Sitting of 27 July 1982

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  DERWENT VALLEY RAILWAY BILL [Lords]
  Read the Third time, and passed, without amendment.
  BRITISH TRANSPORT DOCKS BILL
  As amended, considered; to be read the Third time.

  BRITISH RAILWAYS (LIVERPOOL STREET STATION) BILL (By Order)
  Order for Third Reading read.
  To be read the Third time upon Thursday.

  COMMERCIAL BANKING COMPANY OF SYDNEY LIMITED (MERGER) BILL [Lords] (By Order)
  Read the Third time, and passed, with amendments.
Oral Answers to Questions
  DEFENCE

    Naval Establishments (Portsmouth)
    Mr. Stephen Rossasked the Secretary of State for Defence which naval establishments in the Portsmouth area are still scheduled for closure over the next two years.
    The Minister of State for the Armed Forces (Mr. Peter Blaker): On present plans for the reorganisation of naval training establishments HMS "Phoenix" will be closed during 1984, but the training simulators and other practical damage control training facilities will be kept on their present site. As to the rundown of Portsmouth dockyard, I have nothing to add to the remarks of my right hon. Friend the Secretary of State for Defence during the recent debate on 1 July.
    Mr. Ross: What are the current proposals for HMS "Vernon" and Lee-on-the-Solent? Will Lee-on-the-Solent be closed or will the base be retained? It is HMS "Vernon" in which I am most interested.
    Mr. Blaker: We shall look at the lessons of the Falkland Islands over the coming months and publish a White Paper before the end of the year to see whether any changes are necessary within our broad stategy. At the moment there is no intention to change the proposals relating to HMS "Vernon", and I should be somewhat surprised if there were any radical changes.
    Mr. Viggers: I appreciate the interest shown in my constituency, which is unnecessary on this occasion. Does my hon. Friend agree that the Portsmouth-Gosport area
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    proved of unique value as a one-stop shop for the Royal Navy during the Falkland Islands crisis? It is the only place where repairs, munitions, victualling and personnel services are readily available. Will my hon. Friend decide about the future of Portsmouth dockyard as soon as possible and confirm its enhanced role instead of the reductions that were previously intended?
    Mr. Blaker: I pay tribute to my hon. Friend's efforts on behalf of his constituents and the interest that he takes in the future of naval establishments in the Portsmouth area. I agree with what he said about the work done by every establishment in Portsmouth to get the task force to sea. It is intended that Portsmouth will remain a naval operating and maintenance base. We have said that there will be no redundancies until at least 1 January. We shall do our best to introduce certainty as soon as we can. We cannot do that until we have assessed what is necessary.
    Mr. Denzil Davies: The Government's defence policy is in such a mess that the Secretary of State has had to take a full page advertisement in The Times today to show that he still loves the Navy. As the Government have already changed their mind about HMS "Invincible", will they change their mind about the dockyards and stop the closures of Gibraltar and Chatham and the rundown of Portsmouth? Is the Minister aware that there is growing doubt in all sections of the House about the wisdom of the Government's policies?
    Mr. Blaker: We covered the future of Chatham and Gibraltar in previous debates, and I have nothing to add. I have just explained to my hon. Friend the Member for Gosport (Mr. Viggers) that we shall be assessing the future shape of Portsmouth over the coming months.
    Mr. Peter Griffiths: Does my hon. Friend agree that, given Portsmouth's increased work load, it should be possible to reach the desired figures for the labour force by voluntary redundancies only?
    Mr. Blaker: At present it is impossible to say whether that will be so. We want to keep redundancies to a minimum and have as many voluntary redundancies as possible. I pay tribute also to my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) for the work that he has done on behalf of his constituency.
    Mr. Speaker: Mr. Hooley to ask question No. 2.
    Mr. Hooley: No. 2, Sir.
    Hon. Members: Stand up.
    Mr. Speaker: I think that the hon. Gentleman called his question.
    Mr. Latham: On a point of order, Mr. Speaker. Is it not usual for an hon. Member to stand up when he addresses the Chair?
    Mr. Speaker: Yes, it is.

    Malaysia
    Mr. Hooleyasked the Secretary of State for Defence if he will take steps to end the provision of defence training to Malaysia.
    The Under-Secretary of State for the Armed Forces (Mr. Jerry Wiggin): No, Sir.
    Mr. Hooley: I am sorry, Mr. Speaker, that it is necessary to shout in the Chamber, but you can hear the racket being made by hon. Members on the Conservative Benches.
    Is the Minister aware that we have military commitments not only to Malaysia, but to about 30 countries around the world? Is he satisfied that we can honour those commitments without becoming involved in a fracas such as occurred in the South Falklands?
    Mr. Wiggin: The figure is 80, not 30, and the answer is "Yes".
    Mr. Adley: Will my hon. Friend be more forthcoming in defence of our relationship with Malaysia? Does he accept that, given the threat posed to the whole region by the Soviet Union and its Vietnamese acolytes, it is essential to do whatever we can to maintain democracies in that region, particularly Malaysia, which have long traditional ties of friendship with Britain?
    Mr. Wiggin: Our defence relationship with Malaysia has long been friendly. Naturally, we regret that the Malaysian Government have temporarily made competition more difficult for British firms, but our underlying relationship remains good.
    Mr. Christopher Price: If we are to maintain defence commitments with countries such as Malaysia, should not the Government speak out against the three executions which are scheduled to take place in Malaysia on Thursday of this week and which cannot be justified in any way?
    Mr. Wiggin: As the hon. Gentleman well knows, that is a matter for my right hon. Friend the Foreign Secretary.

    HMS "Invincible"
    Sir Victor Goodhewasked the Secretary of State for Defence whether he is now in a position to make a statement about the future of HMS "Invincible".
    Mr. Duffyasked the Secretary of State for Defence if he will make a statement on the size of the carrier force and the future of HMS "Invincible".
    The Secretary of State for Defence (Mr. John Nott): I have informed the Australian Government that we wish to retain HMS "Invincible", and the Australian Defence Minister is now communicating our wishes to his colleagues in the Australian Cabinet.
    Sir Victor Goodhew: Is my right hon. Friend aware that even those who were not critical of his recent statement on defence will welcome this indication of the Government's decision to maintain three aircraft carriers, which we hope will continue for the indefinite future? When the transaction is completed, will he encourage the Australian Government to order a British aircraft carrier with Harrier aircraft?
    Mr. Nott: I shall obviously encourage the Australian Government to order more defence equipment from Britain. I had very useful talks with the Australian Defence Minister here a week or two ago. I hope to hear from him again shortly.
    Mr. Duffy: Will the Secretary of State confirm that three aircraft carriers will be in service until HMS "Ark Royal" becomes available in 1985? Has he yet estimated the effect of the announcement to retain HMS "Invincible"
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    on the planned capacity at Portsmouth dockyard and on the number of redundancies among not only dockyard but naval personnel?
    Mr. Nott: Recently, I announced that we would publish a White Paper in the autumn. In it we shall, of course, give the results of our consideration of naval numbers and of the future size of the dockyards following our reassessment of the ships that need to be repaired as a result of the Falklands campaign. At present, our plan is that there should always be two aircraft carriers operational. That means that we would need a third aircraft carrier in reserve, so that when one of those carriers is due for its first refit in the 1990s—HMS "Invincible" would be due for a refit in the 1990s—there would be two carriers operational in the Fleet.
    Mr. Mike Thomas: Will the right hon. Gentleman give a thought to those of my constituents who built HMS "Invincible"? Will he consider a further through-deck cruiser order for the Tyne shipyards? In addition, will he step in and stop this humiliating public Dutch auction over the "Atlantic Conveyor" and give the men the work that they deserve? Is he aware that unemployment in that area exceeds 30 per cent.?
    Mr. Nott: I am very well aware that Swan Hunter is short of work at the moment. If possible, we would be prepared to make some funds available from the Ministry of Defence budget to change the design of any replacement for the "Atlantic Conveyor", so that it could be used as a useful reserve asset for military purposes. These matters are under discussion. I have no doubt that my right hon. Friend the Secretary of State for Industry will wish to say more about this issue in due course.
    Mr. Churchill rose—
    Mr. Speaker: Order. I allowed the Secretary of State to answer, but it was a very different question from that on the Order Paper.
    Mr. Churchill: I congratulate my right hon. Friend on the decision to retain HMS "Invincible". However, will there be three aircraft carriers in the active Fleet, or is one of them to be placed in reserve? Is the cost of retaining HMS "Invincible" to come out of existing planned defence expenditure, or has the Treasury shown a willingness to chip in?
    Mr. Nott: As my hon. Friend knows, the Treasury is always helpful in such matters, but it is a little premature to decide how to finance the retention of HMS "Invincible". We shall have to give further attention to that in the autumn. We intend to have two, not three, aircraft carriers operational in the Fleet. The third aircraft carrier will have a standby capacity to ensure that we always have two carriers available in the Fleet when one of them is undergoing refit and to guard against the possibility of an accident.
    Mr. John Silkin: The Secretary of State has rightly been careful to say that he has told the Australian Government that we want to retain HMS "Invincible", but he has been equally careful not to tell us the Australian Government's reply. Will he here and now undertake to give us a replacement if the Australians decide to keep HMS "Invincible"?
    Mr. Nott: The right hon. Gentleman would agree that Mr. Malcolm Fraser's offer during the Falklands crisis to

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    allow us to keep HMS "Invincible", if we so wished, was extremely generous and helpful. I would rather leave the matter there for the moment. The Australian Cabinet knows of our wish to retain HMS "Invincible" and I do not foresee any problems in that regard. However, I am awaiting a communication on this subject from Mr. Sinclair.
    Mr. Silkin: Obviously I do not want to prolong the issue, but did the Secretary of State see the statement in the Australian Free Press—I think, on the day that Mr. Sinclair came to London—in which Mr. Sinclair said that he wanted to retain HMS "Invincible"?
    Mr. Nott: I have not seen the Australian Free Press. If that is what that newspaper said on the day that Mr. Sinclair came here, it predates our discussions on the subject.

    Adventure Training Scheme
    Sir William van Straubenzeeasked the Secretary of State for Defence how many young people have so far taken part in his Department's adventure training scheme.
    Mr. Nott: So far 2,295 young people have taken part in our youth adventure scheme.
    Sir William van Straubenzee: In view of that encouraging figure, will my right hon. Friend congratulate the Service personnel who played a part in a remarkable initiative, which must have given great pleasure and constituted a great challenge to many young people? Will my right hon. Friend rest assured that there is widespread support for it and that it is disapproved of only by a few unrepresentative Left-wingers?
    Mr. Nott: I thank my hon. Friend for welcoming the scheme. I understand that it is going extremely well. The vast majority of young people who have attended the courses have gained great benefit from them. As my hon. Friend said, it was an extremely imaginative and useful gesture on the part of the Services to arrange such a series of courses this summer.
    Mr. McNamara: The right hon. Gentleman will be aware that I am visiting HMS "Raleigh" tomorrow to look at the scheme. How many young people who are not members of cadet corps have taken part in the courses, how many of them are unemployed, and what is the breakdown of the sexes? At the end of the scheme, will the right hon. Gentleman produce a full report so that the House and the country can decide whether they would like to see such a scheme again?
    Mr. Nott: It would be useful to produce a summary of what the young people felt about it and how it went at the end of the season. That is a good idea and I shall certainly do that.
    The hon. Gentleman asked about the number of young people taking part in the course who are on the unemployment register. We have advertised it widely in areas of the country where we do not normally recruit many people for the Armed Services. We have tried to give it as broad a coverage as possible. It has gone well beyond those who are interested in the cadet services. Therefore, it involves a broad span of people. We want to make it as wide as possible.

    Falkland Islands
    Mr. Dubsasked the Secretary of State for Defence if he will publish a White Paper assessing the defence lessons from the Falkland Islands operation.
    Mr. Nott: I have already informed the House that I shall be publishing a White Paper on the conclusions of our studies into the conflict in the South Atlantic and what these imply for the future.
    Mr. Dubs: Will the Secretary of State ensure that the published conclusions are as full and frank as possible and that the argument that certain things must be kept secret will not prevent the House from knowing what did happen?
    Mr. Nott: I shall make the White Paper as full and as frank as possible. However, there will always be a number of highly classified aspects to equipment performance. I shall, of course, be as full and frank as possible. I know that the reports, when we have them, will be of great interest to the House.
    Sir Paul Bryan: Will the White Paper contain an assessment of the role of the Merchant Navy in the Falklands operation and draw relevant conclusions as to the size and composition of the future Merchant Navy?
    Mr. Nott: As part of our studies we shall consider the part played by the Merchant Navy. In particular, we shall consider the enormously valuable way in which we were able to convert Merchant Navy ships for use in a military role. That will certainly form a part of the White Paper. I do not think that we shall be able to draw any particular conclusions about the size of the merchant fleet. I am in favour of the largest possible Merchant Navy for Britain, but, in the last resort, its size does not lie within my control.
    Mr. Dalyell: Does the Secretary of State recollect that from 21 April, when I was given an invitation to meet the Prime Minister personally in the Tea Room—an invitation that she gave to every Member of Parliament—until 9 June when I specifically raised the issue with the Foreign Secretary at Question Time, at c. 193, I nagged Ministers about the activities of Aerospatiale Dassault? Has the right hon. Gentleman studied the report from Isabel Hilton in The Sunday Times that Monsieur Hervé Colen and his team were in Argentina giving their expertise on the fusing and computer technology which alone can launch an Exocet from the wing of an aircraft? Does he understand that those of us who have talked to Isabel Hilton believe that her story is true? What are the British Government doing about the French assurances that they were giving every help to the British cause?
    Mr. Nott: From my personal experience, I can tell the House that the French Government were extremely helpful to Her Majesty's Government throughout the Falklands crisis. They went out of their way to give us every assistance as an ally. I have noted the particular allegations in The Sunday Times. We have no independent evidence that the allegations are correct, but I understand that the French Government are holding an urgent inquiry into those allegations. If they were to be true, I believe that the French Government would deplore them as much as ourselves.
    Sir Timothy Kitson: Is my right hon. Friend aware that when the Select Committee on Defence was recently

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    in Washington and the Far East, enormous interest was expressed in the equipment used by the British forces in the Falkland Islands? Bearing in mind that memories tend to be rather short, is he aware of the need to produce a report speedily?
    Mr. Nott: I am aware that our companies producing defence equipment are anxious for the earliest possible information on the manner in which their equipment performed. Within the next week or two we shall be sending each individual manufacturer a full report on his equipment. We are considering a wider report, but many of these matters are commercially confidential to the firms that produce the equipment. We are in the process of providing as much information as we can to assist British industry. The Select Committee on Defence can play a useful and important role in this matter. We shall provide as much information as we can to the Committee on this subject.
    Mr. John Silkin: The supplementary question asked by my hon. Friend the Member for West Lothian (Mr. Dalyell) is important. I think that everyone in the House and in the country needs to be fully satisfied about the issue. Without pressing the Secretary of State too much—I well understand the points—will he undertake to examine any evidence that Isabel Hilton may care to give him and to take a personal interest in the matter rather than to leave it entirely to the French Government?
    Mr. Nott: The allegations are important, but it must be for the French Government to investigate them. With respect, it is not as easy for us to investigate the matter with French manufacturers as it is for the French Government to do so. I repeat that the French were good, staunch and extremely valuable allies during the conflict. If the allegations are proved correct, they will be as embarrassing to the French Government as they will be of great concern to ourselves.
    Mr. Dalyell: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    Frigates
    Mr. Douglasasked the Secretary of State for Defence if he will make a statement on progress made towards ordering type 22 and type 23 frigates for the Royal Navy.
    The Under-Secretary of State for Defence Procurement (Mr. Geoffrey Pattie): I have nothing to add at this stage to the statements made on these topics by my right hon. Friend the Secretary of State for Defence during the defence debate on 1 July and my hon. Friend the Minister of State for the Armed Forces during the debate on the Royal Navy on 19 July.
    Mr. Douglas: We have all read those debates. Will the Minister say clearly when an order for a type 23 will be placed? Is the design study being undertaken by Yarrow intended to indicate to people on the Clyde that they have a good chance of receiving that order?
    Mr. Pattie: The hon. Gentleman referred to the type 23. As we have already said, we expect to place the order for that vessel in 1984, the design contract having already been let. As Yarrow is co-operating with us on that stage, it would obviously be a front runner for that contract.
    Mr. Jim Spicer: The House will accept that the equipment and ships to replace the Falkland losses will take some time to come through, but is it possible to place the orders in the yards because, presumably, they will be type 22?
    Mr. Pattie: This matter is at present under active consideration by my right hon. Friend. We have to take into account what has already been said on this issue and the particular lessons to be learnt from the Falklands campaign. I assure my hon. Friend that there will be no undue delay in the re-ordering process.
    Mr. Denzil Davies: As the price of a type 23 frigate will now exceed the cost of refitting a Leander type frigate, whereas originally the intention was the other way around according to the Government's figures, does that not destroy much of the case for building disposable frigates and ending mid-life modernisation?
    Mr. Pattie: No, it does not. In one case we are getting a brand new ship and in the other case we are getting a refitted older ship. I should have thought that the advantage was obvious.
    Sir Patrick Wall: Has not an undertaking been given that the two destroyers and the two frigates lost in the Falklands will be replaced? When will the replacements be ordered?
    Mr. Pattie: My right hon. Friend has said that the replacement would not necessarily be on a like for like basis, but that all the equipment that has been lost would be replaced.

    Falkland Islands
    Mr. Lathamasked the Secretary of State for Defence whether he will make a statement on the progress of engineering and other reconstruction work by Her Majesty's forces in the Falklands.
    Mr. Blaker: In conjunction with the Falkland Islands' public works department, the Royal Engineers have been undertaking the necessary "first aid" repairs to restore water and electricity supplies in Port Stanley. Houses and roads have also been repaired and emergency work has been completed on the airfield. Although the main task of the Royal Engineers is to support the Armed Forces, they will continue to provide assistance to the Falkland Islands Government wherever possible.
    Mr. Latham: I realise that there are difficulties, such as minefields, but does my hon. Friend accept that the British people expect their troops to be out of tents and decently housed as soon as possible? Will he make sure that every possible step is taken by the Ministry of Defence to provide the necessary logistic support to get the construction work done as soon as possible?
    Mr. Blaker: Yes, indeed. I give my hon. Friend and the House that assurance. It is right, on the other hand, to recognise that there are great difficulties facing the Royal Engineers in the Falklands, especially over accommodation. There are three times as many troops as civilians. There are only 350 houses in the whole of Port Stanley. Most of our troops, as my hon. Friend knows, are already under hard cover of some kind. There are 500 troops in tents at the airfield, where, unfortunately, there are no hard buildings which they can use. The troops have to

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    remain at the airfield to protect it and to look after the Harriers, which are necessary for the defence of the Falklands. We shall get on with the job as soon as we can.
    Mr. Crawshaw: Has any thought been given to the provision on a temporary basis of inflatable buildings, which are easily transportable and which have proved effective under similar circumstances?
    Mr. Blaker: We have considered that suggestion, but weather problems on the Falklands lead us to believe that it is not necessarily the best solution.
    Mr. Foulkes: Why are the Government not pursuing reconstruction with the same diligence as they pursued the war? Is it not the case that this illustrates the logistic difficulty of supplying any equipment to the islands without the assistance of the Government of Argentina?
    Mr. Blaker: No. I do not accept the latter proposition. We are pursuing the logistic problems with the utmost zeal. They are very difficult. We are giving first priority to getting the airfield open and lengthened so that we can provide fast jets for the protection of the Falkland Islands.
    Sir Hugh Fraser: With great respect to the public works department of the Falklands, which consists of one and a half persons, I should have thought that there was a case for moving in some kind of task force to see that the work is done effectively and quickly. Does my hon. Friend not agree that outside contractors should be engaged to build the airfield as quickly as possible?
    Mr. Blaker: We have there the matting that is necessary to lengthen and strengthen the airfield. That work can be done by the Royal Engineers. My right hon. Friend mentioned a task force. There are nearly 1,000 Royal Engineers on the Falkland Islands. I think that they amount to a task force.
    Mr. McNamara: There is no lack of expertise in the United Kingdom on the creation of prefabricated buildings. Many people who are unemployed could supply that accommodation easily and quickly. We understand that temporary airport extensions will be provided by the use of alloy matting. When will a decision be made about the permanent extension of the runway? Is there any possibility of a second runway being built? Will these matters be the responsibility of the Minister for Overseas Development?
    Mr. Blaker: The shape and length of the permanent airport are matters for my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs. The revised Shackleton report will no doubt be relevant.

    Fisheries Protection
    Mr. Andrew F. Bennettasked the Secretary of State for Defence what discussions his Department has had about new methods of maritime patrol for fishing protection; and whether these discussions included plans to purchase or use Coastguard 748s.
    Mr. Pattie: The resources employed on offshore patrolling, including fishery protection, are kept under continuing review in consultation with other interested Departments. My Department has no plans to procure aircraft for the task additional to those already committed to it.
    Mr. Bennett: Will the Minister accept that the 748 in its coastguard version is an excellent aircraft, that many foreign Governments are interested in purchasing it and that if the British Government were to give a lead that would set the seal of approval on the aircraft? Is it not ironic that the Government seem to be enthusiastic about encouraging other countries to buy weapons of destruction, but give little support to aircraft such as the 748, which has a purely defensive role?
    Mr. Pattie: The aircraft in question has been extremely succesful. More than 300 have been sold around the world. The hon. Gentleman will be aware that the Ministry of Agriculture, Fisheries and Food is carrying out an evaluation of the aircraft in the role that he has described. The hon. Gentleman should address his question to that Ministry to see whether it is interested in acquiring the aircraft.
    Mr. Bill Walker: Does my hon. Friend agree that it is expensive to use the Nimrod maritime aircraft for fishery protection and surveillance work? Is he aware that the experience of the Royal Hong Kong Auxiliary Air Force shows that the operating costs of a smaller twin-engined aircraft make it a viable proposition? Does he agree that it can also be operated by auxiliary and reserve personnel?
    Mr. Pattie: As the bill for this sort of operation is being paid by the Ministry of Agriculture, Fisheries and Food, that is precisely the kind of consideration that it will no doubt bear in mind.
    Mr. McNally: Is this not a case where Government procurement can lead the way? As the Minister says, the aircraft has proved to be versatile and the technicians at Woodford have found another task for it to perform. If, however, it is to achieve the necessary sales, the Government will have to give a lead through their procurement policy.
    Mr. Pattie: I am familiar with that argument. It contains much force. The Government include the Ministry of Agriculture, Fisheries and Food, which is responsible for carrying out the maritime surveillance role.

    Nuclear Defence
    Mr. Trippierasked the Secretary of State for Defence if his Department will produce a film to explain the nuclear defence strategy of Her Majesty's Government.
    Mr. Blaker: We have already provided a short audiovisual presentation entitled "A better road to peace", which is available through the Central Office of Information, and we hope to have a film ready later this year. The aim of these is to explain why we need to possess nuclear weapons, how our defence policies preserve the peace and why we believe that multilateral and not unilateral disarmament is the right course to follow.
    Mr. Trippier: Is my hon. Friend aware that the news that he has announced will be warmly welcomed by the vast majority of people, who recognise that Britain's nuclear capability is solely to maintain peace? A film such as that will correct the impression given by the CND and like-minded organisations which only serves to confuse and mislead the public.
    Mr. Blaker: I agree with my hon. Friend that there is a great deal of misinformation in this area. It is the primary purpose of these two productions to correct that misinformation and to give the true facts.
    Dr McDonald: Has the Minister seen the recent statement by an eminent American nuclear physicist, Dr. Richard Garwin, who denounced the Trident plan as unnecessary, useless and unrealistic? How can the Government justify such a plan for school children or anyone else? As Trident 2 is only in the research and development stage, how can the Government justify the claim in their recent White Paper about the cost of the Trident project?
    Mr. Blaker: The Government justify the Trident programme on the same basis as the previous Government justified the Polaris programme. I commend to the hon. Lady the excellent full-page advertisement issued in 1969 by her right hon. Friend the Member for Leeds, East (Mr. Healey) extolling the merits of Polaris and nuclear deterrence.

    Royal Ordnance Factories
    Mr. Strawasked the Secretary of State for Defence when he hopes to introduce legislation regarding the future status and organisation of the Royal ordnance factories.
    Mr. Pattie: It is the Government's intention to introduce legislation as soon as the parliamentary timetable allows to enable the Royal ordnance factories to operate under the Companies Acts. I cannot at present forecast when this legislation will be introduced.
    Mr. Straw: Is the Minister aware that his reply is very unsatisfactory, particularly to employees of the Royal ordnance factories, who, year after year, have to accept uncertainty and procrastination while the Government decide what to do? Will legislation be introduced next Session? When will we see further details of the privatisation plans which he promised nine weeks ago would be produced as soon as possible?
    Mr. Pattie: I cannot anticipate the content of the Queen's Speech on the legislative programme. We do not wish to prolong any more than is necessary any uncertainty in the minds of employees. That is why we made the recent announcements about the future of the Royal ordnance factories. We believe that the future of those employees would be better served if they were part of a viable and commercial organisation.
    Sir Charles Fletcher-Cooke: Is my hon. Friend aware that manual workers at the Royal ordnance factory at Blackburn in my constituency welcome the opportunities afforded by the new freedom that this legislation will give them, and also the possibility of more capital and more opportunities for selling their excellent product?
    Mr. Pattie: I welcome what my hon. and learned Friend has said. He obviously agrees with me that the work force can see the benefits of the proposed reorganisation.
    Dr. McDonald: Will the Under-Secretary assure the House that the consultative document on terms and conditions for employees under the new Companies Act scheme will be published on target and that it will contain a no-detriment clause? Does he agree that it is high time
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    that the employees of these factories were decently treated by the Government, bearing in mind that many of them worked overtime to produce ammunition for the Falklands war, and that some of those who so worked were thanked by redundancy notices?
    Mr. Pattie: The intention is to publish the consultative document in the near future, and we shall notify the hon. Lady when it is available. It is not the intention to prolong the uncertainty in the minds of employees. I take this opportunity of once again recording our appreciation of all their efforts during the Falklands conflict.

    Trident
    Mr. Cryerasked the Secretary of State for Defence if he will make a statement on the timetable for work on Trident.
    Mr. Nott: Planning and design work on Trident is under way to allow its introduction into service in the mid-1990s.
    Mr. Cryer: Does the Minister accept that the Trident programme represents an escalation in the nuclear arms race from 48 missiles per submarine to over 200, that it will not add to our defence capability in any sense, but will endanger the nation, and that is typical of a Government who put warmongering and belligerence before peace and reconciliation, and of a Prime Minister who wants to turn the Church of England into part of the propaganda machine for the war effort of the Tory Party?
    Mr. Nott: A desire to defend one's country is not warmongering, and the possession of a nuclear deterrent, to which all Governments have subscribed since the war, is an essential part of our defence. Trident is not an escalation of the arms race.
    Mr. Cryer: It is.
    Mr. Nott: When it is introduced it will form roughly the same proportion of the total number of missiles in service as Polaris represented when it was introduced.
    Mr. Robert Atkins: Is my right hon. Friend satisfied that British companies are receiving a fair share of whatever offset agreements have been arranged? If he is not satisfied with the terms of the arrangements, will he make every effort to encourage the Americans to allow more British participation in this important project?
    Mr. Nott: I am satisfied that we are making every opportunity available to British industry to compete in this programme. The Trident programme is well advanced in the United States, and British firms will have to fight hard to obtain subcontracts. My hon. Friend the Under-Secretary of State for Defence Procurement has discussed this matter in Washington recently and the Americans have changed the "Buy American" rules to make it possible for British industry to compete. The opportunities are there, and I believe that British industry will be successful in obtaining some subcontracts.

    Falkland Islands
    Mr. William Hamiltonasked the Secretary of State for Defence when he expects to be able to estimate the total annual cost of maintaining Her Majesty's forces on the Falkland Islands.
    Mr. Timothy Smithasked the Secretary of State for Defence if he will make a statement on the continuing arrangements for the security of the Falkland Islands.
    Mr. Nott: A number of options are currently being considered for the long-term defence of the Falkland Islands. No decisions have yet been taken, and it is, therefore, too early to say what the annual cost will be.
    Mr. Hamilton: Do Her Majesty's Government intend going it alone in providing a fortress in the South Atlantic? Did the Secretary of State see the estimate in a national newspaper a week or two ago that £600 million a year would be needed to sustain such a fortress? How many hospitals and houses could be built in this country for that sum?
    Mr. Nott: I have seen many estimates in the press, but the hon. Gentleman will no doubt feel that it is just as worth while to defend 2,000 British subjects from aggression as it is to defend a greater number. That is what we intend to do.
    Mr. Michael Marshall: With regard to the future cost of the defence of the Falklands, will my right hon. Friend consider the overall role of British defence equipment and the way in which we shall need to select those items which have proved most effective in the Falklands? Will he express his appreciation of that equipment and of all those who work in our defence industry?
    Mr. Nott: I shall do as my hon. Friend asks. Our first assessment of the equipment used in the Falklands was that it had performed admirably. It would be invidious to single out particular weapons, but we shall shortly be advising industry on the performance of individual weapon systems, so that they can be sold overseas.

  PRIME MINISTER

    Factory Closures
    Mr. Campbell-Savoursasked the Prime Minister how many hon. Members she has seen on matters relating to factory closures since she last answered oral questions; and how many jobs were expected to be lost in the closures mentioned.
    The Prime Minister (Mrs. Margaret Thatcher): I have had no such meetings since 22 July.
    Mr. Campbell-Savours: As the right hon. Lady's industrial strategy unfolds and more and more companies and factories close, will she take time off during the coming recess to visit not only the winners in British industry, whom she tells us she has visited over the past months, but also the losers in the areas of greatest industrial recession? Will she come to the Northern region and speak to industrial managers who want to know why she has rejected the advice of the CBI, which demanded that £1·8 billion be pushed into the economy, because it knows that that is the only way to get British workers back to work?
    The Prime Minister: I have no immediate plans to visit the North-West, although during the recess I shall, as usual, be visiting Scotland. The CBI wants, above all, as was reiterated today, to see a decrease in interest rates. We cannot have that if we add £1·8 billion to the PSBR.
    Mr. Grylls: Is my right hon. Friend aware that there was a gain of over 14,000 new small businesses last year
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    after allowing for those that closed? Does she agree that that success is in no small measure due to the changes in the law introduced by the Government to encourage the start up of businesses?
    The Prime Minister: I confirm what my hon. Friend has said. The Under-Secretary of State for Industry has been doing an analysis of the VAT registrations and the figures for 1981 show that more companies were born than went out of business.
    Mr. Foot: I understand that the right hon. Lady received representations this morning from trade unions and others about the replacement for the "Atlantic Conveyor". Does she agree that it would be a disgrace if this replacement were built other than in a British shipyard? Will she give a clear assurance that the Government will take steps to ensure that the ship is built in a British shipyard?
    The Prime Minister: As the right hon. Gentleman will be aware, the Government share the view that the replacement for the "Atlantic Conveyor" should be built in a British shipyard. We have been active for some days to try to bring that about on a reasonable basis. As I said to those who came to see me this morning, the Government are playing a considerable part in trying to bring that about. We hope that British Shipbuilders and its work force will do all that they can to reduce costs, which are extremely important if we are to continue to receive orders. I believe that Cunard will play a patriotic part if we can narrow the gap in costs.
    Mr. Foot: I press the right hon. Lady to go further, particularly in view of the somewhat subdued and equivocal response of the Secretary of State for Defence, who did not seem to be clear about the matter. The Opposition do not want the House to depart for the Summer Recess without having this matter properly settled, which wi11 be in the interests of the workers in the shipyards. Does the right hon. Lady appreciate that when she talks about productivity she is comparing our productivity with that of Korea? Is she claiming that on that account we might allow the order to go to Korea? Will she undertake to settle this matter in favour of British shipyards before the House rises?
    The Prime Minister: I strongly believe that the "Atlantic Conveyor" replacement should be built here. That is why the Government have been active and why the order was not placed earlier with the lowest bidder. Considerable subsidies have been offered, but in my judgment it is reasonable to have what I call a three-part package: first, aid from the Government on the best possible basis; secondly, as much constructive help as we can get from British Shipbuilders and the work force—and I believe that they are prepared to co-operate—and, thirdly, recognition of the problem by Cunard and Lord Matthews who, I am sure, if we can all work together, will take the patriotic view. It is reasonable to ask all the parties to co-operate.

    Engagements
    Mr. Delwyn Williamsasked the Prime Minister if she will list her official engagements for Tuesday 27 July.
    The Prime Minister: This morning I had meetings with ministerial colleagues and others, including one with

    919
    representatives of the Trades Union Congress. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Williams: Is my right hon. Friend not dismayed by the decision of the chief constable of Derby to accept 12 coloured youths into the service, without the normal minimum of four O-levels? Does she realise the righteous indignation of young people in my constituency and the adjacent Midlands who have eight or more O-levels and some A-levels and still cannot get into the service? Will she affirm that we are still the party of equal opportunity, and that that opportunity should be based on merit?
    The Prime Minister: I understand that the suggestion of lowering either physical or education standards to recruit members of the ethnic minorities to the police was rejected by Lord Scarman. Nevertheless, he recommended that positive steps should be taken to reduce disproportionate obstacles to recruitment. The Home Office is considering the matter and a report will be produced shortly. I also understand that chief constables already have a discretion to recruit otherwise suitable candidates who are below the height limit, but I firmly believe that we should not reduce educational standards for any group.
    Mrs. Shirley Williams: Has the Prime Minister seen the report of the Institute of Economic Affairs, in which it is suggested that there might be as many as 5 million unemployed at the next election? Will she repudiate that report and say that it is as much a part of patriotism to recreate hope among young people in the desolated regions of this country who are currently unemployed as it is to support what our soldiers did in the Falkland Islands?
    The Prime Minister: The report is not mine in any way. I have seen only reports of a report of an article that was written by one person. The Government are doing all that they can to help young people. That is why we have such an excellent scheme to help them to get employment. Beyond that, we have to keep industries competitive and produce goods that British people will buy in preference to the increasing imports that are now coming in.
    Mr. Allen McKay: Is the right hon. Lady aware of the agricultural equipment company in my constituency which won the Queen's Award for Industry—Newton and Chambers Engineering? Does she recall how she congratulated the workmen? Does she realise that those workmen are now redundant and that many other industries in the valley have gone down? Will she send sympathy to the people who have lost their jobs as a result of her Government's policy? When will they see the light at the end of the tunnel about which the right hon. Lady keeps talking?
    The Prime Minister: The hon. Gentleman knows that the agricultural equipment industry is in difficulty, not only in this country, but in almost every industrial country in the Western world. That is part of the problem. We must get as large a share of the market as we can. The Government are doing as much as they can to reduce costs. The national insurance surcharge reduction announced in the Budget will take effect next week, and that will be equivalent to a cost reduction of £640 million for British industry.
    Mr. Beaumont-Dark: Will my right hon. Friend express regret that certain Members of the Opposition have
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    chosen to make sweeping allegations about police corruption where many of us think it does not exist? Does she agree that it is time that people who make such allegations either prove them or shut up, because the police force does a good job and needs help, not blame, all the time?
    The Prime Minister: I agree with my hon. Friend. If allegations, supported by evidence, are to be made, they should be sent to the Attorney-General.
    Mr. Greville Jannerasked the Prime Minister if she will list her official engagements for Tuesday 27 July.
    The Prime Minister: I refer the hon. and learned Gentleman to the reply that I gave some moments ago.
    Mr. Janner: Is the Prime Minister aware that today 25,407 people are registered as unemployed in Leicester, many of them youngsters who left school a year ago and who have never had a job? What will she do to help this great city, which has achieved unparalleled commercial success in the past, to come out of the worst recession that it has ever had?
    The Prime Minister: First, we shall keep inflation coming down. That is extremely important. It is being reduced, but it is still twice the rate of inflation in Germany. It is extremely important to keep wage claims well within the increases in productivity. We are keeping interest rates on a downward trend. We are also making certain that the deficit does not rise, because if it did there would be a danger that interest rates would rise. We are also reducing the national insurance surcharge as from next week. Beyond that, it is for management and work people to produce goods which their fellow citizens will buy in preference to overseas goods.
    Mr. Thornton: Has my right hon. Friend had an opportunity to read in The Times today the news of the opening of the new container terminal in the north dock at Garston in my constituency? Does she agree that this is a marvellous boost for Merseyside and that it shows what can be done with effective management and a co-operative work force? Will she join me in wishing them well?
    The Prime Minister: I agree that it is a wonderful boost for Merseyside, and I wish both management and work force prosperity in the future.
    Mr. Barry Jones: Has the Prime Minister noted the intense disappointment in areas of high unemployment at the announcement about Nissan? What will she attempt to do about the project on her visit to Japan? Is it not an indictment of her Administration that, with so much unemployment, so many people in Britain are seeking the Nissan development?
    The Prime Minister: The hon. Gentleman will have seen the announcement by Nissan that it has not yet made a final decision but has agreed to defer it. It is, of course, a matter for the company to decide. The hon. Gentleman will also have seen the changes that we have announced on hire purchase, which I hope will help our car industry. I hope, also, that any increases in purchases will be of home-produced cars, not of cars from overseas.
    Mr. Tapsell: Has my right hon. Friend noted the growing anxieties that are being expressed about the stability of the international commercial banking system? Before the annual general meeting of the International

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    Monetary Fund starts in Toronto on 6 September, will the Government put forward proposals to the world's central banks to encourage even greater co-operation and stricter supervision of their commercial banks?
    The Prime Minister: I am very much aware of that and of the danger that any default would produce, not only for one group of banks in one country, but, by a domino effect, for a number of banks. We are very much aware of what is happening, and the matter is frequently discussed at international meetings. We shall, of course, keep the matter very much in mind and make any proposals that we think fit at the time. It is vital not to lend too much, and undoubtedly a number of banks have been overlending, although not in this country.
    Mr. Dormandasked the Prime Minister if she will list her official engagements for 27 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Dormand: I support my right hon. Friend the Leader of the Opposition in urging the Prime Minister to give further consideration to meeting the additional costs involved in having the "Atlantic Conveyor" replacement built in Britain. Does the right hon. Lady realise that there is overwhelming support in Britain for such a decision? In view of the fine phrases that the right hon. Lady used only a few weeks ago about our ships during the Falklands
    922
    crisis, what possible justification can there be for the Government's narrow-minded and niggardly attitude, particularly when the Tyneside workers met every demand that was made of them during the crisis?
    The Prime Minister: The Government have already offered a subsidy of 30 per cent. on the British Shipbuilders' price. That is a considerable subsidy. We are now considering what further can be done. It seems to me to be reasonable, both for the future of the shipbuilding industry, as well as to obtain that order, to ask for co-operation from all three parties involved. The Government are co-operating and will continue to co-operate, because we want that ship to be built in Britain. We look for some co-operation from Cunard, and we are entitled to look for some more co-operation from British Shipbuilders and all who supply it, particularly to reduce costs.

  Commander Michael Trestrail
  Mr. Thomas Torney: On a point of order, Mr. Speaker. I seek your guidance on an incident about which newspapers say that the House has been misled. I refer to the Home Secretary giving the impression that Commander Trestrail had been the subject of proper security clearance, whereas we now know that he had not.
  Mr. Speaker: That is clearly not a point of order. It must be pursued in some other way.

Local Government Expenditure
3.31 pm
The Secretary of State for the Environment (Mr. Michael Heseltine): With permission, Mr. Speaker, I should like to make a statement on local authority expenditure.
The Government's overriding objective is to reduce the level of current spending by local authorities and thus to secure the low level of rate increases that are now possible and desirable. For 1981–82 I can tell the House that I shall be tabling a supplementary report later this week to reduce by £201 million the total of grant available for distribution. This holdback will fall on those authorities that did not meet the Government's targets in 1981–82. For 1982–83 it is also necessary to reduce grant for overspending authorities.
Authorities will this week be sent details of the proposed grant reductions, which on the basis of their budget returns will total £312 million. I propose to make a supplementary report in the autumn.
For 1983–84 I am now giving local government the earliest possible indications of the Government's plans for local government spending and our proposals for the next year's rate support grant settlement. This will give all local authorities ample time to plan their budgets now and make what changes are necessary.
As in 1982–83, I propose to give expenditure guidance to individual local authorities. There will be two basic rules. For those authorities which are budgeting to meet their targets there will be a 4 per cent. increase on their budgets for this year. After allowing for a difference of 1 per cent. between those budgets and likely outturn, that means an effective 5 per cent. increase on this year's cash.
For the remaining authorities, we shall only assume that extra 5 per cent. on the targets that we set for this year. I am today sending to local authorities exemplifications for each authority together with a memorandum explaining how we propose to calculate the expenditure guidance figures. Copies are being placed in the Library of the House.
The targets represent an increase in the public expenditure provision of 5 per cent. or £900 million to £19·5 billion. In aggregate, this is 2 per cent. more than provided in local authorities' budgets for 1982–83. It is probably 3 per cent. more than outturn, allowing for the possibility of a 1 per cent. difference between budget and outturn. The figure of £19·5 billion does not reflect the Government's view of what ought to be spent. It rather reflects the problems of securing economies faster than local government has ever achieved.
Accordingly, I propose that the current expenditure total, on which grant-related expenditure assessments will be calculated, should be substantially lower at £18,800 million. That is £800 million above the total current expenditure component of GREAs for 1982–83. Authorities that exceed those guidance figures will risk a more severe loss of grant than in this year.
The rate levels in each authority depend not only on the expenditure levels but also on the level of grant. I propose that the amount of aggregate Exchequer grant should be £11·8 billion on the basis of local authorities spending at the level of their guidance figures. This is over £300 million or almost 3 per cent. more in cash than in the 1982–83 settlement. Our present estimate is that the
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aggregate Exchequer grant will be about 53 per cent. I shall announce details of grant distribution arrangements and of the grant abatement scheme later in the year.
I shall be meeting representatives of local government in the Consultative Council for Local Government Finance later today to discuss these proposals.
The decision about the level of rates is now entirely a matter for each authority. If they budget to spend within the guidance figures I have proposed, many authorities may find that they need no rate increases at all. That is the prize. With moderate pay settlements, and careful budgeting, it can be achieved.
Mr. Gerald Kaufman: Why does the right hon. Gentleman constantly make a practice of presenting figures with the deliberate intention of misleading the House? Why does he claim that he is increasing public expenditure provision for local authorities by 4 per cent. when that claim makes no provision whatever for inflation? Is it not a fact that, even on the Government's unrealistic assumptions of 4 per cent. pay increases and 7·5 per cent. price increases, what he has just announced means a cut of 2 per cent. in local authority expenditure? On realistic assumptions of pay and price increases, will there not be a reduction of 3·4 per cent. in local authority expenditure?
Why does the right hon. Gentleman pretend that he is increasing rate support grant by 5 per cent. when in fact he is cutting it by 2 per cent.—a reduction of £258 million? On the basis of this year, the reduction will be particularly bad for the inner city areas which get only 18·6 per cent. of rate support grant.
Why does the right hon. Gentleman pretend that rates will not rise? Last year he said that increases would be low and they went up by 20 per cent. This year he said that increases would be reasonable and they went up by 15 per cent.—in both cases because of his rate support grant reductions. If he proposes to blame overspending for those rate increases, may I remind him that 61 per cent. of last year's overspenders were Tory councils and 56 per cent. of this year's overspenders are Tory councils? When Conservative Members cheered the penalties that he is bringing in for overspending just now, they were cheering penalties that he is imposing on Tory councils in their constituencies.
Mr. Geoffrey Dickens: We are very fair.
Mr. Kaufman: The hon. Gentleman has a reputation for appreciating what is fair.
Is it not a fact that in the past three years the Secretary of State has cut rate support grant as a proportion of expenditure from 61 per cent. to 53 per cent. and that in cash terms he has cut rate support grant by more than £2 billion? Has not the Secretary of State's baneful meddling in and harassment of local authorities meant, and will it not continue to mean, record high rates, worse services and over 100,000 job losses to add to the present total of 3¼1/4 million? The right hon. Gentleman has inflicted unparalleled damage on our system of local government. We must hope that this rate support grant settlement will be his last.
Mr. Heseltine: The right hon. Gentleman should be careful when accusing me of misleading the House when he tries to pretend that the cash facilities that I have

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announced, both in grants and targets, are reductions. We are providing more cash for local authorities next year, not less. The entire basis of his case has been to assert harshness when in reality he knows as well as I do that over the past few years there has been one of the best pupil-teacher ratios ever in local government. The police force now has one of the largest strengths that it has ever had.
When the right hon. Gentleman refers to rate increases and suggests that they arose from the Government's decisions he fails to say that in the shire counties the Conservative-controlled authorities have made rate increases of about 10 per cent. while providing the same services whereas Labour-controlled authorities have made rate increases of about 30 per cent. That proves beyond a peradventure that it was the decision of the Labour Party and its supporters in local government that created high levels of rating.
It seems that the Labour Party cannot understand that, when unemployment is created as a result of high rate increases because of high local authority expenditure policies, that situation can be reversed only if its supporters in local government will do what others have done in Conservative-controlled authorities and which has been proved to be possible.
Mr. Charles Morrison: As it is my right hon. Friend's continuing and understandable desire that local authorities should limit their expenditure, will he give further consideration to reducing the number of local authority mandatory responsibilities? Some local authorities have been cutting consistently since 1974 and they could cut more and more easily if they had wider discretion on spending rate income and grants.
Mr. Heseltine: I understand my hon. Friend's anxiety. However, he will be aware that there are many authorities in each class of authority, with perhaps the exception of metropolitan counties, which are fulfilling their statutory duties within the Government's guidelines. That proves that it can be done.
Mr. Christopher Price: Some local authorities have been told by inspectors of the Secretary of State for Education and Science that their education provision is dangerously low and might be breaking the law as passed by the House. How are those authorities to face the dilemma of trying to please the Secretary of State for Education and Science in fulfilling their statutory responsibilities and trying to fulfil the arbitrary guidelines of the Secretary of State for the Environment? What are they to do?
Mr. Heseltine: Obviously the question is largely for my right hon. Friend the Secretary of State for Education and Science.
Mr. Price: No, it is solely for you.
Mr. Heseltine: It is obvious from an examination of the reports that substantial improvements can be achieved in teaching standards and the quality of education without increasing the cost of education.
Mr. Stephen Ross: I congratulate the right hon. Gentleman on making his views known to us at an early stage. However, does he accept that a cut of about 3 per cent. in central Government rate support grant for local authorities next year, when coupled with a 9 per cent. inflation rate and wage settlements, which are a fact of life, of about 7 per cent for a 39-hour week, will make
926
local authorities' problems extremely difficult? Will the right hon. Gentleman accept also that in reality his announcements today will mean that cuts are bound to be made in services, some of which local authorities are obliged statutorily to provide, and that consequently the general public must expect to see cuts in social services, education and other services?
Mr. Heseltine: I am grateful to the hon. Genleman for recognising that we have tried to meet the legitimate concern of local government to be given as early an indication of our ideas as is possible. That is what we have tried to do. The hon. Gentleman's approach, which is to assume that settlements that are taking place now, often at lower levels than he has mentioned, will be reached at the same levels next year, is one which I find self-defeating and encourages the inflationary cycle. As inflation falls, there must be an ongoing process in which the level of wage increases is below the level of inflation.
Mr. Edward du Cann: I support my right hon. Friend's general objective of limiting expenditure throughout the nation and bringing it under better control. However, will he be prepared to give exceptional consideration to counties which have exceptional difficulties? I have in mind Somerset, which has suffered greatly from local government reorganisation and boundary alterations.
Mr. Heseltine: I am more than prepared to listen to my right hon. Friend's representations. However, he will understand that there are 412 authorities, all of which have special difficulties. In pursuing public expenditure constraint, it is difficult to single out one from another.
Mr. T. W. Urwin: In preparing this further harmful statement for local authorities, has the right hon. Gentleman made any estimate of how many of those currently employed in local government will lose their jobs as a consequence of his decisions? Has he taken into account the injurious effects on social services that are operated by local government as a result of this further devastating cut in local government funding?
Mr. Heseltine: I think that the hon. Gentleman will on reflection recognise that the prospect of the low rating increases that I am talking about is probably one of the greatest incentives to job creation in the area that he represents that the Government could provide. To repeat the statements of pressure groups that urge more public expenditure as a means of avoiding job losses on an unacceptable scale is to disregard the invariable difference between what people say in advance and what happens in practice.
Mrs. Angela Rumbold: Will my right hon. Friend assure the House that authorities which in the past met their grant-related expenditure targets will not be penalised in future in favour of authorities which have flagrantly overspent?
Mr. Heseltine: My hon. Friend will want to study the individual exemplifications, copies of which are available to the House. I must ask all local authorities to look for further economies in pursuit of the Government's public expenditure targets.
Mr. Clinton Davis: Will the right hon. Gentleman say how desperately deprived inner city areas—the borough that I represent is one—can

927
conceivably be helped by his announcement? Is not his real desire to see help cut for the aged and the infirm and to see help cut for the young unemployed and to add in every possible way to the burden of areas such as those which are already undergoing terrible deprivation? Are not his policies those of a miserable ideologue?
Mr. Heseltine: I am sorry that the hon. Gentleman should dismiss the largest urban programme ever as the policy of an ideologue. We are bringing more urban aid to areas such as the one that the hon. Gentleman represents than has ever been introduced by any Government in the past. He will be equally aware that for the first time since 1975 we have reversed the downward trend of capital housing allocations, to be greeted by a number of Labour authorities underspending significantly. The hon. Gentleman will realise that the best thing that we can do for the borough that he represents is to secure the rate increases there that industry can find in many Conservative-controlled authorities throughout the country.
Mr. John Cartwright: Will the right hon. Gentleman accept that the freedom for local authorities about which he spoke so glowingly is no more than freedom to choose between still further cuts in services and still further rate increases, especially in hard-pressed inner city areas where social problems are obvious? Will he confirm that cuts in rate support grant that goes to the inner city and inner urban areas more than wipe out the special help that is afforded by the urban programme, for which he has taken so much credit?
Mr. Heseltine: No, I do not accept that. A significant number of authorities of the sort to which the hon. Gentleman has referred have budgeted to ensure that they get substantial benefit from the programmes that we have on offer. If they decide to overspend on current expenditure, that carries a penalty that they know in advance. Today they know even further in advance and they will be able to budget so as not to incur a penalty. The hon. Gentleman will be aware that the Labour Government were prepared to introduce draconian cuts in local authority current expenditure and to halve the capital programme of local authorities because they found no other way of running the economy.
Mr. Michael Shersby: Will my right hon. Friend expand on his statement by telling the House how his 1981–82 supplementary report will affect the massive political advertising expenditure of the GLC?
Mr. Heseltine: The GLC has lost its entitlement to grant because its expenditure is so far above the Government's guidelines. I dare to venture the view that is commonly held that the GLC is now indulging in extravagant and unnecessary expenditure at the ratepayer's expense.
Mr. Arthur Lewis: The Secretary of State mentioned reasonable or low wage increases. As the police are to receive a 10·7 per cent. pay increase, and as the London boroughs and the GLC are confronted with the prospect of a police precept which will increase because of expenditure on Buckingham Palace security, may we be assured that the borough councils that have no say in how economies can be made will not be
928
penalised? My local authority receives no extra police assistance, but it must pay for it. Now there are to be cuts. Will the Secretary of State examine that aspect of the matter?
Mr. Heseltine: The method by which the Metropolitan Police precept is levied has not changed under this Government. I recognise that there is a problem with the Government's priorities. We have discussed it with the local authorities, especially the metropolitan counties. We bear the matter in mind and, as this is a consultative document, it will be considered carefully. The hon. Gentleman will be aware that the same position applies to the Inner London Education Authority, where substantial increases in expenditure must be faced by the London boroughs and the GLC.
Mr. John Heddle: Does my right hon. Friend agree that a large proportion of local government expenditure is in salaries and wages? Can he produce a comparison between the number of people employed per thousand population in Conservative-controlled and in Labour-controlled authorities? Does he agree that the ratepayers would get much better value for money if more ancillary services were transferred to the private sector?
Mr. Heseltine: My hon. Friend's question goes to the heart of the matter. The privatisation of refuse collection in Southend has led to the dustmen earning more money, the citizens obtaining a better service, the company making a profit and the ratepayers saving £½ million a year. As to a comparison between one authority and another, the treasurers of local government have published their own statistics which are freely available. They show beyond a peradventure that the relative difference of cost of service provision between one authority and another enables substantial economies to be made without a serious reduction in services.
Mr. R. B. Cant: Is the Secretary of State aware that even local authorities which are anxious to cut expenditure in order to get off the hook of the penalties and holdbacks are faced with logistical problems? Speaking as the chairman of an education committee, I can say that the problem of school closures is paramount. Will the Secretary of State have a word with the Department of Education and Science? We shall know nothing about the advanced further education pool, which will have an enormous impact on our finances. One cannot get rid of polytechnic lecturers at less than 12 months notice.
Mr. Heseltine: The hon. Gentleman's question is relevant to the search for cuts. The fact that it takes time to make those cuts is one reason why we now have the best pupil-teacher ratio that we have ever had in Britain. Since I have been asking for the economies, pupil rolls have fallen by 7 per cent., which is far in excess of the reduction in teachers. I shall certainly draw the hon. Gentleman's point to the attention of my right my hon. Friend the Secretary of State for Education and Science.
Mr. Anthony Grant: Is my right hon. Friend aware that the historic yardstick on which the previous rate support grant was based worked unfairly on authorities such as Harrow borough council, which tried in earlier years responsibly to restrain spending? Can that be taken into consideration? Is he further aware that in the

929
really spendthrift Socialist authorities, the lunacy still prevails whereby those who pay the rates do not have a vote and those who have a vote do not pay the rates? When will he do something about that?
Mr. Heseltine: I know of my hon. Friend's interest in the problems faced by Harrow borough council. I examined carefully the effect of the rate support grant settlements on authorities by class and the London boroughs come within that category. As to our longer-term plans for the formal abolition of domestic rates, we have now concluded the consideration period and we hope to make a decision and announcement on those matters as soon as possible.
Mr. David Stoddart: Is the Secretary of State aware that he is getting a bad reputation as an itinerant axeman? Is he further aware that there is great resentment in Swindon following his visit to my constituency when he incited Wiltshire county council to make further cuts? It has made further cuts in the police and fire services and has cut £3·2 million from education, although it was named in the HMI reports as being at the lower end of the scale of education authorities. Does not his announcement mean that people in Wiltshire, especially children, will be deprived?
Mr. Heseltine: No, it does not. It means simply that the local authorities—I am sure that Wiltshire county council will wish to do this—should take into account the effect of the recession on the rest of the economy in judging the economies that they can make. The employees of Wiltshire county council will doubtless reckon that if they bid for larger wage increases they will provide a less satisfactory service. The answer is to go for low wage increases.
Mr. Nigel Forman: Is my right hon. Friend sure that the expenditure control mechanisms to which he referred are sufficiently precise to avoid the unfair penalisation of economical and responsible local authorities, such as the London borough of Sutton, in my constituency? Is he aware that an early measure that he could take to reduce many of the problems would be to abolish the GLC?
Mr. Heseltine: My hon. Friend would be the first to recognise that, when one is distributing the best part of £20 billion over 400 authorities and 20 different services, there is bound to be recourse to general rules. It has always been central Government's view that one should not expect minute accuracy in the rate support grant settlement. However, the settlement now reflects broadly the needs of the authorities in each area, depending on the service that they provide, and the consultation process that I am beginning early will enable me to satisfy myself more about the position.
I have no proposals to put to the House today on the future of the GLC, but the GLC argues the most eloquent case that one can imagine for its own demise.
Mr. A. E. P. Duffy: Is the Secretary of State aware that unemployment in inner Sheffield is 20 per cent. and that male unemployment, at 24 per cent., is twice the national average? With the deprivation and urban-related problems to which that gives rise, Sheffield must be typical of our inner cities. Is he further aware that the Secretary of State for Industry
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justified his adjusted regional policy on the ground that he was concentrating assistance at the point of need? Why is the right hon. Gentleman reversing that policy?
Mr. Heseltine: Few authorities pursue policies more likely to create unemployment than the metropolitan district of Sheffield, which, by its rating and expenditure policies, increasingly absorbed private sector resources that could otherwise go into profitable investment and job creation.
Mr. David Madel: As much of local authority expenditure is on education, including the fresh statutory requirements under the new training initiative, does my right hon. Friend feel that in the autumn the Government will be able to say something about an education block grant or an alternative way of financing heavy expenditure on education?
Mr. Heseltine: I am grateful to my hon. Friend for that question, but he will understand that an educational block grant must be dealt with in the consultative process about rates and their future. If he will bear with me, I should prefer it to be dealt with in that way.
Mr. Jack Straw: Is the Secretary of State aware that not even the most optimistic of economic forecasts estimates inflation of less than 7 per cent. next year? Therefore, will the Secretary of State break the habit of a lifetime and give us a straight answer to a simple question? If inflation is above 5 per cent., does that not inevitably mean that local authorities must cut their present level of provisions?
Mr. Heseltine: No, Sir It will depend far more on the level of the wage settlements in local government.
Mr. John Townend: Does my right hon. Friend agree that he will have the support of industry and commerce in his continuing efforts to bring pressure to bear on high spending councils such as Humberside to make the economies that industry has had to make in the past two years?
Mr. Heseltine: I am grateful to my hon. Friend. He has highlighted something that is widely recognised throughout the country, which is that industry and commerce have had to make substantial sacrifices m the light of the recession. That consequence has been resisted by the Labour Party whenever it has had an opportunity to influence decisions. The fact is that such resistance leads to higher rate increases and makes the task of industry harder.
Several Hon. Members rose—
Mr. Speaker: Order. This is a Supply day. Many right hon. and hon. Members have intimated that they hope to speak in the debate on unemployment. I shall call two more hon. Members from each side, although that will take time from the debate.
Mr. Greville Janner: Before the Secretary of State made his decision, did he consider how many local authority jobs were likely to be lost? If so, what conclusion did he arrive at?
Mr. Heseltine: I am sure that the hon. and learned Gentleman will realise that, as I have announced a 5 per cent. increase in cash availability for next year, it must follow that if wage settlements are low that should have little effect on the number of jobs. However, if wage

931
settlements are high, fewer people will be employed. That, however, is a matter for the local authorities and the unions and not for me.
Sir Brandon Rhys Williams: What are my right hon. Friend's intentions for the future of the Inner London Education Authority, particularly with regard to the ways in which its expenditure could be brought under firmer control and scrutiny?
Mr. Heseltine: I should like to be able to answer my hon. Friend's question. As with so many other matters on local government, we are having to consider that matter carefully. I am sure that the House will appreciate that it is not the appropriate moment for me to go wider than I have gone in today's announcement.
Mr. Dennis Skinner: What is the economic sense of the Government telling the local authorities that, if wage settlements are around the rate of inflation, that will mean about 100,000 people not receiving wages from the local government office per the rate support grant and the rates but having to go down the road to another central Government office to draw unemployment pay? Some of them will have to go back to the local authority to draw rent and rate rebates and take advantage of some of the other benefits that remain despite the Government's record. What business sense is there in adopting such a policy?
The Secretary of State should not accuse my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) of having accused him of misleading the House. The right hon. Gentleman will go to the Tory Party conference in October and make a speech that is different from what he has said today. He will preach to the Tory faithful and will want to sound like the great big axeman. Therefore, what is he complaining about?
Mr. Heseltine: I was not complaining.
Mr. Michael Colvin: Will my right hon. Friend tell the House whether, since coming to power, the Government have increased or decreased in real cash terms, allowing for inflation, the statutory obligations placed by Government on local authorities to spend money?
Mr. Heseltine: There have been a number of legislative changes but no significant change of which I am aware that should lead to substantial increases in expenditure. There are always consequences of Government legislation that could lead to some increases in expenditure, but they are as nothing compared with what could have been achieved if local authorities had much more effectively managed their resources.

Adult Education
4.4 pm
Mr. Frank Haynes: I beg to move,
That leave be given to bring in a Bill to require all local education authorities to provide adult education for persons registered as unemployed; and for connected purposes.
I shall preface my remarks by making reference to the present economic situation, bearing in mind its effect on education, particularly adult education. Over 3 million people are unemployed. We are constantly told by Treasury Ministers that that figure will increase as time goes by. Therefore, the situation becomes worse.
Because of the problems of adult education, we saw fit to organise a body of hon. Members from all parties to meet regularly and discuss adult education. We were concerned about the breaking down and destruction of adult education. Across the country many representations have been made to that body. Many educational bodies throughout the country have made representations to me. I received a letter from the Adult Literacy and Basic Skills Unit. I shall quote from it to put the matter in perspective.
It states:
"The estimated number of adults (16+) who are considered `functionally illiterate' is 2 million (6%) and this is considered to be a conservative estimate … As far as numeracy is concerned a recent Gallup Poll sponsored by the Advisory Council on Adult and Continuing Education found that one in ten could not cope with simple addition, three in ten could not cope with simple subtraction, multiplication and division, three in ten could not cope with simple percentages or a simple graph and four in ten cannot cope with a simple timetable."
That spells out what is happening, what should be happening and where we should direct our finance in the interests of the adults of tomorrow. I recognise that there is the new training initiative. However, it does not come in until September 1983. The Prime Minister, at Question Time, said that many youngsters who have been out of school for a year have not yet found a job. At least in September 1983 some youngsters will benefit under the new training initiative. The Secretary of State for Employment told us that all school leavers will enjoy 12 months' training under that scheme.
However, we must consider the other side of the coin. In my constituency, as well as in others, many adults are illiterate. I mentioned the figures. The Government have a duty to do something about that problem.
Last year Her Majesty's Inspectorate published a report on education with particular reference to adult education. It made a scathing attack on the Government for their destruction of adult education. The Government should be ashamed of what they have done to adult education. I hope that the Government are taking note of what I am saying today so that we can make some progress and give some of the people who are now standing in the dole queues every week the opportunity to get away from their illiteracy and be prepared for the future.
We are constantly told that the economy will pick up. We shall need workers in future, but they must be able to read and write. If not, they will be sent away when they apply for jobs. That happens frequently. The Government have betrayed the present generation of youngsters. They have also betrayed the generation before them who form today's dole queues. They will continue to stand there until the Government change direction.
The community enterprise programme has been mentioned. The Chancellor of the Exchequer goes on

933
television and the radio and stands at the Dispatch Box and proudly talks about the community enterprise programme and its extension in the future. He should listen to what some people concerned with adult education say about how that programme will help. They say that it is nowhere near sufficient to provide the necessary services for the people who need them. It is high time that the Chancellor and the Government went in a different direction. We are told that there is to be an extension of the CEP, but it will help only about one-eighth of the unemployed for 12 months.
Adult education has been squeezed and squeezed again. The Government now have the opportunity to provide finance to help people who will not be helped by the other schemes that have been mentioned recently. The system already exists. I get around Britain and I have seen the problem in my constituency and elsewhere. Most people are aware of the existence of adult education units. There are already people running those services. We must give those who will benefit from adult education the chance to better themselves.
There is a scandal in all this. I give the example of what happened to a 21-year-old. I do not doubt that the same is true for others. She applied for an adult education course. She was unemployed but, because she had not signed on, she was disqualified from benefit. That is an example of how the Government carry on. It is time that they changed their mind on such matters. They are hitting the people who canot help themselves. The Prime Minister constantly tells us that the Government are supposed to help such people, but they are crucifying them.
Early-day motion 653, which relates to this problem, states:
"That this House is dismayed to learn that unemployed adults are unable to participate in part-time adult education courses whilst retaining their full entitlement to unemployment benefit and urges the Government to rectify this before the beginning of the next academic year, by a similar procedure to that used in respect of the 21-hour rule in the supplementary benefit system for unemployed young people."
I hope that many hon. Members, including Conservative Members, will sign that motion urging that the present situation be changed.
The system exists and the workers are there. We should give people the opportunity to make good use of the adult education system. It will help them in the future. At the same time, it will help the nation to face and overcome the difficulties that have been created by the Government.
Question put and agreed to.
Bill ordered to be brought in by Mr. Frank Haynes, Mr. Jack Dormand, Mr. Derek Foster, Mr. Don Dixon, Mr. Stanley Newens, Mr. Ray Powell and Mr. George Foulkes.

Adult Education
  ADULT EDUCATION
  Mr. Frank Haynes accordingly presented a Bill to require all local education authorities to provide adult education for persons registered as unemployed; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Monday 18 October and to be printed. [Bill 171.]

Privy Councillors (Privileges)
Mr. Arthur Lewis: On a point of order, Mr. Speaker. A little while ago you said that a large number of right hon. and hon. Members wished to participate in today's debate. I have raised this matter with you before. I hope that you have a long and happy Summer Recess, but perhaps you will seriously consider the matter and discuss it through the usual channels. I know that the Chair is in an invidious and difficult position.
The subject is the privileges that are given, taken or granted to Privy Councillors. Most hon. Members share my opinion. There are a few right hon. Members who abuse their privilege. My right hon. Friends the Members for Cardiff, South-East (Mr. Callaghan) and Huyton (Sir H. Wilson) and some others do not abuse it, but there are others who regularly, in every major debate, come to the Chamber, make their speech and go away, and we do not see them again for the rest of the debate and sometimes not even during the winding-up speeches.
Worse than that, some Privy Councillors never take the trouble to table a question but when another hon. Member tables a question they come into the Chamber at 10 minutes or quarter past 3 and are immediately called to ask a supplementary question. Other hon. Members who have waited to raise an important point are therefore not called.
Perhaps, Mr. Speaker, you would discuss this matter with those concerned and suggest that, as we all believe in fair shares for all, certain right hon. Members should try to ration themselves. Furthermore, I suggest that if too many right hon. Members wish to speak, they also should be told that they will not be called and that you will only call one or two on each side to prevent Back Benchers from being forced out. I am sure that the House would welcome that.
I hope that if you cannot give an answer now, Mr. Speaker, you will consult the relevant persons on the matter.
Mr. Speaker: I am much obliged to the hon. Gentleman. I hope that every speech today will be as brief as his. The Privy Councillors that I may call today who have said that they would like to be called are very good ones.

