  NATURE CONSERVANCY COUNCIL: MARINE NATURE RESERVES FUNDING
  NATURE CONSERVANCY COUNCIL: MARINE CONSERVATION REVIEW
  NATURE CONSERVANCY COUNCIL: MARINE CONSERVATION REVIEW
  PLANNING APPLICATIONS: DECISION REQUIREMENTS
  PLANNING APPLICATIONS: DECISION REQUIREMENTS
  LOCAL AUTHORITY REPAIRS AND MAINTENANCE: CAPITAL EXPENDITURE ALLOCATION
  LOCAL AUTHORITY REPAIRS AND MAINTENANCE: CAPITAL EXPENDITURE ALLOCATION
  THE CIVIL SERVICE: RECRUITMENT
  THE CIVIL SERVICE: RECRUITMENT
  LARSEN SWEENEY PUBLICATIONS LIMITED: PRESS RELEASE ALLEGATIONS
  LARSEN SWEENEY PUBLICATIONS LIMITED: PRESS RELEASE ALLEGATIONS
  INTERNATIONAL ENERGY AGENCY: UK CONTRIBUTIONS
  INTERNATIONAL ENERGY AGENCY: UK CONTRIBUTIONS
  MOTOR VEHICLE TAX POLICY
  MOTOR VEHICLE TAX POLICY
  RAF KEMBLE: FUTURE PLANS
  RAF KEMBLE: FUTURE PLANS
  THE ROYAL NAVY: DESTROYER AND FRIGATE STRENGTH
  THE ROYAL NAVY: DESTROYER AND FRIGATE STRENGTH
  THE CAIRNGORMS: PROPOSED SKIING FACILITIES AT LURCHER'S CRAG
  THE CAIRNGORMS: PROPOSED SKIING FACILITIES AT LURCHER'S CRAG
  OVERSEAS AID: EXPENDITURE
  OVERSEAS AID: EXPENDITURE
  OVERSEAS AID: EX-OFFICIALS' PENSIONS
  OVERSEAS AID: EX-OFFICIALS' PENSIONS
  OVERSEAS AID: INTEREST AND CAPITAL REPAYMENTS
  OVERSEAS AID: INTEREST AND CAPITAL REPAYMENTS
  GIBRALTAR: DEVELOPMENT AID
  GIBRALTAR: DEVELOPMENT AID
  GIBRALTAR: DEVELOPMENT OF THE ECONOMY
  GIBRALTAR: DEVELOPMENT OF THE ECONOMY
  OECD: RESEARCH AND DEVELOPMENT: CONTRACTS
  OECD: RESEARCH AND DEVELOPMENT: CONTRACTS
  EUROPEAN SPACE AGENCY: RESEARCH AND DEVELOPMENT
  EUROPEAN SPACE AGENCY: RESEARCH AND DEVELOPMENT
  EUROPEAN REGIONAL DEVELOPMENT FUND: DEVON AND CORNWALL
  EUROPEAN REGIONAL DEVELOPMENT FUND: DEVON AND CORNWALL
  EEC RESEARCH AND DEVELOPMENT AND DEMONSTRATION PROGRAMMES
  EEC RESEARCH AND DEVELOPMENT AND DEMONSTRATION PROGRAMMES
  TELEPHONE FAULTS: REPAIR PRIORITIES
  TELEPHONE FAULTS: REPAIR PRIORITIES
  GUY'S HOSPITAL: FINANCE STAFF
  GUY'S HOSPITAL: FINANCE STAFF
  BADGERS: TUBERCULOSIS INFECTION
  BADGERS: TUBERCULOSIS INFECTION
  NATIONALISED INDUSTRY CONSUMER COUNCILS
  NATIONALISED INDUSTRY CONSUMER COUNCILS