Orders of the Day
  SUPPLY
  [29TH ALLOTTED DAY]—considered
  SUPPLY

    Unemployment
    4.19 pm
    Mr. Eric G. Varley: I beg to move,
    That this House condemns Her Majesty's Government's economic, industrial and monetary policies which have led to a massive increase in unemployment, reaching a record 3·2 million in July 1982; and calls upon the Government to abandon policies that have clearly failed the nation and to introduce new measures to revive output, industry and employment.
    Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
    Mr. Varley: Today the House of Commons is debating the waste of a nation. We are debating the worst peacetime disaster to strike our country in modern times—the scourge of mass unemployment that afflicts every part of our land—and we are indicting the Government and, above all, the Prime Minister.
    We indict the Government for deception. Three years ago, they deceived the nation into believing that they could solve an unemployment problem which, grave though it was, was little more than one-third of the size that it is today. We indict them for inaction, for standing by and watching the tide of unemployment rise and doing nothing to reduce it. The measures that this leakiest of all Governments leaked to the press at the weekend and that we are told to expect today are utterly inadequate. In some respects they are a fraud—a device to reduce the number of registered unemployed but not the number of people out of work.
    Above all, we indict the Government for callousness. Certain members of the Government are becoming increasingly addicted to adorning themselves with the Union Jack as though it belonged to them and to them alone. When it comes to fighting unemployment, however, the standard that the Prime Minister runs up is the white flag. Three years ago, she told the nation:
    "there is nothing inevitable about rising unemployment".
    Five days ago, she told the 1922 Committee that she intends to do nothing whatever to reduce unemployment. [HON. MEMBERS: "How do you know?"] It was reported in The Times newspaper and it has not been denied by anyone at No. 10 Downing Street.
    Millions of families throughout the country curse the day that the Prime Minister walked into No. 10 Downing Street. It is a long time since she had the effrontery to utter the words of St. Francis:
    "Where there is despair may we bring hope".
    Where there was hope, she has brought despair. We all know that the use of those words was suggested to her by the playwright Ronald Millar and they have earned him a knighthood. At a theatre a few minutes walk from the House the Prime Minister and her colleagues can see his latest play. It is called "A Coat of Varnish". It will take more than that to cover up the crimes against the unemployed.
    According to The Times the Prime Minister told the 1922 Committee last Thursday that
    936
    "The Government wanted no gimmicks, no special election policies that would have to be changed afterwards. They wanted to go to the electorate totally honest, doing what was right."
    That is certainly a turn-up for the book. In the Conservative manifesto before the last general election, the nation was told that it was a Conservative Government's task
    "To restore incentives so that hard work pays, success is rewarded and genuine new jobs are created in an expanding economy."
    That deception was carried further few weeks later in the Government's first Queen's Speech in which the following words were used:
    "My Government will give priority in economic policy…and create a climate in which commerce and industry can flourish…and increased employment in all parts of the United Kingdom."—[Official Report, 15 May 1979; Vol. 967, c. 48.]
    What have the Government created in the last three years? They have not created genuine new jobs or a climate in which commerce and industry can flourish. They have created not unity but a uniformity of suffering—the uniformity of mass unemployment. From the South-East with 9·7 per cent. to Northern Ireland with 21·1 per cent., no part of the country has escaped. It is the unique achievement of the Government that areas of the country which knew relative prosperity even in the 1930s now face unprecedented mass unemployment. It is the Government's extraordinary achievement that unemployment in the West Midlands is now even higher than unemployment in Scotland. In the West Midlands, one worker in six is out of a job. It takes a special kind of incompetence to turn what was once regarded as the heartland of British manufacturing industry into a depressed area.
    The picture in the rest of the regions is both appalling and instructive. In Northern Ireland, for every 100 people who were without jobs under the Labour Government there are now 199 and in Scotland there are now 211. The situation is the same in the South-West and in Wales. For every 100 unemployed when the Labour Government left office, there are now 246 unemployed in East Anglia, 239 in the North-West and 262 in Yorkshire and Humberside.
    Those figures are terrifying enough. I turn now to areas which, until the Government took office, had always known some prosperity. In the South-East, represented by the Chancellor of the Exchequer, the Secretary of State for Employment and the Prime Minister herself, for every 100 unemployed when the Labour Government left office, 274 are now seeking work. The story is the same in my own area of the East Midlands.
    Top of the list again, however, is the West Midlands where for every 100 unemployed on the date of the last general election there are now 314. I wonder how many Tory Members who gained seats from Labour in the West Midlands in 1979 told the electors that the result of electing them to Parliament would be to turn their constituencies into unemployment black spots.
    Unemployment throughout the United Kingdom is nearly three times what it was when the Government took office. We shall hammer that fact home day in and day out, week in and week out, month in and month out until the next general election.
    That statistic, grim though it is, does not give the complete picture of mass unemployment. The situation is even worse for some sections of the unemployed. The proportion of jobless teenagers is now three times as high as it was three years ago. Youth unemployment is not just

    937
    keeping pace but shooting far ahead of unemployment generally. Throughout Britain, boys and girls are being given the impression that once their formal education is over society has no use for them.
    Unemployment among women has become mass unemployment in its own right, even taking only those who register as unemployed. As we know, many do not register at all. In many parts of the United Kingdom, the rate of registered unemployment among women now exceeds 25 per cent. That is especially disastrous because, with such devastating mass unemployment among men, women are often the only breadwinners in their families.
    The most disturbing feature of mass unemployment in Britain today is that long-term unemployment has taken deep roots. It is a terrifying fact that more than 1 million workers in this country have now been out of work for more than a year. The number of long-term unemployed alone is almost as great as the total number of unemployed when the Government took office.
    The Prime Minister and her colleagues have a ready excuse. They tell us that Britain is merely suffering from a world-wide trend. Interestingly, when unemployment in Britain was 1¼ million, the right hon. Lady and her colleagues insisted that it was all the fault of the Labour Government and that international trends, the fivefold increase in oil prices and so on had nothing to do with it. Now, however, when unemployment is not 1¼ but 3¼ million, the Tory Government ask to be acquitted of all responsibility and world trends come into their own.
    Mr. Tony Marlow: Has there or has there not been a massive increase in unemployment in the Western developed world as a whole? Instead of trying to make political capital out of other people's misfortune, will the right hon. Gentleman tell the House what he intends to do about it?
    Mr. Varley: I shall answer both of the hon. Gentleman's points in good time. Although there is a recession throughout the developed world, Britain is suffering the impact of unemployment far more heavily than any comparable industrial country. When the Labour Party left office Britain's unemployment was below that of Italy, Canada and France and only a minute fraction ahead of the United States. Now, after three years of a Tory Government, Britain is not simply ahead of all those countries but far ahead of them. If there was an OECD cup for unemployment, Britain, under the Tories, would be undisputed champions.
    By the use of highly selective figures and the tendentious use of statistics, the Secretary of State for Employment claims that Britain under the Tories is doing better than France under the Socialists. No doubt he will do so again tonight. In fact, I can guarantee that the Secretary of State will return to that argument. However, unemployment in France is far below that of Britain. Industrial production in France is higher than it was three years ago, while industrial production in this country is massively down. If the Secretary of State for Employment wants to look overseas at a country in economic trouble, he should examine what is happening in the only Western country pursuing policies similar to those of the Government. In the United States of America—Reaganism is its version of Thatcherism—industrial production is decreasing, just as ours has done. Competitiveness is down by 20 per cent. compared with last year and unemployment and poverty are increasing.
    938
    Every economic indicator here tells the story of the mismanagement of our economy by the Government. Manufacturing investment in the Government's first two years of office fell by 19·1 per cent. Industrial production is 16 per cent. down on three years ago. The number of apprentices and other trainees in manufacturing industry in the first three years of this Government is down by 33 per cent. In the first half of this year business failures were at the highest level ever recorded. Company liquidations and bankruptcies are up by 22 per cent. on last year and by 75 per cent. on 1980.
    Mr. Michael Colvin: In order to paint a clear picture, will the right hon. Gentleman divide voluntary liquidations from bankruptcies? He will be aware that one of the measures brought forward by my right hon. and learned Friend the Chancellor of the Exchequer made it easier for people to obtain voluntary liquidation so that they could start new businesses. Can the right hon. Gentleman provide separate figures?
    Mr. Varley: It does not matter on what basis the figures are taken, they are still record figures and those that I have given are accurate in every respect.
    The building and construction industries have been especially hard hit. Last Thursday the president of the National Federation of Building Trade Employers sent a copy of the federation's latest quarterly report to the Prime Minister. In his accompanying letter the president told the right hon. Lady that the report shows that the recession continues—a recession of unrelieved length and depth.
    There is one industry about which the Government ought to feel an especial sense of shame—the shipbuilding industry. We all recall that a few weeks ago the Prime Minister said "Rejoice, rejoice." That was the Prime Minister's advice to the nation when our Service men and seafarers won victories in the South Atlantic. They won those victories with great courage and at great cost. But it is the shipbuilders of Korea and Japan who are now getting ready to rejoice as they eagerly look forward to work that will go their way if they can get their hands on the building of the replacement for the "Atlantic Conveyor".
    The day after the Argentine surrender in the Falkland Islands the Daily Express covered its front page with a "V" sign surmounted by a portrait of the Prime Minister. Yesterday the Daily Express continued that theme with an interview with the Prime Minister that, in its subservience, could easily have appeared in Pravda. The Prime Minister told that sober commentator, George Gale, that in the Falklands conflict
    "the honour of our country was at stake."
    The right hon. Lady added:
    "We now had a renewed sense of purpose … When the call came out of the blue we were not found wanting."
    That newspaper and its heroine are partners—or look like being partners unless there is a great change of heart today—in allowing the Korean shipbuilding industry to hoist the victory flag over whichever of its shipyards secures the contract for replacing the "Atlantic Conveyor".
    Mr. David Ennals: Does my right hon. Friend agree that, as regards jobs, it is not just the shipbuilding industry that is affected? A large range of industries in many of our constituencies, including mine, provide all sorts of marine equipment. Tens of thousands of jobs across the country will be affected by the decision to buy the replacement abroad.
    Mr. Varley: It is difficult to go through the complete list of industries that have been hard hit. If the "Atlantic Conveyor" replacement is built on the Tyne, which my hon. Friend the Member for Whitehaven (Dr. Cunningham), with others, has been arguing should happen, undoubtedly it will bring prosperity for a time to our shipyard workers.
    There has not been much talk about the honour of our country. There is no call coming out of the blue to our shipyard workers. I do not know whether the Chancellor of the Exchequer or the Secretary of State for Employment will tell us more about the replacement for the "Atlantic Conveyor", but, looking at the sordid stories in the newspapers, I do not know who is more contemptible—Lord Matthews of the Daily Express and Cunard for demanding the extra subsidy, or the Prime Minister for haggling about it. The Swedish and French Governments are providing the finance necessary to ensure that the sister ships of the "Atlantic Conveyor" are built in their own yards. If the replacement for the "Atlantic Conveyor" is not built in this country, the Prime Minister will never be forgiven by our shipyard workers. They were ready to make their sacrifice for Britain in her hour of need. Men and women were not found wanting when the call came.
    The unemployed are not the only people who are suffering from the Government's policies. People in work have watched their living standards fall since the Government came to office. In the last three years of the Labour Government living standards rose for millions of workers. For those on half average earnings the increase was 8·1 per cent. For those on twice average earnings it was, quite properly, somewhat less, but still substantial, at 6·6 per cent. Since the Conservative Party took office there has been a slight fall of 0·1 per cent. in the real incomes of those on twice average earnings, while for those on half average earnings the reduction is 3·6 per cent.
    The economic slump is not the only reason for that. Those in work are being heavily taxed to finance the cost of those out of work. The nation is now wasting £15,000 million a year to finance unemployment. That is nearly 6 per cent. of our gross national product. It is being wasted because the dole queues, for which the Government will be remembered long after they have left office, are taking that amount of money. That waste can never be recovered. The years without work that have been lost by the unemployed can never be given back to them. The goods that they could have made, the services that they could have provided and the wealth that they could have created have been permanently stolen from the nation and can never be restored.
    This is how The Times last week described what the Government have done:
    "The output lost over the past three years is lost forever … Something like a fifth of our industry has been destroyed and will not come back. Two million fewer people now have jobs than in the spring of 1979. That drop in employment, about 9 per cent. of the workforce, is six times as big as the drop in employment in the 1974–75 recession. The years of work which those two million people have lost, are lost forever."
    That is what the Secretary of State for Employment is presiding over. Last week the right hon. Gentleman appeared on the television programme "Panorama". On the same programme was a representative of the 1 million long-term unemployed, Mr. Mick Lally, a 50-year-old skilled fitter who has now been on the dole for 18 months,
    940
    the first time in his life that he has ever been out of a job. The other day, when he cycled to sign on to show that he was still available for work, he was told "Don't bother to come in every fortnight any more. From now on every three months will do." Mr. Lally said "I told them I was finished." Tens of thousands of people in Britain think that they are finished under this Tory Government of no hope.
    Last week the Secretary of State confided to a glossy colour supplement that politics needed "a bit of fun". The right hon. Gentleman may be having a bit of fun, but 3¼ million unemployed do not see the joke.
    The chorus of demands for a change of policy has now become deafening and more insistent than ever before. The Government have become accustomed to deriding the case made by the TUC, but in the past few days it has been joined by the Financial Times, which said that
    "the promised recovery is now a full year behind schedule".
    We now have the devastating case made by the CBI. The CBI's survey of Britain paints a bleak picture. The following are some of the reports from the regions. The North-West:
    "general level of industrial activity remains low and there is some evidence that it will deteriorate still further".
    The West Midlands:
    "Overall, the West Midlands economy remains depressed … many companies report a further decline in the second quarter. The output of manufacturing industry in the region is reported to be somewhere between 60 and 80 per cent. of 1979 levels."
    The Eastern Region:
    "The previously reported evidence of an improvement in domestic demand has not been sustained … Prospects are regarded as bleaker than previously".
    The South-Eastern region:
    "The recovery which had been gathering momentum slowly during the earlier part of this year has shown more recent signs of faltering".
    London:
    "there has been little change in the general picture which remains flat."
    Yorkshire and Humberside:
    "The region's economy shows no improvement and indeed there is evidence of trading conditions worsening for some companies".
    The Northern region:
    "Overall activity is sluggish with business confidence deteriorating. In the home market it seems that demand has taken a turn for the worse."
    The East Midlands:
    "Most companies continue to operate at very low profit levels and survival continues to be the keynote for a lot of smaller companies."
    Wales:
    "Little sign of any improvement, with some companies reporting that initial signs of buoyancy have been totally dashed … in general Welsh industry seems to be bumping along the bottom."
    The Southern region:
    "No abatement in the number of companies going into receivership, being liquidated or ceasing trading."
    Scotland:
    "absence of improvement suggests that any substantial recovery later in 1982 is unlikely."
    That is the picture painted by the Government's friends.
    There is no sign of the
    "renewed sense of purpose and confidence"
    about which the Prime Minister boasted in the Daily Express yesterday.
    It is no wonder that the CBI has pressed for immediate action to revive the economy. I understand that today its president, Sir Campbell Fraser, said that industry is bracing itself for a new wave of redundancies in the

    941
    winter. The CBI is even demanding additional investment in the public sector. It is now generally recognised by everyone other than the Government that a boost for public sector investment is vital to prevent the crisis from lurching completely out of control.
    We in the Labour Party demand from the Government a massive increase in railways investment, and the TUC in particular has earned the right to demand that. We also call for an increase in construction, housing and roads programmes. For a fraction of the money being frittered away unproductively on unemployment, tens of thousands of jobs could be provided to build homes to house our homeless.
    The disaster threatening some of our older inner cities from crumbling decay could be put right and would create jobs in both the construction and material industries.
    The increase in telephone charges, unnecessary as they are, should be used to finance additional investment in telecommunications.
    Instead of picking on the nationalised industries, as the Prime Minister continually does, as a scapegoat, the Government should be using their potential to get Britain's economy moving again. That course of action would do much more for Britain than the ideologically motivated privatisation and looting of public assets that so obsesses the Government.
    The local authorities, which have taken such a hammering from the Government and have had a further blow today from the Secretary of State for the Environment, are massive private sector customers. Private firm after private firm tells me that it is desperate for public sector orders. Why do not the Government decide in favour of the P110 military aircraft about which there have been early-day motions and Adjournment debates? Above all, before the end of the debate we expect the Government to announce that the "Atlantic Conveyor" replacement will be built on the Tyne. I know that the Prime Minister was not in the Chamber at the beginning of the debate. I hope that she has been trying to convince Lord Matthews that that order should be placed on the Tyne. I hope that during the debate she will tell her right hon. Friend that that can be announced today.
    It is intolerable for the Prime Minister to say, as she told the 1922 Committee last Thursday, that she does not intend to change her policy. Unchanged policies mean even heavier unemployment, even greater waste of precious resources, and even greater social devastation and even greater human suffering.
    The right hon. Lady says that she cares about unemployment. If she does so, let her do something today to show that she cares. She must cast aside her dogma and obstinacy and tell us what the Government intend to do to stop the disaster that is taking place. What does the level of unemployment have to be before the Government act? What does it have to be before the Prime Minister shakes herself and does something about it? However, I fear that that it too much to ask of her and her colleagues.
    The Government have failed the economy, they have failed on production, which is even lower now than when they came to office, but, above all, they have failed on humanity. They are ready to see unemployment soar way above last week's record figures. They have given the nation the impression that they are quite prepared to go into the next general election with 3½ million unemployed, hoping that the 85 per cent. of people who have been able to hang on to their jobs will not give a fig about those who
    942
    are jobless and have no hope. If the right hon. Lady will not change policies, it is time that she went and took her Government with her.
    4.49 pm
    The Chancellor of the Exchequer (Sir Geoffrey Howe): I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
    "this House, recognising that the problem of rising unemployment is world-wide, supports the policies of Her Majesty's Government, which offer more realistic prospects of economic recovery and secure employment than the failed Socialist policies of the past".
    I had hoped to start my speech by saying something about the prescriptions and solutions advocated by the right hon. Member for Chesterfield (Mr. Varley). The House will have noticed that he offered not one word in that direction.
    Mr. J. W. Rooker: Yes, he did.
    Sir Geoffrey Howe: I should like, even so, to find common ground with him on one thing, despite his efforts to make that difficult. There is no difference of opinion between the two sides of the House on the grim tragedy portrayed by today's unemployment figures. The point at which we register our disagreement with the Opposition is when they seek to portray, as the right hon. Member for Chesterfield did this afternoon, the problem of rising unemployment as a new one, which did not exist before May 1979, and has been wilfully invented by the Government. Nothing could be further from the truth and the Opposition know that.
    In this country unemployment has been on an upward trend for almost a quarter of a century, starting at 300,000 in the 1950s, rising to 500,000 in the late 1960s, 800,000 in 1972, and to almost 1,500,000 in 1979.
    Mr. Giles Radice: Rubbish.
    Sir Geoffrey Howe: The Opposition shout "Rubbish" at those facts, but they are important. It cannot be denied that the unemployment level has been rising steadily during the past two decades. There is no point in trading blame for that background fact. The proper and responsible task for the House is to agree on the basic causes. The most obvious and fundamental cause of rising unemployment has been the decline of industrial competitiveness that has been sustained over many years. For years, as the right hon. Member for Chesterfield knows, management and unions have agreed on levels of pay settlements that have borne no relationship to the underlying productivity and performance of the industries in which they are interested.
    The right hon. Member for Chesterfield drew attention to the fact that unemployment in the West Midlands has risen to levels beyond those to which that prosperous area was accustomed. The reason for that springs to a large extent from the industry with which he had to grapple for so many years—the motor industry. It is an industry dogged by an inflexible adherence to outdated and restrictive practices in which over-manning was perpetuated for years. That was hidden unemployment that finally came to the surface.
    The right hon. Member for Chesterfield is intimately concerned with the steel industry. It cannot be disputed that the massive redundancies of the past three years in that industry are the price that the nation had to pay for deferring action for so long in the past under the leadership

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    of the right hon. Member. If we are to get our people back to work—even if the rest of the world were more prosperous than it is—it is crucial for us to recapture markets that we have lost at home and overseas.
    In the past two years we have made some headway in recovering the competitiveness lost in the past six years. Although we have recovered about one third of the ground lost since 1975, there is still a long way to go. The right hon. Member for Chesterfield sought to mislead the House into believing that the conditions outside this country have nothing to do with the problems that we face. The truth is that the conditions we face are more urgent than they are abroad, but the problems are certainly not ours alone.
    The unemployment rate in Canada is now 10 per cent. The unemployment rate in the country to which the right hon. Member for Chesterfield referred—France—is 10·8 per cent. [HON. MEMBERS: "8·2 per cent."] I shall discuss France later. The seasonally adjusted unemployment level in France is 10·8 per cent., and in Italy 10 per cent. It is close to that figure in the United States of America. In other countries within the European Community it stands at 12 per cent., and in Belgium it stands higher than that. It is more important that unemployment in this country is now running at a significantly lower rate than in the countries to which I have referred. Unemployment for the year ending May rose by about 15 per cent. In Germany and Canada the figure rose by 40 per cent. The German rate also stands at 8 per cent.
    The problems that face us face other countries as well. It is fruitless to bandy this kind of argument across the Floor of the House when right hon. and hon. Gentlemen know that the world economy suffers severely from rising unemployment in virtually every country that I can name. Our own country faces greater difficulties because of the longer period for which we have been losing competitiveness compared with other countries.
    Mr. Peter Shore: The right hon. and learned Gentleman has been blaming virtually everything and everyone except himself for the country's present plight. Does he accept, or with what authority does he deny, that we have lost about 36 per cent. of international competitiveness since he took over? What responsibility does the right hon. and learned Gentleman accept for the present disastrous position?
    Sir Geoffrey Howe: Over the past two years competitiveness has been improving significantly. [Interruption.] We have recovered about one third of the competitiveness lost since 1975. It is true that between 1977 and 1980 we lost competitiveness on a massive scale. One of the principal reasons for that was the huge pay explosion that we inherited from the previous Government, generated by the Clegg commission, which was bequeathed to us. Since then we have made slow but painful progress to recover that lost competitiveness.
    Mr. Shore: We must have a basis of fact. Is it not the case that during the first two years—the second quarter of 1979 to the second quarter of 1981—we lost about 40 per cent. in international competitiveness, and it was restored to a loss of 36 per cent? That has happened since the right hon. and learned Gentleman took on his present responsibilities.
    Sir Geoffrey Howe: There are two causes for the loss of competitiveness. [Interruption.] The first cause was the rise in the exchange rate during that period. The exchange rate level today stands at almost exactly the level of 1979 and no longer contributes to that loss of competitiveness. The second cause was the massive rise in unit labour costs, which were the direct result of the pay explosion bequeathed to the Government. There can be no escape from that responsibility. If one moves from that analysis of the problem, the important thing to recognise is that—
    Mr. Norman Atkinson rose—
    Sir Geoffrey Howe: I shall not give way again. I have given way a number of times already. No responsible Government abroad seek to solve the problem of unemployment by the prescription of reflation that is constantly urged upon us by the Opposition. On the contrary, almost every other country grapples with the problems by reducing expenditure or raising taxes. Some have done both. In Germany and the Netherlands both those things have been done, and both countries are enjoying a better record on inflation than most of the others.
    In the United States of America the performance on inflation has been good, but their problem persists because their deficit and interest rates remain high. There is only one exception to the proposition I have just made, which is that offered by the French Government. The right hon. Member for Chesterfield expected my right hon. Friend the Secretary of State for Employment to discuss that. It is only just over 12 months since the people of France elected an enthusiastic Socialist Government. During that 12 months, the banks have been nationalised, a full panoply of exchange controls has been introduced and a massive programme of reflation has been undertaken. What has happened?
    Mr. Jack Straw: Unemployment has fallen in France in the past four months.
    Sir Geoffrey Howe: Unemployment in France has risen sharply and is still rising. Indeed, in the past three months for which figures are available, unemployment in France was rising four times faster than in this country. Inflation, too, has been moving up. The French franc has been devalued twice against the deutschmark, by a total of over 17 per cent. Within 12 months of their election the French Socialist Government have had to reverse their policies. Does the Labour Party deny that within 12 months of entering office the French Government have abandoned all the policies to which they were at first committed? They have set a ceiling on their budget deficit of 3 per cent. of gross domestic product. They have introduced a package of austerity measures, shelved many of their public expenditure plans, introduced a four-month prices and wages freeze and are planning cuts in spending on social security benefits.
    Even the Labour Party could hardly wish for a plainer demonstration of what would happen more quickly in Britain if the plans to which it is committed were ever to be implemented. Indeed, the only plainer example that I can think of is its experience in 1976.
    Mr. Radice: Has the right hon. and learned Gentleman seen a report today in the Financial Times from the EEC showing that the jobless total in France dropped from

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    1,880,000 in May to 1,867,000, thus reducing the unemployment rate fractionally from 8·3 per cent. to 8·2 per cent. and marking the fourth consecutive monthly drop since March, when the rate was 8·7 per cent?
    Sir Geoffrey Howe: The figures that I have show that in France the seasonally adjusted level of unemployment has been rising during the past 12 months.1 [Interruption.] The fact remains that the French Government have reversed their policies of reflation and expansion, to which they were committed, recognising that they laid the foundations for disaster.
    Mr. Raymond Whitney: Did my right hon. and learned Friend see the report in yesterday's edition of the Financial Times, which revealed that France's trade deficit in June was the highest for 14 years and that this year's trade deficit is likely to be double last year's?
    Sir Geoffrey Howe: I saw that report and I also noted the salient factor, of which I have just reminded the House, that inflation in France has been rising. However, although the French Government came to office on policies just like those prescribed by the Labour Party, they had to reverse them within 12 months of the election.
    By contrast, we are following the alternative policy that commends itself to other nations. Of course, the recovery that is taking place is uneven and frustratingly slow. We have never said that it would be anything other than that. Indeed, in current world conditions we could not have offered anything more. However, disappointment with the pace of progress should not blind us to the facts.
    The facts are that in the three months to May industrial production was 3 per cent. higher than in the spring of 1981. The hesitation apparent during the winter may be coming to an end and the longer leading indicators certainly continue to rise strongly. Most outside forecasters are looking for growth of 1 per cent. to 1·5 per cent. this year and of 2 per cent. to 2·5 per cent. in 1983. Manufacturing productivity, which is the key to further progress, is now 12 per cent. higher than at the end of 1980.
    Lessons are being learnt—for example, in the motor industry, where Ford has achieved continental standards of efficiency at Bridgend, and during the past two years British Leyland has improved productivity by more than 50 per cent. In addition, the Metro line approaches the performance of anywhere else in Europe. Because manufacturing pay settlements have come down and productivity has risen, unit wage and salary costs have risen only 3 per cent. in the past year, which is well below the average of our major competitors. However, cost competitiveness has improved by 10 per cent. to 15 per cent. in the past 18 months.
    Those are the facts and they show that, despite the difficulties, British management and workers are responding to the difficult circumstances that face them. But the Government can help and are helping directly. We are making it clear that we remain determined to pursue responsible monetary and fiscal policies and to hold down public sector borrowing to match them. As part of that policy, the Government aim to hold to the published public expenditure plans and I should clearly state that that includes the provisional plans for local authority current
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    expenditure next year, which have just been announced by my right hon. Friend the Secretary of State for the Environment.
    Public sector borrowing was below expectations last year and so far this year the figures are consistent with the Budget forecast. So too with monetary conditions: all the monetary aggregates have been growing at rates well within or below the target brackets that I set out in my Budget Statement. The growth of bank lending has been falling and the exchange rate has been firm. Those are the circumstances that have enabled us to secure a slow but steady fall in interest rates. They have fallen by four full points since the turn of the year.
    Until recently, much of that progress has been against the tide in the United States of America. While at the start of the year our rates were 2 per cent. above dollar rates, they were 3 per cent. below at the end of last month and the tide in the United States of America may now be turning. That, too is an encouraging sign for the rest of the world.
    Linked to our success in sustaining the fall in interest rates, and no less relevant to our fight to check the rise in unemployment, is our solid and continuing success in the fight against inflation. Last autumn, we forecast inflation of 10 per cent. by the end of this year. At the time of the Budget that figure had been revised downwards to 9 per cent. with the prospect of 7·5 per cent. by the middle of next year. There is now good reason to hope that we shall reach the figure of 7·5 per cent. by the end of this year. We do not intend that reaching that figure should be the signal for a reversal, as it was when, for the only time in the past decade, it was reached by the Labour Government for one month in 1978. Unlike them, we are determined to win the battle against inflation.
    Even so, there are those who advocate change in this balance of policy. Some of those who argue for a fiscal stimulus maintain that it could be consistent—as it would have to be—with the medium-term financial strategy, because money GDP may be growing more slowly than expected. I would not want to put too much weight on short-term movements in a measure such as money GDP, which tells us more about what has happened in the past than about what is likely to happen to prices and output in the future. Even if we had a money GDP target—which we do not, for that very reason—it would not be sensible to try to fine tune it by adjusting policy every few months.
    It is my firm belief that falling interest rates will help to boost demand and give help where it is most needed—to companies and investment. However, we should not forget that business and industry are just about to start benefiting from the national insurance surcharge cut that comes into effect from 2 August. It is a cut in the effective rate from now until the end of the financial year of 1·5 per cent. It was the main Budget measure, designed to bring £640 million of direct help to business. It would not be sensible to write off such a major measure as ineffective before it has even had time to come into effect.
    Mr. D. N. Campbell-Savours: Will the right hon. and learned Gentleman address his mind to the remarks made in the past few days by the CBI? Its surveys from the regions show that more people are to he made unemployed. Does he not understand that it is expecting him at least to give some sign to the House today that he will make changes? The CBI knows—and it is about time

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    that the right hon. and learned Gentleman knew—that unless he increases consumption our people will not find jobs for many years.
    Sir Geoffrey Howe: The hon. Gentleman has put his finger on precisely the wrong point.
    Mr. Campbell-Savours: So the CBI is wrong?
    Sir Geoffrey Howe: In many cases and in many parts of the economy there is no problem about generating and increasing consumption. Again, I cite the motor industry as one example among many of where import penetration is high and where—because we have still not achieved a sufficient advance in competitiveness—consumption is all too likely to take place at the expense of British manufacturing.
    Mr. Keith Stainton: Is my right hon. and learned Friend saying that the recession owes more to financial pressures than to a classic fall in demand?
    Sir Geoffrey Howe: The recession is caused by many things. However, if I had to, I would identify two causes. First, the world recession has affected every country in the world and, consequent upon the huge levels of inflation previously reached, it has affected our economy at a time when it had already achieved uniquely poor levels of competitiveness compared with other countries. The answer is not to embark upon an expansion of so-called demand in this country if by doing that one achieves not an improved performance but an improvement of inflation. Of course, it is possible to argue at the same time for lower taxes, higher public spending and lower interest rates, but those who argue for those three things at the same time are deceiving themselves. To expand public borrowing by raising expenditure and cutting taxes at the same time as hoping to achieve a fall in interest rates cannot be done. Our policies, by achieving lower interest rates, are bringing to British industry and to British consumers a major benefit relative to other countries. It is important to retain that benefit. Industry also attaches importance to it. We would not help business and industry or jobs if we were to endanger confidence by higher public spending or premature tax reductions and so put at risk the prospect of a further fall in interest rates.
    Mr. Peter Tapsell: As my right hon. and learned Friend knows, I have never advocated a general fiscal increase in demand. Indeed, even with the relaxation of hire purchase controls that was announced yesterday, there seems to be a danger, as my right hon. and learned Friend indicated, of sucking in imports without increasing employment. He knows that I have advocated for some time that we should pursue traditional Tory policies, such as were pursued in the early 1930s, when the world faced a similar position and when unemployment was rising all over the world. The Conservative Government of that day, particularly Neville Chamberlain as Minister of Health, launched a major house building programme. It is by investment in the construction industry that an enormous amount of additional employment can be provided and the entire pump of the economy can be primed.
    Sir Geoffrey Howe: My hon. Friend's contribution is founded on a misreading of the history of the 1930s in several important respects. First, and most importantly,
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    the 1930s was not a time of inflation. The price level was actually falling, in total contrast to the position faced by Britain and the rest of the world at present. Secondly, the house building expansion of the 1930s was over-whelmingly and characteristically an expansion of house building by the private sector. Thirdly, that expansion of the economy was founded, above all, upon the prospect and the reality of lower interest rates. It is that prospect that we must offer to the country today.
    Alongside that, it is important not to lose sight of the other causes to which I have already drawn attention, to recall the need to improve competitiveness and to underline, yet again, the need for continued restraint in pay settlements. I was pleased to see that that message has been taken to heart by the Labour Party. I understand that it is offering to those who work for the party a zero pay increase on the ground that the party's finances are in such a condition as to preclude any pay rise. It is heartening to see such a classic illustration of the principle of cash limits being applied. I hope that the Opposition will stand as firmly behind other employers who resist irresponsible pay claims, as they are understandably prepared to do when they face them in their capacity as an employer.
    The reality is that pay rises are slowing down. That is a good thing. There is a long way still to go. Average settlements in manufacturing in Britain are still half as high again as in Germany and Japan. Those who take the problem of unemployment seriously will settle in the years ahead for much lower pay increases than those of the past 12 months. The importance of such restraint is manifest in the private sector where jobs are clearly at risk and where it is obvious to all that firms can be driven by strikes or declining competitiveness as a result of increased costs, to lay men off.
    The need for pay restraint is no less real in the public sector. The public service pay bill amounts to £35 billion per annum. The Government are determined to resist unjustifiable pay increases there, in order to keep public spending down. That is essential if we are to see the prospect of lower interest rates and lower taxes.
    The right hon. Member for Chesterfield spoke about the need for a big investment programme in British Rail. There is a good example of how the matter should be approached. Of course we are glad that British Rail workers are now back at work. We are glad of the good sense shown by the rank and file of the National Union of Railwaymen. We are glad also to note the responsible role played by the TUC in that respect, but if we are to start setting about discussion of an investment programme for British Rail and if we are to start restoring British Rail's finances and to provide a basis on which that investment can be justified, we must have sense and sensibility from the Opposition about productivity, about achieving the improvements that are necessary and about pay restraint in British Rail. We need to have a great deal more sense from them in such matters than we have heard in the rail dispute from the Leader of the Opposition.
    An early end to the dispute in the National Health Service is equally important. The Government take pride in the fact that the level of services has been maintained and that a record level of resources in real terms has been provided for the service. No more money can be provided for National Health Service pay this year. To pay part of the increase claimed would inevitably direct resources

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    away from patient care and would mean fewer jobs in the service as well as a lowering of standards. Surely none of us on either side of the House wants that to happen.
    I have mentioned also the features that are fundamental to the prospect of progress, but it is no less necessary to encourage change and enterprise, to encourage new business and the restoration of profit margins. It is for that reason that we have swept away a whole range of controls left by our predecessors. We have swept away controls on prices, dividends, office development and industrial development, all of which stood in the way of enterprise and business. That is why we have removed exchange controls and also hire purchase controls, the last of that line.
    The experiment with enterprise zones has been a considerable success. The example of enterprise zones is now being followed in the United States. The present 11 zones are achieving impressive results. A range of development is now under way, bringing new enterprise and much needed investment to old dockland areas such as the Clyde, to steel closure areas like Corby, and to other areas of physical decay. At Clydebank, for example, more than 100 firms have moved in—almost 50 of them new firms—with potential for more than 1,300 jobs. The private sector is grasping the opportunities and public authorities are supporting the initiative with enthusiasm.
    I am glad to be able to tell the House today that we intend to designate 11 more enterprise zones—seven in England, two in Scotland and one each in Wales and Northern Ireland. They will not all necessarily be of the same size. The same attractive package of benefits will apply to these as to the first 11. My right hon. Friend the Secretary of State for the Environment will make details available later today.
    Mr. Ray Powell: Is the right hon. and learned Gentleman aware that, with regard to the enterprise zone in Swansea, £10·1 million was spent to create only 31 jobs?
    The Secretary of State for Wales (Mr. Nicholas Edwards): That is untrue.
    Sir Geoffrey Howe: My right hon. Friend the Secretary of State for Wales repudiated that proposition as soon as it was uttered. I am also told that it has been repudiated by the leader of the Labour council in Swansea.
    The measures of that type, with which I have been concerned, are directed to the long-term purpose of improving the economic prospects for industry and so for jobs. But we can also provide direct assistance on jobs for those out of work. We shall do everything we can to help those who are caught in the process of industrial change. That is why we have already in place a wide range of special employment and training measures, now costing £1½ billion a year and helping about 500,000 people.
    In my Budget speech I mentioned the suggestion by Lord Scarman among others that there could be advantage in bringing together on the one hand, tasks of environmental improvement in local communities, or help to those in need, that are crying out to be performed, and, on the other hand, those who are anxious to find work. The Manpower Services Commission has now put to my right hon. Friend the Secretary of State for Employment recommendations for the operation of such a scheme which the Government accept. There will need to be further consultations on the details but the commission will
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    introduce on 1 October a new community programme providing opportunities for community work: and voluntary service for those who have been unemployed for some time. The community work part of the programme will bring together the existing community enterprise programme and the initiative that I proposed in my Budget speech to provide a much larger number of opportunites at a relatively low unit cost. If the demand is there, this will together provide up to 130,000 places for the long-term unemployed. Most of the places will be part time and assistance will be given with training if required.
    The new community programme will also encompass the scheme for voluntary service announced in May. The whole programme will continue for at least two years at a gross cost in a full year of about £575 million including existing measures. The net expenditure cost of the extra 100,000 community work places will be £185 million a year after allowing for savings on benefits payments. This figure, which includes supervision, is much in line with the figure of £150 million which I foreshadowed in my Budget speech and which did not include supervision costs. It will be found within existing planned totals.
    The Government have also decided to encourage the extension of part-time work more generally in the economy. The object will be to provide additional opportunities for productive jobs for unemployed people. The scheme will be open from 1 January next year until 31 March 1984. It will offer employers who split a full-time job into two part-time jobs a flat rate grant designed to cover their additional costs during the first year and to provide some incentive. The grants will be payable only in cases where the splitting of a job results, directly or indirectly, in a reduction in the number of unemployed people claiming benefits. This proposal is similar in principle to a suggestion made in the recent report on unemployment from a Select Committee in the other place. The idea has also been under examination by the Manpower Services Commission.
    Full details of the scheme will be announced in the early autumn. It is not possible to forecast what the effect will be in putting back to work people now unemployed. But if, for example, the grant amounted to £500 and 100,000 jobs were split, the gross cost would be of the order of £55 million over the life of the scheme. Since there would be savings from benefits that would otherwise be paid, the scheme should have no net cost in terms of total public expenditure.
    I hope that the House will support these imaginative new measures. [Interruption.] The Opposition may laugh but these measures meet real needs. They deserve a positive response. They should provide what the Opposition claim they want to see provided—an opportunity for many of the long-term unemployed to undertake useful work to their own benefit and that of society as a whole. Unemployment is indeed a tragedy. If there were simple solutions, they would have been found long ago.
    Mr. Michael Meacher: Will the Chancellor give way?
    Sir Geoffrey Howe: No. I am not giving way at this stage. We have to continue with our efforts to get the economy back on the right lines. Against an unfriendly world background, these efforts are beginning to pay off. There is no reason now to depart from the steady economic

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    policies that we have adopted. To abandon those policies would be to abandon the prospects of success. They have led to massive gains on inflation, which should not be ignored. They are creating, and have created, conditions for falls in interest rates. They will lead to further progress on inflation and on output. To give up our policies, as the right hon. Member for Chesterfield has urged, would be to give up the real chance that we now have for a lasting, improved economy and for a sustained reduction in unemployment. I commend the amendment to the House.
    Hon. Members: "Resign".
    5.23 pm
    Mr. Joel Barnett: Few hon. Members will, I think, disagree that the Chancellor is guilty of the most appalling complacency if he really believes that his economic policies have been succeeding over the past three years. Even worse is the fact that he attempts to mislead people outside the House into believing that there is the slightest prospect of these policies succeeding in the future. I hope that the right hon. and learned Gentleman realises that his speech today has convinced no one. Indeed, the miserably small reflationary measures announced yesterday and those that hon. Members have heard about today will have a virtual nil effect over what was already known from the Budget.
    I understood the Chancellor to say—he will no doubt correct me if I am wrong—that even these miserably pitiful community measures are already within planned programmes and will therefore have no effect other than that already planned in his Budget. There is no real economic consequence of the measures that he has announced today. That is the assumption that hon. Members must draw from the Chancellor's remarks.
    My right hon. Friend the Member for Chesterfield (Mr. Varley) was understating the case against the Government when he condemned the Chancellor's strategy, which the right hon. and learned Gentleman now says that he proposes to continue. He has persisted stubbornly with policies that have failed devastatingly, with harsh consequences not only for the unemployed and their families but also for family companies that one had imagined Conservative Members came to the House to see sustained and improved.
    It is precisely those companies that are going bankrupt in their tens of thousands, as shown by the latest figures on liquidations and bankruptcies. Yet the Chancellor blithely says that he proposes to continue with this kind of policy. We would not believe it if we did not see with our own eyes what is happening in our constituencies. We would not have believed that the Chancellor, supported by Conservative Members, could watch these companies going into liquidation with the consequent effects on millions in families up and down the land.
    Any strategy pursued by any Government, at this time or any other, must seek to curb inflation and to improve productivity. No one doubts, I hope, the need for action on those two fronts. There is no evidence that anything that the Chancellor has done in the past three years has had any meaningful long-term effect on either problem. If, in the short term, one depresses the economy sufficiently, one will bring down the rate of inflation. That is what has been done.
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    As for improvements in productivity, it is known that the minute an upturn occurs in the economy, the productivity gains that may have been achieved from the massive increase in unemployment will disappear like snow in the summer. We know that this will happen because nothing fundamental has been done about the problems of productivity.
    The policies pursued by the Government and the Chancellor in the past three years consist primarily of massive deflation and little else. They can only result in the economic and financial situation and the tragic unemployment seen today. Even worse perhaps than the effects of the Chancellor's policies on unemployment have been his actions in frittering away the benefits of North Sea oil. Of all the Government's terrible deeds, this is probably the worst. The benefits have been frittered away on maintaining levels of consumption that the country could not afford, given the fall in GDP seen in the past three years. I put this question to the Prime Minster some time ago.—[HON. MEMBERS: "The Chancellor is not listening."] I am grateful to my hon. Friends. I am sure that the right hon. and learned Gentleman can listen to two conversations at the same time. He must be able to do something miraculous. He has not been able to do it with the economy.
    The benefits of North Sea oil, frittered away by the Chancellor, should have gone into capital investments, both public and private, to ensure that, when North Sea oil runs out, something worthwhile remains. No Chancellor can be guilty of anything worse than the manner in which the right hon. and learned Gentleman has seen to it that we have eaten the seed corn. We have eaten it with a vengeance. Millions of people and future Governments will pay bitterly for what he has done.
    The rest of us could feel equally guilty of seriously misleading the public if we promised, or even implied, that there was some simple solution to the huge problem of unemployment. I say that whether it be the solutions of import controls, leaving the Common Market or pumping huge sums into the economy.
    Import controls, other than selectively, and leaving the Common Market would almost certainly result in increased unemployment. Pumping in huge sums would quickly lose more jobs than it created if it simply went into higher wages. I hasten to assure the House that I am not suggesting that we should not be pumping in some money, but I hope to explain how.
    The message that should go from the House is the honest one not to believe in the peddlers of panaceas for our great problems. It does not mean that nothing can be done, but it is strictly limited and heavily circumscribed by the extent of any agreement that any Government can obtain with the trade union movement.
    With that major qualification, I should wish to see a substantial reduction in interest rates that would result in a fall in the exchange rate much faster than anything that the Chancellor has suggested that he is prepared to accept. I should wish to see an increase in tax thresholds to help those who are on the lowest incomes. At the same time, we should increase social security benefits, which would equally help those on the lowest incomes who have been hit so hard in the past three years.
    I should then wish to see substantial increases in capital investment in the public and private sectors with some assistance from the Government, in the way that it was done by the Labour Government, when, with the selective

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    assistance of about 25 per cent. of the cost of new investment over a short time span, we achieved substantial increases in investment in the private sector.
    These are some of the things that should be done, and they would mean a major reversal of the Chancellor's strategy. It would not be too bad if we had that, as I hope many Conservative Members will recognise. None of those things would reduce unemployment much. They could quickly increase unemployment and inflation without the kind of understanding, to which I have referred, with the trade union movement, on what we have called in some of our documents an "economic assessment". I understand why those words are used rather than what is presumably meant by my right hon. Friend the shadow Chancellor—some form of voluntary incomes policy—although I do not expect him to agree with me just now.
    Those who dismiss that suggestion must answer the question "What is the alternative?" We have seen what happened under the Government. Their incomes policy is a massive increase in unemployment to hold down incomes, which is the worst possible way, hitting hardest those on the lowest wages. I have never pretended that it would be easy to achieve such a voluntary policy, particularly as it needs to be achieved over a long time. It must be acceptable not only to the trade union leaders and any Government, but to trade union members. That was the failure of past incomes policies and would he the failure again.
    I have no doubt that achieving such an alternative strategy would be extremely difficult. That is why I am somewhat pessimistic about achieving it. I also have no doubt that there is no chance of a Government headed by the right hon. Lady, running policies that are primarily designed to control incomes by unemployment, achieving such an understanding.
    Mr. Dennis Skinner: While it might be easy for a Government to try to put an incomes policy on, and build a fence around, hundreds of thousands of Health Service workers, firemen, dustbin men and many others, can my right hon. Friend tell me whether any Government have succeeded in putting a 5 per cent., 10 per cent. or zero per cent. incomes policy around an accountant or an estate agent?
    Mr. Barnett: I find my hon. Friend's views on these matters conservative. I know that in my constituency the lowest-paid workers did best when we had an incomes policy with a flat rate increase of £6 a week and increases at levels that they had never had in their lives.
    Mr. Skinner: The right hon. Gentleman still lost the election.
    Mr. Barnett: We shall never achieve fairness in our society when those who are top in our society are able to get the most for themselves while those at the lowest end of the incomes scale receive the least. That is not fairness, equity or the kind of policy or society that my hon. Friend should want to see.
    As I was saying, before I was politely interrupted—politely by my hon. Friend's standards—I remain convinced that the Government have no chance of achieving any understanding with the trade union movement, no matter how reasonable the trade unions may
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    seek to be with the Government. Equally, the alliance, with its similar policies to those of the present Government, would not have a chance.
    Only the Labour Party could achieve this understanding. Therefore, our greatest need is to have a Labour Government at the earliest opportunity. That is not because I am satisfied that it will be a simple matter, but because it is the only way to solve these economic, industrial and unemployment problems. If the first priority for any Government or any hon. Member is to make a start on bringing down these devastatingly high Levels of unemployment, we can do so only by an understanding with the trade union movement, without being guilty of promising that we can solve these problems by the use of miraculous measures that do not exist.
    For the moment, I hope that some Conservative Members, including some within the Cabinet, will recognise that no matter how much they may still believe in some of the dogmas that they espoused in the last election campaign, and which are still being spoken of by the Chancellor, they must bring pressure to bear on their right hon. Friends to ensure that they get some change. Otherwise, they will not achieve any reduction in this devastatingly high level of unemployment.
    5.38 pm
    Mrs. Angela Rumbold: I am grateful to you. Mr. Speaker, for giving me the opportunity to address the House. I understand that it is customary to pay tribute to my predecessor, and I should like to do so. Mr. Bruce Douglas-Mann gave a great deal of assistance to the House in housing matters. Similarly, the constituency was grateful to him for his help on matters of local interest and work in the constituency.
    I wish most of all to draw the attention of the House to Mr. Douglas-Mann's integrity and honour in deciding, once he had changed the political stance on which he was elected both in 1974 and 1979, to return to the electorate and ask it to give him a further mandate to remain as a Member of the House. Would that many other hon. Members would follow that example.
    I also follow tradition in mentioning my constituency. Publicity in the by-election created the somewhat false impression that Mitcham and Morden is a dusty London suburb. London is made up of a series of villages that have merged with the metropolitan sprawl, and the people of my constituency have merged in a similar way. However, there are many fine examples of architecture, such as Morden Hall, the Canons and Eagle House, to name but a few.
    It is easy to overlook the many green spaces in both Mitcham and Morden. Morden Park is a beautiful park and it is enjoyed by many of the residents. The green space of Mitcham Common, 440 acres of it, is also greatly enjoyed by the residents. We have, too, a cricket ground which enjoys, with Hambledon, the distinction of being the only one which has been in existence for 275 years. It is the oldest cricket club in the world. I have therefore gained the impression that the friendly people of Mitcham and Morden are rightly proud of their amenities. I share that feeling, and I shall seek to improve those amenities, wherever possible.
    Like many other outer London constituencies, we have an aging population. In Morden, we have the Haig memorial homes, which provide housing for retired men and women who have served in the Forces during the past

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    two world wars. For their sake, I hope that the Government's fight against inflation will be successful, because they are the people who suffer most when inflation overtakes them, particularly those on fixed pensions.
    I welcome the announcement of my right hon. and learned Friend the Chancellor of the Exchequer that there will be further investment in enterprise zones for industry. In Mitcham and Morden, many of the people who work locally are employed in light industry. Commerce and office jobs are not predominant. However, we have four substantial industrial areas, of which the largest employs about 500 people. When I was speaking to one of them—Morfax—last week, I discovered that its main concern, if it is to continue, is that interest rates should be lowered, and also commercial rates, which impose a huge burden on commerce.
    I share my right hon. and learned Friend's view that the present level of unemployment is something that we must deplore—as much as anything, because we in this country believe that work is the essential way to prove a man's or a woman's worth. However, I am not alone in believing that if the economy is healthy and the Government are not creating false jobs by borrowing money, unemployment, as we have it today, is something that we shall have to live with for a few more years.
    That brings me to the young. The right hon. Member for Crosby (Mrs. Williams), in the debate of 21 June, admitted that this is the first Government to introduce sensible training measures in the new training initiative. Here I should like to make two points. First, it is important, if the initiative is to work, that the new school leavers should be given credit for being anxious to prove that they can do a useful job. Therefore, we must be sure that everything that we provide for them is seen to be highly valued. If they go to employers for training, let them do it as a job. Let them work for five days a week, so that they can be seen to be doing something useful in society. Employers will prefer it if young people work for five days a week, and work for a qualification during the evenings, or possibly for periods of a month or a week when they are given time off. The young are not afraid of hard work, although sometimes we seem to think that they are.
    Secondly, the courses that we offer in connection with the youth training initiative, in polytechnics and colleges of further education, should be directly related to likely areas of employment. In Merton, our technical college has done something which should be brought to the attention of the House. It has started courses which are of general benefit to young people who wish to pursue sensible careers. It runs a course for repairing motorcycles—not motor cars. It has also started a course for the renovation and repair of musical instruments. Those two unusual courses will provide employment for young people in my area and elsewhere, and it is such courses that our schools, colleges and polytechnics should consider, instead of training for jobs which will not exist in the future. The most important task of the present generation is to harness the enthusiasm of our youth so that it can work for the future for the coming generations.
    5.45 pm
    Mr. Cyril Smith: First, I congratulate the hon. Member for Mitcham and Morden (Mrs. Rumbold)
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    on her maiden speech. It was a capable speech and one to which she had clearly given much thought. I have cause to thank her for the tribute that she paid to her predecessor, Mr. Bruce Douglas-Mann. As she rightly said, he is a man of integrity. I listened with interest, as I am sure the House did, to what she said about her constituency, and the tour on which she took us around it. She expressed concern for her constituents. I am sure that we all believe—I certainly do—that she will serve her constituents to the best of her ability. We look forward with pleasure to the many occasions during the next Session on which we hope she will address the House.
    Before the House rises, it is right to draw attention to probably the most serious problem facing this country at present—unemployment. We should be grateful to the official Opposition for tabling a motion on their Supply day on this important subject. Having listened to the Chancellor of the Exchequer this afternoon, I am bound to say that I have more faith in the forecasts of the CBI than in his. I am sorry to have to say that. I wish that I could attach more weight to what he said than to what the CBI says. However, as one who has a small business—a business that is very much a supply industry to large engineering companies—I must tell him that my experience is much more in line with the CBI's forecast than with the optimism that he expressed this afternoon.
    Whatever one thinks of the Government, it must be said that on employment—or, rather, unemployment—they have failed the country miserably. They may have a capacity to solve wars created through their own incompetence, they may succeed in screwing down wage levels by insecurity of jobs, instead of a proper incomes strategy, such as was called for in what I thought was an excellent speech by the right hon. Member for Heywood and Royton (Mr. Barnett), they may even manage to reduce inflation to a level which is almost, but not quite, as low as when they took office but they are clearly incapable of controlling the rise in the number of jobless. I use the word "incapable". Perhaps I am misjudging the Government. Perhaps it is not that they are incapable of doing 'it, but simply that they are unwilling to do it. Many of us suspect that to be the truth.
    The Government talk about controlling public expenditure. This afternoon the Secretary of State for the Environment made a great speech about controlling public expenditure. What the Government fail to say is that, far from controlling public expenditure, the rising level of unemployment greatly increases it. The right hon. Member for Chesterfield (Mr. Varley) quoted the figure of £15,000 million—£15 billion if one wants to roll it off the tongue—as being the annual cost of keeping over 3 million people on the dole. That figure was not challenged by the Government Front Bench. We are paying £15 billion a year to people not to work.
    Many hon. Members believe that it is possible to channel a proportion of that money into paying people to work instead of paying them not to work. It is as simple as that. The nation is crying out for houses and house improvements, new hospitals and better roads. Yet there are skilled bricklayers and engineers on the dole. Teachers who have been educated at public expense, many of them leaving college this summer, are being paid not to work when the Government could pay them to teach children and thereby further to reduce the size of classes.
    We talk of closing railway workshops, when we have a clapped-out railway system that needs modernized

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    rolling stock, and of electrification of railway lines. Thousands of elderly people need a little help to prevent them entering institutions. We have people able to provide that help but they are paid to stay on the dole.
    Scores of miles of sewerage installations and water pipes desperately need to be replaced, particularly in the Manchester area. There are men capable of doing that work, but we pay them to be on the dole and to do nothing. We fail to take steps that are open to us to conserve energy when we know perfectly well that the cost of energy is rising and that sources of supply are limited. It is a mad situation.
    I understand the Government's constant pleas about the need for industry to sell and to create demand. However, when the buyer is the State, or an agent of the State, and it refuses to buy because the State refuses to provide the necessary wherewithal, what is private industry expected to do? I do not believe in creating false jobs. I accept that we cannot easily escape a high level of unemployment. However, neither do I believe in frittering away millions of pounds of taxpayers' money to rot people's souls while they linger in the dole queues.
    There are men in their early fifties who know in their heart of hearts that their employment prospects are now finished. Teenagers are learning, with disastrous consequences for our future, that it is possible to live in this world without working. Young couples who took out mortgages in good faith now find themselves unable to cope with them, and, as I said earlier, there are university graduates leaving college this summer who know full well that their training, certainly in the immediate future, has been wasted.
    Unemployment is about people and their souls. The Government stand condemned for their callous disregard of the plight of those people. Their plight is as much related to emotion and dignity as it is to economics.
    In addition to meeting many of the needs in the public sector, to which I have already referred, we should stimulate the private sector. If we were to stimulate the public sector in some of the ways to which I have referred—investment in the railways and sewerage replacement schemes—that would help to stimulate the private economy as well.
    There are many other ways. We have heard a great song and dance this afternoon about how the national insurance surcharge—the tax on jobs that was introduced by a Labour Government—will be reduced next week. Some hon. Members believe that that should be not only reduced, but abolished.
    We agree that the Government have reduced interest rates in the past 12 to 18 months, but from what? They have reduced the highest rate of interest that any Government have ever imposed on the private sector.
    I accept that local government must play its part by properly controlling rates and rates increases. However, with respect to the Government, it is a little disheartening to councils which are making strenuous efforts to reduce local expenditure to find at the same time that grants are cut because they cannot reduce expenditure as much as the Government are demanding.
    In an attempt to meet the future needs of the nation, we must have training and retraining. I give the Government full credit for the training schemes that they have introduced, but, at the same time, they are abolishing many first-class industrial training boards. We argued about that in the House seven days ago. There is much
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    about training and retraining that still needs to be sorted out. Many new attitudes must be struck. Is it not ludicrous that a person can become a doctor, a dentist, an accountant or a solicitor at the age of 21 and over but be too old to become a skilled engineer?
    This afternoon the Chancellor mentioned some palliative measures that are supposed to help. He said that 11 enterprise zones will be created in addition to the 11 already existing. He gave one interesting statistic. He said that one of the zones—I think that it was in the North-East, but I stand to be corrected—had attracted more than 100 firms, 50 of which were new businesses. The implication is that 50 were old ones. Therefore, those 50 had shifted from areas that were not enterprise zones in order to obtain the benefits available in enterprise zones—benefits being paid for by the British taxpayer. Such benefits will be enjoyed at the expense of those not in enterprise zones who will be less competitive as a result and have to pay full rates and taxes and put up with the planning boards. The one thing that they have in common with those inside the enterprise zones is that they have to sell in the same markets.
    Mr. Michael Ancram: I think that the hon. Gentleman is referring to the enterprise zone on Clydebank, to which my right hon. and learned Friend the Chancellor of the Exchequer also referred. He has made much of the "old firms" that are moving in. Is he aware that some of the old firms might not have survived if they had not moved in to take advantage of the tax concessions and that would have led to job losses?
    Mr. Smith: The hon. Gentleman writes his own epitaph for the Government. He is absolutely correct. Thousands of firms have not been able to move into enterprise zones, and consequently they have not survived. That is what the debate is all about.
    Mr. Jim Craigen: I am not sure whether the hon. Member for Edinburgh, South (Mr. Ancram) is advocating that there should be sheltered employment conditions for those moving into enterprise zones. As I understand his philosophy, such firms will go to the wall anyway.
    Mr. Smith: I agree with the hon. Gentleman. I had more regard for another part of the right hon. and learned Gentleman's speech, and I was somewhat surprised by the reaction of the official Opposition. I believe that job sharing must be considered seriously. The country will have to accept unemployment in future, whatever Government are in power and whatever system we adopt. Job sharing may be one of the solutions to prevent long-term unemployment. I welcome rather than condemn that part of the Chancellor's speech. Job sharing is worth a try and it is worth considering. I commend the right hon. and learned Gentleman on that part of his speech.
    The Government lack the will to fight unemployment. They do not lack the necessary resources, but they certainly lack the will. More than 3 million people are unemployed, and their numbers are rising. That is the Government's record, and it is disgraceful.
    The remedy does not lie in more State control. As the right hon. Member for Heywood and Royton said, the remedy does not lie in withdrawing from export markets that are now open to us, in general import controls or in dividing the nation. The remedy lies in uniting and leading

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    the nation as a whole in a new crusade which will require self-restraint in return for security. It must be a crusade which creates a working partnership between capital, labour and Government. The nation needs a new beginning, new attitudes and new ideas. I believe that neither the Government nor the official Opposition are able or willing to provide that new lead. That is why I believe that Britain's future lies in the new political alliance.
    6.3 pm
    Mr. Edward du Cann: It is an unusual pleasure to agree with the hon. Member for Rochdale (Mr. Smith) in two respects. I refer, first, to the tribute that he generously and correctly paid to my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) for an important and remarkable maiden speech. It was a fine speech, beautifully constructed and beautifully delivered. I hope that my hon. Friend will enjoy a long, useful and happy career in this place. I am sure that she will.
    Secondly, I agree with the hon. Member for Rochdale that this is a most important debate. I make no excuse for repeating a remark that I made in the public expenditure debate in April 1981. One can advertise that the recipe for success in the House is consistency and persistence. I said then that the unemployment level was intolerable. It stood then at 2·5 million and it is now almost 3·2 million. If the level of unemployment was unacceptable in April 1981, it is even less acceptable now. I recommended then—not for the first time—what I called a programme for national economic recovery—in other words, a new initiative. If that was appropriate then, it is even more appropriate now. We cannot continue as we are.
    I wish to make what I hope the House will consider to be some constructive suggestions. Before doing so however, I say clearly to my right hon. and learned Friend the Chancellor of the Exchequer that I support strongly the thrust of the Government's policies and their objectives, which he reaffirmed this afternoon.
    As the right hon. Member for Heywood and Royton (Mr. Barnett) has said, inflation is the No. 1 enemy of society. I thought that the right hon. Member for Chesterfield (Mr. Varley), who opened the debate on behalf of the Opposition, was wrong and perhaps a little unfair when, in his powerful speech, he failed to acknowledge that our national balance sheet has some pluses.
    In the past three years we have made great gains in the reduction in the rate of inflation. We have made great gains also in productivity in our nation, in industry, in containing unit costs and in competitiveness. Fewer days are now lost in industrial stoppages. We have a strong balance of payments that has enabled us to repay much foreign debt. The strength of the United Kingdom's position was shown during the military campaign in the Falklands when the pound remained strong. Indeed, we hear from hon. Members on both sides of the House that the pound is overvalued by contrast with the dollar. That is all the more reason why we should see not a small reduction in domestic interest rates but a substantial one. I know that that is a cause that my right hon. and learned Friend has at heart. We can very well stand such a reduction.
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    Above all, among the pluses for which my right hon. and learned Friend deserves much of the credit, there is a refreshing note of realism in the country. There is much greater realism now than in the past years in the approach of our people to the country's economic problems.
    This is no time for us to lose our resolve. The United Kingdom's inflation rate is still above the rates of Germany, Japan and the United States and it must come down further. It is still public enemy No. 1. We must hold the gains that we have made and continue their pursuit. Speaking generally, the public sector has yet to match the private sector in its reform and adaptation to the needs of this competitive age—for example, the abandonment of restrictive practices and economy of labour. There is a distance still to travel and in some of the State services, such as the National Health Service, the distance is considerable.
    As we take stock before the Summer Recess we can rejoice, and we should rejoice, that the direction now is identified and certain. We may bewail the lost opportunities of the past, the chances of reform which we never took. My right hon. and learned Friend was right when he said that it is all so much harder now at a time of world recession. The current cost is fearful. We see closed factories and a shrunken industrial base. As the right hon. Member for Chesterfield said, manufacturing output is 15 per cent. lower than it was three years ago. Speaking as one who has responsibility for the management of businesses, I never hear of new factories and work places opening on the scale that I see old ones closing. The truth is that we have a crisis, and it is just as well to acknowledge it plainly.
    I believe in the keenest possible degree of free trade. I believe in competition. Does my right hon. and learned Friend the Chancellor agree with me when I say that it is wrong that we should give such liberal access to the United Kingdom market? I am beginning to believe that, in certain respects, we are far too liberal with our markets. If we give people from overseas free access to our markets we should insist on reciprocity and, if we do not get it, we should consider alternative policies. We must now say plainly that our first duty is the nurturing of United Kingdom interests.
    We could have a whole debate on imports but meanwhile, as the hon. Member for Rochdale and others said, and as we all know, unemployment rises and it will certainly rise further. I repeat that now is no time to abandon or mitigate the central objective of policy, which is the further reduction of inflation, but it is high time to cry halt to the increase in unemployment and to attempt to reverse present trends. However, let the Opposition be in no doubt that the trend has endured for a considerable time. Under their Administration unemployment first doubled.
    Mr. David Winnick: Not at this level.
    Mr. du Cann: No, not at this level, but the trend was established then. Let it also be understood that there is no magic formula for dealing with unemployment. As my right hon. and learned Friend said, within the context of world recession the difficulties are immense and we may not be able to succeed, but the attempt can be made without damage to the Government's strategy. It must be made, because, like inflation, unemployment is a scourge,

    961
    a waste, an evil that is potentially destructive of society and damaging to individuals and sometimes to whole communities. It is a despairing thing that cannot end unless we take action.
    I first draw attention to the fifth report from the Treasury and Civil Service Select Committee that covers the Government's expenditure plans for this fiscal year, 1982–83 to 1984–85. That report merits the serious attention of the House.
    Paragraph 15 says:
    "In the past we"—
    the Committee—
    "have urged the Government to raise significantly the proportion of public investment within the total of public expenditure."
    At this point an earlier report in which the same suggestion was made is referred to in the footnotes. The report continues:
    "But in 1981–82, plans for current expenditure in cash terms appear to have been exceeded,"—
    in other words Government have continued to spend more than budgeted for on administration—
    "whilst those for capital expenditure have suffered a significant shortfall"—
    the House may think that that is serious enough—
    "and the Government do not appear to be taking any steps to bring the situation back to the course they originally intended."
    We wish to know whether that is still true.
    "General government investment is estimated to be £671 million, more than 10 per cent., below the level planned."
    The House will agree that that is a very large figure for a shortfall.
    I now quote from a table on the same page of the report. It shows total public fixed investment as a percentage of total public expenditure including debt interest. The House will be interested to know that the table shows that for 1976–77, the percentage was 17·7 per cent. and that for last year, 1981–82, the estimated outturn shows the proportion reduced to 10·7 per cent. To be fair, the plans for 1982–83 estimate that that figure will rise slightly to 11·4 per cent. but I daresay that hon. Members on both sides of the House will agree with the comment of the Committee:
    "This is a profoundly disturbing trend."
    Administration expenditure goes up continually, while capital investment as a proportion of Government expenditure continues to fall.
    Table 3 of the report shows public expenditure by economic category in cash terms and includes the nationalised industries. I shall not quote the figures but read one sentence from paragraph 17:
    "There must be considerable doubt as to whether the forecast increase in nationalised industry investment will occur."
    That is also a serious matter and it would be helpful to have the Government's comments on it.
    We should set out deliberately to change the balance between capital investment and current items. It is a severe weakness in the Government's record that a greater proportion of public expenditure continues to be spent on administration and a lower proportion on capital items. My aim is that we should invest increasingly in the future and less in the present.
    The United Kingdom's only hope for survival depends on the best use of our manpower, which is our greatest asset. As unemployment grows, the Government's endeavour to achieve that, especially in the public service—which I strongly support—will come under increasing pressure. There was evidence of that in the speech of the hon. Member for Rochdale. It may even be
    962
    at risk if the nation decides against it on social grounds. That would be ironic, for it would mean that all the sacrifices of the past three years have been in vain. That is why I argue strongly that the Government should follow the logic of their arguments more thoroughly. Of course we must reduce overmanning, increase efficiency and make restrictive practices harder to maintain, but we must not ignore investment, which is the seed corn of future employment.
    Mr. Sidney Bidwell: Does not underspending on capital investment flow inevitably from mad monetarist theories? Does not an increase in capital expenditure under Government control mean a turn away from those theories?
    Mr. du Cann: No, it does not. We require more attention to be paid to the ordinary business of management.
    Second, I propose an initiative and repeat what I have argued previously. We should set up a national economic recovery programme and I hope that my right hon. Friend the Prime Minister will set up a small task force for that purpose. It could include one Minister, two people with practical experience of industry, one representative of the nationalised industries, two financial experts with experience in accountancy and consultancy and two people from the City of London with experience of putting money to work. Nowhere in the world is there greater experience of that than in the City of London. That team should be given a clear objective: to identify potentially profitable capital projects and to mobilise the necessary private capital to finance them. We must remove all obstacles to doing that and speed decisions.
    I remember well, when I was at school in the years immediately before the Second World War, cutting out from newspapers pictures of the new Cunard liners that turned out to be great assets for Britain. The list of projects that could be financed privately is enormous. We require only the determination to find them, bring them out of the cupboard and finance them. Huge sums are available for the purpose. Hon. Members should examine the money that flows into pension funds—the Wilson committee estimated that it would reach almost £10 billion a year. Thirty per cent. of all equities quoted on the Stock Exchange are now owned by pension funds. There is an argument about whether we should regulate pension funds. I would rather provide a series of new investments that would attract them and the private saver. It is better that they finance specific projects than be swallowed up in the maw of the City's new growth business—the gilt-edged market. As savings they would be non-inflationary.
    It was disappointing, when the chairmen of the nationalised industries appeared before the Treasury and Civil Service Select Committee a little while ago, that they seemed to be short of ideas on projects. I suggest that the reason is that so often in the past they have been disappointed. As the hon. Member for Rochdale said, there is now a marked deterioration in our infrastructure. The scope for remedial work is substantial. I do not argue, as the CBI and the TUC do so carelessly, that we should spend, spend, spend our way out of the recession. We should be selective and choose only the projects that are economically viable. Something like that has to happen or many of our services will break down sooner rather than later.

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    As my hon. Friend the Member for Horncastle (Mr. Tapsell) suggested in his intervention, there is good sense in encouraging our depressed construction industry, which has no propensity to import and, unlike other industries, is labour intensive.
    However, above all at this time of crisis we should do our utmost in the House—and the Government should—to bring practical hope and encouragement to British managers and work people. We cannot say truthfully that people have a right to work. We can say that society and the House of Commons have a duty to provide and organise the conditions that enhance a man's prospects of an honest opportunity to work, and all the self-respect that goes with it. That, in particular, we owe our people.
    6.21 pm
    Mr. T. W. Urwin: I congratulate the hon. Member for Mitcham and Morden (Mrs. Rumbold) on her excellent maiden speech. I trust that, if only for her sake, she will always be listened to in the House with the same attention that she received today.
    One cannot speak in this debate with anything other than a heavy heart because of the gravity of unemployment. More than 3 million people are now registered as unemployed. An additional unidentifiable number do not take the trouble to register. There is now a record level of unemployment, and I regard this debate as one of the most important since the Government assumed office three years ago.
    Inevitably attention is drawn to the absolute failure of Government policies, as my right hon. Friend the Member for Chesterfield (Mr. Varley) cogently argued. Despite the Prime Minister's strong protestations about economic recovery, I must tell her and the Chancellor of the Exchequer that the optimism that they generate so easily is by no means shared by my constituents. Nor is it shared by millions of people throughout the country. It is not accepted or supported by the CBI or the TUC, both of which persistently call for expansionary measures to be introduced into the economy. As other hon. Members have said, the forecasts of the CBI are much more reliable than those of the Chancellor of the Exchequer.
    It is also inevitable during such an important debate that reference should be made to regional aspects of unemployment. The ugliness of regional and local scars will be exhibited not with relish but with dismay and distrust as they appear because of the policies pursued by the Government. Therefore, I make no apology for referring to the level of unemployment in the Northern region, which at present is 17·5 per cent. and is still rising.
    There are five black spots in the region where the figures are worse than average. They include my area of Wearside where one man in four is unemployed. That means that more than one person is unemployed in some households, creating difficult problems for the domestic economy. In the region redundancies are continuing at the highest levels since the 1930s. Almost 100,000 jobs were lost in 1980 and 1981. Sadly and tragically, there are few vacancies for the people rendered unemployed. We have hundreds of people chasing after one job. Worse still is the evidence that industrial demand, which is already desperately low, is likely to decline further.
    Long-term unemployment, the common lot of too many people, causes despair and frustration. It creates
    964
    disharmony in families. It can and does affect whole communities. Studies and research have revealed that physical and psychological illnesses can be triggered by long periods of unemployment.
    I turn, all too briefly, to youth unemployment. It is sad to reflect that the nation is in the process of wasting a whole generation of young people. They have no prospect or possibility of obtaining employment. Even those with academic qualifications suffer the same fate. Currently 25,000 school leavers are looking for a first job and another 18,500 are kept off the register only by participation in various youth opportunities schemes.
    I was by no means impressed by the announcement that was made by the Chancellor of the Exchequer this afternoon about his proposals for community work. Such a scheme, although it can be given a soft and half-hearted welcome, is no substitute for real jobs and apprenticeships for youngsters coming on to the labour market.
    Youngsters today face desperate difficulties. I recall with clarity leaving school 56 years ago—that was one hell of a long time ago—and, in common with the youngsters of today, desperately searching for my first job. The right hon. Member for Taunton (Mr. du Cann) referred to his school days. I recall my school days, too. Almost all my free time was absorbed in cutting out and responding to advertisements in newspapers for the all too few jobs that were available.
    I can understand the attitude of young people today, and the eagerness and optimism with which they set out to seek employment in a highly competitive labour market. That optimism is all too quickly succeeded by feelings of resentment, bitterness, rejection, frustration, personal inadequacy and, finally, in many cases, unfortunately, utter rejection of the system that places them in such difficult circumstances. It is no credit to the Prime Minister, the Government or Conservative Back-Benchers to be able to claim that they have turned the wheel full circle in three years so that the problem is as bad as it was in 1926 if not worse.
    The use by the Secretary of State for Employment of the phrase "Get on your bike" has a hollow ring in my constituency and the North-East. Even more sadly, the Chancellor revealed today that he has no answer to the major problem of our time. Unemployment has indeed reached crisis level. The social problem that has been created requires the Government's urgent attention, and I hope that it will receive urgent attention from the Government's successor after the next general election.
    No purpose is served by talking about the problems that have been created and about cause and effect without trying to throw some light on remedial measures. I am inclined to agree with my right hon. Friend the Member for Heywood and Royton (Mr. Barnett) about the negative aspects of pursuing a policy of import control. Not only is it negative; it can have unwelcome and unsavoury repercussions. I have some reservations about accepting what he said about incomes policy as a measure of economic control. Nevertheless, I agree with what he said about the benefits that accrued to some sections of industry and the public service from the Labour Government's incomes policy. Free collective bargaining would not have produced the same benefits for those in lower income groups who received as much as £6 a week at one stage.
    Nevertheless, it is abundantly clear that there is no prospect or possibility of an incomes policy succeeding unless it is accompanied by a strictly controlled prices

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    policy. In any event, an incomes policy can bring no satisfaction to the 3 million or more people on the unemployment register. An incomes policy is an imposition for them. We must try to find solutions to what are admittedly difficult problems.
    Everyone agrees that the reduction of inflation should be the major objective of any Government. When the Chancellor and his colleagues grow self-indulgent and bestow praise on themselves for having reduced inflation to its present level, they should be aware that they have only succeeded in reducing it to about the level that it was when the Government took office in 1979. I cannot imagine how they can so easily wear the laurel wreath. That is no achievement to be pleased about. The Government's Micawber attitude must be replaced quickly by positive efforts to stimulate the economy.
    I declare an interest. I am a former construction worker, a former trade union officer and a Member sponsored by the Union of Construction and Allied Trades Technicians. I welcome the support that has been given by hon. Members on both sides of the House for the revival of the construction industry. It is nothing short of tragic that 250,000 building trade operatives are now unemployed and that 1¼ million bricks are stockpiled in yards around the country. That is enough bricks to build 120,000 three-bedroomed houses. Stimulation of that industry would cost the economy nothing, as the right hon. Member for Taunton pointed out. Local authorities and private builders should be given greater encouragement to create employment and badly needed apprenticeships as well as the houses that people are entitled to expect.
    There should be a restoration of local authorities' autonomy, free from the dictatorship of the Secretary of State for the Environment. His statement today showed clearly that he intends to create even more unemployment in local government services. He is bent on pursuing that policy. He should encourage local authorities' efforts to generate new industry in their areas. Above all, he should even now begin to think about restoring the cuts in rate support grant so that councillors who have been democratically elected as representatives of the people should once again be masters in their own house.
    The Chancellor should relax the highly restrictive cash limits that are imposed on nationalised industries, especially those that generate new jobs. The Government should cast aside their blind allegiance to political dogma which dictates their policy of hiving off profitable public assets, which invariably reduces the number of jobs in those sectors. They should halt the massive deindustrialisation process, a major contributor to high unemployment. They should harness North Sea oil resources to stimulate manufacturing industry. They should redeem their election pledge to operate a strong regional policy.
    A recent report that was issued by Tyne and Wear council reveals that assistance from regional aid schemes has fallen by 50 per cent. since the mid-1970s. The Northern region relies heavily on the basic industries, including ship repair and shipbuilding. A few days ago, British Shipbuilders dropped a bombshell about ship repair in the Northern region. Because of the present state of the market, the labour force is to be reorganised with the possible loss of 1,500 jobs. As was intimated at Question Time, that means, once again, the loss of an unidentifiable number of jobs in industries that are ancillary or subsidiary to ship repairing.
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    Shipbuilding also needs orders. I take this opportunity to re-emphasise the appeal of my right hon. Friend the Member for Chesterfield about the replacement ship for the "Atlantic Conveyor". It would not merely be tragic, it would be criminal and immoral if that ship were to be built anywhere other than in the United Kingdom, indeed anywhere other than in the Tyneside ship yards, which I understand are the only ones capable of dealing with a ship order of that size.
    Finally, the message must go out loud and clear from the House today that the Opposition have absolutely no confidence in the Government's ability to remedy this woefully difficult and pitiful situation in which more than 3 million people are on the unemployment register. Positive action is not invited but demanded of the Government in the interests and in the name of all those whose lives are being wasted through the lack of employment opportunities caused by the Government's policies.
    6.40 pm
    Mr. Robert Hicks: It is right that this debate should take place before the House rises for the Summer Recess, for two interrelated reasons. First, we must consider the full implications both for the country as a whole and for the individual families and communities involved of having 3·2 million people out of work. Secondly, the debate allows us to discuss in advance the consequences for employment if certain decisions about public expenditure are made by the Cabinet in the autumn.
    Hitherto, my right hon. and learned Friend the Chancellor of the Exchequer has placed great emphasis on the need to reduce; inflation. I believe that that was correct and he has undoubtedly been successful in doing that. Furthermore, the immediate outlook for a further reduction looks encouraging. I respectfully point out to him, however, that whereas a year or so ago inflation was probably the principal worry of the electorate, my impression is that unemployment has now become the major economic and political issue in the constituencies.
    In this context, people in work are not only anxious about their own job security and likely to become increasingly more worried if predictions of a further round of redundancies on a national scale in the autumn are correct; they are also perplexed about the economic cost to the nation of 3·2 million unemployed. As has already been stated, it is frequently suggested that the cost of unemployment to public funds is £5,000 per year for each family. At the same time, the Government give high priority to the need to control public expenditure.
    It is surely not beyond the capabilities of all concerned to devise the necessary arrangements whereby these financial resources are used for positive job creation. Such a programme would not only have the desirable effect of improving output or the extent of services provided, but go some way towards alleviating the adverse social implications resulting from unemployment.
    I represent an area in which, irrespective of the state of the national economy, unemployment is invariably between 50 and 100 per cent. above the national rate. Unemployment in Cornwall is currently 15·1 per cent. In the South-West assisted area, it is more than 16 per cent. The underlying worry that is not revealed by the figures, however, is that long-term unemployment has more than doubled in the past 10 months. Furthermore, that undesirable and distressing trend applies to all age groups.

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    That brings me to the key question of what the Government can and should do to try to reverse those trends. I appreciate that my right hon. and learned Friend the Chancellor does not wish to take any action that would prejudice his desire to reduce inflation still further. I also understand that he wishes to guard against any action that will result either in excessive pay demands or in a rapid increase in imports. Despite those constraints, however, I believe that it would be wrong, and certainly politically foolish, for Ministers to ignore the evidence of sagging levels of economic activity.
    My right hon. Friend the Member for Taunton (Mr. du Cann) talked about consistency in one's arguments and advocacy. I think that I, too, can claim that. As long ago as May last year—and perhaps May two years ago—it was clear to me that certain requirements were necessary if economic activity in this country was not to decline still further. About 12 months ago, certain Ministers predicted that the worst of the recession was over. The jargon was that the economy had "bottomed out", or some such phrase. I certainly did not see much evidence then, nor do I see much evidence now, of a gradual but sustained economic recovery. Moreover, it is not without significance that many outside organisations and interested observers who six or 12 months ago advocated caution, now say that the situation is far more urgent and that certain Government action is necessary.
    One of the tragedies of the past eight years has been that successive Governments have allowed our public works capital investment programme to be steadily eroded. It seems an appropriate moment to reverse that trend by providing long-term investment for the nation's benefit while at the same time providing short-term, much-needed employment opportunities. It should be remembered thatwe would start by saving £5,000 per annum per family. That should appeal to my right hon. and learned Friend the Chancellor from the point of view of the public sector borrowing requirement. The creation of real rather than synthetic jobs should also strike a favourable chord with my right hon. Friend the Prime Minister.
    Numerous areas cry out for such selective investment—house improvement, energy conservation, water and sewerage replacement schemes, rail electrification, to name but a few. Most of them involve the building and construction industry, which is labour intensive and does not require large amounts of imported raw materials to produce and serve. In addition, every local council, water authority and health authority has projects drawn up, but shelved, which could be implemented if the necessary funds became available. I am convinced that sufficient unused resources are available for any limited reflation that would result from my suggestions which would in no way prejudice the Government's overall economic objectives.
    It is also important to emphasise the implications for the regional economies of the United Kingdom, which urgently require—certainly the South-West does—capital investment programmes, with all the economic and social benefits that would accrue as a result.
    In conclusion, I cite the example of the far South-West and Cornwall in particular. The region is essentially non-industrial in character. Therefore, it is more dependent than most on public investment in determining the local level of economic activity. Furthermore, it has been
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    estimated that 90 per cent. of contracts in the county over the past decade or so from the public sector go straight to the private sector. Therefore, there should be no objection on doctrinaire grounds to that course of action.
    My views are well known and well established on this subject. My position within the Conservative Party is also well known. It is important that my right hon. and hon. Friends should take note that unemployment is becoming increasingly important in the minds of the electorate. If the Conservative Party is to get back to the notion for which I believe it should stand, and what attracted me to it, of being the party of one nation, we must take action on the lines that I have suggested, and quickly.
    6.51 pm
    Mr. Norman Atkinson: The hon. Member for Bodmin (Mr. Hicks) asked for growth. With dangerous ideas of that sort, he will shortly need to be positively vetted. Although he prefaced his remarks by saying that he has no wish to offend the Prime Minister, he none the less said that he wanted a little bit of growth.
    However, that was not as brass-necked as the speech of the chairman of the 1922 Committee, the right hon. Member for Taunton (Mr. du Cann), who says that enough is enough. We must certainly be getting near a general election when the chairman of the 1922 Committee calls for lower interest rates. He said that we could not go on in this fashion and continued by contradicting the Chancellor's statement and then set out his own ideas to stimulate growth in the economy. Well, that is marvellous. I welcome these progressive ideas that are starting to come from Conservative Members. The monetarists are beginning to see the error of their ways and are attempting to bring about a conversion. Although they are halfway through the tunnel and the lights have gone out, they are none the less hoping for something to happen.
    The Chancellor has obviously forgotten the criticism some time ago of the 364 leading economists in this country who condemned the Government's policies. They said that the policies were economic bedlam with no future. They predicted, in precise terms, all the tragedies that are now occurring in the economy. If any group in a profession has ever been proved absolutely right, having been totally ignored by the Government, it is the 364 leading economists who attempted to correct the Government's direction.
    As a result of the Government's actions, we have probably become the most decadent society in the Western world. We are now to have more decadence. The Government want an extension of that part of the economy that I associate with Petticoat Lane. The ideas of Petticoat Lane are being encouraged right across the economy, with small traders and small business people setting up small factories underneath railway arches. That is what the enterprise zones are made up of. They have buckets for lavatories, because there is no regard for planning agreements. They have irresponsible attitudes. They have the worst possible working conditions. Such businesses say "To hell with responsibility", and set themselves up with a bucket, a hammer and a pencil, and that is the lot. [HON. MEMBERS: "Rubbish".] If that is rubbish, hon. Gentlemen should visit existing enterprise zones. The firms there have been able to avoid their planning and safety responsibilities. The evidence is there; I need not go into detail. All the characteristics of Petticoat Lane are spreading across the economy.

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    Any visitor to London will confirm that London is the biggest rip-off in the Western world. We have the biggest black economy in the Western world. We have the biggest retail margins in the Western world. We now have the most unequal society in the Western world. All of that is due to the policies pursued by the Government.—[HON. MEMBERS: "Nonsense".] Hon. Gentlemen may smile and say "Nonsense", but I shall quote the Chancellor's own figures. He publishes them in great detail. He says that the top 25 per cent. of the population takes 53 per cent. of total incomes. Less than half of total income is shared by 75 per cent. of the people. If that is not an unequal society, what is? We are moving towards a society that is epitomised by monetarists and the like. The Government ignore the fact that the bottom 75 per cent. of our people are now virtually the lowest paid in the Western world.
    If we are considering wages, we must also consider the facts produced by the Chancellor of the Exchequer. We are talking about the lowest living standards in the Western world, but all we hear from the Government is that the trade unions have a monopoly power that must be broken. The Secretary of State for Employment devotes all his waking hours trying to devise schemes to break down what he calls the monopoly powers of the trade unions. He says that trade unionists are unfairly taking more than their share of the cake. He wants to weaken the trade unions, because he blames them for much of the unemployment.
    If ever there was an inane slogan over the past 10 years—used by my right hon. and hon. Friends as well as by the Government—it is that one man's pay rise is equal to another man's place in the dole queue. That is an inanity. It is an unjust accusation. Not one person is in the dole queue today because someone has taken more than his fair share of wage increases. I shall return to that aspect later in my speech.
    The reality was demonstrated recently when Ministers, talking privately in the City—so privately that certain commentators were able to overhear—said that we had avoided serious rationing of essentials, including food, only because our geologists and engineers had discovered oil in the North Sea. The non-oil production figures confirm that the Government would have had the country in the midst of severe rationing were it not for the discovery of oil.
    I take up the Chancellor's claim that he wants to improve the manufacturing base and look to the future with much more confidence than at present. What is the manufacturing base? The position is very revealing. The debate relates not to living standards, but to productivity. Of the total male working population—I mention men because they are the subject of much criticism by the Secretary of State for Employment—18 million are between the ages of 16 and 65. Only 11½ million of those men are in work. All the rest are students, in the Armed Forces, or self-employed. Only 4 million of the 11½ million work in the manufacturing industries. In other words, the base on which the Chancellor hopes to give confidence and go for growth consists of only 4 million men, the majority of whom are trade unionists. Yet it is alleged that through wages they are taking more than their share.
    The Chancellor has often asked why productivity is so low. I am sorry that the chairman of the 1922 Committee, the right hon. Member for Taunton is no longer present, because he commented on management and its quality. Britain has the worst management in the Western world as
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    well as the poorest management organisation. No wonder there is an appalling response from industry to the leadership that is given. This has nothing to do with trade union monopoly. It has much to do with poor wage levels, particularly in engineering.
    On 27 May, the CBI, including Sir Terence Beckett and others, said:
    "the downward trend in wage settlements must continue during the next 18 months despite the prospect of lower inflation and gradual economic recovery".
    Jobs can come only from higher, not lower, wages. As well as the CBI, the Chancellor, the Prime Minister and other Cabinet Ministers are now calling for lower wage settlements as a solution to our problems. That ignores the fact that Britain is now at the bottom of the Western wage league, excluding the Republic of Ireland. If it were not for trade union monopoly power, I wonder where we would be.
    Mr. Geoffrey Dickens: Probably at the top.
    Mr. Atkinson: The hon. Gentleman and his colleagues misunderstand. They say that the trade unions have such a grip on industry that they have squeezed massive wage agreements from the employers. Yet we are at the bottom of the wages league.
    Mr. George Park: When my hon. Friend worked in industry, was he ever given a voluntary wage increase without asking and pressurising his employer for it?
    Mr. Atkinson: Never. The Chancellor has talked about the trade unions standing in the way of productivity. Yet neither he nor any of his colleagues can name any productivity agreement that has been turned down by the trade unions in the past 10 years, certainly not in the engineering industry.
    This obsession with low wages exposes a monetarist snake pit. It is an attitude about which I am concerned. That is what worries me about incomes policies and so on. Certainly, when the former Labour Prime Minister talked about 5 per cent., it was contrary to reality at that time.
    In February this year, average manual wages for men over 21 were £121·90, and the national average for non-manuals was £163·10. Skilled workers received £133 for 43 hours—£3·10 an hour. Lord Matthews may talk about high wages among shipyard workers, but in February their hourly rate was:£3·10. He conveniently forgot that he makes no complaint about paying £15 an hour to his linotype operators in Fleet Street. He does not seem to worry about that, because they deliver and get the Daily Express out each night. I appreciate that overtime and night payments are included in that figure, but that is what a linotype operator earns.
    This argument about unit labour costs is not about earnings. The fact is that unit capital costs are low. That is never mentioned when we discuss productivity. It is because of their obsession with supply and demand that Conservative Members are worried about the demand side of the equation. That is why they try to give credence to the allegation that workers are taking more than their share. That is why they attack wages.
    This afternoon, the Secretary of State for the Environment announced further cuts in public expenditure. He ignores the fact that, even if public sector borrowing is aggregated with private sector borrowing, the

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    total is less than total savings. Therefore, there is no inflationary ingredient in the borrowing requirement. That is even less the case if transfer payments are excluded from the borrowing requirement.
    There could be a massive extension of borrowing and the use of public funds in some areas to provide the stimulus that the economy needs. There is no reason why we should not have a reduction in our high interest rates—there could even be variations—to create jobs.
    It is an outrage that hard-hit industries should have to pay the same interest rates as the leisure industries. Surely favourable advantage should be given to the industrial sector, but, instead, the Government are trying to control inflation by lowering demand.
    I return to the argument that one man's pay rise is another man's place in the dole queue. It is nothing of the kind. We must start talking realistically about decent wage rates. That is where the stimulus will occur. Only when we talk about realistic wage levels will we get the response that is necessary from those working in industry.
    We can learn a lesson from international leadership in the multinationals, some of which have very good management teams. They have talked realistically about decent wage levels and have had a response from their employees. Some British firms are second to none and are able to compete with the best in Germany and anything from Japan. They all pay the highest, not the lowest, wages in British industry. The firms that have the greatest buoyancy and industrial strength are those in which there is a leadership that is not afraid of high wages. They are prepared to pay people and demand delivery and accountability. Conservative Members nod in agreement, but no trade union leader has ever turned away from delivery as a result of a bargain struck. Let the occupant of the Government Front Bench name one trade union leader who has gone back on an agreement that he has made?
    The Secretary of State for Employment (Mr. Norman Tebbit): I do not have to go further than refer the hon. Gentleman to the remarks made by Lord McCarthy, the leader of the Trade Union Council and many others, about the productivity agreements which have not been implemented on British Rail.
    Mr. Atkinson: Is it not the case that the Government were asking British Rail drivers to drive more miles for less money? Was not McCarthy talking about more miles for less money? That is what they were arguing about. Flexible rostering means that drivers are required to drive more miles for less money.
    Mr. Tebbit: I hesitate to discuss in detail the difficult affairs of British Rail across the Floor of the Chamber with the hon. Gentleman, who seems to have become detached from the events of the past few months. He should go to the NUR headquarters and chat with Mr. Sidney Weighell who would be willing to explain carefully to him how drivers, guards and other NUR members have benefited from flexible rostering. They have increased not only their productivity, but their pay. The hon. Gentleman requires a lesson from his trade union colleagues before he lectures us.
    Mr. Atkinson: It is the Minister who is getting it wrong. The railwaymen fear reduced wage packets in the
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    future. They argue about it. Sidney Weighell has expressed some doubts about British Rail's future manpower policies relative to the agreements that have been made. Sidney Weighell says that the union will not in any circumstances accept one-man trains because the living standards of workers in his industry are declining. That is why the new rolling stock on the Bedford line is at a standstill. I stick to my point that where industry has good leadership, the workers have responded. It is because employers always want something for nothing that workers have turned away and refused to deliver.
    In those industries where there has been good capital investment and good machinery, there is a chance to equal anything else in the world. The way to create jobs is to have buoyancy and growth in industry. I hope that the Government will change and start to do something real about manufacturing industry, which is at the root of all our problems.
    7.12 pm
    Mr. Esmond Bulmer: The hon. Member for Tottenham (Mr. Atkinson) can be relied upon to provoke Conservative Members into feeling that some of his remarks should be rebutted. I shall resist the temptation, although I agree with him about the need for leadership in industry. I wish to concentrate on what Government action would lead to investment in industry by those who have the capacity and responsibility to take such decisions.
    I have recently had the opportunity to discuss the present position with major employers in my constituency. In Kidderminster, in common with the West Midlands, we have had the same problems which have been attracting the attention of the House for some time. Among industrialists I find that there is a general recognition that there is a limit to what Government can deliver. The problems go back for years, to the time when the Americans printed money to finance the Vietnam war and the space programme. That was followed by the oil crisis. These factors created a position in which industry throughout the free world had grave problems. There is an enormous temptation for nations to play "beggar my neighbour". I hope that that temptation will be resisted.
    I believe that my right hon. and learned Friend the Chancellor of the Exchequer can take some credit for having insulated this country from the worst of the effects of high interest rates in recent months. There is every chance that our interest rates will stay below those of America and that theirs will come down. If that happens and energy prices remain constant, there is a chance that the recovery which is developing here and there and unevenly can be sustained.
    Among people I have talked to there is a consensus that the first priority must be to continue the battle against inflation and drive interest rates down. They back the Government's policies on those objectives. They wish to see Government spending devoted more to capital projects and less to incomes. They wish to see nationalised industries behave more efficiently, and reduce the level of price increases passed to the private sector. Overall, they wish the Government to continue the fight to restore confidence in money and to create a better balance between the private and public sectors.
    I often wonder whether those Opposition Members who advocate withdrawal from the Common Market understand what effect that has on the confidence of many

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    people in industry. It is an invitation to many companies to invest on the mainland of Europe and influences many companies from abroad against investing here. I have recently returned from France. The French Government's actions have had an almost catastrophic effect on confidence. I have little doubt that those actions will be reflected by rising unemployment in the next few months.
    When I talk to my constituents I find that there is a consensus that Government and industry have to devote more time to explaining the effect of economic processes and the relationship of cause and effect. Over the past couple of years those of us who work in industry have been through a tough time, and many have found an enormous response from the people who work in our companies, and a recognition that we are all in the fight for survival. If the lessons can be learnt—of the effect of wages outstripping productivity and the price that is paid if property rights are written in to jobs—there is a greater chance that more jobs will be created in the future and that those jobs will be maintained.
    Many trade union organisers, officials and shop stewards have a difficult task ahead of them. They have to put across two paradoxes. The first is that if less is taken more will be received and that the important factor is what the money will buy. West Germany has learnt that lesson. The second is that if one is prepared to change a job one is more likely to have a job. The United States of America has learnt that lesson. That does not work here at the moment because we delayed reacting to technology for far too long.
    Companies should have joint working parties of management and trade unions to monitor the effect of technology and to assess its impact. Adjustments can then be made gradually and not as traumatically as they have been made in the past couple of years. There would then be much more creative thinking about the nature of the working week, how shifts can be altered, and how more people can be employed at the same time. I welcome the Chancellor of the Exchequer's statement about job-sharing, which could be relevant to married women and office workers, where new technology will replace many jobs in the next four or five years. That new technology will, however, create other jobs.
    The lessons from my constituency since 1974 have been plain. My constituency depends on the carpet industry. In 1974 there were more than 12,000 jobs. By 1980 that figure had fallen to 7,500 and today it is 5,800. Most hon. Members can find one major industry of which that is true. However, the lesson for Kidderminster is that the worst is now over, although there will not be any rapid pick-up. Of the 22 companies that I have spoken to in my constituency, only one expects to employ more people next year. Therefore, two further lessons can be drawn. Our dependence on small business for jobs—
    Mr. Straw: How many expect to lose employment?
    Mr. Bulmer: I would guess that the majority would reckon that they would be about the same. Nobody anticipates a dramatic drop: 2 per cent. to 5 per cent.
    I greatly welcome all that my right hon. and learned Friend has done to encourage small businesses. The second lesson is the need to support school leavers. I also welcome the support schemes that the Government have launched. However, they are no substitute for what happens in Germany. We need a far better training scheme
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    than at present and there should be a more considered evolution from school to work. Those who take the investment decisions in my constituency are looking to my right hon. and learned Friend and to the Government for several things. They want the Government not only to hold down interest rates but to create an environment in which people can feel that interest rates will fall further and in which we shall not return to the old cycle. They would like the national insurance surcharge to be abolished, but greatly welcome what the Government have done so far.
    For many companies rates remain the largest single tax and control of local government expenditure remains crucial. Those who take the investment decisions would like to see specific investment on capital account, partly along the lines spelt out by my right hon. Friend the Member for Taunton (Mr. du Cann). That applies particularly to the building industry and would, in turn, help the carpet industry through more house building and home improvements.
    The future of British Leyland is crucial to the whole of the West Midlands. The measures taken yesterday by the Secretary of State for Trade will, I hope, prove to be helpful. Opposition Members have expressed the doubt that they may lead only to the sucking-in of imports. However, we must have a viable motor industry, and there are signs that the situation is improving.
    Exchange rates remain important for many companies. The pound/dollar ratio is perfectly satisfactory to the companies in my constituency. However, those that are competing with European companies would very much like Britain to join the European monetary system. Overall, companies are telling the Government to carry on the policies on which they have embarked. In the short term they are bound to be painful, but in the long term they offer the best chance of real jobs.
    7.23 pm
    Mr. John Horam: In our economic debates we are becoming used to hearing Conservative Back Benchers give token support to their Ministers. The speech made by the hon. Member for Kidderminster (Mr. Bulmer) was the third speech in a row from a Conservative Back Bencher that put a different focus on matters from that given by the Government. We welcome that move towards understanding what is happening in the real world. I wish only that Conservative Members carried their feelings into the Lobby more often.
    During the debate there has been little dispute about the dimension of the problem of unemployment. According to the "headline" total, there are 3·2 million people out of work. The July OECD report predicts that that figure will rise towards 3·5 million by the end of the year. The long-term forecast by the institute of employment research at Warwick university suggests that more than 3 million people—again according to the "headline" total—will be unemployed during the rest of the decade.
    Although worried families mention it often, the extremely disturbing position of school leavers is perhaps less precisely spelt out. The youth task force of the Manpower Services Commission has predicted that of the 1·1 million young people aged between 16 and 17 who will be looking for jobs on the labour market, 527,000 will be in work on 1 Sepember 1982, while 584,000 will be unable to find jobs. More than half of the young people in that age group will be unable to find jobs although they are quite willing to work. It is staggering to consider how

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    the figure has worsened during the three years of this Government. Less than three years ago that figure of more than 50 per cent. was less than 25 per cent. In other words, 75 per cent. found jobs. That shows the severity of the problem.
    The unemployment problem can be tackled in two ways. First, we can ensure that demand for industrial products and services is not deficient. Secondly, we can tackle the problem directly by taking measures specifically designed to reduce unemployment. The tragedy of the unemployed is that the Government have refused to do either of these things. Those who have attended our economic debates will know that we have had a prolonged debate about a demand stimulus and the possibility of industrial recovery. That debate has lasted for at least two years. There can be no doubt about who has won the argument.
    Treasury Ministers, particularly the Chief Secretary—who is not in the Chamber today—have argued that we were about to turn the corner and that that recovery would follow effortlessly, as night follows day. However, that industrial recovery has not taken place. The Government wanted an industrial recovery and forecast it, but it has not occurred. That is the proof of their failure. Now, 15 months after the cheerful forecasts made by the Chief Secretary and others, the CBI's description of the economy is "flat, flat, flat".
    The motor car industry is giving rise to greater concern than can be remembered in the lifetime of those associated with that formerly strong industry. Import penetration is at a new peak. Investment is flagging and may be declining again. Indeed, the forecast may be for a further decline next year. Bankruptcies are mounting all the time. Small companies in particular are going to the wall and, however much rooting powder may be used to create new shoots, companies are dying faster than they can be created.
    Among small companies the number of bankruptcies is greater than the number of newly created firms. That is true. [Interruption.] The Chancellor of the Exchequer gave some pretty rum unemployment statistics. If he looks at the facts he will find that his statistics for the failure rate of small companies are equally rum. The Chief Secretary and other Treasury Ministers sit on the Front Bench like parrots saying "It's a lovely day. It's a lovely day", although it is pouring with rain outside. Not only are the Tory wets and Opposition parties calling for a reflation, but the CBI is too. As has been said, it is calling for a reflation not on a cautious note but, for the first time, with a sense of urgency. In addition, that noted financial commentator Samuel Brittan, has contributed to the debate. He pointed out that for the first time in a decade he is calling for a demand stimulus. The circumstances are so exceptional that he has joined those making that call. He is not being modest, but is talking about a £5 billion reflation being possible within the context of the medium-term financial strategy.
    However, there is little sign that the Government are listening. Comments have been made about the abolition of hire purchase controls. The Government almost glory in the fact that that was done not so much to stimulate demand as to remove controls—considered bad in terms of Government ideology. There has been a little help for enterprise zones. We have had an extension of those sensible schemes, but there has been nothing at all to
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    match the scale of the problem that we face. The phenomenon of a Government with their eyes and ears tightly closed to the real world has been commented on before. We have heard speeches such as those from the hon. Members for Kidderminster, Bodmin (Mr. Hicks) and others, who have commented on the fact that this Government of all Governments do not seem to understand industry, or do not seem to understand or even sympathise with industrial problems.
    There is a growing gulf between how the world is perceived from the Treasury Bench and how it is perceived by industrialists outside. That is an alarming and dangerous position that demands explanation. More than anything else, it requires a spot of psychoanalysis to explain how the Government have reached their present state of mind. I believe that it has something to do with the Prime Minister's inherent and profound attachment to Conservative instincts about sound money and balanced budgets, together with the monetarist intellectual climate, that has been so rampant but is now rather tarnished, and the strength of the Government's position, supported as they are by a substantial majority and a docile group of Back Benchers.
    All this has led to a type of tunnel vision with the only objective being to beat inflation. Indeed, the Prime Minister has gone on record as saying that unemployment is bad, but inflation is evil. That is the exact reverse of the truth. Inflation certainly causes inconvenience and disorder for many, but unemployment destroys people and is an affront to human rights. It is being suffered particularly by those who have the rawest deal anyway in our society.
    We need a more balanced approach to inflation and unemployment, a more rational approach to letting the public sector borrowing requirement and borrowing generally rise during a period of recession. That has been pointed out again today by no less a person than the chairman of the 1922 Committee, who asked again for a capital programme. I support his arguments, as he has supported mine in the past. I agree with Sam Brittan and my hon.. Friend the Member for Rochdale (Mr. Smith) who argued for an abolition of the jobs tax—the national insurance surcharge—rather than the pathetic cut made in the Budget.
    In addition, a substantial part of such reflationary measures must be directed towards specific job creations. The SDP has suggested, from Warrington onwards, means by which this can be done. If the Government want a non-partisan source for such sensible measures they should read the document on unemployment that was produced in another place. As my hon. Friend the Member for Rochdale pointed out, a great deal of work can be done by properly maintaining run-down council estates. We know the number of people on the ground it requires to pull round a really sick estate. We know what can be done to improve older housing and by house insulation. Indeed, the hon. Member for Horncastle (Mr. Tapsell) intervened in the Chancellor's speech to point out what can be done and what has been done traditionally by the Conservative Party in times of recession by such public works programmes. We have had little response.
    The Chancellor spoke today of job-sharing which I, too, welcome, as I welcome community work. All that that added up to, on his own reckoning, was about 100,000 jobs at the end of the day, and the day is a long time from now because the scheme is not starting until 1 October. If

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    the Chancellor reads the House of Lords document, he will find that it suggests about 400,000 jobs from such schemes at a cost, roughly similar to the Chancellor's cost, of £2 billion. That is the type of reaction that we require from the Government. It is the very timidity of the Government's reaction that gives the truest idea of their sheer lack of concern.
    Of course, as has been said repeatedly, there are no quick or easy remedies to this appalling problem. But that is not to say that there is no alternative to the Government's policies. It is not true that nothing, or next to nothing, can be done about unemployment, while keeping a proper concern for inflation. We can and should do something, but it will need a degree of compassion, a degree of common sense and a degree of commitment that the Government do not begin to approach.
    7.34 pm
    Sir Russell Fairgrieve: It always interests me when the Opposition put down the subject of unemployment for one of their Supply day debates. My reason for saying that is that it should always be remembered in such debates that it is now 37 years since the end of the Second World War, which is longer than some hon. Members have lived.
    In that period there been 11 British Administrations, six Labour and five Conservative. The interesting fact is that every time a Labour Administration have been in office during those 37 years unemployment was higher at the end than it was at the beginning of their term of office. That has not happened with Conservative Administrations. Opposition Members should remember that.
    Is there any reason why this historical fact should be broken now? Obviously, from the opinion polls, the electorate does not think so because, in the unlikely event of the Labour Party winning the next general election, it is an odds-on bet that when they demit office unemployment will again be higher than when they came in. Perhaps they could buy down for a short period a few thousand of those out of work, but at the end of the day, in the future as in the past, they would end up with a catastrophic increase in the figures of those out of work. I do not want to belabour the debate by going on to the dogmatic policies of clause 4 and nationalisation to explain why that is absolutely inevitable.
    There is nothing so soul-destroying, unfair or morale-sapping as being unemployed, particularly for the young school leaver who rightly believes that he is entitled to a job. At the same time, what can be more demoralising for the married man than to get up in the morning, see his children off to school and his wife start on the housework while he has to hang around in enforced idleness?
    The hon. Member for Rochdale (Mr. Smith) mentioned job-sharing. The black market is one of the factors underlying the unemployment position. I can give an example from my constituency. Recently, at one of my surgeries in a school in my constituency, I was told by the janitor's wife that her husband was not there because he was doing his other job. He was a lorry driver and when he finished work he came to look after the school. When he arrived he told me that his wife also had a job at another school and a job in a pub in the evening. Their children were away from home. They had four jobs between two people. Such examples, together with the black market, must be taken into account.
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    There is only one redeeming feature about unemployment today compared with the 1930s. It is not accompanied by the same deprivation of food, clothing and housing that so often accompanied unemployment in the 1930s. I was fortunate enough to have parents who made sure that my sister and I knew exactly what it meant by being made to visit regularly whole families who were living in one room. As I said, this is the only redeeming feature of unemployment today, compared with that of two generations ago.
    It is obvious now that there will be no easy solution to our unemployment problems and it is no good any members of any political party—I say this having listened to the hon. Member for Gateshead, West (Mr. Horam)—thinking that there is a quick and easy solution. We must examine the problem completely differently in the light of what is happening throughout the whole of the developed world.
    There is no point in making steel that nobody wants to use or making ships that nobody wants to sail, or digging coal out of uneconomic pits. We have got to look to new industries and in this country there is scope for much more expansion in electronics, tourism, forestry and many service industries, including support industries for the oil industry.
    I repeat also what I have said on previous occasions. We must really start a determined process of bringing down the age of male retirement. We must also study schemes of early retiral and help people to understand that there is nothing wrong in learning about the intelligent use of leisure. As mankind continues to progress it stands to reason that we will have more time for leisure and will require less time to produce the wherewithal for our standard of living. We have just seen the modern luddites epitomised in the strike called by the leaders of ASLEF over flexible rostering. In this context, it is interesting to note that Japan, the country with the lowest unemployment figures, can also boast the highest percentage of robotic technology. There is surely a lesson here—the same lesson that has been proved time and time again in history.
    While casting around these pearls, there is another interesting fact on a slightly different subject. The Parliament that sits longest: in the developed world is Britain's. Those that sit for the shortest time are in Japan and Germany. Maybe there is a lesson here, too. More talk and more legislation seem to produce less work and less prosperity.
    It is also a great pity that, to help us out of our troubles in this country, so many, though not all, of our trade union leaders are more interested in politics than in industry. Trade union leaders overseas spend a great deal of their time and attention on behalf of their members in matters of pension rights, holidays and health schemes. It would be of great benefit to British workers if our union leaders would do the same.
    I have never heard of a trade union leader in Britain banging on the door of the managing director and demanding to know why the profits of the company are so low. That happens regularly in America. If it happened to a managing director in Britain, he would probably faint on the spot. How can wages be high unless profits are high and money is ploughed back in investment for new machinery and new technology?
    I wish to highlight what is without doubt the most asinine policy of the Labour Party. With 3 million unemployed, the Opposition talk about taking Britain out

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    of the Common Market. That would immediately put at least 2 million jobs at risk. So, in the unlikely, catastrophic and devastating event of the Opposition ever being returned to office in the foreseeable future, their policy over Europe could raise unemployment to 5 million. This point cannot be stressed too often.
    Governments cannot cure unemployment. Customers can. If we knock inflation out of our economy and then produce goods and services at the right price and of the right quality then, and only then, shall we start cutting into the unemployment figures.
    7.42 pm
    Mr. Jim Craigen: It was the hon. Member for Beeston (Mr. Lester) who, while a Minister at the Department of Employment, remarked that we should keep unemployment in perspective and remember that 22 million people are at work. The recent Manpower Services Commission manpower review points out that the number of people at work in Britain is 20·4 million, the lowest figure since the early 1950s. This shows the deterioration in employment that has occurred in the short time since the hon. Member for Beeston departed from the Department of Employment.
    I represent a west of Scotland constituency that has less than its fair share of that employment total. In the Glasgow travel-to-work area, 102,000 people are out of work. To talk about higher productivity means little to people who have no job and who are therefore not able to contribute production, far less productivity. The Chancellor of the Exchequer's unfolding this afternoon of a new blueprint for the long-term unemployed sounded to me like an announcement that Britain is going on to part-time employment. That was the message that came across. The Chancellor's announcement was not as constructive as the hon. Member for Rochdale (Mr. Smith) suggested. The hon. Gentleman was, I believe, thinking more about the job-sharing aspect rather than the scheme proposed by the Treasury and the Manpower Services Commission which is unrealistic given the number of long-term unemployed, now approaching 1 million.
    I believe that two of the new enterprise zones are to be located in Scotland. It may benefit firms not to have to pay rates. There is, however, a certain marking up of the rents that are often required in enterprise zones. If the Government are serious in wishing to help industrial and commercial concerns, they could abolish industrial rating but, as the Government's Green Paper shows, they are hesitant about fulfilling their manifesto commitment on rates.
    This is a debate about employment and the state of the United Kingdom's economy. I wonder what a future A. J. P. Taylor will make of the state of the United Kingdom in the early 1980s. Our energy position is second to none. We have an offshore oil province that gives us a remarkable advantage over our major competitors. We have coal below the ground. We have nuclear capacity and capability. We have wave, wind and solar potential which, I believe, goes largely unexploited. Yet all these advantages are largely written off by the Government's wasteful policy.
    In terms of investment, we have a stability and maturity that is envied throughout the world. We have democratic institutions that are copied assiduously in different parts of
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    the world. Yet our banks and institutions are prepared to lend more abroad than for investment in this country. Despite the war with the Argentine, plenty of bank loans had been available for investment in that part of Latin America. In an international sense, we are a major leader of world opinion. Yet, at the level of summitry, we are unable to exploit that situation to win changes in the policies pursued by all the major industrial countries.
    Looking at the employment situation, it is clear that the Government are prepared to write off half a generation of school leavers. Notwithstanding the new training scheme for young people, the fact remains that, when those young people reach 17, their prospects of employment will be pretty grim. Yet it is that same young generation of Service men who, by their courage and military skill in the Falklands, were able to retrieve a situation that the politicians 8,000 miles away had got them into. Our young generation deserves far better from the Government. The hon. Member for Gateshead, West (Mr. Horam) touched on the real explanation. What matters is the formula. That formula at the moment is monetarism. The Prime Minister, in her early days, before she became a barrister, studied chemistry.
    Mr. Derek Foster: An alchemist.
    Mr. Craigen: The alchemist was the right hon. Member for Down, South (Mr. Powell) who said that she had passed through the test and had become an iron lady.
    Mr. Robin F. Cook: She turns what she touches to dust.
    Mr. Craigen: We do not doubt the Government's will power. What is lacking is intelligence to tackle the problems. The announcement yesterday about the abandonment of hire purchase restrictions will be better news for financiers and importers than for the average family. The best boost that the Government can give to hire purchase, if they are serious, is to reduce interest charges.
    With regard to the long-term unemployment programme that has been announced this afternoon, the Government ought to have responded much more positively to the suggestion made both by the House of Lords Select Committee on Unemployment and the House of Commons Select Committee on Employment that the Chancellor should boost and develop the present community enterprise programme. Time and again we keep changing the names and the nature of these programmes, and more confusion arises and much waste of public expenditure occurs.
    A great new growth industry is developing with people providing support services to these new schemes. We know that the Chancellor's benefit-plus scheme, announced in March and quietly pushed into the background today, was not wanted by the voluntary organisations, which felt that it was not the way to do things.
    Nobody mentioned the important Rayner review of the role of the jobcentres, and its proposals. An inquiry team has suggested that we kick the jobcentres upstairs. It has called for a review of 125 of the jobcentres immediately and a review for another 72 later. For the unskilled and semi-skilled unemployed, who form a formidable proportion of the unemployed, there will be little hope for the future.

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    I represent part of the country where even when an economic upturn comes it takes a long time to reach us. Places such as central Scotland and the North-East of England do not benefit immediately from any economic upturn. However, the Government have succeeded in something that no other Government have managed to do. They have brought the recession to parts of the United Kingdom that never thought they would experience any economic draught. The warning bells are beginning to ring in the South of England.
    What worries me, when I look at different parts of the country and have the opportunity to visit them, is that I find the same concern about unemployment and the lack of economic activity. If the Government persist in allowing this to go on, they are in danger of fracturing the unity of the kingdom. Increasingly one part of the country will deperately compete and fight with another part for economic activity.
    It would be paradoxical if a Prime Minister and a Government so dedicated to unionism were to end up creating more disunity and fracturing of the kingdom. One of the points that has emerged from speakers from the Government and the Opposition Back Benches in this debate has been the extent to which this deterioration in the United Kingdom is developing.
    7.53 pm
    Mr. Robert Rhodes James: The hon. Member for Glasgow, Maryhill (Mr. Craigen) spoke on the key point of youth unemployment, which I wish to develop later, and I accept what he said.
    I thank the hon. Member for Rochdale (Mr. Smith) for his characteristically generous references to my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) and her maiden speech. What he said is deeply appreciated by my right hon. and hon. Friends. We have had so many debates on unemployment in this Parliament that there is a serious danger of the subject being devalued by inter-party recriminations, charges and counter-charges. It may be thought by some to be a subject on which everything possible has been said in our debates. I have recently reread most of our debates on the subject over the past three years—not the most exhilarating of occupations. Lord Rosebery once posed the question "Who now reads old speeches?" and compared them with a glass of decanted champagne, which is a real SDP analogy.
    Having read all those speeches on unemployment over the past three years, I would not describe them in such a flattering manner, and I would not exclude my contribution to the unemployment debate in March 1980. I remind the House of what I said at the end of that speech. I apologise for inflicting the same speech twice on the House, but I said:
    "I fully accept and applaud the general strategy of the Government. People who voted for economic realism should not complain if that is what they are getting. I believe that we shall eventually win the battle against inflation, but I ask: what happens in the meanwhile? How can such a battle be truly said to have been won if the dismal shadows of unemployment and under-employment still darken our nation and our society?"—[Official Report, 5 March 1980; Vol. 980, c. 550.]
    I do not quote that with complacency or say that I was right, because I was wrong. Unemployment was then at 1·6 million, and I thought that it might rise to 2 million. However, since I made that speech two years ago, unemployment has more than doubled.
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    The Government have addressed themselves with real energy and determination to the immediate problems that unemployment has created. I never thought that I would be a strong and warm admirer and supporter of my right hon. Friend the Member for Chingford (Mr. Tebbit) who has introduced measures at which I hinted in my speech two years ago.
    It is fair to emphasise that the problem with which we are dealing, and with which any Government would have had to deal, is the extraordinary upsurge in the birth rate in the early 1960s. That is the problem that has hit us and that will cause problems in future when the subsequent low birth rate affects us as well.
    The debate has been mainly concerned with youth unemployment, and it is that to which I wish to address myself. However, there is another aspect of unemployment that we should bring into the debate. I cannot think of anything more demoralising than family men—or women—in their fifties with heavy family commitments becoming suddenly redundant. It is more grievous for them than for the school leaver or the young employed with no family responsibilities. It would be a tragedy if this debate were confined solely to the young unemployed.
    Mr. Winnick rose—
    Mr. Rhodes James: I shall not give way.
    It is the problem of youth unemployment to which I wish to address myself. The Government are coping adequately with the current problem, but I wish to look to the future. One glaring feature of the present problem, and one that troubles me greatly, is that prospects for university graduates have been and remain considerably better than they are for the bulk of their contemporaries. For example, last year 90 per cent. of university graduates were placed in jobs and careers within three months of leaving university. At Cambridge, it was 95 per cent. One group, a small minority, is in a privileged and better position than the vast majority of its contemporaries.
    One reason for that is the vastly improved quality of the careers advice that is given to graduates. Another reason is the inadequacy in schools—I do not blame them, because I know that they are hard-pressed—and in certain institutions of higher learning of careers advice given at a relatively early age. I do not advocate over-specialisation too early. Nor do I suggest that children should be diverted into subjects suitable solely for employment. None the less, that aspect of our education system has been seriously neglected over a number of years. It did not particularly matter when there was high employment, when the unskilled school leaver could get virtually any employment that he or she wished. Today, the neglect of careers advice in schools and institutions of higher learning is one of the key problems that we face.
    I want to mention one aspect that has struck me, as a member of what is called the Churchill group. We call ourselves by that name because we meet in Churchill college. In fact, we are university and other careers advisers, and we include representatives of industry and business. The key factor is the increasing interest of young people in small businesses and in setting up their own businesses. That has been one of the most dramatic growth areas during the past three years, and it is one that should be encouraged. The jobs involved may not be many, but the opportunities are considerable. I started my own small business, manned by a few graduates, so I am in a strong position to speak on the subject.

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    Teachers, university teachers and, indeed, Ministers must realise that the old days of sending semi-skilled children out into the world on the assumption that they can get jobs are over. The biggest and best investment that we can make is in highly qualified careers advisers who understand their subject. They can be of the greatest help to children. Tragically, some unemployment is inevitable, but there is a large amount of quite unnecessary unemployment. That worries me profoundly. The gulf between what we lightly call "education" and "business", although reduced slightly, is still very wide. As a result, our children are not being guided by either parents or teachers in directions that will be useful to them for the whole of their lives.
    I want to stress one aspect to my right hon. Friend the Secretary of State for Employment and my colleagues. For a long time—since 1944, or even earlier—we in this country have thought of education as starting at six and going on to 15, 16, 18 or, for the privileged few, 21. We have not begun to grasp the fact that in future it will be unusual for people to be in the same profession or business from school to retirement. We should not lament that fact. We should recognise, first, that it is a fact, and, secondly, that it is a great opportunity. If we grasp that opportunity, we then realise that many of our assumptions—for example, on grants, retraining, the role of universities, and so on—have to be revalued. Otherwise, our education system will not be relevant to the problems of our society and its future.
    I am talking about the future. I strongly believe in the link between education, particularly higher education, and the real world. I have found it difficult in the five years that I have been a Member of this House to persuade my colleagues how crucial that link is not only to the future of the nation, but to jobs and the development of earning potential. I point, for example, to the science part in Cambridge. There are other examples. I want to say one thing, at the risk of being accused of being that most awful thing—an intellectual. I passionately believe that the future of our national lies in the brains and energies of young people. Anything that we can do to encourage and support those young people is the best investment that we can make in them, in our country, and in ourselves. We are rightly worried about our present problems, but we should be ill-advised to forget that we should not be creating the foundations for that future, because it is on the young people and their future that our future depends.
    8.6 pm
    Mr. Ron Brown: I am sure that we all agree that unemployment is a cancer in our midst. We know the official figures. Over 3 million people are unemployed. However, that statistic is misleading. When it comes to the official figures, we are dealing with "Lies, damned lies—and Tory propaganda". Many women are not registered, nor are youngsters who are on so-called training schemes. They would certainly bring the total up to over 4 million. The fellow who let the cat out of the bag was Sir Richard O'Brien. He was the chap who got the boot because he was probably too honest. So let us be clear that the official figures understate the real position.
    The official figures are bad enough. In my area, unemployment over the past three years has increased by more than 108 per cent. That exemplifies what is
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    happening in the country. In Scotland especially there is great suffering as a result of the closures that have taken place. We could say that yesterday we had the problems of Talbot and Massey Ferguson. Today it is the smelter at Invergordon. Who knows what it will be tomorrow? Clearly many other companies will go to the wall and many people will suffer and lose their jobs, perhaps for ever, because of this Government's policies. The House does not need me to tell it that many other areas, particularly in England, have been devastated and turned into latter-day Dresdens where people do not count any more and where whole values are thrown aside.
    It can be seen from the CBI figures that production has plummeted. The vast majority of firms are working below capacity. We know that the end of the recession is not in sight. That message came over to us clearly the other day. Who knows what will happen in future? All that we can say is that the Government's economic miracle has not happened. So much for all their boasting about Britain solving its problems. It simply has not happened. We can say with validity that unemployment is not an act of God. It has been made to happen by Conservative Members and by the Government as a deliberate policy.
    The Government believe in so-called private enterprise. That system has failed in the past and it is failing again with a vengeance. If we call a spade a spade, we must call that capitalism. It is basically an unfair system because wealth is concentrated in fewer and fewer hands. It is also corrupt. We know about the black economy and that about £4 billion a year is fiddled. We know about the Vestey family, who, incidentally have given a new meaning to the term "vested interests". The biggest indictment of the capitalist system is that it is inefficient. It cannot produce the goods and it wastes resources, particularly human resources.
    What is the Government's answer during this crisis? It is the old one—make the workers pay. That is their only answer, hence their attacks on jobs and living standards. The reality is that Britain suffers from low wages, not high wages. Not long ago a former Minister in the Department of Industry pleaded with American investors to come to Britain. He said that they should come here because of cheap labour. The Government must face the fact that one of their leading spokesmen made that boast not long ago.
    Britain's real problem is a lack of investment, new plant and new techniques simply because when profits were good in the past the speculators, the people who control the wealth, invested overseas, chasing many dubious projects simply because they were after a fast buck. They squandered the resources built up by the working people of Britain.
    If it is argued that some people are pricing themselves out of jobs, why are the generals, the judges and top civil servants not doing the same? They are certainly over-paid. However, that does not apply to the working people of Britain as a whole.
    The Government call their strategy monetarism. That is not new. Incidentally, it was not invented by Milton Friedman. It had been tried before in the 1920s. Then there was an argument for a return to sound money—the gold standard. Like today, it meant attacks on jobs and living standards. It ended up in a major conflict in 1926—a general strike. The working class were defeated then because of their lack of leadership. That defeat led directly to the terrible conditions of the 1930s. We must always remember that.

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    The Government appreciate that the trade union movement today is far stronger than it was then. About 12 million people are organised into trade unions and, despite redundancies, are potentially powerful. That means that the Government's tactics have changed. Ever since they came into office they have been picking off one group of workers after another and defeating them. They have been very good at that.
    The problem is that the TUC general council has been back-pedalling. It has said that there is not much that it can do. Because of that lack of endeavour, the Government have become more and more arrogant and confident. They have put the screws on working people. That is why there was a change in the Secretary of State for "Unemployment" and in due course new laws will undoubtedly be applied to the trade union movement. It is because of that lack of fight from the top—not from below—that we are in this position today.
    We must face the fact that, while the trade union and labour movement says that unity is strength, mere slogans are not enough. We must implement these slogans. We must build up solidarity and understanding so that we can fight back. I believe that ASLEF was betrayed by the TUC leadership. It should have been supported. The fight was not confined to a small railway union. It involved all workers concerned with defending jobs and living standards. Now that ASLEF has been defeated, National Health Service workers and others have been isolated. They are facing the chop because the Government are pursuing the old tactic—they are successful in using it—of divide and rule. It is the implementation of that policy which leads to our defeat. I hope that it does not, but it could lead to another 1926.
    The only answer is to fight back. The industrial and political wings of the Labour movement must oppose the Tories. They must put their action where their mouths are. That will be crucial in the coming struggles. It is vital that we rally working people and make them appreciate that it is necessary to fight back. If we do that, we can face the challenge. The Government have no right to ride roughshod over working people. We should be telling them to get on their bikes. I say that in the knowledge that they have Rolls-Royces and other large cars. It was the Secretary of State for Employment who coined the phrase "Get on your bike". He should be the first one to get on a bike.
    Above all, we need a Labour Government who are pledged to Socialist policies. The Parliamentary Labour Party and the trade unions should be working towards that end. That is the only way in which we shall eliminate unemployment. There is no easy answer. It will be a long hard slog, but the more that we get together to fight under the banner of unity in challenging the Tories the better it will be for working people.
    8.17 pm
    Mr. Stephen Dorrell: I agreed with the hon. Member for Edinburgh, Leith (Mr. Brown) only when he said that there is no easy answer. He made an interesting speech. I thought that he was going to develop a new theory of historical causality. He attributed the depression of the 1930s to the defeat of the 1926 general strike. It is an interesting theory, but, sadly he did not elaborate it. Perhaps that was as well in the interests of the efficient dispatch of business.
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    It is not my purpose in contributing to the debate to try to apportion blame for the present very high and tragic levels of unemployment. Any dispassionate observer must accept that neither of the two major political parties is blameless. It would not be a worthwhile occupation for the House to seek to apportion blame. Equally, it is not my purpose to set out a series of detailed proposals or measures that should be adopted to try to alleviate the present position. I agreed with much of what my hon. Friend the Member for Bodmin (Mr. Hicks) said when he set out his proposals, but my purpose is rather different. I wish to consider the long-term objectives of economic policy and to stand back from what I regard as a regrettable fascination with technique. I wish to examine what it is that we are trying to achieve in our policy towards the unemployed and the economy.
    What is the proper target for our policy in the months and years ahead? It has become fashionable to talk about unemployment as something with which we have to learn to live. We have been told that it is inevitable and permanent and that there is nothing very much that we can do about it. That view has been advanced by theorists across the political spectrum and not only by the representatives of big business. Labour Members will be well aware that their comrades in West Germany have found themselves in a difficult political position in being faced with the threat to the SPD which comes from the "Greens". The "Greens" have advanced the theory that there is a physical restraint to growth and that therefore the West German society must learn to live with lower employment and increased use of leisure. Their theory is that unemployment is permanent and something to which we must accustom ourselves. That theory has been advanced by a depressing alliance of the directors' dining room and the academic common room—an alliance of the comfortable establishment that I find offensive. The view takes a variety of forms and I shall examine them separately to see how the theory stands up.
    One school of thought is that unemployment is purely a function of competitiveness. It would have us believe that unemployment in Britain results purely from the fact that the British economy is less competitive in world trade and that therefore British industry has taken a smaller share of the world trade cake. In so far as the theory goes, it is true. If a British company cannot sell in competition with a French company, the French company will get the order, more French people will be employed and fewer British. In that sense we are the losers.
    However, that theory does not explain why unemployment is not confined to the losing nations in the game of world trade. Why can unemployment be found among the winners of world trade as well as among the losers? That theory alone is not sufficient to explain unemployment. It is a fallacy to argue that unemployment is an international phenomenon that is the result of competitiveness. In the end, we are competitive only against our international competitors and if all those competitors suffer from high unemployment, the causes of unemployment must run deeper.
    The second school of thought attributes high unemployment to increased automation. It argues that increasing automation and output of the productive process has resulted in machines replacing men, and men being thrown out of work. That theory deserves a place of honour in the pantheon of human error. To imagine that if the productive process becomes more efficient, men will

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    be thrown out of work is the most enduring economic fallacy of them all. The inescapable lesson of history is that machines allow men to improve their living standards and that they do not represent a threat to them. The word "luddites" was coined to describe people who believed that the improved efficiency of the clothing industry caused by the invention of the sewing machine represented a threat to the living standards of clothing workers. The lesson of history is precisely the opposite. The people who were more efficiently employed enjoyed a higher standard of living and were able both to enjoy more leisure and to purchase more goods.
    History does not bear out the theory that, in improving efficiency, the microchip is a threat to employment. It is possible that historical evolution has come to a dead halt and that what has held true for the past 200 years is no longer true in 1982 but, to put it at its mildest, the burden of proof rests firmly on those who argue that theory. They have not succeeded in winning that argument.
    The view that unemployment is permanent, either because of the uncompetitiveness of British industry or because of increasing automation, is untenable. Nor do I believe that unemployment is inevitable or permanent because of the physical-limits-to-growth argument, which says that we are running out of finite resources and that we have reached a standard of living where our economy cannot absorb more goods. Those who argue that view—they tend to be confined to academic common rooms—must explain why our capacity to absorb extra goods in Britain is barely half that of West Germany and the United States of America, where living standards are enormously higher.
    I utterly reject the three arguments that I have isolated and there could well be similar ones. The basic theory is that unemployment is structurally inevitable. No one has made out a convincing case that that theory is true nor explained why we should learn to live with it.
    There is an argument that unemployment is not inevitable but that the price of reducing it is too great. It is dangerous to be dogmatic about the importance of priorities, which change with changing circumstances. But the importance of unemployment as a social and political ill and the dangers attendant on high unemployment should be restated constantly so that political and economic decision-makers are not allowed to develop a false sense of security about the willingness and the ability of a society to withstand high and stable unemployment.
    The regrettable experience—all my right hon. and hon. Friends on the Front Bench regard it as such—of the past three years gives us ample evidence why unemployment is a dangerous social phenomenon. It has been shown once again that when an economy is afflicted by high unemployment the weakest in our society are hit first. The first to be thrown out of work when jobs become scarce are the disabled, members of the minority communities, those who live in remoter regions and those who live in the run-down inner cities where the social problems are already more intense than in more fortunate parts of the country. Those clear trends become even more worrying when they are combined with the concentration of unemployment among young people.
    The difficulty of obtaining apprenticeships or training that leads to real jobs is a great threat to the stability of our society. We face the danger of a lost generation—a
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    generation of youngsters that left school and felt that no one wished to employ them and that it was all very well to give them a year of training but, if there were no jobs for them at the end of the training, how could we expect them to take it seriously?
    The House should examine unemployment, not only from the bird's eye view of a macroeconomic decision-maker or a company manager who is worried about employment in an inefficient subsidiary, but from the worm's view. When we talk about 13 per cent. unemployment, we do not mean that one person is 13 per cent. unemployed. An individual is either employed or unemployed. He is not a statistical abstraction. Unemployment is a personal disaster. The worker's contribution has, in his eyes, been rejected by society. He has been denied the opportunity to make the contribution that he is ready and willing to make.
    The Conservative Party has always advanced itself as the party that emphasised the importance of the family as the cornerstone of our civilised society. My right hon. and hon. Friends and I believe in that firmly. However, it does not take much imagination to envisage the tension in a family when the father is aged 55 and the son is aged 18 and the son is sitting around with nothing to do. Similarly, it does not take much imagination to envisage the tension with the wife who cannot work because she must look after her children but who cannot provide them with the toys and clothes that she would like because her husband is unemployed.
    It is true that unemployment in 1982 is not a matter of the difficulty of paying for basic foodstuffs, finding a roof over one's head or clothes to keep one warm. Thank God it is not. However—this has not changed between 1932 and 1982—it is a matter of the mutual rights and obligations of society and its individual members. We have all said many times that the individual has rights within society, which bring with them corresponding obligations. From the point of view of the individual there is not much reason to feel a commitment to redeem his obligations if, in his eyes, society cannot redeem its obligations to the individual and if his rights are not realistically honoured by society.
    I know that this is a controversial view. It is inevitable that the failure to deliver the right to a job and to participate as a full member of society will lead to alienation from that society, which will lead to vandalism. To predict vandalism and petty crime is not to excuse them. I make no excuse for petty criminals but I merely predict that high and stable rates of unemployment will bring about crime. To deny that is to deceive ourselves and ultimately our constituents. Some 3¼ million people are unemployed, which, thankfully, has not led to riots in the streets.
    Mr. Alfred Dubs: It has.
    Mr. Dorrell: I do not accept that it has been the principal cause of riots in the streets, or of the breakdown on a large scale of law and order. However, I believe that unemployment is an acid that is undermining the structure of our society. History is littered with examples to remind us that the institutions of a civilised society are fragile. Unless they are cared for and nurtured they are ultimately found to be brittle. I ask my right hon. and hon. Friends not to subject the institutions of society that we all hold dear to needless risk.
    8.32 pm
    Mr. Alfred Dubs: The hon. Member for Cambridge (Mr. Rhodes James) talked about the links between schools and universities, and job opportunities. He mentioned the need for better careers advice. I endorse his comment. However, he did not make one other point about advice that is given to school leavers. They need help to cope with not having a job. We need to ensure that school leavers, who may spend months or years on the job market, have been given advice on how to cope, advice about the DHSS, how to claim supplementary benefit and how to come to terms with enforced leisure and the sense of failure that faces too many people when they leave school. I seriously believe that that is a gap in what our schools are doing. I hope that our teachers and educationists will do something to overcome it as quickly as possible.
    The reasons why the subject of unemployment is so politically controversial is that the Conservative Party made it one of the main planks in its election campaign in the months leading up to the election of May 1979. Conservatives convinced the British public—or hoodwinked them—that they would do something about unemployment. The first thing that the Government did on taking office was to introduce a set of measures that led directly to a further increase in unemployment.
    In the past three years we have had statements from the Chancellor of the Exchequer and other Ministers. For example, today the right hon. and learned Gentleman said that we needed a responsible monetary and fiscal policy, whatever that means. He talked about pay restraints and improved competitiveness. Such statements have been made by Ministers month after month since May 1979. The Chancellor also said today that unemployment was everyone else's fault, not the Government's. He said "Do not blame me. I am only the Chancellor. Unemployment is not my fault. It is someone else's." Therefore, it is not surprising that not one Conservative Member who has spoken in the debate has unreservedly supported the Government's economic policies. They have all hedged their bets and some have attacked forcefully. There must be a lesson to learn from that.
    It will not be long before the increase in unemployment that has been caused by the Government since the last election will have reached the 2 million mark. That unemployment may be caused by redundancy, by the collapse of employing firms or unemployment for school leavers who cannot find a job. We have had three years of soaring unemployment, from little more than 1,300,000 when the Government took office to nearly 3,200,000 now. As the hon. Member for Loughborough (Mr. Dorrell) said, that represents a social tragedy. It also represents an economic and industrial tragedy for Britain.
    The Chancellor said that there were three reasons or justifications for the present difficulties: first, that the Government's policies that lead to higher unemployment are necessary; secondly, that unemployment also existed under the Labour Government; and, thirdly, that other countries are suffering equally. I shall deal with each.
    The Chancellor, the Prime Minister and other Ministers have said that it is necessary to pursue the policies that have led to the present level of unemployment in order to reduce inflation. No one disagrees that it is important to reduce inflation. We should all like there to be lower inflation. But not one Minister has said at what point that
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    need becomes secondary to the need to tackle unemployment. Nor has any Minister said what will be done when inflation is at a more manageable level. What will happen then'? What policies will be introduced? Or will the Government simply carry on as at present?
    The Government have said that we must reduce interest rates. We all want lower rates of interest, but that can be achieved by other means than a horrific level of unemployment. Above all, the burden of the Government's policies has been to cut public spending. The Secretary of State for the Environment's statement today was merely another example of that. It centres on the need to reduce the public sector borrowing requirement.
    We therefore hear extraordinary statements such as that of the Secretary of State for Industry when he explained his proposals to privatise British Telecom. He said that one of the advantages of privatisation would be that the private sector, in owning British Telecom, could invest to a greater extent than the public sector because the public sector must be constrained by the need to keep the PSBR down. There is not one shred of evidence to suggest that there is any difference between the economic effects of investment by the public sector and investment by the private sector. But we have been caught in that straitjacket for the past three years. It has resulted in public sector industries being starved of investment.
    There is an additional aspect of the PSBR argument. Even if one accepts the basis of Government thinking that underlines their economic policies—I do not—there is still no reason to believe that the PSBR could be controlled only at the present level of economic activity. The same level of PSBR could be achieved with a much higher level of economic activity. The Government have never pursued that argument. Instead, they have been concerned to depress the economy. Manufacturing output is now 15 per cent. below what it was in 1979. The simple fact is that there is not enough demand in the economy.
    The Chancellor said that unemployment had been bad under the Labour Government. It was unacceptably high but it was a lot lower, immeasurably lower, than it is now. In the last two years of the Labour Government, unemployment fell, perhaps not at a fast rate but there was a slow and steady decline. That was reversed only when Conservative economic measures began to have their effect.
    The Chancellor also said that other countries are doing equally badly. There must be doubts about the source of his figures. I shall let that rest. The latest available OECD figures that cover May 1982 show that the United Kingdom, with Belgium, shares the unenviable distinction of having the highest level of unemployment of all the countries that were covered by the analysis. The Netherlands has 10·2 per cent. unemployment, France has 8·5 per cent., and. Germany has 6·2 per cent. A few countries that are not in the Common Market have still lower levels of unemployment—Sweden has 3·2 per cent., Switzerland has less than 1 per cent. and Japan has enjoyed exceptionally low levels for some time.
    What bothers me is how the Government have managed to hoodwink the British public into living with such high unemployment. One of the political mysteries of this age is how the British public have been persuaded by the Government's peculiar arguments that we must live with

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    3 million unemployed. The Government say that they do not like it, but they have not suggested that we should have our sights on something significantly lower.
    If we read the history of the late 1920s and 1930s, we are reminded how similar the arguments were at that time. It was argued that there was nothing that the Western economic world could do about the unemployment which began to grip us from 1929 onwards and that we simply had to sit back and accept it. The exception was a small number of economists and politicians who said that it was not inevitable, that we should not accept it and that there were alternative policies.
    It is not only the traditional regions of high unemployment that are suffering. Unemployment in London and the South-East is nearly ¾ million. That is the same total as in the Northern region, Wales and Scotland combined. Even if the percentage in London and the South-East is lower than in the regions of high unemployment, the numbers are very high indeed, although they may be less obvious because they are lost in the metropolis and the adjoining areas. The latest figures, for June 1982, suggest that in the Wandsworth area, of which my constituency is a part, nearly 13,000 people are unemployed. That figure includes large numbers of young people and black people.
    Long-term unemployment is now almost 1 million. The social consequences of that are despair and alienation. Let anyone who doubts that talk to someone who has been unemployed for six months or a year. What is worse, there is no sign of improvement. Treasury officials play the desperate game of hunting for favourable indicators and occasionally come up with one, but the weight of evidence from economic indicators, the CBI and industrialists, is that there is no sign of improvement. If anything, the situation is likely to worsen in the coming months.
    No one suggests that there are easy solutions, but there must be a commitment to reducing unemployment. That requires a change in Government economic policy. Above all, we must increase demand in the economy. An improvement in the unemployment figures will then follow. We need significant reflation of the economy, including major investment. If the private sector will not invest, the public sector must. To avoid sucking in high levels of imports and negating our attempts to cut down the number of jobless, we must control imports. That may be on a selective basis, but some controls will be necessary.
    I am optimistic that under a Socialist Government who will introduce such policies there will be voluntary agreement between Government and trade unions on the planned growth of incomes. We might have to go further in terms of earlier retirement and proper education and training to raise from 16 to 18 the effective age at which people come on to the job market.
    The present more than 3 million unemployed people represent a major crisis and challenge to our society and its institutions. The Government have not begun to grasp the urgency of the problem. I believe that at the next general election, which the Prime Minister has apparently said will be in October 1983, unemployment will be the key issue. When the public are faced with clear alternative policies, I believe that they will throw this Government out for what they have done to the country and elect a Labour Government in their place.
    8.45 pm
    Mr. Michael Ancram: I hope that, to save time, the hon. Member for Battersea, South (Mr. Dubs) will allow me to respond to some of his remarks during my speech rather than immediately.
    It has become clear that remarks and imputations made by some Opposition Members about Conservative Members not caring about unemployment or the unemployed have at last died the death. Every speech made by a Conservative Member has shown that we are equally horrified by high unemployment. I hope that my speech will confirm that. We realise that unemployment is a human tragedy and a social evil and that it is soul-destroying and creates resentment.
    We are particularly sensitive to this problem in Scotland because we have a history of economic deprivation. We cannot take lightly the 15 per cent. rate of unemployment. As the hon. Member for Glasgow, Maryhill (Mr. Craigen) said, traditionally Scotland takes longer to recover from recessions than other parts of the United Kingdom. The deep recession that we now face is serious.
    I condemn the easy promises made by the Opposition. I exclude the right hon. Member for Heywood and Royton (Mr. Barnett), who said that making easy promises is perhaps more dangerous to the unemployed than not making them. The right hon. Member for Chesterfield (Mr. Varley) seemed to wave his hand as if it was a wand and in two sentences pretended that the Labour Party had a complete solution to unemployment. I tried hard to gather from his speech, and the speeches of his hon. Friends, what that solution is. I have studied the plan put forward. It must rank as one of the most unpromising building operations since the tower of Babel. That failed because the constructors spoke with different voices at the same time. It is a mass of contradiction parading as a whole without even the elementary principles of counterbalance that, architecturally, can hold unlikely edifices together.
    The hon. Member for Battersea, South dealt with a number of those points. The plan promises jobs by introducing lower interest rates, but it is based on borrowing that can only force interest rates up. It promises jobs and an increase in the standard of living by controlling inflation, but proposes to finance the programme with the very fuel that rocketed inflation in the past. The plan promises jobs with a programme of vast public spending, but the nature of financing that spending can only tear at the hearts of those industries that can provide jobs for the future. In a sense, the plan is new jobs for old, but at an exchange rate that will inevitably increase the number of people without work after it is carried through.
    Neither the Labour Party nor the SDP can escape reality, even when in Opposition. Their policies—and some hon. Gentlemen have admitted it—will raise interest rates and inflation. We know from experience that that will lose jobs faster than they can be created while present conditions last. In exchange for rising unemployment, falling interest and inflation rates, the Labour Party and SDP are offering the unemployed a brave revisited world of rising interest and inflation rates, as well as further unemployment.
    France has demonstrated that in one short year of Socialism. Hon. Gentlemen may find that surprising, but why, if Socialism in France is working so well, did the

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    French Government only a month ago reverse their policies and turn them on their heads? Perhaps the right hon. Member for Stepney and Poplar (Mr. Shore) can explain that. I hope that Opposition Members will look across the Channel and perhaps, for once in their history, be wise before the event.
    Jobs can never depend on public subsidy in anything but the shortest term. It is doubtful whether jobs can be created by public spending at any cost that does not ultimately create a greater loss elsewhere, unless those jobs are legitimately earned. The Government cannot create lasting jobs, except of the least productive and most wealth-consuming kind. Industry creates jobs, but in a world recession that is no easy task. Industry and the Government must create the base and background for creating jobs in future. Industry will expand and invest in new jobs if the atmosphere is right.
    That atmosphere has certain requirements. It requires a buoyant market, which will require the world recession to end, and international co-operation will have a great part to play in that. It requires an economic climate where endeavour will be rewarded, and that requires the right tax regime and lower interest rates. It requires the right labour force with stable industrial relations and the skills needed for new industries. It requires the right environment, which means the right amenities and facilities for people who wish to set up in business. Above all, it requires a good prospectus. It must be positively sold. One of the most damaging things in my part of the country is the continual talking down of the Scottish economy by Labour Members. That is now positively putting off people who would otherwise invest and create jobs.
    The arguments against massive reflation and greatly increased public spending are broadly correct, but I trust that they will not cloud the Government's judgment on where spending must be undertaken, such as in the replacement of necessities—sewers have already been mentioned—where failure to act now will cost more later. Such expenditure is merely good husbandry. Nor should the Government's judgment be clouded on the investment of public money where it can show a net return, as I believe it can in energy conservation and environmental improvement. This is the argument of the net savings which, after all, has been the justification for the building of a number of power stations before they were needed. If we can do that, we can do it on a wider scale.
    I do not believe that this will create a vast number of jobs, but it will help and it can be justified at the present time. Nor do I believe that we have closed our eyes in the past to job-creating or job-saving projects. Scotland certainly has not. There is the power station at Torness which, among other reasons, is being constructed to preserve jobs in the nuclear industry and to create jobs in the construction industry.
    There are now proposals for the electrification of certain railways, a proposal to build a new exhibition centre in Glasgow, and only last week the Scottish Development Agency announced a scheme for Dundee that will create 1,200 jobs at a cost of about £39 million. That is a flexible response to the gravity of the problem and is a declaration of the Government's concern about unemployment in Scotland.
    None of this can obscure the long-term economic reality that, if we are to succeed, we can do so only if we compete effectively. Increased demand cannot help job
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    requirements if it is not for our own goods. It should never be part of our task to help reduce unemployment in other countries before we reduce our own.
    Competitiveness may be a harsh word, particularly where it requires job reductions, but, where it is the key to survival and future expansion rather than collapse, there really is little choice. In the long term, our task must be to prepare for the upturn so that we are ready to take advantage of it, particularly in Scotland where endemic economic problems are that much worse than in the rest of the United Kingdom.
    The Scottish picture is not all black. Last week's much maligned CBI survey, which was perhaps gloomy, talked about Scotland suffering from lack of improvement rather than deterioratior—that we were on a plateau. The Scottish Register of Companies has announced a 23 per cent. increase in the number of companies incorporated this year compared with last year. That may not be immensely significant, but it is the seedcorn for jobs in future.
    The increase in Scottish unemployment has been much less than the average for the rest of the United Kingdom. While that might be cold comfort in terms of the history of the Scottish economy, it is exceptionally significant for our chances of recovery in the future.
    We must still prepare the ground for that long-term recovery. We have to produce jobs which will last a generation. That is the only honest answer to our unemployment problem. We have to train our youth, as the Government are doing with youth training schemes, and increase our competitiveness by modernisation. We need to look for jobs, as the SDA and Scottish Office are doing, and make sure that the right facilities are available when the upturn comes. That can be done only when the Government and industry work with the labour force and the unions—if they are able to set politics aside.
    The Opposition recently called upon the Prime Minister to show the same determination and courage in tackling unemployment as she showed when dealing with the Falklands crisis. They were right to say that, because the Falklands success was achieved not only because of the Prime Minister's determination and courage, but because the country was prepared to support her and realised that there was no easy answer and that people had to graft to succeed.
    If that same mentality could be fostered to deal with unemployment, and the Opposition were prepared to put all their fine words and easy answers to the test against such co-operation, we could solve the problem once and for all.
    8.56 pm
    Mr. Ray Powell: I should like to take up the remarks of the hon. Member for Edinburgh, South (Mr. Ancram) about the compassion that the Government feel for the people. Unemployment this month has risen alarmingly to the highest level recorded of 3,190,621 people out of work—one person in eight of the entire population. That is an increase of 129,381 over the June figures. They even caused the Prime Minister to concede that the figures were very disturbing indeed. The right hon. Lady gets upset only about things like Dr. Runcie's tone at services in St. Paul's cathedral. The media spelt out the Prime Minister's attitude. Her husband, Denis Thatcher, is reported as saying after the service:
    "The Boss is spitting blood."

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    The hon. Member for Epping Forest (Sir J. Biggs-Davison) is reported as being revolted by the cringing clergy in St. Paul's. The message is clear.
    Mr. Dickens: On a point of order, Mr. Deputy Speaker. I do not know whether you have noticed, but at the moment this speech is dealing with the service in St. Paul's cathedral yesterday morning. I am sure that we would rather concentrate on the 3¼ million unemployed people.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): It is a very wide debate. I have listened carefully. The hon. Gentleman must keep in order.
    Mr. Powell: I am coming to the point, if the hon. Gentleman will sit down, and perhaps concentrate on his tea parties.
    Why are the Prime Minister, her Cabinet, her wets, her dries and dried-out wets, not spitting blood over the plight of the 3 million people that they have thrown out of work instead of continually beating the war drum? I am participating in the debate to convey to the House the plight of unemployed people to get under, over, through or below the crocodile-skinned Members on the Tory Benches. Members of our society find themselves in an unreal, unjust, un-Christian, inhuman, and unwarranted position when they are thrown out of work.
    One newspaper recently referred to the simmering unease on the Tory Benches about unemployment. The Labour Party does not feel simmering unease. It is furious, appalled and disgusted. It feels absolute contempt for the uncaring and utterly indifferent attitude of the Prime Minister, the Chancellor, the Secretary of State for Employment and others in the Cabinet and Government. The Government's economic policies have condemned a whole generation to life on the dole and have sentenced ½ million people to dispirited despair at the start of their lives. The Government are a total disaster.
    Numerous remedies have been suggested from numerous quarters with varying enthusiasm, but I respectfully suggest that the first step towards a solution is the present resident's departure from No. 10. She has shown herself bankrupt of ideas, bereft of compassion and totally out of accord with the people of this country.
    9 pm
    Mr. Peter Shore: It is my happy duty to congratulate the hon. Member for Mitcham and Morden (Mrs. Rumbold) on her very successful maiden speech. We enjoyed the manner in which it was delivered and many of the things that she said. She had the good fortune to address a fairly full House and to hold it to the end, to the satisfaction of hon. Members on both sides. As the noises of assent demonstrated, we particularly appreciated what she said about the honourable course chosen by her predecessor in putting the strength of his changed convictions to the test and in consulting the constituency's electorate. I am sure that her constituents will read with interest what she had to say about the constituency. Indeed, I am also sure that the Chancellor of the Exchequer was gratified that at least one Conservative Back Bencher had nothing to say about the country's economic mismanagement. That subject has clearly engaged the attention of virtually all other hon.
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    Members, with the possible—and, indeed, proper—exception of the hon. Member for Edinburgh, South (Mr. Ancram).
    We have had a useful debate, which has reflected the serious concern felt on the Opposition Benches, and also among Conservative Members, about the appalling phenomenon of mass unemployment throughout the length and breadth of our land. We heard from the Chancellor of the Exchequer who has, during the past three or four months, been a stranger to the House. He made what I might describe as a predictable, vintage speech. It was complacent, insensitive, evasive and self-righteous and contained the usual handfuls of statistical dust with which to blind the credulous to the reality of our economic situation. There was, of course, the odd bone or two, such as yesterday's hire purchase announcement and today's announcement on further enterprise zones with which to quieten the snarling dogs of industry up and down the country. The details of those momentous announcements will fill up some column inches of newsprint in tomorrow's newspapers and will, perhaps, give some small, if temporary, comfort to Conservative Back Benchers. However, it will not wash and it will not do.
    Outside the ivory towers of Nos. 10 and 11 the world in which real people live and seek to earn their keep grows steadily harsher and bleaker. The scale of the measures announced today and yesterday was pitiful and even contemptible given the size of the problem facing us. The July figures for unemployment stand at the highest level yet—3,191,000, or one in eight of the total work force. Indeed, 350,000 more people are out of work than when we debated the economy about 12 months ago. Moreover, the composition of that appalling figure gives great cause for concern.
    Two weeks ago the MSC published its annual manpower review for 1982. It made chilling reading. It is not just the growing number who have been out of work for more than 12 months, it is the particular age groups where the rate of unemployment is far in excess of the national average of 12·3 per cent. that should give acute anxiety and concern.
    The Manpower Services Commission's figures were recorded in its annual report in January this year. At that time, no less than 23 per cent. of those under 18, 26 per cent. of those aged 18 and 19 and over 22 per cent. of those aged between 20 and 24, were unemployed. At the other end of the age scale, 20 per cent. of male workers aged over 60 were also out of work. The under-18 figure of 23 per cent. will have been vastly reinforced by the flood of school leavers this month. These figures would be substantially higher but for the range of MSC schemes that provide temporary employment for 300,000 young people.
    The hon. Member for Gateshead, West (Mr. Horam) mentioned the appalling figure that is likely to emerge this October when about 50 per cent. of the total number of young people under 18 will be unemployed. That is one in two. Here, in the most vivid form, we see not only the waste of unemployment and the cost, direct and indirect, to the finances of the nation, but also the human cost in terms of disappointment, bitterness, estrangement and self-doubt as hundreds of thousands of young people find that they have entered an adult world that apparently does not want them now or in the future.
    No one with the welfare of this country at heart can view the prospects for these young people and for society

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    as a whole if this blight of unemployment is not lifted with anything but dismay. There will be not just dismay but also anger when people recall what the Prime Minister and the Chancellor of the Exchequer had to say when they were seeking to win votes shortly before the last general election. On 23 April 1979, in a speech at Darlington, the Prime Minister, then the Leader of the Opposition, addressed herself precisely to the unemployment question when she said:
    "Another Labour accusation is that the Tories plan to increase unemployment. But we Tories believe in policies that will create real jobs—not just in paying youngsters to do artificial jobs without a future."
    Unemployment, when the Prime Minister made that speech, was between one half and one third of what it is today. As for paying youngsters to do artificial jobs without a future, over 300,000 are precisely in such schemes now and a further £180 million is being spent in increasing the number today. The effects of this self-same blight on our industries are all too clear. The output of manufacturing industry is down 15 per cent. on 1979. Output in the construction industry, to which my right hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) referred, is down by 17 per cent. All industries, apart from North Sea oil and gas, are down by 13 per cent. We are a poorer country in terms of national income and GDP, substantially poorer than when the Government came to power.
    None of this is in dispute. What should be clear, even to the most obtuse Treasury Minister, is that the long predicted upturn has simply not taken place. For the past 18 months, we have been fobbed off in one economic debate after another with optimistic assurances that the worst is over, that the economy has bottomed out and that there is clear evidence of recovery and growth.
    In their efforts to mislead, short of downright falsehood, the Prime Minister, the Chancellor and his team have almost exhausted the vocabulary of deception. I say "almost" because the Prime Minister made a valiant effort in yesterday's "Interview of the Year" with the Daily Express to add to the statements of ambiguity on this subject when she said:
    "We're better than we were a year ago. We started to grow, undoubtedly we started, then there was a plateau, undoubtedly a plateau."
    That is an addition to the vocabulary. We are grateful to the Prime Minister.
    The painful facts cannot be ignored. Compared with the first quarter of 1981, when the Prime Minister, the Chancellor and the others first saw pink in the sky, the latest index of industrial production figures for March to May 1982 compared with March to May 1981—I cannot think of a fairer comparison—shows an increase of not 3 per cent., as the Chancellor was seeking to claim, but of 0·7 per cent. in industrial output other than the increased output of North Sea oil and gas. Bankruptcies in the second quarter of this year were at a record 10 per cent. above the previous high, while company liquidations based on the first half of 1982 will comfortably exceed last year's record total of nearly 8,900 liquidated firms.
    There is no comfort to be found in any of the forecasts, either official or unofficial. On the present policies, not one predicts any substantial fall in the present level of 3 million unemployed. Those who see some little growth in 1983–84 acknowledge that it will be too modest to affect
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    the level of unemployment. A growing body of opinion sees a further remorseless increase in the numbers of unemployed towards the 3½ million, if not the 4 million mark.
    By next month, the Chancellor will have occupied his high office for some 1,100 days and he must know that, day in and day out, some 1,800 jobs have been lost throughout his period of tenure at No. 11. What does the Chancellor say about his uniquely awful period of economic mismanagement? We heard three excuses today, and I wish to deal with all of them.
    The first of these is that the ruin that he has inflicted or the economy is a necessary evil to combat the still greater evil of inflation. If that was his principal aim, he has secured a minimum success at a maximum cost. The purpose of containing inflation, along with the maintenance of employment and the growth of output, are the three central aims of economic policy, or should be, of any Government of whatever political stance. No Chancellor in his right mind would abandon both output and employment to obtain so modest an impact on inflation.
    To reduce the rate of employment from 10·3 per cent., which is where it stood in May 1979, to 9·3 per cent., where it stands ft July of this year, three years and three months later, is hardly worth celebrating. When it is seen against the background of more than doubled unemployment and a catastrophe to output, it is simply not worth having. Any fool can achieve a reduction in the rate of inflation to considerably lower than the present 9 per cent. if he is prepared to pay the necessary price in unemployment. We have 3 million unemployed and 9 per cent. inflation—perhaps 8 per cent. If the Chancellor had 4 million unemployed, no doubt he would bring inflation down to 6 per cent. If it were 5 million unemployed, heaven knows, he may even get it down to 2 per cent or 3 per cent., but does he really think it is worth the price?
    There is a second and more plausible excuse, central to the Government's amendment and to the Chancellor's speech this afternoon. That is that not only Britain but the whole of the Western world is suffering from a severe recession. What the Chancellor has to answer is why Britain of all Western countries has suffered so much worse during the past three years.
    Let me illustrate what has happened. The second oil shock, with its doubling of oil prices, occurred almost exactly when the Government came to power in the second quarter of 1979, so we can with some ease compare what has happened to the economies of Britain and its principal industrial competitors from then to June of this year. In industrial production, Japan has grown fast, at no less than 13 per cent., Italy by 10·6 per cent., France by 0·8 per cent. When we come to the minuses, Germany has reduced industrial production by just under 1 per cent., the United States by 7 per cent. and Canada by 7·7 per cent. The prize goes to the United Kingdom, which has reduced industrial output by just on 12 per cent. So while it is true to say that the second oil shock had a depressing effect on the output of the Western world, it is obviously and notoriously true to say that no country has been hit as hard as our own.
    What about unemployment? It is more or less the same story. In mid-1979, Britain, with an unemployment rate of 5·7 per cent., stood exactly half-way in the league table of the industrial Seven. In the first quarter of 1982, Britain was an order of magnitude above the rest, with the highest unemployment—over 12 per cent. There have been some

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    increases since, as today's release of the unemployment figures from Brussels shows. Britain's position at the top of the league table remains unchallenged.
    Let me say another word about the Chancellor of the Exchequer's extraordinary use of statistics about France. I have the figures here, and they are his own figures. My hon. Friend the Member for Blackburn (Mr. Straw) asked the Minister of State at the Department of Employment about the latest available seasonally adjusted standardised unemployment rate, estimated by the OECD for various countries. The question was asked in June 1982. The answer was:
    "United Kingdom (May) 12·7
    France (May) 8·5"—[Official Report, 6 July 1982; Vol. 26, c. 74.]
    Today, the Financial Times quoted the Brussels press release showing that the French unemployment rate had slipped from 8·3 per cent. to 8·2 per cent. I do not know how the Chancellor of the Exchequer managed to produce a figure which, if my memory is correct, was over 10 per cent. If he wants to put the matter right, he can do so now.
    Sir Geoffrey Howe: The right hon. Gentleman must accept that the OECD figures for seasonally adjusted unemployment in France over the past 12 months show a steady increase, quarter by quarter, from 9·2 per cent. in May 1981 to 10·6 per cent. in May 1982.
    Mr. Shore: I have just quoted the OECD figures, given in an answer by one of the right hon. and learned Gentleman's colleagues. If this is another failure of co-ordination between Government Departments, the right hon. and learned Gentleman should know about it. I cannot make sense of the Chancellor's figures, because I checked them with other sources. Even the French Government's own official figures show that unemployment has dropped from 8·3 per cent. to 8·2 per cent.
    I come to the third point in the Chancellor's case. It is his plea in mitigation that, as a result of the recession, productivity in Britain has shown a remarkable increase. In some firms, in some industries, there has indeed been an increase in output per man hour, but how large that increase is, whether it is exceptional compared with other earlier phases of the recessionary cycle, and whether it is likely to be sustained in the future are questions that have not been answered. However, what we do know is that the effect of increased productivity has not merely been countered and offset, but literally overwhelmed by the massive loss of international competitiveness from which British industry so patently suffers. Comparing 1981 with 1979—I repeat the figure that I gave when I intervened in the Chancellor's speech—IMF figures show that we sustained no less than a 36 per cent. loss in our international competitiveness. I do not believe that we have records of any similar experience in our national history, and I know no other industrial country which has suffered so great a reverse. This is what will ravage, as it already does, our balance of trade.
    Of course, the great British slump of 1979 to 1981 led to a massive destocking and a dramatic fall of Britain's imports—and, indeed, to almost desperate export efforts by those firms in the United Kingdom that could find no market at home. The effect was to produce in 1980 and 1981 large surpluses on our current trade accounts. Now that the trade figures for the fourth quarter of 1981 have
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    begun to re-emerge, the House should note a massive and alarming deterioration, due not to an expansion of the United Kingdom economy but simply to the end of destocking within it.
    Our visible trade surplus, which was running at an annual rate of getting on for £2,000 million in the fourth quarter of 1981, dropped to £700 million in the first five months of this year. That total conceals the massive deterioration in our trade in manufactured goods and the part played by oil. In manufactured goods, the turn round has been from a surplus at an annual rate of more than £2,000 million in the fourth quarter of 1981 to no surplus in the first five months of this year.
    Our oil surplus—incidentally it did not exist in 1979—is now running at no less than £3,300 million a year. Without it we should be in desperate difficulties. What is happening is plain. Even with a flattened, depressed economy, the import-export balance in non-oil trade is moving sharply and dangerously to our disadvantage. It is a record of three years of gross mismanagement, or worse. The great benefit that should have come to Britain from the North Sea is now being squandered on imported industrial goods and, moreover, in the outflow of British capital to assist the development of the industries of our competitors.
    There is no serious dispute as to the causes of our present economic plight. The attempt to achieve sterling M3 targets for the growth in the money supply, however unsuccessful they may have been, have led to high interest rates and to the maintenance of the £ sterling at what is clearly an unrealistic and uncompetitive level. It has had a crippling effect both on private industrial investments and on the capacity of British industry to sell abroad and to maintain its share of the British domestic market.
    At the same time, the Government have heavily cut their public expenditure programmes. That in turn has reduced the public sector borrowing requirement, although, as we all know, by far from an exactly matching amount. One of the obvious, if paradoxical, consequences of cutting public expenditure and maintaining a monetarist policy has been to inflate public expenditure through the maintenance of the vastly increased numbers of unemployed, subsidies to industries and services that are no longer viable, and the servicing of an ever-increasing national debt.
    As if that was not enough, the Government, in flagrant contradiction of their election pledges, have substantially increased the burden of direct and indirect taxation on virtually the whole of Britain, other than the minority on very high incomes.
    Just what has happened here, and how much more damaging the Government's fiscal policies have been, is recorded, on a regular basis, in the OECD's economic outlook, which measures the extent to which the Budget balance has been deliberately set to more than offset the built-in stabilisers and thus to achieve a greater deflationary impact.
    In the three post-second oil shock years, 1980–82, the change in what economists like to call "the discretionary fiscal policy" in the United Kingdom has amounted to more than 5·5 per cent. of our total GDP. Not one of the big six industrial nations has changed its discretionary fiscal policy by even a half of the British total.
    Nobody who looks at the evidence, at the specifically British unemployment levels, the unparalleled collapse of British industrial output and the stubborn and deliberate

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    pursuit of deflationary policies, can have any doubt whatever that the greater part of the major deterioration in the British economy is a direct consequence of the policies and strategies pursued by the Government.
    Mr. Tim Renton rose—
    Mr. Shore: Earlier today, attention was drawn to the recent publication by the Institute of Economic Affairs of a new pamphlet in which the central point was the advocacy of 5 million unemployed as inevitable, necessary and desirable to promote a healthy economy.
    Mr. Renton rose—
    Mr. Shore: I shall not give way. The hon. Gentleman has not been present throughout the debate.
    I do not know what figure the Chancellor has in mind, but I must say that it is becoming increasingly apparent to us, not only from what he has said but from his actions and inactions, that he is using the 3 million unemployed as a principal economic regulator—a principal weapon—against inflation and as a principal way of changing the balance of power in industry in his economic policies. It is no good asking what the Government propose to do. They do not propose to do anything but carry on with their present policies.
    Four months ago in his Budget Statement the Chancellor of the Exchequer described the 1982 Budget as a Budget for industry, a Budget for jobs and a Budget for the people. Only yesterday the Secretary of State for Trade in another place was once again asserting that the latest figures are encouraging. He confirmed the view that, taking one month with another, recovery is under way. That is what the Chancellor of the Exchequer, with his tortured statistic, was seeking to put to us this afternoon but the evidence is all against him. It is not only the National Federation of Building Trade Employers which is calling for
    "a modest, steady and effective programme of construction and investment".
    That is also the considered view of the CBI. As my right hon. Friend the Member for Chesterfield (Mr. Varley) rightly said, that is the CBI's view in every region in the land, not only in London. Only this morning, having heard about the abolition of hire purchase controls and the well-advertised further measures that have been announced, Sir Campbell Fraser, the CBI's president, warned against
    "a second wave of redundancies in Britain".
    If we are ever to resume the expansion of our economy and if we are to make any progress towards reducing the massive total of unemployment, we shall need to set a new course in economic policy and match measures to the scale of events. We need immediately a strong stimulus to the economy. We have unused capacity, unused skills and unused people. We have capital available and we have enormous and unsatisfied public and private needs. The element that is missing is demand. Therefore, we need an increase in public investment programmes. Apart from dogma, there is no reason why British Telecom, which has a large and beneficial investment programme that is ready to be expanded, should be forced to curtail its plans because the Government are not prepared to allow them to be implemented until 51 per cent. of its shares are sold off to private investors.
    Expansion programmes for nationalised industries make sense, and they should have their EFLs increased to permit additional investment. Of course we should carry
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    through a substantial increase in infrastructure programmes on roads and sewers. We need a substantial increase in housing expenditure, both on new housing and on modernisation. We need also an immediate increase in the spending power of those who have been penalised by the Government's retentions. The 5 per cent. cut in unemployment benefit should be remedied at once. There should be a proper uprating of child benefit, and there should certainly be an increase in the rate support grant for our inner city areas with all their appalling problems.
    There should be, as the CBI has urged, a further cut in the national insurance surcharge and an immediate restitution of income tax thresholds to take account of what was filched in the Budget in 1981.
    Mr. Arthur Lewis rose—
    Mr. Shore: There should be a sharp cut in interest rates to bring down to a sensible level the exchange rate of the pound.
    Mr. Renton rose—
    Mr. Shore: It was precisely along those lines that I put forward my economic proposals in the week immediately preceding this year's Budget.
    Mr. Tim Eggar: How much would they have cost?
    Mr. Shore: The amount appeared in print. It was £9 billion with an increase in the PSBR of about half that amount. The proposals were published.
    Mr. Arthur Lewis rose—
    Mr. Shore: My hon. Friend the Member for Newham, North-East knows that if I give way to him I shall only infringe on the Secretary of State's time.
    Some of the measures could be undertaken straight away. Others will need an autumn Budget, which should be the central focus of Government activity during the next three months.
    The Prime Minister, the Chancellor and the now cowed Cabinet that they command are presiding over a tragedy for the British people and a disaster for the country. In three short years, they have turned a national performance that many of us considered to be inadequate into absolute decline. They have squandered opportunity and ruined hope. That is why we condemn them and that is why we shall vote against them tonight.
    9.30 pm
    The Secretary of State for Employment (Mr. Norman Tebbit): We should congratulate the right hon. Member for Stepney and Poplar (Mr. Shore)—
    Mr. Arthur Lewis: Is the right hon. Gentleman aware that we all agree that unemployment is a terrible problem? Whatever our views, we agree that something must be done about it. Does the right hon. Gentleman agree that it is terrible that we are debating this important subject and yet the former leader of the SDP is reported to have gone away on a six-week holiday to America with his family in addition to the long holiday that we are about to have? Why should not the former leader of the SDP be working now?
    Mr. Anthony Beaumont-Dark: On a point of order, Mr. Speaker. It is unfair to attack the leader of the SDP. He is having port and cigars in the Dining Room.
    Mr. Speaker: Order. We are here, so let the debate continue.
    Mr. Tebbit: I am sorry that the House is not in a more serious mood for a debate that takes place against a grim background of world unemployment.
    It is only right to congratulate the right hon. Member for Stepney and Poplar on reading stalwartly through his script and refusing to give way at any point to answer questions, even from his hon. Friends. It is no wonder that the right hon. Gentleman did not wish to give way because he spent 27 minutes on a standard whine and less than three minutes telling us what his right hon. Friend the Leader of the Opposition so recently described as a detailed blueprint for the return to full employment. All that we heard on the subject was that there should be a strong stimulus and that nationalised industries should be allowed to invest more.
    Is the right hon. Member for Stepney and Poplar aware that this year nationalised industries are programmed to spend about 26 per cent. more on capital expenditure than they spent last year? Last year British Telecom, which he singled out for special mention, could not spend the sums of money that were allocated to it. He must do much better than that. I shall return later to that detailed blueprint and the missing ingredient that the right hon. Gentleman again failed to mention—the incomes policy. Does he need an incomes policy or not? I am willing to give way to the right hon. Gentleman. He gave his recipe for the restoration of full employment. Does it include an incomes policy?
    Mr. Shore: I am not prepared to use unemployment as a scourge and whip to force people to accept coercive wage settlements.
    Mr. Tebbit: The right hon. Gentleman knows that that will not do. He cannot fool anyone with that. Does the right hon. Gentleman include an incomes policy in his programme for full employment?
    Mrs. Elaine Kellett-Bowman: Answer.
    Mr. Tebbit: The incredible response of the right hon. Gentleman and his party to the problem is shown clearly by the fact that this is the most basic problem that has been seen by everyone to be at the heart of the detailed blueprint and he cannot answer the question.
    Sir Geoffrey Howe: He will not answer it.
    Mr. Ennals rose—
    Mr. Tebbit: My right hon. and learned Friend says that he will not answer it. The point is that he dare not, because he and his right hon. Friend the Member for Chesterfield (Mr. Varley) wish to have an incomes policy but the national executive committee of the Labour Party will not let them have one.
    Mr. Ennals rose—
    Mr. Speaker: Order. It is quite clear that the Secretary of State is not giving way. As with the other hon. Members who have addressed the House, he is entitled to be heard. The right hon. Member for Stepney and Poplar (Mr. Shore) was heard, so the Secretary of State must also be heard.
    Mr. Tebbit: I am trying to deal with the sedentary interruptions that one can scarcely avoid from the less well mannered Members.
    The Government have never indulged in a formal incomes policy. Like any employer, the Government must
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    have in mind the maximum that they can afford to pay their employees, but we do not subscribe to incomes policies. We are clear about that, but the right hon. Member for Stepney and Poplar could not answer the question.
    We have discussed unemployment statistics today. Whatever statistics we use, we can see that in the free industrialised world, perhaps with the exception of Japan, there has been a huge increase in unemployment. Britain's historic problem of overmanning has been exacerbated by the appalling inflation of the past decade and its accompanying loss of competitiveness in British industry, which left us far more vulnerable than our rivals to the world recession. There are no statistics of any value from the State Socialist regimes of Eastern Europe, but the collapse of the Polish economy and the severe recession in other Eastern European countries have no doubt brought them problems of surplus labour and further problems to the Western world, which has for long supported the Socialist economies that cannot even feed their own populations.
    None of that can be disputed and should form part of the common ground on which we base our debate. Nor can there be any hiding from the extent of our unemployment problem. However, following the shake-outs of labour that commenced in 1979 and reached a peak in mid-1981, the rate of increase in unemployment has been slowing almost without interruption.
    Mr. Radice: Oh!
    Mr. Tebbit: I suggest that if the parrot of the hon Member for Chester-le-Street (Mr. Radice) reads the statistics properly, he too could get them right.
    Since September last year the annual increase in unemployment has been lower in each succesive month. Even so, the total has climbed to its present 3,200,000 and seasonal factors alone will take that to a new peak during the next few months. However, in many other countries the rate of increase is still accelerating. Notable examples are Germany, the Netherlands, Canada and the United States of America. In Germany, unemployment increased by 46 per cent. during the past 12 months and short-time working rose by one-third, while in Britain unemployment rose by 12 per cent and short-time working fell by 4 per cent.
    Mr. Ron Leighton: The Secretary of State talked about the shake-outs of labour since 1979. Is he saying that that was deliberate Government policy and that the figure of 3½ million unemployed is deliberate or that that was a mistake and an indictment of Government policy?
    Mr. Tebbit: It is an indictment of the past, which allowed overmanning to grow. There is no one better equipped to talk about the extent of overmanning in some industries than the hon. Gentleman, with his intimate experience of the practices of Fleet Street.
    There has been discussion about unemployment in France. The right hon. Member for Stepney and Poplar and his hon. Friends cannot get the figures right. Unemployment in France, on the unadjusted figure, taking no account of seasonal influences, has fallen, not in each of the past four months, as the right hon. Gentleman said, but in each of the past five months. However, as the right hon. Gentleman should know, we need to look more closely at the seasonally adjusted figures. They tell a slightly different story.

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    If the right hon. Gentleman wants to take a stand on the unadjusted figures, I am blessed if I know why he did not congratulate the Government on the fact that in Britain there have been six falls in unadjusted employment in the past 10 months. He was so proud of the French figure of a fall of 18,000 that he forgot to mention that there was a fall of 38,000 in the comparable figure in Britain in May. Therefore, I suggest that he should not spend too much time playing with statistics.
    Whatever the statistics say, they do not always compare like with like because there are factors such as the guest workers in Germany and national military service in both France and Germany. There are lessons to be learnt from the French experience. Inflation is rising in France. To be sure, unemployment does not present a happy picture. There is a massive balance of payments problem. There has been an enormous increase in unit costs of French products, all of which is bad news for their workers and good news for their competitors over the months ahead.
    Whatever the statistics say, and however we count the toll of the jobless who are actively seeking work, the House agrees that that represents a tragic waste of resources, skills and talents and a personal tragedy for the great mass of the unemployed and their families. Those of us who are old enough to have even childhood memories of pre-war unemployment—[Interruption.] I notice that the biggest mouths are those of Members who are too young to remember that. Those who can remember pre-war unemployment know that there is a vast difference between the degree of hardship and distress then and now.
    However, none of us would wish the return to full employment to be delayed a day longer than need be. In the meantime, to deal with the problems of the unemployed, we have devised and developed—[Interruption.] I do not think that the hon. Member for West Bromwich, West (Miss Boothroyd) wishes to listen to the debate.
    Miss Betty Boothroyd rose—
    Mr. Tebbit: After her rudeness, I shall not give way to her.
    In the meantime, we have developed a range of measures and we shall continue to do so. In particular, today we have announced that the Manpower Services Commission has been able to take advantage of the £150 million of extra public expenditure that my right hon. and learned Friend said in the Budget speech he would make available for additional help to the long-term unemployed. Opposition Members have constantly asked me to do more to assist the long-term unemployed through programmes of that type. It comes ill from those who asked for such measures now to be so mealy-mouthed and hypocritical in their reception of them.
    Miss Boothroyd: Will the right hon. Gentleman give way?
    Mr. Tebbit: I have too much to tell the House. The MSC scheme goes beyond even what my right hon. and learned Friend the Chancellor was initially prepared to offer. Bringing jobs to 100,000 of the long-term unemployed through the new community programme will necessitate a net extra expenditure of £185 million. There is a limit to the expenditure that can be made on that type of scheme without damaging the economy. Special
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    measures are now costing well in excess of £l½ billion. Together with the scheme that was announced today, we have done more than any of our predecessors would have done to deal with the problem. I am aware that some problems remain.
    Mr. Alexander W. Lyon rose—
    Mr. Tebbit: For example, there are still problems for some trade unions in the public sector in the implementation of the new community programme scheme. Nevertheless, I believe that those problems will be resolved with the help of the MSC. Those problems are common in many respects to both trade unions and employers.
    Mr. Lyon: Will the right hon. Gentleman give way?
    Mr. Tebbit: I am sorry but I shall not. When I consider the measures that the Government have advanced, especially in the past year, to deal with the problems, I find the tone and content of some hon. Members' speeches offensive, not to mention their pretty depressing level of economic illiteracy.
    Miss Boothroyd rose—
    Mr. Tebbit: Nothing will change the laws of economics since the right hon. Member for Cardiff, South-East (Mr. Callaghan)—
    Mr. Ennals: On a point of order, Mr. Speaker Is it not a tradition that the House—[Interruption.]—
    Mr. Speaker: Order. The House is debating an extremely serious issue.
    Mr. Winnick rose—
    Mr. Speaker: Order. I hope that for the remaining quarter of an hour we shall hear what is being said.
    Mr. Tebbit: I started my speech by giving way to a Labour Back Bencher to whom the Front Bench Opposition spokesman would not give way. I cannot give way again. As I was saying, nothing has changed the laws of economics since the right hon. Member for Cardiff, South-East made that classic statement:
    "We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists."
    We must repeat that statement in every debate as Opposition Members have forgotten it.
    Perhaps the tone for the debate was set by a statement that the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) made outside the House. He was unable to be present today. He made a major policy statement in last Sunday's News of the World. He wrote:
    "The SDP's unique contribution is that we have the determination and the realistic non-dogmatic policies Britain needs to turn the tide of unemployment."
    Eagerly, my eye continued down the page. Alas, that was the end of the policy statement. I therefore searched earlier columns. [Laughter.] The right hon. Member for Stepney and Poplar may laugh but his speech was no better. The right hon. Member for Hillhead said:
    "We can start by putting to more sensible use the taxpayers' money now spent on dole payments to people who would much rather have jobs."
    Well, yes, amen to that. But somewhere, something is still missing.

    1007
    For all that, however, search as one might, the right hon. Member for Hillhead could only offer contempt for those who
    "poison business confidence with a massive dose of nationalisation"—
    a clear dig at his hon. Friends—and a commitment to
    "get Britain's economy moving again by working with the grain of industry and not against".
    Never mind—he had something positive to say about SDP policy on nationalisation, although it goes ill with the fact that he voted for massive extensions of nationalisation until he was whisked off to Brussels.
    Let us turn to the policies of the official Opposition—
    Mr. George Foulkes: What about your policies?
    Miss Boothroyd rose—
    Mr. Tebbit: My right hon. and learned Friend the Chancellor has been dealing with the Government's policies today.
    Miss Boothroyd: Will the Minister give way?
    Mr. Speaker: Order. The hon. Lady must resume her seat. The Minister has said that he is not giving way.
    Mr. Foulkes: She is on the national executive.
    Mr. Speaker: Order. Mr. Tebbit.
    Mr. Tebbit rose—
    Mr. Shore: Will the right hon. Gentleman give way?
    Mr. Tebbit: I give way to the right hon. Member for Stepney and Poplar.
    Mr. Shore: Very briefly, it is now 9.50 pm and the right hon. Gentleman has not said a word about what he, with the power and authority of Government, intends to do to reduce unemployment.
    Mr. Tebbit: As the right hon. Gentleman himself devoted only three minutes to his policy, I thought that I might devote twice as much time to my own at the end of my speech. I gave way because I thought that the right hon. Gentleman was about to tell us whether he had an incomes policy. I am not surprised that he has problems.
    Hon. Members: Look who's here!
    Mr. Speaker: Order.
    Mr. Tebbit: It is difficult to make oneself heard—[Interruption.] There seems to be a somewhat unnatural—[Interruption.]
    Mr. Speaker: Order. The House has given its welcome to the right hon. Member for Glasgow, Hillhead (Mr. Jenkins). Now it really must listen to the Minister.
    Mr. Eric S. Heffer: There are 3½ million unemployed and the Minister talks about inflation.
    Mr. Speaker: Order.
    Mr. Tebbit: The hon. Member for Liverpool, Walton (Mr. Heifer) must not get over-excited. He was not here to listen to the debate. Perhaps he will start now.
    My hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) made what I am told was an excellent maiden speech. I was unfortunately not able to hear it as
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    I was talking to members of the Manpower Services Commission and discussing with some of the commissioners the very problems that we are dealing with today. I was glad to hear of my hon. Friend's welcome for enterprise zones, for lower interest rates and for the youth training scheme. I also welcome what she said about the need for colleges of further education to meet the needs of industry and young workers rather than merely continuing to offer courses that they had offered in the past.
    I am sorry that the hon. Member for Rochdale (Mr. Smith) could not to be more enthusiastic about the Government's problems. He pointed out the problems of achieving useful investment in the public sector. That is clearly right, as we see the problems of using the investment already made in British Rail. I am glad that the hon. Gentleman was able to welcome the job-splitting initiative, which was the other part of the Government's initiative today to help more people to find jobs in these difficult times.
    I should also comment on the remarkable speech of my right hon. Friend the Member for Taunton (Mr. du Cann), Although I did not hear it, I have been told—
    Mr. Foulkes: This is the listening Government.
    Mr. Tebbit: I was told of my right hon. Friend's strong and forthright support for the thrust of Government policies. As my right hon. Friend pointed out, and as the right hon. Member for Chesterfield used to point out but no longer does, airing inflation is the key to combating unemployment. The right hon. Member for Chesterfield said:
    "Financial stability and low inflation are the first two necessary conditions"
    for industrial regeneration. I hope that in view of the progress we have made on those fronts he will give at least two cheers.
    Mr. Varley: If the right hon. Gentleman is to be fair, he should point out that when I used those words unemployment was going down.
    Mr. Tebbit: The right hon. Gentleman will surely be even keener now to see lower inflation and greater financial stability, and even more keen to give the two cheers.
    I agree with my right hon. Friend the Member for Taunton. It is right to emphasise our progress on inflation, unit costs, competitiveness, the strong balance of payments and the confidence in sterling abroad. None of those improvements was mentioned by the right hon. Gentleman.
    Of course we all want lower interest rates. My right hon. Friend was absolutely right to say that there is no magic wand or formula and that we need to change the balance between current and capital expenditure. That means we need to hold back labour costs. As my right hon. Friend suggested, it would be instructive to get some of his friends from the City, with the skills that City bankers have, to take a sober assessment of some of the plans as they come forward.
    The right hon. Member for Houghton-le-Spring (Mr. Urwin) was, as always, sober and concerned. We share his concern about the "Atlantic Conveyor" contract. However, it is important to recollect that even after a substantial subsidy of 30 per cent. on British Shipbuilders' price there is still a wide gap between its price and that of

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    the foreign yards. Three parties are involved—Cunard, the Government and British Shipbuilders. All have a role in bridging that gap but they are all limited in what they can do. The Government will certainly do their part.
    The hon. Member for Tottenham (Mr. Atkinson) was typical of his colleagues in showing a contempt for small businesses. No doubt he would have despised Morris when he started his engineering business. No doubt he would have had nothing but contempt for Marks and Spencer when they had a market stall, even if his class consciousness causes him to touch his cap to Lord Sieff now that he is a big employer.
    My hon. Friend the Member for Kidderminster (Mr. Bulmer) had the realism of an employer in supporting the Government, as did my hon. Friends the Members for Aberdeenshire, West (Sir R. Fairgrieve) and for Edinburgh, South (Mr. Ancram).
    Of all the speeches from the Opposition Benches below the Gangway, the one that stood out was that of the hon. Member for Edinburgh, Leith (Mr. Brown). He had some difficulty in seeing the truth in the unemployment statistics. However, I believe he had some difficulty in seeing Russian tanks in Afghanistan, so I recommend an optician for him.
    For the reasons I have given, all our energies must be turned to how we can deal with the problem of unemployment. The first steps in the process of combating unemployment must be to restore profitability to industry, restore the stability of money, control inflation, reduce the cost of investment by lowering interest rates and improve the yield of wealth from our investments.
    Tax policies are, of course, important. A percentage point off the national insurance surcharge is important, but a 1 per cent. lower wage settlement is even more important. To reach competitive manning levels is of the greatest importance of all.
    The key factor has been neglected today. Unemployment is a problem of poor countries, not of rich countries. Our problem is that we have not been sufficiently good at producing wealth, but we have made good progress in laying the foundation for that wealth production. We shall not put another inflationary time bomb in those foundations to blow them up. For that reason I commend the amendment to the House and ask it to reject the motion.
    Question put, That the original words stand part of the Question:—
    The House divided: Ayes 257, Noes 311.

    Division 294]

    [10 pm

    AYES

    Adams, Allen

    Brocklebank-Fowler, C.

    Allaun, Frank

    Brown, Hugh D. (Provan)

    Alton, David

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

    Anderson, Donald

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

    Archer, Rt Hon Peter

    Brown, Ron (E'burgh, Leith)

    Ashley, Rt Hon Jack

    Buchan, Norman

    Ashton, Joe

    Callaghan, Rt Hon J.

    Atkinson, N. (H'gey,)

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

    Bagier, Gordon A.T.

    Campbell, Ian

    Barnett, Guy (Greenwich)

    Campbell-Savours, Dale

    Barnett, Rt Hon Joel (H'wd)

    Cant, R. B.

    Benn, Rt Hon Tony

    Carmichael, Neil

    Bennett, Andrew (St'kp't N)

    Carter-Jones, Lewis

    Bidwell, Sydney

    Cartwright, John

    Booth, Rt Hon Albert

    Clark, Dr David (S Shields)

    Boothroyd, Miss Betty

    Clarke, Thomas C'b'dge,

    Bottomley, Rt Hon A. (M'b'ro)

    A'drie

    Bradley, Tom

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

    Bray, Dr Jeremy

    Cohen, Stanley

    1010

    Coleman, Donald

    Jay, Rt Hon Douglas

    Concannon, Rt Hon J. D.

    Jenkins, Rt Hon Roy (Hillhead)

    Conlan, Bernard

    Cook, Robin F.

    John, Brynmor

    Cowans, Harry

    Johnson, James (Hull West)

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

    Johnson, Walter (Derby S)

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

    Jones, Rt Hon Alec (Rh'dda)

    Crawshaw, Richard

    Jones, Barry (East Flint)

    Crowther, Stan

    Kaufman, Rt Hon Gerald

    Cryer, Bob

    Kerr, Russell

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

    Kilfedder, James A.

    Dalyell, Tam

    Kilroy-Silk, Robert

    Davidson, Arthur

    Kinnock, Neil

    Davies, Rt Hon Denzil (L'lli)

    Lamond, James

    Davis, Clinton (Hackney C)

    Leadbitter, Ted

    Davis, Terry (B'ham, Stechf'd)

    Leighton, Ronald

    Deakins, Eric

    Lestor, Miss Joan

    Dean, Joseph (Leeds West)

    Lewis, Arthur (N'ham NW)

    Dewar, Donald

    Lewis, Ron (Carlisle)

    Dixon, Donald

    Litherland, Robert

    Dobson, Frank

    Lofthouse, Geoffrey

    Dormand, Jack

    Lyon, Alexander (York)

    Douglas, Dick

    Lyons, Edward (Bradf'd W)

    Dubs, Alfred

    Mabon, Rt Hon Dr J. Dickson

    Duffy, A. E. P.

    McCartney, Hugh

    Dunlop, John

    McDonald, Dr Oonagh

    Dunn, James A.

    McElhone, Frank

    Dunwoody, Hon Mrs G.

    McKay, Allen (Penistone)

    Eadie, Alex

    McKelvey, William

    Eastham, Ken

    MacKenzie, Rt Hon Gregor

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

    Maclennan, Robert

    Ellis, R. (NE D'bysh're)

    McMahon, Andrew

    Ellis, Tom (Wrexham)

    McNally, Thomas

    English, Michael

    McNamara, Kevin

    Ennals, Rt Hon David

    McWilliam, John

    Evans, loan (Aberdare)

    Magee, Bryan

    Evans, John (Newton)

    Marks, Kenneth

    Ewing, Harry

    Marshall, D (G'gow S'ton)

    Faulds, Andrew

    Marshall, Dr Edmund (Goole)

    Field, Frank

    Marshall, Jim (Leicester S)

    Fitch, Alan

    Martin, M (G'gow S'burn)

    Flannery, Martin

    Mason, Rt Hon Roy

    Foot, Rt Hon Michael

    Maynard, Miss Joan

    Ford, Ben

    Meacher, Michael

    Forrester, John

    Mellish, Rt Hon Robert

    Foster, Derek

    Mikardo, Ian

    Foulkes, George

    Millan, Rt Hon Bruce

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

    Miller, Dr M. S. (E Kilbride)

    Freud, Clement

    Mitchell, Austin (Grimsby)

    Garrett, John (Norwich S)

    Mitchell, R. C. (Soton Itchen)

    Garrett, W. E. (Wallsend)

    Morris, Rt Hon A. (W'shawe)

    George, Bruce

    Morris, Rt Hon C. (O'shaw)

    Gilbert, Rt Hon Dr John

    Morris, Rt Hon J. (Aberavon)

    Ginsburg, David

    Moyle, Rt Hon Roland

    Golding, John

    Mulley, Rt Hon Frederick

    Gourlay, Harry

    Newens, Stanley

    Graham, Ted

    Oakes, Rt Hon Gordon

    Grimond, Rt Hon J.

    O'Halloran, Michael

    Hamilton, James (Bothwell)

    O'Neill, Martin

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

    Orme, Rt Hon Stanley

    Hardy, Peter

    Palmer, Arthur

    Harrison, Rt Hon Walter

    Park, George

    Hart, Rt Hon Dame Judith

    Parker, John

    Haynes, Frank

    Pavitt, Laurie

    Healey, Rt Hon Denis

    Pendry, Tom

    Heffer, Eric S.

    Penhaligon, David

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

    Pitt, William Henry

    Holland, S. (L'b'th, Vauxh'll)

    Powell, Raymond (Ogmore)

    Home Robertson, John

    Prescott, John

    Homewood, William

    Price, C. (Lewisham W)

    Hooley, Frank

    Race, Reg

    Horam, John

    Radice, Giles

    Howell, Rt Hon D.

    Rees, Rt Hon M (Leeds S)

    Hoyle, Douglas

    Richardson, Jo

    Huckfield, Les

    Roberts, Albert (Normanton)

    Hudson Davies, Gwilym E.

    Roberts, Allan (Bootle)

    Hughes, Mark (Durham)

    Roberts, Ernest (Hackney N)

    Hughes, Robert (Aberdeen N)

    Roberts, Gwilym (Cannock)

    Hughes, Roy (Newport)

    Robinson, G. (Coventry NW)

    Janner, Hon Greville

    Robinson, P. (Belfast E)

    1011

    Rooker, J. W.

    Thorne, Stan (Preston South)

    Roper, John

    Tilley, John

    Ross, Ernest (Dundee West)

    Tinn, James

    Ross, Stephen (Isle of Wight)

    Torney, Tom

    Rowlands, Ted

    Urwin, Rt Hon Tom

    Ryman, John

    Varley, Rt Hon Eric G.

    Sandelson, Neville

    Wainwright, E. (Dearne V)

    Sever, John

    Wainwright, R. (Colne V)

    Sheerman, Barry

    Walker, Rt Hon H. (D'caster)

    Sheldon, Rt Hon R.

    Watkins, David

    Shore, Rt Hon Peter

    Weetch, Ken

    Short, Mrs Renée

    Wellbeloved, James

    Silkin, Rt Hon J. (Deptford)

    Welsh, Michael

    Silkin, Rt Hon S. C. (Dulwich)

    White, Frank R.

    Silverman, Julius

    White, J. (G'gow Pollok)

    Skinner, Dennis

    Whitehead, Phillip

    Smith, Cyril (Rochdale)

    Willey, Rt Hon Frederick

    Snape, Peter

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

    Soley, Clive

    Williams, Rt Hon Mrs (Crosby)

    Spearing, Nigel

    Spriggs, Leslie

    Wilson, Gordon (Dundee E)

    Stallard, A. W.

    Wilson, Rt Hon Sir H. (H'ton)

    Steel, Rt Hon David

    Wilson, William (C'try SE)

    Stewart, Rt Hon D. (W Isles)

    Winnick, David

    Stoddart, David

    Woodall, Alec

    Stott, Roger

    Woolmer, Kenneth

    Strang, Gavin

    Wrigglesworth, Ian

    Straw, Jack

    Wright, Sheila

    Summerskill, Hon Dr Shirley

    Young, David (Bolton E)

    Thomas, Dafydd (Merioneth)

    Thomas, Jeffrey (Abertillery)

    Tellers for the Ayes:

    Thomas, Mike (Newcastle E)

    Mr. George Morton and

    Thomas, Dr R. (Carmarthen)

    Mr. Lawrence Cunliffe.

    NOES

    Adley, Robert

    Carlisle, Kenneth (Lincoln)

    Aitken, Jonathan

    Chalker, Mrs. Lynda

    Alexander, Richard

    Chapman, Sydney

    Alison, Rt Hon Michael

    Churchill, W. S.

    Amery, Rt Hon Julian

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

    Ancram, Michael

    Clark, Sir W. (Croydon S)

    Arnold, Tom

    Clarke, Kenneth (Rushcliffe)

    Aspinwall, Jack

    Clegg, Sir Walter

    Atkins, Rt Hon H. (S'thorne)

    Cockeram, Eric

    Atkins, Robert (Preston N)

    Colvin, Michael

    Atkinson, David (B'm'th,E)

    Cope, John

    Baker, Kenneth (St.M'bone)

    Cormack, Patrick

    Baker, Nicholas (N Dorset)

    Corrie, John

    Banks, Robert

    Costain, Sir Albert

    Beaumont-Dark, Anthony

    Cranborne, Viscount

    Bendall, Vivian

    Critchley, Julian

    Benyon, Thomas (A'don)

    Crouch, David

    Benyon, W. (Buckingham)

    Dickens, Geoffrey

    Best, Keith

    Dorrell, Stephen

    Bevan, David Gilroy

    Douglas-Hamilton, Lord J.

    Biffen, Rt Hon John

    Dover, Denshore

    Biggs-Davison, Sir John

    du Cann, Rt Hon Edward

    Blackburn, John

    Dunn, Robert (Dartford)

    Blaker, Peter

    Durant, Tony

    Body, Richard

    Dykes, Hugh

    Bonsor, Sir Nicholas

    Eden, Rt Hon Sir John

    Boscawen, Hon Robert

    Edwards, Rt Hon N. (P'broke)

    Bottomley, Peter (W'wich W)

    Eggar, Tim

    Bowden, Andrew

    Elliott, Sir William

    Boyson, Dr Rhodes

    Emery, Sir Peter

    Braine, Sir Bernard

    Eyre, Reginald

    Brinton, Tim

    Fairbairn, Nicholas

    Brittan, Rt. Hon. Leon

    Fairgrieve, Sir Russell

    Brooke, Hon Peter

    Faith, Mrs Sheila

    Brown, Michael (Brigg & Sc'n)

    Farr, John

    Browne, John (Winchester)

    Fell, Sir Anthony

    Bruce-Gardyne, John

    Fenner, Mrs Peggy

    Bryan, Sir Paul

    Fisher, Sir Nigel

    Buchanan-Smith, Rt. Hon. A.

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

    Buck, Antony

    Fletcher-Cooke, Sir Charles

    Budgen, Nick

    Fookes, Miss Janet

    Bulmer, Esmond

    Forman, Nigel

    Butcher, John

    Fowler, Rt Hon Norman

    Cadbury, Jocelyn

    Fox, Marcus

    Carlisle, John (Luton West)

    Fraser, Rt Hon Sir Hugh

    1012

    Fraser, Peter (South Angus)

    Macmillan, Rt Hon M.

    Fry, Peter

    McNair-Wilson, M. (N'bury)

    Gardner, Edward (S Fylde)

    McNair-Wilson, P. (New F'st)

    Garel-Jones, Tristan

    Madel, David

    Gilmour, Rt Hon Sir Ian

    Major, John

    Glyn, Dr Alan

    Marland, Paul

    Goodhart, Sir Philip

    Marlow, Antony

    Goodhew, Sir Victor

    Marshall, Michael (Arundel)

    Goodlad, Alastair

    Marten, Rt Hon Neil

    Gorst, John

    Mates, Michael

    Gow, Ian

    Maude, Rt Hon Sir Angus

    Gower, Sir Raymond

    Mawby, Ray

    Grant, Anthony (Harrow C)

    Mawhinney, Dr Brian

    Gray, Hamish

    Maxwell-Hyslop, Robin

    Greenway, Harry

    Mayhew, Patrick

    Griffiths, E. (B'y St. Edm'ds)

    Mellor, David

    Griffiths, Peter Portsm'th N)

    Meyer, Sir Anthony

    Grist, Ian

    Miller, Hal (B'grove)

    Grylls, Michael

    Mills, Iain (Meriden)

    Gummer, John Selwyn

    Mills, Sir Peter (West Devon)

    Hamilton, Hon A.

    Miscampbell, Norman

    Hamilton, Michael (Salisbury)

    Moate, Roger

    Hampson, Dr Keith

    Monro, Sir Hector

    Hannam, John

    Montgomery, Fergus

    Haselhurst, Alan

    Moore, John

    Hastings, Stephen

    Morgan, Geraint

    Havers, Rt Hon Sir Michael

    Morrison, Hon C. (Devizes)

    Hawkins, Sir Paul

    Morrison, Hon P. (Chester)

    Hawksley, Warren

    Mudd, David

    Hayhoe, Barney

    Murphy, Christopher

    Heath, Rt Hon Edward

    Myles, David

    Heddle, John

    Neale, Gerrard

    Henderson, Barry

    Needham, Richard

    Heseltine, Rt Hon Michael

    Nelson, Anthony

    Hicks, Robert

    Neubert, Michael

    Hill, James

    Newton, Tony

    Hogg, Hon Douglas (Gr'th'm)

    Normanton, Tom

    Holland, Philip (Carlton)

    Nott, Rt Hon John

    Hooson, Tom

    Onslow, Cranley

    Hordern, Peter

    Oppenheim, Rt Hon Mrs S.

    Howe, Rt Hon Sir Geoffrey

    Osborn, John

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

    Page, John (Harrow, West)

    Howell, Ralph (N Norfolk)

    Parkinson, Rt Hon Cecil

    Hunt, David (Wirral)

    Parris, Matthew

    Hunt, John (Ravensbourne)

    Patten, John (Oxford)

    Hurd, Rt Hon Douglas

    Pattie, Geoffrey

    Irvine, Rt Hon Bryant Godman

    Pawsey, James

    Irving, Charles (Cheltenham)

    Percival, Sir Ian

    Jenkin, Rt Hon Patrick

    Peyton, Rt Hon John

    Jessel, Toby

    Pink, R. Bonner

    Johnson Smith, Sir Geoffrey

    Porter, Barry

    Jopling, Rt Hon Michael

    Prentice, Rt Hon Reg

    Joseph, Rt Hon Sir Keith

    Price, Sir David (Eastleigh)

    Kaberry, Sir Donald

    Proctor, K. Harvey

    Kellett-Bowman, Mrs Elaine

    Pym, Rt Hon Francis

    Kershaw, Sir Anthony

    Raison, Rt Hon Timothy

    Kimball, Sir Marcus

    Rathbone, Tim

    King, Rt Hon Tom

    Rees, Peter (Dover and Deal)

    Kitson, Sir Timothy

    Rees-Davies, W. R.

    Knight, Mrs Jill

    Renton, Tim

    Knox, David

    Rhodes James, Robert

    Lamont, Norman

    Rhys Williams, Sir Brandon

    Lang, Ian

    Ridsdale, Sir Julian

    Langford-Holt, Sir John

    Rifkind, Malcolm

    Latham, Michael

    Rippon, Rt Hon Geoffrey

    Lawrence, Ivan

    Roberts, M. (Cardiff NW)

    Lawson, Rt Hon Nigel

    Roberts, Wyn (Conway)

    Lee, John

    Rossi, Hugh

    Lennox-Boyd, Hon Mark

    Rost, Peter

    Lester, Jim (Beeston)

    Royle, Sir Anthony

    Lewis, Kenneth (Rutland)

    Rumbold, Mrs A. C. R.

    Lloyd, Ian (Havant & W'loo)

    Sainsbury, Hon Timothy

    Lloyd, Peter (Fareham)

    St. John-Stevas, Rt Hon N.

    Loveridge, John

    Scott, Nicholas

    Luce, Richard

    Shaw, Giles (Pudsey)

    Lyell, Nicholas

    Shaw, Sir Michael (Scarb')

    McCrindle, Robert

    Shelton, William (Streatham)

    Macfarlane, Neil

    Shepherd, Colin (Hereford)

    MacGregor, John

    Shepherd, Richard

    MacKay, John (Argyll)

    Shersby, Michael

    1013

    Silvester, Fred

    Trotter, Neville

    Sims, Roger

    van Straubenzee, Sir W.

    Skeet, T. H. H.

    Vaughan, Dr Gerard

    Smith, Dudley

    Viggers, Peter

    Smith, Tim (Beaconsfield)

    Waddington, David

    Speed, Keith

    Wakeham, John

    Speller, Tony

    Waldegrave, Hon William

    Spence, John

    Walker, Rt Hon P.(W'cester)

    Spicer, Jim (West Dorset)

    Walker, B. (Perth)

    Spicer, Michael (S Worcs)

    Walker-Smith, Rt Hon Sir D.

    Sproat, Iain

    Wall, Sir Patrick

    Squire, Robin

    Waller, Gary

    Stainton, Keith

    Walters, Dennis

    Stanbrook, Ivor

    Ward, John

    Stanley, John

    Warren, Kenneth

    Steen, Anthony

    Watson, John

    Stevens, Martin

    Wells, Bowen

    Stewart, A. (E Renfrewshire)

    Wells, John (Maidstone)

    Stewart, Ian (Hitchin)

    Wheeler, John

    Stokes, John

    Whitelaw, Rt Hon William

    Stradling Thomas, J.

    Whitney, Raymond

    Tapsell, Peter

    Wickenden, Keith

    Taylor, Teddy (S'end E)

    Wiggin, Jerry

    Tebbit, Rt Hon Norman

    Wilkinson, John

    Temple-Morris, Peter

    Williams, D. (Montgomery)

    Thatcher, Rt Hon Mrs M.

    Wolfson, Mark

    Thomas, Rt Hon Peter

    Young, Sir George (Acton)

    Thompson, Donald

    Younger, Rt Hon George

    Thorne, Neil (Ilford South)

    Thornton, Malcolm

    Tellers for the Noes:

    Townend, John (Bridlington)

    Mr. Anthony Berry and

    Townsend, Cyril D, (B'heath)

    Mr. Carol Mather.

    Trippier, David

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments):—
    The House divided: Ayes 311, Noes 257.

    Division No. 295]

    [10.14 pm

    AYES

    Adley, Robert

    Bryan, Sir Paul

    Aitken, Jonathan

    Buchanan-Smith, Rt. Hon. A.

    Alexander, Richard

    Buck, Antony

    Alison, Rt Hon Michael

    Budgen, Nick

    Amery, Rt Hon Julian

    Bulmer, Esmond

    Ancram, Michael

    Butcher, John

    Arnold, Tom

    Cadbury, Jocelyn

    Aspinwall, Jack

    Carlisle, John (Luton West)

    Atkins, Rt Hon H. (S'thorne)

    Carlisle, Kenneth (Lincoln)

    Atkins, Robert (Preston N)

    Chalker, Mrs. Lynda

    Atkinson, David (B'm'th,E)

    Chapman, Sydney

    Baker, Kenneth (St. M'bone)

    Churchill, W. S.

    Baker, Nicholas (N Dorset)

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

    Banks, Robert

    Clark, Sir W. (Croydon S)

    Beaumont-Dark, Anthony

    Clarke, Kenneth (Rushcliffe)

    Bendall, Vivian

    Clegg, Sir Walter

    Benyon, Thomas (A'don)

    Cockeram, Eric

    Benyon, W. (Buckingham)

    Colvin, Michael

    Best, Keith

    Cope, John

    Bevan, David Gilroy

    Cormack, Patrick

    Biffen, Rt Hon John

    Corrie, John

    Biggs-Davison, Sir John

    Costain, Sir Albert

    Blackburn, John

    Cranborne, Viscount

    Blaker, Peter

    Critchley, Julian

    Body, Richard

    Crouch, David

    Bonsor, Sir Nicholas

    Dickens, Geoffrey

    Boscawen, Hon Robert

    Dorrell, Stephen

    Bottomley, Peter (W'wich W)

    Douglas-Hamilton, Lord J.

    Bowden, Andrew

    Dover, Denshore

    Boyson, Dr Rhodes

    du Cann, Rt Hon Edward

    Braine, Sir Bernard

    Dunn, Robert (Dartford)

    Brinton, Tim

    Durant, Tony

    Brittan, Rt. Hon. Leon

    Dykes, Hugh

    Brooke, Hon Peter

    Eden, Rt Hon Sir John

    Brown, Michael (Brigg & Sc'n)

    Edwards, Rt Hon N. (P'broke)

    Browne, John (Winchester)

    Eggar, Tim

    Bruce-Gardyne, John

    Elliott, Sir William

    1014

    Emery, Sir Peter

    Latham, Michael

    Eyre, Reginald

    Lawrence, Ivan

    Fairbairn, Nicholas

    Lawson, Rt Hon Nigel

    Fairgrieve, Sir Russell

    Lee, John

    Faith, Mrs Sheila

    Lennox-Boyd, Hon Mark

    Farr, John

    Lester, Jim (Beeston)

    Fell, Sir Anthony

    Lewis, Kenneth (Rutland)

    Fenner, Mrs Peggy

    Lloyd, Ian (Havant & W'loo)

    Fisher, Sir Nigel

    Lloyd, Peter (Fareham)

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

    Loveridge, John

    Fletcher-Cooke, Sir Charles

    Luce, Richard

    Fookes, Miss Janet

    Lyell, Nicholas

    Forman, Nigel

    McCrindle, Robert

    Fowler, Rt Hon Norman

    Macfarlane, Neil

    Fox, Marcus

    MacGregor, John

    Fraser, Rt Hon Sir Hugh

    MacKay, John (Argyll)

    Fraser, Peter (South Angus)

    Macmillan, Rt Hon M.

    Fry, Peter

    McNair-Wilson, M. (N'bury)

    Gardner, Edward (S Fylde)

    McNair-Wilson, P. (New F'st)

    Garel-Jones, Tristan

    Madel, David

    Gilmour, Rt Hon Sir Ian

    Major, John

    Glyn, Dr Alan

    Marland, Paul

    Goodhart, Sir Philip

    Marlow, Antony

    Goodhew, Sir Victor

    Marshall, Michael (Arundel)

    Goodlad, Alastair

    Marten, Rt Hon Neil

    Gorst, John

    Mates, Michael

    Gow, Ian

    Maude, Rt Hon Sir Angus

    Gower, Sir Raymond

    Mawby, Ray

    Grant, Anthony (Harrow C)

    Mawhinney, Dr Brian

    Gray, Hamish

    Maxwell-Hyslop, Robin

    Greenway, Harry

    Mayhew, Patrick

    Griffiths, E. (B'y St. Edm'ds)

    Mellor, David

    Griffiths, Peter Portsm'th N)

    Meyer, Sir Anthony

    Grist, Ian

    Miller, Hal (B'grove)

    Grylls, Michael

    Mills, Iain (Meriden)

    Gummer, John Selwyn

    Mills, Sir Peter (West Devon)

    Hamilton, Hon A.

    Miscampbell, Norman

    Hamilton, Michael (Salisbury)

    Moate, Roger

    Hampson, Dr Keith

    Monro, Sir Hector

    Hannam, John

    Montgomery, Fergus

    Haselhurst, Alan

    Moore, John

    Hastings, Stephen

    Morgan, Geraint

    Havers, Rt Hon Sir Michael

    Morrison, Hon C. (Devizes)

    Hawkins, Sir Paul

    Morrison, Hon P. (Chester)

    Hawksley, Warren

    Mudd, David

    Hayhoe, Barney

    Murphy, Christopher

    Heath, Rt Hon Edward

    Myles, David

    Heddle, John

    Neale, Gerrard

    Henderson, Barry

    Needham, Richard

    Heseltine, Rt Hon Michael

    Nelson, Anthony

    Hicks, Robert

    Neubert, Michael

    Hill, James

    Newton, Tony

    Hogg, Hon Douglas (Gr'th'm)

    Normanton, Tom

    Holland, Philip (Carlton)

    Nott, Rt Hon John

    Hooson, Tom

    Onslow, Cranley

    Hordern, Peter

    Oppenheim, Rt Hon Mrs S.

    Howe, Rt Hon Sir Geoffrey

    Osborn, John

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

    Page, John (Harrow, West)

    Howell, Ralph (N Norfolk)

    Parkinson, Rt Hon Cecil

    Hunt, David (Wirral)

    Parris, Matthew

    Hunt, John (Ravensbourne)

    Patten, John (Oxford)

    Hurd, Rt Hon Douglas

    Pattie, Geoffrey

    Irvine, Bryant Godman

    Pawsey, James

    Irving, Charles (Cheltenham)

    Percival, Sir Ian

    Jenkin, Rt Hon Patrick

    Peyton, Rt Hon John

    Jessel, Toby

    Pink, R. Bonner

    Johnson Smith, Sir Geoffrey

    Porter, Barry

    Jopling, Rt Hon Michael

    Prentice, Rt Hon Reg

    Joseph, Rt Hon Sir Keith

    Price, Sir David (Eastleigh)

    Kaberry, Sir Donald

    Proctor, K. Harvey

    Kellett-Bowman, Mrs Elaine

    Pym, Rt Hon Francis

    Kershaw, Sir Anthony

    Raison, Rt Hon Timothy

    Kimball, Sir Marcus

    Rathbone, Tim

    King, Rt Hon Tom

    Rees, Peter (Dover and Deal)

    Kitson, Sir Timothy

    Rees-Davies, W. R.

    Knight, Mrs Jill

    Ronton, Tim

    Knox, David

    Rhodes James, Robert

    Lamont, Norman

    Rhys Williams, Sir Brandon

    Lang, Ian

    Ridsdale, Sir Julian

    Langford-Holt, Sir John

    Rifkind, Malcolm

    1015

    Rippon, Rt Hon Geoffrey

    Thatcher, Rt Hon Mrs M.

    Roberts, M. (Cardiff NW)

    Thomas, Rt Hon Peter

    Roberts, Wyn (Conway)

    Thompson, Donald

    Rossi, Hugh

    Thorne, Neil (Ilford South)

    Rost, Peter

    Thornton, Malcolm

    Royle, Sir Anthony

    Townend, John (Bridlington)

    Rumbold, Mrs A. C. R.

    Townsend, Cyril D, (B'heath)

    Sainsbury, Hon Timothy

    Trippier, David

    St. John-Stevas, Rt Hon N.

    Trotter, Neville

    Scott, Nicholas

    van Straubenzee, Sir W.

    Shaw, Giles (Pudsey)

    Vaughan, Dr Gerard

    Shaw, Sir Michael (Scarb')

    Viggers, Peter

    Shelton, William (Streatham)

    Waddington, David

    Shepherd, Colin (Hereford)

    Wakeham, John

    Shepherd, Richard

    Waldegrave, Hon William

    Shersby, Michael

    Walker, Rt Hon P. (W'cester)

    Silvester, Fred

    Walker, B. (Perth)

    Sims, Roger

    Walker-Smith, Rt Hon Sir D.

    Skeet, T. H. H.

    Wall, Sir Patrick

    Smith, Dudley

    Waller, Gary

    Smith, Tim (Beaconsfield)

    Walters, Dennis

    Speed, Keith

    Ward, John

    Speller, Tony

    Warren, Kenneth

    Spence, John

    Watson, John

    Spicer, Jim (West Dorset)

    Wells, Bowen

    Spicer, Michael (S Worcs)

    Wells, John (Maidstone)

    Sproat, Iain

    Wheeler, John

    Squire, Robin

    Whitelaw, Rt Hon William

    Stainton, Keith

    Whitney, Raymond

    Stanbrook, Ivor

    Wickenden, Keith

    Stanley, John

    Wiggin, Jerry

    Steen, Anthony

    Wilkinson, John

    Stevens, Martin

    Williams, D. (Montgomery)

    Stewart, A. (E Renfrewshire)

    Wolfson, Mark

    Stewart, Ian (Hitchin)

    Young, Sir George (Acton)

    Stokes, John

    Younger, Rt Hon George

    Stradling Thomas, J.

    Tapsell, Peter

    Tellers for the Ayes:

    Taylor, Teddy (S'end E)

    Mr. Carol Mather and

    Tebbit, Rt Hon Norman

    Mr. Anthony Berry.

    Temple-Morris, Peter

    NOES

    Adams, Allen

    Cohen, Stanley

    Allaun, Frank

    Coleman, Donald

    Alton, David

    Concannon, Rt Hon J. D.

    Anderson, Donald

    Conlan, Bernard

    Archer, Rt Hon Peter

    Cook, Robin F.

    Ashley, Rt Hon Jack

    Cowans, Harry

    Ashton, Joe

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

    Atkinson, H. (H'gey,)

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

    Bagier, Gordon A.T.

    Crawshaw, Richard

    Barnett, Guy (Greenwich)

    Crowther, Stan

    Barnett, Rt Hon Joel (H'wd)

    Cryer, Bob

    Benn, Rt Hon Tony

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

    Bennett, Andrew (St'kp't N)

    Dalyell, Tam

    Bidwell, Sydney

    Davidson, Arthur

    Booth, Rt Hon Albert

    Davies, Rt Hon Denzil (L'lli)

    Boothroyd, Miss Betty

    Davis, Clinton (Hackney C)

    Bottomley, Rt Hon A. (M'b'ro)

    Davis, Terry (B'ham, Stechf'd)

    Bradley, Tom

    Deakins, Eric

    Bray, Dr Jeremy

    Dean, Joseph (Leeds West)

    Brocklebank-Fowler, C.

    Dewar, Donald

    Brown, Hugh D. (Provan)

    Dixon, Donald

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

    Dobson, Frank

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

    Dormand, Jack

    Brown, Ron (E'burgh, Leith)

    Douglas, Dick

    Buchan, Norman

    Dubs, Alfred

    Callaghan, Rt Hon J.

    Duffy, A. E. P.

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

    Dunlop, John

    Campbell, Ian

    Dunn, James A.

    Campbell-Savours, Dale

    Dunwoody, Hon Mrs G.

    Cant, R. B.

    Eadie, Alex

    Carmichael, Neil

    Eastham, Ken

    Carter-Jones, Lewis

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

    Cartwright, John

    Ellis, R. (NE D'bysh're)

    Clark, Dr David (S Shields)

    Ellis, Tom (Wrexham)

    Clarke, Thomas C'b'dge,

    English, Michael

    A'drie

    Ennals, Rt Hon David

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

    Evans, Ioan (Aberdare)

    1016

    Evans, John (Newton)

    Marshall, D (G'gow S'ton)

    Ewing, Harry

    Marshall, Dr Edmund (Goole)

    Faulds, Andrew

    Marshall, Jim (Leicester S)

    Field, Frank

    Martin, M (G'gow S'burn)

    Fitch, Alan

    Mason, Rt Hon Roy

    Flannery, Martin

    Maynard, Miss Joan

    Foot, Rt Hon Michael

    Meacher, Michael

    Ford, Ben

    Mellish, Rt Hon Robert

    Forrester, John

    Mikardo, Ian

    Foster, Derek

    Millan, Rt Hon Bruce

    Foulkes, George

    Miller, Dr M. S. (E Kilbride)

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

    Mitchell, Austin (Grimsby)

    Freud, Clement

    Mitchell, R. C. (Soton Itchen)

    Garrett, John (Norwich S)

    Morris, Rt Hon A. (W'shawe)

    Garrett, W. E. (Wallsend)

    Morris, Rt Hon C. (O'shaw)

    George, Bruce

    Morris, Rt Hon J. (Aberavon)

    Gilbert, Rt Hon Dr John

    Morton, George

    Ginsburg, David

    Moyle, Rt Hon Roland

    Golding, John

    Mulley, Rt Hon Frederick

    Gourlay, Harry

    Newens, Stanley

    Graham, Ted

    Oakes, Rt Hon Gordon

    Grimond, Rt Hon J.

    O'Halloran, Michael

    Hamilton, James (Bothwell)

    O'Neill, Martin

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

    Orme, Rt Hon Stanley

    Hardy, Peter

    Palmer, Arthur

    Harrison, Rt Hon Walter

    Park, George

    Hart, Rt Hon Dame Judith

    Parker, John

    Healey, Rt Hon Denis

    Pavitt, Laurie

    Heffer, Eric S.

    Pendry, Tom

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

    Penhaligon, David

    Holland, S. (L'b'th, Vauxh'll)

    Pitt, William Henry

    Home Robertson, John

    Powell, Raymond (Ogmore)

    Homewood, William

    Prescott, John

    Hooley, Frank

    Price, C. (Lewisham W)

    Horam, John

    Race, Reg

    Howell, Rt Hon D.

    Radice, Giles

    Hoyle, Douglas

    Rees, Rt Hon M (Leeds S)

    Huckfield, Les

    Richardson, Jo

    Hudson Davies, Gwilym E.

    Roberts, Albert (Normanton)

    Hughes, Mark (Durham)

    Roberts, Allan (Bootle)

    Hughes, Robert (Aberdeen N)

    Roberts, Ernest (Hackney N)

    Hughes, Roy (Newport)

    Roberts, Gwilym (Cannock)

    Janner, Hon Greville

    Robinson, G. (Coventry NW)

    Jay, Rt Hon Douglas

    Robinson, P. (Belfast E)

    Jenkins, Rt Hon Roy

    Rooker, J. W.

    (Hillhead)

    Roper, John

    John, Brynmor

    Ross, Ernest (Dundee West)

    Johnson, James (Hull West)

    Ross, Stephen (Isle of Wight)

    Johnson, Walter (Derby S)

    Rowlands, Ted

    Jones, Rt Hon Alec (Rh'dda)

    Ryman, John

    Jones, Barry (East Flint)

    Sandelson, Neville

    Kaufman, Rt Hon Gerald

    Sever, John

    Kerr, Russell

    Sheerman, Barry

    Kilfedder, James A.

    Sheldon, Rt Hon R.

    Kilroy-Silk, Robert

    Shore, Rt Hon Peter

    Kinnock, Neil

    Short, Mrs Renée

    Lamond, James

    Silkin, Rt Hon J. (Deptford)

    Leadbitter, Ted

    Silkin, Rt Hon S. C. (Dulwich)

    Leighton, Ronald

    Silverman, Julius

    Lestor, Miss Joan

    Skinner, Dennis

    Lewis, Arthur (N'ham NW)

    Smith, Cyril (Rochdale)

    Lewis, Ron (Carlisle)

    Snape, Peter

    Litherland, Robert

    Soley, Clive

    Lofthouse, Geoffrey

    Spearing, Nigel

    Lyon, Alexander (York)

    Spriggs, Leslie

    Lyons, Edward (Bradf'd W)

    Stallard, A. W.

    Mabon, Rt Hon Dr J. Dickson

    Steel, Rt Hon David

    McCartney, Hugh

    Stewart, Rt Hon D. (W Isles)

    McDonald, Dr Oonagh

    Stoddart, David

    McElhone, Frank

    Stott, Roger

    McKay, Allen (Penistone)

    Strang, Gavin

    McKelvey, William

    Straw, Jack

    MacKenzie, Rt Hon Gregor

    Summerskill, Hon Dr Shirley

    Maclennan, Robert

    Thomas, Dafydd (Merioneth)

    McMahon, Andrew

    Thomas, Jeffrey (Abertillery)

    McNally, Thomas

    Thomas, Mike (Newcastle E)

    McNamara, Kevin

    Thomas, Dr R.(Carmarthen)

    McWilliam, John

    Thorne, Stan (Preston South)

    Magee, Bryan

    Tilley, John

    Marks, Kenneth

    Tinn, James

    1017

    Torney, Tom

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

    Urwin, Rt Hon Tom

    Williams, Rt Hon Mrs (Crosby)

    Varley, Rt Hon Eric G.

    Wainwright, E. (Dearne V)

    Wilson, Gordon (Dundee E)

    Wainwright, R. (Colne V)

    Wilson, Rt Hon Sir H. (H'ton)

    Walker, Rt Hon H. (D'caster)

    Wilson, William (C'try SE)

    Watkins, David

    Winnick, David

    Weetch, Ken

    Woodall, Alec

    Wellbeloved, James

    Woolmer, Kenneth

    Welsh, Michael

    Wrigglesworth, Ian

    White, Frank R.

    Wright, Sheila

    White, J. (G'gow Pollok)

    Young, David (Bolton E)

    Whitehead, Phillip

    Willey, Rt Hon Frederick

    Tellers for the Noes:

    Question accordingly agreed to.
    MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House, recognising that the problem of rising unemployment is world-wide, supports the policies of Her Majesty's Government, which offer more realistic prospects of economic recovery and secure employment than the failed Socialist policies of the past.
    It being after Ten o'clock, MR. SPEAKER proceeded to put forthwith the Question which he was directed by paragraphs (8) and (11) of Standing Order No. 18 (Business of Supply) to put at that hour.

    DEFENCE AND CIVIL ESTIMATES, 1982–83 (OUTSTANDING VOTES)
    Resolved,
    That a sum, not exceeding £46,333,677,300 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Defence, and Civil Services for the year ending on 31st March 1983, as set out in House of Commons Papers 429, 430, 431, 432 and 440.—[Mr. Bruce-Gardyne.]
    Bill ordered to be brought in upon the foregoing Resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Leon Brittan, Mr. Nicholas Ridley, Mr. Jock Bruce-Gardyne, Mr. Barney Hayhoe and Mr. John Wakeham.

    CONSOLIDATED FUND (APPROPRIATION)
    Mr. Bruce-Gardyne accordingly presented a Bill to apply a sum out of the Consolidated Fund to the service of the year ending on 31 March 1983 to appropriate the supplies granted in this Session of Parliament, and to repeal certain Consolidated Fund and Appropriation Acts: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 160.]

  Nursing, Midwifery and Health Visiting
  10.26 pm
  The Minister for Health (Mr. Kenneth Clarke): I beg to move,
  That the draft United Kingdom Central Council for Nursing, Midwifery and Health Visiting (Electoral Scheme) Order 1982, which was laid before this House on 8th July, be approved.
  This order is important to the professions of nursing, midwifery and health visiting. It is one part of the process of devising new arrangements for the education, training and discipline of those professions. The whole subject matter of reforming the structure of the professions is taken very seriously by the Government. The order follows directly from the setting up of the United Kingdom central council and the four national boards for nursing, midwifery and health visiting under the Nurses, Midwives and Health Visitors Act 1979. I shall briefly give the background to that Act and bring hon. Members up to date on what has happened since the Act received the Royal Assent in April 1979, and how the election scheme now before us fits into the process.
  As the House will recall, the Act arose originally from the report in 1972 of the committee on nursing, chaired by Professor Asa Briggs, now Lord Briggs, which recommended a unified statutory structure for nurses, midwives and health visitors as a prerequisite for the reappraisal of the future education and training needs of the profession. The bringing together of all special interests into one structure should make it possible to identify needs across the board and to examine the interrelationship between basic and post-basic training in such a way as to produce more effective patterns of education and training.
  The Nurses, Midwives and Health Visitors Act 1979 arose out of the Briggs report of 1972. It provided for the education, training, regulation and discipline of nurses, midwives, health visitors and the maintenance of a single professional register. The Act and the order do not implement any of the detailed Briggs recommendations on nurses' education and training, but they establish the framework on which future changes can be made. That framework is provided by the establishment of new bodies—the United Kingdom Central Council for Nursing, Midwifery and Health Visiting, and also four national boards for nursing, midwifery and health visiting, one for each country in the United Kingdom. Those new bodies will replace the nine existing statutory and other training bodies which will be dissolved eventually under the Act.
  The present Government continued the policy of moving towards the new structure for nursing that has been developed by our two predecessors—the last Conservative Government and the last Labour Government.
  We see the setting up of the five new bodies as the means of developing the education and training of nurses, midwives and health visitors throughout the four countries of the United Kingdom. We place a great priority on the development of the professions and we recognise the vital part that that will play in maintaining a high standard of patient care in the future. We see the whole process as a great opportunity for the profession as a whole, and I am confident that that opportunity will be taken.
  Most of the Act has not yet come into force, but the United Kingdom central council and the four national
  1020
  boards—one for each country—were set up in November and September 1980 respectively to prepare themselves for taking over the functions of the nine existing nurse training bodies. The old existing bodies continue to carry out all registration and training functions until the new bodies are ready to assume that responsibility. All the present members of the new bodies were appointed by Ministers from the four United Kingdom Departments responsible.
  With effect from 15 September 1983 each of the national boards will consist partly of members directly appointed by Ministers and partly of elected members. The elected members will be elected under an electoral scheme proposed by the central council and approved by my right hon. Friend the Secretary of State for Social Services. In accordance with the Act, elected members will form the majority of each national board.
  Each newly constituted national board must then nominate members to the central council in equal numbers, and the majority of the central council must consist of national board members with the remainder being directly appointed by my right hon. Friend the Secretary of State.
  The details of the scheme are very much a matter for the profession. I should like to acknowledge the detailed work that the present members and staff of the central council have undertaken in its preparation. Together with my colleagues, the health Ministers with responsibility for health from other United Kingdom Departments, I have met members of the council and have gone through the details of the scheme that they propose with them.
  The Act provides that Ministers and the House have to take a view of this scheme. I have taken a broad view that this matter is, in the first place, very much a matter for the profession to resolve and for the profession to carry its own members with it. The role of the Ministers and the House is to intervene if things look as if they are going sadly awry. I hope that it is apparent to the House that the fact that we are promoting this order this evening means that we do not believe that the council has got it wrong.
  Following the description that I gave a few moments ago of the constitution of the four national boards and eventually the central council, we have before us this evening the electoral scheme for the national boards. If the House approves the order before it tonight, that electoral scheme will be put into force.
  Mr. Mike Thomas: Will the Minister explain why he finds that there is no problem in this instance with the use of the single transferable vote?
  Mr. Clarke: I shall come to that when I deal with the three components. It is true that with the assistance and advice of the Electoral Reform Society, the single transferable vote is the method chosen by the profession. I have already said that I took the view that the role of Government Ministers and the House was, first, to put the profession in the driving seat and for it to devise its own mechanisms. We shall intervene only if we think that what they devise is drastically wrong.
  In devising the scheme, I am glad to say that the council has consulted widely within its professions. The proposals that it has put forward to Ministers, which we are endorsing in the order this evening, take account of the wide-ranging and sometimes conflicting views of the professional bodies that it consulted.
  I and my colleagues, the Ministers with responsibility for health from the other United Kingdom Departments,

  1021
  are satisfied that the scheme largely reflects the wishes of most of the profession, although we are fully aware of the concerns of certain minority groups. However, I believe that in spite of the concern of minority groups, the scheme that we are putting forward will cover their interests too.
  The council had six general principles in mind when drawing up the electoral scheme. First, it decided that the election must be fair and seen to be fair. Secondly, it must result in representative assemblies. Thirdly, the method used must be easily understood so that it elicits a response. Fourthly, the method must be practicable. Fifthly, the scheme must represent value for money. Sixthly, although of necessity based on present qualifications, the scheme must be sufficiently flexible to take account of future educational changes which may alter qualifications. The scheme had to satisfy all those criteria. Unlike the criterion of the hon. Member for Newcastle upon Tyne, East (Mr. Thomas), it did not have to accommodate the position of the Social Democratic Party in the results that it produced. The idea was to produce a broad, representative assembly to represent all interests within the nursing, midwifery and health visiting professions.
  Mr. Mike Thomas rose—
  Mr. Clarke: I shall be dealing with proportional representation in a moment and I shall give way to the hon. Gentleman when I do so. In the council's opinion, which received the Government's approval, the scheme had to meet the six general principles to which I have referred. There is a great deal of detail, but there are three main elements to which the House will wish to pay attention. They are as follows: first, the creation of an electoral roll; secondly, the securing of the candidates; and, thirdly, the voting method.
  The electoral roll has been created on the basis that nurses, midwives and health visitors will be invited to opt into the election scheme. That means that following a publicity exercise all nurses, midwives and health visitors will be invited to take part in the election, and eligibilitiy to do so will be confirmed from existing records. Once that eligibility to take part has been verified, each nurse, midwife and health visitor will be entered on to the electoral roll and subsequently will be sent the appropriate ballot form. I am sure that the decision to create a live electoral roll is the correct choice. The alternative of inviting all the nurses listed on the register or roll would in practice prove to be inordinately expensive and wasteful.
  For the securing of candidates the scheme proposes that there should be three categories of candidate. These will be as follows: first, practising nurses both registered and enrolled; secondly, practising midwives; and, thirdly, practising health visitors. The proposal is that the proportion between these three categories should be four practising nurses to one practising midwife and one practising health visitor. By "practising" the order will mean that the person must be working in some capacity by virtue of a qualification in nursing, midwifery or health visiting. In reaching that view about the securing of candidates, the central council was influenced by the general support that had been given to the idea of three categories of candidate by professional bodies and trade unions in response to the consultation paper.
  Mr. Ronald W. Brown: Do those categories include part-time agency
  1022
  nurses and agency health visitors, for example? They are practising even though they are not full-time Health Service workers.
  Mr. Clarke: Yes, the part-time will be included. As I have said, anyone working in some capacity by virtue of his or her qualification will be included. An agency nurse needs to be qualified in one of the appropriate ways if she is to be able to practise, and such a candidate will be able to opt on to the electoral roll and take part in the electoral process. It will include the whole practising profession which is covered by the proposals.
  The third aspect of the election—
  Mr. Mike Thomas: What will be the position of the nurses of the mentally ill and mentally handicapped? The hon. and learned Gentleman will know that the Royal College of Nursing has written to a number of those who considered the Mental Health (Amendment) Bill in Committee about the position of these nurses. They are not a minority group as they form a substantial group. Is he concerned that no provision has been made for their representation? They might accidentally end up unrepresented.
  Mr. Clarke: This is an issue to which we all had to address ourselves. There are minority interests—I accept that some of them are quite substantial—within the nursing profession that are not sure whether their interests will be represented by the three broad categories of nurses, midwives and health visitors. We have addressed ourselves to the problem. The difficulty is that there are so many specialist groups within the nursing profession. There are those working in mental hospitals and there are psychiatric nurses. There are also district nurses and nurses specialising in the care of sick children. Once we start considering specialist groups that might want to have reserved categories of candidates and places, there will be so many potentially that it will be difficult to secure their representation. That is one of the reasons that led the council and the Government to go for the three broad categories. One reason for choosing a ballot was that the central council believed that the specialist groups which express anxiety could, if they organise and concert their efforts and choices, secure the representation that they require.
  Mr. Thomas: I accept that and I see the difficulty, but the Royal College of Nursing made special representations on behalf of mental handicap and mental illness nurses because of the manning of the mental nurses committee. The Secretary of State said that the Government will redress any imbalance by appointment, if necessary, but, as the Royal College of Nursing said that it would prefer us to deal with the problem by election, would it not be better to do so?
  Mr. Clarke: One problem that will arise is the manning of the various committees that will be set up by the national boards to ensure that we have a pool of specialist nurses upon which we can draw The composition of the committees is still being discussed by the central council. I suspect that the elected central council will take the final decision as to whether the committees are statutory or non-statutory. I assure the hon. Gentleman that the central council fully accepts the need for a pool of specialist staff but believes that it is not necessary to reserve a category of candidates for mental

  1023
  nurses. I singled out the largest argument about putting aside a separate category of mental nurses for the purpose of securing candidates, which is that, although we are being pressed by the Royal College of Nursing, other groups with a distinct interest will feel that they are entitled to put forward an equally strong case. We may end up with a fragmented list of candidates that will be unmanageable in practice.
  The intention is that the voting method will sort out some of those problems and enable the professional groups to achieve adequate representation. The single transferable vote was chosen by the central council because it believed that it was most likely to secure a broad representation. The experience of the Electoral Reform Society, which has been advising the central council, led it to advise that considerable support for the scheme was demonstrated. The minority groups must concentrate their votes on those who represent their interests if they feel that they need specialist representation. As the hon. Member for Newcastle upon Tyne, East said, if the minority groups fail to secure adequate representation, Ministers will examine the experience of the elected members in considering the appointments that they must make. The result is that Ministers can fill any gaps in the representation of minority groups.
  The central council proposes to adopt that process for the first election only, which it expects to take place in March 1983. The election will be evaluated thoroughly by the central council, the Government and the Electoral Reform Society to assess the extent to which fully representative assemblies are achieved. The evaluation will consider, in time for future elections, whether we have adopted the most appropriate arrangements.
  The order sets out the arrangements for the first election. If it does not produce the results that we anticipate or desire, it will be reviewed in due course— [Laughter.] I assure the hon. Member for Newcastle upon Tyne, East that by "results" I do not mean the candidates who are elected but the broad representation that we can achieve. Only the SDP wish to revise electoral systems because they produce the wrong winners in the end. We are interested in ensuring that a broadly representative assembly is achieved. That is certainly the only interest of the central council and the Electoral Reform Society.
  What we have before us is the result of careful consideration by members of the professions. They have consulted widely. It would be wrong for the Government or the House to overrule them unless we were convinced that they are wrong. Therefore, I commend the order to the House.
  10.45 pm
  Mrs. Gwyneth Dunwoody: I am grateful to the Minister for his careful explanation of the order, because it is extremely important. As he says, it came about because of the Nurses, Midwives and Health Visitors Act 1979. Because of the contents of that Act, it is important that the order should be correct. It is not just a question of an electoral process being set up to represent professionals with regard to one aspect of their work; the 1979 Act gives the central council extremely wide duties. Section 2(6) of the Act states:
  "In the discharge of its functions the Council shall have proper regard for the interests of all groups within the professions, including those with minority representation."
  1024
  Section 3(3) states:
  "The Secretary of State may by order constitute other standing committees of the Council and…require the Council to consult them on, or empower them to discharge functions of the Council with respect to, other matters including in particular—

  (a) training;

  (b) clinical nursing studies;

  (c) mental nursing; and

  (d) occupational health nursing."

  The Minister said that it was wrong for the Government to seek to impose upon the professions a system of election that they might not want, so they have been guided by the wishes of the groups concerned. He also said that there had been wide consultations and that the Government had taken a broad view. He said that he had to make it clear that the Government did not believe that the council had got it wrong. In view of that and in view of the clear terms of the Nurses, Midwives and Health Visitors Act, I shall ask the Minister some questions that much concern me.
  The categories set out in the order are general. The Minister said specifically that any attempt to narrow those categories might cause fragmentation and would not do the job of representation that the council desperately needs to do. I ask the Minister whether not only the Royal College of Nursing but the Confederation of Health Service Employees has made direct representations to him on the fact that the general category for nurses may not be the best way of dealing with the problem. The specific difficulty that will arise in relation to psychiatric nurses is one reason why I have strong reservations. There might be a better way of dealing with the matter. Would it not be possible to have four smaller categories—general nursing, children's nursing, mental illness and mental handicap? I suggest that because I am concerned that the specialties should not be swamped by general nursing categories, particularly in view of the special responsibilities that the central council will have.
  The Secretary of State has said that as one-third of the members will be appointed, if there is any danger of the specialties being swamped, it will be his intention after the first election to look at the general representation and see where, if need be, other appointments should be made by direct patronage.
  In principle I do not approve of setting up an electoral procedure with which one has to tinker after the result is known. That is a dangerous precedent. It would be better, before one reaches that stage, to work out how one can get representation by giving the categories a proper number of members in the first instance. I also believe that appointed members in a system of this kind will feel at a disadvantage in relation to elected members. It is very easy to make the charge, "I put myself forward for election and was accepted by the profession as a whole while you have to rely for your appointment on the patronage of the Minister". Will the Minister therefore tell us why the advice of both the Royal College of Nursing and COHSE was so lightly ignored? It does not seem a sensible decision.
  Mr. Mike Thomas: I very much support the hon. Lady's comments about the categories and about patronage and appointments. I, too, find that unsatisfactory. Given that there are to be elections, however, will she say clearly, either now or later in her speech, whether she supports the use of the single transferable vote system for the elections?
  Mrs. Dunwoody: If the hon. Gentleman had observed the elementary courtesy of waiting instead of interrupting other people all the time, I should have come to that.
  Mr. Thomas: I apologise.
  Mrs. Dunwoody: I accept the hon. Gentleman's apology.
  Personally, I am sorry that the single transferable vote system has been chosen by the college because I believe that it will be extremely expensive. The Minister said that alternatives would be wasteful and expensive. In my experience, anything run by the Electoral Reform Society is certainly well organised and very fair, but it is also quite expensive. Has that been taken into account? I should have thought that a simpler method of election might have benefited from also being cheaper.
  The hon. Member for Newcastle upon Tyne, East (Mr. Thomas), who speaks for the Social Democratic Party, asks what I think about the single transferable vote system. I will tell him a little story. A dearly loved friend of mine who was in the Dail once explained to me how the single transferable vote system worked. He said that in Ireland it was very simple—there was one candidate whom one loved, one whom one hated, and one in the middle whom no one had heard of and who was no bloody good but who was elected. My view of the single transferable vote system is, therefore, that almost anything else would be preferable. I hope that I make myself clear.
  How does the Secretary of State envisage the second election being carried out? Is he assuming that his tinkering after the election will produce another order to be brought before the House, or that it is only in the first instance that he may have to appoint specific representatives from the categories not offering themselves for election and that this will be sufficient to deal with all the problems that are likely to arise?
  I found certain aspects of the system a little difficult to follow. As it is so important that we get the system right, I hope that the Minister will give a little time before putting it into operation. I appreciate that as it has been on the statute book for a number of years he feels that we should reach some conclusion. Nevertheless, as there are such strong reservations in the professions, should he not take account of the views, for instance, of the psychiatric nurses, the occupational health nurses and certainly the district nurses? It would be most unhelpful for relationships within the profession if the idea grew up that only the category of general nursing would have a strong say in the working of the statutory instrument. I know that that is not, intended, that the consultation was deliberately meant to reach a consensus and that the Royal College of Midwives is happy to accept the existing machinery. Some real difficulties still exist, and I hope that the Minister will confirm that he is prepared to take account of them before he puts the machinery into operation.
  I was tickled by the contents of the nomination form. It firmly states:
  "Election of National Board Members",
  and adds:
  "Date of Birth (optional)".
  I take it that that is not a sexist assessment of the expected response from members offering themselves for election, but in an attempt not to upset anyone, I hope that the Minister will give an undertaking tonight that he will look again at the contents of the statutory instrument.
  10.56 pm
  Mr. Ronald W. Brown: There are several points on which I hope the Minister will comment.
  When I intervened in his speech, I talked about practices. Paragraph 5 purports to outline the grounds for being added to the electoral roll. Sub-paragraph (d) states:
  "Any person who can establish an eligibility to be on the Electoral Roll may be on the Roll whether that person is or is not living in the United Kingdom, whether that person is or is, not retired, and whether or not that person is unemployed or no longer practising as a nurse, midwife or health visitor."
  The Minister says that such people must be practising. In that case, why does sub-paragraph (d) say that that is not necessarily so? Perhaps he will explain what on the face of it appears to be a paradox.
  Sub-paragraph (e) states:
  "Each person who requests his name to be included in the Electoral Roll and has established an eligibility to be on the Electoral Roll will be allocated to that part of the Electoral Roll which relates to the National Board for which he is qualified".
  The Minister said that if there were vacancies there could be some topping up. Is that because there may well be insufficient voters? I may not have understood this correctly, but sub-paragraphs (d) and (e) seem to run counter to what the hon. and learned Gentleman said.
  Sub-paragraphs (f) and (g) also cause me some difficulty. Sub-paragraph (f) states:
  "Subject to the provisions relating to persons not living in the United Kingdom, each nurse, midwife and health visitor will be able to take part only in the National Board election in the country in which they live or work."
  Are we talking about the four countries of the United Kingdom? The instrument does not say that. It merely refers to
  "the country in which they live or work".
  That could imply any EEC country. Perhaps the Minister will look at this provision and make sure that people practising in other parts of the EEC will be eligible to lake part in the voting.
  I also referred in my intervention to agency nursing, which has been a bone of contention for a long time. Some of us who have worked in the Health Service do not accept the argument for agency nursing, not least because of the doubt that is often entertained about qualifications. It is difficult to be satisfied that agency nurses have adequate qualifications.
  I have always opposed the use of agency nurses because I do not think it right for a variety of reasons, principally because one could never be satisfied that they were adequately qualified. What criteria will be used to determine standards of qualification for agency nurses, midwives or health visitors?
  In Hackney, which the Minister knows well, we have insufficient health visitors. While we have vacancies and know that there are health visitors looking for jobs, they cannot be employed because the health authority cannot afford to pay them. There have been five or six vacancies in my area for some years.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I think that the hon. Gentleman is going a little wide of the order. I do not think that it covers that particular subject.
  Mr. Brown: I was referring to the fact, Mr. Deputy Speaker, that the voting procedure allows for four nurses to one midwife and one health visitor. The Minister said that if there were insufficient numbers in any of those

  1027
  categories he would have to top them up at the end. I believe that one of the categories that he will have to top up will be that of the health visitors. If there are insufficient health visitors practising, they are prejudiced in the final vote.
  I am worried that if the Minister for Health's Department and the Department of the Environment, through lack of funds, cannot employ health visitors there will be insufficient to go on the board. The Minister talked about topping up, from which I do not dissent—it is an experiment that we have to make, and we have to be able to put it right if it does not work the first time—but he has already prejudiced the topping up. We have had the example recently of the chairmen of the DHAs, and I do not want to enter into an argument about that. The selection of the chairmen was based on whether they agreed with the Government. Those that did not were sacked. The principle that has been maintained by all parties over the years has been that appointments should not be made on a political basis. The person was appointed who was thought best fitted to carry out the task. I support the proposal, but appointments will have to be made on a non-political basis. It will not be fair if the Minister judges a person's suitability on whether he supports Government policy. If there has to be topping up, and there are people available, everyone's name must go in the hat and not just blue-eyed girls or boys who can persuade the Minister that they support him.
  There is a great deal in the order about which I am not happy. Of the three categories of specialty we are talking about, the nursing council is more organised and likely to be more overbearing. The danger is that the other two categories will not have the same opportunities as the nurses. I shall watch the outcome with interest. I hope that the measure will work, because it is a major step forward towards organising these professions. I believe that there are some dangers, and I hope that the Minister can answer the points I raised about sub-paras (d), (c), (f) and (g) para 5.
  11.3 pm
  Mr. Mike Thomas: I raise two issues briefly. In view of events earlier I should point out that, apart from the hon. Member for Crewe (Mrs. Dunwoody), the Front Bench spokesman for the Labour Party, there is no other Labour interest and no doubt the nursing profession will draw its own conclusions.
  Mr. Dennis Skinner: What does the hon. Gentleman think we are doing here?
  Mr. Thomas: The hon. Gentleman is going to make a speech, is he?
  I support the points made by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown), and I hope that the Minister can answer them satisfactorily. I want to amplify the point that I made earlier about the representations by the Royal College of Nursing regarding psychiatric nurses and nurses of the mentally handicapped and mentally ill. I support the remarks made by the hon. Member for Crewe.
  In its letter to me, the Royal College of Nursing made specific proposals for dealing with the difficulty. It suggests:
  1028
  "consideration might be given to a reduction to 10 of the ministerial appointments, with the 5 places which would be removed from patronage being offered for election—3 for mental illness nursing and 2 for mental handicap nursing."
  I am not sure—like the hon. Member for Crewe—that that is necessarily the perfect solution, but I hope that the Minister will agree to look at the matter again. After all, that is the profession's view.
  It was heartwarming to hear the Minister advocating the single transferable vote as a method, as he said, of producing a representative assembly. That is a good description of the virtues of the system. However, the Under-Secretary of State for Scotland with responsibility for health is in the Chamber tonight. I understand that he once adhered to the Liberal Party. I believe that he was a Liberal candidate and presumably he then advocated the single transferable vote. After all, that is Liberal Party policy. I was interested to hear the hon. Gentleman agree, from a sedentary position, with the hon. Member for Crewe. He implied that he had no time now for the single transferable vote.
  Under the Order, Scottish nurses are to participate in elections on the basis of a single transferable vote. Therefore, we are entitled to know the view of the Under-Secretary of State for Scotland. He should tell us what it is. Is there a division of view between him and the Minister? That would be a serious matter. As the Minister pointed out, the responsible professional body has made a recommendation and he has—as we would expect from one who is an electoral reformer at heart—wisely and sagely accepted its recommendation. However, it is clearly and openly disputed by the Under-Secretary of State for Scotland. We should know the position. [Interruption.] I always thought that the hon. Member for Crewe considered it important for people to agree with her, because it happens so rarely. Therefore, if the Under-Secretary agrees with the hon. Lady, we should know.
  On behalf of my party I welcome the order in principle. It is good that we should move towards that electoral arrangement and that we should use the single transferable vote. I look forward to hearing the Minister advocate the advantages of the single transferable vote in the eloquent language that he used earlier.
  11.7 pm
  Mr. Kenneth Clarke: The hon. Member for Crewe (Mrs. Dunwoody) pointed out that the RCN and COHSE have both made representations about the categories of candidate that have been chosen and have expressed doubts about whether the psychiatric nursing profession, in particular, should not be more distinctly represented. The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) also touched on that point.
  The United Kingdom central council consulted widely and I accept that it found dissenting views from the RCN and COHSE. All hon. Members are aware of that. However, they were not the only bodies consulted. A broad body of professional opinion takes the opposite view and thinks that the broad division of candidates into the three categories proposed—nurses, midwives and health visitors—is right. I am sorry to return to my argument, but it is difficult to decide where to draw the line between the various specialist groups that might claim that they had a case to have a distinct list of candidates, as the psychiatric nurses would wish.
  However, I concede that psychiatric nurses probably have the strongest case because there are so many of them,

  1029
  specialising in mental illness or handicap of one type or another. However, specialist groups include occupational health nurses, sick children nurses, district nurses and so on. They could all make similar claims, albeit backed by slightly smaller numbers. There are so many distinct interests and specialties to be covered—between, for example, hospital and community nursing, teaching nurses and service nurses, clinical nurses and those involved in management—that to try to guarantee places for one specialist group, although a large and important group such as psychiatric nurses, could be seen as unfair to the others or, conversely, could give rise to claims from the others.
  I hope that I have said enough to show that these representations were not brushed aside. The United Kingdom central council, like the Government, has examined carefully the case of the psychiatric nurses. After considering a whole range of opinions it was decided that it would be impossible to reserve a category of candidates for them without creating other anomalies.
  Mrs. Dunwoody: I did not make the case simply for psychiatric nurses, an important group who must be given proper consideration. I agreed that other groups had to be included in order to achieve fair representation. There is little to be said for the single transferable vote except that it gives wide representation. To narrow the categories does not make sense.
  Mr. Clarke: I am not sure about that. This is for the first election only. We should see what happens. The United Kingdom central council and the Government have decided that to reserve particular lists of candidates is not a suitable means of achieving broad representation. It is believed that the electoral system will achieve that aim. If it does not, it will be reveiwed.
  It is inconsistent, I believe, to argue that one should take the opposite course and narrow the bands of candidates while retaining the single transferable vote. Narrow bands of candidates would make the single transferable vote system difficult to operate.
  I do not mind political leg pulling in the Chamber, but the broader points that the hon. Member for Newcastle upon Tyne, East tried to draw about electoral systems as applied to Parliament are slightly irrelevant when the House is debating a serious order that relates to the nursing profession. I believe personally that the single transferable vote, or anything like it, is a totally irrelevant method of electing the Parliament of this country.
  I also listened to the arguments of the hon. Member for Crewe about the effects of STV on elections to the United Kingdom central council. I hope I have made it clear that it is the belief of the central council that STV will produce this broad representation. Whether it does depends on how the individual voting members choose to transfer their votes and elect their preferences. The choice made by the central council was not one that Ministers, on behalf of the Government, felt inclined to ask the House to overrule. We shall watch to see what happens. It may prove expensive. I am not party to the direct arrangements between the council and the Electoral Reform Society.
  The system is however, operable. No one claims that it is not a feasible system in practice. The whole purpose, according to the UKCC, is to try to make sure that the specialist interests have the opportunity so to transfer their votes as to carry through a sufficient block vote to ensure
  1030
  adequate representation on the resulting council. If that fails, we propose to nominate members to top up any specialty that proves to be under-represented.
  Mrs. Dunwoody: It is clear from the original Act that any change in the electoral system must come back to the House in the form of a statutory instrument. If the first election is unsatisfactory and if dissatisfaction among the nurses in general becomes much more manifest, the Minister has not given an undertaking that he will come back to the House. Will he now say that?
  Mr. Clarke: I have already mentioned the Secretary of State nominating members to top up the numbers of any specialist group that turned out to be under—represented following the election. That is only a fall-back position. We hope and anticipate, like the central council, that there will be a broadly representative range of elected members. It is only if we are wrong and that fails to be produced that we shall nominate members to top up specialities.
  I assure the hon. Member for Hackney, South and Shoreditch (Mr. Brown) that, even if we have to do so, we shall try to ensure that we get the right candidates and I do not exercise political judgments in nominating members to a body such as the United Kingdom central council. If things go wrong and we have to use the Secretary of State's powers to give adequate representation to a specialist group, the electoral system will he called into question.
  The central council will review this matter, and will have the assistance of the Electoral Reform Society in reviewing it. The Government will review it and if it turns out to be unsatisfactory, we shall return to the House with a fresh order for a fresh electoral system to get it right next time.
  We shall be guided in that, as we have on this occasion, largely by the views of the professions. The whole point of the Briggs structure is that the professions are to be self-regulating and to have control over their training, discipline and development. If the professions, particularly the council, say that they are dissatisfied with the order, the Government will review the matter and decide whether to come to the House with a fresh order, as we should if there was widespread dissatisfaction.
  The hon. Member for Hackney, South and Shoreditch raised some other specific points and asked about the qualification that candidates should be practising members of the various professions. That is the case. To be a candidate, one has to be a practising nurse, midwife or health visitor. That does not apply to the electorate. As the hon. Member has discovered on reading through the order, in paragraph 5 the electoral roll—those who cast the votes— may include people who have retired, as long as they fulfil the qualifications set out in the paragraph about the electoral roll. There may have been a slight confusion about what I said on the matter.
  The hon, Member for Hackney, South and Shoreditch also raised an astute question about what happened in the case of electors who do not live in the United Kingdom when it came to voting for a national board. That is specifically covered in the small print of paragraph 5(g) which provides:
  "Individuals who are placed on the Electorall Roll, and who do not live in the United Kingdom, will be allocated to an appropriate National Board according to the home/work address in the United Kingdom from which they departed or to which they intend to return."

  1031
  The hon. Member then tried to go on to a broader issue about the insufficient number of health visitors in places in his constituency, which is a matter that I should be delighted to debate with him on a more appropriate occasion, or to correspond with him about. In case he was concerned about the adequate representation of health visitors, which is what the debate is about, the ratio that we have chosen between nurses, midwives and health visitors—the four, one, one ratio—slightly over-represents the smaller professions of the midwives and the health visitors vis-a-vis the nursing profession. That is essential to make sure that their voice is heard and they have their specialist committees adequately staffed. The hon. Gentleman need have no fear that the role of health visitors was understated or overlooked in drawing up the order.
  Those are the detailed questions that have been raised. This has not been a long or detailed debate. That reflects the broad view of all three parties represented in the House that this should be a successful scheme. There has been considerable continuity of policy since the Briggs proposals came out, leading up to this setting up of the new arrangements for the new United Kingdom central council and the four national boards.
  We appreciate the importance of this to the nursing profession and we hope that the elected national boards and the United Kingdom central council results will be effective in instituting the new arrangements for the development of training and education in the professions that Briggs was meant to prepare for. This is an important order and I hope that, on the basis on which I have described it, these arrangements for the first elections, subject to review, will have the unanimous approval of the House.
  Question put and agreed to.
  Resolved,
  That the draft United Kingdom Central Council for Nursing, Midwifery and Health Visiting (Electoral Scheme) Order 1982, which was laid before this House on 8th July, be approved.

PETITION

  Mr. Alan Grimshaw
  11.19 pm
  Mr. Dennis Skinner: With your permission, Mr. Deputy Speaker, and that of the House, I beg leave to present a petition on behalf of Mr. Alan Grimshaw. I present the petition because my hon. Friend the Member for Morpeth (Mr. Grant) has been seriously ill for a considerable time and he has been anxious to present it to the House on behalf of Alan Grimshaw. As a result of communications through the party, I agreed to present it tonight. I shall be brief, as is customary in these matters.
  Some hon. Members will recall that Alan Grimshaw worked for the National Coal Board and gave evidence to a Select Committee of this House in 1973–74, the report being issued in June 1974. He gave evidence to the Select Committee on Nationalised Industries, which was investigating the purchase by the National Coal Board of powered roof supports, which had been the subject of great concern in the media generally, and had been mentioned by many hon. Members at the time. When the Select Committee reported, it was critical—not as critical as I should have liked—of the board's purchasing policies. Only 16 working days later, Mr. Alan Grimshaw was dismissed by the National Coal Board. It has been a matter of concern on many occasions in this House. One of the Leaders of the House, Ted Short, who is now in the House of Lords, dealt with the matter when it was raised by several hon. Members, including myself, during that period.
  We believe, Alan Grimshaw believes, and his constituency Member of Parliament believes that he has suffered a severe injustice as a result of giving evidence to this House. He and many people outside this place think that when people act as witnesses before a Select Committee here they should have protection. That he certainly has not had.
  The petition is six or seven pages long. I do not propose to go into all its details. I shall save the time of the House by not instructing the Clerk of the House to read it out. I want to deal with the matter in a few more sentences. It is a matter of great concern, not just to Mr. Grimshaw, but to all people who are asked to act as witnesses before a Select Committee and then have no protection.
  Sixteen working days after the report was issued, Mr. Grimshaw was sacked by the NCB. His testimony to the Select Committee had been without doubt critical of the board. He knew a lot about it, because he worked in the accounts departments of one of the areas. He has now been out of work for 11 years, and he has still not received justice—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I am sorry to interrupt the hon. Gentleman, but he must not go into the detail. He is presenting a petition on behalf of Mr. Grimshaw.
  Mr. Skinner: I am quite aware of that, and, as I said earlier, it is possible for me to ask the Clerk of the House to read out all these pages. However, I do not propose to do that. That will be dealt with in the normal way when I present the petition. We do not get petitions of this nature

  1033
  every day. We get petitions about injustice involving wages and conditions that are settled by people outside the House, and various other issues.
  In 1892, a similar case was brought to the House of Commons, and as a result an Act was passed which enabled compensation to be paid to people acting in circumstances similar to those relating to Mr. Grimshaw. He is calling upon the House to adjudicate. He has not received satisfaction up to now. He has been out of work for 11 years, and he has not managed to find a job. He has had a slur on his character, and he has not been defended by the House of Commons. He has a case and that is why I speak on his behalf before I put the petition in the bag.
  I want the House of Commons to remedy the injustice inflicted upon Mr. Grimshaw. He offered evidence in 1973–74 and as a result in June 1974 he was sacked from the NCB. Many people in the NUM—and he was a member not of the NUM but of another trade union—believe that he has suffered an injustice. His petition is an attempt to persuade the House to adjudicate.
  I beg leave to present the petition.
  To lie upon the Table.

  Mr. Mohammed Khan
  Motion made, and Question proposed, That this House do now adjourn.—/Mr. Boscawen.]
  11.25 pm
  Mr. Vivian Bendall: The debate is about a constituent, Mr. Khan who is the subject of a deportation order. I shall explain the background to the case. Mrs. Khan is not the subject of the deportation order, but she will be seriously affected by it. Mrs. Khan's family was associated with the Royal Indian Army when it was under British rule. Many of her relations served in that army. Her great uncle came here for King George VI's coronation. Over a number of generations there has been a closeness between Mrs. Khan's family and imperial service in India.
  In September 1963 Mrs. Khan's father was issued with a Crown service voucher which entitled him to come to the United Kingdom. He arrived in the United Kingdom in January 1964. In December 1972 her father was registered as a citizen of the United Kingdom and colonies. Mrs. Khan, formally Miss Kalsoom Bibi, came to the United Kingdom with her mother in May 1973. She was admitted for settlement on the basis that she was joining her father. She has remained in the country ever since.
  In 1978 Mrs. Khan applied to be naturalised as a citizen of the United Kingdom and was interviewed in July 1979. Since then she has heard nothing of her application. All her relatives are settled here. Her mother, father and two brothers are British citizens. Her sister came here in 1973.
  Clearly, Mrs. Khan is entitled to be in this country through her associations with her father in the past and what has occurred since. The real problem is that Mr. Khan will not be allowed to stay in the United Kingdom. There is an immense amount of evidence in the case. It needs compassionate and careful consideration. Mr. Khan came to the United Kingdom in June 1979, having been given permission to stay as a visitor for one month. He embarked and returned in August 1979 and was given leave to remain in Britain for six months.
  In February 1980, Mr. Khan asked the Home Office for further leave to remain and in March he informed the Home Office that allegations were being made that he was the father of a child. The young lady expecting the baby was a girl named Kalsoom Bibi, who had met him at his uncle's office during his first stay in this country when she was visiting the office on business.
  As the relationship progressed, Mr. Khan accepted that the expected child was his, and the couple married in March 1980. Later that month, a firm of solicitors was instructed to write to the Home Office requesting that Mr. Khan be granted leave to remain here, on the basis of his marriage.
  Mr. and Mrs. Khan were interviewed by the Home Office in June 1980. The application was refused in August that year, on the ground that Kalsoom Bibi was not born in the United Kingdom and nor were either of her parents. An appeal was lodged in August and another son was born to Mrs. Khan in the following month. There were then a husband and wife and two children.
  In December 1980 the Tower Hamlets law centre wrote to the Home Office asking whether Mr. Khan could be allowed to set up business in Britain. In April 1981 the Home Office replied to the effect that Mr. Khan would not be granted permission to remain in Britain to start a

  1035
  business, but it added that specific permission was not required after the date of the expiry of Mr. Khan's leave, which was 1 September 1980. He was advised by the law centre that he was entitled to operate a business. The centre may have given him the wrong advice, but it is clear that a sad and tragic case was developing.
  The law centre did not fully explain to Mr. Khan all his entitlements and all the problems. As a result of that advice, Mr. Khan purchased a business, which is a grocery store with a private residence above. He borrowed about £15,000 from a bank to buy the business, and mortgage and other payments have to be met. In his present position, that all adds to his problems.
  Mr. Khan submitted an appeal, but it was dismissed in September 1981, on the ground that the decision was in accordance with the law and immigration rules applicable to the case. I understand that there was some confusion over the appeal. The adjudicator was informed that efforts had been made to inform Mr. Khan of the date of the hearing, but without success. He tells me that he informed all the necessary agencies of his change of address. He could not present his case personally, and I always think that it is important that a person presents his own case when an adjudicator is involved.
  An appeal was lodged against the adjudicator's decision, but it was refused in November 1981. The couple then approached me as their MP and I started correspondence with the Minister of State, Home Office, to try to change his mind.
  The Minister stated in one letter that he was not persuaded that Mrs. Khan's ties with the United Kingdom were strong enough, but I think that I have shown that the ties of Mrs. Khan and her family with the United Kingdom are very strong. If she were forced to return to Pakistan with her husband, there would be immense problems for the whole family. Mrs. Khan's family have settled here, her relatives are here and her father has been in Crown service. Mrs. Khan's family have a long history in Britain, dating from her grandfather.
  There is also the question of the Khans' business. Mr. Khan has built up a successful business. He is a popular member of the community as a result of his business activities—a local shop which gives a service to the community and which might be sadly missed if Mr. Khan were to go. That has been proved by the number of signatures that have been attached to a petition. Those are over 2,000 and are still coming in. That petition was organised by the Redbridge campaign against racism and fascism and has played an important part in alerting the local community to Mr. Khan's plight.
  There is no doubt that it would be a major upheaval for Mr. and Mrs. Khan to return whence they came with their two children. There is the great possibility that Mrs. Khan, as she is entitled to do, will wish to stay in Britain with her two children. The family would then be deprived of a father, a bread winner and an earner and the country could well become financially responsible for the care of Mrs. Khan and the two remaining children. By running his own business, Mr. Khan is not taking employment from anyone else in Britain, and it is a business that has proved successful.
  Therefore, I firmly believe that the Minister has the opportunity here, by means of the power in the new
  1036
  immigration legislation, to show some compassion towards the family by allowing Mr. Khan to remain here without setting a precedent in any way, shape or form.
  Miss Jo Richardson: The hon. Gentleman has done a great service to the House, his constituency and his constituents in having this Adjournment debate. Will he forgive me for intervening for one minute? Will he comment on the fact that it is the immigration rules that are wrong?
  The hon. Gentleman has just said that he hopes that the Minister will exercise his discretion and his compassion. We hope that he will do so. However, if we did not have the rules which discriminate in a racist way against black and Asian people because on the whole white women are born here and are able to bring in their fiancés and husbands, and in a sexist way because men are able to bring in their fiancées, we would not be hearing this case at all because there would be no real problem. I hope that the hon. Gentleman will spare a word or two to comment on the operation of those rules.
  Mr. Bendall: Time is short and there are several things that I want to say. I support the Government's general immigration policy, but I feel that this case has special and extenuating circumstances.
  If Mr. Khan had married about two or three weeks earlier, he might well have been entitled to stay in Britain. This is a borderline case with special extenuating circumstances. I should like sincerely to ask the Minister to exercise his powers with compassion in this case because otherwise the family will break up and the Khans will have inherent problems. From what Mrs. Khan has said to me, I firmly believe that it is her desire to stay in Britain with her two children, and she may well do that.
  The special extenuating circumstances make this a borderline case. It was perhaps just two or three weeks the wrong side of the legislation. Therefore, I ask the Minister to show compassion and grant Mr. Khan leave to stay in Britain.
  11.40 pm
  The Minister of State, Home Office (Mr. Timothy Raison): I have listened with great care to the case presented by my hon. Friend the Member for Ilford, North (Mr. Bendall) as to why Mr. Mohammed Khan should be allowed to stay in this country. I acknowledge that it is a difficult case. My hon. Friend set out his arguments clearly, and among other things he has talked of the links which Mrs. Khan's family has had with the United Kingdom.
  I shall deal again with the factual background because it is important. I accept that my hon. Friend set out most of it. Mr. Khan came to the United Kingdom as a visitor first in June and then in August 1979. He was given leave to enter on the second occasion for six months. In March 1980 he married Kalsoom Bibi, who was settled here, and applied to remain here with her. We refused that application in August 1980. He appealed unsuccessfully to an independent adjudicator, who upheld the decision to refuse him further stay. His application for leave to appeal against the adjudicator's decision to the immigration appeal tribunal was refused. That was last November. We then told him that he must leave the United Kingdom. He has been here since while many representations have been made on his behalf, which we have considered very carefully, but have been unable to accept.

  1037
  The immigration rules provide that a man admitted in a temporary capacity, as Mr. Khan was, may be allowed to remain as a husband if, first, certain tests are satisfied which establish that the marriage is a genuine one not entered into for immigration purposes. We do not dispute that Mr. Khan satisfies these tests.
  The second requirement is that the wife, as well as being settled here, should be a citizen of the United Kingdom and Colonies who was born here or one of whose parents was born here. It is this requirement which disqualifies Mr. Khan, because Kalsoom Bibi is not a citizen of the United Kingdom and Colonies and was not born here; neither were her parents. Right hon. and hon. Members will recall that this was the effect of the changes we made in the immigration rules in 1980. Before the changes, any woman settled here could have her husband or fiance come here and stay here. We confined this right, as I have described, to women who had the particularly substantial connection with this country of being citizens of the United Kingdom and Colonies born here or with a parent who was born here. We did so because marriage had become a major source of primary male immigration—that is, of men coming here to take work and establish households. We did not think that this continued and substantial flow could be accepted. At the same time, we recognised that women who had a suitably substantial connection with this country should not be obliged to go overseas to live with their husbands.
  Mr. Bendall rose—
  Mr. Raison: No. Time is limited. We debated these rules twice in the House, and they were twice debated in the other place. I do not propose to say much about them tonight. These are the rules which Parliament endorsed.
  There is one technical point that I should mention because it was raised by my hon. Friend. The new rules came into force for all decisions taken on or after 1 March 1980, unless the application had been made on or before 14 November 1979, when we published our proposals in the White Paper, or the person was already being treated in certain capacities under the old rules. The purpose of these transitional provisions was to ensure that people who were already embarked on a particular course with an expectation of staying in the United kingdom for a long time or permanently did not suffer from changes in the rules which applied to them. But which they could not have foreseen.
  The Khans married on 14 March 1980. This was a fortnight after the new rules took effect, and four months after the publication of our proposals in the White Paper. Mr. Khan did not, therefore, suffer from an unforeseen change in the rules. He could not benefit from the transiotional provisins. Even if he had married two and half weeks earlier he would not have been able to benefit from the transitional provisions.
  Mr. Khan's application was therefore properly refused in accordance with the rules. However, both my right hon. Friend the Home Secretary and I have said many times that, in these marriage cases which do present special features, the position under the rules is not the end of the matter. We have a discretion to depart from the rules in appropriate cases, in marriage cases as in others. We therefore consider all cases carefully to see whether they have special features which warrant the exercise of discretion.
  1038
  I am sure that the House will agree that our exercise of discretion must be responsible. It would be an abuse to use it so freely that the clear provisions of the rules were undermined. The proper use of discretion in my view is in support of the rules, tempering them to meet hard cases, not to defeat the rules altogether. The appeal made to me on Mr. Khan's behalf is that I should exercise discretion in his favour. That means that I must examine the strength of Kalsoom Bibi's connection with the United Kingdom and whether she would suffer undue hardship in returning to Pakistan with her husband.
  I have already mentioned the Kalsoom Bibi is not a citizen of the United Kingdom and Colonies. She applied in August 1974 to be registered as one, but she did not meet the statutory requirements for the registration procedure. Instead she applied for naturalisation in July 1978, shortly after completing five years residence. That application was determined in January 1981 and the result was communicated to her. By that time she had been married for nearly 10 months to Mr. Khan who, of course, had no permission to remain permanently.
  It is a statutory requirement that an applicant for naturalisation should intend to reside in the United Kingdom or a Colony. In view of her husband's purely temporary stay in the United Kingdom, we could not be satisfied that Mrs. Khan met that requirement, since it was clear that under the immigration rules as they stand Mr. Khan had no entitlement to remain here. Mrs. Khan's application was, therefore, refused. Mrs. Khan would not, of course, have qualified under the rules to have her husband join her, even if she were a citizen of the United Kingdom and Colonies, because she was not born here and neither were her parents. Nor, I emphasise, is citizenship a decisive factor when we are considering the exercise of discretion. We try to examine all aspects of a woman's connection with the United Kingdom. The connection was dealt with by my hon. Friend.
  Mrs. Khan came here with her parents from Pakistan in May 1973, when she was 19. She has been here now for nine years. She had been here for less than seven years when she married. Although her parents and siblings are here, she came here as an adult and spent all her formative years in Pakistan. There are two children of the marriage, one born in 1980 and the other earlier this year. I have been told, and my hon. Friend mentioned it, that if Mr. Khan is obliged to return to Pakistan, his wife and children will remain here and may become a charge on public funds. At present Mr. and Mrs. Khan run a grocery shop.
  I recognise that Mr. Khan's return to Pakistan would present Kalsoom Bibi with a difficult choice whether to accompany him or to remain here. The fact remains, however, that Mr. Khan has never had any right or legitimate expectation to remain permanently. He has established himself while disputing the Home Office's decision that he should go. The application of an effective immigration control will inevitably mean frustrating the ambitions and hopes of people from overseas. We cannot accept them all. I do not feel that Mrs. Khan's position is such that it would be unreasonable to expect her to return to Pakistan to be with her husband. She was brought up in that country, and will be familiar with it. The children are not old enough to have any independent roots here.
  I fear that I must tell my hon. Friend that, cogently as he has put the case to me, I am not persuaded that there would be undue hardship to Mrs. Khan in accompanying her husband to Pakistan. I do not feel that her position

  1039
  warrants letting him stay. Mr. Khan is therefore required to leave the United Kingdom. If he does not do so, steps will be taken to deport him. In that event, he would of course have the right to put his case to an adjudicator on
  1040
  appeal against the decision to deport him. Although my hon. Friend argued his case cogently, I cannot accept what he said.
  Question put and agreed to.
  House adjourned accordingly at twelve minutes to Twelve o'clock.

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

Wounded Servicemen: Continued Service
The Earl of Onslow: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is their policy to retain as many ex-wounded servicemen with the colours as wish to continue to serve.
The Earl of Avon: My Lords, it is indeed our policy to retain as many servicemen who have been injured as remain fit to serve.
The Earl of Onslow: My Lords, from the bottom of my heart may I thank my noble friend for that Answer. Is he aware that a certain amount of worry had been expressed to me that the Army would have to make a great deal of extra effort to keep some of these wounded soldiers from the Falkland Islands with the colours, that they were worried about their future and that his Answer has given us a very large amount of hope and satisfaction?
The Earl of Avon: My Lords, the services take pains to consider cases of this sort and, of course, will continue to do so in the present light.
Lord Shinwell: My Lords, surely some tasks could be allotted to these men who have fought on behalf of the country and been wounded, rather than to throw them onto the unemployed heap. Do we not have enough unemployed? Surely there are semi-military tasks—partly of a civil character and partly of a military character—on which these wounded men could be employed?
The Earl of Avon: My Lords, indeed that is so, and I hope that my original reply will have laid low any doubts whatever. There are many examples that I could give of such circumstances.
Lord Paget of Northampton: My Lords, surely this is not confined to semi-military tasks. Should we not remember Nelson and Paget?
The Earl of Avon: My Lords, I note the noble Lord's remark and, of course, I only wish that the late Lord Bourne was with us as well.
Lord Crawshaw: My Lords, is my noble friend aware that his encouraging and enlightened response will be of enormous help to thousands of people outside military circles who so often look to the armed forces
122
for a lead in matters of this sort, and who will be greatly encouraged by this?
The Earl of Avon: My Lords, I am indeed grateful to the noble Lord for stressing this particular attitude outside military circles.

British Steel Corporation: Finanaces
2.39 p.m.
Baroness Elliot of Harwood: 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 there has been any recent improvement in the financial position of the British Steel Corporation.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, the corporation's annual report and accounts for 1981–82, which were published on 13th July, show that the corporation incurred a loss of £358 million for the year compared with £668 million in the previous financial year. This represents considerable progress towards the corporation's target of achieving break-even before interest in 1982–83 and of returning to enduring profitability thereafter.
Baroness Elliot of Harwood: My Lords, I thank my noble friend for that reply. I apologise for the fact that this Question was put down before the crisis broke on Saturday. Is my noble friend aware that I very much hope that the events of Saturday will not hinder or impede the recovery of the steel industry which we are all so anxious should happen?
Lord Trefgarne: My Lords, as my noble friend Lord Cockfield said when he made the Statement yesterday, we very much hope that a solution to this problem concerning the United States can be found. We believe that it can be found and in that case there will be no effect upon British Steel.
Lord Davies of Leek: My Lords, is the noble Lord aware that we welcome the British Steel Corporation's view that by 1983 it can make a £79 million profit for the first time for a number of years? But is the noble Lord also aware that there has been a drop of 37 per cent. in demand for steel in Britain? Finally, can we not carry out a steel blitz by repairing the railway tracks of Britain and giving a boost to the British steel industry by making the railway tracks worth driving on?
Lord Trefgarne: My Lords, it is certainly the case that British Rail is an important customer of the British Steel Corporation, but of course—as in so many nationalised industries—British Rail's own capital plan needs to be carefully monitored.
Lord Cledwyn of Penrhos: My Lords, does the noble Lord agree that this most satisfactory progress which has been made by the British Steel Corporation is due in

123
very large measure to the remarkable efforts of the steel workers in steel works such as those at Llanwern and Port Talbot and other steel works in England and Scotland? Will the noble Lord give an assurance to the House that there is no possibility of further redundancies, with all the accompanying unemployment problems, in the next few months?
Lord Trefgarne: My Lords, it is certainly the case that since 1979—for which I have the figures in front of me—there has been a substantial reduction in the workforce of British Steel. As regards future job losses in British Steel, Mr. MacGregor has made clear to the workforce that the new plan envisages further general de-manning throughout the corporation's plants to cut costs and to improve productivity. The corporation is not yet in a profitable condition and for that reason I cannot rule out the possibility of further reductions in the labour force.
The Earl of Lauderdale: My Lords, would my noble friend not agree that while saluting the co-operation of the British Steel Corporation's workers we ought also to salute the work of the chairman?
Lord Trefgarne: My Lords, my noble friend is quite right to make that point. Mr. MacGregor's tenure of office has so far been remarkable and successful.
Viscount Rochdale: My Lords, can the noble Lord say to what extent the improvement in the finances of the corporation are due to improved technology?
Lord Trefgarne: My Lords, I could not put a precise figure on that aspect without further reflection, but certainly improved technology is one of the features of the corporation's new posture.
Lord Cledwyn of Penrhos: My Lords, perhaps the House will allow me to intervene once more, to ask the noble Lord whether he is aware that the reply he gave on de-manning is extremely depressing in view of the extensive de-manning that has taken place in the steelmaking areas of Wales, England and Scotland, with all the consequences to the communities living there? Can the noble Lord indicate what will be the extent of this de-manning? What kind of percentages are we talking about? When is an announcement likely to be made?
Lord Trefgarne: My Lords, the extent of future de-manning depends, among other things, upon the continued level of demand for the products of the British Steel Corporation, and it is not possible for me to put a figure on it at the present time. But if demand holds up, or even increases somewhat, then I hope that the figures will be kept as low as possible.
Lord Beswick: My Lords, may I ask the noble Lord two questions? How many more people will be declared redundant from the British Steel Corporation if the order for the Cunard ship goes to the Far East? Secondly, can he say why his noble friend who sits behind him does not include the chairman of BSC among the term "workers"?
Lord Trefgarne: My Lords, that last point would, I think, be a question for the noble Lord to address to my noble friend, perhaps in the bar, on some later occasion. As for the first part of the noble Lord's supplementary about the quantity of steel that might or might not be required for a replacement for the "Atlantic Conveyor", I cannot without notice answer that question in terms of tonnes or in terms of workers to be retained but I presume the numbers would be significant.
Lord Mackie of Benshie: My Lords, can the Minister say how much hours per tonne of steel produced have improved under the present régime, and how they compare with Germany and Japan, for example?
Lord Trefgarne: My Lords, I am afraid that I have not got figures for that in front of me; perhaps I should have and I will therefore happily write to the noble Lord with the figures if I can find them. It is certainly the case that the number of persons employed by the British Steel Corporation has sharply declined in recent years, but so too has the total level of production. The numbers of workers have declined rather more fast than the level of production, and thus the productivity has improved.
Lord Glenamara: My Lords, will the noble Lord take time off to visit the town of Consett in Durham, to which I have referred previously in your Lordships' House, to see the social, economic, and human cost of this "improvement"? Will the Government ensure that there are no further "improvements" in the accounts of British Steel at this kind of cost?
Lord Trefgarne: My Lords, no one doubts that in some of the towns where British Steel formerly had a major presence the social costs of what is really the decline of the world steel market have been very high. But the social cost of allowing British Steel to continue upon its original course would have been even higher.
Lord Ferrier: My Lords, would the noble Lord agree that railway electrification represents a considerable off-take of steel, quite apart from track replacement?
Lord Trefgarne: My Lords, I am sure my noble friend is correct.

School-leavers' Pre-Vocational Courses
2.48 p.m.
Baroness David: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend Easter and Whitsuntide school-leavers to be prevented from joining 21-hour pre-vocational courses in September 1982 as they will not have been able to claim supplementary benefit for three months owing to the DHSS regulations.
Lord Trefgarne: My Lords, Easter school-leavers become entitled to supplementary benefit at the end of the Easter holidays and, if they do not find work, will therefore be able to satisfy the new three-month qualifying condition for study under the 21-hour rule in time to begin a course in September. Summer school-leavers, who become entitled to supplementary benefit in September, will not be able to satisfy the three-month qualifying period until December.
Baroness David: My Lords, I thank the Minister for that reply and am relieved about the Easter leavers. Is the noble Lord aware that that still leaves the young people who leave school at Whitsun—that is, at the end of May—and those who leave in July, and that they will not be able to start pre-vocational courses in September which have been specially organised for unemployed young people? Is it not the case that, if those regulations are not altered by the DHSS, they will have to wait doing an apprenticeship of unemployment rather than training for employment?
Lord Trefgarne: My Lords, of course, the important feature of the supplementary benefit arrangements, and, for that matter, of the unemployment benefit arrangements as well, is that those who are entitled to those benefits should hold themselves available for work, and not be involved in full-time education or indeed in some job or other. That is why the conditions which I described have been brought into effect. We need to be certain that the supplementary benefit is not being paid to those who are simply continuing their education in one form or another.
Baroness David: My Lords, is the Minister aware that the 21-hour rule says anyway that they have to be available for employment? If the Government are worried that those who leave school and then perhaps might do a full-time A-level course will be able to claim supplementary benefit, could they not make some special regulation to exclude that one group of people and give the opportunity still to those many others who will be unemployed and out of training?
Lord Trefgarne: My Lords, it seems to me that the arrangements which the noble Baroness is describing would be in relation to somebody who was continuing their original course of education, which is not the essential purpose of the 21-hour rule. But if there is a specific narrow problem which she has in mind, I shall be happy to look at it.

Crime and Cheque Book Journalism
2.50 p.m.
Baroness Sharples: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will reconsider legislative controls in relation to the publishing of accounts of persons charged or liable to be charged with crimes and their activities, where
126
a close friend or relative of that person stands to gain financially.
The Parliamentary Under-Secretary of State, Home Office (Lrod Elton): My Lords, the concern of my noble friend is that crime should not pay, even by way of a journalist's cheque book. We can, of course, prevent a prisoner sending copy out of prison to the media. However, there are great practical difficulties in framing wider legislative controls, as suggested by the Question, and there are good grounds for preferring the voluntary approach. We therefore await with great interest the outcome of the Press Council's current inquiry into the problem.
Baroness Sharples: My Lords, I thank my noble friend for that reply, and I appreciate the difficulties. Is he aware of the disgust and revulsion one felt when, within a few hours of the death of Prudom, there were two pages (four in all) two days running, written by his girl-friend? Whether she was paid I have not been able to check. Would my noble friend agree that there is now a possibility that Fagan's relatives are trying to sell his story?
Lord Elton: My Lords, the Government are aware of and share the distaste which my noble friend expresses for the practices she describes. The inquiry of the Press Council was mounted following the public outcry last year, at the time of the Yorkshire Ripper trial, concerning the alleged activities of certain newspapers to secure information and stories from Sutcliffe's family. It concerns all aspects of press coverage of the arrest and trial of Peter Sutcliffe in the light of the council's declared views on cheque book journalism, and we hope that this will result in a proper regulation of the practice.
Lord Elwyn-Jones: My Lords, did this matter not also arise out of the trial of the Moors murderers? Are the Press Council really able to influence opinion strongly enough to make their adverse reports effective?
Lord Elton: My Lords, I am concerned to see that opinion influences the Press Council sufficiently to make them take effective steps.
Lord Wigoder: My Lords, is not the position that the law of contempt might provide some answer if it were enforced, and that the decisions of the Press Council might supply some answer if they were enforceable? Will the noble Lord consider taking action under one head or the other?
Lord Elton: My Lords, where legal proceedings have been initiated, any publication which creates a substantial risk of impeding or prejudicing the course of justice in those proceedings is likely to constitute a contempt of court under the 1981 Act. A defence however is that the risk is merely incidental to the discussion in good faith of matters of general public interest.
Lord Paget of Northampton: My Lords, in view of the last supplementary question, may we take it that

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the Liberal Party has now come round to the view that a free press is a mistake?
Lord Elton: My Lords, there are so many mistakes to which the Liberal Party must come round to a view of that I could not say if that is even a contender.

Local Government Expenditure: England
2.53 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Bellwin will, with the leave of the House, repeat a Statement which is to be made in another place on local government Expenditure, England.

British Waterways Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Transport Bill
The Earl of Avon: My Lords, I beg to move the Motion standing in the name of my noble friend Lord Bellwin on the Order Paper.
Moved, That the amendments for Report stage be marshalled and considered in the following order:—

Clauses 1 to 26,

Schedule 1,

Clauses 27 to 40,

Schedule 2,

Clauses 41 to 48,

Schedule 3,

Clauses 49 and 50,

Schedule 4,

Clauses 51 to 64,

Schedules 5 and 6.

—[The Earl of Avon.)
On Question, Motion agreed to.

The Defence Estimates 1982
2.55 p.m.
The Minister of State for Defence Procurement (Viscount Trenchard)The Minister of State for Defence Procurement (Viscount Trenchard) rose to move, That this House takes note of the Statement on the Defence Estimates 1982 (Cmnd. 8529).
The noble Viscount said: My Lords, my right honourable friend the Secretary of State for Defence has said that the lessons of the Falklands are being analysed, that he has published Cmnd. 8529 unaltered in the meanwhile and that we see no basic need to change the main balance of resources which he outlined in June 1981 in Cmnd. 8288. He will, however, produce a further White Paper when the lessons of the
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Falklands have been properly digested towards the end of this year.
I think there is a danger in the interim; it is a danger of over-reaction in the wake of the Falklands to a particular threat which we have encountered and which must be just about unique. The House will, I am sure, be concerned about the possibility of other emergencies arising outside the main NATO area. However, it is hard to think of one where a suitable air base for powerful modern aircraft could not be found at least closer than was the case in the Falklands operation, and so I believe that we must avoid overreaction and ensure that we keep our eye on the primary threat to NATO.
It must also be evident that although that is where our eye has been, the forces and equipment that we had were able to respond effectively to perhaps about the hardest out-of-area challenge that could arise. Our forces did it, the men of our forces did it; the equipment in the main did it; and the huge back-up operation, right through to the dockyard workmen and British industry, did it. Tributes have been paid by countless, far more important, voices than mine, and I will not detain the House long by repeating the combination of pride, gratitude and sorrow that we all feel. It would be impertinent for me to do so. However, in my own little way, I went to St. Paul's yesterday to thank God and the forces for victory in a war of liberation, in a war to uphold the rule of international law, in a war to uphold the principle of self-determination.
While fully appreciating the desirable idealism of those who advocate peace and peace movements, I believe that, in the world as it is, there are no higher moral standards than those held by the men of our forces, and civilians, who were prepared reluctantly to stand up to aggression in the only affective way ultimately left open to us, and who were even prepared to make the final sacrifice to defend the cause of right. No adequate tribute can be paid to those killed and injured in this cause. Not only did we do it, but, in my opinion, we could do it again in 1985 or 1990 if, God forbid, we had to.
Although Cmnd. 8288 foresaw a reduction in some areas and particularly in the number of surface ships, it, and the current White Paper, foresee a continuing increase in the power and weaponry of those ships and a continuing build-up of our power beneath the sea and in the air above it. We are spending more in real terms on the conventional Navy outside the nuclear element than was spent in the year before we came to power, and we shall still be doing so in all the future years that one can at all accurately foresee.
The normal trend, particularly for air forces and for navies, has been one of a reduction in numbers but an enormous increase in power. It is a fact that after the tragic loss of four ships in the South Atlantic, our plans and intentions will now have the effect that we shall have the same number of major ships, including submarines, in 1990 as we now have. They will be much more powerful ships, with both offensive weaponry and—as the Falklands operation has shown us the need—I hope very much more effective defensive weaponry.
Therefore while the number of units, whether of aircraft, tanks or ships, is an important matter, the experience of the Falklands does not suggest that

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using unsophisticated ships without expensive modern defensive weaponry is a sensible route to follow. The ships that we do have must be equipped not only with the best offensive weaponry, but with the best defensive weaponry, too, and, for instance, further improvements to the Sea Wolf missile systems will be on many of our ships by the end of the decade. To dwell on numbers and compare them with the past is to run the risk of planning to fight the next war on the basis of the last.
We are now proceeding with a large number of major new equipment programmes which will substantially enhance our conventional capability. By the end of the decade the Navy's Sea Harriers will have Sea Eagle missiles under their wings, with three times the range, and probably three times the cleverness, of the much vaunted Exocet, the record of success of which will, by the time the full analysis has been performed, be seen to have been over-stated. We shall have a new generation of much longer range and intensely clever homing torpedoes. We shall have more modern helicopters, and we are developing forms of indigenous airborne early warning for these. Our helicopters and Nimrods are now being equipped with attack weapons; our fleet of nuclear submarines will have better equipment and weaponry. Furthermore, within the decade, we may well have equipped ourselves with better prefabricated force multiplying emergency equipment to prepare container and other merchant ships for modern helicopters and possibly also for V-STOL aircraft.
Similarly, the other services will have much new equipment and weaponry. The Army will shortly introduce the Challenger main battle tank and a programme of improvements to the existing Chieftain tanks, including new guns, new night fighting sights, and new armour-piercing ammunition. We have ordered a tracked version of the highly successful Rapier system, which will enter service in the mid-1980s, and the Bates and Wavell systems will improve the Army's command and control capability: and in their way they, too, are force multipliers.
The Air Force will have taken delivery of its IDS and ADV Tornado aircraft, and our ability to take out Warsaw Pact airfields will be transformed with the introduction of the new JP 233 airfield denial weapon. The Air Force will be equipped with the Harrier GR 5 now being developed in partnership with the United States under the AV8B/GR 5 programme. This aircraft will have up to double the payload potential, and it has a greatly extended range capability compared with the present Harrier, so these new aircraft will greatly enhance our strike/attack capability on the central front.
I shall come later to the points that we need to take into account to get the best compromise that we can between numbers and power and sophistication. I am sure that, in winding-up the debate, I shall have to deal with questions of dockyards and refits. But my right honourable friend's plans in this respect will allow a greater degree of availability through a ship's life, and our designers are working to ensure that improvements to equipment and weaponry can be fitted much more quickly to our ships.
Despite the success of our forces in the Falklands, one still reads a fair degree of criticism. To an extent,
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that might be healthy, but at times I wonder whether as a nation we can ever stop tearing ourselves to bits. Furthermore, so deeply ingrained in our system is the belief that we are never prepared for war, that on this occasion, when our forces were militarily prepared, some critics have, in my view, simply not taken in that we won, that the forces did it, and that in the main the equipment performed well.
That takes me naturally to the real problem, as I see it, for modern defence, the problem that causes so much of the dispute about the allocation of resources—a dispute that would take place no matter how large were those resources. In this technological age, as equipment gets more powerful every year, it also gets very much more expensive. Chapter 4 of the White Paper reveals that most main equipments have been increasing in cost by an average of 6 to 10 per cent. per annum over and above the rate of inflation. Of course, the increase takes place in jumps as one moves from one generation to the next, but that is the average when spread over the years. In my view it is the failure of some critics to absorb the truth of what I have just said that leads them to continue to equate the cuts in numbers of some units with the cost of maintaining an independent nuclear deterrent.
I do not know how to play our gramophone record, supported as it is by two Government open documents, in a different way in the hope that its truth will be absorbed by those who criticise us on grounds of the expense of Trident. I do not know whether to say it louder, or to whisper, but it is true that Trident expenditure is still at a very low level and will average only 3 per cent. of the defence budget, which itself we are currently increasing by 3 per cent. per annum. In our opinion, the 3 per cent. of the budget spread over the next 15 to 18 years will buy a bigger dose of deterrent against the threat and the possible blackmail of would-be aggressors than we could buy in any other way.
But that has little to do with our ability to give the Navy, the Army, or the Air Force as much of everything as they would like in the conventional area. The main reason for the resource problems—and I must say it again—is the fact that a ship and its equipment, or an aircraft and its equipment, have been increasing in cost for many years—for up to 25 years—by 6 to 10 per cent. per annum over and above the rate of inflation. Many other countries, such as the Federal Republic of Germany, have no nuclear deterrent, but they have similar—some would say worse—resource problems to those we have ourselves.
I do not in any way want to suggest that those who have strong views about our nuclear deterrent in its own right should not voice them—and I am sure that they will do so. But to equate that with our resource problem and to equate Trident with the changes necessary in an age of change in the allocation of resources is, in my view, a non sequitur, and is not based on logic. I consider that such criticism comes particularly badly from those who would have a defence budget lower than ours. On the resources which the party opposite says it would allocate to defence, it would not only have to cancel Trident, but would have also to take 10 times as much out of our conventional programme over the period during which we are planning to procure Trident again.
As a result of the incredible and praiseworthy speed of action of the forces in the Falklands crisis, there have also been suggestions that our experience shows that if we were to avoid our allegedly cumbersome purchasing systems, we should get rid of delays and avoid cost escalations and make large direct economies which could help us with our resource problem. We shall continue to try to streamline our purchasing process. But, while it is a good debating point, the limits of its bearing on our resources problem should not be overestimated. The cost of the machine that does the procurement is a little over 2 per cent. of the value of our purchases, and the major part of that cost consists of the controllerates which are each headed by senior service officers. Their organisations not only buy in normal times but, of course, bought whatever was available off-the-shelf which they felt could help in the recent emergency. Buying what you need off-the-shelf is, of course, a quite different task from planning how to meet the changing threat in an age of change.
In peacetime we have to decide from research and development onwards the areas to which funds should be allocated, so that equipment may be available to meet what is currently an unknown threat but which may develop 15 or 20 years on. Analysis has shown that the central committees at the Ministry, which have been criticised as being too cumbersome, have taken only about four months per project to do their job. In this context, I would draw attention to the evidence given by the Ministry in reply to the views of industry to the House of Commons Defence Committee, the Select Committee, on 12th May 1982. By agreement with the committee this evidence was kept secret during the Falklands operation to avoid the risk of long-term evidence being wrongly used in relation to the Falklands emergency. It has now been published, as has the final report of the HCDC on the organisation and purchasing process.
Chapter 4 of the White Paper sets out the measures aimed at increasing the cost-effectiveness of our equipment purchases, and those measures are being implemented. We are involving British industry much earlier in our forward planning than hitherto. We are aware of the need for selecting only the most important improvements at the operational requirement stage, and of the need to concentrate our research and development funds as far as possible into areas of high technology, where we have world-leading indigenous capabilities; otherwise, we will simply not fund the most important areas adequately. This is much easier said than done, but it is for us and other countries the essential prerequisite to selling more abroad and achieving greater commonality of equipment among our allies. Only that way will we gain a sufficiently high volume of production in key areas to cover the very high research and development costs.
International collaboration must be made to work better, and, in our view, the more this can be done industrially the more easy it will be made for Governments to agree on practical collaboration. Again, it is easier said than done, not least because everyone wants to be in the same advanced high technology areas; and British industrialists also seem to have a habit of choosing a foreign partner even in areas
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where we already have a strong indigenous capacity, and where market prospects are unlikely to support more than one British supplier. We shall persevere in the certain knowledge that these policies will, at times, lead to criticism from some sections of industry and Parliament.
The major problems in choosing which of many roads to follow in the allocation of resources are not those that I have outlined so far but are, in summary, those relating to change of threat in an age of change; the change of technology, which alters the threat and its response; and the change of people, both those responsible for developing the threat and those of the free democracies, including our own experts and service chiefs, for responding to it. Nothing is easier for contemporary Ministers than to go with the tide and criticise their predecessors, particularly if they happen to belong to the party opposite, for choosing some things wrongly in the past. I am tempted particularly when I am asked, for instance, why it was that the Sea Wolf system, suggested 17 years ago, was not present and bristling on every side of every warship in the Falklands. I have previously pointed out in that context that it was in fact impossible to fit it to certain warships without removing other, essential protective weaponry.
But when I am asked why it was not developed faster by my predecessors I think of the number of alternative routes that are put before Ministers today for every major role—different methods of tank busting, different methods of finding and killing enemy submarines, different methods (and these are future methods) of air strike and air defence—all of them a matter, to a degree, of conjecture and argument as to what their development costs might prove to be and a matter of argument as to the degree of their effectiveness depending on the unknown developments of potential enemies. The only thing I can assure your Lordships which is not a matter of argument about these possible future alternatives is that we do not have the resources to follow all the alternative routes, and if we were to go at the fastest possible pace on any of them we would have the money to do it only in very few instances, and we would be able to follow only very few of the routes which may turn out to be the areas of future threat. This problem probably would not be solved even if we had double the resources; and so, for those reasons, we do not criticise our predecessors of either party.
Since I started this analysis by mentioning the Sea Wolf system I should like to end by pointing out, as a credit to predecessors over the last 15 years, that our Navy is the only Navy with an effective antimissile missile system which can defeat incoming sea-skimming missiles—the only Navy. The new improved Sea Wolf will be even more effective.
When we have digested the lessons of the Falklands, and even when we have done that in a very discriminating way, I suspect we shall find that we have good cases for spending more in a large number of areas in terms of the equipment of all three services; and there are also pressures, which will probably be mentioned in this debate, for us to move ahead in areas of great importance to our permanent NATO roles. Thus, I am sure, there will be pressure for more money to help the new at present private venture, and hopefully joint

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international industrial venture of the future, concerning the future combat aircraft.
I believe that the House will agree that my right honourable friend is correct to ask for time to digest the lessons of the Falklands before publishing a further White Paper. I believe that the House may well endorse, as I believe the other place in the main has endorsed, the plans of defences to meet our major perceivable threat which he has outlined in the White Paper, Cmnd. 8529. My Lords, I beg to move.
Moved, That this House takes note of the Statement on the Defence Estimates 1982 (Cmnd. 8529).—(Viscount Trenchard.)
3.18 p.m.
Lord Peart: My Lords, I should like to thank the noble Viscount the Minister for his opening speech. It seemed to me to be a skilful negotiation of a difficult terrain, and I noted that he avoided a number of potential minefields with great dexterity. I personally admire the Minister because he has been very diligent, and if we have wished for more information from his own department he has always been willing to provide it. I thank him for that over the period we are covering today. I join with him in paying tribute to all three armed services, which performed so well in the South Atlantic. I should also like to pay a special tribute to the Merchant Marine, and the many military and civilian personnel who provided support for the task force. I have always had the greatest confidence in the men and women of our armed forces, and that confidence has been amply repaid. I hope we shall always honour the memory of those who have fallen and those who have suffered permanent injury.
I am a little surprised, however, at the determination of the Government, particularly the Minister of Defence, to publish this White Paper with only the briefest reference to events in the Falkland Islands—events which surely, whether we like it or not, will alter our defence commitments. It will no doubt be some time before all the facts can be established and the right conclusions drawn, but I think there are some fundamental lessons which can already be learned. Is it not true that it was purely chance that we had three aircraft carriers available for service in the Falklands, and that if the Argentine junta had been a little tardier in pressing their claim to the Falkland Islands we would have had only two? It is difficult to agree with the foreword to the White Paper that "the framework of that programme", the programme in Cmnd. 8288, "remains appropriate" when the Government are proposing to run down the Navy, thus undermining our ability to respond to acts of aggression such as that committed by Argentina.
It is true that our ultimate security lies with the preservation of peace in central Europe, but it does not follow that the main threat to that security will be in central Europe. The possibilities of minor aggression are infinitely more varied and numerous at sea than on the frontier in West Germany. Unless the Government are prepared to renounce our commitment overseas—and, far from doing that, they seem bent on increasing them—they cannot seriously present such a programme as appropriate. I agree that one should not necessarily seek to re-cast British defence policy in response to one campaign, but I think that the
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Government have a duty to examine their policies in the light of that campaign and in the light of the role that they are seeking to play in the world.
They cannot pretend that the Falklands campaign did not happen. The future defence of the islands must be taken into account. We cannot undertake a long-term defence of the Falklands without making cuts elsewhere. I welcome the news that HMS "Endurance" and "Invincible" have been reprieved along with the Portsmouth naval dockyard. I only wish that this sudden change of heart might have extended to the Chatham dockyard, also.
To those on the outside, it appears that the battle over the replacement costs of the Falkland war is only just beginning. The right honourable gentleman the Minister of Defence has secured the agreement of his fellow Ministers that the cost of the war will be met out of the contingency fund rather than the defence budget; and that this will include replacement costs for the ships and aircraft lost in the fighting.
My Lords, this is all very well, but the danger surely exists that those replacements will suffer from budgetary constraints. It is reasonable in my opinion for the Navy to demand new Type 22 frigates to replace the Type 21s which were lost in the Falklands. Given the concern about the reliability of the Type 21 as a result of the fighting, it is to be hoped that the Ministry of Defence will not dress up the smaller Type 23 frigate, which will not be available until 1988 at the earliest, as replacement ships.
I appreciate the financial dilemma in which the Secretary of State finds himself. He is committed to the expensive Trident programme and has persuaded himself that the Army in Germany must be maintained at its present strength, and he is obliged to live within a 3 per cent. a year after-inflation defence spending increase. There is simply not enough cash available to do it at all; and there, my Lords, I believe is the rub. The Government are committed to a programme which is at variance with our best interests, not to mention our bank balance.
NATO should not be allowed to become a sacred cow. It is not self-evident that the Alliance is working well. There is too much replication of effort, too many members having an Army, Navy and Air Force and too many members seeking to maintain a comprehensive armaments industry. The lack of progress on the standardisation of equipment is a prime example of the Alliance failing to work as it could.
I want to ask why there has been no discussion with our allies of a more equitable sharing of the defence burden. The amount of GDP spent by Britain in NATO is a greater percentage than that of any other NATO power, not excluding the United States. The maintenance of our forces in Germany absorbs 40 per cent. of the defence budget. Yet these forces represent only 10 per cent. of all NATO forces allocated to the defence of the central front. The Royal Navy, on the other hand, provides 70 per cent. of the NATO maritime force assigned to the East Atlantic and the Channel and yet commands only 23 per cent. of the defence budget. Surely, it is time that we at least discussed these disparities with our allies.
The White Paper stressed that the escalating real cost of defence equipment is one of the greatest problems that the Government face in managing the defence

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budget. Why, in that case, are they tying their own hands by committing so large a proportion of the defence procurement programme to one weapon, Trident? The Government say that Trident will cost £7·5 billion, but it is widely accepted that the real cost is more likely to be £10 billion. During the peak years of the Trident programme, it will cost 20 per cent. of new orders—that is, the equivalent of 30 per cent. of the Royal Navy's budget.
Moreover, we shall not be committing scarce resources to a tried and true system—far from it! Trident II, which the Government intend to buy, is still in the experimental stage. It is an untried system. The Government have been concentrating themselves on the success of our forces in the Falkland Islands, a success which was partly due to the flexibility which has long been the hallmark of our defences. Trident, I believe, will undermine the flexibility by diverting resources from other vital areas of defence.
There is another important point which, I believe, it is right to stress, because even the Prime Minister in New York, when she was addressing the United Nations special session on disarmament, spoke in favour of limitation of armaments. Public concern about nuclear weapons still continues. Whether we like it or not, the size of recent demonstrations in New York and Bonn, to name but two examples, underlines the failure of NATO and the Reagan Administration to counter the growing appeal of the peace movement. I personally welcome the opening of the strategic arms reduction talks and have always stressed that from this Box; and especially the endorsement by the Soviet Union of the general principle of substantial reductions in strategic weapons.
At last, there seems to be a tacit acknowledgment by both sides that their nuclear arsenals are far larger than they need to be for deterrent purposes. How can we expect the United States or the USSR to move towards nuclear disarmament if we continue to develop and expand our own nuclear capability? I would like noble Lords to try to obtain a very fine document on this matter which was produced by the Independent Commission on Disarmament and Security Issues under the chairmanship of an ex-Premier of Sweden who, I think, played a distinguished part in the discussions. If noble Lords have not already done so, I would urge them to read this report. It contains some sobering facts about, particularly, the effect of militarisation of the third world.
If the pursuit of security is having repercussions in the developed world, how much worse is the situation among the developing countries? Developing countries now account for approximately one-quarter of the world's military expenditure. One has only to use such figures as how much one soldier costs. In Pakistan, in 1978, for example, it was estimated that the cost per soldier was about 2,308 US dollars a year against a per capita expenditure of five dollars on education and one dollar on health itself.
My Lords, I believe that the White Paper which stresses the escalating real costs of defence must be studied carefully. The Government say that Trident will cost £7.5 billion. As I have said, it is widely accepted that the real cost is likely to be £10 billion. During the peak years of the Trident programme
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it will cost 20 per cent. of new orders. There is another argument against Trident. We are all ostensibly committed to disarmament. As I have said in New York when she was addressing the United Nations special session on disarmament, even the Prime Minister spoke in favour of limitation of armaments. There is concern about it.
I welcome the opening of the strategic arms reduction talks and especially that we will not have the silly criticisms that we have had before when this has been mentioned. This was a central point made by the independent commission that I have mentioned. I would say that we still have a lot to examine carefully, and I hope the noble Viscount will come with a critical edge on his thinking and not just be over-active about Trident itself.
Viscount Trenchard: My Lords, before the noble Lord sits down, may I ask him whether he will tell us whether the plans of his party to bring the spending on defence down to the average level of our NATO European partners are still in existence, and whether he would contradict the statement that I made that that amounts to 10 times the cost of Trident over the years?
Lord Peart: My Lords, all we want is that we should have a share in it which is equivalent to that of our partners in NATO. That is all that I was asking.
3.31 p.m.
Lord Mayhew: My Lords, there have been many recent debates and Government Statements on defence in your Lordships' House and in another place, and these have revealed clearly the basic weakness of the Government's defence policy. It emerged clearly again from the speech this afternoon of the noble Viscount. It is that Ministers are committing the traditional crime of peace-time British Governments in taking on too many defence commitments for the resources they are capable of mustering.
The Government have imposed five major tasks on the Armed Forces. First, home defence. Secondly, defence of the NATO area together with our NATO allies. Thirdly, operations outside the NATO area together with some of our NATO allies. Fourthly, operations outside the NATO area by ourselves alone independently of allies. Fifthly, Trident. That is all on a budget of £14.1 billion, less an uncertain proportion of the cost of the Falklands. The noble Viscount himself stressed the resource difficulty that he faces. He quoted from Chapter 4 of the White Paper, and its striking testimony that the cost of new major weapons systems is escalating at between 6 per cent. and 10 per cent. more than the rate of inflation. My Lords, the acceptance of all these commitments cannot be done—or at least it cannot be done adequately—without exposing our armed forces to undue risks. This is the burden of what I should like to submit to your Lordships this afternoon.
No one, of course, is questioning the overriding importance of the first two tasks which the Government lay on the services: home defence and defence of the NATO area. Admittedly, there is a lively argument going on now as to exactly what Britain's contribution

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should be to the defence of the NATO area. The Navy lobby and the Army lobby are busy shooting it out in the correspondence columns of The Times. The Navy lobby is arguing that some or all of our land and air forces should be withdrawn from the Continent. I submit that it would be most unwise to do this. As a deterrent to aggression a battalion in place is worth much more than several battalions stationed at home.
Moreover, though we are told that if we withdraw these land air forces our allies will quickly close the gap; I see no evidence whatever for this. Might it not be just as likely that they would be tempted to follow our example and themselves withdraw troops, including the most important ally of all, the United States? We are assured by the Government, moreover, that we save no money by withdrawing these troops from the central front, and we have no reason to doubt that. Possibly the worst effect of all would be to lower the nuclear threshold in Europe at a time when we ought to be straining every nerve to raise it.
If the Navy lobby is mistaken, their opponents are equally misguided. As the Falklands conflict showed, we have easily the best Navy in the world, the best trained and the most professionnal sailors with the finest possible history and traditions. It is in the maritime role, in the mastery of the east Atlantic, that Britain can make a unique and irreplaceable contribution to NATO. My own conclusion is that our job is to strengthen rather than to weaken our contribution to NATO on land, in the air and at sea.
I come now to the third task that the Government imposes on the forces. I think that we can cautiously approve it; namely, we should be willing to consider contributing to operations outside the NATO area in conjunction with the United States and possibly other NATO allies.
Such operations will never be strictly NATO operations because not all NATO Governments are ever likely to agree to support them, and we ourselves should never give a blanket commitment to taking part in them. We should judge each one of them on its merits. But there may be occasions, such as a Soviet or Soviet-inspired attack on the shipping of a NATO member, or armed interference with our oil supplies, when it would be right, after exhausting all the peaceful methods of settling the dispute, to resort to armed action with the United States and other NATO allies.
My Lords, the question is, of course, how to find the resources to fulfil these three basic tasks adequately. I believe that the answer is to eliminate entirely the fourth and fifth tasks which the Government lay on the armed services.
I come to the fourth task, therefore, which was well defined by the Secretary of State in The Times this morning. He wrote:
"as the Falklands operations showed, we need strong naval forces to maintain the ability to project British power in purely national interests".
In other words, we have purely British interests in parts of the world other than the Falklands and must maintain capacity to send task forces to protect them or liberate them, independently of our allies, as we did in the Falklands. It is true that we have purely British commitments all over the world, left over from our imperial past. There is Hong Kong, Gibraltar,
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Brunei, Belize, and a further eight places listed by the United Nations as United Kingdom non-self-governing territories.
The Government propose that we should maintain the military capacity to defend or liberate these by ourselves without the participation of allies. I think that we are entitled to a great deal more explanation of this than we have had so far. Because the Falklands was a brilliantly successful military operation, it does not follow that it is an example for the future—not at all. There is no logic in that. There is no common sense in it at all. In the first place, the Falklands cost many lives and a great loss of material. In the second place, good luck played a big part in it—and it came closer to failure than was comfortable. Above all—as the inquiry will certainly show—the Falklands operation should never have been necessary in the first place. For all these reasons, it is plainly wrong for the Secretary of State to say: "Look to the Falklands. Here is a pattern for the future", or for the noble Viscount to say as he said this afternoon: "We did it, and we could do it again in 1985, and in 1990". But we do not want to do it again in 1985.
Viscount Trenchard: My Lords, will the noble Lord give way? I think that when the noble Lord reads the Hansard report he will see that what I was trying to demonstrate was that our NATO equipment was able to be diverted and we did not need special out-of-area equipment, and I believe that will be true of the future as it has been today.
Lord Mayhew: My Lords, with respect, I would dispute this point with the noble Viscount and I shall be coming to it very shortly. I think the conclusions must be—
Lord Harmar-Nicholls: My Lords, may I ask a question of the noble Lord? Is he saying on behalf of the Liberal Party that the accomplishment in the Falklands was just "good luck" and nothing else?—because those were his words.
Lord Mayhew: My Lords, I am sure that when the noble Lord reads the account in Hansard he will see that he is not doing me justice; but I believe one of the factors that played a part was good luck. I think that nobody who studies the failure of Argentine bombs to explode and other factors of that kind will say otherwise. I do not believe the noble Viscount himself would deny that in certain respects we were fortunate in the outcome of the Falklands, and that is not to detract for a moment from the brilliance of the operation or the courage of those who took part.
However, the conclusion I draw is not that we should be ready to repeat the Falklands operation in other parts of the world, as the Secretary of State suggests and as the noble Viscount has also suggested, but that we should direct all our diplomacy to ensuring that we are never placed in a Falklands-type situation again. That is the major lesson to be drawn from the Falklands. We should apply ourselves to the task of transferring or sharing our commitments so that we never again find ourselves obliged to fight a major military operation thousands of miles away without the help of allies. Turning now to the point the noble Viscount was

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making, what is the cost of this capacity which he is demanding?
Viscount Trenchard: My Lords, there have been estimates already made public and I will return to that matter in my summing-up later rather than intervene during the noble Lord's speech unnecessarily. The point I make is that the main cost of the forces is their existence and their equipment. You have them. What the Falklands has shown is that they are not so unsuitable for out-of-area; they can be made suitable with a little amendment, with great courage and a great measure of flexibility, as has been shown.
Lord Mayhew: My Lords, I think the implication of what the noble Viscount is saying is that we do not need a special capacity or a special budget for this capacity. We can muddle through on what we have for NATO—
Several noble Lords: Oh!
Lord Mayhew: My Lords, yes, that is his implication—we must muddle through with what we have already assigned to NATO. But what happens if our next independent military operation coincides with an increase in East/West tension? It may well happen. How can we go on taking away from our troops and our resources assigned to NATO, dispensing with extra expenditure on the role the noble Viscount is looking for in the future? He said that we had what we needed; we had the right mix of forces, by chance, in the Falklands. That is not strictly correct. There was a grave lack in the Falklands; there was a lack of airborne early warning and a lack of large carriers. If we are going to maintain our capacity to conduct large-scale military operations independently of our allies all over the world, we ought never to have scrapped the big carrier fleet in the old days. I would ask the noble Viscount, when he winds up, to tell us a little about this role. Has he studied the political implications? Have the Government worked out the cost and the logistics? I think that Parliament is entitled to know.
Finally, about the fifth task which the Government have imposed on the forces—Trident—at least the Secretary of State is not claiming that the Falklands showed how right he was about Trident. The Government scenario, according to which it might be right for Britain to use or threaten to use nuclear weapons independently of its allies, is absurdly far-fetched—far too far-fetched to be worth £7½ billion, let alone £10 billion. The same is true not only of our nuclear missiles but of our nuclear bombs and nuclear depth charges. Quite understandably—and I agree with the the Government here—they decline to say whether our bombs and depth charges were taken to the South Atlantic. I should be suprised and dismayed if they were taken; but it is perfectly plain that they were, of course, totally irrelevant to the Falklands operation.
In conclusion, I would submit that our proper course is to concentrate all our resources on the three overridingly important defence commitments: home defence; defence of the NATO area with our NATO allies; and a contribution to operations out of the
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NATO area with the United States and maybe one or two other allies. I submit that the Government should abandon their ambitions to be a major nuclear power and to conduct major military operations worldwide without the participation of allies. Until these changes are made we shall be placing an unfair burden on the services and imposing tasks upon them without allowing them the resources they need for carrying them out.
Lord Harmar-Nicholls: A disgraceful speech, my Lords.

Local Government Expenditure: England
3.46 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, with the leave of the House, I should like to read a Statement made by my right honourable friend the Secretary of State for the Environment in another place. The Statement reads as follows:
"With permission, Mr. Speaker, I should like to make a Statement on local authority expenditure. The Government's overriding objective is to reduce the level of current spending by local authorities and thus to secure the low level of rate increases that are now possible and desirable. For 1981–82 I can tell the House that I shall be tabling a supplementary report later this week to reduce by £201 million the total of grant available for distribution. This holdback will fall on those authorities that did not meet the Government's targets in 1981–82.
"For 1982–83 it is also necessary to reduce grant for overspending authorities. Authorities will this week be sent details of the proposed grant reductions which, on the basis of their budget returns, will total £312 million. I propose to make a supplementary report in the autumn. For 1983–84 I am now giving local government the earliest possible indications of the Government's plans for local government spending and our proposals for the next year's rate support grant settlement. This will give all local authorities ample time to plan their budgets now and make what changes are necessary.
"As in 1982–83 I propose to give expenditure guidance to individual local authorities. There will be two basic rules: for those authorities who are budgeting to meet their targets: a 4 per cent. increase on their budgets for this year. After allowing for a difference of 1 per cent. between these budgets and likely outturn, this means an effective 5 per cent. increase on this year's cash. For the remaining authorities, we shall only assume that extra 5 per cent. on the targets that we set for this year. I am today sending to local authorities exemplifications for each authority, together with a memorandum explaining how we propose to calculate the expenditure guidance figures. Copies are being placed in the Library of the House.
"These targets represent an increase in the public expenditure provision of 5 per cent. or £900 million to £19·5 billion. In aggregate this is 2 per cent. more than provided in local authorities' budgets for 1982–83. It is probably 3 per cent. more than out-turn allowing for the possibility of a 1 per cent.

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difference between budget and outturn. £19·5 billion does not reflect the Government's view of what ought to be spent. It rather reflects the problems of securing economies faster than local government has achieved. Accordingly, I propose that the current expenditure total on which grant related expenditure assessments will be calculated should be substantially lower at £18,800 million. This is £800 million above the total current expenditure component of GREs for 1982–83. Authorities which exceed these guidance figures will risk a more severe loss of grant than in this year.
"The rate levels in each authority depend not only on the expenditure levels but also on the level of grant. I propose that the amount of aggregate Exchequer grant should be £11·8 billion on the basis of local authorities spending at the level of their guidance figures. This is over £300 million or almost 3 per cent. more in cash than in the 1982–83 settlement. Our present estimate is that the aggregate Exchequer grant will be about 53 per cent. I shall announce details of grant distribution arrangements and of the grant abatement scheme later in the year.
"I shall be meeting representatives of local government in the Consultative Council for Local Government Finance later today to discuss these proposals. The decision about the level of rates is now entirely a matter for each authority. If they budget to spend within the guidance figures I have proposed, many authorities may find that they need no rate increases at all. That is the prize. With moderate pay settlements, and careful budgeting, it can be achieved".
That is the end of the Statement, my Lords.
3.51 p.m.
Baroness Birk: My Lords, I have to thank the Minister for repeating the Statement and for doing so with such clarity, because the one thing that is lacking from the Statement is clarity. One could never accuse it of being a simple or simplistic Statement. The Secretary of State has announced what he is going to do in 1982–83 and he is using a number of supplementary reports, 1981–82 and 1982–83, to legalise his intentions—some might call them threatening intentions—which have been mooted. I would first like to ask; how can authorities plan expenditure with this spate of supplementary reports coming along at intervals when they need to know exactly where they are?
In 1983–84 the two targets set according to the rules are a 5 per cent. increase on last year's target and then a 4 per cent. increase on budget. This, I say with great respect to the Minister, means absolutely nothing until we have seen the memorandum setting out the guidance figures; and while I note that copies have been placed in the Library, it has been quite impossible, certainly for me, and I imagine for other noble Lords, to have caught up with them this afternoon in time for this Statement, which I have seen only in the last half hour.
I should like to ask the Minister: what allowance does this process, both the 4 per cent. and the 5 per cent., make for those authorities who are faced with increased demands from unemployed school-leavers, with more youngsters now staying at school because there is no hope of a job when they leave school? How is this
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going to affect also what is needed in respect of increased demands on the welfare work of local authorities, especially with unemployment rising yet again? Then, what about the increasing number of elderly people who are not able to be cared for in the National Health Service? I could go on with a very long list of people who are suffering now, and who are going to suffer even more under this.
Expenditure guidance is referred to in the Statement. When does the guidance become orders? And does the Secretary of State intend to put in commissioners to monitor the expenditure of individual authorities? This is another further encroachment on local government which has been going in an unfortunately straight line and right to the heart of local government.
The Statement tells us that there will be 2 per cent. more in cash, but in real terms our figures show that there is a reduction of 2 per cent., so this, unfortunately, is a false hope, one which cannot be fulfilled. It is what I would call crazy cash planning. Cash does not mean anything at all unless it takes into account pay and price increases; and obviously these are going to be more than the Government are calculating in that rather vague overall figure. There is no point in issuing targets now if authorities do not know the consequences of deviating from them. So far as inflation is concerned, I should like to have a further breakdown of what is assumed for pay and prices. For example, will the police negotiating board give a police increase of between 9 and 10 per cent. tomorrow, as is very seriously rumoured, and how much will there then be for other local authority staff, many of whom come in the lower grades of pay?
The Statement refers to consultation with the Consultative Council on Local Government Finance. I would ask the Minister: why was this not discussed with them at their meeting last week? I do not understand consultation as being discussion after the event, but as discussion of what one has in mind with those who are most concerned. I would be very surprised if the Consultative Council does not take the same view. Finally, the Minister has said that many authorities may need no rate increases at all and, in the words of the Statement, "That is the prize". Unfortunately, that depends entirely upon an illusion. It is unrealistic, and it is an unrealistic assumption on inflation. The truth is that there are likely to be rate increases of 11 or 12 per cent., certainly not the single figures referred to in the Statement, and earlier. That, I am afraid, is what the Government are forcing upon local authorities.
3.56 p.m.
Lord Beaumont of Whitley: My Lords, I too would like to thank the noble Lord the Minister for repeating the Statement. It is, as the noble Baroness, Lady Birk, has said, a very complex Statement, on a very complex matter, and we are going to need quite a time to digest it. Indeed, the local authorities are going to need quite a time to digest it and it is just as well that they have been given it.
The Statement says that the Exchequer grant will be about 53 per cent., which means that it will be down about 3 per cent. It is very difficult to see—and perhaps the noble Lord would like to comment on this—how on earth local authorities are to cope with a 3 per

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cent. fall like that with no rate increases, and to maintain the services, let alone carry the great burdens which are put on them by the present economic situation, to which the noble Baroness, Lady Birk, referred.
It is a complicated Statement. I believe the question I have asked really goes to the heart of the matter, but that it separates what is a very complex matter from one of the most over-optimistic summaries at the end that I have ever come across:
"If they budget to spend within the guidance figures I have proposed, many authorities may find that they need no rate increases at all. That is the prize".
It is indeed a prize, and if any of them manage it I, for one, will be extremely surprised.
3.59 p.m.
Lord Bellwin: My Lords, on the noble Lord's last observation, I presume he was equally surprised last year when similar remarks were made and yet so many local authorities did manage. To deal first of all with the comments, I thank the noble Baroness, Lady Birk, and the noble Lord, Lord Beaumont of Whitley, for their first observations. I certainly agree with the noble Baroness that simple it is not, without any doubt; but then, how could we ever have a simple system when we seek to distribute some £11 billion or £12 billion of money and are talking of around £20 billion of spending among more than 400 authorities on the basis of assessment of need and so on? Simple it never has been, and simple it is not at the present time. Whether it ever will be, who can say?
The noble Baroness asked, how could local authorities plan with this spate of supplementary reports coming along. She certainly will know that local authorities were this time given more information about what the holdback rules would be earlier than ever before, certainly before the start of the 1982–83 year; and when I think back in my own experience of how information of this kind was often dropped upon us at the last minute with no intimation, I can certainly say that, whether one likes it or not, intimation there certainly was, and in my opinion that side of it will come as no surprise at all to local authorities.
I accept another point which the noble Baroness made, that the figures will be more meaningful with more information. That is true, but that is why, after all—although it sets out clearly what is intended—this is still a consultation document. I think that I should stress that. She asked what allowance the proposals make for various services which she mentioned. She said that she could have mentioned more, and I am sure she could. She could have gone through the whole list of services. To answer that, one would have to decide what view one takes about the ability of local government to reduce its expenditure from the 1978–79 level, which was the highest in its history, by just over 1 per cent. per year, which is what the Government have been asking for, and which point we shall have reached by this time.
I am far from satisfied that this is an unattainable figure. Indeed, so many authorities have achieved this type of reduction without any dramatic decrease in service levels that those which have not done so will need to look very carefully not least at the books which are published this week by CIPFA, which show
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how some do certain things at a lower cost than others. That is not meant as a criticism of local government as a whole—Heaven forbid that I should make that—but it is a criticism of those who are not willing, or are not able, to achieve the provision of services at the same levels as are others. It is not good enough to say that the circumstances vary so much. Of course, the situations and circumstances of authorities vary, but there is a very considerable pattern which is not variation. So it is incumbent upon all sectors of local government to look at what others are doing and to get better value for money, if I may use that term.
The noble Baroness asked whether we shall need commissioners to monitor. No, my Lords, there is no question of commissioners being needed to monitor. That is the last thing we want. She said that this was a further encroachment. All I can say is that, certainly, more information of the Government's intentions was given this time than ever before. She also used the term "crazy cash planning". I should have thought it was about time that we got around to cash planning, and had a little less of some of the vague percentages that were talked about in the past. Lack of cash planning has led to many of the national problems that we have today, and it makes very good sense to have such planning.
The noble Baroness asked me what was assumed for pay and prices. I have to say that we have started from the Government's medium term financial strategy, as set out in the Financial Statement and Budget Report—the Budget Red Book. We have also taken into account the kind of pay settlements which we expect local government to reach—something less than the rate of inflation. In that we are now on a cash basis, that is a more sensible approach than some of the wild and woolly figures that were used in years gone by, which nobody in local government ever believed, so that, consequently, they made their own assumptions, often over-assuming, and thereby putting on one side more than was needed. I myself in another capacity—I will not say that I was guilty—was always very careful to make sure that I did my calculations on the right side, rather than the wrong side. But if it is done by over-assuming, it comes out at the expense of the ratepayer. However, that is for each authority to decide.
The noble Baroness made a point about consultation, and I do not know whether it was a fair one. I say again that, to the best of my knowledge, there has been more consultation than ever before. If the noble Baroness feels that the conclusions reached were based upon less consultation than she thinks is desirable, I shall just have to take what she says, because I really cannot comment on that. My information is that there has been great consultation and, of course, there will be even more with the further conversations that will take place.
As I come to the last of the points which the noble Baroness made, I do not at all accept her point about the likely average rate increases being 11 or 12 per cent. I stick entirely to what is said in the Statement on that. We are now, at last, talking in cash terms and the logic is clearly there that, allowing for the grant that we have said will be given and the basis on which it will be given, and taking into account what has happened last year and in the current year, if authorities will

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work within the spending guidelines, I believe that there need be very little, if any, rate increase.
The noble Lord, Lord Beaumont, said that it would take time to digest and, as I said to the noble Baroness, I absolutely accept that. He asked about coping with 3 per cent. I said that we are talking more of 4 or, possibly, 5 per cent., although, in the event, it depends on the outturn. Without repeating myself, I make the same comments as I made to the noble Baroness, Lady Birk. Each authority will do its own thing in its own way, but I am very confident that they will cope all right. As regards being over-optimistic, that is a view one can take. Obviously, it is a view which I do not take, but I understand why the noble Lord speaks as he does.
Lord Davies of Leek: My Lords, is the noble Lord aware that some of us believe, quite honestly, that there is increasing interference with the democracy of local government by the centre? It is growing more and more authoritarian, and there is less belief in the capability of local democracy to develop. I have not had a chance to study these figures, so I have to be careful. But we are heading for destructive expense throughout the country, with the condition of the sewer systems of our great cities and the wear and tear on our roads. Far from wanting to be cutting, some Government—whether Conservative or not—in four or five years from now, will have a vast expense on its shoulders, because there has been a lack of constructive spending on necessary social things like sewers—omitting such items as social security—throughout the years. This never seems to be taken into account. Somebody will have to meet that expense with a contingency fund, or something from the centre, if the Government do not hand more democracy to local ratepayers.
Lord Bellwin: My Lords, the noble Lord has touched on two quite separate points. The Statement refers to the amount of money that will be given. Although the noble Baroness touched on it in a way, when she said that this would affect the ability of local government to do its own thing—which I understand, and from where she sits it was a fair point for her to make, although I do not agree with her—the necessity to spend more on the infrastructure, such as sewers and so on, is a point in itself. In no way can we equate that with local democracy and its freedoms. If we are talking, as we are today, of providing a cash increase in round figures of some 5 per cent. overall in relation to what is being currently spent, I do not think that that is being over-hard in any way. This is certainly a tough budget, but I think it is a fair one. When local authorities have looked carefully at what it all means, they may feel that it might be less tough than they might have expected, in view of the current overspend of £1¼ billion that we currently have.
Baroness Stedman: My Lords, from this Bench, we should also like to thank the noble Lord for the way in which he has presented the Statement, though whether we, or the local authorities, will be quite so happy with the contents of the Statement is another matter. We fought for a long time on the Local Government, Planning and Land Act against giving
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the Minister retrospective powers, but we did. But, at the same time, we also gave him the right to call in individual authorities to discuss their problems with them, if they were given to overspending. May I ask the Minister how many local authorities are involved in both the holdback for 1981–82 and also the reduction in grant for 1982–83, and how many of those authorities the Secretary of State has seen to find out whether there is justification for some of their overspending because of additional services which they have to provide to cushion hard times in their area if they have high unemployment and similar problems? As has been said by the other two speakers, the increase which is allowed is nothing like enough to keep the status quo for the local authorities or to help them to meet inflation. It will certainly mean that there will have to be some cutback in services or increased rates. Quite frankly, the Government should not impose statutory duties on authorities unless they are also willing to ensure that the authorities have the resources to carry out those duties.
The Statement says that this reflects the problems of securing economies faster than local government has ever achieved. I am not quite sure how they are going to do that. My county treasurer told me this weekend that there is talk of introducing volume targets, which is a new piece of local government jargon, and that if these are introduced it will mean, so far as my county of Cambridgeshire is concerned, a cutback of £19 million. We are not one of the high spenders. We have always been a Conservative-controlled authority. In fact, we are beginning to get the name of being one of the mean authorities. Yet if this happens we shall have another £19 million cut off from us.
The noble Baroness referred to the question of consultation with the authorities. It seems to me that not a great deal of consultation has taken place. An announcement about the proposals has been made here this afternoon and the noble Lord says that he will be meeting representatives later today to discuss them. I should have thought that he would have discussed them in some detail before coming to the House with firm proposals.
We had the Green Paper earlier this year, and comments upon rating reform were asked for by 31st March. That is four months ago. How far have the Government got with making up their minds about rating reform, and at what stage can we expect legislation to deal with it? If seems to me that the sooner we get back to accountability downwards towards the electorate and away from accountability upwards to the Secretary of State the better it will be for local government.
Lord Bellwin: My Lords, on this point of consultation, your Lordships are being less than fair, or it may be that they do not know just what consultation has been taking place. I would say that, without any question, there has been, and there is today, more consultation on matters of this kind than there has ever been. That is quite a statement to make, because I do not know exactly what took place in the past. However, my own experience of the kind of consultation which went on and of what goes on at present leads me to believe, although I am open to correction, that local

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government has never in the past been given as much intimation at this time of the year as I am giving today in your Lordships' House and as my right honourable friend is giving in another place. At least I can absolutely guarantee that this will be very well received by local government. In terms of time, it is far better than anything I have ever known before.
The noble Baroness asked me how many local authorities will be affected by hold back and how many have been seen. I do not have the exact figure. I shall certainly write and give it to her. However, the likelihood is that perhaps between one-half and two-thirds of local authorities will be affected. Turning to how many local authorities have been seen, based upon their having made representations, the noble Baroness will know from her experience that this is the time of the year for making representations. Again I do not have a number to give to her, but many local authorities do come, as the noble Baroness will know, and all who ask to come on these grounds are seen. If the noble Baroness would like more detail on that point, again I shall gladly give it to her.
The noble Baroness is also concerned about volume targets and asks what this means. I am not quite sure what she thought the treasurer to whom she spoke in Cambridgeshire meant, but I would doubt very much indeed whether the kind of figure which she gave in that case would apply in the kind of circumstances which I think she meant. If I am being very vague, it is because I am not too clear about exactly what was said. Perhaps, therefore, the noble Baroness would allow me to let that one go for the time being.
As to the Green Paper, I have said more than once recently in your Lordships' House that everything was in by the end of March. We know that a time factor is involved. The noble Baroness clearly does not expect me to give a firm response today. However, I can say that the Government recognise that this is something which calls for action in one form or another, and I do assure the noble Baroness that we understand all the implications and all the need for action in terms of time.
Baroness Platt of Writtle: My Lords, I thank my noble friend the Minister for that statement. I will take his advice and study the leaflet which he says is in the Library in order to see what this means for local government. It sounds to me as though it will mean that responsible local government will have a difficult task in carrying out its statutory duty, with yet a further reduction in grant. May I ask my noble friend the Minister whether the Government will pay particular regard to the needs of those low spending local authorities who over many years have followed the present Government's policy of reducing public expenditure, and also whether they will pay particular regard to the economies which have been made in the past when they set rate support grants, grant-related expenditure allocations and targets so that their decision will be fair to the ratepayers of those authorities?
Lord Bellwin: My Lords, I understand the concern of my noble friend and I share it with her. That is why I advise a careful re-reading and study of the Statement,
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because it refers to two basic rules which differentiate between the two categories of authorities; those which are budgeting to meet their targets and those which are not.
Lord Northfield: May I—
Earl Ferrers: My Lords, we have been on the Statement for 31 minutes. It would probably be appropriate to move on, since my noble friend has given fairly full answers. Perhaps the noble Lord, Lord Northfield, would put his question as succinctly as possible.
Lord Northfield: My Lords, may I follow up what was said by the noble Baroness opposite? Can the Minister offer some advice and perhaps some reassurance to those authorities which have met the targets set by Government and done their best but who now find, as the noble Lord knows very well, that, although they would like to get on with a lot of capital expenditure because they have capital available, they are deterred from that capital expenditure because of the revenue consequences? That is the point which is very worrying to a number of authorities which have done their best to play along with the Government rules. Can the noble Lord offer some advice and reassurance to those authorities?
Lord Bellwin: My Lords, it would depend upon the kind of capital spending that was involved. There are certain categories of capital spending which do not have the same revenue implications as others. As the noble Lord, Lord Northfield, knows very well, if one spends money on the rehabilitation of houses and so on, something which everybody ought to be doing if they are not already doing so, clearly there are not the same revenue implications as there are if one builds a sports hall which may involve all kinds of on-going debt charges, and also servicing. The noble Lord knows that in the capital field, especially where capital receipts are concerned, the Government hope that local authorities will use them to help the construction industry. It gives employment, and we are very much in favour of that. However, I must be frank and say that the noble Lord, Lord Northfield, has a point: there can be capital spending, in addition to that which I have just mentioned, which is very desirable but which will have revenue consequences, which in the longer term can be a burden. There is no other answer except to say that an authority has to look at its own situation and take into account what it can afford to do. That is the only advice I can give on that point.
Lord Leatherland: My Lords, might I ask a procedural question?
Lord Harmar-Nicholls: My Lords, is my noble friend aware—
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, I see that both noble Lords wish to speak but we are in fact in the middle of a defence debate for which there are 24 speakers, and so far we have heard three. We have had 33 minutes on this Statement and, although I would

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not wish to truncate questions from any noble Lords, I believe, from the point of view of the debate as a whole and for the other Members taking part, that we have given this Statement a fairly full run. I would have thought it would have met the convenience of your Lordships if we were to move on.
Lord Harmar-Nicholls: My Lords, with great respect to my noble friend, may I point out that there have been four questions from the Benches opposite critical to the Government and only one question from this side? I believe that is an imbalance which would not, perhaps, be in keeping with what we would expect when matters such as this are being presented in the form of a Statement. In these circumstances is it not correct to suggest that one more question should be allowed?
Earl Ferrers: My Lords, my noble friend puts one in a difficulty because it is not my intention to weigh up a balance of who has spoken and who has not spoken. The only balance I was trying to weigh up was the one of the length of time taken on this Statement in view of the 24 Members who wish to speak on the major business of the afternoon. With the greatest respect to my noble friend—and I do this with due deference to his parliamentary agility—I would have thought that if he could contain himself on this occasion it would have met with the approval of your Lordships.

The Defence Estimates 1982
4.22 p.m.
Lord Kennet: My Lords, provided the deputy Leader of the House is quite sure that he does not stand in need of the proffered support, let us turn once again to the defence debate.
Many speakers have already said, and more probably will, that these are odd circumstances in which to be discussing a defence White Paper. I do not know how often it has happened, or whether it has ever happened before, that a White Paper has been prepared by a Government, that there has then been a not unimportant war, and that after its successful conclusion the same White Paper has been laid before Parliament without any amendment. Thinking this over I came to the conclusion, which surprised me, that on the whole it probably mattered less than one might have expected it to do. That led me to the next conclusion; that the Falklands war mostly confirmed what we already knew.
It confirmed that our forces were ingenious, obedient and brave. I would like to join with all that has been said in congratulating them on the way in which they carried out their tasks. It confirmed also that our equipment was, as the noble Viscount, Lord Trenchard, has put it, good in the main. It confirmed that our diplomacy was capable of great effectiveness when it is under firm and united control. And it confirmed something that needed little confirmation: that our Government were extremely resolute. What was new was that, on this occasion, it was resolute in pursuit of a cause which had the overwhelming support of the people.
Lessons will be learnt and surprises will come, and I hope that we will look out for one or two points.
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It is obvious that our submarines kept the Argentinian Navy away after the initial phase of the engagement. We should not forget to ask what it was that kept the Argentinian submaries away in the later stages of the engagement, because the answer may be that we should not veer towards either submarine forces or surface forces on this occasion, but keep the ratio.
There is one thing which it seems to me might drop between two stools. We have on the one hand the inquiry into the run-up to the events, and on the other hand the examination of the military findings of this war. Let us not forget the need for someone to look at the financial and commercial lessons. Was the Government's financial and commercial policy towards Argentina handled in what, in retrospect, now looks to be the best way? Somebody should look at this, and I wonder who it should be. That I do not know, but I commend it to the Government.
I imagine also that the inquiry on the military side will reveal all the dangers of the international arms trade under its present degree of control, both international and national—particularly national control. How much of the top rank Argentinian equipment was of British or French origin? How much harm did it do us? In retrospect, what actions would we like to have taken or not to have taken before the war to avoid the harm that it did us? I hope that the inquiry will also note the very great help given to us by France—far outstripping, I believe, any de facto help given to the Argentinians by the sale of this weapon or that. In the help given to us operationally, in helping us to understand the weapons system which they had inadvertently sold to our enemy, and in helping us to defeat the enemy in action, France far more than cancelled out any possible ill-effect of their energetic arms export policy before the conflict began. We shall probably find that there is no reason to stop and tear up everything as regards defence planning, as a result of this war; not because it was a small or unimportant war but because, on the military side, we had not got much wrong in advance. God knows, I am not talking about the diplomatic and political side.
To move away from the Falklands now, it is good once a year to look at the balance of strength between the different things which we and NATO have to do. Sometimes I fear that we are losing sight of why the central front is important to us. It is important because we have always taken for granted that that is where the Russians are most likely to attack. That is only because the Russians are there in very large numbers. The Russians are there in very large numbers—and so are we—because that is where we stopped at the end of the Second World War. It was inconvenient, and it would have been a great conceptual revolution if we had moved the bulk of our defences and deterrent capability away from the central European plain. We have not done it and I am not proposing that we should do it, but we do sometimes get close to a Maginot Line mentality.
We should not lose sight of the fact that one is not likely to be subjected to an attack in the place where one is expecting it. The best way to deter an attack in any given place is to expect it there, of course; but I sometimes wonder whether we have not gone too far towards expecting an attack in central Europe, and

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whether we ought not to look in a more concentrated and light-heeled manner at some of the places where we are not expecting anything at the moment.
Good deterrence involves not simply the ability to respond very strongly at once but, if we are to keep out of a nuclear war, it involves also the ability to re-supply and fight a conventional war of some length, and a conventional war at as low a level as we find possible. The ability to do that already teaches us something about the distribution of effort between the Army and the Navy, and between the Air Force and the Navy, which cannot permit one to regard with any equanimity any sizeable cut in our naval expenditure and deployments.
How often do we discuss the American end of the sea bridge that would be needed if we were fighting a war in order to avoid going nuclear? How often do we discuss the dangers and difficulties of getting all those thousands of ship movements out of the Caribbean, past Cuba, and into European ports which themselves have not been entered or mined by the greatly superior Soviet Navy—greatly superior to any individual European NATO navy? How often do we think about or discuss the colossal superiority in mines and mine-laying ability of the Soviet Union, and the colossally greater vulnerability of this country than the Soviet Union to mine warfare?
If we may go now to the flanks, and particularly to the northern flank, I would remind the House that these contain the only disputed frontier between the Soviet Union and the West. The only disputed frontier between the Soviet Union and the West is the so-called "Grey Zone" in the Barents Sea north of Norway. Not, mark you, the Norwegian Sea—let alone the Atlantic and the North Sea, which we always think about—but the Barents Sea, which is part of the Arctic Ocean round the corner. This is 1,000 miles or more from the Greenland/Iceland/United Kingdom gap which bulks so large in the thoughts of NATO's marine planners.
The White Paper itself, volume 1 of the Estimates, in its account of annual exercises does not mention the exercise sent round the corner into the Barents Sea, the one in which HMS "Glasgow" got into a bit of trouble. I think it fell within the year under review, and I wonder why that is not mentioned along with all the other exercises which are. There is a discrepancy here, I think, between our intense degree of preparedness and our great strength on the central front, and the much lesser strength on the Atlantic bridge and on the northern flank, which may possibly be sending wrong signals to the other side. Let us not forget it.
This is beginning to sound like a Navy lobby speech. It is not meant to. What I am saying are thought out points and no kind of block acceptance of any position, least of all an inter-service position. There sometimes seems to be a kind of slack intellectual band-wagon which tends to think that because the aeroplane has been invented the ship is a thing of the past. Let me put it this way. The Government do not leave the Navy to market forces, and I am sometimes filled with trepidation at the extent to which it leaves the Merchant Marine to the operation of market forces, with all the effects of that on shipbuilding, on ship-fitting, on the training and background of mariners. The inter-
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dependence of the Royal Navy and the Merchant Marine has been very well understood since the days of King Alfred, and I think we would run a danger if we forgot it now, simply because of the arrival of the aeroplane.
The chapter on procurement in the defence White Paper—and I take pleasure in saying this, because I think it is probably the special baby of the noble Viscount, Lord Trenchard—is on all counts the fullest and perhaps the most interesting of all those that are there. It shows to what extent we are paying attention to, and possibly even becoming dependent on, the perceived needs of countries to which we might export arms. I do not need to go over again what we ourselves have suffered from the injudicious export of arms. There are two dangers in this. First, there is the direct effect that we may begin to pay less attention to our own needs if we start to regard all systems as having to be useful to countries with other needs, which we may do, though we are a long way from doing that yet.
The other is the danger of what one might call the cutting of corners on the declassified version, which is something I believe we shall hear more of later, particularly after the Falklands War. If we have a very good system the operational details of which and the management techniques of which are secret, we can sell it safely to another country without enabling that country to know how we work our system simply by changing a few details on it. But it costs quite a good deal to change the details, and so the Government and the arms manufacturers may be under the temptation to cut corners, so that it is not sufficiently altered and does still provide militarily useful intelligence to the other country. We were selling not with blind abandon, but we were selling in a pretty extrovert frame of mind to Argentina. Let us watch that in the future. I would nevertheless commend the new degree of thoroughness which appears in Chapter 4 of the report. Let us hope that in future years all the corresponding chapters of White Papers will be as thorough as that.
In conclusion, I come once again to the old centrepiece of Trident. I have something new to say about that as a matter of fact. I have been very interested to see the extent to which the Government themselves have been saying something new about that each time they return to the charge in successive publications. The costs appear to be escalating. We have seen the latest broadside from Dr. Greenwood. This is only to be expected; costs have always escalated. I would not single out the Trident programme for the generalised attack that I hope at some time to be able to make on all Governments in the past for always getting it wrong with regard to the cost of all sophisticated programmes. They ought to be doing better after 30 years of underestimating by the odd 50 or 80 per cent. Here I do not claim to speak for my party, because we are running after events, like all the Opposition parties. The Government are always ahead. We only see things as they see them after they have been seeing them that way for a year or two, and this leaves us, naturally, somewhat gasping. I make no complaint about it.
I do readily agree that we cannot get the same bang for the buck in the next generation of nuclear forces for this country by any other system than Trident. Consequently, I do not blame the Trident system for being

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an especially expensive one. What I do say is that we do not need that much bang, and we could get less bang for a lower price. Getting less bang would have two advantages; first of all, the lower price, which stands to reason, and, secondly, another one which I would like to go into at somewhat greater length.
Not buying Trident might avoid hooking us forever more on the hurtling speed of the American development juggernaut. We did not really want it. We wanted Trident C4, and we now find we have to have Trident D5, because that is what the Americans are building, and it would be fantastically expensive to buy something from them which they are not building. So we are getting hooked. Generation by generation we remain hooked in the systems field on what the Americans are doing. I look forward to the day when we may become decoupled from that, in what way I am not going to specify at the moment.
There is another thing gravely wrong with Trident. Before I get there, I want to make a short excursion to Moscow and to quote a remark made by Marshal Ustinov, the Soviet Minister of Defence, only a week or two ago. Speaking of the British and French independent nuclear forces, he said:
"These means are part of NATO's military potential. They are targeted on objects in the territory of the Soviet Union and other Socialist countries, and, as the Americans themselves say, are called upon to complement the forward based nuclear means of the USA. We will insist that they he taken into account within the framework of these talks and we have every reason to do so."
"These talks" are the strategic arms reduction talks and/or the intermediate range nuclear force reduction talks.
Let us imagine the day—and it is imaginable—when we do find that we want to talk about the reduction of our independent nuclear forces in an international forum. We have bought Trident, it is there, it is operational. It consists of 514 nuclear warheads; that is, even if the Government stick to their self-denying ordinance of not putting more D5 warheads in it than they could have put C4 warheads in it, which I am sure they will. That is not, as the White Paper says—and here I take direct issue with the White paper—"a small proportion of" Western nuclear forces. It is over 10 per cent. of the number to which President Reagan wishes to reduce American strategic warhead numbers, which is 5,000. Taken together with the French force, it is 25 per cent. of the number to which President Reagan intends and hopes to be able to reduce American forces. One quarter is not a small proportion; it is a very sizeable one. Okay, so let us reduce it in negotiations. But we cannot, we cannot reduce the Trident force in negotiations. That is because to have one boat on station you need four boats. If you have four boats you have 514 total capacity. If you have less than four boats you go for certain periods without one boat on station, and you then have an ineffective deterrent; and the reduction of a deterrent force to ineffective status is not a thing one can do, even for the sake of international goodwill, even for the sake of increased stability, because it would itself decrease stability.
Therefore, I conclude that we should not obtain the Trident force at all, but should obtain some other force which would be less destructive, less accurate if need be, but which could be put in more boats with a greater ability to maintain at least one boat on station,
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and possibly more, after an overall reduction. I think that the point is clear. The Trident force is an undisarmable quantum of deterrent. We must have a disarmable, a reducible, deterrent force.
I conclude by introducing very briefly one more subject, and one only. Will the Government next year please say something in the Defence Statement, or elsewhere, about the renewed arms race in space? That is something upon which we are not ourselves engaged, but it cannot but have a profound effect on our deterrent and, indeed, defensive capabilities The space treaty, as is well known, has more loopholes in it that it has wall; it is more loopholes than wall. There are vast new development possibilities which are being kept secret by both of the super-powers. They refer to them in guarded and rather awestruck terms. I dare say the Government will not be ready to tell us what they are—although I am sure that they know—but will they please make some statement which will help to start a public debate on the possible effects of all this on this country in the future?
I congratulate the Government on having conducted an extremely successful military campaign in a just cause, and I look forward to the day when we are able to conduct our nuclear deterrent affairs in accordance with the dictates of international negotiation and goodwill.
4.42 p.m.
Lord Zuckerman: My Lords, in following the noble Lord, Lord Kennet, I should like to add my tribute, as a one-time civilian member of the planning staff of Combined Operations and also as one who was heavily concerned in the preparations for the Normandy invasion, to the brilliant way in which the Services mounted and executed the operation which came to such a happy end. When I look back over the years, I can hardly conceive that it would have been possible, so speedily, to do what was done. When I think of the days and days that were spent in mounting even a small operation, this was truly a remarkable operation.
I should like also at the outset to apologise to your Lordships if I fail—although I hope to stay to the end of the debate—to hear all that is said. The reason why I put my name down to speak is that I am on record in your Lordships' House as having declared that, if we have the resources to make the change from Polaris to Trident, so be it. I personally do not believe that, regarded purely in terms of deterrent power, the change would make very much difference to the strategic balance. What we have now is adequate and it has been adequate for many, many years. I adhere to that view and I do not want to go into the argument and the reasons why I perhaps depart from the noble Viscount in believing that we are not buying very much more than we have already by going for Trident.
But I want to add a rider. The rider I wish to add is a matter which was referred to by the noble Lord, Lord Kennet, in his speech. If Lord Kennet will allow me to elaborate his point, we find that paragraph 127 of the Statement says:
"We welcome the United States' intention to resume negotiations with the Soviet Union on the reduction of strategic arms"—

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the START negotiations—
"and hope that talks will get under way in the near future"—
which they have done. It continues:
"The United Kingdom's strategic deterrent force cannot feature in these negotiations, which are bilateral between the two superpowers and concern their strategic forces alone".
The right honourable David Owen in another place challenged that observation, and challenged it in somewhat blunter language than is normally used in your Lordships' House. He referred to the matter as nonsense. The noble Lord, Lord Kennet, did not go so far as that. However, what he said is correct. The Russians will not agree with us. I did not know about the quotation to which the noble Lord, Lord Kennet, referred—a quotation apparently picked up only last week from something said by the Russian Minister of Defence. But I did have the opportunity of attending an informal meeting not so long ago in the company of Mr. Robert McNamara—who has returned to this fray—at which there was present an extremely distinguished Russian diplomat on the central executive. He made the point very plain. The USSR is definitely going to take the British strategic deterrent and the French forces into account when it comes to negotiations about numbers of weapons.
Let me go back a bit. Let me go way back to the test ban negotiations, in which I had the privilege to assist the Government of the day. At that time we could not "deliver" the French and that proved a stumbling block to the Prime Minister of the day, Mr. Harold MacMillan. It proved a stumbling block to the President of the United States. Can the Americans deliver us now? That is what I want to know. I hope that, when the noble Viscount comes to wind up the debate, he will tell us whether or not we are truly independent here. Do the Americans agree the statement that our deterrent forces are not to be taken into account in their negotiations? This is an extremely important matter.
Let us say that some of the figures which have been suggested by President Reagan are meaningful, and deep cuts have to be made in the US or USSR strategic forces. Will the Americans not look at our forces? I would very much like to know what the noble Viscount can tell us about that.
In fact, we must ask ourselves whether or not Trident, when assigned to NATO, is a strategic system or a theatre system. When is it one and when is it the other? These anomalies unfortunately apply to so many of the nuclear weapons systems which now exist that I do not believe that any except academic philossophers could really disentangle one category from another.
There is another consideration. As the noble Lord, Lord Kennet, pointed out, we are not going for the C4 but for the Trident 2D5. Does it exist? Do we really know whether is exists? Only this last week Pershing II had its first trial. It was a disastrous trial. I had heard before that maybe this weapon is something which is exquisite on a blue print but which in fact will not operate necessarily in the way in which it is supposed to operate.
Here I mean "operate" in terms of accuracy, which has been referred to several times in debates in your Lordships' House. I personally do not believe that
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it matters at all whether we, the United Kingdom, have an accurate system or an inaccurate system. The notion that the United Kingdom should have a counter-force or a counter-value or a counter-city/system, makes no sense at all strategically. What we have is a deterrent force. We must stick to that deterrent force while nuclear weapons exist.
Viscount Trenchard: My Lords, as the noble Lord may not be able to stay until the end of the debate, I should like to ask him for some clarification so that I may answer his questions later. Is he, in fact, recommending that we maintain the Polaris system through the 1990s and into the next century?
Lord Zuckerman: The answer to that question is, yes, my Lords. I will not go into the technicalities here, but I am prepared to debate them in private with whomsoever the noble Viscount puts up.
In an earlier debate which took place on 9th December 1981—and this point is important so far as what we mean by "deterrent force" is concerned—the noble Earl, Lord Cathcart, made the remark that in controlling escalation we have to ensure that the mechanism of communication exists at the awful moment, meaning that the weapons would be in use. The answer is that it would not. In the same debate the noble Earl, Lord Cork and Orrery, referred to the nuclear weapon as a weapon which could not be used. He said that "it deters and it cannot fail to deter". I think that that is the important point, not whether we have an accurate system or an inaccurate system. It is a system which cannot be used and I could not agree more than I do with that statement of the noble Earl, Lord Cork and Orrery.
Recently there was a most unfortunate leak of a document in the United States. It was a very lengthy document which contained guidelines for a protracted nuclear war. It was leaked by someone in the Pentagon to the New York Times. It was not denied by Mr. Caspar Weinberger, who had to declare that he had endorsed it, although subsequently he withdrew many of the conclusions which people could read into the report. It was, indeed, a report which said that the purpose of the guidance paper was to assure the capacity of the United States to destroy the USSR. Here the noble Viscount, in reading the document, might read some of the words which his very distinguished father said when he started the Royal Air Force:
"to break the will of the enemy to resist, to destroy the enemy's political and military machine",
and so on. The language was practically the language of Foster Dulles, but it ended up, where I first came into the nuclear debate—shortly before I became associated with the noble Lord, Lord Thorneycroft—in "broken back nuclear warfare"—the ridiculous concept of a continuing nuclear war.
This guidance paper was leaked deliberately—I think mischievously—at the moment when the Special Session was about to begin. But it was immediately denounced by General Jones as he stepped down from the position of Chief of the Joint Chiefs in the United States, who joined the company of the noble and gallant Lords, Lord Hill-Norton and Lord Carver, in saying that nuclear weapons cannot be used in field war—

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a view which I have held and expounded over the years on many an occasion.
I refer to this now because I think that we ought to do more than appears to be being done at the moment in following up paragraph 127 of these Estimates. We ought to do far more than welcome the United States intention to bring about a reduction in the levels of armaments. We are in the position now—if we believe that some of the systems about which we are talking will ever materialise—of forcing the Russians into a strategy of launch on warning. If Pershing II, which has so far not shown itself to be a perfect weapon, were ever deployed and then used, there would be eight minutes or so of travel time before some target on USSR soil was struck. There would be no time for enquiries about intent over "hot lines" Presumably the Russians would be forced into a strategy of "launch on warning".
There have been many equipment failures, false alarms and human errors in recent years. The curious thing is that we have been living under such a threat for years. The Russians have never warned us that we are also in danger of a situation in which we might have to launch on warning, because it does not take much time for an SS20, an SS4, or any other missiles which the Russians have, to travel before striking a NATO target in Europe. But the fact that we are now imposing upon the Russians—at any rate on paper—the same sort of threat means that we are multiplying that threat enormously. Our reliance on nuclear weapons so far as the actual defence of Europe is concerned is something which must be examined. It is something which affects the balance of our forces, but I shall not go into that matter because there are others who are far more competent than I am to do so.
What worries me is that some of these weapons systems are impelling us into a situation where we are exchanging human judgment for machine judgment, when what is at stake is the survival of humanity. I prefer human judgment in these matters. Therefore, I believe that there is an absolute need for the INF talks and START to succeed. I should like us to play a bigger part than we have so far. It is fortunate that in her speech to the Special Session the Prime Minister referred to an offer made by Mr. Gromyko with reference to chemical and biological weapons; namely, that the Russians were prepared to allow on-site inspection. If that is true in that field, then we must follow it up. We must not throw away the chance. We threw away the chance once before—we were forced to. The Government of the day would have accepted what Harold Macmillan had succeeded in extracting from Khrushchev, but he could not get away with it because of our allies on the other side of the Atlantic. We now have an opportunity to pick up this torch and so help to reduce the danger of finding ourselves the victims of a launch on warning.
4.57 p.m.
Lord Thorneycroft: My Lords, it is a privilege to follow the noble Lord, Lord Zuckerman. He is right that we served together in the Ministry of Defence, and over the years I have been the recipient of much wisdom and much kindness from him. I am delighted to follow him in the debate. We debate defence, my
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Lords. Defence is really the handmaiden or the servant of foreign policy. I am bound to say that I think that very soon we ought to debate foreign policy, because the foreign policy of the Western Alliance would seem to me to be in considerable disarray, both as regards its relations within itself and as regards a precise understanding of its relations with Russia. If your Lordships have anything so vulgar as "the usual channels", I hope that they will be used to ensure that at least when we return from the Recess some debate upon the basis of this foreign policy can take place. It would be a good foundation for an understanding of defence.
In turning to defence, in the Falkland Islands the Argentines secured surprise. It is about the norm of military enterprises, from Pearl Harbour backwards and forwards. An inquiry will no doubt take place as to whether or not we ought to have been surprised. But whatever happened, the recovery was brilliant and everyone who has spoken has paid tribute to those who participated in it. I should like to pay a tribute to some people who have not perhaps been mentioned; that is, the joint planning staff of the Ministry of Defence. To assemble and transport 8,000 fighting men with their food, their clothing, their medical supplies, water, ammunition, helicopters and weapons is a vast and complicated logistic exercise, and it was brilliantly conceived and brought into effect over a very short space of time.
I was privileged to serve in the Ministry—as was the noble Lord, Lord Zuckerman—with Lord Mountbatten, and I think he would have been delighted to have seen the effective way in which that closely integrated machine turned into action and launched an assault of that character.
The second point I want to make is a point made by General Moore as the Argentine soldiers broke and retreated on Port Stanley. It is that success in war is an attitude of mind. I remember in the wartime planning when I served on General Staff, Plans, watching the planning of Operation Torch. I remember when the presentation was made to General Patton about the landings in West Africa. The staff were explaining how if we landed there we would immediately be thrown out by much heavier forces; the troops would die of disease; water was practically non-existent; the heat was intolerable; the seas were rough; the breakers were so far apart that the landing craft would probably be wrecked and land the poor soldiers and sailors in a sea full of the most horrible forms of shark. Towards the evening, when this had been going on for quite a long time, General Patton was asked if he had any comments to make. He said, "I'm going in. I'm going in with all I've got". Now, war has a lot of that in it.
Winston had it. You remember, on the landings on the Normandy Beaches, "Let the difficulties argue for themselves". I mention these things because though naturally I have not seen it I could pretty well write what the military appreciation would have been before we launched this assault upon the Falkland Islands. The level of theoretical risk at any rate was incredibly high. The distance was great, the numbers insufficient, the enemy courageous, determined, and brilliantly armed. The equipment on our side almost blind as far as long-range airborne radar was concerned.

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The risks were very high. It could have been a disaster. I mention these things—and I think it is right to mention them—because I say that the element of victory in war requires a high degree of courage. Operations of this kind are a high risk performance. Above all they require immensely courageous leadership at the top. We should not exclude from our congratulations those who made it possible in those high places.
The third point I would make is that victory in the Falklands had a far wider effect than the recapture of those islands. For the first time for many years defence in the eyes of the world suddenly became something more than words and more than United Nations resolutions. Defence actually consists of foot soldiers with bayonets and rifles in their hands, and the putting of them there is a difficult and dangerous operation. But this is the moment of truth in defence. Galtieri was surprised. But I think the whole world was surprised. South America was surprised. South America is full of countries on the point of assaulting one another. Moscow was, I have no doubt surprised. But for the first time people saw a degree of determination in defence which they perhaps had not believed could be seen in this country. The word went out as far as we were concerned that this animal was dangerous, and if attacked it was quite possible it might defend itself.
What lessons, then, do we learn? In some ways I do not think that things will be much the same after the Falklands. The lesson that I tended to learn—and I realise that this is perhaps easier for me to say than it is from the Front Bench—was that when the chips are down in this world you are a remarkably lonely person. I do not attack anybody else, or blame them. When the Europeans first came to our aid—I am a rather keen European, anyway—I went round saying, "Look how wonderful it is to see them there. We always said that Europe had a lot of foreign policy in it". I saw all that. They left us after three weeks. I am not saying that they were not very valuable weeks. I am not saying that at all. Three weeks at that time was a long while, and it was a valuable moment to have their support, but is was three weeks only
Then there were the Americans. This was, after all, an open and shut case. Whatever other view one took, the Falkland Islands was naked, unprovoked and open aggression. The United States were an honest broker. Well, it is good to have an honest broker, and it is right for the Government to say how helpful the United States were. I absolutely accept that. But I still say, when it comes to the point, there are not many people round you. I learnt that lesson. I think it is right to say that it happened, and it is right to recognise that there are some lessons to be learned.
How do we apply this scene to the four main areas which the Government face in defence? The first is the deterrent. I remember when I first went to the Department of Defence. I asked for a paper to be written saying whether we needed an independent deterrent. I told the chiefs of staff—and indeed the chief scientific adviser—that I required nothing just because I was a Conservative. I asked them to forget anything that my Government or my party had ever said and face it absolutely cold, because the thing
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was damned expensive and the moral issues were extremely grave.
I asked for that paper. That paper came to me in due course firmly and clearly laying down the case for an independent deterrent. The noble Lord, Lord Zuckerman, was a signatory of that paper. The case was absolutely clear. The Labour Party, at that time under Mr. Harold Wilson, were arguing for de-negotiating the Polaris submarines. But they did not do it. They had the same advice as I did. Eight Governments of all political persuasions had been absolutely clear that an independent nuclear deterrent was necessary for this country. That is far more important a decision than the details of what you have.
So far as the details are concerned, the noble Lord, Lord Kennet, said that they all escalate. I would tell him that the Polaris submarine did not escalate in cost. I think this was mainly because it was under the firm control of the Royal Navy. What I would say about the choice of deterrent is that I do not presume to know enough to judge it. I can argue, because it is a great moral issue and a great defensive issue, that we must have an independent nuclear deterrent, but when it comes to the point of choice I think that there are some things that the chiefs of staff and the chief scientific adviser of the day are entitled to advise about. If they advise me that the Trident is the right weapon, I have a strong suspicion that they are more likely to be right than I am or even, with great respect, Lord Kennet, or even perhaps my old friend Lord Zuckerman. Therefore, I tend to go along with them.
Lord Gladwyn: My Lords, would the noble Lord allow me to intervene? I think few people here would deny that it is desirable to have some kind of—not necessarily independent—nuclear deterrent in order to deter the use of nuclear weapons against this country. The real question is, however, do you believe that this deterrent, so-called, could ever be used on a first strike?
Lord Thorneycroft: My Lords, one of the horrors of the nuclear deterrent is the immense and, to my mind, dangerous confusion into which people drift by trying to analyse exactly when nuclear deterrents will be used. The moment you start in that direction you get into the most desperate trouble, and I shall not, therefore, be tempted along such delicious paths by the noble Lord. One of the great things about a deterrent is that nobody quite knows when it might be used, and as a result people are much more careful than they would be otherwise. I prefer to have deterrents as deterrents, not spelling out to potential enemies and aggressors just what mischief they can get up to without the danger of anything going off. A deterrent should be a deterrent.
I return, therefore, to Europe. There is a group of people, with some Conservatives among them, who say that we should withdraw the Army from Europe. We withdrew the "Endurance" from the South Atlantic, and we shall probably be criticised by the inquiry for doing so. It may have been imprudent to do so, but it would not be as mad as withdrawing the British Army from Europe. That would be criminal negligence and I very much hope nobody will

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pursue that line. The Secretary of State was right in his article in The Times today when he said the front line of British defence is in Germany. I believe we should support that. What would be the view of our allies—our very brave allies, I should say, although I have criticised some of their policies; the Americans have many more troops in Europe than we have—if we were to withdraw our troops? It might tend to start a withdrawal on a somewhat larger scale. So we stay in Europe.
Thirdly, the defence of this island. In the final analysis, the defence of a nation depends on the courage and determination of the people who live in it. I believe that is more than nuclear deterrents, more than the Royal Navy, the Air Force or anything else. I welcome the existence of, for example, the Territorial Army and the new Home Service units, but personally I should be happy to see every man in this country taught to bear arms. The Treasury hate the cost of it and the Army think it is an awful bore, and, I am not saying we must have conscription on the scale of when we were sending troops to Korea. We do not need to do that. But I say that serious attention should be given to actual training to carry arms on a national scale. We live in a much more dangerous world than some people are disposed to imagine.
Finally, outside NATO. We have demonstrated that we can do the job. I am not frightfully impressed by the story, emanating I think from Naval sources, that if only Galtieri had waited a year or two we should have dismembered the Royal Navy and he could have got in. I do not find that impressive. On the plans as they are set out, it is perfectly clear, first, that we are spending far more money in real terms—far more than I or the noble Lord, Lord Zuckerman, ever spent in our time—and, secondly, that we shall have in four or five years' time a Navy of immense strength, that we intend to have one, and that we shall be able then to carry out an exercise there, if we have to—pray God we shall not—just as effectively as we can today. Those are the various roles. I do not think we have anything to apologise about. We were challenged and we stood and fought and won. We have demonstrated our courage, our strength, our planning ability and our guts, and we are respected by the world.
5.15 p.m.
Lord Brockway: My Lords, I suppose it was inevitable that we should have had from the noble Viscount, Lord Trenchard, in opening the debate the speech he made, and that many subsequent speeches have dealt mostly with the consequences on defence of the recent Falklands crisis. I wish to follow, without his authority, the speech which the noble Lord, Lord Zuckerman, made, which dealt with rather more fundamental problems.
It should be realised that the Labour Party is totally opposed to the policy on defence of the present Government. It has made that clear not only in the decisions of its annual conferences—the decisions of the executive of the party—but in statements of the leadership of the party. We are opposed to Trident, to the retention of Polaris, to cruise missiles, to nuclear weapons in this country and to the maintenance here of foreign, United States, bases. That is the policy of the Labour
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Party so far as this country is concerned. Internationally, we stand for the recommendations which were made by the First United Nations Special Session on Disarmament, and to those I shall refer later.
In criticism of Labour policy which I have described, it is often dismissed as unilateralist. In the world today, it is no longer unilaterist. Canada, with certain reservations, has decided to have no nuclear weapons, and the same applies to Finland, Sweden, Norway, Denmark, Spain, Greece, India and Japan. All have decided to have no nuclear weapons. One of the most significant facts today in the development of the idea of regions which shall be non-nuclear weapons zones. Consider, for example, the proposal for the Nordic area. At the moment it is temporarily postponed because of the defeat of the Labour Government in Norway, but it will come again. We have the assurance of the leader of the Labour Party that, if that proposal for a non-nuclear zone in Northern Europe proceeds, a Labour Government would join it.
We have the situation in the Balkans, where the Greek Government are now approaching neighbouring Governments for an area nuclear-free zone, and two Communist countries, Bulgaria and Romania, have agreed to join it. We have the Olof Palme Report proposing a great area in central Europe which shall be free from nuclear weapons, a report signed even by a Soviet General. In this situation we are not living in reality if we do not understand the changes which are taking place in thought and action all over the world.
I wish tonight to urge an alternative to the defence policy of Her Majesty's Government. It is 75 years since I delivered my first speech on disarmament and peace in Finsbury Town Hall. Those of us who then urged disarmament were dismissed as idealists, Utopians, impossibilists, and the history of subsequent years—the two World Wars—suggested that there was truth in that charge against us. But, my Lords, disarmament has now become realistic politics. It became that four years ago at the First United Nations Special Session on Disarmament. There the leaders of 149 Governments—including those of America, the Soviet Union, Great Britain, China, and France—unanimously adopted a Final Act which made four major recommendations.
The first recommendation was the ending of all nuclear weapons and weapons of mass destruction. The second was the phased abolition over years of conventional weapons, leading to the third recommendation: general and complete disarmament, except weapons necessary for internal security and as contributions to United Nations peace-keeping forces. The fourth recommendation was the transference of the billions of pounds that are now spent on military equipment, to be directed instead to ending poverty in the world. Those recommendations were endorsed by all the Governments of the world.
They appointed a committee to meet in Geneva to discuss the recommendations in detail and to make further recommendations to the second session, which has recently been held. The Geneva committee proposed that the recommendations should be carried out in three stages. Two of the stages, each over a period of five years, were to be devoted to ending nuclear

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weapons and weapons of mass destruction, and then to the phased ending of conventional weapons. The third stage, indefinite in duration, would be concerned with carrying out what had been left over from the two first stages, and then moving on to general and complete disarmament. That proposal, supported by a large majority on the committee at Geneva, went before the second session a few weeks ago.
The result of the second session is politically disappointing. I assert that it is disappointing largely because of the attitude of the super powers—for instance, the attitude of the Soviet Union, largely making it a propaganda occasion. But even more responsible for the disappointment were the Governments of the United States of America and of this country. They rejected the plan for disarmament in the three stages. The Government of this country in particular urged that present negotiations should go on and they insisted on the effectiveness of the nuclear deterrent. So far as the present negotiations between bilateral nations, and sometimes a few multilateral nations, are concerned, they have gone on for eight years. Now there is at least a hope that the Vienna negotiations may bring about some results, but even so they are limited to particular issues. There is no plan for general disarmament.
As for the argument that the nuclear deterrent is a safeguard against war, with no war for 46 years, I would point out that during that period arms have increased enormously in the world. They have become infinitely more destructive, and at the end of it détente is today in danger of being destroyed and the international situation is worse than ever. The possibilities of nuclear war have greatly increased because of the idea of a limited nuclear war.
I want to conclude by saying that, despite the disappointment of the second session, it produced the greatly encouraging fact that, except for the small group of the super-powers, which prevented it from coming to a conclusion, the great majority of delegates were in favour of action for peace. In the world today there is a movement for peace such as there has never been before. It is very strong in this country, even stronger in Western Europe. It is now sweeping America, and is extending to Japan, Australia, and New Zealand. It is strong even in the Communist countries, where agreement has been reached upon a common peace programme between East and West. There is, too, the attitude of the unaligned nations, giving leadership both in the Geneva committee and in the second session in New York.
The movement for peace in the world and for disarmament is now becoming a greater force internationally than the present temporary attitudes of Governments. I have been engaged in politics for 75 years. I have never known a movement such as this all over the world. I believe that within 10 years the movement to end nuclear weapons and weapons of mass destruction, to bring, about the beginning of world disarmament and to transfer the resources to ending poverty in the world, will succeed. I am confident that it will.
5.28 p.m.
Lord Chalfont: My Lords, I am afraid that I must
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ask the House to return to the real, cold world. The dreamlike qualities of some of the propositions that we have just heard, can, I think, be summed up in the reference to nuclear-free zones. When we speak of nuclear-free zones—Nordic nuclear-free zones, Balkan nuclear-free zones, Central European nuclear-free zones—it is not a question of whether the Greeks, or the Norwegians, or Mr. Olof Palme observe them; it is a question of whether the Soviet Union will observe them, and I think that recent history has given us no confidence that that would be so. It seems to me that the nuclear-free zone of the kind that the noble Lord, Lord Brockway, has outlined is about as realistic as a nuclear-free zone in Warrington, or Chertsey, or South Glamorgan. I do not believe that it is in the realm of real politics at all.
To come back to the question of the Defence White Paper, I must say that I find myself in total agreement with its proposition that the Falkland Islands episode must not obscure the real nature of the threat to our security—and I now quote from the addendum to the White Paper. I find myself in total agreement with that proposition. The Falkland Islands episode was a brave, brilliant and bold adventure, and if, as the noble Lord, Lord Mayhew, has suggested, its success owed a little to luck, that luck would have been as nothing without the remarkable performance of our fighting men and those who planned and led their operations. But as I have said, and as many other noble Lords have said, there has been no change in the threat because of what happened in the Falkland Islands, and if the Defence White Paper was right before the operations in the South Atlantic then it is right today. Conversely, of course, it has to be said that if it was wrong before the Falkland Islands operation then it is still wrong today.
In my own judgment, for what that is worth, I believe this Defence Statement, as indeed was the previous one, is on the whole intelligently conceived and convincingly presented; and certainly the noble Viscount, Lord Trenchard, put it forward in a convincing and lucid way to your Lordships' House this afternoon. I have only one reservation about the White Paper, but it is a crucially important one. It is that the White Paper (and, indeed, it has been so of White Papers for several years now) has been based on strategic and military thinking which is rapidly becoming unrealistic and indefensible, and even possibly dangerous. I think the principal weakness in the patterns of thought behind the White Paper lies in the emphasis on nuclear weapons. I know, of course, that this emphasis is reflected in many of the so-called peace movements of which we heard so much a few moments ago. They, too, are obsessed with nuclear weapons, and seem, in their obsession, to ignore the equal dangers of conventional warfare, and even to be prepared to ignore the possibility of enslavement by totalitarian régimes.
I think this obsession was also reflected in last night's rather strange BBC exercise in sensational journalism, which dramatised all the familiar terrors and effects of nuclear warfare without very much in the way of informed discussion about how best to prevent that nuclear warfare taking place. But I think it is not entirely surprising that, faced with the growth of massive stock-piles of nuclear weapons in the world,

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a very real fear has grown up among many millions of people about the implications of nuclear war. It is, of course, true to say that that fear is being ruthlessly exploited not only inside this country but outside it as well. Nevertheless, the fear exists; and the paradox and tragedy of this seems to me to be—and this is my main proposition this evening—that the policies which provide the target for these armies of protest and the pretext for these exaggerated fears are really no longer essential to the real security of the West, and I should like for just a few minutes to look a little further into the future than the White Paper is able to do.
Western strategy (and British defence policy, which naturally springs from it) is based upon two pillars: strategic nuclear deterrence, on the one hand, and, on the other, in the event that that deterrence should fail, a defensive policy or doctrine known as flexible response, which includes the possible first use of nuclear weapons against a Soviet attack. To take the first of these, strategic deterrence, it seems to me that there is a very grave danger that this is getting out of control. We now hear far too much talk, even among people who one would take to be responsible, of war-winning nuclear stategies, of pre-emptive and disarming attacks, of limited nuclear war and of surgical nuclear strikes. All this, I think, springs from the nature of modern nuclear weapons; and I do not believe it is necessary to be a member of CND to say that there is absolutely no certainty that nuclear war can ever be limited or controlled.
I believe that most people would agree that nuclear warfare is totally unthinkable as a sane military operation with any rational political objective. I believe, therefore, that we need now to get away from this dangerous trend towards the war-winning doctrine, the idea that you can fight and win a nuclear war, and to return, as has already been said in this House today, to the principle of minimum deterrence—a situation which used to exist but which is in danger of being eroded, in which both sides are deterred from using their own nuclear weapons by the threat of instant retaliation.
For this, as the noble Lord, Lord Zuckerman, has pointed out, we do not need increasingly sophisticated systems or massive increases in the number of our warheads or missiles, or increased penetration or increased accuracy. We need none of that to maintain a posture of stable minimum deterrence. What we need, in my view very urgenty now, is agreement between the major nuclear powers—an agreement which, of course, must be adequately verified and proof against any deception or cheating. The strategic arms reduction talks now taking place between the United States and the Soviet Union may lead to this, but it will only happen if both sides are prepared to lay aside the larger lunacy of believing that a nuclear war can actually be fought and won in any real sense of the word.
Let me say at this juncture, in order to make my position clear, that I do not believe that in the current state of confrontation in the world nuclear weapons can be or should be totally abandoned. To do that would simply be to place the world, and the West especially, including this country, at the mercy of that country with the most powerful conventional forces—and we know quite well who that is. But I believe that our nuclear strategies have to be based on a very
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cold and sombre appreciation of the limitations of nuclear weapons, and the realisation that they are not weapons of war. Furthermore—and this is perhaps one way in which last night's BBC film had an impact—we must be aware of the appalling implications of failing in our posture of deterrence. I believe that here my thinking will converge with that of other noble Lords in believing that if we take that posture seriously, and if we take seriously the possibility of a freeze and a reduction in the vast stockpiles of nuclear weapons in the world, the Government may want to have second, third or even fourth thoughts about the decision to acquire the Trident missile.
The second pillar of flexible response, if deterrence should fail, is based upon the theory that an overwhelming Russian conventional attack, if it happened, could be contained by the first use of so-called battlefield or so-called theatre nuclear weapons. I have never believed this to be a valid concept. I know of no way of controlling the escalation of nuclear weapons. I know of no way of fighting a nuclear war by predetermined and pre-agreed Queensbury Rules. I believe that the doctrine of flexible response has always been based upon an intellectual and logical fallacy. But that fallacy is now underlined and reinforced by the appalling and significant increase in the destructive power, and the sheer size of the stockpiles, of nuclear weapons in the world.
Again, I must make a position clear. I do not believe in what is called a declaration of no first use. I do not believe that we should say to the Soviet Union, "We will never be the first to use nuclear weapons". It is all very well for the Soviet Union to do that; they know they are not about to be attacked by the West, and they know that they have an overwhelming superiority of conventional forces if they are. But I believe that if we were to make that declaration it would remove from the mind of our great potential enemy an uncertainty which in my view should not be removed.
However, it is possible—and this is the much more logical step to take—to evolve a defensive strategy which removes the need for us to be the first to use nuclear weapons, irrespective of whatever declaration is made beforehand. To do this, we are going to have to pay far more attention to the revolution that is taking place in modern technology; and let no one believe (if they ever thought it so) that the quite astonishing revolution in electronics and other modern technology has by-passed the armed forces and the nuclear engineers. It has not. We now have a family, a generation, of precision weapons, many of them with terminally-guided warheads of immense accuracy and immense destructive power, not nuclear but conventional. We have laser communications, we have electronic censors, surveillance drones and surveillance satellites; we have electronic communications of immense sophistication and we have intelligence-gathering techniques of a kind that would have been beyond the imagination of those of us who used such techniques in the Second World War.
The whole point of this extraordinary revolution in military technology is that it gives us three things that we have probably not had before in confrontations with the Russians in Central Europe. First, it gives us the opportunity and ability to ensure an early warn-

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ing of almost any attack that the Soviet Union could mount. This is a quite recent development. Until quite recently it was possible, as Alexander Haig said, for the Soviet Union to mount an attack on Western Europe with the forces in place. With the modern technology available to our forces in Europe, that is, in my view, no longer possible or, at least, to put it perhaps more conservatively, it is extremely unlikely that that could happen.
The second thing which modern technology gives us is the ability to defeat a Russian attack, in spite of its overwhelming numerical superiority, without the imperative need to resort to the early use of nuclear weapons. Finally, what it does—and this is extremely important in the political sense, as many noble Lords who have engaged in political negotiations with the Warsaw Pact countries and with our own allies would agree—is that it conveys to us the ability to attack the Soviet Union in what are called its second and third echelons; that is to say, not necessarily to attack the Soviet forces on the territory of our allies, but to attack them far back, to use battlefields of our own choosing and not of theirs.
I believe that if we are prepared to create what I would call a non-nuclear deterrent, a conventional deterrent, which would enable us to rely far less upon nuclear weapons, we would also have to do a number of other things. It may be necessary—indeed, it would be so—entirely to abandon the doctrine of flexible response. We would have to be placed in a position in which, if we were attacked and we held up the attack without resort to nuclear weapons and those weapons were then used by the Soviet Union, our reaction may have to be a direct attack upon the mainland of the Soviet Union and not upon the battlefield or within the operational theatre itself.
It may be necessary also—and here I come to something which was referred to by the right honourable gentlemen the Defence Secreatry in The Times newspaper yesterday—to reconsider the whole doctrine of the forward defence of Europe. None of these things is engraved in marble. They must all be subject to constant reappraisal.
My Lords, I believe, in sum, that what we should be looking forward to now in the White Papers that are to come is the abandonment of any pretension, any belief, that nuclear warfare can be fought and won. We must return to the concept of minimum, stable deterrence based upon what used to be called mutual assured destruction; and this may have a very considerable effect upon our thinking, not only in the West but in this country, about the kind of procurement policies that we adopt in the next 15 or 20 years.
Secondly, I believe that we should abandon now for all time what has been (in my view always) the fallacy of flexible response, the belief that you can have some kind of cosy nuclear exchange in Western Europe without bringing in the strategic nuclear striking forces of the super-powers. We shall have a new Defence Statement in less than a year from now and we shall have another a year after that. I believe that between now and then there has to be some new and original thinking about nuclear weapons and defence policies. Otherwise, it seems to me that, inexorably and inevitably, we shall be left with the choice between two
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dangerous fallacies. One that says that a nuclear war is thinkable, that it can be fought and that it can be won, and, on the other hand, the equally dangerous fallacy that the only way to prevent a nuclear war is by unilateral disarmament, neutralism, nuclear free zones and constant surrender to international blackmail.
My Lords, I believe that it is the duty of all intelligent, thoughtful and responsible people—and this applies perhaps more especially and more immediately today to those in Government—to ensure that we are not left at the mercy of these two dangerous heresies.
5.47 p.m.
Lord Beloff: My Lords, we have listened with an interest unusual, I think, in our rather frequent defence debates to the last speech, which has done what is rare in these debates—set our minds moving along new paths of thought, in this case contrasting with those who, after 75 years of rehearsing it, can only make the same speech again. I have to begin, I am afraid, by apologising to the noble Viscount who is to wind up the debate for the fact that I shall be unable to stay to the end, having thought that this debate was to be held on another occasion. My regret is less because I suspect that, when I come to read the noble Viscount's speech in Hansard, he will have very few surprises for me.
What I do regret is that I shall not be here to hear the speech of the noble Lord, Lord Brooks of Tremorfa, because it seems to me that he has been put in something of a difficulty by the speech of his noble friend Lord Brockway, who was speaking not, as he assured us, in his own name, but in the name of the party represented by the Front Bench opposite. I think that we are entitled to know whether this is an accurate picture or what the country should expect, supposing the fortunes of politics were reversed and the noble Lord, Lord Brooks of Tremorfa, were to find himself the Government spokesman on defence in this House in a year or two's time.
It seemed to me that the speech of the noble Lord, Lord Brockway, went far beyond the question of Trident versus Polaris or even of a British independent deterrent. By suggesting the removal of American forces from this country, it amounted to destroying the basis of the NATO Alliance upon which one believed there was at least a large common measure of agreement. It is unthinkable. One might have new forms of political combination but that the NATO we have known and lived with and seen as the core of our defence could continue to exist if we, as one member, unilaterally took the view that we wished the armed forces of its most important member to play no direct part in our defence or in deterring our enemies, seems to me to be an even wilder fantasy than a nuclear-free zone in the north which does not include the Kola peninsula, which has one of the largest concentrations of nuclear weapons in the world.
I was much taken with—and I should like if I may to endorse this strongly—the suggestion of my noble friend Lord Thorneycroft that it is important (and what I have said perhaps accentuates that it is important) that we should have a general debate upon foreign policy on some future occasion. It seems to me that he is perfectly right in saying that in all

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our debates upon defence we have to make assumptions about what it is we are defending and for what it is that we keep defence forces. It is more complicated than that. Remembering my schoolboy mechanics, defence policy is the product of what was I think called a quadrilateral of forces. That is to say, it is composed, first, of the foreign policy; secondly, of the technical development of weapons of war at any particular time and one's forecast of what that development is likely to lead to, which is even more important. Thirdly, there is the element of cost, what the country is prepared to contribute, either in money or, equally important, in the time of its citizens, in manpower. The fourth element, which was referred to by the noble Lord, Lord Chalfont, is the element of public opinion.
All these four elements go together. None of them is wholly independent of the other and it is this which gives these debates their exceptional complexity. Let me give some illustration: there is, I think, general agreement—I am not sure in his absence whether the noble Lord, Lord Brockway, would agree even with this—that the defence of the home islands is something which we 'should all like to see effected. No one in this House would wish to see us being subjected to an occupying power may be even less pleasant than the Argentines proved in the Falklands. Most of us believe that we have obligations to our allies, as we believe that our allies have obligations to us and that our forces should take into account these reciprocal obligations.
It was suggested by the noble Lord, Lord Mayhew, that one need not go beyond this—because his idea of alliance forces out of the NATO area was a kind of extension of NATO—to, as it were, further episodes of the Falklands kind and that we ought to eliminate from our thinking the possibility of British forces being used on their own in any but the extreme emergency of the defence of the home islands. That is a plausible but dangerous argument. It is plausible because if it now were the case that Britain had no overseas responsibilities, it would be a nicer position to be in than the position we find ourselves in.
Not only do we have varying degrees of responsibility outside the NATO area, but as has been demonstrated—and this is one of the lessons that has been drawn from the Falklands campaign—the noble Lord, Lord Mayhew, could not rely on public opinion supporting the abandonment of these obligations. It might have been possible to negotiate the transfer of the Falklands Islands to someone else's sovereignty a year ago, three years ago or five years ago. Perhaps the inquiry will tell us how near we got to it. But it is surely very difficult now to say that public opinion would accept this, and, if public opinion would not accept it, then it has implications for our defence forces which have already been made plain.
No one could possibly disagree with the statement which the noble Viscount who spoke for the Government made, not for the first time in this House, that we face the appalling costs of the actual advance in the cost of each new generation of weapons. Many of them by now have come to a level of sophistication and therefore of cost which the laymen among us can scarcely appreciate. It is just over 40 years since I was taught to read Morse code off a lamp. That is
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a technique which I think was probably first developed in the Crimean War. I appreciate that signalling has gone some distance since that time. I suspect that what is true of signalling is true in every other area. This has very important consequences not only—alas!—for the total amount of defence expenditure, but for the detailed decisions as to where that expenditure should fall.
There is in all countries—and notably in this country with the priority which we have always given to the Treasury in our governmental arrangements—a tendency for these who fix the overall sums available also to expect a say in how that money should be divided up. In the past this has not always produced the most desirable result. The Treasury might be described—perhaps has been described—as the greatest collection of very intelligent ignoramuses ever collected under a single roof.
It is very important that we should be assured—and I hope that, when the antecedents of the Falklands campaign and the campaign itself are investigated, we shall be assured—that anything which has happened which has put the lives of our servicemen in mortal danger was due to a genuine technical miscalculation and not to an enforced economy at their expense. If that has not been the rule in the past, then I hope that the noble Lord the Minister can assure us that it will be from now on: that we shall never send sailors to sea in ships which have anything less than the very best of defensive equipment that it is within the power of man to design. That is a rather important area which we shall have to look at.
It also affects the choice of when you do things. I agree with my noble friend Lord Thorneycroft that there would be serious political—perhaps fatal—dangers in a major reduction in our land forces on the Continent. On the other hand, perfectly serious arguments have been advanced for a more economic method of maintaining them by bringing some of them home, by having home-based families, and so on. The arguments are familiar.
In his article in The Times, the Secretary of State pointed out that one disadvantage of doing this was that, although in the long run money would be saved and, if saved, could presumably be spent on other methods of defence, in the short run it would be more expensive because it would require extra buildings and other facilities in this country. However, that seems to me to be a Treasury argument rather than a defence argument. The practical man with no Treasury experience might say, Surely it would be more sensible to spend a little more now in order to reduce costs in the future when, on the showing of the Defence White Paper itself, the costs of Trident, for instance, will be more considerable than they will be in the next few years." Also, those with any vestiges of Keynesian economics still hanging around them might think that the time when the construction industry is particularly depressed might be a better time to make some additions to our military constructions than at a future time when we hope the economy will be going full blast.
Finally—I have referred to this in connection with the views of the noble Lord, Lord Mayhew—there is the question of public opinion running through all our debates: what the country would wish the Government to do and what the country would accept when the

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Government did it. On this occasion I should merely like to say—because the propaganda to which the public is subjected is a matter that has occupied the noble Lord, Lord Chalfont, and myself on other occasions, and no doubt we shall return to it again—that the extreme difficulty of using public opinion as a guide in these matters was illustrated by the successive public opinion polls taken during the Falklands crisis.
In the first, which was taken before there was actual fighting, people said that though they would like the islands to be liberated they would not wish it to be done at the cost of a single serviceman's life. As fighting progressed, the willingness of the public to accept sacrifices—and indeed sacrifices were already being made—altered curiously. So, if you like, public opinion hardened as the conflict advanced and conclusions which might have been drawn from the first poll—that we really must find a way out of the situation and if necessary we must give up the islands because the public would not stand for fighting for them—would have been completely erroneous, as it turned out.
In a democracy, clearly, what people will spend on arms in the last resort and whether they are prepared to see themselves or members of their families in uniform is a decisive factor, but it is malleable—malleable both by those who would not wish us to be defended and by those who can give us the leadership which, in the last few months, thankfully, we have had.
6.5 p.m.
Lord Carver: My Lords, I congratulate the noble Viscount and his right honourable friend the Secretary of State for Defence on their courage and wisdom in sticking their necks out and publishing the Defence White Paper without altering it, immediately after the Falkland Islands operation. I fully endorse what his right honourable friend wrote in the foreword he enclosed with it—that our force structure is adaptable enough to permit an effective and timely response to developments both within and outside the NATO area; that recent events must not obscure the fact that the main threat to our security comes from the nuclear and conventional forces of the Soviet Union and her allies; and that only when the Falkland islands operation has been fully studied will we be in a position to take reasoned and considered decisions on what adjustments may need to be made to the defence programme. I strongly endorse all that.
There are many admirable parts of that Defence White Paper to which I have not time to refer. I must concentrate on the major issues, and one of them in particular concerns the excellent insert on the use of national resources, which the Falkland Islands fully confirmed. I fully support the noble Viscount and his right honourable friend in their determination not to be swept off the course set by their White Paper, Cmnd. 8288, by the waves of post-imperial and naval nostalgia, which appear to have affected significant sections of all political parties and the media. I was delighted to see in the Defence Secretary's own article in The Times that he at least was not being swept away, and he made a very good case why he should not have been. The case that these nostalgia-driven people have made is that had the changes of emphasis for the future naval programme been implemented, we could not have
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carried out the operations that we did; that not only should the reductions in surface vessels proposed have been cancelled and the previous programme restored, but that we should plan to have an even larger surface fleet so that we could "project power" beyond Europe and the Eastern Atlantic even, perhaps, to the extent of reversing the decisions of 15 years ago and getting back into the aircraft carrier business.
The money and the manpower to make this possible, they suggest, is to be found by drastic reductions in our land and air force contributions to NATO, stationed on the Continent, and certainly by making service there unaccompanied. Those who suggest that making service there unaccompanied will by itself make great savings, which could be diverted to the Fleet, overlook the fact that units and individuals would then have to serve for much shorter periods there and at longer intervals. This would entail having larger forces overall, most of them in this country, with all the additional expenditure that would involve, even assuming that we could recruit the numbers required without resort to conscription, which is unlikely. Again, the Secretary of State's article made some very important points in this respect.
However, in the editorial columns of The Times the defence spokesman for the Labour Party in the other place, with whom it appears from his speech that the Leader of his party in this House agrees, as well as all those whose sympathies, whether from the colour of their uniforms or their politics, are dark blue—when these strangely assorted bedfellows are joined by members of the Liberal and Social Democratic parties and I must say I was delighted to hear the noble Lord, Lord Mayhew, show today that he did not agree with them—when all these people put them forward, one must take it seriously.
First, one must ask just what sort of force these people propose: what it is expected to do, where it will operate and what it is going to do when it gets there. The recapture of the Falklands was a special case, and I was glad that the noble Viscount himself said it was almost unique. To say so is in no way to belittle the skill, courage and determination of all those who took part in the operation, tribute to which has rightly been paid from all parts of the House. But a force of that nature might be useful for capturing other islands well away from land-based air forces, and we should ask: Where are they, and what are we trying to capture them for? The Falkland Islands are a long way away, and islands or other objectives in the Indian or Pacific Oceans are even further away.
Several weeks passed between the decision to despatch quite a small force to the Falkland Islands and its arrival. It would have taken much longer if it had been a bit later in the year and paragraph 235 of the Defence White Paper had been implemented. Let me read it to your Lordships:
"This year, in addition to the Royal Navy's patrol of two warships in the Indian Ocean, we plan to deploy a naval task group of five warships and afloat support, headed by HMS 'Invincible', to the Indian Ocean and East Asia for six months."
It was good luck (there has been some talk about "good luck") that the Easter holidays were pending and it had not yet been implemented. As I myself wrote in a letter to The Times, commenting on its curious leader of 21st June, I can think of no other

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defence commitment for which the task force would have been suitable, not even the defence of Belize. To suggest that, in order to provide such forces, we should consider reducing the strength and capability of our land and air force contributions to NATO, stationed on the Continent—or even, as The Times and others have suggested, propose it to our allies—would be a gross distortion of our defence priorities.
There can be no doubt that the overriding priority of our defence is that there should not be another war in Europe and, above all, not a nuclear one. Security against that is provided by the cohesion of the NATO Alliance, the lynchpin of which is the presence of American land and air forces on the Continent. That point, again, was well made by the Secretary of State in his article. An adequate contribution by us, considered adequate not just by ourselves but by both our American and European allies, is an essential element in persuading the United States to maintain its contribution. It has been made all the more essential since France's withdrawal from the formal military structure. To propose, as some do, that Germany should assume an even greater share of responsibility than she now does, would have serious implications for the cohesion of the Alliance and provoke a reaction by the Russians which would defeat the aim of the proposal.
Those who support what the Times called "Strategy in a Silver Sea" suggest that we are conferring some special favour on our European allies by making such a contribution, and that our recent operations in the South Atlantic have earned us the right to be excused it; but it is ourselves, and our own most vital interest, that we are defending and securing by doing all we can to deter war in Europe; and I deprecate the suggestion made by the noble Lord, Lord Mayhew, which I thought was encouraged by the noble Lord, Lord Beloff, that home defence and our contribution to NATO are two separate things. In these days of modern weapons they are one and the same thing. Far from thus reducing NATO's conventional capability on the Continent we should be doing all we can to increase it; so that NATO can confidently abandon its current suicidal dependence on nuclear weapons and on the threat to start a nuclear war in order to try to stave off a conventional defeat brought about by the weakness of NATO's conventional forces; I endorse everything said by the noble Lord, Lord Chalfont, about that.
Of what use will it be to escort convoys of ships across the Atlantic when there are no forces left to supply or reinforce, and our cities are in ruins because failure to provide sufficient forces in being on the Continent has failed to prevent a war and, once it had started, to bring it under control? It is a valid criticism of the programme that was outlined in Cmnd. 8288 that, although it gave greater emphasis to the part played in maritime warfare by long range maritime patrol aircraft and nuclear powered hunter killer submarines, it did not propose to do much to increase their numbers. That, I suggest, should be done by diverting to them some of the resources it is proposed to devote to the Trident programme. That would be the right application of priorities to the naval programme.
The Defence White Paper does not repeat the
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Government's well-worn arguments for maintaining an independent strategic nuclear deterrent, and I will not weary your Lordships by repeating my well-worn ones why they should not. They will be set out in a short book to be published next month which will help to relieve the tedium of the grouse moor and the beach for your Lordships in the Recess. The paper restricts itself to asking whether the possession of it by Britain:
"makes it more or less likely that the Soviet Union would mount a conventional or nuclear attack on us or our NATO allies",
and states:
"There can be no doubt about the answer."
Then, suddenly remembering the existence of American nuclear forces with the phrase:
"This is not to say that the United Kingdom deterrent is a substitute for the American nuclear guarantee,"
it evades the answer that it is neither "more" nor "less" but that it makes no difference. Assuming that it is our independent deterrent which is decisive in deterring a Soviet invasion of Western Europe, the paper contrasts its deterrent value with that of two armoured divisions.
I assume that the Defence Secretary has done his sums and has calculated that the abandonment of Trident could make it possible for us to raise two armoured divisions and station them in Germany. Many people would consider the addition of two British armoured divisions to NATO's central front as a very significant increment to the conventional deterrent, while they would regard our Trident force as being superfluous to the American deterrent. Once more the paper trots out the argument that Trident will cost less than the Tornado programme; but the latter represents almost the complete re-equipment of the Royal Air Force's strike, reconnaissance and air defence squadrons with aircraft which can be used in a wide variety of roles with great flexibility, while Trident cannot in any sensible sense be used at all. My advice to the noble Viscount is to hold his defence ship steady on course, and not to be blown off it by gusts of dark blue nostalgia which would only land him on the rocks, and to lighten his overloaded vessel by throwing Trident overboard.
Lord Boothby: My Lords, would the noble and gallant Lord agree that it was lack of adequate sea power that brought us nearly to defeat in two world wars?
Lord Carver: My Lords, I would agree with the noble Lord, Lord Boothby, that lack of sea power brought us nearly to the edge of defeat in two world wars, but I would also point out that if we had not been able to defend this country against invasion in 1940 that would have been irrelevant. But I do not believe that in looking to the future we should consider that we are in the period of 1914–18 or 1939–45.
6.16 p.m.
Lord Newall: My Lords, it is a rare honour to follow the noble and gallant Lord, Lord Carver. Far be it from me, a retired captain, to risk a charge of insubordination by crossing swords with a field marshal, so I will not follow him exactly in the realms of higher strategy. My noble friend the Minister has in his

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amiable and avuncular way mentioned a lot of things about new equipment, including prefabricated equipment and perhaps helicopters for the Merchant Navy. He has mentioned the Tracked Rapier, Sea Eagle, Tornado and a great many others, many of which are mentioned in the White Paper. I endorse this wholeheartedly. They are admirable advances but I just hope that some of the time-scales will tighten up too, and that we shall not see a great deal of slippage as in the past, so delaying a great many of these new pieces of equipment. The recession has undoubtedly made factories more able to cope with demands and therefore any slippage that occurs may occur at the behest of the Ministry. I hope that that does not happen.
This brings me on to the subject of procurement which the Chief of the Air Staff recently said will certainly need looking at very carefully. Undoubtedly, some companies virtually worked miracles, possibly due to their intense patriotism, and I hope that the way that this was done will be followed through so that some of the enormous delays that we have had in the past will not continue to happen. We must not dwell on the Falkland Islands battles because I am hoping that we will have a debate on this subject later when the report comes out. But inevitably it is difficult not to mention it at all. We must not forget, however, the Eastern forces who are ranged against us in Europe, nor must we forget that 40 per cent. of their budget is devoted to their air power.
This brings me to a subject which I want briefly to mention. I want to talk about two particular things related to the Royal Air Force. Before I mention either of them I feel that it is only right to pay tribute to the largely unsung heroes behind the scenes in the Royal Air Force. Apart from the pilots, the navigators and many other members of crews of aircraft, there were hundreds of men doing extraordinary little jobs, loading stores, maintaining aircraft in appalling conditions and doing dozens of other important jobs, keeping the front-line men in action. All of them deserve our very highest praise.
Regarding the Royal Air Force, the first point is the urgent need of an agile combat fighter. The obvious choice, which has been mentioned already today, is the P.110, and I believe it is probably needed well before the mid-1990s. We have the Tornado in its two main roles, but neither of these roles is completely suitable for air-to-air combat; and we certainly seem to have a lack of depth in our fighters. I am not going to ask my noble friend the Minister to start building hundreds of them tomorrow. Naturally this has proved to be impossible, but I would suggest that there is a chance that he could provide some immediate financial support, giving a chance to build one or two prototypes at a very early stage. We possibly need to use some ingenuity for this. Maybe this is not exactly the right time, but it should be thought about.
As my noble friend will probably remember, when my father was Chief of the Air Staff in 1937, he had a great uphill struggle to get any planes at all built—certainly before the war in 1939. But, although we never had enough, we had some planes built in spite of great Cabinet opposition. Planes on the drawing board do not fly and they cannot be built very quickly,
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but to have at least a prototype, and something that can be seen and improved upon, can ensure that others will be built much more quickly. So I would ask my noble friend seriously to look at the possibility of working out a way of producing some financial support for a prototype of the P.110.
My second question is related to a fairly old problem, which we have been going along with quite reasonably, but, in my opinion, not fast enough. It is a problem that has been highlighted by the Falklands battle. It is air-to-air refuelling. I suggest that some very good value for money could be combined with the availability of planes now, and that we should consider seriously buying some DC.10s, such as Freddie Laker and other airlines, who unfortunately have gone under have had, and which are up for sale at the moment.
I believe that we need some wide-bodied jets to be converted to tankers and I think that the planes are available now. This may have been considered, but I suggest that the cost-effectiveness is far better than any other method. Probably wide-bodied tankers have a range and capacity far greater than the VC.10s or, of course, the ageing Victors, and if we had had some for the Falklands the task of refuelling for those long distances would have been very much easier.
Apart from the Falklands, there are various other military scenarios which spring to mind. I shall not mention them now, but there are many. As I said, although the old Victors and the VC.10s are of great help, they are not sufficient because we need some long-range and large strategic tankers. These planes are on the market and I hope that it is possible for them to be looked at very carefully.
I never speak for very long and I do not intend to do so today. I think that the Falklands have shown the professionalism of our forces and the need for flexibility and adaptability. I hope that we shall use the lessons of battle experience to be more imaginative in our thinking and in our actions, and to be even better prepared for future unforeseen conflicts.
6.23 p.m.
Earl Cathcart: My Lords, the 1982 Statement on the Defence Estimates is a direct and continuing process from last year's statement, and both stem from the statement on defence policy entitled, The Way Forward, which was issued in June 1981 and which so clearly reaffirmed the four main roles of our defence programme. The relevance and importance of these four main roles have in no way been reduced by the operations in the South Atlantic, and I cannot agree with the opinion expressed by the Opposition Front Bench spokesman on defence in the other place in their defence debate on 1st July, when he said that this defence statement which we are debating today is out of date and irrelevant. That there are lessons to be learned and modifications to be made to our ships, our aircraft and our equipment there can be no doubt, but discussion on modifications of this equipment had best wait until all the lessons have been fully analysed and the Minister of Defence has thought fit to report to Parliament.
However, having said that, one must admit that it is not easy to debate defence today, without constantly referring to those recent operations. Before I make any further mention of these operations, I should like

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to add my admiration for the men who planned the operation, for the servicemen and the civilians who mounted the operations from scratch and with such speed, and for the commanders and men who put the operation into successful effect with such courage, skill and devotion.
The defence policy statement The Way Forward, to which I have already referred, contained one simple sentence which was almost overwhelmed by the definition of our main defence roles which came immediately before it in that paragraph. That sentence simply said:
"We must exploit the flexibility of our forces beyond the NATO area so far as our resources permit."
The operations in the South Atlantic well and truly demonstrated the flexibility of our forces. But that sentence also contained the phrase "beyond the NATO area", and I wonder whether the best interests of NATO as a whole, and, indeed, the outer boundaries of the NATO area at sea, can be restricted to the Atlantic north of the Tropic of Cancer.
A theatre of operations on land can be restricted by a major natural obstacle, such as a mountain range like the Alps or the Urals. But at sea no such obstacles exist. The role of NATO's sea power is to maintain the commercial sea lanes for the free world, but who is to say that that task does not extend into the South Atlantic? There is no doubt that Russia, with its global fleet, would in the event of war quickly extend operations beyond what is now regarded as the NATO area. This, therefore, clearly defines the strategic importance of the Falkland Islands for NATO and for the free world, and it is important that we persuade our NATO allies, and the Americans in particular, that this is a fact.
To return to Britain's four main defence roles as defined in The Way Forward, which, as I said, was published in June 1981, they were, first, an independent element of strategic and theatre nuclear forces committed to NATO; secondly, the direct defence of the United Kingdom homeland; thirdly, a major land and air contribution on the European mainland and, fourthly, a major maritime effort in the Eastern Atlantic and the Channel. Those four roles stand unchanged and, if we are going to provide enough men, equipment and money to satisfy each of them to the full, all well and good. But, if we cannot afford to do that and there is a need to prune and economise, then we must reaffirm and redefine the roles in priority of importance, so that we can, if we must, economise on the role which is least vital or which can be performed by some other part of NATO.
It is not an easy thing to do and no two people—certainly, no two of your Lordships—would agree on any such priority list. Personally—and, perhaps, sticking my neck out—I would put the defence of our homeland and our maritime effort as first and second priorities. But, naturally, I also want to maintain what the Minister of Defence described as a credible strategic nuclear capability to deter nuclear blackmail. This is what the noble Lord, Lord Chalfont, called "mutual destruction". Because I think it most undesirable that we should rely solely for this protection on the United States or the French nuclear capability, I strongly support us having our own.
Similarly, I understand that we cannot reduce our front-line commitment to the central front, because
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NATO's strength there has a direct bearing on the security of these islands, and because, if we reduce our strength there, there is nobody else who can fill the gap. There is, however, one aspect of our expenditure where savings might be made—if they have to be—in our defence costs, but which will not necessarily mean any economies in our total national budget. This proposal is to cut what I might call the domestic tail of the British Army of the Rhine, while not reducing the front-line force levels. The noble and gallant Lord, Lord Carver, has referred to this, but he has not given it his blessing. Nevertheless, I am going to be greatly daring and to try to argue for it.
The figures given in The Times article on 1st July which has already been referred to by a number of noble Lords show that the Ministry of Defence owns and maintains 45,000 married quarters in Germany; it educates 28,000 children there and it provides medical cover for perhaps 80,000 wives and children. In addition to that, the British Army of the Rhine employs 25,000 German and local civilians, who are paid in German currency to look after these establishments to a peacetime standard. If The Times is right, the total cost is some £650 million per year. It is these figures in our priorities which need to be looked at very carefully.
I have spent some considerable time looking at Part 2 of our defence estimates and calculating how alternatively the very large sum of £650 million per year might be better spent. I am not going to take up your Lordships' time by giving my views, but recommend it is a useful way of whiling away the time. It is a very fascinating thing to do. I believe that in the British Army of the Rhine there should be an 18-month unaccompanied tour for field units. For continuity, all headquarters and certain key selected units, such as nuclear artillery units, should be permanent and accompanied, with individuals changing over within these headquarters and units for a normal three-year accompanied tour of duty. But all other field units and service supporting units would go unaccompanied for 18 months, the 18-month tour to cover two summers and one winter. Each unit would get block leave at home immediately before embarking and on disembarkation, and one period of leave during the winter. Unit tours would be staggered so that some would be in their first summer while others were in their second.
The Minister of Defence, in his speech on defence on 1st July, said that, in the short-and medium-term it would cost more to house the families in England than to leave them in Germany. The noble Lord, Lord Beloff, mentioned this. I am not proposing any reduction in our operational strength but only in the domestic back-up to those operational troops. It may be that their withdrawal would, in the medium and short term, cost more, but in the long term it would be money well spent. In the event, the money would be spent upon providing houses, barracks and services in this country. It would be money spent in this country. Those employed to carry out this work would be British and not local overseas civilians, paid in foreign currency. I should very much like to know whether the Minister has gone in any detail into the short, unaccompanied tour and whether it is a practical proposition, because I have not seen it mentioned in any White Paper.

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I realise that what I am proposing would not result in an overall saving in national expenditure but simply in a switch from defence costs spent overseas, to national costs spent in this country, against our national home and social services budget, but I believe, reviewed in that light and provided that a balanced plan of force deployment can be achieved, that a considerable and worthwhile saving in defence expenditure would be made, without reducing our front-line effectiveness in the central region.
I turn briefly to this very full and well presented defence statement. It is good to learn that full manning has been achieved both in the Royal Navy and in Army units, in particular in tank crews in the British Army of the Rhine. Similarly, the provision of new equipment in all three services seems to be progressing, albeit in some cases not fast enough. No doubt the recent testing in action of much of this equipment will provide valuable experience, and it is to be hoped that this experience and the necessary modifications will be made full use of.
There is one vital aspect of warfare which was not fully tested in the South Atlantic. That is our antisubmarine capability. At the same time, the power and effectiveness of our modern, nuclear-powered submarines, the SSNs, to impose their will on an enemy fleet was clearly demonstrated. The diagram at Figure 10 in the statement shows that in the Eastern Atlantic alone the Russians have a supremacy of two to one in ocean-going submarines, so it is with some relief that one turns to Figure 1 which shows that we are spending 20 per cent. of our equipment budget on anti-submarine warfare.
Therefore I believe that the statement on defence which we are debating today provides a valuable opportunity to review our strategy, unaltered by the Falkland action, but we must not lose sight of the well-known lessons of defence strategy. We did so in the South Atlantic operation. This was clearly demonstrated, because we relearned that tidy peacetime scenarios, carefully planned and prepared, do not always occur as planned and that, as history has so often taught us, in war the unexpected frequently occurs. We owe our success on this occasion to the flexibility and skill of those who took part.
But the second axiom of defence is the need for deterrence. All too easily we regard deterrence as meaning only nuclear deterrence. For this reason, too many people try to give this essential axiom of defence a bad name. The art of deterrence in defence is no more than the housewife's commonsense code of "a stitch in time saves nine". If, among other recommendations, the advice of the noble Lord, Lord Shackleton, had been implemented by lengthening and improving the airstrip at Port Stanley, our ability to deter would have been greatly enhanced and the security of the Falkland Islands the more easily achieved.
6.37 p.m.
Lord Jenkins of Putney: My Lords, the noble Earl will perhaps forgive me if I do not follow him entirely, except to say that I agree with him very much that there is such a thing as a non-nuclear deterrent. The difference between us is that I hope to see the day when
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the only deterrent we have is a non-nuclear deterrent. Maybe the noble Earl will follow me a little way after in that, if not immediately.
I should like to begin by referring quite briefly to an incident in this Chamber earlier this month when I asked the Government to oppose the American government's decisions to produce an enhanced radiation nuclear warhead and to start a new chemical weapons production programme.
Lord Thomas of Swynnerton: Would the noble Lord give way?
Lord Jenkins of Putney: In a moment. I then asked the Government to emulate the Labour Party by telling President Reagan that such weapons would never be allowed to be stationed in Britain. A Government supporter intervened to say that even to ask such questions was bordering on the subversive. I shall not give his name because he is not present this afternoon and I do not think it would be fair to do so. I was denied on that occasion the opportunity to rebut the charge there and then, but I take this opportunity to refute it now.
The best way I can do that is to demonstrate that such questions, far from being subversive, are desirable and, indeed, essential if patriotism is to mean a care for the true interests of the people of this country and is not to be a flag-waving "Land of Hope and Glory" thing, which is what Dr. Johnson meant when he described patriotism as the last refuge of the scoundrel. There is a good deal of that cheap patriotism about the place just now. There are some who do not seem to know the difference between a phoney sentimentality and a desire that one's country and its people shall reach up to match the challenge of the most dangerous time in the history of mankind. Why did the Labour Party write to President Reagan in these terms?
"In the field of nuclear arms, both the United States and the Soviet Union long ago passed the level of destructive power which might be thought necessary to deter an aggression by the other. Each new weapon or weapon system has served only to increase insecurity and instability and to create wasteful and exorbitant expenditure which has burdened the economies of the United States and the Soviet Union and the world.
"We oppose also the decision of your Administrati n to produce the enhanced radiation nuclear warhead and to start a new chemical weapons production programme. A Labour Government will not permit the stationing of these weapons or of cruise missiles in Britain".
It is very desirable that an official Opposition should state where it stands on these matters and should openly say, "This is our position. This is what we shall seek to do when we come to office". A statement of that position is something that ought to be welcomed by the Government, even if they strongly disagree with it; they should welcome a statement on where the Opposition party stands.
Was that statement which the Labour Party made to President Reagan to subvert relationships between this country and the United States? Of course not. It was to let the growing number of American people who share European anxiety at the march towards a nuclear holocaust know that there are people, and that there is a party here in this country, who are not prepared to be herded meekly towards the destruction of civilisation. Subversion? On the contrary; the true subversion is that of those who would suppress the voice of protest

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and allow humanity to stumble silent and gagged over the brink and into what Lord Mountbatten called the nuclear abyss. Does the noble Lord now wish to intevene?
Lord Thomas of Swynnerton: My Lords, I am grateful to the noble Lord, Lord Jenkins of Putney. I wonder if he did not really mean to say "enhanced radiation weapon" and not "enhanced radiation nuclear weapon"?
Lord Jenkins of Putney: My Lords, I do not think that I would quarrel with the noble Lord on that point. It seems to me that it is a part of the totality of nuclear weapons but I will not quarrel with the verbiage.
There has been in this country and elsewhere a determination to conceal the truth about nuclear war from the mass of the people. An example of that determination was the BBC's refusal to show Peter Watkins' film, "The War Game" which the BBC itself commissioned 16 years ago but which it has never transmitted. More recently, however, there seems to have been a change of attitude. As has already been mentioned in this debate, last night the BBC transmitted its alarming and horrifying programme, "A Guide to Armageddon", on BBC 1. This is to be followed by a fuller exposure of the impossibility of civil defence against nuclear war in any major urban area, on BBC 2 next Friday. "The War Game", which deals with the nuclear disaster in personal and human terms, remains untransmitted.
The Government themselves, in this Statement on the Defence Estimates, speak of the "fearsome potential of nuclear weapons". They then go on to justify what they euphemistically call, and I quote, "modernising the nuclear deterrent". What does this mean? It means spending vast sums of money on Trident II. For what purpose? The purpose is to deter. And what is the nature of that deterrent? It is the possession of the possibility to be able to penetrate any defences which may exist covering Moscow and other cities and, as a result of that penetration, to be able to kill Russian men, women and children by the thousands—or perhaps even by the millions.
I give your noble Lords an assurance that when either of the noble Lords who are now in conversation are speaking to your Lordships in this Chamber, I shall not be in conversation with someone.
Baroness Llewelyn-Davies of Hastoe: Order!
Lord Jenkins of Putney: More recently, my Lords, there has been a change of view in these matters. It seems to me that the "modernisation", as it is called, of nuclear weapons is something which we ought to view very carefully, and we should ask ourselves whether this is the sort of expenditure that is worthwhile in itself—quite apart from the moral consequences of what we are doing. We can already kill every Russian several times over. So what is the necessity of being able to do so even more? In other words—as was suggested by the noble Lord, Lord Chalfont—the effect of this so-called "improvement" in our security is simply to make our own destruction rather more certain. On both sides, the temptation
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to perfect and ultimately to use a first strike weapon is increased by every so-called "improvement" in the accuracy and power of the other side's delivery systems and warheads.
The history of attempts to control, limit or abolish nuclear weapons is a history of defeat. I have been engaged in such attempts from the beginning, so I should know. I make no apology for again drawing attention to the fact that even the manufacture and deployment of a strategic nuclear weapon constitutes a breach of international law. Those laws were a casualty of the last war. Their loss may well end in the destruction of mankind. I have reminded your Lordships before, and will remind you again now, that in 1940 British bomb aimers who could not pinpoint an exact military target were instructed to bring their bombs home or to drop them in the sea. Yet by the end of that war we ourselves—with the example set to us of Rotterdam and Coventry—were creating fire storms in Hamburg, and ours was the atrocity of Dresden—in which we killed men, women and children wholesale and in a way entirely forbidden by the international laws we professed to be upholding.
I believe I have shown your Lordships before this little booklet issued to commissioned officers in the Royal Air Force, and perhaps in the other Services as well, in 1940. It was an Oxford pamphlet on world affairs written by Professor A. L. Goodhart, entitled, What Acts of War are Justified? Who even asks this question in the nuclear age? We have forgotten about the existence of international laws of war, have we not? Now it is assumed that the Soviet Union will as mercilessly maim, burn and kill our people as we shall theirs. But the only nation which has actually killed people with a nuclear weapon are the Americans. We may brush this fact aside but the Russians cannot and will not.
In this little book, Professor Goodhart argues that the immunity of civilians from attack is the basis of civilisation. He says that if this rule is abrogated, civilisation must collapse. He wrote this before the invention of the nuclear weapon but its existence must underline the point. Professor Goodhart quotes The Hague air warfare rules, which provide that civilians not only must not be killed by aerial bombardment but must not even be terrorised. Somebody ought to be told something about that just now. Today, that rule seems to come from an older, saner and more compassionate world. Professor Goodhart concluded his little booklet by writing
"The separation of armies and peaceful inhabitants into two distinct classes is perhaps the greatest triumph of international law. Its effect in mitigating the evils of war has been incalculable".
His last words are:
"It is to re-establish the laws of war in a world threatened with barbarism that this war is being fought".
It seems to me that if that were the whole of the story, that war was fought in vain.
As I said just now, the history of attempts to control, limit or abolish nuclear weapons is a history of defeat. I was on a troopship on 6th August 1945 and joined in the general rejoicing which greeted the thought that we might not have to get killed in Burma after all. After a day or two, however, someone said to me, "They may have saved our lives at the expense of our children's". This thought has remained with me

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throughout the years and its truth has increased with every year.
I now fear that the process may be irreversible and that Western civilisation, perhaps humanity itself, may be doomed. I do not, of course, allow this thought to obsess me. Like everyone else, I act as though the world had a future, talking last week about the Theatre Museum and tomorrow about the Employment Bill. But as today I celebrate my 74th birthday, I know that the probability is that the nuclear holocaust may break out during the next decade. It may not affect me; I may pre-decease my fellow creatures. But the thought that our civilisation seems to be heading inexorably towards extinction is a terrible and a sad one.
I cannot see how, with the increasing instability of the nuclear balance, with the growth in proliferation, with the spread of battlefield weapons, with the apparent ineffectualness of international discussions and international negotiations, with the proneness of humanity to accidents, the outbreak of nuclear war can be deferred for another 10 years. I sincerely hope I am wrong. But the final decade of our millennium seems all too likely to be a final one in every sense of the word, a time of unimaginable horror. It seems all too likely that the year 2000 will find our globe spinning, ruined, lifeless and empty, with no one even to remember or to record the poetry and the music and the real greatness to which we once aspired. Our idiocy may have triumphed over our wisdom, our cruelty over our compassion, and our death over our life.
This Statement on the Defence Estimates is a small contribution to that tragic end of all our hopes. But, my Lords, there is an alternative scenario. There is a third path, which perhaps the noble Lord, Lord Chalfont, indicated, and one which may lead to survival in freedom. On another occasion, if your Lordships will allow me, I will try to map out that path to peace.
Lord Campbell of Alloway: My Lords, before the noble Lord sits down may I, with respect, ask him a question? He poured scorn on patriotism. Does he not believe in patriotism, and if he does not, how can he say, as he has said in your Lordships' House, that he speaks for the party opposite?
Lord Jenkins of Putney: My Lords, I do think that there is a great deal to be said for what I described in my speech as true patriotism, and if the noble Lord will do me the honour of reading tomorrow what I said, I think he will realise that my conception of a true patriotism is the people of our country operating at their highest; and at their best the people of this country function at a level unrivalled throughout the world.
6.54 p.m.
Lord Murton of Lindisfarne: My Lords, I think it would be courteous to wish the noble Lord, Lord Jenkins, many happy returns of the day. I would like to cheer him up, if I may, because I think that was really rather a distressing diatribe for one's birthday. I think the noble Lord does perhaps take the matter rather more seriously and paints a rather more gloomy
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picture than he really believes, for one thing I really cannot doubt is that he would not question the patriotism of this country, and I am sure that, in his own mind, he, who was once on active service, would not wish to denigrate the views and the feelings of our country at this particular time.
My Lords, I should like to paraphrase some of the opening remarks made by the Secretary of State for Defence in another place on 1st July. He referred to one of the three main defence commitments of any British Government being to maintain within the NATO framework a force structure which has the balance and flexibility to enable a firm response to be made to any challenge to British interests worldwide. We are, I know, in the Defence White Paper fairly familiar with those words, and I am sure there are no doubt many who will view the recent armed aggression by the Argentines as an isolated incident, albeit costly in lives and materiel, which is highly unlikely to be repeated, and that the strategic concept of the reduced surface fleet should not be modified in any respect as a result of what has taken place in the South Atlantic. To my view, such thinking could be costly. The unforeseen has often happened before, whether it has been in the form of a major campaign "out of area", such as the war in Korea just over 30 years ago, or the Beira patrol, if I dare mention that, the much more recent patrol in the Gulf, and even the need for a guard ship off Belize. These latter examples may appear trifling compared to the maritime effort which was required for Korea and again more recently for the Falklands, but nevertheless each has individually required the presence of two or more major units, either on station or on standby as relief, and we all know how overstretched the surface fleet has been in recent years even with only those minor roles to contend with.
Surely the Falklands campaign will have reminded the world as well as ourselves of the value of sea power and of the British genius for maritime operations. I am sorry that the noble and gallant Field Marshal, Lord Carver, is not in his place at the moment, because I did think he was rather disparaging in the comments he made, even though he made them semi-humorously, about dark blue nostalgia and those who stand up for the Royal Navy. I myself, although I was a soldier and although I know that there is a distinguished and gallant Admiral of the Fleet who will speak later, would just like to make a few humble remarks in defence of what I believe to be our main role.
I do not think that there is any other nation in the world which could with such rapidity have assembled a task force, fuelled, armed and victualled it, embarked its fighting men, and set out in such a short space of time on a journey of 8,000 miles, all with the prospect of an opposed landing over a beach-head when it arrived. Tributes have been paid by the whole nation to the bravery and steadfast courage of all who took part in the Falklands operations, whether combatant on non-combatant, and we who are here today echo those sentiments.
For myself, I should also like to pay tribute to the superb staff work which was manifest from the very beginning, whether in operations, intelligence, planning or logistics. My noble friend Lord Thorneycroft, very much more eloquently than I, made that point.

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I should also like to pay tribute to those in command and to those subordinate to those commanders at all levels. They were magnificent in their professionalism, both the officers and the men. I think we should not forget that there were also embarked 56 brave women, and that takes a bit of courage too. We truly have reason to be proud of them all.
Before I leave the subject of fighting men and move on to some brief remarks about ships, may I put in a suggestion—and I would prefer to call it a plea—for the widening of the career structure of the Royal Marines? I refer to the eligibility of Royal Marine officers for promotion outside their own small corps to the higher levels of command and staff. In recent years there has been one high appointment in NATO, I think it was AFNORTH, but I know of no other. I do not want to embarrass Major-General Moore, who I know is a modest man, but here is a successful and experienced commander. I am sure that there have been, are, and will be others like him who could be usefully employed in higher command and staff appointments outside their own particular corps.
Now to ships. It was a great relief to read that "Invincible" is, after all, to remain and to be one of three modern, light anti-submarine warfare carriers in the Fleet. This is a triumph of common sense over Treasury influence. Those better versed than I am in naval matters, know that an important major tactical unit for anti-submarine warfare, as these carriers are, should number a minimum of three. My noble friend Lord Glasgow has made that point many times. He talks of threes and fives. We cannot have five but at least we know that we have now got three, and that is a great improvement.
I have also protested more than once in this Chamber about the declared intention to scrap "Endurance". Now, I am glad to note that she has been reprieved. That little ship, in my view, had an importance in the South Atlantic totally disproportionate to her size or to her maintenance costs. I am sure it will be found when history is written about that campaign, that the knowledge that the "Endurance" was leaving, led to the final conviction of the Argentines that Britain's role was to leave the Falklands and not actively to oppose any takeover of them. When I say "leave the Falklands" I mean leave them in the state in which they were.
As it has turned out that little ship and her gallant crew have had what one could almost describe as a private war of their own; firstly, in defence of South Georgia and then in the recapture of some of the dependencies. I believe, incidentally, that her ship's company has now been many months at sea—longer, in fact, than any other. I hope that they will shortly have some home leave which they have so nobly earned.
Another subject about which I have spoken before was the then doubtful future of "Fearless" and "Intrepid". These assault ships have proved their great value in recent operations and it is pleasing to know that they will now be retained in service. In my view it would have been folly to have scrapped them—as was the original intention—or at least to have placed them in standby, because I have a feeling that they are not only of great importance to the northern flank of NATO but also that one could almost say that the future of the Royal Marines as a corps and as an
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amphibious force is virtually dependent upon specialised ships such as these.
Our anxiety now must surely be how long it will take to evaluate the lessons of the Falklands' campaign before replacement orders for lost ships are made. Time in these matters is not on our side. I am told that "Invincible" took 5½ million man hours in design. I do not know who had the ability (or the leisure) to work out that particular statistic, but Jane's Fighting Ships says that she had a long and complex history beginning in 1962. I can well believe it. In fact, she took seven years from the laying down of her keel to commissioning. One of the biggest problems which the Ministry has is the cost of Treasury delay. It is many years now since I was involved in those internal battles and, indeed, in those days of war, as it then was, the Treasury teeth were partially drawn. Notwithstanding that fact, I shall never forget the pitched battles which were fought and in which I was largely engaged at that time, over the planning of the post-war Army. Appropriately enough—and this is an aside and not terribly relevant—my two counterparts in the Treasury were called Mr. Cash and Mr. Care. We were all good friends and both of them reached considerable eminence in the Treasury afterwards, not entirely, I suggest, because of the significance of their names.
Naturally, we all accept the need for Treasury control, but I think that it is unfair to treat "the Treasury " as some sort of third force which is quite separate from Government policy and ministerial decision. After all, the Treasury is only carrying out Cabinet directions. Here, I am sure, there must be issued instructions in unambiguous terms for those who are in charge of this matter of replacing our ships, to get on with it and to replace our losses as quickly as possible.
There were four ships sunk and 12 damaged. Here again is an opportunity for British Shipbuilders to show their paces. I wish to be parochial and to take the Tyne as an example. Here are Smith's Dock Company as ship repairers, and Swan Hunter also have vacant berths. I see that I am getting support from a friend of mine on the other side of the House. Both have vacant berths and both have fine traditions of good workmanship in repair and in construction respectively. The North-East of England badly needs that work and here is a very good opportunity to give it to them. As an aside, I am sure that something will come out of the battle about the replacement of the "Atlantic Conveyor". It really must be built in a British yard. It becomes a question of national pride. I would suggest that if the Government, as reported, have made provision for over £100 million in grants if and when a Japanese car firm decides to start production in the United Kingdom, then surely a suitable compensatory sum can be made available to the British shipping company whose vessel was requisitioned for active service and sunk as the result of that service. On the other hand, I hope that the company concerned who own that vessel will not be too ambitious in the demands which they make for compensation, because to my mind this is a matter, as I have said before, of national pride, and that ship should not be built in Japan, Korea or elsewhere.
Finally, I should like to return to a subject which I have raised before, and that is the question of hull

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design. I understand the reasons for the long hull and narrow beam, one of which is that speed is a function of length. On the other hand, length leads to an increase both in size and in cost. I also understand that the question of stability is much more critical nowadays when the centre of gravity has risen as a result of a reduction in the weight of propulsion units, types of ammunition, computers and so on, on the one hand, and, on the other hand, as a result of the fact that deck and above-deck weapon systems and surface sensors of various types and varying heights have increased.
In spite of these difficulties, I am sure—and I have been told this by a number of people—that there is a case for the shorter and broader-beamed hull as a platform for modern weapons, and I hope that full and adequate study is being made of this subject when it comes to new design. It is worthy of note, as my honourable friend the Member for Ashford has said in another place, that modern ship construction and propulsion units, first-class discipline and efficient damage control saved many lives in the South Atlantic, even though their ships were lost. Mr. Speed has also reminded us of what used to be the disastrous result of a boiler explosion in a destroyer in the last war. Let us, in view of those lessons, build into our new hulls as much safety as we can.
In conclusion, I should like to give a little anecdote from history. Vice-Admiral Lord Collingwood on his infrequent spells of leave at home used to tramp the lanes of his native Northumberland planting acorns in the hedgerows. As he said to those who asked him:
"The Navy will always need oak".
Those were prophetic words. Some of those oaks were felled some 130 years later to provide the knees for wooden minesweepers in the last war. He had no doubts about the supreme importance of a powerful Royal Navy always remaining in being. That is a lesson in foresight which two world wars has justified. The need for a strong Royal Navy has once again been proved by the Falklands campaign. It is a lesson with a moral which we shall disregard at our peril.
7.9 p.m.
Lord Hill-Norton: My Lords, your Lordships would hardly expect me to agree with most of the views expressed by the noble and gallant Lord, Lord Carver. I understand, of course, why he holds those views and why they are shared by all those generals who have been gallumping about in the correspondence columns of the newspapers. Well, as the lady said in the High Court, "They would, would'nt they?". They should instead seek to win by argument instead of by ex parte statements. I will try to put a different case, not through dark blue nostalgia, but out of a genuine desire to see the best defence of our realm within the NATO alliance.
Like other noble Lords, I shall not dwell at any length today on the Falklands operation, for I do not believe it is wise to attempt to draw any but the most obvious lessons until all the facts are available. What I do hope is that those who are learning these lessons and will later promulgate them, will not fail to consider at the same time what lessons the Soviets will have learned from this campaign.
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Many noble Lords have paid tribute, which I should like to echo, to what was by any standards a brilliant feat of arms by all three services, by the Merchant Marine and by the logistic back-up in this country and on the spot. I know of no national parallel for a couple of hundred years at any rate. What can be said at once is that it would certainly not have been possible, much less have resulted in the resounding victory that it did, had we not been able to deploy today's Navy rather than the rump to which the proposals of last year's defence review would undoubtedly have reduced it in three or four years' time.
There does not seem to me to be much merit in debating this year's Statement on the Defence Estimates written four months ago, as though the Falklands operation had never taken place. Nor can we ignore the excellent two-day debate in another place a fortnight ago. Both these raise real procedural and intellectual difficulties in speaking to the Motion.
In short, we are in a new set of circumstances in which, I put it to the House, the present Statement is largely irrelevant. I wonder why we are not, instead, debating a short new Statement, which could quite easily have been produced in the time and could have consisted essentially of the speeches made by Ministers in the other place in the debate to which I have just referred.
The most that I can say about the Statement before us is that, contrary to its foreword, the framework of last year is no more appropriate today than it was a year ago as a sensible basis for this country's defence policy. But before turning to the heart of what I consider to be sound defence policy, perhaps I may be permitted some observations on detail.
First, the passages on Trident seem to me to be well argued and presented. Given the decision, which several noble Lords have questioned today, to acquire a successor system to Polaris, which I have always supported, there seems to be no reasonable doubt that from every point of view it must be right to go for the same missile system as the Americans, if you are going to go for the system at all. I part company with the Government, of course, over making nearly the whole bill for the Trident system a charge on the Navy. This seems to me to be entirely illogical for the supreme national deterrent system. It should be funded separately from any of the services—certainly for its acquisition costs—and it is a travesty of the facts to assert, as Ministers have done in another place, that it is financed by the Defence Vote and has, therefore, had no effect on the naval programme. The effect that it will have in practice can be seen in the Statement before us today. It will reduce the percentage of the Defence Vote spent on the conventional forces of the Royal Navy from about 29 today to 23 by the end of the decade, or by nearly a quarter, as the Trident costs rise to a peak, whatever the noble Viscount may say.
There are important words about cost escalation—equipment costs—in chapter IV, which many noble Lords have picked up. They should be found indisputable even in the Treasury, as several other noble Lords have remarked. It has been clear enough for many years that, so long as the equipment costs rise by between 6 per cent. and 10 per cent. a year more than inflation, an annual increase in the defence budget of only 3 per cent. cannot fail to result in a diminution

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of our capability or, what the Americans call, disarmament by inflation. Nor should that escalation be attributed to some over-elaboration of weapons systems on our part. As the Statement says at paragraph 411:
"… in the last analysis"—
which I believe is American for "in the end"—
"it is the potential enemy's equipment which determines the characteristics and level of sophistication of our own weapons; and the Warsaw Pact's military capability is very advanced indeed."
So be it. We have recently seen what happens when obsolescent defence systems are attacked by the latest missiles, and what a blunder it was to cancel the modernisation of, for example, Sea Dart, as the Government decided last year.
I should now like to turn back to policy and to priorities, upon both of which the Statement is either lacking or mistaken. Last year the Statement correctly observed that:
"in purely historical terms our stationing of major land and air forces on the Continent is the least obviously natural of our roles";
but it then proceeded to enhance our Continental deployment at the expense of the maritime role that, in all respects, we are the best fitted of our allies to discharge. There is, in fact, no sensible choice today between a maritime strategy and a Continental strategy, for the elements in which modern war must be fought are so inter-dependent that one cannot choose one and reject the other. Surely if proof were needed, we have just had it in the South Atlantic.
But that is by no means to say that the priorities which each nation in an alliance accords to the various elements cannot be different, nor varied as their circumstances change, and that is the heart of my case against present Government policy. I recognise that navies cannot win wars, but they can certainly lose them, and so I warmly agree with Field Marshal Montgomery who said:
"From the days when humans first began to use the seas, the great lesson of history is that the enemy who is confined to a land strategy is in the end defeated."
There can be no doubt that the Soviet leadership shares that view, even if ours does not, as the hard evidence is there for all to see.
What has become unarguably clear from both the debate in another place and the more public debate in the press is that our foreign and defence policies are out of line—and I agree with the noble Lord, Lord Thorneycroft, that the best way to start a defence debate is to decide what we are trying to defend—because our commitments and the resources which the Government are prepared to make available to meet them do not match. It is equally clear that this can only be put right either by making more money available for defence or by reallocating what is to hand. I recognise, without agreeing with it, that the former course is deemed to be politically unacceptable, and so we are driven to a selection of priorities.
It remains my view that those selected and chosen by the Government are mistaken. They were reached by an unsound method. They were, indeed, chosen in a hurry last year by prejudgment based on faulty scientific and diplomatic advice, driven by short-term economic expediency, with no regard for the NATO
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assessment of the total threat. Forces structured and deployed for a single scerario are always found wanting by the unexpected.
Surely the only sound basis for such an exercise must be carefully to analyse the military task and then, in conjunction with our allies, to decide how best to share the burden of deterrence. This has demonstrably not even been attempted. For example, what credit have our European allies been asked to give us for deployment of our strategic nuclear deterrent, which, unlike that of France, is the only European contribution to that vital role? What mileage have we made in such discussions of our provision of 70 per cent. of NATO's maritime forces, which no other ally can provide if we do not? Is it really to be supposed that the Alliance is so brittle that it would fall apart at the idea of revising national roles within it, so that each provides the forces which history and aptitude fit it to do best? If so, it must augur badly for the ability of NATO to withstand the shock of war.
So, in the business of priorities, I am bound to repeat that the Government have got them wrong. It surely cannot be denied that when our commitment of land and air forces to be stationed in Germany was made, all the surrounding circumstances were different, and there are respectable authorities who assert that the purpose of stationing them there was different also. May I remind your Lordships that in the mid-1950s Rhine Army was but one-seventh of the whole British Army, while today it is no less than a third. The same relation for the Royal Air Force means that in the 1950s what was stationed there was no more than half what the front line is today. So apart from the total change in the perceived threat which has followed the explosive expansion of the Soviet Navy, these figures alone would call into serious question the wisdom of seeking to improve our order of battle in Germany at the expense of allied defence of the Atlantic and Norwegian seas. Does it really make sense for the Germans to build up their Navy to take on a greater role in the Atlantic so that we in this country can reduce our Navy, and with the savings build up forces in the German homeland? We are not, nor are we deemed to be, a significant land/air power in the European context, but we most certainly are, and we most certainly should continue to be, the significant maritime power.
I should like to conclude with a searching look at one sentence in the foreword to the Statement we are debating today. It reads:
"It is right that the Government should consider whether any adjustments or changes of emphais are now required in the light of analysis of the Falklands operation".
Long before that analysis is complete it is entirely possible to describe now certain changes which ought to be made to the programme, for they were as well known to our allies as to informed opinion here before any of the events in the South Atlantic unrolled. I have no doubt at all that the analysis, if it is done by professionals with no axe to grind, will support that assertion.
It is a welcome sign of a better understanding of these issues that, even before the Falklands operations, the Government had already accepted the professional advice to keep the two assault ships and four of the destroyers previously designated for disposal. It is

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even better news that HMS "Invincible" will not now be sold, because the Government have belatedly recognised that three carriers are essential, as the noble Lord, Lord Murton of Lindisfarne, has just said.
A further sign of some progress up the learning curve is the decision to retain HMS "Endurance" in the South Atlantic. Her intended withdrawal was not only mistaken but may well be shown later to have been a trigger to the Argentine aggression. I hope this progress up the learning curve will continue with a recognition that the number of operational escorts required is nearer 55 than the 42 proposed. There has been a good deal of equivocation about this by Ministers recently in another place, but no doubt must now be left about how many ships there are to be in the stand-by squadron, nor about crews to man them if they are called forward.
Can it be questioned after the Falklands operation that it would be folly to scrap four of the Royal Fleet auxiliaries, without which the operation could not have been mounted, or to remain obstinately committed to giving up the mid-life modernisation of destroyers and frigates which provides a virtually new ship, with up-to-date weapons, for half the price? These lessons, some happily already learned, however reluctantly, and others of the same nature need wait upon no analysis.
I ask your Lordships particularly, especially in view of the strictures of the noble and gallant Lord, Lord Carver, to note that today in all this I press for no increase in the Royal Navy, as well I might. I urge instead that the announced intention to slash the surface fleet by what was one-third, and, after better thoughts, is still one quarter, be rejected and reversed. If such matters are indeed regarded (to return to that sentence I quoted) by the Government as "changes of emphasis, or as adjustments", well and good; though it is hardly what the words normally mean in English. If they are not so regarded, then the words, like the defence policy in the two Statements, mean nothing.
7.26 p.m.
Lord Thomas of Swynnerton: My Lords, those who so admirably arrange our affairs in this House flatter us. They expect us to be very laconic. What has occupied another place for five days—that is to say, two days of debate on defence, and one on each of the three services—we are covering in one day. It seems to me, given the range of speeches which have been made and the variety of subjects, we are doing very well. Nevertheless, there is a great deal of meat in these two volumes of the White Paper. The mere fact that we are told in paragraph 415 that the Ministry of Defence accounts for some 80 per cent. of all central Government purchases of supplies and services is only one indication of this fact. I think that perhaps we cannot really be expected to cover in so short a time the vast number of issues raised here. This is particularly the case if, as my noble friend Lord Thorneycroft pointed out followed by my noble friend Lord Beloff, we have not recently had a full debate on what you might call the larger purposes of foreign policy, which govern foreign affairs as they do defence.
I should like to begin by saluting, like other noble Lords who have spoken, the great achievements of the
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armed forces, civilian support, the Government, the War Cabinet, and above all the Prime Minister for carrying the nation through during the Falklands crisis to the first military victory which a European nation has had since 1945. This is a striking historical achievement. I was particularly pleased, as one who studied the Suez crisis many years ago, that in this crisis there did not seem to be any confusion between the strategic decisions in London and the tactical ones in the South Atlantic.
I remember during the time when I was attempting to study the Suez crisis, that an admiral told me that Nelson would never have won any victories in the age of the Telex. That remark has been disproved by the achievements of the Government on the one hand and the achievements of the task force on the other. Naturally, as the noble and gallant Lord who has just spoken has said, this is not really the time to go at any length even into the apparent lessons arising from the Falklands crisis, but there are two main matters to which I should like to allude, because they are likely to be relevant if there were a similar crisis very shortly, or however long another such crisis in delayed. The first one is the whole question of how in a time of conflict like this we handle information.
We have not got completely right the way in which to deal with the great amount of information coming in, not only from our own correspondents and from correspondents and other informants in other countries, but also those in the territory of the enemy. Often in these affairs what seems to be happening is almost more important than what has actually happened. Some study of how to integrate all this needs to be done in case there should be another such conflict as we had. Obviously this would be so at the beginning of any major conflict, or perhaps all the way through it; since, after all, we should find the same barrage of information coming instantaneously as a result of modern means of communication, by satellite and so on.
It may be that a good answer to the questions I am raising would make the dealing with the other matter to which I wish to refer more easy. For example, there was all the way through, it seems to me, a certain ambiguity as to whether or no we were at war. I raised this point in the first intervention I made in the Falklands debate but I did not pursue it because I thought it would be embarrassing. Now, however, it is obvious, from listening to what my noble friend Lord Trenchard said, that he assumed we were at war; the regius professor of modern history at Oxford said we were at war; and there was a general assumption that we were. Nevertheless, there was no declaration of war. I should be interested to know from which time exactly we were at war. A shrinking from the idea that a conflict has become a war may make things more difficult for us to handle. That includes dealing with information, for example, and dealing with the nationals of other countries who may wish to be helpful to us but who, if there is no actual declaration of war, may not quite know how to behave.
I also congratulate the Government on the White Paper because it seems to me—and I distance myself on this from the noble and gallant Lord, Lord Hill-Norton—that they have emphasised, by publishing it in this way, the fact that the main problem which faces the nation in defence and foreign affairs is exactly the

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same as it was in March, with some differences no doubt because of the perception which the Soviet Union may have about our willpower and capacity to organise ourselves. But the main problem is obviously very much the same as it was before the Falklands crisis.
I particularly congratulate the Government on their tables of statistics, and it is worthwhile referring to figure 13, which shows the amount of money we spend on defence in comparison with our allies. It is not quite correct to suggest, as I think the noble Lord, Lord Peart, did, that we spend a higher percentage of GDP than any of our allies, the United States included. That does not seem to be borne out. However, we certainly spend more than any of our allies in absolute terms, except for the United States. We even spend more in absolute terms than France, £25,000 million compared with their £23,000 million, which is a remarkable contribution that we are making to the Alliance, bearing in mind that France, for the moment at least, is a richer country than ourselves.
The chief comment I would make on the White Paper is that I miss in this year's production quite the same recognition of the nature of the Soviet threat as I saw in previous White Papers. This is admittedly dealt with in paragraph 1, and it is mentioned within Section 3, the balance. But there is no recognition that we are facing a bigger threat in the Soviet Union than we have ever faced before, with a Government organised almost on a permanent state of a war footing since 1917, whose armies, either directly or by surrogate forces, are trampling the freedoms of peoples in practically every continent of the world, whose nuclear forces are casting a shadow over Western Europe and whose navies are being seen in every ocean in the world. That is not emphasised as strongly as it should be.
Of course the Government know it perfectly well. Nevertheless, it is sometimes desirable to state what may seem to be the obvious, because often in politics it is necessary to state the obvious. The reason why there is this threat—why there is a possibility that the gloomy picture which the noble Lord, Lord Jenkins of Putney, just might be proved correct—is due to the fact that the Government in Moscow have adopted such attitudes over many years. It is obvious, however, although that is the explanation, that Lord Jenkins has not quite understood the real reason for his pessimism.
I regret that the White Paper does not mention that since the publication of the 1981 White Paper we have acquired a new member of the Alliance, Spain. I congratulate the Foreign Office on their skill and diplomacy in arranging for this new ally, and, if it is not impertinent to do so, I congratulate the Prime Minister of Spain for having forced this difficult decision through in that country against a good deal of opposition.
I have a couple of points to make about the White Paper which noble Lords may consider to be flippant. First, I notice that the figure in Item 13 to which I have referred is quoted in dollars, and the size of the defence estate is mentioned in hectares. I should have thought that the Ministry of Defence statisticians ought to have the services of an accounting machine which enables them to turn that table into pounds. I
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also feel that Britain's broad acres do not need to be hectared. And if noble Lords feel that that is likely to be the preface to a conclusion of an anti-European nature, they are wrong. I listened with great care to the remarks of my noble friend Lord Trenchard and the suggestions, very well made, of the noble and gallant Lord, Lord Hill-Norton, about the possibility of reaching some degree of collaboration with our allies about defence primarily because of the spiralling costs, which are described well in the White Paper.
It seems to me that we are bound to have to collaborate, perhaps on the lines Lord Hill-Norton suggested—rather far-sightedly, I thought, although there may be some other way—with our European allies in the course of the 1980s, because of the costs. I suggest, therefore, that we look again at all the plans for a European army, a European defence community, which were Government policy in the early 1950s, at a time when, for example, the noble Lord, Lord Chalfont, was still in the Army and when my noble kinsman, Lord Gladwyn, was in Paris. While I do not suggest that those plans were absolutely right, they should be examined again because they may have something to contribute now.
Whenever one suggests the idea of a revived European defence community one is always told that it risks decoupling with the United States. That is of course a serious danger, and we should devote all the services of our diplomacy to preventing such a risk from becoming serious. However, I remember how, in the 1950s, the United States was in favour of a European defence community, and in 1960 President Kennedy spoke firmly in favour of refurbishing the European pillar of the Alliance. Of course there are difficulties, but, providing we assume that any new European defence arrangements that may be made are naturally within the umbrella of NATO, I do not believe they should be overpoweringly difficult problems to overcome. The decouplement which might be caused would surely be no greater than the risk of decouplement which we have already run during the formulation in the last year or so of European foreign policy. I have always thought it odd that the European adventure has been able to insist upon such matters as the colour of peas, or the strength of beer, and has shrunk from such important matters as questions of defence.
I have two points that I should like to make on the question of disarmament, which seems to me extremely well covered in the White Paper. First, if we can obtain some degree of verifiable militarily significant and balanced disarmament, we must devote all our attention to it, if only because of the cost. We have to approach this matter from the point of view of realpolitik and not, if I may put it so bluntly, from the point of view of idealism. After all, the people with whom we are dealing are not people who are members of legislatures. The people with whom we are dealing are people such as Castro, Brezhnev, Teng Hsiao-Ping, and Gaddafi, who spent their entire lives in a climate of violence, who know that they have no legitimacy of rule in their own states, who indeed have respected force as they have respected nothing else throughout their lives.
To suggest that we can make a moral appeal to such people is quite false. Therefore I think that the Prime Minister was quite right to make the comment

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that she did to the General Assembly on Disarmament in the United Nations—that the only kind of disarmament that is worth while is one which gives an increase of security to all regardless of how much it may dissatisfy some. She was also right to point out that arms races have not always caused war, and many wars have not been caused by arms races. Although there was, for example, an arms race before 1914, I do not think that historians would now say on the whole that it was the main reason for the outbreak of war in 1914.
Similarly, Professor Michael Howard was quite right when, in his recent Creighton lecture, he pointed out that there was a serious danger of our forgetting that the abolition of nuclear weapons may very well lead to an increase in the number of conventional wars, which could be far more damaging than many of the supporters of nuclear disarmament suppose. After all, those killed in conventional wars since 1945—in, say, the last 35 years—have been numberless.
7.43 p.m.
Lord Buxton of Alsa: My Lords, I wish to be very brief about the question on the future defence of the Falkland Islands. Perhaps I may briefly add my tribute to the task force and its brilliant organisation, which many noble Lords have mentioned today, none more eloquently than the noble Lord, Lord Thorneycroft. But since I was down there in February and March, in South Georgia, the Falklands and the Antarctic, perhaps I may especially pay tribute to the amazing rugged capability of the individual British serviceman, in all three services, his extraordinary fitness and stamina, and above all his amazing adaptability. In the last war we saw how people from all over the country, whether they were bank clerks, farm workers, or factory workers, proved their ascendency in the Burmese jungle, in deserts, mountains, and elsewhere. Now, for I believe the first time this century, they have proved that they are best in sub-Antarctic conditions at the worst time of the year. I think that it is a remarkable thing on the part of the individual, and that is what makes me very proud about the achievement.
I should like to couple those remarks with a reference to HMS "Endurance", which I know well, and to which noble Lords have already referred, and its captain and crew, and the marines. I am glad to say that, in a Written Answer today, the Secretary of State stated in the other place:
"'HMS Endurance' has been retained in the South Atlantic for operational reasons which include her unique capability to operate in ice conditions and her extensive experience of the area ".
My Lords, I could not have put it better myself—because that is exactly how I did put it on numerous occasions in this House last year. "Endurance" has now been nearly 10 months at sea, away from home, compared with an average for all the other ships in the task force of three months, 19 days, according to figures from the Ministry. I think that hers has been a remarkable achievement, down there alone for a very long time.
Though one recalls the somewhat disdainful references from Whitehall to her limited military capability,
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on so many occasions last year, I believe that "Endurance" and her complement delivered the coup de grace to the "Santa Fe", an Argentine submarine. I understand that her marines badly damaged an Argentinian corvette, and I think that her helicopters destroyed two large Argentine helicopters. I am sure that when the long tour is over—and I have not been able to discover when that will be—HMS "Endurance" and her brilliant crew will receive the kind of welcome that has been enjoyed and deserved by all other ships.
I have been concerned and worried that there is so much uninformed comment, perhaps understandably, in the media, especially by journalists and other writers in the press, in the aftermath of the Falklands affair. Certain "trendies" are now beginning to question our right to sovereignty; others have been asking, why have we been doing all of this for 1,800 citizens? I am glad to say that the Prime Minister has made many references recently to the importance of the Falklands as a strategic base, with South Georgia, in order to protect the security of the South Atlantic and the sea lanes around the Horn.
But what mainly disturbs me is the growing amount of opinion to the effect that we cannot afford to defend the Falklands. As one who knows the area well, and who has some experience of, and many friends in, Argentina, I want to say that that is not a valid statement. First, the Argentines do not invade countries when they think that they will be resisted. The Falklands were invaded because the Argentines had a clear signal that they would not be resisted—and I am not in any way pre-empting the Franks Report. I am not referring to what has happened in the last few months. The Argentines had the clear impression from successive British Administrations since 1965, and all are in this up to the neck. So far as the signal was concerned, the Argentines had a clear belief that there would be no resistance, apart from diplomatic protests and a great deal of "waffle" in the United Nations and so forth. They were convinced that they would get away with it. Now they know that they did not get away with it, and they are unlikely to do it again. Therefore I must assure your Lordships that in my view they will not go to sea and invade again if they think that they will be resisted.
What is required is three things. First, we need early warning and detection, which did not exist. I am not an expert in these matters, and therefore I do not really know about them as many of your Lordships do, and as admirals and field-marshals can explain. But early warning and detection is obviously available. The mainland is only 300 or 400 miles away, so that must be the first thing that is available. When it is available, all that is necessary is deterrence on a limited scale.
There are approximately 200 islands in the Falkland Islands. There is a vast, broken coastline with bays and landing places, and, if one kept there three divisions, one could not possibly stop people landing everywhere. Therefore there is no point in having them. What is needed is deterrence, early warning, and then access. Therefore, what is required is a long runway, adequate aircraft landing areas, aprons, and all the rest. Provided they are available, including access via Ascension Island, then one has all the components that in my

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view are necessary to discourage a further Argentine invasion.
I wanted to add this very short and limited statement to your Lordships to counter the mounting journalistic approach that we cannot possibly afford it—and such a view might not come only from journalistic sources. Perhaps there is what one might almost call a mounting campaign claiming that we cannot afford it. We can afford it, because it is limited. The other reason that we can afford it is that, given confidence, and given proper early warning, access, and deterrence, there is no question about it—the Falklands can be turned into a thriving asset, quite apart from their very important strategic value to the free world and to ourselves in access to the Antarctic, safe passage round Cape Horn and so forth.
We must never allow ourselves to believe that we are under continuous threat, provided we remain aware and keep our wits about us. That did not happen recently. We have slept for nearly 20 years. We have allowed the situation to drift. Since as far back as 1965 every Government have been as unprepared as this one; there can be no argument about that. But with, first, only limited surveillance and detection, secondly, deterrence, and, thirdly, access, there is no reason why we should ever get into that situation again.
7.51 p.m
Lord Shinwell: My Lords, there will be general agreement in your Lordships' House that we have been favoured in the course of the day with a succession of remarkable speeches, all of high quality, albeit, perhaps, with excessive debating material. We can hardly claim to be unanimous. There has been much confusion about our defence strategy and our intentions, and all the possibilities that derive from our commitments in various parts of the globe.
At this late hour I would be the last to indulge in even a speech except of, to me, comparative brevity, but this I must say. Having listened with meticulous concentration to the speeches we have heard, I award (if your Lordships do not mind my saying so) the accolade to my noble and gallant friend Admiral of the Fleet Lord Hill-Norton. I do so not only because it is deserved but because I wholeheartedly agree with him. I can speak with experience of the maritime contribution made in previous wars. I can recall what happened in the First World War, when I was picked, among others, by the Government of the day to man auxiliary cruisers; that is to say, liners from the various shipping companies which, in the absence of other useful vessels, particularly in the Navy, were utilised to make their contribution to success.
It was no easy task; but from what I gathered in my experience both then and in the Second World War, where I was closely in touch with Lloyd's Register and several shipping companies, I would venture to say—and it is a word of advice to those concerned—that we have no hope of winning any war in the future without adequate maritime power. We certainly never won any war in the past, even with our allies, except with that kind of military power. I call it military, for such it came to be.
Therefore, I would advise those associated with the Ministry of Defence, if they would permit me to do so,
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to think again about the whole strategy of our defence. I go further and would advise them to take the two Defence White Papers, place them in a basket and forget all about them; in other words, to think again about defence, all the more so because of the Falklands operation. I yield to none in my admiration for the courage and loyalty of the men of our various forces who recently made their contribution in that operation. I wish language of that kind had been used at a function which occurred yesterday, when there was too much talk of peace, although that could hardly be regarded as objectionable, and the recent crisis in the Falklands was forgotten.
I repeat: we have to think again. What have we heard today? We have heard the pacifists; we have heard the half-baked pacifists; and we have heard those who declare that we cannot afford to have a war in Europe. I think it was the noble and gallant Lord, Lord Carver, who expressed that opinion. There are doubts, in spite of all the argument that we have heard for the past few years, about the desirability of constructing the Trident. I was by no means surprised to listen to the noble Lord, Lord Chalfont, making that declaration. He was against it. So were others; not only on the grounds of cost, but because they doubted it could ever be used. I join with them in their opinion. It could only be regarded as a deterrent—and let us not forget that a deterrent is desirable more often than not. We have had a deterrent for the last 30 years in the form of NATO, which has prevented a conflict between ourselves and the Soviet Union. Therefore, a Trident constructed, even if never used, might be regarded quite appropriately as a deterrent against the possibility of conflict. To that extent it should be supported, as should other deterrents be if we can discover them. But I would not take it further than that.
My second opinion is this. I do not pretend, as my noble and gallant friend Lord Hill-Norton suggested—I can understand why he did—that we can rely completely on the Navy. It has to be supplemented by a vast number of other vessels, not necessarily of excessive tonnage but capable in a variety of ways of dealing with a possible enemy. Indeed, I will go so far as to suggest that every merchant vessel ought to be to some extent armed. That might be objected to by those who say that it would be an incentive to engage in a conflict. I recall, at the beginning of the last war, taking a delegation of marine officers and seamen to the First Lord of the Admiralty, who happened to be Mr. Winston Churchill, and on behalf of that delegation making the proposition that so far as it was possible merchant vessels should be armed with weapons, with possibly accommodation for helicopters and the like. Nothing was done about it because, in the opinion of Mr. Churchill, we would have sufficient guns to deal with aircraft. He was not prepared to transfer aircraft guns to the Mercantile Marine; and we had to accept it. As an alternative, we had the convoy system, which was not a complete failure but almost a failure at the mercy of the U-boats—particularly because our own merchant fleet was not speedy enough, could not compare with the U-boat speed. That was to our disadvantage.
Therefore, I would offer that advice to the Minister of Defence, that he should seek as soon as possible

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to man our merchant vessels with some weapons which would, at any rate, afford protection or an assurance of protection. These are the two contributions I venture to make and I will not take it any further. First, to dispose of the Defence White Paper in view of the various errors that occurred during the Falklands operation; but I do not make a song and dance about that, I can understand them. Also, in view of the lessons that we have learned in the last few years, in view of the diplomatic confusion that exists throughout the globe—and we are well aware of that—and also in view of the possibility of a conflict with the Soviet Union, which I hope will never occur but which we should make every effort to avoid.
In view of these factors, it is essential that we should think again to provide the necessary adjustments to the strategy of our defence. In the decisions about weapons, the layman ought not to go too deeply into the question of what is the right type of weapon to use in the event of a conflict. In my opinion these are matters of the utmost importance. If we are going to rely on the contents of the existing White Papers on defence, it will be fatal. I do not deny that there are some elements in the White Paper that can be utilised with advantage, but the strategy has got to be reorientated. That is essential. My second point, the one to which I venture to refer briefly, is the boosting up of the Mercantile Marine and providing them with the essential security to ensure that they are capable of dealing with a possible enemy.
8.3 p.m.
Baroness Vickers: My Lords, it is rather frightening to follow the noble Lord, Lord Shinwell, with his great experience. I do not agree with one of his points. I thought the idea of defence was that we should hear all people's different ideas and have quite a difference of opinion expressed so that we could form an opinion which would be helpful in the end. I have never known him not to want to be controversial in any debate. It is rather disappointing if he is going to take that attitude. I should also like to say to him that the noble and gallant Lord, Lord Hill-Norton, has formed what is known as the British Maritime League, of which I hope the noble Lord will perhaps become a distinguished member in due course.
I shall confine myself to two points: the question of the Royal Marines and that of the Royal Dockyards. I am dealing with the dockyards because I do not want to disappoint my noble friend who suggested at the beginning that somebody will be talking about them. We have very special training for the Royal Marines, which was undertaken by Major-General Sir Peter Whiteley, now Governor of Jersey, and it was mostly carried out on Dartmoor. I mention this because there was a great deal of protest over that and people tried to stop them. But if it had not been for the training on Dartmoor and the training in Norway, they would not have been able to accomplish the amazing marches and actions that they carried out on the Falklands. I should like to mention that the Falklands were also very useful in the last world war when certain of our ships, including HMS "Exeter", took shelter there after the River Plate action.
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The Royal Marines also have a part to play in NATO. What they are finding now, after their experience in the Falklands, is that they want better mobility. In other words, they want the use of LPHs, the "Bulwark" and "Hermes", and the LPIs the "Fearless" and the "Intrepid"; because landing is not easy with the roll-on/roll-off type of ferries which had been used to date, particularly in Norway. In the various areas to which they are likely to go—especially the smaller islands in Europe which they perhaps will be expected to protect—there is very great difficulty in having these type of ferry. It was shown quite well in the Falklands that they had to use other types; and there were certain unfortunate incidents when they were bombed—particularly concerning the paratroops. They need vessels from which helicopters can help them to land.
I should like to mention also the question of reserves. I gather that at the moment they have about 1,058 and the total authorised for them is 11,070. There have been some constraints; they have been constrained by not having sufficient money; but in view of the excellent work they have done and the very good training they give, it would help unemployment and would give a better feeling of life in future to a great many people who would like to join them.
I should like to draw attention to something also rather unusual. As one knows, there were 14 women on the "Canberra". One of them was an assistant surgeon, Dr. West. She did the most remarkable job, particularly when, thinking she was going on a luxury tour to see the world in beautiful conditions, she found herself having to deal with really appalling wounds. She took 1,350 pints of blood off the various servicemen who volunteered their blood in order to give it both to British and Argentinians. In the middle of war, that was a fantastic thing for the men to do.
Then, without the work in the dockyards there would have been no task force, because it was the largest proportion of ships which were transferred into useful vessels by the dockyards. For example, in Portsmouth there were 19 ships, eight major and 11 minor. At Devonport—and I do not know the exact figure—there were at least nine and probably nearer a dozen which were changed into useful vessels. They have coined a new word for it now, which is "STUFT" —ships taken up from trade. The smallest conversions took two days and on the largest 22 days. I think it is quite amazing that the work was done completely voluntarily, with people staying overtime and not asking for extra money to get these ships ready. I am going to put down a Question for Written Answer, if I may, to elicit the names of all these ships. I know them myself but I do not want to read them out. I should like to have them on the record for the future.
My Lords, I hope that one realises how our share of shipbuilding has fallen. It has fallen dramatically and I have a graph which shows that it is now almost at rock bottom. I am worried that if we do not start building ships again shortly, we shall have no ships' workers in this country. Supposing we have no trained shipbuilders in this country, then countries like Korea and Japan will obviously collar the market and put up their prices. We shall then have to pay extra money—money which we are trying to save now because we think our workmanship is too expensive

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at the moment. We shall then be having to place our orders more or less under blackmail in these yards at very much higher prices.
In the yards, when the cuts come into force, the industrial labour force will only be 31,000, including 1,500 in Gibraltar. The cuts in Chatham, Portsmouth and Gibraltar equate to 50 per cent. of the workforce. Therefore that is a cut in the potential ability to provide heavy repair, refitting and updating of the fleet. The cuts will be irreversible, as special skills and experience are required by naval yards. If such drastic cuts are made, it could take several decades—and I am not exaggerating, for I have checked this—say, 20 years, to get experienced foreman in the yards again. There is immense value in the yards, with their masses of specialised building which are of great importance and their docks. I should like to remind the noble Viscount that the nuclear complex at Chatham and the destroyer refitting complex at Portsmouth are too costly to recreate in peacetime and that it is not sufficient to reactive them under care and maintenance.
The size and efficiency of the Navy is constrained by the magnitude of the dockyard heavy repair and maintenance capability. So, if there is a reduction in the manpower and facilities, in the long term there will have to be a reduction in naval personnel because there will be no ships for them. The dockyards' first priority is always short-dated work—the updating of weapons systems, for example. So the Navy will lose its capacity to undertake modernisation of its ships and keep the equipment up to date. As I have understood the situation, the short lifting for a major refit after 12 years of service is more expensive than refitting and modernisation at half this period. The short refitting takes from four to six months and is undertaken every four or five years. Major refits at half-life take two to three years. The hull and machinery take a longer time after 12 years' service. This particularly applies to weapons systems, which are 15 per cent. to 25 per cent. of the refit.
When it says in Command Paper No. 8288 that the Royal Navy cuts required will be between about 8,000 to 10,000 by 1986, partly through the service fleet contraction and partly through cutting out posts and establishments ashore and undertaking more training afloat, I suggest that there may not be the ships to undertake this training afloat. Perhaps the noble Viscount can look into that matter. Can he state whether there will be a reduction in the fleet escort force from 65 to 50?
The capacity of the two remaining yards is not sufficient. It seems unfortunate that, in order to try to achieve apparent savings in Defence Vote terms of only about £200 million a year, regrettably nearly half the country's warship repairing capacity would be destroyed. So the Ministry of Defence appears to me to be trying to make cuts in order to take its share in the programme of Ministry cutting but to be taking no account of the requirement to sustain an essential level of ships for the long-term future.
The industrial base supporting the country's maritime base is already weak. Though I am pleased to note that Devonport will have plenty of work, is it being fair to them to have three streams of nuclear submarines plus the nuclear submarines' mid-commission dockings
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and also HMS "Invincible" for refit? I think that there are too many high priorities in this programme.
There is the necessity to "cover" ships which at the moment is impossible and therefore some extra work will have to be done before the ships can be taken into reconstruction. Will the reconstruction of Devonport, or perhaps part of Portsmouth, be done before Chatham closes?—otherwise the situation is going to be very difficult. Regarding Devonport, is there enough room for expansion and are there enough craftsmen for the job?
The Defence Review does nothing to alleviate the problem of the shortage of dockyard capacity. As I have mentioned in previous debates, remote control by Whitehall secretariat takes away local initiative. I know from personal experience that the local management wish to make decisions on matters such as applications for overtime, purchase of materials and the placing of sub-contracts for specialised work, but they have had that totally banned by headquarters in London. This is very bad for the morale of the yards.
The problem which I have mentioned in the dockyards and to which I have referred in previous debates has been the heavy overload of ship work. This has regrettably been aggravated by the unhelpful activities of the Civil Service Department, whose chief intent in this matter appears to me to be that they want to achieve uniformity across the country and they do not mind in the least about the actual work carried out in the yards. Regrettably, they have little or no interest in the problem of repair work. In pay and industrial matters, the Civil Service Department have power without responsibility, which is not at all helpful to local management.
The noble Viscount very kindly replied to my letter of February 1981, but I regret that it has not helped me on the points I raised. Perhaps I shall be luckier in his reply this time, because I think it is essential that we know how we stand in these various dockyards.
In view of the excellent reports that we received from Australia, New Zealand and Canada, and of the recent speech by Mr. Lee Kuan Yew, the Prime Minister of Singapore, I should like to suggest that we should have a conference of the chiefs of the navies of these countries and of any other countries in the Commonwealth which might like to join them so that we can help in the various seas in the world: for instance, Australia and New Zealand in the East, and Canada in the West Indies. I notice that in the debates in the Canadian Parliament they have been very keen to do all they can to help. There is also a conference being held by the Commonwealth Parliamentary Association in the Bahamas. I gather there will now be an opportunity to have a debate on this subject.
I am pleading that the different countries of the Commonwealth should get together. We had at one time Pax Britannica, and, now with 48 independent territories, I am sure some would like to join in having a Pax Commonwealth. We wish to maintain peace, and if we have people alert in the various parts of the world and in communication with us we would have more chance of keeping the peace, rather than waiting until unfortunate things happen, as in the case of the Falklands.
8.19 p.m.
Viscount Massereene and Ferrard: My Lords, I am going to change the bowling and speak about the media. I have been asked to speak extremely shortly. Very few people realise the vast power of the media, especially with the advent of television today. One can probably say that the media and the trade unions are the two most powerful bodies in this country. In the last war the record of the media was extremely good. The BBC deservedly had a very good name for their reporting. But in the Falklands war—and I think that most noble Lords will agree—they have rather tarnished their image.
There is evidently some legal explanation, but I cannot understand why we never declared war. The point is that we did go to war over the Falklands, and a most brilliant campaign was fought by all who were concerned in it. But ipso facto it was war, and I cannot understand why there was not some censorship, as in all previous wars. After all, morally we were 100 per cent. in the right, we were upholding international law and were fighting an appalling aggressor. Perhaps the Government did not realise then that certain sections of the media might not be as patriotic as we hoped. I would remind your Lordships that America lost in Vietnam because of the media on the home front. If she had been supported by the home front, that campaign would have ended very differently and would have saved the most brutal aggressions in Vietnam, and in the countries bordering it.
There has been criticism of the Ministry of Defence for withholding photographs until the end of the Falklands campaign. Of course, they were perfectly correct to do so, but I only wish that the Government had been firmer in their control of certain programmes put out by the BBC. I think that, on the whole, the BBC were the chief offender. I am extremely sad about that, because I have always had a great admiration for the BBC. I saw it reported in the press, and I presume there was some foundation for it, that that very gallant officer Lieutenant-Colonel Jones, who, unfortunately, lost his life at Goose Green, said that when the Falklands war was over and he got back home he had every intention of suing the BBC for manslaughter. Presumably, he knew far more than we do how the reports of the media affected the troops under his command. It may be that, when they reported troop and ship movements, the enemy knew about them anyway. But I am quite sure that the reporting was a help to the enemy, and it was disgraceful.
Under their charter, the BBC are supposed to be impartial, and perhaps they were trying to be impartial in their reporting of the Falklands war. But no body in the state, especially a body as powerful as the BBC, can be completely impartial in a war. If you are going to be impartial in a war, you will presumably lose that war—
Lord Granville of Eye: My Lords, would it not have been better if the Government, or the Ministry of Defence, had appointed a Minister of Information as in the last war?
Viscount Massereene and Ferrard: My Lords, the noble Lord is quite correct. That would have been
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excellent and I cannot think why the Government did not do that. But the BBC have the sole rights to collect broadcasting fees from the public, which makes it far worse than if it were a completely independent newspaper or broadcasting organisation. When we are risking our servicemen's lives on active service, in conditions of extreme discomfort, it is appalling that the media on the home front do not support them. I am quite sure that some of the television programmes that we saw on the Falklands would have brought great anguish to some of the relatives. On the whole, the press were good. But what was shown on television left a lot to be desired. If, god forbid!, we ever have a similar occasion arising, I hope that the Government will appoint a Minister of Information. Before I sit down—I do not know whether there are any former naval officers in the House—
Lord Mottistone: Yes.
Viscount Massereene and Ferrard: There are one or two points I should like to make. Perhaps I ought not to make them, but I should like to do so. I am obviously not a naval architect, but I think that naval architects ought to put on their thinking caps. What I am worried about is that, in this micro-electronic age, our ships appear to have a small control room which controls every facet of their operations. If that control room is hit, everything is out out of action—all the fire-fighting and everything else. Surely, in the designs of our new ships we ought to try to spread that control more evenly throughout the ship, as in former days when all the controls were not centred in one small compartment.
I was very glad to hear my noble friend Lord Trenchard say that we are improving our night gun sights. I understand that in the Falklands war the Argentines had better night gun sights than we had, so I am glad that that defect has been rectified. I was a very junior officer, but thank goodness the noble and gallant Lord, Lord Carver, is not here now because I think he was on the wrong tack when he said that a further two armoured divisions would be equal to our independent nuclear deterrent. The two things cannot be compared. If we had not had nuclear weapons at the time of the Berlin air lift we would probably have had a third world war. Since the last world war we have had in the world 151 other wars and they have all been conventional wars. But I am sure that, if the Americans and we ourselves had not had nuclear deterrents, we might well have ended up with a nuclear war. Having said that, I will sit down.
8.30 p.m.
Lord Mottistone: My Lords, I will not follow my noble friend Lord Massereene and Ferrard into the ship construction business, for many reasons but also so as not to keep your Lordships too long. With regard to what he had to say about the press, I began to feel towards the end of the Falklands operation that they were beginning to get a feel for it. They were totally inexperienced in how to report a war, not only those who actually went out and did it, but those who controlled it back here, putting on television programmes and editing newspapers. They really had not had any experience of anything like that

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for years. Towards the end I felt they were beginning to get the feel.
Then, of course, the operation was so efficiently conducted. As the noble and gallant Lord, Lord Hill-Norton, said, it was probably the most efficient and first-class operation we have conducted from these shores in about 200 years. It was so efficiently done that unfortunately the press will now forget how to behave when they are reporting a war, and we will have to start all over again if we ever have another one. There are many reasons for supposing that we never will, but that is another matter altogether. I want really to start by joining with all those, and particularly my noble friend Lord Murton of Lindisfarne, in congratulating all concerned, from the Merchant Navy people, to the civilians who were involved and the gallant officers, soldiers, sailors and airmen, and indeed the task force commander and the land force commander.
Rather as my noble friend Lord Thorneycroft singled out the joint planners, I should like to single out the Commander-in-Chief, Sir John Fieldhouse. I do not know why, but he never seemed to me to come over as the person in charge—which he was. I have always thought it surprising, but perhaps he was wise and kept clear of the press; and it is just as well to do that, if one is in the "Silent Service" anyhow. It was his operation. He conducted it and deserves all the congratulations that we have given to anybody else.
Next point I wish thoroughly to endorse what my noble friends Lord Thorneycroft and Lord Beloff said: that we really must have foreign policy decided before we decide on defence policy. Foreign policy has to give the guidance. I believe it was my noble friend Lord Thorneycroft who said we should have a foreign policy debate before we have a defence debate.
Going right back some years ago in time, to when I served in the Admiralty, we were always trying to get from the Foreign Office what they wanted us to do. It is no good the Foreign Office saying, as the noble Lord, Lord Mayhew, tried to say earlier, "We do not want to have commitments overseas, so therefore we will look after them by diplomacy, and you should not bother to have forces to deal with those commitments". It is a lesson that has just been shown and one which really must go right home to all concerned, that if we have overseas commitments we must have the power to deter people from interfering with those commitments. Hopefully, we will not go to war if our deterrent capability is good enough; but that requires a subtle use of maritime power which, sadly, seems to be lacking in so many people in authority today. That is a fundamental point. Commitments must be identified and we must develop our defence policy therefrom.
Lord Mayhew: My Lords, I wonder whether the noble Lord would not agree that some commitments can be transferred or shared as a result of diplomacy? We do not have to take them as given for ever, do we?
Lord Mottistone: My Lords, it rather depends. Many of them have been disposed of, but there is still a hard core of commitments about which we have to be doubly certain, much more certain than we were this time over the Falklands, that there are other people to
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help, before we relax our own guard and allow people to be attacked in the way that has just occurred. Turning to the Statement, it is a surprising honour for those of us who take the view that I do, that my right honourable friend the Secretary of State for Defence actually entered the lists in person in an article in The Times today, as though The Times in a way pre-empts people like myself and the noble and gallant Lord, Lord Hill-Norton; because it seemed to me that his headline, " … let's not go overboard in Navy spending," perhaps had a vestige of truth in it, because I do not believe that any of us feel that we should go overboard in Navy spending. What I think ought to go overboard is the Secretary of State for Defence. If that could possibly be arranged many of our problems would be solved.
I am serious on this point. I really do believe that my right honourable friend the Secretary of State is unsubtle in his whole approach to this defence business. One might say he is insensitive in that he does not understand the main point of it. For example, it seems to me quite extraordinary that we were told that he wanted to issue this Defence Statement whilst the Falklands war was actually being fought, and was prevented from doing so. That is so insensitive that it betrays a lack of understanding of the reaction of that kind of thing on other people. Though it will be for others to make sure of this, I am quite certain that he made his own contribution to the Falklands war actually breaking out, because of his policy on HMS "Endurance" and what he had to say about the surface fleet about a year ago. That may not have been a major contribution, but I am sure it contributed, that it was totally insensitive to make that kind of remark and, in effect, encouraged the Argentinians to feel that we really had lost interest in that part of the world.
It is quite extraordinary that we have not waited till the lessons, both strategic and operational, of the first major action for over a quarter of a century have been absorbed before issuing any Defence Statement at all. It displays to me yet again a complete lack of understanding by the Secretary of State of the importance of real action to conditioned defence planning. It is quite extraordinary. With that in mind one then looks at the Defence Statement. I spent quite a long time comparing it with last year's Defence Statement. I started with Part 2 and, apart from very small changes, all this is doing is updating the statistics by one year. One could almost guess any figure one wanted to get at from last year's Statement. There was really no hurry to issue that, or it could have been issued by itself as a statistical survey.
As for Part 1, there are certain features which are new. One noble Lord said that there were bits missing from it in relation to last year, but the main burden of what is in Part 1 for this year is substantially the same as it was for last year, and there was really no point in issuing it. Perhaps it gave us something upon which to hang this debate and the equivalent debate in another place but I wonder whether that was necessary or whether we might not have had a brief Statement.
Finally, we turn to the foreword, this extra slip of paper, in which we see the rather ominous words "adjustments … to the Defence programme". If that is all it is going to be, then that really does show not merely insensitivity but ignorance. I hope that

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any changes will be fundamental and rooted—the noble Lord, Lord Peart, said as much when he spoke—that the lessons will be truly learned, that we shall make all the adjustments and that, as the noble Lord, Lord Shinwell, said, the White Paper which we have assembled here today to discuss is as quickly as possible put in the wastepaper basket.
8.40 p.m.
Lord Gladwyn: My Lords, what are the lessons of the Falklands? I suppose that technically they relate to such things as the possible vulnerability of our surface vessels, the efficacy, or otherwise, of anti-aircraft and anti-missile defences, the desirability, if not the necessity, of some kind of Nimrods for the detection of hostile aircraft and so on. These, I have no doubt at all, will be pored over by experts with, we can only hope, satisfactory results.
What are the strategic conclusions which we can derive from what was a highly successful, if highly risky operation? Here I should like to make just a few remarks enlarging upon what was said in the excellent speech of my noble friend Lord Mayhew. What the Falklands certainly showed was that, when we are up against it, this country is very efficient in the deployment of its armed forces and that its professional services are courageous, determined and, above all, highly skilled. We can indeed be proud of that. It also shows what the British can do when they are really up against it. It was once said that the British can never read the writing on the wall unless they have their backs right up against it, which is profoundly true. But it also showed, I think—as I think several noble Lords have indicated during the course of the debate—that the projection of British power many thousands of miles away to look after British interests against attack by a third-rate power was only effected with considerable losses, which undoubtedly weakened the general defence of the West against the real adversary.
It was consequently not something which should have been undertaken except under the spur of dire necessity—in this case action forced on us by the extreme stupidity of the Argentine Government. We were, I repeat, and as has been said by several noble Lords, lucky in not losing more ships and thus in not being put in the humiliating position of actually having to call the whole thing off. We can therefore only hope that the continued projection of British power into the South Atlantic will not be necessary in the years to come and that it will, on the contrary, be possible to create some sort of small international base on the islands which will both protect the passage round the Horn and ensure that the islanders are never governed by the Argentine—an Argentine which, under some new régime, might well, however, be profitably associated with them, and with us, in the economic exploitation of the entire area. That is what we must surely hope, so let us hope that things do turn out that way.
If they do, and even if they do not, one thing—here I agree entirely with my noble friend Lord Mayhew—stand out a mile. There is no other conceivable position in the world which calls for independent defence by some British task force of the general nature of that sent in April to the South Atlantic. I make
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that flat statement and I propose to justify it. Gibraltar could only be defended in the context of an absurd war with Spain. Hong Kong is totally indefensible against China which, happily, shows no sign of wanting to attack it. Belize ought to join the Organisation of American States. That should be its future. The Atlantic islands could only be defended against the Soviet fleet, which is the only possible aggressor, with the active help of America. The remaining small islets hardly count. As for the Indian Ocean, all right. If the Americans insist, we could, no doubt, provide a frigate or two and perhaps contribute some paratroopers to Oman. No, Mr. Nott is—or, at any rate, was—completely right. It is in Europe and in the Eastern Atlantic that our forces should now be almost entirely, or principally, deployed. Outside the NATO area we shall have to depend upon the United States, with such secondary support as we and the French can give them in the event—which is, after all, not impossible.
So it seems to me—and I could not agree more than I do with the speech of the noble and gallant Lord, Lord Carver—that a purely, or even a preponderantly, "maritime" policy would be nothing short of a disaster. Any serious weakening of BAOR and, a fortiori its withdrawal, would undermine NATO by discouraging the Germans and giving the impression that we did not really care much about a land battle or, indeed, about the European Economic Community and were only really thinking about the defence of these islands. There is no contradiction in so asserting. There is no reason why we should not, with the Americans, have adequate means to protect out-communications across the Atlantic in time of war. At the same time, as I have been asserting for at least 10 years, we should construct, with the Germans, a new form of forward defence in the North German Plain, employing the latest technical devices in the sphere of "conventional" armaments which would cost us, I think (although I may be wrong) not very much more than the present upkeep of BAOR. I need hardly say that here I agree entirely with what, I thought, was the admirable speech of the noble Lord, Lord Chalfont.
Some reductions, perhaps, in the "tail" of our divisions—perhaps hinted at by the noble Earl, Lord Cathcart—might be a good thing in itself. And in any case—this is my main point—there is no need to achieve "parity" with the Russians: tank for tank, aircraft for aircraft, still less, of course, man for man. I repeat: what is wanted is a whole new conception of defence which in the long run could be deemed to convince the Russians that success in any "conventional" assault would be by no means a foregone conclusion. And that is all you want to impress them with.
That brings me, as noble Lords may no doubt have expected, to my King Charles's head: the NATO doctrine of "flexible response" to which considerable reference has been made in the course of this debate. There is now, I think, barely any dissent among informed observers that "flexible response" would result in the first use by the West of nuclear weapons and, consequently, in nuclear retaliation and thus in an escalation which it would be virtually impossible to avoid, resulting in unparalleled destruction and probably in the disappearance of the participants as recognisable national entities. This of course would be

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far worse than defeat—it is not defeatist to say that—and far, far worse than any conventional war, however horrible that might be. What, however, appears on the face of it to be lunacy is justified by the argument that the Russians would be dissuaded from embarking on a war by a belief that Western rulers would be entirely capable of acting like lunatics and would in any case be prepared to call off the war if, by any chance, they did act like lunatics.
This seems to me to be an extraordinary argument. I believe that no intelligent person can read Lord Zuckerman's excellent work, entitled Nuclear Illusion and Reality, without acknowledging that first use of the nuclear weapon in the event of war is, as he again pointed out in his excellent speech, an impossible conception and that the threat to do so is consequently totally incredible. It is improbable that the Soviet Union wants war. If they are motivated by reason at all, then they cannot want it. But war may nevertheless come about—shall we say in the Middle East, with the Russians and Americans finding themselves killing each other without perhaps really intending to do so? If so, it would inevitably spread to Europe and we should be confronted with the fatal nuclear decision. As I see it, there would then he only one "credible" response on the part of the West: we should be forced to defend ourselves by what are known as conventional means.
This brings me to the only point on which I believe I differ from the noble Lord, Lord Chalfont. If it is obviously impossible for us to make first use of nuclear weapons, why do we feel that we cannot contemplate a no-first-use declaration? I only say "contemplate", because it may not happen now but we should at least think about it, in accordance with the proposals of that admirable man, Mr. Robert McNamara. It is no good saying that be refusing to make the declaration we maintain an element of doubt in the minds of the Russians, for the simple reason that the Russians—like ourselves—would not believe it to be possible anyway. And if we did make it in agreement with the Russians, we would at least take a good deal of wind out of the sails of the Campaign for Nuclear Disarmament.
While making every effort to reach agreement on the limitation or abolition of nuclear weapons generally—and what on earth is the point of spending billions trying to gain nuclear superiority when the West generally already has the capacity to blot out an adversary many times over on a second strike as it is?—all our energies should now be directed to improving our conventional defences. I myself have for long believed that we should create some sort of Home Guard to protect our cities against conventional attack, and that we should scrap the Trident project in favour of more hunter killer submarines, and in order to liberate funds for the modernisation of the BAOR. What, if anything, should replace Polaris at the end of the century—prolonged by Chevaline—I will not go into now. That, broadly speaking can be decided later.
Unfortunately, most experts are agreed that all our economies are being wrecked by the vast deficit in the American budget caused chiefly by totally unnecessary piling up of nuclear weapons which involves appalling high interests rates, and is thus one of the main causes of unemployment in the West generally
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and notably in Europe. Perhaps in these unfortunate circumstances we cannot do everything we should do in the way of stepping up our armaments. I agree on that. But at least we can try to lay the base for real European co-operation in defence. Even if some members of the Community oppose this, why bother? There is nothing to prevent those who wish to co-operate in the Community from doing so, outside the Treaty of Rome. Here I am happy to say that I agree entirely with the excellent remarks of my noble kinsman Lord Thomas of Swynnerton. He said that I myself was occupied with thinking about European Defence when I was in Paris. That is an exaggeration. I believe I began to think seriously about it when I joined the Western European Union in about 1966—which, after all, is some 17 years ago, and that is a long time. There are many figures in the US Congress who do not favour the defence policy of the Republican Administration; and a strong concerted line taken by the European members of the Alliance would strengthen the position of the Opposition in Washington, more especially as we are now in an election year.
Much has been said lately about the Falkland factor in politics in this country, and it is true that our success in that operation has given us the feeling that we still count for something in international affairs. That is indisputable. But the important thing will be for the Government to channel this excellent feeling into widespread support for sensible defence policies which—even if they involve some sacrifices—will be demonstrably capable not merely of favouring purely national goals but rather of achieving that conventional balance of power in the maintenance of which, tempered by agreed arms limitation, our entire future, and the chances of world peace, obviously depend.
8.55 p.m.
Lord Brooks of Tremorfa: My Lords, my noble friend Lord Shinwell has asked me to apologise to your Lordships for having to leave this debate. As we all know, he invariably stays until the bitter end of such debates, but he tells me that he has transport problems, and I am sure that your Lordships will understand.
My noble friend Lord Shinwell was not the only noble Lord to say that the White Paper should be consigned to the dustbin. Whether or not it should be disposed of in that way I do not know, but it has certainly inspired some excellent speeches today. There was a tendancy to brevity—a welcome development on a long day. I shall attempt to follow that trend and not to burden your Lordships' House too long.
I join those noble Lords who have paid tribute to the courage and skill of our armed forces—both the merchant service and civilians—who were engaged in the Falklands episode. We all grieve for the families of the fallen and for those who suffered terrible injuries. The area I represent on my local authority suffered disproportionately in the conflict. I visited the families of two young Welsh guardsmen who were killed on the "Sir Galahad". They were young men

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who were 18 years old and our community is still grieving over them.
I share the surprise of my noble friend Lord Peart that the Government make only the briefest reference to the Falklands conflict in the White Paper. I do not believe that events in the South Atlantic enable us to redraw the map of military learning, but they do give us an opportunity for learning again some fundamentals. The projection of naval power needs several components of air cover; airborne early warning, satellite intelligence, aerial missile defence, point missile defence and interceptor aircraft. The Sea Harrier was our sole aircraft in this role. It follows surely that a fresh look must be taken at the balance which must be struck between the design and budgetary outlays on hulls on the one hand, and on weapons systems on the other. This balance has shifted too far in the direction of platforms in recent years. Without the reintroduction of mid-life modernisation for our naval ships, the balance is unlikely to be restored because weapons systems inevitably become obsolete long before hulls.
The same applies to aircraft. Nimrod is an old aircraft, and so is the Phantom. But their electronics and weapons systems must be up to date. We have learned also that naval power's greatest strength is its inherent flexibility. It is highly mobile and so is able to make varied contributions to defence and deterrent requirements. It allows for flexibility in planning and flexibility of response. The role of sea power in defence is crucial. I have not seen this point made better than in the speech of Mr. Patrick Duffy in another place on 19th July, when he said:
"The Falklands conflict confirms rather than undermines the invaluable role of sea power in projecting military force in unpredictable places across vast distances. That is what the Navy did in the Falklands and that is what it can do elsewhere. In the Navy's more likely and assigned NATO role, the service is indispensable."
As my noble friend Lord Peart has said, the Royal Navy provides 70 per cent. of the NATO maritime forces assigned to the East Atlantic and yet commands only 23 per cent. of the defence budget.
There is in today's issue of The Times an article by Mr. John Nott to which several noble Lords have referred already. This article will inevitably attract a great deal of correspondence. The article is headed "After the Falklands, let's not go overboard on Navy spending". I will not quote at any length from the article which I have no doubt will spark off a great deal of comment. But one comment made by Mr. Nott is certainly the least controversial of anything he has ever said:
"In the last resort, our defences will reflect the size of the success of our economy."
Such a reminder at a time when the Government's economic policies are driving us into ever deepening depression is hardly likely to inspire confidence in priorities for defence.
Can we have confidence that Britain is able to meet her foreign policy obligations and to defend her world-wide trading interests, given the depressed state of the economy? Is it not time to give greater legitimacy to our defence efforts by making the link between our national interests and our defence efforts sounder and more easily understood? Is there not too high a
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priority accorded to strategic nuclear systems both on the grounds of budgetary impact and in the terms of its contribution to our overall security? Is it not time for us to consider arms control, strategic, tactical and convention, as a part of our overall security policy instead of as an alternative to it?
Should the Government not listen with greater attention to the critics of the Trident programme? Is the choice of Trident not forcing us to cast off defence and foreign policy obligations which lie nearer to the heart of our national interests than the strategic deterrent? The Trident programme places unacceptable pressure on our other defence roles. Air defence of the British mainland is desperately thin. BAOR has well known weaknesses. Here the point made by my noble friend Lord Peart should be emphasised. He asked that the disparities in our contribution to the maintenance of our forces in Germany should be discussed with our allies. Like the noble Earl, Lord Cathcart, we are not suggesting a rundown in our manpower commitments, but a lessening of the financial burden.
My Lords, we have vital foreign policy obligations and a wide range of trading and commercial interests which will endure far into the future. They must be defended within the limits of our resources. Concentration on one defence role at the expense of others builds a degree of rigidity into our defence posture which is undesirable, and Trident certainly falls into this category. If we concentrate our attention on one major defence commitment we tacitly invite pressure from potential enemies at weaker points.
The General Council of British Shipping has produced an excellent document on its concern about the need for adequate defence of British merchant ships in time of crisis or war. I am sure that many noble Lords have read it with great interest. Among other things, it calls for partnership between the Government and the shipping industry in building merchant ships of the type needed in time of crisis. Could the Government not begin this partnership by agreeing to replace the "Atlantic Conveyor" by providing the shortfall needed to allow the contract to be placed in a British shipyard? The noble Lord, Lord Kennet, put the point well when he said that we should not leave the building of our merchant fleet to the mercy of market forces.
I understand that Mr. John Nott has made a statement today in another place, when he said—and I quote from a newspaper report:
"If it were possible we would be prepared to make some funds available from the defence budget to change the design of the replacement for the 'Atlantic Conveyor' so that it could be used as a useful reserve asset for military purposes."
This is precisely the approach which the General Council of British Shipping is seeking. In the document to which I have referred the General Council say:
"There is an urgent need to develop a partnership between the Government and the shipping industry whereby types of merchant ships particularly wanted in time of war with defence features built into them could be built mainly with industry money, but with some help from the Government recognising the defence implications. The shipping industry awaits."
The noble Viscount has told us that the Government will seek closer co-operation with industry in these matters, and it is our hope that this process will begin as soon as possible, before the shipping industry is run

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down to the point where co-operation with Government will become academic.
My Lords, the noble Lord, Lord Beloff, catapulted me to the Front Bench opposite and wondered about possible embarrassment on my part in the light of comments made by some of my noble friends. I follow closely the speeches of party leaders and particularly our defence spokesman, and in the debate on the Royal Navy in another place on 19th July Mr. Denzil Davies, an official Opposition Front Bench spokesman, said:
"… 96 major warships and submarines other than Polaris were in existence when the Conservative Government took office. By April this year, before the Falklands crisis—there have been some changes since then—the figure was down to 86. Despite the recent announcement, we shall see a further decline by the end of the decade. Of the 27 major warships that have entered service since 1979 or that will enter service over the next five years, only four have been ordered by the present Government."—[Official Report, Commons, 19/7/82, col. 53.]
That observation hardly reflects the attitude of a party neglectful of our defence responsibilities. I am sure no responsible Member of your Lordships' House would maintain for one moment that a Government should be free from critical appraisal of what has historically been a very controversial area of policy.
9.7 p.m.
Viscount Trenchard: My Lords, I do not feel any happier with a repeat performance, trying to answer 24 noble Lords in the whole wide area of defence, whereas noble Lords have mentioned that the other place has allotted five days. A knowledge of the subject, which I am getting a little of these days, is not a help to proceeding very quickly if one is to go over the problems in more detail.
My Lords, although there has been criticism, I think there has been more support for many areas, if not the whole, of my right honourable friend's balanced policy in relation to the main threats which this country faces than perhaps the criticisms have suggested. The noble Lord, Lord Chalfont, suggested that we were broadly right, bar one. The noble and gallant Lord, Lord Carver, found us right bar the same one, but he had slightly different points to make on that one, to which I shall come in a moment.
The noble Lord, Lord Peart, and the noble Lord, Lord Brooks of Tremorfa, has just repeated it, the noble Lord, Lord Kennet, and my noble friend Lord Mottistone, all asked why my right honourable friend had published the White Paper at this time unaltered. I thought that he had covered this fairly adequately and that I had done so in my introductory speech. But, on the one hand, the lessons are not yet clear as regards the Falklands; and on the other hand, the Falklands are—and a great many noble Lords have supported this thesis—a fairly unique, "one off" threat. There were many pressures, for many reasons which I do not have the time to go into, why the main part of the White Paper for the unaltered threat which faces us, should not go ahead. There were equally clear reasons as to why we should not rush at revision until we had analysed the lessons.
The noble and gallant Lord, Lord Hill-Norton, suggested that the lessons were already clear to him. But quite different lessons were clear to the noble and gallant Lord, Lord Carver. I can tell the noble
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and gallant Lord, Lord Hill-Norton, who suggested that if the analysis were done by professionals there would be no problem, that, indeed, there are professionals interpreting the, as yet, unchecked analysis in different ways in the Ministry, just as he and the noble and gallant Lord, Lord Carver, are drawing quite different conclusions from the present state of information.
There is not time to cover disarmament. Let me merely say that this Government will do all they can to ensure that the talks, both on intermediate weapons and on strategic weapons which are now taking place and were not last year, will go forward, and we shall certainly encourage progress to be made.
The noble Lord, Lord Zuckerman, drew my attention to the fact that the Russians have apparently recognised the need for inspection of chemical weapons. The noble Lord knows as well as I do the difficulty of a practical inspection for chemical weapons in particular, which can be stored in small quantities and made in a lot of different factories. We are pleased to have noted the Russians' remarks in that context and they will be followed up. But the noble Lord, I am sure, will exercise caution against the background of the huge stocks of these weapons that we know the Russians possess at present.
Lord Zuckerman: My Lords—
Viscount Trenchard: My Lords, I must answer 24 speakers and I want to get through inside half an hour.
I now turn to Trident which, in spite of any plea I might have made, has taken a certain amount of our debate. Perhaps I can bracket it under the general heading of "The Independent Deterrent". Let me start by saying that I totally endorse the remarks of my noble friend Lord Thorneycroft when he drew our attention to the fact that eight Governments of all persuasions have confirmed the need for a British independent strategic deterrent, and for a modern one and for it to kept up to date. If I could wave a magic wand—which I do not think I can do—and if I could bring back the noble Lord, Lord Zuckerman, to a post which he held a very long while ago, when he was one of those who advised that we should have it, I believe that he would agree with the current professional advice that we have, that the situation is unaltered and, therefore, in the ninth Government the advice that my right honourable friend is receiving is overwhelming.
The noble Lord, Lord Zuckerman, in reply to a question which I asked for clarification, said that it was his view that the independent deterrent could continue in the shape of Polaris. I can only tell him that all the professional advice we have is against that and we find it utterly convincing. I would say to the noble Lord, Lord Brooks, that it is not a question of our unwillingness to listen. With the resource problems that I outlined in my introductory speech, we have looked, and looked again—and we shall continue to listen to and look again—at any practical alternatives.
My right honourable friend has recently announced for instance, the need for the re-motoring, of the Polaris. The noble Lord, Lord Zuckerman, will note

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how long the existing motors have lasted and will be able to calculate that before we get to the next century we shall be doing it again, even in motors. It has been extremely difficult to do in motors. We have just managed to reach agreements to keep together parts of the United States industry that made the motors in the first place in order to make replica motors. There is no chance whatever of our being able to do the same thing in the mid-1990s.
We are not talking only of motors. The age expectancy of all parts of that missile system are known to us, and there is not one chance of our being able to retain Polaris in effective form into the next century, except at literally huge cost, even if we could do it. In addition, there are the arguments, which the noble Lord knows well, about the kind of vulnerability that our launch bases might have to face in the 1990s and in the next century, through indeed to the year 2020.
There is also a changed position as regards the penetration ability of that deterrent and the kind of defences that it will probably meet. It is the Government's view that there is no point in keeping an outdated deterrent which has no credibility. The noble Lord, Lord Kennet, suggested that we had too big a bang, and I think that he and others suggested that we did not need the accuracy. My right honourable friend has made it quite clear that we are getting more than we need at this stage in Trident D5. We do not plan to deploy more than we need. We believe, as I think the noble Lord suggested, that it is a relatively good buy.
As regards the question by the noble Lord, Lord Zuckerman, concerning how independent it will be, I can only draw his attention to the fact that we shall be dealing with submarines at sea for seven years, and missiles in tubes for seven years. It is very much dependent on the degree of spares that we choose to carry. But in any short-term sense, in terms of any threat that is likely to come upon us, the deterrent is totally independent, and will remain so.
If, almost inconceivably, we reached a stage, not where there could be a doubt as to whether or not our allies would really stand up and be counted with us, as my noble friend Lord Thorneycroft mentioned, but where we were drifting so far apart from the United States of America that the Alliance was in danger—and I do not contemplate it—we could take steps against this length of period and, as a first move of stocks, to start to make it totally independent if we so needed. I do not envisage such a thing happening.
The noble Lord, Lord Kennet, suggested that Trident was not disarmable—I think that that was his gist. He suggested that the French and the British independent deterrents would reach 25 per cent. of a reduced set of strategic weapons after the START talks had been successful. My right honourable friend the Secretary of State mentioned in the other place that in the future we would have approximately 3 per cent. of the Russian missile numbers. Whatever the percentage is in terms of comparability—and I do not want to go into more detail—I must say that at the present moment the percentage of strategic deterrent which Britain accounts for is a very small percentage of the American and of the Russian. The day could be reached—and let us hope that it is—when disarmament
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is so successful that 10 per cent. becomes a reality; that is, that the British deterrent looks as though it could reach 10 per cent. If that day is reached, I do not think that any British Government will be slow in playing their full part. But that day, in the Government's opinion, is not now.
The noble Lord, Lord Peart, and others have cast doubt once more on the £7½ billion estimate over a 15 or 18-year period, and have suggested £10 billion—as indeed have some outside writers. I do not believe that there are grounds for doubting the estimate in this area. Of course, the future is always uncertain, and one can never be completely certain, but the track record of British submarine builders, both for Polaris and for the hunter/killer submarines, has been extremely good. They have delivered on estimate. The track record of the American missile manufacturers in the case of Polaris has also been extraordinarily good. They have delivered on estimate in the past. The agreement fixes the research and development expenditure in dollars. In addition to that we have allowed a very considerable contingency.
The noble and gallant Lord, Lord Hill-Norton, said that it should not come out of the Navy budget. I would say to him—and I do not know the exact situation when he was Chief of Defence Staff—that the Secretary of State and the central staff of the Ministry, including the CDS and his central staff, decide what resources we need over the whole field of defence and what is the best use of a budget which is inevitably limited. We shall continue to do it that way. Therefore, it is not a fair suggestion to make, that because Trident expenditure will rise the rest of the Navy budget will be required to accommodate it. We shall use our resources in the best possible overall way.
The noble Lord, Lord Chalfont, produced an interesting and attractive sounding—and to me, new—phrase of a stable minimum deterrence. He won the support of the noble and gallant Lord, Lord Carver, for it. He mentioned that he was worried about the trend, and I think he suggested that Governments were planning to fight nuclear wars, limited or otherwise, and talking of winning nuclear wars. This Government certainly are not and I am not aware of our principal allies doing any such thing. It is not the Government's belief. The Government's belief is deterrence and avoiding the need to fight any kind of war through adequate deterrence at every necessary level.
The noble Lord, Lord Gladwyn, joined the theme of the argument at the stage of the risk of escalation. The Government accept that there is a risk of escalation. the Government do not accept that there would be automatic escalation. That in no way takes further the question of first use which we have argued in this House before and where I so totally agree with my noble friend Lord Thorneycroft that a deterrent inevitably has a situation of some doubt. But the position of the aggressor and the defender and the perceptions of the aggressor and the defender are quite separate. If we believe that we are dealing with six of one and half a dozen of the other, then I have no argument. But if we believe that the free democracies have no aspirations to attack—and I believe that—then we are dealing with a situation where we have to deter the aggressor from ever believing that an attack

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of any kind could achieve his aim, get his prize, at a cost acceptable to him—and the Russian pain level is high. Therefore, I agree totally that one cannot spell out the exact conditions in which a particular part of a deterrent might be used. I agree there is a risk of escalation, but we do not agree there would be automatic escalation.
The noble Lord, Lord Chalfont, offered a vista of a very attractive kind; of a non-nuclear deterrent capable of striking Russian territory and reserves and causing great damage, defeating their attacks and dealing with their second and third echelons. That is something to which I am very attracted and have, since I went to the Ministry of Defence, been, I think I can say, pushing to see how far new technology could deal with the massive superiority of Russian conventional forces on the European front.
The first thing I have to tell the noble Lord is that the cost of doing it—almost anything is technologically possible today—would be simply enormous. The second thing is that the Russian advance of technology has surprised our technologists. By concentrating all their resources in this field, they have indeed in some areas closed the gap of the lead of technology which the West previously held. One must, therefore, really not assume that if we were to develop it—and there are masses of different systems for smashing second and third echelon tanks at enormous cost, and everybody disagrees about the right one to pursue—Russian technology would not have an answer to it, because that is a too optimistic assumption to make.
I will not go over the arguments again, which I have been over so often with the noble Lord, Lord Carver, of the risk of a fast aggression with nuclear blackmail—possibly with more—with conventional attack, bringing about a decoupling of the Alliance by the sheer speed of its action and by the appalling consequences, which he describes so often, of any use of nuclear weapons. We believe in the fact that our holding of an independent deterrent in Europe on behalf of NATO is an insurance that in the Russian perception they will never believe that they could achieve the kind of decoupling I have suggested, or the kind of very quick blackmail of a nuclear kind, backed by conventional attack.
The noble Lord said he would value very much two extra armoured divisions on the Western Front. So would we all. But we must put that in the perspective of the 26 divisions that are there and we must contemplate the degree of superiority of the Warsaw Pact in each of the conventional intermediate range and strategic areas.
My noble friend Lord Thorneycroft said that there were perhaps some lessons from the Falklands which suggested that it might be a good thing, if possible, to have a sufficient power yourself because, when the chips are down, while friends are friends, that is not the same thing. The Government believe that, and believe it without, I hope, casting any aspersion on our alliances or our determination to keep those alliances alive.
I turn quickly to the conventional area. The noble Lord, Lord Peart, mentioned that we fortunately had three carriers. For the bulk of the Falklands operation we had two, as was planned at that time—the "Illustrious" has gone to sea only this month—so we
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achieved the Falklands campaign with two carriers. Because of the possible risk of one being in dock or otherwise engaged, my right honourable friend has already conceded that for the future we will go for three.
I find it hard to take from noble Lords opposite the criticism that we should strengthen our conventional forces. I recognise that the noble Lord, Lord Peart, said that he wanted us to try to persuade—and we have from time to time tried to persuade—European nations to spend more on their defence.
The GDPs are all different, and the percentage of GDPs is perhaps not the only consideration. But we have tried to persuade the European nations. I find it hard to take from the noble Lord's party criticism of our conventional defences because this year in documents of the Labour Party National Executive Committee it has been made clear—and previous statements have been repeated—that the Labour Party wishes to reduce defence expenditure. It did not support the 3 per cent. increase which we have been making for a number of years, and it wants to reduce the expenditure to the average level as a percentage of GDP of our European allies. If the Labour Party did that, not only would it have to cancel Trident, but it would have to do so 10 times over in the course of the years when Trident would be built.
I received considerable support from the noble and gallant Lord, Lord Carver, in relation to my right honourable friend's policy regarding the changes necessary in the Navy. I have to say to the noble and gallant Lord, Lord Hill-Norton, that I do not believe that there was ever any question of a rump of a Navy being left, and I consider that he places too much emphasis on ship numbers. I pointed out that, under my right honourable friend's policy with submarines, ship numbers would not by the end of the decade change from where they are today. But I would say to the noble and gallant Lord—I am sure that he knows the figures—that the reduction in numbers of platforms and ever more powerful weaponry is happening not only in the Navy. We had 1,500 combat aircraft in 1951, and we were down to under 500 at the beginning of this year. And I therefore believe that the 50 destroyer and frigate level will be maintained; on the increase in submarine numbers, I would say to the noble and gallant Lord, Lord Carver, that there will be an increased number. Admittedly it was a programme we inherited from out predecessors, but we are trying to increase it at the margins. How our predecessors would have paid for it is another question.
The noble Earl, Lord Cathcart, and the noble Lord, Lord Beloff, suggested that we could save considerable money by having unaccompanied a good percentage of our forces on the Continent. With time pressing I must say that I shall write to both of them. We have often looked at this question. A recent article in The Times we do not regard as at all accurate. Basically one has to split the household, the household of every man. One cannot have everybody having two summers and one winter. One has to have an equal number of people having two winters and one summer. That I believe is mathematically certain. So one really cannot do what is suggested in that regard.
There has been very considerable support—and the Government are very firm on it—for the view that our

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front line is the front line in Germany, where there are 350,000 German soldiers, 200,000 American soldiers, nearly 50,000 French soldiers, and big contributions from the smaller nations.
The noble Lord, Lord Newall, raised the matter of the future of our combat aircraft, and I have already answered an Unstarred Question on the subject. I shall give the noble Lord the reference relating to it, and at this stage I have nothing further to say to him about it. On air-to-air refuelling, I have noted his suggestion about the DC.10s. We are converting some Vulcans and Herculeses as a temporary expedient to extend the quantity of tankers, which, without question, have proved their value.
I could not agree with the noble Lord, Lord Murton, about the cost of Treasury delay. That does not mean that we always agree with the Treasury, but the main reasons for our resources problem were as I stated in my introductory remarks. I noticed the views on the "Atlantic Conveyor". One has to consider, when resources are short, the degree to which one should subsidise inevitably more expensive ships than a free company can buy elsewhere. Every million pounds of subsidy we spend in this direction is, from my point of view, a million pounds less that I will have available for essential weaponry, and so many of your Lordships have stressed the vital importance of essential weaponry.
I am always promising letters to my noble friend Lady Vickers, and I shall have to promise her a further one; but she overlapped with the noble Lord, Lord Hill-Norton. Our belief is that the two dockyards, when properly modernised and equipped, will support the number of modern and highly-powerful ships which we shall have, and will do it adequately. The shorter life policy is accompanied by a policy of fitting out in such a way that modern weapons particularly can be fitted in the shortest possible time. I will write to her further.
I have to say to the noble Lord, Lord Peart, in relation to Portsmouth, that while Portsmouth will remain a base and have certain other facilities, we have not granted an indefinite extension of the main dockyard facilities at Portsmouth; we have merely deferred. There is a difference between using in an emergency the facilities you have at that point of time and the question of whether, when you have fully equipped two modern dockyards, you will have sufficient facilities in the future.
My Lords, I would say to the noble Lord, Lord Kennet, as to space, that we really have our eye on that matter. He will remember—I think. I have said it in the House when he has been here before—that perhaps we should not get too alarmed about the development of space. Space stations, even space satellites, are extremely vulnerable in a time of hostilities, and I should like him to ponder on that. But that does not mean that we are not watching the developments extremely carefully.
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I should tell my noble friend Lord Beloff that we could always make sure that we have the perfect equipment, but, regrettably, with the resource problem as I have outlined it, and with the unknown way that threats will arise, I believe there will always be found to be deficiencies when the day comes. But the deficiencies on the recent occasion were minor; and I have already said to the noble Lord, Lord Mayhew, and I would say it to the noble Lord, Lord Gladwyn, as well, that our equipment for the main threat has been shown to be sufficiently flexible to deal with perhaps one of the hardest and most unique threats out of area.
I would echo the tributes that I failed to pay to the performance and the crew of HMS "Endurance", and the 14 ladies on the "Canberra". I should like to end as I began, by saying that I hope that, in looking through the record of this very interesting debate, noble Lords will realise that between them they have demanded more resources than can possibly be found, and that there is a need for a Secretary of State to strike a balance—and this, in my opinion, my right honourable friend has done extremely well. Any degree of change produces criticism, and I well remember my old father's remark to me when he said, "When you have ceased to be criticised in this world you have ceased to be achieving anything at all".
On Question, Motion agreed to.

Army, Air Force and Naval Discipline Acts (Continuation) Order 1982
Viscount Trenchard: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft order laid before the House on 5th July be approved.—(Viscount Trenchard.)
On Question, Motion agreed to.

Derwent Valley Railway Bill [H.L.]
Returned from the Commons agreed to.
Legal Aid Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments ordered to be printed.
Commercial Banking Company of Sydney Limited (Merger) Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.
  IRANIAN CITIZENS: LEAVE TO REMAIN IN UK
  IRANIAN CITIZENS: LEAVE TO REMAIN IN UK
  TAXI-CABS: ADVERTISING
  TAXI-CABS: ADVERTISING
  THE IRAN/IRAQ WAR
  THE IRAN/IRAQ WAR
  FISH CATCHES: DUMPING AT SEA
  FISH CATCHES: DUMPING AT SEA
  FALKLANDS DOCUMENTS: INSPECTION AT THE FCO LIBRARY
  FALKLANDS DOCUMENTS: INSPECTION AT THE FCO LIBRARY
  ALCOHOLIC PSYCHOSIS: CODING
  ALCOHOLIC PSYCHOSIS: CODING
  ALCOHOLIC INTAKE AND INDUSTRIAL ACCIDENTS
  ALCOHOLIC INTAKE AND INDUSTRIAL ACCIDENTS
  ALCOHOL ABUSE: ADVICE TO INDUSTRY
  ALCOHOL ABUSE: ADVICE TO INDUSTRY
  ALCOHOLISM: ARMED SERVICES PUBLICATIONS
  ALCOHOLISM: ARMED SERVICES PUBLICATIONS
  NHS: TREATMENT OF OVERSEAS STUDENTS
  NHS: TREATMENT OF OVERSEAS STUDENTS
  M.4 MOTORWAY: SEWAGE TREATMENT WORKS SMELL
  M.4 MOTORWAY: SEWAGE TREATMENT WORKS SMELL
  ESSEQUIBO: RECORDS
  ESSEQUIBO: RECORDS
  POLITICAL PUBLICATIONS: SCHOOLS
  POLITICAL PUBLICATIONS: SCHOOLS
  MISS ANNE SCOTT: REPRESENTATIONS
  MISS ANNE SCOTT: REPRESENTATIONS